Exhibit 10.12
AMENDED AND RESTATED
XXXXX INFOMERCIAL NETWORKS, INC.
AFFILIATE AGREEMENT
THIS AGREEMENT, as amended and restated, is made as of the 1st day of
August, 1994, by and between XXXXX INFOMERCIAL NETWORKS, INC., a Colorado
corporation ("JIN"), and XXXXX INTERCABLE, INC. ("Affiliate"), whose address is
0000 X. Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
IN CONSIDERATION OF THE MUTUAL COVENANTS, STIPULATIONS AND
REPRESENTATIONS CONTAINED HEREIN, THE PARTIES HERETO AGREE AS FOLLOWS:
1. GRANT OF LICENSE
----------------
(a) Subject to the terms and conditions of this Agreement, JIN hereby
grants to Affiliate the non-exclusive license to distribute the "Xxxxx
Infomercial Networks" programming service (the "Service") within the
operating area (as hereinafter defined) of any cable or satellite master
antenna television system(s) owned or managed by Affiliate as listed on the
attached Exhibit I, as such list may be amended from time to time (the
---------
"System(s)") by mutual agreement of JIN and Affiliate. Affiliate shall give
written notice to JIN within thirty (30) days of the date Affiliate desires
to add a System to Exhibit I. Affiliate shall not delete any System from
---------
Exhibit I during the term of this Agreement; provided, however, that
---------
Affiliate shall have the right to delete a System, upon prior written
notice to JIN, if Affiliate replaces such System with one or more other
Systems having, in the aggregate, at least the same number of subscribers
as the deleted System. In the event that Affiliate transfers the Systems
subject to this Agreement to another party and does not replace such
Systems with substitute Systems as contemplated by the immediately
preceding sentence, Affiliate shall use its best efforts to cause the party
to which Affiliate has transferred such Systems to assume Affiliate's
obligations under this Agreement with respect to the transferred Systems,
with such assumption to be evidenced by documentation reasonably acceptable
to JIN.
(b) For purposes of this Agreement, the "Operating Area" of any System
shall mean, with respect to a cable television system, the geographical
area where Affiliate is authorized to construct, operate, manage or
maintain a cable television system by appropriate governmental authority,
and with respect to a satellite master antenna television system, the
geographical area where Affiliate is authorized to construct, operate,
manage or maintain a satellite master antenna television system by
agreement with a third party.
2. TERM
----
(a) The term of this Agreement shall commence on August 1, 1994, and
terminate on February 1, 2005. This Agreement shall automatically renew for
successive equal terms unless either party gives written notice of
termination at least forty-five (45) days prior to the expiration of the
then current term.
(b) Except as otherwise provided herein, neither Affiliate nor JIN may
terminate this Agreement except upon sixty (60) days prior written notice
and then only if the other has made a misrepresentation herein or breaches
any of its material obligations hereunder and such misrepresentation or
breach (which shall be specified in such notice) is not or cannot be cured
within sixty (60) days of such notice.
3. CONTENT OF SERVICE
------------------
The Service shall provide programming consisting of multiple direct
response television commercials ("infomercials") generally ranging in
length from 30 seconds to 60 minutes, depending on the requirements of
adequately demonstrating the particular products or services that are the
subjects of such infomercials. JIN shall have the exclusive authority to
determine the content and format of the Service, and the selection,
scheduling, substitution and withdrawal of any program or advertisement
shall remain within the sole discretion of JIN. Affiliate shall distribute
the Service without addition, deletion, alteration, editing or amendment,
including any copyright notices, credits and similar notices, trademarks or
trade names contained therein.
-2-
4. RATES AND PAYMENTS
------------------
(a) On or before the thirtieth (30th) day following each month throughout
the term of this Agreement, JIN shall pay to Affiliate the appropriate
rebate of network revenue earned (the "rebate") in the operating area
identified by zip codes provided in Exhibit I, and calculated in accordance
---------
with Exhibit II.
