INTERACTIVE AFFILIATION AGREEMENT
(VIRTUAL CHANNEL)
This Interactive Affiliation Agreement (the "Agreement"), is made and
effective as of this 18 day of November, 2004 (the "Effective Date") by and
between Zone4Play Inc. ("Network"), having a principal place of business at 000
Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000 and EchoStar Satellite L.L.C.
("EchoStar"), having a principal place of business at 0000 Xxxxx Xxxxxxxx Xxxx.,
Xxxxxxxxx, Xxxxxxxx 00000.
RECITALS
A. EchoStar operates a direct broadcast satellite DBS system in the United
States and desires to offer its customers an interactive programming service
consisting of a multi player trivia bingo game of skill as described in more
detail in Attachment A (attached hereto and incorporated herein by this
reference), (hereinafter the "Service"); and
B. Network desires to provide application software (the "Software
Application") necessary to run the Service on EchoStar's distribution network;
NOW, THEREFORE, in consideration of the mutual promises and the covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Network and EchoStar
agree as follows:
1. RIGHTS.
Network hereby grants to EchoStar and its Affiliates (as defined below)
the exclusive right and license to transport, display, exhibit, market, promote
and distribute the Service to residential and commercial customers served by
EchoStar's distribution platform ("EchoStar Subscribers") in Washington, D.C.,
the fifty (50) United States of America and its territories, possessions and
commonwealths including without limitation Puerto Rico and the U.S. Virgin
Islands (the "Territory"). In addition, EchoStar shall have the right to copy
the Software Application for archival and back-up purposes and shall have the
right to use Network's trademarks and logos to promote and advertise the Service
to EchoStar Subscribers and potential new subscribers. The rights granted to
EchoStar hereunder shall include the right to offer the Service to EchoStar
Subscribers under such terms and conditions as EchoStar may determine in its
discretion. For purposes of this Agreement, the term "Affiliate" shall mean any
person or company that directly or indirectly or through one or more
intermediaries, controls or is controlled by, or is under common control with a
party to this Agreement; and for the purposes of this definition, the term
"Control" (including the words controlling or controlled by) shall mean the
power to direct or cause the direction of the management and policies of a
person or entity whether through the ownership of voting securities, by contract
or otherwise. EchoStar's distribution of the Service is intended to be received
only within the Territory, however Network understands and agrees that the
signal will spill over outside and beyond such geographic boundaries and agrees
that any such spillover, in and of itself, shall not constitute a breach of this
Agreement.
2. DEVELOPMENT OF THE APPLICATION SOFTWARE.
Network shall develop a unique version of its Application which is
compatible with and compliant to EchoStar's specifications (as such
specifications relate to Network and may be changed from time to time in
agreement with Network) (the "Developer's Welcome Kit"). Network and EchoStar
agree to meet and confer as soon as reasonably practicable following the
Effective Date and to negotiate in good faith with respect to a document which
sets forth technical and business specifications for the Application for each
line or model of set top box utilized by the Distribution System (the "Master
Plan Document"). For clarity, the parties agree and acknowledge that the Master
Plan Document shall include all material elements and specifications which are
required and/ or associated with the Application functioning on the Distribution
System, including without limitation all user interfaces, bandwidth usage,
technical capabilities, functional requirements, development actions, testing
procedures and deployment schedules. The Master Plan Document shall be subject
to the approval of both EchoStar and Network. The launch of the Application and
the deployment within each model of EchoStar's digital set top box receiver is
expressly contingent upon successful development and testing in accordance with
the Master Plan Document. For clarity, and notwithstanding EchoStar's duty to
negotiate in good faith with respect to the Master plan Document, the parties
agree and acknowledge that EchoStar shall not have any obligation to alter its
production schedule or bandwidth allocation processes. Network shall develop
that certain application software along with all application interfaces which
will be used to include the data stream for the Application as a part of the
Service (the "Application Software") (for clarity the term Application Software
shall include the defined term Software). All costs directly related to the
development, integration and delivery of the Application Software shall be the
sole responsibility of Network. After the Application has been deployed on the
Distribution System, if Network desires to make changes to the Application
Software, Network must submit such changes to EchoStar and EchoStar, in its sole
discretion, may either accept or reject Network's changes. EchoStar has
developed certain software, including, without limitation, any interfaces,
application development tools, application streamers, broadcast server
interfaces, advance database spooler interfaces, and any set top box application
software ("System Software"). As between EchoStar and Network, EchoStar shall
retain exclusive ownership of the System Software, along with all Intellectual
Property Rights associated with the System Software and all derivative works
thereof. Network agrees and acknowledges that any portion of the Service which
may be developed by EchoStar, including without limitation the System Software
and any Application Software interfaces shall, as between EchoStar and Network,
remain the sole and exclusive property of EchoStar. The parties hereby
acknowledge and agree that notwithstanding anything to the contrary contained
herein, EchoStar shall at no time be required to develop any portion of the
Service, including any changes to the System Software (with the exception of any
changes agreed to in the Master Plan Document). Except to the extent that the
System Software may make up some portion of the Software Application, as between
EchoStar and Network, Network shall retain exclusive ownership of all
Intellectual Property Rights to the Software Application.
