FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report (Date of earliest event reported) August 26, 1998
DCI Telecommunications, Inc.
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(Exact name of registrant as specified in its charter)
Colorado 2-96976-D 84-1155-41
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
611 Access Road, Stratford, CT 06615
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(Address of principal executive offices)
Registrant's telephone number, including area code:(203) 380-0910
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
On August 31, 1998, the Company announced the signing of a definitive
joint venture agreement with TIMEWorldcom U.S.which combines
TIMEWorldcom Europe with the Company's European operating subsidiary,
DCI Europe, Ltd. The joint venture is 51% owned by the Company. Under
the agreement, DCI's switched based European network is being
incorporated into the joint venture which will be utilized to carry the
telephone traffic to be derived from agreements being put into the
joint venture by TIMEWorldcom Europe. Note: TIMEWorldcom U.S. and
TIMEWorldcom Europe are not affiliated in any way with WorldCom, Inc.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
- - Definitive Joint Venture Agreement between TIMEWorldcom Europe,
TIMEWorldcom U.S., DCI Telecommunications, Inc. and DCI Europe Ltd.
- - Euro Debit Agreement between TIMEWorldcom and Cristina Mosca.
- - Euro Debit Agreement between TIMEWorldcom and InterNext
Communications, Inc.
- - TIMEWorldcom Europe had no operations prior to this venture and
accordingly had no historical financial statements.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
DCI Telecommunications, Inc.
Joseph J. Murphy
__________________________
Joseph J. Murphy
President
Date: September 11, 1998
<PAGE>
AGREEMENT
AGREEMENT made as of August 26, 1998 by and between TIMEWorldcom
Europe, a Uruguayan corporation with an address of 7895B Cessna Avenue,
Gaithersburg, Maryland 20879 (ATWCE ), TIMEWorldcom, USA, a Delaware
corporation with an address of 7895B Cessna Avenue, Gaithersburg,
Maryland 20879 (ATWCU ), DCI Telecommunications, Inc., a Colorado
corporation with an address of 611 Access Road, Stratford, Connecticut
06497 (ADCI ), and DCI Europe, Ltd., a (to be determined) corporation
which is a wholly-owned subsidiary of DCI, with an address of (to be
determined)(ADCI Europe ).
WITNESSETH:
WHEREAS, TWCE is an international provider of long distance
services, and provides such services throughout Europe to the customers
(collectively, the ATWCE Customers) pursuant contracts and agreements
(collectively, irrespective of the existence of formal written
agreements, the ATWCE Contracts) more particularly set forth in Exhibit
A to this Agreement; and
WHEREAS, DCI Europe is the owner of the assets (collectively, ADCI
Europe Assets ) more particularly set forth in Exhibit B to this
Agreement, including, but not limited to, switching facilities
throughout Europe (ASwitches ); and
WHEREAS, the parties are entering into this Agreement in order to,
among other things, (i) charter a new corporation, DCI Time Europe,
Inc. (ADCITE ) and set forth their agreement with respect to the
contributions of the parties to DCITE, and the ownership and operation
thereof; and (ii) to provide for the grant by DCI to TWC of additional
warrants to purchase common stock of DCI upon the terms and conditions
set forth herein;
NOW THEREFORE, for value received and in consideration of the
mutual promises contained herein, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
1. Formation of DCITE. On or about the date of this Agreement,
TWCE and DCI shall form a (to be determined) corporation, DCI Time
Europe, Inc. (ADCITE). The authorized common stock of DCITE shall
consist of 300 shares, of which one hundred (100) shares shall be
issued on the date of formation as follows. TWCE shall receive forty-
nine (49) shares, and DCI shall receive fifty-one (51) shares. The
interests of TWCE and DCI in any gross profits of DCITE, and their
respective shares in any losses and/or liabilities that may result from
their respective ownership of shares in DCITE, shall be as follows:
TWCE - 49%, DCI - 51%.
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Sergio Ado shall be the chief executive officer of DCITE, and Mr.
Ado shall be responsible for the day-to-day operation of DCITE. The
internal governance of DCITE shall be in conformance with the By-laws
(the ABy-laws). The purpose for which DCITE is being formed is to
utilize the assets and employees transferred thereto by DCI Europe
pursuant to this Agreement in order to provide the services formerly
provided by TWCE throughout Europe to the current customers of TWCE as
set forth in the TWCE Contracts. DCITE shall maintain its principal
place of business at: __________________________. DCITE may re-locate
its office from time to time or have additional offices as its
shareholders and directors may determine.
