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Source: Entertainment Industry Contracts
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Entertainment Industry Contracts

Copyright 2010, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

PART VII SPORTS CONTRACTS

CHAPTER 209 ENDORSEMENT LICENSE AGREEMENTS

10-209 Entertainment Industry Contracts FORM 209-1

FORM 209-1 Endorsement Agreement with Commentary

CONTRACT

The Endorsement Agreement (the "Agreement") is made and entered into as of (date ) by and between XYZ Inc., a
Delaware corporation ("XYZ ''), and Joe Smith ("Player"), in order to set forth the terms of Player's engagement by XYZ
to endorse XYZ and its products.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties agree as
follows:

1. APPOINTMENT AND DUTIES.

(a) XYZ hereby engages Player, and Player hereby accepts and agrees to such engagement on the terms and conditions
of this Agreement.

(b) On XYZ's behalf and under XYZ's instruction, Player will endorse XYZ and its products, as provided herein.
(n1)COMMENT
(c) Player shall make two (2) public appearances on behalf of XYZ during the Term hereof at mutually convenient times
and places requested by XYZ, on behalf of XYZ. XYZ be responsible for all arrangements for travel and lodging expenses
for Player and/or will reimburse Player for travel and lodging reasonably incurred in the course of his making such
appearances. (n2)COMMENT

(d) Player will be available to participate in one (1) photo session during the Term at a mutually convenient time and
place, as requested by XYZ, for the purpose of taking promotional and endorsement photos of Player. (n3)COMMENT

(e) Throughout the Term, XYZ will have the exclusive worldwide right, license and privilege to use the name and
likeness of Player for promotion, advertisement, and endorsement of athletic shoes, bags, clothing and accessories. Such
right shall include but not be limited to the use, reproduction, distribution and display of the photographs produced from
the photo session described in Clause 1(d) above. (n4)COMMENT

(f) Throughout the Term, Player will wear XYZ athletic shoes during any professional basketball game (including
exhibition), and during all practices; and will not (i) during any professional basketball game (including exhibitions) or
practice, wear athletic shoes of any manufacturer other than XYZ, or wear or carry at any time in public any athletic
shoes, bags or clothing of any business entity that competes with XYZ directly or indirectly ("Competition"), if trade
name, trademark, service mark or logo of the Competitor is visible while Player is wearing or carrying such products; or
(ii) directly or indirectly promote, advertise or endorse any athletic shoes, bags, clothing, apparel, or other products of
any Competitor, or bearing any trademark, trade name or service mark, that appears on products which directly or
indirectly compete with any products of XYZ. (n5)COMMENT

2. TERMS AND COMPENSATION.

(a) The term of this Agreement shall commence on October 1, 1993 and end at midnight on September 30, 1994 (the
"Term"). (n6)COMMENT

(b) Player's base compensation hereunder shall be $10,000, payable in four installments of $2,500 each on November
15, 1993, January 15, 1994, March 15, 1994 and June 15, 1994. If Player plays in at least 62 regular season, non-
playoff games during the Term hereof, he shall receive additional compensation hereunder, which shall be determined
with references to his "Game Average". For purposes of this clause Player's "Game Average" shall be calculated by
dividing, the total number of minutes played by Player during the Term hereof, by the total number of games played by
Player during the Term hereof, which number shall not be less than 62. On September 30, 1994 XYZ shall pay the Player
the following amounts:

(i) If Player's Game Average has been 20.1 + minutes or greater, $5,000

(ii) If Player's Game Average has been between 15 and 20 minutes, $2,500. (n7)COMMENT

(c) During the Term, XYZ will provide Player with XYZ basketball shoes as needed, for performance of his duties
hereunder. During the Term, XYZ will provide Player and his family with XYZ shoes and other XYZ products having an
aggregate wholesale value of up to $3,000.00. Such shoes and clothing shall be provided as they become available.
(n8)COMMENT

3. TERMINABILITY.

(a) If, during the Term, Player (a) retires, is traded to another team, or otherwise ceases to be a member of the Orlando
Magic basketball team, (b) breaches any covenant contained in clause (1) above, (c) commits any act or becomes
involved in any situation or occurrence which brings him into public disrepute, scandal or ridicule, or shocks or offends
the Orlando community or reflects unfavorably upon XYZ or any of its products, or (d) uses, purchases, or possesses
any controlled substance or narcotic, XYZ will have the right to terminate this Agreement, effective upon fifteen (15)
calendar days advance written notice to Player. (n9)COMMENT

(b) If this Agreement is terminated pursuant to Clause 3(a) above, Player will receive none of the compensation not
already paid to him under this Agreement.

4. BINDING AGREEMENT. The rights and obligations set forth in this Agreement shall ensure to the benefit of and
shall be binding on the successors and assigns of XYZ and Player. (n10)COMMENT

5. TAX IDENTIFICATION. Player shall indemnify XYZ against all claims, liability and loss in connection with and
shall assume full responsibility for payment of, all federal, state and local taxes or contributions imposed or required
under unemployment insurance, social security and income tax laws, with respect to Smith's performance of this
Agreement or his receipt of compensation hereunder.

