[NBC LETTERHEAD]
[NBC LOGO]
May 31, 1995
D & F Consulting, Ltd.
0000 Xxxxxxxxx Xxx., X.X.
Suite 325
Washington, D.C. 20015
Attention: Xx. Xxxxxxx Xxxxxx
Gentlemen:
This will confirm the agreement between NBC Sports, a division of National
Broadcasting Company, Inc. ("NBC") and D & F Consulting, Ltd. ("Rights Owner")
wherein NBC agrees to make available the 4:00-6:00PM Eastern standard time
period over the NBC Television Network on January 1, 1996 (the "Program Date")
for the telecast of the figure skating exhibition featuring many of the top
skaters in the World entitled the "Chrysler Cirrus Presents Nutcracker on Ice"
(the "Event"; the telecast of the Event is hereinafter referred to as the
"Program") on the following terms and conditions:
1. Basic Undertaking
NBC will proceed on the basis that the Program be brought to NBC as a fully sold
advertiser-supplied program. Rights Owner or its designee shall produce the
Program. Rights Owner or its designee will assume the responsibility of
obtaining the sponsors who will enter into sponsorship contracts as described
below.
Rights Owner will be fully responsible for the Program and all production
elements. The Program must conform with all usual and customary technical and
program standards of NBC.
Rights Owner hereby grants to NBC the following rebroadcast rights during the
six (6) month period following the Program beginning February 1, 1996 and
concluding July 1, 1996 (the "Rebroadcast Period"):
(i) NBC may elect to repeat the telecast of the Program (the "Replay"), at
no cost to NBC, provided NBC agrees to (a) refer to the Event as described
in the first paragraph of this Agreement, (b) only sell to advertisers in
product categories that do not conflict with those that appeared in the
initial telecast of the Program, (c) give Rights Owner ten (10) 30-second
units to sell in the Replay to advertisers approved by NBC and (d)
rebroadcast the Replay once during the Rebroadcast Period;
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(ii) During the Rebroadcast Period NBC SuperChannel may rebroadcast the
Program on a non-exclusive basis, at no cost to NBC or NBC SuperChannel,
provided NBC SuperChannel does not televise the Program until thirty (30)
days after the initial Program on NBC and NBC SuperChannel refers to the
Event as described in the first paragraph of this Agreement, and provided
further that all revenues received from the sale of commercial inventory in
the NBC SuperChannel rebroadcast, net of any agency sales commissions, will
be shared equally by NBC and Rights Owner. NBC and Rights Owner shall each
sell such inventory, it being understood that NBC shall not sell to any
advertiser in an advertising category that conflicts with a sponsor of the
Program; and
(iii) NBC shall incorporate highlights from the Program in NBC inflight
programming known as Skybox, provided NBC refers to the highlights using
the Event title set forth in the first paragraph of this Agreement.
lb. Production Services
Rights Owner shall provide a fully edited one inch format videotape (Track #1
shall be the mix track; Track #2 shall be international sound and music; and
Track #3 shall be the time code) of the Program. The coverage must meet network
"broadcast quality" technical standards and NBC's production requirements,
including without limitation audio, video, slo-motion, and other video
electronic visual effects. Rights Owner shall use infinite graphics and be fully
responsible for the composite of the Program. Rights Owner agrees to reimburse
NBC if the composite session is held at NBC's production facilities.
The videotape shall be 120 minutes in length after inclusion of all network
commercials, station breaks, network indentifications, up to three (3) minutes
and twenty-five (25) seconds for an NBC Sports Update segment, and any network
promotional or advertiser billboard material which may be included.
The tape shall be delivered to NBC, in acceptable form, in time for broadcast.
If, due to time constraints, it becomes necessary to transmit the Program via
satellite or ground lines to NBC headquarters in New York, Rights Owner will be
responsible for all costs associated with such transmission.
