1
EXHIBIT 10.65
STATION AFFILIATION AGREEMENT
Dated as of April 9, 1998
ACME Television Holdings
00000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xx. Xxxxx, XX 00000
Attention: Xxxx Xxxxx
The following shall comprise the agreement between The WB Television Network
Partners, L.P. dba The WB Television Network ("WB," "we," or "us"), and ACME
Television Licensee of Utah ("Affiliate" or "you") for the affiliation of your
television station KUWB ("Station") with WB for carriage of WB programming. The
Federal Communications Commission ("FCC") has issued a broadcast license
("License") to you to operate Station in Salt Lake City, Utah, the community in
which Station is licensed by the FCC ("Community of License"). All references in
this Agreement to "WB program(s)" and "WB programming" and any variations
thereof shall mean the programming made available by WB under this Agreement.
1. WB Programming: WB will make available to Affiliate WB programs for free
over-the-air broadcast and broadcast by any other means by Station in the
Community of License during the term of this Agreement. During such term,
except as otherwise provided herein, WB grants Affiliate the exclusive
right to have Station broadcast the WB programming in the Community of
License only as scheduled by WB over free over-the-air television and by
such other technological means as are available to Affiliate for broadcast
in the Community of License so long as Station broadcasts the WB
programming for over-the-air television. Notwithstanding the foregoing,
until such time that WB offers exclusivity against importation of WB
programming carried by the signal of WGN to its affiliates, WB may allow
WB programming carried by the signal of WGN to be imported into the
Community of License. WB shall have the sole discretion to select,
schedule, substitute and/or withdraw WB programming or any portion(s)
thereof. WB shall also have the right to authorize any television
broadcasting station, regardless of the community in which it is licensed
by the FCC, to broadcast any presentation of a subject we deem to be of
immediate national significance including, but not limited to, a
Presidential address. Except as provided herein, during the term of this
Agreement Affiliate shall be the sole affiliate of WB for transmission for
exhibition on television of WB programming in the Community of License.
2. Program Carriage:
1
2
(a) We agree to make available for broadcast by Station WB
programming for the hours programmed by WB at the times and dates
scheduled by WB throughout the term of this Agreement. You
acknowledge that the times and roll-out dates set forth in this
Agreement are approximate only and you agree to have Station
broadcast WB programs irrespective of whether WB meets, fails to
meet or otherwise varies from the anticipated program schedule
set forth herein; provided, however, that WB hereby agrees not to
accelerate such anticipated program schedule. WB will not
program the morning or afternoon day-parts (with the exception of
Kids' WB programming) or, access, or late-night day-parts, unless
WB first receives the consent of the WB Affiliate's Council. To
the extent WB makes available such WB programming for broadcast,
this Agreement both obligates us to make available such WB
programs to Station and obligates Station to broadcast such WB
programs over-the-air pursuant to the terms of this Agreement. WB
acknowledges that the sixth night of WB prime time programming
will commence at the start of WB's 1999/2000 broadcast year, and
such sixth night of programming will be broadcast on Friday
night.
(b) Subject to the exceptions set forth in subparagraph 2(e) and the
right of preemption set forth in subparagraph 2(f), Station shall
broadcast WB programs on the dates and at the times scheduled by
WB. Station shall broadcast WB programs in their entirety,
including but not limited to WB commercial announcements, WB
identifications, program promotional material, and credit
announcements contained in such programs, without interruption or
deletion or addition of any kind, except for the commercial
announcements that Station is allowed to add pursuant to
Paragraph 5. Notwithstanding the foregoing, you may substitute
other WB promotional announcements in lieu of program promotional
material that is inaccurate as it pertains to Station's schedule.
No commercial announcement, promotional announcement or public
service announcement will be broadcast by Station during any
interval within a WB program, which interval is designated by WB
as being for the sole purpose of making a station identification
announcement.
(c) The initial Scheduled Program Times of WB programming and the
anticipated roll-out dates of that programming are set forth as
follows (the specified times apply for the Eastern and Pacific Time
Zones; the Mountain and Central Time Zones are one hour earlier for
Prime Time and Latenight programming only, except as otherwise
agreed by us):
Prime Time: Sunday: 7:00 p.m. - 10:00 p.m Monday - Saturday:
8:00 p.m.- 10:00 p.m. As of the commencement of the
1998/1999 Television Broadcast Year, WB is providing
programming for broadcast by its affiliates on five
nights during each calendar week (i.e. Sunday through
Thursday). WB will roll-out one
2
3
additional night of programming during the 1999/2000
Broadcast Year and one additional night of programming
during the 2000/2001 Broadcast Year.
