UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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: January 22, 2015
Viggle Inc.
(Exact name of Registrant as Specified in its Charter)
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Delaware | 0-13803 | 33-0637631 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
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902 Broadway, 11th Floor New York, New York (Address of principal executive offices) | |
10010 (Zip Code) |
(212) 231-0092
(Registrant’s Telephone Number, including Area Code)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions ( see General Instruction A.2 below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
Item 1.01 Entry into a Material Definitive Agreement.
On January 22, 2015, Viggle Inc. (the “Company”) entered into a sales agency agreement (the “Sales Agreement”) with SFX-94 LLC (“SFX”), a subsidiary of SFX Entertainment, Inc., pursuant to which the Company appoints SFX as its exclusive sales agent for the sale of advertising and sponsorships. Pursuant to the Sales Agreement, the Company consents to SFX’s hiring of 25 members of the Company’s sales team, and SFX agrees that it will sell advertising and sponsorships on behalf of Viggle during the term of the Sales Agreement. Agent agrees that it will maintain adequate staffing levels, generally consistent with staffing levels currently maintained by the Company, for the Company’s sale of advertising and sponsorships. The Company will pay SFX a 25% commission on sales made by SFX. For barter transactions, the Company will reimburse SFX for any out of pocket and direct costs incurred by SFX with respect to such barter sales (rather than the commission set forth above), and third party ad networks will be excluded from the Sales Agreement.
The Sales Agreement will have a three-year term, and can be terminated by the Company on 90 days’ notice.
The foregoing description of the Sales Agreement is not complete and is qualified in its entirety by reference to the full text of the Sales Agreement which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
As has been previously reported by the Company, the Company and SFX Entertainment, Inc. (“SFX Entertainment”) are parties
to a shared services agreement (the “Shared Services Agreement”), pursuant to which Viggle provided certain services to SFX Entertainment and was reimbursed for such costs by SFX Entertainment, subject to reimbursement based on salary and benefits for the employees providing the services, plus 20% for miscellaneous overhead, based on a reasonable estimate of time spent. The Company entered into an amendment (the “Amendment”) to the Shared Services Agreement on January 22, 2015, pursuant to which the Company may provide additional services to SFX Entertainment, and SFX Entertainment may provide certain services to the Company. In particular, the Shared Services Agreement provides that, in addition to services already provided, certain employees of the Company may provide human resources, content and programming, and facilities services to SFX Entertainment. Inc., subject to reimbursement based on salary and benefits for the employees providing the services, plus 20% for miscellaneous overhead, based on a reasonable estimate of time spent. In addition, the Amendment provides that SFX Entertainment may provide certain tax, accounting, financial accounting services to the Company, subject to reimbursement based on salary and benefits for the employees providing the services, plus 20% for miscellaneous overhead, based on a reasonable estimate of time spent.
The foregoing description of the amendment to the Shared Services Agreement is not complete and is qualified in its entirety by reference to the full text of the form of amendment to the Shared Services Agreement which is filed herewith as Exhibit 10.2 and incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 22, 2015, Greg Consiglio, the Company’s President and Chief Operating Officer, entered into an agreement with SFX to serve as its President and Chief Operating Officer. Mr. Consiglio will remain President and Chief Operating Officer of the Company. In connection therewith, Mr. Consiglio’s employment agreement with the Company has been amended to provide that he will be able to serve in both such roles. The agreement provides that Mr. Consiglio will devote his full-time best efforts and business time and attention to the Company, subject to his also fulfilling his responsibilities as President and Chief Operating Officer of SFX. The terms of the sharing of Mr. Consiglio's full time will be subject to monitoring by the respective Boards of Directors or a committee of disinterested members of the respective Boards of Directors. Mr. Consiglio also agrees that he will report conflicts of interest and corporate opportunities to the Boards of both the Company and SFX Entertainment.
The amendment to Mr. Consiglio’s employment agreement further provides that, in lieu of payment of a $250,000 guaranteed amount currently contemplated in his employment agreement, Mr. Consiglio will receive a grant of 200,000 restricted shares of Company common stock, half of which shall vest on the date of grant and the other half of which shall vest on May 5, 2015, subject to his still being employed by the Company and providing services to the Company on that date.
The foregoing description of the amendment to Mr. Consiglio’s employment agreement is not complete and is qualified in its entirety by reference to the full text of the form of amendment to employment agreement which is filed herewith as Exhibit 10.3 and incorporated herein by reference.
On January 22, 2015, Kevin Arrix, the Company’s Chief Revenue Officer, entered into an agreement with SFX to serve as its Executive Vice President, Global Brand Partnerships. In connection therewith, his employment agreement with the Company has been amended to provide that he will be able to serve in both such roles. In connection therewith, Mr. Arrix’s employment agreement with the Company has been amended to provide that he will be able to serve in both such roles. The agreement provides that Mr. Arrix will devote his full-time best efforts and business time and attention to the Company, subject to his also fulfilling his responsibilities to SFX Entertainment. The terms of the sharing of Mr. Arrix's full time will be subject to monitoring by the respective Boards of Directors or a committee of disinterested members of the respective Boards of Directors. Mr. Arrix also agrees that he will report conflicts of interest and corporate opportunities to the Boards of both the Company and SFX Entertainment.
Additionally, the amendment to Mr. Arrix’s employment agreement provides that, in lieu of payment of a $250,000 guaranteed amount currently contemplated in his employment agreement, he will receive a grant of 100,000 restricted shares of Company common stock, half of which shall vest immediately and the other half of which shall vest on May 15, 2015.
In connection with these appointments, the Company has implemented an internal re-organization. In recognition of longstanding service to the business, John Small, the Company’s Chief Financial Officer, and Kyle Brink, the Company’s SVP of Product Development, will each have expanded roles in the Company. Mr. Small will now also oversee Business Development, Rewards, Choose Digital and Content Development. In addition to Product Development, Mr. Brink will will also oversee Creative, Design and Customer Experience. Both Mr. Small and Mr. Brink will continue to report to Mr. Consiglio.
The foregoing description of the amendment to Mr. Arrix’s employment agreement is not complete and is qualified in its entirety by reference to the full text of the form of amendment to employment agreement which is filed herewith as Exhibit 10.4 and incorporated herein by reference.
Special Committee Action
Because the transactions described in Section 1.01 and Section 5.02 were between the Company and SFX, a company controlled by Robert F.X. Sillerman, who is the Executive Chairman and Chief Executive Officer of the Company, the Company formed a special committee of independent directors to review the proposed transactions. The special committee reviewed and unanimously approved entering into the Sales Agreement, the amendment to the Shared Services Agreement, the amendments to the employment agreements of Mr. Consiglio and Mr. Arrix, and the actions taken in connection therewith.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Sales Agency Agreement
10.2 Amended and Restated Shared Services Agreement
10.3 Amendment to the Employment Agreement between the Company and Greg Consiglio
10.4 Amendment to the Employment Agreement between the Company and Kevin Arrix
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| VIGGLE INC.
By:/s/ Mitchell J. Nelson | |
| Name:Mitchell J. Nelson Title: Executive Vice President and Secretary | |
DATE: January 23, 2015 | |
INDEX TO EXHIBITS
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Exhibit No. | Description |
10.1 | Sales Agency Agreement |
10.2 | Amended and Restated Shared Services Agreement |
10.3 | Amendment to the Employment Agreement between the Company and Greg Consiglio |
10.4 | Amendment to the Employment Agreement between the Company and Kevin Arrix |
Execution Copy
SALES AGENCY AGREEMENT
This Sales Agency Agreement (this “Agreement”) is made and entered into by and between SFX-94 LLC, a Delaware limited liability company (“Agent”), and Viggle Inc., a Delaware corporation (“Viggle”), as of this 22nd day of January, 2015 (“Commencement Date”).
