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NFL INTERACTIVE MEDIA RIGHTS AGREEMENT
among
NFL ENTERPRISES, L.P.,
and
AMERICA ONLINE, INC.,
CBS BROADCASTING INC.,
SPORTSLINE.COM, INC.
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Dated as of July 6, 2001
-------------------------------------
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CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSION.
NFL INTERACTIVE MEDIA RIGHTS AGREEMENT
This NFL Interactive Media Rights Agreement (the "Agreement") is made as
of this 6th day of July, 2001 (hereafter the "Effective Date") by and among:
A. NFL Enterprises, L.P., a Delaware limited partnership ("NFLE");
B. CBS Broadcasting Inc., a New York corporation ("CBS");
C. America Online, Inc., a Delaware corporation ("AOL"); and
D. SportsLine.com, Inc., a Delaware corporation ("SportsLine").
SportsLine, CBS and AOL are collectively the "Interactive Parties." NFLE,
CBS, SportsLine and AOL are each individually a "Party" and are collectively the
"Parties."
R E C I T A L S :
(1) NFLE operates certain Websites (as defined herein) featuring Content
relating to the National Football League and its Member Clubs (as defined
herein) (collectively the "NFL"); and
(2) NFLE owns or has the commercial right to license certain trademarks,
service marks, logos, and certain copyrights and other intellectual property
rights in valuable content, in each case relating to the NFL; and
(3) NFLE proposes to grant or to cause NFL Productions LLC, a Delaware
limited liability company ("NFL Productions") and/or National Football League
Properties, Inc., a California corporation ("NFLP") to grant to the Interactive
Parties, as applicable, subject to the terms and conditions of this Agreement,
certain intellectual property and other contract rights in connection with the
online properties of NFLE and certain other emerging technologies as specified
herein in exchange for the rights and benefits specified herein; and
(4) the Interactive Parties propose to assume certain associated
obligations (in each case as more fully defined herein); and
(5) the rights to be granted and obligations assumed by NFLE and the
Interactive Parties, as applicable, consist of the following categories, in each
case subject to the terms, conditions and limitations more specifically set
forth herein, and in connection therewith the Parties acknowledge that the
categories set forth in the recitals are intended for purposes of reference only
and that the more specific provisions referenced therein shall control:
(A) Intellectual Property Rights and Obligations.
(1) the exclusive right and obligation to produce, host, distribute and
design and display the NFL.com, Superbowl.com, NFLEurope.com,
PlayFootball.com Websites and the Customized Sites (as defined herein)
(collectively, and including for the avoidance of doubt the Co-branded
Areas, the "NFL Sites"), as set forth in Section 1 (the "Hosting and
Production Rights");
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(2) the exclusive right to receive from NFLE and to exploit, in each case
in the field of use specified herein, certain trademarks, service
marks, logos, copyrighted material, information, images and other
intellectual property associated with the production of the NFL Sites
and the exercise of the other rights granted herein, as set forth in
Section 2 (the "NFL Contributed Content Rights");
(3) the agreement by NFLE not to permit the licensing of NFL Content or
grant certain other rights to certain third parties specified in the
Agreement, as set forth in Section 3 (the "Internet Exclusivity
Rights");
(4) certain rights relating to the Member Club Websites included in the NFL
Internet Network, as set forth in Section 4 (the "NFL Internet Network
Rights");
(5) the rights to produce and use the Marks in connection with, certain
interactive Fantasy Football Products and other related online fantasy
applications on the NFL Sites, as set forth in Section 5 (the
"Interactive Game Rights");
(6) the rights to use certain NFL Content in the online and offline
promotion of the NFL Sites, as set forth in Section 6 (the "NFL.com
Promotional Rights");
(7) the rights to use certain NFL Content in the online and offline
promotion of AOL and SportsLine products and services, as set forth in
Section 7 (the "NFL Party Sponsorship Rights"); and
(8) limited rights to certain NFL Content on the Websites of SportsLine and
AOL, as set forth in Section 8 (the "Interactive Party Content
Rights"); and
(B) Financial Rights and Obligations.
(1) the obligation to fund the production and hosting of the NFL Sites in
accordance with annual budgets agreed among the Parties, as set forth
in Section 9 (the "Production Expense Funding Obligations");
(2) certain revenue and related rights and associated obligations, in
particular with respect to advertising placement and sponsorship
designations with respect to pre-existing NFLE online contractual
relationships, in each case subject to third party consent rights, as
set forth in Section 10 (the "Backlog Rights");
(3) the rights to sell and derive revenues from the sale of online
advertising and sponsorships arising out of the operation and content
of the NFL Sites as contemplated herein, as set forth in Section 11
(the "Advertising and Sponsorship Sales Rights");
(4) the rights to receive certain amounts generated by NFLE's e-commerce
activities on the NFL Sites subject to certain pre-existing NFLE online
contractual relationships and third party consent rights, as set forth
in Section 12 (the "Online Commerce Rights");
(5) subject to mutually agreed privacy policies, joint rights to exploit
all NFL Sites User Data (as defined herein) for merchandising,
direct-marketing, and other e-commerce purposes in each case, *** as
set forth in Section 13 (the "Database/Direct Marketing Rights");
(6) the rights to receive a portion of the profits generated by NFLE's
exploitation of, and certain blocking rights with respect to, certain
new media rights described herein, as set forth in Section 14 (the
"Emerging Media Rights");
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(7) the obligation to make certain payments and provide certain other
consideration to NFLE for the rights and benefits granted hereunder, as
set forth in Section 15 (the "Rights Fee Obligations"); and
(8) the right of all Parties to participate in certain revenues generated
through the exploitation of the NFL Sites, as set forth in Section 16;
and
(C) Other Rights and Obligations.
(1) certain cross-promotional rights between NFLE and the Interactive
Parties as set forth in Section 17 (the "Party Cross-Promotional
Rights");
(2) ***;
(3) ***;
(4) the rights to receive reporting credit for the NFLE site traffic and
Club site traffic, as set forth in Section 20 (the "Traffic Reporting
Arrangements");
(5) the rights to receive certain hospitality benefits, as set forth in
Section 21 (the "Hospitality Rights"); and
(6) each and all of the other rights and obligations of NFLE and the
Interactive Parties as set forth in this Agreement and not specified
above.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and obligations set forth herein, the receipt and sufficiency of which
each are hereby acknowledged, NFLE and the Interactive Parties hereby agree as
follows:
1. Hosting and Production Rights and Obligations. NFLE grants to
SportsLine the exclusive worldwide right and, subject to the limitations and
conditions of the Budget (as defined herein) as contemplated in Section 9 and
Section 16 and the Content Plan (as defined herein and attached hereto as
Exhibit C), SportsLine accepts and assumes the obligation to design, develop,
fund, produce, perform, host, display and distribute online, and maintain, the
English language versions of the NFL Sites, all in accordance with the terms of
this Agreement.
1.1 Production Requirements.
(a) Production Quality: SportsLine shall ensure that the NFL Sites
shall be of high quality and shall initially be of a quality and technical
sophistication that is at least comparable to the current NFL Sites in
terms of overall appearance, production quality, content and features,
ease of use and innovation. Subject to the Budget, SportsLine shall
periodically update and keep the NFL Sites current *** during the Term (as
defined in Section 24). Without limiting the generality of its
responsibilities under this Section, SportsLine shall, subject to the
Budget as set forth in Section 9:
(i) use commercially reasonable efforts to ensure that the
quality of the NFL Sites is consistent ***;
(ii) ***;
(iii) cause the operation of all pages on the NFL Sites to
conform to the service level and quality commitments with respect to
the operation of the NFL Sites set forth in Exhibit A;
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(iv) use its commercially reasonable efforts to coordinate
with NFLE and NFLE's current production and hosting partner to
ensure a seamless hand-over of production and hosting responsibility
to SportsLine for the NFL Sites, such that any down time and user
impact is minimized; and
(v) cause the Generally Available Sites (as defined below) to
comply with the NFL Terms and Conditions for Usage set forth in
Exhibit Q as such terms may be amended from time to time hereafter,
subject to SportsLine's approval which shall not be unreasonably
withheld or delayed.
(b) Staffing: SportsLine anticipates that staffing requirements will
fluctuate throughout the NFL Season and the remainder of the Budget year. To
ensure that SportsLine can produce the NFL Sites in accordance with the Content
Plan, SportsLine will dedicate *** people who will be responsible for managing
the content, editorial, art work, community/chat, audio and video production,
multimedia, applications development and other features contemplated to be
included on the NFL Sites in accordance with the Content Plan ("Dedicated
Personnel"). In addition, SportsLine will hire dedicated NFL Sites management
personnel *** (the "NFL Sites Managers"). During each applicable NFL Season,
SportsLine will have a minimum of *** Dedicated Personnel and the *** NFL Sites
Managers. Beyond these Dedicated Personnel, SportsLine will allocate on an
as-needed basis its existing operations staff ("Non-Dedicated Personnel") to
ensure that the NFL Sites benefit from the best personnel at SportsLine's
disposal and provide expertise in areas including technical system operations,
networking, content management systems, automated content processing, initial
user interface design, content presentation applications (server- and
client-side), sales, sales support services, business development and legal
affairs. SportsLine shall ensure that all production staff and personnel possess
the requisite professional qualifications, and work experience developing and
supporting the technologies and platforms being utilized for the NFL Sites, to
ensure the full and timely performance of SportsLine's production obligations
hereunder. ***
(c) Subcontracting: SportsLine may outsource certain production
obligations for discrete applications on the NFL Sites; subject to the following
conditions:
***
(d) Customized AOL Sites: SportsLine shall have the right and obligation
to produce the Customized Sites in compliance with the AOL Carriage Terms and
this Agreement. The Customized Sites and the Content thereon shall be the
Generally Available Sites, subject to the requirement that the Customized Sites
comply with the AOL Carriage Terms, including the advertising and transactions
standards (the "ATS"), the Commerce Terms, the Operating Standards, the Online
Terms, each as attached to the AOL Carriage Terms and subject further to the
framing of the pages of the Customized Sites with the AOL Frames. SportsLine
agrees that it shall comply with its obligations set forth in the AOL Carriage
Terms in connection with the production by SportsLine of the Customized Sites.
***
(e) No Rights to Charge Fees. SportsLine shall not charge any fees,
including subscription fees, to end-users for access to any of the NFL Sites or
any Content thereon. NFLE shall not have the right to impose subscription or
other access fees for any NFL Content appearing on the NFL Sites or any portion
thereof other than as provided with respect to Emerging Media Rights pursuant to
Section 14 hereof.
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1.2 Site Content, Layout, Development, and Approvals.
(a) Content Plan: SportsLine and NFLE have mutually agreed upon the
detailed content plan (the "Content Plan"), attached as Exhibit C hereto,
covering the appropriate overall concept and design elements, layouts, branding,
content, cross-promotional and other specifications necessary to permit
SportsLine to produce and host each and all of the NFL Sites (including WAP
pages of NFL.com as provided in the Content Plan).
(b) Revisions to Content Plan: SportsLine shall comply with the approved
Content Plan and shall ensure that all design elements, layouts, branding,
editorial material, graphics, trademarks, logos and other Content (collectively,
the "Site Elements") are inserted and hosted on the NFL Sites in accordance with
the Content Plan. The Content Plan shall be updated and revised from time to
time as may be reasonably requested by SportsLine or NFLE and subject to Section
9. NFLE shall have the right, in consultation with AOL and SportsLine, to
require SportsLine, subject to the Budget and Section 9.6, to undertake major
updates or revisions (e.g., redesign of the layouts or substantial redeployment
of Content elements or features) of the Content Plan, but not more than once per
NFL Season (and in all events prior to May 15 preceding the applicable NFL
Season) unless SportsLine otherwise consents, which consent shall not be
unreasonably withheld or delayed. SportsLine shall submit any proposed format or
overall content changes to NFLE for its prior approval in the form of an update
to the Content Plan.
