AT&T WIRELESS DATA CHANNELS PROGRAM AGREEMENT
This AT&T Wireless Data Channels Program Agreement (this "Agreement"),
dated as of February 19, 1997, is made between AT&T Wireless Data, Inc., d/b/a
AT&T Wireless Services, a Delaware corporation, on behalf of its affiliated
wireless data communication service providers (collectively, "Company"), and
Compudawn, Inc., a Delaware corporation ("Channel Member"). Company and Channel
Member sometimes are referred to collectively as "Parties" and individually as a
"Party."
RECITALS
A. Company has the authority to provide Service to Subscribers in the Area.
B. Company intends to enter into agreements with various third parties who
are willing to assist Company in obtaining requests for Service from potential
Subscribers.
C. Company would like Channel Member to solicit and refer potential
Subscribers to Company, and Channel Member is willing to provide such
assistance, all in strict accordance with the terms and conditions of this
Agreement.
AGREEMENTS
In consideration of the mutual promises contained in this Agreement, the
Parties hereby agree as follows:
Section 1. Definitions
The following capitalized terms (whether used in the singular or plural)
are used in this Agreement with the respective meanings set forth below.
1.1 "Affiliate" means, with respect to either Party, any Person that
(directly or indirectly) controls, is controlled by or is under common control
with that Party. "Control" of a Person means the power (directly or indirectly)
to direct the management or policies of that Person, whether through the
ownership of voting securities, by contract, by agency or otherwise.
1.2 "Application" means a software program designed to operate in
conjunction with the Service.
1.3 "Area" means the geographic Area described in Exhibit A, within which
Channel Member is authorized to solicit Subscribers under this Agreement.
Company may amend Exhibit A from time to time upon written notice to Channel
Member.
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1.4 "Business Day" means any day other than a Saturday, a Sunday or any of
the following holidays: New Year's Day, Presidents' Day, Memorial Day, the
Fourth of July, Labor Day, Thanksgiving Day and Christmas Day. Company may from
time to time designate additional holidays upon written notice to Channel
Member.
1.5 "CDS Service" means the circuit-switched cellular data service offered
by Company from time to time. Circuit-switched cellular data service generally
consists of a wireless data communications service in which data is sent over a
cellular network in a connection-oriented session, similar to the manner in
which data is sent over analog phone lines via standard modems.
1.7 "Confidential Information" means all information, not generally known
to the public, relating to the business, technology, finances, plans or
practices of a Party disclosed by that Party to the other (including, but not
necessarily limited to, pricing and sales information, business, marketing and
research plans, financial data, budgets and projections, business processes and
systems, the terms of this Agreement and any other information designated by
such party as confidential). With respect to Company, Confidential Information
shall include the identity of and information about present, past and potential
Subscribers.
1.8 "Data Network" means the network(s) on which Company provides Service
to Subscribers.
1.9 "Equipment" means the terminal devices (modems, computers, cellular
telephones and other similar devices) used by Subscribers in conjunction with or
in order to utilize Service, together with any accessories or enhancements
associated with such devices.
1.10 "ESN" means the Electronic Serial Number associated with a cellular
telephone.
1.11 "FCC" means the Federal Communications Commission.
1.12 "Event of Default" means any of the events described in Section 9.
1.13 "Marks" means any trade name, trademark, service ▇▇▇▇, logo, trade
dress, or other name or ▇▇▇▇ that is owned or licensed by a Party and is
protected or protectable under the laws of the United States of America, any
state of the United States of America, or any other country.
1.14 "MSA" means Metropolitan Statistical Area, as defined in FCC Public
Notice, Report No. 9240, issued January 24, l992.
1.15 "NEI" means collectively (a) the network entity and service
identifiers and (b) Internet Protocol address assigned to a Subscriber in order
to access PDS Service.
1.16 "Number" means a telephone number or NEI assigned to a Subscriber in
order for the Subscriber's Equipment to access Service.
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1.17 "PDS Service" means the cellular digital packet data service offered
by Company from time to time. Cellular digital packet data service generally
consists of a wireless data communications service in which data is sent through
a cellular network in a connectionless packet data format, similar to the manner
in which data is sent over a TCP/IP Local Area Network. If Channel Member is
authorized hereunder to solicit PocketNetTM Service, PDS Service as used herein
shall include PocketNetTM Service.
1.18 "Person" means a corporation, partnership, joint venture, association,
individual or other entity.
1.19 "Personnel" means the owners, officers, employees, agents and
independent contractors of a Party, to the extent such individuals or entities
are involved in fulfilling such Party's obligations under this Agreement.
1.20 "PocketNetTM Service" means the Internet/intranet access data service
offered by Company from time to time through Company's PocketNet gateway.
1.21 "Program Rules" means Company's written policies, procedures and rules
now or hereafter in effect relating to its relationship with Channel Member. The
Program Rules, as of the date of this Agreement, are set forth in Exhibit B.
1.22 "RSA" means Rural Service Area, as defined in FCC Public Notice,
Report No. 92-40, issued January 24, 1992.
1.23 "Service" means that PDS Service, CDS Service and/or PocketNet Service
as described on Exhibit C for which Channel Member is authorized to solicit
Subscribers under this Agreement, and such ancillary services as Company from
time to time may offer.
1.24 "Subscriber" means a customer who has been assigned a Number by
Company. Each new Number activated for a customer will be deemed to be a new
"Subscriber".
Section 2. Relationship between Company and Channel Member
2.1 Appointment
Company and Channel Member agree that Channel Member is appointed as an
authorized representative for Company (a) to obtain requests for Service in the
Area from potential Subscribers, and (b) to provide such assistance to
Subscribers as Company periodically may authorize or require, all subject to the
terms and conditions of this Agreement.
2.2 Nature of Relationship
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2.2.1 Company and Channel Member are entering into this Agreement as
independent contracting parties, and this Agreement will not create an agency,
joint venture, partnership or employment relationship between them. Except as
specifically provided in this Agreement or directed by either Party in writing,
neither Party will (a) be a legal representative or agent of the other Party for
any purpose, (b) have any authority to assume or create any obligation on behalf
of the other Party, and (c) will have no right to make any representation or
warranty on the other Party's behalf.
2.2.2 Channel Member has not paid, and will not pay in the future, any
franchise or other fee for the right to become or remain Company's
representative or to use or continue to use any of Company's Marks. No franchise
will be created by the execution or performance of this Agreement.
2.3 Channel Member Responsible for its Business
2.3.1 Except as otherwise provided in this Agreement, Channel Member will
operate its business as it sees fit. Channel Member will be free to engage in
such other business activities as Channel Member may desire, as long as such
activities do not interfere or conflict with Channel Member's performance of any
of its obligations under this Agreement.
2.3.2 Channel Member will be responsible for the costs of operating its
business. Company will not make any deduction, withholding or contribution with
respect to Channel Member on account of social security, industrial insurance,
unemployment compensation, income tax or otherwise, arising under any federal,
state or local law.
2.4 Company's Reservation of Rights to Compete with Channel Member
Company reserves the right, by itself, through its Affiliates or through
non-Affiliates (including other channel members or other authorized
representatives): (a) to market Service to potential Subscribers, to obtain
requests for Service and to activate Subscribers on Company's Data Network, (b)
to obtain requests for service and activate additional Numbers from existing
Subscribers, whether or not such Subscribers were referred to Company by Channel
Member, and (c) to sell or lease Equipment, and to provide installation,
maintenance or repair service for such Equipment, to any Person.
