MANAGEMENT AGREEMENT
Exhibit
10.1
EXECUTION
VERSION
THIS
MANAGEMENT AGREEMENT (this “Management Agreement”) is made and entered into as
of the 13th
day of October, 2009 by and among Rapid Link, Incorporated, a Delaware
corporation (“Rapid Link”), Telenational Communications, Inc., a Delaware
corporation (“Telenational” and collectively with Rapid Link, the “Rapid
Link/Telenational Entities” or “RTE”) and Blackbird Corporation, a Florida
corporation (the “Manager”). Rapid Link, Telenational and Manager are referred
to individually in this Management Agreement as a “Party” and, collectively, as
the “Parties.”
WITNESSETH:
WHEREAS, Rapid Link and
Manager, along with their principal shareholders, have entered into a Share
Exchange Agreement, dated as of October 13, 2009 (the “Share Exchange
Agreement”) pursuant to which, among other things, Rapid Link will acquire all
outstanding equity securities of Blackbird in exchange for 80% of the
outstanding common stock of Rapid Link (the “Share Exchange”) and certain assets
of Telenational shall be transferred to a wholly-owned subsidiary of Rapid
Link;
WHEREAS, the RTE have been
granted and presently maintain certain federal, state and other Permits (as
defined in the Share Exchange Agreement) that authorize the ownership and
operation of the regulated aspects of the Core Business (as defined in the Share
Exchange Agreement);
WHEREAS, in order to
consummate the transactions contemplated by the Share Exchange Agreement,
applicable Permits and other federal and/or state regulatory requirements
require prior governmental authorizations, notices and consents;
WHEREAS, the Parties desire to
establish terms and conditions pursuant to which the Parties shall, during the
Term (as defined herein), seek to comply with applicable federal and state
regulations and enter into contractual or other legal arrangements necessary for
the consummation of the transactions contemplated by, and as a condition to the
Closing under, the Share Exchange Agreement;
WHEREAS, the RTE desire, in
conformity with the rules and policies of state and federal regulatory, judicial
and other governmental authorities, and the terms and conditions of this
Management Agreement, to enable and permit Manager to provide certain management
services to Telenational and the Core Business during the Term; and
WHEREAS, the Parties desire to
maintain the continued operation of the Core Business, and the associated
billing, collection and administrative functions during the Term all upon and
subject to the terms and conditions contained herein.
NOW, THEREFORE, in consideration of
the above recitals and mutual promises and other good and adequate
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties, intending to be legally bound, agree as follows:
1. Definitions. Any
capitalized term used herein, and not otherwise defined herein, shall have the
meaning assigned to such term in the Share Exchange Agreement. In
addition, as used in this Management Agreement, the following terms shall have
the following meanings:
(a) “A/R”
means all accounts receivable owed to Telenational arising out of products sold
or services provided in connection with the operation of the Core
Business.
(b) “Business
Expenses” means any and all (A) costs, expenses or fees associated with the
operation of the Core Business (whether or not represented by invoices) to the
extent that they arise or are payable at any time during the Term; and (B)
Management Fees (as defined herein), all as set forth in the then current
Budget.
(c) “Effective
Date” means October 19, 2009.
(d) “Telecommunications
Laws” shall mean: (i) the Communications Act of 1934, as amended (47
U.S.C. Section 151 et seq.), the Federal Communications Commission rules and
regulations applicable to the Rapid Link/Telenational Entities, any Subsidiary
of Rapid Link; and (ii) the Telecommunications Laws, rules and regulations of
the various states in which the Rapid Link/Telenational Entities or any
Subsidiary of Rapid Link do business or which are otherwise applicable to the
Core Business.
2. Appointment; Operations
Services.
(a) Appointment. Subject
to the ultimate control of the Core Business by the RTE, Section 6 hereof and
all applicable Laws, including without limitation, all Telecommunications Laws,
the RTE hereby grant to Manager, on the terms and conditions set forth herein
and during the Term, (i) the right to manage and otherwise operate the Core
Business as provided herein, and (ii) the right to perform the Operations
Services (as defined herein) commencing on the Effective Date.
