EXHIBIT 10.1
"***" - 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
SALES AGENCY AGREEMENT
THIS SALES AGENCY AGREEMENT (the "Agreement") is made
effective as of March 10, 2002 (the "Effective Date"), between DIRECTV, Inc., a
California corporation ("DIRECTV"), and Nucentrix Broadband Networks, Inc. f/k/a
Heartland Wireless Communications, Inc., a Delaware corporation ("Nucentrix"),
with reference to the following:
A. DIRECTV operates a direct broadcast satellite service ("DBS
Service") through which consumers may receive video, audio and other programming
using specialized satellite receiving equipment ("DIRECTV System").
B. Nucentrix, among other things, is an operator of an MMDS
video services.
C. The parties are interested in developing and marketing a
conversion program whereby MMDS customers of Nucentrix may convert their
multi-channel video programming service to DIRECTV's programming service.
D. Nucentrix wishes to act as one of DIRECTV's commissioned
sales agents for its DBS Service and to solicit its MMDS customers to order
certain DIRECTV programming packages and services which are identified in
EXHIBIT A attached hereto, as the same may be amended from time to time
("DIRECTV Programming Packages").
NOW, THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS.
1.1 "Consumer Offers" shall mean conversion offers extended to
Eligible MMDS Subscribers (as defined below) which offer consists of (a) a
single room DIRECTV System with a "standard professional installation" therefor
(as outlined in SCHEDULE 1) "***" when such Eligible MMDS Subscriber executes
the Annual Programming Commitment Agreement attached hereto as SCHEDULE 2 (the
"Single-Room Offer"); or (b) a two-room DIRECTV System bundle (i.e., two DIRECTV
Receivers, two remote controls, one satellite dish and a dual LNB) with a
"standard professional installation" therefor (as outlined in SCHEDULE 1) "***"
when such Eligible MMDS Subscriber executes the Annual Programming Commitment
Agreement (the "Two-Room Offer"). Notwithstanding the foregoing, the terms of
the Consumer Offers may be amended by the mutual agreement of the parties. The
Consumer Offers described herein may not be combined with any other DIRECTV
consumer offers or otherwise without the prior written approval of DIRECTV,
which approval may be withheld by DIRECTV in its sole discretion.
1.2 "Conversion Program" shall mean the conversion of Eligible
Subscribers to DIRECTV's programming service as contemplated in this Agreement.
1.3 "Converted Subscriber" shall mean an Eligible MMDS
Subscriber (a) from whom, pursuant to this Agreement, Nucentrix takes the
initial Order for a DIRECTV Programming Package, and (b) who activates and
commits to subscriber to a DIRECTV Programming Package.
1.4 "DIRECTV Accounting Month" shall mean the period from the
29th day of a given month (except in March, in which case it shall be the 1st
day of March, except during a leap year) through the 28th day of the following
month.
1.5 "Eligible MMDS Subscriber" shall mean an existing
single-family residential MMDS subscriber of Nucentrix in the Territory (a) who
is not or has not been a DIRECTV subscriber and (b) whose MMDS
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service account is in good standing. For purposes of determining the Eligible
MMDS Subscribers in each market in the Conversion Program, Nucentrix shall
compile a list of existing single family MMDS subscribers who satisfy the
requirements established by the parties under Section 1.5(b) (each, a "Nucentrix
Customer List"). Upon receipt of each such Customer List, DIRECTV shall
determine, in its reasonable discretion and in accordance with then-current
internal practice, whether a subscriber satisfies the requirement under Section
1.5(a).
1.6 "Order" shall mean an order for any DIRECTV Programming
Package which (a) Nucentrix solicits and takes for any DIRECTV Programming
Package from an Eligible MMDS Subscriber; and (b) Nucentrix transmits directly
to DIRECTV in accordance with the terms of this Agreement, and DIRECTV accepts
in its sole reasonable discretion and as provided in Section 5.1.
1.7 "Territory" shall mean the contiguous United States,
excluding certain areas serviced by the National Rural Telecommunications
Cooperative ("NRTC"). Attached as EXHIBIT C is a map indicating the NRTC
Territories.
2. APPOINTMENT OF NUCENTRIX.
2.1 APPOINTMENT. DIRECTV hereby appoints Nucentrix as its
sales agent to solicit sales of, and take orders for, the DIRECTV Programming
Packages solely from Eligible MMDS Subscribers within the Territory, on the
terms and conditions contained herein. Nucentrix may not solicit subscriptions
for DIRECTV Programming Packages from any other individuals or entities, except
as otherwise permitted under other agreements between the parties. Nucentrix may
solicit sales of, and take orders only for, the DIRECTV Programming Packages
identified in EXHIBIT A attached hereto, as such may be amended in accordance
with this Agreement, and not any other programming packages or services DIRECTV
may offer. DIRECTV may amend the list of DIRECTV Programming Packages from time
to time on written notice to Nucentrix. Nucentrix hereby accepts such
appointment and shall use its commercially reasonable efforts to convert
Eligible MMDS Subscribers to DIRECTV's programming service and to promote and
enhance DIRECTV's business, reputation and goodwill.