WITNESSETH
WHEREAS, Viggle is in the business of, among other things, operating a digital (on-line) store which sells certain goods and services to the public, and
WHEREAS, Viggle is also in the business of generating revenues by means of direct sales of advertising and sponsorships and requested barter of advertising and sponsorships (the “Services”); and
WHEREAS, Viggle wishes to appoint Agent as its exclusive agent for the sale of the Viggle’s Services worldwide (the “Territory”); and
WHEREAS, Agent wishes to accept the foregoing appointment as Viggle’s exclusive sales agent; and
WHEREAS, in connection with becoming Viggle’s exclusive sales agent, Agent desires to offer employment to certain current Viggle employees, including but not limited to those employees identified in Exhibit A (the “Employees”), to facilitate the sale of Viggle’s Services in the Territory; and
WHEREAS, the parties are contemporaneously entering into an Amended and Restated Shared Services Agreement (the “Shared Services Agreement”) pursuant to which the parties may provide services to one another and employees of each party may serve as officers of and provide services to the other party.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the adequacy and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
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1. | EXCLUSIVE SALES AND MARKETING REPRESENTATIVE |
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a. | Appointment: Viggle hereby appoints Agent as its exclusive sales agent to sell the Services in the Territory. |
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b. | Exclusivity: Viggle shall not, during the duration of this Agreement, appoint any other person, firm or company as its agent, distributor or franchisee for the sale of the Services in the Territory, or otherwise permit any person or entity other than Agent to sell the Services. Viggle shall not, without Agent’s consent, sell Services, or make offers or quotations to or negotiate with or to any entity in the Territory with respect to the sale of Services. Viggle shall refer all such possible transactions and opportunities to Agent. For the avoidance of doubt, the parties agree that all sales of Services shall be exclusively through Agent (and such sub-agents and distributors as Agent may engage), and Viggle shall not be permitted to sell any Services for its own account or permit any entity other than Agent to sell any Services. Agent will primarily be responsible for direct sales of Viggle Services, and Viggle may continue to participate in third party networks consistent with the practices followed by Viggle immediately prior to the Commencement Date. For the avoidance of doubt, the “Services” contemplated by this Agreement shall not apply to or preclude third-party ad networks. |
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c. | Agent hereby accepts the rights granted to it pursuant to this Agreement and agrees to use commercially reasonable efforts to sell the Services within the Territory by such measures as Agent deems appropriate. |
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d. | Agent, in its discretion, is permitted to produce, sell and market its own services, and to represent or act as agent for the services of other entities. |
(i) In the event Agent “bundles” the Services with Services or services of other entities (including Services or services of Agent’s affiliates), Agent and Viggle shall agree on the proper allocation of the revenues from such bundled sales, and such allocation shall be set forth on the invoice for such bundled services. Any amounts not in dispute shall be promptly paid as required pursuant to this Agreement.
(ii) In the event of a dispute as to the allocation of such revenues, the boards of directors of Agent and Viggle shall each designate a representative who is not an executive officer of both Agent and Viggle at the time of such designation (each, a “Designee”) to confer with each other and seek to agree on the allocation. Each Designee shall have the right to seek advice and counsel from any person or entity they deem appropriate. Following such conference(s), if the Designees are unable to agree, the provisions of paragraph 1(d) (iii) below shall be applied.
(iii) If the Designees are unable to reach agreement on such allocation, then any dispute with respect to allocation of bundled sales will be resolved pursuant to arbitration as provided in Section 22 of this Agreement, except the arbitrator shall require that any amounts determined to be owing by one party to the other party shall be paid together with interest at the rate specified in the New York CPLR, per annum from the date when the underlying sales revenue was first collected.
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e. | Agent is authorized to negotiate, conclude and enter into contracts for the sale of the Services in the name of and on behalf of Viggle provided that such contracts are consistent with the terms of this Agreement. |
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2. | BARTER ARRANGEMENTS In the event Viggle or Agent seeks to enter into barter arrangements with respect to the sale of Services, such barter arrangements shall be undertaken solely as and when requested and approved by Viggle; provided, however, that Agent shall not be required to enter into any such barter arrangements that would not be at least cost neutral to Agent, and Viggle shall be responsible for the payment of all out of pocket and direct costs relating to such barter arrangements, including the reimbursement of Agent for any actual costs and expenses incurred by Agent in connection therewith. |
Agent undertakes and agrees at all times during the term of this Agreement:
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a. | To act conscientiously and in good faith in discharging its duties hereunder. |
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b. | To carry out its agency in such manner as Agent, in consultation with Viggle, reasonably determines is in the best interests of promoting and increasing the sale of Services. |
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c. | To use commercially reasonable efforts to sell the Services in the Territory with reasonable care and diligence. |
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d. | To employ or otherwise engage sufficient personnel to ensure the proper fulfillment of Agent’s obligations under this Agreement. If Agent maintains a sales force or sales capabilities substantially equivalent to the sales force Viggle maintained prior to the Commencement Date, Agent shall be deemed to be in full compliance with this Section 3d. For the avoidance of doubt, the parties agree that so long as Agent maintains a sales force of not less than ten (10) full-time equivalent sales people (or such other number of sales people as the parties shall mutually agree in writing), Agent will be deemed to have a substantially equivalent sales force, provided that Agent shall be allowed a reasonable time to recruit new sales people to replace any members of the sales force that resign or whose employment is terminated. |
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e. | To attend (on reasonable notice) meetings with Viggle to discuss the marketing and selling of the Services in the Territory. |
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f. | To keep Viggle informed of its activities concerning the sale of the Services and to provide Viggle with periodic reports with respect thereto, and provide Viggle with reasonable and regular access to Agent’s employees who are engaged in the sale of Viggle Services in accordance with past practices. |
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g. | To inform Viggle of any innovations or enhancements to the Services which Agent becomes aware of and determines would add value to the Services. |
All sales of the Services by Agent on behalf of Viggle shall be on Viggle’s standard terms and conditions for the sale of the Services in the Territory as varied from time to time (a copy of the current version of which is attached as Exhibit B) (the “Terms and Conditions”) or on such other terms and conditions as Viggle may at any time specify in writing to Agent. Viggle shall give Agent advance notice of any proposed changes in the Terms and Conditions. Any such proposed changes are subject to Agent’s consent, not to be unreasonably withheld. All orders or other contracts for the sale of Services will be subject to prior approval by Viggle’s Chief Financial Officer, which approval or rejection shall be provided within three (3) business days after the order is submitted to Viggle.
