UNIVERSITY OF KENTUCKY UK PURCHASING DIVISION NOTICE OF AWARD OF PRICE CONTRACT NIKE, Inc ‘One Bowerman Drive Beaverton, Oregon 97005-6453 Representative: Stan Clark Phone: 503-671-4838 Fax: 503-671-6336 PRICE CONTRACT NO.: UK-0121-1 TERMS: Net CONTRACT PERIOD - FROM: — September 1, 1997 DELIVERY TIME: TO: August 31, 2002 RENEWAL OPTION THRU: August 31, 2007 INVITATION NO.: — PK-0013-5 COMMODITY/SERVICES: Athletic Apparel and DEPARTMENTS: Athletics Equipment ALL PRICES ARE F.0.B. DESTINATION UNLESS OTHERWISE SPECIFIED ‘The Contractor Is hereby awarded this Price Contract to furnish the items listed AS MAY BE REQUIRED by the Univorsity of Kentucky during the period indicated. Variations in specifications will not be accepted. SHIPMENTS ARE TO BE MADE ONLY UPON RECEIPT OF OFFICIAL NOTIFICATION. This Price Contract is written in accordance with the terms, conditions and specifications of the bid submitted by the Contractor in response to the University of Kentucky's Invitation to Bid referenced above ‘and constitutes the entire agreement between parties and supersedes all other agreements, written or oral. DESCRIPTION AWARD OF CONTRACT This establishes a contract between the University of Kentucky and NIKE, Inc. to provide Athletic Apparel & Equipment for the University of Kentucky Athletics. TERM OF AGREEMENT ‘The term of this Agreement is from September 1, 1997 thru August 31, 2002 OFFICIAL APPROVAL OFFICIAL SIGNATURE UNIVERSITY OF KENTUCKY irector / (859) 257-9100 ext 232 Signature Date Typed or Printed Name Titlewo June 10, 1997 VIA FEDERAL EXPRESS Mr, Dick Plymale, Esq, University of Kentucky Administration Building Circle Room 2 : Lexington, KY 40508-0019 RE: Kentucky/NIKE Multi-Sport Agreement Dear Dick: am pleased to enclosed a fully-executed copy of the referenced agreement. Please note that | have reviewed with our product supply staff the hand-written changes that Kyle Moats made to the product grid that accompanied the executed contracts and have confirmed that they are acceptable with one exception--at this late date, we are unable to accommodate the additional camp t-shirts requested for this summer. We are hopeful that this does not create too much of an inconvenience. _ —_— =— Once again, thank you for your patience and considerable assistance in concluding this agreement. We at NIKE are pleased to have concluded this agreement with the University and look forward to a long association with Kentucky's rich basketball tradition. Very truly, Apr Dd. W Gary B. Way GDWirik ec: Chris Bevilacqua Attachment: (agreement) AECEIVED JU 12 1997 NIKE ING ONE BOWERMAN DRIVE, BEAVERTON, OF 97005-6452 TEL soza7i-euss raxOffgcohLegabCounsel University of KentuckyUNIVERSITY of KENTUCKY ALL SPORT PRODUCT SUPPLY AGREEMENT THIS IS A PRODUCT SUPPLY AGREEMENT made and entered into by and between the University of Kentucky Athletic Association (hereinafter "UNIVERSITY"), located at Memorial Coliseum, Lexington, Kentucky 40506-0019 and NIKE, Inc. (hereinafter “NIKE*), an. Oregon corporation having its principal offices at One Bowerman Drive, Beaverton, Oregon 97005-6453. WITNESSETH WHEREAS, UNIVERSITY fields and maintains nationally recognized athletic teams in Numerous sports (and retains the coaches and staff in connection therewith) and owns all right, litle and interest in and to the names, nicknames, mascots, trademarks, service marks, logographics and/or symbols, and any other recognized reference to UNIVERSITY or its “intercollegiate Athletic’ Programs” (as defined below); and WHEREAS, NIKE is a sports and fitness company engaged in the manufacture, distribution and sale of athletic and athleisure footwear, apparel and related accessories, and desires to support UNIVERSITY and its intercollegiate athletic programs as described belo NOW, THEREFORE, in consideration of the mutual promises, terms and conditions set forth her is agreed as follows: 1. DEFINITIONS. As used in this Agreement, the terms set forth below shall be defined as follows: (@) "NIKE" shall mean NIKE, Inc., its licensees, distributors, subsidiaries and any ‘successor company. (0) “UNIVERSITY Marks" shall mean the names, nicknames, mascots, trademarks, service marks, logographics and/or symbols, and any other recognized reference to the University of Kentucky's Intercollegiate Athletic Programs. (c) "Intercollegiate Athletic Program(s)" shall mean all existing organized team and individual sports (including cheerleading) sponsored by UNIVERSITY, subject to Paragraph 3 below, and such other replacement or additional intercollegiate athletic programs as may be established from time-to-time during the term of this Agreement. (d) “Flagship Program(s)" shall mean any of the following Intercollegiate Athletic Programs: Men's