Exhibit 10.7
THIS NON-EXCLUSIVE DISTRIBUTION AGREEMENT (the "Agreement") is entered into on
this / 4th day of Jan 1999.
BETWEEN:
(1) GULF DTH PRODUCTION of Xxxxxx Xxxxx, 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxx. X0X
ODS ("Gulf"); and
(2) OnmiVision Maroc SARL located at 00, Xxxxxx Xxxxx Xxx Xxxx, Xxxxx, Xxxxxxx,
(the "Dealer")
WHEREAS:
(A) Gulf is engaged in the business broadcasting international studios movies,
programmes and services, buying rights and rebeaming such programs through
closed T.V. circuits and reselling these programmes to the public or
establishments such as hotels and companies in return for fixed
subscription.
(B) The Dealer desires to obtain the right to distribute, on a non-exclusive
basis, all such products and services that may be provided by Gulf, upon
the terms and subject to the conditions set out below.
1. DEFINITIONS
In this Agreement the following expressions shall have the following meanings
unless the context otherwise requires:
"Advance Payment Period" shall mean 3, 6 and 12 months for the "Showtime"
package.
"Annual Churn" (in percentage) shall mean the number of paying/non-promotional
subscriptions that expire during the respective year and do not renew within 2
(two) months from the date of expiration divided by the total number of paying
non-promotional / subscribers expired contracts.
"CA Module" or "CAM" shall mean Irdeto's proprietary conditional access module
for controlling access to video and audio signals, incorporating a portion of
the Irdeto Technology, which will
function in conjunction with the IRDs.
"Delivery Date" shall mean any date, which is from time to time specified in the
attached Schedule Three for the supply and/or purchase of IRDs and Smart Cards
"DTH Subscriber" shall mean a person in the Territory who subscribes to and is
equipped and entitled to receive and view either or both of the Programme
Packages in unencrypted format on a direct-to-home basis at the place of
reception
"IRD" shall mean a digital integrated receiver decoder or similar device
manufactured by the Manufacturer which incorporates the CA Module and the Irdeto
Technology and which is used by a DTH Subscriber in conjunction with a Smart
Card for the purpose of decrypting a video and/or audio signal after its
encryption using the Irdeto Technology
"Iredto" shall mean Irdeto BV, a company incorporated in the Netherlands
"Irdeto Technology" shall mean the conditional access and related compressed
digital pay television technology proprietary to Irdeto, comprising, inter alia,
certain controlled components for use in digital broadcasting, over all
distribution delivery systems
"LNB" shall mean Low Noise Block converters as approved and authorised by Gulf
or MCME.
"Manufacturer" shall mean the manufacturer whose product has been approved and
authorised by either Gulf or MCME.
"MCME" shall mean MultiChoice Middle East Inc or other SMS provider at Gulf s
discretion.
"Programme Packages" shall mean the "Showtime" package of programme services
(Full Bouquet and Mini Bouquet) which shall initially comprise the programme
services described in Annex A.
"Purchase Order" shall mean 250 IRDs and 250 Smart Cards, or as agreed to by the
parties.
"SC Unit Price" shall mean the price determined in the attached Schedule Three.
"Smart Card" shall mean a card, token or other device incorporating a
microprocessor chip which
contains Irdeto's proprietary conditional access application, or such
alternative product as may be specified by Irdeto (which is contained in a
module embedded in the card, token or device) and which is designed, when
inserted into an IRD, to control access to the signal of a television or radio
programme or service encrypted by means of the Irdeto Technology and which
enables the DTH Subscriber to view and/or listen to such programme or service as
the case may be, in unencrypted format
"Term" shall mean the period commencing upon the Commencement Date and ending on
the earlier of (a) the final day of the period of five (5) years commencing upon
the date of the first Delivery Notice given by Gulf pursuant to this Agreement
and (b) the date of any earlier termination of this Agreement. Should the Dealer
request an extension of this agreement for a further five (5) years, Gulf agrees
to not unreasonably withhold such approval of the extension.
