EXHIBIT 10.26
INTERNET DISTRIBUTION AND MARKETING AGREEMENT
This DISTRIBUTION AND MARKETING AGREEMENT ("Agreement") is entered into
this 6th day of August, 1999, ("Effective Date") by and between Dreams Products,
Inc., a Utah corporation ("DPI") and Sportsprize Entertainment, Inc., a Nevada
corporation ("Distributor").
RECITALS:
WHEREAS, DPI creates, produces, buys, warehouses, markets and sells sports
and celebrity memorabilia and collectibles, and services and promotions related
to the sports memorabilia and collectibles ("Merchandise");
WHEREAS, from time to time DPI may create products specifically for
Distributor which products will be available only to Distributor.
WHEREAS, Distributor provides retail sales on the internet of sports
memorabilia and collectibles and related services; and
WHEREAS, DPI desires to distribute the Merchandise offered from time to
time in its available inventory and to sell to the retail market the services,
promotions and special events offered from time to time by DPI ("Catalog") on a
non-exclusive basis through the Internet website location owned and operated by
Distributor ("Website").
THEREFORE, in consideration of the mutual covenants, promises, agreements
and provisions contained herein and subject to the satisfaction of the terms and
conditions set forth herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE 1
GRANT OF DISTRIBUTION RIGHTS
Subject to the provisions of this Agreement, DPI hereby grants to
Distributor, and Distributor hereby accepts the following rights:
1.1 Internet Distribution Rights . Subject to the terms set forth herein,
DPI hereby grants to Distributor a non-exclusive, non-assignable, royalty-free
right and license during the term of this Agreement to market, promote and sell
over the Internet the Merchandise contained in DPI's Catalog, including the
right to: (i) offer the Merchandise to the public through the electronic medium
commonly known as the "Internet"; (ii) to take all Internet orders from
customers for the Merchandise in the DPI Catalog through the use of the Website;
(iii) maintain the database containing information regarding customer orders
over the Internet; (iv) xxxx and collect from such customers the retail price
for all orders for the Merchandise placed over the Internet; and (v) fulfill all
orders for the Merchandise made by use of the Internet by delivering or
arranging for delivery of the Merchandise ordered by customers over the
Internet. Distributor shall have the sole rights to
the information contained in the database compiled by it through use of the
Website ("Database"), including the full right to assign, transfer or sell the
rights and information contained therein. DPI shall have no rights in or to the
Database except that if Distributor should offer the Database to any third
party, Distributor shall offer the Database to DPI on the most favorable terms
it has offered it to any other party. DPI shall have the right to enter into
agreements of all kinds with other Internet distributors including without
limitation, agreements similar in nature to this Agreement.
1.2 [RESERVED]
1.3 Catalog Updates . From time to time during the term of this Agreement,
DPI shall as it notifies its other distributors, attempt to notify Distributor
in writing of any corrections, enhancements, revisions, updates, upgrades and
similar changes to the DPI Catalog. Upon such notification, Distributor, may at
its sole discretion, offer any such newly added Merchandise to customers through
its Website. The parties acknowledge and agree that DPI may, at its sole
discretion, make corrections, enhancements, revisions, updates, or other similar
changes to the DPI Catalog, and that such changes shall become a part of the DPI
Catalog as offered to DPI customers from time to time.
1.4 Shipping/Invoicing. Subject to the availability of inventory and
subject to satisfaction of payment terms, upon placement of an order for
Merchandise by Distributor, DPI agrees to immediately ship the ordered
Merchandise to Distributor, or such other party as Distributor shall designate
on terms FOB-DPI's warehouse.
1.5 Publicity and Promotion of Distributor. DPI agrees to allow Distributor
to publicize the existence of the distribution and marketing relationship
created by this Agreement, and to allow Distributor to use the "Mounted
Memories" name, but only in the manner set out below, on its Website, on any
promotional materials or at any promotional events as Distributor shall
reasonably request, subject to the standards and terms set forth in Section 2.4
and 2.6 hereof . Additionally, DPI agrees to use its best efforts to assist
Distributor at Distributor's expense reasonably cooperate within the promotion
of the Website. Distributor shall only use the Mounted Memories name and
trademark to identify Merchandise as produced by Mounted Memories and to
identify Distributor as an authorized dealer of Mounted Memories products and
for no other purpose.
