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EXHIBIT 10.1
SALES AGENCY AGREEMENT
THIS SALES AGENCY AGREEMENT (the "Agreement") is made
effective as of 2/07/01 ("Effective Date") between DIRECTV, Inc., a California
corporation ("DIRECTV"), and Nucentrix Broadband Networks, Inc. f/k/a Heartland
Wireless Communications, Inc., a Delaware corporation ("Sales Agent"), 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. Pursuant to that certain Agreement dated as of April 5,
1998, as amended from time to time (the "Previous Agreement"), by and between
DIRECTV and Sales Agent, Sales Agent became and continues to act as one of
DIRECTV's commissioned sales agents for its DBS Service and to solicit consumers
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").
C. The parties desire to terminate the Previous Agreement and
execute this Agreement, pursuant to which Sales Agent will continue to act as a
commissioned sales agent of DIRECTV.
NOW, THEREFORE, the parties hereby agree as follows:
1. APPOINTMENT OF SALES AGENT.
1.1 TERMINATION OF THE PREVIOUS AGREEMENT. The parties hereby
agree to terminate the Previous Agreement as of the Effective Date of this
Agreement. Notwithstanding anything to the contrary contained herein, the
parties agree and acknowledge that certain rights and obligations under the
Previous Agreement, which by their terms, extend beyond such termination, shall
survive such termination, including, without limitation, (a) payment by DIRECTV
of Prepaid Programming Commissions for Approved Activations in connection with
DIRECTV System units purchased by Sales Agent prior to the Effective Date of
this Agreement; (b) right by DIRECTV to chargeback Sales Agent for any Prepaid
Programming Commissions paid under the terms of the Previous Agreement; (c)
payment by DIRECTV of Continuing Service Fees for Qualifying Subscribers
procured by Sales Agent under the terms of the Previous Agreement; (d) payment
by DIRECTV of the Subsidy (as defined in the Previous Agreement) in accordance
with the terms of the Previous Agreement and (e) the obligations under Section
E(3) of the Previous Agreement, provided that the obligations thereunder to
repay the difference between the Aggregate Minimum Gross Revenues and the actual
gross revenues, if any, shall not accrue until (i) April 4, 2003 or (ii) the
termination of this Agreement by DIRECTV for a material breach by Sales Agent,
whichever is earlier.
1.2 APPOINTMENT. DIRECTV hereby appoints Sales Agent as its
sales agent to solicit subscriptions for the DIRECTV Programming Packages
("Subscriptions"), on the terms and conditions contained herein. Sales Agent may
solicit Subscriptions only from single family residential households in the
contiguous United States. Sales Agent may solicit Subscriptions only for the
DIRECTV Programming Packages identified in Exhibit A attached hereto, 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
Sales Agent. Sales Agent hereby accepts such appointment and shall use its
commercially reasonable efforts to solicit Subscriptions and to promote and
enhance DIRECTV's business, reputation and goodwill. Notwithstanding the
foregoing, the parties acknowledge the existence of a Cooperative Marketing
Agreement between DIRECTV and Sales Agent, whereby Sales Agent became a "System
Operator" of DIRECTV in connection with certain types of multi-dwelling units.
1.3 NO EXCLUSIVITY REQUIRED OF DIRECTV. DIRECTV may itself
solicit Subscriptions from consumers, either directly, indirectly, or in
conjunction with any third party, and may authorize parties other than Sales
Agent to act as sales agents to solicit Subscriptions, for any compensation and
upon any other
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terms as DIRECTV may determine in its discretion. Such compensation and terms
may differ from those provided Sales Agent in this Agreement. Sales Agent
acknowledges that DIRECTV and such other parties may compete with Sales Agent in
the solicitation of Subscriptions.
