EXHIBIT 10.24
MARKETING AND SERVICES AGREEMENT
AGREEMENT REGARDING SERVICE ARRANGEMENTS AND OTHER PERFORMANCES BETWEEN:
FoneFriend, Inc.
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(herein referred to as the FoneFriend)
InfiniCom Networks, Inc.
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(herein referred to as the InfiniCom)
For FoneFriend: For InfiniCom:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /S/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chairman ▇▇▇▇ ▇▇▇▇▇▇, CEO
June 6, 2004 June 6, 2004
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(Date, signature, title) (Date, signature, title)
WRITTEN INQUIRIES
All written inquiries concerning this agreement shall be addressed as follows:
To FoneFriend: To InfiniCom:
FoneFriend, Inc. InfiniCom Networks, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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CONTACT PERSONS (NAME, PHONE, E-MAIL)
For FoneFriend: For InfiniCom:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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DEFINITIONS
In this Agreement the following terms shall be interpreted as follows, when
spelled with initial capital letter:
The term "FoneFriend" means the entity that is identified as FoneFriend, Inc. on
the signature page of the Agreement.
The term "InfiniCom" means the entity which is identified as InfiniCom Networks,
Inc. on the signature page of the Agreement.
The term "Agreement" means the entire agreement between the parties including
General Terms and the Appendices which are selected according to table 1 of this
agreement, as interpreted according to clause 15.4 of the General Terms.
The term "General Terms" means the terms of this contracting document, exclusive
of its Appendices.
The term "Clause", if no reference is made to a specific Appendix or other
document, a section of the General Terms.
The term "Appendix" means an appendix to this Agreement, which is selected
according to table 1 of the General Terms.
The term "Attachment" means an attachment to an Appendix.
The term "Installation Date" is defined in Clause 1.2 h.
The term "Acceptance Period" is defined in Clause 1.3 a.
The term "Acceptance Date" is defined in Clause 1.3 c.
The term "Warranty Period" is defined in Clause 3.
The term "Business Day" means Monday through Friday, except United States
federally observed holidays.
1 SCOPE OF THE AGREEMENT
1.1 PURPOSE, RESPONSIBILITIES, REQUIREMENTS AND OBLIGATIONS
1.1 A THE SCOPE OF THE AGREEMENT
In order to meet FoneFriend's purposes with the acquisition, this
Agreement states the obligations and requirements which the parties
have negotiated and specified further in the Appendices. A list of the
Appendices is given below. Further specifics appear from the particular
Appendix.
The column for YES in table 1 is checked off in the event that the
specified Appendix or the specified performance is part of the
Agreement. Correspondingly, the column for NO is checked off in the
event that the specified performance or appendix is not included in the
Agreement, or is not explicitly specified.
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ALL COLUMNS SHALL BE CHECKED OFF: YES NO
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Appendix 1: FoneFriend's purpose and requirements X
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Appendix 2: InfiniCom's specification of the solution
and conditions for the delivery X
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Appendix 3: Specification of equipment X
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Appendix 4: Specification of programs X
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Appendix 5: Progress and time schedule X
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Appendix 6: Acceptance Period X
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Appendix 7: Summary of prices and terms of payment X
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Appendix 8: Network Service Agreement X
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Appendix 9: Stock Acquisition Agreement X
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1.1 B FONEFRIEND'S RESPONSIBILITY FOR CLARITY TOWARDS THE INFINICOM
FoneFriend is responsible for having expressed it's purpose for the
acquisition and it's needs and requirements clearly, as a basis for
InfiniCom's performances.
1.1 C INFINICOM'S RESPONSIBILITY FOR IT'S PERFORMANCES
InfiniCom is responsible for ensuring that it's performances conform to
the purposes, requirements and specifications which are covered by this
Agreement. It is InfiniCom's responsibility to ensure that it's
performances operates as an entire system.
In the event that deliveries according to this Agreement are intended
for use together with previously installed equipment and/or programs at
FoneFriend's premises, then FoneFriend itself shall provide for
upgrading of said equipment and/or program, as well as other
preparations which are necessary for said equipment and/or programs to
function together with the deliveries according to this Agreement.
1.1 D AMENDMENTS AND PRIORITY IN THE EVENT OF INCONSISTENCIES
Amendments to the General Terms of this Agreement shall be made in the
Appendices, except for amendments which are referred to other
Appendices by the General Terms. Amendments which do not appear in the
relevant Appendix shall yield to the General Terms.
In the event that there are contradictions between the Appendices,
Appendix 1 shall take precedence over the other Appendices.
Any discrepancies between the FoneFriend's requirements (Appendix 1)
and InfiniCom's specifications of the solution (Appendix 2), must be
explicitly expressed in the specifications of the solution. InfiniCom's
specifications of the solution take precedence over FoneFriend's
requirements in the event that the latter contains discrepancies which
are not explicitly specified therein.
1.2 PERIOD OF PREPARATION FOR INSTALLATION AND DELIVERY
1.2 A SECURITY CLEARANCE IN DUE TIME
FoneFriend shall apply for security clearance for the it's personnel to
the extent this is necessary for the InfiniCom's fulfilment of the
Agreement.
1.2 B FORWARDING OF DOCUMENTATION, INFORMATION OBLIGATIONS, ETC.
Agreed documentation, Appendix 5, shall be delivered without undue
delay upon signature of the Agreement and within the deadline according
to Appendix 6 at the latest, in order to enable FoneFriend to prepare
the site for the InfiniCom's installation activities as well as to
prepare its organization for that Acceptance Period (Clause 1.3 a).
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InfiniCom shall provide FoneFriend with adequate information on all
matters which may be related to a successful preparation for the
installation and operation of the system. Unless otherwise stipulated,
information shall be provided on any requirements which might exist
with regard to telecommunications, ensuring of operational reliability,
safeguarding against loss of data or damage to the system, safeguarding
against unauthorised access to the system, and other specific
conditions for this procurement which might not be apparent from
corresponding documents.
1.3 ACCEPTANCE PERIOD AND ACCEPTANCE DATE
1.3 A FONEFRIEND'S OBLIGATION AND RIGHT TO EXAMINE INFINICOM'S
PERFORMANCE
FoneFriend shall during an Acceptance Period of 3 (three) months or
other time period agreed in Appendix 6, examine the performance of the
system. The Acceptance Period commences upon FoneFriend's receipt of
the InfiniCom's written notice stating that the equipment and programs
are completed.
FoneFriend's examination procedures shall, in addition to counting and
control, be carried out on the presumption of ordinary, daily
operations and activities. FoneFriend may choose to examine technical
and/or operational qualities according to methods deemed appropriate by
FoneFriend, in the light of the requirements according to Appendix 1 or
in other Appendices. Further specification of the content of the
Acceptance Period, including specific provisions for examinations and
tests, is provided for in Appendix 7. Possible subsequent partial
deliveries shall, unless otherwise agreed upon in Appendix 7, be
subject to a corresponding procedure and Acceptance Period as
prescribed herein.
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1.3 B HANDLING OF ERRORS AND DEFECTS
In the event that FoneFriend, during the Acceptance Period wants to
claim that the deliverables do not comply with what is agreed upon,
this must be done by written notification to the InfiniCom. This
notification, and a written statement explaining why the performance
cannot be approved, must be sent to the InfiniCom without undue delay.
InfiniCom must, as soon as possible, rectify the identified errors and
defects.
Reference is made to Clause 10 regarding delays and inter alia
notification in the event that the agreed Acceptance Date according to
Clause c below cannot be met.
1.3 C ACTIVE (OR POSSIBLY PASSIVE) ACCEPTANCE, ACCEPTANCE DATE
FoneFriend shall, before the expiry of the Acceptance Period, inform
InfiniCom about the result of its examinations and as to whether
InfiniCom's performances is considered to be completed or fulfilled
according to the Agreement. If this is not done before the expiry of
the Acceptance Period, the deliverables shall however nevertheless be
deemed to be accepted and delivered as agreed upon. FoneFriend is not
entitled to deny acceptance of the deliverables on the grounds of minor
defaults which do not have any substantial impact on FoneFriend's use
of the system. InfiniCom shall however in any event remedy notified
defaults as soon as possible.
The first Business Day following the forwarding of FoneFriend's notice,
is to be regarded as Acceptance Date.
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1.3 D COMMENCEMENT OF WARRANTY AND RIGHT TO COMPLAIN
Commencing on the Acceptance Date, FoneFriend benefits from the
warranty according to Clause 3, as well as the right to complain
according to Clause 9.2 a.
In the event that defects, which ought to have been discovered in the
course of the Acceptance Period, are notified after the expiry of said
period, InfiniCom may claim compensation for extra costs and expenses
which are sustained because of the FoneFriend's late notification,
Clause 3.2.
2 PAYMENT
2.1 PAYMENT SPECIFICS AND TOTALS
The purchase price for the equipment, payment for program licences, and
payments for other deliverables are specified in the respective
Appendices to this Agreement.
The payments include InfiniCom's expenses with respect to programs,
documentation and subscriber acquisition costs
2.2 TERMS OF PAYMENT
Date, place, method of payment, and eventual other terms of payment are
specified in Appendix 7.
2.3 PRICE ADJUSTMENTS
Currency fluctuations that influence costs which are related to the
InfiniCom's deliverables, may be claimed as a ground for price
adjustments upon written notice to FoneFriend 1 (one) month in advance.
In the event that prices have been increased due to increased currency
rates, and the said currency rates fall again, InfiniCom is obliged to
reduce the increased prices correspondingly regardless of any claim in
this respect from FoneFriend.
Other provisions regarding price changes may be agreed upon in Appendix
7.
3 WARRANTY PERIOD
3.1 SCOPE OF WARRANTY
Subject to FoneFriend operating the system in a normal manner and with
due care, InfiniCom shall during the Warranty Period and at no
additional cost rectify errors and defects and rectify errors in the
programs which are supplied under this Agreement. The Warranty Period
is 2 (two) years for equipment and 1 (one) year for programs, both from
the Acceptance Date. There is no warranty with respect to the
transferred subscribers other than InfiniCom shall during the Warranty
Period and at no additional cost replace any transferred subscribers
that cancel service with FoneFriend. The Warranty Period is 3 (three)
months for subscribers.
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3.2 LEVEL OF PERFORMANCE
Marketing and service obligations which exceed the InfiniCom's warranty
obligations shall be specified and priced in a separate Agreement,
which shall be based upon this agreements terms and conditions.
Unless otherwise agreed, InfiniCom shall remedy errors and defects
without undue delay upon receipt of the FoneFriend's notice.
3.3 ADDITIONAL PAYMENTS
Reference is made to inter alia Clause 9.2 regarding the possibility
for InfiniCom to claim payment for extra costs and expenses due to late
notice by FoneFriend.
