THIS AGREEMENT is made and entered into by and between TELEGROUP,
INCORPORATED, an Iowa corporation with its principal office located at 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000 (hereinafter "Telegroup"), and NEW
T&T HONG KONG LIMITED of 0/X, Xxx X&X Xxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxx, Xxxx Xxxx ("New T&T").
RECITALS:
WHEREAS, Telegroup is in the business of providing telecommunications
services; and
WHEREAS, Telegroup and New T&T have previously entered into a Facilities
Management Agreement dated 20 October, 1995 ("FM Agreement"), Section
12.4 of which is attached hereto; and
WHEREAS, New T&T has applied to Telegroup for the right to purchase and
resell certain of Telegroup's callback services to the general public;
and
WHEREAS, New T&T has a pre-existing agreement with a third-party
supplier of such services (the "Existing Supplier"); and
WHEREAS, Telegroup has agreed to provide such services pursuant to the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
warranties which appear below, and intending to be legally bound thereby,
the parties hereby agree as follows:
1. UNDERTAKING OF THE PARTIES
1.1 Services. Telegroup hereby agrees to provide New T&T with certain dial
tone and call termination services as more particularly described in
Exhibit 1.1 attached hereto (hereinafter the "Services"). New T&T shall
provide at * necessary in connection with the purchase by New T&T of the
Services. All such * supplied by New T&T shall be maintained by New T&T
during the term of this Agreement and shall be used by Telegroup only for
the purpose of supplying the Services to New T&T hereunder.
1.2 Rates. The rates for Services will be established by Telegroup. The
initial rates are set forth in Exhibit 1.2 attached hereto. These rates
may be revised from time to time by Telegroup, subject to the following
conditions:
(a) *
(b) *
*Confidential Treatment Requested. The redacted material has been filed
separately with the Commission.
(c) In no event shall any rate increase take effect prior to 90
days after the Effective Date of this Agreement.
1.3 Effective Date and Term. The Effective Date of this Agreement shall be
the date upon which it is executed by Telegroup. Except as otherwise
provided herein, the initial term of this Agreement shall end at
midnight on October 16, 1998. Thereafter, it shall be automatically
renewed for successive one year periods, unless terminated by either
Party 60 days prior to the commencement of such renewal period.
1.4 Eligible Traffic. "Eligible Traffic" hereunder shall be international
traffic originating on or passing through New T&T's network using New
T&T's "IDD 007" Service or its equivalent, excluding traffic to The
People's Republic of China or Macau, or traffic which is terminated by:
(a) Hong Kong Telecom International Limited; or
(b) Hong Kong Telephone Company; or
(c) International private lines; or
(d) the existing Supplier.
1.5 Commitment to Make Telegroup the Primary Supplier. During the term of
this Agreement, New T&T shall use reasonable endeavors to insure that
* of its aggregate annual eligible traffic will be terminated by
Telegroup pursuant to this Agreement. At any time during the term of
this Agreement, New T&T shall have the right to supply to Telegroup a
statement, and any reasonable supporting documentation requested by
Telegroup, prepared and signed by New T&T's independent auditors
documenting the percentage of eligible traffic that was terminated by
Telegroup since the previous audit or, in the case of the first such
audit, since the Effective Date hereof (the "audit period"). If it is
thus demonstrated that Telegroup terminated * of the eligible traffic
during the audit period, *.
*Confidential Treatment Requested. The redacted material has been filed
separately with the Commission.
1.6 Down Time. If, during the term of this Agreement, Telegroup is unable
to offer the Services to New T&T for a period of time due to technical
problems, that period of time shall not be included as part of the audit
period (as set forth in Section 1.4 hereof) during which the down time
occurred.
1.7 Authority of New T&T. New T&T shall have the authority to provide the
Services to its Hong Kong customers without identifying to such
customers that New T&T is utilizing Telegroup's services, and any
contracts of New T&T with its customers relating to the Services shall be
entered into by New T&T in its own name and for its account.
