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ALL SECTIONS MARKED WITH TWO ASTERISKS ("**") REFLECT PORTIONS WHICH
HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION BY ALL AMERICAN COMMUNICATIONS, INC. AS PART OF A REQUEST FOR
CONFIDENTIAL TREATMENT.
[USA NETWORKS LETTERHEAD]
EXHIBIT 10.28
July 13, 1995
All American Television
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx Xxxxx
Gentlemen:
Reference is made to an agreement dated as of May 1, 1995 between USA
Networks ("USA") and All American Television ("All American") with respect to
the grant to USA of certain rights in four series of one hour television
programs, including BAYWATCH (the "Agreement"). All defined terms used herein
shall have the same meaning as set forth in the Agreement.
This letter will serve to clarify and amend Section 1(c) of the
Agreement. All American has represented and warranted to USA that **
is ** to ** in ** Baywatch Episodes in each of
the ** television seasons of Baywatch Episodes, if such seasons are
produced. Provided that ** so ** in ** Baywatch
Episodes during such season(s) (and also with respect to the **
television season) ** the ** then ** shall ** the rights to transmit the
Baywatch Episodes produced during such season pursuant to the terms
and conditions set forth in the Agreement. In the event **
the ** in ** Baywatch Episodes produced during a season,
** shall ** the right to transmit such season(s) of
Baywatch Episodes, ** may elect in its sole discretion, to do so.
In the event ** Baywatch Episodes in a television season in
which ** the ** in ** Baywatch
Episodes for such season, ** authorize or permit the transmission of
any such Baywatch Episodes within the Territory during or prior to the Term
other than over the USA Network Service, the Sci Fi Service or as expressly
permitted pursuant to Section 1(b) of the Agreement.
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Please acknowledge your acceptance and agreement with the foregoing by
signing all three copies of this letter in the space Accepted and Agreed
provided below. Please then return one fully-executed copy to USA. The other
two copies are for your files.
Very truly yours,
USA NETWORKS
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
ACCEPTED AND AGREED TO:
ALL AMERICAN TELEVISION
By: /s/ Xxxx Xxxxxxxx
-------------------------
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AGREEMENT dated as of May 1, 1995 between USA NETWORKS ("USA")'and
ALL-AMERICAN TELEVISION (the "Contractor"), with respect to the grant to USA
of certain rights in four (4) series of one-hour television programs as
follows: (i) BAYWATCH (each, a "Baywatch Episode"), (ii) ACAPULCO HEAT (each,
an "Acapulco Heat Episode"), (iii) SIRENS (each, a "Sirens Episode"), and (iv)
BAYWATCH NIGHTS (each, a "Baywatch Nights Episode"). All the Baywatch
Episodes, Acapulco Heat Episodes, Sirens Episodes and Baywatch Nights Episodes
together shall be referred to herein as the "Episodes" or the "Series." It is
specifically acknowledged by USA hereunder that there are 23 Baywatch hours
previously transmitted over NBC and 11 Sirens episodes previously transmitted
over ABC to which in each case Contractor does not control the distribution
rights. Such episodes shall not be included within the terms, "Baywatch
Episodes," "Sirens Episodes," "Episodes" and/or "Series" pursuant to this
Agreement.
1. The Episodes. (a) Contractor represents and warrants that it
owns and controls the exclusive right to distribute and license all the
Episodes of the Series and that through the 1995-96 television season there
are, or will be, 110 Baywatch Episodes, 22 Acapulco Heat Episodes, 22 Sirens
Episodes, and up to 22 Baywatch Nights Episodes. Baywatch Episodes and
Baywatch Nights Episodes may be produced and transmitted within the Territory
prior to and during the Term, but only in accordance with Sections 1(b) and
1(c) below. Contractor does not control the rights as to the production of
future Acapulco Heat Episodes and/or Sirens Episodes. Subject to such Sections
1(b) and 1(c) below, Contractor hereby grants to USA the exclusive right to
transmit, and authorize the transmission of, the Episodes of the Series, in the
English and Spanish languages, during
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the Term, within the United States and its territories and possessions
(including Puerto Rico; but USA shall have no Spanish language rights in Puerto
Rico) (the "Territory"). This right shall include, without limitation, the
right to distribute the Episodes to USA's affiliates, which may consist of
CATV, MDS, MMDS, SMATV, MATV, DBS, TVRO and/or similar services, for
transmission by such affiliates. USA (and such affiliates), however, shall
have the right to transmit the Episodes only as part of the USA Network program
service (the "USA Network Service") and/or the Sci-Fi Channel program service
(the "Sci-Fi Service").
