1. DEFINITIONS

“Service(s)” means provisioning of voices services, Internet access (including Shared Bandwidth and Dedicated lines), IP addressing, email, VPNs, firewalls, hosting, server collocation, hardware sales and all related support services.

1.1 “Software” means any computer programs or code, software applications, and any other software provided by TelxVoIP to Customer pursuant to this Agreement.

2. SERVICES AND EQUIPMENT

2.1 TelxVoIP Services. TelxVoIP shall provide the Services to Customer on the terms and conditions set forth in this Agreement. TelxVoIP’s obligations under this Agreement are expressly conditioned upon Customer’s landlord granting TelxVoIP or it’s designated agents, contractors or representatives access to the building phone room and roof areas as necessary in TelxVoIP’s judgment to deliver the Services and to install and maintain equipment.

2.2 Required Equipment. Customer understands and agrees that the Service requires certain equipment provided by Customer such as a sip aware access device, personal computer, an Ethernet card and an appropriate operating system (the “Customer Equipment”), as well as certain equipment provided by TelxVoIP such as the Software, an edge access device, an IP phone or media converter (the “TelxVoIP Equipment”). Customer represents that it owns the Customer Equipment or otherwise has the right to use such equipment in connection with the Service.

2.3 Access to Customer’s Premises. Customer authorizes TelxVoIP and its employees, agents, contractors and representatives to enter Customer’s premises (the “Premises”) to install, maintain, inspect, alter, repair and remove the TelxVoIP Equipment. All such services shall be conducted at a time agreed to with Customer. If Customer is not the owner of the Premises, upon TelxVoIP’s request Customer shall supply TelxVoIP with the owner’s name and address, evidence that the Customer is authorized to grant access to the Premises on the owner’s behalf, and (if needed) written consent from the owner of the Premises. Customer also grants its consent to TelxVoIP to contact such owner for the purpose of entering into one or more Right of Access and/or Site Lease(s). If Customer does not provide access as provided herein, TelxVoIP shall, at its option, a) declare the full amount for the entire term due and payable immediately, or b) elect to terminate this agreement.

2.4 Ownership of Equipment. All TelxVoIP Equipment and Software shall at all times remain the property of TelxVoIP or its designee. Customer may not sell, transfer, lease, encumber or assign all or part of the TelxVoIP Equipment or Software, nor shall Customer relocate the TelxVoIP Equipment outside the Premises. Customer shall pay to TelxVoIP the full manufacturer’s suggested retail price for the replacement of any lost, stolen, unreturned, damaged, sold, transferred, leased, encumbered or assigned TelxVoIP Equipment or part thereof, together with any incidental costs incurred by TelxVoIP relating to the replacement of the TelxVoIP Equipment. Customer hereby authorizes TelxVoIP to charge Customer’s Visa, MasterCard, or other credit card for any such charges. TelxVoIP may, at its option, install new or reconditioned TelxVoIP Equipment.

2.5 Back-up Requirements. The installation, use, inspection, alteration, maintenance, repair or removal of the TelxVoIP equipment and software may result in service outage or potential damage to Customer’s Equipment. If Customer does not back-up all existing computer files by copying them to another storage medium prior to such activities, Customer understands and accepts the associated risks of not making such a backup. IN ANY EVENT, EXCEPT AS SET FORTH IN SECTION 2.7 BELOW, TelxVoIP SHALL HAVE NO LIABILITY WHATSOEVER FOR ANY DAMAGE TO OR LOSS OR DESTRUCTION OF THE CUSTOMER’S EQUIPMENT, PERIPHERALS, SOFTWARE OR DATA.

2.6 Non-recommended Configuration. TelxVoIP has informed Customer of the recommended minimum computer hardware requirements, if any, (the “Minimum Requirements”) for efficiently operating the Service. If Customer allows the installation of the Service utilizing hardware that does not meet the Minimum Requirements (a “Non-recommended Configuration”), Customer agrees that (i) Customer shall not be entitled to Customer support relating to any issues other than the quality of the signal delivered to Customer’s IP phone or media converter, and (ii) the following limitations of liability shall apply: TelxVoIP DOES NOT REPRESENT OR WARRANT THAT A NON-RECOMMENDED CONFIGURATION WILL ENABLE CUSTOMER TO SUCCESSFULLY ACCESS, OPERATE OR USE THE SERVICE, NOT THAT ANY SUCH INSTALLATION WILL NOT CAUSE DAMAGE TO THE CUSTOMER’S EQUIPMENT, PERIPHERALS, SOFTWARE OR DATA. TelxVoIP DOES NOT ASSUME ANY LIABILITY WHATSOEVER FOR ANY DAMAGE OR FAILURE TO INSTALL, ACCESS OR USE THE SERVICE. The foregoing limitation of liability is in addition to and shall not limit any other limitation of liability set forth in this Agreement.

2.7 Customer’s Hardware and Software. Except for gross negligence or willful misconduct by TelxVoIP, TelxVoIP shall have no liability whatsoever for any damage, loss or destruction to Customer’s Equipment or peripherals. In the event of such gross negligence or willful misconduct by TelxVoIP, TelxVoIP shall pay for the repair or replacement of the damaged parts up to a maximum of One Thousand Dollars ($1,000) and such amount shall be Customer’s sole remedy. TelxVoIP SHALL HAVE NO LIABILITY WHATSOEVER FOR ANY DAMAGE TO OR LOSS OR DESTRUCTION OF ANY SOFTWARE, FILES OR DATA. Customer acknowledges that the opening of Customer’s computer may void warranties provided by the computer manufacturer or other parties relating to the computer’s hardware or software. Customer consents to the opening of the computer for installing and providing the Service. TelxVoIP SHALL HAVE NO LIABILITY WHATSOEVER AS THE RESULT OF THE VOIDING OF ANY SUCH WARRANTIES.

