Exhibit 10.13
REGIONAL ADDENDUM
to
CELLULAR SERVICE SALES AGREEMENT
and
AUTHORIZED AGENCY AGREEMENT
This Regional Addendum ("Addendum") to that certain Cellular Service
Sales Agreement (the "Madison/Milwaukee Sales Agreement") dated July 17, 2000 by
and between Ameritech Mobile Communications, Inc. ("Ameritech") and Areawide
Cellular, Inc. ("Distributor"), and that certain Authorized Agency Agreement
(the "Illinois Sales Agreement") dated October 1, 1997 by and between
Southwestern Xxxx Mobile Systems, Inc. d/b/a CellularOne - Chicago
("CellularOne") and Distributor is made and entered into by the Parties as of
July 17, 2000 (the "Effective Date"). Ameritech, CellularOne and Distributor are
sometimes referred to as the "Parties." Capitalized terms used in this Addendum
and not defined herein shall have the meaning ascribed to them in the
Madison/Milwaukee Sales Agreement or the Illinois Sales Agreement, as the
context requires.
WHEREAS, Distributor is a distributor for Ameritech wireless service
("Service") in the Madison/Milwaukee Market pursuant to the Madison/Milwaukee
Sales Agreement; and
WHEREAS, Distributor is a distributor for CellularOne Service in the
Illinois Market pursuant to the Illinois Sales Agreement; and
WHEREAS, Distributor and Ameritech desire to supplement the
Madison/Milwaukee Sales Agreement, and Distributor and CellularOne desire to
supplement the Illinois Sales Agreement with certain provisions affording
Distributor in each case additional compensation in return for Distributor's
agreement to open additional points of distribution in accordance with the
CellularOne/Ameritech Regional Distributor Policy; and
WHEREAS, the provisions of this Addendum affecting the
Madison/Milwaukee Market, including the Madison/Milwaukee Market portion of
provisions affecting both Markets, constitute a "Special Offer" under the
Madison/Milwaukee Sales Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Regional Addendum, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
upon the terms and subject to the conditions set forth below, the Parties agree
as follows:
1. Authorized Locations - Madison/Milwaukee Market. Distributor agrees to
open three Authorized Locations in Madison/Milwaukee pursuant to the
Madison/Milwaukee Sales Agreement. All three Authorized Locations must be
operational by September 15, 2000. All Authorized Locations must be pre-approved
in writing by Ameritech. If all
three Authorized Locations are not operational by September 15, 2000, then
the Additional Compensation set out in both subsections of Section 2 hereof
shall cease as of that date, and any Additional Compensation paid to Distributor
prior to that date will be recovered from Distributor via charge backs against
unpaid compensation amounts accrued pursuant to the relevant Sales Agreement
(i.e., Additional Compensation accrued pursuant to the Madison/Milwaukee Sales
Agreement shall be charged back against unpaid compensation accrued pursuant to
the Madison/Milwaukee Sales Agreement, and Additional Compensation accrued
pursuant to the Illinois Sales Agreement shall be charged back against unpaid
compensation accrued pursuant to the Illinois Sales Agreement), or otherwise
repaid by Distributor.
Section 2. Regional Compensation.
(a) Chicago. During the term of the Regional Addendum, CellularOne
shall pay Distributor a [CONFIDENTIAL TREATMENT] on Distributor's existing
Chicago customer base, and on all contracted new line activations, [CONFIDENTIAL
TREATMENT], subject to the terms and conditions, other than minimum percentage,
of the Illinois Sales Agreement. Such terms and conditions include, but are not
limited to, [CONFIDENTIAL TREATMENT].
(b) Madison/Milwaukee. In the Madison/Milwaukee Market, Distributor's
Regional Compensation shall be [CONFIDENTIAL TREATMENT], calculated as
follows:
[CONFIDENTIAL TREATMENT]
Subject to the terms and conditions of this Addendum, such
[CONFIDENTIAL TREATMENT] shall be in addition to the compensation payable to
Distributor pursuant to the Madison/Milwaukee Sales Agreement.
Only activations of new cellular contracted numbers are included for
purposes of determining the number of Total New Line Activations Per Month.
[CONFIDENTIAL TREATMENT] is paid only on new cellular contracted lines (Service
contract with a term of at least 12 months) activated in that month, subject to
applicable chargebacks. No Term activations, Pick Up & Go Cellular activations
and any transactions, which are not a "Sale" under the Madison/Milwaukee Sales
Agreement [CONFIDENTIAL TREATMENT].
