Exhibit 10.2
A request for confidential treatment for portions of this exhibit has been filed
with the United States Securities and Exchange Commission. The portions for
which confidential treatment has been requested have been separately filed with
the commission. The xxxx "Confidential Treatment Requested" has been inserted at
all places within this Exhibit where information has been deleted.
AMENDMENT TO SALES AND SERVICE AGREEMENT
This is an Amendment to that certain Authorized Sales and Service
Agreement ("Agreement") dated October 1, 1997, by and between Areawide Cellular,
Inc. ("AGENT") and Southwestern Xxxx Mobile Systems, Inc. d/b/a CELLULAR ONE -
Chicago ("CELLULAR ONE").
WITNESSETH:
WHEREAS, AGENT and CELLULAR ONE have entered into the Agreement and may
have amended or supplemented such Agreement on one or more occasions to revise
the compensation payable to AGENT; and
WHEREAS, AGENT and CELLULAR ONE desire to amend and replace in its
entirety Paragraph 7(b) of the Agreement ("Compensation Schedule") and to amend
Exhibit A to the Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, receipt and adequacy of which is hereby acknowledged,
AGENT and CELLULAR ONE agree as follows:
1. TERM
This Amendment is effective October 1, 1997, and continues in effect
until the expiration or other termination of the Agreement (the "Term"). The
Compensation and terms and conditions stated herein are subject to change at any
time during the Term upon thirty days advance written notice from Cellular One,
in the sole discretion of Cellular One. This Amendment (including any notices
provided for above) supersedes and replaces the Compensation Schedule and any
previous amendments to the Compensation Schedule and will be the sole and
exclusive statement of all compensation payable to AGENT under the Agreement.
II. EXHIBIT A
Exhibit A to the Agreement is hereby amended to add landline long
distance service ("LLD") provided by Southwestern Xxxx Communications Services -
Illinois, Inc., an affiliate of Southwestern Xxxx Mobile Systems, where
available in the Area, to the list of Authorized Services under the Agreement.
III. COMPENSATION
A. CELLULAR RADIO SERVICES
1. COMMISSIONS
CELLULAR ONE will pay AGENT CRS Commissions determined in accordance
with this Paragraph III(A) for each CRS subscriber accepted and activated by
CELLULAR ONE who remains an active CRS subscriber for at least [CONFIDENTIAL
TREATMENT REQUESTED] continuous days, provided that all requirements listed in
Attachment A have been satisfied, all the conditions in the Agreement are
satisfied and a properly completed and signed CRS subscriber service contract
(the "Subscriber Contract") is received by CELLULAR ONE within twenty (20) days
after service activation. The amount of the CRS Commission per CRS subscriber
activation is determined by AGENT'S commission tier. The following is the CRS
Commission Schedule:
[CONFIDENTIAL TREATMENT REQUESTED]
* Part II Commissions are only payable on (a) activations of new equipment
purchased by Agent from Cellular One and activated by a new Cellular One
Subscriber, and (b) line-only activations of new Cellular One Subscribers
switching over from any wireless competitor in the Area, other than Subscribers
who have been active on Cellular One's network through a reseller.
A [CONFIDENTIAL TREATMENT REQUESTED] incentive payment applies to all
new CRS activations on a three year contract.
[CONFIDENTIAL TREATMENT REQUESTED]
** All activations of new cellular lines, pagers, landline long distance lines,
and Debit Cards in a month are included for purposes of initially determining
the number of Total Activations Per Month. The Additional CRS Compensation,
however, is paid only on new cellular lines activated in that month, subject to
applicable chargebacks.
For any CRS subscriber that does not remain active for at least
[CONFIDENTIAL TREATMENT REQUESTED] consecutive days after activation, i.e.,
fails to "Vest," the Part I CRS Commission and any applicable Additional
Compensation paid with respect to such subscriber will be charged back against
subsequent Commission, Residual, or other payments due AGENT, or will be
invoiced to AGENT. In addition, the Part II (b) Commissions [on the switchovers
described above] will be charged back against subsequent Commission, Residual,
or other payments due Agent, or will be invoiced to Agent. If a CRS subscriber
does Vest (as defined above) but such subscriber does not remain active at the
commission tier originally paid (as herein defined) for at least one hundred
eighty (180) consecutive days, then the difference between the Part I CRS
Commission for the original tier and the Part I CRS Commission for the tier
active at the [CONFIDENTIAL TREATMENT REQUESTED] vesting requirement will be
charged back against subsequent Commission, Residual, or other payments due
AGENT, or will be invoiced to AGENT.