Viggle undertakes and agrees with Agent during the term of this Agreement:
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a. | To act conscientiously and in good faith in discharging its duties hereunder, including the timely payment of all Commissions (as defined below). |
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b. | Promptly and efficiently to deal with any complaint, warranty claim, dispute, investigation or after-sales enquiry or investigation relating to the Services. |
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c. | Where appropriate, to inform Agent within a reasonable time if any contract concluded on its behalf by Agent will not be performed by it, and of the reason for such non-performance. |
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d. | To obtain all rights, licenses, permits, and clearances required under federal, state and local laws, or required from any holder of intellectual property rights, for the sale of the Services, and be responsible for all of the associated costs thereof. |
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e. | To give Agent as much advance notice as is reasonably practicable with respect to all changes, extensions or reductions of the range of Services. |
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f. | To use commercially reasonable efforts to continually improve its Services and develop new Services so as to remain commercially competitive. |
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a. | Viggle consents to Agent offering employment or other services arrangements to, and hiring or otherwise engaging, any or all of the Employees, and Viggle agrees not to assert any claims against any Employee arising from such Employee accepting employment with Agent. |
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b. | Agent is under no obligation to hire or engage any specific Employee or retain such Employee for any term or duration, except as Agent may agree with any such Employee. Agent shall have the sole right to manage, hire and fire its employees and sales force, including any Employee. Agent shall comply with the provisions of Section 3 d in connection with its decisions regarding its employees and consultants. |
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c. | Subject to applicable employment, privacy and other laws and regulations, Viggle shall provide Agent with employment files for all former Employees hired or otherwise engaged by Agent. |
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d. | Agent shall not be responsible for any severance or termination obligations and claims with respect to any Employee’s separation from employment with Viggle. |
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e. | Agent shall maintain adequate staffing levels, generally consistent with the staffing levels maintained by Viggle before the Commencement Date for Viggle’s sale of Services, in order to discharge its obligations arising under this Agreement. |
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f. | Agent shall consult with Viggle prior to implementing any material adverse changes in the compensation arrangements for the sales force with respect to the sales of Viggle’s Services. |
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g. | The parties consent to Greg Consiglio and Kevin Arrix becoming employees, officers or directors of both Viggle and Agent (including Agent’s affiliates) on substantially the terms set forth in the employment agreements and amendments thereto attached hereto as Exhibits C, D, E, and F. |
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a. | All advertising, marketing and promotions concerning the Services by Viggle shall be at the expense of Viggle, shall be managed by Viggle and shall be undertaken by Agent only as and when approved by Viggle. Viggle agrees to notify Agent in advance of any Viggle advertisement campaigns or new messaging in advertising campaigns in order to avoid conflicting communications, marketing, branding and advertising strategies. |
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b. | Intellectual Property: Viggle hereby grants Agent a royalty-free license to use the Services and any copyrights, trade names, or trademarks pertaining to the Services (including but not limited to Viggle’s trademark and logo) in any advertising, marketing and promotion and in connection with, as required for or incidental to the marketing, sales and other activities of Agent contemplated by or provided for under this Agreement. Any such advertising shall be subject to Viggle’s approval, not to be unreasonably withheld, delayed or conditioned. |
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c. | Viggle shall maintain at its own cost and expense its website and Internet services. Agent shall maintain at its own cost and expense its website and Internet services. Viggle will be solely responsible for all hosting and download fees, costs or expenses for Viggle’s website and Internet Services. Agent shall be solely responsible for the costs of the sales force it hires, including appropriate office space. |
d. Agent’s employees or consultants shall provide sales support and services and consistent with the sales support and services that the Employees provided to Viggle prior to the Commencement Date.
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8. | [Intentionally Omitted.] |
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9. | ADDITIONAL REPRESENTATIONS AND WARRANTIES |
a. Viggle represents and warrants as of the Commencement Date as follows:
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1. | Viggle currently holds, and it agrees to maintain for the duration of this Agreement, at its sole expense, all necessary federal, state, and local permits and licenses as necessary to perform its obligations hereunder. Viggle possesses all licenses, consents, and other rights (including but not limited to intellectual property rights) with respect to the Services necessary to enable the parties to perform this Agreement. |
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2. | Viggle’s execution and delivery of, and performance under, this Agreement have been duly authorized by Viggle and do not, and will not, violate or conflict with any articles of incorporation, bylaw, contract, permit or obligation applying to Viggle other than such violations or conflicts that |
would not reasonably be expected to impair Viggle’s ability to perform in all material respects its obligations under this Agreement.
b. Agent represents and warrants as of the Commencement Date as follows:
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1. | Agent currently holds, and it agrees to maintain for the duration of this Agreement, at its sole expense, all necessary federal, state, and local permits and licenses as necessary to perform its obligations hereunder. |
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2. | Agent’s execution and delivery of, and performance under, this Agreement have been duly authorized by Agent and do not, and will not, violate or conflict with any articles of incorporation, bylaw, contract, permit or obligation applying to Agent other than such violations or conflicts that would not reasonably be expected to impair Agent’s ability to perform in all material respects its obligations under this Agreement. |
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a. | Agent shall solicit and confirm all orders, contracts and agreements for the Services and forward such orders, contracts and agreements to Viggle. All orders, contracts and agreements and inquiries relative to the Services received by Viggle from potential or actual customers shall be forwarded to Agent for its attention and handling, and Viggle shall make available to Agent such information as may be requested by or reasonably necessary for Agent to process the inquiry or order. |
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b. | Orders for the Services may be solicited, accepted or rejected by Agent, on behalf of Viggle. In the event Viggle effects any sales of Services, information on each such sale including all invoices and agreements will be promptly provided to Agent. |
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c. | Viggle shall perform the Services in a diligent and timely manner and shall promptly invoice and collect the revenues for the Services. Viggle shall pay all applicable federal and state taxes, excise taxes and other taxes arising from sales of Services and file all reports with respect thereto. |
Each party agrees that during the term of this Agreement and for a period of one hundred and eighty (180) days thereafter, it shall not (i) solicit, induce, or encourage the resignation of any person who is a director, officer, employee, representative, or agent of the other party or any of its affiliates, or (ii) hire any person who serves as a director, officer, employee, representative, or agent of the other party or any of its affiliates, provided, however, that the restrictions set forth in this Section 11 shall not apply to either party hiring any person who previously served as a director, officer, employee, representative, or agent of the other party or its affiliates from and after three (3) months since the date such person has ceased to be a director, officer, employee, representative, or agent of such other party or its affiliates of the Company, so long as such cessation did not result from a violation of this Section 11. The parties acknowledge and agree that the hiring of the Employees by Agent as contemplated by this Agreement does not constitute a breach of this Section 11.
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a. | Commission: As compensation for the services rendered pursuant to this Agreement, Agent shall receive a sales commission (the “Commissions”) equal to 25% of the net revenues arising from sales of Viggle’s Services where such Services were sold or otherwise generated during the Initial Term and any Renewal Term. Agent shall have no rights or obligations with respect to sales of Services where the order or contract for such sales occurred prior to the Commencement Date or occurred after the due expiration or termination of this Agreement; provided, however, that Viggle shall pay Agent a Commission equal to 15% of the net revenues arising from sales of Viggle’s Services made prior to the |
Commencement Date for which the orders have been written but that must be fulfilled and invoiced after the Commencement Date. Agent shall have no liability for Commissions to the sales force relating to sales of Services occurring prior to the Commencement Date for which invoices have been issued. Net revenues shall be comprised of gross revenues, less any commissions payable to third parties. Commissions on barter arrangements shall be the amount that is necessary to reimburse Agent for any out of pocket and direct costs incurred by Agent with respect to such barter sales as described in Section 2 above, and shall be payable by Viggle in cash.
