COMMERCIAL DEALER AGREEMENT

Transcription

1 COMMERCIAL DEALER AGREEMENT THIS COMMERCIAL DEALER AGREEMENT (this Agreement ) shall be deemed to be effective as of THE LATEST DATE SET FORTH ON THE SIGNATURE PAGE HERETO (the Effective Date ), between DIRECTV, LLC, a California limited liability company ( DIRECTV ), a wholly owned subsidiary of AT&T, Inc., and THE DEALER LISTED ON THE SIGNATURE PAGE HERETO ( DEALER and together with DIRECTV, the Parties and each individually, a Party ), with reference to the following: A. DIRECTV operates a multi-channel video and entertainment service (the DIRECTV Service ) through which commercial establishments may receive video and audio programming and other services, using specialized receiving equipment (the DIRECTV System ), which includes DIRECTV authorized set top box receivers (the DIRECTV Receivers ). B. DEALER wishes to act as one of DIRECTV s commissioned commercial dealers that market, promote and advertise the sale of DIRECTV Systems and the DIRECTV Service, and that solicit Commercial Establishments to Order (as defined below) certain DIRECTV programming packages generally categorized as the Public Viewing Programming Packages, the Business Viewing Programming Packages and the Private Viewing Programming Packages, each as identified at the Dealer Center (as defined below), as the same may be amended by DIRECTV from time to time (collectively, the DIRECTV Programming Packages ). C. If DEALER is a party to an agreement covering its rights and obligations with respect to DEALER s appointment and performance as a commissioned commercial dealer for DIRECTV, both DIRECTV and DEALER wish to terminate that agreement in its entirety and supersede such agreement with this Agreement effective as of the Effective Date. NOW, THEREFORE, in consideration of the mutual agreements contained herein, and for other good and valuable consideration, the receipt of which are hereby acknowledged, the Parties hereby agree as follows: 1. GENERAL ENGAGEMENT AND APPOINTMENT OF DEALER. 1.1 DEFINITIONS. Terms defined above or in the text of this Agreement shall have the meanings set forth herein. Other capitalized terms shall have the meaning set forth in the Schedule of Definitions, which is attached hereto as Schedule 1.1. All Schedules, Appendices, and Exhibits to this Agreement are incorporated herein by reference and shall be deemed to be a part of this Agreement. 1.2 APPOINTMENT. (a) DIRECTV hereby engages DEALER as an independent contractor to market, promote and advertise the sale of DIRECTV Systems and the DIRECTV Service, by extending the National Commercial Offers (as defined below) and generally available DIRECTV Programming Packages, using marketing tactics, channels and methods consistent with the terms, conditions and restrictions contained herein. (b) DEALER may market, promote and advertise the sale of DIRECTV Systems and the DIRECTV Service only for Commercial Establishments in the Territory. DEALER understands and agrees that it shall have no right pursuant to this Agreement to solicit or take Orders (as defined below) from potential residential subscribers (including, without limitation, residential households, residential consumers, multiple dwelling unit residential property owners or residents, satellite master antenna television delivered recipients or any other person or establishment), and that any failure to comply with this provision shall be deemed a material breach of this Agreement. (c) DEALER understands and agrees that it may only take Orders for Public Viewing Programming Packages for viewing in Public Viewing Locations, Business Viewing Programming

2 Packages for viewing in Business Viewing Locations and Private Viewing Programming Packages for viewing in Private Office Locations, and that any failure to comply with this provision shall be deemed a material breach of this Agreement. (d) DIRECTV may amend the list of DIRECTV Programming Packages from time to time, following notice to DEALER. A list of current DIRECTV Programming Packages is available for viewing by DEALER at the DIRECTV Dealer Center, available at (the Dealer Center ). (e) DEALER hereby accepts such engagement and shall use its best efforts to responsibly market, promote, advertise and solicit sales of the DIRECTV Systems and the DIRECTV Service, by extending the National Commercial Offers and/or along with generally available DIRECTV Programming Packages. In addition, DEALER will use its best efforts to promote and enhance DIRECTV s business, reputation and goodwill in accordance with the terms of this Agreement. 1.3 NO EXCLUSIVITY REQUIRED OF DIRECTV. DIRECTV may itself extend the National Commercial Offers and generally available DIRECTV Programming Packages and solicit Orders from Commercial Establishments and others, either directly, indirectly, or in conjunction with any third party, and may authorize parties other than DEALER to act as its commissioned dealers to promote, market, promote, advertise and solicit the sale of the National Commercial Offers and any generally available 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 to DEALER pursuant to this Agreement. DEALER acknowledges that DIRECTV and such other parties may compete with DEALER in the solicitation of the National Commercial Offers and any generally available DIRECTV Programming Packages. 1.4 EXCLUSIVITY REQUIRED OF DEALER. Except as otherwise agreed to by DIRECTV and DEALER in writing, DEALER agrees that from the Effective Date until expiration of the Term (or earlier termination pursuant to the terms hereof), DEALER shall not directly or indirectly sell or solicit sales of, or take Orders for, any other multi-channel video service that competes with the DIRECTV Service for delivery and receipt at Commercial Establishments located within the Territory. 