PROGRAMMING PARTNER AGREEMENT
THIS PROGRAMMING PARTNER AGREEMENT ("Agreement") is made as of this 18th
day of August 1998, by and between American Mobile Radio Corporation ("AMRC"'),
a Delaware corporation having its principal place of business at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, and AsiaOne Network, L L.C. ("Programmer"),
a Delaware limited liability company having its principal place of business at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, AMRC is implementing a system (the "System") to provide a
digital audio radio service in the continental United States (the "DARS")
pursuant to authorizations issued by the Federal Communications Commission (the
"FCC"); and
WHEREAS, Programmer represents that it is expert in the development,
production, supply and marketing of audio programming, and desires to develop,
produce and supply to AMRC certain programming as described in Appendix A hereto
(the "Programming") to be distributed over one or more audio channels of the
System (the System, the DARS and the Programming hereinafter being referred to
collectively as, the "Service") as well as market the Service, all on the terms
and conditions set forth herein; and
WHEREAS, AMRC desires to carry such Programming on the System, subject to
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
contained herein, the parties, intending to be legally bound, hereby agree as
follows:
ARTICLE ONE
TERM
1.1 Term. Subject to earlier termination in accordance with the terms of
this Agreement, the term of this Agreement (the "Term") shall be for the period
commencing as of the date set forth above and continuing to, and including, the
date set forth in Appendix B hereto. The Term shall include any and all renewals
and extensions of the original term of this Agreement.
ARTICLE TWO
PROGRAMMING
2.1 Program Supply and Carriage. Programmer shall develop, produce and
supply the Programming to AMRC as provided in this Agreement. AMRC shall carry
such Programming on the System as specified in Appendix C hereto. AMRC shall
have complete and sole authority over the System, including the right to
control, designate and modify the Channel(s) (as defined in Appendix C hereto)
over which the Programming is to be carried on the System.
2.2 Grant of Rights to AMRC.
(a) Programmer hereby grants to AMRC and its agents and contractors
during the Term the exclusive right and license to transmit, use and distribute
the Programming by satellite and/or any other means of distribution, including
without limitation terrestrial repeaters and microwave facilities, in connection
with AMRC's provision of the Service. The scope of rights granted to AMRC herein
shall also include any right(s) and license(s) described in Appendix D hereto.
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(b) Programmer hereby also grants to AMRC and its agents and
contractors during the Term the non-exclusive right and license to advertise,
publicize, exploit, use and promote the Programming or any portion thereof in
any manner and by any means or media in connection with AMRC's provision of the
Service, marketing and promotion thereof and advertising thereon. In connection
therewith, Programmer hereby grants to AMRC a non exclusive, royalty-free,
license to use all trade names, trademarks, service marks, trade dress, logos,
designs and other identifying marks of Programmer or the Programming
(collectively, the "Marks") in connection with the provision of the Service,
marketing and promotion thereof and advertising thereon, including any
marketing, promotional or other advertising materials, subject to adherence by
AMRC to Programmer's standards for use and display of such Marks and to AMRC's
identification of Programmer as the owner of such Marks. AMRC acknowledges that
the Marks are the exclusive property of the Programmer, and that AMRC has not
and will not acquire any proprietary rights therein by reason of this Agreement.
2.3 Program Development. Production and Content Requirements.
(a) Programmer shall, at its own cost and expense, develop, produce
and supply to AMRC sufficient Programming throughout the Term to enable AMRC to
transmit the Programming continuously, 24 hours per day, seven days a week on
each Channel as contemplated in Appendix C hereto.
(b) Programmer shall conform the Programming to the description in,
and meet or exceed the standards set forth in, Appendix A hereto for such
Programming. Any change in the nature, content or quality of the Programming
shall be subject to the prior written approval of AMRC in its sole discretion.
During the Term, Programmer shall consult with AMRC on a regular basis, as
determined by AMRC, regarding the nature, content and quality of the
Programming, and AMRC shall have full authority and control over decisions
regarding the nature, content and quality of the Programming, subject to AMRC's
recognition of Programmer's desire to optimize advertising revenues and to
attract listeners. Programmer shall furnish AMRC with programming logs
(containing at least, where applicable, program titles, names of talent, music
titles, artists' names and special features) from time to time upon AMRC's
request. Programmer shall also give AMRC seven (7) days prior written notice of
any special programming or features, as well as any changes in program
scheduling or on-air talent. AMRC shall have sole authority to determine service
tier-packaging.
(c) The name branding of the Channel(s) and any related slogans
(collectively, the "Channel BrandName") shall be subject to the prior written
approval of AMRC. Unless Programmer owns or holds an existing trademark in such
Channel Brand Name, as identified in Appendix F hereto, AMRC shall own all
right, title and interest in the Channel Brand Name. Programmer does hereby
assign to AMRC all right, title and interest of Programmer in and to the
trademark, together with the goodwill associated therewith. Programmer shall
execute all further instruments as may be necessary to effectuate and/or confirm
such assignments. In no event shall Programmer use such Channel Brand Name used
in connection with the Programming on any other DARS system or the equivalent
which provides service to any portion of the continental United States.
(d) AMRC may preempt (in accordance with current FCC standards and
policies applicable to terrestrial broadcast stations or the equivalent for DARS
systems) the Programming or any portion thereof and cause Programmer to insert
AMRC's own programming material in such manner as AMRC may determine in its good
faith, sole discretion. AMRC may also delay, defer, reschedule and interrupt the
Programming or any portion thereof as AMRC deems necessary in its good faith,
sole discretion. One 1 5-second spot each shall be reserved for AMRC's use at
both the top and the bottom of each clock hour for purposes of airing AMRC
identifications and promotional announcements relating to the Service and/or the
Programming. In addition, in the event of any unsold commercial availabilities
(and Programmer is not airing per inquiry and/or public service announcements in
such spots), AMRC may air, at its discretion, promotional announcements during
such unused spots. AMRC may also air an additional 30 second promotional spot
per hour, provided that it does not preempt any paid advertising, per inquiry or
public service announcements. AMRC shall furnish Programmer with these
promotional announcements at least three (3) days in advance, and Programmer
shall include the announcements within the Programming.
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Programmer shall only identify the System, the Programming and the Channel(s)
consistent with AMRC's own standards as developed and modified from time to
time.
(e) If, for any reason, including without limitation, causes beyond
the control of Programmer, AMRC determines, in good faith, that the Programming
does not include programming of at least the quantity, nature, content and
quality as required by Section 2.3(b) or as referenced in Appendix A hereto,
AMRC shall give Programmer written notice of such deficiency. If Programmer has
not cured such deficiency within thirty (30) days after its receipt of notice,
AMRC may, at its option, and in addition to any other remedies available to AMRC
hereunder, in law or in equity, discontinue carriage of the Programming, or any
portion thereof, effective upon notice to Programmer, and/or terminate this
Agreement.
