EXHIBIT 10.1
MMDS AFFILIATION AGREEMENT
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EXHIBIT 10.1
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION
MMDS AFFILIATION AGREEMENT
MMDS AFFILIATION AGREEMENT (this "Agreement") dated as of the 4th day of
August, 1997 by and between TelQuest Satellite Services LLC, a Delaware
limited liability company ("TelQuest"), and CS Wireless Systems, Inc., a
Delaware corporation ("Affiliate").
RECITALS:
A. TelQuest intends to develop and operate a satellite system
("Satellite System") utilizing transponders initially on C-band and
subsequently on Ku-band frequencies for the purpose of providing digital
video information and data through MMDS operators (i) for MMDS head-end
in-the-sky services ("HITS Services") and (ii) for direct-to-home ("DTH")
subscription services ("DTH Services" and together with HITS Services, the
"Satellite Services").
B. Affiliate currently owns or holds a majority interest in and
operates MMDS wireless cable systems through which Affiliate provides video
programming services to its subscribers and such wireless cable systems are
identified on SCHEDULE A hereto (the wireless cable systems identified in
this recital, together with any additional or subsequent systems as may be
added from time to time in accordance herewith, hereinafter referred to
collectively as the "Affiliate Systems" and individually as an "Affiliate
System").
C. Affiliate desires to utilize TelQuest's Satellite System for the
purpose of enhancing Affiliate's provision of video programming services to
its subscribers.
D. TelQuest agrees to provide Satellite Services to Affiliate on the
Satellite System by providing HITS Services to Affiliate's head-ends and DTH
Services directly to Affiliate DTH Subscribers (as defined below) in
Affiliate's Service Area (as defined below), and Affiliate agrees to purchase
the Satellite Services, on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, the parties agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall
have the
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meanings assigned to them below:
a. "AGREEMENT" means this MMDS Affiliation Agreement dated as of
August 4, 1997 by and between TelQuest and Affiliate.
b. "AFFILIATE" has the meaning set forth in the Preamble.
c. "AFFILIATE SUBSCRIBERS" shall mean, collectively, all the
Affiliate DTH Subscribers and all of the Affiliate MMDS Subscribers.
d. "AFFILIATE DTH SUBSCRIBERS" shall mean all subscribers receiving
TelQuest Programming through the utilization of the DTH Services hereunder
and, for purposes of SECTION 9, the sum of (a) the average number of
residential (individual dwelling unit) customers who (i) have been receiving
TelQuest Programming during the last thirty (30) days and (ii) are not
currently more than sixty (60) days past due on their account or pending
disconnection for any reason and (b) commercial and multiple dwelling unit
("MDU") accounts, such as hotels, motels, apartment houses and multifamily
homes, provided that the number of "Affiliate DTH Subscribers" serviced by
each commercial and MDU account shall be deemed to be an amount equal to the
quotient of (x) the monthly basic service revenue derived from such
commercial and MDU account (excluding any charges for taxes or other
non-recurring items) divided by (y) the Affiliate's per subscriber charge for
DTH Service.
e. "AFFILIATE MMDS SUBSCRIBERS" shall mean all residential,
commercial and bulk-billed customers receiving TelQuest Programming through
the utilization of the HITS Services hereunder, via either digital MMDS or a
hybrid MMDS transmission platform, and, for purposes of SECTION 9, the sum of
(a) the average number of residential (individual dwelling unit) customers
who (i) have been receiving TelQuest Programming during the last thirty (30)
days and (ii) are not currently more than sixty (60) days past due on their
account or pending disconnection for any reason and (b) commercial and MDU
accounts, such as hotels, motels, apartment houses and multifamily homes,
provided that the number of "Affiliate MMDS Subscribers" serviced by each
commercial and MDU account shall be deemed to be an amount equal to the
quotient of (x) the monthly basic service revenue derived from such
commercial or MDU account (excluding any charges for taxes or other
non-recurring items) divided by (y) the Affiliate's per subscriber charge for
service.
f. "AFFILIATE SYSTEM(S)" has the meaning set forth in the Recitals.
g. "BTA" shall mean Basic Trading Area.
h. "CPE" has the meaning set forth in SECTION 16.
i. "CPI" shall mean the Consumer Price Index (All items) for the
Urban Consumers/U.S. (New Series) as published by the United States
Department of Labor, Bureau of Labor Statistics, or such other index as
mutually agreed upon between TelQuest and
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Affiliate.
j. "DTH" has the meaning set forth in the Recitals.
k. "DTH SERVICES" has the meaning set forth in the Recitals.
l. "FORCE MAJEURE" has the meaning set forth in SECTION 13.
m. "HITS SERVICES" has the meaning set forth in the Recitals.
n. "INDEMNIFIED PARTY" has the meaning set forth in SECTION 20.
o. "INDEMNIFYING PARTY" has the meaning set forth in SECTION 20.
