Exhibit 10.2
AFFILIATION AGREEMENT
This AFFILIATION AGREEMENT (this "Agreement") is entered into as of the
1st day of January, 1999, between JAMtv Corporation, a Delaware corporation
("JAMtv"), and Source Enterprises, Inc., a Delaware corporation ("SEI").
RECITALS:
A. SEI and JAMtv desire to enter into the agreements described herein
providing for the use of the Source Content (including the content of THE SOURCE
magazine) for and in connection with the development of THE SOURCE website at
the Source URL. Capitalized terms used in this Agreement have the meanings
ascribed to them in Section 1 below.
B. Subject to the satisfaction of the conditions precedent set forth
herein and subject to the other terms and conditions set forth in this Agreement
and the other JAMtv/Source Agreements:
(i) JAMtv and SEI will commence the creation and operation of
the Source Website and the integration of Source Content
into the JAMtv Music Hub in accordance with the Launch
Schedule;
(ii) JAMtv will provide the JAMtv Hosting Services and present
the Source Content on the Source Website;
(iii) SEI will deliver the Source Content to JAMtv and grant or
cause the grant of the SEI Licenses to JAMtv;
(iv) SEI will provide certain advertising and promotion services
and opportunities to JAMtv in connection with THE SOURCE
magazine, as well as access to certain promotional
programs, as appropriate;
(v) JAMtv will be responsible for paying the License Fees and
certain shared Net Revenues to SEI and for delivering a
Warrant to SEI which provides for the purchase of certain
shares of common stock of JAMtv; and
(vi) from and after the Launch Date, among other things, the
Source URL will point to the Source Website hosted by
JAMtv.
NOW, THEREFORE, in consideration of the Recitals (which are incorporated
herein by this reference), the mutual promises contained herein, and other
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, JAMtv and SEI hereby agree as follows:
1. DEFINED TERMS. As used in this Agreement, the following
capitalized terms shall have the meanings set forth below unless otherwise
defined herein. Each use herein of "including" shall mean a reference to
"including, without limitation," and shall not be exclusive. All of the
JAMtv/Source Agreements referenced below are of even date herewith unless
otherwise expressly dated below.
"Archival Source Content" means the archival and historical
Source Content or derivatives thereof which are or will be
digitized, formatted, modified, recorded, or otherwise manipulated
or stored by JAMtv to render such Source Content suitable for use
with the Source Website in accordance with Section 2.
"Confidential Information" means the trade secrets or other
information of a confidential nature of a party hereto, including,
without limitation, such information, arising from such party's
business, customers, or Proprietary Rights, and whether or not
owned by such party or held in confidence by such party under an
obligation of confidentiality with a third party.
"Default" means a default by a party under this Agreement
or the other JAMtv/Source Agreements as specified in Section 19.
"Interactive Network" means the Internet, the World Wide
Web, and any other similar interactive electronic means of
distribution or transmission now or hereafter known, including
such other distribution channels and means as the parties may
agree from time to time hereafter and including specifically those
means listed and/or described in Schedule 4.
"Initial Term" means the initial two (2) year term of this
Agreement specified in paragraph (a) of Section 18.
"JAMtv Competitor" means any person or entity that offers,
aggregates, and/or distributes (for sale or otherwise) on the
Interactive Network content, the principal or substantial focus of
which is about or relating to music or musicians, including,
without limitation, text, images, video, and audio (including,
without limitation, music used in synchronization or timed
relation with visual displays), including without limitation,
Launch, ▇▇▇.▇▇▇, SonicNet, ▇▇▇▇▇, ▇▇▇, Amazon, Spinner, and UBL.
"JAMtv Content" means (exclusive of JAMtv's rights in the
Source Content, if any, and/or arising under this Agreement) all
of JAMtv's: (a) copyrights, whether or not registered,
registrations thereof, applications for registration thereof, and
all secondary and subsidiary rights therein, (b) service marks,
trademarks, trade dress, registrations thereof, and applications
for registration thereof, together with the goodwill symbolized
thereby and connected
-2-
therewith, (c) art, audiovisual works, animations, cartoons,
characters, choreography, compilations, collective works, computer
software and programs, data, designs, emblems, films, film clips,
graphics, images, illustrations, likenesses, literary works, logos,
motion pictures, musical compositions, music videos, performances,
photographs, pictorial works, songs, song lyrics, sound recordings,
scripts, screenplays, templates, text, video recordings, copyrightable
subject matter, works of authorship, trade secrets (including without
limitation customer and vendor lists), and other proprietary rights,
(d) publication rights, display rights, attribution rights, integrity
rights, performance rights, mechanical rights, approval rights, and
moral rights associated with the foregoing, (e) all renewals,
extensions, continuations, derivative works, enhancements,
improvements, modifications, updates, new releases or other revisions
of the foregoing, (f) all publicity rights or privacy rights (or
waivers or quitclaims thereof) of any person or entity, and (g) all
rights corresponding to the foregoing throughout the world; all of the
foregoing which any of JAMtv or its employees, consultants or
representatives has created or may hereafter create, has licensed or
may hereafter license, or has acquired or may hereafter acquire, in
any form and on any medium now known or hereafter developed, whether
tangible, printed, recorded, digitized, fixed, stored, electronic, or
otherwise embodied.
"JAMtv Hosting Services" means the services provided by
JAMtv in accordance with Section 2.
"JAMtv-Tunes Music Hub" means the interactive multimedia
site(s) on the Interactive Network currently hosted by JAMtv at
the JAMtv or Tunes URL or any other location or site on the
Interactive Network through which JAMtv places, broadcasts,
downloads, transmits, or distributes JAMtv Content (or, after the
Launch Date, any Source Content pursuant hereto), together with
any affiliated radio station sites, participating venue sites, and
all other partnership, syndication, affiliation or distribution
sites receiving content from JAMtv on the Interactive Network.
"JAMtv URL" means the uniform resource locator
▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇ and any and all related URLs identifying
related web pages within such web site (e.g.,
▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇/▇▇▇▇/▇▇▇▇/) (hereinafter
"Extensions"). "Tunes URL" means the uniform resource locator
▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇ and any and all Extensions thereof.
"JAMtv/Source Agreements" means, collectively, this
Agreement, the Warrant, and the other agreements, documents, and
instruments executed or delivered in connection therewith.
-3-
"Launch Date" means the later of the completion date of the
initial complete integration of the Source Content into the Source
Website, as mutually accepted by JAMtv and SEI, and the date all
of the basic pages constituting the Source Website become
available to and accessible by the general public at the Source
URL.
"Launch Schedule" means the tasks to be performed by JAMtv
and SEI to commence and consummate the integration of the Source
Trademarks and the Source Content into the Source Website and the
time line therefor, as such tasks and time line are more
particularly described in Section 2 and on SCHEDULE 1.
"License Fees" means the license fees payable by JAMtv in
accordance with paragraphs (a), (b), (c), and (d) of Section 8.
"Net Revenue" means total gross cash receipts, and the cash
value of payments in kind and/or barter, if any, for sales of site
advertising or sponsorships and/or for onsite product or service
advertising or promotion directly attributable to or arising by
reason of the Source Website or the net receipts from any
sublicensee of Source Content actually received by JAMtv which, in
each case, shall require the consent of SEI, less the following
amounts:
(i) a sales commission of fifteen
percent (15%) to be shared equally by JAMtv
and SEI regardless of which JAMtv or SEI
sales representative made any sale;
(ii) any currency exchange fees
incurred by JAMtv with respect to invoiced
amounts other than in United States dollars;
(iii) a reserve for amounts that
cannot be repatriated to the United States
because of currency control or similar laws,
less any amounts previously reserved against
release from such controls; and
(iv) legal fees and disbursements paid
by JAMtv to outside counsel in connection
with obtaining, maintaining, and enforcing
Proprietary Rights for the Source Content (to
the extent that JAMtv is expressly authorized
by SEI to do so hereunder) in accordance with
this Agreement, and any and all amounts paid
by JAMtv (A) as damages for infringement by
any part of the Source Content (or the use of
such content for its intended purpose) of a
third party's Proprietary Rights or (B) in
settlement with SEI's consent
-4-
of allegations of such infringement or (C) as a
license fee with respect to any such Proprietary Rights.
In determining Net Revenues, amounts invoiced or received by JAMtv
in foreign currencies will be deemed converted into United States
dollars at the average exchange rates used by JAMtv in its
financial statements for the month of invoice or receipt, as
appropriate. In determining Net Revenues, barter and in-kind
remuneration shall not be accepted, except as any such
arrangements shall be approved in advance by JAMtv and SEI. Any
deductions applicable to Net Revenues may be taken by JAMtv in the
reporting period in which such deduction is paid or incurred in
accordance with JAMtv's customary accounting procedures. Any
unused deductions from a given period may be carried over to
subsequent reporting periods.
