Sales Agency Agreement Dated March 10, 2002

EXHIBIT 10.1


"***" - Confidential portions of this Agreement have been omitted and
filed separately with the Securities and Exchange Commission under a
Confidential Treatment Request, pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended


SALES AGENCY AGREEMENT


THIS SALES AGENCY AGREEMENT (the "Agreement") is made effective as of March 10, 2002 (the "Effective Date"), between DIRECTV, Inc., a California corporation ("DIRECTV"), and Nucentrix Broadband Networks, Inc. f/k/a Heartland Wireless Communications, Inc., a Delaware corporation ("Nucentrix"), with reference to the following:


A. DIRECTV operates a direct broadcast satellite service ("DBS Service") through which consumers may receive video, audio and other programming using specialized satellite receiving equipment ("DIRECTV System").


B. Nucentrix, among other things, is an operator of an MMDS video services.


C. The parties are interested in developing and marketing a conversion program whereby MMDS customers of Nucentrix may convert their multi-channel video programming service to DIRECTV's programming service.


D. Nucentrix wishes to act as one of DIRECTV's commissioned sales agents for its DBS Service and to solicit its MMDS customers to order certain DIRECTV programming packages and services which are identified in EXHIBIT A attached hereto, as the same may be amended from time to time ("DIRECTV Programming Packages").


NOW, THEREFORE, the parties hereby agree as follows:


1. DEFINITIONS.


1.1 "Consumer Offers" shall mean conversion offers extended to Eligible MMDS Subscribers (as defined below) which offer consists of (a) a single room DIRECTV System with a "standard professional installation" therefor (as outlined in SCHEDULE 1) "***" when such Eligible MMDS Subscriber executes the Annual Programming Commitment Agreement attached hereto as SCHEDULE 2 (the "Single-Room Offer"); or (b) a two-room DIRECTV System bundle (i.e., two DIRECTV Receivers, two remote controls, one satellite dish and a dual LNB) with a "standard professional installation" therefor (as outlined in SCHEDULE 1) "***" when such Eligible MMDS Subscriber executes the Annual Programming Commitment Agreement (the "Two-Room Offer"). Notwithstanding the foregoing, the terms of the Consumer Offers may be amended by the mutual agreement of the parties. The Consumer Offers described herein may not be combined with any other DIRECTV consumer offers or otherwise without the prior written approval of DIRECTV, which approval may be withheld by DIRECTV in its sole discretion.


1.2 "Conversion Program" shall mean the conversion of Eligible Subscribers to DIRECTV's programming service as contemplated in this Agreement.


1.3 "Converted Subscriber" shall mean an Eligible MMDS Subscriber (a) from whom, pursuant to this Agreement, Nucentrix takes the initial Order for a DIRECTV Programming Package, and (b) who activates and commits to subscriber to a DIRECTV Programming Package.


1.4 "DIRECTV Accounting Month" shall mean the period from the 29th day of a given month (except in March, in which case it shall be the 1st day of March, except during a leap year) through the 28th day of the following month.


1.5 "Eligible MMDS Subscriber" shall mean an existing single-family residential MMDS subscriber of Nucentrix in the Territory (a) who is not or has not been a DIRECTV subscriber and (b) whose MMDS


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service account is in good standing. For purposes of determining the Eligible MMDS Subscribers in each market in the Conversion Program, Nucentrix shall compile a list of existing single family MMDS subscribers who satisfy the requirements established by the parties under Section 1.5(b) (each, a "Nucentrix Customer List"). Upon receipt of each such Customer List, DIRECTV shall determine, in its reasonable discretion and in accordance with then-current internal practice, whether a subscriber satisfies the requirement under Section 1.5(a).


1.6 "Order" shall mean an order for any DIRECTV Programming Package which (a) Nucentrix solicits and takes for any DIRECTV Programming Package from an Eligible MMDS Subscriber; and (b) Nucentrix transmits directly to DIRECTV in accordance with the terms of this Agreement, and DIRECTV accepts in its sole reasonable discretion and as provided in Section 5.1.


1.7 "Territory" shall mean the contiguous United States, excluding certain areas serviced by the National Rural Telecommunications Cooperative ("NRTC"). Attached as EXHIBIT C is a map indicating the NRTC Territories.


