EXHIBIT 10.23
KIOSK PROGRAM AGREEMENT
THIS KIOSK PROGRAM AGREEMENT (the "Agreement") is entered
into this 10th day of October, 1996, between WIRELESS
COMMUNICATIONS CENTERS, INC. ("WCCI"), a Delaware corporation
with its principal place of business at 0000-X Xxxxxxxxx Xxxxxxx,
Xxxxxxxx, Xxxxxxx 00000, and SERVICE MERCHANDISE COMPANY, INC., a
Tennessee corporation with its principal place of business at
0000 Xxxxxxx Xxxxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000
("Retailer").
RECITALS
WCCI provides certain wireless telecommunications (PCS,
voice and data, but excluding paging services) services
("Service") within the areas set forth in Exhibit A ("Area").
WCCI also sells cellular telephones, mobile end stations,
wireless modems, and related equipment to enable use of the
Service ("Equipment"), when available, to potential subscribers
to Service in the Area. WCCI desires to sell Service and
Equipment to Retailer's customers who become subscribers to
Service ("Subscribers") and to obtain an exclusive right to offer
such Equipment (subject to the exceptions stated in paragraph
3.b.) and Service to Subscribers from portable kiosks owned and
maintained by WCCI ("Kiosks") and located in Retailer's retail
locations listed in Exhibit B attached hereto ("Locations")
subject to WCCI and/or Retailer being able to terminate any
existing Cellular Service Agreement for each Location. Retailer
desires to permit the use of Kiosks within its locations.
1. Kiosks
a. Placement. Retailer hereby grants to WCCI an
exclusive right to install and occupy Kiosks and to offer and
obtain orders for Equipment and Service from Kiosks within its
Locations, in accordance with the terms of this Agreement.
Retailer agrees that it will allocate visible and accessible
space, reasonably acceptable to WCCI and no smaller than six feet
by eight feet (provided the particular Location has adequate room
as determined by Retailer), within each of the Locations for
purposes of placement of Kiosks, and will provide access to
available lighting, power, telephone lines and work space
surrounding the Kiosks for WCCI representatives ("Kiosk
Representatives") to demonstrate and conduct transactions
relating to the sale of Equipment and Service. Actual size of
Kiosks for Locations shall be mutually determined on a store by
store basis based on each store fixture planogram, before
construction is commenced. WCCI shall obtain and pay for any
additional telephone and power line installations required, and
shall pay for any necessary additional equipment and monthly
service charges for such power and telephone service. Any such
costs incurred by Retailer relating to the power and telephone
installments shall be reimbursed by WCCI within 30 days from date
of Retailer's invoice. Each Kiosk may be moved within each
Location no more than once in every calendar year, unless
otherwise agreed by the parties. Retailer shall permit WCCI to
install signs or banners at each Location of a type to be
mutually agreed by the parties at the expense of WCCI. The
Kiosks shall be a type which shall be approved in advance by
Retailer and occupy a space having dimensions not greater than
that noted for each store in Exhibit B. WCCI shall be
responsible for maintaining the Kiosks and for keeping the Kiosks
clean.
b. Kiosk Installation and Commencement of Operation
Schedule. Exhibit B to this Agreement contains dates for
completion of the Kiosk installation and commencement of
operation of the Kiosk for each of Retailer's stores listed.
The parties acknowledge and agree that such dates are projections
based on the best information available at the time of signing
this Agreement and are subject to change. Notwithstanding, WCCI
agrees to have at least the following number of Kiosks installed
and operational by the noted dates:
Stores Installation Commencement of
With Kiosks Completion Date Operations Date
20 October 31, 1996 November 15, 1996
25 January 31, 1997 February 15, 1997
25 February 28, 1997 March 15, 1997
25 March 31, 1997 April 15, 1997
25 April 30, 1997 May 15, 1997
No further Kiosks are to be installed unless approved in writing
by Retailer. Upon notification by Retailer of its intention to
terminate contract with a third party cellular carrier, in any
market (other than AT&T markets), WCCI shall advise Retailer in
writing of its acceptance of such market. Upon such acceptance,
Retailer shall give WCCI sixty (60) days notice prior to the
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effective date of such contract termination during which period
Retailer shall make available space for installation of Kiosks in
each retail location in such market, it being the intent of the
parties that there shall be no interruption in available carrier
service.
c. Inventory Receiving Procedures. Retailer shall
develop and provide procedures for Retailer store employees and
Kiosk representatives to follow when Equipment inventory is
received in a Retailer store.
d. Additional Retail Locations. In the event that
Retailer desires to offer Service and/or Equipment through kiosks
in any of Retailer's retail stores not included in this Agreement
(including any stores opened subsequent to the date hereof)
located in an area in which AT&T does not offer cellular services
at such time, then WCCI shall have the right to install and
occupy such Kiosks under the terms of this Agreement, subject to
Retailer's existing legal obligations to current carriers.
2. Kiosk Staffing
a. Hiring. WCCI will be responsible for staffing the
Kiosks with Kiosk Representatives during all regular business
hours of each Location, up to a maximum of eighty (80) hours per
week. For Retailer stores with kiosks having an area of 24
square feet or less (external dimensions), the minimum number of
hours per week that the kiosk must be staffed by WCCI shall be
reduced to sixty (60), ninety (90) days following initial
commencement of operation. However, all kiosks shall be staffed
eighty (80) hours per week during the period from November 15
through December 31 each year. WCCI will be responsible for
arranging, directly or through third-party employers, for all
screening, hiring, termination, compensation, workers'
compensation, disability and taxes applicable to persons staffing
the Kiosks. Kiosk Representatives shall wear clothing and name
tags which identify them as employees of WCCI and distinguish
them from Retailer employees, and shall not act or present
themselves as employees or agents of Retailer. Kiosk
Representatives shall adhere to the policies of Retailer
concerning security, dress (except as noted above) and deportment
and shall follow the directions of Retailer's managers regarding
these matters. Retailer shall have the opportunity to interview
all potential Kiosk Representatives after they have
satisfactorily completed WCCI's interview and selection process
(prior to hiring), and shall provide approval, not to be
unreasonably or untimely withheld, prior to conveyance of an
offer.
