Exhibit 10.12
A request for confidential treatment for portions of this exhibit has been filed
with the United States Securities and Exchange Commission. The portions for
which confidential treatment has been requested have been separately filed with
the commission. The xxxx "Confidential Treatment Requested" has been inserted at
all places within this Exhibit where information has been deleted.
CELLULAR SERVICE SALES AGREEMENT
--------------------------------------------------------------------------------
DEALER AMERITECH
AREAWIDE CELLULAR, INC. AMERITECH MOBILE COMMUNICATIONS, INC
Attention: CFO Attention: Manager, Contract Administration
0000 Xxxxxxx Xxxx 0000 Xxxx Xxxxxxxxx Xxxxxx Xxxxx, #0X00X
Xxxxxxx Xxxxx, XX 00000 Xxxxxxx Xxxxxx, Xxxxxxxx 00000-0000
By: /s/ Xxxxxx Xxxxx By: /s/ Xxx Xxxxxxx
---------------------------- ---------------------------------------
(Signature) (Signature)
Xxxxxx Xxxxx Xxx Xxxxxxx
CFO Regional Vice President - Sales
Date: Date:
---------------------------- -------------------------------------
--------------------------------------------------------------------------------
Cellular telephone service ("Service") is provided and sold by
AMERITECH ("AMERITECH Service") as the authorized representative of the holders
of various licenses issued by the Federal Communications Commission in several
states (collectively, the "Service Area"). For purposes of this Agreement, the
term "Service" includes AMERITECH Service, cellular telephone service provided
by third parties, and other similar two-way voice communications services,
regardless of the types of technology and/or FCC licenses involved. Dealer sells
products and Service to the public within certain specific Service Areas which
are listed on Exhibit A (the "Market" or "Markets"). Dealer desires to act as
AMERITECH's agent for the sale of AMERITECH Service in the Markets named in
Exhibit A.
The parties have agreed to the following terms which will govern
Dealer's actions as AMERITECH's agent and AMERITECH's payments to Dealer.
1. EXCLUSIVITY. Dealer will sell AMERITECH Service exclusively in the
Markets named in Exhibit A. Dealer will not offer or sell Service provided or
sold by any third party, or refer any Service customer to any third party,
including any other AMERITECH sales representatives and/or resellers. AMERITECH
may sell AMERITECH Service directly or indirectly, by any means, throughout the
Service Area.
2. ROLLING TERM. Unless earlier terminated under Section 8, below, the
term of this Agreement (the "Term") shall be continuous and expire on the last
day of the full calendar month following delivery by either party of a notice of
expiration ("Expiration Notice"). An Expiration Notice may be given for any
reason or no reason.
3. COMPENSATION. AMERITECH will compensate the Dealer for each complete
sale of AMERITECH Service to customers. Sales of new Service are complete after
the customer has purchased service for the minimum continuous time period
established in Exhibit B.
Compensation will be paid at the rates and on the conditions attached
as Exhibit B. AMERITECH, in its sole discretion, may amend any and all Dealer
Compensation amounts at any time, provided that such amendments will take effect
only after AMERITECH gives Dealer a notice of the same length as an Expiration
Notice. AMERITECH may, at any time, and upon five (5) business days written
notice to Dealer, amend other parts of Exhibit B relating to other Terms and
Conditions of Payment and/or adding or deleting Service Products and Special
Offers.
4. CUSTOMERS AND CUSTOMER INFORMATION. Dealer agrees that all customers
who buy AMERITECH Service through Dealer are AMERITECH's Service customers
("AMERITECH Customers") and that for any purposes related to Service, Dealer
will deal with AMERITECH customers only as AMERITECH's agent. Dealer will
comply, upon reasonable notice, with all of AMERITECH's customer enrollment
procedures (including credit procedures) and customer service procedures all of
which may change from time to time. Dealer agrees not to impose any enrollment
standards, sales conditions, or contracts not written by AMERITECH on AMERITECH
Customers. Dealer will not xxxx or collect any Service charges from AMERITECH
Customers without AMERITECH's advance written agreement.
Dealer agrees that Dealer will not sell Ameritech Service in connection
with any communications equipment ("Equipment") unless such Equipment:
(A) Has been certified by the Cellular Telephone Industry
Association ('CTIA"); or
(B) Has received the prior, written approval of both parties.
Dealer also agrees that all AMERITECH Customer information (including,
but not limited to, names, addresses or lists; use, billing and related
information; and information pertaining to customers' cellular telephone
equipment; all of which are referred to as "Customer Information") is
confidential and highly valuable to AMERITECH, and is the exclusive property of
AMERITECH. The Dealer agrees to treat AMERITECH's Customer Information with the
highest degree of care, and to maintain the confidentiality of AMERITECH's
Customer Information as if it were the Dealer's confidential and proprietary
trade secrets.
