THESE magicJack® for Business Terms of Service constitute an agreement (this “Agreement”) between magicJack SMB, Inc. (“magicJack”, “we”, “us”, “our”) and you, on behalf of yourself and any entity that you represent (“Customer”, “you”, “your”), as the user of magicJack’s business services and any associated software and hardware (collectively, the “Services”). This Agreement governs your purchase and use of the Services. When you accept this Agreement, by signing up for, subscribing to, purchasing or using any Services, whether directly from us or through an Authorized Distributor, you represent and warrant that: (i) executing this Agreement via electronic document signature or checking the “I Accept” button represents your electronic signature to this Agreement and you intend such action to authenticate this document and to have the same force and effect as a manual signature; (ii) you possess the legal right and capacity to enter into this Agreement with magicJack and to perform all of your obligations hereunder; (iii) you are of legal age to enter into this Agreement; (iv) you have full power and authority to execute and deliver this Agreement and to perform all of your obligations hereunder; (v) you shall be bound by the terms of this Agreement; and (vi) if you are accepting this Agreement on behalf of an entity or other organization, you represent that you are authorized to bind that entity, and all references to “Customer”, “you”, or “your” in this Agreement expressly includes, without limitation, the entity you represent. magicJack and Customer may each be referred to herein as a “Party” and collectively as the “Parties.

Please read this Agreement carefully. It affects the legal rights between Customer and magicJack by, among other things: (i) requiring mandatory arbitration of disputes instead of a jury trial, and (2) limiting magicJack’s liability. If you do not accept the terms and conditions of this Agreement, do not purchase, subscribe for or use any Services.

Any and all references on our packaging, in sponsored advertising, on our website, in third party marketing materials and/or in any other context or location that refer to the provision of “free” calling and/or “service for life” and/or “unlimited” service and/or “free phone service” shall be narrowly construed as providing the Customer with the ability to make calls within reasonable limits, subject to the Acceptable Use Policy limitations and the other terms and limitations of this Agreement, including payment of the applicable Fees.

Pursuant to FCC requirements, magicJack is required to advise its customers of any limitations that E911 service may have in comparison to traditional 911 service, which are set forth in Section 21 below and in the E911 Disclosure. If you are uncomfortable with the limitations of the magicJack E911 service, you should consider using an alternative means of access to traditional 911 or E911 services or discontinuing the Services. It is strongly recommended that you have an alternative means for placing emergency calls available at all times.

1. Definitions. As used in this Agreement, the following terms have the following meanings:

a. “Acceptable Use Policy” means the magicJack acceptable use and reasonable use policies set forth in Section 15 below.

b. “Account Data” means any information Customer is required to provide in order to use the Services or activate features, as well as the magicJack-generated logs of calling activity with respect to Customer’s use of the Services.

c. “Activation” occurs when Customer connects Equipment to a high speed internet connection, the Equipment register’s with magicJack’s network, and Services are available for Customer’s use.

d. “Activation Date” means the date of Activation.

e. “Affiliate(s)” means, with respect to a Party, any entity that Controls, is Controlled by or is under common Control with the entity. “Control,” for purposes of this definition, means the direct or indirect ownership or control of more than fifty percent (50%) of the voting equity of the subject entity.

f. “Applicable Laws” means any and all applicable federal, state or local laws, rules or regulations, including, but not limited to applicable restrictions concerning call recording, call monitoring, call interception and/or direct marketing or telemarketing.

g. “Business Day” means any day upon which major banking institutions in Atlanta, Georgia are open for business.

h. “Customer Care” means the magicJack® for Business Customer Care Center, which may be reached at: 888-657-6282 or such other telephone number as may be provided by magicJack from time to time.

i. “Customer Communications” means the content of calls, facsimiles, SMS messages, voicemails, voice recordings, conferences or other communications transmitted or stored through the Customer’s Services.

j. “Customer Equipment” means all Equipment owned by Customer for use in connection with the Services, including Equipment sold by magicJack to Customer, but not including Leased Equipment.

k. “Customer Premises” means the physical location(s) owned or leased by Customer where Services are provided or Leased Equipment will be used or stored.

l. “E911 Disclosure” means the provisions set forth in the magicJack E911 Disclosure Notice and Acknowledgement posted at: www.magicjackforbusiness.com/e911.html or attached to and incorporated by reference into an Order Form stating magicJack’s policies regarding the availability and limitations of E911 Service.

m. “Equipment” means all equipment owned, leased, or otherwise used by Customer in connection with the Services, including phone hardware (e.g., phones, routers, switches and battery backup).

n. “Equipment Rental Agreement” means a written agreement between the parties by which Customer leases Leased Equipment from magicJack or its third party leasing partners.

o. “Fees” as defined in Section 10.c. of this Agreement.

p. “Leased Equipment” means all Equipment that is leased by magicJack or its third party leasing partners to Customer for use in connection with the Services, but does not include Customer Equipment.

q. “magicJack” means magicJack SMB, Inc., a Florida corporation, or any Affiliate of magicJack SMB, Inc. providing Services to Customer.

r. “Metered Usage” as defined in Section 10.d. of this Agreement.

s. “Order Date” means the date upon which Customer executes or accepts the Order Form for the Services in question.

t. “Order Form” means a quotation as described in Section 2 that has been provided by magicJack and accepted by Customer and shall automatically incorporate this Agreement. An Order Form arises once a Customer accepts a quotation provided by magicJack (a) by accepting or executing the Order Form through electronic document signature, (b) by initiation of the Services; or (c) upon Customer’s successful addition of Services via the online process or via phone by a Customer administrator.

u. “Privacy Policy” means the magicJack for Business Privacy Policy, as may be amended from time to time, which can be found at: www.magicjackforbusiness.com/legal.html or such other URL as determined by magicJack from time to time.

v. “Products” means Equipment, hardware, or other products provided or made available by magicJack to Customer that are set forth in an Order Form.

w. “Restocking Fee” means the restocking fee charged by magicJack’s Equipment and/or fulfillment vendor to magicJack from time-to-time, which may be passed through by magicJack to Customer in magicJack’s sole discretion.

x. “RMA” as defined in Section 7.b. of this Agreement.

y. “Service” or “services” means the magicJack® Home and Office or magicJack® Enterprise services provided or made available by magicJack to Customer as set forth in one or more Order Forms, or as otherwise renamed by magicJack from time to time, having the features and functionality described in such Order Form(s).

z. “Service Fees” as defined in Section 10.c. of this Agreement.

aa. “Software” means proprietary software (including documentation relating to such software) owned or licensed by magicJack, or which magicJack has a right to sublicense under this Agreement, which software is either provided to Customer under this Agreement or is used by Customer in connection with the Services.

bb. “Taxes” means any taxes and fees arising in any jurisdiction imposed on or incident to the provision, sale, lease or use of Services and Products (including Equipment), including value added, sales, use, gross receipts, excise, franchise, public utility or other taxes, fees, duties or surcharges (including universal service, 911 and other regulatory fees and surcharges), whether imposed on magicJack or a magicJack Affiliate.

cc. “Term” means the period of time during which magicJack provides Services to Customer, which will commence upon the earlier of (a) the Activation Date, or (b) thirty (30) days after the Order Date, and terminate as provided in Section 9 below.

2. Order Form. The Products and/or Services purchased by Customer will be described in one or more Order Forms that shall include: (i) the price, location, and other information about the Services; (ii) the prices, specifications, and other details relating to Products being offered for sale or lease to Customer; and (iii) if applicable, associated installation, maintenance, shipping or delivery fees and other requirements. Upon acceptance of an Order Form by magicJack and Customer, magicJack will provide, and Customer will pay for and receive from magicJack, the Products and Services pursuant to the terms and conditions of each Order Form and this Agreement. In the event of a conflict between the terms of any Order Form and this Agreement, the terms of this Agreement will prevail.

3. Authorized Distributors. magicJack may enter into marketing arrangements with marketing partners and/or resale/distribution agreements with authorized distributors (each an “Authorized Distributor”) who market magicJack Services to prospective customers who then subscribe to this Agreement. When this Agreement is accepted by a Customer, the Customer is considered a customer of magicJack only with respect to magicJack Services. As an example, if the distributor of internet services also markets magicJack-branded solutions and a Customer subscribes to both internet services and magicJack Services with magicJack under this Agreement, the customer is considered, with respect to magicJack Services, only a customer of magicJack. The terms, conditions and policies pursuant to an Authorized Distributer’s contractual arrangement with Customer for other products and services may differ from magicJack’s Terms of Service, Privacy Policy and other policies applied by magicJack to similarly situated customers, but such Authorized Distributor’s terms, conditions and policies will not apply to magicJack Services, nor supersede this Agreement as applicable to magicJack Services.

