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FRONTIER COMMUNICATIONS INTERNATIONAL INC.
PREPAID TELEPHONE SERVICES
DISTRIBUTOR AGREEMENT
This Prepaid Calling Card Agreement (the "Agreement") is made this 30th day of
October, 1996 (the effective date") by and between Frontier Communications
International Inc., a Delaware corporation with offices at 180 South Clinton
Avenue, Rochester, NY 14646 ("FCI"), and DIGITEC 2000, INC., with offices at 500
Fifth Avenue, New York, NY 10110. ("DISTRIBUTOR")
In consideration of the mutual covenants contained herein, FCI and DISTRIBUTOR
agree as follows:
1 TERM OF AGREEMENT
1.1 The term of this Agreement and, unless otherwise specified therein,
each Addendum made a part hereof, shall be fifteen (15) months from
the effective date. During the term of this Agreement DISTRIBUTOR
agrees to purchase a minimum of $10,000,000 at wholesale, in FCI
prepaid services. Approved retail rates per minute are stated in
ATTACHMENT "A". These services are structured to give DISTRIBUTOR a
38.5% discount off of the face value of PINs ordered.
2 OBLIGATIONS OF FCI
2.1 FCI shall exercise best efforts to avoid network service
interruptions. However, in the event of a network service
interruption or equipment failure, FCI's sole liability under this
Agreement shall be limited to the amount of damages actually
incurred by DISTRIBUTOR or DISTRIBUTOR users directly resulting from
the negligence or willful acts or omissions of FCI. FCI shall not be
liable for any interruption caused by negligence or any act or
omission by or any third party furnishing any portion of the
service.
2.2 FCI guarantees a P.01 grade of service (99% completion rate) for all
prepaid services sold to DISTRIBUTOR.
3 OBLIGATIONS OF DISTRIBUTOR
3.1 In the event that the Distributor orders a customized prepaid card
or chooses to use an existing prepaid card, Distributor must notify
Frontier of the retail face value for each prepaid card and Frontier
will provide Distributor with the number of card numbers and 800
number that corresponds with the number of prepaid cards that
Distributor will order.
3.2 Distributor must also receive Frontier marketing approval of prepaid
card, both front and back, prior to printing. Frontier will make a
best efforts attempt to review materials and provide written
approval on a timely basis. If prior approval is not received,
Frontier may choose not to activate PINS or terminate agreement.
Frontier will not be held liable for material and/or contract
termination as a result of Distributor not complying with
appropriate approvals.
3.3 Frontier shall have the right to approve all point of purchase and
other marketing material used by Distributor in marketing Frontier
prepaid. Any such approvals required by Frontier will not be
unreasonably withheld or delayed for more than 3 business days.
3.4 DISTRIBUTOR will provide traditional retail venues for promotional
opportunities, (i.e. Ads, demos, tie-ins, etc.) and aggressively
promote the TecDirect/Frontier prepaid card.
3.5 DISTRIBUTOR will pay all invoices by Electronic Funds Transfer on
the day that batches are activated. One (1) batch equals 500 (five
hundred) PINs.
3.6 Frontier shall be solely responsible for development and
implementing the turns and conditions for supplier prepaid purchase
and end user use. Following are the terms and conditions that must
be included with the cards.
3.6.1 Prepayment on toll (card) is provided to you by Frontier
Communications International Inc., hereafter referred to as
"Carrier." By accepting this card, you agree to the terms and
conditions below:
3.6.1.1 (Card) enables you to make domestic and international
calls from within the USA, to over 200 countries
worldwide.
3.6.1.2 Carrier will not be held liable for card credits
and/or call credits in the event of card loss or
unauthorized use.
3.6.1.3 Disclaimer of warranty, except as otherwise provided
in this agreement, the Carrier makes no guarantee,
warranty or representation, expressed or implied,
regarding the condition, merchantibility or fitness
of the information or communications services
offered.
3.6.1.4 Any unused portion of this card will not be refunded.
3.6.1.5 Rates will vary based upon country you are calling
and are subject to change without notice. Using
services other than calling will also deplete the
value of your card. Complete rates are available by
calling the Customer Service number on your card.
