License Agreement - USA Networks and Titan Sports Inc.
AGREEMENT, made as of the 1st day of September 1998, between USA NETWORKS
("USA") and TITAN SPORTS, INC. ("Contractor") with respect to the production of
and grant of certain rights in a series of original television programs (the
"Programs") presently entitled "Sunday Night Heat" (the "Series").
1. (a) Contractor shall produce and deliver to USA a specified
number of Programs during the Term (as defined in Section 5(a) below) hereof, as
determined in accordance with Section 8 below. The Programs either shall be
live (i.e., as the matches occur in an arena) or taped, as determined in
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accordance with Section 1(b) below. 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) Each taped Program will consist of arena matches, interviews
and other entertainment material, as Contractor shall determine (subject to the
provisions of Section 4(b) below), consistent with the program style and quality
delivered by Contractor to USA for similar programs during the second calendar
quarter of 1998 for "WWF Raw" and "WWF War Zone" programs. However,
notwithstanding the foregoing, Contractor acknowledges that USA's program
practices and standards for the Programs will be more restrictive than its
program practices and standards for "WWF Raw" and "WWF War Zone" due to the
earlier time period and the likelihood of a younger viewing audience. 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. Subject to Section 8
below,
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the Programs shall be delivered to enable USA to distribute one (1) new
Program per week during the Term. Contractor shall deliver live Programs at a
rate of at least twenty-six (26) per each twelve-month period during the Term
(September 20 - September 25/September 26-30). USA and Contractor, in good
faith, mutually shall determine the schedule by which live Programs will be
delivered.
(c) 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.
2. During the Term, USA shall have the exclusive right to distribute
the Programs within the United States, its territories and possessions
(including Puerto Rico) and all U.S. Armed Forces Bases everywhere throughout
the world (the "Territory"), the right to distribute the Programs 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 on, and as part of, USA's programming, and (d) during the Term, in
connection with the carriages authorized in this Agreement.
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3. During the Term, Contractor shall not carry or authorize the
carriage of any Program 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 Programs shall have appeared earlier in
any other program intended for reception by home television sets or personal
computers in the Territory (other than in pay-per-view events and in programs on
ABC, CBS, NBC or Fox). Any matches premiering in any 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.
4. (a) Each Program 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 offensive
language, nudity, suggestive sex, and excessive violence, particularly taking
into account the early evening time period. 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
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(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 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) 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 "WWF Raw" and "WWF War Zone" programs carried
by USA during the second calendar quarter of 1998. In addition, Contractor
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shall engage a producer, director, all the announcers and color commentators and
all other appropriate production, technical and on-air 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,
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however, that USA agrees that it shall not unreasonably withhold its approval of
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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. 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 20, 1998 and
shall end on September 30, 2000 (the "Term"). Notwithstanding the foregoing,
either party hereto may
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terminate this Agreement as of September 25, 1999, for any reason whatsoever, by
written notice to the other, delivered on or before March 1, 1999.
(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 January 15, 2000 (or
March 1, 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 the 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 the Series. In no event,
however, shall Contractor enter into any arrangement, understanding or agreement
with any such third party with respect to the 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.
Contractor also is subject to all restrictions set forth in Section 3(b) of the
Agreement made as of the 2nd day of July between USA and Contractor with respect
to three series of wrestling programs.