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b. Termination. In the event Retailer or WCCI becomes
dissatisfied with the conduct or performance of any Kiosk
Representative, then both Retailer and WCCI agree to cooperate in
good faith to review the relevant facts and issues in a timely
manner, and to mutually agree on the appropriate action to be
taken, which may include disciplinary action, switching of stores
or termination. Due consideration shall be given to the
recommendations of Retailer and Retailer's store management as to
the actions to be taken and the need to have competent,
professional Kiosk Representatives to serve the best interests of
Retailer and WCCI. Notwithstanding, after completion of the
above procedures, Retailer shall have the right, at its sole
discretion, on no less than one (1) business day's prior written
notice, to require WCCI to replace a particular Kiosk
Representative and not use this person at any other Location.
Retailer shall include in the notice described in the preceding
sentence the grounds for removal of such Kiosk Representative .
3. Fulfillment
a. Service. At Kiosks, WCCI representatives will: (i)
explain to customers the types of Service plans available; (ii)
explain and help customers complete the appropriate subscriber
agreement for the Service plan chosen; (iii) perform all
necessary credit checks; (iv) process all necessary deposits; and
(v) arrange for activation of Equipment; and (vi) provide
customer care service after activation of Subscribers. All
rates, terms and conditions of Service shall be set by WCCI's
approved carrier in its sole discretion. WCCI shall use its
best efforts to have all activations completed and tested at the
Kiosk, prior to completion of the transaction provided, however,
if the Subscriber desires off-site activation, WCCI shall have
the right to use its- "RAP" System for activation by the
Subscriber. Kiosk Representatives shall promote the availability
of on-site activation and only offer the "RAP" System in response
to a request to activate at a later time or due to the inability
of the local carrier to enable on-site activation. WCCI shall
make available from the Kiosk at each Location all service rate
plans which it or its carrier makes available in the Area for
such Location. WCCI agrees to accept returns of cellular
telephone equipment purchased from Retailer prior to the
effective date of this Agreement. Such returns shall be handled
by WCCI either refunding to the customer the amount of the
original purchase or providing replacement equipment, at the
customer's election, subject to the customer providing an
original sales receipt and that the request for refund or
exchange is not more than thirty (30) calendar days after the
original date of purchase. The parties shall mutually agree on
the procedure to follow for compensation and/or return between
each other, for such customer returns/exchanges on a product by
product basis.
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b. Equipment. (i) WCCI, through its Kiosk
Representatives, will offer to sell and sell Equipment from the
Kiosks. At all times prior to sale of the Equipment to a
Subscriber, all rights and title to the Equipment shall vest with
WCCI and WCCI shall have all rights and title to the proceeds of
the sale of Equipment. The retail price and models of Equipment
to be sold shall be determined by WCCI and WCCI shall use its
best efforts to offer competitive prices in the markets for each
Location. From the date of this Agreement through September 31,
1997, WCCI shall sell from the Kiosks all Equipment, if
available, advertised in Retailer's 1996-1997 merchandise catalog
to be sent to Retailer's customers in the summer of 1996. Upon
the request of Retailer, WCCI shall provide Retailer with
information regarding Equipment and Equipment retail prices so
that such information may be included in advertising mailers sent
by Retailer. Upon any renewal of this Agreement, the obligation
of WCCI to sell Equipment advertised by Retailer in its Annual
merchandise catalog shall continue and apply to WCCI for
corresponding times for each subsequent Annual Catalog. In the
event WCCI is unable to purchase Equipment advertised by
Retailer, or unable to purchase such Equipment at competitive
prices, Retailer, to the extent it has sufficient inventory,
shall sell such Equipment to WCCI in limited quantities at
Retailer's direct cost (including purchase price and other costs
directly relating to purchase, shipment and warehousing), on net
due 30 days terms. Retailer shall have the right to require
WCCI not to carry Equipment in Kiosks from a particular
manufacturer's supplier. WCCI shall comply with any such
request within ninety (90) days from receipt. Notwithstanding
anything in this Agreement to the contrary, Retailer shall have
the right to sell products related to cellular telephones, PCS,
mobile end stations, and wireless modems, such as, but not
limited to, accessories thereto, if such were offered by Retailer
at the time this Agreement was signed or if not carried by WCCI
for resale. Retailer agrees not to restock such products in any
Retailer Stores where Kiosks are operational if such products are
carried by WCCI in such stores.
(ii) WCCI also agrees to purchase Retailer's current
inventory in each location at the time its respective kiosk
operation commences. The purchase price shall be that indicated
in the list attached to this Agreement as Exhibit F. Payment
terms for such inventory purchased shall be 50% of purchase price
due thirty days from the date WCCI first commences operations of
the applicable KIOSK, and the remaining 50 percent due thirty
days thereafter.