(b) During the Term, except as set forth below in this
Section 1(b) and in Section 1(c) below, Contractor shall not transmit or
otherwise authorize the transmission of any Episodes or the Series (or any
promotions or advertisements of any kind or nature for future transmissions of
any Episodes or the Series), by any other means within the Territory,
including, without limitation, over-the-air television networks, over-the-air
television stations, basic or pay cable program services, locally-originated
cable channels or via video on demand. Notwithstanding the foregoing, or
anything else set forth in this Agreement, Contractor shall have the right to
distribute Baywatch Episodes number 67 and thereafter, via continuous,
first-run broadcast syndication within the Territory during the applicable
television season. For purposes of this Agreement, the term "broadcast
syndication" also shall include an over-the-air broadcast network that evolves
from broadcast syndication; but not ABC, CBS, NBC or Fox. However, such
syndicated stations may not transmit such first run Baywatch Episodes more than
two (2) times in a calendar week nor more than six (6) times total, and
in each event only during
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the applicable television season. No station in the syndication may be
"superstation." In addition, and also notwithstanding the foregoing, or
anything else set forth in this Agreement, Contractor shall have the right to
distribute Baywatch Nights Episodes via first run broadcast syndication within
the Territory during the 1995-96 television season. Such syndicated stations
also may not transmit such first run Baywatch Nights Episodes more than two (2)
times in a calendar week nor more than six (6) times total during the 1995-96
television season. No station in such syndication may be a "superstation."
Contractor also shall have the right to distribute the first 110 Baywatch
Episodes via broadcast syndication during the period commencing June 26, 1995
and ending September 19, 1997. However, no station may transmit the Baywatch
Episodes more than one time 2 day, and no station may be a "superstation."
(c) In the event a sixth (6th) season of Baywatch
Episodes is produced for first run broadcast syndication within the Territory
during the 1996-97 television season, and ** the **
in the Baywatch Episodes (and in the event ** the Baywatch
Episodes, Contractor shall use best efforts to have any Baywatch Episodes
in which ** on the ** then USA
also shall acquire all of such Baywatch Episodes (up to a maximum of 22) and
the total number of Baywatch Episodes shall increase to 132. In the event that
a seventh (7th) season of Baywatch Episodes is produced for first run
broadcast syndication within the Territory during the 1997-98 television
season, and ** the ** in the Baywatch
Episodes (and in the event ** the Baywatch Episodes,
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Contractor shall use best efforts to have any Baywatch Episodes in which
** on the ** then USA shall acquire all of such
Baywatch Episodes (up to a maximum of 22) under all the terms and conditions of
this Agreement, and the total number of Baywatch Episodes shall increase to
154. However, USA may not transmit any 7th season Baywatch Episodes prior to
such date in September 1998, which coincides with the conclusion of the 1997-98
television season. USA shall have no obligation to acquire any other Baywatch
Episodes, but no Baywatch Episodes, whether licensed hereunder or not, may be
transmitted within the Territory during or prior to the Term other than over
the USA Network Service, the Sci-Fi Service or as expressly permitted pursuant
to Section 1(b) above. However, USA acknowledges that the use of the **
"Baywatch" name, in and of itself, shall not mean that episodes or a series are
Baywatch Episodes (e.g. Baywatch Nights Episodes are not Baywatch Episodes).
2. Practices and Standards. USA shall have the right, in its
sole discretion, to edit and/or time compress any of the Episodes, and/or
delete any portion(s) thereof, (a) to ensure that each such Episode meets the
USA Network Service's and/or Sci-Fi Service's program practices and standards,
as the case may be, (b) to ensure that each such Episode meets the commercial
format of the USA Network Service and/or Sci-Fi Service, as the case may be,
and/or (c) to enable USA to insert such commercial advertising, promotional
and/or public service announcements in each such Episode as USA, in its sole
discretion, desires. USA also shall have the right, at its cost, to create its
own Spanish language and/or Spanish subtitled versions of the Episodes. In no
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event, however, shall any credits in any Episode be deleted or changed
(provided they are of customary length), including, without limitation, any
credits of Contractor or copyright notices (but USA may reduce the end credits
and/or copyright notices so that they can, be displayed on a split screen).
