EXHIBIT 10.27
PAGING COMMUNICATIONS AGREEMENT
AGREEMENT made this day of February, 1996 between U.S.
PAGING SERVICES, INC., with a mailing address of X.X. Xxx 0000,
Xxxxxxxx, Xxxxxxx 00000-0000 ("USPS") and AMERICAN DRUG STORES,
INC. d/b/a OSCO DRUG and SAV-ON DRUG, 0000 Xxxxx Xxxxx, Xxx
Xxxxx, Xxxxxxxx (collectively "ADS").
WHEREAS, USPS is engaged in the business of processing and
marketing paging products and services throughout the United
States pursuant to agreements with carriers operating paging
networks (the "Carriers"), and
WHEREAS, ADS desires to engage in the sale of pagers
requiring network activation, and
WHEREAS, ADS intends to exclusively (subject to the terms
and conditions stated herein) utilize USPS to process pager
activations and provide the cellular network service for the
pagers purchased by ADS customers (the "Subscribers") in
available coverage areas, and
NOW THEREFORE, it is agreed as follows:
OBLIGATIONS OF USPS
1. Contracts with Carrier. During the term of this Agreement
and any renewals thereof, USPS has and shall continue to have in
effect binding contracts with the Carriers to provide paging
network services in each coverage area set forth on Exhibit A
attached hereto. In the event that USPS is unable or unwilling
to provide pager activation services to ADS in a coverage area
requested by ADS, then and in that event ADS shall have the
option to obtain pager activation services in such coverage area
from a pager network service provider of its choice, it being
understood that USPS shall not be obligated to process
activations supplied by such providers.
2. Processing and Activation Services to be Performed by USPS.
(a) Processing of Information Required for Activation.
USPS will process the information received from Subscribers who
call the 1-800 activation number included with the pager
purchased by such Subscriber and provide the information required
in Exhibit B attached hereto in accordance with the published
rate plans and specified promotions in Exhibit C, to either the
USPS automated operator or the USPS customer service
representative. USPS will promptly transfer the required
information to the network service provider for activation.
(b) Confidentiality. USPS shall electronically provide the
information necessary for the activation and fulfillment of the
pager purchased by the Subscriber to the Carrier contracted to
USPS.
(c) USPS Personnel and Systems Commitment. USPS shall
staff personnel and automated stations in sufficient numbers and
shall maintain the necessary systems and procedures to insure
prompt and efficient handling of Subscriber inquiries concerning
both the purchase and operation of the pagers and the activation
process.
(d) USPS Telephone. USPS will provide the Subscriber with
a toll free 800 telephone number to USPS which shall be available
to permit Subscribers to make inquiries including but not limited
to the operation of the pagers and service activation.
(i) The toll free number shall be staffed by USPS
personnel eighteen (18) hours a day, seven days a week.
(ii) The automated telephone information center shall
be in operation twenty-four (24) hours a day, seven days a week.
(iii) The automated order processing center shall be in
operation twenty-four (24) hours a day, seven days a week.
3. Commission Payments and Reports
(a) Payment of Commissions. For each Net Pager Activation,
USPS will pay ADS a commission ("Commission") on the 20th day of
the month following each Subscriber activation as follows:
(i) $2.00 per Net Activation (Advertising Funds).
(ii) $.50 per month for each Subscriber maintaining
continuous service up to twenty-four months and $.25 per month
during the remaining term of this Agreement. If the annual
contract is renewed for a second year, $5.00 payable if the
renewal is prepaid, upon renewal. If not prepaid, such
commission will be paid on the 20th day of the month following
payment. during the term of this agreement and any renewals
thereof.
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(b) Definition of "Net Activations". The term "Net
Activations" shall mean the number of pagers purchased by
Subscribers which are activated by the Carrier for a period of
not less than 90 days and such service is prepaid for 90 days by
the Subscriber less the number of pagers returned by Subscribers
(including exchanges where the Subscriber is to receive a
different cap code) during such period, and Net Activations shall
not include Subscribers who do not accept delivery of the pager
purchased from ADS.
(c) Reports.
(i) Month-to-Date, Year-to-Date Report - This report
will provide the following status order information: orders
transferred to the product vendor; name and address of each
Subscriber; orders shipped to the Subscriber; pagers activated by
the Carrier; and orders refused or canceled by Subscribers.
(ii) Residual Report - This report will be submitted
thirty days after activation setting forth Subscriber name, date
of activation, number of months in service, accrued residuals,
both month-to-date and year-to-date.
(iii) Audit Procedure. ADS or its designee may, from
time to time, audit such USPS books and records as are necessary
to determine the number of Net Activations and the information
set forth in 3(c)(i) and (ii) above. Such audits shall take
place during normal business hours and shall occur upon a minimum
of five (5) days notice by ADS to USPS.
(d) USPS agrees to make available Carrier network paging
services at the monthly rates set forth on Exhibit C attached
subject to specified payment terms.
(e) Commission Reductions and Product Changes. Commissions
and paging products may be changed from time to time upon one
hundred twenty (120) days prior written notice from USPS to ADS.
(f) Compliance with Laws Procedures and Good Business
Practices. USPS shall at all times conduct its business in
compliance with all applicable laws and regulations of the
federal, state and municipal governments and ethical business
practices.
OBLIGATIONS OF ADS
4. (a) Exclusivity. Subject to terms and conditions hereof,
ADS designates USPS as its exclusive pager activation service for
the purpose of providing access to pager network service for the
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sale of pagers in each of the coverage areas designated on
Exhibit A, attached hereto as such retail locations are released
to USPS by ADS management.
