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EXHIBIT 10.27
ECHOSTAR SATELLITE CORPORATION
MDU DEALER AGREEMENT
This MDU Dealer Agreement ("Agreement") is effective as of the 14th
day of January 1999, by and between EchoStar Satellite Corporation having a
principal place of business at 5701 S. Santa Fe Drive, Littleton, Colorado
80120; Attn: General Counsel ("EchoStar"), and TVMAX Telecommunications, Inc.,
d/b/a OpTel, having a principal place of business at 1111 West Mockingbird Lane,
10th Floor, Dallas, Texas 75247; Attn: Vice President-Marketing ("MDU Dealer").
INTRODUCTION
A. EchoStar is engaged, among other things, in the business of
providing digital direct broadcast satellite (DBS) services through the DISH
Network, a DBS service owned and operated by EchoStar and its Affiliates in the
United States.
B. MDU Dealer, acting as an independent contractor, desires to become
authorized on a non-exclusive basis (an "Authorized MDU Dealer"), to market,
promote, and solicit orders for certain DISH Network video and audio programming
provided by EchoStar ("Programming") to MDU Buildings through the use of a
common antenna system installed and maintained by MDU Dealer (an "MDU System").
C. EchoStar desires to appoint MDU Dealer as an Authorized MDU Dealer
in accordance with and subject to the terms and conditions of this Agreement.
AGREEMENT
1. DEFINITIONS In addition to the capitalized terms defined elsewhere in
this Agreement, the following definitions shall apply to this Agreement:
1.1 "Affiliate" means any person or entity directly or indirectly
controlling, controlled by or under common control with another person or
entity.
1.2 "Commissionable Programming" means the Programming packages set
forth in Exhibit A hereto, which EchoStar may change at any time in its sole
discretion as provided in Section 3.1 below upon notice to MDU Dealer. Under no
circumstances shall Commissionable Programming include pay-per-view or event
broadcasts.
1.3 "Commissions" means the Residual Commissions, together with any
Additional Commissions, as such terms are defined in Sections 5.1 and 5.2.
1.4 "DISH DBS Receiver" means an MPEG-2 DVB compliant satellite
receiver and related components packaged therewith, to be utilized for the
reception of Programming delivered to such system via satellite transponders
owned and operated by EchoStar or its Affiliates, which is sold directly to MDU
Dealer by EchoStar under the "EchoStar" brand name.
1.5 "EFT" means the electronic transfer of funds by a financial
institution to an account designated by EchoStar.
1.6 "MDU Building" means a building located in the Territory
subdivided into two or more individual single family residential dwelling units,
which consists solely of apartment complexes, condominiums, townhomes,
residential dormitories, gated private residential communities, and private
single family residential buildings. If MDU Dealer desires that EchoStar
classify a building as an MDU Building prior to beginning work on such building
as provided hereunder, EchoStar agrees to use commercially reasonable efforts to
provide a classification for the building upon receipt from MDU Dealer of a
signed statement listing and verifying to EchoStar all relevant details
concerning the building, including a description of how the building is used,
whether common areas exist in the building, whether the general public is able
to enter the building, etc. Notwithstanding anything to the contrary in this
Section 1.6, MDU Dealer may not provide Programming to any building or portion
of a building that: (i) is a common area, reception area, waiting area, or lobby
accessible to more than one family (and their invited guests); (ii) charges an
admission or other fee to enter; (iii) is accessible to members of the general
public; (iv) is a commercial business or establishment, including without
limitation a restaurant or bar; (v) is a hospital, hotel, motel, or other
similar temporary lodging; (vi) is a prison, halfway house, mental institution,
or other secured treatment or correctional facility; or (vii) is a private
office or other room used to conduct business on a regular basis. MDU Dealer
acknowledges that if the means of use or operation of an MDU Building change, it
may no longer qualify as an MDU Building.
1.7 "Qualifying Subscriber" means a resident of an MDU Building who
uses a DISH DBS Receiver that EchoStar verifies has been obtained from MDU
Dealer. A Qualifying Subscriber shall not include any person who would otherwise
qualify, but who: (a) uses a DISH DBS Receiver not obtained by the person from
MDU Dealer; (b) no longer meets the definition of Qualifying Subscriber; or (c)
EchoStar declines to activate or deactivates because EchoStar determines the
person: (i) is or has been repeatedly or severely abusive or threatening to the
business operations or reputation of EchoStar or its Affiliates or to any of its
or their employees, agents, or representatives, or (ii) is or has been convicted
of piracy or other fraud related to television programming.
1.8 "Subscriber Account" means the account set up and maintained by
EchoStar for a Qualifying Subscriber who obtained a DISH DBS Receiver from MDU
Dealer and for whom Commissionable Programming has been activated by EchoStar
and which account is being paid by MDU Dealer under this Agreement and remains
active and in good standing.
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1.9 "Territory" consists of the geographic boundaries of the
continental United States.
2. GENERAL
2.1 APPOINTMENT. EchoStar appoints MDU Dealer as a non-exclusive
authorized representative to promote and solicit orders for the Programming
listed in Exhibit A, which is attached hereto and incorporated by reference
herein, subject to all of the terms and conditions of this Agreement. MDU
Dealer's authorization herein is limited to the solicitation of orders from, and
the promotion of Programming to, Qualifying Subscribers at MDU Buildings unless
EchoStar, in its sole discretion, specifically agrees in writing to permit MDU
Dealer to solicit orders from, or promote Programming to, others.
2.2 TERRITORY. MDU Dealer is only authorized, and shall limit its
actions, to the promotion in the Territory of, and solicitation of orders in the
Territory for, Programming in the packages (or a-la-carte for the Programming
shown in Exhibit A as available on an a-la-carte basis), and at the prices
shown in Exhibit A.
2.3. ACCEPTANCE. MDU Dealer accepts its appointment as an Authorized
MDU Dealer. MDU Dealer understands that it may hold itself out to the public as
an Authorized MDU Dealer of EchoStar only after fulfilling, and for so long as
it continues to fulfill, all of the requirements in this Agreement, and only
during the Term of this Agreement.
2.4 PROPERTY CONVERSION; NON-EXCLUSIVITY. Provided that no event of
default as described in Section 9.3 below has occurred, if MDU Dealer is
considering converting any then current Qualifying Subscribers at any MDU
Building or portion thereof from the Programming then being provided by EchoStar
to substantially similar programming (in terms of both content and method of
delivery) provided by a third party, then MDU Dealer agrees that it will provide
EchoStar with written notice thereof at least ninety (90) days prior to any such
conversion. If requested by EchoStar, during such ninety (90) day period (the
"Discussion Period") MDU Dealer will discuss with EchoStar the reasons that
caused MDU Dealer to consider converting such Qualifying Subscribers to
programming to be provided by a third party (including pricing information if
price is mentioned as a reason), unless MDU Dealer is prohibited from doing so
under the terms of a confidentiality agreement with the third party. MDU Dealer
shall refrain from so converting those Qualifying Subscribers during the
Discussion Period (provided no event of default by EchoStar has occurred under
this Agreement and is then continuing). However, notwithstanding any discussions
that the parties may have during the Discussion Period, MDU Dealer shall not be
precluded from so converting such Qualifying Subscribers at any time following
the expiration of the Discussion Period, nor shall either party be obligated to
amend this Agreement or waive any right hereunder. Notwithstanding the preceding
sentence or any other provision of this Agreement to the contrary, the parties
agree that nothing in this Agreement is intended to confer, nor shall it be
construed as conferring, any exclusive territory or any other exclusive rights
to MDU Dealer or any exclusive rights to EchoStar.
2.5 PURCHASE OF DISH DBS RECEIVERS BY MDU DEALER FROM ECHOSTAR.
2.5.1 DISH DBS RECEIVER. (MATERIAL DENOTED *** HAS BEEN
SEPARATELY FILED WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIALITY). No more than twice in any calendar year, MDU Dealer may
deliver to EchoStar a written notice requesting that EchoStar conduct a review
of its DISH DBS Receiver pricing. If the cost to EchoStar for the model 2700 (or
if the model 2700 is no longer manufactured, the price of its successor model)
has changed more than five percent (5%) since the last price review (or since
execution of this Agreement, if no prior price reviews have been conducted),
EchoStar will notify MDU Dealer of the change in cost within 30 days of receipt
of the price review request from MDU Dealer, and 30 days following notice of
price change from EchoStar the price to MDU Dealers for DISH DBS Receivers shall
be adjusted to reflect the percentage amount of such change (the "Current
Price", which shall be equal to the Initial Price prior to any price review).
For example, if EchoStar determines in a price review that its costs for the
model 2700 decreased 15%, the Price of the model 2700 to MDU Dealer would
decrease 15%. If model 2700 is not available, EchoStar may, in its discretion,
substitute another DISH DBS Receiver with equal or better functionality for
the Current Price. Other models of DISH DBS Receivers may be purchased from time
to time at prices agreed to by the parties (an "Agreed Price"). EchoStar agrees
that a subscriber that acquires a DISH DBS Receiver from MDU Dealer may use such
receiver to receive EchoStar programming even after such subscriber is no longer
a resident of an MDU Building being served by MDU Dealer; provided that such use
shall be subject to EchoStar's then applicable standard terms and conditions for
service and MDU Dealer shall no longer have any rights or obligations with
respect to that subscriber, including without limitation right to any
commissions.
2.5.2 ORDERING RECEIVERS. When MDU Dealer orders any DISH DBS
Receivers from EchoStar, MDU Dealer shall order such products by written
purchase order ("Purchase Order") issued during the term of this Agreement. MDU
Dealer acknowledges that it is not eligible to purchase subsidized DISH DBS
Receivers, and agrees to pay the Current Price or Agreed Price (as applicable)
for each DISH DBS Receiver ordered. A Purchase Order shall be a binding
commitment by MDU Dealer. Purchase Orders of MDU Dealer shall state only the:
(i) identity of goods; (ii) quantity of goods; (iii) purchase price of goods;
and (iv) requested ship date of goods. Any additional terms stated in a Purchase
Order shall not be binding upon EchoStar unless expressly agreed to in writing
by EchoStar. In the event of any conflict between the terms of a Purchase Order
and the terms of this Agreement, the terms of this Agreement shall prevail. MDU
Dealer agrees to purchase DISH DBS Receivers exclusively from EchoStar during
the term of this Agreement. EchoStar agrees to receive Purchase Orders by
facsimile, mail or express delivery service. Within two business days of
EchoStar's receipt of MDU Dealer's Purchase Order, EchoStar shall use
commercially reasonable efforts to send MDU Dealer written confirmation (by
facsimile) of its receipt of MDU Dealer's Purchase Order and EchoStar's
acceptance or rejection of that order. Any failure to confirm a Purchase Order
shall not be deemed acceptance by EchoStar. If EchoStar rejects a Purchase
Order, EchoStar shall notify MDU Dealer and that Purchase Order shall be
canceled. MDU Dealer shall have the option of resubmitting another Purchase
Order to purchase those number of receivers that EchoStar has available or to
purchase a substitute model (to the extent available), in which case MDU Dealer
agrees to pay the Agreed Price of the substitute model. EchoStar agrees to use
commercially reasonable
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efforts to ship DISH DBS Receivers ordered by MDU dealer to the shipping address
indicated by MDU Dealer on the Purchase Order on the same day as EchoStar
accepts MDU dealer's Purchase Order if the acceptance is completed before 10:30
a.m., MST, otherwise to ship them the following business day. Under no
circumstance shall EchoStar be liable for any reasonable delay in shipment.
