License Agreement - USA Networks and Titan Sports Inc.
AGREEMENT, made as of the 2nd day of July 1998, between USA NETWORKS
("USA") and TITAN SPORTS, INC. ("Contractor") with respect to the production of
and grant of certain rights in three series (the "Series") individually and
collectively, (the "Series") of original television programs (the "Programs")
presently entitled "WWF Raw/WWF War Zone" ("Raw"), "WWF Live Wire" ("Live
Wire"), and "WWF Superstars" ("Superstars").
1. (a) Contractor shall produce and deliver to USA a specified
number of Programs of each Series during the Term (as defined in Section 5(a)
below) hereof, as determined in accordance with Section 8 below. The Raw
Programs either shall be live (i.e., as the matches occur in an arena) or taped,
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as determined in accordance with Section 1(b)(ii) below. The Live Wire Programs
and the Superstars Programs shall be taped. Contractor shall deliver each taped
Program to USA at its network control center in Jersey City, New Jersey (or at
such other reasonable location as USA may designate) at least four (4) calendar
days prior to the scheduled carriage date thereof.
(b) The following shall apply to Programs for the Raw Series:
(i) Each Program shall have an aggregate running time of two
hours (2:00:00), including crystal-black slugs for the insertion of twenty-eight
minutes and fifty seconds (28:50) of commercial and promotional announcements,
billboards and network identifications, in such format as USA shall determine.
Each Program shall consist of either two (2) consecutive hours, or two (2)
distinct, but connected, one (1) hours, as Contractor and USA mutually shall
determine. Each taped Program will consist of arena matches, interviews and
other entertainment material, as Contractor shall determine (subject to the
provisions of Section
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4(b) below), consistent with the program style and quality delivered by
Contractor to USA for similar programs during the first calendar quarter of
1998.
(ii) Subject to Section 8(a) below, the Programs shall be
delivered to enable USA to distribute one (1) new Program per week during the
Term. Contractor shall deliver live Raw Programs at a rate of at least twenty-
six (26) per each twelve-month period during the Term (September 28 - September
27). USA and Contractor, in good faith, mutually shall determine the schedule by
which live Programs will be delivered.
(c) The following shall apply to Programs for the Live Wire Series
and the Superstars Series:
(i) Each Program shall have an aggregate running time of sixty
minutes (60:00), including crystal-black slugs for the insertion of thirteen
minutes and forty seconds (13:40) of commercial and promotional announcements,
billboards and network identifications, in such format as USA shall determine,
and will consist of a content format to be mutually agreed upon by Contractor
and USA in good faith. The program style, quality, and content shall be similar
to that for the programs of such series delivered by Contractor to USA during
the first calendar quarter of 1998.
(ii) The Programs shall be delivered to enable USA to
distribute one (1) new Program per week of each Series during the Term.
(d) With respect to all three Series, the time in each Program not
reserved for commercial and promotional announcements, network identifications
and billboards shall be devoted entirely to program content and shall not
include any promotional consideration units.
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2. During the Term, USA shall have the exclusive right to distribute
the Programs for all three Series within the United States, its territories and
possessions (including Puerto Rico) and all U.S. Armed Forces Bases everywhere
throughout the world (the "Territory"), including the right to distribute the
Programs and each Series over the USA Network program service, in both the
English and Spanish languages (Spanish language as part of a SAP simultaneous
feed), to each of its respective affiliates for transmission by such affiliates.
USA's affiliates may include CATV, MDS, SMATV, MATV, DBS, TVRO dishes or similar
services. USA may record any Program and may use such recordings, or any
portion(s) thereof, for the following purposes: (a) during the Term, for file,
reference, audition and sales purposes and, in connection with USA's carriage of
the Programs only, for publicity purposes, (b) during the Term, to broadcast or
cablecast and authorize others to broadcast or cablecast excerpts (of up to 2
minutes duration) of such recordings at such times and at such places and in
such manner as USA may elect, (c) during the Term, in connection with the
advertising and publicizing of any Program or Series on, and as part of, USA's
programming, and (d) during the Term, in connection with the carriages
authorized in this Agreement.
3. (a) During the Term, Contractor shall not carry or authorize the
carriage of any Program or Series in any language by any other means whatsoever
(including, without limitation, via personal computers, video-on-demand,
pay-per-view, pay or basic cable, "superstations," conventional over-the-air
television or locally-originated cable channels) in the Territory, without the
prior written consent of USA. In addition, Contractor represents and warrants
that no matches included in the taped Raw Programs shall have appeared earlier
in any other program intended for reception by home television sets or personal
computers in the
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Territory (other than in pay-per-view events and in programs on ABC, CBS, NBC or
Fox). Any matches premiering in any Raw Program which later appear on other
programs intended for reception by home television sets or personal computers in
the Territory shall be accompanied by a courtesy credit to both USA and the
Program.
