EXHIBIT 10.3
C-3D DIGITAL
AFFILIATION AGREEMENT
AGREEMENT made this 31st day of December, 1999, by and between
Chequemate International, Inc., a Utah corporation, d/b/a C3D Television,
with its principal place of business located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, ("C3D") and Telepro Communications, Inc., a
Washington corporation, with its principal place of business located at ▇▇▇▇▇
▇.▇. ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("AFFILIATE"). (▇▇▇) ▇▇▇-▇▇▇▇
WHEREAS, Affiliate distributes television networks; and
WHEREAS, C3D desires to make available to Affiliate the programming
known as the "C-3D Service" for retransmission to Affiliate's subscribers,
and to provide certain other related services upon the terms and conditions
set forth herein; and
WHEREAS, Affiliate desires to make available to its subscribers the
C-3D Service;
NOW THEREFORE, it is mutually agreed as follows:
1. Definitions. The following terms shall have the meanings set
forth below when used in this Agreement:
1.1 "Programming" shall mean a motion picture,
pre-recorded program, live production, or other event transmitted on the C-3D
Service;
1.2 "C-3D Service" shall mean the single channel satellite
delivered stereoscopic video entertainment programming service, presently
transmitted on GE 3, transponder 8;
1.3 "Subscriber" shall mean a private residential dwelling
unit (whether an apartment, house, mobile home, condominium unit, or rentable
guest room in a hotel, motel, inn, or lodge), the resident(s) of which have
agreed to purchase access to programming from Affiliate;
1.4 "Subscription Basis" shall mean the access to
Programming chosen by a Subscriber over the facilities of a System for
television viewing, for which access Subscriber is obligated to pay a monthly
fee to Affiliate;
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1.5 "System" shall mean each cable television system
described in Schedule "A" hereto; and
1.6 "Viewing Device" shall mean the liquid-crystal shutter
glasses and synchronizing drivers owned by C3D.
2. License.
2.1 Exhibition. C3D hereby grants to Affiliate and Affiliate
hereby accepts, subject to the terms and conditions herein, a non-exclusive
license to exhibit the C-3D Service on a subscription basis to Affiliate's
Subscribers over the facilities of the System. Affiliate may include
additional cable television systems by written amendment to Schedule A
hereto, provided that C3D consents in writing in advance of any such
addition. Affiliate shall exhibit the C-3D Service continuously during the
term of this Agreement.
2.2 Prohibitions. Unless otherwise expressly agreed to by C3D in
writing, this license does not grant to Affiliate the right to exhibit,
authorize, or permit the exhibition of the C-3D Service to any cable system
or SMATV system (satellite master antenna television system) not set forth in
Schedule A hereto; upon any breach of this prohibition, C3D shall have the
right to enjoin any exhibition or exploitation of the C-3D Service; to
suspend the transmission of the C-3D Service; to terminate this Agreement
and/or declare this Agreement breached; to declare all amounts owed to C3D
immediately due and payable; and to exercise all rights and remedies on
account of such breach, including, without limitation, the right to recover
damages.
3. Term.
3.1 The term of this Agreement and the rights granted to Affiliate
hereunder shall be for a period of SIX (6) MONTHS from the date first
appearing above (the "Initial Term"). The Initial Term of this Agreement
shall expire on the same date for all of Affiliate's Systems listed in
Schedule A hereto regardless of when any individual system launches the C-3D
Service hereunder. The termination of this Agreement shall not: (a) abrogate
Affiliate's obligation to pay to C3D the sums set forth herein; (b) impair or
affect C3D's rights of withdrawal, audit or indemnification; or (c) abrogate,
impair or affect any warranty, representation, indemnity or undertaking on
the part of each party hereunder.
3.2 It is anticipated that the C-3D Service shall become available
to Subscribers in San Bernardino, California on or before FEBRUARY 1, 2000.
If the C-3D Service is successful in the sole opinion of Affiliate, then
Affiliate shall expand the C-3D Service throughout its other Systems, AND
THIS AGREEMENT SHALL RENEW FOR A FIVE YEAR PERIOD.
