Document:

Employment Agreement between Ferenc B. Syony and The Sands Regent

 EXHIBIT 10.16 
  
 EMPLOYMENT AGREEMENT 
  
 THIS AGREEMENT is made and is effective on April 1, 2005, by and between The Sands Regent (“Sands”), a Nevada corporation, having an office
at 345 North Arlington Avenue, Reno, Nevada 89501, and Ferenc B. Szony (“Executive”), who resides at 1772 Belford Road, Reno, Nevada 89509. 
  
 RECITALS 
  
 1. Sands is engaged in providing entertainment through the development and management of hotels and casinos; 
  
 2. Sands desires to secure the services of Executive, and Executive is
willing to provide such services, each upon the terms and subject to the conditions set forth in this Agreement. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of the premises, the parties agree as follows: 
  
 1. DEFINITIONS. For the purposes of this Agreement, the parties hereby adopt the following definitions: 
  
 (a) “Cause” means: 
  
 (i) Executive’s material breach of a fiduciary obligation to Sands; 
  
 (ii) Executive’s material violation of the Sands Board Policy Manual; 
  
 (iii) Executive’s material breach of this Agreement
including, without limitation, continual failure to perform substantially his duties with Sands, excessive absenteeism or dishonesty; 
  
 (iv) Executive’s arrest or indictment for, or written confession of, a felony or any crime involving moral turpitude under the laws
of the United States; 
  
 (vi) Death of
Executive; 
  
 (vii) Declaration by a court that
Executive is mentally incompetent to manage his business affairs; or 
  
 (viii) The filing of any petition or other proceeding seeking to find Executive bankrupt or insolvent. 
  
 (b) “Change of Control” means and includes each of the following: 
  
 (i) The acquisition, directly or indirectly, by any “person” or “group” (as those terms
are defined in Sections 3(a)(9), 13(d) and 14(d) of the Exchange Act and the rules thereunder) of “beneficial ownership” (as determined pursuant to Rule 13d-3 under the Exchange Act) of securities entitled to vote generally in the election
of directors (“voting securities”) of the Company that represent 25% or more of the combined voting power of the Company’s then outstanding voting securities, other than: 
  
 (A) an acquisition by a trustee or other fiduciary holding securities under any employee benefit plan (or
related trust) sponsored or maintained by the Company or any person controlled by the Company or by any employee benefit plan (or related trust) sponsored or maintained by the Company or any person controlled by the Company, or 
  

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 (B) an acquisition of voting securities by the Company or a corporation owned, directly
or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the stock of the Company, or 
  
 (C) an acquisition of voting securities pursuant to a transaction described in clause (iii) below that would not be a Change of
Control under clause (iii); 
  
 Notwithstanding the foregoing,
neither of the following events shall constitute an “acquisition” by any person or group for purposes of this subsection (f): an acquisition of the Company’s securities by the Company which causes the Company’s voting securities
beneficially owned by a person or group to represent 25% or more of the combined voting power of the Company’s then outstanding voting securities; provided, however, that if a person or group shall become the beneficial owner of 25% or
more of the combined voting power of the Company’s then outstanding voting securities by reason of share acquisitions by the Company as described above and shall, after such share acquisitions by the Company, become the beneficial owner of any
additional voting securities of the Company, then such acquisition shall constitute a Change of Control; or 
  
 (ii) During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board, together with any
new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in clauses (1) or (3) of this subsection (f)) whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a majority thereof; or 
  
 (iii) the consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more
intermediaries of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets or (z) the acquisition of assets or stock of another
entity, in each case other than a transaction 
  
 (A) which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person
that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction; and, 
  
 (B) after which no person or group beneficially owns voting
securities representing 25% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (B) as beneficially owning 25% or more of combined voting
power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or 
  

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 (iv) The Company’s stockholders approve a liquidation or dissolution of the Company.

  
 (c) “Exchange Act” means the Securities Exchange Act
of 1934, as amended. 
  
 (d) “Executive” means Ferenc
Szony. 
  
 (e) “Sands” means The Sands Regent, a Nevada
Corporation, and its subsidiaries. 
  
 (f) “Disability”
occurs when Executive shall become unable to perform his essential duties of his employment, with or without reasonable accommodation, because of physical or mental condition, illness, injury or other incapacity, for ninety (90) days in
succession. 
  
 2. EMPLOYMENT. 
  
 (a) Sands hereby employs Executive and Executive hereby accepts employment by
Sands to serve as President and Chief Executive Officer of Sands. All prior agreements for the employment of Executive are superceded. Executive shall perform services of an executive nature consistent with his offices with Sands as may from time to
time be assigned or delegated to him by the Board of Directors of Sands. Such duties may be further defined by the Board of Directors in its Board Policy Manual. 
  
 (b) Executive will devote his full business time and attention to his duties under this Agreement. 
  
