CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT. PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED BY [*] [**] [***]
[****] OR [*****]. MATERIAL OMITTED HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.31
SERVICE CONTRACT
This Agreement is made this 12th day of November, 1997 by and between All
American Cables and Radio, Inc. ("AACR"), a Company created under the laws of
the Dominican Republic, with a principal address at Xxxxxx Xxxxxxx, 52, Gazcue,
Santo Xxxxxxx, Dominican Republic represented herein by its Executive Vice
President, Xx. Xxxxxx Xxxxx, and
WorldPort Communications, Inc. ("WorldPort") a Delaware corporation with its
principal offices at 0000 Xxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx, XXX,
represented herein by its President and Chief Executive Officer, Xx. Xxxx X.
Xxxxxx.
WHEREAS, AACR has represented that it has the transmission facilities as well as
the necessary termination capacity to terminate telephone calls within the
Dominican Republic regardless of the network or company to which the calls are
sent;
WHEREAS, WorldPort has represented that it has the potential to raise an
important
volume of telephone calls to the Dominican Republic;
NOW, THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:
1. SCOPE OF THE AGREEMENT.
1.1 AACR grants to WorldPort a franchise to sell international long
distance service ("ILDS") for calls terminating in the Dominican
Republic. This option is granted under the terms and conditions set
forth hereunder.
2. TERMS AND CONDITIONS.
2.1 The service (the "Service") granted herein to WorldPort is only to
resell ILDS to "Facilities Based Resellers," "Resellers," "Minute
Aggregators" and high volume customers. Excluded from the provisions
of this Agreement will be all "Facilities Based Carriers."
2.2 WorldPort, under this Agreement, commits a minimum traffic volume of
[**], over a period of [***] (the "Initial Term") commencing on the
in-service date (the "Effective Date") of the transmission facilities
between WorldPort and AACR as defined in Section 4.1.1.
3. RATES AND CONDITIONS.
3.1 Rates, Minimum Volume and Billing
3.1.1 AACR will charge WorldPort for traffic delivered pursuant to this
contract at a per minute rate of [*] for completed calls only,
billed in [**] increments. In the event that WorldPort prepays
the equivalent of [**] according to the schedule in Section 3.2.1
below and delivers its traffic to AACR in [****] the rate
applicable under this Agreement shall be [*] per minute.
3.1.2 For each month during the Initial Term, WorldPort commits to
maintain a minimum traffic volume ("Minimum Volume") to AACR
based on the following schedule:
[***] [**]
[***] [**]
[***] [**]
[***] [**]
[***] [**]
3.1.3 Every month AACR will issue to WorldPort a xxxx for the greater
of (i) the total of the conversation minutes sent by WorldPort,
billed in [**] increments or (ii) the Minimum Volume for the
applicable month according to the schedule set forth in section
3.1.2. Payment shall be due 30 days after WorldPort's receipt of
the xxxx, less any legitimate disputes, which must be raised
within 45 days of the invoice date.
3.1.4 If the actual traffic sent by WorldPort in any month is below the
volume of the applicable month according to the schedule set
forth in section 3.1.2., this shall be deemed a "Volume
Shortfall". The Volume Shortfall will be adjusted with those
minutes in excess sent by WorldPort in any other month.
3.1.5 All differences between the bills issued by AACR and WorldPort's
books and records shall be cleared within a thirty (30) day
period. Both parties will endeavor to reduce those differences
to a minimum. In the event that differences of more than 7% of
the entire xxxx persist for more than three months, the parties
will hire a third party qualified expert to clear the
differences. The party responsible for the difference will pay
cost and expenses of the expert.
3.2 Deposit
3.2.1 Under this Agreement, WorldPort shall be required to deposit [*]
equivalent to [**] minutes. The deposit shall be transferred by
WorldPort to AACR at the rate of [*] per month for the first
[***] following the Effective Date.
In the event of default by WorldPort in its performance under this
Agreement which is not cured by WorldPort within ten (10) days, the
Deposit may be executed by AACR.
3.2.2 The parties agree that the nature of the deposit required by AACR
is equivalent to approximately one (1) month of minimum billing
as set forth in section 3.1.2 herein.
3.2.3 Under no circumstance shall the deposit hereby agreed between the
parties be deemed to constitute a loan to AACR, an equity
participation in AACR or ownership in AACR shares.
3.3 Miscellaneous
3.3.1 WorldPort agrees not to solicit any non-facilities based carriers
already under contract with AACR.
3.4 In the event of a material breach of this Agreement by WorldPort of
Section 3.1.3(Payment terms) or Section 3.1.2 (minimum traffic
volumes) above, the parties will endeavor to remedy the situation. In
the event that the material breach by WorldPort of Section 3.1.3 or
Section 3.1.2 continue for more than one month, the following remedies
will apply:
3.4.1 AACR will apply the outstanding due xxxx to the WorldPort
deposit.
3.4.2 During the period starting the first day of the month of the
traffic volume breach, (in the event of a violation of Section
3.1.2), AACR will continue to xxxx WorldPort the Minimum Volume
under the same rate and conditions set forth.
