Texas A&M contract with Adidas

TEXAS A&M ALL-SPORT AGREEMENT

THIS IS AN AGREEMENT made and entered into by and between Texas A&M TAMU (hereinafter "TAMU"), a member of the Texas A&M University System, an agency of the State of Texas, on behalf of its Athletics Department, having its principal administrative office at College Station, Texas 77843-1228, and adidas Promotional Retail Operations, Inc. (hereinafter "adidas"), an Oregon corporation having its principal offices at 5055 N. Greeley, Portland, Oregon 97217.

WHEREAS, TAMU fields and maintains nationally recognized athletic teams in numerous sports (and retains the coaches and staff in connection therewith) and owns all right, title and interest in and to the names, nicknames, mascots, trademarks, service marks, logographics and/or symbols, and any other recognized reference to TAMU or its "Intercollegiate Athletic Program" (as defined below); and

WHEREAS, adidas 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 TAMU and its intercollegiate athletic programs as described below;

NOW, THEREFORE, in consideration of the mutual promises, terms and conditions set forth herein, it is agreed as follows:

1. DEFINITIONS.

As used in this Agreement, the terms set forth below shall be defined as follows:

(a) "'adidas Group" shall mean adidas and its licensees, Affiliates, distributors, subsidiaries and any successor company.

(b) "adidas Products" shall mean all Products in connection with which, or upon which, the adidas Trademarks (defined below) appear

(c) "adidas Trademarks" shall mean any name, logo, symbol, trademark or service mark, or brand licensed, owned or controlled (at any time) by adidas, including but not limited to the adidas name, Trefoil, 3-Stripes mark, Sport Heritage logo, Sport Performance logo, Sport Style Logo, and Sport Point.

(d) "Affiliate" means any corporation, partnership, company or any other entity or person which controls, is controlled by, or is under common control with a party to this Agreement.

(e) "Coach" shall mean an individual employed during the term of this Agreement to act as a head coach of an Intercollegiate Athletic Program.

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(f) "Coach Endorsement" shall mean the 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 endorsement 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 TAMU nor any Coach shall be prevented from using, permitting or licensing others to use a Coach's name or endorsement in connection with the advertisement, promotion or sale of any product or service other than "Products" (as defined below).

(g) "Conference" shall mean the intercollegiate athletic conference of which TAMU is a member (currently the Big XII).

(h) "Contract Year" shall mean each consecutive twelve (12) month period from July 1 through June 30 during the Term of this Agreement.

(i) "Flagship Program(s)" shall mean any of the following Intercollegiate Athletic Programs: Football; Men's Basketball; and Women's Basketball.

(j) "Game" shall mean game, match, meet, test or such other competition reference as is appropriate to each individual sport.

(k) "Intercollegiate Athletic Program(s)" shall mean the following existing organized team and individual sports sponsored by TAMU and such other replacement or additional intercollegiate athletic programs as may be established from time-to-time during the term of this Agreement: ; baseball; basketball (MIW); cross country (MIW); diving (MIW); equestrian; football; golf (MIW); soccer; softball; swimming (MIW); tennis (MIW); and volleyball

(I) "NCAA" shall mean the National Collegiate Athletic Association.

(m) "Net Sales" shall mean the total gross invoice prices (in U.S. dollars) less any reasonable and normal quantity discounts allowed and taken, actual returns, freight (if invoiced separately) and applicable sales taxes. Net Sales shall be net sales as are computed by adidas' accounting system gUidance for which is established by generally accepted accounting principles, and consistent with its standard method of calculation of net sales employed in adidas multi-sport contracts with other major universities.

(n) "Products" shall mean:

(1) all athletic and athletically inspired or derived footwear 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, wind suits, 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 while 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 use while participating in their respective Intercollegiate Athletic Program; and

(4) sports equipment including, but not limited to, inflatable balls (e.g., footballs, basketballs, soccer balls, volleyballs, etc.), balls, protective eyewear, eyewear with performance attributes and sunglasses, and such other equipment as adidas may add to its Product lines at any time during the Term of this Agreement and subject to the provisions of Paragraph 13 below.

(0) "Staff' shall mean, collectively, all assistant coaches and strength coaches, equipment managers, trainers and anyon-field courtside staff (e.g., ball persons, basketball stat crews, etc.) employed by TAMU during the term of this Agreement to provide services to Intercollegiate Athletic Programs.

(p) 'TAMU Marks" shall mean the marks set forth on Exhibit A hereto, and any other recognized reference to TAMU or its Intercollegiate Athletic Programs.

(q) "Team" shall mean that group of athletes attending the College Station campus of TAMU during the term of this Agreement and comprising the roster of each Intercollegiate Athletic Program.

(r) "Wholesale PricingNalue" shall mean the printed catalogue pricing that adidas charges retailers for goods received.


2. TERM.

This Agreement shall remain in full force and effect for a period of seven (7) Contract Years, from July 1, 2007 through June 30, 2014, unless sooner terminated in accordance with the terms and conditions hereof (the "Term"). This Agreement shall be interpreted in its entirety and not as a series of one-year agreements.

