EXHIBIT 10.2
SBC WIRELESS AGENCY AGREEMENT
THIS WIRELESS AGENCY AGREEMENT, dated as of October 2, 2000 between
Alloy LLC on behalf of itself and its Controlled Subsidiaries (collectively
referred to as "NEWCO") and SBC Operations, Inc. as Agent on behalf of itself
and its Affiliates, other than NewCo, that make an election to become an agent
hereunder pursuant to SECTION 2.3 (collectively referred to as "AGENT");
WITNESSETH:
WHEREAS, SBC Communications Inc. and BellSouth Corporation have formed
NewCo and transferred all or substantially all of their wireless businesses to
NewCo;
WHEREAS, following such transfers and as a result thereof, NewCo and
its Affiliates own Licenses to provide Wireless Services within the applicable
territories defined herein; and
WHEREAS, NewCo desires to appoint Agent as NewCo's Agent in the Agent's
Service Territory for the sale of Wireless Services; and
WHEREAS, Agent operates a telecommunications business and desires to
act exclusively as agent for NewCo in selling Wireless Services to NewCo's
customers, in Agent's Service Territory, separately and packaged with Agent's
ILEC Services;
NOW THEREFORE, for and in consideration of the premises and other good
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following capitalized terms, whenever used in
this Agreement, have the respective meanings set forth below:
"ACCESS NUMBER" means (i) a telephone number provided to a Subscriber
and associated with a Subscriber's Equipment, or (ii) other means of addressing
individual units of Equipment, including without limitation, internet protocol
addresses, in each case enabling use of a Wireless System.
"ADVANCED SERVICES" means high speed services which enable users to
originate and receive high quality voice and data services.
"AFFILIATE" means with respect to any Person, any Person directly or
indirectly Controlling, Controlled by, or under common Control with such other
Person at any time during the period for which the determination of affiliation
is being made.
"AGENT MARKS" means any trademarks, trade names, service marks, logos,
brands, domain names, insignia, symbols, decorative designs, and other marks,
and all variants and deviates thereof, which Agent or its Affiliates (other than
NewCo and NewCo wireless Controlled Subsidiaries) own or license or sublicense
to use.
"AGENT REPRESENTATIVE" has the meaning given such term in Section 15.1.
"AGENT'S RATES" has the meaning given such term in Section 6.2(b).
"AGENT'S SERVICE TERRITORY" means the Service Territory of the Agent,
as defined in the LLC Agreement.
"AIR-GROUND SERVICE" shall mean air-ground wireless voice and data
service provided pursuant to licenses issued by the FCC pursuant to Subpart G of
Part 22 of the FCC Rules and all air-ground wireless voice and data services
reasonably ancillary thereto.
"APPLICABLE LAW" means all applicable laws, statutes, treaties, rules,
codes (including building codes), ordinances, regulations, certificates, orders
and licenses of, and interpretations by, any Governmental Authority and
judgments, decrees, injunctions, writs, Permits, orders or like governmental
action of any Governmental Authority (including environmental laws and those
pertaining to health or safety).
"BANKRUPTCY LAW" means any bankruptcy, insolvency, reorganization or
other law for the relief of debtors under the applicable jurisdiction.
"BILLING AND COLLECTION AGREEMENT" has the meaning given such term in
Section 6.2(a).
"BRANDING AND ADVERTISING GUIDELINES" means the Branding and
Advertising Guidelines adopted by the parties as of the date hereof, as the same
may be modified from time to time hereafter by mutual agreement of the parties.
"CELLULAR SERVICE" means mobile wireless telephone service provided
pursuant to Wireless Licenses issued by the FCC pursuant to Subpart H of Part 22
of the FCC's rules and all mobile voice and data services reasonably ancillary
thereto.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as amended.
"COMPETING SERVICES" means services that are substantially the same as
the Wireless Services, sold or provided by any Person other than NewCo or an
Affiliate of NewCo, or Agent acting pursuant to this Agreement other than Reflex
Paging.
"CONTROL" (including the correlative meanings of the terms "CONTROLLED
BY" and "UNDER COMMON CONTROL WITH"), as used with respect to any Person, shall
mean the possession directly or
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indirectly, of the power to direct or cause the direction of management policies
of such Person, whether through the ownership of voting securities, by contract
or otherwise.
"CONTROLLED SUBSIDIARY" means, with respect to any Person, a Subsidiary
at least a majority of the Voting Securities and other equity interests of which
are owned, directly or indirectly, by such Person.
"CPE" means customer-provided equipment.
"DEDICATED LINES" means an unswitched line providing user-defined,
point-to-point connections of service.
"DESIGNATED REPRESENTATIVES" shall mean the NewCo Representative and
the Agent Representative.
"DOMESTIC" means the fifty states comprising the United States of
America, the District of Columbia, the U.S. Virgin Islands and the Commonwealth
of Puerto Rico, but excluding all other territories and possessions of the
United States of America.
"EQUIPMENT" means wireless communications equipment, including mobile
and portable radio units and other terminals that are used by Subscribers in
conjunction with Wireless Service and approved by the FCC.
"FCC" means Federal Communications Commission, and any successor
regulatory body in the United States performing the same or similar functions.
"FCC RULES" means any applicable rules and regulations of the FCC.
"GEOGRAPHIC SERVICE AREA" (GSAs) means, as to any Wireless Service of
NewCo, the geographic areas within which NewCo has the authority pursuant to a
License issued by the FCC to offer such Wireless Service. Each geographic area
for which the FCC has issued a separate Wireless License shall be a separate
GSA.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America or any state or other political subdivision thereof including the U.S.
Virgin Islands and the Commonwealth of Puerto Rico, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to, any such government.
"HOME SERVICE" means, with respect to an Access Number, Wireless
Service provided in the Home Service Area applicable to such Access Number.
"HOME SERVICE AREA" means, with respect to an Access Number registered
in any Market, the GSAs (which may be in more than one Market) for which NewCo
provides Wireless Services on the
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terms and conditions applicable to Home Service to more than fifty (50%) percent
of the Access Numbers newly activated by NewCo in such Market during the
preceding calendar year.
"ILEC" means an incumbent local exchange carrier.
"ILEC SERVICES" means any of the following products or services: (a)
Advanced Services, Information Service, InterLATA Service, Telephone Exchange
Service, Electronic Publishing Service, or any other ILEC Service (other than
where such services are used solely as an integral part of Wireless Services);
(b) all current and future ancillary features and services offered in
conjunction with any of the services listed in clause (a), including, but not
limited to, voice mail, caller ID, call waiting, directory listing services,
calling card services, toll calling plans and associated CPE and any successors
thereto; (c) security services, virtual private networks and associated CPE; and
(d) any product or service that emulates or replicates the foregoing utilizing
an IP protocol and the PSTN (including IP telephone, IP fax, unified messaging
and Internet call waiting and associated CPE). For the purpose of this
definition, the terms Information Service, InterLATA Service, Telephone Exchange
Service and Telecommunications Service have the respective meanings set forth in
Section 3 of the Communications Act and the term Electronic Publishing Service
has the meaning set forth in Section 274(h) of the Communications Act.
"INTEGRATED XXXX SUBSCRIBERS" means Subscribers of NewCo for which
Agent provides billing services on behalf of NewCo pursuant to the terms and
conditions of the Billing and Collection Agreement to be entered between the
parties.
"IRDB" means intelligent roaming database.
"LICENSEE" means in respect of any Geographic Service Area for any
Wireless Service, NewCo or the Affiliate of NewCo, in either case, which holds
the applicable Wireless License.
"LLC AGREEMENT" means the Limited Liability Company Agreement of NewCo
dated October 2, 2000, as amended from time to time in accordance with the terms
thereof.
"MARKET" means one or more GSA(s) that are managed by NewCo as a unit
for purposes of administrating provision of Wireless Services.
"MARKS" means collectively the Agent Marks and the NewCo Marks.
"NATIONAL ACCOUNTS" means any Person which offers to subscribe or, at
the time of the initial subscription for wireless services, subscribes for, in
the aggregate, 500 or more Access Numbers in two or more area codes (other than
overlapping area codes).
"NETWORK SERVICES" has the meaning set forth in the LLC Agreement.
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"NEW SERVICES OFFERING" means any new type of Wireless Services not
offered by NewCo as of the date of this Agreement.
"NEWCO MARKS" means any trademarks, trade names, service marks, logos,
brands, domain names, insignia, symbols, decorative designs, and other marks,
and all variants and deviates thereof, which NewCo or its wireless Affiliates
own or license or sublicense to use in the provision of Wireless Services.
"OTHER AGENT" means SBC Communications Inc.
"OTHER SERVICE TERRITORY" means the Service Territory of the Other
Agent, as set forth in the LLC Agreement.
"PACKAGE" means the marketing, sale, resale, or any other mode of
selling Wireless Service in combination, whether for a single price or
otherwise, with any other ILEC Services.
"PACKAGE SUBSCRIBERS" means any Subscriber who purchases Wireless
Services and other ILEC Services in a Package.
"PAGING SERVICE" means the provision of Domestic one and two-way paging
and radiotelephone service pursuant to licenses issued by the FCC pursuant to
Subpart E of Part 22 of the FCC Rules and Subpart S of Part 90 of the FCC Rules
and all one- and two-way paging and radiotelephone services reasonably ancillary
thereto.
"PART 27 SERVICE" means mobile wireless voice and data service provided
pursuant to licenses issued by the FCC pursuant to Part 27 of the FCC Rules and
all mobile voice and data services reasonably ancillary thereto, other than with
respect to the provision of multi-channel video programming service and data
services reasonably ancillary thereto.
"PCS SERVICE" means mobile wireless telephone service provided pursuant
to Wireless Licenses issued by the FCC pursuant to Part 24 of the FCC's rules
regardless of the frequency block designated by the FCC under 47 C.F.R. 24.229
and all mobile voice and data services reasonably ancillary thereto.
"PERMITS" means all licenses (including without limitation Wireless
Licenses) permits, certificates of need, approvals and authorizations from all
Governmental Authorities required to lawfully conduct a business as presently
conducted.
"PERSON" means an individual, partnership, corporation, limited
liability company, limited liability partnership or other business association.
"PSTN" means Public Switched Telephone Network.
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"REFLEX PAGING" means paging services provided over frequencies
available pursuant to Subpart D of Part 24 of the FCC's rules and Subpart P of
Part 90 of the FCC's rules.
"RESALE AGREEMENT" means the Resale Agreement of even date herewith,
between NewCo and Agent.