Baskatball; and Football (€) ‘Team shall mean that group of athletes attending the UNIVERSITY’s Lexington campus during the term of this Agreement and comprising the roster of each Intercollegiate Athletic Program. (f) *Game" shall mean game, match, meet, test or such other competition reference as is appropriate to each individual sport. (9) “Coach” shall mean an individual employed during the term of this Agreement to act as a head coach of an Intercollegiate Athletic Program. (h) "Coach Attributes" shall mean a Coach's name, nickname, initials, autograph, facsimile signature, voice, video or film portrayals, photographs, likeness and image or facsimile image, and any other means of identification used by such Coach. Except as otherwise provided herein, each Coach shall retain all rights in and to his or her name and endorsement, and neither UNIVERSITY nor any Coach2 shall be prevented from using, permitting or licensing others to use a Coach's fame or endorsement in connection with the advertisement, promotion or sale of any product or service other than “Products” (as defined below), ()*Staff* shall mean, collectively, all assistant coaches and strength coaches, equipment managers, trainers and any on-field/courtside staff (e.g., ballpersons, basketball stat crews, etc.) employed by UNIVERSITY during the term of this Agreement to provide services to Intercollegiate Athletic Programs. @ ‘Contract Year" shall mean each consecutive twelve (12) month period from September 1 through August 31 during the term of this Agreement. (k) "NCAA" shall mean the National Collegiate Athletic Association. () “Conference” shall mean the intercollegiate athletic conference of which UNIVERSITY is a member. (m) *Products" shall mean: (1) all athletic and athletically inspired or derived footwear (specifically including hockey skates) that members of any of Team, Coaches and/or Staff wear or may be reasonably expected to wear while participating in their respective Intercollegiate Athletic Program; (2) authentic competition apparel consisting of uniforms, sideline or courtside Jackets and sweaters, game-day warm-ups, basketball shooting shirts, football player capes, wool and fitted caps, windsuits, rainsuits, sideline or Courtside pants, shorts and shirts, and similar apparel, and practicewear (collectively, "Authentic Competition Apparel") that members of any Team, Coaches and/or Staff wear or may be reasonably expected to wear whila Participating in their respective Intercollegiate Athletic Program; (3) all other apparel articles of an athletic or athleisure nature including but not limited to tank-tops, T-shirts, sweatsuits, separates and other body coverings, and accessories of an athletic or athleisure nature, including but Not limited to headwear, headbands, wristbands, bags, socks, hand-towels, receiver's and linemen’s gloves, batting gloves, that members of any Team, Coaches and/or Staff wear or use or may be reasonably expected to wear or se while participating in their respective Intercollegiate Athletic Program; (4) _ sports equipment including, but not limited to, basketballs and other inflatable balls, bats, hockey equipment, protective eyewear, eyewear with Performance attributes and sunglasses, sports timing devices (including wristwatches, race timers, stopwatches, etc. and devices used for competition or training that are also used in combination with timing devices ‘such as heart-rate monitors or calorimeters), and such other equipment as NIKE may add to its Product lines at any time during the term of this Agreement and subject to the provisions of Paragraph 16 below and further Subject to the reasonable satisfaction of the Athletic Department (and the relevant Coach) as to the quality and suitability of such new equipment item and its compliance with NCAA specifications; and (5) sports-themed instructional and entertainment home video products (“Video Products"), and electronic, computer, arcade, video and virtual reality games and devices (‘Electronic Games") as may be specifically approved by UNIVERSITY during the Term on a case-by-case basis. NIKE Kentucky Agreement osves73. NIKE/Kentucky Agraement 3 (n) “NIKE Products" shall mean all Products in connection with which, or upon which, the NIKE name, the Swoosh Design, the NIKE AIR Design, the Basketball Player Silhouette (“Jumpman”) Design or any other trademarks or brands (e.g., Bauer, Sports Specialties) now or hereafter owned and/or controlled by NIKE (collectively, “NIKE Marks") appear. (0) “Net Sales" means the total gross invoice amounts of the “Licensed Articles’ (as defined in Paragraph 5 below) billed customers or payments received, whichever is greater, including the royalty amount, less lawful quantity discounts