houston texans lottery agreement

TRADEMARK LICENSE AGREEMENT

THIS TRADEMARK LICENSE AGREEMENT (the "Agreement"), effective as of the last dateshown next to the signature lines below (the "Effective Date"), is by and between Houston NFL Holdings,L.P. (hereinafter called LICENSOR), a Delaware limited partnership licensed to do business in the State ofTexas and doing business as the "Houston Texans" (the "Team"), with its principal place of businesslocated at Reliant Stadium, Two Reliant Park, Houston, Texas, 77054-1573, and the Texas LotteryCommission (hereinafter called SPONSOR), a Texas state agency, with its principal place of businesslocated at 611 East 6th Street, Austin, Texas 7870]-37]5 (LICENSOR and SPONSOR are ~ach sometimesreferred to herein individually as a "Party," and collectively as the "Parties").

WHEREAS, LICENSOR is the owner and licensor of the trademarks, name, logos, symbols,emblems, characters, artwork, depictions, illustrations, insignia, trade dress, service marks, copyrights andother intellectual property rights relating to the Houston Texans NFL Football franchise as shown inExhibit A attached hereto (hereinafter called the "Team's Trademarks"); and,

WHEREAS, SPONSOR is the owner and licensor of the trademarks, name, logos, symbols,emblems, characters, artwork, depictions, illustrations, insignia, trade dress, service marks, copyrights andother intellectual property rights relating to the Texas Lottery and the Texas Lottery Commission as shownin Exhibit B attached hereto (hereinafter called the "sponsor' s Trademarks"); and,

WHEREAS, SPONSOR desires to license the Team's Trademarks in connection with its business,and LICENSOR desires to use Sponsor's Trademarks in connection with its business.

NOW, THEREFORE, in consideration of the foregoing and of the mutual promises hereinafter setforth, the Parties agree as follows:

1. DEFINITIONS

1.1 "Licensed Products" means lottery tickets and prize packages pertaining to such tickets, andmaterials or services related or ancillary to the offering or sale of such lottery tickets and prize packages (e.g.,advertising, marketing, billboards, flyers, brochures, point of sale materials, etc.), all bearing or using theTeam's Trademarks.

1.2 "Game" means the lottery game to be launched by Sponsor in approximately August 2009,ancIJor any lottery games launched by Sponsor thereafter, in the Territory and utilizing the Licensed Productsfor the Term of the Agreement.

1.3 "Sales," "sale," "sell" or "sold" refers to Game tickets sold and processed by SPONSOR'sLottery Gaming System, less (a) any Game tickets that have been canceled or returned, (b) any promotionaltickets or promotional coupons, and (c) any retailer adjustments.

1.4 "Term" means the period of ti,?e from the Effective Date until Sponsor in its sole discretionends or terminates the Game, or until June 30, 2010, whichever is earlier, and any subsequent extensions of thisAgreement, either by express written agreement of the Parties or through operation of the force majeureprovisions set forth in section ]5 of this Agreement. Notwithstanding the foregoing and anything contained

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herein to the contrary, in accordance with NFL 2009 Resolution BY -I, this Agreement shall expire no laterthan June 1,2011.

1.5 "Territory" means within the geographic boundaries of the State of Texas.

2. GRANT OF LICENSE. EXCLUSIVITY

(a) Subject to the terms and conditions hereof, and as set forth in Addendum No.1, which isattached hereto and fully incorporated herein by reference, LICENSOR grants to SPONSOR an exclusive,non-transferable right and license to use the Team's Trademarks during the Term solely in connection withthe sale, marketing, advertising, and promotion (including but not limited to television, radio, printmediums, and the Internet) of the Licensed Products and Game (or for such other use as may be approvedby LICENSOR and agreed to by SPONSOR), tickets for which shall be prepared and printed by one ormore of SPONSOR's ticket manufacturers or vendors (hereinafter called PRINTER) and to be offered forsale in the Territory, at duly licensed lottery sales agent locations and/or directly by SPONSOR. SPONSORshall be solely and exclusively responsible for the design and execution of the Game, including selectionand notification of prizewinners, and for compliance with all rules and regulations of any state, federal, orother governmental body with respect to the Game.

(b) LICENSOR represents that it is duly authorized to grant such right and license toSPONSOR, and to PRINTER for the sole purpose of producing the instant lottery game tickets.LICENSOR has not previously granted any right or authority to any third party that would conflict with thelicensed rights granted to SPONSOR herein. LICENSOR further represents that this Agreement does notviolate any obligation owed by LICENSOR to the National Football League or any other third party.

(c) The Game shall be designated as "The Official Scratch-Off Lottery Game of the HoustonTexans." For the Term of the Agreement, LICENSOR shall not permit any other person or entity to utilizethe Team's Trademarks to advertise, promote, offer or sell any goods or services that are the same as orsimilar to the Licensed Products. LICENSOR's grant of exclusivity to SPONSOR is subject to the rules andpolicies of the National Football League, as such may be amended from time to time, and specificallysubject to NFL 2009 Resolution BY -1, a copy of which is attached hereto as Exhibit C.

(d) SPONSOR hereby grants to LICENSOR a non-exclusive, non-transferable right and licenseto use Sponsor's Trademarks during the Term in connection with the marketing, advertising, and promotion(including but not limited to television, radio, print mediums, and the Internet) of the Licensed Products andGame, and in connection with marketing and advertising of SPONSOR's involvement with and sponsorshipof LICENSOR.

3. OWNERSHIP OF RESPECTIVE INTELLECTUAL PROPERTY

(a) SPONSOR acknowledges the ownership of the Team's Trademarks by LICENSOR andSPONSOR agrees that it will do nothing inconsistent with such ownership and that all use of the Team'sTrademarks by SPONSOR shall inure to the benefit of and be on behalf of LICENSOR. SPONSOR agreesthat nothing in this Agreement shall give SPONSOR any right, title or interest in the Team's Trademarksother than the right to use the Team's Trademarks in accordance with this Agreement and SPONSOR agreesthat it will not attack the title of LICENSOR to the Team's Trademarks or attack the validity of thisAgreement. Further, SPONSOR shall not claim adversely to any right or interest of LICENSOR in and to:

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(i) the Team's Trademarks; or (ii) any trademarks, service marks, trade dress or trade names confusinglysimilar to the Team's Trademarks. SPONSOR agrees not to attempt to register or to use or to aid any thirdparty in attempting to register or use any trademarks, service mark, or trade name, or apply for anycopyright or design right which may be confusingly similar to the Team's Trademarks in any territory andshall fully inform PRINTER of this obligation.

(b) LICENSOR acknowledges the ownership of SPONSOR's Trademarks by SPONSOR andLICENSOR agrees that it will do nothing inconsistent with such ownership and that all use of SPONSOR'sTrademarks by LICENSOR shall inure to the benefit of and be on behalf of SPONSOR. LICENSOR agreesthat nothing in this Agreement shall give LICENSOR any right, title or interest in the SPONSOR'sTrademarks other than the right to use SPONSOR's Trademarks in accordance with this Agreement andLICENSOR agrees that it will not attack the title of SPONSOR to SPONSOR's Trademarks or attack thevalidity of this Agreement. Further, LICENSOR shall not claim adversely to any right or interest ofSPONSOR in and to: (i) the SPONSOR's Trademarks; or (ii) any trademarks, service marks, trade dress ortrade names confusingly similar to the SPONSOR's Trademarks. LICENSOR agrees not to attempt toregister or to use or to aid any third party in attempting to register or use any trademarks, service mark, ortrade name, or apply for any copyright or design right which may be confusingly similar to SPONSOR'sTrademarks in any territory.