5. DUTY OF LOYALTY. During the Term of this Agreement and for one (1)
calendar year after the Term expires (Section 2) or terminates (Section 8) or
any shorter period required by law, and within seventy-five (75) miles of any of
the Markets listed on Exhibit A, the Dealer will not, directly or indirectly:
(A) Solicit AMERITECH Customers to buy any Service other than
AMERITECH Service;
(B) Try to persuade any AMERITECH Customers to buy any Service
from anyone but AMERITECH, including other AMERITECH sales
representatives and/or resellers; or
(C) Sell, convey or transfer any AMERITECH Customer Information to
any third party.
THIS COMMITMENT IS NOT INTENDED TO RESTRICT THE DEALER'S GENERAL ABILITY TO DO
BUSINESS. THE PARTIES INTEND ONLY TO PROTECT AMERITECH'S CUSTOMER RELATIONSHIPS
AND AMERITECH'S CUSTOMER INFORMATION. Dealer acknowledges that these commitments
are necessary to protect AMERITECH's legitimate business interests. Dealer
agrees that these commitments are reasonable in subject matter, length of time,
and geographic area.
6. INDEMNIFICATION AND INSURANCE. Dealer will indemnify and hold
harmless AMERITECH and its employees, agents and assigns from any claims or
demands made (1) as a result of Dealer's conduct of its business, including but
not limited to negligent or wrongful acts or omissions; (2) by Dealer's
employees under worker's compensation or other, similar laws; and (3) as a
result of Dealer's unauthorized use of AMERITECH's Customer Information, Marks,
or other proprietary property. AMERITECH may defend any such claims or demands
using its counsel.
Dealer will maintain aggregate minimum liability insurance coverage of
One Million Dollars ($1,000,000) per occurrence, under policies issued by
recognized and legally qualified insurance companies, for each of the following:
2
property damage, bodily and/or personal injury, and death arising from Dealer's
acts or omissions. Further, if AMERITECH, in its reasonable discretion,
considers changes in law or standards of liability, inflation, special risks, or
other similar causes (including jury awards) to justify higher coverage amounts;
and if other, similarly situated AMERITECH dealers doing business in Dealer's
Market(s) are subject to similar increases, then AMERITECH may require Dealer to
increase its coverage levels upon reasonable notice. Upon AMERITECH's request,
Dealer shall furnish proof of insurance coverage.
7. TRADEMARKS. AMERITECH grants Dealer a special limited license to use
the AMERITECH trademarks and trade names (the "Marks") shown on Exhibit C for
the sole purpose of selling AMERITECH's Service. Dealer agrees to comply upon
reasonable notice with all of AMERITECH's standards for use of the Marks, as
amended from time to time.
8. TERMINATION. This Agreement will terminate under the following
circumstances:
(A) UPON EXPIRATION of the Term following Expiration Notice, as
provided in Section 2, above.
(B) FOR CAUSE, if one party (a) breaches this Agreement and
(except as stated in subsection (C) below) fails to cure such
breach within ten (10) calendar days after delivery of written
notice of such breach. The injured party may then terminate
this Agreement immediately upon delivery to the other Party of
an additional written termination notice.
(C) IMMEDIATELY AND WITHOUT NOTICE, if
(1) In AMERITECH's sole judgment, Dealer (or any Dealer
employee or agent) has abused or misused this
Agreement or any AMERITECH Service product, sales
program, promotion (or other similar effort),
procedure or customer equipment program, for profit;
or
(2) Dealer fails to obtain AMERITECH's prior written
approval (which may be withheld for any reason or no
reason) of any change either of majority ownership
interest of Dealer or in effective control of Dealer.
Upon termination, the Dealer will immediately turn over to AMERITECH
all Customer Information, regardless of form or storage medium, along with all
materials relating to AMERITECH's Marks. The Dealer will permit AMERITECH to
make a reasonable inspection of the Dealer's business premises to verify
compliance with this Section.
9. REMEDIES. AMERITECH has the right to enforce any of Dealer's
commitments under this Agreement by any available means at law or in equity,
including any form of injunctive relief. Further, Dealer consents to the entry
of immediate injunctive relief to prevent any breach. Dealer acknowledges: (1)
that these restrictions are necessary to protect AMERITECH's legitimate business
interests; and (2) that AMERITECH would be irreparably injured by, and would
have no adequate remedy at law for, any breach or threatened breach of Dealer's
commitments.
If AMERITECH breaches this Agreement, Dealer's sole remedy will be to
terminate this Agreement and bring an action at law for money damages.
10. ASSIGNMENT. Dealer has no right to assign, transfer or convey all
or any part of this Agreement.
11. COMPLIANCE WITH LAWS. This Agreement and the parties' action under
this Agreement shall comply with all applicable federal, state and local laws,
rules, regulations, court orders, and governmental agency orders. If a court or
governmental agency with proper jurisdiction determines that this Agreement or a
provision of this Agreement is unlawful, this Agreement or that provision of
this Agreement shall terminate. If a provision of this Agreement is so
3
terminated and Ameritech in its reasonable discretion decides that it can
legally, commercially, and practicably continue this Agreement without the
terminated provision, the remainder of this Agreement will continue in effect.