actually allowed and taken as such by customers and shown on the invoice, less any credits for returns actually made as supported by credit memoranda issued to customers, and less sales taxes and prepaid transportation charges on Licensed Articles if shipped by NIKE. No deduction shall be made for direct or indirect costs incurred in the manufacturing, selling, advertising (including cooperative and Promotional allowances) or distributing the Licensed Articles, nor shall any deduction be made for uncollectible accounts, cash discounts, similar allowances or any other amounts. (p) “Alliance Bow!” shall mean any of the following bowl games among which is rotated the game designated as the so-called college: football “National Championship", and such additional or replacement bowl games as may be established and included in the alliance: the Orange; Sugar; Fiesta; or Rose Bowl. (@) “Tier | Bow!" shall mean any of the following non-Alliance Bow! games traditionally played on New Year's Day and such additional or replacement New Year's Day bowl games as may be established: the Citrus; Cotton; Gator; or Outback Bowl. TERM. This Agreement shall remain in full force and effect for a period of five (5) Contract Years, from September 1, 1997 through August 31, 2002 (the “Initial Term”), unless extended pursuant to Paragraph 15 below or sooner terminated in accordance with the terms and conditions hereof (collectively, the “Term"). This Agreement shall be interpreted in its entirety and not as a series of one-year agreements. PRE-EXISTING CONTRACTS. (@) NIKE acknowledges that UNIVERSITY js party to pre-existing contracts with respect to product supply of the following Intercollegiate Athletic Programs: (©) UNIVERSITY warrants that set forth on Exhibit A hereto is true and complete list of each company with whom UNIVERSITY has such an agreement, the program covered by each agreeinent, and the expiration date of such agreement. The Parties agree that: (i) upon the expiration of each such agreement, the covered rogram (and any Coach thereof, subject to expiration of any relevant personal services agreement) shall be deemed subject to all terms and conditions of this Agreement; and (ji) the terms of this Agreement shall not be deemed, or construed in any manner, to diminish any rights NIKE may have pursuant to any pre-existing agreement NIKE may have with the Coach of any Intercollegiate Athletic Program. GRANT OF ENDORSEMENT RIGHTS. UNIVERSITY hereby grants to NIKE, and NIKE hereby accepts, (i) the designation as “the exclusive supplier of the athletic footwear, apparel and accessory products of (designated Team)” and “the exclusive athletic footwear, apparel and accessories sponsor of (designated Team)", and/or such similar designations as the parties may osraver4 agree upon (collectively, the “Designations”), and (i) the right to utilize (subject to the approval provisions of Paragraph 13 below) the UNIVERSITY Marks, Coach Aitributes andlor Designations worldwide, in any media (now known or hereafter created) inoluding, but net limited to, the worldwide web (e.g., as content in a NIKE web site or in Creation of appropriate homepages, but specifically excluding the cybercast of games), CD-ROM and other interactive and multi-media technologies, in connection with the ‘manufacture, advertising, marketing, promotion and sale of NIKE Products and in the greation and production of NIKE sports-themed games and programming. Such rights shall specifically include, but shall not be limited to, the following: (a) The exclusive right to supply Products for each Team and to use the Designations. (b) The right to manufacture and sell (subject to Paragraph 5 below) NIKE Product bearing or incorporating UNIVERSITY Marks and to conduct promotions with and through NIKE retail accounts. (c) The right to use game photographs (“Game Photos"), videotape and/or film footage ("Game Footage”) of any and all Intercollegiate Athletic Programs subject to applicable NCAA Tules and regulations with respect to the depiction of eligible athletes. In connection therewith, at NIKE's request, UNIVERSITY shall permit NIKE to utilize, consistent with this Paragraph 4, Gamo Photos and Game Footage {owned and/or controlled by UNIVERSITY), without a use fee, other than reasonable search and edit charges. 