4. QUALITY STANDARDS

Each Party agrees that the nature and quality of all goods produced and services rendered by a Partyin connection with the other Party's intellectual property, and all related advertising, promotional and otheruses of the other Party's intellectual property, shall conform to standards set by and be under the control ofthe Party owning that intellectual property.

s. QUALITY MAINTENANCE

Each Party agrees to cooperate with the other Party in facilitating the owning Party's control of thenature and quality of use of the owning Party's intellectual property. Each Party agrees to submit to theother Party color proofs of all tickets, point-of-sale and advertising materials containing the Team'sTrademarks and/or SPONSOR's Trademarks (the "Artwork") prior to production, for approval in writing.The receiving Party shall have three (3) business days to approve in writing each piece of Artwork or toreturn the Artwork to the submitting Party for revision. The submitting Party shall submit any such revisedArtwork to the receiving Party, and the receiving Party shall again have three (3) business days to approvein writing all such revised Artwork or return the Artwork to the submitting Party for further revision. If thereceiving Party does not return the Artwork within the aforementioned time periods, the Artwork shall bedeemed approved by the receiving Party, subject to the National Football League's approval rights set forthin NFL 2009 Resolution BV-I (LICENSOR shall have the duty to submit the relevant Artwork to theNational Football League for such approval). The receiving Party's approval of, and requests for revisionof, Artwork shall be communicated via email, fax, or other written documentation. Neither Party heretowill unreasonably withhold its approval of any act or request of the other to which its approval is necessaryor desirable. The submitting Party agrees not to change such Artwork in any material respect after approvalby the receiving Party. SPONSOR agrees to supply LICENSOR with ten (10) packs of voided tickets asfinally produced, and specimens of all other authorized uses of the Team's Trademarks upon LICENSOR'srequest. Each Party agrees that it will comply with all applicable laws and regulations and obtain all

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appropriate government or NFL approvals pertaining to the sale, distribution and advertising of goods andservices covered by this Agreement.

6. FORM OF USE

SPONSOR agrees to use the Team's Trademarks on the Licensed Products in the form and mannerand with appropriate legends as approved or prescribed by LICENSOR, and not to use any other trademarkor service mark of LICENSOR in combination with the Team's Trademarks without prior written approvalof LICENSOR. Without restricting or limiting the foregoing, all goods sold by SPONSOR using theTeam's Trademarks, and all advertising and promotional materials of SPONSOR using the Team'sTrademarks shall bear the following statement: "The Houston Texans and the Houston Texans' logo areregistered trademarks of Houston NFL Holdings, L.P. and are used under license. All Rights Reserved."SPONSOR shall place the registered trademark symbol "@" whenever the Team's Trademarks appear intangible form. LICENSOR shall place the registered trademark symbol "@" whenever the SPONSOR'sTrademarks appear in tangible form.

7. INFRINGEMENT PROCEEDINGS

A Party agrees to promptly notify the other Party of any unauthorized use of the other Party'sintellectual property by others if or when such unauthorized use comes to a Party's attention. The owningParty shall have the sole right and discretion to bring infringement, unfair competition or other legal orequitable actions involving the owning Party's intellectual property.

8. TERMINATION IN THE EVENT OF INSOLVENCY OR FOR CAUSE

Each Party shall have the right to terminate this Agreement upon thirty (30) days' prior writtennotice to the other Party in the event of: (a) any affirmative act of insolvency by the other Party, (b) theappointment of any receiver or trustee to take possession of all or any part of the property of the other Party,(c) the winding-up, sale, consolidation, merger or any sequestration by government authority of the otherParty, or (d) a breach of the material terms of this Agreement that is not cured within thirty (30) days afterreceipt of written notice of such breach.

Notwithstanding anything herein to the contrary, the Parties acknowledge this Agreement (includingSPONSOR's obligations to make royalty and merchandise sales allocations payments to LICENSOR) iscontingent on the continued availability of funding. If funds for making payment(s) hereunder becomeunavailable due to lack of appropriations, SPONSOR or LICENSOR may terminate this Agreement withoutpenalty or further obligation to make payment or provide prizes following such termination, as applicable,by providing notice to the other Party.

9. EFFECT OF TERMINATION OR EXPIRATION

Upon termination or expiration of this Agreement, each Party agrees to discontinue all use of theother Party's intellectual property, or anything confusingly similar thereto, and to cooperate with each otheror their respective appointed agents to destroy or remove from public display all printed materials bearingthe other Party's intellectual property, subject to SPONSOR's right to sell through its existing inventory ofLicensed Products in connection with the Game, for a period of four (4) months following such expirationor termination but in no event later than June 1, 2011. Each Party agrees that before and after any such

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expiration or tennination, all right, title and interest in the intellectual property, and the goodwill connectedtherewith, shall remain the sole property of the respective owning Party.

10. PROHIBITED ASSIGNMENT AND SUB-LICENSING

Each Party agrees that this Agreement and the rights conveyed hereunder may not be assigned andthat neither Party shall be entitled to grant sub-licenses without the prior, express written consent of theother Party.

11. EXCEPTIONS TO RESTRICTIONS ON THE TERRITORY

The Parties agree that the Licensed Products may be sold within the State of Texas, pursuant to thetenns of current Texas law. However, incidental advertising, marketing and/or promotion of the LicensedProducts may occur, or be viewed by others, beyond the borders of the State of Texas, without violation ofthe tenns of this Agreement (e.g., advertising via the Internet, television or radio broadcasts in Texas, orthrough publications circulated beyond the State of Texas). Notwithstanding the foregoing sentence,LICENSOR shall comply with all laws governing the broadcasting and publication of advertisements andother infonnation concerning a lottery, including 18 u.s.c. sections 1304 and 1307. Further, LICENSORacknowledges and agrees that a Dallas Cowboys scratch-off lottery ticket may be offered, sold anddistributed by SPONSOR in the Territory, including in Houston, Texas, during approximately the sameTenn as the Game, without violating the tenns of this Agreement. LICENSOR further acknowledges andagrees that if the Dallas Cowboys or its parent, subsidiary or related companies provide marketing supportin conjunction with a Dallas Cowboys scratch-off lottery ticket in the Territory, including in Houston,Texas, during approximately the same Tenn, LICENSOR will not bring a claim against SPONSOR relatedto such marketing support.

12. APPROVALS

LICENSOR's grant of rights hereunder is subject to prior written approval by the National FootballLeague. This Agreement is subject to the rules and policies of the National Football League, as such maybe amended from time to time, including, without limitation the tenns of NFL 2009 Resolution BY -I,attached hereto as Exhibit C. Subject to the foregoing, the Parties hereto represent that the execution,delivery and perfonnance of this Agreement has been duly authorized by all necessary corporate action andgovernment or other approvals on the part of the Parties and that this Agreement constitutes a valid andlegally binding agreement of the Parties enforceable against them in accordance with its terms.

13. NOTICES

All notices and other communications under this Agreement shall be in writing and shall be deemedgiven when delivered personally or by overnight delivery to the Parties (and shall also be transmitted byfacsimile or email to the persons receiving copies thereof) at the following addresses (or to such otheraddress as a Party may have specified by notice given to the other Party pursuant to this provision):

If to SPONSOR, to:

Texas Lottery Commission611 East 6th Street

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Austin, TX 7870 IAttn: Dale Bowersock

Telecopy: 512-344-5242Email: [email protected]

If to Licensor, to:

The Houston TexansReliant Stadium, Two Reliant ParkHouston, TX 77054-1573Attn: Jamey RootesTelecopy: 832-667-2062Email: [email protected]

14. HOLD HARMLESS

LICENSOR represents that it has the full right and authority to license the use of LICENSOR'sintellectual property as contemplated in this Agreement, for the purposes set forth in this Agreement.LICENSOR therefore represents and agrees that it will indemnify and hold SPONSOR harmless from andagainst any claims of infringement or other loss or damage that may be alleged as a result of SPONSOR's useof LICENSOR's intellectual property for the purposes set forth in this Agreement. SPONSOR shall notifyLICENSOR promptly and in writing of any such claim, give LICENSOR, at LICENSOR's sole expense, solecontrol over its defense or settlement, and provide reasonable assistance in the defense thereof.

SPONSOR represents that it has the full right and authority to license the use of SPONSOR'sintellectual property as contemplated in this Agreement, for the purposes set forth in this Agreement.LICENSOR shall notify SPONSOR promptly and in writing of any claim of infringement arising out of the useof SPONSOR's intellectual property, give SPONSOR, at SPONSOR's sole expense, sole control over itsdefense or settlement, and provide reasonable assistance in the defense thereof.

In no event shall either Party hereto have any liability to any other Party in connection with thisAgreement for consequential, special or punitive damages. This Section shall survive the expiration ortermination of this Agreement.