Children's: Monday through Friday Mornings: One hour of programming
broadcast between: 7:00 a.m. - 8:00 a.m.; or 7:30 a.m. -
8:30 a.m.; or 8:00 a.m. - 9:00 a.m. (at WB's election)
Monday through Friday Afternoons: Two hours of
programming broadcast between: 3:00 p.m. - 5:00 p.m.
Saturday Morning: Four hours of programming broadcast at
8:00 a.m. - 12:00 noon. However, if Affiliate believes
that the Children' programming block should run on
Sunday instead of Saturday, WB will discuss with
affiliate such a move of the programming block from
Saturday to Sunday, and will consider granting such a
move, in good faith, after taking into account the
business interests of WB.
Latenight: 11:00 p.m. - 12:00 midnight Monday through Friday,
commencing on a date to be determined by WB, subject to
the approval of the WB Affiliate's Council
(d) During such time that WB is providing 19 hours of programming per
week to Station 3 hours(of the total of 19 hours) will be
programming which is categorized as Children's
educational/informational programming. However, at such time that
WB provides only 16.5 hours of Children's programming to Station
then WB, at its sole election, may determine to provide only 30
minutes of educational/informational programming per week to
Station.
(e) You confirm that as of the date of this Agreement you have no
commitments, except those listed in Schedule 1 hereto, which
would impede Station's broadcasting all WB programming made
available during the term of this Agreement. If any WB
programming is not broadcast by you because of any such
commitment expressly described in Schedule 1 (but excluding
extensions by exercise of options by Affiliate [but not by the
programming licensor] or otherwise), then such programming shall
be broadcast in a time period upon which you and we shall
mutually agree and which shall be of quality and rating value
comparable to that of the Scheduled Program Times. These programs
will not be considered preempted for purposes of subparagraph
2(f).
(f) Notwithstanding anything in this Agreement to the contrary, nothing
in this Agreement shall be construed to prevent or hinder Affiliate
from (i) rejecting or refusing any WB program which Affiliate
reasonably believes to be unsatisfactory or unsuitable or contrary
to the public interest or (ii) substituting a program which, in
Affiliate's opinion, is of greater local or national importance. In
such an
3
4
event, you shall provide us with advance written notice of any such
rejection, refusal or substitution, no later than 14 days prior to
the air date of such programming, except where the nature of the
substitute program makes such notice impracticable (e.g., coverage
of breaking news or other unscheduled events) or the programming has
not been made available to you by such date, in which cases you
agree to give us as much advance notice as the circumstances permit.
Such notice shall include a statement of the reasons you believe
that the rejected WB programming is unsatisfactory or unsuitable or
contrary to the public interest, and/or that a substituted program
is of greater local or national importance. In view of the limited
amount of WB programming to be supplied pursuant to this Agreement
(at least until such time as the full WB programming schedule has
been rolled out) you acknowledge that you do not foresee any need to
substitute programming of greater local or national importance for
WB programming, except in those circumstances requiring live
coverage of fast-breaking news events or very infrequent special
events.
To the extent you substitute another program for a WB program as
permitted under subparagraph 2(f)(ii), then you will broadcast such
omitted program and the commercial announcements contained therein
(or any replacement programming provided by WB and the commercial
announcements contained therein) during a time period upon which you
and we shall promptly and mutually agree and which shall be of
quality and rating value comparable to that of the preempted
program's Scheduled Program Time. In the event that the parties do
not promptly agree upon such a time period after reasonable
consultation in good faith and after taking into account the
practical alternatives under the circumstances, then, without
limiting any other rights of WB under this Agreement or otherwise,
we shall have the right to license the broadcast rights to the
applicable omitted programming (or replacement programming) to
another television station located in the Community of License.
Except as provided in Paragraph 2(e), above, in addition, if three
or more episodes of a program series are preempted by you as
permitted hereunder in any thirteen-week period, for any reasons
other than force majeure as provided in Paragraph 6, we shall have
the right, upon 60 days prior written notice, to terminate your
right to broadcast that program series and to withdraw all future
episodes of that series. Such thirteen-week periods shall be
measured consecutively from the first broadcast date of the program
series in question. If we subsequently place such a series on
another station in the Community of License, we reserve the right
not to offer you the broadcast rights to that series for subsequent
broadcast seasons.
In addition to all other remedies, to the extent one or more
episodes of a program series is preempted by you in violation of
(i.e., other than as permitted under) this Paragraph 2, we shall
have the right, upon 30 days prior written notice, to terminate your
right to broadcast the remainder of the program series and withdraw
all future episodes of that series from you.
4
5
(g) Nothing in this Agreement shall be construed to prevent or hinder
WB from (i) substituting one or more WB programs for previously
scheduled WB programs, in which event WB will make the
substituted programs available to Station pursuant to the
provisions of Paragraph 1 and Paragraph 3; (ii) canceling one or
more WB programs; or (iii) postponing any scheduled roll-out
dates of WB programming. Further, nothing in this Agreement
shall be construed to obligate WB (x) to provide a minimum or
specific number of WB programs; (y) to commence providing WB
programming on any particular date; or (z) to expand the amount
of WB programming pursuant to a specified timetable.
