[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.]
CHARACTER COLLABORATION
AND COMIC BOOK PUBLISHING AGREEMENT
AGREEMENT entered into as of March 1997 (the "Effective date") by and among
Lobito Publishing Group, A California Corporation, ("Lobito") having its
principal place of business at 0000 Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx,
Xxxxxxxxxx; and, X. Xxxx, Inc., A Nevada Corporation, for the services of
Xxxxx Xxxxxx, using a mailing address of 000 Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx; hereinafter referred to as "C Xxxx."
WlTNESSETH:
Whereas the parties have and will collaborate on the creation and promotion
of a new comic book or series of comic books incorporating the character and
storyline of NBA player Xxxxx Xxxxxx, and incorporating Xx. Xxxxxx'x likeness
and image.
Whereas, Lobito, in conjunction with X. Xxxx will write, illustrate, produce,
publish, and otherwise exploit the Comic Book subject to the terms and the
conditions of this Agreement, and;
Whereas, Lobito will arrange for the merchandising activities related to the
Xxxxx Xxxxxx character subject to the terms and conditions of this Agreement.
For the purpose of this Agreement, "merchandising" shall include, but not be
limited to, the sale of film, television, animation, interactive software and
any other medium currently in use or hereinafter devised, toys, trade
paperbacks, periodicals, clothing, theme park sales and other merchandising
related items encompassing the Character, Xxxx or logo and all normal forms
of merchandising.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the parties, the parties agree as
follows:
1. COMIC BOOK
Lobito will illustrate pictorial and graphic versions of the Xxxxx Xxxxxx
character depicting his exploits and superstar activities as one of the
leading players in the National Basketball Association, accompanied by
dialogue and related literary text based upon the Xxxxxx character, in forms
suitable for publication in comic books. Each edition of the Comic Book shall
hereinafter be referred to as an "Issue" of the Comic Book.
2. APPROVALS/CONSULTATIONS
Except as set forth herein, Lobito and X. Xxxx shall have joint control over
the content of the Comic Book. Lobito shall submit production budgets on
request. X. Xxxx shall have approval of the use of his name and likeness
throughout the term of this Agreement, with such approval not to be
unreasonably withheld. X. Xxxx must approve or reject each submission within
fifteen (15) business days after Lobito submits the same to it.
1
3. LOBITO'S REPRODUCTION AND DISTRIBUTION RIGHTS
3.1 Grant
(a) Subject to the terms and conditions of this Agreement, during the term of
this Agreement X. Xxxx hereby grants to Lobito the worldwide, exclusive and
irrevocable right (including the exclusive right to grant others the right)
to reproduce, publish, print, reprint, and distribute the Comic Book and the
Character, with X. Xxxx'x approval, in whole or in part, in any form, in any
language and in any medium now known or hereafter developed and to advertise
and promote the Comic Book, the Character and the Xxxx in any medium. X. Xxxx
shall have approval of the use of Xx. Xxxxxx'x name and likeness, with such
approval not to be unreasonably withheld.
(b) The rights granted in Section 3.1 (a), above, include rights with respect
to film, video or any other audio-visual work in any medium now known or
hereafter developed.
(c) Except as specifically provided in this Agreement, X. Xxxx shall not
grant to any third party the rights granted in Section 3.1 (a) or (b) with
respect to (i) a comic book, or (ii) film, video, or any other audio-visual
work, or (iii) promotional material or activity using or incorporating the
Character or the Xxxx.
3.2 Lobito's Responsibilities.
(a) Subject to the provisions of this Agreement and of X. Xxxx performing in
accordance with its responsibilities hereunder, Lobito shall use its best
efforts consistent with industry norms to advertise, market, promote and sell
copies of each Issue of the Comic Book which X. Xxxx has approved pursuant to
Section 2 of this Agreement.
(b) Lobito undertakes to maintain the high quality of the Comic Book
consistent with the quality which Lobito maintains for its other comic books.