6. WAIVER. A party's failure to enforce any provision or provisions of this Agreement shall not in any way be
construed as a waiver of any such provision or provisions or prevent that party thereafter from enforcing each and every
other provision of this Agreement. (n11)COMMENT

7. ENFORCEMENT. Due to the personal nature of the services to be rendered by Player under this Agreement, the
injury to XYZ from any breach of this Agreement by Player could not reasonably or adequately be compensated by
damages. In case of breach, XYZ shall be entitled to injunctive relief without bond, which may include, but shall not be
limited to, restraining Player from rendering any service that would breach this Agreement. No remedy conferred by
any of the specific provisions of this Agreement, however, is intended to be exclusive of any other remedy, and each
and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or otherwise. The election of any one or more remedies by XYZ shall
not constitute a waiver of the rights to pursue other available remedies. (n12)COMMENT

8. WAIVER OF TORT LIABILITY. Smith waives, releases and agrees that he will not hold XYZ liable for any claim by
him arising out of use or association with XYZ and XYZ products including, without limitation, any claim based upon
alleged negligence or other tort liability on the part of XYZ. Player has represented to XYZ that he is adequately insured
against any injuries that he may incur while wearing XYZ products and performing his duties hereunder, and XYZ has
relied on such representation in entering into this Agreement. (n13)COMMENT

9. ASSIGNMENT. Neither party shall have any right to assign, transfer, alienate, encumber or hypothecate any of its
rights or obligations hereunder without the express prior written consent of the other party, except that Player shall have
the right to assign the financial benefits hereof and XYZ hereby consents to such assignment. (n14)COMMENT

10. RELATIONSHIP OF PARTIES. Player is, for every purpose related to this Agreement, an independent contractor,
and not an employee or agent of XYZ. (n15)COMMENT

11. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the parties hereto with respect to
the subject matter hereof and the transactions contemplated hereby and supersedes any and all oral representations and
statements by either party and any prior agreements between the parties.

12. AMENDMENT. This Agreement may not be changed, modified or amended except by written amendment signed
by both parties hereto.

13. ARBITRATION. Excepting any proceeding for a temporary restraining order, preliminary injunction or other pre-
judgment remedy, any controversy between the parties or their successors or assigns, arising under or out of this
Agreement shall be settled by arbitration under the applicable Commercial Arbitration Rules of the American
Arbitration Association (the "AAA Rules"). Any party to the dispute desiring to institute arbitration shall deliver to the
American Arbitration Association and the other party such notice which shall be effective to institute arbitration in
accordance with the AAA Rules. All arbitration proceedings shall be held in Los Angeles, California. Any award made
pursuant to arbitration may be entered as a judgment by any court of competent jurisdiction on the application of any
party to the arbitration. Notwithstanding anything contained herein to the contrary, the parties to such arbitration may
conduct discovery in accordance with Rule 1283.05 of the California Rules of Civil Procedure.

14. GOVERNING LAW. This Agreement shall be construed, interpreted and enforced in accordance with the internal
laws of the State of California without reference to its choice of law rules.
15. NOTICES. Any notices given hereunder shall be in writing and shall be served either personally or delivered by
United States mail, postage prepaid, registered or certified mail, return receipt requested. Notices may also effectively
be given by transmittal via a telecopy machine, if the party to whom the notice is being sent has such a device in its
office, provided a complete copy of any notice so transmitted shall also be mailed on the day of fax transmittal in the
same manner as required for a mailed notice. Notices shall be deemed received at the earlier of actual receipt or ten days
following deposit in United States mail, postage prepaid. Notices shall be directed to the following addresses:

(a) if to XYZ to:

attention:
telecopier number:

(b) if to Player, Joe Smith c/o

Kauffman and Rogers
1767 Sentry Parkway West
Blue Bell, PA 19422
telecopier #: (215) 542-9395

From time to time the parties may in writing designate a new address for purposes of notice hereunder by notice to the
other party hereto in the manner provided above.

Dated: ___________________
By: ___________________ ___________________
Vice President,
Marketing for XYZ
Dated: ___________________
By: ___________________ ___________________
Player
(n16)COMMENT

FOOTNOTES:
(n1)COMMENT(n1) 1.(a) and 1.(b) These sub-clauses simply state that the Player has agreed to endorse the Shoe
Company's products as is further provided in this agreement. The Player is not an employee of the shoe company but is
an independent contractor (see clause 5 infra, )
(n2)COMMENT(n2) 1.(c) In addition to endorsing the Company's products Player has agreed to make two public
appearances for the company. The Company will be responsible for the expenses incurred by the Player in making such
appearances.

In some instances a Player may be able to negotiate additional compensation in excess of that provided in clause 2(b)
infra, for making these appearances. Furthermore the number of appearances to be made is clearly negotiable. It will
usually range from two to six appearances per year of the endorsement contract.

