1
CARRIER AGREEMENT
BETWEEN
AT&T CORP.
AND
LONG DISTANCE DIRECT INC.
CONFIDENTIAL AND PROPRIETARY
between
AT&T and Long Distance Direct, Inc.
2
TABLE OF CONTENTS
-----------------
Section 0 Signature Page
Section 1: General Terms and Conditions
Section 2: Eligibility of Customer
Section 3: Responsibilities of Customer
Section 4: Responsibilities of AT&T
Section 5: Services and Service Descriptions
Section 6: Service Rates, Terms and Conditions
2
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
3
SECTION 0: SIGNATURE PAGE
THIS CARRIER AGREEMENT ("Agreement") is made and entered into by and
between AT&T Corp., a corporation organized and existing under the laws of the
State of New York and having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("AT&T") and Long Distance Direct Inc., having an office at
________________________________________ ("Customer"). The terms and conditions
herein constitute an offer by Customer as of the date of Customer's signature
below which may be accepted only by AT&T's signature below. This Agreement shall
become effective when signed by both parties.
AT&T and Customer, acting through their duly authorized representatives,
hereby agree to the terms set forth in Sections 1 through 6 of this Agreement as
attached hereto.
CUSTOMER AT&T CORP.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By /s/ ▇.▇. ▇▇▇▇▇▇▇
----------------------- -----------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
----------------------- -----------------------
Printed or Typed Name Printed or Typed Name
Vice-President, CFO Spec. Mkts. V.P.
----------------------- -----------------------
Title Title
February 6, 1997 2/10/97
----------------------- -----------------------
Date Date
3
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
4
[Logo] AT&T
================================================================================
SECTION 1: GENERAL TERMS AND CONDITIONS
1.A. Assignment. Customer may not assign this Agreement in whole or in part
without the prior written consent of AT&T, which shall not be unreasonably
withheld. AT&T may, in its discretion, condition its consent to such
assignment upon the posting of an appropriate deposit by the assignee
pursuant to Paragraph 4.D of this Agreement. AT&T reserves the right to
deny or revoke its consent to such assignment at any time if the assignee
proves unwilling or unable to meet the eligibility requirements of this
Agreement, in which event the Customer shall remain or again become
responsible for performance of all terms of this Agreement. This provision
shall not affect the Customer's right to resell Service. Further, any
resale or assignment shall not release the original Customer from its
obligations under this Agreement.
1.B. Combination with Other Services or Offers. This AT&T Carrier Agreement may
not be used in conjunction with any other AT&T Carrier Agreement, AT&T
Contract Tariff, or promotions for any AT&T Services.
1.C. Independent Parties. The relationship established by this Agreement shall
in no way constitute AT&T (or its agents or employees) as a partner, agent
or fiduciary of Customer. The relationship established by this Agreement
shall in no way constitute the Customer (or their agents or employees) as
a partner, agent or fiduciary of AT&T. The provision of Service described
in this Agreement does not establish any joint undertaking, joint venture,
or fiduciary relationship between AT&T and Customer.
I.D. Acknowledgment of Right to Compete. Customer acknowledges and understands
that it remains at all times solely responsible for the success and
profits of its business, and that AT&T makes no promises, warranties or
representations regarding the Customer's business success or prospects of
business success in connection with the provision of service pursuant to
this Agreement. Customer acknowledges and understands that AT&T will
continue to market AT&T services directly to the public and that such
marketing may from time to time bring AT&T into direct or indirect
competition with Customer, and that AT&T may also market its services to
competitors of Customer. Customer acknowledges and understands that
nothing in this Agreement diminishes or restricts in any way the rights of
AT&T to engage in competition with Customer or to market its services to
competitors of Customer.
1.E. Use of Proprietary Information. In the event that either Customer or AT&T,
in the course of performance of their obligations to each other under this
Agreement, obtains or receives proprietary information from the other, it
agrees to use such information only for the purpose of complying with its
obligations under this
4
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
5
[Logo] AT&T
================================================================================
Agreement and not to use such information for its own marketing
purposes. Customer acknowledges that AT&T may use for its own
marketing purposes any and all information that it obtains from
sources other than Customer, including but not limited to information
that AT&T may have regarding Customer's End-Users as a result of the
past or present sale or provision by AT&T of telecommunications
services or equipment to said End-Users.
1.F. Force Majeure. Neither party nor its affiliates, subsidiaries,
subcontractors, or parent corporation shall be liable in any way for
delay, failure in performance, loss or damage due to any of the following:
fire, strike, embargo, explosion, power blackout, earthquake, volcanic
action, flood, war, water, the elements, labor disputes, civil or military
authority, acts of God, acts of the public enemy, inability to secure raw
materials, inability to secure products, acts or omissions of carriers, or
other causes beyond its reasonable control, whether or not similar to the
foregoing.
1.G. Severability. If any portion of this Agreement shall be found to be
invalid or unenforceable, such portion shall be void and of no effect, but
the remainder of the Agreement shall continue in full force and effect
unless the Agreement fails of its essential purpose without the voided
portion.
1.H. Notices. All notices, identifications, formal requests or other formal
communications required or desired to be given in connection with this
Agreement, shall be in writing and shall be effective when delivered in
person, mailed by registered or certified post or sent by Telex or
facsimile ("FAX") to the recipient party, unless the parties otherwise
agree in writing. Notice shall be addressed to the following:
If to AT&T:
If to Customer:
5
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
6
[Logo] AT&T
================================================================================
1.I. Modification And Waiver. This Agreement may be modified only by a writing
signed by both parties. The failure of a party to enforce any right under
this Agreement at any particular point in time shall not constitute a
continuing waiver of any such right with respect to the remaining term of
this Agreement, or the waiver of any other right under this Agreement.
1.J. Compliance with Laws. Each party is responsible for its own compliance
with all laws and regulations affecting its business, including but not
limited to the collection and remittance of all taxes and other levies
imposed by law.
1.K. Choice of Law. The domestic law of the State of New York, except its
conflict-of-laws rules, shall govern the construction, interpretation, and
performance of this Agreement.
1.L. Confidentiality. The Terms, conditions, and rates contained in this
Agreement are confidential, and shall remain so unless and until it shall
be determined by AT&T that the Communications Act of 1934 (or any
subsequent legislation) and the regulations promulgated thereunder require
the filing of this Agreement with the Federal Communications Commission
("Commission"), or unless the Commission orders the filing of this
Agreement pursuant to authority granted to the Commission by law or
regulation. In such event, AT&T shall file the Agreement within thirty
days of its execution, or upon such determination that filing is required,
or upon being ordered by the Commission to do so (whichever is later);
provided, that AT&T nonetheless shall keep the identity of Customer
confidential unless required by law, regulation or the Commission to
disclose such identity. Absent such filing requirement, neither party
shall disclose the terms or conditions of this Agreement to any third
party, nor issue any public statements relating to this Agreement without
the written consent of the other party, unless such disclosure or
statement is reasonably believed by the party to be compelled by
governmental authority. A disclosing party shall furnish reasonable prior
notice to the other party before making the statement or disclosure unless
prohibited by law from doing so.
6
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
7
[Logo] AT&T
================================================================================
1.M. Dispute Resolution. If a dispute arises out of or relates to this
Agreement, or its breach, the parties agree to submit the dispute to a
sole mediator selected by the parties or, at any time at the option of a
party, to mediation by the American Arbitration Association ("AAA"), to be
held in Morristown, New Jersey. If not resolved by mediation, it shall be
referred to a sole arbitrator selected by the parties within thirty (30)
days of the mediation or, in the absence of such selection, to AAA
arbitration which shall be governed by the United States Arbitration Act
and judgment on the award may be entered in any court having jurisdiction.
The arbitrator may not limit, expand or otherwise modify the terms of this
Agreement. The parties, their representatives, other participants and the
mediator and arbitrator shall hold the existence, content and results of
mediation and arbitration in confidence.
1.N. Trade Names, Trademarks, Service Marks and Registered Marks. Neither
Customer nor AT&T shall use the other's trade names, trademarks or service
marks ("Marks") without the prior written approval of the other party.
Neither shall display or use the other's Marks, nor permit the same to be
displayed or used by third parties. Nothing in this Agreement creates in a
party rights in the Marks of the other.
1.0. Entire Agreement. This Agreement constitutes the entire agreement of the
parties with respect to the subject maker hereof and supersedes all prior
written or oral agreements, proposals or understandings.
7
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
8
[Logo] AT&T
================================================================================
1.P. Definitions. As used in this Agreement, the definitions set forth in AT&T
Tariff F.C.C. Nos. 1, 2, 9, 11 and 14 shall apply except to the extent
that they are modified or supplemented as follows:
1.P.1. End-Users: Those persons or entities to which Customer
provides service as a telecommunications common carrier utilizing
the service provided to Customer by AT&T pursuant to this Agreement.