2.4 Delivery of Programming.
(a) During the Term, Programmer shall, at its own cost and expense:
(i) cause the Programming to be received in digital signal(s) via satellite (or
other means acceptable to AMRC) at a satellite uplink facility identified in
writing by AMRC from time to time ("Uplink Faciligv"); and (ii) fully encrypt
the signal utilizing an encryption technology acceptable to AMRC. The signal(s)
and facilities used in connection with the delivery of the Programming to the
Uplink Facility shall fully comply with all applicable technical and other
requirements of AMRC and the FCC, including without limitation the technical
specifications set forth in Appendix E hereto (collectively, the "AMRC
Requirements"). AMRC reserves the right to change such requirements from time to
time, upon reasonable notice to Programmer. Programmer shall, at its own cost
and expense, secure all licenses, permits, rights-of-way, approvals, and any
other arrangements necessary or appropriate for receipt of the Programming via
satellite at the Uplink Facility.
(b) The specifications and quality of Programmer's signal(s), and
mode of delivery, shall be subject to AMRC's approval. If Programmer fails, for
any reason, to comply with the AMRC Requirements, Programmer shall immediately
take all actions necessary to correct the deficiency. In circumstances of a
failure to meet the AMRC Requirements, Programmer shall bear all reasonable
expenses of AMRC relating to its monitoring of Programmer's signal(s).
ARTICLE THREE
MARKETING AND PROMOTION OF SERVICE
3.1 Marketing and Promotion. AMRC shall have sole authority and
discretion to determine and control all aspects of marketing and promotion of,
and advertising on, the Service, including the Programming. All marketing,
promotional and advertising materials furnished by Programmer shall conform with
all applicable laws, and shall be submitted to AMRC in advance for its written
approval, which shall not be unreasonably withheld. Such written approval shall
not relieve Programmer of responsibility for ensuring the compliance of such
marketing, promotional and advertising materials with all applicable laws.
Programmer acknowledges and agrees that it has no right to use AMRC's trade
names, trademarks, service marks, trade dress, logos, designs and other
identifying marks without the prior written consent of AMRC, and that Programmer
has not and will not acquire any proprietary rights therein by reason of this
Agreement.
3.2 Programmer's Marketing and Promotion Obligations. Programmer shall
use all commercially reasonable best efforts in accordance with this Agreement
to market and promote an awareness of the Service, including the Programming,
among potential subscribers. To assist AMRC in promoting the Service, Programmer
shall provide the marketing and promotional support described in Appendix G
hereto.
3.3 Market Research. Programmer may not undertake marketing tests,
surveysg rating polls and/or other research in connection with the Programming
or the Service (collectively, the "Market Research") without AMRC's prior
written consent, which consent shall not be unreasonably withheld. If AMRC does
approve of the Marketing Research, Programmer shall furnish AMRC with copies of
all Market Research and results immediately following Programmer's receipt
thereof. AMRC acknowledges that the Marketing Research and results are highly
proprietary to Programmer, and both AMRC and Programmer shall keep the Marketing
Research and results confidential under the provisions of Section 9.2 hereof;
provided,
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however, that AMRC agrees that Programmer may repackage such market research in
its advertising sales materials for distribution to advertisers and agencies in
connection with its marketing and sales activities. AMRC shall furnish
Programmer with any Market Research and results conducted by or on behalf of
AMRC insofar as such research relates specifically to the Channel(s).
ARTICLE FOUR
SALE OF ADVERTISING/PROGRAM TIME
4.1 Sale of Advertising/Program Time.
(a) In consideration of Programmer's full performance of its
obligations hereunder, Programmer shall be entitled to retain a percentage of
Net Advertising Revenues (as defined in Appendix H hereto) derived from its sale
of (i) commercial advertising included within or adjacent to the Programming,
and (ii) program time, on each Channel (collectively, the "Advertising"),
subject to the terms and conditions of this Section. Programmer acknowledges
that it shall not have any right, title or interest in or to any Advertising or
any Net Advertising Revenues other than those which it is expressly entitled to
retain hereunder.
(b) Programmer shall use all commercially reasonable best efforts
to sell commercial advertising time and program time on each Channel as
specified in Appendix A hereto. The Advertising shall conform to the standards
of lawful advertising, and AMRC reserves the right, in its sole discretion, to
refuse to accept any advertising deemed by AMRC to be unlawful, contrary to
public policy, unsuitable, objectionable or otherwise in violation of the
standards contained in Appendix A hereto, as determined by AMRC from time to
time in its sole discretion. Nothing herein shall be deemed to preclude
Programmer from pursuing its available remedies in the event it believes that
AMRC has wrongfully refused to accept such advertising. Notwithstanding anything
contained herein to the contrary, AMRC's exercise of its authority, control and
discretion shall be reasonably exercised, and shall not unreasonably diminish
Programmer's ability to market and promote the Programming, sell advertising and
sign up new subscribers for the Service.
(c) Programmer shall have the right to designate the times during
each clock hour at which the Advertising may be transmitted.
(d) Programmer hereby assumes the responsibility and cost for
selling the Advertising on the Channel(s); provided, however, that Programmer's
selection and use of a national advertising sales representation firm (and any
subsequent change thereof) shall be subject to AMRC's prior written approval,
which shall not be unreasonably withheld.
(e) The percentage of Net Advertising Revenues to which Programmer
shall be entitled, together with terms and conditions governing Programmer's
sale of Advertising, are set forth in Appendix H hereto.
4.2 Subscriber Commissions. In addition to the consideration set forth in
Section 4.1, AMRC shall pay to Programmer the amount set forth in Appendix I
hereto ("Subcom Fee") for each New Subscriber (as defined herein) whom
Programmer is responsible for signing up for the Service at subscription rates
set by AMRC, as the same may be changed by AMRC from time to time. Programmer
shall strictly follow all sales policies established by AMRC. For purposes of
this paragraph, a "New Subscriber" means a subscriber who has fulfilled all of
his or her Service subscription obligations to AMRC (including payment
obligations) for three months, and a Subcom Fee shall become due and payable to
Programmer only after the New Subscriber has fulfilled such obligations. Except
for the Subcom Fee, Programmer shall not be entitled to any activation fee or
any other type of fees paid by New Subscribers. Programmer acknowledges that any
increase in the subscription fees during the Term shall not affect the Subcom
Fee set forth above. In addition, if AMRC reduces subscription fees for the
Service generally, the Subcom Fee shall be reduced on a proportionate basis,
provided that if AMRC stops charging subscription fees for the Service
generally, AMRC shall be relieved of any obligation to pay any future Subcom Fee
and Programmer's obligations under the remainder of this Agreement shall not be
affected thereby. Programmer expressly acknowledges and agrees that AMRC's sole
obligation herein shall be to pay a single Subcom Fee per subscriber, and that
in the event a New Subscriber identifies more than one referral source (and each
source is eligible to earn a Subcom Fee), the Subcom Fee may be split equally
among the referral sources in the sole discretion of AMRC.
