DESIGN, DISTRIBUTION AND MARKETING AGREEMENTDesign Contract |
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Exhibit 10.5
This Agreement (“Agreement”), effective as of the date executed by the last to sign of the parties (“Effective Date”), between SunRocket, Inc. (“Service Provider” hereinafter referred to as “SP”), a Delaware corporation, located at 8615 Westwood Center Drive, Vienna, Virginia 22182, and American Telecom Services, Inc., a Delaware corporation (“ATS”) located at 2466 Peck Road, City of Industry, CA 90601 memorializes the obligations of the parties in connection with VoIP hardware (“Telephones” and/or “Telephone”) provided by ATS, associated with the ATS System (“ATS System”) as described in Appendix A and future versions of the Telephone to be continuously reviewed and approved by the Parties from time to time. Such approval may not be unreasonably withheld or delayed. SP provides Internet Phone services to consumers, including communications and customer services (“Services”) to support customer accounts (“Account” or “Accounts”). The Telephones shall be preconfigured to support an SP Service Account. The Telephones shall be distributed to retail outlets and subsequent resale to consumers (“End Users”) throughout the United States.
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1. |
ATS Obligations. |
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a. |
Upon execution of this Agreement, ATS will use commercially reasonable efforts to configure its Telephones to work with the SP Services. ATS will use commercially reasonable efforts to provide engineering and technical configuration support to SP as necessary to ensure its Telephones can support SP service features and quality standards. ATS will also ensure that the appropriate SP mark or marks (as determined by SP) are placed on each of the Telephones and any supporting equipment when inventory considerations and design specifications permit, at ATS’s sole discretion. |
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b. |
ATS further agrees to design the packaging and packaging inserts for the Telephones. ATS will ensure that the appropriate SP mark or marks (as determined by SP) will be placed on all packaging and packaging inserts. SunRocket, with ATS cooperation and guidance, will provide all information and design for service offering inserts and information pertaining to the service offering for the packaging. ATS acknowledges that any retail packaging or materials shall include any information necessary to comply with FCC and FTC regulations as mutually agreed upon by the parties and provided for by SP. |
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c. |
ATS will provide SP with all documentation and training materials associated with its Telephones so that SP can provide first level customer support. ATS further agrees to provide second level support and troubleshooting assistance for SP technical support. The account servicing obligations of each party, including the hours during which each party must provide such support, are described in Appendix E. |
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d. |
ATS shall specify, via email from time to time, to SP (the “Account Order”) the aggregate number of initial “Activation Codes” to be provisioned by SP to be included on the packaging inserts. The Activation Codes will be the unique identifier entered into the SP database prior to activation and will be used by ATS to associate the hardware unique identifier and the retailer as well as the rate plans to be made available to ATS End Users by SP as set forth in Appendix B. Once the request is made, SP will make commercially reasonable efforts to provide the Activation Codes within ten (10) business days following the request. ATS will match the Activation Codes with a unique identifier to be designated to each individual Telephone “MAC Address” that will be returned to SP in a mutually agreed-upon file format. SP will make commercially reasonable efforts to match and activate each Activation Code to the corresponding MAC Address within twenty-one (21) business days of the receipt of the MAC addresses. |
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e. |
ATS will use commercially reasonable efforts to resolve all End User disputes regarding Telephones within a commercially reasonable amount of time. |
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2. |
SP Obligations. |
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a. |
During the term and subject to the terms and conditions contained herein, SP agrees to provide Telephone users with Services. |
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b. |
SP will use commercially reasonable efforts to resolve all End User disputes regarding Services within a commercially reasonable amount of time. |
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c. |
Subject to FCC and FTC requirements, SP agrees to provide ATS with End User information as described in Appendix D, section 3. |
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d. |
SP at its sole discretion may offer non-ATS hardware to End Users provided that (i) ATS does not make similar functioning hardware available to SP within [Subject to a request for confidential treatment; Separately filed with the Commission] of availability date of the similar functioning non-ATS hardware, or (ii) it is not within [Subject to a request for confidential treatment; Separately filed with the Commission] of the Account activation and ATS has not provided such hardware to SP as prescribed in section (d) (i). SP agrees to notify ATS in writing and in a timely manner if SP is pursuing or considering to pursue new End User hardware which may be made available to End Users to support current or future Services. |
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e. |
SP may offer additional telecom services or Services to ATS generated End Users provided that the applicable Commission as set forth in Section |
American Telecom Services, Inc.