15. FORCE MAJEURE

If any Party is delayed in or prevented from complying, either totally or in material part, with any ofthe terms or provisions of this Agreement by any reason out of its control (such as but not limited to riot,war, terrorism, or rebellion; fire, flood, severe storm, accident, or other act of God) or by a player strike,management lockout, walk out, postponement or any other work stoppage (whether or not LICENSOR hassupported such work stoppage) (collectively, a "force majeure"), then the affected obligations of such Partyshall be suspended during the period of such inability, and such inability shall not be deemed a breach ofthis Agreement.

If any of the Team's home games are cancelled, postponed or played at a location other than theReliant Stadium due to a force majeure, then LICENSOR shall provide the in-stadium benefits set forth inAddendum No.1 on the date(s) and at such location(s) at which any such cancelled, postponed or relocated

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games are played. LICENSOR will use all commercially reasonable efforts to satisfy its obligations withrespect to prizes or benefits under this Agreement. With respect to prizes that are unable to be provided dueto a cancelled, postponed or relocated game, the Parties will work together in good faith to agree either uponadditional prizes to be provided during any football seasons during the Term and/or refund of anyprepayments by SPONSOR for prizes paid for but not received.

If three (3) or more regular season home games in any single football season during the Term arecancelled and not rescheduled as a consequence of such force majeure (a "Cancelled Season"), the Term ofthis Agreement shall automatical1 y be extended by one (l) additional year but in no event later than June I,20 II. The consideration payable by SPONSOR during the year following a Cancelled Season will be thesame as the amount that would have been payable during the Cancelled Season. The consideration payableduring any subsequent years remaining in the Term will be the same as that which would have been payablein the immediately preceding year if there had been no Cancelled Season.

If any home game is scheduled by the NFL (with or without the consent of LICENSOR) to beplayed at a location outside the United States, LICENSOR may satisfy its obligations with respect to instadium benefits by making commercially reasonable efforts to provide such benefits at the remaining homegames. If such is not commercially feasible, LICENSOR agrees that the benefits to be received bySPONSOR pursuant to this Agreement shall be proportionately reduced by the number of such home gamesscheduled to be played at a location outside the United States, and the Parties will discuss in good faith ameans to provide substitute benefits of equal or greater value to SPONSOR.

Except as otherwise stated above, a force majeure shall not release the Parties from their otherobligations under this Agreement that are not prevented or delayed by the force majeure. A force majeureshall not include any event that a Party could have prevented by any exercise of due diligence and expresslydoes not include financial hardship.

16. APPLICABLE LA WS AND COURTS

This Agreement shall be governed and construed in all respects according to the laws of the State ofTexas, and subject to the dispute resolution provisions set forth in section 17 below, any litigation withrespect thereto shall be brought in the courts of the State of Texas. This section is purely a venue provisionand shall not be deemed a waiver of sovereign immunity by SPONSOR.

17. DISPUTE RESOLUTION

The dispute resolution process provided for in Texas Government Code Chapter 2260 and 16 TexasAdministrative Code §§ 403.201-223 must be used by LICENSOR to attempt to resolve any disputesbrought by LICENSOR arising under this Agreement.

18. ELIGIBILITY TO RECEIVE PAYMENTS ON STATE CONTRACTS

Under Texas Family Code Section 231.006, LICENSOR certifies that the individual or businessentity named in this Agreement is not ineligible to receive the specified grant, loan, or payment andacknowledges that this Agreement may be terminated and payment may be withheld if this certification isinaccurate.

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19. CERTIFICATION

Pursuant to Texas Government Code Section 466.103, SPONSOR's Executive Director may not

award a contract for the purchase or lease of facilities, goods or services related to lottery operations to aperson who would be denied a license as a sales agent under Texas Government Code Section 466.155 (seeExhibit D, attached hereto and incorporated by reference for all purposes). By executing this Agreement,LICENSOR certifies that it has reviewed the provisions of Texas Government Code Section 466.155, andfurther certifies that LICENSOR would not be prohibited by the terms of Texas Government Code Section466.155 from obtaining a license as a sales agent.

20. WAIVER

No waiver by either party of any default shall be deemed as a waiver of prior or subsequent defaultsof the same or other provisions of this Agreement.

21. SEVERABILITY

If any term, clause, or provision hereof is held invalid or unenforceable by a court of competentjurisdiction, such invalidity shall not affect the validity or operation of any other term, clause, or provisionand such invalid term, clause, or provision shall be modified to the extent possible to comply with the termsof the then-existing law and as adhering to the intent of the parties, and if such modification is not possiblethen in such event the provision shall deemed to be severed from the Agreement.

22. RIGHT TO AUDIT

LICENSOR understands that acceptance of funds under this Agreement acts as acceptance of theauthority of the State Auditor's Office, or any successor agency, to conduct an audit or investigation inconnection with those funds. LICENSOR further agrees to cooperate fully with the State Auditor's Office orits successor in the conduct of the audit or investigation, including providing all records requested.LICENSOR will ensure that this clause concerning the authority to audit funds received indirectly bysubcontractors through LICENSOR and the requirement to cooperate is included in any subcontract awards.

23. INTEGRATION

This Agreement constitutes the entire understanding of the Parties, and revokes and supersedes allprior agreements between the Parties. This Agreement shall not be modified or amended except in writingsigned by the Parties hereto and specifically referring to this Agreement.

24. REPRESENT ATION. MUTUAL NEGOTIATION

Each Party has had the opportunity to be represented by counsel of its choice in negotiating thisAgreement. This Agreement shall therefore be deemed to have been negotiated and prepared at the jointrequest, direction, and construction of the Parties, at arms length, with the advice and participation ofcounsel, and will be interpreted in accordance with its terms without favor to any Party.

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25. HEADINGS

The headings used herein are for reference and convenience only and shall not enter into theinterpretation hereof.

26. COUNTERPARTS

This Agreement may be executed in multiple counterparts, each of which shall be deemed anoriginal and which together shall constitute one and the same instrument.

27. STATUS OF THE PARTIES

This Agreement is not intended to create, and shall not be interpreted or construed as creating, apartnership, joint venture, agency, employment, master and servant, or similar relationship between the Parties,and no representation to the contrary shall be binding upon either Party.

HOUSTON NFL HOLDINGS, L.P.,d/b/a HOUSTON TEXANS ("LICENSOR")By: RCM Sports & Leisure, L.P., its general partnera~GP; L.L.c.. its general partner :/, /;~ pv. Date: ~ II ;;;::;doe;

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TEXAS LOTTERY COMMISSION ("SPONSOR")

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Date: 6!fJ/O?

ADDENDUM NO.1 TOTRADEMARK LICENSE AGREEMENT BETWEEN LICENSOR AND SPONSOR

This ADDENDUM NO. I TO TRADEMARK LICENSE AGREEMENT BETWEEN LICENSOR

AND SPONSOR is attached to and fully incorporated into that certain TRADEMARK LICENSEAGREEMENT, effective as of the last date shown to the signature lines therein, by and between HoustonNFL Holdings, L.P., d/b/a Houston Texans, and the Texas Lottery Commission (the "Agreement").

Capitalized terms used but not defined herein shall have the meaning given to them in theAgreement.

1. FEES AND CONSIDERATION

In consideration of being granted the right to use the Team's Trademarks during the Term,SPONSOR shall allocate funds not to exceed two hundred sixty-two thousand five hundred dollars($262,500) for Licensing Fees and one million one hundred ninety thousand dollars ($1,190,000) inMerchandise Allocation payment for the following.

a. Payment to LICENSOR of a royalty based upon the actual Sales of the Game (as defined in

section 1.3 of the Agreement) as follows:

Licensim! Fee Sales Allocation(Based on actual ticket sales - invoiced monthly)

Sell ThroughRange*

Up to 4 million tickets4,000,001 to 5 million

LicensingPercentage

1.001.25

Price perTicket

$5$5

Actual Sales

$20,000,000$5,000,000

LicensingFee

$200,000$62,500

Total Licensing Fee Allocation: $262,500.

* License percentage fees apply directly to the relevant sales tier and are not retroactive tolower sales levels.

SPONSOR (with the assistance of PRINTER) agrees to print with the intent to distribute and sell

approximately 5,000,000 Texas Lottery scratch-off tickets bearing the Team's Trademarks and that

the scratch-off tickets shall be sold at retail for a price of $5.00 per ticket.

