EXHIBIT 10.14
AMENDED AND RESTATED
PROGRAM LICENSE AGREEMENT
DATED AS OF JANUARY 1, 2001
This Program License Agreement shall serve to amend and restate that
certain Program Agreement dated as of July 1, 1999 by and between Hallmark
Entertainment Distribution LLC ("Distribution") and Crown Media International,
Inc. ("Crown Media") in connection with Crown Media's acquiring from
Distribution certain exhibition rights to various Distribution product as
follows:
1. Pictures. Product shall consist of all television motion pictures and
mini-series as defined herein (each a "Picture," collectively "Pictures")
controlled by Distribution during the Term. A motion picture shall be product
with a two-hour commercial broadcast time in a U.S. time slot. A mini-series
shall be product with longer than a two-hour commercial broadcast time in a U.S.
time slot. With respect to each Crown Media territory, a Picture will be deemed
to be either: (a) a "Library Picture" if it completed or will complete principal
photography any time prior to the launch in such Crown Media territory (as
defined in Section 3(a) hereof) of the Channel (as defined in Section 3(a)
hereof) or (b) a "New Picture" if it completed or will complete principal
photography after the launch in such Crown Media territory (as defined in
Section 3(a) hereof) of the Channel (as defined in Section 3(a) hereof) and
before expiration of the Term as defined below.
2. Term. The Initial Term shall commence as of the date set forth above
and expire five years thereafter, subject to the renewal and price adjustment
set forth in Section 12 hereof.
3. Licensed Rights.
(a) Crown Media agrees to license from Distribution and Distribution
agrees to license to Crown Media all Library Pictures and all New
Pictures for telecast on the "Hallmark Entertainment Network" a.k.a.
the "Hallmark Channel" pay television service (the "Channel")
(including cable and satellite) on a territory-by-territory basis
commencing upon the later of (x) the date the Picture is available
in the relevant Crown Media territory as set forth on Schedule A
which has been previously provided to Crown Media (the "Availability
Date") and (y) the date Crown Media initially telecasts the Channel
in such territory (the "launch"). Crown Media shall also have the
right to exhibit via the Internet, provided that such exhibition is
within a Crown Media Window, is only within the relevant Crown Media
territory and does not conflict with any Prior Agreement. A "Prior
Agreement" shall be any agreement that Distribution has entered into
(x) prior to the date of this Agreement or (y) prior to Crown Media
written notification to Distribution pursuant to Section 4 with
respect to the relevant territory (but in any event, not more than
12 months prior to the Launch Date as defined in Section 4). The
relevant terms and restrictions of Prior Agreements shall be made
available to Crown Media upon request. Except in Germany, Italy and
Spain and subject to
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the terms and conditions of those Prior Agreements set forth on
Schedule B hereto, Distribution shall not renew or extend the term
of any Prior Agreement. All rights not expressly granted herein, are
reserved by Distribution.
(b) Crown Media shall not be obligated to license more than a total
of 50 New Pictures per year for telecast on the Channel and shall
not be obligated to license any Picture that conflicts with its
Broadcast Standards and Practices or with the terms or conditions of
that certain License Agreement dated as of December 1, 2000 by and
between Crown Media and Hallmark Cards, Incorporated as amended from
time to time. In addition, Crown Media shall only be obligated
hereunder to license New Pictures which have been produced,
co-produced or financed in whole or in part by Hallmark
Entertainment, Inc. or its affiliated companies. Crown Media may,
but shall not be obligated to license other New Pictures or Library
Pictures for which Distribution acquires rights after January 1,
2001.
(c) Provided there is no conflict with agreements entered into by
Distribution prior to the date set forth above, subject to 8(d)
below for the term of this Agreement, Distribution agrees to license
to Crown Media the exclusive world-wide rights to telecast or
distribute the Library Pictures and New Pictures by means of
Interactive Digital Video Services ("Interactive Rights").
Interactive Digital Video Services mean television services and
distribution systems incorporating fiber optic, cable, satellite or
similar transmission equipment and storage and play-back devices
such as video servers and set-top boxes to provide home users with
on-demand access via television to both linear programming and
interactive multimedia digital programming. Nothing in this
provision shall prohibit Distribution from licensing rights to third
parties for video on demand, pay per view and similar services or
from licensing the distribution of digital services that are not
interactive.
4. Availability and Delivery.
(a) Crown Media shall use its best efforts to give Distribution
written notice of its intent to launch the Hallmark Channel in a
given territory and its expected launch date ("Launch Date") at
least six months prior to such launch. After receipt of such written
notice, Distribution shall not enter into any distribution agreement
which conflicts with Crown Media's rights in the relevant territory.
By the later of (x) 14 business days after receipt of such written
notice and (y) six months prior to the scheduled launch,
Distribution will provide to Crown Media Availability Dates of
Pictures for the launch. Schedule A shall be amended from time to
time to reflect Availability Dates for additional New Pictures and
new Crown Media territories by way of an Availability Letter from
Distribution to Crown Media's Vice President of Programming and Vice
President of Finance or their designees. Distribution shall also
provide an updated Schedule A at least once each quarter or upon the
request of Crown Media.
