<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
FOR ANNUAL AND TRANSITIONAL REPORTS
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
----------------------
(Mark One)
/X/ Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1997:
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________ to __________
Commission File No. 000-22877
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@ Entertainment, Inc.
(Exact name of registrant as specified in its charter)
Delaware 06-1487156
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Commercial Plaza, Hartford, Connecticut 06103-3585
(Address of registrant's principal executive offices, including zip code)
(860) 549-1674
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock Nasdaq National Market
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
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(Title of Class)
Indicate by check mark (X) whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K /X/
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates of the registrant. The aggregate market value
shall be computed by reference to the price at which the common equity was
sold, or the average bid and asked prices of such common equity, as of a
specified date within 60 days prior to the date of filing. (See definition of
affiliate in Rule 405.)
$154,434,000
The number of shares outstanding of @ Entertainment, Inc.'s common stock
as of December 31, 1997, was:
Common Stock 33,310,000
As of March 25, 1998, the aggregate market value of the shares of common
stock of the registrant outstanding was $466,340,000. This figure is based
on the closing price by the Nasdaq National Market for a share of the
registrant's common stock on March 25, 1998, which was $14.00 as reported in
the Wall Street Journal on March 26, 1998.
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DOCUMENTS INCORPORATED BY REFERENCE:
None.
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@ENTERTAINMENT, INC.
Form 10-K/A
TABLE OF CONTENTS
PAGE NO.
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COVER PAGE.......................................................1
TABLE OF CONTENTS................................................2
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K.............................3
SIGNATURES.......................................................4
<PAGE>
PART IV
@Entertainment, Inc. hereby amends its Annual Report on Form 10-K for
the year ended December 31, 1997 to include as Exhibit 10.1 the Commercial
Cooperation Agreement between Wizja TV Sp. z o.o and Philips Business
Electronics BV and Philips Polska Sp. z o.o.
As so amended, Item 14 reads as follows in its entirety:
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
<TABLE>
<CAPTION>
Exhibit
Number
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<S> <C>
3.1 Certificate of Incorporation of @Entertainment, Inc. (1)
3.2 By-Laws of @Entertainment, Inc. (2)
*10.1 Commercial Cooperation Agreement between Wizja TV Sp. z o.o and
Philips Business Electronics BV and Philips Polska Sp. z o.o.(3)
11 Statement re Computation of per share earnings(4)
21 Subsidiaries of the Company
27 Financial Data schedule
</TABLE>
_________________________________
<TABLE>
<CAPTION>
<S> <C>
* Filed herewith
(1) Incorporated by reference into this document from Exhibits filed
with Registration Statement on Form S-1, Registration No. 333-29869.
(2) Incorporated by reference into this document from Exhibits filed
with Registration Statement on Form S-1, Registration No. 333-29869.
(3) Pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934,
as amended, confidential treatment has been requested on certain
portions of the exhibit and the omitted portions of the exhibit have
been filed with the Securities and Exchange Commission under
separate cover.
(4) See Note 15 to the Notes to Consolidated Financial Statements
contained in this Form 10-K.
</TABLE>
3
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 7, 1998 @Entertainment, Inc.
By: /s/ ROBERT E. FOWLER, III
---------------------------------
Robert E. Fowler, III
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ROBERT E. FOWLER, III Chief Executive Officer and Director August 7, 1998
- ------------------------ (Principal Executive Officer)
Robert E. Fowler, III
/s/DONALD MILLER-JONES Chief Financial Officer August 7, 1998
- ------------------------ (Principal Financial and Principal
Donald Miller-Jones Accounting Officer)
/s/DAVID T. CHASE Director August 7, 1998
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David T. Chase
/s/ARNOLD L. CHASE Director August 7, 1998
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Arnold L. Chase
/s/DAVID CHANCE Director August 7, 1998
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David Chance
Director August 7, 1998
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Samuel Chisholm
Director August 7, 1998
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Agnieszka Holland
/s/SCOTT A. LANPHERE Director August 7, 1998
- ------------------------
Scott A. Lanphere
Director August 7, 1998
- ------------------------
Jerry Z. Swirski
4
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Wizja TV Sp z o.o.
("WTV")
and
Philips Business Electronics BV
("PBE")
and
Philips Polska Sp z o.o.
("PPS")
--------------------------------
COMMERCIAL COOPERATION AGREEMENT
--------------------------------
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
CONFIDENTIAL
<PAGE>
COMMERCIAL COOPERATION AGREEMENT
Table of Contents
1. Definitions 2
2. Purchase and Sale of Decoder Systems 5
2.1 Manufacture, purchase and sale 5
2.2 Forecast 6
2.3 Confirmation and conditions 6
2.3A New Agreement 6
2.4 Factory testing and Delivery Conditions 7
2.5 Packing and user instructions 7
2.6 Acceptance 8
2.7 Third Party Suppliers 11
2.8 Payment 11
2.9 Warranty 12
2.10 Late Delivery 13
2.11 Homologation 15
2.12 Smart Cards 15
2.12A Additional Smart Cards 15
2.13 Spare parts and support 16
3. Decoder system Testins and Acceptance 16
3.1 Delivery of trial units 16
3.2 Tests 16
3.2A Final Acceptance of the Equipment 17
3.3 Notice of Rejection/Acceptance 17
3.4 Engineering Change Procedure 17
3.5 Documentation 18
4. Establishment of a Special Department of PPS 18
4.1 DTII Centre 18
4.2 Staffing 19
5. Distribution services to be provided 19
5.1 Logistics 19
5.2 Sales/Rentals 19
5.3 PBE/WTV Guarantee 19
5.4 Collection of subscription fees and Payment of Dealer 20
6. Payment for Services 20
6.1 Payments 20
6.2 Intentionally deleted 21
6.3 Taxes 21
6.4 Currency 21
6.5 Bank 21
6.6 Delay 21
6.7 Setoff 21
6.8 Audits 21
CONFIDENTIAL
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7. Exclusivity, Software licences and Escrow 22
7.1 Exclusivity 22
7.2 Licence 23
7.3 Licence Fees 23
7.4 Reservations 24
7.5 Modifications and Improvements 25
7.6 Term and Termination 25
7.7 Miscellaneous 26
7.8 CryptoWorks sublicensing and future products 26
7.9 Escrow 26
8. Dealers and Points of Sale 27
8.1 Authorised Channels of Distribution 27
8.2 Qualification of Dealers and Installers 27
8.3 Point of sale facilities 27
8.4 Inspection of Dealers 28
8.5 Establishment of Installation appointment at time of sale/rental 28
8.6 Amount of Dealers 28
9. Initial Distribution 29
9.1 Preparedness for Initial Distribution 29
10. Training 29
10. Provision of Training 29
10.2 Timing 30
11. Installation 30
11.1 Installation provided 30
11.2 Installation Accessories 30
11.3 Installation by Customer or unauthorised installers 31
11.4 Installation work orders 31
11.5 ODU Amount 31
12. Customer Support 31
12.1 PPS' Technical Team 31
12.2 Customer service and support telephone line 32
12.3 PPS's obligation to repair and perform maintenance 32
12.3A Mutual Indemnity 32
13. Network Service by WTV 33
13.1 Control of Content 33
13.2 Subscription Agreement 33
13.3 Procedure for completing Subscription Agreement at Dealer
facilities 33
14. Use of WTV Trademarks by PPS/PBE 34
14.1 Grant 34
14.2 Acknowledgement of Ownership 34
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14.3 Quality Control and WTV Approval 34
14.4 Placement of Trademark 35
14.5 Rights upon Termination 35
15. Use of Philips Trademarks by WTV 35
15.1 Grant 35
15.2 Acknowledgement of Ownership 35
15.3 Quality Control and Philips Approval 36
15.4 Placement of Trademark 36
15.5 Rights upon Termination 36
16. Advertising Inserts 37
16.1 Packaging and Advertising inserts 37
17. Marketing and Advertising 37
17.1 Advertising and Promotion Plan and Contributions 37
18. Term and Termination 37
18.1 Term 37
18.2 Material Breach 38
18.3 Insolvency 38
18.4 Compensation 39
18.5 Dealer and Manufacturer Continuity 39
19. Intellectual Property rights 40
20. Force Majeure 43
20.1 Definition 43
20.2 Notice 43
20.3 Right of Termination 44
21. Project Management 44
22. Confidentiality 45
22.1 Confidential Information 45
22.2 Exceptions 45
22.3 Surviving Obligations 46
23. Notices 46
24. Law and Disputes 47
25. Miscellaneous 48
25.1 Amendments 48
25.2 Trademarks and Tradenames 48
25.3 No waiver 48
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25.4 Assignment and delegated performance 48
25.5 Survival 49
25.6 Publicity 49
25.7 Export Control 49
25.8 Inconsistencies 49
25.9 Relation between the parties and costs 49
25.10 Validity 49
25.11 Limitation of Liability 50
25.12 Mutual warranties 50
25.13 Entire Agreement 50
25.14 English Language Version 51
SCHEDULES 52
Schedule 1H : Specification of the Decoder
Schedule 1H(A) : Specification for ODU
Schedule 1I : Delivery and Milestone Plan
Schedule 2.8 : Payment Schedule
Schedule 2.9A : Software Warranty
Schedule 2.9B : Repair and replacement procedure
Schedule 2.12 : CryptoWorks Security Programme
Schedule 3.2 : Test Plan
Schedule 3.4 : Engineering Change Procedure
Schedule 5.1 : Logistics/Distribution services
Schedule 5.3A : PBE's Guarantee
Schedule 5.3B : WTV's Guarantee
Schedule 8.6 : Dealer Criteria
Schedule 11 : Installation Specification
Schedule 14.1 : WTV Trademarks
Schedule 15.1 : Philips Trademarks
Schedule 20.3 : List of Third Party Subcontractors/Sublicencees
CONFIDENTIAL
<PAGE>
COMMERCIAL COOPERATION AGREEMENT
This Commercial Cooperation Agreement ("Agreement") is made this 10th day of
March, 1998 by and between
Wizja TV Sp z o.o. of Ostrobramska 75. (Promenada) 04-175, Warsaw, Poland
(hereinafter referred to as "WTV"), on the one hand, and
Philips Business Electronics BV business unit Digital Video Systems, having its
registered office at Glaslaan 2, Eindhoven, The Netherlands (hereinafter
referred to as "PBE"), and Philips Polska Sp z o.o., acting through its division
Sound & Vision, having its registered office at ul. Marszalkowska 44-49, 00-648
Warsaw, Poland (hereinafter referred to as "PPS") on the other hand,
WHEREAS, PBE is currently manufacturing and selling digital compression, DVB and
MPEG-2 compliant satellite broadcast distribution systems including CryptoWorks
conditional access systems and corresponding digital consumer receivers/decoders
including a smart card and out-door-unit for various markets throughout the
world;
WHEREAS, WTV is purchasing Decoders from PBE for distribution by PPS in Poland
to WTV's Customers;
WHEREAS, PBE within the Philips group of companies is the legal entity having
ultimate responsibility for the development, production and sale of the Decoders
(as defined hereinafter) and PPS is the legal entity within the Philips group of
companies carrying out Distribution of the Decoders within Poland in accordance
with the terms and conditions set forth herein; and
WHEREAS, the parties entered into a Memorandum of Understanding dated 7 July,
1997 and WTV's Affiliate At Entertainment Limited of Maidstone, Kent, UK and PBE
have signed a digital compression purchase and sale agreement dated December 19,
1997 for digital compression equipment for the transmission of At Entertainment
Limited's direct to home satellite digital service to WTV's Customers in Poland
("Main Agreement") as part of the end to end solution provided by PBE and PPS as
part of a fully integrated and functioning digital encrypted television system
and the parties hereto wish to cooperate on a long term basis in providing state
of the art digital reception equipment and telecommunications services to
Customers in Poland in accordance with the terms and conditions set forth
hereinafter.
NOW THE PARTIES HERETO AGREE AS FOLLOWS:
CONFIDENTIAL
<PAGE>
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Article 1
Definitions
1. Definitions
A. "Affiliate" shall mean any corporation, company, partnership or other legal
entity, existing now or in the future, which directly or indirectly controls, or
is controlled by, or is under common control with, a Party to this Agreement.
Control means the ability to direct the policy or operations of an entity,
directly or indirectly, but only as long as such control exists.
B. "Agreed Amount" shall mean:
(i) with respect to Decoders: 500,000 units, and
(ii) with respect to ODUs: the amount of ODUs calculated in accordance with
Article 11.5 ("ODU Amount"),
less the amount of Decoder Systems and/or Decoders and/or ODUs, WTV is entitled
to subtract on the basis of this Agreement.
C. "Authorised Representatives" mean the representatives nominated by WTV, PBE
and PPS respectively and notified to the other parties in writing from time to
time.
D. "Batch" means the number of Decoders and/or Decoder Systems specified in the
Forecast for delivery during a particular week of the Term.
E. "Contract Price" means the price of each Decoder System as set out in Article
2.8.
F. "Customer" means a purchaser or renter of a Decoder or Decoder System who has
executed a Subscription Agreement on the basis of which he is authorised to
receive the Network Service.
G. "Dealer" means a retailer which distributes consumer electronics products
(including Decoders and Decoder Systems) supplied by PPS for (re)sale or rental
in the Polish market through its respective Points of Sale.
H. "Decoder" means the integrated digital receiver decoder including Software
and a corresponding Smart Card, manufactured by PBE, containing the Philips
trademark and which is used to access, receive, decompress, demultiplex, decrypt
and decode the Network Service and which meets the Specification attached hereto
as Schedule 1H.
I. "Dealer System" or "System" means the combination of PBE products, capable of
accessing, receiving, decompressing, demultiplexing, decrypting and decoding the
Network
CONFIDENTIAL
<PAGE>
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Service and which meets the Specifications attached hereto as Schedule 1H and
Schedule 1H(A). This includes a Decoder and an ODU in the case of individual
residential units, and in the case of MDUs, one Decoder per residential unit and
a minimum of one ODU per MDU.
J. "Decoder System Products" means Decoder Systems, Installation Accessories and
any other products related to or required for the use of the Decoder Systems by
Customers and distributed by PPS.
K. "Delivery and Milestone Plan" shall mean the agreed dates and or milestones
for the various tasks to be performed, all as set forth in Schedule 1I hereto,
as updated from time to time in writing by the parties.
L. "Distribution" means the sale, renting, leasing, distribution, marketing and
promotion of the Decoder Systems and the Network Service. "Distribute" shall
have the corresponding meaning.
M. "Engineering Change Procedure" shall mean the procedure attached hereto as
Schedule 3.4 describing the manner in which future technical changes are to be
implemented.
N. "Execution Date" means the date first written above upon which this Agreement
was executed.
O. "Firmware" shall mean all non-accessible and non-reproducible software and
program codes embedded in hardware which are necessary for the proper
functioning of the Decoder Systems.
P. "Forecast" means the commitment for purchase of Decoder Systems, Decoders,
Smart Cards and ODU's provided to PBE by WTV in accordance with Article 2.2.
Q. "Future Products" shall mean natural extensions, Updates, Upgrades, future
generations and follow on products capable of receiving the Network Service,
produced by Philips.
R. "Installation" means the erection, cabling, complete assembly and
set-up/configuration of the Decoder Systems at a Customer's premises.
S. "Installation Accessories" means all materials and accessories required and
used in the Installation of the Decoder Systems, including, but not limited to,
cabling, wiring, special tools and/or brackets, parts, instruction manuals and
all other items necessary to install the Decoder Systems at a Customer's
premises.
T1. "Installation Specification" means the specification for a standard
Installation as set out in Schedule 11.
CONFIDENTIAL
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U. "Installer" means an individual or entity qualified, trained and authorised
by PPS to perform the Installation as set forth in Article 11.
V. "Libor" means the six (6) month London Interbank Offered Rate quoted by the
British Bankers Association in London in respect of US dollars.
W. "Licensed Products and Materials" means those products approved by WTV for
PBE's and PPS's use of the WTV Trademarks (as defined in Article 14). Such
products include upon approval in accordance with Article 14, the Decoder
Systems, Decoders, ODUs, Installation Accessories and other related materials,
the packaging thereof and the advertising, point of sale and promotional and
advertising materials with respect thereto and to the Network Service.
X. "Major Fault" shall mean that a Decoder System:
(a) does not materially perform in accordance with the Specification other
than any failure to meet the requirements in respect of the Software as
set out in Article 2.6; or
(b) does not comply with Eur1 certification.
Y. "Multiple Dwelling Unit" or "MDU" means apartment, condominium, hotel,
hospital and similar multiple dwelling structure.
Z. "Network Service(s)" shall mean the direct to home satellite encrypted
digital subscription television service broadcast by At Entertainment Limited
delivered to Customers.
AA. "ODU" means outdoor unit and consists of a Philips and WTV branded satellite
reception dish and associated electronics capable of receiving Network Service
which operates in accordance with the Specification set forth in Schedule 1H(A)
and the live signal from the Equipment.
BB. "Point of Sale" shall mean a sales outlet of a Dealer at which a Decoder
System is available for display, promotion, sale and/or hire.
CC. "Software" shall mean all Firmware and any downloadable software packages
that operate the Decoder Systems including CryptoWorks as specified in Schedule
1H hereto and any Updates and Upgrades to the Software.
DD. "Smart Card" shall mean the insertion card which when inserted in the
Decoder will, through the use of a built in microprocessor (or such other
device as agreed by the parties) and the CryptoWorks embedded (conditional
access) code controls the ability of the Decoder System to access the Network
Service after authorisation by WTV.
CONFIDENTIAL
<PAGE>
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EE. "Specification" means the agreed technical and performance specification for
the Decoder System attached to this Agreement at Schedule 1H and Schedule 1H(A)
as amended and agreed in writing by both parties from time to time.
FF. "Subscription Agreement" means an agreement entered into by a prospective
Customer under which he is authorised to receive the Network Service.
GG. "Term" means the term of this Agreement which shall commence on the
Execution Date and expire in accordance with Article 18.1.
HH. "Tests" shall have the meaning set forth in Article 2.4.
II. "Update" shall mean improved hardware, Software and/or Firmware having the
same functional Specification as before, but originating from corrected source
code in case of Software or corrections, in case of hardware.
JJ. "Upgrade" shall mean improved hardware, software and/or firmware as a result
of enhanced functionally and/or changed Specification.
KK. "Working Day" means a business day in The Netherlands and does not include
public holidays or Saturdays or Sundays in The Netherlands.
Article 2
Purchase and Sale of Decoder Systems
2.1 Manufacture, purchase and sale
PBE shall manufacture or have manufactured the Decoder Systems in
accordance with the Specifications and the Delivery and Milestone Plan and
best practice quality assurance procedures. WTV shall be entitled to (a)
inspect the factory or factories where the Decoder Systems are being
manufactured; and (b) inspect and review the manufacturing procedures for
the Decoder Systems; and (c) inspect and review PBE's quality records
relating to the manufacture and testing of Decoder Systems, during the
Term by 14 days' notice in writing to PBE to verify PBE's compliance with
its obligations under this Agreement. PBE shall cooperate with WTV
including allowing access to relevant premises and records and using
reasonable endeavours to ensure relevant staff are available if required.
WTV agrees to purchase and pay for and PBE agrees to sell and deliver the
Agreed Amount in accordance with the terms and conditions hereof.
CONFIDENTIAL
<PAGE>
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2.2 Forecast
WTV will provide to PBE on a monthly basis a written six-month rolling
forecast of its estimated requirements for Decoders and Smart Cards, for
delivery of Batches in each of the next six (6) months. This Forecast will
indicate the following:
(a) a commitment for each of the first four (4) months;
(b) a non-binding reasonable commercial efforts forecast for the fifth
and sixth months, which may vary each month in total plus or minus
20% (twenty percent), versus the immediately preceding forecast.
WTV will provide to PBE on a monthly basis a written 3 month rolling
forecast of its estimated requirements for ODU's for delivery of Batches
in each of the next three (3) months. This Forecast will indicate the
following:
(a) a commitment for each of the first two (2) months;
(b) a non-binding reasonable commercial endeavours forecast to the third
month, which when it is confirmed may vary in total plus or minus
20% (twenty percent).
PBE agrees to use reasonable commercial endeavours to deliver the Decoder
Systems, Decoders, ODUs and Smart Cards in accordance with WTV's weekly
requirements for Decoder Systems, Decoders, ODU's and Smart Cards as set
out in the Forecast, provided that WTV's weekly requirements in that
Forecast do not vary by more than 20% from week to week.
2.3 Confirmation and conditions
The Forecast is binding on both parties. PBE shall acknowledge in writing
such Forecast to WTV within five (5) Working Days after receipt thereof.
Any and all such deliveries shall be issued subject to the terms and
conditions of this Agreement and any and all other terms and conditions
included in or made applicable to a quotation or a confirmation of a
purchase order, if any, are declared to be invalid and any such supplies
of Decoders or Decoder Systems shall only be governed by the terms and
conditions of this Agreement, unless otherwise agreed in writing.
2.3A New Agreement
If WTV has purchased the Agreed Amount in accordance with Article 2.1 and
wants to continue:
(a) PPS' appointment as its agent to Distribute the Decoder Systems,
and/or
(b) to purchase Decoders and/or Decoder Systems from PBE,
it shall notify PBE at least four months in advance and the parties
(including PPS) shall negotiate the terms and conditions of the new
agreement or agreements in good faith.
CONFIDENTIAL
<PAGE>
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2.4 Factory testing and Delivery conditions
Prior to despatch from PBE, each Batch of Decoder Systems shall be
carefully inspected and submitted to standard tests to be agreed between
the Parties ("Tests"). WTV shall have the right to send a representative
at its cost to inspect the Batch of Decoders or Decoder Systems and/or
witness the Tests before their despatch from the factory in Belgium, or
any other factory where PBE manufactures Decoders or Decoder Systems.
PBE agrees to notify WTV of the times and place when Tests will take place
in accordance with the Forecast at least 4 weeks before commencement of
the Tests. WTV agrees to notify PBE at least 2 weeks before the Tests are
due to commence if it intends to exercise this right.
PBE shall deliver the Decoder Systems to WTV at PBE's Belgian factory, or
any other factory where PBE manufactures Decoders or Decoder Systems in
accordance with the Forecast and the Delivery and Milestone Plan. PBE
shall be responsible for the transportation as from the factory and
delivery, including insurance and export licenses to the extent required,
and (if legally possible) import permits (if any) related thereto, of the
Decoders and Decoder Systems to a PPS appointed bonded warehouse approved
by WTV in Poland (or non bonded if WTV allows same for improved timing of
delivery), all on behalf of WTV as described below. PBE hereby warrants
that all Decoder Systems are adequately insured until delivery to the
Dealers up to the full invoice value. The distribution fee to be paid to
PPS in accordance with Article 6 includes importing services and costs
involved in distribution to Dealers from said warehouse but excludes
transport to Poland, import duties, any applicable VAT and customs
clearance administration, which will be paid directly by WTV, PBE and PPS
undertake to use all reasonable endeavours to support WTV in relation to
the importation of the Decoder Systems into Poland and prepare
documentation for importation, if required.
All Decoder Systems shall become WTV's property upon delivery (ex
factory), but the Decoder Systems shall be at PBE's risk as from delivery
up to receipt in the warehouse and at PPS risk until delivery and
Installation at the Customer's premises.
2.5 Packing and user instructions
Unless otherwise agreed, any Decoder Systems to be delivered hereunder
shall be labelled by PBE with the details such as ship to address,
codenumbers and packing list as provided to WTV by PBE, shall be packed
and packaged (a) to ensure undamaged and safe arrival at their ultimate
destination; and (b) to comply with requirements imposed by the modes of
transport. The Decoder Systems will contain user instructions in both the
English and Polish languages approved by WTV and promotional inserts as
set out in Article 16.1.
CONFIDENTIAL
<PAGE>
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2.6 Acceptance
PBE warrants that the Decoder Systems shall comply with the Specification
as at the date of Installation at the Customer's premises.
PBE and WTV acknowledge that the [***] of the Decoders ("[***]",
"[***]" and "[***]" respectively) to be delivered to WTV will
meet the Specification [***] as set out in Schedule 1H, which is
attached to this Agreement.
For these purposes, [***] Decoder shall mean a Decoder meeting the
Specification [***] the functionality and/or features so indicated in
Schedule 1H; [***] Decoder shall mean a Decoder meeting the
Specification [***] the functionality and/or features so indicated in
Schedule 1H; [***] Decoder shall mean a Decoder meeting the
Specification [***] the functionality and/or features so indicated in
Schedule 1H. PBE shall ensure that:
(a) each Decoder delivered as from [***] shall be a [***] Decoder
and each of the Decoders delivered or to be delivered as
soon as practically possible, but no later than [***] shall
be a [***] Decoder; and
(b) as soon as practically possible, but no later than [***],
each of the Decoders delivered and to be delivered as from such date
shall be a [***] Decoder; and
(c) as soon as practically possible, but no later than [***],
each of the Decoders delivered and to be delivered as from
such date, comply with the Specification;
(d) any costs associated with ensuring compliance with the Specification
(including downloaded software, training WTV's engineers, customer
support and enquiries and acceptance testing) shall be paid by PBE.
The costs payable by PBE exclude costs incurred by WTV relating to
the satellite transmission of the downloaded software to Decoders
Installed at Customers' premises by WTV.
If WTV incurs any out of pocket expenses arising out of:
(i) the deviation of [***] Decoders from the
Specification; or
(ii) subsequent tasks to ensure compliance of [***] Decoders with
the Specification; or
(iii) queries or concerns of Customers,
other than costs relating to satellite transmission of the downloaded
software to Decoders Installed in Customers' premises by WTV, PPS shall
reimburse WTV within 30 days of the issue of an invoice for those expenses
including VAT, provided
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
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that WTV has the right at its election to set off the cost of these
expenses against payments to be made by WTV in accordance with Article
6.1. If PPS fails to pay WTV within 30 days of the issue of the invoice,
interest will be due at the rate of [***] ([***]) percent per month on the
outstanding amount, until it is paid by PPS, unless there is a good faith
dispute in relation to the amount payable.