4. Administrators. Customer may designate one or more users to be an account administrator with full administrative control of Customer’s account (collectively, “Administrator(s)”). The individual assigned to be the initial Administrator will be designated by Customer through the initial sign-up process and listed as such on the Order Form. Each Administrator: (i) has the ability to make changes to the Customer account (e.g., service additions, service deletions, assignment of users, account cancellations, updates to credit cards, etc.); and (ii) is the authorized individual on Customer’s account with respect to transferring (or “porting”) of Customer telephone numbers to a carrier other than magicJack. Each Administrator may assign one or more additional Administrators on the account and may re-assign “Administrator” status to another user. In the event that Customer desires information regarding a customer service record or actual call log details, the information requests must come from an Administrator. magicJack shall respond to these requests by transmitting the requisite information to the email address on file for the Administrator. The Administrator will also receive messages from magicJack concerning matters of general relevance to the account (e.g., notices of updates to the account, billing notices, maintenance alerts, etc.). Such notices are typically provided through electronic mail. In the event that Customer seeks to re-assign the Administrator designation on Customer’s account and the Administrator is unable to make the change, magicJack requires that Customer either: (i) submit an email from the Administrator’s email address on file with magicJack; (ii) call Customer Care and provide answers to designated security questions for identification verification; or (iii) provide a written request, on Customer’s letterhead and executed by an officer or owner of the company which Customer represents.

5. Additional Services. Additional Services can be purchased by Administrators through the magicJack portal or by calling sales or Customer Care. Customer hereby authorizes each Administrator to: (i) add Services to Customer’s magicJack account; and (ii) commit Customer to pay for these Services on a recurring monthly basis. Such additional Services shall be subject to all of the terms and conditions herein, the Service Fees shall be increased to reflect the additional Services, and the additional Services shall be provided for a term that is coterminous with the Term.

6. Authorizations; Maintenance. Customer shall provide magicJack, at no cost to magicJack, all permissions, consents or authorizations necessary to activate, maintain, inspect, and repair the Products and/or Services, including any Leased Equipment, which may include (if applicable) the right to access and enter Customer’s Premises. magicJack reserves the right to perform repair and maintenance or to upgrade, update or enhance (collectively, the “Maintenance”) its network, infrastructure, website(s), Services and/or Leased Equipment with or without prior notice or liability to Customer, even if the Maintenance causes a partial or full disruption of the Services; provided, however, and subject to magicJack’s business needs, magicJack shall use commercially reasonable efforts to perform the Maintenance in a manner so as to avoid unduly interfering with Customer’s use of the Services, including by providing reasonable commercial notice where feasible.

7. Equipment. Customer understands and acknowledges that Activation of the Services requires Customer to purchase or lease Equipment through magicJack or through an Authorized Distributor. In either case, magicJack may provision the Equipment from a third party supplier.

a. Customer Equipment. While magicJack may facilitate Customer’s purchase of Equipment as an accommodation, the original equipment manufacturer and not magicJack shall be responsible for any Customer Equipment defects, if applicable. magicJack will pass through all original equipment manufacturer warranties for the Customer Equipment to Customer. Equipment sold by magicJack to Customer is sold AS-IS and may not be returned to magicJack for any reason except in accordance with the return provisions specified in Subsection 7b below. Please check the equipment manufacturer’s website for warranty, return rules and other terms and conditions applicable to such Customer Equipment. magicJack shall have no liability to Customer of any nature regarding such Customer Equipment. Customer bears all risk of loss of, theft of, casualty to or damage to the Customer Equipment from the time that it is shipped to the Customer. If the Customer Equipment is damaged, lost, or stolen, Customer will no longer be able to use the Services and will be required to purchase or lease new Equipment.

b. Return of Customer Equipment. If Customer cancels the Services within the first thirty (30) days after the Order Date and securely packs, ships, and returns to magicJack (at Customer’s expense) all Customer Equipment (including all accessories), in original condition, within fourteen (14) days after the date of such cancellation, then magicJack will refund Customer for the purchase price paid by Customer for such Customer Equipment, less a Restocking Fee. magicJack will not refund Customer for Customer Equipment that is not in original condition when received. Prior to returning any Customer Equipment, Customer must contact Customer Care so that magicJack may provide a return merchandise authorization (a “RMA”). Customer must ship the Customer Equipment to the address provided and in accordance with the procedure specified by magicJack. Customer may not return any Customer Equipment to magicJack or receive a refund for Customer Equipment under any other circumstances. Customer may return Customer Equipment to the manufacturer solely in the event of a defect which arises within the applicable warranty period, provided Customer complies with the terms of this Section and the applicable manufacturer’s return policy. Prior to returning any Customer Equipment to the manufacturer, Customer must contact magicJack so that magicJack may determine whether a defect exists, initiate a warranty claim on behalf of Customer, and provide Customer with a RMA. Customer must ship the Customer Equipment to the address provided by the manufacturer and in accordance with the procedure specified by the manufacturer. Once the Equipment is received, the manufacturer will handle the return in accordance with its applicable warranty policy.

c. Leased Equipment. Customer may lease Equipment from magicJack pursuant to the terms of an Equipment Rental Agreement. Customer will not: (i) relocate, rearrange, repair or otherwise modify any Leased Equipment without magicJack’s prior written consent; or (ii) create or allow any liens or other encumbrances to be placed on any Leased Equipment. Customer acknowledges and agrees that Leased Equipment (and replacements) may be refurbished equipment. Customer will use commercially reasonable efforts to protect and maintain Leased Equipment in a secure location at the Customer Premises within conditions (including room temperature) that are customary and reasonable for such Equipment, and shall be fully liable for all costs, charges or expenses associated with damage to or loss of Leased Equipment beyond normal wear and tear. During the Term, defective Leased Equipment will be repaired or replaced in accordance with, and subject to the terms set forth in, the Equipment Rental Agreement. Notwithstanding the foregoing, Leased Equipment will not be replaced if it is determined that Customer or another third party is responsible for the defect.

d. Return of Leased Equipment. Upon cancellation, expiration, or termination of this Agreement or the Services for any reason, Customer shall securely pack, ship and return to magicJack all Leased Equipment, at Customer’s expense. Prior to returning any Leased Equipment, Customer must contact magicJack so that magicJack may provide a RMA. Customer must ship the Leased Equipment to the address provided by the leasing party (either magicJack or its third party leasing partner) in accordance with the procedure specified by such party. Customer has ten (10) days after receipt of the RMA to ship the Equipment and must pay all shipping fees. Customer may be charged a Restocking Fee upon return of Leased Equipment. Customer will be required to pay the full replacement value of any Leased Equipment that is not timely returned to in accordance with this Section 7.d..

8. Software.

a. Non-Exclusive License. If Software or firmware is provided by magicJack in connection with Services or embedded in the Equipment, magicJack grants to Customer a personal, limited, revocable, non-exclusive, non-assignable and non-transferable license to use the Software, in object code form only, solely for the purpose of using the Services. This license will permit such use by Customer and any of its employees or contractors (but only within the scope of their employment or services with Customer) authorized by Customer to use the Service, provided that Customer shall be responsible for all uses of the Services as provided in this Agreement. This license commences upon magicJack’s acceptance of the Order Form for the Services and terminates immediately upon the expiration or termination of this Agreement for any reason. Customer shall return or destroy all Software and any related written material, together with any copies, in its possession or under its control promptly upon the expiration or termination of this Agreement for any reason. Any attempt to sublicense, assign or transfer any of the rights, duties or obligations under this license is void and may result in termination by magicJack of this Agreement and the license. No other licenses or rights to the Software are granted or implied.

b. Upgrades and Modifications.  magicJack, in its sole discretion, reserves the right to add, remove, or modify features or functions, and to provide fixes, updates and upgrades to the Services without notification to you, and to discontinue support for earlier versions of the Software at any time. Customer acknowledges and agrees that magicJack has no obligation to make available to Customer any subsequent versions of the Software or Services; provided, however, magicJack shall make available to Customer any such features, functions, fixes, updates and upgrades and subsequent versions of the Services that magicJack makes generally available at no additional charge to customers who subscribe to the same edition of the Services purchased by Customer. Customer acknowledges that some security features of the Services may require activation or installation of Software or firmware updates, and Software may be de-activated or uninstalled. Customer agrees to promptly download and install all updates to Software and/or firmware used in conjunction with the Services, and generally to ensure the activation and use of all features that are necessary or appropriate to protect the functionality of the Services. Customer acknowledges and agrees that if it fails to install updates, the functionality of the Services may be diminished and/or unstable.

c. End User Licenses. Certain Software or Services magicJack provides to Customer may contain third-party software (“Third-Party Software”), including open source software. Use of such Third-Party Software may be governed by separate copyright notices and license provisions, which may be found or identified in documentation or on other media delivered with the Third-Party Software and which are incorporated by reference into this Agreement. Notwithstanding any other terms in this Section 8, such provisions shall govern the use of Third-Party Software. Customer agrees to comply with the terms and conditions of all end user license agreements accompanying any Software (including Third-Party Software) or plug-ins to such Software distributed in connection with the Services. All end user licenses shall immediately terminate on the date that the Services expire or this Agreement is terminated. If any such end user licenses, or any provisions in such end user licenses, are held to be unenforceable for any reason, the terms of this Agreement shall apply with respect to the supply of such Software.

d. Ownership and Intellectual Property Rights. The Services, Leased Equipment and Software and all information, documents and materials on magicJack’s websites are protected by trademark, copyright, patent and other intellectual property laws and international treaty provisions. All website content, corporate names, service marks, trademarks, trade names, logos and domain names of magicJack are and shall remain the exclusive property of magicJack or its Affiliates and nothing in this Agreement shall grant Customer the right or license to use any of the foregoing. Except as explicitly granted herein, neither Party is granted a license or other right (express, implied or otherwise) to use any trademarks, copyrights, service marks, logos, trade names, patents, trade secrets or other form of intellectual property of the other Party or its affiliates without the express prior written authorization of the other Party. Customer agrees that the Leased Equipment is exclusively for use in connection with the Services and that magicJack will not provide any passwords, codes or other information or assistance that would enable Customer to use the Leased Equipment for any other purpose. If Customer decides to use the Services through an interface device not provided by magicJack (which magicJack reserves the right to prohibit in particular cases or generally), Customer warrants and represents that it possesses all required rights, including software and/or firmware licenses, to use that interface device with the Services and Customer will indemnify, defend and hold harmless magicJack from and against any and all liability arising out of Customer’s use of such interface device with the Services. Customer may not undertake, cause, permit or authorize the modification, creation of derivative works, or translate, reverse compile, disassemble, hack or reverse engineer, or otherwise attempt to derive the source code from the binary code of the Software.

