Exhibit 10.13
Portions of this exhibit have been omitted pending a determination by the
Securities and Exchange Commission that certain information contained herein
shall be afforded confidential treatment. The omitted portions are indicated
by three asterisks.
Exhibit 10.13
PRODUCT INFORMATION NETWORK VENTURE
AFFILIATE AGREEMENT
THIS AGREEMENT is made as of the 31st day of January, 1995, by and
between PRODUCT INFORMATION NETWORK VENTURE, a Colorado general partnership
("PIN"), and XXX COMMUNICATIONS, INC. ("Affiliate"), whose address is 0000 Xxxx
Xxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000.
IN CONSIDERATION OF THE MUTUAL COVENANTS, STIPULATIONS AND
REPRESENTATIONS CONTAINED HEREIN, THE PARTIES HERETO AGREE AS FOLLOWS:
1. GRANT OF LICENSE
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(a) Subject to the terms and conditions of this Agreement, PIN hereby
grants to Affiliate the non-exclusive license to distribute the
"Product Information Networks" programming service (the "Service")
within the operating area (as hereinafter defined) of any cable or
satellite master antenna television system(s) owned or managed by
Affiliate as listed on the attached Exhibit I, as such list may be
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amended from time to time (the "System(s)") by mutual agreement of PIN
and Affiliate. Affiliate shall give written notice to PIN within
thirty (30) days of the date Affiliate desires to add a System to
Exhibit I. Affiliate shall not delete any System from Exhibit I during
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the term of this Agreement; provided, however, that Affiliate shall
have the right to delete a System, upon prior written notice to PIN,
if Affiliate replaces such System with one or more other Systems
having, in the aggregate, at least the same number of subscribers as
the deleted System. In the event that Affiliate transfers the Systems
subject to this Agreement to another party and does not replace such
Systems with substitute Systems as contemplated by the immediately
preceding sentence, Affiliate shall use its best efforts to cause the
party to which Affiliate has transferred such Systems to assume
Affiliate's obligations under this Agreement with respect to the
transferred Systems, with such assumption to be evidenced by
documentation reasonably acceptable to PIN.
(b) For purposes of this Agreement, the "Operating Area" of any System
shall mean, with respect to a cable television system, the
geographical area where Affiliate is authorized to construct, operate,
manage or maintain a cable television system by appropriate
governmental authority, and with respect to a satellite master antenna
television system, the geographical area where Affiliate is
authorized to construct, operate, manage or maintain a satellite
master antenna television system by agreement with a third party.
2. TERM
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(a) The term of this Agreement shall commence on January 31, 1995, and
terminate five (5) years thereafter. This Agreement shall
automatically renew for successive equal terms unless either party
gives written notice of termination at least forty-five (45) days
prior to the expiration of the then current term.
(b) Except as otherwise provided herein, neither Affiliate nor PIN may
terminate this Agreement except upon sixty (60) days prior written
notice and then only if the other has made a misrepresentation herein
or breaches any of its material obligations hereunder and such
misrepresentation or breach (which shall be specified in such notice)
is not or cannot be cured within sixty (60) days of such notice.
3. CONTENT OF SERVICE
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The Service shall provide programming consisting of multiple direct
response television commercials ("infomercials") generally ranging in
length from 30 seconds to 60 minutes, depending on the requirements of
adequately demonstrating the particular products or services that are
the subjects of such infomercials. PIN shall have the exclusive
authority to determine the content and format of such Service, and the
selection, scheduling, substitution and withdrawal of any program or
advertisement shall remain within the sole discretion of PIN.
Affiliate shall distribute the Service without addition, deletion,
alteration, editing or amendment, including any copyright notices,
credits and similar notices, trademarks or trade names contained
therein.
4. RATES AND PAYMENTS
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(a) On or before the thirtieth (3Oth) day following each month
throughout the term of this Agreement, PIN shall pay to Affiliate the
appropriate rebate of network revenue earned (the "rebate") in the
Operating Area served by each system identified in Exhibit I, and
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calculated in accordance with Exhibit II.
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(b) PIN's failure, for any reason, to send a particular monthly
payment within the time frame specified shall not relieve Affiliate of
its obligation to carry the Network consistent with the terms of this
Agreement.
