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Contract ID: 0000000300000000000002082
MEMORANDUM OF AGREEMENT
Between
The University of Iowa
Iowa City, Iowa
and
1
Hat World, Inc. dlb/a Sports Avenue
Indianapolis, IN
Version: 0.00
Amendment: 0
THIS MEMORANDUM OF AGREEMENT (hereinafter "Agreement") is made and entered into on July 6,
2011 by and between The University of Iowa, Iowa City, Iowa; (hereinafter "University") and Hat World,
Inc. d/b/a Sports Avenue, 7 ~ 5 5 Woodland Dr, Indianapolis, IN, 46278 (hereinafter "Licensee").
RECITALS
WHEREAS, It Is the desire of the University to enter into an Agreement with Hat Wortd, Inc. dlb/a Sports
Avenue to provide The University of Iowa as outlined In Request for Proposal (hereinafter "RFP") #
14232 and as amended In thie Agreement, and
WHEREAS, the Licensee desires to provide Licensed Merehandlse Sales for the University in
accordance with the terms and conditions as outlined in RFP # 14232 and as amended In this Agreement,
and
THEREFORE, In consideration of the promises and the mutual covenants contained therein, the
Partles agree as follows:
Unless specifically altered herein, all specifications, requirements, and terms and conditions of RFP #
14232, and the Licensee's responses thereto, form the basis far and are hereby incorporated Into this
agreement.
TERM:
This Agreement shall begin on or about Julv 1, 2011 and remain In affect for the succeeding flve (5) year
period, through and Including June 30, 2018. Thereafter, the University reserves the right to negotiate
with LiCEnsee to extend the contract for up to an additional two (2) -five (5) year extension periods,
through June 30, 2026. The University reserves the right to extend the contract on a month to month
basis beyond the expiration of the contract to facilitate establishment of a new contract. The Universtty
reserves, solely, the right to determine whether or not any extensions will be offered, whichever is in the
University's best interest.
The University may terminate the Agreement at any time within the first ninety (90) days of the initial
contract, or at any time should the University determine that the Licensee's performance is or has
become unsatisfactory in the sole opinion of the University.
DESCRIPTION OF LICENSE:
The Licensee agrees to make Licensed Merchandise Sales and shall pay the University the license fee
percentage, based on the annual grass sales or the annual minimum guarantees stated below, whichever
Is higher:
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Contract Term
July 1. 2011 to June 30 2012
Julv 1, 2012 to June 30,2013
Julv 1 2013 to June 30. 2014
J u t ~ 1. 2014 to June 30, 2015
July 1 2015 to June 30, 2016
Annual Guarantee*
$600,000
$600,000
$600,000
$600,000
$600 000
Version: 0.00
Amendment: 0
'*The Annual Guarantees stated above rs compnsed from all three components: Concess1ons, Team
Store located on Highway 6 In Coralville, lA (hereinafter "Team Store"), and Web Sales as well as rental
amount for the Team Store located on. Highway 6 in Coralville.
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Term License Fee Percentaoe for Concessions
July 1, 2011 toJune30, 2012 25%
Ju!Y 1, 2012 to June 30, 2013 25%
July 1, 2013 to June 30 2014 25%
July 1 2014 to June 30, 2015 25%
July 1, 2015 to June 30, 2016 25%
Contract Term
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Ucense Fee Percentaae for Team Store
July 1, 2011 to June 30 2012 25% over $1,000 000
Julv 1 2012 to June 30. 2013 25% over $1.000 000
July 1. 2013 to June 30, 2014 25% over $1,000 000
July 1. 2014 to June 30, 2015 25% over $1 000,000
July 1 2015 to June 30, 2016 25% over $1,000 000
Contract Term License Fee Percentaae for Web Sales
July 1, 2011 to June 30 2012 30%
July 1, 2012 to June 30 2013 30%
July 1, 2013 to June 30 2014 30%
July 1 2014 to June 30, 2015 30%
July 1, 2015lo June 30,2016 30%
Licensee shall provide a percentage of annual gross revenue and a Guaranteed Annual Minimum
Payment for all sales of Ullage merchandise during the term of the Contract.