ARTICLE 2
DISTRIBUTOR'S OBLIGATIONS
2.1 Payment. Distributor will pay for merchandise pursuant to the invoice
terms proposed by DPI. Distributor will promptly supply credit information as
requested. The prices to be charged Distributor for orders placed shall be such
amounts and upon such terms as shall be negotiated between the parties at the
time any order is placed.
2.2 Best Efforts. Throughout the term of this Agreement, Distributor shall
use its commercially reasonable best efforts to market, promote and maximize the
sale of the Merchandise through its Website.
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2.3. Promotion of the Merchandise by Distributor. Distributor shall
diligently and adequately: (a) engage in market research for the purpose of
identifying optimum marketing and distribution strategies; (b) advertise and
promote the Merchandise to potential customers through the promotion of its
Website, including establishing links to the Website on other Internet sites
that appeal to the optimum target market for the Merchandise; (c) advertise and
promote the Merchandise to potential customers, (d) employ staff or consultants
having adequate knowledge and training with respect to the Merchandise and the
distribution of the Merchandise; and (e) coordinate sales analyses and inventory
management information with DPI.
2.4 Marketing Practices. Distributor shall: (a) conduct its business in a
manner that reflects favorably at all times on the Merchandise and the good
name, goodwill and reputation of DPI; (b) avoid deceptive, misleading or
unethical practices that are or might be detrimental to DPI, the Product, or the
public, including without limitation disparagement of DPI or the Merchandise;
and (c) make no false or misleading representations or statements with regard to
DPI, the Merchandise, or any other products or services provided by Distributor
to its customers.
2.5 Website Maintenance. Distributor shall maintain the Website at such
Uniform Resource Locator ("URL") as Distributor shall choose. Distributor shall
operate and maintain the Website in accordance with the standards set forth in
Section 2.4 hereof. However, the URL shall not be or anything similar thereto.
Distributor shall notify DPI of any significant changes to the content or
structure of the Website within five (5) days following such change. Distributor
shall cooperate with DPI to resolve any concerns expressed by DPI that such a
change in the Website content or structure is adverse to the interests or
reputation of DPI.
2.6 Trademark Agreement. Distributor acknowledges the substantial value
associated with the trademark "Mounted Memories" (the "Xxxx") and the
substantial goodwill associated therewith. Accordingly, Distributor agrees only
to use the Xxxx on its website in the manner described in Section 1.5 above and
all uses of the Xxxx will be of the highest quality standards and of such style,
appearance and quality as to protect the Xxxx and all of DPI's interest in the
Xxxx. Further, Distributor shall only use the Xxxx in accordance with the
quality standards maintained by DPI (as they may change from time to time) and
Distributor shall submit to DPI all proposed uses of the Xxxx and DPI shall, in
its reasonable discretion approve or disapprove of any proposed use. Distributor
shall do nothing to disparage the Xxxx or cause the Xxxx to be less valuable,
including, without limitation, using the Xxxx on any page or site that contains
items or material which, if associated with the Xxxx, would cause any
disparagement of the Xxxx.
The parties agree that DPI has not prescribed and shall not provide
Distributor with any marketing plan or system relating to the business to be
conducted by Distributor, nor shall DPI provide any services or assistance to
Distributor in connection therewith. Distributor shall be free
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to operate its businesses in accordance with its own advertising, marketing and
operational systems, techniques, methods and plans, subject only to the limited
controls set forth herein, which the parties acknowledge are necessary in order
for DPI to protect its interests in its trademarks, service marks, and
copyrights.
