Programming Agreement - Wired Ventures Inc. and MSNBC Cable Channel LLC
[NBC LETTERHEAD]
June 14, 1996
Mr. Rex Ishibashi
Wired Ventures, Inc.
520 Third Street, 4th Floor
San Francisco, California 94107
Dear Mr. Ishibashi:
This Letter Agreement sets forth the terms and conditions of the
agreement pursuant to which Wired Ventures, Inc. ("Wired") will provide MSNBC
Cable Channel, L.L.C. ("MSNBC") and one or more of its affiliates with the
series of television programs described in more detail herein. This Letter
Agreement will be binding upon both parties as of the date set forth above and
govern the relationship created hereby.
1. Overview: MSNBC is currently scheduled to launch a full-time news and
information cable television programming service on July 15, 1996 ("MSNBC
Cable"), which will be designed to complement a full-time news and information
online computer service to be produced by an MSNBC Affiliate as defined below
("MSNBC Online"). Wired has agreed to provide a weekly half-hour contemporary
discussion program which is consistent with the proposal presented by Wired to
MSNBC on May 2, 1996 (a copy of which is attached hereto as Exhibit A)
tentatively entitled "Netizen TV" (the "Program"). MSNBC desires to have Wired
produce the Program at Wired's cost for initial airing on MSNBC Cable, all as
described more fully herein.
2. Production:
2.1 The parties agree that, on the terms and subject to the conditions
of this Letter Agreement, Wired shall create and supply to MSNBC up to *
episodes of the Program for initial television distribution on MSNBC Cable and
potential additional television distribution by * (such affiliates,
collectively, the "MSNBC Affiliates") throughout the world. MSNBC Affiliates
shall not include broadcast stations affiliated with the NBC Television Network
which are not owned in whole or in part, controlled, or managed by the National
Broadcasting Company, Inc. or any of its subsidiaries.
2.2 Wired shall deliver to MSNBC at the address set forth in Section
17, or such other address provided by MSNBC in accordance with Section 17, all
production materials necessary for MSNBC to commence distribution of each
episode of the Program. Such materials shall be in the form of videotape or any
other physical storage source acceptable to MSNBC, or shall be sent via
electronic transmission, and shall arrive at MSNBC no later than 8:00 P.M.
eastern time on the day before the day on which MSNBC intends to air such
episode of the Program. As part of such materials, Wired shall furnish to MSNBC
an accurate musical cue
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sheet for each episode of the Program, setting forth the number, date and time
of the episode, the titles of all musical compositions used in each episode,
length of the pieces used, names of composers, lyricists, publishers, copyright
owners, the performance society or societies with which the compositions are
registered, the type of use and its context. Wired shall be responsible for
securing all synchronization and, if necessary, master use licenses that may be
required for distribution of the Program. Wired agrees that failure to deliver
such materials for any episode of the Program in accordance with this Letter
Agreement shall be deemed to be a material breach of this Letter Agreement by
Wired.
2.3 Wired shall be responsible for providing, at its sole expense, all
of the production services required to create the Program; provided, however,
that MSNBC agrees to use reasonable efforts to work with Wired to make the
facilities and resources of MSNBC and of MSNBC Affiliates available to Wired for
use in the production of the Program at the lowest rates commercially available.
MSNBC also agrees to arrange for the license of the artwork, logos and
non-restricted NBC News archival footage (the "MSNBC Material") to Wired for
inclusion in the Program at the lowest rates commercially available. Finally,
MSNBC agrees to appoint promptly after execution of this Letter Agreement one of
its employees as a program liaison who will assist Wired in obtaining the
resources of the MSNBC Affiliates as described above.
3. Broadcasting Obligations. *
4. Ownership and Use of the Program.
4.1 Except as set forth in Sections 4.2, 4.4 and 4.5 below, the parties
hereby agree that Wired shall own the Program, including but not limited to the
individual interviews and stories that make up the Program (the "Program
Materials"), and all right, title and interest therein and thereto, including,
without limitation, all copyrights and extensions and renewals thereof under
United States law, the Berne Convention, the Universal Copyright Convention and
throughout the world in perpetuity, provided that Wired hereby grants to MSNBC
(i) a perpetual, worldwide, royalty-free, exclusive license, with a right of
sublicense to MSNBC Affiliates, to reproduce, prepare derivative works,
distribute and publicly display or perform the Program in the form, or in a form
which is substantially similar to the form, in which such Program is delivered
to MSNBC via, and in connection with, any method of transmission other than
through the Internet, now or hereafter devised, which makes programs and other
audio and/or visual recordings of any length, available for viewing in a linear
predetermined presentation (e.g., broadcast television, cable television,
pay-per-view, pay television, satellite television, closed circuit television or
video-on-demand) and (ii) a perpetual, worldwide, royalty-free, non-exclusive
license, with a right of sublicense to third parties, to reproduce, prepare
derivative works, distribute and publicly display or perform excerpts and clips
from Program and the Program Materials for the purposes described in Section
4.4(i)(c).
