Exhibit 10.01
Exhibit 10.01 Agreement dated March 3, 1999 between Canadian Telecom
Resellers Alliance and Registrant.
Agreement No. 9904
CUSTOMER SERVICE AGREEMENT
BETWEEN:
Canadian Telecom Resellers Alliance, an Ontario
business corporation, having its registered office at
7101 Syntex Drive, in the City of Xxxxxxxxxxx, XX X0X
0X0,
(hereafter called "CTRA"),
AND:
APC Telecom Inc. _____________, a corporation
duly constituted under the laws of Canada having its
principal place of business at 000 Xxxxxxxxx Xxxxxxxx
Xxxxx 0 , in the city of Xxxxxxx XX X0X 0X0
(hereafter called the "Customer").
1. The Service
1.1 Customer, a purchaser and supplier of telecommunications
services, hereby requests CTRA and CTRA hereby agrees to
provide a telecommunications termination service (hereinafter
referred to as the "Service") to Customer, allowing Customer
to route its clients' long distance phone calls through CTRA's
underlying carrier networks, under the terms and conditions
specified herein.
1.2 Customer shall not use the Service, nor shall allow the use of
the Service by others, for any illegal purposes, or in a
manner that violates the law, or for annoying any person, or
in a manner which interferes with the use of the Service by
others users. Customer shall not be excused from paying CTRA
for the Service, or any portion thereof, on the basis that a
fraudulent or an unauthorized use comprised a corresponding
portion of such Service.
1.3 In order to obtain the Service, Customer must first comply
with the procedures outlined in Schedule A and its Annexes I
and 2 appended hereto and made a part hereof.
2. Rates, Charges and Taxes
2.1 Customer agrees to and shall be responsible for paying CTRA
for all calls and data transmissions made or received over
CTRA's underlying carrier networks via the means made
available to Customer and its sub-users to access CTRA's
underlying carrier networks, on the basis of the set
per-minute rates and the various non-recurring charges
outlined in Schedule B attached hereto and made a part hereof
2.2 Customer further agrees to and shall be responsible for paying
CTRA all applicable federal, provincial and local taxes which
shall be added to the amounts payable by Customer to CTRA
hereunder.
3. Duration and Renewal
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3.1 This agreement is for a term of Three (3) years, starting on
March 21, 1999, and ending at noon, Eastern Standard Time,
March 20 2002 (hereinafter referred to as the "initial term").
3.2 This agreement will renew automatically for an equivalent term
at the end of the initial term or each renewal unless Customer
or CTRA advises the other in writing of its intention not to
renew the agreement at least thirty (30) days prior to the end
of the initial term or renewal.
4. Terms of Payment and Billing
4.1 Customer shall be invoiced by CTRA on a monthly basis and each
invoice is due and payable thirty (30) days from the date of
the invoice.
4.2 Invoices not paid when due shall accrue interest at a monthly
rate of 1.5% compounded monthly (19.56% per annum) and
computed on a daily basis from the date the invoice was due
until payment is received by CTRA.
4.3 In order to be considered, any billing discrepancies shall be
submitted to CTRA with reasonable details, in writing, within
thirty (30) days of the date of the invoice. Failing such
submission within the stated delay, CTRA shall be entitled to
disregard any such discrepancy.
4.4 If Customer's payment by cheque is returned for insufficiency
of funds or cannot otherwise be processed for payment,
Customer shall be liable for and subject to a Fifteen Dollar
($15.00) charge, applicable each time a cheque is returned or
not processed.
4.5 The rates and charges mentioned in clauses 4.2 and 4.4 above
are subject to change from time to time upon notice by CTRA to
Customer, without giving effect to the opting out provisions
of clause 14.
4.6 Termination, interruption or suspension of Service to Customer
shall not affect Customer's obligation to pay any amount owing
to CTRA hereunder or otherwise.
4.7 Customer guarantees that their monthly billing (i.e.: the
amount charged to Customer by CTRA) will amount to not less
than Fifty Thousand Dollars ($ 50,000.00) net of taxes, on or
before December 31st, 1999 and will not be less than this
amount for the remainder of the term.
4.8 If by December 31st, 1999 the Customer does not reach the
billing level specified in clause 4.7, the Customer shall pay
forthwith to CTRA one half of the difference between Fifty
Thousand Dollars ($ 50,000.00) and the actual level of billing
(net of taxes) for each month where the commitment of clause
4.7 is not met during the rest of the present term or the
renewal item.