InfiniCom shall, in the event that errors or defects are caused by
negligence on FoneFriend's side, render the same services as agreed
above against payment according to InfiniCom's standard list prices,
unless other prices are agreed upon.
4 COOPERATION ISSUES AND OBLIGATIONS
4.1 MEETINGS
Each party may, at 3 (three) days notice, summon the other party to
meet to discuss the contractual relationship and the fulfilment of the
Agreement.
4.2 AMENDMENTS AND ADDENDA TO THE AGREEMENT
In the event that FoneFriend, after the Agreement has been concluded,
needs to amend the requirements (Inter alia Appendix 1) in such a way
that the nature or scope of the performances deviates from what was
agreed at the time the Agreement was entered into, InfiniCom is, upon
it's eventual acceptance of said amendments, entitled to demand changes
in remuneration and/or time schedules to the extent this is caused by
FoneFriend's request for amendment.
Demands for changed remuneration and/or time schedules should be made
at the same time as the amended requirements, performances or
activities are accepted and no later than 30 (thirty) days from the
date of InfiniCom's acceptance of the amended requirements.
Amendments and addenda to the Agreement shall be made in writing and
must be signed by personnel who are authorised to represent each of the
parties.
4.3 COOPERATION
FoneFriend shall co-operate in order to make it possible for InfiniCom
to fulfil it's obligations according to the Agreement.
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4.4 RIGHT TO MARKETING AND SERVICE AGREEMENT
FoneFriend shall have the right to enter into a marketing and service
agreement with InfiniCom, or with a third party which according to
further agreement is able to perform this on InfiniCom's behalf.
FoneFriend may demand the marketing and service agreement to be renewed
so that it is effective for at least five (5) years following the
expiry of the Acceptance Period.
During this period, InfiniCom is obliged to maintain competent staff
and facilities which will enable it to fulfil it's marketing and
service obligations.
4.5 EQUIPMENT IMPROVEMENTS
InfiniCom shall, as soon as possible, provide information and offers to
FoneFriend with respect to improvements, add-ons, and replacement of
delivered equipment, programs and services.
4.6 PROGRAM VERSIONS AND NEW PROGRAMS
InfiniCom has a corresponding obligation, as soon as it is reasonable,
to provide information and offers regarding new program versions and
new programs of interest to FoneFriend, as well as improvements of
delivered programs. In addition, InfiniCom shall offer documentation
which makes it possible for FoneFriend to take new items and
improvements into operational use (to the extent this is not covered by
a valid service agreement between the parties).
The price for delivery of new versions to delivered programs shall only
cover improvements of the program.
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In the event that new program versions require upgrading of equipment
which is delivered according to this Agreement, InfiniCom shall, to the
extent this is possible, fully inform FoneFriend of increased storage
and computing capacity which is needed due to InfiniCom's delivery.
FoneFriend may choose not to receive the new program version, unless
InfiniCom covers the incurred costs including upgrading of the
equipment.
In the event that FoneFriend takes the initiative to implement new
program versions due to it's own needs, FoneFriend shall cover
necessary upgrading on it's own account.
InfiniCom undertakes to cooperate with third parties to the extent that
FoneFriend deems this necessary in order to carry out activities
according to this Agreement. The extent of and remuneration for such
co-operation shall be further agreed upon in Appendix 7. In this event
InfiniCom is obliged to act impartially and in consultation with
FoneFriend.
InfiniCom shall nevertheless be relieved of it's obligation according
to this Clause, if it demonstrates that such co-operation with third
parties would adversely effect it's relationship with existing
subcontractors or business connections.
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5 CONFIDENTIALITY
5.1 CONFIDENTIALITY UNDERTAKINGS FOR THE FONEFRIEND'S PERSONNEL
The confidentiality provisions of this Agreement apply to the personnel
of FoneFriend, who are also obliged to comply with any other
confidentiality provisions which at any time applies to InfiniCom's
personnel.
InfiniCom may demand that FoneFriend only engages personnel who have
obtained security clearance by InfiniCom or the competent United States
authorities.
5.2 CONFIDENTIALITY UNDERTAKINGS FOR THE INFINICOM'S OWN STAFF AND FOR
THIRD PARTIES
If FoneFriend so requests, InfiniCom shall impose confidentiality
obligations on it's own staff regarding marketing and services provided
under this Agreement.
Others who are granted access to the InfiniCom's system, may be allowed
access to information which is necessary for correct and efficient
operation of equipment and/or programs. This does not apply to
information which is subject to secrecy according to this Agreement.
If it is necessary however, that the parties concerned be given access
to such confidential information for correct and effective use of the
equipment and/or program, adaptation or rectification of faults in
program, etc., InfiniCom shall impose the same confidentiality measures
on the parties concerned as to it's own staff.
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6 TRANSFER OF TITLE AND LICENSE
6.1 TITLE TO EQUIPMENT
Equipment which is delivered according to this Agreement becomes the
property of FoneFriend from and including Installation Date. The
transfer of title implies that FoneFriend acquires full de facto and
legal rights to the equipment, as limited in this Agreement and its
Appendices or in agreement regarding maintenance and service.
In the event that title to the equipment shall not pass over to
FoneFriend until payment has been made, this shall be agreed upon in
Appendix 7.
6.2 LICENSE OF PROGRAMS
Programs that are delivered according to this Agreement remain the
property of the InfiniCom. FoneFriend is granted a non-exclusive
license from and including Installation Date for a period of five (5)
years. The transfer of license implies that FoneFriend acquires full de
facto and legal rights to use of the programs for it's own use and to a
limited extent, the use of some programs by it's subscribers.
6.3 TRANSFER OF SUBSCRIBERS
Subscribers that are delivered according to this Agreement become the
property of FoneFriend on and from the date of the transfer. The
transfer of the subscribers implies that FoneFriend acquires full de
facto and legal rights to the subscriber relationship, including
payment processing and communication.
7 RISK RELATED TO PROGRAMS AND SUBSCRIBERS
The risk of damage delivered program copies etc. due to accidental
causes shall pass from InfiniCom to FoneFriend on the day of
installation.
In the event that copies of the program supplied are destroyed after
the risk has passed to FoneFriend, the latter shall nevertheless be
entitled to new copies of said program against payment of InfiniCom's
cost in connection with procurement of such copies. This does, however,
not apply in the event that the entire copyright to the source code is
vested in FoneFriend.
The risk of subscriber cancellation of service shall pass from
InfiniCom to FoneFriend on the Three Hundred Sixty Fifth (365th) day of
InfiniCom's transition of the subscriber to FoneFriend.
FoneFriend shall be responsible for all customer service activities
associated with the subscriber from and on the day of transition from
InfiniCom to FoneFriend. InfiniCom shall have no obligation to support
FoneFriend's customer service efforts except for the transfer of
subscriber usage records. FoneFriend shall modify it's internet
presence to accurately reflect the pricing of services rendered to it's
subscribers not later than the date such services are subscribed to by
the public.
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8 SUSPENSION OF THE PARTIES' RIGHTS AND OBLIGATIONS
Should an extraordinary situation arise outside the control of the
parties making it impossible to fulfil the obligations under this
contract, and which qualifies as force majeure according to the general
rules regarding sales of goods, the other party shall be notified of
this without undue delay. The obligations of the party affected are
suspended for the duration of the extraordinary situation. The
corresponding obligations of the other party are suspended for the same
period of time.
In the event of force majeure the other party may only withdraw from
the Agreement with the affected party's consent or, if the situation
endures or is presumed to endure for longer than 90 (ninety) days
calculated from the date the situation arises, upon just 15 (fifteen)
days notice. Different duration may be agreed upon in an Appendix.
9 DEFECTS
9.1 WHAT IS TO BE REGARDED AS A DEFECT
There is a defect on InfiniCom's part in the event that the
deliverables do not meet the purposes, requirements and specifications
according to this Agreement and it's Appendices.
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9.2 OBLIGATION TO REMEDY DEFECTS
9.2 A Period of complaint
InfiniCom is under the obligation to remedy all defects which appear in
the course of a period of complaint at no extra cost to FoneFriend. The
period of complaint is 2 (two) years for equipment, 1 (one) year for
programs and twelve (12) months for subscribers calculated from the
Acceptance Date. A corresponding period shall apply in the event of
additional deliveries, and for that part or those parts of the
performance which are substituted/replaced. FoneFriend shall notify
InfiniCom in writing without undue delay after the defect is or ought
to have been discovered.
It is a condition that the defect, or the cause of the defect, must be
demonstrated to have existed at the Acceptance Date. This does not,
however, apply in the event that InfiniCom according to warranty or
other agreement has assumed responsibility for defects which arise
after Acceptance Date.
9.2 B Means of remedy
InfiniCom shall rectify defects so that the performance of deliverables
is restored to the agreed requirements and specifications. Remedy may
take the form of rectification, re-delivery or additional delivery.
Work on the remedying of defects shall commence and be carried out
without undue delay upon InfiniCom's receipt of notification of the
defect.
9.2 C Additional remuneration/ordinary payments
In the event that the facility is moved after delivery, InfiniCom is
entitled to reasonable payment for extra costs this might incur.
InfiniCom is entitled to compensation for extra costs it may incur due
to late notification of defects which ought to have been discovered in
the course of the Acceptance Period.
InfiniCom shall, upon payment of its standard charges, rectify faults
which are due to negligence on the part of FoneFriend, it's employees
or others who are identified with FoneFriend.
9.3 SANCTIONS
9.3 A Price reduction
FoneFriend is entitled to a proportional price reduction if InfiniCom,
in spite of repeated attempts, has not succeeded in remedying a defect
in the equipment or programs.
9.3 B Termination for cause
FoneFriend may terminate the Agreement in the event that the defect
substantially affects FoneFriend's use of the system, and said defect
cannot be remedied without causing substantial costs to FoneFriend.
9.4 COMPENSATION FOR DAMAGES
FoneFriend is entitled to claim compensation for damages which could
reasonably have been foreseen as a possible consequence of the defect,
unless InfiniCom proves that the defect or the cause of the defect
cannot be ascribed to InfiniCom. This compensation shall not include
losses due to reduced or discontinued operations, but shall include
costs, expenses and work related to rectification of equipment and
programs.
FoneFriend is only entitled to compensation for indirect losses in the
event that InfiniCom, or someone for whom InfiniCom is responsible, has
committed gross negligence or deliberate breach of contract.
Maximum compensation shall normally be limited to an amount which
corresponds to the total remuneration according to the Agreement. This
limitation does, however, not apply in the event that InfiniCom, or
someone for whom it is responsible, has committed gross negligence or
deliberate breach of contract.