1.5 DIRECTV NATIONAL ACCOUNTS. DEALER agrees that it shall not, without DIRECTV s prior written approval, market, promote, advertise and solicit the sale of DIRECTV Programming Packages to any National Account. A list of National Accounts under contract with DIRECTV is available for viewing by DEALER at the Dealer Center, and any updates to such list shall be made available at the Dealer Center at the beginning of each calendar quarter. DEALER further agrees that it shall not, without DIRECTV s prior written approval, market, promote, advertise or solicit the sale of DIRECTV Programming Packages to any Potential National Account; provided, however, if DEALER wishes to pursue a Commercial Establishment that is a Potential National Account, DEALER may provide DIRECTV with written notice of such intent and, if approved by DIRECTV in writing, DEALER may pursue such Commercial Establishment. 1.6 OTHER LIMITATIONS OR RIGHTS. In addition to any other limitations or rights set forth herein, DEALER s ability to market, promote and advertise the sale of DIRECTV Systems and the DIRECTV Service is further subject to any applicable additional limitations and rights set forth on Schedule 1.6 attached hereto. 2. DEALER S GENERAL OBLIGATIONS. 2.1 INITIAL SALES ACTIVITIES; FCO AND EVO REQUIREMENTS. DEALER shall contact and market to Commercial Establishments (including current DEALER-Acquired Subscribers), including by visiting Commercial Establishments, with the express purpose of soliciting Orders (including renewal Orders) for the National Commercial Offers and generally available DIRECTV Programming Packages and sales of DIRECTV Systems. DEALER shall not solicit or take Orders from any Commercial 2

3 Establishment that is an existing Commercial Subscriber prior to DEALER s first contact with such Commercial Establishment, unless such Commercial Establishment is a DEALER-Acquired Subscriber. Upon taking the initial Order for a Public Viewing Programming Package or Business Viewing Programming Package from a Commercial Establishment, DEALER shall (i) obtain from such Commercial Establishment the estimated viewing occupancy ( EVO ) information for such Commercial Establishment and (ii) if the Commercial Establishment requests a DIRECTV Programming Package that requires the submission of the fire code occupancy ( FCO ) certificate, instruct the Commercial Establishment that it must submit to DIRECTV, prior to Activation of such DIRECTV Programming Package, an FCO certificate (in form reasonably acceptable to DIRECTV) for such Commercial Establishment. DEALER shall instruct the Commercial Establishments regarding the importance of submitting accurate EVO information, ordering the appropriate DIRECTV Programming Package for the type and size of Commercial Establishment that is consistent with the EVO and, if applicable, the FCO (additional information on EVO and FCO can be obtained through the Dealer Center). DIRECTV may refuse to activate programming, or may suspend programming, for a DEALER-Acquired Subscriber that has failed to provide in a timely manner, or has provided incomplete or inaccurate, EVO or FCO information. DEALER and DIRECTV will reasonably cooperate to obtain the EVO and FCO information that any Commercial Establishment fails to provide in a timely manner, and DEALER shall have the affirmative obligation to verify such EVO or FCO information, as applicable, for each Order if such information is provided to the DEALER by the Commercial Subscriber. DEALER s failure to deliver to DIRECTV such EVO or FCO information in a timely manner, or DEALER s failure to verify such information as provided by the Commercial Subscriber, shall be a material breach of this Agreement. 2.2 ONGOING SERVICE OBLIGATIONS. DEALER shall perform the following activities after the initial sale of any DIRECTV Programming Package to a Commercial Establishment: (a) DEALER shall ensure that any DIRECTV System equipment which is provided to the Commercial Establishment is delivered and installed as quickly as is reasonably possible or at such time as is agreed upon with the Commercial Establishment. (b) DEALER shall ensure that appropriate Commercial Establishment personnel are trained on how to operate the DIRECTV System equipment, including providing such personnel appropriate written operating instructions. (c) DEALER shall contact the Commercial Establishment within 48 hours of the initial installation to ensure that the DIRECTV System equipment is operating properly and to answer any additional questions. (d) DEALER shall visit each DEALER-Acquired Subscriber that is a Public Viewing Location no less than two (2) times a year to (i) ensure customer satisfaction, (ii) verify the current FCO and/or EVO information, (iii) introduce new DIRECTV Services and (iv) solicit renewals and upgrades to DIRECTV Programming Packages. DEALER shall maintain a record of all visits to each DEALER- Acquired Subscriber. (e) DEALER shall maintain the phone/answering system requirements and follow the service response requirements set forth on Schedule 2.2 attached hereto, as amended by DIRECTV from time to time (the Service Response Requirements ). Failure to comply with any or all of the Service Reponses Requirements may result in service charge fees due from DEALER to DIRECTV and/or Disassociation of the DEALER-Acquired Subscriber from DEALER, each as more fully set forth in the Service Response Requirements. (f) DEALER may be required by DIRECTV to provide occasional, noncompensatory service related to the DIRECTV System (i.e., DIRECTV Receiver re-tuning due to channel position realignment, access card switch-outs, etc.). DIRECTV shall provide DEALER with reasonable notice of such necessary across-the-board changes and shall provide DEALER with a reasonable period of 3

