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EXHIBIT 10.4
SALES AGREEMENT
THIS SALES AGREEMENT made this 31st day of October, 1997
BETWEEN:
NEWBRIDGE NETWORKS CORPORATION, a corporation incorporated under the laws of
Canada, with offices at 000 Xxxxx Xxxx, Xxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
("Newbridge")
and
TELEHUB NETWORK SERVICES CORP., with offices at 0000 Xxxxx Xxxx Xxxxxx,
Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx, XXX 00000 ("TeleHub")
1. SCOPE
1.1 For the purposes of this Agreement, "Products" means those products and
services to be delivered by Newbridge to TeleHub, including but not limited to
those described in the attached Exhibit A.
1.2 This Agreement also applies to all quotations, and any subsequent sales of
Products by Newbridge to TeleHub. Acceptance of TeleHub's order is made upon the
express understanding that it will be governed by the terms and conditions set
out herein, and that any additional or conflicting terms and conditions
accompanying TeleHub's order shall, absent express agreement to the contrary as
hereinafter provided, be void and of no force or effect. Any modifications to
these terms and conditions must be specifically agreed to in writing by an
authorized officer of each party. These terms and conditions shall be
applicable whether or not they are attached to or enclosed with the Products.
2. QUOTATION
Quoted prices will remain open for acceptance by the TeleHub for a period of
thirty (30) days from the date of quotation. Unless otherwise stated, prices
for the Products are firm but may be subject to adjustment for foreign
exchange, purchase or sales tax, customs tariff or other direct taxes, between
the date of quotation and the date of shipment.
3. ORDERS
TeleHub's orders are subject to final acceptance by Newbridge and Newbridge
reserves the right to accept or to reject any order from the TeleHub, in whole
or in part. TeleHub may not cancel any order. Newbridge may, without prejudice
to any other remedy which it may have at law or in equity, cancel or suspend
delivery of any uncompleted order in the event of non-payment or other material
breach of these terms and conditions by TeleHub, which event is not cured by
TeleHub within thirty (30) days of receipt of notice thereof from Newbridge.
Newbridge shall have no liability to TeleHub for any costs, losses, or damages
of any kind whatsoever arising as a result of any such suspension or
cancellation. Blanket orders will be accepted for annual quantity pricing,
provided that they are firm orders for a stated quantity, and delivery is
accepted by the TeleHub within one year from the date of blanket order entry.
4. TITLE AND DELIVERY
4.1 The Products shall be delivered F.C.A. (INCOTERMS: 1990) Newbridge's plant
or designated warehouse. Title and all liability for loss or damage shall pass
to TeleHub upon Newbridge's delivery of the Products to a common carrier for
shipment to TeleHub.
4.2 Absent express instructions from TeleHub, Newbridge shall, in its sole
discretion, determine best way shipment, routing and common carrier utilized.
Newbridge will use reasonable commercial efforts to ship orders within the time
quoted for shipment. Times quoted for shipment will date from acceptance by
Newbridge of TeleHub's order, and will be subject to the issuance of any
necessary import permits and licenses. In no event will Newbridge be liable
for any costs, losses or damages including, without limitation, reprocurement
costs arising out of or caused by delay in delivery or non-delivery of the
Products.
5. TAXES
All taxes (excluding taxes on the income of Newbridge or similar taxes), levies
or duties of any nature applicable to the sale, lease or license of the
Products shall be paid by TeleHub, or in lieu thereof, TeleHub shall provide
Newbridge with a tax exemption certificate acceptable to the taxing
authorities.
6. PAYMENTS
6.1 All orders are subject to credit approval prior to acceptance.
6.2 Newbridge will endeavor to arrange lease financing through Newbridge
Leasing (GE Capital) at mutually agreeable terms (the "Lease"). Each shipment
shall be considered a separate and independent transaction, and payment
therefore shall be made accordingly. In the event of any material default by
TeleHub, Newbridge may, without prejudice to any other rights that it may have
in law or in equity, decline to make further shipments. If, despite any
material default by TeleHub, Newbridge elects to continue to make shipments,
its action shall not constitute a waiver of any default by TeleHub or in any
way preclude Newbridge's right to exercise any other remedies available to it
in law or in equity.
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6.3 Interest shall accrue against any amount which remains unpaid by TeleHub
under this Agreement for more than thirty days from the date of invoice.
Interest shall be payable to Newbridge at the rate of 1.5% per month compounded
(19.6% per annum, actual rate), or the maximum allowed by law, whichever is
less, and shall be payable monthly in arrears.
7. WARRANTY
7.1 Hardware
7.1.1 Newbridge warrants that the Products which are hardware will, for a
period of twelve (12) months from December 11, 1997 (the "Warranty Period"):
(i) be free from defects in material, and (ii) comply with reasonable and
Newbridge's normal standards of workmanship. Newbridge further warrants that
its 36170 Mainstream ATM Backbone Switch will, for the Warranty Period,
comply in all material respects to: (i) the Newbridge brochure entitled
"36170 Mainstream ATMnet Backbone Switch", a copy of which is attached
hereto as Exhibit D.; and (B) the Newbridge document entitled
"MainStreetXpress 36170 Multiservices Switch, Release 2.2 and 2.3, General
Information Book", Newbridge part no. 91-2386-01-00-A. However, the Warranty
Period for the Products which will be identified on Exhibit B shall instead
be the shorter of: (i) twelve (12) months from the date of installation, or
(ii) twenty-four (24) months from the date of shipment. TeleHub shall
complete Schedule B no later than January 31, 1998. The Products listed in
Schedule B shall have a maximum value of ten million dollars ($10,000,000).
7.1.2 Newbridge shall incur no liability under the foregoing warranty
unless:
(a) the allegedly defective Products are returned prepaid to Newbridge
within fifteen (15) days of the date of discovery of the alleged
defect, in accordance with Newbridge's then current repair
procedures. Newbridge, at its sole option, may choose to instead to
repair the allegedly defective items at TeleHub's premises; and
(b) Newbridge's tests disclose that the alleged defect is due to defects
in material or workmanship.
7.1.3 The liability of Newbridge under this hardware warranty shall in any
event be limited, at Newbridge's option and expense, to either the
repair or replacement of the defective Product, or the reimbursement
of the purchase price paid by TeleHub to Newbridge for the defective
Products.