3. GRANT OF ENDORSEMENT RIGHTS.

TAMU hereby grants to adidas, and adidas hereby accepts:

(i) The designation as "the exclusive supplier of the athletic footwear, apparel and accessory products of (each Program)" and "the exclusive athletic footwear, apparel and accessories sponsor of (each Program)", and/or such similar designations as the parties may agree upon (collectively, the "Designation").

(ii) The right to utilize (subject to the approval proVIsions of Paragraph 11 below) the TAMU Endorsement, Coach Endorsements and/or Designations worldwide, in any media (now known or hereafter created) including, but not limited to the worldwide web, CD-ROM and other interactive and multimedia technologies, in connection with the manufacture, advertising, marketing, promotion and sale of adidas Products and in the creation and production of adidas 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 Intercollegiate Athletic Program and to use the Designations.

(b) The right to manufacture and sell (subject to Paragraph 4.a) adidas Product bearing or incorporating TAMU Marks as governed by the existing licensing agreement with Texas A&M University and to conduct promotions with and through adidas 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 rules and regulations with respect to the depiction of eligible athletes. In connection therewith, at adidas' request, TAMU shall permit adidas to utilize, consistent with this Paragraph 3, Game Photos and Game Footage (owned and/or controlled by TAMU), without a use fee, other than reasonable search and edit charges.


4. RETAIL LICENSING RIGHTS.

(a) TAMU hereby grants to adidas and adidas hereby accepts the exclusive worldwide right and license to manufacture and sell at retail Authentic Competition Apparel. adidas currently has licensing rights governed by the contract between adidas and TAMU through its licensing agent. TAMU agrees that in connection with its Intercollegiate Athletic Programs identified in Section 1(k): (i)neither TAMU nor its licensing agent(s) shall enter into any agreement or understanding with other licensees to manufacture, develop, promote, distribute, license or sell licensed Authentic Competition Apparel, identified in Section 1(n)(2), that feature TAMU Marks; and (ii) if TAMU or its licensing agent(s) is, as of the effective date of this Agreement, party to any agreement with other licensees to manufacture, develop, promote distribute, license or sell licenses Authentic Competition Apparel that feature TAMU Marks, then neither TAMU nor TAMU's licensing agent(s) will renew or extend such agreement(s).

5. CONSIDERATION.

(a) In consideration for the rights granted under this Agreement, each Contract Year: adidas shall provide TAMU free of charge, adidas Products with a wholesale value of not less than specified in the following table (the annual "Supplied Product Limit"),

1st Contract Year (2007-08) $1,200,000 2nd Contract Year (2008-09) $1,025,000 3rd Contract Year (2009-10) $1,050,000 4th Contract Year (2010-11) $1,075,000 5th Contract Year (2011-12) $1,100,000 6th Contract Year (2012-13) $1,125,000 7th Contract Year (2013-14) $1,150,000

If in any Contract Year TAMU requires additional adidas Product in quantities in excess of that provided under the annual Supplied Product limit, then TAMU shall purchase any and all such Products directly from adidas and in no event shall TAMU purchase such Products from any thirdparty. TAMU shall be entitled to purchase such product at adidas' published wholesale prices (current adidas wholesale pricelist).

Coaches, Staff members and select members of the Athletic Department (to be designated by TAMU), shall be entitled to order $50,000 of adidas Product for professional use (at wholesale value).

adidas shall not be liable to TAMU, any Team member, Coach, or Staff for any injury or damage suffered from wearing or using adidas Products,


except such injury or damage resulting from adidas' adjudicated negligence. To the extent permitted by the Texas Constitution and under the laws of the State of Texas, TAMU specifically waives, only as against adidas, all express warranties, and implied warranties of merchantability and fitness for a particular purpose.

(h) In further consideration for the rights granted under this Agreement, each Contract Year, adidas shall pay TAMU Base Compensation in the amount set opposite the below-indicated Contract Year, to be paid in two (2) equal installments to be made on September 1 and February 1 of the Contract Year.

1st Contract Year $805,000 2nd Contract Year $885,000 3rd Contract Year $972,000 4th Contract Year $1,064,800 5th Contract Year $1,171,280 6th Contract Year $1,288,408 7th Contract Year $1,417,249 8th Contract Year, if applicable $1,459,767 (3% cost of living) 9th Contract Year, if applicable $1,503,560 (3% cost of living)

(i) In further consideration for the rights granted under this Agreement, each Contract Year, adidas shall pay the following performance bonuses.

