TELEPHONE SERVICES AGREEMENT
THIS AGREEMENT is made on October 20, 1995, by and between CAPITAL
DISTRIBUTION INC., a New York corporation d/b/a/CUPID NETWORK TELEVISION
("CNT"), with offices located at 0000 Xxxxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx
00000 and SPICE, INC. ("Spice"), a New York corporation, with offices at 000
Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
R E C I T A L S
A. Spice is engaged in the business of distributing multiple
television services featuring cable version adult movies. One service is
currently known as the Spice Service.
B. CNT produces the "Cupid" adult-oriented retail sale
programming segments,
. C. Simultaneously with the execution hereof, Spice and CNT are entering into a
Amended and Restated Distribution Agreement (the "Distribution Agreement") which
restates and amends in its entirety the prior Distribution Agreement between the
parties dated August 11, 1994 (the "Original Distribution Agreement") and which
provides for the exhibition of the Cupid segments on the Spice Service and which
grants Spice the right to distribute the Cupid segments on an exclusive basis on
the Spice Services.
D. Prior to the execution of the Original Distribution Agreement, Spice
operated telephone "chat lines" which Spice promoted on the Spice Service.
Pursuant to an Addendum to the Original Distribution Agreement (the
"Addendum")(copy attached as Exhibit A), Spice transferred administration and
the economic benefit of the chat lines to the Amtech service bureau then
utilized by CNT in exchange for a fee equal to 50% of Gross Sales (as such term
was defined in the Addendum). As part of such arrangement, CNT was obligated to
produce promotional spots for the Chat Lines and each party was responsible for
half of such cost.
E. The parties have agreed to revise the Original distribution
Agreement and the Addendum. Simultaneously with the execution hereof, the
parties are executing an Amended and Restated Distribution Agreement and this
Agreement which amends and restates Addendum in its entirety.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. DEFINITIONS. As used in this Agreement, the following
terms have the following respective meanings:
1.1 "Applicable Spice Subscriber Count" shall mean the number
homes or other dwelling units (including a private residential apartment,
condominium, mobile home or house) capable of receiving, as a result of being
equipped with addressable decoders or IRD's, the Spice Service via cable or
wireless television, high power KU band direct broadcast services such as
DirecTV, Primestar, Alphastar or any other similar means now existing or
hereinafter developed and the number of monthly Spice subscribers in the C band
direct to home to home market but excluding all other homes in the C-Band direct
to home market, as determined on the last day of the month preceding the month
for which the Spice Fee (as defined in Section 6.2) is being determined. For
example and in clarification of the foregoing, the July, 1995 Spice Fee shall be
based on the Applicable Subscriber Count determined on June 30, 1995 as set
forth by way of illustration in the invoice attached as Exhibit 1.
1.2 "Chat Lines" shall mean all telephone "chat lines"
advertised on the Spice Service.
1.3 "Chat Line Spots" shall mean the advertisements produced
by or for Spice as provided for in Section 3 hereof and which promote the Chat
Lines and have a length of between 30 seconds and five minutes and which will be
exhibited on the Spice Service as provided for herein.
1.4 "Cupid Segments" means CNT's adult-oriented programming
segments for sales of Cupid Goods and which is comprised of the Segments.
1.5 "Event" means a motion picture, production or
other event exhibited on the Spice Service.
1.6 "Interstitial Time" shall mean the time between the end of
an Event and the beginning of the next Event on the Spice Service which shall
average, on a monthly basis of approximately 18 to 20 minutes for each 90 minute
programming block containing an Event and which programming block commences
approximately two minutes before an Event.
1.7 "Spice Service" means Spice's single channel adult
entertainment programming service, currently transmitted via Anik E-2 and
including any successor adult entertainment programming service which is Spice's
premiere or first adult service (as represented and covenanted to in Sections
10.1 and featuring 11.1 featuring11.1 and whether or not using the "Spice" name)
and transmitted via satellite or any other means currently existing or
hereinafter developed and which currently features one (1) Event (and time
permitting, various interstitial programming) and including any future and
currently programmed in ninety (90) minute blocks, twenty-four (24) hours per
day seven (7) days per week.
