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EXHIBIT 10.4
PRIVATE LABEL RESELLER AGREEMENT
This Private Label Reseller Agreement (the "Agreement") is made as of the __ day
of April, 2000, by and between Shared Technologies Cellular, Inc., a Delaware
corporation, having its principal place of business at 000 Xxxxx Xxxxxx Xxxx,
Xxxxx 000, Xxxxxxxxxxxx, XX 00000 ("STC"), and Reseller.
RESELLER: SATX, INC.
ADDRESS: SATX INC., 0000 XXXXXXXXXX XXXX., XXXXX X-0, XXXXX, XX 00000
WHEREAS, Reseller intends to provide certain STC prepaid cellular services
("Services") to Customers under a private label program, and STC agrees to
assist Reseller in providing such Services, pursuant to the terms and
conditions hereof.
NOW, THEREFORE, in consideration of the promises and covenants contained herein,
the parties agree as follows.
1. DEFINITIONS.
The following terms when used herein have the following meanings:
"ACTIVATION" The process by which a Phone becomes initially activated for use of
the Services. More specifically, after purchasing a Phone a Customer calls STC
and provides the Phone's ESN and the Customer's local zip code and area code to
STC. In response, STC assigns a MIN to the Phone. STC shall provide Reseller
with access to STC's database with respect to MINs assigned pursuant to this
Agreement.
"CARD" A card that has a PIN printed on it, which is purchased by a Customer to
obtain Service.
"CELLEASE" STC's subsidiary, XxxxXxxx.xxx, Inc.
"CELLEASE MEMBER AGREEMENT" Agreement between Reseller and CellEase entered
into concurrently with this Agreement as an express condition for entry into
this Agreement. Pursuant to the CellEase Member Agreement, CellEase provides
certain Redemption and related transaction processing services utilizing its
universal prepaid services platform.
"CUSTOMER" An end user of the Services.
"ESN" Electronic serial number. Each Phone has a unique ESN that appears on the
Phone.
"INITIAL BONUS PIN" Refers to Service that may be preloaded into a Phone prior
to its sale to a Customer.
"STC'S IVR" STC's interactive voice response system.
"MIN" A mobile identification number, which is the equivalent of a phone number,
and which is assigned to a Phone when a Customer Activates such Phone. STC will
sell MINs to Reseller pursuant to the terms hereof.
"PIN" A personal identification number, which appears on the back of a Card.
"PHONE" A cellular phone that utilizes the Services. Phones are sold to
Customers by Reseller and/or its Retailers.
"PHONE KIT" A package for retail sale to Customers that contains a Phone. By
mutual agreement of the parties, a Phone Kit may also include a Card or an
Initial Bonus PIN preloaded into the Phone.
"POS MATERIALS" Point of sale materials, such as Phone Kit packaging, labeling,
instructions, coverage maps, signage, and marketing materials such as retail
displays and product brochures. Production of all POS Materials is the
responsibility of Reseller. However, all POS Materials relating to the Services
or any trademark of STC are subject to the prior written approval of STC.
"REDEMPTION" The process by which a Customer redeems a PIN from CellEase to
obtain Services, pursuant to the CellEase Member Agreement.
"RETAILERS" Those retailers through which Reseller may sell Phones and the
Services.
"SERVICES" Prepaid cellular services provided to Customers by Reseller under a
Reseller private label.
- "LOCAL SERVICE" Local Service pertains to calls made by a Customer that
originate and terminate within the local cellular service area of the
Customer's MIN ("LOCAL AREA"). Local service rates also apply to
airtime for all incoming calls received by a Customer within such
Customer's Local Area, regardless of from where they originate.
- "LONG-DISTANCE" Long-distance service airtime pertains to calls made by
a Customer that originate within the Customer's Local Area and
terminate outside of such Local Area, but within the U.S., Canada or
Puerto Rico.
- "ROAMING" Roaming applies to all calls made or received by a Customer
outside of such Customer's Local Area. The Services do not include
calls by a
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Customer from outside of the U.S. or which terminate outside of the
U.S., Canada or Puerto Rico.
"SRP" Suggested retail price. This refers to the face value of a Card or PIN.
