NATIONAL GEOGRAPHIC PROGRAM SYNDICATION
MEMORANDUM OF UNDERSTANDING
PARTIES
This binding Memorandum of Understanding (the "MOU") dated as of July 1, 2000 is
by and between:
A: International Creative Management, Inc. ("ICM")
B: NGC Network Asia, LLC ("NGCA")
C: China Central Television ("CCTV")
D. Pac Pacific Group Int'I, Inc. of USA ("PPGI")
Collectively, "ICM," "NGCA," "CCTV," and "PPGI," are referred to herein as the
"Parties."
INTRODUCTION
1. NGCA has acquired the right from NGT, Inc. d/b/a National Geographic
Television ("NGT") to distribute certain National Geographic branded
programs for unencrypted terrestrial TV transmission in the People's
Republic of China (the "Territory"). For the purposes of this MOU, the
Territory shall not include Hong Kong, Macau and Taiwan.
2. NGCA will provide to CCTV in each week of the Term (as defined in Paragraph
5) thirty (30) minutes of National Geographic branded programs (the
"Programs") for a total of twenty-six (26) hours in the aggregate for each
twelve (12) month period during the Term for CCTV to syndicate in
accordance with the terms and conditions contained in this MOU and a long
form agreement which the Parties intend will be negotiated and executed as
soon as practi- cable hereafter. Pending execution of the Long Form
Agreement, this MOU will be valid and binding on the Parties.
3. The subject matter of the Programs to be provided to CCTV by NGCA for
exhibition pursuant to this MOU shall be of the following nature:
(a) Documentary programming in the field of science;
(b) News programming in the field of science and science-related issues; and
(c) Documentary programming of the adventure genre.
Specific titles of the Programs are to be selected in good faith by NGCA
with the assistance of PPGI, and approved by CCTV. CCTV will not
unreasonably withhold its approval of selected programming that meets the
above criteria.
4. It is intended that the Programs will be syndicated to appear in the
Territory at regular weekly times during the Term, with the first-run
telecast of each episode on CCTV Channel 1 national terrestrial television
network on Sunday afternoon beginning no earlier than 1:00 p.m. and no
later than 2:00 p.m., to be repeated on CCTV Channels 2 or 7 national
terrestrial television network on .the following Tuesday evening beginning
no earlier than 4:00 p.m. and no later than 5:00 p.m.
TERM
5. The arrangement contemplated in this MOU will be conducted for a trial
period of 12 months commencing from November 5, 2000 (the "Start Date")
and, subject to Paragraph 6, ending on November 4, 2001 (the "Initial
Term"). Unless one or more of the Parties gives all of the remaining
Parties thirty (30) days' prior written notice of its request to terminate
this MOU (in which case the MOU will terminate upon the expiration of the
Initial Term), the Initial Term shall automatically renew for a period of
one (1) year (the "Renewal Term"). The Initial Term and the Renewal Term
are sometimes collectively referred to herein as the "Term."
6. This MOU may be terminated early only by:
a) NGCA, if during the Initial Term or the Renewal Term it has not
been able to generate sufficient advertising revenues to pay to
NGT US$1,500 per Program aired (US$78,000 in the aggregate per
each 12 month period);
b) NGCA, if during the Term it becomes unable to engage in its core
business (i.e., syndicating channel blocks to cable operators) for
more than 30 days due to governmental regulation;
c) any Party, if another Party to whom it is owed a duty or
obligation has (i) materially breached this MOU with respect to
said duty or obligation and (ii) failed to cure such breach within
30 days of receiving written notice of such breach;
d) any Party pursuant to, and in accordance with, Paragraph 17 here-
under; or
e) mutual agreement by all Parties.
