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EXHIBIT 10.3
LICENSE AGREEMENT
1. IDENTIFICATION: This license agreement (this "Agreement") is dated as
of the 6th day of October, 1995 and is entered into between Xxxx
Xxxxxxx Productions, LLC, a New York limited liability company
("Licensor") (presently directly or indirectly owned jointly by All
American Communications, Inc. ("AACI") and The Interpublic Group of
Companies, Inc. ("Interpublic")); and All American Xxxxxxx, Inc., a
wholly-owned subsidiary of AACI ("AAG"), whose address is 1325 Avenue
of the Americas, New York, N.Y. 10019 ("Licensee"), with respect to
the Library Rights, Library Physical Properties, Programs or portions
thereof or rights therein being acquired pursuant to the Asset
Purchase Agreement referred to below. All numbered schedules set
forth herein correspond to the numbered schedules contained in the
Asset Purchase Agreement dated as of October 6, 1995 between Licensor,
Interpublic and AACI on the one hand, and Xxxx Xxxxxxx Productions,
L.P., The Child's Play Company and the Estate of Xxxx Xxxxxxx, on the
other hand (the "Asset Purchase Agreement"). Capitalized terms used
herein without definition shall have the respective meanings set forth
in the Asset Purchase Agreement.
2. RIGHTS: GRANT OF RIGHTS. Subject to the terms and conditions of this
Agreement and the existing licenses listed on Schedule I hereto (the
"Existing Agreements"), during the Term and within the Territories (as
defined below), Licensor hereby grants to Licensee the following:
a) An exclusive license:
i. To produce and record New Episodes based on the
Licensed Formats in the Territories, which right
includes the right to modify the Licensed Formats to
the extent necessary to produce and record the New
Episodes;
ii. To distribute New Episodes and Library Episodes by
any means of broadcast or exhibition, which
distribution right includes the right to copy,
modify, distribute, license, publicly display and
publicly perform the New Episodes and the Library
Episodes; and
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iii. To market, broadcast, transmit, exhibit or otherwise
exploit for commercial purposes New Episodes and
Library Episodes.
b) A nonexclusive license, for the sole purpose of promoting and
advertising the New Episodes or the Library Episodes:
i. To make and publish, in any and all languages,
synopses of the New Episodes or Library Episodes; and
ii. To make, exhibit and market television motion picture
trailers, sound records or stills based upon or
adapted from the New Episodes or Library Episodes.
c) A nonexclusive license to use the Licensed Trademarks in
connection with the production of the New Episodes and the
distribution of the New Episodes and the Library Episodes in
the Territories as permitted by clauses (a) and (b) above.
During the term of this Agreement, Licensee shall have the right to
sublicense to Affiliates as provided in paragraphs 4(b) and 4(c) and
to sublicense nonaffiliated third parties to exploit the rights
granted in clauses (a) through (c) above, which sublicense may be on
an exclusive basis to the extent Licensee has exclusive rights
hereunder. Licensee agrees that any such sublicense shall not conflict
with the terms of this Agreement, and further agrees that in the case
of sublicenses relating to the AAFI Territory, unless Licensor shall
otherwise agree (which agreement will not be unreasonably withheld or
delayed), such sublicenses shall contain provisions that indemnify
Licensee from and against all taxes and excises (other than income
taxes) imposed on or levied against Licensee under any applicable law
of the AAFI Territory from time to time relating to the granting and
the exploitation of the rights granted to the sublicensee under any
such sublicense agreement. Prior to entering into any sublicense of
its rights hereunder, Licensee shall obtain Licensor's approval, which
approval shall not be unreasonably withheld or delayed. Licensor
shall have 10 business days to approve a draft of the sublicense and
if Licensor shall not have disapproved such sublicense within such
time period such sublicense shall be deemed to have been approved by
Licensor. In connection with the foregoing, the Network Production
Agreement, the Network License Agreement (each as defined in the Asset
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Purchase Agreement) and the licenses referenced in paragraphs 4(b) and
4(c) are hereby approved by Licensor.
3. TERM: The term of this Agreement (the "Term") commences on the
effective date hereof and, unless and until this Agreement is
terminated as provided in paragraph 24, shall continue for a term of
ninety (90) years, and thereafter, shall be automatically renewed for
additional periods of thirty (30) years unless terminated by notice
from either party hereto.
Notwithstanding anything else contained in this Agreement, in the
event of the termination of this Agreement during the "Term" of the
Network License Agreement, unless and until such time as Licensor has
entered into a new license agreement with Interpublic Sub
substantially in the form of the Network License Agreement (unless
otherwise agreed by Producer), AAG shall be deemed to have assigned
all of its rights pursuant to the Network License Agreement after such
termination to Licensor and Licensor shall automatically be deemed to
have entered into a license on the terms of the Network License
Agreement with respect to "The Price Is Right" for the remaining
period thereof after such termination in favor of Interpublic Sub as
licensee. Licensor shall use its reasonable best efforts to provide
Producer, with the personnel, including on-screen talent, to produce
"The Price Is Right" during the Term of the Network License Agreement.
4. TERRITORIES: AAG's territorial rights hereunder shall consist of the
entire universe (the "Territories"). Concurrently herewith, AAG is
entering into three sublicenses:
(a) a network license agreement with Interpublic Sub with respect
to "The Price Is Right" attached as Exhibit 8.4(a)(vii)(a) to
the Asset Purchase Agreement (it being understood that
Licensor has assigned all of its rights and obligations under
the CBS Network License, through AAG, to Interpublic Sub);
(b) a license with All American Television II, Inc. ("AATV")
limited to the following territories (the "AATV Territories"):
the United States, its territories and possessions and Canada
attached as Exhibit A hereto; and
(c) a license with All American Fremantle II, Inc. ("AAFI")
limited to the following territories (the "AAFI Territories"):
the world, excluding the United States,
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its territories and possessions and Canada attached as Exhibit
B hereto.
