MASTER PROGRAMMING LICENSE AGREEMENT
BETWEEN
ACTV, INC. AND LIBERTY/FOX U.S. SPORTS, L.L.C.
TABLE OF CONTENTS
PAGE
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1. Selection of Affiliated RSNs ..................................... 2
2. Terms of Enhancement License ..................................... 2
3. Term ............................................................. 5
4. Programming ...................................................... 5
(a) RSN Programming ............................................. 5
(b) Licensor's Programming Commitment ........................... 5
(c) Programming Notification .................................... 7
5. ACTV's Commitment ................................................ 8
6. Payment .......................................................... 10
(a) License Fees ................................................. 10
(b) Payment Dates ................................................ 10
7. Receipt and Transmission of Signal ............................... 11
8. Advertising ...................................................... 12
9. Termination by Licensor .......................................... 12
10. Termination by ACTV .............................................. 14
11. Non-Agency ....................................................... 16
12. Representations of Liberty ....................................... 16
13. Representations of Licensors ..................................... 17
14. Representations of ACTV .......................................... 18
15. Indemnification .................................................. 19
16. Records of ACTV .................................................. 20
17. Notices .......................................................... 22
18. Preemptions ...................................................... 23
19. Regulations ...................................................... 23
20. Reservations ..................................................... 24
21. Taxes ............................................................ 25
22. Assignment ....................................................... 25
23. Amendments and Waivers ........................................... 26
24. Logos ............................................................ 26
25. Force Majeure .................................................... 27
26. No Personal Liability ............................................ 27
27. Governing Law and Interpretation ................................. 28
28. Confidentiality .................................................. 29
29. League Mandated Provisions ....................................... 30
30. Entire Agreement ................................................. 30
EXHIBITS
Form of Enhancement License Agreement ............................... Exhibit A
Definitions ......................................................... Exhibit B
MASTER PROGRAMMING LICENSE AGREEMENT
THIS MASTER PROGRAMMING LICENSE AGREEMENT (this
"Master Agreement") is made effective as of , 1996 by and between Liberty/Fox
U.S. Sports, L.L.C., a limited liability company formed under the laws of the
State of Delaware, ("Liberty"), and ACTV, INC., a corporation formed under the
laws of the State of Delaware ("ACTV").
RECITALS
A. Liberty owns and/or has significant ownership interests in
several regional sports television networks (the "Affiliated RSNs") which
produce and/or distribute primarily sports-related television programs primarily
delivered to the viewing public by nonbroadcast video distributors;
B. ACTV is in the business of Enhancing television programming
through the use of patented programming technology by creating viewer-selectable
alternative video, audio and graphics streams which are integrated into existing
television programming and desires to obtain a limited non-exclusive license
from certain of Liberty's Affiliated RSNs to Enhance and Distribute certain of
the RSN Programming, all on the terms and conditions set forth hereinafter;
C. ACTV intends to request such licenses from certain of such
Affiliated RSNs in connection with its initial commercial launch, and the
parties wish to agree upon a framework for such initial licenses and for
additional licenses from other Affiliated RSNs commencing at such times as may
be agreed upon by the parties.
NOW, THEREFORE, in consideration of the premises, mutual
covenants and
agreements herein set forth, Liberty and ACTV hereby covenant and agree as
follows:
1. Selection of Affiliated RSNs.
The parties to this Master Agreement agree to consult
and confer from time to time regarding the selection of the Affiliated RSNs'
Basic Regional Services to serve as the basis for packages of Enhanced
Programming ("Enhanced Regional Packages") to be produced and distributed by
ACTV in accordance with this Master Agreement. At such time as ACTV determines
it would like to produce and distribute an Enhanced Regional Package based on an
Affiliated RSN's Basic Regional Service, it shall notify such Affiliated RSN
that it wishes to negotiate an Enhancement License pursuant to this Master
Agreement, and if ACTV and such Affiliated RSN are able to reach agreement as to
the Territory, License Fees, Programming Commitment, Enhancement Commitment and
License Term (all as hereinafter defined) and any other necessary terms of such
Enhancement License, then ACTV and such Affiliated RSN (hereinafter, the
"Licensor") shall execute an Enhancement License Agreement in substantially the
form attached hereto as Exhibit A, incorporating by reference the terms of the
Enhancement License specified in this Master Agreement and specifying the other
elements of such Enhancement License agreed upon by such parties.
2. Terms of Enhancement License.
Each Enhancement License between a Licensor and ACTV
shall grant to ACTV a limited, non-exclusive license to Enhance such of the
Licensor's RSN Programs as are permitted to be Enhanced under the applicable
agreements between such Licensor (or ACTV) and the appropriate team, league,
conference, association or other entity from which Licensor has obtained the
right to telecast the RSN Program in question (the "Rights Source") and to
distribute
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the Enhanced Regional Package which is based on such Licensor's Basic Regional
Service in accordance with and subject to the terms specified herein and in the
Enhancement License Agreement. By its execution of each Enhancement License
Agreement, ACTV agrees to use its best efforts to Distribute the Enhanced
Regional Package in question as widely as possible during the License Term of
the relevant Enhancement License and to offer to distribute the Enhanced
Regional Package to all of the Licensor's Basic Regional Service Distributors in
a nondiscriminatory manner. As used herein, the term "Enhance" shall mean
creating Enhanced Programming which is based on the Licensor's RSN Programming
and Enhanced Advertising through the use of ACTV's patented proprietary
programming technology by creating viewer-selectable alternative video, audio
and graphics streams which are integrated into the RSN Program being Enhanced.