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3.3 Affiliate may terminate this Agreement at any time during the
first year of its term, upon thirty days' written notice to C3D.
4. License Fees and Report.
4.1 In consideration of the rights herein granted to Affiliate,
Affiliate shall pay C3D the license fees ("License Fees") set forth in
Schedule B hereto. Affiliate shall remit to C3D within thirty (30) days of
the end of each month all License Fees due for such month. Together with each
such payment of such amounts, Licensee shall deliver to C3D a monthly
statement in the form of Schedule C attached hereto. All payments and
statements hereunder shall be made to C3D at its address set forth above. All
amounts not paid within said thirty (30) day period shall accrue interest at
the maximum legal rate or 1 1/2 percent per month, whichever is less, until
received. Acceptance of any payment by C3D after its due date shall not
constitute a waiver of C3D's right to any accrued interest, or any other
right which C3D might otherwise have.
4.2 On no less than one hundred eighty (180) days' prior written
notice to Affiliate ("Amended Fee Structure Notice") C3D shall have the right
to adjust, from time to time during the term of this Agreement, the rates set
forth in Schedule B hereto with respect to License Fees on the date
("Effective Date") specified in the Amended Fee Structure Notice, if the
rates become unreasonable compared with the standard of the industry at that
time. In such event, Affiliate may, by written notice at least ninety (90)
days prior to the Effective Date, terminate this Agreement as of the
Effective Date; provided, however, that such termination by Affiliate shall
not take effect and shall be of no force or effect if C3D withdraws the
increase by written notice to Affiliate no later than fifteen (15) days prior
to the Effective Date.
4.3 In the event of a dispute between Affiliate and C3D as to any
amounts properly due from Affiliate to C3D, Affiliate shall pay that portion
of the amounts not in dispute in accordance with the terms of Paragraph 4.1
above and before or at the time of payment, shall notify C3D in writing of
the grounds for disputing the remaining unpaid balance. Interest shall not
accrue on such balance UNTIL ANY OUTSTANDING ISSUES ARE RESOLVED.
4.4 In connection with any interruption or other failure in the
transmission, reception, or distribution of the C-3D Service which
interruption or failure could reasonably have been prevented by C3D,
Affiliate shall have recourse and a remedy against C3D only if Affiliate
shall have given its affected Subscribers a credit or rebate as a result of
such interruption or failure, in which case the sole and exclusive remedy of
Affiliate against C3D shall be a credit for no more than the amount of the
License Fee which would have been payable by Affiliate to C3D for the
Event(s) ordered if there had been no such interruption or failure. C3D shall
not, under the foregoing or any other circumstances, be liable for
incidental, consequential or special damages, including, without limitation,
loss of profits or revenues, damage to or loss of personal property or the
claim of any Subscriber.
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4.5 Within ninety (90) days following the end of each of
Affiliate's fiscal years, during any portion of which this Agreement is in
effect, Affiliate shall furnish to C3D a letter addressed to C3D signed by
Affiliate's Chief Operating Officer or Chief Financial Officer which attests
to the completeness and accuracy of all reports and statements supplied to
C3D. Affiliate's obligation to supply such letters shall continue after the
termination of this Agreement, until C3D receives the required letter with
respect to the last fiscal year during any portion of which this Agreement is
in effect.
4.6 Affiliate shall keep and maintain, at Affiliate's principal
place of business, complete and accurate books and records relating to this
Agreement in accordance with generally accepted accounting principles. During
the term of this Agreement and for two (2) years thereafter, C3D shall have
the right, at its expense, for its representatives, accountants, or
designated agents, at Affiliate's principal place of business, during regular
business hours, to audit and examine Affiliate's books and records for the
purpose of verifying and confirming the accuracy of the statements delivered
to C3D by Affiliate and the amount of the License Fees paid or payable under
this Agreement and to make photocopies of relevant excerpts of any such books
and records. The exercise by C3D of any right to audit or examine at any time
or the acceptance by C3D of any statement or payment shall be without
prejudice to any other rights or remedies available to C3D and shall not bar
C3D from thereafter disputing the accuracy of any such payment or statement
and Affiliate shall remain fully liable for any balance due under the terms
of this Agreement. If any audit discloses an underpayment of five percent
(5%) or more with respect to the amount of License Fees set forth on any of
Affiliate's statements, Affiliate agrees to pay all costs and expenses
incurred by C3D for such audit, and to re-compute and make immediate payment
of the actual License Fees due, and to pay any reasonable attorney fees
incurred by C3D in connection with such License Fees or the collection
thereof. Neither C3D's acceptance of any information, nor inspection nor
audit shall prevent C3D from later disputing the accuracy or completeness of
any payments made or of information supplied by Affiliate.