10 DELAYS
10.1 NOTIFICATION OF DELAY
InfiniCom shall without undue delay notify FoneFriend in writing in the
event that installation, delivery, subscriber transition or other
obligations cannot be performed according to the agreed time schedule
(Appendix 5). The notification shall state the reason for the delay
and, to the extent possible, when the obligations are expected to be
fulfilled.
This also applies to any further delays which may occur after the first
given notice.
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10.2 DELIVERY TO BE EXPECTED AFTER THE EXPIRY OF THE PENALTY PERIOD
If the Acceptance Date is expected to take place later than the expiry
of the penalty period, InfiniCom may inquire in writing whether
FoneFriend maintains it's claim for delivery, in spite of this serious
delay thereby enabling Fonefriend to terminate this Agreement. In this
event InfiniCom shall inform FoneFriend as to when the Acceptance Date
is expected to take place and state a revised deadline.
The revised deadline is deemed to be accepted by FoneFriend, unless
FoneFriend replies in writing within 10 (ten) Business Days from
FoneFriend's receipt of InfiniCom's notification of said deadline.
InfiniCom shall keep the revised deadline if FoneFriend maintains it's
claim for delivery (refrains from termination), unless another deadline
is agreed upon.
10.3 TERMINATION FOR CAUSE
Though FoneFriend may entirely or partly terminate the Agreement with
immediate effect and claim compensation for damages as stated below,
FoneFriend may not, however, terminate the Agreement in the event that
a revised deadline is agreed upon according to Clause 10.2 and this
deadline has not expired.
10.4 COMPENSATION FOR DAMAGES
In the event that correct deliverables are not provided before the
expiry of the daily penalty period according to Clause 10.3, FoneFriend
is entitled to claim compensation for damages which are reasonably
demonstrated to have been caused by the delay, unless InfiniCom proves
that the delay or the cause of the delay cannot be ascribed to it. This
includes losses due to delayed commencement of operations and losses
which are caused by additional work as a consequence of the delay.
FoneFriend is entitled to compensation for indirect losses in the event
that the InfiniCom, or someone for whom the InfiniCom is responsible,
has committed gross negligence or deliberate breach of contract.
Maximum compensation shall normally be limited to an amount which
corresponds to the total remuneration according to the Agreement. This
limitation does however not apply in the event that the InfiniCom or
someone for whom InfiniCom is responsible has committed gross
negligence or deliberate breach of contract.
Eventual daily penalties shall be deducted from the compensation
amount.
11 LEGAL DEFECTS
11.1 LEGAL DEFECTS
If InfiniCom's performance infringes anyone's copyrights or other
rights, this shall be deemed to be a legal defect.
11.2 COMPLAINT IN WRITING
In the event that a claim regarding infringement of rights is made from
a third party and FoneFriend wants to pursue his rights according to
Clause 11.1, InfiniCom shall be notified of the claim in writing and
without undue delay.
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11.3 OBLIGATION TO LITIGATE AT OWN EXPENSE
Should any claim be made by a third party on the grounds of
infringement of copyrights or other rights in connection with any part
of the delivery according to this Agreement, InfiniCom undertakes at
his own expense to conduct the case for FoneFriend as well. From the
time that InfiniCom takes over the case, FoneFriend undertakes, against
separate reimbursement, to assist InfiniCom but will not take any
independent actions in lawsuits against said third party.
11.4 OBLIGATION TO REMEDY LEGAL DEFECTS
Should a dispute arise, for example in the form of lawsuit or the like
against InfiniCom or FoneFriend, due to infringement of rights which
are prerequisite to this Agreement, InfiniCom shall have the following
options to remedy the legal defects:
a) To acquire for itself and FoneFriend the right to utilize the item
in question.
b) Within short time to provide FoneFriend with another equivalent
performance which does not infringe anyone's rights, provided that this
solution does not in any material respect impede FoneFriend from
performing it's tasks.
c) To ensure or warrant FoneFriend indemnity against possible losses.
11.5 TERMINATION FOR CAUSE
FoneFriend may terminate the Agreement with immediate effect in the
event that InfiniCom cannot remedy the legal defect in accordance with
Clause 11.4 and this is of substantial consequence to FoneFriend.
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12 BREACH OF CONTRACT BY FONEFRIEND
12.1 WHAT IS TO BE REGARDED AS BREACH OF CONTRACT BY FONEFRIEND
FoneFriend is deemed to be in breach of contract in the event that:
a) Payments are not made on time according to Clause 2 and Appendix 7.
b) Obligations are not kept with respect to confidentiality according
to Clause 5.2
c) The program licence provisions according to Clauses 6.2 and 6.3 are
infringed.
d) FoneFriend does not otherwise comply with his obligations under this
Agreement.
12.2 INTEREST ON DELAYED PAYMENTS
InfiniCom is entitled to interest on payments overdue at a rate of
10-percent (10%) per annum from the day payment is due.
12.3 EXTRA EXPENSES
InfiniCom may claim compensation for documented extra expenses which
are brought upon it due to breach of contract by FoneFriend.
12.4 TERMINATION FOR CAUSE
In the event that due compensation and payments are not paid within
five (5) days from due date, InfiniCom may notify FoneFriend that the
Agreement will be terminated unless payment is received within five (5)
days from FoneFriend's receipt of said notification. The Agreement may
not be terminated if overdue payments and interests are paid before the
deadline expires.
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In the event that other breach of contract is of substantial
consequence to InfiniCom, InfiniCom may notify FoneFriend that the
Agreement will be terminated unless the breach ceases within 5 (five)
business days of FoneFriend's receipt of the notification. The
Agreement cannot be terminated if FoneFriend's breach of contract
ceases before the expiry of the deadline.
12.5 COMPENSATION FOR DAMAGES
InfiniCom may claim compensation for losses which are reasonably due to
FoneFriend's breach of contract, unless FoneFriend proves that the
breach of contract cannot be ascribed to FoneFriend.
Indirect losses are only compensated in the event that FoneFriend or
someone FoneFriend is responsible for has committed gross negligence or
deliberate breach of contract.
13 LIABILITY FOR DAMAGE CAUSED BY NEGLIGENCE
The parties are, within the limits prescribed below, liable for any
damage and any loss which they inflict on the other party by
negligence. This liability does not include:
o damages and losses which could not reasonably have been foreseen as
a possible consequence of the negligence or
o amounts which exceed the remuneration which follows from this
Agreement.
14 LIABILITY FOR SUB-CONTRACTORS
Each party has the same responsibility for sub-contractors as for it's
own fulfilment of the Agreement.
15 OTHER PROVISIONS
15.1 TRANSFER OF RIGHTS AND OBLIGATIONS
FoneFriend shall not entirely or partially transfer it's rights and
obligations according to this Agreement to another. InfiniCom may only
transfer it's rights and obligations according to this Agreement upon
FoneFriend's written consent, except in the event that InfiniCom merges
with another company or the transfer is made to a subsidiary company.
In the latter event the transfer is contingent upon the InfiniCom's
warranty that the subsidiary company fulfils the Agreement.
The right to remuneration according to this Agreement may freely be
transferred. Such transfer does not relieve the party concerned of his
contractual obligations and responsibilities.
15.2 INSURANCE
FoneFriend undertakes to ensure sufficient insurance to cover the
FoneFriend's risks and responsibilities according to the Agreement.
InfiniCom is obliged to take out sufficient insurance to cover any
claim from FoneFriend which follows from InfiniCom's risk or
responsibility according to this Agreement, within the frame of common
insurance terms and conditions.
15.3 BANKRUPTCY, COMPOSITION PROCEEDINGS ETC.
FoneFriend may terminate the Agreement with immediate effect in the
event that insolvency or composition proceedings or bankruptcy is
opened in connection with InfiniCom's business, or InfiniCom's
creditors impose other control measures.
InfiniCom may terminate the Agreement with immediate effect in the
event that insolvency or composition proceedings or bankruptcy is
opened in connection with FoneFriend's business, or FoneFriend's
creditors impose other unconscionable control measures.
15.4 CHOICE OF LAW
The parties rights and obligations according to this Agreement shall in
its entirely be governed by California law.
15.5 DISPUTES
Disputes between the parties regarding the interpretation or legal
effect of this Agreement shall primarily be resolved by negotiations.
Alternatively the parties may agree that the dispute shall be finally
resolved by arbitration in the County of Los Angeles, State of
California. Each party appoints an arbitrator, and the arbitrators
appointed by the parties appoint a third member who shall then be the
chairman of the arbitration panel.
15.6 ATTENTION WITH RESPECT TO EXPORT OR RE-EXPORT
In the event that export or re-export of products, programs and
technology delivered by InfiniCom are subject to authorisation by
public authorities in the country or origin and/or other countries, it
is FoneFriend's responsibility to obtain such authorisation upon export
or re-export of said products.
APPENDIX 1
FONEFRIEND PURPOSE AND REQUIREMENTS
FoneFriend desires to acquire paying subscribers for it's telecommunications
services. FoneFriend currently uses, and intends to continue to provide it's
subscribers the telecommunications services using Voice of Internet Protocol
technology. FoneFriend intends to deliver the telecommunication services to it's
subscribers for a price that is competitive to other like offerings.
FoneFriend requires access to media to deliver its offering message to
consumers. FoneFriend requires interconnection to the conventional public
switched telephone networks to enable call completion by it's subscribers to
points outside the FoneFriend Voice of Internet Protocol network. FoneFriend
requires a Voice over Internet Protocol solution that provides circuit-switched
toll-quality to it's subscribers.
APPENDIX 2
INFINICOM'S SPECIFICATION OF THE SOLUTION
AND CONDITIONS FOR DELIVERY
InfiniCom shall deliver a Voice over Internet Protocol system that permits call
completion to all global direct dialable points. InfiniCom shall further deliver
systems and programs that enable FoneFriend to provision services to, manage,
render invoices to and process payments from FoneFriend subscribers. InfiniCom
shall deliver to FoneFriend access to media for the delivery of FoneFriend
offerings to consumers. InfiniCom shall deliver fifty-thousand (50,000) paying
subscribers to FoneFriend as FoneFriend subscribers.
FoneFriend shall, prior to the conversion of the aforementioned subscribers,
update it's internet website to reflect the service terms and conditions as
represented by offerings delivered using the media provided by InfiniCom.
FoneFriend shall staff or contract sufficient customer support to respond to
subscriber queries and support requests. FoneFriend shall provide to InfiniCom
the equipment as defined in Appendix 3 to this Agreement at times specified in
Appendix 5.
