Sample Sponsorship Agreement - Davis LLP

[NOTICE: This document was prepared in January 2013 by Bill Hearn of Davis LLP with the assistance of 

articling student Sebastian Talluri. It has been provided to registrants of the Canadian Institute’s 19 th Annual 

Advertising & Marketing Conference held in Toronto on January 23-24, 2013 for discussion purposes only. This 

document is a “sample” sponsorship agreement intended only to illustrate some of the provisions that may be 

found in such a contract. It is not intended, and should not be relied on, as a “model” or “precedent”. 

Fact-specific legal advice should be obtained when documenting a sponsorship.] 

SPONSORSHIP AGREEMENT 

BETWEEN: 

SponsorCo Inc. 

123 Greentree Drive 

Somewhere, Ontario A1B 2C3 

(“Sponsor”) 

AND 

XYZ Co. 

456 Hill Street 

Somewhere, Ontario X4Y 5Z6 

(“Sponsee”) 

RECITALS 

A. Sponsee owns and operates the venue known as the “XYZ Pavilion” located in Somewhere, 

Ontario (“Venue”) for the purpose of exhibiting certain entertainment, cultural and sporting 

events; and 

B. Sponsor wishes to acquire and make use of certain sponsorship rights from Sponsee on the 

terms and conditions set forth in this Agreement. 

FOR VALUE RECEIVED, the parties agree as follows: 

1. Rights 

Subject to the terms and conditions of this Agreement, and subject to the performance by 

Sponsor of its obligations under this Agreement, Sponsee will provide to Sponsor, during 

the Term, the sponsorship rights described in Appendix A (the “Rights”). 

2. Term and Termination 

1.1 This Agreement shall be in effect for a five year period beginning on January 1, 2013 

(the “Effective Date”) and ending on December 31, 2017 (the “Term”). 

1.2 Either party may (without prejudice to its other rights or remedies) terminate this 

Agreement with immediate effect by notice in writing to the other party if: 

See “NOTICE” at top of page 1. For comments or questions, please contact Bill Hearn at bhearn@davis.ca

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2. Fee 

(a) the other party defaults in the due performance of any obligation under this 

Agreement and the defaulting party has not remedied such default within thirty days of 

receiving a written notice of that default by the non-defaulting party; or 

(b) in respect of the other party, an interim order is applied for or made, or a voluntary 

arrangement approved, or a petition for a bankrupcty order is presented or a bankruptcy 

order is made, or a receiver or trustee in bankruptcy is appointed in respect of the other 

party or a voluntary agreement or arrangement is approved or entered into, or an 

administration order is made, or a receiver or administrative receiver is appointed over 

any of the other party’s assets or an undertaking or a resolution or petition to wind up the 

other party is passed or presented (other than for the purposes of amalgamation or 

reconstruction) or if any circumstances arise which entitle the court or a creditor to 

appoint a receiver, administrative receiver or administrator or to present a winding-up 

petition or make a winding-up order. 

1.3 In the event of a material breach or default under this Agreement, the aggrieved party 

shall provide written notice to the other party setting forth the particulars and the nature 

of the alleged breach or default, and if such breach or default is not cured within thirty 

days following such notice, the aggrieved party may terminate this Agreement without 

prejudice to any other remedy it may have. 

1.4 Upon termination or expiry of this Agreement, any sponsorship rights granted to 

Sponsor under this Agreement shall be rescinded, including any licenses relating to the 

use of Sponsee’s trade-marks and logos. 

For the Rights during each full year of the Term, Sponsor shall pay Sponsee a fee (the 

“Fee”) of one hundred and twenty thousand dollars ($120,000). This fee does not include 

any applicable taxes, the production costs outlined in Section 7, or the value-in-kind 

contribution worth fifteen thousand dollars ($15,000) provided to Sponsee by Sponsor as 

further described in Appendix B. 

3. Payment 

3.1 Provided that Sponsee is not in default of its obligations under this Agreement, the Fee 

will be payable to Sponsee in equal monthly instalments during each year of the Term. 

3.2 The production costs as outlined in Section 7 will be payable by Sponsor to Sponsee in 

one annual instalment on September 1 st during each year of the Term. 


