CARRIER SERVICE AGREEMENT
CARRIER SERVICE AGREEMENT ("Agreement"), dated May 29, 1998, by and between
Flat Rate Communications, Inc., a Colorado corporation, with its headquarters
located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("FRC"), and Cybertel
Communications Corporation, a Nevada Corporation, with its principal offices
located at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000 Xx Xxxxx, XX 00000 ("Customer").
RECITALS
FRC is engaged in the business of providing certain telecommunications and
other enhanced telecommunications services as more fully described on the
schedules attached hereto (the "Services"). Customer desires to purchase from
FRC, and FRC desires to sell to Customer, such Services, in accordance with
the terms and conditions set forth in this Agreement.
ACCORDINGLY, in consideration of the mutual covenant in this Agreement and
intending to be legally bound, the parties agree as follows:
ARTICLE 1
PROVISION OF SERVICES
FRC agrees to sell and Customer agrees to purchase the Service(s) set forth on
the Schedule(s) attached hereto, which schedules may be amended or
supplemented from time to time in accordance with the terms hereof.
ARTICLE 2
TERM AND TERMINATION
2.1 Term and Termination. (a) Subject to Section 2.1(b) hereof, this
Agreement shall commence on the date hereof (the "Effective Date") and shall
terminate on the anniversary date hereof, provided, however, that if neither
party provides written notice terminating the Agreement to the other party at
least thirty (30) days before each anniversary of the Effective Date, this
Agreement shall be renewed on a month-to-month basis.
(b) This Agreement may also be terminated upon the occurrence of any of
the following events:
(1) By either party, upon at least ten (10) days' prior written
notice (a) if the other party commits a material breach of this Agreement
(other than non-payment) and such breach has not been remedied by the date
specified in such notice, such specified date to be no earlier than ten (10)
days after the date of the notice or (b) of a determination by any
governmental authority with jurisdiction over the parties, that the provision
of the Services under this Agreement is contrary to existing laws, rules or
regulations.
(2) By FRC upon at least three (3) business days' written notice, if
Customer fails to pay any amount due to FRC under this Agreement after three
(3) calendar days from the Due Date (as hereinafter defined) and Customer
fails to pay the amount due within two (2) business days of each notice.
(3) By either party, upon ten (10) business days' written notice, if
the other party (A) ceases doing business as a going concern, makes an
assignment for the benefit of creditors, admits in writing its inability to
pay its debts as they become due, files a voluntary petition in bankruptcy, is
adjudicated a bankrupt or an insolvent, files a petition seeking for itself
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar arrangement under any present or future statute, law or
regulation or files an answer admitting the material allegations of a petition
filed against it in any such proceeding, consents to or acquiesces in the
appointment of a trustee, receiver, or liquidator of it or of all or any
substantial part of its assets and properties, or it or its shareholders shall
take any action looking to its dissolution or liquidation, (B) has filed
against it a petition in bankruptcy which is not dismissed within sixty (60)
days of being filed or, without the party's consent or acquiescence, a
trustee, receiver or liquidator of it or of all or any substantial part of its
assets and properties is appointed and such appointment is not vacated within
thirty (30) days thereafter.
(4) By either party, upon fifteen (15) days' prior written notice,
upon enactment of any law, rule or regulation that in the reasonable judgment
of either party will make it materially more expensive or difficult to comply
with its obligations under this Agreement.
2.2 Consequences of any Termination. (a) Subject to the provisions hereof,
upon termination of this Agreement, FRC shall be entitled to cease providing
Service to Customer, and all amounts due to FRC from Customer shall become
immediately due and payable.
(b) Notwithstanding anything to the contrary herein, Section 3.4
(regarding late charges) hereof shall continue to apply upon termination of
the Agreement.
(c) In addition to any rights hereunder, upon a termination of this
Agreement upon the happening of the events described in Sections 2.1(b)(3) the
non-breaching party shall have such rights and remedies as are available under
applicable law.
(d) Notwithstanding anything to the contrary contained herein, upon the
occurrence of any event set forth in Sections 2.1(b)(4), the parties shall
negotiate, in good faith, a modification of this Agreement to address the
consequences of such event and reach a mutually agreeable compromise and to
minimize the inconvenience and disruption to the Customer.
(e) Notwithstanding the termination of this Agreement for any reason, the
provisions of Articles 4, 5 and 6 shall continue to apply.
