EXHIBIT A
ADVERTISING AND PROMOTION AGREEMENT
AGREEMENT made as of the 3rd day of January, 1999, by and between CBS
Corporation, a Pennsylvania corporation with offices at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("CBS") and ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a California corporation
with offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇
("Hollywood" or the "Company").
1. GENERAL DEFINITIONS
1.1 "Affiliate" - means any Person that directly or indirectly (through
one or more intermediaries) controls, is controlled by, or is under common
control with such Person concerned.
1.2 "Annual Ad Sales Commitment" - shall have the meaning set forth in
paragraph 2.2 hereof.
1.3 "Annual Additional Promo Commitment" - shall have the meaning set
forth in subparagraph 2.3(a) hereof.
1.4 "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 1.4(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
1.4(c) above. All rulings of the
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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.
1.5 "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.
1.6 "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 upon the
Forecasting Service within ten (10)
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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.
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(i) any Person engaged in radio programming or radio program
distribution, so 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.
1.7 "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.
1.8 "CBS PLUS" - means a corporation-wide cross media sales unit that
designs customized consumer-driven media and marketing programs for advertisers.
CBS PLUS media and marketing programs are executed in cooperation with the sales
organizations of the entire CBS organization, including: CBS Television Network,
the CBS Television Stations Group, CBS/Infinity Radio Stations, CBS Cable and
TDI, Infinity Broadcasting Corporation's outdoor advertising business.
1.9 "CBS Media Properties" - means the CBS Television Network, CBS
Owned and Operated Television and Radio Stations (including those owned and
operated by CBS Affiliates, including Infinity Broadcasting Corporation), CBS
Cable, TDI, and CBS wholly-owned Internet websites.
1.10 "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.
1.11 "Collaboration Agreement" - means any one of the following
agreements between or among CBS, Hollywood and BEI: (a) this Agreement; (b) the
Content Agreement dated as of even date (the "Content License") (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.
1.12 "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.
1.13 "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
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beginning on the anniversary of that commencement date (as such Year may be
suspended or extended, and those dates postponed, as provided herein).
1.14 "Gross Ad Revenues" - means Gross cash revenues accrued from the
sale of advertising on the Hollywood Site (as defined below), provided that such
revenues or other consideration shall not be reduced for royalties, commissions,
fees or other expenses incurred in generating such revenues and without
reduction for taxes.
1.15 "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.
1.16 "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 "Person" - means any individual, partnership, corporation or
organized group of persons, including agencies and other instrumentalities of
governments and states.
1.19 "Term" - shall have the meaning set forth in paragraph 3.1 below.
1.20 "Television Content" - means Content broadcast on television.
1.21 "URL Scroll" - means the exhibition of a written representation of
a URL in or during (i.e., at any time from the opening frame through the end of
the closing credits) a television program or in/on an Internet Web Site page.
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2. SCOPE
2.1 (a) During the Term, CBS shall arrange for the placement of
advertising and promotion of the Hollywood Site in the media category or type
set forth on Exhibit A attached hereto, at the rate of Ten Million Dollars
($10,000,000) per Contract Year (based upon the value ascribed for such
advertising in subparagraph 2.1(b) below). A portion of the foregoing
$10,000,000 amount may, at the option of Hollywood, be allocated to production
costs for such advertising and promotion incurred by CBS or its Affiliates, at
Hollywood's request. CBS and Hollywood shall meet periodically to jointly
develop a media plan to formulate the Contract Yearly allocation of Ten Million
Dollars of advertising and promotion, using the media categories or types set
forth in Exhibit A. The media plan shall provide broad-based exposure for the
Hollywood Site, including prominent placements in conjunction with appropriate
entertainment-related events and programming. The media plan shall provide for
the distribution of television and radio ads over various time periods. CBS will
endeavor to implement the advertising and promotional goals set forth in the
media plan. All advertising and promotional materials shall be subject to the
applicable CBS Television Network Advertising Guidelines and CBS's standard
preemption policies. CBS shall not have to make any ad placements if the
exigencies of time or current or future contractual obligations entered into
prior to the time the Company requests such advertising, prevent or restrict CBS
from doing so.
(b) The rate card value of all broadcast advertising and
promotion provided hereunder shall be based upon the average paid unit price,
excluding barter, for spots (excluding political spots) purchased during the
specific CBS Television Network, CBS television station, CBS/Infinity owned and
operated radio station or CBS Cable broadcast in which the advertising or
promotion occurs. The value of the banner advertising on CBS Internet Sites
shall have a rate card price equal to the average price paid or payable
(excluding barter) by third parties for banner advertising during the month in
which such advertising is delivered. The price of the billboard ad concerned
shall be based on the average price paid or payable (excluding barter) by any
third party during the same time period for any similar (in terms of, among
other things, location, size, and type of billboard) billboard ad(s) during the
month prior to the month in which such billboard ad is delivered.
