Exhibit 10.15:
RESTATED SALES AGREEMENT BETWEEN INTERNATIONAL COMPUTER SYSTEMS, INC. AND THE
REGISTRANT.
PAGES WHERE CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE STAMPED 'CONFIDENTIAL
TREATMENT REQUESTED AND THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE
COMMISSION,' AND THE APPROPRIATE SECTION HAS BEEN MARKED IN THE MARGIN WITH A
STAR (/*/).
RESTATED SALE AGREEMENT BETWEEN
INTERNATIONAL COMPUTER SYSTEMS, INC.
AND
IDT CORPORATION
This Sale Agreement (the "Agreement") is entered into as of the 29th day of
July, 1996 by and between INTERNATIONAL COMPUTER SYSTEMS, INC., a Louisiana
corporation (hereinafter referred to as "Seller"), represented herein by ▇▇▇▇▇▇
▇. ▇▇▇▇, who has been duly authorized by the Board of Directors of Seller, and
IDT CORPORATION, a Delaware corporation (hereinafter referred to as
"Purchaser"), represented herein by ▇▇▇▇▇▇ ▇▇▇▇▇▇, who has been duly authorized
by the Board of Directors of Buyer
WITNESSETH
WHEREAS, the parties hereto entered into an Agreement styled Sale Agreement,
dated July 29, 1996, and desire to restate in its entirety that Agreement; and
WHEREAS, Seller is an Internet service provider doing business under the
trade name of "Linknet" and provides Internet access to customers, including
management of the Internet for its customers and customer support for all
customers of Linknet, throughout the State of Louisiana; and
WHEREAS, Purchaser is an Internet service provider throughout the United
States providing Internet services to its customers, management of the network
and customer support for the customers on its network; and
WHEREAS, Purchaser desires to purchase and seller desires to sell all of
Seller's equipment and other assets comprising the Linknet network; which
equipment is more fully described on Exhibit A attached hereto and incorporated
herein by reference (the "Equipment")
1
and
NOW THEREFORE, it is mutually agreed as follows:
1.
SALE OF ASSETS
For and in consideration of the Purchase Price, defined below, Seller does
hereby grant, bargain, sell, convey, assign, set over and deliver unto Purchaser
who does hereby accept and purchase for itself, its successors and assigns, and
does hereby acknowledge delivery and possession thereof, all of Seller's
interests in the Equipment and other assets of the seller referenced in Exhibit
A, and all interests, rights and privileges of ownership of the Equipment, to
have and to hold unto said Purchaser, its successors and assigns forever.
2.
CONSIDERATION
As used herein, the term "Purchase Price" shall mean [ ]/*/ Purchaser
shall pay the Purchase Price to Seller follows: [ ]/*/ has already been
paid, with respect to which Seller acknowledges receipt; [ ]/*/ is hereby
paid in cash with respect to which Seller hereby acknowledges receipt, the
balance, to wit [ ]/*/ shall be paid in [ ]/*/ payments due on the
first date of each month commencing October 1, 1996. The [ ]/*/ balance
of the Purchase Price shall bear interest at the rate of [ ]/*/ per annum,
commencing August 1, 1996. The first 6 payments shall be [ ]/*/ in
the following amounts: October 1, 1996 - [ ]/*/; November 1, 1996 -
[ ]/*/; December 1, 1996 - [ ]/*/; January 1, 1997 - [ ]/*/;
February 1, 1997 - [ ]/*/; March 1, 1997 - [ ]/*/. The next
[ ]/*/ payments shall be of interest and principal, each in the amount of
[ ]/*/. The final payment, due on September 1, 2000, shall be in an
amount equal to the sum of all accrued and
2
CONFIDENTIAL TREATMENT REQUESTED AND THE REDACTED MATERIAL
HAS BEEN SEPARATELY FILED WITH THE COMMISSION
unpaid interest due under this note, all principal due under this note and all
other amounts due under this note. All payments due under the Note shall be made
to Hibernia National Bank in satisfaction of Seller's indebtedness to such bank
until fully repaid and until any security interest Hibernia National Bank may
have in the Equipment is satisfied. ICS directs that the [ ]/*/ be paid
as follows: (i) [ ]/*/ to Bank One Equity Investors, Inc. ("Bank One")
for the purchase by ICS of Bank One's preferred stock in ICS [
]/*/ and (iii) [ ]/*/ to ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, APLC, as Escrow
Agent, pursuant to the terms of the Escrow Agreement attached hereto as Exhibit
D, and will pay all of the liabilities listed as an attachment to Exhibit D. ICS
will have no other remaining material liabilities except as set forth as Exhibit
E. Except as set forth in Exhibit F, ICS has incurred no other liabilities since
July 29, 1996 which IDT shall assume pursuant to this agreement.
3.
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Seller makes the following representations, warranties and covenants:
i) The Equipment is in good condition and in proper working order, and
is fit for the intended use by Purchaser, to wit: Internet access and service
for its customers, management of the network by Purchaser and customer support
by Purchaser and other uses normally made of such Equipment by a company in the
business of the Seller.