No action, omission or statement by DPI or Distributor shall in any way
extend or grant to Distributor: (a) any rights of ownership with respect to the
Xxxx; or (b) any other rights in the Xxxx other than the license expressly
created by this Agreement. Distributor shall have no rights whatsoever, other
than the limited license herein granted, in either the Xxxx, any modification or
additions to the Xxxx, or any copyrights, trademarks, trade names, or service
marks which are in whole or in part derivative of the Xxxx, whether created by
Distributor, DPI or otherwise, all of which shall be the sole and exclusive
property of DPI. Distributor hereby assigns and transfers to DPI all of
Distributor's right, title and interest, throughout the universe in perpetuity,
in all copyrights and goodwill in and to the Xxxx, artwork, literary text,
instructions, cartons, containers, packing and wrapping material, tags, labels,
devices, and advertising and display materials created in connection with and
which items specifically and solely include the Xxxx, now in existence or
hereafter created by Distributor; and (b) all trademarks, trade names, and/or
service marks solely relating to the Xxxx created as a direct result of
Distributor's use of the Xxxx. Upon the request of DPI, Distributor shall sign
and deliver to DPI documentation in form and substance satisfactory to DPI
confirming and effecting the foregoing. Distributor agrees that it shall have no
rights to use and shall not use the trademark "Field of Dreams(R)".
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Each party represents and warrants to the other that: (a) it has the right,
power and authority to enter into and perform its obligations under this
Agreement; (b) the individual executing this Agreement is authorized to do so;
(c) neither the execution nor the performance of this Agreement will result in
any breach of any of such party's other contracts or obligations; (d) it has
sufficient rights and interests to grant the rights granted by it herein; (e)
neither the grant by such party nor the use by the other party of such rights
infringe or misappropriate the intellectual or proprietary rights of any third
party; and (f) it is sufficiently staffed and equipped to fulfill its
obligations under this Agreement. Additionally, DPI represents and warrants to
Distributor that the Merchandise is of an authentic nature, and is of such a
quality as to be fit for sale to the public as authentic memorabilia and
collectibles.
ARTICLE 4
CONFIDENTIALITY
4.1 Definition. "Confidential Information" means any and all information
disclosed by one party ("Owner") to the other party ("Recipient") that is
identified as "confidential" or "proprietary," either by legend on written or
electronically stored material, or in advance if disclosed
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verbally. Confidential Information includes, without limitation, research and
development, know-how, inventions, trade secrets, software, and market analysis,
research, strategies, projections and forecasts. Confidential Information also
includes, without limitation, information disclosed by Owner with permission
from a third party, and combinations of or with publicly known information where
the nature of the combination is not publicly known.
4.2. Protection of Confidential Information. Neither Distributor nor DPI
shall, with respect to any Confidential Information of the other of which one of
them is a Recipient, at any time, without the express prior written consent of
Owner, disclose or otherwise make known or available to any entity other than
Owner, or use for Recipient's own account, any of Owner's Confidential
Information. Recipient shall utilize all reasonable procedures to safeguard
Owner's Confidential Information, including limiting the release of Owner's
Confidential Information to Recipient's employees and consultants on a
"need-to-know" basis.
4.3 Publicity. Neither party shall originate or allow to be issued any
publicity or news release or otherwise make any public announcement or
statements, written or oral, with respect to this Agreement or the terms hereof
or the transactions contemplated hereby unless mutually agreed by the parties in
writing, which release shall not be unreasonably withheld, except as required
under securities laws or other applicable laws (including in connection with an
initial public offering). Neither party shall use the name of the other party or
any adaptation thereof or any of such other party's intellectual property in any
advertising, promotional or sales literature, or in any other form of publicity
without prior written consent (which consent will not be unreasonably withheld
or delayed) obtained from the other party in each case.
4.4 Use of Names. Each party agrees to protect from disclosures to any
third party any and all information received from the other party that
identifies an individual customer, including but not limited to names, telephone
numbers, e-mail addresses, and postal addresses. Each party agrees to remove,
upon request by the other party, from its databases and all other records,
electronic or otherwise, such customer identifying information.
ARTICLE 5
TERM AND TERMINATION
5.1 Term. This Agreement shall commence upon the Effective Date and,
subject to early termination pursuant to Section 5.2, shall continue in effect
until the third anniversary of the Effective Date ("Initial Term") and shall be
automatically renewed for successive one-year periods after the expiration of
the Initial Term unless either party provides the other party with written
notice of its intent not to renew this Agreement at least ninety (90) days prior
to the expiration of the then current term.
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5.2 Termination.
(a) Either party may terminate this Agreement upon thirty (30) days'
written notice to the other party.
(b) DPI may terminate this Agreement immediately if (i) Distributor
shall use the "Mounted Memories(TM)" or "Field of Dreams(R)" trademarks in
violation of this Agreement; or if Distributor shall materially
mischaracterize any of the Merchandise sold or offered for sale by
Distributor.