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c. Subscriber Inquiries. Retailer shall refer all
inquiries from Subscribers or potential Subscribers regarding the
Service or Equipment, including, but not limited to, customer
care and Equipment return inquiries, to WCCI.
d. Sales Tax and Charge Card. WCCI shall be responsible
for receiving all payments from Subscribers for any required
security deposits and for Equipment sold by WCCI from the Kiosks
and for collecting and remitting any applicable sales taxes.
WCCI shall also accept the Service Merchandise charge card for
payment by Subscribers for Equipment and any required security
deposit. WCCI shall be liable for any chargebacks of the
purchase price for failure to obtain or retain the customer's
signature or to otherwise follow the required procedures of Bank
One in accepting the Service Merchandise Charge Card.
e. WCCI Contact Persons. WCCI hereby designates the
following persons for primary contact for communications on the
listed subjects:
Payment of fees to Retailer: Judanne Tyne
Personnel Issues: Xxxxx Xxxxxxxxx or Xxx Xxxxxxxxx
WCCI shall notify Retailer in writing of any changes in the above
designations.
4. Term and Termination
a. Term. The initial term of this Agreement shall begin
on the date of this Agreement and extend through January 31,
1998, unless earlier terminated by either party in accordance
with this Agreement. This Agreement shall automatically renew
for additional one-year terms unless either party gives the other
party written notice of its intent not to renew at least sixty
(60) days prior to the end of the then current term. However,
after the initial term, either party may terminate this Agreement
at any time with or without cause by providing sixty (60) days'
prior written notice, except that termination by either party
pursuant to this provision shall not be effective during the
months of October, November and December of each year.
b. Termination. This Agreement may be terminated by
either party, immediately upon the sending of a written notice to
the other party for any of the following reasons: (i) a breach by
one party which the other party does not fully cure within thirty
(30) days after the non-breaching party sends the breaching party
a written notice of the breach, (ii) the commission of any
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illegal act or the filing of any criminal indictment or
information against either party of its officers or directors who
have any participation in matters relating to this Agreement, or
(c) the insolvency of either party, either party becoming the
subject of a petition in bankruptcy, the appointment of a
receiver for either party's business, or the entry by either
party into any arrangement with or assignment for the benefit of
creditors.
c. Kiosk Removal. Upon receipt of any notice of
termination or intent not to renew, the parties shall cooperate
in effecting a prompt and orderly removal of the Kiosks and
Equipment and related materials from all Locations immediately
after termination of the Agreement.
d. Equipment Returns. After termination of this
Agreement, if Retailer elects to accept returns of Equipment from
Subscribers, Retailer shall refund Subscribers the amount paid to
WCCI, and WCCI shall reimburse Retailer for the amount of such
refunds plus return shipping charges within fifteen (15) days
following receipt of an invoice from Retailer provided such
returns were received within thirty (30) days following date of
purchase by the subscriber. Retailer shall ship returned
Equipment to WCCI, freight prepaid, FOB origin, within fifteen
(15) days following receipt of payment from WCCI for the refunds.
5. Compensation, Letter of Credit, Audit Rights
a. Fees. As compensation for the rights granted in this
Agreement to sell Service from Kiosks, WCCI agrees to pay to
Retailer a Program Fee ("Program Fee") and other fees according
to the terms of Exhibit C attached to this Agreement. WCCI may
amend Exhibit C upon ninety (90) days' prior written notice to
Retailer. In the event the Program Fee is amended by WCCI so
that the reduction during the initial term or any renewal term is
ten percent (10%) or greater, Retailer may terminate this
Agreement upon thirty (30) days' prior written notice to WCCI
provided Retailer sends such notice no more than fifteen (15)
days after Retailer receives notice of the amendment to
Exhibit C, upon which such termination is based.
b. Letter of Credit. WCCI agrees to immediately obtain
and continue to maintain for the benefit of Retailer, an
irrevocable letter of credit in an amount equal to the amount
owed under this Agreement plus applicable late payment charges,
rounded up to the nearest $10,000, in the event WCCI becomes more
than ten (10) days past due for any amounts owed to Retailer
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under this Agreement. The terms of the letter of credit shall
permit Retailer to obtain payment from the issuing bank the
amount of Program Fees and other fees due to Retailer pursuant to
Exhibit C and any other amounts due by WCCI to retailer under
this Agreement, when WCCI is greater that ten (10) days past the
due dates specified in this Agreement. The letter of credit
shall conform to the terms of that attached hereto as Exhibit D,
or as otherwise agreed to by the parties in writing. In the
event Retailer draws on the letter of credit, WCCI shall pay to
the issuing bank the amount necessary to return the amount of the
letter of credit to its original amount, and provide any
additional documentation necessary to verify to Retailer that
such has occurred: After termination or expiration of this
Agreement, upon payment by WCCI of all amounts owed by WCCI to
Retailer under this Agreement, Retailer shall so notify the
issuing bank in writing that all such obligations have been
satisfied by WCCI and that the Letter of Credit may be canceled.
c. Late Payment Charges. Amounts owed by WCCI to
Retailer under this Agreement which remain unpaid in excess of
thirty days following the due date, shall automatically incur a
late payment charge equal to the prime rate for the Chase
Manhattan Bank as of the date invoiced, plus two (2) percentage
points, per month.
d. Reports. WCCI agrees to timely provide to Retailer,
the reports listed in Exhibit E, in accordance with the time
periods designated and to the attention of the persons designated
therein. Such reports shall list the full name, address, land
line telephone number and cellular telephone number for each
subscriber. WCCI shall also make available to Retailer by means
of electronic data interchange or other electronic means of
communication, data for all transactions which occur through each
Kiosk on a daily basis. Such data shall contain sufficient
detailed information to enable verification in an independent
audit by or on behalf of Retailer that all transactions have been
correctly recorded and Retailer has been paid the correct amounts
by WCCI.