2.6A Remedies
The remedies set out in Article 2.6B apply if:
(a) the [***] Decoders are not delivered by [***]; or
(b) the [***] Decoders are not delivered by [***]; or
(c) the [***] Decoders are not delivered by [***]; or
(d) the Decoders [***] are not delivered by [***],
each a "Relevant Date".
2.6B If the Decoders and/or Decoder Systems do not meet the Specification for
the [***] of the Decoder ("[***] Specification") by the Relevant Date,
WTV is entitled to:
(a) Delay Discounts as set out in Article 2.10 applied to the Contract
Price of the Decoders and/or Decoder Systems Forecasted after the
Relevant Date up to a maximum of [***]% of the Contract Price for
those Decoders and/or Decoder Systems that do not meet the [***]
Specification until remedied;
(b) if WTV elects not to take the Decoders that do not meet the
[***] Specification and the delay amounts to more than 5 weeks,
WTV shall be entitled to a [***] reduction of the Agreed Amount to
be purchased for each Decoder and/or Decoder System Forecasted;
(i) after the 5 week grace period set out in Article 2.6B(a) for
the Decoders referred to in Articles 2.6A(a), (b) & (c); and
(ii) after [***] for the Decoders referred to in Article
2.6A(d),
until the Decoders delivered and to be delivered meet the [***]
Specification.
The Contract Price applicable to the reduction in the Agreed Amount
shall be as follows:
(i) [***] Decoder and/or Decoder System calculated on the basis
of the [***] as defined in Article 2.8; and
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(ii) [***] Decoders and/or Decoder System calculated on the basis
of the [***] as defined in Article 2.8.
(c) if WTV elects to take those Decoders that do not meet the [***]
Specification, payment of the [***] of the Contract Price payable on
delivery of Decoders and/or Decoder Systems in accordance with
Article 2.8 will be payable on the later of:
(i) 60 days after delivery of those Decoders; and
(ii) 14 days after the Decoder meets the [***] Specification.
2.6C If Decoders delivered after December 31, 1998 do not contain the agreed
[***] functionality as set out in the Specification, WTV shall be
entitled to:
(a) Delay Discounts as set out in Article 2.10 applied to the Contract
Price of the Decoders and/or Decoder Systems Forecasted after
December 31, 1998 up to a maximum of [***]% of the Contract Price
for those Decoders and/or Decoder Systems that do not have [***]
until remedied; and
(b) notify PBE that PBE will lose its exclusivity as set out in Article
7.1 by March 31, 1999;
(c) upon receipt of that notice, PBE shall cooperate in good faith to
expeditiously license third parties appointed by WTV its Software
including CryptoWorks in order for WTV to have a second and third
source of manufacture by March 31, 1999; and
(d) WTV will not be required to purchase the Agreed Amount in accordance
with Article 7.1.
In relation to the Forecast for Decoders and/or Decoder Systems to be
delivered after 31 December 1998, WTV will be required to purchase the
Forecasted Decoders for January, February and March 1999. If WTV requires
Decoders:
(a) in April 1999, it agrees to order them by 15 January 1999; and
(b) in May 1999 it agrees to order them by 15 February 1999.
Notwithstanding the foregoing, PBE will undertake all reasonable
commercial endeavours to ensure that it delivers Decoder Systems which
meet the [***] Specification in accordance with the timetable set out
in this Article and that at all times that WTV can continue to meet the
roll out targets.
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
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2.7 Third Party suppliers
PBE and PPS are entitled to appoint a third party to handle logistics,
integration, assembling or subcontracted activities relating to the
Decoder Systems provided that:
(a) WTV has given its prior written approval to the appointment of the
third party, which may not be unreasonably withheld or delayed, WTV
will grant its approval provided the performance requirements of any
such third party are at least as comprehensive as the performance
required of PBE under this Agreement; and
(b) PBE and PSS remain liable for the performance of their respective
obligations in this Agreement.
2.8 Payment
The Contract Price is the sum of:
(a) US$ [***] for each of the [***] Decoders delivered by PBE to
WTV ("[***]") or US$[***] for each of the [***] Decoders
delivered by PBE to WTV ("[***]"); and
(b) US$ [***] for the Smart Cards; and
(c) US$ [***] for the license of the Software (including Cryptoworks)
per Decoder ("Software Price"); and
(d) US$ [***] for each ODU.
PBE agrees that the Contract Price may vary by the reduction of US$[***]
where an ODU is not ordered and delivered as part of the Decoder System as
contemplated in Article 11.5.
All PBE invoices are due 30 days as from the date of the invoice, unless
agreed otherwise herein.
(i) Payment for Decoders and Smart Cards shall be made to PBE according
to the following conditions:
Each month PBE will invoice WTV [***]% of the Contract Price of each
month's new Forecast for those Decoders and/or Smart Cards.
The last [***]% of the Contract Price will be invoiced by PBE on the
date of shipment from the factory. Subject to Article 2.6B(c), this
last invoice will have to be paid by WTV within 60 days after the
invoice has been sent.
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(ii) Payment for the ODU's shall be made to PBE according to the
following conditions:
Each month PBE will invoice WTV [***]% of the total price of a
month's Forecast for ODU's once it becomes binding. The
remaining [***]% of the total price of the month's Forecast shall
be invoiced on the date of shipment from the factory. These
invoices shall be paid by WTV within 30 days of the date of the
invoice being sent to WTV.
In Schedule 2.8 an example of the payment schedule is attached.
Invoices are to be off set against the US$8 million which has been paid
in advance to PBE until that amount has been satisfied.
Any and all value added taxes and any other taxes, if any (other than
corporate tax levied on PBE and PPS), and/or (import) duties as applicable
by law are not included in the Contract Price payable to PBE and WTV
agrees to pay any such taxes and duties. All amounts shall be due and
payable in the currency in which they are incurred. All payments shall be
made by direct transfer to the bank indicated by PBE on the invoices with
all costs of the transaction paid by WTV. In case WTV fails to pay the
amounts due within the agreed period and they are not subject to a good
faith dispute, interest will be due by WTV at the rate of [***] percent
per month on the outstanding amount for which an invoice has been issued
until such amount is paid, without any notice of default being required.
WTV is entitled to set off any liquidated damages it is entitled to on the
basis of Article 2.10 (delivery delays) against any amount payable on the
basis of this Article 2.
2.9 Warranty
Each Decoder System will be warranted to WTV by PPS for a period of 12
months as from the date of Installation at the Customer's premises as set
out in this Article 2.9.
PPS warrants to WTV the good quality of the Decoder Systems supplied
against defects which appear therein under proper use in accordance with
the user documentation supplied by PBE (if any), and which arise solely
from faulty design, manufacture, materials or workmanship. This warranty
does not cover damage sustained by normal wear and tear or arising in
consequence of negligence, misuse or improper installation, use,
maintenance, repair, alteration, storage or return handling or
unauthorised combining with third party products of the Decoder Systems by
the Customer. Some newly manufactured Decoder Systems supplied hereunder
may contain selected remanufactured parts equivalent to new in
performance. Replacement parts are new or equivalent to new in
performance.
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
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Under this warranty PPS shall replace such parts as have proved to have
such defects as set out hereabove or, at PPS option, repair such parts or
have them repaired at PPS option, always free of charge, provided the
procedure set forth in Schedule 2.9B is adhered to. Defective parts shall
become PPS' property as soon as they have been replaced. For the Software
in the Decoder Systems, Schedule 2.9A has specific warranty arrangements.
Compliance with this warranty undertaking pursuant to this paragraph shall
be considered to give full satisfaction (except as set out in Article
2.10) to WTV and any Customer. In respect of malperforming or faulty
Decoder Systems, any claim for WTV for set off, compensation or for
dissolution of the purchase order or for damages arising out of a defect
arising from the faulty design, manufacture, materials or workmanship is
hereby waived. Warranty and repair services will be executed by or on
behalf of PPS in accordance with Schedule 2.9B.
PBE, PPS and WTV will negotiate in good faith the terms of a service and
maintenance agreement for each Decoder System which will apply after the
warranty period set out above for each Decoder System has expired. Service
and maintenance for the first year of any such agreement shall be provided
at a cost of US$[***] per Decoder System. The service and maintenance
agreement shall set out further terms and conditions on which support and
service will be provided by PBE and PPS to WTV and shall meet the same
requirements as when the Decoder Systems are under warranty as set out in
Article 2.9.
Unless the service and maintenance agreement referred to above is in
force, PPS undertakes to provide a repair and replacement facility for
Decoders on standard conditions for Customers which apply to its other
consumer electronics products in Poland for 7 years from the last date of
delivery of the Agreed Amount.
Finally, PBE warrants that the personnel employed by PBE and its
subcontractors, if any, shall be sufficiently skilled and qualified and
will exercise all due care and skill in the performance of their tasks
with respect to the Decoder Systems and it knows of no reason why it
should not be capable of fully performing its obligations in the manner
and time-scale envisaged in this Agreement, provided that the parties
acknowledge the normal risks in software development activities which
apply to PBE's obligations in developing and delivering [***]
Decoders and Decoder Systems which comply with the Specification
by the dates specified in Article 2.6.
2.10 Late Delivery
If PBE fails to deliver:
(a) Decoders and/or Decoder Systems in accordance with the Forecast
(April 1998: [***] units, May 1998: [***] units and June 1998:
[***] units) and subsequently as provided by WTV to PBE; or
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(b) the [***], [***], [***] Decoder that meets the [***]
Specification or a Decoder System that meets the Specification
and contains the agreed [***] functionality in accordance with
article 2.6A, B & C),
then, as WTV's sole remedy (other than as described in this Article 2):
(i) PBE will reduce the Contract Price for the Batch of delayed Decoder
Systems and/or Decoders and/or ODUs (whichever applies) by [***]%
([***] percent) for each week or part thereof that such delay
continues, up to a maximum of [***]% ([***] percent) of the Contract
Price for the delayed Batch of Decoders or Decoder Systems and/or
ODU's; and
(ii) the US$[***] distribution fee to be paid to PPS will be reduced by
the same percentages,
(together the "Delay Discounts"),
except that these reductions shall not apply if such delay is the direct
result of acts or omissions on the part of WTV or breach of this Agreement
by WTV or Force Majeure. In case such delay extends beyond three months,
WTV is entitled to terminate this Agreement in accordance with Articles
18.2 or 18.3. The parties acknowledge and agree that Decoders do not incur
a delay discount in addition to a functionality discount if the cause is
only with Software not being delivered or downloaded in accordance with
Article 2.6.
PBE acknowledges that ODU's must be delivered as part of a Decoder System.
If Decoders are delayed as set out in this Article 2.10 the ODUs will
remain in the PPS appointed bonded warehouse, at PPS's cost, after
delivery of the ODUs to WTV. PBE will not provide the ODU's separately to
WTV or Dealers or Installers, unless expressly agreed to by WTV. If a
Batch of Decoders is delayed, payment of the remaining [***]% of the price
of the ODUs that relate to that Batch of Decoders will be payable on the
later of 30 days after the date of invoice or 14 days after that Batch of
Decoders has been delivered.
Notwithstanding the foregoing, PBE will undertake all reasonable
commercial endeavours to ensure at all times that WTV can continue to meet
applicable to the planned date for the commercial launch of the Network
Services and roll out targets. WTV will inform PBE promptly in case of any
(anticipated) delay regarding such launch date, and PBE will inform WTV
promptly in case any delay is expected regarding any deliveries. In such
case, without prejudice to WTV's, PBE's and PPS' other rights and remedies
set forth herein, the parties will jointly work out a remedy programme
(including committed resources from both parties) within 10 days of
notification of the delay to WTV, in order to minimise disruption to WTV's
business and its rollout targets and to try to ensure efficient delivery
of the delayed Decoder Systems.
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
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If there is a Major Fault with more than 10% of a Batch of Decoders and/or
Decoder Systems, WTV is entitled to require PPS to withdraw affected or
suspected Decoders or Decoder Systems until the situation has been
analysed and a solution implemented for these Decoders or Decoder Systems.
In case PPS has drawn on more than 10% of the WTV existing pool of new
Decoders or Decoder Systems for replacement purposes, then such amount
overdrawn shall be deemed delayed for these purposes until PPS has
replaced such amount. The delay discounts set out in this Article 2.10
shall apply to each Batch of Decoders or Decoder Systems with a Major
Fault.
2.11 Homologation
Homologation of the Decoder Systems will be the responsibility of PBE
wherever necessary with the help and support of WTV at PBE's cost for out
of pocket expenses.
2.12 Smart Cards
PBE will order Smart Cards on behalf of WTV, to be bypacked with each
matching Decoder.
Serial number, initialisation and personalisation information are provided
by PBE to WTV as part of the CryptoWorks `security programme' attached in
Schedule 2.12 and in the LOT files to be separately supplied to WTV. PBE
will be responsible for delivery of Smart Cards pursuant to agreed
instructions. The Smart Cards will interface and work with the Decoders.
PBE shall or shall procure that the Smart Cards are manufactured and
prepersonalised irreversibly. The relevant personalisation data can be
changed by WTV via its own subscriber authorisation system. The Smart
Cards shall be prepersonalised by PBE by loading WTV specific system and
operational information on to the Smart Cards. PBE warrants that its
agreements with third party suppliers of components, parts or equipment
for manufacture of Smart Cards contain customary and appropriate
provisions relating to quality control.
2.12A Additional Smart Cards
WTV will hold an adequate number of Smart Cards at its subscriber
management centre for the purposes of any claim under the Smart Card
warranty set forth in Article 2.9. WTV may order additional Smart Cards
separately from Decoders. If WTV orders such Smart Cards, PBE agrees to
supply those Smart Cards at the agreed price specified in Article 2.8(b)
(plus separate transportation charges) and to deliver those Smart Cards
within 2 months for spare quantities. Normal quantities of Smart Cards are
to be supplied on the basis of a six months rolling forecast, with the
first 3 months firm and fixed ("Smart Card Forecast"). A complete swapout
of all Smart Cards can be accomplished within 6 months, provided same is
planned at least four months in advance. The Smart Cards will be at PBE's
risk until delivery to
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WTV in Poland. The Smart Cards so delivered will comply with the
Specification as agreed between the parties and carry the same warranty as
described for Smart Cards supplied as part of a Decoder System as set out
it Article 2.9.
If PBE receives a notice from WTV of a breach of the obligations in this
Article, PBE shall: (a) as a matter of urgency take all reasonable steps
to identify and remedy the problem causing the defective operation of the
Smart Cards; and (b) as soon as practically possible replace the defective
Smart Cards free of charge as set out in Article 2.9. PBE hereby warrants
that to the best of its knowledge, no successful hacking has taken place
of CryptoWorks as at the Execution Date.
If PBE fails to deliver the Smart Cards in accordance with the Smart Card
Forecast, delay discounts of [***]% ([***] per cent) for each week or part
thereof that the delay continues shall apply to the amount of Smart Cards
to be delivered in that week in accordance with the Smart Card Forecast.
The delayed discounts will be capped at a maximum of [***]% ([***] per
cent) of the total price of the delayed Smart Cards.
2.13 Spare parts and support
PBE guarantees the availability for sale of spare parts for the Decoder
Systems, or functionally equivalents suitable for replacement purposes,
for a period of 7 years from the last date of delivery of the respective
type of Decoder Systems. In order to induce WTV to enter this Agreement,
PBE has agreed to fully support the Decoder Systems in accordance with the
terms hereof and to provide solutions compatible with the Decoder System
if PBE upgrades any of its components.
Article 3
Decoder System testing and acceptance
3.1 Delivery of trial units
PBE shall deliver 200 Decoder Systems no later than April 6, 1998 to
Dealers the locations of which are to be specified by WTV and PPS in order
for PBE, PPS and WTV to jointly conduct end to end system testing to
ensure that the equipment installed at At Entertainment Limited's
transmission facility at its UK site ("Transmission Facility") and the
Decoder Systems interface and interoperate with each other and that the
digital television signals uplinked from the Transmission Facility are
receivable by the Decoders without any loss of signal or features.
3.2 Tests
Following production of the [***] Decoders, each of:
(a) [***] of the Decoder;
(b) [***] of the Decoder;
(c) [***] of the Decoder; and
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(d) the Decoder that has all the functionality and features set out in
the Specification,
shall be tested in accordance with this Article and Schedule 3.2.
The [***] and the Decoder Systems shall be tested with `live'
signals from the Philips digital compression program delivery system
("Equipment") installed at the Transmission Facility to ensure the Decoder
Systems are operating in compliance with the Specification and are capable
of receiving the live signal from the Equipment. The field trial
acceptance tests, will be executed in accordance with Schedule 3.2 and the
Delivery and Milestone Plan. The parties will jointly execute such
acceptance tests.
3.2A Final Acceptance of the Equipment
The parties agree that for the purposes of Article 4 of the Main
Agreement, the final acceptance testing of the Equipment will use the
[***] Decoder.
3.3 Notice of Rejection/Acceptance
Upon each test being finalised WTV must specify, if applicable, in writing
in reasonable detail the reasons why the Decoder Systems are not operating
in accordance with the Specification as set out in Schedule 1H or the live
signal from the Equipment ("Notice of Rejection"). Failure to issue a
Notice of Rejection within 10 days as from the end of such testing as
notified to WTV by PBE shall mean that Final Acceptance for those Decoder
Systems shall be deemed to have occurred. If a Final Notice of Rejection
is issued, PBE undertakes to investigate in a timely and efficient manner,
the shortcomings identified by WTV and to correct them as soon as
technically possible so that the Decoder Systems are operating in
accordance with the Specification and the live signal from the Equipment
in the UK (in this Article 3, said live signal is as specified in the Main
Agreement, Exhibit A). Upon PBE and WTV being satisfied all such
shortcomings identified by WTV in the Notice of Rejection have been
corrected, the parties shall repeat the final acceptance tests for those
Decoder Systems to ensure that the Decoder Systems are operating in
accordance with the Specification and the live signal from the Equipment.
If so, PBE shall issue the Final Acceptance Certificate. If WTV disputes
PBE right to issue the Final Acceptance Certificate, it shall have a
period of 5 Working Days to refer the matter to the dispute resolution
mechanisms set out under Article 24, otherwise the final acceptance
certificate for those Decoder Systems shall be binding upon it.
3.4 Engineering Change Procedure
During the Term of this Agreement, PBE undertakes to keep WTV informed
under appropriate confidentiality obligations of any new or improved
products or services that may result from its decoder systems activities
or digital video systems business and cooperate with WTV to make such
products or services available to WTV at then prevailing terms and
conditions. In order to ensure the good performance of the
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Decoder Systems installed and to be installed, and safeguard the
reputation of the parties hereto, any future technical issues (including
amendments to the Specification, the downloading of new software and
Future Products) shall be governed exclusively by the Engineering Change
Procedures set forth in Schedule 3.4 hereto.
WTV will ensure that PBE shall receive all material information regarding
future updates and upgrades to the Network Service, its technical signals
and any proposed changes to digital receivers simultaneously or at least
no later than other authorized manufacturers in order to ensure a level
playing field. Furthermore, WTV will communicate to PBE any technical
issues affecting other manufacturer(s) promptly if such issues could
affect the Decoders (System)s of PBE subject to any confidentiality
obligations owned to those other manufacturer(s).
3.5 Documentation
Except where intended to serve as instructions for use or advertising
purposes, all technical information in relation to Decoder Systems and
their maintenance are PBE proprietary, covered by PBE copyrights and
remain PBE property and may not be utilized or copied, reproduced,
transmitted or communicated to third parties without the prior written
consent of PBE. PBE hereby grants WTV a non-transferable (except to an
Affiliate), royalty-free license to use and translate the user
documentation of the Decoder Systems and any Updates thereto for use
within its business and for its Customers, without the right to grant
licenses or provide copies to third party (potential) competitors of
PBE/PPS.
PBE agrees to place in escrow at Ashurst Morris Crisp, Solicitors, a copy
of the technical maintenance documentation of the Decoders for internal
use by WTV only to be released to WTV's Director of Engineering &
Distribution if (i) a good faith warranty dispute arises the solution of
which requires resort to the documentation, or (ii) one of the events
listed in Article 18.3 occurs.
Article 4
Establishment of Special Department of PPS
4.1 DTH Centre
PPS shall establish and maintain in Warsaw, Poland, a special
direct-to-home department ("DTH Centre") by January 1, 1998 or within 3
weeks from the Execution Date, whichever is later, which shall handle all
PPS' matters related to the Decoder Systems, all services to be provided
to WTV in that regard and shall supervise and co-ordinate all activities
related to the responsibilities of PPS in Poland under this Agreement. The
DTH Centre shall be maintained during the Term.
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4.2 Staffing
Staffing of said DTH Centre will consist of (i) a full time Marketing and
Sales Manager (and if he is to be replaced, a new appointment only after
consultation with WTV) (ii) a Technical Manager and (iii) an assistant to
the MSM. This centre can draw on indirect personnel of PPS on a part-time
basis such as, but not limited to merchandising specialist (50%);
(b) 11 sales representatives (each at least 10%), one National Sales
Manager (5%);
(c) team of 5 logistics personnel (each at least 5%);
(d) one person at the PPS order desk (as needed);
(e) personnel at the PPS business administration (as needed);
(f) personnel at the PPS service department to organise and provide
support;
(g) one person (50%) at the technical helpdesk of PPS.
PPS agrees that:
(a) the number of its staff in the DTH Centre will be sufficient at all
times to ensure that it is able to comply with its obligations in
this Agreement; and
(b) all staff in the DTH Centre will be suitably qualified and act with
due care and skill at all times consistent with best Polish industry
standards.
Article 5
Distribution services to be provided
5.1 Logistics
PPS will receive Batches of the Decoder Systems from PBE in consignment as
from the date of delivery by PBE and PBE will provide transportation to a
PPS' appointed bonded warehouse, approved by WTV. PPS will provide all
other logistics services to WTV. PPS will provide Polish order desk
fulfillment, delivery and monitoring services and business administration
and documentation of the above, all in accordance with Schedule 5.1
hereto.
5.2 Sales/Rentals
Decoder Systems will be distributed by PPS to Dealers, with PPS acting as
agent for and on behalf of WTV on the standard terms and conditions as
agreed between WTV, PPS and each such Dealer.
5.3 PBE/WTV Guarantees
PPS obligations hereunder are guaranteed by the PBE Guarantee set forth in
Schedule 5.3A hereto. Payments to PBE and PPS are guaranteed by WTV's
ultimate
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parent At Entertainment Inc., as set forth in the Guarantee attached as
Schedule 5.3B hereto.
5.4 Collection of subscription fees and Payment of Dealer
PPS will procure that the Dealer:
(a) collects the subscription fee from the Customer when the Customer
signs the Subscription Agreement; and
(b) remits the subscription fee to PPS as agreed by WTV and PPS.
PPS and WTV agree that the Dealers will invoice WTV the Polish Zloties
equivalent of the Dealer's commission and fees for the Installation once a
completed Subscription Agreement and installment protocol has been sent by
the Dealer to PPS on behalf of WTV by courier or registered mail. The
amounts payable in accordance with this Article will be payable by WTV
within 30 days of receipt of the Subscription Agreement and instalment
protocol.
Article 6
Payment for services
6.1 Payments
Payment by WTV to PPS for the services to be provided by PPS as listed in
Schedules 2.9A, 2.9B and 5.1 will be made in accordance with the payment
terms and conditions set forth below.
a. [***] USD prepayment (based on [***] USD x total April 1998
quantities of [***]) to be paid on the Execution Date.
b. [***] USD (based on [***] USD x total May 1998 quantities of [***])
to be paid in the first week of May 1998.
c. [***] USD (based on [***] USD x total June 1998 quantities of [***])
to be paid in the first week of June 1998.
d. Further monthly payments (for services covering all the Agreed
Amount) will be paid in accordance with the Forecast subject to the
following procedure:
[***]% of the total monthly payment (based on [***] USD x the fixed
quantity for that month) will be invoiced at the end of the
preceding month, such invoice being payable within 30 days of date
of invoice.
- the remaining [***]% will be payable within 14 days after
receipt of an invoice by WTV from PPS confirming the completed
Installation for a Customer who has entered into a Subscription
Agreement with WTV, or no later than six months after delivery of
the Decoder Systems to the PPS Warehouse, whichever is first.
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
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6.2 deleted intentionally
6.3 Taxes
Any and all value added taxes and any other taxes, if any (other than
corporate tax levied on PBE and PPS), and/or (import) duties as applicable
by law are not included in the fees payable in accordance with article 6
and WTV agrees to pay any such taxes and duties.
6.4 Currency
All amounts for services to be paid to PPS shall be due and payable by WTV
in Polish Zloties against the United States Dollar value agreed herein.
The exchange rate for payments to be made in Zloties will be the rate
published by the National Bank of Poland on the date of payment.
6.5 Bank
All payments shall be made by direct transfer to the bank indicated by PPS
on the invoices with all costs of the transaction paid by WTV.
6.6 Delay
All PPS invoices are due 30 days as from the date of invoice. In case WTV
fails to pay the amounts due within the agreed period and they are not
subject to a good faith dispute, interest will be due by WTV at the rate
of [***] ([***]) percent per month on the outstanding amount for which an
invoice has been issued until such amount is paid, without any notice of
default being required.
6.7 Setoff
WTV is entitled to set off any liquidated damages it is entitled to from
PPS on the basis of Article 2.10 (delivery delays) against any amount
payable on the basis of Article 6.