2.2 NO EXCLUSIVITY REQUIRED OF DIRECTV. DIRECTV may itself
solicit sales of, and take orders for DIRECTV Programming Packages from
consumers (including Eligible MMDS Subscribers), either directly, indirectly, or
in conjunction with any third party, and may authorize parties other than
Nucentrix, to act as sales agents to solicit subscriptions for DIRECTV
Programming Packages, for any compensation and upon any other terms as DIRECTV
may determine in its discretion. Such compensation and terms may differ from
those provided Nucentrix in this Agreement. Nucentrix acknowledges that DIRECTV
and such other parties may compete with Nucentrix.
2.3 LIMITED EXCLUSIVITY REQUIRED OF NUCENTRIX. During the Term
of this Agreement, Nucentrix shall not, directly or indirectly, promote,
advertise, market, offer or engage in a conversion program which is intended to
convert single-family residential MMDS subscribers to another multi-channel
video programming provider's service (the "Exclusive Obligations"). Within sixty
(60) days of execution of this Agreement, the parties agree to discuss the
potential conversion of multi-dwelling unit subscribers and commercial
subscribers to DIRECTV's programming services. Notwithstanding the foregoing,
nothing herein shall preclude or prohibit Nucentrix from entering into an
agreement with the NRTC or its members/affiliates in connection with a
conversion program in the territories served by the NRTC. In addition, nothing
herein shall prohibit Nucentrix from assigning, selling or transferring its
customer list or other assets related thereto to AOL Time Warner as long as
Nucentrix does not promote, advertise, market or offer the multi-channel video
programming services of AOL Time Warner.
3. NUCENTRIX'S GENERAL OBLIGATIONS.
3.1 TRAINING. DIRECTV shall provide training and training
materials regarding its DBS Service to Nucentrix's training personnel, as
DIRECTV reasonably deems necessary. Nucentrix shall train its own employees to
the satisfaction of DIRECTV. DIRECTV may require Nucentrix's employees to attend
supplementary training classes from time to time. Nucentrix shall be responsible
for all expenses and compensation of its employees during such training.
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3.2 SALES PERSONNEL. Nucentrix may allow only its employees
(and not any independent contractors, sub-agents or other parties) to solicit,
take or deliver any orders for DIRECTV Programming Packages from Eligible MMDS
Subscribers, except with DIRECTV's prior written consent, which may be withheld
in DIRECTV's discretion.
3.3 STANDARD POLICIES. Nucentrix shall comply with the
standard policies and procedures DIRECTV may promulgate for its sales agents in
written notices, guidelines, and bulletins, as the same may be amended from time
to time (collectively "Policies"). The Policies shall be an integral part of
this Agreement but may not impair any of Nucentrix's rights granted herein.
3.4 STANDARD OF CONDUCT. In all of its activities as a sales
agent for DIRECTV under the Conversion Program, Nucentrix shall conduct itself
in a commercially reputable and ethical manner, shall comply with all applicable
laws, and shall engage in no deceptive sales practice or other practice which
impugns DIRECTV's commercial reputation and goodwill.
3.5 COLLECTION AND ADMINISTRATION OF ANNUAL PROGRAMMING
COMMITMENT AGREEMENTS. For each and every Converted Subscriber who accepts one
of the Consumer Offers, Nucentrix shall perform the following:
(a) Explain the terms and conditions of the Annual
Programming Commitment Agreement required by DIRECTV as described in SCHEDULE 2
attached hereto and in other materials provided by DIRECTV from time to time;
(b) Cause the Eligible MMDS Subscriber to complete
and execute the Annual Programming Commitment Agreement;
(c) Verify and validate the accuracy of the
information provided by the Eligible MMDS Subscriber in the Annual Programming
Commitment Agreement;
(d) Complete the dealer portion of the Annual
Programming Commitment Agreement;
(e) Provide a completed and executed copy of the
Annual Programming Commitment Agreement to the Eligible MMDS Subscriber;
(f) Maintain a completed and executed copy of the
Annual Programming Commitment Agreement;
(g) When submitting an Order, as defined herein, for
a DIRECTV Programming Package in accordance with the Order procedures, indicate
and notify DIRECTV, in accordance with the procedures prescribed by DIRECTV,
that a customer has executed and agreed to the Annual Programming Commitment
Agreement; and
(h) Upon request by DIRECTV, provide the completed
and executed copy of the Annual Programming Commitment Agreement.
3.6 BOOKS AND RECORDS. Each party shall provide the other
party with accounting support and all information necessary to support
subscriber requests and to verify such party's compliance with the terms of this
Agreement. Each party shall maintain accurate records of all matters that relate
to such party's obligations under this Agreement in accordance with generally
accepted accounting principles and practices uniformly and consistently applied
in a format that will permit audit. Each party shall retain such records for a
period of at least three (3) years from the date of final payment. To the extent
that the records may be relevant in determining whether a party is complying
with its obligations hereunder, the other party and its authorized
representatives shall have access to the records for inspection and audit at all
reasonable times during normal business hours.
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4. RATES AND TERMS OF SERVICES.
4.1 RATES. DIRECTV may determine the content, pricing, terms,
and conditions of its Programming Packages in its discretion. Nucentrix shall
not represent that DIRECTV Programming Packages may be obtained on any different
terms or rates, shall not impose additional or different terms and shall not
offer Eligible MMDS Subscribers any discount, rebate, or other material benefits
in consideration for subscribing to them, except as expressly set forth herein
or otherwise authorized by DIRECTV in writing.
