Document:

Exhibit 10.2

 

FANTEX BRAND AGREEMENT

 

This Fantex Brand Agreement is entered into as of February 14, 2014 (“Effective Date”) by and between Fantex, Inc. (“Fantex”), on the one hand, and Erik R. Manuel, Jr. (“Talent”), jointly and severally with Kire Enterprises LLC (the “Company”), on the other hand.  For purposes of this Agreement, “Participant” shall refer to Talent and/or the Company, jointly and severally, as the context may require.  Sometimes each of Participant and Fantex are referred to herein as a “Party” and together as the “Parties.”

 

RECITALS

 

WHEREAS, Fantex operates a registered trading platform through which investors may buy and sell stock linked to the value and performance of an individual’s brand;

 

WHEREAS, Fantex desires to acquire an interest in Participant’s Brand Income (as defined below), which would be financed by an initial public offering of equity securities in the form of a tracking stock in Fantex that is linked to the separate economic performance and value of Participant’s brand, all pursuant to the terms and conditions of this Agreement; and

 

WHEREAS, Participant desires sell to Fantex an interest in Participant’s Brand Income pursuant to the terms and conditions of this Agreement.

 

AGREEMENT

 

NOW THEREFORE, in consideration of good and valuable consideration as set forth in this Agreement, the Parties do hereby agree as follows:

 

1.                        Defined Terms.  The following terms have the meanings specified or referred to in this Section 1:

 

1.1.                            “Affiliate” means, with respect to any specified Person, any Person that directly or indirectly Controls, or is under common Control with, or is Controlled by, such specified Person.

 

1.2.                            “Agreement” means this Fantex Brand Agreement, together with all exhibits, schedules and related documents attached hereto or referenced herein, including:

 

·                  Exhibit A:  Participant Questionnaire;

·                  Exhibit B:  Exclusions from and Examples of “Brand Income”;

·                  Exhibit C:  Standard Terms and Conditions;

·                  Exhibit D:  Closing Certificate;

·                  Exhibit E:  Quarterly Report;

·                  Exhibit F:  Spousal Consent; and

·                  Exhibit G:  Form of Irrevocable Payment Instructions.

 

1.3.                            “Brand Amount” means an amount equal to the product obtained by multiplying (a) any and all Brand Income earned by Participant (whether or not contracted or paid through any third party for or on behalf of Participant, such as a personal services corporation, agency, or otherwise) during the Term, less any applicable Merchandise Income Deduction, by (b) the Brand Percentage.

 

1.4.                            “Brand Percentage” means ten percent (10%).

 

1.5.                            “Brand Income” means any and all Gross Monies, other than Excluded Income, that are payable to Participant after the Effective Date as a result of Participant’s activities (including licensing or assignment of rights) in the Field, including (a) Distributions in connection with any

 

 

Indirect Fantex Equity or Indirect Fantex Co-Investments, and (b) an amount equal to the fair market value of any Merchandise Income.

 

1.6.                            “Brand Income Contract” means any Contract to which Participant is or becomes a party, or under which Participant is obligated to perform, or from which Participant receives any benefit, and in each case which is in the Field, other than Contracts excluded in their entirety (if any) pursuant to the definition of Excluded Income.

 

1.7.                            “Brand Investment Opportunity” has the meaning set forth in Section 8.

 

1.8.                            “Closing” has the meaning set forth in Section 5.1.

 

1.9.                            “Company” has the meaning set forth in the preamble to this Agreement.

 

1.10.                     “Contract” means any contract, commitment, or other arrangement or understanding (and all amendments and supplements thereto), whether written or oral.

 

1.11.                     “Control” (including, with its correlative meanings, “Controlled by” and “under Common control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).

 

1.12.                     “Direct Fantex Co-Investment” has the meaning set forth in Section 8.1.2.

 

1.13.                     “Direct Fantex Equity” has the meaning set forth in Section 7.1.2.

 

1.14.                     “Distributions” means any Gross Monies received by Participant as a result of Participant receiving, holding, transferring, selling and/or otherwise disposing of any stock or other equity interest issued pursuant to any Brand Income Contract (whether as Equity Income or pursuant to any equity purchased pursuant to a Brand Investment Opportunity), including any distributions, dividends, profit payments, proceeds resulting from the sale, lease, license, exchange, liquidation or other disposition of any equity or assets of the issuer of such Equity Income or Brand Investment Opportunity, or otherwise.

 

1.15.                     “Effective Date” means the date as set forth in the preamble to this Agreement.

 

1.16.                     “Equity Deal Notice” has the meaning set forth in Section.

 

1.17.                     “Equity Income” has the meaning set forth in Section 6.

 

1.18.                     “Escrow Holdback” means an amount equal to 5% of the Purchase Price (i.e., $248,750).

 

1.19.                     “Excluded Income” means as described on Schedule 1.19 attached to this Agreement.

 

1.20.                     “Exercise Payment” has the meaning set forth in Section 7.2.1.

 

1.21.                     “Fantex Co-Investment Interest” has the meaning set forth in Section 8.1.2.

 

1.22.                     “Fantex Equity Interest” has the meaning set forth in Section 7.1.2.

 

1.23.                     “FBS” means Fantex Brokerage Services, LLC, an Affiliate of Fantex.

 

1.24.                     “Field” means: (a) any activities in or substantially related to the Principal Business, including Talent’s employment as a Professional Athlete; (b) any and all of Participant’s activities, including any use of Participant’s Persona in connection with motion pictures, audio-visual programming (for television, Internet or otherwise), radio, music, literary, talent engagements, personal appearances, public appearances, records and recording, or publications; (c) any use of Participant’s Persona, including for purposes of advertising, merchandising, or trade (e.g., sponsorships, endorsements, appearances, etc.); and (d) any other activities performed by Participant which is of the type typically performed by individuals in the Principal Business arising out of or relating to being or having been a Professional Athlete or other professional within the 

 

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Principal Business (e.g., sports casting, coaching, participating in sports camps, acting as spokesperson, etc.)  In the event that there is any ambiguity as to whether an activity is in the Field, the Parties shall discuss in good faith and seek to resolve such matter.  In the event that a resolution is not met within thirty (30) days after initial notice by either Party to the other regarding such activity, then either Party shall be free to refer such matter to arbitration for resolution pursuant to the terms of Section 17.5 of the Terms and Conditions.

 

1.25.                     “FINRA” means the Financial Industry Regulatory Authority, Inc.

 

1.26.                     “Good Reason” means Talent’s resignation from his employment as a Professional Athlete for any of the following reasons: (a) Talent suffers or sustains a Major Injury which renders Talent incapable of performing as a Professional Athlete; or (b) Talent suffers or sustains a Major Injury after the Closing and a qualified medical physician (depending on the nature of the Major Injury) advises Talent that as a result thereof Talent is putting his physical health at substantial risk (i.e., a risk that is substantially greater than simply by virtue of Participant’s participation as a Professional Athlete) by continuing to perform as a Professional Athlete.

 

1.27.                     “Gross Monies” means any and all gross monies or other consideration of any type, including salaries, earnings, fees, royalties, bonuses, shares of profit, shares of stock, partnership interests, percentages and the total amount paid to Participant, and/or received by Participant or Participant’s heirs, executors, administrators or assigns, or by any other Person on Participant’s behalf, net of (a) any reasonable and documented out-of-pocket legal fees incurred by Participant in connection with securing, negotiating or preparing any Brand Income Contract which are not reimbursed or reimbursable, including pursuant to the terms of such Brand Income Contract, (b) any reasonable and documented travel, lodging and per diem expenses incurred by Participant or Participant’s representatives in connection with securing any Brand Income Contract, not to exceed Two Thousand Dollars ($2,000) per Brand Income Contract, to the extent actually paid by Participant and not reimbursed or reimbursable, including pursuant to the terms of such Brand Income Contract, and (c) self-employment taxes to which Participant is subject in connection with the receipt of such amounts or items to the extent that such amounts or items constitute Brand Income; but in each case, prior to the deduction or withholding of (x) any amounts payable to any third party (e.g., agency commissions), (y) any voluntary or personal deductions (e.g., contributions to retirement funds), or (z) any taxes required to be deducted or withheld by any federal, state or local government authority based on the net income of Participant (but excluding any deduction or withholding for payroll, medicare or FICA taxes or other deductions or payments required to be made to any federal, state or local government authority).

 

1.28.                     “Gross Proceeds” means an amount equal to the gross proceeds resulting from the Offering.

 

1.29.                     “Incremental Cost” has the meaning set forth in Section 8.4.1.

 

1.30.                     “Indirect Fantex Co-Investment” has the meaning set forth in Section 8.1.2.

 

1.31.                     “Indirect Fantex Equity” has the meaning set forth in Section 7.1.2.

 

1.32.                     “Investment Deal Notice” has the meaning set forth in Section 8.1.1.

 

1.33.                     “League” means the National Football League and its successors and assigns.

 

1.34.                     “Major Injury” means any injury, illness or medical condition sustained or incurred after the Closing.

 

1.35.                     “Merchandise Income” means any Brand Income in the form of any merchandise, services, service plans, or credits for any of the foregoing.

 

1.36.                     “Merchandise Income Deduction” means an annual (calendar year) deduction from Brand Income solely for the purpose of determining the Brand Amount for each calendar year, equal to

 

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the sum of (a) the fair market value of Merchandise Income, up to the lesser of (i) $40,000 and (ii) 4% (four percent) of all Brand Income (including Merchandise Income) received by Participant during such calendar year during the Term, and (b) the fair market value of any other Merchandise Income to the extent agreed to by Fantex in writing, in its sole and absolute discretion.

 

1.37.                     “Net Proceeds” means an amount equal to the Gross Proceeds, less the applicable Underwriting Amount payable to FBS, an Affiliate of Fantex, and such other underwriters selected by Fantex (together, the “Underwriters”).

 

1.38.                     “Nonrecurring Brand Income” means the Brand Income payable to Participant under any Brand Income Contract pursuant to which Participant is only entitled to receive a single payment under such Brand Income Contract.

 

1.39.                     “Offering” means an offering of the Series to the public pursuant to the Registration Statement.

 

1.40.                     “Owned Business Notice” has the meaning set forth in Section 9.1.1.

 

1.41.                     “Participant” has the meaning set forth in the preamble to this Agreement.

 

1.42.                     “Participant’s Persona” means Participant’s name, voice, likeness, image, caricature, biography, signature (including facsimile signature), personal talents, or live, photographed or recorded performance.

 

1.43.                     “Participant Owned Business” means any business or commercial venture (of whatever form, including sole proprietorship, partnership, limited liability company, corporation, franchise, etc.) that (a) is owned in whole or part, directly or indirectly, by Participant (other than as a Passive Investment) and not as a result of any Brand Income Contract, and (b) conducts operations or activities in or substantially related to the Principal Business, or otherwise uses Participant’s Persona in its legal name or “dba,” or to market, advertise or promote its business.

 

1.44.                     “Party” and “Parties” has the meaning set forth in the preamble to this Agreement.

 

1.45.                     “Passive Investment” means any investments by Participant in stocks or other equity, bonds, commodities, derivatives, debt or real estate, so long as (a) such investment is not received by Participant as compensation or consideration for activities (including licensing or assignment of rights) in the Field, (b) Participant is not obligated to provide any services related to the Field in connection with such investment (or the business or commercial venture related to such investment) and (c) the business or commercial venture related to such investment does not use Participant’s Persona in its legal name or “dba,” or in connection with its marketing, advertising or promotion.

 

1.46.                     “Person” means any individual, corporation, company, voluntary association, partnership, limited liability company, joint venture, trust, unincorporated organization or government (or any agency, instrumentality or political subdivision thereof).

 

1.47.                     “Personal Information Schedule” refers to the schedule of information provided by Participant to Fantex in a separate document to this Agreement as of the Effective Date, including Schedules 1 through 3 as referenced in the Participant Questionnaire attached hereto as Exhibit A.

 

1.48.                     “Pre-Closing Brand Amount” has the meaning set forth in Section 6.3.

 

1.49.                     “Purchase Price” means Four Million Nine Hundred Seventy Five Thousand Dollars ($4,975,000).

 

1.50.                     “Purchase Payment” has the meaning set forth in Section 8.2.1.

 

1.51.                     “Principal Business” means the sport of football, at the professional, college or other level, regardless of the country in which it is played or the league, association or other governing body as applicable.

 

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1.52.                     “Professional Athlete” means a professional football player.

 

1.53.                     “Registration Statement” means a registration statement for the Series on Form S-1 filed with the SEC.

 

1.54.                     “SEC” means the United States Securities and Exchange Commission.

 

1.55.                     “Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

1.56.                     “Series” means of a series of Fantex’s securities linked to the value of the Brand Amount.

 

1.57.                     “Talent” has the meaning set forth in the preamble to this Agreement.

 

1.58.                     “Term” has the meaning set forth in Section 13.

 

1.59.                     “Termination Date” has the meaning set forth in Section 11.1.

 

1.60.                     “Terms and Conditions” means the Fantex Brand Agreement Standard Terms and Conditions in the form attached to this Agreement as Exhibit C.

 

1.61.                     “Transaction Liability” has the meaning set forth in Section 8.4.1.

 

1.62.                     “Underwriting Amount” means underwriting commissions equal to five percent (5%) of the Gross Proceeds of the Offering.

 

2.                        Purchase Price.

 

2.1.                            Upon the terms and subject to the conditions of this Agreement, as full, final and complete consideration for the right to receive the Brand Amount and to participate in Equity Income and Brand Investment Opportunities during the Term, Fantex shall pay Participant an amount equal to the Purchase Price, less only the sum of the Escrow Holdback and the Pre-Closing Brand Amount.

 

2.2.                            The Escrow Holdback shall be deposited into an escrow account established in accordance with Section 5 of the Terms and Conditions.

 

3.                        Offering.

 

3.1.                            Subject to the terms and conditions of this Agreement, Fantex will use commercially reasonable efforts to conduct the Offering as promptly as practicable after the Effective Date.

 

3.2.                            Fantex hereby represents, warrants and covenants, as applicable, that following the Offering (if it occurs): (a) the Series shall be publicly traded on an exchange or alternative trading system registered with the SEC, (b) FBS shall be a broker-dealer registered with the SEC, and (c) FBS shall be a member of FINRA.

 

3.3.                            Upon written request from Participant from time to time after the commencement of the Offering, Fantex shall provide to Participant reasonable information regarding the progress in connection with the Offering and demand for the Series.

 

4.                        Financing Contingency.

 

4.1.                            The obligations of Fantex to pay the Purchase Price and consummate the transactions contemplated by this Agreement are subject to Fantex obtaining the financing to pay the Purchase Price as contemplated by the Offering, unless waived in writing by the Company.

 

4.2.                            If the Offering does not result in aggregate Net Proceeds at least equal to the Purchase Price (or Fantex does not otherwise waive such condition) on or before the earlier of (a) the date that is one month after the effectiveness of the Registration Statement and (b) June 30, 2014, or such later date agreed to in writing by the Parties, then as the sole and exclusive remedy therefor, each of Fantex and Participant shall have the unilateral right, exercisable in its sole and absolute discretion,

 

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to terminate this Agreement, which termination shall be automatically effective immediately upon delivery of written notice to the other Party.

 

5.                        Closing.

 

5.1.                            The consummation of the Offering (the “Closing”) shall occur on such date as shall be reasonably determined by Fantex, but in no event greater than ten (10) days, after either (a) Fantex has received commitments to purchase the Series such that the Net Proceeds would equal or exceed the Purchase Price, or (b) Fantex has elected in writing to waive the condition contained in the foregoing clause (a).

 

5.2.                            Upon Closing, Participant will execute and provide to Fantex a written certification in the form attached as Exhibit D.

 

6.                        Brand Amount; Assignment for Security; Deferral of Brand Income.

 

6.1.                            Except with respect to Brand Income in the form of stock or other equity interests (which is addressed in Section 7) or as otherwise agreed in writing by Fantex in its sole discretion with respect to Merchandise Income (on a case-by-case basis), Participant shall pay to Fantex an amount of cash equal to the Brand Amount, subject and pursuant to the terms of Section 4.1 of the Terms and Conditions.  To secure Fantex’s right to receive the payment equal to the Brand Amount, to the maximum extent permitted under applicable law in effect from time to time, Participant hereby assigns (as and when earned), or will assign when Participant has an assignable interest in any future Brand Amounts, to Fantex, all right, title and interest in and to the Brand Amount.

 

6.2.                            Prior to receipt of any Brand Income (other than Nonrecurring Brand Income) after the Closing, except as otherwise agreed to in writing by Fantex (email correspondence from the CEO, Chief Financial Officer or Chief Legal Officer of Fantex is acceptable), Participant shall (a) execute and deliver to each payor of Brand Income under all contracts existing at such time an irrevocable payment instruction in the form attached as Exhibit G, and (b) execute and deliver such additional documents or take such other actions as reasonably requested by Fantex to effectuate and perfect an assignment by Participant of the Brand Amount to secure Participant’s payment obligations to Fantex hereunder. To the extent that (x) any part of the Brand Amount is resulting from Nonrecurring Brand Income, (y) it is not commercially practical, without unreasonable burden to Participant, for installments of the Brand Amount to be delivered directly to Fantex, or (z) any assignment of the Brand Amount (or any portion thereof) is deemed invalid or not enforceable, then such installments of the Brand Amount shall be received by Participant as agent for Fantex, and Participant shall pay and deliver such installments of the Brand Amount to Fantex promptly after the receipt of the corresponding Brand Income by Participant (but in no event later than the fifteenth (15th) day following the receipt of such Brand Amount) pursuant to the timing and other terms as set forth in Section 4.1 of the Terms and Conditions.

 

6.3.                            Notwithstanding anything to the contrary herein, to the extent that Participant receives any Brand Income after the Effective Date but prior to the Closing, then within five (5) business days after receipt of such Brand Income (but no later than the Closing), Participant shall report to Fantex the amount and source of such Brand Income, but shall not be required to pay such Brand Amounts associated therewith (the “Pre-Closing Brand Amount”) prior to the Closing, which Pre-Closing Brand Amount shall be deducted from the Purchase Price to be paid to Participant hereunder.

 

6.4.                            In the event that Participant elects to voluntarily defer receipt of any Brand Income (so that such Brand Income is actually received by Participant at a date later than when Participant has the right to receive such Brand Income pursuant to the applicable Brand Income Contract), then for purposes of this Agreement, such Brand Income shall be deemed to have been received on the date that Participant has the right to receive such Brand Income pursuant to the applicable Brand Income Contract.

 

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7.                        Equity Income.  In the event that Participant receives, pursuant to any Brand Income Contract, stock or other equity interests (including membership interests and partnership interests), or options, warrants or other rights to acquire any of the foregoing interests in any other Person (collectively, “Equity Income”), then the following shall apply:

 

7.1.                            Notice and Response:

 

7.1.1.                  Participant shall provide reasonable advance written notice (an “Equity Deal Notice”) to Fantex prior to entering into any Brand Income Contract pursuant to which Participant may receive Equity Income, including all details reasonably necessary for Fantex to evaluate such Equity Income.