(b) Operations
Services. In addition to the responsibilities undertaken by
Manager as specifically set forth herein, Manager shall provide the operations
services set forth on Exhibit A (collectively, the “Operations Services”)
pursuant to and in accordance with a monthly operations budget prepared by
Manager and approved by the RTE; the monthly operating budget shall be
substantially in the form attached hereto as Exhibit B (the “Budget”); the
initial Budget shall be approved by the parties by October 31,
2009. Notwithstanding the foregoing, Manager may modify the Budget
from time to time with the prior written consent of the RTE, which consent will
not be unreasonably withheld or delayed. Manager shall not take any
actions as part of the Operations Services or otherwise hereunder that would be
outside of the ordinary course of the business of Telenational as conducted as
of the Effective Date without the prior written consent of the RTE.
3. Term. This
Management Agreement shall become effective on the Effective Date and shall
expire on the earlier of: (a) the Closing; and (b) the time of any earlier
termination of the Share Exchange Agreement in accordance with its terms or as
otherwise set forth in this Section 3 (the “Term”). Notwithstanding
any other term or condition of this Management Agreement to the contrary, either
Party may terminate this Management Agreement upon any material breach by the
other Party of its representations, warranties, or covenants contained herein or
in the Share Exchange Agreement and the breaching Party’s failure to cure such
breach within ten (10) Business Days after the delivery of written notice from
the non-breaching Party to the breaching Party of such breach.
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4. Accounts Receivable; Certain
Ongoing Operations.
(a) All A/R
(along with the cash proceeds collected with respect thereto) shall be the
exclusive property of Telenational and shall be a Telenational Asset (except to
the extent such proceeds are used to pay Business Expenses) as set forth in the
Share Exchange Agreement.
(b) For all
A/R, Telenational and Manager may, on such terms and conditions as Telenational
and Manager shall mutually approve, settle and compromise any disputed A/R with
any applicable obligor and/or guarantor thereof.
(c) For all
Business Expenses and accounts payable, Telenational and Manager may, on such
terms and conditions as Telenational and Manager shall mutually approve, settle
and compromise any disputed Business Expenses or accounts payable with any
applicable vendor or supplier and to take any such action
necessary.
(d) On or
before the Effective Date, the RTE shall have established, for the benefit of
Telenational, a bank account at a nationally-recognized banking institution to
serve as the primary funding source for Telenational (the “Funding Account”),
subject to obtaining consent from Laurus (as defined in the Share Exchange
Agreement). The proceeds of all A/R shall be deposited in the Funding
Account and the amounts therein shall be used to satisfy Telenational’s
obligations to pay Business Expenses in accordance with the Budget and as set
forth in Section 4(f). Manager shall also have access to the Funding
Account, and one or more representatives of Manager shall be an authorized
signatory with respect to the Funding Account; provided, however, that checks in
excess of $5,000 shall require the signature of a Telenational
officer.
(e) During
the Term, the RTE and Manager shall, subject to Section 4(b) hereof, collect all
proceeds of the A/R in the ordinary course of their business and consistent with
their past practice. Manager agrees to vigorously collect such
proceeds in a customary and reasonable manner for businesses in the
telecommunications industry, but at least in the same manner as it collects
proceeds for Blackbird’s existing business.
(f) Upon the
Closing, all existing cash in the Funding Account shall be utilized as
follows:
(i) first, to
pay all outstanding Business Expenses set forth in the then current
Budget;
(ii) second,
to pay the Management Fee (subject to Section 8); and
(iii) the
remaining balance of the Funding Account (if any) shall be retained by
Telenational and become part of the Telenational Assets.
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(g) In the
event that this Management Agreement is terminated in accordance with its terms
prior to the Closing, then all existing cash in the Funding Account shall remain
the property of Telenational.
5. Management of the Core
Business.