9. Term and Termination.

a. Term. The Services are provided on a monthly or annual basis depending on the plan selected. The Term will begin on the earlier of (i) the Activation Date, or (b) thirty (30) days after the Order Date, and shall continue unless and until Customer provides notice of cancellation of the Services in accordance with this Section 9 or magicJack terminates the Services in accordance with the terms of this Agreement. Notwithstanding notice by a Party to terminate this Agreement, the terms and conditions of this Agreement and the applicable Order Form(s) will continue to apply to such Services through the effective date of termination. Upon termination of the applicable Term, magicJack will not be obligated to furnish the Services to Customer.

b. Cancellation. Customer acknowledges that the Services automatically renew upon expiration of the term of Service (annual or monthly as applicable) unless Customer provides cancellation notice to magicJack at least three (3) Business Days prior to a scheduled billing date (in accordance with the terms of this Section 9). For monthly terms, if Customer provides notice of cancellation at least three (3) Business Days prior to the next scheduled billing date, then Customer shall not be billed for the next billing cycle. For annual terms, if Customer provides notice of cancellation at least three (3) Business Days prior to the last scheduled billing date in the term, then Customer shall not be billed for the next annual term. If Customer provides notice of cancellation less than three (3) Business Days prior to the applicable scheduled billing date as described above, then the Services will renew and be billed for the applicable renewal term (annual or monthly) and cancellation will be effective at the end of the renewal term. Other than as set forth in Section 9.d. below, magicJack does not refund, in whole or in part, or issue credits for any charges already billed to Customer’s account. Expiration or termination of this Agreement does not alleviate Customer of responsibility for paying all unpaid, accrued charges due hereunder.

c. Cancellation Process. The Agreement may be cancelled by Customer only through an Administrator by contacting Customer Care by telephone during normal business hours (6am to 8pm EST). If Customer contacts an Authorized Distributor to cancel the Services or any portion thereof, that Authorized Distributor will collect the pertinent information and provide the information to magicJack to effect cancellation in accordance with Customer’s instructions. CUSTOMER MAY CANCEL SERVICES ONLY THROUGH ONE OF THESE METHODS. MAGICJACK WILL NOT ACCEPT CANCELLATION VIA EMAIL, FAX, SMS OR OTHER METHODS. FAILURE TO CANCEL SERVICES IN ACCORDANCE WITH THIS SECTION WILL RESULT IN ONGOING SERVICE CHARGES, FEES AND TAXES. magicJack will provide Customer with email confirmation of both Customer’s request to cancel the Services and the actual Services cancelled. If Customer does not receive a confirmation of Customer’s request to cancel or if Customer does not receive a confirmation of Service cancellation, Customer must notify magicJack by contacting Customer Care by telephone. Customer may also cancel individual Services on Customer’s account at any time by contacting Customer Care during normal business hours. Customer understands and acknowledges that the cancellation will be effective on the date Customer specifies, but in no event earlier than seventy-two (72) hours following cancellation notification to magicJack.

d. Refunds. Customer acknowledges that magicJack will not refund, in whole or in part, or issue credits for any charges already billed to Customer’s account, except as specifically provided in this Subsection 9.d. If Customer cancels the Services within the first thirty (30) days after the Order Date, Customer will receive a refund only with respect to the amount paid by Customer for Customer Equipment purchased with respect to such Services (less a Restocking Fee), provided such Customer Equipment is returned to magicJack in accordance with Section 7.b above. For Customers on an annual plan, Customer is purchasing the Services for the full annual term. Customer has thirty (30) days after the Order Date to cancel the Services for a prorated refund of the Service Fees prepaid by Customer with respect to the remaining unused period of the annual term following such cancellation. After thirty (30) days, if Customer cancels the Services prior to the end of the annual term, Customer is responsible for paying either (i) all charges for any remaining period of the annual term as if Customer remained a customer through the end of the such annual term, including, without limitation, outstanding charges, unbilled charges, Taxes and Fees, or (ii) the difference between (A) the retail price paid by Customer for any Customer Equipment provided to Customer at a promotional price, and (B) the promotional price actually paid by Customer for such Customer Equipment (the “Promotional Discount Termination Fee”). The foregoing option, and associated costs, will be communicated to Customer upon magicJack’s receipt of Customer’s cancellation request. If Customer chooses to pay the Promotional Discount Termination Fee, Customer will be refunded Fees prepaid by Customer for Services to be received during the remainder of Customers cancelled annual term. Otherwise, Customer will not be entitled to a refund for any unused portion of prepaid Fees. Except as specifically provided in this Section 9.d, no refunds will be provided with respect to any Fees or other amounts paid hereunder.

e. Ancillary Services. In the event Customer subscribes to ancillary services provided by magicJack (including, for example, voicemail recording, call recording, etc.), cancellation of the Services for any reason shall also result in the cancellation of such ancillary services. In the event magicJack is providing voicemail recording, call recording, or other such ancillary service, all of Customer’s data, including all recordings, will be deleted on or after the effective date of termination or cancellation. In the event that an end user account is cancelled (within the online portal or otherwise) or terminated (whether by the Customer or due to termination of the Services), the user data associated with such end user account and related ancillary services will be deleted, subject to magicJack’s retention policies, after the effective date of cancellation or termination. See Section 25 of this Agreement for further information concerning data retention.

10. Billing, Fees and Payment.

a. Billing and Payment Processing. Customer agrees to pay magicJack the recurring monthly service charges, Taxes, set-up charges and usage charges, if applicable, for Customer’s use of the Services. Billing will commence on the Order Date for Equipment (as applicable) and on the Activation Date for Services. Customer agrees to provide magicJack with a valid email address, billing address, and a valid recurring payment method (credit card or ACH) prior to activation of Service. Customer shall advise magicJack immediately if Customer’s Company Contact or any Administrator email addresses change and/or if the payment method changes or expires. Failure to comply may result in the immediate suspension or termination of Services.

i. Payments via Credit Card or ACH. Until Customer cancels the Services in accordance with the requirements of Section 9 herein, Customer authorizes magicJack to: (a) automatically bill the credit card Customer provided on the same day of each month; or (b) automatically debit (charge) Customer’s bank account electronically via ACH (automated clearing house) on the same day of each month. Customer agrees that magicJack may receive updated information about Customer’s account from the financial institution issuing Customer’s credit card.

b. Security Deposit. magicJack reserves the right any time during the Term, in its sole discretion, to require Customer to maintain a non-interest bearing deposit, to be held on account, in an amount determined in magicJack’s discretion based on Customer’s actual or anticipated billings, including usage charges. A deposit may be required prior to the next billing date to continue the Services (e.g., with instances of high international calling). The deposit will be adjusted as Services and usage levels increase or decline and will be refunded, less any past due balance or other amounts due by Customer, at the end of the Term. In addition, in the event that Customer’s use of the Services involves usage-based charges that in magicJack opinion are substantial, magicJack may, in its sole discretion, process charges against Customer’s payment method prior to Customer’s regular monthly billing cycle date and/or require a non-interest bearing deposit to secure Customer’s payment obligations under this Agreement. All deposits must be paid promptly on demand and will be held on account during the term of this Agreement. Customer authorizes magicJack to offset any amounts due to magicJack against the deposit.

c. Payment of Invoices. Invoices are delivered monthly. Except for Metered Usage fees, all fees are due in advance on the first day of each billing period. Fees may include monthly recurring charges (“Service Fees”), and other non-recurring charges including but not limited to, shipping fees, activation fees, porting fees, early termination fees, intellectual property recovery fees, and government mandated pass through fees such as, but not limited to, Universal Service Fees, E911 fees, regulatory compliance fees and Metered Usage fees (collectively with the Service Fees, “Fees”). All Metered Usage fees are due and payable in arrears on the first day of each billing period following the month they were incurred. Customer agrees to pay for all Equipment as the equipment order is processed, and all set up fees upon acceptance of the Order Form. Customer agrees to pay for the first month of Services upon Activation of the Services. All payments, including payments paid in advance, are completely non-refundable, except as specifically provided in Subsection 9.d above. Failure to pay in full may result in immediate account suspension and magicJack shall have no liability for such suspension under any circumstances. Accounts may be reactivated, at magicJack’s sole discretion, after the account balance is paid in full and a reconnect fee is paid. Past due amounts bear interest at the lower of 1.5% per month or the maximum rate allowed by law. All Fees and any other amounts due to magicJack may, at Customer’s direction, be charged to Customer’s Visa, MasterCard, American Express or valid debit card, and/or electronically debited to Customer’s bank account. Customer hereby authorizes magicJack to charge Customer’s credit/debit card and/or to electronically debit Customer’s bank account for all such Fees, charges (including termination-related charges) and payment transaction processing costs. Customer acknowledges that pre-paid credit cards are not accepted and agrees not to provide pre-paid credit cards as a payment method.