The license granted to ACTV to Enhance and Distribute the Licensor's RSN
Programming shall be subject to an applicable limitations or prohibitions under
any Rights Restrictions and any reasonable restrictions requested by Licensor.
The Enhanced Regional Package must be distributed over a separate channel or
channels from the Basic Regional Service, and ACTV shall have no right to affect
or interfere with the Basic Regional Service or its delivery to the Licensor's
Basic Regional Service Customers (other than to offer to such Basic Regional
Service Customers the option of viewing the Enhanced version of an individual
RSN Program) in any manner whatsoever, with or without the concurrence of any
Basic Regional Service Distributor of the Licensor's Basic Regional Service.
Each Basic Regional Service Customer receiving the Enhanced Regional Package
must at all times be able to choose, as one of the alternative video streams
constituting the Enhanced Program, the original version of the RSN Program on
which such Enhanced Program is based. As used herein, the term "Distribute"
shall mean the granting of
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licenses to the Licensor's Basic Regional Service Distributors to exhibit and
Distribute the Enhanced Regional Package for viewing by Basic Regional Service
Customers of the Licensor within the Territory in accordance with the terms
specified in this Master Agreement and the Enhancement License Agreement. Any
Distribution shall be limited to the Licensor's Basic Regional Service
Distributors and shall be further limited to distribution via the same
television distribution facilities (but on a separate channel or channels) over
which each Basic Regional Service Distributor distributes such Licensor's Basic
Regional Service under authorization from the Licensor. All such Distribution
licenses by ACTV shall by their terms be limited to Distribution of the Enhanced
Regional Package and the individual Enhanced Programs within the same Territory
within which, during the same term during which, at the same time as (i.e.,
simultaneously), over the same distribution facilities over which and to the
same Basic Regional Service Customers to whom the Basic Regional Service
Distributor licensed by the Licensor distributes the corresponding Basic
Regional Service and corresponding individual RSN Programs under authority from
the Licensor. ACTV shall not Distribute or otherwise make available any RSN
Program or any Enhanced Program which is based on any RSN Program to any Basic
Regional Service Distributor or Basic Regional Service Customer or any other
party at any time when such Basic Regional Service Distributor, Basic Regional
Service Customer or other party is not authorized to receive or distribute, as
the case may be, such RSN Program. For purposes of this Master Agreement, the
"Basic Regional Services" of a Licensor shall mean, as to each portion of the
territory throughout which such Licensor makes available for distribution by
nonbroadcast programming distributors a required uniform programming lineup,
(collectively the "Territory"), that mix of programming made available to its
Basic Regional Service Distributors. The Licensor's
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"Basic Regional Service Customers" shall mean those viewers of the Basic
Regional Service who receive the Basic Regional Service under authority from the
Licensor.
3. Term.
The term of this Master Agreement (the "Term") shall
commence on the date of execution hereof and shall continue until June 30, 2003,
unless earlier terminated as set forth herein.
4. Programming.
(a) RSN Programming.
"RSN Program(s)" and "RSN Programming" shall
mean the television program(s) and programming provided to
Licensor's Basic Regional Service Distributors by Licensor as
a part of its Basic Regional for distribution by such Basic
Regional Service Distributors in the respective portions of
the Territory.
(b) Licensor's Programming Commitment.
Each Licensor and ACTV shall specify in the
respective Enhancement License Agreement the minimum required
programming (the Licensor's "Programming Commitment") which
such Licensor shall commit to make available as part of the
RSN Programming which may be Enhanced by ACTV during each
Year or other period of the License Term, in those areas
where the Enhancement and Distribution of such programming
is not restricted, preempted, prohibited or otherwise not
allowed under any applicable Rights Restrictions and the
adjustment to the License Fee
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if such Licensor fails to make available for Enhancement any
element or elements of its Programming Commitment. Unless
otherwise provided in the Enhancement License Agreement, any
such period for which the Programming Commitment for the
designated item or class of programming is specified and
shall be applied retroactively to the License Fees due for
each Year or other specified period, with any excess License
Fees paid by ACTV on account of such adjustment to be
refunded within 30 days after the end of such Year or other
period. A Licensor shall not be required to incur any rights
fees or other costs which are specifically required to
secure the right to authorize the Enhancement of any RSN
Programming. However, a Licensor and ACTV may agree that
such Licensor should incur such costs and be reimbursed out
of the Enhanced Advertising Revenue generated with respect
to the Enhanced Regional Package which is based on such
Licensor's Basic Regional Service in accordance with the
provisions of Section 8 of this Master Agreement.
Notwithstanding anything in this Master Agreement to the
contrary, Licensor's Programming Commitment shall be
adjusted appropriately in the case of any Year which is less
than twelve (12) calendar months. No Licensor shall have any
obligation to acquire the right to authorize the Enhancement
of any RSN Programming or the Distribution of any resulting
Enhanced
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Programming if ACTV does not agree to allow the Licensor to
be reimbursed for such costs out of the net incremental
revenues from Enhanced Advertising in accordance with the
provisions of Section 8 of this Master Agreement, in which
case there shall be no adjustment to the License Fees on
account of such Licensor's failure to meet its Programming
Commitment with respect to the affected RSN Programming. If
a Licensor determines that it does not wish to incur such
costs, it shall have no obligation to do so, but if the
affected RSN Programming was part of the Licensor's
Programming Commitment, ACTV shall be entitled to any
adjustment to the License Fees specified in the Enhancement
License Agreement for such Licensor's failure to meet its
Programming Commitment on account of the affected RSN
Programming not being available for Enhancement by ACTV for
inclusion in the Enhanced Regional Package.
