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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
AMENDMENT #1
(Mark One)
(X) Annual Report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended December 31, 1998, or
( ) Transition Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from __________________ to
__________________.
Commission File Number: 000-22251
BOBBY ALLISON WIRELESS CORPORATION f/k/a 2CONNECT EXPRESS, INC.
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(Name of Small Business Issuer in Its Charter)
FLORIDA 65-0674664
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(State of Incorporation (I.R.S. Employer Identification No.)
or organization)
2055 Lake Avenue, S.E., Suite A, Largo, Florida 33771
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(Address of Principal Executive Offices) (Zip Code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.01 Per Share
Check whether the issuer: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
past 12 months (or for such shorter period that the Company was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes No X
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Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained herein, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. ( )
State issuer's revenues for the most recent fiscal year. $8,146,369
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked prices of such common
equity, as of a specified date within the past 60 days. $0 as of May 14, 1999.
Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934
after the distribution of securities under a plan confirmed by a court.
Yes No X
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State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. 480,000 shares of Common
Stock, par value $.01 per share, as of May 14, 1999.
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PREFACE
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The purpose of this Amendment #1 to the Bobby Allison Wireless
Corporation (the "Company") Form 10-KSB is, in accordance with the
representations in the Index to Exhibits of the initial filing, to attach the
Exclusive Regional Retail Dealer Agreement, effective December 1, 1998, by and
between Bobby Allison Cellular Systems of Florida, Inc. and AT&T Wireless
Services of Florida, Inc. d/b/a AT&T Wireless Services, certain provisions of
which are subject to a request for confidential treatment filed with the
Securities and Exchange Commission.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits: The exhibits required to be filed by this Item 13(a) are listed
herein on the Index to Exhibits on page 4 and are hereby incorporated herein by
reference.
(b) Reports on Form 8-K: The Company filed the following Form 8-K's during the
quarter ended December 31, 1998 which includes a listing of the items reported,
whether any financial statements were attached and the dates of such reports
(1) Bobby Allison Wireless Corporation f/k/a 2Connect Express, Inc. (the
"Company") Current Report on Form 8-K filed September 1, 1998 reporting a change
of control under Item 2 of Form 8-K, the execution of the Agreement between the
Company and Sterne, Agee & Leach, Inc. dated August 27, 1998 under Item 5 of
Form 8-K and the resignation of certain directors under Item 6 of Form 8-K. No
financial statements are attached to this Form 8-K.
(2) Bobby Allison Wireless Corporation f/k/a 2Connect Express, Inc. (the
"Company") Current Report on Form 8-K filed September 25, 1998 reporting the
filing of the Monthly Financial Report with the Bankruptcy Court under Item 5 of
Form 8-K which included as an exhibit the Monthly Financial Report for the
period from August 2, 1998 to August 29, 1998.
(3) Bobby Allison Wireless Corporation f/k/a 2Connect Express, Inc. (the
"Company") Current Report on Form 8-K filed October 26, 1998 reporting the
filing of the Monthly Financial Report with the Bankruptcy Court under Item 5 of
Form 8-K which included as an exhibit the Monthly Financial Report for the
period from August 30, 1998 to October 3, 1998.
(4) Bobby Allison Wireless Corporation f/k/a 2Connect Express, Inc. (the
"Company") Current Report on Form 8-K filed November 18, 1998 reporting the
filing of the Monthly Financial Report with the Bankruptcy Court under Item 5 of
Form 8-K which included as an exhibit the Monthly Financial Report for the
period from October 4, 1998 to October 31, 1998.
2
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SIGNATURES
In accordance with Section 13 or 15(d) and Rule 12b-15 of the
Securities Exchange Act of 1934, as amended, the Company caused this amended
report to be signed on its behalf by the undersigned, thereunto duly authorized.
BOBBY ALLISON WIRELESS CORPORATION f/k/a
2CONNECT EXPRESS, INC.
By: /s/ Robert L. McGinnis
-----------------------------------------
Name: Robert L. McGinnis
Title: Chairman of the Board and Chief Executive
Officer
Date: July 20, 1999
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FORM 10-KSB
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description Page
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3.1 First Amended and Restated Articles of Incorporation of the Company, as
amended (4)(5)(7)
3.2 Bylaws of Company (1)
3.3 Amendment to Bylaws dated June 1, 1999
4.1 Specimen Stock Certificate of Company (1)
9.9 Voting Trust Agreement with Mark D. Fisherman (1)(8)
10.1 2Connect Express, Inc. 1996 Stock Option Plan (1)(8)
10.2 2Connect Express, Inc. Director's Option Plan (1)(8)
10.3 Amended and Restated Employment Agreement with Marc. D. Fisherman
dated as of April 1, 1997 (1)(8)
10.4 Employment Agreement between the Company and Kevin Killoran dated
June 17, 1997 (1)(8)
10.5 Employment Agreement between the Company and Michael Wichelns dated
June 17, 1996 (1)(8)
10.6 Employment Agreement between the Company and Jeff Manly dated June 17,
1996 (1)(8)
10.7 Form of Indemnification Agreement between Company and Marc D. Fisherman
(1)(8)
10.8 Form of Indemnification Agreement between Company and Steven Stedman
(1)(8)
10.9 Form of Indemnification Agreement between Company and Jeff Manly (1)(8)
10.10 Form of Indemnification Agreement between Company and Kevin Killoran
(1)(8)
10.11 Form of Indemnification Agreement between Company and Ira Neimark (1)(8)
10.12 Form of Indemnification Agreement between Company and David Colby (1)(8)
10.13 Form of Indemnification Agreement between Company and Lynn Tilton (1)(8)
10.14 Form of Indemnification Agreement between Company and Arnold Jaffee (1)(8)
10.15 Management Agreement between the Company and Bobby Allison Cellular
Systems of Florida, Inc. (2)
</TABLE>
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<TABLE>
<CAPTION>
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10.16 Agreement by an between the Company and Sterne, Agee & Leach, Inc. dated
August 27, 1998 (3)
10.17 Debtor's Amended Plan of Reorganization file June 24, 1998 (4)
10.18 Second Amended Disclosure Statements for Amended Plan of Reorganization
filed June 24, 1998 (4)
10.19 First Modification to Amended Plan of Reorganization dated August 7, 1998 (4)
10.20 First Modification to Second Amended Disclosure Statement dated August 7,
1998 (4)
10.21 Second Modification to Amended Plan of Reorganization filed August 28, 1998
(4)
10.22 Merger Agreement by and among the Company, 2Connect Acquisition Corp.,
Bobby Allison Cellular Systems of Florida, Inc. and the shareholders of Bobby
Allison Cellular Systems of Florida, Inc. dated May 1, 1998, as amended
October 26, 1998. (5)
10.23 Employment Agreement of Robert L. McGinnis (5)
10.24 Employment Agreement of James L. Ralph (5)
10.25 License Agreement with Robert A. Allison a/k/a Bobby Allison(9)
10.26* Exclusive Regional Retail Dealer Agreement, effective December 1, 1998, by
and between Bobby Allison Cellular Systems of Florida, Inc. and AT&T
Wireless Services of Florida, Inc. d/b/a AT&T Wireless Services................... 7
10.27 Bobby Allison Wireless Corporation 1999 Stock Option Plan(9)
16.1 Letter of KPMG LLP on change of accountants (6)
21.1 Subsidiaries of Bobby Allison Wireless Corporation f/k/a 2Connect Express,
Inc. (9)
27.1 Financial Data Schedule(9)
</TABLE>
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* Certain provisions of this exhibit are subject to a request for
confidential treatment filed with the Securities and Exchange Commission.
(1) Registration Statement on Form SB-2 with respect to the units of Bobby
Allison Wireless Corporation f/k/a/ 2Connect Express, Inc. (Commission
File No. 333-15567) is incorporated by in reference into Part III of this
report.
(2) The Bobby Allison Wireless Corporation f/k/a 2Connect Express, Inc.
Quarterly Report on Form 10-QSB for the quarter ended August 1, 1998
(Commission File No. 000-22251), is incorporated by reference into Part
III of this report.
(3) The Bobby Allison Wireless Corporation f/k/a 2Connect Express, Inc.
Current Report on Form 8-K for the event occurring on August 27, 1998
(Commission File No. 000-22251), is incorporated by reference into Part
III of this report.
(4) The Bobby Allison Wireless Corporation f/k/a 2Connect Express, Inc.
Quarterly Report on Form-10SB for the quarter ended October 31, 1998
(Commission File No. 000-22251), is incorporated by reference into Part
III of this report.
(5) The Bobby Allison Wireless Corporation f/k/a 2Connect Express, Inc.
Current Report on Form 8-K for the event occurring on December 31, 1998
(Commission File No. 000-22251), is incorporated by reference into Part
III of this report.
(6) The Bobby Allison Wireless Corporation f/k/a 2Connect Express, Inc.
current report on Form 8-K for the event occurring on January 7, 1999
(Commission File No. 000-22251), is incorporated by reference into Part
III of this report.
(7) The Bobby Allison Wireless Corporation f/k/a 2Connect Express, Inc.
current report on Form 8-K for the event occurring on March 1, 1999
(Commission File No. 000-22251), is incorporated by reference into Part
III of this report.
