CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH “**”. AN UNREDACTED VERSION OF THIS DOCUMENT HAS ALSO BEEN PROVIDED TO THE SECURITIES AND EXCHANGE COMMISSION. CONTRACT FOR...
Exhibit
10.23
CONFIDENTIAL
TREATMENT REQUESTED: INFORMATION FOR WHICH
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND
MARKED WITH “**”. AN UNREDACTED VERSION OF THIS DOCUMENT HAS
ALSO BEEN PROVIDED TO THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND
MARKED WITH “**”. AN UNREDACTED VERSION OF THIS DOCUMENT HAS
ALSO BEEN PROVIDED TO THE SECURITIES AND EXCHANGE COMMISSION.
THIS AGREEMENT, dated as of January 4,
2010 (“Effective
Date”) (together with the schedules, appendices, attachments and exhibits
attached hereto and hereby incorporated herein in their entirety by reference)
(“Agreement”),
by and among DISH Network L.L.C., a Colorado company having its principal office
at
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(“Company”),
NeuLion USA, Inc., a Delaware corporation having its principal place of business
at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (“NeuLion”) and solely
for purposes of Section 34 of this Agreement, NeuLion, Inc., an Ontario
corporation having its principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (“Parent”), each of
Company and NeuLion being a “Party”, and together,
the “Parties”. For
purposes of this Agreement, “Affiliate” shall mean
any person or entity directly or indirectly controlling, controlled by or under
common control with another person or entity, which for NeuLion currently
include, without limitation, the entities that directly or indirectly control
the IPTV services known as Talfazat, TV-Desi and KyLinTV. For clarity
(and without limitation of the foregoing), a division or department of NeuLion
shall be an Affiliate of NeuLion for purposes of this Agreement.
W I T N E
S S E T H:
WHEREAS, Company desires to hire
NeuLion to provide certain services on a non-exclusive basis in connection with
Company’s offering of a subscription-based, Company-branded, pay internet
protocol television (“IPTV”) service to
consumers and other potential customers in the United States, its territories
and possessions, and such other locations as the Parties agree to offer the
Service (as defined in Section 2 below) (the “Territory”), as
further described in this Agreement;
WHEREAS,
on a non-exclusive basis and as further described in this Agreement, NeuLion
desires to provide such services to Company, including without limitation, the
provisioning and support of a customizable, end-to-end IPTV service utilizing
NeuLion’s IPTV-related software, systems and personnel (collectively, “NeuLion’s IPTV
Platform”), for which IPTV service Company will provide the Content (as
defined in Section 2 below); and
WHEREAS,
subject to the terms and conditions of this Agreement, in connection with the
foregoing, Company desires to purchase from NeuLion, and NeuLion desires to
supply to Company, on a non-exclusive basis, set-top boxes manufactured under
license of NeuLion (“Set-Top Boxes” or
“STBs”) and
bearing the brand name of Company (or such other brand name(s) as may be
designated by Company in accordance with this Agreement) for sale, lease or
other transfer to third parties (including without limitation, through any of
Company’s Affiliates and/or through Company’s or any of its Affiliate’s
retailers or distributors);
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NOW, THEREFORE, in consideration of the
premises and mutual covenants contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
1. Term. This
Agreement shall commence on the Effective Date and expire on May 15, 2013 (the
“Initial
Term”), unless earlier terminated as otherwise provided for
herein. In the event that there are ******* Subscribers (as
defined in Section 2 below) in the aggregate across all languages offered (the
“Renewal
Minimum”) as of the date that is sixty (60) days prior to the last day of
the Initial Term, Company shall have the option (but not the obligation), in its
sole discretion for any reason or no reason, to extend this Agreement for an
additional three (3) year period (the “Renewal
Term”). If Company elects to exercise its option to extend
this Agreement for the Renewal Term, Company shall provide NeuLion with written
notice of such election no later than sixty (60) days prior to the last day of
the Initial Term of this Agreement. Except as otherwise expressly
provided for herein, such renewal shall be on the same terms and conditions as
provided for during the Initial Term (inclusive of, without limitation, the fees
set forth in Exhibit C hereto). If the number of Subscribers has not
reached the Renewal Minimum as of the date that is sixty (60) days prior to the
last day of the Initial Term, Company may nonetheless exercise its option to
renew as described in this Section 1, provided that during the Renewal Term, the
Operations Fees payable by Company to NeuLion as set forth in Section B.1. of
Exhibit C hereto shall be calculated using *******. As used herein,
“Term” shall
mean the Initial Term and the Renewal Term, if any.
2. NeuLion
Services. As more fully described in Exhibit A hereto, the
services to be provided to Company by NeuLion under this Agreement (the “NeuLion Services”)
shall consist of the setup and operation of an end-to-end standard definition,
white-labeled IPTV service to be branded and made available by Company to
consumers and other customers (as determined by Company at any time and from
time to time in its sole discretion for any reason or no reason) in the
Territory (the “Service”), in
addition to any other services and deliverables as may be set forth in this
Agreement, including without limitation the provisioning of STBs by NeuLion to
Company for resale, lease or other transfer in Company’s sole discretion to
Subscribers (as defined below) so that Subscribers may receive and view the
Service. For clarity (and without limitation of any of the
foregoing), the Service is separate and apart from the NeuLion Services and is
the product resulting from the combination of, among other things as hereinafter
set forth, the NeuLion Services on the one hand, and the audio, video, data and
other content for the Service that is provided to NeuLion by Company and/or its
Affiliates at any time and from time to time during the Term and the Wind Down
Period in their sole discretion for the Service (“Content”), on the
other hand. To the extent Company elects in its sole discretion for
any reason or no reason to do so, Company shall be responsible for all
advertising and marketing of the Service. In addition to (and without
limitation of any of the foregoing or any other provision of this Agreement),
NeuLion shall be solely and exclusively responsible for ensuring that the
NeuLion Services and all components of the Service other than the Content comply
with applicable Laws (as defined in Section 6 below). For further
clarity, the Service is intended to be delivered to Subscribers through a STB
for viewing on a monitor or television set and is not intended to be delivered
directly to Subscribers through a personal computer or mobile device
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& Confidential
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(other than a
STB) for viewing thereon. Except as provided for in Exhibit C,
Section B (4), the Parties acknowledge and agree that no minimum number of
customers or subscribers to the Service (collectively, “Subscribers”),
whether calculated on a cumulative, per Reporting Period (as defined in Section
I.2 of Exhibit A hereto) or other basis, to the Service shall be required for
NeuLion to perform its obligations hereunder and that Company has made no
guarantees or assurances as to any minimum number of
Subscribers. Notwithstanding anything set forth to the contrary
herein, NeuLion shall not in any way, directly or indirectly: (a) use the
Service, the packaging in which STBs are shipped to Subscribers (including
without limitation the literature and documentation accompanying such STBs), or
any of the STB Components, to market, promote, solicit orders for or sell any
product or service other than the Service itself or such other product(s) and/or
service(s) as may be expressly authorized by Company in a writing signed by a
Senior Vice President or an Executive Vice President of Company (or his/her
designee); or (b) use the STBs for any purpose other than the provisioning of
the Service, or in connection with their resale as provided for in Section 3
hereof. The provisions of the immediately preceding sentence shall
survive expiration or termination of this Agreement for any reason
indefinitely.
3. Set Top Boxes.
Subject to the terms and conditions of this Agreement (including without
limitation those set forth in the exhibits attached hereto), NeuLion agrees to
sell to Company certain STBs for re-sale, lease or other transfer by Company
(including without limitation through one or more Company Affiliates, or through
Company’s or any of its Affiliate’s retailers or distributors) to enable
Subscribers to use the Service, including without limitation to receive and view
the Content contained in the channels or programming package(s) ordered by the
applicable Subscriber, as determined at any time and from time to time by
Company in its sole discretion. The Parties acknowledge that STBs are
integral to the Service. All STBs and STB Components (as defined
below) shall meet the specifications set forth in Exhibit B and/or such other
specifications as may be mutually agreed upon by the Parties in writing from
time to time during the Term of this Agreement. For clarity, all STBs
sold to Company by NeuLion shall come standard with an STB-compatible IR remote
control, power cable, CAT 5 or other compatible Ethernet cable and written
English-language instruction manual that includes the limited warranty
referenced in Section 3(d) (the “STB
Components”). NeuLion shall ensure that all STBs and STB
Components sold to Company are, and continue to be, manufactured in accordance
with such Company-approved specifications. NeuLion shall not sell to
Company, or ship to any Subscriber, any STB or STB Components meeting
specifications that Company has not approved in writing or that deviate in any
way from the version(s) of the STB or applicable STB Component that Company
approved. NeuLion agrees to sell
individual STB Components to Company throughout the Term at the prices set forth
in Exhibit C hereto. NeuLion shall be solely and exclusively
responsible for payment of any and all license or other royalties required for
the manufacture, sale or use of the STBs and STB Components by Subscribers and
other STB users. In
addition to (and without limitation of) the foregoing or any other provision of
this Agreement, NeuLion shall be solely and exclusively responsible for ensuring
that all STBs and STB Components are properly labeled for consumers (including
without limitation Subscribers) in accordance with applicable Laws and that such
STBs and STB Components comply with all applicable
Laws. Notwithstanding anything set forth to the contrary in this
Agreement, Company shall have the right to re-sell, lease or otherwise transfer
Company-purchased STBs (including without limitation with the software installed
thereon) and STB Components to third parties other than Subscribers during any
Migration (as defined in Section 13 below) or following expiration or
termination of this Agreement for any reason. In addition to (and
without limitation of) the other licenses granted to Company by NeuLion
hereunder, NeuLion hereby grants to Company any and all licenses necessary in
order for Company to re-sell, lease or otherwise transfer Company-purchased STBs
(including without limitation the software therein) during any Migration or
following the expiration or termination of this Agreement (the “STB Sales
Licenses”). NeuLion acknowledges and agrees that the STB Sales
Licenses are being granted to Company on a perpetual, irrevocable, royalty-free,
worldwide basis; provided, however, that NeuLion shall have no further
obligations with respect to any such resold STBs except to negotiate in good
faith with the buyer(s) thereof with respect to buyer use of, and NeuLion
support of, such resold STBs in connection with all of such buyers’ or any of
their affiliates’ offering of an IPTV service that utilizes NeuLion’s IPTV
Platform. For clarity, the STB Sales Licenses and the provisions of
the immediately preceding sentence shall survive expiration or termination of
this Agreement for any reason indefinitely.
3
(a) Purchase
Orders.
(i) STBs
may be ordered by Company at any time during the Term of this Agreement by the
issuance of written purchase orders consistent with the terms of this
Agreement. NeuLion shall provide Company with all STBs subject to and
in accordance with the terms and conditions of such purchase orders including
without limitation the model selected by Company; provided that NeuLion shall
ensure that all shipments of STBs are delivered to the location(s) specified in
the applicable purchase order not more than twelve (12) weeks following the date
of such purchase order (the “Maximum Delivery
Time”). Without prejudice to any other rights or remedies
available to Company, if any shipment is not delivered to the delivery location
specified in the applicable purchase order within ******* weeks following the
date of such purchase order, the total amount payable to NeuLion by Company
thereunder shall be reduced by *******, and further, if any shipment is not
delivered to the delivery location specified in the applicable purchase order
within ******* weeks following the date of such purchase order, the total
amount payable to NeuLion by Company thereunder shall be reduced by
*******. STB pricing is set forth in Exhibit C attached
hereto.
(ii) In
addition to (and without limitation of) any of the foregoing, Company may (but
shall not be obligated to) cancel any purchase order, either in whole or in
part, if delivery of the product ordered is delayed by ninety (90) days or more
in excess of the date that is: (a) ten (10) weeks from the date of a purchase
order if such purchase order specifies shipping by air; or (b) twelve (12) weeks
from the date of a purchase order if such purchase order specifies shipping by
sea. Any and all amounts paid in advance by Company with respect to a
cancelled purchase order shall be refunded in full to Company by NeuLion within
thirty (30) days following the date on which Company provides NeuLion with
notice of cancellation. Except as otherwise provided in Exhibit C,
Section C (7) with regard to Company’s ******* aggregate STB purchase
commitment during the first full twelve (12) calendar months of the Term,
Company’s obligation to purchase any item from NeuLion (including without
limitation STBs) shall in no case exceed the quantities specified on a purchase
order sent to NeuLion by Company.
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(iii) Notwithstanding
anything set forth to the contrary in this Agreement, with respect to any
particular purchase order submitted by Company to NeuLion, NeuLion shall use the
manufacturer specified by Company to manufacture the applicable STBs and/or STB
Components described therein. Any such manufacturer shall be selected
by Company from: (1) among those manufacturers then used by NeuLion to supply
any other NeuLion Customer with IPTV set top boxes or related equipment (NeuLion
currently uses Beijing Transvideo Digital Technology Co., Ltd. and Tatung
Company) or then used by an Affiliate if ordered directly from the manufacturer
by such Affiliate; and (2) such other manufacturer(s), if any, as may be
recommended by NeuLion. NeuLion shall provide Company with a list of
manufacturers meeting the criteria set forth in clauses (1) and (2) of this
Section 3(a)(iii) within not more than three (3) days following a request by
Company.
(b) Market
Rights.
(i) It
is expressly understood and agreed that this Agreement does not grant to NeuLion
an exclusive right or privilege to sell to Company or any of its Affiliates any
STB, STB Component or other product or service. It is therefore
understood that Company and/or any of its Affiliates may contract with other
manufacturers and suppliers for the procurement of comparable products and/or
services, including any other NeuLion Customer (as defined in Section
17).
(ii) NeuLion
agrees that purchases by Company under this Agreement shall neither restrict the
right of Company to cease purchasing nor require Company to continue any level
of such purchases.
(iii) Except
as specifically set forth in Exhibit C, Section C (7), Company shall have no
obligation to make any purchases from NeuLion hereunder, and has made no
assurances or guarantees to NeuLion that it will do so. The Parties
agree that under no circumstances shall NeuLion, or anyone claiming through
NeuLion, its successors or assigns, have any claim against Company and/or any of
its Affiliates, and neither Company nor any of its Affiliates shall have any
liability to NeuLion, or anyone claiming through NeuLion, its successors or
assigns, if such claim arises out of or is brought in connection with a failure
by Company to purchase STBs or any other product in any quantity, even if it
results in: (1) termination of this Agreement; (2) loss of profits or
opportunity; (3) employee actions; or (4) the expenditure of sums in preparation
or anticipation of future orders.
(c) Conditional Access and
Geoblocking. Unless otherwise authorized by Company in advance
and in writing, NeuLion shall not provide the Service, any portion thereof, or
any STB, to anyone that it reasonably knows, or should have known, resides or is
situated outside of the United States, its territories or possessions, or
intends to receive the Service or an STB outside of the United States, its
territories or possessions. With respect to the STBs, NeuLion shall
at all times during the Term and the Wind Down Period implement and employ: (i)
conditional access software, techniques and measures that meet or exceed
prevailing industry standards, are reasonably acceptable to Company, and that
restrict access to the Service (including without limitation the Content) to
only those Subscribers that have paid in full for the Service and are authorized
by Company to receive the same (“Conditional Access
Measures”);
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and (ii)
geofiltering and geoblocking software, techniques and measures that are
reasonably acceptable to Company and meet or exceed prevailing industry
standards, to restrict access to the Service (including without limitation the
Content) to only those Subscribers with an internet protocol address physically
located in the United States, its territories or possessions (“Geoblocking/Geofiltering
Measures”). For clarity (and without limitation of any of the
foregoing), all Content must be encrypted at all times so as to prevent access,
viewing and use by individuals or entities that do not have Company’s
authorization to do so. In connection with its geofiltering and
geoblocking obligations under this Section 3(c), NeuLion shall use a current and
complete database of IP addresses within the United States its territories and
possessions that is obtained from, and updated by, a reliable source of such
information customarily used by other video service providers in accordance with
prevailing industry standards. NeuLion shall cause such database of
IP addresses located within the United States, its territories and possessions
to be regularly updated on no less than a monthly basis during the Term and the
Wind Down Period to ensure the effectiveness and accuracy of its geofiltering
and geoblocking obligations. A description of the Conditional Access
Measures and Geoblocking/Geofiltering Measures implemented and employed by
NeuLion as of the Effective Date are set forth in STB specifications attached
hereto as Exhibit B.
(d) Limited Warranty and
Warranty Services. NeuLion shall provide Company and
Subscribers with the warranty and warranty services set forth in Exhibit E
hereto. For clarity (and without limitation of the foregoing) Company
shall receive such warranty and warranty services under the same terms and
conditions applicable to Subscribers hereunder (including without limitation as
set forth in Exhibit E hereto).
(e) Quality
Assurance.
(i) With
respect to the STBs and STB Components, throughout the Term, NeuLion shall
implement and maintain a quality assurance plan that meets or exceeds prevailing
industry standards. NeuLion shall provide Company with a written copy
of such plan within ninety (90) days following the Effective Date and thereafter
within twenty (20) days of a written request by Company therefor from time to
time during the Term.