1.4 LIMITED EXCLUSIVITY REQUIRED OF SALES AGENT. During the
term of this Agreement, Sales Agent shall not, and shall ensure that its
affiliates (i.e., any subsidiary of which Sales Agent owns greater than 50% of
the outstanding voting stock) shall not directly or indirectly, market, sell or
solicit sales of, or take orders for, or distribute (a) any direct broadcast
satellite service programming packages or other related services to residential
households in the United States, other than DIRECTV Programming Package or (b)
any equipment used for, or associated with, any direct broadcast satellite
service, other than the DIRECTV Programming Packages or equipment associated
therewith, or any such services or associated equipment provided by an affiliate
of DIRECTV (collectively, the "Exclusivity Commitment"). Company understands and
agrees that a breach of Company's Exclusivity Commitment shall be a material
breach of this Agreement, and DIRECTV may terminate this Agreement immediately
upon written notice to Sales Agent.
2. SALES AGENT'S GENERAL OBLIGATIONS.
2.1 STOREFRONT LOCATION. Throughout the term of the Agreement,
at least one of Sales Agent's locations must be a storefront location, unless
otherwise agreed by DIRECTV in writing.
2.2 RETAIL DISPLAYS. Sales Agent shall prominently display, in
a high traffic area at each of its locations and in a manner reasonably directed
by DIRECTV, point of sale materials provided or approved by DIRECTV and a
demonstration DIRECTV System unit which provides a live feed of DIRECTV
programming on a monitor of no less than 17 inches, unless otherwise agreed in
writing by DIRECTV. Sales Agent shall keep such DIRECTV System turned on and
tuned to such channels as DIRECTV may designate during normal business hours.
2.3 TRAINING. DIRECTV shall provide training and training
materials regarding its DBS Service to Sales Agent's training personnel, as
DIRECTV reasonably deems necessary. Sales Agent shall train its own employees to
the satisfaction of DIRECTV. DIRECTV may require Sales Agent's employees to
attend supplementary training classes from time to time. DIRECTV shall not be
responsible for any expenses and compensation of Sales Agent's employees during
such training.
2.4 SALES PERSONNEL. Sales Agent may allow only its employees
(and not any other independent contractors, sub-agents or other parties) to
solicit, take or deliver any orders for DIRECTV Programming Packages except with
DIRECTV's prior written consent, which may be withheld in DIRECTV's discretion.
2.5 ADVERTISING.
(a) Sales Agent agrees to use its commercially
reasonable efforts to market DIRECTV Programming Packages and services and shall
spend an average of thirty dollars ($30.00) per "Qualifying Subscriber" (as
defined below) in connection with such advertising efforts.
(b) DIRECTV agrees to assist Sales Agent 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, Sales Agent must obtain DIRECTV's prior
approval for the applicable advertising programs and the spending therefor (the
"Approved Programs"). For every dollar spent by Sales Agent in connection with
the Approved Programs of the DIRECTV Programming Packages in accordance with
this Agreement, DIRECTV will pay Sales Agent the Advertising Co-Op Fund in an
amount up to fifteen dollars ($15.00) per Qualifying Subscriber. Sales Agent
shall provide documentation as reasonably requested by DIRECTV which verifies
the advertising costs incurred by Sales Agent for the Approved Programs. Sales
Agent 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 sixty-five (65) days of verification of Sales Agent's
actual advertising spending in accordance with this Section.
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2.6 BENCHMARKS. Sales Agent agrees that it will procure,
activate and retain seven thousand five hundred (7,500) new Qualifying
Subscribers for each calendar year during the term of this Agreement (the
"Minimum Benchmark"); provided, however, that the parties agree that any
"Qualifying Subscribers" procured by Sales Agent under the Previous Agreement
during 2001 shall be included for determining whether Sales Agent met the
Minimum Benchmark hereunder for calendar year 2001. The failure to achieve such
Minimum Benchmark during any calendar year shall result in a reduction in the
Continuing Service Fees as described in Exhibit D.