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(b) Network shall provide EchoStar the Software Application source code
prior to launch of the Software Application for testing and approval. All
rights, title and interest, including intellectual property rights, in the
source code and software application belongs to Network. EchoStar shall not
acquire or claim any right or title to any of the foregoing by virtue of the
rights granted under this Agreement. EchoStar warrants that it shall not make
use of the said source code for any purpose other than that mentioned herein.
EchoStar further warrants that it shall during the Term and at all times
thereafter treat all of Network's intellectual property as strictly
confidential, and will not directly or indirectly disclose such intellectual
property or directly or indirectly use, or permit any others to use, any such
intellectual property for any purpose. Furthermore, EchoStar shall secure,
protect and preserve high security and confidentiality measures and procedures
in safekeeping the source code and all information related thereto.
(c) EchoStar agrees that the entire source code for the Software
Application together with all related documentation, as now exists or hereafter
becomes available, including but not limited to the then current version(s) of
the Software Application being used by EchoStar (the "Escrow Materials") will be
deposited, maintained and updated, at Network's expense, in escrow pursuant to
an Escrow Agreement to be negotiated by the parties. Network shall deposit the
Escrow Materials within fifteen (15) days of the Commercial launch of the
Software Application.
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3. DELIVERY AND DISTRIBUTION OF THE SERVICE.
(a) Network shall be solely responsible for delivery of the Software
Application to EchoStar's uplink facility in Cheyenne, Wyoming and/or EchoStar's
uplink facility in Gilbert, Arizona, or to such location as directed by EchoStar
from time to time in its sole judgment (collectively, the "Uplink Facility").
(b) EchoStar shall, at its sole cost and expense, transmit the Service
from the Uplink Facility to the Service Subscribers (as that term is defined in
Section 8(b) of this Agreement); provided however, that nothing herein shall
obligate EchoStar to distribute the Service in any manner which is now, or at
any time hereafter may in EchoStar's reasonable judgment be, prohibited under
applicable local, state or federal laws and regulations. EchoStar shall
determine how to package and/or sell the Service in its sole discretion.
(c) Software Application Integrity. . Network's failure to maintain the
Software Application that results in a reliability level of less than 99.975%
more than two (2) times in any three (3) month period during the Term shall be a
material breach of this Agreement. Any errors in the Service, including without
limitation the Software Application, shall be corrected within one (1) hour
after EchoStar notifies Network of such error. Any notice required under this
Section 3(c) may be given either orally, by electronic mail or in writing.
(d) EchoStar shall launch Network's Service within 3 months upon
acceptance and completion of all testing of the Software Application to the
complete satisfaction of EchoStar in its sole discretion.
(e) Technical Contact. Network agrees to designate one or more persons who
will be available on a twenty-four (24) hour per day, seven (7) day per week
basis to respond to and correct errors in the content or delivery of the Service
or the Data Stream. The designated contact person(s), together with telephone
numbers where they may be reached 24 hours per day, are listed on Attachment A.
Network further agrees to inform EchoStar in writing immediately upon a change
to any such information.
(f) Service Interruption. In the event the Service is interrupted due to
the fault or negligence of Network or any of its employees or agents, EchoStar
reserves the right to charge Network five dollars ($5.00) for each telephone
call received by EchoStar that is attributable to the interruption, provided
that EchoStar provides Network with a written report indicating the number of
actual calls directly associated with the interruption.
(g) Bandwidth Allocation. Network understands and agrees that EchoStar
shall have no obligation, at any time or for any reason, to provide bandwidth in
excess of five hundred thousand (500,000) bits per second.
4. PRICING.
The retail price for both commercial and single-family residential
subscriptions to the Service shall from time to time, be established by
EchoStar, in its sole discretion (the "Retail Price") in accordance with
Attachment C. However, in no case shall the Retail Price be less than one dollar
($1.00 US).
5. MARKETING.
(a) Network will use its best efforts to market and promote the Service.
EchoStar shall market and promote the Service in a substantially similar manner
as it markets and promotes other similar services, except where other
interactive service providers offer special promotional incentives to EchoStar.
Network agrees to permit EchoStar to use Network's trademarks to market the
Service to customers.
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(b) In no event will Network or any of its Affiliates directly or
indirectly use any logos, trademarks, service marks, trade names or other
information in any form now or hereafter owned, acquired or used by EchoStar
and/or any of its Affiliates to identify itself or themselves or any of its or
their products and/or services ("EchoStar Identifying Information") in any
advertising or promotional materials without the express written consent of
EchoStar.
