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NON EXCLUSIVE AGREEMENT

 

Exhibit 10.2

 

INTERNET-BASED SALES

NON-EXCLUSIVE

AUTHORIZED AGENCY AGREEMENT

BETWEEN

CINGULAR WIRELESS, LLC,

d/b/a CINGULAR WIRELESS

AND

INPHONIC, INC

 

Exhibits

Exhibit A - Area

Exhibit B - Authorized Cingular Services

Exhibit C - Compensation

Exhibit D - Omitted Intentionally

Exhibit E - Omitted Intentionally

Exhibit F - Nondiscrimination Compliance Agreement

Exhibit G - Omitted Intentionally

Exhibit H - Cingular Agent Operations Manual

Exhibit I - Cingular Equipment Return Policy

Exhibit J - Subagents

Exhibit K - Electronic Signature requirements for electronic commerce

 

THIS AUTHORIZED AGENCY AGREEMENT, effective August 1, 2003 (the “Agreement”) is between Cingular Wireless, LLC, doing business as Cingular Wireless (“Cingular”) and InPhonic, Inc., a Delaware Corporation (“Agent”).

 

RECITALS:

 

Whereas, Cingular is involved in the development, establishment and sale of Wireless Communications Service (“WCS”) which requires the use by WCS subscribers (“Subscribers”) of personal communications equipment (“Equipment”); and

 

Whereas, Cingular operates a WCS system in the geographic service area(s) defined in this Agreement, and desires to provide WCS in these areas to Subscribers through authorized agents, Resellers, distributors, retailers, direct sales and other channels of distribution; and

 

Whereas, Cingular has adopted and used or intends to adopt and use certain valuable trademarks and service marks, symbols, logos and other identifying indicia (“Marks”) in the provision of its WCS and Equipment; and

 

Whereas, Agent is desirous of selling Cingular’s WCS as an Authorized Agent of Cingular and is desirous of selling Equipment, and providing basic Equipment testing/troubleshooting service for Subscribers to utilize WCS; and

 

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Whereas, Cingular and Agent further agree that Agent shall sell or lease, and shall provide testing and troubleshooting services for Equipment, and shall be licensed to use certain Marks in its business operations, as more specifically detailed hereinafter.

 

Now, therefore, in consideration of the mutual promises herein contained, it is hereby agreed as follows:

 

1. Definitions

 

Activation ” or “ Activated ” - means the initiation of Cingular’s WCS in a Subscriber’s Equipment.

 

Affiliate ” - a Person is an affiliate of an entity that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Person.

 

Area ” - means the geographic area described on Exhibit A, in which Cingular markets WCS.

 

Authorized Cingular Services ” - means those services provided by Cingular that Agent is authorized hereunder to sell on behalf of Cingular, including WCS, and any other services set forth on Exhibit B, as amended in writing from time to time by the parties.

 

Churn ” - means a measurement of Subscriber turnover that takes into consideration the number of current subscribers activated by Agent, and the number of Subscribers Activated by Agent who have terminated WCS Service, or have had their WCS account terminated, cancelled or suspended by Cingular, including but not limited to, termination or suspension for failure to pay charges when due. The formula and time frames for calculating Churn may be revised from time to time.

 

Equipment ” - means the personal communications equipment needed for using WCS.

 

CMRS ” or “ Commercial Mobile Radio Services ” - means any and all services that: (A) fit the definition of commercial mobile services pursuant to Section 332 of the Communications Act, (47 U.S.C. § 332); (B) are subject to regulation as Commercial Mobile Radio Services by the FCC under the orders set forth in implementation of Sections 3(n) and 332 of the Communications Act; Regulatory Treatment of Mobile Services (cc Docket No. 930252) or such other orders or rules as may be in effect from time to time; or (C) are the functional equivalent of a commercial mobile service as defined in 47 U.S.C. § 332. CMRS shall in any event include all forms of specialized mobile radio service (SMR and ESMR), cellular service, personal communications services and one and two way communication services provided by a communication common carrier and commonly referred to as paging services.

 

CPNI ” or “ Customer Proprietary Network Information ” - means “customer proprietary network information” as that term is defined in Section 222 of the Telecommunications Act (47 U.S.C. § 222).

 

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Marks ” - means any and all trademarks, service marks, trade names, insignia, symbols, logos, or decorative designs, which Cingular owns, or is licensed or sublicensed to use, in connection with WCS or products relating thereto.

 

Paging Services ” - means paging services as defined in Section 22.99 of the Telecommunications Act (47 CFR § 22.99)

 

Person ” - means any person, association, partnership, co-partnership, corporation, joint stock company, trust, or other entity however organized.