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ARTICLE FIVE
TERMINATION
5.1 Termination Upon Default. Either party may terminate this Agreement
(the "Terminating Party") if the other party (the "Defaulting Party") is in
breach of or default under the provisions of this Agreement. For purposes of
this Section 5.1, a default shall be any of the following:
(a) the Defaulting Party fails to pay any amount due hereunder
within fifteen ( 15) business days after written notice is given by the other
party that the same is overdue (or shall be delinquent in such payment on more
than five occasions during the Term);
(b) the Defaulting Party fails to perform any of its covenants or
obligations hereunder in all material respects or makes any material
misrepresentation hereunder, which failure or misrepresentation is not cured
within fifteen (15) business days after written notice thereof is given by the
other party;
(c) the Defaulting Party dissolves or liquidates, or transfers all
or substantially all of its assets to another person or entity otherwise than as
permitted under Section 9.3 of this Agreement; or
(d) the Defaulting Party becomes the subject of voluntary or
involuntary bankruptcy, insolvency, reorganization or liquidation proceedings,
makes an assignment for the benefit of creditors, or admits in writing its
inability to pay its debts as they mature, or a receiver is appointed or any of
its assets or properties, and the same is not dismissed, vacated, or stayed
within ninety (90) days.
Termination under this Section 5.1 shall be effective immediately on the
date on which the Defaulting Party is given written notice of default or at the
end of any applicable cure period.
5.2 Other Remedies. If this Agreement is terminated in accordance with
the provisions set forth in Section 5.1 above, the Terminating Party shall be
entitled to exercise all remedies which may be available to it, either at law or
in equity, or both. Notwithstanding any limitation set forth in Section 5.6
hereof, in connection with the Terminating Party's recovery of actual damages
incurred as a result of the Defaulting Party's breach, the parties agree that
such actual damages shall be deemed to include (but shall not be limited to) an
amount equal to the Net Advertising Revenues received by the Terminating Party
during the 6-month period preceding the date on which the breach occurred. In
the case where AMRC is the Terminating Party, this amount shall equal at least
50% of the applicable minimum payment due to AMRC for the year in which the
breach occurred, as described in Appendix H hereto.
5.3 Regulatory approvals. If: (a) AMRC fails, for any reason, to obtain
and maintain all material FCC authorizations or other government approvals for
the provision of the Service; or (b) a final order of the FCC, or other
government agency having jurisdiction, revoking or denying renewal of the DARS
authorization(s) granted to AMRC is issued and becomes effective, this Agreement
shall terminate immediately, upon written notice to Programmer.
5.4 System Launch Failure: Business Cessation.
(a) Either party may terminate this Agreement without liability in
the event that the Commercial Operations Date does not occur, for any reason, by
December 31, 2001.
(b) AMRC may terminate this Agreement in the event it ceases, for
any reason, providing the Service altogether.
5.5 Early Termination. During the 30-day period immediately following
each of the third and fourth anniversaries of the Commercial Operations Date
(each, an "Early Termination Period"), the parties may terminate this Agreement
as provided in Appendix J hereto.
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5.6 Limitation of Liability. In no event shall either party be liable for
any indirect, consequential, or special damages, or for any lost profits, even
if advised of the possibility of the same.
ARTICLE SIX
REPRESENTATIONS, WARRANTIES AND COVENANTS
6.1 Programmer's Representations. Warranties and Covenants. Programmer
represents, warrants and covenants to AMRC, as of the date hereof and throughout
the Term, as follows:
(a) Programmer is a limited liability company duly organized and
validly existing under the laws of the State of Delaware. Programmer has full
power and authority to enter into this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement and the performance of
Programmer's obligations hereunder have been duly and validly authorized by
Programmer and no other proceedings on the part of Programmer are necessary to
authorize this Agreement or to perform its obligations hereunder. This Agreement
has been duly and validly executed and delivered by Programmer and constitutes
the legal, valid and binding obligation of Programmer enforceable in accordance
with its terms, except as may be limited by bankruptcy, insolvency or other laws
affecting generally the enforcement of creditors' rights or the application of
principles of equity. The individual executing this Agreement on behalf of
Programmer has the authority to do so. The execution, delivery and performance
of this Agreement by Programmer will not result in the breach or termination of,
or constitute a default under or conflict with any of the terms, conditions or
provisions of, any agreement or other instrument to which Programmer is a party
or by which it is bound.
(b) Programmer has the full power and authority and has obtained
all necessary rights and/or permission to grant the licenses contemplated in
Section 2.2 above. Without limiting the generality of the foregoing, Programmer
has secured all necessary rights from third parties in order to grant AMRC the
exclusive license to use the Programming as described in Section 2.2 above, and
upon request of AMRC, Programmer shall furnish appropriate documentation
evidencing such rights. The Programming, in the form delivered by Programmer to
AMRC from time to time and when used for the purpose and in the manner
contemplated by this Agreement, does not and will not infringe upon any United
States or foreign patent, copyright, trade name, trademark, service ▇▇▇▇, trade
secret, literary or dramatic right or other proprietary right of any third
person (including the right of privacy and publicity) and will not violate the
terms of any music performance rights license of AMRC (compulsory or otherwise).
(c) The receipt, transmission and use of the Programming by AMRC,
as contemplated by this Agreement, will not cause AMRC or any of its affiliates,
agents or employees to violate any domestic or foreign law, rule, regulation,
court or administrative decree. The Programming shall comply with all applicable
governmental and international laws, conventions, treaties and regulations,
including laws regarding defamatory, obscene or pornographic materials or
communications.
(d) Programmer shall maintain, at its own cost and expense,
insurance with a carrier satisfactory to AMRC concerning and covering any and
all of Programmer's obligations under this Agreement. Such insurance shall name
AMRC as an additional insured and shall include, without limitation,
comprehensive general liability (including a contractual liability endorsement),
with limits of at least one million dollars ($1,000,000.00), and errors and
omissions coverage, including intellectual property infringement liability, with
limits of at least three million dollars ($3,000,000.00). Such insurance shall
remain in force at all times during the Term hereof and for a period of five
years thereafter. At periodic intervals determined by AMRC, AMRC may require
Programmer to increase these coverage limits by a reasonable amount as AMRC may
determine is necessary in good faith. Programmer shall provide AMRC with a
certificate of insurance evidencing this coverage upon the execution hereof. At
least thirty (30) days prior to the expiration of such policy, Programmer shall
provide AMRC with appropriate proof of issuance of a policy continuing in force
and effect the insurance coverage of the insurance so expiring. Programmer shall
provide AMRC with thirty (30) days written notice of any changes in such policy;
provided, however, that Programmer shall not make any revisions to such policy
which could adversely affect AMRC's rights without AMRC's prior written consent.