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 in the amount of ***** for each Program carried
hereunder. USA shall make all payments to Contractor hereunder within ten (10)
days following the last day of the month during which the
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particular Programs were carried by USA, based on the per-Program fee set forth
above. 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 ***** 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) 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 between, and including,
September 20, 1998 through September 25, 1999, and (ii) the amount of *****; and
an amount equal to the greater of (iii) ***** of all "net advertising revenues"
received by Contractor from its sale of commercial advertising time in Programs
carried between, and including, September 26, 1999 and September 30, 2000, and
(iv) the amount of *****. With respect to the amounts set forth in (ii) above,
the parties acknowledge that due to the late completion of this Agreement,
Contractor is unlikely to be able to generate significant "net advertising
revenues" in 1998. Therefore, Contractor shall pay such amount as follows: the
amount of ***** on or before each of January 31, and February 28, 1999
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(these amounts intended as consideration for advertising revenues expected to be
generated by Contractor in Programs carried by USA in 1998); the amount of *****
on or before March 31, 1999; the amount of ***** on or before each of April 30,
May 31, and June 30, 1999; the amount of ***** on or before each of July 31, and
August 31, 1999, and the amount of ***** on or before September 25, 1999.
Contractor shall pay the amount set forth in (iv) above in equal installments of
***** each, on or before November 15, 1999, January 15, 2000, March 15, 2000,
May 15, 2000, July 15, 2000, and the amount of ***** on or before September 30,
2000. 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 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,
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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 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
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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.
(f) Neither party hereunder shall grant exclusivity to any purchaser
of commercial advertising time in the 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).
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8. (a) Subject to Sections 8(b) and 8(c) below, USA represents and
warrants that it shall carry one Program every week 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 to commence at 7:00 PM, Eastern
and Pacific time, on Sundays. 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 PM nor later than 10:00 PM, on such night of the week as USA, in it sole
discretion, determines.
(b) Contractor acknowledges that one Program each August/September
during the U.S. Open tennis tournament, shall be preempted from its regularly
initially scheduled time period and, at USA's election, may be carried during a
comparable time period on another day of the week. For these purposes, each
rescheduled carriage may commerce 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(c) and/or 8(e) 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 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.
(c) The parties hereto acknowledge that from time to time, USA may
preempt its scheduled carriage of any Program. USA agrees, however, that, in
addition to the preemption
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set forth in Section 8(b) above, it twill not preempt its scheduled carriage of
the 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 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 for any
such preemption and the exact date and time it will carry the rescheduled
Program.
(d) 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 Program shall be
accompanied by a Spanish language version. The Spanish language versions shall
be provided by Contractor at no additional charge to USA.
(e) 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) above for the applicable twelve-month period (September 20, 1998-
September 25, 1999, or September 26, 1998-September 30, 2000) shall be reduced
by the amount of ***** respectively. However, with respect to preemptions which
occur pursuant to Section 8(b) above which are not rescheduled, the reductions
shall be ***** and *****, respectively. All payment reductions hereunder shall
be made from the installment payment immediately following the affected Program.
(f) 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, 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 the Series.
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, announcers and the production, direction, recording and editing of
the Programs. Contractor shall obtain rights sufficient to allow it to fully
perform its obligations hereunder.
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11. Contractor warrants and represents that:
(a) It owns or controls the entire and exclusive distribution and
exhibition rights in and to the Programs 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 of the 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, the exercise of which will derogate from, or be inconsistent
with, the rights granted to USA hereunder;
(b) The Programs 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;
(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 the Programs, any
music or excerpts
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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 any such person of any product or
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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 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, writer or
any other person who performed services in or in connection with the Programs 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
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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 the 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 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 the
Series;
(ii) the use of any materials furnished by Contractor
hereunder, including commercial announcements;
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(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 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.
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
(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 the 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 are canceled or unable to be carried, at any time
thereafter until carriage of the Series has resumed, USA may terminate this
Agreement upon written notice to Contractor (at USA's option) and neither party
shall have any further obligations to the other party 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:
-18-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately 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 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
-------- -------
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:
(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
-19-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
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
-------- -------
may assign such rights and obligations to a wholly-owned subsidiary of
Contractor without obtaining USA's prior written consent.
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
-20-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
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: Senior 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
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.
-21-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
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.
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
-22-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
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.
-23-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately 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.