3. Delivery: WB agrees to make available the WB programming for satellite
transmission. WB shall incur no costs regarding the satellite downlink and
broadcast by Station; Station shall incur no up-link costs with regard to
the delivery of the WB programming. WB agrees to provide closed captioning
for substantially all WB programming that is not exempt from captioning
requirements under FCC rules.
4. Promotion:
(a) We will provide you with on-air promotional announcements ("WB
Promos") for WB programming, which WB Promos are intended for
broadcast during Station's broadcast of non-WB programming. You
agree to provide an on-air promotional schedule consistent with
our recommendations, and consistent with Station's reasonable
business judgment. You shall maintain complete and accurate
records of all WB Promos that are broadcast. Upon request by WB
for those records, you shall provide copies of all such records
to WB within two weeks of such request.
(b) You shall budget Station's advertising availabilities in such a
manner as to enable Station to broadcast additional WB Promos
during periods in which Station is deemed a "Subperformer."
Station shall be deemed to be a "Subperformer" from the time its
"sweeps rating" is below the average prime time rating for all WB
affiliated broadcast stations until such time as Station's sweeps
rating is no longer below the average prime time rating for all
WB affiliated broadcast stations. The Station's sweeps rating
means the Station's average X.X. Xxxxxxx rating for the most
recently completed sweeps period for adults 18-49 for all prime
time hours programmed by WB. For such time as Station remains a
Subperformer, Station shall: (i) broadcast, during each one-half
hour of all periods of each day that Station is broadcasting
non-WB programming, at least one (1) 30-second Promo (or Promos
aggregating 30 seconds, to the extent we so elect) for Station's
local, syndicated or WB programming; and (ii) broadcast during
all periods when Station is broadcasting non-WB programming WB
Promos for not less than:
Prime Time Hours Programmed by WB
2 hours - 20% of 100%
5
6
4 hours - 25% "
6 hours - 30% "
8 hours - 35% "
10 hours - 40% "
12 hours* - 45% "
(* 12 or more hours)
(the "Applicable Percentage") of the total, aggregate gross ratings
points ("GRPs") for all the promotional announcements broadcast by
Station ("Aggregate Promotional GRPs") within the periods in which
non-WB programming is being broadcast. The specific WB Promos
broadcast by Station and the number of broadcasts of each WB Promo
may be specified by WB and the broadcast of the WB Promos shall be
made so that the Aggregate Promotional GRPs allocated to WB Promos
are distributed fairly and reasonably across the periods when non-WB
programming is being broadcast. For such time as Station's sweeps
rating ranks Station within the bottom 50% (ranked highest to
lowest) of those WB affiliated broadcast stations that are
Subperformers, then the Applicable Percentage for Station shall be
not less than 55% of 100% of the Aggregate Promotional GRPs. The WB
Promos broadcast during each half-hour of non-WB programming, as
required by this subparagraph 4(b), may be counted toward Station's
Applicable Percentage. Station shall continue to air WB Promos under
this schedule until Station is no longer a Subperformer, as defined
above.
(c) In addition to providing WB Promos, we shall make available for
your use, at reasonable cost, such other promotional and sales
materials as we and you may mutually consider appropriate. You
shall not delete any copyright, trademark, logo or other notice,
or any credit included in any such materials relating to WB, and
you shall not exhibit, display, distribute or otherwise use any
trademark, logo or other material or item delivered pursuant to
this Paragraph 4 or otherwise, except as instructed by us at the
time.
(d) Commencing on the first date that WB programming is aired by Station
and for the remaining term of this Agreement, Station shall identify
itself as a WB affiliate, both on and off-the-air.
5. Commercial Announcements:
(a) With respect to WB programming, the parties to this Agreement shall
be entitled to insert the following number of commercial
announcements (Station's allotment includes station breaks but
excludes 5-second prime time station identification breaks at the
beginning of each hour):
(1) Prime Time (as defined in subparagraph 2(c)) hour (pro-rated
for half-hour programs):
6
7
You shall have the right to insert six 30-second
commercial announcements. WB shall have the right to
insert at least nineteen 30-second commercial
announcements.
(2) Children's:
Weekday half-hour:
You shall have the right to insert six 30-second
commercial announcements (or other material constituting
"commercial matter" under the FCC's regulations). WB
shall have the right to insert six 30-second commercial
announcements.
Weekend half-hour:
You shall have the right to insert five 30-second
commercial announcements (or other material constituting
"commercial matter" under the FCC's regulations). WB
shall have the right to insert five 30-second commercial
announcements and one 15-second commercial.
