EXHIBIT 10.23
TELEVISION LETTER AGREEMENT
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The parties to this Agreement are TRAIL BLAZERS INC. ("Trail Blazers" or
"TBI") and MERCATA, INC. ("Advertiser"). Advertiser wishes to reserve
commercial time for advertising during television telecasts of the Trail
Blazers' National Basketball Association ("NBA") basketball games in accordance
with the provisions of this Agreement.
The parties agree as follows:
1. Sponsorship. This Agreement commences with the Trail Blazers' first
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pre-season game of the 1999-2000 NBA season and terminates with the last playoff
game in which the Trail Blazers participate following the 1999-2000 regular
season. The Trail Blazers will telecast, on a commercial television station in
the Xxxxxxxx, Xxxxxx xxxxxxxxxxxx xxxx, 00 preseason and/or regular season games
each season. In addition, the Trail Blazers may telecast some playoff games on
a commercial television station in the Portland, Oregon metropolitan area.
Advertiser hereby agrees to sponsor all games telecast by the Trail Blazers on a
commercial television station in the Portland, Oregon metropolitan area. Up to
five additional preseason and/or regular season games may be added by TBI in its
sole discretion upon reasonable notice to Advertiser and with a corresponding
proportionate increase in the Annual Fee. Except for "Bonus Coverage" as may be
set forth on the attached Schedule A, nothing contained in this Agreement will
entitle Advertiser to commercial time or obligate Advertiser to pay any fees
with respect to games cablecast or otherwise transmitted on other than a
commercial television station in the Portland, Oregon metropolitan area.
Advertiser's commercials will be telecast on an equal rotation basis within the
air time segment.
Advertiser hereby reserves and purchases the following commercial time
during telecasts of Trail Blazer games:
Thirty commercial seconds in the play-by-play portion of telecasts of
Trail Blazers games.
Format: One 30-second commercial
2. Promotions. In addition to the commercial time purchased above,
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Advertiser shall be entitled to the additional promotions and media specified in
the attached Schedule A, which is incorporated herein by reference.
3. Fees and Payment Schedule. In consideration for the commercial time
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and additional promotions and media to be received by Advertiser hereunder,
Advertiser agrees to pay a non-cancelable Annual Fee for each NBA season covered
by this Agreement and to pay a non-cancelable Additional Playoff Fee for each
playoff game in accordance with the following:
(a)
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Season Net Annual Fee/1/
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1999-2000 $130,000
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(b) The Annual Fee is payable as follows: TBI will send invoices to
Advertiser for the Annual Fee in six equal monthly installments beginning
November 1 of each season. Invoices will be considered to be past due if not
paid within 30 days after receipt.
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/1/ The Advertiser must provide all broadcast material in a ready-to-use
condition. Advertiser agrees to pay market rates for any production/creative
services provided by the Trail Blazers at Advertiser's written request.
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(c) An Additional Playoff Fee of $5,000 per game shall be charged for
each playoff game which is telecast by the Trail Blazers on a commercial
television station in the Portland, Oregon metropolitan area during the term of
this Agreement.
(d) Any Additional Playoff Fees will be payable as follows: TBI will,
following each playoff round in which the Trail Blazers televise games, send
invoices to Advertiser for the Additional Playoff Fees for playoff games
televised in such round. Invoices will be considered to be past due if not paid
within 30 days after receipt.
(e) A 1.5 percent late fee will be added to all invoices which become
past due and interest at a rate of 18 percent per annum will be charged on all
balances not paid within 30 days of when they are due.
4. Protection and Operative Clauses.
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(a) No rights of exclusivity are granted to Advertiser by this
Agreement and nothing contained herein shall limit in any manner the rights of
the Trail Blazers to sell commercial time during any of its telecasts for
advertisements to any other entity or for the advertisement of any product or
service.
(b) The script and tone of any advertising must conform to the
policies of the Trail Blazers and the telecasting station, each of which shall
have the continuing right to reject or edit telecast material to the extent
necessary to conform to such policies and as may be in the public interest. In
addition, Advertiser acknowledges that the Trail Blazers maintain a variety of
commercial relationships and, therefore, in the interest of protecting the
interests of all its sponsors, the Trail Blazers have the unilateral discretion
to reject advertising based on product category exclusivity, the incompatibility
or antithetical nature of the advertising, the tenor and object of the
advertising, or the promotion of a product or service either not in the category
for which Advertiser contracted or of an entity other than Advertiser. If any
advertising is so rejected, the Trail Blazers will provide Advertiser with 10
days' written notice of such rejection to allow Advertiser to furnish suitable
substitute advertising prior to the next scheduled telecast. Advertiser will be
entitled to a pro rata refund or a make good for any commercials it does not
receive as a result of such rejection.
(c) All advertisements will be in the form of videotape recordings,
half-inch, three-fourths-inch, one-inch or Beta format. Advertiser shall be
responsible for the content and quality of all commercial materials. All
advertising and commercial code-traffic instructions shall be delivered to the
Trail Blazers 10 days prior to telecast. Advertiser may change the content on 7
days' advance notice.
