Document:

Exhibit 10.1

 

MEMORANDUM OF UNDERSTANDING

 

1.1                                Objective.  This memorandum of understanding, including the attached Exhibit A (including all Schedules attached thereto) (“MOU”) dated as of May 6, 2011 (the “Effective Date”) sets out the key business and commercial terms that will be reflected in a definitive agreement to be entered into by and among EchoStar Global B.V. (“EchoStar”); solely with respect to its guarantee set forth in Section 1 of Exhibit A to the MOU, EchoStar Technologies L.L.C. (“ETLLC”); Bell ExpressVu Inc., in its capacity as general partner of Bell ExpressVu Limited Partnership (“Bell ExpressVu”); Bell Mobility Inc. (“BMI”); and Bell Canada (“BC”).  For the purposes of this MOU, the term “Bell Parties” or “Bell” shall refer to Bell ExpressVu, BMI and BC.

 

1.2                                Binding Nature.   The Bell Parties and EchoStar (each a “Party” and together, the “Parties”) agree to be bound by this MOU, which shall govern the relationship between the Parties with respect to the matters set forth herein until such time as the Definitive Agreement is entered into.

 

1.3                                 Definitive Agreement.  Immediately upon execution of this MOU, the Parties shall negotiate, in good faith and in a commercially reasonable manner, an amendment to the Exclusivity Amendment to the Pricing Agreement entered into as of February 6, 2009 and effective as of December 12, 2008 or such other applicable or appropriate agreement(s) necessary to reflect the key business and commercial terms contemplated by this MOU (the “Definitive Agreement”).  The Parties shall use commercially reasonable efforts to finalize and execute the Definitive Agreement within *** of the Effective Date.  The Definitive Agreement shall include terms and conditions reflecting those set forth herein and in the attached Exhibit A to this MOU.

 

1.4                                 Term.  The term of this MOU shall begin on the Effective Date and end upon the execution of the Definitive Agreement.  This MOU shall be superseded and replaced upon the execution and delivery of the Definitive Agreement by both Parties.

 

1.5                                 No Admission of Liability.  The Parties agree that execution of this MOU by the Bell Parties and compliance with its terms, as provided herein and in Exhibit A, ***, do not constitute an admission of liability or wrongdoing on the part of any party.

 

1.6                                 Governing Law.  This MOU shall be governed by and construed in accordance with the laws in force in the state of New York.

 

1.7                                 Assignment.  Neither this MOU nor any of the rights or obligations of a Party may be assigned without the prior written consent of the other Party. Notwithstanding the foregoing, either Party may assign this Agreement to an Affiliate (as defined in the System Agreement) in connection with a corporate re-organization without the other Party’s consent; provided that the assigning Party gives notice of the assignment to the other Party.

 

***Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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1.8                                 Confidentiality.  The terms and conditions of this MOU, including all discussions between the Parties related thereto, shall be subject to Section 34.1 of the System Agreement dated January 8, 1997 among Houston Tracker Systems, Inc. (now EchoStar Technologies L.L.C.), EchoStar Satellite Corporation (now DISH Network L.L.C.) and ExpressVu Inc. (now Bell ExpressVu) (the “System Agreement”).

 

1.9                                 Further Assurances.  From time to time, each Party shall, at the request of the other Party and with reasonable diligence, execute and deliver such additional documents or instruments as may be reasonably necessary to carry out the terms of this MOU or the Definitive Agreement.

 

1.10                           Severability.  If any provision of this MOU or the Definitive Agreement is held invalid or unenforceable for any reason, such invalidity shall not affect the validity of the remaining provisions of this MOU or the Definitive Agreement, each of which shall be valid and be enforced to the fullest extent permitted by law and the Parties shall substitute for the invalid provision a valid provision which most closely approximates the intent and economic effect of the invalid provision.

 

1.11                           Counterparts.   This MOU may be executed in counterparts and when each Party has executed an identical counterpart and delivered a copy thereof to the other Party (by personal delivery or facsimile transmission), then all the counterparts taken together shall be deemed to constitute a single identical agreement dated as of the Effective Date.  Electronically scanned signature pages shall be treated as originals, provided that delivery shall occur only upon receipt by the other Party and that, if requested by the other Party, the Party delivering signatures will also deliver an original copy of its signature page or a copy by facsimile transmission with confirmation of receipt.

