EXHIBIT 10.15
ILD TELESERVICES, INC.
UNBUNDLED OPERATOR SERVICE AGREEMENT
This OPERATOR SERVICE AGREEMENT (the "Agreement") is made this 31st day of
August, 1997, effective (the "Effective Date") by and between ILD
TELESERVICES, INC., a Delaware corporation ("ILD"), having its principal
place of business at 00000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, XX 00000, and
WORLDCOM, INC., a Georgia corporation ("Customer"), having its principal
place of business at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx, XX 00000.
TERMS
Subject to the terms and conditions set forth in this Agreement, ILD agrees
to provide Operator Services, as herein defined, to Customer's subscribers.
For the purposes of this Agreement, Operator Services shall constitute
international and domestic: (i) live operator assisted and automated
operator assisted calls which are charged to major commercial credit cards or
to billable calling cards, are collect calls, or are billed to a third-party
("Traffic"), (ii) call rating, and (iii) xxxx outclearing services. Operator
Services specifically exclude any costs of originating and terminating
transmission, billing services handled by a Local Exchange Carrier ("LEC") or
other external billing entity. Customer shall be responsible for all LEC or
external billing costs and all bad debt or unbillables associated with
billing such Traffic and shall be responsible for providing originating and
terminating transmission for such Traffic. Traffic shall be rated and billed
by ILD at the rates provided by Customer. The Traffic shall be delivered to
ILD in a format reasonably designated by ILD.
1. BILLING OPTIONS.
Customer will be responsible for submitting Traffic to ILD which Traffic
may be billed by Customer's subscribers under any of the following billing
options:
(a) Billing to approved telephone company calling cards as to which
ILD or its agents have a billing and collection and validation
agreement;
(b) Collect billing (domestic and international locations selected by
Customer);
(c) Third-party billing;
(d) Billing to approved credit cards (AMEX, Visa, MC, etc.) with
which ILD or its agents have a billing and collection agreement;
or
1
(e) Other billing arrangements as may be mutually agreed to by ILD and
WorldCom.
2. TERM OF AGREEMENT; RIGHT OF FIRST REFUSAL.
(a) The term of this Agreement shall commence on the date set forth
above and shall continue in full force and effect for a period of
sixty (60) months (the "Original Term") unless otherwise
terminated pursuant to this Agreement.
(b) Prior to expiration of the Original Term, the parties agree to
negotiate in good faith concerning the extension of the Agreement
and/or modification of the terms and conditions contained herein.
In the event the parties do not arrive at a mutually acceptable
agreement, Customer may solicit competitive offers for such
Traffic. Upon Customer's receipt of a bona fide competitive
offer for Operator Services substantially similar to those
provided for under this Agreement to commence after the
expiration of the Original Term or any extensions thereto
("Offer"), Customer will present such Offer to ILD in written
form and provide ILD five (5) business days to match the terms
and conditions of such Offer. In the event ILD agrees to match
the terms and conditions of such Offer, Customer and ILD will
modify this Agreement to take into account the terms and
conditions of such Offer. In the event ILD fails to match such
Offer within five (5) business days, Customer may obtain such
Operator Services from such third party on the terms of such
Offer upon expiration of this Agreement.
(c) Upon expiration of the Original Term, or any extensions thereto
unless otherwise agreed to in writing by the parties, this
Agreement shall automatically renew on a month to month basis
(terminable by either party upon 30 days written notice) under
the same terms and conditions as set forth herein.
3. TRAFFIC REQUIREMENTS.
While this Agreement is in effect, Customer agrees to route all Available
Calls, as herein defined, to ILD. For purposes of this Agreement,
Available Calls shall be defined as all Traffic generated from Customer's
international and domestic subscribers except the following:
(a) Traffic which state regulations require to be routed to the local
exchange carrier;
2
(b) Traffic which is required by existing contract (i.e., existing as of
the Effective Date) to be routed to another carrier or operator
services provider as listed on EXHIBIT A;
(c) Any other Traffic mutually agreed upon in writing between the parties
as listed on EXHIBIT B which may be modified from time to time by
mutual written consent.