(a) During
the Term, in accordance with the Budget and subject to the review, coordination
and ultimate control of the Core Business by the RTE, Manager shall have the
right to manage and operate the Core Business, including any and all facilities
and operations authorized under or subject to regulatory approvals of any
applicable Governmental Authority, as may be reasonably necessary or appropriate
in the ongoing operations of the Core Business consistent with this Management
Agreement, and may rely upon the Telenational employees (as provided in Section
7, below) as well as any of Manager’s employees that Manager deems necessary or
desirable to rely upon for performance of its obligations pursuant
hereto. Manager shall periodically, but no less than weekly, report
to designated senior officers of the RTE regarding the status or the operations
of the Core Business (Manager to provide reports regarding collections, payments
and billing) and any modification to the Budget. Notwithstanding
Manager’s operation of the Core Business as contemplated by the foregoing or any
other provisions hereof, the RTE shall retain all ownership rights and interests
in and to the Core Business, and all control of the Core Business, unless and
until the same are transferred at the Closing in accordance with the terms of
the Share Exchange Agreement.
(b) The
Parties mutually expect and agree that Manager may immediately implement and
execute upon all actions reasonably required to optimize the networks and
business operations of Telenational, and to realize all reasonably achievable
network and operational savings and efficiencies. In this regard, and
notwithstanding the provisions of Section 9(a), below, but subject to Section 6
and with the approval of Telenational management which shall not be unreasonably
withheld or delayed, (i) Manager may change vendors, and (ii) Manager may
migrate all or a portion of Telenational’s telecommunications traffic at
Manager’s cost from the Telenational network onto Manager’s own network
facilities. In the case of item (ii), above, Manager shall charge the
RTE (as a Business Expense to be set forth in the then current Budget) Manager’s
direct cost of telecommunications services plus Telenational’s proportionate
share of fixed and variable network costs; provided however, that in the event
that the Share Exchange transaction is not consummated, the RTE at its sole cost
may elect to have Telenational’s telecommunications traffic reverted to the
Telenational network or moved to another network chosen by the RTE, and the
Manager shall provide such assistance as may be reasonably necessary to
accomplish the foregoing.
(c) During
the Term, Manager shall be responsible for providing, to the extent falling
within the scope of the Operations Services hereunder, a reasonable level of
care with respect to the customers of Telenational and the Core Business (which
shall be generally comparable to the level of care Manager would provide with
respect to its own customers or assets and the level of care provided by the RTE
to the Telenational customers in the past), and shall provide the Operations
Services and other services hereunder in compliance with all applicable
Laws. Manager shall operate and manage the Core Business in a
professional manner and in accordance with the Budget and applicable
professional or industry standards.
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(d) Each of
the RTE, on its own behalf, and on behalf of its Affiliates, agrees that Manager
shall not owe any fiduciary duties to the RTE or its Affiliates, in any capacity
(including as a stockholder or creditor of the Company) in the performance of
any of the Operations Services hereunder; provided, however, that Manager shall
be subject to the duties of good faith and fair dealing. Further, Manager
shall use its reasonable best efforts to act for the benefit of the ongoing
operations of Telenational.
6. Compliance.
(a) The
Parties intend and agree that this Management Agreement and the obligations to
be performed hereunder shall be in full compliance with: (i) the terms and
conditions of all Permits; (ii) all applicable rules, regulations and policies
of the FCC; (iii) all Telecommunications Laws; and (iv) any other applicable
federal, state and local Law. If the FCC or any state Governmental
Authority of competent jurisdiction determines that any provision of this
Management Agreement violates such Permits or any applicable rules, regulations,
policies, Telecommunications Laws, the Parties shall use all commercially
reasonable efforts immediately to bring this Management Agreement into
compliance therewith, consistent with the non-violative terms and provisions
hereof. It is expressly understood by the RTE and Manager that
nothing in this Management Agreement is intended to give Manager any right which
would be deemed to constitute a transfer by the RTE of “control” (as defined in
the applicable Telecommunications Laws) of or over its operations or the Core
Business or a transfer of one or more of the Permits from the RTE to
Manager.
(b) Manager
acknowledges and agrees that the RTE are subject to certain specific obligations
and conditions with respect to the ownership, use and operation of the Core
Business as are reflected in the terms of their Permits relating thereto, in
addition to their general obligations of compliance with Telecommunications Laws
and other applicable Laws. As such, Manager’s management and
operation of the Core Business hereunder is not intended to diminish or restrict
the RTE’s compliance with their obligations before the FCC, applicable state
regulatory commissions and other applicable Governmental Authorities, and
notwithstanding any other provision hereof, this Management Agreement shall not
be construed to interfere with the ability of the RTE to comply with the rules,
regulations or directives of any governmental or jurisdictional authority with
respect to the Permits or the Core Business generally.