2.5 Program Rules
The Program Rules (including all future amendments) are incorporated by
reference into this Agreement. The Program Rules may include such rules,
policies and procedures relating to the Company's relationship with Channel
Member as Company periodically may establish. Subject to Channel Member's right
to terminate this Agreement under Section 10.4, Company may amend the Program
Rules upon thirty (30) days' written notice to Channel Member. Each amendment to
the Program Rules will specify an effective date and will apply to Channel
Member's actions (including, without limitation, Subscriber activations)
occurring on or after such date.
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2.6 No Violation of Other Agreements
Channel Member represents and warrants to Company that Channel Member's
execution and performance of this Agreement will not violate any other contract
to which Channel Member is a party or obligation by which Channel Member is
bound (including, without limitation, terms relating to covenants not to compete
and confidentiality). Channel Member will not disclose to Company, or use or
induce Company to use, any proprietary information or trade secrets of any other
Person.
2.7 Ethical Conduct and Practices
In all dealings with each other, Subscribers and other Persons, Channel
Member and Company will be governed by the highest standards of honesty,
integrity, fair dealing and ethical conduct. Neither Party will engage in any
activity that may be harmful to the other Party's goodwill or may reflect
unfavorably on its Marks. This prohibition includes, without limitation, the
commission of any unfair trade practice, the publication of any false,
misleading or deceptive advertising, or the commission of any fraud or
misrepresentation.
Section 3. Channel Member's General Obligations
3.1 Records
Channel Member will create and maintain complete and accurate records of
all transactions and activities relating to this Agreement (including, without
limitation, records of its contacts with Subscribers, potential Subscribers, and
Service activations) and any other records required under applicable law.
Channel Member (a) will preserve such records at its principal place of business
for a period consistent with generally accepted document retention principles,
and (b) will make such records available to Company for inspection and copying
during normal business hours. Channel Member will keep all accounting records in
accordance with generally accepted accounting principles.
3.2 Channel Member Personnel
3.2.1 Channel Member will exercise sole control of its Personnel and will
be solely responsible for their actions and omissions. Any breach of this
Agreement by Channel Member's Personnel will constitute a breach by Channel
Member, entitling Company to pursue all of its rights and remedies under this
Agreement or applicable law. Notwithstanding the foregoing, Company will have no
obligation to or liability for any Personnel, and none of the Personnel is
intended to be a third-party beneficiary of this Agreement.
3.2.2 Channel Member will advise all its Personnel of their obligations
under this Agreement and will ensure that its current or former Personnel comply
with this Agreement and the Program Rules.
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3.2.3 Channel Member will ensure that all of its Personnel involved in the
sale and use of the Service and the demonstration, installation and repair of
the Equipment or Applications attend regular training courses as required by
Company, which training will be conducted within 100 miles of where Channel
Member's principal business is located. Company will provide such training at no
direct charge to Channel Member or its Personnel; provided, however, that any
incidental costs (including, for example, travel and living expenses) incurred
by Channel Member or its Personnel in connection with such training will be the
sole responsibility of Channel Member. In the event Company now or hereafter
requires any of Channel Member's Personnel to be certified by Company prior to
performing any of Channel Member's obligations hereunder, Channel Member will
comply fully with such certification requirements. Company may in addition offer
optional training and may charge Channel Member for such training.
3.2.4 Channel Member may not appoint any agent, independent contractor,
subcontractor, or other representative to solicit potential Subscribers for the
Service (or perform services related to such solicitation) without Company's
prior written approval (which will not be unreasonably withheld).
3.3 Compliance with Laws
In connection with Channel Member's performance of its obligations under
this Agreement, Channel Member will comply with all applicable federal, state
and local laws, rules, regulations and court orders. Without limiting the
generality of the foregoing, Channel Member will pay, collect and remit such
taxes as may be imposed with respect to any compensation, royalties or
transactions under this Agreement in accordance with applicable laws, rules,
regulations and orders of governmental authorities having jurisdiction.
3.4 Insurance
During the term of this Agreement, Channel Member at its sole expense will
maintain with insurers reasonably acceptable to Company at a minimum the
following types of insurance policies with the stated coverage limits:
1. Commercial General Liability $1,000,000 / 2,000,000 aggregate
2. Automobile $1,000,000
All policies shall cover each occurrence up to an amount of $1 million per
occurrence, and shall name Company as an additional insured. Company may upon
written notice require Channel Member to change the above minimum coverages, and
Channel Member will obtain any additional insurance coverage within (90) ninety
days of such notice. Channel Member will provide Company with certificates of
insurance, endorsements and other supporting materials as Company reasonably may
request to evidence Channel Member's continuing compliance with this Section
3.4.
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3.5 Provision of Information
Upon Company's reasonable request, Channel Member will provide Company with
true and accurate financial and other information regarding Channel Member's
business, as it relates to this Agreement.
Section 4. Channel Member's Obligations Relating to Service
4.1 Advertising and Promotion
4.1.1 Channel Member will actively promote and market the Service in that
portion of the Area identified in Exhibit A as owned or operated by Company, and
Channel Member may in addition actively promote and market the Service in the
remaining portion of the Area. From time to time, Company may establish
standards for Channel Member's advertising, promotional and training materials
relating to Service. All advertising and promotional activities conducted by
Channel Member will be completely factual and ethical, and Channel Member shall
be solely responsible for the content thereof, whether or not reviewed by
Company.
4.1.2 Company may, in its sole discretion, reference Channel Member in
advertising and promotion of the Service, including but not limited to, lists of
Channel Members to be provided to potential Subscribers, and general advertising
of the Channel Member program. In the event a specific advertisement or
promotion is planned which will reference only Channel Member and not other
Company channel members or other authorized representatives, Company must first
obtain Channel Member's written consent before such use. Company must also
obtain Channel Member's prior written consent before using any Channel Member
▇▇▇▇.
4.2 Solicitation of Requests
4.2.1 Channel Member will use commercially reasonable efforts to solicit
and obtain requests for Service from potential Subscribers in that portion of
the Area owned or operated by Company, and may solicit and obtain requests for
Service from potential Subscribers in the remaining portion of the Area. Channel
Member will at all times give prompt, courteous and efficient service to the
public.
4.2.2 Company periodically may authorize or restrict Channel Member from
soliciting requests for Service under certain rate plans or from certain
potential Subscribers or in certain portions of the Area by providing Channel
Member with written notice of such authorization or restriction.
4.2.3 In soliciting requests for Service, Channel Member will use only
Company-approved Subscriber Agreements, enrollment procedures and activation
procedures. Company may change such Subscriber Agreements and procedures at any
time, upon written notice to Channel Member.
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4.2.4 Channel Member at all times will identify Company as the Service
provider in all portions of the Area (including those MSAs and RSAs not owned or
operated by Company but in which Company provides Service). Except as may
otherwise be provided in the Program Rules, Channel Member will not state or
suggest, or use any advertising or marketing materials that state or suggest,
any association with Company without Company's prior written consent.
4.2.5 Channel Member will only quote to and activate potential Subscribers
on Company-approved rate plans for that portion of the Area in which Subscriber
will primarily use the Service, and Company's terms and conditions for Service.