2. ADMINISTRATION.
2.1 Throughout the term hereof, CNT, exclusively, shall
administer the Chat Lines. The parties acknowledge that the Amtech service
bureau is the service bureau currently utilized by CNT to administer the Chat
Lines until replaced by CNT in its sole discretion, subject to the provisions of
Sections 2.2 or 2.3.
2.2 CNT shall, at CNT's sole cost and expense, be solely
responsible for all of the following: (i) maintaining the Chat Lines and (ii)
all service bureau fees. CNT shall use its reasonable efforts to insure that the
service bureau engaged by CNT, provided first quality services comparable to
other adult telephone chat lines. CNT acknowledges that Spice will be monitoring
the Chat Lines for quality and service and CNT agrees to use its reasonable
efforts to cause implementation of suggestions made by Spice for improvement of
the Chat Line services.
2.3 CNT shall administer or cause the Chat Lines to be
administered in compliance with applicable rules and regulations and in a manner
which will not have a material adverse affect on Spice's business or reputation
as result of unfair or deceptive practices committed by CNT or by Amtech or any
successor service bureau engaged by CNT, provided that if Amtech or any service
bureau utilized by CNT is determined by Spice to be violating the provisions of
this Section 2.3, CNT shall terminate such service bureau within 5 days of
notice and shall have 60 days to locate and engage a replacement service bureau.
3. PRODUCTION OF CHAT LINE SPOTS.
3.1 Spice shall produce or cause others (which may include
CNT, in Spice's sole discretion) to produce Chat Line Spots and shall be
responsible for the production costs thereof. Spice agrees to produce a minimum
of eight approximately five minute Chat Line Spots per month, each to be cut
down to at least four shorter elements per Chat Line Spot until Spice has
established a library of no less than 120 Chat Line Spots. Thereafter, Spice
will produce at least 10 new Chat Line Spots (two spots of approximately five
minute cut down to at least four shorter spots) every 3 months.
3.2 Spice shall have primary authority over the content and
production of the Chat Line Spots. Spice shall provide proposed scripts of the
Chat Line Spots to CNT at least 10 days prior to their being shot and provide
screeners at least 20 days prior to the Chat Line Spots being aired for the
first time for CNT's comments and suggestions. Spice and CNT agree to cooperate
to reflect as many of CNT's comments and suggestions as are practicable. CNT
shall have the right to designate the 800 telephone numbers which appear in the
Chat Line Spots.
3.3 If the average revenue per Spice Subscriber generated by
CNT from the Chat Line Spots diminishes by more than 25% of the level from the
corresponding month from the prior year and CNT reasonably believes such
reduction is attributable to the content or quality of the Chat Line Spots, CNT
shall have the option to either (a) require Spice to permit CNT to produce the
Chat Line Spots provided (i) Spice's costs for the CNT produced Chat Line Spots
are comparable to Spice's costs of having the Chat Line Spots produced by third
parties and (ii) the on-air look and quality of the CNT produced Chat Line Spots
is comparable or better than the Chat Line Spots previously aired by Spice
and/or (b) direct which Chat Line Spots from Spice's library of Chat Line Spots
it wishes Spice to air.
3.4 All CNT produced Chat Line Spots delivered to Spice on or
prior to July 24, 1995 shall be at no charge to Spice and may be aired, in
Spice's sole discretion on the Spice Service. The parties acknowledge that it is
Spice's intention to replace the CNT produced Chat Line Spots with Chat Line
Spots produced by or for Spice at its direction as provided for herein.
4. SCHEDULING.
4.1 As used herein, the term "Featurette Time" means for each
month, with respect to the Spice Service on average approximately two-thirds of
the Interstitial Time.
4.2 Except as otherwise provided for herein, Spice shall
schedule and air the Chat Line Spots during the Featurette Time between each
Event on the Spice Service. Spice represents and warrants that the average
Featurette Time, on a monthly basis, will be no less than 20 minutes and Chat
Line Spots will be aired, on a monthly basis, an average of approximately 50% of
the Featurette Time. Within the foregoing parameters, the scheduling of Chat
Line Spots during the Interstitial Time shall be at Spice's sole discretion
provided, however, that CNT shall have the right to request that Spice air
certain of the Chat Line Spots based on revenues generated therefrom; Spice's
compliance with such requests shall not be unreasonably withheld. Spice
acknowledges that CNT would prefer that a Chat Line Spot be scheduled
immediately before and immediately after an Event. Spice agrees not to broadcast
anything other than Chat Line Spots during such time other than, in its
reasonable discretion, materials promoting the Spice Service.