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4. Taxes 

Any municipal, provincial or federal taxes, presently applicable or instituted during the 

Term, in respect of the Rights, will be paid by Sponsor, except for any taxes payable on 

Sponsee’s net income. 

5. Responsibilities 

5.1 Sponsor is exclusively responsible for the content of its advertising displayed at the 

Venue and the material must meet the requirements outlined and supplied by Sponsee as 

described in Appendix D. 

5.2 The content of all advertising making use of the Rights must be submitted to Sponsee 

for approval before production. Such approval shall not be unreasonably withheld or 

delayed. If Sponsee fails to make any comments within seven days of submittal by 

Sponsor, such content shall be deemed to have been approved by Sponsee. 

5.3 Sponsee shall display all of Sponsor’s advertising as contemplated under this 

Agreement at all [Specify.] events at the Venue during the Term. 

6. Representations and Warranties 

During the Term, Sponsee represents and warrants to Sponsor as follows: 

6.1 Sponsee has obtained or will obtain all regulatory approvals, licenses, agreements, 

representations, and warranties necessary in order for Sponsee to carry out its 

obligations under this Agreement. 

6.2 Except as expressly set forth in Section 9 of this Agreement, Sponsee has not entered 

and will not enter into any agreements that would conflict with the rights granted to 

Sponsor under this Agreement. 

6.3 Sponsee has the legal ability to grant all rights granted to Sponsor under this Agreement, 

with no further action necessary by Sponsor. 

6.4 Sponsor’s exercise of any and all rights granted under this Agreement shall not infringe 

the intellectual property rights of any third party. 

7. Production Costs 

Sponsor will provide Sponsee with the layout of its advertising according to Sponsee’s 

specifications and deadlines. Sponsee will be responsible for one creative production (with 

concept supplied by Sponsor and completed by Sponsee) in each year of the Agreement 

and will submit a copy of the visual to Sponsor for approval before production. 


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Breakdown of Annual Cost 

Production For 

[Specify - e.g., entrance signage.] 

Annual Cost 

Sponsor shall pay such costs within thirty days of receiving an invoice from Sponsee. All 

production costs charged to Sponsor are on a most-favoured-nations basis with all other 

sponsors, and should any sponsor pay less than Sponsor for similar services, the price of 

such service will be reduced accordingly. 

8. Force Majeure and Impairment of Sponsorship Rights 

8.1 Neither party shall be in breach of this Agreement if the performance by that party of 

any of its obligations under the Agreement is prevented due to a cause beyond the 

party’s reasonable control, including but not limited to acts of God, civil unrest, war, 

fire, accidents, explosions, and labour disputes (each a “Force Majeure Event”). The 

inability of either party to pay any amount owing under the Agreement shall not 

constitute or be deemed to be an event beyond the reasonable control of such party. 

8.2 To the extent that the Rights and Sponsor’s ability to exercise the Rights are impaired by 

a Force Majeure Event, Sponsee shall reduce the amount payable for such advertisement 

and/or signage calculated on a pro rata basis as determined by reference to the per event 

fee deduction formula set forth in Appendix E. If, at the time such reduction is 

calculated, Sponsor has made full payment of the amounts due for that particular year as 

set forth in this Agreement, Sponsee shall immediately provide Sponsor with a refund of 

the calculated amount or, at Sponsor’s sole option, apply the reduction to the subsequent 

year fee apportioned to such rights. 

9. Third Party Commitments 

Notwithstanding any other provision of this Agreement to the contrary, this Agreement 

shall in all respects be subject to and subordinate to any broadcasting agreements between 

Sponsee and any third parties (“Network Agreements”). Without limitation, Sponsee 

may, as required by the terms of any Network Agreements, pre-empt any and all of 

Sponsor’s advertising and or signage in the Venue and may cover or remove such 

advertisement and/or signage displayed during any event. Except as identified above, 

Sponsee shall not be permitted to cover, remove or substitute Sponsor’s advertising and/or 

signage with any other product advertisements, including in particular from Sponsor’s 

competitors. In the event that such advertisements and/or signage is covered, removed or 

otherwise unavailable for Sponsor due to such Network Agreements, Sponsee shall reduce 


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the amount payable for such advertisement and/or signage calculated on a pro rata basis as 

determined by reference to the per event fee deduction formula described in Section 8.2 

above. If, at the time such reduction is calculated, Sponsor has made full payment of the 

amounts due for that particular year as set forth in this Agreement, Sponsee shall 

immediately provide Sponsor with a refund of the calculated amount or, at Sponsor’s sole 

option, apply the reduction to the subsequent year fee apportioned to such signage. 

