Content License Agreement - CBS Corp. and Hollywood.com Inc.
CONTENT LICENSE AGREEMENT
AGREEMENT made as of the 3rd day of January, 1999, by and between CBS
Corporation, a Pennsylvania corporation with offices at 51 West 52nd Street, New
York, New York 10019 ( "CBS"), and hollywood.com, Inc., a California corporation
with offices at 2255 Glades Road, Suite 237W, Boca Raton, Florida 33431
("Hollywood").
1. DEFINITIONS
1.1 "Affiliate" of the Person concerned, means a Person that directly
or indirectly (through one or more intermediaries) controls, is controlled by or
is under common control with such Person.
1.2 "Annual Ceiling" shall have the meaning set forth in section
2.3(c)(i) hereof.
1.3 "Arbitration Proceeding" means a proceeding conducted in accordance
with the following rules:
(a) such proceeding is commenced by the party concerned,
within five (5) days after notice to the other party of its intent to elect
arbitration (under paragraph 1.6 below), and requesting the New York office of
the American Arbitration Association to designate one arbitrator (who is a
retired federal or state judge or a member of the CPC Panel of Distinguished
Neutrals of the CPR Institute for Dispute Resolution and who is not and has not
been an affiliate, employee, consultant, officer, director or stockholder of CBS
or Big Entertainment, Inc. ("BEI")) to conduct the proceeding;
(b) within seven (7) days after the designation of the
arbitrator, the arbitrator and the parties shall meet, at which time each party
shall be required to set forth in writing all disputed issues, together with its
proposed resolution of the matter, all in reasonable detail and containing such
supporting materials it may choose to submit;
(c) the arbitrator shall set a date for a hearing, which shall
be no later than ten (10) days after the submission of written proposals
pursuant to subparagraph 1.3(b) above, to discuss each of the issues identified
by the parties. Each party shall have the right to be represented by counsel.
The arbitration shall be governed by the Commercial Arbitration Rules of the
American Arbitration Association; provided, however, that the Federal Rules of
Evidence shall apply with regard to the admissibility of evidence;
(d) the arbitrator shall rule on the matter at issue within
seven (7) days after the completion of the hearing described in subparagraph
1.3(c) above. All rulings of the arbitrator
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shall be in writing, shall be delivered to the parties and shall be final and
conclusive as to any such matter; and
(e) the arbitration shall be conducted in New York City.
1.4 "Capital Stock" means any common stock or preferred stock of BEI
and any options, warrants, rights, or other securities that are convertible,
exercisable, or exchangeable into common stock or preferred stock of BEI.
1.5 "CBS License Guidelines" means the clearance, form, format and use
restrictions and procedures set forth in Exhibit A attached hereto.
1.6 "CBS Competitor" means any Person, other than CBS or any Affiliate
of CBS, who is primarily engaged in North America directly, or indirectly
through an Affiliate, in radio or television programming or radio or television
program distribution (including, without limitation, free over-the-air,
telephone, Internet or microwave). A CBS Competitor shall not include any of the
following:
(a) any Person engaged in television programming or television
program distribution, provided such Person's aggregate revenues generated from
television programming and television program distribution are less than five
percent (5%) of the aggregate revenues of the television broadcast market.
(b) any Person engaged in free over-the-air radio programming
or radio program distribution provided such Person is not one of the top two
(excluding CBS) nationally ranked radio broadcast networks, based on overall
radio audience ratings.
(c) any Person engaged in television programming or television
program distribution over the Internet ("Television Internet Concern"), provided
either of the following conditions are met:
(i) the aggregate revenue of the Internet video
streaming market/industry ("Internet Video Streaming Market") is less
than 10% of the aggregate revenue for the network television broadcast
market; or
(ii) if the aggregate revenue of the Internet Video
Streaming Market is equal to or more than 10% of the aggregate revenue
for the network television broadcast market, then the Television
Internet Concern shall not be a CBS Competitor if the aggregate revenue
of such Television Internet Concern generated by television programming
or television program distribution over the Internet is less than 10%
of the aggregate revenue of the Internet Video Streaming Market.
The foregoing markets and revenues shall be identified/delineated by Veronis,
Suhler & Associates, provided, however, that if Veronis, Suhler is not a
nationally reputable media/ communications forecasting service or does not (as a
matter of course) provide the relevant data,
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the parties shall mutually agree upon a nationally reputable
media/communications forecasting service (the "Forecasting Service"). In the
event that the parties are unable to reach agreement upon the Forecasting
Service within ten (10) business days of commencement of discussion on the
issue, then either party hereto shall have the right to elect to commence an
Arbitration Proceeding to determine the Forecasting Service.
(d) any Person engaged in radio programming or radio program
distribution over the Internet ("Radio Internet Concern"), provided either of
the following conditions are met:
(i) the aggregate revenue of the Internet radio
streaming market/industry ("Internet Radio Streaming Market") is less
than 10% of the aggregate revenue for the radio broadcast market; or
(ii) if the aggregate revenue of the Internet Radio
Streaming Market is equal to or more than 10% of the aggregate revenue
for the radio broadcast market, then the Radio Internet Concern shall
not be a CBS Competitor if the aggregate revenue of such Radio Internet
Concern generated by radio programming or radio program distribution
over the Internet is less than 10% of the aggregate revenue of the
Internet Radio Streaming Market.
