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EXHIBIT 10.6
NBC-IN CONTENT PROVIDER AGREEMENT
This NBC-IN Content Provider Agreement (this "Agreement"), dated as of
February 26, 1998 (the "Effective Date"), is by and between 2 WAY MEDIA, INC. a
Delaware corporation, ("Company"), and NBC MULTIMEDIA, INC., a Delaware
corporation ("NBC").
RECITALS
A. Concurrently with the execution and delivery of this Agreement and the
Strategic Alliance Agreement of even date herewith between the parties
(the "Strategic Alliance Agreement"), and pursuant to the terms and
conditions of that certain Securities Purchase Agreement of even date
herewith (the "Securities Purchase Agreement") by and between Company,
NBC and other investors, Company shall issue and NBC shall receive
1,960,784 ($3mm) shares (the "Purchased Shares") of Company, Series D
Stock, as such term is defined in the Securities Purchase Agreement.
B. As a condition to, and as sole consideration for, the issuance of
653,595 ($1mm) of the Purchased Shares covered by the Securities
Purchase Agreement, NBC has agreed to enter into this Agreement pursuant
to which, and subject to the terms and conditions set forth below,
Company shall create myLAUNCH Local Sites in connection with NBC's
NBC-IN online service as described below.
NOW, THEREFORE, in consideration of the terms and conditions set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, NBC and Company agree as
follows:
AGREEMENT
1. Description of NBC-IN. NBC has created a menu of localized world wide
web services ("NBC-IN") which it offers to the NBC Television Network's
("NBC TV") owned and operated stations and interested affiliates (the
"Stations"). NBC agrees that customized versions of the purchasing
service which is part of the myLAUNCH online music content, information
and purchasing service created and operated by the Company ("myLAUNCH")
shall be among the services offered as part of such platform subject to
the terms and conditions hereof Company acknowledges (i) that each
Station will have the sole right to determine which individual services
it will accept as part of the NBC-IN, (ii) that myLAUNCH may or may not
be included in any individual Station's list of such services, and (iii)
that NBC and declining Stations shall have no liability or obligations
to Company due to any Stations' decision not to so include myLAUNCH.
2. Creation of myLAUNCH Local Sites. (a) Company agrees that it shall
create a new version of its myLAUNCH site which will consist of a
customized and localized jump page containing certain material which is
relevant to such user and which will primarily direct NBC-IN users to
areas of myLAUNCH focused on the on-line-purchase of any merchandise or
services offered for sale by Company on myLAUNCH, including music
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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CDs, audio tapes or CD-ROMs ("Products") but which may, in addition,
direct such users to myLAUNCH areas containing certain mutually
agreeable supplementary information which relates to such purchases
(i.e., reviews and release information) for use by Stations
participating in the NBC-IN ("myLAUNCH Local Sites"). Such customized
versions will be designed and operated through the technological
cooperation of Company, NBC, the Stations and NBC's technology partners
(as described below in Section 4(c)) so that online users of the
Stations' world wide web sites (the "Station Sites") shall be provided
with a version of myLAUNCH which is designed to provide branding and
purchasing information relevant to such users' geographical markets.
Company agrees that it shall use commercially reasonable efforts to make
the initial version of the myLAUNCH Local Sites available for use by
commercial users by no later than [*] months following the Effective
Date hereof.
(b) NBC and Company shall mutually agree upon the final form and content of
the myLAUNCH Local Sites, but, at a minimum, the myLAUNCH Local Sites
will consist of: (i) individualized Station "jump pages" which contain
branding and other material to be provided by NBC and each of the
relevant Stations and which will contain links to the areas of myLAUNCH
described in Exhibit A, and (ii) customized, traveling branding and
advertising that will appear on any myLAUNCH pages accessed by users
after the initial jump page has been viewed. All such NBC and Station
branding shall link back to either the NBC-IN homepage or the
appropriate page on the Station Site. Each such myLAUNCH Local Site
shall be framed within a sub-page of the Station Site but will contain
material to be provided by Company and located on Company's server. As a
result, all online users will be accessing and bookmarking the myLAUNCH
Local Site content through the NBC-IN's portion of the Station's URL.
Except as described above and approved by NBC, the "jump pages" of the
myLAUNCH Local Sites and any pages of the myLAUNCH Local Sites which are
reached directly (i.e., in one click) from the "jump pages", other than
the page accessed via the General Service Link (as described in Exhibit
A), will not include any (i) local music content or information (e.g., a
list of upcoming local music events), other than purchasing information,
(ii) news, or (iii) any branding of, or links to, any Other Networks'
material (as such term is defined below). Finally, if the categories of
content currently included in any of the areas of myLAUNCH which are
reached from the "jump pages", other than via the General Service Link,
are changed in the future and any of the new categories of content
include any categories of information which NBC reasonably believes are
in violation of either any contracts with other NBC-IN content providers
existing as of the date hereof or NBC Broadcast Standards and Practices,
then Company may choose to either alter such areas in a manner which
removes or blocks such objectionable categories of content for users of
the myLAUNCH Local Sites in a manner which is acceptable to NBC or
permit NBC to remove the links on the "jump pages" to such areas.
