EXHIBIT 10.9
AMENDMENT NO. 2 TO
TELECOMMUNICATIONS SERVICE AGREEMENT
This Amendment No. 2 to Telecommunications Service Agreement (this
"Agreement") is made as of August 23, 1996 (the "Amendment Effective Date") by
and between IXC Long Distance, Inc., a Delaware corporation ("Supplier"), and
Computer Telephone Corp., a Massachusetts corporation ("Customer").
Background
This Amendment is made with reference to the following facts:
A. Customer and Supplier are parties to that certain
Telecommunications Service Agreement dated as of June 23, 1995 (the
"Agreement").
B. The parties desire to amend the Agreement pursuant to the terms
set forth below.
Terms of Amendment
Accordingly, in consideration of the mutual promises set forth below,
the parties hereto hereby agreed as follows:
1. The following is hereby added to the Agreement as Paragraph C of
Section 2. Customer Responsibilities and shall read in its entirety as
follows:
C. Customer shall use Services from Supplier to service ANI's
representing at least seventy-five percent (75%) of its new business each
month (measured in minutes of traffic) and shall keep such ANI's on Supplier's
system until one (1) year after the Amendment Effective Date. An officer of
Customer shall deliver to Supplier each quarter an officer's certificate
certifying that Customer has satisfied the requirement of the preceding
sentence. Customer shall allow Supplier, upon request, access to such of its
books and records as necessary to satisfy Supplier as to the compliance with
this paragraph.
2. Section 8. Term of the Agreement is hereby amended to read in its
entirety as follows:
This Agreement is effective as of the Amendment Effective Date and
shall remain in force and effect until for a period of three (3) years unless
earlier terminated pursuant to its terms. This Agreement shall be
automatically extended at the expiration of the initial and any subsequent
term for an additional term of one year unless: (i) earlier terminated; or
(ii) written notice is given by any party at least ninety (90) days before
such expiration that such party does not consent to such extension.
3. Paragraph (B) of Section 9 Charges, Payment and Security Interest
of the Agreement is hereby amended to read in its entirety as follows:
B. Volume Rates. Subject to the terms and conditions herein,
Customer shall pay for any Services hereunder at the rates reflected in
Exhibits A-1 through A-7. Customer shall be billed only for actual usage of
minutes and shall not be required to meet a minimum monthly commitment level.
Notwithstanding the foregoing, Customer shall be obligated to give to Supplier
a percentage of its new business as set forth in Section 2, Paragraph C,
herein.
4. The following is hereby added to the Agreement as Paragraph H of
Section 9. Charges, Payment and Security Interest and shall read in its
entirety as follows:
G. Debit Cards. Supplier shall use its best efforts to
provision debit cards (each, a "Debit Card," and collectively, the "Debit
Cards") to Customer at the rates set forth in Exhibits A-2, A-4, A-5 and A-7
for distribution by Customer to its End-Users. Customer understands and
agrees that each End-User may purchase ("Recharge") additional minutes to add
to its Debit Card by charging such purchase to a credit card of its choice
which amount, less any applicable service or financing fees, shall
automatically be payable to Supplier (each, an "IXC Received Amount").
Supplier shall credit Customer with 100% of each IXC Received Amount during
the second month following the month in which Supplier actually receives such
IXC Received Amount.
5. The following is hereby added to the Agreement as Section 23.
Termination Service and shall read in its entirety as follows:
23. Termination Service.
A. Service Interconnection. In order to utilize Termination
Service, one or more full time dedicated connection between Customer's network
and the Supplier network at one or more Supplier designated locations
("Supplier HUB") must be established ("Service Interconnection(s)"). Each
Service interconnection shall be comprised of one or more DS- 1 circuit.
B. Customer Responsibilities. Customer shall be solely
responsible for establishing and maintaining each Service Interconnection
subject to Supplier's approval in accordance with the terms of this Agreement.
If a Service Interconnection is proposed to be made using a LEC, Supplier may
require Customer to utilize Supplier's entrance facilities or local service
arrangement ("LSA") with the relevant LEC, and Customer shall be subject to a
non-discriminatory charge therefor from Supplier. The monthly recurring
charge relevant to Customer's use of LSA capacity shall be subject to upward
adjustment by Supplier from time to time. Such adjustment, if any, shall not
exceed the rate that otherwise would be charged for the equivalent service
from the LEC pursuant to its published rates for such service.
C. Cancellation. Once ordered, and unless otherwise provided
for in this Agreement, Service Interconnections and the circuits comprising
each Service Interconnection may only be canceled by Customer upon at least
thirty (30) days prior written notice to Supplier, or if longer, the length of
the cancellation period of the underlying carrier.
D. Certification. Customer shall provide Supplier with a
written certification (the "Certification") of the percentage of interstate
(including international) and intrastate minutes of use relevant to the
minutes of traffic to be terminated in the same state in which the Supplier
HUB is located to which the Service Interconnection is made. This
Certification is attached as Exhibit H and shall be provided by Customer prior
to commencement of Service for any Service Interconnection and may be modified
from time to time by Customer and subject to recertification upon the request
of Supplier which requests shall not be made unilaterally by Supplier more
than once each calendar quarter. Any such modification(s) or Certification(s)
shall be effective as of the first day of any calendar month and following at
least forty-five (45) days notice from Customer. In the event Customer fails
to make such Certification, the relevant minutes of use will be deemed to be
subject to the Intrastate Rates provided for in the pricing exhibit. In the
event Supplier or any other third party requires an audit of Supplier's
interstate/intrastate minutes of traffic, Customer agrees to cooperate in such
audit at its expense and make its call detail records, billing systems and
other necessary information reasonable available to Supplier or any third
party solely for the purpose of verifying Customer's interstate/intrastate
minutes of traffic. Customer agrees to indemnify Supplier for any liability
Supplier incurs in the event Customer's Certification is different than that
determined by the audit.
6. Exhibit A-7 of the Agreement, IXC Standard Interstate Switched and
Dedicated 1+ and 1-800 Rates is hereby amended and restated in the form
attached to this Amendment as Exhibit A-7 and Exhibit A-5 of the Agreement,
IXC Xclusive Card Services is hereby amended and restated in the form attached
to this Amendment as Exhibit A-5.
7. The additional Exhibits A-8 through A-10 and Exhibits F, G and H
to this Amendment shall be deemed to be attached to, and made a part of, the
Agreement.
8. This Amendment is effective as of the date hereof.
9. All other terms and conditions of the Agreement not specifically
amended herein shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment.
IXC LONG DISTANCE, INC. COMPUTER TELEPHONE CORP.
/s/John Fleming /s/David E. Mahan
By: ____________________ By: ____________________
Name: John Fleming Name: David E. Mahan
Title: Executive V.P. Title: Vice President
Date: 8/23/96 Date: 8/23/96
AMENDMENT NO.1 TO TELECOMMUNICATION SERVICE AGREEMENT
This Amendment No.1 to Telecommunications Service Agreement (this
"Agreement") is made as of January 15, 1996 by and between IXC Long Distance,
Inc., a Delaware corporation ("Supplier") and Computer Telephone Corp., a
Massachusetts corporation ("Customer").
Background
This Amendment is made with reference to the following facts:
A. Customer and Supplier are parties to that certain
Telecommunications Service Agreement dated as of June 23, 1995 (the
"Agreement").
B. The parties desire to amend the Agreement pursuant to the terms
set forth below.
Terms of Amendment
Accordingly, in consideration of the mutual promises set forth below,
the parties hereto hereby agreed as follows:
1. Section 8. Term of the Agreement is hereby amended to be in force
and effect until May 31, 2000.