(8) Each of these documents have either expired or were terminated upon the
confirmation of the Company's Plan of Reorganization confirmed by the
U.S. Bankruptcy Court, Southern District of Florida on October 27, 1998.
(9) Previously filed with the initial filing of this Form 10-KSB for the year
ended December 31, 1998.
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EXHIBIT 10.26
EXCLUSIVE REGIONAL
RETAIL DEALER AGREEMENT
BETWEEN
AT&T WIRELESS SERVICES
OF FLORIDA, INC.
d/b/a
AT&T WIRELESS SERVICES
AND
BOBBY ALLISON CELLULAR SYSTEMS OF FLORIDA, INC.
AT&T Proprietary & Confidential
Use Pursuant to Company Instructions
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This Exclusive REGIONAL RETAIL DEALER AGREEMENT ("Agreement") is
effective as of December 1, 1998, between BOBBY ALLISON CELLULAR SYSTEMS OF
FLORIDA, INC., a Florida Corporation with a business address at 2055 Lake
Avenue, S.E. Suite A Largo, FL 33461 (the "Dealer") and AT&T WIRELESS SERVICES
OF FLORIDA, INC., d/b/a AT&T WIRELESS SERVICES, a Florida corporation on behalf
of itself and its affiliates holding licenses to provide Service within the
State of Florida (collectively "Company").
Company has received regulatory authority to operate as a
facilities-based provider of Commercial Mobile Radio Service ("Service") within
certain areas set forth in the attached Schedule 1 within the State of Florida,
which areas may change from time to time (collectively, the "Area").
Company desires to provide Service in the Area through other dealers,
resellers, direct sales to potential Subscribers and through other channels of
distribution as Company may develop from time to time. Dealer desires to sell
Equipment and to offer the Company's Service to potential customers who are the
ultimate users of Service provided by or through the Company ("Subscribers") in
the Area under the terms set forth below.
Based on the mutual benefits and agreements herein, the parties agree
as follows:
DEFINITIONS: As used in this Agreement, the following terms have the
meanings specified herein:
a. AFFILIATE. Any person, company, partnership or other entity, or its
successors or assigns, that directly or indirectly, through one or more
intermediaries controls, is controlled by, or is under common control with
Dealer, or that directly or indirectly owns 20% or more of Dealer, or 20% or
more of which is owned directly or indirectly by Dealer or by a 20% or more
owner of Dealer, or the parents, spouse, and children of any person who owns 20%
or more of Dealer or controls any part of Dealer, directly or indirectly, and
all employees, contracted workers and officers of Dealer.
b. COMPETITIVE SERVICE. Any wireless telecommunications service offered
by any person, entity, or business (other than Company) in the Area, which is
capable of providing functionally similar or equivalent wireless voice or data
service to Company's Service, irrespective of the radio frequency on which the
services are offered, including, without limitation: enhanced specialized mobile
radio communications, digital mobile radio communications, specialized mobile
radio communications, mobile satellite communications, personal communications
services, personal communications networks, and similar technologies.
Competitive Services does not include paging services, except for paging
services with two-way voice transmission capabilities.
AT&T Proprietary and Confidential
Use Pursuant to Company Instructions
2
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CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
1. RELATIONSHIP OF THE PARTIES
1.1 AUTHORIZATION.
1.1.1 Company hereby authorizes Dealer and Dealer hereby
agrees to offer and obtain orders exclusively for the Company's Service under
Service rate plans authorized by Company ("Authorized Rate Plans") through all
of Dealer's approved outlets in the Area, subject to the terms and conditions
contained herein and subject to all Policies and Procedures that may be issued
by Company from time to time.
1.1.2 ************
1.1.3 Any telemarketing effort to solicit customers from the
general public must be approved in writing by Company before Dealer's
telemarketing effort begins.
1.1.4 Dealer acknowledges that the Company may offer Service
directly, and may appoint other dealers, and others who may offer or sell the
Company's Service in the Area, and may also sell wireless telephones and related
equipment and provide installation, repair or warranty service.
1.1.5 In performing their duties hereunder, Dealer and the
Company must adhere strictly to the highest standards of fair dealing and
ethical business conduct, and Dealer must refrain from any business practice,
promotion or advertising which may be injurious to the business or good will of
Company.
1.2 NATURE OF RELATIONSHIP. In all dealings within the scope of this
Agreement, the parties acknowledge and agree that the relationship created by
this Agreement is that of independent contracting parties and is not, and will
not be deemed to be any other relationship, including, without limitation, that
of joint venturers, joint employers, or partnership. Dealer is not a general
agent of Company. When conducting business under this Agreement, Dealer must
identify itself as an "Authorized Dealer" of Company. Dealer has not paid and
will not be required to pay any franchise fee or other fee to be a dealer for
Company or to use Company's name or other intellectual property. This Agreement
does not create any franchise between the parties.
1.3 NO OTHER AGREEMENTS. Dealer represents and warrants to Company that
the execution and performance of this Agreement does not and will not violate
any other contract or obligation to which Dealer is a party, including terms
relating to covenants not to compete and confidentiality covenants. Dealer will
not disclose to Company, or use or induce Company to use, any proprietary
information or trade secrets of any other person, association or entity. Dealer
represents
AT&T Proprietary and Confidential
Use Pursuant to Company Instructions
3
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and warrants that it has returned all property and confidential information
belonging to all prior employers or service providers for whom Dealer may have
acted as a dealer.
1.4 WIRELINE SERVICES; NO SLAMMING.
1.4.1 Upon Dealer's completion of all training required by
Company regarding Wireline Services and signing of Company's Slamming
Guidelines, Company hereby authorizes Dealer, and Dealer hereby is eligible to
offer and obtain orders for certain Wireline Services under calling plans
authorized by AT&T through all of Dealer's outlets in the Area in which Dealer
offers and obtains orders for Company's Service under this Agreement or any
other distribution agreement entered into between Company and Dealer; except
that Dealer is not authorized to engage in any telemarketing efforts with
respect to the Wireline Services, even if performed in conjunction with wireless
services. The terms and conditions under which Dealer may offer Service under
this Agreement apply to Dealer's authorization to offer Wireline Services,
including without limitation Dealer's obligations regarding non-solicitation of
Subscribers, confidentiality, and compliance with all Company Policies and
Procedures. The Policies and Procedures contained in Company's training
regarding Wireline Services, as these Policies and Procedures may be amended
from time to time by Company, are incorporated into this Agreement.
1.4.2 Company may terminate this Agreement or Dealer's right
to sell Wireline Services immediately upon written notice to Dealer in the event
that Dealer engages in "Slamming" or any other activities prohibited by law with
respect to the Wireline Services three or more times per market area per year.
For the purposes of this Agreement, "Slamming" means the fraudulent solicitation
of a wireline subscriber (long distance or otherwise) resulting in the
authorized switching of the subscriber from one telecommunications company to
another. The determination as to whether Dealer engaged in Slamming will be made
by Company in its sole discretion. Dealer specifically agrees to follow and
abide by the Slamming Guidelines attached hereto.
1.5 TRAINING. Company will provide training to Dealer in a form and to
the extent necessary to properly offer and sell Service.
1.6 PROMOTIONAL LITERATURE. Company will provide to each of Dealer's
retail locations in the Area (including locations opened after the date hereof),
during the Agreement reasonable quantities of Company's promotional literature
including coverage maps, pricing information and Service forms.
2. DUTIES AND RESPONSIBILITIES OF DEALER
2.1 GENERAL. Dealer must faithfully, honestly and diligently perform
its obligations under this Agreement, and must use its best efforts to promote
and enhance the use of Service provided by or through Company. Dealer will take
no action inconsistent with the provisions of this Agreement and must support
the Company's efforts in providing Service to Subscribers. Dealer must provide
timely, courteous and efficient service to customers and must be governed in all
dealings with
AT&T Proprietary and Confidential
Use Pursuant to Company Instructions
4
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members of the public and with Company by the highest standards of honesty,
integrity, ethical conduct and fair dealing, Dealer must refrain from any
business practice, promotion or advertising which may be injurious to the
business or good will of Company, Neither Dealer nor any Affiliate may be a
reseller of Company's Service.
2.2 CONFIDENTIALITY.
2.2.1 Dealer acknowledges that it may be in receipt of certain
confidential proprietary information relating to the Company, including without
limitation, lists of Subscribers, financial and business information, including
commission structures, technical information and other information not generally
known to the public relating to the Company, including the terms of this
Agreement (collectively, "Confidential Information"). Dealer acknowledges that
any Confidential Information of the Company that has been disclosed to Dealer
has been disclosed solely for the performance of its duties under this
Agreement. Dealer agrees that all Confidential Information of the Company is the
exclusive property of the Company. Dealer further acknowledges that the
disclosure or improper use of such Confidential Information would irreparably
injure the Company and that Company's Confidential Information is a trade secret
of Company.
2.2.2 Dealer agrees that, during and after the term of this
Agreement, neither Dealer, nor any employee, Affiliate, or other person or
entity otherwise connected with Dealer, may directly or indirectly, without the
prior written consent of the Company, divulge, use, sell, exchange, give away or
transfer any Company Confidential Information. Dealer further agrees that it
will advise its employees of these restrictions and will use reasonable efforts
to prevent the disclosure or the improper use of Confidential Information by any
current or former employees.