7.1.4 In no event will Newbridge be liable for damage to the Products
resulting from improper handling during or after shipment, misuse,
neglect, improper installation, operation or repair (other than by
authorized Newbridge personnel), alteration, accident, or for any
other cause not attributable to defects in materials or workmanship on
the part of Newbridge.
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7.2 Software
7.2.1 The warranties concerning the software supplied as a Product or as
part of a Product are set forth in Newbridge's Standard End User License
Agreement, as entered into between the parties on or about the same date as
the effective date of this Agreement (the "Software License Agreement").
7.2.2 Newbridge's sole obligation and Telehub's sole remedy for a breach of
this warranty shall be Newbridge's good faith efforts to rectify the non-
conformity or, if after reasonable efforts Newbridge is unable to rectify
the non-conformity, Newbridge shall accept return of the software (and any
hardware that cannot function without such software) and refund to TeleHub
the purchase price thereof. Newbridge shall have no obligation under this
warranty if the software is modified in a manner not expressly approved by
Newbridge, or if the software is used with hardware or software not supplied
or approved by Newbridge.
7.3 IN NO EVENT SHALL NEWBRIDGE'S LIABILITY TO TELEHUB OR TO ANY OTHER PARTY FOR
BREACH OF ANY OF THE FOREGOING WARRANTIES EXCEED THE PURCHASE PRICE PAID BY
CUSTOMER TO NEWBRIDGE FOR THE DEFECTIVE HARDWARE OR SOFTWARE PRODUCT, EXCEPT FOR
DIRECT DAMAGES SUFFERED BY TELEHUB DUE TO NEWBRIDGE'S GROSS NEGLIGENCE OR
WILFULL MISCONDUCT.
7.4 THE EXPRESS WARRANTIES SET OUT IN THIS SECTION 7 ARE IN LIEU OF ALL OTHER
WARRANTIES, REPRESENTATIONS OR CONDITIONS, EXPRESSED OR IMPLIED, INCLUDING
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR
THOSE ARISING FROM STATUTE OR USAGE OF TRADE. TELEHUB SHALL NOT MAKE ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER RELATING TO THE PRODUCTS OR
TO NEWBRIDGE, WHICH EXCEED THOSE MADE BY NEWBRIDGE IN THIS CLAUSE 7. SUBJECT TO
THESE RESTRICTIONS, TELEHUB MAY REFER TO THE PRODUCTS OR TO NEWBRIDGE AS PART OF
ITS OWN PRODUCTS.
8. INTELLECTUAL PROPERTY RIGHTS
8.1 TeleHub recognizes and acknowledges the great value of the goodwill
associated with the name and trade-marks of Newbridge, and the identification of
the Products therewith. TeleHub shall not obscure, effect or permit the removal
or alteration of any trademarks, patent numbers, labels, serial numbers or the
like affixed to any Product, related materials or packaging.
8.2 All rights, title, and interest in and to the designs, models, patterns,
specifications, copyrights, patents, trade-secrets, trade-marks and other
intellectual and industrial property in the Products, documentation and related
materials shall remain vested in
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Newbridge or its third party suppliers. TeleHub may make a reasonable number of
copies of the Product documentation as required for its internal use only,
TeleHub shall not otherwise copy, make extracts from, translate or otherwise
modify any of the Products, documentation or related materials provided by
Newbridge.
8.3 TeleHub expressly acknowledges and agrees that any software delivered as a
Product or as part of a Product is not sold, but rather is licensed to TeleHub
subject to the terms and conditions of the Software License Agreement.
8.4 If any software is being acquired hereunder by or on behalf of any unit or
agency of the United States Government, the following provision shall apply: If
the software is supplied to the Department of Defense, it shall be classified
as "Commercial Computer Software" and the United States Government is acquiring
only "restricted rights" in the software as defined in DFARS 227-7202-l(a) and
227.7202-3(a), or equivalent. If the Software is supplied to any other unit or
agency of the United States Government, rights will be defined in Clause
52.227-19 or 52.227-14 of the FAR, or if acquired by NASA, Clause
18-52,227-86(d) of the NASA Supplement to the FAR, or equivalent. If the
software was acquired under a contract subject to the October 1988 Rights in
Technical Data and Computer Software regulations, use, duplication and
disclosure by the Government is subject to the restrictions set forth in DFARS
252-227.7013(c)(1)(ii) 1988, or equivalent. The owner of the software is
Newbridge Networks Corporation, X.X. Xxx 00000, 000 Xxxxx Xxxx, Xxxxxx,
Xxxxxxx, Xxxxxx X0X 0X0.
9. INTELLECTUAL PROPERTY INDEMNITY
9.1 TeleHub shall indemnify and hold Newbridge harmless against any damage,
expense or loss resulting from any claims for actual or alleged infringement of
any Canadian or United States patent, copyright, trade-xxxx, trade secret or
other industrial or intellectual property rights resulting from unauthorized
use or modification of the Products by TeleHub, or from Newbridge's compliance
with TeleHub's designs, specifications or instructions, PROVIDED THAT:
(a) TeleHub is promptly notified of the claim in writing by Newbridge;
(b) TeleHub has sole control of the defense of any claim, and all negotiations
for its settlement or compromise; and
(c) Newbridge provides all such assistance as TeleHub may reasonably require.
9.2 The sale of Products by Newbridge does not convey any license by
implication, estoppel, or otherwise, under any patent, copyright, trade secret,
trade-xxxx or other intellectual or industrial property right.
9.3 Subject to Clause 9.1, Newbridge will defend or settle at its own expense,
any action brought against TeleHub to the extent that it is based on a claim
that the Products infringe any Canadian or United States patent, copyright,
trade-xxxx, trade secret or other industrial or intellectual property right.
Newbridge will pay all costs and damages
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resulting from such claim which are finally awarded against TeleHub, or agreed
to in settlement by Newbridge, PROVIDED THAT:
(a) Newbridge is promptly notified of the claim in writing by TeleHub;
(b) Newbridge has sole control of the defense of any claim, and all negotiations
for its settlement or compromise,
(c) the claim does not result from any unauthorized use or modification of the
Products, or from the unauthorized use of the Products in conjunction with
any hardware or software not supplied or approved by Newbridge; and
(d) TeleHub provides all such assistance as Newbridge may reasonably require.
