EXHIBIT 10.12
SIXTH AMENDMENT
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In accordance with Section 18.02 of the DBS Distribution Agreement between
▇▇▇▇▇▇ Communications Galaxy, Inc. ("HCG") and the National Rural
Telecommunications Cooperative ("NRTC"), dated April 10, 1992, as amended (the
"Agreement"), and for good and valuable consideration, receipt of which is
hereby acknowledged, the Agreement is hereby amended, effective December 23,
1992, as follows:
(1) The Agreement is hereby modified as set forth on Exhibit A hereto,
which Exhibit A sets forth certain, identified provisions of the Agreement
whereby (a) those portions which have been stricken-through are hereby deleted
from the Agreement, and (b) those portions which are highlighted and double-
underlined are hereby added to the Agreement; and
(2) All other terms and conditions of the Agreement, shall continue in
fu1l force and effect without modification.
This Sixth Amendment does not amend or alter the terms of the December 21,
1992 letter from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ to B.R. ▇▇▇▇▇▇▇▇, III, attached as Exhibit B
hereto, or the December 22, 1992 letter from B.R. ▇▇▇▇▇▇▇▇, III, to ▇▇▇▇▇ ▇.
▇▇▇▇, attached as Exhibit C hereto, which continue in full force and effect
without modification.
This Sixth Amendment may be executed in counterparts pursuant to Section
18.11 of the Agreement delivered via telecopier.
WHEREOF each of the parties hereto has duly executed and delivered this
Amendment as of the date indicated below.
▇▇▇▇▇▇ COMMUNICATIONS NATIONAL RURAL
GALAXY, INC. TELECOMMUNICATIONS
COOPERATIVE
By: /s/ By: /s/
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Date: 12-23-92 Date: 12-23-92
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Attest: Attest:
/s/ /s/
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Date: 12-23-92 Date: 12-23-92
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EXHIBIT A
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Section 1.01(b):
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(vi) Notwithstanding any other provision to the contrary, all
Committed Member Payments and any payments made for marketing and other
requirements (mentioned in Section 1.01(b)(viii), hereafter "Marketing and
Development Fee") made on or after December 23, 1992 (such Committed Member
Payments and Marketing and Development Fee are collectively "Payments")
shall be made directly to an interest-bearing escrow account ("Dec. 23rd
Escrow Account") pursuant to an escrow agreement in substantially the same
form as Exhibit 1.01(b)(v)-2 ("Dec. 23rd Escrow Agreement"). Promptly upon
receipt of such Payments, the Dec. 23rd Escrow Agent shall notify HCG and
NRTC in writing. Notwithstanding any other provision to the contrary, all
Payments will be distributed to HCG or NRTC from the Dec. 23rd Escrow
Account in accordance with the terms of the Dec. 23rd Escrow Agreement.
NRTC shall be responsible for the payment of all costs and fees required by
the Dec 23rd Escrow Agent. NRTC shall use its best efforts to amend, as
necessary, all Member Contracts executed on or before December 23, 1992 in
accordance with this Section.
(vii) The Member Contract shall provide the Committed Member with the
option, with respect to Member Contracts executed after December 11, 1992,
to either (xx) pay the full Committed Member Payment to HCG through
December 23rd Escrow Account upon execution of the Member Contract, or (yy)
pay 50% of the Committed Member Payment to HCG through December 23rd Escrow
Account upon execution of the Member Contract, and commit to pay to HCG
through December 23rd Escrow Account upon Acceptance, the remaining 50% of
such Committed Member Payment (the "Second Payment") as well as commit to
pay interest on such Section Payment, at the rate set forth in Section
18.01, from the date of the Member Contract until the date of Acceptance,
as set forth in Section 4.04. In all cases as provided above, any and all
such payments to December 23rd Escrow Account (and any applicable interest
thereon) shall be promptly paid to HCG. If any Second Payment (plus
interest) is not timely paid to December 23rd Escrow Account (by the
Committed Member) or to HCG (by December 23rd Escrow Account), then the
provisions of Section 3.10 shall apply. In addition, if any Second Payment
is not timely made by a Committed Member (or by NRTC as provided in Section
3.10(b)) and the fifteen (15) day cure period has expired
without a cure, then (A) HCG shall have the right and option to require
NRTC to (and NRTC shall) terminate the Member Contract, and if the Member
Contract is so terminated, the Committed Member shall have no further
rights thereunder, and (B) regardless of whether the Member Contract is so
terminated and, in addition to having the right to collect the full amount
of the Second Payment (less any amounts reasonably mitigated by HCG under
California Uniform Commercial Code) and Expenses associated therewith, HCG
shall be entitled to retain (as liquidated damages) the 50% of the
Committed Member Payment already paid to HCG, and unless and until the
provisions of Exhibit 19 apply, NRTC shall have no rights whatsoever to
market and sell the DBS Distribution Services to the Committed Member
Residences associated with such Committed Member.