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b. | Viggle will pay Agent its Commissions in the following manner: Commissions shall be deemed earned upon execution of any Agreement or the placement of the underlying purchase order, subject to collection of the sale revenues arising from such sales. Commissions will be immediately payable to Agent as and when the underlying revenues are received by Viggle but in any event no later than 30 days after such receipt. Any Commissions not paid within 30 days shall accrue interest at the rate of 1% per month until such Commissions are paid. In the event that Commissions payable to Agent become 60 days in arrears the parties agree to immediately set up a lockbox account jointly owned by the parties into which all subsequent revenues from sales by Agent of the Services (including sales of bundled services that include Services) will be automatically deposited. Any distributions from the lockbox account shall be made (i) first, on a 50/50 basis until Agent shall have been made whole for any unpaid Commissions that are in arrears as set forth in the preceding sentence and thereafter on a 75-25 basis for revenues resulting from sales of Services and (ii) according to the allocations set forth in the invoices for sales of bundled services that include Services. Agent shall have the right to receive its Commissions on all revenues arising from the sales of Services (including revenues received by or on behalf of Viggle subsequent to the expiration or termination of this Agreement) where the agreements or orders for such sales were entered into during the Initial Term or any Renewal Term. |
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c. | In the event of termination or non-renewal of this Agreement, whether for cause or without cause, Agent’s rights to the receipt of payments and order status documentation and all audit rights of Agent shall survive the termination of this Agreement until all Commissions have been fully paid. |
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d. | Agent is not responsible for pursuing unpaid accounts receivable arising from the sales of Services. |
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13. | TERM: This Agreement shall be effective as of the Commencement Date and continue in force until 11:59 pm Eastern Standard Time on the third anniversary of the Commencement Date (the “Initial Term”), unless terminated earlier in accordance with this Agreement. This Agreement shall automatically renew and continue for multiple and successive three year terms (the “Renewal Term”), unless either party gives notice in writing to the other party of intention not to renew at least 180 days prior to the expiration of the then current Initial Term or Renewal Term, as the case may be. |
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14. | TERMINATION; AND EXPIRATION |
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a. | Viggle may terminate this Agreement on 90 days prior written notice without cause. In the event of such termination without cause, during the 90 day notice period, and for up to 30 days thereafter, (i) Agent shall provide reasonable cooperation to Viggle with respect to Viggle’s plans to transition to other sales arrangements, Viggle shall reimburse Agent for out-of-pocket expenses arising from such cooperation, (ii) the provisions of Section 3(d) shall cease to apply effective upon such termination and (ii) the provisions of Section 1(b) shall not apply during such period. |
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b. | In the event that Agent breaches the provisions of Section 3 d of this Agreement, and Agent fails to cure such breach within 30 days following receipt by Agent of written notice from Viggle of a breach by Agent of Section 3 d, then Agent shall be deemed to have wrongfully terminated this Agreement without good cause, and Viggle shall be entitled to recover from Agent damages equal to the following: (i) for so long as Robert Sillerman is the CEO of both Agent and Viggle, the net revenues to Viggle from the sales of Services for the 12 months preceding the effective date of such termination, but not less than ten million dollars ($10,000,000) or (ii) if Robert Sillerman is not the CEO of both Agent and |
Viggle, the actual damages suffered by Viggle as a result of such termination. Any notice from Viggle of an alleged breach of Section 3 d shall specify in detail the facts which Viggle asserts give rise to the breach. Any claim by Viggle arising from an alleged breach of Section 3 d shall be asserted within 15 days of the occurrence of the alleged breach or will be deemed waived. In the event that Viggle claims that Agent has terminated this Agreement without good cause and Agent disputes such claim, the dispute shall be resolved pursuant to arbitration as provided in Section 22.
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c. | Agent may terminate this Agreement if Viggle is in material breach of its obligations hereunder and fails to cure such breach within 30 days following receipt by Viggle of written notice of such breach from Agent. For purposes of this Agreement, a “material breach” by Viggle shall be deemed to have occurred if either (i) Viggle is 60 days or more in arrears with respect to the payment of Commissions to Agent or (ii) the lockbox required pursuant to Section 12(b) above is not set up in a timely manner because of any action or inaction on the part of Viggle. |
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15. | APPLICABILITY OF TERMS AFTER TERMINATION |
In the event of termination or expiration, this Agreement shall remain applicable to any orders for the Services arising prior to the termination or expiration. In addition, the terms and conditions of Sections 6, 10c,11, 12, 15,16, 18, 19, 21 and 22 of this Agreement will survive any expiration or termination of this Agreement.
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a. | Viggle will indemnify, defend and hold harmless Agent and each of its officers, directors, employees, owners, affiliates, customers and each of its and their respective agents, representatives, successors and assigns (“Agent Indemnified Parties”) from and against any loss, cost, claim, liability or expense, including, but not limited to the imposition of any fines or penalties by any governmental agency and claims for personal injury, death, property damage and economic loss (“Claim”), arising from or related in any manner to (i) the operation of Viggle’s business; (ii) any contested or imperfect title or right to sell or market any Viggle Services, including but not limited to any claims of infringement of intellectual property rights associated with any Viggle Services; (iii) any act or omission of an Agent Indemnified Party in reliance upon any written decision, approval, statement or communication of Viggle or any of its authorized representatives or agents; (iv) violation by Viggle of any applicable law or regulation or any term or condition of this Agreement, or the material breach of this Agreement by Viggle; and (v) any claims against Agent arising from alleged deficiencies in the rights clearances required under federal, state and local laws with respect to the property or Services of Viggle. |
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b. | Agent will indemnify, defend and hold harmless Viggle and each of its officers, directors, employees, owners, affiliates, customers and each of its and their respective agents, representatives, successors and assigns (“Viggle Indemnified Parties”) from and against any loss, cost, claim, liability or expense, including, but not limited to the imposition of any fines or penalties by any governmental agency and claims for personal injury, death, property damage and economic loss (“Claim”), arising from or related in any manner to (i) the operation of Agent’s business; (ii) any contested or imperfect title or right to sell or market any of Agent’s services, including but not limited to any claims of infringement of intellectual property rights associated with any of Agent’s services; (iii) any act or omission of a Viggle Indemnified Party in reliance upon any written decision, approval, statement or communication of Agent or any of its authorized representatives or agents; (iv) violation by Agent of any applicable law or regulation or any term or condition of this Agreement, or the material breach of this Agreement by Agent; and (v) any claims against Viggle arising from alleged deficiencies in the rights clearances required under federal, state and local laws with respect to the property or services of Agent. |
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c. | The party seeking to be indemnified, defended or held harmless under this Section 16 (“Indemnified Party”) shall promptly notify the party obligated to indemnify, defend or hold harmless the Indemnified Party (“Indemnifying Party”) of the existence of any Claim to which Indemnifying Party’s obligations |
under this Section 16 would apply, and shall give Indemnifying Party a reasonable opportunity to defend the same at its own expense and with counsel of its own selection; provided that Indemnified Party shall at all times also have the right to fully participate in the defense at its own expense. If Indemnifying Party shall, within a reasonable time after this notice, fail to defend, Indemnified Party shall have the right, but not the obligation, to undertake the defense of, and to compromise or settle (exercising reasonable business judgment), the claim or other matter on behalf, for the account, and at the risk, of Indemnifying Party. If the claim is one that cannot by its nature be defended solely by Indemnifying Party (including, without limitation, one brought by any federal or state alcoholic beverage regulating authority), then Indemnified Party shall make available all information and assistance that Indemnifying Party may reasonably request.
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d. | Insurance Recovery. Any party seeking indemnification hereunder shall use reasonable and diligent efforts to pursue and collect any insurance proceeds available with respect to the indemnified matter. The amount of any recovery which a party seeking indemnification hereunder shall be entitled to receive shall be offset by the amount of insurance or other third party proceeds, if any, actually received by such party in respect of such liability. |
Viggle shall provide a commercially reasonable level of Services liability insurance and intellectual property infringement insurance with (i) Agent included as an additional insured and (ii) an agreement that Viggle’s insurance is primary to that of Agent and that said insurance will not be terminated except upon 20 days advance written notice to Agent. Proof of such insurance shall be provided to Agent upon execution of this Agreement, upon each renewal, and at such other times as may be reasonably requested by Agent.
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18. | EXPENSES AND DISBURSEMENTS |
Except as otherwise provided herein or otherwise agreed to by the parties hereto, each party agrees to pay and be solely responsible for all expenses incurred and all disbursements made by it in connection with this Agreement.