 

Reseller ” - means any Person that purchases bulk quantities of CMRS from a CMRS carrier for resale distribution, directly or indirectly, to ultimate users of CMRS, which users become Reseller’s customers, and not the customers of the underlying CMRS carrier.

 

Subscriber ” - means any customer enrolled by Agent and whose WCS is Activated, provided that each WCS telephone number assigned to a customer of Cingular’s WCS is deemed to be a separate Subscriber, regardless of how many WCS telephone numbers may be assigned to or used by any one customer.

 

Subscriber List Information ” - means “subscriber list information” as defined in Section 222 of the Telecommunications Act (47 U.S.C. § 222).

 

Successor ” - means any Person that succeeds to or acquires the rights, title or interests of another.

 

WCS ” - means any and all the CMRS services provided by Cingular in the Area.

 

2. Acknowledgments and Representations

 

 

a)

Cingular and Agent acknowledge that they have read this Agreement and understand and accept the terms, conditions and covenants contained herein as being reasonable and necessary to maintain Cingular’s high standards for WCS and thereby protect and preserve the goodwill of Cingular’s WCS and its Marks.

 

 

b)

Agent acknowledges that Cingular’s ability to operate a WCS system is conditioned upon the continuing validity of a FCC license. Agent recognizes that Cingular’s ability to operate a WCS system may be affected by state and federal court decisions, state and federal regulatory approvals, and/or the maintenance of necessary contractual arrangements. Agent agrees that if Cingular is prohibited from, or otherwise ceases, selling WCS in the Area, Cingular may declare this Agreement, or any part herein, null and void with no penalty.

 

 

c)

Cingular expressly disclaims the making of, and Agent acknowledges that it has not received or relied upon, any representation as to the gross compensation or revenue that it may earn as a result of its agency relationship with Cingular and acknowledges that it has no knowledge of any representations relating to its agency relationship with Cingular by an officer, employee or agent of Cingular that are contrary to the terms herein. Agent has made material representations to Cingular in its application for appointment as an authorized Agent of Cingular and Cingular has relied upon such representations as a material inducement to enter into this Agreement with Agent.

 

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d)

Agent and Cingular mutually agree that they shall not have any liability to the other for any special, consequential, incidental, or indirect damages, or lost profits or revenues, even if advised of the possibility of such damages.

 

3. Relationships of the Parties

 

 

a)

Subject to all of the terms and conditions herein, Agent shall, within the Area, solicit and contract subscribers for Authorized Cingular Services.

 

 

b)

Agent acknowledges that this is a nonexclusive agreement with respect to Cingular and Cingular expressly reserves the right without obligation or liability to Agent, to market in the same Area served by Agent, Authorized Cingular Services, any other Cingular WCS and Equipment, and any other products and services offered by Cingular or its Affiliates, whether through Cingular’s own representatives or through others including, but not limited to, other authorized exclusive or nonexclusive agents, exclusive or nonexclusive dealers, as well as Resellers, distributors, and retailers. Cingular also reserves the right to alter, or subtract from the Authorized Cingular Services set forth in Exhibit B at any time and for any reason and shall provide as much prior notice as reasonably possible. Agent also acknowledges and understands that Cingular or its Affiliates may establish other retail or wholesale locations within the Area which offer products or services of Cingular (or its Affiliates) which may be in competition with Agent.

 

 

c)

Agent acknowledges and agrees that Agent has been engaged to sell WCS at the rates that Cingular publishes in its rate plan brochures as revised from time to time (the “Published Rates”). Agent does not have the authority to vary the Published Rates or any terms of WCS as determined by Cingular from time to time. Further, Agent does not have the authority under this agreement, unless specifically authorized in writing by Cingular, to Activate individual lines on behalf of anyone qualifying to receive the rates set out in a competitive bid by Cingular.

 

 

d)

In the Area, Agent shall operate in accordance with such standards as Cingular may from time to time prescribe for Internet-Based distribution. The current standards are attached hereto as Exhibit K. Agent acknowledges and agrees that this Agreement does not authorize Agent to make sales via telemarketing.

 

 

e)

Agent acknowledges and agrees that its sole relationship with Cingular with respect to the Area is as described herein, and that during the term of this Agreement it shall not have any other direct or indirect relationship with Cingular, including but not limited to, as a Reseller of Cingular’s WCS.

 

 

f)

Upon enrollment of a particular Subscriber, such Subscriber shall become a customer of Cingular, and Cingular shall offer and furnish such customer billing services as Cingular deems appropriate. Cingular shall be responsible for collection of any charges for WCS from Subscribers.

