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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.
AGREEMENT
This Agreement ("Agreement") is made and entered into as of this 5th
day of April, 1998, by and between DIRECTV, Inc., a California corporation
("DIRECTV"), and Heartland Wireless Communications, Inc., a Delaware corporation
("Company").
W I T N E S S E T H:
WHEREAS, DIRECTV is an operator of a direct broadcast satellite ("DBS")
service through which consumers may receive video, audio and other programming
via specialized DSS(R) satellite receiving equipment;
WHEREAS, DIRECTV desires to establish a single-family household
DBS/MMDS program (the "Program") to solicit orders for DIRECTV(R) video, audio
and other programming services;
WHEREAS, DIRECTV desires that Company act as a commissioned sales agent
under the Program and solicit Company's residential customers and prospects
through direct sales methods, including, telemarketing, direct mail,
door-to-door sales, and such other methods as DIRECTV shall approve ("Approved
Sales Methods"), to order DIRECTV programming packages and services (as set
forth on EXHIBIT A incorporated herein, the "DIRECTV Programming Packages") as a
complement to the consumer's purchase, lease or rental of DSS receiving
equipment (the "DSS System");
WHEREAS, Company desires to act as a commissioned sales agent of
DIRECTV under the Program and solicit residential customers through Approved
Sales Methods to order DIRECTV Programming Packages as a complement to the
consumer's purchase, lease or rental of DSS System;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
A. TERM. Unless earlier terminated in accordance with the terms hereof,
the term of our agreement shall commence upon the execution of this
Agreement and shall continue for a period of five (5) years. To this
end, Company shall use commercially reasonable efforts to maximize the
acquisition of DIRECTV subscribers under this Agreement and the
Cooperative Marketing Agreement as defined below.
B. TERRITORY. Company shall be authorized to solicit orders for DIRECTV
Programming Packages via Approved Sales Methods only from single family
residential households ("Residential Households"), excluding any
condominium complex, apartment building (including both rental and
cooperative apartments), or townhouse communities, and other multiple
dwelling units (collectively, "MDUs") located in the contiguous United
States (the "Territory"). Notwithstanding the foregoing, the parties
hereto acknowledge the existence of a Cooperative Marketing Agreement
between DIRECTV and Company, whereby Company became a "System Operator"
of DIRECTV in connection with the MDUs. The parties agree that the
rights as set forth herein to Company are provided on the basis that
Company will continue to perform its obligations under such Cooperative
Marketing Agreement "***".
C. ORDERS FOR DIRECTV PROGRAMMING PACKAGES.
(1) Company shall "***" solicit orders for DIRECTV Programming
Packages and to promote and enhance DIRECTV's business,
reputation and goodwill. DIRECTV will notify Company from time
to time of the DIRECTV Programming Packages for which Company
will be authorized to accept orders from the Residential
Households. All such orders for DIRECTV Programming Packages
shall
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be taken on the terms and conditions, including pricing,
specified to Company in writing by DIRECTV. "***"
(2) Company acknowledges and agrees that this Agreement authorizes
Company to submit to DIRECTV solely those orders for DIRECTV
Programming Packages that Company (or its employees on
Company's behalf) has solicited. In no event shall Company
submit orders to DIRECTV that have been solicited by another
agent, or for which Company has paid, has agreed to pay, or
will pay another person or entity any fees, commission or
other compensation (other than any compensation to its
employees) without the prior written consent of DIRECTV, which
consent may be withheld in DIRECTV's sole discretion. Any
breach of this Section shall be deemed a material breach of
this Agreement.
D. FEES.
(1) Subject to the limitations and restrictions set forth in this
Agreement, DIRECTV will pay Company a continuing service fee
(the "Continuing Service Fee") as set forth in the Fee
Schedule set forth in EXHIBIT B incorporated herein,
representing a percentage of all DIRECTV Programming Packages
revenue (excluding any Taxes, applicable fees and revenue
received in connection with pay-per-view or other
non-subscription programming) received by DIRECTV from each
Qualifying Subscriber (the "Net Revenues"), commencing on the
date of activation of such Qualifying Subscriber until the
earlier of (a) the termination or expiration of this Agreement
for any reason or (b) the termination, deactivation or
discontinuation of such Qualifying Subscriber's DIRECTV
Programming Package for any reason. In addition, an activation
fee will be paid to Company at the time of activation of
service for a Qualifying Subscriber ("Activation Fee") based
on the requirements and guidelines as set forth in EXHIBIT B.