---------------------------------------
CONFIDENTIAL
---------------------------------------
APPENDIX 3
SPECIFICATION OF EQUIPMENT
[REDACTED]
APPENDIX 4
SPECIFICATION OF PROGRAMS
The programs are licensed to support 750,000 end-point registrations and able to
process 256,000 concurrent sessions per server. InfiniCom is licensing access to
its VT VoIP protocol. The programs support RFC 3219 internetworking with the VT
network. H.323 and SIP internetworking to the VT protocol is supported. Protocol
version and configuration internetworking. Support for ENUM services for
telephone number resolution. The program is capable of up to 800 call set-ups
per second and 350 calls per second (including set-up and tear-down) per server.
Media latency is less than 18 microseconds within the program. Signaling latency
is 7 to 12 milliseconds. Availability of the program is 99.999% when configured
on the servers as per specification.
APPENDIX 5
PROGRESS AND TIME SCHEDULE
FoneFriend and InfiniCom acknowledge that time is of the essence.
Progress toward the completion and delivery of the system and subscribers by
InfiniCom shall begin upon the Closing. The deliverables as contemplated in this
Agreement are due at various times as defined below. Appendix 6 reflects the
Acceptance Period during which programs, services and subscribers may be
delivered to FoneFriend.
The time schedule is subject to the delivery of certain equipment and
performance by FoneFriend.
---------------------------------------------------- -------------- ---------
InfiniCom VT Protocol client and CORE software 7/1/2004 INF
---------------------------------------------------- -------------- ---------
Network interconnection to PSTN (60mm/MOU/month) 7/1/2004 INF
---------------------------------------------------- -------------- ---------
Website online ordering and provision system 7/1/2004 INF
---------------------------------------------------- -------------- ---------
Website online subscriber interface system 7/1/2004 INF
---------------------------------------------------- -------------- ---------
Traffic generator and closed loop system testing 7/1/2004 INF
---------------------------------------------------- -------------- ---------
Media/Advertising delivery and Closing 7/2/2004 INF
---------------------------------------------------- -------------- ---------
Subscriber transition process (50,000 subs) 7/4/2004 INF
---------------------------------------------------- -------------- ---------
APPENDIX 6
ACCEPTANCE PERIOD
FoneFriend shall accept the deliverables from InfiniCom beginning June 10, 2004.
FoneFriend shall accept additional subscribers through July 6, 2005 to maintain
a minimum level of 50,000 active and paying subscribers. During the term of this
Agreement, FoneFriend shall accept programs and updates of programs from
InfiniCom as required by InfiniCom to maintain FoneFriend and InfiniCom agreed
upon network performance and traffic capacity.
InfiniCom may deliver to FoneFriend items specified in Appendix 5 prior to the
scheduled delivery date. FoneFriend is not obligated to advance its performance
time schedule should InfiniCom delivers in advance of the Appendix 5 time
schedule.
--------------------------------
CONFIDENTIAL
--------------------------------
APPENDIX 7
SUMMARY OF PRICES AND TERMS OF PAYMENT
SUBSCRIBERS
[REDACTED]
VT PROTOCOL CORE
[REDACTED]
VT PROTOCOL CLIENT
[REDACTED]
OTHER INFINICOM CHARGES
Additional work orders may be submitted to InfiniCom by FoneFriend during the
term of this Agreement. Charges for the work shall be defined in those work
orders.
TERMS FOR PAYMENT
[REDACTED]
APPENDIX 8
NETWORK SERVICE AGREEMENT
The following Network Service Agreement covers the provisioning of
interconnection of FoneFriend subscribers to the public switched telephone
network for the purpose of call completion to all direct dialable points within
the continental United States and End Points identified in the Network Service
Agreement.
NETWORK SERVICE AGREEMENT
(FON-04-1)
TERMS AND CONDITIONS
This Carrier Agreement (the "Agreement") is entered into between InfiniCom
Networks, Inc. ("INFINICOM") and FoneFriend, Inc. ("FFRD").
1. SCOPE OF AGREEMENT.
INFINICOM shall provide to FFRD certain specified local termination
services ("Local Services") as described herein and in one or more
service schedule(s) ["Service Schedule(s)"] attached hereto and made a
part hereof (collectively the "INFINICOM Services"), and FFRD agrees to
accept the INFINICOM Services at the rates and charges and pursuant to
the terms and conditions as set forth in this Agreement.
2. SERVICE SCHEDULES
A. GENERAL. INFINICOM Services requested by FFRD shall be set forth on
the Service Schedule(s) and their Exhibits which are attached hereto
and when subscribed by the parties shall become a part of this
Agreement which shall then include the terms and conditions contained
in the Schedule(s), and their Exhibits, and such other material
information contained therein as shall be necessary for INFINICOM to
provide INFINICOM Services to FFRD.
//
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B. SPECIFIC PROVISIONS:
a) REQUESTED CAPACITY/MINIMUM MONTHLY USAGE COMMITMENT: The Service
Schedule(s) shall set forth FFRD's requested capacity ("Requested
Capacity") and may provide for a minimum monthly usage commitment
("Minimum Monthly Usage Commitment") for a specified monthly billing
period or periods (see "Minimum Service Term" paragraph 2 B (b)
below) provided in the Schedule(s), or for the Service Term as
provided in Paragraph 8 below. Where so provided, Minimum Monthly
Usage Commitment shall mean FFRD's agreed upon usage of the
INFINICOM Services designated in the Service Schedule(s) at the Tier
4 rates specifically set forth therein. Otherwise the rates set
forth in Service Schedule(s) shall be Tier 3 rates, where provided,
or the Tier 2 or Tier 1 rates. Rates set forth in Service Schedules
do not include any applicable taxes (including without limitation,
federal, state or local use, excise, gross receipts, sales and
privilege taxes) or duties, fees or similar liabilities and
tax-related surcharges on Local Services.
b) MINIMUM SERVICE TERM. The Schedule(s) may provide for a minimum
service term ("Minimum Service Term") within the Service Term during
which FFRD agrees to meet its Minimum Monthly Usage Commitment. The
Minimum Service Term may also include one or more ramp-up periods
(monthly, unless otherwise specified) for each of which there shall
be a specified Minimum Monthly Usage Commitment until the Minimum
Monthly Usage Commitment for the Minimum Service Term shall be
reached and maintained. Any Tier 4 and Tier 3 rates for Local
Services provided for in the attached Schedule(s) shall remain in
effect for the Service Term or until this Agreement is otherwise
terminated or modified. Upon the expiration of the Minimum Service
Term for any Local Services in question, the Local Services will
continue to be provided on a month to month basis subject to
termination by either party upon 30 days prior written notice to the
other party. FFRD shall be liable to pay INFINICOM for those charges
related to all such Local Services in question whether (i) during
the Minimum Service Term or (ii) any month-to-month continuation
thereof, on the terms and at the rates in effect as of the next to
last month of the Minimum Service Term for such Local Services,
without pro-ration.
c) UNDER-UTILIZATION: Where Minimum Monthly Usage Commitments are
agreed to, if FFRD's use of INFINICOM Services is less than the
Minimum Monthly Usage Commitment for that month, FFRD will pay the
amount billed plus the difference between the amount billed and the
charges based upon the Minimum Monthly Usage Commitment for the
month in question, including for any Ramp Period.
d) LOCAL SERVICES USAGE FORECAST: To enable INFINICOM adequately to
forecast FFRD's demand for Local Services capacity, FFRD shall
provide INFINICOM with a forecast of projected usage ("Local
Services Usage Forecast") for any month where greater than 200,000
new subscribers are projected. (referred to as a "High Growth
Month"). The forecast shall be delivered to InfiniCom at least three
months prior to the beginning of the High Growth Month.
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e) LOCAL SERVICES SURCHARGE: INFINICOM reserves the right to impose a
monthly surcharge on Local Services ("Local Services Surcharge") to
each High Growth Month in the amount of $0.13 for each new
subscriber above 80,000 new subscribers in such High Growth Month if
FFRD does NOT submit a Local Services Usage Forecast or (b) in
excess of 125% of the FFRD's Local Services Usage Forecast for such
High Growth Month.
3. RATES AND ADDITIONAL TERMS. FFRD shall pay the rates and charges for
INFINICOM Services set forth herein and in the Service Schedule(s) and
Exhibit(s) thereto attached to this Agreement and FFRD expressly agrees
to the additional terms and conditions set forth in the Service
Schedule(s) and Exhibit(s).
4. SECURITY
(a) None
(b)Nothing contained herein shall limit or be interpreted to limit
INFINICOM's right to require, in INFINICOM's sole discretion,
alternative or additional security from FFRD which shall be
reasonable and consistent with industry standards. FFRD's failure or
refusal to provide such alternative or additional security upon
INFINICOM's reasonable request therefor may result in the
cancellation of this Agreement and the INFINICOM Service for cause.
The security arrangements provided for hereunder shall survive the
expiration of the Service Term, as defined herein, and shall remain
in effect so long as FFRD remains a user or has any outstanding
balance due for use of INFINICOM Services.
5. PAYMENT.
(a)In addition to any of the other payment or security provisions
hereof, FFRD shall pay the charges as defined in this Agreement and
in the attached Service Schedule(s) within five (5) business days of
their execution by FFRD.
(b)Unless and except as special payment terms are provided for in the
Service Schedule(s), FFRD shall pay INFINICOM for all INFINICOM
Service(s) with immediately available funds such as via bank wire
transfer or other means acceptable to INFINICOM and received by
INFINICOM no later than the fifth (5th) business day after delivery
of INFINICOM's invoice therefor (the "Payment Due Date"). INFINICOM
shall issue its invoice on Tuesday of each week, or if Tuesday is
not a Business Day (as herein defined), the next Business Day. As
defined in this Agreement, a "Business Day" is Monday through Friday
except nationally recognized Holidays. The invoice is considered
delivered the following Business Day after acceptance by Federal
Express, UPS or US Mail providing for next day delivery to the
address given for billing by FFRD as referenced in Paragraph 12 of
this Agreement. The invoice will contain a paper summary and a
CD-ROM detail of call records, adjustments, payments and other
relevant transactional data.
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(c)In the event FFRD fails to pay the invoice amount or any surety or
deposit amount in full by the date due for such invoice, surety or
deposit, INFINICOM shall have the right, after giving FFRD five (5)
Business Days prior written notice, to suspend all or any portion of
the Local Services to FFRD until such time as FFRD has paid in full
all amounts then due, including any late fees. Following such
payment, INFINICOM shall be required to reinstate Local Services to
FFRD only upon provision by FFRD to INFINICOM of satisfactory
security to assure FFRD's ability to pay for Local Services and
FFRD's advance payment of the costs of reinstating such Local
Services which shall be reasonable and customary. If FFRD fails to
make to INFINICOM such payment, including any required security and
reinstatement costs within thirty (30) days from the suspension of
service, FFRD will be deemed to have canceled the suspended
International Service effective as of the date of Suspension.