The foregoing markets and revenues shall be identified/delineated by Veronis,
Suhler & Associates, provided, however, that if Veronis, Suhler is not a
nationally reputable media/ communications forecasting service or does not (as a
matter of course) provide the relevant data, the parties shall mutually agree
upon a nationally reputable media/communications forecasting service (the
"Forecasting Service"). In the event that the parties are unable to reach
agreement upon the Forecasting Service within ten (10) business days of
commencement of discussion on the issue, then either party hereto shall have the
right to elect to commence an Arbitration Proceeding to determine the
Forecasting Service.
(e) any Person who owns or operates a multichannel video
program distribution service, a cable system, a wireless cable system or a
direct broadcast satellite system, so long as such Person does not otherwise
engage (either directly or indirectly through an Affiliate) in television or
radio programming or program distribution.
(f) any Person engaged in the production of television
programs or other audio visual materials, so long as such Person does not
otherwise engage (either directly or indirectly through an Affiliate) in
television or radio programming or program distribution.
(g) AT&T Corporation, Comcast Corporation, Gannett Co, Inc. or
The Times Mirror Company, as constituted on the date of this Agreement.
(h) any Person engaged in television programming or television
program distribution, so long as neither CBS nor any Affiliate of CBS owns a
majority interest in the CBS Television Network
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(i) any Person engaged in radio programming or radio program
distribution, so long as neither CBS nor any Affiliate of CBS owns a majority
interest in Infinity Broadcasting Corporation.
The revenue calculations in the preceding sentences shall be based on the last
full fiscal year of the Person (including, without limitation, Television
Internet Concern or Radio Internet Concern) concerned and the last full calendar
year of the applicable market/industry.
1.6 "CBS Content" means any Television Content, including archival
Content, related to the movie business or any particular motion picture and
contained in CBS's regularly scheduled hard news broadcasts, scheduled special
events coverage and unscheduled live breaking news coverage, which CBS has the
right to license for use on the Internet. Notwithstanding anything contained
herein to the contrary, nothing herein shall be construed to grant Hollywood any
rights to CBS Radio Content.
1.7 "CBS Content Pages" means pages of the Hollywood Site that include
any CBS Content.
1.8 "Ceiling Amount" shall have the meaning ascribed to it in section
2.4(a)(i).
1.9 "Co-Branded Site" means an Internet Site: (a) that
contains/displays a majority of the Content displayed on the Hollywood Site, and
displays such Content in the same form and format as featured on the Hollywood
Site; (b) is branded with the Hollywood name (or trademark) and the
name/trademark of the third-party Web Site and (c) is accessed from the third
party Web Site.
1.10 "Collaboration Agreement" means any one of the following
agreements between or among CBS, Hollywood and BEI: (a) this Agreement; (b) the
Advertising and Promotion Agreement dated as of even date (the "Ad Agreement")
(c) the Stock Purchase Agreement dated as of even date; (d) the Investor's
Rights Agreement dated as of even date and (e) the Voting Agreement dated as of
even date.
1.11 "Content" means text, graphics, photographs, video, audio and/or
other data or information, including, without limitation, Television Content,
relating to any subject, and/or advertisements.
1.12 "Contract Year" means the annual period beginning on the date of
commencement of the term of this Agreement, and each subsequent annual period
during the term beginning on the anniversary of that commencement date (as such
Year may be suspended or extended, and those dates postponed, as provided
herein).
1.13 "Hollywood Content" means any Content owned or controlled by
Hollywood other than CBS Property (as defined in subparagraph 4.1(a)).
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1.14 "Hollywood Site" means: (a) the Internet Web Site owned or
controlled by Hollywood (and is accessed via the URL www.hollywood.com) that
features or will feature movie, music and television-related news, data and
merchandise offers and related Content and merchandise offers; (b) any
Co-Branded Site and (c) any Mirror Site.
1.15 "Intellectual Property Rights" means all inventions, discoveries,
trademarks, patents, trade names, copyrights, jingles, know-how, intellectual
property, software, shop rights, licenses, developments, research data, designs,
technology, trade secrets, test procedures, processes, route lists, computer
programs, computer discs, computer tapes, literature, reports and other
confidential information, intellectual and similar intangible property rights,
whether or not patentable or copyrightable (or otherwise subject to legally
enforceable restrictions or protections against unauthorized third party usage),
and any and all applications for, registrations of and extensions, divisions,
renewals and reissuance of, any of the foregoing, and rights therein, including
without limitation (a) rights under any royalty or licensing agreements, and (b)
programming and programming rights, whether on film, tape or any other medium.
1.16 "Internet" means a global network of interconnected computer
networks, each using the Transmission Control Protocol/Internet Protocol and/or
such other standard network interconnection protocols as may be adopted from
time to time, which is used to transmit Content that is directly or indirectly
delivered to a computer or other digital electronic device for display to an
end-user, whether such Content is delivered through on-line browsers, off-line
browsers, or through "push" technology, electronic mail, broadband distribution,
satellite, wireless or otherwise.