(ii) NeuLion
is solely responsible for the quality of the STBs purchased by Company from
NeuLion pursuant to this Agreement, and the quality levels of such STBs must not
include any requirement for Company inspection and therefore must approach zero
critical and major defects. Company may (but shall not be obligated
to) carry out an acceptance test at NeuLion’s offices in Plainview, New York,
for STBs that have been delivered to NeuLion from NeuLion’s manufacturer, but
have not yet been shipped to any Subscriber; provided, however, that the
carrying out of an acceptance test by Company shall in no way be deemed to
diminish or reduce any of NeuLion’s warranty and other obligations
hereunder. NeuLion shall provide Company with the facilities at
NeuLion’s offices in Plainview, New York and all other materials requested by
Company as are reasonably necessary to carry out acceptance
testing. At the request of Company, NeuLion shall promptly inform
Company when any shipment of STBs has been delivered to NeuLion and is ready to
be shipped to Subscribers and/or other customers of Company. If any
acceptance tests fail, which shall mean a failure rate ******* of STBs
tested, NeuLion shall have thirty (30) days to cure the problem and present the
batch again for acceptance; provided, however, that any such batch shall not be
considered delivered for purposes of Section 3(a) until such time as the problem
is cured and the batch is accepted by Company. In addition to (and
without limitation of) NeuLion’s other indemnification obligations under this
Agreement, and subject to the provisions of Section 18(b) of this Agreement,
NeuLion shall indemnify, defend and hold Company and its Affiliates and any
employee, officer, director, customer or shareholder of any of the foregoing
harmless against all actions, claims, costs (including without limitation
reasonable attorney’s fees), expenses, losses, damages and other liability
arising from or related to any products liability allegation, claim, suit or
action with respect to the STBs or any STB Component.
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4. NeuLion Service
Fees. Company shall pay to NeuLion the applicable fees set
forth in Exhibit C hereto. Unless otherwise mutually agreed upon by
the Parties in writing, the fees set forth in Exhibit C hereto are the sole
amounts payable by Company to NeuLion under this Agreement (including without
limitation for the STBs, STB Components, the NeuLion Services and any other
products or services provided to Company by NeuLion hereunder).
5. Independent
Contractor. NeuLion is an independent contractor of
Company. Accordingly, no Party shall, nor shall any officer,
director, employee, servant, agent or independent contractor of either Party:
(a) be deemed an employee of the other Party; (b) commit the other Party to any
obligation; or (c) hold itself, himself, or herself out as an employee of the
other Party or as a Person with the authority to commit the other Party to any
obligation. As used in this Section 5, the word “Person” means any
individual person, entity (including partnerships, corporations and limited
liability companies), and government or political subdivision thereof (including
agencies, bureaus, offices and departments thereof).
6. Compliance with Laws
*******.
(a) Compliance with
Laws. Both Company and NeuLion shall comply with any and all
applicable governmental statutes, laws, rules, regulations, ordinances, codes,
directives and orders (whether federal, state, municipal or otherwise) and all
amendments thereto, now enacted or hereafter promulgated (“Laws”) in connection
with their respective performance under this Agreement. Each Party
shall be solely responsible for its compliance with all Laws that apply to its
obligations under this Agreement.
(b) *******.
NeuLion shall not, and shall ensure that none of its Affiliates, take any action
which *******. For purposes of the preceding sentence, NeuLion
products shall include, without limitation, set top boxes (including without
limitation the STBs) manufactured and/or sold by or on behalf of
NeuLion. This Section 6(b) is not intended to negate or limit any
obligations either Party may have under any applicable Laws. The
obligations set forth in this Section 6(b) shall not apply to NeuLion following
completion of an acquisition of at least a fifty percent (50%) ownership
interest in the Company by an entity (other than a Company Affiliate) that
offers services that directly compete with the NeuLion Services provided to
Company hereunder.
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7. Intellectual Property Rights
and Deliverables.
(a) The
Parties acknowledge and agree that each Party owns its respective intellectual
property rights, including without limitation all known and hereafter existing
rights, including without limitation, U.S. and foreign copyrights, trademarks,
service marks, trade dress, inventions, patents, patent applications, software,
know-how and other similar intellectual property and proprietary rights (“Intellectual Property
Rights”). All uses of the Intellectual Property Rights shall
inure to the sole benefit of and be on behalf of the Party that owns such
rights. The Parties acknowledge and agree that each Party’s
Intellectual Property Rights, and the goodwill associated therewith, are
valuable properties belonging to each Party, and that all rights thereto are and
shall remain the sole and exclusive property of the Party that owns such
rights. The Parties acknowledge and agree that Company and/or its
Affiliates may, in their sole and absolute discretion, develop, create, market,
promote, sell and provide, directly or indirectly, products or services
utilizing intellectual property similar to or competitive with the NeuLion IP
(defined in Section 7(b)) or other property rights owned or controlled by
NeuLion or its Affiliates, including without limitation, intellectual property
based on the same or similar open source software upon which any NeuLion IP may
be based. Notwithstanding anything set forth in this Agreement to the
contrary, nothing herein shall confer upon either Party, any of its respective
Affiliates or any other third party any right of ownership in any of the other
Party’s Intellectual Property Rights. The provisions of this Section
7(a) shall survive expiration or termination of this Agreement (for any reason)
indefinitely.
(b) NeuLion
IP. Company understands and agrees that NeuLion shall utilize
its (and/or its Affiliates’) proprietary intellectual property in the
performance of the NeuLion Services, which intellectual property consists of the
Transcoder Licensed Programs (as defined in Section 7(c)(i) below), NeuLion’s
proprietary customer management, support and billing software, NeuLion’s
proprietary STBs (and all software installed thereon), NeuLion’s standard
electronic programming guide, NeuLion Marks (as defined below), and all patents,
trademarks, service marks and tradenames owned by NeuLion or on which any
license or other right granted to Company or Subscribers by NeuLion hereunder is
based (either in whole or in part) (collectively, “NeuLion
IP”). With the exception of the Content, the Subscriber
Information, and the look and feel of the Company EPG (as defined in Section C
of Exhibit A) (including without limitation, customizations to NeuLion’s
standard electronic programming guide to create such look and feel) and any all
Intellectual Property Rights owned by Company or any of its Affiliates, NeuLion
shall be the owner of the Service and all Intellectual Property Rights therein
contained. For clarity, Company shall at all times during the Term
and thereafter own the look and feel of the Company EPG, and the NeuLion IP
shall specifically exclude Subscriber Information, the Content, the look and
feel of the Company EPG, any materials provided by Company or any of its
Affiliates to NeuLion in connection with this Agreement in which Company or any
of its Affiliates has any Intellectual Property Rights (including without
limitation any Marks or logos of Company or any of its Affiliates) and any
Intellectual Property Rights owned by Company or any of its
Affiliates. For further clarity, and with the exception of the
customization and look and feel of the Company EPG, the Parties hereto agree
that none of the deliverables provided by NeuLion to Company under this
Agreement, or any improvements, modifications or additions that may be made
thereto, shall be deemed to be “works made for hire” under the federal copyright
laws and that NeuLion shall be the owner/author for all, and Company will not
contend to the contrary. Notwithstanding anything set forth to the
contrary in this Agreement, nothing set forth in this Agreement shall prohibit
either Party from using general knowledge or know-how gained in connection with
its performance hereunder or otherwise during the Term of this Agreement or
thereafter. With respect to the NeuLion IP, the Parties agree that,
absent written authorization from NeuLion, Company and its Affiliates will not
take any action in contravention of any intellectual property
Laws. Company’s violation of the provisions of the immediately
preceding sentence shall be a material breach of this Agreement.
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(c) Content.
(i) General. To the
extent necessary for NeuLion to fulfill its obligations under this Agreement,
Company grants to NeuLion a limited right to use, store encode/transcode (using
NeuLion’s proprietary video encoding/transcoding software, the “Transcoder Licensed
Programs”), and distribute the Content solely for the purpose of
providing the NeuLion Services to Company and delivering the Service to
Subscribers during the Term and the Wind Down Period subject to and in
accordance with this Agreement; provided, however, that at the written request
of Company, NeuLion shall immediately cease any or all of the foregoing
activities with respect to all or any portion of the Content as may be specified
by Company. For clarification and not by way of limitation, NeuLion
shall have no right to distribute Content, in its original form or in any
encoded, transcoded or other format to anyone other than Subscribers during the
Term of this Agreement and the Wind Down Period unless otherwise approved in
advance in writing by Company. Notwithstanding anything set forth
herein to the contrary, under no circumstance shall NeuLion use the: (A) Service
to broadcast any content other than the Content; or (B) the feed of any Content
provided by Company (whether fiber or otherwise) for any purpose other than to
provide the NeuLion Services to Company and to deliver the Service to
Subscribers during the Term and the Wind Down Period subject to and in
accordance with this Agreement. At no time shall Company or any of
its Affiliates be under any obligation whatsoever to provide any minimum amount
or specific type of Content to or through NeuLion in connection with the
Service. Company shall have the right at any time and from time to
time in its sole and absolute discretion for any reason or no reason to: (1)
select the Content to be provided via the Service;
and (2) modify, substitute, replace or discontinue any such Content or portion
thereof.
(ii) Company
Requirements. Company acknowledges that in order for the
Service to be available to Subscribers during the Term and the Wind Down Period,
Company must: (A) acquire and aggregate the Content on a daily basis; (B)
deliver, at Company’s expense, the Content to NeuLion at the cross connect panel
at any mutually agreed upon NeuLion data center facility located in the
continental United States (currently NeuLion’s data center located in Palo Alto,
California) in a mutually agreed upon format and timeframe as required for daily
broadcast to Subscribers and at a quality level reasonably sufficient for such
broadcast (for clarity, and without limitation, NeuLion shall be solely and
exclusively responsible for any and all cross connect fees incurred as a result
of Company’s delivery of the Content); and (C) create and deliver to NeuLion
Content meta data (to include, without limitation, Content title and
description, Content promotional images (if any) and broadcast Content
programming schedules) in a format and pursuant to timelines to be mutually
agreed upon from time to time during the Term and the Wind Down Period by the
Parties, acting reasonably. Neither NeuLion nor any of its Affiliates
shall be entitled to any amounts from Company or any third party in connection
with Company’s sale of advertising, if any, using or in connection with the
Service.
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(d) Trademarks. Company
and NeuLion (either Party, a “TM Licensor”) each
hereby grants to the other (“TM Licensee”), during
the Term and the Wind Down Period, and subject to the terms of this Agreement, a
limited, non-exclusive, non-revocable, royalty-free, non-transferable and
non-sublicensable license to display and distribute their respective service
marks and trademarks (“Marks”), throughout
the Territory, in or on promotional material, provided such use is reasonably
necessary to perform as contemplated by this Agreement and is approved in
advance in writing, by the applicable TM Licensor. If the applicable
TM Licensor does not approve in writing of any such proposed use within five (5)
days of a written request from TM Licensee, such request shall be deemed to have
been denied by TM Licensor. TM Licensee agrees to comply with TM
Licensor’s written trademark usage policies as provided to TM Licensee by TM
Licensor. Title to and ownership of the TM Licensor’s Marks shall
remain with TM Licensor at all times. The license granted by TM
Licensor does not include any ownership interest in the respective ▇▇▇▇(s) and
does not include the right to modify or alter any of such ▇▇▇▇(s) in any
way. TM Licensee shall not take any action inconsistent with TM
Licensor’s ownership of its respective Marks and any benefits accruing from use
of such Marks shall automatically vest in TM Licensor. TM Licensee
shall not create any combination marks with the TM Licensor’s
Marks. This license expressly does not include any use of the Marks
for domain or subdomain names. If TM Licensee’s use of the licensed
Marks does not conform to TM Licensor’s quality standards in TM Licensor’s
commercially reasonable opinion, TM Licensor shall, in writing, notify TM
Licensee of such nonconformance. If TM Licensee does not cure such
nonconformance within forty-eight (48) hours of such notice, TM Licensor may
terminate the license granted TM Licensee hereunder. If TM Licensee
does not cure such nonconformance within fifteen (15) days of such notice, TM
Licensor may immediately terminate this Agreement upon written notice to TM
Licensee.
(e) NeuLion
License. NeuLion hereby grants the following limited licenses
for the Term of this Agreement and the Wind Down Period:
(i) to
Company a limited, non-exclusive, nontransferable license to install and use the
NeuLion Transcoder Licensed Programs on hardware owned or operated by Company
(or its Affiliates or third party vendors), within the U.S. or outside the U.S.,
for the purpose of encoding/transcoding Content for transmission to NeuLion for
distribution to Subscribers and to make backup copies as reasonably
necessary;
(ii) to
Company a limited and non-exclusive license to market, distribute, and
sublicense the Service, STBs (including without limitation any and all software
installed on such STBs) and STB Components to Subscribers;
(iii) to
Subscribers a limited license to receive and use the Service for purpose of
subscribing, ordering, and viewing the Content.
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For
clarity, the licenses granted in this Section 7(e) that reference the Service
pertain only to those portions of the Service in which NeuLion owns Intellectual
Property Rights and expressly excludes any and all Content.
8. Company Branding
Rights. Company shall have, as further provided for herein, private
label branding rights on the Service and STBs with the name, logo and/or other
identifying information as may be specified by Company at any time and from time
during the Term in its sole discretion for any reason or no
reason. Except as may otherwise be required by applicable Laws,
neither Company nor any of its Affiliates shall have any obligation to include
information identifying NeuLion as the creator, source, distributor,
manufacturer or provider of the Service or any other similar or related services
or products, including without limitation, the STBs; provided, however, that the
STB initial startup page shall be branded by Company with Company’s logo and in
smaller, yet clearly identifiable typeface, the phrase “Powered by NeuLion” in
the manner depicted in Exhibit H hereto, which Exhibit H may be changed at any
time and from time to time by Company acting reasonably (e.g., if Company elects
to change its logo), provided that “Powered by NeuLion” is included in any such
replacement STB initial startup page in the same font size and style as shown in
the Exhibit H attached hereto as of the Effective Date. Additionally,
the manufacturer of the STB may be identified by means of a small imprint or
sticker on the bottom of the STB. For clarity (and without limitation
of the foregoing), except as may otherwise be required by applicable Laws and as
expressly set forth in this Section 8, no component of the Service (including
without limitation any deliverable to be provided to Company by NeuLion
hereunder, STB or STB Component) shall be labeled, branded or otherwise marked
with any ▇▇▇▇, name, logo or other marking of NeuLion, its Affiliates, or any
third party other than Company, unless expressly agreed to in writing by
Company.
9. Customer and Subscriber
Pricing and Business Rules. Company shall have the right, in its
sole discretion for any reason or no reason, to determine: (a) the pricing and
packages (if any) applicable to the Content or any portion thereof (including
without limitation any required buy-throughs, a la carte channels and any and
all combination(s) of channels offered to Subscribers as part of the Service)
and the type and pricing of any and all equipment provided to Subscribers in
connection with the Service (including without limitation STBs and STB
Components); (b) the fees charged to Subscribers in connection with the Service
(if any) (including without limitation with respect to specific a la carte
channels and programming packages); (c) the Business Rules; and (d) any and all
terms and conditions (including without limitation the form and substance of any
and all agreements by and between Company and Subscribers) applicable to
Subscribers’ receipt of the Service. Company shall have the right to
modify, change, delete or replace any of the foregoing at any time and from time
to time in its sole discretion for any reason or no reason. NeuLion
shall implement any changes referenced in this
Section 9 as soon as commercially reasonably practicable following a request by
Company, consistent with NeuLion’s practices for implementing similar changes
for other NeuLion Customers (NeuLion’s current practice is to implement ordinary
course changes within five (5) business days). For the avoidance of
doubt (and without limitation of any of the foregoing), with respect to NeuLion
and its Affiliates, the relationship between Subscribers and Company (whether
contractual or otherwise) shall be for the sole benefit of
Company. For purposes of this Agreement, “Business Rules” shall
mean any term, requirement, condition, process or procedure associated with
Company’s customization of the Service (including without limitation,
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with respect to billing, packaging, retail pricing, promotions and
equipment returns) that are provided by Company to NeuLion for
implementation. By way of example only (and not in limitation),
Business Rules may address any of the following: (i) policies regarding shipping
of STBs; (ii) Content packaging design, naming and retail pricing; (iii)
required “buy throughs” for certain Service subscriptions; (iv) amount of taxes
charged on shipping and handling of STBs; (v) the number of days before service
is disconnected for non-payment by a Subscriber; (vi) use of remanufactured
STBs; (vii) out-of-warranty STB exchanges; and (viii) STB lease and purchase
programs. In addition to (and without limitation of NeuLion’s
obligation to implement changes described in this Section 9 as soon as commercially reasonably practicable following
a request by Company, consistent with NeuLion’s practices for implementing
similar changes for other NeuLion Customers), NeuLion agrees to, in any
event, once per calendar quarter, implement changes to the Business Rules in
item (ii) above no later than thirty (30) days following receipt of such changes
in writing from Company.
10. Representations and
Warranties.
