CONTENT LICENSE AGREEMENT
-------------------------
AGREEMENT made as of the day of ___________, 1999, by and between CBS
Corporation, a Pennsylvania corporation with offices at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ( "CBS"), and ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a California corporation
with offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
("Hollywood").
1. DEFINITIONS
1.1 "Affiliate" of the Person concerned, means a Person that directly
or indirectly (through one or more intermediaries) controls, is controlled by or
is under common control with such Person.
1.2 "Annual Ceiling" shall have the meaning set forth in section
2.3(c)(i) hereof.
1.3 "Arbitration Proceeding" means a proceeding conducted in
accordance with the following rules:
(a) such proceeding is commenced by the party concerned,
within five (5) days after notice to the other party of its intent to elect
arbitration (under paragraph 1.6 below), and requesting the New York office of
the American Arbitration Association to designate one arbitrator (who is a
retired federal or state judge or a member of the CPC Panel of Distinguished
Neutrals of the CPR Institute for Dispute Resolution and who is not and has not
been an affiliate, employee, consultant, officer, director or stockholder of CBS
or Big Entertainment, Inc. ("BEI")) to conduct the proceeding;
(b) within seven (7) days after the designation of the
arbitrator, the arbitrator and the parties shall meet, at which time each party
shall be required to set forth in writing all disputed issues, together with its
proposed resolution of the matter, all in reasonable detail and containing such
supporting materials it may choose to submit;
(c) the arbitrator shall set a date for a hearing, which
shall be no later than ten (10) days after the submission of written proposals
pursuant to subparagraph 1.3(b) above, to discuss each of the issues identified
by the parties. Each party shall have the right to be represented by counsel.
The arbitration shall be governed by the Commercial Arbitration Rules of the
American Arbitration Association; provided, however, that the Federal Rules of
Evidence shall apply with regard to the admissibility of evidence;
(d) the arbitrator shall rule on the matter at issue within
seven (7) days after the completion of the hearing described in subparagraph
1.3(c) above. All rulings of the arbitrator shall be in writing, shall be
delivered to the parties and shall be final and conclusive as to any such
matter; and
(e) the arbitration shall be conducted in New York City.
1.4 "Capital Stock" means any common stock or preferred stock of BEI
and any options, warrants, rights, or other securities that are convertible,
exercisable, or exchangeable into common stock or preferred stock of BEI.
1.5 "CBS License Guidelines" means the clearance, form, format and
use restrictions and procedures set forth in Exhibit A attached hereto.
1.6 "CBS Competitor" means any Person, other than CBS or any
Affiliate of CBS, who is primarily engaged in North America directly, or
indirectly through an Affiliate, in radio or television programming or radio or
television program distribution (including, without limitation, free
over-the-air, telephone, Internet or microwave). A CBS Competitor shall not
include any of the following:
(a) any Person engaged in television programming or
television program distribution, provided such Person's aggregate revenues
generated from television programming and television program distribution are
less than five percent (5%) of the aggregate revenues of the television
broadcast market.
(b) any Person engaged in free over-the-air radio
programming or radio program distribution provided such Person is not one of the
top two (excluding CBS) nationally ranked radio broadcast networks, based on
overall radio audience ratings.
(c) any Person engaged in television programming or
television program distribution over the Internet ("Television Internet
Concern"), provided either of the following conditions are met:
(i) the aggregate revenue of the Internet video
streaming market/industry ("Internet Video Streaming Market") is less
than 10% of the aggregate revenue for the network television
broadcast market; or
(ii) if the aggregate revenue of the Internet
Video Streaming Market is equal to or more than 10% of the aggregate
revenue for the network television broadcast market, then the
Television Internet Concern shall not be a CBS Competitor if the
aggregate revenue of such Television Internet Concern generated by
television programming or television program distribution over the
Internet is less than 10% of the aggregate revenue of the Internet
Video Streaming Market.
The foregoing markets and revenues shall be identified/delineated by Veronis,
Suhler & Associates, provided, however, that if Veronis, Suhler is not a
nationally reputable media/ communications forecasting service or does not (as a
matter of course) provide the relevant data, the parties shall mutually agree
upon a nationally reputable media/communications forecasting service (the
"Forecasting Service"). In the event that the parties are unable to reach
agreement
2
upon the Forecasting Service within ten (10) business days of commencement of
discussion on the issue, then either party hereto shall have the right to elect
to commence an Arbitration Proceeding to determine the Forecasting Service.
(d) any Person engaged in radio programming or radio
program distribution over the Internet ("Radio Internet Concern"), provided
either of the following conditions are met:
(i) the aggregate revenue of the Internet radio
streaming market/industry ("Internet Radio Streaming Market") is less
than 10% of the aggregate revenue for the radio broadcast market; or
(ii) if the aggregate revenue of the Internet
Radio Streaming Market is equal to or more than 10% of the aggregate
revenue for the radio broadcast market, then the Radio Internet
Concern shall not be a CBS Competitor if the aggregate revenue of
such Radio Internet Concern generated by radio programming or radio
program distribution over the Internet is less than 10% of the
aggregate revenue of the Internet Radio Streaming Market.