Such Activation Fees are subject to chargebacks under certain
circumstances as specified in EXHIBIT B. "Qualifying
Subscriber" shall mean a Residential Household located within
the Territory from which Company solicits and takes the
initial order for a DIRECTV Programming Package pursuant to
the terms of this Agreement and which order is transmitted to
DIRECTV in accordance with the terms of this Agreement and
approved by DIRECTV in its sole discretion.
(2) All Fees for orders of DIRECTV Programming Packages will be
paid within "*" days after the accounting month, as such
accounting month is determined by DIRECTV (the "Accounting
Month"), in which DIRECTV receives payment for such DIRECTV
Programming Package.
(3) Company understands that DIRECTV will pay Fees as set forth
herein for DIRECTV Programming Packages sold by Company to
Residential Households in areas in the Territory which have
not been purchased by the National Rural Telecommunications
Cooperative ("NRTC"). DIRECTV will pay Fees for DIRECTV
Programming Packages sold by Company to Residential Households
in areas in the Territory which have been purchased by the
NRTC only in the amount and for the period of time that NRTC
reimburses DIRECTV for such Fee payments. Attached as EXHIBIT
C is a map indicating the areas in the Territory purchased by
the NRTC. As those NRTC territories which have agreed to
reimburse DIRECTV become known to DIRECTV, DIRECTV shall
provide Company with a list of such territories. Upon
execution of this Agreement, DIRECTV agrees to provide Company
with a complete list of NRTC zip codes in an electronic
format.
(4) Company shall not earn, and DIRECTV shall not pay, any Fees or
other amounts for any order of a DIRECTV Programming Package
that is not accurately, completely and properly transmitted to
DIRECTV by Company promptly pursuant to the terms set forth in
this Agreement and those Policies and Procedures described
herein below. Notwithstanding anything to the contrary
contained herein, "***"
E. DSS SYSTEM SUBSIDY.
(1) For each Qualifying Subscriber who initially activates a
minimum of DIRECTV Select Choice programming package during
the term of this Agreement, DIRECTV will provide a subsidy
payment to Company equal to "***". Company shall be solely
responsible and liable for any difference between the price of
the DSS System purchased by Company and the Subsidy provided
by
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DIRECTV. As a way of example, if the Subsidy provided by
DIRECTV hereunder is "*" and the price of the DSS System
purchased by Company is "*", Company shall be solely
responsible for the "*" in the difference between the two
amounts.
(2) Company hereby agrees and acknowledges that, in order to
receive the Subsidy as set forth herein, Company must provide
such DSS System to the Qualifying Subscribers through a rent,
lease, rent-to-own or lease-to-own model, which rent, lease,
rent-to own or lease -to-own model/arrangement must be in
compliance with any and all applicable federal, state and
local laws, statutes, codes, rules, regulations, ordinances or
otherwise.
(3) Company hereby represents and warrants that each DSS System
subsidized hereunder will generate, during the term of this
Agreement, gross revenues of "*" or more, in DIRECTV
Programming purchases (including pay-per-view movies and
events and sports programming subscriptions) on an aggregate
basis (collectively, the "Gross Revenues"). Upon the
expiration or termination of this Agreement for any reason, if
the aggregate Gross Revenues from all Qualifying Subscribers
are less than "*" times the aggregate number of DSS System
provided to such Qualifying Subscribers (the "Aggregate
Minimum Gross Revenues"), Company shall pay DIRECTV the
difference between the Aggregate Minimum Gross Revenues and
the actual gross revenues generated from the Qualifying
Subscribers. As a way of example, if DIRECTV provides the
Subsidy for 300 DSS Systems, the Aggregate Minimum Gross
Revenues shall be (300 x "*"), or "*"; if the actual gross
revenues are less than "*", Company shall remit to DIRECTV the
difference between such revenues. DIRECTV will remit the DSS
System Subsidy to Company within "*" days of verification of
purchases of DSS Receivers by Company and subsequent
leasing/renting of such DSS System to Qualifying Subscribers.
(4) DIRECTV will not provide DSS Systems to Company except as
otherwise agreed by DIRECTV and Company. In the event that the
DSS System is provided in lieu of the Subsidy, Company must
request shipment of DSS Systems in increments of 25 DSS
Systems with a minimum request of 25 DSS Systems, otherwise
Company shall bear the cost of the shipping and other charges
related therewith. For purposes of this Agreement, a DSS
System provided hereunder shall be treated as an equivalent to
a DSS System Subsidy, wherever appropriate. DIRECTV shall
notify Company of any changes to the price/cost of the DSS
System for purposes of the Subsidy at least 30 days prior to
such change.