ARTICLE 3
PAYMENT TERMS
3.1 Payment and Invoices. Customer shall pay for Carrier Service weekly in
arrears. Carrier Service shall be invoiced no later than two (2) calendar
days after the beginning of the week following the week for which Services
were provided, which invoice shall be paid via bank wire no later than two (2)
calendar days of the date of such invoice (the "Due Date"). All payment under
this Agreement shall be made in U.S. dollars. Each calendar months Customer
shall be invoiced for the entire month indicating weekly payments and the
balance due for the final partial week (if applicable). The month-end invoice
shall be paid in the same manner as each weekly interim invoice.
3.2 Taxes. All Service under this Agreement are provided exclusive of any
applicable federal, local or foreign sales, use, excise, privilege, gross
receipts and other similar taxes, duties and charges imposed by any
governmental authority. Such taxes, duties and charges shall be separately
stated on the monthly invoice and shall be paid directly by Customer unless
required to be collected by FRC, in which case such taxes, duties and charges
shall be paid to FRC to the appropriate authority upon receipt of payment from
Customer. Any amounts not paid when the invoice is due shall be treated as a
late payment for purposes of Sections 2.2(b) and 3.4. If Customer claims any
exemption from otherwise applicable taxes, duties or charges it shall provide
FRC with a valid tax exemption certification or other evidence reasonably
satisfactory to FRC that Customer is not subject to such taxes, duties or
charges.
3.3 Disputed Charges. If Customer, in good faith, disputes in writing the
amount or appropriateness of a charge included in an invoice from FRC,
Customer shall notify FRC of the disputed charge and provide documentation
reasonable requested by FRC to resolve the disputed charge. Such notification
shall not relieve Customer of the obligation to make all payments by the due
date, including the amounts disputed by the Due Date. Customer and FRC shall
exercise reasonable, good faith efforts to resolve the disputed charges.
Failure to contest a charge within forty-five (45) days of the date of the
invoice shall create an irrebuttable presumption of the correctness of the
charge. If FRC and the Customer fail to resolve the disputed charge with
ninety (90) days from the date of the invoice, the parties are then free to
exercise their rights hereunder to seek remedy in a court of law and such
charges shall be considered due from the original Due Date and shall be
subject to all late payment penalties contained in this Agreement, in the
event FRC is the prevailing party. If the dispute is resolved within this
ninety (90) day period, no late fees will be assessed.
3.4 Late Fees. Any payments (which are not disputed in accordance with
Paragraph 3.3 above) not received by the Due Date shall bear interest at an
annual rate of eighteen (18) percent, or the maximum rate permitted by law,
whichever is less, from the Due Date until paid in full. Any payments
received which are less than the total amount due shall be applied first to
interest and collection fees, and then to the oldest invoice(s) outstanding,
regardless of any contrary instructions received from the Customer.
ARTICLE 4
LIABILITY
4.1 Service Interruptions. FRC shall not be liable for interruptions in the
provisions of Service to Customer caused by or resulting from any act of God,
flood, earthquake, storm, lightning, fire, epidemic, war, outbreak of
hostilities (whether or not war is declared), riot, strikes or other labor
unrest, civil disturbance, sabotage, failures of third parties, including
mechanical failures, fiber or cable cuts, accidents, defects in transmission,
expropriation by governmental authorities, interruptions by regulatory or
judicial authorities or other acts or events that are outside the reasonable
control of FRC.
4.2 LIMITATION OF LIABILITY. IN NO EVENT SHALL FRC BE LIABLE TO CUSTOMER OR
ANY OTHER THIRD PARTY IN ANY RESPECT, INCLUDING, WITHOUT LIMITATION, FOR ANY
DIRECT, CONSEQUENTIAL, SPECIAL, INCIDENTAL, ACTUAL OR PUNITIVE DAMAGES, OR FOR
ANY LOST PROFITS OF ANY KIND OR NATURE WHATSOEVER, ARISING OUT OF OR RELATING
TO THIS AGREEMENT (OR THE OBLIGATIONS, HEREUNDER).
4.3 NO WARRANTY. FRC MAKES NO WARRANTY TO CUSTOMER OR ANY OTHER PERSON OR
ENTITY, WHETHER EXPRESS OR IMPLIED OR STATUTORY, AS TO THE QUALITY,
MERCHANTABILITY, COMPLETENESS OR FITNESS FOR A PARTICULAR USE OR PURPOSE OF
THE SERVICES PROVIDED UNDER THIS AGREEMENT, ALL SUCH WARRANTIES HEREBY BEING
EXPRESSLY EXCLUDED AND DISCLAIMED.
ARTICLE 5
CONFIDENTIALITY
5.1 Confidentiality. During the term of this Agreement, the parties may
disclose to each other certain "proprietary" and/or "confidential"
information. The parties desire to assure the confidential and proprietary
status of the information which may be disclosed to each other and therefore
for themselves and their affiliates agree as follows:
(a) All information disclosed shall be deemed to be confidential and
proprietary (hereinafter "Proprietary Information") provided that written
information is clearly marked in a conspicuous place as proprietary, and
verbal information is immediately confirmed in writing as proprietary. All
information contained in this Agreement, including the Schedules hereto, as
well as all records of Customer's customers, traffic volume and distribution
information and rate information of either party given to or learned by the
other in connection with this Agreement shall be considered Proprietary
Information without further act of either party.
(b) Each party agrees to use the Proprietary Information received from the
other party only for the purpose of this Agreement. No other rights, and
particularly licenses, to trademarks, service marks, inventions, copyrights,
or patents are implied or granted under this Agreement.
(c) Proprietary Information supplied shall not be reproduced in any form or
orally communicated except as required to accomplish the intent of this
Agreement.
(d) The receiving party shall provide at a minimum the same care to avoid
disclosure or unauthorized use of the Proprietary Information as it provides
to protect its own proprietary information. It is agreed that all Proprietary
Information shall be retained by the receiving party in a secure place with
access limited to only such of the receiving party's employees or agents who
need to know such information for purposes of this Agreement.
(e) All Proprietary Information, unless otherwise specified in writing, shall
remain in the property of the disclosing party, shall be used by the receiving
party only for the purpose intended, and such Proprietary Information,
including all copies thereof, shall be returned to the disclosing party or
destroyed after the receiving party's need for it has expired or upon written
request of the disclosing party, and, in any event, upon termination of this
Agreement. The non-disclosing party shall promptly provide the disclosing
party written certification that all Proprietary Information has been returned
or destroyed.
(f) It is understood that the term "Proprietary Information" does not include
information which:
(1) has been lawfully published or is otherwise in the public domain
through no fault of the parties;
(2) prior to disclosure is properly within the legitimate possession of
the receiving party without restriction of the receiving party's right to
disseminate the information and without notice of any restriction against its
further disclosure;
(3) subsequent to disclosure is lawfully received from a third party
having rights therein without restriction of the third party's right to
disseminate the information and without notice of any restriction against its
further disclosure;
(4) is independently developed without breach of any obligation of
confidentiality through parties who have not had, either directly or
indirectly, access to or knowledge of such Proprietary Information;
(5) is disclosed with the prior written approval of the other party; or
(6) is obligated to be produced under order of a court of competent
jurisdiction or other legal or regulatory process or procedure, provided that
the party who is requested to produce the Proprietary Information shall
promptly notify the other party in writing of the request.
5.2 Use of Name. Each party agrees that, without the other party's written
consent, it will not use the name, service marks or trademarks of the other
party or of any of its affiliated companies in any advertising publicity
releases or sales presentations. Neither party shall take any actions which
will in any manner compromise other party's registered trademarks and/or
service marks.
5.3 Remedies for Breach. The parties agree that a breach of the terms of this
Article 5 would result in irreparable injury to the non-breaching party for
which a remedy in damages would be inadequate. The parties agree that in the
event of such breach or threatened breach, the non-breaching party shall be
entitled to seek an injunction to prevent the breach or threatened breach, in
addition to remedies otherwise available at law or in equity.
ARTICLE 6
MISCELLANEOUS
6.1 Waiver. The failure of either party to give notice of default or to
enforce compliance with any of the terms or conditions of this Agreement, the
waiver of any term or condition of this Agreement, or the granting of an
extension of time for performance, shall not constitute a permanent waiver of
any term or condition of this Agreement, and this Agreement and each of its
provisions shall remain at all times in full force and effect until modified
by both parties in writing.
6.2 Litigation Costs. In the event that a party institutes litigation to
enforce the terms of this Agreement or to collect any moneys due hereunder,
the prevailing party shall be entitled to recover, in addition to any other
remedy, reimbursement for reasonable attorney's fees, court costs and other
reasonable related expenses incurred in connection therewith.
6.3 Assignment. Neither party shall assign this Agreement or any rights under
this Agreement without the prior written consent of the other party.
Notwithstanding anything to the contrary herein, FRC shall be entitled to
create a security interest in this Agreement in favor of its lenders without
Customer's consent. Any attempted assignment that does not comply with the
terms of this section shall be null and void.
6.4 Notices. Any notice, approval, request, authorization, direction or other
communication under this Agreement shall be given in writing and shall be
deemed to have been delivered and given for all purposes (a) on the delivery
date if delivered personally to the party to whom the same is directed, or (b)
on the date received if sent by express courier, registered or certified mail,
return receipt requested, postage and charges prepaid, or by facsimile with
receipt confirmed addressed as follows:
If to FRC:
Flat Rate Communications, Inc.
000 Xxxxxxxx Xxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, General Manager
With a copy to:
Viatel, Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Vice President, Business and Legal Affairs
If to Customer:
Cybertel Telecommunications, Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxxxx
Either party may change its address specified above by giving the other party
notice of such change in accordance with this paragraph.
6.5 Entire Agreement and Amendments. This Agreement sets forth the entire
understanding of the parties and supersedes any and all prior agreements,
arrangements or understandings relating to the subject matter thereof. This
Agreement shall not be amended in any way without a signed and otherwise
properly executed written agreement between the parties hereto.
6.6 Jurisdiction. Pursuant to Title 14 of the General Obligations Law of the
State of New York, the parties hereto agree that (1) the rights and
obligations of the parties hereunder shall be governed by and interpreted,
construed, and enforced in accordance with internal laws of the State of New
York and (2) the forum for any dispute hereunder shall be in any federal
and/or state court located in New York County, and there shall be no defense
to the selection of such forum based on jurisdiction, venue or convenience.
6.7 Severability. In the event that any provision of this Agreement, neutral
pronouns and any variations thereof shall be deemed to included the feminine
and masculine and all terms used in the singular shall be deemed to include
the plural, and vice versa, as the context may require. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the Schedules and Exhibits hereto, as the same
may from time to time be amended or supplemented and not to any subdivision
contained in this Agreement. The word "including" when used herein is not
intended to be exclusive and means "including, without limitation".
References to "dollars," "U.S.$" and "$" are to United States dollars.
References herein to an Article, Section, subsection, clause, Schedule or
Exhibit shall refer to the appropriate Article, Section, subsection, clause,
Schedule or Exhibit in or to this Agreement, the Article and Section headings
used herein are for reference purposes only, and shall not in any way affect
the meaning or interpretation of this Agreement.
6.9 Counterparts. This Agreement may be executed in counterparts, all of
which taken together shall constitute one instrument.
6.10 Incorporation of Exhibits and Schedules. Each of the Exhibits and
Schedules identified in this Agreement or attached hereto are incorporated
herein by reference and made a part thereof. To the extent of any
inconsistency or conflict between the terms of Schedule or Exhibit and the
terms of this Agreement, the terms of such Schedule or Exhibit shall control,
capitalized terms used but not otherwise defined in the Schedules or Exhibits
shall have the meanings ascribed to them in the Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Flat Rate Communications, Inc.
By: /s/ Xxxx X. Xxxxxxx
---------------------
Name: Xxxx X. Xxxxxxx
Title: General Manager
Cybertel Communications Corporation
By: /s/ Xxxxxxx Xxxxxxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: President
SCHEDULE A - CARRIER SERVICES AGREEMENT
A.1 Purchase and Sale of Services. Cybertel Communications Corporation
("Customer") agrees to purchase from FRC, Inc. ("FRC"), and FRC agrees to sell
to Customer, the long distance telephone services "the "Carrier Service") set
forth in Exhibit 1 at the stated rates, with the understanding that such
Customer is responsible for delivering its calls or other services to FRC's
switching site at 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, or such other
points and locations as may be mutually agreed upon.
A.2 Rate Changes. FRC reserves the right t adjust its rates at any time upon
five(5) days' prior written notice to Customer, and Customer's continued use
of the Carrier Service constitutes acceptance of the rates and Customer's
agreement to pay all applicable charges.
A.3 Payment Security. Upon the request of FRC, Customer shall provide
financial statements, credit reports and other publicly available financial
information reasonably requested by FRC to determine Customer's
creditworthiness. If requested by FRC, Customer shall provide a cash deposit,
a letter of credit drawn on a financial institution acceptable to FRC or such
other security as FRC and Customer may agree upon prior to FRC rendering any
Service to secure Customer's payments during the term that Services are
provided hereunder. Subject to Section 3.3 of the Agreement, FRC may offset
against the security any amounts due under the Agreement by Customer that are
not paid when due. Upon the expiration or termination of the Agreement for
any reason, FRC shall have the right to offset against the security any
amounts owed to it by Customer and shall remit the balance promptly to
Customer without interest.
A.4 Applicability of Tariffs and Laws. Service provided hereunder and the
rights and obligations of the parties hereunder may be subject to and be
governed by tariffs filed by FRC from time to time with the Federal
Communications Commission or any applicable regulatory authority
(collectively, the "Tariffs"), the terms of which are incorporated herein by
reference. If there is any conflict or inconsistency between the terms of the
Agreement and any of the Tariffs applicable to this Agreement, the terms of
the Agreement shall control. The Tariffs are subject to modification in
accordance with applicable law and the rules and regulations of applicable
regulatory authorities. The provision of Service under this hereunder also is
subject to applicable law and the rules and regulations of applicable
regulation authorities. Each party shall perform its obligations hereunder in
compliance with applicable laws.
A.5 Resale of Services.
(a) In reselling FRC's Services under this Agreement, Customer will observe
the highest standard of integrity and fair dealing with members of the public.
Customer agrees to sell and xxxx FRC's Service under its own name, identity or
xxxx, and Customer further agrees not to reference FRC's name or marks in any
context involving its furnishings of service(s) to the public. If any
violation of this provision occurs during the term of this Agreement, FRC may
terminate this Agreement on five(5) business days written notice.
Furthermore, Customer agrees to indemnify FRC for any actions, claims, suits
or damages arising out of any allegation that if proved would cause Customer
to be in breach of this provision and Customer shall also pay all attorney's
fees and costs incurred by FRC due to any actions, claims, suits or damages
arising out of such allegation.
(b) Customer agrees that it will obtain and maintain any and all approvals to
resell FRC's Service hereunder from the FCC, including requirements imposed by
Section 214 of the Communications Act of 1934, as amended, and state
regulatory bodies. In the event Customer fails to botain or maintain the
appropriate approvals, FRC shall not be liable for any delay or failure to
provide FRC's Services.
(c) Customer shall have sole responsibility for interacting with its customers
in all matters pertaining to service, including the placing and handling of
service orders, service installation, operation and termination, dispute
handling and resolution, and billing and collection matters. FRC shall incur
no obligation, nor shall it be deemed to have any obligation, to interact with
Customer's customers for any reason or purpose. Customer shall cooperate with
FRC as necessary to address and resolve service-related issues and problems
and shall impose upon its customers an obligation to cooperate, with Customer
in addressing and resolving service-related issues and problems.
(d) Customer understands and accepts that, as part of FRC's normal business
policy and practices and its obligations under law, FRC will engage in
extensive marketing efforts in attempt to sell its services to the public and
that such efforts will result in active competition with Customer for the
business of users who are Customer's customers or prospects. Accordingly,
Customer further understands and accepts that such competition by FRC is in
all respects fair and proper and that Customer shall not complain, or be heard
to complain, of business lost to FRC. Under no circumstance shall any
inference be derived that FRC's entry into this Agreement with Customer means
that FRC will restrict its efforts to compete against Customer in any way.
(e) Customer understands and accepts that no fiduciary relationship arises by
virtue of this Agreement and that, accordingly, FRC incurs non of the
obligations that arise in such relationship as an incident of its fulfilling
its obligations under this Agreement. Further, Customer understands and
accepts that FRC is not an insurer of profits for Customer, nor does FRC
guarantee the success of Customer's business as a result of Customer's receipt
of service(s) under this Agreement.
A.6 Fraudulent Calls. FRC shall not be liable for any fraudulent calls
delivered to FRC and billed to Customer's account. FRC shall notify Customer
promptly of any fraudulent calling of which FRC has knowledge, it being
understood that FRC is under no obligation to investigate the authenticity of
calls charged to Customer's account.
IN WITNESS WHEREOF, the parties accept this Schedule A to the Carrier Services
Agreement dated May 29, 1998 between FRC and Customer as of this 29th day of
May, 1998.
Flat Rate Communications, Inc.
By: /s/ Xxxx X. Xxxxxxx
---------------------
Name: Xxxx X. Xxxxxxx
Title: General Manager
Cybertel Communications Corporation
By: /s/ Xxxxxxx Xxxxxxxxxxx
------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: President