"RESELLER" means any Person that purchases service from another Person
to be sold directly or indirectly on its own account to a customer where the
Person from which such services are purchased holds a license granted by the FCC
relating to the services being sold to NewCo for resale distribution, directly
or indirectly, to ultimate users of Wireless Service, but shall not include
Agent as a reseller under the Resale Agreement.
"ROAMER" means a Subscriber of a Wireless Service who receives wireless
service in a geographic area outside of such Subscriber's Home Service Area.
"ROAMER FRAUD" means unauthorized use of Wireless Service with respect
to an Access Number assigned to a Subscriber in a geographic area outside such
Subscriber's Home Service Area.
"ROAMING AGREEMENTS" means roaming agreements with unaffiliated third
parties that provide to NewCo the ability for its customers to roam, thereby
receiving wireless services on a Wireless System of such third party.
"SATELLITE SERVICES" means mobile wireless voice and data services
(other than multi-channel video services and data services reasonably ancillary
thereto) provided, via fixed or non-geostationary satellite, pursuant to
licenses issued by the FCC pursuant to Part 25 of the FCC Rules and all mobile
wireless voice and data services reasonably ancillary thereto that are also
provided via fixed or non-geostationary satellites.
"SUBAGENT" means a Person with which Agent has an agreement for the
enrollment of Subscribers to NewCo's Wireless Service through Agent.
"SUBSCRIBER" means any Person who purchases Wireless Service provided
by NewCo pursuant to a valid subscription agreement and is authorized to use
Wireless Service. However, for the purpose of calculating compensation pursuant
to Exhibit B, each Wireless Service Access Number assigned to a customer of
NewCo's Wireless Service is deemed to be a separate Subscriber, regardless of
how many Wireless Service Access Numbers may be used by that customer.
"SUBSIDIARY" means, with respect to any Person, any other Entity of
which (i) more than fifty percent of the voting power of the outstanding Voting
Securities or (ii) more than fifty percent of the outstanding equity securities,
is owned, directly or indirectly, by such Person.
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"VOTING SECURITIES" means any securities entitled to vote in the
ordinary course in the election of directors or of Persons serving in a similar
governing capacity of any partnership, limited liability company or other
entity.
"WIRELESS BUSINESS" means the acquisition, development, ownership and
operation of businesses engaged in the provision of mobile wireless and voice
data services utilizing radio frequencies licensed by the FCC for the provision
of Cellular Service, PCS Service, Wireless Data Service, Air-Ground Service,
Satellite Services and Part 27 Service.
"WIRELESS DATA SERVICE" means the provision of Domestic wireless data
service pursuant to Wireless Licenses issued by the FCC pursuant to Subpart E of
Part 22 of the FCC Rules and Subpart S of Part 90 of the FCC Rules and all
messaging and data services customarily ancillary thereto.
"WIRELESS LICENSE" means a license provided by the FCC to provide a
specified type of Wireless Service.
"WIRELESS SERVICES" means the mobile wireless voice and data services,
products and features offered by NewCo in its Wireless Business, including
without limitation Cellular Service, PCS Service, Wireless Data Service,
Air-Ground Service, Satellite Services and Part 27 Service.
"WIRELESS SYSTEM(S)" means a radio communications system that provides
Wireless Services.
"WIRELINE AGENCY AGREEMENT" means any agreement Agent has or may have
with NewCo pursuant to which NewCo sells Agent's ILEC Services as an agent for
Agent.
ARTICLE II
APPOINTMENT OF AGENT
2.1 Appointment and Acceptance. NewCo hereby appoints Agent as an
authorized agent of NewCo to solicit and contract on behalf of NewCo with
Subscribers for Wireless Service in the Agent's Service Territory, subject to
all of the terms and conditions hereof. Agent recognizes and agrees that NewCo
has appointed or may appoint other authorized Wireless Service agents inside and
outside the Agent's Service Territory and the Other Service Territory, including
retailers and other Persons as distributors of Wireless Service. Agent
recognizes that under current applicable FCC rules for Cellular Service and PCS
Service, NewCo must sell its Wireless Service to Resellers, and has agreed to do
so, including without limitation to the Other Agent. Agent agrees to act as
NewCo's agent in offering Wireless Service to Subscribers. Subject to
SECTION 6.2, all of such offerings shall be at the rates and under the terms and
conditions set forth in this Agreement.
2.2 Ownership of Customers. (a) Subject to Section 6.2, it is
understood and agreed that Subscribers shall be customers of NewCo for Wireless
Service, except to the extent Agent exercises its rights under ARTICLE IX.
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(b) Any Subscriber who purchases a Package shall be a customer of
Agent for all portions of such Package other than Wireless Service.
2.3 Election to Become an Agent. From time to time during the term
of this Agreement, any Affiliate of Agent shall have the right, exercisable at
its discretion by written notice thereof to NewCo, to elect to act as an agent
of NewCo hereunder; provided that upon such election, such Affiliate shall be
bound by and comply with all of the terms and conditions of this Agreement. The
term "Agent" as used herein is applicable to one or more persons and the
singular use includes the plural and the masculine and neuter usages include the
other and the feminine. It is the intent of the parties that the obligations of
the parties hereunder shall be joint and several.
ARTICLE III
GENERAL OBLIGATIONS AND REPRESENTATIONS
3.1 General. NewCo 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 compensation or other revenue that it may earn as a
result of its agency relationship with NewCo. Agent acknowledges that it has
conducted an independent investigation of the business of selling Wireless
Services that it will conduct pursuant to this Agreement. Agent acknowledges
that is has no knowledge of any representations relating to its agency
relationship with NewCo by an officer, employee or agent of NewCo that are
contrary to the terms herein.
3.2 Lost Profits. Agent and NewCo mutually agree that neither
shall have any liability to the other for any lost profits, consequential, or
special damages even if advised of the possibility of such damages.
3.3 Best Efforts. NewCo and Agent mutually agree that each will at
all times faithfully, honestly and diligently perform its obligations hereunder,
and that it will continuously exert its best efforts to promote and enhance the
use of the Wireless Services.
3.4 Licenses. The parties acknowledge that NewCo's ability to
provide the Wireless Services is conditioned upon the continuing validity of its
Affiliate's Wireless Licenses and other Permits, and may be affected by state
and federal court decisions and regulatory approvals. If NewCo fails to maintain
the requisite Permits to operate as Licensee with respect to any Wireless
Service in any given Geographic Service Area, the parties agree that this
Agreement will cease as to such Wireless Service in the affected Geographic
Service Area without penalty to either party; provided that this Agreement shall
remain in full force and effect for all other Wireless Services in such affected
Geographic Service Area.
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ARTICLE IV
AGENT'S USE OF SUBAGENTS
Agent agrees that in the event that Agent enters into agreements with
Subagents, its use of such Subagents shall be subject to the following terms and
conditions:
4.1 Notice to NewCo. Agent shall, upon request of NewCo, notify
NewCo in writing of all Subagents, Subagents' principals and the terms of the
agreement Agent has with each of its Subagents.
4.2 Information to be Provided to Subagents. Agent shall inform
Subagents of all of Agent's contractual obligations pursuant to this Agreement
and at all times keep each Subagent fully apprised of NewCo' s requirements with
respect to Subagents and any procedures relevant to Subagent's sale of Wireless
Service.
4.3 Activations. Subagents will have no direct communications with
NewCo. All communications regarding activations, compensation, procedures, and
any other matters relating to Subagents shall be handled solely by Agent.
4.4 Training. Agent shall be responsible for ensuring that all
Subagents are adequately trained at Agent's premises. Such training shall be as
specified in ARTICLE V.
4.5 Use of Marks. Except as provided in SECTION 13.2, Subagents
are prohibited from using the NewCo Marks in a manner which identifies Subagents
as representatives of NewCo.
4.6 Compliance with Agreement. Subagents must at all times comply
with provisions of this Agreement that may relate to Subagents, including but
not limited to ARTICLES VII, X, XV, XVI, XVII, XXIV, XXVII AND XXVIII and the
provisions of any Exhibit.
4.7 Responsibility of Agent for Acts of Subagents. Subagents are
representatives of Agent only. Agent shall be fully responsible for the acts of
its Subagents. If NewCo determines that any Subagent is not in compliance with
any of the terms and conditions stated herein which NewCo determines are
applicable to Subagents, NewCo may terminate this Agreement.
4.8 No Third Party Beneficiaries. In no event shall Subagents be
third party beneficiaries of this Agreement.
ARTICLE V
TRAINING
5.1 Training by Agent. Agent will provide training to Agent's
employees regarding the processing of customer orders, NewCo's credit policy and
communication of billing information between NewCo and Agent. Training manuals
and user documentation will be provided to Agent by NewCo at Agent's expense.
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5.2 Training Program. (a) NewCo will offer to Agent a training
program for all of Agent's sales and sales support personnel with regard to the
sales and sales order process of NewCo's Wireless Service. Training will be
conducted at Agent's work location or at a location in the GSA prescribed by
NewCo. Training shall include wireless technology for each type of Wireless
Service, system operation, and service features. Unless waived in writing by
NewCo, each salesperson shall complete the required training within thirty (30)
days of employment by Agent. No salesperson is to commence selling NewCo's
Wireless Service until such training is complete. All expenses incurred by
Agent's sales and sales support personnel participating in the training program
shall be borne by the Agent. NewCo agrees to pay its own expenses regarding its
personnel involved in conducting the training program.
(b) In meeting Agent's obligations under this Agreement, Agent
shall retain and train qualified salespersons in the enrollment of Subscribers,
the operation of Wireless Service, and the sale, rental and lease of Equipment.
ARTICLE VI
ADMINISTRATIVE PROCEDURES
6.1 Subscriber Enrollment. NewCo may periodically prescribe
various reasonable procedures to be followed by Agent and its salespersons in
the solicitation of Subscribers, and enrollment of Subscribers. Agent shall
confirm identification of a Subscriber in connection with activating such
Subscribers. NewCo will also furnish Wireless Service literature and then
current forms of agreements Agent shall use in the enrollment of Subscribers.
Agent agrees to comply with all reasonable procedures prescribed by NewCo for
the solicitation of Subscribers, and enrollment of Subscribers. Agent will offer
Wireless Services subject to all of the applicable terms established by NewCo
for each such Wireless Service and set forth in NewCo's form of contract for
customers for the relevant GSA. Subject to the terms of SECTION 6.2(B), Agent
shall communicate Subscriber enrollment and billing information to NewCo in
accordance with procedures established by NewCo from time to time.