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(b) Distribution shall use best efforts to provide notice to Crown
Media at least 180 days prior to the Availability Date of any
Picture and to deliver the materials for such Picture to Crown Media
at least 90 days prior to the Availability Date. In the event that
Distribution fails to provide notice to Crown Media at least 90 days
prior to the Availability Date of any Picture or fails to deliver
the materials for such Picture to Crown Media at least 30 days prior
to the Availability Date, then Crown Media shall be entitled to an
Additional Period (as defined herein) at the end of that Picture's
window; provided, however, that no Additional Periods shall be
available for windows granted by Nine Network or Beta-Taurus and
such windows shall be pro-rated to reflect the amount of time that
Crown Media was able to telecast that particular Picture. The
Additional Period shall be equal to the greater of (x) ninety days
minus the number of days prior to the Availability Date that notice
was actually given regarding the Availability Date and (y) thirty
days minus the number of days prior to the Availability Date that
delivery of the materials was actually made; provided, however, that
in no event shall the Additional Period exceed the amount of time
that Crown Media was actually delayed in telecasting that particular
Picture.
(c) In the event that Crown Media fails to launch in a given
territory, Crown Media shall be liable only for the License Fees for
the First Window of each New Picture that Distribution has made
available and that Distribution is not able to resell for that same
time period, and Crown Media shall not be liable for the Licensee
Fees for any Library Pictures for a territory where Crown Media
fails to launch. In the event that Crown Media delays a launch in a
given territory for longer than six months after the Launch Date,
its First Window shall begin six months after the Launch Date.
5. Licensed Exhibitions. Crown Media will license each Picture for a
minimum of three windows in each Crown Media territory as set forth below and
such license shall be exclusive as to all forms of television for a period of 18
months, except for the Exceptions identified in Section 8(a) for which the
Windows shall be 12 months; provided, however, that such license and exclusivity
shall be subject to (x) the terms and conditions of Prior Agreements, and (y)
the restrictions and exceptions for those feeds servicing Germany, Italy and
Spain. Crown Media shall be entitled to its customary number of telecasts during
each window.
(a) The First Window shall commence upon the Availability Date and
shall expire 18 months thereafter (or 12 months for the Exceptions).
Distribution shall have the right to license such Picture to a third
party provided that such third party license is effective no sooner
than 30 days after expiration of the First Window and expires within
such length of time as is customary in such media and territory. The
day after the date of such expiration shall be the "Second
Availability Date." If Distribution does not enter into such third
party license agreement, then the Second Availability Date shall be
three years after the expiration of the First Window, unless
Distribution, at its sole election, stipulates an earlier date,
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provided that in no event shall the Second Availability Date be
earlier than one year after expiration of the First Window.
(b) The Second Window shall commence upon the Second Availability
Date for the relevant Crown Media territory and shall expire 18
months thereafter (or 12 months for the Exceptions). Distribution
shall have the right to license such Picture to a third party
thereafter, provided that such third party license is effective
after expiration of the Second Window and expires within such length
of time as is customary in such media and territory. The day after
the date of such expiration shall be the "Third Availability Date."
If Distribution does not enter into such third party license
agreement, then the Third Availability Date shall be three years
after the expiration of the Second Window, unless Distribution, at
its sole election stipulates an earlier date, provided that in no
event shall the Third Availability Date be earlier than one year
after the expiration of the Second Window.
(c) The Third Window shall commence upon the Third Availability Date
for the relevant Crown Media territory and shall expire 18 months
thereafter (or 12 months for the Exceptions).
(d) Any subsequent windows pursuant to Section 7(c) shall commence
upon the Availability Date provided by Distribution for the relevant
Crown Media territory and shall expire 18 months thereafter (or 12
months for the Exceptions).
(e) The notice periods, delivery of materials and Additional Period
provisions of Section 4(b) shall also apply to the Second
Availability Date, Third Availability Date and any subsequent
Availability Date for each Picture.
6. New Pictures.
(a) Subject to the terms and conditions of Prior Agreements and
subject to subsections (b) and (c) below, all New Pictures will be
premieres (i.e. there will not be any prior exhibition in the
relevant territory except for home video) for the first Crown Media
Window in each Crown Media territory except in Germany, Italy and,
Spain. In Germany, Italy and Spain, except for mini-series, a
minimum of 50% of all New Pictures will be premieres for the first
Crown Media Window. Mini-series in Germany, Italy and Spain will be
premieres at the discretion of Distribution.
