EXHIBIT 10.12
AGREEMENT
THIS AGREEMENT is made and entered into effective May 1, 1999, by and
between Kaleidoscope Sports & Entertainment, LLC, 000 Xxxxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (hereinafter referred to as "Kaleidoscope") and
Sportsprize Entertainment, Inc., 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0 (hereinafter referred to as "Sportsprize").
AGREEMENT
WHEREAS, Kaleidoscope is a company involved in the planning, designing,
marketing, selling and consulting for various sports related ventures and
properties; and
WHEREAS, Sportsprize is a company that plans to generate revenue and
profits through Internet advertising and merchandise sales by operating a
website that offers a game concept and by selling banners, advertisements,
sponsorships and space in an online mall; and
WHEREAS, Sportsprize desires to use Kaleidoscope's knowledge of and
contacts in the sports business; and
WHEREAS, Kaleidoscope has agreed to provide certain services to Sportsprize
upon the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual covenants set for the
herein, and for other good and valuable consideration, it is agreed as follows:
1. TERM OF AGREEMENT: The term of this Agreement shall be deemed to have
commenced on May 15, 1999 and shall continue for a period of six (6) months
concluding October 15, 1999, unless sooner terminated or extended in
accordance with the terms and conditions hereof.
2. KALEIDOSCOPE SERVICES: Kaleidoscope shall perform the following functions
for Sportsprize:
(a) By July 1, 1999 provide Sportsprize with a list of highly qualified
candidates to serve as President of Sportsprize and a highly qualified
list of candidates to act as Spokesman for Sportsprize. In addition,
Kaleidoscope shall advise and work with Sportsprize in negotiating the
employment contacts with such candidates; and
(b) Work closely with Sportsprize to put together the best possible
strategic plan, by July 15, 1999, for Kaleidoscope to secure
presentations with major professional sports leagues and players
associations with a view toward
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getting those leagues and players associations to either endorse or to
approve the Sportsprize concept; and
(c) Assist Sportsprize and Interactive Marketing, Inc., by July 30, 1999,
in creating an overall marketing and operational strategy for
Sportsprize, which will contain strategic and tactical business
recommendations for the promotional revenue, marketing and partnership
issues involved in the launch of the Xxxxxxxxxxx.xxx website. In this
connection, Kaleidoscope will address the following:
(i) The identification and procurement of Ecomm partners;
(ii) Endorsements for Sportsprize;
(iii) Finding advertisers and advertising for the site;
(iv) Identify and secure special events sponsors and sponsorships;
(v) Identify and procure strategic Media partners; and
(d) Consultation with Sportsprize management to oversee the implementation
and execution of the strategies and recommendations of the
Kaleidoscope plan.
3. COMPENSATION: In consideration of the rights and benefits granted pursuant
to this Agreement, Sportsprize shall pay to Kaleidoscope the following
amounts:
a. One Hundred Twenty Thousand U.S. Dollars ($120,000), such amount to be
paid in six (6) installments of Twenty Thousand U.S. ($20,000) each on
or before the fifteenth (15th) day of May, June, July, August,
September and October, 1999; and
b. Options to purchase up to One Hundred Thousand (100,000) shares of
stock in Sportsprize (currently trading on the Over The Counter market
with the trading symbol "Jock") at a price of Twenty-five Cents ($.25)
per share. Kaleidoscope shall have two (2) years from the date of this
Agreement to exercise said option; provided however, that said options
once exercised, are restricted for sale for a period of one (1) year
from the date of said purchase; and
c. Options to purchase up to One Hundred Thousand (100,000) shares of
stock in Sportsprize (currently trading on the Over The Counter market
with the trading symbol "Jock") at a price of Twenty-five Cents ($.25)
per share, upon the successful completion of Paragraphs 2(a) and 2(b)
above. In this connection, Kaleidoscope shall be deemed to have
successfully completed the requirements of Paragraphs 2(a) and 2(b)
above if it has (1) provided Sportsprize, by July 1, 1999, with a list
of highly qualified individuals to serve as President of Sportsprize
or, in the alternative, has provided Sportsprize with a well-known
spokespeople and (2) either approached two (2) of the four (4) major
professional sports leagues for approval of the Sportsprize concept or
has not approached the said professional sports leagues, after having
had discussions with Sportsprize
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as to the advisability of making such an approach and Sportsprize has
decided to forego such an approach. Kaleidoscope shall have two (2)
years from the date of this Agreement to exercise said option;
provided however, that said options once exercised, are restricted for
sale for a period of one (1) year from the date of said purchase.
