International VoIP Agreement
EXHIBIT 10.35
This International VoIP Agreement (“Agreement”) is entered into on this 17 day of December, 2001 between Fusion Telecommunications International, Inc., a Delaware corporation (“Fusion”), and Global ePoint, Inc., a Nevada corporation (“Global ePoint”), referred to individually as a “Party” and collectively as “Parties.”
RECITALS
WHEREAS, Fusion is a provider of network communications services;
I.Obligations of the Parties
A. Fusion Covenants and Agrees to:
1. Be responsible for selling to all potential customers in the U.S. and worldwide, minutes of international VoIP services, on behalf of the Venture, to be terminated lawfully in Vietnam. This Agreement includes services to be provided pursuant to any agreement with the Vietnam Post and Telecommunications Corporation or one of its affiliates or subsidiaries (hereinafter referred to collectively as “VNPT”) or by another entity which is lawfully able to terminate voice traffic into the VNPT network or any other network in Vietnam (“Other Entity”), provided that Global ePoint elects to participate in the project within fifteen (15) business days after being offered the same by Fusion.
2. Maintain all billing and accounting records for the sale to its customers of minutes terminating to Vietnam, in addition to such other countries as the Parties may hereafter agree to add by amendment to the arrangement set forth in this Agreement.
3. Maintain adequate switching functions at its switch site in New York for aggregating its customer minutes for termination in Vietnam.
1
4. Use its best efforts to continue the validity of its valid agreement from an authorized entity in Vietnam authorizing Fusion to lawfully terminate VoIP minutes to Vietnam.
5. To the extent technically feasible, obtain and be responsible for international bandwidth for interconnection of its New York PoP facility to a technically feasible point of presence in Hanoi, Ho Chi Minh City and/or Danang, Vietnam, to be designated by VNPT or Other Entity, including availability of a dedicated, clear channel, point-to-point circuit; and E-1’s using PRI signaling or R-2 signaling with tone plans for R-2, and configurations for any variations of this R-2 signaling.
6. Provide compression and routing equipment at Fusion’s designated point of presence in New York (or other Point of Presence), and provide any necessary network management equipment in the USA.
7. Provide any necessary equipment and services necessary to establish VoIP International Gateways at Hanoi, Ho Chi Minh City and/or Danang, Vietnam.
8. Obtain and be responsible for facilities interconnecting (i) Fusion’s designated Point of Presence in New York to the cable head in the USA; (ii) the cable head in the USA to the cable head in Vietnam; and (iii) to the extent necessary, the cable head end in Vietnam to the international VoIP gateways in Hanoi, Ho Chi Minh City and/or Danang, Vietnam.
9. Obtain and provide to Global ePoint all other pertinent documentation regarding any required authorizations or permits to perform its obligations with respect to the business contemplated by this Agreement.
10. Obtain and provide any other equipment and services as required pursuant to the agreements entered into with VNPT or Other Entity.
B. Global ePoint Covenants and Agrees to:
1. Be responsible for any deposits, license fees and other up front costs that are required to consummate the transactions contemplated by this Agreement. Notwithstanding any other provision of this Agreement, Global ePoint’s obligation to provide funding for any specific contract entered into by Fusion or specific project contemplated by this Agreement shall be subject to the feasibility of the performance of such contract or such project as determined by Global ePoint, in its sole discretion.
2. Global ePoint will provide a Letter of Credit listing VNPT or the
2
Other Entity as the beneficiary, in an amount of approximately USD 300,000, the exact amount to be agreed to by the Parties. The Letter of Credit will be issued by an internationally recognized bank reasonably acceptable to the Parties or via other means reasonably acceptable to the Parties and will serve as a deposit for termination charges. This Letter of Credit shall include express language preventing any drawing against it except for the purposes of paying termination charges that are not timely paid. The term of the Letter of Credit shall be for one (1) year, after which the joint entity formed by the Parties will have the responsibility to replace the Letter of Credit with security acceptable to the then current beneficiary. In addition, Global ePoint will provide cash in the amount of USD 50,000 for connection fees associated with the interconnection with other networks and a cash amount to be agreed upon by the Parties as prepayment for 2 months’ costs for each Vietnam E1 submarine half-circuit, ILPC, ILPC- Vietnam side, local leased line, long distance leased line between Ho Chi Minh City and Hanoi, local transmission part of long distance leased line, local E-1 PSTN to be procured as well as deposits required for US – side connectivity through to Hong Kong.