EchoStar will ship all Receivers using a delivery service offering delivery of
not greater than five days. Unless there is a change in credit as provided
below, MDU Dealer agrees to pay EchoStar for all DISH DBS Receivers ordered and
received by MDU Dealer, including shipping costs and all applicable taxes,
within thirty days following MDU Dealer's receipt of the invoice therefor.
(MATERIAL DENOTED *** HAS BEEN SEPARATELY FILED WITH THE COMMISSION PURSUANT TO
AN APPLICATION FOR CONFIDENTIALITY). In the event that EchoStar reasonably
determines there is a material adverse negative change to MDU Dealer's credit
worthiness, then EchoStar may require that MDU Dealer pay for ordered DISH DBS
Receivers in advance of shipment or make reasonable arrangements to provide
security to assure payment to EchoStar. Each DISH DBS Receiver ordered shall be
covered by Echosphere Corporation's ("Echosphere's") standard limited warranty.
Echosphere may change the warranty it offers at any time, but the warranty on
new DISH DBS Receivers at any given time shall not be different than the
standard Echosphere warranty offered Dish Network customers who purchase the
same model receiver (provided no additional payment is made for an alternate
warranty) and who have no obligation to purchase programming or other goods or
services in connection with the receiver. All other warranties are hereby
expressly disclaimed.
2.6 INSTALLATION AND MAINTENANCE OF MDU SYSTEMS. MDU Dealer shall, at
its sole cost throughout the term of this agreement: (i) sell, lease or rent
DISH DBS Receivers and MDU System equipment to Qualifying Subscribers at such
prices as MDU Dealer shall determine; (ii) offer to install and, if such offer
is accepted, actually install in a timely manner, all DISH DBS Receivers and MDU
System equipment which MDU Dealer sells, leases or rents to any Qualifying
Subscriber; (iii) offer to maintain and, if such offer is accepted, actually
maintain all DISH DBS Receivers and MDU System equipment that MDU Dealer sells,
leases, or rents to any Qualifying Subscriber; (iv) provide and maintain in good
working order and repair all facilities, vehicles, tools, and equipment
necessary for performing its obligations pursuant to this Agreement; (v)
provide, in a commercially reasonable manner, customer service to all qualifying
Subscribers related to the lease, sale, installation and maintenance of the DISH
DBS Receivers and MDU System equipment; and (vi) secure and maintain from MDU
Building owners and operators, and from any applicable federal, state, and local
government entities and agencies, all authority (including the right to enter
into the MDU Building, if required by law) necessary to carry out the foregoing.
MDU Dealer agrees that at any MDU Building where MDU Dealer is offering the
Programming pursuant to this Agreement, MDU Dealer shall convert one of MDU
Dealer's existing basic or expanded basic tier channels (to be selected jointly
by the parties from those available channels as reasonably determined by MDU
Dealer) from being provided by MDU Dealer's existing transport method to being
provided by EchoStar so that EchoStar will be able to promote its Programming
over MDU Dealer's basic or expanded basic tier by advertising inserts in
EchoStar's Programming. MDU Dealer shall not be obligated to convert a channel
as described in the preceding sentence if no conversion of any available channel
(as reasonably determined by MDU Dealer) can be made without resulting in the
violation of any programming, transport or other agreement to which MDU Dealer
is bound or would result in any additional cost to MDU Dealer not paid by
EchoStar. MDU Dealer shall have the right at any time and from time to time in
its reasonable discretion to change such channel being converted to another
channel jointly agreed to by the parties. Any fees MDU Dealer collects from
Qualifying Subscribers which are related to the purchase, lease, or rental of
DISH DBS Receivers or the installation or maintenance of the DISH DBS Receivers
or the MDU systems, shall be the sole property of MDU Dealer. In selling,
installing, and maintaining DISH DBS Receivers and/or other MDU System equipment
related to distribution of the Programming, MDU Dealer shall: (a) comply with
all applicable EchoStar manufacturers' policies; and (b) ensure that such MDU
System design and installation complies with industry standard digital video
distribution technical specifications. MDU Dealer shall be solely responsible
for the installation and maintenance of all equipment necessary to allow
Qualifying Subscribers to receive Programming. MDU Dealer shall not sell, lease
or otherwise distribute DISH DBS Receivers except to Qualifying Subscribers at
MDU Buildings. MDU Dealer agrees that it will distribute, to each person to whom
it sells, leases, or delivers a DISH DBS Receiver: (i) the User and Installation
Guide included in the DISH DBS receiver purchased from EchoStar; and (ii) a
written statement that all questions, concerns, difficulties, and problems with
DISH DBS Receivers and programming should be directed to MDU Dealer and not to
EchoStar.
3. PROGRAMMING
3.1 PROGRAMMING. EchoStar, in its sole discretion, shall determine
the Programming for which MDU Dealer may solicit orders, as set forth in Exhibit
A. EchoStar may expand, reduce or otherwise modify Exhibit A and the content of
any packages at any time and from time to time in its sole discretion; provided
that any such modification or reduction must be consistent with a modification
or reduction then being made to the programming being provided to other EchoStar
customers at MDU Buildings receiving similar programming packages. Any changes
shall be effective (and Exhibit A shall be deemed modified) on the date
designated by EchoStar by written notice to MDU Dealer. EchoStar agrees that
when it is able to do so it will use commercially reasonable efforts to provide
MDU Dealer with at least 45 days prior written notice of any changes to any
Programming packages or channel lineups.
3.2 CHANGES. If at any time or for any reason EchoStar changes the
content of any programming package, MDU Dealer's authority to solicit orders for
the prior Programming package shall cease immediately upon notice from EchoStar.
3.3 MDU PROGRAMMING ONLY. With respect to Qualifying Subscribers, MDU
Dealer shall not solicit orders for Programming except for Programming which is
specifically designated and authorized by EchoStar for reception at MDU
Buildings. MDU Dealer shall not be entitled to any commission for Programming
which has been ordered for any location other than a MDU Building, and shall
immediately pay EchoStar the dollar amount of all Programming ordered in
violation of this Section at the then applicable rate. MDU Dealer or Qualifying
Subscribers may order any one or more separate Programming or Programming
packages set forth on Exhibit A, as same may be amended.
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3.4 ADDITIONAL RESTRICTIONS AND OBLIGATIONS OF MDU DEALER. MDU Dealer
shall not resell, retransmit, or rebroadcast any Programming except as
specifically contemplated under this Agreement. MDU Dealer shall further ensure
that no MDU Building owner or operator engages directly or indirectly in: (a)
the reselling of Programming; (b) the retransmission or rebroadcast of
Programming, except as contemplated by this Agreement; or (c) modifying, adding
to, or deleting from any of the Programming.
3.5 DEACTIVATION. EchoStar, shall deactivate the DISH DBS Receiver of
any Subscriber Account (a "Deactivation") at MDU Dealer's written instruction
(or e-mail or other electronic message if received by EchoStar). EchoStar shall
not otherwise deactivate a receiver or discontinue or refuse to provide ordered
Programming to any Qualifying Subscriber except in the event of a default as
described in Section 9.3 below or in the event a Qualifying Subscriber no longer
meets the definition of a Qualifying Subscriber set forth in Section 1.7 above.
MDU Dealer understands and acknowledges that a Deactivation will disable the
reception of all programming received through the DISH DBS Receiver, including
EchoStar Programming, and MDU Dealer hereby forever waives and releases EchoStar
from any and all claims related to, or arising out of a Deactivation, including
but not limited to claims relating to the loss of revenue from programming or
the sale, rental or lease of a DISH DBS Receiver.
4. PRICES AND PAYMENT.
4.1 RETAIL PRICES; CHANGE. EchoStar, in its sole discretion, shall
determine the retail prices for Programming. MDU Dealer will only solicit orders
for Programming at the retail prices set by EchoStar from time to time. The
initial retail prices for the Programming are as set forth in Exhibit A.
EchoStar may increase, decrease or otherwise modify those prices from time to
time in its sole discretion; provided that any such modification must be
consistent with a modification made to the Programming pricing for all other
EchoStar customers at residential locations receiving identical programming
packages. Any price changes shall be effective (and Exhibit A shall be deemed
modified) on the date designated by EchoStar by written notice to MDU Dealer,
which date shall in no event be less than 60 days from the date of MDU Dealer's
receipt of such notice.
4.2 DETERMINATION OF PRICE; PAYMENT AND BILLING. The prices for
Programming set forth on Exhibit A reflect the price per Subscriber Account for
MDU Buildings. (MATERIAL DENOTED *** HAS BEEN SEPARATELY FILED WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIALITY.) Charges for all
recurring Programming will commence on the activation date. (MATERIAL DENOTED
*** HAS BEEN SEPARATELY FILED WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIALITY.) Payment not received when due shall accrue interest at the
rate of 1.5% per month until paid, and MDU Dealer agrees to pay all interest
charges due and payable by MDU Dealer hereunder. (MATERIAL DENOTED *** HAS BEEN
SEPARATELY FILED WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIALITY.) Throughout the term and any renewal term of this Agreement and
for two years thereafter, each party hereto agrees to maintain accurate books
and records associated with its operations pertaining to the Programming,
Qualifying Subscribers, Subscriber Accounts and DISH DBS Receivers. Each party
agrees that it will account periodically to the other upon request and provide
the other with the necessary information from its books and records to allow the
other party to audit and confirm the accuracy of the information being provided
by each party. Either party at its own expense, upon providing the other with at
least 15 days prior written notice of its desire to do so, may audit the books
and records of the other party relating to Qualifying Subscribers, Subscriber
Accounts, the Programming and the DISH DBS Receivers. Any such audit shall be
conducted during the other party's normal business hours at its principal
business office.