(a) NeuLion. NeuLion
hereby warrants and represents that: (i) it has the right, power and authority
to enter into this Agreement and to fully perform its obligations under this
Agreement; (ii) entering into this Agreement does not violate any existing
agreement between NeuLion and any third party; (iii) it has and will maintain
for the Term and the Wind Down Period (as defined in Section 13 below) all the
necessary rights, title and ownership in and to the NeuLion IP to perform its
obligations hereunder and to grant the licenses contained in Section 7(e) of
this Agreement; (iv) none of the NeuLion IP, STBs, STB Components, NeuLion
Services nor any of the deliverables to be provided to Company by NeuLion
hereunder, either in whole or in part, infringe upon or constitute a
misappropriation (or at any time during the Term and the Wind Down Period will
infringe upon or constitute a misappropriation) of any Intellectual Property
Rights of any third party; (v) the use in the Territory of the STBs, STB
Components and the Service by Subscribers and others is not prohibited or
restricted by any Laws, industry or governmental standards or regulations which
may apply to the manufacture or sale of STBs or the provision of the Service;
(vi) as of the Effective Date and at all times during the Term and the Wind Down
Period, the ******* channel limit described in Exhibit C, paragraph B(1)
for purposes of the Monthly Operations Fee is no more restrictive than the same
or similar channel limit imposed on any other NeuLion Customer for purposes of
charging the same or a similar fee to such other NeuLion Customer; (vii) as of
the Effective Date and at all times during the Term, the performance standards
and provisions applicable thereto set forth in Exhibit G are and will be as
favorable or more favorable than any performance standards and the provisions
applicable thereto provided by NeuLion to any other NeuLion Customer; and (viii)
as of the Effective date, when compared on a net-effective basis, the fees,
charges and other amounts payable by Company hereunder are each as favorable or
more favorable than the same or similar fees, charges and other amounts charged
by NeuLion to any NeuLion Customer except for NeuLion Affiliates.
(b) Company.
Company hereby warrants and represents that: (i) it has the right, power and
authority to enter into this Agreement and to fully perform its obligations
under this Agreement; (ii) entering into this Agreement does not violate any
existing agreement between Company and any third party; and (iii) it has and
will maintain for the Term and the Wind Down Period all the necessary license,
rights, title and/or ownership in and to the Content, and to the Marks that it
will provide to NeuLion for NeuLion’s use in connection with this Agreement; and
(iv) it has no knowledge or reasonable basis to believe that the Content and the
Company-provided Marks infringe upon, violate or constitute a misappropriation
of any Intellectual Property Rights of any third party;
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11. Performance
Standards. NeuLion shall at all times perform hereunder in
accordance with the Performance Standards set forth in Exhibit F and Exhibit
G. For clarity (and without limitation of any of the foregoing),
DISH’s right to receive any amounts from NeuLion pursuant to Exhibit G as a
result of NeuLion’s failure to meet any Performance Standard is without
prejudice to DISH’s right to terminate this Agreement in accordance with the
terms and conditions set forth herein (including without limitation Section
12(c)(ii)).
12. Termination. This
Agreement may be terminated:
(a) by
either Party (i) in the event of a breach of any of the other Party’s
obligations or any representation or warranty set forth in this Agreement that
has not been cured (if curable) within thirty (30) days following such other
Party’s receipt of written notice of such breach from the terminating Party;
(ii) immediately upon the insolvency of or the filing of a petition of
bankruptcy by a Party; or (iii) in accordance with any other provisions of this
Agreement expressly addressing termination;
(b) upon
mutual written Agreement of the Parties;
(c) immediately
by Company: (i) upon a change of control in the ownership of NeuLion whereby a
competitor of Company or any of its Affiliates directly or indirectly controls
NeuLion; (ii) upon NeuLion’s failure to meet any Performance Standard for a
cumulative period of *******; or (iii) if bandwidth limitations imposed by
internet service providers (ISP’s) limit the ability of Subscribers to use the
Service in a manner that materially adversely affects the expected economic
benefits of Company hereunder;
(d) by
Company, after the Year Two Period (as defined in Section B.4 of Exhibit C
hereto) and on at least sixty (60) days written notice, in the event that: (i)
Company has ******* Subscribers; and (ii) for a period of time equal to the
period of time remaining in the Initial Term as of the date of termination,
Company ceases offering the Content then on the Service as of the date of
termination via an IPTV service that utilizes an IPTV-dedicated set top box;
or
(e) by
either Party forty-five (45) days after the conclusion of a Migration of all
Subscribers.
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13. Migration. In
addition to (and without limitation of) Company’s right to effect a Migration
during the Year Two Period (as defined and further described in Section B.4 of
Exhibit C hereto), at any time and from time to time on or following the date
that is ******* after the Effective Date, and for forty-five (45) days
following expiration or termination of this Agreement for any reason (such
forty-five (45) day period, the “Wind Down Period”),
upon thirty (30) days prior written notice to NeuLion, Company may, in its sole
discretion for any reason or no reason and without liability to NeuLion, effect
a Migration. As used herein, a “Migration” means the
transfer of all or any portion of the Subscribers from the Service to a
different IPTV or other video service designated by Company (including without
limitation, an IPTV or other video service owned and/or operated by Company or
any of its Affiliates (an “Other Video
Service”)) as a result of Company requiring such Subscribers to change
from the Service to such Other Video Service. A Migration may occur
in phases and Content language by Content language, as determined by Company at
any time and from time to time in its sole discretion for any reason or no
reason. In the event of a Migration, NeuLion agrees to cooperate with
Company in effecting a smooth transition of the applicable Subscribers to the
applicable Other Video Service. The Parties shall continue to perform
their respective obligations hereunder (including without limitation NeuLion’s
provision of all Subscriber billing-related services provided as part of the
NeuLion Services) during any Migration. In this regard, the Parties
agree as follows with regard to any Migration process:
(a) Company
shall be entitled to replace Subscribers’ STBs with set top boxes of its
choosing supplied by Company or one or more third parties (the “Migration
STBs”). As the Migration STBs are provisioned, such Subscriber
shall be converted to the applicable Other Video Service and no longer be
considered a Subscriber under this Agreement for any reason (a “Migrated
Subscriber”).
(b) With
respect to any Subscriber, NeuLion shall immediately cease providing any and all
billing and collection services for such Subscriber upon notice from Company
that such Subscriber has become a Migrated Subscriber, which notice may be
provided to NeuLion by Company via NeuLion’s web-based support request tracking
system identified in Exhibit F, or by formal notice in accordance with Section
27. For clarity (and without limitation of the foregoing), NeuLion
shall continue performing billing and collection services for each Subscriber
until the date on which such Subscriber becomes a Migrated
Subscriber. With respect to Subscribers that become Migrated
Subscribers during any Reporting Period, NeuLion shall prorate the Operations
Fee (as defined in Section B.1 of Exhibit C hereto) payable by Company to
NeuLion for the applicable Reporting Period based on the number of days during
such Reporting Period that each such Migrated Subscriber remained active and
received the Service prior to the date on which such Subscriber became a
Migrated Subscriber.
(c) Except
as otherwise expressly set forth in this Section 13(c), upon NeuLion’s cessation
of billing and collection services for a Migrated Subscriber as set forth in
Section 13(b) or 13(f) of this Agreement, NeuLion shall, at Company’s direction
in its sole discretion for any reason or no reason, promptly return or destroy
any and all Confidential Information in its possession (including but not
limited to all copies of any Confidential Information) with respect to such
Migrated Subscriber (including without limitation Subscriber Information) and
certify such destruction in writing to Company. If Company fails to
direct NeuLion with respect to the disposition of any such Confidential
Information related to a Migrated Subscriber (including without limitation
Subscriber Information), NeuLion shall send all such Confidential Information to
Company’s designated contact person, and if no such contact person has been
designated by Company after NeuLion’s written request to Company therefor, to
the notice address provided in this Agreement within five (5) days following the
date on which such Subscriber became a Migrated Subscriber. The
provisions set forth herein are in addition to (and without limitation of) any
other obligations of the Parties and their respective Affiliates set forth
herein with respect to the treatment of Confidential Information (including
without limitation Subscriber
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Information). For clarity, except for Subscriber
Information, and any copies thereof, with respect to a Subscriber that has
either formally contested a ▇▇▇▇ for the Service (with respect to which amounts
payable thereunder are outstanding as of the date on which such Subscriber
becomes a Migrated Subscriber) or otherwise has unpaid amounts due and owing for
the Service as of the date on which such Subscriber becomes a Migrated
Subscriber (collectively, the “Contested ▇▇▇▇ Subscriber
Information”), NeuLion shall not retain any Subscriber Information
following the date that is five (5) days after the date on which the applicable
Subscriber became a Migrated Subscriber. Upon retaining any Contested
▇▇▇▇ Subscriber Information, NeuLion shall notify Company of the name and
address of the corresponding Subscriber. Following resolution of any
such contested ▇▇▇▇ or payment of amounts due and owing for the Service (such
period of time not to exceed sixty (60) days following the applicable
Migration), NeuLion shall immediately send all Contested ▇▇▇▇ Subscriber
Information for the applicable Subscriber to Company at the notice address
provided herein.
(d) NeuLion
shall invoice Company at a rate of ******* for services provided to Company
by NeuLion personnel at Company’s written request to assist Company
in any Migration process (the “Migration
Services”). Migration Services shall include, without
limitation, dismantling and returning to Company all Company-owned equipment
located at NeuLion data centers and other such services as Company may request
in writing that NeuLion perform: (1) in connection with a Migration; and (2)
that are in excess of NeuLion’s obligations hereunder (i.e., in excess of the
NeuLion Services and deliverables to be provided to Company by NeuLion in the
ordinary course of this Agreement).
(e) At
any time during the Term of this Agreement, Company shall have the option (but
not the obligation), in its sole discretion for any reason or no reason, to
transfer Subscriber billing and/or shipping and provisioning services provided
by NeuLion as part of the NeuLion Services to its own or a third-party billing
and/or shipping and provisioning system (in which event NeuLion shall otherwise
continue to perform its obligations hereunder). The parties agree to
negotiate in good faith the terms and conditions of any such transfer, with the
understanding that the fees set forth in this Agreement shall not change as the
result of a transfer of any such billing and/or shipping and provisioning
services.
(f) If
Company elects to effect a Migration of all Subscribers during the Renewal Term
(if any), Company shall complete such Migration within one hundred eighty (180)
days of providing notice thereof to NeuLion in accordance with this Section
13.
(g) Each
Party acknowledges and agrees that it is not hereby granting any exclusive
rights to the other Party or to any of the other Party’s
Affiliates. Accordingly, nothing set forth in this Agreement shall
restrict Company or any of its Affiliates from directly or indirectly operating
or offering (including without limitation to Migrated Subscribers) any other
video service, including without limitation any other IPTV service, or any other
product or service whatsoever (including without limitation any other video
service that includes content that is the same or similar to all or any part of
the Content, or that contains programming packages that are the same or similar
to the programming packages offered via the Service) at any time and from time
to time during the Term, the Wind Down Period or thereafter.
With the
exception of Section 13(g), the provisions of this Section 13 shall survive
expiration or termination of this Agreement for any reason for a period of
forty-five (45) days. The provisions of Section 13(g) shall survive
expiration or termination of this Agreement for any reason
indefinitely.
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14. Confidentiality. The provisions of this
Section 14 shall survive expiration or termination of this Agreement for any
reason indefinitely.
(a) “Confidential
Information” means and shall include: (i) the terms and conditions of
this Agreement and all prices, rates and other financial information related to
the Service; (ii) all information relating to Subscribers, prospective
Subscribers and former Subscribers, including without limitation, such
Subscribers’, prospective Subscribers’ and former Subscribers’ names, addresses,
e-mail addresses, internet protocol addresses, telephone numbers and
credit/debit card and billing information (whether obtained directly or
indirectly by NeuLion) (collectively “Subscriber
Information”); and (iii) all information one Party provides to the other
which is clearly identified as confidential or proprietary, or which would
logically be considered confidential or proprietary by virtue of its relation to
the subject matter of this Agreement. In addition to (and without
limitation of) the foregoing and any other provision of this Agreement
addressing Confidential Information (including without limitation Subscriber
Information), except as otherwise expressly provided herein with respect to
NeuLion and as necessary for NeuLion to perform hereunder subject to and in
accordance with this Agreement, NeuLion shall not directly or indirectly sell,
transfer or use any Confidential Information, including without limitation any
Subscriber Information. For clarity, any and all prospective
Subscriber, Subscriber or former Subscriber credit/debit card information
collected by or on behalf of NeuLion in connection with its performance
hereunder shall constitute Subscriber Information. Neither Company
nor any of its Affiliates shall sell, transfer or use any Confidential
Information received from NeuLion except as necessary for Company to perform
hereunder. Confidential Information (including without limitation
Subscriber Information) disclosed by either Party to the other (and/or in the
case of Subscriber Information, obtained directly or indirectly by NeuLion from
prospective Subscribers, Subscribers and former Subscribers as a result of its
performance hereunder) shall be held by the recipient in confidence and not be
made available for third parties to use (except by Company to one or more of its
Affiliates in connection with Company’s performance hereunder and except by
Company with respect to Subscriber Information (which Subscriber Information,
for clarity, Company shall exclusively own and may, in its sole discretion for
any reason or no reason, without limitation, use for any purpose whatsoever or
sell, transfer or otherwise distribute to any person or entity
whatsoever)). For clarity (and without limitation of the foregoing),
at no time during the Term or thereafter shall NeuLion disclose any Confidential
Information (including without limitation Subscriber Information) to any of its
Affiliates or any other third party. Subject to the provisions of
Section 14(b) with respect NeuLion, each Party will direct its employees,
Affiliates (solely with respect to Company), contractors, consultants and
representatives who have access to any Confidential Information to comply with
all of the terms of this Section 14. Information shall not be
Confidential Information if it is: (i) or becomes available to the public
through no wrongful act of the receiving Party; (ii) already in the possession
of the receiving Party and not subject to any agreement of confidence between
the Parties; (iii) received from a third Party without restriction for the
benefit of the disclosing Party and without breach of this Agreement; (iv)
independently developed by the receiving Party; or (v) disclosed pursuant to a
requirement of a duly empowered government agency or a court of competent
jurisdiction after due notice
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and an
adequate opportunity to intervene is given to the disclosing Party unless such
notice is expressly prohibited by such government agency or court of competent
jurisdiction. Except as otherwise expressly set forth herein, within
five (5) days following the end of the Wind Down Period, each Party shall at the
other Party’s direction, either return or destroy all of the other Party’s
Confidential Information (including without limitation all Subscriber
Information), and in the case of destruction, so certify to the other Party in
writing; provided that in the event that either Party does not so direct the
other Party, the receiving Party shall destroy the other Party’s Confidential
Information (including without limitation the return of all Subscriber
Information by NeuLion to Company) and, at the other party’s request certify
such destruction to the other Party in writing. For clarity, except
for Subscriber Information, and any copies thereof, with respect to a Subscriber
that has either formally contested a ▇▇▇▇ (with respect to which amounts payable
thereunder are outstanding as of the date that is five (5) days following the
end of the Wind Down Period) or otherwise has unpaid amounts due and owing for
the Service as of the date that is five (5) days following the end of the Wind
Down Period (collectively, the “Wind Down Contested ▇▇▇▇
Subscriber Information”), NeuLion shall not retain any Subscriber
Information following the date that is five (5) days after the last day of the
Wind Down Period. Upon retaining any Wind Down Contested ▇▇▇▇
Subscriber Information, NeuLion shall notify Company of the name and address of
the corresponding Subscriber. Following resolution of any such
contested ▇▇▇▇ or payment of amounts due and owing for the Service (such period
of time not to exceed sixty (60) days following the last day of the Wind Down
Period), NeuLion shall immediately send all Wind Down Contested ▇▇▇▇ Subscriber
Information for the applicable Subscriber to Company at the notice address
provided herein.
(b) In
addition to (and without limitation of) the provisions of Section 14(a), NeuLion
shall not make available any Company Confidential Information (including without
limitation Subscriber Information) to any employee of NeuLion that works on any
matter related or connected to the businesses of NeuLion’s Affiliates or any
entity or individual that currently or in the future operates or directs the
business activities of any of such Affiliates, either in whole or in
part. This Section 14(b) shall not apply to NeuLion’s full-time
management personnel at the vice president level or above, or NeuLion’s
accounting and technical personnel employed by NeuLion on a full-time basis,
solely to the extent that: (1) such personnel have a need to know such Company
Confidential Information and require access to the same in order for NeuLion to
perform hereunder; and (2) the access to and use of such Company Confidential
Information (including without limitation Subscriber Information) by such
personnel does not otherwise violate any provision of this
Agreement. At all times during the Term and thereafter, NeuLion shall
use its best efforts to cooperate with Company to ensure NeuLion’s compliance
with the terms and conditions of this Section 14(b).
15. Records and
Reporting. In addition to (and without limitation
of) any other reporting obligations set forth in this Agreement, and except as
provided in Exhibit G hereof, at all times during the Term and the Wind Down
Period NeuLion shall provide Company with real time, web-based access to all
order, billing, support and other customer and Subscriber records and
documentation (including without limitation Subscriber Information) collected or
maintained by or on behalf of NeuLion in connection with the
Service. In addition to (and without limitation of) the foregoing,
NeuLion shall provide Company with electronic copies of any such records and
documents within twenty-four (24) hours of a request by Company.
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16. Subscriber Information;
Targeting; PCI; Privacy Policy.
(a) Subscriber
Information. Subscribers shall be deemed customers of Company and shall
be under the sole ownership of the Company and not NeuLion. NeuLion
agrees that Subscriber Information is Company Confidential Information at all
times during and after the Term, including for clarity, and without limitation,
after expiration or termination of this Agreement for any reason and after any
Migration or the Wind Down Period. NeuLion may use the Subscriber
Information solely for the purpose of performing its obligations under this
Agreement and for no other purpose whatsoever. Notwithstanding
anything set forth to the contrary in this Agreement, any and all Subscriber
Information shall at all times during the Term and thereafter be owned by, and
remain the sole and exclusive property of, Company. NeuLion expressly
acknowledges and agrees that under no circumstances shall it share any
Subscriber Information with, or otherwise disclose any Subscriber Information
to, any third party, including without limitation its Affiliates, any other
service provider or any other NeuLion content providers. The
provisions of this Section 16(a) shall survive expiration or termination of this
Agreement for any reason indefinitely.