4.7 The suggested price for the service is $9.99 per month per
Subscriber who either requires no Viewing Devices, or who requires one
Viewing Kit, and an additional $5.99 per month per Subscriber who requires a
second Viewing Kit. A "Viewing Kit" is one (1) synchronizing driver and two
(2) pair of wireless liquid crystal shutter glasses. Affiliate may charge
whatever price it desires, but if the prices charged exceed the suggested
prices, THE LICENSE FEES SHALL BE RENEGOTIATED. New Subscribers may acquire
the service for free through the end of February, 2000; for one year
thereafter, any new Subscriber shall receive one month of the C-3D Service
for free. Notwithstanding any other provision of this Agreement, Affiliate
will not begin to charge any subscription fees until March 1, 2000. BOTH
PARTIES WILL SHARE IN REVENUES FROM THE OUTSET.
5. Transmission and Distribution
5.1 Affiliate shall be solely responsible for the reception of the
video and audio signals of the C-3D Service to the headend or other receiving
device of the System(s) and for the transmission therefrom to its
Subscribers. Affiliate shall employ adequate security systems to prevent
theft, pirating, copying, duplication, or unauthorized exhibition of the C-3D
Service, and
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shall ensure that the C-3D Service is made available only to Subscribers.
Affiliate shall continuously maintain transmission quality for the C-3D
Service equivalent to the best transmission quality of other programming
transmitted by Affiliate.
5.2 C3D shall furnish Affiliate with one CLI IRD decoder per
downlinking headend at no cost to Affiliate. If Affiliate requires a digital
feed, then C3D shall make one available.
5.3 Affiliate shall exhibit and shall require each System to
exhibit the C-3D Service in its entirety, without any interruptions,
including all titles, credits, and copyright notices.
6. Advertising and Promotional Materials
6.1 Affiliate shall use its reasonable best efforts to promote the
C-3D Service to the Subscribers of each System, with the aim of maximizing
the number of Subscribers to the C-3D Service, and the total revenue from the
C-3D Service. C3D WILL TAKE THE LEAD IN MARKETING AND AFFILIATE WILL HAVE THE
OPTION TO PARTICIPATE IN C3D'S MARKETING EFFORTS.
6.2 For each month during the term of this Agreement, not later
then thirty (30) days prior to the exhibition of the C-3D Service for such
month, C3D shall make available to Affiliate such trailers and other
publicity materials as C3D may have available (the "Promotional Materials")
to be used for advertising and publicizing the C-3D Service for such month.
Affiliate shall have the right, at its sole cost and expense, to make copies
of the Promotional Materials solely for use by each System.
6.3 Affiliate shall not use the name, image, or likeness of any
character, person or entity appearing in or connected with the production of
any Event included in the C-3D Service separate and apart from the
advertising and promotion of the C-3D Service, and no name, image or likeness
shall be used by Affiliate so as to constitute an endorsement or testimonial,
express or implied, of any party, product, service or commercial venture.
Affiliate acknowledges that its right to use the names, images, or likenesses
of person or entities appearing in or connected with the production of any
Event is subject to various limitations and restrictions contained in
contracts with third parties. Following the exhibition of the C-3D Service in
any month during the term of this Agreement, Affiliate shall not use,
transmit, exhibit, circulate or otherwise publish any Promotional Materials
provided by C3D for such month.
