Exhibit 10.1
AFFILIATION AGREEMENT
This AFFILIATION AGREEMENT (this "Agreement") is entered into as of this
10th day of November 1997 between JAMtv Corporation, a Delaware corporation
("JAMtv"), and Straight Arrow Publishers Company, L.P., a Delaware limited
partnership ("Xxxxxx Media").
RECITALS:
X. Xxxxxx Media and JAMtv desire to enter into the agreements
described herein providing for the integration of the Rolling Stone Content
(including certain content of ROLLING STONE magazine and the Rolling Stone
Online website at the Rolling Stone URL) into the JAMtv Music Network to create
the Rolling Stone Network. 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 Affiliation Agreements:
(i) JAMtv and Xxxxxx Media will commence and consummate the
integration of Rolling Stone Online into the JAMtv Music
Network in accordance with the Launch Schedule to create
the Rolling Stone Network;
(ii) JAMtv will provide the JAMtv Hosting Services and present
the JAMtv Content and the Rolling Stone Content on the
Rolling Stone Network;
(iii) Xxxxxx Media will deliver the Rolling Stone Content to
JAMtv, grant or cause the grant of the Xxxxxx Media
Licenses to JAMtv, and pay certain merchandising
commissions to JAMtv;
(iv) Xxxxxx Media will provide certain advertising and promotion
services and opportunities to JAMtv in connection with
ROLLING STONE magazine, as well as access to certain
promotional programs, as appropriate.
(v) JAMtv will be responsible for paying the License Fees and
certain advertising commissions to Xxxxxx Media and for
delivering a Warrant to Xxxxxx Media 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
Rolling Stone URL and the JAMtv URL will be integrated into
and/or will point to the Rolling Stone Network.
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 Xxxxxx Media 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. All of the Affiliation Agreements referenced below are of even
date herewith unless otherwise expressly dated below.
"Affiliation Agreements" means, collectively, this
Agreement, the Escrow Agreement and the Warrant.
"America Online" means America Online, Inc., together with
its successors, assigns, and affiliates.
"AOL Rolling Stone Site" means the online site with America
Online which features certain exclusive Rolling Stone Content and
other non-exclusive Rolling Stone Content (such as .WAV files of
record reviews) and uses certain of the Rolling Stone Trademarks.
"Archival Rolling Stone Content" means the archival and
historical Rolling Stone Content or derivatives thereof which are
or will be digitized, formatted, modified, recorded, or otherwise
manipulated or stored by JAMtv to render such Rolling Stone
Content suitable for use with the Rolling Stone Network 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,
as specified in Section 19, or under one of the other Affiliation
Agreements.
"Escrow Agreement" means that certain Escrow Agreement
among JAMtv, Xxxxxx Media, and American National Bank and Trust
Company of Chicago, in the form attached hereto as Exhibit A.
"Escrow License Fees" means the License Fees subject to
deposit under the Escrow Agreement in accordance with paragraph
(d) of Section 9.
"First Payment Date" means the date of the first Scheduled
License Fee payment payable hereunder in accordance with paragraph
(a) of Section 9.
"Initial Term" means the initial three (3) year term of
this Agreement
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specified in paragraph (a) of Section 18.
"Interactive Network" means the Internet, the World Wide
Web and online services (E.G., CompuServe, Prodigy, Microsoft
Network, and Snap), accessed through any interactive electronic
means of distribution or transmission now or hereafter known,
including without limitation computer networks, cable networks,
fiber optic networks, satellite networks, and wireless interactive
networks; and Internet-dependent or enabled CDs, CD-ROMs and DVDs,
the principal purpose of which is obtaining, supplementing and
updating information and multimedia assets that are being provided
online.
"JAMtv Content" means (exclusive of JAMtv's rights in the
Rolling Stone Content) 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 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) all rights under copyright 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, and
including, without limitation, such content described on SCHEDULE
1 hereto.
"JAMtv Hosting Services" means the services provided by
JAMtv in accordance with Section 2.
"JAMtv Music Network" means the interactive multimedia site
on the Interactive Network currently hosted by JAMtv at the JAMtv
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 Rolling
Stone Content pursuant hereto), together with any affiliated radio
station
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sites and participating venue sites on the Interactive Network.
"JAMtv URL" means the uniform resource locator
'xxxx://xxx.xxxxx.xxx' and any and all extensions thereof.
"Launch Date" means the completion date of the initial
integration of the JAMtv Music Network and Rolling Stone Online
into the Rolling Stone Network, as mutually accepted by JAMtv and
Xxxxxx Media.
"Launch Schedule" means the tasks to be performed by JAMtv
and Xxxxxx Media to commence and consummate the integration of
Rolling Stone Online, the Rolling Stone Trademarks, and the
Rolling Stone Content into the JAMtv Music Network to create the
Rolling Stone Network 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 Scheduled License Fees and the
Trigger License Fee.
"Microsoft Button" means the Interactive Network enabled
link from Microsoft Corporation's Internet Explorer 4.0 (and later
versions, when available), which presently points to the Rolling
Stone Online site maintained by Xxxxxx Media at the Rolling Stone
URL and which shall (in accordance with paragraph (c) of Section
8) point to the Rolling Stone Network from and after the Launch
Date.
"MusicNet" means a prior joint venture of Xxxxxx Media
(which is no longer operating or in existence, and is commonly
referred to by Xxxxxx Media as >MusicNet') involving Rolling Stone
Content, including specifically recorded interviews with various
artists (which interviews are the property of Xxxxxx Media but not
currently in its possession).
"Net Revenue" means aggregate gross invoice amounts minus
standard discounts and actual returns.
"Network Icon" means a printed icon or logo of type, style,
and design to be mutually agreed upon between the parties for
placement at certain designated locations in ROLLING STONE
magazine which will refer to related supplementary materials and
multimedia assets available on the Rolling Stone Network in
accordance with Section 8.
"Proprietary Rights" means any copyright, trademark, trade
name, trade dress, service xxxx, domain name, invention,
discovery, patent, patent applications, trade secret, rights of
publicity, and any other proprietary interests, including but not
limited to rights in HTML and/or VRML code, CGI and/or Perl
scripts, JavaScript
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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 $15,000,000.
"Qualified Private Offering" means a private offering of
equity securities of JAMtv which shall be consummated where the
aggregate net proceeds to JAMtv from the offering of such
securities are at least $15,000,000.
"Renewal Term" means the subsequent five (5) year renewal
term or any other renewal term of this Agreement specified in
paragraph (b) of Section 18.
"Rolling Stone Content" means the content of Xxxxxx Media
described on SCHEDULE 2 hereto.
"Rolling Stone Merchandise" means merchandise (including
without limitation books, magazine back issues, compact disks, and
clothing) incorporating, embodying or displaying Rolling Stone
Content or Rolling Stone Trademarks.
"Rolling Stone Network" means JAMtv's interactive
multimedia site(s) available on the Interactive Network (including
without limitation any one or more alternatively named networks
and/or sites available on the Interactive Network) resulting from
the integration of Rolling Stone Online into the JAMtv Music
Network pursuant hereto, as updated, modified, or supplemented
from time to time.
"Rolling Stone Online" means the World Wide Website hosted
by Xxxxxx Media before the Launch Date at the Rolling Stone URL
for Rolling Stone Content and on which JAMtv shall after the
Launch Date, pursuant hereto, place, broadcast, download,
transmit, or distribute Rolling Stone Content (and JAMtv Content
pursuant hereto).
"Rolling Stone Trademarks" means the trademarks, service
marks and logos listed on SCHEDULE 3 hereto, and the trade dress
of ROLLING STONE magazine.
"Rolling Stone URL" means the uniform resource locator
xxxx://xxx.xxxxxxxxxxxx.xxx' and any and all extensions thereof.
"Scheduled License Fees" means the license fees payable by
JAMtv in accordance with paragraphs (a), (b), (c), (d) and (e) of
Section 9.