12. OTHER. Notices concerning this Agreement are to be sent to the
addresses shown on the first page, until either party provides the other with
reasonable written notice of a change of address. All notices will be sent via
facsimile transmission followed by first class mail or overnight delivery
service (such as Federal Express). Notices will take effect one (1) business day
after they are delivered.
This agreement and the attached Exhibits A, B and C set forth the
entire relationship between the parties. This Agreement may be modified only in
writing signed by both parties, except for changes required by regulatory
authorities and any changes to Exhibit B, which are made by AMERITECH pursuant
to Section 3.
Even if one party tolerates deficiencies in the other party's
performance on one or more occasions, subsequent deficiencies will be sufficient
reason to enforce this Agreement, including (where applicable) termination.
Sections 1 and 4 through 9 shall survive expiration and/or termination
of this Agreement.
Any lawsuit related to the Agreement or the activities contemplated by
the Agreement may only be brought in, and the parties consent to the
jurisdiction of, the United States District Court for the Northern District of
Illinois (if federal jurisdiction applies) or in the Circuit Court of Xxxx
County, Illinois.
END
4
EXHIBIT A
I. AUTHORIZED DEALER LOCATIONS
This Exhibit A sets forth: (1) the date upon which Dealer's
authorization takes effect; (2) the AMERITECH Markets in which Dealer
is authorized to solicit Customers; and (3) specific locations at which
Dealer is authorized to sell Mobile Service. (If some specific
locations are not known at the date of execution of this Agreement,
then with AMERITECH's written consent they may be added, as they become
known.)
1. EFFECTIVE DATE:
-----------------------------
2. ALL OF THE FOLLOWING MARKETS IN WHICH AMERITECH IS AUTHORIZED TO
PROVIDE MOBILE SERVICES:
Madison CGSA and Milwaukee CGSA
3. AUTHORIZED DEALER LOCATION(S):
4. AUTHORIZED SATELLITE LOCATION(S):
5
EXHIBIT B: DEALER COMPENSATION SCHEDULE
PART I: COMPENSATION LEVELS IN MADISON CGSA EFFECTIVE MARCH 3,1998
NOTE: ALL COMPENSATION IS GOVERNED BY THE TERMS ATTACHED AS PART II. IF
ANY SERVICE IS TERMINATED OR DEACTIVATED ON OR BEFORE THE LAST DAY OF
THE VESTING PERIOD, NO COMPENSATION WILL BE EARNED.
DEALER COMPENSATION
I. SERVICE PLAN OFFERINGS - COMMISSION PAYMENTS
[CONFIDENTIAL TREATMENT REQUESTED]
NOTE: When Digital Service Plan Offerings are introduced, this Section
will be amended to include applicable Commission Payments.
II. ACCOUNT MAINTENANCE FEE: Payment may be earned on Customers who have
purchased Standard Service Plan Offerings. Payment is based on the
Customer's actual net monthly access and airtime charges, during the
term of Dealer's Cellular Service Sales Agreement or Cellular and
Wireless Data Services Sales Agreement, as the case may be, with
Ameritech ("Sales Agreement"), at the following rates:
==================================== ========================================================================
PAYMENT TO DEALER
------------------------------------ ------------------------------------------------------------------------
During initial 13 During 14-37th During 38th Full or Partial
Full or Partial Full or Partial Service Billing Cycle and Full
Customer's Monthly Charge Service Billing Service Billing or Partial Service Billing
Cycles Cycles Cycles Thereafter
------------------------------------ -------------------- ------------------- -------------------------------
$65.00 or less [CONFIDENTIAL TREATMENT REQUESTED]
------------------------------------ -------------------- ------------------- -------------------------------
$65.01 - $85.00 [CONFIDENTIAL TREATMENT REQUESTED]
------------------------------------ -------------------- ------------------- -------------------------------
$85.01 - $100.00 [CONFIDENTIAL TREATMENT REQUESTED]
------------------------------------ -------------------- ------------------- -------------------------------
$100.01 or more [CONFIDENTIAL TREATMENT REQUESTED]
------------------------------------ -------------------- ------------------- -------------------------------
[CONFIDENTIAL TREATMENT REQUESTED]
EXCEPTIONS TO ACCOUNT MAINTENANCE MATRIX ABOVE:
[CONFIDENTIAL TREATMENT REQUESTED]
6
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED] If you accept the mass transfer of any
portion of a customer base activated by another dealer, then regardless
of the dates on which those customers were activated, and regardless of
the Service Plan Offerings purchased by those customers you will earn a
flat Account Maintenance fee of [CONFIDENTIAL TREATMENT REQUESTED] for
each customer transferred.
NOTE:
A. Any amendment to the Account Maintenance Matrix (or to the Exceptions
to such Matrix) made by Ameritech pursuant to the Compensation Section
of the Sales Agreement shall apply to each Customer in Dealer's Account
Maintenance Fee base whose Monthly Charge or Service Plan is in the
category affected by such amendment, regardless of whether such
Customer was activated prior or subsequent to the effective date of
such amendment.