e. Audits. Retailer may audit WCCI's records at any
KIOSK and at its corporate operations headquarters (as well as
any central location used by WCCI to maintain its records) to
confirm WCCI's compliance with this Agreement. Such an audit
(a) may occur no more than two (2) times in any calendar year,
(b) requires one week's prior written notice to WCCI, (c) may
include only such records as are reasonably necessary to confirm
WCCI's compliance with its obligations under this Agreement, and
(d) shall be made at Retailer's expense. In the event the
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results of any audit show that WCCI owes Retailer more than
$1,000 from transactions occurring more than 60 days prior to the
audit, exclusive of amounts in dispute which WCCI has previously
notified Retailer, then in addition to paying the amount owed,
WCCI shall pay Retailer for its cost of the audit. The
provisions of this Audit Paragraph shall survive termination of
this Agreement.
f. Record Retention. WCCI shall maintain, at its own
expense, a disaster recovery plan which includes off-site storage
of records, data and equipment necessary for it to perform under
this Agreement in the event of a disaster at its principal
operational location.
g. Financial Disclosures. (i) Within sixty (60) days
after the close of each quarterly accounting period in each
fiscal year of USCI, Inc. other than the last such quarter of
any fiscal year, WCCI shall furnish to Retailer the consolidated
balance sheet of USCI, Inc. as at the end of such quarterly
period and the related consolidated statements of income and
sources and uses of cash for such quarterly period and for the
elapsed portion of the fiscal year ended with the last day of
such quarterly period. In each case the comparative figures for
the related period in the prior fiscal year shall be set forth
and certified by the chief financial officer of USCI, Inc. as
being prepared to the best of his knowledge, in accordance with
GAAP consistently applied, subject to normal year-end audit
adjustments and provided that such statements may omit footnote
disclosures required by GAAP.
(ii) Within one hundred twenty (120) days after the
close of each fiscal year for USCI, Inc., WCCI shall furnish to
Retailer the consolidated and consolidating balance sheets of
USCI, Inc. through the end of such fiscal year and the related
consolidated and consolidating statements of income and retained
earnings and cash flows for such fiscal year. In each case
comparative figures for the preceding fiscal year shall be set
forth. The consolidated financial statements shall be certified
by independent certified public accountant of recognized regional
or national standing acceptable to Retailer, and include a report
by such accounting firm stating that the audit was conducted in
accordance with GAAP consistently applied. It shall also be
certified by the chief financial officer of USCI, Inc.
6. Representations and Warranties
Both parties agree that they will adhere strictly to the
highest standards of fair dealing and business conduct, that they
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will timely cooperate with the other party in implementation and
operating under the terms of this Agreement, and that both shall
refrain from any business practice, promotion, or advertising
which may be injurious to the business or goodwill of either.
7. Service Marks, Trademarks and Trade Names/Advertising
x. Xxxxx. Neither party will use any of the service
marks, trademarks, or trade names (collectively the "Marks") of
the other party without such party's prior written consent and
only under the terms of any such consent; provided, however, that
WCCI may use, without Retailer's consent, Retailer's name and
address in promotional materials and advertising for the purpose
of informing potential subscribers of locations at which Service
may be purchased. Each party will comply with all rules and
procedures pertaining to the Marks prescribed by the owner of
such Marks as may be amended from time to time (collectively the
"Rules"). Any unauthorized use of the Marks will constitute a
material breach of this Agreement. Upon termination of this
Agreement, each party will immediately discontinue any use of the
other party's Marks.
b. Advertising. Any advertising by WCCI relating to the
offer of Service and for Equipment through KIOSKS shall include
specific Retailer store locations and shall first be approved in
writing by Retailers. Retailer agrees to use its best efforts
to review and provide notice of approval or disapproval by the
end of the second business day following receipt of each
advertisement from WCCI.
8. Exclusivity
a. Non-Compete. Retailer agrees that at all times during
the term of this Agreement, neither it nor its personnel shall
directly or indirectly offer Services or assist customers in
obtaining Services through any competitor of WCCI in the Area,
including, but not limited to, competitors of WCCI or WCCI's
affiliates providing cellular telephone service (either voice or
data), enhanced specialized mobile radio service, personal
communications service, or any other similar situated voice
radiotelephone or wireless data service ("Competitor").
Similarly, Retailer shall not permit any Competitor to directly
or indirectly solicit customers from any Location. To the
extent a court of competent jurisdiction determines provisions of
this paragraph to be unenforceable as written, Retailer and WCCI
authorize such court to construe and interpret this paragraph as
broadly as possible. The parties acknowledge and agree that the
exclusivity requirements in this Agreement shall not apply to
one-way messaging/paging or two-way messaging/paging services,
except where supported by a cellular network.
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b. Failure to Provide Service. Notwithstanding, in the
event WCCI fails to provide Service for one or more Locations for
a period of time extending beyond two or more calendar days, in
addition to any other remedies Retailer may have against WCCI,
Retailer shall have the right to unilaterally enter into an
agreement with a replacement Service provider for such
Location(s) and to delete such Location(s) from Exhibit B to this
Agreement by providing written notice to WCCI, provided however,
that WCCI shall not be obligated to process activations from such
Location(s) for any such replacement Service providers. In such
event, no exclusivity or non-compete provisions stated in this
Agreement shall be applicable to the Area(s) for the Location(s).
c. Other Services. If Retailer desires to offer or have
offered other wireless communications services (other than
paging) through its stores, which are not then being offered by
WCCI, WCCI shall have the right to match the terms offered to
Retailer by any other entity. If WCCI does match the terms,
WCCI shall receive the right to offer such additional service
through its kiosks in accordance with the terms of this Agreement
and the fee schedule agreed to at that time. If WCCI elects not
to match such terms, then Retailer may contract with such third
party and offer services of the third party through Retailer's
stores.
