Underwriting Agreement [Sesame Street] - Children's Television Workshop and LookSmart Ltd.
This Agreement dated June 28, 1999, is made by and between Children's Television
Workshop ("CTW") a New York not-for-profit corporation with offices located at
One Lincoln Plaza, New york, NY 10023, and LookSmart Ltd ("LookSmart"), a
closely held private company with offices located at 487 Bryant Street, San
Francisco, CA 94107, and, solely with respect to paragraphs 4(a)(ii), 4(a)(iii),
4(b), 4(c) 7(b), 7(c), 11, 12 and 14, the Public Broadcasting Service ("PBS"), a
non-profit District of Columbia corporation having its principal place of
business at 1320 Braddock Place, Alexandria, VA 22314 (collectively, the
"Parties").
In consideration for the mutual obligations described below, the Parties hereby
agree as follows:
1. Television Series (the "Program")
(a) Title of the Program: "Sesame Street"
(b) Approximate length of each program: Sixty minutes (60:00)
(c) Broadcast distribution: Sesame Street is made available by PBS for
broadcast to all PBS member stations in the United States no less than
twice each weekday and once on Sundays.
2. Term
The "Term" of this Agreement shall be three years as follows:
. Year 1 - Season 31 of the Program (spanning approximately all of
calendar year 2000)
. Year 2 - Season 32 of the Program (spanning approximately all of
calendar year 2001)
. Year 3 - Season 33 of the Program (spanning approximately all of
calendar year 2002)
Unless either CTW or LookSmart provides the other with a written
notification terminating this Agreement upon the conclusion of Year 3 (i.e.,
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Season 33 of the Program) by September 1, 2001, the "Term" shall also include
the following:
. Year 4 - Season 34 of the Program (spanning approximately all of
calendar year 2003)
. Year 5 - Season 35 of the Program (spanning approximately all of
calendar year 2004)
In the event that the Term concludes with Year 3, CTW shall be free to
seek a new sponsor(s) without restriction and without further obligation of any
kind whatsoever to LookSmart for the Seasons 34 and 35 of the Program.
3. National Underwriting Credit
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(a) CTW and LookSmart agree that LookSmart will receive a 15-second
underwriting credit appearing before and after each broadcast of
the Program on PBS (the "Billboard"). LookSmart's Billboard will be
rotated with other sponsors of the Program. LookSmart and CTW will
mutually determine the content and form of the Billboard. All
aspects of LookSmart's sponsorship of the Program, including the
Billboard, shall be in accordance with PBS sponsorship guidelines
and policies and FCC rules and regulations in force at the time of
broadcast. LookSmart will produce and deliver its Billboard to CTW
according to a mutually agreed upon schedule.
(b) LookSmart will be the exclusive national underwriter (i.e.,
receiving sponsorship credits before and after the show) for the
PBS broadcast of the Sesame Street TV series in the category of
Internet search engine/directory.
(c) Parties agree that LookSmart will be recognized as a sponsor of the
Program on all appropriate press materials for the Program on PBS,
as determined by CTW.
4. PBS
(a) Promotional Benefits on www.PBS.org
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(i) CTW agrees to place a sponsor button on the homepage of the
Sesame Street content on PBS's website, located at
www.PBS.org, linking to a bridge page which shall in turn
link to the homepage of LookSmart's website,
www.looksmart.com ("Sponsor Button"). Parties shall agree
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upon the location, size, font, and format of such Sponsor
Button, which must comply with the PBS Kids Sponsorship
Guidelines, as may be modified from time to time by PBS.
(ii) PBS and CTW agree that no other company in LookSmart's
category (i.e., Internet search engine/directory) will be
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promoted within the Sesame Street site on PBS's website as
a sponsor or in a banner advertisement, if any, during the
Term. PBS currently does not allow banner advertising on
any kids sites within PBS Online.
(iii) Parties agree to discuss in good faith further promotional
opportunities within the Sesame Street content on PBS's
website for LookSmart's sponsorship of the Program.