(b) Targeting.
During the Term and thereafter, NeuLion will not, and will ensure that NeuLion’s
Affiliates will not, in any way directly or indirectly target any Subscribers or
former Subscribers for purposes of marketing, promoting, selling or soliciting
orders for any product or service other than the Service through the direct or
indirect use of any Subscriber Information or any list derived, including or
compiled in any way therefrom. Subject to Section 6(b) of this
Agreement, this Section 16(b) shall not prohibit NeuLion from using any
information generally available in the marketplace for purposes of marketing,
advertising or selling any services, or communicating with potential customers
regarding such services generally, including without limitation through the use
of radio, television, telephone, newspaper advertisements and mass
mailings. The provisions of this Section 16(b) shall survive
expiration or termination of this Agreement for any reason
indefinitely.
(c) PCI Data Security
Standards. NeuLion will at all times protect the
confidentiality and security of cardholder data of potential Subscribers,
Subscribers and former Subscribers (“Cardholder Data”) in
compliance with the Payment Card Industry Data Security Standards (“PCI Data Security
Standards”) promulgated by the PCI Security Standards Council, LLC or any
successor entity thereto, as may be amended from time to time, and which are
available
at: ▇▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. NeuLion
acknowledges and agrees that Cardholder Data may only be used: (i) to the extent
necessary to verify, store, process or transmit Cardholder Data to Company to
complete a card transaction; (ii) for fraud control; (iii) as specifically
agreed to by the applicable payment card company, provided that such use has
also been approved in writing by Company, such approval not to be unreasonably
withheld; or (iv) as required by applicable Laws. In the event of a
breach or intrusion of or otherwise unauthorized access to Cardholder Data
stored at or for NeuLion, NeuLion will immediately notify Company and the
applicable payment card company, in the manner required in the PCI Data Security
Standards, and provide Company and the applicable payment card company and their
respective designees access to NeuLion’s facilities and all pertinent records to
conduct a review of NeuLion’s compliance with the PCI Data Security Standards.
NeuLion will fully cooperate with any review of their facilities and records
provided for herein. NeuLion will maintain appropriate business continuity
procedures and systems to ensure security of Cardholder Data in the event of a
disruption, disaster or failure of NeuLion’s data systems. NeuLion
and its successors and assigns will comply with the PCI Data Security Standards
after termination or expiration of this Agreement.
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(d) Privacy
Policy. Company shall make available to NeuLion, and to each
Subscriber to the Service, a clear written statement of its privacy policy
relating to Subscribers’ personally identifiable information (the “Privacy
Policy”). NeuLion shall comply with the Privacy Policy at all
times. Furthermore, NeuLion acknowledges and agrees that all
Subscriber Information collected by, or provided to, NeuLion pursuant to and
related to this Agreement, whether collected from, or provided by, Company or a
Subscriber, shall be subject to, and used in accordance with, the terms and
conditions of the Privacy Policy and all applicable Laws.
17. *******.
(a) During
the Term and the Wind Down Period, NeuLion agrees that the NeuLion Services
provided to Company and the Service provided to Subscribers shall be *******
Company and Subscribers (including without limitation, the Service) under this
Agreement (collectively, the “NeuLion
Customers,” and each a “NeuLion
Customer”). In furtherance of the foregoing, NeuLion agrees
that ******* for any
other reason whatsoever. Accordingly, NeuLion will provide *******
NeuLion Customers from time to time during the Term. In
addition to (and without limitation of) the foregoing, NeuLion shall offer
Company ******* NeuLion Customers (other than NeuLion
Affiliates). In addition to (and without limitation of) the
foregoing, NeuLion will not: *******
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*******
NeuLion Customer. Notwithstanding anything set forth to the contrary
in this Section 17, this Section 17 shall not prohibit NeuLion from providing
*******.
(b) In
addition to (and without limitation of) the foregoing, commencing on the date on
which Company achieves ******* during the Term and the Wind Down Period,
provided Company maintains *******, NeuLion agrees that the fees, charges and
any and all amounts payable by Company to NeuLion pursuant to Sections A, B and
C of Exhibit C, on an individual net- effective basis, shall be ******* the
fees, charges or amounts payable *******. The obligations set forth in this
Section 17(b) shall not apply to NeuLion following completion of an acquisition
of at least a fifty percent (50%) ownership interest in the Company by an entity
(other than a Company Affiliate) *******.
18. General Indemnification;
Defense; Cooperation.
(a) Except
to the extent of the Indemnitee Group’s (as hereinafter defined) negligence or
misconduct, each Party (the “Indemnitor”) shall
indemnify, defend and hold harmless the other Party (and solely with respect to
Company, its Affiliates), and its and their respective officers, directors,
employees, agents and shareholders, and its and their respective assigns, heirs,
successors and legal representatives (collectively, the “Indemnitee Group”)
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
to one or more people or entities that are not the Parties or an Affiliate of
Company, agents or representatives, in the investigation, defense or settlement
of any or all of the foregoing (“Claims”), that are
made by any third party to the extent that such Claims arise out of, or are
incurred in connection with: (i) Indemnitor’s performance or failure to perform
under this Agreement; (ii) Indemnitor’s breach of any of its obligations
hereunder; (iii) Indemnitor’s breach of any representation or warranty contained
in this Agreement; or (iv) Indemnitor’s failure to comply with any
Law.
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(b) Indemnification
Process. In the event that a Claim is asserted against the
Indemnitee Group that would give rise to a claim for indemnification under this
Section 18, the Indemnitee Group shall: (i) provide written notice to Indemnitor
within ten (10) days after becoming aware of such Claim; provided that
Indemnitor’s obligation to defend shall only be reduced to the extent that its
ability to provide a defense has been materially and adversely affected by any
failure to so notify; and (ii) Indemnitor, at its sole cost and expense and upon
written notice to the Indemnitee Group, may assume the defense of such Claim
with counsel selected by Indemnitor in its sole and absolute discretion.
The Indemnitee Group: (i) shall not compromise the Claim in any way or admit
liability without Indemnitor’s prior written consent; and (ii) shall cooperate
with Indemnitor in defense of such Claim and accept any settlement recommended
by Indemnitor so long as (1) the Indemnitee Group does not admit any fault or
liability under such settlement; and (2) the entire amount of such settlement is
paid by Indemnitor.
(c) Indemnification Process for
High-Risk Claims. Notwithstanding the foregoing provision and
anything to the contrary contained herein, in the event of Claims relating to or
arising from the Indemnitee Group’s third-party contracts, the Indemnitee
Group’s or a third party’s intellectual property rights pursuant to Section 19
of this Agreement, the Indemnitee Group shall have the right to select counsel
in its sole and absolute discretion, at Indemnitor’s sole but reasonable cost
and expense, and shall have the right to the exclusive conduct of all
negotiations, litigation, settlements and other proceedings arising from any
such Claim; provided that Indemnitor shall have the right to approve any
settlement that requires Indemnitor to indemnify the Indemnitee Group against a
settlement payment. Indemnitor shall cooperate with the Indemnitee Group
in connection with any such negotiation, litigation, settlement, defense or
other proceeding and shall not compromise the Claim in any way or admit
liability without the Indemnitee Group’s prior written consent.
(d)
Survival.
The provisions of this Section 18 shall survive the expiration or termination of
this Agreement (for any reason) indefinitely.
19. IP
Indemnification.
(a) In
addition to (and without limitation of) each Party’s respective indemnification
obligations set forth in Section 18 of this Agreement: (i) NeuLion will
indemnify, defend and hold harmless Company and it Affiliates and its and their
respective officers, directors, employees, agents and shareholders, and its and
their respective assigns, heirs, successors and legal representatives (the
“Company
Group”) from and against all third-party claims against, and any related
damages, claims, expenses (including reasonable attorney’s fees), judgments,
liabilities and costs, which such party may suffer or incur relating to any
claim or action alleging that the NeuLion IP, the STBs, the STB Components, the
NeuLion Services, the Service (excluding the Content) (solely for purposes of
this Section 19, collectively, the “NeuLion IP Indemnification
Items”) infringe any third-party Intellectual Property Rights;
and (ii) Company will indemnify, defend and hold harmless NeuLion and its
officers, directors, employees, agents and shareholders, and its and their
respective assigns, heirs, successors and legal representatives (the “NeuLion Group”) from
and against all third-party claims against, and any related damages, claims,
expenses (including reasonable attorney’s fees), judgments, liabilities and
costs, which such party may suffer or incur relating to any claim or action
alleging that the Content infringes any third-party Intellectual Property
Rights.
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(b) In
the event of any third-party claim against a member of the Company Group in
respect of any of the NeuLion IP Indemnification Items, or any portion thereof,
NeuLion, at its option, may: (a) obtain the right to use such NeuLion
Indemnification Items, or applicable portion thereof, without obligation on the
part of Company to the owner of the allegedly infringed intellectual property;
(b) modify the infringing portion of the NeuLion IP Indemnification Items
without materially diminishing the functionality or performance, thereof, to
become non-infringing at NeuLion’s sole expense; or (c) discontinue the use of
infringing NeuLion Indemnification Items, or the infringing portion thereof, to
the extent that NeuLion continues to meet its obligations
hereunder. In the event of any third-party claim against any member
of the NeuLion Group in respect of the Content, Company, at its option, may: (i)
obtain the right to use the Content without obligation on the part of NeuLion to
the owner of the allegedly infringed intellectual property, or (ii) discontinue
the use of infringing Content. The provisions of this Section 19
shall survive the expiration or termination of this Agreement (for any reason)
indefinitely.
20. Limitation of
Liability. THE PARTIES AGREE THAT, EXCEPT FOR BREACHES OF, OR
CLAIMS UNDER, SECTIONS ******* OF THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE
FOR ANY INDIRECT, EXEMPLARY, SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, OR
OTHER INDIRECT DAMAGES OF WHATEVER NATURE, WHETHER FORESEEABLE OR NOT, INCLUDING
WITHOUT LIMITATION, ANY PAYMENT FOR LOSS OF GOODWILLL WHETHER SUCH LIABILITY IS
ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT
LIABILITY) OR OTHERWISE, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
21. Assignment; Amendment;
Waiver; Subcontracting.
(a) Neither
Party may assign this Agreement or any of its respective rights or obligations
under this Agreement without the prior written consent of the other Party;
provided, however, that Company may assign this Agreement to an Affiliate of
Company in whole or in part at any time upon notice to
NeuLion. Notwithstanding the foregoing, the public offering of a
Party, a sale of a controlling interest in a Party, or a sale of substantially
all of the assets of a Party shall not constitute an assignment for purposes of
this Section.
(b) This
Agreement and the rights and obligations hereunder may not be in whole or part:
(i) amended; (ii) waived; or (iii) subcontracted by either Party, without the
prior written consent of the other Party. Any purported modification
without such prior written consent shall be null and
void. Notwithstanding anything set forth to the contrary in this
Agreement, Company may subcontract its obligations, either in whole or in part,
to any of its Affiliates at any time and from time to time in its sole
discretion for any reason or no reason, provided that Company shall be
responsible for the acts and omissions of its Affiliate(s). The
failure of a Party to assert any of its rights under this Agreement, including
without limitation the right to demand strict performance, shall not constitute
a waiver of such rights.
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22. Audit. Subject
to the confidentiality provisions of this Agreement, during the Term of this
Agreement and for a period of two (2) years thereafter, NeuLion shall keep and
maintain accurate and complete books and records of account in connection with
its performance under this Agreement (including without limitation internet
protocol addresses all data related to the STBs and the Service and all other
items with respect to which NeuLion has any reporting obligations to Company
hereunder). For clarity, with the exception of Contested ▇▇▇▇
Subscriber Information (with respect to which amounts payable thereunder are
outstanding as of the date that is five (5) days following the end of the Wind
Down Period), all Subscribers, former Subscribers and Migrated Subscribers shall
be identified in NeuLion’s books and records by such Subscribers’, former
Subscribers’ and Migrated Subscribers’ corresponding STB MAC address(es), or by
such other information as may be mutually agreed upon by the Parties in writing
that uniquely identifies each such Subscriber, former Subscriber and Migrated
Subscriber. For further clarity (and without limitation of any of the
foregoing) this Section 22 shall not affect NeuLion’s obligations to return
and/or destroy Confidential Information (including without limitation Subscriber
Information) in accordance with the terms and conditions of this
Agreement. Company may audit the books and records of NeuLion
relevant to this Agreement no more than twice each year. All such
audits shall be performed at NeuLion’s principal offices, in the United States,
where such records are kept by an independent accounting firm chosen by
Company. Except as otherwise provided in this Section 22, all audits
shall be performed at the sole expense of the Company. All such
audits will take place on reasonable notice and during NeuLion’s normal business
hours. Such audits will be conducted to determine that NeuLion is or
has performed in accordance with the terms and conditions of this Agreement and
all Business Rules (including without limitation, with respect to NeuLion’s
accounting, billing, cash collection and cash distribution obligations in
connection with this Agreement). NeuLion shall cooperate with Company
by making available all personnel and books and records relevant to this
Agreement that are requested by the applicable independent accounting firm
during any audit conducted hereunder. Any accounting discrepancies
will be resolved within thirty (30) days from the last day of the audit, and in
the event those discrepancies reveal an overcharge of, or underpayment to,
Company by Neulion that is *******, NeuLion will pay the amount of such
overpayment or underpayment together with the reasonable and actual costs of the
audit incurred by Company within sixty (60) days of the completion of the
applicable audit. The audited books and records as well as the
results of any such audit shall be considered Confidential Information as set
forth in this Agreement; provided, however, nothing in this provision shall be
construed to preclude the use of such materials in the course of litigation
between the Parties regarding this Agreement, if
necessary. Company shall be entitled to conduct an audit
regardless of the existence of any claim, dispute, controversy, litigation or
other action between the Parties. The provisions of this Section 22
shall survive expiration or termination of this Agreement for any reason or no
reason for a period of two (2) years.
23. No Third Party
Beneficiaries. Except as otherwise set forth herein, this
Agreement is entered solely by and between the Parties and shall not be deemed
to create any rights in, or obligations to, any third parties.
24. Insurance. NeuLion
shall, at its own expense, obtain and maintain the following
insurance:
(i) Commercial
General Liability, with coverage including, without limitation,
premises/operations, contractual, personal and advertising injury, and
products/completed operations liabilities, with limits of at least five million
dollars ($5,000,000) per occurrence for bodily injury and property damage
combined. Company shall be named as an additional
insured.
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(ii) Worker’s
Compensation insurance, including coverage for all costs, benefits, and
liabilities under Worker’s Compensation and similar laws which may accrue in
favor of any person employed by NeuLion for all states in which the Services are
rendered, and Employer’s Liability insurance with limits of liability of at
least two hundred fifty thousand dollars ($250,000) per accident or disease and
seven hundred fifty thousand dollars ($750,000) aggregate by
disease.
Insurance
shall be purchased from companies having a rating of A-VII or better in the
current Best’s Insurance
Reports published by A.M. Best Company. Policies of insurance
shall provide that they will not be canceled or materially changed without at
least thirty (30) days prior written notice to Company. Certificates
of insurance evidencing coverage shall be submitted in advance of or concurrent
with the execution of this Agreement, and on each insurance policy renewal
thereafter. NeuLion shall, at Company's request, provide copies of
required insurance policies. If NeuLion does not provide Company with
such certificates of insurance, or if in Company’s sole opinion, such policies
do not afford adequate protection for Company, Company will so advise NeuLion,
and if NeuLion does not furnish evidence of acceptable coverage within fifteen
(15) days, Company shall have the right, in its sole discretion for any reason
or no reason, to immediately terminate this Agreement. Failure to
obtain and maintain required insurance shall not relieve NeuLion of any
obligation contained in this Agreement. Additionally, any approval by
Company of any of NeuLion’s insurance policies shall not relieve NeuLion of any
obligation contained in this Agreement, including liability for claims in excess
of described limits.
25. Force
Majeure. Notwithstanding anything to the contrary set forth in
this Agreement, neither Party shall be liable to the other for its failure to
perform any of its obligations under this Agreement during the period of a Force
Majeure Event to the extent that performance is prevented by such Force Majeure
Event. The party that is prevented from fully performing its
obligations under this Agreement due to such Force Majeure Event (the “Affected Party”)
shall promptly take and continue to take all reasonable actions to resume its
performance as soon as possible. “Force Majeure Event”
shall mean the following unforeseen and extraordinary events that are beyond the
reasonable control of the Affected Party: (a) acts of God; (b) acts
of a public enemy; (c) acts of a government in its sovereign capacity; (d) war;
(e) catastrophic weather conditions such as hurricanes, tornadoes and typhoons;
(f) fire, earthquakes, floods, epidemics, quarantine restrictions, sabotage,
riot and embargoes; (g) transmission of Content through the ‘last mile’, or
final leg of delivering connectivity from the Subscriber’s local communications
provider to the Subscriber’s viewing location; and (h) failure of financial
institutions or payment systems, which in every case listed in items (a) through
(g) above are: (i) without fault or negligence of the Affected Party or its
suppliers and subcontractors, and (ii) prevent the Affected Party from
performing its obligations under this Agreement. The Affected Party
shall provide notice to the other party of a Force Majeure Event within twenty
four (24) hours following the commencement of the Force Majeure Event (or, if
not possible due to such Force Majeure Event, as soon as possible
thereafter). Such notice shall specify, at minimum, the date and time
of commencement of the Force Majeure Event, the cause of the Force Majeure Event
and the Affected Party’s plan to resume its performance. Events for
which such notice is not delivered shall not be deemed to be Force Majeure
Events. In the event that a Force Majeure Event prevents the Affected
Party from performing its obligations under this Agreement, in whole or in part,
for a period of ten (10) or more days in excess of the applicable time period
specified herein for such performance, if any, the other party shall have the
right to terminate this Agreement immediately upon delivery of written notice to
the Affected Party. For the avoidance of doubt, NeuLion’s payments to Company hereunder shall not be
excused during the period of any Force Majeure Event except to the extent that a
Force Majeure Event listed in item (h) above prevents or delays such
payments.