4 time to complete such service. DEALER may not charge the Commercial Establishments for such DIRECTV-requested service. 2.3 TRAINING. DIRECTV shall provide training and training materials regarding the DIRECTV Systems, National Commercial Offers, the generally available DIRECTV Programming Packages and the DIRECTV Service in general to DEALER s training personnel, as DIRECTV reasonably deems necessary. DEALER shall train its own employees. DEALER may be required by DIRECTV to provide supplementary training classes from time to time. DEALER shall be responsible for all expenses and compensation of its employees during such training. 2.4 PERSONNEL. DEALER may allow only its employees (and not any independent contractors, sub-agents or other parties) (a) to market, promote, advertise and solicit sales of the DIRECTV Systems or (b) to market, promote and advertise the National Commercial Offers or any DIRECTV Programming Packages, except with DIRECTV s prior written consent, which may be withheld in DIRECTV s discretion. Unless otherwise agreed to in advance and in writing by DIRECTV, DEALER understands and acknowledges that no third party outbound telephone call center or other referral affiliates may be utilized in any manner whatsoever under this Agreement. (a) OFFSHORE WORK PROHIBITED. None of the obligations and services under this Agreement shall be performed or provided and no information related to this Agreement shall be collected, stored, handled or accessed by DEALER or its subcontractors at any location outside of the United States. Additionally, DEALER shall not allow any of the services under this Agreement to be performed or provided by a subcontractor unless DIRECTV approves such subcontractor pursuant to the Section 2.4(b) entitled Work Done by Others. (b) WORK DONE BY OTHERS. If any part of DEALER s work is dependent upon work performed by others or subcontracted consistent with the terms herein, DEALER shall inspect and promptly report to DIRECTV any defect that renders such other work unsuitable for DEALER s proper performance. DEALER s silence shall constitute approval of such other work as fit, proper and suitable for DEALER s performance of its services or provision of material. Any use of, including any changes to the use of, a subcontractor must be approved by DIRECTV in writing before commencement of the work. DEALER shall provide to DIRECTV, upon request, information about the subcontractor including the identity of, the location of, and a complete description of the activities to be performed by such subcontractor. Where a portion of the work is approved to be subcontracted, DEALER remains fully responsible for performance thereof and shall be responsible to DIRECTV for the acts and omissions of any subcontractor. Nothing in this Agreement shall create any contractual obligation or other liability of DIRECTV to any subcontractor or its employees. DEALER agrees to bind every subcontractor to terms consistent with the terms of this Agreement. The subcontractor approval process is outlined in Schedule 2.5(b) attached hereto ( Subcontractor Approval Process ), which may be amended by DIRECTV, in its sole discretion, from time to time upon thirty (30) days notice to DEALER. 2.5 ADVERTISING. DEALER shall market, promote and advertise the DIRECTV Systems, the DIRECTV Service, National Commercial Offers and generally available DIRECTV Programming Packages, at DEALER s sole cost, using such marketing tactics, channels, methods and at such frequency as DIRECTV may reasonably designate. All advertising, advertising strategies, campaigns, marketing and promotional materials related to the DIRECTV Systems, DIRECTV Service, National Commercial Offers and Programming Packages shall be subject to DIRECTV s prior written approval. DIRECTV may withhold approval, in its sole and absolute discretion, of the use by DEALER of any marketing tactic, channel or method that DIRECTV reasonably believes does not fit within its marketing strategy. No approval shall limit DEALER s obligation to comply with applicable law. 2.6 STANDARD POLICIES. DEALER shall comply with the standard policies and procedures DIRECTV may promulgate for its dealers in notices, guidelines, and bulletins, including, any credit approval/checking policy required by DIRECTV and, if DEALER is authorized to conduct telemarketing activities, the telemarketing policy as outlined in Schedule 2.6 attached hereto (the 4

5 Telemarketing Policy ), as any of the foregoing may be amended by DIRECTV from time to time upon thirty (30) days notice to DEALER (collectively, the Policies ). The Policies shall be an integral part of this Agreement. 2.7 STANDARD OF CONDUCT. In all of its activities hereunder for DIRECTV, DEALER shall conduct itself in a commercially reputable and ethical manner, shall comply with all applicable laws (including the Telephone Consumer Protection Act of 1991), and shall engage in no deceptive sales practice or other practice that impugns DIRECTV s commercial reputation and goodwill. 2.8 NO TYING. In no event may DEALER condition any transactions involving or related to the DIRECTV Systems, DIRECTV Service, National Commercial Offers or DIRECTV Programming Packages upon the customer s acquisition of any other product or service, except as otherwise approved by DIRECTV in writing. 2.9 BOOKS AND RECORDS. DEALER shall maintain books and records relating to its activities on behalf of DIRECTV for a minimum of three (3) years after their creation and shall keep them at its principal place of business. DIRECTV may inspect, at all times during business hours, such books and records and DEALER s locations for compliance hereunder SPECIAL OFFERS/PROMOTIONS. In addition to the National Commercial Offers described herein, DIRECTV, in its sole discretion, may elect to provide special commercial offers and/or promotions. DEALER shall use its best efforts to participate in and implement any special offers/promotions established by DIRECTV, from time to time, on the same terms and conditions as provided to other commercial dealers of DIRECTV. In the event that DIRECTV determines that such special offer/promotion requires that DEALER commit to additional DIRECTV-provided training, DEALER acknowledges and agrees that DEALER shall not be eligible to participate in such special offer/promotion unless DEALER actually participates in, and completes, such required training ADMINISTRATION OF COMMERCIAL CUSTOMER AGREEMENT. For each and every Commercial Establishment that subscribes to a DIRECTV Programming Package, including any Commercial Establishment that satisfies and accepts the terms and conditions of the National Commercial Offer or a DEALER-Acquired Subscriber that upgrades to a new or different DIRECTV Programming Package, DEALER shall perform the following: (a) Explain the general terms and conditions of the Commercial Customer Agreement established and updated by DIRECTV from time to time, a copy of which is available at the Dealer Center; (b) Explain the specific terms and conditions of the National Commercial Offer or generally available DIRECTV Programming Packages, as applicable, established and updated by DIRECTV from time to time, which terms and conditions are available at the Dealer Center, and set forth in the confirmation correspondence provided to the new DEALER-Acquired Subscriber shortly following the Order or in the first DIRECTV billing statement; (c) Commercial Establishment; Verify, validate and certify the accuracy of the information provided by the (d) Inform the Commercial Establishment that a copy of the Commercial Customer Agreement and any specific terms and conditions related to the National Commercial Offer or generally available DIRECTV Programming Packages will be provided in the confirmation correspondence provided to the Commercial Establishment shortly following the Order or in the first DIRECTV statement; and (e) When submitting an Order for a DIRECTV Programming Package, indicate and notify DIRECTV, in accordance with the Order Procedures (as defined below), that a Commercial 5