 

7.1.2.                  Fantex will use commercially reasonable efforts to respond to each Equity Deal Notice within five (5) business days (but no later than ten (10) business days), indicating whether or not Fantex elects to (x) participate in the applicable Equity Income by being issued and holding a direct equity interest in the applicable issuer of such Equity Income (“Direct Fantex Equity”) in an amount calculated by multiplying the Brand Percentage by the shares, membership interests, units (or other reasonable means of measurement) of such Equity Income payable to Participant (any of the foregoing, a “Fantex Equity Interest”), or (y) indirectly participate in the applicable Equity Income as described in Section 7.4 (“Indirect Fantex Equity”).

 

7.1.3.                  If Fantex fails to timely respond to any Equity Deal Notice, then Fantex shall be deemed to have expressly rejected receiving the Direct Fantex Equity with respect to such Brand Income Contract, and elected instead to receive Indirect Fantex Equity.

 

7.1.4.                  If the terms and conditions with respect to any Equity Income change from what were previously presented to Fantex in any Equity Deal Notice, then Participant shall provide a new Equity Deal Notice to Fantex with the updated terms and conditions, and this Section 7.1 shall apply to such new Equity Deal Notice.

 

7.2.                            Fantex Participation; Reimbursement of Costs:

 

7.2.1.                  If Participant is required to make any payment in consideration for such Equity Income (e.g. payments required by the terms of exercise of any options, warrants or other similar rights to acquire stock or other equity interests) (an “Exercise Payment”), and Fantex elects to receive either Direct Fantex Equity or Indirect Fantex Equity, then Fantex shall contribute to Participant (in the case of Indirect Fantex Equity), or pay directly to the applicable issuer (in the case of Direct Fantex Equity) an amount equal to the product of the Brand Percentage multiplied by such Exercise Payment timely and in accordance with the terms of the applicable Brand Income Contract relating to such Equity Income (which shall be deemed to include any subscription agreement, warrant, option agreement or other agreement pursuant to which Participant and Fantex, if applicable, is granted or issued such Equity Income).

 

7.2.2.                  Fantex shall pay to Participant an amount equal to the amount of any self-employment taxes payable by Participant, or the amount of any payroll, medicare or FICA taxes or other deductions or payments required to be made to any federal, state or local government (other than taxes based on the income of Participant), in each case to the extent resulting from any Direct Fantex Equity or Indirect Fantex Equity, as applicable.  Fantex shall pay such amounts due under this Section 7.2.2 within five (5) business days after receipt of notice from Participant detailing such amounts (which notice will be delivered after delivery of the stock certificates or other documentation evidencing such Equity Income, or in the case of a warrant, option or other similar right to acquire stock or other equity interest, after exercising such warrant, option or right to acquire the stock or other equity interest).

 

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7.2.3. In addition, to the extent that Participant incurs any additional cost or expense resulting from Fantex participating (whether via Direct Fantex Equity or Indirect Fantex Equity) in such Equity Income, then Fantex shall pay such incremental costs incurred by Participant (i.e., over and above such amounts that Participant would have incurred but for Fantex’s participation).

 

7.3.                            Direct Fantex Equity.  If Fantex elects to receive Direct Fantex Equity, then Participant shall use commercially reasonable efforts to cause the issuer of such equity to issue the applicable Fantex Equity Interest directly to Fantex; provided, however, that if (after such efforts by Participant) such issuer does not agree to issue the applicable Fantex Equity Interest directly to Fantex, then Fantex shall receive Indirect Fantex Equity with respect to such Equity Income as provided in Section 7.4.  If Fantex receives Direct Fantex Equity and Participant is required to execute any documentation (including subscription agreements, warrants and option agreements) for such Equity Income, then Fantex shall be required to execute substantially similar documentation, as applicable.

 

7.4.                            Indirect Fantex Equity.  If Fantex receives Indirect Fantex Equity (whether by Fantex’s election, or because the issuer of such Equity Income does not agree to issue Direct Fantex Equity to Fantex), then, without limiting Fantex’s obligations under Section 7.2, (y) Fantex shall be entitled to receive as part of the Brand Amount hereunder an amount equal to the Brand Percentage of any Distributions to Participant with respect to such Equity Income, and (z) upon Fantex’s request, Participant will grant to Fantex a security interest in such Equity Income, and will do all acts and execute and deliver, or cause to be executed and delivered, all agreements, documents and instruments that Fantex may reasonably require, and take all further steps relating to the Equity Income and such security interest that Fantex may reasonably require, to perfect such security interest and Fantex’s rights therein and hereunder.

 

8.                        Co-Investment Opportunity:  In the event that Participant receives, pursuant to any Brand Income Contract, the right or opportunity to invest in any other Person, including the right to purchase any stock or other equity interests (including membership interests and partnership interests) (each, a “Brand Investment Opportunity”), then the following shall apply:

 

8.1.                            Notice and Response:

 

8.1.1.                  Participant shall provide reasonable advance written notice (an “Investment Deal Notice”) to Fantex prior to entering into any Brand Income Contract pursuant to which Participant receives any Brand Investment Opportunity, including all details reasonably necessary for Fantex to evaluate such Brand Investment Opportunity.

 

8.1.2.                  Fantex will use commercially reasonable efforts to respond to each Investment Deal Notice within five (5) business days (but no later than ten (10) business days), indicating whether or not Fantex elects to (a) participate in the applicable Brand Investment Opportunity by being issued and holding a direct equity interest in the applicable issuer of such equity (“Direct Fantex Co-Investment”) in an amount calculated by multiplying the Brand Percentage by the number of shares, membership interests, units (or other reasonable means of measurement) applicable to such Brand Investment Opportunity (any of the foregoing, a “Fantex Co-Investment Interest”), or (b) indirectly participate in the applicable Brand Investment Opportunity as described in Section 8.4 (“Indirect Fantex Co-Investment”).

 

8.1.3.                  If Fantex fails to timely respond to any Investment Deal Notice, then Fantex shall be deemed to have expressly rejected participating as either a Direct Fantex Co-Investment or an Indirect Fantex Co-Investment with respect to such Brand Investment Opportunity, and elected instead to not participate in such Brand Investment Opportunity.

 

8.1.4.                  If the terms and conditions with respect to any Brand Investment Opportunity change from what were previously presented to Fantex in any Investment Deal Notice, then

 

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Participant shall provide a new Investment Deal Notice to Fantex with the updated terms and conditions, and this Section 8.1 shall apply to such new Equity Deal Notice.

 

8.2.                            Fantex Participation; Reimbursement of Costs:

 

8.2.1.                  If Participant is required to make any payment as consideration for any equity interest being issued in connection with such Brand Investment Opportunity (e.g., payments required for the purchase of any such equity interests) (a “Purchase Payment”), and Fantex elects to participate in such Brand Investment Opportunity either as a Direct Fantex Co-Investment or an Indirect Fantex Co-Investment, then Fantex shall contribute to Participant or such other Person as the Parties may mutually agree depending on the structure of the Indirect Fantex Co-Investment (in the case of an Indirect Fantex Co-Investment), or pay directly to the applicable issuer (in the case of a Direct Fantex Co-Investment) an amount equal to the product of the Brand Percentage multiplied by such Purchase Payment timely and in accordance with the terms of the applicable Brand Income Contract relating to such Brand Investment Opportunity (which shall be deemed to include any subscription agreement, purchase agreement or other agreement pursuant to which Participant and Fantex, if applicable, participates in such Brand Investment Opportunity).

 

8.2.2.                  In addition, to the extent that Participant would incur any additional cost or expense resulting from Fantex participating (whether via Direct Fantex Co-Investment or Indirect Fantex Co-Investment) in such Brand Investment Opportunity (including costs relating to the structuring or documentation of any joint ventures, investment vehicles, special purpose entities or similar relationships between the Parties to hold the securities relating to such Brand Investment Opportunity), then Fantex shall pay directly, or reimburse Participant for, such incremental costs incurred by Participant (i.e., over and above such amounts that Participant would have incurred but for Fantex’s participation).

 

8.3.                            Direct Fantex Co-Investment.  If Fantex elects to participate in a Direct Fantex Co-Investment, then Participant shall use commercially reasonable efforts to cause the issuer of such equity to issue the applicable Fantex Co-Investment Interest directly to Fantex; provided, however, that if (after such efforts by Participant) such issuer does not agree to issue the applicable Fantex Co-Investment Interest directly to Fantex, then Fantex shall instead participate via an Indirect Fantex Co-Investment with respect to such Brand Investment Opportunity as provided in Section 8.4.  If Fantex participates in a Direct Fantex Co-Investment and Participant is required to execute any documentation (including subscription agreements and purchase agreements) in connection with such Brand Investment Opportunity, then Fantex shall be required to execute substantially similar documentation, as applicable.

 

8.4.                            Indirect Fantex Equity.

 

8.4.1.                  If Fantex participates in a Brand Investment Opportunity via an Indirect Fantex Co-Investment (whether by Fantex’s election, or because the issuer of the equity interest related to such Brand Investment Opportunity does not agree to permit a Direct Fantex Co-Investment), then, without limiting Fantex’s obligations under Section 8.2, (a) Fantex shall be entitled to receive as part of the Brand Amount hereunder an amount equal to the Brand Percentage of any Distributions to Participant with respect to such Brand Investment Opportunity, and (b) upon Fantex’s request, Participant will grant to Fantex a security interest in such equity acquired pursuant to such Brand Investment Opportunity, and will do all acts and execute and deliver, or cause to be executed and delivered, all agreements, documents and instruments that Fantex may reasonably require, and take all further steps relating to the Brand Investment Opportunity and such security interest that Fantex may reasonably require, to perfect such security interest and Fantex’s rights therein and hereunder.  For the avoidance of doubt, and notwithstanding anything to the contrary contained elsewhere in this Section 8, it is the mutual intention of the Parties (to be interpreted in the broadest possible manner) that Participant shall not have, incur or suffer any liability, responsibility, damage, cost or

 

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expense, including any self-employment taxes payable by Participant, or the amount of any payroll, medicare or FICA taxes or other deductions or payments required to be made to any federal, state or local government, in connection with Fantex participating in a Brand Investment Opportunity via an Indirect Fantex Co-Investment (collectively, a “Transaction Liability”), regardless of its structure or the events or circumstances leading thereto, in excess of the Transaction Liabilities that Participant would have had, incurred or suffered had Fantex not participated in such Brand Investment Opportunity (such excess, the “Incremental Cost”).  Furthermore, if any Indirect Fantex Co-Investment results in Participant incurring any Incremental Cost, then, within five (5) business days after delivery by Participant to Fantex of reasonably satisfactory supporting documentation, Fantex shall pay Participant an amount equal to such Incremental Cost.

 

8.4.2.                  In the event that Fantex elects to participate in a Brand Investment Opportunity other than via a Direct Fantex Co-Investment, then (without limiting the effect of Section 8.4.1 with respect to Incremental Costs), the Parties shall in good faith use best efforts to structure such transaction in a manner that is efficient to both Parties from an overall tax and expense perspective.

 

9.                        Participant Owned Businesses.  In the event that Participant intends to invest in (alone or with others) or establish a business that would qualify as a Participant Owned Business after the closing of such investment, then the following shall apply:

 

9.1.                            Notice and Response.

 

9.1.1.                  Participant shall provide reasonable advance written notice (an “Owned Business Notice”) to Fantex prior to commencing or investing in any business that would meet the definition of a Participant Owned Business, including all details reasonably requested by Fantex in writing, which are necessary for Fantex to evaluate such Participant Owned Business.

 

9.1.2.                  Fantex will use commercially reasonable efforts to respond to each Owned Business Notice within five (5) business days (but no later than ten (10) business days), indicating whether or not Fantex elects to participate in the applicable potential Participant Owned Business by being issued and holding an equity interest in the Participant Owned Business in an amount calculated by multiplying the Brand Percentage by the shares, membership interests, units (or other reasonable means of measurement) of such Participant Owned Business to be held by Participant.

 

9.1.3.                  If Fantex fails to timely respond to any Owned Business Notice, then Fantex shall be deemed to have expressly rejected participating in the Participant Owned Business.

 

9.1.4.                  If the details of any Participant Owned Business change from what were previously presented to Fantex in any Owned Business Notice, then Participant shall provide a new Owned Business Notice to Fantex with the updated terms and conditions, and this Section 9.1 shall apply to such new Owned Business Notice.

 

9.2.                            Fantex Participation; Reimbursement of Costs.

 

9.2.1.                  If Fantex elects to participate in any Participant Owned Business, then (subject to Section 8.2.5) Fantex shall contribute to the applicable Participant Owned Business an amount of investment capital equal to the product of the Brand Percentage multiplied by the amount of the capital investment to be made by Participant in accordance with the terms contained in the Owned Business Notice (or otherwise mutually agreed by the Parties).  Notwithstanding Fantex’s election to participate in a Participant Owned Business, except as otherwise agreed to in writing by Participant and Fantex, Fantex shall have the same rights or entitlements with respect to its investment in such Participant Owned Business pari passu with the rights or entitlements of Participant and other rights provided by statute or the charter or other governing documents of such Participant Owned Business.

 

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9.2.2.                  Fantex shall pay such amounts due under this Section 9.2 within five (5) business days after receipt of notice from Participant detailing such amounts, and provided that Fantex has received delivery of the applicable stock certificates or other documentation evidencing such participation by Fantex prior to, concurrent with or within a commercially reasonable time after such payment being due.

 

9.2.3.                  In addition, to the extent that Participant incurs any additional cost or expense resulting from Fantex participating in such Participant Owned Business, then Fantex shall promptly pay, or reimburse Participant for, such incremental costs incurred by Participant (i.e., over and above such amounts that Participant would have incurred but for Fantex’s participation).

 

9.2.4.                  If Participant is required to execute any documentation (including subscription agreements, warrants and option agreements) in connection with any Participant Owned Business, then Fantex shall execute substantially similar documentation, as applicable, in connection with its participation.

 

9.2.5.                  If Fantex elects to participate in any Participant Owned Business pursuant to this Subsection 9, but such direct participation by Fantex is not possible for any reason, then the Parties shall cooperate in good faith to devise and implement commercially reasonable means (without causing any undue burden to Participant) for Fantex to indirectly participate and receive the same practical benefit of a direct participation in such investment.

 

10.                 Merchandise Income.  In the event that Participant receives Merchandise Income, then the Brand Income applicable to such Merchandise Income shall be equal to the fair market value of such goods or services determined as follows: (a) the Parties shall seek to reach mutual agreement of such value within ten (10) business days after receipt thereof by Participant, and (b) if the Parties fail to reach such agreement within such period of time, then the Parties shall engage an independent third party appraiser (if the Parties fail to mutually agree on an appraiser within five (5) business days, then either Party may petition JAMS to promptly appoint such an appraiser), and the Parties shall be bound by the determination of any such appraiser, which shall be delivered in writing within fifteen (15) days after the appraiser’s selection or appointment.  The cost and expenses associated with such an appraiser (and any petition to JAMS) shall be shared by the Parties in proportion to their respective interest in such Brand Income (i.e., Fantex shall pay a portion of such costs and expenses equal to the Brand Percentage).

 

11.                 Claw Back.

 

11.1.                     Claw Back.  If Talent resigns from his employment as a Professional Athlete in the League at any time prior to the second anniversary of the Closing for any reason other than Good Reason, Fantex may elect, in its sole discretion, to terminate this Agreement upon written notice to Participant (the date of such notice is hereinafter referred to as the “Termination Date”).  In the event of such termination, Participant shall pay to Fantex, not later than thirty (30) days following the Termination Date, an amount equal to (a) the Purchase Price plus an amount equal to the Underwriting Amount, minus (b) all Brand Amounts previously paid to Fantex, including the Pre-Closing Brand Amount.  In addition, Participant shall concurrently pay to Fantex interest on the Purchase Price at the rate of five percent (5%) per annum, measured from the date the Purchase Price was paid to Participant.

 

11.2.                     Dispute Resolution.  In the event of any dispute between Fantex and Participant concerning whether there is Good Reason for any resignation by Talent from his employment as a Professional Athlete, then the Parties shall engage in informal, good faith discussions and attempt to resolve such dispute.  If the Parties are unable to resolve such dispute, then existence of Good Reason shall be determined by a qualified physician selected by agreement of the Parties or, if no agreement can be reached, then each Party shall select a physician qualified in the field applicable to the claimed

 

11

 

Good Reason, and those two physicians shall select a third physician qualified in such field to make the final determination regarding such claimed Good Reason.

 

12.                 Limited Brand Income Encumbrances.

 

12.1.                     In addition to (i.e., exclusive of) the Brand Percentage, Participant shall ensure that the aggregate amount of all other encumbrances on any Brand Income in connection with the payment of agents, financial advisors and any other fee arrangements based on a percentage of Participant’s income (or any portion thereof) shall not exceed a maximum of (a) fifteen percent (15%) of all Brand Income resulting from any employment or player contracts in any given year, and (b) thirty percent (30%) of all other Brand Income in any given year.

 

12.2.                     Without Fantex’s prior written approval, Participant shall not enter into any other arrangement similar to this Agreement (i.e., pursuant to which Participant receives compensation in exchange for a portion of Participant’s future Brand Income) with respect to any portion of the Brand Income.

 

13.                 Term.  The term of this Agreement shall commence as of the Effective Date and shall continue in perpetuity unless and until terminated pursuant to the terms of this Agreement (the “Term”).

 

14.                 Notices.  All notices, requests, consents and other communications required or given by the Parties hereunder shall be in writing and shall be deemed to be delivered (a) on the date delivered, if personally delivered or transmitted via facsimile or electronic mail with return confirmation of such transmission; (b) on the business day after the date sent, if sent by recognized overnight courier service and (c) on the fifth day (or on the next business day thereafter if such fifth day is not a business day) after the date sent, if mailed by first-class certified mail, postage prepaid and return receipt requested, to the addresses of the applicable Party set forth below:

 

If to Participant:

 

Erik R. Manuel, Jr.

c/o Life Line Financial Group

8447 Wilshire Blvd., Suite 450

Beverly Hills, CA 90211

Attention: Mr. Humble Lukanga

Fax: (323) 297-5433

 

with a copy (which is required, but not alone sufficient, to constitute notice hereunder) to:

 

O’Hara General Counsel

4151 Redwood Ave.

Suite 208

Los Angeles, CA 90066

Attention: Joe O’Hara, Esq.

Fax: (424) 228-2083

Email: joe@oharagc.com

 

If to Fantex:

 

Fantex, Inc.