1. Security
4.1 deleted
5.2 Any deposit required pursuant to clause 5.1 shall be held by
CTRA without interest to Customer. CTRA shall have the right
to apply the deposit against any outstanding balance in
Customer's account. In the event that there is no outstanding
balance or it is less than the
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amount deposited, the deposit or the remainder of the
deposit shall be refunded to Customer upon termination of
this agreement.
5.3 Customer hereby grants, as of the execution of this agreement,
and binds itself to execute simultaneously a document to that
effect on the form provided by CTRA as an essential condition
of this agreement, a first ranking security on all Customer's
accounts receivable, lists of clients and other goodwill, to
the benefit of CTRA, in order to secure all the obligations of
Customer hereunder. Where the law requires the said security
to be for a fixed amount, such amount will be set at an amount
equal to the equivalent of one (1) year estimated billing for
the Service. In order to give effect to the foregoing,
Customer will do all things and execute all additional
instruments useful or necessary to effectively assign its
accounts receivable, lists of clients and other goodwill to
CTRA.
5.4 CTRA shall have the right to request at all times and receive
forthwith from the Customer a copy of the last annual or
quarterly financial statements of Customer.
6. Service or Equipment Failure
6.1 CTRA does not warrant uninterrupted Service, nor the
continuous availability or working of its equipment, or the
transmission services, systems or equipment of any other
telecommunications or telephone company or carrier whose
services, equipment or systems are used by CTRA, or by
Customer or any of its users in connection with the Service.
6.2 For the purposes of this agreement, "interruption" shall mean
the inability to complete calls due to network, system or
equipment malfunction or human errors.
6.3 In addition to the provisions of clause 10.3, it is expressly
understood that Service may be temporarily suspended or
interrupted without any liability being incurred by CTRA.
Furthermore, no compensation, credit, allowance or adjustment
will be made to amounts otherwise owing by Customer by reason
of any such suspensions or interruptions.
6.4 No credit will be given for Service difficulties such as
(without limiting the generality of the foregoing) low dial
tone, circuits busy or other network or switching capacities
shortages, interruptions caused by the failure of any services
or facilities provided by a carrier or other entity other than
CTRA, interruptions caused by Customer's fault, negligence or
wilful act or interruptions caused by failure of Customer's
equipment or systems, or interruption by CTRA due to
Customer's failure to pay any amount due to CTRA or any breach
of this agreement by Customer.
7. Confidential Information
7.1 Customer states and acknowledges that all information
mentioned herein or otherwise transmitted to CTRA or its
underlying carriers, is true and exact. Customer warrants that
it has been authorized to transmit such information to CTRA
and that CTRA is authorized to receive and to hold such
information. Furthermore, Customer acknowledges it was
informed upon giving said information, that:
7.1.1 the information will be used for the purpose of
obtaining the Service, for the management of its
Customer file and, among other things, for reasons of
credit, billing and collection; and
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7.1.2 the information contained in its Customer file is
available only where necessary, to employees or
agents of CTRA for the purposes of this agreement;
and
7.1.3 its Customer file will be stored in the Customers
Service Department of CTRA's underlying carriers
where Customer will forward in writing any request to
access or to rectify said information.
7.2 Customer agrees to advise CTRA's underlying carriers without
delay of any change to such information supplied by Customer
for the purposes of this agreement.
7.3 Customer further states and acknowledges that all information
contained in this agreement and the Schedules hereto are
confidential.
8. Liability and Indemnification
8.1 CTRA, its directors, officers, employees, contractors or
agents shall not be liable to Customer, the latter's clients,
employees, representatives or any other user of the Service or
any other person or entity for:
8.1.1 any mistakes, omissions, errors, delays or defect in
transmissions, or failure to transmit, or
interruptions of Service;
8.1.2 any damages including direct, indirect, special
consequential, exemplary or punitive damages,
including, without limitation, any interruption of
business, any loss of data, goodwill, profits,
earnings and business opportunities or other losses,
resulting directly or indirectly out of or in
connection with this agreement or the provision of or
failure to provide the Service or other use of CTRA's
communications services, facilities, equipment or
systems, or the use of same by others, even if CTRA
has been advised in advance of the possibility
thereof;
8.1.3 any acts or omissions of any connecting, underlying
or local exchange telecommunications carrier whose
facilities, equipment or systems are used in
providing inter-connection for or termination of, the
Service;
8.1.4 claims for libel, defamation, slander, harassment,
invasion of privacy, illegal or improper use of
telecommunications services or facilities,
infringement of copyright or unauthorized use of or
infringement of trade-xxxx or trade-name or
infringement of other intellectual property rights,
arising out of the material data or information
transmitted or received over CTRA's underlying
carriers' services, facilities, equipment or systems;
claims for patent infringement arising from combining
or connecting Customer provided facilities, equipment
or systems with CTRA's underlying carriers' services
facilities, equipment or systems;
8.1.5 claims by those to whom Customer may provide
telecommunications or other services;
8.1.6 all other claims arising out of any act or omission
of Customer or any person utilizing Customer's
telephone numbers, access lines, access codes,
authorization codes, calling cards or other means to
access CTRA's underlying carriers' network
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with or without the consent of Customer in
connection with any services, facilities, equipment
or systems, whether provided by CTRA or by Customer;
8.1.7 any defacement of or damage to, the premises of
Customer resulting from the attachment of any
equipment, apparata or associated wiring or
instruments supplied by CTRA on such Customer's
premises or by the installation or removal thereof;
or
8.1.8 any breach of the provisions of this agreement due to
force majeure or any other cause or event beyond
their reasonable control.