2. Paragraph (B) of Section 9. Charges. Payments and Security
Interest of the Agreement is hereby amended to read in its entirety as
follows:
B. Customer represents to Supplier that it expects to purchase
Services hereunder in at least the following amounts (the "Commitment"): (i)
$350,000.00 each month, commencing June 1, 1996 and ending November 30, 1996;
(ii) $750,000.00 each month, commencing December 1, 1996 and ending May 31,
1997; and (iii) $ 1,000,000.00 each month, commencing June 1, 1997 and ending
May 31, 2000. The rates Supplier shall charge Customer for Services are
dependent on the aggregate amount of Services (the "Volume") per month
provided hereunder to Customer. The initial rates were based on Customer's
commitment to purchase the Services at the $1,000,000.00 level. Supplier
shall review the rates charged to Customer six months from the date the first
order is placed, and every six months thereafter for the term of this
Agreement. In the event Customer has failed to purchase the Commitment level
on average for each designated six-month period, then Customer's rates shall
not have been consistent with the rate the parties have agreed is appropriate
for such Service level (in accordance with Standard Rates in Exhibit A) and
Customer's rates shall be adjusted. The rate adjustment for any such six
month period shall be made in the amount equal to the difference between the
actual charges for the Volume purchased over such six month period and the
applicable rate for the shortfall between the purchased Volume and the
Commitment level. Customer shall, immediately upon the receipt of Supplier's
invoice therefor, pay to Supplier the amount of such rate adjustment.
3. Section 10. Calculation of Call Duration of the Agreement is
hereby amended to read in its entirety as follows:
Supplier will calculate call duration for Call Detail Records ("CDR's")
which will be sent to Customer by Supplier for Customer to rebill Customer's
End-Users, based upon the IXC On-line software specifications defined in the
User Guide. Customer may request CDR's from Supplier and Supplier shall
provide CDR's within five business days from the end of the month in which
service is rendered. Customer shall specify one of the following formats for
CDR's: (i) electronically transmitted, or (ii) CD Rom. CDR's shall be made
available for up to a year from the date of service. The information format
of the CDR's included in the User Guide.
4. Exhibit A-2. IXC Private Line Addendum is hereby amended and
restated in the form attached to this Amendment as Exhibit "A."
5. Exhibit C. IXC On-Line Software Agreement Requirements is hereby
amended and restated in the form attached to this Amendment as Exhibit "B."
6. Exhibit A-4. Xclusive International is hereby amended to included
rates set forth and attached to this Amendment as Exhibit "C."
7. This Amendment is effective as of the date hereof.
8. All other terms and conditions of the Agreement not specifically
amended herein shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment.
IXC LONG DISTANCE, INC. COMPUTER TELEPHONE CORP.
By: /s/ John R. Fleming By: /s/ David E. Mahan
Name: John R. Fleming Name: David E. Mahan
Executive Vice President
Title: and Chief Operating Officer Title: Vice President
Date: 1-15-96 Date: 1/10/96
Exhibit List
Exhibit A IXC Private Line Addendum
Exhibit B IXC On-Line Software Agreement
Exhibit C IXC Xclusive International Rates
Exhibit A
Private Line Addendum
This Private Line Addendum is attached to and made a part of that
certain Telecommunications Service Agreement entered into by and between IXC
Long Distance, Inc. ("Supplier") and Computer Telephone Corp., ("Customer")
with a service commencement date of June 23, 1995.
1. Definitions. For the purposes of this Agreement:
(A) "Available" shall mean, with respect to any Circuit, that all
necessary equipment with respect to such Circuit has been installed,
connected, tested and confirmed by Supplier to be operating in accordance with
the required specifications.
(B) "Activation Date" shall mean, with respect to any Circuit, the
date such Circuit is first made available to Customer's end user for
completion of calls.
(C) "Circuit" shall mean a DS-0, DS-1 or DS-3.
(D) "Circuit Lease Term" shall mean, with respect to any Circuit, the
period from the Activation Date of such Circuit to the later of (i) one year
from the Activation Date, or (ii) the date, if any, specified in the Dedicated
Access Order Form.
(E) "Circuit Mileage" shall mean, with respect to any Circuit, the
length of such Circuit in airline miles computed according to industry
standard V&H coordinates, as specified in the Dedicated Access Order Form
pursuant to which such Circuit is ordered.
(F) "City Pair" shall mean, with respect to any Circuit, the two
cities in which such Circuit terminates, as specified in the Dedicated Access
Order Form pursuant to which such Circuit is ordered.
(G) "Dedicated Access Order Form" shall mean Supplier's form to be
utilized by Customer in placing orders for Service hereunder as set forth as
Exhibit E attached hereto, and as such form may hereafter be amended or
modified by Supplier.
(H) "DS-0 Circuit Mile Rate" shall mean, with respect to any Circuit,
the rate, if any, so designated in Exhibit A attached hereto with respect to
such Circuit in the Dedicated Access Order Form pursuant to which such Circuit
is order.
(I) "DS-0" shall mean a Circuit complying with all applicable Bellcore
standards in accordance with TR-TSY-000333 "Switched and Special Access
Services - Transmission Parameter Limits and Interface Combinations" Issue 1,
July 1990.
(J) "DS-1 " shall mean a Circuit meeting the specifications set forth
in AT&T Technical Reference Pub. 62411, December 1990 and Bellcore
TR-MWT-000488, Issue 4, November 1991, Revision 1, April 1992.
(K) "DS-3" shall mean a Circuit meeting the specifications set forth
in AT&T Technical Reference Pub. 63914 Addendum 3, March, 1990 and Bellcore
TB-NWT-608488, Issue 4, November 1991, Revision 1, April 1992.
(L) "Monthly Lease Rate" shall mean, with respect to any Circuit, the
amount designated in Exhibit A attached hereto, or if different, in the
Dedicated Access Order Form accepted by Supplier pursuant to which such
Circuit is ordered. In the event no such amount is so designated, such term
shall mean (1) with respect to any DS-1, the product of (i) 24, (ii) the DS-0
Circuit Mile Rate for such DS-1, and (iii) the Circuit Mileage for such DS-1,
and (2) with respect to any DS-3, the product of (i) 672, (ii) the DS-0
Circuit Mile Rate for such DS-3 and (iii) the Circuit Mileage for such DS-3.
On-net DS-0, DS-1, DS-3 and Ancillary Pricing is set forth in Exhibit B
attached hereto.
(M) "On-net Service" shall be service between any of the cities
identified in Exhibit C-1 (DS-0) and Exhibit C-2 (DS-1 and DS-3) attached
hereto. "On-net City" shall mean any such city. "On-net DS-0," "On-net
DS-1" or "On-net DS-3" shall mean a DS-0, DS-1 or DS-3, respectively, between
two On-net Cities. "Off-net Service" cities are set forth on Exhibit D
attached hereto.
(N) "Requested Service Commencement Date" shall mean, with respect to
any Circuit, the date Service on such Circuit is requested by Customer to
commence as specified in the Dedicated Access Order Form pursuant to which
such Circuit is ordered.
2. Scope and Lease Rates. Supplier shall provide Service to Customer upon
the terms and conditions set forth below:
(A) Service shall be provided with respect to each Circuit set forth
in each Dedicated Access Order Form between Supplier's locations in each city
of the City Pair specified in such Dedicated Access Order Form with respect to
such Circuit at the applicable Monthly Lease Rate.
(B) Supplier shall provide maintenance for all of Supplier's digital
transmission equipment installed between the Supplier's demarcation point in
one city location to the Supplier's demarcation point in the other city
location associated with the City Pair specified in the Dedicated Access Order
Form.