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(xvi) The Member Contract shall be executed by the Committed
Member and NRTC; and HCG shall be an intended third-party beneficiary
thereto. An original copy of each such executed Member Contract shall be
provided to HCG concurrently with delivery to HCG, or the deposit of such
monies into the Escrow Account, or the Dec. 23rd Escrow Account, as
appropriate, of the Committed Member Payment. In addition, in cases where
the RSA Residences Option and/or the MSA Residences Option is exercised,
the executed Member Contract shall be accompanied by a list (in electronic
media form (based on industry standard and compatible with the requirements
of the HCG billing system and the CAMC databases)) of all Committed Member
Residences, as set forth above in Section 1.01(b) (ix). HCG shall not be
obligated in any way to provide any DBS Distribution Services to a Member
or its NRTC Subscribers until and unless the full Committed Member Payment
(including the Second Payment owed by such Committed Member), the
electronic media list described above, and an executed Member Contract are
received by HCG.
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Section 1.01:
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(c) Member Administration. NRTC shall administer the Member
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Contracts as follows: NRTC shall (1) use its reasonable best efforts to collect
any and all monies owed by Committed Members under the Member Contracts and
shall deposit such monies with the Escrow Agent or Dec. 23rd Escrow Agent (as
appropriate) or pay to HCG the payments contemplated by Section 1.01(b); and (2)
provide all accounting services relative to such collection process. NRTC shall
keep records with respect to such accounting.
Section 1.03:
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(d) NRTC may make payments to HCG, the Escrow Agent (if still
applicable) or the Dec. 23rd Escrow Agent for HCG's benefit to meet the $250
million target, as appropriate and as specified in this Section 1.03 in excess
of aggregate Committed Member Payments actually paid or owed to HCG as Second
Payments, where applicable, by Committed Members and any and all such amounts
shall be deemed part of the Committed Member Payments for all purposes of this
Agreement.
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Section 11.02:
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(e) Upon the occurrence of any NRTC Event of Default (as defined
below) and only after written notice from HCG to NRTC followed by the expiration
of any relevant cure period, HCG may, for so long as such NRTC Event of Default
shall continue, declare this Agreement to be in default provided, however, that
this Agreement shall be deemed to be in default immediately upon the occurrence
and during the continuation of any NRTC Event of Default under Section 11.02(e)
(iv)). At any time thereafter, HCG may, in its sole and absolute discretion,
declare immediately due and payable all Committed Member Payments (whether in
the Escrow Account, Dec. 23rd Escrow Account, committed as Second Payments, or
otherwise) the TT&C Fee and the Ground Services Fee for the expected life of the
Satellite, based on the actual number of NRTC Subscribers as of such Event of
Default (but in no event fewer than 100,000 NRTC Subscribers), cancel this
Agreement as to NRTC, obtain damages without cancelling this Agreement, and
exercise any other right or remedy that is provided for in this Agreement or
that may be available under the California Uniform Commercial Code or other
applicable Law. A cancellation hereunder shall occur only upon written notice