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"Term" means the Initial Term or any Renewal Term.
"Third Party Restrictions" means the restrictions imposed
by third parties on Xxxxxx Media's rights in Rolling Stone Content
provided by third parties, as such restrictions are more
particularly described in paragraph (b) of Section 5.
"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.
"Trigger License Fee" means the license fee payable by
JAMtv in accordance with paragraph (f) of Section 9.
"Warrant" means that certain Warrant, issued by JAMtv to
Xxxxxx Media, in the form attached hereto as Exhibit B.
"Xxxxxx Media Licenses" means the licenses and rights
granted to JAMtv pursuant to this Agreement.
2. JAMTV HOSTING SERVICES. JAMtv will install and host, at no cost
to Xxxxxx Media, the Rolling Stone Online site as redesigned and incorporated
into the Rolling Stone Network on its servers in Chicago (or elsewhere) and use
its best efforts to provide at all times commercially reasonable access at
competitive speeds to the Rolling Stone Network for a reasonable number
(expected to increase significantly over time) of simultaneous audio, video and
database users located anywhere on the Internet. In accordance therewith, JAMtv
will: (a) migrate and integrate Rolling Stone Online and other Rolling Stone
Content (including, without limitation, the Rolling Stone Content on the AOL
Rolling Stone Site which is not exclusively licensed to America Online) into the
JAMtv Music Network to create the Rolling Stone Network; (b) digitize and
integrate existing and future Rolling Stone Content (including, without
limitation, the Rolling Stone Content on the AOL Rolling Stone Site which is not
exclusively licensed to America Online and the Archival Rolling Stone Content)
as it deems appropriate for use on the Rolling Stone Network; (c) maintain,
support and further develop the Rolling Stone Network, including without
limitation developing and acquiring new JAMtv programming, acquiring and
maintaining such technological advances as are necessary to develop and maintain
a competitive advantage in the field of music and related networks on the
Interactive Network and consistent with the quality of the premiere music
network on the Interactive Network; and (d) promote, distribute, and offer to
sell Rolling Stone Merchandise on the Rolling Stone Network. JAMtv may, at any
time, in its sole discretion after the Launch Date, change, expand, alter or
redesignate the physical server(s) for the Rolling Stone Network (and associated
servers for Rolling Stone Online, if any, and the JAMtv Music Network) 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
Rolling Stone Network. The web site constituting the home page of the Rolling
Stone Network shall be called the "Rolling Stone Network," unless the parties
agree
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otherwise. JAMtv will also migrate, maintain and support, but not provide
any content for, Xxxxxx Media's US magazine, MEN'S JOURNAL and CEASE FIRE Web
sites at their respective URLs; provided that, Xxxxxx Media will provide
fractional page advertisements to JAMtv a minimum of four times per year in each
of US magazine (one-third or one-half page ads) and MEN'S JOURNAL (one-quarter
or one-half page ads), the specific issues and placement to be determined in
Xxxxxx Media's sole discretion.
3. JAMTV CONTENT. In accordance with and subject to the terms more
particularly described on SCHEDULE 1 attached hereto, JAMtv will make the JAMtv
Content available to the Rolling Stone Network.
4. ROLLING STONE CONTENT. In accordance with and subject to the
following terms and the terms more particularly described on SCHEDULE 2 attached
hereto, Xxxxxx Media will develop, create, and acquire, and make available to
JAMtv, to the extent not prohibited by Third Party Restrictions, the Rolling
Stone Content at no cost to JAMtv other than as expressly provided in this
Agreement, provided Xxxxxx Media possesses the necessary Proprietary Rights
thereto.
(a) ACCESS AND DELIVERY. Xxxxxx Media shall provide
JAMtv, at reasonable times and from time to time, access to the
facilities where Rolling Stone Content is or may be stored in
order to access, copy, duplicate, digitize, retrieve, and utilize
the Rolling Stone Content. Xxxxxx Media 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 Rolling Stone Content or
transmission thereof by electronic, satellite, Internet, or
telecommunications means to JAMtv. JAMtv will have access to such
new Rolling Stone Content to be published in ROLLING STONE
magazine on or before the on sale date which is included in the
official ROLLING STONE publishing schedule for the issue of
ROLLING STONE magazine in which such Rolling Stone Content is to
appear. Xxxxxx Media and JAMtv will provide to each other, at no
cost to the other, access to and appropriate copies of statistics,
charts, lists, sales figures, and other data related to activities
on the Rolling Stone Network which each of them may obtain,
purchase, develop or otherwise possess.
(b) FORM. Xxxxxx Media will provide JAMtv with
(1) electronic, CD, or digital copies of Rolling Stone Content in
server ready format (except for Archival Rolling Stone Content
more than five years old 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 Rolling Stone Content.
(c) ACQUISITION AND CREATION OF ROLLING STONE CONTENT.
To the extent consistent with Xxxxxx Media's agreements with
contributors, writers, photographers, promoters, artists,
musicians, and other originators, creators, owners,
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and licensors of Rolling Stone Content, Xxxxxx Media will in good faith
develop, create, and acquire additional Rolling Stone Content upon terms
consistent with the Xxxxxx Media License granted hereunder.
Xxxxxx Media will in good faith use reasonable efforts to acquire
such incremental or incidental rights necessary to use on the
Rolling Stone Network, Rolling Stone Content to which it does not
otherwise have the necessary Proprietary Rights sufficient to
permit such use, whenever an opportunity to acquire such rights
arises by virtue of any contract negotiations or discussions
between Xxxxxx Media and any originator, creator, owner, or
licensor (or any agent or manager thereof) of rights covered by
the definition of Rolling Stone Content (including without
limitation such rights relating to any literary, artistic, or
photographic contribution, interview, live performance, or studio
session); provided that the incremental reasonable out-of-pocket
costs associated therewith that Xxxxxx Media would not otherwise
incur in the ordinary course of business for ROLLING STONE
magazine or for the AOL Rolling Stone Site will be promptly
reimbursed by JAMtv (provided that JAMtv has agreed in writing to
such costs prior to their being incurred). Xxxxxx Media shall
notify JAMtv upon Xxxxxx Media's acquisition of any significant
new Rolling Stone Content out of the ordinary course of business
and, provided it possesses the necessary Proprietary Rights
sufficient to permit use thereof on the Rolling Stone Network,
will make all such Rolling Stone Content readily available to
JAMtv in accordance with paragraph (a) above. Xxxxxx Media will
also use reasonable efforts to 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 Rolling Stone Network. Xxxxxx Media and the Rolling Stone
Online staff will assist JAMtv in developing new sections, areas,
features, and other elements for the Rolling Stone Network
including, without limitation, weekly events, trivia and
photography games and quizzes, personals and polls online,
celebrity chats, music critics round tables, and gossip columns.
In addition, Xxxxxx Media and the Rolling Stone Online staff will
assist JAMtv in contacting and developing, with major third party
Internet businesses (such as Yahoo, Excite, Infoseek, Microsoft
Corporation, America Online, and Netscape), new brand
opportunities, products and services for such items as branded
Rolling Stone Network webcasts for Yahoo, branded Rolling Stone
Network interviews, and branded Rolling Stone Network online
celebrity chats.
(d) ROLLING STONE STAFFING. Xxxxxx Media will maintain a
sufficient Rolling Stone Online staff throughout the Term to meet
its content production responsibilities under this Agreement.
Xxxxxx Media, at JAMtv's expense (other than two trips per year at
Xxxxxx Media's expense, staff to be sent at Xxxxxx Media's
discretion) will direct appropriate senior members of the Rolling
Stone Online 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 Rolling Stone Network and will
provide one or more work spaces in the Xxxxxx Media offices in New
York to be used from time to time by JAMtv personnel in connection
with their visits to New
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York for similar coordination and planning meetings, which work spaces
need not be the same on each visit.