3
CONFIDENTIAL TREATMENT REQUESTED AND THE REDACTED MATERIAL
HAS BEEN SEPARATELY FILED WITH THE COMMISSION
ii) Other than as set forth on Exhibit B, the Seller has good, clear and
absolute record and marketable title to all of the Equipment sold free and
clear of any and all liens, pledges, encumbrances, charges, rights of first
refusal; transfer restrictions, options, or any similar claim or right,
legal or equitable, or any other such restriction which could interfere with
the possession, use and enjoyment of anything sold pursuant to this
Agreement, and interests of any other person or entity, including without
limitation, tax liens, mortgages, security interests and interests of co-
owners, and that Seller has the ability to transfer good title free of
interests of any person or entity.
iii) The Seller has paid all applicable federal, state, local and other
taxes as of the date of the closing of this transaction and that no taxes are
due and payable as of the date of the closing of this transaction, and that the
Seller has properly filed all required Federal, State or local tax returns. The
property tax on the Equipment due after the date hereof shall be paid by
Purchaser.
iv) The Seller is not involved in any controversy, including without
limitation, lawsuits and settlement negotiations, wherein the Seller's
ownership, right of use, or right of sale of the Equipment and other assets sold
in this transaction are in any doubt whatsoever.
v) The Seller has fully disclosed to the Purchaser the scope of any and
all manufacturers' warranties on the Equipment, which are hereby assigned to
the Purchaser.
vi) The Seller has taken no action to cause the manufacturer warranties
on the equipment to be questioned or eliminated, including without limitation
repairs in a manner other than that authorized by the warranty, and has taken
all actions necessary to cause all
4
warranties on the Equipment to remain in full force and effect.
vii) The Seller may sell the Equipment and other assets sold in this
transaction without conflicting with, constituting a default under, or breaching
any provision of any agreement, contract, whether oral or written, commitment,
binding arrangement, deed, lease or other instrument to which Seller is a party.
viii) The Seller may sell the Equipment and other assets sold in this
transaction consistent with all applicable Federal, State and local law,
including without limitation, statutes, regulations and court orders.
ix) Other than as set forth on Exhibit B, the Equipment sold in this
transaction are not subject as of the date of the signing of this agreement
nor will they become subject to any material liabilities except those
voluntarily incurred by the Purchaser after the completion of transfer of
title, nor will Purchaser's entering into this agreement give rise to any
liabilities on the part of the Purchaser other than those expressly accepted
by Purchaser under this agreement.
x) Seller is a corporation duly incorporated and in good standing under
the laws of Louisiana and has all requisite power, capacity and authority to
enter into this Agreement. Attached hereto as exhibit C is a copy of a duly
adopted Board resolution authorizing Seller's entering into this Agreement and
acknowledging that this Agreement is a binding and enforceable obligation of
Seller. Seller has full right and authority to enter into this Agreement without
any other governmental or private consent or approval.
xi) Other than as set forth on Exhibit B, neither Purchaser nor the
Equipment are subject, nor will become subject, to any material liabilities
other than those expressly
5
disclosed herein. This provision applies to liabilities accruing before or
after closing which relate to the period prior to closing.
xiii) No representations or warranties of Seller made in any document,
certificate, exhibit or omit to state a material fact necessary to make any
statement of fact contained herein or therein not misleading. All documents and
other papers delivered in connection hereto are true, complete and authentic.
The foregoing representations, warranties and covenants shall survive
the closing of the transaction hereunder.
Notwithstanding any other provision of this agreement, or any provision of
any other agreement or contract between Purchaser and Seller, the Purchaser
shall have the right to deduct from payments due to the seller under the
promissory note any damages caused by a breach of the above representations,
covenants or warranties, or any other provision of this agreement, and any
representations covenants or warranties provided by applicable state or federal
law; including without limitation UCC Article 2. The Purchaser shall have the
right to withhold sufficient payments to satisify any and all damages suffered
by it including without limitation costs of repair, costs of unpaid taxes, costs
to clear encumbrances, lost profits and attorneys fees, until such time and in
such amount that purchaser's damages have been fully redressed by withheld
funds.
The above right of deduction shall be without prejudice to the right of the
Purchaser to pursue any other remedies, including without limitation, a lawsuit
for breach of contract.
4.
ADDITIONAL UNDERTAKINGS
6
Seller agrees (i) that Purchaser shall be and hereby is subrogated to all
claims and rights of Seller under any insurance coverage maintained by Seller
against casualty or other damage to any properties or assets of Seller sold to
Purchaser, even if the loss with respect to such properties or assets arises
after the date of this Agreement; (ii) to remit promptly to Purchaser any
insurance proceeds which it may receive on account of any such claim or right;
and (iii) to cooperate with Purchaser in obtaining payment with respect to any
such claim or right.
5.