___________________________________
-24-
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>10
<DESCRIPTION>AGREEMENT BETWEEN USA & TITAN, DATED 09-01-98
<TEXT>
<PAGE>
Exhibit 10.6
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
AGREEMENT, made as of the 1st day of September 1998, between USA NETWORKS
("USA") and TITAN SPORTS, INC. ("Contractor") with respect to the production of
and grant of certain rights in a series of original television programs (the
"Programs") presently entitled "Sunday Night Heat" (the "Series").
1. (a) Contractor shall produce and deliver to USA a specified
number of Programs during the Term (as defined in Section 5(a) below) hereof, as
determined in accordance with Section 8 below. The Programs either shall be
live (i.e., as the matches occur in an arena) or taped, as determined in
----
accordance with Section 1(b) below. 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) Each taped Program will consist of arena matches, interviews
and other entertainment material, as Contractor shall determine (subject to the
provisions of Section 4(b) below), consistent with the program style and quality
delivered by Contractor to USA for similar programs during the second calendar
quarter of 1998 for "WWF Raw" and "WWF War Zone" programs. However,
notwithstanding the foregoing, Contractor acknowledges that USA's program
practices and standards for the Programs will be more restrictive than its
program practices and standards for "WWF Raw" and "WWF War Zone" due to the
earlier time period and the likelihood of a younger viewing audience. 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. Subject to Section 8
below,
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
the Programs shall be delivered to enable USA to distribute one (1) new
Program per week during the Term. Contractor shall deliver live Programs at a
rate of at least twenty-six (26) per each twelve-month period during the Term
(September 20 - September 25/September 26-30). USA and Contractor, in good
faith, mutually shall determine the schedule by which live Programs will be
delivered.
(c) 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.
2. During the Term, USA shall have the exclusive right to distribute
the Programs within the United States, its territories and possessions
(including Puerto Rico) and all U.S. Armed Forces Bases everywhere throughout
the world (the "Territory"), the right to distribute the Programs 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 on, and as part of, USA's programming, and (d) during the Term, in
connection with the carriages authorized in this Agreement.
-2-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
3. During the Term, Contractor shall not carry or authorize the
carriage of any Program 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 Programs shall have appeared earlier in
any other program intended for reception by home television sets or personal
computers in the Territory (other than in pay-per-view events and in programs on
ABC, CBS, NBC or Fox). Any matches premiering in any 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.
4. (a) Each Program 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 offensive
language, nudity, suggestive sex, and excessive violence, particularly taking
into account the early evening time period. 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
-3-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
(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 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) 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 "WWF Raw" and "WWF War Zone" programs carried
by USA during the second calendar quarter of 1998. In addition, Contractor
-4-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
shall engage a producer, director, all the announcers and color commentators and
all other appropriate production, technical and on-air 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 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. 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 20, 1998 and
shall end on September 30, 2000 (the "Term"). Notwithstanding the foregoing,
either party hereto may
-5-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
terminate this Agreement as of September 25, 1999, for any reason whatsoever, by
written notice to the other, delivered on or before March 1, 1999.
(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 January 15, 2000 (or
March 1, 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 the 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 the Series. In no event,
however, shall Contractor enter into any arrangement, understanding or agreement
with any such third party with respect to the 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.
Contractor also is subject to all restrictions set forth in Section 3(b) of the
Agreement made as of the 2nd day of July between USA and Contractor with respect
to three series of wrestling programs.