3.3 X. Xxxx'x Responsibilities.
(a) Throughout the term, X. Xxxx shall assist Lobito in the promotion of the
Comic Book as specified in this Agreement and as the parties may reasonably
agree from time to time, but in no event less than reasonable efforts. All of
X. Xxxx'x reasonable out-of-pocket expenses directly related to such
assistance shall be promptly paid or reimbursed by Lobito. X. Xxxx shall
supply Lobito with appropriate documentation of such expenses. Any single
expense in excess of $1,000 must be pre approved by Lobito in writing.
(b) Upon fourteen (14) days written notice by Lobito, Xx. Xxxxxx agrees to
make himself available for three (3) personal appearances per calendar
year for promotional events to publicize the Comic Books and Xxxx. At these
appearances there will be no obligation for Xx. Xxxxxx to give autographs.
Any situation involving autographs will be negotiated separately.
(c) X. Xxxx acknowledges that the Character is based on Xx. Xxxxxx'x likeness
and that the Comic book (regardless of medium including, print, film, video,
and computer) consuming public will and have come to associate him with the
Character to be developed over time under the terms of this Agreement.
Therefore, X. Xxxx agrees that during the full term of this Agreement and any
later extensions thereof, it will not portray or represent any other comic
book character and will not make appearances for or on behalf of, and will
not lend any of Xx. Xxxxxx'x Collaborative data (as defined in section 4.3
of this
2
Agreement) for use in conjunction with any comic book, comic book character,
or comic book publisher without the prior written consent of Lobito, with
such approval to be granted in Lobito's sole and exclusive discretion, which
approval shall not be unreasonably withheld.
(d) X. Xxxx warrants that it will not willfully or by gross negligence act to
impair the value of the Comic Book, the Character, or the Xxxx. In
particular, Xx. Xxxxxx shall not comport himself in a way that would
disparage or diminish the value of the developed Character or knowingly bring
negative publicity to the Character, Comic Book, or Xxxx.
3.4 Credits. Each party hereto shall receive the following credits:
In connection with all issues of the Comic Book and all videos, television
productions, and films, all credits shall be attributed jointly and severally
to: Lobito Publishing Group, Fallasha Xxxxx, Xxxxx Xxxxxx and Xxxx Xxxxx,
Esq., as "creators".
3.5 Late Shipment of the Comic Book. In the event that an issue of the Comic
Book cannot be shipped on schedule such that it can be shipped only on a
"returnable basis", (i.e., that copies may be returned for refund or credit)
with the prior consultation of X. Xxxx, Lobito shall have the right whether
to ship same on such returnable basis. The parties hereto agree that
additional time will be allowed for the sale of, and revenue payments for,
any Issues let out on a consignment basis.
3.6 Lobito's Merchandising Rights
Subject to the terms and conditions of this Agreement, X. Xxxx hereby grants
to Lobito during the term of this Agreement the worldwide, exclusive and
irrevocable right (including the exclusive right to grant others the right)
to exploit and otherwise use the Character and the Xxxx (defined below) on or
in connection with any and all products or services whatsoever, including but
not limited to, directly and indirectly, (through agents, licensees,
sublicensees, distributors, etc. of Lobito's choosing) merchandising of all
of the foregoing.
4. RIGHTS
4.1 Rights in the Character and the Xxxx.
(a) The (i) Character, and (ii) the Xxxx or any variations thereof in
connection with the Character (the "Xxxx") and all copyright and trademark
rights shall be owned 50% by Lobito and 50% by X. Xxxx, Inc., a Nevada
Corporation. All decisions affecting the use and exploitation of the
Character and Xxxx shall be jointly agreed upon by Lobito and X. Xxxx.
(b) The parties agree that the successful exploitation, merchandising and
licensing of the Character and the Xxxx will depend on the parties agreeing
upon the appropriate exploitation, merchandising and licensing of the
Character and the Xxxx. Therefore the parties agree that any use,
exploitation, merchandising or licensing related to the Character or the Xxxx
not specifically granted herein shall be upon the unanimous written agreement
of the parties. Further, X. Xxxx agrees that it will not use, exploit or
license or grant to any third party the right to use, exploit or license the
Character or the Xxxx except as provided in the previous sentence.
4.2 Rights in the Comic Book.
3
[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.]
