EXHIBIT 10.27
MARKETING AGREEMENT
This Marketing Agreement is made as of this 25th day of September,
1999, between Preferred Voice, Inc., a Delaware corporation ("PVI") and Rural
Cellular Corporation, a Minnesota corporation, on behalf of itself and its
wholly owned subsidiaries and affiliates ("WIRELESS PROVIDER"). PVI and WIRELESS
PROVIDER are collectively referred to in this Agreement as the "Parties."
Background Information
PVI has developed a system (the "System") that when interconnected with
a telecommunications switching system is capable of performing the services
described in Exhibit A attached hereto and incorporated herein by reference (the
"Services"). Each System consists of the hardware described in Exhibit B,
certain third party software and certain proprietary application software
developed by PVI. WIRELESS PROVIDER is a licensed wireless carrier that is
currently providing telecommunications service in the areas described in Exhibit
C. WIRELESS PROVIDER wishes to offer the Services to end users ("End Users")
under its own brand in conjunction with its telecommunications services.
In consideration of the mutual promises made in this Agreement, PVI and
WIRELESS PROVIDER agree that the terms and conditions set forth as follows will
apply to the license of Application Software.
ARTICLE 1. INSTALLATION
1.01 Installation. PVI shall install, at its cost, its Systems at
WIRELESS PROVIDER's switch locations set forth in Exhibit C to interconnect with
switches described in Exhibit C. The System will remain the property of PVI.
WIRELESS PROVIDER shall prepare the site in accordance with PVI's
specifications. Installation of Systems will be completed within 90 days. PVI
agrees to install Systems so that they shall comply in all material respects
with all federal, state, and local laws and regulations in force on the date
hereof.
1.02 PVI Testing. PVI shall test, at its cost, the Systems to ensure
that they work properly. The testing period shall (i) commence promptly upon the
completion of installation of the System at the sites, but in no event later
than five (5) days following such completion of installation (the "Commencement
Date"), and (ii) conclude upon acceptance by as described in Section 1.03 below.
Should material deficiencies arise in the performance of the System during
testing, PVI shall inform WIRELESS PROVIDER promptly thereof by submitting
notice, including a written, reasonably detailed description of each deficiency,
to WIRELESS PROVIDER. PVI shall then use reasonable efforts to cure the
noncompliance. WIRELESS PROVIDER shall use its best efforts to assist PVI in
curing such noncompliance. Upon completion of such cure, PVI shall give notice
to WIRELESS PROVIDER thereof. The total period of time that may be spent on the
testing period shall not exceed thirty (30) days from the Commencement Date. If
PVI, using commercially reasonable efforts,
MARKETING AGREEMENT - PAGE 1
**[Confidential Treatment] indicates portions of this document that have been
deleted from this document and have been separately filed with the Securities
and Exchange Commission.
is unable to cure any material deficiency of the System within 30 days of the
Commencement Date, then following notice thereof either party may give the other
party thirty (30) days' written notice of its election to terminate this
Agreement and the reasons therefor.
1.03 WIRELESS PROVIDER Acceptance. PVI shall inform WIRELESS PROVIDER
in writing of the completion of PVI's testing under Section 1.02. WIRELESS
PROVIDER will thereupon commence testing of the System, and shall have 30 days
in which to test the functionality of the System with employees. Upon completion
of the 30day test period, WIRELESS PROVIDER shall either provide PVI with
written notice of any problems revealed in its tests or deliver PVI an
acceptance certificate, substantially in the form attached hereto as Exhibit D
(the "Acceptance Certificate"). The System shall be deemed to have been accepted
by WIRELESS PROVIDER upon execution and delivery by WIRELESS PROVIDER to PVI of
an Acceptance Certificate, executed by an authorized representative of WIRELESS
PROVIDER or failure of WIRELESS PROVIDER to provide written notice to PVI of any
problems WIRELESS PROVIDER discovers within the 30- day period it is conducting
tests.
ARTICLE 2. SALES AND MARKETING
2.01 Sales. WIRELESS PROVIDER shall use commercially reasonable efforts
to promote sale of the Services so as to maximize revenues, including conducting
commercially reasonable advertising campaigns and maintaining an inventory of
collateral support materials for promotion, advertising, point-of-sale, record
keeping, subscriptions, and other items related to sales of the Services.