1.P.2. Dispute: Any controversy or claim between the parties under
this Agreement or which relates directly or indirectly to this
Agreement or the services provided hereunder, whether based on
contract, product liability, statute, tort (including negligence or
strict liability) or other legal or equitable theory, whenever
brought, between the parties or any of their employees or agents.
1.P.3. CISD: The date for commencement of installation of Service
established pursuant to Paragraph 3.B. of this Agreement.
1.P.4. Tariffs: As used in this Agreement, the term "tariffs",
Applicable Tariffs", or any variation thereof shall mean AT&T Tariff
F.C.C. Nos. 1, 2, 9, 11 and 14, in effect on the effective date of
this Agreement and any subsequent revisions to such AT&T tariffs as
such tariffs pertain to the AT&T telecommunications services
provided pursuant to this Agreement, as well as the documents which
will replace those tariffs when AT&T cancels those tariffs.
l.P.5. Direct Dial Station Call: That service where the person
originating the call dials the telephone number desired, completes
the call without the assistance of an operator, and the call is
billed to the originating number.
8
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
9
[Logo] AT&T
================================================================================
SECTION 2: REQUIREMENTS AND CERTIFICATION OF ELIGIBILITY
2.A. Eligibility. The rates, terms and conditions herein are expressly
conditioned upon the Customer's meeting the following eligibility
requirements. Customer is an interexchange telecommunications common
carrier which certifies as follows:
2.A.1. Customer has obtained the required operating authority in all
states in which it conducts business, as well as all authority required by
the FCC for resale of telecommunications services, including but not
limited to authority required pursuant to Section 214 of the
Communications Act of 1934, 47 U.S.C. ss.214.
2.A.2. Customer complies and will continue to comply at all times with all
federal and state laws and regulations applicable to the sale and
provision of service to its customers, including but not limited to those
laws and regulations applicable to the authorization and proof of
authorization necessary to convert an End-Users former service to
Customer's service as the End-User's Primary Interexchange Carrier.
2.A.3. Customer will utilize the Service offered hereunder only for lawful
purposes, including but not limited to resale of the Service or components
thereof. In the event that Customer resells the Service provided
hereunder, it will do so only under its own names, tradenames, logos,
trademarks or servicemarks. Customer will not publish or use any
advertising, sales promotions, press releases, or other publicity matters
which use AT&T's corporate or trade names, logos, trademarks, service
marks, trade dress, or other symbols that serve to identify and
distinguish AT&T from its competitors (or which use confusingly similar
corporate or trade names, logos, trademarks, service marks, trade dress or
other symbols), and will not conduct business under AT&T's corporate or
trade names, logos, trademarks, service marks, trade dress, or other
symbols that serve to identify and distinguish AT&T from its competitors
(or under any confusingly similar corporate or trade names, logos,
trademarks, service marks, trade dress or other symbols). Customer
(including its agents, representatives and independent contractors) will
not indicate or imply to any person or entity that it is AT&T which is
selling or providing service to Customer's End-users, or that it is
affiliated or authorized by AT&T to sell or provide such service to them
or that it is selling or providing such service to them jointly or in
collaboration or partnership with AT&T, or as the agent of AT&T.
2.A.4. Customer has had no complaints or proceedings brought against it,
within two months prior to its execution of this Agreement, by the FCC, by
any state public utilities commission by any state Attorney General, or by
any other federal
9
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
10
[Logo] AT&T
================================================================================
or state authority charging Customer with misrepresenting its affiliation or
relationship to AT&T or to any other carrier whose service it has resold, and no
such complaints or proceedings are pending as of Customer's execution of this
Agreement.
2.B. Termination for Lack of Eligibility. If at any time during the term of
this Agreement Customer fails to comply with any requirement for
eligibility contained in Paragraphs 2.A.1 through 2.A.4., above, such
failure shall constitute a material breach of this Agreement which shall
entitle AT&T to terminate this Agreement and the Service provided
hereunder on five (5) days written notice. In the event of such
termination, Customer shall indemnify, defend and hold harmless AT&T from
any and all complaints, causes or action or other claims brought against
AT&T by any of Customer's End-Users due to said termination.
2.C. Default. If at any time during the term of this Agreement either party
shall commit an act of bankruptcy within the meaning of the United States
Federal Bankruptcy Act, or bankruptcy, receivership, insolvency,
reorganization, dissolution, liquidation, or other proceedings shall be
instituted by or against either party or all or any substantial part of
its property under an applicable law of the United States or any state
thereof, and such proceeding shall not be dismissed within ninety (90)
calendar days, the non-defaulting party shall have the right to terminate
this Agreement.
10
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
11
[Logo] AT&T
================================================================================
SECTION 3: RESPONSIBILITIES OF AT&T
3.A. Provision of Service. Subject to its Correspondence Agreements and
regulation by Federal and state authorities, AT&T shall provide Service in
accordance with its standard practices and procedures for the operation of
its network. AT&T is responsible for the provision of Service from station
to station, but is not responsible for the quality of transmission or
signaling on the Customer's side of the interface at a Customer's
premises. Service is furnished subject to the availability of the service
components required.
3.B. Installation. Upon execution of this Agreement AT&T shall establish a due
date for commencement of installation of Service and confirm said date
with the Customer (CISD). A Customer may delay said due date for
commencement of installation when the Customer's written request for said
delay is received by AT&T at least five (5) business days prior to said
due date, provided that the delay of said due date shall not exceed 30
cumulative calendar days. AT&T will make every reasonable effort to
commence installation of Service by the due date, but Customer
acknowledges that in some cases a delay in commencement of installation
may be unavoidable. If commencement of installation is delayed for more
than 45 days beyond the due date, and such delay is not requested or
caused in whole or in part by the Customer, the Customer may cancel its
order for Service pursuant to this Agreement and shall not thereby be
considered to have breached this Agreement; such cancellation shall be
Customer's sole remedy for such delay.
3.C. Maintenance. AT&T shall maintain Service in conformity with its standard
network operating procedures.
3.D. Limitation of Liability. AT&T (INCLUDING ITS SUBSIDIARIES, AFFILIATES,
PREDECESSORS, SUCCESSORS AND ASSIGNS) MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, AND SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO SERVICES OR PRODUCTS
PROVIDED PURSUANT TO THIS AGREEMENT. AT&T'S LIABILITY FOR SERVICE
INTERRUPTIONS FOR ANY SERVICE PROVIDED PURSUANT TO THIS AGREEMENT SHALL
NOT EXCEED AN AMOUNT EQUAL TO A PRO-RATED PORTION OF THE RECURRING CHARGES
PROVIDED FOR UNDER THIS AGREEMENT FOR THE SERVICE AFFECTED FOR THE
PERIOD(S) DURING WHICH SAID SERVICE WAS AFFECTED. THIS LIMITATION OF
LIABILITY SHALL APPLY REGARDLESS OF THE FORM OF ACTION, WHETHER IN
CONTRACT, TORT, WARRANTY, STRICT LIABILITY, OR NEGLIGENCE (INCLUDING
WITHOUT LIMITATION ACTIVE AND PASSIVE NEGLIGENCE). IN NO EVENT SHALL AT&T
BE
11
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
12
[Logo] AT&T
================================================================================
LIABLE FOR CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES OR LOST PROFITS SUSTAINED
BY REASON OF ITS PERFORMANCE OF THIS AGREEMENT, OR FOR ANY FAILURE, BREAKDOWN,
OR INTERRUPTION OF SERVICE, WHATEVER SHALL BE THE CAUSE, OR HOWEVER LONG IT
SHALL LAST, AND REGARDLESS OF WHETHER ANYONE HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES. AT&T SHALL HAVE NO LIABILITY FOR DAMAGES CAUSED (1) BY
CUSTOMER'S FAILURE TO PERFORM ITS RESPONSIBILITIES UNDER THIS AGREEMENT, OR (2)
BY THE ACTS OF THIRD PARTIES (INCLUDING WITHOUT LIMITATION CUSTOMER'S USERS OR
END USERS). AT&T DOES NOT GUARANTEE OR MAKE ANY WARRANTY WITH RESPECT TO THE
SERVICE PROVIDED PURSUANT TO THIS AGREEMENT WHEN USED IN AN EXPLOSIVE
ATMOSPHERE. THIS AGREEMENT DOES NOT CREATE ANY CLAIM OR RIGHT OF ACTION, NOR IS
IT INTENDED TO CONFER ANY BENEFIT ON ANY THIRD PARTY, INCLUDING BUT NOT LIMITED
TO ANY USER OR END-USER OF CUSTOMER. THE LIMITATIONS OF LIABILITY SET FORTH IN
THIS AGREEMENT SHALL SURVIVE FAILURE OF AN EXCLUSIVE REMEDY.