9.4 In the event that the Products or any part thereof become, or in Newbridge's
opinion are likely to become the subject of a claim of infringement of a patent,
copyright trade secret, trademark or other industrial or intellectual property
right, or the use of the Products or any part thereof is part as a result of any
such claim, TeleHub shall permit Newbridge, at its option and expense, to either
(i) procure for TeleHub the right to continue using the Products; (ii) to
replace the affected Products with non-infringing Products; (iii) modify the
affected Products so that they become non-infringing; or (iv) remove the
affected Products, and refund the purchase price thereof, less a reasonable
amount for depreciation. Any replacement or modified Products provided by
Newbridge under this paragraph shall comply with the terms and conditions of
this Agreement. However, such replacement or modified Products will be subject
to the original warranty periods remaining (if any) for the Product they replace
or modify.
9.5 THE FOREGOING STATES THE ENTIRE LIABILITY OF NEWBRIDGE WITH RESPECT TO ANY
ACTUAL OR ALLEGED INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADE SECRET,
TRADEMARK, MASK WORK OR OTHER INTELLECTURAL OR INDUSTRIAL PROPERTY RIGHT.
10. RETURNS, ACCEPTANCE
Products may not be returned following their acceptance under the terms of the
Lease, without prior written authorization from Newbridge, which authorization
may be withheld for any reason, or subject to any such reasonable terms and
conditions as Newbridge may require. However, Newbridge shall authorize the
exchange of a Product due to configuration issues, provided that such Product:
(i) has not been opened or used and is undamaged; and (ii) is exchanged for a
Product of equal or greater cost.
11. ASSIGNMENT
11.1 TeleHub shall not assign or transfer (by operation of law or otherwise) its
order or any interest therein without the prior written comment of Newbridge.
11.2 While a Product is subject to the terms and conditions of the Lease,
TeleHub shall not assign or transfer (by operation of law or otherwise) the
Product, or any rights accruing under these terms and conditions, without
obtaining the prior written consent of
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Newbridge (which shall not be unreasonably withheld), and complying with the
terms and conditions of the Lease. However, with respect to any future
restructuring or organization of TeleHub's business, Newbridge will not
unreasonably withhold its consent, and shall make reasonable commercial
efforts to assist TeleHub in obtaining any consents that may be required by the
terms of the Lease.
11.3 For those Products that are no longer subject to the terms and conditions
of the Lease, TeleHub may transfer the Products, subject to the terms and
conditions of the Software License Agreement.
12. LIMITATION OF LIABILITY
12.1 EXCEPT AS EXPRESSLY PROVIDED HEREIN, IN NO EVENT WHATSOEVER, REGARDLESS OF
THE FORM OR CAUSE OF ACTION WHETHER IN CONTRACT OR TORT OR THE NUMBER OF CLAIMS,
AND WHETHER IN RESPECT OF A BREACH OR DEFAULT IN THE NATURE OF A BREACH OF
CONDITION OR FUNDAMENTAL TERM OR A FUNDAMENTAL BREACH OR AS A RESULT OF
NEGLIGENCE, SHALL NEWBRIDGE, ITS EMPLOYEES', DIRECTORS', OFFICERS' AND AGENTS'
TOTAL COLLECTIVE LIABILITY TO TELEHUB FOR ANY CLAIM EXCEED THE AMOUNT PAID FOR
THE SPECIFIC ITEM OR PRODUCT THAT IS THE SUBJECT MATTER OF OR THAT IS DIRECTLY
RELATED TO THE CLAIM.
12.2 NEWBRIDGE, ITS EMPLOYEES, AGENTS, OFFICERS AND DIRECTORS SHALL NOT BE
LIABLE IN ANY WAY WHATSOEVER, WHETHER AS A RESULT OF A CLAIM OR ACTION IN
CONTRACT OR TORT OR OTHERWISE FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR
PUNITIVE DAMAGES, OR FOR ANY LOST PROFITS OR LOST BUSINESS REVENUE, LOST
BUSINESS, FAILURE TO REALIZE EXPECTED SAVINGS, OR OTHER COMMERCIAL OR ECONOMIC
LOSS OF ANY KIND WHATSOEVER, OR FOR ANY DAMAGES, DIRECT OR INDIRECT, SPECIAL OR
CONSEQUENTIAL ARISING OUT OF ANY CLAIM AGAINST TELEHUB BY ANY PERSON WHETHER OR
NOT SUCH DAMAGES ARE FORESEEABLE AND WHETHER OR NOT NEWBRIDGE, ITS EMPLOYEES,
AGENTS, OFFICERS OR DIRECTORS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
12.3 THE FOREGOING PROVISIONS LIMITING THE LIABILITY OF NEWBRIDGE'S EMPLOYEES,
AGENTS, OFFICERS, AND DIRECTORS SHALL BE DEEMED TO BE TRUST PROVISIONS FOR THE
BENEFIT OF SUCH EMPLOYEES, OFFICERS, DIRECTORS, AND AGENTS, AND SHALL BE
ENFORCEABLE BY SUCH AS TRUST BENEFICIARIES.
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13. HAZARDOUS USES PROHIBITION
TeleHub acknowledges that Newbridge products are intended for standard
commercial uses. Without the appropriate network design engineering, the
Products must not be use, sold, licensed, or otherwise distributed for use in
any hazardous environments requiring fail safe performance, such as in the
operation of nuclear facilities, aircraft navigation or communications systems,
air traffic control, direct life support machines, weapons systems, or any other
application in which the failure of the Products could lead directly to death,
personal injury, or severe physical or environmental damage. TeleHub hereby
agrees that the use, sale, license or other distribution of the Products for any
such application without the prior written consent of Newbridge shall be at
TeleHub's sole risk. TeleHub agrees to defend and hold Newbridge harmless from
any claims for loss, costs, damage, expense or other liabilities which may arise
out of or in connection with the use, sale, license or other distribution of the
Products for such applications.
