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Exhibit 6.1
Agreement No. 9904
CUSTOMER SERVICE AGREEMENT
BETWEEN:
Canadian Telecom Resellers Alliance, a division of
Optel Communications Corporation an Ontario
business corporation, having its registered office
at 111Peter St. Suite 300, in the City of Toronto,
ON, M5V2H1,
(hereafter called "CTRA"),
AND:
Innofone Canada Inc, a corporation duly constituted
under the laws of Canada having its principal place
of business at 241 Applewood Crescent Suite 4, in the
city of Vaughan ON L4K 4E6
(hereafter called the "Customer").
1. The Service
1.1 Customer, a purchaser and supplier of telecommunications services,
hereby requests CTRA and CTRA hereby agrees to provide a
telecommunications termination service (hereinafter referred to as the
"Service") to Customer, allowing Customer to route its clients' long
distance phone calls through CTRA's underlying carrier networks, under
the terms and conditions specified herein.
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES & EXCHANGE COMMISSION. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
OMITTED TEXT IS INDICATED BY A " * ".
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1.2 Customer shall not use the Service, nor shall allow the use of the
Service by others, for any illegal purposes, or in a manner that
violates the law, or for annoying any person, or in a manner which
interferes with the use of the Service by others users. Customer shall
not be excused from paying CTRA for the Service, or any portion
thereof, on the basis that a fraudulent or an unauthorized use
comprised a corresponding portion of such Service.
1.3 In order to obtain the Service, Customer must first comply with the
procedures outlined in Schedule A and its Annexes I and 2 appended
hereto and made a part hereof.
2. Rates, Charges and Taxes
2.1 Customer agrees to and shall be responsible for paying CTRA for all
calls and data transmissions made or received over CTRA's underlying
carrier networks via the means made available to Customer and its
sub-users to access CTRA's underlying carrier networks, on the basis
of the set per-minute rates and the various non-recurring charges
outlined in Schedule B attached hereto and made a part hereof
2.2 Customer further agrees to and shall be responsible for paying CTRA
all applicable federal, provincial and local taxes which shall be
added to the amounts payable by Customer to CTRA hereunder.
2.3 Should CTRA offer more favourable terms and conditions to another
customer, for the services covered by this agreement, for a commitment
level less than or equal to the Customer commitment, CTRA shall make
those favourable terms available to Customer, within 30 days. Such
terms shall include, but are not limited to rates, term, commitment
level and termination liabilities.
3. Duration and Renewal
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3.1 This agreement is for a term of Two (2) years, starting on April 11,
2000, and ending at noon, Eastern Standard Time, April 10, 2002,
(hereinafter referred to as the "initial term").
3.2 This agreement will renew automatically for an equivalent term at the
end of the initial term or each renewal unless Customer or CTRA
advises the other in writing of its intention not to renew the
agreement at least thirty (30) days prior to the end of the initial
term or renewal. CTRA will notify Customer 30 days prior to the end of
the initial term and any renewal term.
4. Terms of Payment and Billing
4.1 Customer shall be invoiced by CTRA on a monthly basis and each invoice
is due and payable thirty (30) days from the date of the invoice.
4.2 Invoices not paid when due shall accrue interest at a monthly rate of
* compounded monthly (* per annum) and computed on a daily basis from
the date the invoice was due until payment is received by CTRA.
4.3 In order to be considered, any billing discrepancies shall be
submitted to CTRA with reasonable details, in writing, within thirty
(30) days of the date of the invoice. Failing such submission within
the stated delay, CTRA shall be entitled to disregard any such
discrepancy.
4.4 If Customer's payment by cheque is returned for insufficiency of funds
or cannot otherwise be processed for payment, Customer shall be liable
for and subject to a * charge, applicable each time a cheque is
returned or not processed.
4.5 The rates and charges mentioned in clauses 4.2 and 4.4 above are
subject to change from time to time upon notice by CTRA to Customer,
without giving effect to the opting out provisions of clause 14.
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4.6 Termination, interruption or suspension of Service to Customer shall
not affect Customer's obligation to pay any amount owing to CTRA
hereunder or otherwise.
4.7 Customer guarantees that their monthly billing will not be less than
*, ( the "Minimum Monthly Commitment") on or before March 31st, 2001
and will not be less than this amount for the remainder of the term or
any renewal term. Should the Customer not enter into an agreement with
the Hudson Bay Company to provide long Distance services to its credit
card holders, then the Minimum Monthly Commitment will be reduced
to *.
