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"*" Confidential portions of this Agreement have been omitted and filed
separately with the Securities and Exchange Commission under a Confidential
Treatment Request, pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.
EXHIBIT 10.16
EXECUTION COPY
DIRECTV--HEARTLAND WIRELESS COMMUNICATIONS
COOPERATIVE MARKETING AGREEMENT
This Cooperative Marketing Agreement ("Agreement") is made and entered
into as of this 12 day of November, 1997 ("Execution Date"), between DIRECTV,
Inc., a California corporation ("DIRECTV"), and Heartland Wireless
Communications, Inc., a Delaware corporation ("System Operator").
RECITALS
A. DIRECTV operates a direct broadcast satellite ("DBS") service
through which subscribers are able to receive video, audio, data and other
commercial programming distributed by DIRECTV via a direct broadcast satellite
system.
B. System Operator operates a wireless cable service through
which subscribers in single family homes and multiple dwelling units ("MDUs")
are able to receive video, audio, data and other commercial Programming
distributed via terrestrial microwave and broadcast facilities.
C. DIRECTV and System Operator desire to establish a business
relationship whereby (i) System Operator will establish and maintain in certain
MDU Properties Signal Distribution Systems, to enable MDU residents to receive
DIRECTV Satellite Television Programming via such systems, and (ii) System
Operator will act as a commissioned sales representative for DIRECTV to solicit
and take orders for DIRECTV Commissionable Programming Packages from residents
of MDU Properties, and (iii) DIRECTV will provide certain transport services to
enable System Operator to increase the amount of commercial programming
distributed by System Operator to its subscribers in certain MDU Properties
designated by System Operator, all according to this Agreement, the Terms and
Conditions attached hereto as Exhibit A, that certain Transport Agreement,
dated the Execution Date, by and between DIRECTV and System Operator (the
"Transport Agreement"), that certain Subscriber Service Payment Agreement, and
that certain DSS Receiver Support Agreement, each dated the Execution Date, by
and between DIRECTV and System Operator.
ARTICLE I
DEFINITIONS
1.1 The following capitalized terms shall have the meanings
assigned them. Certain other capitalized terms shall have the meanings given
them elsewhere in this Agreement.
"Commission" shall have the meaning assigned such term in
Section 2.4(a) hereof.
"Commissionable Programming Packages" shall mean the DIRECTV
Programming on Exhibit B hereto, which maybe amended upon the mutual agreement
of the parties, for which System Operator is authorized to solicit orders on
behalf of DIRECTV and is entitled to an Aggregate Commission thereon.
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"Components" shall mean such equipment, whether pre-existing
or newly installed within the MDU Property which is used to create the Signal
Distribution System, including, but not limited to, a satellite receiving dish
sold under the tradename "DSS(R)", cables, splitters, taps, connectors,
filters, amplifiers, switches, wiring and any other materials or equipment.
"DIRECTV Programming" shall mean those programming services
distributed by DIRECTV,including, but not limited to Commissionable Programming
Packages, which services and the prices therefor shall be provided to System
Operator by DIRECTV, from time to time.
"DSS Receiver" shall mean the integrated receiver and decoder
unit (IRD) sold under the tradename "DSS(R)" necessary to receive DIRECTV
Programming which is manufactured by a DIRECTV authorized manufacturer.
"Independent SO Subscriber" shall mean a DIRECTV subscriber
who currently resides in a SO Property whose original DIRECTV Programming order
was submitted directly by the subscriber to DIRECTV or by an entity other than
System Operator.
"Marketing Supplement" shall have the meaning assigned such
term in Section 2.4(a) hereof.
"MDU Property" shall mean a condominium complex, apartment
building (including both rental and cooperative apartments), or townhouse
community, comprised of multiple dwelling units, which units in each case are
occupied by single family households and are not generally accessible to the
public or otherwise share a common area to which there is unrestricted access
by two or more persons, and which units may receive DIRECTV Programming from a
common DSS dish and separate DSS Receivers in each individual dwelling unit.
"Net Receipts" shall mean gross receipts actually received by
DIRECTV from the sale of Commissionable Programming Packages during the Term,
net of any discounts, refunds, fees, credits, taxes or applicable governmental
charges (other than income or franchise taxes and copyright royalty fees)
related to the sale or the order or use of such DIRECTV Programming.
"NRTC Area" shall mean those areas in which DIRECTV has
granted the National Rural Telecommunications Cooperative distribution rights
and which, as of the Execution Date, are reflected on the map attached hereto
on Exhibit C, which may be amended from time to time by DIRECTV. Upon
execution, a complete list of NRTC zip codes will be provided by DIRECTV to
System Operator.
"Previous SO Subscriber" shall mean a DIRECTV subscriber who
was previously an SO Subscriber who no longer resides in a SO Property and who
purchased his or her DSS Receiver from the System Operator.
"Right of Entry" shall mean that certain written agreement
between System Operator and the owner or manager of an MDU Property or, in the
case of a cooperative apartment complex, the homeowners' association, which
authorizes System Operator to install and maintain a Signal Distribution
System in such MDU Property and solicit orders for Commissionable Programming
Packages therein.
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"Signal Distribution System" shall mean the integrated signal
delivery system including the DSS dish and DSS Receiver and any necessary
Components by which DIRECTV Programming is distributed throughout a SO
Property, which may also include off-air, wireless cable and/or cable
distribution systems.
"SO Property" shall mean any of the MDU Properties for which
System Operator has obtained and continues to maintain throughout the term of
the Agreement a valid Right of Entry and (i) in which System Operator has
installed a Signal Distribution System, (ii) the initial orders from residents
of such property for DIRECTV Programming are submitted by the System Operator
and transmitted to DIRECTV by System Operator in accordance with the terms of
this Agreement, (iii) is not located in an NRTC Area, and (iv) all occupiable
units in such property are capable of receiving DIRECTV Programming within five
(5) business days of ordering such programming.
"SO Subscriber" shall mean a DIRECTV subscriber residing in a
SO Property, who receives one of the DIRECTV Commissionable Programming
Packages, the initial order for which was submitted by the System Operator
and/or DIRECTV, and who was not a DIRECTV subscriber prior to becoming a SO
Subscriber.
"Technical Specifications" shall mean the requirements in
Exhibit D hereto or any other document(s) supplied by DIRECTV to System
Operator during the Term, which reasonably specify the minimum parameters any
and all Signal Distribution Systems must meet under this Agreement.
"Term" shall have the meaning assigned such term in Section
3.1 hereof.
"USSB Programming" shall mean programming distributed by
United States Satellite Broadcasting Company, Inc. or its successor via the
direct broadcast satellite(s) positioned at a 101 degrees west longitude orbit.
ARTICLE II
GENERAL RIGHTS AND OBLIGATIONS
2.1 Solicitation of DIRECTV Programming Services.
(a) Subject to the Terms and Conditions attached
hereto as Exhibit A, DIRECTV hereby grants to System Operator the right to (i)
market DIRECTV Programming to SO Properties and (ii) solicit and take orders
for DIRECTV Programming from residents of SO Properties.