(d) Traffic of businesses acquired by Customer (whether by merger,
purchase of stock or purchase of assets) which is under contract
to be routed to another carrier or operator services provider.
4. COMPENSATION AND PAYMENT
(a) COMPENSATION.
(i) In consideration for the Domestic Operator Services provided by
ILD to Customer, Customer agrees to pay ILD the following amount for
each completed call processed by ILD in the respective months listed:
Monthly Period Percentage of Call Value (as defined below)
-------------- -------------------------------------------
1 - 12 ***%
13 - 60 As shown in * below
For the purposes of this Agreement, Call Value shall be defined as the
actual rate charged to Customer's subscribers, excluding applicable taxes,
for each completed call.
* Live Operator Attempt $***
Automated Operator Attempt $***
Validation Attempt $***
Outclearing Services (Completed Call) $***
Call Rating $***
LEC and other External Billing Costs ***
(ii) In consideration for the International Operator Services provided
by ILD to Customer, Customer agrees to pay ILD the following amount for
each service:
*** Confidential information ommitted
3
Live Operator Attempt (Cuba) $***
Live Operator Attempt (Mexico) $***
Automated Operator Attempt $***
Validation Attempt $***
Call Processing (call rating, call record formatting $***
and editing and xxxx outclearing services)
LEC and other External Billing Costs ***
The parties agree that services to be provided by ILD to any new
countries added to Customer's existing international customer base of
Cuba and Mexico shall be priced by mutual agreement of Customer and
ILD determined in good faith on the facts and circumstances of
servicing such countries.
(b) TIMING OF PAYMENT. Charges for the Operator Services shall be due
and payable within thirty (30) days following the end of the month
in which such Operator Services were rendered (the "Due Date"). ILD
will utilize its best efforts to invoice such Operator Services
within fifteen (15) days following the end of the month in which such
Operator Services were rendered. In no event will the Due Date for
Operator Services be extended beyond thirty (30) days following the
month in which such Operator Services were rendered without prior
written authorization by ILD.
In the event Customer does not pay for such Operator Services with
fifteen (15) days from the Due Date, ILD will assess a finance charge
equal to the amount of such delinquent payment multiplied by a monthly
interest factor of one and one-half percent (1.5%) for each month or
portion of a month in which such amount remains unpaid past the Due
Date, unless such interest factor is in excess of the amount allowable
by law, in which case ILD will assess the greatest interest factor
allowable by law.
5. WARRANTIES OF CUSTOMER.
(a) Customer represents and warrants the following related to casual and
international operator services:
(1) Monthly average call volume and call value for November 1996,
December 1996, and January, 1997, were as follows:
*** Confidential information ommitted
4
Average Call Volume/
Month Average Call Value
------- ------------------
Domestic 750,000 $***
International 50,000 $***
(2) As of March 1, 1997, Customer was not aware of any fact or
circumstance in existence, or with substantial likelihood of
occurrence, which would cause the average call volume or call
value to materially decline over the next two (2) years.
(b) Customer warrants that the undersigned has the full authority to
execute this Agreement and bind Customer to the terms and provisions
hereof.
(c) Customer agrees to use its best commercial efforts to only route
traffic to ILD that ILD is allowed to complete by the appropriate
regulatory bodies. Customer agrees that it will abide by all
applicable state and federal rules and regulations.
6. WARRANTIES OF ILD.
ILD agrees to use its best efforts to provide Operator Services in
accordance with industry standards (including the standards set forth on
Exhibit C) and to provide a high degree of operator skills in the provision
of those Operator Services including but not limited to, reasonable work
time, courtesy of operators and accuracy of information provided by ILD
operators. ILD agrees that all Operator Services shall be provided in
accordance with all applicable laws, requirements and standards established
by federal, state and local laws. Customer acknowledges that the standards
set forth on Exhibit C are consistent with standards of the existing
business and, with respect to calls provisioned and maintained at call
centers handled by EDS, consistent with the standards of the EDS Services
Agreement assumed by ILD.