5. CONTENT LICENSE.
(a) GRANT. Subject to the Third Party Restrictions,
Xxxxxx Media hereby grants to JAMtv an exclusive (as defined in
Section 12 hereof) worldwide license to and right to use and
exploit the Rolling Stone Content (including without limitation
through the reproduction, translation, printing, adaptation,
modification, reformatting, publishing, alteration, digitizing,
capturing, editing, cropping, combination, synchronization,
exhibition, performance, display, and transmission thereof in any
form and through any medium now known or later developed) in
connection with the Rolling Stone Network and the design,
operation, distribution, display, transmission, marketing,
advertising, and promotion thereof. Notwithstanding the
foregoing, JAMtv shall not sublicense any Rolling Stone Content to
any entity reasonably deemed by Xxxxxx Media to be a competitor of
Xxxxxx Media.
(b) THIRD PARTY RESTRICTIONS. JAMtv acknowledges that
Xxxxxx Media does not possess all of the Proprietary Rights
necessary to provide and license certain Rolling Stone Content for
use on the Rolling Stone Network because certain Rolling Stone
Content is subject to Third Party Restrictions. Xxxxxx Media
will, upon JAMtv's request, provide JAMtv with copies of
documentation describing specific Third Party Restrictions or will
disclose to JAMtv the nature, duration, scope, and other material
terms of such Third Party Restrictions in reasonable detail.
Xxxxxx Media shall have no obligation to obtain all necessary
rights to use such Rolling Stone Content in connection with the
Rolling Stone Network unless it does so in the ordinary course of
business in connection with ROLLING STONE magazine or for the AOL
Rolling Stone Site; provided that Xxxxxx Media will in good faith
use reasonable efforts to obtain such rights if JAMtv agrees in
advance in writing to pay the reasonable out-of-pocket costs of
Xxxxxx Media associated therewith which Xxxxxx Media would not
otherwise have incurred in the ordinary course of business for
ROLLING STONE magazine or for the AOL Rolling Stone Site.
(c) FIRST OFFER TO JAMTV. If Xxxxxx Media is unable,
despite its reasonable efforts, to acquire or license the rights
covered by the definition of Rolling Stone Content pursuant to the
preceding paragraphs, Xxxxxx Media will reasonably cooperate with
JAMtv to assist JAMtv in acquiring or licensing such rights.
6. TRADEMARK LICENSE.
(a) GRANT. Subject to the terms and conditions of this
Agreement, Xxxxxx Media hereby grants to JAMtv a right and license
to use the Rolling Stone
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Trademarks and the Rolling Stone URL solely in connection with the
Rolling Stone Network and the design, operation, distribution, display,
transmission, marketing, advertising and promotion thereof.
(b) QUALITY CONTROL. Xxxxxx Media shall have the right
to exercise quality control over the Rolling Stone Network and
JAMtv's use of the Rolling Stone Trademarks to that degree
necessary, in the reasonable opinion of Xxxxxx Media, to maintain
the validity and enforceability of the Rolling Stone Trademarks
and to protect the goodwill associated therewith. JAMtv shall, in
its design, operation, distribution, display, transmission,
marketing, advertising and promotion of the Rolling Stone Network,
adhere to a level of quality at least as high as that established
by Xxxxxx Media in connection with Rolling Stone Online prior to
the Launch Date, and to such reasonable standards and
specifications as may be provided by Xxxxxx Media to JAMtv from
time to time.
(c) TRADEMARK USAGE. JAMtv shall use the Rolling Stone
Trademarks in accordance with sound trademark and trade name usage
principles and in compliance with all applicable laws and
regulations of the United States, including without limitation all
laws and regulations relating to the maintenance of the validity
and enforceability of the Rolling Stone Trademarks; and JAMtv
shall not use the Rolling Stone Trademarks in any manner which
might tarnish, disparage, or reflect adversely on Xxxxxx Media or
the Rolling Stone Trademarks. JAMtv shall use, in connection with
the Rolling Stone Trademarks, all legends, notices and markings as
required by law. JAMtv shall not materially alter the appearance
of the Rolling Stone Trademarks on the Rolling Stone Network or in
any advertising, marketing, distribution, or sales materials, or
any other publicly distributed materials.
(d) CONFORMANCE WITH STANDARDS. JAMtv shall, upon the
request of Xxxxxx Media, submit to Xxxxxx Media representative
samples of all publicly distributed advertising materials using
the Rolling Stone Trademarks prior to their initial distribution.
In the event that Xxxxxx Media finds that such advertising
materials, or any materials included on the Rolling Stone Network,
materially deviate from the standards and specifications provided
to JAMtv by Xxxxxx Media or from the standards of quality
associated with Rolling Stone Online prior to the Launch Date, or
that, in the reasonable opinion of Xxxxxx Media, such materials
misuse the Rolling Stone Trademarks, JAMtv shall, upon notice from
Xxxxxx Media, immediately, and no later than ten (10) days after
receipt of Xxxxxx Media's notice, take all measures reasonably
necessary to correct the deviations or misrepresentation in, or
misuse of, the respective items; provided, however, in the event
Xxxxxx Media reasonably determines that the defect poses a threat
to the validity of the Rolling Stone Trademarks or to the goodwill
associated therewith, JAMtv shall, upon notice from Xxxxxx Media,
immediately cease and desist all distribution, sale and marketing
of the nonconforming items, and shall immediately remove such
nonconforming items
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from the Rolling Stone Network and/or order its distributors and
retailers to cease shipment and/or sale of such nonconforming items.
If JAMtv fails to take such steps, Xxxxxx Media shall have the right
to terminate this Agreement pursuant to the terms of Section 20.
(e) COOPERATION. JAMtv shall comply with such other
reasonable requests as are made by Xxxxxx Media to enable Xxxxxx
Media to assure the quality of any materials on the Rolling Stone
Network bearing any Rolling Stone Trademark. JAMtv agrees that it
shall cooperate with Xxxxxx Media to avoid confusion or conflict
arising out of Xxxxxx Media's or any other licensee's simultaneous
use of the Rolling Stone Trademarks in connection with other
products or services outside of the Interactive Network (but
including the AOL Rolling Stone Site), and to resolve any such
conflicts to the satisfaction of Xxxxxx Media.
7. ALLOCATION OF CREATIVE AND EDITORIAL CONTROL.
(a) XXXXXX MEDIA. Xxxxxx Media shall have creative and
editorial control over all content of the Rolling Stone Network
(other than the JAMtv Content) which shall be subject to the final
review and edit of the editorial management of Rolling Stone
Online. Without limiting the foregoing, the initial layout and
design of the integrated Rolling Stone Network site (as of the
Launch Date) and any subsequent changes thereto shall be subject
to the artistic approval of Xxxxxx Media which shall not be unduly
delayed or unreasonably withheld.
(b) JAMTV. Except as set forth in paragraph (a) above,
JAMtv shall have editorial and creative control over the JAMtv
Content contained in the Rolling Stone Network, subject to
paragraph (d) of Section 6. JAMtv may use the JAMtv trademarks on
or in connection with the Rolling Stone Network solely to identify
JAMtv as "producer," "distributor," "syndicator" or "host" of the
Rolling Stone Network and only as approved in advance by Xxxxxx
Media, such approval not to be unreasonably withheld. JAMtv may,
in its sole discretion, at any time, add, modify, change, delete,
substitute or reschedule in whole or in part from time to time any
and all aspects of the JAMtv Content, subject to paragraph (d) of
Section 6.