The parties hereby acknowledge that Net Revenues do not include
any proceeds of sale of Source Merchandise or other non-music
merchandise sold on the Source Website and any revenue derived by
a party through the Noncompeting Source Website.
"Net Revenue Payments" means the percentages of Net Revenue
which are payable by JAMtv under paragraphs (a) and (b) of Section
9.
"Mandatory Renewal Term" means the three (3) year renewal
term of this Agreement arising upon a Trigger Event as specified
in paragraph (b) of Section 18.
"Network Icon" means a printed icon or logo of type, style,
and design to be mutually agreed upon between the parties for
placement in the sole discretion of SEI at certain designated
locations in THE SOURCE magazine which will refer to related
supplementary materials and multimedia assets available on the
Source Website in accordance with Section 7.
"Noncompeting Source Website" means a website at a uniform
resource locator other than the Source URL where SEI (either alone
or in conjunction with others except a JAMtv Competitor) may
place, broadcast, download, transmit, or distribute third party
content (or limited Source Content as provided below) provided
that such website: (i) does not contain non-Source Content the
principal or substantial focus of which is about or relating to
music or musicians unless SEI receives the prior consent of JAMtv
to the use of such non-Source Content which consent shall not be
unreasonably withheld or delayed; and (ii) does not contain any
Source Content the principal or substantial focus of which is
about or relating to music other than headlines, teasers, links to
the Source Website, and other limited content, in each case where
a principal purpose of the use of such Source
-5-
Content shall be to drive and/or direct additional traffic to the
Source Website. In connection with paragraph (i) above, failure by
JAMtv to expressly approve or disapprove of such arrangement within
ten (10) business days of JAMtv's receipt from SEI of a written
request for approval of such arrangement shall be deemed acceptance by
JAMtv of such arrangement.
"Optional Renewal Term" means any renewal term of this
Agreement other than a Mandatory Renewal Term.
"Proprietary Rights" means any copyright, trademark, trade
name, trade dress, service ▇▇▇▇, domain name, invention,
discovery, patent, patent applications, trade secret, rights of
publicity, and any other proprietary interests, including but not
limited to rights in assets such as HTML and/or VRML code, CGI
and/or Perl scripts, JavaScript code and Java code or applets and
tools or techniques developed, page designs, layouts, graphic
images, and/or styles, and page and/or form templates developed.
"Qualified Public Offering" means a primary or secondary
sale of shares of common stock of JAMtv to the public pursuant to
a public offering registered under the Securities Act of 1933, as
amended, which shall be consummated where the aggregate net
proceeds to JAMtv (after deducting underwriting discounts and
commissions and expenses of the offering) from the offering of the
shares of common stock so registered are at least $10,000,000.
"Qualified Private Offering" means a private offering of
equity securities of JAMtv, which shall be consummated after the
date hereof where the aggregate net proceeds to JAMtv (after
deducting expenses of the offering) from the offering of such
securities are at least $15,000,000.
"Renewal Term" means the Mandatory Renewal Term or any
Optional Renewal Term.
"Source Content" means all of THE SOURCE magazine's (and
such of SEI's as SEI shall designate) (a) copyrights, whether or
not registered, registrations thereof, applications for
registration thereof, and all secondary and subsidiary rights
therein, (b) the Source URL, service marks, trademarks, trade
dress, registrations thereof, and applications for registration
thereof, together with the goodwill symbolized thereby and
connected therewith, (c) art, audiovisual works, animations,
cartoons, characters, choreography, compilations, collective
works, computer software and programs, data, designs, emblems,
films, film clips, graphics, images, illustrations, likenesses,
literary works, logos, motion pictures, musical compositions,
music videos, performances, photographs, pictorial works, songs,
song lyrics, sound recordings, scripts, screenplays, templates,
text, video
-6-
recordings, copyrightable subject matter, works of authorship, and
other proprietary rights, (d) publication rights, display rights,
attribution rights, integrity rights, performance rights, mechanical
rights, approval rights, and moral rights associated with the
foregoing, (e) renewals, extensions, continuations, derivative works,
enhancements, improvements, modifications, updates, new releases or
other revisions of the foregoing, (f) publicity rights or privacy
rights (or waivers or quitclaims thereof) of any person or entity, and
(g) rights of THE SOURCE Magazine corresponding to the foregoing
throughout the world; in any form and on any medium now known or
hereafter developed, whether tangible, printed, recorded, digitized,
fixed, stored, electronic, or otherwise embodied; including, without
limitation, but subject to Third Party Restrictions, if any, the
content of THE SOURCE magazine and the rights of SEI described on
SCHEDULE 2 hereto.
"Source Merchandise" means merchandise (including without
limitation books, magazine back issues, compact disks, and
clothing) incorporating, embodying or displaying Source Content
or Source Trademarks or not displaying Source Content or Source
Trademarks but sold on the Source Website
"Source Trademarks" means the Source URL and the
trademarks, service marks, and logos listed on SCHEDULE 3 hereto.
"Source URL" means the uniform resource locator
'▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇' and any and all Extensions thereof.
"Source Website" means the website at the Source URL (and
at any JAMtv interactive multimedia site available on the
Interactive Network, including, without limitation, the JAMtv-Tunes
Music Hub, featuring primarily Source Content with the
consent of SEI) and on which JAMtv shall after the Launch Date,
pursuant hereto, place, broadcast, download, transmit, or
distribute Source Content with the consent of SEI (and JAMtv
Content pursuant hereto), as updated, modified, or supplemented
from time to time.
"SEI Licenses" means the licenses and rights granted to
JAMtv pursuant to this Agreement.
"Term" means the Initial Term or any Renewal Term.
"THE SOURCE magazine" means a reference to THE SOURCE
magazine.
"Third Party Restrictions" means the rights of, if any,
and/or restrictions imposed by, third parties on SEI's and/or THE
SOURCE Magazine's rights in Source Content, as such restrictions
are more particularly described in paragraph (b) of Section 4.
-7-
"Trigger Event" means either a Qualified Public Offering or
a Qualified Private Offering occurring before the expiration or
termination of the Initial Term or any Renewal Term.
"URL" means UNIFORM RESOURCE LOCATOR, the global address of
documents and other resources on the World Wide Web.
"Warrant" means that certain Warrant, initially for 75,000
shares of common stock of JAMtv, issued by JAMtv to SEI.
2. JAMTV HOSTING SERVICES. JAMtv will install and host, at no cost
to SEI, the Source Website on JAMtv's Internet servers in Chicago (or
elsewhere). In accordance therewith, JAMtv will: (a) integrate existing and
future Source Content into the Source Website as consented to by SEI from time
to time which the parties deem appropriate for use on the Source Website; and
(b) maintain, support and further develop the Source Website. JAMtv may, at any
time, in its sole discretion after the Launch Date, change, expand, alter or
redesignate the physical server(s) for the Source Website as well as their
physical locations in order to enhance, optimize, simplify, consolidate or
otherwise integrate the performance and other operating characteristics of all
of the sites on the Interactive Network which collectively constitute the
JAMtv-Tunes Music Hub so long as such changes do not adversely impact or reflect
on the Source Content, SEI ,THE SOURCE magazine or the Source Website. JAMtv
will use commercially reasonable good faith efforts to ensure that JAMtv Hosting
Services and the Source Website will be maintained, operated, supported and
developed consistent with this Agreement and the development of the Source
Website to date. JAMtv will use commercially reasonable good faith efforts to
maintain the JAMtv Hosting Services and the Source Website in its present status
as a technically state-of-the-art website.
3. SOURCE CONTENT. In accordance with and subject to the following
terms and the terms more particularly described on SCHEDULE 2 attached hereto,
SEI will develop, create, acquire, deliver, and make available to JAMtv to the
extent not prohibited by Third Party Restrictions, the Source Content at no cost
to JAMtv other than as expressly provided in this Agreement.
(a) ACCESS AND DELIVERY. SEI shall provide JAMtv, at
reasonable times and from time to time, access to the Source
Content in order to access, copy, duplicate, digitize, retrieve,
and utilize the Source Content. SEI shall provide JAMtv with
reasonable assistance and technical support pursuant thereto
including, without limitation, provision and shipping to JAMtv of
recordings, CDs or other copies of the Source Content or
transmission thereof by electronic, satellite, Internet, or
telecommunications means to JAMtv. JAMtv will have access to new
Source Content which is to be published in THE SOURCE magazine
within ten (10) days after the earlier of: the initial mailing of
subscription copies
-8-
of or the initial distribution to newsstands of the issue of THE
SOURCE magazine in which such Source Content is to appear. SEI will
also provide to JAMtv, at no cost, access to and appropriate copies
of statistics, charts, lists, sales figures, and other data contained
in THE SOURCE magazine for use on the Source Website.