7. PROPRIETARY INFORMATION.
Except as required by law or governmental authority, both parties to this
Agreement agree that all information acquired, directly and indirectly, by
either party during the Original Term of this Agreement or any extension or
renewal period, concerning the business affairs and operations of the other
party, is deemed confidential and proprietary to such party and will be
held in trust and confidence by the receiving
*** Confidential information ommitted
5
party, its successors and assigns, and the receiving party shall have an
absolute duty to maintain in confidence such information and prevent
disclosure to other parties. Both parties further agree to take reasonable
steps necessary to ensure that all of its agents, servants, and/or
employees, who have access to such information, shall adhere to the
provisions of this Section. Each party agrees that any violation of this
Section shall cause immediate and irreparable harm to the other party and,
in such event, an injunction restraining such party from such violation may
be entered against it by the other party, in addition to any other relief
available to such other party.
8. INDEMNIFICATION AND RELEASE.
(a) Customer agrees to indemnify and hold harmless ILD from and
against, any and all expenses (including reasonable attorney's
fees), claims and damages of every kind whatsoever, including,
but not limited to, damages for injury to or death of any person
or persons and for damage to or loss of any property, arising out
of or attributed, directly or indirectly, to the Operator
Services provided by ILD unless such claim or damages are due to
ILD's gross negligence.
(b) IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR
ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE LOSS
OR DAMAGE OF ANY KIND, INCLUDING LOST PROFITS WHETHER OR NOT SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE,
BY REASON OF ANY ACT OR OMISSION IN ITS PERFORMANCE UNDER THIS
AGREEMENT.
9. DEFAULT OF CUSTOMER.
Customer shall be in default under this Agreement upon the occurrence of
any one or more of the following events:
(a) Customer breaches any obligation or warranty under this
Agreement, and such breach continues for a period of fifteen (15)
days after written notice from ILD unless such breach relates to
Section 4(b) in which case the breach continues for a period of
five (5) days after written notice from ILD;
(b) Customer makes a general assignment for the benefit of creditors;
6
(c) Customer terminates this Agreement other than pursuant to Section
2 prior to the expiration of the Original Term or renewal period,
if any; or
(d) Bankruptcy, reorganization, liquidation, or receivership
proceedings are instituted by or against Customer and Customer
consents thereto or fails to cause such proceedings to be
discharged within thirty (30) days.
Upon default as described in this Section 9, ILD may terminate this
Agreement; provided, however, if such default in this Section 9 arises by
Customer's breach of its covenant in Section 3 hereof, then ILD may pursue
any remedies available to it as contemplated herein or by law.
10. DEFAULT BY ILD.
ILD shall be in default under this Agreement upon the occurrence of any of
the following events:
(a) ILD breaches any obligation under this Agreement (including failure to
provide the Operator Services in accordance with the standards
described in Section 6) and such breach continues following receipt by
ILD of written notice from Customer thereof for ten (10) days unless
ILD has taken reasonable steps within such period to correct such
breach;
(b) ILD makes a general assignment for the benefit of creditors, suspends
business, or commits any act amounting to business failure; or
(c) Bankruptcy, reorganization, liquidation, or receivership proceedings
are instituted by or against ILD and ILD consents thereto or fails to
cause such proceedings to be discharged within thirty (30) days.
Upon default as described in this Section 10, Customer may terminate
this Agreement without further liability except for payment for
Operator Services up to the date of termination.
11. MISCELLANEOUS.
(a) The parties acknowledge that concurrent herewith the parties are
executing a Billing Services Agreement.
