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EXHIBIT 10.16
December 30, 1997
AGENCY AGREEMENT
THIS AGENCY AGREEMENT (this "Agreement") is made as of this 30th day
of December, 1997 by and among Easy Phone, Inc., a ________ corporation ("EPI")
and TelCom Plus West, L.L.C., a California limited liability company and TelCom
Plus East, L.L.C., a Florida limited liability company (collectively referred
to as "TelCom"). This Agreement also includes the operational right of Telcom
Plus East to permit Telcom Plus Florida L.L.C. to use of the licences set forth
below, pursuant to all of the terms and conditions set forth herein. Telcom
Plus Florida L.L.C.'s rights hereunder are granted only through Telecom Plus
East.
WHEREAS, EPI has the licenses and tariffs necessary to resell local
telecommunications services (the "EPI Authorizations") in the jurisdictions of
the states of Florida and California, respectively (the "Relevant Market");
WHEREAS, it is the desire of EPI that TelCom market local
telecommunications services in the Relevant Market until TelCom receives its
own authorizations sufficient to provide local telecommunications services in
the Relevant Market, subject to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Retention. EPI has obtained the government authorizations
necessary to resell local telecommunications services in the Relevant Market.
TelCom will be the non-exclusive agent of EPI in the Relevant Market. TelCom
shall not, directly or indirectly, use, nor provide any services pursuant to
the EPI Authorizations in the Relevant Market, except as provided in this
Agreement. Further, the parties agree and acknowledge that the customers
obtained by TelCom prior to and during the Term (as hereinafter defined) of
this Agreement shall continue to be TelCom's customers after TelCom receives
the TelCom Authorizations (as hereinafter defined).
2. Term.
(a) The term of this Agreement (the "Term") shall commence
on the date hereof and shall continue for a period of one (1) year, unless
sooner terminated pursuant to Section 13 hereof. This Agreement may be renewed
by the parties for an additional one (1) year term if TelCom has not received
the TelCom Authorizations prior to the end of the Term.
(b) TelCom will take all reasonably commercial reasonable
efforts to obtain the authorizations necessary in the jurisdiction within the
Relevant Market (the "TelCom Authorizations") sufficient for TelCom to resell
local telecommunications services in the
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Relevant Market as soon as practicable. TelCom shall furnish notice to EPI
upon receipt by TelCom of each such TelCom Authorization. TelCom agrees and
acknowledges that receipt of the TelCom Authorizations does not relieve TelCom
of its payment responsibility, as further provided in Section 6 hereof, during
the Term of this Agreement.
(c) In the event of any transfer or assignment of EPI, TelCom's
rights and obligations under this Agreement shall continue for the remainder of
the Term.
(d) Upon termination of this Agreement, the customers TelCom has
obtained and serviced from the effective date of this Agreement shall
thereafter belong to TelCom, with no liability or obligation to EPI
thereunder. Further, the customers TelCom has in the Relevant Markets prior to
the execution of this Agreement shall belong to TelCom upon termination or
expiration of this Agreement.
3. Access. TelCom shall have reasonable access, during normal
business hours, to such books and records of EPI pertaining to the business in
the Relevant Market, if any, as may reasonably be necessary in connection with
this Agreement.
4. Employees of TelCom; No Benefits. The parties acknowledge and
agree that: (a) TelCom is functioning as an independent contractor to EPI and
(b) each party is solely responsible for the payment of salary, employee
benefits and all other compensation due to its personnel rendering services
pursuant to this Agreement, and for all applicable federal, state and local tax
withholding with respect to compensation and benefits payable to them under
this Agreement or otherwise.
5. Revenues. In recognition of the value of the marketing,
billing, customer service and other services performed by TelCom on behalf of
EPI, the parties agree that, with the exception of fees paid by TelCom as
provided in Section 6 hereof, all revenues generated from customers pursuant to
the EPI Authorizations in the Relevant Market shall belong to TelCom.