3. INSTALLATION AND SOFTWARE LICENSES

3.1 Installation Process. TelxVoIP or its agents will supply and install the TelxVoIP Equipment within the Premises.

3.2 File Modification. As part of the installation process, system files on Customer’s computer may be modified. TelxVoIP does not represent, warrant nor covenant that such modifications will not disrupt the normal operations of Customer’s computer. For these and other reasons, TelxVoIP recommends, and Customer agrees, that Customer will back-up all files in accordance with Section 2.5 above prior to installation of the Service. If Customer does not back-up all existing computer files, Customer understands and accepts the associated risks of not doing so. TelxVoIP SHALL HAVE NO LIABILITY WHATSOEVER FOR ANY DAMAGE RESULTING FROM THE ABOVE OR OTHER FILE MODIFICATIONS.

3.3 Viruses. TelxVoIP may run a third party virus check software on Customer’s computer prior to installing software and setting up the Service on Customer’s computer. TelxVoIP does not represent, warrant nor covenant that the virus check software will detect or correct any or all viruses. If a virus or other harmful feature is detected, and Customer does not authorize TelxVoIP to attempt to remove the same, the installation of the Service will be discontinued and this Agreement shall terminate. In addition, software or other content downloaded from the Service could contain a virus or other harmful feature, and it is Customer’s sole responsibility to take appropriate precautions to protect Customer’s computer from damage to its software, files or data. TelxVoIP SHALL HAVE NO LIABILITY WHATSOEVER FOR ANY DAMAGE TO OR LOSS OR DESTRUCTION OF ANY SOFTWARE, FILES OR DATA RESULTING FROM ANY VIRUS OR OTHER HARMFUL FEATURE.

3.4 Software.

3.4.1 Non-exclusive License. If Software is provided by TelxVoIP, TelxVoIP grants to Customer a limited, non-exclusive license to use the Software, in object code form only, solely for the purpose of connecting Customer’s computer(s)or sip aware device to the Service. This license will permit such use by Customer and any person authorized by Customer to use the Service, provided that Customer shall be responsible for all uses of the Service as provided in this Agreement. This license will commence upon TelxVoIP’s acceptance of Customer’s subscription for the Service and will terminate immediately upon the expiration or termination of this Agreement for any reason. Customer will destroy all Software and any related written material, together with any copies, promptly upon the expiration or termination of this Agreement for any reason.

3.4.2 Copies. Customer may make a single copy of the Software solely for back-up purposes, provided that such copy contains the same copyright notices and proprietary markings as the original Software. Customer cannot engage in, nor permit, any other copying, or any translation, reverse engineering or reverse compiling, disassembly or modification of or preparation of any derivative works based on the Software, all of which are prohibited.

3.4.3 End User Licenses. Customer agrees to comply with the terms and conditions of all end user license agreements accompanying any software or plug-ins to such software distributed in connection with the Service. All end user licenses shall immediately terminate on the date that the Service expires or is otherwise terminated.

3.4.4 Ownership of Equipment. All Telxvoip Equipment and Hardware shall at all times remain the property of Telxvoip or its designee. Customer may not sell, transfer, lease, encumber or assign all or part of the Telxvoip Equipment or Hardware, nor shall Customer relocate the Telxvoip Equipment outside the Premises. Customer shall pay to Telxvoip the full manufacturer’s suggested retail price for the replacement of any lost, stolen, unreturned, damaged, sold, transferred, leased, encumbered or assigned Simple Signal Equipment or part thereof, together with any incidental costs incurred by Telxvoip relating to the replacement of the Telxvoip Equipment. Customer hereby authorizes Telxvoip to charge Customer’s Visa, MasterCard, or other credit card for any such charges. Telxvoip may, at its option, install new or reconditioned Telxvoip Equipment.

4. PAYMENT

4.1 Fixed Monthly Service Fees. The cost for Services requiring a fixed monthly fee shall be as stated in the Customer Sales Order and shall be payable monthly, in advance, plus all applicable taxes, tariffs, governmental assessments, surcharges and fees (collectively, the “Fixed Service Fee(s)”). The Fixed Service Fee for the first month of Service shall be due and payable prior to installation of Service and if commencement of Service occurs on other than the first calendar day of the month then the Fixed Service Fee will be prorated by the number of calendar days remaining in the month. Thereafter, the Fixed Service Fee is due and payable in advance on the first day of each month and shall be considered late if not received by TelxVoIP by the tenth calendar day of each month.

4.2 Variable Monthly Usage Fees. The cost for Services computed based on the usage by Customer and other variable factors shall be computed at the rates stated in the Customer Sales Order and shall be payable monthly, using a cut-off date selected by TelxVoIP, in arrears, plus all applicable taxes, tariffs, governmental assessments, surcharges and fees (collectively, the “Usage Fee(s)”). The rates for voice services set forth in the Sales Order shall be valid for the initial term, provided however, all rates for International Services are subject to change on five calendar days notice from TelxVoIP. New rates are automatically effective on the 6th day from the date of such notice. TelxVoIP, upon 10 days notice, can adjust the rates for voice services to include the cost, if any, of tariffs, taxes or assessments imposed upon TelxVoIP by any governmental agency. The Usage Fees are due and payable on the first day of the month billed and shall be considered late if not received by TelxVoIP by the tenth calendar day of such month.

4.3 Installation Charge and Security Deposit. The charge for Installation shall be as stated in the Sales Order and shall be due and payable prior to installation. Charges for Advanced Installation are detailed in the Sales Order. An equipment deposit for TelxVoIP Equipment to be used in the Customer Premises shall be as stated in the Sales Order and shall be due prior to installation and shall be refunded to Customer upon termination of service, provided said TelxVoIP Equipment is returned in good working condition.