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(e) Programmer shall be solely responsible for the content of the
Programming and for any advertising that it sells for distribution via the
Service. To the extent that the Programming or Advertising is not in the English
language, upon AMRC's request, Programmer shall provide to AMRC a translation
into the English language of any of the same and/or a translator to enable AMRC
to monitor such Programming. The cost of such translation shall be shared
equally by the parties.
(f) During the Term hereof, Programmer shall not, directly or
indirectly, transmit, distribute, commercially exploit or otherwise authorize,
within the areas in which AMRC is authorized by the FCC to provide service, the
reception of all or any portion of the Programming furnished to AMRC hereunder,
including the Channel Brand Name, via other distribution technologies (e.g.,
audio cable, wireless cable, Internet or other interactive and/or computer
applications), except as otherwise specifically authorized in Appendix K hereto.
(g) Programmer shall not take any action that is intended or
designed to have the effect of discouraging any licensor, subscriber, supplier
or other business associate of AMRC from maintaining the same business
relationship with AMRC. In that regard, Programmer shall not directly or
indirectly: (i) induce or attempt to influence any present or future Service
subscriber to cancel his or her subscription to the Service; or (ii) induce or
attempt to influence any employee of AMRC (including talent) to terminate his or
her employment. Programmer's obligations under this subparagraph (h) shall
survive the expiration or termination of this Agreement.
6.2 AMRC's Representations. Warranties and Covenants. AMRC represents,
warrants and covenants to Programmer AMRC, as of the date hereof and throughout
the Term, as follows:
(a) AMRC is a corporation duly organized and validly existing under
the laws of the State of Delaware. AMRC has full power and authority to enter
into this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement and the performance of AMRC's obligations hereunder
have been duly and validly authorized by AMRC and no other proceedings on the
part of AMRC are necessary to authorize this Agreement or to perform its
obligations hereunder. This Agreement has been duly and validly executed and
delivered by AMRC and constitutes the legal, valid and binding obligation of
AMRC enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other laws affecting generally the enforcement of
creditors' rights or the application of principles of equity. The individual
executing this Agreement on behalf of AMRC has the authority to-do so. The
execution, delivery and performance of this Agreement by AMRC will not result in
the breach or termination of, or constitute a default under or conflict with any
of the terms, conditions or provisions of, any agreement or other instrument to
which AMRC is a party or by which it is bound.
(b) EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, AMRC MAKES NO
WARRANTY REGARDING THE PROVISION OF THE SERVICE, INCLUDING WITHOUT LIMITATION,
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6.3 Joint Covenants.
(a) AMRC and Programmer shall each refrain from doing anything that
would tend to discredit, dishonor, reflect adversely upon, or in any manner
injure, the reputation of the other or the Service, or adversely affect the
other or the Service, or, in the case of AMRC, adversely affect AMRC's status as
a licensed DARS provider, except that a party's enforcement of its rights and
performance of its duties and obligations contained herein shall not be deemed a
violation of the provisions of this Section 6.3(a). Each party shall be governed
in all its dealings under this Agreement by the highest standards of honesty,
integrity, and fair dealing.
(b) At the request of AMRC, the parties shall jointly prepare a
plan for developing and producing the Programming, for delivering the
Programming to AMRC, for marketing and promoting the Service and
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for testing and implementing the Service ("Implementation Plan"). The
Implementation Plan shall address, at a minimum, the following:
(i) Development and production of the Programming;
(ii) Delivery of the Programming to AMRC;
(iii) Marketing and promoting the Service;
(iv) Sale of Advertising; and
(v) Testing and implementation of the Service:
(1) The schedule for implementation of the Channel(s) by
Programmer;
(2) Installation and testing of Programmer equipment
located at, and integration with, AMRC's facilities
and services;
(3) Integration of and testing of AMRC's facilities with
Programmer's means of transmitting the Programming to
the AMRC facility; and
(4) The processes and procedures for maintenance and repair.
ARTICLE SEVEN
INDEMNIFICATION
7.1 Breach or Default. AMRC and Programmer shall each indemnify, defend
and forever hold harmless the other and the other's affiliated companies and
each of the other's (and the other's affiliated companies') respective present
and former officers, shareholders, directors, employees, partners and agents,
from and against any and all losses, liabilities, claims, costs, damages,
expenses, including without limitation, fines, forfeitures, attorneys' fees,
disbursements and court and/or administrative costs (collectively, "Loss and
Expense"), arising out of the breach of or default under any term, warranty,
covenant, representation or other provision contained herein.
7.2 Program Related. Without limiting the provisions of Section 7.1
hereof, Programmer shall indemnify, defend and forever hold harmless AMRC and
AMRC's affiliated companies and each of AMRC's (and its affiliated companies')
respective present and former officers, shareholders, directors, employees,
partners and agents, from and against all Loss and Expense arising directly or
indirectly out of: (i) the development, production, supply, delivery or content
of the Programming or the marketing, promotion, transmission or use of the
Programming hereunder and any Advertising included therein or adjacent thereto;
or (ii) any alleged or proven libel, slander, defamation, invasion of the right
of privacy or publicity, violation, infringement or misappropriation of any
performance right, patent, copyright, trade name, trademark, trade secret,
literary or dramatic right, or obscenity or indecency based in whole or in part
upon the Programming and/or AMRC' s use thereof and any sponsorship, promotional
and advertising spots contained therein (provided that AMRC shall, to like
extent, indemnify Prograrnmer for any deletion or addition of material by AMRC
to the Programming which deletion from, or addition to, the Programming gives
rise to any Loss or Expense, unless such deletion or addition was required to
comply with applicable law; or (iii) the negligent or willful acts or omissions
of Programmer or its equipment and/or service vendors.
7.3 System Related. Without limiting the provisions of Section 7.1
hereof, AMRC shall indemnify, defend and forever hold harmless Programmer and
Programmer's affiliated companies and each of Programmer's (and its affiliated
companies') respective present and former officers, shareholders, directors,
employees, partners and agents, from and against all
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Loss and Expense arising directly or indirectly out of (i) the operation of the
System, or (ii) the negligent or willful acts or omissions of AMRC.
7.4 Indemnification Procedures. Each party seeking indemnity hereunder
(the "Indemnified Party") shall give prompt written notice to the other party
(the "Indemnifying Party") of any circumstances which may give rise to any Loss
or Expense under this Article 7 as soon as the Indemnified Party knows of such
circumstances; provided, however, that the failure to give such notice shall not
relieve the Indemnifying Party of its obligation to indemnify the Indemnified
Party under this Article 7. The Indemnifying Party shall, at its own cost and
expense and using counsel acceptable to the Indemnified Party, contest and
assume responsibility for the defense of such litigation, provided that the
Indemnified Party may, at the Indemnifying Party's own cost and expense,
participate in the defense of any such claim, action or suit. The Indemnifying
Party shall have the right to control the defense and any settlement of such
claim, action or suit. The Indemnifying Party shall pay all expenses and satisfy
all judgments, including reasonable attorneys' fees and litigation expenses,
which may be incurred by or rendered against the Indemnified Party in connection
therewith.
