Exhibit 10.11
FIFTH AMENDMENT
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In accordance with Section 18.02 of the DBS Distribution Agreement
between Xxxxxx Communications Galaxy, Inc. ("HCG") and the National Rural
Telecommunications Cooperative ("NRTC"), dated April 10, 1992, as amended (the
"Agreement"), and for good and valuable consideration, receipt of which is
hereby acknowledged, the Agreement is hereby amended, effective December 11,
1992, as follows:
(1) The Agreement is hereby modified as set forth on Exhibit A
hereto, which Exhibit A sets forth certain, identified provisions of the
Agreement whereby (a) those portions which have been stricken-through are
hereby deleted from the Agreement, and (b) those portions which are
highlighted and double-underlined are hereby added to the Agreement; and
(2) All other terms and conditions of the Agreement, shall
continue in full force and effect without modification.
This Fifth Amendment may be executed in counterparts pursuant to
Section 18.11 of the Agreement and delivered via telecopier.
WHEREOF each of the parties hereto has duly executed and delivered
this Amendment as of the date indicated below.
XXXXXX COMMUNICATIONS NATIONAL RURAL
GALAXY, INC. TELECOMMUNICATIONS
COOPERATIVE
By: /s/ By: /s/
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Date: 15 December 1992 Date: 16 December 1992
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Attest: /s/ Attest: /s/
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Date: 15 December 1992 Date: 16 December 1992
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EXHIBIT A
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* * * * *
Section 1.01(b):
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* * * * *
(v) All Committed Member Payments paid to NRTC before
December 23, 1992, shall be promptly deposited into an interest-bearing
escrow account (the "Escrow Account") with any one of the financial
institutions selected by NRTC from the list contained in Exhibit 1.01(b)
(v)-1 (the "Escrow Agent"), pursuant to an escrow agreement in
substantially the same form as Exhibit 1.01(b)(v)-2 (the "Escrow
Agreement"). Promptly upon receipt of such escrowed Committed Member
Payments, the Escrow Agent shall notify HCG in writing and such Committed
Member Payments (excluding any interest accrued thereof) shall thereafter
be deemed "Escrowed Committed Member Payments." NRTC shall be responsible
for the payment of all costs and fees required by the Escrow Agent.
(vi) All Committed Member Payments paid to NRTC on or after
December 23, 1992, shall promptly be remitted in full by NRTC to HCG;
except only as set forth in Section 1.04(a).
* * * * *
1.03 Contract Decision Process. On December 23, 1992, and again on July 31,
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1993 (if the July Extension applies), decisions will be made regarding (a) the
termination of this Agreement; (b) the unmodified continuation of this
Agreement; and/or (c) the modification of this Agreement as set forth below in
Section 19.
(a) If, on or before December 23, 1992, NRTC has paid HCG $250
million in aggregate Committed Member Payments pursuant to Section 1.01(b), then
this Agreement shall be modified as set forth in Section 19.
(b) If, on December 23, 1992, NRTC has paid HCG less than $250
million, in aggregate Committed Member Payments, then NRTC shall automatically
be granted an extension until July 31, 1993 to pay HCG (and/or have Committed
Members commit to pay HCG, as applicable, in Second Payments) $250 million in
aggregate Committed Member Payments (the "July Extension").
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(c) If the July Extension has been granted and if on or before July
31, 1993, NRTC has paid HCG (and/or Committed Members have committed to pay HCG,
as applicable, in Second Payments) $250 million in aggregate Committed Member
Payments, then this Agreement shall be modified as set forth in Section 19;
otherwise this Agreement shall continue unmodified by Exhibit 19.
(d) NRTC may make payments to HCG and/or the Escrow Agent (if still
applicable) for HCG's benefit to meet the $250 million target, as apropriate and
as specified in this Section 1.03 in excess of aggregate Committed Member
Payments actually paid or owed to HCG as Second Payments, where applicable, by
Committed Members and any and all such amounts shall be deemed part of the
Committed Member Payments for all purposes of this Agreement.
1.04 Progress Certification and Core Cable Programming.
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(a) If, on or before December 22, 1992, the December Conditions (as
defined below) have occurred , then HCG may instruct the Escrow Agent pursuant
to the Escrow Agreement (and HCG and NRTC shall, on or prior to 12:00 p.m.