P. "INITIAL TERM" has the meaning set forth in SECTION 2.
q. "IRT(S)" has the meaning set forth in SECTION 3(b).
r. "LAUNCH DATES" has the meaning set forth in SECTION 3(d).
s. "MONTHLY FEE" has the meaning set forth in SECTION 9.
t. "PERFORMANCE STANDARDS" has the meaning set forth in
SECTION 15(a).
u. "SATELLITE(S)" shall mean the C-band satellite and/or
Ku-band satellite on which TelQuest leases transponder capacity for the
provision of the Satellite Services.
v. "SATELLITE SERVICES" has the meaning set forth in the
Recitals.
w. "SATELLITE SYSTEM" has the meaning set forth in the
Recitals.
x. "SERVICE AREA" is the BTA for a given Affiliate System as
specified on SCHEDULE A.
y. "SUCCESSOR SATELLITE(S)" shall mean any replacement or
successor satellites(s) to the initial Satellites on which TelQuest leases
transponder capacity for the provision of the Satellite Services.
z. "TECHNICAL SPECIFICATIONS" has the meaning set forth in
SECTION 5.
aa. "TELQUEST" has the meaning set forth in the Preamble.
bb. "TELQUEST PROGRAMMING" has the meaning set forth in SECTION
4(a).
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cc. "TERM" has the meaning set forth in SECTION 2.
dd. "TRANSPONDER AGREEMENT" has the meaning set forth in
SECTION 18(e).
ee. "UPLINK FACILITIES" has the meaning set forth in SECTION
6(a).
2. TERM. TelQuest shall commence providing Satellite Services under
this Agreement as of September 1, 1997. This Agreement will commence as of
the date hereof and shall continue for a period of ten (10) years (the
"Initial Term") unless sooner terminated in accordance with SECTION 22.
Thereafter, this Agreement shall be automatically renewed for additional
five-(5) year terms unless either party gives written notice of its desire
and intention to terminate at least one (1) year prior to the expiration of
the Initial Term or any five-(5) year renewal term thereafter (the Initial
Term together with any renewal term hereinafter referred to as the "Term").
3. PROVISION OF SATELLITE SERVICES.
a. TelQuest hereby agrees to provide Satellite Services to
Affiliate by delivering the TelQuest Programming to the Satellite(s), causing
the transmission of the TelQuest Programming by the Satellite(s) to the
Affiliate's head-end(s) and subscribing consumer residences, and authorizing
Affiliate's reception of TelQuest HITS Service at Affiliate's head-end(s) and
authorizing consumer reception of TelQuest's DTH Services at subscribing
consumer residences in the Service Areas. TelQuest shall provide Satellite
Services via uplink facilities and satellites owned, leased or operated by
TelQuest or via service agreements with other suitable satellite, and/or
satellite uplink providers. TelQuest's uplink facilities will initially be
located in Hawley, PA. Affiliate acknowledges that initially, TelQuest shall
provide only HITS Services under this Agreement until such time as TelQuest
is capable of providing both HITS and DTH Services. In the event TelQuest is
unable to provide DTH Services, this Agreement shall remain in full force
and effect with respect to TelQuest's provision of HITS Services in
accordance with the terms of this Agreement.
b. In connection with the HITS Services, TelQuest shall deliver
TelQuest Programming to the Satellite(s), cause the transmission of the
TelQuest Programming by the Satellite(s) to the Affiliate's head-ends and
authorize each Affiliate System head-end Integrated Receiver Transcoder
("IRT") to receive the signals for TelQuest Programming in accordance with
the Technical Specifications. Affiliate shall, at its own cost and expense,
obtain and install one or more satellite earth stations, a sufficient number
of IRTs to receive TelQuest Programming, and any other equipment and software
necessary to receive, digitally reprocess and distribute the HITS Services
signals. Each such digital head-end shall be operational and maintained by
Affiliate in good working order and in compliance with all applicable laws.
It shall be the responsibility of Affiliate to activate and "turn-on" the
Affiliate MMDS Subscribers.
c. In connection with the DTH Services, TelQuest shall deliver
TelQuest
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Programming to the Satellite(s), cause the transmission of the TelQuest
Programming by the Satellite(s) to the subscribing consumer residences and
authorize receivers installed by Affiliate or its agent(s) at subscribing
consumer residences to receive the signals of TelQuest Programming.
d. Affiliate shall be responsible for the reception of the
Satellite System transmission of TelQuest Programming for HITS Services and
shall cause TelQuest Programming to be delivered on Affiliate Systems
commencing with the respective launch dates ("Launch Dates") for Affiliate
Systems set forth on SCHEDULE A. Affiliate shall diligently endeavor to
commence delivering TelQuest Programming on the applicable Launch Dates, and
in the event Affiliate begins delivering TelQuest Programming on any date
other than that set forth as the anticipated Launch Date, Affiliate shall
promptly notify TelQuest in writing of such actual Launch Date. In the event
Affiliate does not commence delivering TelQuest Programming within ninety
(90) days following the anticipated Launch Date, TelQuest shall have a right
to (i) terminate satellite services with respect to such Affiliate System or
(ii) revoke exclusivity for the Service Area of such Affiliate System.