(C) Supplier shall use its best efforts consistent with its
obligations to its other customers to provide Service on each Circuit
commencing on the Requested Service Commencement Date specified with respect
to each Circuit.
(D) Supplier shall provide Service to each Circuit ordered hereunder
from the Activation Date of such Circuit for the Circuit Lease Term for such
Circuit.
(E) Customer may, at its option and upon 30 days' notice to Supplier,
reconfigure On-net Circuits originating in a particular city by canceling such
Circuits and simultaneously ordering new C)n-net Circuits originating in such
city from Supplier's unused capacity, but only if all the following conditions
are met (i) such Circuits to be canceled have been in service at the time of
such reconfiguration for at least 90 days; (ii) Service capacity on each such
new Circuit is available from Supplier (Supplier shall not be obligated to
construct new Circuit capacity to fill any Dedicated Access Order Form); (iii)
Customer shall pay for such reconfiguration all applicable charges set forth
in Exhibit B hereto; and (h) the aggregate monthly invoicing hereunder for the
new Circuits involved in such reconfiguration must be equal to, or greater
than, the aggregate monthly invoicing for the canceled Circuits.
3. Termination.
(A) Customer may terminate Service with respect to (i) any On-net
Circuit upon forty-five (45) days prior written notice thereof to Supplier and
(ii) any Off-net Circuit upon ninety (90) days prior written notice thereof to
Supplier, and, in either case, payment of all termination charges set forth
below. Such termination charges shall include:
(i) In the event such termination occurs prior to the Activation Date
specified with respect to such Circuit, all nonrecoverable costs of the
implementation of, and expenditures or liabilities reasonably incurred and
directly connected with, the provision of Service, including but not limited
to, all professional, consulting and other costs incurred by Supplier in
furtherance of implementing such Service; and
(ii) In the event such termination occurs at or after the Activation
Date specified with respect to such Circuit, Customer shall pay all charges
hereunder for the period during which Service is rendered on such Circuit.
If Service on a Circuit is terminated prior to the expiration of the Circuit
Lease Term, Supplier shall make its best effort to lease Service on such
Circuit at no less than the Monthly Lease Rate for such Circuit. In the
event Supplier cannot lease Service on such Circuit on the same or
substantially similar terms and conditions as set forth herein, Customer shall
be liable for payment (1) for the total amount due through the end of the
Circuit Lease Term for such Circuit less (2) the total amount collected by
Supplier from any other lessee with respect to such Circuit.
(B) Customer shall give written notice to Supplier of any material
breach in performance hereunder. Supplier shall have forty-five (45) days
after such notice to cure such breach. If after such 45-day period, Supplier
fails to cure such breach, including, but not limited to, compliance with the
material technical and operational specifications applicable to a Circuit,
Customer may terminate Service on the such affected Circuit. In the event of
any such termination, Customer's liability with respect to such Circuits shall
be limited to the Monthly Lease Rate for the affected Service which was
properly rendered prior to the effective date of such termination.
(C) In the event Supplier fails to provide the Service within six
months (6) of the Requested Service Commencement Date for such Circuit, then
Customer, at its option may terminate that Service on the affected Circuit
without any liability whatsoever. Such right to terminate shall be
Customer's sole remedy for such failure to provide Service.
4. Allowance for Service Outage Periods.
(A) A Circuit shall be deemed to be in an outage condition under this
Agreement if, while Customer is using or attempting to use such Circuit, such
Circuit loses continuity and fails to comply with the applicable
specifications for such Circuit. An outage period begins when a report is
received by Supplier's Customer Service Group from Customer by telephone that
Service has been interrupted and that such Circuit is released for repair.
An outage period ends when Supplier notifies Customer by telephone that
Service has been restored.
(B) A credit for each outage period shall be allowed and calculated as
follows:
(i) No credit shall be allowed for an outage period of
seventy-two (72) hours or less in the case of a Catastrophic Outage (as
defined below), or one (1) hour or less in the case of a Non-Catastrophic
Outage (as defined below). Customer shall be credited for an outage period
to the extent such outage period exceeds seventy-two (72) hours or one (1)
hour, as the case may be, at the rate of 1/1440 of the monthly rate or charge
applicable to the Circuits which are subject to the outage period for each
half-hour or major fraction thereof that an outage period continues beyond
seventy-two (72) hours or one (1) hour, as the case may be. For purposes of
the foregoing, "Catastrophic Outage" includes outages caused by a cable cut or
radio failure, an equipment enclosure fire, an explosion, or any other
circumstances of an extraordinary and catastrophic nature and a Non-
Catastrophic Outage" includes all other outages.
(ii) No credit shall be allowed with respect to any period
during which Customer fails to afford access to any facilities provided by
Supplier for the purpose of investigating and correcting an interruption of
Service.
(iii) The Monthly Lease Rates used to determine any credit
hereunder shall be the then current Monthly Lease Rates being assessed.
(iv) The seventy-two (72) hour and One (1) hour periods set
forth above shall be extended by the period during which Supplier is unable to
restore Service due to an event or circumstance described in Paragraph 18 of
the Switched Minute Service Agreement.
(v) In no event shall any credit be allowed hereunder (1) in
excess of the then current Monthly Lease Rate for the applicable Circuit or
(2) with respect to any Circuit for which Customer (i) fails to make or (ii)
is excused from making any payment because of operation of law or any other
reason.
(C) Calculations of credits shall be based upon Supplier's Customer
Service Group Log maintained in Supplier's Network Status Center.
(D) No credit allowances will be made for outage periods:
(i) caused by Customer and/or Customer's end user;
(ii) caused by the failure of equipment or systems provided by
Customer and/or Customer's end user or persons other than Supplier, including
any provider of local access service to Supplier,
(iii) occurring with respect to a Circuit released by Customer to
Supplier to perform scheduled maintenance, to make rearrangements, or to
implement an order for a change in the Circuit; or
(iv) occurring with respect to a Circuit which Customer elects
not to release for testing or repair and continues to use on an impaired
basis;
(E) The credit provided for hereunder shall be Supplier's sole
liability and Customer's sole remedy in the event of any outage periods or
interruption of Service.
(F) In the event Supplier determines it is necessary to interrupt
Service on a Circuit for maintenance, Supplier shall use its best efforts to
give Customer notice thereof by telephone 48 hours prior to such Service
interruption. Supplier will use its best efforts to schedule such Service
interruptions on weekends between midnight and 3:00 am Credits will not be
allowed with respect to such Service interruptions.
To confirm their agreement to be bound hereby, the parties hereto have
executed this addendum below:
SUPPLIER: CUSTOMER:
IXC Long Distance, Inc. Computer Telephone Corp.
By: /s/ John R. Fleming By: /s/ David E. Mahan
Executive Vice President
Its: and Chief Operating Officer Its: Vice President
TELECOMMUNICATIONS SERVICE AGREEMENT
This Agreement is made as of June 23, 1995, between IXC Long Distance,
Inc. ("Supplier"), and Computer Telephone Corp., a Massachusetts corporation
("Customer").
1. Scope. Supplier is authorized: (i) to use its best efforts (considering
the needs of its other customers) to start provisioning of telecommunications
services (such services, together with the use of the IXC Online Software, are
referred to as the "Services") to Customer on the Service Commencement Date,
July 1, 1995; and (ii) to act as Customer's agent in placing orders with other
carriers in order to provide telecommunications services, if requested. Usage
charges ("Usage Charges") hereunder shall be based on: (i) the rates for
Service set forth in Exhibit A-1 through A-7, as applicable; and (ii) actual
usage of Supplier's network from establishment of a connection between the
calling telephone and the called telephone to termination, as determined by
Supplier.