(c) NFLE Approval and Removal Authority: The Parties acknowledge and agree
that NFLE has and shall retain during the Term the absolute and final editorial
control and authority, and rights of pre-approval, in each case in its sole
discretion, over the Site Elements included in the Content Plan and/or displayed
on the NFL Sites. In addition to NFLE's rights with respect to advertising and
sponsorship set forth below, NFLE has the right to require SportsLine to remove
from any NFL Site, immediately (or as soon as technologically feasible without
causing material interference with the overall display, hosting, operation and
performance of the NFL Sites):
(i) any Site Elements that were not previously approved as part of a
Content Plan (including, for the avoidance of doubt, any individual or
detailed Site Elements not expressly contemplated in the Content Plan);
(ii) any Site Elements previously and specifically approved as part
of a Content Plan the display of which the NFL subsequently determines ***
would be detrimental to or inconsistent with the image or reputation of
the NFL or professional football; or
(iii) any Site Elements that NFLE *** determines would: (A) violate
applicable law or the privacy or intellectual property rights of any third
party; or (B) be libelous or defamatory.
Without limiting the ultimate authority of NFLE to require the removal of such
Site Elements, NFLE shall: (x) consider but shall in no circumstances be
obligated to comply with the reasonable requests by the Interactive Parties for
the temporary continued display and hosting of any such Site Elements or for an
equitable adjustment thereof to the Interactive Parties, taking into
consideration the circumstances and harm arising from the continued production,
distribution and display of any such previously approved Site Element (as such
harm is perceived by NFLE in its sole but good faith discretion); and (y)
consider the impact on the Parties' obligations or any advertiser or sponsor of
any of the NFL Sites in requiring the removal of a previously approved Site
Element pursuant to clause (ii) above. In the case of advertisements sold by the
Interactive Parties which were, at the time they were sold or committed to,
permitted under the applicable ATS and not otherwise prohibited under clause
(ii) above, but which NFLE subsequently requires be removed pursuant to such
clause (ii), NFLE shall pay in cash to SportsLine, on behalf of the Interactive
Parties, as Gross Revenues the remainder of the sums due under
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the agreements for such advertisements as Gross Revenues; provided that the
underlying agreements for such advertising have terms of *** and contains a
termination right for such Interactive Party on not more than *** days notice.
For the avoidance of doubt, the Interactive Parties acknowledge that the failure
by SportsLine to comply with the take-down provisions of this Section 1.2 shall
constitute a material breach of this Agreement.
(d) Approval Process: NFLE and the Interactive Parties shall develop a
reasonable and appropriate consultative process to facilitate the development
and preliminary review of each of the seasonal updates of the Content Plan and
the associated editorial strategy, in each case prior to their submission to
NFLE for final approval. AOL's right to consultation shall relate to the
implementation of plans or editorial strategies which affect AOL's revenue
sharing rights provided for herein. The process shall, at a minimum, require
that SportsLine submit the overall content plans, advertising campaigns and
layout proposals for the NFL Sites to NFLE for pre-approval prior to final
development. Approvals of the final proposed seasonal updates to the Content
Plan, including editorial strategy and Site Elements, shall be managed according
to reasonable timelines agreed among the Parties. Without limiting the
generality of the foregoing, unless otherwise mutually agreed by the Parties,
NFLE shall use its commercially reasonable efforts to respond to proposals from
SportsLine (i) regarding seasonal updates or other material revisions to the
Content Plan and associated Site Elements within *** business days and (ii)
regarding revisions to specific or individual Site Elements, within *** business
days to proposals regarding revisions to specific or individual Site Elements,
in each case providing in reasonable detail the basis for such non-approval.
NFLE acknowledges that SportsLine may in certain circumstances have a legitimate
commercial need to obtain more prompt approvals with respect to the Site
Elements, and NFLE shall use its commercially reasonable efforts to respond to
such urgent requests during the same business day. The Parties shall develop and
agree upon guidelines for a review and revision process for any Content Plan
updates and/or Site Elements that are not approved by NFLE. The agreed process
shall require NFLE to use its commercially reasonable efforts to respond
promptly to SportsLine's proposed revisions to the Content Plan or Site
Elements. Within *** days after the execution of this Agreement, NFLE shall
designate *** contacts who have the authority to grant the approvals referred to
in this Section 1.2(d). NFLE shall provide written notice to SportsLine if it
changes these contacts.
(e) Advertising Prominence: Subject to Section 11 (including without
limitation the required compliance with the AOL Carriage Terms in respect of the
Customized Sites) and to the production quality standards set forth in Section
1.1(a), SportsLine shall sell and display advertising units on the NFL Sites;
provided that ***. The Parties further agree that the NFL Sites shall in no
event ***. Notwithstanding the foregoing, the Parties acknowledge that the
proposed mock-up of the NFL.com homepage, attached as Exhibit D-1 hereto
represents the mutually agreed level of commercialization on the NFL.com
homepage, and that advertising and commercialization of such homepage shall not
be more prominent or densely presented without the consent of NFLE and
SportsLine.
(f) Trademark and Content Guidelines: All NFL-trademarked Content
developed by the Interactive Parties, and all uses of NFL Content (including
without limitation NFL Contributed Content) by the Interactive Parties pursuant
to this Agreement, shall comply with the NFLE trademark and content ownership,
usage and approval policies attached as Exhibit E hereto (the "Trademark and
Content Guidelines").
(g) Transfer of DNS Administration: During the Term, SportsLine shall be
listed as the technical contact and the authoritative DNS servers for all
associated domains for the NFL Sites, and NFLE shall, within five (5) business
days following the execution of this Agreement, direct the registrar of the
domains for the NFL Sites to designate SportsLine as the technical contact and
the authoritative DNS for such domains. NFLE shall provide assistance as may be
requested by SportsLine in connection with the application process for, and in
administering, the NFL Sites domains during the Term.
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1.3 Editorial Strategy.
(a) Complementary Presentation and Editorial Strategy: ***
(b) Co-branded Strategy: SportsLine and NFLE shall develop
complementary editorial strategies on their respective Websites in an
effort to minimize the duplication of the content and editorial offerings
made on the NFL Sites and increase the flow of traffic between the NFL
Sites and the CBS SportsLine Website; provided that the foregoing shall
not obligate AOL to modify, delete, adapt or change in any way any Content
on the AOL Network. ***
The NFL Co-branded Areas shall feature a "look and feel" consistent with
the applicable NFL Sites Look and Feel in terms of framing, layout and
interactivity, and the NFL Co-branded Areas shall be hosted on an NFL.com
domain. Pages in the NFL Co-branded Areas shall be substantially similar
in terms of branding, layout and design to those mock-up pages reproduced
in Exhibit D-2. NFLE and SportsLine acknowledge and agree that the
following are not NFL Co-branded Areas, and, accordingly, not subject to
this Section 1.3(a): ***
(c) Relationship with NFL Broadcast Partners: *** ***
(d) Superbowl.com Site: *** SportsLine and NFLE shall update the
proposed content and promotional program for Superbowl.com each year.
SportsLine and NFLE shall negotiate in good faith and use their
commercially reasonable efforts to agree to a jointly-developed content,
co-branding and promotional plan with the broadcast partner for each
Superbowl during the Term.
(e) AOL Superbowl Information: ***
(f) CBS Superbowl Information: CBS agrees that it shall not create a
separately identifiable Website providing coverage of the Super Bowl, and
that the homepage of any CBS Sports or other CBS area related to the
Superbowl shall feature prominent links to Superbowl.com (and may also
incidentally contain links to other CBS Content relating to the
Superbowl). Nothing in the preceding sentence prohibits CBS from having
Content regarding the Superbowl on the CBS.com Website or its online
network.
1.4 Domains. SportsLine shall cause NFL.com, Superbowl.com, NFLEurope.com
and Playfootball.com to be accessible via the Internet at the following domains
and associated URLs: nfl.com, superbowl.com, nfleurope.com and playfootball.com,
respectively (such domains and associated URLs together with other domains and
URLs owned or otherwise used by the NFL shall be referred to as the "NFL
Domains"). Subject to the terms and conditions of this Agreement, NFLE grants to
SportsLine, solely during the Term, the right to use the NFL Domains currently
used for NFL.com, Superbowl.com, NFLEurope.com and PlayFootball.com solely for
the purpose of making the corresponding NFL Sites accessible via the Internet in
accordance with this Agreement and in a manner approved by NFLE, such approval
not to be unreasonably withheld. NFLE expressly reserves all right to the NFL
Domains that are not expressly granted herein. The Interactive Parties shall not
register any trademarks, service marks or domains that are similar to the NFL
Domains or that include any NFL or NFL Member Club (defined herein) marks or
names without NFLE's prior written approval. Upon NFLE's reasonable request upon
the termination or expiration of this Agreement, SportsLine shall take all
reasonably necessary actions to facilitate NFLE's use of the NFL Domains that
were licensed to SportsLine during the Term. For the purposes of this Agreement,
"Member Clubs" shall mean the professional football teams currently comprising
the NFL together with any other professional football teams admitted as members
of the NFL after the Effective Date.
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1.5 Domain Name Operational Language. For purposes of this Section 1.5,
the following terms have the following meanings: "Access Code" means each
username, password, or other code for access to the Account. "Account" means the
account of NFLE (or its applicable affiliate) with the Registrar pertaining to
each Domain Name. "Domain Name" means the domain name for each NFL Domain.
"Registrar" means the registrar, accredited by the Internet Corporation for
Assigned Names and Numbers or its successor, with which each Domain Name is
registered. "Technical Contact" means the Technical Contact for each Domain Name
as defined by, and registered with, the Registrar.
Except with advance written authorization by NFLE, SportsLine shall not change
any Access Code, change any record of the Registrar relating to any Domain Name
or Account, transfer registration of any Domain Name to any other domain name
registrar, or register any Domain Name or any confusingly similar domain name
with any registrar anywhere in the world. If, with advance written authorization
by NFLE, SportsLine changes any Access Code, SportsLine contemporaneously shall
provide NFLE with the changed Access Code. Under no circumstance shall
SportsLine identify itself to the Registrar or any other person as the owner of
any Domain Name. When NFLE designates SportsLine as Technical Contact for the
Domain Names pursuant to Section 1.2(g), SportsLine, at its expense, shall
provide all reasonable assistance and cooperation requested by NFLE in
transferring the responsibilities of Technical Contact from SportsLine's
predecessor as Technical Contact to SportsLine and from SportsLine to a
successor Technical Contact, if any, designated by NFLE. If NFLE so requests,
SportsLine immediately shall surrender access to any Account and shall cooperate
with NFLE at SportsLine's expense in removing SportsLine as Technical Contact
for any Domain Name.
2. License to NFLE Contributed Content for Production, Hosting and
Display.
2.1 License Grant. Subject to the terms and conditions of this Agreement,
NFLE grants to SportsLine in respect of the NFL Sites *** a worldwide,
non-transferable limited purpose (as set forth below) license to display,
distribute, host, modify (except as set forth in Exhibit E), perform, reproduce,
store, transmit, and otherwise use, solely during the Term (except as otherwise
expressly provided herein) and solely in the field of use specified in Section
2.2 and, with respect to SportsLine, solely for the purpose of performing its
obligations hereunder, the NFL Sites, elements of NFL Content and associated
intellectual property rights specified in this Section 2 (such NFL Content and
associated intellectual property rights as more specifically defined in Section
2.4 hereof, the "NFL Contributed Content"). The licenses granted pursuant to
this Section 2.1 shall be exclusive as and to the extent provided in Section 2.2
hereof. Notwithstanding the foregoing, SportsLine shall not modify in any
substantive way (as opposed to technical formatting necessary for display) any
NFL Contributed Content without NFLE's prior written approval. ***
2.2 No Rights to Sublicense. Except as otherwise expressly provided herein
or as NFLE may otherwise agree in writing, the license rights granted under this
Section 2 do not include any right to sublicense the NFL Contributed Content or
any portion thereof, ***
2.3 Exclusivity and Field of Use. SportsLine hereby agrees that the field
of use for which NFLE is granting license rights pursuant to this Section 2.2 is
limited to, and that the NFL Sites and the NFL Contributed Content shall
accordingly be used by SportsLine pursuant to the license granted under this
Section 2, only for purposes of the production, hosting, and online display and
distribution of the NFL Sites as contemplated in Section 1 in the English
language. *** The grant of such license rights to NFL Contributed Content does
not constitute a transfer of ownership or other rights or title to or interest
in such NFL Contributed Content, and none of SportsLine, AOL (or any AOL Member)
or CBS shall have any rights of use in or ownership of such NFL Contributed
Content except as expressly provided in this Agreement.