(b) FORM. Where practicable, SEI will provide JAMtv
with (1) electronic, CD, or digital copies of Source Content in
server ready format (except for Archival Source Content which may
be provided or delivered in whatever form it is presently
available) and (2) color copies, of typeset quality, of all
trademarks, service marks, design logos, and artwork comprising
Source Content.
(c) ACQUISITION AND CREATION OF SOURCE CONTENT. SEI
will in good faith use commercially reasonable efforts to develop,
create, and acquire additional Source Content upon terms
consistent with the scope of the SEI Licenses granted hereunder
for use on the Source Website. SEI will also assist JAMtv in
identifying, soliciting and contracting with writers and other
talent which the parties believe can make substantial
contributions to the content on the Source Website. SEI will
assist JAMtv in developing new sections, areas, features, and
other elements for the Source Website including, without
limitation, weekly events, photography, trivia, games and quizzes,
personals and polls online, celebrity chats, music critics round
tables, and gossip columns. In addition, SEI and THE SOURCE
magazine staff will assist JAMtv in developing, with major third
party Internet businesses (such as Yahoo, Excite, Lycos,
GeoCities, Infoseek, Microsoft Corporation, America Online, and
Netscape), new brand opportunities, products and services for
items such as branded Source Website webcasts for Yahoo, branded
Source Website interviews, and branded Source Website online
celebrity chats. As between SEI and JAMtv, all material acquired
and/or created for inclusion as Source Content for use on the
Source Website (except JAMtv Content) shall be owned solely by and
deemed assigned to SEI and may be used by SEI so long as it
conforms to the license grant restrictions set forth in Section 4
and Section 5 and its exclusivity obligations under Section 11)
without payment of any kind.
(d) SOURCE STAFFING. SEI will maintain and make
available a staff sufficient in its sole discretion throughout the
Term to meet its content production responsibilities under this
Agreement. SEI will permit appropriate senior members of THE
SOURCE magazine staff to visit JAMtv offices in Chicago on a
regular basis to plan and coordinate the activities of the parties
in providing the content for the Source Website and will provide
one or more work spaces in the SEI offices in New York to be used
from time to time by JAMtv personnel in connection with their
visits to New York for similar coordination and planning meetings.
-9-
4. CONTENT LICENSE.
(a) GRANT. Subject to the Third Party Restrictions and
SEI's approval in each case, SEI hereby grants to JAMtv for the
Term only (as same may be modified, extended or shortened pursuant
hereto) an exclusive, irrevocable, paid-up and royalty-free
(except for the License Fees hereunder) worldwide right and
license to use and commercially exploit the Source Content
(including without limitation through the reproduction,
translation, printing, adaptation, combination, modification,
reformatting, publishing, alteration, digitizing, capturing,
editing, cropping, combination, synchronization, exhibition,
performance, display, download, broadcast, transmission, and
retransmission thereof in any form and through any medium now
known or later developed) in connection with the Source Website,
and the design, operation, distribution, display, transmission,
marketing, advertising, and promotion thereof.
(b) THIRD PARTY RESTRICTIONS. JAMtv acknowledges that
SEI does not possess all of the Proprietary Rights necessary to
provide and license certain Source Content for use on the Source
Website because certain Source Content is subject to Third Party
Restrictions. SEI will provide JAMtv with copies of
documentation, if any, setting forth any Third Party Restrictions
known to SEI or will disclose to JAMtv the nature, duration,
scope, and other material terms of any Third Party Restrictions in
reasonable detail. SEI's failure to provide such documentation
shall not negate the existence or impact or applicability of any
Third Party Restrictions. SEI shall have no obligation to obtain
all necessary rights to use such Source Content in connection with
the Source Website unless it does so in the ordinary course of
business in connection with THE SOURCE magazine.
5. TRADEMARK LICENSE.
(a) GRANT. Subject to the terms and conditions of this
Agreement, and SEI's approval in each case, SEI hereby grants to
JAMtv for the Term only (as same may be modified, extended or
shortened pursuant hereto) an exclusive, irrevocable, paid-up and
royalty-free (except for the License Fees hereunder) right and
license to use the Source Trademarks and the Source URL in
connection with the Source Website, and the design, operation,
distribution, display, transmission, marketing, advertising, and
promotion thereof.
(b) QUALITY CONTROL. SEI shall have the right to
exercise quality control over the Source Content and the Source
Trademarks and JAMtv's use of the Source Content and Source
Trademarks to that degree necessary, in the reasonable opinion of
SEI, to maintain the validity and enforceability of the Source
Trademarks and to protect the goodwill associated therewith and
the
-10-
intellectual property and other rights of third parties, if
any. JAMtv shall, in its design, operation, distribution,
display, transmission, marketing, advertising and promotion of the
Source Website, adhere to such reasonable standards and
specifications as shall be provided by SEI to JAMtv from time to
time.
(c) TRADEMARK USAGE. JAMtv shall use the Source
Content and Source Trademarks in accordance with sound trademark,
trade name usage, and other intellectual property and related
principles and in material compliance with all applicable laws and
regulations of the United States or other applicable
jurisdictions, including without limitation all laws and
regulations relating to the maintenance of the validity and
enforceability of the Source Trademarks. JAMtv shall use, in
connection with the Source Trademarks, all legends, notices and
markings as reasonably requested by SEI. Any use by JAMtv of
Source Content and Source Trademarks shall be approved in final
form by SEI. Failure by SEI to expressly approve JAMtv's use of
Source Content and Source Trademarks within ten (10) business days
of SEI's receipt from JAMtv of a request for approval of such
proposed usage of Source Content and Source Trademarks shall be
deemed acceptance by SEI of such usage.
(d) CONFORMANCE WITH STANDARDS. JAMtv shall submit to
SEI representative samples of all publicly distributed advertising
materials using the Source Trademarks and/or the Source Content
prior to their initial distribution. Within ten (10) business
days of SEI's receipt of the aforementioned representative
samples, SEI may disapprove such representative samples for
reasonable cause or basis. Failure by SEI to disapprove such
representative samples within ten (10) business days of SEI's
receipt of them shall be deemed approval by SEI. Such advertising
materials, Source Trademarks and Source Content included on the
Source Website shall reasonably conform to the standards and
specifications provided to JAMtv by SEI, which shall not be more
onerous than the standards of quality associated with THE SOURCE
magazine from time to time.
(e) COOPERATION. JAMtv shall comply with such other
reasonable requests as are made by SEI to enable SEI to assure the
quality of any materials on the Source Website bearing any Source
Trademark. JAMtv agrees that it shall cooperate with SEI to avoid
likely confusion or conflict arising out of SEI's or any other
licensee's simultaneous use of the Source Trademarks or Source
Content in connection with other products or services outside of
the Interactive Network.
(f) SOURCE URL. Subject to the licenses granted
hereunder, SEI shall at all times own the Source URL.
-11-
6. ALLOCATION OF CREATIVE AND EDITORIAL CONTROL.
(a) SEI. SEI shall have creative, editorial and quality
control over all content of the Source Website which shall be
subject to the final review and edit of the management of THE
SOURCE magazine. Without limiting the foregoing, the initial
layout and design of the Source Website site (as of the Launch
Date) and any subsequent changes thereto shall be subject to the
artistic approval of SEI which shall not be unreasonably withheld.
(b) JAMTV. Except as set forth in paragraph (a) above,
JAMtv shall have editorial and creative control over such JAMtv
Content, if any, contained in the Source Website subject to SEI's
right to review and approve such JAMtv Content. JAMtv may use the
JAMtv trademarks in conjunction with the Source Trademarks and/or
Source Content to whatever extent JAMtv desires so long as such
use does not create a likelihood of confusion, association or
sponsorship as to the primary identity and branding of the Source
Website as being associated with THE SOURCE magazine. In this
context, the good faith determination of SEI shall be binding and
determinative. JAMtv may, in its sole discretion, at any time,
subject to SEI's review and express approval add, modify, change,
delete, substitute or reschedule in whole or in part from time to
time any and all aspects of the JAMtv Content.