Exercise of its rights hereunder shall not limit or preclude
INFINICOM from exercising any other rights available to it pursuant
to this Agreement.
Notwithstanding notice of termination, FFRD further agrees that it will
remain responsible for all charges incurred during the period following
transmission of the above-referenced notification and prior to the
actual termination of the service by INFINICOM.
6. DISPUTE RESOLUTION/BILLING DISPUTES.
Except as otherwise provided herein, any claims arising out of or
related to this Agreement, shall be made within forty-five (45) days of
their occurrence except for billing discrepancies which shall be
presented in writing to INFINICOM within five (5) business days of the
date of delivery of the invoice in question or such billing
discrepancies shall be deemed barred and INFINICOM shall not be
obligated to consider same. If such claims cannot be resolved by
informal discussion, they shall be settled by binding arbitration.
Neither party may seek injunctive relief of any kind prior to the
confirmation of an arbitration award, except that INFINICOM may seek
injunctive relief against FFRD for violation of Paragraph 19 herein.
Any claims made after forty-five (45) days of the occurrence giving
rise to such claims shall be barred.
7. TERMINATION FOR INSOLVENCY.
a) In the event FFRD becomes or is declared insolvent or bankrupt by a
court of competent jurisdiction, is the subject of any proceedings
related to its liquidation, insolvency or for the appointment of a
receiver or similar officer for it, makes an assignment for the
benefit of all or substantially all of its creditors, or enters into
an agreement for the composition, extension, or readjustment of all
or substantially all of its obligations, INFINICOM may, by giving
five (5) business days written notice thereof to FFRD, terminate
this Agreement without liability or obligation, in whole or in part,
as of a date specified in such notice of termination.
4 of 4
b) In the event INFINICOM becomes or is declared insolvent or bankrupt,
is the subject of any proceedings related to its liquidation,
insolvency or for the appointment of a receiver or similar officer
for it, makes an assignment for the benefit of all or substantially
all of its creditors, or enters into an agreement for the
composition, extension, or readjustment of all or substantially all
of its obligations, FFRD may, by giving five (5) business days
written notice thereof to INFINICOM, terminate this Agreement
without liability or obligation, in whole or in part, as of a date
specified in such notice of termination.
8. TERM.
The service term ("Service Term") shall begin upon execution and
delivery of this Agreement by both parties hereto, as of July 2, 2004
("Effective Date") and will continue for a period of forty-eight (48)
months therefrom. At the end of the Service Term, and at the end of
each renewal period provided for in this paragraph, the Service Term
shall be automatically renewed for an additional Service Term, unless
either party shall have elected not to renew this Agreement, by
providing the other party at least sixty (60) days written notice prior
to the expiration of the then current Service Term. The Service
Schedule(s) may provide for a Minimum Service Term and Ramp Period, and
for a "FFRD of Service Date" which shall be the later of the date
FFRD's designated date to commence service (the "Requested Service
Date") as set forth in the Schedule(s) or the date the particular Local
Services first become available.
9. EXPIRATION OF TERM.
Upon expiration of the Service Term, and unless otherwise provided in
the Schedule(s), FFRD shall be fully subject to all the terms and
conditions, including standard Tariff rates, set forth in the
applicable Tariff for INFINICOM Service(s) received by FFRD after such
expiration.
10. TERMINATION LIABILITY.
None.
11. NONDISCLOSURE.
FFRD shall not disclose to any third party during this Agreement, or
during the three (3) year period thereafter, any of the terms and
conditions set forth in this Agreement, including, without limitation,
information regarding INFINICOM's transmission network, termination
agreements and methods of conducting business, unless such disclosure
is lawfully required by any federal governmental agency or is otherwise
required to be disclosed by law or is necessary in any proceeding
establishing rights and obligations under this Agreement. INFINICOM
reserves the right to terminate this Agreement immediately upon
delivering written notice (including copies of any relevant evidence
supporting such claim) to customer of any un-permitted third party
disclosure hereunder.
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12. NOTICES.
All notices, reports and other communications pursuant to or in
connection with this Agreement shall be deemed given on the fifth (5th)
business day after mailing by registered or certified mail (return
receipt requested) with proper postage prepaid. Notice shall be deemed
given on the second (2nd) business day if such notice is delivered for
mailing to a United States Post Office prior to 2:30pm local time of
sender or delivered to Federal Express, Airborne Express or United
Parcel Service prior to 4:00pm local time of sender for next day
delivery. Alternately, notice shall be deemed given when transmitted by
facsimile, provided that (a) the facsimile transmission takes place not
later than 1:30 p.m. Pacific Time on Business Days, and (b) that
facsimile notice is in conjunction with prepaid overnight mail or
courier service as described above. All notices to a party shall be at
the addresses and facsimile numbers specified below or such other
address and numbers as either party may hereafter designate by notice
in the same manner:
Notice Delivery Addresses
If to FFRD:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
FoneFriend, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to INFINICOM Communications Corporation:
▇▇▇▇▇ ▇▇▇▇▇▇▇
InfiniCom Networks, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
13. SURCHARGE EXEMPTION. When applicable, FFRD shall certify that any
special access lines used in connection with services under this
Agreement terminate in a device not capable of interconnecting
INFINICOM Services with the local exchange network or are surcharge
exempt from the special access surcharge.
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14. TAXES/TAX EXEMPTION.
(a)FFRD acknowledges and agrees that all Rates and charges billed to
FFRD are computed exclusive of any applicable federal, state or
local taxes, whether use, excise, gross receipts or sales taxes,
duties, fees or similar liabilities because of the INFINICOM
Services furnished to FFRD ("additional Charges"). Unless exempt,
FFRD agrees to pay all such Additional Charges (other than INFINICOM
general income or property taxes) in addition to all other charges
provided for under this Agreement.
(b)If FFRD claims an exemption, FFRD shall provide certification that
it is exempt from federal, state, and/or local taxes.
15. GOVERNING LAW. This Agreement, including all matters relating to the
validity, construction, performance and enforcement thereof, shall be
governed by the laws of the State of California without giving
reference to its principles of conflicts of law, except to the extent
the Communications Act of 1934, as amended, and as interpreted and
applied by the Federal Communications Commission, applies.
16. ASSIGNMENT.
This Agreement shall be binding on FFRD and its respective successors
and assigns. FFRD may not assign this Agreement, whether by operation
of law or otherwise, without the prior written consent of INFINICOM,
which consent shall not be unreasonably withheld, and any un-permitted
attempted assignment shall be void. Not subject to shares issued
pursuant to this transaction, INFINICOM may terminate this Agreement
without liability on five (5) business days written notice in the event
that FFRD undergoes a merger involving a change of control, or divests
itself of all or a substantial portion of its telecommunications
business or undergoes a change of more than fifty percent (50%) of its
ownership or management, or leverage or sale occurs involving more than
fifty percent (50%) of FFRD's assets or FFRD's minutes of use volume.
17. NO WAIVER.
No waiver of any of the provision of this Agreement shall be binding
unless it is in writing and signed by both parties. The failure of
either party to insist on the strict enforcement of any provision of
this Agreement shall not constitute a waiver of any provision and all
terms shall remain in full force and effect.
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18. INFINICOM SERVICES - GENERAL PROVISIONS
a) In order to be eligible to purchase INFINICOM Services ( hereinafter
"Services" ):
1) FFRD shall comply with section 64.1100 of the FCC's Rules and
Regulations, as well as other applicable laws or regulations
pertaining to the sale and delivery of telecommunications service(s)
to FFRD's customers or any party having the use of the INFINICOM
Services through FFRD (collectively "FFRD Parties"). INFINICOM shall
not be liable to FFRD Parties for any claim, liability or expense
asserted by those customers in connection with FFRD's sale or
delivery of such service(s) and FFRD agrees to indemnify and hold
INFINICOM and its agents, employees, affiliates, parents and
subsidiaries, including any third-party provider or operator of
facilities employed in the provision of INFINICOM Services to FFRD,
harmless from and against any and all claims, demands, suits,
actions, losses, damages, assessments or payments which may be
asserted by FFRD or FFRD Parties. In the event FFRD violates any FCC
or other applicable law or regulation pertaining to the sale or
delivery of INFINICOM Services, INFINICOM may terminate this
Agreement on not less than five (5) days written notice. In
addition, FFRD shall indemnify and hold INFINICOM harmless from any
actions, claims, suits or damages arising out of FFRD's violation or
alleged violation of any FCC or other applicable law or state
regulation, and FFRD shall pay all attorney fees and costs incurred
by INFINICOM in connection with such actions, claims, suits or
damages.
2) FFRD agrees that it will obtain and maintain any and all approvals
to resell INFINICOM Services hereunder from the FCC, including
requirements imposed by Section 214 of the Communications Act of
1934, as amended, and any state regulatory bodies. In the event FFRD
fails to obtain or maintain the appropriate approvals, INFINICOM
shall not be liable for any delay or failure to provide INFINICOM
Services.
3) FFRD shall have sole responsibility for interacting with its
customers in all matters pertaining to service, including the
placing and handling of service orders, service installation,
operation and termination, dispute handling and resolution, and
billing and collection matters. INFINICOM shall incur no obligation,
nor shall it be deemed to have any obligation, to interact with
FFRD's customers for any reason or purpose, FFRD shall cooperate
with INFINICOM as necessary to address and resolve service-related
issues and problems and shall impose upon its customers an
obligation to be cooperative with FFRD or INFINICOM in addressing
and resolving service related issues, problems and disputes.
b) Without limitation, if customer fails to abide by the requirements
in Paragraph 18(a) above, such failure shall be regarded as a
material breach of this Agreement and INFINICOM may terminate this
Agreement on five (5) business days written notice.
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c) FFRD UNDERSTANDS AND ACCEPTS THAT, AS PART OF INFINICOM'S NORMAL
BUSINESS POLICY AND PRACTICES AND ITS OBLIGATIONS UNDER LAW,
INFINICOM WILL PROVIDE ITS SERVICES TO THE PUBLIC AND WILL ENGAGE IN
EXTENSIVE MARKETING EFFORTS IN ATTEMPT TO SELL ITS SERVICES TO THE
PUBLIC AND THAT SUCH EFFORTS WILL RESULT IN ACTIVE COMPETITION WITH
FFRD FOR THE BUSINESS OF USERS WHO ARE FFRD'S CUSTOMERS OR
PROSPECTS. ACCORDINGLY, FFRD FURTHER UNDERSTANDS AND ACCEPTS THAT
SUCH COMPETITION BY INFINICOM IS IN ALL RESPECTS FAIR AND PROPER AND
THAT FFRD SHALL NOT COMPLAIN, NOR BE HEARD TO COMPLAIN, OF BUSINESS
LOST TO INFINICOM. UNDER NO CIRCUMSTANCE SHALL ANY INFERENCE BE
DERIVED THAT INFINICOM'S ENTRY INTO THIS AGREEMENT WITH FFRD MEANS
THAT INFINICOM WILL RESTRICT ITS EFFORTS TO COMPETE AGAINST FFRD IN
ANY WAY.
d) FFRD understands and accepts that no fiduciary relationship arises
by virtue of this Agreement and that, accordingly, INFINICOM incurs
none of the obligations that arise in such relationship as an
incident of its fulfilling its obligations under this Agreement.