(3) Latenight (as defined in subparagraph 2(c)):
You will receive half the total number of commercial
announcements as specified by WB or less as mutually
agreed to.
(b) If, because of the imposition of any law or regulation, the
amount of commercial advertising, commercial matter or other
non-program time included in WB programming is reduced for any
reason (including but not limited to the adoption or modification
of statutes or regulations or any other governmental action),
then we shall be entitled to reduce the number of commercial
announcements available to you to the extent necessary to provide
WB and Affiliate with the same proportionate amount of commercial
time (inclusive of station breaks with respect to Affiliate) that
each party is entitled to under this Agreement.
(c) Your broadcast over Station of the commercial announcements
included by us in WB programming is of the essence to this
Agreement, and nothing contained in this Agreement (other than in
subparagraph 2(f)) shall limit our rights or remedies relating to
your failure to so broadcast said commercial announcements. You
shall maintain complete and accurate records of all commercial
announcements broadcast as provided herein. Within two weeks
following each request by us therefor, you will submit copies of
all such records to WB.
7
8
6. Force Majeure: WB shall not be liable for failure to make available
any programming or any portion(s) thereof, and Station shall not be
liable for failure to broadcast any such programming or any portion(s)
thereof, by reason of any act of God, equipment failure, action or
claims by any third person, labor dispute, law, governmental regulation
or order, or other cause beyond either party's reasonable control
("force majeure event"). If due to any force majeure event, we
substantially fail to make available all of the programming to be
delivered to Affiliate under the terms of this Agreement, or you
substantially fail to broadcast such programming as scheduled by WB for
four consecutive weeks, or for six weeks in the aggregate during any
12-month period, then the "non-failing" party may terminate this
Agreement upon thirty 30 days prior written notice to the "failing"
party so long as such notice is given at any time prior to the
"non-failing" party's receipt of actual notice that the force majeure
event(s) has ended; provided further, however, that notwithstanding the
above provisions, you shall not have any right to so terminate this
Agreement, upon a force majeure event or otherwise, if we: (i) fail to
make available a minimum or specific number of WB programs; (ii) fail
to commence making available WB programming on any particular date;
(iii) fail to expand the amount of WB programming pursuant to a
specified timetable; (iv) substitute one or more WB programs for
previously scheduled WB programs; (v) cancel one or more WB programs;
or (vi) postpone the roll-out of any WB programming.
7. Assignment or Transfer of Affiliate Agreement and/or Station License:
(a) Assignment or Transfer of Affiliation Agreement: This Agreement
shall not be assigned by Affiliate without the prior written consent
of WB. Any purported assignment by Affiliate without such consent
shall be null and void, shall not be enforceable against WB, and
shall not relieve Affiliate of all its obligations hereunder.
(b) Assignment or Transfer of Station License: If any application is
made to the Federal Communications Commission (FCC) concerning a
purported, attempted or actual transfer of control or assignment of
the Station license, you shall notify us immediately in writing of
the filing of such application. Unless the transfer of control or
assignment is one provided for by Section 73.3540 (f) of the FCC's
current rules and regulations (a "short form" assignment or transfer
of control that does not involve a material assignment or transfer
of control), we shall have the right to terminate this Agreement
upon twenty (20) days' advance notice to you, at any time after the
filing of such application. If WB does not terminate this Agreement
on or before twenty days before the effective date of such transfer,
this Agreement shall be deemed to have been fully assigned to the
transferee or assignee of Station's license and such transferee or
assignee will assume and perform all of the obligations and duties
contained in this Agreement without limitation of any kind, as of
the effective date of transfer. In addition, if Licensee fails,
prior to the effective date of the transfer, to procure in a written
form satisfactory to WB the agreement of the assignee or transferee
to assume and perform this Agreement in its entirety without
limitation of any kind, or fails to
8
9
immediately notify WB of the application to transfer control or
assign the Station license, then Licensee shall remain fully
responsible for the full performance of all provisions of the
Agreement during the full term of the Agreement as set forth in
Paragraph 9, and in the event of non-performance, Licensee shall be
considered in material breach of this Agreement and WB shall have
all rights and remedies available for such breach, including but not
limited to specific performance and damages.
8. Unauthorized Copying: You shall not, and shall not cause or authorize
others to record, copy or duplicate any programming or other material
we furnish pursuant to this Agreement, in whole or in part, and you
shall take all reasonable precautions to prevent any such recording,
copying or duplication. Notwithstanding the foregoing, if Station is
located in the Mountain Time Zone you may pre-record WB programming for
later broadcast at the times scheduled by us. You shall erase all such
pre-recorded programming promptly after its scheduled broadcast.
Notwithstanding the above provisions, Station may make a non-broadcast
quality recording of its entire broadcast day for archival, file and
reference purposes and uses only, which copy shall be kept in Station's
possession at all times.
