EXHIBIT 10.3
AUTHORIZED AGENCY AGREEMENT
BETWEEN
SOUTHWESTERN XXXX MOBILE SYSTEMS, INC.
AND
CELLSTAR, LTD.
THIS AGREEMENT is made and entered into this 17th day of Dec.,
1996, by and between SOUTHWESTERN XXXX MOBILE SYSTEMS, INC. ("SBMS"), acting in
its capacity as general partner of the Dallas SMSA Limited Partnership, and
being a corporation organized and existing under the laws of the States of
Delaware and Virginia with its principal place of business at 00000 Xxxxxxx
Xxxx, Xxxxx 000X, Xxxxxx, Xxxxx 00000, and CELLSTAR, LTD., a Texas limited
partnershipwith its principal place of business at 0000 Xxxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxx 00000 ("AGENT").
W I T N E S S E T H:
--------------------
Whereas, SBMS is involved in the development, establishment and resale of
cellular radio service ("CRS"), which requires the use by CRS subscribers
("Subscribers") of cellular terminal equipment ("CPE");
Whereas, SBMS and/or its Affiliates is or may become involved in the
development and/or sale of other services, including but not limited to long
distance/toll service for CRS Subscribers, paging services, other Commercial
Mobile Radio Services, and competitive landline local exchange and/or long
distance services (collectively referred to as the "Services");
Whereas, SBMS has been granted regulatory authority to provide CRS in the
cellular geographic service area(s) within the Dallas - Ft. Worth and Xxxxxxx -
Xxxxxxx metropolitan statistical areas ("MSA") and desires to provide CRS in
these Areas, as well as other Services in designated areas, through Authorized
Agents, Resellers, Distributors, direct sales and other forms of distribution to
Subscribers;
Whereas, SBMS has adopted and used or intends to adopt and use certain
valuable trademarks and service marks, symbols, logos and other identifying
indicia ("Marks") in the provision of its Services and CPE;
Whereas, AGENT is desirous of selling SBMS' CRS as a nonexclusive,
authorized CRS agent of SBMS and is desirous of selling, installing, providing
warranty service and/or maintaining CPE necessary for Subscribers to utilize
Services;
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THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS ARE
INDICATED IN THIS AGREEMENT BY "[REDACTED]".
Whereas, SBMS and AGENT further agree AGENT shall sell, install, and/or
maintain and provide warranty service for CPE, and is licensed to use certain
identifying trademarks and the like in its business operations, as more
specifically detailed hereinafter.
Now, therefore, in consideration of the mutual promises herein contained,
it is hereby agreed:
1. DEFINITIONS
-----------
Activation. The act of initiating an Authorized Service in or to a
----------
Subscriber's CPE by SBMS.
Affiliate. A person, association, partnership, corporation or joint-stock
---------
company, trust or other business entity however organized ("Person") is an
affiliate of that entity that directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with such
Person. Control shall be defined as (i) ownership of a majority of the voting
power of all classes of voting stock or (ii) ownership of a majority of the
beneficial interests in income and capital of an entity other than a
corporation.
Authorized Services. Those Services provided by SBMS that AGENT is
-------------------
authorized hereunder to sell on behalf of SBMS, including CRS and any other
Services set forth on Exhibit "A" hereto, which shall be amended, from time to
time, as determined by SBMS in its sole discretion.
Area. The Dallas - Ft. Worth and Xxxxxxx - Xxxxxxx metropolitan
----
statistical areas ("MSAs") within which SBMS has applied for and obtained
regulatory authority to provide CRS. The counties generally comprising these
MSAs and any additional counties that may be added to the areas served through
the Dallas SMSA Limited Partnership shall be deemed added to the Area, without
the necessity of an amendment to this Agreement with respect to other Authorized
Services, Area is defined as those Areas in which SBMS is authorized to and is
providing or reselling such Authorized Service, except as may be otherwise
defined or limited on Exhibit "A".
Cellular Radio Service (CRS). Any and all service (including resale of
----------------------------
said service) authorized by the F.C.C under Part 22 of its rules as amended
under the cellular orders set forth in An Inquiry Into the Use of the Bands 825-
845 MHz and 870-890 MHz for Cellular Communications Systems; and Amendments of
Parts 2 and 22 of the Commission's Rules Relative to Cellular Communications
Systems (CC Docket No. 79-318), 86 F.C.C. 2d 469 (1981), modified as set forth
in reconsideration order 89 F.C.C. 2d. 58 (1982), and as further modified as set
forth in reconsideration orders, rules or orders from time to time.
Commercial Mobile Radio Services (CMRS). Any and all services (including
---------------------------------------
resale of said services) that (i) fit the definition of commercial mobile
services pursuant to Section 332 of
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the Communications Act, 47 U.S.C. (S)332, (ii) are subject to regulation as
commercial mobile radio services by the FCC under the orders set forth in
Implementation of Sections 3(n) and 332 of the Communications Act:, Regulatory
Treatment of Mobile Services (CC Docket No. 93-252) or such other orders or
rules as may be in effect from time to time, or (iii) are the functional
equivalent of a commercial mobile service as defined in 47 U.S.C. (S)332. CMRS
shall in any event include CRS, all forms of specialized mobile radio service
(SMR and ESMR), and personal communications services (PCS).
CPE. The cellular terminal equipment needed for using CRS and other
---
Authorized Services.
Marks. Any and all trademarks, service marks, trade names, insignia,
-----
symbols, logos, decorative designs, or the list SBMS owns or is licensed or
sublicensed to use in connection with the Authorized Services or products
relating thereto and which SBMS, in its sole discretion, determines from time to
time that AGENT is authorized to use.
Paging Services. A service provided by a communication common carrier
---------------
engaged in rendering one-way communication.
Reseller. Any person, association, partnership, corporation, joint stock
--------
company, trust, or other entity that purchases bulk quantities of CRS from a
cellular carrier for resale distribution, directly or indirectly, to ultimate
users of CRS.
Subscriber. A customer of an Authorized Service provided by SBMS. Each
----------
CRS telephone number assigned to a customer of SBMS' CRS is deemed to be a
separate Subscriber, regardless of how many CRS telephone numbers may be
assigned to or used by any one customer.
Successor. Any person, association, partnership, corporation, joint stock
---------
company, trust or other entity however organized, that succeeds to or acquires
the rights, title or interests of another.
2. ACKNOWLEDGMENTS AND REPRESENTATIONS
-----------------------------------
SBMS and AGENT acknowledge that they have read this Agreement and
understand and accept the terms, conditions and covenants contained herein as
being reasonably necessary to maintain SBMS' high standards for CRS and other
Services, thereby to protect and preserve the goodwill of SBMS' CRS, Services
and its Marks. AGENT has read and understands the obligations imposed by the
FCC upon CRS licensees and their duties to SBMS as specified in Section 22.9l2
of the FCC's cellular rules.
AGENT acknowledges that SBMS' ability to provide CRS and other Services is
conditioned upon the continuing validity of its FCC operating license(s) and any
other required
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licenses, certificates and permits, and may be affected by state and federal
court decisions and regulatory approvals. SBMS makes no representation
concerning whether said licenses, certificates, and permits will continue to be
valid. AGENT agrees that if SBMS is prohibited from, or otherwise ceases selling
an Authorized Service in the Area, SBMS may declare this Agreement null and void
as to any or all Authorized Services with no penalty.
AGENT acknowledges that it has conducted an independent investigation of
the business of selling CRS and any other Services that it will conduct pursuant
to this Agreement. AGENT recognizes that entry into business as an AGENT of
SBMS involves business risks and the AGENT'S success in such business will
depend primarily upon its abilities and efforts. SBMS expressly disclaims the
making of, and AGENT acknowledges that it has not received or relied upon, any
guaranty, express or implied, as to the amount of commissions or other gross
revenue that it may earn as a result of its agency relationship with SBMS and
acknowledges that it has no knowledge of any representations relating to its
agency relationship with SBMS by an officer, employee or agent of SBMS that are
contrary to the terms herein. AGENT represents to SBMS, as an inducement to its
entry into this Agreement, that AGENT has made no misrepresentations to SBMS in
its application for appointment as a nonexclusive, Authorized Agent of SBMS or
in any other manner.
AGENT and SBMS mutually agree that they shall not have any liability to the
other for any lost profits, consequential, or special damages even if advised of
the possibility of such damages.
3. RELATIONSHIP OF THE PARTIES
---------------------------
SBMS hereby appoints AGENT as a nonexclusive Authorized Agent within the
Area to solicit and contract, on behalf of SBMS, with Subscribers for the
Authorized Services subject to all of the terms and conditions hereof.
During the term of this Agreement or thereafter, SBMS reserves the right
without obligation or liability to AGENT, to market the Authorized Services and
CPE in the same geographical areas served by AGENT, whether through SBMS' own
representatives or through others, including but not limited to, other
Authorized Agents, retailers, Resellers and distributors.