3. Term. (a) The initial term of this Agreement as to the
Baywatch Episodes shall commence as of September 22, 1997 and shall end on
September 21, 2000 (the "Baywatch Term"). The initial term of this Agreement
as to the Acapulco Heat Episodes shall commence on a date, on or before
September 30, 1995, to be specified by USA, in its sole discretion, and shall
end on the last day of the Baywatch Term. The initial term of this Agreement
as to the Sirens Episodes shall commence on October 2, 1995 and shall end on
the last day of the Baywatch Term. The initial term of this Agreement as to
the Baywatch Nights Episodes shall commence as of September 23, 1996 and shall
end on the last day of the Baywatch Term. The license periods for all of the
Series shall be referred to together as the "Term."
(b) USA has the option, exercisable by delivery of
written notice to Contractor, on or before January 1, 2000, to extend the Term
for a period of twelve (12) months (USA shall, upon request from the
Contractor, endeavor to give Contractor USA's intention as to whether or not it
will exercise such option, as early as November 1, 1999; but such intention
shall not be binding on USA) In such event, all of the terms and conditions
contained herein shall remain in full force and effect, except that the
additional consideration to be paid to Contractor shall be as set forth in
Section 6(b) below.
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(c) USA has the further option, regardless of whether or
not USA exercises its option pursuant to Section 3(b) above, exercisable, in
the event USA does not exercise such option, by delivery of written notice to
Contractor on or before November 1, 1999, and in the event USA does so exercise
such option, exercisable by delivery of written notice to Contractor, on or
before November 1, 2000, to extend the Term for an additional period of
thirty-six (36) months. In such event, all of the terms and conditions
contained herein shall remain in full force and effect, except that the
additional consideration to be paid to Contractor shall be as set forth in
Section 6(c) below. In the event USA does not exercise its option pursuant to
Section 3(b) above, and does exercise its option hereunder, the Term shall be
extended by thirty-six (36) months only and USA shall have no further rights
pursuant to Section 3(b) above.
(d) In the event Baywatch Nights Episodes are produced
for first run broadcast syndication within the Territory during the 1996-97
television season, then all of USA's rights under this Agreement with respect
to the Baywatch Nights Episodes shall terminate. In such event, Contractor
shall negotiate exclusively with USA with respect to the license of Baywatch
Nights Episodes within the Territory by any means other than continuous,
first-run syndication, for a period of thirty (30) days, commencing on such
date as Contractor and USA shall mutually agree upon, in good faith. In
determining the start date for this period, the parties shall take into account
whether or not future seasons of continuous, first-run syndication Baywatch
Nights Episodes will be produced. In no event shall Contractor negotiate with
any third party with respect to transmission rights to the Baywatch Nights
Episodes within the Territory prior to the end of such exclusive
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negotiation period (other than transmissions permitted pursuant to Section 1(b)
above). In the event that the parties are unable to reach a final agreement
during such period, the Contractor shall, on the last day of such period submit
to USA its final offer in writing (the "Offer"). USA then shall have ten (10)
business days to accept or reject the Offer. If USA rejects the Offer,
Contractor may enter into negotiations with any third party with respect to the
Baywatch Nights Episodes. In the event that Contractor reaches a tentative
agreement pertaining to the Baywatch Nights Episodes with any third party
(other than a broadcast syndicate) on terms and conditions less favorable to
Contractor than those contained in the Offer, then USA shall have a right of
first refusal, exercisable within ten (10) business days following receipt by
USA of written notice detailing the terms of the tentative third-party
agreement, as to any such agreement which Contractor intends to accept. USA
shall have no right of first refusal with respect to any broadcast syndication
agreement. It is understood that USA shall be required to meet only those
terms and conditions contained in the tentative third-party agreement which may
be met as readily by it as by any other party. If USA does not meet such terms
and conditions, Contractor will not enter into an agreement with such third
party on terms and conditions less favorable to it than those contained in the
notice of the tentative third-party agreement without again affording USA a
right of first refusal as above provided.