(5) Except as otherwise provided under this Section E, Company
shall be solely responsible and liable, and reimburse DIRECTV,
if necessary, for any and all costs, expenses, charges, fees
and taxes in connection with the Subsidies provided by DIRECTV
hereunder.
(6) The access card included in each DSS System requires recycling
by DIRECTV each time a DSS System is assigned from a
terminated or deactivated Qualifying Subscriber to a new
Qualifying Subscriber. Company shall be responsible and liable
to DIRECTV for any and all costs associated with the recycling
of the access card (which fee must be reasonable in relation
to the costs incurred by DIRECTV in connection with the
recycling process) upon such assignment.
(7) The reimbursement obligations of Company as set forth in
Section E shall survive the expiration or termination of this
Agreement.
F. ADVERTISING.
(1) Company agrees to "***" market DIRECTV Programming Packages
and services and shall spend an average of "***" per
Qualifying Subscriber in connection with such advertising
efforts.
(2) DIRECTV agrees to assist Company in the marketing and
promotion of DIRECTV Programming Package through matching of
Company's actual advertising spending (the "Advertising Co-Op
Fund"). In order to receive the Advertising Co-Op Fund,
Company must obtain DIRECTV's prior approval for the
applicable advertising programs and the spending therefor (the
"Approved Programs"). For every dollar spent by Company in
connection with the Approved Programs of the
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DIRECTV Programming Packages in accordance with this
Agreement, DIRECTV will pay Company the Advertising Co-Op Fund
in an amount up to "***" per Qualifying Subscriber. Company
shall provide documentation as reasonably requested by DIRECTV
which verifies the advertising costs incurred by Company for
the Approved Programs. Company agrees that it will apply the
Advertising Co-Op Fund throughout the term of the Agreement
toward the advertising of the DIRECTV Programming Packages to
potential Qualifying Subscribers. DIRECTV will provide the
Advertising Co-Op Fund to Company within "***" days of
verification of Company's actual advertising spending in
accordance with this Section.
(3) "***"
G. DISPLAY MATERIALS; MARKETING/MERCHANDISING AND ADVERTISING.
(1) PROMOTION AND ADVERTISING. Except as set forth in Section F
hereinabove, Company agrees to promote and advertise DIRECTV
and/or DSS products, at Company's sole cost and expense, using
traditional advertising and marketing means at Company's sole
discretion and after prior approval by DIRECTV with a targeted
market area that is in accordance with Company's standard
marketing practices. Company agrees to provide all such
promotion and advertising materials to DIRECTV for approval
prior to use by Company, and DIRECTV shall provide its
approval or denial of approval, as the case may be, within no
more than 10 business days from the date of receipt of such
materials.
(2) TELEMARKETING. Company may implement, subject to DIRECTV's
written approval, telemarketing operations designed to promote
DIRECTV Programming Packages in the Territory. Such
telemarketing operations shall be implemented in accordance
with a mutually agreeable plan. Company may engage in other
Approved Sales Methods promoting DIRECTV Programming Packages,
provided that DIRECTV shall have given its advance written
approval thereof (which approval may be granted or withheld in
DIRECTV's sole discretion at any time).
(3) LOGO/TRADEMARK/SERVICE NAME GUIDELINES. DIRECTV has provided
Company with a trademark and logo usage guidelines manual
attached hereto in EXHIBIT D (which manual may be amended by
DIRECTV from time to time) that specifies the proper use and
placement of the DIRECTV and DSS trademarks, service names and
logos. Company agrees to use DIRECTV and DSS trademarks,
service names and logos only in accordance with the provisions
of the guidelines manual. Company shall not use any logo,
trademark, service xxxx or name of any supplier of DIRECTV
(including, without limitation, entities providing programming
to DIRECTV) for any purpose not allowed by such supplier.
(4) RISK OF LOSS. Company shall be responsible for any loss of, or
damage to any photos, slides, artwork or other graphic or
written materials (collectively, "Materials") provided to
Company by DIRECTV pursuant to this Agreement (whether
prepared by DIRECTV or by a third party for DIRECTV) while in
Company's custody. Company shall pay DIRECTV for any loss of
or damage to Materials, including all costs for replacement or
re-creation of the Materials. Company's responsibility shall
commence when the Materials are received by Company and shall
terminate only when Company returns all Materials to DIRECTV
in accordance with this Agreement.
(5) NONCOMPLIANCE. Any material noncompliance by Company with the
provisions of this Section, including but not limited to,
failure to obtain DIRECTV's approval of promotional and
advertising materials prior to use by Company shall be a
material breach of this Agreement.
