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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 23, 1998
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THE MARQUEE GROUP, INC.
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(Exact name of registrant as specified in charter)
Delaware 0-21711 13-3878295
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(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
888 Seventh Avenue 37th Floor, New York, New York 10019
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 977-0300
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N/A
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
The Marquee Group, Inc. (the "Company") has entered into an Agreement
and Plan of Merger (the "Merger Agreement"), dated as of July 23, 1998, with
SFX Entertainment, Inc. ("Parent") and SFX Acquisition Corp., a wholly-owned
subsidiary of Parent ("Sub"), pursuant to which Sub will merge with and into
the Company (the "Merger") and the Company shall continue as the surviving
corporation of the Merger. Pursuant to the Merger Agreement, upon the
consummation of the Merger, each outstanding share of common stock, $.01 par
value, of the Company (the "Marquee Common Stock") shall be converted into the
right to receive from Parent a number of shares of Class A Common Stock, $.01
par value, of Parent (the "SFX Class A Common Stock") equal to the following
exchange ratio (the "Exchange Ratio"): (i)if the SFX Class A Common Stock
Price (as defined below) is less than or equal to $57.50, then the Exchange
Ratio shall be the number of shares of SFX Class A Common Stock equal to the
quotient obtained by dividing $6.00 by the SFX Class A Common Stock Price; (ii)
if the SFX Class A Common Stock Price is greater than $57.50 and less than or
equal to $60.00, then the Exchange Ratio shall be the number of shares of SFX
Class A Common Stock equal to the difference between (A)0.1200 and (B) the
quotient obtained by dividing 0.9000 by the SFX Class A Common Stock Price; and
(iii) if the SFX Class A Common Stock Price is greater than $60.00, then the
Exchange Ratio shall be the number of shares of SFX Class A Common Stock equal
to the quotient obtained by dividing $6.30 by the SFX Class A Common Stock
Price. The term "SFX Class A Common Stock Price" means the average of the
reported price for the fifteen consecutive trading days ending on the fifth
trading day prior to the effective time of the Merger on the primary exchange
on which the SFX Class A Common Stock is traded, including the Nasdaq National
Market.
The consummation of the Merger is subject to the satisfaction of a
number of conditions set forth in the Merger Agreement, including, but not
limited to, the approval by the stockholders of the Company of the transactions
contemplated thereby, the expiration or termination of any applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the
entry by the Company into a bank credit facility and the consummation of an
acquisition, and the receipt of all applicable consents to the Merger from
third parties and regulatory agencies. The Merger is expected to be consummated
in the fourth quarter of 1998.
The foregoing description of the Merger Agreement does not purport to
be complete and is qualified in its entirety by the copy of the Merger
Agreement attached hereto as an exhibit, which is incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated as of July 23, 1998, among SFX
Entertainment, Inc., SFX Acquisition Corp. and The Marquee Group, Inc.
(incorporated by reference to Report on Form 8-K of SFX Entertainment,
Inc. (File No.0-24017) filed with the Commission on August 5, 1998).
10.1 Marketing Agreement, dated as of October 1, 1997, by and between
Sports Marketing & Television International, Inc. and Breeders' Cup
Limited (portions have been omitted pursuant to a request for
confidential treatment and filed separately with the Commission).
10.2 Press Release, dated July 23, 1998 (incorporated by reference to
Report on Form 8-K of SFX Entertainment, Inc. (File No.0-24017) filed
with the Commission on August 5, 1998).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
THE MARQUEE GROUP, INC.