5. FEE AND STUDIO USAGE.
5.1 Commencing July 1, 1995, CNT shall pay to Spice a fee (the
"Spice Fee") equal to $.011 multiplied by the Applicable Spice Subscriber Count.
The Spice Fee shall be paid as provided for in Sections 6.1 and 6.2.
5.2 If during the term of this Agreement, the number of
subscribers (determined in accordance with the principles used to determine the
Applicable Spice Subscriber Count) to adult programming services owned and
distributed by Spice (or an affiliate thereof operating in North America) other
than the Spice Service is greater than 30% of the Applicable Subscriber Count
for the Spice Service, the parties agree to renegotiate, in good faith, a
downward adjustment in the rate per subscriber used to determine the Spice Fee.
Prior to the commencement of any renegotiation as provided for herein, CNT shall
provide to Spice reports detailing the previous twelve months of calls and
revenues generated from the Chat Lines, including a breakdown of 800 and 900
calls (allocated on a consistent basis which if CNT determines to invoke this
provision, Spice shall have the right to review such allocation and audit the
900 revenue numbers) and such other information as Spice may reasonably request.
5.3 If during the term of this Agreement, the average gross
monthly revenues per subscriber derived by CNT from operation of the Chat Lines
for any three month period is less than 70% or more than 130% of the average
gross monthly revenues per subscriber from the corresponding three months from
the prior year, the parties agree to renegotiate, in good faith, the rate per
subscriber used to determine the Spice Fee. For example if the average monthly
revenues per subscriber for July, August and September of 1994 was $1.00, CNT
would be entitled to renegotiate the Spice Fee if the average gross monthly
revenues for July, August and September of 1995 were less than $.70 and Spice
would be entitled to renegotiate the Spice Fee if the average gross monthly
revenues for July, August and September of 1995 were more than $1.30. CNT shall
not be entitled to trigger a renegotiation of the Spice Fee unless CNT has
provided Spice with monthly reports of its revenues from both 800 and 900
numbers within 15 days of the end of each month in both such three month
periods.
5.4 Twelve times a year, approximately once a month, CNT will
make available its studios to Spice for its use at no charge. Spice and CNT
shall cooperate to schedule such usage on a mutually agreeable day. CNT will
provide the studio to Spice with three cameras, director of photography,
technical director, character generator, audio, make-up and appropriate crew and
CNT provided talent. If CNT cannot provide studio usage to Spice for a
particular month or scheduled time, CNT shall either provide a replacement
studio or pay Spice $5,000.
6. PAYMENT; STATEMENTS AND AUDIT.
6.1 Commencing July 1995, no later than 20 days after the end
of each month, Spice shall provide to CNT an invoice ("Invoice") detailing the
calculation of the Applicable Spice Subscriber Count and the Spice Fee.
6.2 CNT shall remit to Spice the Spice Fee the later of
thirty (30) days after each calendar month or ten (10) days after CNT
receives the Invoice from Spice.
6.3 Spice shall keep and maintain, at Spice's principal place of
business, complete and accurate books and records relating to the calculation of
the Applicable Spice Subscriber Count by cable system, C-Band direct to home
subscribers and KU Band DBS distributors. During the term of this Agreement and
for two years thereafter, at CNT's expense, CNT by its representatives,
accountants and/or designated agents shall have the right, at Spice's office and
during regular business hours, to audit and check Spice's books and records for
the purpose of verifying and confirming the accuracy of the Invoices delivered
to CNT by Spice and the amount of the Spice Fees paid or payable under this
Agreement.
7. TERM.
7.1 The term of this Agreement shall become effective as of
July 1, 1995 and the Addendum shall be superseded on such date. The term shall
continue until October 30, 2000, unless sooner terminated as provided herein. As
used herein, "Term" means the period which commences on August 11, 1994 and ends
on the date on which this Agreement is terminated. If (i) the Agreement is in
effect at the end of the scheduled five (5) year Term, (ii) there have be no
material breaches of the Agreement which have remained uncured and (iii) Spice
plans to continue the Chat Lines and to broadcast Chat Line Spots on the Spice
Service in the future, Spice (or an affiliate operating in North America) will
grant CNT a right of first refusal and a right of last offer to continue to
provide administration of the Chat Lines on the Spice Service on terms
competitive with that offered by any bona fide third party with experience in
the business of administering chat lines in accordance with Section 7.2.