The CRS Commission Tiers referred to above are defined as follows:
[CONFIDENTIAL TREATMENT REQUESTED]
If CELLULAR ONE announces a new retail rate plan which CELLULAR ONE intends to
include in these tiers for purposes of this Amendment, CELLULAR ONE will so
notify AGENT within a reasonable time after such announcement. If CELLULAR ONE
fails to so notify AGENT then, until notice otherwise, CRS Commissions for such
new retail rate plan will be at Tier 1.
CELLULAR ONE may establish and modify procedures to administer and
reconcile the payment of Commissions from time to time and reserves the right to
change the Commission Schedule on thirty (30) days notice to AGENT.
2. MONTHLY RESIDUAL
Within forty-five (45) days after the end of each calendar month, or at
such other periodic interval as CELLULAR ONE may establish from time to time,
CELLULAR ONE will pay AGENT a Monthly Residual as detailed in Paragraph
III(A)(1) provided that all requirements listed in Attachment A have been
satisfied and all the conditions in the Agreement are satisfied. The Monthly
Residual rates set forth herein apply only to new CRS Subscriber activations
from and after February 1, 1997 (unless modified pursuant to Paragraph I above),
and it is understood and agreed that CRS Subscribers activated on the rate plans
included in Tiers 1, 2, and 3 prior to February 1, 1997 will earn Monthly
Residuals in accordance with the contract or addendum that was in place between
CELLULAR ONE and AGENT immediately preceding the effective date of the
Agreement. In addition, it is understood and agreed that the Monthly Residual
for an existing Subscriber who activated prior to February 1, 1997 and switches
to a different rate plan on or after February 1, 1997 is the Residual rate set
forth herein. Monthly Residuals are paid on the total recurring CRS base charges
and local airtime charges billed by CELLULAR ONE to AGENT originated
Subscribers, provided that:
(1) CELLULAR ONE reserves the right to establish and modify
procedures to govern the specific manner in which these
Monthly Residuals are administered, and to modify the periodic
intervals for payments by notice to AGENT; and
(2) CELLULAR ONE - billed ancillary communication services:
cellular long distance and paging will receive [CONFIDENTIAL
TREATMENT REQUESTED] residual on usage charges; and
(3) Taxes, alternate long distance provider charges, equipment
charges, directory assistance charges, any other third-party
charges passed through to subscribers, one-time fees, enhanced
feature charges, roamer charges and any charges other than
recurring base charges and local airtime charges shall not be
included in the computation of Monthly Residuals.
(4) Residuals do not continue to accrue after expiration or
termination of the Agreement, or after a Subscriber has
completed an ESN replacement or upgrade through another point
of distribution.
B. LANDLINE LONG DISTANCE SERVICE (LLD)
1. COMMISSIONS
CELLULAR ONE will pay AGENT LLD Commissions determined in accordance
with this Paragraph III(B) for each LLD subscriber accepted and activated by
CELLULAR ONE who remains an active LLD subscriber for at least [CONFIDENTIAL
TREATMENT REQUESTED] continuous days, provided that all requirements listed in
Attachment A have been satisfied, all the conditions in the Agreement are
satisfied and a properly completed and signed Letter of Agency (the "LOA") is
received by CELLULAR ONE prior to service activation. The amount of the LLD
Commission per LLD subscriber activation is determined by the LLD rate plan upon
which the subscriber is activated. The following is the LLD Commission Schedule:
[CONFIDENTIAL TREATMENT REQUESTED]
* All activations of new landline long distance lines are included for purposes
of initially determining the number of Total Activations Per Month. The
Additional LLD Compensation, however, is paid only on activations on LLD Plans
other than the Commercial Volume Plan in that month, subject to applicable
chargebacks.
