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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a.
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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.
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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.
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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.
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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.
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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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a.
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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.
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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.
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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.
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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.
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SP may offer
additional telecom services or Services to ATS generated End Users
provided that the applicable Commission as set forth in
Section
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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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3.
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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.
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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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5.
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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.
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6.
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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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7.
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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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8.
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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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9.
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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
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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
25 th 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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10.
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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
25 th 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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11.
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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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a.
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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
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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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b.
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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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13.
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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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14.
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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.
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15.
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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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a.
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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.
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b.
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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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17.
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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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18.
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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
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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.
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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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20.
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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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21.
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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
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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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22.
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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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23.
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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
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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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24.
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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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25.
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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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26.
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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.
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American Telecom Services, Inc.
Private and Confidential
Page 11 of 37
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27.
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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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28.
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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.
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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
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