1.17 "Internet Site" or "Web Site" means any site or service delivering
Content on or through the Internet, including, without limitation, any on-line
service such as America Online, Compuserve, Prodigy and the Microsoft Network.
1.18 "Market Value" shall have the meaning ascribed to it in section
2.4(a)(iii).
1.19 "Mirror Site" means an Internet Site that contains the same
Content as the Hollywood Site and is displayed in the same form/format as the
Hollywood Site, and which (a) is located at a geographic location distinct from
the Hollywood Site and (b) is created for the sole purpose of improving the
performance of and accessibility to the Hollywood Site.
1.20 "Person" means any natural person, legal entity, or other
organized group of persons or entities. (All pronouns whether personal or
impersonal, which refer to Persons include natural persons and other Persons.)
1.21 "Television Content" consists of Content broadcast on television.
1.22 "Term" means the term specified in paragraph 3.1 below.
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2. LICENSE
2.1 (a) Subject to the terms and conditions contained herein, CBS
grants to Hollywood the non-exclusive right and license to:
(i) use, copy, publicly display, publicly perform,
distribute, or otherwise make the CBS Content available on the
Hollywood Site during the Term, and
(ii) Archive the CBS Content after expiration of the
Term, to the extent CBS has the right to so license such Content to
Hollywood.
(b) CBS agrees that users of the Hollywood Site may view,
access, retrieve, copy and print only for noncommercial private use (which use
shall exclude any not-for-profit private use) any CBS Content distributed
hereunder on the Hollywood Site. Nothing in this Agreement grants Hollywood
ownership or other rights in or to the CBS Content, except in accordance and to
the extent of this license.
(c) "Archive", as used in this paragraph 2.1 (and with respect
to CBS Content), shall mean the retention of CBS Content in the form, format and
context originally displayed on the Hollywood Site during the Term (without, for
avoidance of doubt, any editing or derivative use thereof), and use thereof in
accordance with the terms of this Agreement applicable during the Term
(including, without limitation, the CBS License Guidelines).
2.2 Hollywood's exercise of the rights granted herein shall conform to
the restrictions or requirements set forth in the CBS License Guidelines, as the
CBS License Guidelines may be amended or revised from time to time by CBS, to
reflect any changes in the business, practice, procedures or policies of CBS.
CBS will notify Hollywood of such amendments/revisions.
2.3 Hollywood shall have reasonable access to, and, subject to the
conditions stated in the next sentence, CBS shall deliver CBS Content to
Hollywood in a mutually agreed-upon form and format, provided Hollywood's
request for CBS Content is reasonable. Notwithstanding anything to the contrary
contained in this paragraph, CBS shall have the right to refuse to deliver to
Hollywood any CBS Content if, in CBS's reasonable judgment: (i) any Content on
the Hollywood Site (the "Hollywood Content") or (ii) the use contemplated for
the CBS Content, conflicts with, interferes with or is detrimental to CBS's
interests, reputation or business or might subject CBS to unfavorable regulatory
action, violate any law, infringe the rights of any Person, or subject CBS to
liability for any reason.
2.4 (a) (i) The CBS Content licensed hereunder shall not exceed a total
Market Value of Thirty Million Dollars ($30,000,000) during the Term
(the "Aggregate Ceiling") or a Market Value of Four Million Three
Hundred Thousand Dollars ($4,300,000) during each of the first six
Contract Years and Four Million Two Hundred Thousand Dollars
($4,200,000) during the seventh Contract Year (the "Annual Ceiling"),
subject to the
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reduction(s) prescribed in section 2.4(a)(ii) below. The Aggregate
Ceiling and the Annual Ceiling are sometimes hereinafter individually
or collectively referred to as the "Ceiling Amount".
(ii) The Annual Ceiling shall be reduced by: (A) the
(Market Value of the) Annual Ad Sales Option, as prescribed in
paragraph 2.3 of the Ad Agreement; and (B) the Market Value of any
advertising or promotion provided by CBS (during the Contract Year
concerned), pursuant to paragraph 2.4 of the Ad Agreement.
(iii) "Market Value", as used in this subparagraph
2.4(a), shall mean:
(A) with respect to CBS Content, the average
price paid by a third party for the license of such
Content on the Internet (provided that CBS has an
established market for licenses on the Internet) or,
if no such rate (or CBS market) exists, then the
average price for worldwide over-the-air free
television use (including in all instances, without
limitation, any costs related to the retrieval,
preparation (e.g., tape transfer and/or duplication)
or delivery of CBS Content).
(B) with respect to advertising sales on
the Hollywood Site, the proportionate dollar amount
(of the Gross Ad Revenues, as such term is defined
in the Ad Agreement) of the Ad Sales Option (as
defined in paragraph 2.3 of the Ad Agreement).
(C) with respect to CBS advertising and
promotion, the unit price for the advertising medium
concerned, as described in subparagraph 2.1(b) of
the Ad Agreement.