4.2 MSNBC and the MSNBC Affiliates shall retain all of their rights and
ownership interests in any of MSNBC's and the MSNBC Affiliates' logos,
tradenames and/or trademarks which MSNBC may make available to Wired for use in
the Program as designated by MSNBC
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in writing ("MSNBC Marks") and in any MSNBC Material which MSNBC or the MSNBC
Affiliates may make available for use in the Program as contemplated in Section
2.3. MSNBC hereby grants Wired a non-exclusive, non-transferable, royalty-free
license during the Term to use the MSNBC Marks in the Program. Wired agrees that
it shall not use the MSNBC Marks or MSNBC Materials in any manner except as
provided herein and it shall not sublicense or authorize any other person or
entity to use the MSNBC Marks, the MSNBC Materials or any footage containing the
voice or image of any MSNBC or MSNBC Affiliate television personality, without
the prior written consent of MSNBC.
4.3 Wired shall retain all of its rights and ownership interests in
Wired's logos, tradenames and/or trademarks, including Netizen TV(TM), which
Wired uses in the Program ("Wired Marks") and in the graphics provided by Wired
for use in the Program as well as the design and the "look and feel" of the
Program (the "Wired Material"). Wired hereby grants MSNBC a non-exclusive,
non-transferable, royalty-free license during the Term to use the Wired Marks
and the Wired Material as presented in the Program only. MSNBC agrees that it
shall not use the Wired Marks or Wired Material in any manner except as provided
herein and it shall not sublicense or authorize any other person or entity to
use the Wired Marks or Wired Material except as provided herein.
4.4 Except for purposes of "Interactive Delivery" (as such term is
described below in Section 4.5), MSNBC and Wired hereby agree that the parties'
rights regarding distribution and use of the Program will be as follows: (i)
MSNBC will have the right in perpetuity to air and/or distribute: (a) the
Program on MSNBC Cable an unlimited number of times throughout the world, (b)
the Program for air and/or distribution by the MSNBC Affiliates an unlimited
number of times throughout the world and (c) *; (ii) Wired will have the right
in perpetuity to air and/or distribute in any media now or hereinafter invented
any material contained within the Program which is not MSNBC Material and does
not contain MSNBC Marks; provided that *
4.5 Use of the Program and any Program Materials for purposes of
Interactive Delivery shall be permitted only as mutually agreed by the parties;
provided, however, that Wired will be free to use the Program, Program Materials
and Wired Material on its own "The Netizen" internet site *. In particular, the
parties agree to negotiate with MSNBC Online in order to find a way to use such
Program and Program Material on the MSNBC Online service or to access such
material derived from such Program and Program Material from MSNBC Online *.
"Interactive Delivery" shall mean the delivery of the Program or Program
Materials for use by an end user to a monitor or viewing screen, whereby such
delivery occurs by means of telephone lines, cable television systems, optical
fiber connections, cellular phones, satellites, wireless broadcast or other
means of transmission now known or hereafter devised, provided that the end user
has the ability to selectively manipulate the presentation to effect substantive
content changes during its uses. For purposes of clarity, it is understood that
Interactive Delivery will not include transmission of any kind other than
through the Internet, now or hereafter devised, which makes programs and other
audio and/or visual recordings of any length, available for viewing in a linear
predetermined presentation (e.g., broadcast television, cable television, pay-
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per-view, pay television, satellite television, closed circuit television or
video-on-demand) with or without selective manipulation available to the viewer.