2.7 STANDARD POLICIES. DIRECTV may, from time to time in its
sole discretion, provide to Sales Agent those Policies and Procedures developed
by DIRECTV for its commissioned sales agents, and Sales Agent 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 Sales Agent 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 Sales Agent, Sales Agent's written consent (which shall not be
unreasonably withheld). If Sales Agent fails to provide DIRECTV written notice
of either such consent or refusal to give such consent within twenty (20) days
after receiving such notice, Sales Agent shall be deemed to have consented. If
Sales Agent provides a written notice reasonably withholding such consent, then
DIRECTV may elect, in its sole discretion, either (a) to continue the
relationship as subject to this Agreement without incorporating the proposed
Policies and Procedures or (b) to immediately terminate this Agreement with no
further obligation to Sales Agent. Any material noncompliance by Sales Agent
with those Policies and Procedures to which Sales Agent consented (or to which
Sales Agent is deemed to have consented), which Sales Agent does not cure to
DIRECTV's satisfaction within thirty (30) days after DIRECTV provides Sales
Agent a written notice of such material noncompliance, shall be a material
default of this Agreement.
2.8 STANDARD OF CONDUCT. In all of its activities as a sales
agent for DIRECTV and in its own DIRECTV System business, Sales Agent 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.
2.9 NO TYING. In no event may Sales Agent condition the sale
of a DIRECTV Programming Package upon the customer's acquisition of any other
product or service (other than approved DIRECTV System), except as approved by
DIRECTV in writing.
2.10 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.
3. SALES AGENT'S DIRECTV SYSTEM BUSINESS.
3.1 SALES AGENT'S OWN ACCOUNT. Sales Agent shall conduct all
of its DIRECTV System sale, lease, installation, warranty, maintenance, and
repair business ("DIRECTV System Business") for its own account and not as an
agent for DIRECTV. At the request of DIRECTV, Sales Agent shall display notices
to its customers, in such form, places and manner as DIRECTV may reasonably
require, of such fact and that Sales Agent and not DIRECTV shall be responsible
for all of Sales Agent's actions in this regard. DIRECTV disclaims any control
over Sales Agent's DIRECTV System Business except to the limited extent
expressly provided herein to support and protect its activities as a sales agent
for DIRECTV's DBS Service.
3.2 APPROVED EQUIPMENT. All DIRECTV System offered by Sales
Agent for use with DIRECTV's DBS Service must be compatible with such Service
and manufactured by a supplier approved by
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DIRECTV. DIRECTV shall notify Sales Agent of such approved DIRECTV System and
suppliers. Sales Agent may take orders for DIRECTV Programming Packages
hereunder only from customers to whom it sells or leases DIRECTV System.
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. Sales Agent 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 customers any discount, rebate, or other material benefits in
consideration for subscribing to them, except as expressly authorized by DIRECTV
in writing. Notwithstanding anything to the contrary contained herein, at all
times during the term of this Agreement, DIRECTV Programming Packages shall
include DIRECTVs "Most Widely Distributed Package." For purposes of this
Agreement, the term "Most Widely Distributed Package" shall mean that DIRECTV
programming package that is most widely subscribed to by subscribers of DIRECTV
programming. DIRECTV shall use its commercially reasonable efforts to provide
Sales Agent no less than sixty (60) days prior notice (or such lesser period of
time as may be available to DIRECTV) of any price and programming content
changes.
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 Sales Agent of such changes as soon as
practicable. Sales Agent shall promptly replace point of sale materials as
necessary.
4.3 MISREPRESENTATIONS. If Sales Agent 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 30-day notice to Sales Agent,
to offset any such payment or credit by DIRECTV to customers as a result of
Sales Agent's misrepresentations or omissions against any amounts owed to Sales
Agent by DIRECTV.
5. ORDERS FOR SERVICE.
5.1 ORDER PROCEDURES. Sales Agent 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 ("Orders"). All Orders
shall be subject to acceptance or rejection by DIRECTV in its reasonable
discretion.
5.2 NO FINANCING OR COLLECTION OF FEES. Sales Agent shall not
provide financing for Subscriptions or collect Subscription fees or other money
due to DIRECTV from DIRECTV subscribers ("Subscribers"), and all Subscription
fees shall be billed directly to the 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 Sales Agent.