ASSIGNMENT OF LINES
Effective as of July 29, 1996, Purchaser shall assume all financial
responsibility for all dial up access telephone lines (▇▇▇▇ South) and all
Internet access lines (MCI) used by customers of Seller/Purchaser to access the
Internet. Seller hereby represents that all of its access and telephone lines
are fully assignable without limitation, and hereby assigns and agrees to do all
other acts necessary to assign all access telephone lines.
Seller also warrants that the leases of all premises where such lines are
installed are assignable and will be assigned to Purchaser as of the closing of
this agreement.
6.
COVENANT NOT TO COMPETE
Seller covenants that for three years following the closing date, neither
it nor any of its officers, agents or employees will solicit any of Purchaser's
current or former customers, clients or employees as of the date of this
Agreement. Seller further covenants that, except as provided in paragraph l of
the Royalty Agreement, for three years following the closing of this agreement
7
it will not attempt to solicit potential Internet service customers in the
state of Louisiana. Seller's undersigned officers and directors personally
accept the obligation imposed by this paragraph as evidenced by their signatures
at the end of this Agreement. Any breach of this paragraph by Seller or any of
its officers or directors, whether material or not, shall be considered a breach
of all agreements between the parties.
7.
INDEMNIFICATION
Without limiting its obligations and liabilities to Purchaser under this
agreement and applicable laws, Seller and the undersigned officers and directors
of Seller agree to jointly and severally indemnify Purchaser against and to hold
Purchaser harmless from any and all losses, liabilities, damages, demands,
claims, assertions, actions and suits, whether groundless or otherwise, and all
costs and expenses, including reasonable attorneys fees, from or in connection
with:
(a) Any claim made against Purchaser in respect of liabilities of
Seller not
(b) Any breach of representations, covenant or warranty or incorrect
or this or other agreements between Seller and Purchaser.
8.
GOVERNING LAW
This Agreement shall be governed by the laws of the State of Louisiana. Any
dispute arising out of this agreement shall be resolved by binding arbitration
before the American Arbitration Association, to be held in New York City.
8
9.
MISCELLANEOUS
This Agreement may be executed in any number of counterparts, each of which
shall be an original and all of which shall together constitute one agreement.
If any covenant, warranty or representation made by the Seller in this
Agreement is not correct, the Seller will be deemed to have defaulted under this
Agreement, granting to the Purchaser all the rights and remedies provided
herein.
To the extent that this Agreement conflicts with any agreement entered into
prior to the signing of this Agreement, this Agreement shall control with
respect to matters covered herein.
Purchaser shall not be obligated to assume or become liable for any
liabilities, obligations, debts, contracts, or commitments of Seller, including
any future liability relating to the period prior to closing, of any kind
whatsoever, including, without limitation, liabilities of Seller under express
or implied warranties for the replacement, repair or reworking of products or
services sold by Seller, except as otherwise provided for in this Agreement.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
Each of the parties hereto shall pay its own expenses incident to the
preparation and carrying out of this Agreement and the transactions contemplated
hereby. No provision of this Agreement shall be construed against or interpreted
to the disadvantage of any party by reason of such party having or being deemed
to have drafted such provision.
9
IN WITNESS WHEREOF, Seller and Purchaser have executed this Agreement on
October 14, 1996 effective as of the day and year first written above.
WITNESSES: INTERNATIONAL COMPUTER SYSTEMS, INC.
BY:
-------------------------- -----------------------------------
--------------------------
IDT CORPORATION
BY:
-------------------------- -----------------------------------
--------------------------
APPROVED AND ACCEPTED BY:
/s/ ▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇
/s/
-----------------------------------
[Linknet Officer]
/s/
-----------------------------------
[Linknet Officer]
/s/
-----------------------------------
[Linknet Officer]
10
ADDENDUM TO SALE AND ROYALTY AGREEMENTS BETWEEN
ICS AND IDT, DATED AS OF 7/31/96
ICS hereby acknowledges that it is liable to hold IDT harmless and
to indemnify IDT with respect to any and all of ICS' indebtedness to Hibernia
National Bank, which indebtedness encumbers the Equipment purchased by IDT.
Accordingly, ICS agrees that IDT may pay directly to Hibernia revenues otherwise
payable to ICS pursuant to the Royalty Agreement in sufficient amounts so that
by the termination date of the Royalty Agreement, the scheduled payments due
under the Note by IDT to ICS dated October 14, 1996, will be sufficient to
satisfy all remaining scheduled payments due at that time to Hibernia.
Notwithstanding the law applicable to the other agreements among the
parties, this Addendum shall be governed pursuant to the laws of the State of
New York.