6.8 Audits
PPS shall maintain true and accurate books and records relating to the out
of pocket costs and expenses for transportation to the Polish warehouse
and Polish customs clearance administration costs as listed in Schedule
5.1 and charged to WTV during the Term and for the period set by Polish
law and regulations following termination. WTV shall have the right twice
a year during a period of one year following its receipt from PPS of
invoices for costs and expenses to be paid hereunder to cause such
information to be audited, inspected and examined by an accounting firm of
international repute reasonably acceptable to WTV and PPS (the "Auditor")
to determine that the amounts invoiced to WTV were correct. PPS and WTV
acknowledge that any one of the "Big 6" accounting firms is acceptable.
Any information acquired during the course of any such examination shall
be and remain
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
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strictly confidential and shall not be disclosed to any person or entity,
except the results thereof to PPS and WTV, or otherwise required by law,
governmental order or regulation, or by any order of any court of
competent jurisdiction or for dispute resolution in accordance with
Article 24 hereof (provided that the Auditor shall have immediately
notified both parties in writing of, and supplied PPS with a copy of such
order, and take, and/or cooperate with both in taking, all reasonable
steps to protect such confidential information), or as specifically agreed
in writing by WTV, PBE and PPS. PPS agrees to cooperate with the Auditor
including giving the Auditor reasonable access to relevant books and
records, and using reasonable endeavors to ensure relevant staff and
management are available if required. If, as a result of the examination,
the Auditor identifies in the Auditor's professional judgement that costs
and expenses charged deviate 5% or more from the information so audited,
the Auditor shall thereupon notify both parties of the existence and
identity of such differences. If the result of the audit concludes that
WTV has over-paid for costs and expenses, PPS shall issue a credit note
for the amount of the overpayment accompanied by an appropriate
reimbursement, with interest charged at a rate of 3% above LIBOR on the
amount of the overpayment, within 28 days of the Auditor's notification.
If the agreement has been terminated or has expired, PPS shall pay WTV the
amount of the overpayment within 30 days of the Auditor's notification. If
the result of the audit concludes that WTV has under-paid for costs and
expenses, PPS shall issue a debit note for the amount of the underpayment,
to be paid within 30 days thereof. The fees of the Auditor shall be borne
by PPS only in case an overpayment by WTV of 5% or more.
Article 7
Exclusivity, Software licenses and Escrow
7.1 Exclusivity
The parties hereto agree that they wish to develop the Polish digital
television market together on the exclusive basis as described below. To
this end and subject to the terms of this Agreement, WTV will purchase the
Agreed Amount exclusively from PBE no later than September 1, 1999. WTV
will not allow a competing product to be sold, rented or used with its
Network Service until the Agreed Amount of Decoder Systems have been paid
for. PBE will not manufacture or distribute digital receivers/decoders
under a Philips brand in or for use in Poland for any person other than
WTV and PPS will not distribute any digital receiver/decoder other than
the Decoder Systems until WTV has sold subscriptions equal to the Agreed
Amount for its Network Service, or September 1, 1999, whichever is the
earlier. PBE grants WTV an exclusive licence of the CryptoWorks
technology in Poland during the Term. If PBE confirms by documented tests
that is technically impossible for a smart card or other decryption device
using CryptoWorks other than a Smart Card to authorize and enable
Customers or other third parties to view the
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Network Service or any third party service using a Decoder, the
licence of CryptoWorks shall become non-exclusive. If for any
reason PPS or PBE or an Affiliate of PBE or PPS in Poland does
manufacture or distribute (or allow its Dealers in Poland to
distribute) digital receivers/decoders under a Philips brand in
the Territory for any person other than WTV before WTV has bought
the Agreed Amount of Decoder Systems, then (i) WTV's obligation
to buy the Agreed Amount of Decoder Systems from PBE shall be
reduced on a one-for-one basis for each Decoder System manufactured
or distributed for that other person and (ii) WTV's obligation
not to allow a competing product to be sold or used with its
Network Services shall cease. If this occurs, PBE agrees to
licence third party manufacturers in accordance with Article 7.8
in good faith. As from January 1, 1999 until January 1, 2001, the
maximum number of licensed manufacturers with whom WTV may
co-operate regarding the provision of decoder systems and other
equipment required for reception of the Network Services in
Poland will be no more than 3 (three). PBE and PPS acknowledge
that there will be no restriction on the number of licensed
manufacturers that WTV may cooperate with or contract with after
January 1, 2001. PBE and PPS acknowledge that WTV shall be
entitled to negotiate as from September 1, 1998 onwards the terms
and conditions of agreements with third party:
(a) distributors (other than Dealers) for the distribution of the
Decoder Systems or third party decoder systems; and
(b) manufacturers for the manufacture of decoders, smart cards and/or
ODUs,
for distribution of decoder systems to commence on September 1, 1999 or
earlier in accordance with this agreement.
7.2 Licence
Software shall be made available as part of a Decoder System and shall not
become the property of the Customer or WTV, regardless of whether it was
or was not developed specifically for use by the WTV. No rights to any
intellectual property residing in the Software, its documentation, or any
data furnished hereunder, if any, are granted except the right to use such
Software only in the operation, continuous downloading and use of said
Decoder Systems. Subject to the fulfilment of the terms and conditions
contained herein, PBE hereby grants to WTV (and in case of a sale or
rental by WTV: the right to grant sublicenses to WTV's Customers, which
sublicense includes the WTV obligations set forth herein) a fully paid up
and non-exclusive license to use the Software in the Decoder Systems for
operating same in perpetuity ("License").
7.3 License fees
The License fees for the Software are listed in Article 2.8(c).
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7.4 Reservations
(a) The Software and any copies thereof and any intellectual property
rights related thereto shall at all times remain the sole and
exclusive property of PBE (unless otherwise indicated, e.g. third
party software).
(b) WTV acknowledges that the Software is proprietary to PBE and that
PBE may suffer economic harm if the Software is made available to
third parties other than as authorised by PBE. WTV agrees not to
disclose, transfer, assign or make available the Software or copies
thereof, in any form, in whole or in part, to any other party,
person or entity (other than (i) in the regular sale or rental of
Decoder Systems to Customers and (ii) for use by its and its
Affiliates' employees, agents and subcontractors on a need-to-use
basis) without the prior written consent of PBE, which shall not be
unreasonably withheld or delayed.
(c) The Software shall be used by WTV or its respective Customer only
with the Decoder System. Each Subscription Agreement will contain
adequate Software license conditions protecting PBE's rights to the
Software and restrictions on use set forth herein.
(d) WTV may copy or have 1 (one) copy of the Software available in
machine readable form for backup/archival purposes only as is
necessary to support WTV's own use of the Software on the Decoder
System. WTV agrees not to copy or otherwise reproduce the Software
or any part thereof for other purposes without prior written
authorisation from PBE. In as far as copying is allowed under this
License, WTV shall not erase, delete or otherwise remove PBE'
copyright notice and other legend(s), if any, contained on the
Software to such reproductions or copies. All restrictions in this
License relating to the use and disclosure of the Software shall
apply to any such reproduction or copies of the Software. WTV shall
only use the Software for the purpose(s) agreed and shall not for
example rent, electronically distribute (except as set out in this
agreement) or timeshare the Software or market the Software by
interactive cable or remote processing services or otherwise
distribute the Software other than as specified herein or agreed
between the parties (for example for downloading Updates or Upgrades
to the Software).
(e) The Software (other than documentation) is to be used in machine
readable form only.
(f) WTV shall not cause or permit the Software, or any part thereof, to
be used by any person other than either PBE/PPS personnel or the
officers, employees, and agents of WTV engaged in the business
activities of WTV and the Customers. WTV agrees that it shall cause
each person who uses the
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Software to adhere in particular to the terms and conditions
specified in Articles 7.4 and 7.5 hereof.
7.5 Modifications and Improvements
(a) WTV shall not modify, adapt, translate, reverse engineer, decompile,
disassemble or rent out the Software, or create derivative works
based on the Software or have such work carried out without the
prior written consent of PBE, which shall not be unreasonably
withheld or delayed, unless authorised by law. PBE agrees:
(i) to provide interface specifications and licenses to such
Decoder System's interfaces in a timely manner, free of
charge both to WTV and its system integrator for use with
the Decoder Systems only; and
(ii) to communicate directly, and where requested, co-operate in
good faith on a time and materials basis with WTV's systems
provider regarding operational interfaces between the Decoder
System and WTV's other Systems as notified to PBE, provided
customary non disclosure agreements and licenses, if any,
have been executed.
(b) If the Software is modified in any manner by anyone other than
PBE/PPS, their authorised repairers or otherwise authorized by PBE,
or combined with third party software products not previously
approved by PBE, all warranties associated with the Software and
Decoder System(s) shall become null and void as from the moment of
such modification, provided always that WTV, having been given 30
days to rectify the circumstances causing the warranties to become
null and void has failed to rectify such circumstances. PBE agrees
to give WTV all reasonable assistance including testing (and
approval, at PBE's sole discretion) or correcting unauthorised
modifications and testing (and approval, at PBE's sole discretion),
where appropriate, previously non-approved products or recommending
alternative products.
(c) PBE may, from time to time, create and, if created, shall license
Updates and Upgrades of the Software. PBE shall make available such
Updates and Upgrades of the Software to WTV on reasonable terms at
PBE' published rates, less any discounts applicable in any service
agreement for the Decoder Systems, if any. Unless explicitly agreed
otherwise, delivery of the said Software to WTV will automatically
be subject to the terms and conditions of this Agreement where
appropriate.
7.6 Term and Termination
This License shall continue for a long as WTV or its Customers utilises
the Decoder Systems except that PBE may terminate any licence granted to
WTV for Decoders to be delivered after the date of termination upon thirty
(30) days written notice to WTV in the event of any breach by WTV by WTV
of any material term, covenant or
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condition contained herein, provided PBE has given WTV a written warning
specifying such breach and WTV has failed to remedy such breach within
fifteen (15) Working Days from the date of such notice or within such
longer period as may be specified in said notice. Such termination shall
not relieve WTV of any of its obligations incurred prior to such
termination, and shall not impair any of PBE's rights which have accrued
prior to such date. WTV shall return the Software and any copies thereof
and documentation relating thereto to PBE at WTV's expense immediately
upon termination of this licence The covenants of WTV contained in
Articles 7.4 & 7.5 hereof survive the termination of this licence.
7.7 Miscellaneous
Whenever PBE has acquired the (rights to use and/or sublicense parts of
the) Software from a third party supplier/vendor (hereinafter "Supplier")
by way of license or other transaction in which Supplier retains rights to
the Software, any reference to PBE in this Article 7 shall be deemed to be
a reference to PBE and/or Supplier, wherever applicable.
7.8 CryptoWorks sublicensing and future products
PBE will provide a license on reasonable and non-discriminatory terms and
conditions for its CryptoWorks rights and technology (including Updates
and Upgrades made available to WTV) to allow a third party to incorporate
CryptoWorks into a third party's own reception and de-encryption equipment
and provide support in accordance with standard terms and conditions to a
CryptoWorks sublicensee when WTV decides to authorize other suppliers of
reception arid de-encryption equipment for its Network Service when the
exclusivity period described in Article 7.1 ends or in accordance with
Article 2.6C or if a Force Majeure event occurs. It is understood between
the parties that in order to induce PBE to enter this CCA WTV ensures that
it will discuss first with PBE prior to such discussions with third
parties the possibility of PBE becoming one of the (3) initial
manufacturers of future generation set top boxes/decoders as well,
provided PBE has not committed any material breach under this Agreement.
The parties hereto express their intention to include in such discussions
the development of future set top boxes/decoders which may include a
separated or integrated modem, added functionality and/or data or
broadcast facilities
7.9 Escrow
PBE shall place the source code of the Software and any source code for
Updates or Upgrades to the Software, to the extent proprietary to PBE,
into escrow with Nauta Dutilh notary public as escrow agent (except for
the CryptoWorks part, which will be deposited with two different escrow
agents on the basis of the Security Services Agreement. The specification
for CryptoWorks shall be deposited with Ashurst Morris Crisp. If PBE is
unable or unwilling to fulfil its obligations with respect to the Software
for any reason and such is not remedied by PBE within 30 days of
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notice to do so from WTV, WTV shall be entitled to access such source
codes directly for executing such obligations itself. WTV shall pay the
reasonable costs of the escrow arrangement. Within 30 days of the date of
this Agreement, PBE and WTV agree to negotiate in good faith and execute
separate agreements relating to the escrow arrangements on reasonable
terms.
Article 8
Dealers and Points of Sale
8.1 Authorised Channels of Distribution
Subject to the terms of this Agreement, WTV appoints PPS as its agent to
Distribute in accordance with the terms hereof the Decoder Systems and
subscriptions to the Network Service via its existing and/or newly
acquired Dealer network in Poland. PPS will publicly announce the launch
of the Decoder Systems, contact selected Dealers and sign separate
distribution agreements with them and WTV for Distribution of the Decoder
Systems and the sale of subscriptions to the Network Service, all in
accordance with the Delivery and Milestone Plan. PPS agrees to use all
reasonable commercial efforts to Distribute the Decoder Systems and
Network Service in Poland so as to maximise the number of Customers to the
Network Service.
8.2 Qualification of Dealers and Installers
8.2.1 PPS shall evaluate all retailers under consideration to become
Dealers of Decoder Systems. PPS shall have an established network of
a 1,000 Points of Sale in accordance with PPS's rollout plan as
follows: [***] by April 4, 1998; [***] by April 25,1998; [***] by
May 16, 1998; [***] by June 1,1998; a detailed logistics plan will
be worked out by PPS and provided to WTV for approval 15 days
after Execution Date and in any event no later than March 30th,
1998.
8.2.2 PPS shall train Dealers with WTV's support, under a training program
agreed between the parties in accordance with Article 10 below.
8.2.3 Each Dealer shall have the capability to execute or have executed on
its behalf Installation of the Decoder Systems. Each Installer must
undergo an Installation training program to be provided by PPS.
8.3 Point of Sale facilities
The following materials and services will be made available by WTV to PPS:
8.3.1 for demonstration Decoder Systems and other Decoder System Products
(including a free of charge Subscription to be provided by WTV to
each of the Points of Sale);
8.3.2 WTV subscription forms at each Point of Sale;
8.3.3 training for sales assistants to service potential Customers;
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
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8.3.4 advertisements of Network Service and the Decoder Systems, Point of
Sale and merchandising materials, take-one brochures, etc. in
accordance with the plan for advertising and promotion to as agreed
between the parties and developed pursuant to Article 17.
8.3.5 merchandising stands consisting of: a stand (structure) and Decoder
System in an agreed in store position with supporting promotional
material. This is to be provided to the Dealer at cost price by PPS
for WTV's account.
WTV shall be entitled to access the Point of Sale to support or
undertake additional sale, marketing or promotional activities at
each Point of Sale in co-operation with PPS.
8.4 Inspection of Dealers
From time to time, WTV and PPS may jointly conduct spot checks, audits and
inspections of the premises of any Point of Sale being used to promote and
sell subscriptions to the Network Service to ensure compliance with this
Agreement. However, PPS may decide to decline being present at such
visits. PPS shall procure that WTV has an audit right and the right to
conduct spot checks on Dealers regarding compliance with the agreement
between PPS and the Dealer. PPS and PBE acknowledge that WTV may employ a
team of sales people who will promote the Network Service which will
include:
(a) inspecting Dealers;
(b) training Dealers, both formally and on an informal basis;
(c) reviewing sales figures, stock levels and Customer service levels
for Dealers;
(d) assisting Dealers with in-store promotions and selling of Decoder
Systems; and
(e) organising and running marketing and promotional events.
8.5 Establishment of Installation appointment at time of sale/rental
At the time of sale/rental of a Decoder System at the premises of a
Dealer, the Dealer shall set up an appointment for an Installer to install
the Decoder System at the Customer's premises.
8.6 Amount of Dealers
8.6(A) In case in certain areas WTV is of the opinion that insufficient or
malperforming Points of Sale exist, or in case WTV wishes Points of Sale
to be added in certain geographical areas on the basis of demonstrable
customer demand which cannot be met within the targets agreed, PPS will
first offer such additional outlets to WTV; in case WTV declines same for
reasons to be agreed between the parties by 30 May 1998, WTV may
distribute the Decoder Systems in the Territory through third party
dealers/distributors selected by WTV and approved beforehand by PPS, which
approval will not be unreasonably withheld or delayed and PPS will
cooperate fully and expeditiously with WTV to enable such third party
distribution, such cooperation
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to include (without limitation) auditing, qualifying and authorising such
dealers and subsequent delivery of Decoder Systems to such third party
dealers/distributors who must meet the criteria set forth in Schedule 8.6.
8.6(B) During the Term, WTV may nominate a person to become a Dealer. PPS agrees
to consider that person for appointment as a Dealer provided that person
meets the criteria set forth in Schedule 8.6. Until April 1999, PPS may or
may not appoint that person as a Dealer in its absolute discretion. The
parties acknowledge that PPS may change or amend the criteria (or grant
waivers in exceptional cases) and WTV agrees that these further criteria
may be applied to such persons provided those criteria are reasonable and
are uniformly applied by PPS to all persons appointed to distribute PPS
consumer electronic products before their appointment as PPS dealers.
8.6(C) If a digital multichannel pay television service is introduced which
competes with the Decoders and/or Network Service, the parties agree to
enter good faith negotiations to discuss the distribution structure of the
Network Service and the Decoders by PPS in Poland, including, if
necessary, appointing additional Dealers and/or removal of Dealers, all
within the requirements of Polish law.
Article 9
Initial Distribution
9.1 Preparedness for Initial Distribution
On April 18, 1998 PPS and the initial Dealers nominated by PPS and
approved by WTV shall be prepared for the initial market release of the
Decoder Systems and the launch of the Network Service. Such preparedness
shall include the following:
9.1.1 a list of Installers available at each Point of Sale's premises;
9.1.2 sufficient support for such Installers to service Customers;
9.1.3 Decoder Systems and sufficient other Decoder System Products
available to the Dealers in accordance with the Forecast to be
provided by WTV to PBE and PPS;
9.1.4 briefing the Dealer and their sales staff on the details of the
Network Service and WTV sales strategy.
Article 10
Training
10.1 Provision of Training
PPS shall provide (with support from WTV regarding sales training covering
the Network Service) the following training for the staff of PPS,
Dealers/Points of Sale, Installers, WTV representatives and certain third
parties.
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10.1.1 Training in sales and demonstration of the Decoder Systems and
Network Service to individual Customers shall be provided
by PPS to:
(a) At least one(1) representative from each Dealer and Installer;
(b) The direct sales persons of PPS at the DTH Centre.
10.1.2 Training in Installation and the demonstration of Decoder Systems
and Network Service shall be provided by PPS to:
(a) all relevant persons of PPS and Dealers; and
(b) the Installers who will be performing the Installation.
PPS shall give WTV:
(a) copies of all training materials, and
(b) an outline of training to be conducted, in accordance with
this Article for WTV's prior approval. WTV may attend any
training sessions conducted by PPS. PPS agrees to notify
WTV of the time and location of the training sessions in a
timely manner.
10.2 Timing
The initial training of the staff of Dealers and Installers, PPS'
promotion team and WTV representatives will begin once 5 pre-production
([***]) Decoder Systems to be delivered before 4 March 1998 are
available. PPS shall use its reasonable commercial efforts to successfully
complete training as soon as possible thereafter commensurate with the
rollout plan for Dealers in Article 8.2.1. PPS shall conduct training for
all new Dealers, Installers and others as agreed with WTV on an ongoing
basis.
Article II
Installation
11.1 Installation provided
Each Customer will be referred to an Installer procured by PPS, or
procured by the Dealer in accordance with the agreement between the Dealer
and PPS who shall perform Installation of the Decoder System free of
additional charge in accordance with the Installation Specification. PPS
shall remain primarily responsible to WTV for the Installation and the
performance of the Dealers and Installers.
11.2 Installation Accessories
The Dealer and Installer are responsible to ensure that adequate and
appropriate quantities and types of Installation Accessories shall be
available at all Installer's premises at Installer's expense. PPS shall
ensure such requirements are incorporated into its agreement with Dealers.
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
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11.3 Installation by Customer or unauthorised installers
In the event that a Customer has installed the Decoder System himself, or
have same carried out by an unauthorised installer, or in case the
Customer declines to have installed the WTV/Philips', branded ODU, such
Customer (i) shall be charged at standard rates for any subsequent call
for service as a result of improper installation by the Customer; and (ii)
may lose certain protections under the Subscriber Agreement. The 12 month
warranty from PPS on the Decoder in Article 2.9 shall continue to apply.
11.4 Installation work orders
An installation work order to be created by PPS must be completed by both
the Installer and Customer. Five (5) copies of each such order shall be
completed in full, and distributed as follows: one to be sent by the
Installer within 48 hours of completion to (i) the respective Dealer, (ii)
to WTV, and (iii) to PPS; one copy is to be retained by the Customer and
one by the Installer.
11.5 ODU Amount
The parties acknowledge that not all Installations will include an ODU
because of:
(a) Installation of Decoders at MDUs, where only one ODU is required;
(b) Installation of Decoders at cable head ends; and
(c) where Customers decline to take an ODU.
The ODU Amount will be calculated by taking 500,000 units as the starting
point and subtracting ODU's on the basis of the factors set out in this
Article; however, WTV warrants it will purchase at least [***] ODUs
during the Term hereof, less any amounts subtracted on the basis of
Article 2.6B.
Article 12
Customer Support
12.1 PPS' Technical team
Unless otherwise agreed in writing between the parties, PPS will arrange
for a team of an adequate number of technicians at the DTH Centre to (i)
receive calls from the Wizja TV Call Centre in case of Decoder System
warranty requests and technical assistance, and (ii) provide assistance to
the Dealers and Installers. Such technical team will operate under the
direction of PPS.
PPS shall train one or more of WTV's technical staff in the use of the
Decoder System as soon as possible after the Execution Date.
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
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12.2 Customer service and support telephone line
WTV will provide or procure the provision of an operational Wizja TV Call
Centre service and support telephone line at WTV's call center as long as
it makes good business sense. Such customer service will be staffed by a
sufficient number of trained operators to provide a sufficient level of
operational and technical service and support. In case of warranty claims
which cannot be handled orally by the Call Centre, the Call Centre will
forward Customer requests for warranty repairs to the respective Dealer
who initially signed up the Customer.
12.3 PPS's obligation to repair and perform maintenance
Pursuant to its warranty obligations, PPS shall be responsible for all
repair services of Decoders and Decoder Systems distributed by PPS,
through its service centre in Poland all as described in Schedule 2.9B.
12.3A Mutual Indemnity
PPS shall indemnify and hold WTV, its employees and agents harmless
against any claim for bodily injury, damage to property and/or death or a
claim by a third party relating to a breach of any law or regulation
relating to the Distribution and Installation of the Decoder Systems by or
on behalf of PPS made against or incurred by WTV and its employees and
other agents of WTV as far as such claims are due to any fault or failure
to perform by PPS or its personnel, Dealers, Installers or agents in the
Distribution or Installation of Decoder Systems, provided that WTV:
(i) gives notice to PPS of any claim or breach as soon as practicable
after becoming aware of it;
(ii) gives PPS the sole conduct of the defence of any claim or breach;
(iii) agrees to provide assistance reasonably requested by PPS for the
conduct of the defence at PPS's cost.
PPS agrees to keep WTV informed about the progress of the defence of the
claim or breach. PPS liability shall be limited, regardless of the number
of claims, up to the maximum of the total amount received by PPS for
services rendered hereunder (other than a claim for bodily injury and/or
death where liability is unlimited). In no event will PPS be liable for
any lost profits, lost savings, incidental, indirect, consequential or
other economic damages, even if PPS has been advised of the possibility
thereof.
Likewise, WTV shall indemnify and hold PPS and its employees, Dealers and
other agents harmless against any claim for bodily injury, damage to
property and/or death or a claim by a third party relating to the breach
of any law or regulation relating to the Distribution and Installation of
the Decoder Systems made against or incurred by either of them as far as
such claims are due to any fault or failure to perform by WTV, its
personnel or agents, provided that such party:
(i) gives notice to WTV of any claim or breach as soon as practicable
after becoming aware of it;
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(ii) gives WTV the sole conduct of the defence of any claim or breach;
(iii) agrees to provide assistance reasonably requested by WTV for the
conduct of the defence at WTV's cost.
WTV agrees to keep the respective party informed about the progress of the
defence of the claim or breach. WTV's liability shall be limited,
regardless of the number of claims, up to the maximum of the total amount
paid by WTV for services rendered by PPS hereunder (other than a claim for
bodily injury and/or death where liability is unlimited). In no event will
WTV be liable for any lost profits, lost savings, incidental, indirect,
consequential or other economic damages, even if WTV has been advised of
the possibility thereof.
Article 13
Network Service by WTV
13.1 Control of content
To the extent applicable, WTV will comply with Polish law and WTV (and/or
its Affiliates) shall have control over the programming and content of the
Network Service.
13.2 Subscription Agreement
Dealers shall only sell, rent or deliver Decoder Systems to Customers who
have executed a Subscription Agreement. WTV and PPS shall jointly prepare
such Subscription Agreement and provide originals to PPS for distribution
to the Points of Sale. The recommended retail/rental price of Decoder
Systems including Subscription and Installation services shall be set by
WTV and changed from time to time during the Term with a one month's
notification to PBE and PPS. Subject to full compliance by PBE and PPS,
where practical, with their respective obligations, WTV or its Affiliate
shall be responsible for ensuring that the provision of the Network
Service and the use by Customers of Decoder Systems in Poland do not
violate Polish law relating to broadcasting and viewing of the Network
Service.
13.3 Procedure for completing Subscription Agreement at Dealer facilities
The following procedures shall apply to the completion of a Subscription
Agreement at Point of Sale's facilities. Four (4) copies of each
Subscription Agreement shall be completed. One copy shall be retained by
the Dealer; one copy shall be provided to the Customer; one copy shall be
returned to PPS and one copy shall be provided to WTV by the Dealer/Point
of Sale within 48 hours from the completion of the Subscription Agreement
via means specified by WTV.