(c) CBS will provide to Hollywood calendar monthly statements,
calendar quarterly statements (i.e., March 31, June 30, September 30, December
31) and calendar yearly statements, within twenty (20) days following expiration
of the time period concerned (i.e. calendar month, quarter and year) showing the
(i) value attributable to each of the media categories and types with respect to
the advertising and promotions purchased by Hollywood during the statement
period and (ii) the calculation of the aggregate value of advertising purchased.
2.2 (a) CBS will maintain accurate books and records which report the
expenditure of the advertising and promotional value by Hollywood and
information from which the calculation can be derived. Hollywood may, at its own
expense, examine those books and records, as provided in this Section 2.2.
Hollywood may make such an examination for a particular statement provided
pursuant to subparagraph 2.1(c) only once and such examination must occur within
three (3) years after the date such statement is sent by CBS to Hollywood.
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(CBS will be deemed conclusively to have sent Hollywood the statement concerned
at the time prescribed in Section 2.1(c), unless Hollywood notifies CBS
otherwise with respect to any statement within sixty (60) days after that
designated time.) Hollywood may make those examinations only during CBS's usual
business hours, and at the address set forth herein for the provision of notices
to CBS, unless otherwise notified. Hollywood will be required to notify CBS at
least ten (10) days before the date of planned examination. If Hollywood's
examination has not been completed within two (2) months from the time Hollywood
begins it, CBS may require Hollywood to terminate it on seven (7) days notice to
Hollywood at any time.
(b) If any examination of CBS's books and records
discloses that:
(i) CBS has failed to properly account for
advertising and promotions purchased by Hollywood hereunder, then CBS
will make appropriate adjustment(s) to the cumulative total purchased
by Hollywood.
(ii) CBS has overstated the value of advertising
purchased by more than 7.5%, then CBS shall reimburse Hollywood for its
direct out-of-pocket expenses incurred in identifying such material
overstatement.
2.3 (a) During each Contract Year, upon Hollywood's notice to CBS,
Hollywood shall have the option to require CBS to sell
advertisements/advertising space on the Hollywood Site totaling Gross Ad
Revenues up to $1.5 million per Contract Year (the "Annual Ad Sales Option"),
provided however, that Hollywood shall reduce the amount of Annual Additional
Promo Commitment available to Hollywood, pursuant to paragraph 2.4 below (i.e.,
$4,300,000 per Contract Year) by the Annual Ad Sales Option or any portion
thereof elected/sought by Hollywood.
(b) (i) (A) CBS shall include the Hollywood Site in all of its
CBS PLUS advertising sales programs and presentations to the extent that such
programs/presentations are appropriate in respect of the sale of advertising on
Hollywood Site, and (B) CBS shall invite Hollywood ad sales staff members to
attend all CBS PLUS sales meetings specifically related to the sale of
advertisements/advertising space on the Hollywood Site; and (ii) CBS will have
the right to bundle inventory relating to the Hollywood Site with television,
radio, cable, Internet and billboard inventory, although Hollywood shall only be
credited with the pro-rated value of the advertising which appears on the
Hollywood Site.
(c) Hollywood shall pay CBS a commission of eight per cent
(8%) of Gross Ad Revenues (the "CBS Commission") with respect to advertising
sold on the Hollywood Site, in excess of the Annual Ad Sales Option concerned,
if any. The CBS Commission shall be payable upon Hollywood's receipt of payment
from the advertiser. CBS shall coordinate all such sales of
advertisements/advertising space with Hollywood's ad sales staff or as otherwise
agreed to by the parties. All sales of advertisements/advertising space by CBS
shall be consistent with CPM rates and other pricing then being charged on the
Hollywood Site. All sales in excess of the Annual Ad Sales Option shall be
subject to the availability of advertising inventory on the Hollywood Site.
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2.4 (a) (i) In addition to the advertising and promotion described in
paragraph 2.1 above, Hollywood shall have the right to require CBS to arrange
for placement of advertising and promotion of the Hollywood Site (in the media
category or type set forth in Exhibit A, and subject to the terms of this
Agreement) at a Market Value of no more than Four Million Three Hundred Thousand
Dollars ($4,300,000) during each of the first six Contract Years and Four
Million Two Hundred Thousand Dollars ($4,200,000) during the seventh Contract
Year (the "Annual Additional Promo Commitment"), subject to the reductions
prescribed in section 2.4(a)(ii) below.