(c) During the term of this Agreement, each month Affiliate shall
provide to PIN a true and complete monthly report, signed by the chief
financial officer of Affiliate or his/her authorized designee, in a
form satisfactory to PIN, specifying
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for each System the total number of hours the Network was carried each
day of that month and the number of channels on which the Network was
viewed. In addition, Affiliate will provide PIN a monthly report of
the specific dayparts of each day during which the Network was
broadcast to each System.
(d) PIN shall keep true and accurate books and records directly
relating to this Agreement in accordance with generally accepted
accounting principles. All such books and records shall be maintained
by PIN for a period of three (3) years following the year to which
such books and records relate. Affiliate or its authorized
representatives shall have the right to inspect, audit and copy any
such books and records of Affiliate. Acceptance of any rebate by
Affiliate shall be construed as acceptance of any calculation thereof.
5. DELIVERY AND DISTRIBUTION
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(a) During the term of this Agreement, each of the Systems shall
designate a mininium of one (1) channel on each System for the
carriage of the service prior to the commencement of the delivery of
the Service on such System. Affiliate may change, from time to time,
the channel designation on which the Service is carried. Affiliate
agrees to deliver the Service a minimum of eight hours per day.
(b) PIN will initially transmit the Service by means of domestic
communications satellite GE American Communications C-3, Transponder
20. PIN will transmit a digitally compressed signal on the GE American
Communications C-3 satellite. PIN will notify Affiliate of any change
in satellite not less than ninety (90) days prior to the scheduled
change. In the event of any such change, Affiliate agrees to make such
arrangements as may be necessary to receive the signal from the new
satellite. If PIN delivers the Service to a domestic communications
satellite where it reasonably appears that Affiliate will incur
expenses for additional receiving equipment other than those
associated with receiving a digitally compressed signal that will not
be reimbursed by any third party for a particular System to receive
the Service, then in that event, Affiliate will be entitled to delete
the affected System from Exhibit I of this Agreement within thirty
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(30) days of receiving notice from PIN of the satellite selected for
delivery of the Service, unless PIN agrees to pay its pro rata share
(based on number of signals to be received by any System from such new
satellite) of the costs associated with the additional receiving
equipment. If PIN agrees to pay such costs, then the affected System
may not be deleted from Exhibit I and such System shall continue to
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distribute the Service through the remaining term of this Agreement.
PIN and Affiliate shall each use their respective best efforts to
maintain a high quality of signal transmission for the Service.
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(c) Subject to then existing law, Affiliate shall not itself, and
shall not authorize others to, copy, tape or otherwise reproduce any
part of the Service without PIN's prior written authorization, and
shall take reasonable and practical security measures to prevent the
unauthorized copying or taping by others; provided, however, that
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nothing herein shall prohibit Affiliate from assisting its residential
subscribers in connecting video cassette recorders to record the
Service. PIN shall endeavor to advise Affiliate of copyright,
literary and dramatic rights of, and restrictions and limitations
imposed by, program originators (including but not limited to PIN)
affecting the distribution of the Service, as they exist from time to
time ("Intellectual Property Rights and Requirements"). As between the
parties to this Agreement, Affiliate shall be solely responsible for
compliance with any and all Intellectual Property Rights and
Requirements of which it has been given advance written notice.
Affiliate shall not distribute or exhibit, and shall not authorize,
license or permit the distribution or exhibition of, the Service by
any means or device, whether now known or hereafter devised, other
than through the Systems now or hereafter listed in Exhibit I hereto
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and in accordance with the terms of this Agreement.
6. PROMOTION AND RESEARCH
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(a) Affiliate shall use reasonable efforts to promote, market and sell
the Service to Subscribers and to the general public within the
Operating Area of each System. Advertising, promotional, marketing
and/or sales materials concerning the Service which are provided to
Affiliate by PIN shall be used without any alteration, deletion,
addition or any other change, unless such changes are approved by PIN
prior to use by Affiliate.
(b) At PIN's request, Affiliate shall provide PIN with all available
data regarding the marketing and promotion of the Service by
Affiliate. Subject to applicable federal, state and local law
(including the franchises, if any, pursuant to which the Systems are
operated), Affiliate also agrees to render such other assistance to
PIN as PIN may request and which Affiliate may reasonably provide in
connection with any marketing test, survey, poll or other research
which PIN may undertake in connection with the Service. PIN shall
treat as confidential any names and addresses of Subscribers which PIN
receives from Affiliate, and shall not utilize any such names or
addresses except in connection with such research.