4.4 Agreement to Pay. Monthly payments and any other amounts due to TelxVoIP may be charged to Customer’s Visa, MasterCard, American Express or other credit card, and/or electronically debited to Customer’s bank account, at Customer’s option. Customer agrees to pay all monthly Service Fees, Usage Fees, the Installation Charge, and Equipment Deposit. Customer hereby authorizes TelxVoIP to charge Customer’s Visa, MasterCard or other credit card and/or to electronically debit Customer’s bank account for all such fees, charges, taxes and payment transaction processing costs.

4.5 Late Payments/Failure to Pay. If any payment due to TelxVoIP is not received within 10 days of due date, an administrative charge of 5% of the amount due may be assessed and the Service may be discontinued. If the Service is discontinued, Customer will be required to pay a reconnect fee of $200.00 in addition to all past due amounts before the Service is reconnected. The administrative charge is intended to be a reasonable advance estimate of TelxVoIP’s costs resulting from Customer’s late payments and non-payments, and is set in advance due to the difficulty inherent in determining the costs associated with any particular late payment or non-payment. TelxVoIP does not anticipate that Customer will fail to make payments on a timely basis. TelxVoIP does not extend credit to its Customer, and the administrative charge is not interest, a credit service charge nor a finance charge. In the event TelxVoIP, at its sole discretion, elects to use the services of a third party collection agency, the costs of such third party collection agent shall be paid by the Customer.

4.7 Price Changes. TelxVoIP has the right to change its Service Fee at any time and upon 30 days advance notice unless otherwise stated in the Sales Order.

4.8 Additional Charges. The Service may allow Customer to access the Internet, on-line services and other information. Customer acknowledges that Customer may incur charges while using the Service in addition to those billed by TelxVoIP. For example, Customer may incur charges as a result of accessing certain on-line services or purchasing or subscribing to certain other offerings. Customer agrees that all such charges, including all applicable taxes, are the sole responsibility of Customer.

4.9 Credit Inquiries. Customer authorizes TelxVoIP to make inquiries and to receive information about Customer’s credit experience from others, enter this information in Customer’s file, and disclose such information concerning Customer to appropriate third parties for reasonable business purposes. TelxVoIP reserves the right, in its sole discretion, to refuse to provide Service based upon lack of creditworthiness, or in the alternative to require a security deposit that will be returned to Customer, without interest thereon, upon the expiration or termination of Services assuming all amounts due TelxVoIP have been paid in full. TelxVoIP shall have the right to offset against the security deposit, in part or in full, for any amounts due TelxVoIP.

4.10 Prepayment Option. Customer may prepay any Fixed Monthly Service Fees for 12 months and receive a discount of 5%. The amount due shall be the then current monthly fee multiplied by twelve multiplied by 95%. Upon early termination the refund due shall be prorated using the calculation set forth in Section 7.1 and the monthly rate upon which the prepayment was calculated.

5. CUSTOMER CONDUCT

5.1 Prohibited Uses. Customer shall not use the Service or the TelxVoIP Equipment, directly or indirectly;

5.1.1 for any unlawful purposes; use of the Service for transmission or storage of any information, data or material in violation of any United States federal, state or local regulation or law is prohibited, such limitation shall include, without limitation, posting or disseminating content which is obscene, unlawful, threatening, defamatory, or infringes upon the intellectual property rights of any third party;

5.1.2 to post, transmit or disseminate objectionable information, including, without limitation, any transmissions constituting or encouraging conduct that would constitute a criminal offense, give rise to civil liability, or otherwise violate any local, state, federal or international law or regulation;

5.1.3 to access any other person’s computer, software or data without the knowledge and consent of such person;

5.1.4 to upload, post, publish, transmit, reproduce, create derivative works of, or distribute in any way, information, software or other material obtained through the Service which is protected by copyright or other proprietary rights without obtaining permission from the owner(s);

5.1.5 to copy, distribute, or sublicense any software provided by TelxVoIP, except that Customer may make one copy of each software program for back-up purposes only;

5.1.6 to service, alter, modify or tamper with the TelxVoIP Equipment or Service or permit any other person to do the same unless such person is authorized by TelxVoIP to do so;

5.1.7 to restrict, inhibit or otherwise interfere with the ability of any other person to use or enjoy the Service, including, without limitation, posting or transmitting any information or software which contains a virus or other harmful feature, or generating levels of traffic sufficient to impede others’ ability to send or retrieve information;

5.1.8 to knowingly disrupt the Service;

5.1.9 to resell the Service or otherwise charge others to use the Service; the Service is for personal use only and Customer agrees not to use the Service for operation as an Internet service provider or for any other business enterprise in competition with the Service;

5.1.10 to connect the sip aware access device or media converter to any computer outside of Customer’s Premises;

5.1.11 to allow or provide access to adult content material to anyone under the age of 18 years.

5.1.12 Fair Usage Policy. Calls to phones and mobile calls are included in your subscription subject to a fair usage limit of 2,000 minutes per subscriber line (sip trunk or hosted seat) per month. Once these limits are exceeded TelxVoIP will charge the appropriate VT rates for any additional minutes used. Subscriptions are for individual use only. Each subscription is to be used by one person only and is not to be shared with any other user (whether via a PBX, call center, computer or any other means). International rates (outside the U.S. and Canada) are charged at the rates stated on our international rate deck and subject to change at any time. TelxVoIP reserves the right to change this fair usage policy at any time. Your continued use of your subscription after expiry of the 30-day period shall constitute your acceptance to be bound by the terms and conditions of the TelxVoIP fair usage policy.

5.1.13 Call Flooding.To protect the integrity if its network, TelxVoIP may in its reasonable discretion, and without liability for damages of any type to Customer, its affiliates or End Users, temporarily block duplicate or repeated numbers dialed in succession, where TelxVoIP considers the number of attempts to be potentially harmful to the network.