"RESELLER ACC" An airtime control code generated by STC, on behalf of Reseller,
on Reseller's technology platform, then transmitted to CellEase by STC and
provided to a Customer by CellEase when the Customer Redeems a PIN for Service
through CellEase.
"STC IVR" STC's interactive voice response system, through which STC provides
Activations and Customer support services. The STC IVR ordinarily operates 24
hours a day, seven days a week.
"UNIT" A Unit is an increment of Service. (See Section 5).
2. TERM. This Agreement shall commence as of the date first written
above and have an initial term of two (2) years. The term hereof shall
automatically renew for successive one (1) year terms unless either party gives
notice of termination at least 90 days prior to the end of the term then in
effect. STC agrees to maintain pricing competitive within the prepaid cellular
markets in which the Services are to be provided pursuant to this Agreement. In
the event that STC fails to provide such competitive market within any such
market, then Reseller shall have the right to utilize another provider of
prepaid cellular services in such market.
3. TERMINATION. Both parties have the right to terminate this Agreement
by reason of an uncured default of the other party in accordance with Section 4
hereof.
4. DEFAULT. Except as otherwise provided in this Agreement, in the event
either party fails to perform any of its obligations under this Agreement and
such failure continues for more than ten (10) business days or, in the case of
a non-monetary default, thirty (30) days, following written notice of such
default, then the non-defaulting party shall have the right to terminate this
Agreement immediately upon written notice to the other party, without limiting
any other remedies available hereunder or at law or in equity.
5. PRICING OF UNITS. Suggested retail pricing ("SRP") for the Services
shall be priced on a Unit basis. Local and Long-Distance Service each shall be
priced at one Unit per minute of Service and Roaming shall be priced at three
Units per minute, inclusive of all federal telecommunications taxes.
6. ADDITIONAL RESPONSIBILITIES OF STC. In addition to the
responsibilities of STC elsewhere stated herein, STC has the following
responsibilities:
(a) Sale of MINs to Reseller. STC shall sell to Reseller MINs for Phones
sold by Reseller to Customers. Such MINs will be provided in connection with
Activations of Phones sold by Reseller and Activated by STC on behalf of
Reseller. STC will invoice Reseller for all MINs in advance of each month, and
in arrears for any final (but not initial) partial month in which any MIN was
active, in accordance with the MIN Rate Schedule attached hereto and made a
part hereof as Schedule A. No invoice shall be issued for any initial partial
month for a MIN.
(b) Reseller ACCs. STC will generate Reseller ACCs for the Services on
behalf of Reseller using Reseller's technology platform. STC shall be the only
party, with access to Reseller's technology platform with respect to generating
Reseller ACCs for the Services. Neither Reseller nor any third party shall have
such access. Reseller hereby authorizes STC to invoice CellEase and collect
payment from CellEase for each Reseller ACC that STC generates and which is
Redeemed through CellEase. See Schedule A of this Agreement for applicable MIN
rates.
(c) Activations. STC will use commercially reasonable efforts to Activate
each Phone within 24 business hours from STC's receipt of a Customer's
telephonic Activation order or Reseller's electronic order.
(d) Carrier Relations. STC is responsible for maintaining agreements with
cellular carriers required for the provision of the Services. Therefore, STC is
the customer of record with cellular carriers and is responsible for payment of
charges billed to STC for the Services, subject to Section 6(e), below.
(e) Fraud/Cloning. Notwithstanding Section 6(e) above, Reseller is
responsible for carrier charges that may result from the cloning of MINs or
ESNs relating to the Services. However, STC agrees to use commercially
reasonable efforts to obtain credits from carriers with respect to any such
fraud or cloning charges whenever practicable. Reseller hereby agrees to
indemnify, defend and hold STC harmless with respect to any claims,
liabilities, damages or costs, including, without limitation, reasonable
attorneys' fees, that may be asserted or recovered against or incurred by STC
with respect to any fraud or cloning relating to MINs sold to Reseller by STC
pursuant to this Agreement.
(f) STC's IVR and Call Center. STC shall operate and maintain the STC
IVR. STC also shall provide call center services to back up the STC IVR for
additional Customer support Monday through Saturday, 8:00 a.m. to midnight,
Eastern Time, excluding major holidays. STC shall provide a toll-free telephone
number for Customers to access the STC IVR and call center services.
(g) Taxes. STC is responsible for the payment of all federal
telecommunications taxes applicable to the Services.
