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EXHIBIT 10.68
STATION AFFILIATION AGREEMENT
Dated as of May 1, 1999
ACME Television Holdings
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
The following shall comprise the agreement between The WB Television Network
Partners, L.P. dba The WB Television Network ("WB," "we," or "us"), and ACME
Television Licensee of Illinois, LLC ("Affiliate" or "you") for the affiliation
of your television station WPXU ("Station") with WB for carriage of WB
programming. The Federal Communications Commission ("FCC") has issued a
broadcast license ("License") to you to operate Station in Champaign, Illinois,
the community in which Station is licensed by the FCC ("Community of License").
All references in this Agreement to "WB program(s)" and "WB programming" and any
variations thereof shall mean the programming made available by WB under this
Agreement.
1. WB Programming: WB will make available to Affiliate WB programs for free
over-the-air broadcast and broadcast by any other means by Station in the
Community of License during the term of this Agreement. During such term,
except as otherwise provided herein, WB grants Affiliate the exclusive
right to have Station broadcast the WB programming in the Community of
License only as scheduled by WB over free over-the-air television and by
such other technological means as are available to Affiliate for broadcast
in the Community of License so long as Station broadcasts the WB
programming for over-the-air television. Notwithstanding the foregoing,
until such time that WB offers exclusivity against importation of WB
programming carried by the signal of WGN to its affiliates, WB may allow
WB programming carried by the signal of WGN to be imported into the
Community of License. WB shall have the sole discretion to select,
schedule, substitute and/or withdraw WB programming or any portion(s)
thereof. WB shall also have the right to authorize any television
broadcasting station, regardless of the community in which it is licensed
by the FCC, to broadcast any presentation of a subject we deem to be of
immediate national significance including, but not limited to, a
Presidential address. Except as provided herein, during the term of this
Agreement Affiliate shall be the sole affiliate of WB for transmission for
exhibition on television of WB programming in the Community of License.
2. Program Carriage:
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(a) We agree to make available for broadcast by Station WB programming
for the hours programmed by WB at the times and dates scheduled by
WB throughout the term of this Agreement. You acknowledge that the
times and roll-out dates set forth in this Agreement are approximate
only and you agree to have Station broadcast WB programs
irrespective of whether WB meets, fails to meet or otherwise varies
from the anticipated program schedule set forth herein; provided,
however, that WB hereby agrees not to accelerate such anticipated
program schedule. WB will not program the morning or afternoon
day-parts (with the exception of Kids' WB programming) or, access,
or late-night day-parts, unless WB first receives the consent of the
WB Affiliate's Council. To the extent WB makes available such WB
programming for broadcast, this Agreement both obligates us to make
available such WB programs to Station and obligates Station to
broadcast such WB programs over-the-air pursuant to the terms of
this Agreement. WB acknowledges that the sixth night of WB prime
time programming will commence at the start of WB's 1999/2000
broadcast year, and such sixth night of programming will be
broadcast on Friday night.
(b) Subject to the exceptions set forth in subparagraph 2(e) and the
right of preemption set forth in subparagraph 2(f), Station shall
broadcast WB programs on the dates and at the times scheduled by WB.
Station shall broadcast WB programs in their entirety, including but
not limited to WB commercial announcements, WB identifications,
program promotional material, and credit announcements contained in
such programs, without interruption or deletion or addition of any
kind, except for the commercial announcements that Station is
allowed to add pursuant to Paragraph 5. Notwithstanding the
foregoing, you may substitute other WB promotional announcements in
lieu of program promotional material that is inaccurate as it
pertains to Station's schedule. No commercial announcement,
promotional announcement or public service announcement will be
broadcast by Station during any interval within a WB program, which
interval is designated by WB as being for the sole purpose of making
a station identification announcement.
(c) The initial Scheduled Program Times of WB programming and the
anticipated roll-out dates of that programming are set forth as
follows (the specified times apply for the Eastern and Pacific Time
Zones; the Mountain and Central Time Zones are one hour earlier for
Prime Time and Latenight programming only, except as otherwise
agreed by us):
Prime Time: Sunday: 7:00 p.m. - 10:00 p.m Monday - Saturday:
8:00 p.m.- 10:00 p.m. As of the commencement of the
1998/1999 Television Broadcast Year, WB is providing
programming for broadcast by its affiliates on five
nights during each calendar week (i.e. Sunday through
Thursday). WB will roll-out one
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additional night of programming during the 1999/2000
Broadcast Year and one additional night of programming
during the 2000/2001 Broadcast Year.
Children's: Monday through Friday Mornings: One hour of programming
broadcast between: 7:00 a.m. - 8:00 a.m.; or 7:30 a.m. -
8:30 a.m.; or 8:00 a.m. - 9:00 a.m. (at WB's election)
Monday through Friday Afternoons: Two hours of
programming broadcast between: 3:00 p.m. - 5:00 p.m.