4. New Episodes. In the event that at any time Contractor ceases
producing new Baywatch Episodes during any television season and either the
producers and creators of the Baywatch Episodes ("BSB") and/or Contractor at
some later time desires to produce new Baywatch Episodes for television
transmission, then Contractor shall so
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notify (or cause BSB to so notify) USA in writing that it (or BSB, as the case
may be) desires to produce such new Baywatch Episodes. The parties then shall
negotiate exclusively with one another for a period of thirty (30) days in an
effort to conclude an agreement related thereto. If the parties are unable to
reach a final agreement during such time period, then USA, on the last day of
such period, shall submit to Contractor (or BSB, as the case may be) its final
offer in writing (the "Offer"). Contractor (or BSB, as the case may be) then
shall have ten (10) days to accept or reject the Offer. If Contractor (or BSB,
as the case may be) rejects the Offer, Contractor and/or BSB shall be free to
negotiate with any third party with respect to the licensing of new Baywatch
Episodes. In the event that Contractor and/or BSB reaches a tentative
agreement pertaining to such new Baywatch Episodes with any such third party
(other than a broadcast syndicate) on terms and conditions less favorable to
Contractor (and/or BSB, as the case may be) than those contained in the Offer,
then USA shall have a right of first refusal, exercisable within ten (10)
business days following receipt by USA of written notice detailing the terms of
the tentative third party agreement, as to any such tentative agreement which
Contractor or BSB, as the case may be, intends to accept. USA shall have no
right of first refusal with respect to any broadcast syndication agreement. It
is understood that USA shall be required to meet only those terms and
conditions contained in such tentative agreement which shall be readily
reducible to a determinable sum of money. If USA does not meet such terms and
conditions, neither Contractor nor BSB will enter into an agreement with such
third party on terms less favorable to it than those contained in the notice of
the tentative third-party agreement without again affording USA a right of
first refusal as above
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provided. In no event may any new Baywatch Episodes produced hereunder be
transmitted within the Territory during the Term other than via broadcast
syndication, and subject to the same limitations set forth in Section 1(b)
above. Contractor represents and warrants that BSB has agreed to the terms and
conditions set forth in this Section 4 to the extent they apply to BSB.
5. Transmissions. (a) USA may transmit each of the Episodes an
unlimited number of times during the Term. Such transmissions, if any, may be
at such times, on such days, and in such order as USA, in its sole discretion,
shall select. Nothing contained herein shall require USA to transmit any
Episode a minimum number of times, or at all.
(b) USA agrees to furnish to Contractor, within ten (10)
days after the end of each month during the Term, a report setting forth the
dates on which, and the number of times, each Episode provided hereunder was
transmitted by USA during such month.
6. Payment. (a) As full and complete consideration for the rights
granted herein, and assuming Contractor has fulfilled all of its material
obligations hereunder, USA shall pay to Contractor the aggregate amount of
Twenty-Five Million Three Hundred Thousand Dollars ($25,300,000). Such
aggregate amount shall be paid by USA to Contractor in thirty-six (36)
consecutive, equal monthly installments, each in the amount of Seven Hundred
Two Thousand Seven Hundred Seventy-Seven Dollars and Seventy-Eight Cents
($702,777.78), on or before the 15th day of each month, commencing with
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a payment due on or before September 15, 1997 and ending with a payment due, on
or before August 15, 2000.
(b) In the event USA acquires additional Baywatch Episodes
from the sixth (6th) season as set forth in Section 1(c) above, USA shall pay
to Contractor the amount of ** for each of such additional Baywatch
Episodes (for a total amount of ** if there are 22 such additional
Baywatch Episodes). All amounts to be paid hereunder shall be added to the
payments made pursuant to Section 6(a) above, and paid in accordance with the
same payment schedule.
(c) In the event USA acquires additional Baywatch Episodes
from the seventh (7th) season as set forth in Section 1(c) above, USA shall pay
to Contractor the amount of ** for each of such additional Baywatch
Episodes (for a total amount of ** if there are 22 such additional
Baywatch Episodes). All amounts to be paid hereunder shall be added to the
payments made pursuant to Section 6(a) above, but paid over the last 24 months
of such payment schedule.