2.2.3 If Dealer is served with any form of process to obtain
any Confidential Information of Company, the Dealer must immediately notify
Company which has the right to seek to quash such process.
2.3 NON-SOLICITATION/NON-DIVERSION. Dealer agrees, during the term of
this Agreement and for one year thereafter, neither Dealer nor any of its
Affiliates will contact Company's Subscribers for the purpose of soliciting or
giving incentive to those Subscribers to encourage them to terminate their
agreement with Company or to convert to a competitive Service provider within
the Area, nor will such entities offer any incentive or compensation to
encourage Company Subscribers to terminate their agreement with Company. During
this period, any Subscribers who contact Dealer must be referred directly to
Company. Dealer is responsible for ensuring compliance with this paragraph by
its personnel.
AT&T Proprietary and Confidential
Use Pursuant to Company Instructions
5
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2.4 SOLICITATION AND ENROLLMENT.
2.4.1 Dealer must solicit Subscriber subscriptions strictly in
accordance with the Policies and Procedures for enrollment of Subscribers, as
will be issued by Company from time to time. Company has the sole right to
accept or reject all customer applications for Service. Dealer may be
responsible for activating a minimum number of Authorized Subscribers if set
forth in the Policies and Procedures. Dealer must market Service to potential
Subscribers under Authorized Rate Plans at prices and on terms established by
Company. Dealer has no authority to offer any other rates, rate plans, terms, or
conditions to Subscribers for Service. Dealer must maintain in stock Company's
current calling plan brochures and other materials required in the Policies and
Procedures. Once activated, the Subscriber becomes a customer of Company. Except
as expressly provided herein, Dealer has no right or obligation to bill or
collect from Subscribers or potential Subscribers any money or charges for
Service, and any such moneys received will be received in trust for Company.
2.4.2 Dealer will assist Company's efforts to prevent
fraudulent or abusive use of Company's Service and will comply with all fraud
prevention Policies and Procedures issued by Company from time to time.
2.4.3 Dealer must provide adequate training for its
salespersons regarding the solicitation and enrollment of Subscribers, the
operation of Service, and the provision and maintenance of Equipment.
2.4.4 Dealer must not process any application for Service or
facilitate Service enrollment that would in any way inflate the amount of
compensation payable to Dealer for a Subscriber beyond what is contemplated by
this Agreement.
2.5 REGULATORY MATTERS. This Agreement is subject to changes or
modifications necessary to comply with, and any necessary approvals of, local,
state and federal regulatory agencies having jurisdiction over the offering or
provision of Service in the Area and/or Dealer's activities in connection
therewith. Accordingly, Company may add, delete, suspend or modify the rates
for, and/or features included in, Service, and determine whether such changes
apply to both existing or future Subscribers, and will notify Dealer as soon as
practicable of each such modification. Dealer may not take any action
inconsistent with any efforts by the Company before regulatory authorities or
others regarding any modification of rates for Service.
2.6 EXCLUSIVITY.
2.6.1 During the term of this Agreement (and any extensions
thereof) and through all of Dealer's locations in the Area (including locations
opened after the date of this Agreement), neither Dealer nor any Affiliate, may
directly or indirectly, without the written consent of the Company, (a) solicit,
sell, offer, or accept offers for a Competitive Service, (b) induce or refer any
actual or prospective Subscriber of Company's Service to subscribe to a
Competitive Service, (c)
AT&T Proprietary and Confidential
Use Pursuant to Company Instructions
6
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provide any Subscriber leads to a Competitive Service, or (d) activate
Subscribers through a reseller or act as a reseller of Service, whether for
Company's Service or a Competitive Service.
2.6.2 Dealer acknowledges that in the event that Dealer
knowingly assists in the activation of Subscribers solicited by it, or by
Persons acting on its behalf or pursuant to contracts between such Persons and
Dealer, on Competitive Service, the Company will suffer monetary damages and
loss of good will the value of which is difficult to measure. Dealer, therefore,
hereby agrees to pay the Company as liquidated damages the sum of $1500 for each
of its subscribers it activates on a Competitive Service, which sum Dealer
agrees is reasonable, Dealer must, upon the Company's written notice, make its
books and records available to the Company and its representative to permit
verification of Dealer's compliance with this section and in the event of
Dealer's refusal to permit such inspection, Dealer will pay to the Company as
liquidated damages a sum equal to $1500 multiplied by the number of suspected
violations of this section as notified by the Company to Dealer. Acceptance by
the Company of liquidated damages on any one or more occasions of Dealer's
breach of its obligations arising under this section does not preclude or limit
in any manner Company's right to terminate this Agreement upon any breach by
Dealer of its obligations under this section as permitted by Section 8 of this
Agreement. It is understood the Dealer conducts, or may conduct, similar
activities for Competitive Services outside the Area. Company agrees that the
terms of this paragraph relate solely to Dealer's activities in the Area.
2.6.3 Any claim for liquidated damages must be submitted to
the Dealer by the Company no later than 6 months from the date of an identified
violation, or that claim is waived.
2.7 COVENANT NOT TO COMPETE.
2.7.1 Dealer covenants and agrees that for a period of 6
months after termination of this Agreement (whether voluntary or involuntary,
with or without cause), Dealer, its Affiliates, and any successor entity to
Dealer and its Affiliates will not,
(i) directly or indirectly compete with Company, its
affiliates or its Dealers, Retailers or other distributors of Company's Service
within the Area in the business of offering, providing, marketing, procuring or
referring Subscribers or potential Subscribers to a Competitive Service; or
(ii) act or serve as an owner, partner, shareholder,
employee, agent, consultant or formal or informal advisor of any person or
entity that offers, promotes, or refers customers to any Competitive Service.
2.7.2 Dealer acknowledges that (a) by being appointed a dealer
it will obtain significant competitive information that would give Dealer an
unfair competitive advantage if Dealer were to compete with Company, Company's
affiliates or Company's distribution after termination of this Agreement, and
(b) that its willingness to provide Company with the protections set forth in
this
AT&T Proprietary and Confidential
Use Pursuant to Company Instructions
7
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section 2.7 was a material consideration to Company entering into this Agreement
and that Company would not have done so without such protection.
2.7.3 Dealer is not bound by the Non-Compete provisions of
this section 2.7 if Company terminates this Agreement without cause under
section 8.3 or if Dealer terminates this Agreement for cause under section 8.1
and Company does not dispute Dealer's grounds for termination in good faith.
2.8 DEPOSITS/BILLING AND COLLECTIONS. Dealer must, as trustee for
Company, collect deposits and advance payments required by Company from new
Subscribers prior to activation. These payments must be made payable to Company
only, not to Dealer and must be delivered to Company in accordance with
activation procedures set forth in the Policies and Procedures issued by Company
from time to time.
2.9 NO CO-LOCATION OF COMPETITIVE SERVICES. Dealer is prohibited from
leasing or subleasing space to any Competitive Service provider or seller at any
location where Dealer promotes or sells Service in the Area, and Dealer is
prohibited from permitting any Competitive Service provider or seller to use
space Or share resources at any location that is leased, owned or controlled by
Dealer and is used to promote or sell the Service within the Area.
2.10 STORE FRONT LOCATION. Dealer must operate its business under this
Agreement at a location suitable for transacting business, which contains a
display with Company brochures and advertising materials. Each of Dealer's store
locations must be maintained in a first-class manner in order to promote and
Protect company's business, reputation, and goodwill. Dealer may not establish
any other location from which to conduct business under this Agreement without
the prior written consent of Company, which may be granted or withheld in
Company's sole discretion. Company has no liability to Dealer in connection with
its approval of any location of Dealer or of any other dealer; Company's
approval does not imply any assessment of the potential Profits or losses which
may arise from Dealer's operations at any location. Company may base its
decision on confidential information regarding its business plans and may
decline to provide any reason for its decisions. Notwithstanding the foregoing,
if the activities authorized under this Agreement are less than 10% of the total
business conducted at the store location(s), Company will not Object to the
solicitation of potential Subscribers at a new location of the same type unless
Company can show substantial harm from this activity.
3. EQUIPMENT
3.1 AUTHORIZED EQUIPMENT. In connection with its obligations under this
Agreement, Dealer hereby agrees that it will sell models of equipment so that
each unit of equipment meets FCC and reasonable Company technical standards, is
compatible for use with the Company's Service and complies with any
authentication or other fraud prevention specifications used by Company in the
Area ("Equipment"). Dealer must not recommend, sell, or furnish any equipment
disapproved by the FCC or Company for failure to meet minimum technical,
security, and reliability standards.
AT&T Proprietary and Confidential
Use Pursuant to Company Instructions
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3.2 DEALER PURCHASE OF EQUIPMENT.
3.2.1 Company may sell Equipment to Dealer at prices
established by Company from time to time. All purchases must be made by Dealer
in the form of a written purchase order which must be placed with Company,
subject to acceptance by Company. The terms and conditions appearing on the
purchase order form and made a part of this Agreement are limited to the
following: (i) order number, (ii) delivery information, (iii) quantity, (iv)
description, (v) price, (vi) tax, (vii) freight, and (viii) signed purchase
authorization. Any other terms or terms inconsistent with this Agreement
contained in the purchase order are deemed deleted and of no force or effect.