Saturday Morning: Four hours of programming broadcast at
8:00 a.m. - 12:00 noon. However, if Affiliate believes
that the Children' programming block should run on
Sunday instead of Saturday, WB will discuss with
affiliate such a move of the programming block from
Saturday to Sunday, and will consider granting such a
move, in good faith, after taking into account the
business interests of WB.
Latenight: 11:00 p.m. - 12:00 midnight Monday through Friday,
commencing on a date to be determined by WB, subject to
the approval of the WB Affiliate's Council
(d) During such time that WB is providing 19 hours of programming per
week to Station 3 hours(of the total of 19 hours) will be
programming which is categorized as Children's
educational/informational programming. However, at such time that
WB provides only 16.5 hours of Children's programming to Station
then WB, at its sole election, may determine to provide only 30
minutes of educational/informational programming per week to
Station.
(e) You confirm that as of the date of this Agreement you have no
commitments, except those listed in Schedule 1 hereto, which
would impede Station's broadcasting all WB programming made
available during the term of this Agreement. If any WB
programming is not broadcast by you because of any such
commitment expressly described in Schedule 1 (but excluding
extensions by exercise of options by Affiliate [but not by the
programming licensor] or otherwise), then such programming shall
be broadcast in a time period upon which you and we shall
mutually agree and which shall be of quality and rating value
comparable to that of the Scheduled Program Times. These programs
will not be considered preempted for purposes of subparagraph
2(f).
(f) Notwithstanding anything in this Agreement to the contrary, nothing
in this Agreement shall be construed to prevent or hinder Affiliate
from (i) rejecting or refusing any WB program which Affiliate
reasonably believes to be unsatisfactory or unsuitable or contrary
to the public interest or (ii) substituting a program which, in
Affiliate's opinion, is of greater local or national importance. In
such an
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event, you shall provide us with advance written notice of any such
rejection, refusal or substitution, no later than 14 days prior to
the air date of such programming, except where the nature of the
substitute program makes such notice impracticable (e.g., coverage
of breaking news or other unscheduled events) or the programming has
not been made available to you by such date, in which cases you
agree to give us as much advance notice as the circumstances permit.
Such notice shall include a statement of the reasons you believe
that the rejected WB programming is unsatisfactory or unsuitable or
contrary to the public interest, and/or that a substituted program
is of greater local or national importance. In view of the limited
amount of WB programming to be supplied pursuant to this Agreement
(at least until such time as the full WB programming schedule has
been rolled out) you acknowledge that you do not foresee any need to
substitute programming of greater local or national importance for
WB programming, except in those circumstances requiring live
coverage of fast-breaking news events or very infrequent special
events.
To the extent you substitute another program for a WB program as
permitted under subparagraph 2(f)(ii), then you will broadcast such
omitted program and the commercial announcements contained therein
(or any replacement programming provided by WB and the commercial
announcements contained therein) during a time period upon which you
and we shall promptly and mutually agree and which shall be of
quality and rating value comparable to that of the preempted
program's Scheduled Program Time. In the event that the parties do
not promptly agree upon such a time period after reasonable
consultation in good faith and after taking into account the
practical alternatives under the circumstances, then, without
limiting any other rights of WB under this Agreement or otherwise,
we shall have the right to license the broadcast rights to the
applicable omitted programming (or replacement programming) to
another television station located in the Community of License.
Except as provided in Paragraph 2(e), above, in addition, if three
or more episodes of a program series are preempted by you as
permitted hereunder in any thirteen-week period, for any reasons
other than force majeure as provided in Paragraph 6, we shall have
the right, upon 60 days prior written notice, to terminate your
right to broadcast that program series and to withdraw all future
episodes of that series. Such thirteen-week periods shall be
measured consecutively from the first broadcast date of the program
series in question. If we subsequently place such a series on
another station in the Community of License, we reserve the right
not to offer you the broadcast rights to that series for subsequent
broadcast seasons.
In addition to all other remedies, to the extent one or more
episodes of a program series is preempted by you in violation of
(i.e., other than as permitted under) this Paragraph 2, we shall
have the right, upon 30 days prior written notice, to terminate your
right to broadcast the remainder of the program series and withdraw
all future episodes of that series from you.
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(g) Nothing in this Agreement shall be construed to prevent or hinder WB
from (i) substituting one or more WB programs for previously
scheduled WB programs, in which event WB will make the substituted
programs available to Station pursuant to the provisions of
Paragraph 1 and Paragraph 3; (ii) canceling one or more WB programs;
or (iii) postponing any scheduled roll-out dates of WB programming.