8.2 Without limiting the generality of the foregoing, CTRA's total
and only liability under this agreement is absolutely limited
to an amount equal to that of the security provided for in
clause 5.1 above.
8.3 There is no express or implied warranty or condition, whether
of merchantability, fitness for a particular purpose, or
otherwise, with respect to the Service or any product or
equipment provided by CTRA hereunder.
8.4 Customer hereby waives as against CTRA, its directors,
officers, employees, contractors and agents and shall
indemnify and hold all of them harmless from and against all
claims, damages, penalty or fine and acts or omissions as
described in clauses 8.1.1 to 8.1.8 inclusive, made by
Customer's directors, officers, employees, contractors or
agents, or by any third party.
8.5 Customer shall further indemnify and hold CTRA harmless from
and against any penalty or fine ordered or imposed by any
government authority or agency pursuant to finding CTRA guilty
of misleading or fraudulent practices in activating clients of
Customer on CTRA's underlying carriers' network. In addition,
Customer shall pay to CTRA all amounts that are due by such
clients, the applicable dispute charges as incurred and a
penalty of one hundred dollars ($100.00) per complaint to
cover the costs of investigation and administration thereof.
All matters concerning such unauthorized activations will be
referred to the local telephone company's Carrier Services
group which investigates all such disputes. The burden of
proof will be on Customer to prove its client did in fact
choose Customer as its long distance service provider.
9. Responsibility of Customer
9.1 Customer shall notify CTRA's underlying carriers within two
(2) business days whenever any of its own clients or sub-users
ceases to use the Service, either because the said client or
sub-user has chosen a preferred inter-connection carrier other
than CTRA or has had its service agreement with Customer
interrupted or terminated for any reason.
9.2 Where Customer so notifies CTRA's underlying carriers to
discontinue the Service to specific sub- user(s) or telephone
number(s), CTRA shall diligently discontinue the Service as
requested, but in any event, no later than three (3) business
days after the receipt of said notification, without liability
to the Customer beyond the expiration of said three (3) days'
delay.
9.3 CTRA's underlying carriers will provide Customer with regular
or occasional lists of Customer's clients. CTRA's underlying
carriers will also promptly notify Customer of any PIC Care
transactions indicating that one or more of Customer's clients
or sub-users have selected another carrier. Customer shall
have two (2) business days following the receipt of such list
or notice to notify CTRA's underlying carriers that some
clients are not Customer's clients any more and that the
Service should not be provided to them through CTRA's
underlying carriers' network.
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9.4 If Customer fails to so notify CTRA's underlying carriers,
Customer shall be responsible for the payment of all amounts
due by such clients or sub-users utilizing the Service beyond
the expiration of said two (2) day delay.
10. Termination
10.1 Except where otherwise specified, this agreement may be
terminated by either party upon thirty (30) days written
notice.
10.2 Should this agreement be terminated by Customer before the
expiry of the term or any renewal thereof, Customer will owe
CTRA, and will be billed a termination charge of Fifty
Thousand Dollars ($50,000.00).
10.3 Customer agrees that CTRA may suspend, disconnect or terminate
the Service in whole or in part and this agreement, if
Customer:
10.3.1 fails to pay any invoice when due or any other amount
owed to CTRA;
10.3.2 fails to abide by the terms and conditions as
specified in the agreement or provides false or
misleading information to CTRA in connection with an
application or agreement for Service;
10.3.3 fails to provide or maintain a security deposit or
other alternative when required to do so pursuant to
this agreement; or
10.3.4 intentionally or de facto transfers or assigns in
whole or in part CTRA's Service without the express
written authorization of CTRA, which shall be deemed
a fraudulent use of the Service.