Eastern Time on the next business day after HCG's certfication (in a form agreed
to by the parties) of its meeting of the December Conditions, concurrently
provide the Joint Instruction, as defined below) to release all Escrowed
Committed Member Payments, including any accrued interest thereon, to HCG.
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The "December Conditions" mean (a) HCG having obtained the contract rights to
distribute the Core Cable Programming to Eligible Residences (specifically
excluding, unless applicable in the relevant Programming Agreement, households
that have available cable television service as of the execution date of the
relevant Programming Agreement, (the "Core Cable Rights"), and (b) HCG having
provided NRTC with a certification by the Chief Executive Officer of HCG, under
oath or affirmation, stating that, based on then-existing facts, the Transponder
Capacity, TT&C Services, Ground Services, Security Services and Subscriber
Terminal Equipment Availability development process is proceeding in a manner
that, in HCG's reasonable judgment, will allow the provision of the Transponder
Capacity and such services no later than ninety (90) days following the
Scheduled Service Commencement Date (the "HCG Certification"). Such HCG
Certification shall be accompanied by a status report on work completed and a
schedule of remaining projects. "Core Cable Programming" means four program
services from different program categories that are identified as "Priority 1"
in Exhibit 7.07. "Priority 2" and "Priority 3" program services are also
identified on Exhibit 7.07. The "Joint Instruction" means a joint instruction to
the Escrow Agent under the Escrow Agreement (and/or an amendment to the Escrow
Agreement, as required) instructing and requiring the Escrow Agent to
immediately release, as of the date of such instruction, the Escrowed Committed
Member Payments (including any accrued interest thereon) to HCG, and in any case
no later than on the next business day following the receipt of such instruction
only if the Escrow Agent cannot complete such release and transfer on the same
day.
(b) (i) If, on December 22, 1992, HCG has obtained the Core Cable
Rights, but has not provided NRTC with the HCG Certification, then each of
NRTC and HCG shall have the right to terminate this Agreement on or before
December 31, 1992 by providing written notice to the other, or such right
will expire. Upon such timely termination NRTC may instruct the Escrow
Agent pursuant to the Escrow Agreement to release all Escrowed Committed
Member Payments, including any interest thereon, to NRTC.
(ii) If, on December 22, 1992, HCG has provided the HCG Certification,
but has not obtained the Core Cable Rights, then NRTC shall have the right
to terminate this Agreement by providing written notice to HCG by December
31, 1992, or such right will expire. If NRTC so terminates this Agreement,
then NRTC may instruct the Escrow Agent pursuant to the Escrow
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Agreement to release all Escrowed Committed Member Payment, including any
interest thereon, to NRTC. If NRTC does not so termiante this Agreement,
then NRTC shall have the right, on or before March 1, 1993, to deliver to
HCG the Relief Notice (as defined in Section 19(b)) and HCG shall have the
right, after delivery of the Relief Notice, to instruct the Escrow Agent
pursuant to the Escrow Agreement to release all Escrowed Committed Member
Payments, including any interest thereon, to HCG. If NRTC delivers the
Relief Notice by March 1, 1993, then this Agreement shall continue; if not,
this Agreement automatically shall terminate as of March 1, 1993 and NRTC
may instruct the Escrow Agent pursuant to the Escrow Agreement to release
all Escrowed Committed Member Payments including any interest thereon, to
NRTC.
(iii) If both of the December Conditions have not occurred on
December 22, 1992, then each of NRTC and HCG shall have the right to
terminate this Agreement on or before December 31, 1992 by providing
written notice to the other, or such right will expire. Upon such timely
termination, NRTC may instruct the Escrow Agent pursuant to the Escrow
Agreement to release all Escrowed Committed Member Payments, including any
interest thereon, to NRTC.