Football National Champions $500,000 Big 12 South Division Winner Football

$100,000

BCS Bowl $50,000 Football Coach of the Year-National

$50,000

Football Coach of the Year-Conference

$25,000

Men's Basketball National Champions

$250,000

Men's Basketball Conference Champions

$50,000

Women's Basketball National Champions

$250,000

Women's Basketball Conference Champions

$50,000

Baseball Conference Champions $500


Baseball Conference Tournament Champions

$1,000

Baseball Super Regional Champion

$1,500

Baseball National Champions $102,000 Volleyball National Champions $50,000 Volleyball Conference Champions $25,000 Softball National Champions $50,000 Softball Conference Champions $25,000 Soccer National Champions $50,000 Soccer Conference Champions $25,000

6. PRODUCT ORDERING & DELIVERY, LOGO USE ON PRODUCT.

(a) The exact styles, sizes and delivery dates (and where appropriate, quantities) of such adidas Products shall be mutually determined byadidas and TAMU (and subject to availability) for each Contract Year, during the first three contract years the product delivered shall include for baseball: 750 hats, 72 polos, 8 sunglasses, 8 watches. To ensure timely delivery to TAMU of its annual product order for each sport by the relevant need date, TAMU acknowledges that it must place its complete annual product orders on a timely basis in accordance with adidas' standard ordering deadlines (which TAMU acknowledges are typically 9-12 months in advance of the desired delivery date). All Product to be supplied by adidas under this Agreement shall be delivered F.O.B. to TAMU via regular ground freight (the cost of shipping by any other means shall be borne by TAMU). Only properly submitted orders from TAMU's Athletic Director or any authorized representative of TAMU's Athletic Director shall be filled by adidas. 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 adidas prior to the conclusion of any Contract Year, then such program shall be deemed to have waived any right to the unordered Portion thereof. TAMU acknowledges that certain sports equipment and accessory products requested by TAMU for its use as required under this Agreement may, at the time of such request, not be commercially available (or available in very limited quantities) and that adidas' inability to provide such requested Product on such occasions shall not be deemed a violation or breach of this Agreement. In the event TAMU requires Product for Team use that adidas does not then-manufacture or elects not to provide because of availability, TAMU may use such Product manufactured by a third-party ("Competitive Product"); provided, however, (i) TAMU shall not endorse or otherwise advertise or Promote its use of such Competitive Product and shall switch to the use of Product manufactured by adidas at such time as such Product may become available through adidas, and (ii) the maker of such product is a brand that


is, as of the date hereof, principally known in the sporting goods industry as a manufacturer of such product.

(b) adidas shall not be liable to TAMU, any Team member, Coach, or Staff for any injury or damage suffered from wearing or using adidas Products, except such injury or damage resulting from adidas' adjudicated negligence. To the extent authorized by the Constitution and laws of the State of Texas, TAMU specifically waives, only as against adidas, all express warranties, and implied warranties of merchantability or fitness for a particular purpose.

(c) TAMU acknowledges that the placement of the adidas logo, as it is currently permitted by the NCAA and now placed adidas (in terms of size, location placement, color contrasts, prominence and/or number of placements), on Authentic Competition Apparel is a bargained for material benefit contemplated by adidas under this Agreement and that such continued degree of manufacturer logo prominence on competition product is of the essence of this Agreement. Accordingly, during the Term, TAMU shall take no action that shall have the effect of relocating (except for a more favorable placement should a subsequent relaxation in rules so permit), reducing, or restricting adidas' logo placement rights on product as such logo now appears and is permitted by current relevant NCAA rules or regulations including, but not limited to, NCAA Rule 12.5.4. Notwithstanding anything contained in this subparagraph, TAMU further acknowledges that nothing herein shall be construed as a restriction of any right of adidas to avail itself of such more favorable presentation or placement of its logo (e.g., size, color contrast, number of placements, location of placement, etc.) as may be currently permitted under NCAA, Conference and/or other applicable rules, or hereafter permitted by any subsequent relaxation in NCAA, Conference and/or other applicable rules.

7. USE OF ADIDAS PRODUCTS.

(a) Throughout the Term, TAMU shall make adidas 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 TAMU sanctioned 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 the medical exception of this Paragraph 7(a) below. TAMU shall require all such Team members, Coaches and Staff to wear and/or use exclusively adidas footwear or Products (as provided above) during such activities. Notwithstanding the foregoing, in the event any Team member is unable to wear adidas 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-adidas footwear provided all visible manufacturer's identification is taped over or otherwise covered so as to completely obscure such manufacturer's identification. adidas 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.

(b) TAMU shall ensure that no Team member, Coach or Staff member shall:

(1) Alter or permit the alteration of any adidas Product worn or used by them to resemble a non-adidas Product; or

(2) Wear any non-adidas Products which have been altered to resemble adidas Products.

(c) TAMU shall ensure that during all Intercollegiate Athletic Program activities no Team member, Coach or Staff member shall wear any/or use any athletic footwear, or other Products, manufactured by companies other than adidas except as permitted under Paragraph 7(a) above,

(d) TAMU acknowledges that "spatting" or otherwise taping, so as to cover any portion of the adidas logo, the adidas 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 adidas and is a material breach of this Agreement.

(e) TAMU shall not permit the trade name, trademark, name, logo or any other identification of any person, company or business entity other than adidas, or TAMU if approved by adidas (e.g., local embellishment of in-line product or fundamentals), to appear on adidas Products (specifically including product supplied for camp use) worn or used by Team members, Coaches, or Staff except for the name or logo of the Conference, an NCAA postseason logo, or a bowl sponsor (that is not an adidas competitor).