330 Townsend Street, Suite 234

San Francisco, CA 94107

Attention: Mr. David Mullin, Chief Financial Officer, and

Mr. Bill Garvey, Chief Legal Officer

 

12

 

with a copy (which is required, but not alone sufficient, to constitute notice hereunder) to:

 

Latham & Watkins

140 Scott Drive

Menlo Park, CA 94025

Attn: Patrick Pohlen

Fax: (650) 463-2600

Email: Patrick.Pohlen@lw.com

and

David Blood

Fax: (213) 891-8763

Email: David.Blood@lw.com

 

15.                 Standard Terms and Conditions.  The Parties agree to be bound by Fantex’s Standard Terms and Conditions attached hereto as Exhibit C (the “Terms and Conditions”), which are incorporated herein by this reference.  Any reference in this Agreement or the Terms and Conditions to this “Agreement” shall be deemed to be a reference to this Agreement and the Terms and Conditions, taken as a whole.

 

Upon execution by both Participant and Fantex, this Agreement and the exhibits attached hereto shall constitute a binding commitment of the Parties, as the entire agreement and understanding between the Parties concerning the subject matter hereof and thereof, and shall supersede and replace all prior negotiations, proposed agreements, and discussions, written or oral, relating hereto or thereto.

 

[Signatures on following page]

 

13

 

Please confirm your agreement with the foregoing by signing where indicated below.

 

	
PARTICIPANT:
    	
FANTEX:
    
	
 
    	
 
    
	
Erik   R. Manuel, Jr.
    	
Fantex, Inc.
    
	
 
    	
 
    
	
By:
    	
/s/   Erik R. Manuel, Jr.
    	
 
    	
By:
    	
/s/   David Mullin
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
2/14/14
    	
Name:
    	
David   Mullin
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
CFO
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
2/14/14
    

 

	
Kire   Enterprises LLC
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Erik R. Manuel, Jr.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Erik   R. Manuel, Jr.
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Sole   Member
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
2/14/14
    	
 
    

 

Signature Page

 Brand Agreement 

 

Schedule 1.19

 

Excluded Income

 

Not Applicable

 

 

Exhibit A

Participant Questionnaire

 

Please answer each of the following questions correctly and completely as of the Effective Date.  The completeness and accuracy of each such statement must be answered from the perspective of both the Company and Talent, as applicable, and must be initialed by Talent on behalf of himself and Company where indicated.  Capitalized terms used but not defined in this questionnaire shall have their respective meanings set forth in the Brand Agreement to which this questionnaire is attached (the “Agreement”).

 

IMPORTANT:  Review each of the following statements and initial each statement where indicated.  By placing your initials next to each below statement you hereby represent, warrant and covenant, as applicable, that each such statement is true and complete, except only as otherwise disclosed on Schedule 3 of the Personal Information Schedule delivered to Fantex in connection with the Agreement.

 

In addition, please provide copies of all documents or other information specifically requested as part of the below statements and/or relevant to any matter for which additional information has been disclosed pursuant to Schedule 3 of the Personal Information Schedule.

 

IT IS IMPORTANT FOR PARTICIPANT TO ENSURE THE ACCURACY AND COMPLETENESS OF ALL INFORMATION PROVIDED TO FANTEX, WHICH WILL BE RELIED UPON BY FANTEX IN CONNECTION WITH THE POTENTIAL SECURITIES OFFERING AND OTHER MATTERS UNDER THIS AGREEMENT.

 

	
Initials
    	
 
    	
Statement
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
1.   I have read and fully understand the terms and conditions of the   Agreement, and I have had the opportunity to be represented by an attorney in   the review, negotiation and execution of the Agreement and performance of my obligations   thereunder.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
2.   I have not made, nor will I hereafter make, any grant, license   or assignment whatsoever, which might conflict with or impair the complete   enjoyment of the rights and privileges granted to Fantex under the Agreement.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
3.   I do not require any consent, approval, authorization or permit   from, or filing or notification to, any Person in connection with my   execution and delivery of the Agreement, and performance of my obligations   thereunder.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
4.   I am not subject to any condition, restriction, disability or   obligation (whether physical, legal or contractual), and am otherwise not   aware of any material nonpublic information, which could prevent or interfere   with my continued participation as a Professional Athlete in a manner   consistent with such participation throughout the preceding year, and I will   promptly disclose the occurrence of any such event to Fantex as required   pursuant to Section 6.2 of the Terms and Conditions.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
5.   I have never been convicted in a criminal proceeding, nor have I   been named the subject of a criminal proceeding that is presently pending   (excluding only traffic violations and similar minor offenses).
    

 

1

 

	
Initials
    	
 
    	
Statement
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
6.   Except only as listed on Schedule 1 of the Personal   Information Schedule, no other Person has any right to receive any   portion of my Brand Income in the form of any commission, royalty or other   payment based on a percentage or set amount of some or all of the Brand   Income. I have secured all necessary consents to make available for review by   Fantex (and have so made available) a complete copy of each Contract pursuant   to which any such payments are owed.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
7.   No other Person has any right to demand or receive any portion   of the Brand Income in a manner that conflicts with any rights granted to   Fantex under this Agreement with respect to the Brand Amounts.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
8.   I Control all assets of Participant, including, if I have   delegated the management of any assets to a third party (“Manager”),   then I have also retained the right in my discretion (a) to approve   and/or disapprove any decision by a Manager regarding Participant’s assets,   and (b) to remove any Manager and/or change Managers at any time.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
9.   To the extent that I have delegated, or during the Term do   delegate, the management of any of my assets to a Manager, then throughout   the Term (subject only to the death or incapacity of Talent), I will:    (a) retain the right in my discretion to remove any Manager and/or   approve or disapprove any decision by a Manager regarding my assets,   (b) exercise reasonable control and oversight regarding each Manager’s   activities in connection with my assets, and (c) cause any such Manager   to comply with the terms and conditions of the Agreement, as applicable.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
10. I am not a party (plaintiff or defendant) in any lawsuit,   government investigation, arbitration or other legal action, and to my   knowledge, there is no valid basis for any of the foregoing.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
11. I am not subject to any judgment, order or decree of any court or   other government authority.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
12. Schedule 2 of the Personal Information Schedule consists of   (a) a complete list of all Brand Income Contracts under which   Participant is obligated to perform, or from which Participant is entitled to   receive any benefit, on or after the Effective Date, and (b) a   description of any Participant Owned Businesses.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
13. I have provided or made available to Fantex true, correct and   complete copies of each written Brand Income Contract, and an accurate   detailed written summary of each oral Brand Income Contract.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
14. I am currently, and during the past three years have been, in   compliance with all material terms under each Brand Income Contract, to the   extent applicable, and Participant and I have not received any notice   regarding any breach, default, termination or attempt to renegotiate, with   respect to any Brand Income Contract.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
15. I am not aware of any facts or circumstances that would cause the   payments under the Brand Income Contracts to be materially less than the   amounts specified in the Brand Income Contracts.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
16. I am not aware of   any material breach by any other party under any Brand Income Contract.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
17. I have timely paid any taxes, fees or withholdings required by any   state or federal or international government authority. I have also timely   filed all forms and documentation required in connection with any such taxes,   fees or withholdings.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
18. I am not, and have not been subject to any audit by a government   authority in connection with any taxes or governmental fees. I am not subject   to any unsatisfied judgments or tax liens.
    

 

 

	
Initials
    	
 
    	
Statement
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
19. I have not conducted business, applied for or secured credit in,   or received any official government identification under, any name or alias,   other than the name listed in Section 1 of the Personal Information   Schedule provided by Participant concurrently herewith.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
20. Neither I, nor any business owned or Controlled by me, has ever   declared bankruptcy or settled any debt for less than the amounts actually   owed.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
21. I have the ability to pay all of my debts and obligations as such   debts mature and I do not have any present intention to incur debt beyond my   ability to pay as such debts mature.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
22. I am not in violation of, and, subject to the immediately   following sentence, throughout the Term will not violate in any material   respect, any (a) laws, codes, permit requirements, rules, regulations,   ordinances and/or provisions of any foreign, federal, state or local   government authority, including with respect to employment, health and   safety, wage and hours, improper payments, bribery, taxation or securities   laws; or (b) rules, standards or requirements of any league,   organization, governing body or association to which I am a member or under   which I am bound to comply in connection with my participation in the   Principal Business as a Professional Athlete, including regarding gambling,   anti-doping, or reporting of any injury or incidents. Notwithstanding the   immediately preceding sentence, I am agreeing to the covenant contained   in the foregoing clause (b) on the express condition that any violation   by me of any “on field” rules of play (as stated in the applicable   League rulebook, as modified from time to time), or the interpretation or   enforcement of any of such rules of play, in each case solely to the   extent that it relates to my actions on the field of play (regardless of   whether any such violation carries with it a fine, suspension or any other   economic consequence to me imposed by the League or other applicable association),   shall not be deemed to be a breach of the foregoing clause (b).
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
23. Without limiting the effect of any statement in this Exhibit A   (Participant Questionnaire), all of the documents and information that I have   provided, and will provide, to Fantex in connection with the Agreement   (including the Personal Information Schedule) are true, correct and complete   in all material respects, except with respect to any statement that, by its   terms, is already limited as to materiality. My responses to this   questionnaire (and any documents or other information provided by me to   Fantex in connection with the Agreement) do not, and will not, contain any   untrue statement or fail to state a material fact necessary to not make any   of such information not misleading, in light of the circumstances in which it   was provided.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
24. I have disclosed all facts and circumstances that could reasonably   be expected to be material to Fantex or a reasonable investor or potential   investor in the Series in the context of the transactions contemplated   by the Agreement, including any event required to be reported to the league,   organization, governing body or association to which I am a member or under   which I am bound to comply in connection with my participation in the   Principal Business as a Professional Athlete. I acknowledge my ongoing   obligations throughout the Term to disclose certain facts and circumstances   to Fantex as required pursuant to the terms of this Agreement, including as   set forth in Section 6 of the Terms and Conditions.
    
	
 
    	
 
    	
 
    
	
EM
    	
 
    	
25. I have obtained advice from my advisors regarding the legal, tax   and accounting consequences of entering into the Agreement, becoming a Fantex   participant and the transactions contemplated by the Agreement, and I am not   relying on any representation, warranty or statement made by Fantex, or any   of its representatives or advisors, regarding such legal, tax and accounting   consequences of becoming a Fantex participant and the transactions   contemplated by the Agreement. I acknowledge and agree that Fantex is not,   and will not at any time be, an agent or representative to Participant.
    

 

 

Exhibit B

 

Exclusions From and Examples of Brand Income

 

The contents of this Exhibit B are incorporated by reference into and made a part of that certain Brand Agreement between Fantex and Participant to which it is attached (the “Agreement”).  Capitalized terms used but not defined in this Exhibit B shall have their respective meanings contained in the Agreement.

 

The following sources of revenue shall not be included in Brand Income:

 

a.              Any revenues resulting from Participant’s Passive Investments.

 

b.              Any income earned from employment, services rendered or other activities not in the Field.

 

c.               Any reasonable reimbursement of incidental expenses actually incurred by Participant, including travel, lodging, per diem and other incidental expenses, or the value of any such items paid by a third party on Participant’s behalf.

 

d.              Any Excluded Income.

 

Examples of income that would be Brand Income or businesses that would be Participant Owned Businesses include the following:

 

·                  50 Cent received an equity stake in Energy Brands as part of an endorsement deal for Vitamin Water.  The equity received by 50 Cent would be considered Equity Income under Section 6 of the Agreement because it was consideration for 50 Cent’s endorsement services and publicity rights.

·                  Magic Johnson founded Magic Johnson Enterprises to provide entertainment, products and services to urban communities. Commercial ventures pursued by Magic Johnson Enterprises may be a Participant Owned Business that Fantex would have the opportunity to participate in subject to Section 9 of the Agreement, and if so could result in Brand Income.  For example, any basketball camps owned by Magic Johnson Enterprises would be deemed Participant Owned Business because they are in the Field, and operating basketball camps is an activity typically undertaken by a professional basketball player.  However, a 24-Hour Fitness club owned by Magic Johnson Enterprises (but not bearing or branded with the Magic Johnson name) would not be considered a Participant Owned Business because Magic Johnson’s name and likeness are not used to promote the clubs.  Similarly, businesses owned by Magic Johnson such as movie theaters, restaurants and coffee shops that do not bear or are not branded with the Magic Johnson persona would not be considered Participant Owned Businesses (and thus not result in Brand Income), because those types of businesses neither relate to the Principal Business nor utilize Magic Johnson’s name in connection with its marketing, advertising or promotion.

·                  Talent plays any role on an episode of a television program.  Compensation paid to Talent for his performance in such episode would be considered Brand Income.

·                  Talent plays any role in a motion picture (or a made for TV movie, or a feature film distributed over the Internet).  Compensation paid to Talent for his performance in such motion picture would be considered Brand Income.

·                  Talent becomes the host of The Tonight Show.  Compensation paid to Talent for his services as a talk show host for The Tonight Show would be considered Brand Income.

·                  Talent receives a car lease worth $12,000 (i.e., value of monthly lease of $1,000) in exchange for endorsement services for a local car dealership, a $25,000 clothing allowance from an apparel company in exchange for endorsement services, and $3,000 worth of products and service plans

 

 

from a wireless phone carrier (i.e., a total of $40,000 of Merchandise Income) in exchange for endorsement services.  All of such Merchandise Income would be included in Brand Income.  However, solely for purposes of calculating the Brand Amount, Participant would be entitled to deduct from its Brand Income for such year all of such Merchandise Income under its Merchandise Income Deduction (assuming that such amount is less than 4% of all Brand Income earned by Participant that year).  If, in addition to the foregoing Merchandise Income, Participant also received computer equipment in exchange for endorsement services from a retailer with a fair market value of $5,000, then such $5,000 of Merchandise Income would not be deductible from Brand Income for such year because it exceeds the amount of the allowable Merchandise Income Deduction.

·                  Talent receives a 2014 Chevrolet Corvette Stingray as the Super Bowl XLVIII Most Valuable Player.  The cash value of the MSRP of the Corvette would be considered Brand Income because it was earned by Talent for his performance as a Professional Athlete.  However, solely for purposes of calculating the Brand Amount, up to $40,000 (or 4% of all Brand Income, if less than $40,000) of such value would be deductible from Brand Income for such calendar year under the Merchandise Income Deduction (and assuming there were no other Merchandise Income Deductions) for such year.

 

Examples of types of income that would not be Brand Income include the following:

 

·                  John Elway received an equity stake in Fantex Holdings, Inc., the parent company of Fantex, because he serves on the board of directors.  John Elway’s equity stake in Fantex Holdings, Inc. would not be considered Brand Income because his service as a director of Fantex Holdings is not in the Field.

·                  Arnold Schwarzenegger served as the governor of California from 2003 to 2011. His income from the state of California would not be considered Brand Income because it is not in the Field.

·                  Kerri Strug was employed as an elementary school teacher and in various positions at the U.S. Treasury and Justice Departments. Her employment as a teacher and various positions at the U.S. Treasury and Justice Departments would not be considered Brand Income because such employment was based on her educational background, training and professional skills unrelated to gymnastics, and her salary did not exceed the ordinary amount paid to employees in such position with a similar educational background, training and professional skills and is not in the Field.

 

2

 

Exhibit C

Fantex Brand Agreement

Standard Terms and Conditions

 

1.              General; Definitions; Interpretation.

 

These Fantex Brand Agreement Standard Terms and Conditions (these “Terms and Conditions”) are incorporated by reference into and made a part of that certain Brand Agreement between Fantex and Participant to which it is attached (the “Agreement”). Capitalized terms used in these Terms and Conditions and not otherwise defined herein, shall have the meaning set forth in the Agreement.  In the event of any inconsistency or conflict between these Terms and Conditions and the Agreement to which these Terms and Conditions is attached, the terms of the Agreement shall govern.

 

2.              Offering.

 

2.1.              Offering. Fantex will use commercially reasonable efforts to conduct the Offering of the Series as promptly as practicable after the Effective Date.  In connection with such Offering, Participant recognizes that Fantex shall have the sole and exclusive right to (and to authorize any other Person to) promote and offer for sale the Series in connection with the Offering.

 

2.2.              Further Assurances; Credit Report Consent. Participant shall execute and deliver to Fantex such further documents, information, consents, forms, instruments, certificates, and other deliveries as Fantex shall reasonably request in writing to further effectuate the intentions of the Parties under this Agreement, or so Fantex can comply with any applicable legal requirements and Participant recognizes that Fantex will rely on information provided by Participant in the preparation and submission of the Registration Statement and materials to meet other reporting obligations as required by applicable law.  Participant shall reasonably cooperate with Fantex, upon Fantex’s specific request, in connection with the offering, marketing and sales of the Offering and the Series; provided, that any such cooperation that would require any personal services on the part of Talent shall be at times and for durations mutually agreed to by Fantex and Participant; provided further, that any such personal services in the form of a personal appearance by Talent shall be on terms mutually agreed to by Fantex and Participant. Participant hereby consents to Fantex and its agents or representatives (i) obtaining reports of Participant’s credit records from time to time throughout the Term of this Agreement (as reasonably determined by Fantex and at Fantex’s sole cost and expense), and (ii) using the information from that report in connection with any diligence related to Participant and the Offering, and reporting obligations under applicable law.  Upon request by Participant, Fantex shall provide to Participant a copy of any report of Participant’s credit records that is received by Fantex.

 

2.3.              Participant Name and Likeness.  Fantex shall have the non-exclusive, irrevocable, fully paid, worldwide right to use and to authorize other Persons, as determined by Fantex, in its reasonable discretion, to use Participant’s Persona from the Effective Date until the termination of this Agreement through any and all distribution channels in connection with the offering, marketing and sales of the Offering or the Series; provided, however, that Fantex shall not make any use, or authorize any other party to make any use, of any part of Participant’s Persona without the prior written approval of Participant; provided further, that any use of Participant’s Persona approved by Participant shall be deemed to be approval of subsequent uses of the same previously approved use until the time that Participant provides written notice to the contrary to Fantex.

 

2.4.              Participant Restrictions.

 

(i)               No Promotion of Series. Except as otherwise expressly approved by Fantex in writing, Participant shall not, and shall not authorize any other Person to, solicit, promote or offer the Series in connection with the Offering.  To the extent that Participant receives unsolicited requests for information regarding the Offering or the Series, then except as otherwise expressly approved by Fantex in writing, Participant shall refer such inquiry to the Registration Statement or to one of the Underwriters of the Offering.

 

(ii)            No Assignment of Similar Rights. Participant has not and will not assign or grant to any other Person rights to receive a portion of Brand Income other than (a) as may be granted in the ordinary course of pursuing activities in the Principal Business (such as commissions payable to an agent or financial advisors); (b) in a manner that will not conflict with the rights granted to Fantex, or the obligations of Participant, hereunder with respect to any installment payment of the Brand Amount, and (c) in an amount that would not violate any other the terms of this Agreement.