4 FORCE MAJEURE
4.1 FCI shall not be liable for any delay or failure of any part of this
Agreement from any cause beyond the control and without its fault or
negligence, including but not limited to, acts of God, acts of civil
or military authority, government regulations, embargoes, epidemic
war, terrorist acts, riots, insurrections, fires, explosions,
earthquakes, nuclear accidents, floods, strikes, power blackout,
severe weather conditions, failure by DISTRIBUTOR to fulfill any of
its obligations under this Agreement, acts of third parties or acts
or omissions of common carriers (collectively referred to as "Force
Majeure Conditions").
5. INDEMNIFICATION AND LIABILITY
5.1 Except as otherwise stated herein, or in FCI's tariffs, each party
(the "Indemnifying Party") will defend, indemnify and hold harmless
the other party (the "Indemnified Party"), its owners, parents,
affiliates, subsidiaries, agents, directors and employees from and
against any loss, cost, claim, award, liability, damage, and expense
(including reasonable attorneys fees) brought or claimed by third
parties, relating to or arising out of the negligence or willful
misconduct of the Indemnifying Party, its employees, agents or
contractors in the performance of this Agreement.
5.2 FCI makes no warranties, expressed or implied, with respect to
services provided in connection with the prepaid product, including,
but not limited to, the implied warranties of merchantibility. FCI
shall have no liability to DISTRIBUTOR with respect to its
obligations under this Agreement for any indirect, special,
consequential or incidental damages of any kind whatsoever, even if
it has been advised of the possibility of such damages.
5.3 Each party shall indemnify and hold the other party harmless from
any and all claims, losses, damages, costs, expenses and reasonable
attorneys' fees incurred by such other party arising from the
failure by the indemnifying party to perform and observe all of the
terms and conditions of this Agreement, including but not limited to
FCI's unreasonable failure to honor in full any and all prepaid
phone services sold by DISTRIBUTOR to its customers.
5.4 FCI shall be responsible for the payment of all applicable taxes and
surcharges related to prepaid calling services and shall indemnify
and hold DISTRIBUTOR harmless therefrom.
5.5 FCI shall comply with all applicable regulatory requirements by any
local, state or federal agencies having jurisdiction over the
prepaid calling card services and shall hold DISTRIBUTOR harmless
therefrom.
6 TERMINATION
6.1 Either party shall have the right to terminate this Agreement
effective upon written notice if:
6.1.1 The other party makes an assignment for the benefit of
creditors;
6.1.2 The other party as adjudicated a bankrupt, either through
voluntary or involuntary proceedings;
6.1.3 A Trustee or receiver of any substantial part of the other
party's assets is appointed by any Court;
6.1.4 The other party makes an unauthorized assignment of this
Agreement;
6.1.5 The other party fails to comply with any provision of the
Agreement and does not correct such failure within thirty
(30) days after written notice of such failure is delivered
to the other party; or
6.1.6 The other party receives a notice of violation of the terms
and conditions of any license or permit required of that
party or its employees in the conduct of that party's
business and fails to correct such violations within thirty
(30) days.
6.1.7 No waiver by a party of any deficiencies in one or more
instances shall constitute a waiver of that party's right to
terminate this Agreement in a subsequent instance.
6.1.8 Termination of this Agreement for any cause shall not release
either party from any liability which at the time of
termination had already accrued to the other party or which
thereafter may accrue in respect of any act or omission prior
to termination, or from any obligation which is expressly
stated herein to survive termination.
7 ASSIGNMENT
7.1 DISTRIBUTOR may not, without the prior written consent of FCI, which
shall not unreasonably be withheld or delayed, assign any right,
obligation or duty, in whole or in part, or any other interest
hereunder. Any such proposed assignee must at a minimum meet all FCI
credit standards then in place. FCI may assign any right,
obligation, or duty, in whole or in part, or any other interest
hereunder, to any of its affiliates without written permission from
DISTRIBUTOR.
8 NOTICES
8.1 Any notices required to be given under this Agreement shall be
deemed to have been given when personally delivered or when mailed
by prepaid registered or certified mail and/or faxed to:
Frontier Communications International, Inc.
180 South Clinton Avenue
Rochester, NY 14646-0600
Attn.: Director of Marketing, Prepaid Calling Cards
and to:
Digitec 2000, Inc.