(c) In no event will Network or any of its Affiliates directly or
indirectly use any EchoStar Identifying Information in any press release or
other information intended for the press, trade publications or websites, or a
public audience in any manner (the "Press Release") issued by Network and/or its
Affiliates without EchoStar's prior written approval, which approval EchoStar
may withhold in its sole discretion. Network shall provide to EchoStar, at least
twenty one (21) days prior to release and in exactly the form intended to be
publicly released by Network and/or any of its Affiliates, any and all Press
Releases which directly or indirectly use any EchoStar Identifying Information.
EchoStar may reject and prohibit Network and its Affiliates, from publicly
releasing such Press Releases, for any reason or no reason in its sole and
absolute discretion. In the event that EchoStar does not grant written approval
of a press release within five (5) business days after receiving it from
Network, the Press Release submitted shall be deemed rejected and Network, and
its Affiliates shall be prohibited from publicly releasing it. In the event that
Network and/or any of its Affiliates: (i) directly or indirectly uses any
EchoStar Identifying Information in any press release issued by Network and/or
its Affiliates without EchoStar's prior written approval; or (ii) fail to
provide EchoStar with a proposed press release at least twenty one (21) days
prior to release, EchoStar shall be entitled to immediately terminate this
Agreement by providing written notice to Network to that effect, and Network
shall forfeit all revenue accrued during the calendar month in which such breach
occurs. Any such termination shall be without prejudice to any other rights or
remedies that EchoStar might have under this Agreement, at law, in equity or
otherwise.
6. SALES.
(a) Sales. EchoStar may collect revenues for the Service through the sale
of advertising, sponsorships, and subscriptions (the "Service Revenue"). Net
Service Revenue shall mean all Service Revenue generated by the Service, less
local taxes and direct costs incurred by EchoStar (including without limitation
prizes, awards, commercially reasonable costs associated with third party
advertising agency commissions, uncollected funds and adjustments necessitated
by refunds, credits and write offs for bad debt). The parties agree that the
Network shall receive [ ] percent [( %)] of all Net Service Revenue and EchoStar
shall retain [ ] percent [( %)] of all Net Service Revenue, respectively.
(b) Subscriber Sales Administration. EchoStar shall be solely responsible
for receiving, collecting and processing subscriptions for the Service from
EchoStar Subscribers, if any, including billing and collecting payment from
EchoStar Subscribers, and the authorization and de-authorization of receivers to
receive the Service. In no event shall Network collect Service Revenues from
EchoStar Subscribers. Should Network receive any Service Revenues directly from
EchoStar Subscribers, Network shall promptly pay such sums forward to EchoStar,
it being expressly understood and agreed that Network shall not be entitled to
retain any such sums as its own.
(c) Advertising Sales Administration. EchoStar shall be responsible for
receiving and processing orders for the Service, billing and collecting payment,
if any, from advertisers or advertising agencies. Network's advertising
placements within the Service will adhere to EchoStar's Interactive Advertising
guidelines as defined in Attachment B (which is incorporated herein by this
reference).
(d) Prize Administration. EchoStar shall be responsible for the
administration and presentment of prize money and/or non-monetary prizes to
eligible winning players. The parties agree that EchoStar shall be entitled to
withhold not more than twenty percent (20%) of the collected gross Service
Revenues provided that such Service Revenues shall be allocated solely for the
funding of prizes as set forth in Attachment A.
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7. TERM AND TERMINATION.
(a) Unless earlier terminated pursuant to the terms of this Agreement,
this Agreement shall commence on the later of either the date first written
above or the date the Service is first delivered by EchoStar to Service
Subscribers on a commercial (i.e., not beta or in any form of test group) basis
("Effective Date") and shall continue for one (1) year(s) (the "Term"). EchoStar
shall have the right to renew this Agreement in two consecutive one year terms
each of which for the purposes of this Agreement shall be deemed a part of the
Term.