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(c) Programming Notification.
Each Licensor shall use its best reasonable
efforts to provide ACTV with a schedule of each calendar
month's RSN Programming at least sixty (60) days prior to each
such calendar month, or as soon as reasonably practicable
after the Licensor's scheduling of each of the RSN Programs to
be included therein. Each Licensor shall use its best
reasonable efforts to notify ACTV of any changes, additions or
deletions in or to the schedule as promptly as practicable
(such notice to ACTV to be transmitted by telephone or
telecopy if transmitted subsequent to the 10th business day of
the calendar month preceding the respective RSN Program); and
a Licensor shall incur no additional liability or obligation
by reason of any such change, addition, deletion or failure to
notify ACTV thereof if such Licensor has used its best
reasonable efforts to so notify ACTV.
5. ACTV's Commitments.
(a) The option to view an Enhanced version of
any RSN Program which ACTV has Enhanced shall be presented to all Basic Regional
Service Customers who subscribe to receive the Enhanced Regional Package in
question by means of a special indicator which appears as an unobtrusive graphic
superimposed on the image of the Basic Regional Service as displayed on the
Basic Regional Service Customer's television screen. The option shall be
exercisable by the Basic Regional Service Customer by pressing a button on the
ACTV remote which will cause the
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viewer's receiver to shift automatically to the channel receiving the Enhanced
Regional Package. At the conclusion of any Enhanced Program which is based on
one of Licensor's RSN Programs, the viewer's television receiver shall be
automatically returned to the channel carrying the Licensor's Basic Regional
Service.
(b) ACTV (commencing promptly after the date
hereof) shall use its and shall require its distributors to use their best
reasonable efforts to publicize, promote and market the Enhanced Regional
Package to such distributor's subscribers and to the general public within the
Territory. ACTV shall not, without the Licensor's prior consent, authorize or
cause any RSN Programming or any portion thereof made available to it hereunder
or any Enhanced Programming which is based thereon to be taped, recorded,
duplicated, telecast, exhibited or otherwise distributed or used for any purpose
other than for the production of the Enhanced Programming and its Distribution
by ACTV in accordance with the relevant Enhancement License Agreement and this
Master Agreement except for up to three (3) minutes of any RSN Program utilized
by ACTV for the purpose of promoting the Enhanced Regional Package to the extent
not restricted under any applicable Rights Restrictions.
(c) ACTV hereby covenants and agrees that,
unless ACTV and Licensor agree otherwise in the Enhancement License Agreement,
ACTV will Enhance and include in the Enhanced Regional Package each of
Licensor's RSN Programs which is a professional event. ACTV and Licensor may
agree in the Enhancement License Agreement to specify additional RSN Programming
that ACTV will be required to Enhance and include in the Enhanced Regional
Package or to specify RSN Programs which are professional events that ACTV will
not be required to Enhance and include in the Enhanced Regional Package.
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(d) ACTV hereby covenants and warrants that it
shall not exhibit, distribute or Enhance for distribution anywhere within the
Territory any sport programming other than the Licensor's RSN Programming if
such programming either (i) involves a team based within, or event taking place
within, the Territory unless such programming is distributed by ACTV only to
persons who are authorized to receive such programming in an unenhanced form as
part of a nationally distributed broadcast, telecast or cablecast or (ii) is
based on programming distributed within any portion of the Territory other than
as part of a nationally distributed broadcast, telecast or cablecast.
6. Payment.
(a) License Fees.
As consideration for each Enhancement
License granted under an Enhancement License Agreement, ACTV shall pay the
Licensor for each month during the License Term, commencing with the month
during which the first Enhanced Program is Distributed by ACTV, the amount
specified in the Enhancement License Agreement (the "License Fee") based on the
Number of Subscribers for such month.
(b) Payment Dates.
Each payment required to be made by ACTV to
a Licensor for any month pursuant to Section 6(a) hereinabove shall be paid by
ACTV to such Licensor on or before the last day of the immediately following
month; except that in the event of termination of any Enhancement License
Agreement, payment shall be made on or before the last day of the first complete
calendar month occurring after the termination of the Enhancement License. ACTV
shall have no right to make any deduction from or offset against any amounts due
under this Master
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Agreement or any Enhancement License Agreement for any reason. In the event that
ACTV does not make any payment due under any Enhancement License Agreement
within fifteen (15) days following the due date of such payment, then ACTV shall
be liable to the appropriate Licensor for and pay interest charges on such
delinquent amount(s) at the rate of 1.5% per month compounded monthly or the
maximum rate of interest permitted by law, whichever is less, commencing with
the due date and ending upon payment of such delinquent amount and accrued
interest.
7. Receipt and Transmission of Signal.
ACTV shall arrange for the broadcast quality
transmission, at ACTV's cost, of each Licensor's Basic Regional Service by means
of a digital land line connection provided by a commercial carrier from such
Licensor's master control facilities (or such other location as may be specified
in the Enhancement License Agreement) to ACTV's designated production facility.