(c) Company agrees to allow all users to have access to all myLAUNCH
features currently accessible in the myLAUNCH "Guest" mode which are
described in Exhibit A, as well as the right to purchase Products,
without having to complete the registration process offered to users of
myLAUNCH. NBC acknowledges that Company may make
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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commercially reasonable efforts to encourage all users to register with
Company through promotional opportunities within the myLAUNCH Local
Sites which are reasonably acceptable to NBC.
3. Links. (a) As a condition of utilizing the NBC-IN, each participating
Station will be required to devote a standardized portion of the front
page of the Station Site to NBC-IN, subject to Station's right to have
overall design control of the Station Site. Each Station shall be
encouraged to devote enough space on its front page to permit the
placement of a NBC-IN navigation menu, but at a minimum, each
participating Station Site's front page shall contain a prominent
hotlink to a special sub-page devoted to hotlinks for all of the
services making up the NBC-IN the size of which shall be comparable to
that of any other link to a service offered by the Station.
(b) NBC agrees that a hotlink to the myLAUNCH Local Sites will either appear
on the NBC-IN navigation menu or will be rotated into such navigation
menu on an equal basis with the hotlinks of other content providers,
subject to NBC's right to group brands and/or generic categories and
sub-categories concerning all of its service providers in manners and
sizes which are most useful to users of the Station Sites. In addition,
NBC agrees that a hotlink to the myLAUNCH Local Sites will appear on the
main NBC-IN homepage which NBC-IN homepage shall be accessible in one
link from XXX.xxx as well as all Station Sites participating in NBC-IN.
The various hotlinks to the myLAUNCH Local Sites shall contain an icon
and/or text provided by Company which is reasonably acceptable to NBC
(the "myLAUNCH Link").
4. Management of myLAUNCH Local Sites. The day-to-day management of the
myLAUNCH Local Sites, and all costs associated therewith, shall be the
responsibility of the Company subject to the following:
(a) Content and Service - Company will provide all of the content and
services for each of the myLAUNCH Local Sites, provided that as part of
the localization and customizing process required herein, NBC and the
Stations may provide material in their own discretion for use on the
relevant myLAUNCH Local Sites and Company will make good faith efforts
to include such material on the relevant myLAUNCH Local Sites. Company
will acquire all necessary rights and licenses required for the
operation of each myLAUNCH Local Site as contemplated herein and for the
acquisition and use of any content and technology not provided by NBC
and the Stations. Each of the Company, NBC and the Stations will retain
and own all copyrights and other intellectual property rights in, and
to, the material which that entity contributes for use hereunder.
(b) Editorial - Once the parties have mutually agreed upon the final form
and content of themyLAUNCH Local Sites pursuant to Section 2, day to day
editorial standards and direction regarding the inclusion and
presentation of content of material on the myLAUNCH Local Sites will
come from Company, subject to NBC's right to reject the types of content
described in Section 2(b) and right to approve all uses of any material
provided by NBC or the Stations as described below. In addition, Company
agrees to
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consider all reasonable requests and suggestions regarding individual
myLAUNCH Local Sites which are made by NBC and the relevant Stations.
Company also agrees that the myLAUNCH Locals Sites and myLAUNCH will not
contain any Adult Content and will comply with any other NBC Broadcast
Standards and Practices which may apply thereto and with the Rules and
Regulations of the Federal Communications Commission and any other
governmental body having jurisdiction. For purposes hereof, the term
"Adult Content" shall mean any material, including audio or video
material, which is pornographic or which contains nudity, explicit
sexual material or depictions of sexual acts any of which is beyond that
normally broadcast over NBC TV.
(c) NBC and Station Material - Company agrees that NBC shall have final
approval regarding all aspects of Company's integration of any material
provided by NBC or the Stations or their affiliates, licensors or
suppliers into the myLAUNCH Local Sites. NBC shall have sole discretion
regarding how it exercises such approval rights and may reject any use
or presentation of such material in the myLAUNCH Local Sites for any, or
no, reason. The use by Company of any material provided by NBC or the
Station or their affiliates, licensors or suppliers must comply with all
NBC guidelines regarding the use of intellectual property related to any
NBC TV television show or talents' names, likenesses and images and any
other requirements related thereto of which Company is informed by NBC.
Company agrees to obtain NBC's prior written approval to any use of any
NBC or Station branding or other material provided by NBC or the Station
or their affiliates, licensors or suppliers which is not specifically
contemplated by the terms hereof.
(d) Technology - myLAUNCH will be responsible for all maintenance of the
myLAUNCH Local Sites (including customer service, technical upkeep,
etc.) and the costs associated therewith, including the costs of coding
such sites to recognize which Station Site directed the user thereto.