Dated: October 14, 1996
Accepted:
International Computer Systems, Inc.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
11
Exhibit A to Sale Agreement
Current Network Equipment Cost
Description Type Units Retail Deprec Selling
--------------------------------------------------------------------------------
Alpha 2100 System 1 [
Alpha 1000 System 1
Alpha 1000 System 1
Alpha 200/166 System 1
Alpha 150 System 1
DEC Dual P120 System 1
Alpha 266 System 2
Pentium 100 System 1
Pentium 100 System 1
DEC P75 System 5
DEC 486/66 System 2
DEC P133 System 2
DEC P100 System 1
SUBTOTAL
Cisco 2501 Router 3
Cisco 4000M Router 2
Cisco ▇▇▇▇▇ ▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2
Vanguard ▇▇▇ ▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 1
Cisco FDDI Router 5
Cisco Cables Router 9
SUBTOTAL
Micom 10K CSU 5
Micom 5K CSU 7
Micom 10K CSU 1
TSU 600 CSU 2
TSU 100 CSU 5
Motorola CSU CSU 8
Datacom 56K CSU 1
Motorola FDP CSU 13
SUBTOTAL
Pipeline 400 ISDN 6
NT1 ACE ISDN 29
Pipeline 50 ISDN 1
Pipeline 25 ISDN 1
Bitsurfer Pro ISDN 2
Bitsurfer Central ISDN 2
Xircom ISDN ISDN 1
SUBTOTAL
925 Modem Modem 495
925 LIU Modem 15
925 SMC Modem 20
925 Power Sup Modem 15
Multitech 2834M Modem 11 ]/*/
Page 1
Confidential Treatment Requested and the Redacted Material
has been separately filed with the Commission
Current Network Equipment Cost
Description Type Units Retail Deprec Selling
--------------------------------------------------------------------------------
SUBTOTAL
925 Shiva Term Serv 52 [
900 GM Term Serv 9
Digiboard EISA Term Serv 1
Liv Portmaster Term Serv 2
Liv Portmaster2E Term Serv 1
SUBTOTAL
DEC 900MX Networking 8
DEC 900MS Networking 9
DEC 900EF Networking 1
DEC 900TX Networking 1
DEC 900TM Networking 1
DEC 90T Networking 12
DEChub PS Networking 23
DEChub 1 Networking 3
Asante Hub Networking 1
Asante Hub Networking 1
DEC FDDI Networking 2
DEC FDDI Mods Networking 9
SUBTOTAL
VT420 TERM Misc. 2
Toshiba NB Misc. 2
APC 900 Misc. 9
APC 1400 Misc. 11
APC 2000 Misc. 2
DecLaser 1152 Misc. 1
Tool Kits Misc. 2
Blue Racks Misc. 8
Black Racks Misc. 9
Grey Racks Misc. 1
Patch Panels Misc. 7
SUBTOTAL
Net Comm Srv Software 1
Dec Mailwrk Software 1
Net Comm Srv Software 2
Net Comm Srv Software 1
OSF Unlim Software 3
OSF Docs Software 3
OSF Libs Software 3
SNMP Manag Software 1
PM2 Src Software 1
QR Bbinet Software 1
SysDraw Software 2
Post Office Software 1 ]/*/
Page 2
Confidential Treatment Requested and the Redacted Material
has been separately filed with the Commission
Current Network Equipment Cost
Description Type Units Retail Deprec Selling
--------------------------------------------------------------------------------
SUBTOTAL
Salaries/Labor Labor 1 [
Salaries/Prog Labor 1
Salaries/Train Labor 1
SUBTOTAL
DEC AlphaSrv Consulting 1
DEC Remote Mg Consulting 1
DEC Kerberos Consulting 1
DEC Tech Supp Consulting 1
DEC Tech Supp Consulting 1
Oth Tech Supp Consulting 1
Oth Tech Supp Consulting 1
Oth Tech Supp Consulting 1
Oth Tech Supp Consulting 1
Oth Tech Supp Consulting 1
SUBTOTAL
Phone Install Install 1
Cable Install Install 1
T1 Install Install 1
Oth Install Install 1
▇▇▇▇ Backbone Install 1
▇▇▇▇ Backbone Install 1
▇▇▇▇ Phone Liines Install 1
MCI Install Install 1
SUBTOTAL
Cisco Smartnet Warranty 7
DEC Uplift Warranty 1
DEC Uplift Warranty 1 ]/*/
SUBTOTAL
GRAND TOTAL
Page 3
Confidential Treatment Requested and the Redacted Material
has been separately filed with the Commission
Exhibit E to Sale Agreement
Liabilities After Close
All creditors in the amount set forth on the attached
11 page listing of creditors entitled "ICS, INC. d/b/a
Linknet Internet Services - Aged Open Income Summary"
with exception to those creditors being paid pursuant
to the Escrow Agreement and listed on Schedule 2
to the Escrow Agreement. $374,097.26
Security National Bank $499,000.00
Hibernia National Bank $825,000.00
Amounts Due Stockholders $492,973.63
Total $2,191,070.89
Page 1
RESTATED CONSULTANT AND CUSTOMER SUPPORT AGREEMENT BETWEEN
INTERNATIONAL COMPUTER SYSTEMS, INC.