(b) Contractor agrees that it shall not authorize or produce any
other series of wrestling programs to be carried by any other "basic" cable
program service or "superstation" within the Territory during the Term, and it
shall not authorize any other wrestling program specials or action programs or
series produced by Contractor to be carried by any other "basic" cable program
service or "superstation" within the Territory during the Term without first
giving to USA a right of first refusal on the same terms as set forth in Section
5(b) below.
4. (a) Each Program and Series shall conform to the reasonable
program practices and standards of the USA Network program service from time to
time established, including, without limitation, its standards against excessive
violence. USA shall have the right, in its sole discretion, to edit, "lexicon"
and/or delete any Program, or any portions thereof, (i) to ensure that such
Program meets such reasonable program practices and standards, (ii) to ensure
that such Program meets USA Network's commercial format and/or (iii) to enable
USA to insert the commercial, public service and promotional announcements as
provided for herein. Contractor shall reimburse USA for the cost of any editing
required pursuant to (i) above. In no event, however, shall any credits in the
Programs be deleted or changed (provided they are of customary length),
including, without limitation, any credits of Contractor or copyright notices
(but USA may reduce the end credits and/or copyright notices so that they can be
displayed on a split screen, provided they are legible). USA also shall have the
right to superimpose a
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transparent logo of the USA Network program service throughout each such
carriage. In addition, if Contractor does not do so, USA may close caption the
Programs, at its cost.
(b) Notwithstanding anything to the contrary contained herein, USA
shall be afforded the opportunity to review each Program delivered hereunder. In
the event that USA, in the exercise of its complete and reasonable discretion,
determines that any Program (or element(s) thereof) is unacceptable for carriage
over the USA Network program service, for any reasonable reason whatsoever,
including, but not limited to, the failure of such Program (or element(s)
thereof) to meet USA Network's reasonable program practices and standards, then,
as soon as practicable following receipt of such Program, USA may reject either
such element(s) or the Program, in its entirety. If USA so rejects a Program (or
element(s) thereof), Contractor shall provide a suitable Program (or substitute
element(s) thereof) acceptable to USA within two (2) business days following
such rejection. In its notice of rejection, USA may request that the originally
delivered Program be provided, deleting those portions of the Program which USA
determined were unacceptable. Without reducing Contractor's obligations
hereunder, USA also shall have the right to edit any Program as provided in
Section 4(a) above.
(c) The following shall apply to the Raw Programs:
(i) In connection with each live Program, Contractor shall be
responsible for the complete production of both the live event included within
the Program (the "Event") and the Program, including all costs related to the
staging and production of the Event and the Program. Such production shall be of
a quality at least equal to the Raw programs of the first calendar quarter of
1998. In addition, Contractor shall engage a producer, director, all the
announcers and color commentators and all other appropriate production,
technical and on-air
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personnel for the Event and the Program. The selection of each such announcer
and color commentator shall be subject to the approval of USA, which approval
shall not be unreasonably withheld. USA, at its sole expense, may provide a
coordinating producer at the Event, in the exercise of its discretion.
Contractor shall supply, at no cost to USA, a business telephone in its
production truck at the Event staffed by an individual immediately prior to and
during any live feed who will coordinate the feed of such Event and Program with
USA. Contractor shall consult with USA at regular intervals concerning the
production of the Event and the Program, and USA shall have the right of prior
approval with respect to the material elements, format and content of the Event
and the Program; provided, however, that USA agrees that It shall not
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unreasonably withhold its approval of any of the foregoing. Contractor
represents and warrants that USA shall incur no costs associated with the
production of the Event, including, without limitation, any of the foregoing,
except with respect to the coordinating producer, if any, provided by USA.
(ii) Contractor shall be responsible for, and shall pay all
costs associated with, the delivery of a live, quality audiovisual signal of the
Event by satellite to USA's network control center. In the event that any of
such costs are paid directly by USA, Contractor promptly shall reimburse USA
therefor upon receipt of appropriate invoices. Such signal shall be delivered so
as to enable USA to carry the live Program(s) at the scheduled time(s).
5. (a) The term hereof shall commence on September 28, 1998 and
shall end on September 23, 2001 (the "Term"). Notwithstanding the foregoing,
either party hereto may terminate this Agreement as of September 24, 2000, for
any reason whatsoever, by written notice to the other, delivered on or before
November 30, 1999.