(b) Either party may terminate this Agreement upon the occurrence of any
of the following events of default, provided that such default is not cured
within forty-five (45) days: (i) the other party has made any material
misrepresentation; (ii) the other party is in breach or default of any
representation, warranty, covenant, duty or obligation hereunder. This Agreement
shall terminate automatically upon the occurrence of any of the following
events: (i) the other party becomes insolvent or seeks relief under any
insolvency statute, is placed in receivership or liquidation, or makes any
assignment for the benefit of creditors; (ii) the other party, for more than
twenty (20) consecutive days, fails to maintain operations as a going business;
or (iii) the other party falsifies any documents, records or reports required
hereunder or engages in or commits any fraud or illegal action in connection
with this Agreement. The right of a party to terminate this Agreement and any
automatic termination of this Agreement shall be in addition to any other rights
or remedies either party may have under this Agreement, at law, in equity or
otherwise. In addition to the foregoing termination provision, if Network's
Software Application fails to perform in accordance with Section 3(c) of this
Agreement, EchoStar shall allow Network to cure such failure within 10 business
days. In the event that Network has not rectified such failure, EchoStar shall
have the right to suspend its performance hereunder and terminate this Agreement
in its sole and exclusive discretion. Upon termination of this agreement,
EchoStar, shall cease any use, distribution or solicitation with respect to the
Service governed by this Agreement. Further, it shall return all confidential
information including source code provided to it in trust and all confidential
information related thereto, and the Software Application of Network within 14
days of termination and upon written notice from Network.
(c) EchoStar may terminate this Agreement immediately upon notice to
Network: (i) in the event that governmental authority or regulation prohibits
distribution of the Service in the Territory; or (ii) if EchoStar determines, in
its sole discretion, that continued distribution of the Service by EchoStar is
likely to result in civil or criminal liability, fines, or other similar
sanctions or penalties.
8. PAYMENTS; REPORTS; AUDIT RIGHTS.
(a) Payments and Due Dates. Network's portion of the Net Service Revenue
for any Reporting Period shall be paid by EchoStar not later than sixty (60)
days after the end of the calendar month during which the Reporting Period ends.
A "Reporting Period" refers to that portion of the calendar month or portions of
two (2) calendar months as applicable which represents EchoStar's billing cycle
as and determined by EchoStar from time to time in its sole discretion (the
Reporting Period as of the Effective Date is from the twenty-first (21st) day of
each calendar month and the twentieth (20th) of the subsequent calendar month).
(b) EchoStar Subscriber Reports. Within sixty (60) days after the end of
the applicable calendar month in which the relevant Reporting Period ends,
EchoStar shall supply to Network the total number of EchoStar Subscribers who
are authorized to receive the Service by EchoStar ("Service Subscribers") as of
the last day of the relevant Reporting Period and the immediately preceding
Reporting Period. Network acknowledges and agrees that all information provided
by EchoStar to Network under this Section 8 is deemed proprietary to EchoStar,
and Network represents warrants and agrees that it will treat all such
information as Confidential Information under Section 12 of this Agreement.
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(c) Financial Reports. EchoStar will keep materially accurate books of
accounts and records relating directly to the number of Service Subscribers
during any given Reporting Period and payments made to Network. All such books
and records shall be maintained by EchoStar during the Term and for one (1) year
following the expiration of the Term. Within sixty (60) days after the end of
the applicable calendar month in which the relevant Reporting Period ends,
EchoStar shall supply to Network the following information:
(i) the total amount of advertising revenue collected by EchoStar
from advertising on the Service;
(ii) the total amount of the sponsorship revenue collected by
EchoStar from sponsorships of the Service;
(iii) the total amount of the Subscriber Revenues.
(d) During the Term and for a period of one (1) year thereafter, Network
shall have the right to audit the books and records maintained by EchoStar in
accordance with Section 8(c) of this Agreement and EchoStar shall have the right
to audit Network's books and records which relate to Network's performance under
Section 13 of this Agreement.
(e) Any such audit shall be conducted in a manner which is not
unreasonably disruptive to either party's normal business operations. Each party
shall make applicable books, records, personnel and office available for such
audit during normal business hours at their respective principal place of
business. The parties agree that a party may conduct an audit only once in any
twelve (12)-month period and no party shall be entitled to audit for any
particular time period more than once (unless, in each instance, specific
follow-up audits are required because of a bona fide dispute). A party wishing
to conduct an audit (the "Auditor") shall provide the party being audited (the
"Auditee") with no less than thirty (30) days advance written notice of its
desire to perform an audit. Any such audit shall be at the expense of the
Auditor unless such audit discloses an underpayment by the Auditee in excess of
five percent (5%), in which case the Auditee shall reimburse the Auditor for
such expenses. If the audit discloses any underpayment by the Auditee and the
Auditor does not have a bona fide dispute with such allegation, such party shall
make payment to the auditor of the full amount of such underpayment within
forty-five (45) days of the day such Auditee received written notice of such
underpayment. Any claim relating to an audit must be made within four (4) months
of date the auditor leaves the Auditee's offices, otherwise the Auditor will be
deemed to have waived its right, whether known or unknown, with respect to the
subject matter of the audit.
(i) Any audit conducted in accordance with the foregoing paragraph shall
be conducted by an independent nationally-recognized certified public
accounting firm approved by the Auditee (the "Independent Auditor") who
shall execute a non-disclosure agreement in a form reasonably acceptable
to the party being audited, provided that EchoStar shall be entitled to
conduct an audit using its own personnel so long as such personnel are
generally used by EchoStar to conduct such audits. All materials created
by the Independent Auditor with respect to an audit shall: (A) be returned
to the Auditee; (B) remain the property of the Auditee; and (C) be subject
at all times to the confidentiality provisions hereof.
