MANAGEMENT SERVICES AGREEMENT
Exhibit 10.4
This
Management Services Agreement (this “Agreement”) is made and entered into as of
this ___ day of March, 2008 (the “Effective Date”), by and among iBroadband,
Inc., a Nevada corporation (“iBroadband”), iBroadband Networks, Inc., a Texas
corporation (“iBN”), iBroadband of Texas, Inc., a Delaware corporation (“iBT”)
and Rapid Link, Incorporated, a Delaware corporation (“Rapid
Link”). iBroadband, iBN, iBT and Rapid Link are hereinafter sometimes
each individually referred to as a “Party” and collectively as the
“Parties”.
WHEREAS,
iBroadband is a holding company owning one hundred percent (100%) and
ninety-eight percent (98%) of the outstanding shares of iBN and iBT,
respectively;
WHEREAS,
iBN and iBT provide telecommunications services to customers in the State of
Texas (the “Business”) and in the case of iBN such services are being provided
pursuant to a Service Provider Certificate of Operating Authority issued by the
Texas Public Utility Commission (“Texas PUC”) to iBN (the “iBN
SPCOA”);
WHEREAS,
Rapid Link or one of its wholly-owned subsidiaries is contemplating the purchase
of substantially all of the assets of iBN and iBT in connection with a secured
party sale under the Uniform Commercial Code to be conducted by the secured
lenders to iBroadband, iBN and iBT (the “Secured Party Sale”);
WHEREAS,
Rapid Link or one of its wholly-owned subsidiaries is applying to the Texas PUC
for a Service Provider Certificate of Operating Authority for itself (the “Buyer
SPCOA”) in order to provide telecommunications services to iBN’s customers and
is applying to the Federal Communications Commission (“FCC”) for approval of the
assignment of the assets of iBN and iBT (the “FCC
Approval”); and
WHEREAS,
Rapid Link desires to operate the Business during the Term (as hereafter
defined) pursuant to the terms and conditions of this Agreement.
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, hereby covenant and
agree as follows:
1.
Appointment. iBN
and iBT hereby engage Rapid Link, on the terms and conditions set forth herein
and during the Term, to provide management services to iBN and iBT in the
operation of the Business.
2.
Term. This
Agreement shall become effective upon the Effective Date and shall expire (the
“Term”) automatically on the earlier of (a) at 12:01 A.M (Texas time) on
September 30, 2008 and (b) the date on which each of the following conditions
have been satisfied: (i) the completion of the Secured Party Sale; (ii) the
obtaining of the Buyer SPCOA and the FCC Approval; (iii) Rapid Link or one of
its wholly-owed subsidiaries enters into an interconnection agreement with
United Telephone Company of Texas, Inc. d/b/a Embarq; and (iv) the expiration
date of any Texas PUC and FCC notice requirements to iBN’s customers (the
“Expiration Date”).
3.
Management
Fee. On the Effective Date, iBN shall pay to Rapid Link a
management fee in the amount of $20,000.
4.
Management
Services.
During
the Term, Rapid Link shall designate those employees of Rapid Link or one of its
wholly owned subsidiaries that will be responsible for participating in the
management services described herein on behalf of, and under the direction of,
iBN and iBT. Rapid Link or its wholly owned subsidiary, in its
discretion, may assign additional employees of Rapid Link to perform management
responsibilities at iBN and iBT Management responsibilities shall
include, but not necessarily be limited to:
(a) collection
of all accounts receivable and all cash generated from operation of the Business
received by iBN and iBT which collections shall be deposited in the Bank
Accounts (as defined below) and applied to the continued operation of the
Business as directed by iBN and iBT;
(b) as
directed by iBN and iBT, to pay when due all actual costs and expenses accruing
from and after the Effective Date in connection with the ongoing operation of
the Business;
(c) utilizing
for the Term the existing iBN and iBT bank accounts for all funds received by
and collected on behalf of iBN and iBT (the “Bank Accounts”) and deposit therein
on behalf of iBN and iBT all cash from the operation of the Business, including
all cash from iBN’s and iBT’s accounts receivable, and withdrawing funds from
the Bank Accounts as directed by iBN and iBT for the continued operation of the
Business during such period;
(d) using
commercially reasonable efforts to collect, receive payment, and delivering the
proceeds of all of iBN’s and iBT’s accounts receivable or other rights to
payment accruing to iBN or iBT, and providing a monthly accounting of same to
iBN and iBT;
(e) cooperating
in the timely filing of all tax returns, state and federal, for iBN and iBT
covering any and all time periods up to and including the Expiration
Date;
(f) reporting
to iBroadband regarding its management of the Business; and
(g) providing
reasonable level of care to the customers of the Business.
