EXHIBIT 10.10
EXECUTION DRAFT
COMM SOUTH COMPANIES, INC.
COMMERCIAL SERVICES AGREEMENT
1. Local Dial Tone Service; Rates. Comm South Companies,
Inc. ("CSC"), a Texas corporation operating as a debtor-in-possession under
Chapter 11 of Title 11 of the United States Bankruptcy Code, as amended, hereby
agrees to provide, and the corporation whose name and address are set forth
under the caption "Subscriber" on the signature page to this Agreement
("Subscriber") hereby agrees to accept from CSC, local telephone service for the
pay telephones identified on Exhibit "A" attached to this Agreement and
incorporated herein by this reference (the "Service" or the "Services"), which
pay telephones are now or in the future owned or controlled by or associated
with Subscriber (the "Eligible Phones"), upon the terms and subject to the
conditions set forth in this Agreement and consistent with applicable federal
and state laws, rules and regulations. CSC and Subscriber mutually agree that
such Exhibit "A" may be amended from time to time to add additional Eligible
Phones or remove Eligible Phones that are no longer in service. Subscriber
agrees to provide CSC with a minimum of ten thousand five hundred (10,500)
mutually agreed upon Eligible Phones for exclusive Services (the "Minimum
Commitment") during the first ninety (90) days of the Initial Term and to
maintain such Minimum Commitment for the remainder of the Initial Term.
Subscriber agrees to pay for Service according to CSC's
published rates or applicable tariffs (the "Rates and Tariffs"), which may be
updated from time to time at CSC's sole discretion. A summary of the current
applicable Rates by state and zone are listed on the attached schedule
identified as Exhibit "B" (the "Current Rate Schedule"), a copy of which is
attached hereto and incorporated herein by reference. The parties hereto
recognize and agree that the Current Rate Schedule is an integral part of this
Agreement and that the savings to be realized by Subscriber in connection
therewith represent a material inducement for Subscriber to enter into this
Agreement. In the event CSC shall be subject to any Rate, cost or Tariff
increase, or Carrier Access Billing rates decrease during the term(s) of this
Agreement, upon thirty (30) days advanced written notice to the Subscriber, the
Subscriber shall immediately thereafter pay such increase upon receipt of
invoice. As identified on the Current Rate Schedule CSC's rates
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EXHIBIT 10.10
will vary based on the location of the Eligible Phone. Charges for each line
shall commence the date service is first provided as reasonably determined from
CSC's books and records. If Subscriber has not previously done so, Subscriber
shall promptly furnish CSC with Exhibit "A" which identifies and lists the
Eligible Phones, the corresponding telephone numbers and physical locations
(with street address) of such Eligible Phones, and such other information as CSC
may reasonably request (the "Line Roster"). Any revision or update to the Line
Roster shall be implemented by written amendment to this Agreement. Subscriber
will keep the Line Roster current, and promptly notify CSC of any additions or
deletions to the Line Roster. Subscriber agrees that each addition to the Line
Roster shall be an Eligible Phone and shall be furnished Service at CSC's then
effective rates, as set forth in the Rates and Tariffs then published with
respect to such Eligible Phone. Service shall be terminated at any Eligible
Phone and removed from the Line Roster subject to Section 4 hereof. Subscriber
agrees that the Rates and Tariffs shall be increased by CSC if the applicable
local exchange carrier or wholesaler files a tariff which causes CSC's costs to
provide Service to increase over the cost to provide Service in effect on the
date of this Agreement. Furthermore, CSC agrees that the Rates and Tariffs shall
be decreased by SCS if the applicable local exchange carrier or wholesaler files
an applicable tariff which results in CSC's costs to provide Service to decrease
over the cost to provide Service in effect on the date of this Agreement. In the
event that CSC offers a Rate that is at least 10% lower than the Rate charged to
Subscriber under this Agreement (the "Reduced Rate") to a customer similarly
situated to Subscriber at such time, CSC shall offer such Reduced Rate to
Subscriber.