 (c) It is contemplated Executive will travel to carry out his duties under
this Agreement. Air travel and other travel arrangements will comply with current Sands policies respecting class and terms of travel. 
  
 (d) Sands will provide Executive with medical and dental benefits, life insurance and all other benefit programs as provided to other officers of Sands.

  
 (e) Executive shall have 27 days’ paid personal time off
(PTO) during each year of this Agreement taken at such times as mutually convenient to Executive and Sands. 
  
 3. TERM OF EMPLOYMENT. 
  
 The term of Executive’s employment will cease only as provided and as more fully described in the following Paragraph 4. This Agreement shall remain in effect until Executive’s employment is terminated, or until mutually agreed by
the Parties. 
  
 4. TERMINATION OF EMPLOYMENT. 
  
 This Agreement and Executive’s employment with Sands shall terminate in
accordance with the following terms: 
  
 (a) Death of
Executive. This agreement and Executive’s employment shall automatically terminate immediately upon the death of Executive. If Executive dies during the term of this Agreement, Sands shall pay to the estate of Executive the compensation
that would otherwise be payable to Executive through the end of the month in which death occurs. 
  
 (b) Disability of Executive. If during the term of this Agreement Executive becomes Disabled, Sands may terminate this Agreement and
Executive’s employment immediately, in which case, Sands shall pay to Executive or his estate the compensation that would otherwise be payable to Executive for an additional 

  

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twelve months following the end of the month in which notice of termination for Disability is provided to Executive or his representative. 
  
 (c) By Sands for Cause. Sands may, by written notice to Executive,
terminate this Agreement and Executive’s employment for Cause. In the event of a termination for Cause, Sands shall pay to Executive or his estate the compensation that would otherwise be payable to Executive through the end of the month in
which notice of termination for Cause is provided to Executive. 
  
 (d) By Executive. Executive may terminate his employment at any time upon ninety days’ written notice to Sands. 
  
 (e) Upon Change of Control. In the event of a Change of Control, the term of Executive’s employment and this Agreement shall be two years from
the date the Change of Control becomes effective, provided that Executive is employed on the effective date of the Change of Control. During the two year period following a Change of Control, this contract shall not be amended or cancelled without
the express, written consent of both Sands or its successors or assigns, and Executive. 
  
 (f) If not terminated pursuant to subparagraphs (a) through (d), and except as provided in subparagraph (e) of this Paragraph 4, this Agreement may be terminated by Sands for any reason or for no reason,
upon written notice of termination, in which case termination will become effective no sooner than twelve months following such notice, after which all obligation for payment of compensation to Executive shall cease. 
  
 5. BUSINESS EXPENSE REIMBURSEMENT. 
  
 Executive will be entitled to reimbursement by Sands for the reasonable
business expenses paid by him on behalf of Sands in the course of his employment hereunder on presentation to Sands of appropriate vouchers (accompanied by receipts or paid bills) setting forth information sufficient to establish: 
  
 (a) The amount, date, and place of each such expense; 
  
 (b) The business reason for each such expense and the nature of the business
benefit derived or expected to be derived as a result thereof; and, 
  
 (c) The names, occupations, addresses, and other information sufficient to establish the business relationship to Sands of any person who was entertained by Executive. 
  
 6. COMPENSATION. Sands agrees to pay Executive, and Executive agrees to accept from Sands, during the first year commencing
July 1, 2004, and ending June 30, 2005, for the services to be rendered by him hereunder, the following: 
  
 (a) Base Salary. Executive shall receive a base salary at the rate of $370,000 per annum payable in monthly installments in arrears. Executive
shall thereafter receive annual salary reviews by the Board of Directors, provided that the base salary will not fall below $370,000. 
  
 (b) Bonus. Executive shall be considered for annual bonuses pursuant to the Sands Bonus Program as set annually and approved by the Board
Compensation and Governance Committee. 
  
 (c) Executive
Benefits. Executive shall be entitled to participate in any retirement, bonus or other benefit plan which applies generally to executive officers of Sands, except that there shall be no duplication of benefits between this Agreement and other
executive benefits. 
  

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 (d) Stock Incentive Plan. Executive will be entitled to participate, in the discretion of the
Board of Directors, in The Sands Regent 2004 Equity Incentive Plan, as amended or continued, pursuant to the terms of such Plan and any Award Agreement provided thereunder. 
  
 (e) Withholding. All payments by Sands shall be subject to required withholdings including taxes at the time such
payments are actually made. 
  
 (f) Deferred Compensation.
Executive may elect to defer up to forty percent (40%) of his base salary and/or bonus upon agreement with the Board of Directors upon such conditions as the parties may agree, and subject to any limitations established by law. 
  