7.2 By no later than July 31, 2000, Spice shall give CNT
notice of its intention whether it plans to continue to offer Chat Lines Spots
on the Spice Service. If it does, CNT shall have up to 60 days to make an offer
(the "CNT Offer") to Spice to provide such services and the essential economic
terms thereof. Spice shall then have up to 60 days to obtain bona fide bids from
third parties with experience in the telephone services business. If any such
bids contain more favorable economic terms than the CNT Offer, Spice shall give
CNT notice within such 60 day period of such competing bid(s) specifying the
terms thereof and the identity of the third party(ies) (the most favorable of
such bids is referred to as the "Competing Bid"). CNT shall have 30 days from
its receipt of the Competing Bid to elect to match the Competing Bid in which
event CNT and Spice will enter into an agreement on terms and conditions
consistent with the Competing Bid. If CNT elects not to match the Competing Bid,
Spice shall be free to enter into a telephone services agreement with the third
party providing the Competing Bid provided such agreement contains economic
terms which are consistent with the Competing Bid and such other terms and
provisions as are customary and typical for such agreements.
8. CUSTOMER LISTS.
CNT shall download on a monthly basis, a list of all customers
telephone numbers (including no more than four times a year, customer names and
other pertinent information) ("Customer Lists") using the Chat Lines (including
customers using the 900 telephone number for non-credit card calls who shall be
reported on the list by virtue of calling an 800 number). Spice may use the
Customer List for statistical purposes as a matter of right, and for any purpose
other than soliciting such customers for any service, merchandise or product
sales which would be competitive with the business conducted by CNT as described
herein or in the Distribution Agreement with CNT's prior consent, which consent
will not be unreasonably withheld. Spice acknowledges and agrees that (i) the
Customer List is owned by CNT and (ii) it will not use the Customer List in any
manner other than as specifically permitted herein.
9. REPRESENTATIONS AND WARRANTIES OF CNT. CNT represents and
warrants to Spice as follows:
9.1 CNT is a corporation duly organized, validly existing and
in good standing under the laws of the State of New York and has all requisite
corporate power and authority to own and use its properties and assets and to
conduct its business as and where such properties and assets are now owned or
used and such business is now conducted. CNT is duly qualified and in good
standing to do business as a foreign corporation in every jurisdiction where
such qualification is necessary.
9.2 CNT has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. This Agreement
and all transactions contemplated hereby and any documents to be delivered by
CNT pursuant hereto have been duly authorized by all requisite corporate action
of CNT and constitute the legal, valid and binding obligations of CNT,
enforceable in accordance with their terms.
9.3 The execution, delivery, and performance of this Agreement
and of all other documents to be delivered by CNT and the consummation of the
transactions contemplated hereby will not violate the Certificate of
Incorporation or bylaws of CNT and will not, with or without the giving of
notice or the passage of time or both, effect a breach or default of, or cause
an event of default under, any mortgage, agreement, instrument, statute,
regulation, order, judgment or decree to which CNT is a party or by which CNT is
bound or affected.
9.4 There are no claims, suits, actions or proceedings
pending, or to CNT's knowledge threatened, against CNT in connection with or
relating to or which could have an effect on the transactions contemplated by
this Agreement.
10. REPRESENTATIONS AND WARRANTIES OF SPICE. Spice represents
and warrants to CNT as follows:
10.1 Spice is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York and has all
requisite corporate power and authority to own and use its properties and assets
and to conduct its business as and where such properties and assets are now
owned or used and such business is now conducted. Spice is duly qualified and in
good standing to do business as a foreign corporation in every jurisdiction
where such qualification is necessary.
10.2 Spice has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. This Agreement
and all transactions contemplated hereby and any documents to be delivered by
Spice pursuant hereto have been duly authorized by all requisite corporate
action of Spice and constitute the legal, valid and binding obligations of
Spice, enforceable in accordance with their terms.