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Article 14
Use of WTV Trademarks by PPS/PBE
14.1 Grant
WTV or an Affiliate of WTV hereby grants or will grant to PBE and PPS
during the Term a non-exclusive, non-transferrable, royalty free
authorisation to use the trademarks, service marks, trade names, slogans
and other like property set forth in Schedule 14.1 (the "WTV Trademarks")
solely in connection with the Distribution of the Decoder Systems,
Decoders, ODUs and the Network Service in Poland. WTV shall have the right
in its sole discretion to add or delete WTV Trademarks. Any WTV Trademarks
added by WTV are hereby incorporated by reference into Schedule 14.1 and
shall be subject to the provisions of this Article 14.
14.2 Acknowledgement of Ownership
PBE and PPS acknowledge the ownership of the WTV Trademarks by WTV and
agree that they will do nothing, and will procure that the Dealers and
Installers do nothing, inconsistent with such ownership. PPS agrees to
assist WTV in recording this Agreement or other registered user agreement
with appropriate government authorities to ensure protection of the WTV
Trademarks. PBE and PPS agree that nothing in this Agreement shall give
PBE or PPS, or the Dealers or Installers any right, title or interest in
the WTV Trademarks, other than the right to use the WTV Trademarks in
accordance with this Agreement, or in any other trademarks, service marks,
trade names, slogans or other like property owned by or related to WTV.
PBE and PPS agree that they will not and will procure that the Dealers and
Installers do not attack the title of WTV to the WTV Trademarks or contest
the validity of the WTV Trademarks. PBE and PPS shall not and shall
procure that the Dealers and Installers do not attempt to register any of
the WTV Trademarks alone or as part of its own trademark or use as part of
a trading or company name, nor shall PBE or PPS use or attempt to register
any marks confusingly similar to the WTV Trademarks and they shall procure
that the Dealers and Installers will not use or attempt to register any
trademarks confusingly similar to the WTV Trademarks.
PBE and PPS agree to comply and to procure that Dealers and Installers
comply with all guidelines for use of the WTV Trademarks specified by WTV
from time to time and in particular agree to use the WTV Trademarks with
an acknowledgement of ownership by WTV.
14.3 Quality Control and WTV Approval
PBE and PPS agree that the Licensed Products and Materials on which PBE
and PPS use the WTV Trademarks shall be of high quality. PBE's and PPS's
shall only use WTV Trademarks on any Licensed Products or Materials, with
the prior written approval of such use. WTV shall approve PBE's or PPS's
use of the WTV Trademarks according to procedures to be mutually agreed
between the parties.
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From time to time upon WTV's reasonable request, PBE and PPS shall make
available samples of the Licensed Products and Materials for WTV's
inspection.
14.4 Placement of Trademark
All Licensed Products and Materials shall bear the WTV Trademarks in a
location, colour and size to be agreed, but always avoiding dual branding
of Decoders. PBE and PPS agree to report any suspected infringement of the
WTV Trademarks to WTV as soon as possible after that suspected
infringement comes to PBE or PPS's notice.
14.5 Rights upon termination
Upon termination of this Agreement, PBE and PPS agree to do the following:
14.5.1 discontinue all use of the WTV Trademarks and any mark confusingly
similar thereto in accordance with the terms hereof;
14.5.2 cooperate with WTV or its appointed agent to apply to the
appropriate authorities to cancel or note the termination of this
Agreement as recorded in any governmental records;
14.5.3 destroy or deliver to WTV all printed materials bearing any of the
WTV Trademarks without prejudice to Article 18.4; and
14.5.4 cooperate generally with WTV to ensure that all rights in the WTV
Trademarks and the goodwill connected therewith shall remain the
property of WTV.
Article 15
Use of the Philips Trademarks by WTV
15.1 Grant
PBE will ensure that WTV will be granted during the Term upon WTV'S
written request a non-exclusive, non-transferrable, royalty free
authorisation to use the trademarks, service marks, trade names, slogans
and other like property set forth in Schedule 15.1 (the "Philips
Trademarks") solely in connection with the Distribution of the Decoder
Systems, Decoders, ODUs and Network Service in territories agreed between
the parties. PBE shall have the right in its sole discretion to add or
delete Philips Trademarks. Any Philips Trademarks added by PBE are hereby
incorporated by reference into Schedule 15.1 and shall be subject to the
provisions of this Article 15.
The Decoder Systems shall bear the Philips Tradermarks.
15.2 Acknowledgement of Ownership
WTV acknowledges the ownership of Philips Trademarks by PBE and its
ultimate parent Philips Electronics N.V. and agrees that it will do
nothing inconsistent with such ownership. WTV agrees to assist PBE in
recording this Agreement or other registered user agreement with
appropriate government authorities. WTV agrees that
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nothing in this Agreement shall give WTV any right, title or interest in
Philips Trademarks, other than the right to use Philips trademarks in
accordance with this Agreement, or in any other trademarks, service marks,
trade names, slogans or other like property owned by or related to PBE or
Philips Electronics N.V.. WTV agrees that it will not attack the title of
Philips Electronics N.V. to Philips Trademarks or contest the validity of
the Philips Trademarks. WTV shall not attempt to register the Philips
Trademarks alone or as part of its own trademark, nor shall WTV use or
attempt to register any marks confusingly similar to the Philips
Trademarks. WTV agrees to comply with all guidelines for use of the
Philips Trademarks specified by PBE from time to time and in particular
agree to use the Philips Trademarks with an acknowledgement of ownership
by Philips.
15.3 Quality control and Philips Approval
Prior to WTV's use of any Philips Trademarks in advertising, marketing or
promotions, PPS and PBE must provide its written approval of such use. PPS
and PBE shall approve WTV's use of the Philips Trademarks according to
procedures to be mutually agreed between the parties. From time to time
upon PBE's reasonable request, WTV shall make available samples of the
advertising and promotional materials for PPS's inspection. WTV agrees to
report any suspected infringement of the Philips Trademarks to PBE as soon
as possible after that suspected infringement comes to WTV's notice.
15.4 Placement of Philips Trademarks
All promotional materials shall bear the Philips Trademarks in a location,
colour and size to be agreed, thereby always avoiding dual branding of the
Decoders.
15.5 Right upon Termination
Upon termination of this Agreement, WTV agrees to do the following:
15.5.1 immediately discontinue all use of the Philips Trademarks and any
mark confusingly similar thereto (without prejudice to WTV's right
to sell any existing stock of Decoder Systems);
15.5.2 cooperate with PBE and PPS or its appointed agent to apply to the
appropriate authorities to cancel or note the termination of this
Agreement as recorded in any governmental records;
15.5.3 destroy or deliver to PBE all printed materials bearing any of the
Philips Trademarks, without prejudicing WTV's right to use
existing printed materials as long as existing stock of Decoder
Systems are being sold; and
15.5.4 cooperate generally with PBE to ensure that all rights in the
Philips Trademarks and the goodwill connected therewith shall
remain the property of Philips Electronics N.V..
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Article 16
Advertising inserts
16.1 Packaging and Advertising Inserts
PBE shall allow WTV to designate and deliver a reasonable amount of
advertising materials, which materials PBE shall include within the
Decoder System packaging Procedures for the timely insertion of such
advertising materials shall be agreed between the parties before
production of Decoders begins or as soon as possible thereafter. All
materials to be provided to a prospective Customer are to indicate that
Customers are only authorised to rely on written statements and
information (i) provided or approved by WTV, and (ii) Decoder System user
manual.
Article 17
Marketing and Advertising
17.1 Advertising and Promotion Plan and Contributions
The parties will set up a joint promotional/advertising and marketing
campaign before November 1, 1998, which will be co-ordinated closely, and
to which each party will contribute NLG 1 million. These funds will be
used solely for the joint promotion of the Network Service and the Decoder
Systems combined, using both parties' branding and trademarks in
accordance with terms and conditions to be agreed.
In addition to the amount set out above, both PPS and WTV will
continuously discuss during the Term, possibilities and conditions under
which one party will include the other party's trademarks and offerings in
its advertising and promotion of their respective businesses in Poland.
Article 18
Term and Termination
18.1 Term
This Agreement is effective from the date first written above ("Effective
Date") and shall continue until (i) the Agreed Amount of Decoder Systems
have been purchased by WTV from PBE (ii) terminated earlier in accordance
with its terms, or (iii) extended by mutual consent in writing by duly
Authorised Representatives. Termination of this Agreement shall not
relieve a party of any rights and obligations which have accrued hereunder
or which are destined to survive or extend beyond the date of termination
or expiration by the terms of this Agreement, including but not limited to
rights and obligations contained in Articles 2.6C, 2.9, 2.12A, 2.13, 5.3,
6.6, 6.7, 6.8, 7.2-7.9,12.3, 13.2, 18.4, 18.5, 19, 20.3, 22, 23, 24 & 25
and Schedules: 2.9A, 2.9B & 2.12, will remain valid.
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18.2 Material breach
Either WTV on the one hand or PBE and PPS and on the other, may terminate
this Agreement in the event the other party fails to meet any of its
material obligations under this Agreement, provided that, where the breach
is capable of remedy, the former party has given written notice of the
alleged default to the failing party specifying the nature of the
("Notice"). Within 10 days of the date of the Notice ("the Notice
Period"), the Authorised Representatives shall meet to discuss the alleged
breach and shall use good faith efforts to agree on a programme to remedy
the breach ("Remedy Programme"). The Authorised Representatives must have
sufficient authority to agree the Remedy Programme which shall identify
the tasks required, responsibilities, the resources to be committed by one
or more of the parties and the timeframe for remedying the breach. If the
breach is not remedied within the timeframe agreed in the Remedy Programme
to the satisfaction of the notifying party, then termination shall become
effective at the end of a 45 (forty five) day period or on the date set
forth in such Notice which shall not be less than 45 days after the date
of the Notice. Failure by a party in default to meet within the Notice
Period or if failure of the parties to agree a Remedy Progamme within [14
days of the end of the Notice Period] shall constitute a material breach
entitling the party not in default to terminate the agreement on 14 days
notice to the other party.
For the purposes of Article 18.2 a reference to the other party means WTV
where PBE and/or PPS fails to meet its obligations and to PPS and/or PBE
where WTV fails to meet its obligations.
18.3 Insolvency
Either WTV on the one hand or PBE and PPS on the other, may terminate this
Agreement by written notice with immediate effect:
(a) in the event that the other party makes an assignment for the
benefit of creditors; or
(b) in the event that the other party becomes insolvent, or voluntary or
involuntary proceedings are instituted by or against such other
party under any applicable insolvency laws and such proceedings are
not terminated within ninety (90) days, or a receiver is appointed
for such party; or
(c) in the event that time other party ceases to trade as a going
concern; or
(d) if any event analogous to any of the foregoing under the law of any
jurisdiction has occurred in respect of the other party; or
(e) in the event that the control over the other party shall be
transferred to any other person other than those exercising control
at the time of the signing of this Agreement.
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For the purposes of the Article 18.3 a reference to the other party means
WTV where it is the subject of any of the events referred to in Articles
18.3 (a) to (e) and to PPS and/or PBE where either or both of them are
subject to such events.
18.4 Compensation
Upon termination of this Agreement by WTV other than pursuant to Articles
2.10, 18.2 or 18.3, or upon termination of this Agreement by PBE and PPS
pursuant to Article 18.2 or 18.3 or Article 20.1, PBE and PPS shall cease
performance under this Agreement and shall be entitled to receive from WTV
and WTV shall pay to PBE and PPS in full and final settlement within 30
days of termination:
(a) the total price for all then manufactured Decoder Systems pursuant
to this Agreement as well as the non-refundable cancellation costs
for any and all related components firmly ordered (non cancellable)
by PBE from its suppliers prior to termination, all of which shall
be delivered to WTV in Poland upon payment (including the ownership
thereof), title to the Decoder Systems and all related materials and
components specified in this 18.4(a) shall pass WTV on payment in
accordance with this Article; and
(b) the total price for all services which have been performed by PPS
pursuant to and in compliance with this Agreement prior to the date
of termination; and
(c) except in case of termination due to Force Majeure, [***] ([***])
percent of the value of the Decoders (i.e. the Agreed Amount for
Decoders only minus amount of units that have been paid for) with
respect to the uncompleted portion of the Agreed Amount as
liquidated damages and not as a penalty.
PBE and PPS agree to use reasonable commercial endeavours to minimise
costs and expenses payable by WTV in accordance with this Article.
18.5 Dealer and Manufacturer continuity
In case of termination by WTV on the basis of Articles 2.10, 18.2 or 18.3
or 20.1:
(a) WTV has the right to, all at its sole discretion, negotiate directly
with PPS' Dealers for continuation of the distribution by Dealers of
reception and de-encryption equipment for use with the Network
Service; and/or
(b) PBE agrees to cooperate with WTV and any third party manufacturer
set out in Schedule 20.3 in licensing on standard, non
discriminatory terms and conditions the Software to such third party
for manufacture of reception and de-encryption equipment and smart
cards with the Software.
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
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Article 19
Intellectual Property Rights
19.1 PBE shall defend at its own cost and expense any suit, claim or proceeding
brought by any third party against WTV and its Affiliates and their
respective directors and employees (hereinafter also referred to as
"Indemnified Party") in so far as such suit, claim or proceeding is based
on a claim that the Decoder Systems and/or Software or any part thereof
directly infringes any Intellectual Property Rights of such third party,
provided
(a) that the Indemnified Party shall notify PBE without undue delay of
any claim which would fall within the scope of this Article 19.1 and
provide PBE with all information which it may have or receive in
relation to such claim; and
(b) that the Indemnified Party turn over to PBE sole and exclusive
control of defending or settling the claim (but PBE shall keep the
Indemnified Party regularly informed of all developments in relation
to such claim); and
(c) that the Indemnified Party fully cooperate with PBE in relation to
the defence or settlement of the claim (and PBE shall reimburse the
Indemnified Party all its reasonable out of pocket expenses).
For these purposes, Intellectual Property Rights shall mean any and all
copyrights, trade marks, service marks, patents, design rights, mask
works, know-how, trade secrets and rights of use and all other rights of a
similar or related nature which may now or at any time subsist in any and
all parts of the world including all renewals, revisions or extensions.
19.2 In the event that in any such suit or proceeding the Decoder Systems
and/or Software or any part thereof ("the Infringing Decoder
Systems/Software") is held in a final judgement to constitute a direct
infringement of any third party's Intellectual Property Rights and/or the
use of any Infringing Decoder Systems/Software is enjoined by a court of
competent jurisdiction, PBE shall indemnify WTV for all its direct damages
and out-of-pocket expenses and shall also at PBE's option and expense and
with the result that as little disruption as is reasonably practicable is
caused to the Indemnified Party's business, either:
(a) procure for the Indemnified Party the right to continue using such
Infringing Decoder Systems/Software; or
(b) replace such Infringing Decoder Systems/Software with a
non-infringing product which performs substantially the same
functions and meets the Specification; or
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(c) modify such Infringing Decoder Systems/Software to become
non-infringing, provided always that it performs substantially the
same functions and meets the Specification;
PROVIDED ALWAYS that in case of a claim, suit or proceeding based on the
fact that Decoder Systems and/or Software either indirectly infringes any
third party's Intellectual Property Rights or contributes to such
infringement, PBE' liability to WTV shall be apportioned on the basis of
the extent to which the Decoder Systems and/or Software contributes to
such infringement.
19.3 If none of the alternatives in Article 19.2 is commercially available, PBE
shall at WTV'S option, either refund the Book Value of the Decoder Systems
or the Indemnified Party and PBE shall have good faith discussions with
the aim of arriving at a mutually acceptable solution provided that PBE
shall have the responsibility of paying, obtaining and effecting such
solution. "Book Value" for these purposes are defined as the larger of (a)
20% of the total cost per Decoder System incurred by WTV (covering the
Contract Price, PPS', Dealer's and Installer's commissions and import
duties), or (b) actual depreciated value (net book value) of the Decoder
Systems in the records of WTV (linear depreciation over four years).
19.4 PBE shall not be obliged to indemnify and shall not be liable for
infringement of any third party's Intellectual Property Rights:
(a) which are not infringed by the Decoder Systems and/or Software
supplied hereunder or any part thereof; and/or
(b) are infringed by the combination of the Decoder Systems supplied
hereunder with any other product not supplied by PBE; and/or
(c) covering the MPEG2 and DVB standards currently being finalised by
the respective international standardisation committees as
established for that purpose (except that PBE warrants to be
licensed and pay for any ensuing royalties to the MPEG LA, LLC/MPEG2
patent portfolio covering at present 33 essential patents); and/or
(d) covering the use of the Decoder Systems and/or Software supplied
hereunder for which (amount of) use such third party requires the
payment of royalties based on any factor other than an industry
common percentage of the Decoder Systems and/or Software Price
charged by PBE or for which use such third party refuses to grant a
license to PBE. PBE warrants and undertakes that to the best of its
knowledge as at the date of this Agreement:
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(i) no third party has claimed that it is entitled to payment of
royalties based on any other factor other than a percentage of the
Decoder Systems and/or Software Price; and
(ii) it has done nothing to cause its relevant rights, assignments,
transfers, licenses or other dealings to be terminated, suspended,
revoked or cancelled.
If a third party makes any claim that it is entitled to payment of
royalties based on any other factor other than a percentage of the Decoder
Systems and/or Software Price and/or refuses to grant PBE a license of the
intellectual property to which the claim relates after the date of this
Agreement, WTV agrees to pay the royalty fees to the third party provided
that:
(a) PBE agrees to take all reasonable and customary actions to resist
any such claims brought by any third party, at its own cost and PBE
agrees to keep WTV fully informed on the progress of its claim;
(b) if PBE is not taking all such actions to resist such third party
claims, WTV shall have the right to take such action as it seems
appropriate at PBE cost and if necessary in PBE's name to resist
such claims and PBE agrees to cooperate fully with WTV in this
regard.
19.5 The indemnities and obligations of PBE in this Article 19 shall not apply
to any claim, suit or proceeding based on an alleged infringement of any
third party's Intellectual Property Rights pertaining only to
off-the-shelf, finished products of another third party supplied to WTV
by PBE as part of the Decoder Systems and/or Software. However, PBE shall
wherever possible and otherwise does undertake to make all reasonable
endeavours to transfer or assign to WTV any indemnity rights PBE may have
received from such third party supplier. In case PBE is unable to assign
or transfer such rights, such products shall be treated as any other PBE
product under Article 19 (except this 19.5) PBE warrants that to the best
of its knowledge there has not been and there is no claim, suit or
proceeding of infringement of any third party's Intellectual Property
Rights relating to Decoders and Smart Cards.
19.6 Furthermore, PBE shall not be obliged to defend against and shall not be
liable for infringement of any third party's Intellectual Property Rights
arising from compliance with WTV's written technical design drawings, if
any. The parties acknowledge that the Specification does not contain any
WTV technical design drawings. WTV shall indemnify PBE against any award
of damages or costs for such infringement and shall reimburse all
reasonable costs incurred by PBE in defending any suit or proceeding for
such infringement, provided that PBE gives WTV prompt notice in writing of
any such suit or proceeding for infringement and provides WTV with
information which it may have or receive in relation to such infringement.
WTV shall
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have full authority to solely and exclusively conduct the defence and
settlement thereof and PBE agrees to give WTV full assistance and
cooperation in said defence.
19.7 PBEs liability under this Article shall under no circumstances exceed a
maximum amount equal to the value of the Decoder Systems and/or Software
purchased by WTV pursuant to this Agreement and furthermore Articles 19.1
to 19.6 inclusive shall not apply to any claims of which notice has not
been received by the relevant party within the period of five (5) years
from delivery of a Decoder that meets the Specification.
19.8 THE FOREGOING STATES THE ENTIRE LIABILITY OF PBE IN CONNECTION WITH THE
INFRINGEMENT OF THIRD PARTY'S INTELLECTUAL PROPERTY RIGHTS BY THE DECODER
SYSTEMS AND/OR SOFTWARE SUPPLIED BY PBE HEREUNDER AND EXCEPT AS STATED
HEREABOVE, PBE SHALL NOT BE LIABLE FOR ANY OTHER LOSS OR DAMAGE OF ANY
KIND WHATSOEVER, INCLUDING ANY INCIDENTAL, INDIRECT, SPECIAL OR
CONSEQUENTIAL LOSS OR DAMAGES, SUFFERED OR INCURRED BY THE INDEMNIFIED
PARTY OR ITS CUSTOMERS IN CONNECTION WITH THE INFRINGEMENT OF ANY THIRD
PARTY'S INTELLECTUAL PROPERTY RIGHTS.
Article 20
Force Majeure
20.1 Definition
For the purpose of this Agreement Force Majeure shall mean any
circumstances or occurrences beyond a party's reasonable control,
including but not limited to acts of God, fires, floods, epidemics, wars,
insurrection, strikes involving a third party, satellite or satellite
transponder failure and/or degradation (and if no reasonably practicable
alternative is available), and governmental laws, rules and regulations.
20.2 Notice
If the performance of this Agreement is prevented or delayed by reason of
Force Majeure, the party whose performance is prevented or delayed shall
give prompt written notice to the other parties of the event and the
likely duration of the delay and shall be excused from performance to the
extent delayed or prevented by Force Majeure without being liable for any
damages resulting therefrom, provided that the party whose performance is
prevented or delayed shall take reasonable steps to avoid or remove such
causes of non-performance and shall continue performance whenever and to
the extent such causes are removed. In the event a party's performance
suffers from Force Majeure, WTV's payment obligation hereunder shall be
suspended for the period of time that performance is affected.
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20.3 Right of termination
However, if it can be reasonably expected that the performance shall be
interrupted for more than 3 (three) months due to Force Majeure, the party
receiving notice under Article 20.2 shall have the right to terminate, by
written notice to the other parties, any portion of this Agreement
covering the delayed performance and the obligations and liabilities of
all parties with respect to such portion of the agreement shall thereupon
lapse and terminate. In the event of termination as a result of Force
Majeure, PBE shall and does hereby grant to WTV a non-exclusive license
without the right to grant sublicenses under all PBE's Intellectual
Property Rights in the Software including CryptoWorks to the extent
necessary to ensure that WTV is able to acquire and use software and
products compatible with Decoder Systems purchased from PBE. PBE shall
cooperate fully with WTV. In case WTV is not capable of using such
licenses itself but wishes a third party to exercise the rights under such
licenses for the internal benefit of WTV, WTV may assign its rights to a
third party subcontractor provided it has the prior written consent of PBE
which will not be unreasonably withheld; to this end, Schedule 20.3
contains a list of third parties acceptable to PBE, which list may be
amended from time to time by PBE by giving 30 days written notice provided
that there is at least one alternative supplier on the list. For the
avoidance of doubt, any Software sublicenses granted by WTV in the sale or
rental of Decoder to Customers shall remain in full force and effect.
Article 21
Project Management
21.1 The Authorised Representatives shall meet at least every fortnight for the
first year of the Term or as otherwise agreed. The parties may meet by
teleconferencing if necessary. At the end of the first year of the Term
the parties may agree to meet on a less frequent basis.
21.2 During the first year of the Term PPS and PBE shall provide a written
report to WTV's Authorised Representative each fortnight, or as otherwise
agreed, setting out details relating to manufacture, delivery, sale,
marketing, installation and support of Decoder Systems. At the end of the
first year of the Term, WTV may elect to receive the written report less
frequently. The report will be in a format agreed between the parties.
21.3 Each party shall bear its own costs of complying with this article.
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Article 22
Confidentiality
22.1 Confidential Information
Each party to this Agreement agrees that this Agreement and any
information or data fixed in a tangible medium and furnished by one party
to the other party and conspicuously marked as the confidential or
proprietary information of the disclosing party (hereinafter referred to
collectively as "Confidential Information"), shall not be disclosed to
anyone other than those employees, shareholders, auditors and other
professional advisors of such party who need to use such Confidential
Information for the purposes of this Agreement and who have agreed to hold
such Confidential Information in trust and confidence.
PPS shall procure that the Dealers and Installers keep any information
they are given or they obtain on Customers and WTV confidential and that
they do not disclose that information to any third party. PPS shall ensure
and procure that there are appropriate restrictions in the agreements
between the Dealers and PPS and the Dealers and the Installers to protect
confidential and proprietary information of WTV, PPS and PBE.
22.2 Exceptions
Notwithstanding the provisions of Article 22.1 a party receiving
Confidential Information may disclose such information:
(a) pursuant to any law, rule or regulation including applicable stock
exchanges or an order or judgement of any court or governmental
body, provided that the disclosing party shall give notice of such
order or judgement to the other party prior to making such
disclosure and shall use reasonable efforts to obtain a protective
order or, in case such is not possible, confidential treatment,
covering the Confidential Information; or
(b) which is or becomes generally available to the public through any
means other than a breach by the disclosing party of its obligations
under this Agreement; or
(c) which is disclosed to the receiving party without an obligation of
confidentiality by a third party who has the right to make such
disclosure; or
(d) which is developed independently by the receiving party without use
of or benefit from the Confidential Information; or
(e) which was in the possession of the receiving party without
obligations of confidentiality prior to receipt under this
Agreement.
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22.3 Surviving obligation
The provisions of this Article shall retro-actively be in full force and
effect from March 10, 1997 and shall remain in full force and effect
during the term of this Agreement and three (3) years thereafter.
Article 23
Notices
23.1 Notices and communications under this Agreement shall be given in writing
and may be delivered to the relevant party or sent by registered air mail
or facsimile (with a regular mail confirmation copy) to the addresses of
that party or that party's facsimile number specified in Article 23.2.
23.2 Notices between the parties hereto will be addressed as follows:
If to WTV:
Wizja TV Sp z o.o.