2. Transfer of Assets from TWCE to DCITE. TWCE shall contribute
Five Thousand Dollars ($5,000.00) to capitalize DCITE and to meet
DCITE's initial expenses. In addition, as additional paid in capital,
TWCE shall transfer to DCITE all of its right, title and interest in
and to its business relationships with the TWCE Customers and in and to
the TWCE Contracts, and any and all accounts receivable and proceeds
arising from such TWCE Customers and out of such TWCE Contracts for
services rendered either prior to or following the date of this
Agreement, free and clear of any lien, encumbrance or security
interest. On the date of this Agreement, TWCE and Mr. Ado shall
execute and deliver to DCITE and DCI an agreement not to compete in the
form attached to this Agreement as Exhibit D, which provides that from
and after the date of this Agreement, TWCE and Mr. Ado shall be
restricted from rendering telecommunications services within Europe to
any parties including, but not limited to, the TWCE Customers.
3. Transfer of Assets from DCI Europe. DCI Europe shall
contribute Five Thousand Dollars ($5,000.00) to capitalize DCITE and to
meet DCITE's initial expenses. In addition, (a) as addition paid in
capital, DCI Europe shall transfer to DCITE all of its right, title and
interest in and to the DCI Europe Assets, and any and all accounts
receivable and proceeds arising from such DCI Europe Assets for
services rendered following the date of this Agreement, free and clear
of any lien, encumbrance or security interest, and (b) subject to their
consent, all employees of DCI Europe shall become employees of DCITE.
DCI Europe further covenants and agrees that it shall furnish any
additional switching facilities necessary and appropriate for DCITE to
provide long distance services as set forth in the TWCE Assets.
4. Grant of Right of First Refusal to Purchase Stock in DCITE.
Either DCI or TWCE may sell or otherwise transfer all or any of its
stock in DCITE to a non-party to this Agreement only after offering it
to on the terms and conditions set out in this Agreement. Such party
receiving a bona fide offer for all or part of its stock wishing to
sell such stock (the "Selling Stockholder") shall first offer the stock
to such other party ("Offeree Stockholder"). The Selling Stockholder
shall notify the Offeree Stockholder in writing that it has received a
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bona fide offer for the sale of the stock (the "Notice"). The Notice
shall state the name and address of the person or entity making the
offer, the number of shares to be sold, the sales price and terms of
payment. The Notice shall contain an offer to sell the stock to the
Offeree Stockholder, exercisable within sixty (60) days of the
transmission of such Notice, for the same price and upon the same terms
of payment as those of the bona fide offer. The stock of DCITE issued
to each of DCI and TWCI shall contain a legend as follows:
"TAKE NOTICE that the sale, assignment, transfer, or pledge of
shares represented by this Certificate are subject to the
restrictions contained in an Agreement dated as of ___________,
1998 by and between (among others) TIMEWorldcom Europe, DCI
Telecommunications, Inc. and DCI Time Europe, Inc., a copy of
which is on file at the offices of DCI Time Europe, Inc."
5. Right of First Refusal Granted to TWCU. In consideration for
TWCU's obligations hereunder, DCI hereby grants TWCU a right of first
refusal to match or exceed any and all of DCI's carrier traffic within
the United States of America. In consideration for this grant, TWCU
hereby covenants and agrees that it shall provide to DCI the most
favorable pricing terms which TWCU has available for such traffic, and
that DCI shall have no obligation to employ TWCU's services unless the
terms offered by TWCU meet or exceed the terms upon which DCI has been
offered carrier traffic.
6. Grant of Warrants from DCI to TWCE. In consideration for
TWCE's obligations hereunder, DCI shall grant warrants to purchase
shares of DCI common stock at an exercise price equal to the average
trading price of such stock over the most recent ninety (90) days prior
to exercise; provided, however, that the sole source of funds to be
used by TWCE for the exercise of such warrants shall be distributions
by DCITE to TWCE pursuant to Section 1 of this Agreement.
7. TWCU and TWCE Voting of DCI Shares. Both TWCU and TWCE
hereby covenant and agree that for the first two (2) years following
the date of this Agreement, they shall vote all shares of DCI they now
or hereafter own as recommended by DCI management.
8. Representations and Warranties of the Parties.
As used in this Section 8, ATWC Parties shall mean TWCE and TWCU,
collectively, and ADCI Parties shall mean DCI and DCI Europe,
collectively.
(a) From TWC Parties to DCI Parties.
(i) Due Organization; Qualification. Each of the TWC
Parties is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdictions set
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forth in the Prologue to this Agreement, and each is duly
qualified to transact business as a foreign corporation, in
good standing and licensed in each state and nation to the
extent necessary to ensure the enforceability of the TWCE
Contracts and the assignment thereof to DCITE as herein
provided, and to perform its duties and obligations under
this Agreement.
