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Exhibit 10.26
CONFIDENTIAL TREATMENT REQUESTED
KING WORLD F.S.C. CORPORATION
830 Morris Turnpike
Short Hills, New Jersey 07078
Dated as of September 19, 1991
Unilever NV
c/o Mr. Doug Gluck
Senior Vice President
E.C. Television Inc.
Greendon House
7 C-D Bayham Street
London NW1 OEY
England
Dear Doug:
Reference is made to the agreement between Unilever NV
("Unilever"), through its then agent Lintas International Limited
("Lintas"), and King World F.S.C. Corporation ("KW") through its then agent
Buena Vista International, Inc. ("BVI"), dated June 2, 1988, as amended as
of June 13, 1989 (the "Original Agreement"). KW and Unilever acknowledge
that E.C. Television Inc. ("ECTV") has replaced Lintas as Unilever's agent
and liaison with KW in this matter and that BVI no longer is acting as KW's
agent in the matter of the renewal. Unless otherwise specified, all
defined terms herein shall have the meanings set forth in the Original
Agreement. Except as otherwise specified herein, the amendments to the
Original Agreement hereunder shall become effective on the commencement of
the Renewal Period (as defined in Paragraph A below). Unilever and KW
agree to amend the Original Agreement as follows:
A. The License Term shall be extended for the period January 1,
1993 through December 31, 1994 (the "Renewal Period").
B. As used herein, the "Eastern European Territories" shall
mean Albania, Bulgaria, Czechoslovakia, Hungary, Poland, Romania, Union of
Soviet Socialist Republics, and Yugoslavia (including all of the constitu-
ent republics of the foregoing countries as of January 1, 1991). The
Eastern European Territories shall not be included in Territory A, and all
rights in such Eastern European Territories shall revert to KW.
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C. The guaranteed minimum license fee during each calendar year
of the Renewal Period shall be [****] (the "Minimum License Fee"). To the
extent that during each year of the Renewal Period, the royalty payments to
KW for such year hereunder do not at least equal the Minimum License Fee,
the difference between the Minimum License Fee and such royalty payments to
KW with respect to such year shall be paid to KW (the "Shortfall Payment")
on or before the first January 31 following the end of such year. The
second sentence of Paragraph 4(d) of the Original Agreement shall be
deleted and the parties acknowledge that during the Renewal Period,
Unilever shall not be entitled to credit any cumulative excess in royalty
payments from any one year against the Minimum License Fee for any other
year.
D. In place of the basic royalty rates and adjustments referred
to in Paragraphs 4(c), 9 and 10 of the Original Agreement, the royalties
payable to KW by Unilever for each episode per telecast of each of the
Series shall be at the base rates in each country set forth on Schedule A
attached hereto (each, a "Royalty Rate"), subject to the following adjust-
ments:
(i) The Royalty Rate shall be increased by [****] for any
episode telecast in which [****.]
(ii) The Royalty Rate shall be increased by [****] for any
episode [****]. The method, time and source used to determine the [****]
shall be determined on a country-by-country basis and by using local
customary audience measurement methods subject to KW's and Unilever's
mutual approval. (The escalations pursuant to this clause (ii) and the
foregoing clause (i) are additive and not cumulative.)
(iii) With respect to repeat telecasts of an episode
[****], the royalty for each such repeat telecast shall be [****] of the
otherwise applicable Royalty Rate.
(iv) With respect to repeat telecasts of an episode
[****], the otherwise applicable Royalty Rate shall be [****] (the basis of
calculation for which Unilever shall promptly furnish to KW); provided,
however, that such adjusted royalty shall in no event be less than [****]
of such otherwise applicable Royalty Rate.
(v) With respect to telecasts of the Series in Italy,
[****].
E. In calculating royalties to KW hereunder, (i) Unilever shall
allocate license fees for each Series for [****].
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F. The Accounting Periods set forth in Paragraph 6 of the
Original Agreement shall be calendar months rather than calendar quarters.
G. As of the date hereof, Paragraph 16 of the Original Agree-
ment is deleted in its entirety and replaced with the following:
"16. CREDITS. The Series shall be
_______
exploited with a separate credit reading: "Based upon WHEEL
OF FORTUNE (or JEOPARDY! as the case may be) produced in the
United States by MERV GRIFFIN ENTERPRISES, a unit of SONY
PICTURES ENTERTAINMENT, INC. and Distributed by KING WORLD
in association with BUENA VISTA INTERNATIONAL, INC." (or
such other similar legend as KW may from time to time advise
Unilever), in an adequate translation."