WIRELESS PROVIDER shall xxxx and collect for Services used by End Users.
2.02 Pricing. The WIRELESS PROVIDER will determine the prices at which
the Services will be made available to End-Users and any changes to these
prices.
2.03 Advertising and Promotional Literature. PVI will assist WIRELESS
PROVIDER in the development and production of original copy of advertising and
collateral support materials (i.e. layout, verbiage, plates, negatives, dies,
and/or other setup materials) that may be utilized by WIRELESS PROVIDER for
marketing the Services. WIRELESS PROVIDER shall send copies of all advertising
and sales promotion material and literature relating to the Services to PVI for
review prior to distribution.
2.04. Exclusivity. WIRELESS PROVIDER agrees that during the term of
this Agreement it will not install, for testing or any other purposes, any
network based (as opposed to handset based) system which competes with the
Services provided by PVI hereunder, in the areas identified in Exhibit C, as
long as PVI is in compliance with the terms and conditions of this Agreement.
ARTICLE 3. PAYMENT
WIRELESS PROVIDER shall pay PVI a share of WIRELESS PROVIDER's revenue
from the Services (net of all taxes, surcharges and other governmental fees or
any late charges) determined from the schedule set forth in Exhibit E. This
amount shall be paid monthly on the fifteenth day of each month for revenue
billed for the Services in the prior month.
MARKETING AGREEMENT - PAGE 2
ARTICLE 4. TRAINING AND SUPPORT
4.01 Technical Support. During the term of this Agreement, PVI shall
provide a technical support help desk that WIRELESS PROVIDER may call to report
System troubles twenty-four (24) hours per day, seven (7) days per week basis.
PVI shall troubleshoot the problems and contact the appropriate vendor to
resolve problems that cannot be resolved by actions WIRELESS PROVIDER may take
on PVI's instruction. During the term of this Agreement, PVI shall provide (i)
remote, dial-up System support, on a twenty-four (24) hours per day, seven (7)
days per week basis, and (ii) packages, generally containing corrections of
known software defects and updates or patches to increase or improve performance
and occasionally also containing minor feature enhancements of existing
software, relating to a current System. WIRELESS PROVIDER shall provide
permanent digital connectivity to each System for the purpose of off-site
software revision and maintenance.
4.02 Provisioning. For up to the first six months following
installation of the System, PVI shall update and maintain the customer and names
data bases in the System based on information provided by End Users directly or
through WIRELESS PROVIDER. During that period PVI shall train WIRELESS
PROVIDER's personnel in data base update and maintenance procedures. WIRELESS
PROVIDER will be responsible for such work after such training period.
4.03 Training. As part of the installation process and at no cost to
WIRELESS PROVIDER, PVI shall provide WIRELESS PROVIDER's personnel with the
initial training and instruction as described on Exhibit F attached hereto
concerning the operation and use of the System by conducting training sessions
at a mutually convenient time at WIRELESS PROVIDER's facility. Any additional
training services that are requested by WIRELESS PROVIDER shall be invoiced to
WIRELESS PROVIDER in accordance with PVI's then prevailing hourly rates.
WIRELESS PROVIDER shall be responsible for all travel and other expenses of its
personnel attending such training sessions.
ARTICLE 5. TERM
The initial term of this Agreement shall be three years. Upon
expiration of the initial term specified above, the Agreement shall
automatically renew for up to seven successive one (1) year terms unless either
party gives the other notice of its intention not to renew the license at least
sixty (60) days prior to the expiration of the then current term.
ARTICLE 6. WARRANTY PROVISIONS
6.01 General. PVI warrants that (a) it shall install the System
pursuant to Section 1.01 so that it is properly interconnected to WIRELESS
PROVIDERS's switches identified in Exhibit C and (b) the System will provide
Services when properly interconnected to WIRELESS PROVIDER's functioning
switches of the types described in Exhibit C (provided, that ANY MODIFICATION OF
THE SYSTEM BY ANY PERSONS OTHER THAN PVI SHALL, UNLESS PURSUANT TO PVI'S
INSTRUCTION, VOID THE WARRANTY IN THIS SECTION 6.01).