(ii) Authority. Each of the TWC Parties has the full
power, authority and legal right to hold, transfer and convey
the TWCE Contracts and to execute and deliver this Agreement
and the agreement attached to this Agreement as Exhibit D
(together with this Agreement, collectively, the ATransaction
Documents ) and to perform all transactions contemplated by
the Transaction Documents. Each of the TWC Parties has duly
authorized the execution, delivery and performance of the
Transaction Documents, and has duly executed and delivered
the Transaction Documents. The Transaction Documents
constitute the legal, valid and binding obligation of each of
the TWC Parties enforceable in accordance with their
respective terms, except as such enforcement may be limited
by bankruptcy, insolvency, reorganization, receivership,
moratorium or other laws relating to or affecting the rights
of creditors generally and by general principles of equity
(regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(iii) No Conflicts. Neither the execution and
delivery of the Transaction Documents, nor the fulfillment of
or compliance with the terms and conditions of the
Transaction Documents by the TWC Parties, will (a) conflict
with or result in a breach of any of the terms, conditions or
provisions of either TWC Party's Articles of Incorporation,
By-laws or other organization documents or any agreement or
instrument to which either TWC Party is a party or by which
they (or any of their respective properties) are bound, or
constitute a default or result in an acceleration under any
of the foregoing; (b) conflict with or result in a breach of
any legal restriction if compliance therewith is necessary
(1) to ensure the enforceability of any Transaction Documents
or any TWCE Contract, or (2) for the TWC Parties to perform
their respective obligations under the Transaction Documents
in accordance with the terms thereof; (c) result in the
violation of any law, rule, regulation, order, judgment or
decree to which either TWC Party or their respective property
is subject if compliance therewith is necessary (1) to ensure
the enforceability of the Transaction Documents or the TWCE
Contracts or (2) for the TWC Parties to perform their
respective obligations under the Transaction Documents in
accordance with the terms thereof; or (d) result in the
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creation or imposition of any lien, charge or encumbrance
that would have material adverse effect upon any of
properties of either TWC Party pursuant to the terms of any
security document or other instrument, or materially impair
the ability of DCITE to realize full value of the TWCE
Contracts.
(iv) Solvency. Each TWC Party is solvent and the
transfer of the TWCE Contracts (1) will not cause either TWC
Party to become insolvent and (2) is not intended by either
TWC Party to hinder, delay or defraud any of its creditors.
(v) No Consent Required. No consent, approval,
authorization or order of, or registration or filing with, or
notice to, any court or governmental agency or body having
jurisdiction or regulatory authority over either TWC Party is
required for (a) the execution and delivery of the
Transaction Documents, (b) the transfer and assignment of the
TWCE Contracts, or (c) the consummation of the transactions
contemplated by the Transaction Documents or, to the extent
so required, such consent, approval, authorization, order,
registration, filing or notice has been obtained, made or
given (as applicable).
(vi) Ability to Perform. The TWC Parties do not
believe, nor do they have any reason or cause to believe,
that they cannot perform each and every covenant of the TWC
Parties contained in the Transaction Documents.
(vii) No Litigation Pending. There are no actions,
suits or proceedings pending or to the TWC Parties' actual
knowledge threatened against either TWC Party which, either
in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, or
financial condition of either TWC Party or which would draw
into question the validity of this Agreement (or any
agreement executed and delivered by the Transferor in
connection herewith) or the Mortgage Loan or which would be
likely to impair materially the ability of the Transferor to
perform its duties and obligations under the terms of this
Agreement (or any agreement executed and delivered by the
Transferor in connection herewith).
(viii) No Brokers. The TWC Parties have not dealt
with any party that may be entitled, by reason of any act or
omission of either TWC Party, to any commission or
compensation in connection with the transfer of the TWCE
Contracts to DCITE hereunder.
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(ix) No Violation. Neither TWC Party is in default
under any TWCE Contract or any other instrument or agreement
with respect to either the TWCE Contracts or the customers of
TWCE.
(b) From DCI Parties to TWC Parties.
(i) Due Organization; Qualification. Each of the DCI
Parties is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdictions set
forth in the Prologue to this Agreement, and each is duly
qualified to transact business as a foreign corporation, in
good standing and licensed in each state and nation to the
extent necessary to ensure continued use of the DCI Europe
Assets and the assignment thereof to DCITE as herein
provided, and to perform its duties and obligations under
this Agreement.
(ii) Authority. Each of the DCI Parties has the full
power, authority and legal right to hold, transfer and convey
the DCI Europe Assets and to execute and deliver the
Transaction Documents and to perform all transactions
contemplated by the Transaction Documents. Each of the DCI
Parties has duly authorized the execution, delivery and
performance of the Transaction Documents, and has duly
executed and delivered the Transaction Documents. The
Transaction Documents constitute the legal, valid and binding
obligation of each of the DCI Parties enforceable in
accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws
relating to or affecting the rights of creditors generally
and by general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or
at law).