Upon enrollment of a particular Subscriber, that Subscriber shall become a
customer of SBMS, and SBMS shall offer and furnish such customer billing
services and other customer services as SBMS deems appropriate. SBMS shall be
responsible to collect any charges for Authorized Services from Subscribers.
With the sole exception of the Subscribers enrolled by AGENT for the
account of SBMS, with respect to which AGENT acts as agent of SBMS and owes SBMS
the fiduciary and other obligations of an agent to its principal, SBMS and AGENT
acknowledge and agree that their agency relationship arising from this Agreement
does not constitute or create a general agency,
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joint venture, partnership, employment relationship or franchise between them.
The parties agree that personnel employed by AGENT to perform services
under this Agreement are not SBMS employees and AGENT assumes full
responsibility for their acts. Such personnel employed by AGENT shall be
informed that they are not entitled to the provisions of any SBMS' employee
benefits. With respect to such personnel, AGENT shall have sole responsibility
for supervision, daily direction and control. SBMS will not be responsible for
worker's compensation, disability benefits, unemployment insurance and
withholding income taxes and social security for said personnel.
3A. RELATIONSHIP WITH SUB-AGENTS
----------------------------
AGENT warrants that it entered into or may enter into appropriate
agreements with all persons or businesses (other than Agent's own employees)
(subject to the conditions stated below) that sell the Authorized Services on
behalf of AGENT ("Sub-Agent"), and that such agreements are, or will be
sufficient to enable it to comply with all provisions of this Agreement except
those that by their nature would not be applicable to a Sub-Agent. Without
limiting the generality of the foregoing, AGENT understands, convents and agrees
that (i) any Sub-Agent appointed by AGENT must agree to comply with all of the
restrictive covenants in Paragraph 18 of this Agreement and the Confidentiality
Obligations in Paragraph 31 of this Agreement. AGENT may not delegate its
responsibilities under this Authorized Agency Agreement to any Sub-Agent, and
shall remain liable to SBMS pursuant to the terms of this Agreement
notwithstanding any agreement with a Sub-Agent, (ii) AGENT will inform SBMS
within thirty (30) days of the identity of any new Sub-Agent, and SBMS shall
have the right to disapprove any new Sub-Agent that in the sole opinion of
SBMS, reflects adversely upon SBMS or which is or has been associated in any way
with a competitor of SBMS in the Area or, for any reasonable business purpose;
and SBMS shall have the right to request the removal of any Sub-Agent who
breaches the agreements set forth above or whose actions, in the sole opinion of
SBMS, reflect adversely upon SBMS; (iii) AGENT shall inform SBMS prior to any
intended relocation of any of its Sub-Agents, which relocation shall then be
subject to SBMS' approval; (iv) Prior to AGENT'S appointment of a Sub-Agent,
SBMS may request, and AGENT will provide, any further information SBMS deems
necessary with respect to any prospective Sub-Agent. A complete list of all
current Sub-Agents, along with the names of the owners, managers, principals,
officers and directors thereof is attached as Exhibit "D". All existing Sub-
Agents of AGENT who are listed in Exhibit " D" are approved by SBMS except to
the extent the relationship between AGENT and a Sub-Agent is inconsistent with
the agreement; however, any Sub-Agent not listed in Exhibit " D" must be
approved in accordance with the procedure in this Paragraph A. AGENT understands
and agrees that Sub-Agents of AGENT shall not be permitted to use, in any manner
whatsoever, the name, trademarks or service marks of SBMS, unless expressly
agreed in a writing signed by AGENT, SBMS and Sub-Agent. Any unauthorized use
of SBMS' name, trademarks or service marks shall be grounds for immediate
termination of any Sub-Agent agreements.
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4. AGENT RESPONSIBILITIES
----------------------
a. AGENT agrees to provide materials and advertising to actively
promote SBMS' Authorized Services in a quality manner, and appropriate
sales facilities to enhance the sale of SBMS' Authorized Service.
b. AGENT will sell SBMS' Authorized Services to customers by employing
the following techniques (in addition to others): providing
demonstrations of SBMS' Service, explaining its benefits, explaining the
terms and conditions of purchase of the Service, providing sales
literature prepared by SBMS, and training the customer in the use of
SBMS' service. AGENT will offer CRS subject to all of the applicable
terms of SBMS' form of contract for customers. AGENT will offer Services
subject to all terms and conditions established by SBMS for each such
service, which form of contract will be attached hereto as an addendum.
c. AGENT agrees that it must obtain SBMS' prior written approval to (i)
open any locations in addition to those listed in Exhibit "B" and (ii)
must notify SBMS sixty (60) days prior to closing any location listed in
Exhibit "B". However, an amendment of this Agreement shall not be
necessary to subject any new or additional AGENT locations to the terms
and conditions of this Agreement; rather, the opening of such locations
shall automatically subject them to the terms and conditions of this
Agreement. AGENT agrees to establish and maintain installation and
maintenance facilities at the locations set forth in Exhibit "B";
provided that AGENT may request the consent of SBMS to close or
centralize certain of such facilities, which consent shall not be
unreasonably withheld. Agent may, in Agent's discretion, maintain
installation and maintenance facilities at such other locations as AGENT
may establish from time to time, approval of SBMS shall not be
unreasonably withheld, and to furnish high quality and prompt
installation, warranty and maintenance service for all CPE sold by it to
Subscribers. AGENT, at its own expense, shall obtain from the
manufacturer(s) and distributor(s) all required training in the
operation, installation, warranty and maintenance service of CPE. AGENT
shall be obligated to comply with all of the requirements of the Quality
Assurance Program contained in the Certification Training Manual, as
amended from time to time, and with the specific requirements described
in the remainder of this subparagraph (c). AGENT'S installation,
warranty and maintenance service CRS facility shall be required to
obtain certification from the manufacturer(s) of CPE AGENT sells and
AGENT shall be responsible to secure such certifications. AGENT may only
delegate its installation, warranty and maintenance service obligations
hereunder to a subcontractor with the express prior written approval of
SBMS, which approval will not be unreasonably withheld or withdrawn, and
with any approval necessary from each manufacturer and/or distributor of
an approved model of CPE to be sold or leased by AGENT. Such delegation
shall be by written agreement between AGENT and the service
subcontractor. Notwithstanding such agreement with a service
subcontractor,
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AGENT shall remain responsible to SBMS for all installation, warranty
and maintenance service obligations hereunder. AGENT shall reimburse
SBMS for the reasonable cost of installation, repair or warranty which
SBMS, in its sole discretion, deems necessary to have performed at a
facility other than AGENT'S for customers as to whom AGENT fails to
comply with SBMS' standards applicable thereto. Notwithstanding the
foregoing, AGENT's obligations to repair and maintain CPE are subject to
any limitations on AGENT's and/or the manufacturers warranty obligation.
d. AGENT agrees to maintain sufficient liability insurance to protect
SBMS from all claims arising out of the acts, omissions, and/or
representations of AGENT. SBMS shall be named as an additional insured
party on each policy. Such insurance coverage shall be maintained under
one or more policies of insurance from a recognized insurance company
qualified to do business within the Area providing in the aggregate
minimum liability protection of ONE MILLION DOLLARS ($1,000,000.00) per
occurrence for bodily and personal injury and death and ONE MILLION
DOLLARS ($1,000,000.00) per occurrence of property damage. Each such
insurance policy shall provide for not less than thirty (30) days prior
notice to all insured of any modification, cancellation or nonrenewal.
SBMS may, at any time and with ninety (90) days prior notice to AGENT,
require AGENT to increase its coverage of any type of insurance in
reasonable amounts and require different or additional kinds of
insurance, to reasonably reflect inflation, identification of special
risks, changes in law or standards of liability, higher damage awards or
other changes in circumstances. Upon request, AGENT shall furnish SBMS
with a copy of the insurance policy or a binder that demonstrates that
AGENT maintains insurance required as set forth above, such policy or
binder to specifically show SBMS as an additional insured. The
furnishing of such proof of insurance is required within fifteen (15)
days of the execution of this Agreement by AGENT and AGENT agrees to
furnish such proof as soon as prudent after such policies are renewed.
e. AGENT agrees to take all necessary steps to ensure compliance with
AGENT'S obligations under this Agreement by AGENT and its personnel and
any other parties involved in the sale of the Authorized Services by
AGENT, including but not limited to Sub-Agents.
f. AGENT agrees to maintain operations and follow procedures that are
in full compliance with SBMS' requirements as specified in SBMS' Agent
Operations Manual, as amended and distributed from time to time, and to
allow SBMS reasonable access to AGENT'S facilities for inspection. The
SBMS Agent Operations Manual is binding upon AGENT as if fully set forth
herein.