9. Term:
(a) The term of this Agreement shall commence on April 9, 1998 (the
"Launch Date") and shall continue for 36 months thereafter (the
"initial period"). The term of this Agreement may be extended
for additional successive periods of two years each, by us, in
our sole discretion, giving written notice of such extension to
you at least 120 days prior to the expiration of the then-current
period; provided, however, that if, within 30 days of your
receipt of the notice of extension, you, in your sole discretion,
give us written notice that you reject such extension, then the
extension notice shall not be effective and this Agreement shall
terminate upon expiration of the then-current period.
(b) The "Launch Date" shall be defined as the date on which WB makes WB
programming available to Affiliate for broadcast by Station on a
regularly scheduled basis.
(c) Each "Contract Year" hereunder shall be an annual period during the
term of this Agreement. The First Contract Year is the annual period
beginning with the start date of the term of license; the Second
Contract Year is the annual period commencing one year after the
start date of the term of license, etc.
(d) WB shall, within its sole discretion and without liability, have the
right to terminate this Agreement so long as we (i) provide sixty
days prior written notice to you and (ii) are either: (A) ceasing
operation as a television network; or (B) substantially
restructuring the ownership of the television network.
9
10
(e) Notwithstanding anything to the contrary contained in this
Agreement, upon the termination or expiration of the term of this
Agreement, all of your rights to broadcast or otherwise use any WB
program or any trademark, logo or other material or item hereunder
shall immediately cease and neither you nor Station shall have any
further rights whatsoever with respect to any such program,
trademark, logo, material or item.
10. Applicable Law: The obligations of you and WB under this Agreement are
subject to all applicable federal, state, and local laws, rules and
regulations (including, but not limited to, the Communications Act of
1934, as amended, and the rules, regulations and policies of the FCC)
and this Agreement and all matters or issues collateral thereto shall
be governed by the laws of the State of California without regard to
California's conflict of law rules. The California State Courts and
the U.S. District Courts located in California shall have jurisdiction
over the interpretation of this Agreement or with regard to any dispute
arising under this Agreement. The venue for any such action concerning
this Agreement shall be in the County of Los Angeles, California.
11. Station Acquisition by WB: During the term of this Agreement, WB agrees
that neither we nor Time Warner Inc. nor any of its subsidiary companies
will acquire, as defined by the attribution rules of the FCC, a television
broadcast station licensed in the Community of License. It is acknowledged
that Station WTBS in Atlanta is controlled by a Time Warner affiliated
company.
10
11
12. Change in Operations:
(a) You shall notify WB immediately in writing if application is made to
the FCC to modify in a material manner the transmitter location,
power or frequency of Station such that Station's signal coverage of
its DMA market is materially diminished, or if Station changes its
program format from mainstream entertainment and/or news
programming. We shall have the right to terminate this Agreement,
upon 90 days' prior written notice, within 90 days after receiving
notice of the format change, or if no satisfactory arrangements are
made to cure Station's diminished signal coverage. Applications
related to Station's transition to digital television transmission
are not within the scope of this paragraph.
(b) At any time during the term if Station is off the air, or
operating at less than fifty percent (50%) of its licensed power,
for a period of 12 hours or longer, Station must immediately
notify WB. WB may terminate this agreement upon thirty (30) days
prior written notice in the event that Station is off the air for
a period exceeding seven (7) days or if is operating at less than
fifty percent (50%) of its full licensed power for a period
exceeding seven (7) days.
13. WB Affiliates Council: You, with the other affiliates of WB, shall form a
WB Affiliates Council (the "Council"), which shall be comprised of
representatives from five different affiliates of WB.
14. Non-Liability of Council Members: To the extent the Council and its
members are acting in their capacity as such, then the Council and each
member so acting shall not have any obligation or legal or other
liability whatsoever to you or to WB in connection with this Agreement,
including without limitation, with respect to the Council's or such
member's approval or non-approval of any matter, exercise or
non-exercise of any right or taking of or failing to take any other
action in connection therewith.
15. Warranties and Indemnities:
(a) WB agrees to indemnify, defend and hold Affiliate harmless against
and from all claims, damages, liabilities, costs and expenses
arising out of the use by Station under this Agreement of any WB
program or other material furnished by WB under this Agreement,
provided that Affiliate promptly notifies WB of any claim or
litigation to which this indemnity shall apply, and provided further
that Affiliate cooperates fully with WB in the defense or settlement
of such claim or litigation. Affiliate agrees to indemnify, defend
and hold WB harmless against and from all claims, damages,
liabilities, costs and expenses with respect to Affiliate's
operation of the Station or any material furnished, added or deleted
to or from WB programming by Affiliate. This indemnity shall not
apply to litigation expenses, including attorneys' fees, that the
indemnified party elects to incur on its own behalf. Except as
otherwise provided in this Agreement, neither Affiliate nor WB shall
have any rights against the other for claims by third
11
12
persons, or for the failure to operate facilities or to furnish WB
programs if such failure is the result of a force majeure event as
defined in Paragraph 6. Furthermore, notwithstanding any other
provisions of this Agreement, Affiliate shall not have any rights
against WB for claims by third parties or Affiliate arising out of
any actions or omissions of WB permitted under subparagraph 2(g).