6 Establishment has agreed to the Commercial Customer Agreement and the terms and conditions related to the National Commercial Offer or generally available DIRECTV Programming Packages, as applicable CUSTOMER RELATIONS, ETC. DEALER shall not (a) mislead, deceive or otherwise misrepresent the terms and conditions of the National Commercial Offers, the DIRECTV Programming Packages (or receipt thereof) or the Commercial Customer Agreement; (b) force or coerce Commercial Establishments into agreeing to the terms of the Commercial Customer Agreement; (c) falsify any information contained in the Commercial Customer Agreement; (d) falsely claim that a Commercial Establishment has agreed to the terms of the Commercial Customer Agreement or any other terms and conditions for the receipt of the National Commercial Offers or generally available DIRECTV Programming Packages; (e) file, or threaten to file, a lien or a claim against any Commercial Subscriber; (f) charge or in any way encumber the property of a Commercial Subscriber or (g) in any way seek to secure payment from a Commercial Subscriber for the receipt of DIRECTV Programming Packages. In the event of any dispute with DIRECTV related to the services provided hereunder, DEALER agrees that it shall seek recourse only against DIRECTV and DEALER agrees to promptly pay and discharge any liens, claims or charges filed by or on the behalf of any of its employees, contractors, laborers, material suppliers or any other third party with whom DEALER has engaged related to the provision of the services hereunder. DIRECTV shall have the right to obtain injunctive relief in order to prevent DEALER from breaching its obligations (or to obtain specific performance to compel DEALER to perform its obligations) pursuant to this Section CUSTOMER SOLICITATION. DEALER shall not, solicit, induce or otherwise cause an active Commercial Subscriber to disconnect its DIRECTV Service and/or reconnect/reactivate its DIRECTV Service through a DIRECTV System purchased from DEALER; provided, however, that no general solicitation containing a general offer to acquire the DIRECTV Service shall be deemed a solicitation, inducement or other cause for a DIRECTV Service disconnection UNAUTHORIZED RECEIPT. DEALER shall use commercially reasonable efforts to determine if Commercial Establishments are receiving any DIRECTV Services without proper authorization (an Unauthorized Receipt ). If DEALER verifies or reasonably suspects an Unauthorized Receipt, then DEALER shall take reasonable steps to document such misuse in accordance with the Business Overview Manual and shall transmit such information and documentation to DIRECTV as promptly as possible. DEALER shall take all steps related to the reporting of commercial misuse as DIRECTV may reasonably request. 3. RATES AND TERMS OF SERVICES. 3.1 RATES. DIRECTV may determine the content, pricing, terms and conditions of the National Commercial Offers, DIRECTV Service and DIRECTV Programming Packages, in its sole and absolute discretion. Except as expressly authorized by DIRECTV in writing, DEALER shall not (a) represent that the National Commercial Offers, DIRECTV Service or DIRECTV Programming Packages may be obtained on any different terms, rates or conditions, (b) impose additional or different terms and (c) offer customers any discount, rebate, or other material benefits in consideration for subscribing to them. 3.2 CHANGES. DIRECTV may change the content, pricing, terms, conditions and availability of the National Commercial Offers, DIRECTV Service and DIRECTV Programming Packages, from time to time in its sole and absolute discretion. DIRECTV shall notify DEALER of such changes as soon as practicable. DEALER shall promptly replace point of sale materials, if any, as necessary. 3.3 MISREPRESENTATIONS. If DEALER misrepresents or fails to fully disclose any prices or other terms and conditions of the National Commercial Offers, DIRECTV Service, DIRECTV Systems or any DIRECTV Programming Packages, 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 in compensation for such misrepresentation. In addition, DIRECTV shall be entitled to offset any 6

7 such payment or credit by DIRECTV to DEALER-Acquired Subscribers or others as a result of DEALER s misrepresentations or omissions against any amounts owed to DEALER by DIRECTV. 4. ORDERS FOR SERVICE AND NATIONAL COMMERCIAL OFFERS. 4.1 ORDERS; ORDER PROCEDURES. DEALER shall comply with the order procedures made available by DIRECTV, as the same may be amended by DIRECTV from time to time (the Order Procedures ), for placing orders for the National Commercial Offer and any generally available DIRECTV Programming Packages and DIRECTV Systems ( Orders ), which Orders shall include information as required under the Order Procedures, including, but not limited to (i) contact/business information of the potential Commercial Subscriber (e.g., business name, address, telephone number, etc.); (ii) the number and types of DIRECTV Systems to be provided and (iii) the applicable DIRECTV Programming Packages. All Orders shall be subject to acceptance or rejection by DIRECTV in its discretion. 