5. AFFILIATED TRANSACTIONS: Except as provided in paragraphs 4(b) and
4(c), Licensee shall not enter into any agreement or engage in any
transaction with any Affiliate with respect to the production,
distribution, licensing or other exploitation of the Library Rights,
Library Physical Properties, Programs or portions thereof or rights
therein being acquired pursuant to the Asset Purchase Agreement
without the prior written consent of Licensor (such consent not to be
unreasonably withheld or delayed). Notwithstanding the foregoing, if
Licensee does enter into sublicenses with its Affiliates, such
affiliated sublicensees (including AATV and AAFI) shall not be
entitled to any fees or other compensation, including, without
limitation, any distribution fees, under or in connection with their
respective sublicenses.
6. BEST EFFORTS: Licensee undertakes to use its reasonable best efforts
to actively promote and to distribute any New Episodes and the Library
Episodes and to maximize the amount of profits generated by the
production, distribution, licensing or other exploitation of the
Programs in the AATV and the AAFI Territories.
7. LICENSING AND COLLECTIONS: Licensee shall, and shall use reasonable
best efforts to cause its sublicensees (other than Interpublic Sub)
to, enter into license agreements covering the Programs and to xxxx
and collect all revenues in connection with the exploitation of the
Programs. Licensee shall notify Licensor of any material breach,
including, without limitation, a breach of a payment obligation, by
any sublicensee of such license agreements. Such notice shall set
forth the actions, if any, that Licensee proposes to take in respect
of curing such breach. If the breach has not been cured within 15
days of the date of such breach, Licensor shall have the right to act
on behalf of Licensee to remedy such breach and Licensee shall use its
reasonable best efforts to assist Licensor in connection therewith.
8. MARKETING AND DISTRIBUTION: Licensee shall be, and shall use
reasonable best efforts to cause its sublicensees (other than
Interpublic Sub) to be, responsible for the marketing and physical
distribution of the Programs and shall discharge and pay for all costs
in connection therewith (e.g., tapes, editing, traffic, shipping,
convention expenses, travel and entertainment, advertising and
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promotion, collection costs, station compensation, residuals, etc.).
9. DELIVERY: Licensor shall deliver to Licensee or, at Licensee's
direction, its sublicensees copies of such tape material in its
possession or under its control with respect to each Program as
Licensee may reasonably require, which material may be duplicated at
Licensee's sole cost (such reproductions hereinafter referred to as
"Videotapes"). Licensor shall deliver to Licensee or, at Licensee's
direction, its sublicensees all available promotional elements
(including diagrams, blueprints, advertising material and the like)
for purposes of creating sales materials for the distribution efforts.
10. DIVISION OF REVENUES:
The division of revenues between Licensor and Licensee shall be in
accordance with Schedule II hereto which is incorporated by reference
herein.
11. EDITING AND MODIFICATIONS:
Licensee shall not have the right to edit any Library Episode
in any material respect unless Licensee shall have first
described to Licensor in writing the desired edits, and
received from Licensor its prior consent to the proposed
edits, which consent shall not be unreasonably withheld.
Licensor's prior consent shall not be necessary, however,
where the desired edits are made solely for the purpose of
ensuring that the Library Episode complies with the applicable
statute, regulation, rules, standards, orders, requests or
other requirements of any competent governmental body within
the Territory. Notwithstanding the foregoing, Licensee shall
not have right to delete the credits or copyright notices that
appear in any Library Episode.
12. REPRESENTATION AND WARRANTIES:
a. Licensor represents, warrants and agrees as follows:
i) To the best of Licensor's knowledge and except as
disclosed in the Asset Purchase Agreement and the
Schedules thereto, Licensor owns or controls the
copyrights to the Programs to the extent herein
granted, and, to the best of Licensor's knowledge,
that there are no liens, claims or encumbrances
whatsoever adversely affecting or that would in
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any way prejudice Licensor's grant of rights to
Licensee herein;
ii) To the best of Licensor's knowledge and except as
disclosed in the Asset Purchase Agreement and the
Schedules thereto, neither the Programs nor any part
thereof (including without limitation their titles),
nor the exploitation of the rights granted herein,
defames or constitutes unfair competition with any
third party, violates any law or violates or
infringes upon the trademark, trade name, copyright,
right of privacy, right of publicity or any other
right of any third party;
iii) To the best of Licensor's knowledge and except as
disclosed in the Asset Purchase Agreement and the
Schedules thereto, (a) Licensor has acquired all
literary, dramatic, musical and other rights required
for the full and quiet enjoyment of all of the rights
granted herein, and (b) performance rights to all
musical compositions contained in the Programs are
(1) controlled by ASCAP, BMI, SESAC or their
affiliates, (2) in the public domain, or (3)
controlled by Licensor;
iv) To the best of Licensor's knowledge and except as
disclosed in the Asset Purchase Agreement and the
Schedules thereto, the credits appearing on the
Library Episodes, as delivered, are correct and
consistent with all credit obligations to third
parties;
v) To the best of Licensor's knowledge and except as
disclosed in the Asset Purchase Agreement and the
Schedules thereto, Licensor has not made or purported
to make any grant, license, assignment or other
transfer consistent with or that would in any way
prejudice Licensor's grant of rights to Licensee and
its sublicensees herein; and
vi) To the best of Licensor's knowledge and except as
disclosed in the Asset Purchase Agreement and the
Schedules thereto, Licensor has the right to enter
into this Agreement and to grant all rights herein
granted and to perform fully all of Licensor's
obligations hereunder.