6.2 Billing, Credit and Collections. (a) Upon enrollment of a
particular Subscriber by Agent, that Subscriber shall become a customer of NewCo
for Wireless Service and, except as set forth in this SECTION 6.2(A), NewCo
shall xxxx such Subscriber and offer and furnish such customer billing services
as NewCo deems appropriate; provided, however, that as promptly as possible
after the date of this Agreement, NewCo and Agent will cooperate in good faith
to negotiate a Billing and Collection Agreement (the "BILLING AND COLLECTION
AGREEMENT") pursuant to which Agent will generate combined bills for Integrated
Xxxx Subscribers with respect to certain services sold by Agent, including
Wireless Services. Subject to any contrary agreement set forth in the Billing
and Collection Agreement: (i) NewCo shall be responsible for approving
Subscribers for credit; (ii) Agent shall not activate any Subscriber unless and
until such Subscriber has satisfactorily passed a credit check and has paid any
required deposit; (iii) Agent shall not be entitled to compensation for a
Subscriber who fails to pass the credit check or to pay any required deposit;
(iv) the customer shall not become a Subscriber until
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NewCo accepts the contract; and (v) if Agent agrees to enter into the Billing
and Collection Agreement, then Agent will be responsible for collecting any
charges for Wireless Service unpaid by Subscribers for which Agent provides
billing services. If Agent does not enter into the Billing and Collection
Agreement, then NewCo shall be responsible for collecting any charges unpaid by
Subscribers for which NewCo provides billing services.
(b) Notwithstanding the provisions of SECTION 6.2(A), nothing
herein shall be deemed to limit or restrict Agent from offering Wireless
Services in Packages, and from changing the pricing for any Wireless Services
charged to Package Subscribers as Agent may elect in its sole discretion (the
"AGENT'S RATES"), provided that Agent causes NewCo to be paid all applicable
charges hereunder at the retail prices established by NewCo for its Subscribers.
Agent shall comply with all federal, state and local requirements related to
truth-in-billing and any other laws or regulations applicable to NewCo or Agent
in connection with Agent's provision of billing and/or collection services
hereunder.
6.3 Rates. The rates for each type of Wireless Service as of the
date hereof are the same as those offered by NewCo immediately prior to the date
hereof. After the date hereof, NewCo shall consult from time to time with Agent
and the Other Agent as applicable, about the general market conditions for
Wireless Services and solicit Agent's advice about rates for Wireless Services.
In determining such rates, NewCo shall take into account the needs of Agent,
provided that in no event shall Agent's advice on the rates for Wireless
Services be binding on NewCo and provided further that NewCo shall not consult
with either Agent or the Other Agent about Wireless Service rates for any
Geographic Service Area within which Agent or the Other Agent is reselling any
Wireless Service, other than resale in Packages or to National Accounts pursuant
to SECTION 9.1 OR 9.2, respectively, of this Agreement. Subject to prior
consultation, and any required regulatory approval, NewCo may periodically
modify rates for Wireless Service, and shall notify Agent as soon as practicable
of each modification (and in any event not less than sixty (60) days prior to
the effective date of such modification). NewCo must offer to Agent rates for
Wireless Service which are generally available to other agents of Newco. NewCo
may pay compensation less than that shown on Exhibit B for reduced compensation
rate plans that are generally available to other agents of NewCo. In the event
Agent offers any such reduced compensation rate plans, it agrees to accept such
reduced compensation. Agent shall take no action inconsistent with, and agrees
to support, NewCo' s efforts before regulatory authorities regarding any
modification of rates. Modifications of rates may apply to both existing and
future Subscribers. Subject to applicable regulatory rules, Agent may solicit
Subscribers to purchase other products or services, including without limitation
ILEC Services offered by Agent and its Affiliates. NewCo shall owe Agent no
additional compensation for any such additional sales.
6.4 Wireless Service Access Numbers. NewCo will furnish Wireless
Service telephone numbers for Subscribers subject to availability and
technological capacity; provided that NewCo shall (i) use its best efforts to
cause Access Numbers to be available to Agent and (ii) in making available
Access Numbers, fill Agent's requirements in its Agent's Service Territory
without discriminating against Agent relative to NewCo's other distribution
points. In the event technological or other changes or circumstances restrict or
limit NewCo's ability to furnish Wireless Service Access Numbers for
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Subscribers, NewCo shall inform Agent and NewCo shall have no liability to Agent
hereunder for the inability to furnish such Access Numbers, except to the extent
NewCo fails to use its commercially reasonable efforts to furnish such Access
Numbers.
6.5 Technological Changes. If technological changes change the
size of NewCo's coverage area for a type of Wireless Service or impose
restrictions on the use of applicable Equipment, NewCo will provide Agent with
written notification of such changes and Agent will inform Subscribers activated
by Agent after receipt of such notice from NewCo of such changes or
restrictions. Failure by Agent to use good faith efforts to inform Subscribers
activated by Agent after receipt by Agent of such notice from NewCo of such
changes will be considered a material breach of this Agreement.
6.6 Access to NewCo's IT Systems. NewCo shall, to the extent
technologically feasible and commercially reasonable, provide Agent access to
NewCo's new or modified Information Technology Systems ("IT Systems") put into
operation following the date of this Agreement on commercially reasonable terms
to facilitate Agent's real-time pre-ordering, ordering and customer service.
NewCo shall provide Agent with commercially reasonable advance notice of the
planned implementation of any new or modified IT Systems to enable Agent to
facilitate and complete the modification of its own IT Systems and the
interfaces between the two systems to allow the continued uninterrupted
provision of Agent's real-time pre-ordering, ordering and customer service.
ARTICLE VII
DUTIES AND RESPONSIBILITIES OF AGENT REGARDING EQUIPMENT
7.1 General Responsibilities. (a) Unless Agent elects for NewCo to
perform Equipment fulfillment, as provided for in SECTION 7.3 below, Agent
agrees to sell Equipment to be used by Subscribers of NewCo's Wireless Service.
Agent shall be responsible for the warranty service for and installation and
maintenance of such Equipment, either through its own facility or by
subcontracting with another facility. Agent agrees to offer only models of
Equipment for sale that meet quality standards set by the FCC and the
manufacturer's recommendations for use of such Equipment. In addition, Agent
recognizes and agrees that NewCo may, upon written notice to Agent, require that
Agent activate only Equipment that is IRDB-capable and loaded with NewCo's
proprietary IRDB information in any or all of NewCo's GSA's, either with respect
to specified rate plans or all rate plans in a GSA. As New Service Offerings are
developed, NewCo may specify other Equipment requirements or restrictions. At
NewCo's request Agent agrees to submit to NewCo for NewCo's approval the models
of Equipment which it proposes to sell. Agent agrees that NewCo shall have the
right to disapprove any Equipment other than Equipment which Agent purchases
from NewCo. NewCo shall not be obligated to pay any commission to Agent for any
Subscriber whom Agent enrolls on NewCo's Wireless Service with an unapproved FCC
type Equipment or Equipment which does not meet the manufacturer's
recommendations, or Equipment for which NewCo has notified Agent that such
Equipment is not suitable for NewCo Wireless Systems.
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(b) Unless Agent elects for NewCo to perform Equipment
fulfillment, as provided for in SECTION 7.3 below, (i) Subscribers that purchase
Equipment from Agent shall be customers of Agent with respect to such Equipment;
and (ii) NewCo shall have no responsibility to Agent or Subscribers with respect
to the sale, installation, warranty service for or maintenance of Equipment. The
indemnification provisions of Article XXVI of this Agreement shall apply to any
claims or demands against one party which relate to the other party's sale of
Equipment. In the event of an Equipment recall or required upgrade, the party
providing the Equipment shall be responsible for the costs associated with such
recall and/or required upgrade for those Customers to which the Equipment was
sold. The parties agree to exercise all reasonable efforts to obtain the most
advantageous support/compensation available from the Equipment vendor for the
benefit of both parties.
7.2 Inventory. Unless Agent elects for NewCo to perform Equipment
fulfillment, as provided for in SECTION 7.3 below, Agent agrees to maintain an
inventory of approved models of Equipment sufficient to meet reasonably
anticipated demand therefor by the Subscribers whom Agent enrolls. Agent may
purchase Equipment from any available source, including NewCo. Such Equipment
shall be of the style, appearance and quality as to be adequate and suitable for
use with Wireless Service. Such Equipment will be sold to Subscribers in
accordance with all applicable law and this Agreement, including the Branding
and Advertising Guidelines.
7.3 Product Fulfillment. Notwithstanding the foregoing, Agent may
accept as partial consideration for its services hereunder, NewCo's product
fulfillment services. In such case, NewCo shall select Equipment, establish
competitive Equipment prices to be offered, ship Equipment to Subscribers, and
accept returns of Equipment for NewCo's own account. SECTION 7.1 AND 7.2 shall
not apply if Agent has elected to have NewCo perform Equipment fulfillment
pursuant to this SECTION 7.3.
ARTICLE VIII
COMPENSATION
8.1 Compensation Schedule. On the date hereof, NewCo shall pay
compensation to Agent in accordance with existing terms and practices in effect
between Agent and BellSouth Cellular Corp. immediately prior to the date hereof.
Effective January 1, 2001, NewCo shall pay compensation to Agent in accordance
with the compensation schedule in Exhibit B attached hereto and incorporated
herein, which compensation schedule may be amended from time to time as set
forth in Exhibit B and if the parties, after good faith negotiation, mutually
agree amendments are necessary to comply with FCC regulatory accounting rules.
8.2 Effect of Termination. Commissions and any other compensation
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 compensation that would otherwise accrue after the date of
expiration or termination, except that Agent shall receive any remaining
residual payments respecting any Subscribers activated prior to such expiration
or termination.
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8.3 Right to Set Off. NewCo may withhold and offset or apply Agent
compensation against any past due amount owed to NewCo by Agent. 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 a Wireless Service is sold, or, if applicable, to
whom Equipment is sold or leased, NewCo shall have the right to withhold all or
a portion of any compensation or any other amount payable hereunder to Agent
with respect to such Wireless Service, or, if applicable, Equipment.
8.4 Other Remedies. In the event any amount payable by Agent to
NewCo is more than thirty (30) days overdue, NewCo may, at its sole discretion,
do one or more of the following: (i) require Agent to pay its account in full;
(ii) apply Agent compensation and any other credits or other amounts payable to
Agent to reduce Agent's account payable balance; or (iii) require Agent to
deposit with NewCo an irrevocable letter of credit, cash or other form of
security deposit acceptable to NewCo in its sole discretion to secure future
delays or defaults in payment. This deposit will secure payment of any amounts
due under this Agreement.