[CONFIDENTIAL TREATMENT]
Account Maintenance Fees for Madison/Milwaukee will be paid pursuant to
the then current Dealer Compensation Schedule - Exhibit B of Distributor's
Madison/Milwaukee Sales Agreement, as such may be amended, modified or changed
from time to time ("Compensation Schedule"). If the Compensation Schedule is
modified, amended or changed Distributor shall have the option of continuing
under the modified, amended or changed Compensation Schedule or, upon written
notice to Ameritech, [CONFIDENTIAL TREATMENT] subject to all terms and
conditions, payment terms and other requirements, including but not limited to
[CONFIDENTIAL TREATMENT], of the Compensation Schedule and the Madison/Milwaukee
Sales Agreement.
(c) General. CellularOne and Ameritech reserve the right to modify or
change the amounts and calculations of the compensation under this Agreement
upon thirty (30) days prior written notice. Payment of any residual is
contingent upon the existence of a current Sales Agreement; if the Sales
Agreement terminates so does the right to any residual.
Section 3. Term. This Addendum shall take effect on the Effective Date, and
shall remain in effect for a period of five (5) years, unless terminated earlier
pursuant to Section 5 hereof.
Section 4. Termination.
(a) This Addendum and any payment hereunder shall automatically
terminate, without further action or notice:
(i) If and when the Madison/Milwaukee Sales Agreement
and/or the Illinois Sales Agreement terminates;
(ii) On September 15, 2000 if by that date Distributor
shall not have opened and rendered operational all
three initial Authorized Locations required by
Section 1 hereof to be open and operational by
September 15, 2000; or
(iii) If Distributor fails to obtain CellularOne's prior
written approval (which may be withheld for any
reason or no reason) of any change either of majority
ownership interest of Distributor or effective
control of Distributor.
(b) This Addendum and any payments hereunder shall terminate if
either Party provides the other with thirty (30) days written
notice of termination, with cause, if the other Party:
(i) Makes an assignment for the benefit of creditors, has
any trustee or receiver appointed by any court for
any substantial part of its assets, or is the subject
of any Order For Relief entered under the Federal
Bankruptcy Code (Title 11, United States Code) that
is not dismissed within sixty (60) days; or
(ii) Makes or has made any material misrepresentation or
omission in entering into this Addendum; or an owner,
partner or executive of such Party is convicted of or
pleads no contest to and/or has filed against it any
indictment or information involving a felony or other
crime or offense that, in the sole judgment of the
terminating Party, is likely to affect adversely the
reputation of the other Party or any of the other's
Affiliates, or the goodwill of the other Party's
marks or logos; or attempts to make an unauthorized
assignment of this Addendum; or receives a notice of
violation of terms or conditions of any license or
permit required in the conduct of its business and
fails to correct such violation within the time
period specified in such
(iii) If any regulatory agency promulgates any rule,
regulation or order which in effect or application
prohibits or substantially impedes CellularOne and/or
Ameritech from providing Service in the Illinois or
Madison/Milwaukee Market respectively, or
makes the performance of this Addendum subject to
terms and conditions unacceptable to either Party.
No waiver by either Party of any deficiencies in one or more instances
shall constitute a waiver of such Party's rights to terminate this Addendum in
subsequent instances. For purposes of this Section, CellularOne and Ameritech
shall be considered one Party.
Section 5. Application of Covenant Not to Compete Provisions. Distributor agrees
that the following provisions shall be incorporated into its Madison/Milwaukee
Sales Agreement by this reference:
In connection of Ameritech's grant to Distributor of the right to use
the Marks, the right to advertise affiliation with Ameritech as an authorized
Distributor of Ameritech and the great value of the goodwill associated with
Distributor's ability to use the Marks, which rights and value are not available
to distributors generally, and in recognition of the value of specialized,
technical knowledge of the cellular industry imparted by Ameritech to
Distributor from time to time, Distributor agrees to be bound by the covenants
in this Section 6. Such rights and value shall constitute independent
consideration for the covenants in this Section 6 as does the provisions of the
Regional Addendum entered into between the parties.
Distributor recognizes and agrees that the Covenants contained in this
Section are reasonable in view of Ameritech's legitimate interests in protecting
its confidential information and customer goodwill and Ameritech's investment in
Distributor's training and development and to protect other business interests
of Ameritech. Distributor also acknowledges that one intent of this Covenant is
to allow Ameritech adequate time; i.e., a one-year period after termination of
Distributor's relationship with Ameritech, to develop alternative marketing
strategies targeting customers in the relevant retail markets in which
Distributor was to solicit customers on behalf of Ameritech.
