[Material marked with an asterisk has been
omitted from this document pursuant to a
request for confidential treatment and has
been filed separately with the Securities and
Exchange Commission.]
MAJOR LEAGUE BASEBALL
August 30, 1999
Xx. Xxxxxxxxx X. Xxxxx, Esq.
Ultimate Sports Entertainment, Inc.
0000 Xxxxxxxx Xxxx.
Suite 414
Santa Monica, CA 90403
Dear Xxxx:
Major League Baseball Properties, Inc. ("MLBP"), on its own behalf and on behalf
of the Major League Clubs has agreed to grant Ultimate Sports Entertainment,
Inc. ("Licensee") a nonexclusive license to publish a series of baseball comics,
subject to approval by the Major League Clubs (the "Clubs"), and the execution
of a licensing agreement agreeable to both parties (the "License Agreement"):
Term: The license period shall run from: August 1, 1999 - November 30,
2000; unless sooner terminated in accordance with the terms
hereof, provided, however, that the license period shall be
extended through December 31, 2001, unless sooner terminated in
accordance with the terms hereof, in the event the agreement
pursuant to which MLBP (or MLBP's successor hereunder) is
authorized by the Clubs to grant the rights and assume the
obligations herein is extended through such date and continues to
authorize MLBP (or MLBP's successor hereunder) to so grant such
rights and assume such obligations.
Prior to the expiration of the license period, MLBP and Licensee
agree to discuss in good faith renewing or extending the license
period for an additional period (if authorized as set forth
above) under mutually agreeable terms and conditions.
Notwithstanding the foregoing, neither party shall have any
obligation to extend or renew this licensing arrangement.
Product Description:
A series of baseball comic books featuring the likenesses of
current Major League Baseball players in Club uniforms (the
"Publication").
Publication Specifications:
Comic book titles: TBD
size: 6-5/8 x 10-1/4
MAJOR LEAGUE BASEBALL Properties paper stock: Cover 10 Point Card Stock
Glossy
000 Xxxx Xxxxxx Text 40#
print order: TBD
New York, New York 10 167 suggested retail price: $3.95
Phone 2 1 0x00 0 x0000
www-majorleaquebaseball.corn
-2
[Material marked with an asterisk has been
omitted from this document pursuant to a
request for confidential treatment and has
been filed separately with the Securities and
Exchange Commission.]
Territory: Worldwide.
Official Designation: MLBP grants the right for Licensee to designate the
Publication an "Official Publication of Major League
Baseball" and to use the "Major League Baseball
silhouetted batter" logo and/or "Official Publication"
logo on the cover of the Publication. MLBP shall
determine in its sole discretion which logo Licensee
shall use on the-cover of the Publication.
Services: Licensee agrees to develop and produce, at its own cost
and expense, the Publication. Licensee responsibilities
in connection therewith shall include, but not be
limited to, developing and producing the layout,
design, illustrations, photographs, graphics, charts
and any editorial and statistical content. Licensee
shall also be responsible for manufacturing the
Publication, including but not limited to, ink, paper,
printing, binding and shipping to distribution
locations, or may subcontract such manufacturing (i.e.,
producing and printing) responsibilities to a third
party, provided MLBP provides written approval of such
third party.
MLB Marks: MLBP grants the rights to names, characters, symbols,
designs, likenesses, visual representations and such
other similar or related identifications of the
following noted organizations to be used in connection
with the Publication and with the marketing, promotion
and sale of the Publication: (1) Major League Baseball
Properties, Inc. (including the Major League Baseball
silhouetted batter and logos), (2) the American League,
(3) the National League, and (4) All-Star Game,
Division Series, League Championship Series, World
Series, other names given to such games or events and
other names given to other Major League Baseball
playoff games and (5) all current Major League Baseball
Clubs (hereinafter collectively referred to as the "MLB
Marks"). Licensee acknowledges that the authorization
granted hereunder does not include authorization to
utilize the names and/or likenesses of any Major League
Baseball player or other individual.
Minimum Guarantee: As an advance payment against all monies earned under
the terms of this Agreement, Licensee shall pay to MLBP
the following amounts: * due upon execution of this
Agreement; * due August 15, 2000. And if the license
period is extended pursuant to Term above: * due
August 15,2001.
Percentage Compensation: MLBP shall receive a royalty of * on net sales (as
defined below) of the Publication.