10.3 The execution, delivery, and performance of this
Agreement and of all other documents to be delivered by Spice and the
consummation of the transactions contemplated hereby will not violate the
Certificate of Incorporation or bylaws of Spice and will not, with or without
the giving of notice or the passage of time or both, effect a breach or default
of, or cause an event of default under, any mortgage, agreement, instrument,
statute, regulation, order, judgment or decree to which Spice is a party or by
which Spice it is bound or affected.
10.4 There are no claims, suits, actions or proceedings
pending, or to Spice's knowledge threatened, against Spice in connection with or
relating to or which could have an effect on the transactions contemplated by
this Agreement.
10.5 That if a cable system or DBS distributor distributes
only one Spice service, that service will be the Spice Service.
11. SPICE COVENANTS.
11.1 Spice covenants that the Spice Service will be the first
Spice (or any Spice affiliate operating in North America) owned, operated and
distributed adult service distributed in each cable and DBS system and the last
Spice owned, operated and distributed adult service remaining in each cable
system or DBS system.
11.2 Spice agrees that it will not advertise or otherwise
promote any chat line services of the type contemplated by this Agreement other
than the Chat Lines on the Spice Service.
12. EVENTS OF DEFAULT. The occurrence of any of the
following events shall constitute, and is hereby defined to be, an "Event of
Default":
12.1 With respect to CNT, (i) the failure to pay the Spice Fee
when due, (ii) the material failure to comply with the provisions of Section
5.4, (iii) the administration of the Chat Lines in a manner which violates the
provisions of Section 2.3, or (iv) the failure to supply Spice with the Customer
List as provided for in Section 8.
12.2 With respect to Spice, (i) the failure to produce or
cause to be produced the Chat Line Spots as provided for in Section 3, (ii) the
failure to broadcast the Chat Line Spots in accordance with Section 4.2 (iii)
the violation of either Section 11.1 or 11.2.
12.3 The material failure of either party (the "Obligated
Party") to punctually and faithfully observe or perform any of the covenants,
conditions or obligations imposed upon Obligated Party by this Agreement.
Agreement.
12.4 The material falsity of any representation or
warranty of the Obligated Party contained in this Agreement.
12.5 The termination of the Distribution Agreement as a
result of the uncured breach thereof by CNT.
12.6 The assignment for the benefit of creditors by the
Obligated Party or the commencement of a case under Title 11 of the United
States Code (Bankruptcy) by or against the Obligated Party, provided that in the
case of a bankruptcy case filed against the Obligated Party, an Event of Default
shall not be deemed to occur if the case is vacated within thirty (30) days
after the filing thereof.
12.7 The appointment of a receiver, trustee or custodian for
or over the Obligated Party or any of the Obligated Party's property not vacated
within ten (10) days thereafter.
12.8 The termination of existence or cessation of
business of the Obligated Party.
13. REMEDIES. If an Event of Default occurs, then the party which is
not is default (the "Non-Defaulting Party") shall have all of the rights and
remedies hereinafter provided. Notwithstanding the foregoing, if the Event of
Default is an event described in Section 12.1, 12.2, 12.3 or 12.4, then (i)
Non-Defaulting Party shall give written notice (the "Default Notice") thereof to
the Obligated Party, (ii) Obligated Party shall have twenty (20) business days
after the Default Notice is given to cure or remedy such Event of Default and
(iii) Non-Defaulting Party shall not exercise any of the rights and remedies
herein provided if Obligated Party has fully cured or remedied such Event of
Default by the expiration of such 20-business day grace period.
13.1 Non-Defaulting Party may, at Non-Defaulting Party's
option, terminate this Agreement.
13.2 Non-Defaulting Party may pursue any legal or equitable
remedy available to collect all sums owing from Obligated Party to
Non-Defaulting Party and to enforce any and all other rights or remedies
available to Non-Defaulting Party, and no such action shall operate as a waiver
of any other right or remedy of the Non-Non-Defaulting Party under the terms
hereof, or under the laws of the State of New York.
14. INDEMNIFICATIONS.
14.1 As used herein, the following terms shall have the
following meanings:
"CNT's Group" shall mean CNT, its subsidiary and
affiliated companies, Amtech, its officers, directors, employees and
shareholders, and its successors and assigns, and each of them.
"Spice's Group" shall mean Spice, its
subsidiary and affiliated companies, its officers, directors, employees
and shareholders, and its successors and assigns, and each of them.