d. Metered Usage. There are certain calls which will incur additional usage charges, such as calls to Alaska, the Yukon and Northwest Territories of Canada, international calls, non-8YY accessed calling card, platform, conference or chat lines, or certain other high cost calls not included in the unlimited offering, as further described in Section 14 below (collectively “Metered Usage”). Other features included in Metered Usage are call forwarding from auto attendants to an outside number. Metered Usage is billed in full-minute increments, and actual usage is rounded up to the next full-minute increment at the end of each call for billing purposes. Metered Usage will be billed, and payment processed, through your credit card or bank account (ACH) automatically on a monthly basis.

e. Bundled Usage. magicJack or its Authorized Distributors may offer bundled plans which include a defined combination of services and which may offer a specified number of minutes or unlimited usage (subject to Sections 15 and 16 herein). Bundled plans may also include usage-based charges that differ from other magicJack or Authorized Distributor plans. In some bundled plans, the number of minutes used may be aggregated into a pool of minutes available to extensions on an account with excess usage charges applying for any usage above the allotted aggregate minutes at a specified rate.

f. Additional Charges. Customer acknowledges that Customer may incur charges while using the Services in addition to those billed by magicJack. 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, and Customer agrees to timely pay all such charges.

g. Suspension of Services. Failure to pay any Fees in full may result in immediate suspension of Services and magicJack shall have no liability for such suspension under any circumstances. During any period of suspension, Services and features and functions of the Services (including, but not limited to call recording service and any other service magicJack is providing) will be unavailable to Customer until the account balance is paid in full. Customer will be unable to record calls or access any data or recordings that have previously been stored by magicJack.

h. Disputes. If Customer reasonably disputes an invoice, Customer must pay the undisputed amount and submit written notice of the disputed amount (with details of the nature of the dispute and the Services and invoice(s) disputed) to the address below on or before the due date. In the event Customer intends to dispute amounts already paid in full, Customer must submit notice of such dispute in writing within ninety (90) days from the date of the invoice (such date at the end of such period being the “Dispute Due Date”). After receipt of notice of the dispute, magicJack shall undertake an investigation of the dispute, so long as Customer has not waived its rights pursuant to this paragraph to make the dispute. At the conclusion of the investigation, magicJack will notify Customer of any amount determined by magicJack to be correctly charged and such amount will become immediately due and payable together with interest from the date originally due. If the dispute notice is not sent by the Dispute Due Date, Customer waives all rights to dispute the applicable charges, unless otherwise provided by law. All billing disputes must be sent to:

magicJack SMB, Inc.
Attn: Billing Department (Disputes)
222 Lakeview Avenue, Suite 1600
West Palm Beach, FL 33401

If Customer does not deliver full payment for all undisputed billed charges by the due date, magicJack may restrict, suspend or terminate use of the Services or Leased Equipment. Customer shall also reimburse magicJack for all reasonable attorneys’ fees and other costs incurred by magicJack relating to collecting delinquent payments or Customer’s non-payment breach of this Agreement. magicJack may also apply any deposits or other payments made by Customer. If magicJack applies any portion of a security deposit, Customer shall, within five (5) days following written notice thereof from magicJack, replenish the security deposit by the amount so applied by magicJack. If magicJack restricts, suspends or terminates Customer’s Services, magicJack may, at its sole option, choose to restore Customer’s Services prior to the payment of all charges due. Such restoration shall not be construed as a waiver of magicJack’s right to (i) receive full payment for all charges due or (ii) again restrict, suspend or terminate the Services at any time for non-payment of any unpaid charges. The failure of magicJack to restrict, suspend or terminate the Services for non-payment of any charges shall not operate as a waiver or estoppel to restrict, suspend or terminate Services of such account for non-payment of current or future charges.

11. Taxes. Prices for Services do not include, and Customer is responsible for, all Taxes. Customer may also be charged taxes by an Authorized Distributor for non-magicJack products and services sold or licensed by that Authorized Distributor in connection with Customer’s order for magicJack Services. Customer may present magicJack with an exemption certificate eliminating Customer’s and magicJack’s liability to pay certain Taxes. If any amounts paid for the Services are refunded by magicJack or an Authorized Distributor, applicable taxes may not be refundable.

12. Default and Remedies.

a. Customer Default. If Customer either (a) fails to make any payment of Fees when due and such failure continues for five (5) business days after written notice from magicJack, or (b) fails to observe or perform any other material term of this Agreement and such failure continues for thirty (30) days after written notice from magicJack, or (c) Customer files a petition in bankruptcy or if a petition in bankruptcy is filed against Customer and such petition is not dismissed within thirty (30) days after the effective filing date thereof, or a trustee or receiver is appointed over any of Customer’s relevant property; then magicJack may elect to: (i) terminate this Agreement and/or any Order Form, in whole or in part; (ii) immediately suspend Customer’s Services, in whole or in part; and/or (iii) pursue all remedies magicJack may have at law or in equity. Upon any termination or suspension of Customer’s Services, magicJack may immediately deactivate or delete Customer’s account and all related Account Data and/or restrict any further access to such Account Data or the Services. magicJack shall not be liable to Customer or any third party for any reason for terminating or suspending Customer’s use or access to the Services.

b. Immediate Suspension of Services. Notwithstanding any other provision of this Agreement, magicJack may suspend Customer’s right to access or use any portion or all of the Services immediately and without liability to Customer in any of the following circumstances: (i) magicJack has reason to believe that Customer’s use of the Services violates any Applicable Laws or the Acceptable Use Policy; (ii) magicJack is legally required to suspend or terminate Services; (iii) Customer’s use of the Services poses a security risk to the Services or any third party or may subject magicJack or any third party to liability; (iv) the occurrence or threat of any other event or circumstance for which magicJack reasonably believes that suspension of Services is necessary to protect the magicJack (or other third-party) network, systems or customers.

13. Service Requirements and Limitations.

a. High Speed Internet Connection Required. Customer understands, acknowledges, and agrees that: (i) Customer must have a properly-configured, high-quality, enterprise grade high speed internet connection to use the Services; (ii) use of the Services with any lesser network or connection may result in partial or complete unavailability, interruption or underperformance of the Services; and (iii) magicJack is not providing an internet connection for Customer. magicJack does not control and is not responsible for: (i) Customer’s internet connection; (ii) the quality of Customer’s internet connection; (iii) any third party products and/or services related to Customer’s internet connection; or (iv) problems with the Services that are caused by or related to Customer’s internet connection or network, including any unavailability, interruption, or underperformance of the Services. magicJack will not contact any of the internet providers and/or service or product providers on Customer’s behalf.

b. Voice-to-Text and Text-to-Voice. Certain magicJack Services may provide a function that allows voicemails to be converted to text and vice-versa. Customer understands and agrees that magicJack’s voice-to-text (“VTT”) and text-to-voice (“TTV”) features may not accurately transcribe voicemails or articulate text messages, respectively, and that: (i) any and all VTT and TTV features are provided merely as a convenience and may not accurately transcribe voice content, articulate text messages, or perform such functionality for all voice content or text messages or for the entirety of voice content or text messages; (ii) neither Customer nor any end user may rely on any VTT or TTV feature to perform such accurate transcription or articulation; and (iii) Customer and all end users shall be solely responsible for reviewing and/or listening to the original content of any Customer Communication or other media as necessary or appropriate to verify the accuracy of the message when using any VTT or TTV features in order to prevent Customer, any end user, or other party from incurring any cost, expense, liability, loss, damage, or harm. magicJack expressly disclaims all liability with respect to the conversion of voicemails to text or vice-versa.

c. Caller ID Display and Compliance. Caller identification Services provided by magicJack are based on availability of such Services from magicJack’s underlying providers. magicJack does not guarantee that such Services are available for all numbers in all serving areas. Customer acknowledges and agrees that the disclosure and/or display of information related to the origination of calls, messages, and other communications (including without limitation “Caller ID” information) may be subject to legal requirements, including without limitation those related to the accurate display of such information or the enforcement of certain privacy instructions, settings, etc. Customer agrees to comply with all such Applicable Laws and implementing regulations, including without limitation the Truth in Caller ID Act. magicJack has no obligation to disclose, display, or transmit any such information for or in connection with any Customer Communication.

d. Third Party Devices. magicJack does not guarantee or make any representation or warranty that any third party IP telephone or other device will work or be compatible with the Services or support the Services’ full performance, quality of service, or potential or range of features and functionalities.

e. Trial Services. magicJack may introduce new ancillary Services to new and existing customers. Such ancillary Services may sometimes be offered on a trial basis for a specified period of time during which Fees may or may not apply to Customer. In some cases, the terms of a trial may involve an automatic re-enrollment at the end of the trial unless the customer opts out of the trial and/or cancels the service during the term of the trial. In no event shall magicJack impose service fees on Customer for ancillary services without providing Customer the opportunity to opt-out of the trial and/or to cancel the ancillary Service during a no-cost trial period.