ARTICLE IX
CESSATION OF AGENCY RELATIONSHIP FOR PACKAGE SUBSCRIBERS
9.1 Package Services. At any time after six (6) months after the
date hereof, Agent may elect in its sole discretion to cease acting solely as
agent hereunder and begin acting as a Reseller under the Resale Agreement for
Agent and NewCo Package Subscribers, by giving NewCo not less than sixty (60)
days' prior written notice of such election under this SECTION 9.1. Such
election may be made only as to all Package Subscribers. Such election shall not
affect Agent's right to act as an Agent for NewCo in selling Wireless Services
not included in a Package.
9.2 National Accounts. At any time after the date hereof, Agent
may elect in its sole discretion to cease acting solely as agent hereunder and
begin acting as a Reseller under the Resale Agreement for National Accounts by
giving NewCo not less than sixty (60) days' prior written notice of such
election under this SECTION 9.2. Such election shall not affect Agent's rights
under this Agreement with respect to Subscribers and Package Subscribers which
are not National Accounts.
9.3 Use of NewCo Marks. After making the election under
SECTION 9.1 OR 9.2, Agent shall continue to have the right, but shall not be
required, to utilize the NewCo Marks pursuant to ARTICLE XIII in the provision
of Packages to Package Subscribers.
9.4 Resale Relationship. NewCo and Agent acknowledge and agree
that, following any election under SECTION 9.1, Agent will be entitled to resell
Wireless Services to any Package Subscriber or any National Account pursuant to
the Resale Agreement. Nothing in this Agency Agreement shall restrict the
ability of Agent or its Affiliates to resell Wireless Services outside of
Agent's Service Territory pursuant to the Resale Agreement.
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ARTICLE X
AGENT'S MARKETING AND SALES ACTIVITIES
Subject to the requirements of this Agreement Agent may sell Wireless
Service and Equipment by any means or method in the Agent's Service Territory,
in its sole discretion from time to time during the term of this Agreement.
ARTICLE XI
[Reserved]
ARTICLE XII
ADVERTISING
12.1 Guidelines. Agent agrees to advertise NewCo's Wireless Service
throughout the Agent's Service Territory in accordance with Branding and
Advertising Guidelines.
12.2 Standards. All advertising and promotion by either Agent or
NewCo with respect to Wireless Services shall be completely factual and shall
conform to the highest standards of ethical advertising. Samples of advertising
and marketing materials which either party is using or intends to use in
connection with ILEC Services provided by the other party or products bearing
the other party's Marks, and which have not been prepared or previously approved
by the other party, shall be submitted to the other party for approval, which
approval shall not be unreasonably withheld or delayed. If written approval is
not received from the other party within five (5) business days after the date
of confirmation of receipt by the other party of such materials, the other party
shall be deemed to have approved the materials. Neither party shall use any
advertising or marketing materials that the other party has disapproved.
ARTICLE XIII
MARKS
13.1 List of NewCo Marks. NewCo will provide a list of NewCo Marks
which Agent is authorized to use under this Agreement in conjunction with the
sale of Wireless Services and products. NewCo will periodically update the list
of NewCo Marks Agent is authorized to use under this Agreement. The most current
updated list will always supersede any previously issued list. Such list will
also be supplemented with rules and regulations pertaining to the NewCo Marks
which Agent agrees to follow within sixty (60) days of receipt of written
notification of such new rules and regulations; provided that, in no event shall
Agent be required to alter advertisements which have
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previously been published until such time as the publication in which such
advertisements or promotions which have been in place expires or otherwise
terminates.
13.2 Right to Use NewCo Marks; Value of NewCo Marks. Agent
acknowledges that its right to use the NewCo Marks is derived solely from this
Agreement, and, if applicable, the Resale Agreement, and is limited to the right
to identify Agent as an agent of NewCo for the sale of Wireless Services or
otherwise or as a Reseller of NewCo's Wireless Services under the Resale
Agreement and to identify products and services bearing the NewCo Marks which
may be sold by Agent. Agent agrees to comply with all rules and regulations
pertaining to such NewCo Marks prescribed by NewCo from time to time during the
term of this Agreement. Agent agrees to maintain the quality and nature of the
goods and services associated with the NewCo Marks as established by NewCo.
Agent recognizes the great value of the goodwill associated with the NewCo
Marks, and acknowledges that it has no interest in the NewCo Marks and all
rights therein and goodwill pertaining thereto belong exclusively to NewCo and
its Affiliates, and that the NewCo Marks have a secondary meaning in the mind of
the public. Agent acknowledges and agrees that all usage of the NewCo Marks by
Agent and any goodwill established thereby shall inure to the exclusive benefit
of NewCo and its Affiliates and that this Agreement does not confer any goodwill
or other interests in the NewCo Marks upon Agent. Any unauthorized use of the
NewCo Marks by Agent, or any use not in compliance herewith, shall constitute an
infringement of the rights of NewCo and its Affiliates in and to the NewCo
Marks. Use of the NewCo Marks by a Subagent of Agent, except to properly
identify products and services bearing the NewCo Marks which may be sold by the
Subagent, shall constitute an infringement of the rights of NewCo in and to the
NewCo Marks.
13.3 Use of NewCo Marks by Agent. Agent shall use the NewCo Marks
with such words qualifying or identifying the agency relationship of NewCo and
Agent as NewCo from time to time reasonably prescribes. Agent shall not use the
NewCo 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 NewCo Marks in connection with the sale of any unauthorized
product or service or in any other manner not expressly authorized by this
Agreement or separately in writing by NewCo. Agent agrees to display the NewCo
Marks on stationery and other forms used in its Wireless Service business in the
manner prescribed by NewCo, to give such notices of registration as NewCo
specifies and to obtain such fictitious or assumed name registrations as may be
required under applicable law. Misuse of the NewCo Marks by Agent or its
Subagents may result in termination of this Agreement or such other remedy,
including withholding of commissions, as set forth in the Branding and
Advertising Guidelines.
13.4 Modification of NewCo Marks. If it becomes advisable at any
time in NewCo's sole discretion for Agent to modify or discontinue use of any
Xxxx or substitute one or more additional trade or service NewCo Marks to
identify its relationship with NewCo or any Equipment, Agent agrees to comply
therewith within a reasonable time after notice thereof by NewCo. In addition,
Agent shall replace identification signs or identification material with new
signs or identification material.
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13.5 Protection of Rights in the NewCo Marks. (a) Agent agrees that
it will not during the term of this Agreement, or thereafter, attack the title
or any rights of NewCo or its Affiliates in and to the NewCo Marks. NewCo 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 NewCo Marks as
authorized in this Agreement, provided that prompt notice is given to NewCo of
any such claim or suit and provided further, that NewCo or its Affiliates 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 shall be made by Agent without the
prior written consent of NewCo.
(b) Agent agrees to assist NewCo or its Affiliates and NewCo
agrees to reimburse Agent for all associated reasonable costs to the extent
necessary in the procurement of any protection or to protect any of NewCo's or
its Affiliates rights to the NewCo Marks, and NewCo or its Affiliates, if it or
they so desire, may commence or prosecute any claims or suits in its own name or
that of its Affiliates or in the name of Agent with Agent's approval or join
Agent as a party thereto. When known, Agent shall notify NewCo in writing of any
infringements or imitations by others of the NewCo Marks which are the same as
or similar to those covered by this Agreement. NewCo 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 infringement or imitations without first obtaining
the written consent of NewCo.
13.6 Limitation of Use of NewCo Marks. Except as set forth in this
Article XIII, and notwithstanding any other provision of this Agreement to the
contrary:
(a) Under no circumstances will Agent have the right to use any
NewCo Marks outside of the Agent's Service Territory, nor will NewCo have the
right to use Agent Marks outside of the Agent's Service Territory.
(b) After an election under SECTION 9.1 OR 9.2, Agent will have
the right, but not the obligation, to use the NewCo Marks in providing ILEC
Services to Package Subscribers or National Accounts, respectively, in the
Agent's Service Territory, or in related sales and marketing activities directed
toward them.
(c) Upon the Agent's exercise of its election under Section 19.2,
Agent's right and obligation to use the NewCo Marks shall cease.
ARTICLE XIV
PERFORMANCE BY NEWCO
14.1 Provision of Service. NewCo shall continue to provide to
customers each type of Wireless Service it provides as of the date hereof upon
the terms and conditions set forth herein, unless NewCo determines, based on
economic or other business reasons, that it will no longer provide such type of
Wireless Service. NewCo shall obtain, retain and maintain suitable facilities,
Licenses, Permits
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and rights for the operation of its Wireless Systems and its GSAs for so long as
it continues to provide Wireless Services in such GSAs.
14.2 Designated Representative. NewCo shall provide a designated
contact person to Agent for addressing any and all issues that may arise under
this Agreement, and to serve as the initial contact person for any disputes
hereunder pursuant to ARTICLE XXVII (the "NEWCO REPRESENTATIVE").
14.3 Billing and Customer Care. NewCo shall provide billing and
customer care services consistent with such services as of the date hereof. If
Agent and NewCo enter into the Billing and Collection Agreement, Agent will xxxx
Package Subscribers and perform collection relating to such Package Subscribers
in accordance with the terms and conditions of the Billing and Collection
Agreement.
14.4 Compliance with Law; Permits. NewCo shall comply with all
Applicable Law in the performance of its obligations hereunder and in the
provision of Wireless Services to Subscribers. NewCo shall be responsible for
obtaining and maintaining all Permits necessary for such performance. Without
limiting the generality of the foregoing, NewCo shall not take or omit to take
any action that might subject NewCo or any Affiliate thereof to the loss of any
License.
14.5 New Product Development and New Services Offering. During the
term of this Agreement NewCo and Agent may agree to develop and introduce
commercial products that integrate Wireless Services (including New Services
Offering) offered or proposed to be offered by Agent (the "INTEGRATED PRODUCTS")
with ILEC Services offered by Agent. The obligations hereunder shall extend to
Integrated Products that may function and interoperate with Agent's ILEC
Services (but not with those of the Other Agent) or with the Other Agent's ILEC
Services (but not with Agent's ILEC Services), notwithstanding that such
Integrated Products may be redundant with other Integrated Products developed by
NewCo. NewCo shall give Agent written notice in reasonable detail of Integrated
Products that it has committed to develop. The parties will have the right from
time to time to request the participation of the other party in co-development
of an Integrated Product, and the other party will consider any such requests in
good faith, provided that neither party shall have any liability for refusing to
accept any such request.