4.8 If by March 31st, 2001 the Customer does not reach the billing level
specified in clause 4.7, the Customer shall pay forthwith to CTRA an
increase of * per minute, over and above the rates described in
Schedule B, for each billed minute and for each month where the
commitment of clause 4.7 is not met during the rest of the present
term or the renewal item.
5. Security
5.1 deleted
5.2 Any deposit required pursuant to clause 5.1 shall be held by CTRA
without interest to Customer. CTRA shall have the right to apply the
deposit against any outstanding balance in Customer's account. In the
event that there is no outstanding balance or it is less than the
amount deposited, the deposit or the remainder of the deposit shall be
refunded to Customer upon termination of this agreement.
5.3 Customer hereby grants, as of the execution of this agreement, and
binds itself to execute simultaneously a document to that effect on
the form provided by CTRA as an essential condition of this agreement,
a first ranking security on all Customer's accounts receivable, lists
of clients and other goodwill, to the benefit of CTRA, in order to
secure all the obligations of Customer hereunder. Where the law
requires the said security to be for a fixed amount, such amount will
be set at an amount equal to the equivalent of one (1) year estimated
billing for the Service. In order
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to give effect to the foregoing, Customer will do all things and
execute all additional instruments useful or necessary to effectively
assign its accounts receivable, lists of clients and other goodwill to
CTRA.
5.4 CTRA shall have the right to request at all times and receive
forthwith from the Customer a copy of the last annual or quarterly
financial statements of Customer.
6. Service or Equipment Failure
6.1 CTRA does not warrant uninterrupted Service, nor the continuous
availability or working of its equipment, or the transmission
services, systems or equipment of any other telecommunications or
telephone company or carrier whose services, equipment or systems are
used by CTRA, or by Customer or any of its users in connection with
the Service.
6.2 For the purposes of this agreement, "interruption" shall mean the
inability to complete calls due to network, system or equipment
malfunction or human errors.
6.3 In addition to the provisions of clause 10.3, it is expressly
understood that Service may be temporarily suspended or interrupted
without any liability being incurred by CTRA. Furthermore, no
compensation, credit, allowance or adjustment will be made to amounts
otherwise owing by Customer by reason of any such suspensions or
interruptions.
6.4 No credit will be given for Service difficulties such as (without
limiting the generality of the foregoing) low dial tone, circuits busy
or other network or switching capacities shortages, interruptions
caused by the failure of any services or facilities provided by a
carrier or other entity other than CTRA, interruptions caused by
Customer's fault, negligence or wilful act or interruptions caused by
failure of Customer's equipment or systems, or interruption by CTRA
due to Customer's failure to pay any amount due to CTRA or any breach
of this agreement by Customer.
7. Confidential Information
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7.1 Customer states and acknowledges that all information mentioned herein
or otherwise transmitted to CTRA or its underlying carriers, is true
and exact. Customer warrants that it has been authorized to transmit
such information to CTRA and that CTRA is authorized to receive and to
hold such information. Furthermore, Customer acknowledges it was
informed upon giving said information, that:
7.1.1 the information will be used for the purpose of obtaining the
Service, for the management of its Customer file and, among
other things, for reasons of credit, billing and collection;
and
7.1.2 the information contained in its Customer file is available
only where necessary, to employees or agents of CTRA for the
purposes of this agreement; and
7.1.3 its Customer file will be stored in the Customers Service
Department of CTRA's underlying carriers where Customer will
forward in writing any request to access or to rectify said
information.
7.2 Customer agrees to advise CTRA's underlying carriers without delay of
any change to such information supplied by Customer for the purposes
of this agreement.
7.3 Customer further states and acknowledges that all information
contained in this agreement and the Schedules hereto are confidential.