The indemnification obligations of the parties under this Article 7 shall
survive the expiration or termination of this Agreement.
ARTICLE EIGHT
FORCE MAJEURE
8.1 Force Majeure. Neither AMRC nor Programmer shall have any rights
against the other for any failure of performance due to causes beyond its
control, including without limitation, failure of the System facilities
(including general satellite or transponder failure), acts of God, fires, floods
or other catastrophes; national emergencies, insurrections, riots or wars;
strikes, lockouts, work stoppages or other labor difficulties; and any law,
order, regulation or other action of any governing authority or agency thereof.
8.2 Emergency Preemption.
(a) The carriage of Programming on the System may, in AMRC's sole
discretion, be preempted, interrupted or suspended due to unusual, abnormal or
other unforeseen situations, or conditions or for reasons beyond AMRC's control,
including without limitation, maintenance requirements or emergency conditions
experienced by AMRC; or to protect AMRC's System, personnel, facilities or
services (collectively, "Emergency Preemption").
(b) Upon notice of or otherwise becoming aware of an Emergency
Preemption, Programmer shall, upon the request of AMRC, immediately cease
transmissions of the Programming. AMRC may cause such Emergency Preemption to
occur in its sole discretion without liability to Programmer; provided, however,
that AMRC shall, to the extent possible, give reasonable notice thereof and use
all commercially reasonable best efforts to restore full carriage as soon as
practicable.
ARTICLE NINE
MISCELLANEOUS
9.1 Noncompetition Covenant:
(a) Programmer hereby covenants and agrees that it shall not,
during the Term, provide any programming or services or furnish any materials
to, or enter into any relationship with other DARS provider or any entity which
is affiliated in any manner with such provider which provides service to any
portion of the continental United States. Programmer acknowledges and agrees
that its breach of the foregoing prohibition will cause irreparable harm to AMRC
for which there is no adequate remedy at law. Accordingly, Programmer hereby
agrees that specific performance, including in the form of a mandatory
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injunction, is and will be an appropriate remedy and that AMRC shall not be
required to post a bond or other security to file for or obtain such remedy.
(b) If Programmer desires to grant, or offer, to any other third
party the right to distribute, transmit and/or authorize the reception of any
type of Asian language programming in the United States by any means (other than
the Programming included within the formats listed in Appendix A hereto, which
Programmer acknowledges shall not be offered or licensed, during the Term
hereof, to any other DARS provider which provides service to any portion of the
continental United States), Programmer shall, prior to the grant, or offer, of
such right, give AMRC written notice thereof. As part of such notice, Programmer
shall disclose to AMRC the material terms and conditions of any proposed offer
and the identity of the third party to whom Programmer is proposing to grant, or
offer, such right. Upon receipt of such notice, AMRC may offer to acquire such
programming from Programmer, whereupon Programmer may accept or reject such
offer as it may decide in its sole discretion; provided, however, that nothing
contained herein shall be deemed to restrict, hinder or otherwise delay
Programmer's absolute right to grant or offer such right to a third party at any
time following Programmer's notice thereof to AMRC.
(c) Programmer's rights, if any, to provide programming to AMRC for
transmission on other Channels is set forth in Appendix L hereto.
9.2 Confidentiality. AMRC and Programmer shall hold in confidence all
information contained in this Agreement, and any information related hereto,
including all information pertaining to pricing, Marketing Research and
subscriber lists. Such information shall not be disclosed to any third party by
either party without the prior written consent of the other party, except as
otherwise permitted in Section 3.3 hereof. Without limiting the generality of
the foregoing, neither party shall, without the written approval of the other
party, make any press release or other public announcement concerning the
parties' negotiation or execution of this Agreement or the terms hereof, except
as and to the extent that such party shall be so obligated by law, in which case
such party shall give advance notice to the other and the parties shall use
their best efforts to cause a mutually agreeable press release or announcement
to be issued.
The parties' obligations under this Section 9.2 shall survive the
expiration or termination of this Agreement.
9.3 Assignment.
(a) AMRC shall have the right to assign this Agreement, including
its rights and obligations under this Agreement, without the consent of
Programmer, to such person or entity who shall from time to time hold the FCC
authorizations pursuant to which the Service is authorized by the FCC. AMRC
shall also have the unrestricted right to assign this Agreement, or any of its
rights hereunder, upon written notice to Programmer, to any lender as collateral
security in connection with any financing arrangement of AMRC; provided, that
AMRC shall remain responsible for performance of its responsibilities hereunder.
(b) Programmer shall not assign any of its rights and/or
obligations under this Agreement to any other legal or natural person or entity
without the prior written consent of AMRC, which consent shall not be
unreasonably withheld. Any purported assignment by Programmer without AMRC's
consent shall be null and void. AMRC agrees that Programmer may collaterally
assign its rights and obligations under this Agreement to any financial
institution providing financing to Programmer as security for such loan
obligation. Programmer shall give AMRC sixty (60) days prior written notice of
any change in Control (as defined herein) of Programmer. Within thirty (30) days
of its receipt of such notice, AMRC may, at its option and in its sole
discretion, terminate this Agreement without any liability or further obligation
to Programmer or any third party, by giving Programmer written notice thereof.
Such termination shall become effective thirty (30) days after the date of
AMRC's termination notice unless Programmer has abandoned such transfer of
Control and given AMRC written notice thereof during such 30-day period. For
purposes of this paragraph, the term "Control" shall mean the power to direct
the management and policies of an entity, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.
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9.4 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their permitted assigns.
9.5 No Third Party Beneficiaries. The provisions of this Agreement are
for the exclusive benefit of the parties hereto and their permitted assigns.
Nothing contained in this Agreement will be deemed to create any third party
beneficiaries or confer any benefit or rights on or to any person not a party
hereto, and no person not a party hereto (including without limitation
customers, vendors, or creditors of Programmer) shall be entitled to enforce any
provisions hereof or exercise any rights hereunder; provided, however, that AMRC
shall be deemed to be a third party beneficiary under any arrangement under
which Programmer receives programming and/or rights thereto for the Programming.
9.6 Relationship Between the Parties. Neither AMRC nor Programmer shall
be, or hold itself out as, the agent of the other under this Agreement. Nothing
contained herein shall be deemed to create, and the parties do not intend to
create, any partnership, association, joint venture, fiduciary or agency
relationship between AMRC and Programmer, and neither party is authorized to or
shall act toward third parties or the public in any manner which would indicate
any such relationship with the other.