6. Fees.
(a) In consideration of TelCom's use of the EPI
Authorizations, TelCom shall pay to EPI, on the twenty-fifth (25th) day of
each month during the Term of this Agreement, the sum of Twenty Thousand
Dollars ($20,000) (the "Monthly Fee"), by check, the payment of which shall be
secured out of TelCom's cash flow. Upon execution of this Agreement, TelCom
shall pay EPI Twenty Thousand Dollars ($20,000), as payment for the first month
of the Monthly Fees due hereunder.
(b) In addition, TelCom shall also pay all invoices from
EPI's underlying local exchange carriers for local telecommunications services
provided by EPI to TelCom customers in the Relevant Market. EPI shall promptly
xxxx TelCom upon receipt of a payment invoice from a relevant local exchange
carrier in the Relevant Market. TelCom shall pay EPI, within thirty (30)
business days, the full amount of the local exchange carrier invoices received
by
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EPI, less any disputed charges. In the event of TelCom's failure to timely pay
such invoice, this Agreement, and all rights and privileges granted TelCom
hereunder, shall immediately terminate.
7. TAX MATTERS. Each party is responsible for the payment of its
own state and local taxes. EPI is responsible for the payment of any federal,
state or federal telecommunications taxes related to the provision of local
telecommunications services, as calculated pursuant to an agreement with
Atlantax.
8. TELCOM'S CUSTOMERS. The parties acknowledge and agree that all
customers provided services in the Relevant Market pursuant to the EPI
Authorizations are customers of TelCom in the Relevant Market and not customers
of EPI in the Relevant Market. Accordingly, TelCom shall send invoices (which
invoices shall state that services are provided by EPI), provide customer
service, and pursue collections for local telecommunications services provided
to its customers, at TelCom's sole discretion and expense. It is the
understanding of all parties to this Agreement that the services to be provided
by TelCom through the EPI Authorizations shall be provided by TelCom as soon as
practicable following TelCom's receipt of the TelCom Authorizations.
Notwithstanding the foregoing, during the Term of this Agreement, TelCom shall,
on an ongoing basis, explicitly notify its customers that it is providing
services as the nonexclusive, authorized agent of EPI and is awaiting the
TelCom Authorizations.
9. REPRESENTATIONS AND WARRANTIES. Each of the parties hereto
represents and warrants to the other that, as of the date hereof:
(a) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and
qualified to do business in each jurisdiction where failure to do so would have
a material adverse effect on its ability to conduct business.
(b) it has the power and authority to execute, deliver
and perform its obligations under this Agreement; and such execution, delivery,
performance and consummation have been duly authorized by all necessary
corporate action. This Agreement has been duly executed and delivered by it and
constitutes a valid and legally binding obligation of it, enforceable against
it in accordance with the terms of this Agreement except as such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization, or other laws affecting creditors' rights generally or by the
availability of equitable remedies;
(c) the execution, delivery and performance by it of
this Agreement (i) do not contravene any provision of its organizational
documents; (ii) do not violate or conflict with any law, regulation or
contractual restriction to which it is subject; and (iii) shall not result in
the creation of, or violate or conflict with, any lien, mortgage, pledge,
security interest or any other encumbrance upon or with respect to any of its
properties;
(d) no consent, order, approval or authorization or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due
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execution, delivery and performance by it of this Agreement and the consummation
of the transactions contemplated hereby; and
(e) there is no action, suit, litigation or arbitration
or, to its knowledge, claim, proceeding or investigation pending, or, to its
knowledge, threatened against or affecting it or its properties, assets or
business in any court or before or by any governmental department, board, agency
or instrumentality, or any arbitrator, that affects or impairs its ability to
enter into this Agreement or to consummate the transactions contemplated hereby.
10. Covenants of TelCom. During the term of this Agreement,
TelCom shall;
(a) not intentionally or negligently commit any act or omit
any act which will directly or indirectly cause a suspension, modification or
cancellation of any of the EPI Authorizations;
(b) give prompt notice, orally and in writing, to EPI of any
change or event having, or which, insofar as can reasonably be foreseen in the
future would have, a material adverse effect on the EPI Authorizations;
(c) provide EPI copies of all material notices and
communications to or from TelCom that relate to the EPI Authorizations; and
(d) market local telecommunications services at rates
consistent with the applicable tariff filed by EPI with the California Public
Utilities Commission and the Florida Public Utilities Commission, respectively,
as may be amended from time to time.