6.4 In all advertising and publicity issued by Affiliate for the
C-3D Service, Affiliate shall comply with all instructions from C3D,
regarding advertising, or contained in any promotion package provided by C3D.
6.5 The parties understand and agree that the implementation of
this Agreement will necessitate that the staff and employees, servants and
agents of each party shall make themselves
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and the necessary equipment, sites and locations available upon reasonable
notice to the staff, employees, servants and agents of the other party at all
reasonable times during the term of this Agreement.
7. Viewing Devices.
7.1 C3D shall furnish Affiliate with a number of serially-numbered
liquid-crystal shutter glasses and synchronizing drivers, as described in
Exhibit "D". Affiliate shall cause one or more of Affiliate's employees to
personally deliver and install the Viewing Devices at each Subscriber's
address, in order to instruct the Subscriber on the proper methods of care
and use, to be certain that the Viewing Devices are functioning for the
Subscriber, and to obtain a receipt and agreement from the Subscriber as
described below. Affiliate's employee shall furnish to each subscriber at the
time of installation written materials prepared by C3D describing proper
methods of care and use. If a Subscriber has trouble with a Viewing Device,
and it is not merely a drained battery, the Viewing Device shall be replaced
by Affiliate, and the trouble unit mailed to C3D at the address above,
attention "Repairs and Warranty Claims".
7.2 Affiliate shall obtain from each Subscriber at the time of
installation a signed, written receipt and agreement prepared by C3D whereby
the Subscriber agrees:
(a) to be liable for the replacement cost of the Viewing
Devices if they are stolen, destroyed, or abused, and to return the Viewing
Devices in good condition, ordinary wear and tear excepted, at the
termination of that Subscriber's subscription;
(b) that there shall be no credit against the monthly
subscription rates for any time during which the Viewing Devices are
unavailable to the Subscriber due to theft or other casualty, or if they do
not function due to a dead battery or due to abuse or misuse; and
(c) that if Subscriber becomes liable for the replacement
cost of the Viewing Devices, that such amount will be added to Subscriber's
account with Affiliate, and if Subscriber fails to pay such amount to
Affiliate within ninety (90) days, Affiliate shall STOP PROVIDING THE C3D
SERVICE to such Subscriber, AND USE ITS BEST EFFORTS TO COLLECT SUCH AMOUNTS,
until such amount is paid; and
(d) to pay a $30.00 deposit per Viewing Kit to Affiliate.
7.3 Affiliate shall be responsible to C3D only for those Viewing
Devices which Affiliate has physical custody of. Once each Viewing Device is
installed with a Subscriber and the signed written agreement is delivered to
C3D, Affiliate's responsibility for that Viewing Device is relieved, until
such time as a Subscriber returns a Viewing Device to Affiliate. Within
thirty (30) days thereafter, Affiliate shall return such Viewing Device to
C3D. Upon the termination of a Subscriber's subscription, Affiliate shall
refund the deposit to Subscriber, and mail the Viewing Devices back to C3D.
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8. WARRANTIES AND INDEMNIFICATION
8.1 C-3D warrants and represents that: (a) it has the power and
authority to enter into this Agreement and to fully perform its obligations
hereunder; (b) the material contained in the C-3D Service and in the
Promotional Materials supplied to Affiliate hereunder will not violate any
copyright, right of privacy or publicity or literary or dramatic right of any
person; provided, however, that such warranties and representations by C3D
are only as broad as and coextensive with those provided to C3D by C3D 's
program suppliers.
8.2 Affiliate warrants and represents that: (a) Affiliate has the
power and authority to enter into this Agreement and to fully perform its
obligations hereunder; (b) Affiliate has obtained, and shall maintain in full
force and effect during the term of this Agreement, such federal and state,
local and/or private authorizations as are necessary to operate each System
in the Territory and to retransmit the C-3D Service pursuant to this
Agreement; (c) Affiliate will immediately notify C3D in the event that
Affiliate loses, or becomes aware of circumstances that it may lose, any
necessary authorizations, (d) any material contained in promotional material
developed by Affiliate will not violate any copyright, right of privacy or
publicity or literary or dramatic right of any person; and (e) Affiliate
Shall not use, and shall require each System not to use any Programming for
any unlawful purpose or for any purpose not permitted hereunder.
