EXHIBIT 10.7
AGREEMENT
---------
THIS AGREEMENT entered into by and between Global Sports And
Xxxxxx.Xxx, Inc., a Delaware corporation, having its offices at 00000 Xxxxxxx
Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000 (hereinafter referred to as
the "Company") and Xxxxx Xxxx located at 00000 Xxxxxxx Xxxxx Xxxxxxx, Xxxxx 000,
Xxxxxx, Xx 00000 (hereinafter referred to as "Sports Personality"). Any company
owned, controlled or operated by "Sports Personality" for the purposes of
performing under this Agreement shall be included in the definition of "Sports
Personality".
WITNESSETH
----------
WHEREAS, Company desires to execute an exclusive agreement with Sports
Personality, and Sports Personality is desirous of executing such an agreement
with Company, concerning Sports Personality's participation in a for profit
business enterprise involving sports handicapping, and/or betting information
services including, but not limited to, television, radio, print, Internet,
and/or telephone such as 800 and 900 numbers or other telephone operations
(collectively "Sports Service Business"). The Sports Service Business is the
"Business" of the Company for purposes of this Agreement. A Sports Service
Business utilizing the name of the Sports Personality solely shall hereinafter
be the "Sports Personality Division".
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and promises contained herein, the parties agree as follows:
1. SERVICES OF EACH PARTY.
The Company shall be responsible for the advertising, promotion and
operation of the Business. The Business and the content of all advertising,
promotional copy, commercials and programming, including the material written or
performed by the Sports Personality will be exclusively owned and controlled by
Company provided, however, Sports Personality shall have the right to refuse to
permit the use of his name and/or likeness by Business in advertising,
promotions and/or performances which Sports Personality reasonably determines
would bring Sports Personality's name into public ridicule, contempt, or
disfavor.
Sports Personality shall, during the Term, (1) provide handicapping and
sports selections for various sports, including football, basketball, and
baseball, particularly during the period commencing with the start of the NFL
football season through the end of the NCAA basketball season (normally
September 1 - March 31, hereinafter called "Football Season"). The Company will
provide Sports Personality whatever reasonable advice and assistance is required
in making handicapping selections; (2) participate in a television show during
Football Season produced by Company in Las Vegas or such other location as the
Company may determine in connection with the Business which will require one
full day per week plus travel time; (3) be reasonably available for up to one
hour per week from locations convenient to Sports Personality to participate on
a weekly radio show and to tape audio material in connection with the Business
for advice lines and programming featuring Sports Personality; (4) be reasonably
available, at mutually acceptable times, to participate in publicity and the
promotion of the Business, including but not limited to television, radio, or
personal appearances ("Services").
2. TERM OF AGREEMENT. The term of this Agreement (the "Initial Term")
shall be one year, commencing on September 1, 2000 and terminating on August 31,
2001 ("Termination Date"), unless sooner terminated or renewed or extended by
Company as hereinafter set forth. Company shall have the sole option and right
to extend the Initial Term for nine (9) successive one year option periods (the
Initial Term and the option periods are collectively the "Term"). The options
shall be exercised by providing written notice to the Sports Personality at
least thirty (30) days prior to the termination of the Initial Term or the first
option period.
3. EXCLUSIVE RIGHTS TO NAME AND LIKENESS. Sports Personality hereby
grants to Company the exclusive right and license to use the name of the Sports
Personality to advertise, promote, market, produce and exploit the Business
during the Term of this Agreement. During the Term, Sports Personality shall not
enter into an agreement, either directly or indirectly, with any other person or
entity for use of Sports Personality's name, likeness or services (whether by
Sports Personality or by any third person or entity) with respect to the
Business (i.e. handicapping or wagering of any kind). Nothing in this Agreement
limits or restricts Sports Personality's right to appear as a guest, host, or
commentator on sports shows as long as they do not involve the Business of the
Company.