2. Time Sale
As payment for the Program, and the forty (40) 30-second commercial units
contained therein (the "Units"), Rights Owner hereby agrees to pay NBC in
the amount of Four Hundred Thirty Thousand Dollars ($430,000) net of agency
commission (the "Time Charge Amount"). The Time Charge Amount shall be paid to
NBC no later than thirty (30) days after the Program.
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Time Charge Amount shall be paid by wire transfer to NBC as follows:
Bank: Chase Manhattan Bank
ABA: 000000000
Address: 0 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Account Number: 038-1063114
Name: National Broadcasting Company, Inc.
Bank Contact: Xxx Xxxxxxxxx
Telephone: 000-000-0000
Rights Owner shall specify on the wire transfer that it is in connection with
the Program.
In addition, if not timely paid by each advertiser, Rights Owner shall pay to
NBC the Integrated Networking Charges referred to in Section 6 herein within ten
(10) days of notice by NBC that funds are due. Said notice shall not be given
prior to thirty (30) days after a Program Date.
To insure that NBC is fully paid, Rights Owner shall cause to have issued, at
least sixty (60) days prior to the Program Date (i.e., by November 1, 1995), a
stand-by irrevocable Letter of Credit naming NBC as the beneficiary in an amount
equal to the Time Charge Amount. The Letter of Credit shall be effective for at
least (90) days after the Program Date, and shall contain language acceptable to
NBC that will enable NBC to draw on it if either (i) Rights Owner fails to remit
payment to NBC as described in this Section 2, or (ii) if Rights Owner fails to
deliver the Program for broadcast or the alternate programming as described in
Section 7 herein. Alternatively, Rights Owner may, in lieu of issuing a Letter
of Credit, pay the full sum of the Time Charge Amount to NBC in two (2) equal
installments of $215,000 each, the first of which shall be paid to NBC no later
than November 1, 1995 and the second of which shall be paid to NBC no later than
December 23, 1995. If Rights Owner fails to meet its obligations under this
Section 2, NBC shall not be required to make available the time period described
in the preamble of this Agreement, and reserves all other available remedies.
3. Advertiser Compliance
Since the Program will fall within the classification of a so-called
advertiser-supplied program, Rights Owner or its designee agrees to use good
faith efforts to cause each advertiser to enter a binding agreement with Rights
Owner or its designee that requires such advertiser to abide by the rules and
satisfy the obligations set forth in Sections 7, 27, 30, 32, 33 and 35 of NBC's
standard Participating Sponsorship Agreement attached hereto as Exhibit A.
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In addition, Rights Owner or its designee shall submit to NBC's Department of
Broadcast Standards the names and addresses of each advertiser, and the number
of Units purchased by such advertiser as well as a copy of the commercial
advertisement and any billboard material or other form of in-Program exposure to
be made available to an advertiser by Rights Owner or its designee, at the
earliest opportunity, but no later than fifteen (15) days prior to the air date
of the Program or as soon thereafter as possible. Rights Owner or its designee
must specifically identify any commercial announcement which include appearances
of any of the participants in the Program. NBC's Department of Broadcast
Standards reserves the right, not to be unreasonably exercised, to reject any
commercial advertisement that does not satisfy NBC policy. NBC agrees to notify
Rights Owner of any rejected commercial promptly after its submission.
4. Station Breaks and Advertiser Commercial Time
The one hundred twenty (120) minute telecast will contain the following
commercial elements and station breaks:
20 network commercial minutes.
2 21-second NI promo/94-second internal station break.
1 21-second NI promo/64-second terminal station break.
1 unit within each sponsored Update insert (at NBC's discretion, to be
sold, and revenue retained, by NBC, provided the advertiser is
approved by Rights Owner, such approval not to be unreasonably
withheld).
Rights Owner may vary the lengths of the commercial positions to create 60, 90
and 120 second commercial positions provided the total amount of commercial time
does not exceed 5 minutes for the half hour. It will be Rights Owner's
responsibility to allocate the advertisers' commercials within the above format.