8. PROMOTION AND ADVERTISING.
(a) In accordance with and in consideration of the terms
more particularly described on SCHEDULE 4 attached hereto, Xxxxxx
Media will in good faith promote the Rolling Stone Network, and
the programming contained thereon. Such promotion duties shall
include, without limitation, the preparation and inclusion in
every issue of ROLLING STONE magazine of an editorial column to be
written and edited by Xxxxxx Media, as more fully described on
SCHEDULE 4 attached hereto. Xxxxxx Media will produce advertising
copy for any commercial messages as Xxxxxx Media
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uses to promote the foregoing. Xxxxxx Media shall submit examples of
all proposed advertisements and other promotional materials for the
Rolling Stone Network to JAMtv for inspection, provided that Xxxxxx
Media will have the final right of approval with respect thereto.
(b) Xxxxxx Media shall immediately prior to the Launch
Date undertake all steps necessary to assure that the Microsoft
Button and the PointCast College Network at all times after the
Launch Date permit all users thereof to seamlessly link to the
Rolling Stone Network. JAMtv shall be responsible for all
maintenance and support necessary to maintain the Microsoft Button
and PointCast College Network links, respectively, to the Rolling
Stone Network.
(c) Xxxxxx Media shall place an explanation of the
Network Icon and examples of the Network Icon in each issue of
ROLLING STONE magazine, in a manner designed to encourage readers
to access the Rolling Stone Network. A Network Icon shall be
placed at such locations in the magazine as Xxxxxx Media elects in
its sole discretion, provided that Xxxxxx Media shall place a
Network Icon at the end of the music reviews section.
(d) JAMtv and Xxxxxx Media shall cooperate in good faith
to jointly develop promotions in the field, as Xxxxxx Media deems
appropriate, on the Rolling Stone Network, in ROLLING STONE
magazine, and in other publications of Xxxxxx Media, which are
designed to increase the visibility, prominence, awareness and
popularity of the Rolling Stone Network so as to increase traffic
and attract advertisers to the Rolling Stone Network.
(e) JAMtv and Xxxxxx Media 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.
(f) The services provided by the Rolling Stone Online
staff in connection with the advertising and promotional services
of Xxxxxx Media described in the preceding paragraphs of this
Section shall be without charge to JAMtv (except as expressly
described on SCHEDULE 4 hereto); provided that JAMtv shall bear
any out-of-pocket costs associated therewith and, to the extent
JAMtv requires advertising and promotional services of Xxxxxx
Media beyond the scope of the services described in the preceding
paragraphs, Xxxxxx Media will provide advertising to JAMtv at a
net rate of twenty percent (20%) below the published ROLLING STONE
rate card then in effect, in accordance with the terms and
conditions thereof.
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(g) JAMtv will use reasonable efforts to promote the
Rolling Stone Network, including conducting advertising campaigns
in various media at its own expense.
9. LICENSE FEES. In consideration for the Xxxxxx Media Licenses and
the obligations of Xxxxxx Media under this Agreement and the other Affiliation
Agreements, provided no Default by Xxxxxx Media exists, JAMtv will pay the
License Fees to Xxxxxx Media as follows.
(a) YEAR ONE. JAMtv will pay $1,000,000 to Xxxxxx Media
for the one year period commencing on the later of (i) the Launch
Date and (ii) January 6, 1998 and ending on the first anniversary
of such First Payment Date, which shall be payable in four (4)
equal quarterly installments of $250,000 each. The first
installment shall be payable on January 6, 1998, the second
installment shall be payable on April 6, 1998, the third
installment shall be payable on July 6, 1998, and the fourth
installment shall be payable on October 6, 1998.
(b) YEAR TWO. JAMtv will pay $1,000,000 to Xxxxxx Media
for the one year period commencing on the first anniversary of the
First Payment Date and ending on the second anniversary of the
First Payment Date, which shall be payable in four (4) equal
installments of $250,000 each. The first installment shall be
payable on January 6, 1999, the second installment shall be
payable on April 6, 1999, the third installment shall be payable
on July 6, 1999, and the fourth installment shall be payable on
October 6, 1999.
(c) YEAR THREE. JAMtv will pay $1,000,000 to Xxxxxx
Media for the one year period commencing on the second anniversary
of the First Payment Date and ending on the third anniversary of
the First Payment Date, which shall be payable in four (4) equal
installments of $250,000 each. The first installment shall be
payable on January 6, 2000, the second installment shall be
payable on April 6, 2000, the third installment shall be payable
on July 6, 2000, and the fourth installment shall be payable on
October 6, 2000.
(d) ESCROW OF SCHEDULED LICENSE FEES FOR YEARS 1 AND 2.
The Scheduled License Fees described in paragraphs (a) and (b)
above shall be deposited into escrow by JAMtv on the date hereof
and subject to release to Xxxxxx Media in accordance with the
terms and conditions of the Escrow Agreement. Any release of
funds from the Escrow Agreement to Xxxxxx Media or its designees
shall be deemed to be a payment by JAMtv in satisfaction of its
payment obligations under this Agreement.
(e) SCHEDULED LICENSE FEES FOR RENEWAL TERM(S). If
there shall be a first Renewal Term pursuant to Section 18, JAMtv
will pay $1,250,000 to Xxxxxx Media for each one year period
commencing on each anniversary of the First Payment Date and
ending on the next succeeding anniversary of the First Payment
Date, which shall
-13-
be payable in four (4) equal installments of $312,500 each on the
January 6, April 6, July 6, and October 6 dates within such one year
period. If there shall be a second Renewal Term pursuant to Section 18,
JAMtv will pay $1,500,000 to Xxxxxx Media for each one year period
commencing on each anniversary of the First Payment Date and ending on
the next succeeding anniversary of the First Payment Date, which shall
be payable in four (4) equal installments of $375,000 each on the
January 6, April 6, July 6, and October 6 dates within such one
year period.
(f) TRIGGER LICENSE FEE. Upon the first to occur of (i)
a Qualified Private Offering and (ii) a Qualified Public Offering,
JAMtv will pay to Xxxxxx Media, within 30 days after the
completion and closing of the applicable Trigger Event, a one time
Trigger License Fee (in addition to the Scheduled License Fees
payable hereunder but subject to paragraph (f) above) equal to
$1,500,000. No Trigger License Fee shall be payable upon a second
or later occurring Trigger Event, if any.
10. ADVERTISING AND MERCHANDISE REVENUE.
(a) JAMtv shall pay Xxxxxx Media an advertising
commission equal to twenty-five percent (25%) of the Net Revenue
of JAMtv derived from advertisements obtained by, directed by, or
otherwise placed on website pages of the Rolling Stone Network by
or through the direct efforts of Xxxxxx Media, and ten percent
(10%) of the Net Revenue of JAMtv derived from all other
advertisements on the Rolling Stone Network. Up to five percent
(5%) of the available advertising space on the Rolling Stone
Network shall be reserved for Xxxxxx Media's allocation to ROLLING
STONE advertisers and shall not be subject to the foregoing
provision or any payment to JAMtv.
(b) Xxxxxx Media shall pay JAMtv a commission equal to
ten percent (10%) of the Net Revenue derived from the sale of all
Rolling Stone Merchandise through the Rolling Stone Network and a
commission equal to five percent (5%) of the Net Revenue derived
from the sale of all Rolling Stone Merchandise through the
Interactive Network other than through the Rolling Stone Network.
Notwithstanding the foregoing, subscriptions to ROLLING STONE
magazine, including, without limitation, those obtained through a
subscription solicitation button on the Rolling Stone Network
website, shall not be subject to any JAMtv commission.
(c) Xxxxxx Media and JAMtv acknowledge that from time to time,
either or both of the parties will be approached and presented with third
party licensing, promotion, marketing and/or advertising opportunities
which specifically relate to and/or involve other online or Internet
companies, websites, networks or businesses seeking to use Rolling Stone
Content or to gain access to features, functionality, or content of the
Rolling Stone Network for a fee or other consideration, for online or
Internet-related uses. Xxxxxx Media acknowledges that, in accordance
with its exclusivity obligations under Section 12, it is
-14-
prohibited from taking advantage of such third party opportunities
without the written consent of JAMtv. Accordingly, Xxxxxx Media and
JAMtv agree that any and all revenue obtained from any or all such
online or Internet-related transactions to which JAMtv consents shall
be shared evenly by the parties hereto except that the finding or
originating party (JAMtv or Xxxxxx Media as the case may be) shall be
entitled to a fifteen percent (15%) origination commission or finder's
fee off the top of any revenues with the remaining revenues being
shared equally.