(c) In their
discretion and expense, the RTE may conduct periodic audits of the Core Business
in order to ensure compliance with this Management Agreement and all applicable
Laws. In addition, the Parties both shall have reasonable access to
and authority to inspect each other’s equipment and related hardware used or
required for transmission and/or receipt of telecommunications, including, but
not limited to, network facilities, switching equipment, customer premises
equipment, and testing equipment. Such audits and access shall be for
the purpose of ensuring that the Core Business is being operated in a manner
that does not violate the terms of this Management Agreement or of the Share
Exchange Agreement or other ancillary agreement executed in connection with the
Share Exchange Agreement or any applicable Law, or otherwise in a materially
harmful or unlawful manner.
(d) The
Parties shall use the Permits in the operation of the Core Business and the
Telenational Assets during the Term in compliance with all applicable Laws,
ordinances, rules, regulations, and restrictions, including, but not limited to,
the Telecommunications Laws, local ordinances, and state
regulations. Manager recognizes that the RTE remain ultimately
responsible for ensuring that the use of such Permits and the operations
authorized thereunder are in compliance with the applicable rules, regulations,
and policies of applicable federal and local, state or other Governmental
Authorities, and shall cooperate fully with the RTE, including the provision of
any lawfully-required or reasonably-requested information regarding the Core
Business.
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(e) During
the Term, the RTE shall direct and be responsible for the preparation and filing
of all applications, reports, correspondence and other documentation with all
federal and state regulatory commissions relating to the acquisition, use,
maintenance, or renewal of the Permits; provided that the RTE shall reasonably
and in good faith coordinate and consult with Manager in the preparation and
submission of such filings, and Manager shall provide, upon the reasonable
request of the RTE, any information that will enable the RTE to prepare any
applications, records and reports required by the FCC and local, state or other
federal Governmental Authorities.
7. Employees. Subject
to the ultimate control of the RTE over the personnel who operate the Core
Business, Manager may (from time-to-time during the Term) request the services
of certain current employees of the RTE whom Manager deems necessary or helpful
(the “RTE Employees”) for Manager’s provision of the Operations Services and
other services hereunder, and the RTE shall use all commercially reasonable
efforts to continue the employment of the RTE Employees and to cause such RTE
Employees to be accessible to Manager during normal business hours and to fully
cooperate with Manager throughout the Term; provided, however, Manager and the RTE
acknowledge that any and all RTE Employees shall be under the ultimate
supervision and control of the RTE. All costs associated with the RTE
Employees including, without limitation, payroll and other benefits, shall be
Business Expenses as set forth in the Budget. The cost of terminating
any RTE Employees at or prior to the end of the Term shall also be considered
Business Expenses, and any accrued vacation, severance or other benefits due to
RTE Employees upon termination of their employment shall be deemed Business
Expenses.
8. Management Fee;
Expenses. As consideration for Manager providing to the RTE
the Operations Services described herein, Telenational hereby agrees to pay to
Manager a monthly fee in the amount of $40,000 (the “Management Fee”) (such
amount to be prorated on account of any partial month period during the Term
based upon the actual number of days in such month). The Management
Fee shall accrue for so long as Manager is managing the Core Business and shall
become due and payable in bi-monthly payments on the first and fifteenth of each
month. On the last day of the Term, the remainder of all unpaid
Management Fees shall become immediately due and payable. In
accordance with the Budget, Manager shall provide working capital to pay
Telenational’s costs incurred in the Core Business in the event that
Telenational has insufficient funds. Telenational shall also promptly
pay for or reimburse Manager for all reasonable, necessary and ordinary
out-of-pocket expenses incurred in the performance of Manager’s services
hereunder including, without limitation, travel, lodging and telephone expenses
incurred by representatives of Manager while traveling to and from the RTE’s
facilities as may be required to provide the Operations Services that are
included in the Budget. The Manager may not pay any Management Fee
unless Telenational accounts payable, as per the Budget, have been paid in a
timely manner. Manager may not incur any costs in excess of $5,000
which are not included in the Budget without prior written approval from Rapid
Link management, which approval shall not unreasonably be withheld or
delayed.