2. APPOINTMENT
2.1 Gulf hereby appoints the Dealer as a distributor, and the Dealer accepts
such appointment, to market, sell and distribute within the Territory as defined
in Schedule Two, and during the Term the Products listed in the attached
Schedule One:
2.2 The Dealer agrees that it shall not serve as the agent, sell, promote or
co-operate with any other DTH pay TV channel, package or service without the
express written consent of Gulf. Nothing herein shall prohibit the Dealer from
owning or operating MMDS TV operations.
2.3 Gulf warrants that during the term of this agreement, it shall not appoint
any other dealer, distributor or agent at terms more favourable as those granted
to the Dealer based upon performance.
2.4 The appointment of the Dealer hereunder shall apply only to the sale and
lease of the Products to DTH Subscribers. The appointment shall not apply to or
authorise any such sale or lease to any other type or category of subscriber or
any owner or occupier of any commercial premises or place of multiple occupation
(including but not limited to SMATV, Multiple Dwelling Units (MUDS) or hotels)
unless otherwise stated in the attached Schedule Five. No redistribution of the
Product shall be permitted (included but not limited to MMDS or CATV). Nothing
contained herein shall prohibit the viewing of the Product in Dealer showrooms
approved by Gulf for the explicit purpose of selling the Product.
2.5 The Dealer shall be entitled to appoint retailers and/or retail outlets
and/or dealers in the Territory as sub-distributors, provided that:
(A) any such appointment shall not relieve the Dealer of its obligations under
this Agreement; and
(B) the Dealer shall require all such sub-distributors to comply with the
provisions of this Agreement (including but not limited to Clauses 6 and 7)
which are applicable to them as if such sub-distributors were parties to
this Agreement; and
(C) the Dealer shall within 14 days after the appointment of each and every
such sub distributor, notify Gulf of the full name and address of such
sub-distributor. Until such notification no sub-distributor is authorised
to distribute or act as distributor of the Products.
3. PURCHASE OF IRDs
The Dealer shall purchase during the Term at the price per IRD's specified in
Clause 1 (the "IRD Unit Price") through Gulf under terms and conditions
specified in the attached Schedule Three upon the following basis;
3.1 not later than fourteen (14) days prior to each Delivery Date, Gulf shall
notify the Dealer in writing (the "IRD Delivery Notice") that Gulf is ready and
able to deliver to the Dealer a number of IRDs which shall, subject to
availability, be specified in such Delivery Notice and consistent with the
contents of Schedule Three;
3.2 within sixty (60) days of such Delivery Date, the Dealer shall pay to Gulf a
sum equal to the IRD Unit Price (currently US$ 335) multiplied by the number of
IRDs specified in such Delivery Notice. If such IRDs are sold to or are in the
possession of a sub-distribut ors or the end consumer, payment shall be made at
the time of sale or movement from the Dealer's storage area to
sub-distributor's;
3.3 in such other quantities and at such other times as may be necessary in
order to ensure that IRDs are available when required by actual or potential DTH
Subscribers.
Upon delivery of any IRD to the Dealer under this Clause, all risks related to
that IRD shall immediately pass to the Dealer.
4. LEASING SCHEME
For purpose of leasing IRDs, Smart Cards, CAMs and LNBs to DTH subscribers, the
Dealer shall enter into a leasing scheme upon the following basis:
4.1 in accordance with Clause 8.4, IRDs, Smart Cards, CAMs and LN13s (the
"Hardware") shall remain at all times the property of Gulf. The Dealer shall
remain liable at all times for the safe upkeeping of the Hardware including but
not limited to proper storage, providing for all necessary safety measures,
subscribing in a full insurance policy covering the Hardware;
4.2 the Dealer shall remain responsible for collection and payment of the
subscription and lease charges, to be paid by DTH Subscribers, to Gulf. If
defaults are not notified to Gulf on the 7th of every month (for monthly payment
scheme), the Dealer shall be fully liable to Gulf for all such payments;
4.3 in case of default as in Clause 4.2, the Dealer shall take all responsible
steps necessary to retrieve the Hardware from DTH Subscribers. The Dealer shall
keep Gulf informed of any such defaults;
4.4 the Dealer shall be entitled to a commission calculated only on the software
price not including any taxes or fees. Such software price shall be the
applicable programming charges for the same customer contract period if such a
sale were not to include the lease of any hardware. This commission shall not be
calculated on the total price;
4.5 at the end of every month, the Dealer shall inform Gulf of the amount of the
leasing Hardware available at the Dealers locations. Any discrepancy shall
immediately be notified to Gulf; and Gulf will be compensated for such a
discrepancy if it is not resolved within 15 days;
4.6 Gulf shall only activate requests duly completed on "consumer subscription
contracts/agreements" supplied to the Dealer by Gulf;
4.7 Gulf reserves the right to audit IRD stocks at any time with 2 days notice;
4.8 Gulf shall reimburse dealer for direct and out of pocket costs and expenses,
including but not limited to storage, transportation, customs and insurance of
the hardware.
