Agreement to Operate International Telecommunications between
CANTV and FaciliCom International
97-CJ-162 / VEMSC - DNI - 13
This agreement to operate international telecommunications service
(hereinafter the Agreement) is by and between the company known as FaciliCom
International LLC, hereinafter FaciliCom a company constituted under the laws
of the United States of America with address at 0000 Xxx Xxxx Xxxxxx, X.X.,
0xx Xxxxx, Xxxxxxxxxx, X.X. 00000 XXX and represented by Xx. Xxxxx Xxxxx, in
his capacity as Executive Vice President of Business Development; and the
Compania Anonima Nacional de Telefonos de Venezuela, hereinafter CANTV, a
company constituted and established under the laws of the Republic of
Venezuela with address at Centro Nacional de Telecomunicaciones at Xxxxxxx
Xxxxxxxxxx, xxxxxx Xxxxxxxxxxx, Xxxxxxx, Xxxxxxxxx, Xxxxxxxx Xxxxxx 0000-X,
represented by Xx. Xxxxxx Xxxxxxx in his capacity as Vice President of
Marketing and Client Services.
Recognizing the nature and legal capacity with which they appear and being in
agreement, the Parties agree:
Whereas,
FaciliCom is a telecommunications company duly authorized to provide
international telecommunications services to clients in the United States of
America.
CANTV is a telecommunications company duly authorized to provide international
telecommunications services to clients in Venezuela and;
In such capacities FaciliCom and CANTV would like to jointly provide
international telecommunications services between the United States of North
America and the territory of Venezuela, for this action and in common
agreement the Parties agree to comply with the standard to which these
services are held and which are included in the following:
Clauses
1. General Matters
Each Party recognizes that the legal dispositions and regulations are
those dictated by the laws of Venezuela except that in express form and
via a modification of this agreement the parties agree to the contrary.
2
2. Establishment of Services
The Parties agree to maintain and increase telecommunications services
between the United States of America and the Republic of Venezuela such
that the services are highly reliable. Such services will be provided in
conformity with the terms and conditions of this agreement and its
annexes.
FaciliCom's International Telephone Central Office(s) will be used for
access to outgoing telephone traffic from the United States. CANTV's
International Telephone Central Office(s) will be used for incoming
telephone traffic to Venezuela.
Any other service separate from those specified in this contract will be
presented and discussed separately through additional contracts.
3. International Telecommunications Services to be provided
The telecommunications services to be provided will be the following
specified services:
a. Telephone conversation services (Annex 1)
These services can be modified or increased by prior mutual and written
agreement of the Parties.
The monthly traffic will be incoming only from the United States of
America to Venezuela with a minimum monthly amount of 690,000 minutes.
This incoming traffic must show a constant incremental trend for six (6)
months from the date of the activation of the route. If during any month
the traffic is less than 690,000 minutes' that month will not be counted
as part of the six (6) months from the activation of the route and the
route shall remain as incoming traffic only for a period not to exceed 12
months from the date of route activation.
Both companies will carry out their best efforts to such that under no
circumstance will direct Call Back service or reorigination of traffic
from other countries to Venezuela be provided over our facilities. If
CANTV detects that the incoming traffic is for any of these services,
the agreement will be null and void immediately.
Once the clauses established in this contract are met, an International
Telecommunications Operating Agreement will be signed immediately, at
which time FaciliCom will have all the rights and obligations of a
CANTV approved correspondent, and will have, from said time, a direct
relationship of incoming and outgoing traffic to the United States of
America.
3
4. Settlement Rate, Transit Rate and Division of Revenues Procedure
4.1 The Settlement Rate defined in Annex A for Recommendation D.0000
for ITU's Telecommunications Standardization Sector (hereinafter
SNT)corresponds to a rate fixed by mutual agreement for the
Parties in a given relation for each of the services. As a
consequence we exclude any unilateral decision by any Party to fix
the Settlement Rate.
These rates can be modified by prior mutual agreement and in
writing signed by both parties.
4.2 The settlement rate defined in Annex A at the Recommendation D.000
of the Telecommunications Standardization Sector (SNT) (formerly
CCITT) correspond to a rate fixed unilaterally by each Party and
collected from users or clients in their country for the use of
services which are the subject of this agreement.
4.3 For the duration of this contract, CANTV will receive from
FaciliCom the fifty percent (50%) of the settlement rate
indicated in Annex 1 on the Telephone calling services established
in the present agreement.
5. Routing of Services, Transit Services, and Provision of Facilities
5.1 The routes to be used for providing the services subject of this
Agreement will be direct circuits between the United States and
Venezuela.
5.2 Should it be required, FaciliCom will provide to CANTV the
facilities for transiting traffic received from other countries,
always and when it is previously communicated to the other party.