6.02 Year 2000. PVI warrants that the System delivered or modified by
PVI is, or will be, Year 2000 Compliant (as defined below). Year 2000 Compliant
MARKETING AGREEMENT - PAGE 3
(as defined below). Year 2000 Compliant software that is intended to
interoperate with third party products as described herein will be compatible
and inter-operate in such manner as to process between them, as applicable, date
related data correctly as described in the definition of "Year 2000 Compliant."
Except as set forth in the preceding sentence, (i) PVI assumes no
responsibilities or obligations to cause third party products to function with
the System; and (ii) PVI will not be in breach of this warranty for any failure
of the System to be Year 2000 Compliant if such failure results from the
inability of any software, hardware, or systems of WIRELESS PROVIDER or any
third party to be Year 2000 Compliant. "Year 2000 Compliant" means that (a)
neither the performance nor functionality of the System will be affected by
dates prior to, during and after the year 2000, (b) no value for current date
will cause any interruption in the operation of the System; (c) the year 2000 is
recognized as a leap year; (d) in all interfaces and data storage the century,
in any date, is specified either explicitly or by unambiguous algorithms or
inferencing rules; and (e) date-based functionality of the System behaves and
will behave consistently for dates prior to, during and after the year 2000.
ARTICLE 7. TERMINATION
7.01 Cause for Termination. This Agreement shall terminate
automatically and without further notice upon the occurrence of expiration of
the term, specified in Article 5 or of any renewal term in the absence of a
subsequent renewal in accordance with the terms of this Agreement. PVI may
terminate this Agreement in the event that revenue sharing payments to PVI are
less than $2000 per System per month for three consecutive months, unless
WIRELESS PROVIDER pays PVI the shortfall. In addition, either party may
terminate this Agreement at any time if (a) the other party breaches any term
hereof and fails to cure such breach within 30 days (or ten days in the case of
a failure to pay any sum due) after receipt of written notice, (b) the other
party shall be or becomes insolvent, (c) the other party makes an assignment for
the benefit of creditors, (d) there are instituted by the other party
proceedings in bankruptcy or under any insolvency or similar law or for
reorganization, receivership or dissolution, (e) there are instituted against
the other party proceedings in bankruptcy or under any insolvency or similar law
or for reorganization, receivership or dissolution, which proceedings are not
dismissed within 60 days, or (f) the other party ceases to do business.
7.02 Effect of Termination. WIRELESS PROVIDER agrees that on
termination under Xxxxxxx 0.00, XXX may recover all Systems that have been
installed. PVI shall remove the Systems within 60 days of the termination of
this Agreement and if it fails to do so, WIRELESS PROVIDER may remove them and,
at PVI's cost, ship the Systems to PVI. Upon termination of the license, the
obligations of both parties under this Agreement shall cease. The termination or
expiration of this Agreement shall in no way relieve either party from its
obligation to pay the other any sums accrued hereunder prior to such termination
or expiration.
ARTICLE 8. INSURANCE
Each party hereto shall maintain, during the term of this Agreement,
the following insurance coverage as well as all other insurance required by law
in the jurisdictions where the work is performed: (a) worker's compensation and
related insurance as required by law; (b) employer's liability insurance with a
limit of at least five hundred thousand ($500,000) dollars for each
MARKETING AGREEMENT - PAGE 4
occurrence; (c) comprehensive general liability insurance, with a limit of at
least one million ($1,000,000) dollars per occurrence; and (d) comprehensive
motor vehicle liability insurance with limits of at least one million
($1,000,000) dollars for bodily injury including death, to any one person, three
hundred thousand ($300,000) dollars for each occurrence of property damage, and
one million ($1,000,000) dollars for each occurrence. Each party shall (i)
furnish the other prior to the start of the relevant work, if requested by the
other, certificates or adequate proof of the insurance required by this Section
and (ii) notify the other in writing at least thirty (30) days prior to
cancellation of or any material change in the policy.