5. COMMISSIONS.
5.1 RESIDUAL COMMISSIONS.
5.1.1 CALCULATION.
(MATERIAL DENOTED *** HAS BEEN SEPARATELY FILED WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIALITY)
5.1.2 PAYMENT TERMS. Subject to the terms and conditions of
this Agreement (including the exhibits attached hereto), commencing upon
activation of a Subscriber Account and for every month thereafter in which the
Subscriber Account receives Commissionable Programming, MDU Dealer shall be
entitled to a Residual Commission.
5.2 ADDITIONAL COMMISSIONS. MDU Dealer shall be eligible to
participate in, and receive payments ("Additional Commissions") under, such
promotions or incentive programs as EchoStar may institute in its sole
discretion from time to time. MDU Dealer acknowledges and agrees that: (i) under
no circumstances shall EchoStar have at any time any obligation to offer
Additional Commissions to MDU Dealer, or if Additional Commissions are offered,
to permit MDU Dealer to be eligible to receive them; (ii) EchoStar may, in its
sole discretion, add, discontinue, substitute, modify, or otherwise alter any or
all of the terms of any promotion or incentive program involving the payment of
Additional Commissions; and (iii) if EchoStar offers any Additional Commissions,
MDU Dealer shall only be eligible to receive the Additional Commissions if it
meets all of the applicable qualification criteria and other terms and
conditions as EchoStar may establish in its sole discretion.
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5.3 TERMINATION OF COMMISSIONS. In addition to any other rights and remedies
available, If MDU Dealer defaults on the payment to EchoStar of Programming
charges for any Qualifying Subscribers, and if EchoStar subsequently terminates
this Agreement as a result of such payment default pursuant to the provisions of
Section 9.3 and ceases to provide all Programming pursuant to this Agreement,
MDU Dealer shall not be entitled to any Commissions on such Qualifying
Subscribers with respect to any Programming changes not paid to EchoStar by MDU
Dealer prior to collection efforts by EchoStar which would otherwise be due to
MDU Dealer. EchoStar shall have no liability to MDU Dealer as a result of such
termination. Upon cure of the breach or default, all amounts suspended shall be
credited to MDU Dealer's account.
5.4 OFFSETS. Neither party may set off or take offsets against any amount
owed to the other party hereunder, except for Commissions specifically provided
for under this Agreement.
5.5 SOLE COMPENSATION. MDU Dealer acknowledges and agrees that the
Commissions payable pursuant to this Agreement constitute the sole commissions
or fees payable by EchoStar to MDU Dealer for MDU Dealer's role in soliciting
orders for Programming or for any other audio, video, or other programming
provided by EchoStar or any of its Affiliates pursuant to this Agreement.
5.6 NO ADMISSION. No acceptance of payment from MDU Dealer under this
Agreement, whether in full or in part, shall be deemed to operate as EchoStar's
acceptance or admission that MDU Dealer has complied with any provision of this
Agreement.
6. USE OF INDEPENDENT CONTRACTORS: PROGRAMMING ORDERS.
6.1 If MDU Dealer uses independent contractors, sub-agents, or other persons
or entities not employed by MDU Dealer to perform activities contemplated
hereunder, MDU Dealer shall be responsible for the acts and omissions of such
persons under this Agreement to the same extent it is responsible for the acts
and omissions of its own employees.
6.2 MDU Dealer shall not sell Programming under any circumstances. All sales
of Programming are transactions directly between EchoStar and Qualifying
Subscribers. MDU Dealer also agrees that it shall not charge subscribers more
than the then applicable retail price (i.e., the prices specified in Section 4.1
above, as such prices may be modified as provided in Section 4.1) for any
Programming.
6.3 MDU Dealer shall forward to EchoStar all orders for Programming in the
manner prescribed herein. EchoStar shall accept all such orders for Qualifying
Subscribers and activate the ordered Programming in accordance with, and subject
to, the terms and conditions of this Agreement. MDU Dealer shall use reasonably
commercial efforts to ensure that all residents of any MDU Building served by
MDU Dealer shall contact MDU Dealer and not EchoStar (a) to initiate, add,
delete or cancel receipt of any Programming except EchoStar pay-per-view, (b)
for any maintenance or service of, or problems or concerns with, their DISH DBS
Receiver or other portion of any MDU System equipment, and (c) for any questions
concerning reception, rates, billing or collection. To order Programming, MDU
Dealer shall complete and send a complete and accurate "DBS Service Request
Form" in the form of the attached Exhibit D (which exhibit may be changed by
EchoStar from time to time upon notice to MDU Dealer, but shall always include
the name, address, and telephone number of each requested subscriber) to
EchoStar, Attn: EchoStar Commercial Activations, by facsimile (Fax No.:
800/454-0843, or as otherwise specified by EchoStar from time to time), mail or
express delivery service. EchoStar will input all subscriber information and
will use commercially reasonable efforts to set up Subscriber Accounts for
Qualifying Subscribers for which satisfactory DBS Service Request Forms are
received by EchoStar: (i) before 12:00 noon, Mountain Time, by the close of
business on the day of receipt, and (ii) after noon MST, by the close of
business on the next business day. EchoStar Commercial Activation's hours of
operation are currently 7:00 a.m. to 7:00 p.m., Mountain Time, Monday through
Friday (except during holidays). At the time MDU Dealer installs a DISH DBS
Receiver at a Qualifying Subscriber's residence, MDU Dealer's technician shall
telephone EchoStar's call center to request activation of Programming.
EchoStar's call center is currently open to receive such requests 24 hours per
day, 7 days per week (excluding standard holidays). EchoStar's call center shall
use commercially reasonable efforts to activate Programming and authorize the
Qualifying Subscriber's assigned "Smart Card" while the MDU Dealer technician is
present at the Qualifying Subscriber's residence (i.e., within 30 minutes after
MDU Dealer's technician's call) so that the MDU Dealer technician can confirm
proper installation and activation. MDU Dealer shall also send all instructions
to add, delete, cancel or otherwise modify any Programming for an existing
Qualifying Subscriber to EchoStar Commercial Activations, which instructions
EchoStar shall use commercially reasonable efforts to effect within one business
day of receipt of MDU Dealer's instructions. See Exhibit C attached hereto for
EchoStar's current procedures pertaining to Programming orders, activation,
modification and cancellation. MDU Dealer agrees to promptly notify EchoStar in
writing of any change, with respect to DISH DBS Receivers, in the name, address,
or telephone number of the Qualifying Subscriber receiving Programming through
such receiver.
6.4 MDU Dealer shall cooperate reasonably when requested by EchoStar to
notify Qualifying Subscribers of information pertaining to the Programming;
provided however, that MDU Dealer shall be solely liable for the failure to
follow any such request.
7. TRADEMARK LICENSE AGREEMENT. MDU Dealer shall sign the Trademark License
Agreement, in the form attached as Exhibit E hereto, which agreement is hereby
incorporated by reference in its entirety.
8. CONDUCT OF BUSINESS.
8.1 SIGNAL THEFT MDU Dealer shall not directly or indirectly: (i) engage in
any signal theft, piracy or similar activities; (ii) alter any DISH DBS
Receivers or "Smart Cards", MDU Systems, or any other equipment compatible with
programming delivered by EchoStar or any of its Affiliates to be capable of
signal theft (or for any other reason without the express written consent of
EchoStar);
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(iii) sell any equipment altered to permit signal theft or other piracy; or (iv)
aid any others in engaging in any of the above described activities. MDU Dealer
shall immediately notify EchoStar if it becomes aware of any such activity.
8.2 HARDWARE EXPORT RESTRICTIONS. MDU Dealer agrees that it will not
engage directly or indirectly in the export or sale outside of the Territory, of
DISH DBS Receivers or Programming in whole or in part.
9. TERM, DISPUTE RESOLUTION AND TERMINATION.
9.1 TERM. This Agreement shall commence on the date of execution by
both parties and shall continue until December 31, 2001 (the "Term") unless and
until terminated by either party in accordance with the terms and conditions of
this Agreement. The Term of this Agreement shall automatically renew for
additional terms of one (1) year each unless either party provides the other
with written notice at least twelve (12) months prior to the expiration of the
Term or renewal term, as the case may be, or its desire for this Agreement not
to renew. Notwithstanding the expiration of the Term or any renewal Term, for a
period of twelve (12) months following the expiration of this Agreement (i.e.,
the expiration of the Term or any renewal term, as the case may be) EchoStar
shall continue to offer Programming and DISH DBS Receivers pursuant to this
Agreement for all MDU Buildings being served by MDU Dealer on the date of
expiration of this Agreement, including activation of new Qualifying Subscribers
at such MDU Buildings and modifications and cancellations of service.
Notwithstanding anything to the contrary in this Agreement, at any time after
December 31, 2001 during any renewal Term, either party may terminate this
Agreement upon 120 days prior written notice to the other party.
9.2 EXPEDITED DISPUTE RESOLUTION. The parties agree that it is not in
either party's best interest to engage in expensive and protracted litigation to
resolve any dispute between the parties hereto. Accordingly, in the event of any
dispute between the parties that has been or reasonably could be the subject of
a notice of default under Section 9.3 Of this Agreement, each party, upon the
written request of the other party (a "Resolution Request"), agrees to appoint a
designated officer or other senior representative whose task it will be to meet
with the representative of the other party on an expedited basis for the purpose
of resolving the relevant dispute or controversy or to negotiate for an
adjustment to any provision of this agreement which both parties agree would
fairly and appropriately resolve such dispute or controversy. Such
representatives will attempt in good faith to meet in person at EchoStar's
principal place of business in Littleton, Colorado or at another location if
mutually agreeable (unless both parties agree instead to conduct their meeting
via telephone) within ten (10) business days of the date of the Resolution
Request. If a party refuses to meet or fails to attend a meeting with the other
during such ten (10) business day period, such party may not thereafter prevent
the other party (by this Section 9.2) from terminating the Agreement pursuant to
Section 9.3 or, until the parties actually meet or such party is genuinely
available to meet, seek to terminate the Agreement pursuant to Section 9.3. The
parties' representatives will discuss the dispute and negotiate in good faith in
an effort to resolve the dispute or renegotiate the applicable provision of this
Agreement without the necessity of any formal proceeding relating thereto;
provided, neither party shall be obligated by this paragraph to waive a default
by the other party or otherwise compromise any right that it may have. Nothing
contained in this section 9.2 shall prevent either party from notifying the
other at any time of an alleged default pursuant to the provisions of this
Agreement. Any notice of default sent by a party pursuant to Section 9.3 of this
Agreement shall automatically constitute a Resolution Request for purposes of
this Section 9.2 and shall obligate each party to attempt in good faith to meet
as described above. However, once a Resolution Request has been received by a
party, neither party may thereafter terminate this Agreement pursuant to Section
9.3 or commence proceedings for the judicial or arbitrational resolution of a
dispute or controversy that has been or reasonably could be the subject of a
notice of default under Section 9.3 until either or both of the designated
representatives, following such meeting, conclude in good faith that an amicable
resolution through continued negotiation of the matter at issue is not likely to
occur. To the extent any dispute relates to the payment of money to a party, the
other party agrees to pay all amounts not legitimately in dispute within the
time required by this Agreement.