(a) As among the parties, the Comic Book and all copyright and trademark
rights to all original literary materials and characters therein which first
appear in the Comic Book shall be owned 50% by Lobito and 50% by X. Xxxx,
Inc., a Nevada Corporation owned by Player. The parties acknowledge that
stock character profiles and standard scenes a faire are excluded from claims
of joint ownership.
(b) The parties agree that Lobito, in its sole discretion, can elect to put
the logo of Lobito Publishing Group (or any such other distributor approved
by X. Xxxx, not to be unreasonably withheld or delayed) on each Issue of the
Comic Book. Lobito shall have the right to have a copyright notice and/or
trademark in its name. In connection with Lobito's exploitation of its rights
hereunder, X. Xxxx acknowledges that it will not acquire any rights of any
kind whatsoever in and to (i) the names or marks of Lobito Publishing Group
or any variation thereof, or (ii) any other name or xxxx or other rights
owned by Lobito, other than as specifically set out in Section 4.1 (a) and
4.2 (a) hereof. However, X. Xxxx shall retain the right to use in any way it
sees fit any pre-established logos or marks on Xx. Xxxxxx which pre-date the
existence of this Agreement.
4.3 Lobito's Exclusive License to Use the Character, Marks, and the
Collaborator Data Solely in Connection With the Distribution of the Comic
Book.
X. Xxxx hereby grants to Lobito the exclusive right to use (i) the Character,
(ii) the Marks, and (iii) his name, signature, biographic data and photograph
or likeness ("Collaborator Data") in advertising and promotional material in
connection with the Comic Book, including its promotion, sale and
distribution. Lobito shall submit to X. Xxxx for its prior written approval,
not to be unreasonably withheld or delayed, all proposed materials which
incorporate any Collaborator Data.
4.4 Further Assistance.
Each party agrees that, at the request of another party, and without any
further consideration, it will, during the term of this Agreement and
thereafter, promptly execute and deliver to the other all instruments and
documents (after reasonable review by legal counsel) and do all things which
may be reasonably necessary to carry out the provisions of this Agreement.
4.5 Copyright and Trademark Notices.
The Comic Book, and where possible and appropriate, all other uses of the
Character and the Xxxx, shall bear a copyright and trademark notice in the
names of Lobito Publishing Group, Fallasha Xxxxx, X. Xxxx, Inc., A Nevada
Corporation, and Xxxx Xxxxx, Esq.
4.6 Survival.
The provisions of this Section 4 shall survive any termination or expiration
of this Agreement.
5. ROYALTIES AND PAYMENT.
5.1 Comic Book (Section 3.1) Publishing Royalties.
(a) Provided that the Comic Book is published and distributed, (I) X. Xxxx
shall receive * percent (*) of the gross profits, if any, collected by
Lobito in connection with the distribution and sale of the Comic Book as to
the first 15,000 units sold; * percent (*) of the gross profits, if
any, collected by Lobito as to the next 15,000 units sold, or
4
[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.]
Units 15,001 through 30,000, * percent (*) of the gross profits, if
any, on the next 20,000 units sold, or units 30,001 through 50,000, and
* percent (*) of the gross profits, if any, on all units sold in
excess of the first fifty thousand as specified above.
(b) For purposes of this Section 5.1, "gross profits" is defined as the
amount of gross receipts (less all returns) collected by Lobito from the sale
of the Comic Book in all markets. No royalties shall be paid on copies
furnished without charge, and not for resale to the parties, or for review,
advertising or promotional purposes and furnished without charge.
(iv) As an additional accommodation, at X. Xxxx'x request, Lobito agrees to
produce up to five thousand (5,000) promotional quality comic books per
Issue. These promotional books will be delivered to various civic,
charitable, youth, church, benefit or community service organizations chosen
by X. Xxxx, in connection with any related personal appearances by Xx. Xxxxxx.