11. Indemnification. TelCom shall indemnify and hold harmless
EPI and all of its respective Affiliates and its respective Representatives from
and against any and all damages, claims, losses, expenses, costs, obligations,
and liabilities including, without limiting the generality of the foregoing,
liabilities for reasonable attorneys' fees and disbursements, suffered directly
or indirectly, by EPI or any of its respective Affiliates or Representatives by
reason of, or arising out of: (i) any breach of representation or warranty made
by TelCom in this Agreement; (ii) any failure by TelCom to perform or fulfill
any of its covenants or agreements set forth in this Agreement (iii) any act or
omission of TelCom in connection with its use of the EPI Authorizations; and
(iv) any failure by TelCom to comply with applicable laws in connections with
this Agreement.
12. Confidentiality. Each of the parties hereto will hold, and
will use its reasonable, good faith efforts to cause its respective
shareholders, partners, members, directors, officers, employees, accountants,
counsel, consultants, agents and financial or other advisors (collectively
"Agents") to hold, in confidence, all information (whether oral or written),
including this Agreement and the common documents contemplated herein (except
that the existence of this Agreement shall not be confidential), concerning the
transactions contemplated by this Agreement furnished
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to such party by or on behalf of any other party in connection with such
transactions, unless such disclosure is legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar processes, or by order of a court or tribunal of competent jurisdiction,
or in order to comply with applicable rules or requirements of any stock
exchange, government department or agency or other requirement) to disclose any
such information or documents, in which the party required to disclose the
information must advise the other parties and request confidential treatment by
the body compelling disclosure, and except to the extent that such information
or documents can be shown to have been (a) previously known on a nonconfidential
basis by such party, (b) in the public domain through no fault of such party (c)
acquired by such party on a nonconfidential basis from sources not known by such
party to be bound by any obligation of confidentiality in relation thereto.
Notwithstanding the foregoing provisions of this Section 12, each party may
disclose such information to its Agents in connection with the transactions
contemplated by this Agreement so long as such Agents are informed by such party
of the confidential nature of such information and are directed by such party to
treat such information confidentially. The obligation of each party to hold any
such information in confidence shall be satisfied if such party exercises the
same care with respect to such information as it would take to preserve the
confidentiality of its own similar information. If this Agreement is terminated,
each party will, and will use it reasonable, good faith efforts to cause its
respective Agents and leaders to, destroy or deliver to the other party, upon
request, all documents and other material, and all copies thereof, obtained by
such party or on its behalf from the other party hereto in connection with this
Agreement that are subject to such confidence.
13. Termination.
(a) Either party may terminate this Agreement in the event of
a Default (as hereinafter defined) by the other, provided that the
non-defaulting party so advises the defaulting party in writing of the event of
Default and the defaulting party has not cured, nor commenced the diligent
pursuit of the cure of, the Default within 60 days after written notice thereof
is received. Except as otherwise provided by this Agreement, such termination
shall be effective upon the expiration of the 60 day period immediately
following receipt of notice of Default by the defaulting party.
(b) Termination regardless of cause or nature shall be
without prejudice to any other rights or remedies of the parties and shall be
without liability for any loss or damage occasioned thereby. Termination of this
agreement for any cause shall not release either party hereto from any liability
which at the time of termination has already accrued to the other party hereto
or which thereafter may accrue in respect of any act or omission prior to
termination, or from any obligation which is expressly stated herein to survive
termination.
(c) The term "Default" is defined to include: (i) the
limitation of bankruptcy or receivership proceedings with respect to a party
(which are not dismissed within 60 days), execution of a general assignment for
the benefit of creditors or any other transfer or assignment
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of a similar nature or otherwise seeking relief under any applicable
bankruptcy reorganization, moratorium or similar debtor relief laws (it
being understood that the execution of any third-party financing
agreements shall not constitute a Default hereunder) or (ii) a material
breach of any of the other terms or conditions hereof.