To be valid for purposes hereof, any notice, request, demand, waiver, consent, approval, or other communication (any of the foregoing, a “Notice”) that is given pursuant hereto:
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a. | must be in writing and will be deemed given only as follows: (1) on the date established by the sender as having been delivered personally; (2) on the date delivered to the recipient party by a private overnight courier as established by the sender by evidence obtained from the courier; (3) if sent by facsimile to the recipient party, then upon confirmation of transmission thereof and (A) if such transmission is received during normal business hours of the recipient, then on the date of such transmission as indicated in such confirmation, and (B) if such transmission is not received during normal business hours of the recipient, then on the next business day after the date of such transmission as indicated in such confirmation; (4) on the third business day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid; or (5) if delivered by email of a Notice in portable document format (.pdf), or other email attachment format, as an attachment to an email addressed to a recipient party, then at the time at which the confirmation of receipt is generated by the recipient party opening the email message (and creating a record of receipt of the transmission) or receipt of such email message is otherwise acknowledged by the recipient party; and |
b. if sent to Agent, then to the following address, facsimile, or email, as applicable:
SFX Entertainment, Inc.
430 Park Avenue
New York, NY 10022
Attn: Howard Tytel, Esq.
Facsimile: (646) 561-6700
Email: howard@sfxii.com
with a required copy (the delivery of which will not constitute notice to Agent) to:
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022
Attn: Herbert F. Kozlov, Esq.
Facsimile: (212) 521-5450
Email: hkozlov@reedsmith.com
If to Viggle, then to the following address, facsimile, or email as applicable:
Viggle Inc.
902 Broadway, 11th Floor
New York, NY 10010
Attention: John Small, CFO
Facsimile: 646 349-5988
Email: John@viggle.com
with a required copy (the delivery of which will not constitute notice to Viggle) to:
Viggle Inc.
902 Broadway, 11th Floor
New York, NY 10010
Attention: Tom McLean, General Counsel
Facsimile: 646 349-5988
Email: Tom@viggle.com
The failure of a party at any time to require performance by the other party of any provision hereof shall not affect in any way the full right to require such performance at any time thereafter, nor shall the waiver by a party of a breach of any provisions hereof be taken or held to be a waiver of the provision itself.
Agent is not an employee, partner, or joint venturer of Viggle for any purpose whatsoever, but is an independent contractor, which shall at all times maintain its own organization as a distinct and separate legal entity from Viggle. Performance by Agent hereunder shall be subject entirely to the internal direction and control of Agent.
22. GENERAL
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a. | This Agreement shall be governed by the laws of the State of New York and constitutes the entire agreement and understanding between the parties related to the subject matter contained herein. This Agreement constitutes the full, complete and final expression of the parties understanding with respect to the subject matter hereof. In entering into this Agreement, no party has relied on any statements, promises or representations except as expressly set forth herein. No other agreement, oral or written, |
express or implied, has been made between the parties (except as may be expressly referred to herein). If any provision of this Agreement or the application thereof to any party or circumstances is held invalid or unenforceable, the remainder of this Agreement and the applicability of such provision to other parties or circumstances shall not be affected thereby, and to this end the provisions of this Agreement are declared severable. Nothing in this Agreement shall confer on any person other than the parties, or their respective permitted successors or assigns, any rights remedies, obligations or liabilities under or by reason of this Agreement or the transactions contemplated hereby. Only Agent and Viggle shall be entitled to rely on any provision of this Agreement. This Agreement may be executed in two or more counterparts which taken together shall constitute one and the same instrument. This Agreement may only be modified or amended by a writing manually signed in pen and ink by both parties. An exchange of emails shall not be sufficient to satisfy the requirement of a manually signed writing. This Agreement is the product of mutual negotiation and drafting, and neither party shall be deemed to be the draftsman of this Agreement.
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b. | Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by binding arbitration to be held at the offices of JAMS in New York, NY, before a single arbitrator under the JAMS rules for arbitration of commercial disputes. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. In any such arbitration proceeding, the arbitrator shall award reasonable attorney’s fees and the costs of such arbitration to the party the arbitrator determines is the prevailing party. |
[signature page follows]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
SFX-94, llc
By:
Name:
Title:
Viggle Inc.
By:
Name:
Title:
Exhibit A
Revenue Team
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Victoria | Dekhtyar | Senior Account Services Manager | Account Services |
Courtney | DelTurco | Sales Associate | Account Services |
Katherine | Greichen | Sales Associate | Account Services |
Catherine | Pugliese | Sales Associate | Account Services |
Kathryn | Ruczynski | Sales Associate | Account Services |
Meghan | Weber | Director, Account Services | Account Services |
Lauren | Zaremba | Account Manager | Account Services |
Stephen | Arndt | Account Executive - Midwest | Direct Sales |
Anne | Cleary | Executive Assistant, CRO | Direct Sales |
Carolyn | Hodukavich | Account Executive - East | Direct Sales |
Alexandra | Kiernan | Account Director - East | Direct Sales |
Jonathan | Kirkland | Account Executive - West | Direct Sales |
Todd | Leslie | VP, Sales - Midwest | Direct Sales |
Shaila | Mathias | Account Director - East | Direct Sales |
Mark | Morris | VP, Sales - West | Direct Sales |
Ariel | Martinez | VP, Integrated Marketing | Integrated Marketing |
Michael | Levin | VP, Sales -East&TV Partnership | Networks/ BusDev |
Tiffany | Morales | Pricing&Planning Analyst | Pricing & Inventory |
Sofia | Santiago | Sales Pricing/Planning Mgr | Pricing & Inventory |
Megan | Dorros | Campaign Manager, Ad Ops | Revenue Ops |
Rahkiah | Frias | Director,Advertising Operations | Revenue Ops |
Anna | Hougart | VP, Revenue Operations | Revenue Ops |
Ashley | Jeter | Traffic Coordinator, Ad Ops | Revenue Ops |
Gabe | Marra | Reporting Analyst, Rev Ops | Revenue Ops |
Alexa | Tafuri | Rev Ops Intern | Revenue Ops |
Exhibit B
Terms and Conditions and Approval Process
The sales team sells the particular ad units at the rates set forth in Viggle’s then current rate card. Viggle’s current rate card is attached to this Exhibit B.
Once a client decides to make a purchase of advertising from Viggle, the client’s digital advertising agency prepares an insertion order with the particular ad units the client wishes to buy and the agreed-upon rates for those ad units, which are based on the rate card. Typically, insertion orders are based on the Interactive Advertising Bureau Standard Terms and Conditions for Internet Advertising for Media Buys of One Year or Less, Version 3. Other terms and conditions may be used if approved by Viggle.
The Account Services team processes the incoming insertion order. The Account Services team enters the insertion order into Viggle’s internal electronic order system. Viggle currently uses software called Operative for this purpose. Once entered into Operative, the terms are delivered to Viggle’s chief financial officer and legal department for approval. Once approved, the IO is delivered to the Revenue Operations team, which then loads the advertising units into Viggle’s system to run in accordance with the terms of the insertion order.
AMENDED AND RESTATED SHARED SERVICES AGREEMENT
THIS AMENDED AND RESTATED SHARED SERVICES AGREEMENT (this “Agreement”) is entered into as of January 22, 2015 by and between Viggle Inc., a Delaware corporation (“Viggle”), and SFX Entertainment, Inc., a Delaware corporation (“SFX”) and hereby supersedes the Shared Services Agreement, dated January 4, 2013 between the Parties. Viggle and SFX each are sometimes referred to hereinafter as a “Party” and, collectively, as the “Parties.”
RECITALS
Each Party wishes to engage the other Party to perform certain services and is willing to accept the engagement to perform such services, all subject to and in accordance with the terms and conditions hereof.
AGREEMENT
ARTICLE I. ENGAGEMENT OF VIGGLE
1.Engagement. Each Party hereby retains the other Party, and each such Party accepts such retention, and in consideration of the payments provided in Section 3.1 below, agrees to perform and/or to cause certain of its designated employees to perform the applicable Services (as defined in Section 2.1) in accordance with the terms and conditions set forth herein.