1.8 Customer Service. New T&T shall be responsible for all end-user customer
service relating to the Services, including gathering accurate and
complete information as to purported difficulties and accurately
educating its end-user customers concerning the Services. Telegroup will
cooperate with New T&T with respect to customer service.
2. PAYMENT TERMS
2.1 Billing. Telegroup will invoice New T&T for the Services on a monthly
basis, and shall, on a weekly basis, provide New T&T with electronic call
detail records of all billable calls. Call charges will apply only to
those calls which are answered at the dialed (destination) end, and will
be calculated from the time the dialed number is answered to
the time either the caller or the called party hangs up (goes on hook),
*. *. In the event of a bona fide dispute relating to the billing
charges, New T&T shall pay the amount not in dispute and shall cooperate
with Telegroup in resolving the disputed portion of the xxxx.
Notwithstanding the foregoing, payment shall not affect New T&T's rights
to challenge the propriety of payment, but any bills rendered may not be
disputed by New T&T or Telegroup unless such dispute is set forth in
writing within the period of six months after the billing date for the
item or items in question. In the event New T&T fails to pay a xxxx for
the Services (other than for amounts that are the subject of a bona fide
dispute) that is rendered and due and payable in accordance with the
terms of this Agreement, Telegroup shall have the right, upon 7 calendar
days notice and failure by New T&T to remit full payment within those 7
days, to suspend the Services and to terminate this Agreement.
*Confidential Treatment Requested. The redacted material has been filed
separately with the Commission.
2.2 Security Deposit. New T&T acknowledges and agrees that should
Telegroup's xxxxxxxx in relation to the Services exceed an aggregate of *
during the term of this Agreement, Telegroup shall be entitled to call,
as security for the full and faithful performance by New T&T of its
payment and other obligations under this Agreement, a * , which
shall be payable to Telegroup in the event of a failure by New T&T to
meet its payment obligations under this Agreement. The terms and
language of such * shall be in a form and substance agreed by the
parties, which agreement shall not be unreasonably withheld.
3. TERMINATION
3.1 Regulatory Approval. This Agreement shall terminate automatically and
without liability or further obligation on the part of either Party to
the other if, by final order either Party is denied or loses any
necessary authority to provide or resell the Services as contemplated
hereunder, or if such authority is suspended or not renewed, or it
becomes unlawful to provide or resell the Services. If such authority is
lost, suspended or not renewed, or the Services become unlawful with
regard to a portion of the service area, then this Agreement shall
terminate automatically and without liability or further obligation on
the part of either Party to the other with regard only to the service
area concerned. The provisions of this Section 3.1 shall not be
construed to affect any liabilities which arise prior to a termination
hereunder.
3.2 Termination Rights. The following events shall be grounds for immediate
termination of this Agreement, provided that notice of termination is
given within 30 days of the event and that no termination hereunder shall
affect the obligations of one Party to the other for liability arising
prior to such termination:
(a) The failure of New T&T to make payment for the Services within
7 calendar days of receiving notice from Telegroup as set forth
in Section 2.1 hereof; or
(b) The failure by Telegroup to conform to the performance
specifications set out in Exhibit 3.3 within 30 days of being
notified by New T&T of any deficiency in Telegroup's
conformance to those specifications; or
(c) *; or
*Confidential Treatment Requested. The redacted material has been filed
separately with the Commission.
(d) The material violation by either Party hereto of any material
term or provision of this Agreement which is not cured within
30 days after notice of default is given; provided, however, if
the nature of the default is such that it cannot reasonably be
cured within such 30-day period, then the Party shall not be
deemed to be in default provided that it commences to cure the
default within such 30-day period and thereafter diligently
completes the cure; or
(e) New T&T determines in good faith that it is no longer
commercially viable to resell the Services in Hong Kong; or
(f) The violation by a Party of any laws or regulations applicable
to the Services and the failure to promptly remedy the
violation after notice; or
(g) The bankruptcy of a Party.
3.3 *.