(d) If Advertiser's telecast material or code-traffic instructions are
not furnished by Advertiser in a timely manner, the Trail Blazers may utilize
any previously furnished material of Advertiser to fill spots reserved for
Advertiser for upcoming telecasts. No requirement as to air time product
separation regarding the scheduling of advertisements for competitive products
applies to this Agreement. Unless otherwise stated herein, no exclusivity
rights are granted to Advertiser.
(e) Advertiser will receive written deadline and specifications for
any print media referenced in this Agreement. Advertiser shall be responsible
for the content and quality of any print commercial productions. If
Advertiser's printed material is not furnished in a timely manner, the benefits
in this Agreement which involve printed material will be forfeited with no
financial rebates.
(f) All advertising material furnished to the Trail Blazers which is
not retrieved by Advertiser within two months following the end of the term of
this Agreement shall become the property of the Trail Blazers. This paragraph
is not intended to, nor shall it be construed to, give TBI any right, title or
interest in any of the trademarks, trade names, advertising slogans or
copyrighted material belonging to Advertiser, nor does this paragraph give TBI
use of the Advertising materials for any purpose other than to the extent
permitted herein during the term of this Agreement or the destruction of such
materials.
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(g) (1) Advertiser shall be entitled to, from time to time, make
reasonable use of TBI's name, trade names, trademarks and logos in connection
with advertising by Advertiser in the state of Oregon and the Portland, Oregon
metropolitan area; provided, however, that Advertiser shall only do so with the
prior written approval of TBI, which approval may be withheld in TBl's sole
discretion, and provided further that any advertising material making use of
such shall identify Advertiser as a "Proud Trail Blazers Sponsor." TBI
understands and agrees that Advertiser is the exclusive owner of Advertiser's
proprietary business models and technology, including but not limited to its
PowerBuy(TM) method of group buying, its We-Commerce(TM) technology and any
subsequent developments thereof. Advertiser does not grant TBI any right or
license, express or implied, in Advertiser's proprietary business models or
technology.
(2) TBI shall not, by this Agreement, obtain any right, title or
interest in Advertiser's name, trade names or logos, or Advertiser's proprietary
business methods and technology, including but not limited to its PowerBuy(TM)
method of demand aggregation. However, Advertiser grants TBI a royalty-free,
non-exclusive, worldwide license to organize, reproduce, create derivative works
from, publicly display, distribute and otherwise use Advertiser's name, trade
names or logos to provide the promotions and media described in Schedule A. All
such rights shall immediately terminate upon the termination of this Agreement.
(h) This Agreement is subject to all federal, state and municipal
laws and regulations now or hereafter in effect, including regulations,
decisions, actions and orders of the Federal Communications Commission, and in
addition is subject to the terms of any telecast license held by the television
station. This Agreement shall be construed in accordance with the laws of the
state of Oregon.
(i) (1) Advertiser shall indemnify, defend, and hold the Trail
Blazers harmless from and against any and all claims, damages, loss, liability
or expense, including attorneys' fees and the cost of any legal proceedings,
arising out of the advertisements furnished by Advertiser, including but not
limited to claims, actions or proceedings, and any appeal, for libel, slander,
invasion of privacy, infringement of copyright or license, unfair or improper
trade practices, other wrongful business conduct, or conduct in violation of the
rules and regulations of the Federal Trade Commission and analogous state
agencies. This indemnity shall specifically extend to the television station
telecasting such advertisements.
(2) TBI shall indemnify, defend, and hold Advertiser harmless
from and against any and all claims, damages, loss, liability or expense,
including attorney fees and the cost of any legal proceedings, arising out of
TBI's improper use of the advertisements, trademarks, trade names or logos
furnished by Advertiser.
(j) If legal proceedings or arbitration proceedings are initiated by
either party to enforce or interpret this Agreement, the party prevailing in any
suit, action or proceeding, and in any appeal therefrom, shall be entitled to
recover its reasonable attorney fees as fixed by the court in which the action
is tried or in which the appeal is heard or by the arbitrator who hears the
proceeding. Additionally, in the event that Advertiser seeks the protection of
or becomes the subject of proceedings in the United States Bankruptcy Court, the
Trail Blazers shall be entitled to recover its reasonable attorney fees incurred
in such proceedings as fixed by such court.
(k) If after 7 days advance written notice from TBI, Advertiser fails
to pay any overdue invoice (a "Default"), the entire Annual Fee for the
remainder of the term of this Agreement shall become immediately due and
payable. If the entire Annual Fee is not paid within 7 days of receipt by
Advertiser of a notice of Default, the Trail Blazers may immediately terminate
this Agreement in addition to seeking whatever other relief is afforded by
applicable law.
(l) Either party may terminate this Agreement upon the cancellation
or termination of the Trail Blazers' NBA franchise or the relocation of the
Trail Blazers' franchise to a location more than 50 miles from Portland, Oregon.
In such event, Advertiser will receive a pro rata refund based upon the number
of commercials not delivered.
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(m) In no event shall either party be liable for any special,
incidental, or consequential damages or loss of profits arising out of or
relating to any breach of this Agreement. The exclusive remedies for Advertiser
in the event of a breach by TBI shall be a suitable make good and a pro rata
compensating credit for lost time.