8. ADIDAS SPONSOR BENEFITS.

As the exclusive footwear, apparel and accessories product supplier of TAMU, each Contract Year TAMU shall provide adidas with the following promotional benefits at no additional cost to adidas except as otherwise indicated:

(a) TAMU Advertisements for adidas. Representatives of 1 AMU and adidas will cooperate to produce agreed copy to be published, displayed, or announced as described below at TAMU expense each Contract Year:


1) TAMU shall provide adidas with one full page of advertising space in the TAMU football program for the company's camera-ready advertisement, as well as an appropriately sized space in other event programs as available.

2) TAMU shall provide adidas with one (1) public address system announcement in the first and second half of each home game in the sports of football, men's basketball, and women's basketball recognizing adidas as the exclusive provider of Supplied Company Products for the TAMU team.

3) TAMU shall provide adidas with one (1) public address system announcement at each home baseball game recognizing adidas as the exclusive provider of Supplied Company Products for the TAMU team.

4) TAMU shall provide adidas with one (1) 30 second advertisement during any radio broadcast of regular season games in the sports of football, men's basketball, women's basketball, and baseball as the exclusive provider of Supplied Company Products for the TAMU team.

5) TAMU shall provide recognition of adidas in brochures for TAMU sponsored sport camps as the exclusive provider of Supplied Company Products for the TAMU team.

(b) adidas shall receive the right to purchase tickets to home games, neutral site games, and parking passes as indicated below:

Program No. Tickets

Football (home) 8 prime locations and 2 parking passes

Men's Basketball (home) 6 prime locations Women's Basketball 6 prime locations Baseball 6 prime locations Volleyball 4 prime locations All Remaining Sports 8 tickets to each

home qame or event Football (bowl) 8 Men's Basketball (tournament)

6 each round of play

Women's Basketball 6 each round of play


(tournament) Baseball (tournament) 6 each round of play Volleyball (tournament) 4 each round of play

(c) A hospitality event for football and basketball adidas Game-day ticket holders (which may include, for example, a welcome reception, any catering to be at adidas' expense, and/or tour of facilities).

(d) TAMU shall cooperate in facilitating adidas in gaining the right to display and sell adidas Products at on-campus bookstores and gift shops operated through Barnes & l\Jobles, and the souvenir trailers that operate during games hosted by TAMU (regardless of the sport). adidas acknowledges that Texas A&M University does not have final say in the products that are selected for retail by the on-campus bookstore operated through Barnes & Noble. The right to display and sell adidas Products can only be granted by Barnes & Noble.

(e) 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.

(f) 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.

(g) adidas shall be permitted, upon its reasonable request, to use mutually agreed upon TAMU athletic facilities in connection with mutually agreed community based programs and events held by adidas.

(h) In addition to the above, TAMU shall afford adidas advance notice and the opportunity to consider participation in any and all additional appropriate advertising opportunities, in any media, made available by TAMU athletics during the Term.

9. PROMOTIONAL APPEARANCES.

In connection with the promotion of adidas products:

Provided it is consistent with the Constitution and Bylaws of the NCAA, at adidas' request upon reasonable prior notice, the Coach of each Intercollegiate Athletic Program will be available to adidas at times that do not conflict or interfere with duties or responsibilities as head coach for the following purposes related to the promotion and sale of supplied adidas Products:

(a) Appearances for personal endorsement in a reasonable number of 30


second (:30) and 60-second (:60) radio and television commercials and audio and videotapes;

(b) Appearances for a reasonable number of still photography sessions for use for personal endorsements in print media advertising of all types, point of sale advertising, and other printed promotional material;

(c) Appearances for personal endorsements at adidas sponsored clinics and camps for the head coach's sport; at trade shows and conventions, at retail outlets, and at celebrity events in the head coach's sport; and

(d) Serving as an advisor to adidas with regard to the design and development of products.

All requests for the above appearances or participation of a head coach must be in writing and have the prior written approval of the TAMU Athletics Director. Total time for such appearances or participation in any academic year shall not exceed six (6) work days, per coach, exclusive of travel. TAMU shall receive no additional compensation for such appearances.

adidas shall pay all reasonable and necessary travel and related expenses of the relevant team and coaching staff in connection with any appearance hereunder.

10. CAMP COMMITMENT, DESIGN & MARKETING CONSULTATION.

(a) During the term of this Agreement, adidas agrees to use commercially reasonable efforts to, on a regular basis and at its expense, conduct a football camp to be hosted on the TAMU campus. In addition, adidas will provide an annual summer camp allotment of $50,000 wholesale allotment for TAMU summer camp programs.

(b) TAMU acknowledges adidas 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 inducement to TAMU's entrance into this Agreement. adidas shall continue its efforts to produce high quality Products through consultation with coaches and staff of successful athletic programs such as TAMU and whose full cooperation is important to adidas as such individuals have knowledge that can be useful in the research, development and production of adidas Products, and is of the essence of this Agreement. Upon request by adidas, TAMU shall request designated Coaches and Staff to provide adidas with written or oral reports concerning the adidas Products supplied to each through adidas' product development and testing program. Such reports shall address the fit, wear characteristics, materials and construction techniques of such Products.