3. Upon the commencement of the actual passing and termination of minutes across the network, the joint entity formed by the Parties will pay fees for termination to VNPT or the Other Entity or related parties, which fees shall be approximately $.28- $.31 per minute as follows: $.14 for the call, $.10 to VNPT or Other Entity for a connection charge ($.15 as a connection charge for cellular calls), and $.04 as a fee to Fusion’s Vietnam Marketing Representative. The $.14 fee referred to above shall be adjusted from time to time in accordance with market conditions.
4. Be responsible for all financial obligations hereunder necessary to meet the terms and conditions of this Agreement and to finance all equipment, installations, connectivity and services provided by Fusion hereunder until such time as the underlying projects become self-financing.
5. Notwithstanding the financial obligations as outlined in this Section B, the Parties agree that Global ePoint’s financial obligations under this Agreement for deposits, license fees, connection fees, network costs, equipment costs, and other costs and fees described in this Section B (except for the Letter of Credit described in Section B.2) shall not exceed USD $500,000. In addition, as outlined in Section B.2., Global ePoint shall have the responsibility of posting a Letter of Credit in the amount of USD $300,000. The Parties agree that should the costs hereunder exceed the above amounts, Global ePoint shall not be liable for such costs unless, in its sole and unfettered discretion, Global ePoint reaches mutual agreement with Fusion on the payment of such additional costs required in order to meet the terms and conditions of this Agreement. In the event that additional monies are needed to fund a contract or project and there is not a mutual agreement among the Parties and Global ePoint chooses not to fund the additional monies, then upon Fusion’s securing the additional monies from an outside source to fund the contract or project, Fusion shall reimburse Global ePoint for all amounts expended on the
3
contract or project by Global ePoint (and not previously reimbursed), and Global ePoint shall retain an interest equal to the percentage that is remaining investment bears to the total value of the contract or project, but not less than a ten percent (10%) interest if Global ePoint elects to withdraw its entire investment from the contract or project.
IIProfit-sharing Arrangement
1. Global ePoint and Fusion shall each receive fifty percent (50%) of the aggregate Net Profit generated through Fusion’s sale of VoIP minutes terminating to Vietnam to be accounted for and distributed in accordance with the terms set forth in Section 4 below.
2. The Parties shall make settlement with and payment to each other, as necessary, on a monthly basis, within ten (10) days after the end of each month. Each monthly payment will be based upon the management accounts produced by the Parties. At the conclusion of each Party’s financial year, an adjustment will be made to the payment of the preceding fiscal year to reflect any audit adjustments that were made based on the management accounts. Any disputes will be resolved through mutually agreed procedures.
3. All unpaid, undisputed balances shall accrue at the greater of 1½% (one and one half percent) per month or at the highest rate permitted by law. In addition, each Party shall pay all costs, including attorneys’ fees, incurred by the other Party in connection with any proceeding to collect any unpaid balances due under this Agreement. All payments, where applicable, shall be made via irrevocable wire transfer to:
Global ePoint:
Xxxxx Fargo Bank
ABA #: 000000000
Acct #: 460-3793951
For: Global ePoint, Inc.
0000 X. Xxx Xxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxx, XX 00000
Fusion:
Chase Manhattan Bank
ABA #: 000000000
Acct #: 777-390515
For: Fusion Telecommunications
International, Inc.
000 Xxxxxxxxx Xxx, Xxx 000
Xxx Xxxx, XX 00000
4
4. Definitions of key terms and conditions used to calculate profit sharing:
(a.) “Total Revenue” is that revenue accruing to Global ePoint and Fusion from the sale to any customer of VoIP minutes terminating in Vietnam through the Vietnam network contemplated in this Agreement; provided that, in the case of sales to retail end users, the revenue assigned to any such sale shall be computed as if the sale were made at the average sales price received by each of the Parties during the month in question from each of the Parties’ nonaffiliated wholesale customers to which sales of said Vietnam VoIP services are made during the month in question.