8.3 Affiliate shall indemnify, defend and hold harmless C3D, its
parent, subsidiaries and affiliated companies and their respective officers,
directors, employees, agents and shareholders from and against any and all
claims, losses or damages, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) (collectively "Claims") relating to
or arising out of any breach or alleged breach of any of the representations,
warranties, agreements, covenants or obligations made by Affiliate pursuant
to this Agreement.
8.4 C3D shall indemnity, defend and hold harmless Affiliate, its
parent, subsidiaries and affiliated companies and their respective officers,
directors, employees, agents and shareholders from and against any and all
Claims relating to or arising out of any breach or alleged breach of any of
the representations, warranties, agreements, covenants or obligations made by
C3D pursuant to this Agreement.
8.5 Each party seeking indemnity hereunder (the "Indemnified
Party") agrees to give prompt notice to the other party (the "Indemnifying
Party") of any circumstances which may give rise to a Claim under this
Paragraph 8 as soon as the Indemnified Party knows of such circumstances:
provided, however, that the failure to give such notice shall not relieve the
Indemnifying Party of its obligation to indemnify the Indemnified Party under
this Paragraph 8 except to the extent that such failure increases the
Indemnified Party's liability hereunder. The Indemnifying Party shall have
the right to participate in, and, with the consent of the Indemnified Party,
which consent shall not be unreasonably withheld, to control the contest and
defense of any Claim by a third party as to which notice is given by the
Indemnified Party under this Paragraph 8 at its own cost and expense,
including the cost and expense of attorneys' fees in connection with such
contest and defense. The Indemnified Party shall not settle or compromise any
such Claim without the prior written consent of the Indemnifying Party. If
the Indemnified Party settles or
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compromises any such Claim without the Indemnifying Party's prior written
consent, the Indemnifying Party shall be relieved of its obligations to
indemnify the Indemnified Party under this Paragraph 8 with respect to such
Claim.
9. SERVICE MARKS. Affiliate acknowledges that the name and ▇▇▇▇
"C-3D" and any other service marks and any logos and variations used to
identify the C-3D Service are the exclusive property of C3D and that
Affiliate has not and shall not acquire any proprietary rights thereto by
reason of this Agreement. Materials used by Affiliate may refer to "C-3D " or
the C-3D Service and other names, marks and logos of C3D only if it is clear
that the names, marks and logos used are service marks for the C-3D Service
which Affiliate distributes. Such use shall be in accordance with any further
instructions that may be issued by C3D from time to time, Affiliate shall
promptly make available to C3D, at its request, all original promotional or
advertising material that uses the aforesaid names, marks or logos in
publicizing the C-3D Service and shall keep copies of all such original
material, Affiliate shall not publish or disseminate any material which
violates any restrictions imposed by C3D or C3D's program suppliers and
disclosed by Affiliate by C3D.
10. TERMINATION. Either party may terminate this Agreement by
giving the other party at least thirty (30) days prior written notice, in the
event that the other party has made any material misrepresentation herein or
materially breaches any of its obligations hereunder, including, without
limitation, the obligation to make all payments when due and payable, and
such material misrepresentation or breach (which shall be specified in such
notice) is not or cannot be cured within thirty (30) days of receipt of such
notice. The right of either party to terminate this Agreement in any such
case shall be in addition to any other remedies such party may have.
11. FORCE MAJEURE. In the event Affiliate is prevented from
exhibiting the C-3D Service, or C3D is prevented from transmitting the C-3D
Service, by reason of any act of God, fire, strike, boycott, transportation
failure, satellite interruption or other occurrence beyond the reasonable
control of the party whose performance is prevented, neither party shall be
responsible to the other for any damages, costs, expenses or loss of profits
thereby. C3D shall have the right to terminate this Agreement upon written
notice to Affiliate if, by reason of this paragraph, Affiliate is prevented
from exhibiting the C-3D Service for more than ninety (90) consecutive days
if both parties cannot arrive at a mutually agreeable solution for an
extension.