5. Advance and Fees:
5.1 In consideration of Wired's provision of the Programs, MSNBC shall
pay Wired: (i) a non-refundable advance payment of * to be used as an up-front
payment for production of the Program, recoupable against the payments otherwise
owed by MSNBC to Wired pursuant to the terms of the next subsection, to be
payable upon execution of this Letter Agreement; and (ii), subject to the
provisions of Section 8.3, a fee of * per each completed episode of the Program
which Wired delivers to MSNBC, provided that MSNBC shall be under no obligation
to Wired to pay for any episode of the Program which MSNBC decides in its sole
discretion not to air due to Wired's failure to (i) deliver the episode on time,
(ii) meet MSNBC's standards of technical quality and program content for the
television broadcast as set forth in Section 6.4, or (iii) failure to obtain
proper music clearance for the episode. Wired shall invoice MSNBC for every
episode of the Program properly delivered hereunder, and MSNBC shall pay such
invoice no later than (30) days from the date that MSNBC receives it.
5.2 Wired agrees that it shall be responsible for making all payments
which may become due by reason of any distribution, exhibition, performance,
display, transmission, simulcast or license of the Program as authorized herein
(e.g. executory payments, or payments due under any applicable guild or union
collective bargaining agreement).
5.3 If the MSNBC Affiliates choose to air and/or distribute the
Program, MSNBC and Wired shall equally share in any license revenues received by
MSNBC arising therefrom; provided, however, that (i) MSNBC agrees that such
license revenues shall be consistent with license revenues paid by such MSNBC
Affiliates in connection with other NBC television products, (ii) MSNBC and
Wired shall mutually agree upon the license fee for any use of a full episode of
any Program by a MSNBC Affiliate within the United States pursuant to the terms
of Section 4.4(i)(b) and (iii) any costs of production which are incurred by
either MSNBC or Wired in preparing the Program for international distribution
will be deducted off-the-top prior to the splitting of such license revenues and
paid to the party providing the relevant production services.
6. Content, Editorial and Quality Control.
6.1 Except as set forth in the other provisions of this Section 6,
Wired shall be responsible for all elements of the Program and shall have
editorial control thereof.
6.2 *
6.3 MSNBC shall have the right to consult with Wired regarding the
content of the Program.
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6.4 The Program shall comply with MSNBC's obligations and legal
responsibilities and with the established broadcasting program content, business
and advertising policies of MSNBC of which Wired has been or will be advised by
MSNBC or the MSNBC Affiliates (including without limitation the NBC News Policy
and Guidelines, and NBC Broadcast Standards and Practices), and with the Rules
and Regulations of the Federal Communications Commission and any other
governmental body having jurisdiction, and that failure to comply with any of
the foregoing may render the Program unacceptable. MSNBC agrees to promptly
inform Wired of any changes to these requirements which are within the control
of MSNBC and the MSNBC Affiliates. Credits contained in the Program shall
conform to NBC Code requirements and in no event shall such credits exceed
thirty seconds (:30) in length.
6.5 MSNBC shall have the right to record any Program hereunder on its
own videotape and may make edits or alterations thereon solely in order to
insert late-breaking news announcements or to conform to time segment
requirements or to MSNBC policy, provided that such edits or alterations shall
be made in a manner which accomplishes MSNBC's purposes but alters the content
of the Program as little as possible.
6.6 If the format for any episode of the Program delivered by Wired
deviates from the general format agreed upon and Wired is unable to deliver a
corrected Program in time for air date, MSNBC may edit the Program, and Wired
will be billed for expenses incurred.
6.7 If the tape for any episode of the Program delivered by Wired, when
viewed for technical quality and accurate timings, is found to be unairable and
it is necessary to request another Program tape, Wired shall be billed for
expenses incurred by the additional viewing and timing of the replacement tape.
7. Promotion.
7.1 Wired shall furnish MSNBC with trailers, glossy prints of still
photos, synopses, casts, and other promotional material available for the proper
promotion and exploitation of the Program, if available. Wired grants to MSNBC
the right to use and license others to use the Wired Marks and the name and
likeness of, and biographical material concerning, each star and featured
performer in the Program, and fictitious persons and locales therein, for
advertising, publicity and trade purposes. Except for promotions related to the
Program itself, Wired agrees that it will not place promotional material of any
kind within the Program itself, including, but not limited to, promotional
material related to Wired's own products and services, without the prior written
consent of MSNBC.
7.2 MSNBC agrees that it shall promote and publicize the Program in a
pattern and manner which is consistent with promotion of other weekly television
programs on MSNBC Cable. Wired agrees to use its own publications and
interactive resources in a pattern and matter which are reasonably designed to
promote and publicize the Program to Wired's readers and users.