Each Licensor will cooperate in the installation of any such land line
connection and shall insure that the Basic Regional Service is delivered to the
appropriate connection throughout the License Term. ACTV, at its own expense,
shall pay for all incremental production costs as they relate to the Enhancement
of the RSN Programming in order to create the Enhanced Regional Package and the
creation of Enhanced Advertising, and ACTV shall cause the Basic Regional
Service to be received and the Enhanced Regional Package to be Distributed in
accordance with all applicable local, state and federal laws. Each Licensor and
ACTV shall each use their respective best reasonable efforts to maintain at all
times a level of signal transmission quality comparable to the current level of
quality of the Affiliated RSN's signal transmissions to their Basic Regional
Service Distributors.
8. Advertising.
With the written permission of the appropriate
Licensor and the affected
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advertiser, ACTV shall have the right, at its sole cost and expense, in any
Enhanced Program, to Enhance any commercial advertisement (or substitute an
alternative Enhanced Advertisement in the place of any commercial advertisement)
included in the RSN Program on which such Enhanced Program was based. ACTV shall
pay to each Licensor out of the gross revenue net of agency commissions derived
from such Enhancement (the "Enhanced Advertising Revenue") any amounts which
ACTV and such Licensor have agreed should be paid by such Licensor to secure the
right to Enhance any of its RSN Programming. ACTV also shall pay to such
Licensor one-half (1/2) and shall retain for its own account the other one-half
(1/2) of the Enhanced Advertising Revenue generated with respect to the Enhanced
Regional Package which is based on such Licensor's Basic Regional Service (net
of any amounts paid to such Licensor pursuant to the immediately preceding
sentence to reimburse it for agreed upon costs of securing the right to Enhance
any of its RSN Programming). Any such Enhancement or substitute Enhanced
Advertising shall be limited to running entirely within the same time slot as
the original unenhanced version of such advertisement. ACTV shall work with each
Licensor's advertising sales department to jointly market Enhanced
Advertisements to such Licensor's advertising clients. ACTV and each Licensor
shall work together in order to maximize the revenue potential of Enhanced
Advertising.
9. Termination by Licensor.
The rights (including the Enhancement License)
granted by a Licensor under an Enhancement License Agreement and this Master
Agreement may, at such Licensor's option, upon written notice to ACTV, be
terminated by such Licensor at any time after any of the following occurrences:
(a) An assignment by ACTV for the benefit of
creditors, a filing by
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ACTV of a voluntary petition in bankruptcy, a filing of a petition
against or an adjudication of ACTV under any bankruptcy or insolvency
law not discharged within 45 days, or an appointment of a receiver for
all or any portion of ACTV's property not discharged within 30 days;
(b) Any breach by ACTV of any payment or other
monetary covenant or obligation hereunder, which breach is not cured
within 15 days after ACTV's receipt of written notice thereof from the
Licensor;
(c) Any intentional breach by ACTV of any
covenant or obligation hereunder to refrain from exhibiting or
distributing any specified programming or advertising in any particular
locale; or
(d) Any breach by ACTV of any material
representation, warranty, covenant or obligation hereunder or under the
Enhancement License Agreement with such Licensor (other than any
covenant or obligation referred to in Sections 9(b) or 9(c) which is
not cured within 30 days after written notice thereof to ACTV; provided
that if ACTV is unable to cure such breach because of the nature of
such breach, the Licensor may not terminate such Enhancement License
Agreement if (i) within 30 days after such notice to ACTV, ACTV has
taken reasonable steps to prevent a recurrence of such breach and such
breach does not give rise to continuing damages to such Licensor, or
(ii) such breach is caused by any reason beyond ACTV's reasonable
control.
Nothing in this Section 9 shall be deemed to limit
any cause of action or recourse (except as herein otherwise expressly provided
with respect to the termination hereof) which Liberty or any Licensor may have
against ACTV, whether in common law, in equity, by
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statute or otherwise, for any breach by ACTV of any warranty, covenant or
obligation of ACTV hereunder or under any Enhancement License Agreement or any
misrepresentation by ACTV hereunder or under any Enhancement License Agreement.
10. Termination by ACTV.
Any Enhancement License Agreement may, at ACTV's
option, upon written notice to the Licensor, be terminated by ACTV at any time
after any one of the following occurrences:
(a) An assignment by such Licensor for the benefit of
creditors, a filing by such Licensor of a voluntary petition in
bankruptcy, a filing of a petition against or an adjudication of such
Licensor under any bankruptcy or insolvency law not discharged within
45 days, or an appointment of a receiver for all or any portion of such
Licensor's property not discharged within 30 days; or
(b) Any breach by such Licensor of any material
representation, warranty, covenant or obligation which is not cured
within 30 days after written notice thereof to such Licensor; provided
that if such Licensor is unable to cure such breach because of the
nature of such breach, ACTV may not terminate such Enhancement License
Agreement if: (i) within 30 days after such notice to such Licensor,
such Licensor has taken reasonable steps to prevent a recurrence of
such breach and such breach does not give rise to continuing damages
to ACTV, or (ii) such breach is caused by any reason beyond such
Licensor's reasonable control.