11. 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.
12. EXCLUSIVITY. Except for the AOL Rolling Stone Site and any
websites associated with foreign editions of ROLLING STONE, and except as agreed
to by JAMtv pursuant to paragraph (c) of Section 10, JAMtv shall be the
exclusive provider of Rolling Stone Content on the Interactive Network and
Xxxxxx Media shall not, and shall cause each of its affiliates not to, use,
license, grant any right to use, sublicense, or otherwise transfer any right,
title or interest in or to the Rolling Stone Content or any content of ROLLING
STONE magazine 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.
13. PROPRIETARY RIGHTS.
(a) RIGHTS CLEARANCES. Subject to the terms of this
Agreement, Xxxxxx Media shall obtain the necessary rights
clearances and shall be responsible for payment of any license
fees or royalties for such rights clearances, including, without
limitation, copyright or public performance music license fees
(through, for example, ASCAP, BMI or SESAC) for any merchandise or
Rolling Stone Content made available by Xxxxxx Media to JAMtv
pursuant to this Agreement, except as otherwise provided herein.
(b) JAMTV CONTENT. Xxxxxx Media 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. Xxxxxx Media shall not acquire any right,
title, or interest in the Proprietary Rights created or developed
by JAMtv (whether or not incorporating the Rolling Stone Content
or Rolling Stone Trademarks) in connection with this Agreement,
other than as expressly reserved herein. If any JAMtv Content or
segment thereof is provided to Xxxxxx Media 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, Xxxxxx Media 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
-15-
derivative work thereof or any other programs or broadcast material
which may have been transmitted or distributed by JAMtv to Xxxxxx Media,
the Rolling Stone Network or otherwise. Xxxxxx Media 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) ROLLING STONE CONTENT. JAMtv acknowledges that all
right, title and interest in the Rolling Stone Content and other
Proprietary Rights embodied therein are and shall remain in Xxxxxx
Media and its licensors. JAMtv shall not acquire any right,
title, or interest in the Proprietary Rights created or developed
by Xxxxxx Media (whether or not incorporating the JAMtv Content)
in connection with this Agreement, other than as expressly granted
herein. If any Rolling Stone 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 Xxxxxx Media and shall be returned promptly upon termination of
this Agreement, except as otherwise provided herein. Except as
expressly provided in this Agreement, and with the express
understanding that transmission to, access by and syndication of
the content of the Rolling Stone Network to JAMtv-affiliated radio
stations and clubs is expressly authorized hereunder, JAMtv is not
authorized to, shall not, and shall not authorize any access,
transmission, duplication, or any other use whatsoever of any
Rolling Stone Content, any portion thereof, or any derivative work
thereof or any other programs or broadcast material which may have
been transmitted or distributed by Xxxxxx Media to JAMtv, the
Rolling Stone Network or otherwise. JAMtv shall not challenge
Xxxxxx Media's right, title or interest in the Rolling Stone
Content or otherwise interfere with Xxxxxx Media's use thereof,
except as such use may be inconsistent with any exclusive rights
of JAMtv granted pursuant to this Agreement or the other
Affiliation Agreements.
(d) USER DATA. Each party shall be deemed a co-owner of
any data collected from the Rolling Stone Network ("User Data"),
including without limitation any information provided by or
concerning users of the Rolling Stone Network (other than
subscription information obtained by Xxxxxx Media pursuant to
Section 10(b)), and each party shall have the right to use such
User Data only for internal purposes, unless it obtains the
consent of the other party.
(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
-16-
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 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) ROLLING STONE TRADEMARKS. JAMtv acknowledges that
the Rolling Stone Trademarks and all rights therein (with the
exception of those rights expressly granted to JAMtv hereunder)
and the goodwill pertaining thereto belong exclusively to Xxxxxx
Media. JAMtv's use of the Rolling Stone Trademarks shall inure to
the benefit of Xxxxxx Media for all purposes, including without
limitation trademark registration. Without limiting the
generality of the foregoing, JAMtv shall not challenge the
validity of Xxxxxx Media's ownership of any Rolling Stone
Trademark or any registration or application for registration
thereof or contest the fact that JAMtv's rights under this
Agreement are solely those of a licensee, which rights terminate
upon termination of this Agreement.
(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 or offering memoranda, and whenever
required by reason of legal, accounting, or regulatory
requirements; provided that prior to such disclosure the party
whose name is mentioned has not less than seven
-17-
(7) days to review and comment on such disclosure.
14. REGISTRATION AND PROTECTION.
(a) COPYRIGHT REGISTRATION. Except as otherwise
expressly authorized by Xxxxxx Media, all registrations and
applications for registration of copyright in the Rolling Stone
Content shall be in the name of Xxxxxx Media. JAMtv, when
requested by Xxxxxx Media, shall assist and cooperate with Xxxxxx
Media in connection with any such filings at Xxxxxx Media's
expense.
(b) ACTIONS AFFECTING VALIDITY. Xxxxxx Media shall not
take any action, not fail to take any action, and use its best
efforts not to permit any action to be taken by others, which
would in any respect affect the validity or enforcement of the
Xxxxxx Media Licenses or the rights in the Rolling Stone Content
granted to JAMtv herein.
(c) COPYRIGHT NOTICE. JAMtv shall (i) place notices of
copyright in a manner consistent with Xxxxxx Media's placement
thereof on the Rolling Stone Content which is published by JAMtv,
(ii) displaying on one or more screens of any web site operated by
JAMtv a legend reasonably calculated to warn users that such web
site contains proprietary material which may not be copied without
permission, and (iii) display artist attribution or credits as
reasonably requested by Xxxxxx Media on the Rolling Stone Content
which is published by JAMtv.
(d) TRADEMARK REGISTRATION. Xxxxxx Media shall be
responsible for the prosecution and maintenance of trademark
registrations of the Rolling Stone Trademarks. JAMtv shall
cooperate with Xxxxxx Media at Xxxxxx Media's expense, and shall
execute any documents required by Xxxxxx Media and supply Xxxxxx
Media with a reasonable number of specimens to assist Xxxxxx
Media, in the registration, enforcement, or maintenance of any
Rolling Stone Trademark or recordal of JAMtv as a registered user
or licensee. JAMtv agrees not to register, or attempt to
register, any Rolling Stone Trademark or any confusingly similar
xxxx in its own name or any other name, or to use any Rolling
Stone Trademark or any confusingly similar xxxx in commerce other
than as provided herein.
(e) THIRD PARTY INFRINGEMENT. In the event that either
party learns of any infringement, misappropriation or unauthorized
use of (i) any of the Rolling Stone Trademarks in connection with
the Rolling Stone Network or similar products or services, or (ii)
any of the Rolling Stone Content, then the party with such
knowledge shall promptly notify the other party thereof. Xxxxxx
Media shall take such actions as it determines are reasonably
necessary or desirable in its sole discretion. JAMtv shall not
undertake any action without the prior written consent of Xxxxxx
Media, which consent shall not be unreasonably withheld with
respect to any infringement
-18-
or misappropriation of the Rolling Stone Content or the Rolling Stone
Trademarks in connection with the Interactive Network or similar
products or services. Xxxxxx Media shall promptly notify JAMtv as to
whether Xxxxxx Media wishes to prosecute or settle any action with
respect thereto. JAMtv agrees to cooperate with and assist Xxxxxx Media
in taking whatever action Xxxxxx Media determines to be reasonably
necessary or desirable. Xxxxxx Media shall reimburse JAMtv for its
reasonable out-of-pocket attorneys' fees and other costs incurred
in investigating, prosecuting or settling any such claim, suit,
damage or loss.