9.3 TERMINATION BY EITHER PARTY UPON DEFAULT. This Agreement may be
terminated by a party (the "Affected Party"), upon the occurrence of any of the
following with respect to the other party (the "Other Party"): (i) the Other
Party commits a payment default which is not cured within ten (1O) business days
of receipt of written notice from the Affected Party; or (ii) the Other Party
defaults on any obligation or breaches any representation, warranty or covenant
in this Agreement or the Trademark License Agreement (regardless of whether
breach or default of such obligation, representation, warranty or covenant is
designated as giving rise to a termination right), and such default or breach,
if curable, is not cured within thirty (30) days of receipt of written notice
from the Affected Party. Notwithstanding the foregoing, in the event of a
payment default notification made pursuant to item (i) in the sentence above, if
the Other party furnishes to the Affected Party all payment amounts which it in
good faith believes it owes the Affected Party, together with details and
documentation establishing the Other Party's contention that the remaining
amount claimed by the Affected Party is not in fact due and owing, then the cure
period shall be extended an additional 16 days. The parties agree that all
obligations, representations, warranties and covenants contained in this
Agreement, whether or not specifically designated as such, are material to the
agreement of the parties to enter into and continue this Agreement.
9.4 ADDITIONAL TERMINATION. This Agreement may be terminated by a
party (the "Affected Party"), upon the occurrence of any of the following with
respect to the other party (the "Other Party"): (i) the Other Party shall become
insolvent, shall admit in writing its inability to pay its debts when due, shall
make a transfer in fraud of its creditors, or all or substantially all of its
assets or its interest in this Agreement are levied on by execution or other
legal process, (ii) the Other Party shall file a petition under any section or
chapter of the U.S. Bankruptcy Code, as amended, or under any similar federal or
state law or statute, or shall be adjudged bankrupt or insolvent in proceedings
filed against it, or a receiver or trustee shall be appointed for all or
substantially all of its assets and such receivership or bankruptcy shall not be
dismissed within sixty (60) days from the appointment of the receiver or
trustee; (iii) the Other Party or any officer, director, or principal of the
Other Party is convicted in a court of competent jurisdiction of any offenses
substantially related to the specific business the subject of this Agreement;
(iv) the Trademark License Agreement terminates for any reason; or (v) the Other
Party intentionally falsifies any records or reports required hereunder. This
Agreement may be terminated by EchoStar if MDU Dealer, for more than twenty (20)
consecutive days following written notice from EchoStar, fails to maintain
operations as a going business.
7
Further, in the event of an occurrence by MDU Dealer described in clause (ii)
above and until such occurrence is cured or the Agreement is terminated,
EchoStar shall have the right to condition any further EchoStar performance
under this Agreement on MDU Dealer providing EchoStar with a security deposit in
good funds, in an amount equal to the average net Programming charges due by MDU
Dealer for the prior six months, to be used to pay any delinquent Programming
charges due by MDU Dealer hereunder, payment in advance for all DISH DBS Systems
or other equipment ordered, payment in full of all outstanding invoices, and
such other reasonable security under the circumstances.
9.5 TERMINATION OF AGREEMENT. MDU Dealer agrees that if this
Agreement terminates for any reason, then MDU Dealer shall:
9.5.1 immediately discontinue the marketing, promotion, and
solicitation of orders for Programming, and immediately cease to represent
and/or imply to any person or entity that MDU Dealer is an Authorized MDU Dealer
for EchoStar;
9.5.2 immediately discontinue all use of the trademarks
associated or included in any way whatsoever with the Programming, including,
without limitation, DISH. Moreover, the Trademark License Agreement shall also
terminate;
9.5.3 deliver to EchoStar, or destroy, at EchoStar's option all
tangible things of every kind in the possession or control of MDU Dealer that
bear any of the trademarks;
9.5.4 upon request by EchoStar, certify in writing to EchoStar
that such delivery or destruction has taken place;
9.5.5 cease to be authorized to purchase DISH DBS Receivers from
EchoStar or any Affiliate of EchoStar;
9.5.6 pay all sums due EchoStar; and
9.5.7 cease all communication with any subscriber of
Programming relating to DISH DBS Receivers or Programming (except for any
communications relating to the termination of the Programming, billing or
collection of any sums due in respect of the Programming or the DISH DBS
Receivers, responding to customer inquiries or disputes, return of leased or
financed (or other disposition or transfer of) DISH DBS Receivers or other
equipment, or MDU Dealer's own products or services).
10. INDEPENDENT CONTRACTOR. The relationship of the parties hereto is that of
independent contractors. Each party shall conduct its business as an independent
contractor, and all persons employed by a party in the conduct of its business
shall be that party's employees only, and not employees or agents of the other
party. Each party represents that it is not dependent on the other for a major
part of its business. It is further understood and agreed that each party has no
right or authority to make any representation, promise or agreement on behalf of
the other except for such representations, promises, or agreements as the other
shall specifically, in writing, authorize. Any such inconsistent or additional
warranty or representation made by a party shall constitute a breach of, and
serve as grounds for termination of this Agreement pursuant to Section 9.3.
11. LIMITATION OF LIABILITY. The provisions of this Section 11 shall survive
termination or expiration of this Agreement indefinitely. IN NO EVENT SHALL
EITHER PARTY OR ANY AFFILIATE OF EITHER PARTY BE LIABLE FOR ANY EXEMPLARY,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES TO THE OTHER (INCLUDING WITHOUT
LIMITATION, ANY PAYMENT FOR LOST BUSINESS, FUTURE PROFITS, LOSS OF GOODWILL,
REIMBURSEMENT FOR EXPENDITURES OR INVESTMENTS MADE OR COMMITMENTS ENTERED INTO,
CREATION OF CLIENTELE, ADVERTISING COSTS, TERMINATION OF EMPLOYEES OR EMPLOYEES
SALARIES, OVERHEAD OR FACILITIES INCURRED OR ACQUIRED BASED UPON THE BUSINESS
DERIVED OR ANTICIPATED UNDER THIS AGREEMENT), WHETHER FORESEEABLE OR NOT, CLAIMS
UNDER DEALER TERMINATION, PROTECTION, NON-RENEWAL OR SIMILAR LAWS, FOR ANY CAUSE
WHATSOEVER WHETHER OR NOT CAUSED BY THE OTHER PARTY'S NEGLIGENCE. IN NO EVENT
SHALL ANY PROJECTIONS OR FORECASTS BY EITHER PARTY BE BINDING AS COMMITMENTS OR
PROMISES BY SUCH PARTY. THE FOREGOING LIMITATIONS OF LIABILITY CONTAINED IN THIS
SECTION SHALL NOT APPLY TO A PARTY'S BREACH OF THE COVENANTS SET FORTH IN
SECTION 13 REGARDING CONFIDENTIALITY OR A BREACH OF THE TRADEMARK LICENSE
AGREEMENT ATTACHED HERETO AS EXHIBIT E. Each party agrees that in the event of
termination of this Agreement for any reason, no amounts spent in its
fulfillment or other consequential damages will be recoverable from the other
party or any of its Affiliates.
12. INDEMNIFICATION. The provisions of this Section 12 shall survive termination
or expiration of this Agreement indefinitely.
12.1 BY ECHOSTAR. EchoStar shall indemnify, defend and hold MDU Dealer and
its Affiliates, and its and their respective officers, directors, employees,
agents and shareholders, and its and their respective assigns, heirs, successors
and legal representatives harmless from and against, any and all costs, losses,
liabilities, damages, lawsuits, judgments, claims, actions, penalties, fines and
expenses (including, without limitation, interest, penalties, reasonable
attorneys' fees and all monies paid in the investigation, defense or settlement
of any or all of the foregoing) ("Claims"), that arise out of, or are incurred
in connection with: (i) EchoStar's failure of performance under this Agreement
and any direct or indirect results thereof; (ii) the breach of any of EchoStar's
representations or warranties herein; (iii) all purchases, contracts, debts
and/or obligations made by EchoStar; (iv) the failure of EchoStar to comply
with, or any violation of, any applicable laws, statute, ordinance, governmental
administrative order, rule or regulation; (v) the failure of EchoStar to comply
with any provision of this Agreement; (vi) the failure of EchoStar to collect
adequate taxes and remit same to EchoStar as required herein; and (vii) any
claim brought by EchoStar's employees or agents for compensation and/or damages
arising out of the expiration or termination of this Agreement.
8
12.2 BY MDU DEALER. MDU Dealer shall indemnify, defend and hold
EchoStar and its Affiliates, and its and their respective officers, directors,
employees, agents and shareholders, and its and their respective assigns, heirs,
successors and legal representatives harmless from and against, any and all
Claims that arise out of, or are incurred in connection with: (i) MDU Dealer's
failure of performance under this Agreement and any direct or indirect results
thereof; (ii) MDU Dealer's unlawful acts or omissions (or those of any of MDU
Dealer's employees or agents, whether or not such acts are within the scope of
employment of such employees or agents) relating to the sale, marketing,
advertisement, promotion or distribution of Programming and DISH DBS Receivers
and equipment; (iii) the breach of any of MDU Dealers representations or
warranties herein; (iv) the failure of MDU Dealer to comply with, or any
violation of, any applicable laws, statute, ordinance, governmental
administrative order, rule or regulation; (v) the failure of MDU Dealer to
comply with any provision of this Agreement; (vi) the failure of MDU Dealer to
collect adequate taxes and remit same to EchoStar as required herein; (vii) any
claim brought by MDU Dealer's employees or agents for compensation and/or
damages arising out of the expiration or termination of this Agreement; (viii)
any claim of pirating infringement or imitation of the logos, trademarks or
service marks of programming providers by MDU Dealer or any party for which it
is responsible; (ix) any Deactivation; (x) billing (including the collection
and payment of any applicable taxes), customer service and support, or failure
to adequately provide same; (xi) the installation, operation or maintenance of
an MDU System or DISH DBS System, or failure to adequately provide same; and
(xii) MDU Dealer's failure to comply in whole or in part with any applicable
federal state or local consumer leasing or financing laws. MDU Dealer shall
further (i.e., expanding rather than limiting the provisions of the preceding
sentence) indemnify, defend and hold EchoStar and its Affiliates, and its and
their respective officers, directors, employees, agents and shareholders, and
its and their respective assigns, heirs, successors and legal representatives
harmless from and against, any and all Claims by MDU Dealer customers only
(including without limitation Qualifying Subscribers, MDU Building owners,
operators, and residents, and all persons and entities solicited as potential
customers by MDU Dealer) that arise out of, or are incurred in connection with:
(i) MDU Dealer's performance or failure of performance under this Agreement and
any direct or indirect results thereof; (ii) MDU Dealer's actual or alleged
acts or omissions (or those of any of MDU Dealer's employees or agents, whether
or not such acts are within the scope of employment of such employees or
agents) relating to the sale, marketing, advertisement, promotion or
distribution of Programming and DISH DBS Receivers and equipment; and (iii) the
failure of MDU Dealer to comply with, or any actual or alleged violation of,
any applicable laws, statute, ordinance, governmental administrative order,
rule or regulation. The provisions of this section 12 shall survive termination
or expiration of this Agreement indefinitely.