The foregoing markets and revenues shall be identified/delineated by Veronis,
Suhler & Associates, provided, however, that if Veronis, Suhler is not a
nationally reputable media/ communications forecasting service or does not (as a
matter of course) provide the relevant data, the parties shall mutually agree
upon a nationally reputable media/communications forecasting service (the
"Forecasting Service"). In the event that the parties are unable to reach
agreement upon the Forecasting Service within ten (10) business days of
commencement of discussion on the issue, then either party hereto shall have the
right to elect to commence an Arbitration Proceeding to determine the
Forecasting Service.
(e) any Person who owns or operates a multichannel video
program distribution service, a cable system, a wireless cable system or a
direct broadcast satellite system, so long as such Person does not otherwise
engage (either directly or indirectly through an Affiliate) in television or
radio programming or program distribution.
(f) any Person engaged in the production of television
programs or other audio visual materials, so long as such Person does not
otherwise engage (either directly or indirectly through an Affiliate) in
television or radio programming or program distribution.
(g) AT&T Corporation, Comcast Corporation, Gannett Co, Inc.
or The Times Mirror Company, as constituted on the date of this Agreement.
(h) any Person engaged in television programming or
television program distribution, so long as neither CBS nor any Affiliate of CBS
owns a majority interest in the CBS Television Network
(i) any Person engaged in radio programming or radio
program distribution, so
3
long as neither CBS nor any Affiliate of CBS owns a majority interest in
Infinity Broadcasting Corporation.
The revenue calculations in the preceding sentences shall be based on the last
full fiscal year of the Person (including, without limitation, Television
Internet Concern or Radio Internet Concern) concerned and the last full calendar
year of the applicable market/industry.
1.6 "CBS Content" means any Television Content, including archival
Content, related to the movie business or any particular motion picture and
contained in CBS's regularly scheduled hard news broadcasts, scheduled special
events coverage and unscheduled live breaking news coverage, which CBS has the
right to license for use on the Internet. Notwithstanding anything contained
herein to the contrary, nothing herein shall be construed to grant Hollywood any
rights to CBS Radio Content.
1.7 "CBS Content Pages" means pages of the Hollywood Site that
include any CBS Content.
1.8 "Ceiling Amount" shall have the meaning ascribed to it in section
2.4(a)(i).
1.9 "Co-Branded Site" means an Internet Site: (a) that
contains/displays a majority of the Content displayed on the Hollywood Site, and
displays such Content in the same form and format as featured on the Hollywood
Site; (b) is branded with the Hollywood name (or trademark) and the
name/trademark of the third-party Web Site and (c) is accessed from the third
party Web Site.
1.10 "Collaboration Agreement" means any one of the following
agreements between or among CBS, Hollywood and BEI: (a) this Agreement; (b) the
Advertising and Promotion Agreement dated as of even date (the "Ad Agreement")
(c) the Stock Purchase Agreement dated as of even date; (d) the Investor's
Rights Agreement dated as of even date and (e) the Voting Agreement dated as of
even date.
1.11 "Content" means text, graphics, photographs, video, audio and/or
other data or information, including, without limitation, Television Content,
relating to any subject, and/or advertisements.
1.12 "Contract Year" means the annual period beginning on the date of
commencement of the term of this Agreement, and each subsequent annual period
during the term beginning on the anniversary of that commencement date (as such
Year may be suspended or extended, and those dates postponed, as provided
herein).
1.13 "Hollywood Content" means any Content owned or controlled by
Hollywood other than CBS Property (as defined in subparagraph 4.1(a)).
4
1.14 "Hollywood Site" means: (a) the Internet Web Site owned or
controlled by Hollywood (and is accessed via the URL ▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇) that
features or will feature movie, music and television-related news, data and
merchandise offers and related Content and merchandise offers; (b) any
Co-Branded Site and (c) any Mirror Site.
1.15 "Intellectual Property Rights" means all inventions,
discoveries, trademarks, patents, trade names, copyrights, jingles, know-how,
intellectual property, software, shop rights, licenses, developments, research
data, designs, technology, trade secrets, test procedures, processes, route
lists, computer programs, computer discs, computer tapes, literature, reports
and other confidential information, intellectual and similar intangible property
rights, whether or not patentable or copyrightable (or otherwise subject to
legally enforceable restrictions or protections against unauthorized third party
usage), and any and all applications for, registrations of and extensions,
divisions, renewals and reissuance of, any of the foregoing, and rights therein,
including without limitation (a) rights under any royalty or licensing
agreements, and (b) programming and programming rights, whether on film, tape or
any other medium.
