EXHIBIT 10.1
LICENSE AND OEM MANUFACTURING AGREEMENT
This License and OEM Manufacturing Agreement (the "Agreement") is made
and effective as of this 1st day of July, 2002, by and among EchoStar Satellite
Corporation ("ESC"), having a place of business at 0000 X. Xxxxx Xx Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, EchoStar Technologies Corporation ("ETC"), having a
place of business at 00 Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000, and
Thomson multimedia Inc. ("Licensee"), having a place of business at 00000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000.
INTRODUCTION
This Agreement confirms the terms and conditions upon which: (i)
Licensee shall manufacture and sell (under license from ETC) Licensee Receivers
to Licensee Retailers, (ii) Licensee shall manufacture and sell (under license
from ETC) ETC Receivers to ETC, and (iii) ETC shall manufacture and sell OEM
Receivers to Licensee.
1. DEFINITIONS
In addition to any other defined terms in this Agreement and except as
otherwise expressly provided for in this Agreement, the following terms shall
have the following meanings:
1.1 "Accessories" means a remote control, antenna, LNB, feedarm and
related components, as such components may change from time to time in ETC's
sole judgment.
1.2 "Activate" means the authorization of a Smart Card to permit a
Receiver to access DISH Network programming.
1.3 "Additional Revenue Receivers" shall have the meaning ascribed to
that term in Section 1.20 below.
1.4 "Affiliate" shall mean, with respect to a party, any person or
entity directly or indirectly controlling, controlled by, or under common
control with such party.
1.5 "Business Rule" means any term, requirement, condition, condition
precedent, process or procedure associated with a Promotional Program or
otherwise identified as a Business Rule associated with a Promotional Program by
ESC, which is communicated to Licensee by ESC or any Affiliate of ESC. ESC
reserves the right, in its sole discretion, to modify any Business Rule at any
time by providing Licensee with ***.
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subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
1.6 "Certificate Program" means any Promotional Program offered by ESC
wherein (i) Licensee purchases a serialized certificate (a "Promotional
Certificate") from ESC or an Affiliate of ESC for resale directly to a Licensee
Retailer, (ii) the Licensee Retailer purchases the Promotional Certificate from
Licensee for resale directly to an end-user, and (iii) the Promotional
Certificate, among other things, entitles the end-user to a Receiver (or the use
of a Receiver, if the program involves leasing the Receiver to the end-user) and
installation of the Receiver.
1.7 "DBS" shall mean direct broadcast satellite.
1.8 "Design Review" shall mean a review conducted between ETC and
Licensee to establish whether Licensee's implementation of the Licensee Receiver
complies with the ETC Receiver Specifications.
1.9 "DISH Network" shall mean the DBS network owned and operated in the
United States by ESC and its Affiliates.
1.10 "EchoStar Parties" shall mean ETC and ESC.
1.11 "Eligible Programming" means the then-current DISH Network
programming packages for which ESC pays a monthly incentive to its retailers
generally, which programming packages may change at any time and from time to
time in the sole judgment of ESC.
1.12 "ETC Marks" shall mean trademarks, service marks and trade names
owned by ETC and/or its Affiliates or for which ETC and/or its Affiliates have
the right to grant a sublicense.
1.13 "ETC Receiver Specifications" shall mean those specifications
defining DISH Network broadcast reception requirements, Receiver performance
requirements, Receiver mechanical configuration, and other Receiver form, fit,
look, feel and function as specified by ETC from time to time.
1.14 "ETC Receivers" shall mean Receivers that are manufactured in
strict conformance with the ETC Receiver Specifications by Licensee or on behalf
of Licensee by *** and branded with such trademarks as ETC may designate from
time to time in its sole judgment,
1.15 "ETC Technology" shall have the meaning ascribed to that term in
Section 2.1 below.
1.16 "Integrated Receivers" shall have the meaning ascribed to that
term in Section 1.20 below.
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subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
1.17 "License" shall have the meaning ascribed to that term in Section
2.2.1 below.
1.18 "License Fee" shall have the meaning ascribed to that term in
Section 2.5 below.
1.19 "Licensed Technology" shall have the meaning ascribed to that term
in Section 2.2.1 below.
1.20 "Licensee Receivers" shall mean Receivers that are manufactured in
strict conformance with the ETC Receiver Specification by Licensee or on behalf
of Licensee by ***. Licensee shall be entitled to apply Licensee branding to
Licensee Receivers in accordance with ETC's trademark usage guidelines, the
current version of which is attached hereto as Exhibit A, as such guidelines may
change from time to time in ETC's sole judgment upon written notice to Licensee,
provided that Licensee shall have a commercially reasonable period of time to
implement changes to such guidelines. Licensee Receivers shall specifically
include Receivers that are combined with or incorporated into another product,
i.e., a television or VCR, ("Integrated Receivers"), but shall specifically
exclude Receivers that are combined with or incorporated into another product
that has the independent potential to generate subscription revenues or other
additional revenue streams from end users ("Additional Revenue Receivers").
1.21 "Licensee Retailer" shall have the meaning ascribed to that term
in Section 4.1 below.
1.22 "ODU" shall mean the outdoor unit satellite reception device used
in conjunction with a Receiver to obtain DISH Network programming.
1.23 "Optional Accessories" shall mean accessories (other than
Accessories) that are of subordinate importance to a Licensee Receiver or OEM
Receiver and are not essential to the use of a Licensee Receiver or OEM
Receiver, but rather are supplementary and serve the purpose of merely adding to
the convenience or effectiveness of a Licensee Receiver or OEM Receiver, such as
replacement remote controls, cables, off-air antennas, replacement LNBs, surge
protectors and telephone line extenders. For the avoidance of doubt, nothing set
forth herein is intended or shall be construed as granting Licensee any rights
whatsoever to affix any ETC Marks on, or to incorporate any ETC Technology into,
any Optional Accessories.
1.24 "OEM Receivers" shall have the meaning ascribed to that term in
Section 3.1 below.
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subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
1.25 "Other Manufacturer" shall have the meaning ascribed to that term
in Section 2.11 below
1.26 "contractor" shall have the meaning ascribed to that term in
Section 2.4.4 below.
1.27 "Primary Receiver" shall mean the first Receiver to be Activated
on a new Subscriber Account.
1.28 "Promotional Program" means: (i) a promotional offer presented to
Licensee by ESC, which Licensee may present to Licensee Retailers and Licensee
Retailers may in turn present to end users in connection with such Licensee
Retailer's promotion and solicitation of orders for DISH Network programming;
(ii) the incentives that Licensee may receive in connection with such
promotional offer; and (iii) the Business Rules setting forth the details
(including restrictions) governing the promotional offer and corresponding
incentives. ESC reserves the right to discontinue any Promotional Program at any
time and from time to time in its sole discretion upon notice to Licensee.
1.29 "Qualifying Residential Subscriber" means an individual at a
Residential Location who orders DISH Network programming from ESC for reception
in connection with an OEM Receiver or Licensee Receiver, as the case may be, who
pays all programming and other charges to ESC and its Affiliates in full during
the applicable chargeback period described in Section 1.38 below, and who has
never received any video programming services from ESC or any of its Affiliates.
A Qualifying Residential Subscriber shall not include any individual who would
otherwise qualify, but whose equipment ESC, in its sole judgment, declines to
Activate.
1.30 "Receiver" shall mean a digital DBS receiver that: (i) is a
stand-alone set top box or integrated with another consumer electronics device
in a set top box configuration; (ii) is solely compatible with DISH Network,
unless the cause for compatibility beyond DISH Network originates solely from
(a) compliance with the ETC Receiver Specifications, and/or (b) incorporation of
ETC Technology, and/or (c) third party intervention (e.g., hacking of DISH
Network's conditional access system) absent negligence on Licensee's part; and
(iii) is intended for resale solely in the Territory.
1.31 "Residential Location" means a single family residential dwelling
(i.e., single family houses, apartments, condominiums or other dwellings used
primarily for residential purposes), located in the Territory; provided,
however, in no case shall any satellite master antenna television system or
private cable system in a residential multiple dwelling unit or any similar
programming reception system (i.e., dormitories, etc.) be considered a
Residential Location. ESC shall have the right to determine, in its
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subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
sole judgment, whether a location constitutes a Residential Location, or is more
appropriately considered a commercial location or other non-residential
location.
1.32 "Retailer Incentive Agreements" shall have the meaning ascribed to
that term in Section 4.2 below.
1.33 *** shall mean ***.
1.34 "Secondary Receiver" shall mean any Receiver that is Activated on
a Subscriber Account other than the Primary Receiver.
1.35 "Smart Card" means the removable conditional access card, which,
through the use of a secure microprocessor, controls the ability of a Licensee
Receiver, ETC Receiver or OEM Receiver, as the case may be, to access DISH
Network programming.
1.36 "ETC Software" shall mean the object code software modules
delivered to Licensee by ETC for use in the manufacture and/or operation of the
Licensee Receivers and ETC Receivers.
1.37 "Specialty OEM Receiver" shall mean an OEM Receiver model that is
substantially the same as any Receiver model manufactured by or on behalf of ETC
other than the Receiver models in the most prevalent family of Receiver models
manufactured by and on behalf of ETC (as determined based on the total number of
units manufactured by and on behalf of ETC for each family of Receiver models
during the immediately preceding 180 days). For purposes of this Section 1.37, a
"family" of Receivers models shall mean Receiver models using the same core
chipset technology. For example, as of the date first set forth above, the 301
model would be included in the most prevalent family of Receiver models and the
322 model would not be included in the most prevalent family of Receiver models,
because the 322 model uses different core chipset technology than the 301 model.
1.38 "Subscriber Account" means the account set up and maintained by
ESC for a Qualifying Residential Subscriber for whom Eligible Programming has
been activated by ESC and which account remains active and in good standing
throughout the standard charge back period set forth in ESC's standard
incentivized retailer agreement, attached hereto as Exhibit B, or in the
applicable Business Rules, as such standard incentivized retailer agreement and
applicable Business Rules may change at any time and from time to time in ESC's
sole judgment upon written notice to Licensee; provided that, in the event of
any conflict or inconsistency between the standard charge back period set forth
in ESC's standard incentivized retailer agreement and the standard charge back
period set forth in the applicable Business Rules, then the standard charge back
period set forth in the applicable Business Rules shall control.
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subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
1.39 "Territory" shall mean the geographic boundaries of the
continental United States.
1.40 "Third Party Intellectual Property" shall have the meaning
ascribed to that term in Section 10.2.1(c).
1.41 "Third Party Xxxx" shall mean the *** standard trademarks and any
other trademark, trade name or service xxxx owned by a third party and for which
neither ETC or any of its Affiliates nor Licensee or any of its Affiliates have
the right to grant a sublicense.
1.42 "Trademark Agreement" shall have the meaning ascribed to that term
in Section 11.16 below.
2. LICENSE
2.1 Background. ETC and its Affiliates have designed, developed and
acquired through license, certain intellectual property and other proprietary
technology for the design, development and manufacture of current generation
Receivers in accordance with the ETC Receiver Specifications and continue to
design, develop and attempt to acquire through license certain intellectual
property and other proprietary technology for the design, development and
manufacture of next generation Receivers in accordance with the ETC Receiver
Specifications (collectively, the "ETC Technology"). ETC shall use its
reasonable commercial efforts to compile for Licensee a list of ETC Technology,
provided the parties recognize such list will not be entirely comprehensive.
2.2 Grant of License.
2.2.1 Subject to the terms and conditions set forth below
(including without limitation payment of the License Fee pursuant to Section 2.5
below and the restrictions set forth in Section 2.4 below), ETC hereby grants to
Licensee a limited, non-exclusive, non-transferable, indivisible license (the
"License") to use the ETC Technology that is owned exclusively by ETC and its
Affiliates and the ETC Technology that ETC and its Affiliates have the right to
sublicense to Licensee without imposing terms and conditions in addition to
those set forth herein (collectively, the "Licensed Technology") solely for the
purposes of: (i) manufacturing, or having manufactured by ***, Licensee
Receivers in strict conformance with ETC Receiver Specifications (absent prior
written agreement by ETC to deviations from the ETC Receiver Specifications,
which agreement shall not be unreasonably withheld or delayed) and selling such
Licensee Receivers (a) directly to Licensee Retailers for resale by such
Licensee
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subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
Retailers directly to end-users in the Territory for use in connection with DISH
Network, (b) to Licensee's and its Affiliates' employees, friends and family
pursuant to the terms and conditions of a program to be mutually agreed upon by
Licensee and ESC; and (c) directly to end-users through XXX.xxx pursuant to the
terms and conditions of a program to be mutually agreed upon by Licensee and
ESC, and (ii) manufacturing, or having manufactured by ***, ETC Receivers in
strict conformance with ETC Receiver Specifications (absent prior written
agreement by ETC to deviations from the ETC Receiver Specifications, which shall
not be unreasonably withheld or delayed) and selling such ETC Receivers directly
to ETC, its Affiliates and designees. Licensee agrees that it will not sell any
Licensee Receivers to any person or entity who Licensee knows or has reason to
know intends to use it, or resell it for use, in Canada or at any other location
outside of the Territory.
2.2.2 Exhibit C attached hereto sets forth the technologies
for which ETC is presently paying a royalty in connection with Receivers
manufactured by, or on behalf of, ETC. ***. The parties shall mutually agree
from time to time upon whether Licensee or ETC shall be responsible for the
payment of royalties for the technologies set forth on Exhibit C attached hereto
in connection with Licensee Receivers.
2.3 ETC Marks. Upon request by ETC, Licensee shall affix such ETC Marks
as ETC may designate from time to time in writing to the bezel (front panel) and
electronic program guide of the Licensee Receivers, any Accessories included
therewith, any packaging therefor, and XXXx in accordance with: (i) ETC's
trademark usage guidelines, the current version of which is attached hereto as
Exhibit A; and (ii) ETC's user interface specification, as such guidelines and
specification may change from time to time in ETC's sole discretion upon written
notice to Licensee, provided that Licensee shall have a commercially reasonable
period of time to implement changes to such guidelines and specification. In
furtherance and without limitation of the foregoing, Licensee agrees to: (a)
affix such ETC Marks in the center of, and above the Licensee branding and Third
Party Marks (as defined in Section 1.41 above) affixed to, all XXXx intended for
use with Licensee Receivers; and (b) otherwise affix such ETC Marks such that
they are displayed in a manner which is at least equally as prominent as the
Licensee branding affixed to the same. Notwithstanding the foregoing, Licensee
shall have no obligation *** nothing in this Section 2.3 shall preclude Licensee
from using its marks on the Licensee Receiver, provided such usage otherwise
complies with the terms and conditions of this Section 2.3.
2.4 License Restrictions.
2.4.1 Licensee shall use the Licensed Technology for the sole
purposes of developing, manufacturing, repairing, servicing and selling the
Licensee Receivers and ETC Receivers, subject to the terms and conditions set
forth herein, and not for any other purpose. Subject to the limitations set
forth below, Licensee shall have the right to
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subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
incorporate all or part of the Licensed Technology into Integrated Receivers,
but shall have no right to incorporate the Licensed Technology into a particular
Additional Revenue Receiver unless and until such time as Licensee, ETC and the
licensor(s), if any, of the technology necessary to generate the additional
revenue streams, agree upon their respective rights to, and obligations
regarding, that technology and the aggregate revenue stream generated by the
Additional Revenue Receiver.
2.4.2 Licensee will not be entitled to manufacture any
Licensee Receivers under any brand names other than RCA, GE and RCA Scenium,
without the prior written consent of ETC and ESC, which consent shall not be
unreasonably withheld or delayed. ETC shall commence delivery of Licensed
Technology to Licensee following payment of the first installment of the License
Fee by Licensee. In no event shall a party be obligated to provide any
technology or other information to another party unless the provision of such
technology and information is in full compliance with applicable laws and
regulations of the United States, including, but not limited to, those relating
to the export of technology.
2.4.3 Licensee shall manufacture the Licensee Receivers and
ETC Receivers so that *** absent specific prior written agreement of the parties
to the contrary. In addition, absent specific prior written agreement of the
parties to the contrary, Licensee shall be expressly prohibited from ***
Licensee shall further be prohibited from *** without ETC's prior written
consent, which consent may be withheld in ETC's sole judgment.
2.4.4 Licensee shall have no right to grant sublicenses with
respect to the Licensed Technology, without the prior written consent of ETC,
which consent may be withheld in ETC's sole judgment. ***
2.4.5 Notwithstanding anything to the contrary set forth
herein, this Agreement is not intended and shall not be construed as limiting
the right of Licensee to directly license from third parties any technology
proprietary to such third party for purposes unrelated to Licensee's
relationship with ETC and ESC.
2.5 License Fee. In consideration for the License and related technical
assistance to be furnished to Licensee by ETC during the Term, effort expended
by ETC during the Term, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Licensee irrevocably
and absolutely agrees to pay to ETC the amount of *** (the "License Fee"), as
previously agreed by the parties hereto in Section 2.4 of the Memorandum OEM
Manufacturing Agreement dated January 9, 2002, by and among the parties hereto.
The License Fee shall be payable in ***. ETC hereby acknowledges receipt of ***.