 

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g)

With the sole exception of selling Authorized Cingular Services to Subscribers enrolled by Agent for the account of Cingular with respect to which Agent acts as an agent of Cingular and owes Cingular the fiduciary and other obligations of an agent to its principal, Cingular and Agent acknowledge and agree that their agency relationship arising from this Agreement does not constitute or create a general agency, joint venture, partnership, employment relationship or franchise between them.

 

 

h)

Agent hereby represents that Agent is engaged in an independent business and will perform its obligations under this Agreement as an independent contractor and not as the employee or agent of Cingular (except as noted in the previous paragraph); that the Persons performing Services hereunder are not employees or agents of Cingular; that Agent has and hereby retains the right to exercise full control of and supervision over the performance of Agent’s obligations hereunder and full control over the employment, direction, compensation and discharge of all employees, contractors or agents of Agent assisting in the performance of such obligations; that Agent will be solely responsible for all matters relating to payment of such employees, contractors or agents, including compliance with workers’ compensation, unemployment, disability insurance, social security, withholding and all other federal, state and local laws, rules and regulations governing such matters; and that Agent will be responsible for Agent’s own acts and those of Agent’s employees, contractors and agents during the performance of Agent’s obligations under this Agreement.

 

 

i)

Agent acknowledges that compensation paid and other terms and conditions for adding Subscribers to Cingular’s services may vary among agents and other distributors of Cingular’s services in Cingular’s sole discretion.

 

4. Relationship with Sub-Agents

 

 

a)

Agent may enter into agreements with any Person (subject to the conditions stated herein) to sell Cingular’s Authorized Cingular Services on behalf of Agent (“Sub-Agent”). Agent shall provide Cingular with prior written request, including such information as Cingular shall require from time to time, of its desire to contract with a subagent. Agent shall not enter into any agreement with a Sub-Agent until Cingular has approved such Sub-Agent. Notwithstanding anything herein, Cingular shall have the right to disapprove at any time any previously approved Sub-Agent, and Agent shall immediately terminate its Sub-Agency relationship with such Sub-Agents. All approved Sub-Agents shall be listed in Exhibit J (Sub-Agents), as amended in writing from time to time by the parties. Agent shall have provisions in its agreement with all Sub-Agents allowing Agent to terminate its relationship with any Sub-Agent Cingular has notified Agent is disapproved. Upon request of Cingular, Agent shall provide a list of all Sub-Agents.

 

 

b)

Cingular shall have the right to require the immediate removal of any Sub-Agent whose acts or omissions would, if committed or omitted by Agent, constitute a breach of, or default under, this Agreement by Agent. In the event of any such Sub-Agent act or omission, Cingular shall have the additional right, notwithstanding anything to the contrary herein, to rescind Agent’s right to operate through such Sub-Agent.

 

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c)

Agent understands and agrees that Sub-Agents of Agent shall not be permitted to use Cingular Marks in any manner whatsoever. Any unauthorized use of Cingular Marks by a Sub-Agent shall be grounds for immediate termination of this Agreement, in addition to Cingular’s right to any other remedies under law or equity.

 

 

d)

Agent may not delegate its responsibilities under this Agreement to any Sub-Agent, and shall remain liable to Cingular pursuant to the terms of this Agreement for any act or omission of a Sub-Agent notwithstanding any agreement with a Sub-Agent. Agent shall indemnify, defend and hold Cingular harmless for the acts or omissions of any Sub-Agents or any breach of this Agreement by any Sub-Agents.

 

 

e)

Notwithstanding anything herein to the contrary, if Agent breaches any provision in this Section 4, Cingular’s remedies shall include, but not be limited to:

 

 

i)

rescinding Agent’s right to operate through Sub-Agents,

 

 

ii)

suspension of compensation due Agent for Subscribers activated through Sub-Agent;

 

 

iii)

immediate termination of this Agreement.

 

5. Agent Responsibilities

 

 

a)

Agent agrees to provide sufficient personnel, materials and advertising to actively promote Authorized Cingular Services in a quality manner, and to maintain appropriate Web Site to enhance the sale of Authorized Cingular Services.

 

 

b)

Agent will offer Authorized Cingular Services to Subscribers subject to all of the applicable terms and conditions of Cingular’s then most current form of contract for customers.

