SERVICES AGREEMENT
THIS SERVICES AGREEMENT (the "Agreement"), made and entered into as of the
___ day of June, 2000, by and between Horizon Personal Communications, Inc., an
Ohio company ("Percom"), and United Communications, Inc. ("United"), an Ohio
company.
W I T N E S S E T H:
WHEREAS, effective April 1, 2000, Percom sold its internet and long
distance assets to United; and
WHEREAS, United desires for Percom to provide and Percom is willing to
furnish certain customer relations services upon the terms and conditions
hereinafter set forth; and
NOW, THEREFORE, in consideration of the promises, the representations,
warranties and covenants herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
ARTICLE I - TERM
A. Initial Term. The initial term (the "Initial Term") of this Agreement
shall commence on the date hereof and shall continue until the first (1st)
- ------------ anniversary of such date, subject to renewal or termination as
provided below.
B. Renewal Terms. Following expiration of the Initial Term, this Agreement
will automatically renew for successive three (3) month terms, unless either
party hereto notifies the other party in writing of its election not to renew
this Agreement thirty (30) days prior to the expiration of the Initial Term or
the then current term, as the case may be. As used in this Agreement, "Term"
shall mean the Initial Term, and, if applicable, any renewal terms.
ARTICLE II - DEFAULT; TERMINATION
Either party hereto may terminate this Agreement by providing thirty (30)
days prior written notice to the other party that it will terminate this
Agreement.
ARTICLE III - SERVICES TO BE PROVIDED
A. Customer Activation. Percom will activate long-distance and internet
communication service ("Customer Activation") for the customers of United (the
"Customers") only as requested by United in writing. Customer Activation shall
include activating Customer's accounts and placing appropriate billing
information in the billing database. Additionally, prior to activating a
potential Customer, Percom will cause to be performed a credit check to
determine credit worthiness and future spending limits of a potential customer.
For Customer Activation services, United shall pay compensation to Percom based
on the terms set forth below. With respect to credit checks, to the extent that
Percom directly pays the credit check service provider, United will reimburse
Percom as set forth below.
B. Customer Deactivation. Percom will deactivate long-distance and internet
communication service ("Customer Deactivation") for the Customers only as
requested by United in writing. Customer Deactivation shall include deactivating
Customer accounts and placing appropriate billing information in the billing
database. Customer Deactivation shall be undertaken when a Customer requests to
discontinue service, fails to satisfy the conditions of service, or in other
instances in which United so requests. For Customer Deactivation services,
United shall pay compensation to Percom based on the terms set forth below.
C. Billings. As requested by United, Percom will make all billings and
collections from Customers served by United at rates established from time to
time by United and approved by regulatory bodies, when such approval is
required. Percom shall deposit promptly all such collections to the credit of
United in such bank or banks as United shall designate.
D. Customer Care Payments or Obligations. United will be responsible for
paying all direct expenses for other customer care/retention services and
activities, including without limitation non-recurring charges, expenses arising
from changes to billing databases which are specific to United, programming fees
and software charges directly related to providing current or future customer
care support to the Customers of United. To the extent that Percom directly pays
any of such expenses directly to third parties, United shall reimburse Percom in
accordance with the terms and conditions set forth below.
E. Computer. Percom will provide AS400 computer access to United for its
use. Percom agrees to provide computer service to United for Customer billing.
ARTICLE IV - COMPENSATION
Unless otherwise agreed to by the parties, all services provided by Percom
for the benefit or at the request of United pursuant to this Agreement shall be
charged monthly as follows:
A. Direct labor charges shall be assessed based on time reports of hours
devoted to United at the established rate per hour of each employee involved.
Related labor overhead costs shall be charged to United as a percentage (based
on direct labor) of such costs, including, but not limited to, payroll taxes,
payroll insurance and labor fringe benefits to the direct labor of that month.
B. Transportation costs shall be allocated on miles or hours of use.
C. To the extent practicable, other expenses, reimbursements, or costs
incurred which are directly assignable to United shall be charged directly to
United.
D. The costs of Services performed under this Agreement include, without
limitation:
(i) Where applicable, tariff rates.
(ii) Salaries, wages, fees and other compensation of personnel or
outside consultants performing the Services, including all travel
and other expenses of such personnel and such consultants.
(iii)Land and buildings - occupancy and utility (mortgage, telephone,
heat, light, electric service, etc.), unless otherwise charged to
United.
(iv) Depreciation and/or rental on all office furniture, fixtures,
business machines, postage meters and other specialized equipment
required.
(v) All reasonable maintenance charges and property taxes on office
furniture, fixtures, business machines, postage meters and other
specialized equipment.
(vi) Insurance, including public liability and property damage, and
costs of meeting workers compensation requirements.
(vii)All payroll taxes levied by federal, state, city or other taxing
authorities applicable to employees engaged in performing the
Services.
(viii) Compensation shall be limited to an amount no more or no less
favorable than that amount charged to a third party.
