EXHIBIT 10.13
AGREEMENT FOR PROMOTION OF PAGERS
BETWEEN NTC and PAGE PROMPT
AGREEMENT FOR PROMOTION OF PAGERS
BETWEEN
NTC AND PAGEPROMPT
This Agreement For The Promotion Of Pagers ("Agreement") is entered into
between National Telephone & Communications, Inc., a Nevada corporation
located at 2801 Main Street, Irvine, California 92714 ("NTC") and PagePrompt
USA, Inc., a California corporation located at 16810 Valley View, La Mirada,
California 90638 ("PGPT") and is entered into by the parties with reference
to the following facts.
A. In December 1994, NTC entered into an agreement with a pager company other
than PGPT ("Other Pager Company") for a joint pager promotion program
("Old Program") similar to the program desired by the parties under this
Agreement ("New Program").
B. Because the Other Pager Company was relatively small, NTC was concerned
the Other Pager Company would not be able to adequately handle the number of
pager customers NTC would produce under the Old Program ("Performance
Concerns").
C. NTC believes its Performance Concerns with the Other Pager Company were
warranted since the Other Pager Company's performance under the Old
Program resulted in hundreds of complaint calls to NTC requiring NTC to
take expeditious and costly corrective actions including but not limited
to (i) purchasing pagers at its own expense to fulfil the obligations
of the Other Pager Company, (ii) delivering the pagers to these NTC
customers at NTC's expense, (iii) issuing apologies to the NTC customers,
and (iv) securing another pager company to provide paging service to the
NTC customers ("Corrective Actions").
D. At the end of May 1995, NTC and PGPT entered into a joint promotional
pager program similar to the New Program on a test basis ("Test Program")
under an informal agreement ("Hand-Shake Agreement") negotiated between the
parties by Christopher Mancuso, a consultant to NTC.
E. NTC is satisfied with the performance of PGPT in the Test Program to
date, however NTC still has concerns about PGPT's performance abilities,
similar to the Performance Concerns, because PGPT is also a relatively
small pager company; therefore, NTC is only willing to enter into a formal
agreement for the New Program on condition that PGPT provide NTC with
certain up-front financial payments based solely on NTC'S performance
under the Test Program through June 1995 ("Up-Front Payment").
F. PGPT is satisfied with the performance of NTC in the Test Program and is
willing to satisfy NTC's Up-Front Payment condition; however, NTC has
advised PGPT that NTC intends to enter into the pager business as a reseller
in the future, and PGPT is only willing to provide such Up-Front Payment on
condition that NTC warrants to PGPT that NTC will not take any action in the
future to recapture the pager customer NTC produces for PGPT under the Test
Program and this Agreement.
NOW THEREFORE, for fair and reasonable consideration, the parties agree to
the following.
1. THE AGREEMENT.
NTC agrees to make a good faith effort to produce, but does not guarantee
to produce, a minimum of fifty thousand (50,000) orders for pagers from new
customers for PGPT ("NTC/PGPT Customers") during the six (6) to twelve (12)
month period immediately following the execution of this Agreement, subject
to the termination conditions set forth below in Paragraph 8. PGPT agrees to
reasonably provide such NTC/PGPT Customers with (i) pagers, in accordance
with the program set forth below in Paragraph 3, and (ii) satisfactory pager
services such that NTC shall not receive an unreasonable number of complaints
about PGPT from the NTC/PGPT Customers and shall not have to take any actions
on behalf of the NTC/PGPT Customers similar to the Corrective Actions.
2. NTC'S PROGRAM TO DEVELOP NTC/PGPT CUSTOMERS.
Any and all promotional programs used by NTC to produce the NTC/PGPT
Customers shall be at NTC's sole discretion and cost, however, the parties
agree that said promotional programs must be approved by PGPT. Such NTC
programs shall include but shall not necessarily be limited to NTC's gift
certificate program used by NTC's Independent Sales Representatives in the
Test Program.