3.4 The FM Agreement. Telegroup's obligation under Section 12.4 of the FM
Agreement to not offer its own "private label call back services"
through any local system other than the System described in the FM
Agreement shall terminate if:
(a) Telegroup terminates this Agreement on account of nonpayment
by New T&T of its monetary obligations under Section 2.1 of
this Agreement; or
(b) New T&T terminates this Agreement pursuant to Section 3.3
hereof; or
(c) The percentage of eligible traffic terminated by Telegroup in
an audit period, as determined in accordance with the
provisions of Section 1.4 hereof, is *.
4. INDEMNIFICATION AND LIMITATION OF LIABILITY
4.1 Quality & Timeliness of Services. Telegroup will make its best efforts
to provide continuous and uninterrupted Services hereunder in accordance
with generally applicable industry standards. However, New T&T
specifically acknowledges that Telegroup utilizes the transmission
services of underlying common carriers and does not have control of such
facilities. Except as set forth above in this Section 4.1, Telegroup
makes no representations as to the quality or availability of the
transmission services of its underlying carriers.
*Confidential Treatment Requested. The redacted material has been filed
separately with the Commission.
4.2 Indemnification. Each Party (the "Indemnitor") will indemnify the other
(the "Indemnitee"), its directors, officers, employees, agents,
affiliates, subsidiaries, and representatives and save them harmless from
and against any and all claims, actions, damages, liabilities and
expenses, including reasonable attorneys' fees occasioned by any breach
by the Indemnitor, its directors, officers, employees, agents or
representatives, of its obligations hereunder.
4.3 Limitation of Liability. Notwithstanding the foregoing, with respect to
the Services to be provided hereunder by Telegroup, it shall not be
liable to New T&T or to its officers, employees, directors, agents,
affiliates, subsidiaries, representatives, customers or any other third
party, in any respect, for any damages whatsoever unless Telegroup shall
have been directly and solely responsible for such damages and shall not
have used its reasonable efforts to remedy the situation in an effort to
prevent future such damages in the 30 day period after notice of
Telegroup's responsibility shall have been given to it. The parties
acknowledge that, irrespective of whether Telegroup succeeds in effecting
a remedy to the situation, and without limiting either Party's rights
under Section 3.2 hereof, so long as Telegroup shall have used its
reasonable efforts, as aforesaid, to remedy a situation for which it
would otherwise be responsible, Telegroup shall not be liable hereunder.
Notwithstanding the foregoing, in no event shall Telegroup be liable for
money damages for interruptions in the Services, defects in transmission,
or delays which are attributable to the services of underlying carriers,
equipment vendors, software or any other service suppliers, other
persons, or by regulatory or judicial actions.
4.4 Non-Liability of Either Party for Certain Damages. Notwithstanding
anything to the contrary herein, neither Party shall be liable to the
other Party for any special, consequential, or indirect damages arising
out of or in connection with this Agreement, including, but not limited
to loss of profits, business, revenue, good will, or anticipated savings.
4.5 Absolute Limitation of Liability. Notwithstanding anything to the
contrary in this Agreement, the maximum cumulative liability of Telegroup
for all acts or omissions under this Agreement shall be *.
5. NOMINATED REPRESENTATIVES
5.1 Representatives. The Parties' respective representatives are those
described in Exhibit 5.1. Each Party may changes its representative from
time to time by prior notice in writing to the other Party.
5.2 Communications Between Representatives. All communications concerning
the performance of the Agreement shall be conveyed between the Parties'
nominated representatives.
*Confidential Treatment Requested. The redacted material has been filed
separately with the Commission.
6. CONFIDENTIALITY
6.1 Confidentiality. New T&T and Telegroup shall keep confidential any
information obtained under or in connection with the Agreement and shall
not disclose the same to any third party without the consent in writing
of the other Party. The provisions of this Section 6.1 shall not apply
to:
(a) Any information in the public domain otherwise than by breach
of the Agreement;
(b) Information in the possession of the receiving Party thereof as
evidenced by a writing or writings dated before any disclosure
as aforesaid;
(c) Information obtained from a third party who is free to disclose
the same; or
(d) Information required to be disclosed by law.