(b) (i) Upon commencement of the Contract Year concerned
and/or each calendar quarter of the Contract Year concerned,
Hollywood shall use reasonable efforts to notify CBS of its
election to license Content, exercise its Annual Ad Sales
Option (as defined in paragraph 2.3 of the Ad Agreement) or
utilize the Annual Additional Promo Commitment (as prescribed
in paragraph 2.4 of the Ad Agreement), and the respective
Market Values thereof.
(ii) If, upon expiration of the Contract Year
concerned, Hollywood has failed to notify CBS of its election,
as set forth in section 2.4(b)(i) above, then the Annual
Ceiling (or any portion thereof for which Hollywood has failed
to notify CBS of its election) will be deemed forfeited.
(iii) Except as set forth in section 2.4(b)(ii)
above, if upon expiration of the Contract Year concerned, the
Annual Ceiling has not been exhausted, then the amount of the
unused portion of the Annual Ceiling for such Contract Year
may be
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carried over to the immediately subsequent Contract Year (the
"Annual Ceiling Carryover"), it being understood, however,
that (A) in the immediately subsequent Contract Year the
Annual Ceiling Carryover shall be exhausted (first) before the
Annual Ceiling for such subsequent Contract Year is utilized,
(B) Hollywood shall identify the intended use for (i.e.,
allocate) the Annual Ceiling Carryover during the first thirty
(30) days of the subsequent Contract Year, and CBS shall use
reasonable efforts to satisfy the allocation request depending
upon the availability of the inventory/item sought. In the
event that the inventory is not available, then Hollywood
shall make a substitute allocation within thirty (30) days
following CBS's advising Hollywood that the inventory/item
sought is unavailable, (C) any portion of the Annual Ceiling
Carryover unused as of the expiration date of the Contract
Year concerned (i.e., such subsequent Contract Year) shall be
deemed forfeited, except to the extent Hollywood complied with
the notice requirements prescribed herein and CBS did not
deliver such portion of the Annual Ceiling Carryover and (D)
any portion of the Ceiling Amount (including the Annual
Ceiling Carryover) unused as of the expiration date of the
Term shall be deemed forfeited, except to the extent Hollywood
complied with the notice requirements prescribed herein and
CBS did not deliver such portion of the Ceiling Amount or
Annual Ceiling Carryover, as applicable.
2.5 During the Term, the Hollywood Site shall consist of (i)
movie-related entertainment news, data and merchandise offers (including movie
celebrity interviews, movie reviews, movie trailers, movie soundtracks,
movie-theater listings and movie ticketing), (ii) music-related news, data and
merchandise offers, (iii) television-related news, data and merchandise offers
and (iv) other entertainment-related Content and merchandise offers, in each
case as determined by Hollywood from time to time in its sole discretion. All
Content displayed on the Hollywood Site shall be subject to any restrictions or
requirements set forth in the CBS License Guidelines. CBS shall have the right
to demand the removal from the Hollywood Site of any Content which in CBS's
reasonable business judgment conflicts with, interferes with or is detrimental
to CBS's interests, reputation or business or which might subject CBS to
unfavorable regulatory action, violate any law, infringe the rights of any
Person, or subject CBS to liability for any reason. Hollywood shall thereafter
remove the objected-to Content as soon as technically feasible, but in no event
later than ten (10) days (or less than said ten days if CBS is or would be
subject to potential liability, it being understood that: (i) in each instance,
CBS shall notify Hollywood of the potential liability concerned; and (ii)
Hollywood shall use its best efforts to remove the Content concerned as soon as
possible, but in any event within three (3) business days) after written notice
from CBS demanding the removal of such Content, subject to the next sentence.
CBS shall have no right to demand the removal of any Content which is a hard
news item of a nature normally reported by other news organizations of a
character and stature equal to Hollywood or an editorial item clearly marked as
such, provided, however, that such Content does not/will not subject CBS to
unfavorable regulatory action, violate any law, infringe the rights of any
Person, or subject CBS to liability for any reason. For purposes of this
paragraph 2.5 (and in addition to the terms and conditions set forth in
paragraph 7.4 below) notice shall be deemed given when sent by facsimile
transmission to the fax number concerned in paragraph 7.4 below.
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2.6 (a) During the Term, Hollywood shall periodically consult with CBS
regarding the presentation of the CBS Content on the Hollywood Site. In no event
shall Hollywood distort or misrepresent any material contained in the CBS
Content. No CBS Content shall be used/displayed out of context. Hollywood shall
have the right to edit and revise the CBS Content solely to meet spatial
requirements provided that any such edits or revisions shall not distort or
misrepresent any events, opinions or statements contained in the CBS Content.
(b) Subject to any restrictions or requirements in the CBS
License Guidelines, Hollywood shall have the right, but not the obligation, to
correct any errors, omissions and/or inaccuracies in the transmission or
transcription of the CBS Content identified by Hollywood or reported to
Hollywood by Hollywood Site users.
