EXHIBIT 10.11
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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 10.11
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PRODUCT INFORMATION NETWORK VENTURE
AFFILIATE AGREEMENT
(AS AMENDED)
THIS AGREEMENT is made as of the 1st day of October, 1995, as amended
effective April 1, 1997 by and between PRODUCT INFORMATION NETWORK VENTURE, a
Colorado general partnership ("PIN"), and ADELPHIA COMMUNICATIONS CORPORATION
and its affiliates ("Affiliate"), whose address is 0 Xxxx 0xx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxxxxx 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 Network" programming service (the "Service") within the
operating area (as hereinafter defined) of any cable or satellite master
antenna television system(s) owned, managed or controlled by Affiliate
including any member of a co-operative venture between Affiliate and any
operator(s) as listed on the attached Schedule 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 Schedule I.
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Affiliate shall not delete any System from Schedule I during the term of
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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 commercially reasonable 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 October 1, 1995, and
terminate ten (10) years thereafter. This Agreement shall automatically
renew for an additional one (1) year period 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 the 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.
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4. RATES AND PAYMENTS
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(a) On or before the thirtieth (30th) 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 Schedule I, and calculated in
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accordance with Schedule 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. This Agreement may be terminated by Affiliate in the event PIN
fails to pay Affiliate the rebate for a period of 90 days and such breach
is not cured within 30 days after written notice from Affiliate.
(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 mutually
agreed upon by PIN and Adelphia, specifying for each System that such
system is carrying the Service on a 24-hour basis, the number of
subscribers in such system and the channel location.
(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, but not necessarily the amount.
5. DELIVERY AND DISTRIBUTION
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(a) During the term of this Agreement, each of the Systems shall designate
a minimum 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 twenty-
four hours per day.
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Affiliate may at any time suspend the carriage of some or all hours of
carriage of the Service on any System(s) if, and only if, all of the
following conditions apply:
i. Such suspension is done in order to carry a substitute
programming service in satisfaction of regulatory obligations (e.g., to
comply with must-carry, leased access, franchise requirements, etc.), and
Affiliate's designation of the Service for this purpose shall not on an
MSO-wide basis be discriminatory with respect to other programming
services;
ii. In the absence of such a suspension, the System(s) would not have
adequate capacity to carry the substitute programming service;
iii. Such a suspension will end no later than upon the completion of
the rebuild of such System(s) or such date as adequate channel capacity
otherwise becomes available for carriage of both the Service and such
substitute programming; and
iv. Affiliate will use its best efforts to end such suspension and
restore carriage as it existed prior to the suspension as soon as possible.
If the Service is suspended, Affiliate agrees Service will be the first
programming service added to the System as channel capacity becomes
available. In addition, if the System carried another infomercial service
or services similar to the Service, the Affiliate must reasonably apportion
the suspension of all such services.
(b) PIN will initially transmit the Service by means of domestic
communications satellite GE American Communications C-3, Transponder 20.
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 Schedule I of this Agreement within thirty (30) days
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of receiving notice from PIN of the
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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 Schedule 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.
(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 nothing herein shall
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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 Schedule I hereto and in accordance with
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the terms of this Agreement.
6. PROMOTION AND RESEARCH
----------------------
(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) Subject to applicable federal, state and local law (including the
franchises, if any, pursuant to which the Systems are operated), at PIN's
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request, Affiliate shall provide PIN with all available data regarding the
marketing and promotion of the Service by Affiliate and 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 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: 303-799-
1644), with a copy to the Legal Department and, if to Affiliate, at its
address set forth herein, Attn: Director of Programming with a copy to
General Counsel. The date of such 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.
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However, if Affiliate creates its own infomercials which are aired as part
of the Service, all rights, names, logos, marks, copyright notices or
designations used in the infomercial shall remain the property of
Affiliate.
9. REPRESENTATIONS AND INDEMNIFICATION
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(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 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 an expired franchise
agreement if authorized by proper local authorities to continue to provide
cable television services, or licenses or other permits duly authorized by
proper local authorities, if required, 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.
(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
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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 or affiliates, its auditors and its attorneys;
provided, however, that such parent company or affiliates, auditors and
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attorneys agree to be 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.
(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
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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 Commissions.
(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 a 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 may not be an adequate remedy at law for certain breaches by
Affiliate of this Agreement, and PIN may suffer irreparable harm as a
result of such a breach. Therefore, if such 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 seek injunctive relief
against Affiliate.
(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 ADELPHIA COMMUNICATIONS
NETWORK VENTURE CORPORATION
By: Xxxxx Infomercial Network By: /s/ Xxxxxxx X. Xxxxx
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Ventures, Inc., General Name: Xxxxxxx X. Xxxxx
Partner Title: Sr. Dir. of Programming
By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
Title: Vice President
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SCHEDULE I
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At April 1, 1997
SYSTEM FULL-TIME SUBSCRIBERS
***
***
SCHEDULE 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 60%*
* Such rebate percentage may be increased from time-to-time to reflect the
rebate percentage being generally made available by PIN to cable systems which
are owned by, or affiliated with, Cox Consumer Information Networks, Inc.;
Adelphia Communications Corporation or Xxxxx Infomercial Network Venture, Inc.
