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EXHIBIT 10.25
AGREEMENT
THIS AGREEMENT (hereinafter the "Agreement"), is made as of
the 3rd day of October, 1998, by and between Xxxxxxx Communications, Inc., a New
York corporation, with an office address at One Blue Hill Plaza, 5th Floor, X.X.
Xxx 0000, Xxxxx Xxxxx, Xxx Xxxx 00000 (hereinafter "Xxxxxxx"), and U.S. Mobile
Services, Inc., a Delaware Corporation with an address at 00000 Xxxxxxxx Xxxx,
Xxxxx 000, Xxxxxxxxx Xxxxxxxx, Xxxxxxxx 00000 (hereinafter "USM").
BACKGROUND
WHEREAS, USM is a national wireless and wireline resale
provider of prepaid wireless, prepaid wireline and prepaid local exchange
services;
WHEREAS, Xxxxxxx is in the business of providing inter alia,
telecommunications products and services as well as direct marketing services to
its clients;
WHEREAS, Xxxxxxx has developed and is currently running a
sales commercial on a national basis which advertises a "free cellular phone" to
any customer that switches his/her long distance wireline telephone service to a
company represented by Xxxxxxx (hereinafter the "Xxxxxxx Affiliate");
WHEREAS, USM is desirous of supplying the "free cellular
phone" as well as monthly cellular service (under certain terms and conditions)
to the Xxxxxxx customers mentioned above;
NOW, THEREFORE, in consideration of the mutual covenants,
promises and conditions herein set forth, Ten and 00/100 Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. RECITALS. The foregoing recitals are hereby
incorporated herein by reference as if fully set
forth at this point in the text of the Agreement.
2. XXXXXXX RESPONSIBILITIES AND PAYMENT OBLIGATIONS. On
the terms and subject to the conditions set forth in
this Agreement, Xxxxxxx agrees as follows:
x. Xxxxxxx will produce and fund all
productions of spots and/or infomercials;
x. Xxxxxxx will manage and fund all media
purchases;
x. Xxxxxxx will write all telemarketing scripts
and manage the inbound telemarketing process
with respect to its programs;
x. Xxxxxxx will provide USM with a list of
customers that have qualified for the "free
cellular phone" program;
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x. Xxxxxxx will provide the aforementioned
customer information to USM via electronic
file with the pertinent information
regarding each customer;
x. Xxxxxxx will pay USM {Confidential portion
omitted and filed separately with the
Commission} for each cellular phone shipped
with respect to customers that receive
phones in conformance with the Xxxxxxx "free
cellular phone" program (i.e.: phone
shipment after the customer has been a long
distance customer of the Xxxxxxx affiliate
for {Confidential portion omitted and filed
separately with the Commission} which phones
shall be loaded with {Confidential portion
omitted and filed separately with the
Commission} for use by the customer. Xxxxxxx
will make the aforementioned payment to USM
within seven days subsequent to the phone
shipment mentioned above. The cellular
phones to be shipped with respect to the
"free cellular phone" program mentioned
above will be shipped to customers by USM
only after authorization from Xxxxxxx;
x. Xxxxxxx will receive a {Confidential
portion omitted and filed separately with
the Commission} percent commission on
prepaid cellular airtime sold to each
customer on a recurring monthly basis
(exclusive of any initial airtime loads)
during the entire period such customer
remains a customer of USM or any of its
subsidiaries or affiliates.
3. USM RESPONSIBILITIES AND PAYMENT OBLIGATIONS. On the
terms and subject to the conditions set forth in this
Agreement, USM agrees as follows:
a. USM will carry the inventory of prepaid
cellular phone hardware and will fulfill
customer orders. The aforementioned phones
will be loaded with {Confidential portion
omitted and filed separately with the
Commission} of airtime when they are shipped
from the USM fulfillment center. It is
understood and agreed by the parties hereto
that Xxxxxxx will not be paid a commission
with respect to the initial {Confidential
portion omitted and filed separately with
the Commission} airtime load mentioned
herein;
b. USM will bear the cost associated with the
shipping of the phones as well as the
{Confidential portion omitted and filed
separately with the Commission} initial
airtime load mentioned herein;
c. USM will ship the prepaid cellular phone
within forty-eight (48) hours from the time
that it has been notified to do so by
Xxxxxxx. Xxxxxxx will provide USM with an
anticipated delivery schedule weekly, which
schedule shall detail the anticipated
prepaid phone deliveries for the following
two (2) week period;
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d. USM will provide and manage the "back end"
customer service function as well as its
telemarketing programs. USM will provide the
same product and service warranties to the
"free cellular phone" customers as those
supplied to other customers of USM and
otherwise required by law. USM will
indemnify Xxxxxxx against any claim made
against Xxxxxxx by a USM customer and hold
Xxxxxxx harmless from any liability, cost or
expense arising out of such product and
service warranties or the use of the
cellular telephone by such customer. The
foregoing indemnification does not cover
misrepresentations by Xxxxxxx, nor will it
extend to negligence or fraud on the part of
Xxxxxxx;
e. USM agrees to ship a maximum of
{Confidential portion omitted and filed
separately with the Commission} cellular
phones {Confidential portion omitted and
filed separately with the Commission} under
the "free cellular phone" program mentioned
in Paragraph 2 above. If the program is more
successful than originally anticipated, the
parties hereto agree that USM shall have the
option to ship more than {Confidential
portion omitted and filed separately with
the Commission} phones per month in USM's
sole and absolute discretion;
f. Sixty-one (61) days subsequent to the date
that a customer switches its long distance
service to the Xxxxxxx Affiliate, USM will
contact the customer in an attempt to
encourage the customer to pay a sum of money
to purchase the cellular phone rather than
waiting an additional four (4) months to
receive the "free cellular phone" pursuant
to the original offer. Providing that USM is
successful in encouraging the customer to
pay for the cellular phone, Xxxxxxx will not
be required to pay USM pursuant to paragraph
2(g) above. Notwithstanding the foregoing,
Xxxxxxx will continue to be entitled to the
commission referred to in Paragraph 2(g)
above;
x. Xxxxxxx will maintain script approval with
respect to outbound telemarketing efforts
and approval of all other media, print or
otherwise, with regard to paragraph 3(f)
above.