Private and Confidential
Page 2 of 37
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9 below shall apply to any revenues associated with such a sale, during the period in which such a Commission would apply pursuant to the terms herein, in the event that it markets additional telecom services or Services to such End Users without the expressed written consent of ATS. Services may include, but will not be limited to those set forth in Appendix F, but SP shall make commercially reasonable efforts to make those services available to ATS at the same time to market to new End Users through its approved channels. |
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Reports. SP shall provide to ATS the reports described in Appendix D, section 3 at the frequencies provided therein. In addition, from time to time, ATS may identify additional reports to be generated by SP and delivered to ATS on an ad hoc or periodic basis. |
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4. |
Deactivation. SP reserves the right to terminate Services to any Account if it determines, in its sole discretion, that End-Users of such Accounts are actually or allegedly engaged in activities that are illegal, fraudulent or wrongful or which may be harmful to SP in any way. ATS shall receive a monthly report of all such deactivated Accounts and SP shall make commercially reasonable efforts to provide reasons for such deactivations. SP may also terminate End Users for non-payment or if they are violating the terms of SP’s “Terms of Service” as set forth on the SunRocket.com website and as may change from time to time as set forth in Appendix I herein. |
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Marketing and Distribution. ATS will use its commercially reasonable efforts to promote, market and distribute the Services in conjunction with the ATS System under this Agreement. ATS shall have discretion to decide the methods and channels used to market, promote and distribute the Services through those retailers set forth in Appendix G although ATS may distribute the Services in conjunction with ATS Telephones through retailers not set forth in Appendix G, subject to SP written approval that may not be unreasonably withheld or delayed. Nothing herein shall limit ATS’ right to promote, market and distribute other Telephones that are not bundled with the Services provided by SP, nor SP’s right to promote and distribute other hardware or Services not bundled with the ATS System, subject to any exclusivity provisions contained in Section 12 below except as provided in Section 2(d). ATS shall be solely responsible for the development of all promotional and marketing materials, inserts and advertising materials (“Materials”) except as set forth in section 1 (b) above. Without limiting the foregoing, ATS may not produce or utilize any marketing materials, promotional initiatives or advertisements for the Service unless approved by SP in writing in advance, and such approval or rejection must take place in a timely manner and approval may not be unreasonably withheld or delayed. Should SP require certain disclosures required by Regulatory Authorities to be included with the Telephones in the packaging, SP agrees to provide ATS with such information in a timeframe sufficient to permit ATS to include the disclosures with the Telephones. |
American Telecom Services, Inc.
Private and Confidential
Page 3 of 37
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PAYMENT METHODS FOR SUBSCRIBERS. SP agrees to accept payment via credit card and debit card. More payment methodologies such as ACH and Pay Pal may be added in the future, but may require an additional fee, paid by the End User, for the use of Services. |
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MARKETING CO-OP PAYMENTS. SP agrees to pay [Subject to a request for confidential treatment; Separately filed with the Commission] for each activated Account to ATS as a “Marketing Co-op Payment.” Such payments will be allocated by ATS for the promotion and marketing of Services at ATS’ sole discretion. On a regular and timely basis, ATS will provide SP in advance with a summary plan for spending allocations and purposes, plus regular performance reports when specified. SP shall have the right to approve or reject all marketing or promotional materials that include the SP Marks as defined in Section 18 below, such approval must be made within 48 hours of acknowledged receipt of the materials and may not be unreasonably delayed or withheld. At ATS’ sole discretion, ATS may allocate up to [Subject to a request for confidential treatment; Separately filed with the Commission] of the Agent Fees as set forth in section 10 below as an additional Marketing Co-op Payment. ATS and SP agree to establish a joint interest bearing operating bank account where these funds will be maintained, from which ATS may disburse funds and SP may audit such disbursements. |
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KEY CITY FUNDS. ATS may designate up to [Subject to a request for confidential treatment; Separately filed with the Commission] retailers (“Strategic Accounts”) from Appendix G, for which “Key City Funds” and special Agent Fees (as defined in Section 10 and Appendix B) would apply. Upon acceptable notification of the shipment of Telephones and related equipment to and their arrival at a Strategic Account, SP and ATS agree to each commit two-hundred and fifty thousand dollars ($250,000) to service the initial Strategic Accounts as “Key City Funds” to be allocated by ATS, at its sole discretion, for marketing purposes designated for Strategic Accounts. For each of the Strategic Accounts, the Parties agree to each allocate an additional two-hundred and fifty thousand dollars ($250,000) (“Additional Key City Funds”) within thirty (30) days following the activation of the [Subject to a request for confidential treatment; Separately filed with the Commission] Account sold through that Strategic Account. Key City Funds will be contributed into the joint bank account referenced in Section 7, from which ATS may disburse funds and SP may audit such disbursements. |
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SERVICE COMMISSIONS. SP shall be responsible for maintaining all billing, collection and transaction records with respect to the End User’s use of the Service. For the first $30 in monthly Net Revenue per End User, SP agrees to pay ATS twenty-five percent (25%) of the Net Revenues for any Account activated in the first year following the Effective Date and twenty-two percent (22%) for all Accounts created thereafter (“Commission”). For monthly Net Revenue per End |
American Telecom Services, Inc.