CHINA SYNDICATION
7. NGCA shall grant to CCTV an exclusive license under copyright for
terrestrial use only during the Term of the free television distribution of
the Programs (i.e., 26 hours in the aggregate for each 12 month period
during the Term) on CCTV Channels 1, 2 and 7 in the Mandarin Language (the
"Language") for the entire Territory. During the Term, CCTV shall:
a) Make available two weekly regular 30-minute prime slots each week of
the Term (each, a "Slot") during which each episode of the Programs
will be initially telecast on CCTV Channel 1, with a repeat telecast on
CCTV Channels 2 or 7;
b) Provide NGCA with not less than 180 seconds of advertising time in
connection with each transmission of each 30-minute Slot and grant the
right to NGCA to sell sponsorships for each Program;
c) Be entirely responsible for paying the costs of import duties,
tax-related expenses, packaging and promotional expenses, and all
other such ancillary expenses incurred by CCTV in connection with
exploitation of the Programs in the Territory;
d) Translate the commentary of each Program, dub each Program, and
otherwise localize the Programs into the Language, at its own cost,
throughout the Term; and
e) Have the right to edit the Programs to ensure their compliance with
the laws of the Territory.
8. NGCA, through its representatives Star TV and Yuntu Advertising, shall be
solely responsible for selling sponsorships and airtime for the Programs in
the Slots to advertisers. NGCA further shall be solely responsible for
collecting the Gross Ad Revenue (as defined in Subparagraph 10.1 below)
generated from such sales and distributing the appropriate shares of said
revenue to the Parties as set forth below. For purposes of clarification,
the Gross Ad Revenue shall be calculated and distributed in United States
Dollars.
9. The content of the advertising and its technological standard must be
approved in advance by CCTV for the sole purpose of determining compliance
with the laws of the Territory.
10. LICENSE FEE
10.1 "Gross Ad Revenue" is defined as 100% of the revenue received by, or
credited to, NGCA or its affiliated entities, or the successors, licensees
or sub-licensees (without deducting any payments for license fees to be
paid to NGT) and/or assigns of any of the foregoing, from the sale or other
grant of advertising time or sponsorship in connection with the Programs.
10.2 "Adjusted Gross Ad Revenue" is defined as Gross Ad Revenue less the
following sums, which shall be distributed as follows:
10.2.1 an advertising agency commission, which shall not exceed 15% of
Gross Ad Revenue;
10.2.2 a commission to NGCA's advertising representative (Star TV or Yuntu
Advertising), which shall not exceed 15% of 85% of the Gross Ad
Revenue (or 12.75% of the Gross Ad Revenue); and
10.2.3 all substantiated, and reasonable out-of-pocket expenses incurred by
PPGI directly in connection with the acquisition and exhibition of
the Programs on CCTV prior to April 1, 2000, in an amount not to
exceed Twenty-Five Thousand United States Dollars (US$25,000).
10.3 "Net Ad Revenue" is defined as Adjusted Gross Ad Revenue less the
following sums, which shall be distributed as follows:
10.3.1 a payment to NGCA equal to one thousand five hundred United States
Dollars (US$1,500) per Program out of the Adjusted Gross Ad Revenue,
to be credited against, and serve to reduce, NGCA's share of the Net
Ad Revenue;
10.3.2 a payment to ICM equal to 7% of the Adjusted Gross Ad Revenue;
10.3.3 in the Renewal Term only, a sales commission fee paid to NGCA equal
to 7% of the Adjusted Gross Ad Revenue;
10.3.4 a fee to Nelson, Guggenheim, Xxxxxx and Xxxxxx EQUAL TO 1 % OF THE
ADJUSTED GROSS Ad Revenue.
10.4 The Net Ad Revenue will be distributed as follows: 45% thereof to NGCA,
35% thereof to PPGI, and 20% thereof to CCTV for the purpose of
covering the costs and expenses specified in Subparagraph 7(c) above.
10.5 Monies will be distributed by NGCA out of the Gross Ad Revenue pursuant to
Subparagraphs 10.2, 10.3 and 10.4 on a quarterly basis throughout the Term.