4.2 CHANGES. DIRECTV may change the content, pricing, terms,
conditions, and availability of its Programming Packages from time to time in
its discretion. DIRECTV shall notify Nucentrix of such changes as soon as
practicable and shall use commercially reasonable efforts to provide Nucentrix
no less than thirty (30) days prior notice (or such lesser period of time as may
be available to DIRECTV) of any price and programming content changes. Nucentrix
shall promptly replace point of sale materials as necessary.
4.3 MISREPRESENTATIONS. If Nucentrix misrepresents or fails to
fully disclose any prices or other terms of DIRECTV Programming Packages to any
customer, it shall reimburse DIRECTV any amount which DIRECTV is compelled, or
in its reasonable judgment according to its standard practices decides, to pay
or credit the customer in compensation for such misrepresentation. In addition,
DIRECTV shall be entitled, after written notice to Nucentrix, to offset any such
payment or credit by DIRECTV to customers as a result of Nucentrix's
misrepresentations or omissions against any amounts owed to Nucentrix by
DIRECTV.
5. ORDERS FOR SERVICE.
5.1 ORDER PROCEDURES. Nucentrix shall comply with the
procedures set forth in EXHIBIT B attached hereto, as the same may be amended by
DIRECTV from time to time upon written notice, regarding the receipt and
delivery of orders for DIRECTV Programming Packages. All Orders shall be subject
to acceptance or rejection by DIRECTV in its discretion.
5.2 NO FINANCING OR COLLECTION OF FEES. Nucentrix shall not
provide financing for DIRECTV Programming Packages or collect fees for DIRECTV
Programming Packages or other money due to DIRECTV from Converted Subscribers,
and all such fees shall be billed directly to the Converted Subscriber by
DIRECTV, unless otherwise approved in writing by DIRECTV. Failure to comply with
the provisions of this Section 5.2 shall be deemed a material breach by
Nucentrix that is incurable, and shall entitle DIRECTV to immediately terminate
this Agreement as set forth in Section 14.2.
6. MARKETING.
6.1 MARKETING ACTIVITIES. From time to time during the
Conversion Period, the parties shall cooperate in the development and
implementation of marketing activities as agreed to by the parties in connection
with the Conversion Program as contemplated herein. Nucentrix shall be solely
responsible for the costs (other than the internal costs incurred by the
parties) associated with the sales and marketing activities conducted by the
parties in connection with the Conversion Program. Any and all advertising and
marketing materials shall be subject to DIRECTV's prior approval. No approval
shall limit Nucentrix's obligation to comply with applicable law or be deemed an
endorsement of any advertising content except as it relates to DIRECTV's DBS
Service.
6.2 NON-SOLICITATION. Nucentrix shall not market, advertise or
otherwise promote the Conversion Program or the Consumer Offers as contemplated
herein to any persons or entities other than the Eligible MMDS Subscribers.
7. CONSUMER OFFERS. During the Term of this Agreement, Nucentrix shall
extend the Consumer Offers to Eligible MMDS Subscribers and shall fulfill such
Consumer Offers (except for actual delivery of DIRECTV programming) in
accordance with the terms thereof.
8. NUCENTRIX COMPENSATION.
8.1 PREPAID CONVERSION COMMISSION. For each Eligible MMDS
Subscriber who agrees to become a Converted Subscriber and activates a DIRECTV
Programming Package in accordance with this
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Agreement, DIRECTV will pay Nucentrix a prepaid conversion commission in the
amount of "***" (the "PCC") upon DIRECTV's activation of a valid Order in
accordance with this Agreement. The parties agree and acknowledge that no PCC or
any other commissions, fees or otherwise shall be payable unless an Order for an
Eligible MMDS Subscriber is submitted by Nucentrix. (By way of example, if an
Eligible MMDS Subscriber buys a DIRECTV System from another DIRECTV sales agent
and becomes a DIRECTV subscriber, no payment whatsoever is payable to Nucentrix
for such subscriber).
8.2 DIRECTV SYSTEM SUBSIDY. In addition, in connection with
each Eligible MMDS Subscriber who accepts the Consumer Offer and becomes a
Converted Subscriber, DIRECTV agrees to provide Nucentrix with a DIRECTV System
subsidy in the amount equal to (a) the lowest wholesale price/cost of a DIRECTV
System (Dual LNB) generally available as reasonably determined by DIRECTV, for a
Single-Room Offer; or (b) the lowest wholesale price/cost of a DIRECTV System
(Dual LNB) and an additional receiver which are generally available, as
reasonably determined by DIRECTV, for a Two-Room Offer, less "***"
(collectively, the "DIRECTV System Subsidy").
8.3 INSTALLATION INCENTIVE. The following Single Room
Installation Incentive and Two Room Installation Incentive are referred to
collectively as the "Installation Incentives".
(a) DIRECTV will pay Nucentrix an additional
incentive in the amount equal to "***" for each standard professional
installation provided and performed for a DIRECTV System unit by Nucentrix to
Converted Subscribers who accept the Single-Room Offer in accordance with the
terms of this Agreement (the "Single Room Installation Incentive").
(b) DIRECTV will pay Nucentrix an additional
incentive in the amount equal to "***" for each standard professional
installation provided and performed for a DIRECTV System unit and an additional
DIRECTV Receiver unit (which unit is contemporaneously activated with the
primary System) by Nucentrix to Converted Subscribers who accept the Two-Room
Offer in accordance with the terms of this Agreement (the "Two Room Installation
Incentive").