For purposes of these representations and warranties,
Licensee is deemed to have knowledge of all matters
disclosed to Licensor by the
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Sellers in the Asset Purchase Agreement and the
Schedules thereto.
b. Licensee represents, warrants and agrees as follows:
i) That Licensee has the right to enter into this
Agreement and to perform fully all of Licensee's
obligations hereunder;
ii) That Licensee and its sublicensees, other than
Interpublic Sub, shall fully pay and discharge in a
timely manner any obligations under any and all
union, guild and/or residual agreements arising in
connection with the production, distribution,
licensing or other exploitation of the Programs other
than guild and/or residual obligations arising prior
to the effective date hereof or under the license
referred to in paragraph 4(a) which shall be assumed
by the Partnership.
iii) To the extent that Licensee makes any union, guild
and/or residual payments and is ultimately unable to
recoup such payments with respect to Library
Episodes, Licensee shall be indemnified by Licensor
with respect thereto.
13. COPYRIGHTS:
(a) Pursuant to this Agreement, Licensor has commissioned Licensee
to produce and record the New Episodes; and to the extent
necessary for distribution in certain jurisdictions, to modify
the Licensed Formats (to create Modified Formats) and Library
Episodes (to create Modified Library Episodes); and to create
materials to advertise and promote the foregoing. To the
extent permitted by applicable law, Licensee acknowledges and
agrees that Licensor shall be the sole and original owner of,
and shall have sole and exclusive right, title and interest in
and to, the New Episodes, the Modified Formats, the Modified
Library Episodes, the advertising and promotional materials
relating thereto, and all copyright rights therein throughout
the world, including without limitation, all extensions and
renewals thereof and all causes of action related to any
infringement of such rights (the "New Copyrights"). In
addition, Licensor shall have the sole and exclusive right,
title and interest in and to, all media (including without
limitation videotapes, master tapes, prints, negatives and
duplicating negatives) in which any New Episode, Licensed
Format,
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Modified Format, Library Episode or Modified Library Episode,
or, in each case, any portion thereof, is rendered. Other
than as set forth in this Agreement, Licensee shall have no
right, title or interest in any New Episode, Licensed Format,
Modified Format, Library Episode or Modified Library Episode
or New Copyright.
(b) Without limiting the foregoing, Licensee hereby assigns and
agrees to assign, and to the extent necessary, agrees to use
its reasonable best efforts to cause its employees,
consultants, agents or sublicensees to assign, to Licensor or
its nominee at any time and without additional compensation
any and all right, title and interest, whether now existing or
hereafter arising, that Licensee, or any of its employees,
consultants, agents or sublicensees, may have in or to any New
Episode, Modified Format, Modified Library Episode, New
Copyright, or related advertising and promotional materials.
In the event that Licensee is unwilling or unable to execute
any document necessary to assign any such rights, Licensee
hereby grants to Licensor an irrevocable power of attorney to
execute on behalf of Licensee any and all such documents. To
the extent legally permitted, all works included in the New
Episodes, Modified Formats, Modified Library Episodes, and
related advertising and promotional material shall constitute
works made for hire, as that term is used in the Copyright Act
of 1976, as amended, and any registration of this Agreement as
a copyright assignment shall not stop Licensor from asserting
that such work is a work made for hire and shall not be
evidence that such work is not a work made for hire.
(c) In the event that the applicable law in any jurisdiction
prevents the ownership of any New Copyright (or any portion
thereof) by Licensor, Licensee shall grant, and to the extent
necessary, shall cause its affected employees, consultants,
agents or sublicensees to grant, an exclusive (even as to
Licensee), irrevocable, royalty- free, worldwide license to
use, modify, distribute, publicly display and publicly
perform, and to otherwise exploit all copyright rights in and
to, the affected New Episode or Modified Format or Modified
Library Episode or related advertising and promotional
material, for any lawful purpose, which license shall expire
upon the expiration of the copyright term for the New
Copyright in the affected work and shall include the right to
grant sublicenses with respect to the licensed rights.
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14. TRADEMARKS:
Licensee agrees that the Licensed Trademarks are the exclusive
property of Licensor. Any goodwill associated with Licensee's use of
the Licensed Trademarks shall inure to the exclusive benefit of
Licensor. Licensee shall not take any actions inconsistent with
Licensor's ownership of the Licensed Trademarks, and shall promptly
notify Licensor of any unauthorized use of the Licensed Trademarks of
which it becomes aware.
15. THIRD PARTY RIGHTS:
Licensee shall obtain all rights, licenses (including all licenses to
use music) and clearances necessary for Licensee and its sublicensees
to perform their obligations with respect to any New Episode, Modified
Format, or Modified Library Episode. The scope of any such right or
license shall be broad enough to permit Licensor (or its sublicensees)
to exploit its copyrights in any New Episode, Modified Format, or
Modified Library Episode following the termination of this Agreement
without the necessity of obtaining further rights or licenses. The
New Episodes, and to the extent modified, the Modified Formats and
Modified Library Episodes, shall not violate any law, or infringe the
rights of any third party.
16. NO LIENS:
Licensee shall not permit any claims, liens, security interests or
encumbrances to be placed upon any of Licensee's rights in any New
Episode, Library Episode, Modified Library Episode, Licensed Format,
Modified Format, advertising and promotional material related thereto,
or any New Copyright or Licensed Trademark, except for liens approved
by Licensor. Licensor has approved the assignment of Licensee's
rights granted to Chemical Bank, as Agent under the Chemical Facility
(including a refinancing thereof if such refinancing does not increase
the principal amount outstanding at the time of such refinancing).
17. STORAGE:
Licensee shall properly store each master or original negative of each
New Episode, Library Episode or Modified Library Episode in accordance
with standards customarily observed by major television producers in
the United States.