Ostrobramska 75,
(Promenada) 04-175,
Warsaw, Poland
Attention: Finance Director
Tel: 00 48 22 611 3400 / 00 48 22 608 9822
Fax: 00 48 22 611 3401 / 00 48 22 668 7200
with a copy to:
At Entertainment Limited
Maidstone Studios,
Vinters Park, Maidstone, Kent, UK
Attention: Director of Engineering & Distribution
Tel +44 1622 684516
Fax +44 1622 684427
If to PBE:
Philips Business Electronics B.V.
business unit Digital Video Systems, Digital Receivers
Building OAN
P.O. Box 80002
5600 JB Eindhoven
The Netherlands
Attn- General Manager
Tel + 31 40-2734928
Fax + 31 40-2738007
CONFIDENTIAL
<PAGE>
- 47 -
If to PPS:
Philips Polska Sp z o.o.
Consumer Electronics Division
Attn: General Manager (George Zduleczny)
ul. Marszalkowska 45-49
00-648 Warszawa, Poland
or to such other addresses and/or persons as the pertaining party
will have previously notified to the other party.
Article 24
Law and Disputes
24.1 This Agreement shall be governed, and construed in all respects in
accordance with the laws of the Netherlands without regard to the
principles of conflicts of law, and without regard to the United Nations
Convention on the International Sale of Goods.
If a dispute arises between the parties in connection with this Agreement,
a party may give a notice of dispute ("Dispute Notice") to the other
parties. Within 14 days of receipt of the Dispute Notice, the Authorised
Representatives shall meet and try to resolve the dispute. If the dispute
cannot be resolved by the Authorised Representatives, the dispute shall be
escalated to the parties' Chief Executives for resolution within 14 days
of the Authorised Representatives' last meeting. The parties may meet by
teleconferencing if necessary.
All disputes arising in connection with this Agreement, which disputes
have not been settled by mutual or amicable agreement, shall be finally
settled by arbitration (i) administered by the International Chamber of
Commerce and (ii) under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce in effect on the date of signature of
this Agreement (the "ICC Rules"). The number of arbitrators shall be three
(3) and the arbitrators shall be appointed exclusively in accordance with
the ICC Rules and this Agreement. The arbitrators, one to be nominated by
PBE and PPS on the one hand, and the other to be nominated by WTV on the
other in accordance with Articles 2(4), 3 and 4(1) of the ICC Rules shall
agree on a third arbitrator, who shall serve as chairman of the arbitral
tribunal, within twenty (20) days after confirmation of the second
party-appointed arbitrator by the ICC International Court of Arbitration
(the "ICC Court"), failing which the third arbitrator shall be appointed
by the ICC Court. The place of arbitration shall be Amsterdam, the
Netherlands and the arbitrators shall be fluent in English (which is the
language in which the arbitration is to be conducted).
CONFIDENTIAL
<PAGE>
- 48 -
Any award of the arbitral tribunal shall be final and binding on the
Parties and judgement thereon may be entered in any court of competent
jurisdiction, and application may be made to any competent jurisdiction
for judicial recognition of the award and an order of enforcement. The
Parties hereby waive any right to appeal from any award insofar as such
waiver can validly be made. Arbitration hereunder shall be the exclusive
method for resolving the disputes covered hereby, and no Party to this
Agreement shall commence any action or proceeding in any court with
respect to any such dispute except (i) to enforce the obligation to
arbitrate hereunder; (ii) to obtain provisional judicial assistance
(including injunctions or other provisional remedies) in aid of
arbitration hereunder; or (iii) to enforce an arbitral award made in
accordance herewith.
Article 25
Miscellaneous
25.1 Amendments
This Agreement may be amended only by an instrument in writing signed by
both parties.
25.2 Trademarks and Tradenames
Neither party shall use or make reference to the other party's trademarks
or tradenames in its marketing or sales literature or in any other way
other than in accordance with the terms and conditions agreed herein.
25.3 No waiver
The failure of any party to enforce or assert reliance upon, at any time
or for any period of time, any of the provisions of this Agreement shall
not be construed as a waiver of such party's rights under such provisions,
or the right of such party thereafter to enforce each and every provision
of this Agreement.
25.4 Assignment and delegated performance
No party hereto shall assign any of its rights under this Agreement to any
third party without the prior written consent of the other parties.
However, no consent is required for an assignment or transfer in whole or
in part by any party to any of its Affiliates, provided that the initial
party warrants the correct performance of all obligations hereunder. Such
party shall notify the others of such assignment or transfer in writing.
Furthermore, PBE shall be entitled to delegate, subcontract or assign its
obligations under this Agreement to any third party, provided it remains
fully bound by and liable for the correct execution of its obligations and
the performance requirements imposed on that third party are at least as
comprehensive as the performance required of the initial party under this
agreement.
CONFIDENTIAL
<PAGE>
- 49 -
25.5 Survival
All terms and conditions of this Agreement which are destined (whether
expressed or not) to survive the expiration or termination of this
Agreement shall so survive.
25.6 Publicity
All media releases by a party hereto in the context of this Agreement
shall be coordinated with and approved in writing by the others prior to
the release thereof.
25.7 Export Control
WTV acknowledges that the Decoder Systems and/or documentation to be
supplied may be subject to United States or any specific local export
regulations and WTV acknowledges that it is familiar or agrees to become
familiar with such regulations. WTV furthermore agrees that it will not
deal with the Decoder Systems and/or documentation in violation of such
regulations, more specifically will not (re)export or otherwise dispose of
same without the applicable prior written authorisation of the national or
US authorities respectively, WTV certifies that it will not export (any
part of) the Decoder Systems without the prior written authorisation from
the appropriate authorities in Poland or their successors.
25.8 Inconsistencies
In case of inconsistencies between the Agreement and its annexes, exhibits
and other documents explicitly referred to herein, the order of precedence
will be (provided all such documentation was signed or initialled by
authorised officers of each party): (i) this Agreement and any amendments;
(ii) the Schedules, (iii) other documents.
25.9 Relation between the parties and costs
Nothing in this Agreement shall be deemed to create any joint venture,
partnership or principal and agent relationship between PBE, PPS and WTV
and neither WTV on the one hand and PPS and PBE on the other shall hold
themselves out in their advertising or otherwise in any manner which would
indicate or imply any such relationship with the other.
Save as expressly otherwise provided in this Agreement each of the parties
shall bear its own legal and other costs, charges and expenses connected
with the negotiation, preparation and implementation of this Agreement and
any other agreement incidental to or referred to in this Agreement.
25.10 Validity
If any provision of this Agreement is found or held to he invalid or
unenforceable, the validity of all other provisions hereof shall not be
attached thereby and the parties agree to meet and review the matter and
if any valid and enforceable means is reasonably available to achieve the
same commercial objective as the invalid or
CONFIDENTIAL
<PAGE>
- 50 -
unenforceable provision, to adopt such means by way of variation of this
Agreement however if any invalid term is incapable of amendment to render
it valid, the parties agree to negotiate in good faith an amendment to
remove the invalidity or unenforceability.
25.11 Limitation of Liability
EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY SHALL BE LIABLE TO THE
OTHER OR ITS AGENTS, DISTRIBUTORS AND CUSTOMERS FOR ANY INDIRECT, SPECIAL
OR CONSEQUENTIAL DAMAGES, WHETHER GROUNDED IN TORT, STRICT LIABILITY OR
CONTRACT, AND UNDER NO CIRCUMSTANCES SHALL EITHER PARTY'S LIABILITY TO THE
OTHER PARTY EXCEED THE OBLIGATIONS DESCRIBED HEREIN.
The parties hereto agree that the disclaimers and limitations of liability
set forth herein apply regardless of whether WTV will actually accept the
Decoder Systems.
The Parties acknowledge that PBE and PPS has set its prices and entered
into this Agreement in reliance upon the rights, explicit remedies,
disclaimers and limitations of liability set forth herein, and that same
reflect an allocation of risk between the Parties (including the risk that
a contract remedy may fail for its essential purpose and cause
consequential loss) and that same form an essential basis of the bargain
between the Parties.
25.12 Mutual warranties
Each party warrants to the others that it has all necessary power and
authority under its constitution to execute, deliver, and complete this
Agreement and this Agreement has been approved by its respective directors
or authorised officers; it has all necessary permissions, consents and
permits required to perform its obligations in this Agreement and will do
nothing to impair, derogate from or cause these permissions, consents and
permits to be suspended or revoked.
25.13 Entire Agreement
This Agreement sets out the entire understanding between the parties
relating to the subject matter of this Agreement and supersedes and
extinguishes any prior representations, undertakings and arrangements
relating to the same. The parties however acknowledge and agree that the
SEC Confidentiality Arrangement dated July 24, 1997 remains in full force
and effect relating to any disclosure of Confidential Information to the
SEC or any other stock exchange.
CONFIDENTIAL
<PAGE>
- 51 -
25.14 English Language Version
If this Agreement is translated into Polish or Dutch, the English language
version of this Agreement prevails.
IN WITNESS WHEREOF this Agreement has been signed by each party in triplicate in
a manner duly binding upon them.
For Wizja TV Sp z o.o.
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
- ---------------------- ----------------------
Name: [ILLEGIBLE] Name: [ILLEGIBLE]
Position: Director Position: Director
For Philips Business Electronics BV For Philips Polska Sp z o.o.
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
- ---------------------- ----------------------
Name: [ILLEGIBLE] Name: [ILLEGIBLE]
Position: [ILLEGIBLE] Position: [ILLEGIBLE]
CONFIDENTIAL
<PAGE>
- 52 -
SCHEDULES
---------
Schedule 1H Specification of the Decoder
[***]
Schedule 1H(A) Specification for ODU
[***]
Schedule 1I Delivery and Milestone Plan
Schedule 2.8 Payment Schedule
[***]
Schedule 2.9A Software Warranty
Schedule 2.9B Repair and replacement procedure
Schedule 2.12 CryptoWorks Security Programme
[***]
Schedule 3.2 Test Plan
[***]
Schedule 3.4 Engineering Change Procedure
Schedule 5.1 Logistics/Distribution services
Schedule 5.3A PBE's Guarantee
Schedule 5.3B WTV's Guarantee
Schedule 8.6 Dealer Criteria
Schedule 11 Installation Specification
Schedule 14.1 WTV Trademarks
Schedule 15.1 Philips Trademarks
Schedule 20.3 List of Third Party Subcontractors/Sublicencees
[***]
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
CONFIDENTIAL
<PAGE>
[LOGO] PHILIPS
[LOGO] Digital Video Systems
- --------------------------------------------------------------------------------
Version 3.6
March 9, 1998
Status: final
Filename: Wizja-CRS3.6.doc
G+4 Wizja
Digital Satellite Receiver
PRODUCT SPECIFICATIONS
[***]
[*** CONFIDENTIAL TREATMENT REQUESTED FOR
REMAINING 32 PAGES OF THIS SCHEDULE; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
<PAGE>
[PHILIPS LOGO] PHILIPS
- --------------------------------------------------------------------------------
Philips Business Electronics
- --------------------------------------------------------------------------------
PREPARED By: 60 CM OUTDOOR SPEC NO: POL 0004
S AL FAKIR UNIT
for
- ----------------------- --------------------------
For further information Direct To Home DATE OF ISSUE:
contact:
Philips Digital Video Ku Band Reception 9-Mar-98
Systems
51, rue Carnot
92156 Suresnes
FRANCE
- ----------------------- --------------------------
Tel: 33 1 47 28 67 61 SPECIFICATION PAGES:
Fax: 33 1 47 28 63 40 MODEL NO: DSD665/91 8 + Appendix B
email: alfakir@ditv-
philips.fr
- --------------------------------------------------------------------------------
CUSTOMERS APPROVAL
DATE 980310 PRESENTED
BY /s/ [Illegible] BY
----------------- -----------------
SAMI AL FAKIR
PRODUCT MANAGER
This document contains information which is proprietary and confidential to
Philips Business Electronics B.V. and is intended for the specific use of the
recipient for the express purpose of Satellite antennas. This document is
provided with the expressed understanding that the recipient will not divulge
its content to other parties or otherwise misappropriate the information
contained herein.
- --------------------------------------------------------------------------------
<PAGE>
Philips Business Electronics
1. Introduction
This document specifies the PHILIPS Outdoor Unit (ODU) for Direct To Home (DTH)
reception of a digital signal broadcast by satellite.
The ODU consists of an offset reflector, a universal Low Noise Block
down-converter with integrated feedhorn (LNBF) and a mounting bracket.
The ODU is pointed at the appropriate satellite, to receive a Ku-band signal.
The LNBF converts this signal down to the Intermediate Frequency (IF) band by
mixing it with one of two local oscillator frequencies.
The LNBF is fed via the same coaxial cable that is used to carry the IF band
output signal to the consumer's Digital Satellite Receiver (DSR).
- --------------------------------------------------------------------------------
09/03/98 2
STRICTLY CONFIDENTIAL
All proprietary rights reserved by Philips Business Electronics
<PAGE>
Philips Business Electronics
2. Assumptions
This specification is based on the link budget performed by the customer Wizja
TV and the satellite operator Astra. This link budget analysis has shown that
the minimum size requirement for a Quasi Error Free (QEF)* reception quality of
the Wizja TV bouquet, broadcasted from the Astra Platform on 19.2(degrees) East.
Following tests, PBE acknowledges that the specification for the ODU may
cause a [***] rate of unavailability for the Network Service in parts of
[***]. As the rate of unavailability can only be determined over time, the
parties agree that WTV will monitor calls and complaints, if any, from Customers
and Dealers in relation to unavailability of the Network Service. If the
analysis of those calls and complaints indicates a [***] rate of unavailability
in an area due to the specification of the ODU, PBE agrees to:
(a) replace the ODUs in that area at its cost with an ODU that will ensure an
availability rate of the Network Service consistent with [***];
(b) reimburse WTV for any reasonable out of pocket expenses it incurs as a
result of the calls or complaints, if any, and the swap out of ODUs.
* The definition of Quasi Error Free (QEF) reception is DVB specified.
- --------------------------------------------------------------------------------
09/03/98 3
STRICTLY CONFIDENTIAL
All proprietary rights reserved by Philips Business Electronics
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
<PAGE>
Philips Business Electronics
3. General Description
The ODU has been designed for digital DTH reception, to provide
o a high quality reception of the digital bouquet by satellite, when it is
associated with the G+4 Wizja TV Digital Satellite Receiver.
o a quick and easy installation, ensured by a high level of premounting and
fewest possible number of screws.
o high stability and durability under weather conditions of Central and
Northern Europe.
It is delivered in a single package consisting of:
o the offset reflector, its back structure, the azimuth elevation holder,
the U clamp and the mast clamp.
o the Low Noise Block-down-convertor with integrated Feed-horn, LNBF,
premounted on the antenna feed-arm.
o the wall mounting bracket.
o an instruction manual.
No spare parts and no separate screw bag.
The feed-arm is clicked into the reflector. The elevation is adjusted with one
bolt and two other bolts are tightened to finalize the mounting of the antenna
on the mast.
An easy to read and durable scale setting facilitates the elevation adjustment
to the required satellite. The instruction manual describes step by step the
installation process, helping the installer achieve the best installation
settings.
The ODU is made of pre-galvanised steel, with powder coating for the reflector
and a UV resistant plastic for the feed-arm and the back structure. All parts
are treated and powder coated to prevent corrosion. For protection, the coaxial
cable is fed through the arm. The special plastic F connector protector is
adjusted over the connection between the coaxial cable and the F connector of
the LNBF to ensure total waterproofness.
With its finishing in middle-grey colour, the ODU blends in well with the
environment. The WIZJA TV and PHILIPS logos appear on the reflector.
- --------------------------------------------------------------------------------
09/03/98 4
STRICTLY CONFIDENTIAL
All proprietary rights reserved by Philips Business Electronics
<PAGE>
Philips Business Electronics
4. Performance specification
4.1 Electrical characteristics
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
No Item Unit Specification
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
4.1.1 Offset Antenna
- --------------------------------------------------------------------------------
Effective Diameter mm 530x610
- --------------------------------------------------------------------------------
Input frequencies GHz from 10.7 to 12.75
- --------------------------------------------------------------------------------
Polarization horizontal and vertical
- --------------------------------------------------------------------------------
Gain*:
- --------------------------------------------------------------------------------
11.7 dBi 34.5
- --------------------------------------------------------------------------------
12.5 dBi 35.0
- --------------------------------------------------------------------------------
half power Beamwidth deg. 3.0
@ 11.7 GHz
- --------------------------------------------------------------------------------
on axis Cross Polar dB > 30
discrimination
- --------------------------------------------------------------------------------
4.1.2 LNBF values @ 25
(degrees)C
- --------------------------------------------------------------------------------
Output frequencies MHz Low Band 950 - 1950
- --------------------------------------------------------------------------------
High Band 1100-2150
- --------------------------------------------------------------------------------
Output component F-type female
connector
(with water-proof cap)
- --------------------------------------------------------------------------------
nominal output Ohm 75
impedance
- --------------------------------------------------------------------------------
Noise figure dB 0.9 typ
low band @ 25 deg 1.5 max
high band @ 25 deg 1.3 max
- --------------------------------------------------------------------------------
Phase noise dBc/Hz -50 @ 1KHz offset
-75 @ 10KHz offset
-100 @ 100 KHz offset
- --------------------------------------------------------------------------------
conversion gain dB 48 - 60
- --------------------------------------------------------------------------------
Gain variation dBpp 7.0 Low band
7.0 High band
1.0 within any 26 Mhz
segment
- --------------------------------------------------------------------------------
Polarization control
voltage:
- --------------------------------------------------------------------------------
vertical selection V 9 - 14
- --------------------------------------------------------------------------------
horizontal selection V 16 - 20
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
09/03/98 5
STRICTLY CONFIDENTIAL
All proprietary rights reserved by Philips Business Electronics
<PAGE>
Philips Business Electronics
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Band selection: 22 +/- 4 kHz tone
- --------------------------------------------------------------------------------
No Item Unit Specification
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Low band mV pp 0 - 200
- --------------------------------------------------------------------------------
High band 400 - 800
- --------------------------------------------------------------------------------
Current consumption mA 180 max
- --------------------------------------------------------------------------------
</TABLE>
* accuracy of the gain measurement is +/- 0.3 dB
- --------------------------------------------------------------------------------
09/03/98 6
STRICTLY CONFIDENTIAL
All proprietary rights reserved by Philips Business Electronics
<PAGE>
Philips Business Electronics
4.2 Mechanical and environmental characteristics
- --------------------------------------------------------------------------------
Item Unit Specification
- --------------------------------------------------------------------------------
OFU offset angle deg. Tbc
- --------------------------------------------------------------------------------
f/D 0.55
- --------------------------------------------------------------------------------
ODU mounting options:
- --------------------------------------------------------------------------------
Pole mount yes
- --------------------------------------------------------------------------------
pole mounting range * mm 32 - 50
- --------------------------------------------------------------------------------
wall mount yes
- --------------------------------------------------------------------------------
Elevation adjustable ** deg. 15 - 50
- --------------------------------------------------------------------------------
Azimuth adjustable deg. -180 - +180
- --------------------------------------------------------------------------------
Polarisation offset deg. -45 - +45
adjustable from
- --------------------------------------------------------------------------------
Temperature range (degrees)C -40 - +60
- --------------------------------------------------------------------------------
Operational wind-speed*** km/hr 72
- --------------------------------------------------------------------------------
Survival wind-speed*** km/hr 144
- --------------------------------------------------------------------------------
Destructive wind speed*** km/hr 216
- --------------------------------------------------------------------------------
Weight of package kg tbf
- --------------------------------------------------------------------------------
Number of product per tbf
pallet
- --------------------------------------------------------------------------------
* The ODU can be mounted on an existing pole. In that case, the verticality of
the pole is necessary in order to apply the azimuth, elevation and polarization
offset values mentioned in the instruction manual of the ODU. The pole on which
the ODU can be installed, must have a diameter in the range 32 to 50 mm.
** The elevation is adjusted by using the elevation scale marked on the back
structure.
*** The ODU is compliant with Euronorm IEC61114-2 for mechanical and
environmental testing.
- --------------------------------------------------------------------------------
09/03/98 7
STRICTLY CONFIDENTIAL
All proprietary rights reserved by Philips Business Electronics
<PAGE>
Philips Business Electronics
5. Finishing and Labels:
The reflector, feed-arm and LNBF rain cover are finished in middle-grey colour.
This finishing is used for aesthetic purposes as well as protection of the
reflector against aging.
The brackets are made of black pre-galvanised steel.
The ODU is durably marked with the WIZJA TV and PHILIPS logos.
6. Lightning protection
A Ground symbol is clearly marked on the wall mount, indicating where to attach
a ground wire to the dish. This is also a requirement of the Euronorm
IEC61114-2.
7. Components List
The ODU consists of different components which are pre-assembled together in
only three parts, to ensure easy installation.
A detailed description of the components is given in Appendix B.
8. Packaging
One package contains all components of the ODU.
The PHILIPS logo, as well as logistics information and type numbers, appear in
black printing on the packaging.
- --------------------------------------------------------------------------------
09/03/98 8
STRICTLY CONFIDENTIAL
All proprietary rights reserved by Philips Business Electronics
<PAGE>
- --------------------------------------------------------------------------------
Commercial Specification WIZJA-TV
- --------------------------------------------------------------------------------
Digital Satellite Antenna DSD665/91
- --------------------------------------------------------------------------------
Diameter
- --------------------------------------------------------------------------------
last date of issue 07/02/98
- --------------------------------------------------------------------------------
Part number DSD665/91
- --------------------------------------------------------------------------------
[Illegible]
- --------------------------------------------------------------------------------
1. reflector + back structure + AZ/EL holder +
mast clamp yes
- --------------------------------------------------------------------------------
2. arm + LNB + F connector protector premounted yes
- --------------------------------------------------------------------------------
3. wall mount premounted yes
- --------------------------------------------------------------------------------
4. Separate accessories
- --------------------------------------------------------------------------------
F connector protector on LNB
- --------------------------------------------------------------------------------
5. IFU yes 10 pages A5 max
- --------------------------------------------------------------------------------
Material
- --------------------------------------------------------------------------------
Reflector pre galvanised steel
- --------------------------------------------------------------------------------
arm PP+3O%FG
- --------------------------------------------------------------------------------
back structure PP+3O%FG
- --------------------------------------------------------------------------------
wall mount pre galvanised steel
- --------------------------------------------------------------------------------
Az/EI holder pre galvanised steel
- --------------------------------------------------------------------------------
LNB holder PP+3O%FG
- --------------------------------------------------------------------------------
U clamps pre galvanised steel
- --------------------------------------------------------------------------------
screws on reflector rivets, Aluminium
- --------------------------------------------------------------------------------
Finishing
- --------------------------------------------------------------------------------
Reflector RAL7OO4
- --------------------------------------------------------------------------------
arm RAL7004
- --------------------------------------------------------------------------------
back structure black
- --------------------------------------------------------------------------------
Az/EI holder black pre-galva steel
- --------------------------------------------------------------------------------
Mast clamp black pre-galva steel
- --------------------------------------------------------------------------------
U clamp black pre-galva steel
- --------------------------------------------------------------------------------
wallmount black pre-galva steel
- --------------------------------------------------------------------------------
LNB holder RAL7OO4
- --------------------------------------------------------------------------------
LNB RAL7OO4
- --------------------------------------------------------------------------------
Logo
- --------------------------------------------------------------------------------
content WIZJA TV and PHILIPS,
- --------------------------------------------------------------------------------
Color Black and blue
- --------------------------------------------------------------------------------
LNB type
- --------------------------------------------------------------------------------
universal yes
- --------------------------------------------------------------------------------
other
- --------------------------------------------------------------------------------
reference PHILIPS LSH16
- --------------------------------------------------------------------------------
Package
- --------------------------------------------------------------------------------
Print Brown & Black
- --------------------------------------------------------------------------------
Labelling
- --------------------------------------------------------------------------------
sticker on package: yes
- --------------------------------------------------------------------------------
label on back of reflector yes
- --------------------------------------------------------------------------------
label on LNB yes
- --------------------------------------------------------------------------------
Shipping location et works Italy
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
G+4 Wizja Poland DSR Project
- --------------------------------------------------------------------------------
Wizja Project Production Schedule
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
February March April May June
--------------------------------------------------------------------------------------
ID Task Name Duratio 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
53 DMT TESTS Phase Two 3 TESTS Phase Two
- -------------------------------------
54 Production Trajectory 75d
- -------------------------------------
55 Software Pre-Release 1 Od 3/27/98 5:00 PM
- -------------------------------------
56 Ramp Up PCB's 2 Ramp Up PCB's
- -------------------------------------
57 Ramp Up SETS Belt 1 3 Ramp Up SETS Belt 1
- -------------------------------------
58 Ramp Up SETS Belt 2 3 Ramp Up SETS Belt 2
- -------------------------------------
59 Shipment Wk16 (6900) 1 Shipment Wk16 (6900)
- -------------------------------------
60 Shipment Wkl7 (3500) 1 Shipment Wkl7 (3500)
- -------------------------------------
61 Shipment Wk18 (4000) 1 Shipment Wkl8 (4000)
- -------------------------------------
62 JTAG Belt 1 Week 1 2 JTAG Belt 1 Week 1
- -------------------------------------
63 PMT tests 5 PMT tests
- -------------------------------------
64 Shipment Wkl9 (4000) 1 Shipment Wkl9 (4000)
- -------------------------------------
65 Shipment Wk2O (4000) 1 Shipment Wk2O (4000)
- -------------------------------------
66 Shipment Wk21 (4000) 1 Shipment Wk2l (4000)
- -------------------------------------
67 Shipment Wk22 (10000) 1 Shipment Wk22 (10000)
- -------------------------------------
68 Shipment Wk23 (10000) 1 Shipment Wk23 (10000)
- -------------------------------------
69 Shipment Wk24 (10000) 1 Shipment Wk24 (10000)
- -------------------------------------
70 Shipment Wk25 (10000) 1 Shipment Wk25 (10000)
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Digital Video Systems Page 1 February 4, 1998
<PAGE>
Schedule 2.8. Price and Payments
<TABLE>
<S> <C> <C> <C> <C>
Starting Point for calculations: - All calculations are in US Dollars ($);
- Payment term of "forecast" payments will be 30 days;
- Payment term of "shipment" payments will be 60 days;
- For the [***] the price is: Set Top Box: [***]
Licenses: [***]
Smartcard: [***] +
------
[***]
- For the [***] the price is: Set Top Box: [***]
Licenses: [***]
Smartcard: [***] +
------
[***]
- It is assumed that the exact forecasted quantities are produced. If this is not the case,
then invoiced amounts and quantities will vary accordingly;
- Service charges (distribution fees) are not taken into account.