5. RETAIL LICENSING RIGHTS. {@) UNIVERSITY hereby grants to NIKE, and NIKE hereby accepts, the (1) exclusive worldwide right and license to manufacture and sell at retail Authentic Competition Apparel that features the UNIVERSITY Marks; and (2) non-exclusive domestic Tight and license to manufacture and sell at retall NIKE Products, other than Authentic Competition Apparel, bearing or incorporating UNIVERSITY Marks and/or Game Photos or Game Footage (in compliance with NCAA rules) (products described in (1) and (2) collectively, "Licensed Articles"). All Licensed Articles shall be manufactured, approved and sold, and royalties paid and reported in connection therewith, consistent with the applicable terms and conditions of UNIVERSITY’s then-current standard form of retail liconse agreement (a copy of which is attached hereto as Exhibit B) except as modified by the terms of this Paragraph 8, and other terms of this Agreement, and such terms shall be controlling to the extent inconsistent with the terms of any form license. Throughout the Term, NIKE shall pay to UNIVERSITY (or its designated licensing agent, the Collegiate Licensing Company (‘CLC’), or successor, if so directed) royalties, based on Net Sales of Licensed Articles, at a rate of seven and one-half percent (7.5%). (Notwithstanding the foregoing, UNIVERSITY reserves the right, from time-to-time, to increase the royalty rate to the then-current prevailing rate UNIVERSITY charges other national licensees upon reasonable prior notice to NIKE and provided any such increase shall not impose upon NIKE a royalty rate less favorable than the lowest rate charged any other retail licensee of UNIVERSITY that has been granted the right to sell Licensed Articles nationally.) Within forty-five (45) days after the end of each calendar quarter during the Term, NIKE shall provide UNIVERSITY (or CLC) with a complete and accurate statement (on NIKE's standard royalty reporting form, subject to UNIVERSITY's approval of Such form) of sales, and the calculation of Net Sales, for the preceding reporting Period and, simultaneously with the submission of such quarterly statements, shall NIKEKentucky Agroomant osewo7(b) 5 Pay all royalties due UNIVERSITY on such sales. In addition to the foregoing, on an annual basis, NIKE shall provide the University President with a report (which may be delivered verbally or in writing) on NIKE’s national marketing of the Licensed Articles which report shall, at a minimum, identify the major-city markets in which such product has been sold and the class of accounts in which such product has been placed. Licensed Articles shall not be used for any third party giveaway or other premium purpose without UNIVERSITY’s prior approval. NIKE shall keep and maintain accurate books and records relating to its royalty Payments on Licensed -Articles sales. UNIVERSITY and its duly authorized representative shall have the right, upon thirty (30) days’ prior written notice, at its cost, to examine and audit such ‘books and records and to make extracts and copies thereof during NIKE's business hours and upon no less than ten (10) business days’ prior notice (and not more than once each Contract Year). Should an audit ‘pursuant to this Paragraph establish a deficiency of more than five percent (5%) between the amount due to UNIVERSITY ard the amount actually Paid by NIKE, within forty-five (45) days of NIKE’s receipt of written notice of any such deficiency, NIKE shall pay the amount of the deficiency together with the reasonable cost of such audit. All books and records required to be maintained by NIKE hereunder shall be kept for at least two (2) years after the end of the Contract Year to which they relate, and any royalties paid with respect thereto shall be deemed incontestable after such 2-year retention period, 6. _ NIKE'S PRODUCT SUPPLY OBLIGATIONS. (a) Each Contract Year, unless otherwise specified, NIKE shall supply to UNIVERSITY, free of charge (unless otherwise specified), NIKE Product as set forth on Exhibit C for use by the indicated Team: The exact styles, sizes and delivery dates and, where appropriate, quantities of such NIKE Products shall be mutually determined by NIKE and UNIVERSITY (and subject to subparagraphs (1) and (2) below) for each Contract Year. UNIVERSITY may order and purchase additional quantities of the foregoing merchandise, or components thereof, from NIKE, or such local authorized dealer as NIKE may designate, at NIKE's published wholesale prices for those or comparable Products. All Product to be supplied by NIKE hereunder shall be delivered F.0.B. to UNIVERSITY. Only properly submitted orders from UNIVERSITY's Athletic Director or any authorized representative of UNIVERSITY's Athletic Director shall be filled by the NIKE Sports Marketing Department. No carry-over of unordered annual allotments of merchandise from one Contract Year to another shall be allowed. If an order (or orders) for any entire annual allotment of merchandise for any designated Intercollegiate Athletic Program is (or are) not received by NIKE prior to the conclusion of any Contract Year, then such program shall be deemed to have waived any right to the