(h) Reporting. STC shall provide monthly reports to Reseller detailing
MIN sales, Activations of Phones sold
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by Reseller, billing data and related information.
8. RESELLER'S RESPONSIBILITIES. In addition to the responsibilities of
Reseller elsewhere stated herein, Reseller has the following responsibilities:
(a) MINs. Reseller will purchase MINs exclusively from STC for all Phones
sold directly or indirectly by Reseller, subject to the price competition
requirements set forth in Section 2 hereof.
(b) Marketing and Distribution; Exclusively. Reseller shall market, promote
and sell Phones and Services using commercially reasonable efforts to
effectively promote such sales to the same degree as it would any of its other
major products and services. Such efforts shall include, without limitation,
facilitating in-store Retailer promotions and advertising in Retailers'
circulars. During the term of this Agreement, Reseller shall market and sell
the Services to the exclusion of all other similar products and services,
subject to the price competition requirements set forth in Section 2 hereof.
(c) Point of Sale Materials. Reseller is responsible for production of all
POS Materials, including, without limitation, product packaging for Phone Kits,
labeling, instructions, coverage maps, signage, and marketing materials such as
retail displays and product brochures. Such POS Materials shall be subject to
STC's prior approval as to form and content with respect to the Services and
any trademark of STC, which approval shall not be unreasonably withheld or
delayed. Without limiting the foregoing, all POS Materials shall clearly
display the CellEase(R) logo and STC's toll-free number for Customers to call
for Activation, technical support, and Customer service.
(d) Technology Rights/Systems. Reseller shall maintain agreements with
technology providers for licensing applicable technology(ies), generating
Reseller ACCs and providing programming for Phones. Reseller shall provide STC
with exclusive access to such technology platform (see Section 6(b) above).
(e) Programming of Phones/Transmittal of Data. Reseller shall program all
Phones prior to their sale, subject to STC's programming specifications to be
provided by STC to Reseller from time to time. Reseller shall electronically
transmit to STC all data reasonably required by STC to track ESNs and PINs, and
shall further provide to STC monthly reports detailing sales of Phone Kits, by
Retailer, including, without limitation, data concerning all ESNs of Phones
shipped to such Retailers, all such data to be supplied in a format reasonably
acceptable to STC.
(f) Payment. All invoices provided to Reseller by STC pursuant to this
Agreement are due and payable within ten (10) days of the invoice date. Any
invoiced amount not paid when due shall accrue a late payment charge at a
monthly rate equal to the lesser of 1.5% or the highest lawful rate.
(g) Deposit. Reseller shall provide to STC a security deposit to secure
Reseller's payment obligations hereunder. Such deposit shall be in the initial
amount of $100,000 and shall be subject to adjustment from time to time in
STC's discretion. STC shall have the right to drawdown against such deposit any
amount(s) not paid by Reseller when due, in which event Reseller shall restore
the deposit to its original required level within five (5) days of Reseller's
receipt of notice of any such drawdown. STC shall return any remaining deposit
to Reseller upon the termination of this Agreement, subject to STC's right to
withhold therefrom any amounts then owing to STC by Reseller as of such date.
(h) Training. Reseller shall train its and Retailers' sales personnel with
respect to the Phones and Services.
(i) Taxes. Reseller shall charge, collect and remit all state and local
taxes and tax-like surcharges applicable to the sale of Phones and Services to
Customers.
9. TRADEMARKS/SERVICE MARKS USAGE. Neither party shall use any trademarks,
service marks or tradenames (collectively, "Marks") of the other in any manner,
except as expressly authorized in writing or in this Agreement. All Marks
shall remain the exclusive property of the Mark's owner, without any right of
implied license pursuant to this Agreement. Upon termination of this Agreement,
the parties shall return to each other all marketing and sales materials then
in their possession that contain any Marks of the other party, and shall
immediately cease any and all use of any Marks of the other party.
10. RELATIONSHIP OF THE PARTIES. The relationship between CellEase and
Reseller arising from this Agreement does not constitute a joint venture,
partnership, general agency, or employment relationship. Neither party shall
make any unauthorized representations or warranties concerning the products or
services of the other.