(b.)“Net Profit” shall equal Total Revenue (as computed pursuant to Paragraph (a) above) less the following expenses:
• Undersea fiber charges (see Paragraph I.A.5 above);
• Terrestrial facility charges (local loops in USA and Vietnam)(see Paragraph I.A.8 above);
• Termination expense in Country and other expenses as set forth in Paragraph B.3 above;
• Per minute fee paid to Fusion’s Marketing Representative to be initially $0.04 per minute.
• Fees and expenses for the other elements of expense described in Paragraph I.A. and I.B. above
• Amortization over a twelve (12) month period (such amortization to be paid monthly) of Global ePoint’s cash deposits, if any, pursuant to Paragraph B.2 above, it being understood that, if such deposits are in the form of a letter of credit or similar mechanism rather than cash, then there will be no amortization pursuant to this item but instead the letter of credit fee imposed by Global ePoint’s bank will be chargeable as a monthly expense to arrive at Net Profit; and,
• Fusion will be entitled to a network service and maintenance fee, switch, selling, billing, administrative and bad debt reserve fee of $.015 per minute on all traffic volumes.
If any of the foregoing expenses are not paid from operating revenue of the Venture, the applicable expense shall be reimbursed to the Party that provided the funding to pay such expense in accordance with the amortization schedule set forth in this Agreement.
5. The terms of any interconnection agreement entered into between the Venture and VNPT or Other Entity shall include a termination rate between
5
approximately USD 0.28 and USD 0.31 for cellular per minute, and the Parties agree to initially terminate one (1) million minutes per month and anticipate increasing termination of traffic to Vietnam to at least 4-5 million minutes per month. It is further agreed that Fusion will utilize its best efforts to negotiate for a provision in the agreement with VNPT or Other Entity that any license or other authorization to operate in Vietnam shall include a mutually-agreed to formula under which termination charges due and payable to the VPNT or Other Entity shall be reduced from time to time in response to declining margins. If Fusion is unable to secure such an agreement from the government of Vietnam, both or either of the Parties may terminate this Agreement immediately without penalty. If Fusion secures such an agreement from the government of Vietnam, but market rates for VoIPservices terminating to Vietnam decline so as to materially affect the economic feasibility of a specific contract or project covered by this Agreement, as determined by either Party in its sole discretion, then either Party may terminate this Agreement with respect to such contract or project immediately without penalty.
III.General Terms & Conditions
1. References to Fusion shall include Fusion Telecommunications International, Inc. and all parent, subsidiary or affiliated entities, as well as its (their) successors and assigns.
2. References to Global ePoint shall include Global ePoint, Inc. and all parent, subsidiary or affiliated entities, as well as its (their) successors and assigns.
3. (a) With regard to the termination arrangement introduced by Fusion to Global ePoint as contemplated by this Agreement, Global ePoint shall not circumvent Fusion in such a way that excludes Fusion from participating, or diminishes Fusion’s ability to participate, in such termination arrangement.
(b) With regard to any other business opportunity that either Party is pursuing, in the event that either Party discloses to the other Party in writing such other business opportunity, the other Party shall not circumvent such Party in such a way that excludes such Party from participating, or diminishes such Party’s ability to participate, in such business opportunity. Furthermore, this Agreement does not preclude either Party from entering into any other agreement, venture, strategic alliance, or business opportunity relating to VoIP services and/or Vietnam.
(c) The terms of this Paragraph 3 shall survive expiration or termination of this Agreement.
4. The Parties shall keep all oral and written information disclosed in connection with this Agreement strictly confidential, and will utilize the same degree of care
6
in safeguarding such information as it utilizes in respect of its own confidential information. Neither Party shall make any public disclosure of the discussions or content of material exchanged between the Parties unless mutually agreed to by the Parties in writing or unless required by law. The Parties acknowledge that Fusion has disclosed to Global ePoint that it is negotiating a number of separate telecommunications arrangements in Vietnam, and Fusion agrees that Global ePoint shall have a right of first refusal to participate in any such arrangement in Vietnam under terms and conditions similar to this Agreement.
5. The Parties may mutually agree to establish a Limited Liability Company through which to operate the arrangement described herein.