(f) THIRD PARTY CLAIMS. If any claim is asserted
against either party alleging that any of the Rolling Stone
Content or Rolling Stone Trademarks infringes, misappropriates or
otherwise violates a third party's rights, then the party against
whom such claim was asserted shall promptly notify the other
party. If such claim is asserted against JAMtv, Xxxxxx Media
shall promptly notify JAMtv whether Xxxxxx Media wishes to conduct
a defense or settlement of any such claim on behalf of JAMtv.
Should Xxxxxx Media elect to conduct such a defense or settlement,
Xxxxxx Media shall have sole control of such defense and any
settlement of such claim. JAMtv shall afford Xxxxxx Media every
reasonable assistance in regard to Xxxxxx Media's defense of any
such claim. Should Xxxxxx Media not elect to conduct such a
defense or settlement, JAMtv may elect to conduct its own defense
or settlement, and Xxxxxx Media shall afford JAMtv every
reasonable assistance in regard to JAMtv's defense of any such
claim and Xxxxxx Media shall name itself as a party to such an
action if requested by JAMtv. Xxxxxx Media shall reimburse JAMtv
for its reasonable out-of-pocket attorneys' fees and other costs
incurred in connection with investigating or defending any such
claim, suit, damage or loss.
150 REPRESENTATIONS AND WARRANTIES OF XXXXXX MEDIA.
(a) CORPORATE EXISTENCE AND STANDING. Xxxxxx Media is
duly organized under the laws of the state of 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
Affiliation Agreements to which it is a party.
(b) AUTHORIZATION AND VALIDITY. The execution and
delivery of this Agreement and the other Affiliation Agreements by
Xxxxxx Media have been duly authorized by proper corporate
proceedings, and this Agreement and the other Affiliation
Agreements, upon their execution and delivery, will constitute
legal, valid and binding obligations of Xxxxxx Media, 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.
-19-
(c) NO CONFLICT; APPROVALS. The execution, delivery and
performance of this Agreement and the other Affiliation Agreements
by Xxxxxx Media, the consummation by Xxxxxx Media of the
transactions contemplated therein, and compliance by Xxxxxx Media
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 Xxxxxx Media or its articles of incorporation
or its by-laws or the provisions of any instrument or agreement to
which Xxxxxx Media is a party or is subject, or by which it, or
its property, is bound (including, without limitation, any such
instrument or agreement with America Online or Microsoft
Corporation), or conflict with or constitute a default thereunder;
and the execution, delivery and performance of this Agreement and
the other Affiliation Agreements, the consummation of the
transactions contemplated therein, and compliance with the
provisions thereof, in each case by Xxxxxx Media, 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. Xxxxxx Media represents and
warrants that (i) it has the full power and authority to grant the
Xxxxxx Media 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 Xxxxxx Media's rights in the Rolling Stone Content or
Rolling Stone Trademarks, or that the Rolling Stone Content or
Rolling Stone Trademarks infringe upon the proprietary rights of
any third party, (iii) it has not granted to any other party any
rights to use the Rolling Stone Content or Rolling Stone
Trademarks in connection with the Interactive Network (except for
the AOL Rolling Stone Site and in connection with the Microsoft
Button and the PointCast College 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 xxxx, 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 Rolling Stone Content is not obscene.
160 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 of 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 Affiliation
Agreements to which it is a party.
-20-
(b) AUTHORIZATION AND VALIDITY. The execution and
delivery of this Agreement and the other Affiliation Agreements by
JAMtv have been duly authorized by proper corporate proceedings,
and this Agreement and the other Affiliation 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 Affiliation 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 Affiliation 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 has the full power and authority to provide
the JAMtv Content to the Rolling Stone Network, (ii) 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 that the
JAMtv Content infringes upon the proprietary rights of any third
party, (iii) the use of the JAMtv Content on the Rolling Stone
Network as contemplated hereunder will not now or hereafter in any
manner constitute an infringement or other violation of any
trademark, trade name, service xxxx, 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 (iv) JAMtv Content is not obscene.
(e) FINANCIALS. The unaudited balance sheet of JAMtv as
of October 31, 1997, and a schedule of the capitalization of JAMtv
as of the date hereof are attached hereto as SCHEDULE 5.
170 CONDITIONS PRECEDENT. The obligations of JAMtv and Xxxxxx Media
hereunder shall be subject to the satisfaction of the following conditions
precedent.
(a) JAMTV. JAMtv (i) shall have executed and delivered
to Xxxxxx
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Media: (A) the Escrow Agreement, and (B) the Warrant, and (ii) shall
have deposited the Escrow License Fees in accordance with the Escrow
Agreement; and
(b) XXXXXX MEDIA. Xxxxxx Media shall have executed and
delivered to JAMtv the Escrow Agreement.
180 TERM.
(a) INITIAL TERM. The Initial Term of this Agreement
shall be three (3) years which shall commence on the date hereof
and continue until the third anniversary date hereof, unless
earlier terminated as provided in Section 20.
(b) RENEWAL TERM. If a Trigger Event occurs during the
Initial Term, this Agreement shall continue for a first Renewal
Term of five (5) years which shall commence on the third
anniversary date hereof and continue until the eighth anniversary
date hereof, unless earlier terminated as provided in Section 20.
This Agreement shall be automatically renewed for a second Renewal
Term of five (5) years at the expiration of the eighth year;
provided that, as of that date, JAMtv and/or its parent, successor
or acquirer has successfully completed a Qualified Public Offering
of its stock and has a market capitalization no less than $150
million. This Agreement may thereafter continue for additional
Renewal Terms upon the mutual agreement of the parties hereto.
190 DEFAULT. A Default shall mean the occurrence of any of the
following:
(a) TECHNICAL SUPPORT. If JAMtv fails to maintain the
technical reliability reasonably required to make the Rolling
Stone Network available in all respects on commercially reasonable
terms (excepting regularly scheduled maintenance downtime, network
and other outages not due to the actions or fault of JAMtv, delays
or other problems associated with or due to any failures on the
part of Xxxxxx Media to timely perform any of its obligations
hereunder) and JAMtv shall not have materially improved such
reliability or availability within 30 days after receiving written
notice thereof from Xxxxxx Media; provided, however, that it shall
be deemed a Default if the Rolling Stone Network is "down" or
otherwise unavailable for reasons other than the foregoing
exceptions for a total of more than twenty-four (24) total hours
or twelve (12) consecutive hours in any 60-day period.
(b) PAYMENT DEFAULT. JAMtv fails to pay (whether
directly or through a direction given under the Escrow Agreement)
any License Fee or payment obligation under Section 9 or any
portion thereof required to be paid to Xxxxxx Media hereunder
within 30 days after the date such fee or payment became due
hereunder.
(c) TRADEMARK MISUSE. JAMtv breaches its obligations
with respect to
-22-
the Rolling Stone Trademarks under Section 6 and fails to cure such
breach within 30 days after receiving written notice thereof from Xxxxxx
Media.
(d) CHANGE OF CONTROL. JAMtv (i) is acquired by, or (ii)
transfers or agrees to transfer all or substantially all of its assets,
ownership of a majority of voting securities or other equity interest, or
power to cause the direction of its management and policies to, any
entity (the "Transferee") reasonably deemed by Xxxxxx Media to be a
competitor of Xxxxxx Media, or otherwise unacceptable to Xxxxxx Media.
(e) OTHER DEFAULT BY JAMTV. JAMtv fails to provide any
or all of the JAMtv 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 Xxxxxx Media.
(f) PERFORMANCE DEFAULT BY XXXXXX MEDIA. Xxxxxx Media
fails to provide any or all of the Rolling Stone 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.