Further, nothing in this Agreement shall be construed to obligate WB
(x) to provide a minimum or specific number of WB programs; (y) to
commence providing WB programming on any particular date; or (z) to
expand the amount of WB programming pursuant to a specified
timetable.
3. Delivery: WB agrees to make available the WB programming for satellite
transmission. WB shall incur no costs regarding the satellite downlink and
broadcast by Station; Station shall incur no up-link costs with regard to
the delivery of the WB programming. WB agrees to provide closed captioning
for substantially all WB programming that is not exempt from captioning
requirements under FCC rules.
4. Promotion:
(a) We will provide you with on-air promotional announcements ("WB
Promos") for WB programming, which WB Promos are intended for
broadcast during Station's broadcast of non-WB programming. You
agree to provide an on-air promotional schedule consistent with
our recommendations, and consistent with Station's reasonable
business judgment. You shall maintain complete and accurate
records of all WB Promos that are broadcast. Upon request by WB
for those records, you shall provide copies of all such records
to WB within two weeks of such request.
(b) You shall budget Station's advertising availabilities in such a
manner as to enable Station to broadcast additional WB Promos
during periods in which Station is deemed a "Subperformer."
Station shall be deemed to be a "Subperformer" from the time its
"sweeps rating" is below the average prime time rating for all WB
affiliated broadcast stations until such time as Station's sweeps
rating is no longer below the average prime time rating for all
WB affiliated broadcast stations. The Station's sweeps rating
means the Station's average ▇.▇. ▇▇▇▇▇▇▇ rating for the most
recently completed sweeps period for adults 18-49 for all prime
time hours programmed by WB. For such time as Station remains a
Subperformer, Station shall: (i) broadcast, during each one-half
hour of all periods of each day that Station is broadcasting
non-WB programming, at least one (1) 30-second Promo (or Promos
aggregating 30 seconds, to the extent we so elect) for Station's
local, syndicated or WB programming; and (ii) broadcast during
all periods when Station is broadcasting non-WB programming WB
Promos for not less than:
Prime Time Hours Programmed by WB
2 hours - 20% of 100%
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4 hours - 25% "
6 hours - 30% "
8 hours - 35% "
10 hours - 40% "
12 hours* - 45% "
(* 12 or more hours)
(the "Applicable Percentage") of the total, aggregate gross ratings
points ("GRPs") for all the promotional announcements broadcast by
Station ("Aggregate Promotional GRPs") within the periods in which
non-WB programming is being broadcast. The specific WB Promos
broadcast by Station and the number of broadcasts of each WB Promo
may be specified by WB and the broadcast of the WB Promos shall be
made so that the Aggregate Promotional GRPs allocated to WB Promos
are distributed fairly and reasonably across the periods when non-WB
programming is being broadcast. For such time as Station's sweeps
rating ranks Station within the bottom 50% (ranked highest to
lowest) of those WB affiliated broadcast stations that are
Subperformers, then the Applicable Percentage for Station shall be
not less than 55% of 100% of the Aggregate Promotional GRPs. The WB
Promos broadcast during each half-hour of non-WB programming, as
required by this subparagraph 4(b), may be counted toward Station's
Applicable Percentage. Station shall continue to air WB Promos under
this schedule until Station is no longer a Subperformer, as defined
above.
(c) In addition to providing WB Promos, we shall make available for
your use, at reasonable cost, such other promotional and sales
materials as we and you may mutually consider appropriate. You
shall not delete any copyright, trademark, logo or other notice,
or any credit included in any such materials relating to WB, and
you shall not exhibit, display, distribute or otherwise use any
trademark, logo or other material or item delivered pursuant to
this Paragraph 4 or otherwise, except as instructed by us at the
time.
(d) Commencing on the first date that WB programming is aired by Station
and for the remaining term of this Agreement, Station shall identify
itself as a WB affiliate, both on and off-the-air.
5. Commercial Announcements:
(a) With respect to WB programming, the parties to this Agreement shall
be entitled to insert the following number of commercial
announcements (Station's allotment includes station breaks but
excludes 5-second prime time station identification breaks at the
beginning of each hour):
(1) Prime Time (as defined in subparagraph 2(c)) hour (pro-rated
for half-hour programs):
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You shall have the right to insert six 30-second
commercial announcements. WB shall have the right to
insert at least nineteen 30-second commercial
announcements.
(2) Children's:
Weekday half-hour:
You shall have the right to insert six 30-second
commercial announcements (or other material constituting
"commercial matter" under the FCC's regulations). WB
shall have the right to insert six 30-second commercial
announcements.
Weekend half-hour:
You shall have the right to insert five 30-second
commercial announcements (or other material constituting
"commercial matter" under the FCC's regulations). WB
shall have the right to insert five 30-second commercial
announcements and one 15-second commercial.
