Exhibit 10.6
“[*]” = confidential
portions of this document that have been omitted and have been
separately filed with the Securities and Exchange Commission
pursuant to an application for confidential treatment under
Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
TELEVISION LICENSE
AGREEMENT
PRINCIPAL TERMS &
CONDITIONS
AGREEMENT entered into as of
January 1, 2008 by and between Hallmark Hall of Fame
Productions, Inc., 2501 McGee, Kansas City, MO 64108
(“Licensor”) and Crown Media United States, LLC, 12700
Ventura Blvd., Studio City, CA 91604;
(“Licensee”).
Licensor hereby grants to Licensee,
and Licensee hereby accepts, a limited license for television
exhibition of the pictures described herein in accordance with the
Terms and Conditions set forth below and the Standard Terms
attached hereto in Exhibit I and incorporated herein by
reference.
TERMS AND
CONDITIONS
1.
TERRITORY : United States, its
territories and possessions.
2.
PICTURES LICENSED
: The
Pictures in the “Hallmark Hall of Fame” library set
forth in Schedule A attached hereto and hereby incorporated herein
by reference.
3.
RIGHTS LICENSED :
a)
The rights
licensed to Licensee hereunder are exclusive exhibition and
broadcast rights in all forms of Standard and Non-Standard
Television. Any proposed exploitation by Licensee in Video on
Demand, Consumer Video Devices and other forms of new media rights,
such as interactive rights, must be approved by Licensor and, if
approved, all revenues received by Licensee from such exploitation
will be shared equally by Licensor and Licensee. If Licensor
intends to grant Video on Demand, Consumer Video Devices and other
forms of new media rights to third parties during the Term, it will
first negotiate with Licensee regarding Licensee’s
acquisition of such rights and, if agreement cannot be reached,
will give Licensee a final written offer. If Licensee does
not accept the final offer and Licensor subsequently decides to
accept an offer from a third party for such rights which is less
favorable to Licensor than its final offer to Licensee, it will
first give Licensee the opportunity to enter into an agreement for
such rights on terms substantially similar to those of the third
party offer. Licensor will not, in any event, grant any third
party the right to exhibit or to authorize downloads of the
Pictures on the “Internet” or via similar technology
unless it requires the third party to impose a meaningful charge on
the viewers for such exhibition or download.
b)
“
Non-Standard Television ” is defined as transmission
to individual or multiple receivers by any and all means of
technology, whether now known or hereafter devised (other than
exhibitions by means of Standard Television, Video on Demand and
Consumer Video Devices). It includes, without
limitation,
transmission by
means of cable, wire or fiber of any material, “over-the-air
pay” or STV in any frequency band, any and all forms of
regular or occasional scrambled broadcast for taping, master
antenna, satellite master antenna, low power television,
closed-circuit television, tape, cassette and disc distribution
(excluding Consumer Video Devices), portable video device
distribution, single and multi-channel multi-point distribution
service, direct to satellite transmission and On-Line Distribution,
whether on a pay or free basis. “ Standard
Television ” means television distributed by a UHF or VHF
television broadcast station, the video and audio portions of which
are intelligibly receivable without charge by means of standard
home rooftop or television set built-in antennas; “
Consumer Video Devices ” means distribution and/or
exploitation of the Pictures by means of videodiscs,
videocassettes, laser discs and similar devices for non-commercial
replay on a television screen by means of a playback device, where
the television screen and playback device are both located in the
home of a consumer and “ Video-on-Demand ” means
technologies by which the Pictures may be ordered and viewed
individually for which for which a separate charge is
imposed. All rights not expressly granted herein shall remain
the sole and exclusive right of Licensor for Licensor’s
unlimited, unencumbered use.
4.
EXHIBITION DAYS PER PICTURE
: [*]
Exhibition Days. Each Exhibition Day consists of up to 2
telecasts within a 24 hour period. Licensee may take no more
than [*] of the Exhibition days for any Picture during any calendar
year.
5.
LICENSE TERM : 10 years per Picture
commencing on the dates indicated in Schedule A or if
“TBD”, a date mutually determined by Licensor and
Licensee. If the maximum number of Exhibition Days is taken
prior to the end of the License Term for any Picture, the License
Term will end at the end of the last Exhibition Day. In
addition, in the event of a “change of control” of
Licensee, Licensor will have the right to terminate this license
and agreement by written notice given within 30 days of the
effective date of the change of control. A “change of
control” for these purposes is any transaction through which
Hallmark Cards divests itself, directly or indirectly, of its
controlling interest in Licensee or Crown Media
Holdings, Inc.
6.
TOTAL LICENSE FEE
: a) $[*]
for each of the 16 Pictures produced from 2003 to 2008, as listed
in Schedule A, and $[*] for each of the 42 “Library
Titles”, payable for each Picture in equal monthly
installments over its License term. The total amount payable,
if all Pictures are available for their full License terms, is
$17,200,000.
7.
BROADCAST MATERIALS
: Licensor
shall provide Licensee with access to a both standard definition
and high definition masters of the Pictures. To the extent
that high definition masters do not exist, Licensee will [*] with
Licensor, [*], of preparing these masters from the original film
materials or highest quality elements available. To the
extent available, Licensor will provide Licensee with copies of
excerpts from the Pictures, “behind the scenes”
footage, scripts, synopses, and all other promotional materials
selected by Licensor and in Licensor’s possession or under
Licensor’s control. All materials shall be on loan to
Licensee. Licensee shall return materials to Licensor at
Licensee’s expense at the expiration of the License Term,
including any hi-def masters and other materials for which the
parties shared the costs.
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IN WITNESS WHEREOF
, the parties hereto have executed
the Agreement as of the day and year first above
written.
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LICENSEE:
CROWN MEDIA UNITED STATES, LLC
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LICENSOR:
HALLMARK HALL OF FAME
PRODUCTIONS, INC.
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By:
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By:
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Charles Stanford, VP
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Brad R. Moore, President
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Print Name and Title
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Print Name and Title
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Dated:
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Dated:
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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 upon the later of 60
days prior to the start of the License Term or 60 days after
execution of this Agreement: one standard definition on Beta
SP videotape and, to the extent such materials exist or can be
created (with the costs therefore shared pursuant to Paragraph 7
above), high definition copies 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 insurance thereon shall be borne by
Licensee.
(b)
Licensee shall
notify Licensor by telegram within ten (10) days after
Licensee’s receipt of a print if such print is physically
defective for television broadcasting by customary industry
standards. If Licensee so notifies Licensor with respect to
any such physical defect or 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 paragraph (b) of
paragraph 11 of this Exhibit. 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 and hi-def masters), in the
same form and condition as delivered by Licensor, ordinary wear and
tear from proper use excepted. Such print shall be delivered
to Licensor, or to any other party, to such place 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 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
billings incorporated in the pictures as delivered by Licensor.
In no event may any such insertions of commercial material or
such cuts to conform to time segment requirements adversely affect
the artistic or pictorial quality of the picture or interfere with
its
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continuity.
Licensee will have the right to dub and/or subtitle each
picture in the language for which rights are granted hereunder and
Licensee agrees to grant Licensor access to the dubbed and/or
subtitled version at Licensor’s request.
4.
USE OF PRINTS
.
(a)
Licensor reserves
the right to change the title of any picture(s) covered by
this Agreement.
(b)
In the event
Licensee does not telecast any picture hereunder the number of
times permitted hereunder, then 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 sub-paragraph
(b) of paragraph 11 of this Exhibit.
(c)
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.
(d)
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
Licens
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