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(b) Provided there has been no early termination as set forth in
Section 5(a) above, USA and Contractor shall negotiate exclusively with one
another for a period of forty-five (45) days commencing November 30, 2000 (or
November 30, 1999 if notice of termination is given pursuant to Section 5(a)
above), with respect to an extension of this Agreement. In no event shall
Contractor negotiate with any third party with respect to any of the three
Series prior to the end of such exclusive negotiation period. In the event that
the parties are unable to reach a final agreement during such period, Contractor
may enter into negotiations with third parties with respect to any or all of the
three Series. In no event, however, shall Contractor enter into any arrangement,
understanding or agreement with any such third party with respect to any or all
of the three Series without first giving to USA a right of first refusal,
exercisable within ten (10) business days following receipt by USA of written
notice detailing the terms of the third party offer(s), as to any such offer(s)
which Contractor intends to accept. If USA does not meet such offer(s),
Contractor will not enter into an Agreement with such third party on terms less
favorable to it than those contained in the offer(s) without again affording USA
a first refusal as above provided.
6. As partial consideration for the rights contained herein, and
provided Contractor has fulfilled all of its obligations contained herein, USA
shall make payments to Contractor as follows:
(a) With respect to the Raw Series, the payment shall be in the
amount of ***** for each Program carried between September 28, 1998 and
September 26, 1999, ***** for each Program carried between September 27, 1999
and September 24, 2000, and ***** for each Program carried between September 25,
2000 and September 23, 2001.
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(b) With respect to the Live Wire Series and the Superstars Series,
the payment shall be ***** for each Program carried between September 28, 1998
and September 26, 1999, ***** for each Program carried between September 27,
1999 and September 24, 2000, and ***** for each Program carried between
September 25, 2000 and September 23, 2001.
(c) USA shall make all payments to Contractor required pursuant to
Sections 6(a) and 6(b) above within ten (10) days following the last day of the
month during which the particular Programs were carried by USA, based on the
per-Program fee for each Series. No payment shall be required for any Programs
preempted and not rescheduled.
7. (a) As further consideration for the rights contained herein,
Contractor shall have the right, subject to the conditions contained in Sections
7(b) through 7(h) below, to sell or use the following amount of commercial
advertising time within the carriages of each Program within the Territory:
(i) With respect to the Raw Series, Contractor shall be entitled
to sell or use ***** of commercial advertising time in each of the Programs
provided hereunder. USA shall have the right to sell or use ***** of commercial
advertising time in each Program; ***** of it which may use for the sale of
commercial advertising time, and the remaining ***** of which it shall use only
for billboards, network identifications, and/or to promote the USA Network
program service, or programs on such service or other program services owned,
operated or controlled by USA. In addition to the commercial advertising time
set forth above, ***** of time in each Program also shall be set aside so that
USA may make such time available to the distributees of the USA Network program
service on which such Programs are being carried.
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(ii) With respect to the Live Wire Series and Superstars Series,
Contractor shall be entitled to sell or use ***** of commercial advertising time
in each Program. USA shall have the right to sell or use ***** of commercial
advertising time in each Program; ***** of which it may use for the sale of
commercial advertising time, and the remaining ***** of which it shall use only
for billboards, network identifications, and/or to promote the USA Network
program service, or programs on such service or other program service owned,
operated or controlled by USA. In addition to the commercial advertising time
set forth above, ***** of commercial advertising time in each Program also shall
be set aside so that USA may make such time available to the distributees of the
USA Network program service on which such Programs are being carried.
(b) In each twelve-month period of the Term (September 30 - September
29), Contractor agrees to pay USA an amount equal to the greater of (i) ***** of
all "net advertising revenues" received by Contractor from its sale of
commercial advertising time in Programs carried during such twelve-month period,
and (ii) the amount of ***** with respect to the September 28, 1998 - September
26, 1999 period; the amount of ***** with respect to the September 27, 1999 -
September 24, 2000 period; and the amount of ***** with respect to the September
25, 2000 - September 23, 2001 period. Contractor shall pay the amounts set forth
in (ii) above in equal installments, every other month, on or before the 15th
day of each month during the relevant twelve-month period, commencing with a
payment due on or before December 15, 1998. Within forty-five (45) days after
the end of each such twelve-month period, Contractor shall submit to USA a
detailed statement setting forth its calculation of "net advertising revenues"
for such period, including, without limitation, any allocations from "joint
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sales" made related thereto. Such statement shall be accompanied by the payment
of additional amounts which may be owing to USA pursuant to (i) above, if any.
For purposes of this Agreement, the term "net advertising revenues" shall mean
all gross advertising sales in the Series by Contractor, less only advertising
agency commissions. To the extent that Contractor sells commercial advertising
in any of the Programs in conjunction with other programs not covered by this
Agreement ("joint sales"), then it shall allocate the net advertising revenues
generated from such joint sales among the Programs hereunder and such other
programs, based upon the fair market value determined on a CPM (cost per
thousand) basis among all the Programs and such other programs. Contractor
agrees to keep true and accurate books and records of all amounts pertaining to
its commercial advertising sales hereunder and its calculation of "net
advertising revenues." Within sixty (60) days after its receipt of any statement
hereunder, USA, or its independent public accountants, shall have the right, to
audit and make extracts of such books and records of Contractor, at USA's
expense, wherever such books and records may be located, but only insofar as
such books and records relate to the calculation of "net advertising revenues"
hereunder. Any such audit shall take place upon not less than ten (10) days
advance written notice, during normal business hours on normal business days.