(iii) No Conflicts. Neither the execution and
delivery of the Transaction Documents, nor the fulfillment of
or compliance with the terms and conditions of the
Transaction Documents by the DCI Parties, will (a) conflict
with or result in a breach of any of the terms, conditions or
provisions of either DCI Party's Articles of Incorporation,
By-laws or other organization documents or any agreement or
instrument to which either DCI Party is a party or by which
they (or any of their respective properties) are bound, or
constitute a default or result in an acceleration under any
of the foregoing; (b) conflict with or result in a breach of
any legal restriction if compliance therewith is necessary
(1) to ensure the enforceability of any Transaction
Documents, or (2) for the DCI Parties to perform their
<PAGE>
respective obligations under the Transaction Documents in
accordance with the terms thereof; (c) result in the
violation of any law, rule, regulation, order, judgment or
decree to which either DCI Party or their respective property
is subject if compliance therewith is necessary (1) to ensure
the enforceability of the Transaction Documents or (2) for
the DCI Parties to perform their respective obligations under
the Transaction Documents in accordance with the terms
thereof; or (d) result in the creation or imposition of any
lien, charge or encumbrance that would have material adverse
effect upon any of properties of either DCI Party pursuant to
the terms of any security document or other instrument, or
materially impair the ability of DCITE to realize full value
of the TWCE Contracts.
(iv) Solvency. Each DCI Party is solvent and the
transfer of the DCI Europe Assets (1) will not cause either
DCI Party to become insolvent and (2) is not intended by
either DCI Party to hinder, delay or defraud any of its
creditors.
(v) No Consent Required. No consent, approval,
authorization or order of, or registration or filing with, or
notice to, any court or governmental agency or body having
jurisdiction or regulatory authority over either DCI Party is
required for (a) the execution and delivery of the
Transaction Documents, (b) the transfer and assignment of the
DCI Europe Assets, or (c) the consummation of the
transactions contemplated by the Transaction Documents or, to
the extent so required, such consent, approval,
authorization, order, registration, filing or notice has been
obtained, made or given (as applicable).
(vi) Ability to Perform. The DCI Parties do not
believe, nor do they have any reason or cause to believe,
that they cannot perform each and every covenant of the DCI
Parties contained in the Transaction Documents.
(vii) No Litigation Pending. There are no actions,
suits or proceedings pending or to the DCI Parties= actual
knowledge threatened against either DCI Party which, either
in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, or
financial condition of either DCI Party or which would draw
into question the validity of this Agreement (or any
agreement executed and delivered by the Transferor in
connection herewith) or the Mortgage Loan or which would be
likely to impair materially the ability of the Transferor to
perform its duties and obligations under the terms of this
Agreement (or any agreement executed and delivered by the
Transferor in connection herewith).
<PAGE>
(viii) No Brokers. The DCI Parties have not dealt
with any party that may be entitled, by reason of any act or
omission of either DCI Party, to any commission or
compensation in connection with the transfer of the DCI
Europe Assets to DCITE hereunder.
(ix) No Violation. Neither DCI Party is in default
under any instrument or agreement with respect to the DCI
Europe Assets.
9. Conditions Precedent. The following shall constitute express
conditions precedent to the parties' obligations as set forth in this
Agreement and the exhibits hereto: (a) the parties hereto shall fully
execute the Transaction Documents and the fulfillment or waiver of the
terms and conditions thereof; (b) the approval of the transaction by
TWCE's and DCI's shareholders and/or Board of Directors whichever is
applicable; (c) the receipt of all other required governmental and
third party consents and approval; (d) the completion of DCI's due
diligence investigations, with the results thereof being satisfactory
to DCI; (e) the absence of any material adverse changes in the assets,
financial condition or earnings prospects of TWCE prior to the date
hereof; (f) TWCE having sales of $100 million and $10 million gross
earnings before taxes.
10. Change in Control. In the event that DCI receives an acceptable
offer to purchase DCI, either through an asset sale or a stock sale
("Offer"), DCI will notify TWCE in writing, setting forth the specifics
of the Offer. TWCE shall have seven (7) days from the date of its
receipt of such notification in which to deliver to DCI a written
election of one of the following options; in the event that TWCE does
not deliver such an election to DCI within such seven (7) days, then in
such event TWCE shall have been deemed to elect option (3):
Either:
(1) TWCE may purchase DCI's ownership of DCITE within sixty (60)
days of TWCE's election of this option (1) at a purchase
price calculated as follows:
Price = .85 times [.51 times Y times Z]; where
Y = multiple of DCI gross sales used by the prospective
purchaser to compute the purchase price set forth in the
Offer
Z = gross sales attributable to DCITE for the previous twelve
(12) months.