Private and Confidential
Page 4 of 37
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User exceeding $30, SP agrees to pay ATS fifteen percent (15%) of the Net Revenue in excess of $30. The term “Net Revenues” means gross revenues less any service credits and taxes and regulatory mandated fees incurred by SP. All payments to ATS shall be made via wire transfer on the 25th day of each month for the prior month’s activity, provided that no such payment shall be made for a sum less than $10,000, in which case the amount shall be accrued in an account earmarked for ATS and paid with the next payment due to ATS. Each payment shall be accompanied by a detailed report that includes a month-to-date activity summary for the covered period, listed by Account as formatted in Appendix D. |
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AGENT FEES. SP agrees to pay ATS an Agent Fee (“Agent Fee”) for each activated Account according to the table as set forth in Appendix B. All payments to ATS shall be made to ATS via wire transfer on the 25th day of each month for the prior month’s activity, provided that no such payment shall be made for a sum less than $10,000, in which case the amount shall be accrued in an account earmarked for ATS and paid with the next payment due to ATS. ATS agrees that the Agent Fee will be refunded for End Users who cancel their Service within thirty-one (31) days following activation. Any such returned Agent Fee will be offset from payments due in the next payment period. Each payment shall be accompanied by a detailed report that includes a month-to-date activity summary for the covered period, listed by Account. |
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RATES AND SERVICE PLANS. SP agrees to make at least [Subject to a request for confidential treatment; Separately filed with the Commission] Service plans available to End Users as set forth in Appendix C. The parties may agree to offer End Users additional Service plans from time to time and will reach an agreed upon Agent Fee prior to the introduction of that plan that provides ATS with an Agent Fee, Marketing Coop Payment, Commission and Rebate that is no less than that which is set forth for the lowest Service plan herein. |
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EXCLUSIVITY. |
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SP acknowledges that the Limited Edition service plan as set forth in Appendix C, or any other similar sub-$10 plan, will be made available exclusively with the ATS Telephone from the Effective Date until the end of 2005. However, should SP determine to continue to offer the Limited Edition plan or any similar sub-$10 plan, whether directly or indirectly, ATS will have the right to promote the same plan for the period in which SP offers it, subject to the Term of this Agreement and any other limitations herein. If a total of 10,000 or more Accounts are activated between the Effective Date and December 31, 2005 because of ATS efforts pursuant to this Agreement, ATS will be granted the exclusive right to market such sub-$10 plan through the retailers listed in Appendix G through June 30, 2006. If a total of 100,000 or more accounts are activated between the Effective Date and June 30, 2006 because of ATS efforts pursuant to this Agreement, ATS will be granted the exclusive right |
American Telecom Services, Inc.