d. Options to purchase up to Three Hundred Thousand (300,000) shares of
stock, in Sportsprize (currently trading on the Over The Counter
market with the trading symbol "Jock") upon the reasonably
satisfactory completion of Paragraph 2(c) above at the traded price of
Sportsprize less twenty percent (20%) per share provided, however,
that said options, once exercised, are restricted for sale for a
period of one (1) year from the date of said purchase. The traded
price of Sportsprize will be determined by the average closing price
of Sportsprize's shares (traded on the NASDAQ OTC Bulletin Board or
NASDAQ Small Cap Market or suchever market that Sportsprize's shares
shall be traded upon) for a period of Ten (10) days preceding the
agreed to completion. Said shares will be released at 30,000 shares
per month over a Ten (10) month period. It is expressly agreed that
Sportsprize will make every effort to register the shares for early
trading privileges. Kaleidoscope agrees to sell it shares into the
market at a volume of no greater than 21/2% of the true volume of the
preceding weeks total amount of traded shares in Sportsprize. The
number of shares covered by each option above shall be proportionally
adjusted for any increase or decrease in the number of accrued shares
resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the common stock, or any increase
or decrease in the number of shares.
4. EXPENSES: Kaleidoscope shall be entitled to reimbursement of all
reasonable, necessary and pre-approved travel, entertainment and business
expenses incurred in furtherance of Sportsprize business and pursuant to
this undertaking, upon submission of reasonable documentation and receipts.
Kaleidoscope will be guided by Sportsprize policy relating to business
entertainment and travel expenses, and will submit requests for
reimbursements on forms acceptable to Sportsprize on a monthly basis.
5. PAYMENTS TO KALEIDOSCOPE: All payments to be made to Kaleidoscope pursuant
to the terms of this Agreement shall be made in U.S. Dollars by check drawn
to the order of Kaleidoscope Sports & Entertainment, LLC, and mailed to it
at 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxx Xxxxxxxxxx, Esq., or to such other address as may be designated in
writing to Sportsprize from time to time by Kaleidoscope.
6. STATUS OF PERSONNEL: Kaleidoscope and Sportsprize acknowledged that
Kaleidoscope will be providing services hereunder as a non-exclusive
independent contractor. Kaleidoscope shall provide the services of Xxxxx
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Bagliebter and Xxxxxx XxXxxxx and such other of its management and
employees as it deems appropriate to provide the contracted services to
Sportsprize hereunder. All such persons will be under the specific
direction and control of Kaleidoscope and Kaleidoscope is responsible for
their compensation and any and all other obligations of an employer or
general contractor, including but not limited to withholding taxes and
responsibility for any and all employee benefits. Nothing in this Agreement
shall be construed to make such persons employees of Sportsprize for any
purpose.
7. TIME IS OF THE ESSENCE: Sportsprize acknowledges that time is of the
essence in the payment of all fees dues Kaleidoscope hereunder and hereby
agrees that in the event any payment due Kaleidoscope is not received
within fifteen (15) days of the date set forth in this Agreement for such
payment Kaleidoscope shall have the right and option to terminate this
Agreement effective upon expiration of fifteen (15) days following written
notice to Sportsprize of its election to so terminate for failure of
Sportsprize to perform in accordance with the provisions hereof, unless
such payment has been received by Kaleidoscope within such fifteen (15) day
period. The reservation of specific rights by Kaleidoscope herein shall not
preclude Kaleidoscope from exercising any other remedy it may have at law
or in equity to enforce the terms of this Agreement.