Channel Member will not discount or adjust any such rate plans, terms or
conditions. Company may change its rates, terms and conditions for Service at
any time for existing or potential Subscribers and will provide Channel Member
with prompt written notice of any such change.
4.3 Subscriber Agreements
4.3.1 Each Subscriber will be subject to Company's potential acceptance or
rejection, based upon Company's review of the potential Subscriber's credit, the
sufficiency and validity of information contained in the Subscriber Agreement,
or any other valid business reason.
4.3.2 If Company does not accept a potential Subscriber obtained by Channel
Member, Channel Member will not enter into a written agreement for Service with,
or otherwise agree to provide Service to, the potential Subscriber.
4.4 Deposits and ▇▇▇▇▇▇▇▇
4.4.1 Channel Member will collect such deposits and advance payments from
Subscribers as Company may require. Such deposits and advance payments will be
made payable to Company, not Channel Member, unless Company specifically
authorizes Channel Member in writing that such deposits and advance payments may
be made payable to some other Person. Channel Member will deliver all such
payments to Company in accordance with Company's then-current activation
procedures.
4.4.2 Company will ▇▇▇▇ Subscribers directly for Service and Channel Member
shall not be authorized to make payments on behalf of a Subscriber unless
Company specifically authorizes Channel Member in writing to collect such
amounts on Company's behalf. Company retains the sole right to collect all
moneys and to settle all claims by Subscribers relating to Service and Channel
Member will have no right to require Company to assert or enforce claims against
Subscribers. Channel Member, upon Company's request, will assist Company in
obtaining any information relating to any Subscriber claim or obligation.
4.5 Relationship between Channel Member and Subscribers
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4.5.1 Channel Member's duties hereunder consist solely of acting on
Company's behalf as a facilitator to match the needs of potential Subscribers
with Company's Service offerings. Company's provision of Service to any
Subscriber will constitute a transaction between Company and the Subscriber
only. Channel Member will have no rights in the transaction and will not
interfere with the contractual relationship between Company and Subscriber.
4.5.2 Channel Member will not resell (directly or indirectly) any Service
during the term of this Agreement.
Section 5. Channel Member's Obligations Relating to Equipment and Applications
5.1 General
Channel Member, acting for its own account and not as agent for Company,
(a) may sell or lease, or arrange for the sale or lease of, Equipment and
Applications to be used by Subscribers, (b) may provide for the proper
preparation and installation of such Equipment and Applications, and (c) may
furnish warranty and maintenance service for such Equipment and Applications.
Channel Member may obtain Equipment and Applications from any supplier, provided
that the Equipment meets or exceeds the regulations and standards described in
Section 5.2. Channel Member will be solely responsible for establishing the
price and other terms and conditions for its Equipment and Application sales and
leases, and obtaining payment therefor.
5.2 Minimum Quality Standards
Channel Member will recommend, sell, lease or otherwise furnish to
Subscribers only (a) that Equipment which complies with all applicable FCC
regulations and (b) that Equipment and Applications that comply with Company's
minimum technical and other standards relating to transmission, regulatory
compliance, network compatibility, reliability, security and overall quality (as
published by Company from time to time).
5.3 Configuration
5.3.1 Except as Company may specify in writing, Channel Member will program
the Equipment of each Subscriber whose Service application is obtained through
Channel Member's efforts and is accepted by Company with (a) the Number and NEI
(as applicable) assigned by Company for use on Company's Data Network, (b) any
Applications selected by Subscriber, and (c) all other parameters specified by
Company in connection with Service. "Program" shall include entering all
information required by Company and the Equipment or Application providers for
initial trouble-free operation on Company's Data Network.
5.3.2 Channel Member will be solely responsible for the configuration of
any Application provided by Channel Member to a Subscriber.
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5.3.3 Channel Member will not charge Subscribers commercially unreasonable
fees for the initial configuration, programming or activation of Equipment or
Applications.
5.4 Demonstration Equipment and Service
Company, at its sole option, may supply Equipment, Applications, or Service
to Channel Member for demonstrating Service to potential Subscribers. Channel
Member will use such Equipment, Applications and Service only for that purpose.
Channel Member will bear the risk of loss or damage to demonstration Equipment
and Applications (other than ordinary wear and tear) from the time any such
Equipment and Applications are placed in the possession of Channel Member until
returned to Company, and shall ▇▇▇▇ all such Equipment as being the property of
Company. Channel Member shall return all such Equipment and Applications to
Company at the earlier of Company's written request or upon termination of the
Agreement.
Section 6. Channel Member Compensation
6.1 General
6.1.1 Subject to the terms of this Agreement and the Program Rules, Channel
Member will be eligible to receive compensation, in such amounts and at such
times as are specified in the Program Rules, for each Subscriber Agreement that
(a) is procured primarily by Channel Member or its Personnel, (b) is accepted by
Company, and (c) for which Service is activated during the term of this
Agreement.
6.1.2 The compensation set forth in the Program Rules will be the total
compensation payable to Channel Member by Company for Channel Member's services
provided hereunder. Channel Member will only be entitled to receive compensation
in connection with Subscribers whose Subscriber Agreement have been solicited
and whose Service has been activated in strict compliance with this Agreement.
6.1.3 Company, at any time and without prior notice to Channel Member, may
introduce new Service rate plans for which different compensation will be paid
to Channel Member.
6.1.4 Company may cease offering any Service rate plan to Subscribers or
potential Subscribers at any time. In such case, Company will notify Channel
Member of the effective date on which any such Service rate plan will be
discontinued. Channel Member will not be entitled to any compensation for
Subscribers activated on any discontinued Service rate plan on or following the
date of discontinuance. To the extent a Subscriber continues to receive Service
under a different Service rate plan, Channel Member will continue to receive
compensation under the Program Rules for any remaining eligible period for such
Subscriber.
6.2 Disputes between Channel Members and Others
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If any dispute arises between Channel Member and a third party relating to
any payment alleged to be due Channel Member from Company, Company may withhold
payment of the disputed amount (without the accrual of interest) until the
earlier of (a) the parties' mutual resolution of the dispute, or (b) the
resolution of the dispute by final order of a court or arbitration tribunal in
accordance with Subsection 12.1.
6.3 Company's Right to Offset
Company may offset against any amount owed to Channel Member by Company
hereunder, any amounts owed by Channel Member to Company or its Affiliates
pursuant to this Agreement, or otherwise, including without limitation, any
expenses and damages that are incurred by Company and are subject to
indemnification by Channel Member under Section 12.4.
6.4 Reserve
Upon any termination of this Agreement, Company may withhold a reasonable
reserve from any amounts owed to Channel Member, which reserve will be used to
satisfy any obligations owed by Channel Member to Company. Company will within
six (6) months of withholding a reserve review whether such reserve continues to
be necessary. Within thirty (30) days following Company's determination that a
portion of the reserve is no longer necessary to satisfy any of Channel Member's
obligations, Company will pay such portion to Channel Member.
Section 7. Marks
7.1 Ownership
Each Party's Marks are and will remain the exclusive property of such Party
or such Party's licensors (if any). Each Party will comply with all rules and
procedures relating to the Marks that such Party may from time to time
prescribe. Neither Party will have any rights to the Marks except as expressly
provided herein and will not acquire any rights therein or expectancy to their
use as a result of such Party's use of the Marks during the term of this
Agreement. A Party may discontinue the other Party's use of or license to its
▇▇▇▇ at any time.