(b) Nothing in this Agreement shall prevent
DIRECTV (or those DIRECTV's agents that are not system operators) from
marketing soliciting and taking orders from residents of MDU Properties. Nothing
in this Agreement shall prevent System Operator from marketing, soliciting and
taking orders from residents of MDU Properties for services provided via
terrestrial microwave and broadcast facilities.
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(c) System Operator understands that it shall not
have any right, unless specifically provided by DIRECTV under separate written
agreement, to: (1) solicit or take orders for DIRECTV Programming from any
person or entity that is not a resident of an MDU Property, including, without
limitation, commercial establishments, as such may be defined by DIRECTV in its
reasonable discretion; or (ii) use any person or entity other than its employees
in soliciting or taking orders for DIRECTV Programming without the prior written
consent of DIRECTV, which shall not be unreasonably withheld.
(d) "***"
(e) "***" Notwithstanding the foregoing, nothing
in this Agreement is intended to limit any agreement between System Operator
and any owner of an SO Property with respect to the installation and
maintenance of the Signal Distribution System.
(f) Only after receiving, approving and accepting
an order from System Operator shall DIRECTV be obligated to establish a
customer account for the subscriber and arrange for activation of DIRECTV
Programming. DIRECTV shall not be obligated to pay System Operator any
Commission or Marketing Supplements for incomplete order(s), regardless of
whether DIRECTV ultimately provides any DIRECTV Programming to the customer(s)
to which such order(s) pertained and regardless of whether DIRECTV receives any
payments as consideration for such DIRECTV Programming, unless and until
DIRECTV receives the Subscriber Information and, then, only for periods of time
following such receipt by DIRECTV. DlRECTV shall promptly notify System
Operator of any deficiencies with respect to particular subscriber information.
"Subscriber Information" shall mean that customer identification, location, and
billing, information which DIRECTV requires, as described in the DIRECTV Policy
Manual.
(g) In the event DIRECTV develops or promotes a
new commissionable product line or technology (a "New Product") which is
compatible with the Signal Distribution System and intended to be used in the
MDU environment, and DIRECTV reasonably believes System Operator has the
expertise and resources to support the exploitation of such New Product, DIRECTV
shall notify System Operator in writing and System Operator shall have the first
right to submit a proposal and negotiate with DIRECTV on an exclusive basis for
the exploitation of such New Product in SO Properties. Notwithstanding the
foregoing, nothing in this Agreement shall constitute a waiver by System
Operator
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of any exclusive rights of access to any MDU Property that redound to the
benefit of System Operator under any Right of Entry.
2.2 SO Properties: Right of Entry. Prior to any solicitation of
orders for DIRECTV Programming by System Operator, System Operator shall submit
to DIRECTV the complete address (including county and zip code) of any MDU
Property for which System Operator has or is seeking a Right of Entry and to
which System Operator intends to market DIRECTV Programming, in order to
confirm that (i) such MDU Property is not already being serviced by another
system operator authorized by DIRECTV and (ii) such MDU Property is not located
in an NRTC Area. In the event an MDU Property is being serviced by another
system operator, DIRECTV will provide System Operator with the name and, to the
extent not prohibited by a confidentiality agreement, telephone number of the
system operator. System Operator shall use commercially reasonable efforts to
maintain a valid Right of Entry for SO Properties for the entire Term of the
Agreement. Such Right of Entry will grant System Operator access to the MDU,
authorizing System Operator to install and maintain the Signal Distribution
System and Components, and granting System Operator permission to solicit
orders for DIRECTV Programming from MDU residents. System Operator shall
promptly forward to DIRECTV a fully executed Right of Entry for all SO
Properties in the Territory. In no event shall System Operator install a Signal
Distribution System in any MDU for which System Operator does not have a valid
Right of Entry and no compensation shall be paid or reimbursed by DIRECTV to
System Operator for any DIRECTV Programming sold to subscribers in a MDU
property unless and until DIRECTV has received a copy of the applicable Right
of Entry for such property. In no event shall System Operator continue to
service an MDU Property without a valid Right of Entry and, in the event System
Operator no longer has a valid Right of Entry with respect to a particular SO
Property, this Agreement shall terminate with respect to such property. System
Operator shall provide written notice to DIRECTV within ten (10) days of any
loss, suspension, or expiration of a Right of Entry.
2.3. Implementation of Signal Distribution System.
(a) Installation of Signal Distribution System and
Components.
(i) System Operator shall design, develop,
install, and maintain a Signal Distribution System for each SO Property which
must materially comply with the DIRECTV Technical Specifications as provided by
DIRECTV to System Operator, the current version of which is set forth in
Exhibit D hereto. DIRECTV reserves the right, in its sole discretion, to amend
or revise and reissue the Technical Specifications, which amendments or
revisions shall be promptly communicated by DIRECTV to System Operator. Upon
any such amendment or revision by DIRECTV to the Technical Specifications,
DIRECTV and System Operator shall discuss in good faith the extent to which
existing Signal Distribution Systems in SO Properties shall comply with such
amended or revised Technical Specifications, it being understood and agreed by
the parties that (i) System Operator shall be under no obligation to modify the
Design (as defined below) of any Signal Distribution System in an SO Property
that has been submitted to DIRECTV pursuant to Section 2.3(a)(ii); and (ii) the
Design for any Signal Distribution Systems submitted to DIRECTV pursuant to
Section 2.3(a)(ii) after receipt of the revised or amended Technical
Specifications shall comply with such revised or amended Technical
Specifications.
(ii) System Operator shall provide to DIRECTV a
design for the installation and integration of each Signal Distribution System
("Design") for each SO Property subject to this
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Agreement, together with a time schedule for installation. In creating,
installing and maintaining any Signal Distribution System, System Operator shall
materially comply with all DSS equipment manufacturers' or Component
manufacturers' policies as may be in effect from time to time. DIRECTV shall
provide to System Operator written notice as soon as commercially practicable,
but in any event prior to the construction start date (as long as System
Operator has provided DIRECTV such Designs at least five business days prior to
such construction start date), after receipt and review of Design(s) if DIRECTV
reasonably believes that any Design will not produce a Signal Distribution
System meeting the Technical Specifications. System Operator shall provide
installation progress reports to DIRECTV periodically or as DIRECTV may
reasonably request, and shall promptly notify DIRECTV of any material changes
to the installation schedule or Design.
(iii) Upon completion of installation, System
Operator shall promptly forward to DIRECTV an updated copy of the Design and
completed Technical Registration Form, included in the Technical Specifications
attached hereto as Exhibit D, which shall include, among other things, various
measurements of the signal from the Signal Distribution System. DIRECTV shall
provide to System Operator written notice as soon as commercially practicable
after receipt and review of the Technical Registration Form if DIRECTV
reasonably believes that such Technical Registration Form indicates that the
Signal Distribution System does not meet the Technical Specifications, and
where possible, DIRECTV shall recommend corrective actions. Unless and until
the Signal Distribution System materially complies with the Technical
Specifications, such MDU Property shall not be considered a SO Property.