4.2 NO FINANCING OR COLLECTION OF SUBSCRIPTION FEES. Unless otherwise approved in writing by DIRECTV, DEALER shall not (a) provide financing for the leasing of the DIRECTV Systems, DIRECTV Service or DIRECTV Programming Packages, or (b) collect subscription fees or other moneys due to DIRECTV from DEALER-Acquired Subscribers, and all subscription fees shall be billed directly to the DEALER-Acquired Subscriber by DIRECTV. 4.3 NATIONAL COMMERCIAL OFFERS. (a) Under the terms of this Agreement, in addition to any generally available DIRECTV Programming Packages, DEALER may market, advertise, promote, offer and consummate the national commercial offer(s) established by DIRECTV from time to time (the National Commercial Offer(s) ), as described at the Dealer Center. The National Commercial Offers will generally include promotional offers for potential and existing Commercial Subscribers whereby potential and existing Commercial Subscribers will be able to purchase DIRECTV Systems, with free standard installation included. (b) DIRECTV may change, amend or discontinue any National Commercial Offers upon notice to DEALER. DIRECTV will use its commercially reasonable efforts to provide sufficient advance notice of any changes, amendments or discontinuation of any National Commercial Offers to enable DEALER to make appropriate changes to its marketing, advertising and promotional materials and all communication made and disseminated to prospective customers. (c) The Parties agree and acknowledge that other national commercial offers or other special offers may be made available by DIRECTV from time to time, but DIRECTV is under no obligation to extend such offers to DEALER. (d) The National Commercial Offers generally require a prospective Commercial Subscriber (i) to satisfy and meet the terms and conditions promulgated by DIRECTV from time to time and (ii) to make a programming commitment to a qualifying DIRECTV Programming Package. DEALER shall provide or disclose any information, terms and conditions regarding the National Commercial Offers as directed or required by DIRECTV. 5. DIRECTV SYSTEM EQUIPMENT AND INSTALLATIONS. 5.1 GENERAL. DEALER shall conduct all of its DIRECTV System installation, warranty, maintenance, and repair business for its own account. 5.2 APPROVED DIRECTV SYSTEM. All DIRECTV Systems offered for sale by DEALER for use with DIRECTV Service must be compatible with the DIRECTV Service and manufactured by a supplier approved by DIRECTV. DIRECTV shall notify DEALER of such approved DIRECTV System 7

8 suppliers and those authorized to distribute DIRECTV System equipment (the Authorized DIRECTV Distributors ). 5.3 EQUIPMENT PROGRAMS. (a) Receiver Buydown Program. DEALER shall purchase DIRECTV Receivers from Authorized DIRECTV Distributors at prices mutually agreed upon between DEALER and the Authorized DIRECTV Distributors; provided, however, with respect to certain DIRECTV Receivers sold with the National Commercial Offer or other DIRECTV Programming Packages (as determined by DIRECTV and indicated at the Dealer Center), DIRECTV shall (i) pay Authorized DIRECTV Distributors, in order to subsidize the purchase price of such DIRECTV Receivers, the DIRECTV Receiver prepaid payment incentives in the amounts designated at the Dealer Center, as amended by DIRECTV in its sole discretion from time to time (the Receiver Buydown Payments ) and (ii) direct the Authorized DIRECTV Distributor to credit the Receiver Buydown Payment for the applicable DIRECTV Receiver to the invoice received by DEALER for the purchase of the DIRECTV Receiver. All Receiver Buydown Payments are based upon an Activation in connection with the applicable DIRECTV Receiver, within the time and in accordance with the rules of the Receiver Buydown Program described at the Dealer Center. If the Activation does not occur in accordance with the time and other rules of the Receiver Buydown Program, then DIRECTV may chargeback to DEALER, either directly, or through the Authorized DIRECTV Distributor, the Receiver Buydown Payment. DIRECTV shall also have the right to change the types of DIRECTV Receivers or related DIRECTV Programming Packages or National Commercial Offers eligible for a Receiver Buydown Payment. (b) Non-Receiver DIRECTV Hardware Reimbursement. DEALER shall purchase DIRECTV System equipment other than DIRECTV Receivers (the System Hardware ) from Authorized DIRECTV Distributors at prices mutually agreed upon between DEALER and the Authorized DIRECTV Distributors. Upon completion of the provision of the System Hardware to the DEALER-Acquired Subscriber and the Activation of the DEALER-Acquired Subscriber related to the System Hardware, DIRECTV shall reimburse DEALER in the amounts designated at the Dealer Center, as amended by DIRECTV in its sole discretion from time to time (the System Hardware Reimbursement ) and on the payment and other terms and conditions set forth in at the Dealer Center, which may be amended from time to time, upon notice to DEALER. In lieu of remitting the applicable System Hardware Reimbursement for the System Hardware, DIRECTV may offset such amounts against any amounts owed by DEALER to DIRECTV hereunder. (c) Advance Payments and General Terms. At the election of DIRECTV, DIRECTV may from time to time advance payments to Authorized Distributors on behalf of DEALER to assist DEALER with the purchase of DIRECTV Receivers and System Hardware, which advance payments will be reimbursed to DIRECTV by DEALER or, in lieu of DEALER s remitting the applicable advance payments, DIRECTV may reduce Compensation otherwise payable to DEALER by such amounts or offset such amounts against any amounts owed by DEALER to DIRECTV hereunder. All DIRECTV System equipment required by Commercial Subscribers, whether provided through the National Commercial Offer or with any generally available DIRECTV Programming Packages, shall be made available to Commercial Subscribers by DEALER at prices and terms which are reasonable and competitive with the prices and terms offered by DIRECTV and its authorized dealers. DEALER understands and agrees that DIRECTV has no responsibility whatsoever to DEALER, any Commercial Establishment, or any person or entity in connection with DIRECTV System equipment. Title and risk of loss of all DIRECTV Receivers and System Hardware shall be handled between DEALER and the supplier. 5.4 INSTALLATION. (a) DEALER shall provide installation services to prospective DEALER- Acquired Subscribers in accordance with the standard professional installation guidelines (the SPIG ). DEALER may obtain information about the SPIG through the Dealer Center. DIRECTV reserves the right to change or amend the SPIG upon notice to DEALER or update at the DIRECTV Center. 8