2.7 Except as otherwise specified in this Agreement, during the Term,
Hollywood shall not, without CBS's prior written approval, display, perform,
distribute, transmit or otherwise make available in any media now known or
hereafter developed, other than through the Hollywood Site, any CBS Content, or
any portion thereof.
2.8 In the event that Hollywood desires to use any music contained in
any CBS Content on the Hollywood Site, prior to such use, Hollywood shall: (i)
report to the applicable music rights society on behalf of CBS, all titles and
publishers of all such music; (ii) secure, at its sole cost and expense, and pay
for all performing, duplication and/or recording rights licenses, if any,
required by the applicable rights holder(s) for the use of musical compositions
and sound recordings on the Internet and (iii) assume any and all liability in
connection with its use of the music. CBS shall endeavor to deliver to Hollywood
accurate music cue sheets for all music contained in the CBS Content.
2.9 Hollywood's right to Archive CBS Content shall cease if any of the
following occurs: (i) CBS terminates this Agreement pursuant to paragraph 6.1;
or (ii) Hollywood breaches any term of the CBS License Guidelines.
2.10 Upon termination of this Agreement pursuant to paragraph 6.1 or
the Archive rights, Hollywood shall cease using any CBS Content or Content
derived therefrom. In that connection, Hollywood shall immediately remove or
erase the CBS Content from the Hollywood Site as soon as technically
practicable, but in no event shall any such material remain on the Hollywood
Site more than ten (10) days (or less than said ten days, if CBS is or would be
subject to potential liability) after CBS's notice of termination, and at CBS's
request, Hollywood shall furnish CBS with certified evidence of such removal or
erasure satisfactory to CBS.
3. TERM
3.1 The term of this Agreement ("Term") shall begin on January 3, 1999
and shall continue in full force and effect for a period of seven (7) years,
through and including January 3, 2006, unless earlier terminated in accordance
with the terms and conditions contained herein.
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4. RIGHTS
4.1 (a) As between CBS and Hollywood, CBS is or shall be the exclusive
owner of and shall retain all right, title and interest to the CBS Content or
any Content derived therefrom, including all Intellectual Property Rights
therein (the "CBS Property").
(b) Hollywood shall place a notice of copyright on each CBS
Content Page in accordance with the CBS License Guidelines. No CBS Content Page
shall contain any other copyright notice whatsoever except as provided in the
CBS License Guidelines. Hollywood shall cooperate fully with CBS in connection
with CBS's obtaining appropriate copyright protection in the name of CBS for any
CBS Content Page.
(c) With respect to all Content on the Hollywood Site other
than the CBS Property (i.e., CBS Content or any Content derived therefrom), as
between CBS and Hollywood, Hollywood is or shall be the exclusive owner of and
shall retain all right, title and interest to such Content or any Content
derived therefrom, including all Intellectual Property Rights therein, and that
Content shall be deemed "Hollywood Content."
4.2 Hollywood agrees to take all action and cooperate as is reasonably
necessary, at CBS's request, to protect the CBS's rights, titles, and interests
specified in this Article 4, and further agrees to execute any documents that
might be necessary to perfect CBS's ownership of such rights, titles and
interests.
5. WARRANTIES; REPRESENTATIONS; INDEMNITIES
5.1 (a) CBS represents and warrants that:
(i) it has full power and authority to enter into and
fully perform this Agreement; and
(ii) it has sufficient right and authority to grant
to Hollywood all licenses and rights granted by CBS hereunder.
(b) Hollywood represents and warrants that:
(i) it owns or controls all right, title, and
interest in and to the Hollywood Content and the Hollywood Site, and
all Intellectual Property Rights therein, necessary to carry out its
obligations hereunder;
(ii) it is has the full power and authority to enter
into and fully perform this Agreement;
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(iii) the Hollywood Site (including any and all
Intellectual Property Rights therein or connected thereto) and the
Hollywood Content and the use thereof shall not violate any applicable
law or infringe upon or violate any rights of any Person; and
(iv) the Hollywood Site will be produced, advertised
and transmitted in accordance with all applicable federal, state, local
and foreign laws and regulations.
5.2 (a) Each party (the "Indemnifying Party") shall at all times
indemnify, hold harmless and defend the other party (the "Indemnified Party")
from and against any loss, cost, liability or expense (including court costs and
reasonable attorneys' fees) arising out of or resulting from any breach by the
Indemnifying Party of any representation, warranty, covenant or agreement
contained herein. In the event of any such claim, the Indemnified Party shall:
(i) promptly notify the Indemnifying Party of the claim; (ii) allow the
Indemnifying Party to direct the defense and settlement of any third party claim
with counsel of the Indemnifying Party's choosing; and (iii) provide the
Indemnifying Party, at the Indemnifying Party's expense, with information and
assistance that is reasonably necessary for the defense and settlement of the
third party claim. The Indemnified Party reserves the right to retain counsel,
at the Indemnified Party's sole expense, to participate in the defense of any
such claim. The Indemnifying Party shall not settle any such claim or alleged
claim without first obtaining the Indemnified Party's prior written consent,
which consent shall not be unreasonably withheld, if the terms of such
settlement would adversely affect the Indemnified Party's rights under this
Agreement or otherwise. If the Indemnifying Party assumes the defense and
settlement of the claim as set forth above, then the Indemnifying Party's only
obligation is to satisfy the claim, judgment or approved settlement.