14. EXPORT RESTRICTIONS
Newbridge and TeleHub shall comply with all export regulations pertaining to the
Products in effect from time to time. Without limiting the generality of the
foregoing, TeleHub expressly warrants that it will not directly or indirectly
export, re-export, or transship the Products or any part thereof in violation of
any export laws, rules or regulations of Canada, the United States or the United
Kingdom.
15. INTERPRETATION
This Agreement and the Software License constitute the entire agreement between
the parties with respect to the subject matter hereof. Any modification of these
terms and conditions shall be in writing, and shall be signed by each party's
authorized representative. This Agreement shall be governed by the domestic laws
of the Province of Ontario, Canada. The parties expressly exclude the provisions
of the United Nations Convention on Contracts for the International Sale of
Goods (the Vienna Convention, 1980), from the terms of this Agreement.
16. RESOLUTION OF TECHNICAL PROBLEMS
(a) Subject to section 16(b), Newbridge agrees to promptly resolve all the
technical problems with the Products identified in Exhibit "C", attached hereto,
which are customer service-affecting. The parties will continue to work together
to determine suitable resolutions for all other technical problems with the
Products identified in Exhibit C.
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(b) TeleHub agrees to provide reasonable assistance and cooperation to
Newbridge as Newbridge resolves the technical problems referenced in section
16(a).
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement.
NEWBRIDGE NETWORKS TELEHUB NETWORK
CORPORATION SERVICES CORP.
X. XxXxxxxx
---------------------------- ---------------------------
(Print) (Print)
/s/ X. XxXxxxxx /s/ Xxxxxxx XxXxxxxxxx
---------------------------- ---------------------------
(Signature) (Signature)
---------------------------- ---------------------------
(Title) (Title)
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(C) Start of Service Wiltel's obligation to provide and Customer's
obligation to accept and pay for non-usage sensitive charges for Services
shall be binding to the extent provided for in this Agreement upon the
submission of an acceptable Service Request to Wiltel by Customer.
Customer's obligation to pay for usage sensitive charges for Switched
Services shall commence with respect to any Service as of the earlier of (i)
the "Requested Service Date" set forth in each Service Request, or (ii) the
date the Service in question is made available to Customer and used ("START
OF SERVICE"). Start of Service for particular Services shall be further
described in the Service Schedule relevant to the Switched Services in
question.
(D) Service Schedules Services to be provided under this Agreement shall be
described in the Wiltel Service Schedule which is subscribed to by an
authorized representative of WilTel and Customer (THE "SERVICE SCHEDULE").
The Service Schedule shall become a part of this Agreement to the extent
that it describes the particular Services therefor, specific terms and other
information necessary or appropriate for Wiltel to provide such Service to
Customer.
(E) Service Requests Customer's requests to initiate or cancel Services
shall be described in an appropriate WilTel Service Request ("SERVICE
REQUESTS"). Service Requests may consist of machine readable tapes,
facsimiles or other means approved by Wiltel. Further, Service Requests
shall specify all reasonable information, as determined by Wiltel, necessary
or appropriate for Wiltel to provide the Service(s) in question, which shall
include without limitation, the type, quantity and end point(s) (when
necessary) of circuits comprising a Service Interconnection as described in
the applicable Service Schedules, or automatic number identification ("ANI")
information relevant to the Services(s), the Requested Service Date, and
charges, if any, relevant to the Services described in the Service Request.
After Wiltel's receipt and verification of a valid Service Request for
SWITCHED Service (as defined in the Service Schedule) requiring a change in
the primary interexchange carrier ("PIC"), Wiltel agrees to (i) submit the
ANI (s) relevant to such Service Requests to the following local exchange
carriers (LECs") (with which WilTel currently has electronic interface
capabilities) within ten (10) days: Ameritech, Xxxx Atlantic,
BellSouth, Nynex, Pacific Xxxx, Southwestern Xxxx, US West, GTE and United,
and (ii) submit the ANI(s) relevant to such Service Requests to those LECs
with which WilTel does not have electronic interface capabilities within a
reasonable time.
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2. CANCELLATION.
(A) Cancellation Charge At any time after the Effective Date, Customer may
cancel this Agreement if Customer provides written notification thereof to
WilTel not less than thirty (30) days prior to the effective date of
cancellation. In such case (or in the event WilTel terminates this Agreement
as provided in Section 8), Customer shall pay to WilTel all charges for
Services provided through the effective date of such cancellation plus a
cancellation charge (THE "CANCELLATION CHARGE") equal to one hundred percent
(100%) of Customer's commitment(s), if any, (as described in the PET) that
would have become due for the unexpired portion of the Service Term.
(B) Liquidated Damages It is agreed that WilTel's damages in the event
Customer cancels this Agreement shall be difficult or impossible to
ascertain. The provision for a cancellation charge in Subsection 2(A) above
is intended, therefore, to establish liquidated damages in the event of a
cancellation and is not intended as a penalty.
(C) Cancellation Without Charge Notwithstanding anything to the contrary
contained in subsection 2(A) above, Customer may cancel this Agreement
without incurring any cancellation charge if (i) WilTel fails to provide a
network as warranted in Section 9 below; (ii) WilTel fails to deliver call
detail records promptly based on the frequency selected by Customer (i.e.,
monthly, weekly or daily); or (iii) WilTel fails to submit ANI(s) relevant to
such Service Requests to the LECs within the time period described in
Subsection 1(E) above. Provided, however, Customer must give WilTel written
notice of any such default and an opportunity to cure such default within
five (5) days of the notice. In the event WilTel fails to cure any such
default within the five-day period on more than three (3) occasions within
any six (6) month period, Customer may cancel this Agreement without
incurring any cancellation charge.