----------
(b) JIN's failure, for any reason, to send a particular monthly payment
within the time frame specified shall not relieve Affiliate of its
obligation to carry the Network consistent with the terms of this
Agreement.
(c) During the term of this Agreement, each month Affiliate shall provide
to JIN a true and complete monthly report, signed by the chief financial
officer of Affiliate or his/her authorized designee, in a form satisfactory
to JIN, specifying for each System the total number of hours the Network
was carried each day of that month and the number of channels on which the
Network was viewed. In addition, Affiliate will provide JIN a monthly
report of the specific dayparts of each day during which the Network was
broadcast to each System.
(d) JIN shall keep true and accurate books and records directly relating
to this Agreement in accordance with generally accepted accounting
principles. All such books and records shall be maintained by JIN for a
period of three (3) years following the year to which such books and
records relate. Affiliate or its authorized representatives shall have the
right to inspect, audit and copy any such books and records of Affiliate.
Acceptance of any rebate by Affiliate shall be construed as acceptance of
any calculation thereof.
5. DELIVERY AND DISTRIBUTION
-------------------------
(a) During the term of this Agreement, each of the Systems shall,
commencing with each such Systems' first date of carriage of the Service as
listed on Exhibit I ("Launch Date"), designate a minimum of one (1) channel
---------
on each System for the carriage of the Service prior to the commencement of
the delivery of the Service on such System. Affiliate may change, from time
to time, the channel designation on which the
-3-
Service is carried. Effective January 31, 1995, Affiliate agrees to deliver
the Service a minimum of eight (8) hours per day during the time period
between 8:00 a.m. and 12:00 midnight.
(b) JIN will initially transmit the Service by means of domestic
communications satellite GE American Communications C-3, Transponder 20.
Effective September 6, 1994, JIN will transmit a digitally compressed
signal on the GE American Communications C-3 satellite. JIN will notify
Affiliate of any change in satellite not less than ninety (90) days prior
to the scheduled change. In the event of any such change, Affiliate agrees
to make such arrangements as may be necessary to receive the signal from
the new satellite. If JIN delivers the Service to a domestic communications
satellite where it reasonably appears that Affiliate will incur expenses
for additional receiving equipment other than those associated with
receiving a digitally compressed signal that will not be reimbursed by any
third party for a particular System to receive the Service, then in that
event, Affiliate will be entitled to delete the affected System from
Exhibit I of this Agreement within thirty (30) days of receiving notice
---------
from JIN of the satellite selected for delivery of the Service, unless JIN
agrees to pay its pro rata share (based on number of signals to be received
by any System from such new satellite) of the costs associated with the
additional receiving equipment. If JIN agrees to pay such costs, then the
affected System may not be deleted from Exhibit I and such System shall
---------
continue to distribute the Service through the remaining term of this
Agreement. JIN and Affiliate shall each use their respective best efforts
to maintain a high quality of signal transmission for the Service.
(c) Subject to then existing law, Affiliate shall not itself, and shall
not authorize others to, copy, tape or otherwise reproduce any part of the
Service without JIN's prior written authorization, and shall take
reasonable and practical security measures to prevent the unauthorized
copying or taping by others; provided, however, that nothing herein shall
-------- -------
prohibit Affiliate from assisting its residential subscribers in connecting
video cassette recorders to record the Service. JIN shall endeavor to
advise Affiliate of copyright, literary and dramatic rights of, and
restrictions and limitations imposed by, program originators (including but
not limited to JIN) affecting the distribution of the Service, as they
-4-
exist from time to time ("Intellectual Property Rights and
Requirements"). As between the parties to this Agreement, Affiliate
shall be solely responsible for compliance with any and all Intellectual
Property Rights and Requirements of which its has been given notice.
Affiliate shall not distribute or exhibit, and shall not authorize,
license or permit the distribution or exhibition of, the Service by any
means or device, whether now known or hereafter devised, other than
through the Systems now or hereafter listed in Exhibit I hereto and in
---------
accordance with the terms of this Agreement.