ARTICLE 9. MISCELLANEOUS
9.01 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT THAT ANY CONFLICTS OF
LAW RULES OR PRINCIPLES OF THE STATE OF TEXAS THAT WOULD REQUIRE REFERENCE TO
THE LAWS OF ANOTHER JURISDICTION SHALL BE DISREGARDED.
9.02 Headings. Headings used in this Agreement are to facilitate
reference only, are not a part of this Agreement, and will not in any way affect
the interpretation hereof. The use herein of the word "including," when
following any general statement, term or matter, shall not be construed to limit
such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
non-limiting language (such as "without limitation," or "but not limited to," or
words of similar import) is used with references thereto, but rather shall be
deemed to refer to all other items and matters, that reasonably could fall
within the broadest possible scope of such general statement, term or matter.
9.03 Assignment. This Agreement, and all rights and obligations
hereunder, are personal as to the parties hereto and may not be assigned, in
whole or in part, by any of the parties to any other person, firm or corporation
without the prior written consent thereto by the other party hereto, which
consent will not be unreasonably withheld; except that either party may freely
assign any or all of its rights and obligations hereunder to any affiliate or to
any person acquiring all or substantially all of that party's stock or assets.
An affiliate is (a) an entity that owns all or substantially all of the
outstanding stock of the entity so assigning, (b) an entity all or substantially
all of whose stock is owned by the entity so assigning, or (c) an entity under
common ownership with the entity so assigning. Such assignee entity shall
thereupon be free to assign the rights and obligations under this Agreement to
any other affiliate. Any assignment contrary to the terms hereof shall be null
and void and of no force or effect.
9.04 Failure or Partial Exercises. No failure on the part of any party
to exercise, and no delay in exercising, any right or remedy hereunder shall
operate as a waiver thereof. Nor shall any single or partial exercise of any
right or remedy hereunder exclude any other or further exercise thereof or the
exercise of any other right hereunder.
9.05 Entire Agreement, Amendments. This Agreement and all schedules and
exhibits annexed hereto constitute the entire agreement among the parties
respecting the subject matter hereof
MARKETING AGREEMENT - PAGE 5
and supersedes all prior agreements among the parties relative to the subject
matter hereof. In entering this Agreement, WIRELESS PROVIDER did not rely on any
representations or warranties of PVI or its employees or agents other than those
set forth in this Agreement. This Agreement may not be modified or amended
except by a writing that states that it is an amendment to this Agreement and
which is signed by duly authorized representative of the parties.
9.06 Notices. All notices required or permitted to be given hereunder
shall be in writing and shall be valid and sufficient if dispatched either (i)
by hand delivery, (ii) by facsimile transceiver, with confirming letter mailed
promptly thereafter by first class mail, postage prepaid, (iii) by reputable
overnight express courier or (iv) by certified mail, postage prepaid, return
receipt requested, deposited in any post office in the United States, in any
case, addressed to the addresses set forth on the signature page of this
Agreement, or such other addresses as may be provided from time to time in the
manner set forth above. When sent by facsimile as aforesaid, notices given as
herein provided shall be considered to have been received at the beginning of
recipient's next business day following their confirmed transmission; otherwise,
notices shall be considered to have been received only upon delivery or
attempted delivery during normal business hours.
9.07 Partial Invalidity. If any clause or provision of this Agreement
is held to be illegal, invalid, or unenforceable under present or future laws
effective during the term of this Agreement, then and in that event, it is the
intention of the parties hereto that the remainder of this Agreement shall not
be affected thereby, and it is also the intention of the parties to this
Agreement that in lieu of each clause or provision of this Agreement that is
held to be illegal, invalid, or unenforceable, there be added as a part of this
Agreement a clause or provision as similar in terms to such illegal, invalid, or
unenforceable clause or provision as may be possible and still be legal, valid,
and enforceable.
9.08 Attorneys Fees. The prevailing party in any litigation,
arbitration or other proceedings arising out of this Agreement shall be
reimbursed by the other party for all costs and expenses incurred in such
proceedings, including reasonable attorneys' fees.