(g) INSOLVENCY. (i) Either party admits in writing in
any proceeding its inability to pay its debts generally as they
become due, or makes a general assignment for the benefit of
creditors, (ii) any proceeding is instituted by such party seeking
to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any
substantial part of its property, (iii) there shall be commenced
against such party any case, proceeding or other action of a
nature referred to in clause (ii) which results in the entry of an
order for relief or any adjudication that it is bankrupt or
insolvent or which remains undismissed, undischarged, unstayed or
unbounded for a period of 60 days, or (iv) either party takes any
corporate action to authorize any of the actions set forth in this
paragraph.
200 EFFECT OF DEFAULT.
(a) TERMINATION BY JAMTV. JAMtv may terminate this
Agreement if a Default by Xxxxxx Media occurs, which termination
shall be effective upon 30 days' written notice to Xxxxxx Media
from JAMtv. If this Agreement is terminated by JAMtv for such
Default, JAMtv shall have no further obligation to pay the License
-23-
Fees and any amounts remaining subject to the Escrow Agreement
shall be returned to JAMtv promptly.
(b) TERMINATION BY XXXXXX MEDIA. Xxxxxx Media may
terminate this Agreement if a Default by JAMtv occurs, which
termination shall be effective upon 30 days' written notice to
JAMtv from Xxxxxx Media. If this Agreement is terminated by
Xxxxxx Media for such Default, JAMtv shall have no further
obligation to pay the License Fees other than to pay to Xxxxxx
Media any amounts remaining subject to the Escrow Agreement or, if
no such amounts remain, the next quarterly payment of the License
Fees due pursuant to Section 9; PROVIDED, HOWEVER, that in the
event of a Default pursuant to paragraph (d) of Section 19 in
which the Transferee is a public company, JAMtv shall have no
further obligation to the pay the License Fees and any amounts
remaining subject to the Escrow Agreement shall be returned to
JAMtv promptly.
(c) EFFECT OF TERMINATION. Upon expiration or
termination of this Agreement, the Xxxxxx Media Licenses shall
terminate and JAMtv shall no longer be entitled to receive from
Xxxxxx Media any additional Rolling Stone Content and shall no
longer use any Rolling Stone Content or Rolling Stone Trademarks;
provided, however, that upon expiration or termination by JAMtv,
the parties will negotiate in good faith for a royalty-bearing
license commencing upon termination of the Xxxxxx Media Licenses
to use Archival Rolling Stone Content on such terms and conditions
as may be mutually agreed by the parties. To the extent that the
parties are unable to agree on such a license, JAMtv shall provide
to Xxxxxx Media all materials containing Rolling Stone Content
(including any electronic versions thereof on magnetic or other
storage media).
(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.
210 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.
220 LIMITATION OF LIABILITY; INDEMNIFICATION; INSURANCE.
(a) LIMITATION OF LIABILITY. EXCEPT FOR INDEMNIFICATION
OBLIGATIONS, IF ANY, OF A PARTY FOR INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY RIGHTS PURSUANT TO PARAGRAPH (D) OF SECTIONS
15 AND 16, OR XXXXXX MEDIA'S INDEMNIFICATION OBLIGATIONS, IF ANY,
FOR PRODUCT CLAIMS WITH RESPECT TO THE ROLLING STONE MERCHANDISE
PURSUANT TO PARAGRAPH (C) BELOW, (i) NEITHER
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PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSON OR ENTITY
FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR INDIRECT DAMAGES (INCLUDING
LOSS OF GOOD WILL OR BUSINESS PROFITS), OR EXEMPLARY OR PUNITIVE DAMAGES
AND (ii) NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY
OTHER PERSON OR ENTITY FOR DIRECT DAMAGES IN EXCESS OF THE
AGGREGATE FEES PAID BY THE PARTIES UNDER THIS AGREEMENT. NO
OFFICER, DIRECTOR, MANAGER, MEMBER, OR EMPLOYEE OF 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. (i) 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 GUARANTEE THAT THE
AVAILABILITY THEREOF WILL BE FREE FROM ERRORS IN COMMUNICATIONS OR
TRANSMISSION. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
JAMTV EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A SPECIFIC
PURPOSE. (ii) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
XXXXXX MEDIA EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
SPECIFIC PURPOSE. (iii) EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY ENDORSES, WARRANTS, OR GUARANTEES ANY
PRODUCT OR SERVICE OFFERED THROUGH THE ROLLING STONE NETWORK AND
NEITHER PARTY WILL 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. JAMtv will indemnify Xxxxxx Media,
its officers, directors, managers, employees, agents, and
telecommunications providers against all claims, damages, losses,
costs and expenses (including attorneys' fees) which Xxxxxx Media
may incur as a result of JAMtv's breach of any representation,
warranty, or covenant contained in this Agreement. Xxxxxx Media
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 Xxxxxx Media's breach
of any representation, warranty, or covenant contained in this
Agreement, or any product liability claims made by any party with
respect to the Rolling Stone Merchandise. This paragraph shall
not be in limitation of any other indemnification obligations of
the parties set forth in the other Affiliation Agreements.
(d) INSURANCE. Each of JAMtv and Xxxxxx Media agrees to
maintain comprehensive general liability insurance, including contractual
and product liability insurance in the amount of $5 million per incident
and $5 million umbrella excess coverage.
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230 REPRESENTATION ON BOARD. During the Term, Xxxxxx Media shall have
the right to appoint one member of JAMtv's Board of Directors.
240 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 Xxxxxx Media 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. Each party consents that service of process may be
effected by certified or registered mail, return receipt
requested, to the address set forth below each party's signature
to this Agreement.
(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) ENTIRE AGREEMENT. This Agreement, together with the
other Affiliation Agreements, contain the entire understanding
between JAMtv and Xxxxxx Media 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.
(e) 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.
(f) 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
-26-
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.
(g) 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
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
seven (7) 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.
(h) SECTION HEADINGS. Section and Paragraph headings
used herein are for informational purposes only and shall not
define nor limit the provisions of this Agreement.
(i) SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of JAMtv and its successors
and assignees and Xxxxxx Media and its successors and assignees
permitted hereunder; provided, however, that neither party hereto
shall assign, subcontract or otherwise delegate its obligations
hereunder without the prior written consent of the other party,
which consent shall not be unreasonably withheld.
(j) 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 Xxxxxx Media in connection with the transactions
contemplated by this Agreement other than as expressly
contemplated by Sections 9, 10 and 17 of this Agreement.
-27-
(k) COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each such counterpart shall be an original
instrument, and all such counterparts shall together constitute
the same agreement.
-28-
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Affiliation Agreement as of the day and year first above written.
STRAIGHT ARROW PUBLISHERS COMPANY, L.P.
By: /s/ R. Xxxx Xxxxx
------------------------------------
Name: R. Xxxx Xxxxx
Title: Senior Vice President
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn.: Xxx Xxxxx
Facsimile: (000) 000-0000
JAMTV CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
000 X. XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn.: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
-29-
SCHEDULE 1
JAMTV HOSTING SERVICES AND CONTENT
LAUNCH SCHEDULE
______________________________________________________
JAMTV CONTENT
A series of Internet distributed live music and music events programs
including real time audio and video streaming, online chat and other
functionality, delivered through the "Virtual Venue" section of the JAMtv Music
Network. Archival and biographical multimedia information on artists and bands
including audio, video, photography, links, news, etc. and detailed
discographies relating to each such artist or band. Online stores for books,
CDs, merchandise, etc. as well as access to tour and ticket information from
Ticketmaster and Pollstar. JAMtv agrees to develop new JAMtv Content throughout
the term, as is necessary or desirable to maintain the quality of the Rolling
Stone Network.