(b) In the event a New Picture is a motion picture with production
costs in excess of $10 million or a mini-series with production
costs in excess of $30 million (not to exceed three mini-series in
any given year), Distribution agrees to negotiate in good faith with
Crown Media with respect to Crown Media acquiring such Picture as a
premiere on a territory-by-territory basis. In the event that
Distribution and Crown Media are unable to agree on the License Fee
for such premiere, Distribution shall have the right to accept any
offer from a third party
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licensee. In the event that Distribution and Crown Media are unable
to agree on the License Fee for such premiere of a mini-series, then
Distribution shall have the right to accept any offer from a third
party licensee that is not less than 110% of the amount offered by
Crown Media. If Distribution does not accept such an offer from a
third party licensee, Distribution shall give notice to Crown Media
regarding such Picture's Availability Date in accordance with
Section 4(b).
(c) Distribution shall have the right to withhold on a
territory-by-territory basis, a Picture which is to be distributed
as a theatrical release for the term of the theatrical distribution
agreement.
7. Territory and Feeds. Territory with respect to the Hallmark Channel
shall be each country in which the Channel is launched (only in the dominant
native language of such country) and may be worldwide, excluding the United
States and Canada. The territory with respect to Crown Media's exercise of
Interactive Rights shall be worldwide. In the event that Crown Media elects to
restructure its territorial feed resulting in the addition or deletion of
individual countries, the conditions of this Section shall apply.
(a) To the extent that any country is deleted from an existing
feed, Crown Media shall remain obligated to pay the License
Fees for the then current Window or the currently scheduled
Window in such country regardless of whether Crown Media
exploits its rights to such Window.
(b) To the extent that any additional country is added to an
existing feed, License Fees will be charged for such
additional country in accordance with Section 8 below on a
pro-rata basis.
(c) The parties agree that it is their intent that all Pictures
will be licensed for a minimum of three Windows in each
country. To the extent that an elective restructuring by Crown
Media of countries within a territorial feed results in Crown
Media having exploited fewer Windows in some countries in the
feed than in other countries in the feed, then Crown Media
shall license additional Windows (subject to Availability
Dates) in excess of the original three Crown Media Windows as
necessary so that all material countries in the feed (as
determined in Distribution's judgment) have exploited a
minimum of three Windows (subject to Availability Dates). The
License Fees for any such additional Windows shall be subject
to good faith negotiation by the parties. If the parties are
unable to reach agreement on such License Fees, the issue
shall be escalated to the President of Distribution and the
President of Crown Media for resolution.
8. Crown Media License Fees.
(a) For and in consideration of the rights and licenses granted to
Crown Media hereunder, Crown Media shall pay to Distribution
such License Fee, on a
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country-by-country, Picture-by-Picture basis, as is set forth
in Schedule C. The License Fee shall constitute payment for
one Crown Media Window and therefore shall be payable for each
of the three Crown Media Windows. The License Fees for
Australia, the Continental European territories, product
reacquired from Beta-Taurus, coproductions, certain feeds that
are not typically 18 months and seasonal Pictures (e.g.
Christmas) (the "Exceptions") reflect a 12 month exclusive
Window and shall be prorated on a monthly basis (rounding to
the nearest whole month) for those windows for which Crown
Media receives less than 12 months of exclusivity. All other
License Fees set forth on Schedule C reflect an 18 month
exclusive Window and shall be prorated on a monthly basis
(rounding to the nearest whole month) for those windows for
which Crown Media receives less than 18 months of exclusivity.
The License Fee for mini-series shall be the movie of the week
rate per hour multiplied by the number of hours for the
mini-series. All rates for mini-series premieres (as defined
in Section 6) shall be two times the mini-series rate set
forth in Schedule C for each of the three Windows granted.
(b) The License Fee for each Crown Media First Window shall be
payable in four equal installments; one installment payable at
the end of each of four consecutive calendar quarters
commencing with the calendar quarter during which the
respective Crown Media Window commences. Subsequent Windows
shall be payable in six equal installments; one installment
payable at the end of each of six consecutive calendar
quarters commencing with the calendar quarter during which the
respective Crown Media Window commences.
(c) On January 1 of each year, the amounts of such License Fees
shall increase by 5% per year on a cumulative basis and such
increase shall apply to any and all Crown Media Windows
commencing after such increase.
(d) The license fees payable to Distribution for the Interactive
Rights licensed by Crown Media hereunder will be negotiated on
a case-by-case basis. In general, however, it is the parties'
intention that any revenues derived from exploitation of
Interactive Rights will be split equally between Crown Media
and Distribution, after deduction of Crown Media's direct
out-of-pocket costs as well as any residuals and profit
participations (which shall be the responsibility of Crown
Media).
9. Hallmark Entertainment. Crown Media shall be permitted to utilize
the Hallmark Entertainment name in connection with the promotion and
advertisement of the Pictures, provided that all such uses are approved in
advance by the Branding Committee of Hallmark Cards, Incorporated.
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10. Other Product. Distribution and Crown Media agree to negotiate in
good faith on a product-by-product basis with respect to Crown Media's licensing
pay television exhibition rights to any television product which does not fall
under this agreement (i.e., series, documentaries and specials, etc.) and for
which Distribution controls and Crown Media desires to acquire such rights
during the Term. Crown Media acknowledges that the project "Dinotopia" is
specifically excluded from this agreement.
