Exhibit 10.25
BLOOMBERG INFORMATION TELEVISION/TM/ PROGRAMMING
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AFFILIATION AGREEMENT
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AGREEMENT made this 3rd day of October, 1996, by and between BLOOMBERG
L.P., a Delaware limited partnership ("Bloomberg") and MAGINET, a California
corporation ("MagiNet").
For and in consideration of the conditions hereinafter set forth, the
parties agree as follows:
1. RIGHTS GRANTED
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Bloomberg hereby grants to MagiNet, and MagiNet hereby accepts a non-
exclusive license, right and commitment during the Term of this Agreement
to distribute the BIT Programming to hotel rooms within the hotels to which
MagiNet provides its services in the Asia Pacific Region, Europe, South
Africa and Israel ("Hotels"). MagiNet shall not distribute the BIT
Programming in a cut, edited or otherwise altered form. MagiNet may not
copy or make any use of the BIT Programming other than as specifically set
forth in this Agreement. MagiNet agrees to pay Bloomberg in accordance with
the terms and conditions of Schedule 1 attached hereto. MagiNet agrees to
provide Hotel and System reports to Bloomberg, as Bloomberg may reasonably
request, for the purpose of verifying compliance with this Agreement.
2. TERM
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Unless earlier terminated pursuant to the provisions of this Agreement, the
term ("Term") of this Agreement shall be for a period of two (2) years from
the date hereof and shall automatically renew for successive one (1) year
terms unless either party notifies the other in writing of its intention
not to renew no less than sixty (60) days before the expiration of the Term
or any renewal term.
3. DELIVERY AND DISTRIBUTION
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(a) Delivery.
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(i) Bloomberg shall make available to MagiNet a secure or encrypted
signal of the BIT Programming by transmitting it via satellite or
terrestrial delivery, such delivery to be coordinated by Bloomberg and
MagiNet. The costs associated with the receipt at the Hotels of such
signal shall be borne by MagiNet.
(ii) Notwithstanding anything contained in the Agreement, it is understood
and agreed that if, at any time in the future, Bloomberg shall choose
to deliver its BIT Programming by means of new technology, which
technology shall be used for delivery of programming by at least
eighty percent (80%) of other program
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
providers in the industry, then Bloomberg shall have the right to
discontinue distribution by satellite or any other outdated
technology.
(b) Distribution. MagiNet shall, at its own expense, distribute the BIT
Programming to the Hotels in its entirety (24 hours per day), as and
when transmitted by Bloomberg in the sequence received from Bloomberg
in accordance with all applicable local, state and federal laws.
(c) Availability. Notwithstanding any other provision of this Agreement to
the contrary, MagiNet shall ensure that the BIT Programming is
received by the hotel guests of each Hotel free of charge to such
guests. Once the BIT Programing has been carried by any or all of
MagiNet's Hotels, MagiNet shall have no right, during the term of this
Agreement to delete the BIT Programming from any such Hotel (except in
the event of force majeure, as defined in Section 8), or unless in
MagiNet's reasonable judgment the quality of the BIT programming has
so materially changed from the programming as of the date hereof as to
make it fundamentally unacceptable to MagiNet's Hotel customers.
(d) Piracy. MagiNet shall not itself, and shall not authorize others to,
copy, take or otherwise reproduce any part of the BIT Programming
without Bloomberg's prior written authorization and shall take
reasonable and practical security measures to prevent the unauthorized
or otherwise unlawful copying or taping by others.
(e) Termination of BIT Programming. Bloomberg retains the right at all
times to discontinue providing the BIT Programming (i) to any and all
of the Hotels without incurring any liability upon thirty (30) days
written notice to MagiNet in the event Bloomberg no longer engages in
the business of providing BIT Programming (ii) to any single Hotel in
the event there is no Recoupment (as defined below) of capital costs
and preferred return on equity (as provided on Schedule 1) within nine
(9) months of the commencement of delivery of BIT Programming to such
Hotel, and (iii) to any Hotel, if the delivery of such signal, is
contrary to or violates, any applicable law, rule or regulation. This
Agreement may be terminated by Bloomberg at any time in the event
MagiNet fails to perform any material obligation hereunder which is
not cured after receipt of written notice thereof from Bloomberg
within ten (10) days in regard to payment to be paid by MagiNet to
Bloomberg and twenty (20) days in regard to all other obligations
hereunder.