By: /s/ Jan E. Chason
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Name: Jan E. Chason
Title: Chief Financial Officer and
Treasurer
Date: July 30, 1998
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MARKETING AGREEMENT
THIS AGREEMENT, made and entered into as of this 1 day of October,
1997, by and between SPORTS MARKETING & TELEVISION INTERNATIONAL, INC., a
Delaware corporation (hereinafter "SMTI"), and BREEDERS' CUP LIMITED, a New
York not-for-profit corporation (hereinafter "BCL");
W I T N E S S E T H:
THAT, WHEREAS, BCL conducts a program which promotes the thoroughbred
horse racing industry and familiarizes the international public with such
industry; and
WHEREAS, in connection with such program BCL sponsors an annual series
of thoroughbred horse races known as the "Breeders' Cup Championship"
(hereinafter "Championship"), provides purses and awards in connection with
thoroughbred horse races, sponsors a series of races known as the Breeders' Cup
National Stakes Program (hereinafter "National Stakes Races"), co-sponsors a
schedule of races with the New York Racing Association known as Breeders' Cup
Preview Day (hereinafter "Preview Day") and BCL owns and controls all rights in
and to the names, logos, symbols, mascots and designs of BCL and the
Championship (which names, logos, symbols, mascots and designs of BCL and the
Championship and other BCL sponsored races are hereinafter referred to as the
"Properties"); and
WHEREAS, BCL is desirous of retaining the services of SMTI to provide
general marketing consultation, broadcast and sponsorship rights, sales,
advertising production and media placement, publicity and public relations,
television and video production, production of promotional materials,
merchandising and licensing of BCL in connection with the
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Championship, the National Stakes Races, the Preview Day Races and other BCL
sponsored races, awards and programs and the Properties; and
WHEREAS, SMTI is desirous of providing services to BCL in connection
with the aforementioned marketing consultation, broadcast and sponsorship
rights, advertising, public relations, television production, promotion
materials and licensing of BCL, the Championship, the National Stakes Races,
the Preview Day Races and other BCL sponsored races, awards and programs and
the Properties.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
I. ENGAGEMENT.
BCL hereby engages and retains SMTI to provide the following
services and SMTI agrees to provide such services to BCL:
1.1. CONSULTING SERVICES. SMTI shall render to BCL
conceptual, strategic and tactical expertise in terms of marketing and
broadcasting BCL programs and events. SMTI agrees to provide BCL access to
SMTI's business contacts and relationships. The general consulting services to
be performed by SMTI shall include, but not necessarily be limited to, the
following matters and activities of BCL: overall policy and planning, BCL
program structure and implementation of events; promotional regulations;
commercial exploitation; track selection, contract negotiation and fulfillment;
consumer trends and perceptions; industry relations and financial analysis and
planning.
1.2. MARKETING SERVICES. SMTI shall provide services and
represent BCL in the general area of marketing other than as contained in this
Article I below, including, but not
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limited to, the following: creative development; analysis and planning;
presentations; simulcasting and remote wagering; host track negotiations;
publicity and public relations; national promotions; track promotions, and
event management. A more specific description of the foregoing marketing
services is attached hereto and designated Exhibit A.
1.3. ADVERTISING SERVICES. SMTI shall produce, and execute
media placement of, all advertising (except for certain trade and industry
advertising which BCL may deem advisable) for or in connection with BCL, the
Championship or the Properties, including, but not limited to, consumer print
ads; trade print ads; radio and television commercials. A more specific
description of the foregoing advertising services is attached hereto and
designated Exhibit B.
1.4. BROADCASTING SERVICES. SMTI shall provide services and
represent BCL's interests in all broadcasting areas, including, but not limited
to, media negotiations and media service. A more specific description of the
foregoing broadcasting services is attached hereto and designated Exhibit C.
1.5. PRODUCTION SERVICES. SMTI shall provide production
services, as may be requested by BCL from time to time, necessary to supply
quality material for BCL programs and events, including, but not limited to,
the following: securing competitive production bids; selection of qualified
third-party vendors and suppliers; establishment and control of budgets;
supervision of the production process; generation of timely and accurate
billing; insuring completion and shipment of the finished product. The
foregoing production services may be performed in the areas set forth on
Exhibit D, attached hereto.