AND
IDT CORPORATION
This Consultant and Customer Support Agreement (the "Agreement") is entered
into as of the 29th day of July, 1996 by and between INTERNATIONAL COMPUTER
SYSTEMS, INC., a Louisiana corporation (hereinafter referred to as "ICS"),
represented herein by ▇▇▇▇▇▇ ▇. ▇▇▇▇, who has been duly authorized by the Board
of Directors of ICS, and IDT CORPORATION, a Delaware corporation (hereinafter
referred to as "IDT"), represented herein by ▇▇▇▇▇▇ ▇▇▇▇▇▇, who has been duly
authorized by its Board of Directors.
WITNESSETH
WHEREAS, the parties hereto entered into an Agreement styled Consultant and
Customer Support Agreement, dated July 29, 1996, and desire to restate in its
entirety that Agreement; and
WHEREAS, ICS is an Internet service provider doing business under the trade
nane of "Linknet" and provides for Internet access to customers, including
management of the Internet and customer support for all customers of Linknet,
throughout the State of Louisiana; and
WHEREAS, IDT is an Internet service provider throughout tne United States
providing Internet services to its customers, management of the network and
customer support for the customers on its network; and
WHEREAS, IDT has purchased or is in the process of purchasing the equipment
and other assets comprising the Linknet network; and
1
WHEREAS, IDT desires to expand its Internet services by contracting with ICS
for it to provide consulting services; and
WHEREAS, ICS has the expertise required to implement and operate the
consulting and customer support needs of IDT.
NOW THEREFORE, it is mutually agreed as follows:
1.
PROVISION OF SERVICES
ICS shall provide to IDT and/or its network customers the Consulting
Services, described below, and the Customer Support Services, described below.
2.
TERM AND TERMINATION
SECTION 2.1 TERM. ICS shall provide the Consulting Services for an initial
term commencing August 15, 1996, and terminating July 31, 2000. ICS shall
provide the Customer Support Services for an initial term commencing July 1,
1996, and terminating July 31, 2000. This Agreement shall be automatically
renewed for successive two (2) year additional term(s), absent written notice,
from either party, provided at least ninety (90) days prior to the commencement
of such additional term(s).
SECTION 2.2 TERMINATION FOR CAUSE. This Agreement may be terminated by
either party for cause in the event of a breach by the other party (the
"Breaching Party") of any material term or condition hereof and the failure of
the Breaching Party to cure such breach within thirty (30) days following the
receipt of notice of such breach.
2
3.
CONSIDERATION
SECTION 3.1 CONSULTING SERVICES FEE. As consideration for the Consulting
Services to be provided by ICS in accordance with the terms of this Agreement,
IDT shall pay to ICS a Base Consulting Services Fee and a Supplemental
Consulting Services Fee. The Base Consulting Services Fee shall be
[ ]/*/ Dollars per month. The Supplemental Consulting
Services Fee shall be an amount equal to the product of [
]/*/ ("Supplemental Unit Rate") times each Supplemental
Unit, defined below. As used herein, a "Supplemental Unit" shall mean groups of
ten points of presence ("POPs") in excess of 21 POPs. For example, if there are
18 POPs, then the number of Supplemental Units is 0; if there are 21 POPs, then
the number of Supplemental Units is 0; if there are 22 POPs, then the number of
Supplemental Units is 1; if there are 27 POPs, then the number of Supplemental
Units is 1; and if there are 37 POPs, then the number of Supplemental Units is
2. The Base Consulting Services Fee and the Supplemental Consulting Services Fee
(collectively the "Total Consulting Services Fee") shall be paid monthly, and
such payment shall be due and payable on or before the first day of the month
during which services are to be rendered. The Base Consulting Services Fee for
the first month in which consulting services are rendered shall be prorated to
reflect that the Consulting Services will be provided only for a given portion
of the month, i.e., for the first month in which consulting services are
provided, the Base Consulang Services Fee will be [
]/*/
3
CONFIDENTIAL TREATMENT REQUESTED AND THE REDACTED MATERIAL
HAS BEEN SEPARATELY FILED WITH THE COMMISSION
SECTION 3.2 REIMBURSEMENT. IDT shall reimburse ICS for reasonable travel
expenses incurred by ICS in connection with performing the Consulting Services.
Such travel expenses shall include, but shall not be limited to, air fare,
ground transportation, lodging, meals, etc. ICS shall prepare and forward to IDT
a detailed invoice with supporting documentation describing ICS's travel
expenses of approved travel by IDT. IDT shall pay such travel expense
reimbursement invoices within 30 days receipt thereof.
SECTION 3.3. [DELETED]
SECTION 3.4. [DELETED]
SECTION 3.5. ANNUAL FEE ADJUSTMENT. Effective August 1 of each year during
the term of this Agreement (other than August 1, 1996), the Base Consulting Fee
and the Supplemental Unit Rate shall be increased by five percent (5%) over the
Base Consulting Fee and the Supplemental Unit Rate then in effect, respectively.
