EXHIBIT 10.16
Certain information contained in this exhibit has been omitted and filed
separately with the Commission along with an application for Non-disclosure of
Information pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
ENHANCEMENT LICENSE AGREEMENT
THIS ENHANCEMENT LICENSE AGREEMENT (this "License Agreement")
is made and entered into by and between ARC Holding, Ltd., a limited partnership
formed under the laws of the State of Texas, d/b/a "Fox Sports Southwest"
("Licensor") and ACTV, Inc., a corporation formed under the laws of the State of
Delaware ("ACTV") to be effective as of the 28th day of February 1997 pursuant
to that certain Master Programming License Agreement dated December 2, 1996
between ACTV and Liberty/Fox U.S. Sports, L.L.C. (the "Master Agreement").
1. Grant of Enhancement License. Licensor hereby grants to
ACTV a non-exclusive Enhancement License (all capitalized terms used in this
License Agreement which are not otherwise defined in this License Agreement
shall have the meanings assigned to them in the Master Agreement) to Enhance and
Distribute Licensor's RSN Programming in accordance with and subject to the
terms of the Master Agreement, the terms and provisions of which are hereby
incorporated in this License Agreement in their entirety as though restated
herein.
2. Territory. The Territory covered by the Enhancement
License granted hereby shall be as set forth on Schedule I attached to this
License Agreement.
3. License Term. The License Term of the Enhancement License
granted hereby shall be from January 31, 1997 to December 31, 2001. ACTV agrees
to negotiate in good faith with Licensor during the 60-day period commencing
90 days prior to the end of the License Term or any extension thereof with
respect to an extension of this Enhancement License, and ACTV agrees that it
will not, during- or prior to the end of such period, negotiate or entertain any
offers from any other party regarding any Enhancement or distribution of any
sports programming which would violate the terms of this Enhancement License if
done during the License Term.
4. Licensor's Prop-Programming Commitment. Licensor agrees,
during the License Term, to make available to ACTV for Enhancement and inclusion
in the Enhanced Regional Package at least the RSN Programming specified on
Schedule 2 attached to this License Agreement and agrees that the License Fees
specified in Section 6 of this License Agreement shall be subject to the
reductions specified on such Schedule 2 if Licensor fails to meet such
Programming, Commitment.
5. ACTV's Enhancement Commitment. ACTV agrees that its
Enhancement Commitment to Enhance and Distribute as part of the Enhanced
Regional Package will extend, throughout the License Term, to all of the
Licensor's RSN Programming which consists of professional sporting events (other
than those specifically excluded on Schedule 3 attached to this License
Agreement) and to all other RSN Programming specified on such Schedule
6. License Fees. As partial consideration for the Enhancement
License granted hereby, ACTV shall pay Licensor for each month during the
License Term, commencing with the month during which the first Enhanced Program
is Distributed by ACTV, the following:
(A) Until such time as the Number of Subscribers for any month
exceeds [XXXXXXX]:
(1) $[XXXXXX] multiplied by the lesser of (a)
the Number of Subscribers for the month for
which payment is being computed or
(b) [XXXXXXX], plus
(2) $[XXXXXXX] multiplied by the lesser of (a)
the excess, if any, of
the Number of Subscribers for the month for
which payment is being computed over
[XXXXXXX], or (b) [XXXXXXX], plus
(3) $[XXXXXXX] multiplied by the lesser of (a)
the excess, if any of the Number of
Subscribers for the month for which payment
is being computed over [XXXXXXX], or (c)
[XXXXXXX].
(B) For the first month for which the Number of
Subscribers exceeds 300,000 and for each month during
the License Term thereafter:
(1) $[XXXXXXX] multiplied by the lesser of (a)
the Number of Subscribers for the month for
which payment is being computed or (b)
[XXXXXXX], plus
(2) $[XXXXXXX] multiplied by the excess, if any,
of the Number of Subscribers for the month
for which payment is being, computed over
[XXXXXXX].
7.[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXX.]
8. Addresses for Notices. All notices, requests, demands,
directions and other
communications relating to this License Agreement, the Enhancement License
granted hereby or the Master Agreement shall be addressed as follows:
If to Licensor: General Manager
Fox Sports Southwest
000 Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxx 00000
With a copy to: Legal Department
Fox Sports Southwest
000 Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxx 00000
If to ACTV: President
ACTV
1270 Avenue of the Americas
Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party in the manner set forth in Section 17 of
the Master Agreement.
9. Ratings. ACTV represents and warrants that the
viewers of the Enhanced Regional Package will be included among Licensor's
viewers by the appropriate ratings service (such as, for example Xxxxxxx) for
purposes of computing Licensor's viewership ratings.
10. Entire Agreement. This License Agreement and the
Master Agreement set forth the entire a-agreement and understanding of the
parties relating- to the subject matter hereof, and supersede all prior
agreements, arrangements and understandings relating to the subject matter
hereof.