For example: If the initial sales period indicated sales of 4,250,000 tickets, the invoiced amountwould be calculated as:

• 4,000,000 tickets sold at $5 = $20,000,000 multiplied by 1.00% licensing fee percentage =$200,000

• 250,000 tickets sold at $5 = $1,250,000 multiplied by 1.25% licensing fee percentage =$15,625

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• The total Licensing Fee invoice would be for $215,625

b. Payment to LICENSOR for merchandise and experiential prize packages that will contain a predetermined number of individual prizes to be awarded through second-chance drawingsconducted by SPONSOR and fulfilled by LICENSOR. The total allocation of prize funds forthese prizes will be one million, one hundred and ninety thousand dollars ($1,190,000). Paymentamounts are determined based upon the prize being fulfilled and are detailed as follows:

1. "Texans VIP Suite Weekend," five (5) allocated and valued at $40,000 each.

11. Team Autographed Authentic Jersey from Team Star Players, two thousand, fourhundred and seventy-five (2,475) allocated and valued at $400 each.

Invoicine for Merchandise and Experiential Prize Fulfillment

LICENSOR will be paid by SPONSOR for merchandise and experiential prizes over the course ofthe Game as prizes are fulfilled, as more particularly described in this section. SPONSOR agrees to conductfive (5) second chance drawings for the prizes and to award one (1) Texans VIP Suite Weekend prize andfour hundred ninety-five (495) Team Autographed Authentic Jerseys from Team Star Player prizes in eachdrawing, in accordance with the following schedule:

Drawine No. Time PeriodI

Between Sept. 15 - Oct. 15, 20092

Between Oct. 16 - Nov. 15,20093

Between Nov. 16 - Dec. 15,20094

Between Dec. 16 - Jan. 15, 20 I05

Within fifteen (15) business daysafter

the"End-of-Game"date

described in the following section

LICENSOR will invoice SPONSOR on a monthly basis as the prizes are fulfilled. A detailedaccounting of the prizes fulfilled will be included with the invoice, including the name and address of allexperiential and merchandise prize pack winners during the monthly billing period and the date eachexperiential prize was fulfilled (which, for purposes of this section, shall be considered when the TexansVIP Suite Weekend has been fulfilled with the winner) or each merchandise prize was mailed to eachwmner.

Invoicine for Licensine Fee Sales Allocation

During the term of this Agreement, SPONSOR shall deliver Game sales reports to LICENSOR onthe first state business day of each month beginning October I, 2009; if the first business day of the monthis a State of Texas holiday, then sales report will be due on the next business day that is not a State holiday.SPONSOR will detail weekly sales totals for the applicable reporting period. LICENSOR then will issue aninvoice for the licensing fee sales allocation to SPONSOR in accordance with the tiered License FeeAllocation schedule above. This process will continue until the official "Call" date for the Game determinedby SPONSOR in its sole discretion. The "Call" date begins a 45-day period during which all remainingtickets for the Game are returned to SPONSOR. The "End-of-Game" date is 45 days from the "Call" date

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and marks the end of the Game. No tickets for the closed Game may be distributed to or sold by retailersafter this date. A final reconciled sales report will be provided to LICENSOR by SPONSOR no later than90 days following the official "End-of-Game" date.

The timing and decision to close a Game will be in accordance with SPONSOR's rules, policies andprocedures. All of SPONSOR's directives, policies, procedures, rules, regulations and applicable laws shallapply to the Game.

LICENSOR shall be responsible for the print costs incurred by SPONSOR above the cost to printthe Game at a 4.5 million ticket quantity, subject to a cap of $16,000, unless otherwise agreed to byLICENSOR and SPONSOR. This cost will be deducted by SPONSOR from merchandise fulfillment andlicensing fee sales invoices payable to LICENSOR for the Game until the additional printing charges (>4.5million tickets) are paid in full.

2. MERCHANDISE FULFILLMENT SERVICES

Merchandise and Experiential Prizes, as detailed in Section 4, will be awarded by second-chance .drawings in which qualifying non-winning tickets may be submitted as entries by eligible players.

SPONSOR shall control the procedure for the second-chance drawings.

SPONSOR shall provide LICENSOR a detailed list of prizewinners after each drawing.

LICENSOR shall provide complete fulfillment of all merchandise and experiential prizes. Thereshall be no additional charge for any aspect of such order fulfillment.

From the date that LICENSOR is notified by SPONSOR of a winner of a Texans VIP Suite. Weekend prize, LICENSOR shall contact the winner within ten (10) business days to begin making

arrangements for fulfillment.

From the date that LICENSOR is notified by SPONSOR of a winner of a Team merchandise prize,LICENSOR shall complete fulfillment of the prize within ten (10) business days.

LICENSOR shall bear all risks of loss of or damage to the prize until the prize winner has received,inspected and accepted the units, at which point those risks shall pass to the prize winner. In the event thewinner's prize is damaged or defective, LICENSOR shall immediately replace the damaged prize at noadditional cost to SPONSOR or the prize winner.

LICENSOR shall provide a monthly list of fulfilled prizes to SPONSOR. The list shall include anaccounting of all merchandise/experiential prizes, including the names and addresses of the winners and theshipment tracking numbers. The list shall be provided in both .xls and .xml formats.

LICENSOR shall provide a monthly list of all experiential prizes that have been won but notfulfilled, with their scheduled fulfillment dates, if known.

SPONSOR has the right to monitor the fulfillment process and contact LICENSOR to discuss anyreported problems with fulfillment and request possible solutions.

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3. MARKETING SUPPORT

LICENSOR agrees to provide, at no additional cost, the following as Marketing Support to supportthe continued sales of the Game:

a. SPONSOR will receive the right to utilize the Team's Trademarks for the purposes ofcreating a Team branded scratch-off game throughout the state of Texas, as moreparticularly described in the Agreement.

b. SPONSOR will receive a 360 degree LED graphic display for one (1) minute of gametime per quarter on approximately 1230' of LED signage for Team pre- and regularseason home games ("Home Games") and all other events in Reliant Stadium fromAugust 1, 2009 to January 31, 2010, including the Texas Bowl (except for events thathave a policy of not displaying advertisements from state lotteries). LICENSOR willprovide related production/animation at LICENSOR's expense.

c. SPONSOR will receive two (2) :30 second 360 degree "Timeout" animations per half ateach Home Game. LICENSOR will provide related production/animation atLICENSOR's expense.

d. SPONSOR branding will be incorporated in the Texans Helmet Shuffle interactive videoboard feature. Immediately following the Helmet Shuffle, a joint SPONSOR andLICENSOR fan promotion will be featured on the Reliant Stadium video boards whereselected fans receive a package of prizes mutually agreed upon by LICENSOR and/orSPONSOR.

e. SPONSOR will be the exclusive sponsor of the "Texas Lottery Halftime Report" duringthe Texans' pre-season games aired on KTRK ABC-I3 (Houston) and affiliate stationsand will receive the following benefits:

I. Exclusive name and logo recognition as Halftime Report sponsor a minimum ofthree (3) times per broadcast, including a rebroadcast in Houston at midnight onthe day of the original game broadcast.

I. Second Quarter Stay-Tuned Tease

II. Beginning and End of Halftime Report.

II. Three (3) :30 second network commercial advertisements in each game broadcast- (Eighteen (18) total spots (original and re-broadcast combined), one (l) of thespots will be the first spot during the "Texas Lottery Halftime Report."

f. SPONSOR will receive one (1) :30 second commercial advertisement during each of thetwenty (20) broadcasts of Texans Inside the Game (Total of twenty (20) spots).

4

g. SPONSOR will receive the following advertisements on the three FS Houston shows(Texans Countdown on Sundays at 11:00 AM, Texans Wrap-up on Sundays at 11:00 PMand Texans Huddle on Thursdays at 6:30 PM):

1. One (1) :30 second commercial during each broadcast of the three (3) shows(Total of fifty-two (52) spots)

11. One (1) billboard during each broadcast of the three shows (Total of fifty-two(52) billboards)

Ill. One (1) mutually determined feature during the twenty (20) broadcasts on one (1)of the Texans shows on FS Houston (Up to twenty (20) features).

h. SPONSOR will receive the following during each Texans Gameday Broadcast:

I. Two (2) :30 second network commercials during the in-game portion of eachgame simulcast on KILT -AM (Houston) and KILT -FM (Houston) (two (2) spotsper station per game plus network distribution)

11. Two (2) :10 second network commercials during the in-game portion of eachgame simulcast

111. Two (2) Major SPONSOR Billboards during the in-game network portion of eachgame simulcast

IV. Sponsorship of one (l) in-game network feature based on availability

v. A five (5)-month rotating banner on the Texans Radio Network/Sports Radio 610(Houston) website, with hyperlinks to SPONSOR's website.