11. Non-Transferable. The rights herein may not be assigned, sublicensed
or transferred by Crown Media by operation of law, change of control or
otherwise; provided, however, that upon Crown Media's written request,
Distribution may, in its sole discretion, permit Crown Media to sell select
Pictures to another third party or parties. Crown Media shall be responsible for
the full payment of the License Fee for such Picture(s) as though such Pictures
were exhibited by Crown Media pursuant to this Agreement. The rights licensed
hereunder may be assigned to the operator of a pay television service (subject
to such operator's assuming the ongoing license fee obligations hereunder) in
connection with The Chase Manhattan Bank exercising remedies available to it, as
agent, as a result of an event of default by the Credit Parties under that
certain Credit, Security, Guaranty and Pledge Agreement dated as of August 31,
2001, among Crown Media Holdings, Inc., various of its subsidiaries, the Lenders
named therein and The Chase Manhattan Bank, as agent.
12. Renewal and Price Adjustment.
(a) This Agreement shall be renewable for an additional five year
period at the end of the Initial Term (the "Renewal Term") at
Distribution's option, provided that Distribution agrees to
renew so long as Crown Media is not in default under this
Agreement or any other agreement with Distribution and that
Crown Media does not provide written notice to Distribution
six months prior to the end of the Initial Term indicating
that Crown Media does not wish to renew. Distribution will
provide Crown Media with notice of Distribution's intent to
renew or not to renew six months prior to the end of the end
of the Initial Term.
(b) Either party shall have the right to request a price
adjustment for the Renewal Term by providing the other party
with written notice six months prior to the end of the Initial
Term. In the event either party delivers such notice, the
parties agree to negotiate in good faith to determine the fair
market rate for the License Fees for the Renewal Term. If the
parties fail to reach agreement with respect to License Fees
at least three months prior the end of the Initial Term, then
the parties agree to submit the matter to an independent third
party with experience in the industry. The independent third
party shall be selected by the parties. In the event the
parties fail to agree upon an independent third party, each
party shall designate a third party and the designees shall
collectively select a neutral third party with experience in
the industry, and that party shall determine the fair market
value rate for the License Fees for the Renewal Term, provided
that such
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fair market rate shall not be more than 20% higher or 20%
lower than the License Fees in existence at such time. Each
party shall bear its own costs of the process and the costs of
the neutral third party shall be shared equally.
13. Entire Agreement. This Agreement and the attached Standard Terms and
Conditions contain the entire agreement between the parties and as of the date
hereof supersede any and all prior oral or written agreements including the
Program Agreement dated as of July 1, 1999 between the parties ("Original
Agreement"); provided, however, that (i) the Original Agreement shall remain in
effect with respect to all Windows commenced prior to January 1, 2001, and such
Window shall be governed pursuant to the terms of the Original Agreement; (ii)
Crown Media shall be obligated to pay license fees for all Windows commenced
prior to January 1, 2001, in accordance with the terms of the Original
Agreement, including Windows for Pictures transferred in connection with that
certain Purchase and Sale Agreement dated as of April 10, 2001 by and between
Distribution and Crown Media Holdings, Inc.; and (iii) all Windows commenced
during the Original Agreement shall be counted toward the minimums required
pursuant to Section 5 hereof. In the event of any conflict between this
Agreement and the Standard Terms and Conditions, this Agreement shall control.
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
HALLMARK ENTERTAINMENT CROWN MEDIA INTERNATIONAL,
DISTRIBUTION, LLC INC.
By /s/ Xxxxxx X. Xxxxx, Xx. By /s/ Xxxxxxx X. Xxxxxx
----------------------------- -------------------------------
Title President Title EVP
-------------------------- -----------------------------
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STANDARD TERMS AND CONDITIONS*
1. DELIVERY OF PRINTS.
(a) Licensor will deliver or cause to be delivered to Licensee at
the address set forth on Appendix A, those materials identified on Appendix A.
The videotape of each Picture licensed by this Agreement (shall hereinafter
individually be called "print" and collectively called "prints"). Delivery of
each print to Licensee or to Licensee's agent shall be deemed to be delivery by
Licensor to Licensee hereunder. All costs and charges in connection with such
delivery, including without limitation shipping charges and insurances thereon
shall be borne by Licensee. With respect to Licensee's exercise of Interactive
Rights to any Picture, Licensor will provide Licensee with a digitized copy of
the Picture when available. If a digitized copy is not available, Licensor will
create one for Licensee at cost.
(b) Licensee agrees to give Licensor not less than sixty (60) days
prior written notice of the scheduled date of each telecast. Licensee shall
notify Licensor by facsimile within thirty (30) days after receipt if such print
is physically defective for television broadcasting by customary industry
standards. In the event any print has not reached its destination at least
fifteen (15) days in advance of the date of scheduled telecast thereof, Licensee
shall notify Licensor by facsimile. If Licensee so notifies Licensor with
respect to any such physical defect of failure of delivery, as aforesaid, and
Licensor does not deliver to Licensee a replacement print of the same picture
(or another picture of comparable quality) in time for the scheduled telecast,
such telecast shall be deemed eliminated and the picture withdrawn, as provided
in subparagraph (b) of paragraph 11 of this Agreement. Failure of Licensee to
give Licensor such notice as aforesaid shall be deemed Licensee's irrevocable
acknowledgment that such print has been received and is satisfactory in all
respects.