(n) Neither this Agreement nor the rights hereunder may be assigned
by Advertiser without the prior written consent of the Trail Blazers which
consent may be withheld in the sole discretion of the Trail Blazers.
5. Right of Refusal. Subject to another advertiser purchasing
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exclusivity in the retail e-commerce web site category, Advertiser shall have a
right of first refusal with respect to advertising time offered by the Trail
Blazers for local telecasts of selected games for the 2000-2001 season, on terms
and conditions then being offered by the Trail Blazers. This right shall only
apply to placements the same as those provided for in this Agreement and must be
exercised by executing and returning to the Trail Blazers the Letter Agreement
for the 2000-2001 season within 15 days after it is presented to either
Advertiser or Advertiser's agent.
6. Limitations. This contract requires Advertiser to abide by the
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Constitution and Bylaws and other rules and regulations of the National
Basketball Association as they presently exist or as they may from time to time
be amended.
7. Notices. All notices to be given pursuant to this Agreement shall be
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in writing and shall be deemed received when personally delivered or three
business days after deposit in regular mail addressed to the address as set
forth below. Either party may change such address by written notice to the
other party of such change.
8. Entire Agreement. This Agreement constitutes the entire agreement and
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understanding between the parties and may be amended only by a written
instrument executed by them.
EXECUTED as of this 1st day of October, 1999.
TRAIL BLAZERS INC. ADVERTISER
By: /s/ X. Xxxxxx By: /s/ Xxx Xxx Xxxx
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Title: VP Sales & Service Title: President and CEO
Xxx Xxxxxx Xxxxx, Xxxxx 000 110 - 110th Ave. NE
Xxxxxxxx, Xxxxxx 00000 Xxxxxxxx, XX 00000-0000
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SCHEDULE A
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. Advertiser will receive one full page, four-color ad in Hoop Magazine
(artwork to be provided color separated and camera-ready by sponsor)
starting with the December issue. Advertiser will be subject to the same
requirements as other Hoop Magazine advertisers.
. Advertiser will receive, as a bonus, 13 commercials on the Blazers
statewide television/cable network.
. Advertiser will receive sponsorship of one (1) in-game feature ("Mercata
Power Play of the Game") in 26 games on KGW-TV and 25 BlazerVision cable
games. The feature will include an on-screen graphic and a live announcer
read such as "Tonight's Mercata Power Play of the Game, brought to you by
Mercata. Go on-line and check out tonight's Mercata PowerBuy Deals, such as
. . ."
. Advertiser will receive one "live" half-time PowerBuy announcement each
game. Announcement will include a graphic of Mercata's home page and a
special PowerBuy announcement featuring the "PowerBuy Deal of the Day" and
its price at the start of the game. PowerBuy feature will come from one of
Mercata's key categories: Appliances, Baby, Home and Kitchen, Consumer
Electronics, Gifts and Gadgets, Hobbies, Holiday, Lawn and Garden, Luggage,
Hand and Power Tools, Watches and Jewelry, or Sports and Fitness.
. Advertiser will receive one in-arena promotion: a minimum of twenty (20)
AstroVision features during Blazers games that will include logo
identification for Mercata.
. Advertiser will receive two (2) "Mercata Minute" commercials during each of
six half-hour TV specials on KGW-TV. The "Mercata Minute" will showcase
weekly PowerBuy updates and the Mercata home page.
. Advertiser will receive a total of 12 "Mercata Minute" features during six
(6) half-hour TV specials on KGW-TV.
. Advertiser will receive two (2) opening, middle or closing billboards
during each of six (6) half-hour TV specials on KGW-TV.
. Advertiser will receive banner advertisements on XXXXXXXXXXX.XXX together
with a direct "hotlink" to Advertiser's home page, currently located at
xxxxxxx.xxx.
. Advertiser will receive a banner advertisement on XXXXXXX.XXX, TBI's
Internet team home page on XXX.XXX, together with a "hotlink" to
Advertiser's home page, subject to the following: (1) this Agreement, any
link from such banner (the "Link"), the banner artwork and the destination
page of the Link must be submitted to, and approved by in writing, NBA
Properties, in its sole discretion, before posting, (2) the Link must be
directly to Advertiser's web site and not to any "bridge" or transactional
page or stand alone site (unless otherwise required by the NBA), (3) if the
Advertiser is engaged in an advertising category in which an NBA sponsor
competes, the Link must not point to any information on the sponsor's site
that is related to basketball, the NBA, or include any content that creates
the impression that Advertiser is associated or affiliated with the NBA or
another team, a player in uniform, or a coach, (4) this Agreement and
specifically this benefit are subject to the Constitution and Bylaws and
other rules and regulations of the NBA as they presently exist or as they
may from time to time be amended, and (5) this benefit will expire on the
earlier of the end of this contract or October 1, 2000, unless the NBA
allows such links to continue for subsequent seasons.
. Subject to NBA approval, Advertiser will receive 20 pieces of Blazers
merchandise, at cost, to be featured on the Mercata web site.
5.