10.4 Prior to such suspension or termination, CTRA will provide
Customer with reasonable notice of the suspension or
termination date, the reason(s) for the proposed suspension
or termination and any amount owing.
10.5 Notwithstanding anything herein contained, this agreement
shall terminate forthwith automatically if Customer:
10.5.1 uses CTRA's underlying carriers Service, facilities,
equipment or systems in a manner that adversely
affects CTRA's underlying carriers' operations or the
use of CTRA's underlying carriers' services by other
customers; or
10.5.2 commits an act of bankruptcy within the meaning of
the Bankruptcy and Insolvency Act (Canada); if any
bankruptcy or insolvency proceedings are taken by or
against the Customer; if Customer passes a resolution
to or makes any voluntary assignment for the benefit
of its creditors; if a receiver takes possession of
any of Customer's property; if Customer ceases to
carry on business in the normal course; if Customer
is liquidated or wound up, or avails itself of the
Companies' Creditors Arrangement Act (Canada).
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11. Access to Site and Disconnection
The employees of CTRA may enter the site where the Service is provided
at all reasonable hours to install, inspect, repair, maintain, replace
and disconnect all lines, and remove from the site CTRA's facilities
and equipment.
12. Notices
Any notices required or permitted to be given hereunder shall be in
writing and shall be deemed to have been received five (5) business
days after the post-marked date thereof if sent by mail, the next
business day following transmission if sent by facsimile, or at the
time of delivery if hand-delivered. Any notices shall be addressed as
follows:
12.1 to CTRA: CTRA Communications Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxxxxx XX X0X 0X0
Attn: Xxxx Xxxxxxxx
Fax No: (000) 000-0000
11.2 to Customer: APC Telecom Inc.
000 Xxxxxxxxx Xxx.
Xxxxx 0
Xxxxxxx XX X0X 0X0
13. Legal Costs
Customer shall be responsible for all costs, expenses, collection
agency fees, legal fees and disbursements incurred by CTRA to
recuperate any sums owing by Customer hereunder, including fees on an
solicitor/client basis in connection with any legal or other
proceedings where judgement against Customer or its clients is awarded
in favour of CTRA, or for, the creation and registration of the
security mentioned in clause 5.3 hereof.
14. Changes to Agreement
The terms and conditions, the rates, charges or other fees associated
with the Service are subject to changes from time to time. Upon
notification of any such changes, Customer becomes liable for all new
rates, charges or fees and is deemed to have accepted all new
applicable changes in the relevant terms and conditions, unless,
subject to the reserve of clause 4.5, Customer terminates the agreement
within one (1) week from the receipt of such notification.
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15. Assignment
Neither this agreement nor any right thereunder may be assigned,
transferred or otherwise disposed of in whole or in part by Customer
without the prior written consent of CTRA, which consent shall not be
unreasonably withheld. Without restricting the generality of the
foregoing, Customer shall be deemed to have assigned, transferred or
disposed of this agreement upon a change in the direct or indirect
control of Customer, including a sale of all or a substantial part of
its assets. In such case, Customer shall diligently notify CTRA and
provide it with the relevant information including but not limited to
the new controlling party's name and address.
16. Precedence and Governing Law
16.1 This agreement supersedes all prior verbal or written
agreements between the parties concerning the matters
dealt with herein, including any tender, quotation,
offer of services or purchase order.
16.2 This Agreement and the rights and obligations and
relations of the parties hereto shall be governed by
and construed in accordance with the laws of the
Province of Ontario and the federal laws of Canada
applicable therein (but without giving consideration
to any conflict of laws rules). The parties hereto
agree that the Courts of Ontario shall have exclusive
jurisdiction to entertain any action or other legal
proceedings based on any provisions of this
Agreement. Each party hereto does hereby attorn to
the jurisdiction of the Courts of the Province of
Ontario.
16.3 No waiver of any of the provisions of this agreement
shall be deemed to be a waiver of any other
provisions (whether similar or not) nor shall such a
waiver constitute a continuing waiver, unless
otherwise expressly provided for in writing and duly
executed by the party to be bound thereby.
16.4 If any clause or part thereof in this agreement be
illegal or unenforceable, it shall be considered
separate and severable from the agreement and the
remaining provisions shall remain in full force and
effect and shall be binding upon the parties as
though the said clause or part thereof had never been
included, providing that the agreement as thus
modified remains operable.
16.5 Customer has requested that this agreement and its
ancillary documents be drafted in English. Le Client
a exige que cet accord et ses documents connexes
soient rediges en langue anglaise.