2. Customer Responsibilities.
A. Customer shall use its best efforts to solicit and market the
Services in accordance herewith and with applicable law. Customer shall at
all times conduct its efforts in a commercially reasonable and ethical manner.
Customer shall pay all its expenses in connection with its business and its
performance hereunder. Customer shall provide its own billing and customer
service to its customers ("End-Users"). Customer shall obtain a letter of
agency ("LOA") from each End-User in compliance with applicable Federal
Communications Commission ("FCC") and state regulations, however, Customer
must obtain a signed LOA from each End-User utilizing 800 service. Customer
shall retain the signed LOA's and promptly make originals available upon
request of Supplier, any local exchange carrier ("LEC") or any regulatory
agency. Customer shall be responsible for LEC Primary Interexchange Carrier
change charges ("PIC Charges") that may be imposed on Supplier as a result of
End-Users moving onto or off of the Supplier network. In the event of a
disputed transfer to the Supplier network, including, but not limited to those
resulting from Customer's inability or refusal to provide original End-User
LOA's when requested, Customer shall pay Supplier such PIC Charges, and any
other expenses or damages suffered by Supplier relating to any such transfer.
To the extent Customer makes any statements or representations to third
parties (including End-Users) with regard to Supplier, the Services, or the
terms here, such statements or representations shall be true and not
misleading. When applicable, Customer will be responsible for notifying each
End-User, in writing (or by any other means approved by the FCC that: (i) a
transfer charge will be reflected on such End-User's LEC bill for effecting a
change in their primary interexchange carrier, (ii) the entity name under
which such End-User's interstate, intrastate and/or operator services will be
billed (if different from Customer), and (iii) the "primary" telephone
number(s) to be used for maintenance and questions concerning such End-User's
long distance service and/or billing. Customer agrees to send Supplier a copy
of the documentation Customer uses to satisfy the above requirements promptly
upon request. Supplier may change the foregoing requirements at any time in
order to conform with applicable FCC and state regulations. Notwithstanding
the foregoing, however, Customer shall be solely responsible for ensuring that
the transfer of End-Users to the Supplier network conforms with applicable FCC
and state regulations, including, without limitation, the regulations
established by the FCC with respect to verification of orders for long
distance service generated by telemarketing.
B. Prior to the Service Commencement Date and by the end of each
quarter thereafter, Customer shall provide Supplier with forecasts covering a
good faith estimate of the monthly traffic volume and distribution for the
ordered Services for the next three calendar months. The forecasts are to be
in the format attached hereto as Exhibit B.
3. Excluded ANIs. Supplier has the right to reject any automatic number
identifier ("ANI") supplied by Customer for any of the following reasons: (i)
Supplier is not authorized to provide or does not provide long distance
services in the particular jurisdiction in which the ANI is located; (ii) a
particular ANI submitted by Customer is not in proper form; (iii) Customer is
not certified to provide long distance services in the jurisdiction in which
the ANI is located; (iv) Customer is in default of this Agreement; (v)
Customer fails to cooperate with Supplier in implementing reasonable
verification processes determined by Supplier to be necessary or appropriate
in the conduct of business; or (vi) any other circumstance reasonably
determined by Supplier which could adversely affect Supplier's performance
under this Agreement or Supplier's general ability to transfer its other
customers or other End-Users to the Supplier network, including without
limitation, Supplier's ability to electronically effect PIC change with the
LEC's. However, whether or not Supplier is not electronically connected to
the LEC's, Supplier shall issue PIC orders on behalf of Customer. In the
event Supplier rejects an ANI, Supplier will notify Customer within
forty-eight (48) hours of its decision specifically describing the rejected
ANI and the reason(s) for rejecting that ANI. Further, any ANI requested by
Customer for Service may be deactivated by Supplier after five-days' written
notice to Customer if no Service billings relevant thereto have been generated
in any prior period of three consecutive calendar months. Supplier will be
under no obligation to accept ANIs within the three-month period preceding the
scheduled expiration of the term hereof.
4. Records. Customer will maintain documents and records ("Records")
supporting Customer's re-sale of Service, including, but not limited to,
appropriate and valid LOAs from End-Users for a period of not less than twelve
(12) months or such other longer period as may be required by applicable law,
rule or regulation. Customer shall indemnify Supplier for any costs, charges
or expenses incurred by Supplier arising from disputed PIC selections
involving Service to be provided to Customer for which Customer cannot produce
an appropriate LOA relevant to the ANI and PIC Charge in question, or when
Supplier is not reasonably satisfied that the validity of a disputed LOA has
been resolved.
5. Fraudulent Calls. Customer shall indemnify and hold Supplier harmless
from all costs, expenses, claims or actions arising from fraudulent calls of
any nature which may comprise a portion of the Service to the extent that the
party claiming the call(s) in question to be fraudulent is (or had been at the
time of the call) an End-User of the Service through Customer or an End-User
of the Service through Customer's distribution channels. Customer shall not
be excused from paying Supplier for Service provided to Customer or any
portion thereof on the basis that fraudulent calls comprised a corresponding
portion of the Service. In the event Supplier discovers fraudulent calls
being made (or reasonably believes fraudulent calls are being made), nothing
contained herein shall prohibit Supplier from taking immediate action (without
notice to Customer) that is reasonably necessary to prevent such fraudulent
calls from taking place, including without limitation, denying Service to
particular ANI's or terminating Service to or from specific locations.
6. SubCIC Option. Supplier shall, at the request of Customer, arrange
under Supplier's carrier identification code ("CIC") for a SubCIC for
Customer. Customer shall pay all incremental associated charges and expenses
incurred by Supplier in connection therewith, on a pass-through basis, without
markup by Supplier.
7. Authorized Use of Supplier Name. Without Supplier's prior written
consent, Customer shall not: (i) refer to itself as an authorized
representative of Supplier in promotional, advertising or other materials; or
(ii) use Supplier's logos, trade marks, service marks, or any variations
thereof in any of its promotional, advertising or other materials or in any
activity using or displaying Supplier's name or the Services to be provided by
Supplier. Customer agrees to change or correct, at Customer's expense, any
such material or activity which Supplier, in its sole judgment, determines to
be inaccurate, misleading or otherwise objectionable. Customer is explicitly
authorized to only use the following statements in its sales literature: (i)
"Customer utilizes the Supplier network"; (ii) "Customer utilizes Supplier's
facilities; (iii) "Supplier provides only the network facilities"; and (iv)
"Supplier is our network services provider".
8. Term. This Agreement is effective as of the date hereof and shall
remain in force and effect until December 31, 1999, unless earlier terminated
pursuant to its terms. This Agreement shall be automatically extended at the
expiration of the initial and any subsequent term for an additional term of
one year unless: (i) earlier terminated; or (ii) written notice is given by
any party at least ninety (90) days before such expiration that such party
does not consent to such extension.