1.16 "Internet" means a global network of interconnected computer
networks, each using the Transmission Control Protocol/Internet Protocol and/or
such other standard network interconnection protocols as may be adopted from
time to time, which is used to transmit Content that is directly or indirectly
delivered to a computer or other digital electronic device for display to an
end-user, whether such Content is delivered through on-line browsers, off-line
browsers, or through "push" technology, electronic mail, broadband distribution,
satellite, wireless or otherwise.
1.17 "Internet Site" or "Web Site" means any site or service
delivering Content on or through the Internet, including, without limitation,
any on-line service such as America Online, Compuserve, Prodigy and the
Microsoft Network.
1.18 "Market Value" shall have the meaning ascribed to it in section
2.4(a)(iii).
1.19 "Mirror Site" means an Internet Site that contains the same
Content as the Hollywood Site and is displayed in the same form/format as the
Hollywood Site, and which (a) is located at a geographic location distinct from
the Hollywood Site and (b) is created for the sole purpose of improving the
performance of and accessibility to the Hollywood Site.
1.20 "Person" means any natural person, legal entity, or other
organized group of persons or entities. (All pronouns whether personal or
impersonal, which refer to Persons include natural persons and other Persons.)
1.21 "Television Content" consists of Content broadcast on
television.
1.22 "Term" means the term specified in paragraph 3.1 below.
5
2. LICENSE
2.1 (a) Subject to the terms and conditions contained herein, CBS
grants to Hollywood the non-exclusive right and license to:
(i) use, copy, publicly display, publicly
perform, distribute, or otherwise make the CBS Content available on
the Hollywood Site during the Term, and
(ii) Archive the CBS Content after expiration of
the Term,
to the extent CBS has the right to so license such Content to
Hollywood.
(b) CBS agrees that users of the Hollywood Site may view,
access, retrieve, copy and print only for noncommercial private use (which use
shall exclude any not-for-profit private use) any CBS Content distributed
hereunder on the Hollywood Site. Nothing in this Agreement grants Hollywood
ownership or other rights in or to the CBS Content, except in accordance and to
the extent of this license.
(c) "Archive", as used in this paragraph 2.1 (and with
respect to CBS Content), shall mean the retention of CBS Content in the form,
format and context originally displayed on the Hollywood Site during the Term
(without, for avoidance of doubt, any editing or derivative use thereof), and
use thereof in accordance with the terms of this Agreement applicable during the
Term (including, without limitation, the CBS License Guidelines).
2.2 Hollywood's exercise of the rights granted herein shall conform
to the restrictions or requirements set forth in the CBS License Guidelines, as
the CBS License Guidelines may be amended or revised from time to time by CBS,
to reflect any changes in the business, practice, procedures or policies of CBS.
CBS will notify Hollywood of such amendments/revisions.
2.3 Hollywood shall have reasonable access to, and, subject to the
conditions stated in the next sentence, CBS shall deliver CBS Content to
Hollywood in a mutually agreed-upon form and format, provided Hollywood's
request for CBS Content is reasonable. Notwithstanding anything to the contrary
contained in this paragraph, CBS shall have the right to refuse to deliver to
Hollywood any CBS Content if, in CBS's reasonable judgment: (i) any Content on
the Hollywood Site (the "Hollywood Content") or (ii) the use contemplated for
the CBS Content, conflicts with, interferes with or is detrimental to CBS's
interests, reputation or business or might subject CBS to unfavorable regulatory
action, violate any law, infringe the rights of any Person, or subject CBS to
liability for any reason.
2.4 (a) (i) The CBS Content licensed hereunder shall not exceed a
total Market Value of Thirty Million Dollars ($30,000,000) during the
Term (the "Aggregate Ceiling") or a Market Value of Four Million
Three Hundred Thousand Dollars ($4,300,000) during each of the first
six Contract Years and Four Million Two Hundred Thousand Dollars
6
($4,200,000) during the seventh Contract Year (the "Annual Ceiling"),
subject to the reduction(s) prescribed in section 2.4(a)(ii) below.
The Aggregate Ceiling and the Annual Ceiling are sometimes
hereinafter individually or collectively referred to as the "Ceiling
Amount".
(ii) The Annual Ceiling shall be reduced by: (A)
the (Market Value of the) Annual Ad Sales Option, as prescribed in
paragraph 2.3 of the Ad Agreement; and (B) the Market Value of any
advertising or promotion provided by CBS (during the Contract Year
concerned), pursuant to paragraph 2.4 of the Ad Agreement.
(iii) "Market Value", as used in this
subparagraph 2.4(a), shall mean:
(A) with respect to CBS Content, the
average price paid by a third party for the
license of such Content on the Internet
(provided that CBS has an established market for
licenses on the Internet) or, if no such rate
(or CBS market) exists, then the average price
for worldwide over-the-air free television use
(including in all instances, without limitation,
any costs related to the retrieval, preparation
(e.g., tape transfer and/or duplication) or
delivery of CBS Content).