If, after such audit, USA disputes Contractor's calculation of "net advertising
revenues," it shall promptly so notify Contractor, in writing, and the parties
then shall have ten (10) business days in which to resolve the dispute. If they
are unable to do so, the dispute shall be submitted to binding arbitration in
New York City, in accordance with the then existing rules of the American
Arbitration Association. In such event, the parties hereto mutually shall select
a neutral arbitrator from the American Arbitration Association to hear such
dispute. If within ten (10) business days
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the parties fail to mutually select an arbitrator, then each party shall select
an arbitrator from the American Arbitration Association for the purpose of
selecting a third arbitrator. The two arbitrators shall have ten (10) business
days to select the third arbitrator. Judgment upon any award rendered by the
arbitrator(s) may be may be entered by any court having jurisdiction thereof.
Each party shall bear its own costs associated with the arbitration hearing.
(c) In the event that Contractor is unable to sell or use any or all
of the commercial advertising time allotted to it for any Program, or fails to
meet the delivery schedule set forth in Section 7(g) below, then (i) USA may use
such time as it determines and shall not be liable to Contractor for any
compensation received therefor, and (ii) Contractor may not carry forward or
accrue such unused or unsold commercial advertising time.
(d) All sales of commercial advertising time by Contractor shall be
subject to the prior written approval of USA, such approval not to be
unreasonably withheld. Contractor shall notify and provide USA's Account
Executive-Direct Response with a 3/4" tape of any direct response or per-inquiry
advertisements Contractor intends to use at least ten (10) days prior to any
intended use.
(e) USA agrees not to sell any commercial advertising time during any
Program for live wrestling related gate events, wrestling related pay-per-views,
wrestling related television shows, products directly related to wrestling or
any other wrestling items competitive with World Wrestling Federation products,
including without limitation, any such items related in any manner to World
Championship Wrestling, New World Order, or any subsidiary or affiliate thereof
or any other wrestling entity owned or operated by Time Warner, Inc., Turner
Broadcasting System, Inc. or any subsidiary or affiliate thereof.
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(f) Neither party hereunder shall grant exclusivity to any purchaser
of commercial advertising time in any of the three Series without first
receiving the other party's prior written consent thereto.
(g) Contractor shall supply to USA, at its executive offices in New
York, New York, or at such other reasonable location as USA may designate, the
commercial advertising material which it intends to use pursuant to this Section
7, at least five (5) business days prior to the date of the carriage of the
Program during which such commercial advertising material is to be carried. All
commercial advertising material to be supplied by Contractor shall be delivered
to USA on high-band master 1" Form C videotape.
(h) Neither Contractor nor USA shall provide any commercial or other
announcements which do not comply with any governmental codes, rules or
regulations, or, without limitation, which advertise cigarettes or liquor
(excluding beer).
8. (a) Subject to Section 8(b) below, USA represents and warrants
that it shall carry one Live Wire Program and one Superstars Program every week
during the Term. Subject to Section 8(b) below, USA further represents and
warrants that it will carry one Raw Program at least fifty (50) out of every
fifty-two (52) weeks of each season (September 28 - September 27) during the
Term. It is the present intent of USA, subject to occasional scheduling
conflicts which may arise, to schedule its carriage of the Series as follows:
(i) The carriages of the Raw Programs presently are scheduled to
commence at 9:00 PM, Eastern and Pacific time, on Mondays. USA, in its sole
discretion, without any approval from Contractor (but subject to the notice
provisions below), may reschedule its carriage of these Programs, provided that
the starting time is no earlier than 7:00
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PM nor later than 9:30 PM, on such night of the week as USA, in it sole
discretion, determines. Notwithstanding the foregoing, Contractor acknowledges
that one Raw Program each February, and two (2) Raw Programs each
August/September during the U.S. Open tennis tournament, shall be preempted from
their regularly initially scheduled time period and may be carried during a
comparable time period on another day of the week. For these purposes, each
rescheduled carriage may commence at any time between 7:00 PM and 11:00 PM, on
such night as USA shall select, and shall be deemed to have been carried in a
comparable time period and shall not constitute a preemption pursuant to
Sections 8 (b) and/or 8(d) below. USA shall give Contractor at least thirty (30)
days notice of the date and time to which each such carriage has been
rescheduled. In addition, USA shall not change the regularly scheduled day or
time of its carriage of the Raw Programs as set forth above, without giving
Contractor at least seventy-five (75) days prior notice thereof. However, in the
event USA gives Contractor only sixty (60) days actual prior notice thereof,
Contractor shall use reasonable efforts to accommodate such change, subject to
its own arena scheduling conflicts.