(b) Technical Compliance. System Operator shall, at its own
cost and expense, (i) contract with an authorized DSS manufacturer(s) to obtain
DSS equipment and integrate such DSS equipment with any necessary Components to
create the Signal Distribution System, (ii) evaluate and test the Signal
Distribution System to insure material compliance with the Technical
Specifications for each unit in the SO Property, (iii) select Components that
will ensure that the Signal Distribution System materially meets the DIRECTV
Technical Specifications in the MDU Property environment and will allow System
Operator to fulfill its obligations under this Agreement, (iv) develop such
additional hardware or other elements as are necessary for the Signal
Distribution System materially to meet the Technical Specifications and allow
System Operator to fulfill its obligations under this Agreement, (v) provide
such technical demonstrations of the Signal Distribution System in any SO
Property as DIRECTV may require in its reasonable discretion upon advance
written notice to System Operator, at such times mutually agreed upon by the
parties, to provide assurance that the Signal Distribution System will
materially meet the DIRECTV Technical Specifications ("Technical
Demonstration"), and provide DIRECTV the opportunity to participate and provide
input in advance of completion of the Signal Distribution System or distribution
of DIRECTV Programming via the Signal Distribution System, (vi) in connection
with such Technical Demonstration, make such changes to the initial Signal
Distribution System as are reasonably necessary in order for the system
materially to meet the DIRECTV Technical Specifications, and (vii) take all
commercially reasonable actions necessary to ensure that the Signal Distribution
System continues materially to meet the Technical Specifications for the Term of
this Agreement. If at any time during the Term of this Agreement, DIRECTV
determines in good faith that a Signal Distribution System is not in material
compliance with all or any portion of the Technical Specifications, and such
noncompliance interferes with SO Subscribers' ability to receive DIRECTV
Programming of a quality received by other DIRECTV subscribers (i.e., the signal
does not meet the measurement standards), System Operator shall cure such
noncompliance, or commence and diligently
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pursue such cure, within sixty (60) days of DIRECTV's notice of noncompliance
(the "Cure Period"), and provide DIRECTV evidence of correction of such
noncompliance, which evidence may, at DIRECTV's request, include a Technical
Demonstration. Notwithstanding the foregoing, in no event may the Cure Period
last longer than four (4) months. In the event such evidence is not approved by
DIRECTV within the Cure Period, which approval shall not unreasonably be
withheld, DIRECTV shall have the right to cease paying Commissions and
Marketing Supplements due to System Operator with respect to SO Subscribers in
the noncomplying SO Property.
(c) Provision of Signal Distribution System and IRDs.
Except as otherwise provided in the Receiver Support Agreement, System Operator
shall, at its sole cost: (i) acquire and supply Signal Distribution Systems and
individual IRDs (if applicable) to SO Properties at commercially reasonable
prices (unless otherwise agreed to between System Operator and DIRECTV); (ii)
install at a commercially reasonable price and in a timely manner the Signal
Distribution System and any necessary Components which System Operator supplies
to any SO Property; (iii) maintain at commercially reasonable prices the Signal
Distribution System for any SO Properties; and (iv) provide, at a commercially
reasonable price and in a manner satisfactory to DIRECTV, customer service to
all SO Properties, subscribers and potential subscribers related to the supply,
installation and maintenance of the Signal Distribution System. System Operator
agrees to allow all authorized DSS equipment to be used by the SO Subscribers
and the Independent SO Subscribers and agrees to provide the same level of
Signal Distribution System installation and maintenance, and customer service
support, for the Independent SO Subscribers as System Operator does for the SO
Subscribers.
(d) Disclaimer of Warranties. SYSTEM OPERATOR UNDERSTANDS
AND AGREES THAT DIRECTV SHALL HAVE NO RESPONSIBILITY WHATSOEVER FOR ANY SIGNAL
DISTRIBUTION SYSTEM, INCLUDING THE DSS RECEIVER AND COMPONENTS CONTAINED
THEREIN. DIRECTV HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS AND IMPLIED, IN
CONNECTION WITH ANY SIGNAL DISTRIBUTION SYSTEM, INCLUDING THE DSS RECEIVER AND
COMPONENTS CONTAINED THEREIN, THE INSTALLATION AND FUNCTIONING OF SUCH SYSTEM
IN ANY MDU PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES UNDER THE
UNIFORM COMMERCIAL CODE OR OTHERWISE IMPLIED IN LAW. NOTWITHSTANDING THE
FOREGOING, DIRECTV HEREBY ASSIGNS TO SYSTEM OPERATOR ALL MANUFACTURERS' AND
DISTRIBUTORS' WARRANTIES PROVIDED TO DIRECTV OR ANY AFFILIATE REGARDING ALL
EQUIPMENT FOR SIGNAL DISTRIBUTION SYSTEMS UTILIZED AT SO PROPERTIES, INCLUDING
WITHOUT LIMITATION DSS RECEIVERS, IRDS AND ALL COMPONENTS.
(e) New Technology: End-Use Testing. System Operator
understands and acknowledges that the technology (including some or all of the
Components) for providing DIRECTV to multiple-dwelling units is currently being
developed and has not been tested in the MDU environment by DIRECTV. DIRECTV
makes no representation or warranty as to how any commercially available
Components will perform with the DSS system in any particular MDU Property or
how the DSS system itself will perform in certain MDU environments. System
Operator shall be solely responsible for procuring and testing any and all
Components in the end-use environment prior to the design, development and
installation of the Signal Distribution System and for maintenance of any such
Components that fail to perform adequately in the end-use environment in order
that the Signal Distribution System will, at all times during the Term of this
Agreement, materially meet or exceed the
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Technical Specifications. Any material failure of the Signal Distribution
System to meet the Technical Specifications shall be the sole responsibility of
System Operator and System Operator agrees to indemnify and hold DIRECTV
harmless from any and all Claims (as such term is defined in the
Indemnification section of the Terms and Conditions attached hereto as Exhibit
A) from SO Subscribers arising from the failure of the Signal Distribution
System to deliver the necessary signal to such subscribers and from failure of
the Signal Distribution System to meet the Technical Specifications. In the
event of signal failure due to DIRECTV's error or negligence, DIRECTV agrees to
use its best efforts to treat the SO Subscribers equally with other DIRECTV
residential subscribers with respect to restoring service.
2.4 Commission and Payment Structure. The Subscriber Service
Payment Agreement, the DSS Receiver Support Agreement and the following set
forth all payments and commissions to be made by DIRECTV to System Operator as
full consideration for its fulfilling its obligations hereunder.
(a) Payment of Commissions and Marketing Supplements.