unordered portion thereof. (1) UNIVERSITY acknowledges that: (Annual product allotments shall be delivered to UNIVERSITY generally one (1) month prior to the start of the regular season for each Intercollegiate Athletic Program and that annual allotments must typically be ordered 9-12 months in advance of each season to ensure timely delivery. (i) From time-to-time, NIKE may elect to obtain certain apparel or accessory Products to be supplied hereunder (such as football game jerseys and NIKEIKentucky Agreement osav97Pants) from third parties, or to provide UNIVERSITY with a mutually agreeable allowance with which to purchase certain of such Products from third parties that have been approved by NIKE, which approval shall Not be unreasonably withheld. In either case, such Products shall, at NIKE's election, (x) bear the NIKE Swoosh Design and/or other NIKE Marks (as designated by NIKE), consistent with NCAA tules and regulations, or (y) not bear any NIKE Marks, (iii) Certain Products and NIKE sports equipment and accessory products requested by UNIVERSITY for its use as required under this Agreement may, at the time of such request, not be commercially available and that NIKE's inability to provide such requested Product on such occasions shall not be deemed a violation or breach of this Agreement. In the event UNIVERSITY requires Product for Team use that NIKE neither manufactures nor elects to source as provided above (e.9., arm pads or knee pads), UNIVERSITY may use and/or wear such Product manufactured by a third party (‘Competitive Product’); provided, however, UNIVERSITY shall not endorse or otherwise advertise or promote its use ‘of such Competitive Product and shall switch to the use of Product manufactured by NIKE at such time as such Product may become available through NIKE, (2) If in any Contract Year UNIVERSITY requires any additional footwear and/or core basic apparel Products (i.¢., T-shirts, shorts, fleece and socks) for use by any Intercollegiate Athletic Program(s) in quantities greater than those provided hereunder, then UNIVERSITY shall purchase any and all such Products directly from NIKE, or such authorized NIKE dealer as designated by NIKE, and in no event shall UNIVERSITY purchase such Products from any third party. NIKE sale of such Products to UNIVERSITY shall be at NIKE Published wholesale prices. In addition, UNIVERSITY shall be permitted to order other NIKE Products for use by any Intercollegiate Athletic Program(s) at NIKE's published wholesale cost, subject to availability. (b) Each Contract Year, the Director of Athletics shall be entitled to order NIKE Product for department and UNIVERSITY use. The aggregate maximum amount (in terms of retail value) of product that may be ordered per Contract Year shall be Thirty Thousand Dollars ($30,000). All NIKE Product must be ordered through the “NIKE by Mail” program and subject to procedures established by NIKE for such purpose. No carry-over of unordered annual allotments of merchandise from one Contract Year to another shall be allowed. (©) NIKE shall not be liable to UNIVERSITY, any Team member, Coach, or Staff for any injury or damage suffered from wearing or using NIKE Products, except such injury or damage resulting from NIKE's adjudicated negligence. UNIVERSITY specifically waives, only as against NIKE, all warranties, expressed or implied, of merchantability or fitness for a particular purpose. 7. PROMOTIONAL APPEARANCES, In connection with the promotion of NIKE Products and/or the NIKE brand: (a) Each Contract Year, upon reasonable prior notice and subject to any coaching commitment, if so requested by NIKE, UNIVERSITY shall make the Coach of each Intercollegiate Athletic Program available for a minimum of one (1) personal INIKErKentucky Agreement osre1e77 appearance on behalf of NIKE except that the Coach of the football team and men’s and women's basketball teams shall each be made available for up to four (4) appearances. No single appearance shall exceed twenty-four (24) hours in duration, including travel time, unless otherwise agreed upon in advance. Such appearances may include, but are not limited to, photo shoots for posters, brochures or in-store displays, production sessions related to filming commercials and/or video productions and/or advertising, retail store appearances, trade shows, speaking engagements, appearances at sports clinics, celebrity events and other public appearances, UNIVERSITY shall receive no additional compensation for such appearances, it being understood that the consideration for such appearances is encompassed by the Base Compensation paid to UNIVERSITY pursuant to Paragraph 11 below. () Upon reasonable prior notice and subject to any other playing commitments and