B. Full or Partial Service Billing Cycles during which Customers pay no
monthly access and/or airtime charges are nonetheless considered Full
or Partial Service Billing Cycles, and the "initial" Full or Partial
Service Billing Cycle commences upon activation of a Customer's
Service, regardless of the date of commencement of actual payments by a
Customer on account of monthly access and/or airtime charges.
III. VESTING PERIOD:
* All Commission Payments and Account Maintenance Fees except any
designated Special Offers and No Term Service Plan: [CONFIDENTIAL
TREATMENT REQUESTED] Days.
[CONFIDENTIAL TREATMENT REQUESTED] All Commission Payments and Account
Maintenance Fees for Price Plans with a No Term Agreement
[CONFIDENTIAL TREATMENT REQUESTED] days - [CONFIDENTIAL TREATMENT
REQUESTED] 91-180 days [CONFIDENTIAL TREATMENT REQUESTED] 181+ days
[CONFIDENTIAL TREATMENT REQUESTED].
* Special Offer Commission Payments and Account Maintenance Fees: the
period specified in the Special Offer letter, Compensation notice or
other Ameritech document setting out the terms of the Special Offer.
7
EXHIBIT B: DEALER COMPENSATION SCHEDULE
PART I: COMPENSATION LEVELS IN MILWAUKEE CGSA EFFECTIVE MARCH 3,1998
NOTE: ALL COMPENSATION IS GOVERNED BY THE TERMS ATTACHED AS PART H. IF
ANY SERVICE IS TERMINATED OR DEACTIVATED ON OR BEFORE THE LAST DAY OF
THE VESTING PERIOD, NO COMPENSATION WILL BE EARNED.
DEALER COMPENSATION
I. SERVICE PLAN OFFERINGS - COMMISSION PAYMENTS
[CONFIDENTIAL TREATMENT REQUESTED]
NOTE: When Digital Service Plan Offerings are introduced, this Section will
be amended to include applicable Commission Payments.
II. ACCOUNT MAINTENANCE FEE: Payment may be earned on Customers who have
purchased Standard Service Plan Offerings. Payment is based on the
Customer's actual net monthly access and airtime charges, during the
term of Dealer's Cellular Service Sales Agreement or Cellular and
Wireless Data Services Sales Agreement, as the case may be, with
Ameritech ("Sales Agreement"), at the following rates:
==================================== ========================================================================
PAYMENT TO DEALER
------------------------------------ ------------------------------------------------------------------------
During initial 13 During 14-37th During 38th Full or Partial
Full or Partial Full or Partial Service Billing Cycle and
Customer's Monthly Charge Service Billing Service Billing Full or Partial Service
Cycles Cycles Billing Cycles Thereafter
------------------------------------ -------------------- ------------------- -------------------------------
$65.00 or less [CONFIDENTIAL TREATMENT REQUESTED]
------------------------------------ -------------------- ------------------- -------------------------------
$65.01 - $85.00 [CONFIDENTIAL TREATMENT REQUESTED]
------------------------------------ -------------------- ------------------- -------------------------------
$85.01 - $100.00 [CONFIDENTIAL TREATMENT REQUESTED]
------------------------------------ -------------------- ------------------- -------------------------------
$100.01 or more [CONFIDENTIAL TREATMENT REQUESTED]
==================================== ==================== =================== ===============================
[CONFIDENTIAL TREATMENT REQUESTED]
EXCEPTIONS TO ACCOUNT MAINTENANCE MATRIX ABOVE:
A. Any customer who has activated after April 1, 1993 and who activated
under one of the designated Non-Standard Service Plan Offerings listed
below, Account Maintenance Fees will be earned at the following rates:
8
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED] If you accept the mass transfer of any
portion of a customer base activated by another dealer, then regardless
of the dates on which those customers were activated, and regardless of
the Service Plan Offerings purchased by those customers you will earn a
flat Account Maintenance fee of [CONFIDENTIAL TREATMENT REQUESTED] for
each customer transferred.
NOTE:
A. Any amendment to the Account Maintenance Matrix (or to the Exceptions
to such Matrix) made by Ameritech pursuant to the Compensation Section
of the Sales Agreement shall apply to each Customer in Dealer's Account
Maintenance Fee base whose Monthly Charge or Service Plan is in the
category affected by such amendment, regardless of whether such
Customer was activated prior or subsequent to the effective date of
such amendment.
B. Full or Partial Service Billing Cycles during which Customers pay no
monthly access and/or airtime charges are nonetheless considered Full
or Partial Service Billing Cycles, and the "initial" Full or Partial
Service Billing Cycle commences upon activation of a Customer's
Service, regardless of the date of commencement of actual payments by a
Customer on account of monthly access and/or airtime charges.
III. VESTING PERIOD:
[CONFIDENTIAL TREATMENT REQUESTED] All Commission Payments and Account
Maintenance Fees except any designated Special Offers and No Term
Service Plan [CONFIDENTIAL TREATMENT REQUESTED] Days.