The parties agree that ***shall be made by Licensee to ETC in immediately
available funds on or before the last business day of ***. Notwithstanding any
provision of this Agreement to the contrary, all installments
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subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
shall be paid by Licensee to ETC regardless of whether this Agreement has
previously been terminated and regardless of the reason for any such
termination. Licensee hereby acknowledges and agrees that its obligation to pay
***License fee is unconditional and absolute. ***
2.6 Smart Cards.
2.6.1 General Terms of Purchase and Supply. Licensee shall
purchase exclusively from ETC all Smart Cards necessary to: (i) develop and
manufacture Licensee Receivers and ETC Receivers under the terms of this
Agreement, (ii) fulfill its warranty obligations regarding Licensee Receivers
and ETC Receivers under the terms of this Agreement, and (iii) perform
out-of-warranty service and repair or replacement of Licensee Receivers. ETC
shall supply Licensee, at the price specified below, with a float of Smart Cards
for use in the fulfillment of its warranty obligations regarding Licensee
Receivers and ETC Receivers hereunder and for use in the performance of
out-of-warranty repair and service of Licensee Receivers in a quantity per 1,000
sales of Licensee Receivers and ETC Receivers to end users that is consistent
with ETC's Smart Card warranty replacement history; provided, however, that ETC
shall provide Smart Cards in excess of that quantity in the event that Licensee
can adequately justify its need therefore for use in the fulfillment of its
warranty obligations regarding Licensee Receivers and ETC Receivers hereunder
and for use in the performance of out-of-warranty repair and service of Licensee
Receivers. ETC shall supply Licensee with such additional quantity of Smart
Cards, without unreasonable delay, at the price specified below, as ETC
following consultation with Licensee determines is reasonably necessary for use
in the development of Licensee Receivers and ETC Receivers. Licensee
acknowledges and agrees that Smart Cards are only being made available to
Licensee under this Section 2.6.1 for Licensee to: (a) develop and manufacture
Licensee Receivers and ETC Receivers under the terms of this Agreement, (b) to
perform its reasonable warranty fulfillment obligations regarding Licensee
Receivers and ETC Receivers under the terms of this Agreement, and (c) to
perform reasonable out-of-warranty repair and service of Licensee Receivers. In
view of the potential for a subscriber to defraud ESC by improperly obtaining a
replacement Smart Card under a false warranty claim, Licensee agrees that it
will not use Smart Cards provided by ETC under this Section 2.6.1 for any
purpose whatsoever other than to: (1) develop and manufacture Licensee Receivers
and ETC Receivers under the terms of this Agreement, (2) fulfill its warranty
obligations regarding Licensee Receivers and ETC Receivers under the terms of
this Agreement, and (3) provide reasonable out-of-warranty repair and service of
Licensee Receivers. Licensee further acknowledges and agrees that, with respect
to Smart Cards that have been lost, stolen or destroyed end users must purchase
replacement Smart Cards directly from ETC (or such other entity as ETC may
designate from time to time in writing) subject to such terms and conditions and
at such prices as ETC may determine from time to time in its sole judgment.
Specifically but not by limitation, under no circumstances shall Licensee sell
Smart Cards other than a single Smart Card integrated with each Licensee
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subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
Receiver and each ETC Receiver without prior written consent or direction from
ETC. Licensee agrees to provide ETC with a written report matching the
identification number of each replacement Smart Card with the CAID number and
serial number of the Licensee Receiver or ETC Receiver, as the case may be, into
which it is installed prior to returning the Licensee Receiver or ETC Receiver,
as the case may be, to the end-user. In addition, Licensee shall notify ETC of
the disposition and identification number of all Smart Cards that Licensee has
replaced but not yet returned to ETC within five (5) business days of such
replacement.
2.6.2 Price.
(a) Subject to Section 2.6.1 above, ETC agrees to
supply Smart Cards to Licensee to manufacture, or have manufactured *** , ETC
Receivers at the price of *** per Smart Card.
(b) Subject to Section 2.6.1 above, ETC agrees to
supply Smart Cards to Licensee to: (i) develop Licensee Receivers and ETC
Receivers; (ii) manufacture, or have manufactured ***, Licensee Receivers, (iii)
perform, or have performed ***, warranty repair of Licensee Receivers and ETC
Receivers, and (iv) perform, or have performed *** , out-of-warranty repair of
Licensee Receivers at the initial price of *** per Smart Card. ***
(c) ***
2.6.3 Shipping Costs. All Smart Cards purchased by Licensee
under Section 2.6.1 above shall be shipped F.O.B. point of shipment (a)
Huntsville, Alabama USA, (b) Denver, Colorado USA, or (c) Atlanta, Georgia USA,
at ETC's option exercisable from time to time in its sole judgment. Title and
risk of loss of Smart Cards purchased by Licensee under Section 2.6.1 above
shall pass to Licensee upon delivery by ETC or its agent to the carrier for
shipment thereof. Licensee shall be responsible for all costs of shipping and
insurance of Smart Cards purchased by Licensee under Section 2.6.1 above.
Licensee shall have the sole responsibility to file any claims with the carrier
for damage, missing items or otherwise, and ETC shall have no liability or
responsibility if Licensee is unable to obtain full compensation for any loss
from the claim. Licensee shall select the method of shipment and carrier;
provided, however, that, in the event that Licensee fails to make the necessary
arrangements for shipment, Licensee acknowledges and agrees that ETC shall,
without incurring any liability, have the option, in its sole judgment, to
select the method of shipment and the carrier on Licensee's behalf and at
Licensee's expense.
2.6.4 Smart Card Warranty.
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the Securities Exchange Act.
(a) With respect to Smart Cards purchased by Licensee
from ETC in conjunction with an OEM Receiver or under Section 2.6.1, ETC shall
pass through to Licensee the then-current warranty provided to ETC by NagraStar
LLC with respect to the relevant Smart Cards, as such warranty may change at any
time and from time to time in NagraStar LLC's sole judgment. On the date first
set forth above, NagraStar LLC presently warrants to ETC that Smart Cards shall
be free from defects in materials and workmanship for the shorter of: (i) ***
after the Smart Card is activated for program reception, or (ii) *** after the
Smart Card is shipped to ETC by NagraStar LLC (the "Warranty Period"). Licensee
shall return defective Smart Cards purchased by Licensee from ETC in conjunction
with an OEM Receiver or under Section 2.6.1 above at Licensee's expense. If a
Smart Card purchased by Licensee from ETC in conjunction with an OEM Receiver or
under Section 2.6.1 above is: (i) verified as having failed during the Warranty
Period; (ii) returned to ETC by Licensee within *** after expiration of the
Warranty Period; and (iii) confirmed as defective by ETC, Licensee's exclusive
remedy for fulfillment of this warranty shall be for ETC to repair and return or
replace and return conforming Smart Cards to Licensee at no charge to Licensee;
provided that ETC may elect instead to refund Licensee the purchase price of
such defective Smart Cards if ETC determines in its reasonable judgment that a
refund is preferable to replacement for security or other legitimate business
reasons.
(b) THE LIMITED WARRANTY PROVIDED BY ETC FOR SMART
CARDS IN SECTION 2.6.4(a) IS IN LIEU OF ALL OTHER WARRANTIES, WHETHER STATUTORY,
EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OF FITNESS FOR A
PARTICULAR USE OR PURPOSE. IN NO EVENT SHALL ETC BE LIABLE FOR ANY INDIRECT,
EXEMPLARY, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF USE)
ARISING OUT OF OR IN CONNECTION WITH THE SALE, USE OR PERFORMANCE OF ANY SMART
CARDS AND REGARDLESS OF WHETHER SUCH DAMAGES ARE BASED UPON BREACH OF WARRANTY
OR CONTRACT, NEGLIGENCE, STRICT LIABILITY OR ANY OTHER LEGAL THEORY.
2.6.5 Smart Card Returns. With respect to obsolete Smart Cards
in Licensee's inventory that are returned to ETC by Licensee at Licensee's
expense, ETC shall replace and return current Smart Cards to Licensee at no
charge to Licensee; provided that ETC may elect instead to refund Licensee the
purchase price of such obsolete Smart Cards if ETC determines in its reasonable
judgment that a refund is preferable to replacement for security or other
legitimate business reasons.
2.7 Matching Purchases by ETC.
2.7.1 General Terms and Conditions. Licensee agrees to
manufacture and sell to ETC, and ETC agrees to purchase from Licensee: (a) ***
ETC Receivers *** beginning upon commencement of the first mass production run
of
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
Licensee Receivers by Licensee; and (b) *** ETC Receivers, for each Licensee
Receiver and Specialty OEM Receiver that is (i) sold by Licensee directly to a
Licensee Retailer, (ii) is resold by such Licensee Retailer directly to an
end-user in the Territory, and (iii) results in the creation of a new Subscriber
Account; provided that the *** set forth in Subsection (a) above shall count
towards ETC's purchase obligations under Subsection (b) above. ETC shall have
*** from the date of Activation of the underlying Licensee Receiver or Specialty
OEM Receiver to order and accept delivery of its matching purchase of an ETC
Receiver under Subsection (b) above from Licensee. ETC's purchase obligations
under this Section 2.7.1 are subject to the forecasting, ordering, shipping and
delivery terms and conditions set forth in Sections 2.7.4, 2.7.5 and 2.7.6
below, and are contingent upon Licensee meeting or exceeding ETC's reasonable
manufacture and delivery requirements that do not conflict with Sections 2.7.4,
2.7.5, 2.7.6 and 2.16 below.
2.7.2 ETC shall be entitled to choose, in its sole judgment
from available Licensee Receiver models, the ETC Receiver model that it will
purchase, regardless of the underlying model Licensee Receiver or Specialty OEM
Receiver giving rise to ETC's purchase obligations under Section 2.7.1 above.
ETC's purchase obligations under Section 2.7.1 shall be contingent upon: (i) the
ETC Receivers meeting ETC's quality and compatibility standards; ***
2.7.3 Upon request, Licensee shall affix such ETC Marks and
Third Party Marks as ETC may designate from time to time in writing on the ETC
Receivers (including without limitation on the bezel (front panel) and
electronic program guide), any Accessories included therewith, any packaging
therefor, and XXXx in accordance with: (i) ETC's trademark usage guidelines, the
current version of which is attached hereto as Exhibit A; and (ii) ETC's user
interface specification, as such guidelines and specification may change from
time to time in ETC's sole discretion upon written notice to Licensee, and as
ETC may otherwise direct at any time and from time to time; provided that
Licensee shall have a commercially reasonable period of time to implement
changes to such guidelines, specification and direction. Licensee shall have no
right whatsoever to affix any Licensee branding or other marks to ETC Receivers
without ETC's prior written consent, which consent may be withheld in ETC's sole
judgment. Except as otherwise set forth to the contrary in this Section 2.7.3,
all ETC Receivers delivered hereunder to ETC (or its designees) shall be
identical in functionality and technical specifications to Licensee Receivers,
and shall be identical in appearance to Licensee Receivers. Notwithstanding the
above, Licensee shall not be obligated to include *** provided that Licensee
shall be obligated to include ***.
2.7.4 Commencing with the first full calendar month in the
Term and during each calendar month in the Term thereafter, ETC shall provide
Licensee with a forecast specifying quantities of each available Licensee
Receiver model that ETC expects to purchase in each of the *** months following
the calendar month in which the forecast was provided to Licensee (the "Forecast
Month"). With respect to
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*** Certain confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
the *** months of the initial forecast and the *** month of each forecast
submitted thereafter, the specified quantities for each forecasted model of ETC
Receiver may be increased or decreased by ETC by *** upon issuance of the next
forecast. With respect to the *** month of each forecast, the specified
quantities for each forecasted model of ETC Receiver may be increased or
decreased by ETC by *** upon issuance of the next forecast. With respect to the
*** month of each forecast, the specified quantities for each forecasted model
of ETC Receiver may be increased or decreased by ETC by *** upon issuance of the
next forecast. With respect to the *** month of each forecast, the specified
quantities for each forecasted model of ETC Receiver may be increased or
decreased by ETC by *** upon issuance of the next forecast. Subject to the
above, a new monthly forecast will always supercede completely any previous
forecasts. Licensee shall order or inventory component parts sufficient to meet
the requirements specified in the *** months of each forecast. For components
whose purchase lead times exceed *** months, Licensee will calculate component
quantity requirements corresponding to those components' lead times, and
approach ETC for authorization to purchase those parts. ETC may then authorize
purchase of some or all of the components beyond the *** month time horizon, and
will become liable for the cost of these components should ETC's future purchase
orders not consume those authorized quantities. Licensee shall approach ETC for
re-authorization monthly for all such long lead time components.
2.7.5 ETC will use reasonable commercial efforts to translate
the *** months of the initial forecast and the *** month of each forecast
submitted thereafter into a purchase order, including requested delivery dates,
on or before the *** day of the applicable Forecast Month. Purchase orders of
ETC shall state only: (i) identity of goods; (ii) quantity of goods; (iii)
purchase price of goods; and (iv) requested ship date of goods. In the event of
any conflict or inconsistency between the terms of a purchase order and the
terms of this Agreement, the terms of this Agreement shall prevail. Licensee
will make commercially reasonable efforts to fulfill all valid purchase orders
issued by ETC. Any failure to confirm such a purchase order shall not be deemed
acceptance by Licensee. Licensee will inform ETC of the acceptance or rejection
of a purchase order, in whole or in part, within a reasonable time after receipt
of the relevant purchase order. Should Licensee reject the applicable purchase
order or should Licensee's acceptance include different delivery dates or
product mix than in the ETC purchase order, ETC shall be permitted to modify the
purchase order in whole or in part and the process shall be repeated until full
agreement is reached. ETC shall have the option, exercisable in its sole
discretion, to reduce its obligation to purchase ETC Receivers from Licensee
under Section 2.7.1 above by the difference between the original quantity
ordered by ETC, and the quantity finally agreed upon pursuant to the above
process, which shall be deemed to be zero (0) in the event that Licensee
rejected the applicable purchase order or the parties are unable to agree upon a
final quantity; provided that, in the event that the original quantity ordered
by ETC is greater than the average monthly quantity ordered by ETC from *** and
all Other Manufacturers over the
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*** Certain confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
preceding twelve (12) months (the "Average Quantity"), then ETC shall only have
the option, exercisable in its sole discretion, to reduce its obligation to
purchase ETC Receivers from Licensee under Section 2.7.1 above by the difference
between the Average Quantity, and the quantity finally agreed upon pursuant to
the above process. The quantities specified for each model of ETC Receiver in a
purchase order issued by ETC under this Section 2.7.5 may be increased or
decreased by ETC by *** without penalty, subject to its obligation under Section
2.7.1 to (a) purchase *** ETC Receivers within the *** period beginning upon
commencement of the first mass production run of Licensee Receivers by Licensee
and (b) order and accept delivery of its matching purchase of *** ETC Receivers
from Licensee within *** from the date of Activation of the underlying Licensee
Receiver or Specialty OEM Receiver, as the case may be. Additionally, ETC shall
have the right to modify any purchase order issued under this Section 2.7.5 to
extend delivery dates and change delivery locations upon written notice to
Licensee received at least two (2) business days prior to the scheduled ship
date, subject to its obligations under Section 2.7.1 to (a) purchase *** ETC
Receivers within the six (6) month period beginning upon commencement of the
first mass production run of Licensee Receivers by Licensee and (b) order and
accept delivery of its matching purchase *** ETC Receivers from Licensee within
six (6) months from the date of Activation of the underlying Licensee Receiver
or Specialty OEM Receiver, as the case may be.
2.7.6 All ETC Receivers shall be shipped D.D.P. ETC's
warehouse (a) Denver, Colorado USA, or (b) Atlanta, Georgia USA, at ETC's option
exercisable from time to time in its sole judgment, but title and risk of loss
shall pass to ETC when the applicable ETC Receivers cross into the customs
territory of the United States. Licensee shall obtain, at its own expense, cargo
insurance for each shipment of ETC Receivers. Such insurance shall be on terms
and conditions reasonably acceptable to ETC and shall be placed with reputable
underwriters or a reputable insurance company reasonably acceptable to ETC. Such
insurance shall name ETC as an additional insured and shall name ETC as sole
loss payee from and after the point at which title and risk of loss for the
relevant shipment of ETC Receivers passes to ETC (as provided above). The
duration of such insurance cover shall be from the point at which title and risk
of loss for the relevant shipment of ETC Receivers passes to ETC (as provided
above) through delivery of the relevant shipment of ETC Receivers to ETC at the
agreed point at the named place of destination. The minimum insurance shall
cover the price provided in this Agreement for the relevant ETC receivers and
shall be provided in the currency set forth herein. Licensee shall, upon ETC's
request, provide ETC with any and all relevant insurance policies or other
evidence of relevant insurance cover reasonably acceptable to ETC. Licensee
shall have the sole responsibility to file any claims with the carrier for
damage, missing
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*** Certain confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
items or otherwise arising prior to the transfer of title and risk of loss to
ETC, and ETC shall have no liability or responsibility if Licensee is unable to
obtain full compensation for any loss from any such claim. ETC shall have the
sole responsibility to file any claims with the carrier for damage, missing
items or otherwise arising after the transfer of title and risk of loss to ETC,
and Licensee shall have no liability or responsibility if ETC is unable to
obtain full compensation for any loss from any such claim. Licensee shall be
responsible for all costs of shipping of ETC Receivers. Licensee and ETC shall
mutually agree upon the method of shipment and carrier. Shipments will be made
in standard shipping packages that have been approved by ETC. All shipments will
include a packing slip which lists items contained in the shipment by part
number, descriptions (including the CAID number, serial number and corresponding
Smart Card number for each ETC Receiver), quantity, and purchase order number.