2. Letter of Agency. Subscriber hereby selects CSC as
the sole and exclusive local service provider for all Eligible Phones identified
on Exhibit "A". CSC is hereby authorized to act in the full capacity of a local
service provider in terms of providing all local exchange services, exchange
access services, and moves, adds and changes as may be further directed in
writing by Subscriber. Service shall be defined to include an automatic "freeze"
or "hold" on any further requests to change Subscriber's presubscribed long
distance carrier so that no request for change shall be processed by CSC except
those received in writing from Subscriber and signed by a duly authorized
officer (CEO, CFO or General Counsel). Subscriber understands and agrees that
each pay telephone line contemplated under this Agreement can have only one
local service provider, and accordingly, Subscriber hereby represents, warrants
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EXHIBIT 10.10
and covenants to and with CSC that the Eligible Phones are not subject to any
other contract for local service other than as expressly set forth in this
Agreement.
3. Termination and Cancellation Terms. This Agreement
shall commence on the date that it is executed by CSC (the "Effective Date") and
shall continue in full force and effect for a period of twelve (12) months
thereafter (the "Initial Term"). This Agreement shall renew automatically for a
term equal to the Initial Term of this Agreement unless Subscriber provides
written notice to CSC of its intention to terminate this Agreement at least
ninety (90) days prior to the end of the Initial Term. In the event of any
termination of this Agreement by Subscriber prior to the end of the Initial Term
(other than Termination for Convenience or a Termination for Material Breach as
provided below) Subscriber will pay CSC as liquidated damages, and not as a
penalty, an amount equal to fifty percent (50%) of the monthly local access fee
multiplied by the number of months remaining from the date of termination
through the end of the term of the Agreement multiplied by the number of
Eligible Phones as identified on Exhibit "A", as may be amended from time to
time. After the Initial Term of this Agreement, Subscriber may terminate this
Agreement at any time for convenience upon thirty (30) days written notice to
CSC. For purposes of this Agreement, "Material Breach" shall mean that CSC is
unable to provide Service to more than ten percent (10%) of the Eligible Phones
for more than forty-eight (48) consecutive hours (a "Major Outage"), where such
Major Outage is not due to an event of Force Majeure (as defined in Section 12
hereof). Subscriber may terminate this Agreement upon the occurrence of Material
Breach by delivery of written notice to CSC after the occurrence of a Material
Breach in the event that such Material Breach is not cured by CSC within
forty-eight (48) hours from CSC's receipt of such written notice.
Notwithstanding the foregoing, in the event there are more than two (2) Major
Outages during any twelve-month period that this Agreement is in effect,
Subscriber shall be entitled to terminate this Agreement upon thirty (30) days
advance written notice to CSC. After the Initial Term, Subscriber may terminate
this Agreement for convenience upon sixty (60) days advance written notice to
CSC.
4. Invoicing and Payments. CSC will invoice Subscriber
for all Services to be provided hereunder monthly in advance, and will invoice
Subscriber for any charges incurred above the basic Service for the prior month.
All such invoices shall be due and payable upon the
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EXHIBIT 10.10
terms and subject to the conditions set forth in Exhibit "C" attached to this
Agreement and incorporated herein by this reference.
5. Quarterly Financial Statements. During the Initial
Term and any Renewal Term, CSC shall provide Subscriber with quarterly unaudited
financial statements, which shall include but not be limited to, a Balance
Sheet, Income Statement and Cash Flow Statement. CSC represents and warrants
that, to the best of its knowledge and belief, it will not be required to
provide a line deposit to the local exchange carrier in order to provide the
Service contemplated by this Agreement.
6. Ownership of Regulatory Receipts. Subscriber shall
retain the rights to receive any and all regulatory receipts or refunds relating
to the Eligible Phones, including but not limited to, refunds of end user common
line charges, new services test refunds, dial around compensation refunds, and
refunds of federal, state and local sales or excise taxes (the "Regulatory
Receipts"). In the event CSC receives any Regulatory Receipts on behalf of
Subscriber, CSC shall immediately forward the full amount of any Regulatory
Receipts to Subscriber.