5. PURCHASE OF SMART CARDS
The Dealer hereby agrees to purchase during the Term at the price per Smart Card
specified in Clause 1 (the "SC Unit Price") and in accordance with Schedule
Three upon the following basis:
5.1 SEQARABESEQARABE not later than fourteen (14) days prior to each Delivery
Date, Gulf shall notify the Dealer in writing (the "Delivery Notice") that Gulf
is ready and able to deliver to the Dealer a number of Smart Cards which shall,
subject to availability, be specified in such Delivery Notice and consistent
with the contents of Schedule Three;
SEQARABESEQARABE
5.2 within sixty (60) days of such Delivery Date, the Dealer shall pay to Gulf a
sum equal to the SC Unit Price currently (US$ 15.00) multiplied by the number of
Smart Cards specified in such Delivery Notice. If such Smart Cards are purchased
without IRDs payment to Gulf shall be required prior to the Delivery Date by
Gulf. If such Smart Cards are sold to or are in the possession of a
sub-distributors or the end consumer, payment shall be made at the time of sale
or movement from the Dealer's storage area to sub-distributor's;
Upon delivery of any Smart Card to the Dealer under this Clause, all risks
related to that Smart Card shall immediately pass to the Dealer.
6. OBLIGATIONS OF THE DEALER
The Dealer shall at its own cost:
6.1 obtain/secure all relevant licenses required by the local authorities in
order to sell and promote the Showtime service in its entirety as well as the
hardware required for the said service. Use all reasonable endeavours to promote
and extend sales of IRDs and Smart Cards in the
Territory and to obtain orders for such sales by implementing active marketing
strategies. Gulf DTH, agrees to provide at no charge to the Dealer promotional
materials, including but not limited to printed materials (in English, and
Arabic and/or French), video clips (in English & Arabic), other promotional
materials as required, and to do all necessary advertising for the Showtime
package;
6.2 use all reasonable endeavours during the Term to maximise sales of each of
the Programme Packages to DTH Subscribers. Gulf DTH at its own cost will provide
Dealer with an authorised Country sales manager to assist the Dealer with sales
and marketing;
6.3 ensure that each of the Programme Packages shall be marketed under such name
as Gulf may determine from time to time and the Dealer shall not make any
promises, representations, warranties or guarantees with reference to the
programming which may be capable of reception by means of the IRDs without the
prior written authorisation of Gulf;
6.4 co-operate and liase with Gulf regarding the promotion and marketing of the
IRDs and the Programme Packages and participate in marketing schemes arranged by
providers of programme services included in the Programme Packages;
6.5 not charge any price for any IRD or Smart Card which exceeds the maximum
retail selling price of IRDs or Smart Cards agreed between the Dealer and Gulf
from time to time;
6.6 provide such warehouse; inventory control, security and storage space,
services and facilities and such insurance cover may be reasonably required by
Gulf in respect of all IRDs delivered by the Manufacturer to Gulf and prior to
such IRDs being delivered to the Sub Dealer under this Agreement;
6.7 during and after the Term observe, perform and comply with the provisions of
Schedule Four, unless there is an operational authorised service centre in the
respective Territory not run nor owned by the Dealer;
6.8 after the Term use all reasonable endeavours to supply or procure the supply
of spare parts necessary for the repair of IRDs and otherwise to service and
repair IRDs, unless there is an operational authorised service centre in the
respective Territory not run nor owned by the Dealer;
6.9 guarantee that only Showtime authorised/approved digital IRD's will be sold
or promoted by itself or any of its sub dealers;
6.10 only supply licensed cards into the territory. The licensed cards include
only Showtime cards;
6.11 establish and operate a call centre open minimum 12 hrs per day 6 days/week
to handle new sales and renewal inquiries & customer issues relating to the
installation and repair of hardware needed to receive the service;
6.12 be responsible for unauthorised use of Smart Cards. For each Smart Card
used prior to sale to the subscriber or return to Gulf, the Dealer shall pay the
sum of US$ 45 within thirty (30) days to Gulf.
