Affiliation Agreement With Rolling Stone LLC

Exhibit 10.7


AFFILIATION AGREEMENT


This AFFILIATION AGREEMENT (this "Agreement") is entered into as of this 10th day of November 1997 between JAMtv Corporation, a Delaware corporation ("JAMtv"), and Straight Arrow Publishers Company, L.P., a Delaware limited partnership ("Wenner Media").


RECITALS:


A. Wenner Media and JAMtv desire to enter into the agreements described herein providing for the integration of the Rolling Stone Content (including certain content of Rolling Stone magazine and the Rolling Stone Online website at the Rolling Stone URL) into the JAMtv Music Network to create the Rolling Stone Network. Capitalized terms used in this Agreement have the meanings ascribed to them in Section 1 below.


B. Subject to the satisfaction of the conditions precedent set forth herein and subject to the other terms and conditions set forth in this Agreement and the other Affiliation Agreements:


(i) JAMtv and Wenner Media will commence and consummate the integration
of Rolling Stone Online into the JAMtv Music Network in accordance
with the Launch Schedule to create the Rolling Stone Network;


(ii) JAMtv will provide the JAMtv Hosting Services and present the JAMtv
Content and the Rolling Stone Content on the Rolling Stone Network;


(iii) Wenner Media will deliver the Rolling Stone Content to JAMtv, grant
or cause the grant of the Wenner Media Licenses to JAMtv, and pay
certain merchandising commissions to JAMtv;


(iv) Wenner Media will provide certain advertising and promotion services
and opportunities to JAMtv in connection with Rolling Stone
magazine, as well as access to certain promotional programs, as
appropriate.


(v) JAMtv will be responsible for paying the License Fees and certain
advertising commissions to Wenner Media and for delivering a Warrant
to Wenner Media which provides for the purchase of certain shares of
common stock of JAMtv; and


(vi) from and after the Launch Date, among other things, the Rolling
Stone URL and the JAMtv URL will be integrated into and/or will
point to the Rolling Stone Network.


NOW, THEREFORE, in consideration of the Recitals (which are incorporated herein by this reference), the mutual promises contained herein, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, JAMtv and Wenner Media hereby agree as follows:


1. Defined Terms. As used in this Agreement, the following capitalized
------------- terms shall have the meanings set forth below unless otherwise defined herein. All of the Affiliation Agreements referenced below are of even date herewith unless otherwise expressly dated below.


"Affiliation Agreements" means, collectively, this Agreement, the
Escrow Agreement and the Warrant.


"America Online" means America Online, Inc., together with its
successors, assigns, and affiliates.


"AOL Rolling Stone Site" means the online site with America Online
which features certain exclusive Rolling Stone Content and other non-
exclusive Rolling Stone Content (such as .WAV files of record reviews) and
uses certain of the Rolling Stone Trademarks.


"Archival Rolling Stone Content" means the archival and historical
Rolling Stone Content or derivatives thereof which are or will be
digitized, formatted, modified, recorded, or otherwise manipulated or
stored by JAMtv to render such Rolling Stone Content suitable for use with
the Rolling Stone Network in accordance with Section 2.


"Confidential Information" means the trade secrets or other
information of a confidential nature of a party hereto, including, without
limitation, such information, arising from such party's business,
customers, or Proprietary Rights, and whether or not owned by such party or
held in confidence by such party under an obligation of confidentiality
with a third party.


"Default" means a default by a party under this Agreement, as
specified in Section 19, or under one of the other Affiliation Agreements.


"Escrow Agreement" means that certain Escrow Agreement among JAMtv,
Wenner Media, and American National Bank and Trust Company of Chicago, in
the form attached hereto as Exhibit A.


"Escrow License Fees" means the License Fees subject to deposit under
the Escrow Agreement in accordance with paragraph (d) of Section 9.


"First Payment Date" means the date of the first Scheduled License Fee
payment payable hereunder in accordance with paragraph (a) of Section 9.


"Initial Term" means the initial three (3) year term of this Agreement
specified in paragraph (a) of Section 18.


"Interactive Network" means the Internet, the World Wide Web and
online services (e.g., CompuServe, Prodigy, Microsoft Network, and Snap),
----
accessed through any interactive electronic means of distribution or
transmission now or hereafter known, including without limitation computer
networks, cable networks, fiber optic networks, satellite networks, and
wireless interactive networks; and Internet-dependent or enabled CDs, CD-
ROMs and DVDs, the principal purpose of which is obtaining, supplementing
and updating information and multimedia assets that are being provided
online.