DIRECTV will pay System Operator a commission ("Commission") equal to "*"
percent "*" of all Net Receipts received by DIRECTV from each active SO
Subscriber per month for Commissionable Programming Packages, solely with
respect to those Net Receipts received by DIRECTV while this Agreement is in
effect. DIRECTV will further pay System Operator a marketing supplement (the
"Marketing Supplement") equal to "*" percent "*" of all Net Receipts received by
DIRECTV from each active SO Subscriber per month for Commissionable Programming
Packages, solely with respect to those Net Receipts received by DIRECTV while
this Agreement is in effect. The Commissions and Marketing Supplements shall
collectively be referred to herein as "Aggregate Commissions." System Operator
agrees that the Marketing Supplement will be applied by System Operator
throughout the Term of the Agreement toward the marketing of the Commissionable
Programming Packages to MDU Properties. In addition, DIRECTV will pay System
Operator a commission equal to "*" percent "*" of all Net Receipts received by
DIRECTV from each active Previous SO Subscriber per month for Commissionable
Programming Packages, solely with respect to those Net Receipts received by
DIRECTV while this Agreement is in effect. Commissions and Marketing Supplements
will be paid within "*" days after the accounting month in which DIRECTV
receives the Net Receipts.
(b) Commission Exclusion. "***"
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2.5 DIRECTV Programming.
(a) "***" System Operator agrees that all DIRECTV
Programming (including any commercial insertion) shall be exhibited in its
entirety, in original form, as provided by DIRECTV, without any modifications,
additions or deletions except that System Operator may package the programming
secured under the Transport Agreement with the other programming available to
the wireless cable subscribers. Except as provided in the Transport Agreement,
in no event shall System Operator repackage any other programming or services
with DIRECTV Programming. In addition to the DIRECTV Programming packages
DIRECTV currently offers, DIRECTV may create packages of programming specially
targeted for MDU subscribers. "***"
(b) System Operator shall not, and shall use commercially
reasonable efforts to ensure that SO Subscribers, residents and agents of SO
Properties do not, (i) resell, retransmit or rebroadcast or otherwise
redistribute in any manner or form whatsoever any DIRECTV Programming, or (ii)
make any modification, addition, or deletion to any of the DIRECTV Programming
(including any commercial insertions).
2.6 Exclusivity. "***"
2.7 Customer Service. System Operator shall undertake certain
customer service functions as described herein and in the DIRECTV Policy Manual
to all SO Subscribers and Independent SO Subscribers with respect to the
installation and maintenance of the Signal Distribution System and
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acceptance and transmission of orders for DIRECTV Programming. System Operator
agrees to provide the same level of installation and maintenance support for
the Independent SO Subscribers.
2.8 Policies and Procedures. Attached hereto in Exhibit F is a
copy of DIRECTV's System Operator Policies and Procedures Manual, which may be
amended, from time to time upon 60 days prior written notice from DIRECTV (such
Manual, as amended from time to time, the "DIRECTV Policy Manual"). As
DIRECTV's commissioned sales representative, System Operator hereby agrees that
it will materially follow and abide by the policies and procedures related to
soliciting and transmitting subscription orders for and the promotion of
DIRECTV Programming as specified in the DIRECTV Policy Manual. The DIRECTV
Policy Manual includes, among other things, customer authorization procedures,
DIRECTV receivables payment, and various requirements related to taking
subscription orders
ARTICLE III
TERM AND TERMINATION
3.1 Term and Termination.
(a) The term of this Agreement ("Term") shall commence on the
Execution Date and continue until the earlier to occur of (i) the seventh
anniversary of the Execution Date, or (ii) termination by either party pursuant
to the terms of this Agreement. Either party may terminate this Agreement,
effective immediately (i) upon "*" days written notice to the other
party following a material breach of this Agreement by the other party, unless
such material breach is cured, or the defaulting party commences and diligently
pursues such cure, within such period; provided, however, DIRECTV shall not
cease providing programming, or customer service to SO Subscribers; provided,
further, that in no event may the cure period last longer than "*" months;
(ii) upon the filing of a petition in bankruptcy or for reorganization by or
against the other party for the benefit of its creditors, or the appointment of
a receiver, trustee, liquidator or custodian for all or a substantial part of
the other party's property, if such order of appointment is not vacated within
thirty (30) days; and (iii) upon the assignment by the other party of this
Agreement contrary to the terms hereof.
(b) "***"
3.2 Obligations of the Parties Upon Termination or Expiration.
(a) System Operator's Obligations with Respect to
Installations and Activations. System Operator shall cooperate with DIRECTV to
enable DIRECTV or a substitute system operator to promptly perform and complete
all DSS Receiver installations and activations ordered by SO Subscribers and
Independent SO Subscribers prior to the termination of this Agreement according
to the regular installation and activation schedule System Operator used during
the Term of this Agreement; provided, however, and only to the extent that
DIRECTV or such substitute system operator has obtained or been assigned the
Right of Entry for an SO Property. System Operator shall direct all customer
inquiries it
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receives after the termination of this Agreement to DIRECTV (or such other
party as specified by DIRECTV).
(b) DIRECTV's and System Operator's Obligations with
Respect to SO Properties. Following the termination of this Agreement, (i)
DIRECTV may continue to deliver DIRECTV Programming and related services to all
SO Properties in accordance with DIRECTV's then-existing customer service
procedures; and (ii) DIRECTV shall notify the owner, manager or homeowners'
association of the MDU, as appropriate, of termination of System Operator as
DIRECTV's agent and recommend a substitute system operator to provide service to
SO Property with respect to delivery of DIRECTV Programming and services.
Subsequent to any termination or expiration of this Agreement, for a reasonable
transition period, not to exceed "*" days, System Operator shall not
impair the ability of any subscribers and residents of SO Properties to continue
to receive DIRECTV Programming nor shall System Operator impede in any manner
whatsoever DIRECTV's continued access (via the Signal Distribution System) to
deliver DIRECTV Programming to the subscribers and residents in all units of the
SO Property. DIRECTV shall continue to pay Commissions during any such
transition period.
ARTICLE IV
MISCELLANEOUS
4.1 Applicable Law: Entire Agreement: Modification. This Agreement
shall be construed in accordance with and be governed by the laws of the State
of California, applicable to contracts made and to be performed entirely
therein, by residents of the State of California. This Agreement, together with
all Exhibits hereto, the Terms and Conditions, the Transport Agreement, the
Subscriber Service Payment Agreement and the DSS Receiver Support Agreement,
constitute the entire agreement between the parties, and supersedes all
previous understandings, commitments or representations concerning the subject
matter. Each party acknowledges that the other party has not made any
representations other than those that are contained herein. This Agreement may
not be amended or modified, and none of its provisions may be waived, except by
a writing, signed by an authorized officer of the party against whom the
amendment, modification or waiver is sought to be enforced.
4.2 Review Of Agreement By Counsel: Interpretation. By executing,
this Agreement, each of the parties hereto is warranting and representing to
the other that he/she/it has had the opportunity to review this Agreement with
independent legal, financial, and tax counsel with respect to the effect of
each of the terms and conditions contained herein and has either reviewed this
Agreement with such counsel or has independently elected not to proceed with
such a review. Each of the parties further warrants and covenants that
he/she/it is satisfied with the results of such consultation or opportunity to
review and is signing this Agreement as his/her/its free act and deed and not
under any force or coercion. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY RULE
OF LAW, INCLUDING BUT NOT LIMITED TO SECTION 1654 OF THE CALIFORNIA CIVIL CODE,
OR ANY LEGAL DECISION THAT WOULD REQUIRE INTERPRETATION OF ANY CLAIMED
AMBIGUITIES IN THIS AGREEMENT AGAINST THE PARTY THAT DRAFTED IT, HAS NO
APPLICATION AND ANY SUCH RIGHT IS EXPRESSLY WAIVED. The provisions of this
Agreement shall be interpreted in a reasonable manner to effect the intent of
the parties.