[CONFIDENTIAL TREATMENT REQUESTED] All Commission Payments and Account
Maintenance Fees for Price Plans with a No Term Agreement: 0-90 days -
[CONFIDENTIAL TREATMENT REQUESTED] 91-180 days [CONFIDENTIAL
TREATMENT REQUESTED] 181+ days [CONFIDENTIAL TREATMENT REQUESTED].
* Special Offer Commission Payments and Account Maintenance Fees: the
period specified in the Special Offer letter, Compensation notice or
other Ameritech document setting out the terms of the Special Offer.
9
EXHIBIT B: COMPENSATION SCHEDULE
PART II: PAYMENT TERMS EFFECTIVE MARCH 3,1998
I. WHAT YOUR PAYMENT WILL BE FOR EACH SALE
A. Types of Sales. Dealers earn different Compensation for different
types of sales ("Sales"). The type of Sale will depend on four things: whether
you sell to a New Customer or an Existing Customer (defined below); which
Service Plan you sell; whether the Service Plan is sold on standard terms or is
part of a Promotion, Special Offer, Discount and/or Reduced Rate Package; and
the area code of the Customer's Mobile Number (area codes outside the Dealer's
Authorized Sales Area may receive different compensation treatment).
New Customers are Customers who did not purchase any Ameritech Service
for ninety (90) days before the current sale and/or Customers who activate
additional Service line(s) and keep their existing Service line for ninety (90)
days after the current sale. If a Customer's existing Ameritech Service line is
deactivated within ninety (90) days before or after the current Sale, then
he/she is not a New Customer.
Existing Customers are Customers who have had any Ameritech Service
within ninety (90) days before the current sale.
In the case of both New Customers and Existing Customers, "Customer"
shall not include those persons or business entities which purchase or intend to
purchase Service for resale to other end users. Dealer shall not be entitled to
any Compensation or other amounts including but not limited to equipment rebates
on account of any transaction with any person or entity purchasing Service for
resale to third parties, and if Compensation or other amounts including but not
limited to equipment rebates on account of any such transaction is advanced, it
may be set off against (or deducted from) other amounts payable to Dealer by
Ameritech.
NOTE: No Compensation is earned when an Existing Customer changes
Service Plans.
Service Plans are defined by Ameritech, in its sole discretion. Service
Plan definitions are based on various factors, including but not limited to
transmission technology and application (that is, a sale of an analog
transmission Service Plan may be compensated differently from digital
transmission and/or wireless data Service Plan); Packages (discounts and/or
reduced rates, packaged minutes, free minutes, etc.); and Added Features (such
as Standard and Enhanced Message Service, Call Waiting, Call Forwarding, and
Three-Way Calling).
As of the date above, Standard Service Plans include, but are not
limited to, Service Plans that are sold without any Promotion, Special Offer,
Discount and/or Rate Reduction. Special Offers include Non-Standard Service
Plans, including but not limited to Standard Service Plans sold as part of a
Promotion, a Package or a Special Offer; and Discounts and/or Reduced Rates for
businesses, corporate accounts, eligible associations and other Reduced Rate
Plans (all of which are referred to as "Special Offers").
AMERITECH RESERVES THE RIGHT TO ADD, DELETE AND/OR MODIFY SERVICE PLANS AND
SPECIAL OFFERS THROUGHOUT THE TERM OF THE DEALER'S SALES AGREEMENT.
Part I shows the Compensation rates in effect in Dealer's Authorized
Sales Area for each type of Sale. (Remember, not all Service Plans and Special
Offers are available in all markets and some are not available to all Dealers.)
"Compensation" refers to all forms of Compensation, including but not limited to
Commission Payments and Account Maintenance Fees, either separately or
collectively.
B. Types of Compensation.
1. One Commission Payment is paid for each Sale to a New
Customer of a Mobile Service line identified by a mobile telephone number
combined with an ESN number (or an Internet protocol address assigned to a
mobile end system in the case of CDPD lines), no matter how many Service Plans
and/or Special Offers are combined in the Sale. Please note: Commission Payments
for Standard Service Plans and Special Offers will vary. See Part I. There are
two (2) kinds of Commission Payments, depending on the type of Sale:
a. Standard Commission is paid for each Sale to a New Customer of a
Standard Service Plan unless the Sale involves a Special Offer.
b. Special Offer Commissions are paid for each Sale to an Eligible
Customer under any Special Offer. Special Offer Commissions will vary. If a Sale
to an Eligible Customer involves any Special Offer, the Commission Payment will
always be the applicable Special Offer Commission (no matter how many Service
Plans or Special Offers are combined in the Sale).
2. Account Maintenance Fees, sometimes called "Residuals", can
be earned in connection with Sales to New Customers of Standard Service Plans
and some Special Offers. Account Maintenance Fees are not earned in connection
with certain other Special Offers; for details, see Part I and/or the Special
Offer notice.