 7. BENEFIT AND BINDING EFFECT; ASSIGNMENT. This Agreement shall inure to the benefit
of and be binding upon Sands, its successors and assigns, including but not limited to any corporation, person or other entity which may acquire a controlling interest in Sands or any corporation with or into which Sands may be consolidated or
merged. Neither Sands nor Executive may assign its or his rights or obligations to any other person or entity without the express written consent of the other. 
  

8. GOVERNING LAW. This agreement shall be governed by and construed in accordance with the laws of the State of Nevada without reference to the choice of law
principles thereof. 
  
 9. ENTIRE AGREEMENT. This Agreement sets forth and
is an integration of all of the promises, agreements, conditions and understandings among the parties hereto with respect to all matters contained or referred to herein, and all prior promises, agreements, conditions, understandings, warranties or
representations, oral, written, express or implied, are hereby superseded and merged herein. 
  
 10. VALIDITY OF PROVISIONS. Should any provision(s) of this Agreement be found to be void or unenforceable in whole or in part, the remainder of this Agreement shall not be affected thereby, and such provisions
shall be modified or amended so as to provide for the accomplishment of the intentions of this Agreement to the maximum extent possible. 
  
 11. MODIFICATIONS OR DISCHARGE. This Agreement shall not be deemed waived, changed, modified, discharged or terminated in whole or in part, except as expressly
provided for herein or by written instrument signed by all parties hereto. 
  
 12. NOTICES. Any notice which either party may wish to give to the other parties hereunder shall be deemed to have been given when actually received by the party to whom it is addressed. Notices hereunder may be sent by courier,
mail, telefax, telegram or telex, to the following addresses, or to such other addresses as the parties may from time to time furnish to each other by like notice: 
  
 To Sands: 
  
 Chairman of the Board of Directors 
 The Sands
Regent 
 345 North Arlington Avenue 
 Reno, Nevada 89501 
 Telefax: (775) 348-6241 
  

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 To Executive: 
  

Ferenc Szony 
 President and Chief
Executive Officer 
 The Sands Regent 
 345 North Arlington Avenue 
 Reno, Nevada 89501 
 Telefax: (775) 348-6241 
  
 [SIGNATURE PAGE FOLLOWS] 
  

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 THIS AGREEMENT is effective on the first date set forth above. 
  

									
	 The Sands Regent
	 	 	 	 Ferenc Szony

					
	By:	 	/s/    JON N. BENGTSON        	 	 	 	 	 	/s/    FERENC B. SZONY        
	 	 	Chairman of the Board	 	 	 	 	 	 
			
	 Date: 6/22/05
	 	 	 	 Date: 6/10/05

  

 Page 7 of 7EMI Translation and Record Transport Service Agreement

 Exhibit 10.1 
  
 EMI Translation and Record Transport Service Agreement 
  
 THIS AGREEMENT is made effective as of the 1st day of June, 2004 (the “Effective Date”). 
  
 BETWEEN: 
  
 YAK Communications (Canada) Inc., 
 a corporation organized under the laws of Ontario 
 (the “Customer”) 
 - and - 
  
 TELUS Communications Inc., 
 a corporation organized under the laws of Canada 

(“TELUS”) 
  
 WHEREAS: 
  

	A.	The Customer is a telecommunications services provider; 

  

	B.	The Customer has entered into agreements with respect to the billing and collection of telecommunications services provided by the Customer with certain Canadian Local Exchange
Carriers; 

  

	C.	The Customer’s billing information with respect to such telecommunications services requires certain validation and conversion prior to its being in a form that the Canadian
Local Exchange Carriers can utilize for billing and collection; 

  

	D.	The Customer’s billing information must be distributed to the Canadian Local Exchange Carriers with whom the Customer has entered into agreements with respect to billing and
collection services; 

  

	E.	TELUS provides certain validation, correction, and translation services with respect to billing information that the Customer is able to provide; 

  

	F.	TELUS provides an interface with Canadian Local Exchange Carriers for the translation and transportation of billing information; 

  

	G.	The Customer has requested that TELUS provide certain validation, correction, translation, and record transport services with respect to the Customer’s billing information; and

  

	H.	TELUS has agreed to provide such services. 

  
 IN CONSIDERATION of the respective covenants and agreements contained in this Agreement, the Customer and TELUS mutually agree as follows. 

	1.	Interpretation and Scope 

  

	1.1.	Definitions and Interpretation 

  
 When used in this Agreement the following terms shall have the following meanings: 
  
 “Agreement” means this written instrument together with the attached Schedule “A” and any amendments
made in writing by the parties to such documents. “Eligible Canadian Local Exchange Carriers” or “Eligible Canadian LEC’s” means the billers with whom the Customer has a entered into a billing and collection services
agreement. The Eligible Canadian LECs are Bell Canada where it is operating in Ontario and Quebec, TELUS Communications Inc. where it is operating in Alberta and British Columbia, which Eligible Canadian LECs may be changed from time to time by
TELUS upon written notice. 
  