(B) with respect to advertising sales
on the Hollywood Site, the proportionate dollar
amount (of the Gross Ad Revenues, as such term
is defined in the Ad Agreement) of the Ad Sales
Option (as defined in paragraph 2.3 of the Ad
Agreement).
(C) with respect to CBS advertising
and promotion, the unit price for the
advertising medium concerned, as described in
subparagraph 2.1(b) of the Ad Agreement.
(b) (i) Upon commencement of the Contract Year concerned
and/or each calendar quarter of the Contract Year
concerned, Hollywood shall use reasonable efforts to notify
CBS of its election to license Content, exercise its Annual
Ad Sales Option (as defined in paragraph 2.3 of the Ad
Agreement) or utilize the Annual Additional Promo
Commitment (as prescribed in paragraph 2.4 of the Ad
Agreement), and the respective Market Values thereof.
(ii) If, upon expiration of the Contract Year
concerned, Hollywood has failed to notify CBS of its
election, as set forth in section 2.4(b)(i) above, then the
Annual Ceiling (or any portion thereof for which Hollywood
has failed to notify CBS of its election) will be deemed
forfeited.
7
(iii) Except as set forth in section
2.4(b)(ii) above, if upon expiration of the Contract Year
concerned, the Annual Ceiling has not been exhausted, then
the amount of the unused portion of the Annual Ceiling for
such Contract Year may be carried over to the immediately
subsequent Contract Year (the "Annual Ceiling Carryover"),
it being understood, however, that (A) in the immediately
subsequent Contract Year the Annual Ceiling Carryover shall
be exhausted (first) before the Annual Ceiling for such
subsequent Contract Year is utilized, (B) Hollywood shall
identify the intended use for (i.e., allocate) the Annual
Ceiling Carryover during the first thirty (30) days of the
subsequent Contract Year, and CBS shall use reasonable
efforts to satisfy the allocation request depending upon
the availability of the inventory/item sought. In the event
that the inventory is not available, then Hollywood shall
make a substitute allocation within thirty (30) days
following CBS's advising Hollywood that the inventory/item
sought is unavailable, (C) any portion of the Annual
Ceiling Carryover unused as of the expiration date of the
Contract Year concerned (i.e., such subsequent Contract
Year) shall be deemed forfeited, except to the extent
Hollywood complied with the notice requirements prescribed
herein and CBS did not deliver such portion of the Annual
Ceiling Carryover and (D) any portion of the Ceiling Amount
(including the Annual Ceiling Carryover) unused as of the
expiration date of the Term shall be deemed forfeited,
except to the extent Hollywood complied with the notice
requirements prescribed herein and CBS did not deliver such
portion of the Ceiling Amount or Annual Ceiling Carryover,
as applicable.
2.5 During the Term, the Hollywood Site shall consist of (i)
movie-related entertainment news, data and merchandise offers (including movie
celebrity interviews, movie reviews, movie trailers, movie soundtracks,
movie-theater listings and movie ticketing), (ii) music-related news, data and
merchandise offers, (iii) television-related news, data and merchandise offers
and (iv) other entertainment-related Content and merchandise offers, in each
case as determined by Hollywood from time to time in its sole discretion. All
Content displayed on the Hollywood Site shall be subject to any restrictions or
requirements set forth in the CBS License Guidelines. CBS shall have the right
to demand the removal from the Hollywood Site of any Content which in CBS's
reasonable business judgment conflicts with, interferes with or is detrimental
to CBS's interests, reputation or business or which might subject CBS to
unfavorable regulatory action, violate any law, infringe the rights of any
Person, or subject CBS to liability for any reason. Hollywood shall thereafter
remove the objected-to Content as soon as technically feasible, but in no event
later than ten (10) days (or less than said ten days if CBS is or would be
subject to potential liability, it being understood that: (i) in each instance,
CBS shall notify Hollywood of the potential liability concerned; and (ii)
Hollywood shall use its best efforts to remove the Content concerned as soon as
possible, but in any event within three (3) business days) after written notice
from CBS demanding the removal of such Content, subject to the next sentence.
CBS shall have no right to demand the removal of any Content which is a hard
news item of a nature normally reported by other news organizations of a
character and stature equal to Hollywood or an editorial item clearly marked as
such, provided, however, that such Content does
8
not/will not subject CBS to unfavorable regulatory action, violate any law,
infringe the rights of any Person, or subject CBS to liability for any reason.
For purposes of this paragraph 2.5 (and in addition to the terms and conditions
set forth in paragraph 7.4 below) notice shall be deemed given when sent by
facsimile transmission to the fax number concerned in paragraph 7.4 below.
2.6 (a) During the Term, Hollywood shall periodically consult with
CBS regarding the presentation of the CBS Content on the Hollywood Site. In no
event shall Hollywood distort or misrepresent any material contained in the CBS
Content. No CBS Content shall be used/displayed out of context. Hollywood shall
have the right to edit and revise the CBS Content solely to meet spatial
requirements provided that any such edits or revisions shall not distort or
misrepresent any events, opinions or statements contained in the CBS Content.