2. RETURN OF PRINTS. Unless otherwise directed by Licensor, Licensee
shall retain the prints for the period ending the later of (x) the termination
or expiration of this Agreement or (y) the last licensed broadcast of such
Picture; provided that Licensor, shall have unencumbered access to such prints
at all times. At Licensor's direction Licensee agrees to return to Licensor,
prepaid, the prints (which includes the container thereof), in the same form and
condition as delivered by Licensor, ordinary wear and tear from proper use
excepted. Such prints shall be returned to Licensor (along with any other
material furnished by Licensor) as specified in Appendix A hereto, or to any
other party, or places as Licensor may from time to time designate.
Additionally, at Licensor's direction, Licensee agrees to return to Licensor,
prepaid, all other material that may have been furnished by Licensor. If any
prints are lost, stolen, destroyed or damaged, Licensee shall pay Licensor the
cost of replacement thereof, within seven (7) days after billing by Licensor.
Such payment shall not be construed to transfer to Licensee any right, title or
interest in or to said prints. Licensor may request that Licensee have the
prints destroyed and in such event Licensee agrees to do so, and to furnish
Licensor with Certificates of Destruction.
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* Licensor and Licensee shall be as designated on Appendix A hereto.
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3. ALTERATION OF PRINTS. Licensee shall telecast each Picture as
delivered, in its entirety and Licensee agrees not to cut, change, alter, modify
or add to the prints of the pictures, or any of them, without Licensor's prior
written consent except as necessary to comply with local censorship. However,
Licensee may insert commercial material and make such minor cuts as are
necessary to conform to time segment requirements but under no circumstances
shall Licensee delete or reposition the copyright notice or the credits and
xxxxxxxx incorporated in the pictures as delivered by Licensor. In no event may
any such insertions of commercial material or such minor cuts to conform to time
segment requirements adversely affect the artistic or pictorial quality of the
picture or interfere with its continuity.
4. USE OF PRINTS.
(a) Licensee shall telecast said pictures only from the originating
transmitter(s) and antenna of the station(s) specified herein, or, if none is
specified, to transmitters within the Territory. Licensee shall not, make,
authorize or permit any telecast hereof to be amplified, re-transmitted or
relayed on the same or on any other frequency by any translator or booster
station, community antenna system, or any other device or method not
specifically authorized herein.
(b) Licensor reserves the right to change the title of any
pictures(s) covered by this Agreement and to license to third parties film
excerpts of up to five (5) minutes in length from any picture for television
exhibition in any area at any time.
(c) Licensee shall not acquire any right, title or interest in or to
any picture or print hereunder and shall not make, authorize or permit any use
of the picture or print other than as specified herein. Additionally, Licensee
shall not duplicate, reproduce or copy same in any manner or form whatsoever.
(d) Licensee acknowledges that the title to the pictures and prints
shall remain in Licensor and Licensee acknowledges that with respect to each
picture and the literary, dramatic and music material included in each and upon
which each is based, Licensor hereby expressly reserves any and all rights not
herein specifically granted to Licensee, including, but without limitation
thereof, all theatrical, non-theatrical and home video rights and all re-make
rights and sequel rights, and that such reserved rights may be exercised and
exploited by Licensor concurrently with and during the term hereof, freely and
without limitation or restriction.
5. USE OF NAMES FOR ADVERTISING. Licensee warrants and agrees that: (a)
it will abide by and comply with the advertising and billing requirements of
each licensed picture in accordance with such advertising and billing
instructions as Licensor may furnish Licensee, and that such advertising shall
be made by Licensee so as not to constitute an express, implied, direct or
indirect endorsement of any product, service or sponsor; (b) it will not
advertise or announce in any manner or media any title changed by Licensor or
any picture or pictures withdrawn by Licensor; (c) it will abide by and comply
with the screen billing in the same form as it appears on the print of the
picture or pictures; and (d) it will indemnify Licensor against all costs,
damages, and expenses, including, but not limited to reasonable attorney's fees
and
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expenses, incurred or caused to Licensor by reasons of any actual or alleged
breach by Licensee of the provisions of this paragraph.
6. FORCE MAJEURE. If Licensor shall fail to make timely delivery of any
print or prints hereunder, by reason of any act of God, war, fire, flood,
strike, labor dispute, public disaster, transportation or laboratory
difficulties, order or decree of governmental agency or tribunal or another
similar or dissimilar cause beyond the control of Licensor, such failure on the
part of Licensor shall not be deemed to be a breach of this Agreement. Licensee
shall be responsible for all dubbing and subtitling of Pictures at its own
expense.