3. CUSTOMER'S END USERS.
(A) End Users Customer will obtain and upon WilTel's request provide WilTel
(within two (2) business days of the date of the request) a written Letter of
Agency ("LOA") acceptable to WilTel [or with any other means approved by the
Federal Communications Commission ("FCC")], for each ANI indicating the
consent of the end users of Customer ("END USERS") to be served by Customer
and transferred (by way of change of such End User's designated PIC) to the
WilTel network prior to order processing. Each LOA will provide, among other
things, that the End Users have consented to the transfer being performed by
Customer or Customer's designee. When applicable, Customer will be
responsible for notifying End
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Users, in writing (or by any other means approved by the FCC) that (i) a
transfer charge will be reflected on their LEC xxxx for effecting a change
in their primary interexchange carrier ("PIC"), (ii) the entity name under
which their interstate, intrastate and/or operator services will be billed
(if different from Customer), and (iii) the "primary" telephone number(s) to
be used for maintenance and questions concerning their long distance service
and/or billing. Customer agrees to send WilTel a copy of the documentation
Customer uses to satisfy the above requirements promptly upon request of
WilTel. WilTel may change the foregoing requirements for Customer's
confirming orders and/or for notifying End Users regarding the transfer
charge at any time in order to conform with applicable FCC and state
regulations. Provided, however, Customer will be solely responsible for
ensuring that the transfer of End Users to the WilTel network conforms with
applicable FCC and state regulations, including without limitation, the
regulations established by the FCC with respect to verification of orders
for long distance service generated by telemarketing as promulgated in 47
C.F.R., Part 64, Subpart K, Section 64.1100 or any successor regulation(s).
(B) TRANSFER CHARGES/DISPUTED TRANSFERS Customer agrees that it is
responsible for (i) all charges incurred by WilTel to change the PIC of End
users to the WilTel network, (ii) all charges incurred by WilTel to change
End Users back to their previous PIC arising from disputed transfers to the
WilTel network plus an administrative charge equal to twenty percent (20%)
of such charges, and (iii) any other damages suffered by or awards against
WilTel resulting from disputed transfers.
(C) Excluded ANIs WilTel has the right to reject any ANI supplied by
Customer for any of the following reasons: (i) WilTel is not authorized to
provide or does not provide long distance services in the particular
jurisdiction in which the ANI is located, (ii) a particular ANI submitted by
Customer is not in proper form, (iii) Customer is not certified to provide
long distance services in the jurisdiction in which the ANI is located, (iv)
Customer is in default of this Agreement, (v) Customer fails to cooperate
with WilTel in implementing reasonable verification processes determined by
WilTel to be necessary or appropriate in the conduct of business, or (vi)
any other circumstance reasonably determined by WilTel which could adversely
affect WilTel's performance under this Agreement or WilTel's general ability
to transfer its other customers or other end users to the WilTel network,
including without limitation, WilTel's ability to electronically effect PIC
changes with the LECs. In the event WilTel rejects an ANI, WilTel will
notify Customer as soon as possible of its decision specifically describing
the rejected ANI and the reason(s) for rejecting that
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ANI, and will not incur any further liability under this Agreement with
regard to that ANI. Further, any ANI requested by Customer for Switched
Services may be deactivated by WilTel if no Switched Services xxxxxxxx
relevant thereto are generated in any three (3) consecutive calendar
month/billing periods. WilTel will be under no obligation to accept ANIs
within the three (3) full calendar month period preceding the scheduled
expiration of the Service Term.
(D) Records Customer will maintain documents and records ("RECORDS")
supporting Customer's re-sale of Switched Services, including, but not
limited to, appropriate and valid LOAs from End Users for a period of not
less than (twelve) 12 months or such other longer period as may be required
by applicable law, rule or regulation. Customer shall indemnify WilTel for
any costs, charges or expenses incurred by WilTel arising from disputed PIC
selections involving Switched Services to be provided to Customer for which
Customer cannot produce an appropriate LOA relevant to the ANI and PIC
charge in question, or when WilTel is not reasonably satisfied that the
validity of a disputed LOA has been resolved.
(E) Customer Service Customer will be solely responsible for billing the
End Users and providing the End Users with customer service. Customer agrees
to immediately notify WilTel in the event an End User notifies Customer of
problems associated with the Services, including without limitation, excess
noise, echo, or loss of Service.
4. CUSTOMER'S RESPONSIBILITIES.
(A) Expedite Charges In the event Customer requests expedited Services
and/or changes to Service Orders and WilTel agrees to such request, WilTel
will pass through the charges assessed by any supplying parties (e.g., local
access providers) for such expedited charges and/or changes to Service
Orders involved at the same rate to Customer. WilTel may further condition
its performance of such request upon Customer's payment of such additional
charges to WilTel.
(B) Fraudulent Calls Customer shall indemnify and hold WilTel harmless
from all costs, expenses, claims or actions arising from fraudulent calls of
any nature which may comprise a portion of the Services to the extent that
the party claiming the call(s) in question to be fraudulent is (or had been
at the time of the call) an End User of the Services through Customer or an
end user of the Services through Customer's distribution channels. Customer
shall not be excused from paying WilTel for Services provided to Customer or
any portion thereof on the basis that
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fraudulent calls comprised a corresponding portion of the Services. In the
event WilTel discovers fraudulent calls being made (or reasonably believes
fraudulent calls are being made), nothing contained herein shall prohibit
WilTel from taking immediate action (without notice to Customer) that is
reasonably necessary to prevent such fraudulent calls from taking place,
including without limitation, denying Services to particular ANIs or
terminating Services to or from specific locations.
5. CHARGES AND PAYMENT TERMS.
(A) Payment WilTel xxxxxxxx for Services hereunder are made on a monthly
basis (or such other basis as may be mutually agreed to by the parties)
following Start of Service. Subject to Subsection 5(D) below, Services shall
be billed at the rates set forth in the PET and Service Requests, as the case
may be. Discounts, if any, applicable to the rates for certain Services are
set forth in the PET. Customer will pay all undisputed charges relative to
each WilTel invoice for Services within thirty (30) days of the invoice date
set forth on each WilTel invoice to Customer ("DUE DATE"). If payment is not
received by WilTel on or before the Due Date, Customer shall also pay a late
fee in the amount of the lessor of one and one-half percent (1 1/2%) of the
unpaid balance of the charges for Services rendered per month or the maximum
lawful rate under applicable state law.
(B) Definitions Time of day rate periods (including WilTel Recognized
National Holidays) will be as described in WilTel's F.C.C. Tariff No. 5.
(c) Taxes Customer acknowledges and understands that WilTel computes all
charges herein exclusive of any applicable federal, state or local use,
excise, gross receipts, sales and privilege taxes, duties, fees or similar
liabilities (other than general income or property taxes), whether charged to
or against WilTel or Customer because of the Services furnished to Customer
("ADDITIONAL CHARGES"). Customer shall pay such Additional Charges in
addition to all other charges provided for herein.