14. Liquidated Damages. In the event this Agreement is
terminated prior to its Term and EPI is not in breach of its
obligations hereunder, TelCom shall promptly pay to EPI the difference
between the Monthly Fees EPI would have received had this Agreement
remained in effect for the Term, less the Monthly Fees TelCom has
already paid to EPI hereunder.
15. General.
(a) No modification or amendment of, or waiver
under, this Agreement shall be valid unless in writing and signed by
each of the parities hereto.
(b) This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective
successors and assigns. This Agreement may not be assigned by any
party without the prior written consent of the other parties;
provided, however, that no such consent shall be required in
connection with (i) any assignment by the EPI to any of its
Affiliates so long as such transfer has no effect on TelCom's
ability to use the EPI Authorizations, or (ii) any transfer by
TelCom of all or substantially all of its assets or any merger of
consolidation of TelCom.
(c) This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada without
regard to conflicts-of-laws principles.
(d) If any term, provision, covenant or restriction
herein is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated thereby.
(e) All notices, requests and other communications
hereunder shall be deemed to have been duly delivered, given or made
to or upon any party hereto if in writing and delivered by hand
against receipt, or by certified or registered mail, postage
prepaid, return receipt requested, or to a courier who guarantees
next business day delivery or sent by telecopy (with confirmation),
to such party at its address set forth below or to such other
address as such party may at any time, or from time to time, direct
by notice given in accordance with this Section 15(a).
If to EPI:
(insert)
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with a copy to:
[insert]
If to TelCom:
[insert]
with a copy to:
[insert]
The date of delivery of any such notice, request or other communication
shall be the earliest of (i) the date of actual receipt, (ii) three
business days after such notice, request or other communication is sent
if sent by certified or registered mail, (iii) if sent by courier who
guarantees next business day delivery the business day next following
the day such notice, request, or other communication is actually
delivered to the courier or (iv) if sent by telecopy the date of
written confirmation of receipt.
(f) This Agreement contains the entire understanding of the
parties hereto respecting the subject matter hereof and supersedes all
prior discussions and understandings.
(g) The parties agree that irreparable damage will result if
this Agreement is not performed in accordance with its terms, and the
parties agree that any damages available at law for a breach of this
Agreement would not be an adequate remedy. Therefore, the provisions
hereof and the obligations of the parties hereunder shall be
enforceable in a court of equity, or other tribunal with jurisdiction,
by a decree of specific performance, and appropriate injunctive relief
may be applied for and granted in connection therewith. Such remedies
and all other remedies provided for in this Agreement shall, however,
be cumulative and not exclusive and shall be in addition in any other
remedies that a party may have under this Agreement, at law or in
equity.
(h) In the event of any dispute concerning the construction
or interpretation of this Agreement or any ambiguity hereof, there
shall be no presumption that this Agreement or any provision hereof be
construed against the party who drafted this Agreement.
(i) The provisions of Sections 11 and 12 hereof will survive
the termination of this Agreement for a period of one (1) year,
provided that any claim for indemnification pursuant to Section 11 made
within such one year period shall survive until such claim is resolved.
(j) The parties acknowledge and agree that, during the Term
of this Agreement, including and renewals thereto, if any, TelCom may
request changes to the EPI.
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tariffs on file with the relevant governmental authorities in order to
meet pricing changes in the Relevant Markets. Furthermore, EPI, during
the Term of this Agreement, will not change the tariffs applicable to
the Relevant Markets without the prior consent of TelCom, which
consent shall not be unreasonably withheld, unless EPI is required to
do so by binding governmental authority.
(k) During the term of this Agreement and thereafter, EPI
shall not directly solicit agents employed by TelCom in the Relevant
Markets.
[Remainder of page left blank intentionally]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
EASY PHONE, INC.
By: /s/ Xxxxxxx Xxxxxxx
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Its: President
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TELECOM PLUS EAST L.L.C.
By: /s/ C. A. Xxxxxx
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Its: Initial Managing Partner
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TELCOM PLUS WEST L.L.C.
By: /s/ C. A. Xxxxxx
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Its: Initial Managing Partner
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TELCOM PLUS FLORIDA L.L.C.
By: /s/ C. A. Xxxxxx
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Its: Initial Managing Partner
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