9. Non-Diversion of Subscribers
During the term of this Agreement and for a period of one
year after termination of this Agreement, Retailer shall not at
any time (i) specifically request any Subscriber of WCCI whom
Retailer knows to be a Subscriber of WCCI, to cancel or curtail
its business with WCCI, or (ii) otherwise solicit, divert or
attempt to divert any such Subscriber from doing business with
WCCI. Notwithstanding, Retailer's continuing to advertise by
mailing advertisements similar to those currently distributed, to
its mailing lists, shall not be considered in violation of this
paragraph.
10. Confidentiality
a. General. Each party (the "Receiving Party") covenants
and agrees that, both during the term of this Agreement and for
two years thereafter, it shall not use or xxxxxxxx.xx any person
or entity any Confidential Information of the other party (the
"Disclosing Party"), shall not in any other way publicly or
privately disseminate any Confidential Information, and shall not
help anyone else to do any of these things, unless required to do
so by law. "Confidential Information" shall mean all
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information disclosed by the Disclosing Party to the Receiving
Party, not generally known to the public, that relates to the
business or subscribers of either party, provided it is
identified as being "Confidential". All Confidential
Information shall be considered trade secrets of the Disclosing
Party and the Receiving Party shall treat such Confidential
Information as it would treat its own Confidential Information.
In the event of disclosure of Confidential Information by the
Receiving Party, the Receiving Party shall be liable for direct
damages and shall not be liable for any consequential damages.
b. Subscriber List. WCCI shall provide Retailer with the
names, addresses, and phone numbers of persons who purchase
Equipment within each Location. This information shall be
considered Confidential Information of WCCI and Retailer shall
also have the right to add this information to its customer
database and use it in the same manner as it uses other names and
addresses in this database, provided Retailer does not use such
information, either during the term of this Agreement or for one
year thereafter, to solicit Subscribers to wireless
communications services offered by any competitor of WCCI as set
forth in section 9 above.
11. Relationship of Parties
In all dealings within the scope of this Agreement, both parties
acknowledge and agree that the relationship created hereby is
that of independent contractors and is not and will not be deemed
to be of any other relationship, including, without limiting the
generality of the foregoing, that of joint ventures, joint
employers, principal and agent, or partnership. Nothing in this
Agreement shall be construed to confer any right on one party to
incur any legal obligation on behalf of the other party. WCCI
has not paid and will not be required to pay any franchise fees
or equivalent fee to sell the Equipment or Service from the
Kiosks, nor does this Agreement create any franchise between the
parties.
12. Miscellaneous
a. Governing Law. This Agreement shall be governed by
the laws of the State of Tennessee. The determination by any
court, agency or other governmental instrumentality that any
provision of this Agreement is invalid or unenforceable shall not
invalidate any other provision of this Agreement
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b. Waivers. The rights of the parties under this
Agreement are cumulative. No waiver of any covenant, condition
or limitation contained in this Agreement shall be valid unless
agreed to in writing and signed by an authorized representative
of each party.
c. Regulatory Matters. This Agreement shall at all times
be subject to (1) changes or modifications to comply with, and
(2) any necessary approvals of local, state and federal
regulatory agencies having jurisdiction over the offering or
provision of Service. Retailer shall take no action
inconsistent with any efforts by WCCI before regulatory
authorities. Retailer and WCCI shall comply with all FCC or
other governmental agency rules and regulations, all tariffs (if
applicable), and all state, federal, local laws, regulations,
rules and procedures which apply to this Agreement.
d. Force Majeure. Neither party shall be liable for loss
or damage or be deemed to 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 of 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.
e. Entire Agreement. This Agreement and the Exhibits
hereto represent the entire agreement of the parties and may only
be amended or superseded by written agreement executed by both
parties.
f. Assignability. Either party may assign this Agreement
upon thirty (30) days' written notice to the other party, to a
parent, subsidiary, or affiliated entity, or to an entity in
connection with any merger, consolidation or reorganization with,
or the sale of all of the party's assets to, such entity, so long
as the assignee is financially secure and the assigning party
remains secondarily liable for the obligations and liabilities
assumed by the assignee. Except to the extent set forth above,
neither party may assign this Agreement nor any of its
obligations hereunder without the other party's prior written
consent, which consent shall not be unreasonably withheld, and
any assignment made without such consent shall be deemed to be
null, void and to have no effect.
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g. Survivability. All terms, provisions,
representations, warranties, covenants and obligations of either
party set forth herein which by their terms or nature extend
beyond the termination or expiration, shall survive any
termination or expiration of this Agreement.
h. Indemnification. Retailer and WCCI hereby agree to
indemnify, defend, and hold the other party, and its directors,
officers, employees, agents and/or assignees, and their heirs and
legal representatives harmless against any liability for any
claims or demands made by third parties arising out of the
conduct of the indemnifying party's business or its breach or
violation of any of the terms of this Agreement or its violation
of any federal, state, or local law or regulation. The parties
agree that the obligations provided pursuant to this paragraph
shall not be limited to any applicable workers' compensation
statute.
