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EXHIBIT 10.19
PROGRAM LICENSE AGREEMENT
Dated As Of May 12, 1998
This Program License Agreement shall serve to confirm the agreement
between Hallmark Entertainment Distribution Company ("HEDC") and H&H
Programming - Asia, LLC ("Licensee") in connection with Licensee acquiring from
HEDC certain exhibition rights to various HEDC product as follows:
1. Licensed Product. Licensee agrees to license from HEDC and HEDC
agrees to license to Licensee each program set forth in Schedule "A" hereto
(each, a "Picture") for exhibition on The Xxxxxx Channel television service
(the "Service") in the Territory. HEDC shall be responsible for dubbing and/or
subtitling each Picture, as appropriate, in the language(s) in which the
Service will be telecast in the Territory.
2. Territory. The licensed territory shall consist, on any given date of
the "Territory" as defined in the Operating Agreement dated as of the date
hereof between The Xxx Xxxxxx Company and Hallmark Entertainment Network,
Inc. relating to the Licensee.
3. Licensed Exhibitions. Licensee will license each Picture for broadcast
on the Service for three windows in the Territory as set forth below and
Licensee shall be entitled to its customary number of telecasts during each
window. HEDC shall not license any television rights (standard or nonstandard)
for any Picture to any third party during Licensee's three windows for such
Picture. Licensee shall have the exclusive standard and nonstandard television
rights during each of its three windows. Additionally, Licensee shall be
permitted to utilize and exhibit excerpts of up to 3 minutes in length from any
Picture to advertise and promote the Pictures and The Xxxxxx Channel.
(a) With respect to each Picture, the first transmission window,
(the "First Window") shall commence upon the date such Picture is
available in the Territory as set forth on Schedule "A" hereto
(the "Availability Date") and shall expire 18 months after
Licensee's initial transmission of such Picture in the
Territory, provided, however, that such initial transmission
shall occur or be deemed to have occurred prior to the one year
anniversary of Availability Date (the "First Window Expiration
Date"). Following the First Window Expiration Date, HEDC shall
have the right to license such Picture to a third party provided
that such third party license is effective within 12 months after
the First Window Expiration Date and expires within such length
of time as is customary in such media and territory. The date of
such expiration shall be the "Second Availability Date." If HEDC
does not enter into such third party license agreement prior to
the one year anniversary of the First Window Expiration Date,
then the Second Availability Date shall be two years after the
First Window Expiration Date or such earlier date as either
party, at its sole election, stipulates.
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(b) The Second Window shall commence upon the Second Availability
Date and shall expire 18 months thereafter (the "Second Window
Expiration Date"). Following the Second Window Expiration Date,
HEDC shall have the right to license such Picture to a third
party thereafter, provided that such third party license is
effective within 12 months after the Second Window Expiration
Date and expires within such length of time as is customary in
such media and territory. The date of such expiration shall be
the "Third Availability Date." If HEDC does not enter into such
third party license agreement prior to the one year anniversary
of the Second Window Expiration Date, then the Third Availability
Date shall be two years after the expiration of the Second Window
Expiration Date, or such earlier date as either party, at its
sole election stipulates.
(c) The Third Window shall commence upon the Third Availability Date
and shall expire 18 months thereafter.
4. License Fees. For and in consideration of the rights and licenses
granted to Licensee hereunder, Licensee shall pay to HEDC such License Fees, on
a Picture-by-Picture basis, as are specifically set forth in Schedule "B". The
License Fee shall constitute payment for one window and therefore shall be
payable for each of the three windows. The License Fee for each window shall be
payable in six equal installments; one installment payable at the end of each of
six consecutive calendar quarters commencing with the calendar quarter during
which the respective window commences. The amounts of such License Fees shall
remain in effect until December 31, 1999. Commencing January 1, 2000, the
amounts of such License Fees shall increase by 5% per year on a cumulative basis
and such increase shall apply to any and all windows commencing after such
increase.