I. SPONSOR will receive two (2) :30 second spots in each Texans Hispanic GamedayBroadcast on KLA T La Tremenda 10 10 AM (Houston) (Total offorty (40) spots)

J. SPONSOR will receive a dedicated information page within the HoustonTexans.com siteto promote the Texans Scratch-off game and all prize details. LICENSOR will providerelated production/animation at LICENSOR's expense.

k. SPONSOR will receive one (1) rotating skyscraper ad throughout HoustonTexans.comwith a total of at least five (5) million unique impressions from August 1, 2009 throughJanuary 31,2010 (skyscraper ad size is 160W x 600H pixels).

1. SPONSOR will receive the following ticket packages to use as incentives for TexasLottery retailers to be used at the following two Team Home Games: Texans vs.Seahawks on December 13,2009 and Texans vs. Patriots on January 3,2010:

I. One hundred (100) lower- level tickets (Fifty (50) per game)

5

11. One hundred (100) Churrascos Club passes (Fifty (50) per game)

111. Fifty (50) VIP Parking Passes (Twenty-five (25) per game).

m. SPONSOR will receive the following Team merchandise to be utilized as marketingsupport for the Game:

1. One hundred and fifty (150) Team t-shirts.

II. One hundred and fifty (ISO) Team ball caps.

n. SPONSOR will receive a full page, four color ad in the following Team publications:

1. Texans Gameday Magazine

11. Texans Bulletin

111. Texans Gameday Playbook.

LICENSOR will ensure that lottery commercials pertaining to SPONSOR do not air on any stationsthat are not licensed to a location in the state of Texas.

Except as specifically noted above, SPONSOR shall provide to LICENSOR, at SPONSOR's ownexpense, the substantive television and radio content and production, and/or animation, necessary forinclusion in the above-referenced Marketing Support.

Notwithstanding anything contained herein to the contrary, SPONSOR shall not receive the aboveelements for Texans playoff games.

4. MERCHANDISE / EXPERIENTIAL PRIZE DESCRIPTIONS(awarded through second-chance drawings)

a) "Texans VIP Suite Weekend," valued at $40,000 each. Five (5) winners will be selected throughsecond-chance drawings, one per drawing. Prize will include:

1. Fourteen (14) tickets in a private Team Luxury Suite to a mutually determinedTeam home game in either the 2009 or 2010 NFL season including food and nonalcoholic beverages (menu determined by LICENSOR in its sole discretion)

11. Each winner (i.e., one (I) person) will receive the right to be in the Texans Tunnelduring the presentation of the Team starting line-ups

111. Texans Ambassador (retired NFL legend) will watch the game with the winner

IV. Round trip airfare for fourteen (14) for a winner outside of the Houston area(from nearest major international airport), or ground transportation for fourteen(14) for a winner within the Houston area, and one (1) night hotel

6

accommodations (single occupancy) for fourteen at The Westin Galleria (or other3-star or above hotel selected by LICENSOR) for the selected game

v. Fourteen (14) pre-game sideline passes

VI. Dinner for fourteen (14) at a high-end Houston restaurant selected by LICENSORthe evening prior to the game

Vll. Ground transportation throughout the weekend

Vlll. A Team merchandise gift bag consisting of a Team polo shirt, Team hat andTexans Power Towel.

b) Team Autographed Authentic Jersey from Team Star Player, valued at $400. Two thousand fourhundred and seventy-five (2,475) winners will be selected through second-chance drawings, fourhundred and ninety-five (495) per drawing. Prize will include:

I. An authentic Team jersey chosen by the winner and autographed by one of thefollowing three (3) Team's star players:

1. Andre Johnson2. Mario Williams

3. DeMeco Ryans

Notwithstanding the foregoing list, LICENSOR or SPONSOR reserves the right tosubstitute a different Texans player, subject to LICENSOR's and SPONSOR'sconsent, such consent not to be unreasonably withheld, conditioned, or delayed, ifany of the foregoing players are unable or unavailable to autograph the jerseys (e.g.,if the player is traded, injured, etc.), or cease to be a consistent starter.

11. Each jersey will be delivered to the winner's home address.

Ill. The prize will include a letter of authenticity from Team.

IV. SPONSOR agrees not to include the specific names of the players in anymarketing or other advertising materials related to the Game. However,SPONSOR shall be permitted to refer to the players as "Texans Star Players" orsuch other mutually agreed to description, and to refer to the specific players inthe context of legal agreements and official game procedures (e.g., in officialpostings on the Texas Register and through a link to the official game procedureson SPONSOR's website, pursuant to Texas Administrative Code section401.302).

7

V LIRIHX:tI

J!;XHJHJT A

HOUSTON TEXANS INTELLECTUAL PROPERTY GUIDELINES

The LICENSOR provides the following guidelines regarding the LICENSOR's intellectuallroperty .

• You may use the LICENSOR's intellectual property in connection with the promotion of the

Game as referenced in the Agreement. You may not use the LICENSOR's intellectual property

for any other purpose, including the sales of any merchandising or tie-in materials that mayfeature the LICENSOR's intellectual property, without express written consent ITom theLICENSOR.

• Use of the LICENSOR's intellectual property inures to the benefit ofthe LICENSOR, and you do

not acquire any rights in such intellectual property as a result of use allowed by the LICENSOR.

• The LICENSOR's intellectual property should be printed in accordance with the guidelines setout in Exhibit A-I.

• You should not alter, manipulate, blur, distort or otherwise modify the LICENSOR's intellectualproperty .

EXHIBIT A-I

Houston Texans Trademarks

v~/•• OUS ..•.ONTEXANS

\0/\\

* c,~"i••' "~.:ia.'1---J.-~~~ ..

HOUSTON TEXANS

antone Colors:

leep Steel Blue: 5395

:attle Red: 187

iberty White: no pantone

I-v .LUIIHX3

9 IT9THXJJ

EXHIBIT B

TEXAS LOTTERY COMMISSION INTELLECTUAL PROPERTY GUIDELINES

The SPONSOR provides the following guidelines regarding the SPONSOR'S intellectualproperty.

• You may use the SPONSOR'S intellectual property in connection with the promotion ofthe Game as referenced in the Agreement. You may not use the SPONSOR'S intellectual

property for any other purpose, including the sales of any merchandising or tie-inmaterials that may feature the SPONSOR'S intellectual property with express writtenconsent from the SPONSOR.

• Use of the SPONSOR'S intellectual property inures to the benefit of the SPONSOR, and

you do not acquire any rights in such intellectual property as a result of use allowed bythe SPONSOR.

• Please do not use "Lotto" or "Texas Lottery" as a substitute for a particular game name.

For example, "Lotto Texas" is the name of an on-line game, and is not interchangeablewith "Lotto" or "Texas Lottery". Use "Texas Lottery Commission" to describe thegovernmental entity.

• You should mark the SPONSOR'S intellectual property as shown in Exhibit B-1.

• The SPONSOR'S intellectual property sould be printed in accordance with the guidelinesset out in Exhibit B-2.

• You should not alter, manipulate, blur, distort or otherwise modify the SPONSOR'Sintellectual property.

• You should not "frame" the SPONSOR'S web site in the context of your own Internetweb site. (For example, a newspaper's web site should not frame the entire SPONSOR'S

web site in the context of the newspaper's web site, because of advertising and"preference" concerns.)

• The SPONSOR wishes to avoid association with alcohol and tobacco products.

Therefore, we prefer that our intellectual property not be directly placed next to the logoof such products.

EXHIBIT B-1

Frequently Used Texas Lottery Commission (TLC) Trademarks

Trademark

Texas Lottery®

OR

-TEXRS~LOTTERY

-TEXHSI.OTTERY

" ~.. j~' I '.'