6. SALES AGENT COMPENSATION.
6.1 PREPAID PROGRAMMING COMMISSIONS. In consideration of Sales
Agent's services in procuring Orders for DIRECTV Programming Packages, DIRECTV
shall pay Sales Agent commissions ("Prepaid Programming Commissions") in the
amounts and on the terms and conditions set forth in the Commission Schedule
attached hereto as Exhibit C, subject to later chargeback on the terms described
in Section 6.6, upon both of the following events (collectively an "Approved
Activation"):
(a) DIRECTV's receipt of an Order for a DIRECTV
Programming Package which is initially procured by Sales Agent and delivered to
DIRECTV in accordance with DIRECTV's order procedures as set forth in Exhibit B;
and
(b) DIRECTV's acceptance of such Order as an Approved
Activation, as evidenced by the attachment of Sales Agent's unique agent number
to the corresponding customer account.
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6.2 CONTINUING SERVICE FEES. In consideration of Sales Agent's
continuing support of promotion and advertising designed to acquire new
Subscribers, as well as Sales Agent's continuing service to Subscribers from
whom it procures Approved Activations for which a Prepaid Programming Commission
is payable hereunder ("Qualifying Subscribers"), DIRECTV shall pay Sales Agent
fees ("Continuing Service Fees") based upon certain payments received by DIRECTV
from such Qualifying Subscribers, in the amounts and upon the terms and
conditions set forth in the Continuing Service Fee Schedule attached hereto as
Exhibit D. Sales Agent acknowledges that Continuing Service Fees are not
deferred commissions or otherwise paid for Sales Agent's procurement of Approved
Activations or Subscribers, but instead are paid for Sales Agent's continuing
support of future Subscriber acquisition efforts and Sales Agent's continuing
services to Qualifying Subscribers after the initial Order. 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 Subscription:
(a) the termination of the Subscription for any
reason; or
(b) the disconnection of the Subscription for any
reason, for any period of thirty (30) days or more; or
(c) the termination of this Agreement for any reason;
or
(d) 5 years after the Approved Activation of the
Subscription.
6.3 EXCEPTIONS. As used herein, Prepaid Programming
Commissions and Continuing Service Fees shall be referred to collectively as
"Compensation". Sales Agent acknowledges that Sales Agent'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 residential household which, prior to the date on which Sales Agent receives
the applicable Order, received any programming services (whether television or
computer-delivered) from DIRECTV (including, without limitation, any residential
household which purchases a second set of DIRECTV System from Sales Agent);
(ii) any Subscription canceled prior to the
commencement of service;
(iii) Orders made by a Subscriber to Sales
Agent prior to the Effective Date of this Agreement, unless otherwise expressly
provided herein;
(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 13.1.
(c) Sales Agent acknowledges that prior hereto
DIRECTV has granted the National Rural Telecommunications Cooperative ("NRTC")
exclusive marketing rights for its DBS Service, in certain territories ("NRTC
Territories"). Accordingly, DIRECTV shall not be required to pay Compensation to
Sales Agent for DIRECTV Programming Packages sold to residential households in
NRTC Territories unless the NRTC reimburses DIRECTV for such payments and then
only in the amounts and for the duration of such reimbursement. Attached as
Exhibit E is a map indicating the NRTC Territories. DIRECTV shall notify Sales
Agent of those NRTC Territories for which Compensation may be payable to Sales
Agent.
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6.4 SUPERSEDES COMMISSIONS UNDER PRIOR AGREEMENT. With respect
to orders submitted by Sales Agent prior to the date of this Agreement pursuant
to a valid agreement with DIRECTV and which DIRECTV accepted and attached to
Sales Agent's unique agent number, all Continuing Service Fees shall be
determined, effective as of the date of this Agreement, solely by the terms of
this Agreement (and not the terms of any such prior agreement). Sales Agent
acknowledges and agrees that the payments and terms for Continuing Service Fees
may be different with respect to such orders than those provided under any such
prior agreement.
6.5 PAYMENT TERMS. DIRECTV shall pay Sales Agent Prepaid
Programming Commissions within sixty-five (65) days after the end of the
accounting month, as determined by DIRECTV, in which the applicable Approved
Activation occurs. DIRECTV shall pay Sales Agent Continuing Service Fees within
sixty-five (65) days after the end of the accounting month, as determined by
DIRECTV, in which DIRECTV receives the applicable payment from a Qualifying
Subscriber. In no event shall DIRECTV be required to pay Compensation until such
time as accrued unpaid amounts total at least $50.