g. For its own account, AGENT agrees to sell CPE to be used by
Subscribers of SBMS' CRS or other end users. AGENT may only offer FCC
approved equipment. AGENT agrees to maintain an inventory of CPE
sufficient to meet reasonable
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anticipated demand by Subscribers which AGENT enrolls. AGENT also agrees
to maintain a minimum inventory of parts. In particular, but without
limitation, AGENT agrees not to use any CPE bearing trademarks similar
to or resembling the Marks of SBMS. Except for any SBMS-owned CPE which
AGENT handles on behalf of SBMS, all CPE sales and leases shall be made
by or on behalf of AGENT for its own account and not as agent for, or
for the account of, SBMS. AGENT may establish sale and lease prices,
fees and charges for the CPE and SBMS shall have no control over such
prices or over AGENT'S CPE. With respect to the sale or lease of AGENT'S
CPE, Subscribers shall be customers of AGENT and SBMS shall have no
responsibility to AGENT or to Subscribers with respect to the sale or
lease of AGENT'S CPE.
h. AGENT agrees that AGENT will at all times faithfully, honestly and
diligently perform its obligations hereunder, and that AGENT will
continuously exert its best efforts to promote and enhance the use of
SBMS' Authorized Services.
i. In the relevant Area, AGENT agrees that it will not, at any time
either during the term of this Agreement, or any extension thereof, (1)
induce, influence or suggest to any Subscriber of SBMS' CRS to purchase
CRS or any other CMRS from another Reseller or provider of CRS or CMRS
or switch to and/or contract with another CRS provider, (2) induce,
influence or suggest to any Subscriber of any other Authorized Service
to purchase a service competing with a service provided or offered by
SBMS from any other provider or Reseller of such competing service,
whether or not the competing service is technologically the same as the
Authorized Service in question. As more fully described in Paragraph 18,
AGENT agrees not to act as a representative or agent of any other
reseller or provider of CMRS in the relevant Area. Notwithstanding any
language to the contrary, AGENT shall have the right to enter into or
continue current provision of Paging Services and other Services that
are not SBMS' Authorized Services as of the date of execution of this
Agreement ("Additional Authorized Services"), provided, however, that in
the event SBMS should enter into the business of providing Paging
Services or other Additional Authorized Services, AGENT and SBMS agree
to negotiate in good faith with respect to AGENT'S provision of such
Paging Services or other Additional Authorized Services.
j. AGENT agrees not to take any action inconsistent with the provisions
of this Agreement and shall use its best efforts to support SBMS'
efforts in providing the Authorized Services to Subscribers.
k. AGENT agrees not to take any action inconsistent with, and agrees to
support SBMS' efforts before legal or regulatory authorities regarding
any modification of rates.
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l. AGENT agrees that during and after the term of this Agreement, AGENT
will not reveal, divulge, make known, sell, exchange, give away, or
transfer in any way any part of its list of Subscribers or use such
information for any purpose other than (i) AGENT (but no other successor
business entity) maintaining such periodic contact with Subscribers as
is required for warranty service, installation or maintenance of CPE,
(ii) the resolution of disputes between AGENT (but no other corporate
entity) and Subscribers relating to CPE charges and (iii) AGENT (but no
other corporate entity) business activities unrelated to CRS, CMRS, or
any other Authorized Services; provided, however, AGENT shall be under
no such limitation to the extent such Subscriber list or information
known to AGENT regarding such Subscriber list becomes available to any
third party in a manner destroying its nature as a trade secret, other
than through the fault of AGENT and, provided further, that AGENT shall
be under no restriction regarding the use of such information as long as
such use is consistent with the terms of this Agreement.
m. AGENT agrees to advertise association with SBMS' Authorized Services
as an Authorized Agent of SBMS, pursuant to any written procedures SBMS
may publish from time to time.
n. AGENT agrees to use its best efforts to install and maintain CPE for
Subscribers referred to AGENT by SBMS' direct sales force and sales
associates for installation and maintenance on a "first come, first
serve basis", in accordance with SBMS standards established from time to
time.
5. SBMS' RESPONSIBILITIES
----------------------
SBMS will:
a. Upon approval, and subject to compliance with procedures and
guidelines established from time to time, SBMS will furnish the
Authorized Services to Subscribers.
b. Secure any necessary regulatory approvals to conduct the Authorized
Services.
c. Establish the rates, terms, and conditions of the sale of its
Authorized Services to Subscribers.
d. Establish the administrative procedures and guidelines for sale of
Authorized Services, enrollment of Authorized Services Subscribers,
and customer service provided to Subscribers.
e. Promote SBMS' Authorized Services and provide promotional literature
as
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SBMS deems necessary and appropriate. SBMS may advertise SBMS'
Authorized Services from time to time if it deems necessary and
appropriate.
f. Provide a reasonable amount of training on sales of SBMS' Authorized
Services and administrative procedures associated with the enrollment
of Subscribers.
g. Xxxx Subscribers for SBMS' Authorized Services charges and provide
customer service and assistance, including collection of Authorized
Services charges.
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6. CPE BEARING SBMS' MARKS
-----------------------
AGENT shall not have the right, except after SBMS' approval, to sell
CPE bearing SBMS' Marks to any person or entity other than a Subscriber to whom
AGENT has sold SBMS' Authorized Service(s) hereunder. This clause is intended
to protect SBMS' Marks and to assure that such Marks are used properly.
7. COMMISSIONS
-----------
SBMS shall pay commissions to AGENT for Subscribers enrolled by AGENT
onto SBMS' Authorized Services. A Subscriber will be deemed to be enrolled only
when the Subscriber's CRS telephone number is installed in CPE and activated by
SBMS. The current commissions and related Authorized Services are defined and
outlined in the attached Exhibit "C." This commission schedule may be revised
or restructured by SBMS in its sole discretion, upon thirty (30) days advance
written notice to AGENT or by mutual agreement of the parties at any time.
AGENT recognizes that SBMS' ability to sell the Authorized Services
may be affected by state and federal court decisions and state and federal
regulatory approvals. AGENT agrees that if SBMS is prohibited from, or
otherwise ceases, selling the Authorized Services in the Area, SBMS may declare
this Agreement null and void with no penalty.
Commissions shall only continue to accrue as long as this Agreement is
in effect, and the expiration or termination of this Agreement shall effectively
terminate AGENT'S right to any further commissions that would otherwise accrue
after the date of expiration or termination. Subscriber activation commissions
shall be debited in the event a Subscriber does not remain continuously active
on SBMS' system for at least that period(s) of time indicated in Exhibit "C."
SBMS may withhold and offset or apply AGENT compensation against 30
days past due amount owed to SBMS. Whenever AGENT fails to comply with any term
hereof or any procedure referenced in this Agreement or AGENT does not provide
complete and/or accurate information concerning Subscribers to whom an
Authorized Service is sold or, if applicable, the CPE is sold or leased, SBMS
shall have the right to withhold all or a portion of any compensation or other
amount otherwise payable hereunder to AGENT with respect to such Authorized
Service or if applicable, CPE.
8. USE OF MARKS BY AGENT
---------------------
Periodically SBMS will publish a list of the Marks AGENT is licensed
to use under the Agreement. The right granted hereunder shall be the non-
exclusive right of AGENT to use the Marks solely in the Area defined herein.
Such list will also be supplemented with rules and regulations pertaining to the
Marks. AGENT agrees to comply with all such rules and procedures prescribed by
SBMS from time to time during the term of this Agreement. AGENT
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acknowledges that its right to use the Marks is derived solely from this
Agreement and is limited to the identification of AGENT as an agent of SBMS.
AGENT recognizes the great value of the goodwill associated with the Marks, and
acknowledges that the Marks and all rights therein and goodwill pertaining
thereto belong exclusively to SBMS, and that the Marks have a secondary meaning
in the mind of the public. AGENT acknowledges and agrees that all usage of the
Marks by AGENT and any goodwill established thereby shall inure to the exclusive
benefit of SBMS and its Affiliates and that this Agreement does not confer any
goodwill or other interests in the Marks upon AGENT. Any unauthorized use of the
Marks by AGENT, or any use not in compliance herewith, shall constitute an
infringement of the rights of SBMS and its Affiliates in and to the Marks and
shall further constitute a material breach of this Agreement.
AGENT shall use the Marks with such words qualifying or identifying
the agency relationship of SBMS and AGENT as SBMS from time to time shall in its
sole discretion prescribe. AGENT shall not use the Marks as part of any
corporate or trade name or with any prefix, suffix or other modifying words,
terms, designs or symbols, or in any modified form, nor may AGENT use the Marks
in connection with the sale or lease of any unauthorized product or service or
in any other manner not expressly authorized by this Agreement or separately in
writing by SBMS. If AGENT uses SBMS' Marks on any of AGENT'S stationery, other
forms or business cards, AGENT agrees to display the Marks on such stationery,
other forms, and business cards used in connection with Authorized Services in
the manner prescribed by SBMS.