 

 

c)

Agent agrees to maintain sufficient workers compensation insurance and Commercial General Liability (“CGL”) insurance to protect Cingular and its Affiliates from all claims of liabilities arising out of or in connection with this Agreement or Agent’s performance under this Agreement, including but not limited to the acts, omissions, and/or representations of Agent and its officers, employees and representatives. Cingular and its Affiliates shall be named as “additional insureds” on each CGL policy, and each workers compensation insurance policy and/or CGL policy shall contain a waiver of subrogation clause. Such insurance coverage shall be maintained under one or more policies of insurance from a recognized insurance company qualified to do business within the Area providing minimum liability protection of one million dollars ($1,000,000) per occurrence for bodily and personal injury and death and one million dollars ($1,000,000) per occurrence of property damage. Each such insurance policy shall provide for not less than thirty (30) days prior notice to all insureds of any modifications, cancellation or non-renewal. Cingular may, at any time and with ninety (90) days prior notice to Agent, require Agent to increase its coverage of any type of insurance in reasonable amounts and to require different or additional kinds of insurance, to reasonably reflect inflation, identification of special risks, changes in law or standards of liability, higher damage awards or other reasonable changes in circumstances. Upon request by Cingular, Agent shall furnish proof satisfactory to Cingular that insurance coverage required hereunder is in force.

 

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NON EXCLUSIVE AGREEMENT

 

 

d)

Agent agrees to maintain operations and follow procedures that are in full compliance with Cingular’s requirements as specified in Cingular’s manuals and training guides as may be amended and distributed from time to time, and to allow Cingular reasonable access to Agent’s facilities for inspection. Agent shall collect from Subscribers as directed by Cingular, deposits securing the Subscriber’s payment for service. Agent shall have no claim to any such deposits collected. In the event that Agent fails to collect deposits from Subscribers as directed by Cingular, Cingular may offset such un-remitted deposits against any amount owed by Cingular to Agent. Cingular shall collect deposit amounts from Agent through deductions from commissions and other payments owed by Cingular to Agent. Notwithstanding that any deposit amount was collected from Agent through an offset, Agent shall have no claim against such deposit and it shall be refundable only to the Subscriber on whose behalf the deposit was, or should have been, collected. Agent agrees that it may be required to supply certain computer equipment necessary to interact with Cingular’s systems for the purpose of Activating Subscribers and for accessing Subscriber accounts for purposes of providing customer service. The Cingular Agent Operations Manual, as amended from time to time, is binding upon Agent as if fully set forth herein. The current version of the Cingular Agent Operations Manual is attached as Exhibit H.

 

 

e)

Agent agrees that if Cingular in its sole discretion should provide access to any of Cingular’s systems for purposes of Activating Subscribers, or accessing Subscribers accounts, that Agent shall only use such access for the purpose authorized explicitly in writing by Cingular. Should Cingular provide any equipment to be used for such purpose, Agent agrees that such equipment shall remain the property of Cingular. Should Cingular provide any software for use in connection with such equipment, Agent agrees that such software shall be subject to a separate license agreement.

 

 

f)

For its own account, Agent agrees to sell or lease Equipment to be used by Subscribers of Cingular’s WCS. Agent may only offer FCC approved equipment. Agent agrees to maintain an inventory of Equipment sufficient to meet reasonable anticipated demand by Subscribers, which Agent enrolls. In particular, but without limitation, Agent agrees not to use any Equipment bearing trademarks similar to or resembling the Marks of Cingular without the express written approval of Cingular. Except for any Cingular-owned Equipment which Agent handles on behalf of Cingular, all Equipment sales and leases shall be made by or on behalf of Agent for its own account and not as Agent for, or for the account of, Cingular. Agent may establish sale and lease prices, fees and charges for the Equipment and Cingular shall have no control over such prices or over Agent’s Equipment. Notwithstanding the foregoing, Agent shall comply with Cingular’s Equipment Return Policy, attached hereto as Exhibit I and as amended from time to time in Cingular’s discretion. With respect to the sale or lease of Agent’s Equipment, Subscribers shall be customers of Agent and Cingular shall have no responsibility to Agent or to Subscribers with respect to the sale or lease of Agent’s Equipment.

 

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NON EXCLUSIVE AGREEMENT

 

 

g)

Agent agrees that all Equipment sold by Agent for use with Cingular’s service shall conform to such standards of hardware and software as Cingular may prescribe from time to time. Agent acknowledges that such requirements may preclude Agent from selling Equipment that is approved by the FCC for use on Cingular’s service, may require certain types or Equipment for use with certain plans, or may require preloading software or data in the Equipment. By way of illustration, and not limitation, Cingular may require Agent to sell Equipment that is capable of operating on both Cingular’s TDMA and GSM systems (“GAIT Equipment”), and has been preloaded with the Intelligent Roamer Data Base specifying the systems on with the Equipment will operate when outside the geographic area in which it was activated; Cingular may prohibit the sale of TDMA Equipment in geographic areas in which Cingular operates both a GSM and TDMA wireless system; or Cingular may require the sale of Equipment that is capable of accessing Cingular’s GPRS system.