7. SALES OF THE PROGRAMME PACKAGES
7.1 Gulf shall in its discretion determine from time to time and as in the
attached Schedule Eight and Nine, the monthly subscription price which is to be
charged to DTH Subscribers for each of the Programme Packages. The Dealer shall
not charge any DTH Subscriber a subscription price for either of the Programme
Packages other than that determined by Gulf from time to time upon giving not
less than 30 days' prior written notice to the Dealer. Gulf shall have one
Schedule Eight and Nine for all of the Territory.
7.2 Whenever the dealer sells or leases IRDs, Smart Cards, CAMs and/or LNBs to a
DTH Subscriber, the Dealer shall immediately notify Gulf's incountry
representative in writing by fax:
(A) the name, address and accurate telephone number of the DTH Subscriber;
(B) the serial number of the Smart Card;
(C) the serial number of the CAM;
(D) the brand, model and serial number of the IRD;
(E) the Programme Package(s) to which the DTH Subscriber has subscribed and the
period of the subscription period;
(F) the total amount of subscription charges which have been paid by the DTH
Subscriber; and
(G) any other information as reasonably requested by Gulf.
Only consumer contracts supplied by Gulf shall be used to duly complete all
accurate information.
Gulf shall not activate any Smart Card before receiving the above data. The
Dealer shall be liable for any prejudice or harm caused to Gulf due to the
Dealer's delay in communicating the above data. Gulf shall be liable for any
prejudice or harm caused to Dealer due to any Gulf s representative's
unreasonable delay in communicating the above data to Gulf or Gulf's activation
of such card.
7.3 Whenever the Dealer sells an IRD and a Smart Card to a DTH Subscriber:
(A) the Dealer shall require that any DTH Subscriber has, at all times during
the period of that DTH Subscriber's subscription, paid the subscription
charges for the relevant Programme Package(s) in advance, for not less than
the number of months specified in Clause 1 above ("the Advance Payment
Period"); and
(B) the Smart Card of that DTH Subscriber will be pre-enabled for a period of
seven (7) days commencing on the date on which it is first inserted into
the IRD of that DTH Subscriber but, if at any time thereafter Gulf shall
not have received in advance the subscription charges for the relevant
Programme Package(s) due from that DTH Subscriber for the entirety of the
Advance Payment Period, the Smart Card of that DTH Subscriber shall be
disabled.
7.4 Whenever the Dealer sells either of the Programme Packages to a DTH
Subscriber, the Dealer shall be entitled to a commission calculated as in the
attached Schedule Six (the "Sales Commission").
7.5 Whenever the Dealer or Gulf DTH renews either of the Programme Packages to a
DTH Subscriber in the Territory, the Dealer shall be entitled to a commission
calculated as in the attached Schedule Six (the "Renewal Commission").
7.6 During the Term the Dealer shall collect all subscription fees due and
payable from all DTH Subscribers and shall use all reasonable endeavours to
obtain payment of such subscription fees from all DTH Subscribers. All such
subscription fees collected by the Dealer shall be applied by the Dealer in
accordance with Clause 9 below.