* * * * *
3.02 TT&C Fee.
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(a) The fee for the provision of the TT&C Services (the "TT&C Fees")
for any given month shall be equal to the product of (x) the TT&C Base Amount,
multiplied by (y) the number of Authorized Subscribers calculated for such
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month. The initial "TT&C Base Amount" shall be determined on July 31, 1993, and
be based on the aggregate amont of Committed Member Payments actually paid to
HCG or owed to HCG as Second Payments under Section 1.01(b)(iv) as of such date
as follows: * * * * *
* * * * *
3.03 Ground Services Fees. * * * * *
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(b) The Ground Services Fee for any given month shall be equal to the
product of (x) the Ground Services Base Amount, multiplied by (y) the number of
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Authorized Subscribers calculated for such month. The initial "Ground Services
Base Amount" shall be determined on July 31, 1993, and shall be based on the
aggregate amount of Committed Member Payments actually paid to HCG or owed to
HCG as Second Payments under Section 1.01(b)(iv) as of such date as follows: * *
* * *
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* * * * *
5.01 Marketing of DBS Distribution Services in NRTC Territories.
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(a) HCG grants NRTC the exclusive right to market and sell the DBS
Distribution Services to Members for distribution to Committed Member Residences
or directly to Committed Member Residences; it being expressly agreed and
understood that any rights as to Programming Services shall extend only as to
the extent and for the duration as may be provided under the relevant
Programming Agreements. For purposes of Sections 5.01(a) and 5.01(b), Committed
Member Residences shall be determined based upon Member Contracts executed as of
December 23, 1992 (or July 31, 1993, if applicable). NRTC shall have the sole
and exclusive right to determine the terms and conditions upon which it will
market the DBS Distribution Services to such Members and Committed Member
Residences, and subject to the provisions of Section 3, shall be entitled to all
revenues form such marketing.
(b) (i) Beginning on December 23, 1992 (or July 31, 1993, if
applicable), HCG shall have the exclusive right to market and sell the DBS
Distribution Services, and any other program services transmitted on the
Transponder Capacity for distribution to the Non-Committed Member Residences.
"Non-Committed Member Residences" means all Eligible Residences that are not
Committed Member Residences, as determined pursuant to Section 5.01(a) as of
December 23, 1992 (or July 31, 1993, if applicable). HCG shall have the sole and
exclusive right to determine the terms and conditions upon which it will market
the DBS Distribution Services to such Non-Committed Member Residences, and shall
be entitled to all revenues from such marketing. HCG's rights under this Section
5.01(b) shall not be adversely affected by NRTC's taking control of the
Programming Agreements under Section 4.06(b).
* * * * *
11. Termination Rights
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11.01 Termination by NRTC.
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(a) If, on December 22, 1992, (i) both of the December Conditions
have not occurred, (ii) HCG has obtained the Core Cable Rights but has not
provided NRTC with the HCG Certification, or (iii) HCG has provided the HCG
Certification but has not obtained the Core Cable Rights, then NRTC may
terminate this Agreement in whole under Section 1.04(b).
* * * * *
11.02 Terminaiton by HCG.
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(a) [Intentionally Omitted]
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(b) If, on December 22, 1992, both of the December Conditions have
not occurred, or HCG has not provided NRTC with the HCG Certification, then HCG
may terminate this Agreement in whole under Section 1.04(b).
* * * * *
11.03 Automatic Termination.
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(a) [Intentionally Deleted]
(b) If HCG has provided the HCG Certification, but has not obtained
the Core Cable Rights, NRTC has not exercised its termination right under
Section 1.04(b)(ii), and NRTC does not deliver to HCG the Relief Notice by March
1, 1993, then this Agreement automatically shall terminate as of March 1, 1993
pursuant to Section 1.04(b)(ii).
* * * * *
19. Modifications of Agreement In Certain Circumstances
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(a) If NRTC pays to HCG (and/or Committed Members commit to pay HCG
as Second Payments), in the aggregate, the sum of $250,000,000 in Committed
Member Payments by December 23, 1992 (or by July 31, 1993, as applicable) (the
"Agreement Modification Date"), then the provisions set forth on Exhibit 19
shall apply automatically and, as indicated therein, modify this Agreement and
shall take precedence over and supersede any conflicting provisions contained in
this Agreement. Notwithstanding the foregoing, if the provisions of Exhibit 19
so apply, but HCG has actually not received $250 million in aggregate Committed
Member Payments at the time of Acceptance because one or more Second Payments
has not been paid to HCG, and such non-payment is not cured within the time
period provided in Section 3.10, then this Agreement automatically shall be
revised as if Exhibit 19 did not apply and the "Committed Member Residences"
shall be re-established as of the date of delivery to HCG of the Member Contract
that allowed NRTC initially to meet the $250 million Committed Member Payment
target.
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