 

3.              Purchase Price.

 

3.1.              Payment.  Within fifteen (15) days after the Closing of the Offering, Fantex shall pay to Participant an amount equal to the Purchase Price, less the Escrow Holdback and less the Pre-Closing Brand Amount, via wire transfer (less any fees charged by any third party in 

 

 

connection with such transfer, such as bank fees) pursuant to the instructions provided in the Personal Information Schedule, or such updated wire transfer instruction as may be provided by Participant to Fantex in writing from time to time.

 

4.              Brand Amount.

 

4.1.              Payment Terms.

 

(i)               Direct Payment.  Participant shall deliver an irrevocable payment instruction in the form attached as Exhibit G to the Agreement to each payor of Brand Income (other than Nonrecurring Brand Income), and otherwise use commercially reasonable efforts to ensure that the Brand Amount is assigned to Fantex and delivered directly to Fantex from each such payor of Brand Income.  To the extent that direct payment from the source of the Brand Income is not commercially practical, without unreasonable burden on Participant, or any assignment of Brand Income is deemed invalid or not enforceable, then Participant shall comply with paragraph (ii) below and use commercially reasonable efforts to set up automated payments of installments of the Brand Amount through Participant’s banking relationships.

 

(ii)            Alternative Payment; Timing.  To the extent that it is not commercially practical, without unreasonable burden on Participant, for Brand Amounts to be delivered directly to Fantex from any payor of Brand Income, or any assignment of Brand Income is deemed invalid or not enforceable, then Participant shall receive such portion of the Brand Amount as agent for Fantex and will deliver such portion of the Brand Amount to Fantex as and when (or as promptly as practicable after) such Brand Income is received by Participant; provided, however, that in no case shall any Brand Amount be delivered later than fifteen (15) days following receipt of funds by Participant (or any other Person on behalf of Participant) with respect to such payment.

 

(iii)         Wire Transfer.  Except as otherwise approved by Fantex in writing, each installment payment of the Brand Amount shall be made via wire transfer pursuant to the wire transfer instructions provided by Fantex to Participant in writing, as may be updated by Fantex from time to time; provided, however, that to the extent that any individual installment payment of the Brand Amount is less than $500, such amount may be paid via check.

 

4.2.              Additional Provisions.

 

(i)               In the event that Participant is prohibited from making payment of any installment of the Brand Amount at the time when same is due and payable to Fantex hereunder by reason of any applicable laws, including currency regulations, Participant shall promptly so advise Fantex and Participant shall, upon Fantex’s request, deposit any such blocked funds to the credit of Fantex in a bank or banks or other depository institution as permitted by law and designated in writing by Fantex, or pay them promptly to such Persons as Fantex may designate in writing consistent with applicable law.

 

(ii)            Participant acknowledges and agrees that time is of the essence in connection with its payment obligations hereunder.  In the event that any payment due to Fantex hereunder is not paid in full by the applicable date due (unless there is a cure period, then by the date the cure period ends), then, without limiting any other rights or remedies of Fantex, Participant shall also pay to Fantex interest on such amount at the rate of the lesser of (a) the then current prime rate (as reported in the Wall Street Journal) plus three percent (3%) per year, compounded monthly, or (b) the maximum rate permitted by applicable law, measured from the date such amount was due until it is fully paid.

 

(iii)         Participant acknowledges and agrees that Fantex may disclose to the public any material breach by Participant of this Agreement, including any failure of Participant to pay any amounts as and when due hereunder (subject to applicable notice and cure periods contained herein); provided, that Fantex covenants and agrees not to make any such disclosure without first notifying Participant and giving Participant a reasonable amount of time to cure such breach, except that no such cure period is required in the event of at least two prior instances of a similar breach (with such notice provided in each instance) during the 12 months period prior to such breach.

 

4.3.              Records.  Participant shall, and shall cause its Affiliates to, maintain (until at least twelve months after termination of this Agreement), records of all Brand Income Contracts, receipts, invoices, reports and other documents relating to the Brand Income and Brand Amount for at least the then current year and previous three (3) calendar years (or such longer period as may be required by law); provided, that the foregoing obligation shall not extend to any time period prior to the Effective Date.

 

4.4.              Audit Rights.  Commencing upon the Effective Date and continuing through the date that is twelve (12) months after termination of this Agreement (“Audit Period”), Fantex or its representatives shall have the right to inspect and make copies of the books and records of Participant (and its Affiliates) relating to the Brand Income Contracts, the Brand Income and Brand Amount.  Such audit shall be at Fantex’s sole cost and expense and shall not cover any period greater than the current year and previous three (3) calendar years at the 

 

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time of such audit, provided that if an audit reveals an underpayment of the Brand Amount by greater than five percent (5%) for the period being audited, then Participant shall reimburse Fantex for its reasonable and documented audit costs.  In any case, either (a) Participant shall promptly pay to Fantex any underpaid amount, together with any interest thereon as provided in Section 4.2(ii) of these Terms and Conditions or (b) Fantex shall promptly pay to Participant any overpaid amount together with interest at the same rate provided in Section 4.2(ii) of these Terms and Conditions; provided, that at Participant’s election, Participant may set off against the immediately following installment payment of the Brand Amount an amount equal to such overpayment.  Fantex shall not audit Participant’s books and records more frequently than once per year during the Audit Period.  Fantex shall provide Participant with reasonable advance written notice that it will be conducting an audit, and any such audit shall be conducted during normal business hours.

 

5.              Escrow Holdback.

 

5.1.              Escrow Amount.  Participant hereby authorizes and instructs Fantex to deduct from the Purchase Price otherwise payable to Participant, an aggregate amount equal to the Escrow Holdback.  Fantex shall deposit the Escrow Holdback into an escrow account (the “Escrow Account” and all such funds included in the Escrow Account, the “Escrow Funds”) established pursuant to the terms of a written escrow agreement (the “Escrow Agreement”) mutually agreed among the Parties and Wells Fargo Bank, N.A., or any other financial services institution agreed to in writing by the Parties (the “Escrow Agent”) based on the form of agreement provided by Escrow Agent as modified to be consistent with the terms of this Agreement, as applicable.

 

5.2.              Use of Escrow Amount.  In the event that Participant fails to timely deliver any installment payment of the Brand Amount prior to the release of Escrow Funds pursuant to Section 5.3 of these Terms and Conditions, then in addition to and without limiting any other rights or remedies available to Fantex, upon written notice from Fantex to the Escrow Agent and Participant, the Escrow Agent shall release to Fantex (up to the amount of available Escrow Funds) an amount equal to such due installment payment of the Brand Amount as notified by Fantex.  Participant shall promptly replenish the Escrow Account by depositing in the Escrow Account an amount equal to any Escrow Funds that are released to Fantex pursuant to this Section 5.2 of these Terms and Conditions.

 

5.3.              Release of Escrow Amount.  Within five (5) business days immediately following the first consecutive six (6) month period after the Closing during which all installment payments of the Brand Amount have been timely delivered to Fantex when due (subject to applicable notice and cure periods contained herein), then the Escrow Agent shall deliver to Participant all amounts then remaining in the Escrow Account, the Escrow Agreement shall be terminated, and Participant shall thereafter have no obligation to maintain any amounts in the Escrow Account.

 

5.4.              Ownership of Escrow Holdback.  The Parties agree to treat the Escrow Holdback as owned by Fantex until released to Participant pursuant to terms hereof; provided, that any interest accrued on the Escrow Holdback shall be the property of Participant.

 

5.5.              Controlling Terms. In the event of any conflict or inconsistency between the terms of this Section 5 and the terms of the Escrow Agreement, the terms of the Escrow Agreement shall govern.

 

6.              Information Rights; New Contracts.

 

6.1.              Quarterly Reports.  Within ten (10) business days after the end of each calendar quarter during the Term, Participant shall provide to Fantex a report in the form mutually agreed by the Parties (each a “Quarterly Report”), which shall detail all Brand Income earned during such quarter, detail the calculation of the Brand Amount for such quarter with respect to such Brand Income, and provide such additional information and certifications required to be included in the Quarterly Report, including such matters as specified in Exhibit E.

 

6.2.              Material Change.  Participant shall promptly provide written notice to Fantex if at any time after the Effective Date and during the Term of this Agreement, there occurs any condition, restriction, disability or obligation (whether physical, legal or contractual) that will or could reasonably be expected to (i) prevent or materially interfere with Participant’s continued performance under any Brand Income Contract and/or participation in the Principal Business as a Professional Athlete, , or (ii) result in any of the representations or warranties made by the Participant on Exhibit A to be untrue in any material respect; provided, that Participant shall not have any obligation to notify Fantex of the contents of any Brand Income Contract provided by Participant to Fantex, including the expiration of any contract pursuant to its terms.

 

6.3.              Brand Income Contracts.  Throughout the Term, Participant shall promptly (and in any case, no later than five (5) business days after the occurrence of the applicable event, and prior to any public announcement thereof) notify Fantex, in writing, and provide copies of all relevant documents and correspondence related to each 

 

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such occurrence (including copies of all Brand Income Contracts), in the event that:

 

(i)               Participant enters into any Brand Income Contract, including any amendments, modifications or supplements to an existing Brand Income Contract, after the Effective Date (“New Brand Income Contract”);

 

(ii)            Participant receives any notice of termination, cancellation, breach or default under any Brand Income Contract;

 

(iii)         Participant becomes aware of any event which, with the passage of time or the giving of notice or both, would result in any material default, breach or event of noncompliance by Participant under any Brand Income Contract;

 

(iv)        Participant becomes aware that any other party to any Brand Income Contract is in material breach thereof or default thereunder; or

 

(v)           there are any renegotiations of or outstanding rights to renegotiate any material amounts paid or payable to Participant under any of the Brand Income Contracts with any Person, or Participant receives any demand for such renegotiation.

 

6.4.              New Brand Income Contracts.  Upon the execution of a New Brand Income Contract, Participant shall be deemed to represent and warrant that such New Brand Income Contract is valid, binding and enforceable against Participant, and enforceable by Participant against the other parties thereto, in accordance with their respective terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally, and subject, as to enforceability, to the effect of general principles of equity, as may apply.

 

6.5.              Disclosure of Brand Income Contracts.

 

(i)              Notwithstanding anything herein to the contrary, Fantex may publicly disclose the terms and conditions of any New Brand Income Contract, to the extent that such disclosure is required in connection with any filing related to the Offering or the Series, as determined by Fantex, upon advice of counsel in connection with such disclosure.

 

(ii)            Participant shall use commercially reasonable efforts to cause each counterparty to a Brand Income Contract containing a legal, valid and binding confidentiality obligation of Participant existing as of the Effective Date (each, a “Confidential Brand Income Contract”), to consent to Fantex’s disclosure of the terms and conditions of such Confidential Brand Income Contract to the extent required by any governmental or quasi-governmental bodies or agencies, or self-regulatory organizations, including the SEC and FINRA; provided, that Fantex shall not make any disclosure of any terms or conditions of such an existing Confidential Brand Income Contract if such counterparty fails to so consent; provided further, that failure to obtain a counterparty’s consent with respect to an existing Confidential Brand Income Contract shall not in itself be a breach of this Agreement by Participant so long as Participant has complied with the terms of this paragraph.  Participant shall ensure that any necessary consents to permit disclosure of each New Brand Income Contract (as permitted pursuant to Section 6.5(i) of these Terms and Conditions) are obtained so that such disclosure will not result in any breach of any confidentiality obligation to any Person.

 

(iii)         Fantex shall, in consultation with Participant, use commercially reasonable efforts to secure confidential treatment, or similar protection, with respect to any disclosure of any information contained in any New Brand Income Contract which could reasonably be expected to be sensitive to, or the confidential information of, any counterparty to such New Brand Income Contract.

 

(iv)        From time to time, as Participant is negotiating or reviewing any potential Brand Income Contract (or any renewal of a Brand Income Contract), Fantex will respond to reasonable requests from Participant (including all relevant details with respect to such potential new or renewed Brand Income Contract) regarding whether or not the terms of such potential Brand Income Contract would be expected to be material and require disclosure pursuant to Section 6.5(i) of these Terms and Conditions, assuming such Brand Income Contract were executed at the time of such response.  Participant may decide in its sole and absolute discretion whether or not to execute any potential Brand Income Contract (or any renewal of a Brand Income Contract).

 

6.6.              Brand Income Statements.  Concurrent with delivery of each Quarterly Report (as required by Section 6.1 of these Terms and Conditions), Participant shall also provide copies of all receipts, invoices, pay stubs, or other documents evidencing all Brand Income referenced in the applicable Quarterly Report.

 

6.7.              Marital Status.  Participant shall use reasonable efforts to secure the signature of Participant’s spouse on the spousal consent attached hereto as Exhibit F.  In the event that Participant fails to secure such signature, and as a result a portion of the Brand Income of Participant is deemed “community property” or Participant’s spouse can otherwise claim legal ownership to any Brand Income, then Participant shall nonetheless be required to calculate and deliver any installment payments of the Brand Amount based on the entirety of the Brand Income (including any such portion thereof that is deemed to be 

 

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such spouse’s share of community property or otherwise property of such spouse).

 

6.8.              Additional Information.  Participant shall provide to Fantex such additional information as Fantex shall reasonably request from time to time (in a reasonable amount of time after such request) in connection with the Brand Income and Participant’s participation in the Principal Business; provided, that Fantex shall use commercially reasonable efforts to limit any such requests to no more than once per calendar quarter.

 

7.              Taxes.

 

7.1.              Related to Purchase Price.  Participant shall be solely responsible for the payment of all taxes on the Purchase Price.  Fantex shall be entitled to deduct and withhold any amounts required by applicable law to be deducted and withheld from the Purchase Price and such withheld amounts shall be treated as paid to Participant.  Fantex shall not be required to indemnify or “gross up” Participant for any such amounts withheld.  Participant will indemnify Fantex for and hold it harmless from and against any taxes of Participant, which may be sought against, imposed upon or suffered by Fantex or which Fantex may incur as a result of Fantex’s failure to deduct and withhold such taxes from the Purchase Price payable under this Agreement.

 

7.2.              Related to Brand Amounts.  Fantex shall be solely responsible for the payment of all taxes on the Brand Amounts.  Participant shall be entitled to deduct and withhold any amounts required by applicable law to be deducted and withheld from any installment payment of the Brand Amount.  To the extent that any such installment payment of the Brand Amount is made directly from the payor to Fantex and a withholding obligation is imposed on Participant and Participant has no ability to withhold or cause the payor to withhold from such Brand Amounts the required amounts, then Fantex shall make a payment to Participant (for remittance to the applicable taxing authority), within five (5) business days after receipt of such installment payment, equal to the amount that Participant would have been entitled to deduct and withhold hereunder had such installment payment been made by the payor to Participant and subsequently remitted by Participant to Fantex.  Any such withheld amounts, or amounts paid by Fantex to Participant for remittance to the applicable taxing authorities, shall be treated as having been paid to Fantex.  Participant shall not be required to indemnify or “gross up” Fantex for any such amounts withheld.  Fantex will indemnify Participant for and hold it harmless from and against any taxes of Fantex which may be sought against, imposed upon or suffered by Participant or which Participant may incur as a result of Participant’s failure to deduct and withhold such taxes from any installment payment of the Brand Amount to be delivered under this Agreement.

 

8.              Participant Representations and Warranties.

 

Participant hereby represents, warrants and covenants, as applicable, to Fantex that the statements contained in the Participant Questionnaire attached to the Agreement as Exhibit A, and the statements contained in this Section are and will be true and correct as of the Effective Date and throughout the Term (except only if a different time period is expressly provided).

 

8.1.              Authority.  Participant is free and authorized to enter into this Agreement, to make the covenants, representations and warranties contained herein and to grant the rights granted herein.

 

8.2.              Ownership and Control of Company. Talent is, and throughout the Term shall remain, the sole owner and have Control of the Company (other than in the case of death or incapacity of Talent).

 

8.3.              Organization. Company is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization.

 

8.4.              Binding Agreement. This Agreement constitutes a valid and binding obligation of Participant (and its successors and heirs), enforceable in accordance with its terms subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally, and subject, as to enforceability, to the effect of general principles of equity, as may apply.  Participant and its successors and heirs, as applicable, will not challenge the validity or enforceability of this Agreement, or any portion thereof, in any action, proceeding, arbitration or otherwise.

 

8.5.              No Conflict.  Participant has not made nor will make any grant, license or assignment whatsoever, which will or could reasonably be expected to conflict with or impair the substantial enjoyment of the rights and privileges granted to Fantex hereunder; and, the execution and performance of this Agreement by Participant does not, and will not, violate or conflict with any agreement, arrangement, understanding or restriction, written or oral, between Participant and any other Person.

 

8.6.              Brokerage.  Except as expressly contemplated by this Agreement, there are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement based on any contract to which Participant is a party or that is otherwise binding upon Participant.

 

8.7.              Intellectual Property.  No intellectual property provided by Participant to Fantex at any time in

 

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connection with this Agreement will violate the rights of privacy or publicity, constitute a libel or slander or infringe upon the copyright, literary, personal, private, civil, property or other rights of any Person.

 

9.     Fantex Representations and Warranties.

 

Fantex represents, warrants and covenants, as applicable, to Participant, as of the Effective Date and throughout the Term:

 

9.1.     Organization.  Fantex is duly incorporated, validly existing and in good standing under the laws of the State of Delaware.

 

9.2.     Authority.  Fantex possesses all requisite corporate power and authority necessary to enter into and carry out the transactions contemplated by this Agreement.

 

9.3.     Binding Agreement. This Agreement constitutes a valid and binding obligation of Fantex, enforceable in accordance with its terms subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally, and subject, as to enforceability, to the effect of general principles of equity, as may apply.  Fantex will not challenge the validity or enforceability of this Agreement, or any portion thereof, in any action, proceeding, arbitration or otherwise.

 

9.4.     No Conflict. The execution and performance of this Agreement by Fantex does not, and will not, violate or conflict with any agreement, arrangement, understanding or restriction, written or oral, between Fantex and any other Person.

 

9.5.     Brokerage.  Except as expressly contemplated by this Agreement, there are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement based on any contract to which Fantex is a party or that is otherwise binding upon Fantex.

 

9.6.     Permits.  Fantex and its Affiliates have all permits, licenses, consents and approvals from all applicable governmental and quasi-governmental bodies and agencies, and all self-regulatory organizations, including the SEC and FINRA, necessary for it to carry out the intents and purposes of this Agreement.