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It shall be an express condition precedent to the election of
this option (1) that, within seven (7) days of its
transmittal of its election of option (1) to DCI, TWCE shall
deliver to DCI, via certified funds, a nonrefundable deposit
equal to ten percent (10%) of the Price calculated according
to the above formula. In the event that TWCE fails to
consummate the purchase of DCI's ownership in DCITE for any
reason, (i) DCI shall retain the deposit in its entirety as
reasonable liquidated damages, and (ii) TWCE shall have no
further rights to exercise option (1) in connection with any
proposed purchase of DCI by any prospective purchaser. In
the event that TWCE fails to remit such deposit in a timely
fashion, TWCE shall be deemed to have forfeited its rights
under this option (1) and shall be deemed to have elected
option (3).
or:
(2) In the event that the offer from the prospective purchaser
indicates its willingness to purchase DCITE in its entirety,
TWCE shall have the option to request that DCI so sell DCITE
in its entirety to the prospective purchaser, and in such
event TWCE shall receive from the proceeds of such sale an
amount calculated according to the following formula (not
less than $120,000,000 sale price):
Payment to TWCE = .49 times [Y times Z]; where
Y = multiple of DCI gross sales used by the prospective
purchaser to compute the purchase price set forth in the
Offer
Z = gross sales attributable to DCITE for the previous twelve
(12) months.
or
(3) TWCE may elect to retain its 49% ownership in DCITE.
11. Miscellaneous.
a. Governing Law. This Agreement is a Connecticut contract to
be governed by the laws of the State of Connecticut and to be paid and
performed therein. Both parties agree to Fairfield County (Connecticut)
Superior Court as the sole and exclusive jurisdiction for the
resolution of any disputes hereunder.
b. Binding Effect. This Agreement is binding upon the parties
hereto, their executors, administrators, successors and assigns.
<PAGE>
c. Execution of Agreement. This Agreement is executed in
multiple counterparts, each of which will be deemed an original but all
of which collectively constitute one and the same agreement.
d. Entire Agreement. The Transaction Documents contain the
entire understanding of the parties hereto, all prior representations,
statements and agreements being merged herein and therein.
e. Further Amendments. This Agreement may not be modified or
amended except in writing and executed by both parties.
WITNESS out hands as of the date first above written.
TIMEWorldcom Europe (ATWCE )
Sergio Ado
___________________________ By:_____________________________
Witness Sergio Ado,
its duly authorized President
TIMEWorldcom USA (ATWCU )
Sergio Ado
___________________________ By:__________________________________
Witness Sergio Ado,
its duly authorized President
DCI Telecommunications, Inc. (ADCI)
Joseph J. Murphy
___________________________ By:__________________________________
Witness Joseph J. Murphy,
its duly authorized President
DCI Europe, Inc. (ADCI Europe )
Joseph J. Murphy
___________________________ By: ___________________________
Witness Joseph J. Murphy,
its duly authorized President
<PAGE>
TIMEWorldcom, INC
Tel.: 301 590 1091 - Facsimile 301 869 3019.
7895 Cessna Avenue, Gaithersburg Maryland 20879
P.O.BOX 82 Washington Grove
Maryland 20880-0082
EURO DEBIT AGREEMENT
THIS AGREEMENT is made and entered into this 1st day of May 28, 1998,
by and between TIMEWorldcom, Inc., hereinafter called (TIME) a
corporation organized and existing under the laws of the state of
Delaware with offices at 7895 Cessna Avenue, Gaithersburg Maryland,
20879, mailing address, P.0. BOX 82 Washington Grove Maryland, 20852-
0082, and CRISTINA MOSCA, hereinafter called "Customer" organized and
existing under the laws of Italy with offices at Via Chilesotti, 1
36016 Thiens (VI) C.F. MSCCST63R48L 157A, P.I. 02373870245.
WITNESSETH
1. TIME with its "carrier partners" is a telecommunications services
provider.
2. Customer desires to Purchase TIME telecommunications pre-paid
service. Such services may be provided pursuant to TIME "carrier
partners" tariffs as such tariffs may be amended from time to time
(Tariffs).
3. TIME with its "carrier partners" desires to sell to Customer,
TIME telecommunications services for prepaid debit international
service.
The parties agree as follows:
1. EXCLUSIVITY.
TIME hereby agrees to sell exclusively to Customer specially designed
prepaid debit platforms which will be designed at the sole expense of
TIME and described in Exhibit A, subject to the terms and conditions
set forth below. Customer agrees to use TIME with its "carrier
partners" as the exclusive provider for the prepaid debit services
required to meet the needs of the Customer on a case by case basis.
The Customer grants TIME the "first right of refusal" on all
Telecommunications Services during the term of this agreement.