14. Unlimited Calling & Unlimited Voice ServicesFor unlimited calling plans, unlimited calling applies only to calls to traditional telephone networks or wireless networks made within the continental United States and Canada. Calls to (a) Alaska, (b) the Yukon and Northwest Territories of Canada, (c) all non-Canadian international calls, (d) non-8YY accessed calling card, platform, conference or chat lines, or (e) certain other high cost calls, or any call wherein we incur a cost from another carrier, are subject to additional charges. Unlimited voice services are provided solely for live dialog between two individuals. Unlimited voice services may not be used for conference calling, call forwarding, monitoring services, data transmissions, transmission of broadcasts, transmission of recorded material, or other connections which do not consist of substantially uninterrupted live dialog between individuals. If magicJack finds that Customer is using an unlimited voice service offering for other than live dialog between two individuals, magicJack may, at its option, terminate Customer’s service or change Customer’s plan. magicJack may provide commercially reasonable written or email notice that it intends to take any of the above actions. Notwithstanding the foregoing, Customer shall be entitled to use magicJack conference calling services such as three way calling and magicJack-provided conference calling bridges. See Section 15 below for additional limitations pertaining to Customer’s use of unlimited voice services.

15. Acceptable Use Policy. Customer shall use the Services only in a manner that fully complies with all Applicable Laws, as well as the terms and conditions of this Agreement. Use of the Leased Equipment, the Services or other action that is in violation of this Section 15 or that causes a disruption in the magicJack network integrity, or in magicJack’s determination threatens or compromises the security of magicJack, its vendors, its other customers or the Services whether directly or indirectly, is strictly prohibited and permits magicJack to suspend or terminate the Services without prior notice at the sole discretion of magicJack and further permits magicJack to disclose any relevant information, including Customer Confidential Information, to necessary authorities or third parties. magicJack shall have the right, in its sole, but reasonably exercised discretion, not to accept, transmit or deliver any messages or content that it reasonably believes contains inappropriate content or that is, or could reasonably become, the subject of any legal, regulatory, or other governmental proceeding or process, including a law enforcement proceeding, process, or inquiry.

a. Commercial Use. Customer agrees and represents that Customer is purchasing the Services and/or the equipment for Customer’s internal use only, and Customer shall not resell, transfer or make a change to the Services without the advance express written permission of magicJack. Customer shall not in any way interfere with other users, the services or equipment of the network or use the Services in any way for (or as part of) any commercial service or application distributed or sold by Customer. Customer may not attempt to, in conjunction with any device, software program or service, circumvent technological measures employed to control access to the Services.

b. Reasonable Use. magicJack’s business service plans and features are for normal, reasonable business use and consistent with the types and levels of usage by typical customers on the same business calling plan. “Typical” refers to the calling patterns of at least 95% of magicJack’s business customers on the same business calling plan. Certain calling and messaging plans, including unlimited calling and messaging plans, are designed for normal commercial use and are not intended to represent typical usage by unique organizations such as call centers, resellers, fax messaging services, telemarketing firms, or for use without live dialog, such as transcription services, intercom or monitoring services. Unauthorized or excessive use beyond that normally experienced by typical, similarly situated business customers may cause extreme network capacity and congestion issues and interfere with magicJack’s network and the third party networks with which magicJack connects for call initiation and completion services. Any use of the Services or any other action that causes a disruption in the network integrity of magicJack services or its vendors, whether directly or indirectly, is strictly prohibited and may result in termination of the Services.

i. Evaluation of Usage. magicJack evaluates Customer usage in comparison to typical levels of permissible usage engaged in by magicJack’s business customers. The following is a non-exhaustive list of impermissible uses under magicJack’s business plans and is considered outside of normal use, whether obtained directly from magicJack or an Authorized Distributor:

• Resale to others;
• Auto-dialing or fax/voice blasts;
• Without live dialog, including use as a monitor or for transcription purposes;
• Continuous or extensive call forwarding;
• Continuous connectivity;
• Constant dialing;
• Iterative dialing;
• Fax broadcast;
• Fax blasting;
• Telemarketing;
• And any other use involving practices that are in violation of any law or regulation or any other activity that would be inconsistent with small business usage.

ii. Review of Unlimited Usage. magicJack reserves the right to review usage of unlimited usage plans to ensure that customers are not abusing such plans. Customer agrees to use unlimited voice plans for normal voice and/or text message related communications with aggregate usage that falls within the range of similarly situated business customers. Use of unlimited “paperless facsimile” service must also fall within the normal range of similarly situated business customers and shall in no event exceed 500 transmitted pages sent or received per month. In addition, Customer agrees that Customer will not employ methods or use devices to take advantage of unlimited plans by using the Services excessively or for means not intended by magicJack. magicJack may terminate service immediately if it determines, in its sole discretion, Customer is abusing an unlimited minute plan. magicJack deems usage that substantially exceeds the average volume of its other unlimited usage plan customers as abusive. Customer agrees that magicJack has the right to terminate Customer’s service and/or charge Customer additional fees if Customer’s usage is considered abusive in the sole discretion of magicJack.

iii. Excessive Usage. If it is determined that Customer’s usage is abusive, at magicJack’s sole option, Customer’s service may be immediately terminated. A Customer’s aggregate usage may be considered outside of normal use if involves excessive:

• Number of calls terminated and re-initiated consecutively, which, in the aggregate, result in excessive call lengths during a specific time frame;
• Number of inbound domestic toll free calling patterns during a month; or
• Other abnormal calling patterns indicative of an attempt to evade enforcement of this Reasonable Use Policy

Based on such a combination, magicJack may determine that abnormal, unreasonable or impermissible usage is occurring when compared to typical customers on the same calling plan, and may take appropriate steps described below to enforce this Section 15 and Section 16, as well as the Terms of Service. If, in magicJack’s sole discretion, magicJack affords Customer the opportunity to correct Customer’s abnormal usage patterns and Customer fails to immediately conform to normal use, magicJack may exercise its right to suspend or terminate Customer’s Service with or without notice.

c. Prohibited Use of the Services. Customer may not use any automated means to manipulate the Services or use the Services to violate any law, rule, regulation or any third party’s intellectual property or personal rights. By way of example, Customer shall not use the Services or Equipment to:

• Impersonate another person;
• Send bulk unsolicited messages, including “junk” or “spam” messages;
• Use robots, data mining techniques or other automated devices or programs to catalog, download, store or otherwise reproduce or distribute information from the Services or use any automated means to manipulate the Services;
• Violate any law, rule or regulation;
• Violate any third party’s intellectual property or personal rights;
• Exceed Customer’s permitted access to the Services; or
• Transmit, upload, distribute in any way, or store any corrupted file or material that contains viruses, time bombs, Trojan horses, worms, malware, spyware, or any other programs or materials that may be harmful or dangerous or may damage the operation of the Services or another party’s computers, devices, equipment, systems, or networks.

magicJack may remove or block all communications if magicJack suspects a violation of this Agreement, or if magicJack thinks it necessary in order to protect the Services, or magicJack, its parent, affiliates, directors, officers, agents, and employees from harm.

d. For Lawful and Appropriate Purposes Only; magicJack’s Rights. Customer may not use the Services or Equipment in any way that is illegal, improper or inappropriate. The following is a non-exhaustive list of examples of illegal, improper, or inappropriate uses of the Services or Equipment:

• Threatening;
• Abusive;
• Harassing;
• Defamatory;
• Libelous;
• Deceptive; and
• Invasive of another’s privacy or any similar behavior

16. Fraudulent Use of Service. Customer shall bear the risk of loss and assume all liability arising from prohibited, unauthorized or fraudulent usage of Services. Any such prohibited, unauthorized or fraudulent use shall be deemed a material breach of the Agreement by Customer. Customer is responsible to secure all credentials used to access the Services, including credentials used by telephones or softphones and credentials used by end users or administrators, as well as the media access control (MAC) address of telephones used by Customer. Customer acknowledges that placing telephones on a publicly accessible internet protocol address or a publicly accessible network will subject the Customer to a higher level of risk for fraudulent activity. Customer shall not be excused from paying for Services or any portion thereof on the basis that fraudulent calls, and any charges associated with such calls (e.g. long distance charges), comprised a corresponding portion of the Services. In the event magicJack discovers fraudulent calls being made, Customer consents to magicJack taking actions it deems reasonably necessary (including blocking access to particular calling numbers or geographic areas), without notice to Customer, to prevent such calls from taking place. Customer acknowledges and agrees that magicJack: (a) is under no obligation to investigate the authenticity of calls charged to Customer’s account, (b) is under no obligation to take action to prevent such calls from being made, and (c) is not liable for any fraudulent calls processed by magicJack and billed to Customer’s account.



