Exhibit 10.28
KAWA Consultores, S.A. de C.V.
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CONTRACT AGREEMENT FOR TELECOMMUNICATIONS
CONSULTING SERVICES
This contract for Telecommunications Consulting Services is made between KAWA
Consultores of Mexico, D.F. (hereinafter referred to as KAWA) and American
Telesource Inc. (hereinafter referred to as ATSI) of San Antonio, Texas.
1) Background.
1.1) KAWA Consultores is a corporation dully incorporated according to the
laws of Mexico as established in Notary Public Statement N. 9318
dated May 8th, 1996. KAWA wishes to provide specialized consulting
services to ATSI.
1.2) American Telesource Inc. (ATSI) is also a corporation
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ATSI wishes to receive specialized consulting services provided by
KAWA.
2) Articles.
Article ONE.- Starting date.
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This contract shall become effective on January 1st, 1998 and remain valid for
twelve consecutive months. It can be extended for additional periods by written
notification from ATSI to KAWA.
Article TWO.- Focus and purpose of consulting activity.
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Assist ATSI in developing and implementing the necessary relations in the
Central and Southamerican regions as a business relations base to expand ATSI's
Network coverage to the Americas.
Article THREE.- Description of the Service.
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The consulting services to be provided by KAWA will focus on corporate relations
and business development and these activities will be defined according to the
following criteria :
. Collaborating in the development of ATSI's strategy in Mexico and Latin
America.
. Developing high level business relationships and assisting on finding
"country or regional" partners to expand the ATSI Network in Central and
Southamerica.
. Exploring new business segments and opportunities in Central and
Southamerica.
. Lobbying the regulatory authorities in Central and Southamerica for the
necessary support.
. Identifying and evaluating acquisition and or alliance opportunities in the
Central - american region.
Article FOUR. - Obligations.
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By KAWA:
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1.1) Pursue negotiations and reach corporate agreements and contracts
with regional or country associates to establish and implement
partnership and operative interconnection throughout Central and
Southamerica.
1.2) KAWA shall make the best efforts to assure that the "country
partner" in every case will be the most adequate and reliable option
in the country and will pursue the relationship through to its
completion.
1.3) KAWA shall dedicate an average of 90 hours per month of effective
activity in order to expedite the deployment of the Network backbone
for the Americas.
1.4) KAWA shall make intensive follow up and negotiations with
representatives of Telecomm and of the corresponding officials in
the Telecommunications Authorities in Latin American countries.
1.5) KAWA shall dedicate travel time as required to pursue negotiations
with potential partners and Telecomm officials in the Latin -
american countries. For this purpose a period of 5 travel days per
month shall be made available to ATSI as a minimum.
1.6) KAWA shall participate in the successful implementation and follow
up of partnerships in each country in order to develop the market as
required.
By ATSI:
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2.1) ATSI shall continue enhancing corporate support as required in order
to follow up on the successful implementation of operations with
each country or region including negotiations for equipment
provisioning and Interconnection Agreements with "Regional or
country" partners.
2.2) ATSI shall selectively provide assistance with a corporate
representative when visiting countries or seeking country partners
when this is required. This will include facilitating relationships
with existing or potential partners and regulatory authorities with
whom ATSI already has contacts.
2.3) ATSI shall increase local support with the US Carriers and customers
in order to successfully implement products and services included in
the Interconnection Contracts and Agreements.
Article FIVE. - Compensation.
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The basis for compensation is as follows :
a) 90 hours per month at $100 DLLs. or 9,000 DLLs. per month paid in cash.
b) ATSI agrees to share 50 % of the corporate office expense including :
. Maintenance of the spaces.
. Conservation of furniture and office equipment.
. Assistant and office boy salaries.
. Light and telecommunications and other operative expenses.
These expenses have been estimated at $ 1,000 DLLs/month for the year of 1998
which shall be added to the compensation stated in point a) above.
c) Travel and entertainment expenses. ATSI agrees to reimburse expenses
according to the expense reports provided by KAWA.
Article SIX. - Form of payment.
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The compensation shall be invoiced and paid in the US according to the
instructions provided by KAWA.
Article SEVEN. -Taxes and other expenses.
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KAWA will be solely responsible for the payment of its taxes or other operating
expenses related with the consulting services except those specifically agreed
upon according with article THREE above.
Article EIGHT. - Termination.
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This agreement could be terminated if the following occur:
a) If at the end of twelve months ATSI does not wish to continue receiving the
services of KAWA.
b) Non compliance of the parties with the articles of this contract.
c) Non compliance by ATSI of the committed compensation as per article THREE
above.
d) Regardless of the reason for the termination of this agreement KAWA will not
reimburse any amount to ATSI.
e) In case of anticipated termination prior to January 1st, 1999, ATSI agrees
to pay an extraordinary compensation equivalent to 1 month of services
according to article FIVE above.
f) In case of anticipated termination caused by KAWA, KAWA agrees to notify
of its intention with a minimum anticipation of 60 days.
Article NINE. - Contingencies.
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Extraordinary events beyond the control of ATSI such as fire, explosion, major
earthquake, vandalism or similar shall not be considered as anticipated
termination. The affected party shall notify the other as soon as possible. In
this case non of the parties shall be liable to any penalty whatsoever.
Article TEN. - Confidentiality and non disclosure.
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Both parties agree to treat all information and data regarding the consulting
services with full confidentiality and therefor agree to disclosure only by
written consent of the other party.
Article ELEVEN. - Jurisdiction.
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For interpretation and arbitration of this agreement both parties agree to
submit to the laws and jurisdiction of Mexico City.
This agreement is signed in Mexico City on the 1st of January of 1998.
For ATSI For KAWA
Mr. Arturo Smith Mr. Carlos Kauachi
Chairman & CEO President
/s/ Arturo Smith /s/ Carlos Kauachi
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