EXHIBIT 10.3
GENERAL TERMS AND CONDITIONS FOR CARRIER AGREEMENTS
[LOGO OF CABLE AND WIRELESS, INC. APPEARS HERE]
1. Service to be Provided by CWI: CWI will provide the following long-distance
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services; Domestic Outbound, Domestic Inbound, International Outbound and
Directory Assistance (hereinafter collectively, "Services").
The Carrier will access CWIs network, as soon as is reasonably possible, via
dedicated T-1 lines ("Access Lines") ordered from local exchange carriers or
alternate access carriers (collectively "Local Carriers") and paid for by the
Carrier. If the Carrier orders an Access Line from a Local Carrier, the
Carrier will pay the Local Carrier directly for the Access Line. If the
Carrier requests CWI to order the Access Line and if permitted by the Local
Carrier, CWI will order the Access Line on behalf of the Carrier and will
have the Local Carrier bill the Carrier directly for the Access Line.
2. Term and Termination: The initial term of this Agreement will end the number
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of full CWI monthly billing periods ("Month(s)") after service is initiated
as set forth in the "Initial Term" portion of the Order Information section
of this Agreement ("Initial Term"). Either party may terminate this Agreement
at the end of the Initial Term, by providing thirty (30) days' prior written
notice. If no such notice is given, this Agreement will continue after the
Initial Term, until terminated by either party providing the other with
thirty (30) days' prior written notice. The term "Term" as used herein will
mean the Initial Term plus any subsequent period of time during which this
Agreement continues beyond the end of the Initial Term. If CWI shall have
undertaken efforts to provide Services prior to the date of full execution of
this Agreement, the provisions of this Agreement shall apply retroactively
with respect to such efforts and such Services.
At any time prior to the end of the Initial Term, the Carrier may, for its
convenience, terminate this Agreement in its entirety by providing CWI with
thirty (30) days' prior written notice. In such event, in addition to paying
for all charges incurred through the date service is discontinued, including
any applicable shortfall charges, the Carrier will pay (as a contract
discontinuance fee and not as a penalty) an amount equal to the sum of the
minimum monthly payment obligations for each of the remaining Months in the
Initial Term.
If CWI has not received any traffic from Carrier hereunder within sixty (60)
days after full execution of this Agreement, CWI shall have the right to
terminate this Agreement upon written notice to Carrier.
If the Carrier fails to do any of the following when due and then does not
cure such failure within two (2) days after receiving notice thereof from
CWI, CWI may, in addition to any other remedies available to it and without
any further written notice to the Carrier, immediately terminate this
Agreement in its entirety and discontinue providing Services: (i) make a
payment in full; (ii) provide any required security deposit amount; or (iii)
provide any required financial report. In addition to any other remedies
available to it, CWI may immediately terminate this Agreement in its entirety
if Carrier fails to comply with the terms of any license accompanying any
software relating to E-BIS(R) reporting options.
3. Rates and Taxes: The Carrier will pay the monthly, non-recurring and usage
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charges set forth in this Agreement. Each call will be billed in 6-second
increments and will be subject to a 30-second minimum charge except that
domestic outbound calls (both interstate and intrastate) will be subject to a
6-second minimum charge. The Carrier will pay any applicable federal, state,
or local taxes, surcharges, or similar fees for the Services.
CWI may, upon fifteen (15) days written notice to Carrier, increase any of
the rates, fees and other charges, including any assessment and amount of any
surcharges for a particular Service. If CWI increases any of the
international rates set forth in this Agreement and Carrier subsequently
discontinues routing traffic to CWI for a country for which such increased
rate applies, then providing traffic to such country would have contributed
to the Carrier's minimum monthly payment obligations set forth in the Order
Information section of the Agreement, for so long as Carrier discontinues
routing traffic to such country to CWI, the amount of such minimum monthly
payment obligations will be reduced by a percentage that is equivalent to the
average total charges incurred by the Carrier for calls placed to that
country in each of the three (3) Months immediately preceding the date the
Carrier discontinues routing such traffic to CWI, divided by the average of
the Carrier's total charges for Services in each such Month.
Any software which CWI supplies for use in connection with the E-BIS(R)
reporting options shall be provided subject to the software license agreement
that accompanies such software. Carrier agrees to comply with all terms and
conditions set forth in such software license agreement. Title to, all rights
to and all interest in, such software shall at all times remain with CWI or
its third-party suppliers.
4. Payment: CWI will provide monthly invoices covering CWI-designated periods
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which will be due and payable within the number of days after the invoice
date as set forth in the "Payment Period" section of the Order Information
section of this Agreement. The "invoice date" for a particular monthly
billing period will be the day immediately following the last day of such
monthly billing period. For example, if the monthly billing period runs from
January 24th to February 23rd, the invoice date for such billing period will
be February 24th, and, if the "Payment Period" set forth in the Order
Information section of the Agreement is "10 days after the invoice date",
then payment for such monthly billing period is due no later than the tenth
(10th) day after February 24th.