License fee is to be paid on "gross revenueft which is defined as all proceeds collected by the Licensee,
its agents, or employees from the retail sale of items sold under the awarded contract, excluding sales
tax. Payments must be made on or before the 25th of each month, based on revenues collected the
previous month.
Monthly payments should Include a summary showing the nama and date for each event, gross sales and
license fee percentage for each event. The monthly payment summary should also include the quantity
and value of each item sold, and what quantity of each was sold at the Souvenir Store verses the
Souvenir Stands.
If the license fee paid on revenues falls short of the guaranteed minimum for an annual period, the
balance will be due no later than September 1st of each year. In addition, payments above the guaranteed
minimum shall also be paid no later than September 1
1
of each year.
Licensee shall pay a 25% license fee over $1 million on all University of Iowa merchandise sold through
the Team Store located on Highway 6 in Coralville, lA. Licensee shall pay a 4% license fee on all
University of Iowa merchandise sold through the existing Lids.com Internet site and a 4% license fee on
all University of Iowa merchandise sold through licensee's current or future retail stores within the State
of Iowa. The 4% license fee is included In the annual guaran1ee.
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Licensee shall pay the University a onetime signing Incentive of $50,000 due upon execution of the
Agreement
Licensee will supply the University with $2,500 of merchandise annually and allow a 40% discount on all
purchases for the University Athletics department use. In addition, Licensee will supply one thousand t-
shlrts to the University per year.
Rent for the Team Store located on Highway Sin Coralville, lA shall be $52,416 per year and Is Included
In the Annual Guarantee as stated above. Separate from this rent, the Licensee shall be responsible for
ell insurance, property taxes, utilities, and maintenance costs since these amounts are NOT Included in
the Annual Guarantee. The Licensee will enter into a separate lease agreement for the Team Store and
agrees to fulfill all obligations outlined In said lease.
THE UCENSEE FURTHER AGREES:
This Agreement including incorporated addenda shall constitute the entire agreement between the
Parties and shall supersede all previous agreements, written or oral. No modification of waiver of any
provision shall be valid unless in writing and signed by the Parties.
In the event any portion of this Agreement is found to be invalid or unenforceable for any reason, the
remainder of the Agreement shall remain intact. That portion deemed Invalid shall be amended in writing
to the minimum extent necessary to be considered valid and enforceable.
The Licensee may not assign this prior written consent of the University. The PartJes
agree that the term assigned Includes acquisition of the Licensee by another party. Ucensee agrees to
provide the University with written notice of any assignment a minimum of thirty (30) business days prior
to dale of such event.
This Agreement shall be govemed by the laws of the State of Iowa and applicable Federal law.
The University's failure to enforce provisions of this Agreement in whole or in part will not negate the
Agreement or the enforcement of provisions at a future time.
The Parties are acting herein as Independent Ucensee. Nothing herein contained shall create or be
ronstrued as creating a partnership, Joint venture or Licensee relationship between any of the Parties and
no Party shall have the atJthorlty to bind the other Party In any respect.
The Licensee shall take over operation of the Highway 6 Team Store located In Coralville on July 1, 2011.
The University will provide the space empty of all merchandise, equipment, Inventory, display racks, etc.
with the e><ception of what the Licensee and the University Book Store agree will remain or be purchased
by Licensee. Licensee shall work directly with University Book Store management to facilitate this
transition.
The University Book Store will operate ttle merchandising for the University of Iowa sports camps for the
summer of 2011 and will transfer this operation to Licensee for summer 2012.