5. Other Product. Licensee shall have a right of first negotiation
with respect to acquiring for broadcast on the Service any television product
which is not covered by this Agreement for which HEDC, Hallmark Entertainment,
Inc. or any subsidiary of Hallmark Entertainment, Inc. controls the rights in
the Territory during the Term, whether produced prior to or after the date of
this Agreement, subject to those existing output distribution arrangements
identified on Schedule "C" attached hereto.
6. Standard Terms & Conditions. The Standard Terms and Conditions
attached hereto as Exhibit I are incorporated by reference and shall constitute
firm and binding terms and conditions of the Agreement as if recited herein.
In the event of any inconsistency between such Standard Terms and Conditions
and those set forth above, the latter shall prevail.
In Witness Whereof, the parties hereto have executed this agreement as of
the date set forth above.
HALLMARK ENTERTAINMENT H & H PROGRAMMING-ASIA, LLC
DISTRIBUTION COMPANY
By /s/ XXXXXXX X. XXXXXX By /s/ XXXXXXX X. XXXXXX
---------------------------- ------------------------------
Title VP Title President & COO
------------------------- ----------------------------
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EXHIBIT I
STANDARD TERMS AND CONDITIONS
1. DELIVERY OF PRINTS.
(a) Licensor will deliver or cause to be delivered to Licensee ( ) type
_______ videotape of each Picture licensed by this Agreement (hereinafter
collectively called "prints" and individually called "print"). Delivery of each
print to Licensee or to Licensee's agent shall be deemed to be delivery by
Licensor to Licensee hereunder. All costs and charges in connection with such
delivery, including without limitation shipping charges and insurances thereon
shall be borne by Licensee.
(b) Licensee agrees to give Licensor not less than sixty (60) days prior
written notice of the scheduled date of each telecast. Licensee shall notify
Licensor by telegram within seventy-two (72) hours after such receipts if such
print is physically defective for television broadcasting by customary industry
standards. In the event any print has not reached its destination at least
fifteen (15) days in advance of the date of scheduled telecast thereof, Licensee
shall notify Licensor by telegram of telefax. If Licensee so notifies Licensor
with respect to any such physical defect of failure of delivery, as aforesaid,
and Licensor does not deliver to Licensee a replacement print of the same
picture (or another picture of comparable quality) in time for the scheduled
telecast, such telecast shall be deemed eliminated and the picture withdrawn, as
provided in subparagraph (b) of paragraph 11 of this Agreement. Failure of
Licensee to give Licensor such notice as aforesaid shall be deemed Licensee's
irrevocable acknowledgement that such print has been received and is
satisfactory in all respects.
2. RETURN OF PRINTS. Licensee agrees to return to Licensor, prepaid, within
forty-eight (48) hours after the last licensed telecast of each picture, the
print (which includes the container thereof), in the same form and condition as
delivered by Licensor, ordinary wear and tear from proper use excepted. Such
print shall be returned to Licensor (along with any other material furnished by
Licensor) as specified in Schedule "A" hereto, or to any other party, or places
as Licensor may from time to time designate. Additionally, Licensee agrees to
return to Licensor, prepaid, all other material that may have been furnished by
Licensor, within one (1) week following completion of the use of such material
by Licensee, but in no event later than after the last licensed telecast. If any
prints are lost, stolen, destroyed or damaged, Licensee shall pay Licensor the
cost of replacement thereof, within seven (7) days after billing by Licensor.
Such payment shall not be construed to transfer to Licensee any right, title or
interest in or to said prints. Licensor may request that Licensee have the
prints destroyed and in such event Licensee agrees to do so, and to furnish
Licensor with Certificates of Destruction.
