Exhibit 10.7
PROGRAMMING DISTRIBUTION AGREEMENT
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THIS PROGRAMMING DISTRIBUTION AGREEMENT ("Agreement") is made as of the 1st day
of December, 1994, by and between Jones Education Networks, Inc., a Colorado
corporation ("Jones"), and Telecom Holding Company, Ltd., a corporation
organized under the laws of the Kingdom of Thailand ("Distributor"), whose
address is Fortune House No. 1, Ratchada Phisek Road, Huay KHWANG, Bangkok
10310, Thailand.
IN CONSIDERATION OF THE MUTUAL COVENANTS, STIPULATIONS AND REPRESENTATIONS
CONTAINED HEREIN, THE PARTIES TO THIS AGREEMENT AGREE AS FOLLOWS:
1. GRANT OF EXCLUSIVE LICENSE
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Subject to the terms and conditions of this Agreement, Jones hereby grants
to Distributor the license to exhibit or distribute in the Kingdom of
Thailand, via satellite, video tape or other means to all variations of
cable television, satellite master antenna television, multipoint
distribution system, multipoint multichannel distribution system,
television receive-only satellite receiver, direct broadcast satellite or
any other electronic means used to deliver cable television programming to
customers, the programming identified on Exhibit A attached to this
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Agreement, as such Exhibit may be amended from time to time in accordance
with Section 3(a) hereof (the "Programming"). This license shall be
exclusive during the initial one-year term of this Agreement.
2. TERM AND TERMINATION
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(a) Unless earlier terminated as provided in this Agreement, the initial
term of this Agreement shall terminate one year from the Launch Date (as
defined in Section 3(b) below). This Agreement shall automatically renew
on a non-exclusive basis for two successive one (1) year terms, unless
either party gives written notice of termination at least forty-five (45)
days prior to the expiration of the then current one-year term or this
Agreement is superseded by another agreement between Distributor and Jones.
(b) Except as otherwise provided herein, neither Distributor nor Jones may
terminate this Agreement except upon sixty (60) days prior written notice
and then only if the other has made a material misrepresentation in this
Agreement or breaches any of its material obligations in this Agreement and
such
misrepresentation or breach (which shall be specified in such notice) is
not or cannot be cured within sixty (60) days of such notice.
3. CONTENT OF PROGRAMMING
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(a) Jones shall have the exclusive authority to determine from time to time
the content, selection and format of the programming that will constitute
the Programming, and shall have the right to amend Exhibit A from time to
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time during the term of this Agreement to change, substitute or alter the
description of the Programming, provided that the Programming shall always
be educational in nature, and provided further that any of such amendments,
changes, substitutions and alterations shall not materially affect the
value of the Programming as contemplated in Exhibit A.
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(b) Commencing on or before March 1, 1995, Jones shall make available for
transfer to Distributor, FOB Englewood, Colorado, or such other no more
distant shipping point selected by Jones, master video tapes of the
Programming in NTSC BETACAM format, and thereafter throughout the term of
this Agreement. The Programming shall consist of forty-two (42) hours of
Programming per week, which shall be in six (6) hour daily blocks (each, a
"Programming Block"). Jones shall make tapes available to Distributor at
least 30 days prior to the anticipated airing of the Programming by
Distributor. Distributor shall launch the Programming on April 1, 1995
(the "Launch Date").
4. LICENSE FEE AND PAYMENTS
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(a) Upon the execution of this Agreement, Distributor shall pay to Jones,
by wire transfer of funds to an account designated by Jones, a start-up fee
of US $100,000. This fee shall be non-refundable.
(b) Commencing on March 1, 1995 and continuing throughout the term of this
Agreement, subject to compliance by Jones with its obligations hereunder
including without limitation the obligations set forth in Section 3(b),
Distributor shall pay to Jones or its designated payment agent, on or
before the first (1st) day of each calendar month, a monthly license fee of
US $35,000 for the Programming (the "License Fee").
(c) Notwithstanding the foregoing, if the sum of (i) the direct and
indirect costs of providing any marketing, pre-launch or launch support
required by this Agreement or requested by Distributor, and (ii) the direct
and indirect costs incurred by Jones in connection with the production and
delivery of the
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Programming, including but not limited to the materials and labor costs of
preparing the master videotapes of the Programming and making the master
tapes available to Distributor (collectively, the "Distribution Costs"),
exceeds an average of US $35,000 per month over the course of any three-
month period, then Distributor shall reimburse Jones for any such
Distribution Costs immediately upon presentation by Jones of reasonable
documentation evidencing such costs. If, on the other hand, the
Distribution Costs average less than US $31,500 per month over the course
of any three-month period, then Distributor shall receive a credit against
future License Fee payments equal to the following multiplied by three:
$35,000 minus (Avg. Monthly Distribution Costs During Period x 110%)
A final reconciliation of the adjustments required by this subsection (c)
shall take place within 60 days of the expiration of the initial term and
each renewal term of this Agreement.