 “Services” means the
services to be provided by TELUS to the Customer as defined in Schedule ‘A”. 
  
 In the event of any conflict or inconsistency among the provisions of the various parts of this Agreement, such conflict or inconsistency shall be resolved by giving precedence, first, to the main body of this
Agreement and, second, to the Schedules. 
  

	2.	Services 

  

	(a)	TELUS shall provide the Services to the Customer in accordance with Schedule “A”. 

  

	(b)	TELUS shall be responsible for the manner in which such Services are performed, for the method employed in doing the same, and for all acts and things done in the delivery of the
Services outlined in Schedule “A”. 

  

	3.	Term and Termination 

  

	(a)	The term for the provision of the Services shall commence on the Effective Date and shall continue, subject to earlier termination, for a period of three (3) years (the
“Initial Term”). Unless TELUS receives written notice from the Customer to terminate the Services at least thirty (30) days prior to expiration of the Initial Term, TELUS shall continue to provide the Services on a month to month basis
(each a “Renewal Term”) at the same rates, charges and fees and on the same terms and conditions as provided for in this Agreement until the earlier of: 

  

	 	(i)	either party receives at least thirty (30) days’ prior written notice from the other party respecting termination of the Services effective the end of a Renewal Term; and

  

	 	(ii)	the Services are otherwise terminated as provided for herein. 

  

	(b)	During the Initial Term either party may, upon three (3) months prior written notice to the Other party, terminate this Agreement. 

  

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	(c)	In the event of termination by the Customer pursuant to Article 3(b) or in the event of termination pursuant to Article 3(d) or 3(e), the Customer shall pay to TELUS, as liquidated
damages and not as a penalty, termination fees in the amount of two thousand dollars ($2000.00) per month for each month and partial month of the unexpired portion of the Initial Term. 

  

	(d)	Notwithstanding any other provision of this Agreement, TELUS shall be entitled, at its option, to terminate this Agreement upon written notice to the Customer:

  

	 	(i)	if the Customer fails to pay any amounts due and owing to TELUS under this Agreement; or 

  

	 	(ii)	if the Customer otherwise fails to comply with any of the terms and conditions of this Agreement; after having been provided with notice of such deficiency and thirty (30) days
within which to cure such deficiency and such deficiency remains unremedied at the expiration of such time period. 

  

	(e)	Notwithstanding any other provision of this Agreement, TELUS shall be entitled, at its option, to terminate this Agreement immediately upon written notice to the Customer:

  

	 	(i)	where required by law, court order or regulatory order or directive; 

  

	 	(ii)	upon the Customer becoming bankrupt or insolvent; 

  

	 	(iii)	upon the filing by the Customer of any petition or answer seeking reorganization, readjustment or arrangement of the business of the Customer under any law relating to bankruptcy or
insolvency; 

  

	 	(iv)	upon the Customer ceasing to carry on business in the ordinary course; 

  

	 	(v)	upon the appointment of a receiver or receiver-manager for all or substantially all of the property of the Customer; 

  

	 	(vi)	upon the making by the Customer of any assignment or attempted assignment for the benefit of creditors; or 

  

	 	(vii)	upon the institution of any proceedings for the liquidation or winding up of the Customer’s business; 

  
 such termination to be effective on the date specified in the notice of termination.

  

	(f)	Expiration or termination of this Agreement shall not relieve the Customer of its obligation to pay amounts due or to become due to TELUS, nor deprive TELUS of any of its rights or
remedies or actions against the Customer. 

  

	(g)	This Agreement, including all Attachments and Schedules attached hereto constitutes the entire agreement and understanding between the parties hereto in connection with the subject
matter hereof, and no representations or statements made by either party, which are not stated herein shall be binding on the parties. This Agreement shall supersede and cancel any and all previous written or oral representations, communications,
negotiations, commitments and writings with respect thereto (including, but not limited to the EMI Translation Service Agreement between the parties dated the l day of July, 2000). 

  

 3 

	4.	Price and Terms of Payment 

  

	(a)	The Customer shall pay to TELUS the rates, charges and fees payable for the Services as specified in Schedule “A”. All rates, charges and fees shall be payable as of and
from the earlier of: (a) the Effective Date, and (b) the date of provision of the Services. 

  

	(b)	The Customer shall be responsible for the payment of all taxes, levies and duties imposed by any local, provincial, state or federal government or government agency in connection
with the provision of the Services to the Customer by TELUS. Where required by law, the Customer shall pay the relevant tax, levy or duty directly to TELUS. The Customer’s liability shall not include taxes, levies and duties imposed directly on
TELUS in the nature of a property, capital or income tax. 

  

	(c)	TELUS shall invoice the Customer monthly in advance for the month fees specified in Schedule “A”. TELUS shall invoice the Customer monthly in arrears for fees based on
usage specified in Schedule ‘A’. All charges shown on the Customer’s bill are due on the due date shown on the bill. All charges not paid by the due date are past due and will bear interest at the rate of 1.5% per month compounded
monthly (19.56% per year). 

