Document:

exv10w31

 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[***]” ARE SUBJECT TO A CONFIDENTIAL TREATMENT
REQUEST, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES OF THIS EXHIBIT HAVE
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL
TREATMENT REQUEST.

          SECOND AMENDMENT (this “Second Amendment”), dated as of November 8, 2007, to the Manufacturing
and Distribution Agreement, dated as of April 7, 2005, as amended July 17, 2007 (the “Agreement”),
between SIRIUS SATELLITE RADIO INC., a Delaware corporation (“Sirius”), and DIRECTED ELECTRONICS,
INC., a Florida corporation (“Directed”).

WITNESSETH:

     WHEREAS, Sirius and Directed desire to amend certain provisions of the Agreement in the manner
provided for in this Second Amendment;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Directed and Sirius hereby agree as follows:

     1. Effective Date. This Second Amendment shall become effective as of January 1,
2008.

     2. Definitions. (a) Capitalized terms used in this Second Amendment and not defined
herein shall have the meanings assigned to such terms in the Agreement;

     (b) Section 1.01 of the Agreement is hereby amended by adding the following definitions in
the appropriate alphabetical order:

     “Material Part” has the meaning set forth in Section 3.09(d).

     “NFF Product Returns” means Core Products [* * *] which Sirius or a
third-party service provider has determined that no fault was found after visual inspection
and functional testing of such products.

     “NFF Product Return Rate” means the total number of NFF Product Returns during
a calendar quarter taken as a percentage of the total Core Products sold by Directed during
the immediately preceding calendar quarter.

     “Products Ineligible for Return” shall have the meaning set forth in Section
3.09(b)(ii).

     [* * *] .

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[* * *] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

     “Warranty” has the meaning set forth in Section 3.09(b).

     3. Amendment to Section 3.03 of the Agreement. Section 3.03 of the Agreement is
hereby amended by deleting such Section in its entirety and substituting in lieu thereof the
following Section:

     “SECTION 3.03. Product Sourcing and Pricing. (a) Directed shall purchase
Products (other than Directed/Sirius Accessory Products) from third party manufacturers
authorized by Sirius (“Authorized Manufacturers”). Directed and Sirius shall work together
to establish mutually acceptable dealer costs and suggested retail prices for such Products
that are competitive with the costs and retail prices of similar products marketed and sold
by third parties, which costs and prices may change from time to time due to market
conditions.  Directed shall publish documents for its dealers that contain such dealer
costs and suggested retail prices in accordance with the costs and prices set forth in
Exhibit B. 

     (b) Subject to Section 3.03(c), [* * *] Authorized Manufacturers to sell Core
Products to Directed at costs that will [* * *].

     (c) In the event that the NFF Product Return Rate reaches [* * *] Core Products to
Directed for the following [* * *] that will allow Directed to realize [* * *] as follows:

     (i) [* * *] NFF Product Return Rate = [* * *] ;

     (ii) [* * *] NFF Product Return Rate = [* * *];

     (iii) [* * *] NFF Product Return Rate = [* * *]; and

     (iv) [* * *] NFF Product Return Rate or below = [* * *].

Directed’s [* * *] every [* * *] based on the NFF Product Return Rate for the preceding [*
* *] , but in no event less than the [* * *] specified in Section 3.03(b). Directed’s [* *
*] will be adjusted as soon as practicable following (1) [* * *] for the preceding [* * *]
pursuant to Section 3.12 and (2) the [* * *] to determine whether they are NFF Product
Returns. Such [* * *] shall be applied retroactively for the time period from the
beginning of the [* * *] until such time the [* * *].”

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[* * *] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

     4. Amendment to Section 3.07(b) of the Agreement. Section 3.07(b) is hereby amended
by inserting the following sentence after the first sentence in Section 3.07(b):

     “[* * *] to place Backstop Purchase Orders upon receipt of, and [* * *].”

     5. Amendment to Section 3.09 of the Agreement. Section 3.09 is hereby amended by
deleting such Section in its entirety and substituting in lieu thereof the following Section:

     “SECTION 3.09. Returns. (a) Directed and Sirius shall process all Core
Products returned to Directed by Approved Dealers in the manner set forth in this Section
3.09.

     (b) Directed shall use all commercially reasonable efforts to ensure that the Core
Products returned to Directed by an Approved Dealer adhere [* * *] (the “Warranty”), and at
a minimum will [* * *]:

     (i) the Core Product returned is accompanied by [* * *], the Core Product was
returned within the applicable Warranty period [* * *]; and

     (ii) at the time the Approved Dealer returned the Core Products to Directed,
the Core Products were not [* * *] manufactured and the applicable Authorized
Manufacturer warranty period for the last manufactured unit has expired. Core
Products to be included in the “Products Ineligible for Return” list shall be
determined jointly by Directed and Sirius.