9. Charges. Payment and Security Interest.
A. All Usage Charges shall be due and payable by Customer to Supplier
within 60 days of the date of invoice, without demand or set off by Customer;
provided, however, that to the extent Customer disputes a portion of an
invoice because it has received what it considers in good faith to be
materially incorrect CDR's (as such term is defined in Section 10), the due
date for such disputed portion shall be delayed for as long as Customer
cooperates in good faith to resolve such dispute. Usage Charges are billed
and payable following the period in which actual usage has been incurred. All
Usage Charges contained in this Agreement are calculated according to the
rates set forth in Exhibit A
attached hereto. If any invoice is not paid when due: (i) a late charge shall
accrue equal to 1-1/2% (or the maximum legal rate, if less) of the unpaid
balance per month; (ii) Supplier may suspend or terminate the Service; or
(iii) Supplier may require additional deposits or a lock-box arrangement
acceptable to Supplier. Notwithstanding the foregoing, Customer may elect to
make payment within 15 days of the date of invoice, for which it shall be
allowed a 1% early payment discount; provided, however that once such election
is made, the 1% discount remains in effective only as long as such payments
are made within such 15 day period and upon the failure of Customer to make
such payments within such 15 day period, the 1% discount shall terminate and
the Customer may not elect to receive the 1% discount on any future payments.
B. Customer represents to Supplier that it expects to purchase
Services hereunder in at least the following amounts (the "Commitment"): (i)
$350,000.00 each month, commencing January 1, 1996 and ending June 30,
1996;(ii) $750,000.00 each month, commencing July 1, 1996 and ending December
31, 1996; and (iii) $1,000,000.00 each month, commencing January 1 , 1 997 and
ending December 31 , 1999. The rates Supplier shall charge Customer for
Services are dependent on the aggregate amount of Services (the "Volume") per
month provided hereunder to Customer. The initial rates were based on
Customer's commitment to purchase the Services at the $1,000,000.00 level.
Supplier shall review the rates charged to Customer six months from the
Service Commencement Date and every six months thereafter for the term of this
Agreement. In the event Customer has failed to purchase the Commitment level
on average for each designated six month period, then Customer's rates shall
not have been consistent with the rate parties have agreed is appropriate for
such Service level (in accordance with Standard Rates in Exhibit A) and
Customer's rates shall be adjusted. The rate adjustment for any such six
month period shall be made in the amount of the difference between the actual
charges for the Volume purchased over such six month period and the applicable
rate for the shortfall between the purchased Volume and the Commitment level.
Customer shall immediately upon the receipt of Supplier's invoice therefor,
pay to Supplier the amount of such rate adjustment.
C. Prior to service activation, but in no event later than thirty
(30) days after the end of each fiscal quarter, Customer shall provide
Supplier with a consolidated balance sheet of Customer as of the end of such
quarter and consolidated statements of income and retained earnings for such
quarter and the fiscal year to date through such quarter, all in reasonable
detail and certified by Customer's chief financial officer as having been
prepared in accordance with generally accepted accounting principals,
consistently applied.
D. In the event Customer's monthly invoicing hereunder reaches Two
Million and No/100 Dollars ($2,000,000.00) per month (or any greater multiple
of $1,000,000.00), Supplier shall meet with Customer and negotiate in good
faith with Customer to agree to mutually agreeable rates appropriate for the
applicable monthly billing level customer has achieved; provided, however
that: (i) no such new rates shall be in effect prior to July I, 1996; and (ii)
no failure to reach agreement on such new rates shall effect the validity or
enforceability of this Agreement or any part hereof, including, without
limitation, the Commitment set forth above.
E. Concurrently herewith, Customer has deposited with Supplier an
irrevocable, standby letter of credit for the benefit of Supplier, in form and
substance reasonably satisfactory to Supplier from a lender reasonably
satisfactory to Supplier in the amount of $100,000.00 (the "Security
Deposit"), which amount is agreed to between Supplier and Customer hereunder
as security for the full and faithful performance of Customer of the terms,
conditions and covenants of this Agreement. If at any time during the term of
the Agreement, Customer defaults in the payment of any Usage Charges, or any
other amounts payable by Customer to Supplier hereunder, then Supplier may
appropriate and apply any portion of the Security Deposit reasonably necessary
to remedy any such default. If during the term of the Agreement, Supplier so
applies all or any portion of the Security Deposit, then Customer shall
restore the amount of the Security Deposit so applied by Supplier on or before
the next due payment of Usage Charges under this Agreement. If, however,
invoices for Services during any month provided by Supplier exceed one half of
the Security Deposit, at the request of Supplier, Customer shall within five
(5) days (i) provide an additional cash deposit; or (ii) other form of
security satisfactory to Supplier which in either case, shall be in an amount
equal to the amount by which the invoice for such month exceeds one-half of
the amount of the Security Deposit held by Supplier. In addition, if at any
time during the term of this Agreement there is a material and adverse change
in Customer's financial condition or business prospects, which shall be
determined by Supplier in its sole and absolute discretion, then Supplier may
demand that Customer increase the amount of the Security Deposit; provided,
however, that in no event shall the amount of the Security Deposit ever exceed
two months' estimated Usage Charges and other amounts payable by Customer to
Supplier hereunder.
F. Notwithstanding anything to the contrary in Section 9.E, above, at
any time during the term of the Agreement, Supplier shall release the Security
Deposit to Customer, in consideration of Customer's undertaking of any of the
following actions: (i) Obtaining for the benefit of Supplier an irrevocable,
standby letter of credit, in form and substance reasonably satisfactory to
Supplier, from a lender reasonably satisfactory to Supplier, securing the
prompt payment, when due, of the estimated Usage Charges and other amounts due
and payable by Customer to Supplier hereunder during any given two-month
period; (ii) (a) granting to Supplier a continuing, floating, first priority
security interest and lien in and to the Collateral (as defined below) on the
terms and subject to the conditions of a security agreement in form and
substance reasonably satisfactory to Supplier, and (b) depositing with
Supplier a Security Deposit in the amount of one months' estimated Usage
Charges and other amounts due and payable by Customer to Supplier hereunder;
(iii) directing all of Customer's End-Users to deposit any money owed by such
End-Users to Customer directly into a lock box account for the benefit of
Supplier, and authorize Customer's bank to make automatic clearing house fund
transfers from such lock box account to the account of Supplier in amounts
initially agreed to by Customer and Supplier, on the terms and subject to the
conditions of an escrow agreement in form and substance reasonably
satisfactory to Supplier. Customer shall execute from time to time such
additional instruments as may be reasonably required by Supplier to preserve
and perfect any security interest created hereunder. For purposes of this
subparagraph (ii), the term "Collateral" shall mean all of the following
assets of Customer, now or hereafter existing, wherever located, and all
additions, substitutions, proceeds, products, offsprings, rents and profits
thereof; all accounts receivable, all customer lists, mailing lists, customer
information and customer data bases, including, without limitation, any and
all tangible assets embodying any or all of the foregoing information, and any
and all computer software or printouts embodying any or all of the foregoing
information.
10. Calculation of Call Duration. Supplier will calculate call duration for
Call Detail Records ("CDR's") which will be sent to Customer by Supplier for
Customer to rebill Customer's End-Users, based upon the IXC On-line software
specifications defined in Exhibit C. Customer may request CDR's from Supplier
and Supplier shall provide CDR's within five business days from the end of the
month in which service is rendered. Customer shall specify one of the
following formats for CDR's: (i) electronically transmitted, (ii) floppy disk,
or (iii) hard copy. CDR's shall be made available for up to a year from the
date of service. The information format of the CDR's is attached hereto as
Exhibit D.
11. Failure of Performance.
A. Customer shall immediately notify Supplier of any problems or
End-User complaints associated with the Service, including, but not limited
to, excess noise, echo or loss of Service. The liability of Supplier for
damages for mistakes, omissions, interruptions, delays, errors or defects in
transmission (herein called a "Failure of Performance") occurring in the
furnishing of Services hereunder shall be limited to not charging Customer for
any Services which Supplier failed to provide. In the event of a Failure of
Performance, Supplier shall use its reasonable efforts to correct such failure
as soon as reasonably practicable after Supplier is notified of such failure.
