EXHIBIT 10.23
AMENDED CARRIER SWITCHED SERVICES AGREEMENT WITH
WILTEL, INC., DATED JUNE 17, 1996
*Certain information has been deleted from this Agreement pursuant to a
request for confidential treatment under Rule 406 of the Securities Act of 1933,
as amended.
WILMAX
AMENDED AND RESTATED
PROGRAM ENROLLMENT TERMS
[CARRIER]
These Amended and Restated Program Enrollment Terms ("PET") are made this
17th day of June, 1996 and are retroactive to February 1, 1996 (THE "EFFECTIVE
DATE"), by and between WorldCom Network Services, Inc. d/b/a WilTel ("WILTEL")
and National Telephone & Communications, Inc. ("CUSTOMER") and are a part of
their agreement for switched services, more particularly identified as
TSA#NTC-941101 (THE "TSA"). The TSA and this PET are collectively referred to
as the "AGREEMENT". In accordance with the Agreement, charges to Customer for
Service obtained thereunder shall be subject to the terms and conditions set
forth herein. The parties acknowledge that they previously executed Program
Enrollment Terms dated November 15, 1994 (the "PRIOR PET") and Interim Program
Enrollment Terms dated as of September 1, 1995, (the "INTERIM PET"). As of the
Effective Date, the terms and conditions contained in the Prior PET and the
Interim PET will be terminated in their entirety and all switched
telecommunications services provided by WilTel to Customer will be provided
under the terms and conditions as described in this PET.
1. SERVICE TERM: The Service Term will commence as of February 1, 1996
and will continue for a period through and including January 31, 2002.
2. CUSTOMER'S COMMITMENTS:
(A) In consideration of the rates and discounts offered hereunder,
Customer agrees as follows:
(i) Commencing as of the Effective Date and continuing for
a period of twelve (12) months thereafter (the "FIRST
COMMITMENT PERIOD"), Customer agrees to maintain, on a
take-or-pay basis, Monthly Revenue of at least
$9,000,000 ("CUSTOMER'S FIRST COMMITMENT").
Notwithstanding the foregoing, commencing as of the
Effective Date and continuing through the June, 1996
billing period (i.e., July, 1996 invoice), Customer
will be deemed to have satisfied Customer's First
Commitment.
(ii) Commencing with the February, 1997 billing period
(i.e., March, 1997 invoice), and continuing for a
period of six (6) months thereafter (the "SECOND
COMMITMENT PERIOD"), Customer agrees to maintain, on a
take-or-pay basis, Monthly Revenue of at least
$12,000,000 ("CUSTOMER'S SECOND COMMITMENT").
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(iii) Commencing with the August, 1997 billing period (i.e.,
September, 1997 invoice), and continuing through the
end of the Service Term (including any extensions
thereto) (the "CONTRACT COMMITMENT PERIOD"), Customer
agrees to maintain, on a take-or-pay basis, Monthly
Revenue of at least $15,000,000 ("CUSTOMER'S FINAL
COMMITMENT").
(iv) Commencing as of the Effective Date and continuing
through the end of the Contract Commitment Period,
Customer agrees to maintain, on a take-or-pay basis,
cumulative Monthly Revenue in the aggregate equal to at
least $1,000,000,000 ("CUSTOMER'S CONTRACT
COMMITMENT").
(B) For purposes of this Agreement "MONTHLY REVENUE" will include all
gross measured and per call Switched Service charges (i.e., Directory
Assistance and both Domestic and International) plus (i) three (3) times
Customer's first $300,000 recurring monthly Private Line Interexchange
Service charges (i.e., both Domestic and International) from WilTel for the
same period, (ii) two (2) times Customer's second $300,000 in recurring
monthly Private Line Interexchange Service charges (i.e., both Domestic and
International) from WilTel for the same period, and (iii) Customer's
recurring monthly Private Line Interexchange Service charges (i.e., both
Domestic and International) from WilTel for the same period in excess of
$600,000. Monthly Revenue shall exclude any pro rata charges, access
charges, ancillary or special feature charges, such as, Authorization codes
or CDR Tapes, or any other charges other than those identified by the
relevant WilTel invoice as Monthly Recurring Interexchange Service Charges.
(C) The parties acknowledge that the rates described in Section 5 below
are stated net of all discounts and will be charged by WilTel as stated.
In determining if Customer has satisfied its applicable Commitments as
described in this Section 2 (i.e., on a gross basis), the following
procedures shall apply:
(i) Customer's SWITCHED ACCESS Service and DEDICATED ACCESS
Service (1+ and 800), interstate traffic only will be multiplied
(i.e., "grossed up") by a factor of 1.2.
(ii) Customer's TERMINATION Service and 800 ORIGINATION
Service, interstate traffic only will be multiplied by a factor
of 1.15.