If the Order Information section of this Agreement indicates that estimated
payments are required, CWI will notify the Carrier on the last day of the
"Estimated Usage Period," or if such day is not a business day, on the next
business day, as to CWIs estimate of the charges incurred by the Carrier
during such period. The Carrier will pay CWI such estimated amount
("Estimated Payment") no later than the "Estimated Payment Due Date". At the
end of a Month, CWI will provide an invoice for the usage charges actually
incurred that Month less that Month's Estimated Payment; provided, however,
that if a minimum monthly payment obligation applies for that Month and such
minimum has not been met, then the invoice amount will be that Month's
minimum payment obligation less that Month's Estimated Payment. The Carrier
will pay the invoiced amount within the Payment Period.
A late payment charge will be applied on balances that remain unpaid after
the Payment Period in the amount of the lesser of (a) 1 1/2% per month of the
amount of the late payment starting from the day following the Payment
Period, or (b) maximum amount allowed under applicable law. The Carrier must
pay all invoices when due; any questions which the Carrier may have
concerning an invoice must be brought to CWI's attention within forty-five
(45) days of the invoice date. The Carrier shall reimburse CWI for any
expenses, including, without limitation, reasonable attorney's fees, CWI may
incur in collecting amounts due hereunder.
If so indicated in the Order Information section of this Agreement, all
payments by the Carrier will be made via wire transfer (in immediately
available funds) to Mellon Bank, 3 Mellon Bank Center, Room 153-2718,
Pittsburgh, PA 15259-0001, ABA #0430-00261/Account #1705643. __Or
5. Financial Reports: If the Order Information section of this Agreement
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indicates that financial reports are required, within thirty (30) days after
the end of each calendar quarter, the Carrier will provide CWI with a written
report updating the Carrier's financial status ("Quarterly Report"), and
within ninety (90) days after the end of each calendar year, the carrier will
provide CWI with an audited annual report. Each Quarterly Report will
contain, as a minimum, an updated balance sheet and income statement. The
Carrier represents and warrants that no Quarterly Report will contain any
material misstatement or omission.
6. Security Deposits: If the Order Information section of this Agreement
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indicates that security deposits are required, each required security deposit
will be either in cash (paid by check or via wire transfer) or an irrevocable
stand-by letter of credit in a form and from a financial institution
reasonably acceptable to CWI. The "Initial Security Deposit" amount will be
provided prior to the initiation of service. Thereafter, if requested in
writing by CWI, the Carrier will add additional amounts to the Initial
Security Deposit such that the total amount of the security deposit being
held by CWI at all times is at least equal to the "Continuing Security
Deposit". The Carrier will provide any such required additional amounts
within five (5) business days after receiving CWI's written request. CWI will
refund or release, as applicable, any security deposit it is holding (plus,
if the security deposit is in the form of cash, accrued interest at the
applicable rate set by regulation of the state in which CWI invoices the
Carrier, or if no such rate is set by regulation, CWI's then-prevailing
interest rate for security deposit refunds) if the following conditions are
met by the Carrier: (i) for the entire "Deposit Release Period", the Carrier
pays CWI in full when each payment is due; and (ii) CWI determines that the
Carrier's Quarterly Reports covering the Deposit Release Period indicate that
the Carrier's financial condition has had no materially adverse change as
compared to the equivalent period of time immediately prior to the start of
the Deposit Release Period. If CWI does not refund or release the security
deposit during the Term as set forth above, the security deposit will be
refunded or released, as applicable, at the end of the Term. If, at any time
during the term of the Agreement, CWI determines that there has been a
materially adverse change in the Carrier's financial condition as compared
with the equivalent period of time immediately prior to the Effective Date,
CWI may require Carrier to provide a security deposit or an additional
security deposit in an amount to be determined by CWI. The Carrier shall
provide any such required amounts within five (5) business days after
receiving CWI's written request therefor.
7. Minimum Payment Obligations: If the total amount of usage charges incurred by
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the Carrier for international service in any Month is less than the amount
of the then-applicable minimum monthly payment obligation set forth in the
Order Information section of this Agreement, then in addition to paying for
its actual usage that Month, the Carrier will pay (as an underutilization fee
and not as a penalty) a shortfall charge equal to the difference between (i)
the actual usage charges incurred for international service that Month, and
(ii) the amount of the then-applicable minimum monthly payment obligation. If
this Agreement remains in effect after the Initial Term, the minimum monthly
payment obligation for each subsequent Month, shall be equal to the amount of
the minimum monthly payment obligation for the last Month of the Initial
Term.