NBC and its technology partner shall be responsible for the framing of
the myLAUNCH Local Sites as contemplated herein. Company will provide
all necessary facilities, servers, connectivity and related equipment
and technology required to host the myLAUNCH Local Sites on Company's
internet servers. Company agrees that, at all times during the term of
this Agreement, the resources it provides to host the myLAUNCH Local
Sites shall be sufficient to support and manage the simultaneous users
that wish to use the myLAUNCH Local Sites at any time. Company will
identify and track users who enter the myLAUNCH Local Sites via NBC-IN
and be able to organize this data, including transaction data, in order
to show which Station Site sent such user thereto. Company will also
provide any other data and statistics regarding users of the myLAUNCH
Local Sites which NBC reasonably requests, including the data described
in Section 9(b). Company agrees to work with NBC's technology partners
to coordinate the interface between the myLAUNCH Local Sites and the
Station Sites so that the myLAUNCH Local Sites will provide the required
services contemplated herein.
(e) Branding - The myLAUNCH Link may be branded with material to be provided
by Company, subject to NBC's approval thereof. The myLAUNCH Local Sites
will be co-branded with trademarks and other material to be provided by
NBC, the Stations and
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Company subject to the approval of each party and provided that the size
of all such brands and the design of all NBC and Station brands shall be
left to the sole discretion of NBC. The parties agree that the Company's
brands on the MYLAUNCH Local Sites shall be no less than [*] the size
of, but as visible as, the brands of NBC and the relevant Stations.
Company agrees to abide by all requirements and guidelines which NBC and
the Stations may have regarding the use of their trademarks, service
marks and other brands and agrees that it shall make no use of such
marks and brands which is not approved in advance by NBC and the
relevant Stations. All use by Company of any NBC or Station trademarks,
service marks or other brands shall inure to the benefit of NBC and the
relevant Station, and Company shall not obtain any ownership interests
in any such branding. NBC agrees to abide by all requirements and
guidelines which Company may have regarding the use of its trademarks,
service marks and other brands on NBC-IN. All use by NBC of any Company
trademarks, service marks or other brands shall inure to the benefit of
Company, and NBC shall not obtain any ownership interests in any such
branding. Branding for all other areas of the NBC-IN and the Station
Sites shall be at the sole discretion of NBC and the Stations.
5. Promotion. As a condition of utilizing the NBC-IN, each Station will be
required to offer a minimum of [*] on-air promos concerning, or mentions
of, the URL address of the Station Site per week. NBC shall provide
Stations with appropriate "calls-to-action" examples to enable such
Stations to include NBC-IN information as part of such promos or
mentions. In addition, Company will provide NBC with regular information
which NBC will provide to the Stations for use in such Stations' sole
discretion if they choose to promote the MYLAUNCH Local Sites in
connection with such Stations' Station Sites.
6. Exclusivity. (a) For the term hereof, NBC agrees that NBC-IN will
feature myLAUNCH as its primary provider of online music purchasing
services, provided that Company acknowledges that nothing in this
Section 6 or elsewhere in this Agreement shall restrict NBC's rights in
any way in connection with NBC's world wide web site ("XXX.xxx"), MSNBC
Interactive, Xxxxxxxxxxx.xxx or any other or future NBC related
interactive (or other) services other than NBC-IN. Notwithstanding the
foregoing, Company acknowledges that (i) other services provided by
third parties, such as [*] may be offered to the Stations by NBC as part
of NBC-IN which provide online music purchasing services in addition to
their primary services as long as NBC does not offer such third party
services in place of Company's service on NBC-IN or materially promote
such competing aspects of such third party services to the Stations or
the public (other than through general advertising) in connection with
NBC-IN and (ii) NBC will have no ability to prevent the Stations from
placing competing services elsewhere on their own Station Sites. In
addition, NBC agrees that it will make commercially reasonable efforts
to prevent the "jump pages" of the localized versions of any future
third party services included on NBC-IN from containing a material
amount of music content or information of a type that would be
reasonably considered competitive with that provided on the
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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myLAUNCH service; provided, however, that such prohibition shall not
apply to online services related to radio broadcasting (e.g., radio
network schedules and information) or third party media sites which
contain information regarding a variety of topics (e.g., newspaper or
general entertainment services). In addition, NBC will not enter into
any additional agreements with any other third-party primarily relating
to the provision of music content and information to NBC-IN. The
exclusivity terms hereof will not prevent NBC or the Stations from
placing banner advertising of any party, including any Prohibited
Sponsor, on NBC-IN or anywhere else other than on the myLAUNCH Local
Sites.