(ii) The carriages of the Live Wire Programs presently are
scheduled to commence between the hours of 10:00 AM and 11:00 AM, Eastern and
Pacific time, on Saturdays. USA, in its sole discretion, without any approval
from Contractor (but subject to the notice provision below), may reschedule its
carriage of these Programs, provided that the starting time is no earlier than
10:00 AM nor later than 2:00 PM, Saturdays. Notwithstanding the foregoing,
Contractor acknowledges that the Live Wire Program on December 25, 1999 and the
Live Wire Program on January 1, 2000 shall be preempted from its initially
scheduled time period and may be carried at any time on the same day, commencing
at any time up to 11:30 PM
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that night. In addition, USA shall not change the regularly scheduled day or
time of its carriage of the Live Wire Programs as set forth above, without
giving Contractor at least thirty (30) days prior notice thereof.
(iii) The carriages of the Superstars Programs presently are
scheduled to commence between the hours of 11:00 AM and 12:00 Noon, Eastern and
Pacific time, on Sundays. USA, in its sole discretion, without any approval from
Contractor, may reschedule its carriage of these Programs, provided that the
starting time is no earlier than 10:00 AM nor later than 2:00 PM, Saturdays or
Sundays. In addition, USA shall not change the regularly scheduled day or time
of its carriage of the Superstars Programs, without giving Contractor at least
thirty (30) days prior notice thereof.
(b) The parties hereto acknowledge that from time to time, USA may
preempt its scheduled carriage of any Program. USA agrees, however, that it will
not preempt its scheduled carriage of any Series more than two (2) times during
any calendar quarter during the Term. If USA desires to reschedule its carriage
of any preempted Program during the calendar week of such preemption, Contractor
shall deliver a Program of the appropriate Series pursuant to the terms and
conditions of this Agreement. USA will provide Contractor with at least thirty
(30) days prior notice of its desire to receive a Program of the applicable
Series for any such preemption and the exact date and time it will carry the
rescheduled Program.
(c) Contractor shall deliver an original Program, in accordance with
the terms of this Agreement, so as to enable USA to carry one (1) original
Program in each scheduled time period. Each original Raw Program shall be
accompanied by a Spanish language version. The Spanish language versions shall
be provided by Contractor at no additional charge to USA. USA
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also shall have the right, at its own cost, to create its own Spanish subtitled
version of the Live Wire and Superstars Programs, such version subject to
Contractor's approval.
(d) In the event that USA preempts and fails to reschedule any
Program pursuant to Section 8(b) above, the payment to be made by Contractor
pursuant to Section 7(b)(ii) above for the applicable twelve-month period shall
be reduced by an amount determined as follows: (i) for the September 28, 1998 -
September 26, 1999 period, (x) the amount of ***** for any Raw Program
preempted, and (y) the amount of ***** for any Live Wire Program or Superstars
Program preempted; (ii) for the September 27, 1999 - September 24, 2000 period,
(x) the amount of ***** for any Raw Program preempted, and (y) the amount of
***** for any Live Wire Program or Superstars Program preempted; and (iii) for
the September 25, 2000 - September 23, 2001 period, (x) the amount of ***** for
any Raw Program preempted, and (y) the amount of ***** for any Live Wire Program
or Superstars Program preempted. In the event USA reschedules a preempted Raw
Program, so that the carriage of such rescheduled Raw Program commences at 11:00
PM or later (but specifically not including the rescheduled Raw Programs
pursuant to Section 8(a)(i) above), the payment to be made by Contractor
pursuant to Section 7(b)(ii) above for the applicable twelve-month period shall
be reduced by the amount of *****. All payment reductions hereunder shall be
made from the installment payment immediately following the affected Program.
(e) Contractor acknowledges that USA provides its USA Network program
service via separate transponders designed to serve separate time zones in the
Territory and that affiliates of such program service outside the continental
United States may further delay their transmissions of such service. It is
agreed that all corresponding transmissions of each Program
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via such separate transponders or other delivery means shall together constitute
one transmission thereof. In addition, in the future, USA may provide its USA
Network program service in the Territory in different channel positions, but
with similar programming at different times ("multiplex services"). As a result,
all corresponding transmissions of each Program via multiple transmissions or on
multiplex services together shall constitute one transmission of such Program.
9. (a) Delivery of each taped Program hereunder shall consist of
either (i) one high-band master 1" Form C, or D-3 digital, color-balanced
composite videotape, fully-edited with audio in perfect synchronization with the
photographic action, close-captioned, with Spanish language commentary on a
separate audio track for each Program of the Raw Series, meeting USA Network's
technical standards, complete and suitable in all respects for cablecasting and
broadcasting, fully-titled with integrated commercial billboards and conformed
to the commercial format as approved by USA, or (ii) an electronic feed
(satellite or fiber) meeting comparable specifications, as USA may reasonably
determine to be acceptable.