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 in the amount of ***** for each Program carried
hereunder. USA shall make all payments to Contractor hereunder within ten (10)
days following the last day of the month during which the
-6-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
sepeaately with the Securities and Exchange Commission]
particular Programs were carried by USA, based on the per-Program fee set forth
above. 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 ***** 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) 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 between, and including,
September 20, 1998 through September 25, 1999, and (ii) the amount of *****; and
an amount equal to the greater of (iii) ***** of all "net advertising revenues"
received by Contractor from its sale of commercial advertising time in Programs
carried between, and including, September 26, 1999 and September 30, 2000, and
(iv) the amount of *****. With respect to the amounts set forth in (ii) above,
the parties acknowledge that due to the late completion of this Agreement,
Contractor is unlikely to be able to generate significant "net advertising
revenues" in 1998. Therefore, Contractor shall pay such amount as follows: the
amount of ***** on or before each of January 31, and February 28, 1999
-7-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
(these amounts intended as consideration for advertising revenues expected to be
generated by Contractor in Programs carried by USA in 1998); the amount of *****
on or before March 31, 1999; the amount of ***** on or before each of April 30,
May 31, and June 30, 1999; the amount of ***** on or before each of July 31, and
August 31, 1999, and the amount of ***** on or before September 25, 1999.
Contractor shall pay the amount set forth in (iv) above in equal installments of
***** each, on or before November 15, 1999, January 15, 2000, March 15, 2000,
May 15, 2000, July 15, 2000, and the amount of ***** on or before September 30,
2000. 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 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,
-8-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
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 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
-9-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
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.
(f) Neither party hereunder shall grant exclusivity to any purchaser
of commercial advertising time in the 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).
-10-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
8. (a) Subject to Sections 8(b) and 8(c) below, USA represents and
warrants that it shall carry one Program every week 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 to commence at 7:00 PM, Eastern
and Pacific time, on Sundays. 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 PM nor later than 10:00 PM, on such night of the week as USA, in it sole
discretion, determines.
(b) Contractor acknowledges that one Program each August/September
during the U.S. Open tennis tournament, shall be preempted from its regularly
initially scheduled time period and, at USA's election, may be carried during a
comparable time period on another day of the week. For these purposes, each
rescheduled carriage may commerce 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(c) and/or 8(e) 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 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.
(c) The parties hereto acknowledge that from time to time, USA may
preempt its scheduled carriage of any Program. USA agrees, however, that, in
addition to the preemption
-11-
<PAGE>
CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
set forth in Section 8(b) above, it twill not preempt its scheduled carriage of
the 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 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 for any
such preemption and the exact date and time it will carry the rescheduled
Program.
(d) 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 Program shall be
accompanied by a Spanish language version. The Spanish language versions shall
be provided by Contractor at no additional charge to USA.
(e) 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) above for the applicable twelve-month period (September 20, 1998-
September 25, 1999, or September 26, 1998-September 30, 2000) shall be reduced
by the amount of ***** respectively. However, with respect to preemptions which
occur pursuant to Section 8(b) above which are not rescheduled, the reductions
shall be ***** and *****, respectively. All payment reductions hereunder shall
be made from the installment payment immediately following the affected Program.
(f) 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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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately with the Securities and Exchange Commission]
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, 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 the Series.
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, announcers and the production, direction, recording and editing of
the Programs. Contractor shall obtain rights sufficient to allow it to fully
perform its obligations hereunder.
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
11. Contractor warrants and represents that:
(a) It owns or controls the entire and exclusive distribution and
exhibition rights in and to the Programs 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 of the 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, the exercise of which will derogate from, or be inconsistent
with, the rights granted to USA hereunder;
(b) The Programs 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;
(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 the Programs, any
music or excerpts
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
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 any such person of any product or
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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 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, writer or
any other person who performed services in or in connection with the Programs 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
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
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 the 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 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 the
Series;
(ii) the use of any materials furnished by Contractor
hereunder, including commercial announcements;
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
(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 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.
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
(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 the 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 are canceled or unable to be carried, at any time
thereafter until carriage of the Series has resumed, USA may terminate this
Agreement upon written notice to Contractor (at USA's option) and neither party
shall have any further obligations to the other party 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:
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately 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 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:
(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
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
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.
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
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
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: Senior 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
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.
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
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.
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
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CONFIDENTIAL TREATMENT
*****[Deleted pursuant to a request for Confidential Treatment and filed
separately and Exchange Commission]
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 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.
___________________________________
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