(b) Subject to any restrictions or requirements in the CBS
License Guidelines, Hollywood shall have the right, but not the obligation, to
correct any errors, omissions and/or inaccuracies in the transmission or
transcription of the CBS Content identified by Hollywood or reported to
Hollywood by Hollywood Site users.
2.7 Except as otherwise specified in this Agreement, during the Term,
Hollywood shall not, without CBS's prior written approval, display, perform,
distribute, transmit or otherwise make available in any media now known or
hereafter developed, other than through the Hollywood Site, any CBS Content, or
any portion thereof.
2.8 In the event that Hollywood desires to use any music contained in
any CBS Content on the Hollywood Site, prior to such use, Hollywood shall: (i)
report to the applicable music rights society on behalf of CBS, all titles and
publishers of all such music; (ii) secure, at its sole cost and expense, and pay
for all performing, duplication and/or recording rights licenses, if any,
required by the applicable rights holder(s) for the use of musical compositions
and sound recordings on the Internet and (iii) assume any and all liability in
connection with its use of the music. CBS shall endeavor to deliver to Hollywood
accurate music cue sheets for all music contained in the CBS Content.
2.9 Hollywood's right to Archive CBS Content shall cease if any of
the following occurs: (i) CBS terminates this Agreement pursuant to paragraph
6.1; or (ii) Hollywood breaches any term of the CBS License Guidelines.
2.10 Upon termination of this Agreement pursuant to paragraph 6.1 or
the Archive rights, Hollywood shall cease using any CBS Content or Content
derived therefrom. In that connection, Hollywood shall immediately remove or
erase the CBS Content from the Hollywood Site as soon as technically
practicable, but in no event shall any such material remain on the Hollywood
Site more than ten (10) days (or less than said ten days, if CBS is or would be
subject to potential liability) after CBS's notice of termination, and at CBS's
request, Hollywood shall furnish CBS with certified evidence of such removal or
erasure satisfactory to CBS.
9
3. TERM
3.1 The term of this Agreement ("Term") shall begin on
______________, 1999 and shall continue in full force and effect for a period of
seven (7) years, through and including ___________, 2006, unless earlier
terminated in accordance with the terms and conditions contained herein.
4. RIGHTS
4.1 (a) As between CBS and Hollywood, CBS is or shall be the
exclusive owner of and shall retain all right, title and interest to the CBS
Content or any Content derived therefrom, including all Intellectual Property
Rights therein (the "CBS Property").
(b) Hollywood shall place a notice of copyright on each CBS
Content Page in accordance with the CBS License Guidelines. No CBS Content Page
shall contain any other copyright notice whatsoever except as provided in the
CBS License Guidelines. Hollywood shall cooperate fully with CBS in connection
with CBS's obtaining appropriate copyright protection in the name of CBS for any
CBS Content Page.
(c) With respect to all Content on the Hollywood Site other
than the CBS Property (i.e., CBS Content or any Content derived therefrom), as
between CBS and Hollywood, Hollywood is or shall be the exclusive owner of and
shall retain all right, title and interest to such Content or any Content
derived therefrom, including all Intellectual Property Rights therein, and that
Content shall be deemed "Hollywood Content."
4.2 Hollywood agrees to take all action and cooperate as is
reasonably necessary, at CBS's request, to protect the CBS's rights, titles, and
interests specified in this Article 4, and further agrees to execute any
documents that might be necessary to perfect CBS's ownership of such rights,
titles and interests.
5. WARRANTIES; REPRESENTATIONS; INDEMNITIES
5.1 (a) CBS represents and warrants that:
(i) it has full power and authority to
enter into and fully perform this Agreement; and
(ii) it has sufficient right and authority to
grant to Hollywood all licenses and rights granted by CBS hereunder.
(b) Hollywood represents and warrants that:
10
(i) it owns or controls all right, title, and
interest in and to the Hollywood Content and the Hollywood Site, and
all Intellectual Property Rights therein, necessary to carry out its
obligations hereunder;
(ii) it is has the full power and authority to
enter into and fully perform this Agreement;
(iii) the Hollywood Site (including any and all
Intellectual Property Rights therein or connected thereto) and the
Hollywood Content and the use thereof shall not violate any
applicable law or infringe upon or violate any rights of any Person;
and
(iv) the Hollywood Site will be produced,
advertised and transmitted in accordance with all applicable federal,
state, local and foreign laws and regulations.