from HCG to NRTC within (30) days following the NRTC Event of Default stating
that such cancellation is made. In the event of such cancellation, HCG shall
continue to provide DBS Distribution Services to Committed Members, at HCG's
sole option, either (i) pursuant to the Member Contracts (which shall have a
provision allowing HCG to assume such contracts upon NRTC's breach of this
Agreement and HCG's cancellation as to NRTC) or (ii) on substantially the same
terms or on terms no less favorable than those provided under this Agreement. In
either case, the Committed Member obligations shall be directly to HCG and not
NRTC and the member Contracts shall contain provisions to this effect. No remedy
referred to in this Section 11.02(e) is intended to be exclusive, but each
remedy shall be cumulative and in addition to any other remedy referred to above
or otherwise available to HCG at law or in equity. HCG shall mitigate its
damages should it elect to seek from NRTC the Committed Member Payments, the
TT&C Fee, and the Ground Service Fee due hereunder (as specified above) in the
event of an NRTC Event of Default as so required under the California Uniform
Commercial Code. HCG's failure in any case to exercise its rights under this
Section 11.02(e) shall not constitute a waiver of any breach or NRTC Event of
Default or a continuing waiver of similar or other breaches or NRTC Events of
Default. Each of the following events shall constitute an "NRTC Event of
Default" (whether any such event shall arise as the
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result of the voluntary or involuntary action or inaction of NRTC or come about
or be effected by operation of, or pursuant to or in compliance with, any Law).
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Section 13:
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(b) IN NO EVENT SHALL HCG BE LIABLE FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES, WHETHER FORESEEABLE OR NOT, OCCASIONED BY ANY DEFECT IN
THE DBS DISTRIBUTION SERVICES, DELAY IN PROVISION OF THE DBS DISTRIBUTION
SERVICES, FAILURE OF THE DBS DISTRIBUTION SERVICES (OR ANY COMPONENT THEREOF),
THE TRANSPONDERS OR THE SUBSCRIBER TERMINAL EQUIPMENT TO PERFORM OR ANY OTHER
CAUSE WHATSOEVER. IN NO EVENT SHALL NRTC BE LIABLE FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES, WHETHER FORESEEABLE OR NOT, IN CONNECTION WITH ANY
DAMAGES CAUSED BY NRTC, EXCEPT THAT NOTHING SHALL RELIEVE NRTC OF ITS OBLIGATION
TO PAY HCG (1) THE AGGREGATE AMOUNT OF ALL COMMITTED MEMBER PAYMENTS (WHETHER IN
THE ESCROW ACCOUNT, DECEMBER 23RD ESCROW ACCOUNT, COMMITTED AS SECOND PAYMENTS,
OR OTHERWISE) PLUS (2) THE TT&C FEE AND THE GROUND SERVICES FEE FOR THE EXPECTED
LIFE OF THE SATELLITE, BASED ON THE ACTUAL NUMBER OF NRTC SUBSCRIBERS AS OF
NRTC'S BREACH, BUT IN NO EVENT ON FEWER THAN 100,000 NRTC SUBSCRIBERS, LESS ANY
AMOUNTS REASONABLY MITIGATED BY HCG AS REQUIRED UNDER THE CALIFORNIA UNIFORM
COMMERCIAL CODE, IF NRTC BREACHES ITS OBLIGATIONS UNDER THIS AGREEMENT. HCG
MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO ANY OTHER PERSON OR ENTITY CONCERNING
THE DBS DISTRIBUTION SERVICES AND NRTC SHALL DEFEND AND INDEMNIFY HCG FROM ANY
CLAIMS MADE UNDER ANY WARRANTY OR REPRESENTATION BY NRTC TO ANY THIRD PARTY.
NRTC MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO ANY OTHER PERSON OR ENTITY
CONCERNING NRTC'S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT, AND HCG
SHALL DEFEND AND INDEMNIFY NRTC FROM ANY CLAIMS MADE UNDER ANY WARRANTY OR
REPRESENTATION BY HCG TO ANY THIRD PARTY. THE LIMITATIONS OF LIABILITY SET FORTH
HEREIN SHALL ALSO APPLY TO HAC (THE MANUFACTURER OF THE SATELLITE AND THE
TRANSPONDERS) AND ALL AFFILIATES THEREOF.
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