5.2 Termination. TelxVoIP reserves the right to immediately terminate this Agreement and the Service if Customer engages in any of the activities listed in Section 5.1 above or if Customer uses the Service or TelxVoIP Equipment contrary to any other TelxVoIP policy. Copies of such policies may be posted online at www.TelxVoIP.com. This Section 5.2 shall in no way limit TelxVoIP’s rights of termination pursuant to Section 7.2 of this Agreement. Customer agrees to indemnify, defend and hold harmless TelxVoIP against all claims and expenses (including reasonable attorneys’ fees) resulting from Customer’s use of the Services, including, without limitation, the activities listed in Section 5.1 above, or from any other violation of TelxVoIP policies by Customer. This provision shall survive the expiration or other termination of this Agreement.

6. SERVICE INTERRUPTIONS

6.1 Prorated Credit. Except as otherwise required by law, Customer is entitled to a prorated credit upon request only in the event of a complete failure of the Service due to technical malfunction of the system or network operated by TelxVoIP for a period of twenty-four (24) consecutive hours or more. To obtain a credit, Customer must request a credit in writing from TelxVoIP within thirty (30) days of the failure. Credits shall be applied against future fees payable by Customer for the Service.

6.2 Force Majeur. TelxVoIP shall have no liability, including as set forth in this Section, for interruption of the Service due to circumstances beyond TelxVoIP’s control, including, without limitation, acts of God, flood, natural disaster, regulation or governmental acts, fire, civil disturbances, strike or weather.

7. AUTOMATIC RENEWAL AND TERMINATION

7.1 Termination by Customer. The Terms of this Agreement shall be as stated in the Sales Order beginning on the date of Installation and shall automatically renew for a period equal to the initial term on each anniversary unless written notice of cancellation is received by TelxVoIP thirty days prior to the end of each Term. For Shared Bandwidth Services only, Customer may terminate this Agreement at any time after the first ninety (90) days of Service provided a) Customer gives thirty (30) days advance written notice and b) such notice is delivered to TelxVoIP along with an early termination fee (“Shared Bandwidth Early Termination Fee”) equal to the Fixed Service Fee specified in the Sales Order multiplied by the lesser of i) three (3) or ii) the number of months remaining in the initial term or any extension thereof. For all other Services billed by a Fixed Service Fee, Customer may only terminate prior to the end of the Term stated in the Sales Order by giving written notice to TelxVoIP and by payment of a Fixed Service Fee Termination Amount equal to the number of months remaining in the Term times the amount of the monthly Fixed Service Fee (“Fixed Service Fee Termination Amount”). For Services billed pursuant to Usage Fees Customer may only terminate prior to the end of the Term stated in the Sales Order by giving written notice to TelxVoIP and by payment of a Usage Fee Termination Amount equal to the number of months remaining in the Term times the average of the prior three (or if less than three months have elapsed, using the actual number of months elapsed) month’s Usage Fees (“Usage Fee Termination Amount”). All such types of Termination Fees described herein shall collectively or individually be known as Termination Fee(s). ANY TERMINATION NOTICE RECEIVED BY TelxVoIP WHICH IS NOT ACCOMPANIED BY THE PAYMENT OF THE APPLICABLE TERMINATION FEE SHALL BE NULL AND VOID;

7.2 Termination by TelxVoIP. TelxVoIP may terminate this Agreement immediately should Customer violate any of the terms of this Agreement. TelxVoIP may also terminate this Agreement for any other reason by providing Customer with written notice of such termination no later than thirty (30) days before the date of termination. In the event that TelxVoIP terminates this Agreement for any reason other than Customer’s violation of the provisions of Section 5.1, Service Fees and other charges will continue to accrue through the date of termination, but all prepaid Service Fees and charges for cancelled Service will be refunded. If termination is due to violation of the provisions of Section 5.1, the termination amount will be equal to the number of months remaining in the Term times the amount of the monthly Fixed Service Fee;

7.3 Customer Obligations. Customer agrees that upon termination of this Agreement;

7.3.1 Customer will pay TelxVoIP in full for Customer’s use of the Service and TelxVoIP Equipment up to the later of (i) the effective date of termination of this Agreement or (ii) the date on which the Service and the TelxVoIP Equipment have been disconnected and returned to TelxVoIP. Customer agrees to pay TelxVoIP on a prorated basis for any use by Customer of the Service or TelxVoIP Equipment for a part of a month;

7.3.2 Customer will permit TelxVoIP, its employees, agents, contractors and representatives to access Customer’s Premises during regular business hours to remove the TelxVoIP Equipment and other materials furnished by TelxVoIP;

7.3.4 Customer will ensure the return of all TelxVoIP Equipment to TelxVoIP. Customer will return or destroy all copies of any software provided to Customer pursuant to this Agreement. If the TelxVoIP Equipment is not returned, Customer agrees to pay the charges referred to in Section 2.4 above and TelxVoIP shall have the right to charge such amounts to Customer’s Visa, MasterCard or other credit card, or to electronically debit Customer’s bank account;

7.3.5 Customer, upon request by TelxVoIP made not more frequently than monthly, shall provide information regarding the number of desktop and/or portable computers connected to the TelxVoIP Service during any month.

7.4 Retention of Rights. Nothing contained in this Agreement shall be construed to limit TelxVoIP’s rights and remedies available at law or in equity. TelxVoIP reserves the right to delete all data, files, electronic messages or other information any reason. arising out of or related in any way to the use of the Service and/or TelxVoIP Equipment by Customer or otherwise arising out of the use of Customer’s computer.

7.5 Survival. The terms set forth in Sections 2,3,and 4 shall survive the termination of this Agreement.

8. CONTENT

There may be some content on the Internet or otherwise available through the Service which may be offensive to some individuals or which may not be in compliance with all local, state, or federal laws, regulations, and other rules. TelxVoIP assumes no responsibility for the content contained on the Internet or otherwise available through the Service. All content accessed by the Customer through the Service is access and used by the Customer at Customer’s own risk and TelxVoIP and each of its representatives, affiliates, subcontractors, employees, and agents, shall have no liability whatsoever for any claims, losses, actions, damages, suits, or proceedings arising out of or otherwise relating to access to such content by the Customer or the Customer’s employees, affiliates, agents, or representatives. TelxVoIP specifically disclaims any responsibility for the accuracy, quality, and confidentiality of information obtained through the Service.