 

10.  Confidentiality; Public Statements/Disclosures.

 

10.1.  Confidentiality.  Each Party agrees that the Confidential Information of the other Party will be maintained confidentially and will not be disclosed to any other Person except: (a) as may be required by law or to comply with a valid order of a court of competent jurisdiction, in which event the Party making such disclosure shall promptly notify the other Party and shall seek confidential treatment of such information; (b) to a Party’s employees, agents and representatives (including accountants, auditors, legal advisors, underwriters, etc.), provided that such recipients of the Confidential Information are bound by confidentiality obligations with respect to such disclosure; (c) in order to enforce such Party’s rights under this Agreement; or (d) if mutually agreed to by the Parties in writing or otherwise permitted under this Agreement.  “Confidential Information” means all confidential, proprietary, or commercially sensitive data, materials and/or other information that is either identified as, or reasonably expected to be, confidential information.  Confidential Information of Fantex includes the existence of this Agreement and terms and conditions of this Agreement (until and then only to the extent that such is publicly disclosed by Fantex), and any other non-public information in connection with the Offering, the Series, or Fantex or its Affiliates.  This Section 10 will survive the expiration or termination of this Agreement.

 

10.2.  Public Statements.  Participant will not issue any press release or public statement in connection with the execution of this Agreement, the Series and/or the Offering without Fantex’s prior written consent, which consent Fantex may withhold in its sole discretion.  Fantex will not issue any press release or public statement in connection with this Agreement or which makes any reference to Participant, in each case, without Participant’s prior written consent, which consent will not be unreasonably withheld or delayed and shall be deemed granted if Participant fails to respond to any request for such consent within three (3) days after Fantex requests such consent in writing, in accordance with the notice requirements set forth in the Agreement.

 

10.3.  Fantex Disclosures. Notwithstanding anything herein to the contrary, Fantex shall have the right to disclose the terms and conditions of this Agreement and/or any other information provided by Participant related to this Agreement or the Offering or Series (including Brand Income Contracts, subject to Section 6.5 of these Terms and Conditions), to the extent that such disclosure is required by applicable law in connection with any filing related to the Offering or the Series.  Fantex shall, in consultation with Participant, use commercially reasonable efforts to secure confidential treatment, or similar protection, with respect to any disclosure of personal and confidential information provided by Participant, including the terms and conditions of this Agreement and such information as is provided in the Personal Information Schedule.

 

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11.  Obligation to Negotiate.

 

At any time after the Series either ceases to be listed on an exchange or “alternative trading system” or is converted into another security of Fantex or any of its Affiliates, Participant may deliver a written notice to Fantex (a “Discussion Notice”) requesting that Fantex engage in negotiations with Participant in good faith to terminate this Agreement (“Good Faith Negotiations”).  The Parties shall be obligated to commence Good Faith Negotiations within thirty (30) days after Participant’s delivery of a Discussion Notice.  Any termination of this Agreement shall only be on terms mutually agreed to in writing by the Parties.

 

12.  Termination.

 

12.1.  By Mutual Consent.  This Agreement may be terminated by mutual written consent of Participant (or its successors and heirs) and Fantex.

 

12.2.  By Either Party.  This Agreement may be terminated by either Party by delivering written notice of termination to the extent such is permitted pursuant to Section 3.2 of the Agreement.

 

12.3.  Effect of Termination.  Upon the effective date of termination, the rights and obligations of the Parties under this Agreement will cease, except for rights and obligations arising out of Sections 4, 7, 10, 14, 16 and 17 of these Terms and Conditions (to the extent applicable).

 

13.  Assignment.

 

13.1.  The rights and obligations of Fantex under this Agreement will inure to the benefit of and will be binding upon the successors and assigns of Fantex, and Fantex shall have the right to assign its rights and delegate its obligations hereunder (a) in whole or in part to any Affiliate of Fantex, and (b) in connection with a merger, acquisition, corporate restructuring, financing, sale of all or substantially all of its assets, or similar such transaction.

 

13.2.  This Agreement is personal to Participant, and Participant does not have the right to assign this Agreement, whether by operation of law or otherwise, or to delegate any duties or obligations imposed upon Participant under this Agreement without Fantex’s prior written consent; except only that this Agreement shall be automatically assigned and binding on Participant’s successors and heirs upon the death of Participant; provided, that any assignment and assumption of this Agreement by a personal services corporation (or “loan-out” corporation) that is wholly owned and Controlled by Talent in connection with a conversion or merger of the Company into such a corporation shall be expressly authorized hereunder so long as Talent remains the Participant hereunder, jointly and severally with such surviving corporation.

 

14.  Indemnification.

 

14.1.  Participant hereby agrees to indemnify and hold harmless Fantex, its parents, subsidiaries, Affiliates, assigns, successors, and each of their respective officers, directors, agents, representatives and employees (collectively, “Fantex Indemnified Party(ies)”), from and against any and all liabilities, actions, claims, suits, proceedings or investigations of government, quasi-government or administrative agencies, liens, judgments, demands, losses, costs, expenses and damages, including reasonable attorneys’ fees and costs and any and all damages of any kind and nature whatsoever (a “Claim”), arising out of or relating to any breach by Participant, directly or indirectly through any other Person, of any of the terms, covenants, conditions, representations or warranties contained in this Agreement.

 

14.2.  Fantex hereby agrees to indemnify and hold harmless Talent, Company and each of their respective Affiliates, heirs, assigns, successors, and each of their respective officers, directors, members, managers, agents, representatives and employees, as applicable, (collectively, “Participant Indemnified Party(ies)”), from and against any and all Claims by any third party (including any and all Claims brought by any holder of the Series or group of class thereof) arising out of or relating to Participant being a party to this Agreement (except those arising out of or relating to any breach by Participant, directly or indirectly through any other Person, of any of the terms, covenants, conditions, representations or warranties contained in this Agreement), including any and all Claims arising out of or relating to (a) any breach by Fantex of any of the terms, covenants, conditions, representations or warranties contained in this Agreement, (b) any violation of any law by Fantex, including any securities laws or any rules or regulations promulgated thereunder, or (c) the Offering, the Series, or the Registration Statement.

 

14.3.  A Fantex Indemnified Party or Participant Indemnified Party, as applicable (the “Indemnified Party”), shall promptly deliver a written notice to the Party from whom indemnification is sought (the “Indemnifying Party”), providing notice (a “Claim Notice”) of any Claim asserted or filed by a third party (a “Third-Party Action”) within twenty (20) days (or such shorter period as reasonably necessary to permit timely response to such Claim) after receipt by the Indemnified Party of notice of such Third-Party Action.  Delay or failure to notify the Indemnitor in accordance with this Section 14.3 will not relieve the Indemnifying Party of any liability that it may have to the Indemnified Party, except to the extent the

 

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defense of such Claim is prejudiced by the Indemnified Party’s delay or failure to give such Claim Notice.  Such Claim Notice shall describe in reasonable detail (to the extent known by the Indemnified Party) the facts constituting the basis for such Third-Party Action and the amount of the claimed damages. Within twenty (20) days after delivery of such Claim Notice, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such Third-Party Action with counsel selected by the Indemnifying Party, subject to the Indemnified Party’s approval, which shall not be unreasonably withheld, conditioned or delayed. If the Indemnifying Party does not so assume control of the defense of a Third-Party Action, the Indemnified Party shall have the right to control such defense at its own expense. The non-controlling party may participate in such defense at its own expense. In Third-Party Actions in which the Indemnifying Party is controlling the defense, the Indemnifying Party shall not agree to any settlement of, or the entry of any judgment arising from, any Third-Party Action without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld, conditioned or delayed; provided, that such consent shall not be required if such settlement or judgment (i) fully releases both the Indemnified Party and the Indemnifying Party and (ii) involves only the payment of money damages that are covered in full by the indemnity obligations of the Indemnifying Party hereunder.  In Third-Party Actions in which the Indemnified Party is controlling the defense, the Indemnified Party shall not agree to any settlement of, or the entry of any judgment arising from, any such Third-Party Action without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld, conditioned or delayed.

 

15.  Disclaimer of Warranties.

 

15.1.  Except as expressly provided in this Agreement (including Exhibit A, Participant Questionnaire) and to the maximum extent permitted by law, neither Party makes any representation or warranty of any kind, whether implied, statutory, or otherwise and disclaims, without limitation, implied warranties of merchantability, fitness for a particular use, and non-infringement.  Each Party acknowledges that it does not rely and has not relied upon any representation or statement made by the other Party or any of its representatives relating to the subject matter of this Agreement except as expressly set forth herein.

 

15.2.  In addition to, and without limiting the effect of, Section 15.1 of these Terms and Conditions, Participant expressly acknowledges and agrees that Fantex makes no representation or warranty regarding the results of the Offering, including the amount of Net Proceeds to be collected or otherwise.

 

16.  Agents.

 

16.1.  Fantex shall not be liable for any claims or demands for commissions or otherwise of any agent of Participant and Participant hereby agrees to indemnify and hold harmless Fantex, its Affiliates, advertisers, employees and all holders of the Series harmless against any liabilities, damages or expenses (including reasonable attorneys’ fees) incurred by them as a result of any such claims or demands.

 

17.  General Terms.

 

17.1.  Entire Agreement; Amendments.  The Agreement (including all exhibits thereto, including these Terms and Conditions) contains the complete, final, exclusive and binding statement of all of the agreements between the Parties with respect to the subject matter thereof and hereof, and supersedes all existing agreements, understandings, negotiations, communications or commitments between the Parties, whether oral or written, concerning the same subject matter.  This Agreement cannot be amended or modified or any provisions or obligations waived or changed except by a writing executed by Fantex and Participant.

 

17.2.  Waiver.  The failure or delay of a Party to insist on strict adherence to any term of this Agreement will not be considered a waiver of, or deprive that Party of the right thereafter to insist on strict adherence to that term or any other term of this Agreement.  No waiver of any breach or default of the other Party shall be construed as a continuing waiver of the same or any other breach or default under this Agreement.

 

17.3.  Further Actions; Attorney-in-Fact.  Participant will, as applicable, at the request of Fantex, execute and deliver to Fantex all such documents as Fantex may from time to time deem reasonably necessary or desirable to effectuate assignment of, and for Fantex to receive all installment payments of, the Brand Amount and otherwise effectuate the purposes of this Agreement.  If Participant fails or refuses to execute or deliver to Fantex any such document within a reasonable period of time following receipt of Fantex’s written request therefor, then Participant irrevocably appoints Fantex as Participant’s agent and attorney-in-fact to sign any such documents in Participant’s name and to make appropriate disposition of them, consistent with this Agreement; provided, that prior to exercising any rights under such power of attorney, Fantex shall notify Participant of its intention to do so.  Participant acknowledges that Fantex’s agency and power of attorney are coupled with an interest.

 

17.4.  Interpretation.  In the interpretation and construction of this Agreement, no term shall be construed against any Party on the basis that the Party was the

 

8

 

drafter, and the Parties waive any common law or statutory provision that would construe an ambiguous term against the other Party as the drafter of this Agreement.  Words importing the singular include the plural and vice versa, as the context requires.  Whenever any of the words “include,” “includes” or “including” or the abbreviation “e.g.” is used in this Agreement (including any exhibits hereto), such shall be deemed to be followed by the words “without limitation.”  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  Any reference to “this Agreement,” even if such reference is contained in these Terms and Conditions, shall be a reference to the Agreement and all of the exhibits and schedules attached thereto.  The term “or” is not exclusive.  The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.  The captions and headings in this Agreement are inserted for convenience of the Parties only, do not constitute a part of this Agreement and will not be deemed to govern, limit, modify or in any other manner affect the scope, meaning, intent or interpretation of the provisions hereof or have any legal effect.  Any obligations or rights of any of the Parties contained in Section 1 of the Agreement shall be valid and binding on the Parties as if it were contained in any other section of this Agreement.

 

17.5.  Governing Law; Arbitration.  The law of California (exclusive of conflict or choice of law rules) shall govern, construe and enforce all of the rights and duties of the Parties arising or in any way relating to the subject matter of this Agreement.  In the event of any dispute, claim or controversy arising out of or relating to this Agreement (including any claim based on contract, tort or statute) or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, (a “Dispute”), then the Parties shall engage in informal, good faith discussions and attempt to resolve the Dispute.  If the Parties are unable to resolve the Dispute, then the Dispute shall be determined by confidential binding arbitration in San Francisco before one arbitrator. The arbitration shall be administered by JAMS pursuant to its Streamlined Arbitration Rules and Procedures.  Judgment on any award pursuant to arbitration may be entered in any court of competent jurisdiction.  The arbitrator shall be a retired judge with at least five years of experience presiding over disputes related to complex commercial transactions.  The arbitrator shall be appointed by agreement of the Parties or, if no agreement can be reached, then each Party shall appoint one JAMS arbitrator for the purpose of selecting the arbitrator to govern the Dispute, and those two arbitrators shall select the arbitrator to govern the Dispute.  In any arbitration arising out of or related to this Agreement, the arbitrator shall award to the prevailing Party, if any, the costs and attorneys’ fees reasonably incurred by the prevailing Party in connection with the arbitration.  If the arbitrator determines a Party to be the prevailing Party under circumstances where the prevailing Party won on some but not all of the claims and counterclaims, the arbitrator may award the prevailing Party an appropriate percentage of the costs and attorneys’ fees reasonably incurred by the prevailing Party in connection with the arbitration.  Without limiting the effect of Section 4.2(iii) of these Terms and Conditions, the Parties shall maintain the confidential nature of the arbitration proceeding and the award, except as may be necessary in connection with a judicial challenge to an award or its enforcement, or unless otherwise required by law or judicial decision.  Notwithstanding anything herein to the contrary, either Party shall be entitled to seek to obtain any provisional remedy, including injunctive or similar relief, from any court of competent jurisdiction as may be necessary to protect that Party’s rights and interests.

 

17.6.  Severability.  Wherever possible, each provision of this Agreement (or portion thereof) will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement (or portion thereof) is held to be null, void, invalid, illegal or unenforceable in any respect under any applicable law or rule by any arbitrator or court of competent jurisdiction, then (a) such provision (or portion thereof) shall be deemed to be restated, to the extent possible, to reflect as nearly as possible the original intentions of the Parties in accordance with applicable law, and if such restatement is not possible, then such provision (or portion thereof) shall be severed, and (b) the remaining provisions, terms or covenants and restrictions in this Agreement will remain in full force and effect.

 

17.7.  No Third Party Beneficiaries.  Nothing herein, express or implied, is intended to nor shall be construed to confer upon or give to any Person, other than the Parties, any interests, rights, remedies or other benefits with respect to or in connection with any agreement or provision contained herein or contemplated hereby.

 

17.8.  Independent Contractors; No Fiduciaries.

 

(i)         The Parties mutually agree that Participant and Fantex are each acting as independent contractors, and that Participant and Fantex are not engaging in any form of employment, partnership, co-ownership or a collaboration for the purpose of sharing any profits or

 

9

 

ownership in common, or acting in the capacity of joint venture participants.

 

(ii)    Participant and Fantex each acknowledges and agrees that: (a) this Agreement, and the exercise of rights and performance of obligations hereunder, does not create any agency, advisory or fiduciary relationship between Participant and Fantex and its Affiliates; (b) Fantex is not, and at any time during the Term will not be, an agent, representative or advisor to Participant; and (c) Participant has relied on its own personal counsel and advisors with respect to legal, tax, accounting and other issues in connection with entering into and performing under this Agreement.

 

17.9.  Limitation on Liabilities.  In no event shall either Party or any of their representatives be liable under this Agreement to the other Party for any consequential, incidental, indirect, exemplary, special or punitive damages, including damages for business interruption, loss of use, revenue or profit, whether arising out of breach of contract, tort (including negligence and intentional torts), statute or otherwise, regardless of whether such damages were foreseeable and whether or not such Party was advised of the possibility of such damages.  For the avoidance of doubt, in the event that any Brand Income Contract is suspended or terminated or the amount of Brand Income committed to be paid to Participant is reduced as a result of any action or omission by Participant that constitutes a breach of this Agreement, then (without limiting the effect of Section 17.10) the Brand Amount that would have been attributed to such lost or reduced Brand Income shall be considered direct damages of Fantex resulting from such breach and shall not be excluded or waived by Fantex as a result of this Section 17.9.

 

17.10.   Cumulative Remedies.  None of the rights, powers or remedies conferred upon any Party under this Agreement will be mutually exclusive.  Each such right, power or remedy will be cumulative and in addition to every other right, power or remedy available to such Party, whether available at law, in equity or otherwise.

 

17.11.   Counterparts; Binding Agreement.  This Agreement, may be executed in multiple counterparts, each of which individually constitutes an original, but all of which together will constitute one single agreement between the Parties.  The Parties agree that this Agreement shall be legally binding upon the electronic transmission, including by facsimile or email delivery of a .pdf or similar file, by each Party of a signed signature page hereof to the other Party.

 

10

 

Confidential

 

Exhibit D:  Form of Closing Certificate

 

CLOSING CERTIFICATE

 

[DATE]

 

Reference is made to that certain Brand Agreement, by and among Fantex, Inc. (“Fantex”), [INSERT TALENT NAME] and [INSERT COMPANY NAME] (jointly and severally as “Participant”), effective as of  [·] (the “Brand Agreement”).  All capitalized terms used herein which are not defined herein have the meanings given to such terms in the Brand Agreement.

 

The undersigned, [INSERT TALENT NAME], certifies in his individual capacity and on behalf of [INSERT COMPANY NAME] to Fantex that he has carefully examined the Brand Agreement, the Participant Questionnaire and the Personal Information Schedule and that:

 

1.                          the statements included in the Participant Questionnaire remain true and correct (except as disclosed on Schedule 3 of the Personal Information Schedule) as of the date hereof;

 

2.                          Participant has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under the Brand Agreement in all material respects at or prior to the Closing; and

 

3.                          since the date of the most recent Personal Information Schedule, the undersigned has not become aware of any condition, restriction, disability or obligation (whether physical, legal or contractual) that is described in Section 6.2 of the Terms and Conditions attached as Exhibit C to the Brand Agreement.

 

IN WITNESS WHEREOF, the undersigned has executed this Closing Certificate as of the date first set forth above.

 

 

	
 
    	
By:
    	
 
    
	
 
    	
 
    	
[INSERT TALENT NAME]
    

 

 

Exhibit E:  Quarterly Report

 

Form of report to be mutually agreed by the Parties, and include at least the following details:

 

·                  detail all Brand Income earned during such quarter and provide a description of any material changes in the amount of revenue of the most recent quarter as compared to the same quarter in the previous year;

 

·                  detail the calculation of each Brand Amount with respect to such Brand Income;

 

·                  list all Brand Income Contracts entered into / terminated / amended, etc. during the quarter (and provide copies to the extent not previously provided);

 

·                  describe details regarding any condition, restriction, disability or obligation (whether physical, legal or contractual) that is described in Section 6.2 of the Terms and Conditions attached as Exhibit C to the Agreement;

 

·                  certification that certain publicly available facts about the Participant provided by Fantex to Participant in writing are correct and that all facts previously certified by the Participant remain correct (provided, that Fantex provides Participant with a list of all such previously certified facts); and

 

·                  certification that the statements included in the Participant Questionnaire remain true and correct as of the date of such report (or provide any details with respect to any exceptions of such statements) or provide a detailed description of facts or circumstances that have changed to make the statements in the Participant Questionnaire untrue.