For any LLD subscriber that does not remain active for at least
[CONFIDENTIAL TREATMENT REQUESTED] consecutive days after activation, i.e.,
fails to "Vest," the LLD Commission and any applicable Additional Compensation
paid with respect to such subscriber will be charged back against subsequent
Commission, Residual, or other payments due AGENT, or will be invoiced to AGENT.
Additional Compensation will be charged back on all LLD activations on which it
was paid in a month if, as a result of Subscribers failing to vest, the total
number of activations in a month drops below the applicable tier.
If CELLULAR ONE announces a new LLD rate plan on which it intends to
pay Commissions for purposes of this Amendment, CELLULAR ONE will so notify
AGENT within a reasonable time after such announcement. If CELLULAR ONE fails to
so notify AGENT then, until notice otherwise, LLD Commissions for such new rate
plan will be those paid for the flat rated [CONFIDENTIAL TREATMENT REQUESTED]
plan.
CELLULAR ONE may establish and modify procedures to administer and
reconcile the payment of Commissions from time to time and reserves the right to
change the Commission Schedule on thirty (30) days notice to AGENT.
2. MONTHLY RESIDUAL
Within forty-five (45) days after the end of each calendar month, or at
such other periodic interval as CELLULAR ONE may establish from time to time,
CELLULAR ONE will pay AGENT a Monthly Residual as detailed in Paragraph
III(B)(1), provided that all requirements listed in Attachment A have been
satisfied and all the conditions in the Agreement are satisfied. The Monthly
Residual rates set forth herein apply only to new LLD Subscriber activations
from and after February 1, 1997, (unless modified pursuant to Paragraph I
above), and it is understood and agreed that LLD Subscribers activated prior to
February 1, 1997 will earn Monthly Residuals in accordance with the contract or
addendum that was in place between CELLULAR ONE and AGENT immediately preceding
the effective date of the Agreement. In addition, it is understood and agreed
that the Monthly Residual for an existing Subscriber who activated prior to
February 1, 1997 and switches to a different rate plan on or after February 1,
1997 is the Residual rate set forth herein. Monthly Residuals are paid on the
total recurring LLD base charges, if any, and per minute charges billed by
CELLULAR ONE to AGENT originated Subscribers, provided that:
(1) CELLULAR ONE reserves the right to establish and modify procedures
to govern the specific manner in which these Monthly Residuals are
administered, and to modify the periodic intervals for payments by
notice to AGENT; and
(2) Taxes, alternate long distance provider charges, equipment charges,
directory assistance charges, any other third-party charges passed
through to subscribers, one-time fees, enhanced feature charges, and
any charges other than recurring base charges and per minute charges
shall not be included in the computation of Monthly Residuals.
[CONFIDENTIAL TREATMENT REQUESTED]
V. GENERAL
The term "Subscriber" or "Subscriber activation" refers to each
cellular or landline telephone number assigned to a person or company. CELLULAR
ONE reserves the right to withhold or apply Commissions, Monthly Residuals, or
other payments due AGENT against any past due amount owed to CELLULAR ONE by
AGENT. Monthly Residuals will not continue to accrue, and AGENT will not receive
any Commissions or Monthly Residuals after expiration or termination of
Agreement, except those Commissions or Monthly Residuals that have accrued
before such expiration or termination. In addition to any related provisions of
the Agreement, an assignment of the Agreement or a transfer of control of, or a
sale of substantially all of the assets of, AGENT will be a material breach of
the Agreement unless AGENT first obtains CELLULAR ONE's written consent to such
a direct or indirect assignment of this Agreement. No course of dealing or
failure of CELLULAR ONE to enforce any term, right or condition of this
Agreement or any similar agreement with another party shall be construed as a
waiver of any such term.
Dated this 20th day of October, 1997.
SOUTHWESTERN XXXX MOBILE AREAWIDE CELLULAR, INC.
SYSTEMS, INC.,
d/b/a CELLULAR ONE - CHICAGO
By: /s/ Xxxxx Xxxxx
------------------------------
Xxxxx Xxxxx
Vice President
By: /s/ Xxxx Xxxxxx
------------------------------
Xxxx Xxxxxx
President and CEO
AUTHORIZED SALES & SERVICE REQUIREMENTS
1. Minimum monthly performance requirement calculated as the lesser of (a)
2,000 new lines and ESN Replacements, or (b) a number of new lines and
ESN Replacements equal to the product of 150 x number of stores.