3.E. Service, Channels or Equipment of Others. AT&T is not liable for damages
associated with service, channels, or equipment that it does not furnish.
AT&T does not provide Customer equipment.
3.F. No Patent or Software License. No license under patents or software
copyrights (other than the limited license to use) is granted by AT&T or
shall be implied or arise by estoppel, with respect to Service offered
under this Agreement.
12
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
13
[Logo] AT&T
================================================================================
SECTION 4: RESPONSIBILITIES OF CUSTOMER
4.A. Placement of Orders and Compliance with Regulations. Customer is
responsible for placing any necessary orders and for assuming that it, its
Users and its End-Users comply with the provisions of this Agreement and
with all applicable federal and state laws and regulations.
4.B. Billing; Responsibility for Payment. Customer is liable for all amounts
due to AT&T hereunder, subject to the following. AT&T will provide to
Customer a single monthly ▇▇▇▇ for each of the Services provided under
this Agreement, or at AT&T's option a single monthly ▇▇▇▇ for all of the
Services provided under this Agreement. Said ▇▇▇▇ or bills will be sent to
one Customer location designated by the Customer. Payment of charges is
due upon presented of a ▇▇▇▇ unless a different due date appears on the
face of the ▇▇▇▇, in which case payment shall be due on said date.
Customer shall be solely for rendering of bills to and collection of
charges from its end-users. Failure of Customer to ▇▇▇▇ and collect
charges from its end-users shall not excuse in whole or in part Customer's
responsibilities to AT&T under this Agreement, including but not limited
to the responsibility to render to AT&T timely payment of charges.
Customer shall reimburse AT&T for reasonable attorneys fees and any other
costs associated with collecting delinquent payments from Customer. At
AT&T's option, interest charges may be added to any undisputed adjudged
past due amounts at the rate of one and one-half per cent (1 1/2%) per
month, unless such interest rate exceeds the maximum allowed by applicable
law, in which case interest shall be at the maximum lawful rate.
4.C. Interfacing and Communicating with End-Users. Interfacing and
communicating with End-Users shall be the sole responsibility of Customer
with respect to any use that Customer may make of the service provided
pursuant to this Agreement to in turn provide service to other persons or
entities. Such interfacing and communicating shall include without
limitation installation of service, termination of service, placing of
orders, billing and billing inquiries, reporting of service outages and
problems, collection of charges and handling and resolution of all
disputes.
4.D. Deposits. If AT&T, in its reasonable discretion determines that the
security interest is not sufficient to guarantee the payment of charges
(including but not limited to shortfall charges attributable to Customer's
failure to comply with any revenue or volume commitment or any monitoring
condition in this Agreement), AT&T may require the Customer to tender a
deposit in an amount to be determined by AT&T, in an amount not to exceed
two million dollars or four times Customer's ________________ monthly
commitment whichever is higher. To determine
13
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
14
[Logo] AT&T
================================================================================
the financial responsibility of Customer and/or the specific amount of any
deposit required, AT&T may rely upon commercially reasonable factors to
assess and manage the risk of non-payment, including but not limited to
payment history for telecommunications service (including such service
purchased from AT&T), number of years in business, bankruptcy or
insolvency history, current AT&T account treatment status, financial
statement analysis, and commercial credit bureau rating. It shall be
Customer's responsibility to provide to AT&T upon request such information
as is necessary for AT&T to determine the financial responsibility of
Customer, including but not limited to Customer's tax returns, audited or
unaudited financial statements and loan applications. A deposit does not
relieve Customer of the responsibility for the prompt payment of bills on
presentation or the due date appearing on the face of the bills. In lieu
of a cash deposit, AT&T will accept Bank Letters of Credit and Surety
Bonds which have been approved by AT&T. Interest will be paid to a
Customer for the period that a cash deposit is held by AT&T. The interest
rate used will be simple interest at the rate of six percent annually
unless a different rate has been established by the appropriate legal
authority in the state where the Service offering is located. The failure
of Customer to post a deposit as required by AT&T pursuant to this
paragraph shall constitute a material breach of this Agreement by Customer
which shall entitle AT&T to terminate this Agreement and the service
provided hereunder upon five (5) days written notice to Customer. When the
service for which the deposit has been required is discontinued, the
deposit will be applied to the final ▇▇▇▇ and any credit balance will be
refunded to the Customer with applicable interest accrued.
4.E. Customer's Use of Service. Customer may use the services provided pursuant
to this Agreement for any lawful purpose consistent with the transmission
and switching parameters of the telecommunications network, and may resell
its use (or the use of any part thereof) to a third party in the normal
course of the Customer's business, subject to the following:
4.E.1. Abuse. The abuse of Service is prohibited. The following activities
constitute abuse:
4.E.1.A. Using Service to make calls that might reasonably be
expected to frighten, abuse, torment, or harass another, or
4.E.1.B. Using Service in such a way that it interferes
unreasonably with the use of Service or AT&T's network by others.
In any instance in which AT&T believes in good faith that there is
abuse of Service as set forth above, AT&T may, upon 5 days prior
written notice to the Customer, and without liability on the part of
AT&T,
14
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
15
[Logo] AT&T
================================================================================
restrict, suspend or discontinue providing Service, unless Customer
cures such abuse to AT&T's reasonable satisfaction within such
period.
4.E.2. Fraudulent Use. The fraudulent use of, or the intended or attempted
fraudulent use of, Service is prohibited. The following activities
constitute fraudulent use:
4.E.2.A. Using Service to transmit any message or code, locate a
person, or otherwise give or obtain information, without payment for
Service, or
4.E.2.B. Using or attempting to use Service with the intent to avoid
the payment, either in whole or in part, of any charges by any means
or device, or
4.E.2.C. Using Service to carry calls that originate on the network
of a facilities-based interexchange carrier other than AT&T and
terminate disproportionately to locations for which the cost to AT&T
of terminating switched access is above the average cost of
terminating switched access, based on the published access tariffs
of local exchange companies.
In any instance in which AT&T believes in good faith that there is
fraudulent use of Service as set forth above, AT&T may, immediately
and upon written notice to the Customer, and without liability on
the part of AT&T, restrict, suspend or discontinue providing
Service.
4.E.3. Interference, Impairment or Improper Use. Customer may not use
Service in any manner that subjects AT&T personnel or non-AT&T
personnel to hazardous conditions or results in immediate harm to
the AT&T network or other AT&T services. In any instance in which
AT&T believes in good faith that Service is being used in such
manner, AT&T may immediately restrict Service on a temporary basis.
In such cases, AT&T will make a reasonable effort to give the
Customer prior notice. In the event that Customer does not provide
to AT&T within five (5) business days of the temporary restriction
of service acceptable proof that said use has ceased and that
appropriate measures have been taken to prevent its recurrence, AT&T
may immediately and without further notice terminate service.
4.F. Access to Customer's Premises. The Customer is responsible for arranging
premises access at any reasonable time so that AT&T personnel may install,
repair, maintain, inspect or remove Service components. Premises access
must be made available at a time mutually agreeable to the Customer and
AT&T.
15
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
16
[Logo] AT&T
================================================================================
4.G. Loss. The Customer is liable to AT&T for the replacement cost of
AT&T-provided equipment installed at the Customer's premises in the event
of loss of said equipment for any reason, including but not limited to
theft.
4.H. Duty to indemnify and Defend. Customer shall indemnify, defend, and hold
harmless AT&T and its directors, officers, employees, agents, parent,
subsidiaries, successors, and assigns from all claims, damages and
expenses (including reasonable attorneys' fees) arising out of or
resulting from, in whole or in part, the acts or omissions of Customer or
its End-Users, their employees, agents or contractors affiliated companies
and their employees, agents or contractors, including but not limited to
claims for libel, slander, invasion of privacy, or infringement of
copyright arising from any communication and claims for patent
infringement arising from combining or using services or equipment
furnished by AT&T in connection with services or equipment furnished by
others. Customer shall also indemnify, defend and hold AT&T harmless for
all causes of action, claims, liabilities or expenses asserted or incurred
by any of Customer's Users or End-Users arising out of any failure,
breakdown, or interruption of service provided to Customer by AT&T or to
End-Users by Customer. Customer shall indemnify, defend and hold AT&T
harmless for all causes of action, claims, liabilities or expenses
asserted or incurred by Customer's End-Users due to Customer's marketing
efforts, including but not limited to Customer's violation of laws and
regulations applicable to the authorization and proof of authorization
necessary to convert an End-User's former service to Customer's service as
the End-User's Primary Interexchange Carrier. AT&T shall be indemnified,
defended, and held harmless by the Customer, Users and End-Users against
all claims, losses, or damages by any person relating to such Service when
used in an explosive atmosphere.