8. Term and Cancellation.
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8.1 The term of this Letter Agreement will begin on the date first set
forth above and will end November 30, 1996, unless earlier terminated.
8.2 Either party will have the right to cancel this Letter Agreement at
any time by giving written notice that the other party has breached a material
term or condition of this Letter Agreement and the breaching party fails to cure
such breach within fifteen (15) days from the date of the written notice.
8.3 *
9. Renewal Rights; First Look Option.
9.1 If MSNBC has so notified Wired by no later than * of its desire to
purchase additional episodes of the Program ("Additional Episodes"), NBC and
Wired shall enter into exclusive negotiations for the purchase by MSNBC of such
Additional Episodes. If, after good faith negotiations, MSNBC and Wired are
unable to reach a mutually acceptable agreement by *, Wired shall be free to
contract with a third party, subject to the provisions of this Agreement and
provided that for a period of * following the parties failure to reach an
agreement, MSNBC shall have the right to match any offer made by a third party
for such Additional Episodes.
9.2 If, at any time during the initial term of this Agreement, Wired
determines to create any new television programming (a "New Program"), Wired
shall provide to MSNBC a *
10. Representations & Warranties:
10.1 Each party represents and warrants to the other that: (a) it has
the right, power and authority to enter into this Agreement; (b) this Agreement
is a binding and valid obligation; and (c) there is no claim or cause of action
that would prevent its performance hereunder.
10.2 Wired represents and warrants to MSNBC that: (a) the materials
contained in the Program, other than the MSNBC Materials and the MSNBC Marks:
(i) are fully owned and originally created by Wired, in the public domain or
fully licensed for use by MSNBC, the MSNBC Affiliates and/or Wired in accordance
with the terms of this Letter Agreement, (ii) will not contain any material
which is libelous, slanderous, obscene or otherwise unprotected by the United
States Constitution, (iii) will be free of any claims, liens or encumbrances,
(iv) will not subject MSNBC to liability for violation of any laws, rules or
regulations, including, but not limited to, any labor or union rules or
regulations, and (v) will not violate or infringe the copyright, trademark,
tradename, patent, literary, intellectual, artistic or dramatic right, right of
publicity or privacy or any other right of any entity or person, (b) Wired has
paid or will pay all amounts due to third parties in connection with performance
of its obligations hereunder, (c) the use of the Wired Marks will not violate or
infringe the trademark, tradename or other right of anyone; and (d) the
performing rights of all musical compositions contained in the Program
(including any commercials for the Program) are (i) controlled by Broadcast
Music, Inc.,
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America Society of Composers, Authors, and Publishers, or SESAC, Inc., (ii) in
the public domain; or (iii) controlled by Wired.
10.3 MSNBC represents and warrants to Wired that the use of the MSNBC
Marks and the MSNBC Material in the Program will not violate or infringe the
copyright, trademark, tradename, patent, literary, intellectual, artistic or
dramatic right, right of publicity or privacy or any other right of anyone.
11. Indemnity and Limitation of Liability:
11.1 Wired shall indemnify and hold harmless MSNBC and the MSNBC
Affiliates, parent and subsidiary companies, each Program sponsor and its
advertising agency, and the respective officers, directors, agents and employees
of each, from and against liability, actions, claims, demands, losses or damages
(including reasonable attorney's fees and any punitive damages) caused by or
arising out of (i) the broadcast or other authorized use by MSNBC of the Program
and any or all of the material and performances contained therein, other than
the MSNBC Marks or the MSNBC Material or (ii) breach by Wired of any of its
representations and warranties contained herein. Such indemnity includes without
limitation any claim involving allegedly wrongful use of ideas or material in
the Program.
11.2 MSNBC shall indemnify and hold harmless Wired from and against
liability, actions, claims, demands, losses or damages (including reasonable
attorney's fees and any punitive damages) caused by or arising out of MSNBC's
violation of its representations and warranties contained herein. MSNBC's review
and approval of any elements, material or Program furnished by Wired shall not
constitute a waiver by MSNBC of the indemnity provided by Wired.
11.3 The indemnitor may, and if any indemnitee requests in writing, the
indemnitor shall assume the defense of any claim, demand or action and shall,
upon request by the indemnitee, allow the indemnitee to cooperate in the
defense. The indemnitee shall give prompt notice of any claim, demand or action
covered by this indemnity. If the indemnitee settles any such claim, demand or
action without the prior written consent of the indemnitor, the indemnitor shall
be released from this indemnity in that instance.