  

	(d)	If the Customer terminates all or any part of the Services prior to expiration of the Initial Term or any Renewal Term, the Customer shall pay to TELUS all outstanding rates,
charges and fees to the effective date of termination plus, as specified in this Agreement, any early termination charges. 

  

	5.	Title 

  
 All work products including documentation, reports, brochures and manuals including, without limitation, any items deliverable under this Agreement, if
any, developed by TELUS pursuant to this Agreement, and all copyright, patent and all other proprietary rights in such work products shall be the property of TELUS and may be used or disclosed by TELUS to anyone in its sole discretion. Furthermore,
any and all designs, methods, processes, formulae, data, specialized know-how, improvements, innovations, trade secrets and specialized techniques that are made, prepared, developed, generated or produced by TELUS, its officers, employees, agents,
representatives, and subcontractors, in connection with the performance of the Services under this Agreement vest in TELUS and shall become the sole property of TELUS. The Customer agrees to execute all documents prepared at the expense of TELUS
which are required to give effect to this section. 
  

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	6.	Confidentiality 

  

	(a)	Each party shall not disclose to any third party any of the details of this Agreement or use any information which it has acquired as a result of this Agreement concerning the other
party’s plans, business, objectives, customers, products, processes, work or services, without the other party’s prior written consent. Such information shall only be used for the purposes of this Agreement. The receiving party shall take
every reasonable precaution to avoid disclosing such information, data or documentation and such precautions shall include, but are not limited to, the safeguarding of documents, the making of copies only when necessary, and giving security
instructions issued by the disclosing party to the receiving party from time to time. 

  

	(b)	The obligations set out in this Article 6 shall not apply to: 

  

	 	(i)	information which is within the public domain at the date of its disclosure to the recipient party or which thereafter enters the public domain otherwise than through the acts or
omissions of the recipient party, its officers, employees, agents, or representatives or any other person under an obligation to hold same confidential; 

  

	 	(ii)	information which is already known to the recipient party at the time of its disclosure by the disclosing party and is not subject to confidential restrictions;

  

	 	(iii)	information which is developed independently by the recipient party prior to or following the date of its disclosure to the recipient party; 

  

	 	(iv)	information which, following its disclosure by the disclosing party to the recipient party, is received by the recipient party without obligation of confidence from a third party
who the recipient party had no reason to believe was not lawfully in possession of such information free of any obligation of confidence; 

  

	 	(v)	information which the disclosing party has given its written approval to disclose; or 

  

	 	(vi)	information which the recipient party is required by a judicial, administrative or governmental body to disclose. 

  

	(c)	The obligations of confidentiality in this Article 6 shall, with respect to any particular information, survive for a period of two (2) years following disclosure of that particular
information by the disclosing party to the recipient party. 

  

	7.	Warranty and Limitation of Liability 

  

	(a)	TELUS shall not be liable for mistakes or errors in the transmission of billing messages received by TELUS nor for the content of such billing messages. TELUS does not guarantee
error-free or uninterrupted provision of the Services. TELUS will utilize reasonable commercial efforts to provide the Service in accordance with Schedule “A” but does not assume any financial liability for the value of the billing
records, real or implied, that TELUS is transporting on behalf of the Customer. 

  

 5 

	(b)	Other than as provided for in this Agreement, there are no other warranties, representations, conditions or guarantees of any kind whatsoever, either express or implied, whether
existing by statute, agreement, tort, product liability or otherwise, regarding the Services including, but not limited to, warranties, representations and guarantees as to merchantability, fitness for purpose, design, condition or quality.

  

	(c)	TELUS shall not be liable to the Customer or any other person for any losses, damages, injuries, or costs, notwithstanding TELUS’ notice of the same, arising out of or caused
by the Customer or its employees, agents, subcontractors, or those for whom at law it is responsible, in the performance of this Agreement including, without limiting the generality of the foregoing, that arising out of or caused by use of the
Services by the Customer. 

  

	(d)	In no event will TELUS be liable to the Customer or any party claiming through or under the Customer for lost profits, lost revenue, failure to realize expected savings, loss of use
or any other commercial or economic loss of any kind, or any punitive, exemplary, indirect, incidental, consequential or special damages, or any third party claims arising out of the use by the Customer of the Services, even if TELUS has knowledge
of the possibility of such potential losses or damages. 