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26. Governing
Law. The relationship between the Parties and their present
and future Affiliates, including without limitation all disputes, controversies
or claims, whether arising in contract, tort, under statute or otherwise, shall
be governed by and construed in accordance with the laws of the State of New
York applicable to contracts to be made and performed entirely within the State
of New York by residents of the State of New York, without giving any effect to
any of its conflict of law or any other provisions that would require the
application of the laws of any other jurisdiction. If Company chooses
to file a lawsuit or pursue an action arising from or relating to this Agreement
or the relationship between the Parties created hereby, such lawsuit or action
shall be litigated solely and exclusively before the United States District
Court for the Southern District of New York or the United States District Court
for the Eastern District of New York, and if neither the United States District
Court for the Southern District of New York nor the United States District Court
for Eastern District of New York has subject matter jurisdiction over any such
matter, then such matter shall be litigated solely and exclusively before the
appropriate state court of competent jurisdiction located in the County of New
York or the County of Nassau, New York. If NeuLion chooses to file a
lawsuit or pursue an action arising from or relating to this Agreement or the
relationship between the Parties created hereby, such lawsuit or action shall be
litigated solely and exclusively before the United States District Court for the
District of Colorado, and if the United States District Court for the District
of Colorado does not have subject matter jurisdiction over any such matter, then
such matter shall be litigated solely and exclusively before the appropriate
state court of competent jurisdiction located in the City and County of Denver
in the State of Colorado. The parties and their present and future
Affiliates consent to the in
personam jurisdiction of the United States District Court for the
Southern District of New York and the United States District Courts for the
Eastern District of New York, the United States District Court for the District
of Colorado, and the appropriate state courts located in the County of New York
and the County of Nassau in the State of New York and the City and County of
Denver in the State of Colorado, and waive, fully and completely, any right to
dismiss and/or transfer any action pursuant to Title 28 U.S.C. Section 1404 or
1406 (or any successor statute).
27. Notices. Any
notice, request, demand or other communication required to be given or made in
connection with this Agreement shall be: (a) in writing; (b) delivered or sent
(i) by hand delivery, evidenced by a signed, dated receipt, (ii) postage prepaid
via U.S. certified mail, return receipt requested, (iii) by overnight delivery
via a nationally recognized courier service, charges prepaid, or (iv) via
confirmed facsimile transmission; and (c) deemed given or made on the date of
delivery (if by hand delivery, certified mail, or overnight courier service), or
on the date of sending (if by facsimile transmission), if sent to the applicable
Party at the addresses set forth below, or to such other persons or address(es)
as either Party may designate from time to time by written notice to the other
Party in accordance with this Section 27:
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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If to NeuLion, to:
NeuLion
USA, Inc.
Attn:
President
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No.:
(▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute
notice) to:
NeuLion
USA, Inc.
Attn:
General Counsel
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No.:
(▇▇▇) ▇▇▇-▇▇▇▇
If to
Company, to:
DISH Network L.L.C.
Attn: Executive V.P. of Sales,
Marketing and Programming
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute
notice) to:
DISH Network L.L.C.
Attn: General Counsel
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
28. All Legal Provisions Deemed
Included; Severability; Supremacy.
(a) Every
provision required by Law to be inserted into or referenced by this Agreement is
intended to be a part of this Agreement. If any such provision is not
inserted or referenced or is not inserted or referenced in correct form then:
(i) such provision shall be deemed inserted into or referenced by this Agreement
for purposes of interpretation; and (ii) upon the application of either Party
this Agreement shall be formally amended to comply strictly with the Law,
without prejudice to the rights of either Party.
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(b) In
the event that any provision of this Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.
(c) Unless
the application of this subsection will cause a provision required by Law to be
excluded from this Agreement, in the event of an actual conflict between the
terms and conditions set forth above the signature page to this Agreement and
those contained in any schedule, exhibit, appendix, or attachment to this
Agreement, the terms and conditions set forth above the signature page shall
control. To the extent possible, all the terms of this Agreement
should be read together as not conflicting.
29. Section and Other
Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
30. Entire
Agreement. This Agreement represents the full and entire
understanding and agreement between the Parties with regard to the subject
matter hereof and supersedes all prior agreements (whether written or oral) of
the Parties relating to the subject matter of this Agreement.
31. Remedies. In
the event of any breach or threatened breach by a Party of any of the terms and
provisions of this Agreement, the other Party, in addition to any other rights
or remedies available to such Party, shall have the right to injunctive,
declaratory and any other equitable relief that may be available to such Party
as if no other remedies were provided herein for such breach.
32. Capitalized Terms in
Exhibits. Capitalized terms used in any exhibit,
schedule or attachment hereto that are not otherwise defined therein shall have
the meaning ascribed to them in this Agreement.
33. Joint Press
Release. On a date following execution of this Agreement to be
mutually agreed upon in writing by the Parties, either Party may issue a press
release which shall be in substantially the form of the draft press release
attached hereto as Exhibit I, but which remains subject to being finalized by
mutual written agreement of the Parties. Except as otherwise
expressly provided in this Section 33, neither Party shall issue any press
releases regarding this Agreement or the transactions contemplated hereby unless
mutually agreed by the Parties in writing.
34. Parent
Guaranty. By execution below, Parent hereby
guarantees the performance of NeuLiuon’s obligations under this Agreement and
agrees to be jointly and severally liable therefor.
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35. Filing of Redacted
Agreement. NeuLion shall provide Company with an opportunity
to review and approve (such approval not to be unreasonably withheld) any
redacted version of this Agreement prior to filing the same with any
governmental agency, whether in the United States (including without limitation
the U.S. Securities and Exchange Commission) or Canada, or any other third
party. Such review and approval by Company shall take place within a
commercially reasonable period of time taking into consideration any filing
deadlines imposed by applicable Laws of which NeuLion makes Company
aware.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties have
executed this Agreement as of the date first above written.
|
NeuLionUSA,
Inc.
|
Company:
|
DISH
Network L.L.C.
|
|
By:
|
/s/
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
By:
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
| (Authorized Signature) | (Authorized Signature) |
|
▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|
| Type or Print Name of Person Signing | Type or Print Name of Person Signing |
|
Secretary
|
EVP
|
|
| Title | Title |
Solely
with respect to the guarantee contained in Section 34 of this Agreement, Parent
has executed this Agreement by its duly authorized representatives as of the day
and year first written above:
By: /s/ ▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
Name:
▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
Title:
Secretary
[SIGNATURE
PAGE TO CONTRACT FOR PRODUCTS AND SERVICES DATED AS OF
JANUARY
4, 2010]
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EXHIBIT
A
NEULION
PROVIDED SERVICES
During
the Term and the Wind Down Period, NeuLion shall provide the NeuLion Services
and deliverables set forth in this Exhibit A for all functions required to
provide the Service as set forth in, and subject to and in accordance with, this
Agreement, except that it is agreed and understood that during the Wind Down
Period, NeuLion shall not be required to provide any new functionality or
modifications to the NeuLion Services; provided that NeuLion shall ensure that
during the Wind Down Period the NeuLion Services and the Service are maintained
at the same or at least the same level of quality, service and performance as
provided by NeuLion to Company during the Term (including without limitation
NeuLion’s provision to Company of any and all software fixes and patches during
the Wind Down Period under the same terms and conditions applicable to NeuLion’s
provision of such software fixes and patches during the Term). The
NeuLion Services and such deliverables shall include, without limitation, a
web-based order entry tool, set top box manufacturing and fulfillment, Content
encoding and management, Content delivery, Subscriber activation, and all back
office operations for the Service including without limitation the performance
of billing and collection services for Company and Subscribers. In
addition to (and without limitation of) NeuLion’s other obligations set forth in
this Agreement, NeuLion shall be responsible for obtaining any and all requisite
legal and regulatory approvals for any locality where the Service is provided in
the Territory.
A. Order
Entry and Billing System.
1. Order Entry
System. NeuLion shall provide a web-based order entry system
whereby new Subscribers, or an agent acting on behalf of a new Subscriber, may
order the Service (including without limitation one or more STBs, as determined
by Company at any time and from time to time in its sole discretion for any
reason or no reason) from Company (the “Order Entry
System”). The Order Entry System shall support direct order
entry capture from any one or more of Company’s web sites (“Company Websites”)
and, at Company’s request, third-party websites that Company has authorized to
promote the Service and provided NeuLion with written notice of such
authorization (“Affiliate
Websites”). The Company Websites shall be created, published
and maintained at Company’s sole expense and in Company’s sole discretion to
market and promote the Service, and shall direct potential orders for the
Service to the Order Entry System via a graphical user interface (GUI) to be
provided by Company. In accordance with applicable Business Rules,
the Order Entry System shall be customized by NeuLion to be branded as directed
by Company and shall be online and fully-functional not later than the Launch
Date (as defined in Section K of this Exhibit A). In addition to such
other functionality as may be mutually agreed upon by the Parties from time to
time during the Term and the Wind Down Period, the Order Entry System shall
include, at a minimum:
(a) the
functionality to accept orders for the Service and STBs and to accept payments
therefor;
(b) the
following fields to be completed by each Subscriber when placing an order for
the Service:
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First
Name;
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Last
Name;
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Service
Address;
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Billing
Address;
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Home
Telephone Number;
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Work
Telephone Number (optional);
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Mobile
Telephone Number (optional);
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Email
Address;
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Credit/Debit
Card Type;
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Credit/Debit
Card Number;
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Credit/Debit
Card Expiration Date; and
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Any
other fields reasonably requested by
Company;
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(c) terms
and conditions of service applicable to the Service, as specified by Company
from time to time and at any time in its sole discretion for any reason or no
reason (including without limitation as may be required by applicable Laws
and/or to make such terms binding and enforceable on the Subscriber), and a
traceable click through “I agree” or “I accept” of such terms and conditions
prior to ordering service;
(d) tracking
and reporting of time and date each customer accepted such terms and conditions;
and
(e) functionality
to allow third-party retailers/resellers, if any, authorized by Company at any
time and from time to time in its sole discretion for any reason or no reason to
place orders for STBs and the Service for prospective Subscribers and to track
sales (including without limitation sales performed by such retailers/resellers
via one or more websites) origination to the applicable retailer/reseller (for
example, and without limitation, for purposes of allowing Company to identify
retailers/resellers in order to pay such retailers/resellers commissions,
incentives or other payments to the extent that Company elects to do so at any
time and from time to time in its sole and absolute discretion for any reason or
no reason).
(f)
functionality to allow tracking of sales origination for orders for STBs and the
Service placed as a result of click-throughs from Affiliate
Websites.
2. Billing and Management
Systems. The Subscriber billing and account management
systems used by NeuLion to support the Service (the “Billing Systems”)
will be fully accessible by Company and its customer service representatives via
the web on a 24/7 basis during the Term and the Wind Down Period and shall
provide such functionality as reasonably requested by Company, including without
limitation, the ability for Company to, in real time: (a) apply payments,
credits, discounts and refunds to any Subscriber account; (b) view all
Subscriber and account information and other data that NeuLion will otherwise
provide to Company pursuant to the NeuLion reporting requirements set forth in
Section I of this Exhibit A and elsewhere in this Agreement; and (c) activate
new Subscribers and deactivate existing Subscribers at any time and from time to
time in Company’s sole discretion for any reason or no reason. For
clarity, Company and Company’s customer service representatives shall at all
times during the Term and the Wind Down Period, on a 24/7 basis, except as
provided for in Exhibit G, have full access via the web to the Billing Systems
so as to provide Company with visibility to all Subscriber billing and account
records and information. NeuLion shall promptly provide Company with
copies of any additional information related to Subscribers or to the Service as
may be requested by Company at any time and from time to time during the Term
and the Wind Down Period.
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B. Content
Encoding and Management.
1. Transcoder Licensed
Programs. NeuLion shall deliver, install,
implement, support, maintain and provide remote management of the Transcoder
Licensed Programs operating on Company supplied and owned server(s) meeting the
minimum specifications set forth in Exhibit D (“Company Servers”),
the use of which Transcoder Licensed Programs shall support the provision of the
Service through all Company-authorized STBs provided to Company by NeuLion in
accordance with this Agreement. Installation of the Transcoder
Licensed Programs on the Company Servers shall be performed by NeuLion so that
the same are fully operational for the provision of the Service no later than
ten (10) days following the availability of Company supplied hardware
and payment as set forth in Exhibit C. For clarity (and without
limitation of any of the foregoing) the Transcoder Licensed Programs shall be
compatible with Company’s delivery of Content in serial digital interface (SDI)
format. Notwithstanding anything set forth herein to the contrary,
under no circumstances during the Term or at any time thereafter shall NeuLion
or any of its Affiliates: (a) take any action which would cause any harm or
damage to the Company Servers or any other systems or equipment owned or
controlled by Company or any of its Affiliates; (b) access the Company Servers
or any other systems or equipment owned or controlled by Company or any of its
Affiliates, except as specifically contemplated hereunder with respect to
NeuLion in order for NeuLion to perform its obligations as herein set forth with
respect to the Service.
2. Content
Encoding. Utilizing, among other things,
the Transcoder Licensed Programs operating on Company Servers, NeuLion shall be
responsible for encoding the Content into NeuLion’s AVC (Advanced Video
Compression) format at thirty (30) frames per second using NTSC standard to
deliver full D1/VGA video and AAC audio with an encoding bit rate of 850 kbps,
or lower as directed by Company, and at a screen display resolution of 720 x
480.
3. Content
Storage. In addition to (and without limitation of)
NeuLion’s other storage, backup and maintenance obligations hereunder, on a
rolling basis, NeuLion shall store, backup and maintain NeuLion AVC-encoded
Content to support and allow Subscriber access to the most recent forty-eight
(48) hours of broadcast Content per channel on demand by Subscriber and at no
additional cost to the Subscriber.
C. EPG Data
Management. NeuLion shall upload all channel programming
information and playout times and grids from Tribune or any other entity
designated by Company and approved by NeuLion, such approval not to be
unreasonably withheld. NeuLion shall accurately display all such
information in an electronic programming guide for Company in a form modifying
NeuLion’s standard electronic programming guide (“Company EPG”) for
each channel available to the applicable Subscriber depending upon the Service
package(s) to which such Subscriber has subscribed or for all channels available
via the Service, and in any case as set forth in applicable Business
Rules. At Company’s option, Company may provide all Company EPG data
via Excel spreadsheet format. All Company EPG data, Company EPG
interface and customization (including without limitation the look and feel of
the Company EPG) shall be owned by Company.
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D. Content
Delivery; Redundancy and Service Monitoring.
1. Content
Delivery. NeuLion shall broadcast and deliver Content
via the Service to Subscribers using the NeuLion IPTV Platform (including
without limitation by providing all required processes, technology and ongoing
personnel services in connection with such broadcast and
delivery). In connection with the foregoing (and without limitation),
NeuLion shall: (a) support Subscriber access control to Content packages for
which Subscriber has paid in full (including without limitation by employing
Conditional Access Measures and Geoblocking/Geofiltering Measures) and selection
management of linear broadcast channel(s) comprising the Content; (b) stream
linear broadcast channel(s) comprising the Content on a unicast transmission
basis; and (c) provide and manage internet protocol (IP) network bandwidth
resources as required to support delivery of Content via the Service consistent
with the highest standards applicable to the IPTV industry.
2. Redundancy and Service
Monitoring. At all times during the Term and the Wind
Down Period, NeuLion shall employ and maintain in place on 24/7 basis: (a)
redundant systems used by NeuLion to provide the Service and broadcast Content
(the “Redundancy
Systems”); and (b) procedures and systems in place for monitoring, backup
and recovery from disruptions to the Service (the “Recovery
Systems”). In addition to (and without limitation of any of
the foregoing), prior to the Launch Date, the Parties shall work together to
develop Business Rules regarding communications between them in the event of any
service interruptions affecting the Service or the Content. At all times during
the Term and the Wind Down Period, NeuLion shall utilize multiple,
physically-separated data centers to provide the Redundancy Systems and Recovery
Systems that adhere to the following minimum standards:
(a) located
in carrier-grade, commercial collocation facilities providing uninterrupted
power and air;
(b) utilizing
multiple, tier 1 internet transit providers for inter-connection between data
centers as well as outbound Content streaming supporting an aggregate bandwidth
inbound and outbound of no less than two (2) Gigabits per second;
(c) equipped
with redundant network and server hardware;
(d) monitored
24x7x365 by NeuLion’s network operations personnel; and
(f) secured
for physical access 24x7x365 by collocation facilities personnel with electronic
access secured by network firewall, anti-virus and intrusion prevention systems
in accordance with industry standards.