Further, FFRD understands and accepts that INFINICOM is not an
insurer of profits for FFRD, nor does INFINICOM guarantee the
success of FFRD's business as a result of FFRD's receipt of service
(s) under this Agreement.
e) FFRD agrees to defend and hold INFINICOM free and harmless from any
loss, claim, damage, liability, cost or expense (including without
limitation court costs, legal expenses and counsel fees) that
INFINICOM may become liable for by reason of FFRD's resale or
submission of INFINICOM's Services to FFRD's customers.
19. USE OF NAMES AND MARKS.
Except as required by law, in reselling INFINICOM Services under this
Agreement, FFRD will observe the highest standard of integrity and fair
dealing with members of the public. FFRD agrees to sell and ▇▇▇▇
INFINICOM Service under FFRD's own name, identity or ▇▇▇▇, and FFRD
further agrees not to reference INFINICOM's name or marks in any
context involving its furnishing of services to the public, whether in
connection with the resale of INFINICOM Services or otherwise. If any
violation occurs during the Service Term of this Agreement, such
violation shall be regarded as a material breach of this Agreement and
INFINICOM may terminate this Agreement on five (5) business days
written notice. Furthermore, FFRD agrees to indemnify INFINICOM for any
actions, claims, suits or damages arising out of any allegation that if
proved would cause FFRD to be in breach of this provision and FFRD
shall also pay all reasonable attorney's fees and costs incurred by
INFINICOM due to any actions, claims, suits or damages out of such
allegation.
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20. FORCE MAJEURE.
a) If INFINICOM's performance under this Agreement or any obligation
hereunder is prevented, restricted or interfered with by causes
beyond its reasonable control, including, but not limited to, acts
of God, fire, explosion, vandalism, facilities failure, network
outage, storm or other similar occurrence or any law, order,
regulation , direction, action or request of the United States or
any foreign government, or any state or local government therein,
including any department or agency, commission, court or other
agency or instrumentality of any one or more of said governments, or
of any civil or military authority, or by national emergency,
insurrection, riot, war, strike, lockout or work stoppage, vendor or
third-party breach or delay, then INFINICOM shall be excused from
such performance on a day-to-day basis for the duration of such
restriction or interference. INFINICOM shall use all reasonable
efforts under the circumstances to avoid or remove such causes of
non-performance and shall proceed to perform with reasonable
dispatch whenever such causes are removed or cease. If such
conditions shall continue for a period of ninety (90) days or more,
INFINICOM shall have the option of terminating this Agreement.
b) If FFRD's performance under this Agreement or any obligation
hereunder is prevented, restricted or interfered with by causes
beyond its reasonable control, including, but not limited to, acts
of God, fire, explosion, vandalism, facilities failure, network
outage, storm or other similar occurrence or any law, order,
regulation , direction, action or request of the United States or
any foreign government, or any state or local government therein,
including any department or agency, commission, court or other
agency or instrumentality of any one or more of said governments, or
of any civil or military authority, or by national emergency,
insurrection, riot, war, strike, lockout or work stoppage, vendor or
third-party breach or delay, then FFRD shall be excused from such
performance on a day-to-day basis for the duration of such
restriction or interference. FFRD shall use all reasonable efforts
under the circumstances to avoid or remove such causes of
non-performance and shall proceed to perform with reasonable
dispatch whenever such causes are removed or cease. If such
conditions shall continue for a period of ninety (90) days or more,
FFRD shall have the option of terminating this Agreement.
21. WARRANTY.
INFINICOM will use reasonable efforts to maintain its overall network
quality. And except as may be agreed to in any Service Schedules, the
quality of INFINICOM Services provided hereunder shall be consistent
with other common carrier industry standards, the regulations of United
States and foreign government regulations governing same, and sound
business practices in connection with the termination of international
calls in foreign countries. INFINICOM MAKES NO OTHER WARRANTIES EXPRESS
OR IMPLIED ABOUT THE INFINICOM SERVICES PROVIDED HEREUNDER, INCLUDING
BUT NOT LIMITED TO ANY WARRANTY OR MERCHANTABILITY FOR A PARTICULAR
PURPOSE OR USE.
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22. LIMITED LIABILITY.
IN NO EVENT WILL EITHER PARTY HERETO BE LIABLE TO THE OTHER PARTY FOR
ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL LOSSES OR DAMAGES,
INCLUDING WITHOUT LIMITATION, LOSS OF REVENUE, LOSS OF CUSTOMERS OR
CLIENTS, LOSS OF GOODWILL OR LOSS OF PROFITS ARISING IN ANY MANNER FROM
THIS AGREEMENT AND THE PERFORMANCE OR NON-PERFORMANCE OF OBLIGATIONS
HEREUNDER. THE LIABILITY OF INFINICOM WITH RESPECT TO THE INSTALLATION
(INCLUDING DELAYS IN CONNECTION THEREWITH), PROVISION, TERMINATION,
MAINTENANCE, REPAIR, INTERRUPTION OR RESTORATION OF ANY SERVICE OR
FACILITIES OFFERED UNDER THIS AGREEMENT SHALL NOT EXCEED AN AMOUNT
EQUAL TO THE MINIMUM MONTHLY USAGE CHARGE APPLICABLE UNDER THIS
AGREEMENT TO THE PERIOD DURING WHICH SERVICES WERE AFFECTED CALCULATED
AS THE USAGE CHARGE TIMES THE LENGTH IN MINUTES THAT SERVICE WAS
AFFECTED. FOR THOSE SERVICES WITH MONTHLY RECURRING CHARGES, THE
LIABILITY TO INFINICOM IS LIMITED TO AN AMOUNT EQUAL TO THE
PROPORTIONATE MONTHLY RECURRING CHARGES FOR THE PERIOD DURING WHICH
SERVICE WAS AFFECTED.
23. NO WAIVER.
No term or provision of this Agreement shall be deemed waived and no
breach or default shall be deemed excused unless such waiver, consent
or excuse shall be in writing and signed by the party waiving,
consenting to or excusing same. No such waiver, consent or excuse with
regard to any provision, breach or default shall be deemed an express
or implied waiver, consent to or excuse of any other provision, breach
or default unless expressly set forth in a writing executed by the
party to be charged with same.
24. PARTIAL INVALIDITY.
a) If a provision of this Agreement shall be deemed to be invalid,
illegal or unenforceable, the remaining portions of this Agreement
shall be deemed to continue in full force and effect and such
provision shall be deemed deleted, provided that the parties agree
to negotiate in good faith any adjustments necessitated by such
deletion.
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b) GOVERNMENT ACTION.
If any material rate or term contained herein and relevant to the
INFINICOM Services provided is substantially changed or found to be
unlawful, or the relationship between the parties is found to be
unlawful by the order of the highest court having competent
jurisdiction over the subject matter and parties, or international
regulatory body, a foreign government regulatory body, the dominant
carrier or provider of termination services in a particular country
Federal Communications Commission, or other federal, state or local
government authority, then, upon ten (10) days prior written notice,
either party shall have the right, without liability to the other, to
cancel the rate or service, or portion thereof, affected by such
action.
25. RELATIONSHIP OF PARTIES.
No partnership or joint venture between the parties is created hereby,
nor by providing and using the INFINICOM Services is a joint
communications service being offered to third parties, and the parties
agree that this Agreement, to the extent that it is subject to
regulation by the Federal Communications Commission, is an intercarrier
agreement which is not subject to the filing requirements of Section
214(a) of the Communications Act of 1934 [47 USC ss 214(a)] as
implemented in 47 CFR ss 43.51 and amendments thereto, if any.
26. CONFIDENTIALITY.
The provisions hereof shall be and remain confidential between the
parties, including their agents, employees, officers, directors, and
shareholders and shall not be disclosed unless subject to discovery or
legal process, and shall not be disclosed to any such parties,
including their brokers, lenders, insurance carriers or prospective
purchasers unless they have agreed in writing to maintain such
confidentiality or are otherwise bound to do so by the rules governing
their profession. Any disclosure hereof required by legal process shall
only be made after prior notice to the non-disclosing party sufficient
to provide same with a reasonable opportunity to seek an appropriate
protective order or injunction. Violation of this provision by a party
or its agents shall entitle the affected party, at its option, to seek
and obtain injunctive relief without objection by the disclosing party
or a requirement by same of a showing of irreparable harm or injury and
without bond.
//
//
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27. GENERAL.
a) INDUSTRY TERMS. Words having well-known technical or trade meaning
shall be so construed. The listing of items shall not be taken to be
exclusive, but shall include other items, whether similar or
dissimilar to those listed, as the context reasonably requires.
b) HEADINGS. The descriptive headings are convenience only and shall
not affect the construction of the Agreement, unless to the extent
reasonably intended.
c) CONSTRUCTION. No rule of construction requiring interpretation
against the party drafting this Agreement shall apply in its
interpretation and the parties shall be deemed to have drafted same
jointly.
28. ENTIRE AGREEMENT; AMENDMENTS.
This Agreement including any accompanying Service Schedule(s) shall be
valid only if signed by FFRD by June 6, 2004 (the "Offer Expiration
Date"). Any and all prior or contemporaneous offers, agreements,
representations and understandings made to FFRD, whether written or
oral, are hereby superseded. Exclusive of any Tariff modifications
initiated by INFINICOM, once this Agreement has been executed by FFRD
and INFINICOM, the provisions hereof shall be binding on the parties
hereto.
By their signatures below, the parties hereby affirm the foregoing, including
schedules and exhibits, as their entire agreement with regard to the subject
matter hereof.
For InfiniCom Networks, Inc. For FoneFriend, Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------- ---------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇, By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Chief Executive Officer Chairman of the Board
Date: June 6, 2004 Date: June 6, 2004
------------------------- ---------------------
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INFINICOM Communications Corporation ("INFINICOM") agrees to provide and FFRD.