7
(b) All rights and remedies under this Agreement are cumulative and
not exclusive. Failure to exercise any right or remedy shall not
be construed as waiver thereof or as excusing the other party
from future performance in accordance with the terms of this
Agreement.
(c) In the event the performance by either party of any of its
respective obligations or undertakings hereunder shall be
interrupted or delayed by any occurrence and not occasioned by
the conduct of such party, whether such occurrence be an act of
God or the common enemy or the result of war, riot, civil
commotion, sovereign conduct, or the act or conduct of any person
or persons not party or privy hereto, then such party shall be
excused from such performance for such a period of time as is
reasonably necessary after such occurrence to remedy the effects
thereof.
(d) If any legal action is brought by either of the parties hereto,
it is expressly agreed that the party in whose favor final
judgment shall be entered shall be entitled to recover from the
other party reasonable attorneys' fees in addition to any other
relief which may be awarded.
(e) The obligations and undertakings of each of the parties to this
Agreement shall be performable in Dallas County, Texas and it is
therefore agreed that any cause of action or suit based upon this
Agreement may be brought in Dallas County, Texas.
(f) This Agreement may be modified in a writing signed by both
parties.
(g) If any clause or provision of this Agreement is illegal, invalid
or unenforceable under present or future laws, it is the
intention of the parties hereto that the remainder of this
Agreement shall not be affected thereby. It is also the
intention of the parties to this Agreement that in lieu of each
clause or provision of this Agreement that is illegal, invalid or
unenforceable, there shall be added as a part of this Agreement a
clause or provision as similar in terms to such illegal, invalid
or unenforceable clause or provision as may be possible and be
legal, valid and enforceable.
(h) This Agreement shall be governed by and construed in accordance
with the law of the State of Texas.
8
(i) ILD may not assign its rights or delegate its obligations
hereunder, without the prior written consent of the Customer,
which consent shall not be unreasonably withheld.
Notwithstanding anything in this Section 11(i) to the contrary,
ILD may assign its rights and obligations under this Agreement to
its senior secured lender or to its wholly-owned subsidiary
without the prior written approval of Customer provided such
assignment shall not relieve ILD from its duties and obligations
hereunder..
(j) This Agreement shall be binding upon and inure to the benefit of
the successors and assigns, if permitted, of the respective
parties hereto.
(k) Any notices required by this Agreement shall be in writing and
may be sent by registered or certified mail, return receipt
requested or by facsimile. Notice to ILD shall be sufficient if
made and addressed to the parties at the respective addresses
listed:
ILD: and to Customer:
ILD Communications, Inc. WorldCom, Inc.
00000 Xxxxxxxx Xxxxxxx Xxxxxx 000 Xxxx Xxxxx Xxxxxx
Xxxxx 0 Xxxxxxx, XX 00000
Xxxxx Xxxxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx Attn: K. Xxxxxxx Xxxxxx, Xx.
Chairman Vice President, Corporate Development
Fax: (000) 000-0000 Fax: (000) 000-0000
Xxxxxx Xxxxxxxxxxxx
President
Fax: (000) 000-0000
Any such notice shall be effective on receipt by the sending
party of confirmation of such facsimile, or three days following
the deposit of such notice with the United States Postal Service.
Each party may change the address for notice to it by giving
notice of such change in accordance with the provisions of this
Section.
9
(l) It is expressly understood and agreed that Customer is not an
agent, employee, nor legal representative of ILD and, unless
specifically authorized in writing to do so, may not incur any
obligations on behalf of or in the name of ILD.
[SIGNATURES ON NEXT PAGE]
ILD TELESERVICES, INC. WORLDCOM, INC.
BY: /s/ Xxxxxx Xxxxxxxxxxxx BY: /s/ K. Xxxxxxx Xxxxxx
----------------------------------- ---------------------------------
TITLE: President TITLE: Vice President
-------------------------------- ------------------------------
DATE: 8/31/97 DATE: 8/31/97
--------------------------------- -------------------------------
10