2.4 Definition and Scope of NFL Contributed Content. The NFL Contributed
Content Rights granted to SportsLine (and to AOL in respect of the Customized
Sites) shall consist of the license rights granted in Section 2.1 hereof to the
following types of Content and branding to be displayed on NFL Sites in
accordance with the
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Content Plan, and NFLE agrees that such NFL Contributed Content (other than
streaming audio as set forth below) shall in no event consist of a less
comprehensive package of Content than the level of NFL Contributed Content
displayed on the NFL Sites during the most recent year prior to the date of this
Agreement:
(a) Real-time scoring;
(b) Statistics;
(c) Still photo highlights;
(d) Streaming audio (subject to NFLE obtaining the rights therefor
on commercially reasonable terms from any third party holding such rights
and failing which NFLE shall work in good faith with the Interactive
Parties to provide other Content of a reasonably comparable value);
(e) Graphics;
(f) Text;
(g) Subject to Section 2.5, mutually agreed level of streaming video
programming and/or archived video content, but in no event less than the
level of NFL Contributed Content displayed on the NFL Sites during the
most recent year prior to the Effective Date;
(h) the Marks; and
(i) Such other available NFL Content developed by NFLE and its
affiliates from time to time, as may be mutually agreed in writing by NFLE
and SportsLine to be included among the NFL Contributed Content.
2.5 NFL Contributed Content Exclusions. In no event does the term NFL
Contributed Content include the television or other video system broadcast,
transmission, retransmission or other distribution of (i) a compressed version
of an NFL game (meaning a version displaying primary playing time compressed in
a shorter format); (ii) a complete NFL football game; or (iii) any portion of
any NFL game at any time during the applicable blackout window for such game
under NFLE's existing or future television contracts (any such video broadcast,
transmission, retransmission or other distribution of a game (or portion thereof
during a blackout window) is collectively referred to as an "NFL Game"). Under
no circumstances is any Interactive Party granted pursuant to this Agreement any
rights across any distribution platform in respect of an NFL Game.
2.6 Facilitation of SportsLine Content Development. NFLE shall procure
reasonable access for SportsLine news and editorial personnel to NFL players,
coaches and League-level personnel, for purposes of interviews, online chats,
and other access as outlined and approved in the Content Plan or as otherwise
may be approved by NFLE. NFLE shall be responsible for the costs and expenses of
fulfilling its responsibilities under this Section 2.6 (e.g., payment of
appearance fees); provided that NFLE shall not be responsible for any expenses
of the Interactive Parties incurred in utilizing the access provided by NFLE
(e.g., travel or other costs related to credentialed access to NFL Games) but
such expenses may be recovered by SportsLine to the extent as provided in the
Budget. For the avoidance of doubt, any Content or other materials produced as a
result of NFLE's performance of its obligations under this Section 2.6 shall be
deemed to be NFL Contributed Content.
2.7 NFLE Obligation to Produce and Deliver Certain NFL Contributed
Content. NFLE shall procure at its own expense, and produce and deliver to
SportsLine for insertion on the NFL Sites, the NFL Contributed Content specified
in Exhibit G attached hereto. The NFL Contributed Content to be delivered to
SportsLine by NFLE shall be delivered in mutually agreed formats suitable for
insertion on the NFL Sites. Except as provided
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in this Section 2.7, NFLE shall be under no obligation to produce, format,
program, edit or otherwise prepare any other NFL Contributed Content for
delivery to SportsLine in connection with the display of NFL Contributed Content
on the NFL Sites. With respect to any NFL Contributed Content to which
SportsLine has rights hereunder but for which NFLE has no affirmative obligation
to produce or deliver such NFL Contributed Content under this Section 2.7, NFLE
shall provide its reasonable assistance to SportsLine in securing such NFL
Contributed Content as contemplated in the Content Plan, and SportsLine shall
include the cost of acquiring, producing, formatting, programming and otherwise
editing such NFL Contributed Content in its Budget.
2.8 Other Editorial Support. NFLE shall provide to SportsLine a level of
editorial support (e.g., Content, personnel, etc.) consistent with the level of
editorial support provided by NFLE with respect to the NFL Sites in the most
recent prior year to the date of this Agreement.
2.9 Rights Concerning Certain Potential Television Programming.
(a) ***
(b) ***
(c) ***
3. Exclusivity.
3.1 Grant of Exclusivity. Subject to the limitations set forth below and
in Sections 3.3 and 3.4 hereof, NFLE agrees for the benefit of the Interactive
Parties not to use, license or otherwise grant rights to (or permit to be used,
licensed or granted) any NFL-owned or controlled Content or Marks (including
without limitation any Content or Marks constituting NFL Contributed Content)
(such broadly defined NFL-owned or controlled Content and the Marks,
collectively, being referred to herein as "NFL Content") for the purpose of
displaying, performing, publishing or otherwise distributing such NFL Content in
a manner that:
(a) ***; and
(b) is intended for display and interaction primarily in the English
language.
The grant of exclusivity in this Section 3.1 is referred to herein as "Internet
Exclusivity."
3.2 Limitations. Notwithstanding the generality of Section 3.1 (and for
the avoidance of doubt in respect of any grant of rights for certain
non-Internet technologies), NFLE's grant of Internet Exclusivity with respect to
NFLE's rights to use or to license other users of NFL Content does not apply to
the use, licensing or other grant of rights to use of NFL Content in connection
with:
(a) each and all of the *** Websites (including private-label
affinity e-mail applications offered thereon); provided that such Websites
and the Content thereof shall be governed by the ***;
(b) the existing NFLE agreement relating to *** on the Internet with
*** (and any amendment or extension thereof); provided that (i) the
proceeds after costs continue to be donated to charity; (ii) with respect
to any amendment or extension thereof, the level of NFL Content rights
granted thereunder is not, without the approval of the Interactive
Parties, materially greater than the level of NFL Content as deployed
thereunder on such Website, in the most recent year prior to the Effective
Date; and (iii) that such NFL Content shall be licensed for use solely in
connection with the offerings of goods and services on ***;
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(c) ***
(d) the *** Website; provided that the level of NFL Content deployed
on such Website is not, without the approval of the Interactive Parties,
materially greater than the level of NFL Content as deployed on such
Website in the most recent year prior to the Effective Date;
(e) Websites within the *** contemplated by the agreement among ***;
provided that such Websites are operated subject to the applicable
restrictions of the ***, which include restrictions on sublicensing or
granting to third parties any rights to NFL Content;
(f) the *** Website; provided that the level of NFL Content rights
deployed on such Website is not, without the approval of the Interactive
Parties, materially greater than the level of NFL Content as deployed on
such Website in the most recent year prior to the Effective Date;
(g) any license or other transaction for the licensing or other
delivery of NFL Content only for the purposes set forth below in
connection with any one or more of the following (the "Excluded
Technologies"):
(i) ***
(ii) ***
(iii) ***
(iv) ***
(v) ***
(vi) ***
(vii) ***
(viii) ***
(h) any other Internet sites or areas currently within the ***, as
listed in Exhibit H attached hereto; provided that the level of NFL
Content rights deployed on such Websites is not materially greater than
the level of NFL Content deployed during the most recent year prior to the
date of the Agreement;
(i) the grant of limited rights to NFL sponsors, licensees, and
strategic partners for the use of NFL Content; provided that any such use
on the Internet is in each case:
(i) ***
(ii) ***
(iii) ***
(iv) ***
(j) any limited grant of NFL Content to NFLE's existing or future
over-the-air television broadcasters (whether digital or analog) or
television transmitter systems (e.g., broadcast, satellite or
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cable) or radio broadcasters licensed by NFLE for use on their respective
Websites on the Internet; provided that such use is:
(i) ***
(ii) ***
(iii) ***
(k) any license, grant of rights or other transaction for Emerging
Media Rights (as defined in Section 14.8), to the extent that such
license, grant or other transaction would otherwise be subject to the
grant of exclusivity in paragraph 3.1 hereof;
(l) the license granted pursuant to the *** and any renewal or any
amendment or successor agreement entered into in accordance with Section
12.1; or
(m) any grant of rights to which the Interactive Parties may
mutually agree in writing in their sole discretion.
For the avoidance of doubt, NFLE covenants that the level and nature of the
Content for which use rights are granted in connection with the NFL Sites, in
the aggregate, shall be in all material respects at least equal to or better
than the level and nature of the Content distributed by NFLE, in the aggregate,
through any NFLE Interactive Site, other than Websites set forth in (c), (g) and
(k) of this Section 3.2, including without limitation, quality, breadth, depth,
timeliness, functionality and features. For the purposes of this Agreement,
"NFLE Interactive Site" shall mean any interactive site or area ***.
3.3 Interactive Television. ***
(a) ***
(b) ***
(c) ***
3.4 NFLE Interactive Television Cooperation with the Interactive Parties.
(a) ***
(b) ***
4. NFL Internet Network Rights.
4.1 Right to Sell Portion of League Controlled Inventory. NFLE hereby
grants the Interactive Parties the right, and SportsLine assumes the obligation,
to sell advertising for insertion and serving on League-controlled inventory on
NFL Member Club Websites ("Member Club Inventory"), subject to the Member Club
advertising exclusivities and the other restrictions contained in the NFL
Internet Network Resolution attached as Exhibit I hereto (and as modified or
otherwise provided in Section 4.3). NFLE shall use its good faith efforts to
assist SportsLine in complying with and, where appropriate and available, in
facilitating opportunities to execute advertising sales with regard to
League-controlled inventory on Member Club sites.
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4.2 Contribution of Network Advertising Revenues to Gross Revenues. All
revenues from the sale of Member Club Inventory shall be considered Gross
Revenues for purposes of Section 16.
4.3 Extension and Modification of League Network Resolution. The terms of
the NFL Internet Network resolution attached as Exhibit I hereto shall apply
during the Term, together with any non-substantive changes or other changes as
may be adopted by the Member Clubs hereafter; provided that such other changes
do not affect the rights or obligations of the Interactive Parties hereunder.
Notwithstanding the foregoing, NFLE agrees that the NFL Sites shall continue to
contain pages with Content relating to individual Member Clubs that is
comparable to the level of Content contained in and through the "Teams" button
appearing on NFL.com during the 2000-2001 NFL Season.
5. Interactive Game Arrangements.
5.1 License of Trademarks Rights for Fantasy Football Products on NFL
Sites Only. Subject to the terms and conditions of this Agreement, NFLE hereby
grants to SportsLine in respect of the NFL Sites *** a worldwide,
non-transferable, limited purpose (as set forth below), non-exclusive, personal
license to display, distribute, host, modify (except as set forth in Exhibit E),
perform, reproduce, store, transmit, and otherwise use during the Term the Marks
solely for purposes of producing, promoting, presenting, distributing and
displaying and publicly performing online on the NFL Sites Fantasy Football
Products in accordance with this Agreement. For the purpose of this Agreement,
"Fantasy Football Products" shall mean (a) *** ("Fantasy Football Games") and
(b) *** ("Fantasy Tools"). Except as otherwise expressly provided herein or as
NFLE may otherwise agree in writing, the license rights granted under this
Section 5 do not include any right to sublicense the Marks or any portion
thereof except that ***. NFLE expressly reserves all rights that are not granted
herein. The Parties hereby agree that the uses of the Marks for such purpose
shall:
(a) be included as a part of the Content Plan and subject to the
approval of NFLE in its sole discretion in accordance with the provisions
of Sections 1.2(c) and 1.2(d) hereof;
(b) comply with the Trademark and Content Guidelines; and
(c) comply with the NFL anti-gambling guidelines set forth in
Exhibit J attached hereto.