9 (b) In connection with a sale of a National Commercial Offer to prospective DEALER-Acquired Subscribers, DEALER shall provide the standard professional installation at no cost to the prospective DEALER-Acquired Subscribers. (c) DEALER may offer to provide additional installation-related services to prospective DEALER-Acquired Subscribers (i.e., installation services beyond those that are covered by the standard professional installation with respect to all DIRECTV Systems units), at prices and terms that are reasonable and competitive with the prices and terms offered by DIRECTV and its other authorized dealers, whether provided in connection with the National Commercial Offers or any generally available DIRECTV Programming Packages. 6. DEALER COMPENSATION. 6.1 PREPAID PROGRAMMING COMMISSIONS AND BONUS AMOUNTS. In consideration of DEALER s services in procuring Activations of certain DIRECTV Programming Packages and providing other services set forth herein for DEALER-Acquired Subscribers, DIRECTV shall pay DEALER one-time Activation commissions in the form of prepaid programming commissions ( Prepaid Programming Commissions ) and bonus amounts ( Bonus Amounts ), in each case in the amounts and on the terms and conditions set forth in the Commission Schedule attached hereto as Schedule 6.1, and subject to the restrictions, chargeback terms and changes described in Sections 6.3, 6.4 and 6.5. The current DIRECTV Rate Card, additional programming and pricing information and compensation guides are available at the Dealer Center. 6.2 CONTINUING SERVICE COMMISSIONS. (a) In consideration of DEALER s continuing support of promotion and advertising designed to procure new Commercial Subscribers, as well as DEALER s continuing service to DEALER-Acquired Subscribers, DIRECTV shall pay to DEALER a monthly continuing service commission (the Continuing Service Commission ), which shall be calculated based on the applicable percentage(s) of DIRECTV Programming Packages Sales Revenue for active DEALER-Acquired Subscribers, as set forth on Schedule 6.2 attached hereto, subject to the restrictions, chargeback terms and changes described in Sections 6.3, 6.4 and 6.5. For administrative convenience, DIRECTV may elect to pay Continuing Service Commissions based initially on billings for DIRECTV Programming Packages to DEALER-Acquired Subscribers, subject to later adjustment and recapture of excess payments if receipts by DIRECTV are less than billings. DEALER shall acquire no right to receive Continuing Service Commissions based on billings by reason of such practice. DIRECTV may at any time recapture any such excess payments from DEALER, by set-off or direct collection. (b) DEALER acknowledges that Continuing Service Commissions are not deferred commissions or otherwise paid for DEALER s procurement of Commercial Subscribers, but instead are paid for DEALER s continuing support of future Commercial Subscriber procurement efforts and DEALER s continuing services to DEALER-Acquired Subscribers. Accordingly, DIRECTV s obligation to pay Continuing Service Commissions shall terminate upon the earliest to occur of any of the following events, as they relate to an individual DEALER-Acquired Subscriber: (i) the suspension of the DEALER-Acquired Subscriber s account for any reason, for any period of thirty (30) days or more; any reason; (ii) (iii) the termination of the DEALER-Acquired Subscriber s account for the termination or expiration of this Agreement for any reason; or 9

10 (iv) the Disassociation of the DEALER-Acquired Subscriber from DEALER due to DEALER s breach of this Agreement, including, but not limited to, DEALER s failure to meet the Service Response Requirements. 6.3 EXCEPTIONS. As used herein, Prepaid Programming Commissions, Bonus Amounts and Continuing Service Commissions shall be referred to collectively as Compensation. DEALER acknowledges that DEALER s failure to properly follow DIRECTV s Order Procedures can prevent any such Orders from being considered an Activation for purposes of earning Compensation, regardless of whether DIRECTV activates a DIRECTV Programming Package. DIRECTV s determination of whether DIRECTV s Order Procedures have been properly observed shall be conclusive, absent manifest error. (a) Notwithstanding anything to the contrary herein, DIRECTV shall not be required to pay any Compensation for: Potential National Account; (i) (iii) any Commercial Establishment which is a National Account or any Order canceled prior to the commencement of service; (iv) any Order if a DEALER-Acquired Subscriber s DIRECTV Service to which such Order relates is terminated, canceled or disconnected (whether initiated by the DEALER-Acquired Subscriber or DIRECTV) within thirty (30) days of the date of Activation; or (v) any DIRECTV Programming Package sold to a residential household, residential consumer, multiple dwelling unit residential property owner or resident, satellite master antenna television delivered recipient or any other person or establishment that is not a Commercial Establishment; or (vi) 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 DEALER-Acquired Subscribers after the termination of this Agreement, except as provided in Section CHARGEBACKS. All Prepaid Programming Commissions are based upon a full uninterrupted purchase of the DIRECTV Programming Package by the DEALER-Acquired Subscriber, and are subject to chargeback if a Chargeback Event occurs within certain periods prescribed by DIRECTV (the Chargeback Periods ), as set forth in Schedule 6.4. A Chargeback Event shall be deemed to have occurred if, during the applicable Chargeback Period (i) a DEALER-Acquired Subscriber (whether initiated by the DEALER-Acquired Subscriber or DIRECTV) terminates, cancels or disconnects DIRECTV Service, (ii) the DEALER-Acquired Subscriber downgrades the DIRECTV Programming Package, or (iii) the DEALER-Acquired Subscriber fails to pay DIRECTV for the DIRECTV Programming Package for which DEALER was paid a Prepaid Programming Commission during the entire Chargeback Period. If a Chargeback Event occurs, DIRECTV may chargeback to DEALER all or a portion of the Prepaid Programming Commission in accordance with the chargeback rules, which may be amended from time to time by DIRECTV. 6.5 CHANGES. DEALER acknowledges that the market for multi-channel video and entertainment 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 Prepaid Programming Commissions, Bonus Amounts, Continuing Service Commissions, Receiver Buydown 10