(f) Non-exclusivity. Notwithstanding anything herein to the contrary,
Bloomberg may market and distribute the BIT Programming to any Hotel
in the Asia Pacific region, Europe, South Africa and Israel not under
contract with MagiNet, and in the event a Hotel under contract with
MagiNet elects not to receive the BIT Programming, Bloomberg may
market and subsequently distribute the BIT to such Hotel. Bloomberg
expressly reserves to itself any and all rights in the BIT Programming
not herein specifically granted to MagiNet. Such reserved rights may
be exercised and exploited by Bloomberg concurrently with and during
the term hereof, freely and without limitation
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or restriction, regardless of the extent to which the same are
competitive with MagiNet or the license granted.
4. PROMOTION
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Without limiting any other related obligations contained in this Agreement,
from the date hereof and throughout the Term, MagiNet shall promote the BIT
Programming in at least a comparable manner as it promotes other services.
5. TRADEMARKS
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Bloomberg will permit MagiNet and each Hotel to use the service marks,
trademarks, trade names, logos and other BIT Programming indicia for the
distribution and promotion of the BIT Programming, subject to Bloomberg's
prior review and approval, which approval will not be unreasonably
withheld. In addition, Bloomberg consents to the use of such indicia in
MagiNet's Registration Statement on Form S-1 filed with the Securities and
Exchange Commission on September 17, 1996, and any amendment thereto, and
in the prospectus contained therein, provided however, that such use and
reference to Bloomberg therein is subject to the prior review and approval
of Bloomberg.
6. CONFIDENTIALITY
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Neither MagiNet nor Bloomberg shall disclose to any third party (other than
its respective employees, consultant or agents in their capacity as such),
any confidential business information concerning the other, including but
not limited to, any information relating to identification of subscribers
or financial material obtained through an audit. MagiNet and Bloomberg
shall undertake reasonable commercial efforts to ensure that such
employees, consultants, and agents maintain the confidentiality of such
information.
7. INDEMNIFICATION
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(a) Bloomberg will indemnify MagiNet from and against any and all claims,
liabilities, costs and expenses arising out of the provision of BIT
Programming, pursuant to this Agreement, to the extent that such
claims, damages, liabilities, costs and expenses are: (i) based upon
alleged libel, slander, defamation, invasion of the right of privacy,
or violation or infringement of copyright (other than music
performance rights) arising out of the content of the BIT Programming,
or based on alleged violations by the BIT Programming of literary or
dramatic rights, and (ii) are not based upon any deletions, additions
or alterations to the BIT Programming by MagiNet, any Hotel or third
party.
(b) MagiNet will indemnify Bloomberg, its parent and related and
affiliated companies from and against any and all claims, liabilities,
costs and expenses arising out of the distribution of the BIT
Programming, pursuant to this Agreement, to the extent that such
claims,
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damages, liabilities, costs and expenses are based upon alleged libel,
slander, defamation, invasion of the right to privacy or violation or
infringement of copyright (other than music performance rights) based
upon or growing out of deletions, additions or alterations to the BIT
Programming by MagiNet or any System. Notwithstanding anything
contained herein to the contrary, MagiNet agrees that it shall pay and
forever hold Bloomberg harmless from all payments and fees arising out
of the provision of the BIT Programming to Hotels or the exhibition or
use of the Bit Programming by MagiNet. MagiNet acknowledges the BIT
Programming provides information taken from the New York Stock
Exchange, The American Stock Exchange, NASDAQ and others and that the
Bloomberg does not guarantee the sequence, accuracy, completeness, or
timeliness of the data and information contained therein. Accordingly,
anything to the contrary herein set forth notwithstanding, Bloomberg,
its parent, affiliates or subsidiaries shall not directly or
indirectly, be liable, in any way, to MagiNet, to Hotels, to any of
the Hotel's viewers, to any person or entity to whom or to which the
BIT Programming shall be provided, or to any other person or entity
for (i) any inaccuracies or errors in or omission of, any information
or data therein; (ii) any delays or errors in the transmission or
delivery of any part thereof, or (iii) any loss or damage arising
therefrom or occasioned thereby, or by any reason of nonperformance,
or interruption in any such information or data transmitted by
Bloomberg for any reason.