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1.6. SALES SERVICES. SMTI shall represent BCL in the sale of
commercial rights related to the properties and shall perform the following
duties:
(a) BROADCAST RIGHTS. SMTI shall negotiate,
consummate and service all sales of rights to all broadcasting
entities including home video and videocassette sales, both domestic
and foreign;
(b) SPONSORSHIP SALES. SMTI shall negotiate,
consummate and service all sales of rights to all commercial entities,
both domestic and foreign; provided, however, that BCL retains the
right to make sales of sponsorship rights, in which event SMTI shall
remain responsible to BCL for sales assistance and the servicing of
such sales other than those sales made pursuant to paragraph 3.4(c)
herein;
(c) LICENSING SALES. SMTI shall negotiate,
consummate and service grants of licensing rights and privileges to
third-party licensees, racetracks and their respective sources of
supply on a year to year basis at the prior consent of BCL; provided,
however, that BCL retains the right to make any and all third party
sales of licensing rights and privileges; and
(d) VIDEO FOOTAGE SALES. SMTI shall negotiate,
consummate and service sales of video footage owned by BCL to all
interested third parties on a year to year basis at the prior consent
of BCL.
1.7. VIDEO PRODUCTION. SMTI shall provide production services
as may be requested by BCL from time to time necessary to supply quality video
tape and film materials to, or in association with, BCL programs, presentations
and events, including, but not limited to, the following: utilizing SMTI
personnel to produce, direct, edit and script; securing competitive bids
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from third-party production companies and/or third-party production studios;
selection of qualified third-party personnel, companies and studios,
establishment and control of budgets, generation of timely and accurate
billing; insuring completion and shipment of finished product. The foregoing
production services may be performed in the areas set forth in Exhibit D
attached hereto.
1.8. TELEVISION PRODUCTION. SMTI shall provide production
services as may be requested by BCL from time to time for Breeders' Cup
television events which are not produced directly by the broadcasting entities
described in paragraph 1.6(a), except that SMTI shall have the exclusive right
to produce the Preview Day telecasts through the year 1999 in conjunction with
BCL/NBC and BCL/NYRA agreements dated July 30, 1993 and March 31, 1994,
respectively.
1.9. SMTI shall cause Michael Letis (hereinafter "Letis") and
Michael Trager (hereinafter "Trager") to be responsible for the management of,
and to devote substantial attention to, the engagement and the performance of
the services set forth hereinabove in this Article I.
1.10. BCL agrees to cooperate with SMTI in the sale of
sponsorships and licenses to third parties and accordingly shall not
unreasonably withhold the approval of such sales proposals presented by SMTI
during the term hereof, provided, however, that BCL may withhold approval of
any proposed sale of sponsorship or sponsorship agreement which gives name
entitlement to the sponsor.
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II. TERM.
2.1. Unless sooner terminated as hereinafter provided, the
term of this Agreement shall commence on January 1, 1998 and end on December
31, 1999. In the event NBC renews its agreement with BCL dated July 30, 1993,
for two years as provided for under such agreement, then this Agreement shall
be automatically renewed for an additional two (2) year term which coincides
with the term of the agreement between BCL and NBC.
2.2. BCL or SMTI may terminate this Agreement at any time
during the term hereof in the event of a material default in the performance of
this Agreement, including a failure to perform in good faith hereunder, by
giving written notice of such default to the party in default. In the event the
party in default does not cure said default within thirty (30) days after
receipt of notice thereof, termination of this Agreement shall be effective
upon expiration of said thirty (30) day period except as provided in Article
XI. Any termination notice in the event of material default shall state the
specific reasons for termination. Termination of this Agreement pursuant to the
provisions hereof shall not release either party from any obligations existing
prior to the effective date of termination.
III. FEES.
3.1. BASE FEE. In consideration for the performance of all
services to be performed pursuant to paragraphs 1.1 and 1.2 hereunder, BCL
shall pay SMTI a monthly base fee of $[portions have been omitted pursuant to a
request for confidential treatment and filed separately with the Commission]*,
payable on or before the 1st day of each month during the term hereof.