The licenses under this Section shall also include at the sole cost and expense
of NFLE, the right to use player images and other associated intellectual
property rights owned and/or controlled by Players, Inc for use in connection
with the promotion and display of such Fantasy Football Products on the NFL
Sites and promotion thereof on the AOL Network (other than on any Broadcast or
Print Media Property); provided that, for the avoidance of doubt, NFLE shall not
be required to obtain such Players Inc intellectual property rights in respect
of any SportsLine Website or the AOL Network, nor for the purposes of the
exercise by the Interactive Parties of their rights under Section 8 (except in
connection with the promotion on the AOL Network other than on any Broadcast or
Print Media Property of the Fantasy Football Products on the NFL Sites).
5.2 Coordination of Fantasy Football Products Strategies.
(a) Subject to the Budget, SportsLine shall develop a coordinated
strategy for the development and promotion of unique Fantasy Football
Products for the NFL Sites powered by Commissioner.com or SportsLine.com.
Such Fantasy Football Products shall be in addition to the suite of
products available via the CBS SportsLine Website. SportsLine agrees that
*** that the NFL Sites' Fantasy Football Products shall be released and
ready for consumer use and promotion no later than the applicable release
date of such Fantasy Football Products on the CBS SportsLine Website (the
applicable release date requirement being subject to the reasonable
cooperation and coordination of NFLE). Notwithstanding the preceding
sentence, for the 2001-2002 NFL Season, NFLE acknowledges that SportsLine
shall be required to
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deliver only those Fantasy Football Products which are substantially
identical (except with respect to branding and "look and feel") to those
Fantasy Football Products produced for the CBS SportsLine Website, unless
NFLE agrees to waive for such 2001-2002 NFL Season the requirement that
such Fantasy Football Products for the NFL Sites be available for release
no later than the applicable release date of such Fantasy Football
Products on the CBS SportsLine Website.
(b) In pursuing any other development of Fantasy Football Products,
AOL shall use commercially reasonable efforts, subject to existing
agreements, to avoid promoting, developing and/or deploying on the Sports
Channels of the AOL Service Fantasy Football Products that substantially
replicate the interactive user game play experience of Commissioner-style,
League-style and Challenge Fantasy Football Products contemplated to be
displayed on the NFL Sites pursuant to this Agreement ("Competitive
Fantasy Football Products"). ***
(c) Subject to the terms of the ***. agreement referenced in Section
5.5 hereof, and the agreements regarding the Co-branded Suite referred to
in Section 5.4 hereof, NFLE acknowledges and agrees that during the Term
(i) SportsLine shall be the sole online Fantasy Football Products partner
for NFLE and its affiliates and (ii) NFLE shall not grant any party the
right to use the Marks or other NFL Content for such party's branded
Fantasy Football Products.
(d) In the event that NFLE elects to add significant additional
features, Content or other enhancements to the Fantasy Football Products
(as compared to the features contained in such Fantasy Football Products
appearing on the NFL Sites during the 2000-2001 NFL Season) or, in the
event that the applicable subscription fee or other access charge entitles
the user to significant Content rights in addition to the access to such
Fantasy Football Products, then NFLE may, in its sole discretion but after
consultation with SportsLine, determine to charge access or subscription
fees to end users for access to the Fantasy Football Products appearing on
the NFL Sites.
5.3 No Use of Marks in Partner Fantasy Applications. Except as expressly
provided herein, including without limitation Section 5.4, the Interactive
Parties acknowledge that NFLE is granting no other rights to SportsLine or to
any other Interactive Party in respect of Fantasy Football Products pursuant to
this Agreement, and the Interactive Parties are not granted hereby any right to
use Marks or other NFL Content on their respective branded individual Fantasy
Football Products (other than the Co-branded Suite).
5.4 Development of AOL/NFL Co-branded Suite. ***
5.5 Exclusion of Other Interactive Games Transactions. ***
6. NFL Sites Promotion.
6.1 Grant of Promotional Rights. Subject to the terms and conditions of
this Agreement, NFLE hereby grants to the Interactive Parties, a worldwide,
non-transferable limited purpose (as set forth below), non-exclusive, personal,
license ***, to display, distribute, host, modify (except as set forth in
Exhibit E), perform, reproduce, store, transmit, and otherwise use online and
offline solely during the Term (except as otherwise expressly provided herein)
and solely for purposes of promoting the NFL Sites (including through the
development and use of Teaser Content and Promo Content) the NFL Contributed
Content. All uses of such NFL Contributed Content shall comply with Exhibit E.
Except for ***, as otherwise provided herein, or as NFLE may otherwise agree in
writing, the license rights granted under this Section 6 do not include any
right to sublicense the NFL Contributed Content or any portion thereof. NFLE
expressly reserves all rights not granted hereunder. The Interactive Parties
hereby agree that the uses of the NFL Contributed Content as permitted herein
shall:
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(a) comply with the Trademark and Content Guidelines, which shall
apply to all Licensed Marks (as defined herein) hereunder; and
(b) in the case of any promotional use of any individual trademarks
or logos of the Member Clubs, such individual Member Club trademarks or
logos shall be used solely online and solely in a link to or other Teaser
Content or Promo Content for the applicable NFL Sites being promoted or
linked to by the Interactive Parties; provided that the Interactive
Parties may use, offline or online, a composite display of such Member
Club trademarks or logos in which such individual Member Club trademarks
or logos appear in conjunction with the corresponding trademarks or logos
of all of the Member Clubs and not individually.
6.2 Promotional Commitments. The Parties hereby agree that they shall
undertake during the Term the promotional obligations set forth in Exhibit P.
NFLE will coordinate with the Interactive Parties regarding promotion of the NFL
Sites, including cooperation in making promotional solicitations to prior NFL
Sites end users (subject to applicable privacy policies).
7. Party Sponsorship Rights.
Subject to the terms and conditions of this Agreement, NFLE hereby grants to
each of *** and SportsLine the right to be an official NFL sponsor and in
connection therewith grants to each of the Interactive Parties a worldwide,
non-transferable limited purpose (as set forth below), personal license to
display, distribute, host, modify (except as set forth in Exhibit E), perform,
reproduce, store, transmit and otherwise use online and offline solely during
the Term (except as otherwise expressly provided herein) the Marks defined in
Exhibit E, Part A and such other NFL Content as *** SportsLine may reasonably
request for use as icons, advertising shots, or other promotional devices, in
each case subject to the prior approval of NFLE, such approval not to be
unreasonably withheld (cumulatively, the "Licensed Marks"), solely as follows:
(a) by each of *** and SportsLine, solely in, and with exclusivity
solely in, its respective assigned business category as defined in Exhibit
L;
(b) in conjunction with appropriate "official" designations for ***
and SportsLine, respectively, as set forth on Exhibit L, together with
such additional and/or substitute designations as NFLE and the Interactive
Parties may mutually agree from time to time;
(c) in compliance with the Trademark and Content Guidelines;
(d) subject to the restriction, at all times during the Term, that
in connection with any use or display by either of *** SportsLine of any
of the trademarks or logos of the Member Clubs pursuant to the license
granted under this Section 7, such use must be a composite use or display
in which such Member Club trademarks or logos appear in conjunction with
the corresponding trademarks or logos of all of the Member Clubs, and not
individually; and
(e) ***.
Except as NFLE may otherwise agree in writing, the license rights granted under
this Section 7 are personal and do not include any right to sublicense the
Licensed Marks or any portion thereof.
The Parties agree the business category designations of *** SportsLine shall be
treated as "protected categories" in respect of which none of the Parties may
sell competing advertising or sponsorship rights on or in relation to the NFL
Sites to any competitors of *** SportsLine in such categories. NFLE agrees that
if any of the Interactive Parties desires to represent itself as an NFL sponsor
within a different business category through the use of any
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additional or substitute designations, it shall send a written request to NFLE
seeking NFLE's approval of such designation(s). NFLE shall use its commercially
reasonable efforts to respond to such request within *** business days. The
granting of any such substitute or additional designations shall be in NFLE's
sole discretion, and the use of such designations by *** SportsLine,
respectively, shall be subject to the same restrictions and provisions set forth
above with respect to the initial designations.
8. Interactive Party Content Rights.
8.1 Grant of License to SportsLine. Subject to the terms and conditions of
this Agreement, NFLE hereby grants to SportsLine a worldwide, non-transferable
limited purpose (as set forth below) non-exclusive (but subject to Section 3
hereof) license to display, distribute, host, modify (except as set forth in
Exhibit E), perform, reproduce, store, transmit, and otherwise use solely
online, solely during the Term (except as otherwise expressly provided herein)
and solely for use in connection with the production, hosting and display of the
NFL, football, and sports areas of CBS SportsLine Website, the Marks and the NFL
Content specified in Section 8.4. The Parties hereby agree that the uses of the
NFL Content pursuant to the license granted in this Section 8.1 shall in all
cases:
(a) comply with the provisions of a general content plan, provided
in advance to NFLE (and subject to NFLE's approval prior to use),
outlining in reasonable detail the proposed usage of the Marks and the
other NFL Content;
(b) be subject to the prior written approval of NFLE in respect of
the overall concept, design, linking strategy and presentation of
campaigns and Content, such approval not to be unreasonably withheld or
delayed;
(c) comply with the Trademark and Content Guidelines; and
(d) be subject to the restriction that no video clips to which
rights are granted hereunder shall be displayed, performed, shown or
otherwise accessible during the applicable blackout window in respect of
the television broadcast or other retransmission of any NFL Game.
8.2 Grant of License to AOL. ***
8.3 For Use by AOL. ***
8.4 For Use by SportsLine. In furtherance of the license rights granted
under Section 8.1 hereof, NFLE shall provide to SportsLine, subject to the terms
of such Section 8.1, the following Content in a format that is mutually agreed
upon by NFLE and SportsLine:
(a) Video Clips: NFLE shall provide *** video clips (of
approximately *** duration each, which shall not be edited or incorporated
in a longer video or other broader defined-Content offering) per week for
use on the CBS SportsLine Website. Clips must include prominent links to
additional video on NFL.com. Video clips may be archived for a *** period,
subject to NFLE's confirmation that no residual obligations shall result
from such archiving. During the Term, NFL shall agree not to provide nor
authorize the use of any video clips (for use online) to any of the
following SportsLine competitors: ESPN/ABC, CNN/SI, NBC Sports, FoxSports,
USA TODAY, Sporting News, Yahoo Sports or MSNBC, except that video clips
shall be available to NFL Broadcasters as contemplated by Section 1.3(c)
hereof.
(b) Audio Game Broadcasts: NFLE shall provide *** live audio game
*** per week for SportsLine (such broadcast to be determined by NFLE in
consultation with AOL and SportsLine), ***. The audio broadcast shall
include prominent links to additional audio broadcasts (if any) on
NFL.com.
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Audio broadcasts may be archived for a *** period subject to NFLE's
confirmation that no incremental residual obligations shall result from
such archiving. If such broadcasts are not available on commercially
reasonable terms, NFLE shall provide some content substitute in its
reasonable discretion.
(c) Marks: In connection with the promotion of Section 8 NFL
Content, NFLE shall provide use of the Marks for SportsLine solely for use
on the NFL areas of its Website, subject to the Trademark and Content
Guidelines. For the avoidance of doubt, SportsLine shall have no right to
use the Marks in any area of its Website in which Fantasy Football
Products are displayed or distributed, except for the areas or pages
displaying the Fantasy Football Products contemplated by Section 5 hereof.