(b) You agree to maintain for Station such licenses, including
performing rights licenses as now are or hereafter may be in
general use by television broadcasting stations and are necessary
for you to broadcast the television programs which we furnish to
you hereunder. We will clear all music in the repertory of
SESAC, ASCAP and BMI used in our programs. You shall obtain and
pay all costs associated with any performing rights licenses
necessary to broadcast such music. You will be responsible for
all music license requirements (and all other permissions) for
any commercial or other material inserted by you within or
adjacent to WB programs in accordance with this Agreement.
(c) You warrant that the License is in good standing and you agree to
comply with all relevant statutes and FCC rules and requirements
so as to maintain the License in good standing. In the event you
are found to have materially violated any laws or FCC rules or
requirements (after the exhaustion of all appeals so long as
Station retains the License during the pendency of such appeal),
the effect of which is that Station is of materially less value
to us as a broadcaster of WB programming than as of the date of
this Agreement, then we shall have the right to terminate this
Agreement upon 30 days prior written notice.
(d) Each party hereto warrants that all information delivered by it to
the other in connection with this Agreement shall be true and
correct in all material respects.
(e) Each party hereto warrants to the other that execution of this
Agreement and performance of its obligations will not violate or
result in a default under (i) any material agreement or
instrument to which it is a party or (ii) any statute, ordinance,
governmental rule or regulation in any material respect, or
order, judgment, injunction, decree or ruling of any court or
administrative agency applicable to it, which default would
materially interfere with the performance of it's obligations
hereunder.
(f) Each party hereto warrants that it is not a party to any legal
action or other proceeding before any court or administrative agency
which could prohibit the performance of it's obligations under this
Agreement.
16. Retransmission Consent: If any law, governmental regulation or other
action permits you to elect to require any cable television system or
other multichannel video program distributor to obtain your consent to
such system's or distributor's retransmission of Station's broadcast of
either Station's signal as a whole or any WB programming included therein,
then Affiliate and WB agree to negotiate in good faith regarding whether
such
12
13
consent is to be given (including without limitation, whether you shall or
shall not, in lieu of requiring consent, elect to require any cable system
to comply with any "must carry" rules, regulations or laws) and, if so,
the terms under which such consent is to be given (including without
limitation, the amount and type of compensation, if any, to be paid by the
system or distributor for such consent and whether any of that
compensation shall be shared between you and us). If WB and Affiliate do
not reach agreement with respect to all of the foregoing matters, then
without elimination to any of WB's other remedies, WB may terminate this
Agreement upon 30 days written notice to Affiliate. Nothing contained
herein shall authorize or allow the dissemination of WB programming by
Station outside of the DMA where Station is located, and any such
dissemination of WB programming outside of Station's DMA is prohibited.
17. Network Non-Duplication Protection: During the term of this Agreement,
Affiliate shall be entitled to network non-duplication protection, as
provided by Sections 76.92 through 76.97 of the FCC's rules, against
the presentation of any WB program by a cable system during the period
commencing one day before and ending fourteen (14) days after receipt
of such WB program by Station. The geographic zone of network
non-duplication protection shall be the Designated Market Area ("DMA")
(as defined by Xxxxxxx) in which your Station is located or any lesser
zone mandated by Sections 76.92 and 73.658(m) of the FCC's rules.
Network non-duplication protection shall extend only to WB programs
that Station is carrying in accordance with the terms of this Agreement
and such protection shall be subject to the terms and provisions of
subparagraph 2(f). You are under no obligation to exercise in whole or
in part the network non-duplication rights granted herein.
Notwithstanding anything to the contrary in this paragraph, no
non-duplication protection is provided against the signal of WGN until
such time that WB offers exclusivity against the signal of WGN to its
affiliates.
18. Affiliation Ratings Payments. Affiliate agrees to pay to WB an annual
payment, based on the Station's television market ratings, for WB prime
time programming, commencing with the initial broadcast by Station of
such programming, all as defined and set forth in the "Annual Ratings
Payment" Exhibit attached hereto. These payments are intended to
compensate WB for the WB programming and are in no way intended to, nor
do they confer on WB, any ownership or other equity interest in
Station. If, subsequent to January 1, 2004, WB modifies the financial
model then in effect between WB and stations affiliated with WB at that
time ("WB Affiliates") or modifies the terms and conditions under which
WB affiliates pay compensation to WB (the "compensation modification"),
including but not limited to a modification of the allocation of
commercial time between the WB affiliates and WB, then: (i) WB will
provide Affiliate with reasonable notice of the compensation
modification; and, (ii) Affiliate shall have the opportunity to either
elect to participate in the compensation modification or to opt out of
the compensation modification by advising WB in writing that Affiliate
has elected not to participate in the compensation modification. Upon
receipt of Affiliate's election, WB may: (i) accept Affiliate's
election to opt out of the compensation modification; or (ii) terminate
this Agreement upon 60 days prior written notice.