In order to earn Account Maintenance Fees, Ameritech Dealers must be
available to perform, and must actually perform, high quality account
maintenance-type services for Ameritech's Customers. In consideration of
Dealer's performance of its obligations under this Sales Agreement, including
account maintenance efforts, Ameritech pays each Dealer Account Maintenance Fees
for those Customers who purchase eligible Service Plans and are assigned to such
Dealer for account maintenance services (see Part I for more about eligible
Service Plans). In most cases, the Dealer which originally sells Service to a
Customer will also provide account maintenance services to that Customer, and
therefore will collect any Account Maintenance Fees generated through that
Customer's continued purchase of Service. However, this is not always true.
If Ameritech determines that the Dealer which first sold Service to a
given Customer is unwilling or unable to provide appropriate account maintenance
services to that Customer (equipment replacement transactions will not
automatically trigger this determination); or if the Customer chooses to obtain
such services from a different Dealer or Ameritech store; or if the Dealer's
Sales Agreement expires or terminates (for any reason or no reason), then
Ameritech will delete such Customer for purposes of payment from the first
Dealer's account maintenance fee base, and may subsequently designate a
different Dealer or Ameritech store as the Customer's dealer for account
maintenance purposes (the "Dealer of Record"). In such case, the Dealer which
formerly provided account maintenance services to the Customer stops earning any
Account Maintenance Fees for that Customer as of the effective date of such
deletion.
If a Dealer's Sales Agreement expires or terminates, the Dealer will
not, under any circumstances, earn any Account Maintenance Fees for any Service
purchase periods which occur after the Sales Agreement's expiration or
termination date -- even though the Customers formerly assigned to the Dealer
for account maintenance services may continue to purchase Service from
Ameritech. A Dealer's final Account Maintenance Fee payment, reduced by any
permitted set offs, will be for the Service purchase periods which end on the
date when the Sales Agreement expires or terminates.
For each Customer who purchases an eligible Service Plan, the Dealer of
Record will earn, during the term of Dealer's Sales Agreement, a percentage of
the Customer's Service charges for each full or partial calendar month in which
the Customer purchases Service, subject to the Vesting Period which applies in
each Market as stated on Exhibit B, Part I for that Market. As of the date of
this Exhibit B, Part II, the Vesting period in all Markets for Account
Maintenance Fees associated with Standard Service Plans (other than those with a
No Term Agreement) is [CONFIDENTIAL TREATMENT REQUESTED] days, commencing on the
day when the Customer's Service is activated. To calculate the Fee, Ameritech
will apply the percentage shown in Part I to the Customer's actual monthly
recurring charge, airtime usage, and charges for Ameritech Cellular long
distance, net of any discounts or other promotional reductions, and excluding
taxes, other tolls, auxiliary Services and/or Added Features. No Account
Maintenance Fees will be earned or paid for any Service which does not meet the
11
Vesting Period stated on Exhibit B, Part I, nor with respect to Customers'
Service periods after the date of termination or expiration of the Dealer's
Sales Agreement, nor with respect to Customers who have been deleted from a
Dealer's Account Maintenance Fee base as described above.
3. Sales Outside Authorized Area. If a Dealer sells Service to New
Customers whose mobile numbers have area codes for Service areas outside the
Dealer's Authorized Sales Area(s), then the Dealer will earn the Commission
Payment in effect in the Market area (CGSA, MSA or RSA) in which the Customer's
mobile number originates, but no Account Maintenance Fees.
4. Unauthorized Sales. Dealer shall not be entitled to any Compensation
or other amounts including but not limited to equipment rebates in connection
with the Sale of Service to a Customer (a) whom Dealer has permitted to purchase
a Service Plan which is not authorized by Ameritech for that Customer, or (b)
whom Dealer has permitted to activate lines in excess of those authorized by
Ameritech for a Customer. Ameritech shall have the right to charge back Dealer
in the amount of any Compensation or other amounts including but not limited to
equipment rebates advanced to Dealer in connection with any Sales described in
this Section.
II. HOW YOU EARN PAYMENTS
A. Vesting. Compensation, including Commission Payments and Account
Maintenance Fees, are advanced to Dealers each month. All advances are
contingent upon the Customer's continued purchase of Ameritech Service for the
minimum number of consecutive days established in Part I as the Vesting Period.
If any Customer stops buying, or Ameritech terminates, or suspends and later
terminates (in all cases, deactivates) Service on or before the last day of the
Vesting Period (e.g., [CONFIDENTIAL TREATMENT REQUESTED] day after activation
for Standard Service Plan Offerings other than those with a No Term Agreement)
(commencing on the date of activation), no Commission Payment or Account
Maintenance Fees will be earned.
Furthermore, if a Customer downgrades his/her Service Plan to a Service Plan
with a lower net monthly access cost (i.e., the net cost after any discounts,
credits, etc. is lower) within the Vesting Period(s) for the Service Plan
originally sold, Ameritech will charge back the Commission credited or paid for
the original Service Plan per the appropriate Vesting Period, and then pay
Dealer the Commission (or proportionate balance thereof) for the Service Plan to
which the Customer has downgraded. In such case, the Vesting Period for the new
Commission shall be deemed to have commenced on the date of activation of the
line under the original Service Plan.