5.3 Effect of Termination .
(a) Upon termination of this Agreement, the provisions of Articles 1
and 2 regarding the rights and obligations of each party shall terminate,
provided however, that the parties will continue to perform all obligations
on pending orders of the purchase of Merchandise in accordance with the
terms of this Agreement.
(b) Promptly after all obligations to existing customers are performed
pursuant to clause (a) hereof, each party shall return to the other party
or certify in writing to the other party that it has destroyed all
documents and other tangible items it or its employees or agents have
received or created pertaining, referring or relating to the Confidential
Information of the other party.
(c) The provisions of Section 4 (Confidentiality), Section 5
(Termination), Section 6 (Indemnification) and Section 7 (Miscellaneous)
shall survive any expiration or termination of this Agreement.
ARTICLE 6
INDEMNIFICATION
6.1 Obligation. Subject to the provisions of this Article 6 each party
(each an "Indemnitor") hereby agrees to indemnify, defend and hold the other
party and its affiliates, directors, officers, employees, contractors and agents
(each an "Indemnitee") harmless, from, against and in respect of any and all
assessments, damages, deficiencies, judgments, losses, obligations and
liabilities, including costs of collection and reasonable attorneys' fees and
expenses (collectively, "Losses") incurred by the Indemnitee(s) arising from or
directly related to any breach by Indemnitor under this Agreement.
6.2 Defense of Claims. Indemnitor may assume the defense of any claim for
Losses. If Indemnitor assumes the defense of any claim for Losses, then, at
Indemnitor's expense, the Indemnitee and its counsel shall cooperate fully in
the defense against, or compromise of, at Indemnitor's option, such asserted
liability. The Indemnitee shall have the right to employ separate
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counsel in any such action or claim, but the fees and expenses of such counsel
shall not be an expense of Indemnitor unless employment of such counsel has been
specifically authorized by Indemnitor. If there is a final judgment in any such
action, or if there is a settlement of any such action effected with the consent
of Indemnitor, Indemnitor shall indemnify and hold harmless the Indemnitee from
and against any loss or liability by reason of such judgment or settlement.
6.3 Dispute Resolution.
(a) Mediation. Any dispute among or between the parties or any of them
arising under or in connection with this Agreement and the transactions and
relationship between the parties contemplated hereby will first be mediated
by a telephone conference or meeting, in which counsel for the respective
parties will attempt to aid the parties in negotiating a mutually
acceptable resolution.
(b) Arbitration. If mediation pursuant to the foregoing paragraph
fails to resolve any dispute arising or in connection with this Agreement
and the transactions and relationship between the parties contemplated
hereby, either party may provide 30 days prior written notification to the
other party of such failure to resolve the dispute. Upon such notification,
the parties shall enter into arbitration pursuant to this Section 6.3(b).
Such dispute will be finally settled by a single arbitrator, having at
least five years of experience as an arbitrator and otherwise mutually
acceptable to the parties to such dispute, in arbitration administered by
American Arbitration Association in accordance with its commercial
arbitration rules then in effect and the internal laws of the State of
Colorado. Any demand for arbitration hereunder must be made before the
running of the legal statute of limitations applicable to the claim at
issue. Any such arbitration will take place in the State of Florida, unless
otherwise agreed by the parties. The arbitrator will not have any right,
power, or authority to award any punitive or exemplary damages or other
damages in excess of purely compensatory damages. Each of the disputing
parties will be responsible for an equal portion of the fees and expenses
of the arbitrator, and all of such party's own costs and expenses, in
connection with any such arbitration. Judgment upon any award rendered by
the arbitrator, if such award is in accordance with applicable law and the
terms of this Agreement, may be entered in any court of competent
jurisdiction.
ARTICLE 7
MISCELLANEOUS
7.1 Independent Contractors . For all purposes of this Agreement, each
party shall be and act as an independent contractor or and not as partners,
joint venturers, employees or agents of the other. No franchise is created
hereby. Neither party shall have any express or implied right or authority to
assume or create any obligations on behalf of or in the name of the other party
or to bind the other party to any other contract, agreement or undertaking with
any third party except as specifically provided for herein.