"JAMtv Content" means (exclusive of JAMtv's rights in the Rolling
Stone Content) all of JAMtv's: (a) copyrights, whether or not registered,
registrations thereof, applications for registration thereof, and all
secondary and subsidiary rights therein; (b) service marks, trademarks,
trade dress, registrations thereof, and applications for registration
thereof, together with the goodwill symbolized thereby and connected
therewith; (c) art, audiovisual works, animations, cartoons, characters,
choreography, compilations, collective works, computer software and
programs, data, designs, emblems, films, film clips, graphics, images,
illustrations, likenesses, literary works, logos, motion pictures, musical
compositions, music videos, performances, photographs, pictorial works,
songs, song lyrics, sound recordings, scripts, screenplays, templates,
text, video recordings, copyrightable subject matter, works of authorship,
trade secrets (including without limitation customer and vendor lists), and
other proprietary rights; (d) all rights under copyright and moral rights
associated with the foregoing; (e) all renewals, extensions, continuations,
derivative works, enhancements, improvements, modifications, updates, new


releases or other revisions of the foregoing; (f) all publicity rights or
privacy rights (or waivers or quitclaims thereof) of any person or entity,
and (g) all rights corresponding to the foregoing throughout the world; all
of the foregoing which any of JAMtv or its employees, consultants or
representatives has created or may hereafter create, has licensed or may
hereafter license, or has acquired or may hereafter acquire, in any form
and on any medium now known or hereafter developed, whether tangible,
printed, recorded, digitized, fixed, stored, electronic, or otherwise
embodied, and including, without limitation, such content described on
Schedule 1 hereto.
----------


"JAMtv Hosting Services" means the services provided by JAMtv in
accordance with Section 2.


"JAMtv Music Network" means the interactive multimedia site on the
Interactive Network currently hosted by JAMtv at the JAMtv URL or any other
location or site on the Interactive Network through which JAMtv places,
broadcasts, downloads, transmits, or distributes JAMtv Content (or, after
the Launch Date, any Rolling Stone Content pursuant hereto), together with
any affiliated radio station sites and participating venue sites on the
Interactive Network.


"JAMtv URL" means the uniform resource locator `http://www.jamtv.com'
and any and all extensions thereof.


"Launch Date" means the completion date of the initial integration of
the JAMtv Music Network and Rolling Stone Online into the Rolling Stone
Network, as mutually accepted by JAMtv and Wenner Media.


"Launch Schedule" means the tasks to be performed by JAMtv and Wenner
Media to commence and consummate the integration of Rolling Stone Online,
the Rolling Stone Trademarks, and the Rolling Stone Content into the JAMtv
Music Network to create the Rolling Stone Network and the time line
therefor, as such tasks and time line are more particularly described in
Section 2 and on Schedule 1.
----------


"License Fees" means the Scheduled License Fees and the Trigger
License Fee.


"Microsoft Button" means the Interactive Network enabled link from
Microsoft Corporation's Internet Explorer 4.0 (and later versions, when
available), which presently points to the Rolling Stone Online site
maintained by Wenner Media at the Rolling Stone URL and which shall (in
accordance with paragraph (c) of Section 8) point to the Rolling Stone
Network from and after the Launch Date.


"MusicNet" means a prior joint venture of Wenner Media (which is no
longer operating or in existence, and is commonly referred to by Wenner
Media as `MusicNet') involving Rolling Stone Content, including
specifically recorded interviews with various artists (which interviews are
the property of Wenner Media but not currently in its possession).


"Net Revenue" means aggregate gross invoice amounts minus standard
discounts and actual returns.


"Network Icon" means a printed icon or logo of type, style, and design
to be mutually agreed upon between the parties for placement at certain
designated locations in Rolling Stone magazine which will refer to related
supplementary materials and multimedia assets available on the Rolling
Stone Network in accordance with Section 8.


"Proprietary Rights" means any copyright, trademark, trade name, trade
dress, service mark, domain name, invention, discovery, patent, patent
applications, trade secret, rights of publicity, and any other proprietary
interests, including but not limited to rights in HTML and/or VRML code,
CGI and/or Perl scripts, JavaScript code and Java code or applets and tools
or techniques developed, page designs, layouts, graphic images, and/or
styles, and page and/or form templates developed.