3.2.2 If Dealer meets all Company credit standards, payment
for Equipment sold to Dealer is due 30 days from the date of invoice. Late
payments by Dealer may be subject to a finance charge of 1.5 percent per month
or up to the legally allowed rate, whichever is less.
3.2.3 If Dealer fails to make payment for Equipment delivered
under this Agreement, or if, in Company's reasonable opinion, Dealer's financial
condition is such that Company does not feel secure in obtaining payments for
shipments of Equipment, Company may, at any time, (i) limit or cancel the credit
of Dealer as to time and amount, (ii) demand payment in cash on or before
delivery, or (iii) declare the amount outstanding immediately due and payable,
which amount must then be paid by Dealer within 10 days after notice by Company
that the entire sum is due and payable.
3.3 WARRANTY.
3.3.1 MANUFACTURER'S WARRANTY. A Manufacturer's Limited
Warranty statement, a copy of which accompanies each unit of Equipment, is the
only warranty, except for warranty of title, provided with the Equipment
furnished hereunder. Dealer must make the Limited Warranty statement readily
available to Dealer's end-user purchasers prior to sale. Any warranty
representations made by Dealer which are in addition to the representations in
the Limited Warranty statement must apply against Dealer only and any costs,
administrative, legal or otherwise connected with any additional warranty
statements must be done by Dealer. Dealer must indemnify and hold Company
harmless from all direct and indirect results and consequences flowing from such
statements.
3.3.2 DISCLAIMER OF WARRANTY BY COMPANY. COMPANY DISCLAIMS ALL
WARRANTIES ON EQUIPMENT FURNISHED HEREUNDER INCLUDING WITHOUT LIMITATION, ALL
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, OR
ANY OTHER WARRANTY OF QUALITY, WHETHER EXPRESS OR IMPLIED, EXCEPT THE WARRANTY
OF TITLE.
3.4 LIMITATION OF LIABILITY FOR EQUIPMENT PURCHASED. IN NO EVENT WILL
COMPANY BE LIABLE TO DEALER, OR TO ANY PERSON OR PARTY PURCHASING FROM DEALER OR
USING ANY EQUIPMENT SUPPLIED UNDER THIS AGREEMENT, OR TO ANY PERSON OR PARTY TO
WHOM DEALER OTHERWISE FURNISHES EQUIPMENT, FOR LOSS OF TIME, INCONVENIENCE, LOSS
OF USE OF ANY EQUIPMENT OR
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PROPERTY DAMAGE CAUSED BY ANY EQUIPMENT OR ITS FAILURE TO WORK, OR FOR ANY OTHER
INDIRECT, SPECIAL, RELIANCE, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE ARISING
OUT OF THIS AGREEMENT OR ANY OBLIGATION RESULTING THEREFROM, OR FROM THE USE OR
PERFORMANCE OF ANY EQUIPMENT, WHETHER IN AN ACT10N FOR OR ARISING OUT OF ALLEGED
BREACH OF WARRANTY (EXCEPT FOR THE END-USER/CUSTOMER'S STATUTORY RIGHT, IF ANY,
TO SUCH DAMAGES DURING THE MANUFACTURER'S WARRANTY PERIOD), ALLEGED BREACH OF
CONTRACT, DELAY, NEGLIGENCE, STRICT TORT LIABILITY, PATENT OR COPYRIGHT
INFRINGEMENT OR OTHERWISE. IN ADDITION, COMPANY WILL NOT BE LIABLE IN EXCESS OF
THE TOTAL PURCHASE PRICE OF THE EQUIPMENT, WITH RESPECT TO WHICH LOSSES OR
DAMAGES ARE CLAIMED, OR FOR ANY OTHER DAMAGES OF ANY NATURE. THIS PARAGRAPH WILL
SURVIVE TERMINATION AND/OR EXPIRATION OF THIS AGREEMENT.
3.5 CREATION OF SECURITY INTEREST.
3.5.1 Dealer hereby grants to Company a purchase money
security interest in (i) the Equipment in existence now or hereafter sold to
Dealer by Company pursuant to this Agreement and (ii) all proceeds from the sale
or other disposition of the Equipment sold to Dealer by Company, including but
not limited to any and all Equipment returned to or repossessed by Dealer
(collectively, the "Collateral") in order to secure the performance and payment
of all obligations of Dealer arising under this Agreement, and all renewals,
extensions and rearrangements of all such obligations as may arise between
Dealer and Company. Dealer must execute, file and refile such financing
statements or other security agreement documents as Company may require from
time to time with respect to all or any portion of the Collateral. Company is
hereby authorized by Dealer, as its lawful attorney and agent in fact, to
execute and file such financing statements and other documents as Company deems
necessary for the purpose of perfecting or continuing any security interest or
lien created hereby.
3.5.2 Dealer warrants, covenants and agrees that, except for
the security interest granted in this Agreement, there are no other security
interests granted as to the Collateral in existence as of the date hereof, and
that Dealer owns and will keep the Collateral free and clear of liens, security
interests, or encumbrances, and will not assign, sell, mortgage, lease,
transfer, pledge or grant a security interest in the Collateral without the
prior written consent of Company except for the sale of Equipment in the
ordinary course of business.
3.5.3 Dealer will be in default under the security provisions
of this Agreement upon the happening of any of the following events or
conditions: (i) the failure of Dealer to pay when due any amount owing to
Company, (ii) the failure of Dealer to perform punctually any of its obligations
under this Agreement, (iii) a breach by Dealer of any warranty, representation
or covenant made by Dealer in connection with this Agreement, or (iv) a breach
by Dealer of this Agreement.
3.5.4 Upon the occurrence of a default as described above,
Dealer must pay immediately, without further notice or demand, all amounts due
and owing from Dealer to Company.
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In addition to Company's rights and remedies as a secured party under the
Uniform Commercial Code, Company has the following rights: the right to sell,
lease or otherwise dispose of any or all of the Collateral and to take
possession of the Collateral, and for that purpose, Dealer hereby irrevocably
agrees that Company may enter upon or into any premises on or in which the
Collateral or any part thereof may be situated and remove the same therefrom.
Company may require Dealer to assemble the Collateral and make it available to
Company at a place designated by Company that is reasonably convenient to both
parties.
3.5.5 Dealer must pay to Company on demand all amounts and
expenses including, without limitation, reasonable attorneys' fees and
disbursements, incurred or paid by Company in exercising or protecting its
interests, rights or remedies under this Agreement or in remedying any default
of Dealer, plus interest thereon at the highest rate permitted by applicable
law. All such expenses and the interest thereon will be included as obligations
secured under this Agreement.
3.5.6 The security interest set forth in this Agreement will
survive the termination or expiration of this Agreement.
3.6 EQUIPMENT AVAILABILITY/PRICING. Dealer may obtain authorized
Equipment from any source. All prices and terms and conditions of sale of
Equipment by Dealer to Subscribers will be established solely by Dealer.
3.7 EQUIPMENT INSTALLATION AND REPAIR. All installation, repair or
warranty services recommended by Dealer to Subscribers must meet or exceed
industry and Equipment manufacturer standards.
3.8 TRANSSHIPMENT/ UNACTIVATED EQUIPMENT. Dealer must sell Equipment
purchased from Company to individuals or businesses that it reasonably believes
arc the actual end users of this Equipment for activation to Company's Service
within the Area. Dealer must not sell or ship this Equipment to any location
outside of the Area, directly or indirectly. Dealer must comply with all
Policies and Procedures regarding transshipment and unactivated Equipment
levels. Dealer agrees to pay for losses suffered by Company due to discounted
Equipment sales to Dealer, and agrees to immediate termination of this Agreement
if Company determines that unactivated Equipment levels are unreasonably high or
that Dealer has engaged in transhipment.
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3.9 EQUIPMENT RETURNS.
3.9.1 Dealer may return any Equipment sold to Dealer by
Company which Dealer reasonably believes to be defective or damaged. Dealer will
not be charged for any such Equipment so returned.
3.9.2 Within 30 days after delivery of Equipment from Company
to Dealer, Dealer may return to Company any such Equipment which is undamaged,
new and unopened from the packaging provided by Company. In this event, Dealer
will receive a credit in the amount of the then current price for such
Equipment.
3.9.3 Dealer must accept returns on Equipment sold by Company
to Dealer which Dealer sells to customers within 30 days after this Equipment
was sold to a customer, and as long as Dealer returns this Equipment to Company
in good working condition within 60 days after it was sold to the customer,
Company will provide a credit constituting a full refund for the Equipment to
Dealer. Dealer must comply with any modifications to Company's Equipment return
policy as issued in Policies and Procedures from time to time.
4. COMPENSATION
4.1 PAYMENT/COMPENSATION SCHEDULE. Subject to the terms of this
Agreement, to all relevant Policies and Procedures, and to any terms and
conditions contained in the attached Schedule 2 regarding Compensation, Company
will pay Dealer the amounts set forth in the Compensation Schedule. The
Compensation Schedule is incorporated by reference in this Agreement in its
entirety, and it contains the full payment to Dealer for the performance of
Dealer's services and obligations under this Agreement.