3. PGPT'S PROMOTIONAL PAGER PROGRAM FOR THE NTC/PGPT CUSTOMERS.
PGPT agrees that the initial promotional program for the NTC/PGPT
Customers shall consist of one (1) new numeric pager, of a type acceptable to
NTC, to by shipped to each new NTC/PGPT Customer within five (5) business
days after such new NTC/PGPT Customer arranges to pay PGPT sixty three
dollars and eighty five cents ($63.85) ("Start-Up Fees") through a credit
card payment, check payment, cash payment or COD payment ("Pager Payment").
In the event the pager is sent to the NTC/PGPT Customer subject to a COD
payment, then an additional five dollar ($5.00) fee shall be added to the
Start-Up Fees. The pager itself shall be given to the NTC/PGPT Customer at no
charge to either the NTC/PGPT Customer or NTC. However, NTC and PGPT agree the
Start-Up Fees shall be charged to the NTC/PGPT Customers to cover the
following PGPT costs and charges:
-- A fee of thirty nine dollars ($39.00) to cover PGPT's costs of
programing and activation of the pager.
-- A fee of nineteen dollars and ninety cents ($19.90) to cover two
months of PGPT'S charges for pager air time at nine dollars and
ninety five cents ($9.95) per month.
-- A fee of four dollars and ninety five cents ($4.95) to cover PGPT's
shipping and handling costs for the pager.
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Both parties agree that the above promotional program shall remain in effect
for the NTC/PGPT Customers through September 30, 1995, at which time the
parties agree to negotiate in good faith to define a new promotional program,
if necessary.
4. NTC COMPENSATION.
For each new NTC/PGPT Customer over-and-above the first ten thousand
(10,000) such new NTC/PGPT Customers ("10,000+ Customers"), PGPT shall pay to
NTC the following compensation:
-- Twenty five dollars ($25.00) in cash ("Cash Compensation).
-- Thirty dollars ($30.00) in PGPT unregistered common stock ("Stock
Compensation").
Both parties agree the said first ten thousand (10,000) new NTC/PGPT
Customers ("First 10,000 Customers") shall be those first ten thousand (10,000)
new NTC/PGPT Customers who received pagers from PGPT and paid PGPT the Pager
Payment and shall include new NTC/PGPT Customers produced by the NTC during
the Test Program as well as under this Agreement, as may be required to reach
ten thousand (10,000).
Both parties agree that ten dollars ($10.00) of the Cash Compensation
shall be earned by NTC and shall be due to NTC at the time the pager payment
is received by PGPT from a 10,000+ customer The Parties agree that the
remaining fifteen dollars ($15.00) of the Cash Compensation whall be earned
by NTC and shall be due to NTC when and if PGPT receives payment from the a
10,000+ Customer for PGPT'S first air time bill.
Both parties agree to negotiate in good faith to determine the reasonable
timing for payment of the two (2) Cash Compensation payments to NTC once such
payments are earned by NTC.
Both parties agree that the Stock Compensation shall be earned by NTC and
due to NTC on the last calendar day of each calendar quarter. The parties
agree that THE NUMBER OF 10,000+ Customers for which NTC shall be paid the
stock compensation shall be the number of "PGPT Paying Customers" who are
NTC/PGPT Customers ("NTC/PGPT Paying Customers") at the end of each calendar
quarter less the number of NTC/PGPT Paying Customers at the end of the
previous calendar quarter ("Stock Compensation Calculation"). The First 10,000
Customers shall not be included in the Stock Compensation Calculation. The
parties agree to negotiate in good faith to determine a mutually acceptable
definition of "PGPT paying customer". The parties further agree that the
Stock Compensation Payment may be paid to NTC, at PGPT'S sole discretion as
thirty dollars ($30.00) cash rather than as thirty dollars ($30.00) of PGPT
unregistered common stock.
The parties also agree: (i) that the price per share of PGPT common stock
to be used in determining the number of shares in the thirty dollars ($30.00)
of Stock Compensation shall be the average bid price of the stock during the
calendar quarter for which the Stock Compensation is earned; (ii) to
negotiate in good faith to determine the reasonable timing for payment of any
earned stock
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Compensation to NTC; and (iii) that all PGPT unregistered common stock shares
NTC receives as Stock Compensation shall have customary piggyback rights with
any future PGPT stock registration.