(d) Subject to Section 6(f) below, in the event USA
exercises its option pursuant to Section 3(b) above, then USA shall pay to
Contractor an amount equal to (i) the number of Baywatch Episodes licensed
hereunder through the sixth season, multiplied by ** plus (ii) the number
of Baywatch Episodes licensed hereunder from the seventh season, if any,
multiplied by ** . This total amount shall be paid in twelve (12)
consecutive, equal monthly installments, on or before the 15th day of each
month, commencing with a payment due on or before September 15, 2000 and
ending with a payment due on or before August 15, 2001.
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(e) In the event USA exercises its option pursuant to
Section 3(c) above, in lieu of exercising its option pursuant to Section 3(b)
above, then USA shall pay to Contractor an amount equal to the number of
Baywatch Episodes licensed hereunder, multiplied by ** . This total
amount shall be paid in thirty-six (36) consecutive, equal monthly
installments, on or before the 15th day of each month, commencing with a
payment due on or before the 15th day of the first September of such option
period.
(f) In the event USA exercises its option pursuant to
Section 3(c) above in addition to having exercised its option pursuant to
Section 3(b) above, then USA shall pay to Contractor an amount equal to the
number of Baywatch Episodes licensed hereunder, multiplied by ** .
The payment schedule shall be the same as set forth in Section 6(e) above.
However, in such event the payments pursuant to Section 6(d) above shall be
adjusted so that USA pays an amount thereunder equal to the number of Baywatch
Episodes licensed thereunder multiplied by ** .
7. Delivery. (a) Contractor shall deliver each Episode hereunder to
USA at its executive offices in New York, New York, or at such other location
as USA may reasonably designate. All of the Acapulco Heat Episodes and Sirens
Episodes shall be delivered on or before July 1, 1995. All of the Baywatch
Nights Episodes shall be delivered on or before July 1, 1996. All of the
Baywatch Episodes shall be delivered on or about May 15, 1997; however the
7th-season Baywatch Episodes need not be delivered until on or about May 15,
1998. Each Episode shall be delivered in its original, unedited and uncut
version. Delivery of each Episode shall be at Contractor's sole cost and
expense. Each Episode shall consist of one (1), D-3 videotape, color-balanced,
in
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stereo, fully-titled with audio in perfect synchronization with the
photographic action, with Spanish language commentary on a separate audio
track, if available, meeting the video and audio technical standards of the USA
Network Service and Sci-Fi Service, and complete and suitable in all respects
for the transmissions authorized hereunder. USA shall, promptly after receipt
of each original videotape, reproduce each Episode thereon and promptly return,
at USA's expense, such original videotape to Contractor. USA also shall pay
the cost of each reproduction. In the event that the master videotape of any
Episode delivered hereunder is not of sufficient quality to meet the technical
requirements set forth herein, then USA may reject such videotape without any
penalty and Contractor shall promptly provide a corrected or substitute
videotape to USA. At Contractor's request, at the end of the Term, USA shall
erase or destroy each of the Episodes, and furnish Contractor with a
corresponding certificate of erasure or destruction.
(b) USA may use each Episode, or any excerpt(s) thereof (not
to exceed a total of three (3) minutes in length), for the following purposes:
(i) in perpetuity, for file, reference, audition, sales and publicity purposes,
(ii) prior to and during the Term, to advertise and publicize the particular
Episode or the Series, the USA Network Service and/or the Sci-Fi Service,
and/or the cable industry in general (however, with respect to Baywatch
Episodes, no advertisements or publicity aimed directly at consumers (e.g.
on-air promos) may be transmitted more than 90 days prior to the Baywatch Term),
and/or (iii) during the Term for the transmissions authorized hereunder.
During the Term, USA also may provide Episodes for inclusion in a promotional
cable service put together by TeleCommunications, Inc., entitled TV! None of
the transmissions of Episodes on TV!
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shall count as transmissions permitted pursuant to Section 5 above. However,
as between Contractor and USA, USA shall be liable for any residual or reuse
fees resulting from transmissions of Episodes on TV! USA will not receive any
compensation for supplying any Episodes to TV!
(c) Contractor shall deliver to USA, at no additional
charge, all existing promotional materials, if any, including videotaped
trailers, related to the Episodes and the Series to assist USA in its
exploitation thereof.