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18. PAYMENTS; ACCOUNTINGS AND STATEMENTS; BOOKS AND RECORDS:
(a) Not later than 30 days after the end of each calendar quarter
or earlier if necessary to comply with the next succeeding
sentence, Licensee shall pay to Licensor in cash, by wire
transfer to an account or accounts specified by Licensor,
Licensor's share of all revenues due and payable to Licensor
hereunder except as otherwise set forth in this paragraph (a).
Licensee shall make such payments in a timely manner
sufficient to allow Licensor to comply with its remittance
obligations set forth in the Asset Purchase Agreement in a
timely manner. Notwithstanding anything to the contrary
herein, payments to Licensor hereunder shall be subject to the
provisions of the Intercreditor Agreement between Licensor and
Chemical Bank, as Agent, and any payment not made as a result
of Section 3b of such Intercreditor Agreement shall not
constitute a breach of this Agreement or a failure to pay any
amount due and payable by it, including but not limited to
Licensee's payment obligations under this paragraph. In
addition, so long as Tranche E of the Credit Facility (or, if
Tranche E is not in place the portion of AACI's working
capital facility utilized to fund the Cash Portion of the
Purchase Price) remains outstanding, any application of funds
in the LLC Funds Account by Chemical Bank, as agent, pursuant
to Xxxxxx 0x the Intercreditor Agreement shall be deemed to
discharge the obligations of Licensee to Licensor pursuant
hereto in an equal dollar amount.
(b) Each payment shall be accompanied by a statement setting forth
in reasonable detail the calculation of Domestic Net Profits
(as defined in Schedule II hereto) for the applicable period
(on a cash and accrual (GAAP) basis) and an accounting and
statement for each Program substantially in the form
heretofore provided by Interpublic to AACI. Each statement of
the calculation of Domestic Net Profits shall become final, in
the absence of manifest error, unless objection is made
thereto within two years after Licensor's receipt thereof.
Licensor shall be responsible for making any Earn-Out Payments
from its receipt of Domestic Net Profits to the
"Representative" pursuant to the Asset Purchase Agreement. In
the event the revenues are derived from licenses used outside
of the United States, the calculation of the division of
revenues for such licenses will be separately set forth in the
accounting statements accompanying such payments.
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(c) In the event that Licensee shall fail to pay any amount due
and payable within 30 days of the end of each quarter (the
"Due Date"), Licensee shall be liable to Licensor for the sum
of the amount so due and payable plus interest on the amount
due and payable pursuant to clause (a) above from and
including such Due Date to but excluding the date of payment
thereof calculated at the rate per annum equal to Licensee's
borrowing rate plus 1%. Licensee shall indemnify Licensor
against any loss, liability, damage (or action in respect
thereof), including, but not limited to, out-of-pocket legal
fees and expenses, suffered or incurred in connection with the
enforcement, preservation or protection of any rights against
Licensee under this paragraph 18, other than in connection
with a bona-fide dispute, which shall be subject to
arbitration pursuant to paragraph 24 hereof.
(d) Licensor and Licensee agree to report the amounts due to
Licensor hereunder derived from AAFI's licensing of the
Programs as foreign source income within the meaning of
section 862 of the Internal Revenue Code, regardless of the
fact that books and records are kept in New York as described
in (c) below.
(e) Licensee shall maintain, at its address above, complete and
accurate books of account and records respecting the licensing
of the Programs hereunder.
(f) On a quarterly basis, Licensee shall permit an auditor
selected by Licensor to inspect and make copies of all
Licensee's books of account and records relevant to the
calculation of Domestic Net Profits.
19. PRODUCTION STANDARDS; INSPECTION RIGHTS:
(a) Licensee agrees that at all times during the term of this
Agreement, Licensee shall adhere to the production standards
and other standards of quality then reasonably specified by
Licensor, which standards Licensor may amend from time to time
(the "Standards"). The Standards in effect as of the date of
this Agreement with respect to production in the United States
are set forth in Exhibit A hereto. Licensee shall comply in
all material respects with all applicable laws with respect to
production outside the United States.
(b) Upon Licensor's request, Licensee shall (i) provide to
Licensor, at Licensee's expense, samples of the
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Modified Formats, New Episodes, Library Episodes, Modified
Library Episodes, and advertising and promotional material
relating thereto, and (ii) permit representatives of Licensor
to inspect at any time during normal business hours the
production facilities used to produce the New Episodes and to
create Modified Library Episodes, and (iii) permit
representatives of Licensor to inspect during normal business
hours the storage facilities in which are maintained any
videotape, master tape, print, negative, duplicating negative
or other copy of a New Episode, Library Episode, or any
related advertising or promotional material. In the event
that Licensor notifies Licensee that Licensee is not in
compliance with the Standards, Licensee shall promptly, but in
no event later than three weeks from the date such notice is
received, cure the noticed nonconformity to the extent
curable.
20. INSURANCE:
Licensee shall obtain and maintain in full force and effect, at its
sole cost and expense, during the Term of this Agreement insurance of
the type and for the minimums set forth below, all to the extent
available at a reasonable premium:
(a) Comprehensive General Liability Insurance. Combined Bodily
Injury Liability, Including for Death, and Property Damage
Liability, with a limit of not less than $3,000,000 per
occurrence, including: Contractual Liability (to cover the
indemnification provisions contained in this Agreement);
Products & Completed Operations Liability, which will be
maintained for not less than one year following termination of
this Agreement; Bailee's Liability; Independent Contractor's
Liability, and Broad Form Property Damage liability;
(b) Physical Damage or Property Insurance. Covering nonowned
property in the custody of Licensee, including but not limited
to any copy in any media of any New Episode or Library
Episode, from physical damage, theft or loss with a limit of
not less than $1,000,000 per occurrence with respect to
Licensee. Each sublicensee other than Interpublic Sub shall
be required to carry Physical Damage or Property Insurance
covering nonowned property in such sublicensee's custody with
a limit of not less than $1,000,000 per occurrence;
(c) Errors and Omissions Insurance. Limit of not less than
$1,000,000 per occurrence with respect to Licensee.
