Sony Pictures Home Entertainment Inc.
10202 W. Washington Blvd.
Culver City, CA 90232
Dated as of November 4, 2013
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052
c/o Liquid Thread
35 W. Wacker Dr.
Chicago, IL 60601
Attention: Debbie Kaplan
Development Executive
Re:Promotion Agreement
Ladies & Gentlemen:
This letter shall set forth the agreement (the “Agreement”) between LiquidThread (“Agency”), a division of Starcom MediaVest Group, Inc., acting on behalf of its client Microsoft Corporation(“Microsoft”),via its agent Liquid Thread (“Agency”), and Crackle, Inc. (“Crackle”) with respect to a cross promotion, as described in more detail below, to promote the Crackledigital release (the “Digital Release”) of “Aim High” (the “Series”)in connection withthe Xbox One launch(the “Promotion”).
1.Term: The term of this Agreement commences as of the date of the Agreement first set forth above and remains in force until December 15, 2013 (the “Term”). Notwithstanding the foregoing, the indemnification provisions set forth in paragraph 9 12 below shall continue after termination of this Agreement.
2.Territory: The United States of America and CanadaWorldwide, and their respective territories and possessionsThe United States of America and Canada, and their respective territories and possessions[SPE1](the “Territory”).
3.Crackle’s Obligations: Crackleshall, at its sole cost and expense (except as otherwise specifically indicated below):
(a)Provide Microsoft with one (1)-week (December 2-8, 2013) [LW2]exclusive access for its Xbox users to view a sneak peak of Series Seasons 1 and 2 (“Xbox Sneak Peak”);
(b)Display a custom co-branded (Xbox and Crackle) video promo and banners incorporating the Xbox One logo on Crackle platforms, excluding PlayStation,throughout the Term;
(c)Create a one (1)-day (December 9, 2013) gateway roadblock [LW3]across the Crackle.com and mobile (tablet and mobile splash) homepages, Moviesmovies, and Shows shows landing pages at the launch of the Series on Crackle;
(d)Run a one (1)-week (December 9-15, 2013) “Aim High” Takeover, including Xbox One video ads and banner ads on Series content, excluding PlayStation, in alignment with the Series launch on Crackle;
(e)Create and run a custom sixty-second (:60) promercial video throughout Crackle platforms, excludingPlayStation, that will further engage the Crackle audience with an “Aim High” movie moment brought to you by Xbox One, including an Xbox One video ad;
(f)Run one (1) custom fifteen-second (:15) advancer and three (3) mid-roll video units showing a Series character’s user interface with Xbox One (to be created by Agency, currently titled “Nick’s Dilemma”);
(g)Run a one (1)-week (December 9-15, 2013) homepage slideshow promotion with “Presented by Xbox One” logo attribution across Crackle digital platforms (online, mobile, connected TV), excluding PlayStation;
(h)Distribute one (1) Crackle Newsletter blast currently scheduled for December 9, 2013 (date subject to change by programming);
(i)Distribute one (1) mobile push notification currently scheduled for December 9, 2013 (date subject to change by programming);
(j)(i)Display two (2) branded social media posts on Facebook ( driving to Series sponsored destination;
(k)(j)Display two (2) branded social media posts on Twitter (@Crackle) driving to Series sponsored destination;
(l)Provide the opportunity for Xbox to white list Facebook and Twitter posts, subject to Crackle approval for altered messaging;
(m)(k)Include a run of Crackle pre/mid roll with additional media targeting music, sports, horror, anime and family genres, excluding PlayStation;
(n)(l)Provide artwork and logos (the “Crackle Logos”) for use in connection with the Promotion; and
(o)(m)Provide Licensed Property related to the Seriesfor the Promotion; “Licensed Property” shall mean the title, artworkand Series footage, all of the foregoing subject to the prior written approval of Crackleand any other applicable third parties (including, without limitation, talent) on a case by case basis in accordance with the terms and conditions of this Agreement. The Licensed Property expressly excludes any music from the Series.[LW4]
4.Microsoft’sObligations: Microsoftshall, at its sole cost and expense:
(a)Have the option to Ppromote the Series on Xbox’s homepage, newsletter and social media throughout the Xbox Sneak Peek; and
(b)Provide Cracklewith artwork and logos (the “Microsoft Logos”) for use in connection with the Promotion.