i. Insurance. During the term of this Agreement, each
party shall maintain comprehensive and general liability
insurance policies in effect with limits of at least $3 million
per occurrence and shall cause the other party to be listed as an
additional insured party under such policies. WCCI shall also
obtain an endorsement listing Retailer and WCCI as named
additional insureds on the general liability and product
liability insurance policy for each manufacturer or supplier of
equipment. A certificate of insurance indicating compliance
with this paragraph shall be sent by each party to the other
party within thirty days following the execution of this
Agreement by both parties, to the attention of the Insurance
Department or Risk Management for each party, with a copy to the
person listed in Paragraph l below, and annually thereafter.
j. Other. Either party to this Agreement may take any
steps (including proceeding in law or in equity for injunctive
relief and specific performance) necessary to protect its rights
hereunder. Personnel employed by, or acting under the
authority-of, a party hereto shall not be deemed to be employees
or agents of the other party, and the first party assumes full
responsibility for their acts and shall have sole responsibility
for their supervision and control. Each party shall notify the
other party in writing within five (5) days of the commencement
of any action, suit or proceeding, or the issuance of any order,
writ, injunction, award or decree of any court, agency or other
governmental instrumentality, involving the subject matter of
this Agreement.
14
k. Attorneys' fees. If a lawsuit is brought under this
Agreement by wither party, the prevailing party shall be entitled
to recover reasonable attorneys' fees from the non-prevailing
party.
l. Notices. All notices hereunder shall be in writing,
shall be effective upon receipt, and shall be sent either by
personal delivery, certified or registered mail, return receipt
requested, or by overnight courier service with proof of
delivery, to the following address:
Service Merchandise WCCI
Address: Address:
Service Merchandise Company Wireless Communications Centers
7100 Service Merchandise Dr. 0000-X Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx Attn: Xxxxx Xxxx
EXECUTED as of the date first written above.
SERVICE MERCHANDISE COMPANY, INC. WIRELESS COMMUNICATIONS
CENTERS, INC.
By: /s/ X.X. XxXxxxxx By: /s/ Xxxxx Xxxx
Name: X.X. XxXxxxxx Name: Xxxxx Xxxx
Title: EVP Title: President
Date: 10/11/96 Date: 10/10/96
15
EXHIBITS
List of Exhibits to Kiosk Program Agreement Between Service
Merchandise Company, Inc. and Wireless Communications Centers,
Inc.
A. Area Listing
B. Retail Store Location Listing
C. Program Fee Terms
D. Letter of Credit Sample
E. Reports to be Provided to Retailer
F. Price List for Equipment to by sold to WCCI
16
EXHIBIT A
MARKETS
PRIORITY CARRIER MARKET
1 AirTouch Atlanta
2 Ameritech Chicago
0 XX Xxxx Xxxxxxxx
0 Xxxxxxxx Xxx Xxxx
5 ComCast New Jersey
6 Nynex New Hampshire
7 U.S. Cellular New Hampshire
8 Vanguard New Hampshire
Pennsylvania, Florida
9 Ameritel Tennessee, Kentucky,
Alabama
10 SNET Connecticut
11 XX Xxxx Missouri
12 Alltel N. Carolina
13 Sprint Virginia
NOTE: WCCI shall have the right to change the carrier without
prior authorization of Retailer, but shall notify
Retailer at least thirty (30) calendar days before any
change in a carrier.
17
EXHIBIT B
LOCATIONS
PROJECTED
KIOSK INSTALLATION THIRD PARTY
MARKET STORE NO. SIZE DATE CARRIER*
Atlanta 20 B Airtouch
21 C Airtouch
25 A Airtouch
62 C Airtouch
63 C Airtouch
248 C Airtouch
249 A Airtouch
250 C Airtouch
251 A Airtouch
252 B Airtouch
278 B Airtouch
Chicago 50 C Ameritech/USCI
51 C Ameritech/USCI
55 B Ameritech/USCI
56 C Ameritech/USCI
58 C Ameritech/USCI
98 A Ameritech/USCI
130 B Ameritech/USCI
181 B Ameritech/USCI
191 C Ameritech/USCI
194 C Ameritech/USCI
265 B Ameritech/USCI
279 B Ameritech/USCI
286 A Ameritech/USCI
287 B Ameritech/USCI
291 A Ameritech/USCI
310 A Ameritech/USCI
311 A Ameritech/USCI
355 B Ameritech/USCI
394 C Ameritech/USCI
398 C Ameritech/USCI
402 C Ameritech/USCI
535 C Ameritech/USCI
548 C Ameritech/USCI
549 C Ameritech/USCI
558 A Ameritech/USCI
559 C Ameritech/USCI
Florida 428 - Vanguard
Indiana 73 A Contel/USCI
18
EXHIBIT B - LOCATIONS continued
PROJECTED
KIOSK INSTALLATION THIRD PARTY
MARKET STORE NO. SIZE DATE CARRIER*
Maryland 225 A B.A./Nynex
231 C B.A./Nynex
319 B B.A./Nynex
349 A XX Xxxx
235 - B.A./Nynex
434 - B.A./Nynex
New York 69 A Frontier/USCI
80 C Frontier/USCI
206 A Frontier/USCI
275 B Frontier/USCI
167 - B.A./Nynex-USCI
NJ/PA/DE 122 C ComCast
354 C ComCast
397 B ComCast
722 A ComCast
396 C ComCast
473 A ComCast
202 - ComCast
232 - ComCast
000 - XxxXxxx
Xxx Xxxxxxxxx 000 A Nynex/USCI
229 B Nynex/USCI
91 A Nynex/USCI
307 A Nynex/USCI
26 A STAR