(b) Product Supplier. ADS shall purchase all paging
products from vendors designated by USPS pursuant to agreements
between ADS and such vendors on terms and conditions approved by
both ADS and USPS.
(c) Termination of Agreement.
(i) USPS and ADS may terminate this Agreement
immediately upon written notice to each other, if either party
does any of the following:
(A) makes a material misrepresentation or omission
to induce the other party to enter this Agreement;
(B) is convicted of, or pleads no contest to, any
felony or other crime that is likely to adversely
affect the reputation or goodwill of such other party.
(ii) USPS may terminate this Agreement upon thirty (30)
days prior written notice to ADS if ADS does any of the
following:
(A) repeatedly and regularly fails to comply with
any provision of the rates and charges published by
Carrier, which have been supplied to ADS by USPS;
(B) becomes a Reseller of paging network services
for any Carrier other than the Carrier designated by
USPS;
(C) ADS shall have thirty days after receipt of
written notice from USPS to cure any deficiencies set
forth in Sections 4(c)(i) and 4(c)(ii) above.
(iii) ADS may terminate this Agreement upon thirty (30)
days prior written notice to USPS in the event that
(A) USPS is unable or unwilling to perform its
respective obligations provided for in this Agreement
to the satisfaction of ADS;
(B) USPS violates any law, rule or regulation
which in ADS's discretion may adversely affect the
reputation and goodwill of ADS.
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(C) ADS desires to discontinue the sale of pagers
and paging network services through the procedures
described herein.
(d) Survival of Obligations. All obligations of either
party which expressly or by their own nature survive the
expiration or termination of this Agreement shall continue in
full force and effect notwithstanding its expiration or
termination until they are satisfied in full or by their nature
expire.
(e) Severability and Substitution of Valid Provisions.
Each provision of this Agreement shall be considered severable
and if a provision is for any reason held to be invalid all
remaining provisions shall be enforceable. If any provision of
this Agreement is held to impose a restriction which is
unenforceable in scope which could be made enforceable by
limiting the scope, the parties agree to modify the scope of the
provisions to preserve enforceability.
5. Term. Subject to the termination provisions set forth
above, this agreement shall continue in full force and effect for
a term of one (1) year from the date hereof. Following such one
(1) year period, this Agreement shall automatically renew for
successive one year terms provided, however, that either party
may terminate this Agreement at any time upon ninety (90) days
prior written notice to the other party sent by certified or
registered mail or reputable overnight carrier.
6. Entire Agreement. This Agreement contains the entire
understanding of the parties hereto in respect of the subject
matter contained herein. USPS may not assign this Agreement
without the prior written consent of ADS.
7. Assignment. This Agreement and all the provisions herein
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
8. Notices. All notices and other communications given
hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand or mailed, certified-return
receipt requested, with postage prepaid at the addresses set
forth above or to such other address as shall be designated in
writing.
9. Submission to Jurisdiction. The parties to this Agreement
agree that any legal suit, action or proceeding arising out of or
relating to this Agreement may be instituted in the state courts
of the State of Illinos and the United States District Courts of
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Illinois; waives any objection which it may have now or hereafter
to the laying of the venue of any such suit, action or
proceeding; and irrevocably submits to the jurisdiction of any
such court in any such suit, action or proceeding.
10. Governing Law. This Agreement and the legal relations
between the parties hereto shall be governed by and construed in
accordance with the laws of the State of Illinois without regard
to principles of conflicts of laws.
IN WITNESS WHEREOF, the parties herewith have caused the
agreement to be signed as of the day and year first above
written.
U.S. PAGING SERVICES, INC.
BY:___________________________
AMERICAN DRUG STORES, INC.
d/b/a OSCO DRUG and SAV-ON DRUG
BY:___________________________
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EXHIBIT A
(U.S. Map depicting National/Regional Coverage)
EXHIBIT B
INFORMATION REQUIRED FROM SUBSCRIBER
FOR AT HOME ACTIVATION
ORDER DATE
NAME (Last, First, M.I.)
BILLING ADDRESS
CITY
STATE
ZIP
SOCIAL SECURITY #
DRIVER'S LICENSE NO.
BILLING PHONE
RATE PLAN
PAYMENT TERMS
CAP CODE
CREDIT CARD TYPE, NUMBER
AND EXPIRATION DATE
EXHIBIT C
MONTHLY* YEARLY
Local $ 8.95 $ 6.95
State $14.95 $12.95
Regional $24.95 $21.95
National $29.95 $34.95
Voice Mail
Small Talk $ 4.95 $ 4.95
Standard $ 6.95 $ 6.95
Executive $ 9.95 $ 9.95
Alpha Numeric $12.95 $12.95
Personal 800# $10.00 $10.00
Page Recall $ 2.00 $ 2.00
Custom Greeting $ 2.00 $ 2.00
Personal Pager Protection $ 2.00 $ 2.00
*Effective January 15, 1996 all subscribers must prepay 90 days
service upon activation.
SERVICE PROMOTION RATES
YEARLY PAGER REBATE*
Local $ 6.95 $20.00
State $15.95 $20.00
Regional $24.95 $20.00
National $34.95 $20.00
Alpha Numeric $10.95 $20.00
SPECIAL PRODUCT/SERVICE PROMOTION RATE
SERVICE MONTHLY PRODUCT PAGER REBATE*
Local $6.95* Uniden LS $20.00
Local $6.95* Intek Inkeeper $20.00
*Three months prepaid. No annual contract.