(b) Other Promotional Efforts
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(i) Parties agree to cooperate on a press effort announcing
LookSmart's sponsorship of the Program and LookSmart's
relationship with PBS.
(ii) PBS, on behalf of the PBS Sponsorship Group, agrees to
assign a client service person to LookSmart in connection
with its sponsorship of the Program.
(c) Payment to PBS
Any payments due to PBS from CTW based on this Agreement shall be made
in accordance with prior agreement between PBS and CTW.
5. Payments and Expenses
(a) In consideration for the underwriting credit and other sponsorship
benefits (including the promotional benefits), LookSmart guarantees it
will pay CTW One Million Nine Hundred and Fifty Thousand Dollars
($1,950,000.00) per year, in accordance with the following payment
schedule:
Year 1:
$487,500.00 Upon execution of this Agreement
$487,500.00 Upon initial broadcast of Year 1 (currently
scheduled for December 1999)
$487,500.00 Three months after initial broadcast
$487,500.00 Six months after initial broadcast
Years 2 and 3 (and 4 and 5, if applicable)
$975,000.00 Upon initial broadcast of each Year
$487,500.00 Three months after initial broadcast
$487,500.00 Six months after initial broadcast
LookSmart will make any such other payments as specifically provided
elsewhere in this Agreement, if any.
(b) LookSmart shall make such payments to CTW by (i) check payable to
Children's Television Workshop and sent to Children's Television
Workshop, P.O. Box 5539 GPO, New York, NY 10087-5539, or (ii) sending
a wire transfer the amount due to Morgan Guaranty Trust Company, ABA
Number 031-100-238, for the account of Children's Television Workshop,
Account No. 162-54-451.
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(c) All sums payable to CTW under this Agreement that are not paid
within 30 days of the due date will accrue interest from the date
until the date paid, at the highest rate permissible by law.
(d) Except as expressly stated, each party will be responsible for
paying its own costs and clearing all third party rights in
connection with fulfilling its obligations under this Agreement.
6. Ownership
(a) As between the parties, CTW shall own all rights, title and interest
(including all copyrights and all renewals and extensions of such
copyrights) throughout the world in perpetuity in all current and
future media to the "Sesame Street" programs, the Sesame Street Muppet
characters, "Sesame Street" name, any sponsorship tagline or logo
created (excluding any LookSmart trademark incorporated into the
tagline or logo), and all materials created in connection with the
foregoing. Except as expressly stated in the Agreement, CTW shall be
free to exercise such rights at any time without any obligation to the
other parties.
(b) Except as provided in Paragraph 7(a), LookSmart shall own all rights,
title and interest (including all copyrights and all renewals and
extensions of such copyrights) throughout the world in perpetuity in
all current and future media to its underwriting credit, any trademark
or trade name owned or controlled by LookSmart and any materials
created by LookSmart in connection with the foregoing.
7. Approvals
(a) CTW shall have prior written approval over LookSmart's Billboard.
(b) Each party shall have prior written approval over any use by any other
party, in accordance with this Agreement, of trade names, trademarks
or copyrights owned or controlled by it. CTW's approval rights include
approval of any reference to LookSmart's sponsorship of the Program in
any LookSmart materials.
(c) Each party will be reasonable in exercising its approval rights under
this Agreement.
8. Termination
In addition to any other grounds for termination specifically provided for
in this Agreement, CTW and LookSmart shall have the right to terminate this
Agreement if
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the other party breaches any of its material obligations and fails to cure
such breach within 30 days of written notice of the breach. Except just as
stated no party has the right to cancel any of its obligations under this
Agreement. Upon termination of the Agreement, LookSmart will immediately
discontinue using any material referring to LookSmart's sponsorship of the
Program and return all such materials belonging to CTW. In the event that
the termination is due to a material breach by LookSmart, all payments not
yet made shall become immediately due and payable to CTW.
9. No Sublicensing or Assignment
(a) Neither CTW nor LookSmart may sublicense or assign any of its rights
or obligations under the Agreement without the prior written consent
of the other parties.