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9. Certain
Actions.
(a) Manager
and the RTE recognize that the RTE remain ultimately responsible for compliance
with the terms of the Permits. In that regard, Manager shall not,
without the prior written consent of the RTE, which consent shall not
unreasonably be withheld or delayed, take any of the following
actions:
(i) enter
into, modify, breach or terminate any material agreement relating to the
Telenational Assets;
(ii) sell,
assign, lease, transfer or otherwise dispose of any Telenational Assets or
purchase or otherwise acquire any assets except for non-material assets acquired
in the ordinary course of business consistent with past practice or excess
assets no longer required in the operation of the Core Business;
(iii) alter or
change any of the RTE accounting procedures or accounting
practices;
(iv) initiate,
settle or terminate any litigation relating to the Telenational Assets or waive
any rights relating to the Telenational Assets;
(v) delay or
hinder the deployment of network facilities in accordance with the RTE existing
network deployment plans;
(vi) demote or
terminate any RTE employee;
(vii) hire any
RTE employee;
(viii) incur
indebtedness outside the ordinary course of business;
(ix) enter
into any agreement that would constitute a Material Contract under the Share
Exchange Agreement; or
(x) cause the
RTE to take any action or neglect to take any action that would constitute a
default under this Management Agreement or the Share Exchange
Agreement.
(b) Manager
shall request the RTE consents to the actions referenced in Section 9(a) above,
in writing to a person or persons to be designated by the RTE. For
purposes of this Section 9, notice and consent by any Party may be achieved by
electronic mail.
10. Exculpation; Limitation of
Liability.
(a) Each
Party agrees, on behalf of itself and its Affiliates, that in performing any
duties hereunder, to the maximum extent permitted by applicable law, Manager and
its officers, directors, employees, representatives and agents shall not be
directly or indirectly liable to any Party, or any Affiliates of any Party, for
damages, losses, expenses or other Liabilities, whether sounding in tort,
contract or otherwise, arising from their acts or omissions, including for their
active negligence, violations of federal or state securities laws, breaches of
fiduciary duties, or other wrongful act of Manager or any officer, directors,
employees, representatives and agents thereof, except for the acts of gross
negligence or willful misconduct of such Person. Manager and its officers,
directors, employees, representatives and agents may consult with legal counsel
(whether such counsel will be regularly retained or specifically employed) in
connection with providing the Operations Services and shall be fully protected
in any act taken, suffered, or permitted by it in good faith in accordance with
the advice of counsel.
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(b) IN NO
EVENT SHALL EITHER PARTY OR OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES AND
AGENTS THEREOF BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY (i) DAMAGES OR
EXPENSES ARISING OUT OF THIS MANAGEMENT AGREEMENT PROVIDED HEREUNDER (OTHER THAN
FOR DAMAGES CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY MANAGER OR
ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES AND AGENTS), (ii)
SPECIAL OR CONSEQUENTIAL DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, OR (iii) DAMAGES WHICH IN THE AGGREGATE WOULD EXCEED THE AMOUNT OF FEES
PAID TO MANAGER UNDER THIS MANAGEMENT AGREEMENT (OTHER THAN FOR DAMAGES CAUSED
BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY MANAGER OR OF ITS OFFICERS,
DIRECTORS, EMPLOYEES, REPRESENTATIVES AND AGENTS). Each party hereby agrees to
defend, indemnify and hold harmless the other party and its officers, directors,
employees, representatives and agents for any liabilities to any Affiliate of
the first party to the extent the provisions of this Section 10 would limit such
liabilities if such Affiliate were a party and signatory hereto.
11. Indemnification.
(a) Each of
the RTE shall, jointly and severally, defend, indemnify and hold Manager, its
officers, directors, employees, stockholders, representatives and agents and
their respective Affiliates (collectively, the “Indemnified Parties”) harmless
from and against all damages, losses, expenses or other liabilities incurred by
the Indemnified Parties directly or indirectly as a result of providing the
Operations Services during the Term; provided, however, that the RTE shall not
be liable for any loss judicially determined to have been caused by the gross
negligence or willful misconduct of an Indemnified Party.