16
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
17
[Logo] AT&T
================================================================================
SECTION 5: SERVICES AND SERVICE DESCRIPTIONS
5.A. Domestic Interstate and International Services. The following domestic
interstate and international services are provided pursuant to this
Agreement:
5.A.1. AT&T Services (as described and defined AT&T Tariff F.C.C. No. 1,
as amended from time to time) consisting of:
a) AT&T Custom Software Defined Network (SDN) Service and
International Calling Capability
b) AT&T Distributed Network Service (DNS)
5.A.2. AT&T 800 Services (as described and defined in AT&T Tariff F.C.C.
No. 2 and 14, as amended from time to time) consisting of:
a) AT&T 800 Service-Domestic
b) AT&T 800 Service-Canada
c) AT&T 800 Service-Mexico
d) AT&T 800 Service-Puerto Rico and the U.S. Virgin Islands
e) AT&T MEGACOM/reg 800 Service-Domestic
f) AT&T MEGACOM/reg 800 Service-Canada
g) AT&T MEGACOM/reg 800 Service-Mexico
h) AT&T MEGACOM/reg 800 Service-Overseas
i) AT&T MEGACOM/reg 800 Service-Puerto Rico and the ▇.▇.▇▇▇▇▇▇
islands
j) AT&T 800 READYLINE/reg Service-Domestic
k) AT&T 800 READYLINE/reg Service-Canada
1) AT&T 800 READYLINE/reg Service-Mexico
m) AT&T 800 READYLINE/res Service-Overseas
n) AT&T 800 READYLINE/res Service -Puerto Rico and the U.S. Virgin
Islands
5.A.3. AT&T Private Line Services (as described and defined in AT&T Tariff
F.C.C. No. 9, as amended from time to time) consisting of:
a) AT&T ACCUNET/sm Tl.5 Service
5.A.4. AT&T Local Channel Services (as described and defined in AT&T
Tariff F.C.C. No. 11, as amended from time to time) consisting of:
a) AT&T TERRESTRIAL 1.544 Mbps Local Channel Services
17
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
18
[Logo] AT&T
================================================================================
5.B. Intrastate Services. The following intrastate services are provided
pursuant to AT&T's state tariffs governing such service:
5.B.1. AT&T Custom Software Defined Network (SDN) Service
5.B.2. AT&T Distributed Network Service (DNS) Service - Domestic
5.B.3. AT&T MEGACOM 800 Service-Domestic
5.B.4. AT&T 800 READYLINE Service-Domestic
5.B.5. AT&T 800 Service - Domestic
18
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
19
[Logo] AT&T
================================================================================
SECTION 6: SERVICE RATES, TERMS AND CONDITIONS
6.A. Service Term. The term of this Agreement is 48 months beginning with the
first day of the Customer's first full billing month under this Carrier
Agreement, which is referred to as the Customer's Initial Service Date
(CISD). No renewal option is available for this Agreement.
6.B. Minimum Revenue Commitments
6.B.1. The Minimum Annual Revenue Commitment (MARC) for the AT&T SDN and
AT&T DNS Services provided under this Agreement, prior to the application
of the Discounts specified in 6.D., following, is $4,800,000 for years one
through three and $5,900,000 for year four.
If on any anniversary of the CISD, the Customer fails to satisfy the MARC
for the preceding year, the Customer will be billed an amount equal to the
difference between the MARC and the actual undiscounted charges for that
year.
6.C. Usage Rates. AT&T reserves the right to increase from time to time the
rates for the Services Provided under this Agreement, regardless of any
provisions in this Agreement that would otherwise stabilize rates or limit
rate increases, as a result of charges imposed on AT&T stemming from an
order, rule or regulation of the Federal Communications Commission or a
court having competent jurisdiction relating to compensation of payphone
service providers. If necessary, revisions will be filed in this Agreement
to reflect the actual rates. The Contract Prices for the Services Provided
pursuant to this Agreement are as follows:
6.C.1. The Contract Price for the AT&T SDN Services and International
Calling Capability provided under this Agreement is the same as the
undiscounted Recurring and Nonrecurring Rates and Charges specified in
AT&T Tariff F.C.C. No. 1, as amended from time to time, except for those
Usage Rates specified below:
AT&T SDN Rate Schedule A and A-PV (excluding NRA)
Initial 18 Seconds Each Additional 6 Seconds
------------------ -------------------------
A11
Mileage Day Evening Night Day Evening Night
--- ------- ----- --- ------- -----
Bands $0.0552 $0.0552 $0.0552 $0.0184 $0.0184 $0.0184
19
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
20
[Logo] AT&T
================================================================================
AT&T SDN Rate Schedule B and B-PV(excluding NRA)
Initial 18 Seconds Each Additional 6 Seconds
------------------ -------------------------
A11
Mileage Day Evening Night Day Evening Night
--- ------- ----- --- ------- -----
Bands $0.0339 $0.0339 $0.0339 $0.0113 $0.00113 $0.0113
6.C.2. The Contract Price for the AT&T DNS Services provided under this
Agreement is the same as the undiscounted Recurring and Nonrecurring Rates
and Charges specified in AT&T Tariff F.C.C. No. 1, as amended from time to
time.
6.C.3. The Contract Price for the AT&T 800 Services provided under this
Agreement is the same as the undiscounted Recurring and Nonrecurring Rates
and Charges specified in AT&T Tariff F.C.C. No. 2 and 14, as amended from
time to time.
6.C.4. The Contract Price for AT&T TERRESTRIAL 1.544 Mbps Local Channel
Services provided under this Agreement is the same as the undiscounted
Recurring and Nonrecurring Rates and Charges as specified in AT&T Tariff
F.C.C. No. 11, as amended from time to time.
6.C.5. The Contract Price for AT&T ACCUNET T1.5 Access Connections
provided under this Agreement is the same as the undiscounted Recurring
and Nonrecurring Rates and Charges as specified in AT&T Tariff F.C.C. No.
9, as amended from time to time.
6.D. Discounts. Volume discounts applicable to the services provided pursuant
to this Agreement are as follows. No other discounts apply.
6.D.1. AT&T SDN Services and International Calling Capability
a) Base Discounts - The customer will receive the following discounts in
lieu of those specified for the Term and Volume Plan (TVP) in AT&T Tariff
F.C.C. No. 1. These discounts will be applied in the same manner as the
TVP as specified in AT&T Tariff F.C.C. No. 1, as amended from time to
time.
Domestic AT&T SDN Services - Outbound Usage Discounts
------------------------------------------- ---------
All Domestic Outbound Usage 32%
International Usage Discounts
------------------- ---------
-20-
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
21
[Logo] AT&T
================================================================================
All International Usage 23%
b) Additional Discounts - None
6.D.2. AT&T DNS Services:
a) Base Discounts - The customer will receive the following Base Discounts
each month in lieu of those specified for the AT&T DNS Term Plan in AT&T
Tariff F.C.C. No. 1. The following discounts will be applied, each month,
using the same method as specified in Section 6.12. of AT&T Tariff F.C.C.
No. 1 (Method of Determining Discount). The following discounts for AT&T
DNS apply to DNS locations and are applied to AT&T DNS usage charges in the
billing month in which the AT&T DNS charges are billed.
Domestic Direct Dialed (1+) AT&T DNS monthly usage charges.
0% discount on the amounts over $0 up to $10,000.00
10% discount on the amounts over $10,000.00 up to $20,000.00
29% discount on the amounts over $20,000.00 up to $1,000,000.00
0% on amounts over $1,000,000.00
International Direct Dialed (1+) AT&T DNS monthly usage charges.
0% discount on the amounts over $0 up to $5,000.00
12% discount on the amounts over $5,000.01 up to $15,000.00
16% discount on the amounts over $15,000.01 up to $60,000.00
18% discount on the amounts over $60,000.01 up to $200,000.00
20% discount on the amounts over $200,000.01
b) Additional Discounts - None
6.D.3. AT&T 800 Services
a) Base Discounts - The customer will receive a 23% discount on all AT&T
800 Services usage charges. The Customer will receive the same monthly
discounts as the Revenue Volume Pricing Plan (RVPP) as specified in AT&T
Tariff F.C.C. 2.
b) Additional Discounts - None
6.E. Credits and Waivers.