 

 

h)

Agent agrees to take all necessary steps to ensure compliance with Agent obligations under the Agreement by Agent and its personnel and any other parties involved in the sale of the Authorized Cingular Services by Agent.

 

 

i)

Agent agree that it will at all times, faithfully, honestly and diligently, perform its obligations hereunder, and that Agent will continuously exert its best efforts to promote and enhance the use of Cingular’s Authorized Cingular Services.

 

 

j)

Agent agrees that during and after the term of this Agreement, Agent will not reveal, divulge, make known, sell, exchange, give away, or transfer in any way any CPNI, or any other information regarding Cingular Subscribers obtained by it in connection with its relationship with Cingular to any Person other than Cingular except with the express written permission of Cingular or as required under Section 222 of the Telecommunications Act or other applicable law. Agent shall use CPNI and/or any other information regarding Cingular Subscribers obtained in connection with its relationship as Agent solely for the purposes of:

 

 

i)

marketing additional Authorized Cingular Services to Cingular Subscribers consistent with the terms of this Agreement,

 

 

ii)

Agent (but no Successor) maintaining periodic contact with Subscribers as required for warranty service, installation or maintenance of Equipment, and

 

 

iii)

the resolution of disputes between Agent (but no other corporate entity) and Subscribers relating to Equipment charges.

 

 

k)

Any use by Agent of CPNI is subject to the orders, rules and regulations promulgated by the FCC and if any use as outlined in this paragraph is determined to be in conflict with an FCC order, rule or regulation, Cingular may require such use to cease immediately.

 

 

l)

Agent agrees to advertise association with Cingular’s Authorized Cingular Services as an authorized Agent of Cingular, pursuant to any written procedures Cingular may publish from time to time.

 

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NON EXCLUSIVE AGREEMENT

 

 

m)

Agent agrees that it will not allow any other Person to use its agent code(s).

 

6. Cingular’s Responsibilities

 

 

a)

Subject to Cingular’s ability to provide WCS in connection with necessary licenses and regulatory approvals and the continuing validity of such necessary licenses and regulatory approvals, and subject to compliance with Cingular’s procedures and guidelines established from time to time, Cingular agrees to provide the Authorized Cingular Services to Subscribers solicited by Agent in accordance with this Agreement.

 

 

b)

Cingular shall establish the rates, terms and conditions of the sale of its Authorized Cingular Services to Subscribers, which rates, terms and conditions shall be subject to change upon notice by Cingular.

 

 

c)

Cingular shall establish the administrative procedures and guidelines for sale of Authorized Cingular Services, enrollment of Subscribers and customer service provided to Subscribers. Such procedures and guidelines may include a requirement that Agent provide certain equipment necessary to Activate Subscribers or to access Cingular’s systems so as to provide customer service to Subscribers.

 

 

d)

Cingular agrees to promote and advertise Authorized Cingular Services and provide promotional literature from time to time as Cingular deems necessary and appropriate.

 

 

e)

Cingular agrees to bill Subscribers for Authorized Cingular Service(s) charges and provide customer service and assistance with respect to collection of Authorized Cingular Service charges, and provide such other customer service and assistance deemed necessary or appropriate by Cingular.

 

7. CPE Bearing Cingular’s Marks

 

Agent shall be prohibited (unless Cingular agrees otherwise in writing) from selling Equipment which bears Cingular’s Marks to any Person other than a Subscriber to whom Agent has sold Authorized Cingular Service(s) hereunder. This clause is intended to protect Cingular’s Marks and to assure that such Marks are used properly.

 

8. Compensation

 

 

a)

Agent shall be compensated as provided on Exhibit C. Notwithstanding anything herein, or on Exhibit C to the contrary, Cingular may from time to time revise existing rate plans, or introduce special rate plans for which compensation shall be different than as set out on Exhibit C. Examples of special rate plans include, but are not limited to plans designed for business customers, data only plans, and FamilyTalk Plans. In order to be compensated for activating Subscribers on such revised or special rate plans, Agent must agree in writing to accept such different compensation. In the event Agent fails to agree to accept such different compensation, but nonetheless activates Subscribers on such revised or special plans, Agent shall be deemed to have accepted the different compensation and all terms and conditions applicable thereto. In the event Agent fails to agree to accept such different compensation but Subscribers switch to such revised or

 

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NON EXCLUSIVE AGREEMENT

 