compliance with any applicable NCAA and/or Conference rules or regulations, UNIVERSITY shall make its women’s basketball and/or soccer team available to Participate in a NIKE-sponsored tournament not more frequently than once in any 3-year period. In addition, UNIVERSITY shall make its best effort, consistent with its current contractual obligations, to have its men’s basketball team participate in a NIKE-sponsored tournament, not more frequently than once in any 3-year period. NIKE shail pay all reasonable and necessary travel and related expenses of the relevant team and coaching staff in connection with any appearance hereunder, and a mutually agreed guarantee with respect to the men’s basketball team. 8. _ NIKE SPONSOR BENEFITS, (a) As the exclusive footwear, apparel and accessories product supplier of UNIVERSITY, each Contract Year, UNIVERSITY shall provide NIKE with the following promotional benefits at no additional cost to NIKE except as otherwise indicated: (1) NIKE shall receive tickets to home games (and neutral site games as indicated below) for each Intercollegiate Athletic Program in accordance with the following: PROGRAM No_TIGKETS) Football need basis (up to 6) ‘Bowl games 12 Basketball (M) need basis Post-Season Basketball Tournaments (M) (that Team Paricipats In) 1° & 2" Round 4 Regionals 4 Final Four 8 Basketball (W) 2 Post-Season Basketball Tournaments (W) 12 (each round) (that Team Parcipates i) ‘All Other Programs 4 In addition to the foregoing, each Contract Year, NIKE shall receive: an agreed amount of tickets for one mutually agreed upon game in men's basketball game, football and women's basketball (collectively, “NIKE Game- NIKE/Kentucky Agreement osieve7(2) (4) 6) (6) ”) (8) 9) day’). All tickets provided under the foregoing provisions shall be for best available adjacent seats. UNIVERSITY shall use best efforts to fulfill NIKE’s requests for such additional quantities of tickets as it may reasonably request, such tickets to be best available. (i) “VIP* parking at all football and basketball games; and (ii) an exclusive area located at the football stadium, and one at the basketball arena, for NIKE hospitality events in conjunction with each home game, A hospitality event for football and basketball NIKE Game-day ticket holders (which may include, for example, a welcome reception and/or tour of facllities), at NIKE’s expense. At each home game of each Intercollegiate Athletic Program at which a Public address system and/or electronic message board (or other electronic messaging systems) is used, as applicable, suitable in-game P.A. announcements and/or board messages recognizing NIKE as the exclusive Products supplier and sponsor of the UNIVERSITY’s Intercollegiate Athletic Program, such message of recognition to be subject to UNIVERSITY’s prior approval, Full-page, 4-color NIKE advertisements (camera-ready ad to be produced and provided by NIKE at its cost) in every game program published. The opportunity to stage promotional events and/or contests around designated home games/competitions, which events or contests may occur pre-game, during half-time or post-game, such events and/or contests to be subject to UNIVERSITY'S prior approval. Reasonable access to Intercollegiate Athletic Program activities, where appropriate, for the purpose of shooting Game Photos or Game Footage and/or conducting and taping post-game interviews. NIKE Product placement in campus stores (2.9., UNIVERSITY bookstores) system-wide, and/or to establish NIKE Shops and/or NIKE concept shops therein, and the right to display and sell NIKE Products at UNIVERSITY's football stadium and basketball arena concessions stands and/or stores during all games (regardless of the sport) held therein. Notwithstanding the foregoing, NIKE acknowledges that the bookstores are leased and that any product placement therein is subject to the discretion of the bookstores’ contractor. NIKE shall be permitted, upon its reasonable request, to use mutually agreed upon UNIVERSITY facilities in connection with community based programs and events held by NIKE (such as its P.LA.Y. program). (b) In adcition to the foregoing, UNIVERSITY shall provide NIKE with the following program-specific promotional benefits, if available, at no additional cost to NIKE: (1) NIKEsKentucky Agreement If UNIVERSITY signage policy is changed to so permit, prominent, camera- visible, courtside signage in UNIVERSITY’s men’s and women's basketball arena (including at least one permanent sign at the scorer’s table or press row), with the placement and size of such signage to be mutually agreed upon. NIKE acknowledges, however, that UNIVERSITY neither has any present plan to change its current signage policy nor does it anticipate any Policy change during the Term. os21079. 