9.09 Force Majeure. No party hereto shall be liable for delay or
default in performing hereunder, other than a delay or default in payment of any
monies due to the other party, if such performance is delayed or prevented by a
Force Majeure Condition. "Force Majeure Condition" means any condition or event
beyond the reasonable control of the party affected thereby, including fire,
explosion, or other casualty, act of God, war or civil disturbance, acts of
public enemies, embargo, the performance or non-performance of third parties,
acts of city, state, local or federal governments in their sovereign,
regulatory, or contractual capacity, labor difficulties, and strikes, but
specifically excluding a party's failure to be Year 2000 Compliant. If a Force
Majeure Condition occurs, the party delayed or unable to perform shall give
prompt notice of such occurrence to the other party. The party affected by the
other party's inability to perform may, after sixty (60) days, elect to either
terminate this Agreement or continue performance with the option of extending
the terms of the Agreement up to the length of time the Force Majeure Condition
endures. The party experiencing the Force Majeure Condition must inform the
other party in writing when such a condition ceases to exist. Each party shall,
with the cooperation of the other, exercise all reasonable efforts to mitigate
the extent of a delay or failure resulting from a Force Majeure Condition.
MARKETING AGREEMENT - PAGE 6
9.10 Independent Contractor. The relationship of the parties
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement will be construed (a) to give either party the power
to direct and control the day-to-day activities of the other, (b) to constitute
the parties as partners, joint venturers, owners or otherwise as participants in
a joint or common undertaking, or (c) to allow either party to create or assume
any obligation on behalf of the other for any purpose whatsoever.
9.11 Confidentiality. The terms of this Agreement, and all information
transmitted between or among the parties pursuant hereto or in connection
herewith, including, without limitation, any information concerning WIRELESS
PROVIDER's customers, shall be deemed "Confidential Information" and shall be
maintained in confidence by all parties and shall be disclosed only to such of
the receiving party's employees or agents having a need to know the Confidential
Information for the purposes of performing obligations under this Agreement. No
party may disclose the Confidential Information to any third party, except as
may be required pursuant to a lawfully issued subpoena or other formal demand
for the production of information by a court of competent jurisdiction or a
regulatory body with jurisdiction over the party. In the event any such demand
is made, the party ordered to produce the Confidential Information shall
promptly notify the other party and shall use its best efforts to maintain the
confidentiality of the Confidential Information. In addition, if either party
determines that this Agreement is a "material contract," that party may file
this Agreement with the Securities and Exchange Commission, provided that it
notifies the other party at least fifteen (15) days prior to such filing and
cooperates with the other party to seek confidential treatment of provisions
reasonably designated by the other party for such treatment. Each party may use
Confidential Information obtained solely as a result of this Agreement only for
the purpose of performing hereunder. Neither party may use the other party's
Confidential Information for any other purpose without the express prior written
agreement of the party which disclosed the Confidential Information.
PREFERRED VOICE, INC. RURAL CELLULAR CORPORATION
on behalf of itself and its wholly owned
subsidiaries and affiliates
By: /s/ Xxxxxxx X. Xxxxx By: Xxxxx X. Xxxxxx
---------------------------- -----------------------------------
Name: Xxxxxxx X Xxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President Title: Vice President Market Development
0000 Xxxxxxxxxx Xxxxxx Address: 0000 Xxxxxx Xxxxxx XX
Xxxxx 000 Xxxxxxxxxx, XX 00000 XXX
Xxxxxx, Xxxxx 00000
Fax No.: 000-000-0000 Fax No.: (000) 000-0000
Phone: 000-000-0000 Phone: (000) 000-0000
MARKETING AGREEMENT - PAGE 7
EXHIBIT A
=========
PREFERRED VOICE, INC.
=====================
PRODUCT DESCRIPTIONS
====================
SAFETY DIALING is a service that allows the person
placing the call to access the
WIRELESS PROVIDER'S network, dial
the assigned access code (such as**)
on the keypad, speak a name from his
or her directory. That name's prog-
rammed number will then be dialed.