(3) Latenight (as defined in subparagraph 2(c)):
You will receive half the total number of commercial
announcements as specified by WB or less as mutually
agreed to.
(b) If, because of the imposition of any law or regulation, the
amount of commercial advertising, commercial matter or other
non-program time included in WB programming is reduced for any
reason (including but not limited to the adoption or modification
of statutes or regulations or any other governmental action),
then we shall be entitled to reduce the number of commercial
announcements available to you to the extent necessary to provide
WB and Affiliate with the same proportionate amount of commercial
time (inclusive of station breaks with respect to Affiliate) that
each party is entitled to under this Agreement.
(c) Your broadcast over Station of the commercial announcements
included by us in WB programming is of the essence to this
Agreement, and nothing contained in this Agreement (other than in
subparagraph 2(f)) shall limit our rights or remedies relating to
your failure to so broadcast said commercial announcements. You
shall maintain complete and accurate records of all commercial
announcements broadcast as provided herein. Within two weeks
following each request by us therefor, you will submit copies of
all such records to WB.
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6. Force Majeure: WB shall not be liable for failure to make available any
programming or any portion(s) thereof, and Station shall not be liable for
failure to broadcast any such programming or any portion(s) thereof, by
reason of any act of God, equipment failure, action or claims by any third
person, labor dispute, law, governmental regulation or order, or other
cause beyond either party's reasonable control ("force majeure event"). If
due to any force majeure event, we substantially fail to make available
all of the programming to be delivered to Affiliate under the terms of
this Agreement, or you substantially fail to broadcast such programming as
scheduled by WB for four consecutive weeks, or for six weeks in the
aggregate during any 12-month period, then the "non-failing" party may
terminate this Agreement upon thirty 30 days prior written notice to the
"failing" party so long as such notice is given at any time prior to the
"non-failing" party's receipt of actual notice that the force majeure
event(s) has ended; provided further, however, that notwithstanding the
above provisions, you shall not have any right to so terminate this
Agreement, upon a force majeure event or otherwise, if we: (i) fail to
make available a minimum or specific number of WB programs; (ii) fail to
commence making available WB programming on any particular date; (iii)
fail to expand the amount of WB programming pursuant to a specified
timetable; (iv) substitute one or more WB programs for previously
scheduled WB programs; (v) cancel one or more WB programs; or (vi)
postpone the roll-out of any WB programming.
7. Assignment or Transfer of Affiliate Agreement and/or Station License:
(a) Assignment or Transfer of Affiliation Agreement: This Agreement
shall not be assigned by Affiliate without the prior written consent
of WB. Any purported assignment by Affiliate without such consent
shall be null and void, shall not be enforceable against WB, and
shall not relieve Affiliate of all its obligations hereunder.
(b) Assignment or Transfer of Station License: If any application is
made to the Federal Communications Commission (FCC) concerning a
purported, attempted or actual transfer of control or assignment of
the Station license, you shall notify us immediately in writing of
the filing of such application. Unless the transfer of control or
assignment is one provided for by Section 73.3540 (f) of the FCC's
current rules and regulations (a "short form" assignment or transfer
of control that does not involve a material assignment or transfer
of control), we shall have the right to terminate this Agreement
upon twenty (20) days' advance notice to you, at any time after the
filing of such application. If WB does not terminate this Agreement
on or before twenty days before the effective date of such transfer,
this Agreement shall be deemed to have been fully assigned to the
transferee or assignee of Station's license and such transferee or
assignee will assume and perform all of the obligations and duties
contained in this Agreement without limitation of any kind, as of
the effective date of transfer. In addition, if Licensee fails,
prior to the effective date of the transfer, to procure in a written
form satisfactory to WB the agreement of the assignee or transferee
to assume and perform this Agreement in its entirety without
limitation of any kind, or fails to
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immediately notify WB of the application to transfer control or
assign the Station license, then Licensee shall remain fully
responsible for the full performance of all provisions of the
Agreement during the full term of the Agreement as set forth in
Paragraph 9, and in the event of non-performance, Licensee shall be
considered in material breach of this Agreement and WB shall have
all rights and remedies available for such breach, including but not
limited to specific performance and damages.
8. Unauthorized Copying: You shall not, and shall not cause or authorize
others to record, copy or duplicate any programming or other material we
furnish pursuant to this Agreement, in whole or in part, and you shall
take all reasonable precautions to prevent any such recording, copying or
duplication. Notwithstanding the foregoing, if Station is located in the
Mountain Time Zone you may pre-record WB programming for later broadcast
at the times scheduled by us. You shall erase all such pre-recorded
programming promptly after its scheduled broadcast. Notwithstanding the
above provisions, Station may make a non-broadcast quality recording of
its entire broadcast day for archival, file and reference purposes and
uses only, which copy shall be kept in Station's possession at all times.