Depending on the Player's leverage it might be wise to specify the maximum length of each appearance, excluding
travel. For example a three hour autograph session is probably the maximum you might commit for. These appearances
can be draining on the Player.
(n3)COMMENT(n3) 1.(d) This is a variation of a standard clause found in this type of agreement. This permits the
Company to photograph the Player wearing not only its shoe but its warm up suits and perhaps a hat as well. Publicity
shots are produced which are not only helpful to the Company, but often become a convenient way for the player to
give a special autograph to his fans. Frankly these promo shots are often much more striking than those done by the
Player's team.
(n4)COMMENT(n4) 1.(e) This agreement is exclusive and Company has the sole right to use the Player's name and
likeness in the marketing of its shoes and related products.
(n5)COMMENT(n5) 1.(f) Player must use only the Company's shoe while playing in any professional basketball
game or during any practice. Also the Player pledges not to wear the shoes of any competitor either during the actual
playing of basketball or at any time in public. He also agrees not to wear or carry any bags or clothing of the Company's
competitors unless the trademark or logo of the competition is not visible.

Occasionally a player might want to try another brand of shoes for one reason or another. If he does so, from a legal
standpoint, he should cover up or black out the logo. From a practical standpoint this is not likely to happen.
(n6)COMMENT(n6) 2.(a) The term of this contract expires on September 30, 1994 which is before the next
basketball season begins, thus enabling the Player to enter into a contract with a competing company for the following
season. The Company in this particular contract has no option to extend the contract or a right of first refusal to match
any offer made by a third-party shoe company.
(n7)COMMENT(n7) 2.(b) Player is to receive a base compensation of $10,000 for endorsing the Company's
products and rendering the other services described in the contract.

Player can also receive bonuses of up to $7,500 based on the average number of minutes he plays in regular season
games. Note Player must play in at least sixty-two games in order to qualify for this bonus.

Compensation paid to NBA players varies from merchandise only arrangements to contracts involving, for a select
few players, amounts that may exceed $1,000,000. The market has been changing rapidly in recent years and many
players (perhaps more than half of the league) now receive little or no financial compensation. Just a few years ago
because of the intense competition between shoe companies the twelfth man on a twelve man roster might receive ten or
fifteen thousand dollars.
(n8)COMMENT(n8) 2.(c) Player will naturally be provided with all the basketball shoes he needs to perform his
duties. Players often go through a pair of shoes in just a few games and can often be seen giving their barely-worn shoes
to young fans after the game.

In addition to game shoes, the player is entitled to a merchandise (shoes and other products of the Company)
allowance for himself and his family.

Players may choose a shoe company, partly based on the style of sweat suits that they produce.
(n9)COMMENT(n9) 3.(a) Company has the right to terminate the Agreement upon the occurrence of certain
events. Subsection (b) through (d) are the typical clauses one would expect in a contract involving personal services or
endorsement of a product.

Note that subsection (a) provides that if the player is traded, the Company also has the right to terminate. This clause
is necessary because the Company may have chosen the player in part because of the team he plays for and the market
in which the team plays. Perhaps the player might get traded to an even better market or to a team where no other player
currently utilizes the Company's product. In this situation Company is almost certain not to exercise its right to
terminate the contract.
(n10)COMMENT(n10) 3.(b) If terminated the Player will not receive unpaid compensation but the Company will
apparently not seek the return of compensation already paid.
(n11)COMMENT(n11) 5. Player is clearly an independent contractor and not an employee of the Company.
Accordingly the Player is responsible for payment of all taxes due on compensation paid pursuant to this contract.
(n12)COMMENT(n12) 7. Just as with the Uniform Player Contract the Company may seek injunctive relief if the
Player breaches the contract. The Company may seek to enjoin him from wearing another shoe brand.

Injunctive relief does not preclude the Company from seeking other remedies.
(n13)COMMENT(n13) 8. This could potentially be a very important clause in a shoe contract.

Several years ago there were a rash of foot injuries suffered by players who all seemed to be using the same brand and
model of shoe.
 Pursuant to this clause the Player waives his right to pursue a liability claim against the Company, for example,
because of defective design of the shoe.

Since, as stated in the analysis of the Uniform Player Contract (Form 210-1 supra , ) most player contracts are
guaranteed it is likely that the player will continue to be paid his basketball compensation anyway, if he is currently
under contract. Query whether a team, however, might seek to bring an action against a shoe company because of an
injury to its Player?
(n14)COMMENT(n14) 9. Standard contractual clause prohibiting assignment of rights or obligations. The only
exception is that the Player may assign his financial benefits. An example of this would be the Player assigning his
compensation to a corporation that he might form to receive all of his endorsement income.
(n15)COMMENT(n15) 10. This clause specifically states what the Company has already somewhat stated by virtue
of Clause 5 above. The Company does not want to confer upon the Player any rights that an employee would have by
law.
(n16)COMMENT(n16) 13. Fairly standard American Arbitration Association clause. Note however that any
proceedings are held in the location of the Company's headquarters.
 102QTM
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Send To: BENSON, JORDAN

UNIVERSITY OF ILLINOIS LAW LIBRARY
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