("FFRD") agrees to accept the Service described below subject to the terms and
conditions set forth herein, the INFINICOM and Service Agreement FON-04-1
between INFINICOM and FFRD. Neither INFINICOM or FFRD shall be obligated with
respect to the Service described below, or any terms that do not conform with
the terms of said Agreement until the Service Schedule is subscribed to by an
authorized representative of INFINICOM and FFRD
REQUESTED SERVICE DATE July 2, 2004
TOTAL REQUESTED CAPACITY 50,000 VoIP registered accounts
REQUESTED NETWORK CONNECTION See Service Schedule FON-04-1-1
[INFORMATION REDACTED]
In witness whereof, the parties have executed this Service Schedule as of the
dates written below.
InfiniCom Networks, Inc. FoneFriend, Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------ -----------------------
By ▇▇▇▇ ▇. ▇▇▇▇▇▇, CEO By ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
For InfiniCom Networks, Inc. For FoneFriend, Inc.
Date: June 6, 2004 Date: June 6, 2004
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APENDIX 9
STOCK ACQUISITION AGREEMENT
THIS STOCK ACQUISITION AGREEMENT ("Agreement") is made and entered into
this 6th day of June, 2004, by and between InfiniCom Networks, Inc., a
California corporation ("InfiniCom"), and FoneFriend, Inc., a Delaware
corporation (the "Company").
R E C I T A L S
A. Company wishes to sell to InfiniCom, and InfiniCom wishes to
purchase from Company, the sum of 96,428,571 shares of the Company's common
stock (the "Shares"), subject to performance of certain covenants and
satisfaction of certain conditions which are hereinafter set forth, including
material covenants and conditions relating to a Marketing and Services Agreement
and a Carrier Agreement, among other things, all as described and incorporated
herein and to which this Agreement is attached as Appendix 9; and
B. The Shares will constitute a majority of the outstanding shares of
capital stock of the Company and will vest in InfiniCom control of the Company
within the meaning of the Securities Act of 1933, as amended; and
C. The Company and InfiniCom are executing and delivering this
Agreement in reliance upon the exemption from securities regulation afforded by
Section 4(2) of the Securities Act (as defined in Section 3) and Rule 506 under
Regulation D; and
D. The Company, its officers, directors and controlling shareholders
desire to assure themselves that certain terms, conditions and covenants are
agreed to as follows to assure the mutual beneficial interests of the parties
signatory hereto;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the Company and
InfiniCom agree as follows:
A G R E E M E N T
1. INCORPORATION OF RECITALS. The foregoing Recitals are incorporated
herein by this reference.
2. SALE AND PURCHASE OF THE SHARES. Subject to the terms and conditions
hereof, at the Closing of the transaction with InfiniCom, the Company agrees to
sell to InfiniCom, and InfiniCom agrees to purchase from Company, the Shares for
an aggregate purchase price of $6,750,000.00 (the "Purchase Price"). The
Purchase Price is to be applied to the acquisition of a 50,000 customer base,
which Company is purchasing from InfiniCom for cash and the Shares.
3. CONDITIONS TO CLOSING. By execution of this Agreement, and upon the
Closing, InfiniCom covenants that the following conditions have been met:
3.1 InfiniCom's satisfactory completion of its due diligence
review of the Company.
3.2 InfiniCom's approval of the transfer and sale of a certain
Technology License Agreement, dated April 30, 2001, between the Company and
FoneFriend Systems, Inc. ("FSI") and other assets described therein, as well as
all assets developed or owned by the Company in connection with the Company's
"FoneFriend" technology and its pursuit of related business activities by the
Company (collectively, the "FoneFriend Technology Assets"), in exchange for such
consideration from a third party entity that is equal to or greater in value
than the Company's book value of such FoneFriend Technology Assets. Said
consideration shall be distributed, on a pro-rata basis, to the shareholders of
the Company existing just prior to the Closing, specifically excluding InfiniCom
and its Shares in such distribution. Such transfer and sale shall occur as soon
as practicable after the Closing.
3.3 InfiniCom's adoption and ratification of the Company's
Articles of Incorporation, By-Laws and all material contracts including, but not
limited to, indemnification and other agreements entered into with certain
officers and directors and controlling shareholders of the Company as filed with
the Securities and Exchange Commission ("SEC").
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4. CLOSING.
4.1 The purchase and sale of the Shares (the "Closing") shall
take place at 12:00 p.m., Pacific Standard Time, on or before July 1, 2004 at
InfiniCom's corporate offices or such other time and date as the parties may
agree. At such Closing, Company shall deliver, among other items, a certified
list of the then existing shareholders of the Company. In no event shall the
Closing take place after August 1, 2004, unless the parties expressly agree
otherwise in a written amendment to this Agreement.
4.2 From time to time after the Closing, and without further
consideration, the parties will promptly execute and deliver such other
instruments of transfer and take such other actions as either party may
reasonably request, in order to more effectively transfer to InfiniCom the
Shares and otherwise consummate the transactions contemplated by this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF INFINICOM. InfiniCom hereby
represents and warrants to Company as follows:
5.1 ENFORCEABILITY. This Agreement shall constitute the valid
and legally binding obligation of Company, enforceable in accordance with its
terms except as limited by the effect of bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting the rights of
creditors generally and by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies and in the event of
any conflict between the agreements between the parties this Agreement as well
as provisions contained in the Investor's Representation Letter shall be
controlling.
5.2 VALIDITY; TITLE. The Shares, when sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid, and nonassessable, and will
be free of restrictions on transfer under applicable state and federal
securities laws. Company owns, beneficially and of record, good and marketable
title to the Shares, free and clear of all security interests, liens, adverse
claims, encumbrances, proxies, options or stockholders' agreements. At the
Closing, Company will convey to InfiniCom good and marketable title to the
Shares and its technology, free and clear of any security interests, liens,
adverse claims or encumbrances.
5.3 ORGANIZATION AND GOOD STANDING. InfiniCom is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California and is qualified to do business as a foreign corporation in
each jurisdiction where the failure to be so qualified would have a material
adverse effect on the Company.
5.4 CAPITALIZATION. All of InfiniCom's issued and outstanding
shares of its common stock were duly authorized for issuance and are validly
issued, fully paid and non-assessable. There are no outstanding options,
warrants or other rights to acquire capital stock that would adversely affect
the Company.
5.5 NO CONFLICTS. The execution and consummation of this
Agreement by InfiniCom of the transactions contemplated hereby, and compliance
by InfiniCom with any of the provisions hereof, will (a) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, contract, agreement or other instrument or
obligation to which InfiniCom is a party or by which InfiniCom or its property
may be bound or (b) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to InfiniCom.
5.6 INVESTMENT AND RELATED REPRESENTATIONS.
(a) InfiniCom represents and warrants to, and
covenants with, the Company that: (i) InfiniCom is knowledgeable, sophisticated
and experienced in making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that involved in
its acquisition of the Shares hereunder, including investments in securities
issued by the Company and comparable entities, and has requested, received,
reviewed and considered all information it deems relevant in making an informed
decision to acquire the Shares, including discussions with Company management
and the review by InfiniCom's General Counsel of all disclosures by the Company
in its filings with the Securities and Exchange Commission; (ii) InfiniCom is
acquiring the Shares set forth herein in the ordinary course of its business and
for its own account for investment only and with no present intention or view
toward the public sale or distribution thereof, and no arrangement or
understanding exists with any other persons regarding the public sale or
2
distribution of such Shares (this representation and warranty not limiting
InfiniCom's right to sell such Shares in compliance with an exemption from
registration under the Securities Act); (iii) InfiniCom will not, directly or
indirectly, except (as to each of (A), (B) and (C)) in compliance with and only
to the extent required to comply with the Securities Act, the Rules and
Regulations and such other securities or Blue Sky laws as may be applicable, (A)
offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to
buy, purchase or otherwise acquire or take a pledge of) any of the Shares, (B)
engage in any short sale which results in a disposition of any of the Shares by
InfiniCom, or (C) hedge the economic risk of InfiniCom's investment in the
Shares; (iv) InfiniCom is an "accredited investor" within the meaning of Rule
501(a) of Regulation D promulgated under the Securities Act; and (v),
InfiniCom's representations hereunder are relied upon by the Company as being
complete, true and correct in all material respects as of the date hereof and
will be true and correct in all material respects as of the effective date of
the Closing, and InfiniCom will notify the Company as promptly as possible of
any material change in any such information; (vi) InfiniCom has, in connection
with its decision to acquire the number of Shares set forth herein above, relied
solely upon its own investigation of the Company's books and records, including
its review of securities filings, and is not relying on discussions with the
management of the Company conducted prior to Closing.
(b) InfiniCom understands that the Shares are being
offered to it in reliance upon specific exemptions from the registration
requirements of Securities Act, the Rules and Regulations and state securities
laws, and that the Company is relying upon the truth and accuracy of, and
InfiniCom's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of InfiniCom set forth herein in order to
determine the availability of such exemptions and the eligibility of InfiniCom
to acquire the Shares.
(c) InfiniCom understands that its investment in the
Shares involves a significant degree of risk and that the market price of the
Company's Common Stock has been and continues to be volatile and that no
representation is being made as to the future value of the Common Stock.
InfiniCom has the knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of an investment in the Shares
and has the ability to bear the economic risks of an investment in the Shares.
InfiniCom has been afforded the opportunity to ask questions of the Company's
management regarding such matters and acknowledges that it shall rely solely on
such inquiries and any other due diligence investigation conducted by InfiniCom
or any of its advisors or representatives with respect to its entering into this
Agreement.
(d) InfiniCom understands that neither the SEC, nor
any United States federal or state agency or any other government or
governmental agency has passed upon or made any recommendation or endorsement of
the Shares.
(e) InfiniCom understands that the Shares may bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for the Shares):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION. THE SECURITIES MAY NOT
BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT
TO RULE 144 UNDER THE SECURITIES ACT."
(f) InfiniCom further represents and warrants to, and
covenants with, the Company that (i) InfiniCom has full right, power, authority
and capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement; (ii) upon the execution
and delivery of this Agreement, this Agreement shall constitute a legal, valid
and binding obligation of InfiniCom, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); (iii) the execution, delivery and performance
of this Agreement by InfiniCom and the consummation by InfiniCom of the
transactions contemplated hereby will not (A) conflict with or result in a
violation of any provision of InfiniCom's certificate of incorporation or other
organizational document, or (B) violate or conflict with, or result in a breach
of any provision of, or constitute a default under, or give to others any rights
of termination, amendment, acceleration or cancellation of, any agreement,
indenture or other instrument to which InfiniCom is a party, or (C) result in a
3
violation of any law, rule, regulation, order, judgment or decree applicable to
InfiniCom, except any such violation that would not have a material adverse
effect on the ability of InfiniCom to consummate the transactions contemplated
by the Agreement; (iv) InfiniCom is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self-regulatory agency in order for it
to execute, deliver or perform any of its obligations under this Agreement in
accordance with the terms hereof, except for such consents, authorizations,
orders, filings or registrations that have already been obtained; (v) InfiniCom
is not a party to any litigation against the Company; and (vi) InfiniCom
understands that nothing in this Agreement or any other materials presented to
InfiniCom in connection with its acquisition and/or disposition of the Shares
constitutes legal, tax or investment advice by the Company. InfiniCom has
consulted its own legal, tax and investment advisors, as it, in its sole
discretion, has deemed necessary or appropriate in connection with the purchase
of the Shares.