8.4 CHARGEBACK. The PCCs, DIRECTV System Subsidies and the
Installation Incentives (collectively, the "Programming Commission") are prepaid
commission fees for the sale of twelve (12) months of a DIRECTV Programming
Package and the payment therefor by a Converted Subscriber during the initial
twelve (12)-month period from the date of activation. If a subscriber for whom
Nucentrix has received the Programming Commission terminates, cancels or
disconnects (whether initiated by subscriber or DIRECTV) his/her DIRECTV
Programming Package during the initial twelve (12)-month period, or the
subscriber fails to pay DIRECTV for the entire twelve (12)-month period of a
DIRECTV Programming Package, DIRECTV shall charge back Nucentrix the base fee of
"***", prorated to reflect the portion of the twelve (12)-month period for which
such DIRECTV Programming Package was not paid by the Converted Subscriber. By
way of example, if a Converted Subscriber disconnects his/her DIRECTV
Programming Package after the initial three (3) months, DIRECTV shall have the
right to charge Nucentrix back for 9/12 of "***" or "***".
8.5 CONTINUING SERVICE FEES. In consideration of Nucentrix's
continuing support of promotion and advertising designed to acquire new
Converted Subscribers, as well as Nucentrix's continuing service to Converted
Subscribers from whom it procures approved activations for which a PCC is
payable hereunder, DIRECTV shall pay Nucentrix "***" in connection with a
DIRECTV Programming Package ("Continuing Service Fees"). For purposes of this
Agreement, no Continuing Serve Fees shall be payable in connection with sports
subscriptions, pay-per-view movies and events, taxes, fees assessed against an
account (e.g., mirroring fees, late fees, change of service fees, etc.) or any
other non-DIRECTV Programming Package fees. Nucentrix acknowledges that
Continuing Service Fees are not deferred commissions or otherwise paid for
Nucentrix's procurement of Converted Subscribers, but instead are paid for
Nucentrix's continuing support of future Converted Subscriber acquisition
efforts and Nucentrix's continuing services to Converted Subscribers after the
initial order for DIRECTV Programming Package. Accordingly, DIRECTV's obligation
to pay Continuing Service Fees shall terminate upon the earliest to occur of any
of the following events, as they relate to each applicable Converted Subscriber:
(a) the termination of the Converted Subscriber for
any reason; or
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(b) the disconnection of the Converted Subscriber for
any reason, for any period of thirty (30) days or more; or
(c) the termination of this Agreement for Nucentrix's
material breach; or
(d) three (3) years after the approved activation of
the Converted Subscriber.
8.6 EXCEPTIONS. As used herein, the Programming Commissions
and the Continuing Service Fees shall be referred to collectively as
"Compensation". Nucentrix acknowledges that Nucentrix's failure to properly
follow DIRECTV's order procedures can prevent any such orders from being deemed
an approved activation for purposes of earning Compensation, regardless of
whether the order is activated by DIRECTV. DIRECTV's determination of whether
DIRECTV's order procedures have been properly observed shall be determinative,
absent manifest error.
(a) Notwithstanding anything to the contrary herein,
DIRECTV shall not be required to pay any Compensation for:
(i) any DIRECTV Programming Package sold to
a non-Eligible MMDS Subscriber;
(ii) any subscription for DIRECTV
Programming Package canceled prior to the commencement of service;
(iii) Orders made by a Subscriber to
Nucentrix prior to the Effective Date of this Agreement;
(iv) Orders for DIRECTV Programming Packages
delivered to DIRECTV after termination of this Agreement.
(b) DIRECTV shall not be required to pay any
Compensation on account of payments received by DIRECTV from subscribers after
the termination of this Agreement, except as provided in Section 15.1.
8.7 PAYMENT TERMS. DIRECTV shall pay the PCC, DIRECTV System
Subsidy and the Installation Incentive within 65 days after the end of the
DIRECTV Accounting Month in which the applicable Order is accepted as an
approved activation by DIRECTV and the Continuing Service Fees within 65 days
after the end of the DIRECTV Accounting Month in which DIRECTV receives the
applicable payment from a Converted Subscriber.
8.8 SHARING COMPENSATION PROHIBITED. Nucentrix shall not
rebate or share any Compensation with another sales agent of DIRECTV, or any
other party (whether or not an authorized sales agent of DIRECTV). Nucentrix may
not combine sales of DIRECTV Programming Packages with another agent. Nucentrix
acknowledges that any orders submitted under another agent's account number or
through such other agent's electronic interface with DIRECTV shall not be
credited to Nucentrix for purposes of calculating Compensation.
8.9 SET-OFFS BY DIRECTV. DIRECTV may set-off or recoup any
amounts owed to it by Nucentrix, or by its subsidiaries and affiliates, pursuant
to this or any other agreement with DIRECTV against any amounts which it owes to
Nucentrix. The foregoing does not limit DIRECTV's right to recover any
unrecouped balance.