"Qualified Public Offering" means a primary or secondary sale of
shares of common stock of JAMtv to the public pursuant to a public offering
registered under the Securities Act of 1933, as amended, which shall be
consummated where the aggregate net proceeds to JAMtv (after deducting
underwriting discounts and commissions and expenses of the offering) from
the offering of the shares of common stock so registered are at least
$15,000,000.


"Qualified Private Offering" means a private offering of equity
securities of JAMtv which shall be consummated where the aggregate net
proceeds to JAMtv from the offering of such securities are at least
$15,000,000.


"Renewal Term" means the subsequent five (5) year renewal term or any
other renewal term of this Agreement specified in paragraph (b) of Section
18.


"Rolling Stone Content" means the content of Wenner Media described on
Schedule 2 hereto.
----------


"Rolling Stone Merchandise" means merchandise (including without
limitation books, magazine back issues, compact disks, and clothing)
incorporating, embodying or displaying Rolling Stone Content or Rolling
Stone Trademarks.


"Rolling Stone Network" means JAMtv's interactive multimedia site(s)
available on the Interactive Network (including without limitation any one
or more alternatively named networks and/or sites available on the
Interactive Network) resulting from the integration of Rolling Stone Online
into the JAMtv Music Network pursuant hereto, as updated, modified, or
supplemented from time to time.


"Rolling Stone Online" means the World Wide Website hosted by Wenner
Media before the Launch Date at the Rolling Stone URL for Rolling Stone
Content and on which JAMtv shall after the Launch Date, pursuant hereto,
place, broadcast, download, transmit, or distribute Rolling Stone Content
(and JAMtv Content pursuant hereto).


"Rolling Stone Trademarks" means the trademarks, service marks and
logos listed on Schedule 3 hereto, and the trade dress of Rolling Stone
----------
magazine.


"Rolling Stone URL" means the uniform resource locator
`http://www.rollingstone.com' and any and all extensions thereof.


"Scheduled License Fees" means the license fees payable by JAMtv in
accordance with paragraphs (a), (b), (c), (d) and (e) of Section 9.


"Term" means the Initial Term or any Renewal Term.


"Third Party Restrictions" means the restrictions imposed by third
parties on Wenner Media's rights in Rolling Stone Content provided by third
parties, as such restrictions are more particularly described in paragraph
(b) of Section 5.


"Trigger Event" means either a Qualified Public Offering or a
Qualified Private Offering occurring before the expiration or termination
of the Initial Term or any Renewal Term.


"Trigger License Fee" means the license fee payable by JAMtv in
accordance with paragraph (f) of Section 9.


"Warrant" means that certain Warrant, issued by JAMtv to Wenner Media,
in the form attached hereto as Exhibit B.


"Wenner Media Licenses" means the licenses and rights granted to JAMtv
pursuant to this Agreement.


2. JAMtv Hosting Services. JAMtv will install and host, at no cost to
---------------------- Wenner Media, the Rolling Stone Online site as redesigned and incorporated into the Rolling Stone Network on its servers in Chicago (or elsewhere) and use its best efforts to provide at all times commercially reasonable access at competitive speeds to the Rolling Stone Network for a reasonable number (expected to increase significantly over time) of simultaneous audio, video and database users located anywhere on the Internet. In accordance therewith, JAMtv will: (a) migrate and integrate Rolling Stone Online and other Rolling Stone Content (including, without limitation, the Rolling Stone Content on the AOL Rolling Stone Site which is not exclusively licensed to America Online) into the JAMtv Music Network to create the Rolling Stone Network; (b) digitize and integrate existing and future Rolling Stone Content (including, without limitation, the Rolling Stone Content on the AOL Rolling Stone Site which is not exclusively licensed to America Online and the Archival Rolling Stone Content) as it deems appropriate for use on the Rolling Stone Network; (c) maintain, support and further develop the Rolling Stone Network, including without limitation developing and acquiring new JAMtv programming, acquiring and maintaining such technological advances as are necessary to develop and maintain a competitive advantage in the field of music and related networks on the Interactive Network and consistent with the quality of the premiere music network on the Interactive Network; and (d) promote, distribute, and offer to sell Rolling Stone Merchandise on the Rolling Stone Network. JAMtv may, at any time, in its sole discretion after the Launch Date, change, expand, alter or redesignate the physical server(s) for the Rolling Stone Network (and associated servers for Rolling Stone Online, if any, and the JAMtv Music Network) as well as their physical locations in order to enhance, optimize, simplify, consolidate or otherwise integrate the performance and other operating characteristics of all of the sites on the Interactive Network which collectively constitute the Rolling Stone Network. The web site constituting the home page of the Rolling Stone Network shall be called the "Rolling Stone Network," unless the parties agree otherwise. JAMtv will also migrate, maintain and support, but not provide any content for, Wenner Media's US magazine, Men's Journal and Cease Fire Web sites at their respective URLs; provided that, Wenner Media will provide fractional page advertisements to JAMtv a minimum of four times per year in each of US magazine (one-third or one-half page ads) and Men's Journal (one-quarter or one-half page ads), the specific issues and placement to be determined in Wenner Media's sole discretion.