AGENT agrees to obtain such fictitious or assumed name certificates or
registrations as may be required by applicable law, provided the fictitious or
assumed name, if in connection with this Agreement, is approved in writing by
SBMS and SBMS is provided a copy of the certificate and/or registration. If any
fictitious or assumed name used by AGENT includes anything that identifies SBMS
or its Marks, SBMS may at any time require AGENT to cease using such fictitious
or assumed name, and to cancel any corresponding certificate and/or
registration.
If it becomes advisable at any time in SBMS' sole discretion for AGENT
to modify or discontinue use of any Xxxx or substitute one or more additional
trade or service marks to identify its relationship with SBMS or, if applicable,
any CPE, AGENT agrees to comply therewith within a reasonable time after notice
thereof by SBMS and the sole obligation of SBMS in any such event shall be to
reimburse AGENT for the out-of-pocket costs, if any, of complying with this
obligation. In addition, AGENT shall replace obsolete identification signs or
identification material with new signs or identification material should AGENT
adopt new Marks replacing one or more Marks identified by SBMS in such list as
herein before specified.
Upon reasonable notice from SBMS, AGENT shall provide to SBMS written
reports containing such statistical and other types of information as SBMS shall
reasonably request for the purpose of ascertaining or determining compliance
with the licensing provisions of this Agreement. Further, upon SBMS' request,
AGENT shall provide SBMS with samples of all
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advertising and other literature, packages, labels, and labeling prepared by
AGENT which use the Marks or the logos. When using the Marks or the logos under
this Agreement, AGENT undertakes to comply with all laws pertaining to
trademarks in force at any time in the Area defined herein.
9. SBMS' TITLE AND PROTECTION OF SBMS' RIGHTS
------------------------------------------
AGENT agrees that it will not attack the title or any rights of SBMS
in and to the Marks either during the term of this Agreement or thereafter.
SBMS hereby indemnifies AGENT and undertakes to hold AGENT harmless against any
damages and costs from claims or suits arising out of the use by AGENT of the
Marks as authorized in this Agreement, provided that prompt notice is given to
SBMS of any such claim or suit and provided, further, that SBMS shall have the
option to undertake and conduct the defense of any suit so brought and that no
settlement of any such claim or suit is to be made by AGENT without the prior
written consent of SBMS.
AGENT agrees to assist SBMS and SBMS agrees to reimburse AGENT for all
associated reasonable costs to the extent necessary in the procurement of any
protection or to protect any of SBMS' rights to the Marks, and SBMS, if it so
desires, may commence or prosecute any claims or suits in its own name or in the
name of AGENT or join AGENT as a party thereto. When known, AGENT shall
immediately notify SBMS in writing of any infringements or imitations by others
of the Marks that are the same as or similar to those covered by this Agreement.
SBMS shall have the sole right to determine whether any action shall be taken on
account of any such infringements or imitations. AGENT shall not institute any
suit or take any action on account of any such infringements or imitations
without first obtaining the written consent of SBMS.
10. COMPLIANCE WITH LAWS AND GOOD BUSINESS PRACTICES
------------------------------------------------
AGENT shall secure and maintain in force all licenses and permits
required of AGENT and its employees in the enrollment of Subscribers and the
sale of CPE, installation and maintenance of CPE, including without limitation,
all required FCC permits and certifications, if required, and business and sales
tax licenses, and shall conduct its business in full compliance with all state
and federal laws, ordinances and regulations applicable to AGENT'S business.
SBMS shall sell or resell the Authorized Services in accordance with applicable
rules, regulations, statutes and decisions governing such Services.
AGENT shall promptly pay, when due, all taxes and assessments against
any real or personal property used in connection with AGENT'S business, and all
liens or encumbrances of every kind or character created or placed upon or
against any such property, and all accounts and other indebtedness of every kind
incurred by AGENT in the conduct of its business.
AGENT shall comply, at its own expense, with the provisions of all
applicable municipal requirements and those state and federal laws, inclusive of
Executive Orders applicable to AGENT as an employer. AGENT will fully comply
with the provisions of the Federal Occupational Safety and Health Act of 1970
and with any rules and regulations issued pursuant
13
to this Act.
AGENT understands that if AGENT operates its CPE business or
represents SBMS' Authorized Services in a manner that is inconsistent with or
contrary to state or federal law or regulation, such action will reflect
adversely upon the name and goodwill of SBMS and its Affiliates. Therefore,
AGENT agrees to comply, if applicable, with Part 22 of the FCC rules, and all
tariffs, other governmental rules and procedures in existence relating to the
sale of the Authorized Services and the sale, lease, warranty service and the
conduct of AGENT'S CPE business hereunder as well as any rules and procedures
relating to such matters reasonably prescribed from time to time by SBMS. AGENT
shall be responsible to familiarize itself with the laws and regulations
applicable to the conduct of its business.
11. ADVERTISING AND BUSINESS PRACTICES OF AGENT
-------------------------------------------
All advertising and promotion by AGENT shall be completely factual and
shall conform to the highest standards of ethical advertising. All advertising
and marketing materials that AGENT desires to use in connection with Authorized
Services or CPE and that have not been prepared by or previously approved by
SBMS must be submitted to SBMS for approval prior to use.
AGENT agrees that it will not begin its advertising and promotion without
SBMS' prior written consent.
AGENT shall notify SBMS in writing within five (5) days of the commencement
of any material action, suit or proceeding, and of the issuance of any order,
writ, injunction, award or decree of any court, agency of other governmental
instrumentality, involving AGENT in connection with any business conducted by
AGENT on behalf of SBMS hereunder.
12. AGENT'S BUSINESS RECORDS
------------------------
AGENT agrees to create and to maintain at its principal office and
preserve for three years from the date of their preparation, full, complete and
accurate records of its business conducted pursuant to this Agreement. Such
records shall include, without limitation, records of all Authorized Services
enrollments and CPE sales, leases or rentals, and SBMS shall be entitled to
inspect the same upon reasonable notice.
13. ASSIGNMENT
----------
This Agreement is fully assignable by SBMS to any affiliated person or
entity and shall inure to the benefit of any assignee or other legal successor
to the interest of SBMS herein.
AGENT acknowledges that SBMS has entered into this Agreement in
reliance upon the character, business experience and ability of AGENT and its
owner(s), officers and managers and
14
that neither the rights and duties created by this Agreement nor a controlling
interest in the ownership of AGENT may be voluntarily, involuntarily, directly
or indirectly assigned, or otherwise transferred (including, without limitation,
by transfer of capital stock or partnership interests, by merger or
consolidation, by issuance of additional securities representing an ownership
interest in AGENT or convertible thereto, or in the event of the death of a
shareholder or partner of AGENT, by will, in declaration of or transfer in trust
or the laws of intestate succession) without the written approval of SBMS, which
will not be unreasonably withheld, subject to such conditions as SBMS deems
reasonably necessary. Any such assignment or transfer without such approval
shall constitute a breach hereof, subject to termination and convey no rights to
or interests herein. Any change in management, personnel or identity that
materially impairs the ability of AGENT to market the Authorized Services shall
also constitute such a breach. "Control" for purposes hereof is defined in
Paragraph 1 above.
14. TERM AND EXTENSION OF AGENCY RELATIONSHIP
-----------------------------------------
The term of this Agreement shall be three (3) years, commencing upon
final execution of this Agreement. AGENT shall provide to SBMS written notice
of the date on which AGENT initiates operations under this Agreement in the
Area. AGENT agrees that SBMS must provide written consent before AGENT actually
initiates business operations.
Upon expiration of this Agreement, if SBMS plans to continue to sell
Authorized Services in the Area and AGENT has substantially complied with all
provisions of this Agreement, then this Agreement shall automatically extend for
additional one (1) year renewal periods subject to either party's option to
terminate this Agreement upon written notice as outlined below. Upon extension
of their agency relationship, SBMS and AGENT shall continue their business
relationship on the same terms and conditions set forth in this Agreement,
subject to changes required by regulatory authorities or as mutually agreed upon
by SBMS and AGENT. AGENT and/or SBMS shall give the other party written notice
of exercise of its option to terminate this Agreement not less than sixty (60)
nor more than one hundred twenty (120) days prior to the expiration of the
original term or the renewal period.
15. LATE PAYMENTS; SECURITY DEPOSIT
-------------------------------
In the event any amount payable by AGENT to SBMS is more than thirty
(30) days overdue, SBMS may, at its sole option, do one or more of the
following: (i) require AGENT to pay its account in full; (ii) apply
commissions and any other credits or other amounts payable to AGENT to reduce
the AGENT'S account payable balance; (iii) require AGENT to deposit with SBMS
an irrevocable commercial letter of credit, cash or other form of security
acceptable to SBMS in its sole discretion to secure future delays or defaults in
payment; or (iv) thirty days after providing written notice to Agent of the
overdue payment, if payment remains overdue, terminate this Agreement. This
deposit will secure payment of any amounts due under this Agreement or any other
agreement between the parties.