Affiliate may add Affiliate Systems in areas not serviced by TelQuest with
applicable Launch Dates as the Affiliate in its discretion desires during the
Term, but shall do so only upon written approval by TelQuest, which shall not
be unreasonably withheld, on no less than thirty (30) days' prior written
notice to TelQuest to which TelQuest agrees to respond in writing within
fifteen (15) days, and upon such approval said Affiliate Systems and Launch
Dates shall be incorporated herein by reference.
e. Affiliate shall deliver that portion of the TelQuest
Programming to Affiliate MMDS Subscribers as it chooses in its sole
discretion, subject to the terms of Affiliate's MMDS carriage agreements and
digital transport amendments. Affiliate will use reasonable commercial
efforts to ensure TelQuest Programming will be received only by Affiliate
MMDS Subscribers who are identified, charged for and pay a special charge for
the privilege of receiving TelQuest Programming, or are otherwise authorized
to receive TelQuest Programming. TelQuest reserves the right to terminate
this Agreement should said Affiliate fail to utilize reasonable commercial
efforts in ensuring sufficient and reasonable security to prohibit, to the
extent possible, unauthorized reception of TelQuest Programming.
f. Affiliate shall not deliver or make available TelQuest
Programming to any Affiliate Subscriber except in accordance with the
payments to TelQuest provided for in SECTION 8.
g. In the event TelQuest has reason to believe that TelQuest
Programming is being received by an unauthorized person or persons within a
given Service Area, TelQuest shall notify Affiliate. Affiliate shall take
such reasonable steps as are appropriate to investigate such information and
take reasonable actions to ensure that TelQuest Programming is received only
by authorized persons, including the initiation of legal action; provided,
however, Affiliate shall only be required to take such action if such
unauthorized use is the result of an act or omission of Affiliate. TelQuest
also reserves the right to take whatever legal action is necessary in its
sole discretion to prosecute and prevent those who are the unauthorized
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recipients of TelQuest Programming from obtaining same within the
jurisdiction of the Service Area of Affiliate. In the event TelQuest
determines to commence legal action, it shall first notify Affiliate at least
ten (10) days prior to commencing such action.
4. TELQUEST PROGRAMMING.
a. TelQuest shall initially deliver the digital video programming
("TelQuest Programming") listed on SCHEDULE B hereto, which has been approved
in advance by Affiliate. TelQuest shall have the right in its sole
discretion to add or remove programming to and from the TelQuest Programming
line-up from time to time upon notice to Affiliate. TelQuest shall determine
in its sole discretion the TelQuest Programming to be delivered to
Affiliate's DTH Subscribers.
b. In connection with procuring TelQuest Programming for the
provision of HITS Service, TelQuest shall provide Affiliate with execution
copies of digital transport amendments to Affiliate's MMDS carriage
agreements with programmers in order to permit Affiliate to access TelQuest's
digital satellite feed of such programming as part of the HITS Service.
TelQuest shall use reasonable commercial efforts to assist in facilitating
such arrangements with programmers, and Affiliate agrees to cooperate in such
effort. Affiliate shall be solely responsible for any and all programming
costs associated with the TelQuest Programming delivered in connection
with the HITS Service. Affiliate represents to TelQuest that it has, or will
have prior to launching HITS Service in its Service Area(s), for each of its
Service Areas, MMDS carriage agreements with programmers covering all of the
initial TelQuest Programming to be delivered by TelQuest in connection
with the HITS Service. Affiliate shall maintain all such MMDS carriage
agreements in full force and effect during the Term as necessary to comply
with the terms of this Agreement. At the request of Affiliate, TelQuest
shall use reasonable efforts to assist Affiliate in facilitating MMDS
carriage agreements with programmers through the services of Wireless
Programming Cooperative, L.L.C.
c. In connection with procuring TelQuest Programming for the
provision of DTH Service, TelQuest shall enter into DTH affiliation
agreements with programmers in order to permit TelQuest to deliver such
programming to Affiliate's DTH Subscribers as part of the DTH Service.
TelQuest shall be solely responsible for any and all programming costs
associated with the TelQuest Programming delivered by TelQuest in connection
with the DTH Service. Affiliate and TelQuest agree to cooperate in
addressing and remedying any double payments to programmers resulting from
the provision of HITS Service and DTH Service to Affiliate Subscribers.
5. TECHNICAL SPECIFICATIONS FOR SATELLITE SERVICES.
The initial technical specifications with respect to the receipt of
the Satellite Services on TelQuest's Satellite System are set forth on
SCHEDULE C hereto (the "Initial Technical Specifications"). The parties
agree to cooperate in establishing and coordinating
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additional technical specifications for the receipt of Satellite Services
(the "Additional Technical Specifications" together with the Initial
Technical Specifications, the "Technical Specifications").
6. MODIFICATIONS AND MAINTENANCE OF THE SATELLITE SYSTEM.
a. TelQuest shall have the responsibility during the Term, at
TelQuest's sole cost and expense to operate and maintain TelQuest's satellite
uplink facilities (the "Uplink Facilities") for the Satellite System as may
be necessary to provide the Satellite Services to the Affiliate Systems as
provided herein.
[CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED WITH THE COMMISSION]
b. TelQuest will upgrade its Uplink Facilities at its own cost from
time to time as it deems necessary to take advantage of future improvements
in digital encoding and compression and related technologies, in accordance
with the Technical Specifications, in order to increase the quality and/or
quantity of the TelQuest Programming to be provided to the Affiliate Systems
hereunder.
c. TelQuest shall (a) at all times preserve and keep in full force
and effect the rights material to its business and (b) comply at all times
and in all material respects with the provisions of all permits, licenses or
other similar authorizations relating to such business, including without
limitation any obligations or agreements with respect to signal transmission,
certifications and permits and all other agreements, licenses and
sublicenses, and leases and subleases to which it is a party, and will suffer
no loss of forfeiture thereof or thereunder except for immaterial losses or
forfeitures which in the aggregate would not be material to its business or
properties or have a material adverse effect on its ability to perform its
obligations hereunder.
d. TelQuest shall obtain all necessary licenses from the Federal
Communications Commission for the provision of Satellite Services on the
Satellite System.
7. CALL CENTER, SUBSCRIBER MANAGEMENT AND BILLING. In connection with
TelQuest's provision of DTH Services:
a. TelQuest shall make available to Affiliate a 24 hour-per-day,
seven-day-per-week national call center, staffed by qualified live operators
supported with automatic response units, to receive calls from subscribers on
a toll free number maintained by TelQuest. TelQuest shall provide sufficient
training to the operators staffing the call center to enable them to handle
subscriber calls and arrange subscriber installations in a professional
manner. In connection with such call center, TelQuest hereby offers Affiliate
the call center service
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packages set forth on SCHEDULE F. Affiliate has initially selected the call
center service package checked on SCHEDULE F. Affiliate shall have the right
to change its call center service package from time to time on thirty (30)
days prior written notice to TelQuest. Affiliate agrees to pay TelQuest the
applicable call center service fee for the selected call center service
package as in effect from time to time. The initial call center service fees
are set forth on SCHEDULE F and are subject to change in TelQuest's reasonable
discretion upon thirty (30) days prior written notice to Affiliate.
(i) TelQuest, in cooperation with Affiliate, shall develop
a computer data base covering each of the Affiliate
Systems, in order to expedite the process of arranging
subscriber installations.
(ii) TelQuest shall cause the operators staffing the call
center to:
(1) Record each subscriber's name, telephone number,
credit information and requested installation time,
subject to parameters supplied by Affiliate related
to installation crew availabilities, estimated work
activity time, and other considerations reasonably
requested by Affiliate.
(2) Electronically transmit each such completed service
order to the applicable representative and dispatcher
designated by Affiliate.
(iii) TelQuest shall provide for credit check of prospective
subscribers using Affiliate-supplied credit limit
parameters in order to determine whether prospective
subscribers shall be approved to subscribe for the DTH
Services.
(iv) TelQuest shall provide electronic confirmation to
Affiliate of its decision whether or not to approve
prospective subscriber's credit.
b. TelQuest shall provide the subscriber management and billing
system for Affiliate DTH Subscribers, including the billing and collections
services, as well as supplying MIS reports to Affiliate with respect to
Affiliate DTH Subscribers. Affiliate shall pay TelQuest $1.00 per Affiliate
DTH Subscriber for such subscriber management and billing services.
8. DTH SUBSCRIBER INSTALLATIONS. In connection with Affiliate's receipt
of DTH Services Affiliate shall:
a. Provide at its sole cost and expense, dispatchers to handle the
final scheduling confirmation and dispatching for customer installations in
each of the Affiliate
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Systems.
b. Provide sufficient ongoing training to the dispatchers to
enable them to perform their duties in a professional manner.
c. Provide prompt, professional installations and technical service
for subscribers served by the Affiliate Systems.
d. Maintain at all times sufficient installation resources available
to install each new subscriber within three (3) business days of receipt of
service orders.
e. Cause its dispatchers to:
(i) Receive and review service orders electronically
transmitted from TelQuest's call center.
(ii) Promptly call subscriber to confirm subscriber's requested
installation time, or if Affiliate cannot accommodate such
requested installation time after using its reasonable
commercial efforts to do so, arrange an alternative
installation time acceptable to subscriber.
(iii) Dispatch installer in a manner consistent with customary
industry practices.
9. FEES FOR SATELLITE SERVICES.
Satellite Services provided hereunder are in consideration of a
monthly fee, payable by Affiliate in accordance with SECTION 10. The monthly
fee ("Monthly Fee") for the Satellite Services hereunder shall be calculated
and paid as set forth on SCHEDULE D.
10. PAYMENTS AND REPORTS.
a. With respect to HITS Service Monthly Fee:
(i) Within fifteen (15) business days following the end of
each calendar month of the Term, Affiliate shall deliver to
TelQuest a statement from Affiliate's Chief Financial
Officer showing the computation of the HITS Service Monthly
Fees payable to TelQuest for such calendar month together
with payment of such fees. The form of such statement shall
be as provided by TelQuest, TelQuest having the right to
modify such form from time to time; provided such form is
reasonably acceptable to Affiliate.
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(ii) Within one hundred and twenty (120) days following the
end of Affiliate's fiscal year during any portion of
which this Agreement is in effect, Affiliate shall supply
to TelQuest a letter addressed to TelQuest from Affiliate's
Chief Financial Officer to the effect that Affiliate has
completed an audit conducted by an independent certified
accounting firm of the results of Affiliate's operations
for such fiscal year and based on that audit the information
supplied to TelQuest by Affiliate with respect to such
fiscal year is accurate and complete in all respects.