10. ° (2) NIKE logo identification on team-bench (both home and visiting team’s) seat backs, and also on pole pads if available. USE OF NIKE PRODUCTS. (a) () @) ) Throughout the Term, UNIVERSITY shall make NIKE Products available on an exclusive basis to each Intercollegiate Athletic Program, to be worn and/or used by Team members, Coaches and Staff during practices, games, exhibitions, clinics, sports camps and other official or UNIVERSITY sanctioned Intercollegiate Athletic Program activities (including but not limited to photo sessions and interviews) during which Team members, Coaches and Staff wear and/or use Products except as otherwise provided under this Paragraph and Paragraph 6(a) above. (Notwithstanding the foregoing, nothing herein shall be construed as requiring Coaches or Staff to use only NIKE Video Product; Coach and Staff shall have the tight to use such training video product as each deems appropriate.) UNIVERSITY shall require all Coaches and Team and Staff members to wear and/or use exclusively NIKE Products during such activities. Notwithstanding the foregoing, in the event any Team member is unable to wear NIKE footwear due to a bona-fide medical condition as evidenced by a certification by the Team's physician, then such Team member shall be permitted to wear non-NIKE footwear provided all visible manufacturer's identification is taped over or otherwise covered so as to completely obscure such manufacturer's identification. NIKE acknowledges that any Coach's wearing of non-athletic footwear and apparel in connection with his or her official coaching duties, as appropriate, shall not constitute a breach of this Paragraph. UNIVERSITY shall ensure that no Team member, Coach or Staff member shall: (1) Alter or permit the alteration of any NIKE Product worn or used by them to resemble a non-NIKE Product; or (2) Wear any non-NIKE Products wi Products. UNIVERSITY shall ensure that during all Intercollegiate Athletic Program activities no Team member, Coach or Staff member shall wear and/or use any athletic footwear, or other Products, manufactured by companies other than NIKE except as permitted under Paragraphs 6(a)(1) and 9(a) above. UNIVERSITY acknowledges that "spatting" or otherwise taping, so as to cover any Portion of the NIKE logo, the NIKE athletic shoes worn by members of the Teams during practices, games, exhibitions, clinics, sports camps and other occasions during which Team members wear athletic shoes, is inconsistent with the purpose of this Agreement and the benefits to be derived from it by NIKE and is a material breach of this Agreement. UNIVERSITY shall not permit the trade name, trademark, name, logo or any other identification of any person, company or business entity other than NIKE, or UNIVERSITY if approved by NIKE, to appear on NIKE Products worn or used by Coaches, Staff or Team members. have been altered to resemble NIKE DESIGN & MARKETING CONSULTATION. (@) UNIVERSITY acknowledges NIKE's industry leadership in the design of performance product and its expertise and innovation in the area of sports marketing and that such leadership, expertise and innovation is a material NIKEsKentucky Agroement osreu971. NIKE/Kentucky Agreement (b) (©) 10 inducement to UNIVERSITY’s entrance into this Agreement. NIKE shall continue its efforts to produce high quality Products through consultation with coaches and staff of successful athletic programs such as UNIVERSITY and whose full Cooperation is important to NIKE, as such individuals have knowledge that can be useful in the research, development and production of NIKE Products, and is of the essence of this Agreement. Upon request by NIKE, UNIVERSITY shall require designated Coaches and Staff to provide NIKE with written or oral feedback concerning the NIKE Products supplied to each through NIKE's product development and testing program. Such reports shall address the fit, wear characteristics, materials and construction techniques of such Products. UNIVERSITY acknowledges that a material inducement to NIKE’s entrance into this Agreement is to provide broad and prominent exposure for the NIKE brand and particular Product models and styles. Accordingly, UNIVERSITY shall require the use, in practices and games, by such Teams as NIKE may request, such specific models and/or styles of NIKE Products as NIKE may designate from time- to-time, consistent with NIKE’s marketing strategies, and subject to the reasonable satisfaction of the Coach of each affected Team as to the performance capabilities, suitability and appropriateness of the designated model and/or style. UNIVERSITY further acknowledges that the foregoing undertaking is a material term, and of the essence, of