In all such cases, Ameritech will either deduct advanced but unearned Commission
Payments and Account Maintenance Fees from future payments, or obtain repayment
from the Dealer. Nothing in this Section shall be construed to mean that Account
Maintenance Fees are earned in full at the time of Vesting. On the contrary,
Account Maintenance Fees are earned and paid in consideration of Dealer's
performance of its obligations under this Agreement, including its availability
to perform, and performance of, account maintenance-type services for Customers
as an Ameritech Dealer, and therefore are earned and paid only with respect to
Customers' Service periods which pre-date the date of termination or expiration
of the Dealer's Sales Agreement, or the deletion of the Customer(s) from such
Dealer's Account Maintenance Fee base.
B. Service Order Procedures. In order to receive Commission Payment and
Account Maintenance Fee advances, Dealers must obtain from each Customer at the
time of sale and be prepared to produce, within ten (10) days after the
Customer's Mobile Service is activated, properly completed Ameritech Service
Orders and/or Terms and Conditions pamphlets and any other required forms
(Forms), including applicable Service Plan information and credit information.
From time to time, Ameritech may audit all Forms in Dealer's possession to
determine whether complete records are being maintained. If, within
[CONFIDENTIAL TREATMENT REQUESTED] days after any activation, such an audit
demonstrates that any Forms are unavailable or incomplete, then the Dealer will
have one opportunity within the next consecutive ten (10) calendar days to
obtain the necessary information. To be complete, each Form must include all of
the following, in addition to any other information required pursuant to
Ameritech policies communicated to Dealer:
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* The Customer's signature.
* Verification that driver's license or state ID was checked to
authenticate identification
* Proof of membership in appropriate association (if applicable)
* Proof of employment by appropriate employer (if applicable)
* A valid credit class from the credit agency selected by Ameritech,
or an accepted Ameritech credit authorization.
Dealers will be charged back the applicable Commission Payment and Account
Maintenance Fees for each Sale if the Forms do not comply with these
requirements. During the term of the Dealer's Sales Agreement, Dealer shall
retain all Forms at its principal place of business for a period of at least
five (5) years from the date of their creation. Upon expiration or termination
of Dealer's Sales Agreement, Dealer shall retain all Forms in trust for
Ameritech and return them pursuant to the Termination section thereof.
C. When a Transaction Is Not a Sale. No Commission Payment or Account
Maintenance Fees can be earned for any Sales of "trial subscriptions" or of
lines which are never activated and accepted by the Customer. Also, if the
appropriate Commission Payment has been paid to a Dealer in connection with any
Service line, then additional Services in connection with that Service line will
not qualify as additional Sales. For example, no additional Commission Payment
will be paid for any of the following:
* Change of ESN and/or equipment upgrade;
* Change of Mobile number;
* Change or renewal of Service Plan;
* Correction of system entry errors;
* Conversion from main to subaccount or vice versa; and/or
* Assumptions of service
D. Special Offers. All Dealers are authorized and expected to sell
Standard Service Plans. Dealers are encouraged, but not required, to participate
in any Ameritech Special Offers for which they qualify. Dealers will be notified
and offered the opportunity to participate in every Special Offer for which they
qualify. (Additional copies of the Sales and Administration Memos (XXXx) and the
Special Offer letter or Compensation notice for any Special Offer can be
obtained from the Area Sales Manager). Dealer participation in any Special Offer
is completely voluntary; however, any Sale under a Special Offer constitutes the
Dealer's acceptance of all the terms of the Special Offer, including
Compensation (even where the Special Offer Commission and/or Account Maintenance
Fees are lower than the Commission Payment and/or Account Maintenance Fees for
the Sale of any Standard Service Plan involved in the Special Offer.)
E. When the Sales Agreement Expires or Terminates. The Dealer's right
to be compensated for Sales lasts as long as the Dealer's Sales Agreement is in
effect, and expires when the Dealer's Sales Agreement expires or terminates.
After expiration or termination, the Dealer will be paid Commission Payments
only for Sales made on or before the expiration or termination date. Further,
Dealer will only be paid for Account Maintenance Fees if they are fully earned
on or before the expiration or termination date, i.e., only with respect to
Customers' Service periods which end on or before the termination or expiration
of the Dealer's Sales Agreement (or the date of deletion of a Customer for
purposes of payment from a Dealer's Account Maintenance Fee base). If
Compensation advanced before the expiration or termination date is not earned,
Ameritech will either deduct the unearned Compensation from the Dealer's final
payment, or obtain repayment from the Dealer. Ameritech reserves the right to
hold back Dealer Compensation, the right to which has not vested prior to the
expiration or termination date, until after the Vesting Period for such
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Compensation has expired. After the expiration date of such Vesting Period,
Ameritech will remit to Dealer any earned but unpaid Compensation, or obtain
repayment from the Dealer of any unearned but advanced Compensation.