The term "net sales" shall mean gross sales less
quantity discounts and actual returns, but no deduction
shall be made for uncollectible accounts, commissions,
taxes or any other amount. No costs incurred in the
promotion, advertisement, production, distribution or
sale of the Publication shall be deducted from any
Percentage Compensation payable by Licensee.
Advertising Sales: During each year of the license period, MLBP will
receive, free of cost, one full -advertising page in
the Publication. MLBP may sell this page, and shall be
entitled to retain all revenue derived therefrom. All
other advertising pages may be sold by either party, in
Licensee's case, subject to MLBP'S approval of the
identity of the purchaser and content of advertisement.
Licensee acknowledges that MLBP will have a protected
list of accounts consisting of licensees, sponsors and
publishing accounts to whom Licensee is prohibited from
selling advertising pages. Should MLBP sell advertising
pages in addition to the one complimentary advertising
page specified in the previous paragraphs, collected
net revenues from such advertising pages shall be
apportioned between Licensee and MLBP as 75% and 25% of
such net revenues respectively.
Distribution: Licensee shall be responsible for distribution of the
Publication.
The Publication may be sold globally through
traditional newsstand channels as well as to jobbers,
wholesalers, distributors or retailers for sale or
resale and distribution to retail stores and merchants
for their resale and distribution directly to the
public. However, Licensee shall not permit the use of
the Publication as a premium (as defined below), except
with the prior written consent of MLBP and pursuant to
the provisions relating to the premium or special
sales. The term "premium" shall be defined as
including, but not limited to, free or self-liquidating
items offered to the public in conjunction with sale or
promotion of a product or service, including traffic
building or continuity visits by a customer, or any
similar scheme or device, the prime intent of which is
to use the Publication in such a way as to promote,
publicize and/or sell the products, services or
business image of the third party company.
Copyright: MLBP shall be the sole and exclusive owner of the
copyright rights to and in the MLB Marks, statistical
information compiled (including, without limitation,
the format, display and compilation of such statistics)
by MLBP and/or affiliates (the "Statistics") and any
editorial matter contributed by MLBP. Licensee
acknowledges the proprietary nature of the Statistics
and acknowledges that all copyrights in such Statistics
belong to MLBP and/or the Office of the Commissioner of
Baseball, as the case may be. Any use Licensee makes of
the Statistics shall confer no benefit upon it
whatsoever and any such use shall
inure to the benefit of MLBP and/or the Office of the
Commissioner of Baseball.
Licensee is solely responsible for determining whether
the consent of (i) any individuals depicted or referred
to, in the materials, including Major League Baseball
players, coaches, managers and other personnel, former
and current is required; and (ii) any third party in
connection with any copyright, trademark, or other
property or identified in MLB Marks above, is required.
If Licensee determines that such consents are required,
Licensee is solely responsible for obtaining such
consents directly from such individuals, entity and/or
third party.
Insurance: Licensee shall provide to MLBP evidence of
comprehensive general liability insurance of no less
than one million dollars ($1,000,000).
Indemnity: MLBP hereby agrees to indemnify, defend and hold
Licensee and its owners, shareholders, directors,
officers, employees, agents, representatives,
successors and assigns harmless from any claims, suits,
damages or costs (including reasonable attorneys' fees
and expenses) arising from (i) challenges to MLBP's
authority as agent for and pursuant to authority
granted by the Clubs to license the ML13 Marks (as
defined below) in connection with the manufacture,
distribution, promotion, advertisement and sale of the
Publication or (ii) assertions to any claim of right or
interest in or to the MLB Marks as authorized and used
in the Publication, provided in each case that Licensee
shall give prompt written notice, cooperation and
assistance to MLBP relative to any such claim or suit,
and provided further in each case that MLBP shall have
the option to undertake and conduct the defense of any
suit so brought (including, without limitation,
selecting in its sole discretion, counsel therefore)
and to engage in settlement thereof at its sole
discretion. MLBP shall give Licensee notice of the
making of any claim or the institution of any action
hereunder against MLBP and MLBP shall direct Licensee
as to whether MLBP chooses to defend the action and
select counsel therefor, or whether Licensee is to
handle the defense of the action (subject to MLBP's
approval as to counsel, court filings, discovery,
correspondence, general strategies, costs, and the
settlement or disposition of the action).