11. ICM, PPGI and/or CCTV and/or each of their authorized representatives will
have the right during the Term and for a period ending three years
following termination of this MOU, but no more than every six (6) months
upon five (5) business days' advance written notice for whatever cause, at
its sole cost and expense during business hours, to audit all books,
returns and records 'of NGCA, including, but not limited to, electronic
data, and to make copies thereof for the purpose of verifying the accuracy
of the information supplied by NGCA under this MOU. ICM, PPGI and/or CCTV
or each of their authorized representatives will for this purpose be
afforded full access to all such books, returns and records related to the
calculation of the Gross Ad Revenue and the Adjusted Gross Ad Revenue. If
such Parties so request, NGCA shall make copies of such books and records
available to the Parties in New York, New York; provided, however, that the
copies are made at such Parties' own expense. The exercise by these Parties
of any right to audit will be without prejudice to any of their other
rights or remedies.
RIGHTS, HOLD-BACK AND PROMOTION
12. NGCA reserves all rights to the Programs not expressly granted to CCTV
under this MOU. For the avoidance of doubt, CCTV may not telecast any
Program (a) more than twice (prime-time and next day fringe-time repeat);
(b) via any mode of television or media distribution other than free
terrestrial television; (c) on any service other than CCTV Channels 1, 2 or
7; and (d) in any language other than the Language.
13. NGCA shall have the exclusive right to use any Language voiceover tracks
created by CCTV for all the Programs used under this MOU. Upon request,
CCTV must submit to NGCA within 30 days of such request the required
Language voiceover tracks in the format requested by NGCA (at NGCA's cost,
including all material and shipping costs).
14. The master tapes, scripts, and promotional materials are the property of
NGCA and must be returned to NGCA after usage, and in no event shall be
kept after the expiration of the Term.
15. Suitable arrangements are to be agreed upon in good faith between NGCA and
CCTV to promote the telecast of the Programs and the National Geographic
Channel brand in the Territory on all CCTV channels.
MISCELLANEOUS
16. Any provision of this MOU, or any riders or amendments thereto, found to be
contrary to any law or regulation of an administrative or governmental
agency or body will not affect the other provisions of this MOU or any
riders or amendments thereto, and said other provisions will continue in
full force and effect.
17. In the event that the performance of the obligations of one or more of the
Parties pursuant to this MOU shall be adversely affected by an event of
force majeure (as defined herein), such obligations under THE MOU, AT THE
OPTION OF THE ADVERSELY AFFECTED PARTY(S), FOLLOWING REASONABLY PROMPT
WRITTEN NOTICE to all remaining parties,
shall be suspended during the continuance of such event of force majeure
and, if such suspension occurs, the Term of the MOU shall be extended for a
period equal to the period of suspension. If the adversely affected
party(s) shall have provided notice of its/their election to suspend
its/their obligations under the MOU as aforesaid, the remaining Parties
may, if such period of suspension has continued for more than ninety (90)
days, by prompt written notice to the adversely affected party(s) terminate
this MOU, unless the adversely affected party(s), by written response to
the remaining parties within ten (10) business days of the date of the
remaining parties' notice, terminates the period of suspension and
reinstates this MOU. As used herein, the term "force majeure" includes acts
of God, epidemics, quarantines, earthquakes, landslides, storms, floods or
other adverse weather conditions, explosions, fires or lightning, breakdown
of facilities or machinery, blackouts and other interference with required
operations resulting from energy shortages, wars, police actions,
revolutions, insurrections, civil disturbances, blockades, embargoes,
strikes, work stoppages, work slowdowns and other labor conflicts involving
the parties' respective employees or other persons whose continued
employment affects the parties' respective businesses, riots, arrests,
boycotts, and orders or directions of any government _de JURE or de FACTO
or of any instrumentality thereof.
18. The English and Mandarin Chinese counterparts of this MOU shall both have
the same force, effect and validity as if each was one and the same
document.