2.Relationship. Nothing contained in this Agreement shall be deemed or construed to create any partnership, joint venture or employment relationship, or any relationship of principal and agent, between Viggle (or any employee of Viggle) and SFX (or any employee of SFX). Neither Party shall have the right or authority by reason of this Agreement to assume or create any obligations on behalf of the other Party or to bind or make any representations on behalf of the other Party, except with its written consent. The employees of one Party shall not be deemed to be the employees of the other Party, although an employee of one Party providing services to the other Party shall be permitted to hold a title at such non-employing Party, subject to the consent of the employing Party, such consent not to be unreasonably withheld.
ARTICLE II. DUTIES
1.Duties. During the term of this Agreement, each Party agrees to provide such services and/or to cause certain of its designated employees to perform the services as are requested from time to time by the other Party as set forth on Schedule 2.1 (the “Services”) (such schedule may be amended from time to time by the written agreement of the Parties).
2.Procedure for Requesting Services. Each Party may request the other Party to perform any or all of the Services by written or oral notice. The Parties acknowledge that most requests will be oral. Such requests shall include a description of the scope of the Services requested and any limitations on Viggle’s ability to act on behalf of SFX and SFX’s ability to act on behalf of Viggle.
3.Timely and Professional Service. Each Party agrees to make available the personnel and other resources necessary to perform the Services in a timely and efficient manner when requested by the other Party and to perform the Services with due diligence and in a professional and workmanlike manner in accordance with common industry practices. SFX shall specify from to time the Viggle employees who
shall provide the Services. Viggle shall specify from to time the SFX employees who shall provide the Services.
4.Information and Cooperation. Each Party shall provide such information and access to personnel and premises as is reasonably requested by the other Party for the performance of the Services and shall cooperate with such Party in the performance of the Services. In the event that a Party desires to modify any project or task it has requested, it will promptly notify the other Party.
5.Confidentiality; Exceptions. Each Party may from time to time have access to trade secrets, or other proprietary, confidential information of the other Party. The Party receiving such information shall keep confidential, and shall not disclose or use for any purpose except to effectuate the purposes of this Agreement any trade secret or proprietary, confidential information furnished to it by the other Party, including any such information owned by third parties. Each Party shall inform any employees, contractors, directors, officers and agents to whom the Party discloses such information of the requirements of this Agreement. The requirements of this Section 2.5 shall not apply to the extent that it can be established by the receiving Party, by competent proof, that such information: (i) was already known to the receiving Party at the time of disclosure by the other Party other than under an obligation of confidentiality; (ii) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party; (iii) became generally available to the public or was otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement; or (iv) was disclosed to the receiving Party by a third party who was not under an obligation to the disclosing Party not to disclose such information to others (all such information to which none of the foregoing exceptions applies, “Confidential Information”).
6.Exceptions to Obligation. The restrictions contained in Section 2.5 shall not apply to Confidential Information that is otherwise required to be disclosed in compliance with law or governmental regulations, or order of a court or other regulatory body; provided that if a receiving Party is required to make any such disclosure of the other Party’s Confidential Information, the receiving Party shall give advance written notice, if practicable, to the other Party of such disclosure requirement and will use reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed.
7.Remedies. Each Party shall be entitled, in addition to any other right or remedy it may have, at law or in equity, to seek an injunction, enjoining or restraining the other Party from any violation or threatened violation of Sections 2.5 and 2.6.
ARTICLE III. COMPENSATION OF VIGGLE
1.Compensation for Services. As Viggle’s sole compensation for performing (or causing certain of its designated employees to perform) each Service, SFX shall pay Viggle the compensation set forth on Schedule 2.1. As SFX’s sole compensation for performing (or causing certain of its designated employees to perform) each Service, Viggle shall pay SFX the compensation set forth on Schedule 2.1.
2.Invoices. Each Party shall invoice the other Party monthly in arrears at the address set forth below or at any other address that such Party designates. Payment terms shall be net thirty (30) days upon receipt of the invoice. Each Party shall pay the other Party promptly for services performed up to the time of termination. Any invoice not paid within thirty (30) days of the date of the invoice shall be subject to interest at a rate of 1% per month.
3.No Other Commissions, Fees or Compensation. The compensation with respect to each
Service set forth in Section 3.1 shall be the only compensation to which a Party shall be entitled for the Services, and no other or additional fees, compensation or commissions shall be payable in connection with or on account of such services. Each Party shall be responsible for all compensation, benefits, payroll taxes, withholding obligations, unemployment compensation and workers’ compensation claims in respect of each of its employees.
4.Books, Records and Inspections. Each Party shall keep or cause to be kept books, records and accounts which are complete and which accurately and fairly reflect all dealings and transactions in relation to its activities under this Agreement, and which shall be in sufficient detail to permit such dealings to be audited in accordance with generally accepted accounting principles. Each Party shall cooperate with the other Party’s accountants and auditors in the preparation of its annual audited financial statements, if any, and its federal, state and local income tax returns. Each Party shall permit the other Party or its authorized representative, upon reasonable prior notice and at its sole cost and expense, (a) to inspect the books and records maintained by such Party with respect to the services performed hereunder, and (b) to cause an audit thereof to be conducted, including but not limited to, any reports and returns prepared and filed by such Party with any governmental agencies.
ARTICLE IV.
RESPONSIBILITY; INDEMNIFICATION
1.Responsibility of each Party. At all times each Party shall be responsible for the actions or omissions of its employees, regardless of whether such employees are performing Services for the other Party under this Agreement. In connection with the performance of Services under this Agreement, each Party will comply with all applicable laws, regulations, and orders, including, but not limited to, equal opportunity employment laws and regulations and occupational safety and health legislation.
2.Indemnification by Viggle. Viggle shall indemnify, defend, and hold harmless SFX and its directors, officers, employees, and agents, and against all demands, claims, actions, liabilities, losses, judgments, costs and expenses (including reasonable attorney fees) relating to third party claims (collectively “Damages”) imposed upon or incurred by SFX during the term of this Agreement to the extent arising out of any of the following:
(a)Viggle’s failure to comply with applicable laws, regulations or orders during the term of this Agreement; or
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(b) | breach of any obligation of Viggle contained in this Agreement. |
3.[Intentionally left blank]
4.Indemnification by SFX. SFX shall indemnify, defend, and hold harmless Viggle and its directors, officers, employees and agents from and against all Damages imposed upon or incurred by Viggle, to the extent arising out of any of the following:
(a)SFX’s failure to comply with applicable laws, regulations or orders during the term of this Agreement; or
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(b) | breach of any obligation of SFX contained in this Agreement. |
5.Limitation on Damages. Neither Party shall be liable to the other Party for any special, consequential, incidental, exemplary or punitive damages relating to the performance of this Agreement.
ARTICLE V.
TERM; TERMINATION
The term of this Agreement shall terminate on December 31, 2015, and shall be automatically renewed for additional one-year terms unless terminated for any reason or no reason upon thirty (30) days’ notice by one Party to the other Party. In the event of termination, this Agreement will continue to govern the Parties’ rights and obligations with respect to services performed prior to termination and Sections 2.5, 2.6 and 2.7 shall survive such termination.
ARTICLE VI. MISCELLANEOUS
1.Assignment. This Agreement is personal to both Parties. Neither Party shall assign this Agreement or any of its rights hereunder.
2.Notices. Except as permitted in Section 2.2, all notices required under this Agreement shall be directed in writing, shall be deemed given when received, and shall be hand delivered or sent via first class mail to:
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SFX: | SFX Entertainment, Inc. 430 Park Avenue |
New York, New York 10022 Attention: General Counsel
Viggle: Viggle Inc.