 

1.12                           Survival.  Any Sections or provisions of this MOU that, expressly or by their nature, are intended to survive termination or expiration of this MOU shall continue to be in effect after expiration or termination of this MOU.

 

THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

 

***Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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IN WITNESS WHEREOF this MOU has been executed by the Parties as of the Effective Date.

 

	
BELL   EXPRESSVU INC.,
    	
 
    
	
in   its capacity as general partner of
    	
 
    
	
BELL   EXPRESSVU LIMITED PARTNERSHIP
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BELL   CANADA
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BELL   MOBILITY INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
ECHOSTAR   GLOBAL B.V.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
Solely with respect to its guarantee set forth in Section 1 of   Exhibit A to the MOU,
    
	
 
    	
 
    
	
ECHOSTAR TECHNOLOGIES L.L.C.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

***Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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EXHIBIT A

 

***

 

1.                                      Canadian Shipment License ***

 

a.                                       EchoStar represents and warrants to Bell each of the following:

 

1.                                       The attached Schedule A excerpts from EchoStar’s settlement agreement that EchoStar Corporation entered into with  *** (the “Settlement”), pursuant to which EchoStar Corporation and its Subsidiaries (as that term is defined in the Settlement)  are-granted certain licenses and releases, the relevant terms and conditions, negotiated by or on behalf of EchoStar in relation to certain EchoStar products-delivered to Bell in the past and to be delivered in the future, concerning the grant to Bell ***.

 

2.                                       *** are a true and correct compilation of such terms and conditions as contained in the Settlement. ***

 

3.                                       There is no separate, corollary, ancillary or other agreement outside of the Settlement between *** and EchoStar Corporation, on behalf of itself and on behalf of EchoStar that contain rights or remedies that, if exercised, would have an adverse impact on the benefit of the release, license and defense rights granted to ***

 

4.                                       ***

 

5.                                       *** as of the date of execution of the MOU to which this Exhibit A is attached.

 

6.                                       For the duration of the Term (as that term is defined in the Settlement) and except as contemplated in this MOU, *** shall not be required to pay any further monies, credits or other forms of consideration ***.

 

b.                                      Bell and EchoStar agree that, subject to Bell’s compliance with the payment terms set out in Section 2 below of this Exhibit A, *** (as defined below) set out in Schedule A and B to this Exhibit, respectively, shall survive expiry of the Definitive Agreement and continue to be in force until the expiry of ***.

 

c.                                       ***

 

d.                                      The Bell Parties represent, warrant, and covenant to EchoStar that they will comply with***.

 

***Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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e.                                       EchoStar will indemnify Bell against any damages suffered by Bell as a result of claims brought by third parties resulting from: (i) a breach by EchoStar or any of its Affiliates of the above representations and warranties; or (ii) a breach by EchoStar or any of its Affiliates of the Settlement ***.

 

***

 

2.                                      Payment Terms

In consideration for *** shall pay ***.

 

***

 

***

 

***

 

EchoStar represents to Bell that EchoStar Global B.V. is a resident of Netherlands for purposes of the Income Tax Convention between Canada and Netherlands (the “Convention”) and further that EchoStar Global B.V. is entitled to the relevant benefits/articles of the Convention at the date of this MOU.  EchoStar will notify Bell of any change to the foregoing information that may occur whether due to a change in EchoStar Global B.V.’s tax residency status, reorganization, change of control, permitted assignment, or otherwise.  In the event that after any such change Bell believes that it is required to withhold any tax from the payments to EchoStar pursuant to this Section, Bell shall have the right to do so without any gross up requirement, provided that Bell shall first consult with EchoStar to ensure that all factors relevant to the determination have been taken into account.

 

Extension of Exclusivity Agreement

 

1.                                      Exclusivity Term

The Exclusivity Period (as defined in the Exclusivity Amendment to the Pricing Agreement effective as of December 12, 2008 among the Bell Parties and EchoStar (as successor to ETLLC) (the “Exclusivity Amendment”))  is extended for 2 years, for the years 2012 through 2013 (the  “Extended Exclusivity Period”).

 

2.                                      EchoStar Product Roadmap

EchoStar and the Bell Parties agree that they will use commercially reasonable efforts to meet the following dates:

 

***

 

***Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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3.                                      Pricing

EchoStar is offering the Bell Parties the following hardware and service prices in exchange for vendor exclusivity for STB (as defined in the Exclusivity Amendment) purchases throughout the Extended Exclusivity Period.  Exceptions in the Exclusivity Amendment to the scope of STB exclusivity to remain.