(d) Chats: NFLE shall provide SportsLine with *** Internet chat
sessions per month, featuring players, coaches, league personnel and other
experts/analysts. During each NFL Season, *** of the *** chats per month
shall be either active players or active coaches, including head coaches.
For the avoidance of doubt, NFLE's obligations hereunder are to provide
access to the personnel for the chat, not to produce the chat for
distribution.
(e) Promotions and Sweepstakes: NFLE grants SportsLine the right to
conduct online promotions and sweepstakes with giveaways such as NFL
tickets, NFL merchandise, Fantasy Football Products experiences,
memorabilia etc., subject to NFLE's prior written approval, such approval
not to be unreasonably withheld or delayed. Such promotions and
sweepstakes may not be sponsored. For the avoidance of doubt, NFLE shall
not have any obligation to provide prizes or other awards to support such
promotions.
(f) Discounts/Other Member Services: NFLE shall work with SportsLine
to identify other SportsLine "member" benefits such as discounts on NFL
merchandise, personal appearances with players, member Q&A sessions, etc.
NFLE shall provide at least one member benefit per quarter.
9. Production Expense Funding.
The Parties shall agree to an annual budget as well as annual budgeting
procedures relating to the costs of SportsLine's performance of its hosting and
production obligations in respect of the NFL Sites (the "Budget"). Additional
terms relating to the Budget for 2001 and subsequent years are as follows:
9.1 2001 Production Budget. The Parties mutually agree to the Budget
attached as Exhibit M for the first year of the Term.
9.2 Subsequent Annual Budgets. In each subsequent year of the Term,
SportsLine shall submit its detailed proposed Budget in writing to NFLE and the
other Interactive Parties in accordance with Section 9.3. Subject to the
limitations of this Section 9, the proposed Budgets shall contain all costs
proposed to be incurred by SportsLine's in the performance of its hosting and
production obligations in this Agreement in respect of the NFL Sites.
9.3 Included and Excluded Costs. The Budget shall include direct and
incremental expenses and directly attributable overheads (e.g., hosting costs,
ad-serving costs, part-time resources) to the extent provided in Exhibit M.
Unless otherwise agreed by CBS, NFLE and AOL, in each of their reasonable and
good faith discretion, SportsLine shall not include in the annual Budget
submission (and shall not be entitled to allocate for purposes of the annual
Budget or cost recovery in Section 9.5 below) any categories of overhead or
other indirect costs of a nature not included in the first Budget. ***
9.4 Procedure for Approval of Subsequent Budgets. SportsLine shall present
its annual Budget proposal to the Parties no earlier than February 15 and not
later than March 15 of each year of the Term. The Parties shall
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then consider and negotiate the items to be included in the Budget and the costs
attributable thereto. In consultation with the Parties, SportsLine shall make
appropriate changes to its initial Budget submission and resubmit the Budget as
a final Budget proposal to the Parties. In the event that no agreement can be
reached among the Parties in respect of all or any line item of the overall
Budget within thirty (30) days following the date on which SportsLine has
submitted its initial Budget proposal for such year, then the Budget (or the
budgeted amount, in respect of any individual line items not so agreed) for such
year shall be equivalent to the Budget (or line item) approved or deemed
approved for the prior year, plus an inflation factor of ***.
9.5 Entitlement to Cost Recovery. SportsLine's entitlement to
cost-recovery of the production and ad serving costs of the NFL Sites pursuant
to Section Error! Reference source not found. shall be based on the approved
Budgets in each year, and SportsLine acknowledges and agrees that it shall be
responsible for cost over-runs in excess of the annual Budget. Notwithstanding
the foregoing, the Parties acknowledge that the Budget contains certain line
items (as specifically identified in Exhibit M) that are contemplated to be
traffic- and/or ad-serve sensitive as more fully set forth on Exhibit M
("Variable Expenses") and therefore not within the reasonable control of
SportsLine. The Parties agree that such Variable Expenses shall be projected for
planning purposes in the Budget, but that SportsLine shall be entitled to
recover pursuant to Section Error! Reference source not found. *** of the actual
cost of the Variable Expenses incurred by SportsLine which may be higher or
lower than the projected amount; provided that all costs are directly related to
increases in traffic. The Parties acknowledge that in some instances these
Variable Expenses will be allocations of SportsLine expenses based on the
percent utilization by the NFL Sites to allow maximum cost efficiencies and
synergies to be achieved. SportsLine agrees to notify CBS, AOL and NFLE promptly
as soon as it becomes aware that any such line items shall be materially in
excess of the amount approved in the Budget.
9.6 SportsLine Obligations to Accept Budget Revisions. NFLE may in its
reasonable discretion request improvements or enhancements to the Content Plan,
production, functionality or other elements of the NFL Sites during a Budget
year. SportsLine shall not unreasonably refuse such requests; provided that any
such change shall result in a revision to the Budget for the applicable year.
Notwithstanding the foregoing, during the first year of the Term, SportsLine
shall agree to implement changes requested by NFLE to the extent the Content
Plan omitted any material element included within the NFL Sites during the
2000-2001 NFL Season (and to so revise the Budget) where the costs of
implementing such changes do not exceed ***. For changes resulting in an
increase in costs in excess of such *** threshold during the first year of the
Term and subject to SportsLine's obligation not to unreasonably refuse (and to
include in the Budget) requests from NFLE for such improvements or enhancements,
SportsLine shall be entitled to require, as a condition to accepting such change
request and in lieu of a corresponding increase in the Budget, that NFLE
reimburse SportsLine for all or a reasonable portion of the cost of any material
change request. NFLE's required interim revisions to the Budget and the
corresponding obligations of SportsLine pursuant to this Section 9.6 shall not
become part of the Budget for the following year without SportsLine's prior
written consent.
10. Backlog Rights.
NFLE hereby assigns to the Interactive Parties the rights to receive all
proceeds to which NFLE is entitled, less any directly allocable out-of-pocket
expenses paid to third parties, with respect to existing advertising,
sponsorship and co-development agreements for existing online projects, subject
to required third party approvals, as follows (it being understood that the
agreements set forth below shall not be deemed to violate the exclusivity or any
other rights granted to the Interactive Parties pursuant to this Agreement and
that the Interactive Parties shall have no obligations with respect to such
agreements except as set forth below in Section 10.1, Exhibit L (Part D) and/or
in the Content Plan):
10.1 Existing Sponsors. With respect to existing sponsorship agreements
for which rights payments are specifically allocated in whole or in part to
NFL.com, all net sponsorship revenues specifically allocated to NFL Sites are
assigned to SportsLine on behalf of the Interactive Parties and treated as Gross
Revenues for
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purposes of profits and cost recovery allocations under Section 16. The Parties
shall honor existing sponsorship categories and obligations, and existing
advertising, placement, promotional and inventory obligations for promotional
content and online impressions on the NFL Sites, as set forth below and on
Exhibit L, ***
***.
NFLE guarantees payment to SportsLine as Gross Revenues of not less than *** in
respect of such existing advertising, placement, promotional and inventory
obligations for promotional content and online impressions for the 2001-2002 NFL
Season. If such amount has not been paid to SportsLine as Gross Revenues on or
before November 1, 2001, NFLE shall pay the difference of such amount to
SportsLine no later than November 5, 2001.
10.2 ***Site. Agreement remains in place and administered by NFLE; 100% of
NFLE's net profits shall be contributed to SportsLine, on behalf of the
Interactive Parties, as Gross Revenues for purposes of profits and cost recovery
allocations under Section 16.
10.3 ***Site. Agreement remains in place and administered by NFLE; 100% of
NFLE's net profits shall be contributed to SportsLine, on behalf of the
Interactive Parties, as Gross Revenues for purposes of profits and cost recovery
allocations under Section 16.
10.4 ***. Agreement remains in place and administered by NFLE; 100% of
NFLE's net profits shall be contributed to SportsLine, on behalf of the
Interactive Parties, as Gross Revenues for purposes of profits and cost recovery
allocations under Section 16.
10.5 ***Site. The *** site shall continue its cross-promotional
relationship with NFL.com. This is a non-commercial site.
10.6 *** Site. Agreement, once executed, remains in place and administered
by NFLE; 100% of NFLE's net profits directly from site shall be contributed to
SportsLine, on behalf of the Interactive Parties, as Gross Revenues for purposes
of profits and cost recovery allocations under Section 16. However, the
Interactive Parties shall not receive a share of NFLE equity in ***.
10.7 *** Site. NFLE shall continue the cross-promotional relationship
between NFL.com and the *** Site. This is a non-commercial site.
10.8 NFL/*** Site. Agreement shall remain in place and be administered by
NFLE. In the event that NFLE decides in its sole discretion to retain profits
from online auctions with *** and not (as is currently the case) to contribute
such profits to charity, 100% of NFLE's net profits shall be contributed to
SportsLine, on behalf of the Interactive Parties, as Gross Revenues for purposes
of profits and cost recovery allocations under Section 16. The agreement
regarding share of profits applies solely to League-level profits from ***
arrangements, and not to any Club-level profits. All Club-level profits/proceeds
are excluded from the terms of this arrangement.
10.9 Potential *** Game Site. 100% of NFLE's net profits from the *** game
site shall be contributed to SportsLine, on behalf of the Interactive Parties,
as Gross Revenues for purposes of profits and cost recovery allocations under
Section 16. Upon the execution of the agreement for the Websites produced by
***, the agreement shall remain in place and be administered by NFLE; *** of
NFLE's net profits shall be contributed as Gross Revenues for purposes of
profits and cost recovery allocations under Section 16. The Interactive Parties
shall not receive a share of any *** equity allocated to NFLE under those
proposed arrangements.
NFLE agrees that in the event that NFLE is unable to secure the consent of any
of the relevant third parties to the assignment of the net proceeds from such
existing projects and sponsorships as outlined above, NFLE shall pay to
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SportsLine as Gross Revenues, on or before ***, an amount in cash equal to the
aggregate amount of allocable revenues or net profits actually received from
such third parties for which such consent to assignment has not been obtained.
NFLE shall use commercially reasonable efforts to enforce the third party
obligations of such agreements, and the Interactive Parties acknowledge and
agree that SportsLine shall comply with the placement and promotional
obligations on the NFL Sites for such agreements as outlined in Exhibit L, Part
D. NFLE shall be permitted to renew or extend any such agreement on
substantially similar terms; provided that such renewal or extension shall not
further erode the exclusivity granted to the Interactive Parties in Section 3
hereof.
11. Advertising and Sponsorship Sales Rights.
Subject to: (i) the right of NFLE to continue to sell (for the account of
SportsLine as further provided herein) advertising on and sponsorships for NFL
Sites (with placements to be coordinated by SportsLine as provided herein); and
(ii) *** in respect of the production of an NFL *** Channel pursuant to the
agreement referred to Section in Error! Reference source not found. hereof, NFLE
grants to *** the exclusive rights to sell sponsorships for and advertising for
insertion and serving on the NFL Sites. *** acknowledge that such rights shall
include, for avoidance of doubt, the right to sell any advertising that may be
proposed for insertion in online direct marketing arising out of the NFL Sites
(e.g., advertising inserted in email communications to user of the NFL Sites);
provided that (a) with respect to direct marketing to User Data in respect of
***'s own goods and services, *** shall have the right, but not the obligation,
to permit SportsLine to insert advertising in such direct marketing efforts in
accordance with the terms of this Agreement; and (b) if *** elects to include
advertising in any direct marketing efforts governed by the preceding clause
(a), such advertising shall be governed by the terms of this Agreement. In
addition to the foregoing and to the Content, layout and commercialization
provisions set forth in the Content Plan and Section 2 hereof, the exercise by
NFLE and the *** of their advertising and sponsorship sales rights granted
hereby is further subject to the following terms:
11.1 SportsLine Obligations. *** acknowledge that SportsLine, as the
primary sales agent and exclusive sales manager, has (a) the primary right and
responsibility for selling, and (b) the exclusive right as the primary obligor
in respect of all such advertising sales, to schedule and insert advertising on
the NFL Sites, and all advertising sales conducted by *** shall be coordinated
through, booked on behalf of, accounted for by, and fulfilled through
SportsLine. ***. SportsLine shall have sole responsibility for the insertion of
all advertising on the NFL Sites sold by ***, and shall allocate insertion
orders for advertising sold by *** reasonably and in good faith. Furthermore,
SportsLine shall bill and collect all revenues, and all associated sales, use,
and ad valorem taxes, for all advertising sold on the NFL Sites; provided that
to the extent advertising is sold by a Party other than SportsLine, at the
Party's option, SportsLine shall either bill and collect from the advertiser
directly or from the selling Party, net of the selling Party's sales commission
as set forth in Section 11.16. All advertising revenue collected by SportsLine
shall be deemed Gross Revenues for purposes of the allocation set forth in
Section 16.1.