9. CONFIDENTIAL INFORMATION.
9.1 CONFIDENTIAL INFORMATION. Each party recognizes and
acknowledges that it may have access to certain trade secrets or other
confidential information of the other party including, but not limited to, store
lists, financial data, subscriber lists and data, drawings and other technical
and commercial information, service and sales methods, advertising, promotion
and marketing strategies, programming strategies and prices relating to the
development and marketing of their respective products and services and that
such information
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constitutes valuable, special and unique property of the other party. The
confidential information of each party including the terms and provisions of
this Agreement is hereinafter collectively referred to as the "Confidential
Information."
9.2 MAINTAINING CONFIDENTIALITY. Each party agrees to maintain
the confidentiality of the Confidential Information, and not to sell, give,
assign, transfer or otherwise disclose the Confidential Information to any third
party other than (a) its employees, attorneys, independent certified public
accountants or other advisors who need to know the Confidential Information for
purposes related to this Agreement, (b) to the extent necessary to comply with
applicable law or the valid order of a court of competent jurisdiction or
governmental agency, in which event the disclosing party shall so notify the
other party as promptly as practicable (and, if possible, prior to making any
disclosure) and shall seek confidential treatment of such information, or in
connection with any arbitration proceeding, or (c) to enforce any of its rights
pursuant to this Agreement. Each party agrees that any person to whom the
Confidential Information is rightfully disclosed hereunder will use the
Confidential Information only for purposes related to the performance of this
Agreement.
9.3 PRESS RELEASE. Neither party shall issue a press release
regarding this Agreement or any matters related to the Conversion Program
without the prior written consent of the other party, which consent shall not be
unreasonably withheld.
10. INSURANCE. Nucentrix shall maintain in force, during the term
hereof, policies of insurance issued by reputable carriers, covering insurable
risks and with limits specified by DIRECTV. Such policies shall name DIRECTV as
an additional insured and shall provide for thirty (30) days prior written
notice to DIRECTV of any material modification, cancellation, or expiration of
each policy. Nucentrix shall deliver certificates of insurance to DIRECTV
evidencing such uninterrupted coverage on DIRECTV's request.
11. INTELLECTUAL PROPERTY. DIRECTV shall provide Nucentrix with a logo
and trademark usage manual ("Usage Manual") (which may be amended by DIRECTV
from time to time in its discretion) that specifies the permitted uses of
DIRECTV's service marks, trademarks, and other commercial symbols ("Marks").
Nucentrix may use the Marks only in accordance with the provisions of this
Agreement and the Usage Manual. Nucentrix shall not use any logo, trademark,
service xxxx or trade name of any supplier of DIRECTV (including, without
limitation, entities providing programming to DIRECTV) for any purpose except as
expressly permitted by such supplier. Nucentrix shall not acquire any right to
any xxxxxxxx, Xxxx, copyright, or other form of intellectual or commercial
property of DIRECTV, except for the limited use rights expressly granted herein.
12. ASSIGNMENT.
12.1 ASSIGNMENT BY DIRECTV. This Agreement may be assigned by
DIRECTV to any entity which assumes the obligations of DIRECTV hereunder and
acquires the right and ability to perform them.
12.2 ASSIGNMENT BY NUCENTRIX. This Agreement is made by
DIRECTV in reliance on the financial, business and personal reputation of
Nucentrix and its ownership and management. Accordingly, this Agreement may not
be assigned or encumbered by Nucentrix without DIRECTV's prior written consent.
13. TERM.
13.1 TERM. The initial term of this Agreement shall commence
on the Effective Date hereof and shall continue, unless terminated in accordance
herewith, for a period of twelve (12) months after the Effective Date.
13.2 RENEWAL. Except as provided below, the term shall
automatically renew, upon the same terms and conditions, for an unlimited number
of successive renewal terms of one year each. Either party may elect to cancel
this Agreement for any reason, effective upon the expiration of the then-current
term, by delivering written notice thereof to the other party at least
forty-five (45) days prior to such expiration.
14. TERMINATION. This Agreement shall be terminable upon the following
conditions:
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14.1 REGULATORY CHANGES. DIRECTV may terminate this Agreement
immediately upon written notice to Nucentrix if the Federal Communications
Commission or any other regulatory agency promulgates any rule or order which
(a) in effect or application substantially impedes DIRECTV from fulfilling its
obligations hereunder or providing DBS Service in substantially the same manner
as currently provided by DIRECTV, or (b) materially and adversely affects
DIRECTV's ability to conduct a DBS Service business in substantially the same
manner as currently provided by DIRECTV in its reasonable discretion.
14.2 IMMEDIATE TERMINATION. DIRECTV may terminate this
Agreement immediately upon written notice to Nucentrix, without opportunity to
cure, if Nucentrix (a) breaches the Exclusive Obligations; (b) knowingly
misrepresents DIRECTV's DBS Service, its Programming Packages or the Consumer
Offers to customers or otherwise misleads them as to their content, rates, or
terms; (c) violates any law or knowingly breaches the standards of conduct set
forth in Section 3.4; (d) uses or discloses DIRECTV's Confidential Information
in violation of Section 9; or (e) commits a material breach hereof which by its
terms or nature is not curable.
14.3 BREACH BY NUCENTRIX. Except as otherwise provided herein,
DIRECTV may terminate this Agreement immediately upon written notice if
Nucentrix fails to cure a breach of any material obligation hereunder which is
curable, within thirty (30) days after written notice specifying such breach.