It will not be allowed to run large volumes of transit traffic
belonging to other countries which correspond with FaciliCom for
indefinite periods of time.
5.3 FaciliCom will be obliged to cover its own costs, the facilities
of circuits located in its operating territory, to be used to
provide the services stipulated in this agreement.
5.4 FaciliCom will provide and maintain the interconnection of
international circuits dedicated to public telephony with the
national telephone network of the United States of America.
5.5 Provision of Facilities
1) For opening the route between CANTV and FaciliCom for
incoming traffic from the United States of America to
Venezuela, CANTV will provide FaciliCom using a facilities
lease arrangement the facilities corresponding to two (2)
4
half (1/2) E-l circuits (2 half circuits (1/2) of 2.048 Kbps
each)with the north end between the United States and
Venezuela.
The guidelines for charging these circuits is established in
Annex No.1 and will be paid monthly in addition to the
amounts established in Clause 6 of this agreement.
CANTV will provide the corresponding two (2) half (1/2) E-1
circuits (two half (1/2) circuits of 2.048 Kbps [sic]) on
the southern end between the United States of America and
Venezuela, with the intention of establishing complete
international circuits between the two administrations.
In case additional circuit installations are required, this
shall be administered by CANTV and FaciliCom under a lease
arrangement during the duration of the present contract and
will be charged in accord with the existing tariff for such
connections.
2) Each party shall maintain the required interconnection to
the international circuits of the respective national
telecommunications networks within its country or territory.
6. Billing Procedures
6.1 Monthly Accounts
1) CANTV will be obligated to remit monthly to FaciliCom for
the services indicated in Article 3 of this agreement, a
monthly account statement that includes but is not limited
to the following categories: number of calls made by the
clients of FaciliCom; number of minutes and remuneration
for incoming telephone traffic, settlement rate amount
applied the time of issuance of account statement, and the
total remunerations for the shared use and the
installations, shown in US dollars (US$). These invoices
shall be sent to FaciliCom within the first fifteen (15)
days of the month following the one in which the service was
provided.
2) CANTV will prepare a monthly account statement which it will
send in duplicate to the debtor party which will be able to
review and comment on the amount but will not reissue it. In
acceptance of the xxxx, FaciliCom will return one of the
copies to xxxx to CANTV.
3) In case of claims regarding monthly accounts, the parties
agree to apply point 6 of the ITU's recommendation number
D.170 of the SNT.
5
4) An invoice will be considered accepted by FaciliCom if it
does not generate a written objection before thirty (30)
days following the receipt of such xxxx.
6.2 Payment of Outstanding Invoice Amounts
CANTV will prepare a xxxx which it will send to FaciliCom
monthly. The amount due will be paid monthly by FaciliCom
within 30 days of receiving the xxxx.
The appropriate amount will be paid monthly by the owing party
to the owed party within thirty (30) days following the receipt
of the xxxx.
The payment of amounts not subject to litigation shall not
be delayed to await an agreement over the category
adjustments which are not included in said balance. The
adjustments which shall be subsequently agreed to will be
included in the balance and liquidation of the account status.
The parties agree that the currency of payment is the US dollar.
The parties agree that the payment of the outstanding
amounts shall be made for the total value of such, once
confirmed and accepted by FaciliCom, not allowing partial
payments or installments of the payments. Similarly, the payment
will not be conditioned in any case to the payment that clients
must make for the services provided and shown in the invoices.
Neither of the Parties will claim compensation, will mortgage or
will in any way commit the sums owed by the other Party, as
established in this Agreement, for canceling any debt or
obligation that the other Party could have subscribed in
relation to any other contract, agreement, transaction, or cae,
the parties can reconcile the amounts which indebt them for the
services provided relating to the present Agreement.
The payments from FaciliCom to CANTV shall be done via a wire
transfer to the following:
Banco Mercantil New York Agency
ABA No. 000000000
Beneficiary: CANTV
Account No. 4000-37791
Attention: Xx. Xxxxx Xxxxxxxxx
Any change in the bank accounts for payments, or infrequency of
payments, or in currency of payment shall be agreed to previously
in writing.