19. In the event of a dispute concerning advertising and/or sponsorship for the
Programs pursuant to this MOU, such a dispute will be resolved by
arbitration in New York, New York before a single retired judge or attorney
with at least 10 years experience in the entertainment industry, in
accordance with the laws of the State of New York, United States of
America, and with the then existing rules for Commercial Arbitration of the
American Arbitration Association. In the event of a dispute only concerning
broadcast of the Programs and/or the rights granted pursuant to this MOU,
such a dispute will be resolved by arbitration in the Territory, in
accordance with the laws and regulations of the Territory. In either such
arbitration, judgment upon any award may be entered by any state, federal
or foreign court having jurisdiction thereof. The Arbitrators decision in
either such arbitration shall be final and binding upon the Parties. The
Parties intend either such arbitration to be valid, enforceable,
irrevocable, and construed as broadly as possible. The prevailing Party(s)
in either such arbitration shall recover its reasonable out-of-pocket costs
and attorneys' fees from the losing Party(s).
20. This MOU may not be altered or modified except in writing. Pending the
execution of the Long Form Agreement, this MOU is complete and binding, and
embraces the entire understanding between the Parties, all prior
understandings, either oral or written having been merged into this MOU.
21. Any notice or other communication given or made under this MOU will be in
writing and delivered personally or by courier or sent by facsimile
transmission or by first-class prepaid airmail letter, addressed as
follows:
(a) if to China Central Television, to Sun Suping
Deputy Director
Scientific & Educational Department
China Central Television
Xxxxxx 00 Xxxxxx Xxxx
Xxxxxxx, Xxxxx 000000
Facsimile Transmission NUMBER: 011-86-10-6851-4453
(b) if to Pac Pacific Group Int'I Inc. of USA, to Xxxx Xxxxx
000 Xxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Facsimile transmission number: (000) 000-0000
With a copy to Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx Enterprises, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile transmission number: (000) 000-0000
With a copy to Xxxxxx X. Xxxxx, Esq.
Nelson, Guggenheim, Xxxxxx & Xxxxxx
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile transmission number: (000) 000-0000
(c) if to International Creative Management, Inc., to Xxxxxxx X. Xxxx,
Chairman and CEO
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Facsimile transmission number: (000) 000-0000
With a copy to Xxxxxxx X. Xxxx, Esq.
Senior Vice President & General Counsel
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Facsimile transmission number: (000) 000-0000
(d) if to NGC Network Asia, LLC, to Xxxx X Xxxxx
Managing Director
One Harbourfront, 8t~' Floor
00 Xxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxx Xxxx SAR
Facsimile transmission number: 852 2621 8826
With a copy to Xxxx Xxx-min
Director - Distribution China
0000, Xxxxx Xxxxx
Xxxxxxx Xxxxx Xxxxxx
0 Xxxxxxxx Xxxx, Xxxxxxxx Xxxxxxxx
Xxxxxxx 000000 Xxxxx
Facsimile transmission number: 86 10 8529 8462
or to such other address or facsimile transmission number as the relevant
addressee may hereafter by notice hereunder substitute. Any such notice or other
communication will be deemed to have been duly served, given or made (i) in the
case of posting, twenty-four (24) hours after the envelope was properly
addressed, prepaid, registered and posted; and proof that any such envelope was
properly addressed, prepaid, registered and posted by air mail will be
sufficient evidence that such notice or other communication has been duly
served, given or made; or (ii) in the case of delivery, when left at the
relevant
address; or (iii) in the case of facsimile transmission, upon receipt by the
addressee of the complete text in legible form.
Signed by duly authorized representatives of the Parties:
CHINA CENTRAL TELEVISION
By: /s/ Sun Suping
Its: Deputy Director
Date: October 26, 2000
PAC PACIFIC GROUP. INT'L, INC. OF USA
By: /s/ Xxxx Xxxxx
Its: CEO
Date: September 29, 2000
INTERNATIONAL CREATIVE MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxx
Its: SVP and General Counsel
Date: September 29, 2000
NGC NETWORK ASIA, LLC
By: /s/ Xxxx X Xxxxx
Its: managing Director
Date: October 29, 2000
AMENDMENT
TO THE
NATIONAL GEOGRAPHIC PROGRAM SYNDICATION
MEMORANDUM OF UNDERSTANDING
This Amendment modifies the Memorandum of Understanding ("MOU") concerning
National Geographic Program Syndication to be entered into by and between
International Creative Management, Inc. ("ICM"), NGC Network Asia, LLC ("NGCA"),
China Central Television ("CCTV") and Pac Pacific Group Int'l, Inc. of USA
("PPGI"). This Amendment shall be executed concurrently with the execution of
the MOU. The Parties hereby agree to modify the MOU as follows:
1. CCTV agrees to broadcast the Programs according to Paragraph 4
of the MOU during the Initial Term and will use its best
efforts to ensure the same time slot Burin; the Renewal Term.