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3.2. PRODUCTION PAYMENTS AND COMMISSIONS. In addition to the
base fee, for the performance of the production services as set forth in
paragraph 1.5 hereunder, BCL shall pay SMTI an amount equal to the actual costs
incurred by SMTI in, the performance of such services. and in the production of
said materials, excluding general overhead costs, plus [portions have been
omitted pursuant to a request for confidential treatment and filed separately
with the Commission]*% of such costs in the form of a commission to SMTI.
In addition to the base fee, for the performance of the video
production services set forth in paragraph 1.7 hereunder, BCL shall pay SMTI
for the utilization of its own personnel at prevailing market prices for any
specific production service (other than services performed in the production of
BCL television commercials) actually performed by said personnel in the form of
a production fee in accordance with estimates approved by BCL and billed by
SMTI invoice to BCL. In addition to such production fees, BCL shall pay SMT1 an
amount equal to the actual costs incurred by SMTI in the performance of such
production services, other than those actually performed by SMTI personnel,
excluding general overhead costs, plus [portions have been omitted pursuant to
a request for confidential treatment and filed separately with the
Commission]*% of such costs in the form of a commission to SMTI.
In addition to the base fee, for the performance of the
television production services set forth in paragraph 1.8 hereunder, BCL shall
pay SMTI fee amounts in accordance with estimates pre-approved by BCL and
billed by SMTI invoice to BCL.
3.3. BROADCAST RIGHTS COMMISSIONS. In addition to the base
fee, for the performance of the broadcasting services set forth in paragraph
1.4 hereunder, BCL shall pay SMTI a commission equal to [portions have been
omitted pursuant to a request for confidential treatment and filed separately
with the Commission]* percent of all fees actually received by BCL from NBC
pursuant to the Agreement dated July 30, 1993 for the broadcast rights covering
the
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Championship (the "NBC Agreement") regardless of whether such fees are received
by BCL during the term of this Agreement or thereafter. In the event NBC
exercises its option to renew the NBC Agreement, then ECL shall pay SMTI a
commission equal to [portions have been omitted pursuant to a request for
confidential treatment and filed separately with the Commission]*% of all fees
actually received by BCL from NBC up to $[portions have been omitted pursuant
to a request for confidential treatment and filed separately with the
Commission]* annually and [portions have been omitted pursuant to a request for
confidential treatment and filed separately with the Commission]*% of all fees
in excess of $[portions have been omitted pursuant to a request for
confidential treatment and filed separately with the Commission]* annually
during such renewal term. In addition, BCL shall pay SMTI a commission equal to
[portions have been omitted pursuant to a request for confidential treatment
and filed separately with the Commission]* percent of all fees actually
received by BCL for broadcast media rights (other than those granted to NBC in
the NBC Agreement) in respect of contracts or arrangements consummated as a
result of the efforts of SMTI pursuant to paragraph 1.6(a) hereunder, provided
such contracts or arrangements are fully consummated during tile term hereof.
3.4. SPONSORSHIP AND LICENSE FEES.
(a) In addition to the base fee, in the event SMTI identifies
the sponsors or licensees and makes the sale of the sponsorship or license
rights, BCL shall pay SMTI a commission during the term hereof equal to
[portions have been omitted pursuant to a request for confidential treatment
and filed separately with the Commission]* percent of the gross amount annually
of all advances, royalties, guarantees, sponsorship fees, license fees or any
and all other such fees or sums actually received by BCL from sponsoring
companies, official licensees and approved racetrack suppliers in respect of
sponsorship and license contracts or arrangements consummated by SMT1 on behalf
of BCL pursuant to paragraphs 1.6(b) and 1.6(c) hereunder, provided such
contracts or arrangements are in full force and effect and not in default on
the date of execution of this Agreement or fully consummated during the term
hereof.