9. MULTIPLE USERS

Customer acknowledges that Customer is executing this Agreement on behalf of all persons who use the Service and/or TelxVoIP Equipment through Customer’s computer(s), phone systems, PBXs and other telecommunications equipment. Customer shall have sole responsibility for ensuring that all such other users understand and comply with the terms and conditions of this Agreement. Customer further acknowledges and agrees that Customer is solely responsible and liable for any and all breaches of the terms and conditions of this Agreement whether such breach is the result of use of the Service and/or the TelxVoIP Equipment by Customer or any other user of Customer’s computer(s), phone systems, PBXs and other telecommunications equipment. Customer agrees to indemnify, defend and hold harmless TelxVoIP against all claims and expenses (including reasonable attorneys’ fees) arising out of the use of the Service and/or TelxVoIP Equipment by any other user of Customer’s computer(s), phone systems, PBXs and other telecommunications equipment.

10. IP ALLOCATION

10.1 Exclusions. UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT OR OTHERWISE PROHIBITED BY LAW, NEITHER TelxVoIP, ITS OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS, NOR ANY OWNER OR MANAGER OF THE BUILDING OR LAND IN WHICH CUSTOMER’S PREMISES IS LOCATED SHALL HAVE ANY LIABILITY TO CUSTOMER OR TO ANY THIRD PARTY FOR:

10.1.1 ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL LOSSES OR DAMAGES, INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, LOSS OF EARNINGS OR LOSS OF BUSINESS OPPORTUNITIES, RESULTING DIRECTLY OR INDIRECTLY OUT OF, OR OTHERWISE ARISING IN CONNECTION WITH, THE USE OF THE SERVICE BY CUSTOMER OR ANY OTHER USE OF THE TelxVoIP EQUIPMENT OR SOFTWARE, INCLUDING, WITHOUT LIMITATION, ANY DAMAGE RESULTING FROM OR ARISING OUT OF CUSTOMER’S RELIANCE ON OR USE OF THE SERVICE OR TelxVoIP EQUIPMENT OR SOFTWARE, OR THE MISTAKES, OMISSIONS, INTERRUPTIONS, DELETION OF FILES, ERRORS, DEFECTS, DELAYS IN OPERATION, TRANSMISSION OR ANY FAILURE OF PERFORMANCE OF THE SERVICE OR TelxVoIP EQUIPMENT OR SOFTWARE; OR

10.1.2 ANY LOSSES, CLAIMS, DAMAGES, EXPENSES, LIABILITIES OR COSTS (INCLUDING LEGAL FEES) RESULTING DIRECTLY OR INDIRECTLY OUT OF, OR OTHERWISE ARISING IN CONNECTION WITH ANY ALLEGATION, CLAIM, SUIT OR OTHER PROCEEDING BASED UPON A CONTENTION THAT THE USE OF THE TelxVoIP EQUIPMENT OR SOFTWARE, OR SERVICE OR A THIRD PARTY INFRINGES UPON THE COPYRIGHT, PATENT, TRADEMARK, TRADE SECRET, CONFIDENTIALITY, PRIVACY OR OTHER INTELLECTUAL PROPERTY RIGHTS OR CONTRACTUAL RIGHTS OF ANY THIRD PARTY.

10.2 Application.< The liability limitations set forth in this Section 10 apply to the acts, omissions and negligence of TelxVoIP (and its officers, directors, employees, agents, contractors and representatives) which, but for this provision, would give rise to a cause of action in contract, tort or any other legal doctrine. However, the liability limitations set forth in this Section 10 shall apply to liability for personal injury or death only to the extent applicable law does not prohibit such limitation.

10.3 No Third Parties. No third party owner or manager of Customer’s building or land is a party to this Agreement. Thus, no such owner or manager shall be responsible for, nor shall be liable for, the quality of the Service or TelxVoIP Equipment.

10.4 Sole Remedies. Customer’s sole and exclusive remedies under this Agreement are as set forth in this Agreement.

10.5 Emergency 911 and Directory Assistance. Customer shall coordinate and provide their own solution for Emergency 911 and Directory Assistance at their sole expense. TelxVoIP is not responsible for providing this service and strongly urges the Customer to seek a safe and appropriate solution.

11. SERVICE GUARANTEE

11.1 Indemnification Obligation. Customer shall defend (with counsel reasonably acceptable to TelxVoIP), indemnify and hold harmless TelxVoIP and TelxVoIP’s officers, directors, employees, agents, contractors and representatives from and against any and all claims and expenses, including reasonable attorneys’ fees).

12. DISCONNECTION POLICY

Customer agrees that TelxVoIP and/or its agents may, from time to time, collect information regarding Customer’s use of the Service and activities on the Internet. Customer agrees that such information may be shared with third parties provided that (i) TelxVoIP does not disclose any personally identifiable information to others except, as allowed by law and (ii) otherwise complies with applicable privacy laws. Customer expressly grants TelxVoIP the right to disclose information relating to Customer and/or Customer’s account in response to a subpoena issued in a civil or criminal investigation, litigation, court order or a civil investigation by a governmental entity.

13. FRAUDULENT CALLS

In the event Customer connects the Services to the public switched network, Customer is solely responsible for selection, implementation and maintenance of security features for protection against unauthorized calling, and TelxVoIP shall have no liability therefore. Customer is solely responsible for payment of long distance, toll and other telecommunications charges incurred through use of the Services being provided hereunder. Customer shall indemnify and hold TelxVoIP harmless from all costs, expenses, claims or actions arising from fraudulent calls of any nature carried by means of the Services. Customer shall not be excused from paying TelxVoIP for Services provided to Customer or any portion thereof on the basis that fraudulent calls comprised a corresponding portion of the Services. In the event TelxVoIP discovers fraudulent calls being made, nothing contained herein shall prohibit TelxVoIP from taking immediate action, without notice to Customer that is reasonably necessary to prevent such calls from taking place. Notwithstanding, it is understood that TelxVoIP is under no obligation to investigate the authenticity of calls charged to Customer’s account and shall not be liable for any fraudulent calls processed by TelxVoIP and billed to Customer’s account.

14. HOSTING SERVICES

14.1 Controlling Law; Venue. The validity, performance, and interpretation of this Agreement will be governed and construed in accordance with the laws of the United States and the State of California, without regard to its conflicts of law provisions. The parties will voluntarily appear before and hereby consent and submit to the exclusive jurisdiction of the state and federal courts located in San Diego, California. If any dispute, litigation, or other action arises between the parties with respect to the matters covered by this Agreement, the prevailing party in such proceeding shall be entitled to receive its reasonable attorneys’ fees, expert witness fees and out of pocket costs incurred in connection with such proceeding, in addition to any other relief it may be awarded.

14.2 Notices. All notices permitted or required under this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally, (ii) by commercially established courier service upon delivery or, if the courier attempted delivery on a normal business day and delivery was not accepted, upon attempted delivery, (iii) by facsimile transmission when confirmed by facsimile transmission, or (iv) by certified or registered mail, return receipt requested, ten (10) calendar days after deposit in the mail. Such notices shall be sent to the addresses set in the Sales Order or such other address as a party hereto shall notify the other party of in writing. If to TelxVoIP:

Telephone: 877-880-7466
Facsimile: 949-861-4501
Email: billing@telxvoip.com
Attention: Billing Dept.

14.3 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which will be considered an original, but all of which together will constitute one and the same instrument.

14.4 Headings. The headings in this Agreement are inserted for convenience and do not constitute a part of the Agreement, nor modify or limit any of the terms.

14.5 Waiver; Amendment; Modification. No term or provision hereof will be considered waived by either party, and no breach excused by either party, unless such waiver or consent is in writing signed by the party against whom such waiver or consent is asserted. The waiver by either party of, or consent of either party to, a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of, consent to, or excuse of any other or subsequent breach by the other party. This Agreement may be amended or modified only by mutual agreement of authorized representatives of the parties in writing.

14.6 Enforceability of Provisions. To the extent any provision or portion of this Agreement is determined to be invalid, illegal or unenforceable, such provision or portion shall be severed or deleted from this Agreement or limited so as to give effect to the intention of the parties insofar as possible. The invalidity or unenforceability of any provision or portion hereof shall not affect the validity or enforceability of any other provision or this Agreement as a whole.

14.7 Assignment. TelxVoIP may assign its rights and obligations under this Agreement to any party without the consent of Customer. Customer may not assign or otherwise transfer its rights or obligations under this Agreement.

14.8 Entire Agreement. This Agreement, including the Sales Order and attachments hereto, constitutes the entire agreement between the parties regarding its subject matter. This Agreement supersedes all prior proposals, agreements or other communications between the parties, oral or written, regarding such subject matter. No other representation, warranty, term or condition, other than as expressly set forth in this Agreement, shall be binding on TelxVoIP.

15. CALL RECORDING REGULATIONS

15.1 Call Recording Laws.

15.1.1 Recommendations for Buying or Installing a Call Recording System Those interested in purchasing and/or installing a call recording system should familiarize themselves with their local, national, and international call recording laws. Call recording is an incredible business tool when integrated into a business practice. Especially for phone-based employee training, to prove compliance with industry regulations, billing support, dispute resolution and insurance claims. Ultimately, it is the responsibility of the call recording initiator to understand and adapt to the consent regulations involved with call recording.

15.1.2 The Legalities of Call Recording Because call recording regulations are complicated-and the penalties for infringement strict-it’s vitally important for organizations considering call recording to arm themselves with the knowledge and resources to legally protect their interests. The federal government, state governments, and the FCC all have different regulations that generally include wiretapping and eavesdropping legislation to determine call recording legality. The most common determinant of legality for all three entities, however, is the presence of consent.

15.1.3 Who Determines Call Recording Jurisdictions? Because there are three separate entities (i.e., the federal government, state governments, and the FCC) that determine call recording regulations, it’s important to understand the jurisdictions of each:

• The Federal Government – The federal government does not define a large amount of specific legislation for call recording. It does, however, require one-party consent.
• State Governments – State governments generally have more well-defined call recording laws and penalties. With the exception of calls involving felonies or threats, only 13 states require all-party consent.
• The FCC – The FCC requires that all parties in a recorded interstate call be notified either verbally or through an intermittent beep of the recording. Lawsuits involving interstate telephone calls have been judged in both the originating state and in the receiving state, so it’s recommended that the stricter state guidelines are followed when recording interstate calls.

15.1.4 What about International Laws? International call recording regulations vary widely, and the local government’s telecommunications authority should be consulted prior to initiating a call recording system. Many countries do not have specific laws covering telecommunication issues, and thus operate on a case-by-case basis. In some countries, a corporate literature declaration of call recording is considered sufficient consent.

15.1.5 What is Call Recording Consent? One-Party and All-Party States- All states have their own laws regarding call recording. The key differentiator being that in some states one person on the call has to provide informed consent to the recording. In other states all parties on the call must consent to the recording. Most states are one-party states; however, there are 12 states that remain all-party states. Those jurisdictions are California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, Pennsylvania and Washington. Be aware that you will sometimes hear these referred to inaccurately as “two-party consent” laws. If there are more than two people involved in the conversation, all must consent to the taping. It is illegal in all states to record a conversation to which you are not a party, do not have consent to tape, and could not naturally overhear.

• One-Party Consent- One-party consent implies that at least one person within the conversation is aware of the call recording-even if that person is the one actually conducting the recording. Thirty-eight states and the District of Columbia permit individuals to record conversations to which they are a party without informing the other parties that they are doing so.
• All-Party Consent- In all-party consent, everyone within the conversation must be informed of the call recording either by verbal notification or with an intermittent beep. Therefore, if two people are conducting a conversation and a third person joins in, the third person must be notified of the call recording to comply with regulation.

These laws are referred to as “one-party consent” statutes, and as long as you are a party to the conversation, it may be legal for you to record it. (Nevada also has a one-party consent statute, but the state Supreme Court has interpreted it as an all-party rule.)

Federal law and most state laws also make it illegal to disclose the contents of an illegally intercepted call or communication. And undercover recording in a private place can prompt civil lawsuits for invasion of privacy.

15.1.6 Consent and its Limits – Generally, you may record, film, broadcast or amplify any conversation where all the parties to it consent. It is always legal to tape or film a face-to-face interview when your recorder or camera is in plain view. The consent of all parties is presumed in these instances.

The use of hidden recorders is covered by the wiretap and eavesdropping laws. You should check with an attorney regarding the laws of your state or states, as well as federal laws.

15.1.7 Criminal Purpose – When thinking about taping a conversation: consent requirements under state and federal laws must always be met, and taping can be illegal if it is done in furtherance of a crime.

15.1.8 Trespass – A party, whose conversation is surreptitiously recorded, with a tape recorder, may also raise such claims as trespass and intrusion, examining the issue of the scope of a party’s consent.

15.1.9 Expectations of Privacy – When using this recording software there may be a potential issue with whether or not the party had a reasonable expectation of privacy with regards to the use of the taped conversation.

15.1.10 For additional information you can go to: The Reporters Committee for Freedom of the Press @ rcfp.org/taping/states.html | Wikipedia.org/wiki/telephon_tapping

15.1.11 So what happens when a one-party state calls an all-party state? For example, someone in Illinois (a one-party state) calls someone in Michigan (an all-party state). If the call is not recorded it may be under federal legislation. All interstate calls, (state-to-state calls) are subject to federal law. In this case it is best to evaluate the federal laws as well as the laws for both states.

15.1.12 Obtaining Consent/ Caller Notification There are many different ways to obtain consent from both employees and callers to record a call. The most common way to inform employees is a signed document that informs them that their calls may be monitored. As for callers, most are informed by a recorded voice at the beginning of the call. We have all heard it before, “This call may be monitored or recorded.” This is best used after any touch-tone or voice prompting before the caller is connected to an agent. Beep tones can also be used. These are specific beeps that are heard for the duration of the call and must be within 1260-1540 Hertz, and last .17-.25 seconds. These beeps must go off every 15 minutes for the entirety of the call.

15.1.13 Inbound vs. Outbound Calls It is very easy to inform inbound calls of the recording with the “this call will be recorded” message at the beginning of the call.Outbound calls; however, are a little more tricky. Having a recorded message play “this call will be recorded” before the call is connected is an option, but not a very good one since people generally will not wait until the call connects. Another option is to have your agent announce the recording…”Hello, this is Shelley with TelxVoIP calling on a recorded line.” Although, this method is not issue-free either because if the phone switches hands mid-call, the recording must be announced again since every person on the phone must be informed of the recording. If you do not want to open your call with a recorded notification, TelxVoIP recommends you do not record outbound calls to all-party states. TelxVoIP is here to help provide the ultimate call recording solution to fit your businesses needs. But remember, Ultimately, it is the responsibility of the business to familiarize with these regulations and adhere to them in their day-to-day business practices.

15.1.14 Additional Resources For more information on the laws governing call recording, please explore these resources: http://www.fcc.gov/cgb/consumerfacts/recordcalls.html | http://www.rcfp.org/taping/ | http://telecom.hellodirect.com/docs/reviews/CallRecorders.1.050201.asp | http://www.telephonerecordersdirect.com/legalcallrecording.asp

*Disclaimer: TelxVoIP cannot accept any liability for legal information provided for your convenience. Any individual or organization considering telephone call recording should seek legal advice from a local attorney.

15.2 Other Call Recording Regulations

15.2.1 Insurance Claims and Healthcare – Insurance claims should be recorded to provide clear evidence of what is agreed to and discussed in a claim. This eliminates he-said-she-said disputes and holds both parties to the fact of the discussion that took place on the phone. This can protect and save your company money in the case of untrue claims.

15.2.2 Phone-Based Employees – When training a new phone-based employee, pre-recorded calls are generally preferred to live customer interaction as examples to train the employee. The same recordings that are used for regulation purposes have potential for use in dispute resolution. Any company providing sales and service support on the phone can benefit by using recorded calls for a myriad of purposes.

15.2.3 Billing Support – When goods or services are purchased by phone, the law requires that all disclaimers, terms and conditions of the purchase be clearly explained to the buyer. A recording not only proves that all disclaimers, terms and conditions were clearly explained but can be used as proof that the agent followed the company processes.

15.2.4 To Prove Compliance with Industry Regulations – There are a great deal of industries that have regulations upon them that make it necessary to record all calls for a variety of reasons. While many industry regulations, such as the Telemarketing Sales Rule (TSR), do not clearly require that calls be recorded, a recorded call can be used to settle a claim against a company’s behavior in relation to the act, reducing liability and exposure. While the seeming need for this recording is subjective, the benefit from being able to effectively resolve or settle this type of dispute is obvious.