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4.3 Counterparts. This Agreement may be executed by the parties in
counterparts, each of which shall be deemed an original and all such
counterparts together shall constitute but one and the same instrument.
4.4 Approvals. If at any time System Operator is required by the
terms of this Agreement to obtain DIRECTV's written approval of any matter,
such approval shall be deemed obtained unless specifically rejected by DIRECTV
within 30 days after DIRECTV's receipt of System Operator's written request for
such approval.
4.5 Right of Offset: "***"
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.
DIRECTV, INC. HEARTLAND WIRELESS
COMMUNICATIONS, INC.
By: /s/ XXXX X. XXXXX
----------------- By: /s/ XXXXXXX X. XXXXXXX
-----------------------
Name: Xxxx X. XxXxx Name: Xxxxxxx X. XxXxxxx
Title: Vice President Title: Chairman and Chief
Executive Officer
Federal Tax ID Number: 00-0000000
----------
DIRECTV Address: System Operator Address:
If By Mail: If By Mail:
0000 Xxxx Xxxxxxxx Xxxxxxx 000 Xxxxxxxx Xxxxx, Xxxxx 000
Xx Xxxxxxx, XX 00000 Xxxxx, Xxxxx 00000
Attention: Vice President, Special Markets Attention: CEO/General Counsel
If By Personal Delivery: If By Personal Delivery:
0000 Xxxx Xxxxxxxx Xxxxxxx 000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000 Xxxxx, Xxxxx 00000
Attention: Vice President, Special Markets Attention: CEO/General Counsel
If by FAX: (000) 000-0000 If by FAX: (2L2) 000-0000
Attention: Vice President, Special Markets Attention: CEO/General Counsel
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EXHIBIT A
DIRECTV MDU SYSTEM OPERATOR AGREEMENT TERMS AND CONDITIONS
[Attached hereto]
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EXHIBIT B
COMMISSIONABLE PROGRAMMING PACKAGES
[Attached hereto]
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EXHIBIT C
NRTC MAP
[Attached hereto]
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EXHIBIT D
TECHNICAL SPECIFICATIONS
[Current Edition attached hereto]
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EXHIBIT E
ADVERTISING GUIDELINES
[Attached hereto]
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EXHIBIT F
DIRECTV SYSTEM OPERATOR POLICIES & PROCEDURES
[Attached hereto)
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"*" Confidential portions of this Agreement have been omitted and filed
separately with the Securities and Exchange Commission under a Confidential
Treatment Request, pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.
EXECUTION COPY
November 12, 1997
Heartland Wireless Communications, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attn: Xxxxxxx X. XxXxxxx
Re: Transport Rights
Dear Xx. XxXxxxx:
Reference is made to that certain DIRECTV Cooperative Marketing Agreement
("Agreement"), dated the 12th day of November, 1997, by and between Heartland
Wireless Communications, Inc. ("System Operator") and DIRECTV, Inc.
("DIRECTV"). Capitalized terms not defined herein shall have the meaning
ascribed to them in the Agreement. All terms and conditions set forth in the
Agreement and the exhibits thereto are hereby incorporated by reference and
shall also apply to the transactions contemplated by this letter agreement
(this "Transport Agreement").
In connection with System Operator's program to establish and maintain
Signal Distribution Systems in MDU Properties and to act as DIRECTV's
commissioned sales representative therein, DIRECTV is willing to provide
certain transport rights to System Operator under the terms and conditions set
forth herein. SUCH RIGHTS ARE INTENDED TO ALLOW SYSTEM OPERATOR TO UTILIZE THE
SATELLITE FEED OF PROGRAMMING PROVIDED BY DIRECTV TO DELIVER DIRECTV
PROGRAMMING TO RESIDENTS OF WIRELESS CABLE PROPERTIES ("RESIDENTS") WHO RECEIVE
SYSTEM OPERATOR'S WIRELESS CABLE SERVICE.
ARTICLE I
DEFINITIONS
1.1 Defined Terms. The following capitalized terms shall have the
following definitions. Certain other capitalized terms shall have the meanings
given them elsewhere in this Transport Agreement or in the Agreement.
"Authorized Service" shall mean each DIRECTV Programming Service (as
defined below) as to which System Operator has executed an agreement with the
provider thereof (an "Affiliation Agreement"), satisfactory to DIRECTV, stating
that (a) System Operator possesses all of the necessary rights (including music
performance rights) to distribute such service as received from the DBS
Distribution System (as defined below) under and pursuant to such provider's
agreement with System Operator regarding distribution of the programming
service, (b) the distribution of such programming service by System Operator
shall not implicate in any way DIRECTV's agreements with the provider of
programming service and (c) in no event shall System Operator or any party to
whom System Operator distributes programming from the DBS Distribution System
pursuant to this Transport Agreement be counted or considered, as a subscriber
or customer of DIRECTV under DIRECTV's agreements with such programming
provider. DIRECTV may revoke the status of any DIRECTV Programming as an
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Authorized Service for failure to meet the definition set forth above, and as
directed by the programming provider for failure to comply with the terms of
the Affiliation Agreement.
"DBS Distribution System" shall mean the distribution system for video,
audio, data and other programming services (including without limitation, cable
programming services) whereby the cable programming satellite signal or feed is
received from DIRECTV's transponder source by a DIRECTV turnaround earth-station
facility which compresses and encrypts the signal or feed and then uplinks it at
one of the DIRECTV Frequencies on a DBS communications satellite located at or
about 101 degrees West Longitude orbital location for transmission to those
parties authorized by DIRECTV.
"DIRECTV Frequencies" shall mean the DBS operating frequencies
associated with the 101 degrees West Longitude orbital location for which
DIRECTV Enterprises, Inc. is the Federal Communications Commission-authorized
permitee.
"DIRECTV Programming Services" shall mean the programming services
described on Exhibit A hereto (as amended from time to time by DIRECTV in its
sole discretion).
"Wireless Cable Property" shall mean a condominium complex, apartment
building (including both rental and cooperative apartments), or townhouse
community, located in the Territory, comprised of multiple dwelling units,
which in each case is occupied by a single family household and is not
generally accessible to the public or otherwise shares a common area to which
there is unrestricted access by two or more persons, and which unit may receive
System Operator's wireless cable service.
ARTICLE II
GENERAL RIGHTS AND OBLIGATIONS
2.1 Grant of Rights.
(a) DIRECTV hereby grants to System Operator the
non-exclusive right to, and System Operator may, at its own cost, access the
Authorized Services provided via the DBS Distribution System for purposes of
distributing such Authorized Services to Wireless Cable Properties in
compliance with the terms of this Transport Agreement.