H. OTHER COVENANTS AND REPRESENTATIONS.
(1) STANDARD OF CONDUCT. Company shall not engage in any activity
or business transaction which could be considered unethical,
or anticompetitive or damaging to DIRECTV's image or goodwill
or harmful to DIRECTV's business in any way. Company agrees
that it will comply with all applicable federal, state and
local laws, regulations and codes in the performance of this
Agreement and in all activities undertaken by Company pursuant
to or in furtherance of the goals of this Agreement,
including, without limitation, all federal and state laws
governing sales by direct sales methods, and any rules
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and regulations of any homeowners' associations governing
Residential Households Company may solicit. Company agrees to
indemnify DIRECTV for any loss or damage that may be sustained
by reason of Company's failure to comply with such federal,
state and local laws, regulations and codes.
(2) NO FINANCING OR COLLECTION OF FEES. Company shall not provide
financing for, or collect subscription fees or other money due
to DIRECTV from customers for, orders taken for DIRECTV
Program Packages; subscription fees for such orders shall be
billed directly to the customer by DIRECTV. If, in accidental
contravention of this Section, a subscriber purchasing a
DIRECTV Programming Package from Company pays Company for such
DIRECTV services, Company shall promptly notify DIRECTV and
take such action (including collection from such subscriber
and payment to DIRECTV of the subscription price and any
applicable taxes or other governmental charges) as DIRECTV may
direct.
(3) "***"
(4) ACCOUNTING SUPPORT/RECORD MAINTENANCE. 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.
(5) ACTIVATIONS/TRAINING. Company shall allow only Company's
full-time employees (and not any independent contractors,
sub-agents or other person or entity) to solicit, take or
transmit any orders for DIRECTV Programming Packages unless
Company obtains DIRECTV's prior written consent to use of such
other person or entity, which consent may be withheld in
DIRECTV's sole, reasonable discretion. DIRECTV will provide
training and training materials to Company's training
personnel, as reasonably necessary. Company will be
responsible for the subsequent training of Company's personnel
to the satisfaction of DIRECTV. Any failure to adequately
train Company's personnel within thirty (30) days after notice
thereof by DIRECTV shall be a material breach of this
Agreement.
(6) NO TYING. Company agrees that in no event shall any sale of a
DIRECTV Programming Package or any DSS System be conditioned
upon, tied to or otherwise bundled with the sale of any other
product or service, including, without limitation, any
extended warranty other than a manufacturer's warranty, other
than as approved by DIRECTV in writing.
(7) TYPE OF ENTITY. Company hereby represents and warrants that:
(a) Except as otherwise expressly set forth in this
Agreement, Company is engaged in an independent
business, and intends to and will perform its
obligations under this Agreement as an independent
contractor and not as an agent or employee of
DIRECTV; Company's personnel are agents, employees or
subcontractors of Company and are not employees or
agents of DIRECTV; Company has and hereby retains the
right to exercise full control of and supervision
over the employment, direction, compensation and
discharge of any and all of Company's personnel
assisting in the performance of such obligations;
Company will be solely responsible for all matters
relating to payment of Company's personnel, including
compliance with workers compensation, unemployment,
disability insurance, social security, withholding,
and all other federal, state and local laws, rules
and regulations governing such matters; and Company
will be responsible for its own acts and those of its
agents, employees and subcontractors during the
performance of its obligations under this Agreement;
and
(b) This Agreement is intended to secure to DIRECTV
Company's assistance and cooperation and shall
operate to preclude Company from performing services
for others during the term of this Agreement that
could reasonably result in a conflict of interest
with the contractual
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relationship represented by this Agreement. Without
limiting any other provisions of this Agreement,
Company agrees that such a conflict of interest would
include, but not be limited to, Company or one of its
affiliates entering into a business relationship with
any other provider of a direct broadcast business. If
Company or one of its affiliates does undertake such
services, Company shall promptly so notify DIRECTV
and DIRECTV may, at its option, terminate this
Agreement, in addition to any other rights DIRECTV
may have under the terms of this Agreement.
(c) Company has provided to DIRECTV a true and complete
list of all Company's existing retail locations and
shall promptly provide DIRECTV with any additions or
deletions to such list during the term of this
Agreement.
A breach of any provision in this Section shall be a material
breach of this Agreement.
I. AUTOMATED ACCOUNT SET-UP SYSTEM.
(1) The parties will work together to identify opportunities and
potential viability for establishing an electronic
communications interfaces between Company and DIRECTV to allow
Company to perform automated account set-up and processing
from Company's location and which comply with the technical
parameters and/or standards specified by DIRECTV. Each of us
shall be responsible for implementing and bearing the costs
associated with our respective interfaces. Company shall pay
any telephone line costs associated with the electronic
communications interface link between Company and the
Electronic Data Interchange ("EDI") address (or other
applicable computer interface connection point) where DIRECTV
accesses the orders Company transmit to DIRECTV.