13. CONFIDENTIALITY.
13.1 GENERAL. At all times during the term of this Agreement and for
a period of three (3) years thereafter, each party and its employees will
maintain, in confidence, the terms and provisions of this Agreement, as well as
all customer or subscriber lists, marketing information and reports, forecasts,
business plans, data, summaries, reports or information of all kinds, whether
oral or written, acquired, devised or developed in any manner from the other
party's personnel or files, or as a direct or indirect result of such party's
actions or performance under this Agreement, and each party represents that it
has not and will not reveal the same to any persons not employed by such party,
except: (i) at the written direction of the other party; (ii) to the extent
necessary to comply with law, the valid order of a court of competent
jurisdiction or the valid order or requirement of a governmental agency or any
successor agency thereto, in which event such party shall notify the other of
the information in advance, prior to making any disclosure, and shall afford the
other party reasonable opportunity to seek confidential treatment of such
information; (iii) as part of its normal reporting or review procedure to its
parent or otherwise affiliated companies, their auditors and attorneys, provided
such affiliates, auditors and attorneys agree to be bound by the provisions of
this paragraph; or (iv) to the extent necessary to permit the performance of
obligations under this Agreement.
13.2 SUBSCRIBER INFORMATION. All subscribers who subscribe to
Programming services shall be deemed customers of EchoStar for purposes relating
to the Programming and DISH DBS Receivers, and shall be deemed customers of MDU
Dealer for other purposes. MDU Dealer acknowledges and agrees that the names,
addresses and related information of such subscribers ("Subscriber Information")
are as between MDU Dealer and EchoStar, but only to the extent such information
relates to the delivery of Programming and DISH DBS Receivers, proprietary to
EchoStar, and shall be treated with the highest degree of confidentiality by MDU
Dealer. MDU Dealer shall under no circumstance directly or indirectly reveal any
Subscriber Information relating specifically to the delivery of Programming and
DISH DBS Receivers to any third party for any reason without the express prior
written consent of EchoStar, which EchoStar may withhold in its sole and
absolute discretion; provided however, that nothing shall prohibit MDU Dealer
from otherwise utilizing its own customer lists and business information for any
purpose.
13.3 REMEDIES. 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 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
right to exercise any other rights and remedies it may have, including without
limitation, the right to terminate this Agreement and seek damages or other
legal or equitable relief. The foregoing confidentiality obligations will
survive termination of this Agreement.
14. MISCELLANEOUS.
14.1 WAIVER. The failure of any party to insist upon strict
performance of any provision of this Agreement shall not be construed as a
waiver of any subsequent breach of the same or similar nature. All rights and
remedies reserved to either party shall be cumulative and shall not be in
limitation of any other right or remedy which such party may have at law or in
equity.
9
14.2 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.
14.3 SUCCESSOR INTERESTS; ASSIGNMENT. This Agreement is binding upon
the heirs, legal representatives, successors and assigns of EchoStar and MDU
Dealer. Either party may assign this Agreement to an Affiliate in whole or in
part at any time without the consent of the other, provided however that the
assigning party remains liable for all of its obligations under this Agreement.
Other than as provided above, this Agreement shall not be assigned by either
party without the prior written consent of the other party. For purposes of this
subsection, an "Affiliate" shall include, without limitation, any person or
entity succeeding to substantially all of the assets of a party by way of asset
purchase, merger, consolidation or otherwise; provided, however, without
EchoStar's prior written consent, an "Affiliate" may not include any entity
engaged in the direct broadcast satellite (DBS) business.
14.4 CHOICE OF LAW AND EXCLUSIVE JURISDICTION.
14.4.1 The relationship between the parties including 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 without giving any effect to its conflict of law provisions.
14.4.2 Any and all disputes arising out of, or in connection
with, the interpretation, performance or the nonperformance of this Agreement or
any and all disputes arising out of, or in connection with, transactions in any
way related to this Agreement and/or the relationship between the parties
(including but not limited to the termination of this Agreement or the
relationship and either party's rights thereunder or disputes under rights
granted pursuant to statutes or common law, including those in the state in
which MDU Dealer is located) shall be litigated solely and exclusively before a
state or federal court situated in the State of Colorado. The parties consent to
the in personam jurisdiction of said court for the purposes of any such
litigation, and waive, fully and completely, any right to dismiss and/or
transfer any action pursuant to 28 U.S.C.S. 1404 or 1406 (or any successor
statute).
14.5 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. 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, the remaining terms and provisions of
this Agreement shall not be affected thereby, and shall be interpreted as if the
invalid term or provision were not a part hereof.
14.6 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.
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.
14.7 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 regulations, and all amendments thereto, now enacted or
hereafter promulgated in force during the term of this Agreement.
14.8 FORCE MAJEURE. Notwithstanding anything to the contrary in this
Agreement, neither party shall be liable to the other (nor shall an event of
default hereunder be deemed to exist) for failure to fulfill its obligations
hereunder if such failure is caused by or arises out of an act of force majeure
including acts of God, war, riot, natural disaster, technical failure beyond
such party's reasonable control (including the failure of all or part of the
communications satellite, or transponders on which the programming is delivered
to Qualifying Subscribers, or of the related uplinking or other equipment, or
failure of the signal from a programmer supplying EchoStar with the
Programming), or any other reason beyond the reasonable control of such party.
This subsection shall not apply to an obligation by either party for the payment
of money.
14.9 REMEDIES CUMULATIVE. It is agreed that the rights and remedies
herein provided in case of default or breach by a 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 by such party. 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.
14.10 GENERAL PROVISIONS. The terms and conditions attached as
exhibits hereto are fully incorporated into and made a part of this Agreement.
14.11 NOTICES. Any notice required or permitted to be delivered
hereunder shall be in writing and shall be deemed to be delivered (i) upon first
attempted delivery (whether actually received or not) when postmarked by the
U.S. Postal Service, postage prepaid, registered or certified mail, return
receipt requested, or (ii) when delivered by courier or express mail where
evidence of delivery is retained, addressed to the parties at their respective
mailing addresses set forth in the first paragraph of this Agreement, or at such
other address as they have at least ten days theretofore specified by written
notice delivered in accordance herewith.
14.12 YEAR 2000 COMPLIANCE. Each party shall use commercially
reasonable efforts to ensure that: (i) the services and products used to perform
its obligations hereunder, are or will be year 2000 compliant, and (ii) any
failure of the services or products to properly operate during and after the
calendar year 2000 A.D. relating to date data which represents or references
different centuries
10
or more than one century will be corrected, repaired, or replaced (at such
party's option), notwithstanding anything to the contrary in Sections 2.5.2 and
2.6, as soon as possible after detection at such party's sole cost.
14.13 SURVIVAL. All provisions of this Agreement shall survive
termination for a time which is reasonable under the circumstances, regardless
of whether or not such provision is explicitly stated to survive.
14.14 NO PARTNERSHIP. Nothing herein contained shall be construed to
create any partnership or joint venture between the parties.
By signing below, MDU Dealer hereby indicates its acceptance of the
terms of, and agreement to, this Agreement.
Approved by:
ECHOSTAR SATELLITE CORPORATION TVMAX TELECOMMUNICATIONS, INC.