8. OBLIGATIONS OF GULF
Gulf Shall:
8.1 (either itself or through any third party designated by Gulf) be solely
responsible for providing subscriber management services in relation to DTH
Subscribers, for enabling and disabling Smart Cards;
8.2 provide the Dealer with reasonable amounts of such advertising, promotional
and marketing materials in Arabic, French and English, for the purpose of
promotion of the Programme Packages in the Territory as may be in the possession
of Gulf and as Gulf may lawfully he able to provide;
8.3 if agreed upon by both parties, be responsible for the advertising of the
Showtime Programme Package in the various mass media, in coordination with
Dealer's promotional efforts;
8.4 spend a minimum of US$ 50,000 by June 30, 1999 and at least an additional
US$ 25,000 by March 31, 2000 to support the marketing of Showtime in Morocco. If
such monies are not spent, the Dealer shall be entitled to a commission of 10%
for all new sales in the first year;
8.5 (subject to availability and to Clause 5) deliver Smart Cards to the Dealer
in accordance with Schedule Three;
8.6 finance the Hardware necessary for the Leasing Scheme specified in Clause 4.
The amount of leasing quantities available shall be at the discretion of Gulf;
8.7 supply consumer Showtime contracts in Arabic, French and English;
8.8 provide technical support to the Dealer if there are any questions or issues
relating to the reception or delivery of the service;
8.9 provide Dealer with program guides in English and/or French for each DTH
subscriber, with at least 20% extras for marketing purposes, and to endeavour to
ensure that the program guide for Showtime offerings are publicised in the major
newspapers in Morocco.
9. REPORTING, PAYMENT AND AUDIT
9.1 On the first day of each week during the Term the Dealer shall deliver to
Gulf a statement showing the total amount of subscription fees received during
the immediately preceding week from DTH Subscribers. Together with such
statement the Dealer shall remit all such subscription fees to Gulf in full
after deduction only of the Sales Commission in accordance with Clause 9.2.
9.2 The Dealer shall be entitled to deduct the Sales Commission to which the
Dealer is entitled under Clause 7.4 before remitting to Gulf pursuant to Clause
9.1 the subscription fees received by the Dealer from DTH Subscribers.
9.3 The Dealer shall maintain throughout the Term and for a period of twelve
(12) months thereafter full and complete records relating to the numbers and
details of DTH Subscribers and the subscription fees received from such DTH
Subscribers during each month. The Dealer shall allow Gulf (or its duly
authorised representatives), at Gulf s sole expense to visit the premises of the
Dealer during normal business hours to inspect such records.
9.4 If any audit carried out by or on behalf of Gulf pursuant to Clause 9.3
reveals that the Dealer has knowingly under-reported the amount payable to Gulf,
the Dealer shall within fourteen (14) days thereafter make payment to Gulf of
the full amount due together with reimbursement of any costs incurred by Gulf in
carrying out such audit. Interest will be charged on any late payments at a rate
of 1. 5 % per month.
9.5 All xxxxxxxx and payments to Gulf for hardware are to be made in US$.
Billing for programming is to be made in Moroccan Dirhams and to be paid to Gulf
in US$ at the then current exchange
rate.
10. CONFIDENTIALITY
Each party shall, at all times during the term of this Agreement and after its
termination, keep all information and/or documents, disclosed in confidence to
it by the other party, confidential and secret and shall not disclose such
information and/or documents to any third party, save that any such information
may be disclosed:
10.1 to the extent necessary for such party to perform its obligations under
this Agreement;
10.2 if such information and/or documents becomes public knowledge through no
fault of such party; and
10.3 to any government or other regulatory body if such body requests such
information and/or document and such information and/or documents is required by
law.
11. INDEMNITY
Each party shall indemnify, hold harmless and defend the other party from and
against any and all claims that may be brought or commenced against the other
party and/or the other party's officers and employees arising out of any breach
of this Agreement by it or its officers and employees and any costs, expenses,
damage or loss related thereto.
12. TRADE MARKS
The Dealer expressly acknowledges that Gulf is the legal owner of SHOWTIME (the
"Trademarks") and that this Agreement will not affect any rights, interests and
title of ownership which Gulf has with respect to such Trademarks.
