EXHIBIT 10.7
SERVICES AGREEMENT
THIS AGREEMENT is entered into this 25th day of August, 1999 by and between
ILD Communications, Inc., a Delaware corporation, hereinafter referred to as
"ILD", having its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇ , ▇▇▇▇▇ ▇▇▇▇▇ and Independent Network Services, a subsidiary of IP
▇▇▇▇▇.▇▇▇, Inc., hereinafter referred to as "Distributor", having its principal
place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS, Distributor is a carrier and reseller of prepaid long distance
debit cards (Debit Cards); and
WHEREAS, ILD is a provider of telecommunications services to the Telephone
and Debit Card Industries; and
WHEREAS, Distributor desires to purchase telecommunications services from
ILD as described in this Agreement.
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. TERM
a. The term of this Agreement shall be one (1) year (Initial Term).
Thereafter, this Agreement shall automatically renew for successive terms of one
(1) year each (Renewal Term(s)).
b. Either party may terminate this Agreement during the initial term or any
renewal term by providing the other party with thirty (30) days written notice
of such termination. Notwithstanding the above, either party may terminate this
Agreement, effective immediately, upon notice to the other party of any of the
following events: (A) the other party commences a voluntary case or other
proceeding seeking liquidation, rehabilitation, conservatorship, reorganization
or other similar relief under any bankruptcy, insolvency or similar law, seeks
the appointment of a trustee, receiver, liquidator, rehabilitation, conservator,
custodian or similar official of it or any substantial part of its property,
makes a general assignment for the benefit of creditors or (B) an involuntary
case or other proceeding is commenced against such other party
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seeking liquidation, rehabilitation, conservatorship, reorganization or other
relief under any bankruptcy, insolvency or similar law or seeking the
appointment of a trustee, receiver, liquidator, rehabilitator, conservator,
custodian or other similar Official of it or any substantial part of its
property related Contractual obligations.
2. OBLIGATIONS OF ILD AND Distributor. ILD and Distributor will have the
following obligations under this Agreement:
a. ILD will provide the following (Services) to Distributor:
(i) ILD shall provide, switching services and long distance rates
(Rate Decks) per EXHIBIT "A".
(ii) ILD shall provide a toll free "800" number(s) for the card. The
"800" number shall provide Distributor to ILD's debit card platform
with English and Spanish voice prompts. ILD shall provide a personal
identification number (PIN) for each debit card. The PIN will be
printed on the back of the debit card and will be used by the debit
card holder (End Users) to validate the dollar amount and number of
minutes available after dialing ILD 800 Distributor number. ILD will
provide voice prompts so the end user will be able to validate the
dollar amount and number of minutes available each time they use the
debit card. Said 800 number shall be available for Distributor
throughout the United States. ILD shall additionally provide
multilingual customer service for distributors prepaid calling cards
24 hours per day, 7 days a week.
(iii) Upon receipt of a request, from Distributor to activate certain
debit cards, ILD shall activate said debit cards by 12:00 noon Pacific
Standard Time of the following business day provided ILD receives such
request on or before 10:00 AM on the previous business day Pacific
Standard Time and Distributor is current with all obligations as set
forth in this agreement.
(iv) ILD agrees to use its best efforts to fully investigate any
discrepancy between the face value of cards and its program value. The
results of discrepant cards will be reported to Distributor within (3)
business days of receipt of written request.
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(v) Should service be interrupted and the platform experience busy
signals, dropped calls or other switching or network failure
distributor will be credited for cards that are returned to store and
card printing costs. Credits will apply as follows; Cards are to be
returned to ILD with a manifest showing the PIN number and value left
on card. Distributor will be credited for balance of card and card
cost. ILD will then issue credit memo within 7 working days from
receipt of returned cards.
(vi) ILD will provide distributor with a contact person to be used to
de-activate prepaid calling cards that are returned from the field.
This will insure returned cards cannot be re-used. (vii) Distributor
shall use its best efforts to market, solicit, and distribute ILD's
products and services to prospective customers.
(vii) Distributor shall present itself and professionally and
honestly to end users, potential customers and to the industry in
general.
(viii) Distributor shall be considered independent contractor, and at
no time should be considered an employee, representative or joint
venture partner of ILD.
(ix) Distributor shall cooperate, at its cost, with any investigation
or proceeding of any governmental authority related to its
distribution or sale of ILD products and services.
a. Distributor shall pay ILD for the services based on the following
rate schedule below. The commission will be on a sliding scale based on the
following cumulative volume;
Per rate deck listed in Exhibit A
Face Value of Card Cost to Distributor
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$ 5.00 $ 3.15
$10.00 $ 6.30
$20.00 $12.60
Face Value of Card Cost with additional 3% discount
$ 5.00 $ 3.00
$10.00 $ 6.00
$20.00 $ 12.00
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Discount rate for this card will be an additional 3% once distributor
sells (3) Three Million in face value of card. Printing costs are the
responsibility of distributor.