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
--------------------------------- -------------------------------
Title: Executive Vice President Title: President & CEO
------------------------------ ----------------------------
Date: January 14, 1999 Date: January 13, 1999
------------------------------- -----------------------------
11
EXHIBIT A
DISH NETWORK
PROGRAMMING PACKAGES
ECHOSTAR I AND II
AMERICA'S TOP 40
----------------------------------------------------------
$19.99 PER MONTH
$220.00 PER YEAR
==========================================================
A&E History Channel (The)
America's Voice Home & Garden TV
Angel One Home Shopping Network
Cartoon Network (The) Learning Channel (The)
CNBC Lifetime
CNN MTV
Comedy Central Nashville Network (The)
Country Music Television Nickelodeon (East)
Court TV Nickelodeon (West)
C-SPAN Nick at Nite (East)
C-SPAN2 Nick at Nite (West)
Discovery Channel Nick at Nite's TV Land
Disney Channel (East) QVC
Disney Channel (West) Sci-Fi Channel
E! Entertainment TBN
ESPN TBS
ESPN2 TNT
ESPNEWS Travel Channel (The)
EWTN USA Network
Food Network VH1
FOX Family Channel Weather Channel (The)
Headline News
----------------------------------------------------------
- --------------------------------------------------------------------------------
AMERICA'S TOP 100 CD
$28.99 PER MONTH
$320.00 PER YEAR
- --------------------------------------------------------------------------------
AMERICA'S TOP 40
PLUS
AMC WGN Country Currents CD
Animal Planet ZDTV Easy Instrumentals CD
BBC America (1) FOX/SportsChannel Regional Network Eurostyle CD
Black Entertainment Television (BET) Fiesta Mexicana CD
Bravo Hot Hits CD
Classic Sports CD Channels Jazz Traditions CD
CNNFN/CNNI 70s Songbook CD Jukebox Gold CD
CBS Eye on People Adult Alternative CD Kidtunes CD
F/X Adult Contemporary CD Latin Styles CD
Galavision Adult Favorites CD LDS Radio Network CD
Game Show Network Americana CD Light Classical CD
Independent Film Channel Big Band Era CD Modern Rock Alternative CD
M2 Blues CD New Age CD
MSNBC Classic Rock CD New Country CD
Noggin (Available January 1999) Concert Classics CD Non-Stop Hip Hop CD
Romance Classics Contemporary Christian CD Power Rock CD
Toon Disney Contemporary Instrumentals CD Reggae CD
Turner Classic Movies Contemporary Jazz CD Urban Beat CD
Univision Country Classics CD
- --------------------------------------------------------------------------------------------------------------------------------
12
DISH NETWORK
PROGRAMMING PACKAGES
ECHOSTAR I AND II
- ------------------------------------------------------------------------------------------------------------------------------------
DISH PIX PACKAGE PPV
$15.00 PER MONTH
NO ANNUAL AVAILABLE
- ------------------------------------------------------------------------------------------------------------------------------------
A package of 10 channels - NO A LA CARTE AVAILABLE DISH on Demand Prices beginning at $2.99
Choose from services available in AT 40, AT 100 CD or Superstations (excluding 12 Channels
Disney Channel, Toon Disney, Regional Sports Networks, MTV, M2, Nickelodeon,
VH1, Nick At Nite's TV Land, FX, Romance Classics, IFC, Galavision, Univision,
BBC America and ZDTV, Outdoor Channel)
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL SERVICES SPANISH LANGUAGE PACKAGE
A LA CARTE $4.99 PER MONTH
$59.88 PER YEAR
- ------------------------------------------------------------------------------------------------------------------------------------
RAI: $ 9.99 per month or $119.88 per year Includes the following 3 services:
Fox Sports Americas
ANTENNA: $14.99 per month or $179.88 per year Telemundo
HTV
- ------------------------------------------------------------------------------------------------------------------------------------
COMBINATION SUPERSTATION/BROADCAST NETWORKS PREMIUM SERVICES
- ------------------------------------------------------------------------------------------------------------------------------------
Choose Any One: $4.99 per month or $59.88 per year Choose One Premium Pkg: $10.99 per month or
$121.00 per year
Choose Any Two: $7.99 per month or $95.88 per year Choose Two Premium Pkgs: $19.99 per month or
$220.00 per year
Choose All Three: $9.99 per month or $119.88 per year Choose Three Premium Pkgs: $27.99 per month or
$308.00 per year
Choose Four Premium Pkgs: $34.99 per month or
$385.00 per year
PACKAGES AVAILABLE
PREMIUM PACKAGES AVAILABLE
DISHNETS EAST Package
ABC, CBS, NBC, FOX o HBO Package (6 channels)
PBS - National Network Includes 5 channels of HBO plus HBO Family
DISHNETS WEST Package o Showtime Package (8 channels)
ABC, CBS, NBC, FOX* Includes 3 channels of Showtime plus Showtime
PBS - National Network Extreme, 2 channels of TMC, FLIX and Sundance
Channel
*The West Coast FOX feed available September 1, 1998. o MultiChannel Cinemax (3 channels)
Includes 3 channels of Cinemax
SuperStation Package o Encore/STARZ! (4 channels)
KTLA, KWGN, WPIX, WSBK, WWOR Includes 1 channel of Encore, 2 channels of
Starz! and 1 channel of Encore Westerns
- ------------------------------------------------------------------------------------------------------------------------------------
DISH NETS LOCAL BROADCAST NETWORKS PACKAGES ADDITIONAL SERVICES
$4.99 PER MONTH EACH A LA CARTE
- ------------------------------------------------------------------------------------------------------------------------------------
LOS ANGELES NEW YORK Disney Channel: $9.99 per month
DMA DMA (Both East and West)
ABC - KABC ABC - WABC The Golf Channel: $4.99 per month or
$59.88 per year
CBS - KCBS CBS - WCBS
NBC - KNBC NBC - WNBC Outdoor Channel: $1.99 month or
$23.88 per year
FOX - KTTV FOX - WNYW
PBS - National PBS - National DISH CD: $4.99 per month or
$59.88 per year
- --------------------------------------------------------------------------------
ADULT SERVICES Single Broadcast Networks: $1.50 each
A LA CARTE
- --------------------------------------------------------------------------------
MultiSport Package: $4.99 per month or
Playboy: $12.99 per month (must subscribe to AT 100 CD) $59.88 per year
Adult Vision: $5.99 per 90 minute block
TeN $14.95 per month
$164.45 per year
- ------------------------------------------------------------------------------------------------------------------------------------
All prices, packages and programming subject to change
without notice. Updated 12/14/98
13
DISH NETWORK
ECHOSTAR III
- -----------------------------------------------------------------------------------------------------------------------------------
LOCAL NETWORK PACKAGES
$4.99 PER MONTH EACH INTERNATIONAL SERVICES
- -----------------------------------------------------------------------------------------------------------------------------------
ATLANTA BOSTON TV5 (French): $ 9.99 per month
DMA DMA $119.88 PER YEAR
ABC - WSB ABV - WCVB RTPi (Portuguese) $ 4.00 per month
CBS - WGNX CBS - WBZ (must subscribe to AT40 or AT 100) $ 48.00 per year
FOX - WAGA FOX - WFXT
NBC - WXIA NBC - WHDH TV Japan (Japanese) $ 25.00 per month
PBS - NATIONAL PBS - NATIONAL $300.00 per year
TV Polonia (Polish) $ 14.99 per month*
(must also subscribe to 2 Polskie $179.88 per year*
Radio Services)
ART (Arabic) $ 19.99 per month
- ----------------------------------------------------------------------- ART Movies (Arabic) $239.88 per year
CHICAGO DALLAS LBC (Arabic from Lebanon)
DMA DMA (these three services sold only
as a package/no a la carte available)
ABC - WLS ABC - WFAA
CBS - WBBM CBS - KTVT ZEE TV (Hindi) $ 14.99 per month
FOX - WFLD FOX - KDFW $ 179.88 per year
NBC - WMAQ NBC - KXAS
PBS - NATIONAL PBS - NATIONAL TV Asia (Hindi/English/Gujarati) $ 14.99 per month
$179.88 per year
ZEE TV and TV Asia Package $ 24.99 per month
$299.88 per year
- -----------------------------------------------------------------------------------------------------------------------------------
MIAMI NEW YORK INTERNATIONAL RADIO SERVICES
DMA DMA -----------------------------------------------------------
RFI: $ 1.00 per month
ABC - WPLG ABC - WABC (Radio France Internationale) $12.00 per year
CBS - WFOR CBS - WCBS
FOX - WSVN FOX - WNYW Polskie Radio Program 1 $ 4.99 month*
NBC - WTVJ NBC - WNBC Polskie Radio Program 3 $59.88 per year*
PBS - NATIONAL PBS - NATIONAL (must subscribe to the 2 Polskie
Radio and I TVPolonia video services)
Radio Maria Italy (Italian) $ 5.00 per month
$55.00 per year
Radio Maria Poland (Polish) $ 5.00 per month
$55.00 per year
Radio Maria Spanish $ 5.00 per month
$55.00 per year
- -----------------------------------------------------------------------------------------------------------------------------------
PITTSBURGH WASHINGTON, D.C. A LA CARTE
DMA DMA ------------------------------------------------------------
NASA Channel Free Access
ABC - WTAE ABC - WJLA
CBS - KDKA CBS - WUSA Bloomberg $ 1.50 per month
NBC - WPXI FOX - WTTG $18.00 per year
FOX - WPGH NBC - WRC
PBS - National PBS - NATIONAL -----------------------------------------------------------
PPV
-----------------------------------------------------------
Dish on Demand Prices beginning at $2.99
5 Channels
*Must subscribe to 1 TVPolonia video and 2 Polskie Radio Services
All prices, packages and programming subject to change without notice. Updated 12/14/98
- -----------------------------------------------------------------------------------------------------------------------------------
14
DISH NETWORK
ECHOSTAR IV
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL SERVICES
- ------------------------------------------------------------------------------------------------------------------------------------
DENVER PHOENIX TV Japan (Japanese) $ 25.00 per month
DMA DMA $300.00 per year
ABC - KMGH ABC - KNXV ART (Arabic) $ 19.99 per month
CBS - KCNC CBS - KPHO ART Movies (Arabic) $239.88 per year
NBC - KUSA NBC - KPNX LBC (Arabic from Lebanon)
FOX - KDVR FOX - KSAZ (these three services sold only
PBS - NATIONAL PBS - NATIONAL as a package/no a la carte
available)
- --------------------------------------------------------------------------------
ZEE TV (Hindi) $ 14.99 per month
SALT LAKE CITY SAN FRANCISCO $ 179.88 per year
DMA DMA TV Asia (Hindi/English/Gujarati) $ 14.99 per month
ABC - KTVX ABC - KGO $ 179.88 per year
CBS - KUTV CBS - KPIX ZEE TV and TV Asia Package $ 24.99 per month
NBC - KSL NBC - KRON $ 299.88 per year
FOX - KSTU FOX - KTVU
PBS - NATIONAL PBS - NATIONAL
- ------------------------------------------------------------------------------------------------------------------------------------
PPV A LA CARTE
- ------------------------------------------------------------------------------------------------------------------------------------
DISH on Demand Prices beginning at $2.99 Bloomberg $1.50 per month
5 Channels $ 18.00 per year
- ------------------------------------------------------------------------------------------------------------------------------------
All prices, packages and programming subject to change without notice. Updated 12/14/98
15
EXHIBIT B
BILLING AND PAYMENT TERMS AND CONDITIONS
The following are EchoStar's current billing and payment terms and conditions,
and (except for payment terms) are subject to change. In the event of a conflict
between this Exhibit B and the agreement to which this Exhibit B is attached,
the agreement shall control.
ORDERING EQUIPMENT
Event Responsibility
- ------------------------------------------------------------------------------------------------------------------------------------
1. OpTel faxes purchase order for hardware to EchoStar Commercial Services OpTel
2. EchoStar Commercial Services accepts or rejects purchase order:
-Orders accepted before 10:30 AM Mountain time ordinarily shipped same day EchoStar
-Orders accepted after 10:30 AM Mountain time ordinarily shipped next business day
3. Receivers purchased in this manner or from one of the Echosphere Regional offices OpTel/EchoStar
will be eligible for 20% programming commissions (subject to the terms of the agreement).