Private and Confidential
Page 5 of 37
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to market such sub-$10 plan through the retailers listed in Appendix G through December 31, 2006. Should SP’s costs shift upward at a rate that is greater than fifteen percent (15%) that they can document for ATS, the parties will work together to modify the sub-$10 plan to create an alternate promotional service plan. Provided that ATS is still entitled to exclusivity on the sub-$10 plan, such exclusivity would be applied to the alternate service plan. |
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ATS will be granted the exclusive right to market those rate plans specified in Appendix C to those retail chains specified in Appendix G for a period beginning on the Effective Date and lasting six months. If an average of at least one half of one Account is being activated per week per store in a particular retail chain during months five and six of this period, ATS will be granted an extension of this exclusivity period for that particular chain for an additional six months. After the second six month period, ATS will be granted an extension of exclusivity in the account that performs with a 25% increase in the number of Accounts from the prior six month period. The volume for calculating the six month period will be calculated by taking fifty percent (50%) of the Account activations during the prior twelve month period. |
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REBATES. SunRocket agrees to pay ATS [Subject to a request for confidential treatment; Separately filed with the Commission] of the redemption value of any rebates offered on phone master base station units and/or combination package containing the master base station unit and any number of expansion units up to a maximum advertised rebate of [Subject to a request for confidential treatment; Separately filed with the Commission]. SunRocket agrees to pay ATS [Subject to a request for confidential treatment; Separately filed with the Commission] of the redemption value of any rebates offered on phone expansion units up to a maximum advertised rebate of [Subject to a request for confidential treatment; Separately filed with the Commission] (“Rebate”). ATS will invoice SP for the Rebate deposit prior to SP making any Rebate redemption payments. All payments to ATS shall be made to ATS via wire transfer on a bi-weekly basis, based on documented redemption. |
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RECORDS. Each party hereto shall maintain reasonably complete, clear and accurate records of all information required to determine the amounts of any payments or transactions under the Agreement. Each party hereto, upon giving thirty (30) days prior written notice to the other party hereto, and no more than once during any twelve (12) month period, may conduct, at reasonable times during regular business hours and subject to the Confidentiality Obligations of Section 21, an inspection and audit of the portions of such books and records of the other party as is necessary to verify that such payments, including the amounts thereof, have been made in accordance with the terms hereof. |
American Telecom Services, Inc.
Private and Confidential
Page 6 of 37
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TERM. This Agreement shall continue from the date this Agreement was entered into until the third anniversary of the date on which the first Account is activated (“Initial Term”). If at least [Subject to a request for confidential treatment; Separately filed with the Commission] Accounts have been activated between the Effective Date and the last day of the Initial Term because of ATS efforts pursuant to this Agreement, ATS shall have the option to extend the Initial Term for one year, subject to written notice to SP. Should ATS exercise this option, section 16 (b) (relating to certain SP payments prior to the expiration of the Term of this Agreement) shall be considered null and void, and SP shall not be required to make any payments to ATS pursuant thereto. SP will make commercially reasonable efforts to provide Services to support a pilot program supporting not more than five thousand (5,000) End Users by August 15, 2005 and a full commercial launch by September 30, 2005. |
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TERMINATION. |
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a. |
This Agreement may be terminated prior to its expiration upon the occurrence of any of the following: (a) by the non-breaching party, if the other party materially breaches this Agreement which breach is not cured within thirty (30) days of written notice thereof to the breaching party; (b) by SP or ATS, upon a determination by any governmental authority with jurisdiction over the parties that the provision of the Telephones and/or Services under this Agreement in the jurisdictions in which the Telephones are being distributed is contrary to existing laws, rules or regulations; the party electing to terminate shall provide written notice to the other party setting forth in reasonable detail the factual basis for such termination and the parties agree in good faith to attempt to create a solution or workaround, or modify the Services to eliminate the requirement creating the basis for such termination in a manner mutually agreeable for a period of no less than ten (10) business days after the receipt of such notice and if such agreement is reached or the factual basis for such termination is otherwise resolved, then the Agreement shall not be terminated. Upon termination of this Agreement for any reason, ATS shall immediately cease production of the Telephones with Service provided by SP. Should ATS decide, in its sole discretion, to have SP continue to activate Accounts in Inventory, ATS shall provide SP with a final accounting setting forth the number of units in retail inventory (“Inventory Units”). SP will continue to support such promotional minutes on Inventory Units until all units are sold, ATS and SP further agree to use commercially reasonable efforts to migrate service on Telephones to another service provider including the transfer of all relevant and needed user records and any phone numbers used to fulfill any obligations under this Agreement. Should ATS decide, in its sole discretion, to have SP discontinue activation of Accounts in Inventory, then ATS shall immediately recall all Inventory Units as of the date of said election and shall agree to indemnify and hold SP harmless as set forth in Section 20 below. |
American Telecom Services, Inc.