(b) Any sums payable by Hollywood under this paragraph 5.2 may
be offset by Hollywood against the Market Value of any advertising, Content or
Ad Sales Commitment deliverable by CBS (the "CBS Deliverable(s)") pursuant to
this Agreement or the Ad Agreement (the "Indemnity Offset"). The amount or
Market Value of the CBS Deliverable concerned will be reduced by the proportion
thereof used for or contributed to the Indemnity Offset. For purposes of the
Indemnity Offset, Hollywood shall be obligated to exhaust the CBS Deliverables
as follows:
(i) The Market Value of any advertising or promotion,
deliverable pursuant to paragraph 2.1 of the Ad Agreement, shall be
fully exhausted before any other CBS Deliverable is used
for/contributed to the Indemnity Offset.
(ii) Provided the CBS Deliverable described in
section 5.2(b) above has been fully exhausted, the Market Value of any
Ceiling Amount, deliverable pursuant to subparagraph 2.4(a) of this
Agreement (or the Additional Promo Commitment, deliverable pursuant to
paragraph 2.4 of the Ad Agreement), shall be fully exhausted before any
other CBS Deliverable is used for/contributed to the Indemnity Offset.
(iii) The Market Value of any Ad Sales Option
deliverable pursuant to paragraph 2.3 of the Ad Agreement, may be used
for/contributed to the Indemnity Offset only if and when the
Deliverables described in sections 5.2(b)(i) and (ii) above have been
fully exhausted.
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For avoidance of doubt, CBS's obligation to deliver any CBS Deliverable,
pursuant to this Agreement or the Ad Agreement, shall be extinguished (or
reduced, as applicable) to the extent that such CBS Deliverable is used
for/contributed to any Indemnity Offset.
6. REMEDIES
6.1 CBS shall have the right to terminate this Agreement if any of the
following occurs:
(a) The Hollywood Site contains Content which, in CBS's
reasonable business judgment, violates Article I or Article III of the CBS
License Guidelines and Hollywood fails to remove such Content from the Hollywood
Site within ten (10) days after written notice of CBS's objection thereto
demanding the removal of such Content.
(b) Except as otherwise set forth in subparagraph 6.1(a)
above, either Hollywood or BEI (if applicable) breaches any material term or
condition of this Agreement, or any Collaboration Agreement and fails to: (i)
cure such breach within thirty (30) days after CBS's written notice of such
breach, or (ii) complete curing such breach within sixty (60) days following
CBS's notice of such breach; provided however that this clause (ii) shall only
apply to a default that is incapable of being cured in thirty (30) days. The
foregoing cure period will not apply: (x) solely with respect to this Agreement,
to a term or condition (in this Agreement) for which a specific cure period is
provided; or (y) to a breach incapable of being cured.
(c) BEI or Hollywood: (i) becomes insolvent or unable to pay
its debts as they mature or makes an assignment for the benefit of its
creditors; (ii) is the subject of a voluntary petition in bankruptcy or any
voluntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors, if such petition or proceeding is not
dismissed within sixty (60) days of filing; (iii) becomes the subject of any
involuntary petition in bankruptcy or any involuntary proceeding relating to
insolvency, receivership, liquidation, or composition for the benefit of
creditors, if such petition or proceeding is not dismissed within sixty (60)
days of filing; or (iv) is liquidated or dissolved.
(d) BEI issues to a Person any voting securities of BEI and:
(i) at the time of such issuance such Person is a CBS Competitor and (ii) as a
result of such issuance such Person beneficially owns or controls, directly or
indirectly, more than fifteen (15%) percent of the total voting power of BEI, in
the aggregate. For the purposes of this subparagraphs 6.1(d), 6.1(e) and 6.1(f):
(x) the term "beneficial ownership" shall have the meaning set forth in Section
13(d) of the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder; (y) the term "total voting power" shall mean at any
time, the total number of votes that may be cast in the election of directors of
BEI at any meeting of the holders of voting securities at such time for such
purpose; and (z) the term "voting securities" shall mean the Capital Stock and
any other securities issued by BEI having the power to vote in the election of
directors of BEI including, without limitation, any securities having such power
only upon the occurrence of a default or any other extraordinary contingency.
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(e) BEI issues to a Person any voting securities of BEI and:
(i) at the time of such issuance such Person is a CBS Competitor that
beneficially owns or controls, directly or indirectly, more than fifteen (15%)
percent of the total voting power of BEI and (ii) as a result of such issuance
the voting power of such Person is increased by any amount.
(f) BEI's board of directors consents to the acquisition of
voting securities by a CBS Competitor such that as a result of such consent, the
CBS Competitor beneficially owns or controls, directly or indirectly, more than
15% of the total voting power of BEI and at the time of such consent the Rights
Agreement by and between BEI and American Stock Transfer & Trust Company dated
August 23, 1996, as amended, is in full force and effect.