7.2 Use
Except as otherwise provided in Section 4.2.4, neither Party will use any
of the other Party's Marks without specific prior written approval. Any
unauthorized use of the Marks, or any use of Company's Marks that is not in
compliance with Company's rules and procedures, will constitute a material
breach of this Agreement. Upon the termination of this Agreement, each Party
immediately will discontinue its use of all of the other Party's Marks.
Section 8. Nondiversion of Subscribers and CDS Service Exclusivity
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8.1 Nondiversion
During the term of this Agreement and for one (l) year after its
termination (whether voluntary or involuntary), Channel Member, its Personnel
and its Affiliates (a) will not request any Subscriber of Company who Channel
Member knows to be a Subscriber of Company to curtail or cancel its business
with Company, or (b) otherwise solicit, divert or attempt to divert any such
Subscriber from patronizing Company's Service. During the one-year period after
termination of this Agreement, any Subscribers of Company who contact Channel
Member, its Personnel, or its Affiliates, whether with respect to existing
Service or potential additional Service, will be referred directly to Company.
Channel Member will advise all of its Personnel of their obligations under this
Section 8.
8.2 CDS Service Exclusivity
If Channel Member is authorized pursuant to Exhibit C to solicit
Subscribers to CDS Service, Channel Member agrees that, at all times during the
term of this Agreement, it will not market, offer, provide, procure, or refer
any potential Subscriber or actual Subscriber to any voice or circuit switched
data service competing with Company in the Area, which service is offered by or
through any Person (including any reseller) other than Company or Company's
Affiliates.
Section 9. Events of Default
Each of the following events will constitute an Event of Default:
(a) any breach of this Agreement by a Party;
(b) the commission of any illegal act (excluding misdemeanors not
involving dishonesty or moral turpitude) by, or the filing of any criminal
indictment or information against, a Party, or any of its owners, officers,
directors or employees;
(c) a Party's insolvency, becoming the subject of a petition in
bankruptcy, having a receiver appointed for its business or entering into any
arrangement with, or assignment for the benefit of, its creditors or ceasing to
function as a going concern or experiencing a material deterioration in its
financial condition such that, in the other Party's reasonable business
judgment, its ability to perform the terms of this Agreement is threatened;
(d) a Party (or any of its Affiliate's) defaulting under any other
material agreement between it (or its Affiliate) and the other Party (or any of
its Affiliates), so that such other Party (or its Affiliate) has the present
right to terminate such other agreement for default; and
(e) a Party's unauthorized assignment of this Agreement.
Section 10. Term and Termination
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10.1 Term
This Agreement is for a two (2) year term commencing as of the date first
written above.
10.2 Renewal
Upon the expiration of the initial term of this Agreement, and provided
that Company continues to offer Service in the Area, this Agreement
automatically will be extended for additional one (1) year periods unless either
Party gives the other Party at least sixty (60) days' written notice prior to
the expiration of the then current term of its intention to terminate this
Agreement.
10.3 Termination
10.3.1 Except as otherwise provided in Section 10.3.2 and Section 10.3.3,
either Party may terminate this Agreement upon the occurrence of an Event of
Default relating to the other Party if the defaulting Party fails to fully cure
the Event of Default within thirty (30) days following its receipt of written
notice from the Party.
10.3.2 The Non-defaulting Party may terminate this Agreement immediately,
by giving the defaulting Party written notice of termination, upon the
occurrence of the Event of Default described in clause (b) or (c) of Section 9.
10.3.3. Company may terminate this Agreement immediately by giving Channel
Member written notice of termination if (a) Channel Member has made a material
misrepresentation or omission in its application to establish a representative
relationship with Company, (b) Channel Member substantially or continually fails
to abide by the standards established by Company under Section 4.1, or (c)
Channel Member violates any of its obligations under Section 8.
10.3.4 Either Party may terminate this Agreement for its convenience upon
ninety (90) days' written notice to the other Party.
10.4 Channel Member's Additional Termination Rights
If Company amends the Program Rules in a manner such that Channel Member's
total expected compensation is reduced by greater than ten percent (10%),
Channel Member may terminate this Agreement by giving Company written notice of
termination at least fifteen (15) days prior to the effective date of Company's
proposed amendment. Notwithstanding the foregoing, if Company rescinds the
amendment within twenty (20) days after receiving Channel Member's notice (or
such lesser time as may remain prior to the effective date of the amendment),
this Agreement will not terminate but will continue in full force and effect.
10.5 Company's Additional Termination Rights
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10.5.1 Upon the expiration or revocation of any license required for
Company to operate in any portion of the Area, this Agreement will immediately
terminate with respect to such portion of the Area and Exhibit A will be deemed
automatically amended to delete such portion of the Area. If Company transfers
any required license to a non-Affiliated third party, Company will have the
option with respect to the relevant portion of the Area of either terminating
this Agreement, assigning this Agreement to the license transferee, or
continuing this Agreement through the offering of some reasonable substitute for
Service.
10.5.2 Company may terminate this Agreement upon thirty (30) days' written
notice to Channel Member, (a) if the FCC or any other regulatory agency rules
and regulations governing the provision of Service or the operation of Company's
Data Network in the Area change materially and have an adverse impact upon the
Company's ability to conduct its business, or (b) upon any change in regulatory
authorization affecting any part of this Agreement on terms and conditions that
are unacceptable to Company or its Affiliates.
10.6 Survival
Upon the termination of this Agreement, all rights and obligations of the
Parties hereunder will cease without further liability, effective as of the date
of termination; provided, that all provisions of this Agreement that reasonably
may be interpreted or construed as surviving termination will survive the
termination of this Agreement, including but not limited to those set forth in
Section 8.1, 11 and 12.4.
Section 11. Confidential Information
11.1 Ownership and Use
All Confidential Information is and will remain the exclusive property of
the Party to which it belongs, even if it was gained or developed as a result of
or in the course of the Parties' relationship. During the term of this Agreement
and at all times thereafter, neither Party, or such Party's Affiliates or
Personnel, will use or disclose any Confidential Information to any Person
except as expressly provided in this Agreement. Each Party will use its best
efforts to avoid disclosure, dissemination or unauthorized use of Confidential
Information, including, at a minimum, the same degree of effort it uses to
protect its own confidential information of a similar nature.
11.2 Exceptions
The provisions of Section 11.1 will not apply to any information that (a)
is or becomes publicly available without breach of this Agreement, (b) can be
shown by documentation to have been known to a Party at the time of its receipt
from the other Party, (c) is rightfully received from a third Party without a
requirement that the third party treat the information as confidential and such
third party did not acquire or disclose such information by a wrongful act, (d)
can be shown by documentation to have been independently developed by such Party
without reference to any of the
Channels Agreement - R 2/18/97
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other Party's Confidential Information, or (e) is required to be disclosed by
judicial or regulatory process, or other requirements of law.
11.3 Personnel
Each Party will restrict the possession, knowledge, development and use of
Confidential Information to those of its Personnel who have a need to know
Confidential Information in connection with this Agreement. Such individuals
will have access only to the Confidential Information they need for such
purpose.
11.4 Obligations upon Termination
Upon termination of this Agreement, each Party will promptly deliver to the
other or destroy all materials, including but not limited to written documents,
audio and video tapes, computer diskettes, and other magnetic, optical or other
storage media, containing Confidential Information, and will erase all
Confidential Information from its computer hard drives or other storage media
which cannot reasonably be transferred.