CII,I\~ITI\BLE _oj ~~.~ (jr " I I l' I/"/ '"a ~

J ! ,I 'i .. 'i ~ ''Ou'I I) ",' 1/ ' II f",' ), £1.,.1",I ',!I-,l'\,\.':\ ,.".r,.

1\.'. ~'1""\' lIIiI!!"'''.

•

Notes

Use the symbol "®" with this word mark. Use the name "Texas LotteryCommission" to describe the governmental entity.

Use the symbol "®" with this logo.

Use the symbol "TM" with this logo.

TExns LOTiEnv

Lotto Texas®

••~(-~Miif'iPiiiS- •

"""-

Mega Millions®

Megaply®

Megaplier®

Mega-plier®


Use the symbol "®" with this word mark.


The State of Illinois has registered this word mark and has given the TLC

permission to use the mark in connection with the multi-state game. Usethe symbol "®" with this word mark.




When you buy, Megaply!® I Use the symbol "®" with this word mark.

TEXHS

Texas Two Step®

TEXHS LOTTEHY

Pick 3™

LOTTERY

Cash Five®




Use the symbol "TM" with this logo.

Use the mark symbol "TM" with this word mark.



Texas Lottery Daily 4™

.1 Use the symbol "®" with this logo.

Use the symbol "TM" with this word mark.