3. TERMS OF PAYMENT. After the debit cards are delivered to Distributor, they
shall notify ILD of the date to activate the debit cards. On the date ILD
activates cards an invoice shall be issued to distributor for services. For all
invoices, payment is to be received by ILD within 14 days of the activation of
cards. Payments from Distributor to ILD will be wire transferred to:
Nations Bank ABA# ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. Account # 3750855476
20th Floor GA1-006-20-12
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone - ▇▇▇-▇▇▇-▇▇▇▇
Net Terms are defined as Payments due on the 14th day following activation. A
stand by letter of credit will be in place in the event of default of payment
terms. The terms of the letter of credit will be Stand By in favor of ILD
Telecommunications, Inc. upon presentation of invoice and activation report in
duplicate. The amount of the letter of credit may require adjustments from time
to time to secure ILD. Written request will be sent to:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
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Phone - 602-335-1231 ext. 306
Request amendments will be made within 7 days to avoid interruption of
activation request.
Failure to pay invoices on the terms established in this paragraph is considered
an automatic breach of this agreement.
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4. TAXES. It is understood that ILD is responsible for all telecommunications
and Federal Excise tax applicable to sale of debit cards.
5. RESPONSIBILITY FOR SALES. Distributor will be solely responsible for and
indemnify ILD against claims including all attorneys' fees and costs regarding
the content and nature of all promotions, advertising and artwork associated
with the debit cards, including, but not limited to the solicitation of retail
distributors or vendors of the debit cards.
6. RESPONSIBILITY FOR SERVICES. ILD will be solely responsible for
telecommunications services. ILD agrees to use its best efforts to provide and
maintain the system operating the services in a reasonable working order. ILD
acknowledges it has granted distributor the opportunity to resell ILD prepaid
calling cards under applicable ILD tariffs and FCC 214 registrations in the ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇. The rates listed in Exhibit A have been filed with the public
utilities commission.
7. CONFIDENTIALITY. During the term of this Agreement and for a Period of one
(1) year thereafter, ILD and Distributor agree to protect and keep confidential
the trade secrets and proprietary information of the other (Proprietary
information). The terms and conditions of this Agreement, including the
wholesale buy rates set forth herein, shall be deemed proprietary information.
Neither party shall disclose, publish or otherwise make available such
proprietary information to any person or entity without the prior written
consent of the other party. The parties agree that the other will suffer
immediate and irreparable injury in the event of a breach of this paragraph for
which there is no adequate remedy at law. Accordingly, the parties specifically
agree that the restrictions of this paragraph may be enforced by injunction and
that irreparable injury shall be presumed. The parties specifically waive the
right to bond in any such injunction action. The remedies provided in this
paragraph are not exclusive and are in addition to any other remedies available
at law or in equity. The provisions of this paragraph shall survive termination
of this Agreement.
8. Rates. Distributor agrees to immediately renegotiate rates and/or discount
with ILD in the event that the average international call duration exceeds 18
minutes. If for any reason should ILD need to renegotiate rates supplier will be
notified at least 30 days in advance. ILD agrees to maintain all activated PINS
provided at the current rate structure associated with such Pin's.
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9. ASSIGNMENT OF TELECOMMUNICATIONS SERVICES. The parties may not assign their
rights and obligations under this Agreement unless said assignment is approved
in writing by the other party which approval will not be unreasonably withheld.
11. NOTICE. All notices and other communications pursuant to this Agreement
shall be in writing and shall be deemed proper if given by personal delivery,
overnight delivery service, facsimile or mailed by registered or certified mail,
return receipt requested, to the applicable party at its address indicated below
or such other address as may be hereafter designated by such party in writing in
accordance herewith:
If to ILD: ILD Telecommunications, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (503) 916 - 4279
Fax No. (503) 916 - 4279
If to Distributor: Independent Network Services
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (602) 335 - 1577
Fax No. (602) 335 - 1577
12. GENERAL PROVISIONS.
a. Applicable Law: This Agreement will be governed by and construed in
accordance with the Laws of the State of Georgia.
b. Invalidity. If any term or provision of this Agreement is determined to
be illegal, unenforceable or invalid, in whole or in part for any reason,
such term or provision shall be deemed limited in scope and effect to the
minimum extent necessary to make such term or provision legal, enforceable
and valid, and in the event no such limiting construction may be made, the
term or provision shall be stricken from this Agreement and such term or
provision shall not effect the legality, enforceability or validity of the
remainder of this Agreement.
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c. Waiver. Any waiver by either party of a breach of any Provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasion shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. All waivers
must be in writing.
d. Headings. The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the meaning or interpretation of
this Agreement.
e. Force Majeure. Neither party shall be liable for delays, failures to
perform, damages, losses or destruction, or malfunction of any equipment or
any consequence thereof caused or occasioned by, or due to fire, flood,
earthquake, water, the elements, labor disputes or governmental actions.
f. Entire Agreement. This Agreement and the exhibits hereto constitute the
entire Agreement between the parties for the subject matter hereof and
supersedes and replaces any and all prior agreements or arrangements
between the parties. The Agreement may be amended only as provided herein
or in writing signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and
year first written above.
ACCEPTED AND AGREED TO:
ILD Communications, Inc. Independent Network Services
SUPPLIER DISTRIBUTOR
BY:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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ITS: V.P. Retail ITS: President
DATE: 8/24/99 DATE: 8/26/99
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