Not later than *** before the scheduled delivery dates, ETC will notify Licensee
in writing of the specific shipping destinations and the specific quantity of
ETC Receivers to be shipped to each destination, which ETC agrees will be in
full truckloads with at least one full truckload per destination or such other
minimum quantity as the parties may agree to from time to time. Licensee will
use reasonable efforts to make shipments of ETC Receivers by the dates specified
in purchase orders accepted from ETC; provided, however, that Licensee shall be
permitted to modify shipping dates due to circumstances beyond Licensee's
reasonable control. All deliveries are contingent on Licensee or ***, as the
case may be, receiving timely shipment of necessary materials for production.
Within five (5) days after Licensee becomes aware that it will not be able to
make shipment of ETC Receivers by the date specified in a purchase order
accepted from ETC, Licensee shall give ETC notice setting forth an estimated
delivery date. ETC shall have the right to cancel or modify any purchase order
for which Licensee extends the shipping date by more than thirty (30) days or
fails to ship within thirty (30) days of the shipping date specified in the
purchase order, by means of a written notice to Licensee within five (5) days
following written notice by Licensee to ETC of such modification or failure to
ship. ETC shall have the option, exercisable in its sole discretion, to apply
the quantity of ETC Receivers set forth in purchase orders canceled by ETC under
this Section 2.7.6 towards the quantity of ETC Receivers required to be
purchased by ETC under Section 2.7.1 above.
2.7.7 Price Increases. Increases in the price of any ETC
Receivers shall not apply to any units of ETC Receivers that have been ordered
under a firm and binding purchase order by ETC on or before the effective date
of such price increase, provided the original shipment date specified by ETC is
not more than thirty days after the date of Licensee's acceptance of such order.
2.7.8 Price Reductions.
(a) Price reductions shall be effective immediately,
unless Licensee specifies otherwise. In the event of a price reduction on an ETC
Receiver, ETC is entitled to request in writing a credit ("DISH Price Reduction
Credit") in an amount based on the inventory of ETC, distributors and retailers
of that particular ETC Receiver, in accordance with the terms of this section.
The amount of credit shall *** multiplied by the *** as of the effective date of
the price reduction.
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*** Certain confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
(b) The ETC Receivers shall be compared for
"sameness", counted and priced as systems or individual components in accordance
with how they were originally purchased by ETC from Licensee (ETC Receivers
originally purchased as systems shall not be eligible for a DISH Price Reduction
Credit if the price reduction applies to an individual component, and ETC
Receivers originally purchased as individual components shall not be eligible
for a DISH Price Reduction Credit if the price reduction applies to a system).
Within five (5) business days after the effective date of such price change, ETC
shall furnish Licensee with an itemized inventory (including all inventory
located at any distributor or retailer location that is the subject of the
request for the DISH Price Reduction Credit), with serial numbers, of the
relevant ETC Receivers and corresponding Smart Cards for each ETC Receiver, as
of such date, including information as to the mode of original purchase from
Licensee (as systems or individual components), the amount of time such ETC
Receivers have been held in the inventory of ETC, a distributor or a retailer
and any other information Licensee may reasonably request. Any DISH Price
Reduction Credit shall be applied by Licensee to the purchase price of ETC's
subsequent orders of ETC Receivers from Licensee in the form of a credit memo
issued to ETC by Licensee. If at the time of the price reduction, ETC has
ordered but not yet paid for ETC Receivers, ETC shall only be required to pay
for such ETC Receivers at the reduced price. Therefore, no DISH Price Reduction
Credit shall accrue with respect to those orders.
(c) Licensee shall have the right to audit upon
reasonable notice the inventory of ETC, any distributor or any retailer to
verify the accuracy of any request by ETC for a DISH Price Reduction Credit. ETC
shall also provide, at Licensee's request, the supporting information described
in the preceding paragraph in electronic format to facilitate the verification
by Licensee that an ETC Receiver subject to a request for a DISH Price Reduction
Credit has not been Activated.
2.7.9 In addition to the purchases described in Section 2.7.1
above, ETC shall have the option, exercisable in its sole judgment at any time
and from time to time to purchase ETC Receivers from Licensee, subject to the
forecasting, ordering, shipping and delivery terms set forth in Sections 2.7.4,
2.7.5 and 2.7.6.
2.7.10 Licensee will only be authorized to sell ETC Receivers
to ETC and such other persons and entities as ETC may approve from time to time
in writing in ETC's sole judgment. ETC's approval of a person or entity under
this Section 2.7.10 shall apply to all orders placed by said person or entity
until written notice of revocation of such approval has been received by
Licensee.
2.7.11 All invoices to ETC hereunder shall be due, in
immediately available funds, within *** from the date of invoice, which shall be
issued no earlier than the ship date for the ETC Receivers covered by the
invoice.
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*** Certain confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
2.7.12 Default. If ETC defaults in any payment due Licensee,
or ETC violates any material term or condition of this Agreement or of any
credit extended by Licensee or any Affiliate to ETC, Licensee reserves the right
to: (i) suspend any shipment to ETC; (ii) require payment for shipments prior to
shipment or delivery; and/or (iii) require payment of all unpaid balances prior
to any shipment and payment for that shipment. Exercise of any of the above
rights by Licensee shall not be construed as a limitation of Licensee's
authority to exercise any other rights which Licensee may have at law, in
equity, under contract or otherwise.
2.7.13 Sale of ETC Receivers by Licensee.
(a) While, subject to Sections 2.7.5 and 2.7.6, ETC's
obligation to honor purchase orders submitted to Licensee is absolute, in the
event that ETC breaches this obligation, then ETC shall have the option to pay
to Licensee, in advance, all costs ("ETC Retrofit Costs") anticipated by
Licensee as reasonable and necessary to remove all ETC Marks from the ETC
Receivers covered by the relevant purchase order(s) ("ETC Excess Inventory") and
otherwise retrofit the ETC Excess Inventory for sale as RCA, GE or RCA Scenium
brand product
(b) In the event that ETC pays the ETC Retrofit Costs
to Licensee, in advance and within five (5) business days after receipt of
Licensee's invoice, Licensee agrees to retrofit the units of ETC Excess
Inventory, as necessary, and use reasonable commercial efforts to resell the ETC
Excess Inventory, at prices determined by Licensee, to any person or entity
authorized by Licensee as an RCA, GE or RCA Scenium retailer. In the event that
Licensee is unable, through the exercise of reasonable commercial efforts, to
resell any such ETC Excess Inventory, Licensee shall be entitled to exercise any
other remedies available to Licensee under this Agreement, at law, in equity or
otherwise for breach of ETC's obligations regarding the relevant purchase order.
(c) In the event that (i) ETC does not opt to pay the
Retrofit Costs or (ii) ETC opts to pay the Retrofit Costs but does not actually
pay the ETC Retrofit Costs to Licensee, in advance and within five (5) business
days after receipt of such invoice, then in addition to all other remedies
available to Licensee under this Agreement, at law, in equity, under contract or
otherwise Licensee and/or any of its Affiliates shall have the right, but not
the obligation, to sell ETC Excess Inventory without removing the ETC Marks. ETC
hereby grants to Licensee and its Affiliates a license to the ETC Marks as
necessary for the marketing and sale of such ETC Excess Inventory under this
Section 2.7.13(c).
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*** Certain confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
(d) This Section 2.7.13 shall not be construed as
creating an obligation upon Licensee to mitigate its damages by removing ETC
Marks or otherwise retrofitting ETC Excess Inventory for sale as RCA, GE or RCA
Scenium brand products, and its is hereby expressly agreed by the parties that
Licensee has no such obligation, it being recognized by the parties that
Licensee and its Affiliates would incur additional risk and cost in exercising
such remedy including but not limited to lost opportunity costs.
2.8 Responsibilities. Licensee shall be solely responsible for the
manufacture of the Licensee Receivers and ETC Receivers. Notwithstanding the
foregoing, ETC shall provide Licensee with a reasonable amount of technical
assistance from ETC relating to the development, manufacture and testing of the
Licensee Receivers and ETC Receivers, particularly as relates to the Licensed
Technology.
2.9 Expenses/Intellectual Property Ownership.
2.9.1 Manufacturing and Sales Costs. All costs and expenses
incurred by a party in connection with the manufacture and sale of the OEM
Receivers, Licensee Receivers and the ETC Receivers shall be the sole
responsibility of such party.
2.9.2 EchoStar Technology. EchoStar shall own all technology
solely developed by EchoStar. Furthermore, EchoStar shall own all derivative
works, enhancements, improvements and modifications to the Licensed Technology
that is proprietary to ETC and is provided to Licensee pursuant to this
agreement (collectively "Advancements to EchoStar Technology"). Advancements to
EchoStar Technology are intended to encompass all developments which either
would not or could not have been made absent access to the Licensed Technology
that is proprietary to ETC and is provided to Licensee pursuant to this
agreement. Such Advancements to EchoStar Technology are not intended to cover
features which are completely independent and separable from the Licensed
Technology that is proprietary to ETC and is provided to Licensee pursuant to
this agreement.
2.9.3 Licensee Technology. Licensee shall own all technology
solely developed by Licensee. Furthermore, Licensee shall own all derivative
works, enhancements, improvements and modifications to the technology that is
proprietary to Licensee and is provided to ETC pursuant to this agreement
(collectively "Advancements to Licensee Technology"). Advancements to Licensee
Technology are intended to encompass all developments which either would not or
could not have been made absent access to the technology that is proprietary to
Licensee and is provided to ETC pursuant to this agreement. Such advancements to
Licensee Technology are not intended to cover features which are completely
independent and separable from the
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*** Certain confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
technology that is proprietary to Licensee and is provided to ETC pursuant to
this agreement.
2.9.4 Joint Intellectual Property. The parties shall jointly
own any intellectual property jointly developed by both parties. Absent a
written agreement to the contrary, each party shall be deemed to own an equal
and undivided interest in and to such jointly developed intellectual property
and shall be entitled to license, sublicense, make any use of or derive any
benefits, royalties, or compensation from the licensing, use or other
exploitation of such jointly developed intellectual property without the written
consent of, or accounting to, the other party. Absent a written agreement to the
contrary, neither party shall be required to file or prosecute any patent
applications or maintain any issued patents to protect such jointly developed
intellectual property. However, if one party decides to file a patent
application, the other party shall be required to provide all reasonable
assistance and cooperation to ensure the successful progress and issuance of
such patent application. Absent a written agreement, such reasonable assistance
and cooperation shall not include the payment of any costs or attorney fees
associated with the prosecution, issuance or maintenance of any patents based
upon such patent application. Nevertheless, the fact that one party has not paid
any cost or attorney fees associated with any costs or attorney fees associated
with the prosecution, issuance or maintenance of any patents based upon such
patent application, shall not reduce, eliminate or in any way alter the status
of the non-paying party's equal and undivided interest in and to such patent
application and any patent which issues therefrom.
2.9.5 Contested Technology. The parties recognize that they
are each engaged in, among other things, the development of satellite television
receivers. Accordingly, each party may employ features for which the other party
has filed a patent application or received an issued patent. The fact that one
party has received such patent protection does not mean that it is in fact
entitled to own such patent protection and the parties recognize that the U.S.
laws regarding inventorship shall govern any such disputes.
2.9.6 NREs. Notwithstanding the foregoing, Licensee shall be
solely responsible for any and all costs and expenses incurred in connection
with any non-recurring expenses (NREs) associated with equipping Licensee's
factory with the necessary tooling and test equipment for the manufacture of
Licensee Receivers and ETC Receivers, with the exception of: (i) the costs of
tooling that is solely required for the ETC Receivers, which cost shall be
covered by ETC, and (ii) the cost of test equipment that is solely required for
the ETC receivers, which cost shall be treated in the most favorable manner to
Licensee that the same cost is treated to *** or any Other Manufacturer.
-19-
*** Certain confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
2.10 Volume Commitment. Licensee agrees to sell a total of at least ***
Licensee Receivers, OEM Receivers and Promotional Certificates (or Activations
that qualify for an Incentive under Section 5.1.1(d) or Section 5.1.1(e))
directly to Licensee Retailers during the *** period commencing on the date
first set forth above, and agrees to sell a total of at least *** additional
Licensee Receivers during each subsequent *** period, pro-rated for the final
period if less than ***.
2.11 Subsidy. For each Licensee Receiver that is sold by Licensee
directly to a Licensee Retailer at an invoice price (exclusive of rebates, co-op
payments, and other incentives or other payments or credits of any nature
whatsoever that have the net effect of reducing the price of such Licensee
Receivers to the Licensee Retailer) below the price (F.O.B. point of shipment in
the continental United States of America) charged to ETC by *** or any other
regular third party manufacturer regularly utilized by ETC, for commercial
quantities of Receivers performing substantially similar functions as the
relevant Licensee Receiver (an "Other Manufacturer"), ESC will pay Licensee a
subsidy (the "Subsidy") equal to the *** as established prior to the beginning
of each calendar quarter. In the event that ESC elects in its sole judgment to
offer non-standard retailer economics to a particular Licensee Retailer, then
the *** used in Subsection (b) above with respect to a particular model Licensee
Receiver shall be the *** charged to retailers in the Territory receiving
substantially same non-standard retailer economics as the applicable Licensee
Retailer by Echosphere for Receivers performing substantially similar functions
the relevant Licensee Receiver, as established prior to the beginning of each
calendar quarter. Licensee shall only be eligible to receive *** Subsidy under
this Section 2.11 with respect to any Licensee Receiver, regardless of the
number of times such Licensee Receiver is Activated for different Subscriber
Accounts. The Subsidy shall be paid, *** to Licensee *** after sale of the
applicable Licensee Receiver to the Licensee Retailer. In the event that ETC
elects, in its sole judgment, to subsidize the cost to *** or any Other
Manufacturer, as the case may be, of a component incorporated into, or an
intellectual property royalty payable in connection with, a Receiver used to set
the invoice price described in Subsection (a) above and ETC elects, in its sole
judgment, not to make the same subsidy available to Licensee, then Licensee
shall be entitled ***.
2.12 Serial Numbers and Smart Card Numbers. For the purpose of
facilitating the Activation of Licensee Receivers and ETC Receivers by ESC,
Licensee will provide ESC with a list on electronic media (and/or paper media
upon ETC's request) in the format requested by ESC, which includes (a) the CAID
number and serial number of each Licensee Receiver and ETC Receiver, (b) the
corresponding Smart Card number for each Licensee Receiver and ETC Receiver, and
(c) such further information as ETC may reasonably request, in each case prior
to: (i) delivery of the Licensee Receiver to a Licensee Retailer, or (ii)
delivery of the ETC Receiver to ETC, its Affiliates or its designee.
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*** Certain confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
2.13 Written Materials. Licensee agrees that it will include within the
consumer packaging for each Licensee Receiver and ETC Receiver, at Licensee's
sole cost and expense (except that ETC shall be responsible for providing such
items to Licensee or reimbursing Licensee for the direct costs of printing such
items), copies of such written materials as ETC then currently includes within
the consumer packaging for substantially similar Receivers packaged by or on
behalf of ETC and its Affiliates; provided that solely with respect to Licensee
Receivers, such written materials shall not include third party offers and
promotional materials regarding products and services that are competitive with
Licensee's core businesses without Licensee's prior written consent. Licensee
agrees to include such written materials in the same manner as the then-current
method used to include such written materials with each substantially similar
Receiver packaged by or on behalf of ETC and its Affiliates, as such method may
change from time to time in ETC's sole judgment. The Licensee may include within
the consumer packaging for each Licensee Receiver, at Licensee's sole expense
inclusive of direct material costs, promotional material relevant to Licensee's
business which is not competitive with the core businesses of ETC, ESC and their
Affiliates, subject to ETC's approval not to be unreasonably withheld or
delayed.
2.14 Call Center Costs/Software and Other Changes.
2.14.1 In the event that the proportion of problem calls
received by or on behalf of ESC with respect to particular model Licensee
Receiver or ETC Receiver, as the case may be, is noticeably greater than the
proportion of problem calls received by or on behalf of ESC with respect to the
Receiver model manufactured by or on behalf of ETC performing substantially
similar functions as the relevant model Licensee Receiver or ETC Receiver, as
the case may be, then Licensee agrees to promptly review the problem with ETC
and to jointly establish a corrective course of action to correct the root cause
of the problem, ***.