4. PRIVATE LABEL. The Parties hereto agree that the
commercials that are being aired will continue to be aired
under the Xxxxxxx Private label.
5. TERM. The term of this agreement shall be for a period of
one (1) year. USM and Xxxxxxx shall have the right to elect
two (2) one year renewal options in their discretion on the
terms and conditions contained herein. During the term of this
agreement, Xxxxxxx agrees to deliver all sales including all
customer leads to USM in conformance with the terms of this
Agreement. In markets where USM can not activate mobile
identification numbers, USM and Xxxxxxx agree that Xxxxxxx can
utilize
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provider for purposes of fulfilling the "free cellular phone"
program mentioned above.
6. REPRESENTATIONS AND WARRANTIES BY XXXXXXX. To induce
USM to enter into this agreement, Xxxxxxx makes the
following representations and warranties:
a) Xxxxxxx has the power and authority to enter
into this Agreement and to perform all of
its duties and obligations hereunder;
b) The execution of this Agreement as well as
the full and complete performance by Xxxxxxx
of the provisions hereof will not violate or
result in any breach of, or constitute a
default under any agreement or other
instrument to which Xxxxxxx is a party, or
by which Xxxxxxx is bound.
7. REPRESENTATIONS AND WARRANTIES BY USM. To induce
Xxxxxxx to enter into this Agreement, USM makes the
following representations:
a) USM has the power and authority to enter
into this Agreement and to perform all of
its duties and obligations hereunder;
b) The execution of this Agreement as well as
the full and complete performance by USM of
the provisions hereof will not violate or
result in any breach of or constitute a
default under any agreement or other
instrument to which USM is a party, or by
which USM is bound.
8. THIRD PARTY BROKERAGE. The parties hereto hereby
represent and warrant to each other that neither USM
or Xxxxxxx have dealt with any broker or finder in
connection with the transactions which are the
subject of this Agreement, and each party hereby
agrees to indemnify, save harmless and defend the
other from and against all claims, losses,
liabilities and expenses, including reasonable
attorney's fees, arising out of any claims made by
any broker, finder, or other intermediary who claims
to have dealt with such party in connection with the
transaction which is the subject of this Agreement.
The provisions of this Section shall survive the
termination of this Agreement.
9. HEADINGS. The headings used in this Agreement are for
purposes of convenience only and shall not be used in
construing the provisions hereof.
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10. SEVERABILITY. The provisions of this Agreement shall
be deemed severable, and the invalidity or
unenforceability of any one or more of the provisions
hereof shall not affect the validity or
enforceability of the other provisions hereof.
11. ENTIRE AGREEMENT. This document represents the entire
agreement between the parties with respect to the
subject matter hereof, and supersedes any and all
prior agreements, representations and covenants, oral
or written.
12. MODIFICATIONS. This Agreement may not be modified
except by the written agreement signed by both of the
parties hereto.
13. NOTICES. Notices given pursuant to this Agreement
shall be in writing, shall be given by actual
delivery or by mailing the same to the party entitled
thereto, at the addresses set forth below or at such
other address as any party may designate in writing
to any other party pursuant to the provisions of this
Section. Notices given by mail shall be sent by
United States mail, certified or registered, return
receipt requested. Except as otherwise provided
herein, notices shall be deemed to be received on the
date of actual receipt, in the case of personal
deliver, or on the date of mailing in the case of
mailing. Notices shall be served or mailed to the
following addresses, subject to the changes provided
above:
If to USM: U.S. Mobile Services, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxxx Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. XxXxxxxxx
If to Xxxxxxx: Xxxxxxx Communications, Inc.
Xxx Xxxx Xxxx Xxxxx, 0xx Xxxxx
X.X. Xxx 0000
Xxxxx Xxxxx, XX 00000
Attention:
14. MISCELLANEOUS.
a). This Agreement shall be governed by and
construed in accordance with the laws of the
State of Maryland;
b). Neither party shall be permitted to assign
its rights and/or delegate its duties under
this Agreement without the written consent
of the other, which consent shall not be
unreasonably withheld;
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c). This Agreement may be executed in several
counterparts and all counterparts so
executed shall constitute one Agreement
binding on all of the parties hereto,
notwithstanding that all of the parties are
not a signatory to the original or the same
counterpart.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
U.S. MOBILE SERVICES, INC. (USM)
By: /s/ Xxxxx X. XxXxxxxxx
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Xxxxx X. XxXxxxxxx
Chairman & CEO
XXXXXXX COMMUNICATIONS, INC. (Xxxxxxx)
By: /s/ Xxxx Xxxxxxx
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Title: Vice President
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