19. Indemnification. Customer agrees to defend, indemnify and hold harmless magicJack, its Affiliates, and their respective employees, officers, directors, shareholders and agents from and against any loss, damages, fines, penalties, injuries to persons or property, costs, and expenses (including reasonable attorneys’ fees and dispute resolution expenses) incurred in connection with claims arising from or relating to: (i) any act, error, omission, fault, negligence, or misconduct of Customer or any user of the Services, Software or Equipment, whether authorized or unauthorized by Customer; (ii) breach of any obligation, warranty, representation, or covenant of this Agreement, including the Acceptable Use Policy, by Customer or any of its end users; (iii) any claim by any employee or invitee of Customer or user other than a claim based on the gross negligence or willful misconduct of magicJack; (iv) Customer’s use of the Services, Software or Leased Equipment or otherwise related to any voicemail, text and/or fax, spam, solicitations, or commercial messages that Customer or its users may send and/or receive using the Services; (v) violation of any Applicable Laws by Customer or any Customer employee, contractor or agent; (vi) the misappropriation, breach, violation, or infringement of any right, title or interest of any third party, including but not limited to, contractual rights, intellectual property rights, rights of privacy, and rights of publicity and personality; or (vii) the inability to use the Services with third party equipment or services, or failure or outage of the Services for any reason, including but not limited to those related to calling "911" or other emergency responders.

20. Confidentiality.

a. “Confidential Information” means all nonpublic information relating to a Party or its Affiliates that (i) if provided in writing, is marked or labeled as confidential or proprietary, or (ii) if provided verbally, is designated as confidential at the time of disclosure, or (iii) even if not so marked, labeled or identified, given the nature of the information or the circumstances surrounding its disclosure, reasonably should be considered as confidential. Confidential Information includes, without limitation, all nonpublic information relating to (i) a Party’s or its Affiliates’ technology, customers, employees, business plans, agreements, finances and other business affairs, (ii) the magicJack network or service delivery platform, and (iii) the terms of any Order Form. Confidential Information does not include any information that (i) has become publicly available without breach of this Agreement, (ii) was known to the Party receiving Confidential Information under this Agreement (the “Receiving Party”) at the time of its receipt from the Party disclosing the Confidential Information (the “Disclosing Party”) or its Affiliates as shown by documentation reasonably acceptable to Disclosing Party, (iii) is received from a third party who did not acquire or disclose such information by a wrongful or tortious act, or (iv) was independently developed by the Receiving Party without use of any Confidential Information as shown by documentation reasonably acceptable to Disclosing Party.

b. Each Party hereby agrees to hold Confidential Information in strict confidence and shall, in any case, protect such Confidential Information with no less diligence than that with which it protects its own confidential or proprietary information of a similar nature, but no less than reasonable care. The Receiving Party agrees not to use any Confidential Information of the Disclosing Party for any purpose unrelated to the Services. Each Party may disclose the Confidential Information of the other Party on a “need to know basis” and then only to its (and, in the case of magicJack, its Affiliates’) directors, officers, advisors, employees and other legal, business or financial partners or representatives; provided that all such persons are subject to written confidentiality agreements which contain provisions which are no less restrictive than the provisions of this Section 20. In addition, magicJack may disclose this Agreement under a comparable non-disclosure agreement in response to a third party due diligence request supporting a financing or non-ordinary course of business corporate transaction.

c. If the Receiving Party is legally compelled by any means (including deposition, interrogatory, request for documents, subpoena, civil or regulatory investigative demand or similar process) to disclose Confidential Information of the Disclosing Party, subject to applicable laws, the Receiving Party must provide the Disclosing Party with prompt written notice of such legal requirement in order to allow the Disclosing Party to seek a protective order or other appropriate remedy or waive compliance with this Section 20.

c. Upon the termination or expiration of this Agreement, or at any time upon the request of the Disclosing Party, the Receiving Party shall, at the Disclosing Party’s option, return or destroy (and certify as to such destruction) all Confidential Information of the Disclosing Party in its control or possession, other than copies which the Receiving Party may be required to maintain under applicable law or regulation.


22. Local Number Portability.

a. Number Transfer on Service Activation. In the event Customer is not utilizing a new phone number or numbers for the Services, but rather is transferring existing phone number(s) which currently are subscribed to a carrier other than magicJack to magicJack, the terms and conditions of this section shall apply:

i. Customer hereby authorizes magicJack to notify Customer’s current local telephone company or other service provider of its decision to switch local, local toll and long distance services to magicJack and represents that Customer is authorized to take this action;

ii. Customer acknowledges that service providers require verification of identity, as well as authorization and other reasonable information in order to transfer (or “port”) any numbers to magicJack. Customer must correctly complete a letter of authorization, provide magicJack with a copy of Customer’s most recent bill from such service provider, and provide magicJack with any other information required by such service provider to port Customer’s number to magicJack, all as more particularly provided on magicJack’s website www.magicjackforbusiness.com. FAILURE TO PROVIDE ANY INFORMATION REQUESTED BY MAGICJACK OR THE THIRD PARTY SERVICE PROVIDER WILL DELAY THE PORTING OF THE NUMBER TO MAGICJACK. MAGICJACK SHALL NOT BE RESPONSIBLE FOR ANY DELAY IN THE PORT OF CUSTOMER’S NUMBER AND WILL NOT PROVIDE CREDIT FOR ANY SUCH DELAYS.

iii. Customer agrees and acknowledges that if the Services are set up prior to the date that the number transfer becomes effective (“Port Effective Date”), Customer may only be able to make outgoing calls using the Services. In such event, Customer should keep another phone connected to the existing phone number to receive incoming calls until the Port Effective Date, after which Customer will be able to both make and receive calls using the Service. Customer agrees and acknowledges that if the Activation Date has not occurred as of the Port Effective Date, its existing phone service for the number being transferred may be disconnected and Customer may have no service for that number. Therefore, to avoid an interruption in Customer’s phone service, Services must be activated prior to the Port Effective Date. An estimate of the Port Effective Date will be sent to Customer via e-mail by magicJack.

iv. Customer acknowledges and agrees that magicJack may charge a fee for each number to be ported from another provider.

b. Number Transfer on Termination. After the Activation Date, magicJack or its providers may receive requests from other telephony providers (“Requesting Party”) acting as agents on Customer’s behalf to port a telephone number currently assigned to Customer to a third party provider (“Port-Out”). magicJack will support all such requests and will cooperate with the Requesting Party to perform any Port-Out in accordance with the Requesting Party’s reasonable directions and magicJack’s or its vendors’ standard operating procedures. Until the effective date of Customer’s proper termination (in accordance with the terms of this Agreement), Customer will: (a) remain a magicJack customer; and (b) be responsible for all charges and Fees associated with Customer’s magicJack Service. Customer will not receive any refund or partial refund or any credits for any charges already billed to Customer’s account. magicJack assumes no liability for costs associated with any numbers that cannot be ported or that Customer chooses not to port. Customer acknowledges that in the event of any account termination or cancellation, all telephone numbers associated with Customer’s account may be released. Similarly, the cancellation of individual services that have associated telephone numbers will result in the release of such numbers. Customer acknowledges that it is Customer’s responsibility to work with a third party provider to port out those numbers prior to Customer’s termination or cancellation of Customer’s account or termination of Services.

c. Ported Telephone Numbers Upon Cancellation.

i. Cancellation. If Customer requests that a new service provider port a number from magicJack, then Customer is required to inform magicJack of Customer’s intent to terminate the specific affected Services on Customer’s account or magicJack will continue to bill for such Services. Customer will continue to be responsible for all the charges and Fees associated with the remaining Services on Customer’s magicJack account. Customer will not receive any refund or partial refund or any credits for any charges already billed to Customer’s account.

ii. Consent & Electronic Submission. In some cases, magicJack may permit Customer to submit documentation required to port numbers using a web-enabled portal. Customer may withdraw Customer’s consent to submit Customer’s porting request electronically by contacting Customer Care prior to our submitting the porting request to the carrier. Customer’s consent to electronic submission applies only to the specific porting request Customer submits through web-enabled interface.

iii. Facsimile Service. Numbers assigned by magicJack for magicJack’s facsimile service cannot be ported to a new service provider without the assistance and cooperation of magicJack’s underlying partner. magicJack will use commercially reasonable efforts to facilitate a port of a facsimile number which was ported on Customer’s behalf to magicJack by another service provider. Customer may be required to pay a porting fee to magicJack.

23. Beta Services and Software. Certain Services or Software may be designated or offered as a “beta” version (“Beta Version”), which may or may not be released as a full commercial service in the future. Except as otherwise indicated under separate terms and conditions that may apply to such Beta Versions, magicJack shall not charge for such Beta Versions, but reserves the right to charge for subsequent versions of the Beta Version, including any potential commercial releases. Customer acknowledges and agrees that the Beta Version may contain, in magicJack’s sole discretion, more or fewer features or different licensing terms than a subsequent commercial release version of the Beta Version. magicJack reserves the right not to release later commercial release versions of the Beta Version. Without limiting any disclaimer of warranty or other limitation stated in this Agreement (or any separate terms and conditions that would otherwise be applicable to such Beta Versions), Customer agrees that Beta Versions are not considered by magicJack to be suitable for commercial use, and that they may contain errors affecting their proper operation. CUSTOMER ACKNOWLEDGES AND AGREES THAT USE OF ANY BETA VERSION MAY EXHIBIT SPORADIC DISRUPTIONS THAT HAVE THE POTENTIAL TO DISRUPT CUSTOMER’S USE OF ANY SERVICES OR SOFTWARE. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, MAGICJACK SPECIFICALLY DISCLAIMS ALL DAMAGES RESULTING FROM CUSTOMER’S USE OF ANY BETA VERSION. The fact and existence of any Beta Version shall be deemed to be magicJack Confidential Information under this Agreement.