7. PAYMENT. All payments by Licensee to Licensor herein shall be made
in United States dollars by wire transfer as instructed by Licensor. Licensee
shall obtain at its expense all necessary permits from governmental authorities
to make all payments to Licensor required hereunder.
If any payment is prohibited to be made in the stipulated currency and a license
for payment in the stipulated currency cannot be obtained, Licensor may demand
payment in local currency at the rate of exchange in effect on the due date or
on the date of actual payment, whichever results in the greater amount in local
currency or terminate the agreement with respect to such territory. Licensee
shall pay Licensor for any and all costs, including reasonable attorney's fees
and expenses, incurred by Licensor in collecting any sums due under this
Agreement.
8. TAXES. Licensee shall pay and hold Licensor harmless from, all taxes
(excluding Licensor's income and franchise taxes), censorship charges or any
other charges (including interest and penalties on such amounts), assessments
and other fees now or hereafter imposed or based upon or resulting from the
delivery, exhibition, possession or use hereunder to or by the Licensee of the
prints and pictures, in whole or in part, licensed hereunder. Licensee shall
immediately provide Licensor with all written documentation requested by
Licensor, substantiating such payments including official governmental receipts.
Payment by the Licensee of the foregoing shall in no way diminish the license
fees due Licensor hereunder. To the extent that payment of any of the foregoing
is made by Licensor, Licensee shall reimburse Licensor on demand, and upon the
failure of Licensee to so reimburse Licensor, Licensor shall have all the
remedies herein for the collection of unpaid license fees, as well as all other
remedies provided by law.
9. WARRANTY AND INDEMNITY. Licensor represents and warrants that it has
the right to grant this license for the telecasting of the pictures herein
specified, including the sound tracks forming a part thereof (subject to
paragraph 10 below), and that such use of by Licensee will not violate the right
of others. Licensor agrees to indemnify and hold Licensee, its officers,
employees, successors and assigns free and harmless from any and all claims,
damages, liabilities, costs or expenses, including reasonable attorney's fees
and expenses, incurred by Licensee by reason of the breach of the foregoing
warranty, provided, however, Licensor shall not be liable for loss of profits or
consequential damages. Licensor agrees to defend at its own expense any action
or proceedings arising out of an alleged breach of the foregoing, warranty,
provided, however, that Licensee notifies Licensor promptly of any such claim or
of the
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commencement of any such action or proceedings, delegates complete and sole
authority to Licensor to defend or settle same, and cooperates fully with
Licensor in the defense thereof. Licensee represents and warrants that it has
the right to enter into this Agreement and to fully perform its obligations
hereunder that it will not permit the transmission of the pictures other than as
specified herein, or after the expiring or earlier termination of this
Agreement. Licensee agrees to indemnify, defend and hold Licensor, its officers,
employees, successors and assigns, free and harmless from any and all claims,
damages, liabilities, costs or expenses, including reasonable attorney's fees
and expenses arising out of or in connection with the use by Licensee, its
successors, assigns and sublicensees of the prints or pictures hereunder, or
arising out of or by reason of any breach of warranty, undertaking,
representation or agreement made or entered into herein on Licensee's part.
10. MUSIC PERFORMANCE RIGHTS. Licensor warrants that the small
performance rights in and to the music contained in each Picture are either
(a) controlled by and available for license from ASCAP, BMI or other similar
music performance rights society or (b) in the public domain, or (c) controlled
by Licensor and granted to Licensee solely to the extent necessary to permit
Licensee's use of said prints hereunder. Licensor does not represent or warrant
that Licensee may exercise the performing rights to said material without the
payment of a performing rights royalty or license fee. Licensee shall, at its
sole costs and expense, secure all small performance rights licenses necessary
for the telecast of the musical compositions contained in each print and shall
hold harmless Licensor from any liability or damage arising from Licensee's
failure to do so.
11. WITHDRAWAL AND ADJUSTMENT.
(a) Licensor may, in its absolute discretion, withdraw any licensed
picture if Licensor determines that the telecasting thereof would or might (i)
infringe upon the rights of others; (ii) violate any law, court order,
government regulation or other ruling of any governmental agency; (iii)
interfere with the actual or contemplated use of the licensed picture or the
material or rights contained therein for any purposes other than the telecasting
of the picture in Licensee's basic area; or, (iv) subject Licensor to any
liability.
(b) If Licensor elects to withdraw any picture as set forth in the
preceding subparagraph (a) of this paragraph 11, before its initial telecast, or
if the Picture is not acquired or produced by Licensor or if Licensor does not
control distribution rights, then Licensor shall have the right, in its sole
discretion, either to deliver to Licensee another picture of comparable quality
(which picture shall be deemed to replace the picture withdrawn) or may reduce
the number of pictures to be delivered and paid for hereunder by one and
Licensee shall be given a refund or credit, at Licensor's election, of such
license fee for such picture. Licensor also agrees to pay Licensee's actual cost
and expenses of dubbing and subtitling and simple preparation customary in the
industry.