EXHIBIT A
EXHIBIT B
=========
Hardware Configuration (24 pts)
ITEM DESCRIPTION
FTU-2000A CUSTOM COMPUTER
PIIBX4OP38 PENT 11 400MHz CPU
PIIBX33P38 PENT 11 333MHz CPU
64M040 64MB DIMM RAM
FD015 3.5" FDD, BLACK
HD91S 9.1GB HDD, SCSI
ALM-100B-H 4.3GB HDD, SCSI
CDKIT1 ALARM BOARD
CDT240A DUAL SLIM CD-ROM
SCSR03 SLIM LINE CD-ROM
MD566A JUMPERABLE FAX/MDM
MNT40 MS WIN NT 4.0
240SCT1 PORT RESOURCE
ANTARES VOICE RESOURCE
PRO 2V ALARM RESOURCE
PORT FEE VOICE REC RESOURCE
Optional Hardware Components
48v Inverter
Master Switch
Traffic Engineering
Users Ports
1000 11
2000 20
3000 26
Spares Kit
EXHIBIT B
EXHIBIT C
WIRELESS PROVIDER Locations
[to be added]
Rural Cellular Corporation
0000 Xxxxxx Xxxxxx XX
Xxxxxxxxxx, Xxxxxxxxx 00000
000-000-0000
RSA's
XXX 0
XXX 0
XXX 0
XXX 5
RSA 6
South Dakota RSA 4
Unicel - Maine
Bomarc Industrial Park
Bangor, ME
000-000-0000
RSA's
Xxxxxx - XXX 0
Xxxxxxxx - XXX 0
Xxxxxxxx - XXX 3
MSA
Bangor
RCC Atlantic, Inc.
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
000-000-0000
RSA's
Xxxxxxxxxxxxx - XXX 0
Xxx Xxxxxxxxx - XXX 1
New York - RSA 2
Vermont - RSA 1
Vermont - RSA 2
MSA
Burlington - MSA
EXHIBIT C
EXHIBIT D
=========
Form of Acceptance Certificate
==============================
The undersigned, an authorized representative of
_________________________, a ______________________ corporation, on behalf of
itself and its wholly owned subsidiaries and affiliates ("WIRELESS PROVIDER"),
in his/her capacity as _______________________, does hereby certify that (a) the
testing period (as such term is defined in the Software License Agreement, dated
as of _______________, 1999 (the "Agreement"), by and between Preferred Voice,
Inc. ("PVI") and WIRELESS PROVIDER with respect to the System (as defined in the
Agreement) purchased or licensed by WIRELESS PROVIDER has been successfully
completed, (b) the System satisfies the requirements of the Specifications (as
defined in the Agreement) and (c) the System is hereby accepted by WIRELESS
PROVIDER.
Date:
----------------------------- ----------------------------------------
By:
-----------------------------------
Printed Name:
-------------------------
EXHIBIT D
EXHIBIT E
=========
Revenue Sharing Fees
====================
[Confidential Treatment Requested]** OF THE FIRST [Confidential Treatment
Requested]** IN REVENUE FOR EACH SYSTEM
[Confidential Treatment Requested]** OF THE NEXT [Confidential Treatment
Requested]** IN REVENUE FOR EACH SYSTEM
[Confidential Treatment Requested]** OF ALL REVENUE IN EXCESS OF [Confidential
Treatment Requested]** FOR EACH SYSTEM
For purposes of this Agreement, "Revenue" shall equal the greater of:
the amount that would have been received by WIRELESS CARRIER if the charges set
forth in the Exhibit E-1 had been charged to each End User using the Services
described in Exhibit E-1, except that if WIRELESS PROVIDER is offering reduced
rates or free service as part of a promotion, only a new End User's actual
revenue shall be accrued for the promotion during the first thirty (30) days of
provision of the Services to the new End User; or
the actual revenue received from End Users for the Services.
EXHIBIT E
EXHIBIT E-1
Safety Dialing [Confidential Treatment Requested]**
------------------------------------
EXHIBIT E-1
EXHIBIT F
=========
Training
1. Services Training --
o Target Audience
-- Product Manager
-- Product Marketing
o Contents
-- Complete review of each PVI service description and application
-- Market Position -- Target Market
2. System Installation and Maintenance Training --
Installation
o Hardware Installation
o T-1 Configuration
o VIP Programming
-- SCC
-- DID
Maintenance
o Alarm Systems
o Hardware Replacement
o Hardware Expansion
3. Provisioning
EXHIBIT F
