Exhibit 10.14
EXCLUSIVE DISTRIBUTION CONTRACT
Between contractors:
La Societe d'Etudes et de Realisation audiovisuelles (Study and audio-visual
realization company). Limited company, Moroccan law company, with a capital of
302 371 500 Dhs, and a head office in Xxxxxxxxxx, Xx 0000, Xxxxx xxxx, Xxx
Xxxxx, represented by its Administrator General Director, Xx. XXXXXXX XXXXX.
Xxxxxx called "SOREAD"
On one hand;
And:
"OMNIVISION" limited liability company, located in 31, villa Yasmina, Tarik Ibn
Ziad Avenue, Rabat, represented by its Co-General Director, Xx. XX Xxxxxxxx
Hmida.
Bellow called "OMNIVISION"
On the other hand.
Preamble
It has been several years that SOREAD operates and exploits the second channel's
network in Morocco. The distribution network is composed of employees with
experience in selling pay TV.
OMNIVISION is a company of Moroccan law that invests in the audio-visual
wireless communication technologies and pay TV.
OMNIVISION is a representative of Showtime. The later is a numerical bouquet of
at least 11 pay TV channels intended to the African continent. Showtime diffuses
its programs by direct satellite reception over Morocco.
The following has been agreed:
Article I-Object
"Importing" means that SOREAD can import the numerical decoders and access cards
into Morocco only with OMNIVISION's agreement.
"Exclusive distributor" means that SOREAD will have exclusivity in distributing
Showtime's bouquet, decoders and access cards in Morocco.
Article II-Mission and Obligations:
a-SOREAD's OBLIGATIONS
OMNIVISION confers on SOREAD the title of exclusive distributor of Showtime's
bouquet in Morocco. SOREAD and OMNIVISION decided to set up a common team which
would train the
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agencies employees, and make them familiar with technical and marketing
procedures which are specially elaborated for Showtime products.
SOREAD and OMNIVISION will elaborate a general agenda concerning decoders,
access cards, warranty conditions, promotional material and Showtime's logo.
Decoder and access card sales should be done through SOREAD agencies to
individual and collective subscribers, for servicing one family housing,
residence, Hospitals and Hotels.
SOREAD will weekly inform [summary] OmniVision about the quantity of decoders
and cards sold, and to whom they have been sold with the correspondent addresses
and phone numbers.
b-OMNIVISION's OBLIGATIONS
OMNIVISION declares being appointed by Showtime to exclusively market Showtime's
decoders in Morocco, and to sign every importation and distribution contracts
with SOREAD, exclusive importer and distributor in Morocco. The aforesaid
contract is elaborated with regard to the conditions and obligations on the
distribution contract signed the 14 th of January 1999, for a period of five
years between OMNIVISION and Showtime, a copy of the contract is in the annex.
OMNIVISION engages to:
Exclusively give to SOREAD the right of distributing decoders and access cards
in Morocco, and to make subscribers see Showtime programs by direct satellite
reception, via their numerical decoder.
To provide SOREAD, resubscriptions based on three, six and twelve month periods.
To furnish SOREAD, free decoders and access cards that should be exclusively
used for demonstration of decoder functions and of the Showtime bouquet.
To furnish SOREAD, with free program guides. The magazine's quantity should
equal to the number of subscribers increased by 10%. The sending and stamping
fees will be the responsibility of OMNIVISION.
Declares that any subscriber check payment (for selling or renting a decoder/
subscription or re-subscription) for Showtime product, that is sent back unpaid,
shouldn't be paid by SOREAD to OMNIVISION.
The amount of any decoders not returned by subscribers in the case of leasing
shall be the responsibility of OmniVision
To assure the continuity and quality of Showtime signal 24h/24h (11 channels:
see annex 11). In the case of changes in the diffusion model technology or a
breakdown of Showtime's signal, OMNIVISION should provide subscribers with
appropriate compensation.
To protect SOREAD against any proceeding action that can be taken by any
physical or moral person who directly or indirectly participates in the programs
production, or who claims to have any kind of rights on all or a part of those
programs, andlor on Showtime programs.
o To assert having no restrictions on the rights concerning any person who
has any kind of rights on Showtime programs.
o To be the only one responsible for Showtime program's content, being
understood that diffusion rights have been negotiated for Morocco.
o To protect SOREAD against any claims from Showtime concerning its product's
distribution.
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Article Ill-Advertising and Promotion
OMNIVISION should provide SOREAD with promotional material, which will keep it
in a good condition.
Publicity material production costs would exclusively be on OMNIVISION plus
transportation and customs costs and all related taxes. OMNIVISION would be in
charge of all importation authorization.
Transportation and customs costs for publicity material delivery distributed to
the selling points (posters, leaflets, self-adhesive ... ) would be on
OMNIVISION.
OMNIVISION would assure and be in charge of all promotional and advertising
operations costs (buying media like newspapers, magazines, radio, TV ... ) and
include SOREAD's name and phone number andlor address in all inserts.
OMNIVISION will take on all advertising costs. Notably costs related to the
consulting and conception of the promotional and advertising campaigns.
Every promotional or advertising campaign should have the agreement of both
SOREAD and OMNIVISION.
Article IV-Decoders and cards importation
SOREAD can exclusively import Showtime decoders only if Omnivision gives its
agreement.