6.6 CHARGEBACKS.
(a) All Prepaid Programming Commissions are based
upon a full uninterrupted purchase of the DIRECTV Programming Package purchased
by the Subscriber for the term prescribed by DIRECTV as set forth in Exhibit C
(the "Commissionable Term"). If the Subscriber terminates, cancels, or
disconnects (whether initiated by Subscriber or DIRECTV) his/her DIRECTV
Programming Package prior to the end of the Commissionable Term, or the
Subscriber fails to pay DIRECTV for the entire uninterrupted Commissionable Term
of a DIRECTV Programming Package for which Sales Agent was paid a Prepaid
Programming Commission, then DIRECTV may chargeback to Sales Agent the portion
of the Prepaid Programming Commission corresponding to the unpaid portion of
such Commissionable Term. For example: if DIRECTV pays $50.00 to Sales Agent as
a Prepaid Programming Commission requiring a Commissionable Term of one year for
a DIRECTV Programming Package Subscription, and the Subscriber pays DIRECTV only
for the first 9 months of such package, then DIRECTV may chargeback to Sales
Agent 25% of the Prepaid Programming Commission, or $12.50.
(b) If Sales Agent receives any other Prepaid
Programming Commission or any Continuing Service Fee to which it is not entitled
hereunder, DIRECTV may chargeback such amount from sums otherwise owing to Sales
Agent.
6.7 CHANGES. Sales Agent acknowledges that the market for DBS
Services is competitive and unpredictable and that DIRECTV may need to adapt its
marketing cost structure to changing conditions from time to time. Accordingly,
DIRECTV may change the Commission Schedule (including the Prepaid Programming
Commissions and Continuing Service Fees) at any time, and from time to time, in
its discretion; provided that:
(a) DIRECTV shall give Sales Agent at least
forty-five (45) days prior written notice of the effective date of any such
change;
(b) a change in Prepaid Programming Commissions shall
be effective only with respect to Orders transmitted to DIRECTV after the
effective date of the change;
(c) a change in Continuing Service Fees shall be
effective only with respect to Subscriber payments received by DIRECTV after the
effective date of the change (whether such payments are for Orders previously
accepted by DIRECTV or for Orders accepted after the change);
(d) Sales Agent may terminate this Agreement by
written notice to DIRECTV, delivered no later than 45 days after receipt of the
change notice; and
(e) Except as provided in Exhibit D with respect to a
reduction in Continuing Service Fees if Sales Agent fails to meet certain
subscriber benchmarks, prior to April 5, 2003, the total economic value to Sales
Agent of Compensation payable hereunder shall not be reduced to a value less
than the total economic value to Sales Agent of the Activation Fee (as defined
in the Previous Agreement), Continuing Service Fee (as defined in the Previous
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Agreement) and Subsidy (as defined in the Previous Agreement) payable to Sales
Agent under the Previous Agreement.
6.8 SHARING COMPENSATION PROHIBITED. Sales Agent 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). Sales Agent
may not combine sales of DIRECTV Programming Packages with another agent. Sales
Agent 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 Sales Agent for purposes of calculating Compensation.
6.9 SET-OFFS BY DIRECTV. DIRECTV may set-off or recoup any
amounts owed to it by Sales Agent, pursuant to Section 6 of this Agreement. The
foregoing does not limit DIRECTV's right to recover any unrecouped balance.
7. CONFIDENTIAL INFORMATION. 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 Sales Agent's obligations hereunder,
including, but not limited to, customer lists and information 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: (a) at the written direction of the other party; (b) 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; (c) 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; (d) in order to enforce any of its rights
pursuant to this Agreement; (e) 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 (f) 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.
8. 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 Sales Agent'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 Sales Agent. Without limiting in any way
Sales Agent's indemnification obligations under this Agreement, Sales Agent
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. Sales Agent 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 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 Sales Agent
or any of its subcontractors or by an agent and/or by anyone directly or
indirectly employed by either Sales Agent or any such subcontractor or agent.
Simultaneous with the execution of this Agreement, Sales Agent 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
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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..