<CAPTION>
-------------------------------------------------------------------------------------------
Amounts in 000's of USD dec 97 jan 98 feb 98 mar 98 apr 98 may 98 jun 98 jul 98 aug 98 sep 98
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Forecast - Quantities [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Forecast - Amounts ($ 000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Invoice ($ 000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Payments ($ 000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
---------------------------------------------------------------------------------------------------
Amounts in 000's of USD oct 98 nov 98 dec 98 jan 99 feb 99 mar 99 apr 99 may 99 jun 99 jul 99 TOTALS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Forecast - Quantities [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Forecast - Amounts ($ 000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Invoice ($ 000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Payments ($ 000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
- ----------------------------------------------------------------------------------------------------------------------------------
- - The invoice of [***] in December 1997 is [***]% multiplied by forecasted amounts in January - April plus [***]% multiplied by
production (sales value) in December
- - The invoice of [***] in May 1998 is [***]% multiplied by forecasted amounts in June - September ([***]) plus [***]% multiplied by
production (sales value) in May ([***]);
- - In terms of payments, a 60 days term is allowed for shipped quantities. In June, the payment of [***] consists of [***]%
multiplied by forecasted amounts in June - September ([***]) plus [***]% multiplied by shipped value in April ([***]).
- - First payments are to be deducted from the $8,000,000, = up front payment made by At Entertainment Ltd. First payment will be
$[***], = due in April.
ODU's
Starting Point for calculations: - Payment term for all payments will be 30 days;
- Invoicing will be on an N+2 forecast, invoice schedule [***];
- From July 1998 onwards, it is assumed that ODU: STB = [***]. If this is not the case, then
invoiced amounts and quantities will vary accordingly.
- The price for the ODU is: [***]
<CAPTION>
-------------------------------------------------------------------------------------------------
Amounts in 000's of USD dec 97 jan 98 feb 98 mar 98 apr 98 may 98 jun 98 jul 98 aug 98 sep 98 oct 98 nov 98
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Forecast - Quantities [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Forecast - Amounts ($ 000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Invoice ($ 000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Payments ($ 000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------------
Amounts in 000's of USD dec 98 jan 99 feb 99 mar 99 apr 99 may 99 jun 99 jul 99 TOTALS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Forecast - Quantities [***] [***] [***] [***] [***] [***] [***] [***] [***]
Forecast - Amounts ($ 000) [***] [***] [***] [***] [***] [***] [***] [***] [***]
Invoice ($ 000) [***] [***] [***] [***] [***] [***] [***] [***] [***]
Payments ($ 000) [***] [***] [***] [***] [***] [***] [***] [***] [***]
- ---------------------------------------------------------------------------------------------------------
- - The invoice of [***] in February 1997 is [***]% multiplied by forecasted amounts in March - April plus [***]% multiplied by
production (sales value) in February
- - The invoice of [***] in May 1998 is [***]% multiplied by forecasted amounts in July ([***]) plus [***]% multiplied by production
(sales value) in May ([***]);
- - First payment is $[***], = due in March.
</TABLE>
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
<PAGE>
SCHEDULE 2.9(A)
Software warranty
Subject to the provisions defined herein PPS warrants from delivery to WTV,
during a period of 12 (twelve) months after installation at the Customer's
premises, that:
(a the Software, unless modified by Customer without the authority of PBE,
will perform substantially the functions described in the respective
product documentation ("Documentation") and Specification and enable the
Decoder System to meet the Specification;
(b) PBE has the right to grant all the rights and licenses it grants or
purports to grant in the Software to WTV pursuant to and in accordance
with the terms of this Agreement;
(c) to the best of PPS knowledge and belief, there is no third party whose
consent is necessary in order for WTV to exercise the rights granted or
purported to be granted to it by PBE in relation to the Software pursuant
to and in the terms of this Agreement;
(d) no third party has made any claim which is outstanding at the date hereof
that any of the Software infringes any rights howsoever and wheresoever
arising; and
(e) the Software will be compatible with and interoperate with the Equipment
as defined in Article 3 of this agreement.
PPS does not warrant that the Software will meet the requirements of the
Customer, other than as specified in the Specification.
Except for the express warranties herein, PBE or PPS grants no warranties either
express, implied, statutory or other warranties on the Software, including but
not limited to all implied warranties of merchantability and fitness for a
particular purpose. In the event that, based on documented and reproducible
evidence, the Software does not conform to the said Documentation or perform in
accordance with the Specification, PPS will or will procure, at its option,
either (a) replace or modify the Software free of charge so that it conforms
with such Documentation in a timely manner and, if necessary (b) repair or
replace the affected Decoder in accordance with this Agreement. Nothing in this
Schedule prejudices the other rights and remedies that WTV has as set out in
this Agreement.
PBE or PPS make no warranty:
(1) as to defects in the Software other than those which materially affect
performance in accordance with the applicable Documentation and the
Specification;
(2) as to defects that appear in the Software because the Software is used in
violation of the license granted herein; or
(3) that Software will operate uninterrupted or error free, or that all errors
can be corrected.
In no event shall PBE or PPS be liable for indirect, special, or consequential
damages arising out of the use or operation of the Software. In no event shall
PBE's or PPS' liability exceed the total Software Price paid for Software for
Decoders as set forth in Article 2.8 of this Agreement pursuant to this license.
Software/Millenium upgrading
Without warranting that the Decoders or Software will work without interruptions
or errors (i) the Software will be upgraded and modified, where necessary, by
PBE at its sole cost no later than February 1999 in order to enable the Decoders
and the Software to continue to perform accordance with time Specifications as
from September 9, 1999; and (ii) as to third party Software, if any, (including
firmware) delivered by PBE, PBE will no later than February 1999 at its sole
cost investigate, analyze and test same in accordance with industry standards
and replace or have replaced, where necessary, any such Software in such third
party products in
CONFIDENTIAL
<PAGE>
2
order to enable the Decoders and the Software to continue to perform in
accordance with the Specifications as from September 9, 1999, all provided
that (a) such third parties reasonably and timely cooperate, and (b) PBE is
allowed to install any Updates and Upgrades. In case nevertheless an
Emergency or Major Problem occurs, PBE warrants that it will -in deviation of
the applicable general service conditions and as Customer's sole remedy-
start immediately upon notification at providing a Workaround in order to
restore the usability of the Decoders. (The definitions in this Schedule
shall have the same meaning as the definitions in the service level agreement
attached to the Main Agreement) Evaluation and verification of operation of
the Decoders in conjunction with other products, programs or services not
delivered by PBE are WTV's own responsibility. In case the Decoders must
perform as a system in accordance with the PBE obligations set forth above,
such is subject to other products and systems not delivered by PBE connected
to or used with the Decoders (i) properly exchanging accurate date data, (ii)
being and (iii) remaining Year2000 compliant themselves.
CONFIDENTIAL
<PAGE>
SCHEDULE 2.9B
Repair and Replacement
Service concept
PPS will establish one Central Repair Station through a third party to perform
warranty service and repair. Identification of a third party to conduct service
activities will take place on a variety of factors such as financial strength,
warehousing facilities, staff technical expertise and skills. PPS and PBE will
organize training for leading service people in March 1998, which will consist
of theoretical and practical modules. PBE and PPS will also be responsible for
preparation of the service and warranty documentation to be approved by WTV
(instructions, service manual, warranty card, homologation, guidelines etc.), as
well as setting up a spare parts supply system. PPS will also undertake a
training of the PPS' employees at the DTH Center to help Dealers in general and
with service and warranty issues relating to Decoder Systems. PPS and PBE will
furthermore create and maintain an initial service stock (spare parts and buffer
Decoder Systems).
Replacement and Repair Procedure
In case the Customer has a problem the following steps are to be taken:
a. The Customer calls the Wizja TV Call Centre (this number will be on warranty
card, instruction, smart card and subscription form).
b. The person in the Call Centre, using a standard set of questions agreed
jointly by WTV and PPS, determines whether the problem is in the signal
delivered from the Transmission Facility, (Wizja TV to act, but any fault with
the Equipment will be dealt with under the Main Agreement) or in the Decoder
(System) or in the Installation.
c. If the problem is not in the signal, the Call Centre advises the Customer to
bring the Decoder to the Dealer, where it is checked. If the Decoder is faulty,
the Dealer either (a) provides a replacement Decoder from the swap stock, or (b)
arranges an appointment with the Customer, for an Installer to come and install
a replacement Decoder. In both cases, a swap form is to be fully completed.
d. If the Decoder is not faulty, the Dealer will make an appointment with the
Customer for an Installer to rectify the problem at the Customer's premises.
e. Within 48 hours the Customer shall have a working Decoder System again in his
home (excluding Public Holidays, Saturdays and Sundays; calculated from the
moment Customer the Decoder is received by the Dealer).
f. The Dealer sends the faulty Decoder to the PPS Central Repair Station. On
receiving the faulty Decoder, PPS will dispatch a replacement Decoder
(refurbished but equivalent to new in performance) within one week to said
Dealer.
g. Central Repair Station repairs the faulty Decoder, it is then added back into
the replacement stock for replacement of another faulty Decoder.
<PAGE>
h. Central Repair Station produces monthly reports on an agreed format to PBE,
which are available (except pricing information) to WTV on request.
The service and repair procedure as mentioned in point 1 above is included in
the USD 23 fee, and covers a warranty period of 12 months as from installation
If the Decoder Systems are rented a surcharge of USD 4.50 per operational unit
for subsequent 12 month periods beyond the initial warranty period will be
applicable for the service mentioned under point 1 above. The applicable payment
schedule therefore still to be agreed.
<PAGE>
CRYPTOWORKS SECURITY PROGRAMME FOR THE
-WizjaTv "WTV"- PROJECT
Established pursuant to the agreement between - WTV- and
Philips Business Electronics "PBE" B.V.
Date:
CryptoWorks Consultancy Centre
Version 1.4
<PAGE>
[***]
[***CONFIDENTIAL TREATMENT REQUESTED
FOR REMAINING 12 PAGES
OF THIS SCHEDULE; OMITTED
PORTIONS FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION]
<PAGE>
SCHEDULE 3.2
Test Plan
There are three main Decoder tests of the [***], [***] and [***] and the
Decoder System that complies with the Specification (other -intermediary-
tests are mentioned in the Delivery and Milestone Schedule) that will be
running partly in parallel:
1) Alfa Test
2) End-to-End ("EtE") Test
3) Field Test
Add 1) Alfa Test (7 weeks, in accordance with the Attached Test Plan Programme)
These tests consist of laboratory tests with Decoders and a duplicate Uplink
system. The PBE standard Alfa test plan describes in detail the various
procedures to be followed to test the functionality of the Decoder.
Add 2) EtE Test (4 weeks, in accordance with the Attached Test Plan Programme)
The EtE test consists of full testing of the total functionality of the Decoder,
the features contained therein, as detailed in the Specification, [***].
Add 3) Field Test (4 weeks, in accordance with the Attached Test Plan Programme)
This test runs parallel with the EtE Test, where the same functionality is being
tested.
However, the broadcast stream used here, is the live stream from the Astra
transponders leased by At Entertainment Limited. Also, the Decoders will be
divided between the Dealers in specific regions, PPS, Maidstone and PBE
(Eindhoven).
This test incorporates a full testing of the [***] functionality.
The Decoders that are installed at the Dealers will remain there and serve as
commercial promotional models.
All tests except for number 2 will be repeated timely in full before delivery
of [***], [***] and Decoders meeting the Specification, unless the parties
agree to modify the (extent of the) tests.
A Download/Scarts test of the [***] Decoder will also be undertaken (3
weeks, in accordance with the Attached Test Plan Programme):
This test consists of testing the hardware/software of the download module, and
of the Scarts (both non-downloadable functions). WTV undertakes all reasonable
commercial endeavours to procure that Teststreams will be provided by At
Entertainment Limited in week 9. The first part of this test will be carried out
in the laboratory, and the second part will be carried out at the uplink site in
Maidstone, with live transport streams.
To these ends:
1. PBE is to deliver, on the 6th of April, 2000 Decoder Systems for testing
purposes ("Test Sets") and all other necessary equipment for the Test Set
to be installed according to the Installation Specification. WTV is to
provide the "live signal"; PBE will deliver activated smartcards for the
Test Sets.
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
<PAGE>
2. PPS in co-operation with WTV, will prepare a detailed Test Set Delivery
Program (TSDP), in which all locations/points of sale for the Test Sets
will be specified, based on pre-agreed geographic, economic and practical
study.
3 PPS will organise distribution and installation of the Test Sets within 14
days from delivery of Test Sets to PPS at the locations specified in the
TSDP. PPS and WTV will jointly conduct ongoing monitoring of Test Set
performance, consisting of digital signal tranfer (Satlink), Software
download operation and scart Software operation during a period of four
weeks.
4. Predetermined locations/points of sale as specified in the TSDP will be
obliged to report on a weekly basis on the performance of the Test Sets.
Should any problems occur, PPS and WTV will use their all reasonable
commercial endeavours to rectify the problems before April 18th, 1998, in
accordance with Article 3.3 of the CCA.
<PAGE>
[GRAPHIC]
[Project tests]
<PAGE>
SCHEDULE 3.4
Engineering Change Procedure
1. Scope of document
This document addresses the requirements and processes involved in any
engineering change for Decoder Systems for WTV ("Decoder Systems"). The document
contains the procedures to be followed for (i) a WTV invoked change, or (ii) a
change invoked by PBE. The procedure pertains to any change to the Decoder
System's Specification as attached to the CCA and released for manufacture.
These procedures are in place to ensure that proposed changes (i) are
communicated in a controlled and efficient manner, and (ii) are thoroughly
evaluated and tested by WTV and PBE and (iii) will not adversely affect unless
reasonably required the safety, quality, reliability, functionality or cost of
the Decoder System.
2. Assumptions
The Decoder Systems involved are manufactured to the Specification agreed
between the parties. The parties acknowledge that the Specification is
reasonable and is capable of being met for manufacture. The parties will inform
each other promptly in the event of a change occurring or proposed and pending
which (might) affect(s) all Decoder Systems being manufactured and/or that have
been delivered for the Network Services of WTV which may prompt this procedure
to be invoked.
3. Change definition
A Change is defined as an alteration of physical fit, form or function of the
Decoder System, interchangeability of or Update/Upgrade to parts, removal of
components, or interfacing. This includes therefore electrical, mechanical and
Software changes and any change to the Specification.
4. Change categories
Change requests can be split into 2 categories (depending on the urgency with
which the problems encountered should be solved):
1. Urgent
2. Non Urgent
The Requesting Party will indicate whether a request is deemed Urgent or Non
Urgent. The respective procedure to be followed in each category of Change is
described below.
4A Urgent Changes
An Urgent Change is defined as:
- - Any Change which -if not implemented- would affect the safety of the
Decoder System or the user thereof;
- - Any Change which -if not implemented- would hamper or seriously affect the
receipt or performance including audio and video quality of the Network
Service of WTV;
- - Any Change required because of the introduction of a new feature as part
of the Network Service.
<PAGE>
-2-
4B. Non Urgent Changes
All Changes other than Urgent Changes will be treated as Non Urgent Changes.
5. Change Requests and Information Flow
Requests for Changes in accordance with this procedure ("Change Requests") may
be made by either party (a "Requesting Party"). Change Requests should be raised
on the Change Request Form ("Form") as provided by PBE to WTV, or in
correspondence containing substantially the same information on the Change
Request Form (Annex B). The Requesting Party should complete all sections of the
Form unless it is impractical in the circumstances.
The Receiving Party's Project Manager will undertake all reasonable commercial
endeavours to complete the assesment (in case of Urgent Changes: as soon as
possible), taking due regard to the urgency indicated.
6.Procedure and Impact Assessment
The Receiving Party Receiving Party will (i) review the category of Change (i.e.
Urgent or Non Urgent) and (ii) complete the Impact Assessment Sheet (to be
delivered by PBE to WTV) by the completion date indicated by the Receiving
Party's Project Manager.
Any discussion concerning costs and reimbursements for actions to be undertaken
regarding an Urgent request should take place in accordance with section 6A but
should not impede or delay the implementation of urgent measures.
6A. Urgent Changes Procedure
In case the Change is Urgent, the procedure will be as follows and the parties,
in view of the urgency, will undertake all commercial endeavours to process the
Change Request in a timely, expeditious and adequate manner.
a. The Requesting Party will attach a formal approval plan to the Receiving
Party, that will detail all integration and acceptance testing, any
drawings, any changes to the Specifications (including the Software
Specification) and proposed timing of introduction to allow the Receiving
Party to decide if the Change should proceed. There will he NO Urgent
Changes without evaluation, unless the Urgent Change is required because
of the Network Service has been degraded.
b. The Receiving Party's Project Manager will sign the Form and return it to
the Requesting Party. This will be the "trigger" to start the approval
cycle.
<PAGE>
-3-
c. The Receiving Party will complete the Impact Assessment Sheet by the
completion date indicated by the Receiving Party's Project Manager, noting
any additional areas affected by the Change Request that are not noted on
the Change Request, and may include without limitation the following:
* addition/removal of Hardware items
* changes to user documentation
* changes to implementation or Delivery and Milestone Plan
* additional resource requirements
* modification of Software.
Additional costs may be noted and summarised in the Impact Assessment
Sheet.
d. The Project Managers for each Party shall communicate on a daily basis.
The Receiving Party's Project Manager will summarise the Impact Assessment
Sheet and the Receiving Party will provide a response to a Change Request,
with a quotation, if any, to the Requesting Party. The parties agree not
to withhold or delay unreasonably their consent to Changes.
The parties acknowledge that a Requesting Party may provide a Change
Request that may require a significant amount of work to be performed in
order to prepare the Impact Assessments. In such an event, an Interim
Impact Assessment/Change Quotation will be produced by the Receiving Party
and sent to the Requesting Party for approval in order to proceed with the
processing of the Change Request. However, parties shall take great care
that such will not delay the implementation of urgent measures.
e. Where a Change has been rejected by a party, the Rejecting Party will
detail the reason for rejection. The Requesting Party will be able to
resubmit the Change Request to the Receiving Party after the areas of
concern have been addressed, however a new formal acceptance plan will be
required and the introduction process will start from step 1 above. The
Requesting Party will be expected to resubmit a Change Request only once.
In case of a continued dispute, the procedures set forth in Article 24 of
the Agreement will be followed.
f. On approval the Project Managers of the two parties will ensure
implementation of the Change, and the Requesting Party will file the
details of the Changes, the approval plan and the Receiving Party
acceptance letter in the Form file, the date and the serial number of when
the Change was implemented, with copies to the Receiving Party. All
integration and acceptance testing must have been carried out prior to
implementing an approved Change, unless the parties to decide to forfeit
or delay same in case the Network Services have been degraded.
<PAGE>
-4-
6B. Non Urgent Changes Procedure
In case the Change as Non Urgent, the procedure will be similar but slower (the
parties, in view of the absence of urgency, will undertake reasonable commercial
and technical endevours to process the Change Request in a timely and adequate
manner):
a. The Requesting Party will notify the Receiving Party of the
intention to introduce a Change on the Form. The Form will give the
Receiving Party a full description of the planned Change with
details of all testing completed by the Requesting Party to verify
that the Change will not degrade the quality, reliability,
functionality or performance of the Decoder System and a proposed
timetable. The Requesting Party will also detail all integration and
acceptance testing.
b. The Receiving Party's Project Manager will sign the Form and return
it to the Requesting Party. If the Requesting Party has had no
response from the Receiving Party within 30 Working Days, the
proposed Change is deemed accepted without quotation and
remuneration, and subsection f below applies.
c. The case of a response, the Receiving Party will complete the Impact
Assessment Sheet, by the completion date indicated by the
Receiving Party's Project Manager, noting any additional areas
affected by the Change Request that are not noted on the Change
Request. Additional cost may be noted and summarised in the Impact
Assessment Sheet.
d. The Receiving Party's Project Manager will summarise the Impact
Assessment Sheet and the Receiving Party will provide a response to
a Change Request, with a quotation, if any, to the Requesting Party.
e. Where a Change has been rejected, the Receiving Party will detail
the reason for rejection. The Requesting Party will be able to
resubmit the Change Request to the Receiving Party after the areas
of concern have been addressed, however a new formal acceptance plan
will be required and the introduction process will start from step 1
above. The Requesting Party will be expected to resubmit a Change
Request only once.
f. On approval the Project Managers of the two parties will ensure
implementation of the Change, and the Requesting Party will file the
details of the Changes, the approval plan and the Receiving Party
acceptance letter in the Form file, the date and the serial number
of when the Change was implemented, with copies to the Receiving
Party. All integration and acceptance testing must have been carried
out prior to implementing an approved Change.
7. Archiving
<PAGE>
-5-
The Requesting Party is expected to maintain all Forms and if necessary provide
the file that shows the Receiving Party that the Form has been evaluated in the
agreed manner. A copy of all Forms will be forwarded to the Receiving Party
where a second file will be kept.
8. Administration of Change Requests
The following Status and Action Codes will be used on the changes database
employed by the Receiving Party to assist in tracking of Change Requests:
================================================================================
Status Code Action Code
================================================================================
Open Allocated for Impact Assessment ("IA")
- --------------------------------------------------------------------------------
Interim IA produced
- --------------------------------------------------------------------------------
IA produced
- --------------------------------------------------------------------------------
Preparing Full IA
- --------------------------------------------------------------------------------
Requesting Party Approval pending
- --------------------------------------------------------------------------------
Requesting Party Issues pending
- --------------------------------------------------------------------------------
PM Authorization pending
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Authorised
- --------------------------------------------------------------------------------
Suspended
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Closed Not Approved
- --------------------------------------------------------------------------------
Not Authorised
- --------------------------------------------------------------------------------
Implemented
================================================================================
Each time the status/action code is changed, the date is recorded, and the
previous contents of the field are moved to the previous action field.
A summary report of the open Change Requests will be provided for each Project
Managers' progress meeting.
Note: In case an item fails to pass an acceptance test and such failure is
demonstrably due to one of the two parties (WTV/PBE) then (i) such party shall
bear any additional costs incurred in remedying same and in retesting the
corrected item, and (ii) such party shall undertake all commercial efforts in
remedying same as soon as possible. In case an item fails to pass an
<PAGE>
-6-
acceptance test and such is not demonstrably due to one of the two parties, then
all parties shall undertake all commercial efforts in remedying same as soon as
possible, however each at its own expense.
<PAGE>
SCHEDULE 5.1
Logistics & Distribution Services
PPS shall provide the following Logistics, Distribution and Marketing related
services for WTV in addition to the obligations set forth in the Agreement:
1) General
PPS will organise, in cooperation with WTV, the distribution network and the
logistics system for Decoder Systems within the Territory in accordance with the
terms and conditions set out in the Agreement.
2) Training & Marketing
PPS will provide at its cost the following training and marketing services
during pre-introduction phase for WTV consisting of:
a. preparation of primary list of appointed Dealers in accordance with Article
8.2.1. of the CCA and the detailed logistics plan established on the basis of
economic, geographical and market-related factors no later than two weeks as
from signing this Agreement.
b. cooperation in organisation of sales training and installation training in
accordance with logistics plan and Article 10 of the CCA, including
identification and reservation of proper training centers, preparation and
supply of relevant training materials and equipment, training and preparation of
pre-determined trainers, etc.
c. detailed Dealer visit program, including point of sale management, stand and
merchandising setup, installer and salesmen competencies evaluation - to be
continually carried out from March 1998 onwards.
d. active participation in the majority of marketing events related to sales and
distribution of the Decoder Systems during pre-introduction phase and other
pre-launch PR activities (preparation, supply and distribution of additional
technical data; dealer relations / consultation & advice and identification of
potential and existing problems and solutions).
3) Transportation and Importing:
a. PPS will receive the Decoder Systems from PBE in consignment as from the date
of delivery by PBE to WTV.
b. organisation of transportation of Decoder Systems from a PPS appointed
(bonded) warehouse approved by WTV (which is part of the US$23 distribution fee
and will not be invoiced seperately),
c. customs clearance administration,
d. VAT payments administration,
<PAGE>
e. duty payments administration.
All mentioned activities under this point 3 will be organised, carried out and
controlled by PPS. All direct costs resulting from activities under this point 3
will be paid directly by WTV on its respective due date.
4) Distribution:
PPS will undertake the following:
a. Weekly stock levels monitoring, control and reporting,
b. evaluation of Dealer network in accordance with Article 8.2.1. of the CCA,
c. distribution of the Decoder Systems from the warehouse to appointed Dealers
within a time frame of 48 hours.
d. spot checks at the premises of Points of Sale an accordance with Article 8.5
of the CCA.
e. Organisation of invoicing to Dealers and collection of payments.
f. Weekly monitoring and reporting of sales to WTV.
g. PPS will organise and provide the facility (order desk) to receive orders
from Dealers.
5. Administration
PPS will undertake the following (not to be invoiced seperately, but as part of
the service fee):
a. Processing compilation, delivery and reporting of completed subscriber forms
and installation protocols;
b. Administration of receipts and payments to Dealers;
c. Administration of invoicing to and from Dealers;
d. Administration of WTV's (subscription) bankaccount on the basis of joint
signatures of WTV and PPS.