8. Mutual Liability and Indemnification
8.1 CTRA and Customer's directors, officers, employees, contractors or
agents shall not be liable to each other, each others clients,
employees, representatives or any other user of the Service or any
other person or entity for:
8.1.1 any mistakes, omissions, errors, delays or defect in
transmissions, or failure to transmit, or interruptions of
Service;
8.1.2 any damages including direct, indirect, special consequential,
exemplary or punitive damages, including,
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without limitation, any interruption of business, any loss
of data, goodwill, profits, earnings and business
opportunities or other losses, resulting directly or
indirectly out of or in connection with this agreement or
the provision of or failure to provide the Service or other
use of CTRA's communications services, facilities, equipment
or systems, or the use of same by others, even if CTRA has
been advised in advance of the possibility thereof;
8.1.3 any acts or omissions of any connecting, underlying or local
exchange telecommunications carrier whose facilities, equipment
or systems are used in providing inter-connection for or
termination of, the Service;
8.1.4 claims for libel, defamation, slander, harassment, invasion of
privacy, illegal or improper use of telecommunications services
or facilities, infringement of copyright or unauthorized use of
or infringement of trade-mark or trade-name or infringement of
other intellectual property rights, arising out of the material
data or information transmitted or received over CTRA's
underlying carriers' services, facilities, equipment or
systems; claims for patent infringement arising from combining
or connecting Customer provided facilities, equipment or
systems with CTRA's underlying carriers' services facilities,
equipment or systems;
8.1.5 claims by those to whom Customer may provide telecommunications
or other services;
8.1.6 all other claims arising out of any act or omission of Customer
or any person utilizing Customer's telephone numbers, access
lines, access codes, authorization codes, calling cards or
other means to access CTRA's underlying carriers' network with
or without the consent of Customer in connection with any
services, facilities, equipment or systems, whether provided by
CTRA or by Customer;
8.1.7 any defacement of or damage to, the premises of Customer
resulting from the attachment of any equipment, apparata or
associated wiring or instruments supplied by CTRA on such
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Customer's premises or by the installation or removal thereof;
or
8.1.8 any breach of the provisions of this agreement due to force
majeure or any other cause or event beyond their reasonable
control.
8.2 Without limiting the generality of the foregoing, CTRA's and
Customer's total and only liability under this agreement is absolutely
limited to an amount equal to that of the security provided for in
Section 5 above.
8.3 There is no express or implied warranty or condition, whether of
merchantability, fitness for a particular purpose, or otherwise, with
respect to the Service or any product or equipment provided by CTRA
hereunder.
8.4 Customer and CTRA hereby waives as against, its respective directors,
officers, employees, contractors and agents and shall indemnify and
hold all of them harmless from and against all claims, damages,
penalty or fine and acts or omissions as described in clauses 8.1.1 to
8.1.8 inclusive, made by Customer's or CTRA's directors, officers,
employees, contractors or agents, or by any third party.
8.5 Customer shall further indemnify and hold CTRA harmless from and
against any penalty or fine ordered or imposed by any government
authority or agency pursuant to finding CTRA guilty of misleading or
fraudulent practices in activating clients of Customer on CTRA's
underlying carriers' network. In addition, Customer shall pay to CTRA
all amounts that are due by such clients, the applicable dispute
charges as incurred and a penalty of * per complaint to cover the
costs of investigation and administration thereof. All matters
concerning such unauthorized activations will be referred to the local
telephone company's Carrier Services group which investigates all such
disputes. The burden of proof will be on Customer to prove its client
did in fact choose Customer as its long distance service provider.
9. Responsibility of Customer and CTRA
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9.1 Customer shall notify CTRA's underlying carriers within two (2)
business days whenever any of its own clients or sub-users ceases to
use the Service, either because the said client or sub-user has chosen
a preferred inter-connection carrier other than CTRA or has had its
service agreement with Customer interrupted or terminated for any
reason.
9.2 Where Customer so notifies CTRA's underlying carriers to discontinue
the Service to specific sub-user(s) or telephone number(s), CTRA shall
diligently discontinue the Service as requested, but in any event, no
later than three (3) business days after the receipt of said
notification, without liability to the Customer beyond the expiration
of said three (3) days' delay.
9.3 CTRA's underlying carriers will provide Customer with regular or
occasional lists of Customer's clients. CTRA's underlying carriers
will also promptly notify Customer of any PIC Care transactions
indicating that one or more of Customer's clients or sub-users have
selected another carrier. Customer shall have two (2) business days
following the receipt of such list or notice to notify CTRA's
underlying carriers that some clients are not Customer's clients any
more and that the Service should not be provided to them through
CTRA's underlying carriers' network.
9.4 If Customer fails to so notify CTRA's underlying carriers, Customer
shall be responsible for the payment of all amounts due by such
clients or sub-users utilizing the Service beyond the expiration of
said two (2) day delay.
9.5 CTRA will provide Customer with daily delivery of Call Detail Records
and 85% of Call Detail Records within 3 business days of when the call
was made.
10. Termination
10.1 Except where otherwise specified, this agreement may be terminated by
either party upon thirty (30) days written notice.
10.2 Should this agreement be terminated by Customer before the expiry of
the term or any renewal thereof, Customer will owe CTRA, and will be
billed a termination charge of *.