3. ALTERATION OF PRINTS. Licensee shall telecast each picture as delivered,
in its entirety and Licensee agrees not to cut, change, alter, modify or add to
the prints of the pictures, or any of them, without Licensor's prior written
consent. However, Licensee may insert commercial material and make such minor
cuts as are necessary to conform to time segment requirements but under no
circumstances shall Licensee delete or reposition the copyright notice or the
credits and xxxxxxxx incorporated in the pictures as delivered by Licensor. In
no event may
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any such insertions of commercial material or minor cuts to conform to time
segment requirements adversely affect the artistic or pictorial quality of the
picture or interfere with its continuity.
4. USE OF PRINTS
(a) Licensee shall telecast said pictures only from the originating
transmitter(s) and antenna of the station(s) specified herein, or, if none is
specified, to transmitters within the Territory. Licensee shall not, make,
authorize or permit any telecast hereof to be amplified, re-transmitted or
relayed on the same or on any other frequency by any translator or booster
station, community antenna system, or any other device or method not
specifically authorized herein.
(b) Licensor reserves the right to change the title of any
picture(s) covered by this Agreement and to license to third parties film
excerpts of up to five (5) minutes in length from any picture for television
exhibition in any area at any time.
(c) In the event Licensee does not telecast any picture hereunder
the number of times permitted hereunder, the Licensee shall, nevertheless, pay
Licensor the applicable licensing fee specified herein with respect thereto as
if such picture had been telecast. The paragraph shall not apply, however, in
the case of a telecast which has been eliminated and the picture withdrawn
pursuant to subparagraph (b) of paragraph 11 of this Agreement.
(d) Licensee shall not acquire any right, title or interest in or to
any picture or print hereunder and shall not make, authorize or permit any use
of the picture or print other than as specified herein. Additionally, Licensee
shall not duplicate, reproduce or copy same in any manner or form whatsoever.
(e) Licensee acknowledges that the title to the pictures and prints
shall remain in Licensor and Licensee acknowledges that with respect to each
picture and the literary, dramatic and music material included in each and upon
which each is based, Licensor hereby expressly reserves any and all rights not
herein specifically granted to Licensee, including, but without limitation
thereof, all theatrical, non-theatrical and home video rights and all remake
rights and sequel rights, and that such reserved rights may be exercised and
exploited by Licensor concurrently with and during the term hereof, freely and
without limitation or restriction.
5. USE OF NAMES FOR ADVERTISING. Licensee warrants and agrees that (a)
it will abide by and comply with the advertising and billing of each licensed
picture in accordance with such advertising, billing instructions as Licensor
may furnish Licensee, and that such advertising shall be made by Licensee so as
not to constitute an express, implied, direct or indirect endorsement of any
product, service or sponsor; (b) it will not advertise or announce in any
manner or media any title changed by Licensor of any picture or pictures
withdrawn by
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Licensor; (c) it will abide by and comply with the screen billing in the same
form as it appears on the print of the picture or pictures; and (d) it will
indemnify Licensor against all costs, damages, and expenses, including, but not
limited to reasonable attorney's fees and expenses, incurred or caused to
Licensor by reasons of any actual or alleged breach by Licensee of the
provisions of this paragraph.
6. FORCE MAJEURE. If Licensor shall fail to make timely delivery of any
print or prints hereunder, by reason of any act of God, war, fire, flood,
strike, labor dispute, public disaster, transportation or laboratory
difficulties, order or decree of governmental agency or tribunal or another
similar or dissimilar cause beyond the control of Licensor, such failure on the
part of Licensor shall not be deemed to be a breach of this Agreement.
7. PAYMENT. All payments by Licensee to Licensor herein shall be made in
United States dollars by wire transfer as instructed by Licensor. Licensee shall
obtain at its expense all necessary permits from governmental authorities to
make all payments to Licensor required hereunder.