5.License: On the terms and conditions set forth in this Agreement, Cracklehereby grants to Microsoftand Microsofthereby accepts a limited license to use the Licensed Property solely in connection with the Promotion in the Territory during the Term on Microsoft Xbox Live. Notwithstanding the foregoing, Microsoftunderstands and agrees that Cracklehas the right to approve all such uses and may withhold such approval in its reasonable discretion. Cracklewill provide approvals and/or corrections in connection with all usage of elements (e.g., message, title treatment) within three two (32) business dayssof Crackle’s receipt thereof. All designs, materials and artwork provided to Microsoftby Crackle, or on Crackle’s behalf, are and shall remain the property of Crackle. In no event shall images or names of talent or other persons associated with the Series be used without the prior approval of Crackle.
On the terms and conditions set forth in this Agreement, Microsoft hereby grants to Crackleand Cracklehereby accepts a limited license to use Microsoft Logos solely in connection with the Promotion in the Territory during the Term on the Crackle app and on Notwithstanding the foregoing, Crackleunderstands and agrees that Microsoft has the right to approve all such uses and may withhold such approval in its reasonable discretion. Microsoft will provide approvals and/or corrections in connection with all usage of Microsoft Logos within three two (32) business days of Microsoft’s receipt thereof. All Microsoft Logos provided to Crackleby Microsoft, or on Microsoft’s behalf, are and shall remain the property of Microsoft.
6.Approvals: Microsoft shall have prior written approval over any and all elements of the Promotion, including, without limitation, the script, production/delivery schedules and talent, including rough cut, fine cut and final cut. Crackle will supervise the financial and business aspects of production of the Promotion, subject in each case to Microsoft’s final creative control. In furtherance of the foregoing, Crackle will provide one (1) rough cut, fine cut and final cut of each Promotion piece, which includes the pre-roll and mid-rol content, for Microsoft’s comments and notes, which comments and notes shall be provided by Microsoft promptly after receipt of each such cut. Crackle shall be responsible for acquiring any third party clearances, licenses, permissions, and authorizations to use any and all elements necessary to display the Promotion, including, without limitation, music, talent, logos, third party intellectual property, etc.
7.Exclusivity: Crackle acknowledges and agrees that Crackle will not use the Promotion or any materials created or provided by Microsoft or Agency in connection with any third party advertiser.
8.Sweepstakes: Crackle shall administer and be responsible for the entire advertising[SPE5], operation, management, prizing (other than the Microsoft Prize Contribution, as defined below) and fulfillment of all sweepstakes, contests, promotions, games or other giveaways, whether it involves chance and/or skill, where there will be a social call-to-action included in the custom mid-roll section of the Promotion surrounding the Crackle original show "Aim High."a co-branded “Crackle’s Xbox One Giveaway” (the “Sweepstakes”) to be conducted on Facebook at (the “Sweepstakes Site”) in the United States from December 9, 2013 through December 18, 2013 as set forth in the official rules for the Sweepstakes (the “Official Rules”). Microsoft, at its sole expense, shall provide to Crackle the following items to be awarded as prizing in the Sweepstakes:(a) two (2) Xbox One game consoles (Approximate Retail Value or “ARV” $499.99/each) and (b) three (3) Xbox games (Ryse, Forza Motorsport 5 and Dead Rising 3) (ARV: $59.99/each) (collectively, the “Microsoft Prize Contribution”). The mid roll will include a card encouraging people to tweet to Crackle for the chance to win a Microsoft Xbox console (collectively, the “Sweepstakes”) (subject to Microsoft’s approval of such Sweepstakes), the prizing for which shall be provided by Microsoft. In particular, Crackle agrees that, in connection with the Sweepstakes, it shall be solely responsible for all aspects of the Sweepstakes, including, but not limited to: (1) payment of all taxes and fulfillment of all tax reporting obligations, if any, arising from such Sweepstakes (to the extent that such obligations are not otherwise assumed by the individuals submitting the submissionsaccepting the prizes); (2) the design, administration, execution and all operational and implementation elements of the Sweepstakes, including drafting any rules and/or termsthe Official Rules and/or disclosures in any advertising of the Sweepstakes created by SPHE; filing any and all documents required under applicable laws; designing, maintaining, and