5. UP-FRONT PAYMENTS TO NTC.
PGPT agrees that NTC has earned from PGPT and PGPT shall pay to NTC a
cash payment of ($250,000) and a stock payment equal to three hundred
thousand dollars ($300,000) of unregistered PGPT common stock ("Already Earned
Compensation" for all of NTC's efforts during the test program up to June 30,
1995, and for all NTC/PGPT Customers produced by NTC for PGPT up to June 30,
1995. The parties agree that the value of the unregistered pgpt common stock to
be used for determining the number of shares required for the stock payment
shall be the average bid price for the PGPT'S common stock during the last
10 (10) business days of June 1995, and that such shares shall have customary
piggyback rights with any future PGPT stock registration. Both parties agree to
negotiate in good faith to define reasonable timing for PGPT's payment of the
Already Earned Compensation to NTC.
6. STOCK OPTION GUARANTEE FOR NTC.
At the time of the Hand-Shake Agreement, PGPT agreed to grant NTC and
hereby does GRANT NTC AN OPTION TO PURCHASE ONE HUNDRED THOUSAND (100,000)
SHARES OF PGPT UNREGISTERED COMMON STOCK AT A PURCHASE PRICE OF TWO DOLLARS
AND TWENTY FIVE CENTS ($2.25) PER SHARE ("The Option"). The Option shall
become exercisable by NTC at the time either (i) five thousand (5,000) net
NTC/PGPT Customers have paid their first pager air time bill and are still
using PGPT's service, or (ii) PGPT has delivered pagers to the First 10,000
Customers, whichever first occurs. The Option shall expire on June 30, 1998,
and PGPT agrees The Option shares shall have customary piggyback rights with
any future PGPT stock registration.
7. NTC WARRANT ON NTC/PGPT CUSTOMERS.
NTC warrants to PGPT that NTC will not take any action in the future to
recapture NTC/PGPT Customers produced for PGPT by NTC under this agreement
and/or under the Test Program for (i) any pager service which NTC may develop
for itself or (ii) any other pager company with which NTC may enter into an
agreement in the future.
8. TERM OF AGREEMENT.
THIS AGREEMENT SHALL AUTOMATICALLY TERMINATE ON JUNE 30, 1996 ("Automatic
Termination Date"). The parties agree this Agreement may be terminated by
either party prior to the Automatic Termination Date upon delivery of a
written termination notice ("Termination Notice") to the other party. In the
event one of the parties delivers such Termination Notice to the other party,
then this Agreement shall terminate on the thirtieth (30th) calendar day
following delivery of such Termination Notice ("Early Termination Date"),
unless such Early Termination Date is after June 30, 1996.
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The parties agree to negotiate in good faith to determine the specific
obligations and liabilities of each party following the termination of this
Agreement including but not necessarily limited to the
liabilities/obligations for NTC/PGPT Customers received by PGPT after
termination of this Agreement but resulting from the efforts and promotional
programs of NTC prior to the termination.
9. DISPUTES AND VENUE.
In the event of any dispute, controversy or claim ("Disputed Matter")
between the parties to this Agreement or the breach thereof, the parties
agree to submit and are obligated to submit the Disputed Matter to binding
arbitration in accordance with the Rules of the American Arbitration
Association. The parties further agree that such arbitration shall be held in
the County of Orange in the State of California. By execution of this
Agreement, the parties irrevocably and unconditionally submit to the
jurisdiction of said arbitration in any such Disputed Matter.
10. APPLICABLE LAW.
This Agreement shall be construed, governed and enforced in accordance
with the laws of the State of California.
11. ATTORNEY FEES.
In the event of any Disputed Matter between the parties hereto in
connection with this Agreement, the prevailing party shall be entitled to
receive from the losing party all of its cost and expenses including but not
limited to court costs and reasonable attorney's fees.