 

a.               Hardware

 

1.               Set-Top Box Pricing

 

***

 

The pricing listed above assumes the following hardware modifications:

 

***

 

2.               Accessory Pricing will be negotiated in good faith before ***.

 

b.               ***

 

4.                                      Annual Service Fee

The Service Fee (as defined in the Pricing Agreement) will ***. The Service Fee includes the same level of services as provided in the current Exclusivity Amendment plus the following:

 

***

 

5.                                      Specific Purchase Considerations

 

a.               Warranty Term

The warranty term on new STBs purchased throughout the term of the Extended Exclusivity Period will be ***.

 

b.               Energy Star Compliance

STB hardware will support Energy Star.

 

c.               HDQAM Support on New Product

 

6.                                      Vendor Managed Inventory (“VMI”)

 

d.               EchoStar and Bell agree to the following inventory management changes:

 

EchoStar will manufacture and store adequate inventory levels at the Unigistix warehouse in Toronto ON to meet Bell’s forecasted needs.  Bell must take receipt of EchoStar inventory within *** of it being warehoused.  The ordering process and fulfillment process will be negotiated in good faith but will not include EDI.  Payment terms under the VMI model are ***.

 

***Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

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7.                                      ***

 

a.               Purpose:                                               Purchase of additional ***

 

b.               Acknowledgement(s):

 

1.               The Exclusivity Amendment originally provided ***.

 

2.               As of the date of this MOU, Bell ExpressVu has purchased (or plans to purchase per its purchase orders and forecast) the following quantities :

 

***

 

3.               The purchase price for the *** currently is ***.

 

c.               Term(s):

 

1.               EchoStar plans to launch the new STB *** on ***.  This will be the replacement  receiver for the ***.

 

2.               Bell ExpressVu will purchase *** in place of the *** when made available by EchoStar. ***

 

3.               In the first *** commencing with the launch date of the*** Bell ExpressVu will purchase ***.

 

4.               EchoStar hereby offers the following *** will supersede the *** originally set forth in the Exclusivity Amendment ***.

 

A.  The *** will be offered on a prorated basis to Bell for ***.

 

B.   ***

 

***Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 

 

7Exhibit 10.2

 

Cost Allocation Agreement

Between

DISH Network Corporation

and

EchoStar Corporation

 

This Cost Allocation Agreement (this “Agreement”) is entered into as of April 29, 2011, by and between DISH Network Corporation (“DISH”), a Nevada corporation, and EchoStar Corporation (“SATS”), a Nevada corporation.

 

WHEREAS, on April 29, 2011, DISH, SATS and TiVo Inc. (“TiVo”) wishing to avoid the expense of further litigation, entered into a settlement agreement resolving litigation concerning, among other things, the alleged infringement of certain intellectual property (the “TiVo Settlement Agreement”);

 

WHEREAS, as part of the TiVo Settlement Agreement, TiVo agreed, among other things, to grant DISH and SATS certain releases and certain licenses with respect to certain patents, and DISH and SATS agreed, among other things, to grant TiVo certain releases and certain licenses with respect to certain patents and to make certain payments to TiVo;

 

WHEREAS, DISH and SATS desire to enter into this agreement to allocate between DISH and SATS certain amounts payable to TiVo pursuant to the TiVo Settlement Agreement;

 

NOW THEREFORE, in consideration of the mutual promises, covenants, agreements and undertakings contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, DISH and SATS hereby agree, intending to be legally bound, as follows:

 

1.                                       Initial Settlement Payment Allocation.  DISH and SATS agree that: (i) DISH shall pay $289,890,000 of the initial settlement payment of $300 million under the TiVo Settlement Agreement (the “Initial Settlement Payment”); and (ii) SATS shall pay the remaining $10,110,000 of the Initial Settlement Payment.

 

2.                                       Future Installment Payments Allocation.  DISH and SATS agree that: (i) DISH shall pay 95% of the future annual installment payments under the TiVo Settlement Agreement (the “Future Installment Payments”); and (ii) SATS shall pay the remaining 5% of the Future Installment Payments.