(ii) In order to constitute a valid and enforceable audit hereunder, the
Independent Auditor shall provide to the Auditee two (2) copies of all
audit reports and supporting documentation within sixty (60) days of its
completion of such audit, which shall occur no later than ninety (90) days
after leaving Auditee's premises.
9. REPRESENTATIONS AND WARRANTIES.
(a) Mutual Representations, Warranties and Covenants. Each party
represents and warrants to the other that (i) it is duly organized, validly
existing and in good standing under the laws of the state under which it is
organized, (ii) it has the power and authority to enter into this Agreement and
to perform fully its obligations hereunder; (iii) it is under no contractual or
other legal obligation that shall in any way interfere with its full, prompt and
complete performance hereunder; (iv) the individual executing this Agreement on
its behalf has the authority to do so; (v) it presently has and will continue to
have at all times during the Term all rights necessary to grant to the other
party the right to use it's trademarks, service marks, logos and related trade
usages as permitted hereunder; and (vi) the obligations created by this
Agreement, insofar as they purport to be binding on it, constitute legal, valid
and binding obligations enforceable in accordance with their terms.
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(b) Representations, Warranties and Covenants as to Content. Network
represents, warrants and covenants to EchoStar that: (i) Network presently has
and will continue to have at all times during the Term all rights necessary to
grant EchoStar the rights contracted for by EchoStar under this Agreement,
including without limitation the rights to transmit, transport and otherwise
distribute the Service and the rights to activate and deactivate subscriptions
to the Service; (ii) Network shall assume responsibility for the payment of, and
shall pay as and when due, any and all copyright, royalty or other performance
rights payments through to the viewer, including without limitation payments to
ASCAP, BMI, SESAC and any other applicable music performance society or other
applicable entity (collectively referred to as the "Performance Right Fees")
with respect to all content included as part of the Service; (iii) the Service
is an original work of authorship, was not copied or adapted, shall not contain
any material which violates or infringes any copyright, right of privacy or
literary or dramatic right of any person or entity; and (iv) Network presently
is and will remain at all times during the Term in full compliance with all
applicable local, state and federal laws, rules and regulations.
(c) The representations, warranties and covenants contained in this
Section 9 shall continue throughout the Term and the indemnities shall survive
the termination of this Agreement, regardless of the reason for such
termination.
10. INDEMNIFICATION.
(a) Network shall indemnify and hold harmless EchoStar, its Affiliates,
directors, officers, members, employees and agents (collectively, the "EchoStar
Indemnitees") from and against any and all claims, damages, liabilities, costs
and expenses (including reasonable attorneys' fees) incurred in connection with
any claim against any of the EchoStar Indemnities arising out of: (i) the breach
or default of any of Network's representations, warranties, covenants,
obligations or duties herein; (ii) an allegation that all or any part of the
Software Application violates or infringes any copyright, patent, right of
privacy or literary or dramatic right of any person or entity; and/or (iii)
Network's advertising and marketing of the Service.
(b) In furtherance of the foregoing duty, EchoStar shall: (i) notify
Network of any claim for indemnification in writing within a reasonable period
of time; (ii) allow network to control the defense of such claim and of any
negotiations regarding settlement of such claim (provided that: (A) EchoStar may
be represented by counsel of its choosing at the sole and exclusive expense of
Network; (B) if, in EchoStar's sole and exclusive determination, Network is not
actively pursuing the defense of such claim EchoStar may assume such defense
using counsel of its choosing at the sole cost and expense of Network; and (C)
Network may not settle any such claim which would require EchoStar to do or
refrain from any act, other than the payment of money damages.); (iii) give
Network all reasonable assistance, information and authority to perform the
above.
11. NOTICES. Except as otherwise expressly set forth herein, any notices to be
given pursuant to this Agreement ("Notice") shall be in writing, signed by the
party issuing them, and sent by: (i) facsimile transmission; (ii) first class
certified mail, postage prepaid; or (iii) overnight courier service, charges
prepaid, to the party to be notified, addressed to such party at the following
address, or sent by facsimile to the following fax number, or such other address
or fax number as such party may have substituted by notice given to the others
in accordance with this Section 11. The sending of such notice with confirmation
or receipt thereof (in the case of facsimile transmission) or receipt of such
notice (in the case of delivery by certified mail or by overnight courier
service) shall constitute the giving thereof:
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If to Network: Zone4Play Inc. with copy to: Zone4Play (Israel) Ltd
000 Xxxxx Xxxx, Xxxxx 000 0X Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000 Xxx Xxxx, 00000, Xxxxxx
Attn: Xxxx Xxxxxx
Fax No.: 000 000 0 000 0000
If to EchoStar: EchoStar Satellite L.L.C. with a copy to: General Counsel
0000 Xxxxx Xxxxxxxx Xxxx. Fax No.: (000) 000-0000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Executive Vice President of