In the event Company terminates this Agreement due to the material
breach of this Agreement by Sports Personality, as hereinafter defined, or in
the event Sports Personality resigns or terminates this Agreement prior to the
expiration of the Term, Sports Personality agrees not to compete with the
-2-
Company, nor to associate with any third person or entity engaged in a business
competitive with the Business for a period of one year. Sports Personality shall
not be subject to the covenant not to compete in the event Company elects not to
exercise its options or in the event Sports Personality terminates the agreement
pursuant to Paragraph 6(B).
Sports Personality acknowledges that his or her name, identity,
services and talents provided to Company pursuant to this Agreement are of a
special, unique, extraordinary and intellectual character which gives them a
particular value, the loss of which cannot be reasonably or adequately
compensated in damages in an action at law and that Company would, therefore,
sustain great and irreparable injury and damage from such loss. Accordingly,
Company shall be entitled to injunctive and other equitable relief to preserve
its rights and interest in and to Sports Personality's name, identity, services
and talents pursuant to this Agreement.
4. COMPENSATION, DIVISION OF REVENUE AND ACCOUNTING. In consideration
of, and provided that Sports Personality performs, the Services hereunder,
Sports Personality shall receive the following compensation:
a. A guaranteed minimum of one hundred twenty thousand dollars
($120,000.00) per Year (a Year shall be March 1 - February 28) which shall be
paid as a draw against commissions in equal, consecutive monthly installments on
the 10th day of each month commencing on March 1, 1999 (provided that such
payments will accrue until such time as the Company completes its initial
Private Placement at which time all accrued payments will be made) and
continuing until such time as the draw plus commissions paid to Sports
Personality equals $120,000.00 for each Year. This draw shall be an advance
against Commission as outlined below and shall not be refundable in the event
Commission does not exceed this draw.
b. "Commission" shall be ten percent (10%) of the Adjusted
Gross Revenue, as hereinafter defined, actually received by Company from the
operation of Sports Personality Division during the Term.
c. For purposes of this Agreement, the term "Adjusted Gross
Revenue" shall be defined as the Gross Revenues generated by Sports Personality
Division and actually received by Company, less all returns, allowances,
cancellations, service bureau fees and charges, and credit card fees and
charges. After each three (3) month period (the "Quarter") during the Term, the
draw shall be applied against the Commission, less a ten percent (10%) reserve
-3-
for chargebacks, due Sports Personality for that Quarter and the balance, if
any, will be paid to Sports Personality by the Company within thirty (30) days
following the end of each Quarter. The payments due Sports Personality shall be
accompanied by a statement setting forth the calculation of Adjusted Gross
Revenue for the Sports Personality Division.
d. Company shall arrange and pay for travel, hotel
accommodations, and for reasonable meals for Sports Personality when Sports
Personality is required to travel between Sports Personality's residence to Las
Vegas or any other location to provide the Services hereunder.
e. The compensation payable to Sports Personality pursuant to
this Paragraph is expressly conditioned upon the following sports having
"Active" schedules during the appropriate seasons at the college and
professional levels for each applicable pay period during the Term: football,
basketball, and baseball. "Active" shall be defined as each sport having full
and complete seasons of performance. To illustrate, a sport shall not be deemed
to have a full season of performance in the event of a strike or the
cancellation of a portion of its season. In the event a full season is not
played, the guaranteed minimum shall be reduced by an amount equivalent to the
amount of time the season was shortened and no payments toward the guaranteed
minimum will be paid during the cancelled period.
f. In extraordinary circumstances, and not as a normal
business practice, Company shall have the right to withhold up to twenty percent
(20%) of Sports Personality's Commission for a period of six (6) months
following the date a channel containing any program of Sports Personality is
deactivated. Company shall deduct from said reserve commissions related to
chargebacks and other applicable costs and expenses relating to the deactivation
of the channel. At the end of said six (6) month period, the balance of the
reserve shall be paid to Sports Personality.
g. If Company is unable to market either the Business in
conditions comparable to the marketing conditions which existed at the time of
execution of this Agreement, or if marketing the Business becomes cost
prohibitive, technologically impossible or unfeasible (collectively Changed
Market Conditions), the obligations owed by Company, including the obligation to
make payments to Sports Personality pursuant to this Agreement, may be suspended
by Company for a period of sixty (60) days by providing written notification to
Sports Personality of such Changed Market Conditions. During the sixty (60) day
-4-
period, the parties shall renegotiate the terms of the Agreement and, if the
parties fail to reach a new or revised agreement, the rights and obligations of
each party under this Agreement including the covenants imposed on Sports
Personality in Paragraph 8 shall terminate except for the Company's obligation
to make payments earned by Sports Personality prior to termination.