H. As of the date hereof, Paragraph 26 of the Original Agree-
ment is deleted in its entirety and replaced with the following:
"26. RENEWAL. Following the expiration
_______
of the Renewal Period, and provided that KW then re-
tains the right to distribute the Series, Unilever
shall have a series of successive dependent, annual
options to extend the License Term hereunder for peri-
ods each of one calendar year (each, a "Renewal Year"),
which options Unilever shall exercise, if at all, by
written notice to KW on or before the March 31st imme-
diately preceding the applicable Renewal Year. In the
event Unilever exercises its option with respect to
each Renewal Year, the terms and conditions of this
agreement, as amended, shall apply to such Renewal
Year, subject to the following:
(a) The Minimum License Fee for such
Renewal Year shall be equal to the greater amount of
[****].
(b) The base Royalty Rate for each Series
for each Renewal Year (i.e., prior to any adjustment
pursuant to this agreement, as amended) shall be
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increased on a per episode basis in each country within
Territory A by the greatest of:
[****]
In the event Unilever does not exercise its option to extend the
License Term for any Renewal Year as set forth herein, KW shall
have the right to license such rights to any third party without
any further obligation of any nature to Unilever; provided,
however, that KW shall offer Unilever the right to match, by
written notice to KW within five (5) business days following
Unilever's receipt of notice from KW to such effect, any third-
party offer that is less favorable to KW than the terms hereunder
as applied to such Renewal Year. The parties specifically
acknowledge that the foregoing option and matching right shall be
exercisable as to the entire Territory only and not on a country-
by-country basis."
I. Unilever acknowledges that, because BVI will no longer be
KW's agent in this matter, the following provisions of the Original
Agreement shall be modified:
(i) Accounting Statements pursuant to Paragraph 6 shall
be sent directly to KW, with no copy to BVI;
(ii) Paragraph 13(a)(ii) is deleted;
(iii) The phrase "in association with BUENA VISTA INTERNA-
TIONAL, INC." shall be deleted from the credit provision set forth in
Paragraph 16; and
(iv) Notices to KW pursuant to Paragraph 22 shall be sent
directly to KW, with no copy to BVI.
In the event KW so notifies Unilever in writing prior to the
commencement of the Renewal Period, the provisions of clause (i) above
shall be effective as of the date set forth in such notice; provided,
however, that in the event KW so notifies Unilever, KW shall indemnify
Unilever and ECTV from and against any claim by BVI that Unilever has
breached the Original Agreement by failing to send Accounting Statements to
BVI following the date of the KW notice. Unilever shall immediately notify
KW of any such claim or threatened claim by BVI and KW shall have the right
to control the defense and settlement of any claim to which this indemnity
applies.
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J. The parties acknowledge that, without limitation, the
royalty payments paid by Unilever to KW hereunder are in consideration of
the copyright licenses granted to Unilever hereunder.
Except as modified hereunder, the Original Agreement shall remain
in full force and effect.
Very truly yours,
KING WORLD F.S.C. CORPORATION
By:__________________________
ACCEPTED AND AGREED TO:
UNILEVER NV
By: E.C. TELEVISION INC.
By:______________________
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ATTACHMENT A
WHEEL OF FORTUNE AND JEOPARDY! LICENSE FEE SCHEDULE
(Royalty Payment in U.S. Dollars Per Episode Per Telecast)
Per Calendar Year
TERRITORIES 1993 1994
____ ____
WHEEL JEOPARDY! WHEEL JEOPARDY!
_____ _________ _____ _________
Belgium [****] [****] [****] [****]
Denmark [****] [****] [****] [****]
Finland [****] [****] [****] [****]
France [****] [****] [****] [****]
German-speaking [****] [****] [****] [****]
Greece [****] [****] [****] [****]
Italy [****] [****] [****] [****]
Netherlands [****] [****] [****] [****]
Portugal [****] [****] [****] [****]
Spain [****] [****] [****] [****]
Sweden & Norway [****] [****] [****] [****]
United Kingdom [****] [****] [****] [****]
TBD TERRITORIES
_______________
Andorra
Iceland
Ireland
Liechtenstein
Luxembourg
Malta
Monaco
Switzerland