If any payment is prohibited to be made in the stipulated currency and a license
for payment in the stipulated currency cannot be obtained, Licensor may demand
payment in local currency at the rate of exchange in effect on the due date or
on the date of actual payment, whichever results in the greater amount in local
currency or terminate the agreement with respect to such territory. Licensee
shall pay Licensor for any and all costs, including reasonable attorney's fees
and expenses, incurred by Licensor in collecting any sums due under this
Agreement.
8. TAXES. Licensee shall pay and hold Licensor harmless from all taxes
(excluding Licensor's income and franchise taxes), censorship charges or any
other charges (including interest and penalties on such amounts), assessments
and other fees now or hereafter imposed or based upon or resulting from the
delivery, exhibition, possession or use hereunder to or by the Licensee of the
prints and pictures, in whole or in part, licensed hereunder. Licensee shall
immediately provide Licensor with all written documentation requested by
Licensor, substantiating such payments including official governmental receipts.
Payment by the Licensee of the foregoing shall in no way diminish the license
fees due Licensor hereunder. To the extent that payment of any of the foregoing
is made by Licensor, Licensee shall reimburse Licensor on demand, and upon the
failure of Licensee to so reimburse Licensor, Licensor shall have all the
remedies herein for the collection of unpaid license fees, as well as all other
remedies provided by law.
9. WARRANTY AND INDEMNITY. Licensor represents and warrants that it has the
right to grant this license for the telecasting of the pictures herein
specified, including the sound tracks forming a part thereof, and that such use
of by Licensee will not violate the right of others. Licensor agrees to
indemnify and hold Licensee, its officers, employees, successors and assigns
free and harmless from any and all claims, damages, liabilities, costs or
expenses, including reasonable attorney's fees and expenses, incurred by
Licensee by reason of the breach
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of the foregoing warranty, provided, however, Licensor shall not be liable for
loss of profits or consequential damages. Licensor agrees to defend at its own
expense any action or proceedings arising out of an alleged breach of the
foregoing, warranty, provided, however, that Licensee notifies Licensor
promptly of any such claim or of the commencement of any such action or
proceedings, delegates complete and sole authority to Licensor to defend or
settle same, and cooperates fully with Licensor in the defense thereof.
Licensee represents and warrants that it has the right to enter into this
Agreement and to fully perform its obligations hereunder that it will not
permit the transmission of the pictures other than as specified herein, or
after the expiring or earlier termination of this Agreement. Licensee agrees to
indemnify, defend and hold Licensor, its officers, employees, successors and
assigns, free and harmless from any all claims, damages, liabilities, costs or
expenses, including reasonable attorney's fees and expenses arising out of or
in connection with the use by Licensee, its successors, assigns and
sublicensees of the prints or pictures hereunder, or arising out of or by
reason of any breach of warranty, undertaking, representation or agreement made
or entered into herein or Licensee's part.
10. MUSIC PERFORMANCE RIGHTS. Licensor warrants that the small
performance rights in and to the music contained in each Picture are either (a)
controlled by and available for license from ASCAP, BMI or other similar music
performance rights society or (b) in the public domain, or (c) controlled by
Licensor and granted to Licensee solely to the extent necessary to permit
Licensee's use of said prints hereunder. Licensor does not represent or warrant
that Licensee may exercise the performing rights to said material without the
payment of a performing rights royalty or license fee. Licensee shall, at it
sole cost and expense, secure all small performance rights licenses necessary
for the telecast of the musical compositions contained in each print and shall
hold harmless Licensor from any liability or damage arising from Licensee's
failure to do so.
11. WITHDRAWAL AND ADJUSTMENT.
(a) Licensor may, in its absolute discretion,withdraw any licensed
picture if Licensor determines that the telecasting thereof would or might (i)
infringe upon the rights of others; (ii) violate any law, court order,
government regulation or other ruling of any governmental agency; (iii)
interfere with the actual or contemplated use of the licensed picture or the
material, or rights contained therein for any purpose other than the telecasting
of the picture in Licensee's basic area; or (iv) subject Licensor to any
liability.