(d) Contractor shall reimburse USA, up to $750,000 total,
for all monies spent by USA during the fourth calendar quarter of 1997 to
advertise and promote the Series. As a result thereof, USA may deduct the
amount of $187,500 from each of the first four (4) installment payments to be
made by USA pursuant to Section 6(a) above. In addition, Contractor agrees to
use best efforts to have the regular performers in the Series make promotional
announcements for the Series which specifically refer to their transmission by
USA. At USA's request, Contractor also shall use best efforts to arrange for
such regular performers to make various promotional and press appearances on
behalf of USA.
(e) USA and Contractor agree to coordinate together in good
faith as to the timing and wording of any and all press releases.
8. Commercial Advertising. ** shall have the right to use ** the
minutes of commercial advertising time ** reserves in each Episode for such
purposes as ** in its sole discretion, desires. As between Contractor and
USA, ** shall be entitled to ** revenues derived from its ** of
such commercial advertising time.
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9. Representations and Warranties of Contractor. Contractor
represents and warrants that:
(a) Contractor owns or controls the entire and exclusive
distribution and transmission rights in and to each Episode and the Series
throughout the Territory, and has the full legal right, power and authority to
enter into and perform this Agreement and to grant the rights to USA contained
herein, including, without limitation, the right to transmit each Episode and
the Series as herein provided; the Episodes will not have been transmitted by
any means within the Territory prior to the Term other than via first run
broadcast syndication or as otherwise set forth in Section 1(b) above; there is
no outstanding contract, commitment, arrangement or legal impediment of any
kind which is in conflict with this Agreement or which might in any way limit,
restrict or impair the rights granted to USA hereunder; and Contractor, so long
as this Agreement remains in effect, will not grant or purport to grant to any
person rights of any kind in the Episodes or the Series, the exercise of which
will derogate from, or be inconsistent with, the rights granted to USA
hereunder;
(b) The Episodes and the Series licensed herein do not, and
the exercise by USA or by any of USA's affiliates of the rights herein granted
will not, infringe upon the common law rights, or the copyright, or the
literary, dramatic, music, motion picture, or patent rights, or the trademark
or tradename, of any person, and do not and will not violate the private, civil
or property rights, or the right of privacy, of any person,
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(c) The synchronization rights for the music contained in
the Episodes have been or will be obtained by Contractor hereunder and USA shall
have no liability for any payments in connection therewith; in addition,
Contractor represents and warrants that the performing rights for the music
contained in each Episode are (i) controlled by ASCAP, BMI, or SESAC, (ii)
controlled by Contractor, or (iii) in the public domain. USA agrees that, as
between Contractor and USA, in the event any fees are owing to a performing
rights society as set forth in (i) above, USA shall be liable for the payment
of such fees and shall indemnify and hold harmless Contractor against the
payment of any such fees. Contractor shall provide USA with appropriate cue
sheets as to any music included in the Episodes;
(d) In the production and making of each Episode, all
applicable collective bargaining agreements and all applicable rules and
regulations of any unions having jurisdiction in the premises were complied
with; all persons who performed services in or in connection with the Episodes
have received or shall receive full payment with respect thereto and with
respect to the transmission of each Episode provided in this Agreement; and no
fee, compensation or any other payment whatsoever will ever be payable by USA
to any producer, director, actor, writer or any other person who performed
services in or in connection with any Episode or the Series by reason of the
use thereof as provided in this Agreement;
(e) In connection with the Episodes distributed hereunder,
USA, any of USA's affiliates, each sponsor and such sponsor's advertising
agency, and each USA licensee, shall have the right and may grant to others the
right to reproduce, print, publish
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or disseminate in any medium, prior to and during the Term (however, with
respect to Baywatch Episodes, no advertisements or publicity aimed directly at
consumers may be transmitted more than 90 days prior to the Baywatch Term), the
portrait, picture, name, likeness, and voice of, and biographical material
concerning, each person appearing therein and all other persons connected with
the production of any Episode(s), any music, or excerpts thereof (whether
original or recomposed) in any Episode, the title of any Episode or of the
Series, Contractor's name and oral and/or visual portions of any Episode, any
excerpt of the script of any of the Episodes, or any artwork or design created
by or for Contractor in connection with any of the Episodes, as news or
information, for the purposes of trade or for advertising purposes; provided,
however, no direct endorsement by any such person of any product or service
shall be used without such person's consent; and
(f) Contractor shall procure and maintain so long as this
Agreement shall be in effect, at no cost to USA, a policy of television
producer's liability insurance applicable to all transmissions hereunder,
acceptable to USA, in amounts not to be less than $1,000,000/$3,000,000,
insuring USA and any of USA's affiliates against any and all liability covered
by such insurance resulting from the transmission hereunder of the Episodes;
such insurance has standard coverage, including, but not limited to, coverage
with respect to defamation, infringement of rights in material to be carried,
infringement of privacy rights, and the unauthorized use of materials in the
Episodes hereunder; and such policy includes a provision requiring the
insurance company to give USA prompt notice of any revision, modification or
cancellation thereof, Contractor will furnish USA
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with a certificate confirming the issuance of such insurance policy.