-21-
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
22
[Logo] AT&T
================================================================================
6.E.1. AT&T DNS Credit - Customer will be eligible to receive a credit each
month that the Customer has satisfied one-twelfth of the MARC (as specified
in section 6.B.1 preceding) for AT&T SDN Service and AT&T DNS Services. The
credit, if any, will be applied to the Customer's second AT&T DNS ▇▇▇▇
after the month in which the credit has been earned, and will be an amount,
not less than zero equal to: (a) the billed monthly usage charges for
interstate direct dial (1+) AT&T DNS calling after the application of the
discounts in Section 6.D.2., minus (b) the number of billed monthly
interstate direct dial (1+) AT&T DNS minutes for the month multiplied by
$0.1250.
Credit = [Billed Monthly Interstate Direct Dial (1+) AT&T DNS Usage
Charges, after application of discounts in Section 6.D.2.]
- [(Billed Monthly Interstate Direct Dial (1+) AT&T DNS minutes) *
($0.1250)]
6.F. Classifications, Practices and Regulations. Except as otherwise provided in
this Agreement, the terms, conditions, regulations and charges that apply
to the Services Provided specified in Section 5.A., preceding, are as set
forth in the Applicable AT&T Tariffs.
6.G. Monitoring Conditions. The Customer must satisfy the following Service
Requirements which will be monitored on each anniversary of the CISD. The
Monitoring Period is the 12 months immediately preceding each anniversary
of the CISD.
6.G.1. At least 65% of the AT&T SDN Domestic Direct Dialed annual minutes
of use must be interstate usage.
6.G.2. Customer must have an Average Length of Call (ALOC) of at least 2.5
minutes for AT&T SDN Outbound Domestic calls.
If the Customer, during any Monitoring Period, has failed to satisfy
any of the above Monitoring Conditions, AT&T will notify the Customer in
writing of the specific failure(s) and the Customer will be billed and
shall pay within 30 days an amount equal to 20% of all previously applied
discounts received by the Customer to which each unfulfilled Monitoring
Condition is applicable during the Monitoring Period.
6.H. Discontinuance - In lieu of any Discontinuance With or Without Liability
provisions that are specified in the AT&T Tariff F.C.C. Nos. 1, 2, 9, 11
and 14, the following provisions shall apply.
-22-
CONFIDENTIAL AND PROPRIETARY
______________ between
______________
Customer Initials AT&T and Long Distance Direct, Inc. AT&T
AT&T and Long Distance Direct, Inc.
Initials
23
[Logo] AT&T
================================================================================
6.H.1 The Customer may discontinue this Agreement without incurring a
Termination Charge prior to the end of the Agreement Term, provided the
Customer 1) is current in payments to AT&T i.e. all bills paid by due date,
and 2) replaces this Agreement with another AT&T Carrier Agreement for AT&T
Tariff F.C.C. No. 1, 2, 9, 11 and 14 Services or equivalent services with
revenue commitments equal to or greater than all remaining revenue
commitments under this Agreement and with a term equal or greater than the
remaining term of this Agreement but at least two years.
6.H.2. If the Customer discontinues this Agreement prior to the expiration
of the Agreement Term, or if AT&T terminates this Agreement or the service
provided pursuant to this Agreement due to Customer's breach of this
Agreement, prior to the expiration of the Agreement Term, the Customer will
be billed for and shall pay within 30 days a Termination Charge. The
Termination Charge for the AT&T Services provided under this Agreement will
be an amount equal to 100% of the unsatisfied MARC for the year in which
the Customer discontinues and 100% of the MARC for each year remaining in
the Service Term.
24
RELEASE AND
-----------
SETTLEMENT AGREEMENT
--------------------
This Release and Settlement Agreement ("Agreement") is entered into
between AT&T Corp. ("AT&T") and Long Distance Direct, Inc. ("LDDI" or
"Customer").
Recitals
WHEREAS, Customer currently subscribes to AT&T long distance service
under Contract Tariff 2507 ("CT 2507"), which comprises Distributed Network
Service ("DNS") and Software Defined Network ("SDN") service under DNS account
number MB1036; and SDN account numbers 205460 (the "Former Service"); and
WHEREAS a dispute has arisen concerning Customer's payment of
certain usage charges, which have already been billed to
Customer, tariffed- shortfall and termination charges, which are about to be
billed to Customer, and both AT&T and Customer acknowledge that additional usage
charges and tariffed shortfall and termination charges may be billed to Customer
in the future related to calls that have already been made or other events that
have already transpired ("Payment Dispute"); and
WHEREAS a dispute has arisen concerning billing tapes, AT&T's
invoicing of usage, fraud associated with NRA I Authorization Codes, certain
credits identified in CT 2507 and certain credits on the LDDI February 1996
inbound ▇▇▇▇ ("the Billing Disputes"); and
WHEREAS a dispute has arisen concerning Customer's commitment under
CT 2507 ("CT 2507 Dispute"); and
WHEREAS, Customer and AT&T desire to fully and finally settle and
resolve the Payment Dispute, the Billing Disputes and the CT 2507 Dispute and to
thereby avoid the time and expense of litigation;
THEREFORE, in consideration of the mutual promises contained herein,
the parties agree as follows:
1. New Agreement
Customer's subscription to CT 2507 will be discontinued with
liability, according to the terms of CT 2507, in conjunction with Customer's
order for service under a separate Carrier Agreement between AT&T and Customer
(the "New Service").
25
2. Payments and Credits
(a) Payment to AT&T
AT&T and Customer agree that the total balance owed to AT&T for outstanding
charges billed through and including November 1, 1996 equals $ 320,142.83; (b)
Customer agrees to make full payment of this balance to AT&T according to the
payment schedule below and to continue to pay on a timely basis all future bills
for The Services:
PAYMENT SCHEDULE
----------------
Payment Due Date
------- --------
$60,000.00 January 1, 1997
$60,000.00 February l, 1997
$60,000.00 March 1, 1997
$60,000.00 April l, 1997
$60,000.00 May 1, 1997
$20,142.83 June 1, 1997
(i) All payments must be submitted by wire transfer on or before the
Due Date;
(ii) If AT&T fails to receive payment of any required amount by the
Due Date, AT&T may disconnect service upon one day's written notice.
2
AT&T/LDDI Confidential and Proprietary
26
(b) Credit to Customer
(i) AT&T & Customer acknowledge that tariffed termination charges in
the amount of $965,786.71 have already been billed to Customer and tariffed
termination charges in the amount of $1.335,843.86 million shall be billed to
Customer. The total tariffed termination charges due and owing AT&T
(ii) Within thirty (30) days after AT&T receives full payment of all
past due charges from Customer, AT&T shall apply a credit in the amount of
$2,301,630.57 million to Customer's master account to satisfy the billed
shortfall charges. Such credit shall not be applied in the event Customer is in
breach of any provision of this Agreement.
4. Security Agreement
Customer agrees to execute a Security Agreement in the form attached
to this Agreement.
5. Unauthorized Use of AT&T Name and Corporate Logo
Customer agrees to immediately cease use of the AT&T name, logo,
trademark and servicemark in any manner including, but not limited to, use in
any advertising, promotional materials, stationery, business cards, billing,
singage and infomercials.
6. Existing Disputes
AT&T and Customer acknowledge that bona fide billing disputes exist
between the parties in the amount of $ 51,281.15 ("the Existing Disputes").
These disputes shall be investigated and resolved in the usual manner. Full
payment for the Existing Disuptes shall be due on or before fifteen (15) days
after the charges are sustained as correct by AT&T.
7. Arbitration
With respect to the Existing Disputes, Customer or AT&T shall have
the right to commence an arbitration proceeding. The party choosing arbitration
shall submit the dispute(s) to the Center for Public Resources ("CPR"). The
arbitration shall be held in Chicago, Illinois and shall be conducted under the
then-current rules and supervision of the CPR. The Federal Arbitration Act, 9
U.S.C. Sections 1 to 16, will govern the arbitrability of all claims. The
arbitral decision and award shall be binding and judgment on the award may be
entered in any
3
AT&T/LDDI Confidential and Proprietary
27
court of competent jurisdiction. The arbitration will be conducted by a single
arbitrator who is knowledgeable in business information, commercial matters or
the telecommunications field, as applicable, except that either party may
require that the arbitration be conducted by a tribunal of three such
arbitrators by providing Notice of such a demand to the other party before a
single arbitrator is selected. The arbitrator(s) may not limit, expand or
otherwise modify the terms of this agreement and will not have authority to
award damages to either party beyond the limitations of liability provided in
this Agreement.
The arbitrator may not expand the amount sought regarding the
applicable dispute beyond that specified in Section 3. The parties, their
representatives, other participants and the arbitrator shall hold the existence,
content and result of the arbitration in confidence. Each party shall bear its
own costs and expenses if arbitration occurs.
8. Transfer of Obligations
The outstanding Customer obligations, not otherwise extinguished
under this Agreement, which have arisen or which may arise under the Former
Service shall be transferred to the New Service at such time as the New Service
Agreement is effective. Such obligations include all tariffed charges
provided-that there are no shortfall or termination charges associated with CT
2507 at the time of termination of CT 2507.