5.2 (a) Each party (the "Indemnifying Party") shall at all times
indemnify, hold harmless and defend the other party (the "Indemnified Party")
from and against any loss, cost, liability or expense (including court costs and
reasonable attorneys' fees) arising out of or resulting from any breach by the
Indemnifying Party of any representation, warranty, covenant or agreement
contained herein. In the event of any such claim, the Indemnified Party shall:
(i) promptly notify the Indemnifying Party of the claim; (ii) allow the
Indemnifying Party to direct the defense and settlement of any third party claim
with counsel of the Indemnifying Party's choosing; and (iii) provide the
Indemnifying Party, at the Indemnifying Party's expense, with information and
assistance that is reasonably necessary for the defense and settlement of the
third party claim. The Indemnified Party reserves the right to retain counsel,
at the Indemnified Party's sole expense, to participate in the defense of any
such claim. The Indemnifying Party shall not settle any such claim or alleged
claim without first obtaining the Indemnified Party's prior written consent,
which consent shall not be unreasonably withheld, if the terms of such
settlement would adversely affect the Indemnified Party's rights under this
Agreement or otherwise. If the Indemnifying Party assumes the defense and
settlement of the claim as set forth above, then the Indemnifying Party's only
obligation is to satisfy the claim, judgment or approved settlement.
(b) Any sums payable by Hollywood under this paragraph 5.2
may be offset by Hollywood against the Market Value of any advertising, Content
or Ad Sales Commitment deliverable by CBS (the "CBS Deliverable(s)") pursuant to
this Agreement or the Ad Agreement (the "Indemnity Offset"). The amount or
Market Value of the CBS Deliverable concerned will be reduced by the proportion
thereof used for or contributed to the Indemnity Offset. For purposes of the
Indemnity Offset, Hollywood shall be obligated to exhaust the CBS Deliverables
as follows:
(i) The Market Value of any advertising or
promotion, deliverable pursuant to paragraph 2.1 of the Ad Agreement,
shall be fully exhausted before any other CBS Deliverable is used
for/contributed to the Indemnity Offset.
(ii) Provided the CBS Deliverable described in
section 5.2(b) above has been fully exhausted, the Market Value of
any Ceiling Amount, deliverable pursuant to subparagraph 2.4(a) of
this Agreement (or the Additional Promo Commitment, deliverable
11
pursuant to paragraph 2.4 of the Ad Agreement), shall be fully
exhausted before any other CBS Deliverable is used for/contributed to
the Indemnity Offset.
(iii) The Market Value of any Ad Sales Option
deliverable pursuant to paragraph 2.3 of the Ad Agreement, may be
used for/contributed to the Indemnity Offset only if and when the
Deliverables described in sections 5.2(b)(i) and (ii) above have been
fully exhausted.
For avoidance of doubt, CBS's obligation to deliver any CBS Deliverable,
pursuant to this Agreement or the Ad Agreement, shall be extinguished (or
reduced, as applicable) to the extent that such CBS Deliverable is used
for/contributed to any Indemnity Offset.
6. REMEDIES
6.1 CBS shall have the right to terminate this Agreement if any of
the following occurs:
(a) The Hollywood Site contains Content which, in CBS's
reasonable business judgment, violates Article I or Article III of the CBS
License Guidelines and Hollywood fails to remove such Content from the Hollywood
Site within ten (10) days after written notice of CBS's objection thereto
demanding the removal of such Content.
(b) Except as otherwise set forth in subparagraph 6.1(a)
above, either Hollywood or BEI (if applicable) breaches any material term or
condition of this Agreement, or any Collaboration Agreement and fails to: (i)
cure such breach within thirty (30) days after CBS's written notice of such
breach, or (ii) complete curing such breach within sixty (60) days following
CBS's notice of such breach; provided however that this clause (ii) shall only
apply to a default that is incapable of being cured in thirty (30) days. The
foregoing cure period will not apply: (x) solely with respect to this Agreement,
to a term or condition (in this Agreement) for which a specific cure period is
provided; or (y) to a breach incapable of being cured.
(c) BEI or Hollywood: (i) becomes insolvent or unable to
pay its debts as they mature or makes an assignment for the benefit of its
creditors; (ii) is the subject of a voluntary petition in bankruptcy or any
voluntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors, if such petition or proceeding is not
dismissed within sixty (60) days of filing; (iii) becomes the subject of any
involuntary petition in bankruptcy or any involuntary proceeding relating to
insolvency, receivership, liquidation, or composition for the benefit of
creditors, if such petition or proceeding is not dismissed within sixty (60)
days of filing; or (iv) is liquidated or dissolved.
(d) BEI issues to a Person any voting securities of BEI
and: (i) at the time of such issuance such Person is a CBS Competitor and (ii)
as a result of such issuance such Person beneficially owns or controls, directly
or indirectly, more than fifteen (15%) percent of the total voting power of BEI,
in the aggregate. For the purposes of this subparagraphs 6.1(d), 6.1(e) and
12
6.1(f): (x) the term "beneficial ownership" shall have the meaning set forth in
Section 13(d) of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder; (y) the term "total voting power" shall mean
at any time, the total number of votes that may be cast in the election of
directors of BEI at any meeting of the holders of voting securities at such time
for such purpose; and (z) the term "voting securities" shall mean the Capital
Stock and any other securities issued by BEI having the power to vote in the
election of directors of BEI including, without limitation, any securities
having such power only upon the occurrence of a default or any other
extraordinary contingency.