Texas Lottery Daily 4 with

Sum It Up ™

Daily 4™



Use the mark symbol "TM" with this word mark.

~~~. Use the symbol "@" witb this logo.

Sum It Up® Use the symbol "®" with this word mark.

IBAfCS-oFFS-11111 Llllln-

Scratch-Offs

Next Time, It Could beYou®

Play the Games of Texas®

It's a Whole New Ball

Game®

Maybe It's Your LuckyDay™


Do not use either the "TM" symbol or the "®" symbol in connection withthe words "Scratch-Offs".

Use the symbol "®"with this word mark.




TLC Logo Color SheetsEXHIBIT B-2

The TLC logo color sheets provide the color formulas for each logo, for three different application formats: one-color,spot color, and four-color. All TLC logos must be printed using the color specifications for each application. The intellectual property mark that appears with each logo must also be included. To determine which IP mark to use with text-onlylogo names, please refer to the Legal Division's "TLC Trademarks Chart," located on the intranet in the TLC Style Center.

The Publications and Graphics team maintains a library of TLC logos in a variety of formats to suit different media andpurposes. We will be happy to provide you with any of the logos upon request and can also assist in determining whichapplication to use for a particular job. Please contact a team member for assistance.

Spot Color/PMS:

Logos must be printed inthe approved PMS SPOT colors

for that logo.

The CMYK formulas used in each spotcolor logo match the most recentlyupdated Pantone Color Standards,which is the Pantone Color Bridge

edition. These formulas are for

reference only and should not beused when spot color is requested.

SPOT: PMS Color

2 Spot Color logo:

Four-Color/CMYK (or "Process"):

Logos must be printed inthe approved colors for that logo.

All four-color logos (except Mega Millions and the Texas Education logo)have CMYK formulas that are unique

to the Texas Lottery Commission.

These unique formulas arenot intended to match anyPantone Color Standards.

These unique formulas should alwaysbe used when four-color/CMYK,

or "process," printing is requested.

4C: CMYK (orIProcess")

CMYK formulas:

One-Color:

Logos must be printed inBLACK, WHITE, or the PMS color

approved for one-colorapplication of that logo.

1C: One Color

1C options:

PMS Process Black PC

C - 0M - 0Y - 0

K - 100

PMS123 PC

PMS123 PCC - 0M - 21Y - 88

K - 0

This particular logo consists of 9 colors,none of which are a specific spot color.CMYKformulas are as follows:

Black circle: 0.0.0.100Yellow circle: 0.5.100.0Cream circle: 0.5.18.0Blue circle: 30.0.0.0Green leaf: 95.24.100.10

Green berry: 20.0.25.0Leaf acorn (dark): 20.20.21.50Leaf acorn (light): 20.20.20.20Star (dark) & Ribbon: 0.20.75.0Star (light): 0.10.37.0

Black

C - 0M - 0Y - 0K - 100

PMS 280 PC

C - 100

M - 78Y - 5

K - 18

PMS8n~C - nM - DY - ~K - 16

SPOT: PMS Color 4C: CMYK (orIProcess") 1C: One Color

-TEXRS~OTTERY

1C options:

-TEXAS~OTTERY

CMYK formulas:

-TEXRSLOTTERY

PMS 150 PC

-TExnsLOTTERY

r --

~te .;~~~~;

,'-'tj.

2 Spot Color logo:

PMS 280 PC

C - 100

M - 78Y - 5

K - 18

PMS 150 PC

C - 0

M - 35Y - 70

K - 0

Lottery BlueC - 100

M - 80Y - 0

K - 30

Lottery OrangeC - 0

M - 40Y - 100

K - 0 White

SPOT: PMS Color 4C: CMYK (or"Process") 1C: One Color

.TEXAS LOTTERYCOMMI9Sl0N

:.TEXRS LOTTERY [OM MISSION

2 Spot Color logo:

.TEXRS LOTTERY [OM MISSION

CMYK formulas:

TEXRS LOTTERY COMMISSION

PMS 123 PC IIBingo Blue

I

1C options:r-PMS 300 PCPMS 123 PC Bingo BlueBingo Yellow

C - 100C -0 C - 100C -0

M - 42M - 21 M - 43M - 30

Y -0 Y - 88 Y -0 Y - 94

K -0 K -0 K -0 K -0 IIBlackIIWhite

SPOT: PMS Color 4C: CMYK (or "Process") 1C: One Color

TEXHS LOTTERY

CMYK formulas:

".

TEXRS LOTTERY

2 Spot Color logo:

T E X H SLOTTERY

PMS 123 PC I

ILotto Red

II LottoYellow II1C options:

PMS 215 PC

PMS 123 PC,

Lotto RedLotto YellowC -

5 C -0 C -0 C -0M - 100

M - 21 M - 94M - 30Y - 26

Y - 88 Y - 34Y - 94IBlackIIWhiteK - 24

K -0 JK - 27K -0

TEXRS LOTTERY


. ~TexaS$~'":TWO.Step 0"

• -.LOTTERYTEXRS

· f

~

:&miLOTtERY IT E X R S

2 Spot Color logo: CMYK formulas: 1C options:

White

PMS 2738 PC PMS 485 PCTXTwoStep BlueTXTwoStep RedC - 100

C -0 IC - 100

C -0M - 84

M - 93 M - 79M - 100Y -

0 Y - 95,Y -

0 Y - 91K -

2 K -0IK -0 K -0

SPOT: PMS Color 4C: CMYK (orIProce55") 1C: One Color

White

1C options:4 Spot Color logo: CMYK formulas:

PMS 2685 PC •

• PMS'44PC

Daily 4 Daily 4C - 92

C - 0Purple OrangeM - 100

M - 52C -92 C -0Y - 0

Y - 100M - 100 M -52K - 10

K - 0Y -0 Y - 100K -

10 K -0

12685 PCII 144 PC I

PMS 123 PC

PMS 340 PCDaily 4 Daily4C -

0 C - 100Yellow GreenM - 21

M -0C -0 C - 100Y - 88

Y -74M -30 M -0K -

0 K -0Y - 94- Y -69PMS

K -0Daily 4 K -15123 PC

Yellow

SPOT: PMS Color 4C: CMYK (or lip race55") 1C: One Color

White

1C options:

T E X," ~s,I. 0 T T E." Y

T E X," ~s,I. 0 T T E. R Y

Pick3

Yellow

C - 0

M - 30

Y - 94

Pick 3 I K - 0Yellow

CMYK formulas:

TEXRS.~OTTERY<If ••

Pick 3

Green

C - 100

M - 0Y - 69

K - 15

Pick 3

PurpleC - 92

M - 100

Y - 0

K - 10

PMS 123 PC

C - 0

M - 21

Y - 88

K - 0

PMS123 PC

TEXRS .~OTTERY. - .

4 Spot Color logo:

PMS 340 PC

C - 100

M - 0Y - 74

K - 0

PMS 2685 PC

C - 92M - 100Y -

0

K - 10


QP I ~B3QD~r

0nm~t!n~rI 0nm~~ I ~&QU1I' ~&QU1I'

White

1C options:4 Spot Color logo: CMYK formulas:

PMS 268S PC •

• PMS340PC ,

Sum It UpSum It UpC - 92

C - 100 ,Purple Green

M - 100

M - 0C -92 C - 100

Y - 0

Y - 74M - 100 M -0

K - 10

K - 0Y -0 Y -69

K -

10 K -15

12685 PCII 340 PC I I

PMS 123 PC

Sum It UpC -

0 Yellow

M -

21 C -0

Y -

88

,

M -30

K -

0- Y -94PMS

K -0IsumltUP123 PC

Yellow

.~~~

-IEIIS L.IIEU-SCPMCH-Crrs

1C: One Color

-IE liS LDIIEI'-SCRATCH-crrs-1£11$ LIIHI'-

SCRATCH-Drrs

CMYK formulas:

4C: CMYK (orIProcess")

-1£11$LIII£II-SCDATCD-Drrs

2 Spot Color logo:

SPOT: PMS Color

PMS 300 PC PMS 361 PCScratch-Off BlueScratch-Off GreenC - 100

C - 75 C - 100C - 76

M - 42

M -0 IM - 43M -0

y -0 Y - 100

,Y -0 Y - 91

K -

0 K -0 K -0 K -01C options:

White


••

TEXAS L.OTTERY

2 Spot Color logo:

TEXAS L.OTTERY

CMYK formulas:

TExns I.OTTEny

PMS 376 PCCash Five

Green

TExns I.OTTEny

1C options:PMS 267 PC

C - 86M - 96Y - 0

K - 0

PMS 376 PC

C - 53

M - 0Y - 96

K - 0

CashFive PurpleC - 94M - 94Y - 0

K - 0

CashRve Green

C - 56M - 0Y - 100

K - 0

White

SPOT: PMS Color 4C: CMYK (or"process")I1C: One Color

~ TEXRS .••• LOTTERY

~(~HY\\•• \~ .:..

\.~- I~ I ....

. i.....~tt~ ..",Iii,,'!'!"))-

~ r MfSAPUfB I -~4 Spot Color logo:

ICMYK formulas:I

1C options:

Same formulas for Spot & CMYK. PMS 2738 PC

PMS 485 PCC

- 100 C-0M - 84

M - 93Y

-0 y- 95K

-2 K-0

PMS 108 PC

PMS 430 PCC

-0 C- 33M -

6 M -18Y

- 95 Y-13

PMS 108 PC I

I PMC:;4~O PI IIK-0 K- 37


-TEXRS- (~~l.OTTERY ~"'ore Tha"

<;UPPOI~TS $11'f~xA~ billion

EDOGA nON S;IIC~ 1~97

-TEX RS- (@&'"l.OTTERY ~~<;UPPOI~TS . or. Tha"

'f~XAS b~~lr D"GA riON sl"lonI; V liCe 1997

4 Spot Color logo: ICMYK formulas:I

1C options:

Same formulas for Spot & CMYK. PMS Process Black PC

PMS 146 PCC

-0 C-7M

-0 M-55

Y

-0 y- 100K

- 100 K-34

PMS 361 PC

PMS 485 PCC

-75 C-0M

-0 M-93

Y

- 100 Y-95

K

-0 K-0

J IIHIHX3

2009 RESOLUTION BV-I

Whereas. Article IX (Prohibited Conduct), Section 9.1(C)(6) of the Constitution andBylaws of the National Football League governs commercial relationships between Clubs andstate and municipal lotteries; and

Whereas, Clubs are permitted under certain circumstances to accept general advertisingfor state and municipal lotteries including, without limitation, stadium sign age and advertisingwithin all Club-controlled media, and many Clubs have done so; and

Whereas, Clubs are prohibited from commercial involvement with a state or municipallottery that (a) in any way involves a Club affiliation with or endorsement of the lottery, or (b)includes promotion of any lottery game having a sports theme; and

Whereas, scratch-off lottery tickets bearing third party brands and sold at retail locationsthroughout the state are a growing and important source of revenue for many states; and

Whereas, other major professional sports leagues, teams and entertainment entities havesuccessfully licensed the use of their marks and logos on various state-issued scratch-off lotterytickets on a state-wide basis; and

Whereas, the NFL Business Ventures Committee has determined that permitting Clubs toenter into sponsorship agreements with state and municipal lottery organizations and tootherwise authorize the use of Club marks and logos in connection with the creation andmarketing of scratch-off lottery tickets could provide additional funding for state and municipalinitiatives such as education and infrastructure development (potentially including stadiumdevelopment), as we]) as result in incremental revenue for the participating Clubs; and

Whereas, to ensure that any such activities remain consistent with long-standing Leaguepolicy against advertising or promotional activities by Clubs that can reasonably be perceived asconstituting affiliation with or endorsement of gambling or gambling-related activities, it isappropriate to set forth specific parameters within which Clubs may affiliate themselves withstate and municipal lottery games and organizations, and to provide for certain continuedoversight by the League Office;

Be it Resolved, that effective immediately,

1. Any provision of the Constitution and Bylaws of the National Football Leaguenotwithstanding, the Commissioner in consultation with the Business Ventures Committee shalldetennine whether and under what parameters Clubs may enter into commercial relationshipsinvolving state and municipal lottery games and organizations.

2. The term "performance in" as used in Article IX , Section 9.1 (C)(6) of theConstitution and Bylaws of the National Football League and in this Resolution shall be definedto include, without limitation, points scored, margins of victory, timing of scores, yards gained,or any other current or future recognized measure of team or individual performance in any NFLgame or other actual sporting event.

3. Through June 1,2011 only, any other provision of the Constitution and Bylaws ofthe National Football League notwithstanding, Clubs shall be permitted to engage in commercialarrangements with state and municipal lotteries provided that the lottery organization does notoffer any lottery game (with or without Club Marks) or betting scheme based on the outcome ofor any perfonnance in any NFL game or in any other actual sporting event, as follows:

(i) Each Club may authorize the use within such Club's Lottery MarketingArea (as defined below) of its trademarks and logos ("Club Marks") in connection withthe marketing and promotion of any state or municipal lottery game distributed within itsLottery Marketing Area, provided that Clubs shall not authorize the use of theirrespective Club Marks in connection with any advertising or promotional materials that.,in the Commissioner's judgment, could reasonably create the impression ofa Clubaffiliation with or endorsement of gambling or gambling-related activities (e.g., a lotterygame based on the outcome of or performance in any NFL game); and

(ii) Each Club may provide experiential and other prizing for use in connectionwith any state or municipal lottery game distributed within its Lottery Marketing Area,provided that such experiential and other prizing is not used, marketed, or promoted inany manner that, in the Commissioner's judgment, might reasonably be perceived asconstituting an affiliation with or endorsement of any state or municipal lottery game byany coach. player or other Club employee (and such individuaJs continue to be prohibitedfrom participating in any advertising or promotion of any lottery game or organization);and