15.2.5 Federal and Industrial Regulations Compliance

• Sarbanes-Oxley Act: The Sarbanes-Oxley Act of 2002 is the
• public company accounting reform and investor protection act.
• Gramm-Leach-Bliley Act (GLBA): Requires financial institutions to design, implement, and maintain safeguards to protect customer information.
• PCI Data Security Standard: Outlines best practices for credit card data that is stored, processed, or transmitted. All merchants, banks, and service providers that store, process, or transmit cardholder data must comply with the PCI Data Security Standard.
• Truth in Lending Act (TILA): Ensures that borrowers are completely aware of the terms and costs of credit so they have the ability to make an educated decision about the loan they agree too.
• Telemarketing Sales Rule (TSR): The rule requires telemarketers to make certain disclosures and prohibits lies.
• Fair Debt Collection Practices Act (FDCPA): This act provides guidelines for collection agencies that are seeking to collect legitimate debts, while providing protections and remedies for debtors. The rule requires telemarketers to make certain disclosures and prohibits lies.

15.3 Telemarketing Sales Rule (TSR) If you are a call center or a company engaged with phone-based sales people, you understand the importance of adhering to Telemarketing Sales Rule (TSR) regulations, reducing liability, and maintaining records of compliance. TelxVoIP understands, too. That’s why our Call Recording solution is built with your needs in mind.

15.3.1 What is the Telemarketing Sales Rule (TSR)? Companies use call recording to prove their compliance with the TSR. TSR covers telemarketing – including any plan, program, or campaign to sell goods or services through interstate telephone calls. The rule requires telemarketers to make certain disclosures and is designed to prevent lies. It gives state law enforcement officers the authority to prosecute fraudulent telemarketers who operate across state lines, and it gives consumers instructions on how to stop unwanted calls. Just say, “Put me on your DO-NOT-CALL list.”

15.3.2 Who Must Comply with the Amended TSR? The amended TSR regulates “telemarketing” – defined in the Rule as “a plan, program, or campaign… to induce the purchase of goods or services or a charitable contribution” involving more than one interstate telephone call. (The FCC regulates both intrastate and interstate calling. More information is available from www.fcc.gov.) With some important exceptions, all businesses and individuals that take part in “telemarketing” must comply with the Rule. This is true whether, as “telemarketers,” they initiate or receive telephone calls to or from consumers, or as “sellers,” they provide, offer to provide, or arrange to provide goods or services to consumers in exchange for payment. It makes no difference whether a company makes or receives calls using low-tech equipment or the newest technology – such as voice response units (VRUs) and other automated systems. Similarly, it makes no difference whether the calls are made from outside the United States; so long as they are made to consumers in the United States, those making the calls, unless otherwise exempt, must comply with the TSR’s provisions. If the calls are made to induce the purchase of goods, services, or a charitable contribution, the company is engaging in “telemarketing.”

Any retail business that conducts any business over the phone can be subject to the TSR Rule: even if the initial transaction is exempt because it is an unsolicited call from a consumer, a response to a general media advertisement or certain direct mail solicitations, or an outbound non-sales call (say, a customer service call), any upsell following the initial transaction is subject to all relevant provisions of the Rule.

15.3.3 Other Key Provisions

• Requires disclosure of specific information
• Prohibit misrepresenting calls that deliver purely “Informational” Prerecorded Messages
• Limits when telemarketers can call consumers
• Requires transmission of caller ID information
• Prohibits abandoned outbound calls, subject to a safe harbor
• Prohibits unauthorized billing
• Sets payment restrictions for the sale of certain goods and services
• Requires that specific business records be kept for two years

15.3.4 How does TelxVoIP Call Recording help your business stay compliant? By easily keeping precise records of all call communication! A call recording does not lie. You will have solid proof of activities such as sales calls, orders and conversations that took place over the phone.

• Multiple product permission settings to ensure call recording security
• Powerful encryption of each call to protect confidential information
• Intuitive user interface that helps users find recorded information quickly and easily- anywhere, anytime
• Efficient playback features that can be activated based on different search parameters
• Flexible recording options that enable program administrators to specify unique program configurations

15.3.5 What happens if you fail to comply? “Failure to provide any of the required information in a “clear and conspicuous” manner, before the consumer pays for the goods or services offered, is a deceptive telemarketing act or practice that violates the rule, and subjects a seller or telemarketer to a $10,000 fine for each violation.”

15.3.6 Example of Fine. Court Orders Cross-Border Telemarketers to Pay Nearly $5 Million: Canadian Defendants Fraudulently Pitched Advance-Fee Credit Cards and “Free” Gifts “The FTC’s complaint charged the defendants with using outbound telemarketing to call United States consumers. For an advance fee of $319, which they electronically debited from the consumers’ bank accounts, the defendants promised that they could deliver Visa or MasterCard credit cards, along with free gifts such as cell phones. No consumers who paid the money received either credit cards or “complimentary” gifts. Accordingly, the court found the defendants violated Section 5 of the FTC Act and the TSR and ordered them to pay $4,997,695.60.”

15.3.7 Example – Shipping information that was updated on the sales call. When you take orders by telephone, you may choose to provide prospective customers with updated shipment information. This may differ from what you said or implied about the shipment time in your advertising. The updated shipment information you provide on the telephone supersedes any shipment representation you made in the advertising. You also must have a reasonable basis for the updated shipment representation. TelxVoIP’s call recording can prove you’re compliance in these instances, 100%. Recordkeeping is crucial in a telephone-based employee business: It is key to have adequate records kept of the key events in each individual transaction.

15.3.8 Example – A consumer calls a department store to inquire about the price of a microwave oven. Because the call is not the result of a solicitation by the seller, the initial inquiry is exempt from the Rule. If the seller tries to upsell a refrigerator during the same call, the upsell transaction is subject to the Rule.

15.4 REFERENCES:
http://www.ftc.gov/bcp/edu/pubs/business/adv/bus02.shtm
http://www.ftc.gov/opa/2008/05/pacliberty.shtm
http://www.ftc.gov/bcp/consumer.shtm.