(b) Company agrees that it will not provide substantially similar localized
myLAUNCH content or service to, or allow the content or service to be
connected or integrated in any way with, any television broadcasters or
stations, any regional television broadcast network or cable programmers
[*] or their affiliates, other than [*], or such entities' world wide
web sites (the "Other Networks"). In addition, Company will not provide
a substantially similar myLAUNCH local site or service to any
third-party interactive media company acting as an aggregator of content
and/or services that redistributes myLAUNCH content to Other Networks.
Notwithstanding the foregoing, if any Station chooses not to accept the
myLAUNCH Local Site as part of NBC-IN, then Company will be free to
provide its myLAUNCH service to any Other Network within such market as
long as the service is localized and intended for use within such
geographic market only. The exclusivity terms hereof will not prevent
Company from placing banner advertising of any party, including any
Other Network, anywhere on the general myLAUNCH Service other than on
the myLAUNCH Local Sites.
7. Advertising Sales. (a) Company shall be responsible for the sale of
advertising inventory and sponsorships to be placed on each myLAUNCH
Local Site. Company will use best efforts to sell such advertising and
sponsorships, and if any such inventory remains unsold, then each party
shall have the right to use [*] of the amount of such unsold inventory
for its own purposes, subject to the restrictions described herein, and
[*] of such inventory shall be used to promote other areas of myLAUNCH
co-branded with Company and NBC branding. Company shall have the
responsibility of administering the contract for such advertising,
paying all necessary expenses and collecting all fees related thereto.
Company acknowledges that NBC and the Stations will be solely
responsible for the sale of advertising which appears within the area of
the Station Sites which frames myLAUNCH Local Sites and that Company
will have no right to advertising revenues received by NBC and Stations
in connection with such frames or any other portions of the Station
Sites other than the myLAUNCH Local Sites.
(b) NBC and Company will coordinate their advertising efforts so that they
can avoid confusion in the marketplace and elsewhere. Company will (i)
comply with all Company advertising standards as well as any and all
relevant NBC Advertising Standards, (ii) not act as a representative for
NBC or any NBC content or property in the advertising
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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marketplace, (iii) will not sell advertising appearing in the myLAUNCH
Local Sites to any Other Network, and (iv) not permit any such
advertising to refer to, or imply an endorsement of any kind by, NBC or
its affiliates or any of NBC's or its affiliates', licensors' or
suppliers' properties, talent or licensors. In addition, all such
advertising and sponsorships shall be subject to NBC's approval and will
comply with any applicable NBC guidelines regarding the use of
intellectual property related to any NBC TV television show or its
talent's likenesses and images and any other requirement related
thereto.
8. Financial Terms. Company agrees that it will be responsible for all
costs and expenses associated with the creation and operation of the
myLAUNCH Local Sites. All revenues associated with myLAUNCH shall be
split among NBC and Company monthly as follows:
(a) Advertising Sales on myLAUNCH Local Sites. Company will pay NBC [*]
attributable to sales of advertising and sponsorships on the myLAUNCH
Local Sites. For purposes hereof, the term "Net Advertising Revenue"
shall mean all advertising revenue actually collected by Company in
connection with the myLAUNCH Local Sites (including in-kind
compensation) less actual selling commissions, agency commissions, and
all actual out of pocket expenses directly incurred by Company in
connection with creating, selling and fulfilling such advertising, which
commissions and expenses shall in no event in total [*].
(b) Transactions. Company shall pay NBC fifty percent (50%) of the total of
(i) all actual Company gross receipts from transactions occurring
anywhere on myLAUNCH, including the sale of any Products, attributable
to users coming to the myLAUNCH through NBC-IN or the myLAUNCH Local
Sites, less only (ii) the direct, identifiable and actual cost of goods
sold, fulfillment expenses, discounts, bad debts, sales taxes, and
returns related to such transactions; provided that NBC will not share
in any revenue derived from the sale of any merchandise directly based
on Company's trademarks, service marks, designs or logos (e.g., LAUNCH
T-shirts) and the LAUNCH CD-ROM magazine. If the total expenses exceed
revenues for such transactions, such amount may not be used to offset
any payments otherwise owed to NBC hereunder, including payments
attributable to advertising. Subject to the right to deduct such
expenses from revenues as described above, Company shall be solely
responsible for the payment of any and all sales and applicable taxes
related to the orders and sales of Products. Company agrees that the
revenue share described in this Section 8(b) is [*].
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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(c) Other Revenue. The parties agree that if Company derives any other type
of revenue from myLAUNCH other than that described in sub-sections (a)
and (b) above, then the portion of such revenue attributable to traffic
coming from NBC-IN and the myLAUNCH Local Sites shall be divided between
the parties in a manner which is mutually agreed upon by both parties at
the time when Company begins to collect such revenue.