 

 

Exhibit F:  Spousal Consent  
 (only required if Participant is married)

 

I, [                        ], being the spouse of [INSERT TALENT NAME], who is a signatory to that certain Brand Agreement dated as of [INSERT DATE] (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Agreement”; capitalized terms used but not defined herein shall have the meaning assigned to such terms in the Agreement), in connection with a potential securities offering linked to the value of the Brand Amounts as set forth in greater detail in the Agreement.  I have had the opportunity to consult with legal counsel regarding this consent and the Agreement; and I am aware that pursuant to the provisions of the Agreement, my spouse agrees to grant a percentage of my spouse’s Brand Income in the form of all right, title and interest in the Brand Amounts to Fantex, which may include community property interest I may have thereof, if any.  I hereby consent to such grants of the Brand Amounts and approve of the provisions of the Agreement and any actions or performance arising therefrom, as applicable, to the extent the same affects any of my community property interest, if any. I further agree that my spouse may join in any future amendment, restatement, supplement or modification of the Agreement or any ratification of the foregoing in each case without any further consent from me.

 

This Spousal Consent shall be binding on the undersigned and on the undersigned’s successors, assigns, representatives, heirs and legatees.

 

 

	
 
    	
 
    
	
 
    	
Name:
    
	
 
    	
Date:
    

 

 

Exhibit G:  Form of Irrevocable Payment Instructions

 

IRREVOCABLE PAYMENT INSTRUCTIONS

 

[DATE]

 

[BRAND INCOME SOURCE]

[ADDRESS]

Attn:  [NAME]

 

Re:                             Payment of Amounts to Fantex, Inc. (“Fantex”)

 

Ladies and Gentlemen:

 

[INSERT PARTICIPANT NAME] (“Participant”) has entered into an agreement with Fantex pursuant to which, among other things, Participant has assigned all right, title and interest in and to an amount equal to [                  ] percent ([    ]%) of all gross monies or other consideration of any type (the “Brand Amount”) that Participant may earn from [BRAND INCOME SOURCE] (“Company”) pursuant to [INSERT DESCRIPTION OF BRAND INCOME CONTRACT] (the “Agreement”).

 

Notwithstanding anything to the contrary contained in the Agreement or any prior instructions received by Company, unless and until Company receives written instructions from Fantex to the contrary, effective as of the date of this letter all Brand Amounts from any amounts payable by Company to Participant pursuant to the Agreement shall be delivered concurrent with any payment of the remaining amounts due to Participant, by federal funds wire transfer or electronic depository transfer directly to the following bank account:

 

[INSERT WIRE INSTRUCTIONS]

 

In the event Company receives any different instructions from Fantex with respect to the disposition of Brand Amounts, (a) Company is hereby irrevocably authorized and directed to follow such instructions, without inquiry as to Fantex’s right or authority to give such instructions.  Fantex acknowledges that any instructions from Fantex to Payment Source must be sent to [                                        ], Attention:  [                ]; and (b) such instructions shall only provide for Brand Amounts to be sent to a single deposit account of Fantex.

 

Except only as expressly provided herein with respect to the applicable deposit instructions, this Irrevocable Payment Instructions cannot be changed, modified, or terminated, except by written agreement signed by Fantex, Payment Source and Participant.

 

Please acknowledge your receipt of, and agreement to, the foregoing by signing in the space provided below.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
[INSERT PARTICIPANT NAME]
    

 

Acknowledged and Agreed:

 

	
Fantex,   Inc.
    	
 
    	
[INSERT   BRAND INCOME SOURCE]
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Name/Title:
    	
 
    	
 
    	
Name/Title:
    	
 
    
	
Date:
    	
 
    	
 
    	
Title:Exhibit 10.3

 

 

THIS CONTRACT is between ERIK “E.J.” MANUEL, hereinafter “Player,” and BUFFALO BILLS, INC., a NEW YORK corporation hereinafter “Club,” operating under the name of the BUFFALO BILLS as a member of the National Football League, hereinafter “League.” In consideration of the promises made by each to the other, Player and Club agree as follows:

 

1. TERM. This contract covers FIVE football season(s), and will begin on the date of execution or March 1, 2013, whichever is later, and end on  February 28 or 29, 2018, unless extended, terminated, or renewed as specified elsewhere in this contract.

 

2. EMPLOYMENT AND SERVICES. Club employs Player as a skilled football player. Player accepts such employment. He agrees to give his best efforts and loyalty to the Club, and to conduct himself on and off the field with appropriate recognition of the fact that the success of professional football depends largely on public respect for and approval of those associated with the game. Player will report promptly for and participate fully in Club’s official mandatory minicamp(s), official preseason training camp, all Club meetings and practice sessions, and all preseason, regular season and postseason football games scheduled for or by Club. If invited, Player will practice for and play in any all-star football game sponsored by the League. Player will not participate in any football game not sponsored by the League unless the game is first approved by the League.

 

3. OTHER ACTIVITIES. Without prior written consent of the Club, Player will not play football or engage in activities related to football otherwise than for Club or engage in any activity other than football which may involve a significant risk of personal injury. Player represents that he has special, exceptional and unique knowledge, skill, ability, and experience as a football player, the loss of which cannot be estimated with any certainty and cannot be fairly or adequately compensated by damages. Player therefore agrees that Club will have the right, in addition to any other right which Club may possess, to enjoin Player by appropriate proceedings from playing football or engaging in football-related activities other than for Club or from engaging in any activity other than football which may involve a significant risk of personal injury.

 

4. PUBLICITY AND NFLPA GROUP LICENSING PROGRAM.

 

(a) Player hereby grants to Club and the League, separately and together, the right and authority to use, and to authorize others to use solely as described below, his name, nickname, initials, likeness, image, picture, photograph, animation, persona, autograph/signature (including facsimiles thereof), voice, biographical information and/or any  and all other identifying characteristics (collectively, “Publicity Rights”), for any and all uses or purpose that publicize and promote NFL Football, the League or any of its member clubs in any way in any and all media or formats, whether analog, digital or other, now known or hereafter developed, including, but not limited to, print, tape, disc, computer file, radio, television, motion pictures, other audio-visual and audio works, Internet, broadband platforms, mobile platforms, applications, and other distribution platforms. Without limiting the foregoing, this grant includes the right to use Player’s Publicity Rights for the purpose of publicizing and promoting the following aspects of NFL Football, the League and/or any of its member clubs: brands, games, ticket sales, game broadcasts and telecasts, programming focused on the NFL, one or more NFL clubs and/or their games and events (e.g., coaches shows, highlight based shows such as Inside the NFL, behind-the-scenes programming such as Hard Knocks), other NFL-related media offerings (e.g., branded content segments featuring NFL game footage and other programming enhancements), media distribution platforms (e.g., NFL.com, NFL Mobile, NFL Network), official events (e.g., NFL Kickoff, NFL Draft), officially sanctioned awards programs (e.g., Rookie of the Year), and public service or community oriented initiatives (e.g., Play60). For purposes of clarity, the foregoing grant of rights includes the right and authority to use, and to authorize affiliates or business partners to use, after the term of this Agreement any Publicity Rights fixed in a tangible medium (e.g., filmed, photographed, recorded or otherwise captured) during the term of this Agreement solely for the purposes described herein. Notwithstanding anything to the contrary, the foregoing grant does not confer, during or after the term of this Agreement, any right or authority to use Player’s Publicity Rights in a manner that constitutes any endorsement by Player of a third-party brand, product or service (“Endorsement”). For purposes of clarity, and without limitation, it shall not be an Endorsement for Club or the League to use, or authorize others to use, including, without limitation, in third party advertising and promotional materials, footage and photograph of Player’s participation in NFL games or other NFL events that does not unduly focus on, feature, or highlight, Player in a manner that leads the reasonable consumer to believe that Player is a spokesperson for, or promoter of, a third-party commercial product or service.

 

Player will cooperate with the news media, and will participate upon request in reasonable activities to promote the Club and the League.

 

Player and National Football League Players Association, including any of its affiliates (‘‘NFLPA”) do not and will not contest during or after the term of this agreement, and this hereby confirms their acknowledgment of, the exclusive rights of the League, Club and any NFL member club (i) to telecast, broadcast, or otherwise distribute, transmit or perform, on a live, delayed, or archived basis, in any and all media now known or hereafter developed, any NFL games or any excerpts thereof and (ii) to produce, license, offer for sale, sell, market, or otherwise distribute or perform (or authorize a third party to do any of the foregoing), on a live, delayed, or archived basis, any NFL games or any excerpts thereof, in any and all media now known or hereafter developed, including, bur not limited to, packaged or other electronic or digital media.

 

1

 

Nothing herein shall be construed to grant any Publicity Rights for use in licensed consumer products, whether traditional or digital (e.g., video games, trading cards, apparel), other than such products that constitute programming (as described herein) or news and information offerings regardless of medium (e.g., DVDs, digital highlight offerings).

 

(b) Player hereby assigns the NFLPA and its licensing affiliates, if any, the exclusive and unlimited right to use, license and sublicense the right to use his name, nickname, initials, autograph/signature (including facsimiles), voice, picture, photograph, animation, image, likeness, persona, jersey number, statistics, data, copyrights, biographical information and/or other personal indicia (individually and collectively, “Rights”) for use in connection with any product, brand, service, appearance, product line or other commercial use and any sponsorship, endorsement or promotion thereof, when more than five (5) NFL player Rights are involved, regardless of team affiliation and whether that number is reached using player Rights simultaneously or individually, in any form, media, or medium (now known or hereafter developed) during a consecutive 12-month period (a “group licensing program”). For sponsorships, endorsements, and promotions, group licensing programs are further defined as those: (a) in any one product category, as defined by industry standards; or (b) in different categories if the products all use similar or derivative design or artwork, or one player product is used to promote another player product.

 

The Rights may also be used for the promotion of the NFLPA, its affiliated entities and/or its designees (the “NFLPA Entities”), provided such promotion does not constitute an endorsement by Player of a commercial product not a part of a group licensing program. Player agrees to participate, upon request of the NFLPA and without additional compensation, in reasonable activities to promote the NFLPA Entities, which shall include (i) up to three (3) personal appearances per year or (ii) up to fifteen (15) minutes per week dedicated to promoting the NFLPA Entities. Player retains the right to grant permission to others to utilize his Rights if that individual or entity is not concurrently utilizing the Rights of five (5) or more other NFL players for any commercial purpose whatsoever. If Player's inclusion in an NFLPA program is precluded by an individual exclusive endorsement agreement, and Player provides the NFLPA with immediate written notice of that preclusion, the NFLPA agrees to exclude Player from that particular program. Should Player fail to perform any of his obligations hereunder, the NFLPA may withhold payments owed to Player, if any, in connection with this Group Licensing Assignment.

 

In consideration for this assignment of rights, the NFLPA agrees to use the revenues it receives from group licensing programs to support the objectives as set forth in the Bylaws of the NFLPA and as otherwise determined by the NFLPA Board. The NFLPA further agrees to use reasonable efforts to promote the use of NFL player Rights in group licensing programs, to provide group licensing opportunities to all NFL players, and to monitor and police unauthorized third-party use of the Rights. The NFLPA makes no representations regarding group licensing other than those expressed herein. This agreement shall be construed under Virginia law.

 

The assignment in this paragraph shall expire on December 31 of the latter of (i) the third year following the execution of this contract, or (ii) the year after this contract expires, and may not be revoked, terminated or otherwise assigned in any manner by Player until such date. Neither Club nor the League is a party to the terms of this paragraph, which is included herein solely for the administrative convenience and benefit of Player and the NFLPA. Nothing in Paragraph 4b shall be construed or deemed to modify in any way the rights set forth in Paragraph 4a, and the fact that Paragraph 4b (or any of the terms thereof) appears in the Player Contract shall not be referred to, relied upon, or otherwise cited by Player and/or the NFLPA or any of its affiliates in any dispute or legal proceeding as evidence that the NFL, any NFL entity, any Club or Club Affiliate, or any licensee of any of the foregoing has consented, agreed, acknowledged, or does not contest the applicability or interpretation of Paragraph 4b.

 

5. COMPENSATION. For performance of Player’s services and all other promises of Player, Club will pay Player a yearly salary as follows:

 

	
$
    	
405,000.00
    	
/*
    	
 
    	
for   the 2013 season;
    
	
$
    	
808,877.00
    	
/*
    	
 
    	
for   the 2014 season;
    
	
$
    	
1,212,755.00
    	
/*
    	
 
    	
for   the 2015 season;
    
	
$
    	
1,616,632.00
    	
/*
    	
 
    	
for   the 2016 season;
    
	
$
    	
 
    	
/*
    	
 
    	
for   the 2017 season; OPTION YEAR
    
	
$
    	
 
    	
/*
    	
 
    	
for   the 20     season;
    
	
$
    	
 
    	
/*
    	
 
    	
for   the 20     season;
    
	
$
    	
 
    	
/*
    	
 
    	
for   the 20     season;
    
	
$
    	
 
    	
/*
    	
 
    	
for   the 20     season;
    
	
$
    	
 
    	
/*
    	
 
    	
for   the 20     season;
    
	
$
    	
 
    	
/*
    	
 
    	
for   the 20     season;
    
	
$
    	
 
    	
/*
    	
 
    	
for   the 20     season.
    
	
 
    	
 
    	
 
    	
 
    	
 
    

	
(* - designates the compensation Club will pay   player if the player is not on Club’s Active/Inactive List)
    

 

2

 

In addition, Club will pay Player such earned performance bonuses as may be called for in this contract; Player’s necessary traveling expenses from his residence to training camp; Player’s reasonable board and lodging expenses during preseason training and in connection with playing preseason, regular season, and postseason football games outside Club’s home city; Player’s necessary traveling expenses to and from preseason, regular season, and postseason football games outside Club’s home city; Player’s necessary traveling expenses to his residence if this contract is terminated by Club; and such additional compensation, benefits and reimbursement of expenses may be called for in any collective bargaining agreement in existence during the term of this contract. (For purposes of this contract, a collective bargaining agreement will be deemed to be “in existence” during its stared term or during any period for which the parties to that agreement agree to extend it.)

 

6. PAYMENT. Unless this contract or any collective bargaining agreement in existence during the term of this contract specifically provides otherwise, Player will be paid 100% of his yearly salary under this contract in equal weekly or biweekly installments over the course of the applicable regular season period, commencing with the first regular season game played by Club in each season. Unless this contract specifically provides otherwise, if this contract is executed or Player activated after the beginning of the regular season, the yearly salary payable to Player will be reduced proportionately and Player will be paid the weekly or biweekly portions of his yearly salary becoming due and payable after he is activated. Unless this contract specifically provides otherwise, if this contract is terminated after the beginning of the regular season, the yearly salary payable to Player will be reduced proportionately and Player will be paid the weekly or  bi weekly portions of his yearly salary having become due and payable up to the time of termination.

 

7. DEDUCTIONS. Any advance made to Player will be repaid to Club, and any properly levied Club fine or Commissioner fine against Player will be paid, in cash on demand or by means of deductions from payments coming due to the Player under this contract, the amount of such deductions to be determined by Club unless this contract or any collective bargaining agreement in existence during the term of contract specifically provides otherwise.

 

8. PHYSICAL CONDITION. Player represents to Club that he is and will maintain himself in excellent physical condition Player  will undergo a complete physical examination by the Club physician upon Club request, during which physical examination Player agrees to make full and complete disclosure of any physical or mental condition known to him which might impair his performance under this contract and to respond fully and in good faith when questioned by the Club physician about such condition. If Player fails to establish or maintain his excellent physical condition to the satisfaction of the Club physician, or make the required full and complete disclosure and good faith responses to the Club physician, then Club may terminate this contract.

 

9. INJURY. Unless this contract specifically provides otherwise, if Player is injured in the performance of his services under this contract and promptly reports such injury to the Club physician or trainer, then Player will receive such medical and hospital care during the term of this contract as the Club physician may deem necessary, and will continue to receive his yearly salary for long, during the season of injury only and for no subsequent period covered by this contract, as Player is physically unable to perform the services required of him by this contract because of such injury. If Player’s injury in the performance of his services under the contract results in his death, the unpaid balance of his yearly salary for the season of injury will be paid to his stated beneficiary, or in the absence of a stated beneficiary, to his estate.

 

10. WORKERS’ COMPENSATION. Any compensation paid to Player under this contract or under any collective bargaining agreement in existence during the term of this contract for a period during which he is entitled to workers’ compensation benefits by reason of temporary total, permanent total, temporary partial, or permanent partial disability will be deemed an advance payment of workers’ compensation benefits due Player, and Club will be entitled to be reimbursed the amount of such payment out of any award of workers’ compensation.

 

11. SKILL, PERFORMANCE AND CONDUCT. Player understands that he is competing with other players for a position on Club’s roster within the applicable player limits. If at any time, in the sole judgment of Club, Player’s skill or performance has been unsatisfactory as compared with that of other  players competing for positions on Club’s  roster, or if Player has engaged in personal conduct reasonably judged by Club to adversely affect or reflect on Club, then Club may terminate this contract. In addition, during the period any salary cap illegally in effect, this contract may be terminated if, in Club’s opinion, Player is  anticipated to make less of a contribution to Club’s ability to compete on the playing field than another player or players whom Club intends to sign or attempts to sign, or another player or players who is or are already on Club’s roster, and for whom Club needs room.

 

3

 

12. TERMINATION. The right of termination set forth in this contract will be in addition to any other rights of termination allowed either party by law. Termination will be effective upon the giving of written notice, except that Player’s death, other than as a result of injury incurred in the performance of his services under this contract, will automatically terminate this contract. If this contract is terminated by Club and either Player or Club so requests, Player will promptly undergo a complete physical examination by the Club physician.

 

13. INJURY GRIEVANCE. Unless a collective bargaining agreement in existence at the time of termination of this contract by Club provides otherwise, the following Injury Grievance procedure will apply: If Player believes that at the time of termination of this contract by Club he was physically unable to perform the services required of him by this contract because of an injury incurred in the performance of his services under this contract, Player may, within 60 days after examination by the Club physician, submit at his own expense to examination by a physician of his choice. If the opinion of Player’s physician with respect to his physical ability to perform the services required of him by this contract is contrary to that of the Club’s physician, the dispute will be submitted within a reasonable time to final and binding arbitration by an arbitrator selected by Club and Player or, if they are unable to agree, one selected in accordance with the procedures of the American Arbitration Association on application by either party.