Programming
Fax No.: (000) 000-0000
12. CONFIDENTIALITY.
(a) Each party agrees that they and their employees, representatives and
agents have maintained and will maintain, in confidence, the terms and
conditions, including the existence and duration, of this Agreement; as well as
all data, summaries, reports or information of all kinds, whether oral or
written, acquired or devised or developed in any manner from the disclosing
party's personnel or files, and that they have not and will not reveal the same
to any persons not employed by the disclosing party except: (i) at the written
direction of the disclosing party; (ii) to the extent necessary to comply with a
valid law, rule, regulation, order of a court of competent jurisdiction, or
requirement of a government agency, in which event the disclosing party shall so
notify the other party as promptly as practicable (and, if possible, prior to
making any disclosure) and shall seek confidential treatment of such
information; (iii) in connection with any arbitration proceeding; (iv) as part
of its normal reporting or review procedure to its partners, parent company, its
auditors, its attorneys and its investment bankers, and such parent company,
auditors, attorneys and investment bankers agree to be bound by the provisions
of this Section 12; and (v) in order to enforce any of its rights pursuant to
this Agreement.
(b) Network acknowledges and agrees that any and all EchoStar Subscribers,
including those who receive the Service, shall be deemed customers of EchoStar.
Network further acknowledges and agrees that the names, addresses, profiles or
other identifying information of such subscribers ("Subscriber Information")
are, as between EchoStar and Network, the sole and exclusive property of
EchoStar. During the Term and at all times thereafter, Network agrees that it
will treat all Subscriber Information strictly confidential, and will not
directly or indirectly disclose any Subscriber Information or directly or
indirectly use, or permit any others to use, any Subscriber Information for any
purpose. In the event that any third party comes into possession of Subscriber
Information, either directly or indirectly, resulting from activities
contemplated in this Agreement (e.g., direct response product sales or
advertising), Network, is obligated to have previously obtained a written
confidentiality agreement from such third party covering and safeguarding the
confidentiality of the Subscriber Information upon terms no less restrictive
than those contained in this paragraph.
(c) Each party agrees that a breach of these obligations of
confidentiality will result in the substantial likelihood of irreparable harm
and injury to the other party, for which monetary damages alone would be an
inadequate remedy, and which damages are difficult to accurately measure.
Accordingly, each party agrees that the other party shall have the right, in
addition to any other remedies available, to obtain immediate injunctive relief
as well as other equitable relief allowed by the federal and state courts. The
foregoing remedy of injunctive relief is agreed to without prejudice to the
other party's to exercise any other rights and remedies it may have at law, in
equity or otherwise, including without limitation, the right to terminate this
Agreement and seek damages or other legal or equitable relief.
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13. MOST FAVORED NATIONS.
Network agrees that if it grants or has granted (including without
limitation, any grant by Network's acquiescence in a third party's exercise of
rights not expressly granted to it), to any third party: (A) a lower net
effective rate per Service Subscriber for the Services than EchoStar is paying
hereunder (whether calculated on the basis of a packaged or "tiered" rate or on
an stand alone or "a-xx-xxxxx" basis), (B) any marketing or advertising support
or reimbursements, launch support or reimbursements, free or discounted
marketing materials or any other support, credits, reimbursements, rebates,
contributions, adjustments or incentives related to the marketing of the
Services, whether given directly or indirectly to such third party grantee, or
(C) any other economic or non-economic term, provision, covenant or
consideration, that are or is more favorable to such third party grantee than
EchoStar is receiving hereunder ((A), (B) and (C) above, individually and
collectively, shall be referred to herein as "More Favorable Provision(s)"),
Network will promptly offer such More Favorable Provisions to EchoStar both
orally and in writing for the same amount of time that such More Favorable
Provision is, was, or will be available to such third party. A More Favorable
Provision shall include any pertinent term, provision, covenant or
consideration, regardless of whether the term, provision, covenant or
consideration concerning the subject matter of such More Favorable Provision
whether such term, provision, covenant or consideration relates to such third
party's entire subscriber base or less than the entire base (e.g. a More
Favorable Provision relating to a "test" or "sample" group of subscribers). For
purposes of this paragraph, the calculation of net effective rate shall include
all economic and non-economic terms and provisions of any agreement that involve
financial or other outlays (excluding contingent liabilities) by either party
for the benefit of the other or in direct or indirect connection with the rates
for the Service, or that involve direct or indirect consideration paid by either
party to the other including without limitation rebates, investments, discounts,
credits, adjustments of any kind, actual per subscriber rates, volume or other
discounts, ad buys, reimbursements, channel position fees, pre-payment of loans,
deductions for uncollected accounts, incentives, cash payments (whether
conditional or not), sales or leases of equipment, studio facility discounts,
payment terms and other financing terms. In determining net effective rates, the
parties agree and acknowledge that neither the number of subscribers to the
Service nor the number of subscribers availed of the Service shall be relevant.