Section 12. Disputes and Claims
12.1 Arbitration
12.1.1 Arbitration Clause. Except as stated in paragraph 12.1.6 below, all
claims (including counterclaims and cross-claims) and disputes between the
Parties shall be resolved by submission to binding arbitration. The Parties
shall submit any such disputes to the Seattle, Washington offices of Judicial
Arbitration & Mediation Services, Inc. ("JAMS") or such other arbitration
service located in Seattle, Washington for which the Parties may agree. If there
are no such offices of JAMS, the Parties shall arbitrate their disputes under
the commercial arbitration rules of the American Arbitration Association, before
one neutral arbitrator, except to the extent that those rules are modified
herein.
12.1.2 Selection of Arbitrator. In the event that a dispute is submitted to
JAMS for resolution, the Parties may agree on a jurist from the JAMS panel. If
the Parties are unable to agree, JAMS will provide a list of three available
panel members and each Party may strike one. The remaining panel member will
serve as the arbitrator.
12.1.3 Initiation of Arbitration. The aggrieved Party can initiate
arbitration under this paragraph by sending written notice of an intention to
arbitrate to the other Party. The notice must contain a description of the
dispute, the amount involved, and the remedy sought.
12.1.4 Procedures and Discovery. The arbitrator shall schedule a prehearing
conference to reach agreement on procedural matters, arrange for the exchange of
information, obtain stipulations,
Channels Agreement - R 2/18/97
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schedule the arbitration hearing, and attempt to narrow the issues. In order to
expedite the arbitration proceedings, the Parties have agreed to place the
following limitations on discovery:
(a) Each Party may propound only one interrogatory requesting the names and
addresses of the witnesses to be called at the arbitration hearing.
(b) On a date to be determined at the prehearing conference, each Party may
serve one request for the production of documents. The documents are to be
exchanged twenty-one (21) days after service of the request.
(c) Each Party may depose four (4) witnesses. Each deposition must be
concluded within four (4) hours and all depositions must be taken within 60 days
of the prehearing conference. Any Party deposing an opponent's expert witness
must pay the expert's fee for attending the deposition.
12.1.5 Enforcement of Award. There shall be no right to appeal the decision
of the arbitrator. The award of the arbitrator may be confirmed or enforced in
any court having jurisdiction.
12.2 Injunctive Relief
Notwithstanding paragraph 12.1.1, either Party shall have the option to
bring court proceedings to seek an injunction or other equitable relief to
enforce any right, duty or obligation under this Agreement, including but not
limited to those contained in paragraph 7, 8 and 11. To obtain injunctive or
other equitable relief, the Party shall not be required to post a bond or, if
required by law or by the court, the other Party hereby consents to a bond in
the lowest amount permitted by law.
12.3 Attorney's Fees
If one Party commences any arbitration or court action against the other,
the substantially prevailing Party will be entitled to recover its reasonable
costs incurred in connection with the action, including any appeals. For the
purposes of this Section 12.3, the term "costs" includes, without limitation,
attorneys' fees, paralegal fees, investigative fees, expert witness fees,
administrative costs, any other charges billed by the attorney to the prevailing
Party and the cost of efforts of in-house legal staff (which will be valued at
market rates for comparable services from private practitioners).
12.4 Indemnification
12.4.1 EACH PARTY WILL, DEFEND, INDEMNIFY AND HOLD THE OTHER AND THE
OTHER'S AFFILIATE'S (AND THE OWNERS, DIRECTORS, EMPLOYEES AND AGENTS OF EACH OF
THEM) HARMLESS AGAINST ANY DAMAGES, LOSSES AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS' FEES AND DISBURSEMENTS) ARISING OUT OF OR RELATING TO ANY CLAIMS,
ACTIONS OR OTHER PROCEEDINGS
Channels Agreement - R 2/18/97
16
THAT (A) ARE BROUGHT BY OR ON BEHALF OF ANY THIRD PARTY, AND (B) RESULT FROM THE
ACTS OR OMISSIONS OF THE INDEMNIFYING PARTY. FOR THE PURPOSES OF THIS SECTION
12.4.1, "THIRD PARTY" MEANS ANY PERSON OR ENTITY OTHER THAN THE PARTIES AND
THEIR RESPECTIVE AFFILIATES.
12.4.2 With respect to any claim, action or proceeding for which one Party
is required to indemnify the other Party under Section 12.4.1, the indemnified
Party will (a) give the indemnifying Party prompt written notice of the claim,
action or proceeding, (b) cooperate with the indemnifying Party in connection
with the defense, settlement or prosecution of the claim, action or proceeding,
and (c) not settle the claim, action or proceeding without the prior written
consent of the indemnifying Party, which consent will not be unreasonably
withheld. Notwithstanding the foregoing, the indemnified Party will have the
right to fully participate in the defense at its own expense, and, further,
Company (as an indemnified Party) will have the right to approve Channel
Member's selection of counsel, which approval will not be unreasonably withheld.
Failure to provide timely notice under this Section will only limit a Party's
rights hereunder to the extent the Party entitled to receive notice is
prejudiced.
12.5 No Consequential Damages
NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF SUCH PARTY'S FAILURE TO PERFORM UNDER THIS
AGREEMENT. FOR THE PURPOSES OF THIS SECTION 12.5, "PARTY" MEANS THE PARTY, ITS
AFFILIATES AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.
NOTHING IN THIS SECTION 12.5 WILL LIMIT A PARTY'S OBLIGATION TO FULLY INDEMNIFY
THE OTHER UNDER SECTION 12.4 FOR ACTIONS BROUGHT BY THIRD-PARTIES, EVEN IF SUCH
ACTIONS INCLUDE CLAIMS FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
12.6 Limitation of Actions
EXCEPT FOR INDEMNIFICATION ACTIONS ARISING IN CONNECTION WITH SECTION 12.4,
NEITHER PARTY MAY BRING A LEGAL ACTION OR ASSERT A CLAIM WITH RESPECT TO THIS
AGREEMENT MORE THAN TWELVE (12) MONTHS AFTER THE CAUSE OF ACTION OR CLAIM
ACCRUES.
Section 13. Miscellaneous
13.1 Cooperation in Regulatory Proceedings
Channel Member will support Company's efforts before regulatory authorities
or others regarding Company's provision of Service hereunder. Upon reasonable
notice and at Company's expense, Channel Member will cooperate with Company
regarding any such efforts, including,
Channels Agreement - R 2/18/97
17
among other things, by providing Personnel who are able to testify at
appropriate times regarding any aspect of this Agreement or related issues.
13.2 Force Majeure
Neither Party will be liable for any loss, damage, cost, delay or failure
to perform resulting from causes beyond its reasonable control including, but
not limited to, acts of God, fires, floods, earthquakes, strikes, insurrections,
riots, lightening or storms, or delays of suppliers or subcontractors for the
same causes.
13.3 Notices
Any notice or other communication under this Agreement given by one Party
to the other will be in writing and will be delivered in person, by
electronically receipted facsimile (that is acknowledged in a similar manner by
the intended recipient) by certified mail, return-receipt requested (properly
addressed and stamped with the required postage) or by national overnight
delivery service to the intended recipient at its address specified below its
signature at the end of this Agreement and to the attention of the individual
who executed this Agreement on behalf of such Party. Notices are effective upon
receipt. Any Party may change such address or individual by giving the other
Party notice in accordance with this Section l3.3.