4.2 MODIFICATIONS. DMN compensation under this Agreement is fixed until
November 30, 2000, otherwise, Company may modify the terms and conditions or the
payments listed in the Compensation Schedule in any way with 30 days' advance
written notice to Dealer. Company may, without prior notice to Dealer, introduce
new service plans and new services with different compensation than what is set
forth in Schedule 2.
4.3 OFFSET. Company may, at any time, offset against amounts owed to
Dealer any amounts owed by Dealer to Company, including but not limited to
amounts owed or to be owed under this Agreement or any other agreement between
Company and Dealer also including any expenses, losses, attorney's fees and
damages incurred by Company and indemnified by Dealer.
4.4 SALES AGENTS; SHARING OF COMMISSIONS. Without Company's specific
written consent, Dealer must not, directly or indirectly, share any commissions
earned under this Agreement with any subdealers or other persons or entities,
except for Dealer's own employees or sales agents. Dealer and its Affiliates may
not take any financial responsibility for payment of Service charges for
Subscribers, nor otherwise suggest or facilitate the establishment of any
arrangement to mitigate the
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Subscriber's financial risk arising out of its agreement for Service or for
management of the account, nor otherwise interfere with the intended contractual
relationship between Company and Subscriber.
5. DEALER'S OPERATING MATTERS
5.1 DEALER'S BUSINESS RECORDS. Dealer must create and maintain at its
locations, and preserve for the period legally required from the date of their
preparations, full, complete, and accurate records of its business conducted
pursuant to this Agreement. Dealer must also provide or update its financial
information, including without limitation balance sheet and income statement.
These records must be available for inspection and copying by the Company at all
reasonable times.
5.2 COMPLIANCE WITH LAWS AND POLICIES AND PROCEDURES. Dealer must
comply with: (1) all laws, FCC rules and regulations, tariffs, and any rules of
other governmental bodies applicable to Dealer's business, (2) all Policies and
Procedures concerning the conduct of Dealer's business relating to Service
reasonably prescribed from time to time by the Company, which Policies and
Procedures are incorporated by reference in this Agreement in their entirety,
and (3) all Policies and Procedures relating to the distribution of other AT&T
products and services, which AT&T and its affiliates, may introduce from time to
time. If Dealer chooses to accept Company's offer to participate in the
distribution of other AT&T products and services, it must comply with all
additional terms and conditions set forth in the relevant Policies and
Procedures and accept the compensation levels associated with these products and
services.
Dealer's failure to comply with any of these Policies and Procedures
will constitute a material breach of this Agreement and may subject Dealer to
monetary penalties, forfeiture of Dealer's right to sell certain AT&T products
or services, or other sanctions in accordance with the Policies and Procedures.
The Company will send written notice to Dealer of any new Policies and
Procedures issued by the Company, or of any changes to existing Policies and
Procedures.
5.3 INSURANCE. Dealer must at all times during the term hereof, at
Dealer's sole expense, be insured by a reputable insurance company licensed to
do business in the states where Dealer operates under this Agreement under a
comprehensive general liability insurance policy with reasonable coverage
limits.
6. USE OF MARK BY DEALER; PROTECTION OF THE COMPANY'S RIGHTS
6.1 USE OF MARKS. During the term of this Agreement, the Company
authorizes Dealer to be an "Authorized Dealer" of Company and to use its
trademarks, service marks, trade names, logos, or similar indicia which the
Company owns or is licensed to use ("Marks") subject to the limitations
contained herein. Dealer acknowledges that all Marks are the exclusive property
of Company. Dealer must indicate that Company is the provider of the Service in
its advertising, and may utilize the Marks in its advertising as long as Dealer
complies with all Policies and Procedures pertaining to this use prescribed by
Company from time to time. Dealer will not use the Marks for any other purpose
without the express prior written consent of Company.
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6.2 NO TRANSFER OF RIGHTS. Dealer acknowledges that this Agreement does
not transfer any rights to use any Marks (except to the limited extent set forth
herein and during the term and any extensions hereof) and that this Agreement
does not and will not confer any goodwill or other interest in any Marks upon
Dealer, all rights to which remain with the Company. Dealer will not challenge
Company's ownership of the Marks in any way.
6.3 UNAUTHORIZED USE. Any unauthorized use of the Marks by Dealer or
its respective employees, Affiliates, or subagents constitutes infringement of
Company's rights and a material breach of this Agreement. Upon expiration or
termination of this Agreement for any reason, Dealer must immediately
discontinue use of the Marks.
7. TERM
This Agreement commences on its effective date and will expire on
November 30, 2000, at which time may be terminated by either party with 30 days
prior written notice.
8. TERMINATION OR EXPIRATION OF AGREEMENT
8.1 TERMINATION FOR CAUSE. Subject to the provisions contained in
Section 8.2, either party may terminate this Agreement by written notice to the
other party if the other party breaches any material term or condition of this
Agreement, and Company may terminate this Agreement if Dealer fails to comply
with any Policies or Procedures reasonably required and reasonably applied by
the Company. Either party may terminate this Agreement immediately upon written
notice to the other party if the FCC or any other regulatory agency promulgates
any rule, regulation, or order which in effect or application prohibits or
substantially impedes the Company from fulfilling its obligations under this
Agreement for providing Service or prohibits or substantially impedes Dealer's
ability to sell Equipment, or if the other party becomes financially insolvent.
Company may terminate this Agreement immediately upon written notice if Company
is no longer authorized to provide Service within the Area, if Dealer is found
to have made a material misrepresentation to Company during the application
process to become a Dealer, or if Dealer is found to have engaged in fraudulent
or illegal conduct. This Agreement will terminate immediately and without notice
if either party: makes an assignment for the benefit of creditors; has an Order
for Relief under Title 11 of the United States Code entered by any United States
Court against it; or has a trustee or receiver of any substantial part of its
assets appointed by any court.
8.2 BREACH AND CURE PERIOD. Neither party will be in breach of this
Agreement until and unless the other party provides written notice to the
allegedly breaching party of any violation of this Agreement and the allegedly
breaching party fails to cure such violation within 30 days after receiving this
notice. If the default is not cured by the end of the 30 day period, then
termination will be effective without further notice. Notwithstanding the above,
a breach by Dealer of any part of Sections 2, 3, or 6 of this Agreement is not
subject to cure and, accordingly, any such breach gives Company the right to
terminate the Agreement immediately upon written notice to Dealer.
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8.3 TERMINATION WITHOUT CAUSE. After the term of this Agreement, it may
be terminated by either party without cause with 60 days prior written notice.
8.4 OBLIGATIONS OF DEALER UPON TERMINATION OR EXPIRATION. Upon the
expiration or termination of this Agreement for any reason, Dealer and its
Affiliates must: (a) discontinue the use of all Marks, such as signs, logos,
stationary, or business cards, and must return to Company all materials
containing any Mark or otherwise identifying or relating to Company's business;
(b) cease representing themselves in any fashion as a Dealer or representative
of Company; (c) return to Company or destroy those documents, records or other
materials (including, without limitation, all copies, either photocopies or
computer copies), which were provided to Dealer by Company or which contain any
Confidential Information of Company; (d) not solicit, directly or indirectly any
of Company's Customers to terminate their relationship with Company for one
year, in accordance with section 2.3 of this Agreement; and (e) comply with the
6 month covenant not to compete contained in section 2.7.
8.5 POST-TERMINATION RESERVE. Upon termination of this Agreement and
during the cure period of any default by Dealer, Company is entitled to
establish and withhold a reserve from commissions or other payments owed to
Dealer, which may be used to satisfy any obligations owed by Dealer to Company,
including but not limited to Subscriber deactivations following any termination
of this Agreement. At all times following the initial 90 days of this Agreement,
the reserve will equal the average commission amount paid to Dealer per
Subscriber during the preceding 90 days, multiplied by the number of Subscribers
whose deactivations resulted in reimbursement due from Dealer during the
preceding 90 days. Any remaining balance in the reserve 90 days from the date of
the termination of this Agreement will be promptly paid to Dealer.
8.6 NO COMPENSATION. Upon termination of this Agreement for any reason,
Dealer's rights to compensation under this Agreement will expire, and become
null and void, except for compensation earned prior to the termination date of
this Agreement.
8.7 EXPIRATION, REVOCATION OR TRANSFER OF LICENSES. If any license
Company requires in order to operate in any portion of the Area expires or is
revoked, this Agreement terminates with respect to the portion of the Area. If a
required license for any portion of the Area is transferred by Company to an
unaffiliated third party, then Company has the option, with respect to this
portion of the Area only, of terminating this Agreement; assigning this
Agreement to the license transferee (if any); or offering some reasonable
substitute for Service.
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9. ADVERTISING
Dealer will conform to the highest ethical standards for advertising,
take all reasonable steps to make sure that its advertising materials with
respect to Company's Service are factually correct, comply with all applicable
laws and correctly use Company Marks.