  

	8.	Indemnity. 

  
 Notwithstanding any other provisions in this Agreement, the Customer shall: 
  

	(a)	indemnify and hold harmless TELUS, its directors, officers, employees and agents from and against any and all manner of liabilities, awards, claims, demands, suits, proceedings,
actions, causes of actions or other claims which may be brought or made against TELUS or such persons, or which TELUS or such persons may become subject to; 

  

	(b)	be liable to TELUS, its directors, officers, employees and agents for any and all losses, costs, charges, damages and expenses whatsoever (and without limiting the generality of the
foregoing, any direct losses, costs, damages and expenses of TELUS or such persons, including costs as between a solicitor and his own client) which TELUS or such persons may sustain, pay or incur; as a result of, arising out of, or in connection
with: 

  

	(c)	the provision of the Services to the Customer; 

  

	(d)	any willful, negligent or wrongful act or omission of the Customer, including any employees, agents and subcontractors of the Customer, pursuant to this Agreement;

  

	(e)	any alleged infringement by the Customer of any third party intellectual property rights; or 

  

 6 

	(f)	the improper disclosure of Confidential Information by the Customer, including any officers, employees, agents, representatives and subcontractors of the Customer.

  

	9.	CRTC Compliance 

  

	(a)	Tariffs means the tariffs of TELUS, including national tariffs and special assembly tariffs, and the Terms of Service contained therein, all as approved by the Canadian Radio-
television Telecommunications Commission (“CRTC”), and as amended from time to time. 

  
 TELUS and the Customer acknowledge and agree that the charges for, availability of, and terms and conditions associated with the provision of,
non-tariffed services are in no way contingent or conditional on the Customer subscribing for the provision of any tariffed or tariffable services from TELUS or a TELUS affiliate. Further, TELUS and the Customer acknowledge and agree that any terms
and/or benefits that are conferred on the Customer as a result of this Agreement (other than terms and/or benefits that are set out in TELUS’ tariffs) are in no way contingent or conditional on the Customer subscribing for the provision of any
tariffed or tariffable services from TELUS or a TELUS affiliate and TELUS and the Customer confirm that any such terms and/or benefits conferred on the Customer as a result of this Agreement would have been available even if the tariffed or
tariffable services were contracted for individually and separately from this Agreement. 
  

	(b)	The provision of the Services will be subject to the following tariffs: 

  
 NONE 
  
 Any applicable tariffs not listed in the above paragraph will, notwithstanding such omission, apply to the provision of the services under this Agreement
and such Tariffs will, in addition to those Tariffs listed above, to the extent of any conflict or inconsistency, prevail over any provision of this Agreement. 
  

	10.	General. 

  

	(a)	Relationship. The Customer and TELUS are independent contractors. Nothing in this Agreement shall be construed so as to create a partnership or joint venture or relationship
of franchisor and franchisee or principal or agent. Neither party shall be liable for the debts or obligations of the other party. 

  
 The Customer shall not be an agent of TELUS for any purpose. The Customer is not granted any right or authority-to assume or create any obligation,
express or implied, on behalf of or in the name of TELUS or to bind TELUS in any manner whatsoever. 
  

 7 

	(b)	Conflict of Interest. The Customer represents and warrants to the best of its knowledge and belief that, except as a shareholder in an incorporated company issuing shares to
the public at large, no TELUS official or employee has a direct or indirect interest or receives any direct or indirect proceeds from this Agreement. 

  

	(c)	Set Off. TELUS may, in its sole discretion, set off any and all amounts owed TELUS or an Affiliate thereof by the Customer for any reason including, but not limited to, any
amounts associated with the provision by TELUS of telecommunications services against amounts owed the Customer by TELUS. 

  

	(d)	Assignment. This Agreement is personal and shall not be assigned in whole or in part by the Customer without the prior written consent of TELUS, such consent not to be
unreasonably withheld. TELUS may assign this Agreement upon providing written notice to the Customer. TELUS may subcontract some or all of the Services without the prior written consent of the Customer. 

  

	(e)	Notices. Any notice or other communication pursuant to this Agreement required or desired by either party shall be deemed to have given on the date when delivered or sent by
confirmed facsimile transmission, or three (3) days after being sent by registered mail: 

  

			
	to the Customer:	    	YAK Communications (Canada) Inc.
	 	    	300 Consilium Place, Suite 500
	 	    	Ontario Ml H 3G2
	 	    	Attention: Mr. C. Zwebner
	 	    	Facsimile: (647) 722-7007
		
	to TELUS at:	    	TELUS Communications Inc.
	 	    	Suite 200, 250 Albert Street
	 	    	Ottawa, Ontario KI P 6M1
	 	    	Attention: Ms. L. Fournier
	 	    	Facsimile: (613) 780-6666

  

	(f)	Compliance with Law. The Customer shall properly execute and comply with all statutes, rules, orders, ordinances, and regulations of all governmental authorities in carrying
out its obligations pursuant to this Agreement. 

  

	(g)	Waiver. Failure by either party to insist upon the strict performance of any of the covenants, agreements, terms, provisions or conditions contained in this Agreement or to
exercise any election shall not be construed as a waiver or relinquishment of such covenant, agreement, term, provision or condition but the same shall continue and remain in full force. No waiver shall be deemed to have been made unless expressed
in writing. 