9. Payment and Audit Conditions. (a) Payments. Company will remit to NBC,
within thirty (30) days after the end of each calendar quarter, an
amount equal to the total fees owed to NBC by Company pursuant to
Section 8 for activities occurring during the previous quarter. Such
payment shall be accompanied by a statement which will provide support
for Company's calculation of such fees. Such support shall, at a
minimum, provide enough detail regarding each element involved in making
the revenue calculations in Section 8 (e.g., advertising revenues and
each cost component related thereto) to permit NBC to independently
verify such calculations. The parties agree that all revenues associated
with the myLAUNCH Local Sites collected by Company and not otherwise
owed to Company shall be paid directly to NBC and not to any of the
individual Stations.
(b) Statements. In addition to the quarterly revenue statements, Company
shall render to NBC an additional quarterly statement which will
include, at a minimum, the following types of information:
(i) Details regarding the traffic to the myLAUNCH Local Sites and other
areas of myLAUNCH who are directed there via either NBC-IN or the
myLAUNCH Local Sites including the number of visitors to the myLAUNCH
Local Sites, the number of separate subpages of the myLAUNCH Local Sites
and myLAUNCH accessed by such visitors and the number of users who
placed orders for Products during the relevant period.
(ii) Descriptions of users of the myLAUNCH Local Sites and other areas
of myLAUNCH who are directed there via either NBC-IN or the myLAUNCH
Local Sites, including the name, address, form of order payment (e.g.
Visa or AMEX), if any, and electronic mail address of each user, the
Products, if any, ordered by such user, the sales price for the items in
any order placed by the user and any other information gathered by
Company regarding such users; provided, however, that NBC shall not
receive any such information which Company is forbidden to disclose due
to outstanding contractual arrangements or the standard privacy policy
which Company provides to users when it collects such information.
(iii) Details regarding quality control in connection with any purchases
of Products by users which will include, at a minimum, the number of
complaints received by Company in connection with the orders during the
relevant period and statistics regarding the failure rate of Company's
order fulfillment system as well as the causes thereof.
(c) Audit Rights. Company shall at all times keep an accurate and auditable
account of the sources of revenue and expenses described in Section 8
adequate to verify (i) ny fees or other payments required pursuant to
the terms hereof, (ii) all Net Revenues, (iii) all transactions on
myLAUNCH covered by the terms hereof and (iv) any other information
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which Company is obligated to provide NBC hereunder. Company shall
retain such records during the term of this Agreement and for a period
of one year following the expiration or termination of the Agreement.
NBC, its agents, or an independent auditor appointed by NBC, shall have
the right to inspect, audit and analyze such records up to two times
each year upon reasonable notice during regular business hours to verify
compliance with this Agreement. NBC shall bear the costs of such audits
unless (i) such audits reveal a discrepancy of more than five percent
(5%) between the payments paid by Company to NBC and the actual payments
due pursuant to this Agreement or (ii) in the event such audit xxxxxx a
material breach of the Agreement, in which cases Company shall reimburse
NBC for the reasonable cost of such audit.
10. Representations and Warranties. (a) Company represents and warrants to
NBC and the Stations that it has the right and power to perform its
obligations and to grant the rights granted herein, that Company's
creation and operation of the myLAUNCH Local Sites pursuant to this
Agreement will not violate any agreement or obligation between Company
and a third party or any laws or regulations and that, except for
material provided by NBC and the Stations, the content included on the
myLAUNCH Local Sites and the myLAUNCH Link as well as the operation of
the myLAUNCH Local Sites as contemplated herein will be accurate and
correct, will not violate or infringe the copyright, trademark, trade
name, patent, literary, intellectual, artistic or dramatic right, right
of publicity or privacy or any other right of any entity or person or
contain any material which is Adult Content, libelous, slanderous or
defamatory. Company also agrees that the myLAUNCH Local Sites, including
any software or hardware provided by Company in connection therewith,
(i) will not violate or infringe the intellectual property rights of any
third party, (ii) will be operated and maintained with professional
diligence and skill and in a manner consistent with reasonable
commercial standards, and (iii) will operate as described in this
Agreement, including any specifications and guidelines mutually agreed
upon by the parties from time to time during the term hereof. Finally,
Company represents, warrants and agrees that the myLAUNCH Local Sites
and myLAUNCH do not currently, and shall not in the future, contain or
link to Adult Content. Notwithstanding the forgoing, NBC acknowledges
and agrees that Company cannot prevent users of myLAUNCH and the
myLAUNCH Local Sites from placing links to Adult Content of users own
choosing on users' customized "member" pages, but Company agrees that it
shall not promote any Adult Content or encourage users to link thereto.
(b) NBC represents and warrants to Company that it has the right and power
to perform its obligations and to grant the rights granted herein and
that the material provided by NBC to Company for inclusion on the
myLAUNCH Local Sites, which NBC has approved for use as contemplated
herein, will be accurate and correct and will not violate or infringe
any third party rights, including intellectual property rights.