3. SERVICE
Company will operate a quality Service system in the Area and will, at
all times, operate in accordance with all applicable laws related thereto,
whether federal, state, or local. The Service provided by Company will be at, or
greater than, the level of quality performance generally accepted in the
wireless telecommunications industry.
4. DISPUTES
11.1 NOTIFICATION AND LIMITATION OF ACTIONS. Dealer must notify Company
in writing of any grievance or dispute it may have regarding the Agreement or
its relationship with Company within 120 days of the date Dealer became aware of
this grievance or dispute. If the Dealer fails to notify Company of the
grievance or dispute within 120 days, then Company will not be liable to Dealer
for any loss of injury relating to that grievance or dispute.
11.2 ARBITRATION OF DISPUTES.
11.2.1 ARBITRATION CLAUSE. Except as stated in Section 11.2.4
of this Agreement, all claims (including counterclaims and cross-claims) and
disputes between Dealer and Company must be resolved by submission to binding
arbitration. The parties must submit any such disputes to the office of the
American Arbitration Association ("AAA") nearest to Dealer within the Area, to
be decided under the then current AAA commercial arbitration rules.
11.2.2 LIMITATIONS OF ACTIONS. All claims and disputes covered
by this Section 11 must be submitted to arbitration by initiating the
arbitration not later than 180 days after the act or omission giving rise to the
claim or dispute occurred, except for the failure to pay invoices for equipment
sold by Company to Dealer. The failure to initiate arbitration within the period
constitutes an absolute bar to the institution of any proceedings based on such
act or omission. The aggrieved party must initiate arbitration under this
Section 11 by sending written notice of an intention to arbitrate to all
parties. The notice must contain a description of the dispute, the amount
involved, and the remedy sought.
11.2.3 PROCEDURES AND DISCOVERY. The arbitrator must schedule
a prehearing conference to reach agreement on procedural matters, arrange for
the exchange of information, obtain stipulations, 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:
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(i) Each party may propound only one interrogatory
requesting the names and addresses of the witnesses
to be called at the arbitration hearing;
(ii) On a date to be determined at the prehearing
conference, each party may serve one request for the
production of documents. Ile documents are to be
exchanged 21 days after service of the request; and
(iii) Each party may depose 4 witnesses. Each deposition
must be concluded within four 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.
11.2.4 COMPANY'S RIGHT TO SEEK INJUNCTION. Notwithstanding
anything in this Section 11, Company may bring court proceedings to seek an
injunction or other equitable relief to enforce any right, duty or obligation
under this Agreement. To obtain injunctive or other equitable relief, Company is
not required to post a bond or, if required by law or by the court, the Dealer
hereby consents to a bond in the lowest amount permitted by law.
11.2.5 ENFORCEMENT OF AWARD. Neither party has the right to
appeal the decision of the arbitrator. The award of the arbitrator may be
confirmed or enforced in any court having jurisdiction.
11.2.6 ATTORNEY'S FEES. If any arbitration or court action is
commenced by either party, the substantially prevailing party in that action is
entitled to recover its out-of-pocket and court costs and reasonable attorneys'
fee incurred therein.
11.2.7 INDIVIDUAL RESPONSIBILITY. Personnel employed by, or
acting under the authority of, a party to this Agreement are not employees or
agents of the other party, and the first party assumes full responsibility for
their acts and has sole responsibility for their supervision and control.
5. MISCELLANEOUS
12.1 GOVERNING LAW. Except to the extent governed by federal laws or
regulations, the entire relationship of the parties based on this Agreement is
governed by the substantive laws of the state of Florida, without reference to
its choice of law rules.
12.2 WAIVERS. The rights of the parties under this Agreement, including
the Policies and Procedures, are cumulative and not exclusive of any other
rights and remedies. The waiver by any party of any right under this Agreement,
or any breach hereof does not constitute a waiver of any other right or remedy
on a future occasion.
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12.3 FORCE MAJEURE. Neither party is liable for loss or damage or will
be in breach of this Agreement if its failure to perform its obligations results
from: (1) compliance with any law, ruling, order, regulation, requirement or
instruction of any federal, state or municipal government or any department or
agency thereof or any court of competent jurisdiction; (2) acts or omissions of
the other party in violation of this Agreement; or (3) acts of God, fires,
strikes, embargoes, war, insurrection, riot, and other causes beyond the
reasonable control of the party. Any delay resulting from any of these causes
extends performance accordingly or excuses performance, in whole or in part, as
may be reasonable.
12.4 ENTIRE AGREEMENT. This Agreement, including all Policies and
Procedures issued under it, represents the entire agreement of the parties with
respect to the subject matter hereof. There are not other oral or written
understandings or agreements between the Company and Dealer relating to the
subject matter hereof, and this Agreement supersedes all prior negotiations,
communications, agreements and addenda between the parties hereto with respect
to the subject matter hereof, except that any releases or anti-slamming
agreements are not superseded. Nothing in this Agreement is intended or should
be deemed to confer any rights or remedies upon any entity not a party hereto.
12.5 MODIFICATION. This Agreement may only be amended or superseded by
written agreement executed by authorized representatives of both parties, except
as otherwise explicitly stated in this Agreement. Each such modification will be
effective only in the specific instance for the specific purpose for which
given. No course of dealing or usage of trade may be invoked to modify the terms
and conditions of this Agreement. No other understandings or representations,
whether oral or in writing, will amend or supersede this Agreement.
12.6 ASSIGNABILITY. Neither party may assign this Agreement or any of
its obligations hereunder without the other party's prior written consent,
except that Company may assign its rights hereunder to any affiliate or to any
other entity or person related to Company by any merger, transfer of assets,
consolidation or takeover in which Company is involved. Any assignment by Dealer
in violation of this section, including, without limitation, any material change
in control or ownership of Dealer's entity, renders this Agreement immediately
void, and conveys no rights or interest.
12.7 SURVIVABILITY. Upon termination of this Agreement, all rights and
duties of the parties terminate, except the following survive: Dealers duties
under sections 2.2, 2.3, 2.7, 3.2, 3.5, 5, 8.4, 8.5, and sections 4.3, 6, 11,
and 12 of this Agreement. The parties must cooperate to fulfill all surviving
obligations in a timely manner.
12.8 ACKNOWLEDGMENTS. The Company and Dealer acknowledge that they have
read this Agreement and understand and accept the terms, conditions and
covenants contained herein as being reasonably necessary to maintain the
Company's high standards for Service and thereby to protect and preserve the
goodwill of the Company's Service and its Marks. Dealer acknowledges and
understands that Company may at any time compete directly with Dealer in the
soliciting of Subscribers for the service or in the sale, lease, installation,
repair or warranty servicing of equipment.
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Dealer has independently investigated the business outlined in this Agreement
and the profitability (if any) and risks, and is not relying on any
representation, guarantee, or statement of Company other than as set forth in
this Agreement.
Dealer acknowledges that Company has NOT represented Dealer's prospects
or chances for success selling relying on any representation, guarantee, or
statement of Company, other than as set forth in this Agreement.
In particular, Dealer acknowledges that Company has not represented:
(a) Dealer's prospects or chances for success selling services under this
Agreement; (b) the total investment that Dealer may need to make to operate
under this Agreement (Company does not know the amount of investment required
for this purpose); or (c) that Company will limit its efforts to sell service or
establish other dealers in the Area.
Dealer also acknowledges that Company has NOT represented to Dealer
that: (a) Dealer will derive income from the sale of Company's services under
this Agreement, or Company will refund any payments made by Dealer to Company
under this Agreement or repurchase any of the products or equipment supplied by
Company to Dealer; or (b) Company will provide a sales or marketing program that
will enable dealer to derive income under this Agreement.
12.9 INDEMNIFICATION. Dealer and the Company hereby agree to defend and
hold the other party, its affiliates and employees harmless for all liability,
damages, punitive damages, expenses, including reasonable attorneys' fees and
disbursements, claims, demands or suits arising from their negligent, willful,
or fraudulent acts, or for their failure to act, with respect to the performance
of each parties' obligations under this Agreement and all Policies and
Procedures, including, without limitation, any allegedly unauthorized use of a
trademark, patent, copyright, process, idea, method or device covered by this
Agreement, or bodily injury or damage to property to the extent occasioned by
the acts or omissions of the indemnifying party or its affiliates, employees or
subcontractors.
Prompt written notice must be provided to the indemnifying party of any
claim for indemnification. Each party may conduct its own defense of any claim
in which it is named as a defendant without diminishing its indemnity rights.
Each party is only responsible for any losses or damages proximately caused by
it. Neither party has any liability for representations made by the other party
that are not expressly authorized under this Agreement. The Limitation of
Liability clause in paragraph 12.11 does not limit recovery under this
Indemnification clause. This indemnity will continue in full force and effect
after the termination of this Agreement.
12.10 SEVERABILITY. A determination by a court or arbitrator of
competent jurisdiction that any provision of this Agreement or any part thereof
is unenforceable will not cancel or invalidate the remainder of such provision
or this Agreement, which will remain in full force and effect and will be
construed to carry out the intent of the parties.