9.7 Notices.
(a) All notices and other communications hereunder shall be given
in writing and shall be deemed to have been duly given and effective (i) upon
receipt if delivered in person or by facsimile, (ii) one (1) day after deposit
prepaid with a national overnight express delivery service; or (iii) three (3)
days after deposit in the United States certified mail, postage prepaid. return
receipt requested:
If to AMRC:
American Mobile Radio Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Mr. ▇▇▇ ▇▇▇▇▇▇
Senior Vice President, Content and Programming
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
General Counsel
American Mobile Radio Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Programmer:
AsiaOne Network, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mr. N. ▇▇▇▇ ▇▇▇▇▇▇▇, Chairman/CEO
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
-▇▇-
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Each party may designate by notice, delivered as described in
paragraph (a) of this Section 9.7, a new address (or substitute or additional
persons) to which any notice, demand, request or communication may thereafter be
so given, served or sent.
9.8 Applicable law: Dispute Resolution.
(a) This Agreement, and the rights and obligations of the parties
hereunder. are subject to all applicable federal, state and local laws, rules
and regulations (including without limitation, the Communications Act of 1934,
as amended, and the rules and regulations of the FCC) and shall be construed in
accordance with and shall be governed by the laws of the State of New York,
without giving effect to the principles of conflict of laws thereof.
(b) In case of any controversy or claim arising out of or related
to this Agreement, the parties agree to meet to resolve such dispute in good
faith. Should such a resolution not be reached, the parties further agree that
the matter shall be settled by arbitration administered by JAMS/Endispute (or
such other alternative dispute resolution service provider as may be mutually
agreed upon by the parties) in accordance with such entity's expedited
arbitration rules, and judgment on the award rendered by the arbitrator(s) may
be entered in any court having jurisdiction thereof. The arbitration shall be
conducted in Washington, D.C. unless another location is agreed upon by the
parties.
9.9 Waiver and Severability.
(a) Neither the waiver by either of the parties hereto of a breach
of, or a default under, any of the provisions of this Agreement, nor the failure
of either of the parties, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right or privilege hereunder
shall thereafter be construed as a waiver of any preceding or subsequent breach
or default of the same or any other obligation, or as a waiver of any provision,
right, or privilege hereunder. Any waiver under this Agreement must be in
writing.
(b) In the event that any one or more of the provisions of this
Agreement shall be held by a court of competent jurisdiction to be invalid or
unenforceable in any respect, such invalidity and unenforceability shall not
affect any other provision of this Agreement, and the Agreement shall be
construed as though such invalid and/or unenforceable provision(s) had never
been contained herein.
9.10 Modification. No amendment of or modification to this Agreement
shall be valid unless made in writing and signed by the authorized
representative(s) of the parties. As to AMRC, the "authorized representatives"
means both AMRC's President or any Vice President and its General Counsel.
9.11 Headings. The headings and numbering of paragraphs in this Agreement
are for convenience only and shall not be construed to define or limit any of
the terms herein or affect the meaning or interpretation hereof.
9.12 Entire agreement. This Agreement, including all appendices hereto,
constitutes the entire agreement between the parties hereto and supersedes all
prior oral or written agreements, representations, statements, negotiations,
understandings, proposals, and undertakings with respect to the subject matter
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hereof. All appendices hereto are expressly incorporated herein by reference and
made a material part of this Agreement.
9.13 Attorneys' Fees. If any suit, appeal, or other action is commenced
by a party to establish, maintain, or enforce any right or remedy arising from
this Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable attorneys' fees and litigation or appeal expenses
incurred therein.
9.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the date first above written.
AMERICAN MOBILE RADIO CORPORATION
ASIAONE NETWORK, L.L.C.
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Appendix A
Description of Programming
The Programming shall solely consist of distinctive, high quality (in terms of
sound, content and talent, as well as music rotation, where applicable), foreign
language news, talk and variety formatted audio programming (including sports),
targeted to persons within the United States from the following countries, in
the primary native language(s) of those countries:
First Channel: China
Second Channel: India
The Programming shall conform with the standards attached hereto as Schedule
A-1, together with such other reasonable standards as may be established by AMRC
from time to time during the Term.
SCHEDULE A-1
PROGRAM AND OPERATING STANDARDS
Programmer shall observe the following policies and standards in its
preparation and production of the Programming:
1. Respectful of Faiths. The subject of religion and references to
particular faiths and tenets shall be treated with respect at all times.
2. Donation Solicitation. Requests for donations in the form of a
specific amount shall not be made if there is any suggestion that such donation
will result in miracles, physical cures or life-long prosperity. However,
statements generally requesting donations to support a broadcast or church are
permitted.
3. Treatment of Parapsychology. The advertising or promotion of fortune
telling, occultism, astrology, phrenology, palm reading, numerology,
mind-reading, character readings or subjects of the like nature
("Parapsychology") will not be broadcast unless such Parapsychology is an
integral part of the culture targeted by the Programming. Any advertising or
promotion of Parapsychology is subject to Sections 2.3(b) of the Agreement and
the remaining sections of Appendix A.
-1-
4. No Ministerial Solicitations. No invitations by a minister or other
individual appearing on a program to have listeners come and visit him or her
for consultation or the like shall be made if such invitation implies that the
listeners will receive consideration, monetary gain, or physical cures for
illness.
5. No Vending of Miracles. Any exhortation to listeners to bring money to
a church affair or service containing any suggestion that miracles, physical
cures or prosperity will result will not be broadcast.
6. Sale of Religious Artifacts. The offering for sale of religious
artifacts or other items for which listeners would send money is prohibited
unless such items are: (a) normally available in ordinary commerce; (b) part of
particular cultural or religious celebrations; or (c) clearly sold for proper
fund-raising purposes.
7. No Miracle Solicitation. Any invitation to listeners to meet at places
other than a church and/or to attend other than regular services of a church is
prohibited if the invitation, meeting or service contains any claim that
miracles, physical cures or prosperity will result.
8. No Plugola or Payola. The mention of any business activity or "plug"
for any commercial, professional or other related endeavor, except where
appropriate identification of the sponsorship is made or where contained in an
actual commercial message of a sponsor, or is otherwise lawful, is prohibited.
No commercial messages or "plugs" shall be contained in the Programming
presented over the System which refer to any business venture, profit-making
activity or other interest (other than non-commercial announcements for bona
fide charities, church activities or other public service activities) in which
Programmer or its employees is or are directly or indirectly interested without
the same having been approved in advance by AMRC or such message being announced
and logged as sponsored.
9. No Gambling. References to "dream books," the "straight line," or
other direct or indirect descriptions or solicitations relative to the "numbers
game," or the "policy game" or any other form of illegal gambling are
prohibited.
10. No Numbers Games. References to chapter and verse paragraphs,
paragraph numbers or song numbers, which involve three digits should be avoided
and, when used, must reasonably relate to a non-gambling activity.
11. Election Procedures. At least fifteen (15) days before the start of
any primary or regular election campaign, Programmer will set the rates for time
to be sold to candidates for public office and/or their supporters to make
certain that the rates charged are in conformance with applicable law and
existing AMRC policy.