3. JAMtv Content. In accordance with and subject to the terms more
------------- particularly described on Schedule 1 attached hereto, JAMtv will make the JAMtv
---------- Content available to the Rolling Stone Network.


4. Rolling Stone Content. In accordance with and subject to the
--------------------- following terms and the terms more particularly described on Schedule 2 attached
---------- hereto, Wenner Media will develop, create, and acquire, and make available to JAMtv, to the extent not prohibited by Third Party Restrictions, the Rolling Stone Content at no cost to JAMtv other than as expressly provided in this Agreement, provided Wenner Media possesses the necessary Proprietary Rights thereto.


(a) Access and Delivery. Wenner Media shall provide JAMtv, at
-------------------
reasonable times and from time to time, access to the facilities where
Rolling Stone Content is or may be stored in order to access, copy,
duplicate, digitize, retrieve, and utilize the Rolling Stone Content.
Wenner Media shall provide JAMtv with reasonable assistance and technical
support pursuant thereto including, without limitation, provision and
shipping to JAMtv of recordings, CDs or other copies


of the Rolling Stone Content or transmission thereof by electronic,
satellite, Internet, or telecommunications means to JAMtv. JAMtv will have
access to such new Rolling Stone Content to be published in Rolling Stone
magazine on or before the on sale date which is included in the official
Rolling Stone publishing schedule for the issue of Rolling Stone magazine
in which such Rolling Stone Content is to appear. Wenner Media and JAMtv
will provide to each other, at no cost to the other, access to and
appropriate copies of statistics, charts, lists, sales figures, and other
data related to activities on the Rolling Stone Network which each of them
may obtain, purchase, develop or otherwise possess.


(b) Form. Wenner Media will provide JAMtv with (1) electronic, CD, or
----
digital copies of Rolling Stone Content in server ready format (except for
Archival Rolling Stone Content more than five years old which may be
provided or delivered in whatever form it is presently available) and (2)
color copies, of typeset quality, of all trademarks, service marks, design
logos, and artwork comprising Rolling Stone Content.


(c) Acquisition and Creation of Rolling Stone Content. To the extent
-------------------------------------------------
consistent with Wenner Media's agreements with contributors, writers,
photographers, promoters, artists, musicians, and other originators,
creators, owners, and licensors of Rolling Stone Content, Wenner Media will
in good faith develop, create, and acquire additional Rolling Stone Content
upon terms consistent with the Wenner Media License granted hereunder.
Wenner Media will in good faith use reasonable efforts to acquire such
incremental or incidental rights necessary to use on the Rolling Stone
Network, Rolling Stone Content to which it does not otherwise have the
necessary Proprietary Rights sufficient to permit such use, whenever an
opportunity to acquire such rights arises by virtue of any contract
negotiations or discussions between Wenner Media and any originator,
creator, owner, or licensor (or any agent or manager thereof) of rights
covered by the definition of Rolling Stone Content (including without
limitation such rights relating to any literary, artistic, or photographic
contribution, interview, live performance, or studio session); provided
that the incremental reasonable out-of-pocket costs associated therewith
that Wenner Media would not otherwise incur in the ordinary course of
business for Rolling Stone magazine or for the AOL Rolling Stone Site will
be promptly reimbursed by JAMtv (provided that JAMtv has agreed in writing
to such costs prior to their being incurred). Wenner Media shall notify
JAMtv upon Wenner Media's acquisition of any significant new Rolling Stone
Content out of the ordinary course of business and, provided it possesses
the necessary Proprietary Rights sufficient to permit use thereof on the
Rolling Stone Network, will make all such Rolling Stone Content readily
available to JAMtv in accordance with paragraph (a) above. Wenner Media
will also use reasonable efforts to assist JAMtv in identifying, soliciting
and contracting with writers and other talent which the parties believe can
make substantial contributions to the content on the Rolling Stone Network.
Wenner Media and the Rolling Stone Online staff will assist JAMtv in
developing new sections, areas, features, and other elements for the
Rolling Stone Network including, without limitation, weekly events, trivia
and photography games and quizzes, personals and polls online, celebrity
chats, music critics round tables, and gossip columns. In addition, Wenner
Media and the Rolling Stone Online staff will assist JAMtv in contacting
and developing, with major third party Internet businesses (such as Yahoo,
Excite, Infoseek, Microsoft Corporation, America Online, and Netscape), new
brand opportunities, products and services for such items as branded
Rolling Stone Network webcasts for Yahoo, branded Rolling Stone Network
interviews, and branded Rolling Stone Network online celebrity chats.