Affiliate's obligation to supply such a letter shall
continue after any termination of this Agreement until
TelQuest receives the required letter with respect to the
last fiscal year during any portion of which this Agreement
is in effect. In addition, TelQuest shall have the right to
have a TelQuest appointed representative, once a year, at
TelQuest's timing, upon reasonable notice to Affiliate,
inspect Affiliate's subscriber billing records and any other
subscriber records kept by Affiliate.
(iii) Affiliate shall keep accurate and complete records and
accounts of xxxxxxxx, subscribers, and all other matters
which pertain to Affiliate MMDS Subscribers.
(iv) Any amounts not paid by Affiliate to TelQuest when due shall
accrue interest at the rate of one and one-half percent
(1 1/2%) per month or at the highest lawful rate, whichever
shall be lesser, compounded monthly from the date such
amounts were due until they are paid.
b. With respect to DTH Service Monthly Fee and other fees associated
with DTH Service:
(i) Within fifteen (15) business days following the end of each
calendar month of the Term, TelQuest shall deliver to
Affiliate a statement from TelQuest's Chief Financial
Officer showing the DTH subscription revenue received
for Affiliate DTH Subscribers for such calendar month
and the computation of the DTH Service Monthly Fees payable
to TelQuest for such calendar month together with payment
equal to (i) the DTH subscription revenue received for
Affiliate DTH Subscribers for such calendar month, less
(ii) the DTH Service Monthly Fees payable to TelQuest
for such calendar month, less (iii) the applicable
subscriber management fee, less (iv) the applicable call
center service fee, less (v) any and all programming costs
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associated with the TelQuest Programming delivered by
TelQuest in connection with the DTH Service. The form of
such statement shall be as provided by TelQuest, TelQuest
having the right to modify such form from time to
time; provided such form is reasonably acceptable to
Affiliate.
(ii) Within one hundred and twenty (120) days following
the end of TelQuest's fiscal year during any portion of
which this Agreement is in effect, TelQuest shall supply
to Affiliate a letter addressed to Affiliate from
TelQuest's Chief Financial Officer to the effect that
TelQuest has completed an audit conducted by an
independent certified accounting firm of the results of
TelQuest's operations for such fiscal year and based on
that audit the information supplied to Affiliate by
TelQuest with respect to such fiscal year is accurate and
complete in all respects. TelQuest's obligation to
supply such a letter shall continue after any termination
of this Agreement until Affiliate receives the required
letter with respect to the last fiscal year during any
portion of which this Agreement is in effect. In addition,
Affiliate shall have the right to have an Affiliate
appointed representative, once a year, at Affiliate's
timing, upon reasonable notice to TelQuest, inspect
TelQuest's DTH subscriber billing records for Affiliate
DTH Subscribers and any other Affiliate DTH Subscriber
records kept by TelQuest.
(iii) TelQuest shall keep accurate and complete records
and accounts of xxxxxxxx, subscribers, and all other
matters which pertain to Affiliate DTH Subscribers.
(iv) Any amounts not paid by TelQuest to Affiliate when
due shall accrue interest at the rate of one and one-half
percent (1 1/2%) per month or at the highest lawful rate,
whichever shall be lesser, compounded monthly from the
date such amounts were due until they are paid.
c.
[CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED WITH THE COMMISSION]
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11. PROMOTION, MARKETING AND SALES; INTELLECTUAL PROPERTY.
a. Affiliate shall use its reasonable commercial efforts to
promote the TelQuest Programming to its subscribers and maximize the sale of
the TelQuest Programming to its subscribers at the earliest possible date. If
the Affiliate offers any services other than the TelQuest Programming,
Affiliate shall not promote any other service in a manner that is detrimental
to the sale of the TelQuest Programming. In aid of such purpose, TelQuest
shall provide promotional and marketing advice, and sales training, and
shall make available to said Affiliate, when and as reasonably requested by
Affiliate, such marketing and promotional materials as TelQuest may deem
appropriate.
b. Affiliate acknowledges that the name and xxxx "TelQuest," and
the name of TelQuest's programming package, are the exclusive property of
TelQuest and will not use such names or marks, or any logos or other items
registered in association with that name or xxxx, or in any way advertise the
programming of TelQuest except as advised and approved by TelQuest. Affiliate
has not and shall not acquire any proprietary or other rights in such name or
marks by reason of this Agreement. Affiliate may distribute materials using
such names or marks only if it is clear that such names and marks are marks
for the TelQuest Programming and Satellite Services of TelQuest that
Affiliate utilizes, and such use shall be in accordance with any instructions
that may be issued by TelQuest from time to time.
c. TelQuest acknowledges that the name and xxxx "CS Wireless
Systems, Inc.," and the names of Affiliate's programming packages, are the
exclusive property of Affiliate and will not use such names or marks, or any
logos or other items registered in association with that name or xxxx, except
as advised and approved by TelQuest. TelQuest has not and shall not acquire
any proprietary or other rights in such name or marks by reason of this
Agreement. TelQuest may distribute materials using such names or marks only
if it is clear that such names and marks are marks for the Satellite Services
of TelQuest that Affiliate utilizes, and such use shall be in accordance
with any instructions that may be issued by Affiliate from time to time.
d. Affiliate agrees to publicize, promote and prominently display
and exhibit, wherever appropriate, the logos and trademarks of TelQuest,
including the name of TelQuest's programming package, in accordance with
TelQuest's policies and standards.
e. TelQuest agrees to publicize, promote and prominently display
and exhibit, where appropriate, the logos and trademarks of Affiliate,
including the names of Affiliate's programming packages, in accordance with
Affiliate's policies and standards.
f. Affiliate will not advertise, package or market TelQuest
Programming under any other name other than "TelQuest," and the name of
TelQuest's programming package, or such other name agreed to by TelQuest for
the TelQuest Programming, and should Affiliate determine to market such
TelQuest Programming together with other programming, it will obtain
TelQuest's prior written approval as to the manner of such combination.