24. Support. magicJack will make support available to Customer 24/7 via the Customer Care call center, which will be available to attempt to resolve technical issues with, and answer questions regarding the implementation or use of, the Services. Such support shall not include, and magicJack shall have no obligation hereunder to perform, any of the following: (i) on-site support; (ii) implementation of any software or hardware; (iii) configuration of any device; (iv) dedicated representative support; or (v) network or third party equipment support. Any end user contacting Customer Care may be required to provide certain verifying information (e.g., the answer to a security question on file) to receive support from Customer Care, and Customer Care may limit the level of support that it will provide or scope of information that it will disclose or confirm to any inquiring end user based on the scope of his or her account rights or permissions.

25. Data Retention. Customer acknowledges and agrees that: (i) magicJack has no obligation to store, retain, back-up, or ensure the availability of any Customer Communications or Account Data; (ii) to the extent that Customer wishes to retain any Customer Communications or Account Data or other information relating to the Services or the use thereof, Customer shall ensure that such information is downloaded, saved, and/or backed-up outside of the Services as necessary or appropriate for Customer’s purposes; (iii) Customer shall not rely on the Services as a repository for or means by which to retain, store, or back-up Customer Communications or Account Data or any other data, information, or materials; (iv) magicJack may delete or purge any and all copies and versions of any stored Customer Communications and/or Account Data or other data at any time, without notice, including without limitation after Customer deletes any such information from an account or after termination of this Agreement or cancellation of the Services; and (v) magicJack may, in its sole discretion and option and without notice, implement reasonable limits as to the size or duration of storage of Account Data.

26. Regulatory and Legal Changes. magicJack may discontinue, limit, modify any Service, or impose additional requirements to the provision of any Service, as may be reasonably required to comply with any Applicable Laws. If changes in Applicable Laws materially and adversely affect delivery of Services (including the economic viability thereof) or would impose further compliance requirements, then magicJack will provide notice to Customer to the extent that said changes impact Customer’s obligations and details of regulatory changes.

27. No Resale. Customer represents and warrants that it will be the ultimate end user of the Services. Customer shall not in any way resell, license, permit nor allow any third party to use the Services without receiving magicJack’s prior written consent, which may be withheld in magicJack’s sole and absolute discretion.

28. Third Party Networks. In some cases, magicJack may utilize the public Internet and third party networks outside of its control in conjunction with the provision and maintenance of the Services and its websites. magicJack makes no representation that the Internet or any such third party network will adequately secure or protect the privacy of Customer or any end user’s personal information, and magicJack expressly denies any associated liability. Actions or inactions caused by these third party networks can result in situations in which magicJack customers’ connections may be impaired or disrupted. Although magicJack will use commercially reasonable efforts to remedy or avoid such events, magicJack expressly disclaims warranties with respect to these third party networks or any disruptions that may occur thereon. Unless required by law, subpoena, court order, warrant or other valid government request, magicJack will only share Customer’s personally identifiable information with other magicJack entities and/or business partners (including Authorized Distributors) that are acting on magicJack’s behalf to perform the activities described herein and in accordance with the Privacy Policy.

29. Suggestions and Feedback. In the event that Customer provides magicJack with suggestions, enhancement requests, recommendations, proposals, documents, or other feedback with respect to the Services or Software (collectively, “Feedback”), Customer grants magicJack and its Affiliates a royalty-free, worldwide, irrevocable, perpetual license to use, modify, and distribute such Feedback in connection with efforts to improve, enhance or modify the Services or Software without compensation to Customer or attribution of any kind.

30. Changes.

a. Changes to the Agreement. magicJack reserves the right to change any term of this Agreement at any time, but only on a prospective, not retroactive, basis. magicJack will provide Customer thirty (30) days advance written notice of changes to this Agreement that would have a materially adverse effect on Customer. Notice may be provided by e-mail to the most recent email address associated with Customer’s account. Changes will become effective on the next business day following the thirty (30) day notice period and Customer agrees to be bound by any changes after such thirty (30) day notice period.

b. Changes to the Services. Customer understands and agrees that magicJack may make upgrades or changes to the Services which will not materially diminish the functionality of the Services without prior notice to Customer. In the event that a change to the Services would, in magicJack’s reasonable discretion and judgment, permanently and materially diminish or impair the functionality of the Services (a “Change”), and such Change is unacceptable to Customer, Customer may terminate the Services without penalty within thirty (30) days of becoming aware of the Change by calling Customer Care. Any use of the Services after the such date will be deemed Customer’s acceptance of the Change.

31. Dispute Resolution; Mandatory Binding Arbitration; Waiver of Jury Trial.

a. Written Notice. In the event either Party has a dispute or claim against the other Party (except with respect to invoice disputes which are addressed in Section 10.h), the disputing Party shall provide written notice to the other Party in accordance with the notice provisions herein.

b. Initial Escalation to Management. The Parties agree to escalate disputes to their respective management, who will use commercially reasonable efforts to resolve the dispute by consulting with each other in good faith to reach an equitable resolution satisfactory to both parties within thirty (30) days of the receipt of notice. Neither Party shall pursue or commence proceedings regarding the dispute in any court, administrative arbitral or other adjudicative body prior to engaging in such consultations and negotiations.

c. Binding Arbitration. If negotiations fail to resolve the dispute within thirty (30) calendar days, all disputed claims (except for claims set forth in subsection (e) below) must be resolved by binding arbitration before a single arbitrator in accordance with the commercial rules of the American Arbitration Association (“AAA”) (available on the AAA website, www.adr.org/aaa) in effect as of the date this Agreement goes into effect. Any matter to be settled by arbitration shall be submitted to the American Arbitration Association in Palm Beach County, Florida, and Customer consents to binding arbitration in Palm Beach County, Florida. This agreement to arbitrate is intended to be given the broadest possible meaning under Applicable Laws and shall survive termination of this Agreement. The initiation of an arbitration dispute shall not otherwise prevent magicJack or Customer from terminating Services in accordance with this Agreement. The arbitrator may award relief only in favor of the individual party seeking relief and only to the extent necessary to provide relief warranted by that party's individual claim. The individual party may recover damages and attorneys’ fees, if authorized by the law governing such Party’s claim, to the same extent the individual party would be entitled to recover in court.

d. Disputes About This Agreement to Arbitrate. Disputes about the arbitrability of any claims and/or the scope, enforceability, or validity of this arbitration agreement shall be decided by an arbitrator.

e. Disputes That Need Not Be Arbitrated. Disputed claims involving either Party’s intellectual property rights, indemnity, or confidentiality obligations; fraudulent or unauthorized use, theft, or piracy of service; or matters relating to injunctions or other relief may be resolved by binding arbitration as set forth in subsection (d), but are not required to be resolved by binding arbitration and may be heard in a court of law, at the option of the entity asserting the disputed claim.

f. Costs. Each Party will be responsible for its own costs incurred in the arbitration, including arbitration filing fees and attorneys’ or expert witness fees. The arbitrator’s costs and expenses shall be shared equally between the Parties. If a Party elects to appeal an award or seeks to vacate the award in court, the prevailing Party in the appeal or judicial proceeding shall be entitled to recover all reasonable attorneys’ fees incurred in that appeal or judicial proceeding.

g. Waiver of Jury Trial. Customer and magicJack agree that, by entering into this agreement, Customer and magicJack are waiving the right to a trial by jury. Customer and magicJack agree that the arbitrator may award relief only in favor of the individual Party seeking relief and only to the extent necessary to provide relief warranted by that Party’s individual claim. The arbitrator may not award special, indirect, punitive, incidental or consequential damages. CUSTOMER AND MAGICJACK AGREE THAT CUSTOMER MAY BRING CLAIMS AGAINST MAGICJACK ONLY IN CUSTOMER’S INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING AND THAT CUSTOMER EXPRESSLY WAIVES ITS RIGHT TO BRING A CLASS ACTION SUIT. Customer and magicJack agree that the arbitrator may not consolidate more than one person’s or entity’s claims, and may not otherwise preside over any form of a representative or class proceeding.

h. Severability. If any term, covenant, or condition contained in this dispute resolution/arbitration provision, is, to any extent, held invalid or unenforceable in any respect under the laws governing this dispute resolution/arbitration provision, the remainder of this dispute resolution/arbitration provision shall be valid and enforceable to the fullest extent permitted by law.