(b) Contractor shall use reasonable efforts to assist USA in
promoting, advertising and marketing the Programs and each Series.
(c) USA agrees to include in the USA Network program service during
each Thursday - Monday of the Term at least the following spots promoting one or
more of the Series hereunder: (i) ***** per each of such days in the early
fringe daypart (4:00 PM - 7:00 PM), (ii) ***** per each of such days in the
primetime daypart (7:00 PM - 11:00 PM), and (iii) ***** per each of such days in
the late night daypart (11 :00 PM - 2:00 AM). The exact length of each spot to
be determined by USA, but in no event less than ***** each.
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10. Contractor shall be fully responsible for, and pay all costs incurred
in connection with, the complete production and delivery of each Program
including, without limitation, any and all payments to persons performing
services in connection with the Programs, the wrestlers, managers, ring
officials, and the production, direction, recording and editing of the Programs.
Contractor shall obtain rights sufficient to allow it to fully perform its
obligations hereunder.
11. Contractor warrants and represents that:
(a) It owns or controls the entire and exclusive distribution and
exhibition rights in and to the Programs and the three Series throughout the
Territory; it has the fully legal right, power and authority to enter into and
perform this Agreement and to grant the rights to USA contained herein,
including, without limitation, the right to broadcast and cablecast the Programs
and each Series as herein provided; to the best of Contractor's knowledge, there
is no outstanding contract, commitment, arrangement or legal impediment of any
kind which is in conflict with this Agreement or which might in any way limit,
restrict or impair the rights granted to USA hereunder; and it will not, so long
as this Agreement remains in effect, grant, or purport to grant, to any person,
rights of any kind in the Programs or the three Series, the exercise of which
will derogate from, or be inconsistent with, the rights granted to USA
hereunder;
(b) The Programs and the three Series licensed herein do not, and the
exercise by USA or by any party claiming under or through USA of the rights
herein granted will not, infringe upon the common law rights, or the copyright,
or the literary, dramatic, music, motion picture, or patent rights, or the
trademark or trade name of any person, and do not and will not violate the
private, civil or property rights, or the right of privacy, of any person;
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*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
(c) In connection with each Program produced hereunder, USA, any
affiliate to which the Program is distributed by USA, each sponsor and such
sponsor's advertising agency and each USA licensee, shall have the right and may
grant to others the right to reproduce, print, publish or disseminate in any
medium, the portrait, picture, name and likeness, and voice of, and biographical
material concerning, each person appearing in such Program and all other persons
connected with the production of the Programs, the title of each Series and the
Programs, any music or excerpts thereof (whether original or recomposed) in each
Program, Contractor's name and oral and/or visual portions of each Program, and
any artwork or design created by or for Contractor in connection with the
production of each Program, solely as news or information, for the purposes of
trade or for advertising purposes; provided, however, no direct endorsement by
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any such person of any product or service shall be used without such person's
consent;
(d) The music contained in each Program shall be (i) in the public
domain or (ii) if not in the public domain, Contractor shall have obtained, at
no additional cost to USA, both music synchronization and music performance
rights sufficient for USA's broadcasts and cablecasts authorized hereunder.
Contractor shall provide the appropriate music rights societies with appropriate
cue sheets as to all music included in the Programs;
(e) In the production and making of the Programs, all applicable
collective bargaining agreements and all applicable rules and regulations of any
unions having jurisdiction in the premises were complied with; all persons who
performed services in or in connection with the Programs received full payment
with respect thereto and with respect to the carriage of the Programs and the
three Series provided in this Agreement; and no fee, compensation or any other
payment whatsoever will ever be required to be made by USA to any producer,
director, actor,
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
writer or any other person who performed services in or in connection with the
Programs or any of the three Series by reason of the use thereof as provided in
this Agreement; and
(f) It will obtain, and maintain in effect throughout the Term, at no
cost to USA, a policy of television producer's liability insurance applicable to
all broadcasts or cablecasts hereunder having limits of *****; such insurance
has standard coverage, including, but not limited to, coverage with respect to
defamation, infringement of common law or statutory copyright, infringement of
rights in material to be broadcast or cablecast or in the manner of presentation
thereof, infringement of privacy rights and unauthorized use of material in
Programs hereunder; such policy includes a provision requiring the insurance
company to give USA prompt notice of any revision, modification or cancellation
thereof; USA is an additional insured in such policy; and such policy contains
an endorsement deleting the condition thereof entitled "Other Insurance" as to
any insurance in force for or in the name of USA.
The breach by Contractor of any of the foregoing warranties and
representations shall constitute a material breach for purposes of this
Agreement.