12. No Illegal Announcements. No announcement or promotion prohibited by
federal or state law or regulation of any lottery or game shall be made over the
System.
13. AMRC Discretion Paramount. In accordance with AMRC's responsibility
under the Communications Act of 1934, as amended, and the rules and regulations
of the FCC, AMRC reserves the right to reject or terminate any Advertising or
Programming being presented over the System which is in conflict with AMRC
policy or which in AMRC's sole but reasonable judgment would not serve the
public interest.
14. Programming Prohibitions. Programmer shall not knowingly broadcast
any of the following programs or announcement:
(a) False Claims. False or unwarranted claims for any product or
service.
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(b) Unfair Imitation. Infringements of another advertiser's rights
through plagiarism or unfair imitation of either program ideas or copy, or any
other unfair competition.
(c) Commercial Disparagement. Any unfair disparagement of
competitors or competitive goods.
(d) Defamation, Profanity, Obscenity, Indecency. Any programs or
announcements that are defamatory, obscene, indecent, profane or vulgar
according to applicable FCC regulations or policies, either in theme or
treatment.
(e) Unauthenticated Testimonials. Any testimonials which cannot be
authenticated.
(f) Descriptions of Bodily Functions. Any presentation which
describes in an obscene or indecent manner bodily functions.
(g) Advertising. Any advertising matter or announcement which may,
in the opinion of AMRC, be materially injurious or prejudicial to the interests
of the public or the System, or to honest advertising and reputable business in
general.
(h) Contests. Any contests or promotions which are in any way
misleading or constitute a public nuisance or are likely to lead to injury to
persons or property.
(i) Telephone Conversations. Any programming in material violation
of any statute, regulation or policy, including without limitation Section
73.1206 of the FCC's rules, or any successor regulation, dealing with the taping
and/or broadcast of telephone conversations.
AMRC may waive, in writing, any of the foregoing policies in specific
instances in its sole discretion.
In any case where obvious questions of policy or interpretation arise,
Programmer will attempt in good faith to notify AMRC of the same before making
any commitments in connection therewith.
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Appendix B
Term
As used herein, the term "Commercial Operations Date" means the date
specified by AMRC in writing to Programmer, on which AMRC commences transmission
of the Service to subscribers generally. The Term of this Agreement shall end on
the fifth anniversary of the Commercial Operations Date without further action
or notice by either party; provided, this Agreement shall automatically renew
for a one year renewal term ("Renewal Term"): (1) on the fifth anniversary of
the Commercial Operation Date if, on the fourth anniversary of the Commercial
Operations Date, AMRC's share of Net Advertising Revenue for the preceding year
was at least $ 1,750,000.00; and (2) on the sixth anniversary of the Commercial
Operations Igate if, on the fifth anniversary of the Commercial Operations Date,
AMRC's share of Net Advertising Revenue for the preceding year was at least
$2,500,000.00. Upon the expiration of the Term or any Renewal Term, the
Agreement may be renewed on such terms as may be mutually agreed upon by the
parties in their sole discretion.
Appendix C
Channels
AMRC will make available two (2) full-time channels on the System to
carry the Programming (each, a "Channel"). Each Channel shall provide digital
quality for a talk format, which shall be of a quality equal to or better than
that currently provided by a Class 1 terrestrial AM radio broadcast station.
AMRC shall determine the bandwidth of each Channel in its sole discretion, as
the same may be changed from time to time by AMRC.
Appendix D
Additional Rights
Subject to mutual agreement between the parties regarding the
compensation paid to Programmer, AMRC shall also receive an exclusive license
to: (i) transmit, distribute, authorize the reception of, and otherwise exploit
the Programming via alternative distribution channels (e.g., audio cable,
wireless cable, Internet and other multimedia, interactive and/or computer
applications); and (ii) exploit any and all so-called "ancillary" rights in and
to the Programming during the term hereof, including without limitation, all
merchandising and commercial tie-up and tie-in rights and all rights relating to
the sale and distribution of compact discs, digital audio tapes and other
similar mediums containing portions of the Programming. AMRC acknowledges that
Programmer does not have any obligation to grant AMRC the rights set forth in
the preceding sentence.
Appendix E
Technical Specifications
[To be supplied by AMRC technical people]
Programmer may change the satellite or transponder used to deliver
Programmer's signal(s) to the Uplink Facility upon ninety (90) days prior
written notice to AMRC, provided that such new mode of delivery shall conform
with the AMRC Requirements.
Appendix F
Programmer Trademarks
AsiaOne
Taj Radio Network
Appendix G
Marketing and Promotion
Programmer shall expend at least a total of $250,000 during the Term
hereof, and not less than $25,000 per calendar year, for marketing and promoting
the Service over radio (other than Programmer's own terrestrial facilities) and
television broadcast stations, on DBS and cable television systems, and in
billboard, busboard, newspaper, classified advertising, promotional events,
fairs, direct mail, shopper advertising media, and other appropriate media
outlets. Upon the request of AMRC, Programmer shall furnish AMRC with vendor
invoices and other applicable documentation to substantiate the nature, extent
and cost of its marketing and promotional efforts. Subject to AMRC approval of
advertising copy and applicable media outlet, AMRC shall co-op 50% of
Programmer's required marketing and promotional expenditures (not to exceed
aggregate payments of $125,000 during the Term). Co-op payments shall be
conditioned on AMRC's receipt of appropriate affidavits of performance, ad copy
and/or such other documentation as may be reasonably required by AMRC to
substantiate the co-op advertising.
To promote the Service, Programmer shall use commercially reasonable best
efforts to air a minimum of two 30-second spots per day on each of the
terrestrial radio broadcast stations which it owns and/or operates. The spots
shall be aired ROS on a commercial availability basis. AMRC shall furnish
Programmer with these promotional announcements from time to time during the
Term.
Appendix H
Revenue Sharing
1. Programmer shall use all commercially reasonable best efforts to sell:
(i) a maximum amount of commercial advertising time not to exceed twelve (12)
minutes per clock hour (combination of 30- and 60-second spots) on each Channel,
provided that AMRC may increase this limit on the number of commercial
advertising minutes upon notice to Programmer; and (ii) program time on each
Channel. All advertising/program time shall be sold at a rate not less than a
minimum rate determined by Programmer from time to time. In accordance with
Section 9.7, Programmer shall notify AMRC of the rate and any changes thereto
for all advertising/program time. Programmer shall be solely responsible for
sales, billing, collection and ad trafficking, and for furnishing appropriate
affidavits of performance, as necessary. Programmer shall provide copies of all
commercial advertising and program contract to AMRC on monthly basis, and all
commercial advertising logs to AMRC on a weekly basis.