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12.11 LIMITATION OF LIABILITY. EXCEPT UNDER THE INDEMNIFICATION CLAUSE,
NEITHER COMPANY NOR DEALER IS LIABLE TO THE OTHER FOR ANY INDIRECT, SPECIAL,
CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES, INCLUDING WITHOUT LIMITATION LOST
PROFITS, AS A RESULT OF ANY DEFAULT OR BREACH OF THIS AGREEMENT OR THE
TERMINATION OR NON-RENEWAL OF THIS AGREEMENT OR ANY OTHER EVENT, CONDUCT, ACT OR
OMISSION ARISING OUT OF OR RELATED TO THIS AGREEMENT WHETHER BASED ON CONTRACT,
TORT, STATUTE OR OTHERWISE. THIS LIMITATION OF LIABILITY IS MADE KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY.
13. NOTICES
All notices, requests, demands, and other communications hereunder must
be in writing and must be deemed given if personally delivered or mailed,
certified mail, return receipt requested, or sent by nationally recognized
overnight carrier to the following address:
(1) If to, Dealer:
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(2) If to Company: AT&T Wireless Services
15 East Midland Avenue
Paramus, New Jersey 07652
Attn: Legal Department
Notwithstanding the foregoing, Company may notify Dealer of changes in Policies
and Procedures, compensation, or other business notices by first class mail,
nationally recognized overnight carrier, electronic mail, facsimile, or by
in-hand delivery.
AT&T Proprietary and Confidential
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The parties have executed this Agreement by their duly authorized
representatives effective as of the date of first above written.
DEALER: Bobby Allison Cellular Systems of
Florida, Inc.
By: /s/ Robert L. McGinnis
-------------------------------------
Its: CEO
-------------------------------------
Date: 12/28/98
-------------------------------------
COMPANY: AT&T WIRELESS SERVICES OF
FLORIDA, INC. ON ITS OWN BEHALF AND
ON BEHALF OF ITS FLORIDA AFFILIATES.
By: /s/ Jerry Bealers
-------------------------------------
Its Vice President
-------------------------------------
Date: 12/30/98
-------------------------------------
AT&T Proprietary and Confidential
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SCHEDULE 1
Areas Served By AT&T Wireless Services of Florida, Inc. and its Affiliates
(as of October 13, 1998)
<TABLE>
<CAPTION>
FLORIDA COUNTIES ENTITY
--------------------------------- ------------------------------------------
<S> <C>
Baker, Broward, Citrus Clay, Dade
Dubal, Flagler, Hernando
Hillsborough, Indian River, Lake,
Monroe, Martin, Nassau, AT&T WIRELESS SERVICES OF FLORIDA, INC.,
Okeechobee, Orange, Osceola, Palm a Florida corporation
Beach, Pasco, Pinellas, Polk, St.
Lucie, Seminole, St. Johns, Sumter,
Volusia
Brevard MELBOURNE CELLULAR TELEPHONE COMPANY
a Florida general partnership
Manatee BRADENTON CELLULAR PARTNERSHIP
a Florida general partnership
Marion OCALA CELLULAR TELEPHONE COMPANY, INC.
a Delaware corporation
Sarasota SARASOTA CELLULAR TELEPHONE COMPANY
a Florida general partnership
</TABLE>
AT&T Proprietary and Confidential
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SCHEDULE 2
----------
COMPENSATION
PART A - DIGITAL MULTI-NETWORK (DMN) COMPENSATION
AND GENERAL COMPENSATION PROVISIONS
1. DEFINITIONS. As used in this Schedule 2, the following terms have
the meanings set forth below.
a. ACTIVATION DATE. "Activation Date" means the date on which
Company begins to provide Service to an Authorized Subscriber or Authorized DMN
subscriber.
b. AUTHORIZED DMN SUBSCRIBER. "Authorized DMN Subscriber"
means each individual or entity (i) who places an order with Company for Service
on an Authorized Rate Plan, (ii) to whom Dealer has sold DMN Equipment in the
packaging and with the materials provided to Dealer directly from Company ("AWS
Activation Kit"), (iii) who is accepted by Company, (iv) for whom Service is
activated on this DMN Equipment and has not been terminated prior to the end of
the month in which the Service was activated, and (v) whose DMN Equipment has
not been activated on Company's Service at any time within 180 days prior to
this subscriber's Activation Date. When an individual or entity places more than
one order and each order is for a different telephone number to be assigned to a
separate wireless telephone and electronic serial number, each order will be
treated as a separate Authorized DMN Subscriber.
c. UNACTIVATED DMN EQUIPMENT. "Unactivated DMN Equipment"
means DMN Equipment sold by Company to Dealer which both (a) is unaccounted for
in Dealer's inventory and (b) has not been activated on a Service account by an
Authorized DMN Subscriber.
2. COMMISSION/VAB. Dealer will earn the commissions and the volume
activation bonus ("VAB") in accordance with the schedules set forth in Schedule
2.1 for each Authorized DMN Subscriber.
3. DMN EQUIPMENT INVENTORY REVIEW.
a. REPORTS AND AUDITS. With respect to each market, Company
may request from Dealer reports certifying (i) inventory status of DMN Equipment
purchased from Company and (ii) sales of DMN Equipment purchased by Dealer
during the month. Upon request by Company and no more than twice per calendar
year, Dealer will conduct, and permit Company to audit, a physical inventory of
DMN Equipment purchased from Company and held by Dealer.
b. UNACTIVATED DMN EQUIPMENT LEVELS. If, based upon a
comparison of Dealer's reports provided pursuant to paragraph 3(a) above and
Company's records, the amount of
AT&T Proprietary and Confidential
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Unactivated DMN Equipment is reasonably unacceptable to Company, Company may
terminate this Agreement upon written notice to Dealer.
4. COOPERATIVE ADVERTISING FUNDS. In accordance with guidelines that
may be issued by Company from time to time, Dealer may qualify to earn
cooperative advertising funds ("Coop Funds") which will accrue in a cooperative
advertising account ("Coop Account") for purposes of reimbursing Dealer for
certain advertising of Company's Service in the Area.
a. ACCRUAL AMOUNTS. The amount of Coop Funds that will accrue
in the Coop Fund for each Authorized DMN Subscriber is set forth on Schedule
2.1.
b. QUALIFIED ADVERTISING. Company has established a Minimum
Advertised Price Program in order to promote the premium quality of Company's
Service and its Marks. Accordingly, in order to qualify for reimbursement from
the Coop Funds, advertising submitted by Dealer (i) must not include a price for
DMN Equipment below the Minimum Advertised Price ("MAP") established for such
DMN Equipment by Company, (ii) must comply with all Company requirements for use
of Company's Marks, (iii) must comply with any cooperative advertising
guidelines published by Company from time to time, and Ov) does not advertise
DMN Equipment which is not included in the then current version of the Digital
Multi-Network MAP Notice issued by Company. Company may amend the Digital
Multi-Network Notice from time to time upon 10 days prior written notice to
Dealer.
c. FORFEITURE OF FUNDS. All unused Coop Funds credited to the
Coop Account during any calendar quarter will be permanently forfeited to
Company at the end of the next calendar quarter, unless by the end of that
subsequent calendar quarter Dealer has (i) requested reimbursement for qualified
advertising on the forms and according to the reasonable procedures established
by Company; (ii) has submitted to Company or Company's designee the appropriate
documentation; and (iii) has complied with the terms of this Agreement and any
Company advertising guidelines. No interest will be paid to Dealer on funds
credited to the Coop Account and any amounts remaining in the Coop Account upon
termination or expiration of this Agreement will be forfeited to Company.
5. DMN PROGRAMMING. DMN Equipment is intended to be programmed by
over-the-air programming ("OAP"). DMN Equipment not programmed using OAP likely
will not function correctly. Therefore, Dealer is NOT permitted to manually
program any DMN Equipment. If Dealer does manually program any DMN Equipment,
Dealer will be in default of the Dealer Agreement and, among other penalties,
will not be entitled to any commission or Co-op Funds with respect to this
activation of Service.
6. EXISTING SUBSCRIBERS - DMN/ANALOG/SINGLE BAND DIGITAL. No
compensation or Coop Funds will be payable to Dealer for any Authorized
Subscriber or Authorized DMN Subscriber who was, at any time within the 180 day
period immediately prior to his or her Activation Date, a Subscriber of
Company's Service, except that additional wireless telephone numbers activated
by such a Subscriber on DMN Equipment may qualify for the applicable
compensation,
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7. CHARGEBACKS - DMN/ANALOG/SINGLE BAND DIGITAL. In the event that an
Authorized Subscriber or an Authorized DMN Subscriber deactivates or is
deactivated from Service within 90 days of this Authorized (DMN) Subscriber's
Activation Date for Service ("Chargeback Period"), Dealer must refund to Company
all compensation (except Coop Funds) paid by Company with respect to this
Authorized (DMN) Subscriber ("Chargeback"). If any Subscriber's Service is
suspended within the Chargeback Period, the Chargeback Period will be extended
by the length of this suspension, up to 90 days. If a Subscriber's Service is
not reactivated during this extension, a Chargeback will occur. If a
Subscriber's Service is reactivated within the extension, the Subscriber must
remain on active status for the remainder of the Chargeback Period, or at least
30 days to avoid a Chargeback. A second suspension during the extended
Chargeback Period will result in a Chargeback to Dealer.