8. Additional Terms: This is a carrier-to-carrier agreement subject to (S)211 of
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the Communications Act of 1934, as amended. The Carrier is responsible for
and shall comply with any and all legal and regulatory requirements with
respect to the Carrier's use and resale of the Services, including those of
the Federal Communications Commission and state public utility commissions.
The Services are governed by this Agreement and all Carrier obligations and
CWI rights set forth in the "General Rules and Regulations" section of CWI's
interstate tariff, as may be amended by CWI in accordance with applicable
laws and regulations, or if such tariff is withdrawn by CWI, as the tariff
was in effect as of the date of withdrawal. The Carrier shall defend,
indemnify and hold CWI harmless from and against all claims, demands,
actions, causes of action, judgments, costs and reasonable attorneys' fees
and expenses of any kind arising from or related to any use of the Service or
otherwise arising under this Agreement. In no event shall CWI be liable for
any loss of profits, or for any indirect, incidental, special, exemplary or
consequential damages.
This Agreement is effective as of the date of signature of the last party to
sign and it is governed by and subject to the laws and the jurisdiction of
the courts of the Commonwealth of Virginia. The Carrier shall not disclose
any of the terms of this Agreement. This Agreement is the sole and exclusive
understanding between parties with respect to the Services. CWI and Carrier
expressly agree that this Agreement shall not give rise to any third party
being entitled to any right whatsoever.
CARRIER'S REPRESENTATIVE INITIALS /S/ INITIALS ILLEGIBLE DATE
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CARRIER AGREEMENT
[LOGO OF CABLE & WIRELESS, INC. APPEARS HERE]
This Carrier Agreement ("Agreement") is entered into by and between Cable &
Wireless, Inc. ("CWI") and its carrier customer signing below ("Carrier"). The
General Terms and Conditions for Carrier Agreements CAR-96B (12/96) attached
hereto are part of this Agreement.
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ORDER INFORMATION
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1. Initial Term: 13 Months
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2. Rates: (per minute except for Directory Assistance, T-1 Port Charges and Reporting Options)
Domestic Inbound, Domestic Outbound and International Outbound:
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See attached schedule entitled Communications Systems International, Inc. and dated 3/4/97
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Intrastate rates are applicable within: Colorado
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Directory Assistance: CWIs then-standard per-call rates
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T-1 Port Charges: Monthly Charge per T-1 Port............................ $ 70.00
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Non-Recurring Installation Charge per T-1 Port......... $ 150.00
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Initial Quantity of T-1 Ports.......................... 2
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Reporting Options: (insert "X" in box for the required option)
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[_] Second copy of call detail: Monthly Charge $ n/a
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E-BIS(R) Options:
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[_] On-line [_] Magnetic Tape [_] CD-ROM
[_] Floppy Disk (3.5") [_] Floppy Disk (5.25")
Charges for selected E-BIS(R) option: Set-up........................ $ n/a
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Monthly....................... $ n/a
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3. Payments/Security Deposits (insert "Yes" or "No" where applicable)
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Payment Period: 10
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Payment by Wire Transfer Required yes
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Financial Reports Required....... yes
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Security Deposits Required....... yes
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Initial Security Deposit Amount:... $ 50,000
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Continuing Security Deposit Amount:.. one times the amount of usage charges incurred over any six week period
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Deposit Release Period:.............. 12 Months
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Estimated Payments Required:........... n/a
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Estimated Usage Period:.........first n/a days of each Month
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Estimated Payment Due Date........... n/a business days after CWI notifies the Customer of the Estimated Payment Amount
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4. Minimum Monthly Payment Obligations:
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Month after Service Initiation Minimum Amount each Month* Month after Service Initiation Minimum Amount each Month*
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1 $ 0.00 2 $ 10,000
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3 $ 15,000 4 $ 20,000
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5-25 $ 25,000 $
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$ $
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* Minimums apply to international usage only; domestic usage shall not contribute towards meeting minimum monthly
payments obligations
COMMUNICATIONS SYSTEMS
---------------------- CABLE & WIRELESS, INC.