(c) TAMU acknowledges that a material inducement to adidas' entrance into this Agreement is to provide broad and prominent exposure for the adidas brand and particular Product models and styles. Accordingly, TAMU shall require the use, in practices and games, by such Teams as adidas may request, such specific models and/or styles of adidas Products as adidas may designate from time-to-time and TAMU further acknowledges that this undertaking is a material term, and of the essence, of this Agreement.

11. ADVERTISING & LICENSED PRODUCT APPROVALS.

(a) adidas shall submit commercial material developed pursuant to Paragraph 3. to TAMU's Vice President for Marketing and Communications for approval prior to use for any commercial or external purpose. Within ten (10) business days after receipt of such commercial material, TAMU will approve or disapprove the submitted commercial material in writing. If a submission is disapproved, TAMU's written notice thereof shall set forth in reasonable detail the basis for such disapproval. Any submitted item that has not been disapproved within ten (10) business days of receipt by TAMU shall be deemed approved. Once a submitted sample or concept is approved, adidas shall not depart therefrom in any material respect without re-submission of the item and obtaining TAMU's further approval.

(b) In the event TAMU desires to use the adidas Marks in any advertising or promotion, TAMU shall first submit a sample or the concept of the proposed advertisement or promotion to adidas for approval, which approval shall not be unreasonably withheld.

12. DEVELOPMENT OF NEW LOGO & TRADEMARK OWNERSHIP.

(a) If TAMU desires to develop an additional trademark, service mark, symbol and/or logographic for use in connection with any Intercollegiate Athletic Program (collectively, "New Logo"), TAMU shall in writing notify adidas of such intention and agrees to meet with adidas upon adidas's request, to discuss in good faith the use of adidas' services to design such New Logo. Such discussions must occur prior to TAMU's engaging in negotiations with any third-party to provide such design services. Should TAMU elect to have adidas undertake such design assignment, adidas shall provide such design services at no expense to TAMU except as provided below. In the event adidas designs such New Logo and it is approved by TAMU, then TAMU shall be the sole owner of all right, title and interest in and to the New Logo and have the right to use it in connection with TAMU for all purposes except that, for 1-year period commencing with the Contract Year in which such New Logo is introduced at retail, adidas shall have the exclusive right to sell Products bearing the New Logo. Thereafter, TAMU shall be free to license to third parties the use of the New Logo in connection with product other than footwear and Authentic Competition


Apparel. TAMU acknowledges that all trademark/copyright registration and maintenance expenses in connection with the New Logo shall be at its expense and adidas agrees that it shall not incur any such expense on behalf of TAMU without TAMU's prior approval.

(b) adidas recognizes the value of the TAMU Marks and acknowledges that the goodwill attached thereto belongs to TAMU and that nothing in this Agreement serves to assign, conveyor transfer to adidas any rights, title or interest in or to the TAMU Marks.

(c) TAMU recognizes the value of the adidas Marks and acknowledges that the goodwill attached thereto belongs to adidas and that nothing in this Agreement serves to assign, conveyor transfer to TAMU any rights, title or interest in or to the adidas Marks.

(d) Neither party shall apply to register or maintain any application or registration of any mark owned by the other party.

13. RIGHTS FOR NEW PRODUCTS.

From time-to-time during the term of this Agreement, adidas may add to its Products line one or more items of sports equipment. If at any time during the Term adidas shall have a bona tide intention to expand its Products line by adding any such item(s), then adidas shall give TAMU six (6) months' advance written notice of the particular item(s) then in development by adidas. Once such item is commercially available, then such item(s) shall thereafter be deemed to be included in "Products" as defined in paragraph 1(m) above and "adidas Products" as defined in Paragraph 1(n) above and covered in all pertinent respects by the terms hereof and TAMU shall no longer be permitted to source such Products from a manufacturer other than adidas. Thereafter, TAMU shall make such new Product item(s) available to Team members, Coaches and/or Staff members, adidas shall supply TAMU, free of charge, with sufficient quantities for such purpose to be mutually agreed upon by the parties, including quantities equal to or greater than the quantities of any comparable item(s) which TAMU, Team members, Coaches and/or Staff members are then receiving from third-party, and TAMU shall thereupon distribute; as is appropriate, such new item(s) to Team members, Coaches and/or Staff members for use pursuant to the terms of this Agreement.

14. (INTENTIONALLY OMITTED)

15. RIGHT OF TERMINATION BY TAMU.

TAMU shall have the right to tenrinate this Agreement immediately upon written notice to adidas if:


(a) adidas is adjudicated insolvent or declares bankruptcy;

(b) adidas fails to make payment to TAMU of any sum due pursuant to this Agreement within thirty (30) calendar days following adidas' receipt of written notice from TAMU that such payment is past due; or

(c) adidas shall be in material breach of this Agreement, which breach adidas fails to cure within thirty (30) calendar days of adidas' receipt of written notice from TAMU specifying such breach.