8. TERMINATION: In accordance with the terms and conditions hereof either
party shall have the right to terminate the term of this Agreement
immediately, at any time if a Default, as defined below, by the other party
has occurred and is continuing by giving written notice thereof to the
defaulting party. The term "Default" shall mean any of the following: [1]
failure of a party to comply with or perform any material provision or
condition of this Agreement and continuance of such failure for fifteen
(15) days after written notice thereof to such party; or, if the failure
cannot be cured within said 15-day period, if the other party does not
commence to cure such failure within said 15-day period and diligently
pursue such cure hereafter; [2] a party becomes insolvent, is unable to pay
its debts as they mature or is the subject of a petition in bankruptcy,
whether voluntary or involuntary, on any other proceeding under bankruptcy,
insolvency or similar laws; or makes an assignment for the benefit of
creditors; or is named in, or its property is subject to, a suit for
appointment of a received; or is dissolved or liquidated; or [3] any
warranty made in this Agreement is breached, false or misleading in any
material respect. In the event of such termination, subject to the
arbitration provisions hereof, the non-defaulting party shall be entitled
to pursue any remedy provided in law or equity, including injunctive relief
and the right to recover any and all damages it may have suffered by reason
of such Default.
9. FORCE MAJEURE: Neither party hereto shall be considered to be in default of
this Agreement, or be liable for damages thereof, for any failure of
performance hereunder occasioned by an act of God, force of nature,
accident, war or warlike activity, insurrection or civil commotion, labor
dispute, transportation delay,
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governmental regulatory action (whether or not with proper authority) or
other cause similar or dissimilar to the foregoing and beyond its
reasonable control, provided the party so affected gives prompt notice
thereof to the other. In the event of a suspension of any obligation by
reason of this section, which extends beyond sixty (60) days, the party
non-affected may, at its option, elect to cancel those aspects of this
Agreement, which are reasonably feasible to terminate.
10. NOTICES: Except of any notice required under applicable law to be given in
another manner, all notices, requests and demands as made by the parties to
this Agreement shall be in writing [at the addresses set forth below,
unless the recipient at least two (2) business days prior to the giving of
such notice shall have advised the sender, in a notice given in accordance
with this paragraph of a different address, in which case the notice shall
be addressed to such different address] by any of the following means: [1]
personal service (including service by overnight courier service); [2]
telecopy (if confirmed in writing sent by personal service or registered or
certified, first class mail, postage prepaid, return receipt requested); or
[3] registered or certified, first class mail, postage prepaid, return
receipt requested. Any notice, demand or request pursuant to either
subsection [1] or [2] hereof shall not be effective until actually received
at the address (or facsimile number) specified (and, in the case of an
electronic communication under [2] that is not received between 9:00 a.m
and 5:00 p.m., at the location of the recipient on a Business Day, such
communication shall be deemed received at 9:00 a.m. on the next Business
Day), but notices given under [3] above shall be deemed given two (2) days
following deposit in the United States mails. Any party to this Agreement
may change its address for notices by a notice to the other given in a
manner permitted under this paragraph. For purposes of this paragraph,
"Business Day" means any day other than a Saturday or Sunday, or any other
day on which national or state chartered banks located in New York are
authorized to be closed. Notices shall be as follows:
If to Kaleidoscope: Xxxxx X. Xxxxxxxxxx
General Counsel &
Senior Vice President,
Business Affairs
Kaleidoscope Sports & Entertainment, LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Sportsprize: Sportsprize Entertainment, Inc.