 

special plans within the Vesting Period (as defined below) no compensation shall be payable. Commissions and other compensation payments shall only be earned as long as this Agreement is in effect, and the expiration or termination of this Agreement shall terminate Agent’s right to earn any further commission, compensation, fee, bonuses, or other such future payment that might otherwise be earned if this Agreement had not terminated or expired. Notwithstanding the foregoing in this Section 8.a), where the Subscriber satisfies the Vesting Period (as defined in Exhibit C) prior to the expiration or termination of this Agreement, the Activation Commission shall be paid to Agent by CINGULAR even though this Agreement has expired or been terminated. Activation Commissions in which the Subscriber fails to satisfy the Vesting Period either before or following this Agreement’s expiration or termination, shall be charged-back to Agent (or paid by Agent to CINGULAR in cash within 30 days of CINGULAR’s request for payment) even though this Agreement has expired or been terminated.

 

 

b)

An Activation Commission shall be earned and paid for each qualified Subscriber enrolled by Agent for Authorized Cingular Services during the term of this Agreement, subject to the conditions set forth herein. A Subscriber will be deemed enrolled only when i) the Subscriber has been accepted by Cingular, ii) the Subscriber’s WCS telephone number has been Activated in the Equipment, and iii) the Subscriber remains on the Service for the Vesting Period. An Activation Commission shall not be considered earned by Agent in the event a Subscriber does not remain continuously active on Cingular’s system during the Vesting Period regardless of whether the Activation Commission was previously paid by Cingular for that Subscriber.

 

 

c)

If any Subscriber’s Service is discontinued prior to satisfying the Vesting Period and Cingular has already paid Agent the Activation Commission, an equipment rebate, a cooperative advertising payment, a SPIFF, or any other payment made in connection with the activation of a Subscriber (“Activation Payments”), prior to such Service discontinuance, Cingular will be entitled to deduct (in the form of a charge-back) the Activation Payments previously paid, from any future payments due and owing to Agent. Agent understands that such discontinuance may arise from the Subscriber’s election to deactivate Service or, from Cingular’s deactivation of Service for that Subscriber. Any Cingular deactivation of Subscriber Service shall arise only for cause. Cingular’s deactivation of a Subscriber’s Service “for cause” may arise from, but not necessarily be limited to the following events: Subscriber credit problems, failure or delay in Subscriber payment for Service, Subscriber fraud or misuse of Equipment or Cingular’s WCS, or Subscriber’s breach of any of Cingular’s terms and conditions of Service. Agent acknowledges and agrees that Cingular may grant Subscribers fifteen (15) days, or such other period as Cingular may determine in its sole discretion, during which Subscribers may cancel agreements without incurring termination fees, including agreements obligating the Subscriber to purchase the Authorized Cingular Services for a period of months or years. Agent agrees that Agent shall not require Subscribers to enter into contractual relationships directly with Agent that create obligations for the Subscriber who terminates Authorized Cingular Services pursuant to Cingular policies or that are otherwise inconsistent with Cingular’s policies.

 

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NON EXCLUSIVE AGREEMENT

 

 

d)

Agent must provide Cingular with all Subscriber sales information, including all back-up documentation, the date of sale, description of the Equipment and a copy of the Subscriber’s service order completed by Agent which shall specify, among other pertinent information, the Subscriber’s WCS phone number. Agent shall maintain and, upon request, provide to Cingular full, accurate and complete back-up documentation covering each Subscriber. In the event that Cingular pays compensation prior to the receipt of such documentation, and such documentation is not subsequently provided within five (5) days of Cingular’s request, Cingular may deduct such previously paid compensation as a charge-back from future compensation due Agent.

 

 

e)

In the event that charge-backs made by Cingular exceed the amount to be paid Agent during the same month, Cingular may, at its option, deduct those charge-backs from moneys due Agent in subsequent months. In the event Cingular determines in its reasonably exercised discretion that Agent is likely to cease doing business, Cingular may withhold sufficient compensation to cover anticipated charge-backs after Agent ceases to do business. If this Agreement expires or is terminated, and there is not sufficient money due Agent to cover the amount of Cingular charge-backs, Agent shall be required to refund to Cingular the remaining balance of the charge-backs in cash within 30 days of written request.

 

 

f)

Upon reasonable advance notice, Agent and Cingular or their designated representatives shall each have access during normal business hours to all pertinent books and records of the other relating to the obligations of the parties under this Agreement, including but not limited to, records of Activations, deactivations, and Activation Commission accounts, for the purpose of verifying that all Activation Commissions have been properly earned, credited and paid.