9. Term:
(a) The term of this Agreement shall commence on May 1, 1999 (the
"Launch Date") and shall continue for 10 years thereafter (the
"initial period"). The term of this Agreement may be extended for
additional successive periods of two years each, by us, in our sole
discretion, giving written notice of such extension to you at least
120 days prior to the expiration of the then-current period;
provided, however, that if, within 30 days of your receipt of the
notice of extension, you, in your sole discretion, give us written
notice that you reject such extension, then the extension notice
shall not be effective and this Agreement shall terminate upon
expiration of the then-current period.
(b) The "Launch Date" shall be defined as the date on which WB makes WB
programming available to Affiliate for broadcast by Station on a
regularly scheduled basis.
(c) Each "Contract Year" hereunder shall be an annual period during the
term of this Agreement. The First Contract Year is the annual period
beginning with the start date of the term of license; the Second
Contract Year is the annual period commencing one year after the
start date of the term of license, etc.
(d) WB shall, within its sole discretion and without liability, have the
right to terminate this Agreement so long as we (i) provide sixty
days prior written notice to you and (ii) are either: (A) ceasing
operation as a television network; or (B) substantially
restructuring the ownership of the television network.
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(e) Notwithstanding anything to the contrary contained in this
Agreement, upon the termination or expiration of the term of this
Agreement, all of your rights to broadcast or otherwise use any WB
program or any trademark, logo or other material or item hereunder
shall immediately cease and neither you nor Station shall have any
further rights whatsoever with respect to any such program,
trademark, logo, material or item.
10. Applicable Law: The obligations of you and WB under this Agreement are
subject to all applicable federal, state, and local laws, rules and
regulations (including, but not limited to, the Communications Act of
1934, as amended, and the rules, regulations and policies of the FCC) and
this Agreement and all matters or issues collateral thereto shall be
governed by the laws of the State of California without regard to
California's conflict of law rules. The California State Courts and the
U.S. District Courts located in California shall have jurisdiction over
the interpretation of this Agreement or with regard to any dispute arising
under this Agreement. The venue for any such action concerning this
Agreement shall be in the County of Los Angeles, California.
11. Station Acquisition by WB: During the term of this Agreement, WB agrees
that neither we nor Time Warner Inc. nor any of its subsidiary companies
will acquire, as defined by the attribution rules of the FCC, a television
broadcast station licensed in the Community of License. It is acknowledged
that Station WTBS in Atlanta is controlled by a Time Warner affiliated
company.
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12. Change in Operations:
(a) You shall notify WB immediately in writing if application is made to
the FCC to modify in a material manner the transmitter location,
power or frequency of Station such that Station's signal coverage of
its DMA market is materially diminished, or if Station changes its
program format from mainstream entertainment and/or news
programming. We shall have the right to terminate this Agreement,
upon 90 days' prior written notice, within 90 days after receiving
notice of the format change, or if no satisfactory arrangements are
made to cure Station's diminished signal coverage. Applications
related to Station's transition to digital television transmission
are not within the scope of this paragraph.
(b) At any time during the term if Station is off the air, or operating
at less than fifty percent (50%) of its licensed power, for a period
of 12 hours or longer, Station must immediately notify WB. WB may
terminate this agreement upon thirty (30) days prior written notice
in the event that Station is off the air for a period exceeding
seven (7) days or if is operating at less than fifty percent (50%)
of its full licensed power for a period exceeding seven (7) days.
13. WB Affiliates Council: You, with the other affiliates of WB, shall form a
WB Affiliates Council (the "Council"), which shall be comprised of
representatives from five different affiliates of WB.
14. Non-Liability of Council Members: To the extent the Council and its
members are acting in their capacity as such, then the Council and each
member so acting shall not have any obligation or legal or other
liability whatsoever to you or to WB in connection with this Agreement,
including without limitation, with respect to the Council's or such
member's approval or non-approval of any matter, exercise or
non-exercise of any right or taking of or failing to take any other
action in connection therewith.
15. Warranties and Indemnities:
(a) WB agrees to indemnify, defend and hold Affiliate harmless against
and from all claims, damages, liabilities, costs and expenses
arising out of the use by Station under this Agreement of any WB
program or other material furnished by WB under this Agreement,
provided that Affiliate promptly notifies WB of any claim or
litigation to which this indemnity shall apply, and provided further
that Affiliate cooperates fully with WB in the defense or settlement
of such claim or litigation. Affiliate agrees to indemnify, defend
and hold WB harmless against and from all claims, damages,
liabilities, costs and expenses with respect to Affiliate's
operation of the Station or any material furnished, added or deleted
to or from WB programming by Affiliate. This indemnity shall not
apply to litigation expenses, including attorneys' fees, that the
indemnified party elects to incur on its own behalf. Except as
otherwise provided in this Agreement, neither Affiliate nor WB shall
have any rights against the other for claims by third
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persons, or for the failure to operate facilities or to furnish WB
programs if such failure is the result of a force majeure event as
defined in Paragraph 6. Furthermore, notwithstanding any other
provisions of this Agreement, Affiliate shall not have any rights
against WB for claims by third parties or Affiliate arising out of
any actions or omissions of WB permitted under subparagraph 2(g).