E. All other costs of service provided by Percom to United, not directly
assignable, shall be allocated to United and others on the basis of the FCC Part
32 System of Accounts and the Part 64 cost allocation methodology. If such
methodology is subsequently changed, Percom shall maintain adequate and
sufficient documentation to explain such change.
F. In addition, United will pay Percom Four Thousand and No/100 Dollars
($4,000.00) each and every month of the Term, payable on the first (1st) day of
the month for each month of the Term.
ARTICLE V - RECORDS
A. Access to Records. United, through authorized representatives, shall at
all times during reasonable business hours have access to and the right to
inspect and make copies of any and all books, records and accounts, invoices,
contracts, canceled checks, payrolls and other documents and papers of every
kind held by Percom that pertain in any way to United or its operations.
B. Regular Reports. The parties agree that regular reports, in detail, of
all services provided by Percom for the account of or benefit of United will be
supplied to United in the manner and at all the times which United may
reasonably request.
C. Audit. Percom must maintain books and records to support and document
any fees, costs, expenses or other charges due in connection with this
Agreement. The records must be retained for a period of at least three years
after the fees, costs, expenses or other charges to which such records relate
have accrued and have been paid, or such other longer period as may be required
by applicable law. On reasonable advance notice, Percom must provide reasonable
access to its appropriate records to the independent auditors or other financial
representatives selected by United for purposes of conducting an audit of the
fees, costs, expenses or other charges payable in connection with this
Agreement. United will conduct the audit no more frequently than annually. If
the audit shows that Percom was underpaid, United will, unless the amount of
underpayment is contested, pay to Percom the amount of the underpayment within
ten days after United gives Percom written notice of the determination of the
underpayment. If the audit determines that Percom was overpaid, Percom will,
unless the amount is contested, pay to United the amount of the overpayment
within ten days after United determines that United was overpaid. To the extent
a party contests such overpayment/underpayment, Article XI shall apply. To the
extent that Percom maintains independent books and records regarding the fees,
costs, expenses or other charges due in connection with this Agreement, Percom
must maintain such books and records and provide access rights to United, on the
same terms and conditions as set forth above.
ARTICLE VI - INDEMNIFICATION
A. Indemnification by United. United shall indemnify, defend and hold
harmless Percom and its affiliates, employees, directors, officers, and agents
from and against all claims, demands, actions, causes of actions, damages,
liabilities, losses, and expenses (including reasonable attorney's fees)
incurred as a result of:
(i) claims for damage to property and/or personal injuries (including
death) arising out of the negligence or willful act or omission
of United; and
(ii) United's failure to perform any of its obligations hereunder.
B. Indemnification by Percom. Percom shall indemnify, defend and hold
harmless United and its affiliates, employees, directors, officers, and agents
from and against all claims, demands, actions, causes of actions, damages,
liabilities, losses, and expenses (including reasonable attorney's fees)
incurred as a result of:
(i) claims for damages to property and/or personal injuries
(including death) arising out of the negligence or willful act or
omission of Percom; and
(ii) Percom's failure to perform any of its obligations hereunder.
ARTICLE VII - CONFIDENTIAL INFORMATION
A. Confidentiality. Each party shall each preserve the other party's
confidential information disclosed to each party in connection with the services
provided hereunder with the same degree of care it uses in protecting its own
confidential or proprietary information and shall not disclose, directly or
indirectly, such information to any third party without the prior written
consent of the other party.
ARTICLE VIII - INSURANCE
A. Percom's Insurance Requirements. Percom shall, at its own expense,
obtain and keep in full force and effect at all times for the duration of this
Agreement, with a carrier or carriers reasonably satisfactory to United,
insurance policies of the following kinds and in the following amounts:
(a) Workers' Compensation Insurance in accordance with all applicable
laws;
(b) Employer's liability insurance with limits for employer's
liability of $1,000,000 per accident;
(c) Comprehensive bodily injury and property damage liability
insurance, including automobile insurance and contractual liability
insurance, in at least the following amounts:
Bodily injury to any one person $1,000,000 Bodily injury aggregate per
occurrence $1,000,000 Property damage in any one accident $1,000,000 Property
damages aggregate per occurrence $1,000,000
Upon request of United, Percom shall furnish United certificates of such
insurance and/or copies of the applicable policies.
B. United's Insurance Requirements. United shall, at its own expense,
obtain and keep in full force and effect at all times for the duration of this
Agreement, with a carrier or carriers reasonably satisfactory to Percom,
insurance policies of the following kinds and in the following amounts:
(a) Workers' Compensation Insurance in accordance with all applicable
laws;
(b) Employer's liability insurance with limits for employer's
liability of $1,000,000 per accident;
(c) Comprehensive bodily injury and property damage liability
insurance, including automobile insurance and contractual liability
insurance, in at least the following amounts:
Bodily injury to any one person $1,000,000 Bodily injury aggregate per
occurrence $1,000,000 Property damage in any one accident $1,000,000 Property
damages aggregate per occurrence $1,000,000
Upon request of Percom, United shall furnish Percom certificates of such
insurance and/or copies of the applicable policies.