10. Right of First Refusal and Exclusive Negotiation Period 

Sponsor shall benefit from a one-time right of first refusal for renewing this Agreement at 

its expiry. Sponsee shall submit the terms and conditions of its renewal proposal no earlier 

than November 1, 2017 (or such other date as agreed between the parties) and Sponsor 

shall have ninety days from the date of receipt of such proposal within which to accept, 

reject, or renegotiate the terms of the proposal. During such ninety day period, Sponsee 

shall not negotiate with any of Sponsor’s competitors with the intention of entering into a 

similar sponsorship agreement. 

11. Exclusivity and Preferred Supplier Status 

11.1 Sponsor shall have exclusivity with respect to advertising and promotion during all 

events held at the Venue during the Term in the ABC product category, excluding 

[Insert any carve-outs from the category.] 

11.2 In addition, Sponsee acknowledges and agrees that certain companies are significant 

competitors of Sponsor, and Sponsee shall not, during the Term, license to any such 

third party the right to use any Sponsee trade-marks and logos in connection with the 

advertisement and promotion of products or services that are competitive with any 

product or service provided by Sponsor. Such companies include but are not limited 

to [Insert list of competitors.]. 

11.3 Sponsee grants to Sponsor the status of preferred supplier of Sponsee for Sponsee’s 

ABC product needs. The term “preferred supplier” means that Sponsee will 

purchase all ABC products from Sponsor as long as the required products identified 

in Appendix C are available. Sponsor will make its products available to Sponsee at 

the preferred pricing appearing in Appendix C. Notwithstanding the foregoing, 

Sponsor will provide Sponsee with a value-in-kind contribution worth fifteen 

thousand dollars ($15,000) as further described in Appendix B during the Term. 

12. Indemnification 

Sponsee shall indemnify and hold harmless Sponsor from and against any loss, damage, 

claim, proceeding, or expense (including reasonable legal expenses) suffered by or made 

against Sponsor arising from or in connection with any breach of Sponsee’s 


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representations and warranties under Section 6. 

13. Insurance 

Sponsee shall procure and maintain, at its own expense, third party public liability and 

property damage insurance in an amount of not less than $5 million per occurrence for 

third party personal injury (including death) and property damage caused by or arising out 

of this Agreement. Such insurance shall contain a cross-liability clause and name Sponsor 

as an additional insured. 

14. Assignment 

This Agreement may not be assigned in whole or in part by either party without the express 

prior written consent of the other party, such consent not to be unreasonably withheld. 

15. Choice of Law 

This Agreement shall be construed and enforced in accordance with the laws of the 

Province of Ontario and the laws of Canada applicable therein and shall be treated in all 

respects as an Ontario contract. 

16. Confidentiality 

Each party shall keep confidential the details of this Agreement together with all 

confidential information concerning the business and affairs of the other party which may 

come into its possession during the performance of its obligations under this Agreement. 

Neither party will reveal the content of this Agreement or any other confidential 

information without the express prior written consent of the other party. 

17. Limitation of Liability 

In no event shall either party be liable to the other for any special, incidental, indirect or 

consequential damages, arising from any cause whatsoever including negligence (even if 

the party has been advised of or foresees a possibility of any such damages occurring) 

including, but not limited to, lost business revenue, or for any other commercial or 

economic loss of any kind, or any claim by any other party. 

18. Entire Agreement and Amendment 

This Agreement contains the entire understanding between the parties relating to its subject 

matter and supersedes all prior and related oral and written understandings, arrangements 

and agreements. Any amendment to this Agreement must be writing and signed by both 

parties. 


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19. Relationship of the Parties 

This Agreement does not constitute either party the agent of the other, or create a 

partnership, joint venture or similar relationship between the parties, and neither party shall 

have the power to obligate or bind the other party in contract, in tort or otherwise 

howsoever except as provided in this Agreement. 

