Exhibit 10.13
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.
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 Monthly Residual on Distributor's existing Chicago
customer base, and on all contracted new line activations, equal to no less than
[CONFIDENTIAL TREATMENT REQUESTED]% of the total recurring CRS base charges and
local airtime billed by CellularOne to all Distributor-originated CRS
Subscribers, 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, Vesting. Such [CONFIDENTIAL TREATMENT REQUESTED]% is the minimum
Residual that shall be paid. If the Illinois Sales Agreement provides for a
higher Residual than [CONFIDENTIAL TREATMENT REQUESTED]% on any rate plan, then
that higher Residual shall be paid on such rate plan in lieu of the
[CONFIDENTIAL TREATMENT REQUESTED]% Residual. For example, if CellularOne pays a
[CONFIDENTIAL TREATMENT REQUESTED]% Residual for MinutePak activations pursuant
to the Illinois Sales agreement, Distributor's Residual on such activations
would be [CONFIDENTIAL TREATMENT REQUESTED]% rather than the [CONFIDENTIAL
TREATMENT REQUESTED]% minimum Residual. Thus, in the Chicago Market,
Distributor's Regional Compensation pursuant to this subsection (a) shall be the
difference between the [CONFIDENTIAL TREATMENT REQUESTED]% minimum Residual
(when applicable) and the Residual which would be payable but for this Addendum.
In cases where the [CONFIDENTIAL TREATMENT REQUESTED]% minimum Residual is not
applicable (i.e., those cases where the Illinois Sales Agreement provides for a
higher Residual than [CONFIDENTIAL TREATMENT REQUESTED]%) there is no Regional
Compensation pursuant to this subsection (a).
(b) Madison/Milwaukee. In the Madison/Milwaukee Market, Distributor's
Regional Compensation shall be Volume Incentive Compensation, calculated as
follows:
VOLUME INCENTIVE FOR CONTRACTED NEW LINE ACTIVATIONS ONLY
-------------------------------------------------------------------------
TOTAL NEW LINE MADISON/MILWAUKEE PAYMENT PER CELLULAR CONTRACTED
ACTIVATIONS PER MONTH ACTIVATION
-------------------------------------------------------------------------
150-300 [CONFIDENTIAL TREATMENT REQUESTED]
-------------------------------------------------------------------------
301-600 [CONFIDENTIAL TREATMENT REQUESTED]
-------------------------------------------------------------------------
601-1000 [CONFIDENTIAL TREATMENT REQUESTED]
-------------------------------------------------------------------------
1000+ [CONFIDENTIAL TREATMENT REQUESTED]
-------------------------------------------------------------------------
Subject to the terms and conditions of this Addendum, such
Volume Incentive Compensation 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. The Volume Incentive Compensation 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, are not included in this Volume Incentive
Compensation schedule and no Volume Incentive Compensation will be paid on such
activations. The total Volume Incentive Compensation paid per qualifying
Subscriber (i.e. new cellular contracted activations) is listed to the right of
the appropriate volume level above. The Volume Incentive Compensation is not
cumulative (i.e., if Distributor achieves [CONFIDENTIAL TREATMENT REQUESTED]
Total New Line Activations in a month, it will receive Volume Incentive
Compensation of [CONFIDENTIAL TREATMENT REQUESTED] per eligible activation,
[CONFIDENTIAL TREATMENT REQUESTED]
For any Subscriber that fails to Vest, the Volume Incentive
Compensation paid with respect to such Subscriber will be charged back against
subsequent Commission, Residual, or other payments due Distributor, or will be
invoiced to Distributor.
Ameritech will automatically pay the highest Volume Incentive
Compensation amount [CONFIDENTIAL TREATMENT REQUESTED] for all eligible
activations through August 31, 2000, regardless of Total New Line Activations
for the months from the Effective Date of this Addendum through August 31, 2000,
subject to chargeback for failure to vest, and chargeback as described in
Section 1 for failure to have open and operational by the date specified therein
the three Authorized Locations per the requirements of such Section.
The Volume Incentive Compensation contained herein shall be in
lieu of any other present or future volumes incentives or volume ramps
implemented by Ameritech unless expressly agreed to by both parties in writing
expressly mentioning this Regional Addendum and the Volume Incentive
Compensation contained herein.
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, receiving on a going forward
basis beginning with the next compensation cycle, a [CONFIDENTIAL TREATMENT
REQUESTED]%) monthly Account Maintenance Fee subject to all terms and
conditions, payment terms and other requirements, including but not limited to
vesting, 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
-----------------------------------------
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
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------------
Title: Regional President
--------------------------------------
CELLULARONE
Agrees to provisions affecting Illinois Market, including the Illinois Market
portion of provisions affecting both Markets.
By: /S/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------------
Title: Regional President
--------------------------------------