11. Indemnity. (a) Company agrees to indemnify and hold harmless NBC, its
affiliates, and their respective directors, officers, agents, employees,
shareholders, partners and members against and from any and all third
party claims, and any liability, loss and
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damages, including reasonable attorneys' fees, related thereto, caused
by or arising wholly or in part out of (i) Company's violation of the
representations and warranties described in Section 10(a), (ii)
Company's performance of the services described in this Agreement, (iii)
Company's acts or omissions including any breach of any of its
obligations under this Agreement and (iv) any transactions with users of
the myLAUNCH Local Sites or myLAUNCH, including, but not limited to, any
purchases of Products by such users.
(b) NBC's Obligation. NBC agrees to indemnify and hold harmless Company and
its respective directors, officers, agents, employees, shareholders,
partners and members against and from any and all third party claims,
and any liability, loss and damages, including reasonable attorneys'
fees, related thereto, caused by or arising wholly or in part out of (i)
any violation of the representations and warranties described in Section
10(b), (ii) NBC's performance of the services described in this
Agreement, (iii) NBC's acts or omissions including any breach of any of
its obligations under this Agreement.
(c) Control of Litigation. The indemnitor hereunder shall have full control
of the defense of such litigation and, subject to sub-section (d) below,
may settle, compromise or adjust the same, provided, however, that the
indemnitee, upon relieving the indemnitor in writing of the obligations
imposed hereunder for defense and indemnification, shall have the right,
if it so elects, to conduct such litigation at its own expense by its
own counsel.
(d) Notice and Duration. The above obligations for defense and
indemnification shall be imposed only if (1) the indemnitee sends to the
indemnitor timely written notice of first service of process upon the
indemnitee and a timely written request to defend the litigation (such
notice and request shall be deemed timely if given within a reasonable
length of time after receipt of service by the indemnitee and a
reasonable length of time prior to the date by which first response to
such process is legally required, considering all the circumstances);
(2) while such litigation is pending, the indemnitee upon request, shall
furnish to the indemnitor all relevant facts and documentary material in
the former's possession or under its control, and shall make its
employees or other persons under its control with knowledge of relevant
facts available to the indemnitor for consultation and as witnesses at
their customary places of business; and (3) the indemnitee does not
enter into any settlement relating to any claim for which it requests
indemnification hereunder without the approval of the indemnitor.
(e) IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY LOSS OF PROSPECTIVE
PROFITS OR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES BY REASON OF ANY FAILURE BY SUCH PARTY TO PERFORM ITS
OBLIGATIONS PURSUANT TO THIS AGREEMENT EXCEPT UNDER THE INDEMNITY
PROVISIONS OF SECTION 10. NBC will have no liability for the adequacy of
performance of myLAUNCH OR THOSE PORTIONS OF the myLAUNCH LOCAL SITES
WHICH ARE NOT CONTROLLED BY NBC.
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12. Term. The initial term of this Agreement (the "Initial Term") shall be
for twenty-six (26) months from the Effective Date. At the end of the
Initial Term, if the parties have extended the Strategic Alliance for an
additional two (2) year period pursuant to the terms of that Agreement,
then the term hereof shall also be extended for an additional two (2)
years upon the terms hereof (the "Renewal Term").
13. Termination. (a) By NBC for Convenience - NBC can terminate this
Agreement at any time and for any reason by providing Company with
ninety (90) days prior written notice subject to the following terms:
(i) For any termination taking effect at any time within [*] months of
the Effective Date, NBC shall return [*] of the Purchased Shares to
Company (i.e., [*] of Purchased Shares attributable to this Agreement)
with the price per share of the Purchased Shares equal to the Original
Purchase Price;
(ii) For any termination taking effect at any time after [*] months from
the Effective Date and up to the end of the Initial Term, NBC shall
return [*] of the Purchased Shares to Company (i.e., [*] of Purchased
Shares attributable to this Agreement) with the price per share of the
Purchased Shares equal to the Original Purchase Price. For purposes
hereof, the term "Original Purchase Price" shall mean the price per
share applicable to the Purchased Shares as of the Effective Date hereof
which is $1.53.
(b) By NBC for Change in Control - In addition, if the ownership of a
significant portion of the equity of Company, or all or substantially
all of the assets of Company, is transferred at any time during the
term, then NBC shall have the option of terminating this Agreement on
five (5) business days prior written notice without returning any of the
Purchased Shares if the ownership of such equity or assets are
transferred to any (i) Other Network, (ii) any provider of Adult Content
or (iii) any other party with whom NBC reasonably chooses not to be
associated, other than Company's current shareholders (including all
purchasers of Series D Preferred Stock of the Company). Transfer of any
amount of such equity or assets shall be deemed significant when the
parties described in (i) and (ii) in the previous sentence are involved,
but such figure shall be deemed to be at least [*] of Company's equity
when the parties described in (iii) in the previous sentence are
involved.
(c) By Company for Convenience - Company may terminate this Agreement at any
time and for any reason by providing Company with [*] days prior written
notice subject provided that in the case of such termination NBC shall
be entitled to retain all of the Purchased Shares.