(b) All
claims for indemnification under this Section 11 arising from a third-party
claim shall be asserted and resolved as follows:
(i) If an
Indemnified Party becomes aware of a third-party claim that such Indemnified
Party believes may result in a loss to such Indemnified Party, such Indemnified
Party (or Manager on such Indemnified Party’s behalf) shall promptly notify the
RTE of such claim; provided that the failure to so notify the RTE shall not
relieve the RTE of any Liability that it may have to any Indemnified Party,
except to the extent that the RTE demonstrates that the defense of such
third-party claim is materially and adversely prejudiced by the failure to give
such notice.
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(ii) If an
Indemnified Party (or Manager on its behalf) provides notice to the RTE of the
assertion of a third-party claim, the RTE shall be entitled to assume the
defense of such third-party claim unless the RTE is also a Person against whom
the third-party claim is made and the Indemnified Party determines in good faith
that joint representation would be inappropriate, or the RTE fails to provide
reasonable assurance to the Indemnified Party of both the financial capacity of
the RTE to defend such third-party claim, and the ability of the RTE to provide
indemnification or to assume the defense of such third-party claim with counsel
satisfactory to the Indemnified Party. After notice from the RTE to the
Indemnified Party of its election to assume the defense of such third-party
claim, the RTE shall not, so long as it diligently conducts such defense, be
liable to the Indemnified Party for any fees of other counsel or any other
expenses with respect to the defense of such third-party claim, in each case
subsequently incurred by the Indemnified Party in connection with the defense of
such third-party claim, other than reasonable costs of investigation. If the RTE
assumes the defense of a third-party claim, (A) such assumption shall establish
conclusively for purposes of this Management Agreement that the claims made in
that third-party claim are within the scope of and subject to indemnification,
and (B) no compromise or settlement of such third-party claims may be effected
by the RTE without the Indemnified Party’s prior written consent unless (1)
there is no finding or admission of any violation of Law or any violation of the
rights of any Person, (2) the sole relief provided is monetary damages that are
paid in full by the RTE, and (3) the Indemnified Party shall have no liability
with respect to any compromise or settlement of such third-party claims effected
without its written consent. If notice is given to the RTE of the assertion of
any third-party claim and the RTE does not, within ten (10) days after the
Indemnified Party’s notice is provided, provide notice to the Indemnified Party
of the election of the RTE to assume the defense of such third-party claim, then
the Indemnified Party may assume the defense of such third-party claim at the
expense of the RTE. The RTE shall be bound by any determination made in such
third-party claim or any compromise or settlement effected by the Indemnified
Party.
(iii) Notwithstanding
the foregoing, if an Indemnified Party determines in good faith that there is a
reasonable probability that a third-party claim may adversely affect it other
than as a result of monetary damages for which it would be entitled to
indemnification under this Management Agreement, the Indemnified Party may, by
notice to the RTE, assume the exclusive right to defend, compromise or settle
such third-party claim, but the RTE shall not be bound by any determination of
any third-party claim (including the losses incurred in connection therewith) so
defended for the purposes of this Management Agreement or any compromise or
settlement effected, without its written consent which shall not be unreasonably
withheld or delayed.
(iv) If the
RTE has consented to any settlement under this Section, the RTE shall not have
the right, power or authority to object to the amount of any claim by any
Indemnified Party with respect to and in accordance with such
settlement.
(c) If an
Indemnified Party has a claim hereunder that does not involve a claim being
asserted against or sought to be collected by a third party, such Indemnified
Party shall with reasonable promptness deliver a notice with respect to such
claim to the RTE. Such notice shall set forth: (i) a brief description of the
circumstances supporting such Indemnified Party’s claim against the RTE; and
(ii) a non-binding, preliminary estimate of the aggregate dollar amount of the
actual and potential losses that have arisen and may arise related to such
claim. If the RTE does not notify such Indemnified Party within thirty (30) days
from the date of receipt of such notice that the RTE disputes such claim, the
amount of such claim shall be conclusively deemed a Liability of the RTE
hereunder. In case the RTE shall object in writing to any claim made
in accordance with this Section, the Indemnified Party shall have fifteen (15)
days to respond in a written statement to the objection of the RTE. If after
such period there remains a dispute as to any claim, the Indemnified Party and
the RTE shall attempt in good faith for sixty (60) days to agree upon the rights
of the respective parties with respect to each of such claims. If the
Indemnified Party and the RTE should so agree, a memorandum setting forth such
agreement shall be prepared and signed by both parties. If such parties do not
so agree, the Indemnified Party and the RTE shall resolve such dispute pursuant
to Section 13, below.