However, if the Programs cannot be broadcast in the same or a
substantially similar time slot during the Renewal Term, CCTV
shall notify the Parties in writing as soon as possible. The
Parties will then negotiate in good faith the change of the
time slot. If the Parties do not reach consensus on the
change, NGCA shall have the unilateral right to terminate the
MOU as of November 4, 2001, by providing written notice
thereof to the Parties.
2. Notwithstanding Paragraphs 18 and 19 of the MOU, if CCTV
becomes a party to any disputes or legal procedures concerning
the MOU and this Amendment, such disputes or legal procedures
shall be resolved in accordance with the laws and regulations
of the Territory. Furthermore, such disputes and legal
procedures shall be resolved by the arbitration of the China
International Economics and Trade Arbitration Committee in
accordance with its then-current arbitration rules. The
Chinese version of the MOU and this Amendment will be the
version used for the arbitration.
3. The definitions of the "Parties", the "Initial Term", the
"Renewal Term", the "Territory" and the "Programs" in this
Amendment are the same as in the MOU.
The Parties agree that this Amendment is a modification to the MOU. This
Amendment has the same legal effect as the MOU and is binding on the Parties.
Any provisions and items in the MOU that conflicts with this Amendment are
invalid, but the entirety and effect of all remaining provisions and items shall
remain intact.
Signed by duly authorized representatives of the Parties:
CHINA CENTRAL TELEVISION
By: /s/ Sun Suping
Its: Deputy Director
Date: April 2, 2001
PAC PACIFIC GROUP. INT'L, INC. OF USA
By: /s/ Xxxx Xxxxx
Its: CEO
Date: April 6, 2001
INTERNATIONAL CREATIVE MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxx
Its: SVP and General Counsel
Date: April 13, 2001
NGC NETWORK ASIA, LLC
By: /s/ Xxxx X Xxxxx
Its: managing Director
Date: April 2, 2001
RIDER TO THE
NATIONAL GEOGRAPHIC PROGRAM SYNDICATION
MEMORANDUM OF UNDERSTANDING
Reference is made to the Memorandum of Understanding and the Amendment thereto
(collectively referred to herein as the "MOU') between and among International
Creative Management, Inc. ("ICM"), NGC Network Asia, LLC ("NGCA"), China Central
Television ("CCTV") and Pac Pacific Group Int'1 Inc. of USA ("PPGI"). Unless
otherwise specified, all capitalized terms used herein shall have the same
meaning as is ascribed to them in the MOU.
Notwithstanding anything to the contrary contained in the MOU, the Parties
hereby agree that, due to delay in executing the MOU, NGCA may (but shall not be
required to) postpone the November 5, 2000 Start Date by up to thirty (30) days,
thereby extending the expiration of the Term (and all other relevant dates set
forth in the MOU) by the number of days that the Start Date was so postponed, by
providing prompt written notice to all remaining Parties.
Except as herein modified and amended, all the terms and conditions of the MOU
shall continue to be in full force and effect.
Signed by duly authorized representatives of the Parties:
CHINA CENTRAL TELEVISION
By: /s/ Sun Suping
Its: Deputy Director
Date: October 26, 2001
PAC PACIFIC GROUP. INT'L, INC. OF USA
By: /s/ Xxxx Xxxxx
Its: CEO
Date: October 11, 2001
INTERNATIONAL CREATIVE MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxx
Its: SVP and General Counsel
Date: October 12, 2001
NGC NETWORK ASIA, LLC
By: /s/ Xxxx X Xxxxx
Its: managing Director
Date: October 28, 2001