III. HOW AND WHEN PAYMENT IS MADE
A. Dates. If the Dealer obtains and transmits complete Form information
by the last day of the month, then Ameritech will advance the Dealer's
Compensation by the fifteenth (15th) business day after the month closes.
B. Deductions. All amounts which Dealers owe Ameritech; whether
pursuant to this Sales Agreement, any Paging Service Sales and Equipment
Agreement, Equipment Distribution Agreement, or any other agreement or
relationship between Dealer and Ameritech, may be set off against or deducted
from all amounts which Ameritech owes Dealers, including but not limited to
Compensation (for sale of Cellular and Paging Service), equipment rebates,
Equipment Reimbursement Program and spiffs. Such deductions include, but are not
limited to, equipment debt, Dealers' past-due Cellular or Paging Service
charges, Dealers' share of expenses related to any special advertising or
promotion in which Dealers specifically agree to participate, and Customer debt
as provided in Section III D hereof.
C. Customer Deposits. Dealer shall accept Customer deposits on behalf
of Ameritech, but in its own name in accordance with Ameritech's then-current
Security Deposit Policy. Customer deposits collected must be in the amount
mandated by the credit class assigned to the Customer by Ameritech, and may be
in the form of cash, check, money order or credit card charge. Dealer will
retain the amounts accepted as Customer deposits in payment of like amounts owed
by Ameritech to Dealer. Upon activation of each Customer who has paid a Customer
deposit to Dealer, Ameritech will debit (or subtract) the amount of the Customer
deposit for that Customer based on the Customer's credit class, from any amounts
owed Dealer by Ameritech, including but not limited to Commission Payments,
Account Maintenance Fees and equipment rebates. If a Customer's check in payment
of a Customer deposit is returned to Dealer for insufficient funds, or if Dealer
incurs a chargeback for a Customer deposit amount charged to a credit card, then
Dealer shall forward to Ameritech the returned check or chargeback advice, as
the case may be, along with an Ameritech form prescribed for this purpose.
Ameritech shall refund to Dealer the amount of the returned check or chargeback,
together with any fees incurred by Dealer on account of the same, in accordance
with Ameritech's then-current Security Deposit Policy.
D. Customer Debt. When Dealers do not comply with Sales procedures, the
risk of bad Customer debt is increased. The Dealer will be charged for Customer
debt as follows:
1. If within fifteen (15) days after activation, (a) a Customer asks
his/her Dealer to cancel Service or (b) lines are never activated and accepted
by the Customer, and in either case the Dealer fails to notify Ameritech within
the same period, then the Dealer will be charged for any activation charges
incurred up to a maximum of $35.00 per line, plus any applicable taxes actually
incurred by Ameritech (other than income taxes).
2. If a Dealer does not obtain and maintain complete Forms, and the
Customer fails to pay any Service charges incurred during the first
[CONFIDENTIAL TREATMENT REQUESTED] days after Service is activated, and (after
making reasonable efforts) Ameritech cannot collect the resulting bad debt from
the Customer, then Ameritech will charge back and set off such uncollectible
debt against all Compensation and other amounts which the Dealer otherwise would
have earned for such Sale including but not limited to equipment rebates,
Commission Payments, Account Maintenance Fees, and other applicable Compensation
(if any). However, the Dealer shall have no liability for any uncollectible
debt, which exceeds such Compensation and other amounts.
3. If a Dealer accepts any Customer account payment, not including
Customer deposits (which are covered by Paragraph III C above), and fails to
forward the payment and/or proper identifying information to Ameritech, then
Ameritech will charge back and set off the full amount of the Customer account
payment against any amounts owed to the Dealer, including but not limited to
Compensation and equipment rebates.
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E. Disputes. If Dealer disputes (a) any payment, or (b) Ameritech's
failure to make a payment claimed by the Dealer to be due, it must notify
Ameritech of the dispute in writing within one [CONFIDENTIAL TREATMENT
REQUESTED]: the disputed payment date, in the case of disputed payments, or the
transaction date, in the case of failures to make payment. Disputes raised more
than one hundred eighty (180) days after such date will not be considered. In
order to dispute any payment, or failure to make payment, the Dealer must
present businesslike documentation of the dispute.
F. Payments under $25.00. Ameritech will make payments to Dealer only
once the amount of the payment equals or exceeds Twenty-Five Dollars ($25.00).
Payments of less than $25.00 will be held and accumulated until the earlier of:
the date of the first monthly Compensation statement showing payments due from
Ameritech to Dealer equal to or greater than $25.00, or the first quarterly
Compensation statement after an amount would have been payable by Ameritech, but
for the fact that it was under $25.00.
IV. OTHER
Demo Lines. At the discretion of Ameritech's Area Vice President, Sales
for the Market, and in accordance with Ameritech's Demo policy applicable to
Dealer's Market, each Dealer may maintain one or more Service lines for
demonstration purposes. Demo lines may not be used to make 900 calls, which may
be blocked at Ameritech's discretion. No Compensation (including Commission
Payment, Account Maintenance Fees, and any other applicable Compensation) can be
earned in connection with any Demo Line.
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