 

 

g)

Agent agrees that if Cingular identifies a situation in which Agent’s activities violate this Agreement, Cingular may (i) withhold payment of compensation amounts applicable to the numbers under investigation during the investigation of activities and/or (ii) require Agent to cease all activities hereunder.

 

 

h)

In addition to any other limitations set forth herein, no Activation Commission, Co-op payment, rebate, or other compensation otherwise due shall be paid to Agent for any WCS or Equipment sold:

 

 

i)

directly by Cingular,

 

 

ii)

by another Cingular agent,

 

 

iii)

by any other Person including another authorized sales representative,

 

 

iv)

in a fraudulent, deceitful or misleading manner as determined by Cingular in its sole discretion exercised in good faith;

 

 

v)

to Cingular or its Affiliates or their respective employees; or,

 

 

vi)

to Resellers.

 

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NON EXCLUSIVE AGREEMENT

 

 

i)

Reserved. Cingular shall have the right to set off against any payment due Agent by Cingular hereunder, or under any other Agreement between Agent and Cingular or any Subsidiary of Cingular, for any amounts owed to it by Agent, equipment purchased from Cingular, customer account adjustments, amounts due for advertising, or amounts due for failure to attend scheduled training, seminars, or workshops if any. Not withstanding the forgoing, Cingular will not set off any payment due Agent by Cingular with any amounts owed by Agent to Cingular, unless Agent is past due in accordance with the terms for such amounts owed, and Cingular will provide Agent 5 business days notice in order that Agent may otherwise pay amounts owed and avoid the set off.

 

 

j)

Should Cingular, in its sole discretion, determine that Agent has inflated or otherwise manipulated its count of Subscribers by falsifying applications adding nonexistent Subscribers, adding Subscribers who do not use minimal amounts of airtime, or by any other means or methods, then Cingular shall, in addition to any other rights it may have under this Agreement, have the right to immediately terminate this Agreement and/or to collect from Agent, and Agent agrees to pay to Cingular, all payments made to Agent by Cingular for each such Subscriber and all amounts due for unpaid bills for service for each such Subscriber. Agent agrees that Cingular may deduct such amounts from compensation due Agent as a Charge Back. Provided, however, Cingular shall not require Agent to repay any compensation which was paid for such Subscriber after twelve (12) months from such Subscriber’s Activation date.

 

 

k)

Exhibit C may be revised as provided therein.

 

9. Equipment

 

 

a)

Agent may purchase Equipment from Cingular in accordance with the General Purchase Agreement entered into by InPhonic, Inc. (“PURCHASER”) and Cingular Wireless LLC (“SELLER”) effective July 1, 2001. Agent may sell Equipment to its customers at such prices as it determines in its sole discretion. Agent understands that in order to purchase Equipment from Cingular other than on a cash on delivery basis, Agent may be required to sign security agreements, financing statements and related documents.

 

10. Use of Marks by Agent

 

 

a)

Periodically, Cingular will publish a list of Marks that Agent is licensed to use under this Agreement. The right granted hereunder shall be the non-exclusive right of Agent to use the Marks solely in the Area. Such list will also be supplemented with rules and procedures prescribed by Cingular pertaining to the Marks. Agent agrees to comply with all such rules and procedures prescribed by Cingular from time to time during the term of this Agreement. Agent acknowledges that its right to use the Marks is derived solely from this Agreement and is limited to the identification of Agent as an agent of Cingular. Agent recognizes the great value of the goodwill associated with the Marks, and acknowledges that the Marks and all rights therein and goodwill pertaining thereto, belong exclusively to Cingular, and that the Marks also have a secondary meaning in the mind of the public. Agent acknowledges and agrees that all usage of the Marks by Agent and any goodwill established thereby shall inure to the exclusive benefit of Cingular and

 

12


NON EXCLUSIVE AGREEMENT

 

 

its Affiliates and that this Agreement does not confer any goodwill or other interests in the Marks upon Agent. Any unauthorized use of the Marks by Agent, or any use not in compliance herewith, shall constitute an infringement of the rights of Cingular and its Affiliates in and to the Marks and shall further constitute a material breach of this Agreement.