2. Maintenance of primary ownership and control in 80% of all cellular
locations listed in Exhibit A of the Authorized Sales and Service
Agreement.
3. Provide exclusively CELLULAR ONE Local and Long Distance Service, when
and where available.
4. Provide CELLULAR ONE Paging Service on a non-exclusive basis.
5. Participation in all Cellular One - developed customer retention
programs.
6. Mandatory sales training provided through Cellular One with
participation by all sales personnel.
7. SBC - developed computer system required in all locations when
available. Agent is responsible for purchase and maintenance of any
necessary hardware and hardware upgrades, software licenses and
software upgrades. Requirement will be waived if Agent has comparable
system with comparable and compatible functionality.
8. Participation in and compliance with Cellular One's "New Look' Program,
as outlined on Attachment B. New Look is required for the following
"key locations" and all new locations.
0 Xxxxx Xxxxx 00 Xxxxxx XX 00000
00 Xxxxx Xxxx Xxxxxx Xxxxxx XX 00000
000 Xxxxx Xxxxx 00 Xxxxxxxx XX 00000
000 Xxxxx Xxxxx Xxxxxx Xxxxxxx XX 00000
0000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxx XX 00000
00 Xxxxx XxXxxxx Xxxxxx Xxxxxxx XX 00000
0000 Xxxxx Xxxxx Xxxxxx Xxxxxxx XX 00000
1 00 0 Xxxx Xxxxx Xxxxxx Xxxxxxx XX 00000
0000 Xxxx 00xx Xxxxxx Xxxxxxx XX 00000
0000 Xxxxx Xxxxxx Xxxxxxx XX 00000
0000 Xxxxx Xxxxx Xxxxxx Xxxxxxx XX 00000
0000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxx XX 00000
0000 Xxxxx Xxxxxxxx Xxxxxxx XX 00000
00 Xxxx Xxxxx Xxxx Xxxx, Xxxxx X Xxxxxxx Xxxx XX 00000
0000 Xxxxxx Xxxx Xxxxxxx Xxxxx XX 00000
000 Xxxxx XxXxxxxx Xxxx Xxxxxxxxx XX 00000
00 Xxxx Xxxxx Xxxxxx Xxxxxxxx Xxxxxxx XX 00000
0000 Xxxxx Xxxxxx Xxxxxx Xxxxxxx Xxxxxxx XX 00000
0000 Xxxxx XxXxxxxx Xxxx XxXxxxxx XX 00000
000 Xxxxx Xxxx Xxxx Xxxx Xxxxxx XX 00000
000 Xxxx Xxxxx Xxxxxx Xxxxxxx XX 00000
0000 Xxxx Xxxxx Xxxxxx Xxxxxxxxxx XX 00000
0000 Xxxx Xxxx Xxxx Xxxxx XX 00000
0000 Xxxxx Xxxxxx Xxxxx Xxxxxxxxx XX 00000
00000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxx Xxxxxx XX 00000
0000 Xxxx Xxxx Xxxx Xxxxxxxxxx XX 00000
000 Xxxxx Xxxxxxx Xxxx Xx. Xxxxxxx XX 00000
00000 Xxxxx Xxxxxx Xxxxxx Xxxxxx Xxxx XX 00000
000 Xxx XxXxxxx Xxxx Xxxxxxxx XX 00000
ATTACHMENT B
1. Cellular One's New Look Program for Authorized Sales and Service Centers is a
program designed to enhance and standardize the appearance of sales locations at
which Cellular One's services are offered for sale. The basic requirements of
the Program are standardized components, designed to Cellular One's
specifications, to be placed in sales locations. The required standardized
components are as follows
* Display Easels for Phones, Pagers, and Accessories
* Red Stained Maple Pedestal
* Natural Maple Pedestal
* Cellular One Screen
* Red Stained Maple Ceiling Disc
* Sales Desk with Pledge
* "Why Cellular One" Panel
* Window Lightbox
2. Each Sales and Service Center is responsible for the expenses associated with
complying with the New Look Program.