17. Governmental Approvals
This agreement, together with all attachments and all covenants,
undertakings and obligations made herein, shall be conditional upon
both parties obtaining and maintaining all necessary governmental
licenses, consents, permits, authorizations and approval as are by law
necessary. Each party shall use its best reasonable efforts to seek and
maintain such authority as may be required.
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18. Credit Approval
This agreement will not become binding upon CTRA until final credit
approval by CTRA. If credit approval is denied to Customer, this
agreement will become null and void and will be deemed never to have
existed.
IN WITNESS WHEREOF the parties have executed this agreement on the ________ day
of ___________, 199____.
Customer:
By: By:
----------------------------- -----------------------------
Name:
Title: President
CTRA:
By: By:
----------------------------- -----------------------------
Name: Name:
---------------------- -----------------------
Title: Title:
---------------------- -----------------------
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Date: Authorized signature:
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Customer Service Agreement No: 9904
SCHEDULE A
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No: ____
Customer Service Agreement
ANNEX I TO
SCHEDULE A
STANDARD FORM OF
LETTER OF AUTHORIZATION
(LOA)
English Version:
Your signature below authorizes ( ) to notify your local telephone company of
your decision to subscribe to ( ) long distance telephone services under the
terms of Equal Access. Equal Access means your long distance calls are routed
automatically over ( ) network every time you dial "1" plus the long distance
telephone number. Only calls made from the phone number(s) listed above will be
the object of this subscription.
Signature: Date (y/m/d):
---------------------------- ----------------------
Signature: Date (a/m/j)
---------------------------- ----------------------
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PROCEDURES
PRECEDENT TO OBTAINING THE SERVICE
1. In order to obtain the Service, Customer must first:
1.1 obtain a standard CTRA Letter of Authorization
(hereinafter referred to as "LOA") or a third party
verification from each of its clients, detailing
which telephone number(s) the clients to be converted
to the Service. (The standard form of the LOA is
appended hereto as Annex 1 and the standard text of
the third party verification is appended hereto as
Annex 2); and
1.2 supply CTRA with a copy of the signed LOA or the
completed third party verification. It is understood
that only orders accompanied by one of such documents
will be considered and processed by CTRA
2. As soon as reasonably possible after the receipt of the
documents mentioned above, CTRA's underlying carriers will
process the Service orders submitted on behalf of Customer.
3. Service orders submitted to CTRA will direct the routing of
all "1+" or "011+" calls to CTRA's underlying carriers
network.
4. As and when Service orders are processed, Customer's clients
will have the opportunity to call a "1-700" number to
determine if activation of the Service has occurred. The
"1-700" number will have a CTRA underlying carrier voice
prompt.
5. Service orders will be processed on a first come, first served
basis.
6. Under normal conditions, and subject to having received all
prerequisite documentation complete and in order, CTRA will
process Service orders within nine (9) working days on the
average. However, CTRA will not assume nor incur any liability
for delays in processing such Service orders.
7. The billing cycle will end on the last day of each month, or
on such other date as may be determined by CTRA and notified
to Customer.
8. Billing will be provided on paper or magnetic media. The
following formats are permissible for the latter: 9 track
magnetic tape; 3 1/2" or 5 1/2" disk DOS; 3 1/2" disk
Macintosh.
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Customer Service Agreement No: 9901
No: _____
SCHEDULE B
SERVICE RATES AND CHARGES
Rates to be 105% of CTRA carrier cost. Effective with he commencement of the
term of this agreement the rates charged to Customer were as per the attached
chart.
SEE ATTACHED RATE CHART
Schedule B
Service Rates and Charges
Definitions:
Peak Rates: Monday to Friday 8:00 AM to 5:00 PM
Off Peak Rates: Monday to Friday 5:00 PM to 8:00 AM
All day Saturdays, Sundays and statutory holidays
Tier 1: Area Codes 416,418, 514, 450, 250, 403, 519, 604, 613,
705, 780, 000, 000, 000
Xxxx xx Xxxxxx: All other area codes in Canada not listed above
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Outbound Rates: (per minute rates, 30 second minimum 6 second increments)
Canadian Termination (Tier 1 origination) Peak $ 0.05775
Off-peak $ 0.04725
U.S. Termination Peak $ 0.07875
Off-peak $ 0.06825
Rest of Canada Termination (Non Tier 1 Origination) Peak $ 0.105
Off Peak $ .0945
Calling Cards (North America origination only)
Peak $ 0.168 Off-peak $ 0.168
Inbound Rates:
Canadian Origination: Peak $ .0840
Off-peak $ .0840
U.S. Origination Peak $ .0840
Off-peak $ 0.840
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