Private and Confidential
Page 7 of 37
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SP agrees to pay ATS a fee equal to [Subject to a request for confidential treatment; Separately filed with the Commission] of Service revenues for the preceding two (2) months prior to the date of the Termination or expiry of the Term of this Agreement. For those End Users who activated their Services in the preceding twelve (12) months prior to the date of the Termination or expiry of the Term of this Agreement, SP agrees to pay ATS an additional [Subject to a request for confidential treatment; Separately filed with the Commission] of Service revenues for the preceding two (2) months, unless ATS materially breaches this Agreement. |
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OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS. SP shall be the sole and exclusive owner of all right, title and interest in and to all patents, copyrights, trademarks, trade secrets or other proprietary rights (“Intellectual Property Rights”) its owns. ATS acknowledges that the SP System constitutes valuable trade secrets of SP and constitutes Confidential Information under this Agreement. ATS shall be the sole and exclusive owner of all right, title and interest (including, without limitation, all Intellectual Property Rights) in and to the ATS System. SP acknowledges that the ATS System constitutes valuable trade secrets of ATS and Confidential Information under this Agreement. Nothing in this Agreement shall be deemed to grant to one party, by implication, estoppel or otherwise, license rights, ownership rights or any other Intellectual Property Rights in any materials owned by the other Party or any affiliate of the other Party. Neither Party shall attempt to register the Intellectual Property Rights of the other Party, or cause any claim, lien or encumbrance to attach to any Intellectual Property Rights of the other Party nor decompile or reverse engineer any proprietary of the other Party. To the extent that ATS acquires any patent or other Intellectual Property Rights, ATS shall grant to SP a royalty-free, nonexclusive, nontransferable right and license under any such patent or resulting patent for the term of the Agreement. |
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INSURANCE. Each Party shall obtain and maintain, at its own cost, the insurance coverages that are described in Appendix H as being its respective responsibility. These insurance coverages do not create or imply any limitation of liability. The Party which is responsible for obtaining and maintaining certain insurance coverages shall provide the other Party with certificates of such insurance coverages promptly following the date that this Agreement has been executed by both Parties. Each insurance certificate shall provide that the insurance policy shall not be subject to termination without at least thirty (30) days prior written notice to the certificate holder. A Party responsible for obtaining and maintaining property insurance coverage shall use all commercially |
American Telecom Services, Inc.
Private and Confidential
Page 8 of 37
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reasonable efforts to ensure that the policy contains a provision or endorsement which waives the insurance company’s right of subrogation against the other Party and its employees, agents, directors and officers in the event of any loss or damage from events within the coverage of the insurance policy. |
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19. |
USE OF MARKS. Any and all trademarks and trade names that SP uses are and shall remain the exclusive property of SP. ATS has no rights therein and shall not reproduce or use any corporate names, trademarks, service marks, trade names or logos of SP (collectively “Marks”) without SP’s express prior written consent. SP hereby grants ATS a limited, royalty-free license to use SP’s name and logo for the purpose of marketing the Products and Services during the Term of this Agreement, on all inserts, advertising, packaging, product and point of purchase, subject to the requirement of SP’s prior written approval as specified above. |
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REPRESENTATIONS & WARRANTIES. Each party represents and warrants that: (a) it is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized; (b) it has all necessary power and authority to enter into this Agreement and to perform all its obligations hereunder; (c) neither the execution, delivery, or performance of this Agreement will (i) result in the breach of, or constitute a default under, the terms of any material contract to which it is a party or by which it is bound; (ii) violate its charter or by-laws; or (iii) require the consent or approval of any third party; and (d) it will perform its obligations hereunder in compliance with all applicable laws, rules and regulations. ATS further represents and warrants that the Telephones do not infringe any Intellectual Property Rights of any third party. EXCEPT FOR WARRANTIES EXPRESSLY MADE IN THIS AGREEMENT, EACH OF SP AND ATS MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, TO ATS OR SP (AS APPLICABLE), OR TO ANY OTHER PERSON, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING THE MERCHANTABILITY, SUITABILITY, ORIGINALITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OR OTHERWISE (IRRESPECTIVE OF ANY PREVIOUS COURSE OF DEALINGS BETWEEN THE PARTIES OR CUSTOM OR USAGE OF TRADE), OR RESULTS TO BE DERIVED FROM THE USE OF ANY SOFTWARE, SERVICES, HARDWARE OR OTHER MATERIALS PROVIDED UNDER THIS AGREEMENT. |
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INDEMNIFICATION. Each of ATS and SP shall defend, indemnify and hold the other and its affiliates harmless from any claims, demands, liabilities, losses, damages, judgments or expenses related thereto arising out of (i) its breach of the terms of this Agreement, (ii) its marketing or facilitation of the Services or provision of the Telephones or the ATS System, including, without limitation, claims of fraud, misrepresentation or theft arising there from, (iii) any misconduct |
American Telecom Services, Inc.