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Each sublicensee other than Interpublic Sub shall be required
to carry Errors and Omissions Insurance with a limit of not
less than $1,000,000 per occurrence; and
(d) Television Producer's Liability Insurance. Covering the New
Episodes and Library Episodes, bearing a minimum of $3,000,000
per occurrence. Standard coverage, including but not limited
to coverage with respect to defamation, infringement of common
law or statutory copyright, infringement of privacy rights,
and unauthorized use of material in any New Episode or
Modified Library Episode.
None of the premiums paid by Licensee for the insurance policies
listed above may be recouped from Licensor. Licensor shall be named
as an Additional Insured on each required policy. Each required
policy will be primary without right of contribution from any other
insurance maintained by Licensor, unless due to Licensor's gross
negligence or willful misconduct. All provisions in each required
policy, except the limits of liability, will operate in the same
manner as if there were a separate policy covering each insured. Each
required policy shall be issued by a reputable insurer approved by
Licensor, which approval shall not be unreasonably withheld. Licensee
shall furnish to Licensor certificates of insurance for each required
policy prior to the commencement of the first production under this
Agreement, and shall furnish certificates for each policy renewal
during the Term. Such policy shall include a provision requiring the
insurer to give Licensor prompt notice of any revision, modification
or cancellation thereof. Promptly after securing such policy,
Licensee shall furnish Licensor with a copy thereof.
21. APPROVALS:
As soon as practicable after Licensee concludes a deal with respect to
production of a New Episode, Licensee shall discuss the proposed
production budget with Licensor. Prior to commencing the production
of any New Episode in any jurisdiction within the Territory, Licensee
shall provide to Licensor a detailed production budget in writing.
Neither Licensee, any of its sublicensees, AATV nor AAFI shall have
the right to commence production of any New Episode unless Licensor
shall have first approved the production budget for that New Episode,
which approval shall not be unreasonably withheld or delayed. All
increases to an approved production budget shall require Licensor's
written approval not to be unreasonably withheld or delayed. Any
unapproved production budget overages shall not be deducted from gross
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receipts but shall only be deducted from Licensee's share of net
revenues.
Licensor shall be deemed to have approved all such production budgets
not disapproved to Licensee within ten business days of Licensor's
receipt of such production budget.
For so long as the Network Production Agreement is in effect, Licensor
and Licensee agree, for the benefit of Producer, without Producer's
consent not to be unreasonably withheld or delayed, that they shall
not amend, modify, terminate this Agreement (except in accordance with
this Agreement, the Network License Agreement or the Network
Production Agreement) or waive any rights or consents to any of the
foregoing under this Agreement insofar as it relates to "The Price Is
Right" which would have a material adverse effect on Producer's rights
under the Network Production Agreement.
22. TERMINATION OF RELATED LICENSES:
If the license agreement described in paragraph 4(a) above is
terminated for any reason, all rights licensed to Interpublic Sub
pursuant thereto shall revert to the Licensor, subject to the rights
of Licensee hereunder.
23. INDEMNIFICATION: Licensor and Licensee shall indemnify the other
party and hold the other party free and harmless from and against any
and all costs, claims, losses, liabilities and expenses (including
reasonable attorney's fees) resulting from or arising out of any
breach or alleged breach of any representations, warranties,
agreements or obligations of the indemnifying party hereunder.
In addition, Licensee shall, to the fullest extent permitted by law,
indemnify and hold harmless Licensor from and against any loss,
liability, damage, obligation, cost or expense (including reasonable
legal fees and expenses and any amount paid in settlement) resulting
from a claim, demand, lawsuit, action or proceedings, including any
appellate or bankruptcy proceeding, relating to or arising from or in
connection with the current, former or prospective employment,
retention or compensation of any person (including, without
limitation, any performer, actor, musician, host, writer, director,
producer or any person retained in any capacity as an independent
contractor) in connection with the production, distribution, licensing
or other exploitation of any and all of the Programs by the Licensee.
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24. TERMINATION:
(a) Licensor shall have the right to terminate this Agreement at
any time in the event that (i) Licensee commits a breach of
its payment obligations under paragraph 10 of this Agreement,
and fails to cure such breach (including any interest owed on
any amount that is unpaid) within 90 days of receiving a
written notice of default from Licensor, (ii) Licensee commits
a material breach of any of its other obligations under this
Agreement, other than a breach of its payment obligation
pursuant to paragraph 10, and fails to cure such breach within
90 days of receiving a written notice of default from
Licensor, or (iii) a petition is filed by or against Licensee
for voluntary or involuntary bankruptcy or pursuant to any
other insolvency law (which, in the case of an involuntary
petition, remains undismissed for a period of 60 days), or
Licensee makes or seeks to make a general assignment for the
benefit of its creditors or applies for or consents to the
appointment of a trustee, receiver or custodian for it or a
substantial part of its property.
(b) Any dispute relating to whether this License Agreement may be
terminated in accordance with this paragraph 24(a)(i) or
24(a)(ii) or amounts owed hereunder (a "Dispute") shall be
settled exclusively and finally by arbitration. It is
specifically understood and agreed that any Dispute may be
submitted to arbitration irrespective of the magnitude
thereof, the amount in controversy or whether such Dispute
would otherwise be considered justiciable or ripe for
resolution by a court. Such Arbitration shall be conducted in
accordance with and subject to the terms of Article XIV of the
Amended and Restated Operating Agreement among Interpublic,
its Affiliate, AACI and AAG with respect to the formation and
operation of the LLC.