2.14.2 In the event Licensee is notified in a timely manner of
the need to effect software or other changes to ETC Receivers or Licensee
Receivers as a result of system or similar changes initiated by ETC or ESC, but
Licensee does not effect such changes within substantially the same time period
as ETC implements changes to its Receivers generally for the applicable
change(s), and if as a result of such failure to implement the change(s) the
proportion of problem calls received by or on behalf of ESC with respect to
particular models of Licensee Receivers or ETC Receivers is noticeably greater
than the proportion of problem calls received by or on behalf of ESC with
respect to the Receiver models manufactured by or on behalf of ETC performing
substantially similar functions, ***
2.15 Warranty.
2.15.1 Licensee Receivers Purchased by End-Users.
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
(a) Licensee shall extend ETC's then current standard
consumer warranty to the end users of Licensee Receivers. In addition, Licensee
will provide ***.
(b) In the event that Licensee Receivers purchased by
end-users are returned to ETC or any of its affiliates for service or repair,
ETC shall be entitled to ***. In the event that Licensee refuses to service,
repair or replace such Licensee Receivers, such refusal shall constitute a
breach of this Agreement, and in addition to any other remedies available to ETC
(including without limitation termination of this Agreement pursuant to Section
6.2(ii)), ETC shall be entitled to ***. In the event that the defined path for
servicing such Licensee Receivers is through direct return to the Licensee, and
not ETC, then ETC agrees to attempt to minimize the errant return of Licensee
Receivers to ETC through using its reasonable commercial efforts to confirm the
brand and model of receiver prior to issuing a return authorization, educate
customer service personnel regarding appropriate procedures and implement other
commercially reasonable methods as may be established by EchoStar.
2.15.2 ETC Receivers and Licensee Receivers Leased by
End-Users.
(a) Licensee warrants to ETC that each ETC Receiver
will be free from defects in materials and workmanship (labor and parts) for a
period of *** from the date of shipment by Licensee or a *** to ETC, its
Affiliates or its designee. This warranty shall not apply to: (i) any ETC
Receiver that is abused, damaged by external causes, altered or misused; or (ii)
any ETC Receiver that is damaged due to improper installation or use.
(b) With respect to Licensee Receivers that are
leased by end-users from ETC or its Affiliates, Licensee shall warrant to ETC
and any lessee thereof that each Licensee Receiver will be free from defects in
materials and workmanship (labor and parts) for a period of *** from the date of
Activation by the original end user of the relevant Licensee Receivers, which
date of Activation shall be provided to Licensee by ETC upon request. This
warranty shall not apply to: (i) any Licensee Receiver that is abused, damaged
by external causes, altered or misused; or (ii) any Licensee Receiver that is
damaged due to improper installation or use. In addition, Licensee will provide
***.
(c) Licensee Receivers leased from ETC by end-users
and ETC Receivers shall be considered free from defects in workmanship if they
are manufactured in accordance with ETC's manufacturing workmanship standards
(or those of any third party which manufactures Receivers on ETC's behalf),
conform to the product specifications, and successfully complete product
acceptance tests for the product.
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*** Certain confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
(d) Deadline for Claims; Disclaimer. ALL CLAIMS FOR
WARRANTY FULFILLMENT UNDER SECTIONS 2.15.2 (a) AND 2.15.2 (b) MUST BE RECEIVED
BY LICENSEE (OR ITS DESIGNEE) NO LATER THAN *** AFTER THE EXPIRATION OF THE
APPLICABLE WARRANTY PERIOD FOR THE PRODUCT. THIS WARRANTY IS THE ONLY WARRANTY
GIVEN TO ETC BY LICENSEE FOR LICENSEE RECEIVERS LEASED FROM ETC AND ETC
RECEIVERS. LICENSEE MAKES, AND ETC RECEIVES, NO OTHER WARRANTY EITHER EXPRESS OR
IMPLIED. ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE, ARE EXPRESSLY DISCLAIMED AND EXCLUDED HEREFROM.
(e) In the event that Licensee fails to repair or
replace (with new or remanufactured product at the Licensee's sole discretion)
defective in-warranty ETC Receivers or Licensee Receivers that are leased by
end-users from ETC or its Affiliates within *** after ETC delivers such
receivers to Licensee, the Licensee and ETC shall work in good faith to cure the
delinquent service time, ***. In the event Licensee has not cured the delinquent
service time problem within ***, then such failure shall constitute a breach of
this Agreement, entitling ETC to terminate this Agreement pursuant to Section
6.2.1(ii) in addition to any other remedies available to ETC. ETC shall be
responsible for the cost of shipping such receivers to be serviced to Licensee's
service facilities, and Licensee shall be responsible for the costs of shipping
repaired or replacement units to ETC.
(f) In the event that receivers returned to Licensee
pursuant to Section 2.15.2(d) above are determined by Licensee to be
non-defective, then ETC shall be responsible for shipping charges to return the
units to ETC and Licensee may, at its option, charge ETC a diagnostic and
handling charge of *** per non-defective unit.
2.16 Quality Control.
2.16.1 Incorporation of Specifications. Licensee undertakes
and agrees to incorporate the ETC Receiver Specifications in the manufacture of
the Licensee Receivers and agrees to comply with any and all industry and
governmental standards and regulations, including, without limitation, product
safety standards, which may apply to the manufacture, sale and use of the
Licensee Receivers in the Territory. ETC and Licensee shall regularly conduct
Design Reviews to reach mutual agreement regarding Licensee's plans for
implementation of Licensee Receivers and ETC Receivers. Licensee agrees that in
the manufacture of the Licensee Receivers pursuant to this Agreement,
manufacturing operations shall at all times be conducted to ensure that the
Licensee Receivers manufactured by Licensee or *** shall be in strict
conformance with the ETC Receiver Specifications (absent prior written agreement
by ETC to deviations from the ETC Receiver Specifications, which shall not be
unreasonably withheld or delayed). Changes to the ETC Receiver Specifications
shall
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*** Certain confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
be made in accordance with ETC's standard Engineering Change Request ("ECR")
procedure, as such ECR procedure may change from time to time in ETC's sole
judgment upon written notice to Licensee. Licensee shall incorporate all changes
to the ETC Receiver Specifications into Licensee Receivers not yet manufactured
within a commercially reasonable amount of time taking into account the design
effort required, the need to order new materials and any requirements for
obtaining agency and other governmental approvals, and ETC shall be entitled to
incorporate any such changes into Licensee Receivers through flash download of
revised software to Licensee Receivers in the field. ETC will provide Licensee
with the same advance notice (if any) of each flash download of software as ETC
provides to its customer service centers and its Affiliates' customer service
centers with respect to the applicable flash downloads of software. ETC shall be
solely responsible for any loss or damage suffered by a third party as a result
of any flash downloads of software to Licensee Receivers, unless the loss or
damage was contributed to by Licensee's failure to manufacture the applicable
Licensee Receiver(s) in strict conformance with the ETC Receiver Specification.
2.16.2 Marking Licensee Receivers and ETC Receivers. Licensee
agrees to individually xxxx each unit of Licensee Receiver manufactured by
Licensee pursuant to this Agreement with a unique serial number (in strict
conformance with ETC's then current serial number format and specification, as
such format and specification may change at any time and from time to time in
ETC's sole judgment upon reasonable prior written notice to Licensee provided
that such change does not require Licensee to incur unreasonable expense) and a
clear and distinct designation of the country of manufacture and/or assembly
origin in accordance with applicable laws.
2.16.3 Compliance with Import Laws. Licensee will, at
Licensee's sole cost and expense, comply with all laws, rules and regulations
relating to the importation by Licensee of machinery, equipment, parts,
components and materials required or used in the manufacture, assembly and
testing of the Licensee Receivers, without any responsibility or liability on
the part of ETC with respect to such import licenses or imports. Upon request,
ETC shall provide Licensee with copies of all governmental determinations,
authorizations, rulings, or other similar communications obtained or received by
ETC regarding the importation of ETC Technology and media containing ETC
Technology.
2.16.4 Location(s); Inspection of Location(s) and Licensee
Receivers
(a) Location. The Licensee Receivers shall be
manufactured, assembled and tested at the Location(s) operated by Licensee or by
*** (the "Locations").
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
(b) Location Inspection. Licensee will permit ETC to
enter Location(s) upon reasonable prior notice during normal business hours to
inspect the facilities, equipment and materials used in manufacturing,
assembling and testing the Licensee Receivers, to check operations and methods,
and to take with them reasonable samples of the Licensee Receivers subject to
the limitations set forth in Section 2.16.4(c)
(c) Approval of Licensee Receivers. Licensee shall,
at Licensee's cost, provide ETC up to *** (as determined by ETC in its sole
judgment) production intent (pre-pilot) samples of each model Licensee Receiver
and ETC Receiver prior to their full-scale manufacture by Licensee. ETC will
notify Licensee in writing of the conformity or otherwise of each model Licensee
Receiver and ETC Receiver to the ETC Receiver Specifications within fifteen (15)
days of receipt by ETC of the relevant model Licensee Receiver or ETC Receiver,
as the case may be. Licensee also shall, at Licensee's cost, provide ETC up to
*** (as determined by ETC in its sole judgment) production samples of each model
Licensee Receiver and ETC Receiver prior to its full-scale manufacture by
Licensee. ETC will notify Licensee in writing of the conformity (through a
letter of conformity) or otherwise of each model Licensee Receiver and ETC
Receiver to the ETC Receiver Specifications within thirty (30) days of receipt
by ETC of the relevant model Licensee Receiver or ETC Receiver, as the case may
be. The written test procedures and test plan that is used to determine
conformity of the Licensee Receivers and ETC Receivers to the ETC Receiver
Specifications ("Test Procedures and Plan"), shall be furnished to Licensee by
ETC. If ETC reasonably determines that any of Licensee's samples fail to meet
the quality, performance and compatibility standards in the Test Procedures and
Plan, then Licensee shall promptly correct the deficiency before continuing the
manufacture of the Licensee Receivers or ETC Receivers, as the case may be. The
examination by ETC of the conformity of the Licensee Receivers and ETC Receivers
to the Test Procedures and Plan shall not be construed as constituting a
certification or warranty. Licensee shall not be authorized to refer to ETC's
examination in connection with the sale of the Licensee Receivers or ETC
Receivers as a certification or warranty by ETC, unless expressly agreed by ETC.
ETC shall have no liability whatsoever arising from its examination of the
Licensee Receivers or ETC Receivers.
2.16.5 Quality Control Procedures. Licensee and its *** shall
maintain a quality control program which ensures compliance with any and all
applicable governmental standards, regulations or certifications. All work
undertaken by Licensee shall be performed in accordance with Licensee
established quality control procedures and guidelines, which Licensee shall
provide to ETC for ETC's approval (which approval shall not be unreasonably
withheld or delayed), at ETC's request.
2.16.6 Factory Testing. Prior to shipment from Location(s),
each Licensee Receiver shall be factory tested by Licensee or its *** in
accordance with the
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
Test Procedures and Plan, and Licensee and its *** shall submit to ETC, upon
request of ETC, complete certified test results. Upon reasonable prior notice,
Licensee will permit ETC to have access to all such testing records for Licensee
and its *** at Licensee Location(s) during normal business hours.
2.16.7 Purchase of Components. Except as expressly set forth
to the contrary in Section 2.9.5 above, Licensee acknowledges and agrees that it
is solely responsible for the purchase of all parts, components and materials
necessary for the manufacture of the Licensee Receivers, including, without
limitation, any tooling and test equipment, and any and all other costs
associated with the manufacture, assembly, testing, labeling and packaging of
the Licensee Receivers.
2.17 Use of Licensed Technology.
2.17.1 No Reverse Engineering. Licensee may not use Licensed
Technology that is proprietary to ETC and is provided to Licensee pursuant to
this agreement for reverse engineering. To this end, Licensee shall not provide
any access to the Licensed Technology that is proprietary to ETC and is provided
to Licensee pursuant to this agreement to anyone who is involved in determining
whether Licensee's intellectual property is being used.
2.17.2 Locations. Licensee shall not, without the prior
written consent of ETC, which consent shall not be unreasonably withheld or
delayed, use the Licensed Technology or any derivative thereof at any location
other than the Location(s).
2.17.3 Licensee Developments.
(a) Only to the extent expressly permitted in
Sections 2.2, 2.4 and 2.16.1 above, ETC acknowledges that Licensee may develop
and incorporate into Licensee Receivers made under this Agreement features that
are proprietary to Licensee ("Licensee Technology").
(b) In the event that ETC permits Licensee, pursuant
to Section 2.2, 2.4 or 2.16.1, to make feature or other changes to Licensee
Receivers that are not included in the ETC Receiver Specifications, then
Licensee agrees to reimburse ESC for all reasonable costs and expenses incurred
by ESC and its affiliates to support such feature and other changes, including
without limitation technical support and other call center costs, subject to
applicable documentation and audit by Licensee, unless otherwise agreed in
writing by the parties.
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
2.17.4 Third Party Intellectual Property. Except as expressly
set forth to the contrary herein and with respect to ETC Technology which ETC
and/or its Affiliates have the right to sublicense to Licensee without imposing
terms and conditions in addition to those set forth herein, neither party shall
have any rights to any intellectual property developed by a third party for or
in conjunction with the other party. Each party understands and acknowledges
that it may be restricted from being permitted to use any intellectual property
developed by a third party for or in conjunction with the other party,
including, but not limited to, intellectual property with regard to Receivers.
To the extent that (i) the ETC Receiver Specifications or (ii) Accessories or
*** purchased by Licensee pursuant to Section 2.19 below contain third party
intellectual property that neither ETC nor any of its Affiliates have the right
to sublicense to Licensee without imposing terms and conditions in addition to
those set forth herein, ETC will use reasonable commercial efforts to assist
Licensee in obtaining a license or agreement to license that will enable
Licensee to perform the activities contemplated in this Agreement, such as
assisting Licensee in obtaining a license for the OpenTV platform.
2.17.5 U.S. Export Law Compliance Requirements.
(a) Licensee understands and acknowledges that ETC's
obligations to Licensee under this Agreement, including, without limitation, any
and all obligations of ETC to provide the Licensed Technology (including the ETC
Receiver Specifications), any technical assistance, any media in which any of
the foregoing is contained and related technical data (collectively referred to
as the "Data") are subject to compliance with all applicable laws and
regulations of the United States of America, and with the terms of any
applicable U.S. export licenses issued in connection with the furnishing of the
Data to Licensee under this Agreement, and in the event that the obligations of
ETC or Licensee should conflict with any law, regulation or export license, ETC
or Licensee, as the case may be, shall be excused from performance of such
obligations to the extent required for compliance therewith.
(b) Licensee represents, warrants and covenants that
it will comply with all terms of any U.S. export licenses or regulations
affecting Licensee's use or disposition of technical data or the product
thereof, or any know-how, technical information, manufacturing or test
equipment, components or software supplied by ETC under this Agreement. In
furtherance and not in limitation of the foregoing, Licensee represents,
warrants and covenants that it will not export or reexport: (1) the Licensed
Technology; (2) any Smart Cards purchased in conjunction with an OEM Receiver or
under Section 2.6.1 above; or (3) any Licensee Receiver, ETC Receiver or OEM
Receiver or other product designed, developed or manufactured utilizing the
Licensed Technology, to any destination country prohibited under United States
law without the prior approval of the United States Government; and that it will
not use: (i) the Licensed Technology; (ii) any Smart Cards purchased in
conjunction with an OEM Receiver or under Section 2.6.1 above; or (iii) or any
Licensee Receiver, ETC Receiver or OEM
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
Receiver or other product designed, developed or manufactured utilizing the
Licensed Technology, to support directly or indirectly the design, development,
production or use of nuclear, chemical or biological weapons or ballistic
missiles.
(c) Licensee acknowledges and understands that U.S.
export laws relating to the Licensee Receivers, OEM Receivers, Smart Cards and
Licensed Technology may change from time to time in the future. Licensee further
acknowledges and agrees that it is Licensee's sole responsibility to be and
remain informed of all U.S. laws relating to the export of Licensee Receivers,
OEM Receivers, Smart Cards and Licensed Technology outside of the U.S. Licensee
further acknowledges and agrees that ETC has absolutely no obligation to update
Licensee regarding the status of U.S. export laws or any other U.S. laws
relating to the export of Licensee Receivers, OEM Receivers, Smart Cards or
Licensed Technology outside of the U.S. Without limitation of the foregoing,
upon request, ETC shall provide Licensee with copies of all export
authorizations, licenses, classifications or other relevant determinations
obtained or received by ETC in connection with Licensed Technology (including
the ETC Receiver Specification) and any media in which the foregoing is
contained. Without ETC giving any consent for export of the Licensee Receivers,
OEM Receivers, Smart Cards or Licensed Technology and subject to territorial
limitations of this Agreement, Licensee agrees that prior to exporting and/or
selling any Licensee Receivers, OEM Receivers, Smart Cards or Licensed
Technology outside of the U.S., it will investigate all applicable U.S. laws
relating to the export of Licensee Receivers, OEM Receivers, Smart Cards and
Licensed Technology outside of the U.S. The parties shall cooperate with each
other in making application for and securing any required export licenses,
approvals or other authorizations and shall prepare, execute and deliver all
documents that may be required in connection therewith. Licensee is strictly
prohibited from violating any U.S. law relating to the export of Licensee
Receivers, OEM Receivers, Smart Cards and Licensed Technology outside of the
U.S. Should Licensee export or sell any Licensee Receiver, OEM Receiver, Smart
Card or Licensed Technology outside of the U.S. in violation of this Agreement
and/or U.S. law, this Agreement shall automatically terminate.