(ii) The Annual Additional Promo Commitment shall be
reduced by: (A) the Annual Ad Sales Option, as prescribed in paragraph
2.3 above; and (B) the Market Value of any Content provided by CBS
(during the Contract Year concerned), pursuant to section 2.4(a)(i) of
the Content License.
(b) (i) Upon commencement of the Contract Year and/or each
calendar quarter of the Contract Year concerned, Hollywood shall use
reasonable efforts to notify CBS of its election to license CBS
Content, exercise the Annual Ad Sales Option or utilize the Annual
Additional Promo Commitment, 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 Additional Promo
Commitment (or any portion thereof for which Hollywood has failed to
notify CBS of its election) will be deemed forfeited.
(iii) Except as set forth in section 2.4(b)(ii)
above, if upon expiration of the Contract Year concerned, the Annual
Additional Promo Commitment has not been exhausted, then the amount of
the unused portion of the Annual Additional Promo Commitment may be
carried over to the immediately subsequent Contract Year (the "Annual
Promo Carryover"), it being understood, however, that (A) in the
immediately subsequent Contract Year the Annual Promo Carryover shall
be exhausted (first) before the Annual Additional Promo Commitment for
such subsequent Contract Year is utilized (B) Hollywood shall identify
the intended use for (i.e., allocate) the Annual Promo Carryover during
the first thirty (30) days of such 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 Promo 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 Promo Carryover and (D) any portion of Annual
Additional Promo Commitment (including any Annual Promo 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
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portion of the Annual Additional Promo Commitment or Annual Promo
Carryover, as applicable.
(c) "Market Value", as used in this paragraph 2.3, shall mean:
(i) 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).
(ii) with respect to advertising sales on the
Hollywood Site, the proportionate dollar amount (of the Gross Ad
Revenues) of the Ad Sales Option .
(iii) with respect to CBS advertising and promotion,
the unit price for the advertising medium concerned, as described in
subparagraph 2.1(b) of this Agreement.
3. TERM
3.1 The term of this Agreement ("Term") shall begin as of the date
hereof and shall continue in full force and effect for a period of seven (7)
consecutive years, through and including __________, 2006, unless it is
terminated earlier in accordance with the terms and conditions stated herein.
4. WARRANTIES, REPRESENTATIONS; INDEMNITEES
4.1 (a) CBS represents and warrants that:
(i) it has full power and authority to enter into and
fully perform this Agreement;
(ii) this Agreement has been duly authorized and is
enforceable in accordance with its terms; and
(iii) at all times, it will comply with all
applicable federal, state, local and foreign laws and regulations.
(b) The Company represents, warrants and covenants that:
(i) it has full power and authority to enter into and
fully perform this Agreement;
(ii) this Agreement has been duly authorized and is
enforceable in accordance with its terms;
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(iii) the Hollywood Site will be produced, advertised
and transmitted in accordance with all applicable federal, state, local
and foreign laws and regulations; and
(iv) at all times, it will maintain the Hollywood
Site in a professional manner consistent with applicable industry
standards. In connection therewith, the Company shall satisfy the
following minimum performance standards: (A) use its best efforts to
maintain continuous accessibility to the public on the Internet; (B)
capability of sustaining traffic of no less than 22 million page views
per month, including, without limitation, the existence of a viable
technological response, in the event that the foregoing traffic number
is exceeded, that is designed to handle at least 44 million page views
per month; (C) functionality as outlined/delineated in the most recent
business plan for Hollywood; (D) monitoring of the Hollywood Site's
traffic flows on a regular basis and (in addition to and above and
beyond clause (B) above) implementation of plans to meet expected
traffic flows and (E) maintenance of standards of quality and ease of
use no less than the quality and ease of use of the Hollywood Site as
of this date.
(v) advertising and promotion material and any
portion thereof created by or on behalf of Hollywood or furnished by
Hollywood to CBS and the use thereof shall not violate any law or
violate the rights of any Person.
4.2 (a) Each party to this Agreement (the "Indemnifying Party") shall
at all times indemnify, hold harmless and defend the other party (collectively,
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 or covenant contained herein. In the event of any 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
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 4.2 may
be offset by Hollywood against the Market Value of any advertising, Content or
Ad Sales Option deliverable by CBS (the "CBS Deliverable(s)") pursuant to this
Agreement or the Content License (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:
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(i) The Market Value of any advertising or promotion,
deliverable pursuant to paragraph 2.1 of this Agreement, shall be fully
exhausted before any other CBS Deliverable is used for/contributed to
the Indemnity Offset.