(e) BEI issues to a Person any voting securities of BEI
and: (i) at the time of such issuance such Person is a CBS Competitor that
beneficially owns or controls, directly or indirectly, more than fifteen (15%)
percent of the total voting power of BEI and (ii) as a result of such issuance
the voting power of such Person is increased by any amount.
(f) BEI's board of directors consents to the acquisition of
voting securities by a CBS Competitor such that as a result of such consent, the
CBS Competitor beneficially owns or controls, directly or indirectly, more than
15% of the total voting power of BEI and at the time of such consent the Rights
Agreement by and between BEI and American Stock Transfer & Trust Company dated
August 23, 1996, as amended, is in full force and effect.
(g) Hollywood discontinues using the "▇▇▇▇▇▇▇▇▇.▇▇▇" ▇▇▇▇
(or any substitute ▇▇▇▇ approved by CBS) and does not establish use of a
substitute ▇▇▇▇ reasonably acceptable to CBS within thirty (30) days after such
discontinuation.
(h) The Hollywood Site ceases to operate due to any
circumstance(s) (other than circumstances beyond Hollywood's reasonable control,
which circumstances simultaneously affect a substantial number of Web Sites on
the Internet) for: (i) a period of thirty (30) consecutive days; or (ii) a
period of one week at least two times in any six (6) month period.
CBS may exercise its right to terminate pursuant to this paragraph 6.1 by
sending Hollywood appropriate written notice. No exercise by CBS of any of its
rights under this Article 6 will limit CBS's remedies by reason of Hollywood's
or BEI's default, CBS's rights to exercise any other rights under this paragraph
6.1, or any of CBS's other rights.
7. GENERAL
7.1 Neither party may assign this Agreement, or their respective rights
and obligations hereunder, in whole or in part without the other party's prior
written consent. Any attempt to assign this Agreement without such consent shall
be void and of no effect ab initio. Notwithstanding the foregoing, CBS may
assign this Agreement or any of its rights and obligations hereunder to an
affiliate or to any entity controlling, controlled by or under common control
with, CBS, or to any entity that acquires CBS by purchase of stock or by merger
or otherwise, or by obtaining substantially all of CBS's assets (a "CBS
Assignee"), provided that any such CBS
13
Assignee, or any division thereof, thereafter succeeds to all of the rights and
is subject to all of the obligations of CBS under this Agreement.
7.2 Each party hereto irrevocably submits to the exclusive
jurisdiction of (a) the Supreme Court of the State of New York, New York County,
and (b) the United States District Court for the Southern District of New York,
for the purposes of any suit, action or other proceeding arising out of this
Agreement or any transaction contemplated hereby or thereby. Each of CBS and
Hollywood agrees to commence any such action, suit or proceeding either in the
United States District Court for the Southern District of New York or if such
suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the Supreme Court of the State of New York, New York
County. Each of CBS and Hollywood further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party's respective
address set forth above shall be effective service of process for any action,
suit or proceeding in New York with respect to any matters to which it has
submitted to jurisdiction in this paragraph 7.2. Each of CBS and Hollywood
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby and thereby in (i) the Supreme Court of the State of New
York, New York County, or (ii) the United States District Court for the Southern
District of New York, and hereby and thereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
7.3 If any provision of this Agreement (or any portion thereof) or
the application of any such provision (or any portion thereof) to any Person or
circumstance shall be held invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision hereof (or the remaining portion thereof)
or the application of such provision to any other Persons or circumstances.
7.4 All notices or other communications required or permitted to be
given hereunder shall be in writing and shall be delivered by hand or sent,
postage prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:
(a) if to Hollywood,
▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Chief Executive Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
14
▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President of Operations
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to CBS:
CBS Corporation
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
CBS Corporation
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
7.5 The parties to this Agreement are independent contractors. There
is no relationship of partnership, joint venture, employment, franchise, or
agency between the parties. Neither party shall have the power to bind the other
or incur obligations on the other's behalf without the other's prior written
consent.
7.6 No failure of either party to exercise or enforce any of its
rights under this Agreement shall act as a waiver of such right.
15
7.7 This Agreement, along with any Exhibits hereto, contains the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. Neither party shall be liable or bound to any
other party in any manner by any representations, warranties or covenants
relating to such subject matter except as specifically set forth herein.
7.8 This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
parties and delivered to each of the other parties.
7.9 This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
7.10 This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York applicable to agreements made
and to be performed entirely within such State, without regard to the conflicts
of law principles of such State.
7.11 This Agreement is for the sole benefit of the parties hereto and
their permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the parties hereto and such assigns,
any legal or equitable rights hereunder.