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10.3 Customer agrees that CTRA may suspend, disconnect or terminate the
Service in whole or in part and this agreement, if Customer:
10.3.1 fails to pay any invoice when due or any other amount owed to
CTRA;
10.3.2 fails to abide by the terms and conditions as specified in the
agreement or provides false or misleading information to CTRA
in connection with an application or agreement for Service;
10.3.3 fails to provide or maintain a security deposit or other
alternative when required to do so pursuant to this agreement;
or
10.3.4 intentionally or de facto transfers or assigns in whole or in
part CTRA's Service without the express written authorization
of CTRA, which shall be deemed a fraudulent use of the Service.
10.4 Prior to such suspension or termination, CTRA will provide Customer
with reasonable notice of the suspension or termination date, the
reason(s) for the proposed suspension or termination and any amount
owing.
10.5 Notwithstanding anything herein contained, this agreement shall
terminate forthwith automatically if Customer:
10.5.1 uses CTRA's underlying carriers Service, facilities, equipment
or systems in a manner that adversely affects CTRA's underlying
carriers' operations or the use of CTRA's underlying carriers'
services by other customers; or
10.5.2 commits an act of bankruptcy within the meaning of the
Bankruptcy and Insolvency Act (Canada); if any bankruptcy or
insolvency proceedings are taken by or against the Customer; if
Customer passes a resolution to or makes any voluntary
assignment for the benefit of its creditors; if a receiver
takes possession of any of Customer's property; if Customer
ceases to carry on business in the
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normal course; if Customer is liquidated or wound up, or
avails itself of the Companies' Creditors Arrangement Act
(Canada).
11. Access to Site and Disconnection
The employees of CTRA may enter the site where the Service is provided at
all reasonable hours to install, inspect, repair, maintain, replace and
disconnect all lines, and remove from the site CTRA's facilities and
equipment.
12. Notices
Any notices required or permitted to be given hereunder shall be in writing
and shall be deemed to have been received five (5) business days after the
post-marked date thereof if sent by mail, the next business day following
transmission if sent by facsimile, or at the time of delivery if
hand-delivered. Any notices shall be addressed as follow:
To CTRA; CTRA
111 Peter St, Floor 3
Toronto, ON, M5V2H1
Attn: Erle Stephens
Fax No: (416) 902-2777
To Customer: Innofone Canada Inc.
241 Applewood Inc.
Suite 4
Vaughan ON L4K 4E6
13. Legal Costs
Customer shall be responsible for all costs, expenses, collection agency
fees, legal fees and disbursements incurred by CTRA to recuperate any sums
owing by Customer hereunder, including fees on an solicitor/client
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basis in connection with any legal or other proceedings where judgement
against Customer or its clients is awarded in favour of CTRA, or for, the
creation and registration of the security mentioned in clause 5.3 hereof.
14. Changes to Agreement
The terms and conditions, the rates, charges or other fees associated with
the Service are subject to changes from time to time. Upon notification of
any such changes, Customer becomes liable for all new rates, charges or
fees and is deemed to have accepted all new applicable changes in the
relevant terms and conditions, unless, subject to the reserve of clause
4.5, Customer terminates the agreement within one (1) week from the receipt
of such notification.
15. Assignment
Neither this agreement nor any right thereunder may be assigned,
transferred or otherwise disposed of in whole or in part by Customer
without the prior written consent of CTRA, which consent shall not be
unreasonably withheld. Without restricting the generality of the foregoing,
Customer shall be deemed to have assigned, transferred or disposed of this
agreement upon a change in the direct or indirect control of Customer,
including a sale of all or a substantial part of its assets. In such case,
Customer shall diligently notify CTRA and provide it with the relevant
information including but not limited to the new controlling party's name
and address.
16. Precedence and Governing Law
16.1 This agreement supersedes all prior verbal or written agreements
between the parties concerning the matters dealt with herein,
including any tender, quotation, offer of services or purchase order.
16.2 This Agreement and the rights and obligations and relations of the
parties hereto shall be governed by and construed in accordance with
the laws of the Province of Ontario and the federal laws of Canada
applicable therein (but without giving consideration to any conflict
of laws rules). The parties hereto agree that the Courts of Ontario
shall have exclusive jurisdiction to entertain any action or other
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legal proceedings based on any provisions of this Agreement. Each
party hereto does hereby attorn to the jurisdiction of the Courts of
the Province of Ontario.
16.3 No waiver of any of the provisions of this agreement shall be deemed
to be a waiver of any other provisions (whether similar or not) nor
shall such a waiver constitute a continuing waiver, unless otherwise
expressly provided for in writing and duly executed by the party to be
bound thereby.
16.4 If any clause or part thereof in this agreement be illegal or
unenforceable, it shall be considered separate and severable from the
agreement and the remaining provisions shall remain in full force and
effect and shall be binding upon the parties as though the said clause
or part thereof had never been included, providing that the agreement
as thus modified remains operable.