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g. With respect to Affiliate Subscribers:
(i) TelQuest may, from time to time, undertake consumer
marketing tests and surveys, polls and other research in
connection with the TelQuest Programming. Subject to the
limitations of applicable laws, Affiliate shall cooperate
with TelQuest in such research by making its subscriber
lists and sales information available to TelQuest and by
rendering any other assistance which TelQuest may reasonably
request and which Affiliate can reasonably provide. Any such
information provided by Affiliate shall be used by TelQuest
only for marketing and billing purposes. TelQuest shall
treat as confidential the subscriber names, addresses and
sales information received from Affiliate in connection with
such research and shall use any such names and addresses
only in connection with such research. All subscriber
information obtained by TelQuest hereunder shall be
maintained in confidence by TelQuest and used solely for
the delivery of Satellite Services hereunder or as
otherwise permitted in this Agreement or as otherwise agreed
to in writing by Affiliate.
(ii) TelQuest will provide marketing strategy and programs for
marketing TelQuest Programming for DTH Services in the
markets served by Affiliate Systems and will work with
Affiliate to "co-brand" the TelQuest Programming package for
use in such advertising. Affiliate shall establish a
marketing budget per Affiliate System for marketing TelQuest
Programming reasonably expected to permit Affiliate to meet
the Performance Standards for DTH Services hereunder.
TelQuest shall also control the establishment of
licensing/comarketing arrangements and the development of a
consumer retail distribution plan for the DTH Services.
12. TRANSMISSION SECURITY.
Affiliate recognizes that in order to preserve the integrity and
marketability of TelQuest Programming, it is necessary for TelQuest to cause
such programming to be transmitted via satellite in an encoded mode. It shall
be and remain the obligation of Affiliate to obtain at its own expense, but
subject to the approval of TelQuest, such decoding device(s) (IRTs) as may be
necessary to properly receive such TelQuest Programming. PROVIDED, HOWEVER,
that TelQuest shall give said Affiliate no less than ninety (90) days notice
of implementation of any modifications to such security measures and to the
extent reasonable and possible, cooperate, and coordinate the availability of
said equipment, with Affiliate to assist in the orderly deployment by
Affiliate of acceptable decoding or descrambling device(s).
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13. PRE-EMPTIONS AND CHANGES; FORCE MAJEURE.
a. Affiliate understands that from time to time, due to the
nature of TelQuest Programming, it may be necessary to change, with little or
no notice, the schedule or lineup of TelQuest Programming as may be or have
been previously provided or contained in any advance program notices or
guides, and such changes or pre-emptions beyond the reasonable control of
TelQuest, shall not affect the responsibility of Affiliate to carry or to pay
for the TelQuest Programming alternatively provided.
b. In addition, neither TelQuest nor Affiliate shall incur any
liability under this Agreement with respect to any failure of the Satellite
Services to be delivered to Affiliate or Affiliate Subscribers if such
failure is due to any of the following events ("Force Majeure"): (i) any
satellite or transponder failure; (ii) the failure of any other equipment
owned or maintained by others other than equipment leased by TelQuest;
(iii) any labor dispute, fire, flood, riot, legal enactment, government
regulation, act of God; or (iv) any cause beyond the reasonable control of
TelQuest or Affiliate, as the case may be. In any such case, the parties'
time for performance under this Agreement, to the extent affected by any of
the foregoing, shall be correspondingly extended. Each party shall exercise
its reasonable efforts to cure any such failures or delays and the cause
thereof.
14. REGULATIONS.
The obligations of the parties hereto are and at all times shall
remain subject to all applicable Federal, State and local laws, rules and
regulations. Both TelQuest and Affiliate each represent and warrant as to
itself that at the present time it does not know and has no reason to know of
any restrictions placed on its activities by any applicable jurisdictions
which would adversely affect its performance hereunder.
15. PERFORMANCE STANDARDS AND EXCLUSIVITY.
a. TelQuest agrees to provide TelQuest Programming pursuant to
the terms of this Agreement to Affiliate on an exclusive basis within each
Service Area for the Affiliate Systems, and provided that Affiliate is in
full compliance with the mutually acceptable performance standards (the
"Performance Standards") set forth on SCHEDULE E attached hereto. Each month
of the Term, TelQuest will review whether Affiliate is in compliance with the
Performance Standards on a Service Area by Service Area basis. In the event
TelQuest determines that Affiliate is not in compliance with the Performance
Standards in a particular Service Area, then TelQuest shall provide Affiliate
with written notice of such non-compliance.
[CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED WITH THE COMMISSION]
18
b. Subject to subsection (a) above, TelQuest may provide
Satellite Services for customers in addition to the Affiliate Systems. When
providing such services to additional customers, TelQuest may use any or all
of its facilities used to provide similar services to the Service Areas of
Affiliate Systems, provided such use does not impair TelQuest's ability to
fulfill, and fully perform in each respect, its obligations to the Affiliate
hereunder.
16. EQUIPMENT.
a. TelQuest shall coordinate with vendors on the general
specifications and design of the consumer premise equipment ("CPE") and
related conditional access facilities to be used by Affiliate Subscribers to
receive the Satellite Services.
b. Affiliate shall be responsible for purchasing and installing
all CPE at Affiliate's sole cost and risk.
c. Affiliate shall have the responsibility during the Term, at
Affiliate's sole cost and expense to maintain, modify and repair all
equipment at Affiliate's head-ends and at Affiliate DTH Subscribers' premises
for the Affiliate Systems as may be necessary to use the Satellite Services
provided herein.
17. INSURANCE.
a. TelQuest shall maintain with financially sound and reputable
insurers, insurance with respect to the Uplink Facilities as required by the
Master Building Space License Agreement for TelQuest Equipment with Loral
Skynet relating to the Uplink Facilities.
b. Affiliate shall maintain with financially sound and reputable
insurers, insurance with respect to Affiliate's head-ends for the Affiliate
Systems against such casualties and contingencies, of such types, on such
terms and in such amounts (including deductibles, self-insurance and
co-insurance, if applicable) as is customary for entities in business similar
to that of Affiliate in the same geographic areas as Affiliate operates the
Affiliate Systems.
c. Either party may, at its option and at its own cost, secure
business interruption insurance.
18. REPRESENTATION AND WARRANTIES OF TELQUEST.
a. Telquest represents and warrants that it is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware and is empowered to grant the rights and
privileges provided for hereunder, and this Agreement has been duly executed
by it and constitutes its valid and enforceable obligation.
b. TelQuest represents and warrants that it has or will have the
right to
19
furnish the TelQuest Programming to Affiliate DTH Subscribers.
c. TelQuest represents and warrants that TelQuest's provision of
the Satellite Services complies with all applicable laws, ordinances, codes,
permits, certifications, licensing requirements, rules and regulations, and
TelQuest has not received any notice to the contrary.
d. TelQuest represents and warrants that there is no action,
proceeding at law or in equity, arbitration or administrative or other
proceeding by or before, or, to the best knowledge, information and belief of
TelQuest, any investigation by, any governmental or other instrumentality or
agency, pending, or, to the best knowledge, information and belief of
TelQuest, threatened against TelQuest, affecting the ability of TelQuest to
provide Satellite Services to Affiliate in accordance with this Agreement.
e. TelQuest represents and warrants that it has entered into that
certain Telstar Satellite Transponder Capacity Agreement with Loral Skynet
(the "Transponder Agreement") for the lease on C-band and Ku-band
transponders, a copy of which has previously been provided to Affiliate.
f. Each of the foregoing representations and warranties set forth
in this Section shall be true and correct in all material respects on and as
at each and every date during and throughout the terms of this Agreement as
though made on such date(s).
19. REPRESENTATIONS AND WARRANTIES OF AFFILIATE.
a. Affiliate represents and warrants that Affiliate is a
corporation duly incorporated or otherwise validly existing and in good
standing in the state referred to in the opening paragraph of this Agreement
and has all the requisite power and authority, corporate or otherwise, to
own and operate the Affiliate Systems set forth on SCHEDULE A attached hereto
including without limitation all necessary franchises and licenses to
operate the same; that all such Affiliate Systems fall within the PSA as set
forth on SCHEDULE A attached hereto; and that this Agreement has been duly
executed by Affiliate and constitutes its valid and enforceable obligation.
b. Affiliate represents and warrants that Affiliate will not
provide TelQuest Programming in any fashion to any person without making
payment to TelQuest provided for in this Agreement, except upon the express
written permission of TelQuest.
c. Affiliate represents and warrants that Affiliate's receipt of
the Satellite Services complies with all applicable laws, ordinances, codes,
permits, certification, licensing requirements, rules and regulations, and
Affiliate has not received any notice to the contrary.
d. Affiliate represents and warrants that there is no action,
proceeding at law or in equity, arbitration or administrative or other
proceeding by or before, or, to the best
20
knowledge, information and belief of Affiliate, any investigation by, any
governmental or other instrumentality or agency, pending, or, to the best
knowledge, information and belief of Affiliate, threatened against Affiliate,
affecting the ability of Affiliate to perform its obligations in accordance
with this Agreement.
e. Affiliate represents and warrants that it has the right to
furnish the TelQuest Programming to Affiliate MMDS Subscribers.
f. Each of the foregoing representations and warranties set forth
in this Section shall be true and correct in all material respects on and as
at each and every date during the terms of this Agreement as though made on
such date(s).