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12. Reserved.
13. Arbitration.
(a) If a
dispute arises concerning the matters contemplated by this Management Agreement,
the Party defending the claim (the “Defending Party”), may, by written notice to
the Party asserting the claim (the “Prosecuting Party”), demand arbitration of
the matter, which arbitration shall be conducted by a single arbitrator. The
Prosecuting Party and the Defending Party shall use their respective best
efforts to agree on the arbitrator, provided that if they cannot so agree within
ten (10) Business Days, either the Prosecuting Party or the Defending Party can
request that Judicial Arbitration and Mediation Services (“JAMS”) select the
arbitrator. The arbitrator shall set a limited time period and establish
procedures designed to reduce the cost and time for discovery while allowing the
Defending Party and Prosecuting Party an opportunity, adequate in the sole
judgment of the arbitrator, to discover relevant information from the other
about the subject matter of the dispute. The arbitrator shall rule upon motions
to compel or limit discovery and shall have the authority to impose sanctions,
including attorneys’ fees and costs, to the same extent as a court of competent
law or equity, should the arbitrator determine that discovery was sought without
substantial justification or that discovery was refused or objected to without
substantial justification. The decision of the arbitrator shall be written,
shall be in accordance with applicable Law and with this Management Agreement,
and shall be supported by written findings of fact and conclusions of law, which
shall set forth the basis for the decision of the arbitrator. The decision of
the arbitrator as to the validity and amount of any claim shall be binding and
conclusive.
(b) Judgment
upon any award rendered by the arbitrator may be entered in any court having
competent jurisdiction. Any such arbitration shall be held in Miami, Florida
under the commercial rules then in effect for JAMS. The non-prevailing party to
an arbitration shall pay its own expenses, the fees of the arbitrator, any
administrative fee of JAMS, and the expenses, including attorneys’ fees and
costs, reasonably incurred by the other party to the arbitration.
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14. Amendment and Modification;
Waiver of Compliance. This Management Agreement may be
amended, modified or supplemented only by written agreement of the RTE and
Manager. Except as otherwise provided in this Management Agreement,
any failure of any Party to comply with any obligation, covenant or condition
herein may be waived by the Party entitled to the benefits thereof only by a
written instrument signed by the Party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant, or
condition shall not operate as a waiver of or estoppel with respect to any
subsequent or other failure.
15. Notices. All
notices, requests, consents, waivers and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been given (i) upon delivery if delivered in person, (ii) on the date of mailing
if mailed by registered or certified mail, postage prepaid and return receipt
requested, (iii) on the date of delivery to a national overnight courier
service, or (iv) upon transmission by facsimile (if such transmission is
confirmed by the addressee) if delivered through such services to the following
addresses:
If to the
RTE: Rapid
Link, Incorporated
0000 X. 00xx
Xxxxxx
Xxxxx, XX
00000
Attn: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
With a copy
to: Xxxxxxxxxx
& Xxxxx, LLP
00000
Xxxxxxxx Xxxxxxxxx
Xxxxx
000
Xxx
Xxxxxxx, XX 00000
Attn:
Xxxx Xxxx, Esq.
Facsimile: (000) 000-0000
If to
Manager: Blackbird
Corporation
000 – 00xx
Xxxxxx
Xxxxx
Xxxxx, XX 00000
Attn:
Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
With a
copy
to: Xxxxxxx
Xxxxxx, P.A.
0000 Xxxxxxxxxxxxx Xxxxx
000 X.X. Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx, 00000
Attn:
Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
Either
party may at any time change its address for notice from time to time by giving
notice to the other party or parties in accordance with this Section
15.