 

3.                                       Payments.  DISH and SATS agree that: (i) DISH shall pay TiVo the total amount of the Initial Settlement Payment and the Future Installment Payments, as such payments become due under the TiVo Settlement Agreement; and (ii) SATS shall pay DISH its respective share of the Initial Settlement Payment and the Future Installment Payments pursuant to Sections 1 and 2 hereof.

 

4.                                       Further Assurances.  DISH and SATS agree to execute or cause to be executed by the appropriate parties and deliver, as appropriate, such other agreements, instruments and other documents as may be necessary or desirable in order to effect the purposes of this Agreement as

 

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provided for in Section 4.2 of that certain Separation Agreement by and between DISH and SATS dated December 31, 2007 (the “Separation Agreement”).

 

5.                                       Capitalized Terms.  Capitalized terms used herein, but not otherwise defined, shall have the meaning ascribed to them in the Separation Agreement.

 

6.                                       Dispute Resolution.  Any dispute arising under this agreement shall be settled in accordance with the provisions of Article VIII of the Separation Agreement.

 

7.                                       Governing Law.  This Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws rules thereof to the extent such rules would require the application of the law of another jurisdiction.

 

8.                                       Entire Agreement.  This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and thereof and supersedes all previous agreements, negotiations, discussions, understandings, writings, commitments and conversations between the parties hereto with respect to such subject matter. No agreements or understandings exist between the parties hereto other than those set forth or referred to herein or therein.

 

9.                                       Severability.  If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof; or the application of such provision to Persons or circumstances; or the affected provisions or applications in jurisdictions other than those in which such determination has been made, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby or thereby, as the case may be, is not affected in any manner adverse to any party hereto or thereto. Upon such determination, the parties hereto shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the parties hereto.

 

10.                                 Waiver.

 

(a)  Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the party or the parties hereto entitled to the benefit thereof.  Any such waiver shall be validly and sufficiently given for the purposes of this Agreement if, as to any party hereto, it is in writing signed by an authorized representative of such party.

 

(b)  Waiver by any party hereto of any default by the other party hereto of any provision of this Agreement shall not be construed to be a waiver by the waiving party of any subsequent or other default, nor shall it in any way affect the validity of this Agreement or any party hereof or prejudice the rights of the other party thereafter to enforce each and ever such provision.  No failure or delay by any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

11.                                 Controlling Documents.  To the extent that the provisions of this Agreement, conflict with the provisions of the Separation Agreement, the provisions of this Agreement shall govern.

 

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12.                                 Specific Performance.  The parties hereto agree that the remedy at law for any breach of this Agreement may be inadequate, and that, as between DISH and SATS, any party hereto by whom this Agreement is enforceable shall be entitled to specific performance in addition to any other appropriate relief or remedy.  Such party may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunctive or such other relief as such court may deem just and proper in order to enforce this Agreement as between DISH and SATS, or prevent any violation hereof, and, to the extent permitted by Applicable Law, as between DISH and SATS, each party hereto waives any objection to the imposition of such relief.

 

13.                                 Amendments.  No provisions of this Agreement shall be deemed amended, modified or supplemented by any party hereto, unless such amendment, supplement or modification is in writing and signed by the authorized representative of the party against whom it is sought to enforce such amendment, supplement or modification.

 

14.                                 Notices.  All notices or other communications required or permitted to be given hereunder shall be in writing, shall be delivered by hand or sent by facsimile or sent, postage prepaid, by registered, certified or express mail or overnight courier service and shall be deemed given when so delivered by hand or mail or courier or facsimile (upon receipt of confirmation of successful transmission), as follows:

 

If to DISH:                                                                                     9601 S. Meridian Blvd.

Englewood, CO 80112

Attention: General Counsel

Fax: (303) 723-1699

 

If to SATS:                                                                                  100 Inverness Terrace East

Englewood, CO 80112

Attention: General Counsel

Fax: (303) 723-1699

 

15.                                 Headings; Construction.  The captions of sections and subsections in this Agreement are provided for convenience only and shall not be considered in resolving questions of interpretation or construction of this Agreement. DISH and SATS hereby acknowledge and agree that the rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments hereof.

 

16.                                 Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties thereto and delivered to the other party or parties.

 

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WHEREFORE, the parties have signed this Agreement effective as of the date first set forth above.

 

	
 
    	
DISH   NETWORK CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ECHOSTAR   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

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