(b) You agree to maintain for Station such licenses, including
performing rights licenses as now are or hereafter may be in
general use by television broadcasting stations and are necessary
for you to broadcast the television programs which we furnish to
you hereunder. We will clear all music in the repertory of
SESAC, ASCAP and BMI used in our programs. You shall obtain and
pay all costs associated with any performing rights licenses
necessary to broadcast such music. You will be responsible for
all music license requirements (and all other permissions) for
any commercial or other material inserted by you within or
adjacent to WB programs in accordance with this Agreement.
(c) You warrant that the License is in good standing and you agree to
comply with all relevant statutes and FCC rules and requirements
so as to maintain the License in good standing. In the event you
are found to have materially violated any laws or FCC rules or
requirements (after the exhaustion of all appeals so long as
Station retains the License during the pendency of such appeal),
the effect of which is that Station is of materially less value
to us as a broadcaster of WB programming than as of the date of
this Agreement, then we shall have the right to terminate this
Agreement upon 30 days prior written notice.
(d) Each party hereto warrants that all information delivered by it to
the other in connection with this Agreement shall be true and
correct in all material respects.
(e) Each party hereto warrants to the other that execution of this
Agreement and performance of its obligations will not violate or
result in a default under (i) any material agreement or
instrument to which it is a party or (ii) any statute, ordinance,
governmental rule or regulation in any material respect, or
order, judgment, injunction, decree or ruling of any court or
administrative agency applicable to it, which default would
materially interfere with the performance of it's obligations
hereunder.
(f) Each party hereto warrants that it is not a party to any legal
action or other proceeding before any court or administrative agency
which could prohibit the performance of it's obligations under this
Agreement.
16. Retransmission Consent: If any law, governmental regulation or other
action permits you to elect to require any cable television system or
other multichannel video program distributor to obtain your consent to
such system's or distributor's retransmission of Station's broadcast of
either Station's signal as a whole or any WB programming included therein,
then Affiliate and WB agree to negotiate in good faith regarding whether
such
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consent is to be given (including without limitation, whether you shall or
shall not, in lieu of requiring consent, elect to require any cable system
to comply with any "must carry" rules, regulations or laws) and, if so,
the terms under which such consent is to be given (including without
limitation, the amount and type of compensation, if any, to be paid by the
system or distributor for such consent and whether any of that
compensation shall be shared between you and us). If WB and Affiliate do
not reach agreement with respect to all of the foregoing matters, then
without elimination to any of WB's other remedies, WB may terminate this
Agreement upon 30 days written notice to Affiliate. Nothing contained
herein shall authorize or allow the dissemination of WB programming by
Station outside of the DMA where Station is located, and any such
dissemination of WB programming outside of Station's DMA is prohibited.
17. Network Non-Duplication Protection: During the term of this Agreement,
Affiliate shall be entitled to network non-duplication protection, as
provided by Sections 76.92 through 76.97 of the FCC's rules, against the
presentation of any WB program by a cable system during the period
commencing one day before and ending fourteen (14) days after receipt of
such WB program by Station. The geographic zone of network non-duplication
protection shall be the Designated Market Area ("DMA") (as defined by
▇▇▇▇▇▇▇) in which your Station is located or any lesser zone mandated by
Sections 76.92 and 73.658(m) of the FCC's rules. Network non-duplication
protection shall extend only to WB programs that Station is carrying in
accordance with the terms of this Agreement and such protection shall be
subject to the terms and provisions of subparagraph 2(f). You are under no
obligation to exercise in whole or in part the network non-duplication
rights granted herein. Notwithstanding anything to the contrary in this
paragraph, no non-duplication protection is provided against the signal of
WGN until such time that WB offers exclusivity against the signal of WGN
to its affiliates.