16. Assignment. This
Management Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and
permitted assigns, but neither this Management Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any Party, including by
operation of Law, without the prior written consent of the other Party, subject
to any required approvals. Any other assignment of this Management
Agreement or any of the rights, interests or obligations hereunder in
contravention of this Section 16 shall be null and void and shall not bind or be
recognized by any of the RTE or Manager.
11
17. Third Party Beneficiaries;
Limitation of Liability. Other than the rights to
indemnification held by the officers, directors, stockholders, employees, agents
and other representatives of Manager granted pursuant to Section 11, nothing in
this Management Agreement shall be construed as giving any person other than the
Parties hereto any legal or equitable right, remedy or claim under or with
respect to this Management Agreement.
18. Severability. If
any provision of this Management Agreement is invalid, illegal or incapable of
being enforced by any rule of law or public policy, all other terms, conditions
and provisions of this Management Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the Parties hereto shall
negotiate in good faith to modify this Management Agreement so as to effect the
original intent of the Parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent possible.
19. Governing Law; Waiver of
Jury Trial. This Management Agreement shall be construed in
accordance with and governed by the internal laws of the State of
Nebraska. Each of the Parties hereby waives trial by jury in any
claim, action, suit, arbitration, inquiry, proceeding or investigation to which
it is a party involving, directly or indirectly, any matter in any way arising
out of, related to or in connection with the transactions contemplated in this
Management Agreement.
20. Counterparts. This
Management Agreement may be executed in one or more counterparts (including by
facsimile transmission), each of which will be deemed an original and all of
which together will constitute one and the same instrument.
21. Entire
Agreement. This Management Agreement, the Share Exchange
Agreement (including the Exhibits and the Schedules thereto) and the other
collateral closing documents executed in connection with the Share Exchange
Agreement constitute the entire agreement among the Parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
whether written or oral, among the Parties with respect thereto.
22. Headings. The
descriptive headings contained in this Management Agreement are included for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Management Agreement.
23. No Partnership or Joint
Venture Created. Nothing in this Management Agreement shall be
construed or interpreted to make Manager and the RTE partners or joint
venturers, or to make one an agent or representative of the other, or to afford
any rights to any third party other than as expressly provided
herein. Except as otherwise provided herein, neither Manager nor the
RTE are authorized to bind the other to any contract, agreement or
understanding.
12
24. Confidentiality. Any
and all materials and information that a Party may from time to time receive
from or on behalf of another Party in the course of performance of or otherwise
in connection with this Management Agreement shall, to the extent constituting
confidential or proprietary information as contemplated thereby, be in all
respects subject to the provisions and protections of the confidentiality
provisions set forth in the Share Exchange Agreement.
25. Time of Essence; Specified
Dates. Time is of the essence for this Management Agreement
and in the performance of the obligations and covenants to be performed or
satisfied by the parties. Wherever a date specified in this
Management Agreement falls on a day other than a Business Day, the date shall be
extended to the next succeeding Business Day.
26. Amounts in United States
Dollars. All amounts of money set forth or referred to herein
shall be in United States dollars.
[Signatures
Begin on Following Page]
13
IN WITNESS WHEREOF, the
Parties hereto have executed this Management Agreement on the day and year first
written above.
RAPID LINK, INCORPORATED
By:
Name:
Title:
TELENATIONAL COMMUNICATIONS,
INC.
By:
Name:
Title:
BLACKBIRD CORPORATION
By:
Name:
Title:
14
Exhibit
A
Operations
Services
The
Operations Services described herein shall include, subject to the express
limitations contained in the Management Agreement, the following services and
activities:
|
1)
|
Network;
|
|
2)
|
Billing
and Collections;
|
|
3)
|
Finance,
Accounting and Tax;
|
|
4)
|
Regulatory;
|
|
5)
|
Sales
and Marketing;
|
|
6)
|
Information
Technology;
|
|
7)
|
Customer
Care;
|
|
8)
|
Facilities;
|
|
9)
|
Human
Resources;
|
|
10)
|
Contracts
and Purchasing;
|
|
11)
|
Commercial
Services; and
|
|
12)
|
Corporate
Administration
|
Exhibit
B
Budget