The Dealer or any affiliated company shall not acquire, by reason of this
Agreement, any rights in or under the Trademarks or any trademarks or trade
names, registered or unregistered, which are owned or used by Gulf and agrees
not to contest the validity of any trademarks used or owned by Gulf. The Dealer
shall not have the right to use the trade names, brand names or other insignia
of Gulf or trademarks or tradename confusingly similar to those of Gulf except
with the written consent of Gulf. The Dealer agrees not to register, or maintain
the registration
of any trademarks or trade names or other insignia of Gulf.
If the Dealer has acquired or at any time by any means acquires any rights in or
under any such aforementioned trademark or trade name, it will promptly, upon
request, assign all such rights to Gulf, this provision to survive the
termination of this Agreement. The Dealer agrees to notify Gulf of any use of
Gulf's trademarks by third parties in the Territory and to assist Gulf in any
legal action against such third parties for trademark infringement. Gulf agrees
that in any such action against third parties the Dealer shall bear none of the
costs involved.
13. DURATION AND TERMINATION
13.1 Either party may by notice in writing to the other party also terminate
this Agreement forthwith:
(A) if the other party is in breach of its obligations under this Agreement and
does not remedy the same (if capable of remedy) within thirty (30) days
after written notice from the other party requiring such remedy; or
(B) if the other party shall become insolvent or enter into a bankruptcy or
make a composition with its creditors or, being a company with limited
liability, shall enter into a voluntary or compulsory liquidation (other
than a voluntary liquidation for the purpose of amalgamation or
reconstruction); or
(C) if either party is unable for a continuous period in excess of thirty (30)
days to perform
any of its obligations under this Agreement as a result of any event or
circumstance of the kind described in Clause 18.1 below.
13.2 Upon the termination of this Agreement for any reason:
(A) the Dealer shall cease to sell any IRDs and Smart Cards and Gulf shall
purchase from the Dealer at the IRD Unit Price and SC Unit Price paid by
the Dealer under Clauses 3 and 5 the Dealer's stocks of IRDs and Smart
Cards, except for such stocks of IRDs and Smart Cards for which it has
accepted orders from DTH Subscribers prior to the date of termination and
for that purpose the provisions of this Agreement shall continue in full
force and effect;
(B) the Dealer shall cease to promote, market or advertise the Smart Cards and
the IRDs;
(C) subject as otherwise provided herein (including but not limited to in
Clauses 6.7 and 6.8) and to any rights or obligations which have accrued
prior to termination, neither party shall have any further obligation to
the other under this Agreement.
14. ASSIGNMENT
Neither party shall assign its rights or obligations under this Agreement to any
third party without the prior consent in writing of the other party. Such
assignments by either party shall not be unreasonably denied.
15. WAIVER
No delay or failure of either party to exercise any of its powers, rights or
remedies under this Agreement shall in any way be considered to be a waiver of
them, nor shall any single or partial exercise of any such powers, rights or
remedies preclude any other or further exercise of them.
16. ENTIRE AGREEMENT
16.1 It is agreed that all previous understandings, representations, statements,
undertakings and agreements written or otherwise between the parties in relation
to this Agreement are hereby cancelled as from the date of this Agreement. The
parties agree that neither of them have placed any reliance whatsoever on any
such previous understandings, representations, statements and agreement other
than those expressly incorporated in this Agreement.
16.2 This Agreement may not be modified or amended except by an instrument in
writing signed by the duly authorised representatives of both parties.
16.3 Headings in this Agreement are inserted for convenience only and shall have
no bearing on the interpretation of this Agreement
16.4 The Schedules to this Agreement form an integral part of this Agreement.
17. NOTICES
Any notice or other communication to a party hereto shall be in writing in
English and shall be deemed given when delivered in person or by mail, fax,
postage or other delivery charges prepaid, to the address of such party set
forth above or such substituted address of which such Party shall have been
notified in writing by the other.