SECTION 3.6. [DELETED]
SECTION 3.7. EFFECT OF TERMINATION. Payments due to ICS for expenses
incurred or services rendered by ICS prior to the effective date of the
termination of this Agreement shall be paid by IDT to the extent earned,
notwithstanding the termination of this Agreement.
4.
DESCRIPTION OF SERVICES TO BE PROVIDED BY ICS
SECTION 4.1. CONSULTING SERVICES. As used herein, the term "Consulting
Services" shall mean (i) router management, (ii) modem management and asset
management (iii) usage reporting, (iv) bandwith reporting, (v) server
management, (vi) overall network consulting, (vii) telephony consulting and
provisioning, (viii) network maintenance and monitoring with a response to
faults or problems
4
within one hour from occurrence, (ix) programming staff to include (a) two
programmers at 20 hours per week for network programming, (b) two programmers at
20 hours per week for IDT projects, in the event IDT is dissatisfied with or
chooses for any reason to discontinue use of the programming services set forth
in this subsection, IDT reserves the right, excercisable on or before January
15, 1997, to do so and decrease the base consulting fee as well as the
supplemental unit rate by [ ]/*/ per month, and (x) network set up
(in-house set up by ICS) of new POPs. In the event the network is for any
reason, within the control of ICS, not functioning during the term of this
Agreement, ICS agrees that IDT may deduct [ ]/*/ per hour from the fees
otherwise due hereunder.
SECTION 4.2 CUSTOMER SUPPORT SERVICES. As used herein, the term "Customer
Support Services" shall mean telephone support supplied by ICS to IDT customers
relating to Internet access software distributed by IDT.
SECTION 4.3 ADDITIONAL SERVICES. If IDT desires to purchase additional
network services management services for IDT projects, IDT shall pay for hours
in excess of an average of twenty hours a week over a two month period at the
rate of [ ]/*/.
5.
INDEPENDENT CONTRACTOR
It is expressly acknowledged by the parties hereto that ICS is an
independent contractor, and nothing in this Agreement is intended, nor shall be
construed, to create any employer/employee relationship or a joint venture
relationship; provided that the services to be rendered hereunder by ICS shall
be provided in a manner consistent with the standards governing
5
CONFIDENTIAL TREATMENT REQUESTED AND THE REDACTED MATERIAL
HAS BEEN SEPARATELY FILED WITH THE COMMISSION
such services and the provisions of this Agreement. As such, IDT shall have the
final say and dictate all technical strategy and implementation. Notwithstanding
this paragraph, ICS agrees that intellectual property rights, including
copyrights to all source codes, and programs, patents and trademarks are "work
for hire" belonging to IDT. ICS shall not have the right to use or sell software
or components of software created for IDT without the written consent of IDT.
ICS will cause all of its employees or agents that perform services pursuant to
this agreement or in any connection for IDT to execute a non-compete agreement
that precludes such employee from competing with IDT in any of its businesses
during the term of this Agreement or for 12 months following temination or
soliciting IDT's employees during the term of this agreement and for 18 months
following its termination.
6.
NOTICES
Any notice, demand or consent required or permitted hereunder shall be in
writing and shall be delivered in person or mailed to the following:
IF TO ICS: International Computer Systems, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
IF TO IDT: IDT Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
AND
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Easton & Echtman, P.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇ ▇▇▇▇▇
▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
7.
GOVERNING LAW
This Agreement shall be govered by the laws of the State of Louisiana. Any
disputes under this agreement shall be resolved before The American Arbitration
Association in New York City.
8.
ASSIGNMENT
No assignment of this Agreement or the rights or obligations hereunder
shall be valid without the specific written consent of both parties, such
written consent to be mailed as provided in paragraph 6.
9.
ENTIRE AGREEMENT
This Agreement supersedes all previous contracts and constitutes the entire
agreementX betsveen the parties relating to the matters covered by this
Agreement. No oral statements or prlor written materials not specifically
incorporated herein shall be of any force and effect, and no changes in or
additions to this Agreement, shall be recognized unless incorporated herein by
amendment, as provided herein, such amendment(s) to become effective on the date
stipulated in such amendment(s).
10.
HEADINGS
The headings of tEs Agreement are inserted for convenience only and are not
to be
7
considered in the interpretation of this Agreement. They shall not in any way
limit the scope or modify the substance or context of any section of this
Agreement.
11.
WAIVER OF BREACH
The waiver by either party of a breach or violation of any provision of this
Agreement shall not operate as or be construed to be, a waiver of any subsequent
or other breach thereof.
12.
PROVISIONS HELD INVALID
If any one or more of the provisions contained in this Agreement shall be
held to be invalid, illegal or unenforceable, for any reason or in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Agreement shall be construed as if such provision had
never been contained herein.
13.
AMENDMENTS
This Agreement may be amended only by an instrument in writing, signed by
both parties. Such signed instrument shall state the effective date of the
amendment.
14.