<PAGE>
(Logo) Philips
[Philips Business Electronics Letterhead]
DEED OF GUARANTEE AND INDEMNITY
This Deed of Guarantee ("the Guarantee") is given by Philips Business
Electronics B.V., acting through its Business Unit Digital Video Systems, having
its registered office at Glaslaan 2, Eindhoven, The Netherlands ("Guarantor") to
WizjaTV S.p z o.o of Ostrobramska 75, (Promenada) 04-175, Warsaw, Poland ("WTV).
In consideration of WTV entering into (i) the Commercial Cooperation Agreement
of this date with the Guarantor and Philips Polska S.P z o.o. ("PPS"), which is
attached to this Guarantee ("the Agreement"), the Guarantor as principal obligor
and not merely as surety hereby agrees as follows:
1. To irrevocably and unconditionally guarantee and undertake to WTV on
demand the due and the full prompt and complete performance by PPS of all
obligations of PPS to WTV pursuant to the Agreement ("the Obligations").
2. To perform the Obligations on demand and to pay to WTV on demand without
deduction any damages for the breach of PPS' obligations to WTV to which
WTV is entitled under the Agreements ("Liabilities").
3. To indemnify and to keep WTV indemnified against any reasonable costs or
expenses which WTV may incur in enforcing this Guarantee.
4. As a separate and independent obligation that any of the Liabilities which
are nor recoverable from PPS by reason of any legal limitation or
incapacity on or of PPS or any other fact or circumstance (whether or not
known to WTV; PPS or the Guarantor) but to which WTV is entitled, shall be
recoverable from the Guarantor on demand as though the same had been
incurred by the Guarantor and the Guarantor were the principal obligor in
respect thereof.
5. This Guarantee shall be a continuing security to WTV in respect of the
services to be supplied by PPS to WTV and is in addition to and not in
substitution of any other guarantee or security held by WTV now or
hereafter for the obligations of PPS and is enforceable without WTV first
having recourse to any other security and without WTV first taking any
steps or proceedings against PPS.
6. Until the Liabilities have been paid in full the Guarantor shall not prove
in competition with WTV in the liquidation or insolvency of PPS nor shall
the Guarantor apply for the appointment of an administrator or
administrative receiver over the undertaking of PPS.
<PAGE>
[Philips Business Electronics Letterhead]
7. WTV shall be entitled to grant time or make any arrangement or agreement
whatsoever or grant a further indulgence to PPS without prejudicing WTV's
rights under this Guarantee or releasing the Guarantor in any way
whatsoever from it.
8. Any release or compromise by PPS of its obligations under the Agreement
shall be voidable by WTV if any payment or security which WTV may receive
or have received is set aside or proves unenforceable for whatever reason.
9. This Guarantee shall continue to bind the Guarantor notwithstanding any
amalgamation or merger that may be effected by WTV with any other company.
The benefit of this Guarantee and all rights conferred may be assigned to
and enforced by any such company and proceeded on in the same manner to
all intents and purposes as if such company had been named instead of or
in addition to WTV. The Guarantor shall not assign its obligations and/or
liabilities under this Guarantee without WTV's prior written consent (not
to be unreasonably withheld).
10. This Guarantee shall remain in full force and effect notwithstanding any
change in the Guarantor's constitution or in the constitution of PPS.
11. No failure or delay on WTV's part in exercising any power or right under
this Guarantee or against Guarantor shall operate as a waiver thereof nor
shall any single or partial exercise of any such right or power preclude
any other or further exercise thereof or of any other such right or power.
12. Valid service of any notice or demand under this Guarantee must be in
writing and sent by recorded delivery post to the addresses referred to
herein.
13. This Guarantee shall be governed by English law and the parties submit to
the exclusive jurisdiction of the English courts for that purpose. If any
provision of this Guarantee is found by a court of competent jurisdiction
to be unenforceable for any reason, the remainder of this Guarantee shall
continue in full force and effect.
14. Interest will be payable on sums outstanding under this Guarantee from the
date of demand until the date of payment at the rate of 4% p.a. above the
base rate from time to time of National Westminster Bank Plc. calculated
on a weekly basis.
15. This Guarantee constitutes the entire agreement and understanding between
the parties with respect to all matters described herein and excludes any
terms implied by law which may be excluded by contract. The Guarantor
acknowledges that:
<PAGE>
[Philips Business Electronics Letterhead]
(a) it does not enter into this Guarantee on the basis of and does not
rely, and has not relied, upon any statement or representation
(whether negligent or innocent) or warranty or other provision (in
any case whether oral, written express or implied) made or agreed to
by any person (whether a party to this Guarantee or not) except
those expressly contained in this Guarantee and the Agreement and
the only remedy or remedies available in respect of any
misrepresentation or untrue statement made to it shall be a claim
for breach of contract under this Guarantee; and
(b) this Clause 15 shall not apply to any statement, representation or
warranty made fraudulently, or to any provision of this Guarantee
which was induced by fraud, for which the remedies available shall
be all those available under the law governing this Guarantee.
Executed as a Deed this 10th day of March, 1998 by the duly authorised
representative of the Guarantor:
/s/ [ILLEGIBLE]
- ----------------------------
Signed (Director)
<PAGE>
[At Entertainment Inc. Letterhead]
DEED OF GUARANTEE AND INDEMNITY
This Deed of Guarantee ("the Guarantee") given by At Entertainment Inc, whose
registered office is at 1 Commercial Plaza, Hartford, Connecticut, 06103-3585
USA ("the Guarantor") to Philips Business Electronics B.V., whose registered
office is at Glaslaan 2, Eindhoven, The Netherlands and Philips Polska Sp zoo
whose registered office is at ul. Marszalkowska 45-49, 00-648 Warsaw, Poland
(collectively defined as "Philips").
In consideration of Philips entering into the Commercial Co-operation Agreement
of this date with Wizja TV Sp zoo ("WTV"), which is attached to this Guarantee
("the Agreement"), the Guarantor as principal obligor and not merely as surety
hereby agrees as follows:
1. To irrevocably and unconditionally agree to pay Philips immediately upon
Phillips' demand in writing an amount or amounts equal to all of the
payments plus VAT which have fallen due under the Agreement and which WTV
has failed to pay to Philips by the date or dates specified in the
Agreement.
2. Any amounts which become payable under this Guarantee shall be paid in
United States Dollars and to such bank account as Philips notifies to the
Guarantor from time to time. The Guarantee is limited to the total of all
payments due by WTV to Philips under the Agreement (as may be amended by
Philips and WTV from time to time) plus VAT.
3. To indemnify and to keep Philips indemnified against any reasonable costs
or expenses which WTV may incur in enforcing this Guarantee.
4. As a separate and independent obligation that any of the Liabilities which
are not recoverable from WTV by reason of any legal limitation or
incapacity on or of WTV or any other fact or circumstance (whether or not
known to WTV or the Guarantor) but to which Philips is entitled, shall be
recoverable from the Guarantor on demand as though the same had been
incurred by the Guarantor and the Guarantor were the principal obligor in
respect thereof.
5. Until the Liabilities have been paid in full the Guarantor shall not prove
in competition with Philips in the liquidation or insolvency of WTV nor
shall the Guarantor apply for the appointment of an administrator or
administrative receiver over the undertaking of WTV.
6. Philips shall be entitled to grant time or make any arrangement or
agreement whatsoever or grant a further indulgence to WTV without
prejudicing Philips' rights under this Guarantee or releasing the
Guarantor in any way whatsoever from it.
7. Any release or compromise by WTV of its obligations hereunder shall be
voidable by Philips if any payment or security which Philips may receive
or have received is set aside or proves unenforceable for whatever reason.
<PAGE>
8. This Guarantee shall continue to bind the Guarantor notwithstanding any
amalgamation or merger that may be effected by Philips with any other
company. The benefit of this Guarantee and all rights conferred may be
assigned to and enforced by any such company and proceeded on in the same
manner to all intents and purposes as if such company had been named
instead of or in addition to Philips. The Guarantor shall not assign its
obligations and/or liabilities under this Guarantee without Philips' prior
written consent (not to be unreasonably withheld).
9. This Guarantee shall remain in full force and effect notwithstanding any
change in the Guarantor's constitution or in the constitution of Philips.
10. No failure to delay on Philips' part in exercising any power or right
under this Guarantee or against Guarantor shall operate as a waiver
thereof nor shall any single or partial exercise of any such right or
power preclude any other or further exercise thereof or of any other such
right or power.
11. Valid service of any notice or demand under this Guarantee must be in
writing and sent by recorded delivery post to the addresses referred to
herein.
12. This Guarantee shall be governed by English law and the parties submit to
the exclusive jurisdiction of the English courts for that purpose. If any
provision of this Guarantee is found by a court of competent jurisdiction
to be unenforceable for any reason, the remainder of this Guarantee shall
continue in full force and effect.
13. Interest will be payable on sums outstanding under this Guarantee from the
date of demand until the date of payment at the rate of 4% pa above the
base rate from time to time of National Westminster Bank Plc calculated on
a weekly basis.
14. This Guarantee constitutes the entire agreement and understanding between
the parties with respect to all matters described herein and excludes any
terms implied by law which may be excluded by contract. The Guarantor
acknowledges that:
(a) it does not enter into this Guarantee on the basis of and does not
rely, and has not relied, upon any statement or representation
(whether negligent or innocent) or warranty or other provision (in
any case whether oral, written express or implied) made or agreed to
by any person (whether a party to this Guarantee or not) except
those expressly contained in this Guarantee and the Agreement and
the only remedy or remedies available in respect of any
misrepresentation or untrue statement made to it shall be a claim
for breach of contract under this Guarantee; and
(b) this Clause 14 shall not apply to any statement, representation or
warranty made fraudulently, or to any provision of this Guarantee
which was induced by fraud, for which the remedies available shall
be all those available under the law governing this Guarantee.
<PAGE>
15 Any notice to be sent by Philips to the Guarantor shall be in writing to
the following addresses:
Guarantor: @ Entertainment Inc.
1 Commercial Plaza
Hartford
Connecticut 06103-3585
USA
Telephone: +1 860 549 1674
Attention: Robert Fowler III
Copy 1 Baker & McKenzie
Attn: Marc Paul
815 Connecticut Avenue NW
Washington DC 20008-4078
USA
Telephone: +1 202 452 7000
Fax: +1 202 452 7074
Copy 2 At Entertainment Ltd
The Maidstone Studios
Vinters Park
Maidstone
Kent MEI4 5NZ
UK
Telephone: +44 (0)1622 684 556
Fax: +44 (0)1622 684 539
Attention: Mr David Warner
Executed as a Deed this 10th day of March 1998 by the duly authorised
representatives of the Guarantor:
/s/ [ILLEGIBLE]
- -----------------------------
Signed (Director)
<PAGE>
SCHEDULE 8.6
Dealer criteria
In order for a person to become a Philips Polska Dealer ("Applicant"), a
thorough check is executed on the following subjects, and the Applicant is rated
on each of these on a scale of 1-10 for each of the following points. If the
Applicant receives a total grade of more than 25 Applicant can become a Dealer.
1. Localisation - where is the Applicant's point of Sale located (eg. busy
area/centre of the city/shopping centre/weakly covered geographical area).
Applicant must have a minimum size of the store, depending on the local
competition. Applicant must have an area of 2m squared available for selling the
Network Service.
2. Other brands sold/other authorisation - if an Applicant is selling our main
competing brands Philips should be there as well.
3. Turnover level - a minimal level of additional turnover in the city/region
must be able to be achieved by appointing Applicant, depending on many factors
such as broadness of offered products etc. Furthermore, the Applicant must be in
good business and financial standing.
4. Quality of customer service - Applicant must have sufficient selling skills
and the interior of the PoS must meet average Polish expectations.
5. Commitment - Applicant must take part in co-operative merchandising and
other local promotion activities and attend the Dealer training courses.
<PAGE>
SCHEDULE 11: INSTALLATION SPECIFICATION
DECODER SYSTEM INSTALLATION PROCESS
1. Make an appointment with a client
2. Conduct the site survey:
a) locate a position with direct line of sight to the satellite and
plan the overall installation.
b) Check for the possibilities of antenna mounting:
- Roof-top
- Side-wall
- Balcony
- Free-standing pole
3. Install mount accessories
4. Assemble the antenna dish holder and mount the LNB
5. Attach the antenna dish to the mounted pole
6. Position the antenna towards the satellite:
a) Refer to the aiming map or aiming table to find the elevation,
azimuth, and polarisation offset angle
b) Use the compass and an inclinometer to confirm a direct sight to the
satellite
c) Connect the signal meter to the LNB. Fine-tune the antenna
positioning
7. Lay out the TV-SAT cable:
a) Plant the cable route from the LNB to the Decoder paying attention
to laying the cable neatly
b) Mount cable holders
c) Lay out the cable
8. Install F-connectors:
a) Strip both cable ends using coaxial cable stripper
b) Install the F-connectors using the crimping tool
<PAGE>
c) Check the installed connectors with a multimeter for any
short-circuits
d) Seal all the external electrical connections and the LNB with an
insulation tape
9. Attach the cable to the LNB and Decoder
10. Set up the customer's audio-video equipment with the Decoder. Attach the
Decoder in a configuration wanted by the customer
11. Program the Decoder and customers TV set and VCR
12. Instruct the client upon the Decoder programming
13. Fill-in the Installation Protocol. Customer has his own part of the
Installation Protocol for evaluation and remarks. Both parties - installer
and customer - sign the Installation Protocol and get a copy of it.
INSTALLATION USING CUSTOMER'S EXISTING SATELLITE DISH
We have to use our LNB converter (Due to the Decoder's supply DC voltage for the
LNB, we can't take responsibility for operation of a Decoder with other
converters):
Exchange the converter
Exchange the TV-SAT cable (otherwise PPS/PBE cannot guarantee the highest
quality of programs reception)
All the rest of the procedure steps remain unchanged
ACCESS TO THE INSTALLATION SITE
Within an urban area +/-30 km - free of charge
Longer distances - paid according to the established rate per km
Distances above 50 km are not economical/time efficient
INSTALLATION TIME
About 3 hours including accessing the site
3 installation per day on average
INSTALLATION TOOLKIT
1. Basic tool case (with keys, screwdrivers, knife, etc.)
2. F-connectors crimping tool
3. Coaxial cable stripper
4. Multimeter
5. Compass and inclinometer
6. Satellite Signal Level meter
7. Satellite angle co-ordinates table or map (azimuth, elevation and
polarisation offset)
<PAGE>
8. Drilling machine + set of drills for concrete, metal and wood
9. Long power supply cord extender (about 40m)
10. Ladder (6m minimum)
ADDITIONAL REQUIREMENTS AND RECOMMENDATIONS
2-person installer teams are recommended
Installers must have a valid labour-safety check-ups for working on heights
<PAGE>
[Logo]
WIZJA TV
STYLE GUIDE
--------------------------
<PAGE>
STATEMENT OF PURPOSE
- --------------------------------------------------------------------------------
The world of entertainment is made new every day. And with change comes
opportunity. But taking advantage of opportunities in this everchanging world,
and maintaining extraordinary leadership, requires vision.
What's happening and what's next is what fuels the world of entertainment.
Knowing what people want, anticipating their needs, and delivering on their
expectations is what WIZJA TV is all about.
[Logo]
BRANDING
- --------------------------------------------------------------------------------
begins in the home
WIZJA TV is a home entertainment experience enjoyed by the entire family. It is
intimate. It is emotional. And we want to be invited back into the homes of our
subscribers time and time again. Solid brand Identification can guarantee the
opportunity for this to happen.
If we are consistent, if we exude quality in all our communications -- we will
instill a sense of trust and familiarity into the hearts of our customers and
become their frequent, honored guests. Effective branding communicates our
image, our personality, our manners, our vitality and our commitment.
[Logo]
Introduction
<PAGE>
DECISIONS, DECISIONS
- --------------------------------------------------------------------------------
For the first time, Poland will have access to many new and exciting programming
options.
Choice is one of the compelling benefits WIZJA TV brings to the marketplace.
This means that clarity and simplicity are important components in all our
communications.
Your new WIZJA TV Style Guide is designed to set forth some rules and style
guidelines for on-air promotion producers, broadcast and print designers so that
everyone has the tools to create consistent, memorable WIZJA TV brand identity.
[Logo]
Introduction
<PAGE>
STYLE GUIDE
- --------------------------------------------------------------------------------
Table of Contents
LOGO USAGE 1.0 Table of Contents
1.1 Glossary of Terms
1.2 Platform Logo
1.3 Channel Logo
1.3 Sub-Brand Logos
1.4 Corporate Logos
1.5 Reproduction Art
- --------------------------------------------------------------------------------
COLOR PALETTES 2.0 Table of Contents
2.1 Platform Identity
2.1 Corporate Identity
2.3 Channel Identity
2.4 Sub-Brand Identities
- --------------------------------------------------------------------------------
BROADCAST 3.0 Table of Contents
3.0 Promo Package
3.0 Block Lead IDs
3.0 Signature IDs
3.0 Reklamas
[Logo]
STYLE GUIDE
<PAGE>
LOGO USAGE
- --------------------------------------------------------------------------------
Table of Contents
Glossary of Terms 1.1
- --------------------------------------------------------------------------------
Platform Logo 1.2 WIZJA TV
- --------------------------------------------------------------------------------
Channel Logo 1.3 WIZJA1
Sub-Brand Logos 1.3 WIZJA1 SPORT
WiZJA1 FILMY
WIZJA1 WOW
- --------------------------------------------------------------------------------
Corporate Logos 1.4 @ENTERTAINMENT, inc.
At ENTERTAINMENT, Ltd.
1.4 Usage without logo mark
- --------------------------------------------------------------------------------
Reproduction Art 1.5 WIZJA TV
1.5 WIZJA1
1.6 WIZJA1 SPORT
1.6 WIZJA1 FILMY
1.7 WIZJA1 WOW
l.8 @ENTERTAINMENT, inc.
1.8 At ENTERTAINMENT, Ltd.
[Logo]
LOGO USAGE
1.0
<PAGE>
GLOSSARY OF TERMS
- ---------------------------
[LOGO]
WIZJATV Platform A platform is the arena that presents all
of the offered channels to the viewer.
WIZJA TV is a broadcast platform.
[LOGO]
WIZJA1 Channel A channel is a destination on the platform.
WIZJA 1 is the flagship channel of WIZJA
TV 1. The channel WIZJA 1 contains several
content themed sub-brands (programming
blocks).
[LOGO] Sub-Brand Sub-brands (programming blocks)
WIZJA1 are content-themed divisions of a
SPORT channel. WIZJA I sport, WIZJA I Filmy and
WIZJA I Wow are content-themed sub-brands
[LOGO] resented on the channel WIZJA I.
WIZJA1
FILMY WIZJA 1 Sport hosts sporting events
interviews.
[LOGO] WIZJA 1 Filmy hosts blockbuster and classic
WIZJA films.
WOW WIZJA 1 Wow hosts children's programming
blocks.
[LOGO] Corporate Logos These are the @Entertainment, Inc., and
@ENTERTAINMENT, At Entertainment, Ltd. logos. The Corporate
INC. Logos represent WIZJA TV within the corporate
structure and they represent the same
entity under legal conditions.
[LOGO]
A+ ENTERTAINMENT
Ltd.
Reproduction These are camera ready logo sheets provided
Art for digital scanning of authorized logo
configurations.
[GRAPHIC] PANTONE-Registered The Pantone Matching System is an
Trademark- international printing language
MATCHING SYSTEM providing an accurate method for the
(PMS) selection and reproduction of color
through its ink numbering and mixing
formulas.
[SYMBOL] CMYK Cyan (C), Magenta (M), Yellow (Y) and Black
(K) constitute the four process ink colors
used in various combinations to recreate
any color for printed materials. A CMYK
conversion form a PMS specification is only
an approximation and should be avoided when
possible.
GLOSSARY OF TERMS
1.1
<PAGE>
PLATFORM LOGO
- --------------------------------------------------
GENERAL USAGE
The logos in this style guide are the most current configurations. Use of these
configurations in their specified color enables consistent recognition by the
viewer. Do not distort or reconstruct these logos in any way. Reproduction art
is provided at the end of this section.
| [LOGO]
Use of this logo as a positive image in blue | WIZJATV
and black is the most acceptable. For a | Positive Image on White
complete Pantone-Registered Trademark- | or light colors
Matching System (PMS) specification and CMYK |---------------------------
color breakdown, please refer to page 2.1 | [LOGO]
in the COLOR PALETTES section of this guide. | WIZJATV
| Positive Image on Screen
| UNDER 20% Threshold
|---------------------------
| [LOGO]
| WIZJATV
| Black on White
| or light colors
|---------------------------
| [LOGO]
| WIZJATV
| Negative Image on Black
| or dark colors
PLATFORM LOGOS
1.2
<PAGE>
CHANNEL LOGO
- --------------------------------------------------
General Usage
The Channel Logo, when reproduced within the Platform Identity, shares the same
usage regulations as the Platform Logo on page 1.2. An alternate Channel
Identify palette may be applied when the logo is used independent of the
Platform Identity. Please refer to page 2.3 in the COLOR PALETTES section of
this guide for usage specifications.
Reproduction art is provided at the end of this section.
| [LOGO]
| WIZJA1
| Positive Image of White
| or light colors
|-------------------------
|
|
|
SUB - BRAND LOGOS
- --------------------------------------------------
General Usage
The Sub-Brand Logos, when reproduced within the Platform Identity, share the
same usage regulations as the Platform Logo on page 1.2. Alternate Sub-Brand
identity palettes may be applied when the logos are used independent of the
Platform Identity. Please refer to pages 2.4 to 2.8 in the COLOR PALETTES
section of this guide for usage specifications.
Reproduction art is provided at the end of this section.
[LOGO] [LOGO] [LOGO]
| WIZJAT1 WIZJAT1 WIZJAT1
| SPORT FILMY WOW
| Positive Image on White or light colors
|---------------------------------------------------------------
CHANNEL AND SUB-BRAND LOGOS
1.3
<PAGE>
CORPORATE LOGOS
- --------------------------------------------------
General Usage
These Corporate Logos represent the same entity under different legal
conditions. Representation of this Corporate Identity requires careful
regulation to insure the correct logo is placed in the appropriate situation.
The @ Entertainment, inc, logo is used for investor relations and by Bob Fowler
and the Senior Executive. The At Entertainment, Ltd. logo is used for all other
applications. Strict fines are imposed should an incorrect logo appear. If you
are uncertain of which logo qualifies for a particular application, please
contact The Maidstone Studios +44[0] 1622 684410.
The Corporate Logo shares the same usage regulations as the Platform Logo on
page 1.2. Reproduction art is provided at the end of this section.
Use of this logo as a positive image in blue | [LOGO]
and black is the most acceptable. For a | @ENTERTAINMENT inc.
complete Pantone-Registered Trademark- | Positive Image of White
Matching System (PMS) specification and | or light colors
CMYK color breakdown, please refer to page |-------------------------------
2.1 in the COLOR PALETTES section of |
this guide. | [LOGO]
| AtENTERTAINMENT
Ltd.
Positive Image on White
or light colors
CORPORATE LOGOS
- --------------------------------------------------
Usage without logo mark
When used in conjunction with the Platform, Channel or Sub-Brand Logos in
printed materials, the Corporate Logo type appears without the mark. Adjustments
to this logo type have been made to insure legibility of the characters when the
logo appears at a small size. These adjustments are provided with specific size
parameters as Reproduction Art at the end of this section.
|
| @ENTERTAINMENT
| Inc.
|-------------------------------
|
| AtENTERTAINMENT
Ltd.
CORPORATE LOGOS
1.4
<PAGE>
REPRODUCTION ART
- --------------------------------------------------
If Reproduction Art provided in this guide is damaged or missing, please
contact the Art Department at The Maidstone Studios +44 [0] 1622 684410. For
a complete Pantone-Registered Trademark- Matching System (PMS) specification
and CMYK color breakdown, please refer to pages 2.1 and 2.3 in the COLOR
PALETTES section of this guide.
[LOGO] [LOGO]
WIZJATV WIZJATV
Not to be reproduced below 15mm
[LOGO] [LOGO] [LOGO]
WIZJATV WIZJATV WIZJATV
Not to be reproduced above 15mm or below 8mm
[LOGO] [LOGO]
WIZJA1 WIZJA1
Not to be reproduced below 15mm
[LOGO] [LOGO] [LOGO]
WIZJA1 WIZJA1 WIZJA1
Not to be reproduced above 20mm or below 8mm
REPRODUCTION ART
1.5
<PAGE>
REPRODUCTION ART
- --------------------------------------------------
If Reproduction Art provided in this guide is damaged or missing, please
contact the Art Department at The Maidstone Studios +44 [0] 1622 684410. For
a complete Pantone-Registered Trademark- Matching System (PMS) specification
and CMYK color breakdown, please refer to pages 2.1 and 2.4 to 2.5 in the
COLOR PALETTES section of this guide.
[LOGO] [LOGO]
WIZJA1 WIZJA1
SPORT SPORT
Not to be reproduced below 15mm
[LOGO] [LOGO] [LOGO]
WIZJA1 WIZJA1 WIZJA1
SPORT SPORT SPORT
Not to be reproduced above 20mm or below 10mm
[LOGO] [LOGO]
WIZJA1 WIZJA1
FILMY FILMY
Not to be reproduced below 15mm
[LOGO] [LOGO] [LOGO]
WIZJA1 WIZJA1 WIZJA1
FILMY FILMY FILMY
Not to be reproduced above 15mm or below 10mm
REPRODUCTION ART
1.6
<PAGE>
REPRODUCTION ART
- --------------------------------------------------
If Reproduction Art in this guide is damaged or missing, please contact the
Art Department at The Maidstone Studios +44 [0] 1622 684410. For a complete
Pantone-Registered Trademark- Matching System (PMS) specification and CMYK
color breakdown, please refer to pages 2.1 and 2.6 to 2.8 in the COLOR
PALETTES section of this guide.