15
AGENT understands that in order to purchase CPE from SBMS (if SBMS
determines that it will sell CPE) other than on a cash on delivery basis, AGENT
may be required to sign security agreements, financing statements and related
documents.
16. TERMINATION OF AGREEMENT
------------------------
A. By Agent
--------
If AGENT is in substantial compliance with this Agreement and SBMS
materially breaches this Agreement and fails to cure such breach within thirty
(30) days after written notice thereof is delivered to SBMS, AGENT may terminate
this Agreement effective thirty (30) days after delivery to SBMS of written
notice thereof and AGENT shall not be bound by the provisions in Xxxxxxxxx 00,
"Xxxxxxxxx Not to Compete."
B. By SBMS
-------
SBMS shall have the right to terminate this Agreement effective upon
thirty (30) days written notice if (a) the FCC Cellular Radio Decisions are not
continued in substantially the same form and such change materially adversely
impacts SBMS' (or an Affiliate's) ability to conduct its business in the Area;
(b) state and/or federal regulatory approval empowering SBMS or its Affiliate to
construct and provide the Authorized Services and/or CPE in the Area is not
granted to either SBMS or an Affiliate, is granted subject to terms and
conditions unacceptable to SBMS or an Affiliate, or is granted under such terms
and conditions that, in SBMS' opinion, materially affect the intended purpose of
this Agreement; or (c) regulatory authorization of the commission schedule of
this Authorized Agent Agreement is made subject to terms and conditions
unacceptable to SBMS or its Affiliates; (d) prior to selling or providing any
Authorized Service to AGENT, SBMS decides not to provide the Authorized Services
in the particular area set forth in Exhibit "A".
Further, SBMS shall have the right to terminate this Agreement effective
upon written notice if: (a) AGENT makes an assignment for the benefit of
creditors; (b) an Order for Relief under Title 11 of the United States Code is
entered by any United States Court against AGENT; (c) a trustee or receiver of
any substantial part of the AGENT'S assets is appointed by any Court; (d) AGENT
sells all or substantially all of AGENT'S inventory or assets other than any
sale in the ordinary course of business.
In addition, SBMS shall have the right to terminate this Agreement
effective upon delivery of notice of termination of AGENT, if AGENT (or one or
more of its owners and affiliates): (i) has made any material misrepresentation
or omission in its application to establish an agency relationship with SBMS or
is convicted of or pleads no contest to a felony or other crime or offense that,
in SBMS' reasonable sole opinion, is likely to adversely affect the reputation
of SBMS or its affiliated companies or the goodwill of the Marks; (ii) attempts
to make an unauthorized assignment of this Agreement; (iii) receives a notice of
violation of the
16
terms or conditions of any license or permit required by AGENT or its
employee(s) in the conduct of AGENT'S Authorized Services and fails to correct
such violation, or to terminate the employment of such employee(s) within the
time period specified in such notice, if any, or within thirty (30) days after
receipt of such notice, whichever first expires; (iv) fails to achieve a minimum
average of twenty-five (25) gross activations for three (3) consecutive months;
or (v) fails to comply with any provision of this Agreement, including any
applicable tariff relating to Authorized Services and/or CPE, and AGENT does not
correct such failure within ten (10) days as to monetary defaults and within
thirty (30) days if non-monetary default after written notice of such failure to
comply is delivered to AGENT.
17. OBLIGATIONS OF AGENT UPON TERMINATION OR EXPIRATION
---------------------------------------------------
AGENT agrees that upon the expiration or termination of this Agreement,
AGENT and its owner(s) and Affiliates will: (i) not thereafter use any actual or
similar Marks, or any actual or similar trade name, service xxxx, trademark,
logo, insignia, symbol or decorative design therefore used by AGENT specifically
in the sale of the Authorized Services in any manner or for any purpose in the
Area except that AGENT and its owner(s) may use or continue to use any trade
name, service xxxx, logo, insignia, symbol or decorative design that AGENT or
its owner(s) lawfully used in any business prior to the date of this Agreement;
and will not utilize for any purpose any actual or similar trade name, trade or
service xxxx or other commercial symbol that suggests or indicates a connection
or association with SBMS or any affiliated company of SBMS, and will not
directly or indirectly, at any time or in any manner, identify itself or any
other business as being associated with SBMS or any affiliated company of SBMS;
(ii) return to SBMS all advertising and marketing materials, forms, and other
materials containing any Xxxx or otherwise identifying or relating to SBMS'
Authorized Services in the Area; (iii) take such action as may be required to
cancel all fictitious or assumed name or equivalent registrations relating to
any Xxxx; or authorize SBMS, and any officer of SBMS, as AGENT'S attorney in
fact, to take such actions as may be required to cancel such fictitious or
assumed name or equivalent registration if AGENT fails or refuses to do so, and
all governmental agencies administering fictitious or assumed name or equivalent
registrations may accept and rely upon appropriate documents executed by SBMS or
its officer canceling any such registration; and (iv) provide SBMS with an
updated list of names, addresses and all other relevant information AGENT then
possesses concerning Subscribers of Authorized Services AGENT has enrolled in
the Area.
18. COVENANT NOT TO COMPETE
------------------------
In consideration of SBMS' grant to AGENT of the right to use the Marks, the
right to advertise affiliation with SBMS as an Authorized Agent of SBMS and the
great value of the goodwill associated with AGENT'S ability to use the Marks,
which rights and value are not available to distributors generally, and in
recognition of the value of specialized, technical knowledge of the cellular
industry and other services imparted by SBMS to AGENT from time to time, AGENT
agrees to be bound by the covenants in this Paragraph 18. Such rights and
17
value shall constitute independent consideration for the covenants in this
Paragraph 18.
Therefore, for value received, as identified above, AGENT agrees that
AGENT, its officers, directors, key employees, and principals, any Affiliate or
the person or persons owning a controlling interest in AGENT or an Affiliate,
shall during the term of this Agreement and except as noted below, and AGENT and
the person or persons owning a controlling interest in AGENT for a period of one
(1) year following the latter of the expiration or termination of this
Agreement;
(1) not, directly or indirectly, induce, influence or suggest to any
Subscriber of SBMS' CRS to purchase CRS or any other CMRS from another
reseller or provider of CRS or CMRS in the Area as existing at the
time of execution of this Agreement;
(2) not directly or indirectly, influence or suggest to any
Subscriber of any other Authorized Service to purchase a competing
service from any other provider or reseller of such competing service
in the Area as existing at the time of execution of this Agreement,
whether or not the competing service is technologically the same as
the Authorized Service in question;
(3) not, under any circumstances or conditions whatsoever, directly
or indirectly, as an individual, partner, stockholder, director,
officer, employee, manager or in any other relation or capacity
whatsoever engage in the sale or promotion of CRS, CMRS, or any other
Authorized Service on behalf of any competing reseller or provider of
such service in the Area as existing at the time of execution of this
Agreement.
(4) not, directly or indirectly, allow any other person, firm or
other entity to use the name, trade name, goodwill or any other assets
or property of AGENT or SBMS in any manner in connection with such
other entity's sale of CRS, CMRS or any other Authorized Service on
behalf of a competing reseller or provider of service in the Area, and
AGENT specifically agrees not to transfer, assign, authorize or
consent to the transfer of an AGENT telephone number to such a
competing person, firm or other entity upon the expiration or
termination of this Agreement.
Notwithstanding any language to the contrary, subject to the obligation to
negotiate in good faith as set forth in Section (4) (i), the restrictive
covenants contained herein shall not operate so as to restrict AGENT from the
business of providing or selling Paging Services or nonexclusive Additional
Authorized Services.
19. SEVERABILITY AND SUBSTITUTION OF VALID PROVISIONS
-------------------------------------------------
18
Except as expressly provided to the contrary herein, each term and
condition of this Agreement, and any portion thereof, shall be considered
severable and if, for any reason, any such provision hereof is held to be
invalid, contrary to, or in conflict with any applicable present or future law,
regulation or public policy in a final, unappealable ruling issued by any court,
agency or tribunal with competent jurisdiction in a proceeding to which SBMS or
its Affiliate is a party, that ruling shall not impair the operation of, or have
any other effect upon, such other portions of this Agreement as may remain
otherwise enforceable which shall continue to be given full force and effect and
bind the parties hereto, although any portion held to be invalid shall be deemed
not to be a part of this Agreement from the date the time for appeal expires, if
AGENT is a party thereto, otherwise upon AGENT'S receipt of a notice of
nonenforcement thereof from SBMS.
To the extent that Paragraphs 4 or 18 contain or impose a restriction
upon AGENT that is deemed unenforceable by virtue of its scope in terms of area,
business activity prohibited and/or length of time, but could be enforceable by
reducing any or all thereof, AGENT and SBMS agree that same shall be enforced to
the fullest extent permissible under the laws and public policies applied in the
jurisdiction in which enforcement is sought. SBMS and AGENT shall mutually
agree to a modification of any invalid or unenforceable term or condition hereof
to the extent required to be valid and enforceable. Such modifications to this
Agreement shall be required only in the Area directly affected by any such
ruling.