(d) Due to Material Breach by NBC - In the event that NBC commits a material
breach of a material obligation of this Agreement, Company shall provide
NBC with written notice of such breach, and if NBC fails to cure such
breach within [*] days of receipt of such written notice, this Agreement
shall immediately terminate at the end of such cure period. Upon a
termination pursuant to this Section 13(d), NBC shall return the
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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Purchased Shares, if any, which it would have been otherwise required to
return pursuant to the terms of Section 13(a), calculated as of the
effective date of such termination. This right of termination shall be
in addition to all other rights and remedies at law or in equity.
(e) Due to Material Breach by Company - In the event that Company commits a
material breach of a material obligation of this Agreement, which shall
include any distribution of Adult Content in the Co-branded Areas or
myLAUNCH in violation of Section 4(b), NBC shall provide Company with
written notice of such breach, and if Company fails to cure such breach
within [*] of receipt of such written notice, this Agreement shall
immediately terminate at the end of such cure period. Upon a termination
pursuant to this Section 13(e), NBC shall be entitled to retain all of
its Purchased Shares. This right of termination shall be in addition to
all other rights and remedies at law or in equity.
14. Confidentiality. (a) Restrictions on Use and Disclosure - Each party
shall protect the other's Confidential Information from unauthorized
dissemination and use with the same degree of care that such party uses
to protect its own like information. Neither party will use the other's
Confidential Information for purposes other than those necessary to
directly further the purposes of this Agreement. Each party will use its
best efforts not to disclose to third parties the other's Confidential
Information without the prior written consent of the other party. Except
as expressly provided in this Agreement, no ownership or license rights
are granted in any Confidential Information. For purposes hereof, the
term "Confidential Information" shall mean (i) any trade secrets
relating to either party's product or service, plans, designs, costs,
prices and names, finances, marketing plans, business opportunities,
personnel, research, development or know-how; and (ii) the specific
terms and conditions of this Agreement, but "Confidential Information"
shall not include information that: (i) is or becomes generally known or
available, whether by publication, commercial use or otherwise, without
restriction on disclosure and through no fault of the receiving party;
(ii) is known by the receiving party prior to the time of disclosure;
(iii) is independently developed or learned by the receiving party
without reference to any Confidential Information of the disclosing
party; or (iv) is lawfully obtained from a third party that the
receiving party reasonably believes has the right to make such
disclosure.
(b) Limitations - The other provisions of this Agreement notwithstanding,
either party will be permitted to disclose the terms and conditions of
this Agreement to their outside legal and financial advisors and to the
extent required by applicable law; provided however that before making
any such required filing or disclosure, the disclosing party shall first
give written notice of the intended disclosure to the other party,
within a reasonable time prior to the time when disclosure is to be
made, and the disclosing party will exercise best efforts, in
cooperation with the other party, consistent with reasonable time
constraints, to obtain confidential treatment for all non-public and
sensitive provisions of this Agreement, including without limitation
dollar amounts and other numerical information.
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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15. Press Release. Within a reasonable period following the execution
hereof, NBC and Company will issue a mutually agreeable joint press
release and any other mutually agreed upon promotional materials
regarding the relationship described in this Agreement and the Strategic
Alliance Agreement.
16. Miscellaneous. (a) Governing Law - This Agreement shall be governed and
construed in accordance with the laws of the State of New York
(excluding the laws regarding conflict of laws questions).
(b) Relationship of the Parties - It is understood that this Agreement does
not create any partnership, joint venture or employment relationship
between the parties, that both parties are acting as independent
contractors with respect to each other, and that none of the employees
of either party shall be deemed to be employees of the other party for
any purpose. Each party shall pay and be solely responsible for all
contributions, taxes and premiums payable under any and all applicable,
laws, rules or regulations with respect to employees.
(c) Severability - If any provision of this Agreement shall be found by a
court of competent jurisdiction to be invalid or unenforceable, such
finding shall not affect the validity or enforceability of this
Agreement as a whole or of any other part of this Agreement. Any such
provision shall be enforced to the maximum extent permissible. In the
event such provision is considered an essential element of this
Agreement, Company and NBC agree to promptly negotiate a replacement
thereof/
(d) Notices - Any notice or other communication under this Agreement shall
be sufficiently given if given in writing and delivered by hand
delivery, or in lieu of such personal service, twenty-four (24) hours
after delivery to a courier service, to the addresses listed below.
Either party may designate a different address by giving notice of
change of address in the manner provided above.
To Company: To NBC:
2 Way Media, Inc. NBC Multimedia, Inc.
0000 Xxxxx Xxxxxx, #000 00 Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx Attn: Xxxxxx Xxxxxxxx
Fax: (000) 000-0000 Fax: (000) 000-0000
With a copy to:
National Broadcasting Company, Inc.