6.3 Monthly Notifications
6
1) All notifications, reports, and other communications needed or
authorized by this agreement shall be in writing and will be:
a) delivered personally, b) transmitted by Telex (with a
confirmation letter to be sent immediately after the
transmission), or c) transmitted by facsimile (with a
confirmation of receipt). Except in those cases where it is
stipulated contrary to this agreement, all notifications and
other communications will be considered to be duly delivered
on a) the date received in case it is delivered personally, b)
on the date transmitted with the confirmation if transmitted
by telex, or c) on the transmit date with the receipt
confirmation whichever is first. Notifications should be sent
to the following:
FaciliCom International, LLC
Att. Xxxxx Xxxxx
Vice President, Business Development
0000 XX Xxx., XX 0xx Xxxxx
Xxxxxxxxxx, XX 00000 XXX
Tel: 000-000-0000
Fax: 000-000-0000
Compania Anonima Nacional de Telefonos de Venezuela
(CANTV)]
Att. Xxxxxxxxx Xxxxxxxxx
International Business Division
Apartado 6353
Caracas 1010 A
Venezuela
Tel. 00-0-000-0000
Fax. 00-0-000-0000
If any party changes its address to receive notifications, it will
communicate it to the other within 30 days.
CANTV will not be responsible for FaciliCom's uncollectible debt with
its clients, which shall at no time be reflected in monthly reports to
be deducted from net amounts of incoming minutes. If FaciliCom must
provide credits to its clients for service failures, such credits will
be covered by FaciliCom, and at no time can be discounted from the net
amount to pay CANTV or reflected in its notifications for such
effects.
7
7. Lack of Payment
Independent of any other provision of this document, if FaciliCom does
not meet its net amount payment or contradicts in any form the same
and such payment delay is extended for a period more than thirty days
(30) after notifying the Party of such noncompliance, CANTV can limit
or suspend the services covered under this agreement until such
amounts are paid and can consider the contract terminated and impose
or apply any other recourse available to it to resolve the lack of
compliance with the present agreement as well as request an interest
for debt administration up to 6% per annum, from the next day
following the expiration of the term established for the payment of
balances, but must previously notify via a definitive claim for
payment.
8. Technical Requirements and Quality of Service
The technical standards and operating methods related to the services
referred to in this agreement and its annexes will be in conformance
with the present and future recommendations of the ITU's
Telecommunications Standards Division (SNT) and which are in effect
(old CCITT). Notwithstanding the above, the parties may agree in
writing to a process other than recommended by the SNT.
8.1 Service Quality
FaciliCom is committed to providing a permanent and reliable service
to the extent possible. In case the direct circuits prove inoperable
or insufficient capacity, FaciliCom commits itself to increasing the
facilities with CANTV, in compliance with what is established in
Clause No. 5.5 of this agreement.
9. Responsibility
CANTV will not be responsible for FaciliCom's losses or damages
resulting or due to: faults, defects, interruptions of other
communications media associated with circuits used for the services
indicated in this agreement, or for any interruption of service,
notwithstanding the cause or the duration.
10. Confidentiality
Each party commits to protect the confidential information it
receives from the other relating to this agreement in the same manner
that it protects its own confidential information of similar
importance. This commitment will not apply to information that is in
the public domain, which is known independently by the receiver or
which law requires be divulged.
8
It will be maintained strictly confidential and will not be divulged
to third parties especially those which offer The parties recognize
and agree that the confidential information as well as any other sent
by one party to the other is and continue to be the property of such
Party. competitive services in Venezuela. The parties will not
divulge any confidential information they acquire during the course
of their relationship and after concluding this agreement and will
avoid that their employees, designated parties, subcontractors or
agents divulge such information.
11. Marketing
CANTV and FaciliCom each on its own can develop sales material and
promote in any manner the services provided in relation to this
agreement. Notwithstanding, under no conditions will any one Party
use the name, brand, or symbols which identify the other, unless such
permission has been previously authorized in writing. All
advertisements, sales materials, press notes, or other material which
shall be distributed to the public or to communications media in
which any of the parties uses the name of the other and shall receive
written approval in writing from this other Party, previous to the
issuance or distribution.
12. Force Majeure
The parties remain free from responsibility from the inadequate
completion or failure to complete their contractual obligations when
said failure to complete should be the result of force majeure. This
is understood to be unforeseen or inevitable occurrences, after the
adoption of all possible precautions and beyond the good intentions
of the parties, and that occur after the signing of the present
agreement.
In light of these occurrences, the parties will remain free from
responsibility, however, they will make all efforts to reduce and
minimize the effects of the force majeure.
l 3. Resolution of Litigation
The parties commit to meet their obligations in good faith and to
resolve via an amicable negotiation the possible discrepancies or
claims that arise in the execution of the present agreement in
relation to the same or with its noncompliance, rescinding or
invalidity.
If an agreement is not reached within the 60 days following the
receipt of written notification from the other party of
discrepancies, such discrepancies or claims will be resolved
definitively in agreement with the Conciliation Regulation and
Arbitration of the International Chamber of Commerce by one of three
arbitrators named in agreement with this Regulation. The applicable
9
law shall be Venezuelan law and the place of arbitration shall be
Caracas.
The arbitration process shall take place in Spanish.