All
services to be provided under this Agreement shall be provided in a professional
manager and in accordance with all applicable professional or industry standards
and in compliance with all applicable state and federal laws, rules and
regulations.
5.
Limitations. During
the Term, iBN and iBT will retain ownership, control and full right of access to
all customer lines covered by this Agreement. In addition, iBN and
iBT will retain ultimate control to direct the management activities of Rapid
Link and make policy decisions regarding the Business (subject to the terms
hereof).
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6.
Restrictive Covenants of
iBroadband, iBN and iBT. Rapid Link shall provide the
management services described herein have the right to manage the Business
during the term of this Agreement subject to iBN’s oversight, review and
ultimate control; provided, however, that iBroadband, iBN and iBT shall not,
during the term of this Agreement, take any action outside the ordinary course
of business without the express written consent of Rapid Link. Action
outside the ordinary course of business shall include but not necessarily be
limited to:
(a) the
sale of any material assets of iBN and iBT;
(b) contracts
for capital improvements or capital expenditures by iBN or iBT in excess of
$5,000;
(c) the
execution or amendment of any contract of employment or the adjustment of any
salary of existing officers and employees of iBN or iBT;
(d) the
voluntary commencement of any proceedings under the United States Bankruptcy
Code or the voluntary commencement of any insolvency or receivership proceedings
by iBroadband, iBN or iBT;
(e) a
change in control of the board of directors of iBN or iBT; or
(f) the
election of new officers of iBN or iBT
7.
Compliance with Applicable
Law.
(a) The
Parties desire and agree that this Agreement and the obligations performed
hereunder shall be in full compliance with (i) the terms and conditions of the
iBN SPCOA; (ii) any licenses issued by the Federal Communications Commission
(the “FCC Licenses”), (iii) existing designations as an Eligible
Telecommunications Carrier and an Eligible Telecommunications Provider, and (iv)
all Federal, State and local laws or regulations, including, without limitation,
the Texas Public Utility Regulatory Act of 2005 (the “Texas PURA”) and the
Federal Communications Act of 1934, as amended (the “Communications
Act”). It is expressly understood by the Parties that nothing in this
Agreement is intended to give Rapid Link any right which would be deemed to
violate the iBN’s SPCOA, any FCC License or any Federal, State or local law,
regulation, rule, or order, or which would transfer control of, or result in the
assignment of assets of iBN or iBT.
(b) If
any body of competent jurisdiction determines that any provision of this
Agreement violates any law, rule, regulation, or order that would cause this
Agreement to be invalid, the Parties shall make reasonable efforts immediately
to bring this Agreement into compliance consistent with the terms of this
Agreement.
(c) Rapid
Link acknowledges and agrees that iBN has an obligation to comply with the Texas
PURA and the Communications Act and all rules, regulations, and orders of the
Texas PUC and Federal Communications Commission, and Rapid Link’s management of
the Business under this Agreement is not intended to interfere with iBN’s
ability to comply with Texas PURA and the Communications Act or with the rules,
regulations, and orders of the Texas PUC and Federal Communications Commission
or to result in Rapid Link obtaining control of the operation of the Business
prior to the Secured Party Sale.
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(d) At
its discretion and at its expense, iBN may conduct periodic audits during normal
business hours, upon reasonable notice in order to ensure compliance in all
material respects with this Agreement and all applicable government rules and
regulations.
(e) Rapid
Link shall manage the Business during the Term in compliance with all applicable
laws, ordinances, rules, regulations, and restrictions, including, but not
limited to, the Texas PURA and the Communications Act, as well as the rules,
regulations, and orders of the Texas PUC and the Federal Communications
Commission, as well as all policies, local ordinances, and state
regulations. Rapid Link recognizes that iBN remains ultimately
responsible for ensuring that the Business is operated in compliance with the
applicable rules, regulations, and policies of applicable Federal, State, and
local, government authorities and shall cooperate fully with iBN by providing
information regarding the Business and shall pay the reasonable and actual
administrative costs incurred in complying with such obligations.
(f) During
the term of this Agreement, iBN shall be responsible for the filing of all
applications, reports, correspondence and other documentation with the Texas PUC
and the Federal Communications Commission relating to the operation of the
Business; provided that Rapid Link shall cooperate with such filings and shall
provide upon iBN’s reasonable request any information that will enable it to
prepare any such applications, records and reports; and provided further that
iBN shall consult with Rapid Link and the Parties shall mutually agree as to the
most effective and efficient means of preparing such filings and in the
selection of any outside professionals or consultants retained by Rapid Link to
assist in such filings, and Rapid Link shall reimburse iBN for all reasonable
and actual out-of-pocket legal fees and expenses in connection with such
applications, correspondence and other related matters.
8.
