Sample Business Contracts

Underwriting Agreement [Sesame Street] - Children's Television Workshop and LookSmart Ltd.

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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

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.,
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


       (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

               (i)   CTW agrees to place a sponsor button on the homepage of the
                     Sesame Street content on PBS's website, located at
           , linking to a bridge page which shall in turn
                     link to the homepage of LookSmart's website,
            ("Sponsor Button"). Parties shall agree
                     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
                     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

          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

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

     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
          1320 Braddock Place
          Alexandria, VA 22314

          With a copy to

          Office of the General Counsel
          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

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.



By /s/ Daniel Victor

Name Daniel Victor

Title  EVP, Legal and Business Affairs
       and General Counsel


By /s/ Val Landi

Name Val Landi

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


By /s/ Michael Diefenbach

Name Michael Diefenbach

Title  Vice Pres., Sponsor Development

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