(g) InfiniCom acknowledges the following disclosure,
which is set forth herein as required
pursuant to Section 25102(a) of the California Corporate Securities Law of 1968:
"THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS
NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY
PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL,
UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100,
25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES
TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING
OBTAINED, UNLESS THE SALE IS SO EXEMPT."
5.7 GOVERNMENTAL CONSENTS. All consents, approvals, orders,
authorizations or registrations, qualifications, designations, declarations or
filings with any U.S., federal or state governmental authority on the part of
InfiniCom required in connection with the consummation of the transactions
contemplated herein shall have been obtained prior to and be effective as of the
Closing, except that InfiniCom shall be required to file with the SEC following
the Closing a Schedule 13D and such other documents as may be required by the
Exchange Act.
5.8 THIRD PARTY CONSENTS. All third party consents, approvals,
orders or authorizations required to be obtained by InfiniCom in connection with
the consummation of the transactions contemplated herein have been obtained.
5.9 INDEMNIFICATION. The InfiniCom hereby agrees to indemnify
and hold Company harmless and each of the Company's affiliates and their
respective officers, directors, partners, members, managers, shareholders,
attorneys, employees and agents from and against any and all losses, claims,
damages, judgments, penalties, liabilities and deficiencies, and agrees to
reimburse the other for all reasonable out-of-pocket expenses (including
reasonable fees and expenses of legal counsel), in each case promptly as
incurred by the other, to the extent arising out of or in connection with (a)
any material misrepresentation or material breach of any of his/its
representations or warranties contained in this Agreement or the related
Marketing and Services Agreement, to which this Agreement is attached; (b) any
failure by him/it to perform any of his/its covenants, agreements, undertakings
or obligations set forth in this Agreement, or (c) any operations of the Company
or transactions involving the Company including the purchase of subscribers from
InfiniCom.
6. REPRESENTATIONS AND WARRANTIES OF COMPANY. Company hereby represents
and warrants to InfiniCom as follows:
6.1 ENFORCEABILITY. This Agreement shall constitute the valid
and legally binding obligation of Company, enforceable in accordance with its
terms except as limited by the effect of bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting the rights of
creditors generally and by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
6.2 VALIDITY; TITLE. The Shares, when sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid, and nonassessable, and will
be free of restrictions on transfer other than restrictions on transfer under
this Agreement and the Investment Representation Letter and under applicable
state and federal securities laws. Company owns, beneficially and of record,
good and marketable title to the Shares, free and clear of all security
interests, liens, adverse claims other than those as may be asserted by the
Liquidating Trustee, and those set forth in filings with the Securities and
Exchange Commission ("SEC"). At the Closing, Company will convey to InfiniCom
4
good and marketable title to the Shares, free and clear of any security
interests, liens, adverse claims or encumbrances.
6.3 ORGANIZATION AND GOOD STANDING. Company is a corporation
duly organized, validly existing and in good standing under the laws of Delaware
and is qualified to do business as a foreign corporation in each jurisdiction
where the failure to be so qualified would have a material adverse effect on
Company.
6.4 CAPITALIZATION. The Company is authorized to issue
200,000,000 million shares of common stock, $.001 par value, and 50,000,000
shares of preferred stock, $.001 par value. The Company presently has an
estimated 21,515,944 shares of common stock issued and outstanding and no shares
of preferred stock are issued or outstanding. All of the issued and outstanding
shares of the Company's common stock, including options and warrants to acquire
up to 1,350,000 shares of common stock, were duly authorized for issuance and
the outstanding common shares have been validly issued, fully paid and
non-assessable. There are no outstanding options, warrants or other rights to
acquire the Company's capital stock other than those fully disclosed herein and
in the Company's SEC filings.
6.5 PUBLIC LISTING OF THE COMPANY. The Company has never been
listed on any national stock exchange or national market system in the United
States or elsewhere except the Nasdaq National Market System and the OTC
Bulletin Board.
6.6 GOVERNMENTAL CONSENTS. All consents, approvals, orders,
authorizations or registrations, qualifications, designations, declarations or
filings with any U.S., federal or state governmental authority on the part of
Company required in connection with the consummation of the transactions
contemplated herein shall have been obtained prior to and be effective as of the
Closing, except that InfiniCom shall be required to file with the SEC following
the Closing a Schedule 13D among other filings.
6.6 THIRD PARTY CONSENTS. All third party consents, approvals,
orders or authorizations required to be obtained by Company in connection with
the consummation of the transactions contemplated herein have been obtained.
6.7 DISCLOSURE. The representations and warranties and
statements of fact made by Company in this Agreement are accurate, correct and
complete in all material respects and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements and information contained herein not false or misleading.
7. CERTAIN COVENANTS.
7.1 OFFICER AND DIRECTOR INDEMNIFICATION. InfiniCom hereby
unconditionally indemnifies and holds harmless all of Company's officers and
directors from and against any and all claims, liabilities and actions,
including the reasonable cost of attorney's fees associated therewith, in
connection with any actions taken by such officers and directors previous to the
Closing, including undertakings in connection with negotiating or authorizing
this Stock Acquisition Agreement and the transactions contemplated hereby.
7.2 TRANSFER OF FONEFRIEND TECHNOLOGY ASSETS. InfiniCom hereby
agrees and covenants to approve and cause the Company to transfer or otherwise
sell the FoneFriend Technology Assets as they currently exist to a third party
entity, for a negotiated consideration consisting primarily of stock in an
amount equal to or greater than the book value of such transferred assets, the
closing of such sale transaction to occur as soon as practicable after the
Closing, and agrees thereafter to take all necessary steps to approve the proper
pro-rata distribution of such consideration paid by the purchaser to the
shareholders of the Company, specifically excluding InfiniComs' Shares acquired
hereunder in the calculation of such pro-rata distribution. Such distribution
shall occur as soon as practicable after the closing of the transfer of the
FoneFriend Technology Assets.
7.3 CAPITALIZATION OF THE COMPANY. For a period of twenty-four
months from the Closing, InfiniCom agrees not to undertake any action that will
cause the Company to engage in any recapitalization, restructuring or reverse
split of its issued and outstanding common stock that results in the current
stockholders of the Company, prior to Closing, owning less than five percent of
the total issued and outstanding shares of the Company's capital stock, without
first obtaining a majority vote of the current stockholders of record as of the
date of Closing.
7.4 COST OF INFINICOM'S SERVICE. For a period of [REDACTED]
from the Closing, InfiniCom agrees that its total monthly costs charged to the
Company for licensing, software and hardware services, and support, pursuant to
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the Marketing and Services Agreement and the Carrier Agreement shall not exceed
[REDACTED] of the Company's cash flow derived from the revenue of the 50,000
subscribers acquired by the Company from InfiniCom; provided that the Company
must ▇▇▇▇ the customers a minimum of $[REDACTED]. In sum, InfiniCom guarantees
that the Company will have at least a [REDACTED] % gross profit margin on its
business related solely to the 50,000 customers to be sold by InfiniCom to the
Company hereunder.
7.5 MAINTENANCE OF CUSTOMER BASE. Notwithstanding any
provision contained in the Marketing and Services Agreement to the contrary,
InfiniCom hereby agrees to maintain the customer base of the Company after the
Closing at the level of 50,000 customers, each customer remitting a monthly fee
to the Company in the amount of $15.00, or greater, for a period of fifty-two
weeks.
7.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Notwithstanding any investigation made by any party to this Agreement, all
representations and warranties made by the Company and InfiniCom herein shall
survive the execution of this Agreement, the delivery to InfiniCom of the Shares
being acquired for a period of two years from the Closing.
8. MISCELLANEOUS.
8.1 CUMULATIVE REMEDIES. Any person or entity having any
rights under any provision of this Agreement will be entitled to enforce such
rights specifically, to recover damages by reason of any breach of any provision
of this Agreement, and to exercise all other rights granted by law, which rights
may be exercised cumulative and not alternatively.
8.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not.
8.3 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement or the other documents.
8.4 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts when taken together will constitute one and
the same agreement.
8.5 NOTICES. Any approvals, consents or notices required or
permitted to be sent or given shall be delivered in writing personally or
mailed, certified mail, return receipt requested, to the following addresses and
shall be deemed to have been received within five days after such mailing:
If to InfiniCom: InfiniCom Networks, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Company: FoneFriend, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
With copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, PA
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
8.6 LITIGATION COSTS. If any legal action or any arbitration
or other proceeding is brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, default, or misrepresentation in connection with
any of the provisions thereof, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which such party may be
entitled.
8.7 GOVERNING LAW. This Agreement shall be governed by and
interpreted and construed in accordance with the laws of the State of
California, without regard to the conflicts of laws principles thereof. This
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Agreement is to have been deemed to have been negotiated and prepared jointly by
the parties with the assistance of legal counsel of their choosing and any
uncertainty of ambiguity existing herein, if any, shall not be interpreted
against any party, but shall be interpreted according to the applicable rules of
interpretation for arm's length agreements.
8.8 CONTROLLING DOCUMENT. This Agreement, together with a
related Network Services Agreement, a Marketing and Services Agreement (the
"collective agreements") embodies the entire agreement of the parties hereto in
relation to the acquisition and no other agreement or understanding, verbal or
otherwise, exists between the Parties except as herein expressly set forth
herein. In the event of a conflict or ambiguity by and or between in the
language of these collective agreements, the express provisions of this
Agreement shall be controlling.
8.9 COOPERATION. Following the consummation of the
transactions contemplated hereunder, Company and InfiniCom shall each provide
the other with such assistance, and shall cause their officers, directors and
accountants, as applicable, to provide such assistance, as may reasonably be
requested by the other in connection with (i) the preparation of any tax return
or the conduct of any audit or examination by any taxing authority, or (ii) the
preparation of any periodic report or other filing required to be made to the
Securities and Exchange Commission.
IN WITNESS WHEREOF, each of the parties to this Stock Acquisition
Agreement has executed or caused this Agreement to be executed as of the date
first above written.
"COMPANY"
FONEFRIEND, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Chairman of the Board
"INFINICOM"
INFINICOM NETWORKS, INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇▇▇▇▇▇
Chief Executive Officer
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