(d) Jones' failure, for any reason, to send an invoice for a particular
monthly payment shall not relieve Distributor of its obligation to make any
payment in a timely manner consistent with the terms of this Agreement.
Past due amounts shall bear interest at a rate equal to the greater of (i)
one percent (1%) per month, or (ii) the maximum legal rate permitted under
law, and Distributor shall be liable for all reasonable costs and expenses
(including, without limitation, reasonable court costs and attorneys' fees)
incurred by Jones in collecting any past due amounts. A License Fee shall
not be considered past due if it is paid in full within 30 days of its due
date.
(e) Accompanying each payment during the term of this Agreement,
Distributor shall provide a true and complete monthly report, signed by the
chief financial officer of Distributor or his/her authorized designee, in a
form satisfactory to Jones, specifying the average number of Subscribers
during the subject payment period (computed by dividing the number of
Subscribers on the first and last day of the payment period by two (2)) and
certifying the accuracy of such information and containing such other
information as may be reasonably required by Jones. For purposes of this
Agreement, the term "Subscriber" shall mean (i) each residential customer
receiving and paying for a level of cable television service which includes
the Programming, and (ii) the number of basic equivalent subscribers
computed by dividing the monthly revenue for basic cable television service
paid by bulk accounts (such as apartment buildings, cooperatives,
condominiums and mobile home parks) receiving and paying for a level of
cable television service which includes the Programming by the standard
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residential rate for such level of cable television service for the system
distributing the Programming.
5. DISTRIBUTION OF PROGRAMMING
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(a) Subject to compliance by Distributor with any applicable government
policies, laws and regulations of Thailand, including the terms of
Distributor's operating license requirements and obligations, Distributor
shall distribute the Programming in its entirety without addition,
deletion, alteration, editing or amendment, including any copyright
notices, credits and similar notices, trademarks or tradenames included in
the Programming; provided, however, that Distributor may add, at its own
expense, subtitles to the Programming which provide an accurate translation
of the audio portion of the Programming, and provided further that
Distributor may delete any material included in the Programming that
violates any applicable government policies, laws or regulations of
Thailand. During the term of this Agreement, Distributor shall offer the
Programming on each System on the "basic" tier of service, which for
purposes of this Agreement means the tier of service with the highest
Penetration. For purposes of this Agreement, the term "Penetration" means
the ratio of the number of subscribers in any System receiving and paying
for the level or tier of cable television service to the total number of
subscribers of the System.
(b) Distributor shall distribute the Programming in accordance with the
terms of this Agreement throughout the entire term of this Agreement, and
will not replace, delete, terminate or otherwise disrupt, discontinue or
cease transmission of the Programming. The Programming Block for a
particular day may be repeated during the day up to four times (so as to
constitute a full twenty-four (24) hour per day channel).
(c) Distributor shall designate one (1) channel on each System for the
delivery of the Programming. The Programming may be exhibited on a shared
channel basis with Thai educational or informational programming, provided
that the Programming itself shall be separately branded and identified as
the programming of "Mind Extension University: The Asian Campus", or such
other name as may be determined by Jones.
(d) The Programming shall be aired by Distributor in accordance with the
schedule provided by Jones. In the event that such airing schedule is not
met due to causes beyond the control of Distributor, such as shipping
delays, transmission failures or the like, the Programming shall be aired
as immediately
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as possible after the correction of the problem causing the original
failure to deliver the Programming.
(e) Subject to then existing law and the applicable provisions of this
Agreement, Distributor shall not itself, and shall not authorize others to,
copy, tape or otherwise reproduce any part of the Programming without
Jones' prior written authorization, and shall take reasonable and practical
security measures to prevent the unauthorized copying or taping by others.
(f) During the term of this Agreement, Jones and Distributor may agree that
the development and provision of advertising within the Programming is
appropriate. In the event advertising is provided in the Programming, the
parties agree to negotiate an arrangement regarding fees to be charged and
commissions to be paid, based on customary arrangements then current in the
advertising industry.
6. TAXES AND FEES
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In addition to the license fees payable by Distributor pursuant to Section
4 of this Agreement, and any other costs payable by Distributor pursuant to
this Agreement, Distributor shall pay all customs, VAT or other taxes, fees
or charges that are imposed by Thai law by reason of the importation of the
tapes and Programming to Thailand or the use of the tapes and Programming
in Thailand. In addition, in the event that there is a Thai withholding
tax payable on the remittance to be made to Jones pursuant to either
Section 4 or this Section 6, Distributor shall absorb the entire amount of
the tax withheld and shall be responsible for the payment of the
withholding tax on any such remittances. Jones represents and warrants to
Distributor that it is located outside of Thailand, that it does not have
any permanent establishment in Thailand, and that, for purposes of this
Agreement, Jones shall provide and deliver the Programming from outside of
Thailand.