     (c) Directed shall visually inspect each Approved Dealer-returned Core Product to
determine if such Core Product has observable consumer induced damage. Directed shall use
Sirius’ Cosmetic Acceptance Standards for “B-Stock” Products, attached hereto as Exhibit C
(as it may be amended by Sirius from time to time), as a guideline for determining whether
such Core Product has observable consumer induced damage. Directed shall return consumer
damaged Core Products to the appropriate Approved Dealer, or otherwise handle such consumer
damaged Core Products in a commercially reasonable manner approved by Sirius in writing,
provided that such approval shall not be unreasonably withheld. Sirius

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[* * *] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

shall work with
Directed in good faith to minimize the return of Core Products with consumer induced
damage.

     (d) [* * *].

     (e) Directed shall [* * *]. The sum of the [* * *]for the applicable [* * *]and the
cumulative sum of the [* * *]for all [* * *]to date shall be listed as a separate line on
each [* * *]. After the cumulative sum of [* * *] provided in Core Product [* * *], all
subsequent [* * *] for Core Products shall be in an
[* * *] of the then current [* * *] of the applicable new Core Product. Directed shall
ship such Core Products [* * *] to a location [* * *]. Directed shall also issue
[* * *] pursuant to Section 3.09(d) if applicable. Directed shall pay such [* * *].

     (f) In the event any dispute exists with respect to any payments or credits due
pursuant to this Section 3.09, (A) the payor shall pay all undisputed amounts within the
time specified in the applicable section herein, (B) the parties shall work together in
good faith to resolve any disputes in an expeditious manner and (C) the payor shall pay any
amount that is no longer in dispute within [* * *] after such dispute is resolved.

     (g) [* * *]work in good faith to establish with each [* * *] all defective Core
Product to the applicable [* * *] shall have no further obligations in connection with such
Core Product [* * *]. In the event that [* * *], after diligent good faith efforts, is
unable to establish with any [* * *] in accordance with Section 3.09(h).

     (h) If no agreement exists with the applicable [* * *] pursuant to Section 3.09(g),
all [* * *] that remains covered by the applicable [* * *] shall be returned to [* * *]
shall pay such [* * *] within [* * *] days of receipt of [* * *]. In the event any
[* * *] missing from [* * *] returned to [* * *] shall provide written notice to [* * *]
within [* * *] days of receipt and [* * *] shall charge to [* * *] a missing part charge
equal to the [* * *] as set forth in Exhibit E, as it may be updated and amended from time
to time by mutual agreement of the parties. [* * *]. If for any reason an [* * *]
determines that Core Product returned to it by [* * *] does not qualify as [* * *] such
returned Core Product, and such determination or refusal complies with [* * *] agreement
with such, [* * *] issued to [* * *] for the same Core Product.

     (j) In no event shall this Section 3.09 apply to Core Products returned to [* * *].
Such Core Products shall be subject to the applicable letter agreement in effect with
respect to such Core Products at the time the Core Products were returned.”

     6. Addition of Section 3.12 of the Agreement. The following Section 3.12 is hereby
added to the Agreement:

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[* * *] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

     “SECTION 3.12. Reporting. Without limiting the reports required by Section
4.01, Directed shall, within a commercially reasonable period not to exceed [* * *]
following [* * *] in which the applicable return of Core Products occurred, provide a
report to Sirius in a mutually agreeable electronic format that consists of:

     (a) the total number of [* * *] for the preceding [* * *], broken down by [* * *];

     (b) the cumulative number of [* * *] returns to date returned by each [* * *], broken
down by [* * *] ;

     (c) the total [* * *] supplied to each [* * *] for the preceding [* * *], broken down
by [* * *];

     (d) the cumulative number of [* * *] supplied to date to each [* * *], broken down by
[* * *];

     (e) the cumulative [* * *] to date by each [* * *] based upon the total [* *
*] supplied to such [* * *]; and

     (f) the per-model cumulative percentage of [* * *] to date by each [* * *]
based upon the total [* * *] of such [* * *] supplied to such [* * *].

     (g) the total number of [* * *] to [* * *] during the preceding [* * *] by
each [* * *] that were not [* * *] to the applicable [* * *] by the consumer within the
applicable Warranty period as determined in accordance with Section 3.09(b) or were listed
as “Products Ineligible for Return.””

     7. Amendment to Section 8.01. Section 8.01 of the Agreement is hereby amended by
deleting such Section in its entirety and substituting in lieu thereof the following Section:

     “SECTION 8.01. Term. The term of this Agreement as amended (the “Term”)
shall commence on the date hereof and shall extend until August 31, 2008.”

     8. Amendment to Exhibit B. Exhibit B of the Agreement is hereby amended by deleting
such Exhibit in its entirety and substituting in lieu thereof the Exhibit B attached hereto.