Article V-Distribution by OMNIVISION
SOREAD confers to OMNIVISION the title of independent distributor on its agency,
which is located in 00, Xxxxx Xxxxxxx, Xxxxx Xxx Ziad avenue.
A refund of 3% (three percent) should be given by SOREAD to OMNIVISION on each
decoder sold in OMNIVISION Rabat agency, thus on the turnover basis, no tax
included.
Article VI-Price-sales and commissions
Total payment receipts of subscriptions and decoders minus commissions due to
SOREAD by OMNIVISION, should be done during the 45 days following the sale date.
OMNIVISION alone, will afford and be responsible of any notification, payment,
rights, taxes, customs duties, deducting income tax at source, allowances due or
that would be due to Showtime, thus for decoders and access cards importation
and selling in Morocco.
Commissions accorded by OMNIVISION to SOREAD over all the operations done in
Morocco would be as follows:
Decoders: 6% (six percent) over the total turnover, no tax included, on decoders
sales
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Subscriptions: 25 Dhs (twenty five Moroccan Dirhams) monthly on every
subscription, for a full bouquet.
18 Dhs (eighteen Moroccan Dirhams ) monthly on every subscription, for a mini
bouquet (03 channels minimum)
Those commissions are calculated on the basis of 10% commission given by
Showtime to OMNIVISION.
Any raise on subscription's commissions (given to OMNIVISION by Showtime) would
be split between both parties, 50% to SOREAD and 50% to OMNIVISION (the
readjustment will be done once a quarter).
Article VII-Duration
The present contract is for a period of three years beginning from the signature
date of the contract. It is renewable by tacit agreement except if one of the
parties wants to terminate the contract. Termination should be done by a
registered letter plus an acknowledgement receipt, three months before the
contract term.
If both parties want to collaborate furthermore, the contract would be renewed
for a two year period. The party that wants to terminate the contract should
give a three months notice to the other party, thus by a recorded delivery
letter and an acknowledgement receipt.
Article VIII-Termination-Breach of contract
The contract can be breached in the case of having no response 30 days after
sending a notice.
Or in the following cases:
o If OMNIVISION doesn't respect its obligation as regards to SOREAD.
o If SOREAD doesn't respect its obligation as regards to OMNIVISION.
o Definitive stopping of Showtime's signal by the satellite owner.
If one of those cases happens, OMNIVISION engages to assure all the judicial
consequences or others that have caused damage to subscribers in Morocco. SOREAD
wouldn't have any responsibility to Showtime subscribers. Decoder's re-buying
price will be calculated on a three years write off of decoders cost.
OMNIVISION will designate a representative of its choice to establish decoders
inventory and to pay SOREAD by check. This payment will be done after receipt of
a pro-forma xxxx or inventory report signed by the representative or by credit
transfer before OMNIVISION takes back its material.
OMNIVISION engages to assure a continuous broadcasting of Showtime programs in
Morocco, for a minimum of five years.
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Article IX-After sale service
OMNIVISION should provide subscribers with a one year warranty on decoders.
Defective decoder will be taken back and a replacement will be provided.
The use of access cards should be explained to subscribers while making the
sale.
The decoder should be sold on its original packaging with the correspondent
cables that link it to the TV, and with directions for use (subscriber guide).
Defective access cards would be given back to OMNIVISION for a free exchange.
SOREAD should weekly furnish OMNIVISION with a report on all exchange operations
made on the agencies network.
The warranty is cancelled on the following cases.. deliberate or accidental
breakage; damages caused by a non conformance of Showtime's directions;
maintenance defect; deliberate or accidental damages or (water damages, fire,
faulty wiring, explosion ... ); abnormal use of decoders or because of lightning
or thunderstorms.
If a subscriber opens its decoder the warranty would also be cancelled.
For every exchange SOREAD should fill in an exchange form, up date the
warranties and regularly provide OMNIVISION with a copy of those documents.
Article X- Confidentiality
Both parties promise to keep the contract clauses confidential with all the
information and documents linked or related to the contract for its conclusion
andlor for its accomplishment.
Any communication andlor disclosure of one party should first require the other
parties express written agreement.
Each party promise to respect and to make all its employees respect this
confidentiality.
SOREAD and OMNIVISION promise to allow the access, of their respective
documents, to only those of their employees who are in directly concerned with
the said documents.
The confidentiality clause of this contract would be applicable even if the
contract is breached whatever the cause is, and that for an unlimited period.
Article Xl- Piracy
It should be specified that the Showtime decoder is to be used by only one
family housing and for private use only. Any collective or public use that is
not authorized jointly by SOREAD and OMNIVISION will be considered as a
violation of the subscription contract.
Both parties promise to mutually inquire on any violations of the contract.
To that end, OMNIVISION is the only one able to start the necessary proceedings
in Morocco. SOREAD should be informed of any proceeding. All costs would be on
OMNIVISION only.
Article XII- Competence- Arbitration
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In case of dispute, both parties promise to resolve the eventual conflict by
amicable arrangement or to jointly designate an arbiter who will supremely
decide of the procedures to follow.
If both parties don't agree on an arbiter, the most competent court for solving
the dispute is the Commerce Court of Casablanca.
The arbitration will take place in Casablanca.
Made in Casablanca April 28th, 1999 on three original copies signed by
SOREAD OMNIVISION
XXXXX XXXXXXX HMIDA EL KHACHANI
SHOWTIME as a witness
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