13
14
19. Notices and Reports:
(a) In addition to any other reports or forms requested herein, you will
provide to us in writing, in the manner reasonably requested by WB,
such reports covering WB programs broadcast by Station as we may
request from time to time. To the extent we provide you forms for
such purpose, you shall provide such reports on these forms.
(b) All notices, reports or forms required or permitted hereunder to
be in writing shall be deemed given when personally delivered
(including, without limitation, by overnight courier or other
messenger or upon confirmed receipt of facsimile copy) or on the
date of mailing postage prepaid, addressed as specified below, or
addressed to such other address as such party may hereafter
specify in a written notice. Notice to Affiliate shall be to the
address set forth for Affiliate on page 1 of this Agreement.
Additionally, notice will be sent to ACME Television Holdings,
00000 Xxxxx Xxxxxxxxx, Xxxxx 000, Xx. Xxxxx, XX 00000,
Attention: Xxx Xxxxx. Notice to WB shall be to: The WB
Television Network, 0000 Xxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxxxxx,
00000, Attention: General Counsel.
20. Miscellaneous:
(a) Nothing contained in this Agreement shall create any partnership,
association, joint venture, fiduciary or agency relationship between
the parties hereto.
(b) Nothing contained in this Agreement nor the conduct of any
officer, director, agent or employee of either WB or Affiliate
shall be deemed to create or to constitute ownership by WB, in
whole or in part, of Affiliate, Station or the License or in any
way constitute a derogation of the rights, duties and
responsibilities imposed upon Affiliate. Nothing in this
Agreement shall be deemed to delegate to WB, directly or
indirectly, any right to control the operations of Station.
(c) You shall at all times permit us, in connection with WB programming,
without charge, to place on, maintain and use at Station's premises,
at our expense, such equipment as WB shall reasonably require for
the distribution of WB Network programming. Station shall operate
such equipment for us, to the extent we reasonably request, and no
fee shall be charged by Station therefor.
(d) No waiver of any failure of any condition or of the breach of any
obligation hereunder shall be deemed to be a waiver of any preceding
or succeeding failure of the same or any other condition, or a
waiver of any preceding or succeeding breach of the same or any
other obligation.
(e) Each and all of the rights and remedies of WB and Affiliate under
this Agreement shall be cumulative, and the exercise of one or more
of said rights or remedies
14
15
shall not preclude the exercise of any other right or remedy under
this Agreement, at law or in equity. Notwithstanding anything to the
contrary contained in this Agreement, in no event shall either party
hereto be entitled to recover any lost profits or consequential
damages because of a breach or failure by the other party, and
except as expressly provided in this Agreement to the contrary,
neither WB nor Affiliate shall have any right against the other with
respect to claims by any third person or other third entity.
(f) Paragraph headings are included in this Agreement for convenience
only and shall not be used to interpret this Agreement or any of the
provisions hereof, nor shall they be given any legal or other
effect.
(g) As of the date hereof, this Agreement, including all Exhibits
attached hereto, constitutes the entire understanding between WB
and Affiliate concerning the subject matter hereof and shall not
be amended, modified, changed, renewed, extended or discharged
except by an instrument in writing signed by the parties or as
otherwise expressly provided herein. No inducement,
representations or warranties except as specifically set forth
herein have been made by either party to this Agreement to the
other. This Agreement replaces any and all prior and
contemporaneous agreements, whether oral or written, pertaining
to the subject matter hereof.
(h) This Agreement may be executed in counterparts, with the Agreement
being effective when each party hereto has executed a copy and
delivered that copy to the other party hereto.
(i) WB agrees to make WB programming available to Affiliate in
digital format, on a timetable and in a format determined by WB.
WB will consult with Affiliate concerning its plans for digital
production and delivery, including the transmission format to be
employed. After the inception of Affiliate's broadcasts on its
FCC-assigned digital frequency (the "DTV Channel"), Affiliate
agrees to carry WB programming that is supplied in digital format
on the DTV Channel. WB programming will be treated as
Affiliate's primary network programming on the DTV Channel. It
is acknowledged that Affiliate owns the digital bandwidth in its
DTV Channel, and that Affiliate is not obligated to provide WB
with more than one digital channel in its market.