(b) If Licensor elects to withdraw any picture as set forth in the
preceding subparagraph (a) of this paragraph 11, before its initial telecast, or
if the Picture is not acquired or produced by Licensor or if Licensor does not
control distribution rights, then Licensor shall have the right,in its sole
discretion, either to deliver to Licensee another picture of comparable quality
(which picture shall be deemed to replace the picture withdrawn) or may reduce
the number of pictures to be delivered and paid for hereunder by one and
Licensee shall be given a refund or credit, at Licensor's election, of such
license fee for such picture.
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12. BANKRUPTCY AND DEFAULT. If Licensee becomes insolvent or bankrupt or
makes an assignment for benefit of creditors, or if any property of Licensee
is attached and if such attachment is not released within ten (10) days after
the date of attachment, or if a receiver, liquidator, or trustee is appointed
for any of Licensee's property, or if Licensee breaches any of the material
terms or provisions of this Agreement, Licensor in addition to any and all
other rights it may have under this Agreement or in law or in equity, may at
its option, from time to time during such occurrence, do any one or more of the
following: suspend delivery or telecasting by Licensee of one or more pictures
hereunder until default is ended or remedied, terminate this Agreement, or
declare the Agreement breached and declare all unpaid amounts payable to
Licensor hereunder immediately due and specifically, if Licensee shall fail to
make the payments to Licensor on a timely basis as provided in this Agreement,
Licensor shall have the right but not the obligation to declare Licensee in
default and thereby either to suspend the rights herein granted until the
default is ended or to terminate this Agreement without foregoing any of
Licensor's rights to recover damages deriving from Licensee's default. Licensee
shall immediately return all materials to Licensor.
A default by Licensee under this Agreement shall be deemed a default under any
and all other licenses granted by Licensor to Licensee and shall entitle
Licensor to terminate any and all such other licenses and to declare any then
unpaid balance of license fees thereunder immediately due and payable.
License acknowledges that the terms hereof and the industry custom of licensing
pictures substantially in advance of the scheduled telecast dates have the
effect of rendering the pictures hereunder unmarketable in the area covered by
this Agreement during any period which includes the period of this license or
any part thereof. Licensee also acknowledges that, by reason of the foregoing,
no method exists for accurate measurement of damages for any breach of
Licensee's agreement to pay Licensor as provided in this Agreement. It is
therefore agreed that, in addition to all other remedies available at law, in
equity, or under the other provisions of this Agreement, Licensor shall be
entitled (upon breach by Licensee of such agreement to pay Licensor) to recover
from Licensee, as liquidated damages, the total unpaid license fees for all
telecasts authorized hereunder, whether or not such telecasts actually occur,
and in addition, reasonable attorney's fees and expenses or collection agency
fees and expenses of any attorney or collection agency is retained by Licensor
at any time to enforce the provisions hereof, plus such other amounts as may be
due hereunder.
If Licensor elects or becomes obligated to make payments in place of Licensee of
if Licensor incurs any expenses for legal services, court costs, and associated
expenses because of any breach by Licensee, the sum or sums so paid by Licensor
and the amount of such fees, costs and associated expenses shall be payable
forthwith from Licensee to Licensor, together with interest thereon at the rate
of one and one-half percent (1.5%) per month. If Licensee fails to pay the
license fees herein provided at the times due in the amounts set forth herein,
the sums unpaid shall bear interest at the rate of one and one-half percent
(1.5%) per month from the due date thereof until paid. Any payment not made
within thirty (30) days after its due date shall bear interest at the rate of
one and one-half percent (1.5%) per month computed from the original due
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date until paid; however, if said rate is in excess of the maximum permitted
under the laws of the jurisdiction where the debt accrues, then in such event
the rate of interest shall be the maximum permitted by law. Acceptance of any
payment by Licensor after its due date shall not constitute a waiver by
Licensor of any of the rights hereunder.