32. General.

a. Assignment. This Agreement inures to and is binding upon the Parties’ successors and permitted assignees. Customer shall not assign this Agreement without magicJack’s prior written consent, not to be unreasonably conditioned, withheld or delayed; provided that Customer may, without consent, but with reasonable prior written notice, assign its rights and obligations hereunder to any parent, affiliate or subsidiary of Customer or pursuant to any merger, acquisition, reorganization, sale or transfer of all or substantially all its assets; provided, however, that any proposed assignee shall be at least as creditworthy as Customer (as reasonably determined by magicJack), shall agree in advance and in writing to assume and be bound by all provisions of this Agreement, and shall deliver to magicJack fully-executed documents reasonably acceptable to magicJack establishing the terms of such an assignment. Any assignment by Customer other than as permitted by this Section 32a shall be void and of no force or effect.

b. Notices. Except as otherwise provided in this Agreement:

i. To Customer: In the event magicJack is required or desires to provide Customer with notice under this Agreement, it will provide electronic notice to the e-mail address on file for the Administrator. In the event Customer changes its e-mail address for notice purposes, Customer shall advise magicJack immediately in writing. Customer hereby agrees to electronic delivery of all required notifications, including invoices, unless otherwise expressly provided herein.

ii. To magicJack: Any notice required or given under this Agreement to magicJack (except for billing dispute as described in Section 10) will be in writing and delivered to magicJack as follows:

magicJack SMB, Inc.
Attn: Legal Department
222 Lakeview Avenue, Suite 1600
West Palm Beach, FL 33401

Such address and contact information may be changed by either Party by prior written notice to the other Party in accordance with this paragraph. A notice will be deemed to be duly given (i) on the date of delivery if personally delivered by hand or by a nationally recognized overnight express courier, or (ii) upon the third day after such notice is deposited in the United States mail, if mailed by registered or certified mail, postage prepaid, return receipt requested. For clarity, e-mail or fax notices are informational only and shall not constitute formal notice.

c. Force Majeure. Neither Party is liable for any failure of performance (other than for delay or performance in the payment of money due and payable hereunder) to the extent such failure is due to any cause or causes beyond such Party’s reasonable control, including acts of God, fire, explosion, vandalism, cable cut, adverse weather conditions, governmental action, acts of terrorism or strikes and similar labor difficulties. Either Party’s invocation of this clause will not relieve Customer of its obligation to pay for any Services actually provided or permits Customer to terminate any Services except as expressly provided herein. In the event such force majeure event prevents the availability or material use of the affected portion of Services and such event continues for more than ten (10) consecutive days, either Party may terminate the affected portion of the Services without liability.

d. Publicity. Customer will not issue any press release or other public statement relating to this Agreement, except as may be required by law or agreed by magicJack in a writing signed by a duly authorized representative of magicJack. Customer agrees that magicJack may identify Customer as a user of the Services in its business deals, press releases, and other promotional materials, including its website(s), using Customer’s name, trademarks and/or logos, provided that Customer may revoke such right with written notice to magicJack at any time. Customer hereby grants magicJack and its agents an irrevocable, perpetual, worldwide, non-exclusive, fully paid-up, royalty-free license (with right to sublicense) to use, reproduce, publish, and display Customer’s name, trademarks, service marks, designs, logos, and symbols in connection with such purpose.

e. Facsimile and Electronic Transmission; Counterparts. Order Forms and other documents that may be executed in connection with the Services may be executed and delivered by facsimile or electronic transmission, and upon receipt, such transmission shall be deemed the delivery of an original. Any such documentation may be executed in one or more counterparts, each of which when executed shall be deemed to be an original, and together shall constitute one and the same instrument.

f. Basis of Bargain; Failure of Essential Purpose. Customer acknowledges and agrees that magicJack has established its prices and entered into this Agreement in reliance upon the limitations and exclusions of liability and the warranty disclaimers set forth in this Agreement, and that they are an essential basis of the bargain between the parties and are material terms of this Agreement. The Parties agree that the limitations and exclusions of liability and warranty disclaimers specified in this Agreement will survive and apply even if found to have failed their essential purpose, and Customer hereby waives its right to contest the enforceability of any provision of this Agreement by reason of such failure.

g. No Commitments. Customer represents that magicJack has made no commitments or promises orally or in writing with respect to delivery of any future features or functions. In relation to any future features or functions, all presentations, RFP responses, and/or product roadmap documents, information or discussions, either prior to or following the date herein, are informational only, and are not the basis for, nor part of this this Agreement or any Order Form. magicJack has no obligation to provide any future releases or upgrades or any features, enhancements or functions, unless specifically agreed to by both Parties. Customer acknowledges that its purchasing decisions are not based upon any future features or functions.

h. Survival, Modification. The terms and conditions of this Agreement will survive the expiration or other termination of this Agreement to the fullest extent necessary for their enforcement and for the realization of the benefit thereof by the Party in whose favor they operate. Except for the rights of magicJack in Section 30, all modifications, amendments, supplements to or waivers of this Agreement must be in writing and executed by authorized representatives of both parties.

i. Relationship of the Parties. The relationship of magicJack and Customer shall not be that of partners, agents or joint venture’s for one another, and nothing contained in the Agreement shall be deemed to constitute a partnership or agency agreement between the Parties for any purposes. magicJack and Customer shall be independent parties and shall discharge their contractual obligations at their own risk subject to the terms of this Agreement.

j. Third Party Services. magicJack may use or rely on one or more licensors, service providers, and/or equipment providers or equipment lessors whose products, equipment and/or services are provided in conjunction with, or incorporated into, the Services and/or Leased Equipment (“Third-Party Services”). Each provider of such Third-Party Services (a “hird-Party Service Provider”) is expressly made a third party beneficiary under the applicable Order Forms and this Agreement and shall have the right to enforce the terms and conditions of the Order Forms and this Agreement respecting any terms affecting such Third-Party Service Provider as if such Third-Party Service Provider were a party to the Order Form and/or this Agreement. No other third party beneficiaries of this Agreement are intended by the Parties. Further, Third-Party Services may be governed by separate legal terms and conditions, which may be found or identified in documentation or on other media delivered with the Third-Party Services and which are incorporated by reference into this Agreement and shall govern the use of Third-Party Services. Customer agrees to comply with such terms and conditions of all Third-Party Services and Third-Party Service Providers. Any non-compliance with terms and conditions of Third Party Service Providers shall be considered non-compliance with this Agreement.

k. Waiver. The failure of either Party to enforce compliance with a provision of this Agreement shall not be construed as a general waiver of such provision or any other provision.

l. Severability. If any term, covenant or condition contained in this Agreement or any Order Form is, to any extent, held invalid or unenforceable in any respect under the laws governing this Agreement, the remainder of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

m. Governing Law. The laws of the State of Florida will govern this Agreement, without reference to its principles of conflicts of laws. Because this agreement is a transaction in interstate commerce, the Federal Arbitration Act (“FAA”), and not state arbitration law, shall govern the interpretation, validity and enforceability of the arbitration provision in Section 31 above.

n. Entire Agreement. This Agreement incorporates and includes any policies, addenda, schedules, exhibits or amendments attached to or referenced in an Order Form or this Agreement. This Agreement supersedes and replaces all terms and conditions set forth in any documents issued by Customer, including purchase orders and specifications, as well as any prior or contemporaneous agreements, statements, understandings, writings, commitments, or representations concerning its subject matter, as between Customer and magicJack.

o. Export Controls. Customer agrees to comply fully with all relevant export laws and regulations of the United States, including the U.S. Export Administration Regulations, administered by the Department of Commerce. Customer also expressly agrees that it shall not export, directly or indirectly, re-export, divert, or transfer any portion of magicJack Service, Equipment or Software to any destination, company, or person restricted or prohibited by U.S. export controls.

p. Copyright Infringement. Pursuant to the Digital Millennium Copyright Act of 1998 (17 U.S.C. § 512) (the “DMCA”) upon good faith belief that copyrighted content transmitted via magicJack is infringed, the copyright owner or its agent may send magicJack a notice requesting removal of the infringing content or blocking access to it. Also, the DMCA allows a party against whom a notice of copyright infringement has been filed to submit a counter-notice. Notices and counter-notices must meet the then-current statutory requirements implemented by the DMCA. Notices and counter-notices may be sent to magicJack’s legal counsel at the notice address provided in Section 32.b above. The notice must include: (i) an electronic or physical signature of the owner (or person authorized to act on behalf of the owner) of the copyrighted work; (ii) a description of the copyrighted work that is claimed to have been infringed upon; (iii) information reasonably sufficient to permit magicJack to locate the copyrighted work; (iv) address, telephone number, and e-mail address of the owner of the copyrighted work; (v) a statement by the owner of the copyrighted work or its agent asserting good-faith belief that the use in question is not authorized by the copyright owner, its agent, or the Law; and (vi) a statement by the owner of the copyrighted work or its agent, made under penalty of perjury, that the foregoing information in the notice is accurate and affirming ownership of the copyright or authorized to act on the copyright owner’s behalf. Any notice or counter-notice must be truthful and must be submitted under penalty of perjury. A false notice or counter-notice may give rise to personal liability. Parties should seek the advice of legal counsel before submitting a notice or counter-notice. Upon receipt of the notice, magicJack may make a good faith attempt to transmit the notice to the party who has transmitted or received the allegedly infringing copyrighted work, and to transmit any counter-notification to the complaining party. magicJack may, at its sole discretion, suspend, terminate, or disconnect Customer’s access to and use of the Services if it is deemed that such party has engaged in more than one instance of copyright infringement.