(b) In the event BCL identifies and makes initial contact
with the sponsors or licensees and SMTI makes or assists BCL in the sale of the
sponsorship or license rights, then with respect to such sales, BCL shall pay
SMTI a commission during the term hereof equal to
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[portions have been omitted pursuant to a request for confidential treatment
and filed separately with the Commission]* percent of the gross amount
annually, up to [portions have been omitted pursuant to a request for
confidential treatment and filed separately with the Commission]*, of all
advances, royalties, guarantees, sponsorship fees, license fees or any and
all other such fees or sums actually received by BCL from sponsoring
companies, official licensees and approved racetrack suppliers in respect
of sponsorship and license contracts or arrangements; [portions have
been omitted pursuant to a request for confidential treatment and filed
separately with the Commission]* percent of the gross amount annually, from
$[portions have been omitted pursuant to a request for confidential treatment
and filed separately with the Commission]* to $[portions have been omitted
pursuant to a request for confidential treatment and filed separately with the
Commission]*, of all advances. royalties, guarantees, sponsorship fees, license
fees or any and all other such fees or sums actually received by BCL from
sponsoring companies, official licensees and approved racetrack suppliers in
respect of sponsorship and license contracts or arrangements; and [portions
have been omitted pursuant to a request for confidential treatment and filed
separately with the Commission]* percent of the gross amount annually, in
excess of $[portions have been omitted pursuant to a request for confidential
treatment and filed separately with the Commission]*, of all advances,
royalties, guarantees, sponsorship fees, license fees or any and all other such
fees or sums actually received by BCL from sponsoring companies, official
licensees and approved racetrack suppliers in respect of sponsorship and
license contracts or arrangements.
(c) In the event BCL identifies the sponsors and makes the
sale of the sponsorship rights, then BCL shall pay SMTI a commission during the
term hereof equal to [portions have been omitted pursuant to a request for
confidential treatment and filed separately with the Commission]* percent of
the gross amount annually (not to exceed $[portions have been omitted pursuant
to a request for confidential treatment and filed separately with the
Commission] annually) of all advances, royalties, guarantees, sponsorship fees
or any and all other such fees or sums actually received by BCL from such
sponsoring companies in respect of sponsorship contracts or arrangements
consummated by BCL for which SMTI shall provide sponsorship services pursuant
to paragraph 1.6(b) hereinabove and, in addition, SMT1 shall be reimbursed for
reasonable out of pocket expenses incurred in connection with such services.
3.5. ADVERTISING COMMISSIONS. In addition to the base fee,
SMTI shall retain a commission equal to [portions have been omitted pursuant to
a request for confidential treatment and filed separately with the
Commission]*% of all annual gross advertising placement billings up to a total
amount of $[portions have been omitted pursuant to a request for confidential
treatment and filed separately with the Commission]* and [portions have been
omitted pursuant to a request for confidential treatment and filed separately
with the Commission]* percent of all billings amounts in excess of $[portions
have been omitted pursuant to a request for confidential treatment and filed
separately with the Commission]* during the term hereof,
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provided BCL has approved the production and placement of such media
advertising (television, radio and print) in advance. Advertising placed by
SMTI and paid by BCL, directly or indirectly, including, without limitation,
local advertising for the host track for each Breeders' Cup Championship, shall
be included in the totals in determining the applicable percentage commission
hereunder. This paragraph 3.5 shall not apply to the trade and industry
advertising described in paragraph 1.3.
3.6. OUT-OF-POCKET EXPENSES. BCL shall reimburse SMTI for
pre-approved travel, lodging, sustenance and reasonable entertainment expenses
in connection with general publicity and media relations, and on-location host
track contract negotiations and simulcasting or remote wagering development
within fifteen (15) days after receipt by BCL of a statement setting forth in
reasonable detail such expenses.
IV. STATUS OF SMTI.
It is expressly understood that SMTI shall act at all times
herein as an independent contractor, and nothing contained herein shall be
construed to create the relation between the parties of partners or joint
venturers, licensor and licensee, or employer and employee.
V. ASSIGNMENTS.
5.1. The parties hereto understand and agree that BCL is
entering this Agreement in reliance upon the personal expertise of, and
availability of the personal services of key employees of SMTI, including, but
not limited to, Letis and Trager. This Agreement shall not be assigned by SMTI
to any other person or company without prior written consent of BCL, which
consent shall not be unreasonably withheld by BCL.