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12. ADDITIONAL RIGHTS. The rights granted under this Agreement include
without limitation the following:
(a) During each Picture's licensed window and for 60 days prior to
such licensed window subject to other existing distribution agreements with
respect to such Picture, the right to use the title of such Picture for the
purpose of promoting, publicizing and advertising the exhibition of the Picture
on the Channel.
(b) In connection with the exhibition of each Picture in its
licensed window, the right to use and perform any and all music, lyrics and
musical compositions contained in each Picture and/or recorded in the soundtrack
solely as embodied in the Picture and as part of the exhibition, advertising and
publicizing of such Picture subject to Paragraph 10 hereof.
(c) During each Picture's licensed window, the right to publicize
and advertise the exhibition of such Picture throughout the relevant licensed
territories, including the right:
(i) to publish and to license and authorize others to publish
any synopses and summaries from each Picture and from any literary or
dramatic material included in such Picture in newspapers, magazines,
trade periodicals, booklets, press books and any other periodicals and
in all other media of advertising and publicity not exceeding 1000 words
in length;
(ii) to broadcast by radio and television for the purpose of
advertising and promoting the exhibition of such Picture and to
authorize others to so broadcast any parts or portions of each Picture
not exceeding two minutes in length;
(iii) to permit commercial messages to be exhibited during and
after the exhibition of each Picture;
(iv) to cause trailers of the Pictures and excerpts therefrom
not exceeding three minutes in length to be manufactured, exhibited and
distributed by every means, medium, process, method and device now or
hereafter known (including via the internet) for the purpose of
advertising the exhibition of the Picture subject to the foregoing.
13. BANKRUPTCY AND DEFAULT. If Licensee becomes insolvent or bankrupt or
makes an assignment for benefit of creditors, or if any property of Licensee is
attached and if such attachment is not released within ten (10) days after the
date of attachment, or if a receiver, liquidator, or trustee is appointed for
any of Licensee's property, or if Licensee breaches any of the material terms or
provisions of this Agreement, Licensor in addition to any and all other rights
it may have under this Agreement or in law or in equity, may at its option, from
time to time during such occurrence, do any one or more of the following:
suspend delivery or telecasting by Licensee of one or more pictures hereunder
until default is ended or remedied,
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terminate this Agreement, or declare the Agreement breached and declare all
unpaid amounts payable to Licensor hereunder immediately due and specifically,
if Licensee shall fail to make the payments to Licensor on a timely basis as
provided in this Agreement, Licensor shall have the right but not the obligation
to declare Licensee in default and thereby either to suspend the rights herein
granted until the default is ended or to terminate this Agreement without
foregoing any of Licensor's rights to recover damages deriving from Licensee's
default. Licensee shall immediately return all materials to Licensor.
A default by Licensee under this Agreement shall be deemed a default under any
and all other licenses granted by Licensor to Licensee and shall entitle
Licensor to terminate any and all such other licenses and to declare any then
unpaid balance of license fees thereunder immediately due and payable.
Licensee acknowledges that the industry custom of licensing pictures
substantially in advance of the scheduled telecast dates have the effect of
rendering the Pictures hereunder unmarketable in the area covered by this
Agreement during any period which includes the period of this license or any
part thereof. Licensee also acknowledges that, by reason of the foregoing, no
method exists for accurate measurement of damages for any breach of Licensee's
agreement to pay Licensor as provided in this Agreement. It is therefore agreed
that, in addition to all other remedies available at law, in equity, or under
the other provisions of this Agreement, Licensor shall be entitled (upon breach
by Licensee of such agreement to pay Licensor) to recover from Licensee, as
liquidated damages, the total unpaid license fees for all telecasts authorized
hereunder, whether or not such telecasts actually occur, and in addition,
reasonable attorney's fees and expenses or collection agency fees and expenses
of any attorney or collection agency is retained by Licensor at any time to
enforce the provisions hereof, plus such other amounts as may be due hereunder.
If Licensor elects or becomes obligated to make such third party payments in
place of Licensee or if Licensor incurs any expenses for legal services, court
costs, and associated expenses because of any breach by Licensee, the sum or
sums so paid by Licensor and the amount of such fees, costs and associated
expenses shall be payable forthwith from Licensee to Licensor, together with
interest thereon at the rate of one and one-half percent (1.5%) per month. If
Licensee fails to pay the license fees herein provided at the times due in the
amounts set forth herein, the sums unpaid shall bear interest at the rate of one
and one-half percent (1.5%) per month from the due date thereof until paid. Any
payment not made within thirty (30) days after its due date shall bear interest
at the rate of one and one-half percent (1.5%) per month computed from the
original due date until paid; however, if said rate is in excess of the maximum
permitted under the laws of the jurisdiction where the debt accrues, then in
such event the rate of interest shall be the maximum permitted by law.
Acceptance of any payment by Licensor after its due date shall not constitute a
waiver by Licensor of any of the rights hereunder.