The presentation of an arbitration case will not represent non-
compliance of the present contract.
The arbitration costs shall be paid in agreement with the
arbitrator's decision.
The arbitrator's decision shall be definitive and will commit the
parties, which in this agreement renounce all appeal rights. The
arbitrator's decision will apply in conformance with the New York
Convention regarding recognition and execution of Foreign Arbitration
Decisions.
14. Duration and Extension
The present agreement will be valid for 6 months from the activation
of the circuits and which will be automatically extended and continue
in full force and effect as established in point 3 of the present
agreement.
Either Party can declare it terminated with a three month written
notification to the other party at least. In the case where it is
FaciliCom which expresses its desire to terminate this agreement, it
should pay CANTV the amount corresponding to 690,000 monthly minutes,
for the remaining months to complete six (6) months from the date of
route activation.
The payment of the amounts owed from FaciliCom to CANTV as a result
of the present contract, will not be affected by said rescinding.
15. Prior Agreements
The partes agree that the present agreement and its annexes
substitute and leave without validity all the verbal and written
agreements between the parties including any agreements which may
have occurred during the interchange of correspondence, amendments
and modifications to any prior Agreement in force, related to the
subject of this agreement and constitutes the complete agreement
between the parties in that which relates to the subject and content
of the present agreement and in future relations.
16. Final Dispositions
16.1 Amendments
10
This agreement cannot be amended or modified in any manner except
via the signature of the duly authorized representatives of the
Parties.
The Party which considers any modification necessary will make
such request in writing indicated for the reasons justified.
Once the parties have reached an agreement it shall be reduced to
writing and shall be in force from the date of signature.
16.2 Renunciation
No renunciation of any right relating to this Agreement will be
considered effective unless presented in writing and has been
signed by the Party which so does, and no renunciation of any
right resulting from non-compliance or violation of the operations
shall be considered as a renunciation of any future right or any
other right in relation to the present Agreement.
16.3 Division
In case any one of the dispositions of this agreement is or
becomes or is considered annulled, illegal, or unreasonable in any
jurisdiction, said disposition will be considered amended to
comply with the pertinent regulations and will be valid and
required, or if it cannot be modified without altering materially
the intention of the parties, will be affected while the rest of
the agreement will conserve its full force and effect.
16.4 Relation between the Parties
The relation between FaciliCom and CANTV under this agreement
shall be to offer telecommunications services jointly and as
referred to in this present document. Nothing herein shall be
considered to be an association between the companies and the
common businesses between the parties will be limited to the
express statutes of this Agreement.
16.5 Headings
The headings contained in this agreement have been inserted for
convenience only and are not considered part of the agreement or
affect in any way its significance or interpretation.
16.6 Cession
Neither party will cede or transfer this agreement or any of its
rights or obligations to a third party without the express and
written prior consent of the other.
11
16.7 Language
This agreement has been written in Spanish and will be signed in
2 originals, each being considered an original with the same
legal effect.
The traffic and maintenance personnel will use the Spanish
language for the operational functions.
16.8 Limitation of Rights
It is considered that none of the clauses of this agreement
limit or damage the right of any of the Parties to sign similar
services agreements with other parties.
l6.9 Approvals
This agreement and the execution of the same by the parties is
subject to the reception and renovation of the approvals,
consents, governmental authorizations, licenses and permits
which they need or are required by the parties in the effects of
the present accord, which they shall take action to obtain and
maintain said approvals, consents, authorizations, licenses and
permits.
Such is agreed, the parties to the present agreement have
charged its duly authorized representatives to subscribe two
originals of the present agreement.
12
For CANTV For FaciliCom
------------------- --------------------
Xx. Xxxxxx Xxxxxxx Xx. Xxxxx Xxxxx
Vice President Marketing Executive Vice President
and Client Services
Date: Date:
13
Annex One
Agreement for the Operation of International Telecommunications
FaciliCom and CANTV
Telephone Conversation Services
The services to be provided to users shall be the following:
1. Services
l.l Automatic: International Direct Dialed Incoming to Venezuela
2. Service Period
2.1 These services shall be offered for 24 hours a day continuously.
3. Accounting Rate and Distribution of Revenues
3.1 The accounting rate shall be agreed with American carriers by
regulations required by the FCC.
Accounting Rate CANTV FaciliCom
1.00 US$ 50% 0%
This accounting rate will apply to all classes of service, for
all periods and days of the week. The monthly minutes of traffic
notification will be measured based on the accumulation of
conversation minutes.
4. Price of Facilities
Each circuit of 2.048 Kbps (sic) will have a cost of US 19,200 a
month. This cost will be paid by FaciliCom to CANTV from the date of
the activation of the route.