11.2 Rate Card Approval. ***
11.3 Coordination with NFLE; Allocation of Revenues to NFL Sites. ***
shall each work with SportsLine to develop a cooperative sales process and
communications protocol to maximize advertising and sponsorship opportunities on
the NFL Sites. The Parties acknowledge that NFLE may sell broad-based NFL
sponsorships or advertising that provide for aggregate payments for promotional
rights, advertising and/or sponsorship of multiple NFL-related venues, events,
properties and programming. Subject to the remaining provisions of this Section
11 concerning protected categories, in the event that such broad-based
sponsorships or advertising include, inter alia, the sale of sponsorship or
advertising rights in respect of the NFL Sites, NFLE shall allocate an
appropriate portion of such sponsorship or advertising revenues received by NFLE
(and the purchase of sponsor promotion and/or advertising serving on the NFL
Sites at the rate card rates or other rates mutually agreed by the Parties)
attributable to advertising on the NFL Sites in its sole but good faith
discretion.
11.4 ***
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11.5 NFL Sponsors. ***. With respect to placements on the NFL Sites, NFLE
is entitled to approve, and shall cooperate with SportsLine as exclusive sales
manager in developing strategies for making approaches and completing the sale
of online advertising/sponsorship to official NFL sponsors. NFLE shall provide
SportsLine with contacts at all NFL sponsors and agrees to make reasonable
efforts to set up initial meetings/conference calls.
11.6 Protected Categories. The premium sponsorships and strategic partners
listed below are deemed "protected categories," and none of the Interactive
Parties may sell advertising or sponsorship rights on or in relation to the NFL
Sites to any competitors of the NFL sponsors in these categories prior to ***:
(a) Malt beverages (beer, ale, malt liquor, and non-alcoholic malt
beverages) ***;
(b) Consumer activated payment systems including, without
limitation, credit cards, charge cards, debit cards (on-line and
off-line), stored value cards (e.g., smartcards), travelers checks, and
electronic travelers checks ***;
(c) Affinity credit cards, debit cards, charge cards and stored
value cards ***;
(d) Airlines ***;
(e) Beverages, including all hot and cold, carbonated, nonalcoholic,
non malt-based nondairy drinks, as well as prepackaged coffee and tea ***;
(f) *** Sports apparel and accessories ***;
(g) *** Isotonic/sports beverages ***;
(h) *** Wireless devices and related infrastructure hardware (***);
and
(i) *** Satellite TV (***).
No Minimum Category Price (as defined below) or other amount shall be required
to be paid by or on behalf of such sponsors or strategic partners to maintain
such protected status (and, without the separate purchase of advertising on the
NFL Sites, no advertising will be provided on the NFL Sites to such sponsors or
partners) during the period from the Effective Date and ending on ***.
11.7 Protection of Sponsors/Partners in Subsequent Seasons. From and after
***, at any time and from time to time during the Term, NFLE has the option to
extend for additional years the prohibition on competitive
advertising/sponsorship sales and continue to protect (or to re-protect) any of
the sponsorship "protected categories" set forth in clause 11.7(a)(i) below for
such key sponsors or strategic partners by notifying *** in writing of its
election to so protect such sponsorship categories not later than *** of the
year for which such protection is sought by NFLE:
(a) As compensation for such protection in the case of the key
sponsorship categories designated in clauses (a) through (e) of Section
11.6, NFLE shall pay to SportsLine in cash on the date notice is given
pursuant to this Section 11.7 (or, in the case of a contractually-agreed
schedule with such sponsor, on the third business day following NFLE's
receipt of such sponsor payment(s)), for contribution to Gross Revenues
for purposes of profits and cost recovery allocations under Section 16 an
amount in cash in respect of each such key sponsorship category that NFLE
desires to protect (the "Sponsorship Category Protection Price") equal to
the positive difference, if any, which results by subtracting:
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(i) any payments (A) made during such year by such key sponsor
to any Party and (B) properly allocated to the purchase of
advertising on and/or sponsorship rights in respect of any of the
NFL Sites, from
(ii) an amount equal to the greater of (A) ***of the aggregate
annual cash payments made by such League-level sponsor to NFLE as
consideration for League-level sponsorship rights granted, including
revenues passed through to the Member Clubs of the NFL,*** (such
League-level cash sponsorship payments to NFLE being referred to
herein as "National Sponsorship Revenues"), and (B) the Minimum
Category Price for such sponsorship category as follows***
(b) With respect to the strategic partner categories set forth in
clauses 11.6(f) through 11.6(i) hereof (but without reference to the
specific current holders thereof), NFLE may purchase extensions by paying
to SportsLine as a contribution to Gross Revenues an amount in cash in
respect of each such Strategic Partner category that NFLE desires to
protect (the "Strategic Partner Category Protection Price,") equal to the
positive difference, if any, which results by subtracting:
(i) any payments (A) made during such year by such strategic
partner to any Party and (B) properly allocated to the purchase of
advertising on and/or sponsorship rights in respect of the NFL
Sites, from
(ii) *** in respect of each such strategic partner category,
(except for the ***category, in respect of which such amount shall
be ***
11.8 Treatment of Category Protection Price Payments. NFLE may designate a
sponsorship or strategic partner category as protected (and thereby obtain the
protection against competitive advertising or sponsorship for such categories)
by providing written notice to AOL, CBS and SportsLine and paying to SportsLine,
on behalf of the Interactive Parties, in cash on such notice date (or, in the
case of a contractually agreed payment schedule with such sponsor, on the third
business day following NFLE's receipt of such sponsor payment(s)) the
Sponsorship Category Protection Price or Strategic Partner Category Protection
Price, respectively, (any such payment being referred to generally hereafter as
a "Category Protection Price") prior to NFLE's receipt of any National
Sponsorship Revenues or other advertising revenues from key sponsors or
strategic partners in such categories. Payment of such Category Protection
Amount to SportsLine, on behalf of the Interactive Parties, as provided herein
as Gross Revenues shall constitute the purchase by NFLE (for its own account for
in-house or use on behalf of such protected sponsor or strategic partner, as the
case may be) of the corresponding amount of NFL Sites advertising inventory at
the prevailing rate-card or other agreed advertising rates determined in
accordance with Section 11.2 (including any applicable discounts). Upon payment
of the Category Protection Price in respect of a protected sponsorship or
strategic partner category, NFLE shall be deemed to have contributed to Gross
Revenues an amount equal to the Category Protection Price, and such amount shall
be credited against NFLE's obligations to contribute such amount to Gross
Revenues upon receipt of any advertising or sponsorship revenues properly
available to the NFL Sites in such category. Thereafter, upon receipt of
advertising or sponsorship revenues from a protected sponsor in respect of which
NFLE has paid a Category Protection Price, NFLE shall be entitled to retain and
not contribute to Gross Revenues the allocable amounts received from such
sponsor, to the extent that such amounts do not exceed the Category Protection
Price paid by NFLE. In the event that any of the Interactive Parties collects
any advertising or sponsorship revenues from a protected sponsor that are
properly allocable to the NFL Sites (including without limitation the Customized
Sites), any previously paid Category Protection Price shall be recalculated and
the applicable Interactive Party shall pay to NFLE, prior to contributing any
such amount to Gross Revenues, an amount of such collected advertising or
sponsorship revenues sufficient, when combined with all other such payments to
NFLE in respect of such protected category, to reimburse NFLE for the aggregate
Category Protection Price previously paid by NFLE in respect of such protected
sponsorship category. NFLE shall receive no commissions under Section 11.16 in
respect of NFLE's payment of (or reimbursement for the payment of) the Category
Protection
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Price. However, upon receipt of advertising or sponsorship revenues from a
protected sponsor in respect of which NFLE has paid a Category Protection Price,
and if such revenues are:
(a) otherwise properly allocable to Gross Revenues but for the
provisions of this paragraph, and
(b) the aggregate amount of such properly allocated revenues would
be in excess of the Category Protection Price paid by NFLE,
then, in such event, the Parties shall, after reimbursement of NFLE for its
prior payment of the Category Protection Price as provided above, contribute as
Gross Revenues the excess of all such amounts received (and so allocated) over
the Category Protection Price paid by NFLE, and NFLE shall be entitled to its
commission payment under Section 11.16 (for sales closed by NFLE) in respect of
the amount of such excess.
11.9 Additional Protected Categories. NFLE has the option at any time
during the Term to designate up to *** other offline key sponsorship categories
that shall be deemed online "protected categories" for purposes of Section 11.8
hereof and for all other purposes hereunder (including the prohibition on
competitive advertising and sponsorships), by notifying *** in writing of its
election not later than the May 1 preceding the applicable NFL Season,
designating in such written notice (a) the category definition, and (b) the
identity of the offline sponsor (or prospective offline sponsor) being
protected. As compensation for such protection, NFLE shall contribute an amount
equal to the Category Protection Price to SportsLine, on behalf of the
Interactive Parties, in cash on such notice date (or, in the case of a
contractually agreed payment schedule with such sponsor, on the third business
day following NFLE's receipt of such sponsor payment(s)) as Gross Revenues for
each such category (assuming for purposes of each such additional category that
the Minimum Category Price for such additional category is ***, and as such
Category Protection Price would otherwise be determined in accordance with
Section 11.7 in respect of the existing key sponsor categories) to Gross
Revenues for purposes of profits and cost recovery allocations under Section 16,
and shall receive a corresponding amount of NFL Sites advertising inventory at
the prevailing rate-card or other agreed advertising rates (including any
applicable discounts referred to in Section 11.2).
11.10 Additional Protected Categories at Market Rates. In addition to the
foregoing, on or before May 1 preceding each applicable NFL Season, NFLE shall
have the option, at any time during the Term to purchase comparable sponsor
protection for buy commitments for additional sponsors or prospective sponsors
at then-prevailing market rates for sponsorship preferential treatment as
reasonably established by SportsLine, based on the overall level of sponsorship
revenue available in the category for which NFLE is seeking such protection. If
any such sponsor protection is purchased by NFLE at then-prevailing market
rates, the applicable category shall be deemed a "protected category" for
purposes of Section 11.8 hereof and for all other purposes hereunder (including
the prohibition on competitive advertising and sponsorships).