9. INTELLECTUAL PROPERTY. DIRECTV shall provide Sales Agent 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").
Sales Agent may use the Marks only in accordance with the provisions of this
Agreement and the Usage Manual. Sales Agent 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. Sales Agent 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.
10. ASSIGNMENT.
10.1 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.
10.2 ASSIGNMENT BY SALES AGENT. This Agreement is made by
DIRECTV in reliance on the financial, business and personal reputation of Sales
Agent and its ownership and management. Accordingly, this Agreement may not be
assigned or encumbered by Sales Agent without DIRECTV's prior written consent,
which will not be unreasonably withheld in the event this Agreement is
transferred in connection with the sale of all or substantially all of Sales
Agent's business to an entity meeting DIRECTV's standards for sales agents. The
transfer of 50% or more of Sales Agent's ownership rights shall be deemed an
assignment of this Agreement, and any purported assignment or encumbrance
without such consent shall be void. Without limiting the generality of the
foregoing, it will be reasonable for DIRECTV to require as a condition of
assignment, among other things, that:
(a) Sales Agent transfer to the assignee the
necessary assets to enable it to perform hereunder;
(b) the assignee demonstrate that it has skills,
qualifications and economic resources which are necessary, in DIRECTV's
reasonable judgment, to conduct the business contemplated by this Agreement, and
that it and its principal owners are of good moral character and reputation in
the community;
(c) as of the date of such assignment Sales Agent
will have complied with all of its material obligations to DIRECTV; and
(d) Sales Agent execute a release of all claims
against DIRECTV arising in connection with this Agreement.
11. TERM.
11.1 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 five (5) years.
11.2 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.
12. TERMINATION. In addition any other rights provided herein, this
Agreement shall be terminable upon the following conditions:
12.1 TERMINATION WITHOUT CAUSE. The parties acknowledge that
due to the relatively new and unpredictable nature of the DBS Service business,
each wishes to be able, with certainty, to terminate its commitments herein at
any time. Accordingly, either party may terminate this Agreement at any time for
any or no
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cause, reason or justification, upon at least nine (9) months' prior written
notice to the other stating its intention to terminate; provided, however, that
such notice may not be provided by DIRECTV on or before April 4, 2003. THE
PARTIES ACKNOWLEDGE AND ACCEPT THE RISK INHERENT IN THE FOREGOING PROVISION.
12.2 TERMINATION FOR BREACH. Either party may terminate this
Agreement, effective immediately upon thirty (30) 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 any other insolvency law, state or
federal. The termination of this Agreement shall not affect DIRECTV's
obligations to pay Compensation to Sales Agent earned and accrued for orders
taken prior to such termination pursuant to the provisions hereinabove.
13. RIGHTS AND OBLIGATIONS UPON TERMINATION OR CANCELLATION.
13.1 COMPENSATION. DIRECTV shall pay to Sales Agent, after the
termination hereof, (a) any unpaid Compensation which was earned by Sales Agent
prior to termination in accordance herewith, (b) Prepaid Programming Commissions
owing for Orders which Sales Agent properly delivered to DIRECTV prior to
termination, provided such Orders are accepted as Approved Activations by
DIRECTV, and (c) any Continuing Service Fees for amounts which are owing but
unpaid by Qualifying Subscribers as of termination, provided such payments are
received by DIRECTV within forty-five (45) days after termination. DIRECTV may
in its discretion withhold payment of Prepaid 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.
13.2 OBLIGATIONS OF SALES AGENT. Upon termination of this
Agreement for any reason, Sales Agent 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. On termination, Sales Agent shall
immediately discontinue all sales of DIRECTV Programming Packages and all use of
DIRECTV's Trade Secrets 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 Trade Secrets, Sales Agent agrees that for a period of two years
after termination, it shall not, on behalf of any other provider of DBS Service
or on its own behalf for DBS Service, solicit any Subscriber who was procured by
Sales Agent and is a Subscriber as of such termination date.
13.3 WAIVER OF CLAIMS. 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 FORESEEABLE OR NOT AND REGARDLESS OF THE FORM, LEGAL THEORY
OR BASIS OF RECOVERY OF ANY SUCH CLAIM.
13.4 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.
14. 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.