(d) Licensee represents and warrants that it will
comply in all respects with the export and reexport restrictions set forth in
any applicable U.S. export licenses with respect to any item used in the
manufacture of the Licensee Receivers and ETC Receivers by Licensee and will
otherwise comply with any and all applicable U.S. export and reexport laws and
regulations or other United States laws and regulations in effect from time to
time.
2.18 Accessories and XXXx. Licensee may, at its option, bundle
Accessories and/or XXXx with Licensee Receivers. ETC shall grant all necessary
authorizations for Licensee to purchase Accessories and XXXx ***.
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
2.19 Optional Accessories. Licensee shall have the right to
manufacture, or have manufactured, market, distribute and sell Optional
Accessories for use with Receivers. Licensee shall not be obligated to include
***.
2.20 Service Contracts. The EchoStar Parties and Licensee agree that
Licensee may offer, directly and through Licensee Retailers, service contracts
on Licensee Receivers and OEM Receivers; provided that Licensee and the EchoStar
Parties mutually agree in writing upon a plan for the implementation thereof,
which, among other things, minimizes disruption to the customer service and
general business practices of the EchoStar Parties and does not negatively
effect the overall service level provided to the DISH Network customers. The
parties mutually agree to commence discussions regarding the possibility of
Licensee offering such service contracts within ninety (90) days after the date
first set forth above.
2.21 Anything herein to the contrary notwithstanding, nothing herein
shall preclude Licensee from asserting any of its patents against any product
that is not manufactured by Licensee.
3. OEM MANUFACTURING
3.1 General. At Licensee's option, exercisable upon delivery of written
notice to ETC, Licensee shall have the right to purchase from ETC, and ETC shall
agree to sell to Licensee, such Receiver models as are then-currently being
manufactured by or for ETC ("OEM Receivers"). For the avoidance of doubt, each
OEM Receiver purchased by Licensee hereunder shall include a corresponding Smart
Card. Licensee shall be only authorized to resell OEM Receivers: (i) directly to
Licensee Retailers for resale by such Licensee Retailers directly to end-users
in the Territory for use in connection with DISH Network; (ii) to Licensee's and
its Affiliates' employees, friends and family pursuant to the terms and
conditions of a program to be mutually agreed upon by Licensee and ESC; and
(iii) directly to end-users through XXX.xxx pursuant to the terms and conditions
of a program to be mutually agreed upon by Licensee and ESC.
3.2 Licensee Branding. Upon written request by Licensee, ETC shall
manufacture OEM Receivers with the Licensee brand (with a Licensee logo approved
in advance by Licensee) affixed to the bezel (front panel) of the OEM Receivers;
provided, however, that ETC shall have no obligation under this Section 3.2
unless at the time of such request Licensee issues and delivers to ETC a firm
purchase order for not less than *** of the particular OEM Receiver model
requested to be manufactured with such Licensee brand, unless such OEM Receiver
model has previously been manufactured by ETC hereunder with such Licensee
Brand. At the request of Licensee, new Licensee brands may be substituted upon
prior written approval of ETC (which approval shall not be unreasonably withheld
or delayed).
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
3.3 Costs. Licensee shall be responsible, and shall pay *** (which
shall be mutually agreed upon by Licensee and ETC in advance) for the
customization of an OEM Receiver model with any Licensee brand name hereunder,
including without limitation: (a) any tooling required; (b) silk-screening front
panels of the satellite receivers; and (c) all costs in connection with the
customization of any packaging for OEM Receivers.
3.4 ETC Marks.
3.4.1 In addition to the Licensee brand name affixed to the
OEM Receivers under this Agreement, ETC shall have the right to affix such ETC
Marks as ETC may designate from time to time in writing on the OEM Receivers
(including without limitation on the bezel (front panel) and electronic program
guide), any Accessories included therewith, on the packaging therefor and any
XXXx, in each case in accordance with: (i) ETC's trademark Usage Guidelines, the
current version of which is attached hereto as Exhibit A; and (ii) ETC's user
interface specification, as such guidelines and specification may change from
time to time in ETC's sole discretion upon written notice to Licensee. In
furtherance and without limitation of the foregoing, Licensee agrees that ETC
shall be entitled to: (a) affix such ETC Marks in the center of, and above the
Licensee brand name and Third Party Marks affixed to, all XXXx provided to
Licensee by ETC hereunder; and (b) affix such ETC Marks on the OEM Receivers
(including without limitation on the bezel (front panel) and electronic program
guide), any Accessories included therewith, on the packaging therefor and on any
XXXx, such that the ETC Marks are displayed in a manner which is at least
equally as prominent as the Licensee brand affixed to the same. Notwithstanding
the foregoing, ETC shall have no right to ***.
3.4.2 Licensee agrees not to use any of the ETC Marks in any
manner inconsistent with ETC's trademark Usage Guidelines, the current version
of which is attached hereto as Exhibit A, as such guidelines may change from
time to time in ETC's sole discretion upon written notice to Licensee and
without the prior written consent of ETC, which consent ETC may withhold in its
sole judgment. Licensee expressly acknowledges and understands that ETC and its
Affiliates claim to have the absolute ownership of the ETC Marks that are
proprietary to ETC. Regardless of whether ETC grants Licensee permission to use
any ETC Xxxx, Licensee agrees that it will not in any way dispute or impugn the
validity of any of the ETC Marks that are proprietary to ETC or for which ETC
has an exclusive license or registrations of the ETC Marks that are proprietary
to ETC or for which ETC has an exclusive license, nor the sole proprietary right
of ETC and its Affiliates to the ETC Marks that are proprietary to ETC, nor the
right of ETC and its Affiliates to use or license the use of the ETC Marks that
are proprietary to ETC or for which ETC has an exclusive license in the
Territory or elsewhere, either during the Term or at any time thereafter.
Licensee further agrees not to perform,
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
either during the Term or at any time thereafter, any act or deed either of
commission or of omission which is inconsistent with ETC or its Affiliates
proprietary rights in and to the ETC Marks that are proprietary to ETC, whether
or not the ETC Marks are registered.
3.5 Third Party Trademarks. Licensee may also request that ETC affix
Third Party Marks to the OEM Receivers. Licensee recognizes and understands that
ETC has no authority to grant Licensee any rights to affix the *** standard
trademarks to an OEM Receiver. Should Licensee desire to do so or to affix other
Third Party Marks that ETC does not have the right to sublicense to Licensee
without imposing terms and conditions in addition to those set forth herein,
Licensee must negotiate the entitlement of such rights with the applicable
rights holders. Licensee hereby acknowledges that, in the future, ETC may be
obligated to affix the trademarks, service marks or trade names of the owners of
third party technology that is presently, or at some time in the future,
incorporated into the OEM Receiver, and Licensee hereby grants its approval for
ETC to affix any such trademarks, service marks or trade names to the OEM
Receiver. None of the third party trademarks referenced above shall be more than
half as large as the Licensee brand and ETC Marks affixed to the applicable OEM
Receiver, unless the parties mutually otherwise agree in writing.
3.6 Identical Receivers. All OEM Receivers delivered hereunder to
Licensee shall be identical in functionality and technical specifications to
Receivers manufactured by or for ETC, and shall be identical in appearance to
such Receivers except for the placement of Licensee brand names on OEM Receivers
pursuant to Section 3.2 above or as otherwise mutually agreed by the parties in
writing.
3.7 Price.
3.7.1 OEM Receivers. Licensee shall pay ETC for OEM Receivers
an amount equal to the ***. For purposes of this Agreement, *** may change from
time to time in their respective sole judgments. In the event that ESC elects in
its sole judgment to offer non-standard retailer economics to a particular
Licensee Retailer, then for each OEM Receiver that is sold by Licensee directly
to such Licensee Retailer, ETC shall *** for the applicable OEM Receiver and the
*** (as determined at the time ETC accepts the applicable purchase order from
Licensee) at which Echosphere, ETC, ESC or any other Affiliate of ETC or ESC,
sells a Receiver performing substantially similar functions as the relevant OEM
Receiver to retailers in the Territory receiving substantially the same
non-standard retailer economics as the applicable Licensee Retailer, which price
Echosphere, ETC, ESC and such Affiliates may change from time to time in their
respective sole judgments (a "Rebate"). Licensee shall only be eligible to
receive one Rebate under this Section 3.7.1 with respect to any OEM Receiver,
regardless of the number of times such OEM Receiver is Activated for different
Subscriber Accounts. The Rebate shall be paid, *** to Licensee *** after sale of
the applicable OEM Receiver to the Licensee Retailer.
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
3.7.2 Promotional Certificates. Licensee shall pay ETC for
Promotional Certificates an amount equal to the Current Wholesale Certificate
Price. For purposes of this Agreement, "Current Wholesale Certificate Price"
means, *** which prices Echosphere, ETC, ESC and such Affiliates may change from
time to time in their respective sole judgments.
3.7.3 *** Notwithstanding Section 3.7.1 above, *** shall not
apply to any OEM Products that have been ordered under a firm and binding
purchase order by Licensee on or before the effective date of such price
increase, provided the original shipment date specified by Licensee is not more
than *** after the date of ETC's acceptance of such order.
3.7.4 Price Reductions.Notwithstanding Section 3.7.1 above:
(a) Price reductions shall be effective *** unless
ETC specifies otherwise. In the event of a price reduction on an OEM Product,
Licensee is entitled to request in writing a credit ("Price Reduction Credit")
in an amount based on *** in accordance with the terms of this section. The
amount of credit shall *** less any applicable discounts, rebates, ***
multiplied by *** or *** as of the effective date of the price reduction.
(b) The OEM Products shall be compared for
"sameness", counted and priced as systems or individual components in accordance
with how they were originally purchased by Licensee from ETC (OEM Products
originally purchased as systems shall not be eligible for a Price Reduction
Credit if the price reduction applies to an individual component, and OEM
Products originally purchased as individual components shall not be eligible for
a Price Reduction Credit if the price reduction applies to a system). Within
five (5) business days after the effective date of such price change, Licensee
shall furnish ETC *** with serial numbers, of the relevant OEM Products and
corresponding Smart Cards for each OEM Product, as of such date, including
information as to the mode of original purchase from ETC (as systems or
individual components), the amount of time such OEM Products *** and any other
information ETC may reasonably request. Any Price Reduction Credit shall be
applied by ETC to the purchase price of Licensee's subsequent orders of OEM
Products from ETC in the form of a credit memo issued to Licensee by ETC. If at
the time of the price reduction, Licensee has ordered but not yet paid for OEM
Products, Licensee shall only be required to pay for such OEM Products at the
reduced price. Therefore, no Price Reduction Credit shall accrue to those
orders.
(c) ETC shall have the right to audit upon reasonable
notice the inventory of Licensee or any Licensee Retailer to verify the accuracy
of any request by Licensee for a Price Reduction Credit. Licensee shall also
provide, at ETC's request,
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
the supporting information described in the preceding paragraph in electronic
format to facilitate the verification by ETC that an OEM Product subject to a
request for a Price Reduction Credit has not been Activated.
3.8 Payment. All invoices to Licensee hereunder shall be due, in
immediately available funds, within *** from the date of invoice, which shall be
issued no earlier than the ship date for the OEM Receivers covered by the
invoice.
3.9 Shipping Costs. All OEM Receivers shall be shipped F.O.B. point of
shipment (a) Huntsville, Alabama USA, (b) Denver, Colorado USA, or (c) Atlanta,
Georgia USA, at ETC's option exercisable from time to time in its sole judgment.
Title and risk of loss of OEM Receivers purchased under this Agreement shall
pass to Licensee upon delivery by ETC or its agent to the carrier for shipment
thereof. Licensee shall be responsible for all costs of shipping and insurance
of OEM Receivers. Licensee shall have the sole responsibility to file any claims
with the carrier for damage, missing items or otherwise, and ETC shall have no
liability or responsibility if Licensee is unable to obtain full compensation
for any loss from the claim. Licensee shall select the method of shipment and
carrier; provided, however, that, in the event that Licensee fails to make the
necessary arrangements for shipment within 3 days of the requested ship date,
Licensee acknowledges and agrees that ETC shall, without incurring any
liability, have the option, in its sole judgment, to select the method of
shipment and the carrier on Licensee's behalf and at Licensee's expense.
3.10 Default. If Licensee defaults in any payment due ETC, or Licensee
violates any material term or condition of this Agreement or of any credit
extended by ETC or any Affiliate to Licensee, ETC reserves the right to: (i)
suspend any shipment to Licensee; (ii) require payment for shipments prior to
shipment or delivery; and/or (iii) require payment of all unpaid balances prior
to any shipment and payment for that shipment. Exercise of any of the above
rights by ETC shall not be construed as a limitation of ETC's authority to
exercise any other rights which ETC may have at law, in equity or pursuant to
this Agreement.
3.11 Schedule. Licensee and ETC will each use reasonable commercial
efforts, subject to the other party's support and the criteria described in
Sections 3.2 and 3.3 above, to commence shipping the OEM Receivers as soon as
reasonably practicable after Licensee exercises its option to purchase OEM
Receivers hereunder and provides ETC with its first binding purchase order.
3.12 Orders, Shipment, Forecasts, and Returns.
3.12.1 Commencing with the first full calendar month in the
Term and during each calendar month in the Term thereafter, Licensee shall
provide ETC with a forecast specifying quantities of each available OEM Receiver
model that
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
Licensee expects to purchase in each of the six calendar months following the
calendar month in which the forecast was provided to Licensee (the "OEM Forecast
Month"). With respect to the *** months of the initial forecast and the ***
month of each forecast submitted thereafter, the specified quantities for each
forecasted model of OEM Receiver may be increased or decreased by Licensee by
*** upon issuance of the next forecast. With respect to the *** month of each
forecast, the specified quantities for each forecasted model of OEM Receiver may
be increased or decreased by Licensee by *** upon issuance of the next forecast.
With respect to the *** month of each forecast, the specified quantities for
each forecasted model of OEM Receiver may be increased or decreased by Licensee
by *** upon issuance of the next forecast. With respect to the *** month of each
forecast, the specified quantities for each forecasted model of OEM Receiver may
be increased or decreased by Licensee by *** upon issuance of the next forecast.
Subject to the above, a new monthly forecast will always supercede completely
any previous forecasts. ETC shall order or inventory component parts sufficient
to meet the requirements specified in the *** months of each forecast. For
components whose purchase lead times exceed *** months, ETC will calculate
component quantity requirements corresponding to those components' lead times,
and approach Licensee for authorization to purchase those parts. Licensee may
then authorize purchase of some or all of the components beyond the *** month
time horizon, and will become liable for the cost of these components should
Licensee's future purchase orders not consume those authorized quantities. ETC
shall approach Licensee for re-authorization monthly for all such long lead time
components.
3.12.2 Licensee will use reasonable commercial efforts to
translate the *** months of the initial forecast and the ***month of each
forecast submitted thereafter into a purchase order, including requested
delivery dates, on or before the *** day of the applicable OEM Forecast Month.
Purchase orders of Licensee shall state only: (i) identity of goods; (ii)
quantity of goods; (iii) purchase price of goods; and (iv) requested ship date
of goods. In the event of any conflict or inconsistency between the terms of a
purchase order and the terms of this Agreement, the terms of this Agreement
shall prevail. ETC will make commercially reasonable efforts to fulfill all
valid purchase orders issued by Licensee. Any failure to confirm such a purchase
order shall not be deemed acceptance by ETC. ETC will inform Licensee of the
acceptance or rejection of a purchase order, in whole or in part, within a
reasonable time after receipt of the relevant purchase order. Should ETC reject
the applicable purchase order or should ETC's acceptance include different
delivery dates or product mix than in the Licensee purchase order, Licensee
shall be permitted to modify the purchase order in whole or in part and the
process shall be repeated until full agreement is reached. The quantities
specified for each model OEM Receiver in a purchase order issued by Licensee
under this Section 13.12.2 may be increased or decreased by Licensee by up to
25% without penalty.
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
3.12.3 Shipment. Shipments will be made in standard shipping
packages that have been approved by Licensee. All shipments will include a
packing slip which lists items contained in the shipment by part number,
descriptions (including the serial number and corresponding Smart Card number
and CA ID number for each OEM Receiver), quantity, and purchase order number. In
addition, ETC shall provide Licensee with an electronic file (in a format to be
mutually agreed by the parties), which lists the OEM Receivers contained in each
shipment by serial number and corresponding Smart Card number. Not later than
*** before the scheduled delivery dates, Licensee will notify ETC in writing of
the specific shipping destinations and the specific quantity of OEM Receivers to
be shipped to each destination, which Licensee agrees will be at least one full
truckload per destination or such other minimum quantity as the parties may
agree to from time to time in writing.