5. WARRANTIES AND REPRESENTATIONS.
SPORTS PERSONALITY HEREBY WARRANTS AND REPRESENTS THAT SPORTS
PERSONALITY:
a. Sports Personality has the full right and authority to
enter into and fully perform the terms of this Agreement;
b. Sports Personality is the sole owner of any and all rights
granted and information provided by Sports Personality to Company pursuant to
this Agreement;
c. The rights granted by Sports Personality pursuant to this
Agreement shall not infringe upon or violate the rights of any third party.
d. As of the date of execution of this Agreement, Sports
Personality has not contracted and will not contract with, any person or entity
regarding the Business of the Company. (Company and Sports Personality
acknowledge that this Agreement will null and void if Sports Personality fails
to secure full and complete release from his disputed contract with National
Sports Services, Inc.)
e. During the Term, Sports Personality will not (i) violate
any federal, state or local law; (ii) commit acts which may harm the Business
and reputation of Company, Company's business relationship or licensing
agreements with third parties; (iii) refrain from any act which would bring
Sports Personality's name into public ridicule, contempt or disfavor, or perform
any act which would decrease the value of this Agreement to Company or (iv)
violate Paragraph 3 of this Agreement.
f. There is no action proceeding or pending against Sports
Personality which would interfere with Sports Personality's ability to perform
its obligations hereunder.
COMPANY HEREBY WARRANTS AND REPRESENTS AS FOLLOWS:
a. Company has the full right and authority to enter into and
fully perform the terms of this Agreement;
b. The execution and performance of this Agreement does not
violate any contract, agreement, commitment, order judgment or decree to which
Company is a party or by which it is bound; and
-5-
c. There is no action or proceeding pending against Company
which would interfere with Company's ability to perform its obligations
hereunder.
6. TERMINATION.
A. TERMINATION BY COMPANY.
This Agreement may be terminated by Company prior to the
expiration of the Term under any of the following circumstances:
1. The death or Disability of Sports Personality upon five (5)
days' written notice to Sports Personality. For purposes hereof, "Disability"
shall mean the physical or mental inability of Sports Personality to render the
services contemplated under this Agreement for more than thirty (30) consecutive
days during any year of the Term hereof.
2. If the Sports Personality is unable to appear on three or
more television or radio shows during the Football Season for any reason other
than weather or acts of God.
3. The breach of any warranty, representation, covenant or
agreement of Sports Personality under this Agreement.
4. The occurrence of events which make it impossible or
impractical for the Company to remain in its current business.
5. The sale or transfer of all or a substantial portion of the
assets of Company to purchaser ("Purchaser"), unless Purchaser assumes the
obligations of the Company herein in writing with respect to Sports Personality.
6. In the event of termination by the Company hereunder,
Sports Personality shall be entitled only to the Compensation due Sports
Personality earned or accrued through the date of termination.
B. TERMINATION BY SPORTS PERSONALITY.
This Agreement may be terminated by Sports Personality prior
to the expiration of the Term hereof upon thirty (30) days prior written notice
of termination to the Company only in the following circumstances:
1. The failure of Company to pay Sports Personality any of the
Compensation due and payable to Sports Personality under Paragraph 4 hereof,
provided that Company shall have ten (10) days to cure any default in payment
following written notice of default from Sports Personality.
-6-
2. The breach of any warranty, representation, covenant or
agreement of Company under this Agreement.
3. The occurrence and continuation of an event of Force
Majeure for a period of ninety (90) days.
4. In the event of termination hereunder, Sports Personality
shall be entitled only to the Compensation due Sports Personality earned or
accrued through the date of termination.