15
16
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first written above.
THE WB TELEVISION NETWORK PARTNERS ACME TELEVISION LICENSEE
L.P. dba THE WB TELEVISION NETWORK OF UTAH
("WB") ("Affiliate")
By: /s/Xxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------- -------------------------------
Title: Title: Pres. & COO
---------------------------
Date: 9/7/99 Date: 9/7/99
16
17
ANNUAL RATINGS PAYMENT EXHIBIT
As part of the consideration to WB for the WB programming, Licensee agrees to
make annual payments to WB based on Station's television market ratings (the
"TMR Payments") for adults 18-49 for the prime time broadcast periods of WB
programming commencing with the initial broadcast by Station of WB programming.
Such payments shall partially compensate WB for the WB programming by
calculating the value and/or profitability added to Station as a result of its
affiliation with WB and pay to WB 25% of such added value and/or profitability.
Such payments are not intended to, nor do they, confer in WB any ownership
interest in Station. All defined terms used herein shall have the same meaning
as set forth in the Agreement unless otherwise defined herein. The TMR Payments
shall be calculated and paid as follows:
A. Calculation of TMR Payment Amount: At the end of each successive
Contract Year commencing on the Launch Date, the "Average Rating"
for each such Contract Year shall be determined by taking the
average of Station's television ratings (adults 18-49) for the prior
November, February, and May sweeps periods of such Contract Year as
reported on the Xxxxxxx Station Index ("NSI"), as processed,
refined, re-formatted or re-configured by that application commonly
known as the "SNAP System," but only with respect to those prime
time hours programmed by WB under the Agreement. Based on the
Station's Average Rating for each Contract Year and the number of
hours programmed by WB in that Year, Station shall owe WB the amount
(the "TMR Amount") set forth in the table attached hereto as the
Annual Ratings Payment Exhibit Table. For example, in the
particular case of Station, if the adults 18-49 rating for WB
programmed hours is 2.0 for a particular Contract Year, and WB is
programming 15 hours per week during such Year, then the TMR payment
that will be due and owing for such Year is $9,852. In the event
that either Station or WB contends that the TMR Payment for any
particular Contract Year, as set forth in the Annual Ratings Payment
Exhibit Table, is not an accurate statement of the twenty-five
percent (25%) share of the added value and/or profitability during
WB programmed prime time hours that Station owes to WB, or if the
TMR Payment for any particular Contract Year has increased or
decreased from the prior year's TMR Payment disproportionately in
comparison to the increase or decrease over such period in the
profitability of Station's WB furnished prime time programming
(after giving effect to any increase in the number of WB prime time
programming hours between the two periods), then either WB or
Station may request that the Station's financial results and
operational information be audited and reviewed by WB and the result
of such audit shall determine the level of the TMR Payment for the
given period. Promptly after such audit and review, WB and Station
shall meet to discuss such financial results and operational
information of Station and in good faith adjust the then currently
due TMR Payment to reflect the result of the audit and the intent of
these Payments as set forth in the introductory paragraph to this
Exhibit.
17
18
B. TMR Payment: The TMR Amount for each Contract Year shall be payable
by Licensee to WB within 15 days following WB's delivery to Licensee
of an invoice for the TMR Amount, which invoice shall be delivered
by WB not earlier than the release by NSI or any successor ratings
index of the ratings for the fourth and final sweeps period of such
Contract Year.
C. No NSI Ratings: In the event there are no NSI ratings available,
then Licensee and WB shall use those standard television market
ratings which are generally available and used by national and/or
regional advertisers for purposes of calculating advertising
payments to television stations.
D. Continuing Obligation. Licensee's obligation to make the above TMR
Payments on the basis set forth herein shall survive any termination
of this Agreement by WB, any sale or transfer of any Station assets
and/or any ownership interest in the Station and shall remain
binding on any successor Station owner, which successor remains an
affiliate and is approved by WB in its discretion as otherwise set
forth in the Agreement.
E. Calculation Of Baseline (IF APPLICABLE): It is recognized that
Station is a start-up, and that ratings data is not available to
track Station's historical performance during three previous
ratings periods. The parties have agreed that notwithstanding
anything to the contrary set forth above, the Baseline for the
calculation of the TMR payments will be calculated as follows:
During the __________ 199__ and ___________199__ and ____________
199__ sweeps periods the average ratings (Adults 18-49) for the
nights that are not programmed by WB will set the baseline number
for the computation of the TMR payment. The difference between
the baseline and the average rating for WB programmed nights
during the February, May and November sweeps period will
determine the amount that is due to WB, during the first year and
during all subsequent years. The calculation of ratings under
this paragraph shall be as reported on the Xxxxxxx Station Index
("NSI") as processed, refined, reformatted, or reconfigured by
that application commonly known as the "SNAP System".
18