The foregoing Covenants and agreements are acknowledged by Distributor
as an important part of his/her contract of employment for which, in the event
of breach or termination, Ameritech would suffer irreparable harm to its
business and goodwill without enforcement of such Covenant and for which
Ameritech would have no adequate remedy at law. Therefore, in addition to all
other rights and remedies available to Ameritech, it is agreed that Ameritech
may avail itself of all equitable remedies (temporary restraining order,
temporary, preliminary and permanent injunction) in order to restrain and
enjoin, any breach of this Covenant and these ancillary agreements by
Distributor. The exercise of Ameritech's right to injunctive relief shall not
preclude Distributor from obtaining any other relief for any damage or injury
caused by the Distributor, including but not limited to, reasonable attorney's
fees and expenses in the enforcement of this agreement. Distributor will not
engage in any conduct inconsistent with or contrary to Section 7 until after the
question has been resolved by a final judgment of a court of competent
jurisdiction.
Ameritech's failure to enforce at any time any of the provisions of
this Agreement or to require at any time performance by Distributor of any of
the provisions hereof shall in no way be construed to be a waiver of such
provisions or to affect either
the validity of this Agreement, or any part hereof, or the right of Ameritech
thereafter to enforce each and every provision in accordance with the terms of
this Agreement.
Therefore, for value received, as identified above, Distributor agrees
that Distributor, its officers, directors and principals, an Affiliate or the
person or persons owning a controlling interest in distributor or an affiliate,
shall during the term of this Agreement and except as noted below, for a period
of one (1) year following the later of the expiration or termination of this
Agreement:
1. not, directly or indirectly, induce, influence or suggest to
any Subscriber of Ameritech CMRS to purchase CMRS from another
reseller or provider of CMRS in the Market or to switch to
and/or contract with another reseller or provider of CMRS in
the Market;
2. not, under any circumstances or conditions whatsoever,
directly or indirectly, as an individual, partner,
stockholder, director, officer, employee, manager or in any
other relation or capacity whatsoever engage in the sale or
promotion of CMRS on behalf of any competing reseller or
provider of CMRS in the Market; and
3. not, directly, or indirectly, allow any other person, firm or
other entity to use in the Market, the name, trade name,
goodwill or any other assets or property of Distributor or
Ameritech in any manner in connection with such other entity's
sale of CMRS on behalf of a competing reseller or provider of
CMRS in the Area, and Distributor specifically agrees not to
transfer, assign, authorize or consent to the transfer of a
Distributor telephone number to such a competing person, firm
or other entity upon the expiration or termination of this
Agreement.
For the purposes of this Agreement, CMRS shall be defined as: Any and
all services (including resale of said services) that (1) fit the definition of
commercial mobile services pursuant to Section 332 of the Communications Act, 47
U.S.C. ss. 332, (2) are subject to regulation as commercial mobile radio
services by the FCC under the orders set forth in Implementation of Sections
3(n) and 332 of the Communications Act; Regulatory Treatment of Mobile Services
(CC Docket No. 93-252) or such other orders or rules as may be in effect from
time to time, or (3) are the functional equivalent of a commercial mobile
service as defined in 47 U.S.C. ss.332. CMRS shall in any event include CRS, all
forms of specialized mobile radio service (SMR and ESMR), and personal
communications services (PCS).
Section 6. Assignment. Distributor has no right to assign, transfer or convey,
by merger, acquisition or otherwise, all or any part of this Agreement without
the prior written consent of CellularOne. Consent to assign this Regional
Addendum shall be at the sole and exclusive option of CellularOne.
Section 7. Entire Agreement. This Addendum, and the portions of the
Madison/Milwaukee Sales Agreement and the Illinois Sales Agreement incorporated
herein, set forth the entire agreement of the Parties concerning Additional
Compensation to be paid in consideration of Distributor's agreement to open
additional points of
distribution in accordance with the CellularOne/Ameritech Regional Distributor
Policy, and supersedes all prior agreements of the Parties with respect to such
subject matter. This Addendum shall be modified only by a writing signed by all
Parties, except for changes required by regulatory authorities.
Section 8. Choice of Law. This Addendum shall be governed and construed in
accordance with the laws of the State of Illinois.
IN WITNESS WHEREOF, the Parties hereto have caused this Addendum to be
executed by their duly authorized officers or agents as of the date first above
written.
AREAWIDE CELLULAR, INC.
By: /S/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
CFO
AMERITECH MOBILE COMMUNICATIONS, INC.
Agrees to provisions affecting Madison/Milwaukee Market, including the
Madison/Milwaukee Market portion of provisions affecting both Markets.
By: /S/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Regional President
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CELLULARONE
Agrees to provisions affecting Illinois Market, including the Illinois Market
portion of provisions affecting both Markets.
By: /S/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Regional President
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