11. Coordination of Advertising Sales Efforts. Notwithstanding
anything in the Master Agreement to the contrary, to ensure a cohesive sales
efforts and to avoid advertisers' and ad sales personnel's confusion, ACTV may
only make sales calls for advertising, sales for Enhanced Advertising in
Licensor's Enhanced RSN Programming in conjunction with or, with respect to each
such sales call, with the prior approval of, Licensor.
12. Coordination of Affiliate Sales Efforts.
(A) Notwithstanding anything in the Master Agreement to the
contrary, ACTV will keep Licensor fully apprised of, and will allow
Licensor reasonable input to and will seriously consider in good faith
Licensor's input to, ACTV's efforts to enter into licenses, and the
terms of such licenses, with Licensor's Basic Regional Service
Distributors for distribution of the Enhanced Regional Package. Without
limiting the Generality of the prior sentence, ACTV will keep Licensor
fully apprised of (i) ACTV's suggested retail rate and ACTV's wholesale
rate for the Enhanced Regional Package-e, subject, however, to an
nondisclosure requirements in ACTV's agreement with Licensor's Basic
Regional Service Distributors, which non-disclosure requirements ACTV
will use it good faith best efforts to ensure do not prohibit
disclosure of such information to Licensor, (ii) the other Enhanced
programming packaged with the Enhanced Regional Package, and (iii)
ACTV's sales visits to Basic Regional Service Distributors' offices
within the Territory.
(B) Notwithstanding anything in the Master Agreement to the
contrary, absent Licensor prior written consent, ACTV may only license
the Enhanced Regional Package to those of Licensor's Basic Regional
Service Distributors who at all relevant times are carrying the Basic
Regional Service on the each applicable system's basic tier or expanded
basic tier.
(C) ACTV must not in its dealings with any of Licensor's Basic
Regional Service Distributors adversely interfere with Licensor's
relationship with such Distributors, including without limitation
urging any Distributor to seek a rate reduction from, or different
level carriage from, Licensor for Licensor's Basic Regional Service.
IN WITNESS WHEREOF, Licensor and ACTV have caused this License
Agreement to be duly, executed as of the date first above written.
ACTV, INC. Fox Sports Southwest
By: /s/ Xxxxx Xxxxx By: /s/ Xxx Xxxxxxx
Xxxxx Xxxxx, President Xxx Xxxxxxx, General Manager
Date: 2/28/97 Date: 2/28/97
SCHEDULE I
to Enhancement License Agreement between
ACTV, Inc. and Fox Sports Southwest
The Territory shall be the States of Texas, Arkansas, Louisiana, and Oklahoma,
and the following counties in the State of New Mexico: Lea, Eddy, Roosevelt,
Curry, Chavez, XxXxxx, Xxxx Xxx, Quay and Union.
SCHEDULE 2
to Enhancement License Agreement between
ACTV, Inc. and Fox Sports Southwest
Licensor agrees that it will make available to ACTV for Enhancement and
inclusion in the Enhanced Regional Package all of Licensor's RSN Programming-,
limited only by applicable Rights Restrictions. If for any year during the
License Term ACTV nevertheless is unable, for lack of sufficient rights to such
events, to Enhance and Distribute at least 100 professional events out of
Licensor's RSN Programming- to substantially all of the State of Texas, unless
such number of professional events is not available in any year due to a strike,
lockout or similar league or team labor problem, the monthly License Fees for
such year shall be adjusted to the product of $[XXXXXXX] (or such greater amount
as may be specified under Section 7 of this License Agreement) multiplied by the
Number of Subscribers for the month for which payment is being computed.
Notwithstanding that there is a reduction in the geographic area within the
State of Texas to which Licensor is permitted to distribute NHL Dallas Stars
events due to another NHL team being, awarded a franchise in the Territory, all
Stars games included in Licensor's RSN Programming will nonetheless be counted
toward the 100 professional events.
SCHEDULE 3
to Enhancement License Agreement between
ACTV, Inc. and Fox Sports Southwest
Commencing with the 1998 NCAA football season, ACTV agrees to Enhance and
distribute, each week during the NCAA football season, as part of the Enhanced
Regional Package at least one Big VII regular season football game carried as
part of Licensor's RSN Programming. So long as it can do so without incurring
any material out-of-pocket expenses, Licensor will use commercially reasonable
efforts to assist ACTV in obtaining the rights to distribute those Enhanced
football games in areas within the United States outside of the Territory, so
long as ACTV has obtained the right to distribute the Basic Regional Service of
all Affiliated RSNs whose Basic Regional Service territories cover that area. In
addition, if at any time during the License Term Licensor requests that ACTV
Enhance and Distribute as part of the Enhanced Regional Package any other of
Licensor's RSN Programming (i.e., Licensor's RSN Programming that ACTV otherwise
is not required to Enhance under this Agreement), ACTV agrees to give such
request serious consideration and to negotiate in good faith with Licensor
regarding such request.