The Hawk Shop brand name will remain with the University and will not be awarded to the Licensee as
part of this Agreement
The University retains control of the .brand name that will be created by the Licensee for the new retail
operation and will own the Uniform Resource Locator (URL). Both the brand name and URL must be
approved by the University. The University will trademark the new brand and It will stay with the University
should the Agreement be terminated or upon expiration. The University will have control over the number
of retail store outlets 1hat are established with the new brand name created by the Wcensee. This control
shall include the ability to force closure of these retail outlets; however, with exception to the Team Store
located on Highway 6 In Coralville, Iowa the Licensee shall have the option to operate the retail operation
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Contract ID: 0000000300000000000002082 Version: 0.00
Amendment: 0
under a different legal name should the University determine at Its sole discretion that the oullet be closed.
Should this Agreement be terminated or upon expiration, the Licensee with written approval from the
University, which shall not be unreasonably withheld, may change the legal name of the business for the
new retail store outlets that were established during the term of Agreement. The license fee for any new
retail operations will be mutually agreed to in wr11lng, which shall not be unreasonably withheld, and in no
event will be less than a 4% license fee oo all University of Iowa merchandise sold.
The University will be actively involved in the Licensee's creation of a new name and/or brand. The
Licensee will seek approval from Athletics In developing the marketing concept for the new brand name
including how the University's name will be used In these promotions.
Upon contract execution, the Ucensae will develop a comprehensive marketing pian that could include
marketing assets contractually assigned to Hawkeye Sports Properties, the Ul's exclusive multi-media
marketing partner.
The Ucensee will prepare a transition plan for the University whicn shall provide plans for purchasing
designated current University on-hand inventory. Pricing for any available on-hand Inventory and the
various concession trailers and available equipment or fixtures currently owned by the University will be
mutually agreed to in writing.
In the event this contract is not renewed at its expiration, the University will cooperate with Licensee to
arrange for selling Ucensee's remaining Inventory to the new contractor at cost with allowances for dated
and distressed merchandise . .
A license to produce University of Iowa apparel will be granted to the Ucensee once Licensee has
executed the standard University licensing agreement. Licensee shall pay a 10% royalty based on the
wholesale price of the finished product. Said items will also be included in retail license fee payments for
product sales as described within this agreement for the Team Store located on Highway 6 in Coralville,
lA, internet, and additional Licensee retail operations within the State of Iowa. Soft goods manufactured
and offered for sale by Licensee shall not exceed 15% of total soft goods unless mutually agreed to in
writing.
Licensee will have the right to hold online or retail store clearance sales to dispose of old Inventory and
generate revenues for the purchase of new Inventory. Licensee shall deduct sales from license fee where
merchandise is discounted 30% or more.
Licensee shall have the option of developing the a-commerce site under a customized shopping cart
solution which could be linked from the hawkeyesports.com, the official World Wide Web site af the Iowa
Hawkeyes, and the Ul's official Facebook and Twitter social media sites to further enhance promotion and
p resentatl on.
Licensee shall perform a complete remodel of the existing Team Store focated on Highway 6 in Coralville,
lA with an estimated cost of $400,000. If the Agreement is not renewed for the first flve-year extension
option the University will reimburse the Licensee $50,000 for any un-depreciated asset costs incurred for
the remodel of the Team Store located on Highway 6 in Coralville, lA.
Purchases from the website developed by the Licensee must be shipped from an iowa address. However,
in certain cases, large items such as chairs, tables, barstool, and/or grills that need to be drop shipped
from 1he manufacturer may be sent from a non-Iowa address when mutually agreed with the University.
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Contr.actJD: OD000003000000000000020B2 Version: 0.00
Amendment: 0
Having read and understood this Memorandum of Agreement in witness thereof. the Parties have
hereunto signed this Agreement.
THE UNIVERSITY OF IOWA
Purchasing Department
202PCO
Iowa City, lA 52242-2500
THE UNIVERSITY OF IOWA
Signature
Dabby Zumbach
Name
Director of Purchasing
Title
Date
HAT WORLD, INC. DJBIA SPORTS AVENUE
7555 Woodland Dr
Indianapolis, IN 46278
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Signature
~ o h Me \ ct ~ J ~ ~
Name
TIUe
7-lO-\\
Date
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7/11/11