MUTUAL COOPERATION
Both the ICS and IDT acknowledge that mutual cooperation and assistance is
essential to either party's performance under this Agreement; therefore, it
will be the duty of both parties to make all good faith efforts to fully
cooperate in the execution of this Agreement.
15.
COUNTERPARTS
8
This Agreement may be executed in any number of counterparts, each of which
shall be an original and all of which shall together constitute one agreement.
16.
RECORDS
IDT and ICS agree to make available for inspection to each other any books,
documents and records of the other party that may be necessary to verify the
nature and amount of any payments due pursuant to this Agreement.
17.
ICS MANAGEMENT AND OPERATIONS
IDT reserves the right to terminate this Agreement in the event that ▇▇.
▇▇▇▇▇▇ ▇▇▇▇ ceases to function as the Chief Technical Officer of ICS.
18.
INTERPRETATION
No provision of this Agreement shall be construed or interpreted against any
party on the basis of such parties being deemed to have drafted such provision.
9
IN WITNESS WHEREOF, ICS and IDT have executed this Agreement effective
as of the day and year first written above.
WITNESSES: INTERNATIONAL COMPUTER SYSTEMS,
INC.
/s/ BY: /s/
------------------------ -------------------------------------
/s/
------------------------
IDT CORPORATION
BY: /s/
------------------------ -------------------------------------
------------------------
10
ROYALTY AGREEMENT BETWEEN
INTERNATIONAL COMPUTER SYSTEMS, INC.
AND
IDT CORPORATION
This Royalty Agreement (the "Agreement") is entered into as of the 29th day
of July, 1996 by and between INTERNATIONAL COMPUTER SYSTEMS, INC., a Louisiana
Corporation, (hereinafter referred to as "ICS"), represented herein by ▇▇▇▇▇▇
▇▇▇▇, who has been duly authorized by the Board of Directors of ICS, and IDT
CORPORATION, a Delaware corporation (hereinafter referred to as "IDT"),
represented herein by ▇▇▇▇▇▇ ▇▇▇▇▇▇, who has been duly authorized by its Board
of Directors.
WITNESSETH
WHEREAS, ICS is an Internet service provider doing business under the trade
name of "LinkNet" and provides for Internet access to customers, including
management of the Internet and customer support for all customers of LinkNet,
throughout the State of Louisiana; and
WHEREAS, IDT is an Internet service provider throughout the United States
providing Internet services to its customers, management of the network and
customer support for the customers on its network; and
WHEREAS, IDT has purchased the equipment comprising the LinkNet network (the
"Equipment Purchase"); and
WHEREAS, coinciding with the Equipment Purchase, IDT has agreed to pay a
royalty to ICS in accordance with this Agreement.
NOW THEREFORE, it is mutually agreed as follows:
1
1.
ROYALTY
A. Payment of Royalty. IDT shall pay to ICS a royalty equal in amount to
-------------------
(i) the [ ]/*/
during the Royalty Period, defined below, plus (ii) the [
]/*/ plus (iii) the [
]/*/ The royalty due with respect to
collections made within any calendar month shall be paid by IDT to ICS on or
before the 10/th/ day of the following calendar month. Collections received by
IDT after the Royalty Period for providing Internet access to Base Customers,
Non Dedicated New Customers, and Dedicated New Customers during the Royalty
Period shall be paid by IDT to ICS as provided in this paragraph 1
notwithstanding that such collections were received after the Royalty Period.
B. Non Dedicated Customers Defined. As used herein, "Non Dedicated
--------------------------------
Customers" shall mean Internet access customers who do not use a dedicated line.
C. Dedicated Customers Defined. As used herein, "Dedicated
----------------------------
Customers" shall mean Internet access customers who use a dedicated line.
D. Base Customers Defined. As used herein, "Base Customers" shall mean ICS'
-----------------------
existing Internet access customers, less Internet access customers who
discontinue their Internet access service with IDT/ICS during the Royalty
Period, plus any new Internet access customers
2
Confidential Treatment Requested and the Redacted Material
has been separately filed with the Commission
in Louisiana that ICS signs up through ICS' efforts during the Royalty Period,
provided however, in no event shall the number of Base Customers exceed
[ ]/*/ the number of Customers existing as of [ ]/*/. Attached
hereto as Exhibit A is a listing by category of the Base Customers.
E. Non Dedicated New Customers Defined. As used herein, "Non Dedicated New
------------------------------------
Customers" shall mean the number of IDT/ICS Non Dedicated Customers in
Louisiana that ICS signs up through ICS' efforts during the Royalty Period in
excess of the number of Non Dedicated Base Customers existing as of July 29,
1996.
F. Dedicated New Customers Defined. As used herein, "Dedicated New
-------------------------------
Customers" shall mean the number of IDT/ICS Dedicated Customers in Louisiana
that ICS signs up through ICS' sole efforts during the Royalty Period in excess
of the number of Dedicated Base Customers existing as of July 29, 1996.