Except in the case of an event described in Section 18. Force Majeure, in the
event (i) Supplier notifies Customer that Supplier cannot correct a Failure of
Performance; or (ii) of a failure by Supplier to deliver Services meeting
industry standards of performance, which failure is not cured within five (5)
days of written notice thereof by Customer to Supplier; each of Supplier and
Customer, in its sole discretion, shall have the right to cancel the affected
Service(s). In the event all, or any portion of, the Services are terminated
pursuant to this paragraph, Customer shall remain liable for the Usage Charges
for the affected Services which were rendered prior to the effective date of
termination.
12. Limitation of Liability. Supplier's liability arising out of delays in
restoration of the Services to be provided under this Agreement or out of
mistakes, accidents, omissions, interruptions, or errors or defects in
transmission in the provision of Services or any other telecommunications
services, shall be subject to the limitations set forth above and in the
applicable Tariff. IN NO EVENT SHALL SUPPLIER BE LIABLE TO CUSTOMER OR ANY OF
THE CUSTOMER'S OWN CUSTOMERS OR ANY OTHER THIRD PARTY IN ANY RESPECT,
INCLUDING, WITHOUT LIMITATION, FOR ANY DAMAGES, EITHER DIRECT, INDIRECT,
CONSEQUENTIAL, SPECIAL INCIDENTAL, ACTUAL, PUNITIVE, OR ANY OTHER DAMAGES, OR
FOR ANY LOST PROFITS OF ANY KIND OR NATURE WHATSOEVER, ARISING OUT OF
MISTAKES, ACCIDENTS, ERRORS, OMISSIONS, INTERRUPTIONS, OR DEFECTS IN
TRANSMISSION, OR DELAYS, INCLUDING THOSE WHICH MAY BE CAUSED BY REGULATORY OR
JUDICIAL AUTHORITIES, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OBLIGATIONS OF SUPPLIER PURSUANT TO THIS AGREEMENT. SUPPLIER MAKES NO
WARRANTY TO CUSTOMER OR ANY OTHER PERSON OR ENTITY, WHETHER EXPRESS, IMPLIED,
OR STATUTORY, AS TO THE DESCRIPTION, QUALITY, MERCHANTABILITY, COMPLETENESS OR
FITNESS FOR ANY PURPOSE OF ANY SERVICE PROVIDED HEREUNDER OR DESCRIBED HEREIN,
OR AS TO ANY OTHER MATTER, ALL OF WHICH WARRANTIES BY SUPPLIER ARE HEREBY
EXCLUDED AND DISCLAIMED. For purposes of this Section, the term "Supplier"
shall be deemed to include Supplier, its shareholders, directors, officers and
employees, and any, person or entity assisting Supplier in its performance
pursuant to this Agreement.
13. Suspension of Service: Termination of Agreement. In the event of a
"Customer Default", Supplier may, upon notice to Customer (in addition to such
other rights or remedies as Supplier may have under this Agreement, at law or
in equity): (i) suspend Services to Customer until such time as such
circumstance is corrected (provided Supplier shall not be prohibited from
terminating this Agreement after suspending Services); or (ii) terminate this
Agreement. "Customer Default" shall mean Customer: (i) breaches any material
provision of this Agreement, including, but not limited to, the provisions
regarding payment, and does not cure such breach within thirty (30) days (five
days with respect to the first three payment breaches and no notice period
with respect to any further payment breach) of notice thereof by Supplier; or
(ii) files or initiates proceedings or has proceedings filed or initiated
against it, relating to its liquidation, insolvency, reorganization or other
relief (such as the appointment of a trustee, receiver, liquidator, custodian
or other official) under any bankruptcy, insolvency or other similar law or
makes an assignment for the benefit of its creditors or enters into an
agreement for the composition, extension or readjustment of its obligation in
connection with the foregoing. Supplier shall have the right to review
Customer's credit at any time during the Term of this Agreement, and to
require an additional cash deposit, or other security satisfactory to
Supplier. If Customer uses the Services for any unlawful purpose or in any
unlawful manner, Supplier shall have the right to suspend any or all services
hereunder to Customer until the unlawful use ceases. Notwithstanding anything
herein to the contrary, no termination shall affect or reduce Customer's
obligation to make the "take or pay commitment" payments required by Section
9.
14. System Maintenance. In the event Supplier determines to interrupt
Services for the performance of routine system maintenance, Supplier will use
reasonable efforts to notify Customer prior to the interruption and to conduct
such maintenance during non-peak hours. In no event shall interruption for
system maintenance constitute a Failure of Performance.
15. Subject to Laws. Customer hereby represents and warrants that it is
certified to do business in all jurisdictions in which it conducts business
and is in good standing in all such jurisdictions. Customer further
represents and warrants that it is certified by the proper regulatory agencies
to provide interstate, intrastate and international long distance services to
End-Users in those jurisdictions where such services are to be provided by
Customer. This Agreement is subject to, and Customer agrees to comply with,
all applicable federal, state and local laws, and regulations, rulings and
orders of governmental agencies, including, but not limited to, the
Communications Act of 1934, as amended, the Rules and Regulations of the FCC
and state public utility or service commissions ("PSC"), tariffs and the
obtaining and continuance of any required certification, permit, license,
approval or authorization of the FCC and PSC or any governmental body,
including, but not limited to regulations applying to feature group
termination and letters of agency.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and when taken
together shall constitute one document.
17. Confidential Information and Nonsolicitation.
A. "Confidential Information" shall mean all information disclosed
orally or in writing by one party to the other party and which is clearly
identified by the disclosing party at the time of disclosure as confidential
information of the disclosing party. With respect to information orally
disclosed by one party to the other party, the disclosing party must provide
the recipient with a written summary of such information, designating such
information as confidential, within one week after the oral disclosure was
made in order for such information to be considered Confidential Information.
Each party shall safeguard Confidential Information utilizing the same degree
of care it utilizes in protecting its own confidential information. The
obligations of the recipient of Confidential Information set forth in this
Section shall not apply to the extent that: (i) such Confidential Information
becomes generally available to the public other than as a result of
unauthorized disclosure by the recipient or persons to whom the recipient has
made the information available; (ii) such Confidential Information has been
released without restriction by the disclosing party to another person or
entity, or (iii) such Confidential Information was received by the recipient
on a non-confidential basis, prior to receipt from such party from a third
party lawfully possessing and lawfully entitled to disclose such information.
Further, the recipient may disclose Confidential Information pursuant to
any judicial or governmental request, requirement or order. The recipient,
however, shall take reasonable steps to give the disclosing party sufficient
prior notice to contest such request, requirement or order. Confidential
Information shall remain the property of the disclosing party, and shall be
returned to the disclosing party or destroyed upon request of the disclosing
party.
B. All information concerning the Customer's traffic
volume/distribution and the identity of the Customer's customers given to
Supplier by Customer or learned in connection with this Agreement or any other
transaction between Supplier and Customer is hereby acknowledged by Supplier
to be Confidential Information regardless of whether it is so identified by
Customer.
C. All information concerning Supplier traffic volume/distribution
and the identity of Supplier's customers given to Customer by Supplier or
learned in connection with this Agreement or any other transaction between
Supplier and Customer is hereby acknowledged by the Customer to be
Confidential Information regardless of whether it is so identified by
Customer.
D. Accordingly, in the event of a breach or threatened breach of the
foregoing provisions, Supplier shall be entitled to an injunction or
restraining order, in addition to such other rights or remedies as may be
available under this Agreement, at law or in equity, including but limited to
money damages.