[LOGO] [LOGO]
WIZJA1 WIZJA1
WOW WOW
Not to be reproduced below 15mm
[LOGO] [LOGO] [LOGO]
WIZJA1 WIZJA1 WIZJA1
WOW WOW WOW
Not to be reproduced above 20mm or below 10mm
REPRODUCTION ART
1.7
<PAGE>
REPRODUCTION ART
- --------------------------
If Reproduction Art provided in this guide is damaged or missing, please
contact the Art Department at The Maidstone Studios +44 [0] 1622 684410. For
a complete Pantone-Registered Trademark- Matching System (PMS) specification
and CMYK color breakdown, please refer to pages 2.1 in the COLOR PALETTES
section of this guide.
[LOGO] [LOGO]
@ENTERTAINMENT @ENTERTAINMENT
inc. inc.
Not to be reproduced below 15mm
[LOGO] [LOGO] [LOGO]
@ENTERTAINMENT @ENTERTAINMENT @ENTERTAINMENT
inc. inc. inc.
Not to be reproduced above 18mm or below 9mm
[LOGO] [LOGO]
AtENTERTAINMENT AtENTERTAINMENT
Ltd. Ltd.
Not to be produced below 15mm
[LOGO] [LOGO] [LOGO]
AtENTERTAINMENT AtENTERTAINMENT AtENTERTAINMENT
Ltd. Ltd. Ltd.
Not to be reproduced above 18mm or below 9mm
REPRODUCTION ART
1.8
<PAGE>
COLOR PALETTES
---------------------------------------
Table of Contents
Platform/Corporate
Identity 2.1 Primary
2.1 Metallic
2.2 Complimentary
----------------------------------------------------
Channel Identity 2.3 WIZJA1
[LOGO]
----------------------------------------------------
Sub-Brand Identities 2.4 WIZJA1 SPORT
2.5 WIZJA1 FILMY
2.6 WIZJA1 WOW - Teen
2.7 WIZJA1 WOW - Tween
2.6 WIZjA1 WOW - Preschool
----------
COLOR PALETTES
2.0
<PAGE>
PLATFORM/CORPORATE IDENTITY
---------------------------------------
Primary Color Palette
The color of an identity is as important as its logo for
consistent recognizability. Methodical use of the
Pantone-Registered Trademark- Matching System (PMS)
specification assures this consistency.
The CMYK identification is only an approximation for
the PMS specification and should be avoided when
possible. When reproducing CMYK color for print, the
paper on which it is printed and/or the ink which is
used may effect the hue. These guidelines are provided as
a reference. Every effort should be made to match these
target colors.
[GRAPHIC] [GRAPHIC]
The only authorized identity blue.
---------------------------------
[GRAPHIC] [GRAPHIC]
The only authorized identity black.
[LOGO]
CORPORATE IDENTITY
---------------------------------------
Metallic Color Palette
To provide flexibility in promotional materials and
special printed pieces, the metallic palette may be used.
There are no CMYK equivalents to Pantone-Registered
Trademark- Metallics.
This metallic blue may be used as a
replacement to the authorized identity [GRAPHIC]
blue when the use of a metallic ink is
appropriate to a printed communication.
---------------------------------
This metallic silver may be used to as
a replacement or in conjunction with [GRAPHIC]
the neutral palette.
----------
CORPORATE IDENTITY
2.1
<PAGE>
PLATFORM/CORPORATE IDENTITY
---------------------------------------
Complimentary Color Palette
This palette is provided to compliment the primary color
palette in printed materials. As accents, these colors
must never replace or dominate the corporate identity
blue.
The CMYK identification is only an approximation for the
Pantone-Registered Trademark- Matching System (PMS)
specification and should be avoided when possible. When
reproducing CMYK color for print, the paper on which it
is printed and/or the ink which as used may effect the
hue. These guidelines are provided as a reference. Every
effort should be made to match these target colors.
Accent [GRAPHIC] [GRAPHIC]
---------------------------------
Dark Neutral [GRAPHIC] [GRAPHIC]
[LOGO]
---------------------------------
Light Neutral [GRAPHIC] [GRAPHIC]
---------------------------------
----------
CORPORATE IDENTITY
2.2
<PAGE>
CHANNEL IDENTITY
---------------------------------------
The Channel Identity is the flagship channel and a
destination on the WIZJA TV platform. This Channel
Identity contains several content-themed Sub-Brands:
Sport, Filmy and Wow. Reproduction art is provided on
page 1.5 in the LOGO USAGE section of this guide.
When used independently
of the Platform Identity,
this alternate Channel [LOGO]
Identity palette may be
used. See below for a Positive Image on White
complete Pantone-Registered or light colors
Trademark- Matching System
(PMS) and CMYK color
breakdown.
---------------------------------
[LOGO] The CMYK Identification is only an approximation for
the Pantone-Registered Trademark- Matching System (PMS)
specification and should be avoided when possible. When
reproducing CMYK color for print, the paper on which it
is printed, and/or the ink which is used may effect the
hue. These guidelines are provided as a reference.
Every effort should be made to match these target
colors.
Logo and "1" [GRAPHIC] [GRAPHIC]
---------------------------------
Accent [GRAPHIC] [GRAPHIC]
---------------------------------
Accent [GRAPHIC] [GRAPHIC]
----------
CHANNEL LOGO
2.3
<PAGE>
SUB-BRAND IDENTITIES
---------------------------------------
Sport
The Sport Sub-Brand represents content-themed programming
in the Channel Identity. Reproduction art is provided on
page 1.6 in the LOGO USAGE section of this guide.
When used independently
of the Platform Identity, [LOGO]
this alternate Sport Sub-
Brand Identity palette may
be used. See below for a Positive Image on White
complete Pantone-Registered or light color
Trademark- Matching System
(PMS) and CMYK color breakdown. ----------------------
[LOGO] The CMYK Identification is only an approximation for
the Pantone-Registered Trademark- Matching System (PMS)
specification and should be avoided when possible. When
reproducing CMYK color for print, the paper on which it
is printed, and/or the ink which is used may effect the
hue. These guidelines are provided as a reference.
Every effort should be made to match these target
colors.
Logo and "1" and Sub- [GRAPHIC] [GRAPHIC]
Brand
---------------------------------
Accent [GRAPHIC] [GRAPHIC]
---------------------------------
Accent [GRAPHIC] [GRAPHIC]
----------
SUB-BRAND LOGOS
2.4
<PAGE>
SUB-BRAND IDENTITIES
---------------------------------------
Filmy
The Filmy Sub-Brand represents content-themed programming
in the Channel Identity. Reproduction art is provided on
page 1.6 in the LOGO USAGE section of this guide.
When used independent
of the Platform Identity, [LOGO]
this alternate Filmy Sub-
Brand Identity palette may
be used. See below for a Positive Image on White
complete Pantone-Registered or light color
Trademark- Matching System
(PMS) and CMYK color breakdown. ----------------------
[LOGO] The CMYK Identification is only an approximation for
the Pantone-Registered Trademark- Matching System (PMS)
specification and should be avoided when possible. When
reproducing CMYK color for print, the paper on which it
is printed, and/or the ink which is used may effect the
hue. These guidelines are provided as a reference.
Every effort should be made to match these target
colors.
Logo and "1" and [GRAPHIC] [GRAPHIC]
Sub-Brand
---------------------------------
Accent [GRAPHIC] [GRAPHIC]
---------------------------------
Accent [GRAPHIC] [GRAPHIC]
----------
SUB-BRAND LOGOS
2.5
<PAGE>
SUB-BRAND IDENTITIES
---------------------------------------
Wow Teen
The Wow Sub-Brand represents blocks of programming
within the Channel Identity and is divided into 3
content-themed categories: Teen, Tween and Preschool.
Each block uses the same Sub-Brand Logo. Three
age-specific color palettes provide the only
distinction between these blocks of programming. Wow
Teen represents age-specific programming in the Wow
Sub-Brand Identity. Reproduction art is provided on
page 1.6 in the LOGO USAGE section of this guide.
When used independently
of the Platform Identity,
this alternate Wow Sub- [LOGO]
Brand Identity palette
may be used. This color Positive Image on White
palette represents the or light color
Teen Programming in the
WIZJA1 WOW Sub-Brand. ---------------------------------
See below for a
complete Pantone [LOGO]
-Registered Trademark-
Matching System (PMS) and
CMYK color breakdown. Negative Image on Accent
[LOGO] The CMYK Identification is only an approximation for
the Pantone-Registered Trademark- Matching System (PMS)
specification and should be avoided when possible. When
reproducing CMYK color for print, the paper on which it
is printed, and/or the ink which is used may effect the
hue. These guidelines are provided as a reference.
Every effort should be made to match these target
colors.
Brow and "1" [GRAPHIC] [GRAPHIC]
---------------------------------
Ball and Sub-head [GRAPHIC] [GRAPHIC]
---------------------------------
Accent [GRAPHIC] [GRAPHIC]
----------
SUB-BRAND LOGOS
2.6
<PAGE>
SUB-BRAND IDENTITIES
---------------------------------------
Wow Tween
The Wow Sub-Brand represents blocks of programming within
the Channel Identity and is divided into 3 content-themed
categories: Teen, Tween and Preschool Each block uses the
same Sub-Brand Logo. Three age-specific color palettes
provide the only distinction between these blocks of
programming. Wow Tween represents age-specific programming
in the Wow Sub-Brand Identity. Reproduction art is
provided on page 1.6 in the LOGO USAGE section of this
guide.
When used independent
of the Platform Identity,
this alternate Wow Sub- [LOGO]
Brand Identity palette
may be used. This color Positive Image on White
palette represents the or light color
Tween Programming in the
WIZJA1 WOW Sub-Brand. ---------------------------------
See below for a
complete Pantone [LOGO]
-Registered Trademark-
Matching System (PMS) and
CMYK color breakdown. Negative Image on Accent
[LOGO] The CMYK Identification is only an approximation for
the Pantone-Registered Trademark- Matching System (PMS)
specification and should be avoided when possible. When
reproducing CMYK color for print, the paper on which it
is printed, and/or the ink which is used may effect the
hue. These guidelines are provided as a reference.
Every effort should be made to match these target
colors.
Brow and "1" [GRAPHIC] [GRAPHIC]
---------------------------------
Ball and Sub-head [GRAPHIC] [GRAPHIC]
---------------------------------
Accent [GRAPHIC] [GRAPHIC]
----------
SUB-BRAND LOGOS
2.7
<PAGE>
SUB-BRAND IDENTITIES
---------------------------------------
Wow Preschool
The Wow Sub-Brand represents blocks of programming
within the Channel Identity and is divided into 3
content-themed categories: Teen, Tween and Preschool.
Each block uses the same Sub-Brand Logo. Three
age-specific color palettes provide the only
distinction between these blocks of programming. Wow
Teen represents age-specific programming in the Wow
Sub-Brand Identity. Reproduction art is provided on
page 1.6 in the LOGO USAGE section of this guide.
When used independent
of the Platform Identity,
this alternate Wow Sub- [LOGO]
Brand Identity palette
may be used. This color Positive Image on White
palette represents the or light color
Pre-School Programming in
the WIZJA1 WOW Sub- ---------------------------------
Brand. See below for a
complete Pantone [LOGO]
-Registered Trademark-
Matching System (PMS) and
CMYK color breakdown. Negative Image on Accent
[LOGO] The CMYK Identification is only an approximation for
the Pantone-Registered Trademark- Matching System (PMS)
specification and should be avoided when possible. When
reproducing CMYK color for print, the paper on which it
is printed, and/or the ink which is used may effect the
hue. These guidelines are provided as a reference.
Every effort should be made to match these target
colors.
Brow and "1" [GRAPHIC] [GRAPHIC]
---------------------------------
Ball and Sub-head [GRAPHIC] [GRAPHIC]
---------------------------------
Accent [GRAPHIC] [GRAPHIC]
----------
SUB-BRAND LOGOS
2.8
<PAGE>
[LOGO]
- --------------------------------------------------------------------------------
January 22, 1998
Enclosed you will find the Interim Style Guide which will serve your
needs until its permanent replacement arrives shortly. Please take note
of a few points before using this guide.
1. The reproduction art pages of this Interim Guide are not of
reproduction quality These pages are output on color laser and are not
intended to be used for reproduction, only to serve as instructional
guides. In the event that reproduction art of one of the logos is needed,
refer to the attached disk containing digital artwork of each logo.
2. The line weights of the type and logos vary from the ideal weight of
reproduction art, again due to the nature of the color laser output.
3. The PMS and CMYK colors are not accurate. Please refer to the numbers
in the color formulas for accurate reproduction in printing (i.e. PMS-293
or C100 M55 YO KO).
<PAGE>
DEALER MATERIALS
10.1
Dealer materials
presenting the brand
Dealers play an important role in presenting the
Philips brand in the market in relation to
competing brands and should extend the
consistency and prominence of the corporate
identity.
<PAGE>
DEALER MATERIALS
10.2
Contents
page
10.3 General Principles
10.4 Dealer stationery
10.6 Dealer advertising
10.7 Dealer signs
10.8 Dealer vehicles
<PAGE>
DEALER MATERIALS
10.3
General principles
use of the Philips housemarks Dealers are permitted to use the Philips
wordmark and shield emblem in the following
ways.
In advertising and promotional materials which
are exclusively devoted to Philips products, the
housemark configuration should be used in
accordance with the directives given in chapter
3.
In advertising and promotional materials which
also promote products of other brands, either
the Philips wordmark, the shield emblem or the
housemark configuration may he used.
stationery On letterheads, business cards etc. dealers are
permitted to use only the Philips shield emblem.
authorised dealer statement Dealers may state on stationery, advertising and
promotional materials that they are authorised
dealers for Philips products.
agreement A standard Dealer Agreement Letter stating the
rights and duties of the dealer is available
from Corporate Patents and Trademarks.
<PAGE>
DEALER MATERIALS
10.4
Dealer stationery
Philips shield emblem Dealers are permitted to use only the Philips
shield emblem on their stationery, appearing
less prominently than their own logos or trading
styles. Dealers are not allowed to use a design
which is similar to that of the Philips
stationery.
sufficient prominence The Philips shield emblem should be positioned
separately from the dealer's own information,
and not combined with any other logo or graphic
element. To ensure that this requirement is met,
a sufficiently large clear zone must be left
around the shield emblem.
If the Philips shield emblem appears together
with other brand names or logos, it should be
reproduced at a size that gives it at least the
same prominence.
colour The Philips shield emblem must appear only in
black, white or Pantone Process Blue.
the name Philips If a list of companies appears in a particular
typeface, the word Philips may be included in
the same type style.
authorized dealer A dealer may state on stationery that he is an
authorized dealer for Philips products, by using
the statement: "Authorized Philips dealer".
Examples of suggested stationery and business
card layouts are shown opposite.
<PAGE>
DEALER MATERIALS
10.5
[GRAPHIC]
<PAGE>
DEALER MATERIALS
10.6
Dealer advertising
use of the Philips housemarks Where dealer advertisements are exclusively
devoted to Philips products, the housemark
configuration should be used in accordance with
the directives given in Chapter 3.
Where dealer advertisements and other
promotional materials also promote products of
other brands, either the Philips wordmark, the
shield emblem or the housemark configuration
may be used. In these cases the dealer's own
house style may override the Philips corporate
identity rules regarding the size and
positioning of the housemarks.
sufficient prominence The choice of whether to use the housemark
configuration, the wordmark or the shield emblem
will be determined by the available space. The
objective is the best possible prominence of at
least one of the housemarks. Examples of
advertisement layouts are shown below. Even if
space is limited, care should be taken to
maintain a sufficiently large clear zone around
the housemark or configuration.
authorized dealer statement A dealer may state in advertising and
promotional materials that he is an authorized
dealer for Philips products, by using the
statement: "Authorized Philips dealer".
colour The Philips housemarks must appear only in
black, white or Pantone Process Blue on a
regular background. The contrast with the
background must be as great as possible.
[GRAPHIC] [GRAPHIC]
<PAGE>
DEALER MATERIALS
10.7
Dealer signs
use of the Philips housemarks Dealers are permitted to use either the Philips
wordmark, shield emblem or configuration. The
choice of which housemark to use will be
determined by the available space, as shown in
the examples below. The objective is the best
possible prominence of at least one of the
housemarks.
colour The mandatory colours for all signs are white
housemarks against a Pantone Process Blue
background.
[GRAPHIC] [GRAPHIC]
[GRAPHIC] [GRAPHIC]
<PAGE>
DEALER MATERIALS
10.8
Dealer vehicles
use of the Philips housemarks Dealers are permitted to use either the Philips
wordmark or shield emblem. The choice of which
housemark to use will be determined by the
available space. The objective is to use the
available space as effectively as possible for
the best presentation of the Philips brand.
colour The Philips housemarks must appear only in
black, white or Pantone Process Blue. The
contrast with the background must be as great as
possible, and the background must be regular.
vehicle colouring Similarity of dealer vehicle colouring to
that of Philips should be avoided.
An example of housemark application on a dealer
vehicle is shown below.
[GRAPHIC]
<PAGE>
ADVERTISING
3.1
Advertising
one personality
The value and recognition of the Philips brand
will be strengthened by a common positioning
being presented in a coherent and distinctive
way.
<PAGE>
ADVERTISING
3.2
Contents
page
3.3 One company, one brand, one personality
3.4 Printed advertising
3.10 TV commercials
<PAGE>
ADVERTISING
3.3
One company, one brand, one personality
This chapter describes the ingredients
that on the one hand create a recognizable
and distinctive visual identity for the
Philips brand, while on the other hand
allow maximum freedom for creative
expression of the advertising message.
a common "Positioning" is defined as the Company's
Philips positioning strategic proposition to its customers. The
positioning should explain what the Company
offers to the world, and forms the
strategic basis for all communications,
both internal and external.
The Philips positioning is defined as:
"Philips innovations affect people's lives
positively".
It must be emphasized that this is not a
Company slogan. It should therefore not be
used literally in advertising and other
communication media.
The key words in the positioning statement
are:
"Innovations"
Philips has an excellent record of
innovations, covering a wide product
range. These innovations translate
advanced technology into human benefits.
"Affect people's lives positively"
Philips innovations have a positive impact
on many aspects of people's lives; at home,
at work, in entertainment, communication,
information, health care etc.
This is a unique positioning which
distinguishes Philips from our major
competitors.
Consistent use of this positioning theme
for the Philips brand and products, in
combination with clear, direct
communication, will maximize impact and
improve the overall Philips image.
For more detailed information see "Philips
Company and Brand Positioning", available
from the Corporate Identity Manual
Secretariat.
<PAGE>
ADVERTISING
3.4
Printed advertising
This part covers advertisements in printed
media such as newspapers and magazines.
The aim is to achieve the maximum
recognition in printed advertising by
following a consistent approach wherever
possible to layout and typography.
housemark configuration The housemark configuration must be used
mandatory use in all advertisements, exactly as shown
and described in this chapter. Therefore
this manual must always be seen as an
integral part of briefings to advertising
agencies, designers, or any other
suppliers who are instrumental in the
creation and production of Philips
advertising.
housemark configuration The configuration is always positioned at
positioning the bottom right. The clear zone defines
the distance from the bottom and right
hand edges as shown below.
[GRAPHIC BOX]
[LOGO] PHILIPS
housemark configuration The size of the housemark configuration
size is measured over the width of the
wordmark. On all formats except extremely
tall/narrow ones, the width of the
wordmark (X) is determined by simply
adding the height (H) and width (W) of the
advertising space and dividing the result
by 10.
width of wordmark (X)= height (H) + width (W)
----------------------
10
minimum width The minimum width of the wordmark in
advertisements is 25 mm.
<PAGE>
ADVERTISING
3.5
[GRAPHIC BOX]
H + W
X = -----------
10
[LOGO] PHILIPS
Example of vertical format. The rule is
suitable for all proportions except
extremely narrow/tall ones, where the
configuration should fill the available
width as shown on the right.
[GRAPHIC BOX]
[LOGO] PHILIPS
[GRAPHIC BOX]
H + W
X = -----------
10
[LOGO] PHILIPS
Example of a horizontal format. The rule
is suitable for all proportions.
<PAGE>
ADVERTISING 3.6 In a double page
advertisement, as shown below, the
configuration must appear at the bottom
right hand corner of the right hand page.
The width is measured over one page only.
[GRAPHIC BOX]
H + W
X = -----------
10
[LOGO] PHILIPS
Double page advertisement
housemark configuration The housemark configuration must appear
colour in black, white or Pantone Process Blue on
a regular and contrasting background.
non-Roman Script When necessary an additional word Philips
in non-Roman script may be positioned to
the left of the housework configuration as
shown.
[GRAPHIC BOX]
[LOGO] PHILIPS
<PAGE>
ADVERTISING
3.7
main typeface The main typographical character is
determined by typesetting headlines,
headings and other text requiring extra
emphasis in one of the following
versions of the Gill Sans typeface
Gill Sans bold
Gill Sans bold condensed
Gill Sans regular
Gill Sans light
typesetting style All text must be set in upper and lower
Gill Sans case Gill Sans. Capitals and italic should
only be used for abbreviations or when
extra emphasis of a few words is
essential. Extremes of letter spacing,
either very tight or wide must be avoided.
typeface for body text Continuous body text of approximately 40
to 70 characters per line must be typeset
in one of the following versions of
Garamond.
Garamond semibold
Garamond regular
typesetting style Continuous body text must be set in upper
Garamond and lower case, ranged left, centred or
justified. Leading (space between lines)
will depend on the column width, but
should be at least 2 points.
More detailed information on typesetting
and examples are presented in chapter 2.
<PAGE>
ADVERTISING
3.8
PD signature Although not usually necessary, an
activity designation of a business unit,
PD or separate legal entity approved by PD
or NO management, may be used. It should
be positioned at the bottom left in Gill
Sans bold upper and lower case, ranged
left. The letter size for all activity
designations is determined by aligning a
3-line designation such as Philips Medical
Systems with the shield emblem at the top
and bottom as shown below.
An activity designation must always
consist of the name Philips followed by a
generic description of the pertinent
activity.
[GRAPHIC BOX]
Philips
Medical [LOGO] PHILIPS
Systems
[GRAPHIC BOX]
Philips
Semiconductors [LOGO] PHILIPS
<PAGE>
ADVERTISING
3.9
optional large wordmark An additional large wordmark of at least 3
times the height of the wordmark in the
housemark configuration, may be positioned
in black, white, Pantone Process Blue or
grey horizontally at the top left of the
advertisement if required. A clear zone of
at least 1/3P of the large wordmark must
be maintained below and, where applicable,
to the right of the large wordmark.
Only an additional large wordmark in a
horizontal position is allowed.
[GRAPHIC BOX]
[LOGO] PHILIPS
<PAGE>
ADVERTISING
3.10
TV commercials
It is mandatory to use the housemark
configuration at the end of a commercial.
housemark configuration The size of the housemark configuration is
size and positioning measured over the width of the wordmark.
This must be a minimum of 1/4 of the total
width of the screen. The positioning of
the configuration is free.
housemark configuration The housemark configuration should appear
colour in white, black or Pantone Process Blue on
a regular and contrasting background.
time The configuration must appear in view at
the end of the commercial for at least 5%
of the duration of the commercial,
for a minimum of 1 second.
[GRAPHIC BOX]
1/4 of screen width minimum
[LOGO] PHILIPS
typography During the whole commercial, all text
should be typeset in one of the four
versions of Gill Sans bold, bold
condensed, regular or light.
<PAGE>
SCHEDULE 20.3
List of Third party Subcontractors/Sublicencees
[***]
CONFIDENTIAL
[*** CONFIDENTIAL TREATMENT REQUESTED; OMITTED
PORTIONS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
<PAGE>
[LOGO] PHILIPS
Philips Business Electronics
- --------------------------------------------------------------------------------
P.O. Box 80006, 5600 JD
Eindhoven, The Netherlands
POWER OF ATTORNEY
Philips Business Electonics B.V. acting through its authorised representatives
Mr. A.J. van den Heuvel, CFO and Statutory Director, and Mr. Th. Peek, CTO and
Statutory Director, hereby authorises
Mr Willem de Zocte, General Manager LoB Digital Receivers,
and
Mr. Bob Tollenaar, Program Manager LoB Digital Receivers
jointly and severally with the right of substitution
to sign in the name and on behalf of our corporation an agreement entitled
"Commercial Cooperation Agreement" with WizjaTV S.P. z o.o. of Warsaw, Poland,
an affilliate of @Entertainment Inc, related to the sale and distribution of
Philips branded digital receivers for use in the Polish territory, including a
guarantee to be provided by our corporation for the performance of Philips
Polska S.P. z o.o. of its obligations thereunder.
This power of attorney expires on March 30, 1998.
Signature: Signature:
/s/ A.J. van den Heuvel /s/ Th. Peek
- ----------------------- -----------------------
By: A.J. van den Heuvel By: Th. Peek
Date: 26.02.98 Date:
<PAGE>
[LOGO] PHILIPS
Philips Polska Sp. z o.o
- --------------------------------------------------------------------------------
uL. Marslalhowsha 45149
00-648 Warslawa
POWER OF ATTORNEY
Philips Polska sp. z o.o. acting through its authorised representatives Mr
Jacob Cornelis van Oust Statutory Director, and Mr Zbigniew Jerzy Zduleczny
Statutory Director, hereby authorizes Mr Bob Tollenaar in the name and on
behalf of our corporation a commercial cooperation agreement with Wizja TV sp. z
o.o. of ul. Ostrobramska 75 (Promenada) 04-175 Warsaw, Poland.
A copy of which is attached hereto.
This power of attorney expires on April 30, 1998.
Signature: Signature:
PHILIPS-POLSKA Sp. z o.o. PHILIPS-POLSKA Sp. z o.o.
/s/ J.C. van Oust /s/ Zbigniew Zduleczny
- ----------------------- -----------------------
[ILLEGIBLE] General Manager
[ILLEGIBLE]
By: By:
Date: 27.02.98 Date:
