EXHIBIT 10.17
07/20/90
REGIONAL AFFILIATE AGREEMENT
This Agreement is made and entered into between CUE Paging Corporation, a
Delaware corporation, with its principal offices at 0000 Xxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxx ("CUE"), and CR, INC. (COMMUNICATIONS RESOURCES) with its principal
place of business at 0000 X. Xxx. 000, #0000, Xxxxx Xxxxxxx, Xx. 75050
("Affiliate").
Whereas CUE provides National Telecommunications Services using 57 KHz
subcarriers of FM broadcast stations and offers nationwide network services
which qualify under Part 90 of the Federal Communications Commission's Rules and
Regulations;
And whereas, the Affiliate wishes to purchase Airtime and Network services from
CUE to offer nationwide and regional paging services in the Service Area,
identified in Schedule "A";
Now therefore, in consideration of the foregoing and the representations and
warranties contained in this Agreement, the parties agree as follows:
1. SERVICE AREA. CUE hereby grants to the Affiliate the exclusive right to
purchase Airtime and Network services from CUE in the Service Area
identified in Schedule "A" for the purpose of providing regional paging and
the non-exclusive right to purchase Airtime and Network services for the
purpose of providing nationwide paging in the Service Area.
1.1 The Affiliate agrees:
(a) not to provide paging services using the CUE Network to subscribers
not located in the Service Area;
(b) not to use FM subcarrier pagers other than pagers supplied by CUE
pursuant to Paragraph 9 of this Agreement during the first two (2)
years of this Agreement; and
(c) not to use an FM subcarrier Network other than the CUE Network or to
purchase FM subcarrier Airtime from any party
other than CUE during the term of the Agreement unless the CUE Network
does not have sufficient capacity.
2. NETWORK CHARGES. The Affiliate agrees to purchase Network services for FM
subcarrier paging from CUE and to pay CUE:
(a) a one-time installation charge of $ ******** payable on execution of
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this Agreement or on the date the regional FM subcarrier transmitter
commences, whichever is later; and
(b) a monthly charge of $ *******.
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3. AIRTIME CHARGES. The Affiliate agrees to purchase Airtime on the CUE
Network at a rate of $***** per month per pager for nationwide service and
$**** per month per pager for regional service provided that:
(a) the minimum average Airtime charge per pager shall be at least $****
per month; and
(b) the minimum amount paid to CUE for Airtime by the Affiliate shall be
$****** per month per MSA as defined in Schedule "A".
3.1 The Affiliate agrees to provide a list of all pager cap codes in service
in the Service Area and to provide the additions and deletions on the 30th
day of each month thereafter during the term of this Agreement. This
information shall be provided by fax to the fax number specified in
Paragraph 26.
3.2 REGIONAL PAGING DEFINITION. Regional Paging is defined as paging service in
5 contiguous states as defined in Schedule "B".
4. PRICE INCREASES. It is agreed that the monthly Airtime and Network charges
set out in Paragraphs 2 and 3 above shall remain constant for year 1990 at
the prices set out therein. Thereafter, these charges may be increased or
decreased at the sole discretion of CUE, provided that the price increase
in any year will not exceed the increase in the United States All Cities
Consumer Price Index for that year over the previous year.
5. TELEPHONE CHARGES. The Affiliate agrees to pay CUE the amount of $**** per
month for each regional pager using the CUE 800 telephone service. This
charge does not apply if the Affiliate incurs the cost of transmitting the
page to CUE's terminal.
6. SERVICE ESTABLISHMENT. The Affiliate agrees to pay to CUE a fee of $****
each time Affiliate activates a pager.
7. EFFECTIVE DATE. The monthly Network and Airtime charges commence on the
date this Agreement is executed or on the date the regional FM subcarrier
transmitter commences, whichever is later.
8. COOPERATIVE MARKETING PROGRAM. The Affiliate and CUE each agree to fund a
national advertising program by an amount equal to $**** per month per
pager using the CUE network in the MSA. This amount shall be paid monthly
and shall be used to fund national marketing activities of mutual benefit
to the Affiliate and CUE.
9. EQUIPMENT SUPPLY. CUE agrees to supply the Affiliate with pagers which
operate on the CUE Network at a price of $*** per pager, payable within
thirty (30) days of shipment by CUE of such pagers, provided that the
Affiliate:
(a) provides CUE with monthly ninety (90) day rolling forecasts indicating
the number of pagers that the Affiliate desires to purchase or lease
from CUE; and
(b) purchases FM subcarrier pagers exclusively from CUE during the first
two (2) years of this Agreement.
9.1 EQUIPMENT LEASE. CUE will make available a lease program which provides
that the pagers can be leased on a thirty-six (36) month lease at $*** per
month provided that:
(a) the Affiliate meets the usual commercial credit requirements imposed
by third party leasing organizations; and
(b) the Affiliate meets all the requirements specified in Paragraphs 9 (a) and
9 (b).
9.2 ROLLING FORECAST. In each rolling forecast, the number of pagers forecasted
for the first thirty (30) days shall be 100% firm, the number
of pagers forecasted for the second thirty (30) days shall be 75% firm and
the number of pagers forecasted for the third thirty (30) day period shall
be 50% firm.
9.3 The rolling forecast is to be provided by the Affiliate to CUE by the 15th
day of each and every month during the term of this Agreement. The first
rolling forecast will be provided to CUE the fourteenth (14th) day after
the execution of this Agreement.
9.4 PRICE INCREASES. The price for the pager, specified in Paragraph 9 above,
shall remain constant in the years 1990 and 1991 and thereafter may be
changed at the sole discretion of CUE provided that the price change shall
not exceed the charge in the United States All Cities Consumer Price Index
for each year after 1991 over 1990.
10. REGULAR WARRANTY. CUE warrants all pagers supplied hereunder against
defects in material and workmanship. CUE further warrants that the pager
will respond correctly to at least forty-eight (48) of fifty (50) pages
when tested under laboratory conditions (the performance standard). CUE
will repair or replace all pagers sold hereunder that are defective in
material or workmanship warranted under normal conditions of service
(defined as including normal wear and tear, but excluding abuse or improper
treatment) or failure to meet the performance standard at any time within
one year of delivery.
10.1 EXTENDED WARRANTY. CUE will agree to extend the foregoing warranty for one
year periods up to a total of three years for an annual fee not to exceed
10% of the Affiliate's original sales price.
10.2 LIMITATION OF WARRANTY. The aforesaid warranties are expressly in lieu of
all other conditions and warranties, express, implied or statutory,
including without limitation any obligations and liabilities of CUE with
respect to any defect or deficiency applicable to or resulting directly or
indirectly from the products supplied hereunder, whether in contract or in
tort, or otherwise. CUE's warranty liability shall under no circumstances
exceed the invoice price of any product for which the warranty claim is
made, nor shall CUE in any event be liable for consequential or special
damages or lost profits. In the absence of evidence satisfactory to CUE as
to the actual date of sales of any product for use, such date shall for the
purpose of this paragraph be deemed to be sixty (60) days from the date of
sale to the Affiliate.
11. PAYMENT TERMS. Payment for pagers will be due within thirty (30) days of
receipt and in the event of any failure to pay within this term the
Affiliate shall provide CUE with a Letter of Credit in an amount
equal to all future pager orders, which Letter of Credit shall be
implemented prior to shipment.
11.1 Payment for Airtime is due upon receipt of invoice, on the basis of
the number of pagers in service on the 30th day of the previous
month. In the event of failure to pay, the Affiliate shall provide
CUE with a Letter of Credit in an amount equal to all future Airtime
charges, which Letter of Credit shall be implemented prior to the
date of the next invoice.
11.2 The Affiliate agrees to pay CUE interest on any amounts unpaid after
the thirty (30) day period at the rate of prime plus two (2%)
percent. In the event of any failure to pay for pagers or airtime
within the thirty (30) days the Affiliate shall provide CUE with a
Letter of Credit in an amount equal to all future pager orders or
monthly airtime charge, which Letter of Credit shall be implemented
prior to shipment or service.
12 USE OF RESELLERS. Affiliate agrees not to resell or re-lease the
pagers or airtime to any other party unless the other party agrees
in writing to restrict its activities to the Service Area where the
Affiliate is authorized to provide service pursuant to the Agreement
and to be bound by Paragraph 1.1 in this Agreement.
12.1 If the reseller violates this Agreement, the Affiliate agrees upon
receiving notice from CUE to immediately cease the resale or release
of the pager to the reseller contravening the Agreement. The
Affiliate will provide CUE with the name and address of all
resellers the Affiliate has contracted with.
13. NATIONAL ACCOUNTS. The Affiliate agrees to participate in the
National Accounts Program described in Paragraph 13.1 below.
13.1 The Affiliate agrees that the National Accounts specified in the
attached Schedule "C" shall be billed by CUE directly and such
National Accounts shall be CUE owned subscribers provided that:
(a) in the event the Affiliate sells paging services in its MSA
to a National Account, the Affiliate shall receive a one-
time fee of $*** per National Account if;
(i) the Account has not already been signed by CUE as a
National Account;
(ii) the Affiliate signs the National Account to an
agreement on CUE's National Account Program; and
(iii) the aggregate orders in the first six (6) months are
for a minimum of fifty (50) pagers;
(b) the Affiliate will also receive a commission of $***** per month
for each National Account pager sold and installed in the
Affiliate's Service Area so long as such pagers are active and
paid for;
(c) the Affiliate will receive a commission of $**** per month for
each National Account pager signed by the Affiliate where the
pager is located outside the Service Area; and
(d) the Affiliate will receive a service fee of $**** per month per
pager for each National Account pager shipped into the Service
Area as a result of the sale by CUE or another Affiliate to such
National Account.
(e) the above commissions will be reduced to the extent that it is
necessary to reduce the end user price below the rates
established in CUE's Rate Card.
14. NATIONAL MESSAGE CENTER. The Affiliate agrees to provide all
nationwide subscribers with access to the CUE National Voice Message
Center. The Affiliate shall pay to CUE an amount equal to $**** per
minute for use of such services. The Affiliate also agrees to offer to
nationwide subscribers "CUE 800 VOice Messaging on the terms specified
in Schedule "D".
15. DEFAULT. In the event the Affiliate defaults with respect to any of
the terms or conditions of this Agreement, including all amendments
and schedules attached hereto and incorporated herein by reference, or
fails to make any payment required hereunder for thirty (30)
consecutive days, and if within thirty (30) days written notice from
CUE of such violation, the Affiliate does not correct any such
violation, or if such violation is willful, then CUE shall have the
right of cancellation of this Agreement by giving the Affiliate thirty
(30) days written notice. If this occurs, the Affiliate shall transfer
to CUE all of the Affiliate's current subscribers using or being
provided with nationwide of regional services in the Service Area. All
contracts, billing data and other pertinent information shall be
transferred to CUE within ten (10) days of the notice from CUE.
15.1 Upon transferring current subscribers to CUE, and CUE finding such
subscribers current in their payments, the Affiliate shall receive
compensation equal to $****** per pager, which compensation shall be
first applied to any outstanding indebtedness to CUE. In the
occurrence of an Event of Default, the Affiliate not only agrees to
transfer the Affiliate's subscribers to CUE as provided for in Paragraph 15
above, but also agrees to cease using any CUE service xxxx, trademark
and/or name in the Service Area.
16. OTHER AGREEMENTS. The Affiliate agrees not to enter into any agreements
relating to paging except local paging with conpanies engaged in supply of
paging services without CUE's prior written approval.
17. GOVERNMENT REGULATIONS. Services provided under this Agreement by both
parties shall be in accordance with all applicable rules and regulations of
the Federal Communications Commission and any applicable State Regulatory
Commission.
18. CONTROL OF NETWORK. CUE will use its best effort to maintain and improve
the quality of the network, however, it us understood that the control and
responsibility for the standards and quality of nationwide and regional
data distribution services supplied by CUE shall be retained, rest and
remain solely the prerogative and obligation of CUE. No provision of this
Agreement shall be construed as vesting in the Affiliate any control
whatsoever of CUE's radio communications facilities and operations. The
Affiliate shall promptly, upon the day of receipt, report to CUE any
complaints received from subscribers relating to the nationwide or regional
services provided by CUE under this Agreement.
19. SERVICE. Each party shall make reasonable efforts to provide continuous,
uninterrupted and errorless services to the other hereunder, but in no
event shall the providing party be liable to the receiving party for
damages incurred by it or its subscribes on account of any failure to
provide such services. In the event service is discontinued for more than
24 consecutive hours CUE shall provide a credit to the Affiliate equal to
an airtime charge for the period when Service was unavailable.
20. NO REPRESENTATIONS OR WARRANTIES. Except as provided in Paragraph 10 of
this Agreement, the Affiliate shall not make any representations or
warranties, either expressed or implied, in regard to the nationwide and
regional services or pagers provided by CUE hereunder. The nationwide and
regional services and/or pagers shall carry only such warranties as shall
be provided in writing by CUE. CUE MAKES NO WARRANTIES, WITHER EXPRESS OR
IMPLIED, INCLUDING WARRANTIES AS TO
20. NO REPRESENTATIONS OR WARRANTIES. Except as provided in Paragraph 10 of
this Agreement, the Distributor shall not make any representations or
warranties, either expressed or implied, in regard to the nationwide and
regional services or pagers provided by CUE hereunder. The nationwide and
regional services and/or pagers shall carry only such warranties as shall
be provided in writing by CUE. CUE MAKES NO WARRANTIES, EITHER EXPRESS OR
IMPLIED, INCLUDING WARRANTIES AS TO MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO THE NATIONWIDE AND REGIONAL SERVICES OR
THE PAGERS PROVIDED HEREUNDER.
21. INDEPENDENT CONTRACTORS. The respective parties hereto are independent
contractors and nothing herein shall be deemed to create a relationship of
partnership, joint venture, principal and agent or franchisee. The
Agreement does not entitle either party to make commitments of any kind for
the account of the other party as agent or otherwise or to assume or create
any obligations, express or implied, on behalf of the other party, or to
bind the other party in any respect and each agrees to and will indemnify
and hold the other party harmless in this regard.
22. COVERAGE OF SIGNAL. CUE's Nationwide Network shall provide adequate
coverage for nationwide and regional paging services in the Service Area to
the Distributor. CUE will expand the coverage in the Service Area at the
request of the Distributor provided the Distributor and CUE mutually agree
on the appropriate increase in the local Distributor charge.
23. TERMINATION. If the Distributor violates any provisions of this Agreement,
including all amendments and exhibits hereto, or fails to perform any
obligations hereunder and if upon being given thirty (30) days' written
notice by CUE of such violation, the Distrubutor does not correct any such
violations, or if such violation is willful, then CUE shall have the right
of cancellation of this Agreement by giving the Distributor sixty (60)
days' written notice. If this occurs, CUE shall have the right to require
the Distributor to transfer its subscribers to CUE in accordance with the
provisions of Paragraph 14 above.
23.1 If CUE violates any provision of this Agreement or fails to perform any
obligations hereunder and if upon being given thirty (30) days' written
notice by the Distributor or such violations CUE does not correct any such
violation, or if such violation is willful, then the Distributor shall have
the right of cancellation of this Agreement by giving CUE sixty (60) days'
written notice.
23.2 Notwithstanding the provision of Paragraph 22 above, the Agreement shall
automatically terminate, at the option of CUE, upon the occurrence of (1)
the Distributor ceasing to provide nationwide or regional services
hereunder for any reason, (2) the Distributor making any general assignment
or trust mortgage for the benefit of creditors or is adjudged a bankrupt.
In such event, CUE shall have an immediate right to cancel this Agreement.
23.3 The parties recognize that the services offered by both parties are
communications services and that the termination of this Agreement cannot
be permitted to interfere with the continuity of such services to all
subscribers. Therefore, termination of this Agreement shall be effected in
such "best efforts" manner by both parties as to avoid, insofar as
possible, that if upon default the Distributor does not transfer the
subscribers to CUE as provided in paragraph 14 above, CUE may immediately
deactivate or invalidate the Distributor's subscribers upon notice to the
Distributor.
24 DISCONTINUANCE OF OPERATIONS. In the event that CUE decides for any reason
to discontinue Network operations or services provided hereunder, CUE
shall:
(a) give the Distributor at least ninety (90) days' notice of
discontinuance of operation;
(b) if requested, assign any FM subcarrier agreements used to provide
service in the Service Area to the Distributor; and
(c) offer to sell the Distributor, at the then depreciated cost, any
equipment located at the radio station, necessary to operate on the FM
subcarrier paging system.
23.3 The Parties recognize that the services offered by both parties are
communications services and that the termination of this Agreement
cannot be permitted to interfere with the continuity of such services
to all subscribers. Therefore, termination of this Agreement shall be
effected in such "best efforts" manner by both parties as to avoid,
insofar as possible, any interuption of services to subcribers
provided, however that if upon default the Affiliate does not transfer
the subscribers to CUE as provided in paragraph 15 above, CUE may
immediately deactivate or invalidate the Affiliate's subscribers upon
notice to the Affiliate.
24. DISCONTINUANCE OF OPERATIONS. In the event that CUE decides for any
reason to discontinue Network operations or services provided
hereunder, CUE shall;
(a) give the Affiliate at least ninety (90) days notice of
discontinuance of operation;
(b) if requested, assign any FM subcarrier agreements used to provide
service in the Service Area to the Affiliate; and
(c) offer to sell the Affiliate, at the then depreciated cost, any
equipment located at the radio station, necessary to operate on
the FM subcarrier paging system. If the Affiliate elects to
purchase the radio station equipment pursuant to this paragraph;
the Affiliate shall receive a credit up to the amount or the one
time Network charge paid under paragraph 2(a) of this Agreement
or a similar provision under a previous agreement.
25. TRADENAMES. The Affiliate shall provide nationwide and regional paging
services under its own name provided that whenever the Affiliate
advertises paging services, the advertisement shall contain the
following logo:
[LOGO OF NATIONWIDE NETWORK APPEARS HERE]
25.1 Any other use of the CUE name or logo requires the prior written
approval of CUE.
26. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or
by certified mail, return receipt requested, or mailed to the
parties at the following addresses:
If to the Affiliate: CR, INC. (COMMUNICATIONS RESOURCES)
ATTN: President
X.X. Xxx 000000
Xxxxxxxxx, Xxxxx 00000
FAX (000) 000-0000
If to CUE: CUE Paging Corporation
Attention: President
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Fax No. 000-000-0000
27. ASSIGNMENT. This Agreement and the rights granted may not be
assigned or transferred in whole or in part by the Affiliate
without prior written consent of CUE, which consent will not be
unnecessarily withheld. Such consent shall also be required in
the event that the controlling shareholder interest in the
Affiliate changes which consent will not be unreasonably
withheld. This Agreement shall be binding upon and adhere to the
benefit of the parties hereto and their approved successors and
assigns.
27.1 Consent is not required in the case of a transfer to a related
party. A Related Party is defined as a party in which the
Affiliate has a controling shareholder interest.
27.1 In the case of a transfer to a non-related party, CUE shall have
a first right of refusal to acquire the interest in the Agreement
or interest in the Affiliate on terms identical to those agreed
to by the non-related party. CUE must exercise this first right
of refusal within thirty (30) days of being given notice by the
Affiliate, which notice must contain the terms on which the
purchaser has agreed to acquire the Agreement or Affiliate.
28. SEVERABILITY. If any of the provisions contained in this
Agreement are deemed invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired hereby.
29. MISCELLANEOUS. This Agreement, including all amendments, and
schedules;
(a) constitutes the entire Agreement between the parties pertaining to the
subject matter hereof and supersedes all prior agreements and
understandings, both written and oral. Any variation of this Agreement
must be made in writing and signed by both CUE and the Affiliate;
(b) except as expressly stated herein, is not intended to and shall not
confer upon any other person any rights or remedies hereunder or
otherwise with respect to the subject matter hereof; and
(c) shall be governed by the laws of the State of New York.
30. TERM. The term of this Agreement is ten (10) years, subject to renewal for
a further ten year term at the option of the Affiliate if the Affiliate is
not in default in any payment or the terms and conditions of this Agreement
at the renewal date. The Affiliate shall give CUE 180 days notice if the
Affiliate intends to renew.
IN WITNESS wherever the parties hereto have caused this Agreement to be
executed by their duly authorized officers this 20 day of August, 1990.
CUE PAGING CORPORATION
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Witness Title: Chairman
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CR, INC. (COMMUNICATIONS RESOURCES)
/s/ Xxxx Xxxxxxxxx By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Witness Title: President
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SCHEDULE "A"
SERVICE AREA
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MARKET MSA NO
DALLAS/FT. WORTH 009
SCHEDULE "B"
DEFINITION OF REGION
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TEXAS, NEW MEXICO, OKLAHOMA, ARKANSAS, LOUISIANA
SCHEDULE "C"
NATIONAL ACCOUNTS
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National Accounts are defined as:
(a) All Corporations and subsidiaries listed in the annual Fortune "500"
list published by Fortune Magazine and,
(b) the Federal Government
SCHEDULE "D"
CUE 800
CUE provides both paging and non-paging subscribers with CUE 800 Message Service
on the terms listed below. CUE Distributors are entitled to act as Resellers of
the service and receive rebates and monthly residuals indicated in the Reseller
Rebate Schedule. All accounts will be billed directly by CUE.
A. SERVICE DESCRIPTION
THE 1-800 NETWORK (BASIC SERVICE) INCLUDES:
YOUR OWN PERSONAL 1-800 NUMBER
Unlimited calls
Voice Mailbox capable of:
60 Messages
5 Minutes in length max
7 Day hold time if the message is "Played"
14 Day hold time if the message is "Unplayed"
ADDITIONAL FEATURES INCLUDE:
. Toll Saver
. Speed Dial
. Directories
. Bulletin Boards
. "Make a Message" for others in the network
. "Make a Message" for Groups of users in the network
. "Give a Message" to other users in the network
. Rotational Boxes (for additional message storage over 60 min
. Time and Date stamp on all messages received
B. SERVICE RATE SCHEDULE
Subscription Fee (One time)....................$*****
1-800 Network (Basic Service) per month........$*****
Plus ************** U.S. Origination or
************** Canadian Origination (U.S. Dollars)
C. RESELLER REBATE SCHEDULE:
PRODUCT OF SERVICE RATE OF CHARGE RESELLER PERCENT OR REBATE
Subscriber installation fee not to exceed ****************
$****** installation
$*************
*************
******************
********
1-800 based voice phone Currently ***************
service/user fees $*********** ******************
****************
The ***************************************** shall be paid to Reseller by CUE
on or before the 15th day of each calendar month for prior months receipts.
Reseller will collect from subscriber a ********************************
**************** as well as a completed application, and immediately submit all
directly to CUE. Upon receipt of all good funds, CUE will return subscriber
***************** as stated above in Reseller Percent or Rebate Schedule to
Reseller.
For the purpose of this Agreement, "net usage" shall be defined as subscriber's
1-800 usage fees less telephone use expenses and bad debt.
Amendment to Regional Affiliate Agreement
Dated July 24, 1990
The following clause is added to the said agreement:
31. "Most Favored Nation. CUE agrees that all Affiliates will be required to
enter an agreement substantially the same as this Agreement and if more
advantageous terms or prices are offered to any other Affiliate such terms shall
be immediately offered to all Affiliates.
Agreed to this twenty-fourth day of July, 1990 by Cue Paging Corporation and
Communications Resources.
CUE PAGING CORPORATION COMMUNICATIONS RESOURCES
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxx Xxxxxxx
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Chairman President
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