3.4.3 If the material breach of Section 3.1.3 continues for three (3)
consecutive months, the terms and conditions granted hereunder by
AACR to WorldPort will cease.
4. FACILITIES.
4.1 Transmission Facilities
4.1.1 As soon as practicable after signing this Agreement, WorldPort
shall provide AACR, with a forecast of facilities needs. The
parties commit to install facilities using La Xxxx I transmission
systems in order to ensure a service level of P.01. WorldPort
will be responsible to extend its transmission facilities in T-1
format to meet AACR facilities at the [****]. The Effective Date
shall be that date on which WorldPort's transmission facilities
are fully connected to AACR facilities at PRTC and both parties
have completed all testing required to ensure proper transmission
between facilities.
Under this section, the parties agree that WorldPort is responsible
for the installation costs and monthly rent charges for any of the
terrestrial links of its transmission facilities to meet AACR system
in [****] The parties also agree to share in proportion to the
facilities used the maintenance and operations cost charged by LaMona
systems.
4.1.2 AACR commits to provide to WorldPort the required transmission
capacity between [****] and the Dominican Republic following an
activation schedule to be executed according to the growth of the
traffic. In order to optimize the use of facilities both between
USA mainland and [****] and [****] and the Dominican Republic,
both parties will compress the voice channels on both ends. Each
party will bear the cost of the compression equipment used on
their own facilities.
5. EFFECTIVE DATE AND TERMINATION.
5.1 Effective Date
This Agreement shall become effective upon the Effective Date
referenced in Section 2.2 above. All other provisions of this
Agreement shall be effective upon the signature of this Agreement.
5.2 Term.
This Agreement shall have a term of [***] from the Effective Date, and
shall automatically renew for successive periods of [***] ("Renewal
Periods") unless either party gives the other 120 days notice prior to
the expiration hereof. In the event of such termination notice, the
Agreement, including all provisions, shall continue in force until the
deposit is used up by application of monthly service bills or 180 days
after the termination notice date, whichever occurs first.
6. AFFILIATION.
6.1 The relationship between AACR and WorldPort under this Agreement shall
be solely that described herein in the joint provisions of
international long distance services for calls terminated in the
Dominican Republic. Nothing contained herein shall be deemed to
constitute a partnership or joint venture between the parties, and the
common enterprise of the parties shall be limited to the express
provisions of this Agreement.
7. PREVIOUS AGREEMENTS.
7.1 This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes and cancels
any and all prior verbal or written agreements.
8. ASSIGNMENT.
8.1 Neither party shall assign or transfer all or any portion of its
rights and obligations under this Agreement (other than to a wholly-
owned subsidiary) without the prior written consent of the other
party.
9. EXECUTION.
9.1 This Agreement shall be executed in two counterparts in English, each
of which shall be considered an original with identical legal effect.
10. SEVERANCE.
10.1 If any provision of this Agreement for any reason and to any extent is
held to be invalid or unenforceable, then neither the remainder of the
Agreement nor the application of the provision to other persons,
entities, or circumstances shall be affected, but instead shall be
enforceable to the maximum extent permitted by law.
11. MODIFICATIONS.
11.1 This Agreement may not be amended, modified or changed, nor shall any
waiver of any provision hereby be effective, except only by an
instrument in writing and signed by the party against whom enforcement
of any waiver, amendment, change, modification or discharge is sought.
12. CONFIDENTIALITY.
12.1 The provisions of this Agreement, as well as its existence, shall be
considered confidential by the parties, and shall be protected to the
same extent as they would protect their own confidential information.
Disclosure to third parties shall not be permitted unless agreed to in
writing by the other party. AACR acknowledges that WorldPort must
disclose the existence, duration and potential liability of this
Agreement in its regular filings with the U. S. Securities & Exchange
Commission, and AACR hereby consents to such disclosure. With the
exception of such SEC filings, total or partial disclosure of this
Agreement by WorldPort to any third party without the consent in
writing of AACR to WorldPort, will constitute an event of default and
consequently the execution of the deposit.
13. CONFLICTS.
13.1 The parties agree that this Agreement shall be governed by the laws of
the State of Florida. In the event of a conflict resulting from the
interpretation of this Agreement, the parties will endeavor to find a
solution and remedy the situation. In the event the conflict cannot
be solved within a reasonable time frame, the controversy will be
settled by binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, then in
effect.
14. NOTICES.
14.1 Notices shall be made by facsimile or electronic mail or by overnight
courier to the addresses referenced above, or to such other addresses
as the parties may provide from time to time. All notices shall be
considered effective upon receipt.
IN WITNESS THEREOF, the parties hereto have severally subscribed these
presents, or caused them to be subscribed in their name and behalf by their
respective officers thereunto duly authorized.
ALL AMERICAN CABLES & RADIO, INC.
/s/ Xxxxxx Xxxxx
Xx. Xxxxxx Xxxxx
Executive Vice President
WORLDPORT COMMUNICATIONS, INC.
/s/ Xxxx X. Xxxxxx
Xx. Xxxx X. Xxxxxx
President & Chief Executive Officer