7. PROMOTION AND ADVERTISING.
(a) In accordance with and in consideration of the terms
more particularly described on SCHEDULE 4 attached hereto, SEI
will in good faith promote the Source Website, and the programming
contained thereon. Such promotion duties shall include the
preparation and inclusion in no less than nine (9) issues of THE
SOURCE magazine each year of such partial or full page ads
promoting the Source Website and events occurring in connection
therewith as SEI may in good faith determine are appropriate and
commercially reasonable which shall be written and edited by SEI,
as more fully described on SCHEDULE 4 attached hereto. SEI will
produce advertising copy for any commercial messages SEI proposes
to use to promote the foregoing. Subject to any time constraints,
SEI shall endeavor to submit proposed advertisements and other
promotional materials for the Source Website to JAMtv for
inspection, provided that SEI will have the final right of
approval with respect thereto.
(b) SEI shall place an explanation of the Network Icon
and examples of the Network Icon in each issue of THE SOURCE
magazine, in a manner designed to encourage readers to access the
Source Website. A Network Icon shall be placed at such
location(s) in the magazine as SEI elects in its sole discretion.
-12-
(c) JAMtv and SEI shall cooperate in good faith to
jointly develop promotions in the field, on the Source Website and
in THE SOURCE magazine, which are designed to increase the
visibility, prominence, awareness and popularity of the Source
Website so as to increase traffic and attract advertisers to the
Source Website.
(d) JAMtv and SEI shall cooperate and participate in the
following types of marketing promotions and co-marketing
opportunities: (i) online promotions; (ii) press releases and
public announcements (subject to paragraph (g) of Section 13); and
(iii) reasonable inclusion in the other party's booths,
presentations, presences, and promotions at trade shows,
conferences, conventions, in print and on radio and/or television,
and in marketing materials and advertising campaigns.
(e) SEI shall place on the index/home page of any
Noncompeting Source Website a link or button above-the-fold
pointing directly to the Source Website.
(f) The services provided by THE SOURCE magazine staff
in connection with the advertising and promotional services of SEI
described in the preceding paragraphs of this Section shall be
without charge to JAMtv.
8. LICENSE FEES. In consideration for the SEI Licenses and the
obligations of SEI under this Agreement and the other JAMtv/Source Agreements,
provided no Default by SEI exists, JAMtv will pay the License Fees (subject to
recoupment under Section 9) to SEI as follows.
(a) YEAR ONE. JAMtv will pay $72,000 to SEI for the
nine month period commencing on April 1, 1999 and ending on
December 31, 1999, which shall be payable in nine (9) equal
monthly installments of $8,000 each on the last day of each
calendar month.
(b) YEAR TWO. JAMtv will pay $120,000 to SEI for the
one year period commencing on January 1, 2000 and ending on
December 31, 2000, which shall be payable in twelve (12) equal
monthly installments of $10,000 each on the last day of each
calendar month.
(c) LICENSE FEES FOR OPTIONAL RENEWAL TERM. If there
shall be any Optional Renewal Term, JAMtv will pay $144,000 to SEI
for each one year period thereof commencing on January 1st of each
such year and ending on December 31st of each such year, which
shall be payable in twelve (12) equal monthly installments of
$12,000 each on the last day of each calendar month.
-13-
(d) LICENSE FEES FOR A MANDATORY RENEWAL TERM. If there
shall be any Mandatory Renewal Term, JAMtv will pay $144,000 to
SEI for each one year period thereof commencing on January 1st of
each such year and ending on December 31st of each such year,
which shall be payable in twelve (12) equal monthly installments
of $12,000 each on the last day of each calendar month.
9. ADVERTISING AND SUBLICENSING REVENUE.
(a) ADVERTISING. JAMtv shall pay SEI seventy percent
(70%) of the Net Revenue of JAMtv derived from advertisements,
product or service promotion and/or sponsorships obtained by,
directed by, or otherwise placed on pages of the Source Website.
(b) SUBLICENSING. JAMtv shall pay SEI seventy percent
(70%) of the Net Revenue of JAMtv derived from the sublicensing of
Source Content conditioned upon SEI's express consent in each case
to third parties where expressly permitted by SEI
(c) PAYMENT SCHEDULE AND RECOUPMENT.
(1) SCHEDULE AND REALIZATION. The Net
Revenue Payments will be payable (i) in increments
as realized within a one calendar month period and
(ii) within thirty (30) days after the end of such
calendar month. Net Revenue with respect to any Net
Revenue Payment will be realized when actually
received by JAMtv. Any deductions applicable to Net
Revenues may be taken by JAMtv in the reporting
period in which such deduction is paid in accordance
with JAMtv's customary accounting procedures. Any
unused deductions from a given period may be carried
over to subsequent reporting periods.
(2) RECOUPMENT AND CARRY OVER. JAMtv's
payments of License Fees shall be credited,
amortized, and recouped against JAMtv's obligation
to pay Net Revenue Payments under this Section.
Accordingly, one hundred percent (100%) of the Net
Revenues shall first be applied to permit JAMtv to
recoup one hundred percent (100%) of the License
Fees actually paid by JAMtv to SEI and only after
full recoupment of such License Fees shall JAMtv be
obligated to make Net Revenue Payments to SEI.
Within any given one year period ending on any
anniversary date
-14-
hereof, any unused recoupment amounts against Net
Revenue Payments from a given calendar month may be
carried over to any subsequent calendar month.
10. TAXES. Each party shall be responsible for any sales, use or
other tax assessed in connection with the services performed, licenses granted,
or programming made available by such party hereunder.
11. EXCLUSIVITY. JAMtv shall, during the Term hereof, be the
exclusive provider of Source Content on the Interactive Network and SEI shall
not use and shall not license, grant any right to use, sublicense, or otherwise
transfer any right, title or interest in or to the Source Content to any other
person or entity for use in connection with the Interactive Network or in the
design, operation, distribution, display, transmission, marketing, advertising,
or promotion of goods and services thereon. Notwithstanding the foregoing, (i)
Source magazine advertisers may be given permission to place headlines, teasers
and links to the Source Website on their own websites so long as a primary
purpose or effect of such links, etc. is to drive additional traffic to the
Source Website and (ii) nothing herein contained shall limit SEI's rights and/or
the rights of any affiliate of the Source which is not a JAMtv Competitor: (A)
to operate a Noncompeting Source Website, (B) subject to the limitations set
forth in this Agreement, to use the Source Trademarks or Source Content on a
Noncompeting Source Website, (C) to earn revenue from a Noncompeting Source
Website so long as such revenue is not derived from any JAMtv Competitor without
the need for the prior consent of JAMtv or (D) to operate and to earn revenue
(either alone or in conjunction with others except a JAMtv Competitor) as an
internet service provider, e-mail provider, or portal on the Interactive Network
provided that its presence on the Interactive Network in such capacity is as a
Noncompeting Source Website. Failure by JAMtv to expressly approve or disapprove
of any arrangement within ten (10) business days of JAMtv's receipt from SEI of
a written request for approval of such arrangement shall be deemed acceptance by
JAMtv of such arrangement. SEI and JAMtv acknowledge that from time to time SEI
may be requested by third parties to enter into certain promotion, marketing,
licensing, and/or advertising opportunities, which would propose to use certain
of the Source Content on the Interactive Network or certain of the features or
functionality of the Source Website on the Interactive Network, and SEI
acknowledges that, in accordance with its exclusivity obligations under this
Section, SEI is prohibited from entering into such third party opportunities
without the written consent of JAMtv which shall not be unreasonably withheld or
delayed. Use of The Source name alone (e.g. "as advertised in The Source")
shall not violate the foregoing exclusivity provisions. In addition, references
on third party Source advertiser websites to promotions, events, contests, etc.
which are being created by the advertiser and THE SOURCE will not violate the
foregoing exclusivity provisions. In such cases, SEI shall attempt to have any
such references include the Source URL or link directly to the Source Website.
12. JAMTV RESTRICTIONS DURING TERM. During the Initial Term and any
extended Term as well, JAMtv will not provide similar services to those being
provided hereunder for any direct
-15-
competitor of THE SOURCE magazine, including, but not limited to, Vibe, Spin or
Blaze, and/or such other publications as the parties may hereafter specify
(but excluding ROLLING STONE magazine and DOWNBEAT magazine).
13. PROPRIETARY RIGHTS.
(a) RIGHTS CLEARANCES. SEI shall obtain the necessary
rights clearances with respect to Source Content and/or other
content that SEI and/or the SOURCE magazine put on the Source
Website and shall be responsible for payment of any license fees
or royalties for such rights clearances, including, without
limitation, copyright or public performance (including digital
performance) music license fees (through, for example, ASCAP, BMI,
SESAC, or RIAA). JAMtv shall obtain the necessary rights
clearances with respect to JAMtv Content and/or other content that
JAMtv puts on the Source Website and shall be responsible for
payment of any license fees or royalties for such rights
clearances, including, without limitation, copyright or public
performance (including digital performance) music license fees
(through, for example, ASCAP, BMI, SESAC, or RIAA).