**(MATERIAL DENOTED *** HAS BEEN SEPARATELY FILED WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIALITY)
OpTel/EchoStar
PROGRAM BILLING
Event Responsibility
- ------------------------------------------------------------------------------------------------------------------------------------
1. All billing of programming will be as set forth in this Agreement EchoStar
BILLING CYCLE FLOW CHART (CALENDAR DATES ARE HYPOTHETICAL AND FOR ILLUSTRATION ONLY):
Account Activated on: date activation requested June 8, 1998
First Bill Sent: approx. activation date [June and July service)
First Bill Due: (MATERIAL DENOTED *** HAS BEEN SEPARATELY FILED WITH THE COMMISSION
First Bill Delinquent: PURSUANT TO AN APPLICATION FOR CONFIDENTIALITY)
First Bill Late
Second Bill Sent: July 16, 1998 [August service)
(MATERIAL DENOTED *** HAS BEEN SEPARATELY FILED WITH THE COMMISSION
Soft Disconnect*: PURSUANT TO AN APPLICATION FOR CONFIDENTIALITY)
Second Bill Due:
Hard Disconnect*:
FEES AND DISCLOSURES: (MATERIAL DENOTED *** HAS BEEN SEPARATELY FILED WITH THE COMMISSION PURSUANT TO AN APPLICATION
FOR CONFIDENTIALITY)
Transaction Fee $5.00 Sidegrades or downgrades of service; PPV movie purchase done by
CSR (non-impulse)
Additional Outlet Fee $4.99 Programming charge for additional receivers.
PPV Disclosures Dish-on-Demand PPV is NON-REFUNDABLE; Channel locks should be set up
to prevent accidental purchase; Phone line must be connected.
16
INVOICE INFORMATION AND FORMAT: (MATERIAL DENOTED *** HAS BEEN SEPARATELY FILED
WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIALITY)
PAYMENT TERMS
BILLING OF NOT-RECURRING PROGRAMMING: (MATERIAL DENOTED *** HAS BEEN SEPARATELY
FILED WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIALITY)
17
EXHIBIT C
PROGRAMMING ORDERS AND ACTIVATION
The following are EchoStar's current procedures for programming orders and
activation, and are subject to change. In the event of a conflict between this
Exhibit B and the agreement to which this Exhibit B is attached, the agreement
shall control. All time limits represent intended limits and are not to be
interpreted as a guarantee.
OpTel/EchoStar Order Entry Process
Expected Flow Process
NEW CUSTOMER
Event Responsibility
- ------------------------------------------------------------------------------------------------------------------
1. OpTel Call Center accepts new order from resident OpTel
2. OpTel Call Center schedules order for installation OpTel
3. Work order is fulfilled by technician OpTel
4. Technician installs set top equipment and calls EchoStar for authorization OpTel/EchoStar
5. Authorization signal is sent and records are updated with EchoStar EchoStar
6. Technician confirms installation and activation of programming and
closes work order through dispatch center OpTel
7. Billing begins for new customer effective upon activation OpTel
8. OpTel is invoiced for customer subscription EchoStar
MOVES, ADDS, CHANGES
Event Responsibility
- ------------------------------------------------------------------------------------------------------------------
1. OpTel Call Center accepts change of service request from customer OpTel
2. OpTel Call Center commits 48-hour completion of order to customer OpTel
3. OpTel Call Center codes order as "office only" with special campaign code and "future
billing" codes to generate automatic billing OpTel
4. Report is generated nightly selecting codes used for EchoStar changes OpTel
5. Report is faxed to EchoStar with authorization request within 24 hours of order OpTel
6. Authorization signal is sent within 24 hours from receipt of OpTel report and
records are updated with EchoStar EchoStar
7. OpTel is invoiced for customer subscription EchoStar
DISCONNECTS
Event Responsibility
- ------------------------------------------------------------------------------------------------------------------
1. OpTel Call Center accepts disconnect request OpTel
2. OpTel Call Center schedules disconnect of service and set top recovery OpTel
3. Work order is fulfilled by technician OpTel
4. Technician disconnects set top and calls EchoStar for de-authorization OpTel/EchoStar
5. Authorization signal is terminated and records are updated with EchoStar EchoStar
6. Technician closes work order through dispatch center OpTel
7. Billing terminates for customer OpTel
8. OpTel is no longer billed for customer subscriber EchoStar
18
Today's Date: Your company Dealer Rec
------- xxxxxxxxxxxxxx
Est. Final Activation Date: #
------
OpTel - DISH Network
DBS Service Request Form
Exhibit D to MDU Dealer Agreement
1. PLEASE CHECK THE COMMERCIAL PROPERTY TYPE THAT APPLIES:
Hotel Hospital Condo MHP Other Bulk Nun Retirement Home
-------- --------- --------- ---------- --------------------------
===========================================================================================================================
2. DBS SYSTEM TYPE: L-Band: Transport: L-Band/Tranport
---------------------- ----------------- -----------------------------
AGENT CODE:
--------- --------- ---------
3. PROPERTY INFORMATION: 4. BILLING INFORMATION:
PROPERTY NAME: COMPANY NAME
- -------------------------------------------------- --------------------------------------------------
ADDRESS MAILING ADDRESS
- -------------------------------------------------- --------------------------------------------------
- -------------------------------------------------- --------------------------------------------------
CITY STATE CITY STATE
- -------------------------------------------------- --------------------------------------------------
ZIP CODE ZIP CODE
- -------------------------------------------------- --------------------------------------------------
TELEPHONE NUMBER: TELEPHONE NUMBER:
- -------------------------------------------------- --------------------------------------------------
GENERAL CONTACT: FAX NUMBER:
- -------------------------------------------------- --------------------------------------------------
BILLING CONTACT:
--------------------------------------------------
TOTAL NUM. OF UNITS @ SITE: TECHNICAL CONTACT:
- -------------------------------------------------- --------------------------------------------------
MARKETING CONTACT:
--------------------------------------------------
5. IF L-BAND - NUMBER OF BOXES NEEDED: 6. TOTAL NUMBER OF RECEIVERS
Total Number of Services Requested:
--------------------------------------------------
n/a (# of boxes X $200.00) (taken from the attached Activation Form)
- -------------------------------------------------- Multiply this # by the figure in Schedule A of the
7. TOTAL DUE: (from #4 & #5 above) Attachment to the Affiliate Agreement.
$ X $7.00 X 12 = #VALUE!
- -------------------------------------------------- ---------------------------------------------------
SERVICE DSR RECEIVER NO. DSR SMART CARD NO
(include e or w) Example: R009912345 (11 digits) S0000123456 (11 digits)
- ---------------- ------------------------------- -----------------------
- --------------- ------------------------------------ -------------------------------------------
- --------------- ------------------------------------ -------------------------------------------
- --------------- ------------------------------------ -------------------------------------------
- --------------- ------------------------------------ -------------------------------------------
- --------------- ------------------------------------ -------------------------------------------
- --------------- ------------------------------------ -------------------------------------------
- --------------- ------------------------------------ -------------------------------------------
- --------------- ------------------------------------ -------------------------------------------
- --------------- ------------------------------------ -------------------------------------------
- --------------- ------------------------------------ -------------------------------------------
OpTel
- -----------------------------------------------------------------
Signature
- -----------------------------------------------------------------
Type Name and Title
- -----------------------------------------------------------------
Page 1 of _______
ECHO FAX: 800-906-4826
Voice: 800-454-0843
19
EXHIBIT E
TRADEMARK LICENSE AGREEMENT
THIS TRADEMARK LICENSE AGREEMENT (the "Agreement") is effective
as of the ____________ day of ___________________________, 1999, by and between
EchoStar Satellite Corporation having a principal place of business at 5701
S. Santa Fe Drive, Littleton, Colorado 80120 ("EchoStar"), and TVMAX
Telecommunications, Inc., d/b/a OpTel, having a principal place of business at
1111 West Mockingbird Lane, 10th Floor, Dallas, Texas 75247, Attn: Vice
President - Marketing ("Licensee").
A. ESC conducts business in worldwide locations as, among other
things, a provider of direct broadcast satellite-delivered, multi-channel,
digital audio and video services ("Programming") to commercial subscribers;
and
B. Licensee conducts business as, among other things, an MDU Dealer
of satellite television products and services to commercial subscribers;
and
C. Licensee desires to be permitted to use the EchoStar trademarks,
service marks and trade names set forth in Exhibit A hereto, as amended
from time to time in ESC's sole discretion (the "Trademarks") as ESC, in
its sole discretion, may authorize, from time to time, under a
non-exclusive license, to promote and solicit orders for DISH Network
Programming.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. ESC hereby grants to Licensee a non-exclusive, non-transferable,
revocable license (the "License") to use the Trademarks and such other
trademarks as ESC may from time to time expressly in writing permit
Licensee to use during the term of this Agreement, and no other term or
license whatsoever, in its local advertising and promotional materials and
at its business locations. Licensee shall have no right to use the logos,
service marks or trademarks of any programming providers, other than the
logos, service marks and trademarks of programming providers that are
contained in the advertising and promotional material provided to Licensee
by ESC. No such materials shall indicate that any agreement of agency,
partnership, joint venture, franchise or of exclusive or non-exclusive
distributor exists between Licensee and ESC, unless ESC and Licensee enter
into a separate written agreement permitting Licensee to do so.
Notwithstanding the above, Licensee shall provide to ESC, at least fifteen
(15) days prior to first use, an example of any advertising or promotional
materials in which Licensee intends to use any Trademarks, and any such
other trademarks, which use has not, within the past twelve months, been
approved by ESC in substantially the form intended for use. ESC may reject
and prohibit Licensee from using such materials if ESC believes that MDU
Dealer's intended use would violate any agreement to which ESC is bound
concerning the Trademarks or if ESC believes that MDU Dealer's intended use
could tend to damage, disparage, diminish or otherwise injure any of the
Trademarks or ESC or ESC's image or goodwill. ESC shall notify MDU Dealer
in writing of its approval or disapproval of any proposed advertising or
promotional materials or other use of any Trademark within ten (10) days
from its receipt of same, failing which (evidenced by the passage of one
business day following receipt by ESC of notice from MDU Dealer of such
failure) ESC shall be deemed to have approved of MDU Dealer's intended use.
If Licensee is required to, but fails to provide ESC with proposed
advertising or promotional materials at least fifteen (15) days prior to
first use, ESC shall have just cause to immediately terminate the License
by providing written notice to Licensee to that effect. This Agreement is
not intended, nor shall it be construed, as creating any agreement of
agency, partnership, joint venture, franchise or of exclusive or
non-exclusive distributor, or as creating any obligation on the part of ESC
to enter into any such agreement with Licensee. Further, this Agreement is
not intended, nor shall it be construed, as providing any rights to
Licensee to purchase or sell products or programming manufactured and/or
distributed by ESC. Licensee expressly recognizes and agrees that any
goodwill now existing or hereafter created through any sales by Licensee of
products or programming manufactured and/or distributed by ESC, shall inure
to ESC's sole benefit. This License shall be effective until terminated by
either party in accordance with the terms of this Agreement, or until
termination of the MDU Dealer Agreement between ESC and Licensee.