Amendment and
Modification. This Agreement may be amended, modified or
supplemented only by written agreement signed by each Party.
9. Waiver of Compliance;
Consents. Except as otherwise provided in this 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.
10. Indemnification. iBroadband,
iBN and iBT, jointly and severally, hereby agree to indemnify and hold Rapid
Link harmless of and from any and all claims, actions, causes of action,
liability, damages, costs, including reasonable attorney’s fees, of any nature
arising out of or resulting from the performance by Rapid Link of its duties and
responsibilities pursuant to this Agreement except for those claims, actions,
liabilities, damages and costs arising from the gross negligence or willful
misconduct of Rapid Link.
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11. Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed given (i) when personally sent/delivered, by facsimile transmission (with
hard copy to follow) or sent by reputable express courier (charges prepaid), or
(ii) three (3) days following mailing by registered or certified mail, postage
prepaid and return receipt requested. Unless another address is
specified in writing, notices, demands and communications to any Party shall be
sent to the addresses indicated below:
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To
Rapid Link:
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Rapid
Link Communications, Inc.
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0000
X. 00xx
Xxxxxx
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Xxxxx,
Xxxxxxxx 00000
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Facsimile: 000-000-0000
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Telephone:
000-000-0000
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Email:
xxxxxx@xxxxxxxxx.xxx
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To
iBroadband:
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Xxxxx
Xxxxxxxx, President
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iBroadband
Networks, Inc.,
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00000
Xxxxxx Xxxx
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Xxxxxx,
Xxxxx 00000
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Facsimile: 000-000-0000
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Telephone: 000-000-0000
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Email: xxxxx@xxxxxxxxxx.xxx
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12. Non-Assignment. This
Agreement shall be binding upon and inure to the benefit of the Parties hereto,
and except as otherwise expressly provided herein, no other person shall have
any right, benefit or obligation hereunder. Any assignment of this
Agreement or any of the rights, interests or obligations hereunder in
contravention of this Section 10 shall be null and void and shall not bind or be
recognized by either Party except that Rapid Link may assign its rights and
obligations under this Agreement to a wholly-owned subsidiary of Rapid
Link..
13. Third-Party
Beneficiaries. Nothing in this 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 Agreement.
14. Severability. If
any provision of this 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 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 in
invalid, illegal or incapable of being enforced, the Parties hereto shall
negotiate in good faith to modify this 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.
15. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas (without giving effect to the
principles of conflicts of law thereof) as to all matters, including, but not
limited to, matters of validity, construction, effect, performance and
remedies.
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16. Submission to
Jurisdiction. The Parties hereto irrevocably submit to the
exclusive jurisdiction of the state or federal courts of the State of Texas over
any dispute arising out of or relating to this Agreement or any other agreement
or instrument contemplated hereby or entered into in connection herewith or any
of the transactions contemplated hereby or thereby. Each Party hereby
irrevocably agrees that all claims in respect of such dispute or proceedings may
be heard and determined in such courts. The Parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum in
connection therewith.
17. Counterparts. This
Agreement may be executed and delivered (including by facsimile transmission) in
one or more counterparts, and by the Parties hereto in separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original
but all of which taken together shall constitute one and the same
agreement.
18. Entire
Agreement. This Agreement constitutes 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.
19. Headings. The
descriptive headings contained in this Agreement are included for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.
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20. Remedies. The
Parties hereby acknowledge and agree that money damages may not be an adequate
remedy for any breach or threatened breach of any of the provisions of this
Agreement and that, in such event, each Party or its permitted successors or
assigns, in addition to any other rights and remedies existing in its favor, may
seek specific performance, injunctive and/or other relief in order to enforce or
prevent any violations of this Agreement.
21. No Partnership or Joint
Venture Created. Nothing in this Agreement shall be construed
or interpreted to make any Party 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. No Party is authorized to
bind any other Party to any contract, agreement or understanding.
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RAPID
LINK, INCORPORATED
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By:
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/s/
Xxxxx Xxxxxxxx
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Name:
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Xxxxx
Xxxxxxxx
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Title:
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CFO
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iBROADBAND,
INC.
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By:
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/s/Xxxxx
X. Heidelke
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Name:
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Xxxxx
X. Heidelke
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Title:
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President
& CEO
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iBROADBAND
NETWORKS, INC.
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By:
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/s/
Xxxxx X. Heidelke
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Name:
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Xxxxx
X. Heidelke
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Title:
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President
& CEO
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iBROADBAND
OF TEXAS, INC.
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By:
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/s/
Xxxxx X. Heidelke
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Name:
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Xxxxx
X. Heidelke
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Title:
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President
& CEO
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SIGNATURE
PAGE TO
TRANSITION
SERVICES AGREEMENT