13.4 Export Control
The Parties acknowledge that any Equipment, Applications, products,
software, and technical information (including, but not limited to, Services and
training) provided under this Agreement are subject to the export laws and
regulations of the United States of America and any use or transfer of such
Equipment, Applications, products, software, and technical information outside
of the United States or to foreign nationals must be authorized under those
regulations.
13.5 No Waiver
No failure or delay on the part of Company in exercising any right, power
or privilege under this Agreement or under the Program Rules, and no course of
dealing between Channel Member and Company, will be deemed a waiver of any
further exercise of any right, power or privilege. The rights and remedies
expressly provided herein are cumulative and not exclusive of any rights or
remedies which Company would otherwise have.
13.6 Assignment
This Agreement will bind and inure to the benefit of Channel Member,
Company and their respective successors and assigns. Company may assign or
delegate all or any portion of its rights or obligations hereunder. Channel
Member may not assign or delegate any of its rights or obligations hereunder
without Company's prior written consent, which may be withheld at Company's sole
Channels Agreement - R 2/18/97
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discretion. For the purposes of this Section, any transaction by which a Person
acquires fifty percent (50%) or more of the voting power, interest in income or
dividends or assets of Channel Member, or the right to control Channel Member or
its business, will constitute an assignment of this Agreement by Channel Member.
13.7 Applicable Law
This Agreement will be interpreted, construed and enforced in all respects
in accordance with the laws of the State of Washington without reference to its
choice of law rules.
13.8 Entire Agreement
13.8.1 This Agreement represents the entire agreement between the Parties
with respect to the matters addressed in this Agreement and, except as expressly
provided herein, may not be modified by any other agreements, representations or
understandings, whether oral or in writing. This Agreement supersedes all prior
agreements between the Parties, except that any covenants relating to
confidentiality, business record retention and other post-termination covenants
of prior agreements will survive.
13.8.2 This Agreement will be construed as a separate contract with each of
Company's Affiliates now or hereafter providing Service hereunder. If any such
Affiliate ceases to be affiliated with Company, such Affiliate may terminate
this Agreement (solely with respect to the Affiliate) upon thirty (30) days'
written notice to Channel Member (which notice may be given prior to
disaffiliation).
13.9 Amendments
Except as otherwise provided in this Agreement, no amendment, modification
or waiver of any of the provisions of this Agreement will be valid unless set
forth in a written instrument signed by the Party to be bound thereby.
Notwithstanding the foregoing, Company unilaterally may modify this Agreement at
any time, provided such modification is reasonably necessary to comply with the
laws, orders, regulations and approval requirements of governmental authorities
having jurisdiction over the Company's provision of Service hereunder. Company
will notify Channel Member as soon as practicable of any such modifications.
13.10 Severability
If any provision of this Agreement is held invalid under any applicable
law, such invalidity will not affect any other provision of this Agreement that
can be given effect without the invalid provision. Further, all terms and
conditions of this Agreement will be deemed enforceable to the fullest extent
permissible under applicable law and, when necessary, the arbitrator or court is
requested to reform any and all terms or conditions to give them such effect.
Channels Agreement - R 2/18/97
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Section 14. Independent Investigation
COMPANY AND CHANNEL MEMBER ACKNOWLEDGE THEY HAVE READ THIS AGREEMENT AND
UNDERSTAND AND ACCEPT THE TERMS AND CONDITIONS CONTAINED HEREIN AS BEING
REASONABLY NECESSARY TO MAINTAIN COMPANY'S HIGH STANDARDS FOR SERVICE. CHANNEL
MEMBER UNDERSTANDS THAT COMPANY MAY AT ANY TIME ALSO BE ENGAGED DIRECTLY OR
INDIRECTLY THROUGH OTHER CHANNEL MEMBERS, REPRESENTATIVES, DEALERS, RETAILERS,
OR OTHERWISE, IN SOLICITING POTENTIAL SUBSCRIBERS FOR SERVICE ON THE SAME OR
DIFFERENT TERMS AS THOSE PROVIDED TO CHANNEL MEMBER. CHANNEL MEMBER ALSO
UNDERSTANDS THAT COMPANY MAY SELL SERVICE TO OTHERS WHO MAY RESELL IT. CHANNEL
MEMBER HAS INDEPENDENTLY INVESTIGATED THE WIRELESS COMMUNICATIONS BUSINESS AND
THE PROFITABILITY (IF ANY) AND RISKS THEREOF AND IS NOT RELYING ON ANY
REPRESENTATION, GUARANTEE, OR STATEMENT OF COMPANY OTHER THAN AS SET FORTH
HEREIN. IN PARTICULAR, CHANNEL MEMBER ACKNOWLEDGES THAT COMPANY HAS NOT
REPRESENTED (A) CHANNEL MEMBER'S PROSPECTS OR CHANCES FOR SUCCESS SELLING
SERVICE UNDER THIS AGREEMENT, (B) THE TOTAL INVESTMENT THAT CHANNEL MEMBER MAY
NEED TO MAKE TO OPERATE UNDER THIS AGREEMENT (COMPANY DOES NOT KNOW THE AMOUNT
OF THE TOTAL INVESTMENT THAT MAY BE REQUIRED FOR THIS PURPOSE), OR (C) THAT IT
WILL LIMIT ITS EFFORTS TO SELL SERVICE OR ESTABLISH OTHER CHANNEL MEMBERS IN THE
AREA.
The Parties have entered into this Agreement through their respective
duly-authorized representatives on the date first above written. Compudawn, Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Exec. Vice Pres. Sales & Marketing
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇
AT&T Wireless Data, Inc. d/b/a AT&T Wireless
Services
By: /s/ illegible
Title: Director of Sales
Address: ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department
Telephone:(▇▇▇) ▇▇▇-▇▇▇▇
Channels Agreement - R 2/18/97
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Exhibit B
Channel Program Rules
Effective Date: February 1,1997
1. Incorporated Channel Program Agreement
These Channel Program Rules ("Program Rules") are a part of the AT&T
Wireless Data Channel Program Agreement (the "Agreement") that has been executed
by Company and Channel Member and, except as provided in paragraph 2 below, are
to be interpreted and administered in a manner consistent with the Agreement.
2. Inconsistencies in Terms
If any inconsistency or conflict exists between the Agreement, as it may be
amended from time to time, any prior Agreement, prior Data Solutions Program
Rules, prior Channel Member Rules or these Program Rules, these Program Rules
will control.
3. Defined Terms
In addition to the terms defined in the Agreement, the following terms will
have the meanings set forth below:
3.1 "Activation Date" means the date on which Company makes Service
available to a PDS Subscriber, or, in the case of a CDS Subscriber, the date on
which such CDS Subscriber is registered for CDS Service.
3.2 "CDS Enabling Device" means a circuit switched cellular modem, cable or
laptop computer that enables a laptop computer to access and to operate over
circuit switched cellular networks.