(b) JAMTV CONTENT. SEI acknowledges that all right,
title and interest in the JAMtv Content and other Proprietary
Rights embodied therein are and shall remain in JAMtv and its
licensors. SEI shall not acquire any right, title, or interest in
the Proprietary Rights created or developed by JAMtv (except to
the extent incorporating the Source Content or Source Trademarks)
in connection with this Agreement, other than as expressly
reserved herein. If any JAMtv Content or segment thereof is
provided to SEI on disc, tape or other tangible embodiment, such
disc, tape or other tangible embodiment shall remain the property
of JAMtv and shall be returned promptly upon JAMtv's request
therefor. Except as expressly provided in this Agreement, SEI is
not authorized to, shall not, and shall not authorize any access,
transmission, duplication, or any other use whatsoever of any
JAMtv Content, any portion thereof, or any derivative work thereof
or any other programs or broadcast material which may have been
transmitted or distributed by JAMtv to SEI, the Source Website or
otherwise. SEI will not authorize, cause, permit, or enable any
JAMtv Content or portion thereof to be recorded, stored,
duplicated, rebroadcast, or otherwise transmitted or distributed
or used for any purpose.
(c) SOURCE CONTENT. JAMtv acknowledges that all right,
title and interest in the Source Content and other Proprietary
Rights embodied therein are and shall remain in SEI and its
licensors. JAMtv shall not acquire any right, title,
-16-
or interest in the Proprietary Rights created or developed by SEI
(whether or not incorporating the JAMtv Content) in connection with
this Agreement, other than as expressly granted herein. If any Source
Content or segment thereof is provided to JAMtv on disc, tape or other
tangible embodiment, such disc, tape or other tangible embodiment
shall remain the property of SEI and shall be returned promptly upon
SEI's request therefor and upon termination of this Agreement JAMtv
shall not challenge SEI's right, title or interest in the Source
Content or otherwise interfere with SEI's use thereof, except as such
use may be inconsistent with any exclusive rights of JAMtv granted
pursuant to this Agreement or the other JAMtv/Source Agreements.
(d) USER DATA. Each party shall be deemed a co-owner of
any data collected from the Source Website, including without
limitation any information provided by or concerning users of the
Source Website, and neither party shall have the right to make use
(including the renting, leasing, or any other third party use) of
such data without the consent of the other except that SEI may use
user name data (and e-mail addresses) generated from the Source
Website at its expense for its own marketing, solicitation and/or
subscription purposes without the consent of JAMtv
(e) CONFIDENTIAL INFORMATION. Each party will, to the
extent and in accordance with the policies used to protect its own
information of similar importance, use its best efforts to refrain
from and prevent the use, duplication, or disclosure of during or
after the Term any Confidential Information of the other party,
disclosed or obtained by such party while performing its
obligations under this Agreement, except when such use or
disclosure is for the limited purpose of performing obligations
under this Agreement. Neither party will have an obligation of
confidentiality with regard to any information insofar as the same
(i) was known to such party prior to disclosure; (ii) is at the
time of disclosure publicly available or becomes publicly
available other than as a result of a breach of this Agreement; or
(iii) is disclosed to such party by a third party not under a duty
not to disclose such information. In addition, the
confidentiality obligations set forth above will not apply to any
Confidential Information which is disclosed pursuant to any law of
the United States or any state thereof; the order of any court or
governmental agency; or the rules and regulations of any
governmental agency. Prior to any disclosure required by law or
order of any court or government agency, the disclosing party will
notify the other party of the required disclosure. If the
required disclosure is to be made within ten (10) days after the
disclosing party becoming aware or informed of the obligation to
disclose, the disclosing party will notify the other party by the
end of the next business day following the day the disclosing
party became aware of its disclosure obligation. The parties
agree that an impending or existing violation of any provision of
this Section by one party would cause the other party irreparable
injury for which it
-17-
would have no adequate remedy at law, and agree that such other
party will be entitled to obtain immediate injunctive relief
prohibiting such violation, in addition to any other rights and
remedies available to it. The nclusion of copyright notices on
any software licensed hereunder does not constitute publication thereof.
(f) SOURCE TRADEMARKS. JAMtv acknowledges that the
Source Trademarks and SEI's other Proprietary Rights and all
rights therein (with the exception of those rights expressly
granted to JAMtv hereunder) and the goodwill pertaining thereto
belong exclusively to SEI. JAMtv's use of the Source Trademarks
and SEI's other Proprietary Rights shall inure to the benefit of
SEI for all purposes, including without limitation, any trademark
registration. Without limiting the generality of the foregoing,
JAMtv shall not challenge the validity of SEI's ownership of any
Source Trademark, Source Proprietary Rights or Source Content or
any registration or application for registration thereof or
contest the fact that JAMtv's rights under this Agreement are
those of a licensee.
(g) PUBLICITY. This Agreement constitutes Confidential
Information. Accordingly, each party shall submit to the other
all advertising, written sales promotion, press releases, and
other publicity matters relating to this Agreement in which the
other party's name or trademark is mentioned or language from
which the connection of said name or trademark may be inferred or
implied, and neither party shall publish or use such advertising,
sales promotion, press releases, or publicity matters without the
prior written approval of the other party, which shall not be
unreasonably withheld or delayed. However, either party may
include the other party's name and a mutually agreed factual
description of the work performed under this Agreement in employee
communications, in internal business planning documents, in its
reports to stockholders, and whenever required by reason of legal,
accounting, or regulatory requirements (including SEC regulations,
state blue sky laws, and the rules of public stock exchanges);
provided that prior to such disclosure the party whose name is
mentioned has not less than ten (10) days to review and comment on
such disclosure.
14. REGISTRATION AND PROTECTION.
(a) COPYRIGHT REGISTRATION. Except as otherwise
expressly authorized by SEI, all registrations and applications
for registration of copyright in the Source Content shall be in
the name of SEI. JAMtv, when requested by SEI, shall assist and
cooperate with SEI in connection with any such filings at SEI's
expense.
(b) ACTIONS AFFECTING VALIDITY. Neither JAMtv nor SEI
shall take any action, fail to take any action, or fail to use its
best efforts to prevent any action to
-18-
be taken by others, which would in any respect affect the validity
or enforcement of the SEI Licenses or the rights in the Source Content
granted to JAMtv herein.
(c) COPYRIGHT NOTICE. JAMtv shall place notices of
copyright in a manner consistent with SEI's placement thereof on
the Source Content which is published by JAMtv.
(d) TRADEMARK REGISTRATION. SEI shall be responsible
for the prosecution and maintenance of trademark registrations of
the Source Trademarks at SEI's sole election and in its sole
discretion. JAMtv shall cooperate with SEI, at SEI's expense, and
shall execute any documents required by SEI and supply SEI with a
reasonable number of specimens to assist SEI, in the registration,
enforcement, or maintenance of any Source Trademark or recordal of
JAMtv as a registered user or licensee.
(e) THIRD PARTY INFRINGEMENT OF SOURCE TRADEMARKS OR
SOURCE CONTENT. If either party discovers any infringement or
misappropriation of (i) any of the Source Trademarks in connection
with the Source Website or similar products or services, or (ii)
any of the Source Content, then the party with knowledge of such
infringement or misappropriation shall promptly notify the other
party thereof. SEI shall take such actions which it determines
are reasonably necessary or desirable in its sole discretion in
connection with any infringement or misappropriation by a third
party of any portion of the Source Content or the Source
Trademarks. JAMtv shall not undertake any action in response to
any infringement or misappropriation of the Source Content or the
Source Proprietary Rights without the prior written consent of
SEI. SEI shall promptly notify JAMtv whether SEI wishes to
prosecute or settle any action with respect thereto. JAMtv agrees
to cooperate with and assist SEI in taking whatever action
(including consenting to being named as a party to any suit or
other proceeding) which SEI determines to be reasonably necessary
or desirable.
(f) THIRD PARTY CLAIMS WITH RESPECT TO SOURCE TRADEMARKS OR
SOURCE CONTENT. If any claim is asserted against either party
hereto alleging that any of the Source Content or Source
Trademarks infringes, misappropriates, or otherwise violates a
third party's rights, then the party with knowledge of such claim
shall promptly notify the other party. If such a claim is
asserted against JAMtv, SEI shall promptly notify JAMtv whether
SEI wishes to conduct a defense or settlement of any such claim on
behalf of JAMtv. Should SEI elect to conduct such a defense or
settlement, SEI shall be permitted to control fully the defense
and any settlement of such claim. JAMtv shall afford SEI every
reasonable assistance in regard to SEI's defense of any such claim
and JAMtv may appear in any such action.