(iii) Customer's SWITCHED ACCESS Service, DEDICATED ACCESS
Service, TERMINATION Service and 800 ORIGINATION Service,
intrastate traffic only will be multiplied by a factor of 1.05.
(iv) All of Customer's other traffic, including without
limitation, Customer's International Service and Service to and
from Hawaii, Alaska, Puerto Rico, the United States Virgin
Islands, Canada and Mexico, will be multiplied by a factor of
1.00.
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3. DEFICIENCY CHARGE:
(A) In the event Customer does not maintain Customer's First Commitment,
Customer's Second Commitment or Customer's Contract Commitment, whichever
is applicable, in any month during the First Commitment Period, the Second
Commitment Period or the Contract Commitment Period, whichever is
applicable, then for those month(s) only, Customer will pay WilTel the
difference between Customer's applicable Minimum Commitment and Customer's
actual Monthly Revenue as described in Subsection 2(B) above the (THE
"MONTHLY DEFICIENCY CHARGE"). The Monthly Deficiency Charge will be due at
the same time payment is due for Service provided to Customer.
(B) In the event Customer does not maintain Customer's Contract Commitment
during the Service Term, Customer will pay WilTel the difference between
Customer's Contract Commitment and Customer's actual cumulative Monthly
Revenue obtained under this Agreement during the Service Term (THE
"CONTRACT DEFICIENCY CHARGE"). The Contract Deficiency Charge, if any,
will be due immediately (i) upon the scheduled expiration of this
Agreement, (ii) if Customer cancels all circuits comprising all Service
Interconnections as described in the Service Schedule, or (iii) if WilTel
terminates this Agreement based on Customer's default.
4. OTHER AGREEMENTS: In consideration of the rates and discounts offered
hereunder to Customer, Customer acknowledges and agrees that this Agreement
and the Services described herein may not be combined with any other
products or services offered by WilTel, WilTel's parent company, or
WilTel's affiliates. Therefore, Customer acknowledges and agrees that as
of the Effective Date of this Agreement, (i) all switched
telecommunications services ("EXISTING SERVICES") offered by WilTel
(formerly WilTel, Inc.), WilTel's parent company, WorldCom, Inc. (formerly
LDDS Communications, Inc.) or any of WilTel's affiliates, including without
limitation, IDB WorldCom Services, Inc. (hereinafter referred to as the
"WILTEL GROUP") which are currently being provided Customer (which for
purposes of this Section 6 will include Customer's parent company,
Customer's subsidiaries and any other entities under common control with
Customer; hereinafter referred to as the "CUSTOMER GROUP") pursuant to
existing service agreements ("EXISTING AGREEMENTS") will be canceled and
not longer in force or effect except for charges or credits due for
Existing Services rendered as of the Effective Date of this Agreement, and
(ii) all Existing Service (excluding rates and discounts) provided a member
of the Customer Group by a member of the WilTel Group will be provisioned
under the terms and conditions of this Agreement. The parties further
agree that the rates shown on the Pricing Exhibit dated concurrently
herewith and the discounts described herein shall become effective for all
Existing Service on or before the first day of the third full month
following the Effective Date. Simultaneous with the execution of this
Agreement, if applicable, Customer shall cause all members of the Customer
Group to agree to the cancellation of such Existing Agreements and the
provision of Existing Services under the terms and conditions of this
Agreement and Customer agrees to provide WilTel with reasonable
documentation evidencing such agreement.
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5. RATES: In consideration of Customer's Commitments as described in
Section 3 above, notwithstanding anything to the contrary contained in this
Agreement or the Pricing Exhibit attached hereto, commencing July 1, 1996
(i.e., August 1, 1996 invoice), Customer's rates for Services provided
hereunder will be the rates set forth on Attachment "A" hereto which rates
are not subject to any further discount. Notwithstanding anything to the
contrary contained in Subsection 5(D) of the TSA, WilTel may modify the
International rates set forth on Attachment "A" upon not less than thirty
(30) days prior written notice to Customer, which notice shall state the
effective date for the charge modification. In the event WilTel modifies
such International rates, WilTel and Customer agree to negotiate in good
faith concerning Customer's applicable commitments described in Section 2
above. In the event WilTel modifies its WilMax rates or programs (i.e.,
"postalized" rates for Services provided), which rates or programs are
generally available to its other carrier customers, WilTel agrees to
negotiate in good faith with Customer concerning any modification to
Customer's rates hereunder.