INTERNATIONAL, INC. ----------------------
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Signature: Signature:
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Printed Name: Printed Name: Elaine M. Beiseigel
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Title: Title: Contract Manager
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Date: Date:
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SERVICE QUALITY ADDENDUM
TO CARRIER AGREEMENT
[LOGO OF CABLE & WIRELESS, INC. APPEARS HERE]
Cable & Wireless, Inc. ("CWI") and its carrier customer signing this Service
Quality Addendum ("Carrier") agree that their Carrier Agreement ("Agreement") is
modified as follows:
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If Carrier is not satisfied with the quality of calls placed over CWI's network
during the first thirty (30) days after service is initiated ("INITIAL MONTH"),
Carrier may so notify CWI in writing no later than ten (10) days after the end
of such Initial Month. Carrier may, upon prior written notice to CWI, terminate
the Agreement and all services provided thereunder if CWI does not correct the
problem(s) with call quality to Carrier's satisfaction within thirty (30) days
of CWI's receipt of the initial notice. In the event of such termination, the
following shall apply: (i) Carrier shall pay CWI for all charges incurred up
through the date service is discontinued; (ii) the contract discontinuance fee
shall be waived; and (iii) neither party shall have any liability or obligation
to one another resulting from CWI not correcting the service quality or
resulting from such a termination.
Communications Systems Cable & Wireless, Inc.
International, Inc.
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Signature: /s/ R. A. Spade Signature:
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Printed Name: R. A. Spade Printed Name: Elaine M. Beiseigel
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Title: CEO Title: Contract Manager
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Date: 4-10-97 Date:
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SPECIAL TERMS AND CONDITIONS ADDENDUM
TO CARRIER AGREEMENT
[LOGO OF CABLE & WIRELESS, INC. APPEARS HERE]
Cable & Wireless, Inc. ("CWI") and its Carrier customer signing this Special
Terms and Conditions Addendum ("Carrier") agree that the Carrier Agreement
("Agreement") is modified as set forth below. Any capitalized terms not defined
herein shall have the meaning defined in the General Terms and Conditions for
Carrier Agreements.
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1. Payment
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Reference to "forty-five (45) days" in the third paragraph of Section 4
(Payment) of the General Terms and Conditions for Carrier Agreements is
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deleted and replaced by "sixty (60) days".
2. Confidentiality
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Each party may, either orally, in written form, or otherwise, disclose to the
other party or the other party may otherwise obtain the disclosing party's
confidential information ("Confidential Information") in connection with this
Agreement. The terms and conditions of this Agreement are Confidential
Information except that CWI shall have the right to disclose the terms and
conditions of this Agreement to its affiliates. In order to be Confidential
Information, any information disclosed in tangible form must be conspicuously
marked as being the disclosing party's confidential information, and any
other information must be clearly indicated as being confidential at the time
of disclosure and reduced to writing and sent to the receiving party within
ten (10) days of disclosure. Regardless of when disclosed or obtained,
Confidential Information shall only be used by the receiving party in its
performance under this Agreement, and it shall not be disclosed by the
receiving party except to those employees, affiliates, advisors, and
consultants who have a need to know and an obligation to treat Confidential
Information in accordance with this clause. If any of the following apply to
any information, such information shall not be considered as Confidential
Information: (i) it is or becomes available to the public through no wrongful
act of the receiving party; (ii) it is already in the possession of the
receiving party and not subject to any agreement of confidence between the
parties; (iii) it is received from a third party without any restriction
known to the receiving party for the benefit of the disclosing party; or (iv)
it is independently developed by the receiving party. The receiving party may
disclose the disclosing party's Confidential Information pursuant to a
requirement of a duly empowered government agency or a court of competent
jurisdiction after due notice and an adequate opportunity to intervene is
given to the disclosing party unless legally prohibited. Upon termination or
expiration of this Agreement, the receiving party shall, at the disclosing
party's written direction, either return to the disclosing party or destroy
all of the disclosing party's Confidential Information and so certify in
writing. The obligations of this provision shall survive for three (3) years
after any termination or expiration of this Agreement.
3. Additional Charges
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It is acknowledged that Carrier shall access CWI's network at CWI's Denver
POP. In addition to all other charges, Carrier shall pay CWI $800.00 per
month for backhaul from such POP to a CWI switch site designated by CWI
("BACKHAUL CHARGE").
Notwithstanding the provisions of the second paragraph of Section 2 (Term and
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Termination) of the General Terms and Conditions for Carrier Agreements to
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the contrary, in the event that Carrier terminates this Agreement prior to
the end of the Initial Term, as provided for therein, in addition to paying
for all charges incurred through the date service is discontinued including
any applicable shortfall charges, the Carrier will pay (as a contract
discontinuance fee and not as a penalty) an amount equal to (i) the sum of
the minimum monthly payment obligations for each of the remaining Months in
the Initial Term, plus (ii) the sum of the Backhaul Charges for each of the
remaining Months in the Initial Term.
Communications Systems International, Inc. Cable & Wireless, Inc.
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Signature: /s/ R. A. Spade Signature:
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Printed Name: R. A. Spade Printed Name:
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Title: CEO Title:
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Date: 4-10-97 Date:
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