10. Representations and Warranties of USA. USA hereby represents
and warrants that it is free to enter into and fully perform the terms and
conditions of this Agreement and it has the full power and authority to do so.
11. Indemnification. (a) Contractor shall at all times indemnify and
hold harmless USA, its parents and affiliated entities, the sponsors of any
Episode or the Series, their respective advertising agencies, and any of USA's
affiliates, from and against any and all claims, damages, liabilities, costs
and expenses, including reasonable counsel fees, arising out of or based upon
any of the following,
(i) the transmission of any Episodes or Series in
accordance with the terms of this Agreement;
(ii) the authorized use of any materials furnished
by Contractor hereunder, or
(iii) any breach by Contractor of any
representation, warranty, or agreement made by Contractor herein.
(b) USA at all times shall indemnify and hold harmless
Contractor, its parents and affiliated entities, from and against any and all
claims, damages, liabilities, costs and expenses, including reasonable counsel
fees, arising out of or based upon any breach by USA of any representation,
warranty, or agreement made by USA herein.
(c) The indemnifications provided in Sections 11(a) and
11(b) above shall be subject to the condition that the party seeking
indemnification shall promptly notify the indemnifying party of any claim or
litigation for which indemnification is sought. The
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indemnifying party may, at its option, assume the defense of any such claim or
litigation. If the indemnifying party assumes the defense of any such claim or
litigation, its obligation with respect thereto shall be limited to holding
the indemnified party harmless from and against any loss, damage or cost caused
by or arising out of any judgment or settlement approved by the indemnifying
party in connection therewith.
(d) The party seeking indemnification shall fully
cooperate with the reasonable requests of the indemnifying party in its
participation in, and control of, any compromise, settlement, litigation or
other resolution or disposition of any such claim or litigation.
12. Force Majeure. If by reason of fire, flood, epidemic,
earthquake, explosion, accident, labor dispute or strike, act of God or a
public enemy, riot or civil disturbance, war (declared or undeclared) or armed
conflict, the failure of satellite, transponder or technical facilities, any
municipal ordinance, any state or federal law, governmental order or
regulation, or any thing or occurrence not within the parties' control (all
such events shall hereinafter be collectively called "Force Majeure Events"),
the delivery or transmission of any of the Baywatch Episodes is materially
hampered, interrupted or interfered with, USA or Contractor, as the case may
be, may suspend the Baywatch Term and/or the Term until such Force Majeure
Event has terminated. If the Baywatch Term and/or the Term is so suspended,
the Baywatch Term and/or the Term, as the case may be, shall be correspondingly
extended; provided, however, if such suspension continues for a period of three
(3) consecutive weeks, USA at any time thereafter during the suspension period,
upon written notice to the other party hereto, may terminate this Agreement.
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However, USA shall remain liable for its payment obligations or be entitled to
a refund of payments previously made, as the case may be, on a pro rata basis
based upon the remaining number of months of the Baywatch Term in relation to
the entire Baywatch Term. For purposes of this Section 12 and as a result of
any other event which may cause USA to receive less than the agreed upon number
of Baywatch Episodes hereunder, or less than the agreed amount of Term for any
Baywatch Episode, in addition to whatever other remedies, if any, USA may have,
any refund USA receives will be based upon the amount of ** per Episode for
the first 132 Baywatch Episodes and the amount of ** for Baywatch
Episodes 133-154.