20. Notice 

Any notice, approvals or consents that may or are required to be given by one party 

according to the terms of this Agreement shall, unless specifically provided, be in writing 

and shall be delivered personally or transmitted by fax to the addresses first above written. 

Any notice delivered personally or transmitted by fax to the party to whom it is addressed 

as provided in this Section shall be deemed to have been given and received on the day it is 

transmitted by fax or so personally delivered to the person designated above, provided that 

if such day is not a business day then the notice shall be deemed to have been given and 

received on the business day next following such day. 

21. Waiver 

No waiver of any provision of this Agreement shall constitute a waiver of any other 

provision nor shall any waiver of any provision of this Agreement constitute a continuing 

waiver unless otherwise expressly provided. 

22. Severability 

Each of the provisions contained in this Agreement is distinct and severable and a 

declaration of invalidity or unenforceability of any such provision by a court of competent 

jurisdiction shall not affect the validity or enforceability of any other provision of this 

Agreement. 

23. Enurement 

This Agreement shall enure to the benefit of and be binding upon the parties and their 

respective personal representatives, executors, administrators, successors and permitted 

assigns. 

24. Survival 

Any obligations to maintain confidentiality, any financial obligations required to be 


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performed as of the expiry or termination of this Agreement, and any indemnification 

obligations, shall survive the expiration or termination of this Agreement. 

EXECUTED as of the Effective Date by each party’s duly authorized representative. 

SPONSOR 

SPONSEE 

By: 

I have the authority to bind Sponsor 

Date: 

By: 

I have the authority to bind Sponsee 

Date: 


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APPENDIX A 

SPONSORSHIP RIGHTS GRANTED TO SPONSOR BY SPONSEE 

• The exclusivity, status and sponsorship rights granted to Sponsor are conditional on 

Sponsor making payments in accordance with this Agreement. 

• Sponsor may advertise itself as the “Official Partner of XYZ” or “Official Supplier of XYZ” 

and has the right to use Sponsee trade-marks, logos and imagery in Sponsor’s advertising 

during the Term. Such advertising may be used on Sponsor advertising campaigns or with 

third parties that are partners of Sponsee. 

• Such advertising shall also be subject to prior approval by Sponsee and shall comply with 

all requirements and guidelines established by Sponsee and detailed in Appendix D. 

Furthermore, such advertising rights shall be limited to an area equal to the city of 

Somewhere, Ontario and a 150 km radius extending from the city limits. 

[Insert details of sponsorship rights here, such as placement of advertisements at the Venue, 

any Internet advertising rights, special Sponsor booths, other perks (e.g., event tickets), etc.] 


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APPENDIX B 

VALUE-IN-KIND PROVIDED BY SPONSOR TO SPONSEE 

• Sponsor will provide Sponsee with a one time value-in-kind contribution of fifteen 

thousand dollars ($15,000) that shall be made by December 31, 2013. 

• The value-in-kind shall be used by Sponsee to [Insert purpose.] and the value shall be 

based on the price list submitted by Sponsor and attached as Appendix C. Any product 

required over and above the amount of the value-in-kind agreed to under this Agreement 

shall be purchased according to the price list attached as Appendix C. 


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APPENDIX C 

SPONSOR PRICE LIST – PREFERRED PRICING OFFERED TO SPONSEE 

Pricing will remain intact for identified products as long as such products continue to be offered by 

Sponsor generally. Pricing of all other products will be based on market rates and is subject to 

change from time to time without notice. 

[Insert price list.] 


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APPENDIX D 

SPECIFICATIONS AND REQUIREMENTS FOR RIGHTS 

These specifications and guidelines may be altered from time to time by Sponsee. Sponsor will be 

duly informed when such changes occur. 

[Attach specifications and trade-mark usage guidelines.] 


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APPENDIX E 

PER EVENT FEE DEDUCTION FORMULA 

Breakdown of amounts should Sponsor advertisings be covered, removed or otherwise 

unavailable during the Term: 

Property Item Per event fee 

deduction 

formula 

Pro-rated amounts per event

Sample Sponsorship Agreement - Davis LLP

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