16. RIGHT OF TERMINATION BY ADIDAS.

(a) adidas shall have the right to terminate this Agreement immediately upon written notice to TAMU if:

(1) Any Flagship Program is placed on NCAA probation or TAMU ceases for any reason to field a Division I team in any of the Flagship Programs;

(2) Members of any Team fail to wear or use adidas Products during practices, games, exhibitions clinics, sports camps or other occasions during which Team members wear or use Products (including but not limited to photo sessions and interviews), or wear adidas Products altered, spatted or taped, in violation of the provisions of Paragraph 7 above; provided, however, that adidas shall have first provided written notice to TAMU of any such violation and such violation shall then recur during the same Contract Year and TAMU fails to cure, if curable, within thirty (30) calendar days of adidas' delivery of written notice to TAMU of any such breach;

(3) Any Coach, Staff or Team member fails to perform any material obligations provided for in this Agreement provided, however, that adidas shall have first provided written notice to TAMU of any such violation and such violation shall then recur and TAMU fails to cure, if curable, within thirty (30) calendar days of adidas' delivery of written notice to TAMU of any such breach;

(4) TAMU, the NCAA, the Conference or any assignee thereof (including any licensing agent or broadcast partner of the foregoing) enacts, adopts or accedes to any regulation, restriction, prohibition or practice that materially deprives adidas of the promotional benefits and/or product/brand exposure contemplated by this Agreement including, but not limited to, (i) any diminution of adidas' logo placement rights (in terms of size, location placement, color prominence and/or number of placements) on Product or Licensed Product, including any total ban on the placement of camera-visible logo identification on


Authentic Competition Apparel (ii) "air brushing" adidas identification from still photography or footage, or (iii) use of L-VIS technology or other "virtual signage" or electronic/computer imaging technology that alters, substitutes or replaces adidas' stadium/arena signage (including adidas logo identification that appears on uniforms) with other commercial identification that is seen by home television Viewers;

(5) TAMU, the NCAA, the Conference or any assignee thereof (including any licensing agent or broadcast partner of the foregoing) enacts, adopts or accedes to any regulation, restriction, prohibition or practice, or takes any action, or causes or induces TAMU, the Athletic Department or any Team to take any action, that would materially adversely affect any rights conveyed to adidas under this Agreement (e.g., limiting the right of adidas to supply brand-identified footwear for Team use, requiring the use of competitive product, or to display competitor-identification, etc.);

(6) TAMU disparages the adidas brand and/or adidas Products or takes any other action inconsistent with the endorsement of adidas Products provided, however, that adidas shall have first provided written notice to TAMU of any such violation and such violation shall then recur and TAMU fails to cure, if curable, within thirty (30) calendar days of adidas' delivery of written notice to TAMU of any such breach; or

(7) TAMU breaches any other material term of this Agreement, which breach TAMU fails to cure, if curable, within thirty (30) calendar days of adidas' delivery of written notice to TAMU of any such breach.

(b) In the event of termination under this Paragraph or Paragraph 15, TAMU shall not be entitled to any further compensation under this Agreement, except any unpaid Base Compensation earned prior to the effective date of termination, prorated (in the case of Base Compensation) over the entire Contract Year aFld calculated to the effective date of termination. Alternatively, adidas shall have the right to receive from TAMU reimbursement for Base Compensation, if any, paid in excess of the amount to which TAMU would be entitled if the Base Compensation were pro-rated over the entire Contract Year, calculated to the effective date of termination. Any such payment shall be due within thirty (30) calendar days of the date of termination.

17. ADIDAS POST-TERMINATION RIGHTS.

Upon expiration or termination of this Agreement for any reason, adidas shall have the right to:


(a) Run any non-cancelable media involving the TAMU Endorsement and exhaust all advertising and promotional materials that were produced prior to the effective date of expiration or termination;

(b) (INTENTIONALLY OMITTED)

(c) Use, in perpetuity, Game Photos or Game Footage for in-house exhibition for historical, educational or commemorative purposes.

18. INDEMNIFICATIONS, INSURANCE.

(a) adidas shall defend, indemnify and hold harmless TAMU, its regents, trustees, directors, officers, employees and agents (collectively, "TAMU Parties") from and against all suits, actions, claims, judgments, damages, losses, liabilities, costs and expenses, including reasonable attorney fees, Claims incurred by any TAMU Parties arising out of or relating to: (i) adidas' breach of any material term of this Agreement; or (ii) the acts or omissions of adidas, or those of its employees and for agents; provided adidas is given prompt written notice of and shall have the option to undertake and conduct the defense of any such Claim. in any instance to which the foregoing indemnities pertain, TAMU Parties shall cooperate fully with and assist adidas in all respects in connection with any such defense, and no TAMU Party shall enter into a settlement of such Claim or admit liability or fault on the part of adidas without adidas' prior written approval.