(c) Other than for transactions on a consignment basis, X. Xxxx'x share of
the net profits to date under this Section 5.1 shall be delivered to it
within forty five (45) days following the date on which each Issue is
released, together with an accurate accounting of the net profits, including
the numbers of copies of the Comic Book sold and returned. Lobito and Player
further agree that for any transaction involving a consignment sale, this
period shall be extended to ninety (90) days. For not less than two (2) years
following the most recent payment made under this Section 5.1 (c) such
statements shall be furnished to the Player not less than once every year,
whether or not any moneys are due to the Player for that year, together with
all sums indicated on said statement as being due and owing. In addition, X.
Xxxx shall have a five (5) year audit right regarding any monies due and
owing it as noted above in this Section. Lobito grants to X. Xxxx the right
to audit all statements issued by it for a period of five (5) calendar years.
5.2 Merchandising Royalties.
(a) X. Xxxx shall receive * percent (*) of the gross profits, if
any, collected by Lobito in connection with the merchandising rights granted
in Section 3(a) hereof during the term of this Agreement.
(b) For the purposes of this Section 5.2, "gross profits" is defined as the
amount of gross receipts (less all returns) collected by Lobito from whatever
source derived from the sale licensing, or use of all forms of merchandising
of the Character and/or Xxxx.
(c) X. Xxxx'x share of the gross profits to date under this Section 5.2 shall
be delivered to it within fifteen (15) days, together with an accurate
accounting of the gross profits. In addition, Lobito and X. Xxxx agree that
for any transaction involving a consignment, this period shall be extended to
seventy five (75) days as to the accounting of profits. For two (2) years
following the most recent payment made under this section 5.2 (c) such
statements shall be furnished to X. Xxxx, whether or not any moneys are due
to X. Xxxx for the applicable quarter, together with all sums indicated on
said statement as being due and owing. In addition, X. Xxxx shall have a five
(5) year audit right regarding any monies due and owing it as noted above in
this Section. Lobito grants to X. Xxxx the right to audit all all statements
issued by it for (5) five calendar years.
5.3 Film, Television, Multimedia, Interactive and Video.
5
[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.]
(a) (I) X. Xxxx shall receive * percent (*) of the gross
profits, if any, collected by Lobito in connection with the rights described
in Section 3.1 (b) hereof during the term of this Agreement.
(b) For the purpose of this Section 5.3, "gross profits" is defined as the
amount of gross receipts received by Lobito from whatever source derived
through the sale, exploitation or licensing of the Character and/or Xxxx from
film, television, multimedia (including CD-ROM, internet, videocassette,
laser disc, digital video disc, CD and cable) interactive and video payors.
(i) For the purposes of this Section 5.3, gross receipts exclude reasonable
and customary fees in the industry for like services earned by Lobito for the
individual services provided by employees of Lobito in connection with the
rights described in Section 3.1 (b) hereof.
(c) X. Xxxx'x share of the net profits to date under this Section 5.3 shall
be delivered to it within twenty one (21) days after (i) for each advance
received, the date of receipt of such advance, and (ii) for all other
payments, the end of each calendar year, together with an accurate accounting
of gross profits. For two (2) years following the most recent payment made
under this Section 5.3 (c), such statements shall be furnished to X. Xxxx,
whether or not any moneys are due X. Xxxx for the applicable quarter,
together with all sums indicated on said statement as being due and owing. In
addition, X. Xxxx shall have a five (5) year audit right regarding any monies
due and owing it as noted above in this Section. Lobito grants to X. Xxxx the
right to audit all statements issued by it for a period of five (5) calendar
years.
5.4 Records.
Lobito shall keep, maintain and preserve at its principal place of business
for two (2) years following its furnishing to X. Xxxx of a statement to be
submitted by Lobito pursuant to Section 5.3 of this Agreement, true books of
account containing a complete and accurate record covering all transactions
relating to this Agreement and pertaining to the various items required to be
shown on such statement. Each such statement shall be binding on X. Xxxx and
not subject to any objection unless such objection is made in writing,
stating in specific detail the nature of the objection and delivered to
Lobito within five (5) years after the receipt by X. Xxxx of the applicable
statement. Such records shall be available for inspection and review (and
copying at X. Xxxx'x expense) during Lobito's normal business hours no
earlier than five (5) days after Lobito receives X. Xxxx'x written notice and
shall be conducted in such a manner as to least interfere with Lobito's
normal business activities. If any such review discloses a deficiency between
the amounts reported as due X. Xxxx and the amount actually found to be due
to it, then Lobito shall pay X. Xxxx within thirty (30) days following its
receipt of X. Xxxx'x notification, (i) the omitted amounts, (ii) interest on
the omitted amounts from the date due at the lesser of one and one half
percent (1.5%) per month or the highest rate permitted by law, and (iii) if
any such deficiency exceeds five percent (5%) plus the reasonable costs and
fees of such review.