  

	(h)	 Entire Agreement. This Agreement constitutes the entire agreement between the Customer and TELUS pertaining to the subject matter and supersedes all prior
agreements, understandings, negotiations, representations and discussions 

  

 8 

	 	 
whether oral or written. This Agreement, in other than those sections under which TELUS has reserved to itself the right to modify or amend, shall not be
modified, amended, rescinded or cancelled except by the written agreement of the parties. 

  

	(i)	Severability. If any section of this Agreement is invalid or unenforceable in any circumstances, the remainder of this Agreement, and the application of such section in any
other circumstances, shall not be affected. 

  

	(j)	Force Majeure. Neither party shall be responsible for any failure to comply with any of the terms of this Agreement where such failure is directly or indirectly caused by or
results from events of force majeure beyond the control of either party. These events include, but are not limited to, fire, flood, earthquake, accident, civil disturbances, war, rationing, embargoes, strikes or labor problems, delays in
transportation, acts of God, or acts of government. It is agreed that the time for performance by TELUS shall be extended by the period of such uncontrollable circumstances. 

  

	(k)	Survival. The sections titled Warranty and Limitation of Liability, Confidentiality, Indemnity, and General shall survive expiration or termination of this Agreement.

  

	(l)	Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the Province of Ontario and the laws of Canada applicable. The Customer and
TELUS irrevocably attorn to the exclusive jurisdiction of the Courts of the Province of Ontario. 

  

	(m)	Headings. The headings contained in this Agreement are for convenience of reference only and shall not affect the interpretation or meaning of this Agreement.

  

	(n)	Enurement. This Agreement shall enure to the benefit of and be binding on the successors and permitted assigns of TELUS and the Customer. 

  
 IN WITNESS WHEREOF the parties have caused this Agreement to be executed as of the Effective
Date. 
  

							
	 YAK Communications (Canada) Inc.
	 	 TELUS Communications Inc.

				
	By:	 	 /s/ Charles Zwebner

	 	By:	 	 /s/ Bob Kwapis

				
	 	 	 Charles Zwebner

	 	 	 	 Bob Kwapis

	 	 	Name (Print or Type)	 	 	 	Name (Print or Type)
				
	 	 	 CEO

	 	 	 	 RVP Sales

	 	 	Title	 	 	 	Title
				
	 	 	 2004-10-19

	 	 	 	 Oct 24/04

	 	 	Date	 	 	 	Date

  

 9 

 Schedule “A” 
  
 Service 
  
 TELUS shall provide translation and record transport services for “sent paid” (originating telephone number and billing telephone number are the same) call
detail records received from the Customer destined for eligible Canadian Local Exchange Carriers (the “Services”). The Customer and TELUS agree as follows: 
  

	1.	Description 

  

	(a)	The Customer shall deliver “send paid” call detail records to TELUS. The call detail records delivered by the Customer to TELUS will contain, at minimum, the following
information. 

  
 Fields Required in Customer Call
Detail Records 
  

							
	 field name

	  	 data type

	  	Length

	  	 Description

	from number	  	character	  	10	  	originating NPA NXX line # e.g., 6044323212
				
	to number	  	character	  	16	  	terminating NPA NXX line # e.g., 5044142010, or overseas number up to 16 digits
				
	call duration	  	Numeric	  	6	  	connect time (HHMMSS) e.g., 152218
				
	billable time	  	Numeric	  	7	  	billable time (HHMMSST) e.g., 1522182
				
	charge	  	Character	  	7.2	  	charge or amount of call e.g., 0015.42
				
	date of record	  	Numeric	  	8	  	year/month/day (YYYYMMDD) e.g., 19990226
				
	provincial tax	  	Numeric	  	7.2	  	PST e.g., 0123.45
				
	federal tax	  	Numeric	  	7.2	  	GST or HST e.g., 0123.45

  
 The Customer may
provide values for additional fields in the call detail records such as ANI/ONI, rate period (day/evening/night), and to/from place name and state. If no information is specified in these fields, TELUS will assign default values. 
  

	(b)	 The Customer shall inform TELUS electronically that a file containing call detail records is available for processing. The Customer shall encrypt the file using
pretty good protection (“PGP”) encryption software using public encryption keys. The Customer shall provide TELUS with access to the Customer’s server 

  

 10 

	 	 
containing the file of encrypted call detail records. TELUS shall electronically access the file containing the encrypted call detail records on the
Customer’s server using File Transfer Protocol (“FTP”). 

  

	(c)	TELUS shall: 

  
 (1) decrypt the Customer’s encrypted call detail records; 
  

(2) perform certain validation on the call detail records; and 
  
 (3) convert call detail records to Exchange Message Interface (“EMI”) formatted billing records. 
  