(d) Rolling Stone Staffing. Wenner Media will maintain a sufficient
----------------------
Rolling Stone Online staff throughout the Term to meet its content
production responsibilities under this Agreement. Wenner Media, at JAMtv's
expense (other than two trips per year at Wenner Media's expense, staff to
be sent at Wenner Media's discretion) will direct appropriate senior
members of the Rolling Stone Online staff to visit JAMtv offices in Chicago
on a regular basis to plan and


coordinate the activities of the parties in providing the content for the
Rolling Stone Network and will provide one or more work spaces in the
Wenner Media offices in New York to be used from time to time by JAMtv
personnel in connection with their visits to New York for similar
coordination and planning meetings, which work spaces need not be the same
on each visit.


5. Content License.
---------------


(a) Grant. Subject to the Third Party Restrictions, Wenner Media
-----
hereby grants to JAMtv an exclusive (as defined in Section 12 hereof)
worldwide license to and right to use and exploit the Rolling Stone Content
(including without limitation through the reproduction, translation,
printing, adaptation, modification, reformatting, publishing, alteration,
digitizing, capturing, editing, cropping, combination, synchronization,
exhibition, performance, display, and transmission thereof in any form and
through any medium now known or later developed) in connection with the
Rolling Stone Network and the design, operation, distribution, display,
transmission, marketing, advertising, and promotion thereof.
Notwithstanding the foregoing, JAMtv shall not sublicense any Rolling Stone
Content to any entity reasonably deemed by Wenner Media to be a competitor
of Wenner Media.


(b) Third Party Restrictions. JAMtv acknowledges that Wenner Media
------------------------
does not possess all of the Proprietary Rights necessary to provide and
license certain Rolling Stone Content for use on the Rolling Stone Network
because certain Rolling Stone Content is subject to Third Party
Restrictions. Wenner Media will, upon JAMtv's request, provide JAMtv with
copies of documentation describing specific Third Party Restrictions or
will disclose to JAMtv the nature, duration, scope, and other material
terms of such Third Party Restrictions in reasonable detail. Wenner Media
shall have no obligation to obtain all necessary rights to use such Rolling
Stone Content in connection with the Rolling Stone Network unless it does
so in the ordinary course of business in connection with Rolling Stone
magazine or for the AOL Rolling Stone Site; provided that Wenner Media will
in good faith use reasonable efforts to obtain such rights if JAMtv agrees
in advance in writing to pay the reasonable out-of-pocket costs of Wenner
Media associated therewith which Wenner Media would not otherwise have
incurred in the ordinary course of business for Rolling Stone magazine or
for the AOL Rolling Stone Site.


(c) First Offer to JAMtv. If Wenner Media is unable, despite its
--------------------
reasonable efforts, to acquire or license the rights covered by the
definition of Rolling Stone Content pursuant to the preceding paragraphs,
Wenner Media will reasonably cooperate with JAMtv to assist JAMtv in
acquiring or licensing such rights.


6. Trademark License.
-----------------


(a) Grant. Subject to the terms and conditions of this Agreement,
-----
Wenner Media hereby grants to JAMtv a right and license to use the Rolling
Stone Trademarks and the Rolling Stone URL solely in connection with the
Rolling Stone Network and the design, operation, distribution, display,
transmission, marketing, advertising and promotion thereof.


(b) Quality Control. Wenner Media shall have the right to exercise
---------------
quality control over the Rolling Stone Network and JAMtv's use of the
Rolling Stone Trademarks to that degree necessary, in the reasonable
opinion of Wenner Media, to maintain the validity and enforceabil ...