3.12.4 Shipment Dates; Quantities. ETC will use reasonable
commercial efforts to make shipments of OEM Receivers by the dates specified in
purchase orders accepted from Licensee; provided however, that ETC shall be
permitted to modify shipping dates due to circumstances beyond ETC's reasonable
control. All deliveries are contingent on ETC or its third party manufacturer
receiving timely shipment of necessary materials for production. Within five (5)
days after ETC becomes aware that it will not be able to make shipment of all or
a portion of the OEM Receivers by the date specified in a particular purchase
order accepted from Licensee, ETC shall give Licensee notice setting forth an
estimated delivery date. Licensee shall have the right but not the obligation to
reduce the total quantity of OEM Receivers requested in that purchase order by
an amount not to exceed the quantity of OEM Receivers for which ETC extends the
shipping date by more than thirty (30) days or fails to ship within thirty (30)
days of the shipping date specified in that purchase order, by means of a
written notice to ETC within five (5) days following written notice by ETC to
Licensee of such modification or failure to ship.
3.12.5 Partial Shipments. ETC reserves the right to ship OEM
Receivers in a single or by multiple deliveries. Except as expressly provided
herein, failure of ETC to ship on or about the date requested in any purchase
order shall not entitle Licensee to cancel or amend such order. ETC reserves the
right to ship all or a portion of any purchase order, including partial purchase
orders. Licensee shall pay for such portion of the shipment as is actually
shipped.
3.12.6 Sale of OEM Receivers by ETC.
(a) While, subject to Sections 3.12.2 and 3.12.4,
Licensee's obligation to honor purchase orders submitted to ETC is absolute, in
the event that Licensee breaches this obligation, then Licensee shall have the
option to pay to ETC, in advance, all costs ("OEM Retrofit Costs") anticipated
by ETC as reasonable and necessary to remove all Licensee marks from the OEM
Receivers covered by the
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
relevant purchase order(s) ("OEM Excess Inventory") and otherwise retrofit the
OEM Excess Inventory for sale as EchoStar or DISH brand product
(b) In the event that Licensee pays the OEM Retrofit
Costs to ETC, in advance and within five (5) business days after receipt of
ETC's invoice, ETC agrees to retrofit the units of OEM Excess Inventory, as
necessary, and use reasonable commercial efforts to resell the OEM Excess
Inventory, at prices determined by ETC, to any person or entity authorized by
ESC as a DISH Network distributor or retailer. In the event that ETC is unable,
through the exercise of reasonable commercial efforts, to resell any such OEM
Excess Inventory, ETC shall be entitled to exercise any other remedies available
to ETC under this Agreement, at law, in equity or otherwise for breach of
Licensee's obligations regarding the relevant purchase order.
(c) In the event that (i) Licensee does not opt to
pay the OEM Retrofit Costs or (ii) Licensee opts to pay the Retrofit Costs but
does not actually pay the OEM Retrofit Costs to ETC, in advance and within five
(5) business days after receipt of such notice, then in addition to all other
remedies available to ETC under this Agreement, at law, in equity or otherwise
ETC and/or any of its Affiliates shall have the right, but not the obligation,
to sell OEM Excess Inventory without removing the Licensee markings. Licensee
hereby grants to ETC and its Affiliates a license to the Licensee markings as
necessary for the marketing and sale of such OEM Excess Inventory under this
Section 3.12.6(c).
(d) For sales of OEM Excess Inventory by ETC or an
Affiliate hereunder, Licensee shall not be entitled to any Incentives under
Section 5 below or otherwise.
(e) This Section 3.12.6 shall not be construed as
creating an obligation upon ETC to mitigate its damages by removing Licensee
marks or otherwise retrofitting OEM Excess Inventory for sale as EchoStar or
DISH brand products, and its is hereby expressly agreed by the parties that ETC
has no such obligation, it being recognized by the parties that ETC and its
Affiliates would incur additional risk and cost in exercising such remedy
including but not limited to lost opportunity costs.
3.13 Warranty.
3.13.1. General Warranty.ETC warrants to Licensee that each
OEM Receiver will be free from defects in materials and workmanship (labor and
parts) for a period of *** from the date of shipment by ETC or its contract
manufacturer to Licensee. This warranty shall not apply to: (i) any OEM Receiver
that is abused, damaged by external causes, altered or misused; or (ii) any OEM
Receiver that is
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
damaged due to improper installation or use. OEM Receivers shall be considered
free from defects in workmanship if they are manufactured in accordance with
ETC's manufacturing workmanship standards (or those of any third party which
manufactures the OEM Receiver on ETC's behalf), conform to the product
specifications, and successfully complete product acceptance tests for the
product. In addition, ETC will provide out-of-warranty service and repair or
replacement of OEM Receivers to Licensee or end-users on terms and conditions
that are at least equivalent to the terms and conditions ETC utilizes for
Receivers returned to ETC generally.
3.13.2 Deadline for Claims; Disclaimer. ALL CLAIMS FOR
WARRANTY FULFILLMENT UNDER SECTION 3.13.1 MUST BE RECEIVED BY ETC (OR ITS
DESIGNEE) NO LATER THAN *** AFTER THE EXPIRATION OF THE WARRANTY PERIOD FOR THE
PRODUCT. THIS WARRANTY IS THE ONLY WARRANTY GIVEN BY ETC FOR OEM RECEIVERS. ETC
MAKES, AND LICENSEE RECEIVES, NO OTHER WARRANTY EITHER EXPRESS OR IMPLIED. ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, ARE
EXPRESSLY DISCLAIMED AND EXCLUDED HEREFROM.
3.13.3 Exclusive Remedy.Licensee's exclusive remedy for
fulfillment of the warranty set forth in Section 3.13.1 above shall be at, at
ETC's option, repair by ETC at an ETC or third party facility of ETC's choice,
replacement of the defective OEM Receiver, or return of the purchase price paid
by Licensee to ETC for the defective OEM Receiver within *** days after receipt
of the OEM Receiver by ETC.
3.13.4 Licensee Warranty. Licensee shall extend ETC's then
current standard consumer warranty to the end user of the OEM Receivers
purchased from ETC hereunder.
3.14 Smart Cards. ETC shall maintain a supply of Smart Cards to fulfill
its warranty obligations under Section 3.13 and 2.6. In addition with respect to
Smart Cards that have been lost, stolen or destroyed, ETC (or such other entity
as ETC may designate from time to time in writing) will sell replacement Smart
Cards to the end user subject to such terms and conditions and at such prices as
ETC may determine from time to time in its sole judgment.
4. LICENSEE RETAIL CHANNEL
4.1 Licensee Retailers. "Licensee Retailers" shall mean and be limited
to: (a)***; (b)***; (c) certain persons and entities to be mutually agreed upon
by *** based upon the retailer list provided to the EchoStar Parties by Licensee
on June 6, 2002, which agreed-upon list of persons and entities shall be
attached hereto as Exhibit D; and (d) persons or entities that either: (i) are
not already members of ESC's and/or any of its Affiliates' then-current
independent retailer base and have not already been
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
authorized (whether in writing or otherwise) on an incentivized or
non-incentivized basis by ESC and/or any of its Affiliates to promote and
solicit orders for any of its and/or their programming services; or (ii) are
retailers, substantially carrying Licensee consumer electronics products on the
date of this Agreement, all of whose business consists of the sale of consumer
electronics products (including but not limited to ***), but specifically
excluding ***; and in each case described in (a) through (d) above not until
such time (and only for so long) as such person or entity has a valid Retailer
Incentive Agreement (as defined in Section 4.2 below) in full force and effect
with ESC. Except as expressly permitted to the contrary pursuant to Sections 2.2
and 3.1 above, Licensee agrees that it will not sell Licensee Receivers or OEM
Receivers to any person or entity who is not a Licensee Retailer without ESC's
prior written consent, which consent may be withheld in ESC's sole judgment.
4.2 Incentive Agreements. ESC shall be responsible for negotiating and
entering into such agreements ("Retailer Incentive Agreements") as may be
desired by ESC, in its sole judgment, from time to time for the payment by ESC
of incentives to Licensee Retailers in connection with the sale of Licensee
Receivers and OEM Receivers to end-users. Licensee acknowledges and agrees that
ESC may refuse to sign any Retailer Incentive Agreement (whether or not it has
been signed by a prospective Licensee Retailer) with any prospective Licensee
Retailer, as ESC may determine in its sole judgment.
4.3 CAID Numbers, Serial Numbers and Smart Card Numbers. For the
purpose of facilitating the payment by ESC of incentives to Licensee Retailers,
on the immediately following business day by 8:00 A.M. (mountain time), Licensee
shall provide ESC with a list on electronic media (and/or on paper upon ESC's
request) in the format requested by ESC, which includes: (i) the CAID number,
serial number and corresponding Smart Card number for each Licensee Receiver and
OEM Receiver delivered by Licensee to a Licensee Retailer on any given calendar
day; (ii) the serial number for each Promotional Certificate delivered by
Licensee to a Licensee Retailer on any given calendar day; and (iii) the name,
address and such other identifying information as ESC may request in its
reasonable judgment and which is not reasonably considered confidential or
proprietary by Licensee for the Licensee Retailer to whom such Licensee
Receivers, OEM Receivers, corresponding Smart Cards and Promotional Certificates
were delivered, unless the parties agree otherwise in writing.
5. INCENTIVES
5.1 Incentives.
5.1.1 General.
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
(a) For each Licensee Receiver and OEM Receiver that
is (i) sold by Licensee directly to a Licensee Retailer, (ii) resold by such
Licensee Retailer directly to an end user, and (iii) results in the Activation
of a Primary Receiver with Eligible Programming for a new Subscriber Account,
ESC shall pay Licensee *** (a "Primary Incentive").
(b) For each Licensee Receiver and OEM Receiver that
is (i) sold by Licensee directly to a Licensee Retailer, (ii) resold by such
Licensee Retailer directly to a Subscriber Account, and (iii) Activated on such
Subscriber Account as a Secondary Receiver, ESC shall pay Licensee *** (a
"Secondary Incentive").
(c) For each Promotional Certificate that is (i) sold
by Licensee directly to a Licensee Retailer, (ii) resold by such Licensee
Retailer directly to an end user, (iii) results in the Activation of a Primary
Receiver with Eligible Programming for a new Subscriber Account, and (iv) meets
all necessary criteria set forth the applicable Promotional Program and Business
Rules for payment of a primary activation payment (or substantially similar
payment), ESC shall pay Licensee *** (a "Certificate Incentive").
(d) For so long as RCA, GE and/or RCA Scenium branded
Receivers are the only Receivers being Activated through a particular Licensee
Retailer, then for each Receiver that (i) is Activated through such Licensee
Retailer pursuant to a Promotional Program; (ii) is not otherwise eligible for
an incentive pursuant to Subsections (a), (b) or (c) above; (iii) results in the
activation of a Primary Receiver with Eligible Programming for a new Subscriber
Account, and (iv) meets all necessary criteria set forth in the applicable
Promotional Program and Business Rules for payment of a primary activation
payment (or substantially similar payment), ESC shall pay Licensee *** (a
"Special Incentive").
(e) In the event that RCA, GE and/or RCA Scenium
branded Receivers and other-branded Receivers are being Activated through a
particular Licensee Retailer, then the Parties agree to discuss the possibility
of ESC paying Licensee non-standard incentives (i.e., incentives other than and
instead of the incentives payable under Subsections (a), (b) and (c) and (d)
above) for:
(i) each Licensee Receiver and OEM Receiver
that is (A) sold by Licensee directly to such Licensee Retailer, (B) resold by
such Licensee Retailer directly to an end user, and (C) results in the
activation of a Primary Receiver with Eligible Programming for a new Subscriber
Account,
(ii) each Licensee Receiver and OEM Receiver
that is (A) sold by Licensee directly to such Licensee Retailer, (B) resold by
such Licensee Retailer directly to a Subscriber Account, and (C) Activated on
such Subscriber Account as a Secondary Receiver, and
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
(iii) each Promotional Certificate that is
(A) sold by Licensee directly to such Licensee Retailer, (B) resold by such
Licensee Retailer directly to an end user, (C) results in the activation of a
Primary Receiver with Eligible Programming for a new Subscriber Account, and (D)
meets all necessary criteria set forth the applicable Promotional Program and
Business Rules for payment of a primary activation payment (or substantially
similar payment) (collectively, "Non-Standard Incentives").
For the avoidance of doubt and notwithstanding the foregoing,
Licensee hereby acknowledges and agrees that ESC shall have absolutely no
obligation whatsoever to make any Non-Standard Incentives available to Licensee.
5.1.2 Additional Terms and Conditions.
(a) Primary Incentives, Secondary Incentives,
Certificate Incentives, Special Incentives and Non-Standard Incentives are
referred to collectively hereinafter as "Incentives".
(b) Notwithstanding the above and provided that
Licensee is not in breach or default of its payment obligations under Section
2.5, the Primary Incentive shall be *** instead of *** and the Secondary
Incentive shall be *** instead of *** during such periods as the aggregate
Incentives actually paid to Licensee plus offsets of chargebacks against
Incentives is less than the then-current aggregate total amount that has
actually been paid to ETC by Licensee pursuant to Section 2.5, which shall in no
event exceed an aggregate total of ***.
(c) In the event that Licensee sells the underlying
OEM Receiver to the relevant Licensee Retailer ***.
(d) Licensee shall only be eligible to receive
Incentives under this Section 5.1 in connection with the first Activation of
each unit of OEM Receiver and Licensee Receiver by an end-user.
(e) The rates set forth in Sections 5.1.1(a),
5.1.1(b), 5.1.1(c), 5.1.1(d) and 5.1.2(b) for Primary Incentives, Secondary
Incentives, Certificate Incentives and Special Incentives are the minimum
Incentives to be paid by ESC to Licensee. ESC and Licensee agree to engage in
good faith negotiations during the 90 day period following the execution of this
Agreement regarding the possible upward adjustment of the Primary Incentive,
Secondary Incentive, Certificate Incentive and Special Incentive in
consideration for Licensee's contribution to ETC of such technology and know how
as designated by Licensee for use with the Receivers.
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
(f) In the event that Licensee sells the underlying
Licensee Receiver to the relevant Licensee Retailer *** charged to retailers in
the Territory by Echosphere for Receivers performing substantially similar
functions as the relevant Licensee Receiver, as established prior to the
beginning of each calendar quarter, ***. In the event that ESC elects in its
sole judgment to offer non-standard retailer economics to a particular Licensee
Retailer, then the *** used above with respect to a particular model Licensee
Receiver shall be the *** charged to retailers in the Territory receiving
substantially same non-standard retailer economics as the applicable Licensee
Retailer by Echosphere for Receivers performing substantially similar functions
as the relevant Licensee Receiver, as established prior to the beginning of each
calendar quarter.
5.2 Payment Terms. Incentive payments shall be made by ESC *** for
which Incentives are owed to Licensee ***. Subject to the terms and conditions
of this Agreement (including without limitation Sections 5.3 and 5.4), Licensee
shall continue to receive all Incentives ***.
5.3 Charge Back. ESC shall have the right to charge back Incentives
paid to Licensee hereunder under same the terms and conditions pursuant to which
ESC has the right to charge back incentives from its retailers generally under
ESC's standard incentivized retailer agreement, attached hereto as Exhibit B,
and applicable Business Rules, as such standard incentivized retailer agreement
and applicable Business Rules may change at any time and from time to time in
ESC's sole judgment; provided that, in the event of any conflict or
inconsistency between the applicable charge back terms and conditions set forth
in ESC's standard incentivized retailer agreement and the applicable charge back
terms and conditions set forth in the applicable Business Rules, then the
applicable charge back terms and conditions set forth in the applicable Business
Rules shall control. The number of ETC Receivers calculated under Section
2.7.1(b) above shall be reduced on *** for each Licensee Receiver and Specialty
OEM Receiver for which Incentives are charged backed by ESC under this Section
5.3 (i.e., for each Licensee Receiver for which Incentives are charged back, the
number of ETC Receivers shall be reduced by ***, and for each Specialty OEM
Receiver for which Incentives are charged back, the number of ETC Receivers
shall be reduced by ***).
5.4 Suspension and Termination of Incentives.
5.4.1 Suspension. In addition to any other rights and remedies
available, ESC shall not be required to pay any Incentives to Licensee which
would otherwise be due to Licensee during any period in which Licensee is in
breach or default of any material provisions of this Agreement, and ESC shall
have no liability to Licensee as a result of such suspension of payment.
Specifically, and without limitation of the foregoing, Licensee shall have no
right at any time to recoup any Incentives not paid
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
during a period of breach or default. Upon cure of the applicable default or
breach, Incentive payments to Licensee shall be reinstated on a going forward
basis.
5.4.2 Termination.
(a) ESC shall have the right to terminate immediately
all payments of Incentives due to Licensee under this Agreement, in addition to
any other remedies available to ESC, but shall otherwise immediately pay all
amounts due and owing to Licensee hereunder and Licensee shall immediately pay
all amounts due and owing to the EchoStar Parties hereunder in the event that
(i) this Agreement is terminated by ETC and/or ESC for default pursuant to
Section 6.2.1 below; (ii) the Trademark Agreement is terminated by ETC and/or
ESC for default pursuant to Sections 8(B) or 8(C) thereof; (iii) the Trademark
Agreement is terminated automatically because Licensee is in default under
Section 8(A) thereof; or (iv) Licensee ceases to sell Licensee Receivers or OEM
Receivers to Licensee Retailers as contemplated hereunder.