For clarity, the parties agree and acknowledge that EchoStar shall not be
required to perform any obligation, term and/or condition, regardless of whether
any third party grantee of a the More Favorable Provision has agreed to perform
the obligation, term and/or condition in order to receive such More Favorable
Provision(s).
14. MISCELLANEOUS.
(a) Attorney Fees. In the event of any suit or action to enforce or
interpret this Agreement or any provision thereof, the prevailing party shall be
entitled to recover its costs, expenses and reasonable attorney fees, both at
trial and on appeal, in addition to all other sums allowed by law.
(b) Successor Interests; Assignment. This Agreement is binding upon the
heirs, legal representatives, successors and assigns of EchoStar and Network.
Neither party may assign or otherwise transfer any of its rights or obligations
under this Agreement without the prior express written consent of the other
party to this Agreement, except that EchoStar may assign this Agreement in whole
or in part to an Affiliate at any time without the consent of Network. In
furtherance and without limitation on the foregoing, in the event that any
person or entity who, as of the date first written above, did not possess,
directly or indirectly, the power to direct or cause the direction of management
or policies of either party, whether by virtue of the ownership of voting stock,
by contract or otherwise, later comes into possession of such power, that will
be considered an assignment requiring the other party's consent hereunder.
Notwithstanding anything to the contrary in the foregoing, Network may not make
any assignment of its rights or obligations under this Agreement to a competitor
of Affiliate in the multi-channel video programming distribution business
without prior written consent of Affiliate. Any assignment or other transfer
prohibited herein shall be null and void.
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(c) Limitation of Liability. IN NO EVENT SHALL ECHOSTAR OR ANY OF ITS
AFFILIATES BE LIABLE FOR ANY EXEMPLARY, SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES TO NETWORK. IN NO EVENT SHALL ANY PROJECTIONS OR FORECASTS MADE BY
ECHOSTAR BE BINDING AS COMMITMENTS OR PROMISES. IN NO EVENT SHALL THE AGGREGATE
LIABILITY OF ECHOSTAR AND ITS AFFILIATES IN CONNECTION WITH THIS AGREEMENT
EXCEED THE NET REVENUES FROM THE SERVICES ACTUALLY PAID TO NETWORK BY AFFILIATE.
(d) Choice of Law; Consent to Jurisdiction. The relationship between the
parties and their present and future affiliates, including without limitation
all disputes and claims, whether arising in contract, tort, or under statute,
shall be governed by and construed in accordance with the laws of the State of
Colorado, applicable to contracts to be made and performed entirely within the
State of Colorado by residents of the State of Colorado, without giving any
effect to its conflict of law provisions. The parties and their present and
future Affiliates consent to the in personam jurisdiction of the United States
District Court for the District of Colorado for the purposes set forth in this
Section 14(d) and waive, fully and completely, any right to dismiss and/or
transfer any action pursuant to 28 U.S.C. ss.ss.1404 or 1406 (or any successor
statute). In the event the United States District Court for the District of
Colorado does not have subject matter jurisdiction over any such matter, then
such matter shall be litigated solely and exclusively before the appropriate
state court of competent jurisdiction located in Arapahoe County, State of
Colorado.
In addition, Network agrees to waive service of process if requested to do
so in writing by EchoStar and such request to waive service may be delivered by
any of the following: facsimile, first class mail, FedEx, International Mail, or
similar manner of transmission
(e) Force Majeure. Notwithstanding anything to the contrary in this
Agreement, neither party shall be liable to the other for failure to fulfill its
obligations hereunder if such failure is caused by or arises out of an act of
God or other reason beyond the reasonable control of the party whose performance
is prevented during the period of such occurrence (a "Force Majeure Event")
including, without limitation, technical failure (i.e. the failure of all or
part of a satellite or any uplinking or ground turnaround station equipment). If
the Service is interrupted or discontinued as a result of a Force Majeure Event,
EchoStar shall have the right, immediately, to insert programming of its choice
in place of the Service until the Service is fully operational again.
(f) Waiver. The failure of either party at any time to enforce any right
or remedy available to it under this Agreement or otherwise with respect to any
breach or failure by the other party shall not be construed to be a waiver of
such right or remedy with respect to any other breach or failure by the other
party.