(c) 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 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 hereunder with respect to such claim or action so settled.
8. FORCE MAJEURE
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If Bloomberg shall fail to make timely delivery of the BIT Programming
hereunder by reason of any act of God, war, fire, flood, strike, labor
dispute, public disaster, transportation or laboratory difficulties, order
or decree of governmental agency, failure or degradation in performance of
the satellite or transponders providing Bloomberg's signal or feed,
scrambling/de-scrambling equipment or any other equipment owned and
maintained by others, any failure at the origination and up linking center
used by Bloomberg, or any other similar or dissimilar cause beyond the
control of Bloomberg, such failure on the part of Bloomberg shall not be
deemed to be a breach of this Agreement and shall not extend the term
thereof.
9. ASSIGNMENT
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(a) Bloomberg may freely assign this Agreement, or any portion thereof,
without the consent of MagiNet. In the event of any valid assignment
of this Agreement by Bloomberg,
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Bloomberg shall be relieved of all obligations arising thereafter and
MagiNet shall look solely to the assignee for enforcement of such
obligations. MagiNet agrees that upon receipt of written notice of
assignment by Bloomberg, monies due Bloomberg shall be paid to any
third party assignee in accordance with Bloomberg's instructions
without offset, deduction, counterclaim or other credits which the
MagiNet may have against Bloomberg.
(b) This Agreement may not be assigned by MagiNet, either voluntarily or
by operation of law, without the prior written consent of Bloomberg;
provided however, that this Agreement shall automatically be assigned
to MagiNet's successor corporation in connection with its
redomiciliation in Delaware. Any such assignment shall not relieve
MagiNet of its obligations hereunder.
10. THE BLOOMBERG TERMINAL
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As an incentive to persuade certain top business oriented Hotels to carry
BIT Programming, MagiNet may, with the prior consent of Bloomberg, offer to
install a BLOOMBERG terminal (for the term during which BIT Programming is
delivered to the Hotel) either in the Hotel's business center or concierge
floor, provided:
(a) Bloomberg shall have final absolute approval over which Hotels are
supplied with a BLOOMBERG terminal;
(b) Each Hotel shall pay all installation and monthly phone charges as
well as the charges for the installation of the equipment to deliver
the Bloomberg service; and
(c) Each Hotel shall sign a Bloomberg Agreement and Schedule of Services.
11. AUDIT
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(a) Subscriber Records. MagiNet shall keep accurate and complete records
and accounts of billings and all matters which pertain to the Hotels
and are relevant to or required by this Agreement. Bloomberg shall
have the right to examine and audit those records and accounts, no
more than twice in each 365 day period, on reasonable notice to
MagiNet to be conducted during normal business hours during the Term
and for one (1) year after the final termination. Within two (2) weeks
of Bloomberg's request, MagiNet shall provide to Bloomberg all
information requested in order to verify the geographical limits of
any government authorization pertaining to Hotels.
(b) Monthly Reports. On or before the fifteenth (15th) day of each month
during the Term of this Agreement, MagiNet shall provide Bloomberg a
true and complete report for the prior month signed by MagiNet's chief
financial officer, or his/her authorized designee,
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specifying for each of MagiNet's Hotels which carry the BIT
Programming the following information:
(i) the name of the Hotel;
(ii) the total number of Hotel rooms;
(iii) the fee charged by MagiNet for each room in the Hotel;
(iv) itemization of capital costs related to each Hotel;
(v) other information reasonably requested by Bloomberg for
accurate billing purposes; and
(vi) the information required pursuant to Exhibit A hereto.
12. DEFINITIONS
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As used in this Affiliation Agreement, the following term has the following
meaning:
(a) "Bloomberg Information Television ("BIT") Programming" means the
program service covered by this Agreement, which is offered by
Bloomberg consisting primarily of world news, business news, financial
market data, sports, health and general information.
13. GENERAL
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(a) A waiver by either party of any of the terms or conditions of this
Agreement shall not be deemed or construed to be a waiver of such term
or condition for the future, or of any subsequent breach thereof. All
remedies, rights, undertakings, obligations and agreements contained
in this agreement shall be cumulative and none of them shall be in
limitation of any other remedy, right, undertaking, obligation or
agreement of either party.