14.2 CNT's Group shall, indemnify and hold
harmless Spice's Group from and against the following:
(a) Any damages, losses, obligations,
liabilities, claims, actions or causes of action sustained or suffered by
Spice's Group arising from or relating to any breach of any representation,
warranty, covenant or agreement made by CNT's Group in this Agreement, or in
any certificate, instrument or agreement delivered by CNT's Group pursuant
hereto or thereto or in connection with the transactions contemplated hereby
or thereby, or any facts or circumstances constituting such breach.
(b) Any damages, losses, obligations,
liabilities, claims, actions or causes of action sustained or suffered by
Spice's Group arising from or relating to the execution, delivery or
performance of this Agreement by CNT's Group.
(c) All reasonable costs and expenses
(including, without limitation, reasonable attorneys', accountants' and
other professional fees and expenses) incurred by the Spice's Group in
connection with any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against under subparagraphs (a)
and (b) immediately above.
14.3 Spice shall indemnify and hold harmless CNT's
Group from and against the following:
(a) Any damages, losses, obligations,
liabilities, claims, actions or causes of action sustained or suffered by
Spice's Group arising out of or relating to any breach of any representation,
warranty, covenant or agreement made by Spice in this Agreement, or in any
certificate, instrument or agreement delivered by any of such parties pursuant
hereto or thereto or in connection with the transactions contemplated hereby or
thereby or any facts or circumstances constituting such breach or as a result
of the content of the Chat Line Spots which are not produced by CNT.
(b) Any damages, losses, obligations,
liabilities, claims, actions or causes of action sustained or suffered by
CNT's Group arising out of or relating to Spice's execution, delivery or
performance of this Agreement.
(c) All reasonable costs and expenses
(including, without limitation, reasonable attorneys', accountants' and
other professional fees and expenses) incurred by CNT's Group, in connection
with any action, suit, proceeding, demand, assessment or judgment incident
to any of the matters indemnified against under subparagraphs (a) and (b)
immediately above.
14.4 The person(s) seeking indemnity under Paragraph 14.2 or
14.3 of this Section, as the case may be (hereinafter referred to as the
"Indemnitee") shall give written notice to the persons and/or entities from whom
or which such indemnity is sought hereunder (each and all of such persons and
entities being hereinafter referred to as the "Indemnitor") of any assertion of
liability by a third party which might give rise to a claim by the Indemnitee
against the Indemnitor based on the indemnity contained herein, stating the
nature and basis of said assertion and the amount thereof, to the extent known.
The defense of any suit, action, legal or
administrative proceeding that may be threatened, brought or instituted
against any Indemnitee on account of any matter which is or may be the subject
of the indemnity provided for herein shall be conducted at the sole expense of
the Indemnitor by legal counsel unilaterally selected and approved by the
Indemnitee.
The Indemnitee shall be kept fully informed of such action,
suit or proceeding at all stages thereof. The Indemnitor shall not make any
settlement of any claim without the prior written consent of the Indemnitee,
not to be unreasonably withheld, provided that if Indemnitor fails to undertake
the defense of such action, suit or proceeding, then Indemnitee may settle
such claim on such terms as the Indemnitee elects and Indemnitor shall be
deemed to have approved such settlement.
14.5 The remedies provided for in this Section shall be
cumulative and shall not preclude assertion by the Indemnitee of any other
rights or the seeking of any other remedies against the Indemnitor.
14.6 The provisions of this Section shall survive the
termination of this Agreement.
15. CONFIDENTIALITY.
15.1 Each party (each the "Responsible Party") hereto
acknowledges that in the course of performing the Responsible Party's
obligations under this Agreement, the Responsible Party will acquire or have
access to information and knowledge which relates to the other party and/or to
affiliate(s) of the other party (such other party and all affiliates of such
other party being hereinafter separately and collectively referred to as the
"Other Party"), and/or to the products, methods, billing practices and financial
condition of the Other Party. As used herein, the term "Confidential
Information" means any information which pertains in any way to the Other Party
and which is not generally known to the public or disclosed pursuant to a
requirement of a duly empowered government agency or court of competent
jurisdiction.
15.2 The Responsible Party agrees that with respect to the
Confidential Information, the Responsible Party will not at any time, without
the express written consent of the Other Party, disclose to any third party
whatsoever any Confidential Information.