6. TERM AND TERMINATION
6.1 Term and Renewal. This Agreement shall have an initial term of three (3)
calendar years from the date of execution of same below, with an option on
the part of Lobito to renew for three consecutive additional one (1) year
periods, unless terminated in a writing
6
signed by all of the parties or as otherwise provided herein. X. Xxxx will
have a unilateral option to terminate this Agreement if it has not received a
minimum of one hundred fifty thousand dollars ($150,000.00) in payments from
Lobito by the conclusion of the third year of its duration.
In the event of the termination of the Agreement, the rights of ownership
noted above in Sections 4.1 and 4.2 will remain equally split at fifty
percent (50%) for Lobito and fifty percent (50%) for X. Xxxx.
6.2 Termination. If at any time the Comic Book is not profitable to Lobito,
then Lobito may, at its sole election, elect not to produce, distribute,
publish, release, exploit or make use of the rights granted Lobito in this
Agreement. In such event, this Agreement will terminate.
6.3 Default. In the event any party shall be in material breach in the
performance of any provision of this Agreement, ("Default") and such Default
is not cured within thirty (30) days following written notice thereof from
the other party of such Default, then upon the expiration of said (30) day
period, the party not in Default, at its own election, shall have the right
to terminate this Agreement upon written notice delivered to the other party
within ten (10) days after the end of said thirty (30) day period. Nothing
herein shall limit a party's ability to seek immediate equitable relief
(including injunctive relief) in such circumstances as it reasonably believes
that its interests hereunder or in its property may be compromised.
6.4 Effect of Termination of this Agreement. In the event of termination or
expiration of this Agreement:
(a) Lobito shall continue to enjoy all of the exclusive rights set out in
Section 3.1 of this Agreement with respect to each and every Issue of the
Comic Book, and each and every film, video or any other audio-visual work
which was produced during the term. Lobito's exclusive rights set out in
Section 3.1 of this Agreement with respect to Issues of the Comic Book,
films, videos, and other audio-visual works not already released shall
immediately terminate.
(b) Lobito's payment obligations shall survive until fully discharged, and
Lobito's other rights and obligations under this Agreement shall not be
diminished in any way. However, in the event that Lobito is not up to date or
timely with its prescribed payments to X. Xxxx, Lobito's rights hereunder
will be deemed suspended until such payments in arrears are made to X. Xxxx.
(c) The provisions of Section 4.1 hereof requiring the unanimous consent of
the parties shall survive any termination. Further, upon any termination or
expiration of this Agreement, all future uses, exploitation, merchandising,
or licensing related to the Character, the Xxxx or the Comic Book not
specifically granted herein shall be upon the unanimous written agreement of
the parties and each party agrees that it will not use, exploit or license or
grant to any third party the right to use, exploit or license the Character
or the Xxxx except as provided in this sentence.
(d) The ownership rights set out in Section 4.1 (a) and 4.2 (a) hereof shall
not be affected by any such termination or expiration.
7. INDEMNIFICATION
7.1 Indemnification.
7
Lobito will defend, at its own expense, any action, lawsuit or claim brought
against X. Xxxx in the United States and throughout the World that is based
upon an allegation that the Comic Book infringes any copyright or any
trademark rights cognizable under the laws of the United States or any state
thereof (hereinafter "Infringement"). Further, Lobito will also defend and
indemnify X. Xxxx, at its own expense, against any action, lawsuit, cause of
action or claim regarding any contract and/or other transaction it negotiates
involving X. Xxxx. Lobito agrees that it will pay all settlement costs and
all sums which by judgment or decree may be assessed against X. Xxxx as a
result of such litigation provided that Lobito shall be given (i) prompt
written notice of all claims against any such infringement and of any suits
brought or threatened against X. Xxxx, (ii) authority to assume the defense
thereof through its own counsel and to compromise or settle any such action,
lawsuit or claim, and (iii) all available information and reasonable
assistance to do so. The foregoing states the entire liability of Lobito with
respect to indemnity. No costs or expenses shall be incurred for the account
of Lobito by the X. Xxxx or its agents without the prior written consent of
Lobito.