7. NOTICES
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All notices, statements and other communications given hereunder shall
be in writing and shall be delivered by facsimile transmission,
telegraph, personal delivery, certified mail, return receipt
requested, or by next day express delivery, addressed, if to PIN at
0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attn: President,
Product Information Network Venture (Fax: 000-000-0000),
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with a copy to the Legal Department and, if to Affiliate, at its
address set forth herein or by facsimile at (000) 000-0000. The date
of such facsimile transmission, telegraphing or personal delivery or
the next day if by express delivery, or the date three (3) days after
mailing, shall be deemed the date on which such notice is given and
effective.
8. TRADEMARKS
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All right, title and interest in and to the Service, and all
materials, ideas, formats and concepts, computer software or other
rights of whatever nature related thereto shall remain the property of
PIN. Further, Affiliate acknowledges and agrees that all names, logos,
marks, copyright notices or designations utilized by PIN in connection
with the Service (the "Marks") are the sole and exclusive property of
PIN and/or its affiliates, and no rights or ownership are intended to
be or shall be transferred to Affiliate. Affiliate's use of the Marks
shall be limited to the advertising and promotion of its carriage of
the Service over the Systems pursuant to this Agreement. PIN shall
provide Affiliate with samples of the Marks which Affiliate shall use
in their entirety (including all service xxxx and trademark notices)
whenever the Marks are used by Affiliate.
9. REPRESENTATIONS AND INDEMNIFICATION
-----------------------------------
(a) PIN represents and warrants to Affiliate that (i) it is a general
partnership duly organized and validly existing under the laws of the
State of Colorado; (ii) PIN has the partnership power and authority to
enter into this Agreement and to fully perform its obligations
hereunder; (iii) PIN is under no contractual or other legal obligation
which in any way interferes with its ability to fully, promptly and
completely perform hereunder; and (iv) nothing contained in the
Service shall violate the civil or property rights, copyrights,
trademark rights or right of privacy or publicity of any person, firm
or corporation, or libel or slander any person, firm or corporation,
except that no representation and warranty is given with respect to
music performance rights.
(b) Affiliate represents and warrants to PIN that (i) Affiliate is a
corporation duly organized and validly existing under the laws of the
State of Delaware; (ii) Affiliate has the corporate power and
authority to enter into this Agreement and to fully perform its
obligations hereunder; (iii) Affiliate's Systems are operating, with
respect to any cable television system, pursuant to valid franchise
agreements, or licenses or other permits duly authorized by proper
local authorities, or with respect to any satellite master antenna
television systems, pursuant to valid agreements with third parties
granting affiliate all necessary rights; and (iv) Affiliate is under
no contractual or other legal obligation which in any way interferes
with its ability to fully, promptly and completely perform hereunder.
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(c) Affiliate and PIN shall each indemnify and forever hold harmless
the other, the other's affiliate companies and their respective
officers, directors, employees and agents from all liabilities,
claims, costs, damages and expenses (including, without limitation,
reasonable counsel fees) arising out of any breach or claimed breach
by it of any representation or any of its obligations pursuant to this
Agreement.
(d) The party entitled to indemnification hereunder (the "Indemnified
Party") shall notify the other party hereto (the "Indemnifying Party")
in writing of the claim or action for which such indemnity allegedly
applies. The Indemnifying Party shall undertake the defense of any
such claim or action and permit the Indemnified Party to participate
therein at the Indemnified Party's own expense. The settlement of any
such claim or action by an Indemnified Party without the Indemnifying
Party's prior written consent shall release the Indemnifying Party
from its obligations hereunder with respect to such claim or action so
settled.
(e) Neither party hereto shall be liable to the other for the failure
to fulfill its obligations hereunder (other than the obligation to
make all payments when due hereunder) to the extent such failure is
caused by or arises out of an act of God, war, strike, riot, labor
dispute, national disaster, technical failure (including the failure
of all or part of any domestic communications satellite on which the
Service is delivered), or any other reason beyond the control of the
party whose obligation is prevented during the period of such
occurrence.