2. SERVICES.
TIME will provide its Domestic and International Direct Dial Prepaid
Platform telecommunications services (the "Services") to Customer
pursuant to the applicable tariffs of TIME's "carrier partners" (the
"Tariffs") as may be amended or succeeded from time to time. All of
<PAGE>
the terms and conditions of the Tariffs now or hereafter in effect are
incorporated in this Agreement. In the event that any provision set
forth in this Agreement conflicts with the terms and conditions of any
of the Tariffs, the provisions set forth in the Tariffs will govern.
3. UNITS OF SERVICE AND PIN NUMBERS
TIME shall sell to Customer PIN numbers (if required) and or units of
telecommunications transmission service ("Units-Minutes"), and or
Printed cards with time, Units-Minutes, ready for consumption (if
required). The sale of Units-Minutes shall be pursuant to the terms
set forth on Exhibit A. Except as provided in paragraph 3, TIME may
during the ramp-up period, upon thirty (30) days prior written notice
to Customer, increase any rate set forth in Exhibit A so as to offset
an increase to TIME in the costs of providing telecommunications
services that is caused by changes in the rules, regulations or
operating procedures of any governmental or regulatory authority
without further liability to TIME. No increase in the rate will be
allowed by TIME which is caused by its "carrier partners" increasing
the cost of service to TIME.
4. INTERNATIONAL RATES.
Each Unit shall entitle the user holder to one minute of Domestic
Interstate service, or to a minute of International services as
determined by the rates set forth on EXHIBIT B. Notwithstanding the
foregoing, and except as provided in paragraph 3, TIME reserves the
right to change its international rates set forth on EXHIBIT A at the
end of each twelve (12) month period throughout the duration of this
Agreement.
5. DUTIES OF THE CUSTOMER
In the furtherance of this Agreement, Customer duties include, but are
not limited to:
(a) submit original order of a minimum of 900,000 cards and or Pins
per month, with a ramp-up to a minimum of 150,000 pins, and or cards
per month, based on the wholesale rate set forth on Exhibit A.
(b) submit by fax and FedEx fully executed forms for the PIN's as
provided by TIME.
(c) no orders or activation's shall be binding by TIME until payment is
accepted and received by TIME.
(d) all orders shall contain such terms and conditions as outlined in
this agreement and comply with the tariff.
<PAGE>
(e) all "chargebacks", and fees related to "refresh" activity involving
fraud or disputed charges, charged back to TIME by its merchant bank
will be the sole responsibility of the Customer.
6. TIME RIGHTS AND DUTIES.
TIME will maintain the purchase price as set forth in Exhibit A for
the term of this agreement except as indicated in paragraph 3 of this
Agreement. TIME will provide the "specialty platform" design services
as outlined in Exhibit A at no charge to the Customer.
TIME shall be the final authority on the capabilities of the platform
design.
TIME will provide the "specialty platform" design services as outlined
in Exhibit A at no charge to the customer.
TIME shall be the final authority on the capabilities of the platform
design.
TIME agrees to refund the Customer on a case by case basis for 100% of
cost for telecommunications services if Customer is required to refund
its client of record for reasons or causes of actions not covered in
paragraph 8 or 10 of this agreement.
7. PIN NUMBERS.
PIN numbers shall expire 6 (Six) month after the date of activation or
as directed by the Customer. All PIN numbers shall remain inactive
until activated by TIME with prepayment of sums due pursuant to the
terms set forth on Exhibit A. TIME reserves the right to de-activate
any PIN numbers for non-compliance of the prepayment terms as outlined
in Exhibit A.
8. CUSTOMER IS AN INDEPENDENT RESELLER
This agreement does not constitute an agreement for a partnership or
joint venture between TIME and Customer. Customer is not an agent of
TIME and for no purpose can act as agent of TIME. Customer is an
independent re-seller. All expenses and cost incurred by Customer in
meeting Customers obligations under this Agreement shall be solely
those of the Customer, and TIME shall not be liable for their payment.
Customer can make no commitments with third parties that are binding
upon TIME without the express written consent of TIME, and Customer in
no way shall represent himself as having that power.
<PAGE>
9. OWNERSHIP
All customers referred to TIME by Customer shall remain the property of
the Customer outside of their commitment with TIME. If for any reason
the customer is dissatisfied with TIME, Customer has the right to find
another source to fill the specific of customer needs, if TIME is not
able to satisfy the customers concerns in a reasonable amount of time.
10. INDEMNITY
Customer shall indemnify, hold harmless and defend TIME
from and against all claims, clauses, causes of action, damages,
judgments, settlements, losses, liabilities, obligations, penalties,
charges, costs, payments, and expenses of any kind whatsoever, arising
out of or resulting from (i) an "Act of God" and any breach by Customer
of the terms of this Agreement, or (ii) any act or thing done by the
Customer in excess of its authority under this Agreement, or (iii) any
misrepresentation by Customer regarding TIME rates, services,
transmission facilities, or marketing material. In no event shall TIME
be liable to the Customer except for any action or inaction that
constitutes gross negligence or willful misconduct on the part of TIME.