14.6 Reasonable Cooperation. During the term of this Agreement,
NewCo shall provide Agent and Agent's Affiliates, with all information
reasonably requested by Agent and/or its Affiliates in facilitating compliance
by Agent and/or its Affiliates with all applicable Federal and State regulatory
accounting requirements in connection with the provision of the services
contemplated by this Agreement. NewCo shall also provide all reasonable
cooperation in connection with any annual audit by independent auditors in
connection with any such regulatory accounting requirements, including, without
limitation, the production of the documents necessary to substantiate the
validity of the applicable payment and/or accounting entries in connection with
the services provided by Agent under this Agreement. Without limiting the
generality of the foregoing, Agent shall reimburse NewCo for any reasonable
expenses actually incurred by NewCo in rendering such assistance and in so
cooperating,
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within thirty (30) days following receipt of invoices evidencing such expenses.
Any and all proprietary and confidential information produced for any such the
audit will be subject to a confidentiality agreement between Agent and NewCo as
may be agreed between the parties prior to the conduct of any such audit.
ARTICLE XV
PERFORMANCE BY AGENT
15.1 Designated Representative. Agent shall provide a designated
contact person to NewCo for addressing any and all issues that may arise under
this Agreement, and to serve as the initial contact person for any disputes
hereunder pursuant to ARTICLE XXVII (the "AGENT REPRESENTATIVE").
15.2 Compliance with Law; Permits. Agent shall comply with all
Applicable Law in the performance of its obligations hereunder. Agent shall be
responsible for obtaining and maintaining all Permits necessary for such
performance.
15.3 Business Records. Agent shall preserve for five (5) years from
the date of their preparation full, complete and accurate records of its
business conducted pursuant to this Agreement. At NewCo's request or upon prior
notice to Agent, Agent also agrees to have available at Agent's premises records
of its Subagents conforming to the requirements imposed upon Agent by this
SECTION 15.3. Such records must include, for example, but not be limited to,
records of all Wireless Service enrollment and Equipment sales, installation and
repairs performed at Agent's facilities. Such records may be audited by NewCo at
reasonable times after reasonable notice to Agent, at NewCo's sole cost and
expense, provided that activities incidental thereto shall be conducted during
normal business hours in a manner that does not unduly interfere with Agent's
business.
15.4 Promotion. Agent agrees to provide materials and advertising
to actively promote Wireless Services in the Agent's Service Territory in a
quality manner, and to provide appropriate sales facilities to enhance the sale
of Wireless Service.
15.5 Subscribers' Information. Subject to the terms of ARTICLE IX
hereof, Agent agrees that during and after the term of this Agreement, Agent
will not reveal, divulge, make known, sell, exchange, give away, disclose 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 Equipment, (ii) the resolution of
disputes between Agent (but not other entity's) business activities unrelated to
Wireless Services. Agent acknowledges and agrees that it shall not, at any time
during and after the term of this Agreement, use the list of Subscribers for
purposes of a targeted solicitation of Subscribers to become Authorized Users
under the Resale Agreement.
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ARTICLE XVI
RELATIONSHIP OF NEWCO AND AGENTS
With the sole exception of the Subscribers enrolled by Agent for the
account of NewCo, with respect to which Agent acts as agent of NewCo and owes
NewCo the fiduciary and other obligations of an agent to its principal, NewCo
and Agent acknowledge and agree that their agency relationship arising from this
Agreement does not constitute or create a general agency, joint venture,
partnership, employment relationship or franchise between them. In all dealings
with Subscribers hereunder, public officials and others, Agent shall
conspicuously identify itself as an agent of NewCo in the provision of Wireless
Service and otherwise as an independent business and shall place such notices of
its independent ownership of its business on such forms, stationery, advertising
and other materials as NewCo may reasonably require from time to time. NewCo has
not authorized or empowered Agent to use the Marks except as herein provided and
Agent shall not employ any Xxxx in signing any contract, lease, mortgage,
purchase agreement, negotiable instrument or other legal obligation, or in a
manner that may result in liability of NewCo (or its Affiliates) for any
indebtedness or obligation of Agent. Unless specifically authorized in writing,
neither NewCo nor Agent shall make any express or implied agreements, guarantees
or representations, or incur any debt, in the name of or on behalf of the other,
except as otherwise set forth herein.
ARTICLE XVII
AGENT'S PERSONNEL
AND SUBAGENTS NOT DEEMED NEWCO'S EMPLOYEES OR AGENTS
The parties agree that personnel employed by Agent to perform services
under this Agreement and Subagents of Agent are not NewCo employees and Agent
assumes full responsibility for their acts. With respect to such personnel,
Agent shall have sole responsibility for supervision, daily direction and
control. Agent shall be responsible for worker's compensation, disability
benefits, unemployment insurance and withholding and remitting income and social
security taxes for said personnel, including contributions from them as required
by law. Solely with respect to Subscribers activated hereunder, Agent shall
identify itself as acting on behalf of and as the Agent for NewCo.
ARTICLE XVIII
ASSIGNMENT; CHANGE OF CONTROL
18.1 Assignment. This Agreement is fully assignable by either party
to an Affiliate of such party, provided that the assigning party shall remain
responsible for the performance by the assignee of its obligations under this
Agreement so assigned, to or to any entity which succeeds to all or
substantially all of such party's assets by sale, merger or operation of law,
provided that in no event may NewCo assign its obligations under this Agreement
to any Person not licensed to provide Wireless Services in the applicable GSA.
Except as set forth in SECTION 18.2, any other assignment of this Agreement by a
party shall be subject to the written approval of the other party which approval
shall not be unreasonably withheld. Any assignment or transfer by a party that
is not expressly permitted hereby
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without approval of the other party shall constitute a breach hereof and convey
no rights or interests herein.
18.2 Designation. Without limiting the foregoing, Agent
acknowledges that Affiliates of NewCo are the holders of Licenses hereunder and
the owners and operators of portions of the Wireless Systems that provide
Wireless Services pursuant to this Agreement. NewCo will have the right to
delegate its duties hereunder to such Affiliates to the extent necessary for
such Affiliates to perform NewCo's obligations hereunder, and each such
Affiliate shall assume such obligations to the extent so delegated; provided
that such delegation and assumption shall not relieve NewCo from its obligation
to perform such duties and provided further that such Affiliate shall have the
personnel and other resources reasonably necessary to fulfill the obligations of
NewCo hereunder.
ARTICLE XIX
TERM; TERMINATION OF AGREEMENT
19.1 Term. The term of this Agreement commences on the date hereof
and ends on December 31, 2050, unless extended by mutual agreement of the
parties or terminated in accordance with the terms thereof.
19.2 Termination to Become Pure Reseller. At any time after the
third anniversary of the date hereof, Agent will have the right, exercisable in
its sole discretion, to terminate this Agreement. Agent may exercise its right
hereunder by written notice to NewCo effective sixty (60) days after the date of
such notice.
19.3 Termination by Agent. Agent may terminate this Agreement in
the event NewCo materially breaches any obligation hereunder, provided that, if
such breach is reasonably capable of being cured, NewCo fails to cure such
breach within sixty (60) days after written notice from Agent describing the
nature of such breach in reasonable detail. Following any such termination,
Agent shall be permitted to act as an agent or otherwise for any other provider
of Wireless Services in the GSA in which NewCo provides Wireless Service.
19.4 Termination by NewCo for Regulatory Reasons. NewCo shall have
the right to terminate this Agreement in respect of any type of Wireless Service
(but only to as to the portion of the Agent's Service Territory affected
thereby), effective upon thirty (30) days' written notice in the event that:
(a) a change occurs in Applicable Law relating to such Wireless
Service and such change has a material adverse impact on NewCo's ability to
conduct its business in such portion of the Agent's Service Territory, and NewCo
has delivered to Agent a written opinion to such effect from NewCo's outside
regulatory counsel, in form and substance reasonably acceptable to Agent and
addressed to NewCo and Agent; or
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(b) regulatory approval empowering NewCo or an Affiliate to
construct and provide such Wireless Service in the Agent's Service Territory is
not granted to either NewCo or an Affiliate, is granted subject to terms and
conditions unacceptable to NewCo or an Affiliate, or is granted under terms and
conditions which, in NewCo's reasonable opinion, materially affect the intended
purpose of this Agreement.
19.5 Termination by NewCo for Agent's Breach. NewCo may terminate
this Agreement in the event Agent materially breaches any obligation hereunder,
provided that, if such breach is reasonably capable of being cured, Agent fails
to cure such breach within sixty (60) days after written notice from NewCo
describing the nature of such breach in reasonable detail.
19.6 Termination by Either Party. Either party shall have the right
to terminate this Agreement effective upon written notice if:
(a) the other party 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 the other party;
(c) a trustee or receiver of any substantial part of the other
party's assets is appoint by any Court; or
(d) Agent and Newco cease to be "affiliates" as defined in
Section 3(1) of the Communications Act of 1934, as amended.
19.7 Mutual Agreement. This Agreement may be terminated at any time
by mutual written agreement of the parties.
19.8 Consequences of Termination. Upon termination of this
Agreement pursuant to this ARTICLE XIX:
(a) Agent's rights under the Resale Agreement shall continue;
(b) Agent shall have the right to sell Wireless Service under the
Resale Agreement within the Agent's Service Territory that is not part of a
Package;
(c) Agent shall have the right to offer Competing Service
purchased from third parties, as an Agent or Reseller for such third parties or
otherwise;
(d) NewCo may terminate any Wireline Agency Agreement it has or
may have with Agent and, thereafter, may offer ILEC Services, Network Services
or other services purchased from Agent or from third parties, as an agent or
otherwise.
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(e) Agent shall discontinue use of the NewCo Marks.
ARTICLE XX
[Reserved]
ARTICLE XXI
COVENANT NOT TO COMPETE; EXCLUSIVITY
Agent acknowledges that NewCo has granted the rights herein in material
part in consideration of Agent's agreement, subject to the terms and conditions
of the Resale Agreement, to act exclusively for NewCo with respect to Wireless
Services that are Competing Services. As a consequence, during the term of this
Agreement (and any extensions thereof), subject to SECTIONS 9.1, 9.2 AND 9.4,
Agent agrees that Agent or its Affiliate will not, directly or indirectly, (a)
solicit, sell, offer or accept offers for a Competing Service in the Agent's
Service Territory, (b) induce or refer any actual or prospective Subscriber of
Wireless Service to subscribe to a Competing Service in the Agent's Service
Territory, (c) provide any subscriber leads to a Competing Service in the
Agent's Service Territory, or (d) activate Subscribers through a Reseller or act
as a Reseller of a Competing Service for any third party carrier in any GSA in
which NewCo provides Wireless Service. Without limiting the generality of the
foregoing, it is acknowledged and agreed that during the term of this Agreement,
Agent may act as an agent for the provider of any services or resell any
services that are not Competing Services at the time Agent so acts.