G. Royalty Period Defined. As used herein, "Royalty Period" shall mean the
-----------------------
period commencing July 29, 1996, and terminating on July 31, 1997.
2.
TRANSFER OF CUSTOMERS
ICS agrees to assist IDT in the immediate and orderly transition of customers
from ICS to IDT, which may include development of dedicated connectivity
between ICS and IDT, as well as programming and customization of either or
both accounting systems to transition such customers. ICS agrees to expend all
necessary resources to transition the network systems, accounting systems, and
customers as quickly as possible, with the goal and objective of completing such
transition on or before December 31, 1996. Until such time as the transition is
3
Confidential Treatment Requested and the Redacted Material
has been separately filed with the Commission
completed, ICS shall serve as agent for IDT in collecting amounts due IDT for
providing Internet access to the ICS Base Customers or any other customers of
IDT designated by IDT. ICS may retain from amounts collected by it as agent for
IDT the amount due ICS by IDT as royalties as provided in paragraph l hereof.
3.
ICS INDEMNITY
ICS hereby agrees to protect, defend and indemnify IDT, its officers,
members, agents, managers and employees against, and hold the same harmless from
any and all liability, losses, damages, obligations, judgments, claims, causes
of action and expenses associated therewith (including reasonable attorney
fees), resulting from or arising out of, directly or indirectly, any intentional
act, wanton misconduct or negligent act or omission by ICS or its employees or
agents.
4.
IDT INDEMNITY
IDT hereby agrees to protect, defend and indemnify ICS, its officers,
members, agents, managers and employees against, and hold the same harmless from
any and all liability, losses, damages, obligations, judgments, claims, causes
of action and expenses associated therewith (including reasonable attorney
fees), resulting from or arising out of, directly or indirectly, any intentional
act, wanton misconduct or negligent act or omission by IDT or its employees or
agents.
5.
NOTICES
4
Any notice, demand or consent required or permitted hereunder shall be in
writing and shall be delivered in person or mailed to the following:
IF TO ICS: International Computer Systems, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
IF TO IDT: IDT Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
AND
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Easton & Echtman, P.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
6.
GOVERNING LAW
This Agreement shall be governed by the laws of the State of Louisiana
applicable to contracts executed and to be performed wholly within such state.
Any dispute arising out of this transaction shall be resolved before the
American Arbitration Association in New York City.
7.
ASSIGNMENT
No assignment of this Agreement or the rights or obligations hereunder shall
be valid without the specific written consent of both parties hereto.
8.
ENTIRE AGREEMENT
This Agreement supersedes all previous contracts and constitutes the entire
agreement between the parties relating to the matters covered by this
Agreement. No oral statements or
5
prior written materials not specifically incorporated herein shall be of any
force and effect, and no changes in or additions to this Agreement, shall be
recognized unless incorporated herein by amendment, as provided herein, such
amendment(s) to become effective on the date stipulated in such amendment(s).
9.
HEADINGS
The headings of this Agreement are inserted for convenience only and are not
to be considered in the interpretation of this Agreement. They shall not in any
way limit the scope or modify the substance or context of any section of this
Agreement.
10.
WAIVER OF BREACH
The waiver by either party of a breach or violation of any provision of
this Agreement shall not operate as or be construed to be, a waiver of any
subsequent or other breach thereof.
11.
PROVISIONS HELD INVALID
If any one or more of the provisions contained in this Agreement shall be
held to be invalid, illegal or unenforceable, for any reason or in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Agreement shall be construed as if such provision had
never been contained herein.
12.
AMENDMENTS
This Agreement may be amended only by an instrument in writing, signed by
both parties. Such signed instrument shall state the effective date of the
amendment.
13.
6
MUTUAL COOPERATION
Both the ICS and IDT acknowledge that mutual cooperation and assistance is
essential to either party's performance under this Agreement; therefore, it will
be the duty of both parties to make all good faith efforts to fully cooperate
in the execution of this Agreement.
14.
COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be an original and all of which shall together constitute one agreement.
15.
RECORDS
IDT and ICS agree to make available for inspection to each other any books,
documents and records of the other party that may be necessary to verify the
nature and amount of any payments due pursuant to this Agreement.
16.
USAGE AGREEMENT
This Agreement completely supersedes and replaces the Usage Agreement
between ICS and IDT, dated July 29, 1996 (the "Usage Agreement"). The Usage
Agreement is void.
17.
INTERPRETATION
No provision of this Agreement shall be construed against or interpreted to
the disadvantage of any party by reason of such party having or being deemed to
have drafted such
7
provision.
8
IN WITNESS WHEREOF, ICS and IDT have executed this Agreement effective
as of the day and year first written above.
WITNESSES: INTERNATIONAL COMPUTER SYSTEMS, INC.
/s/ /s/ ▇▇▇▇▇▇ ▇▇▇▇
------------------------ -------------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇
Its: Duly Authorized Agent
/s/
------------------------
IDT CORPORATION
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------ -------------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Its: Duly Authorized Agent
------------------------
9