7.12 The headings contained in this Agreement or in any Exhibit or
Schedule hereto are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. All Exhibits and Schedules
annexed hereto or referred to herein are hereby incorporated in and made a part
of this Agreement as if set forth in full herein. Any capitalized terms used in
any Schedule or Exhibit but not otherwise defined therein, shall have the
meaning as defined in this Agreement. When a reference is made in this Agreement
to a Section, Exhibit or Schedule, such reference shall be to a Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
▇▇▇▇▇▇▇▇▇.▇▇▇, INC. CBS CORPORATION
------------------------ ---------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Name:
Chief Executive Officer Title:
16
(Attached to and forming a part of the Agreement, made as of
______________________, 1999 between CBS Corporation and ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.)
-------------------------------------------------------------------------------
CBS LICENSE GUIDELINES AND RESTRICTIONS
---------------------------------------
I. GENERAL
(a) The Hollywood Site shall not include the following Content (or
other materials regarding or containing the following): (i) cigarettes, (ii)
hard liquor, (iii) massage parlors, (iv) abortion clinics, (v) firearms and
ammunition, (vi) head shops, (vii) illegal (under federal, state, local or
foreign laws) lotteries, (viii) gambling (other than legal lotteries under
federal, state or local, local laws applicable to the venue concerned), (ix)
sexually explicit content, or (x) Content that denigrates a particular group
based on gender, race, creed, religion, sexual preference or handicap
("Proscribed Content"). The standard for Content deemed "sexually explicit"
shall be subject to the standards and practices applicable to the CBS Television
Network.
(b) The CBS License Guidelines may be amended or revised from time to
time by CBS, to reflect any changes in CBS's business, practice, procedures or
policies. CBS will notify Hollywood of such amendments/revisions.
II. CONTENT
(a) (i) Each party shall notify the other of all errors, omissions,
and/or inaccuracies in transmission or transcription of the CBS
Content within twenty-four (24) hours after it becomes aware thereof.
(ii) If Hollywood provides such notice, it shall specify to
CBS what action, if any, it has taken to correct the error, omission
and/or inaccuracy.
(iii) If CBS provides such a notice, or receives such
notice, it may specify the action to be taken by Hollywood to correct
the error, omission and/or inaccuracy or resubmit such Content.
(b) All CBS Content on the Hollywood Site shall be subject to
restrictions and instructions disclosed by CBS at any time.
(c) CBS shall have the right to demand the removal from the Hollywood
Site of any Content which in CBS's reasonable business judgment conflicts with,
interferes with or is detrimental to CBS's interests, reputation or business or
which might subject CBS to unfavorable regulatory action, violate any law,
infringe the rights of any Person, or subject CBS to liability for any reason.
Hollywood shall thereafter remove the objected to Content as soon as technically
17
feasible, but in no event later than ten (10) days (or less than said ten days,
if CBS is or would be subject to potential liability , it being understood that:
(i) in each instance, CBS shall notify Hollywood of the potential liability
concerned; and (ii) Hollywood shall use its best efforts to remove the Content
concerned as soon as possible, but in any event within three (3) business days)
after written notice from CBS demanding the removal of such Content, subject to
the next sentence. CBS shall have no right to demand the removal of any Content
which is a hard news item of a nature normally reported by other news
organizations of a character and stature equal to Hollywood or an editorial item
clearly marked as such, provided, however, that such Content does not/will not
subject CBS to unfavorable regulatory action, violate any law, infringe the
rights of any Person, or subject CBS to liability for any reason. For purposes
of this subparagraph II.(c) (and in addition to the terms and conditions set
forth in paragraph 7.4) notice shall be deemed given when sent by facsimile
transmission to the fax number concerned in paragraph 7.4.
(d) Hollywood shall abide by responsible journalistic standards. No
CBS Content shall be used and/or displayed out of context. Hollywood shall not
distort or misrepresent any events, opinions or statements contained in the CBS
Content received by Hollywood.
III. CROSS-LINKS
(a) Hollywood shall not establish any links from the Hollywood Site
to any Internet Site containing Proscribed Content. Notwithstanding anything
contained herein to the contrary, Hollywood shall not be deemed in breach of
this Agreement if Hollywood links to an Internet web site, which Internet web
site, in turn, includes advertising for, or links to, an independent web site
(the "Indirectly Linked Site") displaying the above Proscribed Content, provided
that Hollywood derives no revenues or other financial benefit from such
Indirectly Linked Site or Proscribed Content. For avoidance of doubt, "financial
benefit" includes the realization or accrual of any revenue from page views or
reach of such Indirectly Linked, Site, or advertisements displayed on web site
pages of such Indirectly Linked Site.
(b) Hollywood shall not conduct any cross promotions between the
Hollywood Site and any Internet Site which exhibits Proscribed Content.
IV. OWNERSHIP
(a) Hollywood shall place an appropriate copyright notice to be
furnished by CBS on all CBS Content Pages of the Hollywood Site.
(b) Hollywood and CBS shall mutually develop the procedures for
placing any third party copyright notice on any CBS Content Page.
18