ARTICLE XXII
SEVERABILITY AND SUBSTITUTION OF VALID PROVISIONS
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 either
party 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.
ARTICLE XXIII
WAIVER OF OBLIGATIONS
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NewCo or 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 and 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 therefor shall be in writing. Neither party
makes any guarantees upon which the other may rely, and assumes no liability or
obligation to the other, by granting any waiver, approval or consent to the
other, or by reason of any neglect, delay or denial of any request therefor. Any
waiver granted by either Party shall be without prejudice to any other right
that party may have, will be subject to continuing review, and may be revoked,
at the waiving Party's sole discretion, at any time and for any reason,
effective upon delivery to the other of ten (10) days' prior written notice.
Neither party shall 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
such party to exercise any right under this Agreement or to insist upon exact
compliance by the other with its obligations hereunder.
ARTICLE XXIV
RIGHTS OF PARTIES ARE CUMULATIVE
The rights of NewCo and Agent hereunder are cumulative and no exercise
or enforcement by NewCo or Agent of any right or remedy hereunder shall preclude
the exercise or enforcement by NewCo or Agent of any other right or remedy
hereunder of which NewCo or Agent is entitled by law to enforce.
ARTICLE XXV
CONFIDENTIAL INFORMATION
25.1 Confidential Information. Agent may transmit to NewCo and
NewCo may receive from Agent, certain Confidential Proprietary Information of
Agent relating to the Agent's services, accounts, marketing techniques,
forecasts, or business. NewCo may transmit to Agent, and Agent may receive from
NewCo certain Confidential Proprietary Information of NewCo relating to its
Wireless Services, facilities, equipment or business. For purposes of this
paragraph, Confidential Proprietary Information shall be defined as any
information and documentation marked or labeled as "Confidential" or
"Proprietary" (or similar legend) and any oral information confirmed in writing
within fifteen (15) days after disclosure as "Confidential" or "Proprietary" (or
similar legend) by the disclosing party, including, without limitation, revenue
reports, names and Subscribers billing and usage information, and shall also
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include the terms and conditions of this Agreement. The term "confidential"
herein is meant to include both "confidential information" and "trade secrets"
under New York law and the use of a confidential legend shall not be construed
to be determinative of the status of any information as "confidential
information" or a "trade secret".
25.2 Obligation Not to Disclose. The receiving party shall maintain
the confidentiality of the disclosing party's Confidential Proprietary
Information furnished in oral, visual, written, and/or other tangible form and
shall not disclose such information to any third party, except as authorized by
the disclosing party in writing. To the extent possible, each party further
agrees to keep confidential the terms of this Agreement.
25.3 Standard of Care. The receiving party agrees to restrict
disclosure of the disclosing party's Confidential Proprietary Information to its
employees, agents, attorneys, and representatives who have a "need to know". The
receiving party agrees that such Confidential Proprietary Information shall be
handled with the same degree of care which the receiving party applies to its
own similar confidential information (but in no event less than reasonable
care).
25.4 Precautions. The receiving party agrees to take precautions
necessary and appropriate to guard the confidentiality of the disclosing party's
Confidential Proprietary Information including informing its employees, agents,
attorneys, and representatives who handle such Information that it is
confidential and not to be disclosed to any third party, except as authorized by
the disclosing party in writing.
25.5 Ownership of Information. The receiving party agrees that the
disclosing party's Confidential Proprietary Information is and shall at all
times remain the property of the disclosing party. No use of such Information is
permitted except as otherwise provided herein and no grant under any of the
disclosing party's intellectual property rights is hereby given or intended
including any license implied or otherwise.
25.6 Use. The receiving party agrees to use the disclosing party's
Confidential Proprietary Information only for purposes of fulfilling its
obligations under this Agreement.
25.7 Exceptions. The parties agree to exclude from the provision of
this Agreement and the obligations of confidentiality: Information which the
receiving party already had in its possession without confidential limitation at
the time of disclosure by the disclosing party; information which is
independently developed by the receiving party without breach of this Agreement;
information known or that becomes known to the general public without breach of
the Agreement by the receiving party; and information that is received
rightfully without confidential limitation by the receiving party from a third
party; and information that is disclosed pursuant to lawful process or
applicable regulatory authority.
25.8 Consequences of Termination. Upon termination of this
Agreement, all Confidential Proprietary Information transmitted to the receiving
party by the disclosing party in record bearing media or other tangible form,
and any copies thereof made by the receiving party shall be, at the
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disclosing party's written request, destroyed or returned to the disclosing
party, except that the receiving party shall be entitled to retain a secure copy
of the disclosing party's confidential Proprietary Information for archival
purposes only. The receiving party's obligations under this Agreement to keep
confidential and restrict use of the disclosing party's Confidential Proprietary
Information shall survive such completion or termination of this Agreement for a
period of three (3) years, provided, however, that such obligation shall
continue indefinitely as to any information constituting a trade secret under
applicable law.
ARTICLE XXVI
INDEMNITIES
26.1 Indemnification of NewCo. Agent agrees to indemnify, defend
and hold NewCo harmless against any liability for any claims or demands arising
out of the conduct of business by Agent that are the result of Agent's negligent
or willful act or failure to act, including, but not limited to, any claims or
demands (a) by Agent's employees or any other persons, including but not limited
to Subscribers, for bodily injury, damage to property or other damages caused by
the acts or omissions of the Agent or its subcontractors, or the employees or
agents of any of them, and (b) by Agent's employees under worker's compensation
or similar laws. Agent also agrees to indemnify, defend and hold NewCo harmless
against any liability arising out of any allegedly unauthorized use of a
trademark, patent, copyright, process, idea, method or devise by Agent covered
by this Agreement.
26.2 Indemnification of Agent. NewCo agrees to indemnify, defend
and hold Agent harmless against any liability for any claims or demands arising
out of the conduct of business by NewCo that are the result of NewCo's negligent
or willful act or failure to act, including, but not limited to, any claims or
demands (a) by NewCo's employees or any other persons, including but not limited
to Subscribers, for bodily injury, damage to property or other damages caused by
the acts or omissions of the NewCo or its subcontractors, or the employees or
agents of any of them, and (b) by NewCo's employees under worker's compensation
or similar laws. NewCo also agrees to indemnify, defend and hold Agent harmless
against any liability arising out of any allegedly unauthorized use of a
trademark, patent, copyright, process, idea, method or devise by NewCo covered
by this Agreement.
26.3 Procedures with Respect to Indemnification. All indemnities
created in this Agreement shall include indemnification of the indemnitee's
Affiliates, directors, officers, employees, agents, successors and assigns and
their heirs, legal representatives, and assigns thereof. The indemnification
shall be for all claims arising out of the specific event referred to in this
Agreement which is covered by the indemnification, including all obligations,
actual and consequential damages and costs reasonably incurred in the defense of
any claim, including without limitation reasonable accountant's, attorneys', and
expert witness fees, costs of investigation and proof of facts, court costs, and
other litigation expenses, including, but not limited to, travel and living
expenses. Written notice of claim shall be forwarded promptly by the indemnitee
to the indemnitor and there shall be no settlement of the claim without the
consent of the Indemnitor, which consent shall not be unreasonably withheld. The
applicable indemnitee shall have the right to defend any such claim in which it
is named as a defendant
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at its own cost and expense. The indemnities created by this Agreement shall
continue in full force and effect subsequent to and notwithstanding the
expiration or termination of this Agreement. Provisions for indemnification in
this Agreement are not in lieu of and do not supplant insurance coverage
required in the Agreement, and are not intended to act as insurance.
ARTICLE XXVII
DISPUTE RESOLUTION
27.1 Designated Representatives. Any dispute between the parties to
this Agreement with respect to the execution, interpretation, performance or
non-performance of any provision of this Agreement shall be resolved solely as
specified in this ARTICLE XXVII.
(a) Upon the written request of any party to a dispute, the
Designated Representatives shall commence discussions with one another with the
purpose of endeavoring to resolve such dispute.
(b) The Designated Representatives shall meet as often as
necessary during a thirty (30) day period (or such other time as the parties to
such dispute may agree) to gather and furnish to the other all information with
respect to the matter in issue which is appropriate and germane to its
resolution.
(c) The Designated Representatives shall discuss the problem and
negotiate in good faith in an effort to resolve the dispute without the
necessity of any formal arbitration proceeding relating thereto.
(d) The specific format for such discussions will be left to the
discretion of the Designated Representatives, but may include the preparation of
agreed upon statements of fact or written statements of position furnished to
the other party to such dispute.
27.2 Escalation. If the Designated Representatives cannot resolve
the dispute within the time period allowed under SECTION 27.1, then the dispute
shall be referred to the Chief Executive Officer of each of Agent and the Other
Agent (the "CEOS"), for their review and resolution. If the CEOs are unable to
resolve such dispute, then the parties will continue to operate under this
Agreement as in effect prior to such dispute.
27.3 Filing Actions. Prior to filing or referring any matter to a
court of law or equity, the parties agree to provide the other parties at least
ten business days' notice of the intention to so refer a matter, provided that
the foregoing shall not apply to any request for a preliminary injunction or
temporary restraining order.
27.4 Submission to Jurisdiction; Waiver of Jury Trial. THE PARTIES
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND THE FEDERAL COURT OF THE UNITED STATES OF AMERICA LOCATED IN
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XXX XXXXX XX XXX XXXX SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF
THE PROVISIONS OF THIS AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS
AGREEMENT, AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY
WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING
FOR THE INTERPRETATION OR ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT, THAT IT IS
NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT
OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT THE VENUE THEREOF MAY NOT BE
APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN
OR BY SUCH COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH
RESPECT TO SUCH NEW YORK STATE OR FEDERAL COURT. THE PARTIES HEREBY CONSENT TO
AND GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER
THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT, TO THE FULLEST EXTENT
PERMITTED BY LAW, MAILING OR PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH
ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 28.6 OR IN SUCH OTHER
MANNER AS MAY BE VALID AND SUFFICIENT SERVICE THEREOF.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES
THIS WAIVER VOLUNTARILY AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN
THIS SECTION 27.4.