(b) Following (i) expiration of this Agreement
pursuant to Section 6.1 below, (ii) expiration of the Trademark Agreement
pursuant to Section 5 thereof, (iii) termination of this Agreement by Licensee
for default pursuant to Section 6.2.1 below, (iv) termination of the Trademark
Agreement by Licensee for default pursuant to Sections 8(B) or 8(C) thereof, (v)
the Trademark Agreement is terminated automatically because either or both of
the EchoStar Parties are in default under Section 8(A) thereof; or (vi)
termination of this Agreement by ETC and/or ESC pursuant to Section 6.2.2 below,
Licensee shall immediately cease shipping Licensee Receivers and OEM Receivers
to Licensee Retailers, and ESC shall only have the obligation to make payment of
Incentives due to Licensee under this Agreement for Licensee Receivers and OEM
Receivers that are Activated within one hundred eighty (180) days after the date
of such termination or expiration, and in such case, ESC shall have the right to
hold back a sufficient amount (as determined in ESC's reasonable judgment) of
such Incentives through expiration of the then-current standard chargeback
period set forth in ESC's standard incentivized retailer agreement, attached
hereto as Exhibit B, as such standard incentivized retailer agreement may change
at any time and from time to time in ESC's sole judgment upon written notice to
Licensee to cover any chargebacks occurring after the date of such expiration or
termination. During the sixty-day period following expiration of such chargeback
period, the parties agree to negotiate in good faith towards agreeing upon the
final amount owing from Licensee to the EchoStar Parties for chargebacks
hereunder and the final amount owing from the EchoStar Parties to Licensee for
Incentives hereunder. The net amount payable from Licensee to the EchoStar
Parties or from the EchoStar Parties to Licensee, as the case may be, shall be
paid within five (5) business days after the parties agree upon such final
amounts.
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
(c) The parties acknowledge and agree that the
section references made with respect to the Trademark Agreement in Sections
5.4.2(a) and (b) above are based on the current draft of the Trademark
Agreement, and further acknowledge and agree that the above references shall be
modified to the extent necessary to capture the same intent with the respect to
the executed final Trademark Agreement.
5.5 Maintenance of Records and Audit Rights. Licensee agrees to keep
accurate books and records relating to (i) the distribution and sale of OEM
Receivers, and (ii) the manufacture, distribution and sale of Licensee
Receivers, and Licensee agrees to provide such information to the EchoStar
Parties upon request. ESC shall be entitled to review and audit, using its own
internal auditors or an independent certified public accounting firm, upon
reasonable prior notice and at ESC's expense, the books and records of Licensee
for the purpose of verifying that the reductions to Incentives contemplated
under Section 5.1.2 above are being properly calculated as required hereunder,
that the timing of Subsidy payments under Section 2.11 is being properly
calculated, and that Licensee is otherwise complying with its obligations under
this Agreement. Any audit conducted by ESC shall be conducted by ESC or its
representative(s) at Licensee's address set forth above, or such other address
as Licensee may designate to ESC from time to time in writing, and shall be
conducted during Licensee's normal business hours. Reciprocal audit rights are
granted to Licensee for the purpose of verifying information material to
Subsidy, Incentives, and other fees, payments, or offsets materially affecting
Licensee's business. The Echostar Parties are subject to reciprocal record
maintenance obligations.
5.6 Offset. In the event that the Incentives paid by ESC to Licensee
exceed the amount to which Licensee was entitled, or if Licensee or any of its
Affiliates are indebted to ESC or any of its Affiliates for any other reason,
Licensee acknowledges and agrees that ESC shall have the right to offset any
such amounts due to ESC or its Affiliates from Licensee for any reason against
any Incentives or other money otherwise due to Licensee from ESC or any of its
Affiliates.
6. TERM AND TERMINATION
6.1 Term. This Agreement shall commence on the date first written above
and shall continue for three (3) years thereafter, unless terminated sooner as
provided in this Agreement (the "Term"). This Agreement is not automatically
renewable.
6.2 Termination.
6.2.1 This Agreement may be terminated by a party upon the
occurrence of any of the following with respect to another party: (i) the other
party commits a payment default which is not cured within ten (10) days of
receipt of written notice from
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
the first party, (ii) the other party defaults on any duty or obligation or
breaches any representation, warranty or covenant in this Agreement, and such
default or breach is not cured within thirty (30) days of receipt of written
notice from the first party, or (iii) the filing of a voluntary or involuntary
petition in bankruptcy or the appointment of a referee, trustee, conservator or
receiver for a substantial portion of the other party's assets and such petition
or appointment is not dismissed or revoked within 60 days.
6.2.2 This may be terminated by EchoStar immediately upon
written notice to Licensee in the event that Licensee is in breach or default of
Section 2.10.
6.2.3 The agreement shall terminate automatically in the event
that the Trademark Agreement expires or is terminated for any reason whatsoever.
7. CONFIDENTIALITY
7.1 General.
7.1.1 The negotiations leading to this Agreement and the
negotiations leading to the MOEMMA (as defined in Section 11.7 below), together
with all terms and conditions of each, as well as all financial, business,
technical and other proprietary information disclosed or provided by any party
to this Agreement and any Affiliates thereof, and all information generated
therefrom including evaluations thereof ("Confidential Information") shall be
kept and treated as strictly confidential and shall only be used by a party (and
the persons and entities to whom such party is permitted to disclose such
information under this Agreement) as necessary for such party to perform its
duties and obligations under this Agreement, in each case for a period of ***
after initial disclosure.
7.1.2 The obligations imposed upon the parties herein shall
not apply to Confidential Information which is:
(a) or becomes generally available to the public
through no wrongful act of the receiving party;
(b) already lawfully in the possession of the
receiving party and not subject to an existing agreement of confidentiality
between the parties;
(c) received from a third party without restriction
and without breach of this Agreement;
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
(d) independently developed by the receiving party;
or
(e) released pursuant to the binding order of a
government agency or a court so long as prior to any such release the releasing
party provides the other party with the greatest notice permitted under the
circumstances, so that the disclosing party may seek a protective order or other
appropriate remedy. In any such event, the releasing party will disclose only
such Confidential Information as is legally required and will exercise
reasonable efforts to obtain confidential treatment for any Confidential
Information being disclosed.
7.1.3 Notwithstanding anything to the contrary set forth
herein, the parties shall have the right to disclose the fact of the existence
of this Agreement and the MOEMMA, together with the minimum amount of other
information deemed necessary by securities counsel to either party if such
securities counsel in good faith determines that public disclosure of the
information is necessary under federal or state securities laws applicable to
such party. Disclosure of such information shall be coordinated in advance with
the other party. Any such disclosure shall not permit the disclosing party to
issue any press release or otherwise discuss or further disseminate the
information contained in the securities filing in any manner.
***
8. REPRESENTATIONS AND WARRANTIES
8.1 Representations, Warranties and Covenants of Licensee. Licensee
represents, warrants and covenants, as follows, which representations,
warranties and covenants shall survive the execution of this Agreement:
8.1.1 Licensee has the right and authority to enter into this
Agreement and the execution, delivery and performance by Licensee of this
Agreement have been duly authorized by all requisite corporate action and will
not violate any provision of Licensee articles of incorporation or bylaws, or
any provision of any agreement by which Licensee is bound or affected.
8.1.2 Licensee has the necessary technical knowledge,
practical experience and capacity to manufacture, assemble and test the Licensee
Receivers under the License granted hereunder.
8.1.3 Licensee is not, nor at any time will it be, in
violation of any applicable Law by entering into and undertaking the performance
of this Agreement and in performing its obligations pursuant to this Agreement.
Licensee agrees to comply with any and all applicable Laws.
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
8.1.4 Licensee shall not take any action, and will refrain
from taking any action, intended to have an adverse effect on any of the
benefits the EchoStar Parties might reasonably be expected to derive from the
transactions contemplated hereby.
8.1.5 Licensee shall provide to ETC such adequate assurances
as ETC may require from time to time in order to ensure that the requirements of
this Section 8.1 have been met, and will continue to be met on an ongoing basis,
by Licensee.
8.1.6 Except as otherwise expressly stated in this Agreement,
Licensee makes no other representations or warranties, either express or
implied, statutory or otherwise, and all such warranties are hereby excluded
except to the extent such exclusion is absolutely prohibited by law.
8.2 Representations, Warranties and Covenants of ETC. The EchoStar
Parties (or, ETC or ESC as identified below) represent, warrant and covenant as
follows, which representations, warranties and covenants shall survive the
execution of this Agreement:
8.2.1 The EchoStar Parties have the right and authority to
enter into this Agreement and the execution, delivery and performance by the
EchoStar Parties of this Agreement have been duly authorized by all requisite
corporate action and will not violate any provision of articles of incorporation
or bylaws, or any provision of any agreement by which the EchoStar Parties are
bound or affected.
8.2.2 ETC is the beneficial owner of Intellectual Property
created independently by it, and such Intellectual Property is not subject to
any covenant or other restriction preventing or limiting ETC's right to
manufacture the OEM Receivers as contemplated by this Agreement.
8.2.3 The EchoStar Parties are not, nor at any time will it
be, in violation of any applicable Law by entering into and undertaking the
performance of this Agreement and in performing their obligations pursuant to
this Agreement. The EchoStar Parties agree to comply with any and all applicable
Laws.
8.2.4 The EchoStar Parties shall not take any action, and will
refrain from taking any action, intended to have an adverse effect on any of the
benefits Licensee might reasonably be expected to derive from the transactions
contemplated hereby.
8.2.5 The EchoStar Parties shall provide to Licensee such
adequate assurances as Licensee may require from time to time in order to ensure
that the requirements of this Section 8.2 have been met, and will continue to be
met on an ongoing basis, by ETC.
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
8.2.6 Except as otherwise expressly stated in this Agreement,
the EchoStar Parties make no other representations or warranties, either express
or implied, statutory or otherwise, and all such warranties are hereby excluded
except to the extent such exclusion is absolutely prohibited by law.
9. LIMITATION OF LIABILITY
9.1 Limitation. IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY INDIRECT,
SPECIAL, EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT
LIMITED TO, LOSS OF USE OR LOST BUSINESS, REVENUE, PROFITS OR GOODWILL) ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LICENSEE GRANTED
HEREUNDER, TERMINATION OR ANY OTHER MATTER RELATED HERETO. IN ADDITION TO AND
WITHOUT LIMITATION OF THE FOREGOING, NEITHER PARTY SHALL HAVE ANY LIABILITY OR
RESPONSIBILITY TO THE OTHER PARTY OR ANYONE CLAIMING THROUGH THE OTHER PARTY FOR
ANY LOSS OR DAMAGE (INCLUDING, GENERAL, INDIRECT, EXEMPLARY, INCIDENTAL, SPECIAL
AND CONSEQUENTIAL DAMAGES) ARISING OUT OF ANY FAILURE OR DELAY IN SHIPMENT, LATE
SHIPMENT, OR DELIVERY OF ALL OR ANY PART OF ANY ORDER.
9.2 Risk Allocation. The parties agree that each and every provision of
this Agreement which provides for a limitation of liability, disclaimer of
warranties or exclusion of damages is expressly intended to be severable and
independent of any other provision since they represent separate elements of
risk allocation between the parties and shall be separately enforced. This
Section 9.2 shall expressly survive the expiration or termination of this
Agreement.
10. INDEMNIFICATION
10.1 General Indemnity
10.1.1 By Licensee. In addition to the intellectual property
indemnity in Section 10.2.1 below, Licensee shall defend, indemnify and hold ETC
and its Affiliates, and any and all of its and their respective officers,
directors, shareholders, employees, agents and representatives, and any and all
of its and their assigns, successors, heirs and legal representatives
(collectively the "ETC Group"), harmless from and against any and all third
party claims, demands, litigation, settlements, judgments, damages, liabilities,
costs and expenses, including but not limited to reasonable attorney fees
("Claims") incurred by the ETC Group arising directly or indirectly out of: (i)
a breach or default of any obligation, representation, warranty or covenant of
Licensee hereunder; (ii) except where ETC has an obligation of indemnity
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subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
to Licensee, any claims of third parties otherwise arising out of or in
connection with Licensee's activities in the marketing, promotion, sale and
distribution of OEM Receivers, (iii) any claim whatsoever of product liability
with respect to the ETC Receivers, and Licensee Receivers (excluding design
defects as a result of manufacture of the ETC Receivers and Licensee Receivers
in strict conformance with the ETC Receiver Specifications); (iv) any claims of
third parties otherwise arising out of or in connection with the breach of any
express or implied product warranty for which Licensee is responsible pursuant
to this Agreement (v) any claims of third parties otherwise arising out of or in
connection with Licensee's manufacture, sale or use of the Licensee Receivers or
the Licensed Technology, including, without limitation, breach of any express or
implied warranty, manufacturing defects, or negligence in the manufacture of the
Licensee Receivers to the extent the claim does not arise through the negligence
act or failure to act of the EchoStar Parties, or either of them; and (vi) any
claims of third parties otherwise arising out of or in connection with
Licensee's marketing, promotion, sale and distribution Licensee Receivers.
Nothing in this section shall be construed to obligate Licensee to indemnify ETC
Group for any liabilities which arise with respect to intellectual property
issues such as infringement of a third party patent, trademark, trade secret, or
copyright.
10.1.2 By ETC. In addition to the intellectual property
indemnity in Section 10.2.2 below, ETC shall defend, indemnify and hold Licensee
and its Affiliates, and any and all of its and their respective officers,
directors, shareholders, employees, agents and representatives, and any and all
of its and their assigns, successors, heirs and legal representatives
(collectively the "Licensee Group"), harmless from and against any and all third
party Claims incurred by the Licensee Group arising directly or indirectly out
of: (i) a breach or default of any obligation, representation, warranty or
covenant of ETC hereunder; (ii) any claim whatsoever of product liability with
respect to the OEM Receivers; and (iii) any claim whatsoever of product
liability with respect to the Licensee Receivers and ETC Receivers arising out
of compliance with the ETC Receiver Specifications (provided that Licensee
manufactures the Licensee Receivers in strict conformance with the ETC Receiver
Specifications), but specifically excluding claims that would not have arisen
but for a feature or function added to the Licensee Receiver by Licensee.
Nothing in this section shall be construed to obligate ETC to indemnify Licensee
Group for any liabilities which arise with respect to intellectual property
issues such as infringement of a third party patent, trademark, trade secret, or
copyright.
10.1.3 The indemnifying party under Sections 10.1.1 and 10.1.2
above shall be entitled to have the exclusive conduct of and/or settle all
negotiations and litigation arising from any claim using counsel of the
indemnifying party's choosing.
10.2 Intellectual Property Indemnity
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
10.2.1 By Licensee.
(a) Licensee, at its own expense, shall defend any
suit brought against ETC Group insofar as it is based upon a claim that an OEM
Receiver, Licensee Receiver, ODU, or Accessory directly or indirectly infringes
any Third Party Xxxx, due to any trademark, trade name or service xxxx,
including without limitation Third Party Trademarks, that are affixed to the OEM
Receivers, Licensee Receivers, XXXx, or Accessories at Licensee's request and
that are not required to be affixed thereto by ETC, and shall indemnify ETC
Group against reasonable attorney fees incurred by ETC Group pursuant to clause
(e) below for such claim, any settlement approved by Licensee pursuant to clause
(e) below for such claim, and any final award of damages or costs for such
claim.
(b) The foregoing clause (a) states the entire
liability of Licensee in connection with infringement of a Third Party Xxxx by
an OEM Receiver, ODU, or Accessories, and except as stated in that clause,
Licensee will not be liable for any loss or damage of whatever kind (including
in particular any incidental, indirect, special or consequential damage)
suffered by the ETC Group in respect of the infringement of any Third Party
Intellectual Property by an OEM Receiver, ODU or Accessory.
(c) Except in the event that ETC has, or would have
in the instance that Licensee were named in such action, an obligation of
indemnity to Licensee pursuant to the provisions of Section 10.2.2(a), Licensee
shall defend at its own expense any suit brought against the ETC Group insofar
as it is based upon a claim that any or all of the Licensee Receivers or ETC
Receivers directly infringe any third party patent, copyright, trade secret,
mask work or other intellectual or industrial property right ("Third Party
Intellectual Property") and shall indemnify ETC against reasonable attorney fees
incurred by ETC Group pursuant to clause (e) below for such claim, any
settlement approved by Licensee pursuant to clause (e) below for such claim, and
any final award of damages or costs for such claim.
(d) The foregoing clauses (a) and (c) state the
entire liability of Licensee in connection with infringement of Third Party
Intellectual Property by any Licensee Receiver and ETC Receiver, and except as
stated in those clauses, Licensee will not be liable for any loss or damage of
whatever kind (including in particular any incidental, indirect, special or
consequential damage) suffered by ETC or any other person in respect of the
infringement of any Third Party Intellectual Property by Licensee Receivers and
ETC Receivers.