2. The License granted by ESC is granted to Licensee only. Licensee
has no authority to transfer or grant any sublicense to any other entity or
individual (except for any subsidiary or affiliated entity through which
MDU Dealer, in accordance with Section 6.1 of the MDU Dealer Agreement, may
provide programming to an MDU Building (as defined in the MDU Dealer
Agreement), which entity shall also be bound by the restrictions, terms and
conditions contained herein) for any reason, and if Licensee does so, such
action shall terminate the License granted herein, at ESC's option, at any
time thereafter. Licensee shall immediately cease using Trademarks upon
termination or expiration of this Agreement for any reason. Upon expiration
or termination of this Agreement, at ESC's option Licensee shall
immediately destroy or deliver to ESC any and all advertising and
promotional materials in Licensee's possession with Trademarks on them. If
ESC requests destruction of advertising and promotional materials, Licensee
shall promptly execute an affidavit representing at a minimum that such
materials were destroyed, and the date and means of destruction.
3. Licensee expressly recognizes and acknowledges that the License,
as well as any past use of the Trademarks in any manner whatsoever by
Licensee (including but not limited to use on signs, business cards, or in
advertisements), shall not confer upon Licensee any proprietary rights or
interest to any Trademarks including, but not limited to any existing or
future goodwill in the Trademarks. All goodwill in the Trademarks shall
inure to ESC's sole benefit. Further, Licensee waives any and all past,
present, or future claims it has or might have to the Trademarks, and
acknowledges that as between ESC and Licensee, ESC has the exclusive rights
to own and use the Trademarks, and that ESC retains full ownership of the
Trademarks notwithstanding the License granted herein. While Licensee has
no right or authority to do so, in the event that Licensee has previously,
or in the future reserves, files, or registers any of the Trademarks of
ESC, Licensee agrees to notify ESC immediately, and immediately upon
request of ESC, to assign any and all interest to ESC that is obtained
through the reservation, filing, or registration of the Trademarks in the
U.S. or any foreign jurisdiction, and hereby acknowledges that any such
reservation, filing, or registration of the Trademarks, whenever occurring,
shall be on behalf of and for the sole benefit of ESC, and Licensee waives
all claims or rights to any compensation whatsoever therefor. Licensee's
obligations in this paragraph shall survive the expiration or termination
of this Agreement.
4. Nothing in this Agreement shall be construed to bar ESC from
protecting its right to the exclusive use of its Trademarks against
infringement thereof by any party or parties, including Licensee, either
during the term of this Agreement or following any expiration or
termination
20
EXHIBIT E
TRADEMARK LICENSE AGREEMENT
THIS TRADEMARK LICENSE AGREEMENT (the "Agreement") is
effective as of the _______ day of _____________________, 1999, by and between
EchoStar Satellite Corporation having a principal place of business at 5701 S.
Santa Fe Drive, Littleton, Colorado 80120 ("EchoStar"), and TVMAX
Telecommunications, Inc., d/b/a OpTel, having a principal place of business at
1111 West Mockingbird Lane, Dallas, Texas 75247, Attn: Vice President -
Marketing ("Licensee").
A. ESC conducts business in worldwide locations as, among other
things, a provider of direct broadcast satellite-delivered, multi-channel,
digital audio and video services ("Programming") to commercial subscribers; and
B. Licensee conducts business as, among other things, an MDU Dealer of
satellite television products and services to commercial subscribers; and
C. Licensee desires to be permitted to use the EchoStar trademarks,
service marks and trade names set forth in Exhibit A hereto, as amended from
time to time in ESC's sole discretion (the "Trademarks") as ESC, in its sole
discretion, may authorize, from time to time, under a non-exclusive license, to
promote and solicit orders for DISH Network Programming.
Now, THEREFORE, the parties hereto hereby agree as follows:
1. ESC hereby grants to Licensee a non-exclusive, non-transferable,
revocable license (the "License") to use the Trademarks and such other
trademarks as ESC may from time to time expressly in writing permit Licensee to
use during the term of this Agreement, and no other term or license whatsoever,
in its local advertising and promotional materials and at its business
locations. Licensee shall have no right to use the logos, service marks or
trademarks of any programming providers, other than the logos, service marks and
trademarks of programming providers that are contained in the advertising and
promotional material provided to Licensee by ESC. No such materials shall
indicate that any agreement of agency, partnership, joint venture, franchise or
of exclusive or non-exclusive distributor exists between Licensee and ESC,
unless ESC and Licensee enter into a separate written agreement permitting
Licensee to do so. Notwithstanding the above, Licensee shall provide to ESC, at
least fifteen (15) days prior to first use, an example of any advertising or
promotional materials in which Licensee intends to use any Trademarks, and any
such other trademarks, which use has not, within the past twelve months, been
approved by ESC in substantially the form intended for use. ESC may reject and
prohibit Licensee from using such materials if ESC believes that MDU Dealer's
intended use would violate any agreement to which ESC is bound concerning the
Trademarks or if ESC believes that MDU Dealers intended use could tend to
damage, disparage, diminish or otherwise injure any of the Trademarks or ESC or
ESC's image or goodwill. ESC shall notify MDU Dealer in writing of its approval
or disapproval of any proposed advertising or promotional materials or other use
of any Trademark within ten (10) days from its receipt of same, failing which
(evidenced by the passage of one business day following receipt by ESC of notice
from MDU Dealer of such failure) ESC shall be deemed to have approved of MDU
Dealer's intended use. If Licensee is required to, but fails to provide ESC with
proposed advertising or promotional materials at least fifteen (15) days prior
to first use, ESC shall have just cause to immediately terminate the License by
providing written notice to Licensee to that effect. This Agreement is not
intended, nor shall it be construed, as creating any agreement of agency,
partnership, joint venture, franchise or of exclusive or non-exclusive
distributor, or as creating any obligation on the part of ESC to enter into any
such agreement with Licensee. Further, this Agreement is not intended, nor shall
it be construed, as providing any rights to Licensee to purchase or sell
products or programming manufactured and/or distributed by ESC. Licensee
expressly recognizes and agrees that any goodwill now existing or hereafter
created through any sales by Licensee of products or programming manufactured
and/or distributed by ESC, shall inure to ESC's sole benefit. This License shall
be effective until terminated by either party in accordance with the terms of
this Agreement, or until termination of the MDU Dealer Agreement between ESC and
Licensee.
2. The License granted by ESC is granted to Licensee only. Licensee
has no authority to transfer or grant any sublicense to any other entity or
individual (except for any subsidiary or affiliated entity through which MDU
Dealer, in accordance with Section 6.1 of the MDU Dealer Agreement, may provide
programming to an MDU Building (as defined in the MDU Dealer Agreement), which
entity shall also be bound by the restrictions, terms and conditions contained
herein) for any reason, and if Licensee does so, such action shall terminate the
License granted herein, at ESC's option, at any time thereafter. Licensee shall
immediately cease using Trademarks upon termination or expiration of this
Agreement for any reason. Upon expiration or termination of this Agreement, at
ESC's option Licensee shall immediately destroy or deliver to ESC any and all
advertising and promotional materials in Licensee's possession with Trademarks
on them. If ESC requests destruction of advertising and promotional materials,
Licensee shall promptly execute an affidavit representing at a minimum that
such materials were destroyed, and the date and means of destruction.
3. Licensee expressly recognizes and acknowledges that the License, as
well as any past use of the Trademarks in any manner whatsoever by Licensee
(including but not limited to use on signs, business cards, or in
advertisements), shall not confer upon Licensee any proprietary rights or
interest to any Trademarks including, but not limited to any existing or future
goodwill in the Trademarks. All goodwill in the Trademarks shall inure to ESC's
sole benefit. Further, Licensee waives any and all past, present, or future
claims it has or might have to the Trademarks, and acknowledges that as between
ESC and Licensee, ESC has the exclusive rights to own and use the Trademarks,
and that ESC retains full ownership of the Trademarks notwithstanding the
License granted herein. While Licensee has no right or authority to do so, in
the event that Licensee has previously, or in the future reserves, files, or
registers any of the Trademarks of ESC, Licensee agrees to notify ESC
immediately, and immediately upon request of ESC, to assign any and all interest
to ESC that is obtained through the reservation, filing, or registration of the
Trademarks in the U.S. or any foreign jurisdiction, and hereby acknowledges that
any such reservation, filing, or registration of the Trademarks, whenever
occurring, shall be on behalf of and for the sole benefit of ESC, and Licensee
waives all claims or rights to any compensation whatsoever therefor. Licensee's
obligations in this paragraph shall survive the expiration or termination of
this Agreement.
4. Nothing in this Agreement shall be construed to bar ESC from
protecting its right to the exclusive use of its Trademarks against infringement
therefore by any party or parties, including Licensee, either during the term of
this Agreement or following any expiration or termination
21
of Licensee's right to use the Trademarks pursuant to this Agreement. Licensee
will promptly and fully advise ESC of any use of any mark that may appear to
infringe the Trademarks. Licensee will also fully cooperate with ESC in defense
and protection of the Trademarks, at ESC's expense. Similarly, nothing in this
Agreement shall be construed to require that ESC take any action to protect the
Trademarks in any instance, and ESC shall not be liable to Licensee in any
manner whatsoever for failure to take any such action.
5. This Agreement shall continue for a period of time equal to the
term of the MDU Dealer Agreement between ESC and Licensee, unless terminated
earlier for a reason provided herein.
6. Any and all disputes, claims or actions that may arise under or out
of this Agreement shall be governed, interpreted and enforced in accordance with
the laws of the State of Colorado, and shall otherwise be resolved in accordance
with the provisions set forth in Section 14.4 of the MDU Dealer Agreement
between ESC and Licensee, to which this Trademark License Agreement is attached.
7. This Agreement may be executed in two or more counterparts, each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized representatives as of the day and year first above
written.
ECHOSTAR SATELLITE CORPORATION TVMAX TELECOMMUNICATIONS, INC.
By: [ILLEGIBLE] By: [ILLEGIBLE]
---------------------------------- -------------------------------------
Title: Executive Vice President Title: President & CEO
------------------------------- ----------------------------------
22
EXHIBIT A TO TRADEMARK LICENSE AGREEMENT
[ECHOSTAR LOGO]
[DISH
[NETWORK LOGO]
[DISH LOGO]