2. APPOINTMENT OF NUCENTRIX.


2.1 APPOINTMENT. DIRECTV hereby appoints Nucentrix as its sales agent to solicit sales of, and take orders for, the DIRECTV Programming Packages solely from Eligible MMDS Subscribers within the Territory, on the terms and conditions contained herein. Nucentrix may not solicit subscriptions for DIRECTV Programming Packages from any other individuals or entities, except as otherwise permitted under other agreements between the parties. Nucentrix may solicit sales of, and take orders only for, the DIRECTV Programming Packages identified in EXHIBIT A attached hereto, as such may be amended in accordance with this Agreement, and not any other programming packages or services DIRECTV may offer. DIRECTV may amend the list of DIRECTV Programming Packages from time to time on written notice to Nucentrix. Nucentrix hereby accepts such appointment and shall use its commercially reasonable efforts to convert Eligible MMDS Subscribers to DIRECTV's programming service and to promote and enhance DIRECTV's business, reputation and goodwill.


2.2 NO EXCLUSIVITY REQUIRED OF DIRECTV. DIRECTV may itself solicit sales of, and take orders for DIRECTV Programming Packages from consumers (including Eligible MMDS Subscribers), either directly, indirectly, or in conjunction with any third party, and may authorize parties other than Nucentrix, to act as sales agents to solicit subscriptions for DIRECTV Programming Packages, for any compensation and upon any other terms as DIRECTV may determine in its discretion. Such compensation and terms may differ from those provided Nucentrix in this Agreement. Nucentrix acknowledges that DIRECTV and such other parties may compete with Nucentrix.


2.3 LIMITED EXCLUSIVITY REQUIRED OF NUCENTRIX. During the Term of this Agreement, Nucentrix shall not, directly or indirectly, promote, advertise, market, offer or engage in a conversion program which is intended to convert single-family residential MMDS subscribers to another multi-channel video programming provider's service (the "Exclusive Obligations"). Within sixty (60) days of execution of this Agreement, the parties agree to discuss the potential conversion of multi-dwelling unit subscribers and commercial subscribers to DIRECTV's programming services. Notwithstanding the foregoing, nothing herein shall preclude or prohibit Nucentrix from entering into an agreement with the NRTC or its members/affiliates in connection with a conversion program in the territories served by the NRTC. In addition, nothing herein shall prohibit Nucentrix from assigning, selling or transferring its customer list or other assets related thereto to AOL Time Warner as long as Nucentrix does not promote, advertise, market or offer the multi-channel video programming services of AOL Time Warner.


3. NUCENTRIX'S GENERAL OBLIGATIONS.


3.1 TRAINING. DIRECTV shall provide training and training materials regarding its DBS Service to Nucentrix's training personnel, as DIRECTV reasonably deems necessary. Nucentrix shall train its own employees to the satisfaction of DIRECTV. DIRECTV may require Nucentrix's employees to attend supplementary training classes from time to time. Nucentrix shall be responsible for all expenses and compensation of its employees during such training.


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3.2 SALES PERSONNEL. Nucentrix may allow only its employees (and not any independent contractors, sub-agents or other parties) to solicit, take or deliver any orders for DIRECTV Programming Packages from Eligible MMDS Subscribers, except with DIRECTV's prior written consent, which may be withheld in DIRECTV's discretion.


3.3 STANDARD POLICIES. Nucentrix shall comply with the standard policies and procedures DIRECTV may promulgate for its sales agents in written notices, guidelines, and bulletins, as the same may be amended from time to time (collectively "Policies"). The Policies shall be an integral part of this Agreement but may not impair any of Nucentrix's rights granted herein.


3.4 STANDARD OF CONDUCT. In all of its activities as a sales agent for DIRECTV under the Conversion Program, Nucentrix shall conduct itself in a commercially reputable and ethical manner, shall comply with all applicable laws, and shall engage in no deceptive sales practice or other practice which impugns DIRECTV's commercial reputation and goodwill.


3.5 COLLECTION AND ADMINISTRATION OF ANNUAL PROGRAMMING COMMITMENT AGREEMENTS. For each and every Converted Subscriber who accepts one of the Consumer Offers, Nucentrix shall perform the following:


(a) Explain the terms and conditions of the Annual Programming Commitment Agreement required by DIRECTV as described in SCHEDULE 2 attached hereto and in other materials provided by DIRECTV from time to time;


(b) Cause the Eligible MMDS Subscriber to complete and execute the Annual Programming Commitment Agreement;


(c) Verify and validate the accuracy of the information provided by the Eligible MMDS Subscriber in the Annual Programming Commitment Agreement;


(d) Complete the dealer portion of the Annual Programming Commitment Agreement;


(e) Provide a completed and executed copy of the Annual Programming Commitment Agreement to the Eligible MMDS Subscriber;


(f) Maintain a completed and executed copy of the Annual Programming Commitment Agreement;


(g) When submitting an Order, as defined herein, for a DIRECTV Programming Package in accordance with the Order procedures, indicate and notify DIRECTV, in accordance with the procedures prescribed by DIRECTV, that a customer has executed and agreed to the Annual Programming Commitment Agreement; and


(h) Upon request by DIRECTV, provide the completed and executed copy of the Annual Programming Commitment Agreement.