(b) To the extent permitted by the Texas Constitution and under the laws of the State of Texas, TAMU shall defend, indemnify and hold harmless adidas, its directors, officers, employees, agents and assigns, from and against all Claims incurred by adidas arising out of or relating to: (i) a Claim that adidas' use of the TAMU Endorsement or any TAMU Mark violates or infringes upon the trademark, copyright or other right of any third-party; (ii) a Claim that adidas' use of any Coach Endorsement violates the rights of publicity, right of privacy or any other right of any Coach; (iii) acts or omissions of any TAMU Party; or (iv) TAMU's breach of any warranty in or other term of this Agreement, provided TAMU is given prompt written notice of and shall have the option to undertake and conduct the defense of any such Claim. In any instance to which the foregoing indemnities pertain, adidas shall cooperate fully with and assist TAMU in all respects in connection with any such defense, and adidas shall not enter into a settlement of such Claim or any liability or fault on the part of TAMU without TAMU's prior written approval.

(c) adidas shall, through self-insurance, provide ",AMU Parties with reasonably satisfactory coverage against Claims arising out of adidas' sale of Licensed Products or, at adidas' election and at its expense, obtain and maintain (throughout the Term) product liability insurance providing

Page 17 of 7.3 ADIDAS.18926.FINAL

coverage, as set forth below, for TAMU Parties for any Claims arising out of adidas' sale of Licensed Products and shall include TAMU as an additional insured. In the event ADIDAS elects to discontinue self-insuring, it will obtain and maintain (throughout the remainder of the Term) general liability, property damage, and product liability insurance issued by a company authorized to do business in the State of Texas and providing coverage of at least One Million Dollars ($1,000,000) per occurrence for bodily injury or death of persons and damage to property that result directly or indirectly from any adidas Product while being used for its intended purpose of from the negligent or intentional act of omission of adidas or its officers or employees in the performance of this Agreement. In addition, adidas will obtain and maintain insurance with an aggregate limit of Ten Million Dollars ($10,000,000) providing excess coverage for such liability In the event of cancellation of such insurance, adidas will obtain insurance with the same limits and coverage from a company acceptable to TAMU prior to the effective date of cancellation,

19 ALTERNATIVE DISPUTE RESOLUTION, REMEDIES.

The dispute resolution process provided for in Chapter 2260 of the Texas Government Code shall be used, as further described herein, by TAMU, and adidas to attempt to resolve any claim for breach of contract made by either party:

(a) Any claim for breach of this Contract that the parties cannot resolve in the ordinary course of business shall be submitted to the negotiation process provided in Chapter 2260, subchapter S, of the Texas Government Code. To initiate the process, the complaining party shall submit written notice, as required by subchapter S, to the University Contracts Officer, TAMU. Said notice shall specifically state that the provisions of Chapter 2260, subchapter B, are being invoked. A copy of the notice shall also be given to all other representatives of TAMU and adidas otherwise entitled to notice under the parties' contract. Compliance with subchapter B is a condition precedent to the filing of a contested case proceeding under Chapter 2260, subchapter C, of the Texas Government Code.

(b) The contested case process provided in Chapter 2260, subchapter C, of the Texas Government Code is the parties' sole and exclusive process for seeking a remedy for any and all alleged breaches of this Contract if the parties are unable to resolve their disputes under subparagraph (a) of this paragraph.

(c) Compliance with the contested case process provided in subchapter C is a condition precedent to seeking consent to sue


20. NOTICES.

from the Legislature under Ch, 107 of the Civil Practices and Remedies Code. Neither the execution of this Contract by TAMU nor any conduct of any representative of TAMU thereafter shall be considered a waiver of sovereign immunity to suit

(1) The submission, processing, and resolution of a claim is governed by the published rules as adopted by the Office of the Attorney General of the State of Texas pursuant to Chapter 2260 as currently effective, hereafter enacted or subsequently amended.

(2) Neither the occurrence of an event nor the pendency of a claim Constitutes grounds for the suspension of performance by either party, in whole or in part.

(3) The designated individual responsible on behalf of TAMU for examining any claim or counterclaim and conducting any negotiations related thereto, as required under §2260.052 of the Texas Government Code shall be the University Contracts Officer, TAMU.

(b) TAMU and adidas agree that, in the event that either party breaches any material term or condition of this Agreement, in addition to any and all other remedies available to the other party at law or in equity, such other party shall be entitled to injunctive relief from such further violation of this Agreement, pending litigation as well as on final determination of such litigation, without prejudice to any other right of such other party.

All notices, statements and payments provided for herein shall be in writing and deemed given if sent postage prepaid via registered or certified mail, or by express courier service or facsimile with confirmed delivery, to the parties at the addresses given below, or such other addresses as either party may designate to the other. Any written 'lotice shall be deemed to have been given at the time it is sent addressed to the parties as set forth below. It is TAMU's obligation to notify adidas of any address change.


ADIDAS PROMOTIONAL Texas A&M University RETAIL OPERATIONS, INC. College Station, TX 77843-1181 5055 N. Greeley Attn: Vice President for Finance and Portland, OR 97217 Chief Financial Officer Attn: General Counsel w/cc: Athletic Director

21. INDEPENDENT CONTRACTORS.

The performance of services for adidas by TAMU is in the capacity of independent contractors. This Agreement is not intended to create nor shall it be construed to create any relationship between the parties other than that of independent entities contracting solely for the stated purposes. Neither TAMU nor adidas or their respective officers and employees shall be considered to be, and they shall not represent to any third-party that they are, the agent, employee, or representative of the other party.