 

 

b)

Agent shall use the Marks with such words qualifying or identifying the agency relationship of Cingular and Agent as Cingular from time to time shall prescribe. Agent shall not use the Marks as part of any corporate or trade name or with any prefix, suffix or other modifying words, terms, designs or symbols, or in any modified form, nor may Agent use the Marks in connection with the sale or lease of any unauthorized product or service or in any other manner not expressly authorized by this Agreement or separately in writing by Cingular. If Agent uses Cingular’s Marks on any of Agent’s stationery, other forms or business cards, Agent agrees to display the Marks on such stationery, other forms, and business cards used in its WCS business in the manner prescribed by Cingular. Agent agrees to obtain such fictitious or assumed name certificates or registrations as may be required by applicable law, provided the fictitious or assumed name is approved in writing by Cingular and Cingular is provided a copy of the certificate and/or registration. If any fictitious or assumed name used by Agent includes anything that identifies Cingular or its Marks, Cingular may at any time require Agent to cease using such fictitious or assumed name, and to cancel any corresponding certificate and/or registration.

 

 

c)

If it becomes advisable at any time in Cingular’s sole discretion for Agent to modify or discontinue use of any Mark or substitute one or more additional trade or service marks to identify its relationship with Cingular or, if applicable, any Equipment, Agent agrees to comply therewith within a reasonable time after written notice thereof by Cingular and the sole obligation of Cingular in any such event shall be to reimburse Agent for the out-of-pocket costs, if any, of complying with this obligation. In addition, Agent shall replace obsolete identification signs or identification material with new signs or identification material should Agent adopt new Marks replacing one or more Marks identified by Cingular in such list as hereinbefore specified.

 

 

d)

Upon reasonable notice from Cingular, Agent shall provide Cingular with samples of all advertising and other literature, packages, labels, and labeling prepared by Agent which use the Marks or the logos. When using the Marks or the logos under this Agreement, Agent undertakes to comply with all laws pertaining to trademarks or service marks in force at any time in the Area.

 

11. Cingular’s Title and Protection of Cingular’s Rights

 

 

a)

Agent agrees that it will not challenge the title or any rights of Cingular in and to the Marks either dining the term of this Agreement or thereafter.

 

 

b)

Agent agrees to assist Cingular, and Cingular agrees to reimburse Agent for all associated reasonable and necessary actual costs incurred by Agent in connection therewith, to protect any of Cingular rights to the Marks. Cingular, if it so desires, may commence or

 

13


NON EXCLUSIVE AGREEMENT

 

 

prosecute any claims or suits in its own name or in the name of Agent or join Agent as a party thereto for such purposes. When known, Agent shall notify Cingular in writing of any infringements or imitations by others of the Marks which are the same as or similar to those covered by this Agreement. Cingular shall have the sole right to determine whether any action shall be taken on account of any such infringements or imitations. Agent shall not institute any suit or take any action on account of any such infringements or imitations without first obtaining the written consent of Cingular.

 

12. Compliance With Laws And Good Business Practices

 

 

a)

Agent shall secure and maintain in force all licenses and permits required by Agent and its employees in the enrollment of Subscribers and the sale or lease of Equipment, installation and maintenance of Equipment, including without limitation, all required FCC or other permits and certifications, if required, and business and sales tax licenses, and shall conduct its business in full compliance with all state and federal laws, ordinances and regulations applicable to Agent’s business. Agent shall sell Authorized Cingular Services in accordance with applicable rules, regulations, statutes and decisions governing such Services.

 

 

b)

Agent shall promptly pay when due, all taxes and assessments against any real or personal property used in connection with Agent’s business, and all liens or encumbrances of every kind or character created or placed upon or against any such property, and all accounts and other indebtedness of every kind incurred by Agent in the conduct of its business.

 

 

c)

Agent shall comply, at its own expense, with the provisions of all applicable municipal requirements and those state and federal laws and executive orders applicable to Agent as an employer.

 

 

d)

Agent expressly agrees not to discriminate against any Subscriber, employee or applicant for service because of race, color, religion, age, sex, national origin or physical handicap during the performance of this Agreement and shall comply with the applicable provisions of Exhibit F (Nondiscrimination Compliance Agreement) incorporated herein and made a part of this Agreement. As used in Exhibit F, “Contractor” shall refer to Agent. Agent agrees to submit to Cingular, on Cingular request, a statement that it is in compliance with this Section.

 

13. Advertising and Business Practices of Agent

 

 

a)

All advertising and promotion by Agent shall (i) be completely factual, (ii) conform to the highest standards of advertising and conform completely with applicable laws. All advertising and marketing materials which Agent desires to use in connection with the Authorized Cingular Services must be submitted to Cingular for written approval prior to their use, whether or not prepared or previously approved by Cingular.

 

 

b)

Agent agrees that it will not commence any advertising or promotion pursuant to this Agreement without Cingular’s prior written consent.

 

14


NON EXCLUSIVE AGREEMENT

 

 

c)

Agent shall notify Cingular in writing within five (5) days of t


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