14.4 BREACH BY DIRECTV. Except as otherwise provided herein,
Nucentrix may terminate this Agreement immediately upon written notice if
DIRECTV fails to cure a breach of any material obligation hereunder which is
curable, within thirty (30) days after written notice specifying such breach.
14.5 BANKRUPTCY OR CESSATION OF BUSINESS. Subject to
applicable law, this Agreement shall terminate automatically upon Nucentrix's
cessation of business, election to dissolve, dissolution, insolvency, failure in
business, commission of an act of bankruptcy, general assignment for the benefit
of creditors, any levy, attachment or foreclosure, or the enforcement of any of
the rights of a secured creditor of Nucentrix or the filing of any petition in
bankruptcy or for relief under the provisions of the bankruptcy laws.
15. RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION.
15.1 COMPENSATION. DIRECTV shall pay to Nucentrix, after the
termination or expiration hereof, (a) any unpaid Compensation which was earned
by Nucentrix prior to termination in accordance herewith, (b) Programming
Commissions owing for Orders which Nucentrix properly delivered to DIRECTV prior
to termination, provided such Orders are accepted as approved activations by
DIRECTV, and (c) except as otherwise provided in Section 8.5, Continuing Service
Fees for a period of three (3) years after the approved activation of the
Converted Subscriber. DIRECTV may in its discretion withhold payment of
Programming Commissions, in whole or in part, until they are fully earned as
herein provided. WITHOUT LIMITATION, AGENT IS NOT ENTITLED TO ANY COMPENSATION
WHATSOEVER FOR ORDERS WHICH ARE NOT DELIVERED TO DIRECTV, AS HEREIN REQUIRED,
PRIOR TO THE EFFECTIVE DATE OF TERMINATION, EVEN IF ORDERS DELIVERED AFTER
TERMINATION RESULT IN ACTIVE SUBSCRIPTIONS TO DIRECTV'S DBS SERVICE.
15.2 OBLIGATIONS OF NUCENTRIX. Except as otherwise permitted
by another agreement between the parties hereto, upon termination or expiration
of this Agreement for any reason, Nucentrix shall immediately cease using and
shall, upon request of DIRECTV, deliver to DIRECTV: (a) any unused DIRECTV sales
literature; (b) all originals and copies of completed and uncompleted Order
forms and applications; and (c) all forms, directives, policy manuals and other
written information and materials supplied to it by DIRECTV pursuant to this
Agreement or which contain DIRECTV's Marks. Except as otherwise permitted by
another agreement between the parties hereto, on termination, Nucentrix shall
immediately discontinue all sales of DIRECTV Programming Packages and all use of
DIRECTV's Confidential Information and shall cease to identify itself as an
authorized sales agent for DIRECTV's DBS Service or otherwise affiliated in any
manner with DIRECTV. Because of the difficulty in establishing the improper use
of customer lists and other Confidential Information, Nucentrix agrees that for
a period of two (2) years after termination or expiration of this Agreement, it
shall not, on behalf of any other provider of multi-channel video programming
provider or on its own behalf, solicit any Converted Subscriber who was procured
by Nucentrix and is a Converted Subscriber as of such termination or expiration
date.
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15.3 WAIVER OF CLAIMS. EACH PARTY WAIVES ANY RIGHT TO DAMAGES IN
CONNECTION WITH THE TERMINATION OF THIS AGREEMENT (AS LONG AS SUCH TERMINATION
IS IN ACCORDANCE WITH THE TERMS HEREOF), TO WHICH IT MIGHT OTHERWISE BE ENTITLED
UNDER ANY APPLICABLE LAW. BY WAY OF EXAMPLE, NUCENTRIX SHALL HAVE NO RIGHT,
BASED ON SUCH TERMINATION, TO ANY PAYMENT FROM DIRECTV FOR LOST BUSINESS, FUTURE
PROFITS, LOSS OF GOODWILL, REIMBURSEMENT OF EXPENDITURES OR INVESTMENTS MADE OR
COMMITMENTS ENTERED INTO, ADVERTISING COSTS, OVERHEAD OR OTHER COSTS INCURRED OR
ACQUIRED BASED UPON THE BUSINESS DERIVED OR ANTICIPATED UNDER THIS AGREEMENT, OR
FOR ANY OTHER DAMAGES IN CONNECTION WITH THE TERMINATION OF THIS AGREEMENT (AS
LONG AS SUCH TERMINATION IS IN ACCORDANCE WITH THE TERMS HEREOF AND SUBJECT TO
SECTION 19 BELOW). NOTWITHSTANDING THE FOREGOING, NOTHING CONTAINED IN THIS
SECTION 15.3 SHALL PRECLUDE NUCENTRIX FROM RECOVERING AMOUNTS DUE AND OWING
HEREUNDER FOR CONVERTED SUBSCRIBERS IN THE EVENT OF TERMINATION OF THIS
AGREEMENT.
15.4 SURVIVAL. The covenants and conditions herein which, by
their terms or nature, extend beyond the termination or expiration of this
Agreement, shall survive such termination or expiration until fully performed.
16. FORCE MAJEURE. Neither party shall be liable for any loss, damage,
cost, delay, or failure to perform in whole or in part resulting from causes
beyond such party's control, including but not limited to, fires, strikes,
insurrections, riots, or requirements of any governmental authority.