9. Releases
The following releases are effective as of the initial service date
of the Carrier Agreement for the New Service:
(a) Customer, on behalf of itself and its employees, agents,
shareholders, officers, subsidiaries, predecessors, affiliates, parent
corporations, if any, joint venturers, successors and assigns, heirs, executors,
administrators and trustees ("Customer Releasors"), hereby discharges and
releases AT&T and its past and present employees, agents, shareholders,
officers, subsidiaries, predecessors, affiliates, parent corporations, if any,
joint venturers, successors and assigns, heirs, executors, administrators and
trustees ("AT&T Releasees"), from any and all rights, claims, damages, actions,
judgments, obligations, attorneys' fees, indemnities, subrogations, duties,
demands, controversies or liabilities, at law or in equity, known or unknown,
matured or unmatured, foreseeable or unforeseeable, which Customer Releasors now
have or ever had against AT&T Releasees up to the date of this Agreement
relating to CT 2507 or the resale of AT&T long distance telecommunications
services,
4
AT&T/LDDI Confidential and Proprietary
28
except Customer retains its rights with respect to the Existing Disputes
described in Section 3 of this Agreement.
(b) AT&T, on behalf of itself and its employees, agents,
shareholders, officers, subsidiaries, predecessors, affiliates, parent
corporations, if any, joint venturers, successors and assigns, heirs, executors,
administrators and trustees ("AT&T Releasors"), hereby discharges and releases
Customer and its past and present employees, agents, shareholders, officers,
subsidiaries, predecessors, affiliates, parent corporations, if any, joint
venturers, successors and assigns, heirs, executors, administrators and trustees
("Customer Releasees"), from any and all rights, claims, damages, actions,
judgments, obligations, attorneys' fees, indemnities, subrogations, duties,
demands, controversies or liabilities, at law or in equity, known or unknown,
matured or unmatured, foreseeable or unforeseeable, which AT&T Releasors now
have or ever had against Customer Releasees up to the date of this Agreement
relating to its CT 969 service and Customer's resale of AT&T long distance
telecommunications services, except AT&T retains its rights with respect to the
Existing Disputes described in Section 3 of this Agreement, and with respect to
the payments to be made as provided in Section 2(a) of this Agreement.
10. Entire Agreement
This Agreement (including any exhibits and CT 2507) is the sole,
only, entire and complete agreement of the parties relating in any way to the
subject matter hereof. No statements, promises or representations have been made
by any party to any party, or are relied upon, and no consideration has been or
is offered, promised, expected or held out, other than as stated in this
Agreement. There are no oral or written collateral agreements. All prior
discussions and negotiations regarding the dispute have been, and are, merged
and integrated into, and are superseded by, this Agreement.
11. Breach of Agreement
Except as provided for in Section 7, in the event that either party
is in breach of any material obligation hereunder, the other party, at its
option and without prior Notice to the breaching party, may commence an action
against such breaching party in any court of competent jurisdiction to enforce
the terms and obligations identified in this Agreement.
5
AT&T/LDDI Confidential and Proprietary
29
12. Ownership of Claim
The parties hereto warrant that they have not assigned or
transferred, in any manner, to any person or entity, any right or interest to
which they may be entitled regarding the dispute between the parties. Each party
warrants and represents to the other party that it is the owner and holder of
all rights concerning the claim that is the subject of this Agreement.
13. No Admission of Liability
This Agreement, the contents thereof or its execution shall not be
construed as any admission of liability by either party.
14. Legal Counsel
Each of the parties represents that in the execution of this
Agreement, and the negotiations leading thereto, it had the opportunity to
consult legal counsel of its own selection. Prior to the execution of this
Agreement by each party, the party's attorney reviewed this Agreement, made any
desired changes and advised to the party with respect to making the settlement
and release provided herein and of executing this Agreement.
15. Applicable Law
This Agreement shall be construed in accordance with and be governed
by the internal laws of the State of New York in effect as of the date of
execution, without regard to the principles of conflicts of law thereof.
16. Enforcement of Agreement
Except as provided in Section 7, if any action at law or in equity,
including an action for declaratory or injunctive relief, is brought to enforce
or interpret the provisions of this Agreement, the prevailing party shall be
entitled to all of its ordinary and necessary costs in prosecuting or defending
said action, including reasonable attorneys' fees, which may be set by the court
in which the action for enforcement if brought, or in a separate action for that
purpose, in addition to any other relief to which the prevailing party may be
entitled.
17. Miscellaneous
(a) The delay or failure of a party to exercise any right, power or
privilege hereunder or failure to strictly enforce any breach or default shall
not constitute a waiver with respect thereto and no waiver of any such right,
power,
6
AT&T/LDDI Confidential and Proprietary
30
privilege, breach or default on any one occasion shall constitute a waiver
thereof on any subsequent occasion unless clear and express notice thereof in
writing is provided.
(b) If any provision of this Agreement is held to be invalid or
unenforceable, all other provisions shall nevertheless continue in full force
and effect, except that non-occurrence of the conditions specified in paragraph
2(a) herein shall completely void this Agreement in accordance with the terms
thereof.
18 Confidentiality
The parties agree to use their best efforts to keep both the fact of
and the consideration for this Agreement confidential and agree not to disclose
it to others unless required to do so by legal process issued by a Court or
regulatory agency of competent jurisdiction. If asked about the dispute, each
party shall respond only that the dispute has been resolved to its satisfaction.
Customer may disclose the existence of this Agreement and may describe,
generally, its payment obligations to AT&T under the terms of this Agreement as
necessary to comply with State or Federal rules or regulations.
19. Notices
All notices hereunder shall be in writing and shall be deemed to
have been given pursuant to the following schedule:
Overnight Courier - business day following mail;
Telefax - business day of transmission if sent before 2 p.m.
recipient's time;
Personal Delivery - business day of delivery;
Mail - postage prepaid, third business day following
date of mailing (date of postmark);
Certified Mail - three days following date of postmark
TO: Long Distance Direct, Inc.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7
AT&T/LDDI Confidential and Proprietary
31
TO: AT&T CORP.
Attn: ▇▇▇▇▇▇▇ Oyster
Division Manager
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Room 3229A2
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
20. Amendments
Any amendments, modifications or supplements to this Agreement shall
be valid only if all such amendments, modifications, or supplements are in
writing and are signed by an authorized representative of all parties.
8
AT&T/LDDI Confidential and Proprietary
32
21. Waiver
No waiver of any covenant, condition or limitation herein contained
shall be valid unless the same is made in writing and duly executed by the party
making the waiver. No waiver of any provision of this Agreement shall constitute
a waiver of any other provision, whether or not similar. The failure or neglect
of either party on any occasion to enforce any provision of this Agreement shall
not restrain or limit such party from enforcing such provisions upon any other
occasion or occasions if such party elects to do so, and no written waiver of
any breach of this Agreement shall be deemed to be a continuing waiver of such
breach unless so expressly stated. Any waiver shall be null and void if the
party requesting such waiver has not provided a full and complete disclosure of
all material facts relevant to the waiver requested.
22. Assignment
This Agreement is not assignable by any party.
23. Captions/References
The captions in this Agreement are inserted solely for the purpose
of facilitating easy reference and shall not be construed in any way as part of
this Agreement, or as altering the provisions of this Agreement. References
herein to Articles, Sections, Schedules or Exhibits are, unless otherwise
stated, references to the specified Article, Section, Schedule or Exhibit hereof
or hereto.
24. Multiple Originals
This Agreement is intended to have multiple executed originals. The
parties agree that each executed original is as valid and binding as any other
executed original.
9
AT&T/LDDI Confidential and Proprietary
33
IN WITNESS whereof, the parties have affixed their signatures
effective as of the date first above written.
AT&T Corp. Long Distance Direct, Inc.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------- ------------------------
(Signature) (Signature)
▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------- -----------------------
(Name) (Name)
Spec. Mkts. V.P. Vice-President, CFO
----------------------- -----------------------
(Title) (Title)
2/10/97 February 6, 1997
----------------------- -----------------------
Title Title
10
AT&T/LDDI Confidential and Proprietary
34
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made as of the day of , 1997 by and
between Long Distance Direct, Inc. ("LDDl"), a New York corporation, (the
"Debtor",) and AT&T Corp., a New York corporation (the "Secured Party").