13. Default. In the event of a material breach by either party
hereto (the "Defaulting Party") of any representation, warranty, agreement,
term, condition or provision of this Agreement, the other party hereto, in
addition to such other rights as it may have, shall have the right to terminate
this Agreement by giving written notice of termination of the Defaulting
Party; provided, however, that within fifteen (15) days following its receipt
of written notification from the other party detailing the nature of such
material breach and its intent to terminate this Agreement, the Defaulting
Party, if possible, may cure such breach and provide written notice thereof to
the other party; and provided, further, however, that Contractor shall have no
right to terminate, this Agreement hereunder unless the material breach
pertains to the Baywatch Episodes.
14. Independent Contractors. The parties hereto expressly agree
that the relationship between them hereunder is that of two principals dealing
with each other as independent contractors subject to the terms and conditions
of this Agreement. At no
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time, past, present or future, shall the relationship of the parties herein be
deemed or intended to constitute an agency, partnership, joint venture, or
collaboration for the purpose of sharing any profits or ownership in common.
Neither party shall have the right, power, or authority at any time to act on
behalf of, or represent, the other party, but each party hereto shall be
separately and entirely liable for its own debts in all respects.
15. Assignment. Contractor shall not assign its rights or
obligations under this Agreement to any third party without the prior written
consent of USA. However, no consent shall be required for any change in
ownership of Contractor or with respect to a sale of substantially all of
Contractor's assets, so long as the acquiring entity agrees to be bound by all
the terms and conditions of this Agreement
16. Notices. Any and all notices, communications, and demands
required or desired to be given hereunder by either party hereto shall be in
writing and shall be validly given or made if served personally, by telecopy,
by an overnight delivery service or if deposited in the United States mail,
certified or registered, postage prepaid, return receipt requested. If such
notice or demand is served personally or by telecopy, service shall be
conclusively deemed made on the same day (or if such day is not a business day,
then the next business day); if by an overnight delivery service, on the next
business day; and if by registered or certified mail in the manner above
provided on the second subsequent business day. To be effective, any service
hereunder shall be to the addresses set forth below:
CONTRACTOR: ALL AMERICAN TELEVISION
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx Xxxxx
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USA: USA NETWORKS
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Executive Vice President-
Business Affairs, Operations
and General Counsel
Copy to: USA NETWORKS
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Executive Vice President-Programming
Either party hereto may change its address for the purpose of receiving notices
or demands as herein provided by written notice given in the manner aforesaid
to the other party hereto, which notice of change of address shall not become
effective, however, until the actual receipt thereof by the other party.
17. New York Law. This Agreement shall be construed, interpreted
and enforced in accordance with and shall be governed by the laws of the State
of New York applicable to agreements entered into and wholly to be performed
therein.
18. Confidentiality. USA and Contractor each represents and
warrants that it shall not disclose to any third party (other than its
employees, in their capacity as such) any information with respect to the
financial terms and provisions of this Agreement except (a) to the extent
necessary to comply with the requirements of any guilds or unions, (b) to the
extent necessary to comply with law or the valid order of a court of competent
jurisdiction, in which event the party so complying shall so notify the other
party as promptly as practicable (and, if possible, prior to making any
disclosure) and shall seek confidential treatment of such information, (c) as
part of its normal reporting or review procedure to its parent company, its
auditors or its attorneys (and, in the case
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of Contractor, its financial advisors, third-party financiers or any other
party to which Contractor is required by agreement to disclose such
information), and USA or Contractor, as the case may be, shall advise such
third parties to keep such information confidential or (d) in order to enforce
its rights pursuant to this Agreement.
19. Miscellaneous. (a) This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter
hereof, and supersedes all prior agreements, arrangements and understandings
relating to the subject matter hereof.
(b) Any provision herein found by a court of law to be void
or unenforceable shall not affect the validity or enforceability of any other
provision of this Agreement.
(c) Each party hereto shall execute any and all further
documents which either party hereto may deem necessary and proper to carry out
the purposes of this Agreement.
(d) The construction of this Agreement shall not be
construed against the party causing its preparation, but shall be construed
as if both parties prepared this Agreement.
(e) All captions contained herein are for convenience of
reference only.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
ALL AMERICAN TELEVISION USA NETWORKS
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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