20. WAIVER OF OBLIGATIONS
---------------------
SBMS and AGENT may by written instrument unilaterally waive or reduce
any obligation of or restriction upon the other under this Agreement, effective
upon delivery of written notice thereof to the other or such other effective
date stated in the notice of waiver.
Whenever this Agreement requires the consent of a party, such request
shall be in writing and no consent may be unreasonably withheld. All consents
or withholding of consent with reasons therefore shall be in writing.
SBMS and AGENT shall not be deemed to have waived or impaired any
right, power or option reserved by this Agreement (including, without
limitation, the right to demand exact compliance with every term, condition and
covenant herein, or to declare any breach hereof to be a default and to
terminate this Agreement prior to the expiration of its term), by virtue of any
custom or practice of the parties at variance with the terms hereof or any
failure, refusal or neglect of SBMS or AGENT to exercise any right under this
Agreement or to insist upon exact compliance by the other with its obligations
hereunder, including without limitation any rule or procedure, or any waiver,
forbearance, delay, failure or omission by SBMS to exercise any right, power or
option, whether of the same, similar or different nature, with respect to one or
more other Authorized Agents or other forms of distribution.
21. RIGHTS OF PARTIES ARE CUMULATIVE
--------------------------------
19
The rights of SBMS and AGENT hereunder are cumulative and no exercise
or enforcement by SBMS or AGENT of any right or remedy hereunder shall preclude
the exercise or enforcement by SBMS or AGENT of any other right or remedy
hereunder or that SBMS or AGENT is entitled by law to enforce.
20
22. GOVERNING LAW AND LIMITATION OF ACTIONS
---------------------------------------
Except to the extent governed by United States law that preempts state
law, this Agreement shall be interpreted under and governed by the laws of the
State of Texas.
Any lawsuit or other claim arising out of or in connection with this
Agreement or the relationship of the parties must be brought, if at all, within
twenty-five (25) months after the cause of action accrues, regardless of when it
is discovered.
If any suit or action shall be brought to enforce or declare any of
the terms of this Agreement, to terminate this Agreement or to recover any
damages sustained as a result of a default in the performance of any obligations
under this Agreement, or a breach of any of the representations and warranties
herein contained or otherwise pursuant to this Agreement, then the party not
prevailing in such suit or action shall be liable to the prevailing party for
the prevailing party's cost and expenses, including, without limitation, court
costs and reasonable attorney's fees and expert witness' fees (including without
limitations, the value of time spent by in-house personnel), the amount of which
shall be fixed by the court and shall be made a part of any judgment rendered.
The parties agree that such suit or action must be brought, if at all, within
one (1) year after the underlying cause of action accrues.
23. TESTIMONY
---------
Matters relating to this Agreement may be an issue before various
regulatory bodies. Upon reasonable notice AGENT agrees to fully cooperate with
SBMS regarding any such matters including willingly providing employees of AGENT
to testify at appropriate times regarding any aspect of this Agreement or other
related issues. SBMS agrees to reimburse AGENT for reasonable costs expended in
supplying such testimony.
24. BINDING EFFECT
--------------
This Agreement is binding upon the parties hereto, their respective
executors, administrators, heirs, assigns and successors in interest.
All obligations by either party that expressly or by their nature
survive the expiration or termination of this Agreement shall continue in full
force and effect subsequent to and notwithstanding its expiration or termination
and until they are satisfied in full or by their nature.
25. IMPOSSIBILITY OF PERFORMANCE
----------------------------
Neither SBMS nor AGENT shall be liable for loss or damage or deemed to
be in breach of this Agreement if its failure to perform its obligations results
from: (i) compliance with any law, ruling, order, regulation, requirement or
instruction of any federal, state or municipal government or any department or
agency thereof or court of competent jurisdiction; (ii) acts of
21
God; (iii) acts or omissions of the other party; (iv) fires, strikes, embargoes,
war, insurrection or riot. Any delay resulting from any of said causes shall
extend performance accordingly or excuse performance, in whole or in part, as
may be reasonable.
26. INTERPRETATION
--------------
The preambles and exhibits to this Agreement are a part of this Agreement,
which constitute the entire agreement of the parties, and there are no other
oral or written understandings or agreements between SBMS and AGENT relating to
the subject matter hereof.
Nothing in this Agreement is intended, nor shall be deemed, to confer
any rights or remedies upon any person or legal entity not a party hereto,
except for those affiliates of SBMS as may be involved in the provision of one
or more of the Authorized Services, provided that SBMS shall remain liable to
Agent pursuant to the terms of this Agreement.
The headings of the several paragraphs hereof are for convenience only
and do not define, limit or construe the contents of such paragraphs.
The term "AGENT" as used herein is applicable to one or more persons,
a corporation or a partnership. If two or more persons are at any time AGENT
hereunder, whether or not as partners or joint ventures, their obligations and
liabilities to SBMS shall be joint and several.
This Agreement shall be interpreted and governed without regard as to
which party hereto drafted the Agreement.
This Agreement shall be executed in multiple copies, each of which
shall be deemed an original.
27. INDEMNITY
---------
Subject to the provisions of Paragraph 3 and the insurance requirements set
forth in Paragraph 4, each party hereto agrees to defend, indemnify and save
harmless the other party and its successors and assigns and its employees and
agents and their heirs, legal representatives and assigns from any and all
claims or demands whatsoever, including the costs, expenses and reasonable
attorneys' fees incurred on account thereof, that may be made (i) by the
indemnifying party's employees or any other persons for bodily injury or damage
to property occasioned by the acts or omissions of the indemnifying party or its
subcontractor, or the employees or agents of any of them, and (ii) by the
party's employees under workers compensation or similar acts.
22
28. SURVIVAL
--------
The terms, provisions, representations, and warranties contained in
this Agreement that by their sense and context are intended to survive the
performance thereof by either or both parties hereunder shall so survive the
completion of performances and termination of this Agreement, including the
making of any and all payments due hereunder.
29. LICENSES
--------
No licenses, express or implied, under any patents are granted by SBMS
or its Affiliates to AGENT.
30. NOTICES AND PAYMENTS
--------------------
All payments due AGENT shall be made to such address or bank as AGENT
from time to time designates. All notices and reports required to be delivered
by the provisions of the Agreement shall be deemed so delivered three (3)
business days after placement in the United States Certified or Registered Mail,
postage prepaid and addressed to the party to be notified at its most current
principal business address of which the notifying party has been notified. All
reports and other information required by this Agreement shall be directed to
SBMS at the data processing center or the address provided to AGENT from time to
time, or to such other persons and places as SBMS may direct from time to time.
Any required report not actually received or postmarked by SBMS or AGENT during
regular business hours on the date due, shall be deemed delinquent.
31. CONFIDENTIAL INFORMATION
------------------------
Any specifications, drawings, sketches, models, samples, data,
computer programs or documentation, or technical or business information
("Information") furnished or disclosed by SBMS to AGENT hereunder shall be
deemed the exclusive property of SBMS, including title to copyright in all
copyrightable material, and, when in tangible form, shall be returned to SBMS
upon completion or termination of authorized work. Unless such Information is
required to be disclosed by law, was previously known to AGENT free of any
obligation to keep it confidential, or has been or is subsequently made public
by SBMS or a third party, it shall be held in confidence by AGENT, shall be used
only for the purposes hereunder, and may be used for other purposes only upon
such terms and conditions as may be mutually agreed upon in writing. In
addition, the parties hereby agree that Subscriber lists and related information
or data are the exclusive property of SBMS and are to be used by AGENT solely in
the performance of its obligations and duties as described herein and are to be
returned to SBMS upon the termination of this Agreement.
So long as this Agreement is in effect, AGENT shall not publicly disclose
any of the terms of this Agreement without the prior written consent of SBMS,
except as may be required
23
by law or otherwise authorized by the terms of this
Agreement.
AGENT is served with process to obtain Information, AGENT shall
immediately notify SBMS, which shall have the right to seek to quash such
process regardless of any such efforts by Agent.
Unless marked "proprietary," any Information furnished or disclosed by
AGENT to SBMS shall not obligate SBMS to hold such Information in confidence.
32. COVENANT NOT TO SOLICIT EMPLOYMENT
----------------------------------
Agent and SBMS recognize and agree that each party hereto takes a
great deal of time to hire and train employees for its respective business.
Agent and SBMS fully understand the time and expense each party incurs to
obtain qualified personnel, and Agent and SBMS agree not to offer employment to
or employ any of the other party's employees without written consent by a Vice
President or the President of the other party.