W I T N E S S E T H T H A T:
WHEREAS, the Debtor currently 5ubscnbes to AT&T long distance
service under Contract Tariff 2507 ("CT 2507"), which comprises Distributed
Network Service ("DNS") and Software Defined Network ("SND") Service under DNS
account number MB1036; and SDN account numbers 205460 (the "Former Service"):
and
WHEREAS, the Debtor will order service under a Carrier Agreement
between the Secured Party and the Debtor (the ("New Service"); and
WHEREAS, Debtor has a total outstanding balance owed to AT&T for
charges billed under the Former Services through and including November 1,
1996, equal to $320,142.83;
WHEREAS, Debtor has agreed to make full payment of all amounts due
to AT&T under the Former Services according to the payment schedule in Paragraph
2(a) of the Release & Settlement dated ________________, and to continue to pay
on a timely basis all future bills for the Former Service and the New Service;
and
WHEREAS, to secure the payment of any indebtedness the Debtor now
has or may have to the Secured Party, and in order to induce the Secured Party,
inter alia, to provide the Debtor with the New Service without requiring a cash
deposit;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. The Security Interests.
(a) In order to secure (i) the due and punctual payment of the
Obligations (as herein defined); (ii) the due and punctual payment and
performance of all obligations of the Debtor contained herein; and (iii) the due
and punctual payment and performance of all other indebtedness, guarantees,
liabilities and obligations of the Debtor to the Secured Party or any affiliate
of Secured Party, of every kind and description, whether direct, indirect,
absolute or contingent, whether now or hereafter existing, due or to become due,
whether otherwise secured or unsecured, whether acquired directly or by
assignment, whether acquired outright, conditionally or as collateral security
35
from another, whether joint or several, liquidated or unliquidated, whether
arising by operation of law or otherwise, whether or not of the same or similar
class or of like kind to any indebtedness incurred contemporaneously with the
execution of this Agreement; and any extension, modifications, changes,
substitutions, restatements, renewals or increases or decreases of any or all of
the foregoing; and howsoever evidenced, incurred or arising (all of the
foregoing are hereinafter collectively called the "Obligations"), the Debtor
hereby pledges and assigns to the Secured Party, and grants to the Secured Party
a continuing security interest in and lien on, all of the following described
property, assets and rights (hereinafter collectively called the "Collateral"):
(A) All ACCOUNTS, which term shall mean all items described in
the definition thereof contained in the Uniform Commercial Code as
in effect from time to time in the State of New York (referred to
hereinafter as the "UCC") and all of the following, whether or not
so described (in all cases whether now existing or hereafter
created): all obligations of any kind at any time due or owing to
the Debtor and all rights of Debtor to receive payment or any other
consideration (whether classified under the UCC or the law of any
other state as accounts, accounts receivable, contract rights,
chattel paper, general intangibles, or otherwise) including without
limitation invoices, contract rights, accounts receivable, general
intangibles, chooses-in-action, notes, drafts, acceptances,
instruments and all other debts, obligations and liabilities in
whatever form owing to the Debtor from any person, firm,
corporation, governmental authority or other entity, together with
all security for any thereof, and all of the Debtor's rights to
goods sold (whether delivered, undelivered, in transit or returned),
represented by any of the foregoing, together with all proceeds and
products of any of the foregoing;
(B) All guarantee Security and liens for payment of any
ACCOUNTS and all documents of title, policies or certificates of
insurance, insurance proceeds, proceeds of condemnation or other
seizure, securities, chattel paper, and other documents and
instruments evidencing or pertaining to any items under (A); all
claims of the Debtor against third parties for loss of or damage to,
or otherwise relating to, any of the COLLATERAL; and all files,
correspondence, customer lists, computers, computer programs, tapes,
discs, data bases, and related data processing software, owned by
the Debtor or in which the Debtor has an interest, which contains
information identifying any of the COLLATERAL or identifying any
account debtor or the amount owed by same, or which would otherwise
be necessary or helpful in the realization of any of the COLLATERAL;
-2-
36
(C) All moneys, securities, drafts, notes, items, contract
rights, leases, and all general or special deposits, balances, sums,
proceeds and credits of the Debtor;
(D) All rights and remedies which the Debtor might exercise
with respect to any of the foregoing; and
(E) All accessions and additions to, replacements and
substitutions for, and proceeds and products of, the items described
in the the preceding paragraphs (A) through (D).
(b) The security interests granted pursuant to this Section I (the
"Security Interests") are granted as security only and shall not subject the
Secured Party to, or transfer to the Secured Party, or in any way affect or
modify, any obligation or liability of the Debtor under any of the Collateral or
any transaction which give rise thereto.
Section 2. Filing; Further Assurances.
The Debtor will execute and deliver to Secured Party for filing
and/or recording (in such manner and form as the Secured Party may require), or
permit the Secured Party to file and record, in either case at Debtor's cost and
expense, any financing statements, any carbon, photographic or other
reproduction of a financing statement or of this Security Agreement (which the
parties hereto agree shall be sufficient as a financing statement hereunder),
any specific assignments or other paper that may be reasonably necessary or
desirable, or that the Secured Party may request, in order to create, confirm,
preserve, perfect or validate any Security Interest or to enable the Secured
Party to exercise and enforce its rights hereunder or under applicable law with
respect to any of the Collateral. The Debtor hereby appoints Secured Party as
the Debtor's attorney-in-fact to execute in the name and on behalf of the Debtor
such additional financing statements as the Secured Party may at any time
reasonably request or require in respect Of the Collateral.
Section 3. Representations and Warranties of the Debtor.
The Debtor hereby represents and warrants to the Secured Party that
all information, representations and warranties contained in Exhibit A attached
hereto and made a part hereof are true; accurate and complete on the date
hereof.
Section 4. Covenants of the Debtor.
The Debtor hereby covenants and agrees that so long as any of the
Obligations remain unpaid or unperformed:
(a) The Debtor will defend the Collateral against all claims and
demands of all persons (other than the Secured Party) at any time claiming any
interest therein.
-3-
37
(b) The Debtor will not change its corporate name, identity or
structure, without forty-five (45) days' prior written notice to Secured Party
and the execution, delivery and filing of such documents as reasonably required
by the Secured Party.
(c) The Debtor shall not remove any Collateral from its present
location or transfer any Collateral to any other location.
Section 5. Records Relating to Collateral.
The Debtor will keep its records concerning the Collateral at its
offices located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, or at such
other place or places of business as the Secured Party may approve in advance in
writing. The Debtor will hold and preserve such records and will permit
representatives of the Secured Party at any time, on prior notice, during normal
business hours to examine and inspect the Collateral and to make abstracts from
such records, and will furnish to the Secured Party such information and copies
of records regarding the Collateral in the possession or control of the Debtor
as the Secured Party may from time to time reasonably request.
Section 6. General Authority.
(a) The Debtor hereby irrevocably appoints the Secured Party (and
any employee or agent of Secured Party) the Debtor's true and lawful attorney
and agent in fact, with full power of substitution, in the name of the Debtor,
the Secured Party or otherwise, for the sole use and benefit of the Secured
Party, but at the Debtor's expense, to the extent permitted by law to exercise,
at any time, and from time to time, after any Event of Default has occurred, all
or any of the following powers with respect to all or any of the Collateral
(which power shad be in addition and supplemental to any powers, rights and
remedies of the Secured Party described herein or otherwise available to the
Secured Party under any other document or otherwise under applicable law):
(i) to demand, ▇▇▇ for, collect, receive and give
acquittance for any and all moneys due or to become due upon or by
virtue thereof,
(ii) to demand, ▇▇▇ for, collect, receive, take,
endorse, assign and deliver any and all checks, notes, drafts,
documents and other negotiable and non-negotiable instruments and
chattel paper taken or received by the Secured Party in connection
therewith,
(iii) to settle, compromise, compound, prosecute or
defend any action or proceeding with respect thereto,
-4-
38
(iv) to sell, transfer, assign or otherwise deal in or
with the same or the proceeds or avails thereof, as fully and
effectually as if the Secured Party were the absolute owner thereof,
(v) to extend the time of payment of any or all thereof
and to make any allowance and other adjustments with reference
thereto, and
(vi) to notify account debtors on any accounts to make
payment directly to the Secured Party.
(b) The Debtor covenants and agrees that (i) the powers of attorney
granted by this Agreement are coupled with an interest and shall be irrevocable
until full and final payment and performance of all the Obligations, (ii) said
powers are granted solely for the protection of the Secured Party's interest and
the Secured Party shall have no duty to exercise any of such powers, (iii) the
decision whether to exercise any such powers and the manner of exercise shall be
solely within the Secured Party's discretion, and (iv) neither Secured Party nor
any of its directors, officers, employees or agents shall be liable for any act
of omission or commission, or for any mistake or error judgement, in
connection with any such powers, absent gross negligence or willful misconduct.
Section 7. Events of Default.
