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Exhibit 10.18
USFI PROVIDER RESELLER AGREEMENT
USFI PROVIDER RESELLER AGREEMENT (the "Agreement"), dated as
of March 4, 1997, by and among USFI Network K.K., a corporation organized under
the laws of Japan ("USFI"), A.T. Net K.K., a corporation organized under the
laws of Japan ("Reseller") and Asahi Telecom Co., Ltd., a corporation organized
under the laws of Japan ("Asahi"):
WHEREAS, USFI provides Direct Dial Telephone Services and
custom applications;
WHEREAS, Reseller desires to utilize USFI's services
exclusively for the transmission of its CUSTOMERS' telephone calls to
international points; and
WHEREAS, USFI and Reseller desire to enter into this Agreement
on the terms and conditions hereinafter set forth, including the attachments
hereto which are incorporated by reference and made a part hereof,
NOW, THEREFORE, in consideration of the mutual agreements and
understandings herein contained, the parties hereby agree as follows:
1. The Services Provided by USFI
1.1 USFI agrees to provide international telephone
services to Reseller in accordance with the terms and conditions of this
Agreement to the countries set forth in Attachment 1.
1.2 USFI will endeavor to accommodate Reseller's
international call volume provided that Reseller provides USFI with sufficient
advance notice of its capacity requirements.
1.3 USFI, at its expense, together with its
connecting carriers, will install, provide, operate and maintain facilities,
consisting of computer hardware and software, switching equipment and
transmission equipment (the "facilities") so as to provide telephone services
between USFI's designated switch and the international destinations.
2. Rates and Charges
2.1 USFI will provide service to Reseller from USFI's
designated switch site to the countries listed in Attachment 1 (List of Rates
and Countries) at the rates set forth in said Attachment.
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2.2 Reseller acknowledges and agrees that USFI may,
upon reasonable notice, change or modify from time to time its rates (including
available discounts), other terms, and its general policies; provided, that, no
increase in rates may be imposed except for increases that are commensurate with
increases in the underlying carrier's charges. For purposes of this paragraph,
"reasonable notice" shall mean the minimum required notice for international
tariffs filed under Federal Communications Commission of the United States. USFI
will notify Reseller promptly of any such changes.
2.3 Reseller will be obligated to pay for all
telephone transmissions via the facilities and for all other charges in
accordance with Attachment 1. Each call will be billed in increments consistent
with the standards of Japanese carriers. For purposes of this Agreement, the
time of each call will begin when the answer supervision is returned to USFI by
the overseas administration or local telephone company indicating that the call
has been answered and will end when the supervision is returned indicating that
the caller has disconnected.
3. Duties of Reseller
3.1 Reseller is solely responsible for establishing
its customer charges and billing its customers for international direct dial
telephone services provided via the facilities, and for all applicable taxes
associated therewith.
3.2 Reseller will pay all of its own operating
expenses, and other expenses including applicable taxes and fees.
3.3 Reseller will be responsible for the payment of
all sums owed to USFI pursuant to this Agreement regardless of whether Reseller
has been paid for such charges by its customers. Reseller acknowledges that USFI
will not be liable for any losses or damages suffered by Reseller or any of its
customers in connection with the incurrence of such charges.
4. Term of Agreement
Unless terminated earlier by either party in
accordance with the provisions hereof, this Agreement shall have a term of six
(6) years commencing on the date set forth on the first page of this Agreement.
Thereafter, the term of this Agreement will be automatically renewed for
successive terms of one year each unless either party provides written notice of
its intent not to renew this Agreement at least thirty (30) days prior to the
expiration of the then current term.
5. Termination
5.1 Either party may terminate this Agreement upon
written notice to the other party in the event of a failure by such other party
to perform any of its material
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obligations hereunder and the continuation of such failure for a period of 30
days after written notice thereof, provided that the terminating party is not
then in breach of its material obligations hereunder, and provided further that
no notice of termination shall relieve either party of any obligations arising
or accruing hereunder prior to the date of such notice.
5.2 Notwithstanding anything in this Agreement to
the contrary, the failure of USFI to provide services to Reseller hereunder
shall not constitute grounds for termination of this Agreement where such
failure arises out of or is attributable to equipment failure, accident,
regulatory, judicial or other governmental action or inaction, war, vandalism,
civil riot or commotion, work stoppage or slowdown or other labor disturbance,
destruction of facilities, fire, earthquake, storm, or the failure of any common
carrier or utility, for any reason, to provide adequate carriage, transmission
or other services to USFI or any of its affiliates, provided that such failure
is cured within thirty days after the occurrence, if such event is temporary in
nature, of the event or condition giving rise to such failure, or if such
failure is incapable of being cured within such thirty day period, that USFI has
undertaken diligent efforts to cure such failure as soon as practicable.
6. Relationship of Parties
6.1 It is expressly understood and agreed that
Reseller is an independent contractor, shall not represent itself as having any
power to bind USFI, shall not hold itself out as an employee or agent of USFI
for any purpose, and shall not assume or create any obligation whatsoever,
expressed or implied, on behalf of USFI. Nothing in this Agreement shall be
deemed to establish a relationship of agency between USFI and Reseller nor with
any of their agents or employees for any purpose whatsoever. This Agreement
shall not be construed to create a partnership between USFI and Reseller, or any
other form of legal association or arrangement which would impose liability upon
one party for the act or failure to act of any other party, or which would
require the parties to file taxes jointly.
6.2 As an independent contractor, Reseller shall be
responsible for all liabilities incurred in connection with the conduct of its
business or the offering of USFI's services to its customers, including but not
limited to, all income and franchise taxes on the compensation it receives, as
well as all of its employees' employment taxes, insurance and fringe benefits.
Reseller shall indemnify and hold USFI harmless from and against any and all
such liabilities.
7. International Services Provider
7.1 Reseller agrees that except in the circumstances
hereinafter described in this paragraph, USFI and any successor thereto or
affiliate thereof (collectively the "USFI Group") shall be the provider to
Reseller, Asahi and any successor thereto or affiliates thereof (collectively,
the "A.T. Net Group") of international long distance services ("International
Services").
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7.2 Notwithstanding the provisions of Paragraph 7.1:
(a) if the USFI Group is unable to process
calls due to the fact that no electricity passes through the USFI-Group's switch
("system failure"), the A.T. Net Group shall be entitled to switch customers to
some other carrier during the time the USFI Group is unable to process calls.
Such switching shall cease (and the customers returned to the USFI Group) at
such time as a member of the USFI Group shall have given Reseller notice (which
need not be in writing) that the system failure has been corrected;
(b) in the event of a problem concerning the
quality of International Services, a member of the USFI Group will discuss such
matter with Reseller with a view to resolving it promptly;
(c) if any of KDD, IDC or ITJ offer to
Reseller or Asahi international rates that are lower than those offered by the
USFI Group, the USFI Group shall have the right to either match those rates or
decide to utilize such other carrier itself and the parties will discuss and
decide how the savings gained shall be allocated; and
(d) if any customer of the A.T. Net Group in
the domestic market demands that its international calls be carried by a
provider other than a member of the USFI Group, the A.T. Net Group shall be
entitled, in its discretion, to route such customer to the international carrier
designated by such customer; provided, that, when the revenues from such "other"
carrier customers that would have accrued to the USFI Group if such customers
had not designated an "other" carrier exceed 30% (or, from and after the date
that A.T. Net closes a public offering of its shares, 50%) of the quarterly
gross revenues to the USFI Group from the A.T. Net Group signed customers, the
advance consent of a member of the USFI Group to the provision of an "other"
carrier to such customers exceeding 30% (or, from and after the date that A.T.
Net closes a public offering of its shares, 50%) shall be required. Such consent
will be provided or not provided in the good faith discretion of the USFI Group.
Upon request the A.T. Group will provide a member of the USFI Group access to
the appropriate records to verify the foregoing amounts.
7.3 Subject to the provisions of Paragraph 7.4,
paragraph 13 of the USFI Provider Reseller Agreement, entitled "Limitations of
Liability", shall apply to the provision of International Services as if
specifically set forth herein at length.
7.4 If, in accordance with the provisions of
Paragraph 7.2(a) above, the A.T. Net Group switches customers to other carriers
as a result of a system failure, the following provisions shall apply:
(a) The A.T. Net Group shall be required to
give written notice to USFI of the switching indicating the period thereof, the
name of the alternate carrier used and the rates charged by it.
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(b) The A.T. Net Group will be required to
use an alternate carrier that is the lowest cost provider available.
(c) USFI-Japan agrees to reimburse A.T. Net
for 70% of its incremental cost (that is, the difference between the rates
payable by the A.T. Net to USFI-Japan and the rates, if higher, paid by the A.T.
Net Group to the alternate carrier) in using the alternate carrier for as long
as the system failure continues except that USFI-Japan shall have no liability
(i) if the system failure is attributable to a force majeure event of a type
described in Paragraph 13.2 of the Reseller Agreement or (ii) if interruptions
in service, for maintenance, do not exceed six (6) hours per month. USFI-Japan
agrees to give A.T. Net advance notice of the periods during which the system
will be shut down for maintenance.
(d) USFI-Japan shall have the option, in its
sole discretion, to be released from the liability provisions set forth in
Paragraph 7.4(c) above by releasing the A.T. Net Group from the provisions of
Paragraph 7.1 above.
8. TelePassport Name and Logo
Reseller acknowledges and agrees that the
"TelePassport" name and logo is the property of USFI and its affiliates.
Reseller agrees to use its best efforts to cause (i) the TelePassport logo to be
clearly displayed on its invoices to customers and (ii) such invoices to clearly
state that TelePassport is the provider of international long distance service.
Such display will be submitted to USFI for prior approval.
9. Payment Terms
9.1 USFI shall invoice Reseller on a monthly basis.
All payments hereunder are due and payable in full within thirty (30) days after
date of invoice.
9.2 All payments under this Agreement shall be made
in the currency of the invoice to an account designated by USFI. All past due
balances shall bear interest at an annual rate of eighteen percent (18%) or, if
lower, the maximum rate permitted by applicable law from the due date until paid
in full.
10. Taxes
Any and all applicable federal, state or local use,
excise, sales or privilege taxes, duties or similar liabilities, chargeable to
or against USFI and arising out of or attributable to the services provided to
the Reseller hereunder shall be charged to and payable by the Reseller in
addition to the regular rates set forth in Attachment 1.
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11. Suspension of Service
11.1 Except for material charges under dispute
subject to resolution herein, if payment in full of any invoice is not made by
Reseller within sixty (60) days after the date of the invoice therefor, USFI
shall have, in addition to all other rights available to it under this Agreement
or otherwise, the right, effective three (3) business days after written notice
of the same is given to Reseller, to suspend any or all services provided
hereunder to Reseller until payment is made. "Business days" as defined herein
relates to days in which the banks in Tokyo are open for business.
11.2 After the effective date of suspension, Reseller
has five (5) business days to cure suspension of service though payment in full
of invoice, in which case service will be restored promptly; otherwise, this
Agreement may be terminated by USFI while reserving all rights to collection
under this Agreement.
12. Dispute Resolution
The parties shall co-operate to investigate promptly
any dispute concerning the accuracy of any billing data, rates or any amount
payable under this Agreement. In the event of the parties being unable to reach
agreement ten (10) business days after the date upon which the relevant invoice
or portion thereof is due for payment and the dispute is material, then the
following procedure shall be followed:
12.1 In good faith, the complainant shall provide the
other party with written notification of the existence of the dispute, which
will include details of the nature and magnitude of the dispute, date(s) when
the dispute began and recommendations in order to resolve the dispute.
12.2 Upon receipt, the other party shall respond
within ten (10) business days of receipt of the dispute notice, endeavor to
address and respond to the points raised by the complainant with recommendations
on how to resolve the dispute, and notify accordingly the complainant.
12.3 On receipt of a response by the other party, the
complainant shall have fourteen (14) days in which to respond. Any resolution to
the dispute will be retroactive to the date of the first day of notification by
the complainant.
12.4 Both parties will endeavor to resolve any
dispute, including but not limited to addressing this dispute to a higher level
executive, if necessary.
12.5 Absent any resolution herein, both parties may
agree to terminate this Agreement with ninety (90) days notice or, in the
absence of such an agreement, such dispute shall be litigated in accordance with
the provisions of Paragraph 18 hereof.
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13. Limitations of Liability
13.1 USFI SHALL HAVE NO LIABILITY FOR ANY COSTS,
DAMAGES, OR CHARGES ARISING FROM THE RENDERING OF ADVICE IN CONNECTION WITH THE
LOCAL OPERATING ENVIRONMENT, TAX, SALES, PRICING, MARKETING, OR BILLING MATTERS,
OR ANY OTHER MANAGEMENT OR CONSULTING SERVICES, OR 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 SWITCHED OR PRIVATE LINE SERVICES OR ANY OTHER TELECOMMUNICATIONS
SERVICES.
13.2 NEITHER USFI NOR ANY OF ITS EMPLOYEES, OFFICERS,
SHAREHOLDERS, DIRECTORS AND AFFILIATES SHALL HAVE ANY LIABILITY TO RESELLER OR
TO ANY OTHER PERSON OR ENTITY WHATSOEVER FOR ANY COSTS, DAMAGES, OR CHARGES
SUFFERED OR INCURRED, INCLUDING, WITHOUT LIMITATION, LOST PROFITS AND
INCIDENTAL, ACTUAL OR PUNITIVE DAMAGES, ON ACCOUNT OF ERRORS, INTERRUPTIONS,
DELAYS, FAILURES OR DEFECTS OF ANY NATURE WHATSOEVER IN THE TRANSMISSION OF
SERVICES PURSUANT TO THIS AGREEMENT, WHETHER OR NOT ARISING OUT OF OR RELATED TO
ERRORS, OMISSIONS, ACCIDENTS, REGULATORY, JUDICIAL OR OTHER GOVERNMENTAL ACTION
OR INACTION, ILLEGALITY, ACTS OF GOD, WAR, VANDALISM, CIVIL RIOT OR COMMOTION,
WORK STOPPAGE OR SLOWDOWN OR OTHER LABOR DISTURBANCE, DESTRUCTION OF FACILITIES,
OR THE FAILURE OF ANY COMMON CARRIER OR UTILITY, FOR ANY REASON, TO PROVIDE
ADEQUATE CARRIAGE, TRANSMISSION OR OTHER SERVICES TO USFI OR ANY OF ITS
AFFILIATES.
13.3 USFI HEREBY DISCLAIMS ANY AND ALL WARRANTIES,
EXPRESS AND IMPLIED, AND MAKES NO REPRESENTATIONS, AS TO THE DESCRIPTION,
QUALITY, MERCHANTABILITY, COMPLETENESS OR FITNESS FOR ANY PURPOSE WHATSOEVER OF
ANY OF THE SERVICES PROVIDED HEREUNDER.
14. Protection of Confidential Information and Proprietary
Property
14.1 Reseller and USFI agree that, except as required
by the rules and regulations of the United States Federal Communications
Commission or any other governmental authority having jurisdiction, Reseller
will, during the term of this Agreement and thereafter, keep secret and retain
in the strictest confidence, and cause its employees, agents and/or
representatives to keep secret and retain in the strictest confidence, all
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proprietary information relating to or provided by USFI, including, without
limitation, trade secrets, "know-how", lists, rates, pricing policies, and any
other business information pertaining to the business of USFI.
14.2 Reseller acknowledges and agrees that it shall
not have any right to, nor will it, use any of the trade names, trademarks or
other proprietary rights of USFI without written permission from USFI. Nothing
in this clause should be construed as limiting Reseller from naming USFI as its
supplier, or from using such fact in its promotions, provided that all
promotional materials identifying, describing or referring to USFI in any manner
shall be submitted to USFI for approval prior to dissemination, publication, or
use thereof.
15. Compliance with Laws
Reseller shall, at its expense, secure and maintain
in full force and effect any and all licenses, permits and authorizations, and
make all reports and other filings, which are required or otherwise appropriate
in connection with the provision of services pursuant to this Agreement, and
shall take any and all other actions necessary to ensure that the provision of
telephone services pursuant to this Agreement and to customers of Reseller, does
not violate or conflict with any applicable law, rule or regulation of any
governmental or quasi-governmental authority having jurisdiction over the
subject matter hereof. Reseller's liability for charges incurred hereunder is
absolute and shall not be affected by any such violation or any failure by
Reseller to comply with the provisions hereof.
16. Indemnity
Except as otherwise provided in this Agreement,
Reseller and USFI shall each indemnify and hold the other harmless from and
against any and all liabilities, costs, damages and expenses, including without
limitation attorneys' fees and disbursements, incurred by reason of or arising
out of or attributable to the breach by such party of any provision hereof or
the failure by such party to perform any of its obligations hereunder.
17. Governing Law
This Agreement shall be governed and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such State.
18. Litigation
Subject to the provisions of Paragraph 12, the
parties agree that the Tokyo District Court shall have the exclusive
first-instance jurisdiction over all disputes or controversies arising out of or
in conjunction with this Agreement. The prevailing party in
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any such litigation shall be entitled to an award of its reasonable attorneys'
fees, costs and disbursements.
19. Notices
All notices or other communications required or
provided herein shall be in writing and if (i) from a member of the USFI-Group
to a member of the A.T. Net Group shall be in Japanese and (ii) from a member of
the A.T. Net Group to a member of the USFI-Group shall be in English, and in
each case shall be deemed given five (5) days after mailing, if mailed by
certified mail, registered mail, return receipt requested, postage prepaid, or
on the date of delivery if delivered personally or by a reputable overnight
courier, or on the date of facsimile transmission, if transmitted by telecopier,
in each case addressed to the party for whom intended as follows (or to such
other address as may be given by notice in accordance with this Paragraph 19):
To USFI: USFI Network X.X.
Xxxxxxx Building, Fifth Floor
0-00-00 Xxxxx,
Xxxxxxx-xx, Xxxxx 000
XXXXX
Attention: Xxxxxxx Xxxxxxx
Telecopier: (00) 0000-0000
To Reseller: A.T. Net K.K.
Asahi Telecom Building 0-0-00
Xxxxxxxxxx-Xxxxxxxxx
Xxxx-xx, Xxxxx 000
Xxxxx
Attention: Xxxxxx Xxxxxx
Telecopier: (00) 0000-0000
20. Assignment
20.1 This Agreement shall not be transferable or
assignable by Reseller, nor shall Reseller have the right to hire or contract
with any agents, representatives, or employees to perform its obligations under
this Agreement, without the prior written consent of USFI. Any other purported
transfer or assignment shall render this Agreement null and void at the election
of USFI. This Agreement may be assigned by USFI without the consent of Reseller
to any subsidiary or affiliated company of USFI or to any other firm.
20.2 Nothing expressed herein or implied hereby is
intended or shall be construed to confer upon or give to any person or entity
other than USFI and Reseller and
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their respective successors and permitted assigns any rights or remedies by
reason of this Agreement.
21. Representations
Reseller represents and warrants that it has all
requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, that all such action has been duly and
validly authorized by all necessary proceedings, and that this Agreement
constitutes the legal, valid and binding obligation of Reseller, enforceable in
accordance with its terms, except that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights. Reseller further represents
and warrants that the execution and delivery of this Agreement, the performance
by Reseller of its obligations hereunder and the provision of the services
provided hereunder to its own customers, will not violate or be in conflict with
any statute, law or any judgment, decree, order, regulation or rule of any court
or governmental authority.
22. Integration
This Agreement constitutes the entire agreement
between USFI and Reseller concerning the subject matter contained herein and
supersedes any and all prior agreements between the parties with respect to such
subject matter. In entering into this Agreement, neither Reseller nor USFI is
relying upon any representations or warranties which are not set forth in this
Agreement.
23. Unenforceable Provisions
In case any provision in this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions hereof will not in any way be affected or impaired
thereby.
24. Modification and Waiver
This Agreement may be amended only by a written
instrument which references this Agreement and which is signed by all
signatories to this Agreement. No waiver of any term or condition of this
Agreement shall operate as a continuing waiver nor shall any failure to enforce
any provision hereof operate as a waiver of such provision or any other
provision hereof.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
USFI Provider Agreement as of the date above written.
USFI NETWORK K.K.
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
President
A.T. NET K.K.
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
President
ASAHI TELECOM CO., LTD.
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
Executive Vice President
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USFI PROVIDER RESELLER AGREEMENT
ATTACHMENT #1
(omitted)