13. EARLY EXPIRATION OF TERM. Notwithstanding anything contained herein
to the contrary, if Licensee releases any one or more of the pictures the number
of times permitted hereunder prior to the expiration of the term specified
herein, this license shall be deemed terminated with respect to each such
picture as of the date upon which the last permitted run is made.
14. ASSIGNMENT. Licensor reserves the right to hypothecate pledge or
discount this Agreement and to obtain loans from a bank or other lenders by the
assignment as security. The Licensee recognizes that this Agreement may be
exhibited and or assigned to such bank or other lenders which may thereby be
induced to enter into substantial commitments in reliance thereon. The Licensee
agrees that in the event of receipt of written notice of assignment by
Licensor, monies due to Licensor shall be paid to any bona fide third party
assignee in accordance with such instructions without offset, deductions,
counter-claim, or other credits which the Licensee may have or claim to have
against Licensor. Licensor may freely assign this Agreement to its successor or
successors or to any of its associated, affiliated and subsidiary companies.
This Agreement may not be assigned by Licensee, either voluntarily or by
operation of law, without the prior written consent of Licensor. Any such
assignment, if consented to by Licensor, shall not relieve Licensee of its
obligations hereunder.
15. GENERAL.
(a) Licensee acknowledges that telecasts or releases of the
licensed pictures originating outside its basic territory may be received by
television sets located within such basic territory and Licensee agrees that
such reception shall not constitute a breach of this Agreement by Licensor.
(b) Subject to the provisions of Paragraph 14 hereof, this
Agreement and all of its terms, conditions and other provisions and all rights
herein shall inure to the benefit of and shall be binding upon the parties
hereto and to their respective successors and assigns.
(c) The titles of the paragraphs of this Agreement are for
convenience only and shall not in any way affect the interpretation of any
paragraph of this Agreement or of the Agreement itself.
(d) Time is of the essence in the performances by Licensee of
its obligations for payment hereunder.
(e) A waiver by either party of any of the terms or
conditions of this Agreement in any instance shall not be deemed or construed
to be a waiver of such term or
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condition for the future, or of any subsequent breach thereof. All remedies,
rights undertakings, obligations and agreements contained in this Agreement
shall be cumulative and none of them shall be in limitation to any other
remedy, right, undertaking, obligation or agreement of either party.
(f) All notices, statements, and other documents required to
be given hereunder shall be given in writing either by personal delivery, by
mail, or telegraph (except as herein otherwise expressly provided) to the
persons and at the addresses set forth in Schedule "A" hereto, or to such other
persons and addresses as may be designated in writing by either party. Notice
given by mail or by telegraph shall be deemed given on the date of mailing
thereof or of delivery of such telegram to a telegraph office, charges prepaid
or to be billed.
(g) This Agreement shall be deemed made in, and shall be
construed and interpreted in accordance with the laws of, the State of New York
pertaining to contracts entirely made and to be performed therein. In the event
of any disagreement between the parties which cannot be settled by mutual
agreement, the parties agree that the federal or state courts sitting in the
City, State and County of New York (and courts with appellate jurisdiction
therefrom) shall have exclusive jurisdiction over such dispute and the
resolution thereof, and the parties agree that jurisdiction and venue in such
courts in appropriate, and that any process in connection therewith may be
served in the manner provided hereinabove for notices to the parties.
(h) All rights not specifically granted herein to the
Licensee are reserved for Licensor's use and disposition without any
limitations whatsoever, regardless of the extent to which the same are
competitive with Licensee or the license granted hereunder.
(i) This Agreement constitutes the entire agreement between
Licensee and Licensor with respect to the subject matter hereof and may not be
changed, modified, amended, or terminated except by operation of law or by a
writing signed by the parties hereto.
(j) In the event of any conflict between any provision of
this Agreement and any material law, rule or regulation, this Agreement shall
be deemed modified to the minimum extent necessary to remove such conflict.
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