EXHIBIT 10.46
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
The asterisked portions of this document have been
omitted and are filed separately with the Commission
LICENSE AGREEMENT
-----------------
This Agreement is made and entered into as of February 26, 1998 between
Film Roman, Inc. ("FRI") and Fox Kids Worldwide, Inc. ("FKW") in connection with
a television series intended for initial broadcast on the Fox Children's Network
("FCN") based on the "Mr. Potato Head" property (the "Property") controlled by
Claster Television ("Claster"), the production and certain distribution rights
to which have been licensed by Claster to FRI pursuant to an agreement of even
date herewith (the "FRI-Claster Agreement").
1. FKW hereby orders the production of at least thirteen (13) original
episodes of a weekly television series (format to be mutually agreed) based on
the Property (the "Series"). FKW will pay or reimburse FRI for the preparation
of a bible or mini-bible (as mutually determined by the parties) for the Series,
provided FKW has pre-approved the cost thereof in writing. The episodes of the
Series will be of U.S. network broadcast quality and will comply with FKW's
broadcast standards and practices. FKW will have approval over all creative
elements and key production personnel, including the executive producer (Xxxx
Xxxxxx is pre-approved), director (Xxxxx Xxxxxx is pre-approved), writer(s) and
story editor(s) (Xxxx Xxxxxxxx is pre-approved as writer/story editor), and key
talent. Xxxxxx Bros. Productions is pre-approved for puppet designs and
fabrications. The episodes will be delivered for initial broadcast on FCN
commencing in September 1998 pursuant to a mutually-approved production and
delivery schedule. Delivery of the episodes will be in accordance with a list
of delivery requirements (attached hereto as Exhibit "A") that are customary for
series of this nature, including without limitation stills, photos and footage
and other material for the purpose of creating promotional materials, including
without limitation daily bumpers and interstitials, all of which shall be
provided by FRI at no additional charge to FKW. At the conclusion of the FKW
Distribution Term (as defined in Paragraph 6 below), all episodes and
accompanying delivery materials delivered to FKW hereunder shall be immediately
returned to FRI. FKW agrees that two (2) of the thirteen (13) episodes will be
combined into a one (1) hour episode which must be exhibited in primetime on the
Fox Family Channel ("Cable").
-1-
2. The Series must initially be aired on FCN on Saturday mornings between
the hours of ****. The primetime special referred to in Paragraph 1 above must
be exhibited on ****. FCN must broadcast the regular Saturday morning episodes
on the full scope of FCN, which must achieve a minimum national NTI clearance
(measured on an annual basis as an average of all shows on FCN) of **** (****%)
of U.S. television households for free over-the-air broadcast (i.e., excluding
cable and DBS).
3. FKW will have the option, exercisable in writing no later than December
1, 1998, to order the production and delivery by FRI of a minimum of thirteen
(13) new episodes of the Series for the 1999/2000 broadcast season. FKW agrees
that two (2) of the episodes of the Series ordered and produced for the
1999/2000 season, if any, will be combined into a one (1) hour episode which
must be broadcast in primetime on ****.
4. FKW will have **** (****) additional, consecutive, dependent annual
options, exercisable in writing no later than December 1 of the preceding
broadcast season, to order a minimum of eight (8) new episodes of the Series for
the subsequent broadcast season. In the event FKW elects not to exercise any
annual option to order additional episodes of the Series, FRI or Claster
(subject to the terms of the FRI-Claster Agreement) will have the unrestricted
right to produce new episodes of the same and distribute them in all media
throughout the world in perpetuity without further obligation to FKW, FCN or
Cable.
5. In consideration for the rights granted by FRI to FKW hereunder, FKW
will pay FRI a license fee of **** Dollars ($****) for each of the first
thirteen (13) one-half (1/2) hour episodes of the Series ordered by FKW and
produced and delivered by FRI and accepted by FKW for the 1998/99 broadcast
season. Said license fee will be payable one-third (1/3) on commencement of the
script for the applicable episode, one-third (1/3) on commencement of principal
photography of the applicable episode, and one-third (1/3) on delivery of the
applicable episode and all mutually-agreed customary delivery materials to FKW,
and will increase by **** percent (****%) on a cumulative annual basis.
6. FKW will have exclusive U.S. television rights in and to all episodes
of the Series produced hereunder and all elements contained therein for a term
continuing until **** (****) years after the end of the last broadcast season
for which new episodes of the Series were ordered, produced and broadcast (the
"FKW Distribution Term"). FKW will have the right to unlimited exhibitions of
the episodes during the FKW Distribution Term, provided that the initial
exhibition of all episodes must occur on FCN and all subsequent exhibitions must
occur on FCN and/or Cable. Provided the episodes are of U.S. network broadcast
quality and comply with FKW's broadcast standards and practices, FKW agrees that
each episode of the Series produced and delivered by FRI will actually be
exhibited on FCN at least once (in accordance with all of the terms and
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-2-
conditions of this Agreement, including without limitation those set forth in
Paragraph 2 above). In addition, FKW agrees that if the Series is not being
aired on a regularly-scheduled basis for any consecutive **** (****) month
period during the FKW Distribution Term, then all rights granted to FKW
hereunder (including, without limitation, all U.S. television rights) in
connection with the Series will revert to FRI immediately (subject to the terms
of the FRI-Claster Agreement) and FKW will have no further rights in connection
therewith. Except as expressly provided herein, FRI or Claster (subject to the
terms of the FRI-Claster Agreement) will retain all other rights (including,
without limitation, all non-U.S. distribution rights) in and to the Series and
the Property in all media throughout the world in perpetuity.
7. All residuals arising from the exploitation of the Series for the first
ten (10) runs on FCN shall be the sole responsibility of FRI. FKW agrees to
execute an assumption agreement in connection with all other residuals arising
from FKW's exploitation of the Series (i.e., all subsequent FCN runs and all
Cable runs).
8. Additional standard terms and conditions consistent with industry
custom and practice for agreements of this type will be negotiated by the
parties in good faith. In addition, FRI will execute FKW's standard
indemnification agreement, a copy of which is attached hereto as Exhibit "B" and
the terms of which will be subject to good faith negotiations between the
parties.
AGREED TO AND ACCEPTED BY:
FILM ROMAN, INC. FOX KIDS WORLDWIDE, INC.
By: __________________________ By: _______________________________
Title: _______________________ Title: ____________________________
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-3-
EXHIBIT "A"
Delivery Requirements
(not yet finalized)
EXHIBIT "B"
Form of Indemnification Agreement
(not yet finalized)
-4-