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5.2. In the event of the sale of SMT1 to any other person or
entity, or in the event of the merger or consolidation of SMTI with any other
corporation, then this Agreement may be assigned by SMTI to such successor
person or entity provided that, prior to such assignment, such successor person
or entity has effectively agreed for the benefit of BCL to assume all of the
obligations of SMTI under the terms of this Agreement, including the provisions
of paragraph 11.2(c) hereof.
5.3. This Agreement shall not be assigned by BCL without the
prior consent of SMTI, except that if BCL is merged or consolidated into a
successor corporation, then BCL may assign this Agreement to such successor
corporation provided that prior thereto said successor corporation has
effectively agreed for the benefit of SMTI to assume all of BCL's obligations
hereunder.
VI. SUBCONTRACTING.
SMTI may subcontract to third parties the performance of
services to be performed by SMT1 pursuant to this Agreement; provided, however,
only those services which, in the opinion of SMT1 and BCL, SMTI lacks the
technical expertise, personnel or facilities to perform are subject to this
right to subcontract. SMTI shall remain responsible for the performance of such
subcontracted services.
VII. CONFIDENTIALITY.
All knowledge and information which SMTI may acquire from
BCL, or from any of its employees or agents, or on the premises of BCL,
respecting the plans, methods, trade secrets and other private matters of BCL,
shall for all time and all purposes be regarded as strictly confidential and
held in trust solely for the benefit of BCL and shall not be directly or
indirectly
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indirectly disclosed by SMTI to any person other than those persons
specifically designated by BCL. It is understood that the employees, agents and
authorized personnel of SMTI may use such information in the ordinary course of
business pertaining to this Agreement and that SMTI shall use its best efforts
to preserve the confidentiality of such information at all times.
VIII. REPRESENTATIONS AND WARRANTIES.
8.1. BCL hereby represents and warrants that it is the sole
and absolute owner of the Properties, including all trademarks and copyrights
associated therewith. Furthermore, BCL represents and warrants that as of the
date of this Agreement the Properties do not infringe any contract, agreement,
copyright, trademark, literary, artistic or property right, or any right of
privacy or right of publicity of any third party, nor do such Properties
constitute slander or libel of any person, firm, corporation or association
whatsoever. BCL further represents and warrants that there is no litigation,
proceeding or claim of any nature pending or threatened against BCL which may
adversely affect the rights granted to SMTI hereunder.
8.2. SMTI represents and warrants that it shall in good faith
and with diligence conduct all activities described in Article I hereof. SMTI
further represents and warrants that there is no litigation, proceeding, or
claim pending or threatened against SMTI, its agents or employees, which may
adversely affect the duties imposed upon it hereunder.
IX. INDEMNIFICATION.
9.1. BCL shall indemnify and hold harmless SMTI from all
suits, claims, expenses, costs and liability (including reasonable legal fees
and expenses) arising directly or indirectly out of any misrepresentation or
breach of warranty made or given by BCL in this Agreement.
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9.2. SMTI shall indemnify and hold harmless BCL from all
suits, claims, expenses, costs and liability (including reasonable legal fees
and expenses) arising directly or indirectly out of any misrepresentation or
breach of warranty made or given by SMTI in this agreement or out of SMTI's
failure to pay, when due, sums attributable to vendors, subcontractors or third
persons utilized to enable SMTI to perform its duties hereunder.
X. BOOKKEEPING AND ACCOUNTING.
10.1. All sums due BCL from third parties with regard to
license agreements, sponsorship agreements and media rights agreements unless
otherwise agreed to by BCL shall be remitted directly from such third parties
to BCL and BCL shall, within fifteen (15) days after its receipt thereof, remit
SMTI's commission thereon to SMTI.