Nothing in this Section 10 shall be deemed to limit
any cause of action or recourse (except as herein otherwise expressly provided
with respect to the termination hereof)
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which ACTV may have against Liberty or any Licensor, whether in common law, in
equity, by statute or otherwise, for any breach of any warranty, covenant or
obligation of Liberty hereunder or of a Licensor under an Enhancement License
Agreement or hereunder or any misrepresentation by Liberty hereunder or by a
Licensor under an Enhancement License Agreement, provided that neither Liberty
nor any Licensor shall have any liability for any consequential damages, Liberty
shall have no liability for any breach or misrepresentation by any Licensor and
no Licensor shall have any liability for any breach or misrepresentation by
Liberty or any other Licensor.
Notwithstanding the above, the above right of
termination and the adjustment to the License Fees specified in the applicable
Enhancement License Agreement shall be ACTV's sole rights of recourse against a
Licensor if, during any Year or other specified period of the applicable License
Term such Licensor fails to provide the RSN Programming required pursuant to
such Licensor's Programming Commitment, provided such Licensor has made
available to ACTV for Enhancement and Distribution all of such Licensor's RSN
Programming, limited only by applicable Rights Restrictions. Neither Liberty nor
any Licensor shall have any further obligation or liability to ACTV as a result
of such failure or termination. In the event of any such failure, then at any
time during the 60-day period immediately following such Year or other specified
period for which such failure shall have occurred, ACTV may terminate such
Enhancement License Agreement upon notice to such Licensor, and such Enhancement
License Agreement shall terminate 60 days after the date of such notice.
11. Non-Agency.
No general partner, limited partner, shareholder,
member, director, officer, employee, agent, servant or independent contractor of
any party to this Master Agreement or any
15
Enhancement License or its subsidiaries or affiliates shall at any time be
deemed by reason of anything contained in this Master Agreement or any
Enhancement License Agreement (or the performance thereof) to be an employee,
servant or agent of any other such party for any purpose whatsoever, and such
party shall use its best reasonable efforts to prevent any such
misrepresentation. This Master Agreement and the Enhancement License Agreements
are not intended, nor shall they be deemed, to create a partnership or joint
venture by or between or among ACTV and Liberty and/or any Licensor.
12. Representations of Liberty.
Liberty represents and warrants as follows:
(a) It is a limited liability company formed under
the laws of the State of Delaware and is empowered to grant the rights
and privileges granted hereunder, and this Master Agreement has been
duly executed by it and constitutes a valid and enforceable obligation
of it; and
(b) It has not made nor will it make any
contractual or other commitments which will or may prevent, impair or
hinder its full performance of this Master Agreement.
13. Representations of Licensors.
By its execution of an Enhancement License Agreement
pursuant to this Master Agreement, each Licensor shall be deemed to have
represented and warranted as follows:
(a) It is a corporation or other entity (as indicated
on the Enhancement License Agreement) duly formed under the laws of the
state of its formation indicated on the Enhancement License Agreement
and is empowered to grant the rights, Enhancement
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License and privileges granted by it under the Enhancement License
Agreement and this Master Agreement, and the Enhancement License
Agreement has been duly executed by it and constitutes a valid and
enforceable obligation of it;
(b) Except for applicable Rights Restrictions and, to
the extent disclosed to ACTV prior to the execution of the Enhancement
License Agreement, other preexisting contractual restrictions, such
Licensor has not made nor will it make any contractual or other
commitments which will or may prevent, impair or hinder its full
performance of its obligations under the Enhancement License Agreement
and this Master Agreement.
(c) The RSN Programming furnished to ACTV by it under
the Enhancement License will not violate the right of privacy or
publicity of or constitute a libel or slander against or violate or
infringe upon any trademark,
trade name, patent, copyright or any literary, artistic, dramatic,
music or other right of any person, corporation, partnership, trust,
association or other entity (each individually a "Person").
By its execution of an Enhancement License Agreement
pursuant to this Master Agreement, each Licensor shall be deemed to have further
represented and warranted that each of the foregoing representations and
warranties set forth in this Section 13 shall be true and correct in all
respects on and as of each and every date during and throughout the License Term
as though made on and as of such date(s).
14. Representations of ACTV.
ACTV represents and warrants that:
(a) It is a corporation duly incorporated, validly
existing and in good
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standing in the State of Delaware; it is empowered to enter into and
perform this Master Agreement and any Enhancement License Agreements
it may enter into; it will not provide and will not authorize any other
person, entity or organization to provide the Enhanced Regional Package
or any Enhanced Programming to any Person at any point outside the
Territory or to anyone other than a Basic Regional Service Customer or
other than in accordance with the Enhancement License without written
authorization by Licensor; and this Master Agreement has been, and any
Enhancement License Agreements it may enter into will have been, duly
executed by ACTV, and this Master Agreement constitutes (and any such
Enhancement License Agreement will constitute) a valid and enforceable
obligation of it;
(b) It has not made nor will it make any
contractual or other commitment which will or may prevent, impair or
hinder its full performance of this Master Agreement or any Enhancement
License Agreement it may enter into;
(c) It will not provide the Enhanced Regional Package
in any fashion to any Person without a charge or fee therefor to such
Person, except to those Persons to whom it is standard in the industry
to provide such service without a charge or fee (i.e., ACTV employees),
or to those Persons that ACTV deems appropriate in order to promote the
Enhanced Regional Package.