6. Confidential Information. Sports Personality shall not use
or disclose to any other person (other than to another officer of the Company or
his attorney, accountant or professional financial advisor with a need to know
such information), any confidential information or trade secrets that he has or
may receive during such time as he has rendered or is rendering services to
Company relating to Company, or its business or affairs (including, without
limitation, any such information stored on any computer or in computer-readable
form) that contains or reflects any such information (except that Sports
Personality may take a copy of his Rolodex and documents reflecting his
compensation). The confidentiality obligations hereunder shall not extend to
information in the possession of Sports Personality prior to his employment with
Company or if the confidentiality is lost due to reasons other than a violation
of this Paragraph by Sports Personality, or if Sports Personality is required to
disclose such information by court order or other binding legal process (so long
as Sports Personality gives ten (10) days' prior written notice to Company of
proceeding pursuant to which Sports Personality is being asked to disclose
confidential information).
7. NON-COMPETITION AND RELATED COVENANTS.
a. During the Term and for a period of one year thereafter, in
the event Company terminates this Agreement for cause prior to the end of the
Term as set forth in Paragraph 7(A) or if Sports Personality resigns or retires
(which one-year period shall be referred to herein as the `Post-Agreement
Period"), Sports Personality shall not, unless acting pursuant to this Agreement
or with the prior consent of Company, own, control, manage, operate, join,
finance, or participate in the ownership, control, management, operation or
financing of, or be connected as a director, officer, Sports Personality,
partner, principal, agent representative, consultant or otherwise with, or use
or permit its or his name to be used in connection with, any business or
-7-
enterprise that is competitive with the Company's Business in any jurisdiction
in which Company is then engaged in business, for so long as Company continues
to conduct business in such jurisdiction.
b. Prior to the expiration of the Term and during the
Post-Agreement Period, Sports Personality shall not: (i) solicit or attempt to
solicit for employment any employee of the Company, any person who is then a
Sports Personality of Company, or induce or attempt to induce any such Sports
Personality to terminate his or her employment with Company; or (ii) solicit,
divert or take away, or attempt to solicit, divert or take away, any person that
is at the time of such termination an advertiser, customer or client of Company;
or advise or induce or attempt to advise or induce any such person not to
continue its relationship with Company or to withdraw, curtail or cancel its
business dealings with Company; or (iii) interfere with or damage Company's
business relationships with its Sports Personalities, employees, lenders,
creditors, advertisers, clients, customers and others with whom it does
business.
c. The covenants set forth in this Paragraph 9 shall be
construed as a separate and independent covenant for each of the separate
states, provinces, territories and possessions throughout the world. To the
extent that such covenant shall be declared to be invalid or unenforceable in
any particular jurisdiction, such declaration shall not affect such covenant
with respect to any other jurisdiction. In addition, in the event that any court
shall determine that the scope, time or territorial restrictions set forth
herein are not reasonable, then it is the intention of the parties that such
restrictions be enforced to the fullest extent permitted by law, and this
Agreement shall thereby and to that extent be reformed.
d. The restrictions set forth in this Paragraph 9 shall not be
construed to prohibit the ownership collectively by Sports Personality of less
than five percent (5) of any class of securities of any corporation having a
class of securities registered under the Securities Exchange Act of 1934, if and
as long as such ownership represents a passive investment and neither Sports
Personality nor any group of affiliated persons in any way, directly or
indirectly, manages or exercises control over such corporation or otherwise
takes part in such corporation's business, or seeks to do any of the foregoing.
e. As used in Paragraph 9 hereof and this Paragraph 9, the
term "Company" shall be deemed to include any Affiliate(s) (whether now existing
or hereafter formed or acquired).