-19-
(g) THIRD PARTY INFRINGEMENT OF JAMTV TRADEMARKS OR
JAMTV CONTENT. If either party discovers any infringement or
misappropriation of (i) any of the JAMtv Trademarks in connection
with the Source Website or similar products or services, or (ii)
any of the JAMtv Content, then the party with knowledge of such
infringement or misappropriation shall promptly notify the other
party thereof. JAMtv shall take such actions which it determines
are reasonably necessary or desirable in its sole discretion in
connection with any infringement or misappropriation by a third
party of any portion of the JAMtv Content or the JAMtv Trademarks.
SEI shall not undertake any action in response to any infringement
or misappropriation of the JAMtv Content or the JAMtv Proprietary
Rights without the prior written consent of JAMtv. JAMtv shall
promptly notify SEI whether JAMtv wishes to prosecute or settle
any action with respect thereto. SEI agrees to cooperate with and
assist JAMtv in taking whatever action (including consenting to
being named as a party to any suit or other proceeding) which
JAMtv determines to be reasonably necessary or desirable.
(h) THIRD PARTY CLAIMS WITH RESPECT TO JAMTV TRADEMARKS
OR JAMTV CONTENT OR JAMTV USE OF PATENTS AND TECHNOLOGY. If any
claim is asserted against either party hereto alleging that any of
the JAMtv Content or JAMtv Trademarks or JAMtv's use of any
technology or patents infringes, misappropriates, or otherwise
violates a third party's rights, then the party with knowledge of
such claim shall promptly notify the other party. If such a claim
is asserted against SEI, JAMtv shall promptly notify SEI whether
JAMtv wishes to conduct a defense or settlement of any such claim
on behalf of SEI. Should JAMtv elect to conduct such a defense or
settlement, JAMtv shall be permitted to control fully the defense
and any settlement of such claim. SEI shall afford JAMtv every
reasonable assistance in regard to JAMtv's defense of any such
claim and SEI may appear in any such action.
15. REPRESENTATIONS AND WARRANTIES OF SEI.
(a) CORPORATE EXISTENCE AND STANDING. SEI is duly
organized and existing in good standing under the laws of the
state or Delaware and has all requisite power and authority,
corporate or otherwise, to conduct its business, to own its
property and to execute, deliver and perform all of its
obligations under this Agreement and the other JAMtv/Source
Agreements to which it is a party.
(b) AUTHORIZATION AND VALIDITY. The execution and
delivery of this Agreement and the other JAMtv/Source Agreements
by SEI have been duly authorized by proper corporate proceedings,
and this Agreement and the other JAMtv/Source Agreements, upon
their execution and delivery, will constitute legal, valid and
binding obligations of SEI, enforceable in accordance with their
respective terms, except as such enforceability may be limited by
bankruptcy,
-20-
insolvency, reorganization, fraudulent conveyance, moratorium and
similar laws affecting the validity or enforcement of creditors'
rights generally.
(c) NO CONFLICT; APPROVALS. The execution, delivery and
performance of this Agreement and the other JAMtv/Source
Agreements by SEI, the consummation by SEI of the transactions
contemplated therein, and compliance by SEI with the provisions
thereof (including, without limitation, its exclusivity
obligations hereunder), will not violate any existing law, rule,
regulation, order, writ, judgment, injunction, decree or award
binding on SEI or its articles of incorporation or its bylaws or
the provisions of any instrument or agreement to which SEI is a
party or is subject, or by which it, or its property, is bound, or
conflict with or constitute a default thereunder; and the
execution, delivery and performance of this Agreement and the
other JAMtv/Source Agreements, the consummation of the
transactions contemplated therein, and compliance with the
provisions thereof, in each case by SEI, will not require the
consent of any party or the giving of notice to, the exemption by,
any registration, or filing with any governmental authority, to
the extent not previously obtained or made.
(d) INTELLECTUAL PROPERTY. SEI represents and warrants
that (i) it has the full power and authority to grant the SEI
Licenses (as limited by the Third Party Restrictions) and the
other rights granted hereunder, (ii) it is not aware of and has
not received any oral or written notice of any claims adverse to
SEI's rights in the Source Content or Source Trademarks, or that
the Source Content or Source Trademarks infringe upon the
proprietary rights of any third party, (iii) it has not granted to
any other party any rights to use the Source Content or the Source
Trademarks in connection with the Interactive Network, (iv)
subject to the Third Party Restrictions, the exercise of the
rights granted JAMtv hereunder will not now or hereafter in any
manner constitute an infringement or other violation of any
trademark, trade name, service ▇▇▇▇, copyright, trade secret,
patent, or other intellectual property or proprietary rights of
any person, or the publicity, publication, display, attribution,
integrity, approval, performance, moral, or privacy rights of any
person or entity, and (v) the Source Content is not in SEI's
reasonable opinion determined in good faith defamatory and does
not violate any constitutionally valid laws relating to indecency,
obscenity, or pornography.
16. REPRESENTATIONS AND WARRANTIES OF JAMTV.
(a) CORPORATE EXISTENCE AND STANDING. JAMtv is duly
organized and existing in good standing under the laws of the
state or Delaware and has all requisite power and authority,
corporate or otherwise, to conduct its business, to own its
property and to execute, deliver and perform all of its
obligations under this Agreement and the other JAMtv/Source
Agreements to which it is a party.
-21-
(b) AUTHORIZATION AND VALIDITY. The execution and
delivery of this Agreement and the other JAMtv/Source Agreements
by JAMtv have been duly authorized by proper corporate
proceedings, and this Agreement and the other JAMtv/Source
Agreements, upon their execution and delivery, will constitute
legal, valid and binding obligations of JAMtv, enforceable in
accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and similar laws
affecting the validity or enforcement of creditors' rights
generally.
(c) NO CONFLICT; APPROVALS. The execution, delivery and
performance of this Agreement and the other JAMtv/Source
Agreements by JAMtv, the consummation by JAMtv of the
transactions contemplated therein, and compliance by JAMtv with
the provisions thereof, will not violate any existing law, rule,
regulation, order, writ, judgment, injunction, decree or award
binding on JAMtv or its articles of incorporation or its by-laws
or the provisions of any instrument or agreement to which JAMtv is
a party or is subject, or by which it, or its property, is bound,
or conflict with or constitute a default thereunder; and the
execution, delivery and performance of this Agreement and the
other JAMtv/Source Agreements, the consummation of the
transactions contemplated therein, and compliance with the
provisions thereof, in each case by JAMtv, will not require the
consent of any party or the giving of notice to, the exemption by,
any registration, or filing with any governmental authority, to
the extent not previously obtained or made.
(d) INTELLECTUAL PROPERTY. JAMtv represents and warrants that (i) it
is not aware of and has not received any oral or written notice of any claims
adverse to JAMtv's rights in the JAMtv Content or JAMtv Trademarks or the use by
JAMtv of technology or patents, or that the JAMtv Content or JAMtv Trademarks or
the use by JAMtv of technology or patents infringe upon the proprietary rights
of any third party, and (ii) the JAMtv Content is not in JAMtv's reasonable
opinion determined in good faith defamatory and does not violate any
constitutionally valid laws relating to indecency, obscenity, or pornography.
17. CONDITIONS PRECEDENT. The obligations of JAMtv and SEI hereunder
shall be subject to the satisfaction of the following conditions precedent.
(a) JAMTV. JAMtv shall have executed and delivered to
SEI: (i) this Agreement and (ii) the Warrant; and
(b) SEI. SEI shall have executed and delivered this
Agreement to JAMtv.
-22-
18. TERM.
(a) INITIAL TERM. The Initial Term of this Agreement
shall be two (2) years which shall commence on the earlier to
occur of the Launch Date or January 1, 1999 and continue until
December 31, 2000, unless earlier terminated as provided in
Section 20.
(b) MANDATORY RENEWAL TERM. If a Trigger Event occurs
during the Initial Term, this Agreement shall continue for a
Mandatory Renewal Term of three (3) years which shall commence on
January 1, 2001 and continue until December 31, 2003, unless
earlier terminated as provided in Section 20.
(c) OPTIONAL RENEWAL TERM(S). If a Trigger Event does
not occur during the Initial Term, this Agreement may thereafter
continue for Optional Renewal Term(s) upon the mutual agreement of
the parties hereto. Six months prior to the expiration of the
Initial Term, JAMtv and SEI shall begin to negotiate in good faith
in order to determine whether to enter into an Optional Renewal
Term of three (3) years (subject to the possibility of a Trigger
Event occurring during such negotiations and a corresponding
Mandatory Renewal Term).