(d) All Enhanced Programming and Enhanced
Advertising Distributed by it will be Distributed in accordance with
the terms of this Master Agreement and the Enhancement License;
(e) Any programming (including, without limitation,
any Enhanced
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Advertising) provided and/or inserted in any Enhanced Regional
Package by ACTV or any of its sublicensees, the Enhancement of
any RSN Programming and the Distribution of each Enhanced Regional
Package will not violate the right of privacy or publicity of or
constitute a libel or slander against or violate or infringe upon any
trademark, trade name, patent, copyright or any literary, artistic,
dramatic, music or other right of any Person (including, without
limitation, any Rights Restriction).
ACTV further represents and warrants that each of the
foregoing representations and warranties set forth in this Section 14 shall be
true and correct in all respects on and as of each and every date during and
throughout the Term of this Master Agreement and any License Term as though made
on and as of such date(s).
15. Indemnification.
Each Licensor shall indemnify ACTV against and hold
it harmless from any claim, liability, loss or damage caused by or arising out
of the exhibition in accordance with the terms of this Master Agreement and the
applicable Enhancement License Agreement of any RSN Programming furnished to
ACTV by such Licensor pursuant to the applicable Enhancement License Agreement
and this Master Agreement which claim, liability, loss or damage is based on the
content of such RSN Programming as supplied by such Licensor. ACTV shall
indemnify Liberty and each Licensor against and hold them harmless from any
claim, liability, loss or damage caused by or arising out of the Enhancement of
any RSN Programming or any Distribution or other distribution or exhibition of
an Enhanced Regional Package or any programming (including, without limitation,
any Enhanced Advertising) provided or inserted in the Enhanced Regional Package
by ACTV or any of its sublicensees. Termination of this Master Agreement or any
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Enhancement License shall not affect any continuing obligation of any of such
parties as an indemnitor hereunder. Upon written request of an indemnitee, the
indemnitor shall assume the defense of any claim, demand or action against such
indemnitee and will, upon request by the indemnitee, allow the indemnitee to
participate in the defense thereof Settlement by the indemnitee without the
indemnitor's prior written consent shall release the indemnitor from the
indemnity as to the claim, demand or action so settled.
16. Records of ACTV.
ACTV shall furnish to each Licensor, together with
its monthly payment to such Licensor, a statement certified by its Chief
Executive Officer or Chief Financial Officer which provides the calculation
which determined the payment to be made by ACTV to such Licensor for said month,
in addition to the number of ACTV's Subscribers to the Enhanced Regional Package
in question and all other parameters upon which such calculation was based and a
separate certified statement that all RSN Programming, including all
advertising, on which any Enhanced Programming included in the Enhanced Regional
Package by ACTV was based has been Distributed by ACTV in accordance with the
terms of the applicable Enhancement License Agreement and this Master Agreement.
ACTV shall keep, maintain and preserve complete and accurate
records and accounts, including all invoices, correspondence, ledgers, and
financial and other records pertaining to each Enhancement License Agreement
including, for each month, the "Number of Subscribers" as such term is defined
in Exhibit B. ACTV agrees that such records and accounts shall be available for
inspection, audit and copying at any time or times during and for a period of
one year after the end of the calendar year during which such record or account
was made, during reasonable business
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hours, by Licensor or its representatives.
Each Licensor shall maintain and preserve the confidentiality
of all of ACTV's records and accounts (and any and all copies thereof made by
such Licensor or its representatives) and shall use such records and accounts
(and copies thereof solely for purposes of monitoring and enforcing ACTV's
performance of the applicable Enhancement License Agreement; provided that
nothing herein shall be deemed to waive or restrict any right which any Licensor
may at any time have to use any of such records, accounts and/or copies in any
legal proceeding relating to the applicable Enhancement License Agreement. The
exercise by a Licensor, in whole or in part, at any time or times of the right
to audit and copy records and accounts or of any right granted herein or in any
applicable Enhancement License Agreement, or the acceptance by a Licensor of any
statement or payment tendered by or on behalf of ACTV, shall be without
prejudice to any rights or remedies of such Licensor and shall not preclude such
Licensor from thereafter disputing the accuracy or acceptability of any such
statement or payment.
17. Notices.
All notices, requests, demands, directions and other
communications provided for hereunder or under any applicable Enhancement
License Agreement shall (except as otherwise provided in Section 4(c)
hereinabove) be in writing and shall be deemed duly given on the earlier of
actual receipt by the parties specified below or 5 days after being mailed (by
registered or certified mail, postage prepaid) addressed as specified in the
applicable Enhancement License Agreement, with copies as follows:
If to Licensor: Xx. Xxxxxx X. Xxxxxxxx
Fox Sports Net
00 Xxxx Xxxxxx, Xxxxx 000
00
Xxxxxx, Xxxxxxxx 00000
and Xxxxxx X. Xxxxxxxxxxx, 000, Xxx.
Fox Sports West
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
If to ACTV: President
ACTV, Inc.
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 this Section
17.