3.6 BOOKS AND RECORDS. Each party shall provide the other party with accounting support and all information necessary to support subscriber requests and to verify such party's compliance with the terms of this Agreement. Each party shall maintain accurate records of all matters that relate to such party's obligations under this Agreement in accordance with generally accepted accounting principles and practices uniformly and consistently applied in a format that will permit audit. Each party shall retain such records for a period of at least three (3) years from the date of final payment. To the extent that the records may be relevant in determining whether a party is complying with its obligations hereunder, the other party and its authorized representatives shall have access to the records for inspection and audit at all reasonable times during normal business hours.


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4. RATES AND TERMS OF SERVICES.


4.1 RATES. DIRECTV may determine the content, pricing, terms, and conditions of its Programming Packages in its discretion. Nucentrix shall not represent that DIRECTV Programming Packages may be obtained on any different terms or rates, shall not impose additional or different terms and shall not offer Eligible MMDS Subscribers any discount, rebate, or other material benefits in consideration for subscribing to them, except as expressly set forth herein or otherwise authorized by DIRECTV in writing.


4.2 CHANGES. DIRECTV may change the content, pricing, terms, conditions, and availability of its Programming Packages from time to time in its discretion. DIRECTV shall notify Nucentrix of such changes as soon as practicable and shall use commercially reasonable efforts to provide Nucentrix no less than thirty (30) days prior notice (or such lesser period of time as may be available to DIRECTV) of any price and programming content changes. Nucentrix shall promptly replace point of sale materials as necessary.


4.3 MISREPRESENTATIONS. If Nucentrix misrepresents or fails to fully disclose any prices or other terms of DIRECTV Programming Packages to any customer, it shall reimburse DIRECTV any amount which DIRECTV is compelled, or in its reasonable judgment according to its standard practices decides, to pay or credit the customer in compensation for such misrepresentation. In addition, DIRECTV shall be entitled, after written notice to Nucentrix, to offset any such payment or credit by DIRECTV to customers as a result of Nucentrix's misrepresentations or omissions against any amounts owed to Nucentrix by DIRECTV.


5. ORDERS FOR SERVICE.


5.1 ORDER PROCEDURES. Nucentrix shall comply with the procedures set forth in EXHIBIT B attached hereto, as the same may be amended by DIRECTV from time to time upon written notice, regarding the receipt and delivery of orders for DIRECTV Programming Packages. All Orders shall be subject to acceptance or rejection by DIRECTV in its discretion.


5.2 NO FINANCING OR COLLECTION OF FEES. Nucentrix shall not provide financing for DIRECTV Programming Packages or collect fees for DIRECTV Programming Packages or other money due to DIRECTV from Converted Subscribers, and all such fees shall be billed directly to the Converted Subscriber by DIRECTV, unless otherwise approved in writing by DIRECTV. Failure to comply with the provisions of this Section 5.2 shall be deemed a material breach by Nucentrix that is incurable, and shall entitle DIRECTV to immediately terminate this Agreement as set forth in Section 14.2.


6. MARKETING.


6.1 MARKETING ACTIVITIES. From time to time during the Conversion Period, the parties shall cooperate in the development and implementation of marketing activities as agreed to by the parties in connection with the Conversion Program as contemplated herein. Nucentrix shall be solely responsible for the costs (other than the internal costs incurred by the parties) associated with the sales and marketing activities conducted by the parties in connection with the Conversion Program. Any and all advertising and marketing materials shall be subject to DIRECTV's prior approval. No approval shall limit Nucentrix's obligation to comply with applicable law or be deemed an endorsement of any advertising content except as it relates to DIRECTV's DBS Service.


6.2 NON-SOLICITATION. Nucentrix shall not market, advertise or otherwise promote the Conversion Program or the Consumer Offers as contemplated herein to any persons or entities other than the Eligible MMDS Subscribers.


7. CONSUMER OFFERS. During the Term of this Agreement, Nucentrix shall extend the Consumer Offers to Eligible MMDS Subscribers and shall fulfill such Consumer Offers (except for actual delivery of DIRECTV programming) in accordance with the terms thereof.


8. NUCENTRIX COMPENSATION.


8.1 PREPAID CONVERSION COMMISSION. For each Eligible MMDS Subscriber who agrees to become a Converted Subscriber and activates a DIRECTV Programming Pack ...