10. CONFIDENTIALITY
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Neither Affiliate nor PIN shall disclose to any third party (other
than its respective employees, in their capacity as such), any
information with respect to the terms and provisions of this
Agreement, including by way of press release(s), except: (i) to the
extent necessary to comply with law or legal reporting or disclosure
requirements or the valid order of a court of competent jurisdiction,
in which event the party making such disclosure shall so notify the
other as promptly as practicable (and, if possible, prior to making
such disclosure) and shall seek confidential treatment of such
information; (ii) as part of its normal reporting or review procedure
to its parent company, its auditors and its attorneys; provided,
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however, that such parent company, auditors and attorneys agree to be
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bound by the provisions of this Section; (iii) in order to enforce its
rights pursuant to this Agreement; and (iv) if mutually agreed by
Affiliate and PIN in writing.
11. GENERAL
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(a) This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
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(b) Nothing contained herein shall be deemed to create, and the
parties do not intend to create, any relationship of partners or joint
venturers as between Affiliate and PIN. Neither Affiliate nor PIN
shall be or hold itself out as the agent of the other under this
Agreement. The obligations of Affiliate and PIN under this Agreement
are subject to all applicable federal, state and local laws, rules and
regulations including, but not limited to, the Communications Act of
1934, as amended and the rules and regulations of the Federal
Communications Commission.
(c) A waiver by either party of any term or condition of this
Agreement in any one instance shall not be deemed or construed as a
continuing waiver or a waiver of any subsequent breach thereof. This
Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof and supersedes all prior
understandings and agreements, oral or written between the parties
hereto. This Agreement may not be modified except in writing executed
by both parties hereto.
(d) PIN reserves the right to terminate this Agreement at any time and
without cause in connection with the termination of the Service upon
thirty (30) days prior written notice.
(e) This Agreement and all collateral matters shall be construed in
accordance with the internal laws of the State of Colorado applicable
to agreements fully made and to be performed therein, irrespective of
the place of actual execution or performance.
(f) The invalidity or unenforceability of any provision of this
Agreement shall in no way affect the validity or enforceability of any
other provision of this Agreement.
(g) There is not an adequate remedy at law for a breach by Affiliate
of this Agreement, and PIN will suffer irreparable harm as a result of
such a breach. Therefore, if a breach or threatened breach of this
Agreement by Affiliate occurs, in addition to any other rights and
remedies it may have, PIN shall be entitled to injunctive relief
restraining Affiliate from doing any act in violation of this
Agreement.
(h) This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the date first set forth above.
PRODUCT INFORMATION NETWORK XXX COMMUNICATIONS, INC.
VENTURE
By: Xxxxx Infomercial Network Ventures, By: /s/ Xxxx X. Xxxxx
Inc., General Partner -----------------------------
Name: Xxxx X. Xxxxx
Title: Senior Vice President
By: /s/ Xxxxxxx X. Xxxxxx
____________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
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EXHIBIT 1
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Peak-Time Carriage*
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Franchise Area Served
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by Each System No. of Subscribers**
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*** ***
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* Peak-time is defined as 8 a.m.-12 midnight.
** Subscriber counts as of November 1994 EOM.
*** The parties acknowledge that the carriage of the Service on the *** system
initially will be for 6 hours between 8:00 a.m. and 12:00 midnight, rather than
the minimum of 8 hours contemplated under Section 5(a) of this Agreement. In
accordance with Section 8.3b of the Partnership Agreement of Product Information
Network Venture, dated January 31, 1995, by and between Xxxxx Infomercial
Network Ventures, Inc. and Cox Consumer Information Network, Inc. (the
"Partnership Agreement"), during the 270 day period after the date of the
Partnership Agreement, Cox shall either (i) cause the *** system to expand
carriage to 8 hours during the time period between 8:00 a.m. and 12:00 midnight
or (ii) add another system (or systems) to this Exhibit I with a sufficient
number of subscribers (as defined in Section 8.3 of the Partnership Agreement)
so as to bring Cox into full compliance with the requirements of such Section
8.3.
EXHIBIT II
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AFFILIATE REBATE
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Calculated based upon cable distribution revenue
(gross Network revenue, less commissions and bad debt generated in the Operating
Areas identified in Exhibit I)
Rebate Percentage 50%*
* Such rebate percentage may be changed from time to time to reflect the rebate
percentage being generally made available by PIN to operators distributing the
Service on substantially the same terms and to substantially the same number of
subscribers as Affiliate; provided, however, that in no event shall the rebate
percentage be less than 50%.