In addition to any other termination provisions contained in this Agreement, either Party may terminate this Agreement immediately upon written notice to the other Party, in the event of:
a) a breach by the other Party of a material term, representation, warranty, or obligation of this Agreement which breach is not cured (if curable) within thirty (30) calendar days after receipt of notice of breach from the non-breaching Party;
b) fraud, deception or non-payment of obligations;
c) a Force Majeure event (as defined below) which prevents either Party from performing material obligations required under this Agreement for a period of thirty (30) days or more;
d) the other Party’s insolvency, receivership, or voluntary bankruptcy; or the institution of involuntary proceedings for bankruptcy against the other Party that are not stayed or dismissed within ninety (90) calendar days after the institution thereof;
e) a general assignment by the other Party of all or substantially all of its business or assets for the benefit of creditors;
f) substantially all of the other Party’s property, or that which is used in providing the Services, is or becomes subject to levy, seizure, assignment or
7
sale for or by any creditor or governmental agency, unless the judgment or debt is released or satisfied within ten (10) business days; or
g) a determination by any governmental authority having jurisdiction or court of competent jurisdiction that the operations contemplated hereby are in violation of applicable legal restrictions.
8. Regulatory Issues or Changes. Should the adoption of any law, rule, regulation, or agency or judicial determination by a court of competent jurisdiction materially affect either Party’s ability to perform its obligations pursuant to this Agreement, such Party may terminate this Agreement immediately without any termination liability upon written notice to the other Party.
10. No Warranty. ALL SERVICES PROVIDED HEREUNDER ARE PROVIDED ON AN “AS IS” BASIS WITHOUT WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION WARRANTIES AS TO THE DESCRIPTION, QUALITY, MERCHANTIBILITY, NONINFRINGEMENT, COMPLETENESS, FITNESS FOR A PARTICULAR PURPOSE, ALL SUCH WARRANTIES BEING EXPRESSLY EXCLUDED AND DISCLAIMED.
8
9
governmental actions, shortages of equipment for supplies, unavailability of transportation, acts or omissions of third parties, or any other cause beyond either Parties’ reasonable control. The Party so delayed or prevented from performing shall exercise good faith efforts to remedy any such cause of delay or cause preventing performance. The existence of such a situation for a duration longer than fifteen (15) calendar days shall entitle either Party to terminate this Agreement without liability to the other Party, except for any undisputed payment for Services rendered, subject to prior written notice.
16. Entire Agreement - This Agreement constitutes the entire agreement between the Parties and supersedes all previous understandings, commitments or representations concerning its subject matter. This Agreement may not be amended or modified in any way, and none of its provisions may be waived, except by a writing signed by an authorized officer of each Party.
If to Fusion (except for rate change notices):
Fusion Telecommunications International, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, XX 00000
10
Fax: (000) 000-0000
Attention: Executive Vice President—International
If to Fusion for the purposes of rate change notices:
Fusion Telecommunications International, Inc.
0000 X. Xxxxxxx Xxxxx Xxxx
Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Vice President—Operations Finance
If to Global ePoint:
Global ePoint, Inc
0000 X. Xxx Xxxxxx Xxxx.
Xxxxx 000
Xxx Xxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxxxx, CEO
Tel: 000-000-0000
Fax: 000-000-0000
Each Party will advise the other of any change in its address, telephone number or facsimile number.
11
and such assignee/successor shall remain liable for all of the rights and obligations hereunder; provided however, that if either Party makes such an assignment, such Party shall provide reasonable notice to the other Party of such assignment.
Agreed and accepted:
|
Global ePoint, Inc. |
|
Fusion Telecommunications |
|||||||||||
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|||||||||
|
By: |
/s/Xxxxxxxxx Xxxxxxxx |
|
By: |
/s/Xxxx X. Ram |
|
||||||||
|
|
|
|
|
|
|
||||||||
|
Print Name: |
Xxxxxxxxx Xxxxxxxx |
|
Print Name: |
Xxxx X. Ram |
|
||||||||
|
|
|
|
|
|
|
||||||||
|
Title: |
CEO |
|
Title: |
E.V.P. – International |
|
||||||||
|
|
|
|
|
|
|
||||||||
|
Date: |
12/17/01 |
|
Date: |
12/17/01 |
|
||||||||
12