hosting the Sweepstakes microsite, if any, in a secure manner such that the Sweepstakes are conducted according to the Sweepstakes termsOfficial Rules; using (including transmitting), securing and keeping confidential all personal information collected in compliance with applicable laws, applicable privacy policies and the terms of this Agreement; selecting and notifying any winners; (3) the distribution of any tickets or packages as Sweepstakes prizes or giveaways; (4) prize fulfillment for the Sweepstakes; (45) legal compliance for the Sweepstakes in all applicable jurisdictions; (56) obtaining, at its sole expense, any and all necessary third party rights and clearances from entrants and winners relating to, or constituting any part of, the Sweepstakes; (67) Crackle shall complycompliance with all statutes, ordinances, rules and regulations, as such are interpreted and enforced as of the date of the Sweepstakes, applicable to the conduct of the Sweepstakes in the territory where the Sweepstakes is applicable; and (78) Crackle shall provideproviding Microsoft with the official rulesOfficial Rules showing Microsoft named as a released party following no later than thirty (30) days prior to the start of any individual the Sweepstakes.
69.No Endorsement, Look-Alikes or Sound-Alikes. Microsoft shall not utilize any materials relating to the Series in any manner which might suggest that any actor appearing therein or other persons or entities associated with the Licensed Property or the Series endorse Microsoft, its products, or any other product or service. In addition, Microsoft shall not utilize any “look-alike” to imitate the likeness of any individual appearing in or associated with the Licensed Property or the Series, or any "soundalike" to imitate the voice of any individual who appears or is associated with the Licensed Property or the Series, except with such individual's prior written consent. No Endorsement, Look-Alikes or Sound-Alikes[SPE6]. Microsoft shall not utilize any materials relating to the Series in any manner which might suggest that any actor appearing therein or other persons or entities associated with the Licensed Property or the Series endorse Microsoft, its products, or any other product or service. In addition, Microsoft shall not utilize any “look-alike” to imitate the likeness of any individual appearing in or associated with the Licensed Property or the Series, or any "soundalike" to imitate the voice of any individual who appears or is associated with the Licensed Property or the Series, except with such individual's prior written consent.
10.
7.Insurance: Upon request by MicrosoftCrackle, Microsoft Crackle shall provide MicrosoftCracklewith a certificate from CrackleMicrosoft’squalified and licensed insurer with an A.M. Best Guide Rating of A:VII admitted in all states and countries where the Promotion is being held certifying that CrackleMicrosofthas a commercial general liability insurance policy in force (including but not limited to contractual, advertising and products liability) with at least Three Million Dollars ($3,000,000) per occurrence and Five Million Dollars ($5,000,000) aggregate for the Promotion. Such policy(ies) shall be endorsed to showthat Microsoft, Agency and each of their respective Crackle, et al, its parent, subsidiary, related and affiliated companies, and their directors, officers, employees, agents, representatives and assigns are additional insureds (the “Additional Insureds”) as their interests may appear with respect to all operations in relation to thePromotion under such insurance policy, which policy shall include, but not be limited to, a contractual liability endorsement to cover CrackleMicrosoft’sobligations under this Agreement. The evidence of coverage shall specifically state that coverage as it pertains to MicrosoftCrackle, Agency and each of their and its parent, subsidiary and affiliated entities, shall be primary regardless of any other coverage which may be available to MicrosoftCrackle, Agency and each of their its parent, subsidiary and affiliated entities. CrackleMicrosoftshallendeavor to notify MicrosoftCrackleof the cancellation, non-renewal or any restrictive amendment of the policy at least thirty (30) days prior to the effective date of such cancellationnon-renewal or amendment. CrackleMicrosoftshall not violate, or permit to be violated, any conditions of said insurance policy, and CrackleMicrosoftshall at all times satisfy the requirements of the insurance company writing said policy. Microsoft Crackle will provide to Crackle Microsoft the certificate of insurance and the additional insured endorsement as soon as possible after the execution of this agreement. Failure to maintain the insurance coverage specified herein shall be deemed a material breach of this Agreement.