 

14. RULES. Player will comply with and be bound by all reasonable Club rules and regulations in effect during the term of this contract which are not inconsistent with the provisions of this contract or of any collective bargaining agreement in existence during the term of this contract. Player’s attention is also called to the fact that the League functions with certain rules and procedures expressive of its operation as a joint venture among its member clubs and that these rules and practices may affect Player’s relationship to the League and its member clubs independently of the provisions of this contract.

 

15. INTEGRITY OF GAME. Player recognizes the detriment to the League and professional football that would result from impairment of public confidence in the honest and orderly conduct of NFL games or the integrity and good character of NFL players. Player therefore acknowledges his awareness that if he accepts a bribe or agrees to throw or fix an NFL game; fails to promptly report a bribe offer or an attempt to throw or fix an NFL game; bets on an NFL game; knowingly associates with gamblers or gambling activity, uses or provides other players with stimulants or other drugs for the purpose of attempting to enhance on-field performance; or is guilty of any other form of conduct reasonably judged by the League Commissioner to be detrimental to the League or professional football, the Commissioner will have the right, but only after giving Player the opportunity for a hearing at which he may be represented by counsel of his choice, to fine Player in a reasonable amount; to suspend Player for a period certain or indefinitely; and/or to terminate this contract.

 

16. EXTENSION. Unless this contract specifically provides otherwise, if Player becomes a member of the Armed Forces of the United States or any other country, or retires from professional football as an active player, or otherwise fails or refuses to perform his services under this contract, then this contract will be tolled between the date of Player’s induction into the Armed Forces, or his retirement, or his failure or refusal to perform, and the later date of his return to professional football. During the period this contract is tolled, Player will not be entitled to any compensation or benefits. On Player’s return to professional football, the term of this contract will be extended for a period of time equal to the number of seasons (to the nearest multiple of one) remaining at the time the contract was tolled. The right of renewal, if any, contained in this contract will remain in effect until the end of any such extended term.

 

17. ASSIGNMENT. Unless this contract specifically provides otherwise, Club may assign this contract and Player’s services under this contract to any successor to Club’s franchise or to any other Club in the League. Player will report to the assignee Club promptly upon being informed of the assignment of his contract and will faithfully perform his services under this contract. The assignee club will pay Player’s necessary traveling expenses in reporting to it and will faithfully perform this contract with Player.

 

18. FILING. This contract will be valid and binding upon Player and Club immediately upon execution. A copy of this contract, including any attachment to it, will be filed by Club with the League Commissioner within 10 days after execution. The Commissioner will have the right to disapprove this contract on reasonable grounds, including but not limited to an attempt by the parties to abridge or impair the rights of any other club, uncertainty or incompleteness in expression of the parties’ respective rights and obligations, or conflict between the terms of this contract and any collective bargaining agreement then in existence. Approval will be automatic unless, within 10 days after receipt of this contract in his office, the Commissioner notifies the parties either of disapproval or of extension of this 10-day period for purposes of investigation or clarification pending his decision. On the receipt of notice of disapproval and termination, both parties will be relieved of their respective rights and obligations under this contract.

 

4

 

19. DISPUTES. During the term of any collective bargaining agreement, any dispute between Player and Club involving the interpretation or application of any  provision of the NFL collective bargaining agreement or this contract will be submitted to final and binding arbitration In accordance with the procedure called for in any collective bargaining agreement in existence at the time the event giving rise to any such dispute occurs.

 

20. NOTICE. Any notice, request, approval or consent under this contract will be sufficiently given if in writing and delivered in person or mailed (certified or first class) by one parry to the other at the address set forth in this contract or to such other address as the recipient may subsequently have furnished in writing to the sender.

 

21. OTHER AGREEMENTS. This contract, including any attachment to it, sets forth the entire agreement between Player and Club and cannot be modified or supplemented orally Player and Club represent that no other agreement, oral or written, except as attached to or specifically incorporated in this contract, exists between them. The provisions of this contract will govern the relationship between Player and Club unless there are conflicting provisions in any collective bargaining agreement in existence during the term of this contract, in which case the provisions of the collective bargaining agreement will take precedence over conflicting provisions of this contract relating to the rights or obligations of either parry.

 

22. LAW. This contract is made under and shall be governed by the laws of the State of NEW YORK.

 

23. WAIVER AND RELEASE. Player waive and releases: (i) any claims relating to the 2011 lockout; (ii) any antitrust claim relating to the Draft, restriction on free agency, franchise player designations, transition player designations, the Entering Player Pools, the Rookie Compensation Pool, or any other term or condition of employment relating to conduct engaged in prior to the date of this Agreement; and (iii) any claims relating to conduct engaged in pursuant to the express terms of any collective bargaining agreement during the term of any such agreement. This waiver and release also extends to any conduct engaged in pursuant to the express terms of the Stipulation and Settlement Agreement in Whitt. This waiver and release does not waive any rights player may have to commence a grievance under the 2006 CBA or to commence a grievance or other arbitration under the 2011 CBA.

 

24. OTHER PROVISIONS.

 

(a) Each of the undersigned hereby confirms that (i) this contract, renegotiation, extension or amendment sets forth all components of the player’s remuneration for playing professional football (whether such compensation is being furnished directly by the Club or by a related or affiliated entity); and (ii) there are not undisclosed agreements of any kind, whether express or implied, oral or written, and there are no promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind that have not been disclosed to the NFL involving consideration of any kind to be paid, furnished or made available to Player or any entity or person owned or controlled by, affiliated with, or related to Player, either during the term of this contract or thereafter.

 

(b) Each of the undersigned further confirms that, except as separately set forth in any attachment submitted herewith consistent with the Collective Bargaining Agreement, the .pdf NFL Player Contract Form as set forth herein has not been modified from the form officially authorized for use by the NFL and the NFLPA.

 

(c) Each of the undersigned further confirms that, except insofar as any of the undersigned may describe in an addendum to this contract, to the best of their knowledge, no conduct in violation of the Anti-Collusion rules took place with respect to this contract. Each of the undersigned further confirms that nothing in this contract is designed or intended to defeat or circumvent any provisions of the collective bargaining agreement dated August 4, 2011, including but not limited to the Rookie Compensation Pool and Salary Cap provisions, however, any conduct permitted by that Agreement shall not be considered a violation of this confirmation.

 

(d) PERFORMANCE-BASED PAY. Player’s attention is called to the fact that he may be entitled to Performance-Based Pay in accordance with the procedures outlined in Article 28, and that his eligibility for such pay is based on a formula that takes into account his playtime percentage and compensation.

 

5

 

25.                               SPECIAL PROVISIONS.

 

PLEASE SEE ADDENDUM.

 

THIS CONTRACT is executed in six (6) copies. Player acknowledges that before signing this contract he was given the opportunity to seek advice from or be represented by persons of his own selection.

 

	
/s/   EJ Manuel
    	
 
    	
/s/   James R. Overdorf
    
	
PLAYER   SIGNATURE
    	
 
    	
CLUB   EXECUTIVE SIGNATURE
    
	
 
    	
 
    	
 
    
	
ERIK   “E.J.” MANUEL
    	
 
    	
JAMES   R. OVERDORF
    
	
PLAYER   PRINT
    	
 
    	
CLUB   EXECUTIVE PRINT
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
BUFFALO   BILLS, INC.
    
	
PLAYER   HOME ADDRESS
    	
 
    	
CLUB   NAME
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ONE   BILLS DRIVE
    
	
 
    	
 
    	
CLUB   ADDRESS
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ORCHARD   PARK, NEW YORK 14127
    
	
TELEPHONE   NUMBER
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
6/14/13
    	
 
    	
6/14/13
    
	
DATE
    	
 
    	
DATE
    

 

 

	
 
    	
/s/   Joshua Hare
    	
 
    
	
 
    	
PLAYER’S   AGENT SIGNATURE
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
JOSHUA   HARE
    	
 
    
	
 
    	
PLAYER’S   AGENT PRINT
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
117   W. 123RD ST., #8A
    	
 
    
	
 
    	
ADDRESS
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
NEW   YORK, NEW YORK 10027
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(917)   270·6287
    	
 
    
	
 
    	
TELEPHONE   NUMBER
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
6/14/13
    	
 
    
	
 
    	
DATE
    	
 
    

 

Copy Distribution:                                    Management Council (Original Signature)

Player, Member Club (Photocopy)

League Office, NFLPA, Player Agent (Electronic Mail)

 

6

 

SIGNING, REPORTING AND PLAYING BONUS AGREEMENT

 

	
BETWEEN BUFFALO BILLS, INC. AND
    	
   ERIK   “E.J.” MANUEL
    	
 
    
	
(Club)
    	
(Player)
    

 

As additional consideration for the execution of the NFL Player Contract(s) for the year(s) 2013, 2014, 2015, 2016 and Option Year  2017 and for the Player having received medical clearance to practice and play by passing Club’s physical exam, Club agrees to pay Player a bonus in the amount of $4,842,036.00 (the “Bonus”). The Bonus is subject to the approval of the contract(s) by the NFL Management Council.

 

The first payment of the Bonus, $3,750,000.00, shall be payable the later of five (5) days from contract execution by both Player and Player’s certified agent, approval of the contract(s) by the NFL Management Council or receipt of medical clearance. The remainder of the Bonus shall be payable as follows:

 

$ 1,092,036.00                                                             October 1, 2013

 

It is expressly understood that no part of the Bonus herein provided is part of any salary in the contract(s) specified above, that the Bonus shall not be deemed part of any salary in the contract(s) specified above if Club exercises any option for Player’s services in a season subsequent to the final contract year, and that such obligations of Club are not terminable if Player is not in breach and such contract(s) is (are) terminated via the NFL waiver system, provided that Player has not breached this agreement or his NFL Player Contract prior to any such termination.

 

Player and Club agree that Player shall be subject to forfeiture of Salary to the maximum extent permitted under Article 4, Section 9 of the Collective Bargaining Agreement dated August 4, 2011.

 

For purposes of the preceding paragraph Player’s failure to practice with or play for Club does not include a failure which is the result of an NFL football injury, provided that Player has promptly and fully disclosed his physical condition to Club, and undergoes whatever reasonable and customary rehabilitation/treatment the Club requires of him.

 

It is further understood and agreed that Player’s obligation to repay the Bonus provided herein is an express provision of this contract and, but for this provision, Club would not have executed this contract.  Player hereby expressly authorizes Club, in its sole discretion, to deduct and set off at any time and from time to time, all or any part of any sums owed by Player to Club from any current, future or deferred wages, salaries, bonuses, severance pay and/or additional consideration owed to, or becoming owed to, Player by Club in accordance with, and to the full extent permitted by, Article 4, Section 9 of the Collective Bargaining Agreement dated August 4, 2011.

 

	
E. M.
    	
 
    	
JO
    
	
Player   (Initial)
    	
 
    	
Club   (Initial)
    

 

1

 

No term or condition of this Agreement, and no breach thereof, shall be waived, altered or modified except by written instrument.

 

 

	
Player:
    	
/s/   E. J. Manuel
    	
 
    	
Club:
    	
Buffalo   Bills, Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
6/14/13
    	
 
    	
By:
    	
/s/   James R. Overdorf
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
6/14/13
    

 

2

 

	
ADDENDUM TO
    	
ERIK “E.J.” MANUEL
    	
 
    
	
 
    	
PLAYER
    	
 
    

 

2013, 2014, 2015, 2016 & Option Year 2017 CONTRACT WITH THE BUFFALO BILLS YEAR(S)

 

ADDITIONAL SPECIAL PROVISIONS:

 

A.  Conditional Skill, Injury and Cap Guarantees.

1. 2013 Conditional Skill.Injury and Cap Guarantee.

Notwithstanding any language to the contrary in this Contract but subject to the terms and conditions of this section, Club agrees that, for the 2013 League Year only, Club will pay Player $405,000.00 of the salary provided in Paragraph 5 of the 2013 NFL Player Contract (the “2013 Conditional Skill, Injury and Cap Guarantee”), despite the fact that Club elected to terminate Player’s contract because: 1) in Club’s sole judgment Player’s skill and performance has been unsatisfactory as compared with that of other players competing for positions on Club’s roster; or 2) for salary cap reasons; or 3) due to a professional football injury suffered while performing his services under this Contract, Player is unable, in the sole judgment of Club’s physicians, to perform his playing services for Club and Player’s Contract is terminated via the NFL waiver system.

 

Player understands, acknowledges and agrees that the Player’s right to the 2013 Conditional Skill, Injury and Cap Guarantee is expressly conditioned on Player’s adherence to all provisions of the Contract for the 2013 NFL League Year.

 

In the event Player, at any time for any reason, during the 2013 NFL Season, fails or refuses to report to Club, fails or refuses to practice or play with Club or leaves Club without its written consent, or if Player is suspended by the NFL or Club for Conduct Detrimental or if Player is suspended for violation of the NFL Personal Conduct Policy, or if Player is unable to practice or play as the result of injuries sustained while participating in activities that involve a significant risk of personal injury and are non-football in nature (which activities shall include, but shall not be limited to, skydiving, hang gliding, mountain climbing, racing of any kind, use of motorcycles, use of any off-road vehicle, firearms, scuba diving, and snow or water skiing), or in the event Player voluntarily retires not due to an NFL football related injury, or is incarcerated, then Player shall be in breach of this agreement. For the purpose of this paragraph, Player’s failure to practice with or play for Club does not include failure which is a result of an NFL football injury, provided that Player has promptly and fully disclosed his physical condition to Club, and undergoes whatever reasonable and customary rehabilitation/treatment the Club requires of him.

 

Club, upon learning of a breach by Player, shall promptly provide Player with written notice via certified mail that Player is in breach. If Player is in breach, then the 2013 Conditional Skill, Injury and Cap Guarantee under this section will become null and void. In the event that the 2013 Conditional Skill, Injury and Cap Guarantee does not attach to the 2013 Paragraph 5, Player will be entitled to earn the specified Paragraph 5 salary on a non-guaranteed basis subject to any applicable fines and/or forfeitures.

 

	
E. M.
    	
 
    	
JO
    
	
Player   (Initial)
    	
 
    	
Club   (Initial)
    

 

3

 

In the event Player is assigned to another Club, assignee Club will assume responsibility for the portion of this 2013 Conditional Skill, Injury and Cap Guarantee applicable to any 2013 Paragraph 5  salary unearned at the time of the assignment.

 

In the event Player’s Contract is terminated and amounts become due under this section as described above, Club shall pay Player such amounts on or before the last day of the “applicable 2 1/2 month period,” as determined by the Club in accordance with, Treas. Reg. § 1.409- l(b)(4)(i)(A), at the present value rate determined in accordance with the Discount Rate set forth in Article 13, Section 6(d)(iv) of the Collective Bargaining Agreement dated August 4, 2011. In the event this Contract is terminated and Player subsequently has the opportunity to be employed by any other professional football organization or Player signs a new contract with Club, Club’s obligation under any Guarantee shall be reduced by the amount of any and all compensation (including, without limitation, salary, signing, reporting, option, and/or incentive bonuses) received, earned or that reasonably could have been earned by Player from such other football organization or Club, as applicable, during the remainder of the term covered by such Guarantee, and Player shall reimburse Club for any such amounts previously paid by Club.

 

This 2013 Conditional Skill, Injury and Cap Guarantee is for 2013 only and in no way supersedes or obviates the applicability of the League’s waiver system to Player nor does it provide Player a guaranteed spot on the Club’s roster.

 

It is understood and agreed that the terms included in this section are express provisions of the Contract and, but for the provisions herein contained, Club would not have executed the Contract.

 

To the extent any of the terms set forth above are deemed unenforceable under the Collective Bargaining Agreement dated on August 4, 2011 or any successor Collective Bargaining Agreement, any forfeiture by Player under this clause shall be the maximum amount permitted by the terms of this clause and said Settlement Agreement or successor Collective Bargaining Agreement.

 

2. 2014 Conditional Skill, Injury and Cap Guarantee.

 

Notwithstanding any language to the contrary in this Contract but subject to the terms and conditions of this section, Club agrees that, for the 2014 League Year only, Club will pay Player $808,877.00 of the salary provided in Paragraph 5  of the 2014 NFL Player Contract (the “2014 Conditional Skill, Injury and Cap Guarantee”), despite the fact that Club elected to terminate Player’s contract because: 1) in Club’s sole judgment Player’s skill and performance has been unsatisfactory as compared with that of other players competing for positions on Club’s roster; or 2) for salary cap reasons; or 3) due to a professional football injury suffered while performing his services under this Contract, Player is unable, in the sole judgment of Club’s physicians, to perform his playing services for Club and Player’s Contract is terminated via the NFL waiver system.

 

Player understands, acknowledges and agrees that the Player’s right to the 2014 Conditional Skill, Injury and Cap Guarantee is expressly conditioned on Player’s adherence to all provisions of the Contract for the 2014 NFL League Year.

 

	
E. M.
    	
 
    	
JO
    
	
Player   (Initial)
    	
 
    	
Club   (Initial)
    

 

4

 

In the event Player, at any time for any reason, during the 2014 NFL Season, fails or refuses to report to Club, fails or refuses to practice or play with Club or leaves Club without its written consent, or if Player is suspended by the NFL or Club for Conduct Detrimental or if Player is suspended for violation of the NFL Personal Conduct Policy, or if Player is unable to practice or play as the result of injuries sustained while participating in activities that involve a significant risk of personal injury and are non-football in nature (which activities shall include, but shall not be limited to, skydiving, hang gliding, mountain climbing, racing of any kind, use of motorcycles, use of any off-road vehicle, firearms, scuba diving, and snow or water skiing), or in the event Player voluntarily retires not due to an NFL football related injury, or is incarcerated, then Player shall be in breach of this agreement. For the purpose of this paragraph, Player’s failure to practice with or play for Club does not include failure which is a result of an NFL football injury, provided that Player has promptly and fully disclosed his physical condition to Club, and undergoes whatever reasonable and customary rehabilitation/treatment the Club requires of him.

 

Club, upon learning of a breach by Player, shall promptly provide Player with written notice via certified mail that Player is in breach. If Player is in breach, then the 2014 Conditional Skill, Injury and Cap Guarantee under this section will become null and void. In the event that the 2014 Conditional Skill, Injury and Cap Guarantee does not attach to the 2014 Paragraph 5, Player will be entitled to earn the specified Paragraph 5 salary on a non-guaranteed basis subject to any applicable fines and/or forfeitures.

 

In the event Player is assigned to another Club, assignee Club will assume responsibility for the portion of this 2014 Conditional Skill, Injury and Cap Guarantee applicable to any 2014 Paragraph 5 salary unearned at the time of the assignment.