(2) Company hereby covenants that it will maintain and only use,
an electronic communications interface which complies with the
technical parameters and/or standards specified by DIRECTV;
provided, however, other methods for transmitting and
confirming orders (such as facsimile) may be used only when
the electronic communications interface is unavailable and
DIRECTV provides Company advance written notice that Company
may use such methods. Company agrees to pay those additional
costs incurred by DIRECTV that are directly related to the use
of such other method, if use of such other method is the
result of action or inaction by Company, or is associated with
a problem or deficiency in Company's equipment.
(3) After receiving an authorization request message from
Company's automated account set-up system, DIRECTV shall, upon
acceptance of such request, establish a pending account for
the subscriber, arrange for the necessary authorization
messages to the subscriber upon activation, and be responsible
for all billing/statement activities related to the
subscriber.
(4) If Company transmits to DIRECTV any orders for DIRECTV
Programming Packages through the communications interface of
another DIRECTV agent or representative, then all Fees paid by
DIRECTV for such order and any subsequent orders from such
customer will be paid to such other DIRECTV agent or
representative. The terms and conditions of any fees which
Company may receive for such orders shall be negotiated solely
between Company and such other DIRECTV agent or
representative. If at any time during the term of this
Agreement Company transmits all or substantially all orders
which Company takes for DIRECTV Programming Packages through
the communications interface of another DIRECTV agent or
representative, then DIRECTV may terminate this Agreement upon
"*" days' written notice to Company.
J. TERMINATION.
(1) Either party may terminate this Agreement, effective
immediately upon "*" days written notice to the other party
following a material breach of this Agreement by the other
party, unless such material breach is cured within such
period. In addition, either party may terminate this
Agreement, upon written notice, if the other party becomes
insolvent or institutes or permits to be instituted against it
any proceedings seeking receivership, trusteeship, bankruptcy,
reorganization, assignment for the benefit of creditors, or
other proceedings under Title 11 of the United States Code or
as provided by
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any other insolvency law, state or federal. The termination of
this Agreement shall not affect DIRECTV's obligations to pay
Fees to Company earned and accrued for orders taken prior to
such termination pursuant to the provisions hereinabove. The
termination of this Agreement shall not affect either party's
obligations described in Sections M, N and P below.
(2) Company agrees that if this Agreement terminates for any
reason, then Company shall:
(a) immediately discontinue all sales of DIRECTV
Programming Packages, and immediately cease to
represent and/or imply to any person or entity that
Company is an authorized agent for DIRECTV services;
(b) immediately discontinue all use of any trademark or
tradename associated in any way whatsoever with the
DIRECTV Programming Packages, including, without
limitation DIRECTV, DSS, all marks or names
associated with any programming included in the
DIRECTV Programming Packages or in any service or
product offered by DIRECTV and such other marks or
names which DIRECTV may from time to time notify
Company, and confusingly similar or conflicting
trademarks, service marks, trade names and all other
indicia of origin upon receipt of notice of such
designation (together, "Marks"), other than Marks
which Company has the independent right to use
without the consent of DIRECTV;
(c) deliver to DIRECTV, or destroy, at DIRECTV's option
and cost (but not including cost of merchandise
delivered or destroyed), all tangible things of every
kind in Company's possession or control that bear any
of the Marks, other than Marks which Company has the
independent right to use without the consent of
DIRECTV; and
(d) upon request by DIRECTV, certify in writing to
DIRECTV that such delivery or destruction has taken
place.
K. POLICIES AND PROCEDURES. DIRECTV may, from time to time in its sole
discretion, provide to Company those Policies and Procedures developed
by DIRECTV for its commissioned sales agents, and Company agrees that
it will follow and abide by the policies and procedures related to
taking orders for and the promotion of DIRECTV Programming Packages as
specified from time to time in such Policies and Procedures (subject to
the provisions of this Section). DIRECTV may incorporate such Policies
and Procedures as they apply to Company into this Agreement, by
notifying Company at least thirty (30) days in advance of the date on
which such Policies and Procedures are to become effective subject to,
only in the case of an item which materially and adversely affects
Company, Company's written consent (which shall not be unreasonably
withheld). If Company fails to provide DIRECTV written notice of either
such consent or refusal to give such consent within twenty (20) days
after receiving such notice, Company shall be deemed to have consented.