Licensee shall assist MLBP, to the extent necessary, in
the procurement of any protection or to protect any of
MLBP's rights to the MLB Marks, and MLBP, if it so
desires and in its sole discretion, may commence or
prosecute any claims or suits in its own name or in the
name of Licensee or join Licensee as a party thereto.
Licensee shall notify MLBP in writing of any
infringements or imitations by others of the MLB marks
of which it is aware. MLBP shall have the sole right to
determine
whether or not any action shall be taken on account of
such infringements or imitations. Licensee shall not
institute any suit or take any action on account of
any such infringements or imitations without first
obtaining the written consent of MLBP to do so.
Licensee agrees that it is not entitled to share in any
proceeds received by MLBP (by settlement or otherwise)
in connection with any formal or informal action
brought by MLBP hereunder.
Licensee hereby agrees to indemnify, defend and hold
MLBP, MLBE, the Clubs, the Leagues and BOC, Major
League Baseball Properties Canada Inc. ("MLBPC") and
Baseball Television International, Inc. ("BTI") and
their respective owners, shareholders, directors,
officers, employees, agents, representatives,
successors and assigns harmless from any claims, suits,
damages and costs (including reasonable attorneys' fees
and expenses) arising out of (i) any unauthorized use
of or infringement of any trademark, service mark,
copyright, patent, process, method or device by
Licensee in connection with the Publication covered by
this Agreement and the License Agreement, (ii) alleged
defects or deficiencies in said Publication or the use
thereof, or false advertising, fraud, misrepresentation
or other claims related to the Publication not
involving a claim of right to the MLB Marks, (iii) the
unauthorized use of the MLB Marks or any breach by
Licensee of this Agreement and the License Agreement,
(iv) libel or slander against, or invasion of the right
of privacy, publicity or property of, or violation or
misappropriation of any other right of any third party,
(v) agreements or alleged agreements made or entered
into by Licensee to effectuate the terms of this
Agreement and the License Agreement, (vi) Licensee's
distribution methods, practices, or policies relating
to the Publication and/or (vii) Licensee's promotional,
marketing, or advertising activities involving or
related to the Publication, MLBP, or any of its
affiliates. MLBP shall give Licensee notice of the
making of any claim or the institution of any action
hereunder against MLBP and MLBP may at its option
participate in any such action or allow Licensee to
handle MLBP's defense (subject to MLBP's approval as to
counsel, court filings, discovery, correspondence,
general strategies, and the settlement of the action).
The indemnifications hereunder shall survive the
expiration or termination of this Agreement and the
License Agreement.
Licensee agrees to promptly notify MLBP in writing of
any actions commenced against it in any forum relating
to the Publication (irrespective of whether the MLB
Marks are implicated thereby) and shall afford MLBP the
opportunity to (i) take on the defense of such action
on behalf of Licensee or (ii) consult with Licensee in
the defense of such action. In either
case, subject to the provisions of the preceding
paragraph, MLBP shall bear the costs of such
participation.
Quality Control: Licensee shall submit all materials, including text,
design, images and layout for all components of the
Publication and all promotional and display materials
related to the publication to MLBP for MLBP's approval.
Product Credit: Licensee shall provide MLBP with 150 free copies of
each Publication, for use by MLBP at its sole
discretion.
Miscellaneous: During each year of the license period, Licensee agrees
to purchase one four-color full-page advertisement in
Little League Magazine, not to exceed the net purchase
price of $45,000. Licensee guarantees that MLBP, the
Clubs, official Club and/or MLBP retail stores, and
Club in-stadium concessionaires will obtain the
Publication for retail sale at lowest possible
wholesale prices applicable to the channel of
distribution through which the Publication will be sold
and shall receive prompt shipments and/or deliveries of
the Publication, without regard to the relatively small
volume their orders may represent MLBP and the Clubs
may obtain the Publication for their use, but not
resale, at the manufacturer's lowest possible price,
which shall in no event be greater than its lowest
wholesale price.
Additional specific terms and conditions will be included in the agreement to
follow. Please review and arrange for an authorized representative to sign below
to demonstrate Licensee agreement to these terms and conditions and return to my
attention. Upon execution by MLBP, we will forward to you a copy for your files.
Sincerely,
/s/Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Director of Publishing
AGREED AND ACCEPTED:
Name: /s/ Xxxxxxxxx X. Xxxxx
Signature: /s/Xxxxxxxxx X. Xxxxx
Title: Pres./CEO
Date: 10/01/99