2. Programmer shall, on a monthly basis, remit to AMRC by wire transfer
the percentages of Net Advertising Revenues set forth in the chart below for
each Channel, but no less than the annual minimum amounts set forth therein for
each Channel (on a calendar year basis). As used herein, the term "Net
Advertising Revenues" shall mean gross ▇▇▇▇▇▇▇▇ from Programmer's sale of
program time, advertising and sponsorships included in the Programming, together
with any other gross revenues generated by Programmer (on an accrual basis) from
the transmission of the Programming on the System, less agency and
representative fees and third party sales commissions, Performing Rights License
Fees, sales taxes, and any other mutually agreed upon expense items, all of
which expenses shall be paid by Programmer, or reimbursed to AMRC if paid by
AMRC. The computation of Net Advertising Revenues shall also be subject to bad
debt allowance of 0.5% to the extent funds are not collected. All payments
remitted to AMRC shall be in U.S. Dollars. As used herein, the term "Performing
Rights License Fees" means each Channel's fair allocable share of all fees,
payments and other charges attributable to music rights licenses obtained by
AMRC in any of the copyrighted musical compositions and/or sound recordings
included in the Programming, whether resulting from negotiations or otherwise.
Revenue Share 2000/2001 2002 2003 2004 2005/2006*
Programmer Revenue 85% 65% 50% 50% 50%
AMRC Revenue 15% 35% 50% 50% 50%
Minimum to AMRC $ 125k* * $500k $ l ,000k $ l ,000k $ l ,000k* *
per Channel
* Minimum payment for 2006 shall apply, on a pro rata basis, if the Commercial
Operations Date commences in 2001.
** Pro rata, as applicable.
Minimum payments to AMRC shall be reconciled on a calendar quarter basis (with
the first and last year's payments prorated). Accordingly, if the Net
Advertising Revenues remitted to AMRC during any given calendar quarter is less
than 25% of the minimum annual payment set forth in the chart above, Programmer
shall remit the payment shortfall to AMRC with the next monthly payment due in
the first month of the succeeding calendar quarter.
3. On or prior to the twenty-fifth (25th) day of each calendar month,
Programmer shall remit to AMRC its share of Net Advertising Revenues generated
during the prior month, and deliver to AMRC a statement itemizing the
calculation of Net Advertising Revenues (together with invoices, billing
statements and other supporting documentation reasonably requested by AMRC) and
a list of the then currently outstanding accounts receivable by payee and amount
due. Any reserves proposed by Programmer to meet future cost obligations shall
be subject to AMRC's approval.
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4. Programmer shall keep and maintain accurate books and records of all
matters relating to the performance of its sales activities hereunder in
accordance with generally accepted accounting principles. During the Term of
this Agreement and for a period of three (3) years after the last remittance is
due to AMRC, Programmer shall make its books and records available for
inspection and audit by AMRC, its employees and agents, at Programmer's offices
upon reasonable advance notice to Programmer. Notwithstanding the foregoing, in
the event an audit of Programmer's books and records reveals an underpayment to
AMRC, Programmer shall pay to AMRC the amount of such underpayment and reimburse
AMRC for all expenses incurred in connection with the audit.
5. Programmer acknowledges that AMRC may market and sell special multiple
channel, bulk advertising packages at such rates as AMRC may determine in its
sole discretion. Programmer agrees to include such advertising spots within the
Programming as part of the twelve minutes of advertising to be sold hereunder at
the times specified by AMRC, subject to inventory availability. AMRC shall be
responsible for billing and collections related to such advertising, and AMRC
will remit the Net Advertising Revenues derived from such advertising to
Programmer in accordance with the percentages and procedures set forth above.
6. Programmer shall not advertise, or include in the Programming any
advertisements for, "800," "900," or "976" telephone services, or other
telephone services or similar services, which ▇▇▇▇ a caller for placing or
confirming a call that relate directly or indirectly to gambling, sexual or
romantic activities or other adult-only services, or that are directed at
children.
7. Any payment due from Programmer to AMRC that is not received by AMRC
on the date it is due shall be subject to a finance charge at a rate equal to
the lesser of one and one half percent (1 l/2%) per month or the highest rate
permitted by law, which amount shall accrue daily from the date payment was due
until the date the outstanding balance is paid in full.
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Appendix I
Subcom Fee
Twenty-Five Dollars ($25).
Appendix J
Early Termination
(a) After the third anniversary of the Commercial Operations Date, the
parties may, upon written notice given during the Early Termination Period,
terminate the Agreement as follows:
(i) AMRC may terminate the Agreement upon written notice to
Programmer given during the Early Termination Period if the total
Net Advertising Revenues generated during the twelve-month period
preceding the third anniversary of the Commercial Operations Date
does not exceed $ 1,000,000 for each Channel.
(ii) Programmer may terminate the Agreement upon 180 days' prior
written notice to AMRC given during the Early Termination Period
if AMRC shall have failed to achieve a minimum of at least
2,000,000 subscribers at any time during the twelve-month period
preceding the third anniversary of the Commercial Operations
Date.
(b) After the fourth anniversary of the Commercial Operations Date, the
parties may, upon written notice given during the Early Termination Period,
terminate the Agreement as follows:
(i) AMRC may terminate the Agreement upon written notice to
Programmer given during the Early Termination Period if the total
Net Advertising Revenues generated during the twelve-month period
preceding the fourth anniversary of the Commercial Operations
Date does not exceed $1,750,000 for each Channel.
(ii) Programmer may terminate the Agreement upon 180 days' prior
written notice to AMRC given during the Early Termination Period
if AMRC shall have failed to achieve a minimum of at least
2,750,000 subscribers at any time during the twelve-month period
preceding the fourth anniversary of the Commercial Operations
Date.
Appendix K
Reservation of Rights
[NONE]
Appendix L
Right of First Offer
If, at any time during the Term hereof, AMRC desires to (i) enter into an
agreement, written or oral, with a third-party programmer to acquire additional
programming for one or more Asian-language format channels, or (ii) develop such
programming internally, AMRC shall give Programmer written notice (the "AMRC
Notice") that it desires to acquire or develop such programming and disclose to
Programmer the terms and conditions of the proposed third party offer or
development project, including the program format of the proposed channel(s) and
the nature and quality of the program content.
Within thirty (30) days after receipt of the AMRC Notice, Programmer may
give AMRC written notice of an offer (the "Programmer Offer") to provide to AMRC
the same or similar programming. AMRC acknowledges and agrees that it shall not
enter into any agreement with a third-party programmer to acquire such
programming or develop such programming internally until after it has received
the Programmer Offer, or until after the 30th day following the date of the AMRC
Notice if no Programmer Offer is given by Programmer during that 30 day period.
ln the event that AMRC does not accept the Programmer Offer and elects
instead to acquire such additional programming from a third-party programmer or
otherwise elects to develop such programming internally, the parties agree that
Programmer shall thereafter have no further obligation to pay AMRC the minimum
per channel payments set forth in the table in Appendix H.