If Company provides a written notice reasonably withholding such
consent, then DIRECTV may elect, in its sole discretion, either (i) to
continue the relationship as subject to this Agreement without
incorporating the proposed Policies and Procedures or (ii) to
immediately terminate this Agreement with no further obligation to
Company. Any material noncompliance by Company with those Policies and
Procedures to which Company has consented (or to which Company is
deemed to have consented), which Company does not cure to DIRECTV's
satisfaction within thirty (30) days after DIRECTV provides Company a
written notice of such material noncompliance, shall be a material
default of this Agreement.
L. INSURANCE. Any and all insurance and/or bonds that may be required
under the laws, ordinances and regulations of any governmental
authority with respect to Company's sale or solicitation of orders for
DIRECTV Programming Packages including, but not limited to, workers'
compensation insurance, are and shall be the sole responsibilities of
Company. Without limiting in any way Company's indemnification
obligations under this Agreement, Company shall maintain, at its
expense, workers' compensation insurance as required by applicable laws
or employer's liability insurance with limits of not less than
$1,000,000 per occurrence and automobile liability insurance covering
owned and non-owned automobiles with limits of not less than $1,000,000
combined single limit per occurrence. Company shall also maintain
commercial general liability insurance, including contractual liability
and personal injury liability (with "employee" and "contractual"
exclusions deleted) with limits of not less than $1,000,000 combined
single limit per occurrence and excess liability insurance (umbrella
form) with limits not less than $5,000,000 per occurrence, to provide
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protection against claims and/or liabilities including, but not limited
to, claims for bodily injury or property damage which may arise or
result from this Agreement, whether the services are performed by
Company or any of its subcontractors or by an agent and/or by anyone
directly or indirectly employed by either Company or any such
subcontractor or agent. Simultaneous with the execution of this
Agreement, Company shall deposit with DIRECTV evidence of the required
insurance protection in the form of certificates of insurance for the
insurance coverage described above. The amounts shall not be less than
the amounts specified above, or such other amounts as specified in
advance in writing by DIRECTV's Insurance Office. These certificates
must include DIRECTV as an additional named insured. All certificates
shall provide that the insurer give thirty (30) days written notice to
DIRECTV prior to the effective date of expiration, any material change
or cancellation.
M. INDEMNIFICATION. Each party shall indemnify the other, its affiliates
and their respective employees, officers, and directors from and
against any and all claims, damages, costs, expenses and other
liabilities (including attorneys' fees and other costs of investigation
and defense) caused by or arising out of, directly or indirectly, a
breach or alleged breach of the indemnifying party's representations,
warranties, covenants or obligations under this Agreement. DIRECTV's
obligation to indemnify Company with respect to the content of any
programming (including without limitation claims relating to trademark,
copyright, music, music performance and other proprietary interests) is
expressly limited to the extent of any applicable pass-through
indemnification provided to DIRECTV pursuant to its then-existing
agreements with the providers of such programming. COMPANY EXPRESSLY
WAIVES ANY RIGHT TO INDEMNIFICATION ARISING OUT OF THE CONSTRUCTION,
USE AND/OR OPERATION OF DIRECTV'S SATELLITE(S) AND RELATED SYSTEMS.
COMPANY FURTHER AGREES TO INDEMNIFY AND HOLD HARMLESS DIRECTV, ITS
AFFILIATES AND ITS OFFICERS, DIRECTORS, SHAREHOLDERS, AGENTS AND
EMPLOYEES, AND THEIR RESPECTIVE SUCCESSORS, LEGAL REPRESENTATIVES,
HEIRS AND ASSIGNS, FROM ANY AND ALL CLAIMS OF ANY OF COMPANY'S
EMPLOYEES OR AGENTS FOR COMPENSATION AND/OR DAMAGES ARISING OUT OF THE
TERMINATION OR NON-RENEWAL OF THIS AGREEMENT OR OF COMPANY'S ABILITY TO
TAKE ORDERS FOR DIRECTV PROGRAMMING PACKAGES.
N. LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OF THE OTHER PARTY
OR ANY THIRD PARTY, WHETHER FORSEEABLE OR NOT AND REGARDLESS OF THE
FORM, LEGAL THEORY OR BASIS OF RECOVERY OF ANY SUCH CLAIM.