Tennessee, 14 C Xxxx South
Kentucky,
Alabama, NC
15 C Xxxx South
16 A Xxxx South
18 A Xxxx South
23 A Xxxx South
67 A Xxxx South
78 C Xxxx South
94 A Xxxx South
101 Xxxx South
163 A Xxxx South
171 A Xxxx South
174 C US Xxxx./XXXX
000 - Xxxx Xxxxx
000 - Xxxx Xxxxx
19
EXHIBIT B - LOCATIONS continued
PROJECTED
KIOSK INSTALLATION THIRD PARTY
MARKET STORE NO. SIZE DATE CARRIER*
000 X Xxxx Xxxxx
000 X Xxxx Xxxxx
000 X US Cell./USCI
271 C Xxxx South
272 A Xxxx South
296 A Xxxx South
334 B Xxxx South
427 C Xxxx South
466 C Xxxx South
777 A Xxxx South
Xxxx. 40 - B.A./Nynex
184 C B.A./Nynex
221 - B.A./Nynex
316 - B.A./Nynex
340 - B.A./Nynex
820 - B.A./Nynex
826 - B.A./Nynex
829 - B.A./Nynex
Missouri 000 X XX Xxxx
000 X XX Xxxx
246 A XX Xxxx
000 X XX Xxxx
000 X XX Xxxx
X. Xxxxxxxx 22 C Alltel/USCI
28 A Alltel/USCI
68 B Alltel/USCI
332 C Alltel/USCI
Penn. 82 - Vanguard
84 - Vanguard
198 - Vanguard
00 - Xxxxxxxx
000 - Xxxxxxxx
000 - Xxxxxxxx
Xxxxxxxx 297 XX Xxxx
000 XX Xxxx
000 XX Xxxx
000 - XXX-Xxxxxxxx 1
312 - XX Xxxx
315 XX Xxxx
318 - GTE-Cellular 1
20
EXHIBIT B - LOCATIONS continued
PROJECTED
KIOSK INSTALLATION THIRD PARTY
MARKET STORE NO. SIZE DATE CARRIER*
000 Xxxx Xxxxx
000 - Xxxx Xxxxx
373 XX Xxxx
391 - GTE-Cellular 1
Mass. 135 - B.A./Nynex-USCI
149 - B.A./Nynex-USCI
306 - S.N.E.T.
383 - B.A./Nynex-USCI
392 - B.A./Nynex-USCI
787 - B.A./Nynex-USCI
831 - B.A./Nynex-USCI
839 - B.A./Nynex-USCI
Vermont 834 - B.A./Nynex-USCI
*NOTE: Any store noted to be associated with a third party
carrier (i.e., carrier other than USCI) shall not be
deemed to be part of this Agreement until Retailer
advises WCCI that it is legally able to switch such
store to WCCI coverage.
KEY for Kiosk size: A=6'x 8' B=6' x 8' low profile C=5'x 2'
21
EXHIBIT C
1. Program Fee for Cellular Voice Activations
a. Retailer shall be paid a Program Fee in the amount of
$25 for each activation of a Subscriber on a WCCI retail
rate plan ("Service Activations") obtained by WCCI in each
location, except as to Service Activation where the
Subscriber obtains a cellular telephone purchased pursuant
to paragraph 3.b.(ii) by WCCI from Retailer's inventory, in
which case the Program fee shall be $12.50.
b. For the purpose of this Schedule, an activation on a
WCCI retail rate plan shall be considered a Service
Activation when WCCI has obtained a subscription for
Service, WCCI has accepted the Subscriber and activated a
cellular telephone number on the Service for such
Subscriber, and the cellular telephone number has not been
deactivated on or before the end of the calendar month in
which Service was activated.
c. The following shall not be considered a Service
Activation for the purposes of determining the Program Fee:
i. Activations on a WCCI rate plan of existing
Subscribers who retain their respective cellular
telephone numbers ("ESN Changes").
ii. Activation with respect to a Subscriber who was,
at any time within the ninety-day period immediately
prior to the activation, a Subscriber to WCCI's
Service; provided that additional cellular telephone
numbers activated by such a Subscriber may qualify as a
Service Activation.
d. Retailer shall be paid an Accessory Fee in the amount
of fifty percent (50%) of the gross retail sales price
(excluding sales taxes) paid to WCCI of each Cellular
Accessory sold from the Kiosks in Retailer's Locations.
For the purposes of the Accessory Fee, "Cellular
Accessories" shall include Equipment other than cellular
telephones or wireless modems which are sold to a Subscriber
in a transaction separate from such Subscriber's activation
of Service with WCCI.
e. In the event that a WCCI affiliate in any other area
offers an Upgrade Program, under which a Subscriber who has
been active on Service for at least one year and who
purchases a new cellular telephone at a sales price in
22
return for an additional one-year commitment for Service,
and a Subscriber participates in such Upgrade Program at a
Kiosk within a Location, Retailer shall be paid a Program
Fee for such Subscriber's participation.
2. Program Fee for Cellular Data Activations
a. Retailer shall be paid a fee of $20 for each new or
existing Subscriber obtained by Wireless Communications
Centers, Inc. in each location who (a) registers for new
circuit-switched data service ("CDS Service") offered by
WCCI and (b) purchases a CDS Service Enabling Product or a
WCCI-offered value pack from WCCI at the Location.
b. Notwithstanding the foregoing, Retailer shall not
receive any fee for any Subscriber who was, at any time
within the ninety-day period immediately prior to
registration, a Subscriber to CDS Service, unless such
Subscriber is adding additional CDS Service.
c. "CDS Service Enabling Product" is defined as a cellular
modem cable or laptop computer that enables a laptop
computer to access and to operate over cellular networks.