(D) Modification of Charges WilTel reserves the right to eliminate Services
and/or modify charges for Services (which charge modifications shall not
exceed then-current generally available WilTel charges for comparable
services), upon not less than sixty (60) days prior notice to Customer, which
notice will state the effective date for the charge modification. In the
event WilTel notifies Customer of the elimination of a particular Service
and/or an increase in the charges, Customer may terminate this Agreement,
without incurring a cancellation charge only with respect to the Services
affected by the increase in charges. In
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order to cancel such Services, Customer must notify WilTel, in writing, at
least thirty (30) days prior to the effective date of the increase in charges.
Further, in the event Customer cancels its subscription to a particular Service
as described in this Subsection 5(D), WilTel and Customer agree to negotiate in
good faith concerning Customer's minimum monthly commitment, if any, described
in the PET.
(E) Billing Disputes Notwithstanding the foregoing, late fees shall apply
(but shall not be due and payable for a period of sixty (60) days following the
Due Date therefor) for amounts reasonably disputed by Customer, provided
Customer: (i) pays all undisputed charges on or before the Due Date, (ii)
presents a written statement of any billing discrepancies to WilTel in
reasonable detail on or before the Due Date of the invoice in question, and
(iii) negotiates in good faith with WilTel for the purpose of resolving such
dispute within said sixty (60) day period. In the event such dispute is resolved
in favor of WilTel, Customer agrees to pay WilTel the disputed amounts together
with any applicable late fees within ten (10) days of the resolution. In the
event such dispute is resolved in favor of Customer, Customer will receive a
credit for the disputed charges in question and the applicable late fees. In the
event the dispute can not be resolved within such sixty (60) day period (unless
WilTel has agreed in writing to extend such period) all disputed amounts
together with late fees shall become due and payable, and this provision shall
not be construed to prevent Customer from pursuing any available legal remedies.
WilTel shall not be obligated to consider any Customer notice of billing
discrepancies which are received by WilTel more than sixty (60) days following
the Due Date of the invoice in question.
(F) Suspension of Service In the event all undisputed charges due pursuant to
WilTel's invoice are not paid in full by the Due Date or disputed charges owed
by Customer, if any, are not paid in full by the time specified as described in
Subsection 5(E) above, WilTel shall have the right, after giving Customer ten
(10) days prior notice and opportunity to pay such charges, to suspend all or
any portion of the Services to Customer ("SUSPENSION NOTICE") until such time
(designated by WilTel in its Suspension Notice) as Customer has paid in full all
undisputed charges then due to WilTel, including any late fees. Following such
payment, WilTel shall reinstitute Services to Customer only when Customer
provides WilTel with satisfactory assurance of Customer's ability to pay for
Services (i.e., a deposit, letter of credit or other means acceptable to WilTel)
and Customer's advance payment of the cost of reinstituting Services. If
Customer fails to make the required payment by the date set forth in the
Suspension Notice, Customer will be deemed
15
to have canceled the Services suspended effective as of the date of
suspension. Such cancellation shall not relieve Customer for payment of
applicable cancellation charges as described in Section 2.
6. CREDIT: Customer's execution of this Agreement signifies Customer's
acceptance of WilTel's initial and continuing credit approval procedures and
policies. WilTel reserves the right to withhold initiation or full
implementation of Services under this Agreement pending WilTel's initial
satisfactory credit review and approval thereof which may be conditioned upon
terms specified by WilTel, including, but not limited to, security for payments
due hereunder in the form of a cash deposit or other means. WilTel reserves the
right to modify its requirements, if any, with respect to any security or other
assurance provided by Customer for payments due hereunder in light of
Customer's actual usage when compared to projected usage levels upon which any
security or assurance requirement was based.
7. CREDITWORTHINESS: If at any time there is a material adverse change in
Customer's creditworthiness, then in addition to any other remedies available to
WilTel, WilTel may elect, in its sole discretion, to exercise one or more of the
following remedies (i) cause Start of Service for Services described in a
previously executed Service Request to be withheld; (ii) cease providing
Services pursuant to a Suspension Notice in accordance with Section 5(F); (iii)
decline to accept a Service Request or other requests from Customer to provide
Services which WilTel may otherwise be obligated to accept and/or (iv) condition
its provision of Services or acceptance of a Service Request on Customer's
assurance of payment which shall be a deposit or such other means to establish
reasonable assurance of payment. An adverse material change in Customer's
creditworthiness shall include, but not be limited to: (i) Customer's default of
its obligations to WilTel under this or any other agreement with WilTel; (ii)
failure of Customer to make full payment of all undisputed charges due hereunder
on or before the Due Date on three (3) or more occasions during any period of
twelve (12) or fewer months or Customer's failure to make such payment on or
before the Due Date in any two (2) consecutive months; (iii) acquisition of
Customer (whether in whole or by majority or controlling interest) by an entity
which is insolvent, which is subject to bankruptcy or insolvency proceedings,
which owes past due amounts to WilTel or any entity, affiliated with WilTel or
which is a materially greater credit risk than Customer; or, (iv) Customer's
being subject to or having filed for bankruptcy or insolvency proceedings or the
legal insolvency of Customer.
8. REMEDIES FOR BREACH. In the event Customer is in material breach of this
Agreement, including without limitation, failure to pay all undisputed charges
due hereunder by the date stated in the Suspension
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Notice described in Subsection 5(F), WilTel shall have the right, after giving
Customer five (5) days prior notice and opportunity to cure, and in addition to
foreclosing any security interest WilTel may have, to (i) terminate this
Agreement; (ii) withhold billing information from Customer; and/or (iii) contact
the End Users (for whom calls are originated and terminated solely over
facilities comprising the WilTel network) directly and xxxx such End Users
directly until such time as WilTel has been paid in full for the amount owed by
Customer. If Customer fails to make payment by the date stated in the Suspension
Notice and WilTel, after giving Customer five (5) days prior notice, terminates
this Agreement as provided in this Section 8, such termination shall not relieve
Customer for payment of applicable cancellation charges as described in Section
2 above.