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E. Support
of Company Service Support Requests. NeuLion shall provide
Company with second level (Tier II) customer service and technical support on a
24/7 basis as further described in Exhibit F (the “Tier II
Support”). NeuLion shall log and track all activity with
respect to Tier II Support requests made by Company using NeuLion’s computerized
support tracking systems (including without limitation, NeuLion’s proprietary
IPTV Service Support program), all of which shall be accessible to Company and
its customer service representatives via the web on a 24/7 basis. At
Company’s request, NeuLion shall provide Company with first level (Tier I)
customer service and technical support (the “Tier I Support”) in
addition to Tier II Support. The terms and conditions applicable to
NeuLion’s provisioning of Tier I support to Company shall be mutually agreed
upon and set forth in a separate written agreement to be entered into between
the Parties and guaranteed by Parent.
F. Training
Support.
1. Training
Materials. At no additional cost to Company,
NeuLion shall provide Company with written manuals and training materials
pertaining to the Service, the Billing Systems, the Order Entry System, the
STBs, STB Components, and to such other items related to the Service as may be
reasonably requested by Company prior to or during the Term, or during the Wind
Down Period (the “Manuals and Training
Materials”). In the event of any change or modification to the
NeuLion IPTV Platform (or portion thereof) or any other change affecting the
Service (other than changes to the Content), including without limitation
changes or modifications to the Billing Systems or the Order Entry System, that
renders any of the Manuals and Training Materials, or portion thereof, outdated,
obsolete, incomplete, incorrect or inaccurate (each a “Change”), NeuLion
shall provide the applicable updates to such Manuals and/or Training Materials
within a commercially reasonable period of time following such change or
modification; provided, however, that in the case of a material change affecting
the Service, NeuLion shall use its commercially reasonable efforts to provide
Company with the applicable update as far in advance of the change as is
possible.
2. Training.
In addition to (and without limitation of the foregoing), NeuLion shall provide,
at its sole costs and expense, one (1) day of training to teach Company’s
employees how to use the Billing Systems (the “Initial
Training”). Such Initial Training will be provided at
Company’s principal offices in Englewood, Colorado, at a time and on a date to
be mutually agreed upon by the Parties, which time and date shall be prior to
the Launch Date (as defined in Section K of this Exhibit A). If
requested by Company, NeuLion will provide additional training to Company from
time to time during the Term at the principal offices of NeuLion or Company, or
at such other location as may be mutually agreed upon from time to time by the
Parties. Company shall pay for any such additional training at the
rate of *******, payable on a net sixty (60) day basis from the date of
Company’s receipt of the applicable invoice from NeuLion. If such
additional training is held at a location other than at NeuLion’s Plainview, New
York office, Company shall also reimburse NeuLion for its reasonable travel
costs and other expenses incurred with respect to such additional training,
which travel costs and other expenses shall be subject to Company’s prior
written approval and comply with Company’s travel policy.
G. Subscriber
Provisioning.
NeuLion shall provide the process, technology and ongoing personnel services to
setup and provision new Subscribers, maintain existing Subscriber account
information and perform monthly Subscriber billing.
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1. Self-Service
Facility. At all times during the Term and the Wind Down
Period, NeuLion shall make available to Subscribers a web-based self-service
facility (the “Self-Service
Facility”) that will allow each Subscriber to, among other things, obtain
and print such Subscriber’s past and present Service billing statements and
access and modify such Subscriber’s Service account and payment
information.
2. Ongoing Account
Maintenance. NeuLion shall provide ongoing Subscriber account
maintenance utilizing, among other things, the Billing Systems, including
without limitation, by making applicable updates to such accounts, storing
back-up copies of the information contained in such Subscriber accounts, and
tracking and maintaining a record of all Media Access Control (MAC) addresses
assigned to each STB activated with respect to all Subscriber
accounts.
3. New Orders and
STBs. NeuLion shall review the orders received through
the Order Entry System on a rolling basis and shall ship new STBs to new
Subscribers as per its normal one (1) day business practice but no later than
three (3) business days after NeuLion’s receipt of the corresponding new
order. For clarity (and without limitation of any of the foregoing),
such three (3) business day shipping timeframe may be extended in accordance
with Section 25 of this Agreement as a result of the occurrence of a Force
Majeure Event. All STBs shall be shipped to Subscribers “hot,”
meaning that the STB is preactivated.
4. Packout Materials and STB
User Guide. At no additional cost to Company, Neulion
shall include all written and other packout materials reasonably requested by
Company to be included in the STB shipping box sent to Subscribers; provided
that such materials are provided to NeuLion by Company and: (a) do not increase
NeuLion’s cost of standard shipping applicable to shipment by NeuLion of STBs
within the Territory generally (in the case that the applicable STBs are being
shipped using NeuLion’s Fed Ex, UPS or other shipping carrier account); or (b)
fit within NeuLion’s standard STB packaging, as further described herein (in the
case that the applicable STBs are being shipped using Company’s or any of its
Affiliate’s FedEx, UPS or other shipping carrier account). NeuLion
agrees to provide Company with an electronic version of the Subscriber “User
Guide” (and any and all other instruction manuals or other documents provided to
Subscribers) to be modified and branded at Company’s sole
discretion. The Parties agree that during the Term and the Wind Down
Period, Company may post an electronic version of the Subscriber “User Guide” on
any one or more of the Company Websites.
H. Maintenance
and Monitoring. During the Term and the Wind Down Period,
NeuLion will, at no additional cost to Company and promptly upon release of the
same (and with concurrent notice to Company), install on the Company Servers or
otherwise apply, as applicable, each bug fix, patch, minor enhancement,
replacement or update of the software installed on the STBs, NeuLion Transcoder
Licensed Programs, the Order Entry System and the Billing Systems (solely for
purposes of this Section H, collectively, the “Systems”) or any
portion of any of the foregoing. In the event that Company in its
reasonable discretion believes that installing any such updates, if applicable,
will adversely affect the Service, the
Company Servers or other systems and Company can provide reasonable evidence of such adverse
affect to NeuLion, at Company’s request
NeuLion shall identify alternative solutions and provide Company assisted access
to Company’s engineering group to further explore solutions for remediation
until such time as both Parties are able to find a solution for
remediation.
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I. Billing and
Reporting.
1. Billing.
NeuLion shall perform ongoing monthly billing of Subscriber accounts,
including without limitation by performing pre-approved, recurring Subscriber
credit/debit card charge processing, monthly Subscriber billing statement
creation, and billing statement posting for Subscriber access via the Subscriber
Self-Service Facility. NeuLion shall be responsible, in consultation
with and approval by Company, for the design and layout of all Subscriber
billing statements, including without limitation, the inclusion of Company’s
designated name and logo on each billing statement and ▇▇▇▇ messaging of
commercially reasonable length and size. Neither the NeuLion name nor
any name other than those names approved in writing by Company shall appear on
any Subscriber billing statement. A sample Subscriber statement
format is attached hereto and incorporated herein as Schedule 1.
2. Monthly
Reporting. In addition to (and without limitation of)
NeuLion’s other reporting obligations under this Agreement, NeuLion shall
provide Company with a monthly written accounting of all monies collected in
connection with the Service, as well as a detailed breakdown of any all amounts
deducted therefrom prior to Company’s receipt of payment from NeuLion, as set
forth in Exhibit C. In addition to (and without limitation of) the
foregoing, on a monthly basis during the Term and the Wind Down Period, NeuLion
shall provide Company with such accurate and verifiable reporting as reasonably
requested and in the form reasonably requested by Company (including without
limitation in one or more “.CSV” files) (collectively, the “Monthly
Reporting”). Unless otherwise specified by Company, Monthly
Reporting shall be for the period beginning on the 22nd of
each calendar month and ending on the 21st of
the following calendar month (each, a “Reporting
Period”). NeuLion shall provide the Monthly Reporting to
Company on or before the first day of the calendar month immediately following
the applicable Reporting Period. The Monthly Reporting shall include,
without limitation, the following data and information for the applicable
Reporting Period:
(a) the
number of STBs in inventory including listing by MAC address;
(b) the
number of STBs deployed and activated during the prior thirty (30) day period by
MAC address;
(c) all
STBs exchanged under warranty listed by account name and number and MAC
address;
(d) the
total number of active Subscribers by programming package;
(e) the
full names and addresses of all Subscribers that activated and deactivated
Service and the dates on which each of such Subscribers activated or deactivated
Service (for clarity, unless otherwise set forth in applicable Business Rules,
Subscriber account activation shall occur on the earlier of the date the
Subscriber activates his/her STB or seven (7) calendar days after shipping of
the STB);
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(f)
revenue per Subscriber based on service dates and based on date the
service was billed;
(g) amounts
billed for Service broken down by line item charges and line item amounts
collected for each service/product (which for clarity also includes a separate
line item amount billed for tax per Subscriber);
(h) beginning
balance of amounts due, amounts billed, adjustments to prior ▇▇▇▇▇▇▇▇, amounts
collected and ending balance of amounts due.
(i)
In addition to (and without limitation of) NeuLion’s other reporting
requirements hereunder, on or before the 1st of
each month, NeuLion shall provide Company with a detailed transaction-level
report on a per Subscriber basis that breaks down amounts collected by NeuLion
in connection with the Service for the prior Reporting Period for: (a)
programming (including all amounts collected for programming packages and a la
carte purchases if and as applicable and as described in applicable Business
Rules); (b) equipment (including without limitation STBs and replacement fees as
described in Exhibit C, paragraph (C)(8)); (c) Shipping and Delivery Fees; (d)
Handling and Activation Fees, (e) Taxes, and (e) and any other fees or charges
imposed on a Subscriber.
3. Taxes. NeuLion
shall configure its tax engine software from time to time during the Term and
the Wind Down Period as reasonably requested by Company and within a
commercially reasonable period of time following such
request(s). NeuLion shall collect all sales taxes with regard to all
Subscriber transactions in connection with the Service for all fifty (50) states
and remit all such sales taxes to Company by no later than the 1st of
each month. NeuLion shall be solely responsible for updating basic
sales tax rates in the Billing Systems in accordance with applicable Laws;
provided, however, that at any time and from time to time during the Term or the
Wind Down Period, Company may in its sole discretion submit tax rate override
requests to NeuLion. With respect to Subscribers, NeuLion shall use
reasonable commercial efforts to implement any such tax rate override requests
in the Billing Systems within three (3) business days of NeuLion’s receipt
thereof from Company.
J. Warranty
Exchange and Service. In addition to
(and without limitation of) NeuLion’s other reporting obligations hereunder, for
each STB exchanged under warranty by a Subscriber, NeuLion shall provide to
Company on a monthly basis (which will become weekly upon reaching *******
Subscribers), the applicable: (1) Subscriber name, address and account number;
and (2) MAC address of returned STB and STB shipped as
replacement. In addition to (and without limitation of the foregoing)
all MAC address histories shall be entered by NeuLion into the applicable
Subscriber’s account notes within the Billing Systems.
K. Service
Launch Date. Provided that: (1) all fees described in Section
A of Exhibit C are paid; (2) Company has paid ******* of the amount owed to
NeuLion in connection with its initial purchase of ******* STBs; and (3)
Company has fully performed the obligations listed below within the timeframes
set forth below, NeuLion guarantees that the Service (inclusive of, among other
things, the Initial Channels and the Company EPG) will launch no later than
forty-five (45) days after the Effective Date, provided that the number of
initial orders from new Subscribers does not exceed *******, but in no event
later than: (a) sixty (60) days after the Effective Date if Company’s initial
STB order is shipped to NeuLion via air, or (b) ninety (90) days after the
Effective Date if Company’s initial STB purchase are shipped to
NeuLion via sea (“Launch
Date”).
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Company
obligations (the “Company Launch
Tasks”) to be completed within thirty (30) days following the Effective
Date are:
· Participation
in and provide final approval of STB screen designs and flow;
· Definition
of programming packages comprised of the Initial Channels;
· Provisioning
of facilities, hardware and network connectivity for signal capture,
implementation of NeuLion Transcoder Licensed Programs and backhaul of
transcoded linear channels to one or more NeuLion content delivery data
centers.
· Development
and integration of a graphical user interface (GUI) for the integration of
Company Web Site to the Order Entry System.
NeuLion
shall use its best efforts to support Company’s completion of the Company Launch
Tasks in a timely fashion. Notwithstanding anything set forth herein
to the contrary, if Company does not complete the Company Launch Tasks within
thirty (30) days following the Effective Date, such non-completion shall under
no circumstances be considered a breach or default of this Agreement by Company
and the Launch Date shall be extended to a date not later than fourteen (14)
calendar days following completion of the Company Launch Tasks. As
requested by Company, NeuLion shall implement all Business Rules with respect to
the Initial Channels and the Service prior to the Launch Date.
L. Addition
of New Languages/Channels.
1. The
Parties acknowledge that the initial launch of the Service will consist of
******* language groups consisting of up to a total of ******* linear
broadcast channels (the “Initial
Channels”). The ******* language groups shall consist of any
combination of linear broadcast channels and such linear broadcast channels may
be packaged in any manner (including without limitation in multiple package
combinations) and at such prices as Company determines in its sole discretion
for any reason or no reason and as set forth in applicable Business
Rules. NeuLion will ▇▇▇▇ Subscribers and collect for such channels
and packages as directed by Company.
2. If
Company elects at any time and from time to time during the Term in its sole
discretion for any reason or reason to add additional language groups and/or
linear broadcast channels in addition to the Initial Channels, it may do so at
the rates set forth in Exhibit C with regard to the license fees applicable to
the Transcoder Licensed Programs, but at no other cost to
Company. For clarity, the Initial Channels and such additional
channels, if any, shall be subject to the terms and conditions otherwise
applicable to Content (including without limitation the applicability of
Business Rules, retail pricing and any other terms and conditions applicable to
the Service as set by Company in accordance with this Agreement). Any
additional Company Servers to support linear broadcast channels in addition to
the Initial Channels shall be provided by Company. For clarity,
except as otherwise provided herein, channels offered by other NeuLion customers
may be added to the Service by Company at the costs set forth in the last
sentence of Exhibit C, Section A(2).
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3. NeuLion
agrees to add additional language groups and/or broadcast linear channels in
addition to the Initial Channels in accordance with the Business Rules
applicable to such additional language groups and/or linear broadcast channels
within thirty (30) days following Company’s delivery to NeuLion of the
applicable additional Content; provided that Company has obtained the necessary
hardware with regard to such additional Content.
M. STB
Warehousing and Inventory Monitoring. At no additional
cost to Company, during the Term and for
a period of up to forty-five (45) days thereafter as directed by Company, NeuLion shall warehouse
and store Company’s inventory of STBs and STB Components (the “Company Inventory”)
at NeuLion’s secure warehouse facilities suitable for such purpose in Plainview,
New York (or at such other location(s) as may be mutually agreed upon by the
Parties in writing from time to time during the Term or the Wind Down
Period). NeuLion shall use commercially reasonable efforts to, within
forty-eight (48) hours following a request from Company: (1) at Company’s
expense and shipping arrangement, ship the Company Inventory, or portion(s)
thereof (if and as directed by Company), to Company or its designee(s) at such
location(s) and using such carrier(s) as directed by Company in its sole
discretion for any reason or no reason, provided that if the forty-eight hour
notice period requires shipping on a weekend, NeuLion shall ship the Company
Inventory to Company on the next business day; and/or (2) make the Company
Inventory, or portion thereof, available for pickup by Company or its
representatives during normal business hours. NeuLion assumes all
risk of loss with respect to the Company Inventory at all times while in
NeuLion’s possession or control following delivery from manufacturer and shall
indemnify Company in connection with any actual loss. For clarity,
NeuLion’s insurance obligations set forth in Section 24 of the main body of this
Agreement shall be applicable to all STBs and STB Components warehoused by
NeuLion pursuant to this Section M. In addition to (and without
limitation of) NeuLion’s other reporting obligations hereunder, NeuLion shall
provide Company with detailed written weekly reports setting forth the number of
STBs and the number of each of the STB components remaining in the Company
Inventory
N. Out of
Warranty Service.
Upon request from Company, NeuLion shall provide out of warranty testing
and refurbishment of Subscriber returned STBs at a current fee of ******* per
STB (subject to increase of ******* per calendar year during the Term),
exclusive of the cost of replacement components. Certification
testing and refurbishment shall include the following work performed by
NeuLion:
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For
STB units that pass certification testing
-
|
|
|
o
|
Inspect
box exterior – either clean or replace top
cover
|
|
|
o
|
Inspect
remote controller – either clean or
replace
|
|
|
o
|
Repack
STB with new accessories
|
|
|
o
|
Place
STB MAC in available, refurbished STB
inventory
|
|
|
·
|
For
units that fail certification testing
-
|
|
|
o
|
Place
STB MAC in unavailable status
|
O. Return
Authorization Process. The Return
Authorization process utilized by NeuLion shall include the
following:
Proprietary
& Confidential
39
|
|
·
|
Subscriber
support personnel opens a ticket to NeuLion support for return of an STB
covered under warranty describing the nature of the STB
defect;
|
|
|
·
|
NeuLion
assigns and activates a replacement STB MAC address to Subscriber’s
account;
|
|
|
·
|
NeuLion
creates a RMA record for Subscriber consisting of an RMA number and reason
for return;
|
|
|
·
|
NeuLion
creates a return shipping label for Subscriber to use to return the
defective STB;
|
|
|
·
|
NeuLion
ships the replacement Company branded STB and the return shipping label to
Subscriber on an “advanced exchange” basis (NeuLion to use reasonable
commercial efforts to have such shipment to take place within one (1)
business day following return authorization by Company using NeuLion’s
web-based support request tracking system described in Exhibit F hereto)
with instructions to return the defective STB in the same shipping
container as the replacement STB;
and
|
|
|
·
|
Upon
receipt of the defective STB, NeuLion updates the RMA record and
deactivates the returned STB MAC address from the Subscriber’s
account.
|
NeuLion
shall perform all STB certification testing. For units that fail
certification, NeuLion shall place the STB MAC in unavailable status and
replaces the STB with a new or repaired STB (in either case that is Company
branded) and corresponding MAC address. For units that pass
certification, NeuLion performs out of warranty refurbishment and places STB MAC
in available, refurbished STB inventory. NeuLion shall stock a
sufficient number of Company branded STBs (at NeuLion’s cost) to satisfy all of
NeuLion’s warranty and replacement obligations set forth herein.