19. DEFAULT. A Default shall mean the occurrence of any of the
following:
(a) JAMTV. JAMtv fails to pay any License Fee or
payment obligation under Section 9 required to be paid to SEI
hereunder within ten (10) days after the date such fee or payment
became due hereunder. JAMtv breaches any of its representations,
warranties, covenants or its other obligations set forth herein
and shall not have remedied, corrected, and/or materially improved
its performance or cured such breach within 60 days after
receiving written notice thereof from SEI.
(b) SEI. SEI fails to provide any or all of the Source
Content in a timely fashion and in the form and manner specified
herein or breaches any of its representations, warranties,
covenants or its other obligations set forth herein and shall not
have remedied, corrected, and/or materially improved its
performance or cured such breach within 60 days after receiving
written notice thereof from JAMtv.
20. EFFECT OF DEFAULT.
(a) TERMINATION BY JAMTV. JAMtv may terminate this
Agreement if a Default by SEI occurs, which termination shall be
effective immediately upon written notice to SEI from JAMtv. If
this Agreement is terminated by JAMtv for such Default, JAMtv
shall have no further obligation to pay the License Fees or
-23-
or any payments due on Net Revenues other than Net Revenues which
accrued prior to the termination.
(b) TERMINATION BY SEI. SEI may terminate this
Agreement if a Default by JAMtv occurs, which termination shall be
effective immediately upon written notice to JAMtv from SEI. If
this Agreement is terminated by SEI for such Default, JAMtv shall
thereafter have no further obligation to pay the License Fees or
any payments due on Net Revenues except those which accrued prior
to termination.
(c) EFFECT OF TERMINATION. Upon termination of this
Agreement, the SEI Licenses shall terminate and JAMtv shall no
longer be entitled to receive from SEI any additional Source
Content and shall no longer use any Source Proprietary Rights or
Source Trademarks or Source Content; provided, however, that JAMtv
shall thereafter be permitted to use, in connection with the
Interactive Network, Archival Source Content which has been
incorporated into the Artists' Archives section of the JAMtv-Tunes
Music Hub. If the SEI License is not renewed, then JAMtv shall
cooperate with SEI and shall promptly transfer a complete copy of
all of the pages of the Source Website to an ISP or other provider
designated by SEI within a reasonable time after the expiration of
the SEI License.
(d) TERMINATION NOT EXCLUSIVE REMEDY. Termination of
this Agreement by either party hereunder shall not preclude any
other rights or remedies to which such party may be entitled.
21. FORCE MAJEURE. Neither party will have any liability hereunder if
performance by such party shall be prevented, interfered with or omitted because
of labor dispute, failure of facilities, act of God, natural disaster, laws,
government or court action, or any other cause beyond the control of the party
so failing to perform hereunder.
22. LIMITATION OF LIABILITY; INDEMNIFICATION.
(a) LIMITATION OF LIABILITY. EXCEPT AS EXPRESSLY
PROVIDED FOR HEREIN INCLUDING PURSUANT TO SECTIONS 8 AND 9,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY OTHER
PERSON OR ENTITY FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR
INDIRECT DAMAGES, LOSS OF GOOD WILL OR BUSINESS PROFITS, WORK
STOPPAGE, DATA LOSS, COMPUTER FAILURE OR MALFUNCTION, ANY AND ALL
OTHER COMMERCIAL DAMAGES OR LOSS, OR EXEMPLARY OR PUNITIVE DAMAGES
AND (B) NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY
OTHER PERSON OR ENTITY FOR DIRECT DAMAGES IN EXCESS OF THE
AGGREGATE PAYMENTS MADE BY THE PARTIES UNDER THIS AGREEMENT. NO
OFFICER, DIRECTOR, MANAGER, MEMBER, OR EMPLOYEE OF
-24-
EITHER PARTY SHALL HAVE ANY PERSONAL LIABILITY UNDER THIS AGREEMENT
AND THE OTHER PARTY HEREBY HOLDS SUCH PERSONS HARMLESS FOR ANY LIABILITY
HEREUNDER.
(b) LIMITATION OF WARRANTIES. JAMTV WILL MAKE THE JAMTV
CONTENT, THE JAMTV HOSTING SERVICES, AND OTHER SERVICES AVAILABLE
IN ACCORDANCE WITH THE TERMS HEREOF ON A COMMERCIALLY REASONABLE
BASIS, AND DOES NOT WARRANT OR GUARANTY THAT THE AVAILABILITY
THEREOF WILL BE FREE FROM ERRORS IN COMMUNICATIONS OR TRANSMISSION
EXCEPT THOSE ERRORS RESULTING FROM GROSS NEGLIGENCE OR WILFUL
MISCONDUCT. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
JAMTV EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY AND
FITNESS FOR A SPECIFIC PURPOSE. JAMTV DOES NOT ENDORSE, WARRANT,
OR GUARANTEE ANY PRODUCT OR SERVICE OFFERED THROUGH JAMTV AND WILL
NOT BE A PARTY TO OR IN ANY WAY MONITOR ANY TRANSACTION BETWEEN
ANY PERSON AND ANY THIRD PARTY PROVIDERS OF PRODUCTS OR SERVICES.
(c) INDEMNIFICATION.
(1) JAMtv will indemnify SEI, its officers,
directors, managers, employees, agents, and
telecommunications providers against all claims (including
defamation), damages, losses, costs and expenses (including
attorneys' fees) which SEI may incur as a result of JAMtv's
breach of any representation, warranty, or covenant
contained in this Agreement or by reason of JAMtv's gross
negligence or willful misconduct or based on or resulting
from allegedly defamatory, indecent, obscene or
pornographic JAMtv Content. This paragraph shall not be in
limitation of any other indemnification obligations of the
parties set forth in the other JAMtv/Source Agreements.
(2) SEI will indemnify JAMtv, its officers,
directors, managers, employees, agents, and
telecommunications providers against all claims, damages,
losses, costs and expenses (including attorneys' fees)
which JAMtv may incur as a result of SEI's breach of any
representation, warranty, or covenant contained in this
Agreement or by reason of SEI's gross negligence or willful
misconduct, or based on or resulting from allegedly
defamatory, indecent, obscene or pornographic Source
Content. This paragraph shall not be in limitation of any
other indemnification obligations of the parties set forth
in the other JAMtv/Source Agreements.
-25-
23. MISCELLANEOUS.
(a) GOVERNING LAW. Any question as to the validity,
construction or performance of this Agreement shall be construed
in accordance with and subject to the substantive laws (as opposed
to the conflicts of laws provisions) of the State of New York and,
where applicable, the laws of the United States.
(b) JURISDICTION. JAMtv and SEI agree that all claims,
disputes, or controversies between them arising out of, connected
with, related to, or incidental to the relationship established
between them in connection with this Agreement, whether arising at
law or equity in contract, tort, equity, or otherwise, if pursued
in court shall be resolved only by state or federal courts located
in New York County, New York, but each party hereto acknowledges
that any appeals from those courts may have to be heard by a court
located outside of New York County, New York. Each party hereto
waives in all disputes any objection that it may have to the
location of the court considering the dispute.
(c) UNFORESEEN CIRCUMSTANCES. Due to the rate of change
in Internet businesses and the high degree of uncertainty as to
the competitive environment, the parties agree to use their
reasonable good faith efforts in the event of unforeseen
circumstances or other material external changes which may require
further discussions and negotiations leading to amendments to this
Agreement, if any, to be mutually agreed upon between the parties.
(d) DISPUTE RESOLUTION. All claims, dispute and
controversies of every kind and nature arising out of or in
connection with this Agreement shall be resolved by arbitration in
New York, New York, in accordance with the rules of the American
Arbitration Association. The determination of the arbitrator(s)
shall be accompanied by a written opinion and shall be final,
binding and conclusive on the parties, and judgment on the
arbitrator's award may be entered in any court having jurisdiction
thereof. Notwithstanding the foregoing, if interim judicial
relief is necessary prior to rendition of any arbitral award in
order to avoid irreparable injury to either party, then such party
may seek interim measures of protection, including without
limitation orders of injunction, specific performance or other
equitable relief, from any court of competent jurisdiction,
provided that the foregoing shall not be deemed to preclude the
arbitrators from awarding similar or other interim relief or
entering interim arbitration awards. Each party shall bear its
own arbitration costs and expenses, unless the arbitrators, in
consideration of fairness to the parties, determine otherwise.