ARTICLE XXVIII
MISCELLANEOUS
28.1 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York (without regard
to conflicts of law).
28.2 Binding Effect. This Agreement, including the preambles and
Exhibits (as amended), is binding upon the parties hereto, their respective
executors, administrators, heirs, assigns and successors in interest.
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28.3 Force Majeure. Neither NewCo 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 acts of God, 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.
28.4 Survival. The terms, provisions, obligations, 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.
28.5 Licenses. No licenses, express or implied, under any patents
are granted by NewCo or its Affiliates to Agent hereunder.
28.6 Notices and Payments. All payments due Agent shall be made to
such address or bank as Agent from time to time designates. All notices,
consents and reports required to be delivered by the provisions of this
Agreement shall be deemed so delivered: (i) when delivered personally; or (ii)
seventy-two (72) hours after being mailed, registered or certified mail, return
receipt requested, postage prepaid, to the most current principal business
address of which the notifying Party has been notified ("BUSINESS ADDRESS"); or
(iii) one business day after being delivered to a reputable overnight courier
service, prepaid, marked for next day delivery, addressed to the addressee at
the Business Address; or (iv) on the first business day after receipt, if
delivered by facsimile transmission to the FAX number (if any) of the receiving
party, if receipt is confirmed by the addressee either orally or in writing. All
reports, financial records and other information required by this Agreement
shall be directed to such other persons and places as NewCo may direct from time
to time.
28.7 Publicity. Neither party shall initiate any public relations
activities relating to the subject matter of this Agreement, including but not
limited to news releases, news conferences, news briefings or any other type of
function involving reporters, editors or news directors of any news
organizations, without first consulting the other party public relations
personnel.
28.8 Headings. The headings in this Agreement are for convenience
only and shall not be construed to define or limit any of the terms herein.
28.9 Entire Agreement. This Agreement, including the preambles and
exhibits, sets forth the entire Agreement between the parties as to the subject
matter hereof and merges all prior discussions between them, and neither of the
parties shall be bound by any conditions, definitions, understandings, or
representations with respect to such subject matter other than as expressly
provided herein, or as duly set forth subsequent to the effective date hereof in
writing and signed by the duly authorized representatives of both parties.
28.10 References. Any references herein to any law, rule,
regulation, order or other act of a Governmental Authority, or to any agreement
between the parties hereto or their subsidiaries, shall be
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deemed to include a reference to any such law, rule, regulation, order or other
act or any such agreement, in each case as it may be amended or supplemented
from time to time.
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IN WITNESS WHEREOF the parties hereto have executed, sealed and
delivered this Agreement in two counterparts on the day and year first above
written.
ALLOY LLC SBC OPERATIONS, INC.
By: ALLOY MANAGEMENT CORP.,
its Manager
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------------- -------------------------------------
Name: Xxxx X. Xxxxxxx Name: Xxxxxxx Xxxxxxxxxx
Title: Chief Operating Officer Title: Senior Vice President --
Wireline
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EXHIBIT A
[INTENTIONALLY OMITTED]
EXHIBIT B
AGENT COMPENSATION
I
STANDARD UP-FRONT COMPENSATION
Compensation under this section is for Agent's sale of NewCo's standard
voice grade switched Wireless Service, whether or not such service is used by
the Subscriber to transport data or voice (in keeping with standard industry
terminology patterns, hereafter referred to as "Plain Old Wireless Service" or
"POWS"). Compensation for the sale of service options, Wireless Data Services,
IP Data Services, or any other service not offered as of the date of this
Agreement shall be set forth in Section III below. NewCo and Agent agree to
periodically (no less frequently than once per year) assess the commission
structure set forth in this Exhibit B and to consider in good faith any changes
suggested by the other party.
OPTION 1 -- FULL COMMISSION
AGENT SUPPLIES EQUIPMENT
NEWCO will pay AGENT in accordance with the following table for each
new Subscriber enrolled by AGENT in the Service Territory under a POWS rate plan
for which NewCo does not pay reduced compensation as provided for in Paragraph
6.3 of the Agreement. NewCo shall have no obligation to Subscriber with respect
to Equipment.
Average 3 Month Churn Rate Commission
-------------------------- ----------
2.55 or less $214
More than 2.55, but less than or equal to 2.65 $201
More than 2.65, but less than or equal to 2.7 $195
More than 2.7, but less than or equal to 2.8 $184
More than 2.8, but less than or equal to 2.85 $175
More than 2.85, but less than or equal to 2.95 $164
More than 2.95, but less than or equal to 3.05 $153
More than 3.05, but less than or equal to 3.15 $143
More than 3.15, but less than or equal to 3.25 $133
-1-
More than 3.25, but less than or equal to 3.35 $123
More than 3.35, but less than or equal to 3.45 $113
More than 3.45 $104
-2-
Churn Rate is the number of Subscribers activated by Agent ("Agent
Subscribers") who disconnect their service in a calendar month
("Disconnects") divided by the number of active Agent Subscribers on
the first day of the month ("Beginning of Period Subs") plus the number
of active Agent Subscribers on the last day of the month ("End of
Period Subs") divided by two (2) (i.e. (Disconnects/((Beginning of
Period Subs + End of Period Subs)/2))). The Average 3 Month Churn Rate
is the average of the Churn Rates for the three (3) monthly periods
preceding the commission payment date.
A. In order to be paid, AGENT must submit all deposits, xxxxxxx payments and
appropriate paperwork to NEWCO no later than fifteen (15) days from the date the
service request was submitted to NEWCO by the AGENT. No compensation will be
paid unless all paperwork is accurately completed to NEWCO's satisfaction and in
accordance with NEWCO's procedures. Additionally, NEWCO shall not be obligated
to pay any compensation to AGENT for any Subscriber whom AGENT enrolls on
NEWCO's POWS with any unapproved FCC type Equipment, Equipment which does not
meet the manufacturer's recommendations, or Equipment with respect to which
NEWCO has advised AGENT is unapproved by NEWCO. In order to ensure that
compensation is appropriately credited to AGENT's account, AGENT must supply
NEWCO with the correct security code when submitting activations.
If, notwithstanding the above, NEWCO pays AGENT compensation for a Subscriber
before all paperwork is processed, NEWCO may, in its discretion deduct such
payment from amounts otherwise owed to AGENT by NEWCO. If such amount is not
deducted by NEWCO, due to the insufficiency of amounts otherwise owed to AGENT
by NEWCO, such amount shall be paid by AGENT to NEWCO within 30 days after NEWCO
notifies AGENT that the repayment is due. After such deduction or payment is
made, if AGENT submits all completed, appropriate paperwork for such Subscriber
within ninety (90) days from the date of such deduction, NEWCO shall repay to
AGENT the amount due as compensation for such Subscriber.
B. AGENT is responsible for obtaining and remitting to NEWCO the deposit, if
any, required from Subscribers enrolled by AGENT. If NEWCO does not receive such
deposit within thirty (30) days of the Subscriber's activation date, NEWCO may,
in its discretion, deduct the amount of such deposit from amounts otherwise owed
to AGENT by NEWCO. If such amount is not deducted by NEWCO, due to the
insufficiency of amounts otherwise owed to AGENT by NEWCO, such payment shall be
made by AGENT to NEWCO within thirty (30) days after NEWCO notifies AGENT that
the payment is due.
C. If AGENT activates a Subscriber, and on the date of submission of the
Subscriber the equipment is not installed or picked up by the Subscriber, or if
the Subscriber returns the equipment (a "No-install"), AGENT agrees to notify
NEWCO of the No-install by the close of business on the second day (or such
longer reasonable period as may be consistent with Agent's current procedures,
but in no event more than ___ days) following the submission of the activation
to NEWCO. If AGENT fails to notify NEWCO of the No-install within the above
time, AGENT agrees to pay NEWCO, or allow NEWCO to deduct from compensation
otherwise due to AGENT, the sum of $50.00 per No-install to compensate NEWCO for
the costs incurred in processing the No-install. NEWCO shall also have the right
to deduct any compensation which was paid for such a No-install.
D. If AGENT fails to notify a Subscriber of any charges due for NEWCO's POWS,
including activation fees, access charges, or per minute charges, or if AGENT
misrepresents or provides inadequate information about any such charges, the
size of the coverage area, or anything else about NEWCO's POWS to a Subscriber,
NEWCO shall have the right to deduct from commissions otherwise due to AGENT, or
AGENT agrees to pay NEWCO upon demand, an amount equal to any amount which NEWCO
pays to or allows the Subscriber for such charges of which the Subscriber was
not notified or which were misrepresented to the Subscriber. Further, if AGENT
fails to program any Subscriber Equipment correctly and according to
recommendations made and/or standards set by the manufacturer and/or NEWCO,
NEWCO shall have the right to deduct from compensation otherwise due to AGENT,
or AGENT agrees to pay NEWCO upon demand, an amount determined by NEWCO for
correcting such faulty programming.
E. NewCo may, in its sole discretion, impose a reasonable charge (in no event to
exceed twenty-five percent (25%) of the applicable commission) upon Agent in
connection with equipment vendor-initiated Equipment changes initiated by Agent
for a Subscriber.
F. No compensation will be paid to AGENT for numbers activated by, and in the
name of, AGENT, its Subagents, affiliates, employees, any person included in the
definition of AGENT, and the like, if NEWCO determines such activations are for
rental or other resale purposes.
OPTION 2 -- PARTIAL COMMISSION
NEWCO SUPPLIES EQUIPMENT
NEWCO will pay AGENT in accordance with the following table for each
new Subscriber enrolled by AGENT in the Service Territory under a POWS rate plan
for which NewCo does not pay reduced compensation as provided for in Paragraph
6.3 of the Agreement.
Average 3 Month Churn Rate Commission
-------------------------- ----------
2.55 or less $120
More than 2.55, but less than or equal to 2.65 $107
More than 2.65, but less than or equal to 2.7 $101
More than 2.7, but less than or equal to 2.8 $90
More than 2.8, but less than or equal to 2.85 $81
More than 2.85. but less than or equal to 2.95 $70
-2-
More than 2.95, but less than or equal to 3.05 $59
More than 3.05, but less than or equal to 3.15 $49
More than 3.15, but less than or equal to 3.25 $39
More than 3.25, but less than or equal to 3.3 $29
More than 3.35, but less than or equal to 3.4 $19
More than 3.4 $10
A. NEWCO shall supply each new Subscriber referred by AGENT with Equipment
suitable for use with NEWCO'S Cellular Service. NEWCO, for its own account,
subject to conditions established by NEWCO, shall select the Equipment to be
supplied, establish the price for Equipment, ship Equipment to the Subscriber,
and accept Subscriber returns. NEWCO shall also collect deposits, prepare
paperwork, and deliver paperwork to Subscribers for signature.