12. USA warrants and represents that:
(a) Subject to the provisions hereof, it shall broadcast or cablecast
all Programs as delivered; and
(b) It is free to enter into and fully perform the terms and
conditions of this Agreement.
13. (a) At all times, Contractor shall indemnify and hold harmless USA,
the sponsors of each Program or Series, their advertising agencies, any
affiliates over the facilities of which the Programs are broadcast or cablecast,
any licensee of USA and any person, firm or
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
corporation making use thereof, from and against any and all claims, damages,
liabilities, costs and expenses, including reasonable counsel fees, arising out
of or based upon:
(i) the broadcast or cablecast of any Program or Series;
(ii) the use of any materials furnished by Contractor
hereunder, including commercial announcements;
(iii) any acts done or words spoken by Contractor and/or any
person whose services are furnished by Contractor hereunder in connection with
the production, rehearsal, broadcast or cablecast of any of the Programs; or
(iv) any breach by Contractor of any warranty, representation,
or agreement made by Contractor herein.
(b) At all times, USA shall indemnify and hold harmless Contractor,
its parent and affiliated companies and its, and their, respective, agents,
employees, licensees, contractors, sponsors, and agencies of the Programs, from
and against any and all claims, damages, liabilities, costs and expenses,
including reasonable counsel fees, arising out of or based upon:
(i) any breach by USA of any warranty, representation or
agreement made by USA herein; or
(ii) the use of any materials inserted by USA in any of the
Programs, including commercial announcements sold by USA.
(c) The indemnifications provided in Section 13(a) and Section 13(b)
above shall be subject to the condition that the party seeking indemnification
shall notify the indemnifying party promptly of any claim or litigation for
which indemnification is sought. The indemnifying party, at its option, may
assume the defense of any such claim or litigation. If the
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
indemnifying party assumes the defense of any such claim or litigation, its
obligation with respect thereto shall be limited to holding the indemnified
party harmless from and against any loss, damage or cost caused by or arising
out of any judgment or settlement approved by the indemnifying party in
connection therewith.
(d) The party seeking indemnification shall cooperate fully with the
reasonable requests of the indemnifying party in its participation in, and
control of, any compromise, settlement, litigation or other resolution or
disposition of any such claim or litigation.
14. If, by reason of fire, flood, epidemic, earthquake, explosion,
accident, labor dispute or strike, act of God or public enemy, riot or civil
disturbance, war (declared or undeclared) or armed conflict, inability to obtain
personnel or materials or facilities, delays of common carriers, the failure of
satellite, transponder or technical facilities, any municipal ordinance, any
state or federal law, governmental order or regulation, or any thing or
occurrence not within the parties' control (all such events shall hereinafter be
collectively called "Force Majeure Events"), the commencement, delivery,
broadcast or cablecast of any Program or Series is materially delayed, hampered,
interrupted or interfered with, neither USA nor Contractor shall have any
liability or obligation to the other party hereunder with respect to the Program
so affected, and the inability of USA to carry the affected Program shall not
constitute a preemption pursuant to Section 8(b) above. If more than three (3)
consecutive Programs of any Series are canceled or unable to be carried, at any
time thereafter until carriage of such Series has resumed, USA may terminate
this Agreement upon written notice to Contractor as to any or all of the Series
(at USA's option) and neither party shall have any further obligations to the
other party
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
hereunder with respect to such Series, except with respect to the Programs of
such Series theretofore delivered.
15. (a) Without prejudice to whatever other rights USA may have,
at USA's option, this Agreement may be terminated upon ten (10) days' written
notice to Contractor, at any time after any of the following occurrences:
(i) The insolvency, voluntary or involuntary bankruptcy,
judicial liquidation or reorganization petition, appointment of a receiver or
corporate dissolution by, for or on behalf of Contractor; or
(ii) Any material breach of any one or more of the
representations or warranties or material conditions of the Agreement, which
breach is not cured within ten (10) days after receipt by Contractor of written
notice from USA; provided, however, that if Contractor is unable to cure, due to
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the nature of the failure, USA may not terminate if, within such ten (10) day
period, Contractor has paid or indemnified USA for any loss resulting from such
failure and has taken reasonable steps to prevent a recurrence of such failure;
or
(iii) Actions by Contractor during the term of this Agreement
which, in USA's reasonable judgment, would subject USA to liability or continued
adverse publicity if the Agreement were to continue in effect; provided,
--------
however, that USA shall provide Contractor with specific written notice of the
-------
actions of Contractor giving rise to consideration of termination of this
Agreement and shall discuss such matter in good faith with Contractor.