(g) Hollywood discontinues using the "Hollywood.com" mark (or
any substitute mark approved by CBS) and does not establish use of a substitute
mark reasonably acceptable to CBS within thirty (30) days after such
discontinuation.
(h) The Hollywood Site ceases to operate due to any
circumstance(s) (other than circumstances beyond Hollywood's reasonable control,
which circumstances simultaneously affect a substantial number of Web Sites on
the Internet) for: (i) a period of thirty (30) consecutive days; or (ii) a
period of one week at least two times in any six (6) month period.
CBS may exercise its right to terminate pursuant to this paragraph 6.1 by
sending Hollywood appropriate written notice. No exercise by CBS of any of its
rights under this Article 6 will limit CBS's remedies by reason of Hollywood's
or BEI's default, CBS's rights to exercise any other rights under this paragraph
6.1, or any of CBS's other rights.
7. GENERAL
7.1 Neither party may assign this Agreement, or their respective rights
and obligations hereunder, in whole or in part without the other party's prior
written consent. Any attempt to assign this Agreement without such consent shall
be void and of no effect ab initio. Notwithstanding the foregoing, CBS may
assign this Agreement or any of its rights and obligations hereunder to an
affiliate or to any entity controlling, controlled by or under common control
with, CBS, or to any entity that acquires CBS by purchase of stock or by merger
or otherwise, or by obtaining substantially all of CBS's assets (a "CBS
Assignee"), provided that any such CBS Assignee, or any division thereof,
thereafter succeeds to all of the rights and is subject to all of the
obligations of CBS under this Agreement.
7.2 Each party hereto irrevocably submits to the exclusive jurisdiction
of (a) the Supreme Court of the State of New York, New York County, and (b) the
United States District Court for the Southern District of New York, for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby or thereby. Each of CBS and Hollywood
agrees to commence any such action, suit or proceeding either in the United
States District Court for the Southern District of New York or if such suit,
action or other proceeding may not be brought in such court for jurisdictional
reasons, in the Supreme Court of the
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State of New York, New York County. Each of CBS and Hollywood further agrees
that service of any process, summons, notice or document by U.S. registered mail
to such party's respective address set forth above shall be effective service of
process for any action, suit or proceeding in New York with respect to any
matters to which it has submitted to jurisdiction in this paragraph 7.2. Each of
CBS and Hollywood irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or the transactions contemplated hereby and thereby in (i) the Supreme Court of
the State of New York, New York County, or (ii) the United States District Court
for the Southern District of New York, and hereby and thereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
7.3 If any provision of this Agreement (or any portion thereof) or the
application of any such provision (or any portion thereof) to any Person or
circumstance shall be held invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision hereof (or the remaining portion thereof)
or the application of such provision to any other Persons or circumstances.
7.4 All notices or other communications required or permitted to be
given hereunder shall be in writing and shall be delivered by hand or sent,
postage prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:
(a) if to Hollywood,
hollywood.com, Inc.
2255 Glades Road, Suite 237W
Boca Raton, Florida 33431
Attention: Mitchell Rubenstein, Chief Executive Officer
Fax: (561) 998-2974
with a copy to:
hollywood.com, Inc.
2255 Glades Road, Suite 237W
Boca Raton, Florida 33431
Attention: W. Robert Shearer, General Counsel
Fax: (561) 998-2974
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and a copy to:
hollywood.com, Inc.
1620 26th Street, Suite 370 South
Santa Monica, CA 90404
Attention: Scott Shrock, Vice President of Operations
Fax: (310) 447-2887
and a copy to:
Greenberg Traurig
200 Park Avenue
New York, New York 10166
Attention: Clifford E. Neimeth, Esq.
Fax: (212) 801-6400
(b) if to CBS:
CBS Corporation
51 West 52nd Street
New York, New York 10019
Attention: Chief Financial Officer
with a copy to:
CBS Corporation
51 West 52nd Street
New York, New York 10019
Attention: General Counsel
7.5 The parties to this Agreement are independent contractors. There is
no relationship of partnership, joint venture, employment, franchise, or agency
between the parties. Neither party shall have the power to bind the other or
incur obligations on the other's behalf without the other's prior written
consent.
7.6 No failure of either party to exercise or enforce any of its rights
under this Agreement shall act as a waiver of such right.
7.7 This Agreement, along with any Exhibits hereto, contains the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. Neither party shall be liable or bound to any
other party in any manner by any representations, warranties or covenants
relating to such subject matter except as specifically set forth herein.
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7.8 This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more such counterparts have been signed by each of the parties and
delivered to each of the other parties.
7.9 This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
7.10 This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York applicable to agreements made
and to be performed entirely within such State, without regard to the conflicts
of law principles of such State.
7.11 This Agreement is for the sole benefit of the parties hereto and
their permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the parties hereto and such assigns,
any legal or equitable rights hereunder.