6. PROMOTION AND RESEARCH
----------------------
(a) Affiliate shall use reasonable efforts to promote, market and sell
the Service to Subscribers and to the general public within the
Operating Area of each System. Advertising, promotional, marketing
and/or sales materials concerning the Service which are provided to
Affiliate by JIN shall be used without any alteration, deletion,
addition or any other change, unless such changes are approved by JIN
prior to use by Affiliate.
(b) At JIN's request, Affiliate shall provide JIN with all available
data regarding the marketing and promotion of the Service by Affiliate.
Subject to applicable federal, state and local law (including the
franchises, if any, pursuant to which the Systems are operated),
Affiliate also agrees to render such other assistance to JIN as JIN may
request and which Affiliate may reasonably provide in connection with
any marketing test, survey, poll or other research which JIN may
undertake in connection with the Service. JIN shall treat as
confidential any names and addresses of Subscribers which JIN receives
from Affiliate, and shall not utilize any such names or addresses except
in connection with such research.
7. NOTICES
-------
All notices, statements and other communications given hereunder shall
be in writing and shall be delivered by facsimile transmission,
telegraph, personal delivery, certified mail, return receipt requested,
or by next day express delivery, addressed, if to JIN at 0000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attn: President, Xxxxx
Infomercial
-5-
Networks, Inc. (Fax: 000-000-0000), with a copy to the Legal Department
and, if to Affiliate, at its address set forth herein or by facsimile at
(000) 000-0000. The date of such facsimile transmission, telegraphing or
personal delivery or the next day if by express delivery, or the date three
(3) days after mailing, shall be deemed the date on which such notice is
given and effective.
8. TRADEMARKS
----------
All right, title and interest in and to the Service, and all materials,
ideas, formats and concepts, computer software or other rights of whatever
nature related thereto shall remain the property of JIN. Further, Affiliate
acknowledges and agrees that all names, logos, marks, copyright notices or
designations utilized by JIN in connection with the Service (the "Marks")
are the sole and exclusive property of JIN and/or its affiliates, and no
rights or ownership are intended to be or shall be transferred to
Affiliate. Affiliate's use of the Marks shall be limited to the advertising
and promotion of its carriage of the Service over the Systems pursuant to
this Agreement. JIN shall provide Affiliate with samples of the Marks which
Affiliate shall use in their entirety (including all service xxxx and
trademark notices) whenever the Marks are used by Affiliate.
9. REPRESENTATIONS AND INDEMNIFICATION
-----------------------------------
(a) JIN represents and warrants to Affiliate that (i) it is a corporation
duly organized and validly existing under the laws of the State of
Colorado; (ii) JIN has the corporate power and authority to enter into this
Agreement and to fully perform its obligations hereunder; (iii) JIN is
under no contractual or other legal obligation which in any way interferes
with its ability to fully, promptly and completely perform hereunder; and
(iv) nothing contained in the Service shall violate the civil or property
rights, copyrights, trademark rights or right of privacy of any person,
firm or corporation except that no representation and warranty is given
with respect to music performance rights.
(b) Affiliate represents and warrants to JIN that (i) Affiliate is a
corporation duly organized and validly existing under the laws of the State
of Colorado; (ii) Affiliate has the requisite power and authority to enter
-6-
into this Agreement and to fully perform its obligations hereunder; (iii)
Affiliate's Systems are operating, with respect to any cable television
system, pursuant to valid franchise agreements, or licenses or other
permits duly authorized by proper local authorities, or with respect to any
satellite master antenna television systems, pursuant to valid agreements
with third parties granting affiliate all necessary rights; and (iv)
Affiliate is under no contractual or other legal obligation which in any
way interferes with its ability to fully, promptly and completely perform
hereunder.
(c) Affiliate and JIN shall each indemnify and forever hold harmless the
other, the other's affiliate companies and their respective officers,
directors, employees and agents from all liabilities, claims, costs,
damages and expenses (including, without limitation, reasonable counsel
fees) arising out of any breach or claimed breach by it of any
representation or any of its obligations pursuant to this Agreement.