this Agreement. NIKE shall actively advertise and promote its relationship with UNIVERSITY in a prominent and first-class manner consistent with how NIKE promotes its relationships with other premiere intercollegiate athletic programs. To this end, the parties shall endeavor in good faith throughout the Term to develop plans and methods to market and/or promote the activities and accomplishments of the Teams, the UNIVERSITY's endorsement of NIKE Products, and the sale of Licensed Products. The parties shall cooperate with each other to facilitate the advancement of new ideas and approaches in the development of such marketing and promotional plans, and to take advantage of joint marketing and promotional opportunities. If NCAA and Conference rules and/or regulations change during the term of this Agreement and become less restrictive, UNIVERSITY shall consider, in good faith, such additional exposure opportunities as may be presented to it by NIKE as are consistent with such new rules and/or regulations. UNIVERSITY and NIKE shall meet at least quarterly each Contract Year in connection with fulfilling their obligations pursuant to this Paragraph. CASH COMPENSATION. (a) Each Contract Year NIKE shall pay UNIVERSITY Base Compensation in the amount set opposite the below- indicated Contract Year, to be paid in two (2) equal semi-annual installments to be made on September 1 and March 1 of each Contract Year (and subject to subparagraph (b) below): ‘ist Contract Year (1997-98) $1,325,000 2nd Contract Year (1998-99) ‘$1,325,000 ‘3rd Contract Year (1999-00) $1,325,000. ‘4th Contract Year (2000-01) ‘$1,325,000 ‘th Contract Year (2001-02) $1,325,000 6th Contract Year (2002-03) (if option is exercised) $1,375,000 7th Contract Year (2003-04) (if option is exercised) $1,375,000, os210712, (b) (©) @ " ‘ih Contract Vear (2004-05) (if option is exercised) $1,375,000 ‘Sth Contract Vear (2005-06) (it option is exercised) ‘$1,375,000 0th Contract Year (2006.07) (it option is exorcised) ‘$1,375,000 UNIVERSITY acknowledges that of the annual Base Compensation paid by NIKE, One Million Two Hundred Thousand Dollars ($1,200,000) shall be allocable annually for expenditure on the Flagship Programs. Within thirty (30) days of full execution of this Agreement, NIKE shall pay UNIVERSITY the sum of Six Hundred Fifty Thousand Dollars ($650,000) as an advance payment to be credited against Base Compensation Payments (and other payments under this Agreement) to become due during the 1st Contract Year or thereafter. In addition to the foregoing, NIKE shall pay UNIVERSITY a one-time commitment payment of Two Hundred Fifty Thousand Dollars ($250,000) within thirty (30) days of full execution of this Agreement. UNIVERSITY acknowledges that the principal inducements for NIKE's entrance into this Agreement are (i) the wide-spread national television and other media exposure that the men’s basketball program annually receive, and (ii) the accompanying prominent brand exposure NIKE receives through the placement of the NIKE logo, as it currently appears (in terms of size, location placement, color prominence and/or numerousity), on Authentic Competition Apparel and that such continued exposure is of the essence of this Agreement. Accordingly, if in any Contract Year the men's basketball program is banned from_ television appearances or if, for any reason, NIKE’s logo placement rights on footwear or uniforms worn by either the basketball program or football program are materially diminished (in terms of size, location placement, color prominence and/or numerousity), in lieu of NIKE's exercise of its termination right under Paragraph 18 below, then for such Contract Year NIKE shall have the right to reduce UNIVERSITY’s scheduled Base Compensation in accordance with the following: PROGRAM % REDUCTION Basketball (M) 70% Football 30% lf NIKE logo placement rights are diminished in @ manner other than as enumerated above, NIKE shall have the right to in good faith equitably reduce scheduled Base Compensation to be paid UNIVERSITY going forward taking into account the nature and extent of the diminution of rights. ADDITIONAL CONSIDERATION & NIKE SUPPORT. In addition to the product support and cash compensation set forth above, each Contract Year (unless otherwise indicated), NIKE shall provide UNIVERSITY with the following support: @) Cash and/or merchandise (in-line) ‘support for mutually agreed marketing/academic, campus/student services (e.g., scholarships, academic tutoring, career counseling, intramurals, etc.) and community programs (e.g., the Cawood Ledford Scholarship Fund and AlS/AmeriCorp program). Such cash and/or merchandise support shall have an annual aggregate value of not less INIKE/Kentucky Agreement osia107