(e) ENTIRE AGREEMENT. This Agreement, together with the
other JAMtv/Source Agreements, contain the entire understanding
between JAMtv and
-26-
SEI with respect to its subject matter, supersedes all previous
oral or written agreements or understandings between them with
respect thereto, and shall not be modified except by a writing
signed by all parties hereto.
(f) NO WAIVER. No waiver by either party or any breach
of this Agreement by the other shall be deemed to be a waiver of
any preceding, or subsequent breach thereof. Any waiver must be
in writing executed by the waiving party.
(g) PARTIAL INVALIDITY. If any portion of the Agreement
shall be held to be illegal, invalid or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not
affect any other provision hereof, and this Agreement shall be
constructed as if such invalid, illegal or unenforceable provision
had never been contained herein. Additionally, in lieu of each
such illegal, invalid or unenforceable provision, there shall be
added automatically as part of this Agreement a provision as
similar to such former provision as shall be legal, valid and
enforceable.
(h) NOTICES. Except as otherwise expressly provided
herein, all notices and other communications required or desired
to be served, given, or delivered hereunder shall be made in
writing or by a telecommunications device capable of creating a
written record and shall be addressed to the party to be notified
(together with a copy to the respective party designated on the
signature page hereto) at the respective addresses set forth on
the signature page hereto or, as to each party, at such other
address as designated by such party in a written notice to the
other party. Notices shall be deemed to have been duly given (i)
if delivered personally or otherwise actually received, (ii) if
sent by overnight delivery service, (iii) if mailed by first class
United States mail, postage prepaid, registered or certified, with
return receipt requested, or (iv) if sent by telecopy. Notice
mailed as provided in clause (iii) above shall be effective upon
the expiration of ten (10) days after its deposit in the United
States mail and notice sent as provided in clause (iv) above shall
be effective upon transmission. Notice given in any other manner
described in this paragraph shall be effective upon receipt by the
addressee thereof; PROVIDED, HOWEVER, that if any notice is
tendered to an addressee and delivery thereof is refused by such
addressee, such notice shall be effective upon such tender.
(i) SECTION HEADINGS. Section and Paragraph headings
used herein are for informational purposes only and shall not
define nor limit the provisions of this Agreement.
-27-
(j) SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of SEI and its successors
and assignees permitted hereunder and JAMtv and its successors and
assignees permitted hereunder. SEI shall not assign this
Agreement, except (i) in a sale of substantially all of the assets
or equity shares of SEI, to, or through a merger or dissolution of
SEI into, another entity which agrees in writing to be bound by
this Agreement or (ii) to a greater than fifty percent (50%) owned
affiliate of SEI which acquires rights in the Source Content and
Source Trademarks consistent with the grant of the SEI Licenses
hereunder and agrees in writing to be bound by this Agreement.
JAMtv shall not assign this Agreement, except (i) in a sale of
substantially all of the assets or equity shares of JAMtv to, or
through a merger or dissolution of JAMtv into, another entity
which agrees in writing to be bound by this Agreement or (ii) to a
greater than fifty percent (50%) owned affiliate of JAMtv which
agrees in writing to be bound by this Agreement.
(k) INDEPENDENT CONTRACTORS. Each party agrees it is
and will be an independent contractor as to the other party and
not an agent, employee, partner or joint venturer of or with the
other party. Without limiting the foregoing, neither party nor
any officer or employee of such will have any right to bind the
other party, to make any representations or warranties on behalf
of the other, to accept service of process, to receive notice, or
to perform any act or thing on behalf of the other party other
than as expressly authorized by such other party in its sole
discretion. JAMtv shall not be obligated to pay any fees or other
compensation to SEI in connection with the transactions
contemplated by this Agreement other than as expressly
contemplated by Section 8 and Section 9.
(l) INSPECTION/AUDIT RIGHTS. JAMtv will maintain
complete and accurate records of all expenses, revenues and fees
in connection with the performance of this Agreement. For the
sole purpose of ensuring compliance with this Agreement, SEI will
have the right, at its expense, to direct an independent certified
public accounting firm to conduct a reasonable and necessary
inspection and/or audit of such portions of the books and records
of JAMtv which are relevant to JAMtv's performance and/or
obligations pursuant to this Agreement which inspection and/or
audit shall be conducted during normal business hours on
reasonable notice. For this purpose, ten (10) business days prior
written notice shall be deemed reasonable. JAMtv agrees to
reimburse SEI for the reasonable costs of the inspection and/or
audit if the inspection discloses an underpayment of five percent
(5%) or more.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
-28-
[SIGNATURE PAGE TO AFFILIATION AGREEMENT BETWEEN JAMTV CORPORATION AND
SOURCE ENTERPRISES, INC.]
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Affiliation Agreement as of the day and year first above written.
SOURCE ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇▇▇▇,
President
with a copy to:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇.: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Attn.: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
JAMTV CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Chief Executive Officer
with a copy to:
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Suite 560 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Suite 3000
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------------
All of the Launch Schedule Requirements have been met and
satisfied as of the date of execution of this Agreement.
SCHEDULE 2
SOURCE CONTENT
---------------------------------------------------
Feature articles, graphics and other content from various sections of THE
SOURCE magazine;
Reviews, columns, cover art, logos, artwork, illustrations, photos, print
and audio interviews, excerpts, charts, etc. from THE SOURCE magazine and
archives;
Other select archival material, compilations, special inserts, sections,
etc.;
All material prepared specifically for electronic distribution for The
Source website;
Access to all DVDs, CDs, videos, tapes, cassettes, etc. supplied to The
Source by any artists, labels, promotions, etc. for the purpose of
website/Internet promotion, marketing, advertising, etc, which (subject
to consents of holders of intellectual property rights) may be used by
JAMTV to create clips and other multimedia assets for digital inclusion
in The Source website; and
Such other selected music-related material of whatever nature which The
Source obtains, creates, licenses, or otherwise has the right to use,
publish and distribute on the Internet and through its website.
Exclusive feature stories prepared on a regular basis solely for the
Source Website by THE SOURCE magazine staff, with substantial multimedia
components.
The contents of and information contained in concert reviews, record
reviews, artists' questions and answers, artists' picks, college reports,
and any charts, polls (such as readers' and critics' polls) or
compilations contained in THE SOURCE magazine along with exclusive record
reviews and charts prepared and developed by THE SOURCE magazine staff,
solely for the Source Website;
All available photography, audio assets, video assets, art, interviews,
transcripts, digital material, images, illustrations, animations, books,
etc. in the possession and control of SEI and/or THE SOURCE magazine
which may be used to create new and/or supplementary or repurposed
audio/visual and multimedia material for the Source Website;
All available illustrations, photographs, and artwork contained in THE
SOURCE magazine, which is in the possession and control of SEI and which
may be used to create new and/or supplementary multimedia material for
the Source Website.
SCHEDULE 3
SOURCE TRADEMARKS
----------------------------------------------------
SOURCE TRADEMARKS
THE FOLLOWING TRADEMARKS AND SERVICE MARKS AND ALL TRADEMARKS AND SERVICE MARKS
CONTAINING OR DERIVED FROM THE FOLLOWING MARKS:
THE SOURCE
▇▇▇▇▇▇▇▇▇.▇▇▇
ALL REGISTRATIONS AND APPLICATIONS FOR REGISTRATION OF THE FOREGOING TRADEMARKS
AND SERVICE MARKS, INCLUDING, WITHOUT LIMITATION, THE FOLLOWING:
REGISTRATIONS WITH THE UNITED STATES PATENT AND TRADEMARK OFFICE:
REGISTRATION REGISTRATION
TRADEMARK NUMBER DATE
---------- ------------ ---------------
THE SOURCE 1,954,494 February 6, 1996
SCHEDULE 4
OTHER PERMITTED MEANS OF
DISTRIBUTION OR TRANSMISSION
--------------------------------------------
1. interactive proprietary systems (including broadly distributed
computer-based networks) such as AOL, Compuserve, MSN, Earthlink, Mindspring,
Walled Garden, etc.;
2. interactive cable or broadband networks such as WEBTV, @Home, etc. when
used as a means of distribution to and for the advanced set-top box (e.g.
ST5000) and expressly excluding traditional non-interactive programs such as
those currently distributed on broadcast TV, analog cable networks like HBO,
etc.;
3. interactive satellite networks such as Direct TV and/or Direct PC and
expressly excluding traditional non-interactive programs such as those currently
distributed on broadcast TV, analog cable networks like HBO, etc.;
4. "Connected" CDs or DVDs which are Internet dependent to the extent
Internet dependent; and
5. wireless interactive networks and expressly excluding traditional
non-interactive programs such as those currently distributed on broadcast TV,
analog cable networks like HBO, etc.