902 Broadway, 11th Floor New York, New York 10010
Attention: General Counsel
3.Severability; Waiver. When possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable laws, but if any provision of this Agreement is held to be prohibited by or invalid under law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. Any delay or waiver by a Party to declare a breach or seek any remedy available to it under this Agreement or by law will not constitute a waiver as to any past or future breaches or remedies.
4.No Third Party Beneficiaries. Nothing in this Agreement shall confer on any person other than the Parties, or their respective permitted successors or assigns, any rights remedies, obligations or liabilities under or by reason of this Agreement or the transactions contemplated hereby. Only Viggle and SFX shall be entitled to rely on any provision of this Agreement.
5.Section Headings. The section headings of this Agreement are for the convenience of the Parties only and in no way alter, modify, amend, limit, or restrict the contractual obligations of the Parties.
6.Amendments. This Agreement may not be amended, altered or modified except by a written instrument signed by both Parties.
7.Governing Law. This Agreement shall be governed by and construed in accordance with laws of New York without reference to choice of laws, rules or principles.
8.Entire Agreement. This Agreement contains the entire agreement between the Parties hereto and supersedes any and all prior agreements, arrangements or understandings between the Parties relating to the subject matter contained herein.
9.Counterparts. This Agreement may be executed in any number of identical counterparts, any one of which need not contain the signature of more than one Party, but all such counterparts taken together shall constitute one and the same agreement. Signatures provided by facsimile or other electronic transmission shall be deemed to be original signatures.
10.Independent Contractor. It is expressly acknowledged by the Parties that each Party (and its employees) is performing all Services hereunder as an independent contractor.
11.Force Majeure. Neither Party shall be held liable or responsible to the other Party nor be deemed to be in default under, or in breach of any provision of, this Agreement for failure or delay in fulfilling or performing any obligation of this Agreement when such failure or delay is due to Force Majeure. For purposes of this Agreement, Force Majeure is defined as causes beyond the control of the Party, including, without limitation, acts of God; acts, regulations, or laws of any government adopted after the date of this Agreement or subject to an interpretation after the date of this Agreement that render impossible or illegal performance by a Party of its obligations under this Agreement; war; civil commotion; destruction of production facilities or materials by fire, flood, earthquake, explosion or storm; acts of terrorism; epidemic; and failure of public utilities or common carriers. In such event, the disabled Party shall promptly notify the other Party, with written notice to follow, of such inability and of such Party’s estimate of the duration of the period for which such inability is expected to continue. The Party giving such notice shall thereupon be excused from such of its obligations under this Agreement as it is thereby disabled from performing for so long as it is so disabled. Upon termination of a Force Majeure event, the performance of any suspended obligation or duty shall promptly recommence. To the extent possible, each Party shall use commercially reasonable efforts to minimize the duration of any Force Majeure.
IN WITNESS WHEREOF, SFX and Viggle have executed this Agreement as of the date first above written.
SFX ENTERTAINMENT, INC.
By:
Name:
Title:
VIGGLE INC.
By:
Name:
Title:
Schedule 2.1
List of Services and Compensation
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List of Services to be provided to SFX by Viggle | Compensation |
Human Resources services | (1) |
Information technology services | (1) |
Legal services | (1) |
Administrative and facilities services | (1) |
Content and programming services | (1) |
(1) Reimbursement to be based on salary and benefits for the employees providing the services, plus 20% for miscellaneous overhead, based on a reasonable estimate of time spent. |
|
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List of Services to be provided to Viggle by SFX | Compensation |
Tax, accounting, and financial processing services | (1) |
Administrative services | (1) |
(1) Reimbursement to be based on salary and benefits for the employees providing the services, plus 20% for miscellaneous overhead, based on a reasonable estimate of time spent. |
January 22, 2015
Mr. Gregory Consiglio
200 North End Avenue
Apt. 28C
New York, NY 10282
Dear Mr. Consiglio,
Reference is made to that certain Amended and Restated Employment Agreement dated as of May 1, 2014 (the “Employment Agreement”) by and between you and Viggle Inc. (the “Employer”), pursuant to which you are employed as President and Chief Operating Officer of the Company. Defined terms used in this Letter Agreement and not defined herein shall have the meanings ascribed to them in the Employment Agreement.
The purpose of this letter agreement (the “Letter Agreement”) is to amend the Employment Agreement effective immediately and redefine some of the terms and conditions of your continued employment with the Company. Accordingly, in consideration of the terms and provisions hereof, the Employment Agreement is hereby amended, effective immediately, as follows:
1. Section 2(a) of the Employment Agreement shall be deleted and replaced with the following:
“2(a) During Your employment with the Company, You will devote Your full-time best efforts and business time and attention to the business of this Company, provided, however that we recognize the foregoing will be subject to You also fulfilling Your responsibilities as President and Chief Operating Officer of SFX Entertainment, Inc. The terms of this sharing of Your full time and best efforts shall be subject to monitoring by the respective Boards of Directors or a committee constituted of disinterested members of each Board of Directors. Notwithstanding the foregoing, if in Your discretion, You determine that an event or action has arisen in which an actual or apparent conflict of interest exists between Your obligations to SFX Entertainment, Inc. as President and Chief Operating Officer of SFX Entertainment, Inc. and Your obligations to the Company as President and Chief Operating Officer of the Company, including without limitation, a corporate opportunity available to either company or a commercial transaction between the companies, You shall disclose the conflict to, and shall refer such event or action for review and decision by, the Board of Directors of both SFX Entertainment, Inc. and the Company. You shall further recuse Yourself from participating in any review or decision as both an officer of SFX Entertainment, Inc. and as an officer of the Company. Your disclosure and recusal from a review or decision in accordance with the foregoing sentence shall not be a basis on which the Company may terminate Your employment for Cause pursuant to Sections 5(b) and (e) of this Agreement.”
2. Section 3 of the Employment Agreement shall be amended to delete Subsection (b), the Guaranteed Amount, and insert the following new subsection (b):
Subject to the approval of the Company’s Compensation Committee and the terms of the Company’s standard form of grant agreement, as of February 15, 2015, you shall receive a grant of restricted shares (“RSU’s”) for Two Hundred Thousand (200,000) shares of Employer common stock (such minimum amount being subject to adjustment for stock dividends, subdivisions, reclassifications, recapitalizations and other similar events affecting all of the shares of Employer common stock), one-half (1/2) of which will vest as of the date of grant, and the other one-half (1/2) of which shall fully vest on May 5, 2015, so long as the Executive is still then employed by the Employer, or any of its subsidiaries or by SFX and still providing services to Company pursuant to this Employment Agreement.”
3. A new Section 14 shall be added to the Employment Agreement as follows:
“14. Indemnification
During Your employment with the Company and thereafter, the Company shall indemnify and hold You and Your heirs and representatives harmless, to the maximum extent permitted by law, against any and all damages, costs, liabilities, losses and expenses (including reasonable attorneys’ fees) as a result of any claim or proceeding (whether civil, criminal, administrative or investigative), or any threatened claim or proceeding (whether civil, criminal, administrative or investigative), against You that arises out of or relates to Your service as an officer, director or employee, as the case may be, of the Company, or Your service in any such capacity or similar capacity with any affiliate of the Company or other entity at the Company’s request, (including without limitation, any claim or proceeding any breach of a duty owed to the Company or any affiliate of the Company arising out of or related to Your service as President and Chief Operating Officer of SFX Entertainment, Inc.) and to promptly advance to You or Your heirs or representatives such expenses, including litigation costs and attorneys’ fees, upon written request with appropriate documentation of such expense upon receipt of an undertaking by You or on Your behalf to repay such amount if it shall ultimately be determined that You are not entitled to be indemnified by the Company. During Your employment with the Company and thereafter, the Company also shall provide You with coverage under its current directors’ and officers’ liability policy to the same extent that it provides such coverage to its other executive officers. If You have any knowledge of any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, as to which You may request indemnity under this provision, You will give the Company prompt written notice thereof; provided that the failure to give such notice shall not affect Your right to indemnification. The Company shall be entitled to assume the defense of any such proceeding and You will use reasonable efforts to cooperate with that defense. Notwithstanding the foregoing, to the extent that in good faith, You determine that there is an actual or potential conflict of interest between the Company and You in connection with the defense of a proceeding, You shall so notify the Company and shall be entitled to separate representation at the Company’s expense by counsel selected by You (provided that the Company may reasonably object to the selection of counsel within ten (10) business days after notification of Your selection) which counsel shall cooperate, and coordinate the defense, with the Company’s counsel and minimize the expense of such separate representation to the extent consistent with Your separate defense. This Section 14 shall continue in effect after the termination of Your employment or the termination of this Agreement.”