18. FORCE MAJEURE AND BLOCKED FUNDS
18.1 Neither party shall be liable to the other party for any damage, delay or
failure of performance resulting directly or indirectly from any circumstance
beyond its reasonable control, including, but not limited to any war, riot,
strikes, Acts of God, fire, flood, prohibition of import, any breach of contract
or failure of supply by a third party, acts or orders of Government or any
agency or department thereof or any law or regulation having force of law which
comes into force after the date hereof.
18.2 If the dealer shall be prohibited or restricted from making payment of any
monies to Gulf at the time when the same are due and payable, by reason of the
laws and/or currency regulations within the Territory the Dealer shall promptly
notify Gulf in writing. The Dealer shall upon Gulf's request deposit any such
blocked funds to the credit of Gulf in a bank in the Territory designated by
Gulf in writing or pay them promptly to such person(s) as Gulf may designate in
writing.
19. LAW
This Agreement shall be construed, interpreted and applied in accordance with
and shall be governed by the laws of England. The parties hereto hereby agree to
submit all disputes arising therefrom to the jurisdictions of English Courts.
20. LANGUAGE
This Agreement has been negotiated and drafted in the English Language. If
reference to an Arabic translation is required, any ambiguity in the Arabic text
or any disagreement concerning the Arabic text shall be resolved by reference to
the English text.
This agreement may be executed in counterparts.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day
and year first above written SIGNED by
for and on behalf If of
GULF DTH PRODUCTION
SIGNED by
for and on behalf of
OrnniVision Maroc SARI,
ANNEX A
Showtime Programme Packages
Full Bouquet:
o The Movie Channel
o Discovery Channel
o MTV
o VH1
o Style
o TV Land
o Nickelodeon
o Paramount Channel
o Bloomberg Television
o Sony Entertainment Television
o Hallmark Entertainment Network
o Music Choice Audio Services
plus any other channels that Gulf may add from time to time.
Mini Bouquet:
o The Movie Channel
plus any other two channels that the DTH Subscriber may choose from the Full
Bouquet.
SCHEDULE ONE
Products
The Agreement shall cover the following products:
o IRDs
o CAMs
o Smart Cards
o IF Downconverters
o IF Upconverters
SCHEDULE TWO
Territory
The Agreement shall be applicable to the Nation of Morocco
SCHEDULE THREE
Supply of IRDs and Smart Cards
This Schedule shall include information on delivery date, quantity and price for
the supply and purchase of IRDs and Smart Cards
Delivery Date Quantity of
IRDs Smart Cards
Prices: IRDs shall be sold to the Dealer at cost per IRD unit currently US$
335 (three hundred and thirty five US Dollars) (delivered ex-Dubai).
Such unit price includes Smart Card and is subject to section 6.12.
Smart Cards not included in IRDs shall be sold to the Dealer at US$
15.00 (Fifteen US Dollars) per unit (delivered CIF Casablanca) subject
to section 6.12.
SCHEDULE FOUR
Product Warranty
1 The Dealer shall provide IRD purchasers with a twelve (12) months warranty
("Warranty") (commencing from the date of purchase) in respect of the IRDs
against defects in design, materials and workmanship, provided that such
Warranty shall be underpinned by a back-to back warranty by the IRD manufacturer
in favour of the Dealer.
1.1 The dealer will endeavour to conclude an agency / service agreement with the
manufacturer (Galaxis) to function as their service representative in the
region. It is understood that any costs incurred or parts required to fulfil
this agency agreement will be covered by the manufacturer. If such services
agreement is not agreed upon, the Dealer has no obligation to provide such
Warranty.
1.2 On lease IRD's where the manufacturers warranty has expired Gulf DTH will
reimburse OmniVision for all reasonable costs related to the repair of a Gulf
DTH owned lease IRD.
2. The Dealer shall:
2.1 maintain accurate records to monitor the field reliability of the IRDs in
the Territory; and
2.2 within fourteen (14) days after Gulf's request (which may not be made more
than once per calendar month) submit a written report to Gulf, which report
shall:
(A) identify each defective IRD by reference to its serial and batch numbers;
(B) record the causes of failure of each such IRD;
(C) state whether or not the defect occurred during the period when the IRD was
still under Warranty and, if not, how long thereafter the defect occurred;
and
(D) set out any discernible failure patterns in the IRDs.