6. PAYMENT: The parties agree to substitute Subsection 5(A) of the TSA to
read in its entirety as follows:
(A) PAYMENT WilTel billings for Service are made on a monthly basis (or
such other basis as may be mutually agreed to by the parties) following
Start of Service. Subject to Subsection 5(D) below, Service shall be
billed at the rates set forth in the PET dated effective as of February 1,
1996, and Service Requests, as the case may be. Customer agrees to wire
transfer to WilTel all amounts owed within fifty-five (55) days of the
invoice date set forth on each WilTel invoice to Customer ("DUE DATE"). If
payment is not received by WilTel on or before the Due Date, WilTel agrees
to give Customer three (3) business days notice and opportunity to cure
such nonpayment; unless such nonpayment is due solely to Services obtained
by NTC hereunder for the sole use and benefit of AmeriVision
Communications, Inc. ("AmeriVision"), in which case NTC may either (i) pay
the amount attributable to AmeriVision, or (ii) provide WilTel with
adequate assurance of the amount attributable to AmeriVision which
assurance may be in the form of a fully secured promissory note acceptable
to WilTel with a term not to exceed sixty (60) days or other means
reasonably acceptable to WilTel. If payment is not received in full from
WilTel within such three-day cure period or WilTel has not received payment
or adequate assurance of payment from NTC with respect to Services obtained
for AmeriVision, notwithstanding anything to the contrary contained in the
TSA (including without limitation, Sections 7 & 8), WilTel may immediately
terminate this Agreement which termination shall not relieve Customer for
payment of applicable cancellation charges as described in Section 2 above.
Further, if such invoice is not paid in full on or before the Due Date,
Customer shall also pay a late fee in the amount of the lesser of one and
one-half percent (1 1/2%) of the unpaid balance of the Service charges per
month or the maximum lawful rate under applicable state law.
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7. SECURITY INTERESTS:
(A) In order to secure any payment that may be due WilTel under this
Agreement, Customer hereby agrees to execute (i) a security agreement
(a form of which is attached hereto as Attachment "2" and incorporated
herein by reference) granting WilTel an irrevocable security interest
(the "CUSTOMER SECURITY INTEREST") in Customer's customer base,
customer lists and contract rights associated with the provision of
service to such customer base (excluding Customer's accounts
receivable associated with such customer base), and (ii) a Uniform
Commercial Code-Financing Statement-Form UCC-1 in favor of WilTel in
order to perfect the Security Interest. Further, Customer agrees to
execute any other documents reasonably required by WilTel that are
necessary to perfect the Customer Security Interest.
(B) The parties acknowledge that certain of the Services obtained by
Customer hereunder are for the direct use and benefit of AmeriVision
Communications, Inc. ("AMERIVISION"). AmeriVision has agreed to
execute a Payment Agreement between AmeriVision, Customer and WilTel
(a form of which is attached hereto as Attachment "3") whereby
AmeriVision will make direct payment to WilTel and guarantee payment
of all amounts owed WilTel for Services provided to Customer for the
benefit and use of AmeriVision. Further, in order to secure any
payment that may be due WilTel under the Payment Agreement, as a
condition to this Agreement, WilTel shall receive from AmeriVision (i)
a security agreement (a form of which is attached hereto as Attachment
"4" and incorporated herein by reference) granting WilTel an
irrevocable security interest (the "AMERIVISION SECURITY INTEREST") in
AmeriVision's customer base, customer lists and contract rights
associated with the provision of service to such customer base, and
(ii) a Uniform Commercial Code-Financing Statement-Form UCC-1 in favor
of WilTel in order to perfect the Security Interest. Further,
AmeriVision shall agree to execute any other documents reasonably
required by WilTel that are necessary to perfect the AmeriVision
Security Interest. Finally, Customer agrees that AmeriVision may pay
WilTel directly (without any further notice or consent required from
Customer) for Services provided Customer for the use and benefit of
AmeriVision.
8. CREDIT: In consideration of Customer's Commitments described in
Section 2 above, WilTel agrees to provide Customer a credit, in an
amount equal to and to be applied in accordance with, the terms set
forth in that certain letter from WilTel to Customer dated
concurrently herewith.
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IN WITNESS WHEREOF, the parties have executed these Program
Enrollment Terms on the date first written above.
WORLDCOM NETWORK SERVICES, INC. NATIONAL TELEPHONE &
D/B/A WILTEL COMMUNICATIONS, INC.
BY: /s/ R.A. Wilkins BY: /s/ Ed Jacobs
----------------------------- -------------------------------
(SIGNATURE) (SIGNATURE)
R.A. Wilkins Ed Jacobs
----------------------------- -------------------------------
(PRINT NAME) (PRINT NAME)
President President
----------------------------- -------------------------------
(TITLE) (TITLE)
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"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."
"THIS MATERIAL HAS BEEN DELETED
PURSUANT TO A REQUEST FOR CONFI-
DENTIAL TREATMENT PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933,
AS AMENDED."