 

In the event Player’s Contract is terminated and amounts become due under this section as described above, Club shall pay Player such amounts on or before the last day of the “applicable 2 1/2 month period,” as determined by the Club in accordance with, Treas. Reg. § 1.409- l(b)(4)(i)(A), at the present value rate determined in accordance with the Discount Rate set forth in Article 13, Section 6(d)(iv) of the Collective Bargaining Agreement dated August 4, 2011. In the event this Contract is terminated and Player subsequently has the opportunity to be employed by any other professional football organization or Player signs a new contract with Club, Club’s obligation under any Guarantee shall be reduced by the amount of any and all compensation (including, without limitation, salary, signing, reporting, option, and/or incentive bonuses) received, earned or that reasonably could have been earned by Player from such other football organization or Club, as applicable, during the remainder of the term covered by such Guarantee, and Player shall reimburse Club for any such amounts previously paid by Club.

 

This 2014 Conditional Skill, Injury and Cap Guarantee is for 2014 only and in no way supersedes or obviates the applicability of the League’s waiver system to Player nor does it provide Player a guaranteed spot on the Club’s roster.

 

It is understood and agreed that the terms included in this section are express provisions of the Contract and, but for the provisions herein contained, Club would not have executed the Contract.

 

	
E. M.
    	
 
    	
JO
    
	
Player
    	
 
    	
(Initial)
    	
 
    	
Club
    	
 
    	
(Initial)
    
							

 

5

 

To the extent any of the terms set forth above are deemed unenforceable under the Collective Bargaining Agreement dated August 4, 2011 or any successor Collective Bargaining Agreement, any forfeiture by Player under this clause shall be the maximum amount permitted by the terms of this clause and said Settlement Agreement or successor Collective Bargaining Agreement.

 

3.  2015 Conditional Skill, Injury and Cap Guarantee.

 

Notwithstanding any language to the contrary in this Contract but subject to the terms and conditions of this section, Club agrees that, for the 2015 League Year only, Club will pay Player $1,212,755.00 of the salary provided in Paragraph 5 of the 2015 NFL Player Contract (the “2015 Conditional Skill, Injury and Cap Guarantee”), despite the fact that Club elected to terminate Player’s contract because: 1) in Club’s sole judgment Player’s skill and performance has been unsatisfactory as compared with that of other players competing for positions on Club’s roster; or 2) for salary cap reasons; or 3) due to a professional football injury suffered while performing his services under this Contract, Player is unable, in the sole judgment of Club’s physicians, to perform his playing services for Club and Player’s Contract is terminated via the NFL waiver system.

 

Player understands, acknowledges and agrees that the Player’s right to the 2015 Conditional Skill, Injury and Cap Guarantee is expressly conditioned on Player’s adherence to all provisions of the Contract for the 2015 NFL League Year.

 

In the event Player, at any time for any reason, during the 2015 NFL Season, fails or refuses to report to Club, fails or refuses to practice or play with Club or leaves Club without its written consent, or if Player is suspended by the NFL or Club for Conduct Detrimental or if Player is suspended for violation of the NFL Personal Conduct Policy, or if Player is unable to practice or play as the result of injuries sustained while participating in activities that involve a significant risk of personal injury and are non-football in nature (which activities shall include, but shall not be limited to, skydiving, hang gliding, mountain climbing, racing of any kind, use of motorcycles, use of any off-road vehicle, firearms, scuba diving, and snow or water skiing), or in the event Player voluntarily retires not due to an NFL football related injury, or is incarcerated, then Player shall be in breach of this agreement. For the purpose of this paragraph, Player’s failure to practice with or play for Club does not include failure which is a result of an NFL football injury, provided that Player has promptly and fully disclosed his physical condition to  Club, and undergoes whatever reasonable and customary rehabilitation/treatment the Club requires of him.

 

Club, upon learning of a breach by Player, shall promptly provide Player with written notice via certified mail that Player is in breach. If Player is in breach, then the 2015 Conditional Skill, Injury and Cap Guarantee under this section will become null and void. In the event that the 2015 Conditional Skill, Injury and Cap Guarantee does not attach to the 2015 Paragraph 5, Player will be entitled to earn the specified Paragraph 5 salary on a non-guaranteed basis subject to any applicable fines and/or forfeitures.

 

In the event Player is assigned to another Club, assignee Club will assume responsibility for the portion of this 2015 Conditional Skill, Injury and Cap Guarantee applicable to any 2015 Paragraph 5 salary unearned at the time of the assignment.

 

	
E. M.
    	
 
    	
JO
    
	
Player
    	
 
    	
(Initial)
    	
 
    	
Club
    	
 
    	
(Initial)
    
							

 

6

 

In the event Player’s Contract is terminated and amounts become due under this section as described above, Club shall pay Player such amounts on or before the last day of the “applicable 2 1/2 month period,” as determined by the Club in accordance with, Treas. Reg. § 1.409- 1(b)(4)(i)(A), at the present value rate determined in accordance with the Discount Rate set forth in Article 13, Section 6(d)(iv) of the Collective Bargaining Agreement dated August 4, 2011. In the event this Contract is terminated and Player subsequently has the opportunity to be employed by any other professional football organization or Player signs a new contract with Club, Club’s obligation under any Guarantee shall be reduced by the amount of any and all compensation (including, without limitation, salary, signing, reporting, option, and/or incentive bonuses) received, earned or that reasonably could have been earned by Player from such other football organization or Club, as applicable, during the remainder of the term covered by such Guarantee, and Player shall reimburse Club for any such amounts previously paid by Club.

 

This 2015 Conditional Skill, Injury and Cap Guarantee is for 2015 only and in no way supersedes or obviates the applicability of the League’s waiver system to Player nor does it provide Player a guaranteed spot on the Club’s roster.

 

It is understood and agreed that the terms included in this section are express provisions of the Contract and, but for the provisions herein contained, Club would not have executed the Contract.

 

To the extent any of the terms set forth above are deemed unenforceable under the Collective Bargaining Agreement dated August 4, 2011 or any successor Collective Bargaining Agreement, any forfeiture by Player under this clause shall be the maximum amount permitted by the terms of this clause and said Settlement Agreement or successor Collective Bargaining Agreement.

 

4. 2016 Conditional Skill, Injury and Cap Guarantee.

 

Notwithstanding any language to the contrary in this Contract but subject to the terms and conditions of this section, Club agrees that, for the 2016 League Year only, Club will pay Player $1,616,632.00  of the salary provided in Paragraph 5  of the 2016 NFL Player Contract (the “2016 Conditional Skill, Injury and Cap Guarantee”), despite the fact that Club elected to terminate Player’s contract because: 1) in Club’s sole judgment Player’s skill and performance has been unsatisfactory as compared with that of other players competing for positions on Club’s  roster; or 2) for salary cap reasons; or 3) due to a professional football injury suffered while performing his services under this Contract, Player is unable, in the sole judgment of Club’s physicians, to perform his playing services for Club and Player’s Contract is terminated via the NFL waiver system.

 

Player understands, acknowledges and agrees that the Player’s right to the 2016 Conditional Skill, Injury and Cap Guarantee is expressly conditioned on Player’s adherence to all provisions of the Contract for the 2016 NFL League Year.

 

In the event Player, at any time for any reason, during the 2016 NFL Season, fails or refuses to report to Club, fails or refuses to practice or play with Club or leaves Club without its written consent, or if Player is suspended by the NFL or Club for Conduct Detrimental or if Player is suspended for violation of the NFL Personal Conduct Policy, or if Player is unable

 

	
E. M.
    	
 
    	
JO
    
	
Player     (Initial)
    	
 
    	
Club       (Initial)
    

 

7

 

to practice or play as the result of injuries sustained while participating in activities that involve a significant  risk of personal injury and are non-football in nature (which activities shall include, but shall not be limited to, skydiving, hang gliding, mountain climbing, racing of any kind, use of motorcycles, use of any off-road vehicle, firearms, scuba diving, and snow or water skiing), or in the event Player voluntarily retires not due to an NFL football related injury, or is incarcerated, then Player shall be in breach of this agreement. For the purpose of this paragraph, Player’s failure to practice with or play for Club does not include failure which is a result of an NFL football injury, provided that Player has promptly and fully disclosed his physical condition to Club, and undergoes whatever reasonable and customary rehabilitation/treatment  the Club requires of him.

 

Club, upon learning of a breach by Player, shall promptly provide Player with written notice via certified mail that Player is in breach. If Player is in breach, then the 2016 Conditional Skill, Injury and Cap Guarantee under this section will become null and void.  In the event that the 2016 Conditional Skill, Injury and Cap Guarantee does not attach to the 2016 Paragraph 5, Player will be entitled to earn the specified Paragraph 5 salary on a non-guaranteed basis subject to any applicable fines and/or forfeitures.

 

In the event Player is assigned to another Club, assignee Club will assume responsibility for the portion of this 2016 Conditional Skill, Injury and Cap Guarantee applicable to any 2016 Paragraph 5 salary unearned at the time of the assignment.

 

In the event Player’s Contract is terminated and amounts become due under this section as described above, Club shall pay Player such amounts on or before the last day of the “applicable 21/2 month period,” as determined by the Club in accordance with, Treas. Reg. § 1.409- l(b)(4)(i)(A), at the present value rate determined in accordance with the Discount Rate set forth in Article 13, Section 6(d)(iv) of the Collective Bargaining Agreement dated August 4, 2011. In the event this Contract is terminated and Player subsequently has the opportunity to be employed by any other professional football organization or Player signs a new contract with Club, Club’s obligation under any Guarantee shall be reduced by the amount of any and all compensation (including, without limitation, salary, signing, reporting, option, and/or incentive bonuses) received, earned or that reasonably could have been earned by Player from such other football organization or Club, as applicable, during the remainder of the term covered by such Guarantee, and Player shall reimburse Club for any such amounts previously paid by Club.

 

This 2016 Conditional Skill, Injury and Cap Guarantee is for 2016 only and in no way supersedes or obviates the applicability of the League’s waiver system to Player nor does it provide Player a guaranteed spot on the Club’s roster.

 

It is understood and agreed that the terms included in this section are express provisions of the Contract and, but for the provisions herein contained, Club would not have executed the Contract.

 

To the extent any of the terms set forth above are deemed unenforceable under the Collective Bargaining Agreement dated August 4, 2011 or any successor Collective Bargaining Agreement, any forfeiture by Player under this clause shall be the maximum amount permitted by the terms of this clause and said Settlement Agreement or successor Collective Bargaining Agreement.

 

	
E. M.
    	
 
    	
JO
    
	
Player     (Initial)
    	
 
    	
Club       (Initial)
    

 

8

 

B.          Off-Season Workout Program  (2014.2015.2016 & Option Year 2017).  In the event Club elects to conduct a voluntary offseason workout program (the “Program”) during the 2014, 2015, 2016 offseason & the 2017 offseason if Club should elect to exercise the Option, and Player is under contract to Club during such Program, Player shall be invited to participate in the Program.

 

This offseason program shall be conducted pursuant to the terms of the Collective Bargaining Agreement (“CBA”) including, without limitation, Article 21 and Appendix G.

 

In the event Player elects to participate in the Program, Player shall receive the minimum daily amount specified in Article 21, Section 3 of the CBA, subject to the terns and conditions of that Section, as well as any additional consideration for participation in Club’s Program specified elsewhere in Player’s NFL Player Contract. All offseason compensation shall be subject to deduction for federal, state and local income taxes, social security, and any other lawful withholdings and deductions, as applicable. The minimum daily amount specified in Article 21, Section 3 shall be paid to Player on a weekly or bi-weekly basis over the course of the Program.

 

In the event Player is injured during the Program while working out at the Club’s facility under the direction of a Club official, the terms and conditions of Article 21, Section 4 of the CBA and any applicable paragraph of Player’s NFL Player Contract shall govern the respective rights and obligations of Player and Club.

 

C.          Appearances.  Player hereby agrees to make five (5) personal appearances for the Club per contract year for the Club’s promotional and charitable purposes, all without any additional compensation. In the event Club agrees to pay Player for an appearance, it shall do so at the prevailing commercial rate with a maximum of $5,000.00 per appearance.

 

D.          Insurable Interest.  Club has an insurable interest in Player, and Player agrees to cooperate reasonably with Club in all matters pertaining to that interest, including taking a physical examination for insurance purposes.

 

E.          Confidentiality.  Neither Player nor any of his representatives will disclose the terms or conditions of this contract to any third party, including the media.  The Club will disclose only required components of the contract to the National Football League and NFL Player’s Association.

 

F.           Workers’ Compensation Clause.  As a material inducement for the Club to employ Player’s services, Player promises and agrees that any workers’ compensation claim, dispute or cause of action arising out of Player’s employment with the Club shall be subject to the workers’ compensation laws of New York exclusively and not the workers’ compensation laws of any other state.  Player further agrees that any claim, filing, petition or cause of action in any way relating to workers’ compensation rights or benefits arising out of Player’s employment with Club, including without limitation the applicability or enforceability of this clause, shall be brought solely and exclusively with the courts of New York, the State ofNew York Workers’ Compensation Board or such other New York tribunal that has jurisdiction over the matter.

 

 

	
E. M.
    	
 
    	
JO
    
	
Player   (Initial)
    	
 
    	
Club   (Initial)
    

 

9

 

G.         Business Development and Marketing.

1.

 

a)           Club and Player agree to work in good faith with the intention of establishing marketing relationships between Player and Substantial Club Sponsors (as defined below) and Club Media Partners. Player grants Club Sponsors and Club Media Partners first right of refusal with respect to marketing relationships within their exclusive categories.

 

b)           Player agrees to work proactively and cooperate with Club to reach agreements with respect to Substantial Club Sponsors (which term shall include any sponsor in one of the Designated Categories listed in Exhibit A attached hereto which may be altered from time to time) and Club Media partners (which term shall include any Club radio, television or other media entity that carries or broadcasts Club’s games or programs/specials) on a commercially reasonable basis prior to commencing deals with any competitors of such Substantial Club Sponsor or Club Media Partner.

 

c)             Club will provide to Player’s NFLPA Certified Contract Advisor the names of all Substantial Club Sponsors and Club Media Partners, including a contact name and phone number within 30 days after the execution of the Contract. In addition, Club will provide the Player’s NFLPA Certified Contract Advisor additions or terminations of Substantial Club Sponsors or Club Media Partners within 90 days after such addition or termination, including a contact name and phone number for each addition.  Player’s NFLPA Certified Contract Advisor agrees to coordinate any communications with a Substantial Club Sponsor or Club Media Partner with Club’s Senior Vice President of Business Development, or his representative, prior to contacting such Substantial Club Sponsor or Club Media Partner.

 

d)           Player agrees that Substantial Club Sponsors shall have the exclusive right of negotiation with Player for sponsorship or endorsement of the products or services in the Designated Categories during the period commencing with the execution of the Contract and ending December 31, 2013.  Beginning with the 2014 League Year and each year thereafter during the term of the Contract, if Player is not committed to a sponsorship or endorsement agreement for a particular product or service in a Designated Category for a League Year during the term of the Contract, a Substantial Club Sponsor in that Designated Category shall have the exclusive right of negotiation with Player during the period commencing March 1st and ending May 31st of that League Year.

 

e)            Player does not intend to enter into any substantial or NFL season long media agreements for radio, television or other media programs/specials for the 2013 League Year. If Player decides to enter into a media agreement during the 2013 League Year, Player agrees that Club Media partners shall have the exclusive right of negotiation for radio, television or other media programs/specials for a 90-day period. Beginning with the 2014 League Year and each year thereafter during the term of the Contract, if Player is not committed to a media agreement for a program or special for any League Year during the term of the Contract, a Club Media Partner shall have the exclusive right of negotiation with Player during the period commencing March 1st and ending May 31st of that League Year.

 

 

	
E. M.
    	
 
    	
JO
    
	
Player   (Initial)
    	
 
    	
Club   (Initial)
    

 

10

 

f)             Player agrees to contact Club within seven (7) days after any discussions, beyond a preliminary inquiry, between (a) Player and Player’s representative and any competitor of a Substantial Club Sponsor (“Competitive Sponsor”) or (b) Player or Player’s Representative and any competitor of a Club Media Partner (“Competitive Media Entity”).  Club shall have the right, but not the obligation, to inform the appropriate Substantial Club Sponsor (if any) of the contact with Player of his representative by the Competitive Sponsor or the appropriate Club Media Partner (if any) of the contact with Player or his representative by the Competitive Media Entity.

 

g)             If Player is offered opportunities to sponsor or endorse a product, service or entity in a particular category by a Substantial Club Sponsor and by a Competitive Sponsor, and all compensation and other benefits of the two offers are equal or substantially and materially similar, Player agrees to give great deference to the offer of the Substantial Club Sponsor.

 

h)            If Player is offered media opportunities for a regularly scheduled program, show or similar opportunity on television, radio or the Internet (or other interactive media or similar media) by a Club Media partner and by a Competitive Media Entity, and all compensation and other benefits of the two offers are equal or substantially and materially similar, Player agrees to give great deference to the offer of the Club Media Partner.

 

2.                             In no event shall Player be obligated to do any such marketing or media activity not in his best interest as objectively and reasonably advised by his marketing representative or legal counsel.

 

3.                          Player agrees to refrain from engaging in any marketing or media activity, other than through Club, that would reasonably infer Club’s sponsorship or endorsement of such activity, including without limitation, use of Club’s name, logo, mark, color, uniform or other symbol identifying Club.

 

4.                          Player’s obligations under this Paragraph 25G shall be subject to the provisions of the NFLPA Group Licensing Program.

 

5.                          In the event of a conflict between certain terms and conditions of this Paragraph 25G and the terms and conditions of the Collective Bargaining Agreement dated August 4, 2011, it is agreed that the relevant terms and conditions of the Collective Bargaining Agreement dated August 4, 2011 shall control, provided, that any specific terms of this Paragraph 25G that are consistent with the Collective Bargaining Agreement dated August 4, 2011 shall remain in full force and effect. In addition it is agreed that if the Collective Bargaining Agreement dated August 4, 2011 contains terms and conditions relating to Player’s Licensing Rights not contained in this Paragraph 25G and not inconsistent with this Paragraph 25G, said terms and conditions shall be deemed a part of this Paragraph 25G.

 

 

	
E. M.
    	
 
    	
JO
    
	
Player   (Initial)
    	
 
    	
Club   (Initial)
    

 

11

 

EXHIBIT A

 

Designated Categories

Airline

Automotive (Manufacturer and Dealer)
 Financial/Banks

Grocery

Healthcare (Insurance and Service Provider)
 Quick Service Restaurant

Soft Drinks/Non-Carbonated Juices/Teas/Coffees and Water

Telecommunications (business, voice and data), inclusive of wireless communication technology

 

 

	
EJ   Manuel
    	
 
    	
James   R. Overdorf
    
	
Player
    	
 
    	
Buffalo   Bills, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
6/14/13
    	
 
    	
6/14/13
    
	
Date
    	
 
    	
Date
    

 

12

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