-8-
8. INDEMNIFICATION. In the event either party causes the other party to
incur or sustain any claim, suit demand, action, or proceedings, damages, costs
of litigation, or expense of attorneys' fees, or any other liability (the
"Indemnified Expenses") arising from its conduct, error, omission, breach of
Agreement or warranties and representations, the defaulting party shall
indemnify the other party for such Indemnified Expenses. In the event such loss
is sustained by the Company, Company shall, as a partial offset, deduct the
Indemnified Expenses from the percentage of any Adjusted Gross Revenues due
Sports Personality pursuant to this Agreement. This Agreement shall not restrict
any other remedy which either party may have, at law or equity, against the
other party with respect to the subject matter of this paragraph.
9. NOTICE. Any notice, request, payment or communication that a party
to this Agreement is required or may desire to give to the other hereunder shall
be in writing and may be served by (i) delivering it personally, (ii) depositing
it in the United States Mail, first class postage prepaid, certified, return
receipt requested, or (iii) sending it by facsimile or electronic mail. Any such
communication shall be addressed to the other party at the following addresses
listed below:
12. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts and a facsimile copy of this Agreement, signed by either party and
transmitted to the other party, shall constitute a binding signature to this
Agreement.
13. GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of California, without reference to any conflict of laws
or rules that would have the internal laws of any other jurisdiction apply.
14. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
Notwithstanding the foregoing, Sports Personality shall not be permitted to
assign his or her rights hereunder to any person or entity other than an entity
owned or controlled by Sports Personality, provided that such an assignment
shall not relieve Sports Personality of its obligations hereunder.
15. MERGER; AMENDMENTS. This Agreement sets forth the entire agreement
of the parties respecting the specific subject matter hereof supersedes all
prior agreements and undertakings, both written and oral, between the parties
with respect to such specific subject matter, and may not be amended orally or
through course of conduct, and no right or obligation of any party may be
altered, except as expressly set forth in a writing signed by such party.
-9-
16. EXPENSES. Each party shall bear its own expenses incurred with
respect to the preparation of this Agreement and consummation of the
transactions contemplated hereby.
17. NO THIRD PARTY BENEFICIARIES. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement. Without limiting the generality of the foregoing,
nothing contained herein shall be construed as modifying or supplementing any
agreement.
18. WAIVER OF JURY TRIAL: EXEMPLARY DAMAGES. THE PARTIES HERETO HAVE
ELECTED TO RESOLVE DISPUTES THROUGH ARBITRATION. ALL PARTIES HEREBY WAIVE THEIR
RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY DISPUTE OR CLAIM ARISING UNDER OR
WITH RESPECT TO THIS AGREEMENT. No party shall be awarded punitive or other
exemplary damages respecting any dispute arising under this Agreement or any
agreement contemplated hereby.
19. RELATIONSHIP OF THE PARTIES. Nothing contained in this Agreement
shall authorize, empower, or constitute any Party the agent of any other Party
in any manner; authorize or empower any Party to assume or create any obligation
or responsibility whatsoever, express or implied, on behalf of or in the name of
any other Party; authorize or empower any Party to bind any other Party in any
manner or make any representation, warranty, covenant, agreement, or commitment
on behalf of another Party; or create any partnership, joint venture or agency
relationship among any of the Parties.
20. NO IMPLIED WAIVERS. No action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any covenants or agreements contained herein or made pursuant
hereto. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any preceding or
succeeding breach and no failure by any party to exercise any right or privilege
hereunder shall be deemed a waiver of such party's rights or privileges
hereunder or shall be deemed a waiver of such party's rights to exercise the
same at any subsequent time or times hereunder.
21. INTERPRETATION. The section headings contained in this Agreement
are solely for the purpose of reference, are not part of the agreement of the
parties and shall not affect the meaning or interpretation of this Agreement.
WHEREFORE, the parties have executed this Agreement on the dates set forth
below.
-10-
Dated: 3/2/2000 Global Sports And Xxxxxx.Xxx, Inc., a Delaware
-------------- Corporation
By: /S/ XXXXXXX X. XXXXXX
---------------------------------------
Xxxxxxx X. Xxxxxx, President
Dated: 3/2/2000 SPORTS PERSONALITY
--------------
By: /S/ XXXXX XXXX
---------------------------------------
Xxxxx Xxxx
-11-