6.2 Disclosure to Employees. New T&T and Telegroup shall disclose
confidential information to employees or representatives on a need to
know basis only and shall ensure that such employees and representatives
are aware of and comply with these obligations as to confidentiality.
7. MISCELLANEOUS
7.1 Whole Agreement. This Agreement represents the entire agreement between
the parties concerning the provision of the Service and shall supersede
all representations, promises and proposals, whether they be oral or
written.
7.2 Waiver. No delay, neglect or forbearance on the part of either Party in
enforcing against the other Party any term or condition of the Agreement
shall either be or be deemed to be a waiver or in any way prejudice any
right of that Party under the Agreement.
7.3 Governing Law. The Agreement shall be construed and interpreted in
accordance with the laws of Hong Kong and the parties hereby agree to
submit to the exclusive jurisdiction of the Courts of Hong Kong.
7.4 Notices. All notices or other communications required or permitted to be
given under this Agreement by any Party to another shall be:
(a) in writing addressed to the address of the intended recipient
at the address set forth above or to such other address as has been
most recently notified by the intended recipient to the Party giving
the notice;
(b) signed by a person duly authorized by the sender; and
(c) deemed to have been given and served:
(i) where delivered by hand, at the time of delivery.
(ii) where dispatched by facsimile transmission, twenty four
(24) hours after the time recorded on the transmitting machine
unless:
(aa) within those twenty four (24) hours the intended
recipient has informed the sender that the transmission
was received in an incomplete or garbled form; or
(bb) the transmission report of the sender indicates a
faulty or incomplete transmission; and
(iii) where dispatched by security post, on acknowledgment of
receipt by or on behalf of the recipient, but if such delivery
or receipt is on a day which is not a working day or is later
than 4:00 p.m. (local time) on a working day, the notice shall
be deemed to have been given and served on the next working
day.
7.5 Amendment. Any amendment to this Agreement including the Schedules
shall only be valid when such amendments are recorded in writing and
duly signed on behalf of the parties by their respective authorized
representatives.
7.6 Assignment. Subject to its License, New T&T may with written notice to
Telegroup assign or transfer any or all its rights and obligations under
this Agreement to a related company (as defined in the Companies
Ordinance). Telegroup may assign or transfer all its rights and
obligations under this Agreement to its subsidiary (as defined in the
Companies Ordinance in Hong Kong).
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed the
day and year first written above.
SIGNED for and on behalf of )
New T&T Hong Kong Limited )
by its duly authorized ) ___________________________________
Representative in the presence of: ) Signature of Authorized
Representative )
)
)
)
________________________ )
Signature of Witness )
)
) ___________________________________
) Name of Authorized Representative
) (print)
)
________________________ )
Name of Witness (print) )
)
)
)
SIGNED for and on behalf of )
Telegroup, Incorporated )
by its duly authorized ) ___________________________________
Representative in the presence of: ) Signature of Authorized
Representative )
)
)
________________________ )
Signature of Witness )
) ___________________________________
) Name of Authorized Representative
) (print)
)
)
________________________ )
Name of Witness (print) )
)
Exhibit A Section 12.4 of the Facilities Management Agreement
12.4 In the event Telegroup, in good faith, determines that it is no longer
commercially viable to offer call back services in Hong Kong through
the System under the terms and conditions set forth in this Agreement,
Telegroup may terminate this Agreement upon 30 days written notice to
New T&T. Nothing herein or elsewhere in this Agreement is intended to
prohibit Telegroup, at any time either during or after the termination
of this Agreement, from installing a similar system for call back
services utilizing a third party in Hong Kong to provide services
similar to those provided by New T&T hereunder; provided, however,
during the term of this Agreement, Telegroup shall not offer not offer
its own "private label call back services" through any other local
system (switch) in Hong Kong other than through the System serviced by
New T&T pursuant to this Agreement. For these purposes, Telegroup's
"private label call back services" means any call back services
utilizing a local switch or system in Hong Kong which is provided
either directly or indirectly by Telegroup or agents to end-user
customers in Hong Kong under the Telegroup name or any other name used
by Telegroup to identify its products.