7.2 Force Majeure . Neither party shall be liable or responsible in any
manner for failure or delay in performance of any obligation under this
Agreement when such failure or delay is due
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to the result, in whole or in substantial part, to any cause beyond the
reasonable control of the party whose performance is delayed or rendered
impossible thereby if reasonable steps are taken to resolve the reason for such
failure or delay and the reason for such failure or delay is promptly
transmitted to the other party. If the delay exceeds one hundred twenty (120)
days from the initial occurrence each party shall have the right to terminate
this agreement upon 30 days prior written notice to the other party.
7.3 Assignment. This Agreement and the provisions hereof shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their successors and assigns. Neither party may assign, transfer, or sublicense
its rights or obligations under this Agreement without the prior written consent
of the other party (which consent shall not be unreasonably withheld or delayed.
7.4 Notices. Any notices, waivers and other communications required or
permitted hereunder shall be in writing and shall be deemed to be fully given
when delivered by hand or dispatched (with reasonable evidence of receipt) by
telex, telegraph or other means of facsimile transmission, or twenty-four (24)
hours after being dispatched by recognized overnight courier or mail service,
addressed to the party to whom the notice is intended to be given at the
following or such other address as either party may designate by like notice:
DPI:
DPI
Attention: Xxxx Xxxxxxxxxx, President
0000 Xxxxxx Xxxx
Xxx Xxxx, Xxxxxxx 00000
COPY TO:
J. Xxxxx Xxxxxx, Esq.
Hunter & Xxxxx
000 Xxxxx Xxxx Xxxxxx, #0000
Xxxx Xxxx Xxxx, Xxxx 00000
Distributor:
Sportsprize Entertainment, Inc.
000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx
X0X 0X0
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7.5 Governing Law. This Agreement shall be construed in accordance with the
laws of the State of Utah, without regard for any choice or conflict of law rule
or principle that would result in the application of the substantive law of any
other jurisdiction.
7.6 Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall to any extent be invalid
or unenforceable, the remainder of this Agreement or the application of such
term or provisions to persons or circumstances other than those as to which it
is held invalid or unenforceable shall not be affected, and each term and
provision of this Agreement shall be valid and be enforced to the fullest extent
permitted by law.
7.7 No Third-Party Beneficiaries. No person(s) not a party to this
Agreement is an intended beneficiary of this Agreement, and no person(s) not a
party to this Agreement shall have any right to enforce any term of this
Agreement.
7.8 Waiver. No provision of this Agreement shall be deemed to have been
waived unless such waiver is in writing signed by the waiving party. No failure
by any party to insist upon the strict performance of any provision of this
Agreement, or to exercise any right to remedy consequent upon a breach thereof,
shall constitute a waiver of any other provision of this Agreement or a waiver
of such provision with respect to any subsequent breach, unless expressly
provided in writing.
7.9 Entire Agreement. This Agreement contains the entire understanding
between the parties relating to the subject matter hereof and supersedes all
prior or contemporaneous oral or written agreements on the same subject matter.
This Agreement may not be amended, supplemented, or otherwise modified except by
an agreement in writing signed by both parties.
7.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
7.11 Further Assurances. Each of the party's covenants and agrees that,
subsequent to the execution and delivery of this Agreement and without any
additional consideration, it will execute and deliver any further legal
instruments and perform any acts which are or may become reasonably necessary to
effectuate the purposes of this Agreement.
7.12 Captions. Titles and headings in this Agreement are for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
7.13 Attorney's Fees. In the event any action or proceeding is brought by
either party against the other under this Agreement, the prevailing party shall
be entitled to recover attorney's fees and costs in such amount as the court may
adjudge reasonable.
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7.14 Equitable Remedies. The parties agree that monetary damages may not be
a sufficient remedy in all instances of breach of this Agreement and the parties
agree that equitable remedies of any kind, including without limitation,
permanent and temporary injunction, shall be available to the party seeking
enforcement of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective
DREAMS PRODUCTS, INC.
a Utah corporation
By: /s/ [Illegible]
---------------------------------------
Name: Xxxx [Illegible]
-------------------------------------
Title: President
DISTRIBUTOR:
SPORTSPRIZE ENTERTAINMENT, INC.
a Nevada corporation
By: /s/ [Illegible]
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
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