(c) Upon the expiration or termination of this Agreement, the
licenses granted to Licensee shall immediately terminate, and
Licensee and its sublicensees shall immediately discontinue
the use or other exploitation (including telecast) of the
Licensed Formats, any Modified Format, the New Episodes, the
Library Episodes, Modified Library Episode, the Licensed
Trademarks, the New Copyrights, and any advertising or
promotional material relating thereto. Following the
expiration or termination of this Agreement, Licensee and its
sublicensees shall not produce, record or telecast, or permit
to be produced, recorded or
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telecast, any audiovisual production of a similar format or
title to the New Episodes, Library Episodes, Licensed Formats
or Licensed Trademarks.
Upon request of Licensor, Licensee shall, at its expense,
deliver to Licensor at a location specified by Licensor, all
copies (including any video tape and master) of the New
Episodes, Library Episodes, Modified Library Episodes,
Licensed Formats, Modified Formats, and related advertising
and promotional material in the possession of Licensee or any
of its sublicensees.
The provisions of this Agreement concerning copyrights and
trademarks shall survive the expiration or termination of the
Agreement.
(d) Notwithstanding anything to the contrary herein, in the event
of the expiration of this Agreement or its termination
pursuant to paragraph 24(a)(iii) as a result of an involuntary
bankruptcy or other similar involuntary proceeding, Licensee
shall continue to have certain rights and obligations to the
extent set forth in the side letter between the parties dated
as of the date hereof.
25. ASSIGNMENTS:
(a) This Agreement may not be assigned by either party without the
other party's prior written approval; provided that no consent
shall be required in the event Licensor sells all or
substantially all of its assets or merges or consolidates with
another party and further provided that Licensee may assign
its rights hereunder to Chemical Bank as provided for in the
Intercreditor Agreement. No such assignment shall relieve the
original party of its obligations hereunder.
(b) The parties agree that any direct or indirect change of
control of AAG (other than as a result of a change of control
of AACI) shall be deemed to constitute an assignment of
Licensee's rights hereunder and shall require the Licensor's
prior written approval.
26. CONFIDENTIALITY: Neither party shall disclose any portion of this
Agreement to any third party except to the extent necessary to
enforce, construe or carry out any term or provision of this Agreement
(including any suit, action or claim, whether involving Licensor,
Licensee or any third
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party) or to the extent required by any governmental or judicial order.
27. MISCELLANEOUS: This Agreement shall be governed by the laws of the
State of New York applicable to agreements executed and to be wholly
performed therein and shall not be modified except by a written
document executed by both parties hereto. This Agreement, together
with the related documentation entered into simultaneously herewith,
expresses the entire understanding of the parties hereto and replaces
any and all former agreements or understandings, written or oral,
relating to the subject matter hereof (other than the Existing
Agreements). Paragraph headings are for convenience of the parties
only and shall have no legal effect whatsoever. All notices
hereunder, unless specified otherwise, shall be in writing and shall
be given at the addresses set forth in paragraph 1 either by personal
delivery, telegram, telefax or telex (toll prepaid) or by registered
or certified mail (postage prepaid) and shall be deemed given on the
date delivered, telegraphed, telefaxed or telexed or the date mailed.
28. DEFINITIONS:
"Affiliate" shall mean, with respect to any person or entity, (i) any
person or entity directly or indirectly controlling, controlled by, or under
common control with such person or entity, (ii) any person or entity owning or
controlling twenty-five percent (25%) or more of the outstanding voting
securities of such person or entity, (iii) any officer, director, or general
partner of such person or entity, or (iv) any person or entity who is an
officer, director, general partner, trustee, or holder of twenty- five percent
(25%) or more of the voting securities of any person or entity described in
clauses (i) through (iii) of this sentence. For the purposes of this
definition, the terms "control," "is controlled by," or "is under common
control with" shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a person or
entity, whether through the ownership of voting securities, by contract or
otherwise. The exceptions to the definition of "Affiliate" in the Asset
Purchase Agreement are incorporated herein.
"Licensed Formats" shall mean the outlines, treatments or formats for
the shows constituting Assets acquired by Licensor at the Final Closing of the
Asset Purchase Agreement, including any modifications thereof made by Licensee.
"Library Episodes" shall mean those audiovisual productions
constituting Assets acquired by Licensor at the Final Closing of
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the Asset Purchase Agremeent, including any modifications thereof made by
Licensee.
"Licensed Trademarks" shall mean the titles, trademarks and service
marks used in connection with the New Episodes and the Library Episodes.
"Modified Format" shall mean the work resulting from any modification
by Licensee of any of the Licensed Formats. Each Modified Format shall also be
deemed a Licensed Format.
"Modified Library Episode" shall mean the work resulting from any
modification by Licensee of a Library Episode. Each Modified Library Episode
shall also be deemed a Library Episode.
"New Copyrights" shall have the meaning specified in paragraph 13(a)
of this Agreement.
"New Episodes" shall mean any audiovisual production based on the
Licensed Formats (including any Modified Format) produced by Licensee or its
licensees pursuant to this Agreement.
"Programs" shall mean Library Episodes and New Episodes.
"Standards" shall have the meaning specified in paragraph 19(a) of
this Agreement.
"Term" shall have the meaning specified in paragraph 3 of this
Agreement.
29. EFFECTIVENESS: This Agreement shall become effective at the Final
Closing of the Asset Purchase Agreement and shall be of no force or
effect if the Asset Purchase Agreement is terminated in accordance
with its terms.
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IN WITNESS WHEREOF, the parties have executed this agreement as of the
date first above written.
XXXX XXXXXXX PRODUCTIONS, LLC., as LICENSOR
By: ALL AMERICAN COMMUNICATIONS, INC.