Private and Confidential
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on its part, (iv) its misuse or unauthorized use of the Marks, (v) any claim by a third party that the Services (in which case SP indemnifies), Telephones (in which case ATS indemnifies), or ATS System (in which case ATS indemnifies), or any portion or combination thereof contemplated under this Agreement, infringes any patent, copyright, trademark, trade secret, or other proprietary right of a third party, and (vi) its violation of FCC, trademark, telemarketing or privacy laws. In the event each acts in good faith in the other’s best interest to fulfill the terms of this Agreement in compliance with a request by the other or to protect the other from any loss due to fraudulent use, theft of services or harm to the other’s reputation, each party shall indemnify and hold the other harmless from any claims, demands, liabilities, losses, damages, judgments or expenses related thereto. |
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MANNER OF CONDUCTING BUSINESS. ATS and SP agree that, at all times during the term of this Agreement, each party shall: conduct its business in a manner that reflects favorably on the Services and the ATS System; make no false or misleading representation with regard to each other or the Services or ATS System; and conduct its business and the performance of its obligations under this Agreement in compliance with all applicable laws and regulations including all laws relating to tax, currency exchange, export, and commercial corrupt practices. |
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CONFIDENTIALITY. “Confidential Information” means and all information which is of a confidential, proprietary, or trade secret nature, whether or not marked as confidential, that is furnished or disclosed by either party (“Disclosing Party”) to the other Party (“Receiving Party”) under this Agreement, including the specific business terms of the Agreement, business plans, technical data, performance data, programs, contracts, client lists, financial information, sales and marketing plans, business information, and any other information that is marked as “Confidential,” “Proprietary,” “Trade Secret,” or in some other manner to indicate its confidential, proprietary, or trade secret nature. Each of ATS and SP shall hold such Confidential Information in strict confidence and shall not reveal the same for a period of five (5) years after the termination of this Agreement, except for any information which is: generally available to or known to the public without violation of this Agreement; known to such party prior to the negotiations leading to this Agreement; or independently developed by such party outside the scope of this Agreement. Neither party shall be in breach of its confidentiality obligations hereunder if the Confidential Information is disclosed pursuant to a subpoena, judicial or governmental order or requirement (including the applicable disclosure requirements of the Federal securities laws and the rules and regulations of the Securities and Exchange Commission promulgated thereunder in the event that SP or ATS, as applicable, shall file a registration statement to initiate a public offering of its securities during the term of this Agreement), provided that the disclosing party only makes such disclosure to the extent required and, prior to making such disclosure, takes all reasonable steps to |
American Telecom Services, Inc.