The parties agree that if Telegroup terminates this Agreement under
this clause 12.4, it will not offer its private label call back
services through any local switch or system in Hong Kong for a 12-month
period unless Telegroup believes that such services may again be
profitable based upon a change in circumstances and Telegroup first
negotiates in good faith for a 30-day period with New T&T with a view
to resuming their relationship with respect to Telegroup's private
label call back services, prior to Telegroup negotiating such an
agreement with a third party for the provision of services to Telegroup
of the kind provided in this Agreement.
Exhibit 1.1 The Services
E1.1 Service Description. "Services" means U.S.-originated dial tone and
call termination services to be provided by Telegroup to New T&T where:
(a) Eligible traffic, as defined in Section 1.4 of this Agreement,
generated by New T&T or terminating on New T&T's network will be switched
through Telegroup's network using Telegroup's equipment located in New
T&T's premises in Hong Kong (the "System") pursuant to the FM Agreement;
and
(b) Those services shall be performed by means of a "call back" system
whereby:
(i) *; and
(ii) *; and
(iii) *.
*Confidential Treatment Requested. The redacted material has been filed
separately with the Commission.
Exhibit 1.2 Rates
New T&T Wholesale Rates in $US from Hong Kong to:
*
*Confidential Treatment Requested. The redacted material has been filed
separately with the Commission.
Exhibit 3.3 Quality of Service Requirements
E3.3.1 Call Set-Up Time. Call set-up time will be *; provided, however, that
with respect to calls to Russia and the former CIS countries, no
assurances with regard to call set-up time will be given or required.
Notwithstanding the foregoing, in no event will Telegroup be required
to provide call set-up time with respect to calls to any particular
country that is less than the set-up time provided by Hong Kong
Telecom's IDD service *. Call set-up time shall be measured as the
difference between:
(a) the moment when the Telegroup's System receives from New
T&T's switch a valid and complete international destination
number; and
(b) the moment when ringback or busy signal at the destination
end is first heard.
E3.3.2 Voice Quality. Speech clarity, audio continuity and echo suppression
will be of similar quality to normal IDD calls for * of the calls
during any * period. Analysis of these parameters by New T&T shall be
done in good faith, utilizing industry-accepted testing equipment and
procedures, with test reports made available to Telegroup in the event
a claim is made with regard to this sub-exhibit 3.3.2.
E3.3.3 Blocked or Dropped Calls. The percentage of calls blocked or dropped
while in progress by the Telegroup System shall be *.
E3.3.4 System Availability. The availability of the Telegroup System as a
whole should be *. The Telegroup System is considered available when
its normal service, as defined in this Agreement, is maintained.
E3.3.5 Telegroup Support. Telegroup shall make available to New T&T a means
of accessing qualified technical support staff 24 hours per day, 365
days per year. Telegroup shall be required to respond to problem
reports and restore service outages according to the following
schedule:
(a) *.
(b) *.
E3.3.6 Answer Supervision. As soon as possible, and in any event by no later
than March 15, 1996, Telegroup shall install and have ready for use by
New T&T software that will enable the System to deliver answer
supervision to New T&T's switch. "Answer supervision" means a mutually
acceptable electronic signal which identifies in real time the moment
at which the dialed number delivered to the System by New T&T is
answered by the called party.
*Confidential Treatment Requested. The redacted material has been filed
separately with the Commission.
Exhibit 5.1 Nominated Representatives
For Telegroup:
Xx. Xxxxxx X. Xxxxxxxx
Senior Vice President, International Development
Telegroup, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
XXX
For New T&T:
Xx. Xxxxxxx Xxx
Director, Finance & Business Administration
0/X, Xxx X&X Xxxxxx
Xxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx
Xxxx Xxxx