LAUNCH SCHEDULE
The initial Launch Schedule for the Rolling Stone Network shall be as
follows:
November 14, 1997 - Site design overall approval
November 21, 1997 - Site technical operation approval
November 28, 1997 - Site contents approval
December 5, 1997 - Site integration completed
December 8, 1997 - Launch Date
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SCHEDULE 2
ROLLING STONE CONTENT
___________________________________
The Rolling Stone Content shall include the following sections, parts,
elements and portions of ROLLING STONE magazine, to the extent that Xxxxxx Media
possesses or acquires the necessary Proprietary Rights therein sufficient for
use on the Rolling Stone Network (except for such Rolling Stone Content which
has been exclusively licensed for the AOL Rolling Stone Site). Xxxxxx Media
will use reasonable efforts to obtain supplemental materials relating to the
Rolling Stone Content, such as outtakes, photos or descriptive materials,
provided that Xxxxxx Media will bear no additional costs therefor, other than as
set forth in the Agreement.
(1) The contents, including photos, created for and contained in the
Random Notes section of Rolling Stone Online or any successor to
such section containing similar types of content, to the extent
that the Random Notes section or any such successor continues to
appear in ROLLING STONE magazine;
(2) Magazine covers from ROLLING STONE magazine;
(3) MusicNet recorded interviews (insofar as such interviews are in
Xxxxxx Media's possession);
(4) Excerpts or selections from the cover stories of ROLLING STONE
magazine, provided on the dates specified in paragraph (a) of
Section 4, in Xxxxxx Media's discretion;
(5) Exclusive feature stories prepared on a regular basis solely for
the Rolling Stone Network by the Rolling Stone Online staff, in
conjunction with the magazine staff, including multimedia
components;
(6) Information contained in the Grapevine and The Industry sections
of ROLLING STONE magazine, and any successors to such sections
containing similar types of content, to the extent that such
sections or successors continue to appear therein, along with new
materials developed by the parties relating to gossip columns and
similar commentaries;
(7) 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 Rolling Stone Online
along with exclusive record reviews and charts prepared and
developed for ROLLING STONE magazine;
(8) Available photography, audio assets, video assets, art,
interviews, transcripts, digital material, images, illustrations,
animations, books, etc. in the possession and control
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of Xxxxxx Media and/or ROLLING STONE magazine which may be used
to create new and/or supplementary or repurposed audio/visual and
multimedia material for the Rolling Stone Network, in Xxxxxx
Media's discretion.
-32-
SCHEDULE 3
ROLLING STONE TRADEMARKS
______________________________________________________
The following trademarks and service marks, and trademarks and service marks
containing or deriving from the following marks:
ROLLING STONE
ROLLINGSTONE
XXXXXXXXXXXX.XXX
XXXXXXX_XXXXX.XXX
ROLLINGSTONE ONLINE
RS ONLINE
RSO
All registrations and applications for registration of the foregoing trademarks
and service marks, including, without limitation the following:
XXXXXXXXXXXX.XXX and Design, U.S. Ser. No. 75-247,880, International Class 42;
ROLL YOUR OWN, U.S. Ser. No. 75-033,911, International Class 42;
ROCK AND ROLL ROAD TRIP, U.S. Ser. No. 75-033,223, International Class 41;
ROLLING STONE, U.S. Reg. No. 1,574,947, International Class 16;
ROLLING STONE (Stylized), U.S. Reg. No. 952,014, International Class 16;
ROLLINGSTONE ONLINE, U.S. Reg. No. 2,028,322, International Class 42;
ROLLINGSTONE (Stylized), U.S. Reg. No. 1,588,810, International Class 16.
-33-
SCHEDULE 4
PROMOTION AND ADVERTISING
___________________________________
For a monthly advertising fee of $90,000/month payable by JAMtv on the
first day of each month of the Term, Xxxxxx Media shall:
(a) produce and include a regular column
of two to three column inches in every
issue of ROLLING STONE magazine about
the Rolling Stone Network which
chronicles the pending events thereon,
encourages readers to visit the
Network sites, and references special
promotions, contests, games, etc.
appearing on the Network;
(b) assist JAMtv in designing and present a full
page ad at least twelve (12) times per year
in ROLLING STONE magazine promoting the
Rolling Stone Network and its events,
provided that such ad shall be produced by
JAMtv at its cost; and
(c) bundle and distribute at least 400,000
Connected CDs per year, promoting the Rolling
Stone Network, in at least four separate
distributions of 100,000 units each to
subscribers of ROLLING STONE magazine,
provided that the cost of providing and
producing such CDs shall be borne by JAMtv.
After the Initial Term, the above-mentioned fee shall be subject to
increase proportional to any increases in the ROLLING STONE magazine rate
card then in effect.
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SCHEDULE 5
JAMTV FINANCIAL STATEMENTS
___________________________________
CAPITALIZATION. The authorized capital stock of JAMtv immediately prior
to the consummation of the transactions contemplated hereby shall consist of:
(i) 2,500,000 shares of Series A Convertible Preferred Stock
("Series A Stock"), of which 1,666,666 shares of Series A-I Convertible
Preferred Stock are outstanding, and of which 200,000 shares of Series
A-II Convertible Preferred Stock are outstanding;
(ii) 400,000 shares of Series B Convertible Preferred Stock
("Series B Stock"), of which 160,000 shares are outstanding;
(iii) 1,600,000 shares of preferred stock, par value $.01 per
share, issuable in series, of which none are outstanding; and
(iv) 8,000,000 shares of Common Stock, of which (A) 1,150,530
shares shall have been validly issued and be outstanding; (B) 2,500,000
shares shall have been duly reserved for issuance upon the conversion of
the Series A Stock, (C) 400,000 shares shall have been duly reserved for
issuance upon conversion of the Series B Stock; and (D) 1,100,000 shares
shall have been duly reserved for issuance upon the exercise of options
granted pursuant to JAMtv's 1997 Stock Option Plan (the "Plan").
Except for options granted under the Plan, commitments in connection with
the issuance by JAMtv of up to an aggregate of 400,000 shares Series B Stock at
a purchase price of $5.00 per share, and a commitment to issue an option to
purchase up to 5,000 shares of Common Stock at an exercise price of $5.00 per
share, there is no existing contract, option, warrant, call or other commitment
or right of any character granted or issued by the Corporation calling for or
relating to the issuance or transfer of shares of capital stock or any other
securities of JAMtv. As of the date hereof, the Company has granted options
under the Plan to acquire in the aggregate 763,660 shares of Common Stock as
follows:
(i) options to acquire up to an aggregate of 287,600 shares at an
exercise price of $1.00 granted to executive officers and employees of
the Company, all of which are currently exercisable;
(ii) an option to acquire up to an aggregate of 103,180 shares at
an exercise price of $3.00 granted to an executive officer which is
currently exercisable;
(iii) options to acquire up to an aggregate of 137,190 shares at
an exercise price of $3.00 granted to executive officers, all of which
become exercisable approximately ten years from the date of grant but
which may be become exercisable earlier in whole or in part on
-35-
or after the effective date of a registration statement (the "Effective
Date") filed in connection with an initial public offering of the
Company (the "IPO") based on a pre-IPO valuation of the Company as set
forth in the stock option agreements with such executive officers;
(iv) options to acquire up to an aggregate of 90,000 shares at an
exercise price of $3.00 granted to executive officers, all of which
become exercisable over a two year period following the date of grant but
which may be become exercisable earlier in whole or in part on or after
the Effective Date of an IPO based on a pre-IPO valuation of the Company
as set forth in the stock option agreements with such executive officers;
(v) options to acquire up to an aggregate of 115,040 shares at an
exercise price of $3.00 granted to employees which become exercisable
over a four year period from the date of grant; and
(vi) options to acquire up to an aggregate of 30,650 shares at an
exercise price of $5.00 granted to employees which become exercisable
over a four year period from the date of grant.
-36-
EXHIBITS
EXHIBIT A ESCROW AGREEMENT
EXHIBIT B WARRANT
-37-