18. Force Majeure. Except for Customer's right to terminate the Agreement
pursuant to Section 8, Supplier shall not be liable for any failure of
performance hereunder due to causes beyond its reasonable control, including,
but not limited to: acts of God, fire, explosion, vandalism, cable cut, storm
or other similar catastrophes; any law, order, regulation, direction, action
or request of the United States government, or of any other government,
including state and local governments having jurisdiction over either of the
parties, or of any department, agency, commission, court, bureau, corporation
or other instrumentality of any one or more of said governments, or of any
civil or military authority, national emergencies, insurrections; riots; wars;
or strikes, lock outs, work stoppages or other labor difficulties.
19. Survival. The covenants and agreements of Customer contained in this
Agreement with respect to payment of amounts due and indemnification shall
survive any termination of this Agreement. The rights and obligations under
this Agreement shall survive any merger or sale of either party and shall be
binding upon the successors and permitted assigns of each party.
20. Notices. All notices required under this Agreement shall be given in
writing and delivered by a nationally recognized overnight courier, postage
prepaid, to the addresses set forth below:
If to Supplier: IXC Long Distance Inc.
5000 Plaza on the Lake, Suite 200
Austin, Texas 78746
Attention: Executive Vice President and
Chief Operating Officer
If to Customer: Computer Telephone Corp.
____________________
____________________
____________________
21. Taxes. (i) Customer is responsible for payment of, or reimbursement to
Supplier for, Universal Service Fund and Lifeline Assistance Charges
(Presubscribed line charges) set forth in the National Exchange Carrier
Association (NECA) Tariff FCC #5, sections 8.5.1, 8.5.2 and 17.1.4 (A) & (B),
as the same may be amended from time to time, or any successor tariffs or
sections, with respect to any Customer ANI's subscribed to Supplier. In
addition, with respect to the Services, Customer is responsible for payment
of, or reimbursement to Supplier for, (i) telecommunication relay service
charges required by the Americans with Disabilities Act or otherwise (both
federal and state), (ii) Interexchange carrier fees payable to the FCC under
the Omnibus Budget Reconciliation Act of 1993 or otherwise, and (iii)
universal service fund charges, intraLATA compensation charges and other
federal or state fees or charges imposed on Supplier.
(ii) Within 10 business days after the date hereof, Customer
shall each furnish to Supplier, and keep current during the term of this
Agreement, valid and appropriate tax exemption certificates attached hereto as
Exhibit E, for all applicable jurisdictions (Federal, state and local) in
which it performs customer billing. Customer is responsible for properly
charging tax to its subscribers and for the proper and timely reporting and
payment of applicable taxes to the taxing authorities and shall defend and
indemnify Supplier from payment and reporting of all applicable federal, state
and local taxes, including, but not limited to, gross receipts taxes,
surcharges, franchise fees, occupational, excise and other taxes (and
penalties and interest thereon), relating to the Services. Such
indemnification, includes costs and expenses (including reasonable attorney's
fees) incurred by Supplier in settling, defending or appealing any claims or
actions brought against it relating to said taxes. If Customer fails to
provided and maintain the required certificates, Supplier may charge Customer
and Customer shall pay such applicable taxes.
22. General Terms. This Agreement shall be construed under the laws of the
state of Texas. The waiver of a breach hereof shall not be construed to be a
waiver of any subsequent breach. Supplier may terminate this Agreement
without liability if Customer becomes bankrupt or insolvent. Any dispute
relating hereto shall be resolved by binding arbitration in Austin, Texas
under the rules of the American Arbitration Association. If any term hereof
is held to be invalid or unenforceable, this Agreement shall be construed
without such invalid or unenforceable term. This Agreement is the entire
agreement between the parties pertaining to the Service. This Agreement may
only be modified by an instrument in writing executed by each party. Neither
party may assign this Agreement without the written consent of the other
party; provided, however, that a security interest in this Agreement may be
granted by Supplier to its lenders. The rates hereunder do not include any
sales, use or utility taxes. Customer shall pay to Supplier any such taxes
that Supplier may be required to collect or pay.
To confirm their agreement to be bound hereby, the parties have executed this
agreement below:
IXC LONG DISTANCE, INC.: COMPUTER TELEPHONE CORP.:
/s/ /s/
By: ______________________ By: _________________________
Its: EVP & COO Its: Vice Chairman
Exhibit List
Exhibit A-l IXC Interstate Switched and
Dedicated 1+ and 1-800 Rates and
Xclusive Intrastate 1+ and 1-800 Switched,
Dedicated and Switched Travel Card Rates
Exhibit A-2 IXC Private Line Addendum
Exhibit A-3 IXC Xclusive Extended State Rates
Exhibit A-4 IXC International Rates
Exhibit A-5 IXC Xclusive Card Services
Exhibit A-6 IXC Other Service Charges
Exhibit A-7 IXC Standard Interstate Switched and
Dedicated 1+ and 1800 Rates
Exhibit B IXC Forecast Form
Exhibit C IXC On-Line Software Agreement Requirements
Exhibit D IXC CDR Format
Exhibit E Tax Certificate (to be attached)
Exhibit A-2
Private Line Addendum
This Private Line Addendum is attached to and made a part of that
certain Telecommunications Service Agreement entered into by and between IXC
Long Distance, Inc. and Computer Telephone Corp. with a service commencement
date of July 1, 1995.
1. Definitions. For the purposes of this :Agreement
(A) "Available" shall mean, with respect to any Circuit, that all
necessary equipment with respect to such Circuit has been installed,
connected, tested and confirmed by Supplier to be operating in accordance with
the required specifications.
(B) "Activation Date" shall mean, with respect to any Circuit, the date
such Circuit is first made available to Customer.
(C) "Circuit" shall mean a DS-0, DS-1 or DS-3.
(D) "Circuit Lease Term" shall mean, with respect to any Circuit, the
period from the Activation Date of such Circuit to the end of the term of this
Agreement.
(E) "Circuit Mileage" shall mean, with respect to any Circuit, the
length of such Circuit in airline miles computed according to industry
standard V&H coordinates, as specified in the purchase order pursuant to which
such Circuit is ordered.
(F) "City Pair" shall mean, with respect to any Circuit, the two cities
in which such Circuit terminates, as specified in the purchase order pursuant
to which such Circuit is ordered.
(G) "DS-0" Circuit Mile Rate" shall mean, with respect to any Circuit,
the rate, if any, so designated with respect to such Circuit in the purchase
order pursuant to which such Circuit is ordered.
(H) "DS-0" shall mean a Circuit complying with all applicable Bellcore
standards in accordance with TR-TSY 000333 "Switched and Special Access
Services - Transmission Parameter Limits and Interface Combinations" Issue 1,
July 1990.
(I) "DS-1" shall mean a Circuit meeting the specifications set forth in
AT&T Technical Reference Pub. 62411, December 1990 and Bellcore
TR-MWT-000488, Issue 4, November 1991, Revision 1, April 1992.
(J) "DS-3" shall mean a Circuit meeting the specifications set forth in
AT&T Technical Reference Pub. 63914 Addendum 3, March, 1990 and Bellcore
TB-NWT-608488, Issue 4, November 1991, Revision 1, April 1992.
(K) "Monthly Lease Rate" shall mean, with respect to any Circuit, the
amount designated in Exhibit A hereto, or if different, in the purchase order
accepted by Supplier pursuant to which such Circuit is ordered. In the event
no such amount is so designated, such term shall mean (1) with respect to any
DS-1, the product of (i) 24, (ii) the DS-0 Circuit Mile Rate for such DS-1,
and (iii) the Circuit Mileage for such DS-I, and (2) with respect to any DS-3,
the product of (i) 672, (ii) the DS-0 Circuit Mile Rate for such DS-3 and
(iii) the Circuit Mileage for such DS-3. On-net DS-0 Ancillary Pricing is set
forth in Exhibit B attached hereto.