(b) Without prejudice to whatever other rights Contractor may have,
at Contractor's option, this Agreement may be terminated upon ten (10) days'
written notice to USA, at any time after any of the following occurrences:
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
(i) The insolvency, voluntary or involuntary bankruptcy,
judicial liquidation or reorganization petition, appointment of a receiver or
corporate dissolution by, for or on behalf of USA; or
(ii) Any material breach of any one or more of the
representations or warranties or material terms and conditions of this
Agreement, which breach is not cured within ten (10) days after receipt by USA
of written notice from Contractor; provided, however, that if USA is unable to
-------- -------
cure, due to the nature of the failure, Contractor may not terminate if, within
such ten (10) day period, USA has paid or indemnified Contractor for any loss
resulting from such failure and has taken reasonable steps to prevent a
recurrence of such failure.
16. The parties hereto expressly agree that the relationship between
them hereunder is that of two principals dealing with each other as independent
contractors, subject to the terms and conditions of this Agreement. At no time,
past, present or future, shall the relationship of the parties herein be deemed
or intended to constitute an agency, partnership, joint venture, or a
collaboration for the purposes of sharing any profits or ownership in common.
Neither party shall have the right, power or authority at any time to act on
behalf of, or represent, the other party, but each party hereto shall be
separately and entirely liable for its own respective debts in all respects.
17. Contractor shall not assign its rights or obligations under this
Agreement without the written consent of USA; provided, however, that Contractor
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may assign such rights and obligations to a wholly-owned subsidiary of
Contractor without obtaining USA's prior written consent.
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
18. Any and all notices, communications and demands required or
desired to be given hereunder by either party hereto shall be in writing and
shall be validly given or made if served either personally or if deposited in
the United States mail, certified or registered, postage prepaid, return receipt
requested. If such notice or demand is served by registered or certified mail in
the manner herein provided, service shall be conclusively deemed made forty-
eight (48) hours after the deposit thereof in the United States mail addressed
to the party to whom such notice or demand is to be given as hereinafter set
forth.
USA: USA NETWORKS
2049 Century Park East
Suite 2550
Los Angeles, CA 90067
Attn: President, Programming and Marketing
Copy to: USA NETWORKS
1230 Avenue of the Americas
New York, New York 10020
Attn: Vice President, Original Productions
and Current Programming
Copy to: USA NETWORKS
1230 Avenue of the Americas
New York, New York 10020
Attn: Vice President, Business Affairs and General
Counsel
Contractor: TITAN SPORTS, INC.
1241 East Main Street
Stamford, Connecticut 06902
Attn: President and Chief Executive Officer
Copy to: TITAN SPORTS, INC.
1241 East Main Street
Stamford, Connecticut 06902
Attn: Senior Vice President, and General Counsel
Copy to: THE WILLIAM MORRIS AGENCY, INC.
151 El Camino Drive
Beverly Hills, CA 90210
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
Attn: Mr. Mark Itkin
Either party may change its address for the purpose of receiving notices or
demands by providing written notice given in such manner to the other party
hereto, which notice of change of address shall not become effective, however,
until the actual receipt thereof by the other party.
19. This Agreement shall be construed, interpreted and enforced in
accordance with and shall be governed by the laws of the State of New York
applicable to agreements entered into and wholly to be performed in New York.
Contractor hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York State
court sitting in New York City for purposes of any legal proceedings arising out
of or relating in any way to this Agreement or the transactions contemplated
hereby. Contractor also irrevocably waives, to the fullest extent permitted by
law, any objection which it may have, now or hereafter, to the laying of venue
in any such court and any claim that any proceeding brought in any such court
has been brought in an inconvenient forum.
20. This Agreement sets forth the entire agreement and understanding
relating to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings relating to the subject matter hereof.
21. Any provision herein found by a court of law to be void or
unenforceable shall not affect the validity or enforceability of any other
provisions of this Agreement.
22. This Agreement shall not be altered, amended or modified other
than by a written instrument executed by both parties hereto. Each party hereto
shall execute any and all further documents or amendments which either party
hereto may deem necessary and proper to carry out the purposes of this
Agreement.
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
23. USA and Contractor each represents and warrants that it shall
not disclose to any third party (other than its employees, in their capacity as
such) any information with respect to the financial terms and provisions of this
Agreement except (a) to the extent necessary to comply with law or the valid
order of a court of competent jurisdiction, in which event the party so
complying shall so notify the other party as promptly as practicable (and, if
possible, prior to making any disclosure) and shall seek confidential treatment
of such information, (b) as part of its normal reporting or review procedure to
its parent company, its auditors or its attorneys and such parent company,
auditors or attorneys, as the case may be, agree to be bound by the provisions
of this Section 23 or (c) in order to enforce its rights pursuant to this
Agreement.
24. USA shall use all reasonable efforts to provide Contractor with
ratings and demographic information regarding the Programs provided by
Contractor to USA.
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
first date written above.
USA NETWORKS
By_________________________
TITAN SPORTS, INC.
By__________________________
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