O. ARBITRATION. Any controversy, claim dispute or disagreement arising out
of, or relating to, this Agreement or any breach or alleged breach
thereof which cannot be settled amicably by the parties shall be
resolved according to binding arbitration conducted in Los Angeles,
California in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect (the "Rules");
provided, however, that the parties may seek injunctive relief in any
court of competent jurisdiction. Arbitration shall be by a single
arbitrator chosen by the parties, provided that, if the parties fail to
agree and to appoint a single arbitrator within thirty (30) calendar
days from the date a party has made a demand for arbitration, then the
arbitrator shall be chosen in accordance with the Rules. The decision
of the arbitrator shall be final and binding on the parties and any
award of the arbitrator may be entered in any court of competent
jurisdiction. Notwithstanding the foregoing, the arbitrator shall not
be authorized to award punitive damages with respect to any such
controversy, claim or dispute, nor shall any party seek punitive
damages relating to any matter arising out of, or relating to, this
Agreement in any other forum. The cost of any arbitration hereunder,
including the cost of the record or transcripts thereof, if any,
administrative fees, attorneys' fees and all other fees involved, shall
be paid by the party determined by the arbitrator to not be the
prevailing party, or otherwise allocated in an equitable manner as
determined by the arbitrator.
P. CONFIDENTIALITY. The parties agree that they and their employees have
maintained and will maintain, in confidence, the terms and provisions
of this Agreement as well as all data, summaries, reports or
information of all kinds ("Confidential Information"), whether oral
(only if the disclosing party requests in writing, at any time before
any disclosure by the other party, that such oral information be deemed
Confidential Information) or written, acquired or devised or developed
in any manner from the other party's personnel or files or from
performance of Company's obligations hereunder, including, but not
limited to, customer lists and information
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concerning customer identification, location, order and billing
information ("Customer Information"). The parties further agree that
they have not and will not reveal Confidential Information (including
Customer Information) to any third party except: (i) at the written
direction of the other party; (ii) to the extent necessary to comply
with the 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;
(iii) as part of its normal reporting or review procedure to its parent
company, its auditors and its attorneys, and such parent company,
auditors and attorneys agree to be bound by the provisions of this
Section; (iv) in order to enforce any of its rights pursuant to this
Agreement; (v) to potential investors, insurers, financing entities
and, in the case of DIRECTV, to any entity engaged in its DBS business;
provided, however, that such person described above agrees to be bound
by the provisions of this Section; or (vi) if at the time of disclosure
the Confidential Information is in the public domain through no fault
of the disclosing party. All Confidential Information, including
Customer Information and customer lists, is and shall remain the
property of DIRECTV. Either or both parties intend to issue independent
press releases upon execution of this Agreement. During the term of
this Agreement, each party agrees to provide the other party with a
draft of any proposed press release relating to this Agreement or the
transaction contemplated hereby before distribution to the public for
comments thereon. The parties agree to endeavor in good faith to
promptly provide comments to the other party's press release(s).
Neither party shall issue a press release without the prior written
consent of the other party, which consent shall not be unreasonably
withheld.
Q. FORCE MAJEURE. Notwithstanding any other provision in this Agreement,
neither Company nor DIRECTV shall have any liability to the other or
any other person or entity with respect to any failure of Company or
DIRECTV to perform its obligations under the terms of this Agreement if
such failure is due to a Force Majeure. "Force Majeure" shall mean any
labor dispute; fire; flood; riot; legal enactment; government
regulation; Act of God; any problem associated with the construction,
use and/or operation of DIRECTV's satellite(s) or related systems; any
problem associated with any scrambling/descrambling equipment or any
other equipment owned or maintained by others; or any cause beyond the
reasonable control of both parties.
R. RIGHTS OF TRANSFER. Neither party shall transfer any of its rights or
obligations under this Agreement, except that either party may transfer
this Agreement in whole to a successor of all or substantially all of
its assets upon written notice to the other party, and DIRECTV may
transfer some or all of its rights and obligations under this Agreement
in connection with a public offering. Subject to the foregoing, this
Agreement shall be binding on and shall inure to the benefit of the
permitted successors and assigns of the parties.
S. NO PARTNERSHIP OR EMPLOYEE RELATIONSHIP; NO THIRD PARTY BENEFICIARIES.
It is understood and agreed that Company is an independent contractor
which takes orders for DIRECTV Programming Packages as a commissioned
sales agent. It is further understood and agreed that Company is not a
partner or employee of DIRECTV for any purpose whatsoever and Company
has no right or authority to make any representation, promise or
agreement on behalf of DIRECTV except for such representations,
promises or agreements which DIRECTV shall specifically authorize
Company, in writing, to make. Any such inconsistent or additional
warranty or representation made by Company shall constitute a breach
of, and serve as grounds for, termination of this Agreement. 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.