(L) "On-net Service" shall be service between any of the cities
contained in Exhibit C attached hereto. "On-net City" shall mean any such
city. "On-net DS-0," "On-net DS-I" or "On-net DS-3" shall mean a DS-0, DS-I
or DS-3, respectively, between two On-net Cities. "Off-net Service" cities
are set forth on Exhibit D attached hereto and made a part hereof.
(M) "Requested Service Commencement Date" shall mean, with respect to
any Circuit, the date Service on such Circuit is requested by Customer to
commence as specified in the purchase order pursuant to which such Circuit is
ordered.
2. Scope and Lease Rates. Supplier shall provide Service to Customer upon
the terms and conditions set forth below:
(A) Service shall be provided with respect to each Circuit set forth in
each purchase order between Supplier's locations in each city of the City Pair
specified in such purchase order with respect to such Circuit.
(B) Supplier shall provide maintenance for all digital transmission
equipment used in connection herewith
(C) Supplier shall use its best efforts consistent with its obligations
to its other customers to provide Service on each Circuit commencing on the
Requested Service Commencement Date specified with respect to each Circuit.
(D) SuppLier shall provide Service to each Circuit ordered hereunder
from the Activation Date of such Circuit for the Circuit Lease Term for such
Circuit.
(E) Customer may, at its option and upon 30 days' notice to Supplier,
reconfigure On-net Circuits originating in a particular city by canceling such
Circuits and simultaneously ordering new On-net Circuits originating in such
city from Supplier's unused capacity, but only if all the following conditions
are met (i) such Circuits to be canceled have been in service at the time of
such reconfiguration for at least 90 days; (ii) Service capacity on each such
new Circuit is available from Supplier (Supplier shall not be obligated to
construct new Circuit capacity to fill any purchase order); (iii) Customer
shall pay for such reconfiguration all applicable charges; and (iv) the
aggregate monthly invoicing hereunder for the new Circuits involved in such
reconfiguration must be equal to, or greater than, the aggregate monthly
invoicing for the canceled Circuits.
3. Termination.
(A) Customer may terminate Service with respect to any Circuit upon
ninety (90) days prior written notice thereof to Supplier and payment of all
termination charges set forth below. Such termination charges shall include:
(i) In the event such termination occurs prior to the Activation Date
specified with respect to such Circuit, all nonrecoverable costs of the
implementation of, and expenditures or liabilities reasonably incurred and
directly connected with, the provision of Service, including but not limited
to, all professional, consulting and other costs incurred by Supplier in
furtherance of implementing such Service; and
(ii) In the event each termination occurs at or after the Activation
Date specified with respect to such Circuit, Customer shall pay all charges
hereunder for the period during which Service is rendered on such Circuit. If
Service on a Circuit is terminated prior to the expiration of this Agreement,
Supplier shall make its best efforts to lease Service on such Circuit at no
less than the Monthly Lease Rate for such Circuit. In the event Supplier
cannot lease Service on such Circuit on the same or substantially similar
terms and conditions as set forth herein, Customer shall be liable for payment
(1) for the total amount due through the end of the term of this Agreement
with respect to such Circuit less (2) the total amount collected by Supplier
from any other lessee with respect to such Circuit
(B) Customer shall give written notice to Supplier of any material
breach in performance hereunder. Supplier shall have forty-five (45) days
after such notice to cure such breach If after such 45-day period, Supplier
fails to cure such breach, including, but not limited to, compliance with the
material technical and operational specifications applicable to a Circuit.
Customer may terminate Service on the such affected Circuit In the event of
such termination, Customer's liability with respect to such Circuits shall be
limited to the Monthly Lease Rate for the affected Service which was properly
rendered prior to the effective date of such termination.
(C) In the event Supplier fails to provide the Service within six months
of the Requested Service Commencement Date for such Circuit, then Customer, at
its option, may terminate that Service on the affected Circuit without any
liability whatsoever. Such right to terminate shall be Customer's sole remedy
for such failure to provide Service.
4. Allowance for Service Outage Periods.
(A) A Circuit shall be deemed to be in an outage condition under this
Agreement if, while Customer is using or attempting to use such Circuit, such
Circuit loses continuity and fails to comply with the applicable
specifications for such Circuit An outage period begins when a report is
received by Supplier's Customer Service Group from Customer by telephone that
Service has been interrupted and that such Circuit is released for repair. An
outage period ends when Supplier notifies Customer by telephone that Service
has been restored.
(B) A credit for each outage period shall be allowed and calculated as
follows:
(i) No credit shall be allowed for an outage period of seventy-two (74
hours or less in the case of a Catastrophic Outage (as defined below), or one
(1) hour or less in the case~ of a Non-Catastrophic Outage (as defined below).
Customer shall be credited for an outage period to the extent such outage
period exceeds seventy-two (72) hours or one (1) hour; as the case may be, at
the rate of 1/1440 of the monthly rate or charge applicable to the Circuits
which are subject to the outage period for each half-hour or major fraction
thereof that an outage period continues beyond seventy-two (72) hours or one
(1) hour, as the case may be. For purposes of the foregoing, "Catastrophic
Outage" includes outages caused by a cable cut or radio failure, an equipment
enclosure fire, an explosion, or any other circumstances of an extraordinary
and catastrophic nature and "Non-Catastrophic Outage" includes all other
outages.
(ii) No credit shall be allowed with respect to any period during which
Customer fails to afford access to any facilities provided by Supplier for the
purpose of investigating and correcting an interruption of Service.
(iii) The Monthly Lease Rates used to determine any credit hereunder
shall be the then current Monthly Lease Rates being assessed.
(iv) The seventy-two (72) hour and One (1) hour periods set forth above
shall be extended by the period during which Supplier is unable to restore
Service due to an event or circumstance described in Paragraph 19 of the
Switched Minute Service Agreement
(v) In no event shall any credit be allowed hereunder (1) in excess of
the then current Monthly Lease Rate for the applicable Circuit or (@ with
respect to any Circuit for which Customer (i) fails to make or (ii) is excused
from making any payment because of operation of law or any other reason
(C) Calculations of credits shall be based upon Supplier's Customer
Service Group Log maintained in Supplier's Network Status Center.
(D) No credit allowances will be made for outage periods:
(i) caused by Customer;
(ii) caused by the failure of equipment or systems provided by Customer
or persons other than Supplier, including any provider of local access service
to Supplier,
(iii) occurring with respect to a Circuit released by Customer to
Supplier to perform maintenance, to make rearrangements, or to implement an
order for a change in the Circuit; or
(iv) occurring with respect to a Circuit which Customer elects not to
release for testing or repair and continues to use on an impaired basis;
(E) The credit provided for hereunder shall be Supplier's sole liability
and Customer's sole remedy in the event of any outage periods or interruption
of Service.
(F) In the event Lesser determines it is necessary to interrupt
Service on a Circuit for maintenance, Supplier shall use its best efforts to
give Customer notice thereof by telephone. Supplier will use its best efforts
to schedule such Service interruptions on weekends between midnight and 3:00
am. Credits will not be allowed with respect to such Service interruptions.
To confirm their agreement to be bound hereby, the parties have executed
this agreement below:
IXC Long Distance, Inc. Computer Telephone Corp.
By: ____________________ By: ____________________
Its: ____________________ Its: ____________________