3. Program Fee for PCS Activations
a. Retailer shall be paid a fee to be determined later for
each new or existing subscriber obtained by WCCI to activate
PCS service, which will later be mutually agreed to by the
parties, but which shall in no event be less than $35.00 per
PCS activation.
4. Payment Terms
a. Retailer shall be paid Program Fees, Accessory Fees and
any other fees due under this Exhibit C, on or before the
twentieth business day after the end of the calendar month
in which such Service Activation or accessory sale occurred.
23
EXHIBIT D
DRAFT
(DATE) ____________________
IRREVOCABLE DOMESTIC LETTER OF CREDIT NO. ________
BENEFICIARY: SERVICE MERCHANDISE COMPANY, INC.
0000 XXXXXXX XXXXXXXXXXX XXXXX
XXXXXXXXX, XX 00000
APPLICANT: WIRELESS COMMUNICATIONS CENTERS, INC.
0000-0 XXXXXXXXX XXXXXXX
XXXXXXXX, XX 00000
Dear Gentlemen:
We hereby establish our Irrevocable Standby Letter of Credit No.
________ in Beneficiary's favor for the account of Applicant, up
to an aggregate amount of $ ________, expiring on February 28,
1998, at the counters of ________ Bank, Atlanta, Georgia,
available by payment against Beneficiary's draft(s) drawn on
________ Bank at sight, accompanied by:
1. A written statement signed by an officer of the Beneficiary
certifying that:
"I, the undersigned, an officer of Service Merchandise
hereby certify that (a) Wireless Communications Centers,
Inc. ("WCCI") has failed to pay fees and commissions and/or
other amounts ("Unpaid Commissions") due to Service
Merchandise Company Inc. ("SMC") under their Kiosk Program
Agreement dated ________ ("the Agreement") (b) said Unpaid
Commissions have remained payable for longer than ten (10)
calendar days after their due date, (c) said Unpaid
Commissions are now due and payable, (d) that the notice
required under Paragraph 3 herein has been duly given in
accordance with the notice procedures of Section 12,
paragraph L of the Agreement, and (e) a copy of the notice
is attached with proof of its delivery."
2. A copy of the applicable WCCI "Commission Pass-Through
Report(s)" or equivalent report which indicate(s) the amount
of Commissions payable to Service Merchandise by cellular
telephone number, or, in the event WCCI has failed to
24
provide the required Commission Pass Through Report(s), a
copy of the SMC Statement of Account for WCCI, which
indicates the amount of Unpaid Commissions; or other
applicable documentation.
3. A copy of the document that Service Merchandise sent to WCCI
giving at least forty eight (48) hours (excluding weekends
and holidays) prior written notice of its intention to draw
upon this Letter of Credit.
4. A copy of the proof of delivery of the Notice to WCCI
showing delivery at least forty eight (48) hours (excluding
weekends and holidays) prior to drawing upon this Letter of
Credit.
SPECIAL CONDITIONS
Partial drawings are permitted.
ANY DRAFT DRAWN UNDER THIS CREDIT MUST BE MARKED "DRAWN UNDER
IRREVOCABLE STANDBY LETTER OF CREDIT NO. ________ ISSUED BY
________ BANK, DATED ________."
EXCEPT AS OTHERWISE STATED HEREIN, THIS LETTER OF CREDIT IS
SUBJECT TO THE 1993 REVISION OF THE UNIFORM CUSTOMS AND PRACTICE
FOR DOCUMENTARY CREDITS OF THE INTERNATIONAL CHAMBER OF COMMERCE
(PUBLICATION NO. 500).
WE HEREBY ENGAGE WITH YOUR DRAWERS, ENDORSERS, AND BONA FIDE
HOLDERS THAT ANY DRAWING NEGOTIATED UNDER AND IN COMPLIANCE WITH
THE TERMS OF THIS LETTER OF CREDIT, WILL BE DULY HONORED ON
PRESENTATION TO ________ BANK, ATLANTA, GA ON OR BEFORE THE
EXPIRATION DATE.
________ BANK
By: ______________________
Name: ____________________
Title: ___________________
Date: ____________________
25
EXHIBIT E
REPORTS TO BE PROVIDED TO RETAILER:
Commission Pass-through Report
The above report shall include full name, address, land line
telephone number, and cellular telephone number for each
subscriber.
26
EXHIBIT F
CATALOG NO. QTY. ON HAND* AVE. COST TOTAL $
13202MLA 85 $ 227.27 $ 19,317.95
12354MLA 33 $ 204.73 $ 6,756.09
13222MLA 497 $ 195.78 $ 97,302.66
13205MLA 330 $ 214.10 $ 70,653.00
13214MLA 836 $ 161.65 $ 135,139.00
l2396MLA 263 $ 196.72 $ 51,737.36
800EGL 617 $ 219.36 $ 133,512.63
140EAB 1532 $ 227.49 $ 348,514.68
3625ABL 864 $ 210.68 $ 182,027.52
29983PPF 472 $ 303.79 $ 143,388.88
5000PPF 565 $ 277.75 $ 156,702.75
550PPF 2175 $ 198.50 $ 431,737.75
650PPF 938 $ 225.00 $ 211,050.00
MO2PPF 938 $ 271.50 $ 254,667.00
3815ABL 746 $ 146.02 $ 108,930.92
RD232BR 633 $ 267.50 $ 169,327.50
BN232BR 832 $ 267.50 $ 222,560.00
BL232BRG 976 $ 267.50 $ 261,080.00
1332
TOTAL $3,004,405.84
*as of September 1, 1996
27