(ii) Provided the Deliverable described in section
4.2(b)(i) above has been fully exhausted, the Market Value of any
Annual Additional Promo Commitment (deliverable pursuant to paragraph
2.4 above) or Annual Ceiling (as such term is defined in the Content
License and deliverable pursuant to subparagraph 2.3(c) of the Content
License), 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 2.2 of this Agreement, may be used
for/contributed to the Indemnity Offset only if and when the
Deliverables described in sections 4.2(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 Content License, shall be extinguished (or
reduced, as applicable) to the extent that such CBS Deliverable is used
for/contributed to any Indemnity Offset.
5. REMEDIES
5.1 (a) CBS shall have the right to suspend and/or withdraw placement
of all advertising and promotion and Hollywood Site ad sales:
(i) during such time as the Company is enjoined from
using the tradename, trademark or term(s) "▇▇▇▇▇▇▇▇▇.▇▇▇" on or in
connection with the Hollywood Site and has not renamed the Website. The
Company shall rename the Hollywood Site within twenty (20) days
following the issuance of any injunction or the resolution of any claim
which requires the Company to cease using the tradename, trademark or
term(s) "▇▇▇▇▇▇▇▇▇.▇▇▇" on or in connection with its Website.
(ii) In the event that the Hollywood Site is not
operational for a period of seventy-two (72) consecutive hours until it
becomes operational in a manner consistent with the standards in the
industry.
(b) CBS may exercise its right to suspend and/or withdraw
placement of all advertising and promotion and all advertising sales pursuant to
this paragraph 5.1 by sending the appropriate notice to Hollywood. No exercise
by CBS of its rights under this Article 5 will limit CBS's remedies by reason of
Hollywood's or BEI's default, CBS's rights to exercise any other rights under
this Article 5, or any of CBS's other rights.
5.2 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 (as set forth in
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the Content License) 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 5.2(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 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: (i) solely with respect to this Agreement, to a term or
condition (in this Agreement) for which a specific cure period is provided; or
(ii) 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 5.2(d), 5.2(e) and 5.2(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.
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(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.
(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 5.2 by
sending Hollywood appropriate written notice. No exercise by CBS of any of its
rights under this Article 5 will limit CBS's remedies by reason of Hollywood's
or BEI's default, CBS's rights to exercise any other rights under this Article
5, or any of CBS's other rights.
6. GENERAL
6.1 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 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.
6.2 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 the parties hereto
agrees to commence any such action, suite or proceeding either in the United
States District Count 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
the parties hereto further agrees that service of any process, summons, notice
or document by U.S. registered mail to such party's respective address set forth
below shall be effective service of process for any action, suite or proceeding
in New York with respect to any matters to which it has submitted to
jurisdiction in this paragraph 6.2. Each of the parties hereto irrevocably and
unconditionally waives any objection to the laying of venue of any action, suite
or proceeding arising out of this Agreement or the transactions contemplated
hereby 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 any inconvenient forum.
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6.3 If any provision of this Agreement (or any portion there) 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.
6.4 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
with a copy to:
▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel
and a copy to:
▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President of Operations
and a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(b) if to CBS:
CBS Corporation
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
14
Attention: Chief Financial Officer
with a copy to:
CBS Corporation
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
6.5 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.
6.6 No failure of either party to exercise or enforce any of its rights
under this Agreement shall act as a waiver of such right.
6.7 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.
6.8 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.
6.9 This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
6.10 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.
6.11 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.
6.12 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
15
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
By: /s/ W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇., ▇▇▇▇▇▇▇▇
---------------------------- ------------------------
Name: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------- -------------------
Title: Senior Vice President Title: Executive Vice President
and General Counsel and Chief Financial Officer
16
EXHIBIT A
---------
Attached to and forming a part of the Agreement made as of
January 3, 1999 between CBS Corporation, Big Entertainment,
Inc. and ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc..
--------------------------------------------------------------------------------
Placement Possibilities
1. CBS Television Network programming
2. CBS Owned and Operated Television Stations' and Infinity owned and
operated Radio Stations' programming
3. Infinity outdoor billboards and all other outdoor media owned by CBS
4. CBS Internet Sites
5. CBS Cable
6. CBS Syndicated Programs
Placement types
o 30 second units where available
o 15 second units where available
o 10 second units where available
o URL Scrolls (5 seconds)
o On-air mentions (30 seconds)
o Banner ads, buttons and sponsorships
o Credit rolls/sign-offs (5 seconds)
17