11.11 First Right of Refusal to Non-Protected NFL Sponsors. ***
11.12 Advertising Sales to Sponsor Competitors. SportsLine may sell
advertising to competitors of NFL sponsors in non-protected categories; provided
that unless NFLE consents, SportsLine may not sell Integrated Online
Sponsorships (as defined herein) to such competitors, and such competitors may
not be featured on the NFL Sites in a manner that, in NFLE's sole but good faith
judgment, implies an association with, sponsorship of, or other relationship
with the NFL, or in which the competitor's advertising or marks are used in
conjunction with NFL marks and logos. NFLE agrees to work with SportsLine to
develop suitably creative advertising units *** for such competitors. ***
11.13 Open Categories. For categories in which there is no existing NFL
sponsor, SportsLine may sell any online media on the NFL Sites. With respect to
any online media package that constitutes an Integrated
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Online Sponsorship in any of such categories, SportsLine may sell such
Integrated Online Sponsorship on a case-by-case basis, subject to:
(a) the compliance of such sponsor with customary NFL sponsorship
terms and conditions in substantially the form attached as Exhibit K;
(b) the allocation by SportsLine of a credit to NFLE (for payment
only in the circumstances set forth and as otherwise provided in Section
11.14 below) for an online sponsorship fee of an amount equal to *** of
the gross revenues received by SportsLine from such sponsor in respect of
the NFL Sites (including any amounts reasonably allocated to the NFL Sites
in respect of cross-site sponsorships for both SportsLine sites and NFL
Sites) (the "NFLE Sponsorship Credit Amount");
(c) NFLE's approval, in its reasonable discretion, of such
sponsorship; and
(d) such sponsorship having a term of not more than one year.
11.14 Payment of NFLE Sponsorship Credit Amount. Gross Revenues shall be
deemed to include all properly allocable sponsorship revenues net of the amount
of the NFLE Sponsorship Credit Amount until such time as the aggregate amount of
Gross Revenues shall have exceeded the amount referred to in Section Error!
Reference source not found.. Within ten days following the date, if any, on
which the Interactive Parties have received pursuant to this Agreement revenue
sharing payments of the entire $140 million amount referred to in Section 16.1
hereof, SportsLine shall remit to NFLE a payment in an amount equal to the
aggregate NFLE Sponsorship Credit Amount then credited to the account of NFLE.
Thereafter, SportsLine shall continue paying to NFLE any unpaid NFLE Sponsorship
Credit Amount on a quarterly basis in respect of all applicable sponsorship
revenues during the Term.
11.15 Special Rule for SportsLine Run-of-Site Banner Advertising. The
Parties agree that, subject to each of the category protections and other
limitations set forth herein with respect to advertising appearing on the NFL
Sites, SportsLine may sell run of site banner advertising for random insertion
on the CBS SportsLine Websites and the NFL Co-branded Areas and that revenues
from such advertising sales may be retained entirely by SportsLine and shall not
be required to be contributed as Gross Revenues hereunder. SportsLine
acknowledges that this exception applies only to banner advertising appearing on
both the CBS SportsLine Websites and the NFL Co-branded Areas and agrees to
allocate reasonably such advertising units based on historical traffic and
insertion patterns on the former CBS SportsLine Website pages that are included
within the NFL Co-branded Areas.
11.16 Commissions. Except as otherwise more specifically provided herein
including Section 11.13 hereof, for advertising and sponsorship sales on the NFL
Sites, the selling Party, whether NFLE or any one or more of the Interactive
Parties, shall receive a commission for ad sales on the NFL Sites equal to ***
For the avoidance of doubt, except as otherwise provided herein, no Party shall
be entitled to a commission unless such Party shall close the sale to advertiser
by delivering to SportsLine a signed insertion order for such sale. The Parties
further agree to allocate reasonably among themselves the commissions earned on
joint sales.
11.17 Prohibited Advertising/Sponsorship Categories. All advertising and
sponsorship sales shall be subject to the ATS; provided that (i) with respect to
the Customized Sites, both NFLE and AOL shall have the discretion and authority
to enforce such ATS, (ii) with respect to the Generally Available Sites, only
NFLE shall have such enforcement discretion and authority, and (iii) with
respect to all of the NFL Sites, NFLE shall have the right to prohibit
advertising or sponsorship for any other products or services that NFLE
determines in its reasonable discretion improperly imply an association or
affiliation with or endorsement of such advertiser by, the NFL or are otherwise
inconsistent with the image of the NFL or the Clubs.
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11.18 Retained Inventory. The Parties acknowledge that NFLE shall be
allocated and entitled to retain *** of the total advertising inventory on the
NFL Sites for in-house NFLE advertising and promotion (including without
limitation (a) the sale of NFL game tickets, (b) the promotion of NFL Insider
subscriptions, (c) any Emerging Media Rights initiative or other commercial
venture in which NFLE or any of its affiliates is a direct participant, so long
as such advertising and/or promotion is not third-party branded, and (d) other
internal NFL brand-enhancing commercial efforts) at NFLE's sole discretion (but
in no event shall the promotions referred to in clauses (a) through (d) hereof
be used for third party-related commercial purposes or for re-sale). NFLE shall
also have the right to use in the same manner not less than *** of any unsold
advertising inventory. Subject to Section 10 hereof, all such in-house
advertising appearing on the Customized Sites shall be subject to the AOL
Carriage Terms. NFLE and SportsLine shall agree to a reasonable allocation of
such inventory, and SportsLine shall not propose insertion or serving schedules
for such NFLE-retained inventory that disadvantage NFLE as compared to other
sponsors or advertisers on the NFL Sites. For the avoidance of doubt, such NFLE
inventory shall be required to comply with the ATS, and no inventory retained by
NFLE within the Co-branded Areas may be used for the promotion of Fantasy
Football Products.
12. Online Commerce Rights.
12.1 Online Commerce Rights. Subject to the terms of this Section 12, NFLE
hereby assigns to the Interactive Parties the exclusive right to receive as
Gross Revenues (a) all revenues from the conduct of e-commerce activities
through the NFL Sites by, or on behalf of, the Interactive Parties and (b) all
revenues, less actual direct third party expenses, received by NFLE from its
conduct of e-commerce activities through the NFL Sites.
12.2 Current On-Line Merchandise Vendor and/or Fulfillment Partner. The
Interactive Parties acknowledge, except as otherwise provided herein, that their
rights hereunder are subject to the terms and conditions of that certain ***;
provided that
***
NFLE shall remit to SportsLine, on behalf of the Interactive Parties, as Gross
Revenues subject to Section 16 all revenues owing to NFLE from *** pursuant to
the *** Agreement, less direct out-of-pocket expenses incurred by NFLE;
provided, that in the event that (x) NFLE negotiates an increased royalty from
***, as part of a revision to the existing agreement with *** (including any
automatic extensions thereof in accordance with its terms through the *** NFL
Season), and (y) such revised agreement is on substantially similar terms to the
existing agreement (including any such renewals) other than any revisions to
such royalty rate ***, NFLE shall retain and shall not be required to contribute
as Gross Revenues *** of the amount by which the increased royalty exceeds ***
of the gross revenues from the operation NFLShop.com.
12.3 Successor On-Line Merchandise Vendor and or Fulfillment Partner. The
selection of an online merchandise vendor and/or fulfillment partner as
successor to ***, and the terms of such e-commerce relationship, is at the
NFLE's sole discretion; provided that NFLE shall consult with the Interactive
Parties in good faith before making such selection and shall notify the
Interactive Parties of such an agreement and shall send each of the Interactive
Parties a copy of such agreement and any such successor shall be obligated to
comply with the terms of this Agreement. NFLE shall not, without the prior
written consent of the Interactive Parties, agree to engage any such party or
parties under terms that permit such party or parties to pay royalties (or other
comparable form of consideration) in respect of e-commerce transactions that are
materially less favorable to NFLE than those under the ***. ***.
12.4 Promotion for NFL Shop. SportsLine *** agree to provide prominent
promotion for the NFL Shop on the NFL Sites in each case, respectively, in
accordance with the SportsLine Promotion Plan ***.
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12.5 Similar E-commerce Site(s). In the event NFLE determines to establish
e-commerce merchandising sites similar to those on the NFL Sites via other
distribution outlets (e.g., ***), the Parties acknowledge and agree that such
relationships shall be permitted under the terms of this Agreement, but shall be
subject to, and all revenues from such ventures, except as otherwise provided in
Section 12.3 hereof, shall be deemed Gross Revenues payable to SportsLine and
allocated as otherwise provided herein.
12.6 Treatment as Gross Revenue. All amounts payable to NFLE from its own
e-commerce activities through the NFL Sites (less directly allocable expenses)
shall be considered Gross Revenues for purposes of the cost recovery and profit
calculations under Section 14.1.
12.7 Certain Transactions Excluded. Notwithstanding any provision of this
Agreement to the contrary, the Interactive Parties shall not be entitled to
receive any revenues from the online sale of tickets and/or any associated
commissions therefrom, membership in any NFL affinity club that is also
available offline or any revenues derived from online sales of subscriptions to
NFL Sunday Ticket or any other cable, satellite, or other subscription or
pay-per-view access to the telecast of NFL Games or to NFL Insider or any
successor or additional offline magazine.
13. Database Privacy, Ownership and Direct Marketing Rights.
13.1 Collection and Reporting of User Data.
(a) ***
(b) ***
13.2 Ownership of User Data. The Parties' ownership of and rights to use
and exploit User Data shall be as follows:
(a) With respect to User Data obtained from the Customized Sites or
the Co-branded Suite during the Term, AOL shall own all right, title and
interest in such User Data. AOL hereby grants to each of the Parties a
worldwide, perpetual and irrevocable royalty-fee license to use such User
Data for any business purpose allowable under applicable law, subject to
(i) the mutually agreed-upon Privacy Policy (defined below) and (ii) the
AOL Carriage Terms;
(b) With respect to User Data obtained from the Generally Available
Sites during the Term, NFLE shall own all right, title and interest in
such User Data. NFLE hereby grants to each of the Interactive Parties a
worldwide, perpetual and irrevocable royalty-free license to use such User
Data for any business purpose allowable under applicable law, subject to
(i) the mutually agreed-upon Privacy Policy (defined below), (ii) the NFLE
Terms of Service and (iii) the terms of this Agreement; and
(c) Subject to their compliance with the usage restrictions set
forth herein and the provisions herein regarding required contributions to
Gross Revenues during the Term, the Parties shall have no duty to account
to the owner of such User Data for their usage of such User Data to which
rights have been granted hereunder.
Notwithstanding the foregoing, the Parties shall not have the right to sell,
disclose or provide User Data to any third party unless such third party agrees
to be bound by the restrictions on User Data set forth in this Agreement.
13.3 Privacy Policy. The Parties shall agree in writing on a mutually
acceptable privacy and data usage policy with respect to data collected from NFL
Site users (and AOL users on Customized Sites). Such privacy policy shall be
substantially in the form attached as Exhibit N hereto, as may be amended from
time to
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time upon mutual written agreement of the Parties (the "Privacy Policy");
provided that the Privacy Policy shall not be applicable to users on the AOL
Network other than as users of the Customized Sites. Each NFL Site and each
Customized Site shall contain a link to the Privacy Policy, which shall be
available to users on web pages hosted and served by each of SportsLine and AOL.
Each Party shall use User Data only in accordance with the Privacy Policy and
applicable law.
13.4 Revenue Share. ***
13.5 Restrictions on Use. ***.
14. Emerging Media Rights.
NFLE agrees to provide the Interactive Parties with the following rights in
connection with Emerging Media (the "Emerging Media Rights," as such term is
defined below), as follows:
14.1 Profit Sharing. ***
14.2 Cap on Sharing Payments. ***
14.3 Payments. NFLE shall remit any Emerging Media Shared Profits to
SportsLine on or before May 15 of each year during the Term for distribution to
the Interactive Parties as set forth on Exhibit O. The Parties may by mutual
agreement agree to net such payment against rights payments due under Section
16.
14.4 Allocation of Revenues. In any transaction in which NFLE receives
revenues that would constitute Gross Revenues, Emerging Media Rights revenues,
and/or revenues not subject to this Agreement, NFLE shall allocate such revenues
(and any costs associated therewith in determining the amount of Emerging Media
Shared Profits) in NFLE's reasonable discretion, exercised in good faith and in
a manner consistent with NFLE's past practice, among the Gross Revenues,
Emerging Media Rights revenues and other NFLE revenues not subject to this
Agreement. In effecting such allocation, NFLE shall take into consideration all
factors reasonably necessary to render a fair and reasonable allocation, but the
Interactive Parties acknowledge that the ultimate allocation of such revenues
and costs shall be within the reasonable discretion of NFLE.