(b) In the event that LookSmart intends to enter into a transaction or
series of transactions that will result in the transfer of (i) all or
substantially all of LookSmart's assets, stock or indicia of ownership
to any entity other than an existing affiliate, (ii) 25% or more of
the outstanding voting securities of LookSmart, or (iii) the right to
name 25% or more of the member of the board of directors or other
managing body of LookSmart, LookSmart shall immediately give written
notice to CTW and CTW shall have the right to elect not to continue
this Agreement with the newly controlling entity, thereby immediately
terminating this Agreement. If CTW does not elect to terminate this
Agreement, then this Agreement will continue with the newly
controlling entity. LookSmart shall cooperate with CTW and provide
relevant information to CTW to assist CTW in making such
determination.
10. Representations and Warranties
Each of CTW and LookSmart represents and warrants that the materials it
furnishes for use by the other party under this Agreement will not infringe
or violate the rights of any third party if used as authorized. LookSmart
represents and warrants that it will use the Sesame Street brand and
materials furnished by CTW only as permitted under this Agreement and will
exercise its rights under this Agreement in compliance with all applicable
laws and regulations.
11. Indemnity
Each of CTW and LookSmart and PBS shall at all times indemnify and hold
harmless the other party and their trustees, directors, officers, employees
and agents from and against the full amount of all losses, liabilities and
expenses (including reasonable attorney's fees) of any kind due to a third
party claim arising out of the indemnifying party's breach of any of its
agreements, representations or warranties under this
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Agreement. The indemnified party will give the indemnifying party prompt
written notice of any claim and the indemnifying party will have full
control of the defense of such litigation. The indemnified party will have
the right, at its sole cost and expense, to participate in the defense of
any such claim.
12. Notice
All notices, requests for approvals, and approvals under this Agreement
shall be in writing and mailed, express delivered, or faxed to the other
party.
To CTW:
Sherrie Rollins Westin
Executive Vice President, Marketing and Communications
Children's Television Workshop
One Lincoln Plaza
New York, NY 10023
With a copy to
Dan Victor, Esq.
Executive Vice President and General Counsel
Children's Television Workshop
One Lincoln Plaza
New York, NY 10023
To LookSmart:
To PBS:
Michael Diefenbach
Vice President, Sponsor Development
PBS
1320 Braddock Place
Alexandria, VA 22314
With a copy to
Office of the General Counsel
PBS
1320 Braddock Place
Alexandria, VA 22314
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13. Force Majeure
In the event that production or broadcast of the Program is delayed or
canceled by reason of act of God, fire, lockout, strike or other labor
dispute, riot or civil disorder, war or armed insurrection, enactment,
rule, act or order of government, mechanical failure, or any other force
majeure cause or reason beyond CTW's control, then CTW shall produce and/or
arrange for broadcast distribution as soon as practicable after any such
event.
14. Entire Agreement
(i) This Agreement constitutes the entire agreement between the parties
and the parties may make any changes only in writing. This Agreement, and
its construction and effect, will be determined and construed in accordance
with the substantive laws of the state of New York (without reference to
conflict of laws) with respect to agreements to be fully performed in New
York State.
(ii) This Agreement in no way alters the agreement between CTW and PBS with
respect to underwriting of the Program.
ACCEPTED AND AGREED
CHILDREN'S TELEVISION WORKSHOP
By /s/ Daniel Victor
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Name Daniel Victor
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Title EVP, Legal and Business Affairs
and General Counsel
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LOOKSMART, LTD
By /s/ Val Landi
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Name Val Landi
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Title SR VP/Marketing & Media Services
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AS TO PARAGRAPHS 4(a)(ii), 4(a)(iii), 4(b), 4(c), 7(b), 7(c), 11, 12 and 14
ONLY:
PUBLIC BROADCASTING SERVICE
By /s/ Michael Diefenbach
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Name Michael Diefenbach
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Title Vice Pres., Sponsor Development
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