7. PROMOTION AND MARKETING OF THE PROGRAMMING
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(a) Distributor shall use its best efforts to promote, market and sell the
Programming in its service area. Distributor shall promote and market the
Programming on a basis and to an extent equal to the marketing and
promotion efforts devoted to any other programming included on the channel
on which the Programming is delivered, and to any other channels included
in any package of services in which the Programming is included.
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(b) Jones may, from time to time during the term of this Agreement, supply
Distributor with promotional material related to the Programming.
Distributor shall distribute any such promotional material to persons
receiving the Programming and in connection with its efforts to gain
subscribers for its services. If Distributor requests the services and
support of Jones personnel in connection with the launch, marketing or
promotion of the Programming or otherwise in connection with the
distribution of the Programming, then Distributor shall reimburse Jones for
all reasonable out-of-pocket expenditures incurred by Jones and the salary
expense of any Jones personnel who are dedicated to such efforts.
(c) At Jones's request, Distributor shall provide Jones with all available
data regarding the viewership, marketing and promotion of the Programming
by Distributor. Subject to applicable federal, state and local law
(including the franchises pursuant to which the Systems are operated),
Distributor shall also render such other assistance to Jones as Jones may
request in connection with any marketing test, survey, poll or other
research which Jones may undertake in connection with the Programming.
8. TRADEMARKS
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All right, title and interest in and to the Programming, and all materials,
ideas, formats and concepts, computer software or other rights of whatever
nature related thereto, shall remain the property of Jones and/or its
affiliates. Further, Distributor acknowledges and agrees that all names,
logos, marks, copyright notices or designations utilized by Jones and/or
its affiliates in connection with the Programming (the "Marks") are the
sole and exclusive property of Jones and/or its affiliates, and no rights
or ownership are intended to be or shall be transferred to Distributor
pursuant to this Agreement. Distributor's use of the Marks shall be
limited to the advertising and promotion of its carriage of the Programming
pursuant to this Agreement and shall be in a form approved by Jones in
advance of such use. Jones shall provide Distributor with samples of the
Marks, which Distributor shall use in their entirety (including all service
mark and trademark notices) whenever the Marks are used by Distributor.
9. REPRESENTATIONS AND INDEMNIFICATION
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(a) Jones represents and warrants to Distributor that (i) it is a
corporation duly organized and validly existing under the laws of the State
of Colorado; (ii) Jones has the corporate power and authority to enter into
this Agreement and to fully perform its obligations hereunder; (iii) Jones
is under no contractual or
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other legal obligation that in any way interferes with its ability to
fully, promptly and completely perform hereunder; and (iv) nothing
contained in the Programming shall violate the civil or property rights,
copyrights, trademark rights or right of privacy of any person, firm or
corporation except that no representation and warranty is given with
respect to music performance rights.
(b) Distributor represents and warrants to Jones that (i) Distributor is a
corporation duly organized and validly existing under the laws of the
Kingdom of Thailand; (ii) Distributor has the requisite power and authority
to enter into this Agreement and to fully perform its obligations in this
Agreement; and (iii) Distributor is under no contractual or other legal
obligation which in any way interferes with its ability to fully, promptly
and completely perform hereunder.
(c) Distributor and Jones shall each indemnify and forever hold harmless
the other, the other's affiliate companies and their respective officers,
directors, employees and agents from all liabilities, claims, costs,
damages and expenses (including, without limitation, reasonable counsel
fees) arising out of any breach or claimed breach by it of any
representation or any of its obligations pursuant to this Agreement.
Jones's liability for damages arising out of its inability or failure to
deliver the Programming shall be limited to the relevant amount of the
License Fee that relates to the Programming that Jones failed to deliver.
(d) The party entitled to indemnification hereunder (the "Indemnified
Party") shall notify the other party hereto (the "Indemnifying Party") in
writing of the claim or action for which such indemnity allegedly applies.
The Indemnifying Party shall undertake the defense of any such claim or
action and permit the Indemnified Party to participate therein at the
Indemnified Party's own expense. The settlement of any such claim or
action by an Indemnified Party without the Indemnifying Party's prior
written consent shall release the Indemnifying Party from its obligations
under this Agreement with respect to such claim or action so settled.
(e) Neither party shall be liable to the other for the failure to fulfill
its obligations under this Agreement (other than the obligation to make all
payments when due) to the extent such failure is caused by or arises out of
an act of war, strike, riot, labor dispute, national disaster, technical
failure, or any other reason beyond the control and not the fault of the
party whose obligation is prevented during the period of such occurrence.