(g) Severability. The parties agree that each provision of this Agreement
shall be construed as separable and divisible from every other provision and
that the enforceability of any one provision shall not limit the enforceability,
in whole or in part, of any other provision hereof. The invalidation or
unenforceability of any of the provision contained in this Agreement shall in no
way affect any of the other provisions hereof or the application thereof and the
same shall remain in full force and effect. In the event that a court of
competent jurisdiction determines that any term or provision herein, or the
application thereof to any person, entity, or circumstance, shall to any extent
be invalid or unenforceable, it shall be construed by limiting and reducing it
so as to be enforceable under then applicable law.
(h) Entire Agreement; Amendment; Captions; and Construction. This
Agreement (including any schedule or attachment hereto) contains the entire
understanding of the parties with respect to the subject matter hereof, and
supersedes any and all prior or contemporaneous agreements, representations or
undertakings between the parties with respect to the subject matter hereof. No
waiver, modification or amendment of any of the terms or conditions of this
Agreement shall be effective unless memorialized in a writing that has been
signed by both parties hereto. The captions used herein are for reference
purposes only and shall not be used in the interpretation of this Agreement.
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(i) Remedies Cumulative. It is agreed that the rights and remedies herein
provided in case of default or breach by either party of this Agreement are
cumulative and shall not affect in any manner any other remedies that the other
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.
(j) Counterparts. This Agreement may be executed in one or more identical
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of the date first set forth above.
NETWORK ECHOSTAR SATELLITE L.L.C.
/s/ Xxxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------- -----------------------------------
Name: Xxxxxx Xxxxxx Xxxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer Executive Vice President of Programming
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ATTACHMENT A
INTERACTIVE APPLICATION PARAMETERS
A. APPLICATION DEFINITION: The Bingo Trivia game begins with the random
creation of a BINGO card (five squares containing random numbers in each
column under the heading BINGO). A green square signifies a covered square
much like a non-virtual game of BINGO. The game randomly generates
additional squares - shaded in green with the remaining squares shaded in
orange. An orange square signifies an open square which the Player needs
to cover to create a BINGO opportunity. The remaining squares shaded in
orange may be converted to a green square by selecting the particular
square and correctly answering the trivia question associated with the
open square. By covering certain squares the player can achieve a BINGO. A
BINGO is achieved every time a vertical, horizontal or diagonal line
contains all squares shaded in green. A BINGO is clearly indicated by the
game. Each time a BINGO is achieved Bingo Trivia credits the player with
1,000 points. To convert an open square (a square that is shaded in
orange) to a covered square (a square that is shaded green) the player has
to select the open square of his choice. The trivia question associated
with the selected open square is revealed. The player has 20 seconds to
select the correct answer. If the player is right the orange shaded square
will be replaced by a green square, indicating a covered square. If this
creates a BINGO, the game will indicate this and credit the player with
2,000 points. If the answer of the trivia question is incorrect, the open
square will remain open and the user receives one yellow card. Three wrong
answers before achieving a Full Card end the game. The player can simply
select the "Play Again" button. If the player answers all of the trivia
questions correctly before getting three yellow cards he will achieve a
Full Card with a Congratulations! notice "Not only will you receive 2,000
points for each BINGO achieved, Bingo Trivia will credit you with 15,000
bonus points".
B. TECHNICAL CONTACT INFORMATION:
Contact Name Xxxxx Xxxxxxxxx
Phone Number 000 000 0 000 0000
Pager/Cell Number 000 000 00 000 000
E-mail Address Xxxxx@xxxx0xxxx.xxx
Alt. Contact Name Xxxxxxx Xxxxxxx
Phone Number 000 000 0 000 0000
Pager/Cell Number 000 000 00 000 000
E-mail Address Xxxxxxx@xxxx0xxxx.xxx
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ATTACHMENT B
ECHOSTAR ADVERTISING GUIDELINES
a. EchoStar will retain one hundred percent (100%) of the advertising
inventory on the Service. The Network may sell advertising inventory
provided that any such sales shall be pursuant to a direct contractual
relationship between EchoStar and advertisers and subject to approval and
acceptance by EchoStar, in EchoStar's sole and exclusive discretion.
b. All direct response transactions conducted by a Subscriber ("Subscriber
Information Requests") through the Service must pass through EchoStar's
designated transaction engine.
c. Network must include the appropriate data or phone numbers for Subscriber
Information Requests to pass through EchoStar's transaction engine.
d. EchoStar reserves the right to charge Network a transaction fee for each
Subscriber Information Request processed and forwarded to the content
provider's designated advertiser.
e. Bandwidth allocated by EchoStar to Network for its Service includes that
allocated for Network's advertisement placement.
f. Additional bandwidth required by Network for an active banner that click's
through to an advertiser's Software Application ("Advertising
Application") will be discussed separately.
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