T. NO FRANCHISE. Company acknowledges that DIRECTV has not required
Company to pay any franchise fee or other payment as a condition of
this Agreement. Company represents and warrants to DIRECTV that Company
does not and shall not claim to be a franchisee of DIRECTV, either in
relation to this Agreement, or for any purpose, or under any statute,
law, rule or regulation.
U. REVIEW OF AGREEMENT BY COUNSEL; INTERPRETATION. By executing this
Agreement, each of the parties hereto is warranting and representing to
the other that it has had the opportunity to review this Agreement with
independent legal, financial, and tax counsel with respect to the
effect of each of the terms and conditions contained herein and has
either reviewed this Agreement with such counsel or has independently
elected not to proceed with such a review. Each of the parties further
warrants and covenants that it is satisfied with the results of such
consultation or opportunity to review and is signing this Agreement as
its free act and deed and not under any force or coercion. Each party
acknowledges and agrees that any rule of law, including but not limited
to Section 1654 of the California Civil Code, or any legal decision
that would require interpretation
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of any claimed ambiguities in this Agreement against the party that
drafted it, has no application and any such right is expressly waived.
The provisions of this Agreement shall be interpreted in a reasonable
manner to effect the intent of the parties.
V. GENERAL PROVISIONS.
(1) POWER AND AUTHORITY; NO BREACH. Each party represents and
warrants that it has full power and authority to enter into
this Agreement and to perform its obligations hereunder and
that its execution of this Agreement and performance of its
obligations hereunder does not and will not violate any
governmental statute, law, rule regulation, ordinance, code,
directive or order, or result in a breach of or default under
the terms of any contract or agreement by which it is bound.
(2) TAXES. Any taxes asserted against Company and/or DIRECTV by
any local, state, national or international entity, as a
result of or arising under Company's and/or DIRECTV's
performance of its obligations under this Agreement shall be
the responsibility of the parties as follows: (a) Company
shall be responsible for any property, employee, service,
franchise, customs, import/export duties, excise and any other
related taxes or levies arising out of and/or related to
Company's performance hereunder; and (b) each party shall be
responsible for any taxes related to its income hereunder.
(3) NOTICES. All notices and other communications from either
party to the other hereunder shall be in writing and shall be
deemed received upon actual receipt when personally delivered,
upon acknowledgment of receipt if sent by facsimile, or upon
the expiration of the third business day after being deposited
in the United States mails, postage prepaid, certified or
registered mail, addressed to the other party at a location
specified in writing by such party.
(4) SEVERABILITY. Nothing contained in this Agreement shall be
construed to require commission of any act contrary to law,
and wherever there is any conflict between any provision of
this Agreement and any law, such law shall prevail; provided,
however, that in such event, the affected provisions of this
Agreement shall be modified to the minimum extent necessary to
permit compliance with such law and all other provisions shall
continue in full force and effect.
(5) AUDIT RIGHTS. Each party shall have the right, upon reasonable
notice and at its sole cost and expense (unless a discrepancy
of 5% or greater is revealed, in which case the audited party
shall reimburse the auditing party for the auditing party's
reasonable out-of-pocket costs and expenses) to audit the
other party's books and records relating to the performance of
this Agreement and shall have reasonable access to such
party's personnel as necessary to efficiently conduct such
audit. Each party shall conduct any such audit at the other
party's place of business during reasonable business hours and
without unreasonable disruption to such party's business.
(6) GOVERNING LAW. This Agreement set forth in this letter shall
be interpreted and enforced in accordance with the laws of the
State of California, applicable to contracts made and to be
performed entirely within the State of California by residents
of the State of California (except for its conflict of laws
principles).
(8) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties, and supersedes all previous
understandings, commitments or representations concerning the
subject matter. Each party acknowledges that the other party
has not made any representations other than those that are
contained herein. This Agreement may not be amended or
modified, and none of its provisions may be waived, except by
a writing signed by an authorized officer of the party against
whom the amendment, modification or waiver is sought to be
enforced.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first above written.
Heartland Wireless Communications, Inc. DIRECTV, Inc.
By: /s/ X. X. XxXxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------- --------------------------
Name:Xxxxxxx X. XxXxxxx Name: Xxxxxxx X. Xxxxxxx
------------------------------------ ------------------------
Title:Chairman & CEO Title:Vice President, Multi-Unit Sales
----------------------------------- ---------------------------------
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EXHIBIT A
DIRECTV PROGRAMMING PACKAGES
[ATTACHED HERETO]
13
EXHIBIT B
FEE SCHEDULE
[ATTACHED HERETO]
14
EXHIBIT C
NRTC MAP
[ATTACHED HERETO]
15
EXHIBIT D
DIRECTV LOGO GUIDELINES
[ATTACHED HERETO]