500 Fifth Avenue
Suite 424
New York, N.Y. 10110
Attn: Diego Roca
9 GENERAL
9.1 This Agreement constitutes the entire understanding between FCI and
DISTRIBUTOR and supersedes any and all oral and/or written
statements and representations made by either party to the other.
9.2 All parts, sections, Exhibits, and Addendum's to this Agreement
shall be considered confidential in all cases for the life of this
Agreement.
9.3 Failure on the part of either party to enforce any provision of this
Agreement in any one instance shall not be considered as a general
waiver or relinquishment of the right to enforce such provision.
9.4 If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall in no way be affected thereby.
9.5 DISTRIBUTOR shall pay the charges for the Services provided
hereunder as specified in any Exhibits and any Addendum to this
Agreement. The charges shown in each Exhibit or Addendum are fixed
for the term of this Agreement or for the term specified in any
Exhibit or Addendum if different than the term of this Agreement.
However, if the action of any governmental authority having
jurisdiction over FCI's service increases FCI's costs in providing
such service, FCI may increase the charges for the affected service.
FCI will provide DISTRIBUTOR sixty days written notice of any
changes. DISTRIBUTOR will then have the right to terminate this
Agreement without penalty with thirty days written notice.
9.6 FCI represents and warrants that:
9.6.1 This Agreement is the legal, valid and binding obligation of
FCI, and is enforceable against FCI in accordance with its
terms, except to the extent that enforceability my be limited
by bankruptcy, insolvency an other similar laws affecting the
enforcement of creditors' rights generally, as well as
general principles of equity limiting the availability of the
remedy of the specific performance.
9.6.2 The execution and delivery by FCI of this Agreement and the
performance by FCI of its obligations hereunder have been
duly authorized by all the necessary corporate action of FCI
and do not and will not violate any judgment, order, decree,
law or regulation applicable to FCI and do not and will not
(I) result in the breach of, or constitute a default under,
or require any consent under any agreement or instrument to
which FCI is a party or by which FCI or any of its properties
may be bound or affected or result in the creation or
imposition of any lies, charge, claim or encumbrance of any
nature upon any of the assets of FCI.
9.6.3 No action, suit or other proceeding is pending or threatened
before any court, tribunal or governmental authority seeking
or threatening to restrain or prohibit, or which could in any
way affect, the performance of FCI's obligations contemplated
by this Agreement.
9.7 DISTRIBUTOR represents and warrants that:
9.7.1 This Agreement is the legal, valid and binding obligation of
DISTRIBUTOR, and is enforceable against DISTRIBUTOR in
accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency and
other similar laws affecting the enforcement of creditors'
rights generally, as well as general principles of equity
limiting the availability of the remedy of specific
performance.
9.7.2 The execution and delivery by DISTRIBUTOR of this Agreement
and the performance by DISTRIBUTOR of its obligations
hereunder have been duly authorized by all the necessary
corporate action of DISTRIBUTOR and do not and will not
violate any judgment, order, decree, law or regulation
applicable to DISTRIBUTOR and do not and will not (I) result
in the breach of, or constitute a default under, or require
any consent under any agreement or instrument to which
DISTRIBUTOR is a party or by which DISTRIBUTOR or any of its
properties may be bound or affected or (ii) result in the
creation or imposition of
any lien, charge, claim or encumbrance of any nature upon any
of the assets of DISTRIBUTOR.
9.7.3 No action, suit or ether proceeding is pending or threatened
before any court, tribunal or government authority seeking or
threatening to restrain or prohibit, or which could in any
way affect, the performance of DISTRIBUTOR'S obligations
contemplated by this Agreement.
9.8 The Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall
become effective when one or more counterparts shall have been
signed by each party and delivered to each other party.
9.9 This Agreement shall be governed in all respects by the law applied
to contracts executed and to be performed in the state of New York.
IN WITNESS WHEREOF, the parties agree that this letter sets forth our complete
Agreement to date and may not be modified except in writing signed by both
parties.
DIGITEC 2000, INC.
By: Frank C. Magliato
Title: Chief Executive Officer and President
Date: November 12, 1996
Signature: /s/ Frank C. Magliato
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FRONTIER COMMUNICATIONS INTERNATIONAL INC.
By: David Dodge
Title: District Sales Manager
Date: November 12, 1996
Signature: /s/ David Dodge
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