33. AUTHORITY
---------
Each of the parties represents, warrants and agrees that it is a
corporation or partnership duly organized, validly existing and in good standing
under the laws of the state of its formation, and has all requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; that the execution and delivery of this
Agreement and the performance hereof have been duly and validly authorized by
all necessary corporate or partnership action; and that the execution and
delivery by it of this Agreement and the performance of this Agreement by it
will not conflict with or result in a breach of or constitute or result in a
default under any of the terms, conditions or provisions of the Articles or
Certificates of Incorporation, By-Laws, or other of its governing instruments or
any judgment, order, decree, law, regulation or ruling of any court or
governmental authority or any agreement, contract, commitment or other
instrument to which it is a party or by which it is bound.
Specifically, AGENT represents and warrants that (i) AGENT is not a
party to any agreement to distribute, promote or otherwise sell CRS, CMRS or any
other Authorized Service ( except Paging Services or Additional Authorized
Services) on behalf of any competing provider, reseller or agent in the Area;
(ii) the execution and delivery by it of this Agreement and the performance of
this Agreement by it will not conflict with or result in a breach or constitute
or result in a default under any of the terms, conditions or provisions of any
agreement between AGENT and any other carrier, reseller or agent of CRS, CMRS or
any other Authorized Service.
34. RIGHT OF FIRST REFUSAL TO SUBLET OR ASSIGN STORE LOCATION(S)
------------------------------------------------------------
A. Preapproval of SBMS as Subtenant or Assignee
24
In connection with negotiating the lease(s) for store location(s) (the
"Lease Premises"), Agent will use its reasonable best efforts to obtain a clause
in each such lease allowing for the free transferability of AGENT'S interest in
the lease(s) in the form of any unrestricted right on the part of Agent to
sublet, assign or otherwise transfer the Leased Premises to SBMS or any
Affiliate thereof.
B. Terms of Sublease or Agreement
The assignment or sublease shall specifically state that rental
payments shall be made directly to the landlord under the lease(s), and
Agent shall indemnify SBMS for any and all defaults under the lease(s) or
any other damage claims, etc. which arose during AGENT'S possession of the
Lease Premises.
C. Right of First Refusal
If, during the term of this Agreement, Agent shall elect to close or
relocate one or more of the sales locations located in any one or more of
the Leased Premises, Agent shall give written notice (the "Relocation
Notice") to SBMS of its desire to close or relocate one or more of its
sales locations on or before sixty (60) days prior to anticipated closure
or relocation of such sales location. The Relocation Notice shall include
a copy of the lease(s) for the particular Leased Premise(s) which are the
subject of the Relocation Notice, together with any and all amendments,
letter agreements, correspondence, etc. with respect to that particular
lease(s).
Within thirty (30) days after the receipt by SBMS of the Relocation
Notice and lease(s), SBMS shall advise Agent in writing whether it intends
to become AGENT'S subleasee or assignee under the lease(s). If the consent
of the landlord is required, Agent shall use its best efforts to obtain
such consent and shall generally cooperate fully with SBMS in connection
with the assignment or subletting of the Leased Premises to SBMS. The terms
and conditions of the sublease or assignment shall be identical to those
set forth in the lease(s).
If SBMS does not advise Agent of its intentions with respect to the
lease(s) within such thirty (30) day period, Agent shall be free to attempt
to sublet or assign the lease(s) to a third party under any terms and
conditions. If Agent should attempt to sublet or assign the Leased
Premises under different terms and conditions than those set forth in the
lease(s). Agent shall first offer in writing the Leased Premises under the
new terms and conditions to SBMS who shall have fifteen (15) days in which
to determine if it will enter a sublease or assignment with Agent under
such different terms or conditions.
35. RIGHT OF FIRST REFUSAL TO PURCHASE STORE LOCATION(S)
----------------------------------------------------
If at any time during the term of this Agreement or upon termination
of this Agreement,
25
Agent receives a bona fide offer to purchase any or all of Agent's store
location(s), from a third party, and Agent desires to accept such offer, Agent
shall cause such offer to be reduced to writing and shall notify SBMS in writing
of such offer. Agent shall provide SBMS thirty (30) business days to exercise a
right of first refusal with respect to AGENT'S store location(s) by delivering
to Agent a written notice indicating SBMS' desire to make the same purchase
under terms and conditions identical in all material respects to the terms and
conditions of the third party's offer. Notwithstanding the foregoing, if a term
of the third party's offer specifies consideration other than cash, SBMS may
exercise its right of first refusal by agreeing to pay an amount in cash
reasonably equivalent to the value of such noncash consideration.
IN WITNESS WHEREOF the parties hereto have executed and delivered this
Agreement in two counterparts on the day and year first above written, AND
HEREBY DECLARE THAT THEY HAVE READ AND DO UNDERSTAND EACH AND EVERY TERM,
-----------------------------------------------------
CONDITION, AND COVENANT CONTAINED IN THIS AGREEMENT OR IN ANY DOCUMENT
----------------------------------------------------------------------
INCORPORATED BY REFERENCE.
--------------------------
CELLSTAR, LTD.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Title: Chairman and Chief Executive Officer
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
--------------------------------------
(Print/Type)
Date: 12/16/96
--------------------------------------
SOUTHWESTERN XXXX MOBILE SYSTEMS, INC.,
AS GENERAL PARTNER FOR:
-------------------------------------------
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------------
Title: VP / GM - DFW
------------------------------------
Name: Xxxxxx Xxxxxxxx
-------------------------------------
(Print/Type)
Date: 12/17/96
--------------------------------------
Approved as to Form: /s/ illegible
26
EXHIBIT A
---------
AUTHORIZED SERVICES
-------------------
1. Commercial Mobile Radio Services (CMRS)
2. CMRS Long Distance
27
EXHIBIT B
---------
AUTHORIZED AGENT LOCATIONS
--------------------------
This Exhibit "B" sets forth the initial locations at which AGENT is
authorized to operate as described in this Agreement.
It is agreed by AGENT and SBMS that if the initial business location(s)
and/or the date upon which Authorized Services operations of AGENT will commence
are not known at the date of execution of this Agreement, the same may be added
from time to time as such information becomes known but no later than the
effective date of AGENT operations.
AGENT shall not change or add business locations without SBMS' prior
written approval. AGENT shall consult with SBMS before initiating any action to
change or supplement any of its business locations.
Any business locations that AGENT opens and operates in the Area shall be
subject to all of the terms of the Agreement, whether or not an amendment is
signed by the parties adding the addresses of any new or different locations.
COUNTIES IN WHICH AGENT IS AUTHORIZED:
Dallas and Tarrant
BUSINESS LOCATIONS:
1. 000 X. Xxxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000
2. 000 X. Xxxxxxx Xxxxxxxxxx, Xxxxxxxxxx, Xxxxx 00000
3. 0000 X. Xxxxxx, Xxxxxxxxx, Xxxxx 00000
4. 0000 XXX Xxxxxxx, Xxxxxx, Xxxxx 00000
5. 0000 Xxxxxxxx, Xx. Xxxxx, Xxxxx 00000
EFFECTIVE DATE OF AGENT OPERATIONS:
(under this Agreement)
-----------------------------------
28
EXHIBIT C
----------
COMMISSION SCHEDULE (DALLAS-FT. WORTH)
TO AUTHORIZED AGENCY AGREEMENT
(THIS EXHIBIT C SHALL BE EFFECTIVE AS OF AUGUST 1, 1996)
CELL STAR, LTD.
COMMISSIONS
-----------
Commissions will be paid by SBMS to AGENT in the following manner:
RATE PLAN COMMISSION
--------- ----------
Xxxx 15 I, Basic [REDACTED]
Weekender III, Xxxx 250 I, III and Corporate [REDACTED]
Xxxx 400 I, III, Xxxx 700 I, III, and Xxxx 950 I, III [REDACTED]
SPECIAL PLAN COMMISSION
------------ ----------
Xxxx 15 III [REDACTED]
Weekender I [REDACTED]
Commissions will be paid within thirty (30) days of the xxxx close date on
paperwork properly completed and received by SBMS by the second business day of
the following month. Incomplete or incorrect paperwork will be returned to the
Agent and will not be paid during the current cycle unless it is received back
by SBMS by the second business day of the following month. Agent inquiries must
be submitted within six (6) months of the activation date to be eligible for
payment.
Subscriber activation commissions shall be debited in full in the event
Subscriber does not remain on SBMS system in the Area for at least [REDACTED]
subsequent to activation. In addition, if Subscriber switches rate plans during
the initial [REDACTED], then the Agent's commission will be debited or credited
by the difference in the two commission rates.
Commissions will not be paid on paperwork SBMS deems to be fraudulent. This
includes, but is not limited to, forged signatures or forged initials. If it is
determined that the Agent, its sales personnel or Sub-Agent committed the
fraudulent activation, then the Agent will be held responsible for any
subsequent charge-offs involved with such activation.