Private and Confidential
Page 10 of 37
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provide prompt and sufficient notice to the other party so that the other party may contest and/or limit such requirement, subpoena or order. Each of ATS and SP shall safeguard the Confidential Information of the disclosing party to the same extent that it safeguards its own confidential materials or data relating to its own business, and in any event with no less than a reasonable standard of care. Except as provided above, neither ATS nor SP shall reveal any such Confidential Information without the disclosing party’s express prior written consent. The parties agree that an impending or existing violation of these confidentiality provisions would cause to the disclosing party irreparable injury for which it would have no adequate remedy at law and the disclosing party may be entitled to obtain immediate injunctive relief prohibiting such violation, in addition to any other rights and remedies available to it. |
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LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY IN ANY RESPECT FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, RELIANCE OR PUNITIVE DAMAGES, WHETHER IN TORT, CONTRACT OR PRODUCT LIABILITY, NOR SHALL EITHER PARTY BE LIABLE FOR ANY LOSS OF PROFITS, REVENUE, DATA, GOODWILL, BUSINESS OPPORTUNITIES OR ANY OTHER COMMERCIAL DAMAGE OF ANY KIND OR NATURE WHATSOEVER. EXCEPT WITH REGARD TO ANY LIABILITY THAT RESULTS FROM INTENTIONAL MISCONDUCT BY A PARTY, INTELLECUTAL PROPERTY INDEMNIFICATION OBLIGATIONS, OR BREACH OF CONFIDENTIALITY OBLIGATIONS, IN NO EVENT SHALL THE LIABILITY OF EITHER PARTY WITH RESPECT TO ANY TELEPHONES OR SERVICES PROVIDED HEREUNDER EXCEED THE AGGREGATE AMOUNT PAYABLE UNDER THE TERMS OF THIS AGREEMENT RELATING TO THE SPECIFIC ACCOUNTS GIVING RISE TO ANY CLAIM, WHETHER IN CONTRACT, TORT OR OTHER LEGAL THEORY. IN THE EVENT THAT EITHER PARTY PROVES THAT A FRIVOLOUS LAW SUIT HAS BEEN INITIATED, THEN SUBJECT TO THE RULING OF AN ARBITRATOR, RULE 11 MAY APPLY. |
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APPROVAL. Whenever prior approval or consent is required in this Agreement, the approval or consent shall be memorialized in writing. |
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PUBLICITY. Neither party, without the prior written consent of the other party, will make any news release or other public statement or disclosure regarding the existence of the terms and conditions of all or any part of this Agreement or any discussions or negotiations relating thereto, except as may be required by applicable securities laws, but only upon reasonable advance notice to, and consultation with, the other party. |
American Telecom Services, Inc.
Private and Confidential
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27. |
FORCE MAJEURE. Neither Party shall be liable to the other Party or be deemed to be in breach of this Agreement by reason of any Excusable Delay. A Party experiencing an Excusable Delay in its performance shall immediately notify the other Party by telephone (to be confirmed in writing within three days after the inception of the Excusable Delay) and shall describe in reasonable detail the circumstances causing such Excusable Delay. The Party experiencing Excusable Delay shall be excused from performance of such obligations so affected by the Excusable Delay event for the period during which the Excusable Delay event continues and for such time thereafter as is reasonably necessary to overcome the effects of such Excusable Delay. Both Parties shall use all commercially reasonable efforts to overcome or work around the Excusable Delay event as soon as reasonably practicable. The term “Excusable Delay” shall mean a delay in performance or failure to perform which is due to an event beyond the reasonable control of a Party and shall include, without limitation, (a) acts of God, weather conditions, explosion, flood, earthquake, or fire; (b) war or threat of war, sabotaging, riot, revolution, civil disturbance or requisition; (c) acts, restrictions, regulations, prohibitions or measures of any kind on the part of any governmental authority; (d) import and export regulations or embargos; or (e) strikes, lockouts, or other industrial actions or trade disputes. |
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CHOICE OF LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New York for contracts executed and to be performed entirely in such State. |
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29. |
ARBITRATION. The parties shall use their commercially reasonable efforts to resolve any disputes, controversies or claims arising out of, in connection with, or in relation to this Agreement, or the breach thereof (each, a “Dispute”). If SP and ATS cannot resolve any Dispute to their mutual satisfaction within a thirty (30) day period after the commencement of such efforts, then, in each such instance, the Dispute shall be submitted to binding arbitration pursuant to the rules of the American Arbitration Association before one arbitrator selected jointly by the ATS and SP; provided, however, that if the parties fail to select an arbitrator within thirty (30) days after initiation of arbitration, the American Arbitration Association shall make such selection. The arbitrator shall be governed by the laws of the State of New York in the settlement of any dispute submitted to him or her. The arbitration shall be held in the County and City of New York. The arbitrator’s award shall be final and judgment may be entered upon it in any court having jurisdiction thereof. Arbitration as provided in this paragraph 29 shall be the sole and exclusive remedy for any Dispute. |
American Telecom Services, Inc.