15.3 Without limiting anything contained in the previous
provisions of this Section, neither party shall disclose to any third party the
terms and provisions of this Agreement.
15.4 Notwithstanding the foregoing, either party may, without
the consent of the other party, disclose the terms of the Agreement as may be
required by law to its attorneys, accountants, employees, agents or for any bona
fide business purpose, such as the requirements of banks, investment bankers and
creative personnel, on the condition that the recipient of any such disclosure
agrees to keep said terms confidential.
15.5 The provisions of this Section shall survive the
termination of this Agreement.
16. INSURANCE.
Each party, including any service bureau retained by CNT to
provide services hereunder, shall procure and maintain insurance policies with
respect to such party's products and services from a nationally recognized
insurance carrier in the United States and having limits of not less than $1
million per occurrence. CNT agrees within 30 days of the execution hereof to
cause such insurance to be procured naming Spice as a named insured under such
policies as Spice and CNT shall reasonably determine in good faith negotiations
are necessary.
17. TEST MARKET. Notwithstanding the provisions of Section 11.2 and any
other provision of this Agreement to the contrary, Spice shall be entitled on
one occasion to exhibit for no more than one minute of the Interstitial Time
during which Chat Line Spots and Segments are not exhibited, a psychic xxxx xxxx
or personals club (a "Trial Use") promoted by a third party for a period of 90
days (the "Trial Period"). Spice shall give CNT full and accurate reports
concerning revenues generated by the Trial Use during the Trial Period. At the
end of the Trial Period, Spice may either (i) terminate the Trial Use, (ii)
offer CNT the opportunity to promote its own use, (iii) or negotiate in good
faith with CNT for a either a percentage of Spice's share of the revenues from
the Trial Use or flat fee to permit spice to exhibit the Trial Use.
18. SEVERABILITY. If any term or provision of this Agreement or the
application thereof to any party or circumstance shall, to any extent, be
invalid and/or unenforceable, the remainder of this Agreement and the
application of such term of provision to any other party(ies) or circumstance(s)
other than those as to which it is held invalid and/or unenforceable, shall not
affected thereby, and each such other term and provision of this Agreement shall
be valid and be enforceable to the fullest extent permitted by law. Nothing
contained in this Agreement shall be construed so as to require the commission
of any act contrary to law, and wherever there is any statute, law, ordinance,
order or regulation contrary to which the parties have the legal right to
contract, the latter shall prevail. In such event any provision of this
Agreement which is affected shall be curtailed and limited only to the extent
necessary to bring it within the legal requirements and no other provision of
this Agreement shall be affected thereby and each such other provision shall
continue in full force and effect and shall be valid and enforceable to the
fullest extent permitted by law.
19. FURTHER DOCUMENTS. Each party shall promptly execute, acknowledge
and deliver to the other party, or promptly procure the execution,
acknowledgment and delivery to the other party, of any and all further
agreements and instruments which such party may deem necessary or expedient to
effectuate the purposes of this Agreement.
20. ARBITRATION. Any dispute or controversy arising under this
Agreement shall be determined by binding arbitration by, and under the
commercial rules (the "Commercial Rules") of, the American Arbitration
Association. Hearings on such arbitration shall be held in New York County
before one (1) arbitrator experienced in commercial law. The arbitrator shall
hear and determine any such controversy in accordance with applicable New York
law and the intention of the parties as expressed in this Agreement and upon the
evidence produced at the arbitration hearing. Pre-arbitration discovery shall be
permitted as authorized under the Commercial Rules or New York law applicable to
arbitration proceedings.
If the American Arbitration Association is not then in
existence or for any reason fails or refuses to act, the arbitration shall be in
conformity with and subject to the provisions of the New York Code of Civil
Procedure relating to arbitration as in effect at the time the notice or demand
for arbitration is given.
The entire cost and expense of arbitration shall be borne by
the losing party in the arbitration or in such manner as the arbitration may
apportion.
The decision of the arbitrator shall be binding upon the
parties and shall be subject to confirmation as a judgment under the then
governing statutes of the State of New York.
21. WAIVERS. No waiver by either party of any breach or
default hereunder shall be deemed to be a waiver of any preceding or
subsequent breach or default.