7.2 Changes
X. Xxxx acknowledges that in the comic book industry, claims of infringement
are often raised in connection with copyrights and or trademarks, whether or
not such claims have any merit. X. Xxxx acknowledges and agrees that in the
event the Comic Book or any of its contents, including, but not limited to,
any text, artwork, designs, or characters which was contributed by it, or any
of the rights licensed by it to Lobito herein, including the use of the
Character or the Xxxx is the subject of a claim of infringement, Lobito, with
appropriate consultation from X. Xxxx, may change any of these so as to
render them non-infringing.
8. CONFIDENTIALITY
Each party agrees not to disclose or use any materials or information of the
other party which is marked confidential, proprietary, or the like, or in the
case of orally conveyed information, which is confirmed as being confidential
in writing within thirty (30) days of conveyance, except as may be necessary
to further the performance of this Agreement.
9. GENERAL
9.1 Assignment.
This agreement and the rights, duties and obligations of the parties hereto
shall not be assignable, transferable or delegable by any party hereto
without the prior written consent of the others, not to be unreasonably
withheld or delayed, and any purported assignment without such consent shall
be void, except that Lobito may assign this Agreement to any affiliate of
Lobito, or to any company which acquires Lobito or with which Lobito is
merged.
9.2 Miscellaneous
All notices specified to sent herein shall be sent by mail or overnight
courier, return receipt requested to the addresses first set out above.
Notices shall be deemed served when received. This Agreement is a binding
agreement and constitutes the complete, fmal and exclusive statements of the
terms of the agreement among the parties with respect to the subject matter
herein and supersedes any and all other agreements, written or oral, prior or
8
contemporaneous, with respect thereto. This Agreement cannot be modified
except by a written instrument signed by all of the parties. The parties are
independent contractors and this Agreement is not a partnership between
orjoint venture by the parties and no party is the agent for another. If any
one or more of the provisions contained herein or the application thereof in
any circumstance, is held invalid, illegal or unenforceable in any respect
and for any reason, the validity, legality and enfocreability of any such
provision in every other respect and to the remaining provisions hereof shall
not be affected or impaired in any way, it being intended that all the
parties rights and privileges arising hereunder shall be enforceable to the
fullest extent permitted by law. Any party shall be excused from performance
of its obligations hereunder to the extent and for such period of time as
such performance is prevented by an act of God, fire, earthquake, flood,
transportation disruption, war, insurrection, or other cause beyond the
reasonable control of such party.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto, their heirs, legal representatives, executors and administrators,
successors and permitted assigns.
9.3 Resolution of Controversy
Any controversy relating to this Agreement or the breach thereof shall be
first discussed at length by all the respective parties hereto. After such
discussion, if there has been no such resolution of the disputed points, the
aggrieved party or parties shall then have the right to pursue litigation in
the judicial forum of its/their choice as against the breaching party or
parties to the Agreement. Nothing contained in this Section 9.3 shall
prohibit a party from seeking equitable relief without first resorting to
litigation under such circumstances as that party's interests hereunder and
in its property will be otherwise compromised. In the eventlitigation is
initiated, each contracting party consents to California or Michigan as the
situs of jurisdiction.
IN THE WITNESS HEREOF, the parties hereto have caused this Agreement to be
signed on the day and year first written above.
/s/Xxxxx Xxxxxx
Xxxxxx Xxxxxx, on behalf of Xxxxx Xxxxxx, on behalf of X. Xxxx,
Lobito Publishing Group, A Inc., A Nevada Corporation
California Corporation.
Xxxx Xxxxx, Esq. Fallasha Xxxxx, Esq.
9