16.5 Customer has requested that this agreement and its ancillary documents
be drafted in English. Le Client a exige que cet accord et ses
documents connexes soient rediges en langue anglaise.
17. Governmental Approvals
This agreement, together with all attachments and all covenants,
undertakings and obligations made herein, shall be conditional upon both
parties obtaining and maintaining all necessary governmental licenses,
consents, permits, authorizations and approval as are by law necessary.
Each party shall use its best reasonable efforts to seek and maintain such
authority as may be required.
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18. Credit Approval
This agreement will not become binding upon CTRA until final credit
approval by CTRA. If credit approval is denied to Customer, this agreement
will become null and void and will be deemed never to have existed.
IN WITNESS WHEREOF the parties have executed this agreement on the _______
11th day of April, 2000.
Customer:
By: By:
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Name: Larry Hunt
Title: Chief Executive Officer
CTRA:
By: By:
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Name: Erle Stephens Name: Frank Menard
Title: Managing Director Title: Director of Sales
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For CTRA'S internal use only
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Credit application
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Approved: Denied:
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Date: Authorized signature:
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Customer Service Agreement No: 9904
SCHEDULE A
PROCEDURES
PRECEDENT TO OBTAINING THE SERVICE
1. In order to obtain the Service, Customer must first:
1.1 obtain a standard Letter of Authorization (hereinafter referred to as
"LOA") or a third party verification from each of its clients,
detailing which telephone number(s) the clients to be converted to the
Service. (The standard form of the LOA is appended hereto as Annex 1
and the standard text of the third party verification is appended
hereto as Annex 2); and
1.2 supply CTRA with a copy of the signed LOA or the completed third party
verification, upon request.
2. As soon as reasonably possible after the receipt of Customer's order,
CTRA's underlying carriers will process the Service order submitted on
behalf of Customer.
3. Service orders submitted to CTRA will direct the routing of all "1+" or
"011+" calls to CTRA's underlying carriers network.
4. As and when Service orders are processed, Customer's clients will have the
opportunity to call a "1-700" number to determine if activation of the
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Service has occurred. The "1-700" number will have the Customer's voice
prompt.
5. Service orders will be processed on a first come, first served basis.
6. Under normal conditions, and subject to having received all prerequisite
documentation complete and in order, CTRA will process Service orders
within nine (9) working days on the average. However, CTRA will not assume
nor incur any liability for delays in processing such Service orders.
7. The billing cycle will end on the last day of each month, or on such other
date as may be determined by CTRA and notified to Customer. Call Detail
Records will be provided on a daily basis.
8. Billing will be provided on paper, magnetic media or electronically.
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No:
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Customer Service Agreement
ANNEX I TO
SCHEDULE A
STANDARD FORM OF
LETTER OF AUTHORIZATION
(LOA)
English Version:
Your signature below authorizes ( ) to notify your local telephone company of
your decision to subscribe to ( ) long distance telephone services under the
terms of Equal Access. Equal Access means your long distance calls are routed
automatically over ( ) network every time you dial "1" plus the long distance
telephone number. Only calls made from the phone number(s) listed above will be
the object of this subscription.
Signature: Date (y/m/d):
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Signature: Date (a/m/j)
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Customer Service Agreement No: 9901
No:
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SCHEDULE B
SERVICE RATES AND CHARGES
SEE ATTACHED RATE CHART
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SCHEDULE B RATES AND CHARGES
For all calls carried on the Sprint Network
Outbound calls from and to anywhere in Canada * per minute
Outbound calls from anywhere in Canada to the USA * per minute
Calling Cards from and to anywhere in Canada or the USA * per min.
Inbound calls from anywhere in Canada to Ontario and Quebec * per min.
Inbound calls from the USA to anywhere in Canada * per min.
For all calls carried on the Optel Network to anywhere in Canada from anywhere
in Ontario and Quebec, the rate for these calls shall be: * per min.
The above rates are predicated upon the traffic distribution provided by
Innofone Canada, of 65% Ontario/Quebec termination of which 98% of the traffic
will originate in Ontario/Quebec and that no more than 30% of the traffic will
originate during peak calling hours. Should usage be outside these general
boundaries during any month after March 31, 2001, a re-evaluation of the above
rates will occur.
Innofone Canada and CTRA will review the above rates every six months during
this agreement to ensure market viability. If Innofone determines that the above
rates are not competitive and submits written proof of such, then CTRA will have
30 days to respond .
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All calls are rated as per the above 24 hours per day, 7 days per week timed in
* and * except calling card and International calls which will be timed in *
and *.
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