(iii) Each Club may authorize the use of its Club Marks on scratch-off gametickets for any state or municipal lottery game distributed within such Club's LotteryMarketing Area, provided that (a) all such game tickets are submitted to and approved inadvance in writing by the League Office, and (b) such game tickets are not designed,marketed or promoted in such a way that, in the Commissioner's judgment, they couldreasonably be perceived as being based on the outcome of or performance in any NFLgame orin any other actual sporting event; and

(iv) The foregoing notwithstanding, all marketing and promotional activities 'within a Club's Lottery Marketing Area shall be subject to the provisions of2004Resolution BV -4, provided that, for the avoidance of doubt, Clubs shaH not be prohibitedfrom authorizing the sale at retail of their Club-themed scratch-off lottery tickets withinany other Club's Home Territory within such Club's Lottery Marketing Area.

4.include:

For purposes of this Resolution, each Club's Lottery Marketing Area shall

(i) The entire State in which the city for which the Club holds a franchise islocated (the "Home State"), provided that where two or more Clubs share a Home State,each Club shall have equal rights under this Resolution within such State; and

(ii) The entirety of any other States within which any portion of such Club'sHome Territory is located ("Adjacent States"), but excluding any other Club's Home

2

State and provided that where two or more Clubs share any Adjacent States, each Clubshall have equal rights under this Resolution within such Adjacent States; and

(iii) The foregoing notwithstanding, the Baltimore Ravens and the WashingtonRedskins shaH have equal rights under this Resolution within the entire state ofMaryland, excluding the District of Columbia which shall be exclusively within theLottery Marketing Area of the Washington Redskins.

5. Any agreement that a Club desires to enter into with a state or municipal lotteryorganization or any other third party in connection with the rights addressed in this Resolutionmust (i) be submitted to the League Office for prior written approval, (ii) incorporate a provisionexpressly providing that the agreement is subj ect to the rules and policies of the NationalFootball League, as such may be amended from time to time, including, without limitation, theterms of this Resolution . .<iii)not prohibit or in any way limit the state or municipal lotteryorganization from conducting a scratch-off lottery game in conjunction with any other Club insuch Home State, and (iv) expire by its terms no later than June 1,2011.

6. The League, directly and/or through one or more entities collectively owned bythe Clubs (e.g., NFL Ventures, NFL Enterprises, NFL Properties, NFL International, and NFLProductions) (the «League Affiliates"), shall retain exclusive control over (i) the use of any

. trademarks owned by the League (e.g., NFL Shield, "Super Bowl") or any League Affiliate" ,("League Marks"), in connection with any state, municipal, or regional lottery game ororganization, (ii) collective use of Club Marks, in connection with any state, municipal, orregional lottery game or organization, (iii) the use of two or more Club's Club Marks inconnection with any lottery game or organization within the United States and either (a) outsideof all Clubs' Lottery Marketing Areas, or (b) in any regional lottery involving multiple LotteryMarketing Areas, and (iv) the use of Club Marks in connection with any lottery game ororganization in all locations outside of the United States. No Club may license or use LeagueMarks or any other Club's Club Marks, nor permit a third party to use any of its Club Markstogether with the Club Marks of any other Club, in connection with any state or municipal lotterygame or organization, except that where two or more Clubs have equal rights within any portionof their respective Lottery Marketing Area under this Resolution, such Clubs may mutuallyauthorize the use of their respective Club Marks together within such joint marketing area inconnection with the activities contemplated under this Resolution.

7. Any modifications to or extensions of this Resolution, as well as any additionalpolicies or rules developed to implement this Resolution shall be established by theCommissioner in consultation with the Business Ventures Committee.

8. Clubs shall cooperate with the League Office and League Affiliates as may bereasonably necessary to carry out the terms of this Resolution including the protection of theLeague and C1ub brands and the provision of all information requested for the League Office toproperly evaluate the lottery business during the term of this Resolution. Without limitation, allClubs shall provide to tbe League Office upon request (i) complete copies of any and allagreements entered into by such Club with any state or municipal lottery organization or anyother third party in connection with any of the activities contemplated under this Resolution(e.g., advertising agreements, sponsorship agreements, agreements for the use of Club Marks on

3

scratch-off lottery tickets), (ii) samples of aU marketing and promotional materials created inconnection with the activities contemplated under this Resolution, and (iu) all requested financialinfom1ation regarding rights fees and other revenue generated by such Club in connection withthe activities contemplated under this Resolution.

9. Failure to comply with the tenns of this Resolution or any related policies or rulesshall subject the offending Club to the penalties set forth in Section 13 (Violations; Sanctionsand Penalties) of 2004 Resolution BV-4.

10. Absent further action by the Commissioner in consultation with the BusinessVentures Committee, the additional rights granted to the Clubs pursuant to Sections 3 and 4 ofthis Resolution shall expire on June 1,2011. The League Office will monitor and report on theimplementation of this Resolution no later than the Annual League Meeting in 2011.

Reason and Effect:

VOTE

For .Against. .Abstain .Absent. .

To authorize Clubs to enter into sponsorship agreementswith state and municipal lottery organizations and tootherwise license the use of Club Marks and logos inconnection with the creation and marketing of scratch-offlottery tickets pursuant to the parameters specified.

Proposed by: Business Ventures Committee

DISPOSITION

4

a IIHIHX:tl

§ 466.155. DENIAL OF APPLICATION OR SUSPENSION OR REVOCATIONOF LICENSE. (a) After a hearing, the director shall deny an application for a license orthe commission shall suspend or revoke a license if the director or commission, asapplicable, fmds that the applicant or sales agent:

(1) is an individual who:(A) has been convicted of a felony, criminal fraud, gambling or a

gambling-related offense, or a misdemeanor involving moral turpitude, if less than 10years has elapsed since the termination of the sentence, parole, mandatory supervision, orprobation served for the offense;

(B) is or has been a professional gambler;(C) is married to an individual:

(i) described in Paragraph (A) or (B); or(ii) who is currently delinquent in the payment of any state

tax;

(D) is an officer or employee ofthe commissionor a lottery operator; or

(E) is a spouse, child, brother, sister, or parent residing as amember of the same household in the principal place of residence of a person describedby Paragraph (D);

(2) is not an individual, and an individual described in Subdivision (1):.(A) is an officer"ordirector of the applicant or sales agent; .(B) holds more than 10 percent of the stock in the applicant or

sales agent;

(C) holds an equitable interest greater than 10 percent in theapplicant or sales agent;

(D) is a creditor of the applicant or sales agent who holds morethan 10 percent of the applicant's or sales agent's outstanding debt;

(E) is the owner or lessee of a business that the applicant or salesagent conducts or through which the applicant will conduct a ticket sales agency;

(F) shares or will share in the profits, other than stock dividends,of the applicant or sales agent; or

(G) participates in managing the affairs of the applicant or salesagent;

(3) has been finally determined to be:(A) delinquent in the payment of a tax or other money collected

by the comptroller, the Texas Workforce Commission, or the Texas Alcoholic BeverageCommission;

(B) in default on a loan made under Chapter 52, Education Code;or

(C) in default on a loan guaranteed under Chapter 57, EducationCode;

(4) is a person whose location for the sales agency is:(A) a location licensed for games of bingo under Chapter 2001,

Occupations Code;(B) on land that is owned by:

(i) this state; or(ii) a political subdivision of this state and on which is

)cated a public primary or secondary school, an institution of higher education, or angency of the state; or

(C) a location for which a person holds a wine and beer retailer'sermit, mixed beverage permit, mixed beverage late hours permit, private club~gistration permit, or private club late hours permit issued under Chapter 25,28,29,32,r 33, Alcoholic Beverage Code; or

(5) has violated this chapter or a rule adopted under this chapter.(b) If the director proposes to deny an app.licationfor a license or the commission

roposes to suspend or revoke a license under this section, the applicant or sales agent isntitled to written notice of the time and place of the hearing. A notice may be served onn applicant or sales agent personally or sent by certified or registered mail, return receiptequested, to the person's mailing address as it appears on the commission's records. Alotice must be served or mailed not later than the 20th day before the date of the hearing.'he commission shall provide for a formal administrative hearings process.

(c) At a hearing, an applicant or sales agent must show by a preponderance of thevidence why the application should not be denied or the license suspended or revoked.

(d) The director shall give an applicant or sales agent written notice of a denial ofn application or a suspension or revocation of a license.

(e) The director may not issue a license to a person who has previously had alcense under this chapter revoked unless the director is satisfied the person will complyI'ith this chapter and the rules adopted under this chapter. The director may prescribe the~rmsunder which a suspended license will be reissued.

(f) The director may not issue a license to an applicant who fails to certify to thelirector the applicant's compliance with the federal Americans with Disabilities Act of990 (42 U.S.C. Section 12101 et seq.).

(g) For purposes of Subsection (a)(3), the comptroller, Texas Workforce~ommission, Texas Alcoholic Beverage Commission, Texas Higher Education~oordinating Board, and Texas Guaranteed Student Loan Corporation shall each providehe executive director with a report of persons who have been finally determined to belelinquent in the payment of any money owed to or collected by that agency. The:ommission shall adopt rules regarding the form and frequency of reports under thisubsection.

tdded by Acts 1993, 73rd Leg., ch. 107, § 4.03(b), elf Aug. 30,1993. Amended by Acts'995, 74th Leg., ch. 76, §6.21, elf Sept. 1,1995; Acts 1995, 74th Leg., ch. 696, §1, elf.ept. 1, 1995; Acts 1997, 75th Leg., ch. 1275, §51, elf Sept. 1, 1997; Acts 2001, 77th:eg., ch. 394, § 1, elf Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1420, § 14.760, elf Sept.',2001.

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