2.2 Satellite Feed Transmission. The parties acknowledge and agree
that System Operator shall distribute the satellite feed of Authorized Services
provided by DIRECTV to Residents via System Operator's Distribution Equipment
(as defined herein) pursuant to the terms of System Operator's agreements with
the providers of such Authorized Services. The parties further agree that each
such agreement with the providers of the Authorized Services is solely between
System Operator and the relevant provider of Authorized Services and that
DIRECTV bears no responsibility or liability whatsoever to any provider of
DIRECTV Programming Services or to any Wireless Cable Property relating to the
distribution to Residents. System Operator shall be responsible for all fees
and charges required to be paid by or on behalf of each Resident in connection
with the provision of the Authorized Services, including, but not limited to,
any copyright royalty fees.
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2.3 Performance Requirements.
Beginning "*" days following the date of the initial distribution by
System Operator of Authorized Services to any Resident, System Operator must
meet or exceed an "Aggregate Subscriber Penetration" of at least "***" . For
purposes of this Section, the term "Aggregate Subscriber Penetration" shall mean
the "***". The parties acknowledge the practical problems associated with
determining at any given time the number of occupied units and therefore agree
that the number of occupied units shall be presumed to be "*" of all occupiable
units. In the event System Operator fails to meet or exceed the "*" Aggregate
Subscriber Penetration for any calendar quarter, then DIRECTV, upon written
notice to System Operator, shall require System Operator to pay monthly
transport fees ("Transport Fees") for each Resident receiving Authorized
Services based on the following schedule:
"***"
Transport Fees shall be payable within "*" days after the end of the
calendar month in which they are incurred, and shall be accompanied by a
statement certified by System Operator's Chief Financial Officer or Controller
setting forth the basis on which the Transport Fees are submitted, including,
the number of Authorized Services and Residents for such month, as well as any
other information as may be reasonably requested by DIRECTV. System Operator's
obligation to pay Transport Fees will cease beginning in any calendar quarter
following a calendar quarter in which System Operator has maintained at least a
"*" Aggregate Subscriber Penetration for the entire quarter.
Notwithstanding the foregoing Transport Fee rate schedule, in the
event the Aggregate Subscriber Penetration drops below "*" percent "*" at any
time following the initial "*" days following the date of the initial
distribution by System Operator of Authorized Services to any Resident, DIRECTV
shall have the right, in its sole discretion, to notify System Operator of its
intent to terminate this Transport Agreement if during the "*" period following
receipt of such notice, System Operator's Aggregate Subscriber Penetration is
not increased to "*" or above. At the end of such "*" period, DIRECTV shall have
the right, in its sole discretion, to terminate this Transport Agreement
immediately upon written notice to System Operator.
2.4 Activation Information. System Operator shall forward to
DIRECTV a notice when a Wireless Cable Property is ready for activation, which
notice shall contain such information regarding the Wireless Cable Property as
may be reasonably requested by DIRECTV (the "Activation Request"). Only after
receiving and approving the Activation Request from System Operator shall
DIRECTV be obligated to arrange for the necessary authorization messages to the
Distribution Equipment.
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2.5 DIRECTV Programming. System Operator shall distribute each
Authorized Service in its entirety, in the original format and as provided by
DIRECTV. System Operator shall not modify, add to, delete or in any way alter
the satellite feed provided by DIRECTV, or insert any commercial announcement or
other materials in such feed.
2.6 Provision, Installation and Maintenance of Hardware: Disclaimer of
Warranty. "***" SYSTEM OPERATOR UNDERSTANDS AND AGREES THAT DIRECTV HAS NO
RESPONSIBILITY WHATSOEVER FOR THE DISTRIBUTION EQUIPMENT OR FOR THE PROVISION OF
THE SERVICES BY SYSTEM OPERATOR TO ITS RESIDENTS AND THAT DIRECTV HEREBY
DISCLAIMS ALL WARRANTIES, EXPRESS AND IMPLIED, IN CONNECTION WITH THE
DISTRIBUTION EQUIPMENT. ALL SUCH WARRANTIES ARE EXPRESSLY EXCLUDED. DIRECTV IS
NOT RESPONSIBLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT
LIMITATION, RELATING TO THE DISTRIBUTION EQUIPMENT. NOTWITHSTANDING THE
FOREGOING, DIRECTV HEREBY ASSIGNS TO SYSTEM OPERATOR ALL MANUFACTURERS' AND
DISTRIBUTORS' WARRANTIES PROVIDED TO DIRECTV OR ANY AFFILIATE REGARDING THE
DISTRIBUTION EQUIPMENT UTILIZED AT WIRELESS CABLE PROPERTIES.
ARTICLE III
TERM AND TERMINATION
3.1 Term. The term of this Transport Agreement (the "Term") shall
commence on the date first written above ("Execution Date") and continue until
the earliest to occur of (i) the seventh anniversary of the Execution Date, or
(ii) the termination of the Agreement for any reason, or (iii) any date on which
this Transport Agreement is terminated pursuant to the terms of this Transport
Agreement or at law.
3.2 Termination. Either party may terminate this Transport Agreement,
at any time upon any of the following occurrences: (a) upon the failure by the
other party, its successors or assignees to perform any material obligation
hereunder which is not cured or as to which reasonable steps to cure have not
been commenced (or are not thereafter diligently pursued) within "*" days
after receipt of written notice thereof from the affected party (provided,
however, that such cure period may not last longer than "*" months); or (b)
upon the assignment by the other party of this Transport Agreement contrary to
the terms hereof. Termination of this Transport Agreement pursuant to this
Section 3.2 shall not relieve either party of any of its liabilities or
obligations under this Transport Agreement which shall have accrued on or prior
to the date of such termination.
3.3 Renewal. "***"
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 System Operator. System Operator hereby represents, warrants
and covenants that:
(a) System Operator shall materially comply with and
abide by any and all agreements and/or requirements as may be requested by
providers of Authorized Services, each as applicable to System Operator and its
employees and agents in connection with the performance of its obligations
pursuant to this Transport Agreement;
(b) Prior to distributing any Authorized Service at a
Wireless Cable Property, System Operator shall have in effect, and shall
maintain in full force and effect throughout the Term or shall immediately
notify DIRECTV if not in full force and effect, (i) agreements with the
providers of Authorized Services granting to System Operator those rights
necessary to permit System Operator to distribute the Authorized Services to SO
Properties and (ii) agreements with such providers containing provisions
necessary to qualify such programming provided as Authorized Services (true and
complete copies of such agreements qualifying such programming shall be
attached hereto as Exhibit B). System Operator shall, from time to time as
agreements are signed with additional program providers, provide to DIRECTV,
for its approval in granting additional Authorized Services, true and complete
copies of those agreements containing provisions necessary to qualify such
programming as Authorized Services; and
(c) System Operator shall, at its sole expense, obtain
all permits and licenses which may be required under any applicable federal,
state or local law, rule, regulation or ordinance to perform its obligations
pursuant to this Transport Agreement.
4.2 DIRECTV. DIRECTV hereby represents, warrants and covenants
that DIRECTV shall, at its sole expense, obtain all permits and licenses which
may be required under any applicable federal, state or local law, rule,
regulation or ordinance to perform its obligations pursuant to this Transport
Agreement.