7.12 The headings contained in this Agreement or in any Exhibit or
Schedule hereto are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. All Exhibits and Schedules
annexed hereto or referred to herein are hereby incorporated in and made a part
of this Agreement as if set forth in full herein. Any capitalized terms used in
any Schedule or Exhibit but not otherwise defined therein, shall have the
meaning as defined in this Agreement. When a reference is made in this Agreement
to a Section, Exhibit or Schedule, such reference shall be to a Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
HOLLYWOOD.COM, INC. CBS CORPORATION
/s/ W. Robert Shearer /s/ Fredric G. Reynolds
--------------------- -----------------------
W. Robert Shearer Fredric G. Reynolds
Senior Vice President Executive Vice President and
and General Counsel Chief Financial Officer
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EXHIBIT A
(Attached to and forming a part of the Agreement, made as
of January 3, 1999 between CBS Corporation and
hollywood.com, Inc.)
-------------------------------------------------------------------------------
CBS LICENSE GUIDELINES AND RESTRICTIONS
---------------------------------------
I. GENERAL
(a) The Hollywood Site shall not include the following Content (or
other materials regarding or containing the following): (i) cigarettes, (ii)
hard liquor, (iii) massage parlors, (iv) abortion clinics, (v) firearms and
ammunition, (vi) head shops, (vii) illegal (under federal, state, local or
foreign laws) lotteries, (viii) gambling (other than legal lotteries under
federal, state or local, local laws applicable to the venue concerned), (ix)
sexually explicit content, or (x) Content that denigrates a particular group
based on gender, race, creed, religion, sexual preference or handicap
("Proscribed Content"). The standard for Content deemed "sexually explicit"
shall be subject to the standards and practices applicable to the CBS Television
Network.
(b) The CBS License Guidelines may be amended or revised from time to
time by CBS, to reflect any changes in CBS's business, practice, procedures or
policies. CBS will notify Hollywood of such amendments/revisions.
II. CONTENT
(a) (i) Each party shall notify the other of all errors, omissions,
and/or inaccuracies in transmission or transcription of the CBS Content within
twenty-four (24) hours after it becomes aware thereof.
(ii) If Hollywood provides such notice, it shall specify to
CBS what action, if any, it has taken to correct the error, omission
and/or inaccuracy.
(iii) If CBS provides such a notice, or receives such notice,
it may specify the action to be taken by Hollywood to correct the
error, omission and/or inaccuracy or resubmit such Content.
(b) All CBS Content on the Hollywood Site shall be subject to
restrictions and instructions disclosed by CBS at any time.
(c) CBS shall have the right to demand the removal from the Hollywood
Site of any Content which in CBS's reasonable business judgment conflicts with,
interferes with or is detrimental to CBS's interests, reputation or business or
which might subject CBS to unfavorable regulatory action, violate any law,
infringe the rights of any Person, or subject CBS to liability for any reason.
Hollywood shall thereafter remove the objected to Content as soon as technically
feasible, but in no event later than ten (10) days (or less than said ten days,
if CBS is or would be
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subject to potential liability , it being understood that: (i) in each instance,
CBS shall notify Hollywood of the potential liability concerned; and (ii)
Hollywood shall use its best efforts to remove the Content concerned as soon as
possible, but in any event within three (3) business days) after written notice
from CBS demanding the removal of such Content, subject to the next sentence.
CBS shall have no right to demand the removal of any Content which is a hard
news item of a nature normally reported by other news organizations of a
character and stature equal to Hollywood or an editorial item clearly marked as
such, provided, however, that such Content does not/will not subject CBS to
unfavorable regulatory action, violate any law, infringe the rights of any
Person, or subject CBS to liability for any reason. For purposes of this
subparagraph II.(c) (and in addition to the terms and conditions set forth in
paragraph 7.4) notice shall be deemed given when sent by facsimile transmission
to the fax number concerned in paragraph 7.4.
(d) Hollywood shall abide by responsible journalistic standards. No CBS
Content shall be used and/or displayed out of context. Hollywood shall not
distort or misrepresent any events, opinions or statements contained in the CBS
Content received by Hollywood.
III. CROSS-LINKS
(a) Hollywood shall not establish any links from the Hollywood Site to
any Internet Site containing Proscribed Content. Notwithstanding anything
contained herein to the contrary, Hollywood shall not be deemed in breach of
this Agreement if Hollywood links to an Internet web site, which Internet web
site, in turn, includes advertising for, or links to, an independent web site
(the "Indirectly Linked Site") displaying the above Proscribed Content, provided
that Hollywood derives no revenues or other financial benefit from such
Indirectly Linked Site or Proscribed Content. For avoidance of doubt, "financial
benefit" includes the realization or accrual of any revenue from page views or
reach of such Indirectly Linked, Site, or advertisements displayed on web site
pages of such Indirectly Linked Site.
(b) Hollywood shall not conduct any cross promotions between the
Hollywood Site and any Internet Site which exhibits Proscribed Content.
IV. OWNERSHIP
(a) Hollywood shall place an appropriate copyright notice to be
furnished by CBS on all CBS Content Pages of the Hollywood Site.
(b) Hollywood and CBS shall mutually develop the procedures for placing
any third party copyright notice on any CBS Content Page.
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