The Debtor shall be in default under this Security Agreement upon
the occurrence of any one or more of the following events (each such event is
herein referred to as an "Event of Default"):
(a) default by the Debtor in the observance or performance of any
covenant or agreement herein contained: or
(b) any representation or warranty herein contained shall have been
untrue or misleading in any material respect at the time it was made; or
(c) the occurrence of any "Event of Default" or of any agreement now
or hereafter evidencing or securing any of the Obligations.
Section 8. Remedies Upon Event of Default.
(a) If any Event of Default shall have occurred, the Secured Party
may exercise all the rights and remedies of a secured party under the Uniform
Commercial Code of New York (whether or not the Uniform Commercial Code is in
effect in the jurisdiction where such rights and remedies are exercised) and, in
addition, the Secured Party may, without being required to give any notice,
except as herein provided or as may be required by mandatory provisions of law.
The Secured Party may require the Debtor to assemble all or any part of the
Collateral and make it available to the Secured party at a place to be
designated by the Secured Party which is reasonably convenient.
-5-
39
(b) No remedy referred to in this Agreement is intended to be
exclusive, and all rights and remedies contained herein shall be separate and
cumulative and in addition to all other rights and remedies available to a
secured party under other documents evidencing or securing any of the
Obligations or otherwise applicable law, and the exercise of one shall not in
any way limit or prejudice the exercise of any other such rights or remedies;
and the Secured Party may exercise its remedies concurrently, independently or
successively, without in any way affecting any other remedy.
Section 9. Application of Collateral and Proceeds.
The proceeds of any sale of, or other realization upon, all or any
part of the Collateral shall be applied in the following order of priorities:
(a) first, to pay the expenses of such sale or other realization,
including reasonable commission to any agents or brokers, and all expenses,
liabilities and advances incurred or made by the Secured Party in connection
therewith, and any other unreimbursed expenses for which the Secured Party is to
be reimbursed pursuant to Section 10;
(b) second, to the payment of the Obligations in such order and
manner as the Secured Party, in its sole discretion, shall determine; and
(c) finally, unless applicable law otherwise provides, to pay to the
Debtor, or its successors or assigns, or as a court of competent jurisdiction
may direct, any surplus then remaining from such proceeds.
Section 10. Expenses; Second Party's Lien.
The Debtor will forthwith upon demand pay to the Secured Party:
(i) the amount of any and all reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of its counsel and of
any agents not regularly in its employ, and all other expenses of Secured Party
(including, without limitation, court costs, and the allocated costs of Secured
Party's in-house counsel), which the Secured Party may incur in connection with
(a) the preparation and administration of this Security Agreement, (b) the
collection or other disposition of any of the Collateral, (c) the exercise by
the Secured Party of any of the powers, rights or remedies conferred upon it
hereunder, or (d) any default on the Debtor's part hereunder.
Section 11. Notices.
All notices, requests, demands and other communications provided for
hereunder shall be in writing (including telegraphic communication) and mailed
certified, return receipt requested, or telegraphed or delivered to the
applicable party at the addresses indicated below:
-6-
40
(i) If to the Debtor, to it at:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
[_________________________]
[_________________________]
[_________________________]
[_________________________]
(ii) If to the Secured Party, to it at:
AT&T Corp.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ Oyster
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
AT&T Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇
Basking Ridge. NJ 07920
or, as to each party, at such other address as shall be
designated by such parties in a written notice to the other party complying as
to delivery with the terms of this Section. All such notices, requests, demands
and other communications shall be deemed given upon the earlier to occur of (a)
the third day following deposit thereof in the United States mail or deposit
thereof with the telegraph company as aforesaid, or (b) receipt by the party to
whom such notice is directed.
Section 12. Waivers; Non-Exclusive Remedies.
No failure on the part of the Secured Party to exercise, and no
delay in exercising, and no course of dealing with respect to, any right, power
or remedy under this Security Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise by the Secured Party of any right, power or
remedy under this Security Agreement exhaust the same or preclude any other
right,
-7-
41
power or remedy. The remedies in This Security Agreement are cumulative and are
not exclusive of any other remedies provided by law or otherwise available to
the Secured Party. The Debtor, to the extent it may lawfully do so, hereby
consents to the jurisdiction of the courts of the State of New York and the
United States District Court for the District of New York for the purpose of any
suit or proceeding brought in connection with or respect to this Security
Agreement.
Section 13. Consent and Waiver.
(A) THE DEBTOR HEREBY WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON
OR WITH RESPECT TO THIS SECURITY AGREEMENT. NEITHER THE DEBTOR NOR ANY ASSIGNEE
OF OR SUCCESSOR TO THE DEBTOR, SHALL SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION OR PROCEDURE BASED UPON, OR
ARISING OUT OF, THIS SECURITY AGREEMENT OR THE DEALINGS OR THE RELATIONSHIP
BETWEEN OR AMONG THE PARTIES HERETO. NO PARTY WILL SEEK TO CONSOLIDATE ANY
SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS
SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE PROVISIONS
SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR
REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE
FULLY ENFORCED IN ALL INSTANCES.
(B) THE DEBTOR CONSENTS TO THE JURISDICTION AND VENUE OF ANY LOCAL,
STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK AND WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON THE DEBTOR, AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO THE DEBTOR AT THE ADDRESS STATED BELOW AND SERVICE SO
MADE SHALL BE DEEMED TO BE COMPLETED THREE (3) DAYS AFTER THE SAME SHALL HAVE
BEEN POSTED AS AFORESAID. THE DEBTOR WAIVES ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. THE DEBTOR WAIVES, TO THE EXTENT
PERMITTED BY LAW, ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT
FOR THIS WAIVER BE REQUIRED OF THE SECURED PARTY. NOTHING CONTAINED IN THIS
PARAGRAPH SHALL AFFECT THE RIGHT OF THE SECURED PARTY TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE SECURED PARTY TO
BRING ANY ACTION OR PROCEEDING AGAINST THE DEBTOR IN THE COURTS OF ANY
JURISDICTION.
(C) THE DEBTOR HEREBY WAIVES ALL DEFENSES AND RIGHTS TO INTERPOSE
ANY SETOFF OR COUNTERCLAIM OF ANY NATURE EXCEPT ONLY A DEFENSE PERTAINING TO THE
EXISTENCE OF AN EVENT OF DEFAULT OR A COUNTERCLAIM TO THE EXTENT THAT THE
FAILURE TO SO ASSERT SUCH
-8-
42
COUNTERCLAIM WOULD PERMANENTLY PRECLUDE THE PROSECUTION OR RECOVERY UPON THE
SAME.
Section 14. Changes in Writing.
Neither this Security Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by a statement in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
Section 15. Choice of Law; Meaning of Terms.
This Security Agreement shall be construed in accordance with and
governed by the internal laws (as opposed to conflict of law provisions) and
decisions of the State of New York applicable to contracts made and performed in
said State, except to the extent that remedies provided by the laws of any State
other than New York are governed by the laws of said State. Unless otherwise
defined herein, or unless the context otherwise requires, all terms used herein
which are defined in the New York Uniform Commercial Code have the meanings
therein stated.
Section 16. Marshalling; Payments Set Aside.
The Secured Party shall be under no obligation to ▇▇▇▇▇▇▇▇ any
assets in favor of the Debtor or any other party or against or in payment of any
or all of the Obligations. To the extent that the Debtor makes a payment or
payments to the Secured Party or the Secured Party enforces its security
interests or exercises its rights of setoff, and such payment or payments or the
proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
Section 17. Severability.
Any provision of this Security Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 18. Headings.
The headings in this Security Agreement are for the purposes of
reference only and shall not limit or otherwise affect the meaning, construction
or effect of this Agreement or any other provision of this Agreement.
-9-
43
IN WITNESS WHEREOF, this Security Agreement has been executed by the
parties hereto all as of the day and year first above written.
WITNESS:
LONG DISTANCE DIRECT, INC. By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------- --------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: V-P, CFO
By /s/ ▇.▇. ▇▇▇▇▇▇▇
__________________________ --------------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇
Title: Spec. Mkts. V.P.
-10-
44
EXHIBIT A
Additional Representations and Warranties
1. The exact title of the Debtor is: Long Distance Direct, inc. The
Debtor has not need any other corporate name within the previous ten (10) years.
2. The Debtor uses in its business and owns the following trade
names: LDDI
3. The Debtor maintains its books and records relative to its
accounts and its inventory at:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
4. No tangible property constituting any of the Collateral is or
will be, or has been in the six months preceding the date of this Agreement,
located in or at any premises other than those identified in items 5 and 6
below.
5. The chief executive office of the Debtor is:
One ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
6. In addition to the location described in item 3 above, the Debtor
owns or has an interest in personal property located at:
Address Record Owner of Real Estate
------- ---------------------------