12. MISCELLANEOUS.
12.1 Affiliate and its employees and agents shall maintain, in
confidence, the terms and conditions of this Agreement, as well as all data,
summaries, reports and information of all kind, whether oral or written,
acquired, devised or developed in any manner by or from C3D personnel or
C3D's files, and have not and will not reveal the same to any persons not
employed by C3D except: (a) at the written direction of C3D; (b) to the
extent necessary to comply with law or a valid order of a court of competent
jurisdiction, in which event Affiliate shall so notify C3D as promptly as
practicable (and, if possible, prior to making any disclosure) and shall in
all cases seek Confidential treatment of such information; (c) as part of its
normal reporting or review procedure to its parent company, auditors and its
attorneys, provided such parent company, auditors and
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attorneys agree to be bound by the provisions of this paragraph; or (d) in
order to enforce its rights pursuant to this Agreement.
12.2 Neither this Agreement nor any rights or obligations hereunder
may be assigned by Affiliate without the prior written consent of C3D, which
consent shall not be unreasonably withheld. Such assignment shall not relieve
Affiliate of its obligations incurred prior to the date of any such
assignment hereunder. Any purported assignment without such consent shall be
null and void and not enforceable against C3D. This Agreement and the rights
and obligations of the parties hereunder shall be binding upon and shall
inure to the benefit of C3D and Affiliate and their respective legal
representatives, successors in interest and permitted assigns.
12.3 Any waiver by either party of any breach of any term or
condition hereof shall be effective only if in writing and such writing shall
not be deemed to be a waiver of any subsequent or other breach, term or
condition of this Agreement.
12.4 Notwithstanding anything to the contrary contained herein, if
Affiliate fails to fully and timely perform any material obligation or any
covenant hereunder, including, without limitation, Affiliate's failure to
timely fulfill any of its payment obligations hereunder, or if Affiliate
becomes insolvent, or if a petition under any bankruptcy shall be filed by or
against Affiliate. (which petition, if filed against Affiliate, shall not
have been dismissed within thirty (30) days thereafter); or if Affiliate
takes advantage of any applicable insolvency or any other like statute, or
executes a general assignment for the benefit of creditors; or if a receiver,
liquidator or trustee (or equivalent under any applicable statute) is
appointed for the assets or affairs of Affiliate, than upon the occurrence of
any of the foregoing. C3D may exercise any or all of the following options,
none of which shall be a waiver of the other or of any other rights or
remedies which C3D may have at law, in equity or otherwise: (a) C3D may
terminate this Agreement by giving prior written notice of termination to
Affiliate; (b) C3D may cease licensing the C-3D Service to Affiliate: and/or
(c) C3D may suspend the transmission of the C-3D Service to Affiliate and/or
the right to transmit the C-3D Service by Affiliate until such default is
ended or remedied. If C3D exercises any or all of the foregoing options, C3D
shall be entitled to declare all unpaid and payable amounts to C3D
immediately due and payable and to recover from Affiliate all payments past
due from Affiliate to C3D hereunder, together with interest at the rate of 1
1/2 percent per month or the legal maximum, whichever is less, plus all
attorneys' fees, costs and expenses, including collection agency fees,
incurred by C3D to enforce the provisions hereof. Notwithstanding anything to
the contrary contained herein, no termination of this Agreement for any
reason shall relieve or discharge, or be deemed or construed as relieving or
discharging, Affiliate from any duty, obligation or liability hereunder which
accrued as of the date of such termination (including, without limitation,
the obligation to pay any amounts payable hereunder and to furnish a
statement with respect to any such payment which accrued as of such date of
termination).