18. Preemptions.
ACTV expressly acknowledges and agrees that ACTV will
not be permitted to Enhance and Distribute and no Licensor shall be obligated to
provide to ACTV for Enhancement or inclusion in an Enhanced Regional Package any
RSN Program of which Licensor's telecast, ACTV's Enhancement or ACTV's
Distribution of an Enhanced version is otherwise restricted, preempted,
prohibited or otherwise not allowed in any part of the relevant Territory
pursuant to the applicable rules or regulations of and/or applicable agreements
with any Rights Source ("Rights Restrictions"), and the provision, Enhancement,
Distribution and exhibition of the Enhanced Programming and the Enhanced
Regional Packages shall be subject to and limited by all such Rights
Restrictions, provided that, in the case of any Rights Restriction contained in
an agreement to which a Licensor is a party, such agreement shall have been
entered into by such Licensor in good faith. In the case of any such
restriction, preemption or prohibition, ACTV's Enhancement Commitment shall be
inapplicable to any RSN Programs which are so restricted, preempted or
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prohibited.
19. Regulations.
The obligations of ACTV and each Licensor under the
Enhancement License Agreements and this Master Agreement are subject to all
applicable Federal, State and local laws, rules and regulations (including,
without limitations the Communications Act of 1934, as amended, and the rules
and regulations of the Federal Communications Commission, and/or of any other
governmental body or agency).
20. Reservations.
Except as expressly provided herein, all rights in
and to the Basic Regional Services and the RSN Programming and its content are
reserved to Liberty and/or the respective Licensors and may be exercised and
exploited by Liberty and/or such Licensors in all respects concurrently herewith
and during the Term hereof and all License Terms freely and without limitation
or restriction, both within and without the Territory. ACTV acknowledges that
ACTV's use of the Licensors' RSN Programming and trademarks will reflect on the
Licensors and Liberty and that therefore Liberty and the Licensors retain the
right to approve and control the manner in which their respective RSN
Programming and trademarks are used in the processes of Enhancement and
Distribution. Without in any way limiting the foregoing, ACTV acknowledges that
the names, trade names and trademarks "Fox", "Fox Sports" and any other names,
trade names and/or trademarks used by Liberty and/or any Licensor from time to
time in connection therewith, are, as between ACTV on the one hand and Liberty
and the Licensors on the other, the exclusive property of Liberty and/or the
Licensors and that ACTV has not and will not acquire any proprietary rights
therein by reason of this Master Agreement, any Enhancement License
23
Agreement or otherwise. ACTV will not use "Fox", "Fox Sports" or any other name,
trade name or trademark used by Liberty or any Licensor from time to time in any
corporate name or trade name of ACTV, or otherwise use or assert a claim for any
interest therein, except that ACTV may utilize or refer to the aforementioned
names and marks of Liberty and the Licensors in accordance with Section 24 of
this Master Agreement and such additional instructions as may be issued by
Liberty or the appropriate Licensor to ACTV from time to time. Similarly,
Liberty acknowledges and each Licensor shall be deemed to have acknowledged that
the name, trade name and trademark "ACTV" and any other names, trade names
and/or trademarks used by ACTV from time to time in connection therewith, are
the exclusive property of ACTV and that Liberty and the Licensors have not and
will not acquire any proprietary rights therein by reason of this Master
Agreement, any Enhancement License Agreement or otherwise. Neither Liberty nor
any of the Licensors will use "ACTV" or any other name, trade name or trademark
used by ACTV from time to time in any corporate name or trade name of Liberty or
any Licensor, or otherwise use or assert a claim for any interest therein,
except that Liberty and the Licensors may utilize or refer to the aforementioned
names and marks of ACTV in accordance with such instructions as may be issued by
ACTV to Liberty and the Licensors from time to time.
21. Taxes.
ACTV shall save and hold Liberty and each Licensor
forever harmless from all taxes, franchise fees and any other charges now or
hereafter imposed upon ACTV or based upon the Enhancement, rental, license,
Distribution, exhibition, possession or use by ACTV of the RSN Programming, any
Basic Regional Service, any Enhanced Programming or any Enhanced Regional
Package or any part thereof.
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22. Assignment.
All of the terms and provisions of this Master
Agreement, the Enhancement Licenses and the Enhancement License Agreements shall
be binding upon and inure to the benefit of the parties thereto and, subject to
the following sentence, their respective transferees, successors and assigns.
This Master Agreement, the Enhancement Licenses and the Enhancement License
Agreements may not be assigned by ACTV to any party other than a majority-owned
subsidiary of ACTV without the written consent of Liberty and any affected
Licensors.
23. Amendments and Waivers.
Neither this Master Agreement nor any Enhancement
License Agreement may be amended or modified in any respect except by a written
instrument executed by the parties hereto or thereto. No officer, employee or
representative of Liberty, any Licensor or ACTV has any authority to make any
representation or promise not contained in this Master Agreement, and neither
Liberty nor ACTV has executed this Master Agreement, and neither ACTV nor any
Licensor shall be deemed to waive entered into any Enhancement License Agreement
in reliance upon any such representation or promise. No failure on the part of
Liberty, any Licensor or ACTV to exercise, no delay in exercising, and no course
of dealing with respect to any right or remedy hereunder or under any
Enhancement License Agreement shall operate as a waiver thereof nor shall any
single or partial exercise of any such right or remedy (including, without
limitation, any termination of this Master Agreement or any Enhancement License)
preclude any other or further exercise thereof or the exercise of any other
right or remedy (the remedies provided herein being cumulative and not exclusive
of any remedies provided by law).