All other terms and conditions of the Employment Agreement shall remain in full force and effect.
This Letter Agreement shall be governed by and construed under the laws of the State of New York (without regard to conflict of law provisions thereof). No party hereto may assign its rights in whole or in part or delegate its obligations in whole or in part under this Letter Agreement without the written consent of the other party hereto. Except as provided herein, the Employment Agreement shall remain in full force and effect. The Employment Agreement, as amended by this Letter Agreement, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior or contemporaneous oral or written understandings and agreements between the parties hereto with respect to the subject matter hereof. This Letter Agreement shall be binding upon and inure to the benefit of the respective parties hereto, their successors and permitted assigns (as well as their heirs and estates, if applicable).
If the foregoing correctly sets forth our understanding, please execute this Letter Agreement in the space provided below.
Sincerely,
VIGGLE INC.
By:
Name:
Title:
Accepted and agreed to this ____ day of January 2015:
Gregory Consiglio
January 22, 2015
Mr. Kevin Arrix
971 West Road
New Canaan, CT 06840
Dear Mr. Arrix,
Reference is made to that certain Amended and Restated Employment Agreement dated as of May 1, 2014 (the “Employment Agreement”) by and between you and Viggle Inc. (the “Employer”), pursuant to which you are employed as Chief Revenue Officer of the Company. Defined terms used in this Letter Agreement and not defined herein shall have the meanings ascribed to them in the Employment Agreement.
The purpose of this letter agreement (the “Letter Agreement”) is to amend the Employment Agreement effective immediately and redefine some of the terms and conditions of your continued employment with the Company. Accordingly, in consideration of the terms and provisions hereof, the Employment Agreement is hereby amended, effective immediately, as follows:
1. Section 2(a) of the Employment Agreement shall be deleted and replaced with the following:
“2(a) During Your employment with the Company, You will devote Your full-time best efforts and business time and attention to the business of this Company, provided, however that we recognize the foregoing will be subject to You also fulfilling Your responsibilities as Executive Vice President, Global Brand Partnerships of SFX Entertainment, Inc. The terms of this sharing of Your full time and best efforts shall be subject to monitoring by the respective Boards of Directors or a committee constituted of disinterested members of each Board of Directors. Notwithstanding the foregoing, if in Your discretion, You determine that an event or action has arisen in which an actual or apparent conflict of interest exists between Your obligations to SFX Entertainment, Inc. as Chief Revenue Officer of SFX Entertainment, Inc. and Your obligations to the Company as Chief Revenue Officer of the Company, including without limitation, a corporate opportunity available to either company or a commercial transaction between the companies, You shall disclose the conflict to, and shall refer such event or action for review and decision by, the Board of Directors of both SFX Entertainment, Inc. and the Company. You shall further recuse Yourself from participating in any review or decision as both an officer of SFX Entertainment, Inc. and as an officer of the Company. Your disclosure and recusal from a review or decision in accordance with the foregoing sentence shall not be a basis on which the Company may terminate Your employment for Cause pursuant to Sections 5(b) and (e) of this Agreement.”
2. Section 3 of the Employment Agreement shall be amended to delete Subsection (b), the Guaranteed Amount, and insert the following new subsection (b):
“Subject to the approval of the Company’s Compensation Committee and the terms of the Company’s standard form of grant agreement, you shall receive a grant of restricted shares (“RSU’s”) for One Hundred Thousand (100,000) shares of Employer common stock (such minimum amount being subject to adjustment for stock dividends, subdivisions, reclassifications, recapitalizations and other similar events affecting all of the shares of Employer common stock), 50,000 of which will vest on February 15, 2015, and 50,000 of which shall vest on May 15, 2015, so long as the Executive is still then employed by the Employer, or any of its subsidiaries or by SFX and still providing services to Company pursuant to this Employment Agreement.”
3. A new Section 14 shall be added to the Employment Agreement as follows:
“14. Indemnification
During Your employment with the Company and thereafter, the Company shall indemnify and hold You and Your heirs and representatives harmless, to the maximum extent permitted by law, against any and all damages, costs, liabilities, losses and expenses (including reasonable attorneys’ fees) as a result of any claim or proceeding (whether civil, criminal, administrative or investigative), or any threatened claim or proceeding (whether civil, criminal, administrative or investigative), against You that arises out of or relates to Your service as an officer, director or employee, as the case may be, of the Company, or Your service in any such capacity or similar capacity with any affiliate of the Company or other entity at the Company’s request, (including without limitation, any claim or proceeding any breach of a duty owed to the Company or any affiliate of the Company arising out of or related to Your service as Chief Revenue Officer of Viggle, Inc.) and to promptly advance to You or Your heirs or representatives such expenses, including litigation costs and attorneys’ fees, upon written request with appropriate documentation of such expense upon receipt of an undertaking by You or on Your behalf to repay such amount if it shall ultimately be determined that You are not entitled to be indemnified by the Company. During Your employment with the Company and thereafter, the Company also shall provide You with coverage under its current directors’ and officers’ liability policy to the same extent that it provides such coverage to its other executive officers. If You have any knowledge of any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, as to which You may request indemnity under this provision, You will give the Company prompt written notice thereof; provided that the failure to give such notice shall not affect Your right to indemnification. The Company shall be entitled to assume the defense of any such proceeding and You will use reasonable efforts to cooperate with that defense. Notwithstanding the foregoing, to the extent that in good faith, You determine that there is an actual or potential conflict of interest between the Company and You in connection with the defense of a proceeding, You shall so notify the Company and shall be entitled to separate representation at the Company’s expense by counsel selected by You (provided that the Company may reasonably object to the selection of counsel within ten (10) business days after notification of Your selection) which counsel shall cooperate, and coordinate the defense, with the Company’s counsel and minimize the expense of such separate representation to the extent consistent with Your separate defense. This Section 14 shall continue in effect after the termination of Your employment or the termination of this Agreement.”
All other terms and conditions of the Employment Agreement shall remain in full force and effect.
This Letter Agreement shall be governed by and construed under the laws of the State of New York (without regard to conflict of law provisions thereof). No party hereto may assign its rights in whole or in part or delegate its obligations in whole or in part under this Letter Agreement without the written consent of the other party hereto. Except as provided herein, the Employment Agreement shall remain in full force and effect. The Employment Agreement, as amended by this Letter Agreement, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior or contemporaneous oral or written understandings and agreements between the parties hereto with respect to the subject matter hereof. This Letter Agreement shall be binding upon and inure to the benefit of the respective parties hereto, their successors and permitted assigns (as well as their heirs and estates, if applicable).
If the foregoing correctly sets forth our understanding, please execute this Letter Agreement in the space provided below.
Sincerely,
VIGGLE INC.
By:
Name:
Title:
Accepted and agreed to this ____ day of January 2015:
Kevin Arrix