3. the Dealer or its appointee shall perform all service works and repairs and
attend to all
Warranty claims and out-of-Warranty claims with due care and diligence, in
accordance with the best standards of engineering and craftsmanship as the
official appointed service agent by the respective manufacturers.
SCHEDULE FIVE
Other Category of Subscribers
The following category of subscribers shall be included in this Agreement in
accordance of the provisions of Clause 2.2:
o MUDS & SMATV Subscribers - IF distribution systems.
o Hotel (public viewing / areas permitted on a case by case basis with Gulf)
SCHEDULE SIX
Sales Commissions
New Sales:
Based on Gulf subscription price, Gulf shall pay the Dealer sales commission on
subscriptions based on the following annual targets:
0 - 1499 Subscriptions 9% of the subscription price
1,500 - 1999 Subscriptions 10% of the subscription price
> 2000 and more Subscriptions 11 % of the subscription price
The commission percentage will be paid on the gross subscription price less
applicable taxes or fees;
In the case of 3 and 6 month subscriptions the Dealer will receive the new sale
commission for the V' 12 months. After which time the renewal rate will apply.
The above commission includes DTH Purchase, DTH Lease, and IF Lease
subscriptions.
For purposes of calculating the sales commission, neither Gulf nor the Dealer
shall consider or take into consideration the annual targets achieved in
previous years. The annual targets are not cumulative and the Dealer shall only
be entitled to the above sales commission as and when the above annual targets
are achieved over a period of twelve months. Such first year commission shall
begin on January 1, 1999 and end on March 31, 1999.
If the Annual Chum during a given year exceeds two per cent. (2%) monthly, (24%
annually), then such excess shall be deducted from that year's new subscriptions
for the purpose of calculating the Sales Commission.
Renewals:
Gulf shall pay the dealer a renewal commission on a subscription renewed through
the dealer or Gulf DTH or any of its representatives as follows:
a) Eight percent (8 %) if Dealer makes the renewal;
b) Gulf reserves the right to renew subscribers who have not renewed through the
Dealer on the following terms and conditions; Gulf will notify the Dealer 30
days prior to the expiry of the subscription, and thereafter keep the Dealer
apprised in writing of the status of the subscription renewal. The Dealer will
notify Gulf on a weekly marketing report of the status of the renewal. Should
the Dealer not be able to renew the subscription within 24 hours prior to the
expiry of the subscription then Gulf may notify the Dealer of its intent to
contact such subscriber. Gulf shall not contact such subscriber earlier than
three (3) days after expiry of the subscription. Gulf will not offer any
incentive to the subscriber on better terms and conditions that is offered to
the Dealer. The Dealer will be entitled to receive four percent (4%) of the
renewal subscription fee if Gulf makes the renewal.
SCHEDULE EIGHT
Subscription Prices
o Showtime Leasing Subscription Prices:
Full Bouquet Mini Bouquet
US$ 59.00 / month US$ 45.00 / month
o Showtime Purchase Subscription Prices:
Full Bouquet Mini Bouquet
3 Months US$ 154.50 (51.50 / month) US$ 105.00 (35.00 / month)
6 Months US$ 300.00 (50.00 / month) US$ 198.00 (33.00 / month)
12 Months US$ 528.00 (44.00 / month) US$ 348.00 (29.00 / month)
* see Schedule Nine for local currency rates.
SCHEDULE NINE
Subscription Prices In Moroccan DH
o Showtime Leasing Subscription Prices:
Full Bouquet Mini Bouquet
DH 559 / month DH 429 / month
o Showtime Purchase Subscription Prices:
Full Bouquet Mini Bouquet
3 Months DH 1497 (499 / month) DH 1005 (335 / month)
6 Months DH 2850 (475 / month) DH 1890 (315 / month)
12 Months DH 4980 (415 / month) DH 3300 (275 / month)