Proprietary
& Confidential
40
SCHEDULE
1
to
EXHIBIT
A
Sample
Subscriber Billing Statement
Proprietary
& Confidential
41
EXHIBIT
B
STB
SPECIFICATIONS
|
A.
|
STB Specifications
(current model number is
STB2300):
|
|
|
Video
Format
|
MPEG-4
(H.264) BP@L3, MP@L4.0
|
|
|
Audio
Format
|
MPEG-4
AAC 2.0
|
|
|
Operating
System
|
Linux,
supports remote firmware upgrade
|
|
|
Unicast
streaming: RTSP/RTP over IP/TCP
|
|
|
Macrovision
copy protection
|
|
|
HDCP
digital copy protection
|
|
|
Interfaces
|
RJ45
Ethernet 10/100 Base T, Auto Sensing, Full
Duplex
|
|
|
S-Video
Out
|
Composite
Video Out
|
|
RCA
Stereo Audio Out (2 - Left/Right)
|
|
|
HDMI
A/V Out
|
|
|
Input
Device
|
I/R
Remote Control
|
|
|
Power
|
DC
12V/AC 100-240V Power Adapter
|
|
|
Certification
|
UL
FCC
|
|
B.
|
STB
Components:
|
|
|
Chassis
Assembly
|
|
|
Top
Cover Assembly
|
|
|
Remote
Controller
|
|
|
1.5V/AAA
Batteries – 2
|
|
|
CAT-5E
LAN Cable – 3000mm
|
|
|
Composite
Video and Audio Cable – 1800mm
|
|
|
DC
12V/AC 100-240V Power Adapter
|
|
|
Power
Cord – 1800mm
|
|
C.
|
Conditional Access and
Geoblocking/Geofiltering
Measures:
|
|
|
STB
Access Control
|
Each
STB is uniquely identified by its MAC address and is associated to a
specific account upon provisioning. When an STB accesses the
NeuLion media servers, the authentication process identifies and validates
the account based on the STB MAC. Every request from the STB to
the NeuLion media servers is secured by a 128-bit temporal cryptographic
hash function.
|
|
|
Stream
Security
|
Encryption,
authentication and stream integrity is ensured through the use of SRTP
(Secure Real-Time Transport Protocol) utilizing the AES (Advanced
Encryption Standard) 128 bit stream
cipher.
|
|
|
Copy
Protection
|
Copy
protection for analog signal output is provided by Macrovision signal
implantation. Digital content protection for HDMI is provided
by HDCP encryption.
|
Proprietary
& Confidential
42
|
|
Geo
Access Control
|
Upon
access and authentication, each STB’s IP address is converted into a
country and city location based on a third party (currently MaxMind, Inc.)
geographic/IP address translation database that is updated
monthly. This location identification can be applied to
business rules for location-based content/subscription access
control.
|
Proprietary
& Confidential
43
EXHIBIT
C
NEULION
SERVICE FEES
A. Setup Fee
and Transcoder License Fee.
1. Setup
Fee. Upon execution of this Agreement,
Company shall pay NeuLion ******* as a setup fee for the initial styling
and content of the EPG; the setup of the look and feel of the user interface
including without limitation, coloring, fonts and style, logo silkscreen for
STBs; all setup of the Billing Systems and the Order Entry System customized for
Company application; and the Initial Training described in Exhibit
A.
2. Transcoder License
Fees. Subject to the terms and conditions of this
Agreement (and except as otherwise provided in this Section 2 with respect to
the use of previously licensed Transcoder Licensed Programs during the Renewal
Term), with respect to the Initial Channels and to each linear broadcast channel
that is added to the Service during the Term at the request of Company, Company
shall pay NeuLion a one-time software license fee for the Transcoder Licensed
Programs as follows (each a “Transcoder License
Fee”):
(a) *******
per linear broadcast channel if ******* licenses are ordered at a
time;
(b) *******
per linear broadcast channel if ******* are ordered at a time;
(c) *******
per linear broadcast channel if ******* linear channels are ordered at a
time.
Transcoder
License Fees payable hereunder by Company to NeuLion are inclusive of
installation of the Transcoder Licensed Programs, usage, maintenance and support
thereof (including without limitation all bug fixes and patches), and all
updates and upgrades made to the Transcoder Licensed Programs during the
Term. Transcoder License Fees payable to NeuLion by Company for the
Initial Channels and any linear broadcast channels in addition to the Initial
Channels shall be payable as follows: (i) Initial Channels - upon execution of
this Agreement, and (ii) for all other channels - on a net sixty (60) day basis
following successful installation of the Transcoder Licensed Program(s) for such
channels. Except in the case that Company has achieved the Renewal
Minimum (as defined and otherwise described in Section 1 of the main body of
this Agreement) whereby no additional fees for Company’s continued use of the
Transcoder Licensed Programs during the Renewal Term shall be payable by Company
to NeuLion, Company’s continued use of the NeuLion Transcoder Licensed Programs
during the Renewal Term shall require the one-time payment to NeuLion of an
amount equal to ******* of the applicable Transcoder License Fee (as set
forth in clauses (a)-(c) of this Section 2, which solely for purposes of
calculating the Maintenance Fee (defined below) shall be subject to a maximum
increase by NeuLion of ******* per calendar year during the Term)
multiplied by the number of linear channels offered by Company via the Service
as of the first day of the Renewal Term (the “Maintenance Fee”).
By way of example (and without limitation), if on the first day of the
Renewal Term Company offers fifty (50) linear broadcast
Proprietary
& Confidential
44
channels via the Service, the Maintenance Fee would
be ******* (calculated as follows: 50 * *******; provided that, for
clarity, factoring in the potential annual ******* increase of the
Transcoder License Fee, the amount of the Maintenance Fee could reach a maximum
amount equal to ******* (calculated as follows: 50 * *******. The
Maintenance Fee, if any, shall be payable to NeuLion by Company within sixty
(60) days of Company’s receipt of an invoice therefor from NeuLion following the
commencement of the Renewal Term. Company’s license to use the Transcoder
Licensed Programs shall terminate at the end of the Wind Down
Period. Transcoder License Fees set forth in this Section
2 (excluding the Maintenance Fee, if any) must be paid to NeuLion by Company
prior to delivery of Company’s license by NeuLion to Company to use the
Transcoder Licensed Programs with respect to the applicable linear broadcast
channels. Notwithstanding the foregoing, in the event Company obtains
a linear broadcast channel feed from another NeuLion customer for distribution
to Subscribers, while other time and material charges for technical set-up such
as cross connection may apply (which for clarity shall be *******), Company
shall not be charged a Transcoder License Fee for such channel.
B. Monthly
Fees.
1. During
the Term, Company shall pay to NeuLion an “Operations Fee” which
shall be calculated each Reporting Period (as defined in Section I.2 of Exhibit
A) in accordance with the following table:
|
Number
of Subscribers
During
Reporting Period
|
Fee
to Neulion Per Active
Subscriber (non-cumulative) |
|
*******
Subscribers *******
|
*******
|
|
*******
Subscribers
|
*******
|
|
*******
Subscribers
|
*******
|
|
*******
Subscribers
|
*******
|
For
example, in a Reporting Period where there were 32,000 Subscribers (determined
by adding the number of Subscribers on the 22nd of a
month and the number of Subscribers on the 21st of
the following month and dividing that result by two (2)), the Monthly Operations
Fee would be ******* (calculated as follows: *******.
The
Parties agree that for purposes of calculating the Operations Fee above,
Subscribers subscribing to ******* channels via the Service will count
as ******* Subscriber for each subsequent grouping of *******
channels, or portion thereof, such Subscriber receives in excess of such
Subscriber’s ******* channels. For illustrative purposes only
(and without limitation), if a Subscriber subscribes to ******* channels
via the Service, such Subscriber would count as ******* Subscribers for
purposes of calculating the applicable Operations
Fee. Notwithstanding the foregoing, once Company reaches *******
Subscribers in the aggregate across all languages, Subscribers receiving *******
channels will count as ******* Subscriber ******* for purposes of calculating
the Operations Fee.
Proprietary
& Confidential
45
2. In
addition to the Operations Fee, during the Term, Company shall pay to NeuLion a
monthly credit/debit card processing fee in an amount equal to ******* of
the total amounts collected from Subscribers for the Service during the
applicable month (“Credit Card Processing
Fee”).
3. The
Monthly Operations Fee excludes in each case, (a) NeuLion’s actual cost of
shipping for delivery of STBs to Subscriber premises, ******* (“Shipping and Delivery
Fees”) (in the case NeuLion does not use Company’s Fed Ex, UPS or other
shipping carrier account, as further described in this Section 3); (b) handling
and activation charges (currently *******, with no greater an increase
than ******* per calendar year during the Term) (“Handling and Activation
Fees”); (c) amounts collected for sales or use taxes or duties (“Taxes”); and (d)
refunds, credits and chargebacks for returned or canceled goods or services
(“Refunds”). Company shall have the option at any time and from time
during the Term and the Wind Down Period in its sole discretion for any reason
or no reason to request that NeuLion use Company’s and/or any of its Affiliates
shipping account (including without limitation Company’s or any of its
Affiliate’s FedEx accounts) in lieu of NeuLion’s or any of its
Affiliate’s shipping accounts for shipment of STBs to Subscribers pursuant to
this Agreement, whereby Company will be charged directly by the applicable
carrier for such shipping and in such event no Shipping and Delivery Fees shall
be assessed against Company. Upon receipt of any such shipping
account information from Company, and unless otherwise directed by Company at
any time and from time to time in Company’s sole Discretion, NeuLion shall use
solely Company’s shipping account to perform shipping of STBs
to pursuant to this Agreement.
4. If
there are ******* Subscribers as of ******* (the “First Twelve Month
Measurement Date”), the Operations Fee payable to NeuLion by Company for
each of the twelve (12) consecutive Reporting Periods following the First Twelve
Month Measurement Date (the first of such Reporting Periods being the Reporting
Period beginning on the First Twelve Month Measurement Date) (collectively, the
“Year Two
Period”) shall be calculated as if there are ******* Subscribers
unless during such Reporting Periods the number of Subscribers exceeds *******
(in which case the Operation Fee for the applicable Reporting Period(s) shall be
calculated using the actual number of Subscribers during such Reporting Period)
or this Agreement is earlier terminated. Subject to Company’s
right to terminate this Agreement as set forth in Section 12(d), if there are
******* Subscribers as of ******* (the “Second Twelve Month
Measurement Date”), the Operations Fee payable to NeuLion for each
Reporting Period following the Second Twelve Month Measurement Date (the first
of such Reporting Periods being the Reporting Period beginning on the Second
Twelve Month Measurement Date) shall be calculated as if there are *******
Subscribers unless during any such Reporting Period the number of Subscribers
exceeds ******* (in which case the Operation Fee for the applicable
Reporting Period(s) shall be calculated using the actual number of Subscribers
during such Reporting Period). Nothing set forth in this Section B.4
shall affect Company’s rights or ability to effect a Migration pursuant to
Section 13 of the main body of this Agreement. For clarity, Company
shall not be deemed to be in breach or default of this Agreement if any of the
Subscriber ******* set forth in this Section 4 are not met for any reason or no
reason whatsoever. Notwithstanding anything set forth to the contrary
in this Agreement, Company may (but shall not be obligated to) effect a
Migration during the Year Two Period if: (i) there are ******* Subscribers as of
the First Twelve Month Measurement Date; and (ii) Company, within thirty (30)
days following the last day of the Wind Down Period, pays to NeuLion an amount
equal to the Operations Fee calculated as if there were ******* Subscribers
multiplied by the number of Reporting Periods, or portion thereof, remaining in
the Year Two Period as of the date on which the last Subscriber becomes a
Migrated Subscriber. For clarity, Company shall be obligated to
continue paying NeuLion the applicable Operations Fee for each Reporting Period
during the Migration for which there are Subscribers.
Proprietary
& Confidential
46
5. During
the Term and the Wind Down Period, NeuLion shall deduct the Operation Fee, the
Credit Card Processing Fee, Shipping and Delivery Fees (if applicable) and
Handling and Activation Fees as set forth in this Section B once per Reporting
Period from all revenue collected from Subscribers during that Reporting Period;
disbursement of the remaining amount of the Service’s monthly collected revenue,
including without limitation the amounts described in Section 3(c)-(d) above,
shall be made by NeuLion to Company via check or EFT as requested by Company
(pursuant to the EFT instructions provided to NeuLion at any time and from time
to time by Company) within no more than thirty (30) days after the last day of
the Reporting Period in which such amounts were collected. To the
extent that Subscriber revenue collected with respect to a particular Reporting
Period during the Term is less than the sum of the Operations Fee and the Credit
Card Processing Fee for that month, such shortfall shall be billed to the
Company and shall be payable within sixty (60) days after Company’s receipt of
an invoice therefor. Except as expressly set forth in this ▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇ shall not set-off against, or otherwise deduct any amounts (including
without limitation any all fees set forth in this Section B that are disputed in
good faith by Company) from, the revenue collected from
Subscribers.
C. Set Top
Box Acquisition Fee.
1. All
orders shall be placed by written purchase order subject to and in accordance
with the terms and conditions of this Agreement and in increments of *******
STBs.
2. The
price per STB is as follows:
|
Quantity
of STBs Ordered
|
Price
per STB
|
|
*******
|
*******
|
|
*******
|
*******
|
|
*******
|
*******
|
NeuLion
agrees to use commercially reasonable efforts ******* for Company orders of
******* STBs. In the event NeuLion makes available wireless
functionality for its STBs or STBs that are capable of functioning wirelessly,
the pricing to Company for such wireless functionality or wireless STBs shall be
*******.
Proprietary
& Confidential
47
3. All
prices exclude shipping, taxes, duties and import fees for delivery from the STB
manufacturer to NeuLion’s “Distribution Center”
in Plainview, New York, the actual cost of which are payable to NeuLion by
Company with the final payment for the applicable shipment. Unless
otherwise mutually agreed by the Parties in writing, NeuLion will invoice
Company for all such shipping, taxes, duties and import fees in an amount equal
to NeuLion’s actual shipping costs (which rates shall be the same or better than
those NeuLion charges to any other NeuLion customer, including NeuLion
Affiliates). NeuLion agrees to use commercially reasonable efforts to
achieve the lowest possible shipping rates. With respect to STB
purchase orders submitted to NeuLion by Company, ******* of the purchase order
price will be payable at the time the purchase order is submitted; the remaining
balance of each such purchase order and associated shipping will be paid within
sixty (60) days following Company’s receipt of an invoice from NeuLion (which
invoice shall be issued by NeuLion no less than thirty (30) days prior to the
scheduled delivery date of the complete applicable STB order to NeuLion in
Plainview, New York, or such other delivery location designated by Company in
the applicable purchase order); provided, however, in no event will Company be
required to pay any such amounts prior to the date that is thirty (30) days
following the actual date of delivery of the applicable STB
order. Duties will be payable sixty (60) days following Company’s
receipt of an invoice therefore by NeuLion (which invoice shall be issued after
payment of such duties by NeuLion).
4. All
STBs will be shipped FOB point of delivery (as specified in the applicable
purchase order).
5. STBs
shall be shipped to each Subscriber by NeuLion out of Company Inventory no later
the third business day after the corresponding order is received by NeuLion via
the Order Entry System. For clarity (and without limitation of any of
the foregoing), such third business day shipping timeframe may be extended in
accordance with Section 25 of this Agreement as a result of the occurrence of a
Force Majeure Event. The design of the STB packaging shall be
determined by NeuLion and approved by Company; provided that neither NeuLion’s
nor any other third-party’s name or brand is included, except as otherwise
provided for herein. Notwithstanding the foregoing, Company may
request that certain artwork be included on such packaging, provided that: (i)
NeuLion has approved all such additional artwork, with such approval not to be
unreasonably withheld or delayed; and (ii) such additional artwork will not
require NeuLion to incur any additional costs (including labor) in excess of the
cost of the initial design of the STB packaging approved by Company, or delays
in producing such packaging. For clarity, any additional charges
incurred by NeuLion to include such additional artwork on STB packaging at
Company’s request shall be borne by Company *******.
6. At
no additional cost to Company, for Company’s initial order of ******* STBs and
for each subsequent order of ******* STBs, NeuLion shall silk screen the
brand name and/or logo as directed by Company on the front of all STBs and STB
remote controls ordered by Company.
7. Company
agrees to commit to purchase an aggregate of ******* STBs during the first
twelve (12) full calendar months of the Term. For clarity, Company
shall be deemed to have purchased STBs for purposes of this Section C.7 if it
has submitted a purchase order to Company for the same.