17. INDEPENDENT CONTRACTOR RELATIONSHIP. Nucentrix is an independent
contractor authorized during the term hereof to solicit orders for DIRECTV
Programming Packages as a commissioned sales agent for Eligible MMDS
Subscribers. Nucentrix is not a partner, franchisee, or employee of DIRECTV for
any purpose whatsoever. The provisions of this Agreement are for the benefit
only of the parties hereto, and no third party may seek to enforce, or benefit
from, these provisions.
18. INDEMNIFICATION. Except as provided below, each party shall defend
and indemnify the other, its affiliates and their respective employees,
officers, and directors from and against any and all third party claims and
resulting damages, costs, and other liabilities arising out of the indemnifying
party's breach or alleged breach of its obligations under this Agreement,
negligence, or other wrongful conduct. Nucentrix shall defend and indemnify
DIRECTV from any claims of third parties for compensation or damages arising out
of the termination of this Agreement or of Nucentrix's ability to take orders
for DIRECTV Programming Packages. DIRECTV shall not be required to indemnify
Nucentrix with respect to the content of any programming (including without
limitation claims relating to trademark, copyright, music, music performance and
other proprietary interests) unless and solely to the extent of any applicable
pass-through indemnification provided to DIRECTV by the providers of such
programming. NUCENTRIX WAIVES ANY RIGHT TO INDEMNIFICATION ARISING OUT OF THE
CONSTRUCTION, USE AND/OR OPERATION OF DIRECTV'S SATELLITE(S) AND RELATED
SYSTEMS.
19. LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE FOR ANY
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OF THE OTHER PARTY OR ANY THIRD
PARTY, WHETHER FORESEEABLE OR NOT AND WHETHER BASED ON NEGLIGENCE OR OTHERWISE.
PROJECTIONS OR FORECASTS BY EITHER PARTY SHALL NOT CONSTITUTE BINDING
COMMITMENTS. IN NO EVENT SHALL DIRECTV'S DAMAGES TO NUCENTRIX UNDER THIS
AGREEMENT EXCEED THE AMOUNTS PAID OR DUE TO NUCENTRIX FOR THE SALE OF DIRECTV
PROGRAMMING PACKAGES DURING THE PREVIOUS TWELVE (12)-MONTH PERIOD. THE
COMPENSATION PROVIDED TO NUCENTRIX HEREUNDER REFLECTS THIS ALLOCATION OF RISK.
20. MISCELLANEOUS.
20.1 LAWS. This Agreement has been entered into in the State
of California and all issues with respect to the construction of this Agreement
and the rights and liabilities of the parties shall be governed by the laws of
the State of California, without regard to its conflicts of law rules.
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20.2 INTEGRATION. This Agreement replaces any prior agreement,
understanding and commitment between the parties regarding Nucentrix's
appointment and performance as a commissioned sales agent for DIRECTV in
connection with the Conversion Program as described herein. Nucentrix is not
relying on any oral or written statements or representations made by any DIRECTV
employee or representative regarding such matters other than those expressly set
forth herein.
20.3 COMPLIANCE. Both parties shall comply with all applicable
laws, rules and regulations of all governmental authorities.
20.4 EXPENSES. Except as otherwise expressly set forth herein,
both parties shall pay all of their respective costs and expenses under this
Agreement and shall be solely responsible for the acts and expenses of their
respective agents and employees.
20.5 AMENDMENTS. Any modification of this Agreement must be in
writing and signed by both parties, except as otherwise expressly provided
herein. Nucentrix acknowledges that the Policies promulgated by DIRECTV, in
accordance with Section 3.3, as well as the modifications to order procedures
set forth in EXHIBIT B, do not constitute modifications requiring Nucentrix's
written consent.
20.6 AUTHORIZATION; CAPACITY. Each party represents that the
execution, delivery and performance of this Agreement have been duly authorized,
that it has the full right, power, and authority to execute, deliver and perform
this Agreement, and that such execution, delivery and performance do not and
will not conflict with any agreement, instrument, order, judgment or decree to
which such party is a party or by which it is bound.
20.7 NO IMPLIED WAIVERS. The failure of either party to
require the performance by the other of any provision of this Agreement shall
not affect in any way the right to require such performance at any later time
nor shall the waiver by either party of a breach of any provision hereof be
deemed a waiver of such provision.
20.8 NOTICES. Any notice or other written communication
required or permitted to be given by this Agreement shall be deemed given when
personally delivered or delivered by Federal Express or telecopied, or three (3)
business days after it has been sent by United States first-class, certified or
registered mail, postage prepaid, properly addressed to the addresses set forth
below the signatures herein. Nucentrix shall provide a minimum of thirty (30)
days advance written notice to DIRECTV in the event of any address or telephone
change.
20.9 INVALID OR UNENFORCEABLE PROVISIONS. If any provision of
this Agreement is determined to be invalid or unenforceable, the provision shall
be deemed severed from the remainder, which shall remain enforceable. If any
provision of this Agreement does not comply with any law, ordinance or
regulation of any governmental or quasi-governmental authority, now existing or
hereinafter enacted, such provision shall to the extent possible be interpreted
in such a manner so as to comply with such law, ordinance or regulation, or if
such interpretation is not possible, it shall be deemed amended, to satisfy the
minimum requirements thereof.
20.10 GOVERNMENTAL APPROVALS. This Agreement shall be subject
to all necessary approvals of local, state and federal regulatory agencies.