11. TERMINATION
This Agreement shall commence upon the above date and shall remain in
full force and effect for a term of 12 months (365 days) with automatic
renewals, unless terminated thirty (30) days prior to the automatic
renewal. By Customer giving thirty (30) days prior written notice to
TIME, or by TIME, effective upon thirty (30) days written notice to
Customer if it fails to meet the prepayment terms as outlined in
Exhibit A, or if the Customer makes any misrepresentations regarding
TIME rates, services, transmission facilities, or marketing materials.
12. NOTICES
Any notice, request, authorization, consent or other communications
required or permitted to be given to either party pursuant to this
Agreement shall be in writing and shall be deemed given upon delivery
by hand or transmission by facsimile, or by registered or certified
mail, return receipt requested, postage and registry fees prepaid, and
addressed as follows or at such other address as the intended recipient
may have therefore specified in a written notice to sender.
TIME : TIMEWorldcom, Inc.
7895 Cessna Avenue
Gaithersburg, Maryland 20879 USA
Purchaser: Cristina Mosca
Via Chilesotti, 1
36016 Thiene (V1)
C.F. MSCCST63R48L157A
P.I. 02373670245
<PAGE>
13. ASSIGNMENT AND NONDISCLOSURE
Customer shall not assign, disclose, show, display or publicize or use
this Agreement or any part thereof without first receiving TIME's
written consent, which may be withheld at TIME's sole discretion.
However, either party may grant a security interest in the Agreement to
its lenders.
14. APPLICABLE LAW
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof, and supersedes all
prior agreements, arrangements and understandings, oral or written,
with respect to the subject matter. The present contract shall be
regulated, in its formal and substantial aspects, exclusively by
Italian law, which the parties hereto agree to accept.
15. ENTIRE AGREEMENT
Hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
TIMEWorldcom, Inc.
____________________________________
TIMEWorldcom, Inc.
Cristina Mosca
____________________________________
Cristina Mosca
<PAGE>
TIMEWorldcom, INC
Tel.: 301 590 1091 - Facsimile 301 869 3019.
7895 Cessna Avenue, Gaithersburg Maryland 20879
P.O.BOX 82 Washington Grove
Maryland 20880-0082
EURO DEBIT AGREEMENT
THIS AGREEMENT is made and entered into this 1st day of June, 1998, by
and between TIMEWorldcom, Inc., hereinafter called (TIME) a corporation
organized and existing under the laws of the state of Delaware with
offices at 7895 Cessna Avenue, Gaithersburg Maryland, 20879, mailing
address, P.0. BOX 82 Washington Grove Maryland, 20852-0082, and
InterNext Communications, Inc., hereinafter called "Customer" organized
and existing under the laws of Delaware with offices at 3314 South 28th
Street, Alexandria, VA 22302.
WITNESSETH
1. TIME with its "carrier partners" is a telecommunications services
provider.
2. Customer desires to Purchase TIME telecommunications pre-paid
service. Such services may be provided pursuant to TIME "carrier
partners" tariffs as such tariffs may be amended from time to time
(Tariffs).
3. TIME with its "carrier partners" desires to sell to Customer, TIME
telecommunications services for prepaid debit international service.
The parties agree as follows:
1. EXCLUSIVITY.
TIME hereby agrees to sell exclusively to Customer specially designed
prepaid debit platforms which will be designed at the sole expense of
TIME and described in Exhibit A, subject to the terms and conditions
set forth below. Customer agrees to use TIME with its "carrier
partners" as the exclusive provider for the prepaid debit services
required to meet the needs of the Customer on a case by case basis.
The Customer grants TIME the "first right of refusal" on all
Telecommunications Services during the term of this agreement.
2. SERVICES.
TIME will provide its Domestic and International Direct Dial Prepaid
Platform telecommunications services (the "Services") to Customer
pursuant to the applicable tariffs of TIME's "carrier partners" (the
"Tariffs") as may be amended or succeeded from time to time. All of
<PAGE>
the terms and conditions of the Tariffs now or hereafter in effect are
Incorporated in this Agreement. In the event that any provision set
forth in this Agreement conflicts with the terms and conditions of any
of the Tariffs, the provisions set forth in the Tariffs will govern.