RESIDUALS
---------
Residuals will be paid in the following manner:
ACTIVATIONS RESIDUALS
[REDACTED] [REDACTED]
Residuals will be paid by calculating the appropriate percentage of Agent
originated Subscribers' air-time, features, monthly access charges and long
distance charges for the previous months bills. Taxes, one time fees, directory
assistance and any other miscellaneous charges will not be included in
the calculation of residual payments. Any customer account in a suspend or final
status will not be eligible in the calculation for residuals.
MSA/NW OCTOBER 30, 1996
1
__________
"[REDACTED]" indicates confidential portions omitted and filed separately with
the Commission.
Example: Agent XX activates a customer on the Weekender III ($39.95) rate plan.
The customer also wants detailed air ($3.00) and voice mail ($6.95). During the
month, the customer uses airtime of $125.00 and long-distance of $20.00. Agent
XX has 110 activations for the month. Residual amounts paid to the Agent for
this customer would be [REDACTED], calculated as follows:
Access $ 39.95
Feature (Detailed Air) $ 3.00
Feature (Voice Mail) $ 6.95
Airtime $ 125.00
Long Distance $ 20.00
--------
Total $ 194.90
Times Residual Tier (110 Activations) X [REDACTED]
------------
Residuals [REDACTED]
Agent's right to payment of residuals shall terminate following expiration of
this Agreement, including any renewal period, or as otherwise provided herein.
SBMS, in its sole discretion, may terminate or suspend payment of Agents' entire
residual base if the current month's gross activations [REDACTED]
drop below [REDACTED].
TRADE-IN
--------
Agent may be eligible to receive payment pursuant to the Trade-in Program to be
established by SBMS. Failure to comply with all current Trade-in Program
guidelines may result in Agent's loss of eligibility to participate in the
Trade-in Program. The Trade-in Program may be revised or restructured at any
time by SBMS, in its sole discretion, upon fifteen (15) days advance written
notice to Agent.
VERTICAL SERVICES
-----------------
Vertical Services will be paid in the following manner:
Commissions will be paid on vertical services equal to two times the amount of
the monthly charge for the service. Ninety (90) day vesting will apply to
commissions on vertical services. Promotional and no charge verticals are
compensated at $ 0.00 unless otherwise stated.
CO-OP
-----
Co-op will be paid in the following manner:
Advertising Co-op will be accrued on a monthly basis in the amount of [REDACTED]
per net activation.
Co-op guidelines must be followed in order to receive co-op payments. Co-op
payments shall be due and payable to Agent 30 days following submission of
invoices approved by the SBMS Marketing Department, provided however, no Co-op
invoices will be paid until such amounts have been earned and accrued in Agent's
Co-op account.
MSA/NW OCTOBER 30, 1996
2
__________
"[REDACTED]" indicates confidential portions omitted and filed separately with
the Commission.
SPIFFS
------
The Agent with the lowest churn for the month will receive a special incentive
payment (SPIFF) of [REDACTED] per net activation based on SBMS' commission
report.
The Agent with the highest percentage increase in net activations over the
same month in the previous year (excluding sales due to Agent's Sam's Club
Operations in the previous year) will receive a (SPIFF) of [REDACTED] per net
activation based on SBMS' commission report.
The Agent must be in operation a minimum of [REDACTED] and have [REDACTED] net
activations per month to be eligible to receive any such (SPIFF). Agents will
fall into a [REDACTED] net activation category or [REDACTED] net activation
category, for purposes of the calculation.
NET ACTIVATIONS SPIFF
--------------- -----
[REDACTED] [REDACTED]
GENERAL
-------
In order to receive compensation as set forth in this Exhibit C, SBMS must be
notified and in agreement with any transfer of ownership of store locations.
SBMS reserves the right to withhold or apply commissions and residuals against
overdue receivables owed to SBMS by Agent, or against write-offs assessed by
SBMS resulting from fraudulent paperwork deemed to be caused by the Agent, its
sales personnel, or its Sub-Agent.
Agent must submit customer deposit checks that have been returned to them by a
financial institution (e.g. NSF check, closed account, etc.) to SBMS Dallas
Treasury whose address is 00000 Xxxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, XX 00000,
within two months from the date of the check in order to receive reimbursement.
This Exhibit C may be revised or restructured at any time by SBMS, in its sole
discretion, upon thirty (30) days advance written notice to Agent.
Agent will be compensated for the services and rate plans as set forth in this
Exhibit C. SBMS reserves the right to compensate Agent for all other services
and rate plans not set forth herein in amounts to be determined solely by SBMS.
DEFINITIONS
-----------
Net activations are equal to monthly gross activations less all non-vested
deactivations.
** Non-vested deactivations are deactivations less than 180 days old.
SOUTHWESTERN XXXX MOBILE SYSTEMS ACKNOWLEDGMENT:
-------------------------------- --------------
AGENT: Cellstar, Ltd.
BY: /s/ Xxxxxx X. Xxxxxxxx BY: /s/ Xxxx X. Xxxxxxxxx
----------------------------- -----------------------------------
NAME: XXXXXX X. XXXXXXXX NAME: XXXX X. XXXXXXXXX
--------------------------- ---------------------------------
TITLE: VICE PRESIDENT & TITLE: CHAIRMAN AND CHIEF
GENERAL MANAGER EXECUTIVE OFFICER
-------------------------- --------------------------------
DATE: 12/17/96 DATE: 12/16/96
--------------------------- ---------------------------------
MSA/NW OCTOBER 30, 1996
3
__________
"[REDACTED]" indicates confidential portions omitted and filed separately with
the Commission.
EXHIBIT D
---------
Subagents
Ratel Communications
Xxxx Xxxxxx
3001 D. Airport Freeway
Xxxxxxx, Xxxxx 00000
000-000-0000
Cellular International
Fima Kuperburg
10434 Ryker #C
Xxxxxx, Xxxxx 00000
000-000-0000
Beepers Etc.
Xxx Xxxxxxx/Xxxxxxxxx Xxxxxxxx
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
000-000-0000
Advanced Cellular Technology
Xxxx Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
000-000-0000
Cellular Paging
Xxxxx Adeime
0000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxx 00000
000-000-0000
Cellular Paging
Xxxxx Adeime
0000 X Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxx 00000
000-000-0000
EXHIBIT D
---------
Subagents
Callnet Communication
Xxxxx Xxxxxxx
0000 Xxx Xxxxxxxx
Xxxxxx, Xxxxx 00000
000-000-0000
Radio Shack
Xxxxx Xxxxxx
0000 X Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxx 00000
000-000-0000
Beepers Unlimited
Xxxxx & Xxxxxx Xxxxxx
0000 Xxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxx, Xxxxx 00000
000-000-0000
Universal Paging
Xxxxxx Oa
0000 Xxxxxx Xxxx, Xxxxx 000X
Xxxxxx, Xxxxx 00000
000-000-0000
Prime Time Communications
Xxxxx Xxxxxxx
0000 Xxxxxxx Xxxx Xxxxx, #000
Xxxxxx, Xxxxx 00000
000-000-0000
Protech Electronics
Xxxxx Xxxxx
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
000-000-0000
EXHIBIT D
---------
Subagents
Xxxxx Xxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
000-000-0000
Mobile Advantage
Xxxx Xxxx
000 X Xxxx Xxxxxxxxx
Xxxxxxxx, Xxxxx 00000
000-000-0000
Mobile Electronics
Xxxx Xxxx
000 Xxxx Xxxxxxx 000
Xxxxxxxxx, Xxxxx 00000
000-000-0000
Xxxxxxx Cellular
Xxxxx Xxxxx
0000 X Xxxx Xxxxx
Xxxxxxxx, Xxxxx 00000
000-000-0000
Mobile Communications
Xxx Xxxxxxxxxx
000 Xxxxx Xxxx
Xxxxxxxxxxx, Xxxxx 00000
000-000-0000
Texoma Prime
Xxxxxx Xxxxxxxx
Xxxxx 0, Xxx 000X
Xxxxxxxxxxx, Xxxxx 00000
000-000-0000
EXHIBIT D
---------
Subagents
Golden Key Leasing
Xxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxxx 00000-0000
000-000-0000
Telemart
Xxx Xxxxx
000 Xxxxxxx Xxxx
Xxxxx, Xxxxx 00000
000-000-0000
National Tape
dba National Auto Accessories
Xxxx Xxxxxxxxx, Sole Proprietor
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
000-000-0000
Cellular on the Go
Xxxx Xxxxxx
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
000-000-0000
K.A. Marketing
Xxxxx Xxxxxx
0 Xxxxx Xxxxx Xxx
Xxxxxx, Xxxxx 00000
000-000-0000
000-000-0000
EXHIBIT D
---------
Subagents
Bengo Networks
Xxx Xxxxxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
000-000-0000
Advanced Voice Systems
Xxxxx Xxxxxxx
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
000-000-0000