14. ASSIGNMENT. Licensor reserves the right to hypothecate, pledge
or discount this Agreement and to obtain loans from a bank or other lenders by
the assignment as security. The Licensee recognizes that this Agreement may be
exhibited and or assigned to such bank or other lenders which may thereby be
induced to enter into financial commitments in reliance thereon. The Licensee
agrees that in the event of receipt of written notice of assignment of the
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Agreement by Licensor, monies due to Licensor shall be paid to any bona fide
third party assignee in accordance with Licensor's instructions. Licensor may
freely assign this Agreement to its successor or successors or to any of its
associated, affiliated and subsidiary companies. This Agreement may not be
assigned by Licensee, either voluntarily or by operation of law, without the
prior written consent of Licensor. Any such assignment, if consented to by
Licensor, shall not relieve Licensee of its obligations hereunder.
15. GENERAL.
(a) Licensee acknowledges that telecasts or releases of the
Pictures originating outside its basic territory may be received by television
sets located within such basic territory and Licensee agrees that such reception
shall not constitute a breach of this Agreement by Licensor.
(b) Subject to the provisions of Paragraph 14 hereof, this
Agreement and all of its terms, conditions and other provisions and all rights
herein shall inure to the benefit of and shall be binding upon the parties
hereto and to their respective successors and assigns.
(c) The titles of the paragraphs of this Agreement are for
convenience only and shall not in any way affect the interpretation of any
paragraph of this Agreement or of the Agreement itself.
(d) Time is of the essence in the performances by Licensee of
its obligations for payment hereunder.
(e) A waiver by either party of any of the terms or conditions
of this Agreement in any instance shall not be deemed or construed to be a
waiver of such term or condition for the future, or of any subsequent breach
thereof. All remedies, rights undertakings, obligations and agreements contained
in this Agreement shall be cumulative and none of them shall be in limitation to
any other remedy, right, undertaking, obligation or agreement of either party.
(f) All notices, statements, and other documents required to be
given hereunder shall be given in writing either by personal delivery, by mail,
or telegraph (except as herein otherwise expressly provided) to the persons and
at the addresses set forth in Appendix A hereto, or to such other persons and
addresses as may be designated in writing by either party. Notice given by mail
or by telegraph shall be deemed given on the date of mailing thereof or of
delivery of such telegram to a telegraph office, charges prepaid or to be
billed.
(g) This Agreement shall be deemed made in, and shall be
construed and interpreted in accordance with the laws of, the State of New York
pertaining to contracts entirely made and to be performed therein. In the event
of any disagreement between the parties which cannot be settled by mutual
agreement, the parties agree that the federal or state courts sitting in the
City, State and County of New York (and courts with appellate jurisdiction
therefrom) shall have exclusive jurisdiction over such dispute and the
resolution thereof, and the parties agree that
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jurisdiction and venue in such courts in appropriate, and that any process in
connection therewith may be served in the manner provided hereinabove for
notices to the parties.
(h) All rights not specifically granted herein to the Licensee
are reserved for Licensor's use and disposition without any limitations
whatsoever, regardless of the extent to which the same are competitive with
Licensee or the license granted hereunder.
(i) This Agreement constitutes the entire agreement between
Licensee and Licensor with respect to the subject matter hereof and may not be
changed, modified, amended, or terminated except by operation of law or by a
writing signed by the parties hereto.
(j) In the event of any conflict between any provision of this
Agreement and any material law, rule or regulation, this Agreement shall be
deemed modified to the minimum extent necessary to remove such conflict.
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APPENDIX A
Materials
1. With respect to each Picture, Licensor shall deliver to Licensee, a
Digital Betacam NTSC and PAL tape recorded with stereo (if available) language
mix and music and effects track, free of scratches, splices and all encoding
technologies or a digitized copy, as set forth in Section 1(a) of Standard Terms
and Conditions. If available, Licensor shall provide to Licensee dubbed or
subtitled prints at the cost of duplication.
2. With respect to each Picture, Licensor shall deliver to Licensee, a
script, a synopsis, color transparencies (if available) and music cue sheets in
connection with each Picture delivery hereunder.
3. With respect to each Picture, Licensor shall deliver to Licensee, any
other available relevant materials in Licensor's possession.
Addresses
Licensee - Crown Media International, Inc., 0000 Xxxxx Xxxxxxx'x Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, Attention: VP of Broadcast Operations,
facsimile number: 000-000-0000.
Licensor - Hallmark Entertainment Distribution, LLC, 0000 Xxxxxx xx xxx
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Vice President of Sales,
facsimile number: 000-000-0000.
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SCHEDULE A
PREVIOUSLY PROVIDED
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SCHEDULE B
The following agreements have provisions granting the licensee a right of
good faith negotiations with respect to renewal or extension:
XX0 - Xxxxxxx
XX0 - Xxxxxx
The following agreements have provisions granting the licensee a right of
renewal:
Nine Network - Australia
Viaset - Scandinavia
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