12. Insurance: In addition to Wired's indemnity, Wired shall immediately obtain
and maintain in full force and effect until the end of MSNBC's broadcasting
rights to the Program a television producer's liability (errors and omissions)
policy, issued by a reputable company approved by MSNBC and naming MSNBC as an
additional insured, insuring Wired's obligations under this agreement for at
least *. Said policy shall be primary and not excess of or contributory to any
other insurance provided for the benefit of or by MSNBC. Wired shall furnish
MSNBC with a certificate of insurance within ten (10) days after the execution
of this Letter Agreement.
13. Waiver/Modification: No modification or amendment to, or waiver of, this
Letter Agreement will be binding and valid unless it is in writing and executed
by the party against
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whom enforcement is sought. No waiver of a breach of any provision of this
Letter Agreement or of any default hereunder shall be deemed a waiver of any
other breach or default of this Letter Agreement.
14. Governing Law: This Letter Agreement will be governed by and construed in
accordance with the internal laws of the State of New York. This Letter
Agreement shall be subject to all applicable laws, rules and regulations of the
government of the United States and the State of New York and any agency
thereof.
15. Assignment: Neither party may assign any rights or delegate any obligations
under this Letter Agreement without the prior written consent of the other
party.
16. Relationship of the Parties: It is understood that this Letter Agreement
does not create any partnership, joint venture or employment relationship
between the parties, that both parties are acting as independent contractors
with respect to each other, and that none of the employees of either party shall
be deemed to be employees of the other party for any purpose. Each party shall
pay and be solely responsible for all contributions, taxes and premiums payable
under any and all applicable, laws, rules or regulations with respect to
employees.
17. Notices: All notices required to be given hereunder shall be deemed to have
been given (a) on the date of delivery when delivered in person, (b) on the date
of transmission when sent by telecopier with return confirmation of receipt, or
(c) one business after deposit with a nationally recognized overnight courier
service, to the following addresses and telecopier numbers, or such other
addresses and telecopier numbers as the parties may designate in writing: If to
Wired: Wired Ventures, Inc., 520 Third Street, 4th Floor, San Francisco,
California 94107, Attention: Rex Ishibashi, Telecopier No. (415) 222-6200 with a
copy to Cooley Godward Castro Huddleson & Tatum, One Maritime Plaza, 20th Floor,
San Francisco, California 94111, Attn: Kenneth L. Guernsey, Telecopier No.:
(415) 951-3699. If to MSNBC: MSNBC Cable Channel, L.L.C., 30 Rockefeller Plaza,
3rd Floor East, New York, NY 10112, Attn: David Corvo, with a copy to: National
Broadcasting Company, Inc., Law Department, 30 Rockefeller Plaza, 10th Floor
East, New York, NY 10112, Telecopier No.: (212) 664-2147.
18. Survival: Sections 4, 5.2, 5.3, 6, 10, 11, 12, 14 and 18 will survive the
expiration or termination of this Letter Agreement.
19. Entire Agreement: This Letter Agreement constitutes the entire agreement
between the parties hereto and supersedes all previous agreements, promises,
proposals, representations, understandings and negotiations (whether written or
oral) between the parties with respect to the subject matter hereof.
20. Force Majeure: Neither party will be liable to the other party for failure
to perform its obligations hereunder because such performance is prevented by a
"Force Majeure Event." A "Force Majeure Event" shall mean an act of God, war
(whether declared or not), riot, embargo, act of governmental or military
authority, strike, labor dispute, fire or other similar cause beyond the party's
control. Notwithstanding the foregoing, a party failing to perform because
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of a Force Majeure Event shall immediately use its best efforts to mitigate the
impact of any Force Majeure Event and commence performance.
21. Taxes. Wired shall be responsible for any and all taxes arising out of the
production and delivery of the Program to MSNBC pursuant to the terms of this
Letter Agreement and shall hold MSNBC harmless and protected from the assertion
of any such taxes by any taxing jurisdiction.
Please indicate acceptance of the foregoing terms and conditions by
signing the enclosed copy of this letter and returning it to me as soon as
possible.
Very truly yours
MSNBC Cable Channel, L.L.C.
By: /s/ Mark Harrington
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Name: Mark Harrington
Accepted and agreed this
18th day of June, 1996
WIRED VENTURES INC.
By: /s/ Rex O. Ishibashi
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Name: Rex O. Ishibashi
Title: Vice President - Corporate and Business Development
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