(e) In the event of any claim for indemnification by
ETC Group under clauses (a) or (c) above, ETC Group shall be entitled to
representation by counsel of its own choosing. ETC Group shall have the right to
the exclusive conduct of all negotiations and litigation arising from any claim
for which Licensee is obligated to
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
defend and indemnify ETC Group under clauses (a) and (c) above, but only as
regards ETC Group; provided, however, that ETC Group may not settle any such
claim without the prior written approval of Licensee (which approval Licensee
may withhold in its sole discretion); provided further, that in the event that
Licensee withholds its consent to the settlement of such a claim, then
Licensee's indemnification obligations under clauses (a) and (c) above will not
be subject to the limitation of liability set forth in clause (g) below and,
from that point forward, Licensee will have the right to the exclusive conduct
of and/or to settle all negotiations and litigation arising from that claim as
regards ETC Group.
(f) No cost or expense shall be incurred on behalf of
Licensee without its written consent.
(g) Licensee's liability under this Section 10.2.1
shall be limited to *** in the aggregate.
10.2.2 By ETC.
(a) Except as otherwise expressly set forth herein,
ETC, at its own expense, shall defend any suit brought against Licensee Group
insofar as it is based upon a claim that an OEM Receiver, ETC Receiver or
Licensee Receiver directly or indirectly infringes any Third Party Intellectual
Property (including, but not limited to, any claim by ***) and shall indemnify
Licensee against reasonable attorney fees incurred by Licensee Group pursuant to
clause (d) below for such claim, any settlement approved by ETC pursuant to
clause (d) below for such claim, and any final award of damages or costs for
such claim; except that ETC shall not be obligated to defend or indemnify
Licensee Group for any claim:
(i) which arises from any trademarks, trade
names or service marks, including without limitation Third Party Marks, that are
affixed to OEM Receivers, Licensee Receivers, XXXx, or Accessories at Licensee's
request and that are not required to be affixed thereto by ETC;
(ii) which is based in part upon a feature
added by Licensee where such claim could not have been brought but for the added
feature;
(iii) alleging infringement of a combination
device comprised of a Licensee Receiver, ETC Receiver or OEM Receiver and any
other product not supplied or approved by ETC, except that ETC shall be liable
for any portion of the infringement which may be apportioned to the accused
Licensee Receiver, ETC Receiver or OEM Receiver, as the case may be, as built
pursuant to the ETC Receiver Specification if the relevant Receiver alone
infringes Third Party Intellectual Property;
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
(iv) which could not have been brought
absent a deviation by Licensee from the ETC Receiver Specification;
(v) which results from Licensee's design or
instruction for a given OEM Receiver where such design or instruction are not in
conformance with the ETC Receiver Specification; or
(vi) which arises from Licensee's
modification of ETC Software unless expressly approved in writing by ETC.
(b) Except as otherwise expressly set forth herein,
in the event that a OEM Receiver, ETC Receiver, or Licensee Receiver (which has
been built pursuant to the ETC Receiver Specification), is in such suit held to
constitute infringement, ETC at its own election and at its own expense may
either procure for Licensee the rights to continue the sale of the infringing
Receiver, or modify a such Receiver so that it becomes non-infringing.
(c) The foregoing clause (a) states the entire
liability of ETC in connection with infringement of Third Party Intellectual
Property by Licensee Receivers, ETC Receivers and OEM Receivers and except as
stated in that clause, ETC will not be liable for any loss or damage of whatever
kind (including in particular any incidental, indirect, special or consequential
damage) suffered by Licensee or any other person in respect of the infringement
of any Third Party Intellectual Property.
(d) In the event of any claim for indemnification by
Licensee Group under clause (a) above, Licensee Group shall be entitled to
representation by counsel of its own choosing. Licensee Group shall have the
right to the exclusive conduct of all negotiations and litigation arising from
any claim for which ETC is obligated to defend and indemnify Licensee Group
under clause (a) above, but only as regards Licensee Group; provided, however,
that Licensee Group may not settle any such claim without the prior written
approval of ETC (which approval ETC may withhold in its sole discretion);
provided further, that in the event that ETC withholds its consent to the
settlement of such a claim, then ETC's indemnification obligations under clause
(a) above will not be subject to the limitation of liability set forth in clause
(g) below and, from that point forward, ETC will have the right to the exclusive
conduct of and/or to settle all negotiations and litigation arising from that
claim as regards Licensee Group.
(e) Notwithstanding clause (d) above, ETC shall have
the right to choose counsel for Licensee Group and shall have the right to the
exclusive conduct of all negotiations and litigation arising from any claim for
which ETC is obligated to defend and indemnify Licensee Group under clause (a)
above and that is based on the electronic programming guide or ETC Software
provided to Licensee by ETC (provided
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
that such electronic program guide or ETC Software, as the case may be, has been
implemented in the relevant Licensee Receiver or ETC Receiver by Licensee
without modification).
(f) No cost or expense shall be incurred on behalf of
ETC without its written consent.
(g) ETC's liability under this Section 10.2.2 shall
be limited to *** in the aggregate, with the sole and limited exception of
claims for which ETC is obligated to defend and indemnify Licensee Group under
clause (a) above and that are based on the *** or ETC Software provided to
Licensee by ETC (*** and ETC Software is implemented in the relevant Licensee
Receiver or ETC Receiver by Licensee without modification), in which case ETC's
liability under this Section 10.2.2 shall not be subject to such limitation.
10.3 Indemnification Procedure. The party seeking indemnification (the
"Indemnified Party") shall promptly notify the party from whom indemnification
is being sought (the "Indemnifying Party"). The Indemnified Party shall not make
any admission as to liability or agree to any settlement of or compromise any
claim without the prior written consent of the Indemnifying Party. The
Indemnified Party shall, at the Indemnifying Party's request and expense, give
the Indemnifying Party all reasonable assistance in connection with those
negotiations and litigation, which assistance shall include, among other things,
the retention and (upon the Indemnifying Party's request) the provision to the
Indemnifying Party of records and information as reasonably necessary, and
making employees available on a mutually convenient basis as reasonably
necessary. In the event that the Indemnifying Party has the right under Section
10.1 or 10.2 above to the exclusive conduct of all negotiations and litigation
arising from a particular claim, the indemnified party shall have the right to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Party, it being
understood, however, that the Indemnifying Party shall control such defense.
11. MISCELLANEOUS
11.1 Taxes.
11.1.1 Withholding Tax Based On Income. Except as otherwise
expressly set forth to the contrary herein, any and all payments required to be
made by Licensee (payor) to the EchoStar Parties (payee) or the EchoStar Parties
(payor) to Licensee (payee) under this Agreement are exclusive of any tax, levy
or government charges ("Taxes") that may be assessed against the payor by any
jurisdiction other than required withholding taxes based on income. In the event
that, under the laws of any jurisdiction, the payor is required to withhold
Taxes based on income, then the payor
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portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
shall forthwith pay the amounts deducted or withheld from such payments to the
relevant taxing or other authority in accordance with applicable law. The payor
will furnish the payee with a copy of a receipt evidencing payment thereof, and
the payment remitted by the payor to the payee will be net of this tax.
11.1.2 Gross Receipts, Excise and Other Taxes. In addition to
the prices Licensee pays for OEM Receivers, as provided above, Licensee is
responsible for gross receipts, excise and other taxes (excluding sales and use
tax, which are discussed below) applicable to the sale, use, transportation or
addition to value of the OEM Receivers. In addition to the prices ETC pays for
ETC Receivers, as provided above, ETC is responsible for gross receipts, excise
and other taxes (excluding sales and use tax, which are discussed below)
applicable to the sale, use, transportation or addition to value of the ETC
Receivers.
11.1.3 Sales and Use Taxes.
(a) Licensee Purchases. Licensee shall pay
separately stated sales and/or use taxes billed by ETC on the sale of OEM
Receivers to Licensee, unless Licensee provides ETC with a resale certificate,
direct pay permit or other exemption documentation acceptable to the appropriate
taxing jurisdiction. ETC shall be responsible for remitting the sales and/or use
taxes collected from Licensee to the proper taxing jurisdictions. ETC reserves
the right to xxxx sales and/or use taxes at a later date if it is determined
that a resale certificate, direct pay permit or other exemption documentation
previously accepted by ETC is not honored by the taxing jurisdiction, or if an
assessment or adjustment is made under audit.
(b) Licensee Sales. ETC shall pay separately
stated sales and/or use taxes billed by Licensee on the sale of ETC Receivers to
ETC, unless ETC provides Licensee with a resale certificate, direct pay permit
or other exemption documentation acceptable to Licensee and the appropriate
taxing jurisdiction. Licensee shall be responsible for remitting the sales
and/or use taxes collected from ETC to the proper taxing jurisdictions. Licensee
reserves the right to xxxx sales and/or use taxes at a later date if it is
determined that a resale certificate, direct pay permit or other exemption
documentation previously accepted by Licensee is not honored by the taxing
jurisdiction, or if an assessment or adjustment is made under audit.
11.2 Remedies Cumulative. It is agreed that the rights and remedies
herein provided in case of default or breach of this Agreement are cumulative
and shall not affect in any manner any other remedies that any party may have by
reason of such default or breach. The exercise of any right or remedy herein
provided shall be without prejudice to the right to exercise any other right or
remedy provided herein, at law, or in equity.
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
11.3 Notice. Any notice required or permitted to be given hereunder
shall be in writing and shall be sent by facsimile transmission, or by first
class certified mail, postage prepaid, or by overnight courier service, charges
prepaid, to the party notified, addressed to such party at the address set forth
below, or sent by facsimile to the fax number set forth below, or such other
address or fax number as such party may have substituted by written notice to
the other parties. The sending of such notice with confirmation of receipt
thereof (in the case of facsimile transmission) or receipt of such notice (in
the case of delivery by mail or by overnight courier service) shall constitute
the giving thereof:
If to Licensee: Thomson multimedia Inc.
00000 Xxxxx Xxxxxxxx Xx. ***
Indianapolis, IN 46290
Attn: Xxxxx Xxxxxx, Vice President
***
With a copy to: Thomson multimedia, Inc.
00000-Xx. Xxxxxxxx Xx.
Xxxxxxxxxxxx, XX 00000
Attn: Xxx Xxxxxx, Associate General Counsel
If to ETC: EchoStar Technologies Corporation
00 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxx, Senior Vice President
***
With a copy to: EchoStar Technologies Corporation
00 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, Senior Vice
President and General Counsel
***
If to ESC: EchoStar Satellite Corporation
0000 X. Xxxxx Xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx XxXxxxxx, Executive Vice
President
***
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
With a copy to: EchoStar Satellite Corporation
0000 X. Xxxxx Xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, Senior Vice
President and General Counsel
***
11.4 Independent Contractors. This Agreement and the transactions
contemplated hereby are not intended to create an agency, partnership or joint
venture relationship between the parties, or confer any benefit on any third
party. All agents and employees of each party shall be deemed to be that party
agents and employees exclusively, and the entire management, direction, and
control thereof shall be vested exclusively in such party. Each party, its
agents and employees, shall not be entitled to any benefits, privileges or
compensation given or extended by the other party to its employees.
11.5 Amendment. Except as expressly provided to the contrary by this
Agreement, no waiver or modification of any of the terms or conditions of this
Agreement shall be effective unless in writing and signed by both parties.
11.6 No Implied Waiver. Neither the waiver by a Party of a breach of or
a default under any of the provisions of this Agreement, nor the failure of a
Party, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right, remedy or privilege hereunder, shall
thereafter be construed as a waiver of any subsequent breach or default of a
similar nature, or as a waiver of any such provisions, rights, remedies or
privileges hereunder. No failure or delay on the part of a Party in exercising
any right, power or privilege hereunder, and no course of dealing between the
Parties, shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
No change, waiver or discharge hereof shall be valid unless in writing and
signed by an authorized representative of the Party against whom such change,
waiver or discharge is sought to be enforced. A waiver by any Party of any of
the covenants, conditions or contracts to be performed by the other or any
breach thereof shall not be construed to be a waiver of any succeeding breach
thereof or of any other covenant, condition or contract herein contained.
11.7 Entire Agreement. This Agreement sets forth the entire, final and
complete understanding between the parties hereto relevant to the subject matter
of this Agreement, and it supersedes and replaces all previous understandings or
agreements, written, oral, or implied, relevant to the subject matter of this
Agreement made or existing before the date of this Agreement, including without
limitation the Memorandum OEM Manufacturing Agreement dated January 9, 2002, by
and among ESC, ETC and Licensee (the "MOEMMA"), but excluding any non-disclosure
agreements previously
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
execute between any or all of the parties hereto, which shall remain in full
force and effect. Except as expressly provided by this Agreement, no waiver or
modification of any of the terms or conditions of this Agreement shall be
effective unless in writing and signed by both parties.
11.8 Force Majeure. Neither party shall be liable to the other party
for nonperformance or delay in performance of any of its obligations under this
Agreement due to causes reasonably beyond its control or which cause makes
performance a commercial impracticability, including act of God, fire,
explosion, flood, windstorm, earthquake, trade embargoes, strikes, labor
troubles or other industrial disturbances, accidents, governmental regulations,
riots, and insurrections ("Force Majeure"). Upon the occurrence of a Force
Majeure condition, the affected party shall immediately notify the other party
with as much detail as possible and shall promptly inform the other party of any
further developments. Immediately after the Force Majeure event is removed or
abates, the affected party shall perform such obligations with all due speed.
Neither party shall be deemed in default of this Agreement if a delay or other
breach is caused by a Force Majeure event. If a Force Majeure event is expected
to continue for more than three (3) months, any party may terminate this
Agreement by providing thirty (30) days prior written notice to the other
parties. Such termination shall be without any continuing liabilities or
obligations on the part of one party to the other of any kind except as
expressly set forth herein.
11.9 Severability. If any term or provision herein, or the application
thereof to any person, entity, or circumstances shall to any extent be invalid
or unenforceable in any pertinent jurisdiction, the remainder hereof shall not
be affected thereby but shall be valid and enforceable as if the invalid term or
provision were not a part hereof.
11.10 Headings. The descriptive headings contained in this Agreement
are included for convenience and reference only and shall not be held to expand,
modify, amplify or aid in the interpretation, construction or meaning of this
Agreement.
11.11 Assignment. ETC and ESC may assign their respective rights and
delegate their respective duties under this Agreement in whole or in part at any
time; provided that the assignee is at least as creditworthy on such date of
assignment as the EchoStar Parties are on the date first set forth above. Except
as otherwise set forth to the contrary herein, Licensee may not assign any
rights or delegate any duties under this Agreement without the prior written
consent of ETC and ESC, which consent may be withheld in their sole judgment.
Any attempt to do so without such consent shall be void.
11.12 Compliance with Law. The parties shall comply with, and agree
that this Agreement is subject to, all applicable federal, state, and local
laws, rules and
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
regulations, and all amendments thereto, now enacted or hereafter promulgated in
force during the term of this Agreement.
11.13 General Provisions. The terms and conditions attached as exhibits
hereto are fully incorporated into this Agreement.
11.14 Counterparts. This Agreement may be signed in counterparts, each
of which shall constitute an original and all of which together shall constitute
one and the same agreement.
11.15 Survival. In addition to the provisions of this Agreement that
survive by their express terms, the following provisions shall survive
expiration or termination of this Agreement for a reasonable period of time
under the circumstances: Sections 2.6 (with respect to in-warranty and
out-of-warranty service and repair), 2.9, 2.15, 3.13, 3.14, 5.4.2, 7.1, 9, 10,
11.1, and 11.3. In addition, any provision of this Agreement which logically
would be expected to survive termination or expiration of the Agreement shall
survive for a reasonable period of time under the circumstances.
11.16 Trademark Agreement. The Parties shall mutually agree to a
trademark agreement (the "Trademark Agreement") to be attached as Exhibit E
hereto on or before July 15, 2002.
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers or representatives as of the date
first written above.
ECHOSTAR SATELLITE CORPORATION
By:
-----------------------------------------
Xxxxx X. Xxxxxxxxx
Senior Vice President and General Counsel
ECHOSTAR TECHNOLOGIES CORPORATION
By:
-----------------------------------------
Xxxxx X. Xxxxxxxxx
Senior Vice President and General Counsel
THOMSON MULTIMEDIA INC. (LICENSEE)
By:
-----------------------------------------
Xxxxx Xxxxxx
Vice President
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
EXHIBIT LIST
EXHIBIT A TRADEMARK USAGE GUIDELINES
EXHIBIT B INCENTIVIZED RETAILER AGREEMENT
EXHIBIT C NET EFFECTIVE ROYALTY RATES
EXHIBIT D LICENSEE RETAILERS
EXHIBIT E TRADEMARK AGREEMENT
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
EXHIBIT A
TRADEMARK USAGE GUIDELINES
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
EXHIBIT B
INCENTIVIZED RETAILER AGREEMENT
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
EXHIBIT C
NET EFFECTIVE ROYALTY RATES
Net Effective
Technology Royalty per Receiver
***
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
EXHIBIT D
LICENSEE RETAILERS
[TO BE ATTACHED PURSUANT TO SECTION 4.1]
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
EXHIBIT E
TRADEMARK AGREEMENT
TO BE AGREED TO ON OR BEFORE JULY 15, 2002.
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redacting a portion of the text. Copies of the exhibit containing the redacted
portions have been filed separately with the Securities and Exchange Commission
subject to a request for confidential treatment pursuant to Rule 24.b-2 under
the Securities Exchange Act.