Xxxxxxx X. Xxxxxxx
Barrister & Solicitor
World Trade Center
555 - 999 Canada
Xxxxxxxxx, X.X. X0X 0X0
11. ARBITRATION:
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A. Except as set forth with respect to third party claims, any dispute
between the parties arising from this Agreement shall be settled by
arbitration held in accordance with the Commercial Arbitration Rules
of the American Arbitration Association, except as modified by this
section. All disputes shall be referred to a single arbitrator
mutually appointed by the parties. If the parties cannot agree upon a
signal arbitrator within thirty (30) days after a demand for
arbitration is made, the dispute will be referred to an decided by a
panel of three (3) arbitrators. Within twenty (20) days following the
30-day period set forth above, each party shall select an arbitrator
and the arbitrators so selected shall, within thirty (30) days after
their selection, appoint the third arbitrator. If the arbitrators so
selected cannot agree upon a third arbitrator, such third arbitrator
shall be appointed by the President of the American Arbitration
Association. Arbitration hearings shall take place in New York, New
York. The proceedings shall commence and be completed within sixty
(60) days after the selection of the last arbitrator. The agreement of
a majority of the arbitrators, if the parties are unable to agree upon
a single arbitrator, rather than unanimity, shall be binding. Any
award rendered through this process will be final and binding upon the
parties. Unless otherwise directed by the arbitrator(s), each party
shall bear its own costs and expenses of arbitration, except that the
parties shall each bear one-half (1/2) of the costs, if any, of the
third arbitrator and any costs assessed by the American Arbitration
Association.
B. Notwithstanding the above, if there is a breach or threatened breach
by a party of a material terms of this Agreement, the other party
shall be entitled to seek injunctive relief to prevent irreparable
injury.
C. The provisions of this paragraph shall survive the expiration or
sooner termination of this Agreement.
12. RELATIONSHIP OF THE PARTIES: Kaleidoscope and Sportsprize are entering into
this Agreement as independent contractors and agree that they are not, and
shall not become or be deemed to be, agents, partners, principals or
employees of one another as a result of this Agreement or the performance
of their respective obligations hereunder. Nothing in this Agreement is
intended, or shall be deemed, to create a relationship, express or implied,
of principal and agent, employer and employee or joint venture. Each party
is responsible for providing, at their own expense, disability,
unemployment and other insurance and workers' compensation for themselves
and their subcontractors and employees.
13. GOVERNING LAW: This Agreement shall be interpreted in accordance with and
governed by the laws of the State of New York without regard to or for
conflict of laws privileges.
14. SEVERABILITY: If any provision of this Agreement shall be declared or held
by a court of competent jurisdiction or a duly constituted arbitration
panel to be invalid or
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unenforceable, such provision shall be deemed modified to the extent
necessary to be valid and enforceable, provided that such modification does
not materially alter the intent or purpose of this Agreement or the
obligations of the parties hereunder. If any such provision cannot be so
modified, such provision shall be severed wherefrom and of no force of
effect unless the severing of such provision materially alters the intent
or purpose of this Agreement or the obligations of the parties hereunder.
The remaining provisions hereof shall continue to be the valid and
enforceable obligations of the parties, all provisions hereof being
severable except as provided above.
15. CAPTIONS; HEADINGS: The captions or headings of the paragraphs of this
Agreement are for convenience only and should not be deemed to limit or in
any way affect the scope, meaning or intent of this Agreement or any
portion hereof.
16. ASSIGNMENT; BINDING EFFECT: This Agreement shall be personal to the parties
hereto, and except as provided herein, neither this Agreement nor the
rights or obligations of any party hereto shall be assigned by any party
without the prior written consent of the other party hereto. This Agreement
shall be binding upon the parties and their respective successors and
permitted assigns.
17. ENTIRE AGREEMENT; WAIVER: This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. Neither this
Agreement nor any provision hereof shall be modified, amended, terminated,
discharged or waived except by a written instrument signed by the party to
be charged therewith. No such written waiver of any provision shall be
deemed a waiver of the breach or enforcement of any other provision thereof
or of the subsequent breach or enforcement of the same provision whether or
not such breach is similar.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year above written.
KALEIDOSCOPE SPORTS & ENTERTAINMENT, LLC
By: /s/ [Illegible]
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SPORTSPRIZE ENTERTAINMENT, INC.
By: /s/ [Illegible]
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