4.3 No Warranty. System Operator understands and agrees that
DIRECTV makes no warranty whatsoever concerning the rights of any provider of
programming, or any other person or entity, to offer, provide or utilize the
DBS Distribution System, including without limitation, the Authorized Services,
or any programming contained therein.
ARTICLE V
ADDITIONAL RIGHTS AND OBLIGATIONS
5.1 Indemnification.
(a) In addition to those indemnification obligations
contained in the Agreement, System Operator shall indemnify and hold harmless
each of DIRECTV, its Affiliated Companies (as defined below), and their
respective employees, officers, directors, contractors, subcontractors and
authorized distributors (the "DIRECTV Indemnitees") from and against any and
all claims, damages, costs, expenses and other liabilities (including
attorneys' fees and other costs of investigation and
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defense) (collectively, "Claims") arising out of, directly or indirectly, (i)
any breach or alleged breach of System Operator's obligations under this
Transport Agreement, (ii) any negligence in the performance of System
Operator's obligations under this Transport Agreement, (iii) any failure or
alleged failure by System Operator to obtain any necessary trademarks,
copyrights, licenses and any other intellectual property or use rights required
in connection with System Operator or the Residents' use of, or for DIRECTV's
distribution to System Operator of, the Authorized Services (including without
limitation, the right to use any of its programs, or the names, voices,
photographs, music, likenesses or biographies of any individual participant or
performer in, or contributor to, any program or any variations thereof), (iv)
System Operator's installation and/or maintenance of the Distribution Equipment
or any other equipment utilized in connection with the provision of services to
Residents, or (v) DIRECTV's feed transmission via the DBS Distribution System,
System Operator's distribution, or the cessation of either such feed
transmission or distribution of Authorized Services, to Residents (including,
without limitation, Claims for license fees by any person or entity and all
Claims by any programmer or any rights holder). As used in this Transport
Agreement, "Affiliated Companies" shall mean, with respect to any person or
entity, any other person or entity directly or indirectly controlling,
controlled by or under common control (i.e., the power to direct affairs by
reason of ownership of voting stock, by contract or otherwise) with such person
or entity and any member, director, officer or employee of such person or
entity.
(b) DIRECTV shall indemnify and hold harmless each of
System Operator, its Affiliated Companies, and their respective employees,
officers, directors, contractors, subcontractors and authorized distributors
from and against any and all Claims arising out of, directly or indirectly, any
breach or alleged breach of DIRECTV's obligations under this Transport
Agreement.
(c) Notwithstanding anything to the contrary contained
herein, System Operator expressly waives any right to indemnification arising
primarily out of (i) the content of any programming (including without
limitation claims relating to trademark, copyright, music, performance and
other proprietary interests), or (ii) the construction, use and/or operation of
DIRECTV's satellite(s) and related systems.
(d) Termination of this Transport Agreement shall not
affect the continuing obligations of the parties hereto as indemnitors
hereunder.
5.2 No Unauthorized Warranties or Representations. System
Operator shall not make any warranty or representation inconsistent with or in
addition to any warranty or representation stated in writing by DIRECTV. If
System Operator makes any such inconsistent or additional warranty or
representation, System Operator shall, at its own expense, indemnify, defend
and hold DIRECTV harmless from any claim relating thereto.
5.3 Cessation of Distribution/Termination of Transport Agreement.
"***"
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5.4 Force Majeure. Notwithstanding any other provision in this
Transport Agreement, neither System Operator nor DIRECTV shall have any
liability to the other or any other person or entity with respect to any
failure of System Operator or DIRECTV to perform its obligations under the
terms of this Transport Agreement if such failure is due to a Force Majeure.
"Force Majeure" shall mean any labor dispute; fire; flood; earthquake; riot;
legal enactment; government regulation; Act of God; any problem associated with
the construction, use and/or operation of DIRECTV's satellite(s) or related
systems; any problem associated with any scrambling/descrambling equipment or
any other equipment owned or maintained by others; or any cause beyond the
reasonable control of both parties.
5.5. Approvals. If at any time System Operator is required by the
terms of this Transport Agreement to obtain DIRECTV's written approval of any
matter, such approval shall be deemed obtained unless specifically rejected by
DIRECTV within 30 days after DIRECTV's receipt of System Operator's written
request for such approval.
5.6 Right of Offset: Payment. "***"
IN WITNESS WHEREOF, the parties have caused this Transport Agreement
to be executed as of the date first above written.
DIRECTV, INC. HEARTLAND WIRELESS
COMMUNICATIONS, INC.
BY: /s/ XXXX XxXXX BY: /s/ XXXXXXX X. XxXXXXX
--------------------------- -------------------------------
Name: Xxxx XxXxx Name: Xxxxxxx X. XxXxxxx
Title: Vice President Title: Chairman and CEO
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EXHIBIT A
DIRECTV PROGRAMMING SERVICES
"*"
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EXHIBIT B
PROGRAM PROVIDER AGREEMENTS
[None provided as of date of Agreement]
28
"*" Confidential portions of this Agreement have been omitted and filed
separately with the Securities and Exchange Commission under a Confidential
Treatment Request, pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.
EXECUTION COPY
November 12, 1997
Heartland Wireless Communications, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attn: Xxxxxxx X. XxXxxxx
RE: Subscriber Service Payment
Dear Xx. XxXxxxx:
Reference is made to that certain DIRECTV Cooperative Marketing Agreement
("Agreement") dated the 12th day of November, 1997 between Heartland Wireless
Communications, Inc. ("System Operator") and DIRECTV, Inc. ("DIRECTV").
Capitalized terms not defined herein shall have the meaning ascribed to them in
the Agreement. All terms and conditions set forth in the Agreement (including
the exhibits thereto) are hereby incorporated by reference and shall also apply
to the transactions contemplated by this letter agreement (the "Subscriber
Service Payment Agreement").
In support of DIRECTV's program to introduce DIRECTV programming services
to residents of MDU Properties, DIRECTV agrees to help offset System Operator's
future expenses associated with the maintenance and servicing of SO
Subscribers.
DIRECTV will pay, on a one-time basis, "*" to System Operator for each
activation of Commissionable Programming Packages for each SO Subscriber
("Subscriber Service Payment") provided the following conditions and
requirements are met:
1. System Operator shall have submitted all required Subscriber Information
for each SO Subscriber in accordance with the Agreement.
2. DIRECTV will continue to pay the Subscriber Service Payment to System
Operator throughout the term of this Subscriber Service Payment Agreement;
provided, however, that with respect to each SO Property, System Operator
may only receive Subscriber Service Payments up to the total number of
units in such SO Property.
3. The SO Subscriber must subscribe to and pay for a Commissionable
Programming Package for a minimum of "*" months for System Operator to
be eligible to receive the entire Subscriber Service Payment; if an SO
Subscriber cancels, is disconnected or downgrades to a DIRECTV
programming package which is not a Commissionable Programming Package
prior to such time, System Operator shall be entitled to receive only a
prorated portion of the Subscriber Service Payment based on the number of
months the SO Subscriber subscribed to and paid for a Commissionable
Programming Package (the "Prorated Subscription Period").