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     9. No Other Amendments. Except as expressly amended, modified and supplemented by
this Second Amendment, the provisions of the Agreement as amended are and shall remain in full
force and effect.

     10. Counterparts. This Second Amendment may be executed in counterparts, all of
which shall be considered one and the same instrument, and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other party. Delivery of
this Second Amendment by facsimile shall be as effective as delivery of an originally executed copy
hereof.

     11. Entire Agreement. This Second Amendment, together with the terms of
the Agreement as amended, constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between Sirius and Directed with
respect to the subject matter hereof; provided that Core Products returned to
Directed by Authorized Dealers on or before December 31, 2007 shall be subject to the
applicable

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letter agreement in effect with respect to such Core Products at the time the Core Products
were returned.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth
above.

	 	 	 	 	 
	 	SIRIUS SATELLITE RADIO INC.

 	 
	 	By:  	  /s/ Robert F. Law
 	 
	 	 	Robert F. Law 	 
	 	 	Senior Vice President and General Manager,
Consumer Electronics Division 	 
	 
	 	DIRECTED ELECTRONICS, INC.

 	 
	 	By:  	/s/ Jim Minarik  11/26/2007
 	 
	 	 	Jim Minarik 	 
	 	 	President and Chief Executive Officer 	 
	 

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EXHIBIT
B

Dealer
Costs/Suggested Retail Prices

[* * *]

 

 

EXHIBIT
C

Cosmetic
Acceptance Standards for “B-Stock” Products

[* * *]

 

 

EXHIBIT
D

Consumable
Parts and Accessories

[* * *]

 

 

EXHIBIT
E

Material
Parts Costs

[* * *]Exhibit 10.1 - Amended and Restated Loan Agreement.

Exhibit 10.1

AMENDED AND RESTATED LOAN AGREEMENT

 

THIS AGREEMENT made the 28th day of November 2007

BETWEEN:

JAMES ASKEW, of 6417 Mercer, Houston, Texas, 77005; and

(the “Lender” or “Holder”)

OF THE FIRST PART

AND:

GULF UNITED ENERGY, INC., a company incorporated pursuant to the laws of Nevada with an office at 3555 Timmons, Suite 1500, Houston, Texas, 77027

(“Gulf United”, “Maker” or “Borrower”)

OF THE SECOND PART

WHEREAS:

	A.      	
The Maker issued that certain Loan Agreement, dated April 10th 2007 in favor of Lender for a total of US$1,388,985.00 (the “Original Loan”) pursuant to that certain letter of intent dated March 22, 2006 by and between Gulf United and Cia. Mexicana de Gas Natural, S.A. de C.V. (the “Letter of Intent”) and subsequently pursuant to the related Joint Venture Agreement dated July 15, 2007;

	 
	B.      	
The Lender and Maker wish to amend the Original Loan on the certain terms and conditions contained herein;

	

                    NOW THEREFORE THIS AGREEMENT WITNESSETH that for and in consideration of the set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.     The Original Loan is hereby amended and restated in it entirety.

2.     The Lender has advanced/loaned as of August 31, 2007 total principal and interest of $1,552,901 to Gulf United (the “Loan”). In addition, the Loan shall include any additional funds that the Lender may advance to Gulf United, or on its behalf, in the future, subject to Gulf United’s consent.

3.     The Loan shall bear simple interest at a rate of 10% per annum, calculated in arrears on a monthly basis commencing as of September 1, 2007 and for each additional advance on the date that

such advance is made to Gulf United and continuing until the entire Loan amount is paid in full. The Loan shall be secured by Gulf United’s equity interest in the Project Companies, as defined in the Joint Venture Agreement. In the event of a default hereunder by Gulf United, such equity interest held by Gulf United in the Project Companies, as defined in the Joint Venture Agreement, shall immediately be assigned to Lender at Lender’s sole discretion. 

4.     The Loan, as well as all accrued interest, shall be due and payable from Gulf United to the Lender on January 15, 2008. Gulf United shall not be penalized for early repayment.

5.     At any time, Gulf United may satisfy the repayment of the Loan and all interest accrued hereunder by transferring by way of bill of sale all of its rights, title and interest in the joint venture companies to the Lender.

6.     All funds and dollar amounts referred to in this Agreement are in the lawful currency of the United States of America.

7.     Lender hereby waives any and all breaches or defaults on the Original Loan, including any late fees.

8.     This Agreement shall be interpreted in accordance with the laws in effect from time to time in the State of Texas.

                   IN WITNESS WHEREOF the parties hereto have hereunto affixed their respective hands, both as of the day and year first above written.

 

	  	GULF UNITED ENERGY, INC.  
	  
	  
	  	By:  	DON WILSON  
	  
	JAMES ASKEW  	Name: 	Don Wilson
	James Askew  	  	  
	  	Title:  	PRESIDENT

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