5. Commercial Billboards
Any advertiser sponsoring 90 seconds or more in the Program will be entitled to
a 5-second billboard. It is understood that there will be two (2) sets of
billboards during the telecast, and in no event may the open billboards or
closing billboards exceed 20 seconds (total 40 seconds).
6. Integrated Networking Charge
Each advertiser will be responsible to NBC for an Integrated Networking charge
of $250 gross for each commercial insertion.
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7. Cancellation of Event
If the Event is delayed or cancelled for any reason, Rights Owner will be
required to make available alternate programming, approved by NBC, such approval
not to be unreasonably withheld, on a commercial basis to fill the time period
of the delayed or cancelled telecast. In the event Rights Owner is unable to
provide acceptable alternate programming, NBC will endeavor to find replacement
programming, in which case Rights Owner will be liable to NBC for the difference
between the Time Charge Amount and the amount NBC receives for the time period
specified in the first paragraph of this Agreement, it being understood and
agreed that if NBC is unable to sell the time period Rights Owner will be
responsible for the payment of the full Time Charge Amount.
8. Compliance and Practices
Rights Owner shall be obligated, at no additional cost to NBC, to comply with
the requirements of NBC's Department of Broadcast Standards. The Department
shall have the approval of the title of the Program. The title set forth in the
preamble is deemed acceptable to NBC. Rights Owner further agrees to execute the
Sports Program Disclosure Letter and associated forms, attached hereto, as a
condition precedent to NBC's obligation to make available the time period
specified in the first paragraph of this agreement. Rights Owner, in addition,
shall supply to NBC's Department of Broadcast Standards, at the earliest
possible opportunity, the complete rules, if any, for the conduct of any
competition contained in the Program (including tie-breaking procedures); full
disclosure of all prize monies available to Event participants and whether or
not guaranteed appearance fees were promised, if any; identification of any
scheduled commercial announcements which include appearances of any of the
participants in the Event; and an explanation of any and all forms of in-program
exposure to be made available to commercial sponsors by Rights Owner. NBC's
Department of Broadcast Standards reserves the right to reject such in-program
exposure including signage if it violates NBC Broadcast Standards. Without
limiting the generality of the foregoing provisions, Rights Owner specifically
acknowledges that any and all arrangements involving or contemplating receipt of
production assistance in any form whatsoever, from personnel at the Event site
in connection with the coverage of the Event, shall be subject to the prior
approval of NBC's Department of Broadcast Standards.
9. Announcers and Production Personnel
NBC shall furnish, at its expense, the on-air talent and a
coordinator, who will insure that the calibre of production meets NBC's
standards. NBC may designate representatives to act in consulting capacities,
and they may, at NBC's option, be in attendance through all phases of coverage
and editing.
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No such consultation or attendance of NBC personnel shall relieve Rights Owner
of total responsibility for coverage and satisfactory completion of the finished
product according to NBC's telecast requirements.
NBC shall use its best efforts to cause the NBC talent assigned to the Event to
meet with the Program producer prior to the Event, at Rights Owner's cost.
10. Warranty and Indemnity
Rights Owner warrants and represents that it has the right to enter into and to
make these arrangements with NBC, and has obtained an agreement from each
participant in the Event to appear on NBC, and to grant NBC the rights granted
herein. Rights Owner further represents and warrants that it or its advertisers
have obtained all necessary rights for the performance and use of all the
commercial announcements including the talent, music and other material
incorporated therein and billboards (the above shall hereinafter be collectively
referred to as the "Advertising Material"). NBC warrants and represents that it
has the right to enter into and to make these arrangements with Rights Owner.