7. Governing Law and Regulatory Requirements. Subscriber
shall comply with laws, rules, regulations and tariffs affecting the
Subscriber's obligation in conjunction with the provision of CSC's Services.
CSC's Rates and Tariffs, as updated or amended, are incorporated herein by
reference the same as if set forth herein in the entirety and as amended from
time to time. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed entirely within the State of New York. All disputes between the
parties shall be submitted to the binding arbitration in accordance with the
commercial arbitration rules of the American Arbitration Association. Venue for
arbitration of any disputes arising under this Agreement shall be New York, New
York. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision hereof.
8. Notice. Notice shall be deemed to have been received
upon receipt of a postage-prepaid letter, telephone facsimile transmission (with
receipt confirmed), or overnight
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EXHIBIT 10.10
delivery service provided by a recognized carrier. Notices to Subscriber and CSC
shall be addressed to the addresses on the signature page of this Agreement.
9. Attorneys' Fees. If legal action is brought by either
of the parties hereto, it is expressly agreed that the prevailing party shall be
entitled to recover from the other party reasonable attorneys' fees, in addition
to any other relief as may be awarded.
10. Liability of CSC. CSC MAKES NO WARRANTIES WITH
RESPECT TO THE SERVICES AND DISCLAIMS ALL EXPRESS, IMPLIED AND STATUTORY
WARRANTIES WHATSOEVER, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF
MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE; AND ALL
SUCH WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.
11. Indemnification. Subscriber agrees to indemnify,
protect, defend and hold harmless CSC from and against any claim, suit,
proceeding or other action for any personal injury or death, or any loss or
damage of property of any type, caused or claimed to have been caused by any act
or omission on the part of Subscriber, its employees, contractors, agents,
patrons, guests, or persons on its premises, or by any installation, operation,
failure to operate, maintenance, removal, presence, condition, location, or use
of CSC's equipment that is not the direct result of CSC's willfully negligent
conduct.
12. Force Majeure. Neither party to this Agreement shall
be responsible or liable to the other for delays or failures in performance of
this Agreement resulting from: (1) acts or occurrences beyond the reasonable
control of one or both parties (including, without limitation, any fire,
explosion, power failure, lightning, severe weather, acts of God, war,
terrorism, revolution, civil commotion, infection of telephones or tools by a
software virus, any law, order, regulation, ordinance or requirement of any
government or legal body (or any representative of any such governmental body);
(2) the failure of the RBOC or other line owner to provide timely services to
CSC (including, without limitation, any failure of RBOC or other line owner
service that results, directly or indirectly, in a Material Breach under this
Agreement); or (3) labor unrest (including, without limitation, strikes,
slowdowns, picket-lines, and boycotts whether primary or secondary, and without
regard to whether such labor unrest could have been
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EXHIBIT 10.10
settled by acceding to the demands of labor organization). In such event, the
party whose performance is directly affected by any such circumstances shall be
excused from such performance on a day-to-day basis to the extent of the
interference. If such excuse of the performance of the directly affected party
shall prevent related performance by the other party, then the performance of
the other party shall also be excused on a day-for-day basis to the extent of
the indirect interference. In the event that any such event of Force Majeure
shall continue for more than fifteen (15) days, then the parties shall enter
into good faith negotiations directed toward a mutually acceptable resolution of
outstanding obligations. If the event of Force Majeure shall continue for more
than thirty (30) days, then this Agreement may be considered terminated without
any penalty to CSC or to Subscriber.