9. WARRANTY. WilTel will use reasonable efforts under the circumstances to
maintain its overall network quality. The quality of Services provided hereunder
shall be consistent with telecommunications common carrier industry standards,
government regulations and sound business practices. WILTEL MAKES NO OTHER
WARRANTIES ABOUT THE SERVICES PROVIDED HEREUNDER, EXPRESS OR IMPLIED, INCLUDING
BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE.
10. LIABILITY; GENERAL INDEMNITY; REIMBURSEMENT.
(A) Limited Liability IN NO EVENT WILL EITHER PARTY HERETO BE LIABLE TO THE
OTHER PARTY FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL LOSSES OR
DAMAGES, INCLUDING WITHOUT LIMITATION, LOSS OF REVENUE, LOSS OF CUSTOMERS OR
CLIENTS, LOSS OF GOODWILL OR LOSS OF PROFITS ARISING IN ANY MANNER FROM THIS
AGREEMENT AND THE PERFORMANCE OR NONPERFORMANCE OF OBLIGATIONS HEREUNDER.
(B) General Indemnity In the event parties other than Customer (e.g.,
Customer End Users) shall have use of the Services through Customer, then
Customer agrees to forever indemnify and hold WilTel, its affiliated
companies and any third-party provider or operator of facilities employed in
provision of the Services harmless from and against any and all claims,
demands, suits, actions, losses, damages, assessments or payments which those
parties may assert arising out of or relating to any defect in the Services.
(C) Reimbursement Customer agrees to reimburse WilTel for all reasonable
costs and expenses incurred by WilTel due to WilTel's direct participation
(either as party or witness) in any administrative, regulatory or criminal
proceeding concerning Customer if WilTel's involvement in said proceeding is
based solely on WilTel's provision of Services to Customer.
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11. FORCE MAJEURE. If WilTel's performance of this Agreement or any obligation
hereunder is prevented, restricted or interfered with by causes beyond its
reasonable control including, but not limited to, acts of God, fire, explosion,
vandalism, cable cut, storm or other similar occurrence, any law, order,
regulation, direction, action or request of the United States government, or
state or local governments, or of any department, agency, commission, court,
bureau, corporation or other instrumentality of any one or more such
governments, or of any civil or military authority, or by national emergency,
insurrection, riot, war, strike, lockout or work stoppage or other labor
difficulties, or supplier failure, shortage, breach or delay, then WilTel shall
be excused from such performance on a day-to-day basis to the extent of such
restriction or interference. WilTel shall use reasonable efforts under the
circumstances to avoid or remove such causes or nonperformance and shall proceed
to perform with reasonable dispatch whenever such causes are removed or cease.
12. STATE CERTIFICATION. Customer warrants that in all jurisdictions in which
it provides long distance services that require certification, it has obtained
the necessary certification from the appropriate governmental authority.
Further, if required by WilTel, Customer agrees to provide proof of such
certification acceptable to WilTel. In the event Customer is prohibited, either
on a temporary or permanent basis, from continuing to conduct its
telecommunications operations in a given state, Customer shall (i) immediately
notify WilTel by facsimile, and (ii) send written notice to WilTel within
twenty-four (24) hours of such prohibition.
13. INTERSTATE/INTRASTATE SERVICE. Except with respect to Services specifically
designated as intrastate Services or international Services, the rates provided
to Customer in a Service Schedule are applicable only to Services if such
Services are used for carrying interstate telecommunications (i.e., Services
subject to FCC jurisdiction). WilTel shall not be obligated to provide Services
with end points within a single state or Services which originate/terminate at
points both of which are situated within a single state. In those states where
WilTel is authorized to provide intrastate service (i.e., telecommunications
transmission services subject to the jurisdiction of state regulatory
authorities), WilTel will, at its option, provide intrastate Services pursuant
to applicable state laws, regulations and applicable tariff, if any, filed by
WilTel with state regulatory authorities as required by applicable law.
14. AUTHORIZED USE OF WILTEL NAME. Without WilTel's prior written consent,
Customer shall not (i) refer to itself as an authorized representative of WilTel
whenever it refers to the Services in promotional, advertising or other
materials, or (ii) use WilTel's logos, trade marks, service marks, or any
variations thereof in any of
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its promotional, advertising or other materials. Additionally, Customer shall
provide to WilTel for its prior review and written approval, all promotions,
advertising or other materials or activity using or displaying WilTel's name or
the Services to be provided by WilTel. Customer agrees to change or correct, at
Customer's expense, any such material or activity which WilTel, in its sole
judgment, determines to be inaccurate, misleading or otherwise objectionable.
Customer is explicitly authorized to only use the following statements in its
sales literature or if in response to the inquiry by Customer's end user: (i)
Customer utilizes the WilTel network", (ii) "Customer utilizes WilTel's
facilities", (iii) "WilTel provides only the network facilities", and (iv)
"WilTel is our network services provider".
15. NOTICES. Notices under this Agreement shall be in writing and delivered to
the person identified below at the offices of the parties as they appear below
or as otherwise provided for by proper notice hereunder. Customer shall notify
WilTel in writing if Customer's billing address is different than the address
shown below. The effective date for any notice under this Agreement shall be the
date of actual receipt of such notice by the appropriate party, notwithstanding
the date of mailing or transmittal via hand delivery or facsimile.
IF TO WILTEL: WorldCom Network Services, Inc.
Xxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, XX 00000
Attn: Carrier Sales Dept.
IF TO CUSTOMER: Telehub Communications, Corp.
0000 Xxx-Xxxxx Xxxx -
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxx
Telephone No. (000) 000-0000
Fax No.: (000) 000-0000
16. NO-WAIVER. No term or provision of this Agreement shall be deemed waived
and no breach or default shall be deemed excused unless such waiver or consent
shall be in writing and signed by the party claimed to have waived or consented.
A consent to waiver of or excuse for a breach or default by either party,
whether express or implied, shall not constitute a consent to, waiver of, or
excuse for any different or subsequent breach or default.