Rights Owner will defend and indemnify NBC, the stations over which the Program
is carried and their respective officers, directors, and employees against any
claims, actions, judgments, liabilities, damages and losses (including
reasonable attorney's fees) arising out of wholly or in part (i) the licensed
use of the elements furnished by Rights Owner including all elements of the
Program and all Advertising Material, (ii) the exercise of rights granted to NBC
herein, and (iii) the breach of any of the representations, warranties or
agreements made by Rights owner herein and NBC will so defend and indemnify
(including reasonable attorney's fees) Rights Owner as to representations,
warranties and agreements of, and the elements furnished by NBC. For purposes of
these indemnities, either indemnifying party may use counsel of its own choice.
The indemnifying party shall control the defense and settlement of such claims.
The indemnified party shall promptly inform the indemnifying party of any claim
upon its being made, and shall cooperate in the defense or settlement of such
claim.
11. Rights to Subsequent Events
The parties hereby agree that the Time Charge Amount for the program featuring
the next Event (the "1997 Program"), if Rights Owner elects to televise the
Event, the following year will be $450,000 for a two-hour time period and the
forty (40) units contained herein. During the period beginning with the
conclusion of the 1997 Program and ending four (4) months thereafter, the
parties hereto shall discuss in good faith the terms and conditions for the
television exhibition rights to the next
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Event. If the parties agree upon such terms and conditions, similar discussions
shall take place at comparable times for the television exhibition rights to the
subsequent Event.
If the parties do not reach agreement regarding such subsequent Event, Rights
Owner shall not enter into an agreement with any third party on terms that are
more favorable than those last offered by NBC without first affording NBC an
opportunity to match all such terms that can be reduced to a determinable amount
of money. NBC shall have five (5) business days after notice of such terms by
which to accept or reject the same. If NBC rejects said offer or fails to accept
the same within the time above specified, then and then only shall Rights Owner
be free to reach agreement with such third party on such terms. If Rights Owner
does not accept such offer, the terms hereof shall apply to any subsequent offer
received by or made by Rights Owner.
Rights Owner shall not accept, and NBC shall not be required to meet the
provisions of, any such offer unless it has been reduced to writing, signed by
the offeror, and delivered to NBC with Rights Owner's written advice to NBC as
provided above, together with Rights Owner's written acknowledgement of
willingness to accept same. NBC's failure to accept shall not constitute a
waiver for the first refusal with respect to subsequent offers.
12. General
All material furnished in connection with the above telecast must comply with
NBC's customary technical, programming and broadcast standards, policies and
requirements.
It is understood and agreed that due to exigencies, world events, or other
conditions beyond NBC's control, NBC may interrupt the telecast of the Program.
In such case, the "Time Charge Amount" shall be reduced by an amount equal to
the Time Charge Amount divided by forty (40) multiplied by the difference of
forty (40) minus the number of Units actually included in the telecast (e.g.,
$430,000 - ($430,000/40 X [40-38] = $408,500).
The parties further understand and agree that NBC may incorporate into the
Program an NBC Sports Update segment (the "Segment") of up to three (3) minutes
and twenty-five (25) seconds in length during the Program, which may contain,
subject to Rights Owners' prior approval, not to be unreasonably withheld, a
commercial unit inside the Update segment.
Rights Owner agrees that NBC shall have the right to display at the Event,
within view of cameras or otherwise, certain NBC banners in such locations as
are reasonably selected by NBC and approved by Rights Owner not to be
unreasonably withheld; and NBC agrees that advertisers of the Program and Event
shall have the right to display at the Event, within view of cameras or
otherwise, advertiser banners on the dasherboards at ice level which are
appropriate for such Event.
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This is the entire agreement between the parties which is to be interpreted
under the laws of the State of New York, excluding all principles of referral to
laws of other jurisdictions which might otherwise be applicable under doctrines
of conflicts of laws.
Please indicate your acceptance and agreement by September in the space
indicated below.
Very truly yours,
NBC Sports, a Division of
NATIONAL BROADCASTING COMPANY, INC.
By /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
Title: VP
ACCEPTED AND AGREED:
D & F CONSULTING, Ltd.
By /s/ XXXXXXX X. XXXXXX
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