Proprietary
& Confidential
48
8. The
current replacement fees, exclusive of shipping to Subscribers, for STB
Components are as follows:
|
|
·
|
Chassis
Assembly - *******
|
|
|
·
|
Top
Cover Assembly - *******
|
|
|
·
|
Remote
Controller - *******
|
|
|
·
|
Two
1.5V/AAA Batteries - *******
|
|
|
·
|
3000mm
CAT-5E LAN Cable - *******
|
|
|
·
|
1800mm
Composite Video and Audio Cable -
*******
|
|
|
·
|
DC
12V/AC 100-240V Power Adapter -
*******
|
|
|
·
|
Power
Cord - *******
|
|
|
·
|
Shipping
box and packing materials - *******
|
Such
replacement fees shall not be increased by NeuLion by a percentage equal to more
than the percentage increase in the purchase price NeuLion incurs (if any) from
the manufacturers of such replacement items during the Term. NeuLion
agrees that Subscribers or Company may order such components through phone
orders and NeuLion will charge the applicable Subscriber in accordance with the
above fee schedule.
9. NeuLion
shall ensure that all STB manufacturers place a sticker of reasonable size on
the bottom of each STB containing a legible serial number in the form, and
following the alphanumeric sequence, as prescribed by Company (the “Company Serial
Number”). Company’s written direction regarding the form and
alphanumeric sequence of the Company Serial Numbers to be applied to Company’s
initial order of STBs shall accompany or precede Company’s submission of its
initial purchase order to NeuLion. With respect to any subsequent
order of STBs by Company, the form and alphanumeric sequence of the Company
Serial Numbers may be changed by Company in its sole discretion for any reason
or no reason upon written direction to NeuLion at the time Company submits a
purchase order to NeuLion for the corresponding order of STBs. Prior
to the date of delivery of any shipment of STBs, NeuLion shall provide Company
with a written list of Company Serial Numbers for each STB contained in such
shipment.
D. General
Provisions.
1. All
credit/debit card charges processed by NeuLion in connection with the Service
shall appear on such Subscribers’ credit/debit card statement as a charge by the
Company or its designated Affiliate, as prescribed at any time and from time to
time by Company in its sole discretion for any reason or no reason.
Proprietary
& Confidential
49
EXHIBIT
D
NEULION
TRANSCODER SERVER SPECIFICATIONS
· Two
dual core Intel 2.0 GHz or higher processors
·
Two GB or more memory
·
Sixty GB or larger hard drive
· One
or more PCI-X and/or PCI-e slots (depending on video capture card
used)
· Gigabit
Ethernet network adapter
· Windows
Server 2003 or Windows XP Pro SP3 operating system
·
One or more Microsoft DirectShow compatible video capture card; examples
are:
o
Osprey-300/Osprey-440 Analog cards (requires PCI-X slot)
o
Osprey 530 SDI card (requires PCI-X slot)
Proprietary
& Confidential
50
EXHIBIT E
NEULION’S
SET TOP BOX LIMITED WARRANTY
1. NeuLion warrants to Subscriber that the STBs will be
free from defects in design, workmanship and materials and will allow
Subscribers to receive the Content via the Service if installed in accordance
with the instructions packaged with the STB and connected to an Internet
connection meeting the specifications set forth in such instructions, under
normal use and service, for one year following the date of sale by Company to
the Subscriber. NeuLion’s obligation under this warranty shall be, at
NeuLion’s sole option and expense, to: (i) repair the defective STB or part; or
(ii) deliver to the affected Subscriber an equivalent Company branded STB or
part. In both instances, NeuLion will pay for the shipment of the original
and replacement STB or part to and from the Subscriber. All STBs and STB
parts that are replaced under this warranty must be returned to NeuLion and will
become the property of NeuLion. Failure to return such defective
STB or part will result in the Subscriber’s account being charged the cost of a
new STB or STB part. Replacement STBs or parts may be new or
reconditioned. NeuLion warrants any replaced or repaired STB or part for
the greater of ninety (90) days following the date of replacement or one
year following the date of original shipment of
the STB to the Subscriber.
2. STBs
returned to NeuLion by a Subscriber must be authorized by Company as set forth
in applicable Business Rules. Return shipping from the affected
Subscriber to NeuLion will be paid by NeuLion if such STB is found to be
defective (using testing methods consistent with prevailing industry standards)
through no fault of the Subscriber; in all other cases, NeuLion will charge
Company for such return shipping. The repaired or replaced STB will
be shipped to the Subscriber upon return authorization by Company as set forth
in applicable Business Rules, at NeuLion’s expense, and NeuLion will retain risk
of loss or damage until the item is delivered to the
Subscriber. NeuLion will use reasonable commercial efforts to advance
ship replacement STBs within one (1) business day following return authorization
by Company.
3. NeuLion
will not be liable under this limited warranty if its testing and examination
disclose that the alleged defect or malfunction in the STB does not exist or
results from: (i) failure to follow NeuLion’s installation, operation, or
maintenance instructions; (ii) unauthorized product modification or alteration;
(iii) abuse, misuse, negligent acts or omissions of the Subscriber or persons
under the Subscriber’s control; or (iv) acts of third parties, acts of God,
accident, fire, lightning, power surges or outages, or other
hazards.
4. IF
A NEULION STB DOES NOT OPERATE AS WARRANTED ABOVE, SUBSCRIBER’S SOLE REMEDY FOR
BREACH OF THAT WARRANTY SHALL BE REPAIR OR REPLACEMENT AT NEULION’S OPTION, OR
UPON CONSENT OF COMPANY, REFUND OF THE PURCHASE PRICE PAID. TO THE
FULL EXTENT ALLOWED BY LAW, THE FOREGOING WARRANTIES AND REMEDIES ARE EXCLUSIVE
AND ARE IN LIEU OF ALL OTHER WARRANTIES, TERMS, OR CONDITIONS, EXPRESS OR
IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, STATUTORY OR OTHERWISE,
INCLUDING WITHOUT LIMITATION WARRANTIES, TERMS, OR CONDITIONS OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, SATISFACTORY QUALITY,
CORRESPONDENCE WITH DESCRIPTION, AND NON-INFRINGEMENT, ALL OF WHICH ARE
EXPRESSLY DISCLAIMED. NEULION NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO
ASSUME FOR IT ANY OTHER LIABILITY IN CONNECTION WITH THE SALE, INSTALLATION,
MAINTENANCE OR USE OF ITS PRODUCTS TO SUBSCRIBERS.
51
5. EXCEPT
AS SET FORTH HEREIN AND IN THE AGREEMENT, NO OTHER WARRANTIES, WHETHER EXPRESS
OR IMPLIED, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILTY AND FITNESS FOR A PARTICULAR PURPOSE, ARE MADE TO SUBSCRIBERS BY
NEULION.
52
EXHIBIT
F
NeuLion
IPTV Service Support
NeuLion’s
IPTV Service support provides for logging, categorization, analysis and creation
of resolutions to all support requests made by Company. Request
resolutions can consist, among other options, of answers to questions, creating
of procedures to resolve and/or circumvent a problem, and changes to the Service
to correct a problem.
NeuLion’s
web-based support request tracking system allows Company to log requests,
provide updates and review the status of the request logs, 24 hours per day, 7
days per week, and 365 days per year. For opened requests, there are
two types of technical support performed by NeuLion.
“Primary
Support Services” address all requests opened on the support tracking system.
Primary Support Services personnel will work on requests *******. “Emergency
Support Services” are provided after Primary Support Services hours for high
severity requests only. When a high severity request is opened
outside of Primary Support Services hours, a NeuLion support technician will be
automatically notified of the new request so that it can be addressed as quickly
as possible. Within ******* of entering a high severity request a
NeuLion support technician will update the request.
Additionally,
NeuLion has an Emergency Support Escalation telephone number, which is available
24 hours a day, 7 days a week, that can be used for *******.
NeuLion
provides web support services within the following timeframes.
|
Request
Severity Description
|
Fix
Plan Response
|
|
High Severity
Requests - A “Service down” or Service operations halted condition
and a manual work around is not practical.
|
*******
|
|
Medium-High Severity
Requests - A suspected “high impact condition” associated with the
Service causing significant problems.
|
*******
|
|
Medium-Low Severity
Requests - An “intermittent or low-impact condition” associated
with the Service.
|
*******
|
|
Low Severity
Requests - Questions concerning performance or use of the
Service.
|
*******
|
NeuLion
must use its best efforts to correct high severity requests, medium-high
severity requests and medium-low severity requests by continually working with
Company to provide a fix or work around that, respectively, eliminates a
“Service down” condition, a “high impact condition” and/or an “intermittent or
low-impact condition.”
53
EXHIBIT
G
Performance
Standards
In its
performance of the Services hereunder, NeuLion shall meet or exceed the
following Performance Standards:
Availability. NeuLion shall
ensure that the Service is Available ******* of the time during each consecutive
thirty (30) day period during the Term (this provision shall be calculated on a
per channel basis once Subscribers are *******). “Available” and “Availability” (as the
context requires) shall mean that the Service is providing Content streaming in
accordance with this Agreement; provided that the following shall be excluded
from the calculation of Availability (“Permitted
Downtime”):
(i) Up
to two (2) hours per month of scheduled maintenance, to be performed during
off-peak times to be mutually agreed upon between the Parties and only upon
three (3) days’ prior notice to Company; and
(ii) Downtime
caused by events outside of NeuLion’s reasonable control, as measured by the
highest standards of the hosting and video streaming industries (which, for
clarity, require that NeuLion employ failover equipment, multiple streaming
providers and other redundancies to mitigate the effects of any given equipment
or provider outage).
Availability
shall be calculated as follows:
Available
time in minutes / (43,200 – Permitted Downtime in minutes)
Failure
to meet Content streaming Service Availability of ******* shall result in a
credit to Company on a pro-rata basis using the following formula:
(*******-
Availability) x per Subscriber Monthly Operations Fee x the number of
Subscribers affected during the period of time Content streaming was unavailable
excluding Permitted Downtime
For
illustration purposes:
Assuming there was a 2 hour unscheduled
outage during the month that affected 25,000 subscribers, the following would
apply -
|
|
·
|
Actual
Availability = (43,200 - 120) / 43200 =
99.7%
|
The SLA
Availability Credit = (*******-99.7%) x *******
54
Latency.
For Subscribers with 850 or
more kbps internet bandwidth, NeuLion shall ensure that the maximum latency for
a linear broadcast channel to begin play is *******, provided that latency
failures identified by NeuLion as being caused by a third-party, local Internet
Service Provider are excluded from this Performance Standard.
Packet
Loss. The average percent of IP packets dropped between
routers inside of NeuLion’s network shall not exceed ******* during a calendar
month.
Video
Quality. For Subscribers with 850 or more kbps internet bandwidth,
NeuLion shall ensure full D1/VGA video and AAC audio play-out at *******
provided, that the Video Quality failures identified by NeuLion as being caused
by a third-party, local Internet Service Provider are excluded from this
Performance Standard.
NeuLion
shall verify compliance (or non-compliance) on a monthly basis with the
Availability Standards set forth in this Exhibit G.
55
EXHIBIT
H
STB Initial Startup
Screen
56
 |
EXHIBIT
I
Draft Press
Release
|
 |
DISH
NETWORK®
PARTNERS WITH NEULION TO DISTRIBUTE LIVE
INTERNATIONAL TV CHANNELS THROUGH IPTV PLATFORM
INTERNATIONAL TV CHANNELS THROUGH IPTV PLATFORM
Plainview, NY and Englewood, CO.,
Jan. xx, 2010 – NeuLion, Inc. (TSX:NLN), an end-to-end IPTV service
provider of live and on-demand international, sports and variety programming
delivered via broadband, and DISH Network L.L.C., a subsidiary of DISH Network
Corporation (NASDAQ: DISH), today announced a multi-year partnership to
distribute certain DISH Network international channels using NeuLion’s IPTV
service.
DISH
Network currently provides more than 14 million satellite TV customers with the
highest quality programming and technology at the best value. The partnership
with NeuLion enhances DISH Network’s current satellite distribution in the U.S.
by providing consumers without access to DISH Network satellite TV the ability
to access certain DISH Network international channels through IPTV. DISH Network
offers more than 180 international channels in more than 28 languages – more
than any other pay-TV provider.
“DISH
Network is the leading multichannel video provider for international channels in
the U.S. Now DISH can provide nationwide distribution of
international content via both satellite and IPTV,” said ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, vice
president of International Programming for DISH Network. “Some of our
ethnic customers prefer their content via satellite; others, may prefer
broadband delivery. Either way, we can now provide the best quality digital
signals directly to a television set without the need for a
computer.”
As a
leader in the IPTV space, NeuLion provides an end-to-end, multi-platform
service, allowing the delivery of live and on-demand content to the TV, PC and
Mobile devices – offering a universal platform that connects viewers
globally. Components of the service include: encoding,
personalization, delivery, registration, monetization, support and reporting
tools.
“We see
distinct synergies between our respective television distribution services and
believe that DISH Network customers will benefit from the further reach provided
by a broadband offering,” said ▇▇▇▇▇ ▇▇▇▇▇▇, EVP of NeuLion. “We believe that
the match of our technology with DISH Network’s international programming rights
will greatly benefit ethnic communities in the United States.”
DISH
Network plans to launch its IPTV service in early 2010.
57
About DISH Network
L.L.C.
DISH
Network L.L.C., the nation's HD leader, provides more than 14 million satellite
TV customers as of Dec. 10, 2009, with the highest quality programming and
technology at the best value, including the lowest all-digital price nationwide.
Customers have access to hundreds of video and audio channels, the most HD
channels, the most international channels, state-of-the-art interactive TV
applications, and award-winning HD and DVR technology including 1080p Video on
Demand and the ViP® 722
HD DVR, a CNET and PC Magazine “Editors’ Choice.” Visit ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,
follow on Twitter, @dishnetwork (▇▇▇.▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇▇▇), or become a Fan
on Facebook, ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇▇▇.
About
NeuLion
Based in
Plainview, NY, Sanford, Florida and Toronto, Ontario, NeuLion (TSX:NLN) works
with content partners to develop end-to-end solutions for multimedia IPTV
services. The NeuLion IPTV Platform encodes, delivers, stores and manages an
unlimited range of multimedia content and the Operational Support System (OSS)
maintains all billing and customer support services. Content partners are
responsible for content aggregation and the sales and marketing for the
individual IPTV service. The Company ranks as a world leader in customer/partner
relationships with sports and international television content partners
including, in sports, the NHL, the NFL, NCAA Division I schools and conferences
and, in respect to international television aggregators and networks, KyLinTV
(Chinese), ABS-CBN (Filipino), Talfazat (Arabic), TV-Desi (South Asian) and Sky
Angel (Christian). Customer/partner content can be viewed by way of Internet on
PCs and on the television through the Company’s IPTV set top box.
Forward-Looking
Statements
Certain
statements herein are forward-looking statements and represent NeuLion's current
intentions in respect of future activities. These statements, in addressing
future events and conditions, involve inherent risks and uncertainties.
Forward-looking statements can by identified by the use of the words "will,"
"expect," "seek," "anticipate," "believe," "plan," "estimate," "expect," and
"intend" and statements that an event or result "may," "will," "can," "should,"
"could," or "might" occur or be achieved and other similar expressions.
Forward-looking statements involve significant risk, uncertainties and
assumptions. Many factors could cause actual results, performance or
achievements to differ materially from the results discussed or implied in the
forward-looking statements. These factors should be considered carefully and
readers should not place undue reliance on the forward-looking statements.
Although the forward-looking statements contained in this release are based upon
what management believes to be reasonable assumptions, the Company cannot assure
readers that actual results will be consistent with these forward-looking
statements. These forward-looking statements are made as of the date of this
release and the Company assumes no obligation to update or revise them to
reflect new events or circumstances, except as required by law. Many
factors could cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements that may be expressed or implied by such forward-looking
statements, including: the integration of the businesses of NeuLion and its
subsidiaries NeuLion USA and Interactive Netcasting Systems Inc., our continued
relationships with
58
our channel
partners, general economic and market segment conditions, competitor activity,
product capability and acceptance, rates, technology changes and international
risk and currency exchange. More specific risks include that NeuLion,
NeuLion USA and Interactive Netcasting Systems Inc. will not be able to realize
some or all expected synergies due to incompatibilities in our businesses, the
inability of management to bring about such synergies or a changing business
environment rendering such synergies inadvisable or uneconomical. After
integrating the businesses, the suite of service offerings may not perform as
expected if shifting demand moves in a direction away from our expected business
model, if competitors are able to take market share away from us or if changing
technology adversely impacts us. In addition, while the Company
expects its content partners and those of its subsidiaries to continue and
expand their relationship with each of us, there can be no assurance that such
relationships will continue as expected, or at all. A more detailed
assessment of the risks that could cause actual results to materially differ
from current expectations is contained in the "Risk Factors" section of the
Company’s 2008 annual MD&A and AIF filed on ▇▇▇.▇▇▇▇▇.▇▇▇
and Registration Statement on Form 10, as amended, available on ▇▇▇.▇▇▇.▇▇▇.
###
Press
Contacts:
DISH
Network Contact
▇▇▇▇▇▇▇
▇▇▇▇▇▇
Corporate
Communications Coordinator
DISH
Network L.L.C.
▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Corporate
Communications
▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Investor
Relations Contact:
G. ▇▇▇▇▇
▇▇▇▇▇▇▇▇
Vice
Chairman
▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
59