17. PARTIAL INVALIDITY; GOVERNMENT ACTION.
(A) Partial Invalidity If any part of any provision of this Agreement or
any other agreement, document or writing given pursuant to or in connection
with this Agreement shall be invalid or unenforceable under applicable law,
rule or regulation, that
19
part shall be ineffective to the extent of such invalidity only, without in
any way affecting the remaining parts of that provision or the remaining
provisions of this Agreement. In such event, Customer and WilTel will
negotiate in good faith with respect to any such invalid or unenforceable
part to the extent necessary to render such part valid and enforceable.
(B) Government Action Upon thirty (30) days prior notice, either party
shall have the right, without liability to the other, to cancel an affected
portion of the Service if any material rate or term contained herein and
relevant to the affected Service is substantially changed (to the detriment
of the terminating party) or found to be unlawful or the relationship between
the parties hereunder is found to be unlawful by order of the highest court
of competent jurisdiction to which the matter is appealed, the FCC, or other
local, state or federal government authority of competent jurisdiction.
18. EXCLUSIVE REMEDIES. Except as otherwise specifically provided for herein,
the remedies set forth in this Agreement comprise the exclusive remedies
available to either party at law or in equity.
19. USE OF SERVICE. Upon WilTel's acceptance of a Service Request hereunder,
WilTel will provide the Services specified therein to Customer upon condition
that the Services shall not be used for any unlawful purpose. The provision of
Services will not create a partnership or joint venture between the parties or
result in a joint communications service offering to any third parties, and
WilTel and Customer agree that this Agreement, to the extent it is subject to
FCC regulation, is an inter-carrier agreement which is not subject to the filing
requirements of Section 211(a) of the Communications Act of 1934 (47 U.S.C.
Section 211(a)) as implemented in 47 C.F.R. Section 43.51.
20. CHOICE OF LAWS FORUM.
(A) Law This Agreement shall be construed under the laws of the State of
Oklahoma without regard to choice of law principles.
(B) Forum Any legal action or proceeding with respect to this Agreement may
be brought in the Courts of the State of Oklahoma in and for the County of
Tulsa or the United States of America for the Northern District of Oklahoma.
By execution of this Agreement, both Customer and WilTel hereby submit to
such jurisdiction, hereby expressly waiving whatever rights may correspond to
either of them by reason of their present or future domicile. In furtherance
of the foregoing, Customer and WilTel hereby agree to service by U.S. Mail at
the notice addresses referenced in Section 15. Such service shall be deemed
effective upon the earlier of actual receipt or seven (7) days following
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the date of posting.
21. PROPRIETARY INFORMATION.
(A) Confidential Information The parties understand and agree that the
terms and conditions of this Agreement (but not the existence thereof), all
documents referenced herein (including invoices to Customer for Services
provided hereunder), communications between the parties regarding this
Agreement or the Services to be provided hereunder (including price quotes to
Customer for any Services proposed to be provided or actually provided
hereunder), as well as such information relevant to any other agreement
between the parties (collectively Confidential Information), are confidential
as between Customer and WilTel.
(B) Limited Disclosure A party shall not disclose Confidential Information
unless subject to discovery or disclosure pursuant to legal process, or to
any other party other than the directors, officers, and employees of a party
or a party's agents including their respective attorneys, consultants,
brokers, lenders, insurance carriers or bona fide prospective purchasers who
have specifically agreed in writing to nondisclosure of the terms and
conditions hereof. Any disclosure hereof required by legal process shall only
be made after providing the non-disclosing party with notice thereof in order
to permit the non-disclosing party to seek an appropriate protective order or
exemption. Violation by a party or its agents of the foregoing provisions
shall entitle the non-disclosing party, at its option, to obtain injunctive
relief without a showing of irreparable harm or injury and without bond.
(C) Press Releases Except as provided in Section 14 below, the parties
further agree that any press release, advertisement or publication generated
by a party regarding this Agreement, the Services provided hereunder or in
which a party desires to mention the name of the other party or the other
party's parent or affiliated company(ies), will be submitted to the
non-publishing party for its written approval prior to publication.
(D) Survival of Confidentiality The provisions of this Section 21 will be
effective as of the date of this Agreement and remain in full force and
effect for a period which will be the longer of (i) one (1) year following
the date of this Agreement, or (ii) one (l) year from the termination of all
Services hereunder.
22. SUCCESSORS AND ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors or assign's,
provided, however, that Customer shall not
21
assign or transfer its rights or obligations under this Agreement without the
prior written consent of WilTel, which consent shall not be unreasonably
withheld or delayed, and further provided that any assignment or transfer
without such consent shall be void.
23. GENERAL.
(A) Survival of Terms The terms and provisions contained in this Agreement
that by their sense and context are intended to survive the performance
thereof by the parties hereto shall so survive the completion of performance
and termination of this Agreement, including, without limitation, provisions
for indemnification and the making of any and all payments due hereunder.
(B) Headings Descriptive headings in this Agreement are for convenience
only and shall not affect the construction of this Agreement.
(C) Industry Terms Words having well-known technical or trade meanings
shall be so construed, and all listings of items shall not be taken to be
exclusive, but shall include other items, whether similar or dissimilar to
those listed, as the context reasonably requires.
(D) Rule of Construction No rule of construction requiring interpretation
against the drafting party hereof shall apply in the interpretation of this
Agreement.
24. ENTIRE AGREEMENT. This Agreement consists of (i) all the terms and
conditions contained herein, and, (ii) all documents incorporated herein
specifically by reference. This Agreement constitutes the complete and
exclusive statement of the understandings between the parties and supersedes
all proposals and prior agreements (oral or written) between the parties
relating to Service provided hereunder. No subsequent agreement between the
parties concerning the Services shall be effective or binding unless it is made
in writing and subscribed to by authorized representatives of Customer and
WilTel.
IN WITNESS WHEREOF, the parties have executed this Telecommunications
Services Agreement on the date first written above.
WORLDCOM NETWORK SERVICES, INC. TELEHUB COMMUNICATIONS CORP.
d/b/a WilTel
By: By: /s/
------------------------- -----------------------------
(Signature) (Signature)
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/s/ Xxxxxx X. Xxxxx - (DICK)
---------------------------------- -------------------------------------
(Print Name) (Print Name)
Vice President Sales/Marketing
---------------------------------- -------------------------------------
(Title) (Title)