14.5 No Obligation to Enter Transactions. NFLE shall make reasonable
efforts to investigate and exploit its Emerging Media Rights opportunities.
However, NFLE is not obliged to enter into any Emerging Media Rights transaction
and may reject any proposed or potential transaction in its sole discretion.
14.6 First Right of Refusal. ***
14.7 Promotion on and Access Through NFL Sites. The Interactive Parties
agree that the products and/or services offered pursuant to executed Emerging
Media Rights transactions (whether such transactions are undertaken with
Interactive Parties or third Parties) shall receive prominent advertising and/or
promotion (as determined by the Parties in their reasonable discretion in
respect of any such promotion other than that allocated to NFLE's retained
advertising inventory) on NFL Sites without charge to NFLE (or the relevant
Emerging Media Rights partner). Such promotion may consist of graphical links
(as appropriate for Internet-accessible offerings), content or access linking,
advertisements and/or other reasonable promotional elements; *** The level,
types and promotional prominence of such promotion shall be determined
reasonably by the Parties based upon the expected Emerging Media Shared Profits
from such opportunity. Where appropriate, the Emerging Media Rights offering
must be available for purchase, access or subscription on or through NFL.com
and/or such other NFL Sites as may be reasonable in the circumstances; provided
that such offering contains links back to the originating NFL Sites. With
respect to any such advertising and/or promotion on the Customized Sites, such
advertising and/or promotion shall comply with the AOL Carriage Terms. For the
avoidance of doubt, such
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promotional inventory shall be allocated reasonably among the Parties, and shall
not be drawn exclusively from the NFLE reserved advertising inventory on the NFL
Sites.
14.8 Definition of Emerging Media Rights: Subject to Section 14.9, for
purposes of this Agreement, the term "Emerging Media Rights" shall be defined as
the grant by NFLE (or its affiliates) of rights to NFL Content in the following
areas:
(a) ***.
(b) ***
(c) ***
(d) ***
(e) ***
(f) ***
14.9 Exclusions from Emerging Media Rights Definition. ***
(a) ***
(b) ***
(c) ***
(d) ***
(e) ***
14.10 Advertising/Sponsorship Rights. In connection with any Emerging
Media Rights application to be offered or made accessible through any of the NFL
Sites, and subject to the reasonable discretion of NFLE, the Parties acknowledge
the presumption that SportsLine shall be appointed to sell advertising and, as
may be appropriate, sponsorships of such application in accordance with the
terms hereof. If the sale of advertising by SportsLine is so approved by NFLE,
NFLE shall coordinate with SportsLine to establish a mutually acceptable sales
policy, including retention of commissions, commission levels, and other terms,
to permit SportsLine to effect such sales and to coordinate such sales with
SportsLine's advertising and sales campaigns for the NFL Sites.
15. Rights Fees Obligations. In consideration of the rights and benefits
granted by NFLE hereunder, and in addition to the assumption of their respective
financial and performance obligations hereunder, the Interactive Parties agree
as follows:
15.1 Rights Fee Payments. Except as otherwise provided in Section 15.3,
the Interactive Parties agree, severally but not jointly, to make the following
payments to NFLE during the Term, in each case in accordance with the allocation
of responsibility for making such payments as set forth on Exhibit O:
(a) $*** million for the first year, to be paid in quarterly
installments with the first installment due and payable not later than ***
business days following the Effective Date, and the subsequent
installments to be paid on or prior to ***;
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(b) $*** million for the second year, to be paid in quarterly
installments on or prior to ***;
(c) $*** million for the third year, to be paid in quarterly
installments on or prior to ***;
(d) $*** million for the fourth year, to be paid in quarterly
installments on or prior to the next succeeding ***; and
(e) $*** million for the fifth year, to be paid in quarterly
installments on or prior to the next succeeding ***.
15.2 Early Withdrawal by AOL.***
15.3 SportsLine Shares. SportsLine agrees to issue to NFLE SportsLine
voting common stock (the "SportsLine Common Stock") as follows:
(a) Within ten business days following the date on which this
Agreement is executed, SportsLine shall issue instructions to its transfer
agent to issue a certificate in the name of NFLE representing 350,000
shares of SportsLine Common Stock;
(b) Provided that NFLE has not exercised its right pursuant to
Section 24.2 to terminate the Agreement after the 2002-2003 NFL Season,
SportsLine shall, at SportsLine's sole option, on or before May 31, 2003,
either (i) pay to the NFLE $1,333,333 (one million three hundred
thirty-three thousand three hundred thirty-three dollars) in cash, or (ii)
issue instructions to its transfer agent to issue a certificate in the
name of NFLE representing a number of shares of SportsLine Common Stock
having a Fair Market Value (as defined herein) of $1,333,333 (one million
three hundred thirty-three thousand three hundred thirty-three dollars) as
of May 22, 2003; and
(c) Provided that *** NFLE has not exercised its right pursuant to
Section 24.2(b) to terminate the Agreement after the 2003-2004 NFL Season,
*** SportsLine shall, at SportsLine's sole option, on or before May 31,
2004, either (i) pay to NFLE $2,666,667 (two million six hundred sixty-six
thousand six hundred sixty-seven dollars) in cash, or (ii) issue
instructions to its transfer agent to issue a certificate in the name of
NFLE representing a number of shares of SportsLine Common Stock having a
Fair Market Value of $2,666,667 (two million six hundred sixty-six
thousand six hundred sixty-seven dollars) as of May 22, 2004.
For purposes of this Section 15.3, "Fair Market Value" shall mean the average of
the closing prices of the SportsLine Common Stock on the NASDAQ National Market
(or if the SportsLine Common Stock is listed on a national securities exchange
or admitted to unlisted trading privileges on such exchange, on the primary
stock exchange, or exchanges, on which it is traded) for the twenty (20) trading
days ending on May 22, 2003, in the case of Section 15.3(b) or on May 22, 2004,
in the case of Section 15.3(c).
15.4 Forfeiture Upon Breach. If this Agreement is terminated by any of the
Interactive Parties pursuant to Section 24 as a result of a material breach by
NFLE of any of its obligations under this Agreement, then NFLE shall deliver to
SportsLine within fifteen (15) business days after the date this Agreement is so
terminated (the "Termination Date") the number of shares of SportsLine Common
Stock and/or an amount in cash, as applicable, as specified below:
(a) if the Termination Date occurs prior to May 21, 2002 (the "First
Anniversary"), one-half the number of shares SportsLine Common Stock
issued pursuant to Section 15.3(a);
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(b) if the Termination Date occurs on or after the First Anniversary
and prior to May 21, 2004 (the "Third Anniversary"), no shares of
SportsLine Common Stock;
(c) if the Termination Date occurs on or after the Third Anniversary
and prior to May 21, 2005 (the "Fourth Anniversary"), one-half of the
number of shares of SportsLine Common Stock issued, or one half of the
amount in cash paid, as the case may be, to NFLE pursuant to Section
15.3(c); and
(d) if the Termination Date occurs on or after the Fourth
Anniversary, no shares of SportsLine Common Stock or cash paid.
15.5 Rule 144 Reporting. In order to make available to NFLE (and its
affiliate, designee or assignee) (collectively, a "Holder") the benefits of Rule
144 promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), as such rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Securities and Exchange Commission (the
"SEC") providing for offers and sales of securities made in compliance therewith
resulting in offers and sales by subsequent holders that are not affiliates of
an issuer of such securities being free of the registration requirements of the
Securities Act ("Rule 144"), SportsLine agrees to use its commercially
reasonable efforts to file the reports required to be filed by it under the
Securities Act and the Securities Exchange Act of 1934, as amended, and the
rules and regulations adopted by the SEC thereunder in a timely manner and, if
at any time it is not required to file such reports, it shall, upon the request
of a Holder, make publicly available other information so long as necessary to
permit sales of SportsLine Common Stock pursuant to Rule 144.
15.6 Rights Fee Exchange. ***
16. Profit Sharing from Advertising/Sponsorship Sales, E-Commerce and
Direct Marketing Rights.
16.1 Allocation of Gross Revenues. All revenues derived from the
exploitation of the rights granted hereunder in respect of the NFL Sites,
including, but not limited to, advertising/sponsorship sales, e-commerce
revenues and direct marketing exploitation from the NFL Sites (the "Gross
Revenues") shall be remitted to SportsLine and shall be applied and distributed
annually as set forth in Section 16.2, in respect of payments actually received
during the course of such NFL financial year (ending March 31), in the following
order, and with respect to the allocation among the Interactive Parties as
specified on Exhibit O:
(a) ***
(b) ***
(c) ***
(d) ***
(e) ***
(f) ***
16.2 Payment Mechanics. All payments by SportsLine under this Section to
NFLE or the Interactive Parties as the case may be, are due and payable
annually, on each May 31 during the Term. Not later than May 1 of each year,
each of the Parties shall provide to SportsLine and the other Parties a detailed
written accounting statement showing the total amount of Gross Revenues
collected by such Party during the year ended March 31. Such accounting
statement shall include detailed information regarding the Gross Revenues
collected by such Party (including advertiser, amount received, date received
and category of advertiser), any commissions to which
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such Party is entitled pursuant to Section 11 hereof, and any expenses for which
such Party is entitled to recoupment pursuant to Section 16.1 hereof. SportsLine
shall consolidate such individual Party statements and shall deliver to each of
the Parties, not later than 5 business days prior to such annual payment dates,
a consolidated reconciliation statement showing the amounts due to and from each
Party pursuant to the Gross Revenue allocation rules set forth in Section 16.1
hereof and as otherwise provided in this Agreement. Where appropriate based on
the aggregate allocation of payments, SportsLine shall net a Party's payment
obligations to any one or more of the other Parties against amounts due to such
paying Party. Any disputes regarding payments or the calculation thereof shall
be subject to Dispute Resolution as provided in Section 37 hereof.
16.3 Multi-Year Sponsorships. With respect to sponsorship sales for the
NFL Sites made prior to the end of the Term for which payment is received
following the Term, NFLE shall apply such payments and distribute the revenues
to the Parties as soon as practicable in accordance with this Section 16.
17. NFLE Promotions. The promotion plan set forth in Exhibit P and the AOL
Carriage Terms attached as Exhibit B detail the agreed cross-promotions
(including both online and offline placements) and online carriage obligations
for each of the Parties in connection with this Agreement (such Exhibit and the
carriage obligations contained in the AOL Carriage Terms collectively, the
"Promotion and Carriage Plans"). The Parties hereto shall provide the respective
carriage, placements, and other promotions (the "Promotions") set forth in the
Promotion and Carriage Plans for the applicable Party for each year of the Term,
and, where applicable, shall use commercially reasonable efforts to provide such
Promotions evenly throughout the years of the Term. The Party being promoted
shall in each case provide to the Party that is the subject of the Promotion all
information concerning the Promotion and other details of the Promotion as may
be reasonably requested by such promoted Party to value the Promotions so
undertaken (such information, where applicable, to be consistent with past
practices between such Parties). The Party being promoted shall have the right,
in its reasonable discretion, to approve the creative form, substance, nature
and location of Promotions *** provided for the benefit of such Party hereunder.
*** All such references or mentions of a Party, and the use of such Party's
trademarks, trade names and service marks shall be made in accordance with the
relevant provisions of this Agreement, AOL's Keyword and Logos Guidelines
attached hereto as Exhibit R and such other reasonable trademark protection
policies of the promoted Party as may be adopted from time to time hereafter. In
the event that a party obligated to offer Promotions hereunder shall be unable
to deliver any of the Promotions set forth in Exhibit P ("Unfilled Promotions"),
such Party shall provide the Party entitled to receive the Promotions with
comparable Promotions of equivalent fair market value ("Substitute Promotions").
The Parties agree that the fair market valuation of any and all Unfilled
Promotions and Substitute Promotions shall be as reasonably agreed among the
affected Parties, or fai |