20. INDEMNIFICATION.
TelQuest and the Affiliate shall each indemnify and forever hold
harmless the other, the other's shareholders, partners, members, and their
respective officers, directors, managers, employees and agents in their
capacity as such from all liabilities, claims, costs, damages and expenses
incurred by a third party for which a claim has been made or action begun by
said third party, (including, without limitation, reasonable attorney's fees)
arising out of any breach of any representation, warranty or any of its
obligations pursuant to this Agreement. In any case in which indemnification
is sought, the party seeking indemnification (the "Indemnified Party") shall
(i) promptly notify the party from which such indemnification is sought (the
"Indemnifying Party") and (ii) afford the Indemnifying Party the opportunity
of defending such claim and controlling the litigation, settlement and other
disposition of such claim and (iii) the Indemnified party shall fully
cooperate in connection with such defense, litigation, settlement or
disposition and shall have the right, but not the obligation, to join in and
be represented by its own counsel, at its own cost and expense. In addition,
TelQuest and the Affiliate shall each indemnify and forever hold harmless the
other, the other's shareholders, partners, members, and their respective
officers, directors, managers, employees and agents in their capacity as such
from all liabilities, claims, costs, damages and expenses incurred
(including, without limitation, reasonable attorneys' fees) arising out of
any breach of any representation, warranty or any of its obligations pursuant
to this Agreement or out of its wrongful or grossly negligent actions or
willful misconduct in connection with this Agreement.
21. LIMITATION OF LIABILITY. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, NO PARTY SHALL BE LIABLE TO ANY OTHER IN THE EVENT OF A
BREACH OF THIS AGREEMENT OR ANY INTERRUPTION IN SERVICE FOR ANY INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOSS OF
PROFITS OR REVENUES).
22. TERMINATION
a. This Agreement may be terminated as follows:
21
(i) Either party may terminate this Agreement by written
notice to the other party if a party materially breaches
any of the terms and conditions of this Agreement and does
not cure such breach within thirty (30) days after
receiving from the other party a written notice with a
description of the breach and a demand for its cure. A
material breach shall be defined as including but not
limited to the failure of the Affiliate to make any
payment due under this Agreement, or the material failure
on the part of TelQuest to provide TelQuest Programming to
the Affiliate substantially in accordance with and subject
to the terms of this Agreement
(ii) Either party may terminate this Agreement if any Force
Majeure event continues uninterrupted for a period of
thirty (30) or more.
(iii)
[CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED WITH THE COMMISSION]
b. Upon any such termination, or in the event of the expiration
of the Term, TelQuest shall be entitled to receive all amounts due for
Satellite Services through the date of termination. Nothing herein, however,
shall limit the rights of either party to assert a claim for damages against
the other party for breach or wrongful termination of the Agreement.
23. MISCELLANEOUS.
a. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
b. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
c. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. Except as otherwise set forth herein, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any party hereto without the prior written consent of the other
party hereto; provided, however, Affiliate shall be permitted to assign its
rights, interests and obligations hereunder provided Affiliate guarantees
performance and all payments due to
22
TelQuest hereunder, without the prior written consent of TelQuest.
d. ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement or the breach hereof shall be settled by final and
binding arbitration in accordance with the then prevailing rules of the
American Arbitration Association, and judgment upon the award rendered may be
entered in any court having jurisdiction thereof. The arbitration proceedings
shall be held in Philadelphia, PA before a single arbitrator.
e. HEADINGS. The headings in this Agreement are intended solely
for convenience of reference and shall be given no effect in the construction
or interpretation of this Agreement.
f. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not impair the validity or enforceability
of any other provision.
g. NOTICES. Any notices or other communications hereunder or with
respect to this Agreement shall be in writing and shall be given to the
parties
(i) By hand,
(ii) By facsimile,
(iii) By nationally recognized overnight courier or by
Express, registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
If to Affiliate:
CS WIRELESS SYSTEMS, INC.
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx
Fax No.: (000) 000-0000
With a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxx Xxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxx Xxxxx, Esq.
Fax No.: (000) 000-0000
23
If to TelQuest:
TELQUEST COMMUNICATIONS, INC.
00 Xxxx Xxxxxx Xxxx X-000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
With a copy to:
Day, Xxxxx & Xxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Counsel to TelQuest
Fax No.: (000) 000-0000
Notices by facsimile transmission shall be deemed to have been received
when confirmed in writing, whether by manual or electronic re-transmission of
receipt, by the party for whom the transmission is intended and notices by
courier shall be deemed received the following business day after delivery to
the courier. This provision shall not be construed as authorization for
service of process or similar papers by facsimile. Any party hereto may, by
giving written notice to the other parties hereto, change the address to
which notices are to be sent.
h. ENTIRE AGREEMENT. This Agreement and the annexed Schedules,
constitutes the entire agreement between the parties relating to the subject
matter hereof and supersedes all prior oral and written understandings
between the parties relating thereto.
i. AMENDMENTS. This Agreement may be changed, modified or amended
from time to time only in writing signed by the parties.
j. WAIVER. No waiver of any provision in the Agreement or any
breach hereunder shall be deemed a waiver of any other provision or
subsequent breach, nor shall any such attempted waiver constitute a waiver.
Delay or failure of any party to insist on strict performance or observance
of any provision of the Agreement or to exercise any rights or remedies
hereunder shall not be deemed a waiver. Any waiver shall be effective only if
in writing and signed by the waiving party.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
24
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TELQUEST SATELLITE SERVICES LLC
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
CS WIRELESS SYSTEMS, INC.
By: /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: President
25