15. INDEPENDENT CONTRACTOR RELATIONSHIP. Sales Agent is an independent
contractor authorized during the term hereof to solicit orders for DIRECTV
Programming Packages as a commissioned sales
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agent. Sales Agent 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.
16. 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. SALES AGENT 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 SALES
AGENT'S EMPLOYEES OR AGENTS FOR COMPENSATION AND/OR DAMAGES ARISING OUT OF THE
TERMINATION OR NON-RENEWAL OF THIS AGREEMENT OR OF SALES AGENT'S ABILITY TO TAKE
ORDERS FOR DIRECTV PROGRAMMING PACKAGES.
17. 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 FORESEEABLE OR NOT AND REGARDLESS OF THE FORM, LEGAL THEORY OR
BASIS OF RECOVERY OF ANY SUCH CLAIM..
18. MISCELLANEOUS.
18.1 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.
18.2 INTEGRATION. This Agreement replaces any prior agreement,
understanding and commitment between the parties regarding Sales Agent's
appointment and performance as a commissioned sales agent for DIRECTV. Sales
Agent 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.
18.3 AUTHORIZATION; COMPLIANCE. 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.
18.4 EXPENSES. Sales Agent shall pay all of its costs and
expenses under this Agreement and shall be solely responsible for the acts and
expenses of its own agents and employees.
18.5 AMENDMENTS. Any modification of this Agreement must be in
writing and signed by both parties, except as otherwise expressly provided
herein. Sales Agent acknowledges that the Policies promulgated by DIRECTV, in
accordance with Section 2.7, as well as the modifications to order procedures
set forth in Exhibit C and any changes in Compensation in accordance with
Section 6.6, do not constitute modifications requiring Sales Agent's written
consent.
18.6 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
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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.
18.7 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.
18.8 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 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. Sales Agent shall provide a minimum of ten (10)
days advance written notice to DIRECTV in the event of any address or telephone
change, or any change in ownership (in compliance with Section 10.2).
18.9 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.
18.10 GOVERNMENTAL APPROVALS. This Agreement shall be subject
to all necessary approvals of local, state and federal regulatory agencies.
18.11 TAXES. Any taxes asserted against Sales Agent or DIRECTV
by any governmental authority as a result of this Agreement shall be the
responsibility of the parties as follows: (a) Sales Agent 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 Sales Agent the
appropriate rate and Sales Agent has forwarded such amount to DIRECTV; and (b)
each party shall be responsible for any taxes related to its income derived
hereunder.
18.12 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 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:
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(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 Trade Secrets 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 18.12
shall survive the termination or expiration of this Agreement.
18.13 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.
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18.14 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.
DIRECTV, INC.
DIRECTV Approval Stamp: /s/ Xxxxx Xxxxxx Date: 2/7/01
------------------------------- --------------------
Address: DIRECTV, Inc.
0000 Xxxx Xxxxxxxx Xxxxxxx
Xx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
NUCENTRIX BROADBAND NETWORKS, INC.
----------------------------------
(SALES AGENT'S BUSINESS NAME)
By: /s/ Xxxxx Xxxxx
-------------------------------
(signature)
Name: Xxxxx X. Xxxxx
-----------------------------
Title: Sr. Vice President
----------------------------
Location Address:
Nucentrix Broadband Networks, Inc.
-------------------------------------------------
000 Xxxxxxxx Xxxxx
-------------------------------------------------
Xxxxx, Xxxxx 00000
-------------------------------------------------
City, State, Zipcode
Mailing Address:
Nucentrix Broadband Networks, Inc.
-------------------------------------------------
000 Xxxxxxxx Xxxxx
-------------------------------------------------
Xxxxx, Xxxxx 00000
-------------------------------------------------
City, State, Zipcode
Telecopy No.: (000) 000-0000
------------------------------
Telephone No.: (000) 000-0000
-----------------------------
Federal I.D. or Social Security Number:
-------------------------
CHECK ONE:
[ ] Sole Proprietor
X Partnership
[ ] Corporation
NOTE: PLEASE ATTACH W-9 AND LIST OF SALES AGENT LOCATIONS (Exhibit A)
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