18. Affiliation Ratings Payments. Affiliate agrees to pay to WB an annual
payment, based on the Station's television market ratings, for WB prime
time programming, commencing with the initial broadcast by Station of such
programming, all as defined and set forth in the "Annual Ratings Payment"
Exhibit attached hereto. These payments are intended to compensate WB for
the WB programming and are in no way intended to, nor do they confer on
WB, any ownership or other equity interest in Station. If, subsequent to
January 1, 2004, WB modifies the financial model then in effect between WB
and stations affiliated with WB at that time ("WB Affiliates") or modifies
the terms and conditions under which WB affiliates pay compensation to WB
(the "compensation modification"), including but not limited to a
modification of the allocation of commercial time between the WB
affiliates and WB, then: (i) WB will provide Affiliate with reasonable
notice of the compensation modification; and, (ii) Affiliate shall have
the opportunity to either elect to participate in the compensation
modification or to opt out of the compensation modification by advising WB
in writing that Affiliate has elected not to participate in the
compensation modification. Upon receipt of Affiliate's election, WB may:
(i) accept Affiliate's election to opt out of the compensation
modification; or (ii) terminate this Agreement upon 60 days prior written
notice.
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19. Notices and Reports:
(a) In addition to any other reports or forms requested herein, you will
provide to us in writing, in the manner reasonably requested by WB,
such reports covering WB programs broadcast by Station as we may
request from time to time. To the extent we provide you forms for
such purpose, you shall provide such reports on these forms.
(b) All notices, reports or forms required or permitted hereunder to be
in writing shall be deemed given when personally delivered
(including, without limitation, by overnight courier or other
messenger or upon confirmed receipt of facsimile copy) or on the
date of mailing postage prepaid, addressed as specified below, or
addressed to such other address as such party may hereafter specify
in a written notice. Notice to Affiliate shall be to the address set
forth for Affiliate on page 1 of this Agreement. Additionally,
notice will be sent to ACME Television Holdings, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇▇.
Notice to WB shall be to: The WB Television Network, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel.
20. Miscellaneous:
(a) Nothing contained in this Agreement shall create any partnership,
association, joint venture, fiduciary or agency relationship between
the parties hereto.
(b) Nothing contained in this Agreement nor the conduct of any officer,
director, agent or employee of either WB or Affiliate shall be
deemed to create or to constitute ownership by WB, in whole or in
part, of Affiliate, Station or the License or in any way constitute
a derogation of the rights, duties and responsibilities imposed upon
Affiliate. Nothing in this Agreement shall be deemed to delegate to
WB, directly or indirectly, any right to control the operations of
Station.
(c) You shall at all times permit us, in connection with WB programming,
without charge, to place on, maintain and use at Station's premises,
at our expense, such equipment as WB shall reasonably require for
the distribution of WB Network programming. Station shall operate
such equipment for us, to the extent we reasonably request, and no
fee shall be charged by Station therefor.
(d) No waiver of any failure of any condition or of the breach of any
obligation hereunder shall be deemed to be a waiver of any preceding
or succeeding failure of the same or any other condition, or a
waiver of any preceding or succeeding breach of the same or any
other obligation.
(e) Each and all of the rights and remedies of WB and Affiliate under
this Agreement shall be cumulative, and the exercise of one or more
of said rights or remedies
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shall not preclude the exercise of any other right or remedy under
this Agreement, at law or in equity. Notwithstanding anything to the
contrary contained in this Agreement, in no event shall either party
hereto be entitled to recover any lost profits or consequential
damages because of a breach or failure by the other party, and
except as expressly provided in this Agreement to the contrary,
neither WB nor Affiliate shall have any right against the other with
respect to claims by any third person or other third entity.
(f) Paragraph headings are included in this Agreement for convenience
only and shall not be used to interpret this Agreement or any of the
provisions hereof, nor shall they be given any legal or other
effect.
(g) As of the date hereof, this Agreement, including all Exhibits
attached hereto, constitutes the entire understanding between WB and
Affiliate concerning the subject matter hereof and shall not be
amended, modified, changed, renewed, extended or discharged except
by an instrument in writing signed by the parties or as otherwise
expressly provided herein. No inducement, representations or
warranties except as specifically set forth herein have been made by
either party to this Agreement to the other. This Agreement replaces
any and all prior and contemporaneous agreements, whether oral or
written, pertaining to the subject matter hereof.
(h) This Agreement may be executed in counterparts, with the Agreement
being effective when each party hereto has executed a copy and
delivered that copy to the other party hereto.
(i) WB agrees to make WB programming available to Affiliate in digital
format, on a timetable and in a format determined by WB. WB will
consult with Affiliate concerning its plans for digital production
and delivery, including the transmission format to be employed.
After the inception of Affiliate's broadcasts on its FCC-assigned
digital frequency (the "DTV Channel"), Affiliate agrees to carry WB
programming that is supplied in digital format on the DTV Channel.
WB programming will be treated as Affiliate's primary network
programming on the DTV Channel. It is acknowledged that Affiliate
owns the digital bandwidth in its DTV Channel, and that Affiliate is
not obligated to provide WB with more than one digital channel in
its market.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first written above.