Its: OPERATOR
By: /s/ XXXXXX XXXXXXXX
----------------------------
Name: Xxxxxx Xxxxxxxx
Its: Chief Financial Officer
Date: October 6, 1995
ALL AMERICAN XXXXXXX, INC., as LICENSEE
By: /s/ XXXXXX XXXXXXXX
------------------------------------
Name: Xxxxxx Xxxxxxxx
Its: Chief Financial Officer
Date: October 6, 1995
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SCHEDULE I
1. Memorandum of Agreement, dated as of February 3, 1972, between CBS
Television Network and Price Productions, Inc. (as heretofore amended,
supplemented, extended or modified).
2. Master Programming Agreement, dated as of November 25, 1992, among
Sony Pictures Cable Venturers I and certain predecessors and
constituent members of Xxxx Xxxxxxx Productions, L.P.
3. Agreement, dated June 28, 1991, between Xxxxxxx Television
Productions, Inc. and Grundy International Operations Limited.
4. Agreement, dated October 17, 1989 between the Family Company and
Grundy International Operations Limited.
5. Fremantle International Inc. Licenses i.e., "Xxxxxxx Agreements" as
defined under the Acquisition Agreement, dated August 3, 1994, between
Interpublic and All American.
6. Letter Agreement, dated February 4, 1994, between Direction Video Inc.
and Price Productions, Inc. (as heretofore amended, supplemented,
extended or modified).
7. Letter Agreement, dated April 7, 1994, between Xxxx X'Xxxx Limited and
Conscient, Inc. (as heretofore amended, supplemented, extended or
modified).
8. Letter Agreement, dated April 7, 1994, between Xxxx X'Xxxx Limited and
Price Productions, Inc. (as heretofore amended, supplemented, extended
or modified).
9. Letter Agreement, dated as of January 1, 1995, between Xxxx Xxxxxxx
Productions and Xxxxxxxx Toy Corporation, extending the Trademark
License Agreement, dated as of November, 1989, between Xxxxxxxx Toy
Corporation and The New Family Company.
10. License Agreement, dated July 1, 1994, between Interactive Network,
Inc. and Xxxx Xxxxxxx Productions, L.P.
11. License Agreement, dated May 23, 1994, between Interactive Network
Inc. and Xxxx Xxxxxxx Productions, L.P.
12. License Agreement Deal Memo of Agreement between Gametek, Inc. and The
New Family Company.
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Schedule II
(a) Pursuant to Paragraph 18 of the License Agreement, AAG shall
remit to Licensor (and shall use its reasonable best efforts
to cause its sublicensees to remit to it) the Domestic Net
Profits, as defined below, derived from AATV's exploitation of
the Programs in the AATV Territories.
"Domestic Net Profits" shall mean the sum of the following:
(i) "Domestic Net Profits - Programs originally produced
for Networks" (to include the ABC, CBS, NBC, FOX and
all U.S. Cable Television Networks) shall mean the
gross receipts received by AATV or Licensee after the
Final Closing under the Asset Purchase Agreement from
the production and distribution pursuant to the
rights granted in this license agreement (which shall
in any event exclude rights granted pursuant to the
license referred to in paragraph 4(a) for so long as
such license is in effect) of New Episodes in the
AATV Territories from either ABC, CBS, NBC, FOX or
any U.S. Cable Television Network less the following,
which, in the case of items (b), (c) and (d) below,
must be within the budget approved by Licensor (which
approval shall not be unreasonably withheld) or
otherwise approved by Licensor in writing:
(a) a distribution fee to AATV equal to 10% of
gross receipts,
(b) all production costs, as generally understood
within the entertainment industry,
attributable to the game shows and/or series,
and
(c) all residual, re-use, supplemental market
and/or replay fees and/or other actual
out-of-pocket costs directly attributable to
the game shows, and/or series, including
Third Party Costs, and
(d) any unrecouped prior period deficits
following the Final Closing (excluding
recoupment of prior year distribution fees
arising from the same game show and/or series
to the extent such recoupment would cause
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such game show and/or series to have a loss
on a cumulative basis).
(ii) "Domestic Net Profits - Programs originally produced
for First-Run Syndication" shall mean the gross
receipts received by AATV or Licensee after the Final
Closing from the production or distribution pursuant
to the rights granted in this license agreement of
New Episodes with respect to the initial exhibition
in the AATV Territories on first-run syndication,
less the following, which, in the case of items (b),
(c), (d) and (e) below, must be within the budget
approved by Licensor (which approval shall not be
unreasonably withheld) or otherwise approved by the
Licensor in writing:
a) a distribution fee payable to AATV equal to
25% of gross receipts,
b) all marketing and distribution expenses
directly attributable to the distribution of
the game shows and/or series,
c) all production costs as generally understood
within the entertainment industry,
attributable to the game shows and/or series,
d) all residual, re-use, supplemental market
and/or replay fees and/or other actual
out-of-pocket costs directly attributable to
the game shows and/or series, including Third
Party Costs,
e) any unrecouped prior period deficits after
the Final Closing (excluding recoupment of
prior year distribution fees arising from the
same game show and/or series to the extent
such recoupment would cause such game show
and/or series to have a loss on a cumulative
basis), and
f) fifty (50%) percent of the balance remaining,
after the deduction of items (a)-(e) above.
(iii) "Domestic Net Profits - Library Sales" shall mean the
gross receipts received by AATV or Licensee after the
Final Closing from the distribution of Programs with
respect to re-run syndication in the AATV
Territories, less the following, which, in
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the case of items (b), (c), (d) and (e) below, must
be within the budget approved by Licensor (which
approval shall not be unreasonably withheld) or
otherwise approved by the Licensor in writing:
a) a distribution fee payable to AATV equal to
25% of gross receipts,
b) all marketing and distribution expenses
directly attributable to the distribution of
the game shows and/or series,
c) all reformatting and duplicating costs,
d) all residual, re-use, supplemental market,
rerun and/or replay fees and/or other actual
out-of- pocket costs directly attributable to
the game shows and/or series, including Third
Party Costs, and
e) any unrecouped prior period deficits after
the Final Closing (excluding recoupment of
prior year distribution fees arising from the
same game show and/or series to the extent
such recoupment would cause such game show
and/or series to have a loss on a cumulative
basis).