Private and Confidential
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30. |
ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all previous proposals, negotiations, representations, commitments writings and all other communications between the parties, both oral and written. No change, amendment, modification, termination or attempted waiver of any of the provisions hereof shall be binding unless in writing and signed by an authorized signatory of both parties hereto. |
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NOTICE. Any notice required to be given by either party to the other shall be deemed given upon receipt only when mailed first class mail or by nationally recognized overnight courier service, duly addressed and with proper postage, if in writing addressed to the party to whom notice is being given at the address of such party set forth above. |
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ASSIGNMENT. This Agreement is not assignable by either party hereto without the consent of the other party. Notwithstanding the foregoing, either party may assign this Agreement to any of its affiliates or subsidiaries without the consent of the other Party; provided that the party assigning the Agreement shall remain liable for the performance of such affiliate or subsidiary. |
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SEVERABILITY/WAIVER. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the validity or enforceability of any other part or provision of this Agreement. No waiver by any party of any breach of any provision hereof shall constitute a waiver of any other breach of that or any other provision hereof. |
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EXPORT COMPLIANCE. ATS agrees to comply with all applicable export control legislation. Certain parts of the ATS System may be subject to United States export laws prior to import to or export from another country in accordance with the Export Administration Regulations. ATS agrees to comply with such laws and regulations. Diversion contrary to U.S. law is prohibited and will be a breach of this Agreement. |
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SURVIVAL. The representations, warranties, limitations of liability, confidentiality, accrued payment obligations, and indemnities set forth in this Agreement shall survive the expiration or other termination hereof. |
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36. |
EXECUTION. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all counterparts shall constitute |
American Telecom Services, Inc.
Private and Confidential
Page 13 of 37
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but one and the same instrument, sufficient evidence of which for all purposes shall be any set containing counterparts executed by both Parties. The Parties agree that such counterparts may delivered by facsimile and that such facsimile counterparts shall evidence a binding agreement. |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
American Telecom Services, Inc.
Private and Confidential
Page 14 of 37
Please acknowledge your acceptance of the above Agreement by signing where indicated below.
Sincerely,
American Telecom Services Inc.
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By: |
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Adam Somer, President Communications Services |
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Date: |
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AGREED TO AND ACCEPTED: |
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SUNROCKET, INC. |
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By: |
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Name, Title: |
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Date: |
American Telecom Services, Inc.
Private and Confidential
Page 15 of 37
Appendix A: The ATS System
The ATS System is a multi-handset cordless broadband phone. The master unit connects directly, using an RJ-45 connection, into the End User’s modem or router. Each master unit is able to connect with multiple extension handsets. The extension handsets receive their network connection by communicating with the master unit using radio. Their bases only serve to re-charge their battery. This phone, and future phones within this classification includes systems that have multiple handset configurations regardless of the radio technology that is used.
American Telecom Services, Inc.
Private and Confidential
Page 16 of 37
Appendix B: Agent Fees
The following table sets forth the Agent Fee schedule for payments to be made by SP to ATS:
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$24.95 & $199 Plans (Signature Edition) |
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Strategic Accounts |
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Non-Strategic Accounts |
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2005 |
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$50, plus 50% of retailer agent fees after the first $10, up to a maximum retailer agent fee of $90. (Maximum SP fee: $90) |
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$50, plus 50% of retailer agent fees after the first $30, up to a maximum retailer agent fee of $70. (Maximum SP fee: $70) |
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2006 and beyond |
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$50, plus 50% of retailer agent fees after the first $30, up to a maximum retailer agent fee of $70. (Identical to “Non-Strategic Accounts”.) |
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Same as above |
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$9.95 & $99 Plans Limited Edition |
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Strategic Accounts |
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Non-Strategic Accounts |
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2005 and beyond |
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The lesser of $60 or the fee that would apply for the $24.95 & $199 plans |
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Same as Strategic Accounts |
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2006 and beyond |
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$50 |
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Same as Strategic Accounts |
American Telecom Services, Inc.
Private and Confidential
Page 17 of 37
Appendix C: Rate Plans
The following rate plans will be available to SP and ATS Service users on the Effective Date:
[Subject to a request for confidential treatment; Separately filed with the Commission]
Signature Edition: $24.95 per month
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Unlimited outbound minutes to U.S. & Canada |