(d) The party entitled to indemnification hereunder (the "Indemnified
Party") shall notify the other party hereto (the "Indemnifying Party") in
writing of the claim or action for which such indemnity allegedly applies.
The Indemnifying Party shall undertake the defense of any such claim or
action and permit the Indemnified Party to participate therein at the
Indemnified Party's own expense. The settlement of any such claim or action
by an indemnified Party without the Indemnifying Party's prior written
consent shall release the Indemnifying Party from its obligations hereunder
with respect to such claim or action so settled.
(e) Neither party hereto shall be liable to the other for the failure to
fulfill its obligations hereunder (other than the obligation to make all
payments when due hereunder) to the extent such failure is caused by or
arises out of an act of God, war, strike, riot, labor dispute, national
disaster, technical failure (including the failure of all or part of any
domestic communications satellite on which the Service is delivered), or
any other reason beyond the control of the party whose obligation is
prevented during the period of such occurrence.
-7-
10. CONFIDENTIALITY
---------------
Neither Affiliate nor JIN shall disclose to any third party (other than its
respective employees, in their capacity as such), any information with
respect to the terms and provisions of this Agreement, including by way of
press release(s), except: (i) to the extent necessary to comply with law or
legal reporting or disclosure requirements or the valid order of a court of
competent jurisdiction, in which event the party making such disclosure
shall so notify the other as promptly as practicable (and, if possible,
prior to making such disclosure) and shall seek confidential treatment of
such information; (ii) as part of its normal reporting or review procedure
to its parent company, its auditors and its attorneys; provided, however,
-------- -------
that such parent company, auditors and attorneys agree to be bound by the
provisions of this Section; (iii) in order to enforce its rights pursuant
to this Agreement; and (iv) if mutually agreed by Affiliate and JIN in
writing.
11. GENERAL
-------
(a) This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
Notwithstanding the foregoing, this Agreement may not be assigned by
Affiliate without the prior written consent of JIN.
(b) Nothing contained herein shall be deemed to create, and the parties
do not intend to create, any relationship of partners or joint venturers as
between Affiliate and JIN. Neither Affiliate nor JIN shall be or hold
itself out as the agent of the other under this Agreement. The obligations
of Affiliate and JIN under this Agreement are subject to all applicable
federal, state and local laws, rules and regulations including, but not
limited to, the Communications Act of 1934, as amended and the rules and
regulations of the Federal Communications Commissions.
(c) A waiver by either party of any term or condition of this Agreement
in any one instance shall not be deemed or construed as a continuing waiver
or a waiver of any subsequent breach thereof. This Agreement sets forth the
entire understanding of the parties with respect to the subject matter
hereof and supersedes all prior understandings and
-8-
agreements, oral or written between the parties hereto. This Agreement may
not be modified except in a writing executed by both parties hereto.
(d) JIN reserves the right to terminate this Agreement at any time and
without cause in connection with the termination of the Service upon thirty
(30) days prior written notice.
(e) This Agreement and all collateral matters shall be construed in
accordance with the internal laws of the State of Colorado applicable to
agreements fully made and to be performed therein, irrespective of the
place of actual execution or performance.
(f) The invalidity or unenforceability of any provision of this Agreement
shall in no way affect the validity or enforceability of any other
provision of this Agreement.
(g) There is not an adequate remedy at law for a breach by Affiliate of
this Agreement, and JIN will suffer irreparable harm as a result of such a
breach. Therefore, if a breach or threatened breach of this Agreement by
Affiliate occurs, in addition to any other rights and remedies it may have,
JIN shall be entitled to injunctive relief restraining Affiliate from doing
any act in violation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement, as
amended and restated, as of the date first set forth above.
XXXXX INTERCABLE, INC. XXXXX INFOMERCIAL NETWORKS, INC.
By: /s/ Xxxxx X. X'Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
-------------------------- ----------------------------
(Signature) (Signature)
Its: President Its: President
------------------------- ---------------------------
Date: January 31, 1995 Date: January 31, 1995
------------------------ --------------------------
(15383/jdf)
-9-