12. AMENDMENTS.
No amendment, modification, waiver, discharge or change ("Amendment") to
this Agreement shall be valid unless such Amendment is in writing and signed
by all the parties hereto.
13. ADDITIONAL DOCUMENTS.
Each of the parties hereto specifically agrees to execute such other and
further instruments and documents as may be reasonably be required to
effectuate the terms, conditions and objectives of this Agreement.
14. SEVERABILITY AND COMPLIANCE.
If any term, condition or provision of this Agreement is found to be
invalid, contrary to law or otherwise unenforceable ("Invalid Provision"),
such finding shall in no way affect the validity or enforceability of the
terms, conditions and provisions herein. Such other terms, conditions and
provisions shall be valid and enforceable as if the Invalid Provision was
never a part hereof. Each party hereto shall be excused without further
liability from the performance of any duty, obligation or responsibility
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hereunder to the extent it is prevented from such performance by applicable
laws, rules or regulations or by the order or decision of any regulatory
authority.
15. WAIVER OF BREACH.
The waiver of one party of a breach of any term, condition or provision
of this Agreement by the other party shall not operate or be construed as a
waiver of any subsequent breach of any type whether of similar or dissimilar
nature.
16. NOTICES.
Any and all notices, demands or other communications ("Notice") given
hereunder shall be delivered to the party to whom such Notice is addressed by
delivery in person or by delivery through United States registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to NTC: 2801 Main Street
Irvine, California 92714
Attn: President
If to PGPT: PagePrompt USA
16810 Valley View
La Mirada, California 90638
Attn: Vice President
If delivery is by United States mail, notice shall be deemed to have been
given three (3) working days after being placed in such mail, as evidenced by
a mailing receipt. Either party may change its address for the purpose of
this Agreement by giving the other party written notice of its new address.
17. ASSIGNMENTS.
This Agreement and the rights and obligations granted or agreed to
hereunder may not be assigned by either party by sale of business,
operation of law or otherwise without first obtaining the written consent
of the other party which both parties agree will not be unreasonably
withheld.
18. VALID ENTITY.
Each party to this Agreement which is a legal entity such as a
partnership, corporation or trust or the like represents that it is a
validly formed and existing entity, that it has the authority to enter into
this Agreement and that all acts necessary to make this Agreement valid and
binding have been done. The person or persons executing this Agreement on
behalf of such entity represents that they have the right and authority to
do so.
19. CONSTRUCTION.
Any rule of law to the contrary notwithstanding, this Agreement shall be
construed as if drafted by both parties
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regardless of which party or which party's legal counsel either actually
drafted this Agreement or printed or physically memorialized this Agreement
between the parties.
20. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, and each such
counterpart shall be deemed an original; but all of such counterparts taken
together shall constitute one and the same agreement.
21. USE OF PLURAL OR SINGULAR.
The use of the singular or plural number in any term, condition or
provision of this Agreement shall be deemed to include the other whenever the
context so requires.
22. ENTIRE AGREEMENT.
This Agreement sets forth and constitutes the entire agreement between the
parties with respect to the subject matter herein and supersedes all previous
agreements, promises and representations, either oral or in writing, between
the parties hereto with respect to the transactions covered hereby, and
contains all the covenants and agreements between the parties. Each party to
this Agreement acknowledges that no representations, inducements, promises or
agreements, orally or otherwise, have been made by any party to this
Agreement, or anyone acting on behalf of any party to this Agreement, which
are not embroiled herein.
23. BENEFITS.
The terms, conditions and provisions of this Agreement shall inure to the
benefit of and be binding on the parties hereto and all their respective
successors including but not limited to permitted assigns, executors,
administrators, heirs and representatives; and no other person or entity
shall have any rights whatsoever under this Agreement.
Agreed to effective on the 30th day of June, 1995 in the County of Orange,
State of California.
NTC: PGPT:
National Telephone & Page Prompt USA, Inc.
Communications, Inc.
By: By:
/s/ E. R. JACOBS /s/ for
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E.R. Jacobs Hal Linden
President Vice President
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