12.5 With respect to the subject matter of this Agreement, this
Agreement and the schedules hereto: (a) set forth the entire Agreement
between the parties and any parties who have in the past or who are now
representing either of the parties, and (b) supersede all prior
understandings and communications between the parties, oral or written. Each
of the parties
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acknowledges and represents that this Agreement is entered into after full
investigation and that neither party is relying upon any statement or
representation made by the other which is not specifically set forth in this
Agreement. Each of the, parties acknowledges that it shall have no right to
rely upon any amendment, promise, modification, statement or representation
made or occurring subsequent to the execution of this Agreement, unless such
amendment, promise, modification, statement or representation is expressly
set forth in a written instrument signed by a duly authorized representative
of the other and dated subsequent to the date of the execution and delivery
of this Agreement.
12.6 The provisions of this Agreement are not intended to be for
the benefit of any third party, whether Subscribers or otherwise, and no
third party (including, without limitation, any Subscriber) shall be deemed
to have any privity of contract with either of the parties hereto by virtue
of this Agreement or the delivery of the C-3D Service.
12.7 Any dispute between the parties regarding this Agreement shall
be governed by and construed in accordance with the laws of the State of
California without reference to conflicts of laws provisions.
12.8 Nothing in this Agreement shall be deemed to create a
relationship of joint venture, principal-agent or partnership between the
parties, and neither shall hold itself out in its advertising or in any other
manner that would indicate any such relationship between the parties.
12.9 C3D shall not be liable for, and Affiliate shall pay and
forever hold C3D harmless from, any and all sales, use, excise, income,
franchise, corporate and similar taxes (including, without limitation, any
fees payable to local or state franchising authorities) and other charges
which are or may be imposed upon or assessed against Affiliate or any System
and/or which are based upon or measured by revenues derived by Affiliate from
the exploitation of the rights granted to Affiliate pursuant to this
Agreement (including, without limitation. any tax or charge based upon any
goods or services furnished to Affiliate by C3D which goods or services are
then passed on to Affiliate's Subscribers).
12.10 All licenses, rights and interests in, to and with respect to
the C-3D Service and Viewing Devices not specifically granted to Affiliate
shall be and are specifically and entirely reserved to C3D. The licenses,
rights and interests granted to Affiliate herein are non-exclusive, and
accordingly, they may be fully exploited and utilized by C3D, without regard
to the extent to which any such rights may be competitive with Affiliate or
the licenses, rights and interests granted hereunder.
12.11 Paragraph headings used herein are for convenience only and
shall not be deemed to define, limit or construe the contents of any
provision of this Agreement.
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12.12 Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of the prohibition without invalidating the
remaining provisions herein. Any prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date and year first above written.
Chequemate International, Inc.
d/b/a C-3D Digital
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, VP for Affiliate Relations
Telepro Communications, Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, COO
63
SCHEDULE A
AFFILIATE- SYSTEM (S)
SYSTEM NAME
ADDRESS
AREA(S) SERVED
3D TELEVISION SERVICE LAUNCH DATE
TELEPHONE NUMBER
64
SCHEDULE B
LICENSE FEES
In accordance with the terms and conditions as set forth in Section 4.1 of
the Affiliate Agreement, C3D will receive the following compensation from
Affiliate:
1. Fifty percent of all subscription fees, such fees not to exceed $14.99
per month for each new Subscriber. The number of subscribers shall be
determined as of the FIFTEENTH (15TH) day of each month.2. Any funds
collected from any Subscriber for loss of Viewing Systems, under Section 7 of
this Agreement.
3. All compensation paid to C3D from Affiliate shall be paid in US funds as
described in Section 4 of this Agreement.
65
SCHEDULE C
SYSTEM REPORT
Number of Subscribers on FIFTEENTH DAY of month:
66
SCHEDULE D
VIEWING SYSTEMS
New Glasses - replacement cost $25.00 each, OR AS AGREED, plus shipping.
Serial numbers:
New Synchronizing Drivers - replacement cost $20.00 each, OR AS AGREED, plus
shipping.
Serial numbers:
Refurbished Glasses - replacement cost $15.00 each, OR AS AGREED, plus shipping.
Serial numbers:
Refurbished Synchronizing Drivers - replacement cost $15.00 each, OR AS
AGREED, plus shipping.
Serial numbers:
67