Upon the cure of any occurrence not exceeding ninety (90) days, the term of
this Agreement shall be extended for a period equivalent to the period of
such occurrence. If any such occurrence shall
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exceed ninety (90) days, then this Agreement may thereafter be terminated
by either party without liability to the other.
10. CONFIDENTIALITY
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Neither Distributor nor Jones shall disclose to any third party (other than
its respective affiliates and employees), any information with respect to
the terms and provisions of this Agreement, including by way of press
release(s), except: (i) to the extent necessary to comply with law or
legal reporting or disclosure requirements or the valid order of a court of
competent jurisdiction, in which event the party making such disclosure
shall so notify the other as promptly as practicable and, if possible,
prior to making such disclosure shall seek confidential treatment of such
information; (ii) as part of its normal reporting or review procedure to
its parent company, its auditors and its attorneys; provided, however, that
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such parent company, auditors and attorneys agree to be bound by the
provisions of this Section; (iii) in order to enforce its rights pursuant
to this Agreement; and (iv) if mutually agreed by Distributor and Jones in
writing.
11. GENERAL
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(a) This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. Notwithstanding
the foregoing, this Agreement may not be assigned by Distributor without
the prior written consent of Jones, except to an entity which controls, is
controlled by or is under common control with Distributor and which
operates a cable television service in Thailand (including Thai CableVision
Public Company Limited), provided that no such assignment shall relieve
Distributor of any obligation under this Agreement.
(b) Nothing contained herein shall be deemed to create, and the parties do
not intend to create, any relationship of partners or joint venturers as
between Distributor and Jones. Neither Distributor nor Jones shall be or
hold itself out as the agent of the other under this Agreement. The
obligations of Distributor and Jones under this Agreement are subject to
all applicable federal, state and local laws, rules and regulations.
(c) A waiver by either party of any term or condition of this Agreement in
any one instance shall not be deemed or construed as a continuing waiver or
a waiver of any subsequent breach of this Agreement. This Agreement sets
forth the entire understanding of the parties with respect to the subject
matter hereof and supersedes all prior understandings and agreements, oral
or written between
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the parties. This Agreement may not be modified except in a writing
executed by both parties to this Agreement.
(d) This Agreement and all collateral matters shall be construed in
accordance with the internal laws of the State of Colorado applicable to
agreements fully made and to be performed therein, irrespective of the
place of actual execution or performance. Each party shall have available
to it all rights, remedies and recourse at law or in equity to be exercised
in the event of breach or threatened breach of this Agreement.
(e) The invalidity or unenforceability of any provision of this Agreement
shall in no way affect the validity or enforceability of any other
provision of this Agreement.
(f) All notices, statements and other communications given under this
Agreement shall be in writing and shall be delivered by facsimile
transmission, telegraph, personal delivery, certified mail, return receipt
requested, or by next day express delivery, addressed, if to Jones to Jones
Education Networks, Inc. at 9697 East Mineral Avenue, P.O. Box 3309,
Englewood, Colorado 80155, Attn.: President (Fax: 303-799-1644); and if to
Distributor, at its address set forth in the first paragraph of this
Agreement, or by facsimile at _________________________. The date of such
facsimile transmission, telegraphing or personal delivery or the next day
if by express delivery, or the date three (3) days after mailing, shall be
deemed the date on which such notice is given and effective.
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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the date and year first written above.
DISTRIBUTOR:
TELECOM HOLDING COMPANY, LTD.
By: /s/ [Illegible signature]
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Name:
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Title:
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JONES EDUCATION NETWORKS, INC.
By: /s/ Gregory J. Liptak
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Gregory J. Liptak
Group President/Global Distribution
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Exhibit A
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to
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Programming Distribution Agreement
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Description of the Programming
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The Programming will generally consist of some combination, to be
determined by Jones, of programming that endeavors to expose the viewer to the
activities one might find in a school, on a campus, or in other learning
environments, including but not limited to, educational, instructional and
informational programming and, in addition, such programming as might relate to
or evolve from schools, campuses or other learning environments including
bookstores, field trips, laboratory, observatory, library and other course
related trips or outings, and marketing activities including the sale of
materials, books, tapes and other items directly relating to any of the above-
mentioned educational or learning activities and environments. The Programming
may also include advertising to the extent and in a nature deemed appropriate by
ME/U; provided, however, that such advertising shall be consistent with then
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current prevailing industry average frequencies and duration, and shall be
consistent with this description of the Programming. The Programming will also
include materials related to computers, faxes, electronic mail, CD-ROM, CD-I,
and other activities related to new media developments.
(14098)
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