	(d)	TELUS shall electronically deliver the Customer’s call detail records that have been converted to EMI formatted billing records to the Eligible Canadian LECs.

  

	2.	Additional Services 

  
 On receipt of a written request from the Customer, TELUS shall provide the following additional services. 
  

	 	(a)	Billing quality edits and automatic correction 

  
 TELUS shall provide a series of validation tests to the Customer’s call detail records. The validation tests may, in certain instances, include error
correction capabilities which will result in correction of certain errors or the specification of certain data not present in call detail records. 
  

	 	(b)	Reconciliation reports 

  
 TELUS shall provide the Customer with reports that include detailed information relating to the processing and transporting of the Customer’s call
detail records. The detailed information in the reports provide the Customer with the capability to reconcile treatment of call detail records. 
  

	 	(c)	Fraud monitoring 

  
 TELUS shall provide the following monitoring capabilities with respect to the Customer’s call detail records: 
  

	 	(1)	alerts based on industry standard or Customer provided “hot country” lists; 

  

	 	(2)	alerts based on number of calls to the same telephone number or calls to particular telephone numbers (Customer specified parameters); 

  

	 	(3)	alerts based on Customer specified level of toll charges. 

  

	3.	Error Treatment 

  

	 	(a)	Errors detected by TELUS (pre-billing return) 

  
 If a Customer call detail record contains incorrect or incomplete data, TELUS will use commercially reasonable efforts to correct the error and/or specify
information to complete the call detail record. 
  

 11 

 If TELUS is able to correct the error and/or specify information to complete the call detail record,
TELUS shall: 
  

	 	(1)	translate the corrected call detail record into an EMI formatted billing record; 

  

	 	(2)	electronically deliver the EMI formatted billing record to the Eligible Canadian LECs; and 

  

	 	(3)	electronically deliver a report to the Customer describing the actions TELUS took to correct the error and/or complete the call detail record. 

  
 If TELUS cannot correct the error and/or specify information to complete the
call detail record, TELUS shall, within fifteen (15) calendar days of the processing date, electronically deliver to the Customer the call detail record in error and a report containing an explanation of the error. 
  

	 	(b)	Errors detected by Eligible Canadian LEC’s billing interface (pre-billing return) 

  
 As a result of validation performed by the Eligible Canadian LECs on EMI formatted billing records, EMI formatted billing
records may be rejected by the Eligible Canadian LECs and returned to TELUS. 
  
 In the event of such return of EMI formatted billing records, TELUS shall, within fifteen (15) calendar days of receiving the returned EM! formatted billing record from the Eligible Canadian LEC, use commercially
reasonable efforts to correct the returned EMI formatted billing record. 
  
 If TELUS is able to correct the returned EMI formatted billing record, TELUS shall return the corrected EMI formatted billing record to the eligible Canadian LEC for billing. 
  
 If TELUS cannot correct the EMI formatted billing record, TELUS shall:

  

	 	(1)	reformat the EMI formatted billing record into the call detail record format; and 

  

	 	(2)	electronically deliver to the Customer the billing record in call detail record format and a report containing an explanation of the error. 

  

	 	(d)	Non-billable records (post-billing return) 

  
 As a result of the Eligible Canadian LEC performing billing and collection services for the Customer through use of the EMI formatted billing records, EMI
formatted billing records associated with calls that are non-billable may be returned to TELUS. 
  
 If TELUS receives EMI formatted billing records associated with non-billable calls from Eligible Canadian LEC, TELUS shall, within fifteen (15) calendar
days of receiving the returned EMI formatted billing record from the Eligible Canadian LEC biller: 
  

 12 

	 	(1)	reformat the EMI formatted billing record into call detail record format; and 

  

	 	(2)	electronically deliver to the Customer the billing record in call detail record format and a report containing an explanation of the error. 

  

	4.	Pricing 

  

	 	(a)	fees based on usage 

  
 translate call detail records to EMI formatted billing records and transport to Eligible Canadian LECs for billing: 
  
 The following rates apply: 
  

					
	 Monthly volume

	  	Rate per record

	 
	 <7M records
	  	$	0.002	*
	 7M to less than 10M records
	  	$	00015	 
	 10M records or more
	  	$	0.001	 

	*	A minimum monthly bill of $4,500 will apply for translation and record transport services. 

  

						
	pre-billing returns	  	for each record
above 5,000	  	$	0.05
			
	post-billing returns	  	for each record
above 5,000	  	$	025
			
	Customer specified billing quality edits and automatic correction	  	for each record
above 1 0,000	  	$	0.01
			
	reconciliation reports	  	monthly fee	  	$	300.00
			
	fraud monitoring	  	monthly fee	  	$	300.00
			
	 	  	for each Customer
initiated change	  	$	150.00

  
 All fees based on record counts relate
to record counts in a calendar month. 
  

 13

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