ARTICLE IX - FORCE MAJEURE
Force Majeure. If the performance of this Agreement is interfered with by
any circumstance beyond the reasonable control of the party affected, including
without limitation governmental authority to grant any consent, approval,
waiver, or authorization or any delay on the part of any governmental authority
in granting any consent, approval, waiver or authorization, manufacturer or
equipment vendor delays or deficiencies (including ability to process correctly
calendar date-related data), delays in repair or maintenance of cell sites due
to restricted access by third parties, delays or barriers to construction or
coverage resulting from local zoning restrictions or frequency coordination
issues with incumbent microwave users, acts of God, such as fire, flood,
earthquake or other natural cause, terrorist events, riots, insurrections, war
or national emergency, strikes, boycotts, lockouts or other labor difficulties,
the party affected by the force majeure is excused on a day-by-day basis to the
extent of the interference, provided that such party shall use its reasonable
best efforts to avoid or remove the causes of such nonperformance.
ARTICLE X - NOTICES
A. Notices. Notices under this Agreement shall be in writing and delivered
by certified mail, return receipt requested, to the persons whose names and
business addresses appear below and such notice shall be effective on the date
of receipt or refusal thereof by the receiving Party.
If to United: United Communications, Inc.
68 E. Main Street
Chillicothe, OH 45601
Attn: President
If to Percom: Horizon Personal Communications, Inc.
68 E. Main Street
Chillicothe, Ohio 45601
Attn: President
ARTICLE XI - DISPUTES; ARBITRATION
A. Voluntary Dispute Resolution. If United has a dispute over the amount of
any fees, compensation, charges or reimbursements due or paid to Percom under
this Agreement, United will nevertheless within the required time for payment
pay all amounts which are not in dispute and supply written explanation of
reasons for disputing the unpaid amount. The parties will cooperate in good
faith to resolve any such disputes within a thirty (30) day period after the due
date of the original charges. If the dispute is not resolved during this period,
then either party may seek arbitration as provided in Section B hereof.
B. Arbitration. Any dispute arising between Percom and United in connection
with this Agreement, which is not settled to the mutual satisfaction of Percom
and United within thirty (30) days (or such longer period as may be mutually
agreed upon) from the date either party informs the other in writing that such
dispute or disagreement exists, shall be settled by arbitration conducted in
Columbus, Ohio in accordance with the Commercial Arbitration rules of the
American Arbitration Association then in effect on the date that such notice is
given. The decision of the arbitrator shall be final and binding upon the
parties and judgement may be obtained thereon by either party in a court of
competent jurisdiction. Each party shall bear the cost of preparing and
presenting its case. The cost of arbitration, including the fees and expenses of
the arbitrator, will be shared equally by the parties unless the award otherwise
provides.
ARTICLE XII - MISCELLANEOUS
A. Assignment. Neither party shall have the right to assign this Agreement
without the consent in writing of the other party; except that at any time
Percom in its sole discretion may assign all of its rights to receive payments
hereunder to a lender in connection with any financing obtained from such
lender.
B. No Partnership. This Agreement does not constitute either party as the
agent or legal representative of the other party and does not create a
partnership or joint venture between United and Percom. Except as provided
herein, neither party shall have any authority to enter into an agreement for or
bind the other party in any manner whatsoever. This Agreement confers no rights
of any kind upon any third party.
C. Entire Agreement. This Agreement sets forth the entire understanding of
the parties and supersedes any and all prior agreements, arrangements or
understandings relating to the subject matter hereof.
D. Severability. If any part of any provision of this Agreement or any
other agreement, document or writing given pursuant to or in connection with
this Agreement shall be invalid or unenforceable under applicable law, said part
shall be ineffective to the extent of such invalidity only, without in any way
affecting the remaining parts of said provision or the remaining provisions of
this Agreement.
E. Governing Law. This Agreement is made pursuant to and shall be construed
and enforced in accordance with the internal laws in force in the State
of Ohio.
F. Press Releases. Neither party shall issue a news release, public
announcement, advertisement, or other form of publicity concerning the existence
of this Agreement or the supplies or services to be provided hereunder without
obtaining the prior written approval of the other party.
G. Amendments. No provision hereof shall be altered, modified, rescinded or
limited except by written agreement expressly referring hereto and to the
provisions so altered, modified and limited and signed by all parties against
whom such modification or limitation is asserted, nor shall any such provision
be modified or limited by course of conduct or by usage of trade.
H. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
UNITED COMMUNICATIONS, INC.
By:____________________________
Name:__________________________
Its:___________________________
HORIZON PERSONAL COMMUNICATIONS, INC.
By:____________________________
Name:__________________________
Its:___________________________