13. Representations and Warranties. CSC hereby represents
and warrants that it is able to, and will comply with quarterly reporting and
other obligations as necessary to allow Subscriber to collect dial-around
compensation ("DAC") on calls made from the Eligible Phones. Subscriber hereby
represents and warrants that it is a corporation duly incorporated, validly and
existing and in good standing in the jurisdiction of its incorporation and has
the necessary corporate power and authority to carry on its business, enter into
this Agreement and perform its obligations hereunder. Subscriber agrees to work
with CSC in good faith to provide necessary information to permit CSC to forward
the necessary quarterly reporting data to the appropriate national clearing
houses to insure that Subscriber receives any and all DAC to which it may be
entitled.
14. Counterparts. This Agreement may be executed in two
facsimile counterparts, each of which shall be deemed an original, but both of
which together shall constitute one and the same enforceable instrument.
15. Miscellaneous. This Agreement shall be binding upon
and inure to the benefit of the Parties to this Agreement and their respective
successors and assigns whether by contract or operation of law, it being
specifically understood and agreed that in the event the Subscriber may be
merged into, purchased by or its assets sold to a third-party, this Agreement
shall continue to be binding upon such third-party. In the event CSC shall be
dissolved or liquidated, this Agreement shall terminate upon written notice to
Subscriber; however, in such
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EXHIBIT 10.10
event, CSC shall cooperate with Subscriber in transferring the Eligible Phones
to a local access provider designated by Subscriber. CSC shall make available to
the new provider any and all information in order to facilitate an orderly
transition of Services. Except as otherwise provided herein, this Agreement
shall be amended, revised, updated or modified only by a writing executed by
both parties.
IN WITNESS WHEREOF, the parties below hereby execute this
Agreement, including all of the provisions written in this Agreement and
incorporated herein by reference, as of the Effective Date.
CSC: SUBSCRIBER:
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COMM SOUTH COMPANIES, INC. DAVEL COMMUNICATIONS, INC.
By: /s/ XXXX X. XXXXXXX By: /s/ XXXXX XXXXX 12-29-03
---------------------------------------- -----------------------------
Name: Xxxx X. XxXxxxx Name: Xxxxx XxXxx
Title: President and Chief Executive Officer Title: Chief Executive Officer
Address: Billing Address:
0000 X. Xxxxxxx Xx. - Suite 800 000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000 Xxxxxxxxx, Xxxx 00000
Contact Name: Contact Name: X. X. XxXxx
------------------------------- Contact Telephone: 000-000-0000
Contact Telephone:
--------------------------
Date: DECEMBER 29, 2003
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EXHIBIT 10.10
EXHIBIT C
INVOICING AND PAYMENTS
1. Monthly invoices shall be payable in two (2) equal installments weekly
commencing five (5) days during the first 2 months of this agreement,
and then ten (10) days thereafter, following Subscriber's receipt
thereof (the "Due Date").
2. Payments received more than ten (10) days after the Due Date will be
assessed a late charge of one and one-half percent (1.5%) per month.
3. CSC will deliver billing to Subscriber in a mutually acceptable
electronic format.
4. CSC shall have the right to terminate Service, with seven days advanced
written notice, if Subscriber fails to make payments within fifteen
(15) days following the Due Date.
5. In the event the Service for a line is disconnected due to non-payment,
CSC will charge a per line reconnection fee in accordance with the
amounts identified on Exhibit B to this Agreement. Providing Subscriber
notifies CSC of its intent to disconnect Services on an Eligible Phone
(the "Disconnect Notice" and the "Disconnected Phone"), Subscriber
shall have no obligation to pay CSC monies for Services related to a
Disconnect Phone after the effective date of the Disconnect Notice,
provided Subscriber has given sufficient notice, regardless of whether
CSC properly or timely disconnects Service to the Disconnected Phone.
The effective date will be generally four (4) business days after
disconnect notice is received.
6. Should Subscriber become insolvent and /or not make two (2) timely
payments in accordance with terms outlined in this agreement, CSC at
its sole discretion may require Subscriber to pay a deposit of an
amount that does not exceed one-half (1/2) of the average prior monthly
billing(s).
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