20.11 TAXES. Any taxes asserted against Nucentrix or DIRECTV
by any governmental authority as a result of this Agreement shall be the
responsibility of the parties as follows: (a) Nucentrix shall be responsible for
any taxes or levies arising out of its performance hereunder, with the exception
of any sales tax as to which DIRECTV has provided to Nucentrix the appropriate
rate and Nucentrix has forwarded such amount to DIRECTV; and (b) each party
shall be responsible for any taxes related to its income derived hereunder.
20.12 ARBITRATION.
(a) Any dispute or claim arising out of the
interpretation, performance, or breach of this Agreement, including without
limitation claims alleging fraud in the inducement, shall be resolved only by
binding arbitration, at the request of either party, in accordance with the
rules of the American Arbitration Association, modified as herein provided. The
arbitrators shall be, to the fullest extent available, either retired judges
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or selected from a panel of persons trained and expert in the subject area of
the asserted claims. If the claim seeks damages of less than $250,000, it shall
be decided by one arbitrator. In all other cases, each party shall select one
arbitrator, who shall jointly select the third arbitrator. If for any reason a
third arbitrator is not selected within one month after the claim is first made,
the third arbitrator shall be selected in accordance with the rules of the
American Arbitration Association. The arbitrators shall apply California
substantive law to the proceeding, except to the extent Federal substantive law
would apply to any claim. The arbitration shall be conducted in Los Angeles,
California. An award may be entered against a party who fails to appear at a
duly noticed hearing. The arbitrators shall prepare in writing and provide to
the parties an award including factual findings and the reasons on which their
decision is based. The arbitrators shall not have the power to commit errors of
law or legal reasoning, and the award may be vacated or corrected on appeal to a
court of competent jurisdiction for any such error. The decision of the
arbitrators may be entered and enforced as a final judgment in any court of
competent jurisdiction. The parties shall share equally the arbitrator's fees
and other costs of the arbitration.
(b) Notwithstanding the foregoing, the following
shall not be subject to arbitration and may be adjudicated only by the Los
Angeles County, California Superior Court or the U.S. District Court for the
Central District of California:
(1) any dispute, controversy, or claim
relating to or contesting the validity of DIRECTV's right to offer DBS Service
to the public or any of DIRECTV's Confidential Information or Marks; and
(2) the request by either party for
preliminary or permanent injunctive relief, whether prohibitive or mandatory, or
provisional relief such as writs of attachments or possession.
(c) This Section and any arbitration conducted
hereunder shall be governed by the United States Arbitration Act (9 U.S.C.
Section 1, et seq.). The parties acknowledge that the transactions contemplated
by this Agreement involve commerce, as defined in said Act. This Section 20.12
shall survive the termination or expiration of this Agreement.
20.13 ATTORNEYS' FEES. In the event of any litigation or
arbitration between the parties with respect to this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees and costs of
litigation, as the court or tribunal may determine.
20.14 BENEFITS. Subject to the restrictions against assignment
herein provided, this Agreement shall bind and inure to the benefit of the
successors and permitted assigns of each of the parties hereto.
20.15 LOCAL CHANNEL DELIVERY. As long as Nucentrix retransmits
at least four (4) local off-air channels to single-family residential MMDS video
subscribers through its MMDS network in a market in the Territory in which
DIRECTV does not deliver such channels to its subscribers, Nucentrix shall
retransmit the same channels to Converted Subscribers at no charge to the
Converted Subscriber. Nothing in this Section 20.15 shall require Nucentrix to
install, operate or maintain the reception equipment necessary for Converted
Subscribers, in a particular market, to receive such channels, except to the
extent that Nucentrix provides such services to single-family residential MMDS
subscribers in such market generally or Nucentrix is obligated to do so under
applicable laws or agreement with the Converted Subscriber.
20.16 [EXISTING SALES AGENCY AGREEMENT. Nothing contained
herein shall modify or impair either party's rights or obligations under that
Sales Agency Agreement between DIRECTV and Nucentrix dated February 7, 2001,
which shall remain in full force and effect in accordance with its terms.]
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DIRECTV, INC.
DIRECTV Approval Stamp: /s/ XXXXX XXXXXX Date: March 10, 2002
--------------------- --------------------------
Xxxxx Xxxxxx
Vice President
Group Sales
Address: DIRECTV, Inc.
0000 Xxxx Xxxxxxxx Xxxxxxx
Xx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Nucentrix Broadband Networks, Inc. f/k/a Heartland Wireless Communications,
Inc.,
By: /s/ XXXXXXX X. XxXXXXX
------------------------------------
(signature)
Name: Xxxxxxx X. XxXxxxx
----------------------------------
Title: President & CEO
---------------------------------
Location Address:
0000 Xxxxxxxxxxxxx Xxxxxxx
---------------------------------------
Suite 2000
---------------------------------------
Xxxxxxxxxx, Xxxxx 00000
---------------------------------------
City, State, Zipcode
Mailing Address:
---------------------------------------
---------------------------------------
---------------------------------------
City, State, Zipcode
Telecopy No.: 972.662.3800
-------------------------
Telephone No.: 000.000.0000
-------------------------
Federal I.D. or Social Security Number: 00-0000000
--------------------
CHECK ONE:
[ ] Sole Proprietor
[ ] Partnership
[X] Corporation
NOTE: PLEASE ATTACH W-9
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