Lynnda Speer, Donor, et al. - Page 11

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                        *     *     *     *     *     *     *                         
               The Licensee [HSN] shall pay to the Licensor [HSC] the                 
               sum of 2% of its gross profits of which 1% of gross                    
               profits shall be remitted to Pioneer Data, Inc. for its                
               development of the existing computer licenses,                         
               programs, tapes.  * * *                                                
                        *    *     *     *     *     *     *                          
               This agreement shall continue in perpetuity * * *                      

               With its signal being broadcast to a national audience, HSN            
          believed that it would need a larger computer system to handle              
          the potentially large customer base.  Time was of the essence in            
          locating a computer system, because the Satellite Agreement                 
          required HSN to begin broadcasting on July 1, 1985.  HSN and                
          Pioneer approached IBM and other computer hardware companies to             
          determine the type of computer system that would best suit HSN’s            
          needs.  Burroughs was the company ultimately selected to provide            
          the computer hardware as a result of its ability to upgrade                 
          computer hardware without extensive modification of computer                
          software, its willingness to have the order entry system                    
          completed by July 1, 1985, its team approach, and its flexible              
          pricing.                                                                    
               On May 13, 1985, Pioneer and Burroughs entered into a                  
          contract for the purchase of computer hardware and for Burroughs’           
          programming services to develop software, based upon the Local              
          Software but written in a fourth-generation computer language               
          known as LINC (the National Software), so that the program could            





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