8. RATE PLAN USED FOR COMMISSION PURPOSES. If an Authorized Subscriber
or Authorized DMN Subscriber transfers to a different rate plan during the
Chargeback Period, the commission payable with respect to that Subscriber will
be based on the rate plan in effect at the end of the Chargeback Period.
Accordingly, if an Authorized (DMN) Subscriber transfers to a rate plan
associated with a lower commission on or before the Chargeback Date, Company
will charge back Dealer with the difference between the commission paid for that
Subscriber and the commission which would have been due if the Authorized (DMN)
Subscriber had been on the new rate plan throughout the Chargeback Period.
Likewise, if an Authorized (DMN) Subscriber transfers to a rate plan associated
with a higher commission on or before the Chargeback Date, Company will, prior
to the last day of the following calendar month, pay Dealer the difference
between the commission paid for that Subscriber and the commission which would
have been due if the Subscriber had been on the new rate plan throughout the
Chargeback Period.
9. PAYMENT OF COMPENSATION. Commissions will be paid or credited to
Dealer within 30 days of the end of the calendar month during which the
activation occurred.
PART B- ANALOG/SINGLE BAND COMPENSATION
1. AUTHORIZED SUBSCRIBER. "Authorized Subscriber" means each individual
or entity (i) who places an order through Dealer for Service on an Authorized
Rate Plan, excluding all DMN rate plans, (ii) with respect to whom Dealer has
forwarded all necessary Service activation forms to Company and has collected
any required deposit or advance payment on behalf of Company, (iii) who is
accepted by Company, (iv) for whom Service is activated AND (v) whose Service
has not been terminated prior to the end of the month in which the Service is
activated. When an individual or entity places more than one order and each
order is for a difference telephone number to be assigned to a separate wireless
telephone and electronic serial number, each order will be treated as separated
Subscriber.
2. ACTIVATION COMMISSION. For each Authorized Subscriber on an
Authorized Rate Plan using appropriate analog or single band digital Equipment
(not DMN Equipment), Company will pay Dealer the commission set forth in
Schedule 2.1, Part B.
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3. ESN CHANGES. No compensation may be earned by Dealer for an
activation on Company's Service with respect to an Authorized Subscriber who
retains his or her existing wireless telephone number (also known as ESN
changes).
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CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
SCHEDULE 2.1
ALL COMPANY RATE PLANS ARE AUTHORIZED RATE PLANS, UNLESS SPECIFICALLY
RESTRICTED BY A COMPANY POLICY AND PROCEDURE.
PART A- DMN EQUIPMENT ACTIVATION COMPENSATION ON AUTHORIZED RATE PLANS
----------------------------------------------------------------------
EFFECTIVE FROM SIGNING THROUGH NOVEMBER 30, 2000
*************
PART B ANALOG/SINGLE BAND DIGITAL COMPENSATION ON AUTHORIZED RATE PLANS
-----------------------------------------------------------------------
EFFECTIVE JANUARY 1, 1999
ANALOG
*************
SINGLE BAND DIGITAL
*************
AT&T Proprietary and Confidential
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ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT ("Agreement"), effective as of December 31,
1998, is between BOBBY ALLISON WIRELESS, INC., a Florida corporation ("Dealer"),
and AT&T WIRELESS SERVICES OF FLORIDA, INC., a Florida corporation ("AT&T").
RECITALS
AT&T and Bobby Allison Cellular Systems of Florida, Inc., a Florida
corporation ("BACS") entered into a Dealer Agreement and an MDF and Signing
Bonus Agreement, both dated December 1, 1998 (the "Dealer Agreement") under
which BACS accepted certain rights and obligations.
On December 31, 1998, BACS merged with 2Connect Acquisition Corp., a
wholly owned subsidiary of 2Connect Express, Inc. and the surviving entity is
the party to this Agreement called Bobby Allison Wireless, Inc.
The parties agree as follows:
Dealer hereby fully assumes the performance of all of the terms and
conditions of BACS under the Dealer Agreement and agrees to be bound by the
obligations and provisions of the Dealer Agreement and all policies and
procedures established from time to time by AT&T in connection therewith.
BOBBY ALLISON WIRELESS, INC.
Signed: /s/ Robert L. Mcginnis
------------------------------------
Printed: Robert L. Mcginnis
------------------------------------
Title: CEO
------------------------------------
Dated: 12/31/98
------------------------------------
AT&T WIRELESS SERVICES OF
FLORIDA, INC.
Signed: /s/ Jerry Bealers
------------------------------------
Printed: Jerry Bealers
------------------------------------
Title: Vice President
------------------------------------
Dated: 12/30/98
------------------------------------
AT&T Proprietary and Confidential
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GENERAL RELEASE
THIS GENERAL RELEASE is entered into this 28th day of December, 1998,
by and between Bobby Allison Cellular Systems of Florida, Inc., with a place of
business at 2055 Lake Avenue, S.E. Suite A, Largo, FL 33461("Releaseor") and
AT&T Wireless Services of Florida, Inc. and its affiliates d/b/a AT&T Wireless
Services ("AWS").
RECITALS
WHEREAS, AWS and Releasor are parties to a Dealer Agreement dated
December 1, 1998 (the "Agreement");
WHEREAS, Releasor desires to receive certain funds in exchange for
providing to AWS a release of all claims, whether known or unknown it may have,
against AWS and AWS is willing to advance such funds to Releasor in exchange for
Releasor's release of claims, whether known or unknown, it may have against AWS;
NOW, THEREFORE, in consideration of the above stated recitals, the
following agreements and other good and valuable consideration, the parties
agree as follows:
AGREEMENT
1. PAYMENT. AWS has paid Releasor the sum of $5,000 the receipt of
which is hereby acknowledged.
2. GENERAL RELEASE. Releasor hereby forever releases, waives and
discharges AWS, any Company, partnership, joint venture or other entity
affiliated with AWS, the parent of AWS, any and all general partners of AWS, or
any predecessor in interest, and the officers, directors, attorneys, agents,
employees, and shareholders of each of the foregoing (collectively, the
"Released Parties") form any and all claims, obligations, promises, causes of
action or demands, known or unknown, of any nature whatsoever, that it may have
individually or jointly with another party, including but not limited to claims
for attorney's fees. This Release is general in nature and applies to all claims
resulting from anything which has occurred up to the date of this Release.
Releasor specifically releases and waives any and all claims arising out of or
related to any and all agreement between Releasor and any or all of the Released
Parties.
AWS hereby forever releases, waives and discharges Releasor and
Releasor's officers, directors, attorneys, agents, employees and shareholders
from any and all promises, cuases of action or demands, known or unknown, of any
nature whatsoever, that it may have individually or jointly with another party,
including but not limited to claims for attorney's fees. This release does not
waive Releasor's obligations for monies owed to AWS, including without
limitation, for airtime, equipment or charge backs. AWS' release is specific in
nature and applies only to the categories of claims listed above.
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3. DEALER AGREEMENT. Notwithstanding the foregoing, the current Dealer
Agreement remains in fall force and effect and any commissions, or cooperative
advertising payments earned by Releasor prior to the date of the Release will be
paid by AWS pursuant to the terms and conditions of the relevant Agreement.
4. SUCCESSOR AND ASSIGNS. This Release binds any person, successor,
assign, trustee, receiver, or legal representative thereof, which succeeds to
Releasor's rights and liabilities. This Release is made for the benefit of all
Released Parties and all who succeed to the rights and responsibilities of the
Released Parties, including without limitation, their successors and assigns.
5. WAIVER REGARDING UNKNOWN CLAIMS. This Release is intended to be in
the broadest form possible for Releasor. Releasor hereby expressly waives any
and all laws or statutes, or any jurisdiction whatsoever, which may provide that
a general release does not extend to claims not known or suspected to exist at
the time of execution of the release, which if known would have materially
affected the decision to give said release. This Release expressly extends to
any such unknown or unsuspected claims of Releasor, even if knowledge thereof
would have materially affected the decision to give this Release.
6. COVENANT NOT TO SUE. Releasor hereby expressly covenants forever to
refrain from bringing any suit or proceeding at law or in equity against any of
the Released Parties and their successors in interest or assigns, arising out of
or in any way related to any matter, cause or claim whatsoever up to the date of
this Release, including but not limited to claims for attorneys' fees.
7. GOVERNING LAW. This Release is governed by, and must be construed
and interpreted in accordance with the laws of the State of Florida.
8. NO LIABILITY. This Release does not constitute an admission of any
wrongdoing on the part of any party hereto.
9. WARRANTY OF AUTHORITY. Each person signing this Release represents
and warrants that he or she has full authority to execute the Release on behalf
of, and to bind to the Release, the party on whose behalf he or she is signing.
The parties have executed and delivered this Release on the date above,
AT&T Wireless Services of Florida, Inc. Bobby Allison Cellular Systems of
d/b/a AT&T Wireless Services Florida, Inc.
By: /s/ Jerry Bealers By: /s/ Robert L. McGinnis
---------------------------------- -------------------------------
Title: Vice President Title: CEO
------------------------------- ----------------------------
Date: 12/30/98 Date: 12/30/98
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AT&T Proprietary and Confidential
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