(b) All notices, statements and other documents required to be given shall
be given in writing either by personal delivery or mail at the
respective addresses:
If to MagiNet: If to Bloomberg:
MagiNet Bloomberg L.P.
Tasman Drive 499 Park Avenue
Sunnyvale, CA 94089 New York, NY 10022
ATTN: Kenneth B. Hamlet ATTN: Emilia Fazzalari
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(c) This Agreement and all matters or issues collateral thereto shall be
governed by the laws of the State of New York, without reference to
its choice of law doctrine, and any applicable rules and regulations
of the Federal Communications Commission.
(d) This Agreement constitutes the entire agreement between Bloomberg and
MagiNet with respect to the subject matter herein contained and this
Agreement cannot be changed or terminated orally, and no changes,
amendments or assignments thereof shall be binding upon Bloomberg
until accepted in writing by a duly authorized officer of Bloomberg.
(e) In the event any provision of this Agreement is found to be invalid,
illegal or unenforceable, the validity, legality and enforceability of
any of the remaining provisions shall not in any way be affected or
impaired thereby.
(f) This Agreement supersedes all prior written or oral communications or
understanding between the parties concerning the subject matter.
(g) Each Hotel receiving the BIT Programming shall agree to be bound by
the terms of this Agreement applicable to such Hotel.
(h) Bloomberg may, in its absolute discretion, withdraw the BIT
Programming, or any portion thereof, if Bloomberg determines that
telecast thereof would or might infringe upon the rights of others or
violate any law, court order, governmental regulation or other ruling
of any government agency, or constitute a breach of the use permitted
hereby of the BIT Programming or the material or rights contained
therein, or subject Bloomberg to any material liability with respect
to the distribution of BIT Programming or otherwise.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
above date.
MAGINET BLOOMBERG L.P.
BY: Bloomberg, Inc.,
General Partner
By: /s/ James A Barth By: /s/ Louis V. Eccleston
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Name: James A. Barth Name: Louis V. Eccleston
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Title: Executive Vice President, CFO Title:____________________
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405 Tasman Drive 499 Park Avenue
Sunnyvale, CA 94089 New York, NY 10022
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SCHEDULE 1
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Service Rates
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MagiNet shall sell the BIT Programming to Hotels at approximately [***] per
Hotel room per month (but for not less than [***] per Hotel room per month).
MagiNet will use its best efforts to secure the best possible prices for the BIT
Programming.
MagiNet shall retain 100% of the gross revenue generated from amounts paid
to MagiNet by Hotels for the BIT Programming until MagiNet has gross received
revenues in an amount equal to capital costs (such capital costs related only to
the delivery of the BIT Programming) plus a preferred return on capital equal to
[***]. Such total capital costs (along with the preferred return) per Hotel
shall not be more than [***]. All other expenses of MagiNet shall not be
included in the calculation of these capital costs. MagiNet agrees to itemize
the specific capital costs with respect to each Hotel for review by Bloomberg.
To the extent such capital costs are also applicable to the receipt of other
services, such costs shall be allocated accordingly for purposes of this
Agreement.
Once gross revenues equal to capital costs plus the above-referenced
preferred return on capital have been paid to MagiNet by Hotels ("Recoupment"),
MagiNet must pay a license fee to Bloomberg equal to [***] of the gross revenues
from the sale of BIT Programming to the Hotels. Recoupment shall be measured on
a Hotel by Hotel basis.
Notwithstanding anything herein to the contrary, in the event the capital
costs and preferred return on capital will not be paid within nine (9) months of
the commencement of BIT Programming by any single Hotel, MagiNet shall not offer
the BIT Programming to any such Hotel. In addition, to the extent that a Hotel
is in default of any payment due MagiNet for receipt of the BIT Programming,
MagiNet shall not offer or provide the BIT Programming to any Hotel that is a
member of the same chain of Hotels and is under common ownership until such non-
paying hotel shall satisfy any outstanding payment obligations to MagiNet.
*** Confidential treatment requested pursuant to a request for
confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the
Commission.
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EXHIBIT A
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(MagiNet to list all Hotels* as defined in the Agreement)
- - Data
- - Name and Address of Hotel
- - Hotel Representative
Address
Telephone
- - Service Launch Date
- - Number of Hotel rooms
- - Chanel Carrying the BIT Programming
- - Name of Town, County, State and
Zip Code of Hotel's Operating Area
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