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Legal Department
Fax:(000) 000-0000
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(e) Survival - Sections 9, 10, 11, 13, 14 and 16 will survive the expiration
or termination of this Agreement.
(f) Assignment - Either party shall have the right to freely assign or
transfer, in whole or in part, any of its rights, interests, benefits or
obligations hereunder, including the Agreement itself, to any party in
its sole discretion. Notwithstanding the foregoing, Company may not
assign this Agreement to any of the parties described in subsections
(i)-(iii) of Section 13(b), and NBC may not assign this Agreement to any
Prohibited Sponsor. This Agreement shall be fully binding upon, inure to
the benefit of and be enforceable by the parties hereto and their
respective successors and assigns.
(g) Waiver/Modification - No modification or amendment to, or waiver of,
this Agreement will be binding and valid unless it is in writing and
executed by the party against whom enforcement is sought. No waiver of a
breach of any provision of this Agreement or of any default hereunder
shall be deemed a waiver of any other breach or default of this
Agreement.
(h) Force Majeure - Neither party shall be liable for any delay or failure
in performance of any part of this Agreement from any cause beyond its
control and without its fault or negligence including, without
limitation, acts of nature, acts of civil or military authority,
embargoes, epidemics, terrorist acts, riots, insurrections, fires,
explosions, earthquakes, nuclear accidents, floods, work stoppages,
equipment failure, power blackouts, volcanic action, other major
environmental disturbances, unusually severe weather conditions,
inability to secure products or services of other persons or third party
suppliers of such products and services, or transportation facilities or
acts or omissions of transportation carriers. No delay or other failure
to perform shall be excused pursuant to this Section 16(h) unless such
delay or failure and consequences thereof are beyond the control and
without the fault or gross negligence of the party claiming excusable
delay or other failure to perform. In the event of any such excused
delay in the performance of a party's obligation(s) under this
Agreement, the due date for the performance of the original
obligation(s) shall be extended by a term equal to the time lost by
reason of the delay. In the event of such delay, the delaying party
shall perform its obligations at a performance level no less than that
which it uses for its own operations. In the event of a labor dispute or
strike, the parties agree to provide service to each other at a level
equivalent to the level they provide themselves during such dispute or
strike,
(i) Construction - If for any reason a court of competent jurisdiction finds
any provision of this Agreement, or portion thereof, to be
unenforceable, that provision of the Agreement will be enforced to the
maximum extent permissible so as to effect the intent of the parties,
and the remainder of this Agreement will continue in full force and
effect. Failure by either party to enforce any provision of this
Agreement will not be deemed a waiver of future enforcement of that or
any other provision. This Agreement has been negotiated by the parties
and their respective counsel and will be interpreted fairly in
accordance with its terms and without any strict construction in favor
of or against either party.
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(j) Entire Agreement - The provisions of this Agreement set forth the entire
agreement and understanding between Company and NBC as to the subject
matter hereof and supersedes all prior agreements, oral or written, and
all other communications between Company and NBC relating to the subject
matter hereof, other than the Securities Purchase Agreement, the
Warrant, the Strategic Alliance Agreement and the Non-Disclosure
Agreement between the parties. Nothing in this Agreement, express or
implied, is intended to confer the parties hereto and their respective
successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
(k) Counterparts - This Agreement may be executed in counterparts, each of
which shall constitute an original but all of which, when taken
together, shall constitute one agreement, and shall become effective
when one or more, such counterparts have been signed by each of the
parties and delivered to the other party.
This Agreement is accepted and agreed by:
NBC Multimedia, Inc. 2 Way Media, Inc.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
-------------------------- --------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
------------------------ ------------------------
Title: VP NBC Interactive Title: President
----------------------- -----------------------
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EXHIBIT A
A. Links on myLAUNCH Local Sites "jump page"
1. A link to a Product purchasing area which will permit users of the
myLAUNCH Local Sites to purchase Products, which link may be accompanied
or enhanced by certain mutually agreeable promotional material related
to purchasing such Products (e.g., promotions of latest CD releases).
This link will be the first link on the "jump pages" and shall be more
prominent than the other links described below.
2. A link to the general myLAUNCH service page which page is reasonably
similar to the current first page of the general service and which page
permits the user to enter the general myLAUNCH service in its current
"Guest" mode form, provided that such link may not contain any reference
to any of the categories of information described in the last sentence
of Section 2(b) (the "General Service Link").
3. A link to the "Features" section of myLAUNCH, as long as such section is
in a form similar to its current form.
4. A link to the "Album Review" section of myLAUNCH, as long as such
section is in a form similar to its current form.
5. A link to the "New Releases" section of myLAUNCH, as long as such
section is in a form similar to its current form.
B. Description of Services in myLAUNCH Guest Mode
1. Music news
2. Music features/interviews
3. Concert news and features
4 Album reviews
5. New release and upcoming release information
6 Certain artist information (i.e. biographies, discography)
7 Certain album information (i.e. song list, liner notes)
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