10.2. BCL agrees to submit payment of all costs of media
placement and production of printed materials, films, video tapes, television
programs and such other items as may be produced by SMTI hereunder within
twenty-five (25) days after the receipt by BCL of a statement setting forth in
reasonable detail such costs.
10.3. SMTI and BCL agree to keep accurate books and records
covering all transactions relative to this Agreement. SMTI and BCL or their
respective duly authorized representatives shall have the right at all
reasonable hours of any business day upon reasonable notice to examine at the
other's place of business said books and records and other documents and
materials in the possession or under the control of each with respect to the
subject matter and provisions of this Agreement and shall have free and full
access thereto to examine and make extracts therefrom. SMTI and BCL shall keep
all said books and records available for at least two (2) years subsequent to
the expiration of this Agreement. A true copy of all audits with
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respect to the subject matter of this Agreement made by SMTI or BCL or their
representatives shall be delivered to the other immediately upon completion.
Such right to examine is limited to SMTI's and BCL's business only as it
relates to this Agreement and neither shall have the right under any
circumstances to examine records relating to the other's business generally or
with respect to any other matters for purposes of comparison or otherwise.
XI. EVENTS OF DEFAULT.
11.1. The occurrence of any of the following events shall
constitute an event of default upon which BCL may, at its option, forthwith
terminate this Agreement effective the date notice of termination is mailed by
BCL to SMTI:
(a) The filing by or against SMTI in any forum or
jurisdiction of any petition, voluntary or involuntary (which petition
if involuntary is not dismissed or vacated within sixty (60) days),
for relief and accord in bankruptcy or for reorganization or
rearrangement under the bankruptcy laws, or an action for receivership
of any nature or for an assignment for the benefit of SMTI's
creditors.
(b) The dissolution for any reason where SMTI shall
not continue, without interruption, its business affairs.
11.2. The occurrence of any of the following events shall
constitute an event of default upon which BCL may, at its option, terminate
this Agreement effective thirty (30) days after SMTI receives notice of said
default and said default remains uncured pursuant to paragraph 2.2 hereof:
(a) The failure of SMTI to perform in any material
respect the engagement described in Article I hereof to the reasonable
satisfaction of BCL.
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(b) The breach of any representation or warranty
made by SMTI hereunder.
(c) The termination of employment of Letis and/or
Trager with SMTI, whether caused by Letis and/or Trager or SMTI, or
for any reason. or the unavailability of Letis and/or Trager to
perform services necessary to enable SMTI to comply with the terms of
this Agreement, it being understood that an important inducement to
BCL to enter this Agreement is the availability of Letis and/or Trager
as employees of SMTI.
11.3. The occurrence of any of the following events shall
constitute an event of default upon which SMTI may, at its option, forthwith
terminate this Agreement effective the date notice of termination is mailed by
SMTI to BCL:
(a) The filing by or against BCL in any forum or
jurisdiction of any petition, voluntary or involuntary (which petition
if involuntary is not dismissed or vacated within sixty (60) days),
for relief and accord in bankruptcy or for a reorganization., or
rearrangement under the bankruptcy laws, or an action for receivership
of any nature or for an assignment for the benefit of BCL's creditors.
(b) The dissolution of BCL for any reason, where BCL
shall not continue, without interruption, its business affairs.
11.4. The occurrence of any of the following events shall
constitute an event of default upon which SMTI may, at its option, terminate
this Agreement effective thirty (30) days after BCL receives notice of said
default and said default remains uncured pursuant to paragraph 2.2 hereof:
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(a) The failure of BCL to make payments of any sums
due hereunder on the date said payments are due;
(b) The granting by BCL to any person or company
other than SMTI the rights of advertising other than as provided in
paragraph 1.3, broadcast negotiation, broadcast sales, sponsorship
sales other than as provided in paragraph 1.6(b) hereinabove or any
other exclusive right granted by the terms of this Agreement to SMT1;
(c) The breach of any representation or warranty
made by BCL hereunder.