THE WB TELEVISION NETWORK PARTNERS ACME TELEVISION LICENSEE
L.P. dba THE WB TELEVISION NETWORK OF ILLINOIS, LLC
("WB") ("Affiliate")
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------- -------------------------------
Title: Title: Pres. & COO
---------------------------
Date: 9/7/99 Date: 9/7/99
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ANNUAL RATINGS PAYMENT EXHIBIT
As part of the consideration to WB for the WB programming, Licensee agrees to
make annual payments to WB based on Station's television market ratings (the
"TMR Payments") for adults 18-49 for the prime time broadcast periods of WB
programming commencing with the initial broadcast by Station of WB programming.
Such payments shall partially compensate WB for the WB programming by
calculating the value and/or profitability added to Station as a result of its
affiliation with WB and pay to WB 25% of such added value and/or profitability.
Such payments are not intended to, nor do they, confer in WB any ownership
interest in Station. All defined terms used herein shall have the same meaning
as set forth in the Agreement unless otherwise defined herein. The TMR Payments
shall be calculated and paid as follows:
A. Calculation of TMR Payment Amount: At the end of each successive
Contract Year commencing on the Launch Date, the "Average Rating"
for each such Contract Year shall be determined by taking the
average of Station's television ratings (adults 18-49) for the prior
November, February, and May sweeps periods of such Contract Year as
reported on the ▇▇▇▇▇▇▇ Station Index ("NSI"), as processed,
refined, re-formatted or re-configured by that application commonly
known as the "SNAP System," but only with respect to those prime
time hours programmed by WB under the Agreement. Based on the
Station's Average Rating for each Contract Year and the number of
hours programmed by WB in that Year, Station shall owe WB the amount
(the "TMR Amount") set forth in the table attached hereto as the
Annual Ratings Payment Exhibit Table. For example, in the particular
case of Station, if the adults 18-49 rating for WB programmed hours
is 1.0 for a particular Contract Year, and WB is programming 15
hours per week during such Year, then the TMR payment that will be
due and owing for such Year is $9,057. In the event that either
Station or WB contends that the TMR Payment for any particular
Contract Year, as set forth in the Annual Ratings Payment Exhibit
Table, is not an accurate statement of the twenty-five percent (25%)
share of the added value and/or profitability during WB programmed
prime time hours that Station owes to WB, or if the TMR Payment for
any particular Contract Year has increased or decreased from the
prior year's TMR Payment disproportionately in comparison to the
increase or decrease over such period in the profitability of
Station's WB furnished prime time programming (after giving effect
to any increase in the number of WB prime time programming hours
between the two periods), then either WB or Station may request that
the Station's financial results and operational information be
audited and reviewed by WB and the result of such audit shall
determine the level of the TMR Payment for the given period.
Promptly after such audit and review, WB and Station shall meet to
discuss such financial results and operational information of
Station and in good faith adjust the then currently due TMR Payment
to reflect the result of the audit and the intent of these Payments
as set forth in the introductory paragraph to this Exhibit.
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B. TMR Payment: The TMR Amount for each Contract Year shall be payable
by Licensee to WB within 15 days following WB's delivery to Licensee
of an invoice for the TMR Amount, which invoice shall be delivered
by WB not earlier than the release by NSI or any successor ratings
index of the ratings for the fourth and final sweeps period of such
Contract Year.
C. No NSI Ratings: In the event there are no NSI ratings available,
then Licensee and WB shall use those standard television market
ratings which are generally available and used by national and/or
regional advertisers for purposes of calculating advertising
payments to television stations.
D. Continuing Obligation. Licensee's obligation to make the above TMR
Payments on the basis set forth herein shall survive any termination
of this Agreement by WB, any sale or transfer of any Station assets
and/or any ownership interest in the Station and shall remain
binding on any successor Station owner, which successor remains an
affiliate and is approved by WB in its discretion as otherwise set
forth in the Agreement.
E. Calculation Of Baseline (IF APPLICABLE): It is recognized that
Station is a start-up, and that ratings data is not available to
track Station's historical performance during three previous ratings
periods. The parties have agreed that notwithstanding anything to
the contrary set forth above, the Baseline for the calculation of
the TMR payments will be calculated as follows: During the
__________ 199__ and ___________199__ and ____________ 199__ sweeps
periods the average ratings (Adults 18-49) for the nights that are
not programmed by WB will set the baseline number for the
computation of the TMR payment. The difference between the baseline
and the average rating for WB programmed nights during the February,
May and November sweeps period will determine the amount that is due
to WB, during the first year and during all subsequent years. The
calculation of ratings under this paragraph shall be as reported on
the ▇▇▇▇▇▇▇ Station Index ("NSI") as processed, refined,
reformatted, or reconfigured by that application commonly known as
the "SNAP System".
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