22. NOTICES. Any notice, request, demand, consent, waiver or other
communication which either party may wish to serve or may be required to serve
on the other party hereunder shall be served by personal delivery, by facsimile,
by prepaid recognized overnight air express delivery or by prepaid certified
mail, return receipt requested addressed to the appropriate party as follows:
(a) To CNT:
Capital Distribution Inc.
d/b/a Cupid Network Television
0000 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Yerushalmi, Shiboleth, Yisraeli
& Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxx Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) To Spice:
Spice, Inc.
000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All notice shall be deemed received: the same business day
delivered if personally delivered to the party to whom addressed; the same
business day transmitted if sent by facsimile (as evidenced by a copy of the
facsimile and the "answerback" thereto indicating the date and time of
transmission thereof to the receiving party); one (1) business day after the
same is delivered to the air express company or three (3) business days after
the same is deposited, postage paid in the United States Postal Service. Either
party may from time to time change its address or facsimile number for the
purpose of notice by giving like notice in accordance with this paragraph.
23. ASSIGNMENT AND SUCCESSORS. Neither party may assign this Agreement
without the prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, either party
may assign this Agreement to a parent company, subsidiary or affiliate of such
party or an entity acquiring all or substantially all of such party's assets and
any such assignment shall discharge such party of liability hereunder. Any
purported assignment or delegation contrary to the foregoing shall be null and
void. Subject to the foregoing, this Agreement shall inure to the benefit of and
shall be binding upon the parties' parents, subsidiaries and affiliated
corporations, their agents, licensees, successors and assigns.
24. RELATIONSHIP OF THE PARTIES. Nothing herein contained shall be
deemed to constitute either of the parties a joint venturer or partner or agent
of the other. Neither party shall hold itself out contrary to the terms of this
Agreement and neither party shall become liable by reason of any representation,
act or omission of the other contrary to the provisions hereof.
25. APPLICABLE LAW. This Agreement shall be construed in accordance
with the laws of the State of New York (including the applicable statute of
limitations) applicable to agreements executed and wholly performed within such
State. The parties consent and agree to the exclusive jurisdiction of the State
and Federal courts having jurisdiction of the State and Federal courts having
jurisdiction over New York County, New York with respect to any action which any
party desires to commence arising out of or in connection with this Agreement or
any breach or alleged breach of any provision hereof.
26. PARAGRAPH HEADINGS. Paragraph headings are for convenience
only, and shall not effect, qualify or amplify the interpretation of this
Agreement.
27. BINDING EFFECT. This Agreement, and all rights and
obligations hereunder, shall be binding on and inure to the benefit of the
parties hereto and their respective heirs, executors, legal and personal
representatives, successors, licensees and assigns.
28. FORCE MAJEURE. Neither party shall be liable to the other for any
loss, damage or default occasioned by strike, civil disorder, governmental
decree or regulation, acts of God or any other force majeure beyond the control
of such party. If an event of force majeure lasts more than three (3) months,
either party may terminate this Agreement upon written notice to the other
party.
29. ATTORNEY'S FEES. In any arbitration or litigation between the
parties relating to this Agreement, the enforcement of any of its terms or to
any other contract relating to the subject matter of this Agreement, the
prevailing party shall, in addition to any other award of damages or other
remedy, be entitled to reasonable attorney's fees, costs and other expenses as
may be fixed by the Court.
30. ENTIRE AGREEMENT. This Agreement contains the full and
complete understanding between the parties hereto and supersedes all prior
understandings, whether written or oral including the Addendum and the
Original Distribution Agreement, and written agreement(s) pertaining to the
subject matter hereof.
31. AMENDMENT. This Agreement may not be amended or modified
except by a written instrument signed by the parties hereto.
32. SURVIVAL. All representations, warranties and covenants
of each party as set forth in this Agreement shall survive the termination of
this Agreement.
33. RELEASE. The parties hereby waive the effects of and
release each other from any breach which may have occurred prior to
October 20, 1995 under any prior agreement between the parties which relates
to the subject matter of this Agreement.
IN WITNESS WHEREOF, the parties hereby have duly executed and delivered
this Agreement as of the day and year first above written.
CAPITAL DISTRIBUTION INC. d/b/a CUPID NETWORK
TELEVISION
By: /s/ Offer Assis____________
OFFER ASSIS, President
SPICE, INC.
By: /s/Xxxxxx Xxxxxxxxx
XXXXXX XXXXXXXXX, Executive Vice
President