(iv) Merchandising Licensing Activities: Receipts
received, net of expenses approved by Licensor, are
split 50% to AATV and 50% to Licensor (except in the
case of merchandising revenue, where the split of the
net will be 25% to AATV and 75% to Licensor).
(v) Other Licensing Activities: Receipts received, net
of expenses approved by Licensor, from any licensing
activity not addressed in clauses (i) through (iv)
above and entered into pursuant to Licensee's grant
of rights under paragraph 2 of this Agreement shall
be split 50% to AATV and 50% to Licensor (except, in
the case of licensing activities, when a third party
shares in the revenue, where the split of the net
will be 25% to AATV and 75% to Licensor).
(b) Pursuant to paragraph 18 of this license agreement, AAG shall
remit to Licensor (and shall use its reasonable best efforts
to cause its sublicensees to remit to it)
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the following applicable percentages of revenues derived from
AAFI's below-delineated licensing of the Programs in the AAFI
Territories:
(i) Local Co-Productions - "Local Co-Productions" are
defined as the production of local versions of the
Programs where AAFI provides creative supervision on
an ongoing basis but is not directly responsible for
the production budget. Said revenues from each
Program are divided in the following order of
priority:
a) AAFI recoups its actual out-of-pocket
production costs to the extent set forth in
the production budget for such Programs that
have been approved by Licensor, including its
per episode producer's fees but excluding any
overhead for production offices, except to
the extent within the production budget
approved by Licensor (which approval shall
not be unreasonably withheld).
b) AAFI receives a fee of 10% of remaining
revenues from production of such Program
until such time as the $25 million principal
amount comprising Tranche E of the Chemical
Facility (or, until Tranche E is consummated,
the equivalent amount of AACI's Working
Capital Line), together with all accrued
interest thereon is fully paid, or if the
Chemical Facility is refinanced, until the
earlier of repayment of such new facility and
April 13, 1999 whereupon AAFI shall no longer
be entitled to such fee.
c) Remainder is split: 50% to AAFI and 50% to
Licensor.
(ii) Local Full Productions - "Local Full Productions" are
defined as the production of local versions of the
Programs which are produced either by AAFI alone or
in association with the local production partner for
which AAFI is directly or indirectly responsible for
the production budget. Said revenues are divided in
the following order of priority:
a) AAFI recoups its actual out-of-pocket
production costs to the extent set forth in
the production budget for such Programs,
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including, but not limited to, all
above-the-line and below-the-line production
budget items (as such items are customarily
understood in the industry but only to the
extent set forth in the production budget
approved by Licensor (which approval shall
not be unreasonably withheld)), allocation of
overhead for specific production offices
(provided, that in no case may overhead
exceed 100% of AAFI's direct costs)
supervisory executive producers' fees, studio
costs at pre- agreed fixed day rate card
(provided, that AAFI shall not recoup any
costs associated with its failure to satisfy
any studio volume discount requirements or
other production-related discount
requirements) and local legal fees that
relate solely to the production of local
versions of the Programs.
b) AAFI receives a fee of 10% of remaining
revenues.
c) Remainder is split: 50% to AAFI and 50% to
Licensor
(iii) Format Licenses (i.e., the licensing of the right to
produce the Programs) where AAFI does not provide any creative
or other supervisory services:
receipts received, net of expenses approved
by Licensor, are split 50% to AAFI and 50% to
Licensor
(iv) Tape Licenses (i.e., the licensing of U.S.
productions (existing tapes) of the Programs):
receipts received, net of expenses approved
by Licensor, are split 35% to AAFI and 65% to
Licensor
(v) Merchandising and Ancillary Licensing Activities:
receipts received, net of expenses approved
by Licensor, are split 50% to AAFI and 50% to
Licensor (except, in the case of
merchandising, when the broadcaster shares in
merchandising revenue, the split of the net
will be 25% to AAFI and 75% to Licensor)
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(vi) Other Licensing Activities:
receipts received, net of expenses approved by
Licensor, from any licensing activity not addressed
by clauses (i) through (v) above and entered into
pursuant to Licensee's grant of rights under
Paragraph 2 of this Agreement are split 50% to AAFI
and 50% to Licensor (except, in the case of licensing
activities, when a third party shares in the revenue,
the split of the net will be 25% to AAFI and 75% to
Licensor).
(c) During the term of the license agreement referred to in
Paragraph 4(a), the division of revenues relating to such
license agreement shall be subject to and governed by the
provisions of said license agreement. Licensee agrees to remit
100% of the receipts received by it as Sublicensor under said
license agreement to the Licensor hereunder.
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EXHIBIT C
U.S. PRODUCTION STANDARDS AND STANDARDS OF QUALITY
PRODUCTION STANDARDS
To be substantially consistent with the standards in effect
prior to the date hereof.
OTHER STANDARDS
Licensee shall adhere to the following standards at all times:
1. No information of any sort with respect to questions to be asked or
materials to be used on any New Episode shall be supplied or suggested
in any way to, or asked of, contestants or participants in any game or
contest recorded in any New Episode in advance of broadcast.
2. No favoritism shall be exercised in the treatment of any contestant or
participant.
3. The winning contestant or participant shall be offered in full the
exact or substantially the same prize which is announced on the
program in accordance with the provisions of the contestant release
form.
4. No game or contest, or any element thereof, shall involve any unfair
treatment of any contestant, participant or any member of the public.
5. No ambiguous statement or representation that might be misleading to
the public shall be made, nor shall the game or contest be conducted
in a manner that might be misleading to the public.
6. No element of any program shall be injurious or prejudicial to the
interests of the public, Licensor, or honest programming or reputable
business in general.
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