11.5. It is expressly understood and agreed between the
parties hereto that the rights and remedies provided hereunder are cumulative
and that the exercise of any right or remedy upon the occurrence of an event of
default shall not constitute a waiver of any other rights or remedies which may
be available hereunder or at law or in equity to either party hereto.
XII. AUTHORITY OF SMTI.
It is expressly understood by the parties hereto that SMTI
has no authority to cause BCL to become liable upon any contract without BCL's
prior written authorization, which may be general or specific, and any
agreement which may be negotiated by SMTI shall be submitted to BCL for
approval, modification or rejection. In addition, before being utilized,
published or distributed, all advertising, publicity and promotional materials
shall be approved by BCL.
XIII. RIGHTS UPON TERMINATION.
13.1. It is expressly understood that upon the termination or
expiration of this Agreement all rights and privileges granted by BCL to SMTI,
except for the Preview Day
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television production rights pursuant to the agreement between BCL and the New
York Racing Association, Inc. dated March 30, 1994, in paragraph 1.8 shall
immediately revert back to BCL and BCL, thereafter, shall have no further
obligation to SMTI except for payment of sums which became due to SMTI prior to
termination or expiration of this Agreement including all commissions due to
SMTI pursuant to paragraphs 3.3 and 3.4 hereof in respect of agreements
consummated during the term of this Agreement.
13.2. It is further agreed that, notwithstanding the
provisions of paragraph 13.1 hereof, in the event of termination of this
Agreement pursuant to paragraphs 11.1 or 11.2 hereof with the exception that
such termination may result from the death or disability of Letis and/or
Trager, BCL shall have no obligation to pay commissions to SMTI pursuant to
paragraphs 3.3 or 3.4 hereof in respect of broadcast media rights fees,
sponsorship fees or license fees received by BCL if
(a) Such fees are received after the date of
termination, and
(b) BCL has been reasonably required to retain the
services of persons or firms other than SMTI (including BCL employees)
to perform BCL's obligations under such broadcast media rights
agreements, sponsorship agreements or license agreements.
XIV. NOTICES.
All notices, requests, statements and other communications
hereunder shall be in writing and shall be given by certified or registered
mail, return receipt requested, as follows:
If to SMTI: Sports Marketing & Television
International, Inc.
410 Greenwich Avenue
Greenwich, Connecticut 06830
Attn: Michael A. Letis
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If to BCL: Breeders' Cup Limited
2525 Harrodsburg Road
P.O. Box 4230
Lexington, Kentucky 40544
Attn: D.G. Van Clief, Jr.
cc: Robert M. Watt, III, Esq.
Stoll, Keenon & Park, LLP
201 East Main Street, Suite 1000
Lexington, Kentucky 40507-1380
or at such other addresses as the parties may designate in writing in
accordance with this Article XIV.
XV. MISCELLANEOUS.
15.1. This Agreement shall be construed and interpreted in
accordance with the laws of the Commonwealth of Kentucky and the parties hereby
agree that this Agreement is made in Fayette County, Kentucky, and is to be
performed in Fayette County, Kentucky.
15.2. In the event any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidation, illegality or
unenforceability shall not affect any other provisions hereof, and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
15.3. Each party executing this Agreement warrants and
represents that he or she is fully authorized and has the power to execute this
Agreement on behalf of such party.
15.4. This Agreement constitutes the entire understanding
between the parties hereto and shall not be modified or amended unless in
writing signed by such parties. The failure of either SMT1 or BCL to enforce,
or the delay of either SMTI or BCL in enforcing, any of the
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said party's rights under this Agreement shall not be deemed a continuing
waiver and such party may, within such time as is provided by applicable law,
commence appropriate suits, actions or proceedings to enforce any or all such
rights.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SPORTS MARKETING & TELEVISION
INTERNATIONAL, INC.
By: /s/ Michael A. Letis, President
-------------------------------------
Michael A. Letis, President
BREEDERS' CUP LIMITED
By: /s/ D.G. Van Clief, Jr., President
-------------------------------------
D.G. Van Clief, Jr., President
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