8101.Representations andWarranties: Each party hereby represents, warrants and covenants that (a) it possesses the full right, power and authority to enter into and fully perform this Agreement, (b) it has all rights necessary to grant the rights granted hereunder to allow the other parties to fully exercise their rights as described in this Agreement, (c) it has obtained and will comply with all required authorizations, approvals, licenses or permits from all government authorities in order for it to enter into and perform its obligations under this Agreement, (d) it is free of any contractual obligation that would prevent it from entering into or performing its obligations under this Agreement, (e) the execution, delivery and performance of this Agreement by it has been duly authorized by all necessary corporate action, (f) it will not act in a manner or enter into any oral or written agreements inconsistent with this Agreement, (g) the performance of its obligations hereunder and its product, redemption or fulfillment, if any, shall comply in all material respects with the Agreement and with all applicable laws; and (h) no artwork, logo, copy or intellectual property submitted by it or its agents for the Promotionshall infringe or violate any intellectual property right or rights of any person, contain any libelous or defamatory matter or be false, misleading or deceptive. In addition, Crackle hereby represents, warrants and covenants that Crackle owns or controls all rights in the Series and has the authority to grant Microsoft the permission and rights granted to it herein and (c) neither the Series nor Promotion nor, any parts thereof, any materials contained therein, nor the titles thereof will violate or infringe upon or give rise to an adverse claim with respect to any intellectual property, personal or proprietary right of any third party ( including without limitation any trademark, trade name, copyright, patent or right of privacy or will libel or slander any person or entity).
9112.Indemnity: Each party ("Indemnitor") will indemnify, protect, defend and hold harmless the other party, its parent, subsidiary and affiliated entities, and their respective directors, officers, employees and agents, from and against any and all third party claims, liabilities, losses, damages, injuries, demands, actions, causes of action, suits, proceedings, judgments and expenses, including, without limitation, reasonable attorneys‘ fees, court costs and other legal expenses, arising from or connected with (i) any alleged or actual breach by Indemnitor of any provision hereof or the inaccuracy of any warranty or representation made by Indemnitor herein, and/or (ii) the performance by Indemnitor or any third party authorized by or affiliated with Indemnitor in connection with Indemnitor’s obligations under this Agreement.
10123.lllegality: Nothing contained in this Agreement shall require the commission of any act which is contrary to law, and if there shall exist any conflict between any provisions contained herein and any such law, the latter shall prevail, and the provision or provisions herein affected shall be curtailed, limited or eliminated to the extent (but only to the extent) necessary to remove such conflict, and as so modified, the Agreement shall continue in full force and effect.
11134.No Joint Venture: Nothing in this Agreement shall be construed to constitute a partnership or joint venture between the parties, and no party shall become bound by a representation, act, or omission of the other.
12145.Headings: The paragraph headings, as used in this Agreement, are solely for the convenience of the parties and shall not be used in the construction or interpretation of any provision hereof.
13156.Effect of Breach:
(a)Termination. In the event that either party breaches or fails to perform any material provision, representation, warranty or other condition of this Agreement, and after having been given notice and a seven fifteen (715) [SPE7]day opportunity to cure, still fails to perform, then the other party shall, in addition to all of the other rights and remedies provided for herein, have the right to terminate this Agreement upon seven thirty (730) [SPE8]days written notice. Upon termination, Microsoftshall immediately cease and desist from using the Licensed Property or any material relating to the Licensed Property in any Promotion materials or otherwise. Notwithstanding the foregoing, Microsoft’suse of unauthorized or unapproved materials relating to the Promotion, the Licensed Property, the Seriesor the Digital Releaseshall not be curable.
(b)Microsoft’sRemedies. In the event of a breach on the part of Cracklehereunder, Microsoft’sremedies shall be limited to the right to seek damages at law and in no event shall Microsoftbe entitled to injunctive or other equitable relief preventing or restraining Cracklein connection with the production, distribution, advertising or exploitation of the Licensed Property, the Seriesor the Digital Release.