11 Payments and any other compensation or the terms and conditions of chargebacks at any time, and from time to time, in its discretion; provided that: (a) DIRECTV shall give DEALER at least thirty (30) days prior notice of the effective date of any such change; (b) a change in the Prepaid Programming Commissions and Bonus Amounts or the terms and conditions of chargebacks shall be effective only with respect to Orders transmitted to DIRECTV after the effective date of the change; (c) a change in the Continuing Service Commissions shall be effective only with respect to DEALER-Acquired 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); and (d) DEALER may terminate this Agreement by written notice to DIRECTV, delivered no later than thirty (30) days after receipt of the change notice. 6.6 PAYMENT TERMS. DEALER shall provide information and execute any documents necessary to enable DIRECTV to remit electronically any amounts payable to DEALER in accordance with this Agreement. DIRECTV reserves the right to withhold any amounts payable to DEALER, until DEALER has submitted such necessary documents. DIRECTV shall pay DEALER the Prepaid Programming Commissions and Bonus Amounts within sixty-five (65) days after the end of the accounting month in which the Activation occurs, as determined by DIRECTV. DIRECTV shall pay DEALER the Continuing Service Commissions within sixty-five (65) days after the end of the accounting month in which DIRECTV receives the applicable payment from a DEALER-Acquired Subscriber, as determined by DIRECTV. In no event shall DIRECTV be required to pay Compensation until such time as accrued unpaid amounts total at least $50. From time to time, DIRECTV may make payments on a weekly or other basis. The Parties hereto agree and acknowledge that no expedited payments made by DIRECTV shall obligate DIRECTV to continue to do so or shall be construed to amend or modify the payment terms expressly set forth herein. In addition, in lieu of requiring DEALER to remit to DIRECTV any amounts collected by DEALER on behalf of DIRECTV, DIRECTV shall have the right to offset such amount against any Compensation payable to DEALER. Any disputes regarding Compensation or any other amounts owed to DEALER by DIRECTV shall be submitted in writing to DIRECTV no later than ninety (90) days of payment by DIRECTV. DEALER acknowledges that no reconciliation will be made following such 90-day period, and DEALER hereby waives any claims regarding Compensation or any other amounts owed to DEALER following such 90-day period. DEALER shall have the right, once per calendar year, to request a schedule of the Compensation earned by DEALER during the prior twelve month period. 6.7 SHARING COMPENSATION PROHIBITED. DEALER shall not rebate or share any Compensation with any other third party, including any authorized dealer or sales agent of DIRECTV. DEALER may not combine any National Commercial Offer transactions with another agent/dealer/retailer. DEALER acknowledges that any Orders submitted under another entity or person s account number or through such other entity or person s electronic interface with DIRECTV shall not be credited to DEALER for purposes of calculating Compensation. 6.8 SET-OFFS BY DIRECTV. If DEALER receives any amounts to which it is not entitled hereunder, DIRECTV may set-off such amount from sums otherwise owing to DEALER, including Prepaid Programming Commissions and Bonus Amounts. In addition, DIRECTV may set-off or recoup any amounts owed to it by DEALER, or by DEALER s subsidiaries and affiliates, pursuant to this or any other agreement with DIRECTV, and any damages suffered by DIRECTV due to DEALER s breach hereof or other misconduct, against any amounts DIRECTV owes to DEALER. The foregoing does not limit DIRECTV s right to recover any unrecouped balance. 11

12 7. CONFIDENTIAL INFORMATION. 7.1 GENERAL. (a) Except as otherwise provided for in this Agreement, without the express written consent of a Party (the Providing Party ), which may be granted or withheld in the Providing Party s sole discretion, the other Party (the Receiving Party ) shall not use, other than as necessary to comply with the terms of this Agreement or exercise its rights under this Agreement, and shall not provide, disclose, make available, sell, transfer or otherwise convey to any third party, any Confidential Information, other than as set forth in this Section 7.1. Confidential Information shall mean any information, in whatever form (paper, computer files, oral statements, etc.), regarding the Providing Party s intellectual property or any other confidential information of the Providing Party obtained by the Receiving Party in connection with this Agreement or the actions contemplated hereby, whether provided by the Providing Party, or derived independently by the Receiving Party or otherwise, including, without limitation (i) all DIRECTV Subscriber Information (which shall be considered DIRECTV s Confidential Information ); (ii) all information regarding DEALER-Acquired Subscribers other than DIRECTV Subscriber Information and other than publicly available information (which shall be considered DEALER s Confidential Information ); (iii) all market information and studies and marketing information; and (iv) all of the written data, summaries, reports, other proprietary information, trade secrets and information of all kinds, acquired, devised or developed in any manner pursuant to this Agreement. Immediately upon the Providing Party s written request (which request the Providing Party may make, as a specific or general request, in its sole discretion at any time up to one year after the last day of the Term), the Receiving Party shall provide to the Providing Party (or destroy and certify such destruction if the Providing Party so requests in writing) all requested Confidential Information (and all copies and embodiments thereof). (b) In addition, the Parties agree that, except as otherwise provided for in this Agreement, they and their employees have and will maintain in confidence the terms and provisions of this Agreement, as well as all of the Confidential Information of the other Party and that they have not and will not reveal the same to any persons not employed by the other Party, except: (i) at the written direction of the other Party; (ii) to the extent necessary to comply with applicable law or the valid order of a court of competent jurisdiction or in connection with any arbitration proceeding, in which event the disclosing Party shall so notify the other Party as promptly as practicable of such disclosure, shall allow the other Party the reasonable opportunity to participate in any meetings or court proceedings regarding the disclosure of such information and shall seek confidential treatment of any such information that is disclosed and; (iii) as part of its normal reporting or review procedure to its parent company, its auditors and its attorneys, if such parent company, auditors and attorneys agree to be bound by the provisions of this Section 7.1 (or are professionally bound to confidentiality obligations); (iv) in order to enforce any of its rights pursuant to this Agreement; (v) to current or potential investors, insurers or financing entities or in connection with any merger, acquisition, sale or public offering; provided, however, that the persons to whom the disclosure is made as described above agree to be bound by the provisions of this Section 7.1 (or are professionally bound to confidentiality obligations); provided, however, that, DIRECTV Subscriber Information may only be disclosed in accordance with Section 7.2; (vi) if, prior to the time of disclosure, the Confidential Information is in the public domain or is otherwise rightfully known without confidentiality obligations by the Receiving Party; or (vii) after the Confidential Information becomes part of the public domain through no fault of the Receiving Party. 7.2 DIRECTV SUBSCRIBER INFORMATION. As between DEALER and DIRECTV, DIRECTV owns all rights, title and interest, including, without limitation, all intellectual property rights, in and to all DIRECTV Subscriber Information. DEALER acknowledges and agrees that all DIRECTV Subscriber Information is proprietary to DIRECTV and shall be treated with at least the same degree of care by DEALER as DEALER uses to treat its own subscriber information. DEALER further agrees that it will comply with DIRECTV s policies, procedures and obligations regarding the protection and privacy of DIRECTV Subscriber Information, and agrees to indemnify DIRECTV for DEALER s breach of such policies, procedures and obligations. 12

13 7.3 SECURITY PROGRAM AND IDENTITY THEFT. As a wholly owned subsidiary of AT&T, Inc., DIRECTV and its customers, operators, suppliers, affiliates and agents are bound by AT&T s Dealer Information Security Requirements ( DISR ). DEALER shall comply with all applicable provisions of the DISR as contained in Schedule 7.3 of this Agreement. DEALER further agrees to comply with the terms and conditions of DISR, as may be changed from time-to-time by AT&T and/or DIRECTV in their sole discretion. DEALER shall cooperate fully with AT&T and DIRECTV, including by completing checklists or similar documentation, to ensure that Subscriber Information, AT&T and/or DIRECTV Derived Information, Software and/or computer systems DEALER develops, designs, supports and/or uses under this Agreement comply with the standards and requirements set forth in DISR. DEALER shall protect DIRECTV customer data by establishing, implementing and maintaining (i) a comprehensive written information security program reasonably designed to protect the security, confidentiality and integrity of DIRECTV customer data; and (ii) a written program for combating identity theft in connection with DEALER s use of DIRECTV customer data, either as a component of its information security program or on a stand-alone basis. 7.4 DIRECTV DATA AND DERIVED DATA (BIG DATA). As a wholly owned subsidiary of AT&T, Inc., DIRECTV and its operators, suppliers and agents are bound by AT&T s policies regarding the collection, utilization, storage, handling of and disposal of confidential DIRECTV information, DIRECTV employee or DIRECTV customer information. DEALER shall comply with the following DIRECTV Data and Derived Data Policy. (a) Definitions. i. AT&T Data Assets means data to which DEALER has access to in connection with this Agreement that is either from or regarding DIRECTV, AT&T, AT&T and/or DIRECTV customers or AT&T s and/or DIRECTV s network; provided, however, that the term AT&T Data Assets does not include any data that came to be in the possession or control of DEALER by a lawful manner outside the scope of this Agreement and independent of DEALER s relationship with DIRECTV and/or AT&T, including customer data obtained by DEALER to provide services outside the scope of this Agreement, even if such data is otherwise identical to AT&T Data Assets and even if the source of such data was an AT&T or DIRECTV customer. Notwithstanding the forgoing, DEALER shall otherwise comply with the relevant provisions of this Agreement. ii. AT&T Derived Information means information that DEALER derives by processing AT&T Data Assets, either alone or in combination with other data. (b) Rights and Obligations. i. AT&T Derived Information 1. Prohibitions. Except as expressly permitted in or required by this Agreement, DEALER (which, for purposes of this clause, includes DEALER s affiliates, agents, suppliers and contractors) is prohibited from the following: A. Processing, using or disclosing AT&T Data Assets, or B. Creating, processing, using or disclosing AT&T Derived Information. 2. Notice. DEALER shall promptly notify DIRECTV if DEALER reasonably believes that any of the Prohibitions in this subsection may have been violated. 3. Rights & Ownership. Except as expressly provided to the contrary in this Agreement, as between DIRECTV and DEALER, DIRECTV owns all rights 13