11. LIMITATIONS OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER,
DIRECTLY OR OTHERWISE, FOR INCIDENTAL, CONSEQUENTIAL (INCLUDING LOST PROFITS),
INDIRECT, PUNITIVE OR SPECIAL DAMAGES ARISING IN ANY WAY IN CONNECTION WITH
THIS AGREEMENT.
12. NOTICE. All notices to be provided hereunder shall be given in writing
and sent by certified mail, return receipt requested, or by overnight courier.
Notice shall be deemed given three (3) days after posting by certified mail, or
one (1) day after being sent by overnight courier. All notices shall be sent to
the recipient party's address set forth at the beginning of this Agreement,
provided that all notices to
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CellEase shall be marked: "Attention: Legal Department." Either party may
change its notice address by giving written notice of the change pursuant to
this Section.
13. ASSIGNMENT. This Agreement may not be assigned without the prior
written consent of the other party, such consent not to be unreasonably
withheld or delayed, except that either party may assign this Agreement to an
affiliate, provided that the assigning party shall remain jointly and severally
liable hereunder. This Agreement shall be valid and binding upon all heirs,
successors and permitted transferees or assigns of the parties hereto.
14. EXCUSE OF PERFORMANCE. Either party shall be relieved from liability
for non-performance due to any cause beyond its reasonable control, including
delays of suppliers or carriers. In such event, the affected party shall take
commercially reasonable steps to avoid or remove such cause of non-performance
and both parties shall recommence performance as soon as such cause is removed
or ceases, but in no event longer than 30 days following the first date of such
non-performance. The party claiming delay shall give the notice of such delay
as soon as reasonably practicable.
15. AUDIT RIGHTS; LIQUIDATED DAMAGES. Upon reasonable notice, and at its
own expense, each party shall have the right to audit the other's records
reasonably related to such other party's obligations hereunder, including,
without limitation, Reseller ACC, MIN, Redemption and billing data. In the event
that STC's audit reveals Reseller's technology platform was used to generate
Reseller ACCs other than those to be generated by STC pursuant to this
Agreement, then STC shall be entitled to liquidated damages equal to twice the
SRP value of all such Reseller ACCs. Such damages are mutually acknowledged to
be fair and reasonable.
16. ARBITRATION. Any dispute or disagreement arising between the parties
in connection with this Agreement which is not mutually satisfactorily resolved
within thirty (30) days from the date that either party gives notice of such
dispute and invokes this provision, shall be submitted for arbitration to
JAMS/ENDISPUTE, in Hartford, CT in accordance with the JAMS/ENDISPUTE
Arbitration Rules and Procedures, as amended hereby. The cost thereof,
including fees and expenses of the arbitrator(s), will be shared equally by the
parties unless the award otherwise provides. Each party shall bear the cost of
preparing and presenting its case. The arbitrator(s) shall have no power or
authority to make awards or issue orders of any kind except as expressly
permitted by this Agreement, and in no event shall the arbitrator(s) have
authority to award punitive damages. The decision of the arbitrator(s) shall
follow the plain meaning of the relevant documents, and shall be final and
binding upon the parties. The award may be confirmed and enforced in any court
of competent jurisdiction.
17. GENERAL.
(a) This Agreement shall be governed by Connecticut law, without
application of any principle of conflict-of-laws.
(b) This Agreement constitutes the entire understanding between the
parties relating to the subject matter hereof, superseding any and all prior
discussions, proposals or agreements, whether oral or written.
(c) No modification, addition or waiver to this Agreement shall be valid
unless in writing signed by the parties hereto.
(d) The waiver of any provision of this Agreement shall not be construed
as a continuing waiver of such breach or of other breaches of the same or of
other provisions hereof.
(e) Whether defined terms are stated in the singular or plural shall not
affect their construction as defined terms.
(f) All payment obligations, limitations of liability or other provisions
that by sense and context are intended to survive the termination of this
Agreement shall so remain in effect after the termination hereof.
(g) Each party represents that it has full power and authority to enter
into and perform this Agreement.
(h) The parties acknowledge to have read this Agreement in its entirety,
understand it and agree to be bound hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives as of the date first written above.
SHARED TECHNOLOGIES CELLULAR, INC. RESELLER: SATX, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Its: EVP Its: President and CEO
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Date: April 17, 2000 Date: 4-14, 2000
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