B. If AGENT fails to notify a Subscriber of any charges due for NEWCO's POWS,
including activation fees, access charges, or per minute charges, or if AGENT
misrepresents or provides inadequate information about any such charges, the
size of the coverage area, or anything else about NEWCO's POWS to a Subscriber,
NEWCO shall have the right to deduct from commissions otherwise due to AGENT, or
AGENT agrees to pay NEWCO upon demand, an amount equal to any amount which NEWCO
pays to or allows the Subscriber for such charges of which the Subscriber was
not notified or which were misrepresented to the Subscriber.
C. No compensation shall be payable for any Subscriber referred by AGENT who
fails to submit any required deposit, and appropriate paperwork to NEWCO no
later than fifteen (15) days from the date NEWCO sends Equipment to such
Subscriber. In order to ensure that compensation is appropriately credited to
AGENT's account, AGENT must supply NEWCO with the correct security code when
submitting activations.
If, notwithstanding the above, NEWCO pays AGENT compensation for a Subscriber
before all paperwork is processed, NEWCO may, in its discretion deduct such
payment from amounts otherwise owed to AGENT by NEWCO. If such amount is not
deducted by NEWCO, due to the insufficiency of amounts otherwise owed to AGENT
by NEWCO, such amount shall be paid by AGENT to NEWCO within 30 days after NEWCO
notifies AGENT that the repayment is due. After such deduction or payment is
made, if AGENT submits all completed, appropriate paperwork for such Subscriber
within ninety (90) days from the date of such deduction, NEWCO shall repay to
AGENT the amount due as compensation for such Subscriber.
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OPTION 3 -- PARTIAL COMMISSION
NEWCO PARTICIPATES IN THE SALES PROCESS
The Parties anticipate that they will make joint sales calls on
commercial customers. NEWCO will pay AGENT $25.00 for each new Subscriber
enrolled by NEWCO, in connection with such a joint sales call, in the ILEC
Territory under a POWS rate plan for which NewCo does not pay reduced
compensation as provided for in Paragraph 6.3 of the Agreement. NewCo shall
supply, as necessary, each new Subscriber so enrolled with Equipment suitable
for use with NewCo's Cellular Service. NewCo, for its own account, subject to
conditions established by NewCo, shall select the Equipment to be supplied,
establish the price for Equipment, ship Equipment to the Subscriber, and accept
Subscriber returns. NewCo shall also collect deposits, prepare paperwork, and
deliver paperwork to Subscribers for signature.
-4-
CONDITIONS APPLICABLE TO ALL OPTIONS
A. The above compensation shall be paid within thirty (30) working days
following the close of the commission cycle in the Market in which the
Subscriber was activated on NEWCO's service. AGENT will not be paid for
Subscribers who subscribe to NEWCO's service outside of any area specified in
this Agreement. NEWCO reserves the right, at any time and from time to time, to
change the period used to determine payment of AGENT compensation. AGENT shall
be notified in writing of any change in such period.
B. If a Subscriber does not complete 180 days of continuous active service (as
defined in Section V of this Exhibit A) in the Market in which the Subscriber
began using NEWCO's service, AGENT shall be required to repay to NEWCO the
amount of compensation paid by NEWCO to AGENT for such Subscriber. Such
repayment may be deducted by NEWCO from amounts otherwise owed to AGENT by
NEWCO. If such amount is not deducted by NEWCO, such repayment shall be made by
AGENT to NEWCO within thirty (30) days after NEWCO notifies AGENT that the
Subscriber has failed to complete 180 days of continuous active service in the
Market in which the Subscriber was activated on NEWCO's service.
C. A Subscriber who is activated or referred by AGENT and has attained 180 days
of continuous active service and who then voluntarily disconnects and reconnects
within a 120 day period shall not be included in AGENT's count of new
Subscribers and NEWCO shall not pay any additional Up-Front compensation to
AGENT for any such Subscriber.
If, notwithstanding the above, NEWCO pays AGENT compensation for a Subscriber
described in the above paragraph, NEWCO may, in its discretion deduct such
payment from amounts otherwise owed to AGENT by NEWCO. If such amount is not
deducted by NEWCO, due to the insufficiency of amounts otherwise owed to AGENT
by NEWCO, such amount shall be paid by AGENT to NEWCO within 30 days after NEWCO
notifies AGENT that the repayment is due. After such deduction or payment is
made, if AGENT submits all completed, appropriate paperwork for such Subscriber
within ninety (90) days from the date of such deduction, NEWCO shall repay to
AGENT the amount due as compensation for such Subscriber.
D. If a Subscriber changes telephone numbers or Equipment, such Subscriber shall
not be included in AGENT's count of new Subscribers because of such change, and
NEWCO shall not pay any additional compensation to AGENT for any such Subscriber
because of such change. Subscribers shall be deemed to have changed telephone
number or Equipment when one person disconnects service, another person
subscribes to the service, but in NEWCO's sole judgment, the second subscription
is used by the original Subscriber. The provisions of this Paragraph shall apply
only to Subscriber enrollment in the Market in which the Subscriber began using
NEWCO's service.
If, notwithstanding the above, NEWCO pays AGENT compensation for a Subscriber
described in the above paragraph, NEWCO may, in its discretion deduct such
payment from amounts otherwise owed to AGENT by NEWCO. If such amount is not
deducted by NEWCO, due to the insufficiency of amounts
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otherwise owed to AGENT by NEWCO, such amount shall be paid by AGENT to NEWCO
within 30 days after NEWCO notifies AGENT that the repayment is due. After such
deduction or payment is made, if AGENT submits all completed, appropriate
paperwork for such Subscriber within ninety (90) days from the date of such
deduction, NEWCO shall repay to AGENT the amount due as compensation for such
Subscriber.
E. A Subscriber who is enrolled by AGENT and has attained 180 days of continuous
active service and who then is disconnected for nonpayment and is subsequently
reconnected shall not be included in AGENT's count of new Subscribers and NEWCO
shall not pay any additional Up-Front compensation to AGENT for any such
Subscriber.
If, notwithstanding the above, NEWCO pays AGENT compensation for a Subscriber
described in the above paragraph, NEWCO may, in its discretion deduct such
payment from amounts otherwise owed to AGENT by NEWCO. If such amount is not
deducted by NEWCO, due to the insufficiency of amounts otherwise owed to AGENT
by NEWCO, such amount shall be paid by AGENT to NEWCO within 30 days after NEWCO
notifies AGENT that the repayment is due. After such deduction or payment is
made, if AGENT submits all completed, appropriate paperwork for such Subscriber
within ninety (90) days from the date of such deduction, NEWCO shall repay to
AGENT the amount due as compensation for such Subscriber.
G. Should NEWCO, in its sole discretion, determine that AGENT has inflated or
otherwise manipulated its count of new Subscribers by falsifying applications,
activating nonexistent Subscribers, activating Subscribers who do not use
minimal amounts of airtime, or by any other means or methods, then NEWCO shall,
in addition to any other rights it may have under this Agreement, have the right
to immediately terminate this Agreement.
II
RESIDUAL COMPENSATION FOR NEW SUBSCRIBERS
ADDED AFTER COMMENCEMENT OF AGREEMENT
NEWCO will pay to AGENT Residual Compensation, as defined below, for all
Subscribers activated by AGENT, under OPTION 1 -- FULL COMMISSION, AGENT
SUPPLIES EQUIPMENT or under OPTION 2 -- PARTIAL COMMISSION, NEWCO SUPPLIES
EQUIPMENT on NEWCO's POWS who activate service on or after the commencement date
of this Agreement as follows:
PERCENTAGE RATE TERM OF PAYMENT
--------------- ---------------
11.25% 12 months
Residual Compensation is equal to the Percentage Rate times the ACCESS and
AIRTIME. ACCESS and AIRTIME is the sum of the fixed monthly charge to the
Subscriber and the incremental charges, if any, for use of POWS. ACCESS and
AIRTIME does not include optional services including, but not
-6-
limited to, features, ancillary services, insurance, roamer charges, Equipment
charges, taxes, fees and long distance tolls.
No Residual Compensation shall be paid for Subscribers who fail to complete 180
days of service. Residual Compensation shall be paid within thirty (30) working
days following the close of the last billing period in the Market in which the
Subscriber completed 180 days of continuous active service. The first such
payment shall include all Residual Compensation accrued during the first 180
days. Thereafter, Residual Compensation shall be paid monthly. NEWCO reserves
the right, at any time and from time to time, to change the period used to
determine payment of Residual Compensation. AGENT shall be notified in writing
of any change in such period.
III
COMPENSATION FOR SERVICE OPTIONS AND ANCILLARY SERVICE
IPS Paging 2 X Recurring Revenues
Voice Mail 2 X Recurring Revenues
Other Features 2 X Recurring Revenues
Each service option shall be subject to the provisions of Paragraph B of the
Section titled "Conditions Applicable to All Options".
IV
COMPENSATION MODIFICATION
Beginning six months prior to the third anniversary of this Agreement, and six
months prior to each anniversary thereafter that this Agreement is in effect,
NEWCO and AGENT shall renegotiate compensation to be paid under this Agreement.
If the Parties are unable to agree on revised compensation, AGENT shall
terminate the Agreement as provided in Article XI of the Agreement.
V
GENERAL
A. Continuous active service refers to the use of NEWCO's CRS without
interruption, either voluntary or involuntary.
For purposes of calculating continuous active service, a Subscriber who is
disconnected for nonpayment and is reconnected to NEWCO's service within the
same or following billing cycle shall be considered as having continuous active
service.
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B. If AGENT receives Equipment under any NEWCO program and invoices are not
timely paid, or if AGENT owes NEWCO amounts for any other reason, including, but
not limited to, all amounts due for unpaid bills for cellular service or
equipment provided to AGENT, its officers, employees, principals or affiliates,
NEWCO reserves the right to deduct such unpaid amounts from AGENT's
compensation.
C. If AGENT believes there are any discrepancies in commission payments, AGENT
must submit a request for reconciliation within ninety (90) days from the date
of such payment.
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