24. Logos.
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Subject to Liberty's and the Licensors' rights to
control the manner in which their logos and trademarks are used and the quality
of the reproductions thereof used by ACTV, ACTV shall publicize, promote,
prominently display and exhibit the logos and trademarks of each Licensor's
Basic Regional Service in ACTV's promotional materials and advertising where
appropriate, as determined by ACTV.
25. Force Majuere.
Neither Liberty, any Licensor nor ACTV shall have any
claims against any of the others for failure to provide the Licensor's Basic
Regional Service or any RSN Programming or to Distribute the Enhanced Regional
Package or any Enhanced Programming, as the case may be, if such failure is due
to any act of God, accident, fire, lock-out, strike or other labor dispute, riot
or civil commotion, failure of technical facilities, act of public enemy,
enactment, rule, order or act of governmental authority, failure of electrical
power or other cause beyond ACTV's or the relevant Licensor's control. The
obligation of ACTV to make payment under any Enhancement License Agreement or
any section of this Master Agreement shall not be reduced except as otherwise
provided in the Enhancement License Agreement. In the event of any such failure
of a Licensor to furnish the Basic Regional Service signal or in the event of
any technical failure beyond ACTV's control, neither Liberty, such Licensor nor
ACTV shall incur any obligation or liability under this Master Agreement or any
Enhancement License Agreement by reason of such event. The affected party shall
notify the other party, within two weeks of said suspension, of its intentions
with respect to resuming performance, and the other party may tern-terminate
this Master Agreement if performance is not resumed within 90 days following
said failure by notice within 15 days following such 90- day period.
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26. No Personal Liability.
Notwithstanding anything contained in this Master
Agreement or any Enhancement License Agreement to the contrary, it is expressly
understood and agreed by the parties to this Master Agreement and shall be
deemed to have been agreed by each Licensor that each and every representation,
undertaking and agreement made in this Master Agreement or any Enhancement
License Agreement on the part of any party to any of such agreements was not
made nor intended to be made as a personal representation, undertaking or
agreement on the part of any incorporator, stockholder, member, director,
officer, employee and/or partner, past, present or future, of any of such
parties, and no personal liability is assumed by, nor shall any recourse at any
time be asserted or enforced against, any such incorporator, stockholder,
member, director, officer, employee and/or partner, past, present or future, of
any of such parties, all of which recourse, whether in common law, in equity, by
statute or otherwise, is hereby forever waived and released.
27. Governing Law and Interpretation.
THIS MASTER AGREEMENT AND EACH ENHANCEMENT LICENSE
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PROVISIONS
THEREOF. Unless otherwise specified, all references in this Master Agreement to
an "Exhibit" shall be interpreted as a reference to the specified Exhibit
attached to this Master Agreement, all of which are hereby incorporated herein
by reference. All capitalized terms used in this Master Agreement which are not
otherwise defined in this Master Agreement shall have the meanings assigned to
them in Exhibit B attached to this Master Agreement unless another meaning is
clearly indicated by the
27
context. The section headings used herein and in any Enhancement License
Agreement have been inserted for convenience of reference only and shall not be
considered in interpreting either of such agreements. Whenever required by the
context hereof, the singular shall include the plural and vice versa, and any
reference to any particular gender shall include such others as may be
appropriate. Any provision of this Master Agreement or any Enhancement License
Agreement which shall be invalid or unenforceable in any jurisdiction shall be
severable herefrom or therefrom as to such jurisdiction and shall not affect the
validity or enforceability of any other provision hereof or thereof in such
jurisdiction or the validity and enforceability of such provision in any other
jurisdiction.
28. Confidentially.
ACTV agrees not to disclose to any third party (other
than its employees and professional advisors in their capacities as such), any
information with respect to the terms and provisions of this Master Agreement or
any Enhancement License Agreement, except: (a) to the extent necessary to comply
with law or the valid order of a court of competent jurisdiction, in which event
ACTV shall so notify Liberty and the appropriate Licensor as promptly as
practicable (and, if possible, prior to making such disclosure) and shall seek
confidential treatment of such information; (b) as part of its normal reporting
or review procedure to its parent company, its auditors and its attorneys
provided, however, that such parent company, auditors and attorneys agree to be
bound by the provisions of this Section 28; (c) in order to perform its
obligations or enforce its rights under this Master Agreement or such
Enhancement License Agreement; and (d) with the prior written consent of Liberty
and any affected Licensor, which consent will not be unreasonably withheld.
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29. League Mandated Provisions.
The following provision shall be deemed incorporated
in each of the Enhancement License Agreements:
The copyright in and to any National Basketball Association
("NBA") game telecast authorized by this contract belongs
exclusively to the NBA and no use of any portion of any game
telecast may be made without the express authorization of the
NBA. This contract is subject to (i) the Constitution, By-Laws
and all other rules and regulations of the NBA as they
presently exist and as they may from time to time be amended,
and (ii) the terms of any existing or future contracts entered
into by the NBA, the NBA Market Extension Partnership, or NBA
Properties, Inc. for the telecast (by any mode) of basketball
games.
30. Entire Agreement.
This Master Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings relating to the
subject matter hereof
IN WITNESS WHEREOF, Licensor and ACTV have caused this Master
Agreement to be duly executed as of the date first above written.
ACTV, INC. LIBERTY/FOX U.S. SPORTS, L.L.C.
By: _________________________ By: __________________________
Xxxxx Xxxxx Executive Vice President
President
Date: Date:
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