3.3 "CDS Service Revenues" means moneys received by Company from a CDS
Subscriber as payment for local cellular airtime used in connection with CDS
Service. For the period beginning upon execution of the Agreement and continuing
through such time as Company shall provide Channel Member with written notice,
CDS Service Revenues will be based upon a CDS Service Revenues usage profile of
Forty Dollars ($40) per month per Subscriber. For Subscriber Accounts with more
than 25 CDS Subscribers, Channel Member may request Company to establish a
higher usage profile based upon prospective usage information supplied by such
Subscriber Account, and Company may in its sole discretion establish a higher
usage profile for Subscribers associated with such Subscriber Account.
Channels Agreement - R 2/18/97
1
At such time as Company provides Channel Member with written notice, CDS
Service Revenues will change to:
For Subscribers who have been existing Company cellular voice customers for
at least three full calendar months prior to purchasing a CDS Enabling Device
and registering for CDS Service, CDS Service Revenues for each month will be
calculated as follows:
Cellular Service Revenues for that calendar month, minus such CDS
Subscriber's average monthly Cellular Service Revenues for the three
full calendar months immediately prior to such CDS Subscriber's
registration for CDS Service.
For Subscribers who are new Company cellular voice customers or have been
existing Company cellular voice customers for less than three full calendar
months prior to purchasing a CDS Enabling Device and registering for CDS
Service, CDS Service Revenues for each month will be calculated as follows:
Cellular Service Revenues for that calendar month, minus the average
monthly Cellular Service Revenues for Company's cellular voice
subscribers in the MSA or RSA in which the CDS Subscriber resides for
the three full calendar months immediately prior to such CDS
Subscriber's registration for CDS Service.
CDS Service Revenues shall specifically exclude moneys received by Company
from Subscribers for any CDS Service used in connection with a PocketNetTM
Service Access Device.
3.4 "CDS Subscriber" means a customer who purchases a CDS Enabling Device
from Channel Member, who is registered for CDS Service within thirty (30) days
of such purchase, and, if a new Number is activated for such customer, submits a
Subscriber Agreement for CDS Service (on a Company-authorized rate plan) through
Channel Member in compliance with the Agreement, which Subscriber Agreement is
accepted by Company.
3.5 "Cellular Service Revenues" means, for CDS Subscribers, moneys received
by Company from a CDS Subscriber for voice cellular usage and CDS Service usage.
Cellular Service Revenues shall specifically exclude long distance, toll, taxes,
roaming charges, activation fees, access fees, and feature charges. Cellular
Service Revenues shall be adjusted for CDS Subscriber credits and bad debt.
3.6 "Compensation Schedule" means the Channel Member compensation schedule
attached hereto and made a part hereof, as the same may be modified by Company
from time to time.
3.7 "Level 1 Customer Support" means direct, first contact customer support
regarding all aspects of Subscriber's use of the Service (whether arising in
connection with the Equipment, Application, hardware, software or Service)
including, for example, issues relating to modems,
Channels Agreement - R 2/18/97
2
protocol stacks, software configuration and setup, usability issues, Service
activation and Service coverage.
3.8 "PDS Service Revenues" means moneys received by Company from PDS
Subscribers as payment for packet data transmitted and received in connection
with PDS Service and does not include moneys from such charges as, without
limitation, activation fees, taxes, interconnection charges, and feature
charges. PDS Service Revenues will be adjusted for PDS Subscriber credits and
bad debt.
3.9 "PocketNetTM Service Access Device" means an integrated data and
cellular telephone device which enables PDS Subscribers to access PocketNetTM
Service.
3.10 "PDS Subscriber" means a customer who submits a Subscriber Application
for PDS Service or PocketNet Service (provided Channel Member is authorized to
solicit Subscribers to PocketNet Service as provided in Exhibit C to the
Agreement) on a Company-authorized rate plan through Channel Member in
compliance with the Agreement, which Subscriber Agreement is accepted by
Company, who is assigned a Number by Company, and who is activated for PDS
Service in compliance with the Agreement.
3.11 "Service Revenues" means, collectively, all applicable PDS Service
Revenues and CDS Service Revenues.
3.12 "Subscriber" means, collectively, all PDS Subscribers and CDS
Subscribers.
3.13 "Subscriber Account" means any group of Subscribers whose ▇▇▇▇ or
Numbers were assigned in connection with a single Person.
4. Activation Procedures
Channel Member will activate Subscribers in compliance with these Program
Rules and Company's then-current activation procedures. Company will provide
Channel Member with written activation procedures from time to time. In the
event Channel Member is activating Service for a PocketNet Service Access
Device, Channel Member shall only activate PDS Service, and must refer the voice
and CDS Service activation to Company.
5. Compensation
5.1 Company will compensate Channel Member for PDS Subscribers in
accordance with these Program Rules and the Compensation Schedule. Channel
Member will not receive any compensation, and shall not receive any credit
toward Channel Member's PDS Goal Attainment and PDS Minimum Performance
Standards, for any PDS Subscriber unless the PDS Subscriber's Service
application clearly indicates that Channel Member solicited the PDS Subscriber's
order for Service and such PDS Subscriber was activated in accordance with
Section 4. In addition, Channel Member
Channels Agreement - R 2/18/97
3
shall not be entitled to any compensation for a PDS Subscriber activating PDS
Service in connection with a PocketNet Service Access Device if Company has
previously paid any compensation to Channel Member or any Person other than
Company or its Personnel to obtain such PDS Subscriber as a cellular voice
subscriber in connection with such PocketNet Service Access Device.
5.3 If Channel Member is authorized to solicit CDS Subscribers pursuant to
the Agreement and Exhibit A thereto, Company will compensate Channel Member for
CDS Subscribers in accordance with these Program Rules and the Compensation
Schedule. Channel Member will not receive any compensation and shall not receive
any credit toward Channel Member's CDS Goal Attainment and CDS Minimum
Performance Standards for any CDS Subscriber unless Channel Member (a) submits
to Company satisfactory evidence that such CDS Subscriber purchased a CDS
Enabling Device from Channel Member, (b) such CDS Subscriber is registered for
CDS Service within thirty (30) days after such purchase, and (c) such CDS
Subscriber was activated in accordance with Section 4.
5.4 Compensation will be available for each Subscriber for a maximum of
four years from the Subscriber's Activation Date, provided, however,
compensation shall immediately terminate with respect to such Subscriber prior
to the expiration of such four years if (a) the Agreement terminates; (b)
Subscriber's agreement with Company terminates; or (c) Channel Member
discontinues providing Level l Customer Support to any Subscriber.
5.5 Company will pay Channel Member any earned compensation on a calendar
quarter basis, within thirty (30) days following the end of each calendar
quarter occurring during the term of the Agreement. Payments of the Goal
Attainment Fee will commence following the calendar quarter during which Channel
Member reached the applicable Attainment Goal, with the first such payment
including all amounts accrued since the beginning of the applicable calendar
year.
6. Customer Support Fee
6.1 Company will pay Channel Member the Customer Support Fee set forth in
the Compensation Schedule for each Subscriber referred to Company by Channel
Member which receives Level l Customer Support from Channel Member, based upon a
percentage of Service Revenues generated by such Subscriber, provided, however,
Channel Member shall not be entitled to receive a Customer Support Fee for any
CDS Subscriber for whom Company is currently paying a voice cellular residual to
any Person.
6.2 With respect to any given Subscriber, Channel Member will be eligible
to receive the Customer Support Fee only during the period in which Channel
Member is actually providing Level l Customer Support.