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4. System Operator must be in compliance with all material terms and
conditions of the Agreement.
DIRECTV shall pay to System Operator the Subscriber Service Payment within
"*" days after the accounting month, as such accounting month is determined by
DIRECTV, of such SO Subscriber activation.
"***"
The term of this Subscriber Service Payment Agreement shall commence on
the date first above written ("Execution Date") and continue until the earliest
to occur of (i) the seventh anniversary of the Execution date, or (ii)
termination of the Agreement, or (iii) termination by either party of this
Subscriber Service Payment Agreement pursuant to the terms hereof. "***"
If at any time System Operator is required by the terms of this Subscriber
Service Payment Agreement to obtain DIRECTV's written approval of any matter,
such approval shall be deemed obtained unless specifically rejected by DIRECTV
within 30 days after receipt by DIRECTV of System Operator's written request
for such approval.
Kindly acknowledge your agreement to the foregoing terms by signing in the
space provided below.
Good selling.
DIRECTV, INC.
By: /s/ XXXX XxXXX
----------------------------
Xxxx XxXxx
Vice President
Special Markets & Distribution
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Agreed and Accepted:
By: Heartland Wireless Communications, Inc.
---------------------------------------
System Operator Name
/s/ XXXXXXX X. XxXXXXX
---------------------------------------
Signature
Xxxxxxx X. XxXxxxx
---------------------------------------
Print Name
Chairman and CEO
---------------------------------------
Title
November 7, 1997
---------------------------------------
Date
31
"*" Confidential portions of this Agreement have been omitted and filed
separately with the Securities and Exchange Commission under a Confidential
Treatment Request, pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.
EXECUTION COPY
November 12, 1997
Heartland Wireless Communications, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attn: Xxxxxxx X. XxXxxxx
Re: DSS Receiver Support
Dear Xx. XxXxxxx:
Reference is made to that certain DIRECTV Cooperative Marketing
Agreement ("Agreement"), dated the 12 day of November, 1997, by and between
Heartland Wireless Communications, Inc. ("System Operator") and DIRECTV, Inc.
("DIRECTV"). Capitalized terms not defined herein shall have the meaning
ascribed to them in the Agreement. All terms and conditions set forth in the
Agreement and the exhibits thereto are hereby incorporated by reference and
shall also apply to the transactions contemplated by this letter agreement
(this "DSS Receiver Support Agreement").
"***"
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The provision of DSS Receivers hereunder is subject to the following
conditions:
1. System Operator must be in compliance with all material terms
and conditions of the Agreement.
2. System Operator must submit all required Subscriber Information
for each SO Subscriber in material compliance with the Agreement. System
Operator must further maintain, and submit upon the request of DIRECTV,
inventory records reflecting the receipt of DSS Receivers from DIRECTV as well
as the placement of such DSS Receivers in Units.
3. "***"
4. System Operator shall be responsible for all taxes and shipping
charges in connection with the DSS Receivers.
5. "***"
6. "***"
7. The DSS Receivers are provided to System Operator "AS IS," and
System Operator shall own such DSS Receivers (subject to the repossession
provisions described herein). System Operator shall be solely responsible for
the proper installation and maintenance and all costs associated therewith. In
the event DIRECTV determines, after its receipt of written notification from
System Operator, that a DSS Receiver is not in proper working order, DIRECTV
will, for a one-year period following the date the DSS Receiver is received by
System Operator, provide a one-time replacement of such equipment
("Replacement DSS Receiver") to System Operator provided, however, that the
following conditions are met: (a) DIRECTV determines that the DSS Receiver is
not malfunctioning due to negligence or abuse by System Operator, SO Subscriber
or any other third party; (b) if a new Access Card is provided due to damage to
or loss or theft of the original Access Card, System Operator shall be
responsible for paying the Access Card Replacement Fee thereon, (c) System
Operator shall be responsible for all costs associated with deinstalling the
original DSS Receiver, installing the Replacement
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DSS Receiver, all costs associated with returning the original DSS Receiver to
DIRECTV, and the cost of shipping insurance in an amount reasonably specified
by DIRECTV.
8. EXCEPT AS EXPRESSLY PROVIDED HEREIN, DIRECTV MAKES NO WARRANTY,
EITHER EXPRESSED IMPLIED (INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE), REGARDING THE DSS
RECEIVERS. ALL SUCH WARRANTIES ARE EXPRESSLY EXCLUDED. DIRECTV IS NOT
RESPONSIBLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT
LIMITATION, LOST PROFITS, RELATING TO THE DSS RECEIVERS, WHETHER BASED IN
NEGLIGENCE OR OTHERWISE. NOTWITHSTANDING THE FOREGOING, DIRECTV HEREBY ASSIGNS
TO SYSTEM OPERATOR ALL MANUFACTURERS' AND DISTRIBUTORS WARRANTIES PROVIDED TO
DIRECTV FOR DSS RECEIVERS UTILIZED AT SO PROPERTIES.
9. System Operator agrees to indemnify, defend and hold DIRECTV, its
officers, employees, agents and representatives harmless from and against any
and all claims, damages, liabilities, expenses (including reasonable attorneys'
fees and costs of litigation), losses, judgments and assessments of any kind
whatsoever directly or indirectly resulting from or in connection with System
Operator's use of the DSS Receivers. System Operator acknowledges and agrees
that, except for the limited remedy provided in the preceding paragraph and the
paragraph 7 any rights and remedies with respect to the DSS Receivers must be
handled directly with the manufacturer of such systems, not with DIRECTV.
10. "***"
11. "***"
12. "***"
****
The term of this DSS Receiver Support Agreement shall commence on the
date first above written ("Execution Date") and continue until the earliest to
occur of (i) the seventh anniversary of the Execution Date, or (ii) termination
by either party of this DSS Receiver
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Support Agreement pursuant to the terms hereof. "***"
If at any time System Operator is required by the terms of this DSS
Receiver Support Agreement to obtain DIRECTV's written approval of any matter,
such approval shall be deemed obtained unless specifically rejected by DIRECTV
within 30 days after receipt by DIRECTV of System Operator's written request
for such approval.
"***" The parties shall negotiate in good faith to resolve any
disputed amounts alleged to be owed under this DSS Receiver Support Agreement
for 30 days before taking other action under this DSS Receiver Support
Agreement, at law or in equity. Except as specifically provided herein, nothing
in this DSS Receiver Support Agreement shall operate as a waiver of either
party's rights under this DSS Receiver Support Agreement at law or in equity.
"***"
Except as supplemented and modified hereby, the terms of the Agreement
continue unmodified and in full force and effect.
Please sign in the space provided below to indicate your agreement to
the foregoing terms and conditions.
Good selling.
DIRECTV, INC.
By: /s/ XXXX XXXXX
------------------------------
Xxxx XxXxx
Vice President
Special Markets & Distribution
Agreed and Accepted:
Heartland Wireless Communications, Inc.
By: /s/ XXXXXXX X. XXXXXXX
------------------------------
Xxxxxxx X. XxXxxxx
Chairman and CEO
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