22. ASSIGNMENT/DELEGATION/PASS THROUGH.

(a) This Agreement and the rights and obligations of TAMU hereunder are personal to TAMU and shall not be assigned or delegated by TAMU. Any assignment by TAMU shall be invalid and of no force or effect and upon any such unauthorized assignment, adidas may, at its option, immediately terminate this Agreement upon written notice to TAMU.

(b) The rights granted to adidas by TAMU hereunder are personal to adidas and shall not be assigned, delegated or passed-through outside of the adidas Group and its retail accounts without TAMU's prior written approval, which approval shall not be unreasonably withheld.

23. WAIVER.

The failure at any time of TAMU or adidas to demand strict performance by the other of any of the terms, covenants or conditions set forth herein shall not be construed as a continuing waiver or relinquishment thereof, and either party may, at any time, demand strict and complete performance by the other party of such terms covenants and conditions.

24. SEVERABILITY.

Every provision of this Agreement is severable. If any term or provision hereof is held to be illegal, invalid or unenforceable for any reason whatsoever, such illegality, invalidity or unenforceability shall not affect the validity of the remainder of this Agreement or any other provision and the illegal, invalid or unenforceable


provIsion shall be deemed by the parties as replaced by such substitute provision as shall be drafted by adidas and acceptable to TAMU, in such form and substance as shall be legally valid, and as shall accomplish as near as possible the purpose and intent of the invalidated provision.

25. ADDITIONAL WARRANTIES.

TAMU represents and warrants that:

(a) To the best of its knowledge, no agreement, contract, understanding or rule of any national, international or collegiate governing body exists which would prevent or limit performance of any of the obligations of either party hereunder.

(b) Neither TAMU nor any Coach nor Staff member is party to any oral or written agreement, contract or understanding which would prevent, limit or hinder the performance of any obligations hereunder of TAMU, Coaches or Staff. TAMU further represents and warrants that during the Term, TAMU will not:

(1) Sponsor, endorse or allow any Coach or Staff member to sponsor, endorse or wear and/or use athletic footwear or other Products sold by any manufacturer or seller other than adidas;

(2) Enter into, or allow any Coach or Staff member to enter into, any endorsement, promotional, consulting or similar agreement (including the sale of signage or other media) for athletic footwear or other Products with any manufacturer or seller of Products; or

(3) Take any action inconsistent with the endorsement of adidas Products, or allow any Coach or Staff member to take any such action.

(c) It has the full legal right and authority to enter into and fully perform this Agreement in accordance with its terms and to grant to adidas all the rights granted herein.

26. CONFIDENTIALITY.

TAMU shall not (nor shall it permit or cause its employees, agents or representatives to) disclose the financial terms of this Agreement, the marketing plans of adidas, or other confidential material or information disclosed to TAMU (including information disclosed during audit) to any third party except to its trustees or as may be required under the Public Information Act of the State of Texas or by other applicable law or court order.


27. CAPTIONS.

Paragraph captions and other headings contained in this Agreement are for reference purposes only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of the Agreement or any provision hereof.

28. ENTIRE CONTRACT.

As of the effective date hereof, this Agreement shall constitute the entire understanding between TAMU and adidas and may not be altered or modified except by a written agreement, signed by both parties. Any previous agreements between TAMU arid adidas shall have no further force or effect.

29. SIGNING BONUS.

Upon execution by adidas, adidas will issue a $250,000 signing bonus payment to TAMU.

30. EXCEPTIONS

In signing this Agreement, ADIDAS acknowledges TAMU has an exclusive agreement with EASTON SPORTS, INC ("EASTON") for the provision of EASTON equipment and promotional rights in association with the TAMU baseball program. ADI DAS agrees its rights under this Agreement do not extend to the TAMU baseball program with respect to equipment provided by EASTON. This exception applies to all terms of this agreement including, but not limited to, the definitions of Intercollegiate Athletic Programs, Team, Game, Coach, Coach Endorsement, Staff, Product and associated rights of adidas and obligations of TAMU, its employees and players.

In signing this Agreement, adidas further acknowledges TAMU has an exclusive agreement with NIKE, INC for apparel, product and promotional rights in association with the TAMU track program. adidas agrees its rights under this Agreement do not extend to the TAMU track program. This exception applies to all terms of this agreement including, but not limited to, the definitions of Intercollegiate Athletic Programs, Team, Game, Coach, Coach Endorsement, Staff, Product and associated rights of ADIDAS and obligations of TAMU, its employees and players.

SIGNATURE PAGE TO FOLLOW


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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date written below.

Texas A&M University adidas Promotional Retail Operations, Inc.

By: ~-Elsa A. Murano President

Date: Date:?/e:;?l0 gJ _

By: _3Y:~~ Its:

Vice President for Finance & Chief Financial Officer

Date: Date:t9!7i<f'"

By:, _

Bill Byrne 0 Its:Director of Athletics

3y:G~ Date: g -- I L. - 0 r' Date:


EXHIBIT A

T1II TM

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TEXASA&M UNIVERSITY

Documents

Texas A&M contract with Adidas