6.3 If, during any calendar quarter, Company receives service calls from
Subscribers which equal five percent (5%) or more of the total number of
Subscribers, Channel Member will be placed on support probation, and Company
will deduct from Channel Member's Customer Support
Channels Agreement - R 2/18/97
4
Fees for that calendar quarter that percentage equal to the percent of service
calls exceeding 5%. If Channel Member is on support probation for two
consecutive calendar quarters or more than two calendar quarters in any calendar
year, Company may immediately terminate the Agreement by giving written notice
to Channel Member.
7. Goal Attainment Fee
7.1 The PDS Goal Attainment level for the calendar year commencing in which
the Agreement is executed is Fifty Thousand Dollars ($50,000.00). To the extent
that PDS Service Revenues for new PDS Subscribers activated in that year are
equal to or greater than the PDS Goal Attainment level, Company will pay Channel
Member the PDS Goal Attainment Fee based upon eligible PDS Service Revenues for
all PDS Subscribers for whom Channel Member received Customer Support Fees in
that calendar year, and not just such new PDS Subscribers. The PDS Goal
Attainment level for subsequent calendar years may be adjusted by providing
Channel Member with written notice of the PDS Goal Attainment level within
thirty (30) days of the commencement of that year.
7.2 The CDS Goal Attainment level for the calendar year commencing in which
the Agreement is executed is Fifty Thousand Dollars ($50,000.00). To the extent
that CDS Service Revenues for new CDS Subscribers activated in that year are
equal to or greater than the CDS Goal Attainment level, Company will pay Channel
Member the CDS Goal Attainment Fee based upon eligible CDS Service Revenues for
all CDS Subscribers for whom Channel Member received Customer Support Fees in
that calendar year, and not just such new CDS Subscribers. The CDS Goal
Attainment level for subsequent calendar years may be adjusted by providing
Channel Member with written notice of the CDS Goal Attainment level within
thirty (30) days of the commencement of that year.
7.3 If Channel Member's Agreement with Company begins after January 3l of
any year, Company will prorate the above Goal Attainment levels for the first
year of the Agreement, to reflect the actual portion of the year the Agreement
was in effect.
8. Processing Fee
Company will pay Channel Member a Processing Fee pursuant to these Program
Rules and as set forth in the Compensation Schedule. If a Subscriber activates a
PocketNet Service Access Device, Channel Member will be paid only one Processing
Fee.
9. Minimum Performance Standard
9.1 During each calendar year, PDS Subscribers for whom Channel Member is
receiving Customer Support Fees must generate PDS Service Revenues for Company
of at least Thirty Thousand Dollars ($30,000.00). If such PDS Subscribers fail
to generate PDS Service Revenues in the amount of Seven Thousand Five Hundred
Dollars ($7,500.00) in any calendar quarter, Channel
Channels Agreement - R 2/18/97
5
Member will be placed on probation. If, during the following calendar quarter,
PDS Subscribers fail to generate PDS Service Revenues of at least Seven Thousand
Five Hundred Dollars ($7,500.00), Company may immediately terminate the
Agreement for cause by giving Channel Member written notice. Any failure by
Company to terminate Channel Member in such event will not be considered a
waiver, and Company will retain the right to terminate Channel Member for any
subsequent failure by PDS Subscribers to generate PDS Service Revenues of at
least Seven Thousand Five Hundred Dollars ($7,500.00) during any calendar
quarter. Company, in its sole discretion, may change the PDS Minimum Performance
Standard once per calendar year by giving Channel Member written notice.
9.2 During each calendar year, CDS Subscribers for whom Channel Member is
receiving Customer Support Fees must generate CDS Service Revenues for Company
of at least Thirty Thousand Dollars ($30,000.00). If such CDS Subscribers fail
to generate CDS Service Revenues in the amount of Seven Thousand Five Hundred
Dollars ($7,500) in any calendar quarter, Channel Member will be placed on
probation. If, during the following calendar quarter, CDS Subscribers fail to
generate CDS Service Revenues of at least Seven Thousand Five Hundred Dollars
($7,500.00), Company may immediately terminate the Agreement for cause by giving
Channel Member written notice. Any failure by Company to terminate Channel
Member in such event will not be considered a waiver, and Company will retain
the right to terminate Channel Member for any subsequent failure by CDS
Subscribers to generate CDS Service Revenues of at least Seven Thousand Five
Hundred Dollars ($7,500.00) during any calendar quarter. Company, in its sole
discretion, may change the CDS Minimum Performance Standard once per calendar
year by giving Channel Member written notice.
9.3 If Channel Member's Agreement with Company begins after January 3l of
any year, Company will prorate the above Minimum Performance Standards for the
first year of the Agreement, to reflect the actual portion of the year the
Agreement was in effect.
10. Technical and Support Personnel
10.1 Within ninety (90) days following the execution of the Agreement,
Channel Member continuously will maintain at least one full time technical
support person who has received a Wireless Data Technical Support Certificate.
If Channel Member fails to maintain a certified technical support person in
compliance with this paragraph, Company immediately may terminate the Agreement
for cause by giving Channel Member written notice. Company's failure to so
terminate the Agreement will not constitute a waiver of its right to terminate
the Agreement at any time Channel Member is in violation of this paragraph.
10.2 Within ninety (90) days following the execution of the Agreement,
Channel Member continuously will maintain at least one full time customer
support person who has received a Wireless Data Customer Support Certificate. If
Channel Member fails to maintain a certified customer support person in
compliance with this paragraph, Company immediately may terminate the Agreement
for cause by giving Channel Member written notice. Company's failure to so
Channels Agreement - R 2/18/97
6
terminate the Agreement will not constitute a waiver of its right to terminate
the Agreement at any time Channel Member is in violation of this paragraph.
11. Lead Distribution System
11.1 Company periodically may furnish Channel Member with the names of
potential sales opportunities. Company will distribute leads to Channel Member
only if Company determines (in its sole discretion) that the opportunities are
suitable for Channel Member, taking into consideration Channel Member's
expertise, location, targeted market and other relevant factors. If Company
determines that certain leads are suitable for more than one channel member or
other authorized representative, Company, in its sole discretion (a) will
allocate those leads among qualified members in a reasonable manner, or (b)
distribute the lead to all qualified members.
11.2 Within two Business Days following Channel Member's receipt of any
lead, Channel Member will notify Company whether Channel Member intends to
pursue the sales opportunity. If Channel Member elects to pursue the lead,
Channel Member will follow Company's lead solicitation policies in pursuing such
lead. If Channel Member rejects the lead, or fails to respond to Company within
the two Business Days, Company may assign the lead to another Channel Member or
pursue the lead directly. Should Channel Member desire to pursue the lead after
rejecting it or failing to respond in two Business days Channel Member must
first obtain written permission from Company to pursue the lead. If Channel
Member repeatedly fails to respond to leads in a timely manner, Channel Member
will be deemed ineligible to participate in the lead distribution system.
Channels Agreement - R 2/18/97
7
Compensation Schedule
February l, 1997
PDS Service
Year Processing Customer Goal Total
Fee New Support Attainment Possible
Subscriber Fee Fee
Bonus
l $35 10%* 2%* 12%
2 10%* 2%* 12%
3 10%* 2%* 12%
4 10%* 2%* 12%
* of PDS Service Revenues
Channels Agreement - R 2/18/97
8
Exhibit C
Service
PDS Service
PocketNetTM Service
Channels Agreement - R 2/18/97
9