3. UNITS OF SERVICE AND PIN NUMBERS
TIME shall sell to Customer PIN numbers (if required) and or units of
telecommunications transmission service ("Units-Minutes"), and or
Printed cards with time, Units-Minutes, ready for consumption (if
required). The sale of Units-Minutes shall be pursuant to the terms
set forth on Exhibit A. Except as provided in paragraph 3. TIME may
during the ramp-up period, upon thirty (30) days prior written notice
to Customer, increase any rate set forth in Exhibit A (Rate
Modification) so as to offset an increase to TIME in the costs of
providing telecommunications services that is caused by changes in the
rules, regulations or operating procedures of any governmental or
regulatory authority without further liability to TIME. Customer shall
be permitted to terminate this agreement during the term without
penalty or further obligation, except for charges incurred up to the
effective date of termination, upon thirty (30) days prior written
notice to TIME in the event of such Rate Modification. No increase in
the rate will be allowed by TIME which is caused by its "carrier
partners" increasing the cost of service to TIME.
4. BUSINESS DOWNTURN
In the event of a business downturn beyond Customers control or a
divestiture of an affiliate of Customer that significantly reduces the
volume of services required by the Customer resulting in the Customer
being unable to meet its revenue and/or volume commitments under this
Agreement (notwithstanding Customer's best efforts to avoid such a
shortfall), TIME and Customer will cooperate in developing a mutually
agreeable alternative proposal that complies with all applicable legal
and regulatory requirements. By way of example and not limitation,
such alternative proposals may include changes in rates, nonrecurring
charges, revenue and/or volume commitments, discounts, and/or the Term.
The Customer must give TIME prior written notice of the conditions it
believes will require the application of this provision.
5. INTERNATIONAL RATES.
Each Unit shall entitle the user holder to one minute of Domestic
Interstate service, or to a minute of International services as
determined by the rates set forth on EXHIBIT B. Notwithstanding the
foregoing, and except as provided in paragraph 3, TIME reserves the
right to change its International rates set forth on EXHIBIT A at the
end of each twelve (12) month period throughout the duration of this
Agreement.
<PAGE>
6. DUTIES OF THE CUSTOMER
In the furtherance of this Agreement, Customer duties include, but are
not limited to:
(a) submit original order of a minimum of 4.4 million Pins in the first
month and ramp to a total contract volume of $240,000,000 by full term
(12 months) , based on the wholesale rate set forth on Exhibit A and
Exhibit B.
(b) submit by fax and FedEx fully executed forms for the PIN's as
provided by TIME.
(c) no orders or activation's shall be binding by TIME until payment is
accepted and received by TIME.
(d) all orders shall contain such terms and conditions as outlined in
this agreement and comply with the tariff.
(e) all "chargebacks", and fees related to "refresh" activity involving
fraud or disputed charges, charged back to TIME by its merchant bank
will be the sole responsibility of the Customer.
7. TIME RIGHTS AND DUTIES.TIME will maintain the purchase price as set
forth in Exhibit A for the term of this agreement except as indicated
in paragraph 3 of this Agreement.TIME will provide the "specialty
platform" design services as outlined in Exhibit A at no charge to the
Customer.
TIME shall be the final authority on the capabilities of the platform
design.
TIME will provide the "specialty platform" design services as outlined
in Exhibit A at no charge to the customer.
TIME shall be the final authority on the capabilities of the platform
design.
TIME agrees to refund the Customer on a case by case basis for 100% of
cost for telecommunications services if Customer is required to refund
its client of record for reasons or causes of actions not covered in
paragraph 8 or 10 of this agreement.
8. PIN NUMBERS.
PIN numbers shall expire 6 (Six) month after the date of activation or
as directed by the Customer. All PIN numbers shall remain inactive
until activated by TIME with prepayment of sums due pursuant to the
terms set forth on Exhibit A. TIME reserves the right to de-activate
any PIN numbers for non-compliance of the prepayment terms as outlined
in Exhibit A.
<PAGE>
9. PERFORMANCE GUARANTEE
Notwithstanding the provisions regarding termination of this Agreement
by Customer prior to completion of the initial Term, Customer shall be
permitted to terminate this Agreement during the Term without penalty
or further obligation, except for charges incurred up to the date of
termination, in the event that quality deficiencies solely caused by
TIME in the provision of telecommunications service hereunder are
demonstrated by Customer to affect adversely and materially Customer's
telecommunications applications (such a termination under this clause
Constituting a "Termination for Cause").
If TIME is unable to provide 4.4 million minutes worth of PINs (for
debit service originating in Europe) within the first ninety (90) days
following execution of this Agreement, customer shall be permitted to
terminate without penalty or further obligation with thirty (30) days
written notice to TIME.
All services and rates provided within this Agreement are for debit
services and are to be provisioned on circuit switched public networks
only. TIME may not substitute any voice compression, voice over IP,
voice over frame relay, voice over Internet, or any other future
compression protocol technology for services outlined in this
Agreement.
10. CUSTOMER IS AN INDEPENDENT RESELLER
This agreement does not constitute an agreement for a partnership or
joint venture between TIME and Customer. Customer is not an agent of
TIME and for no purpose can act as agent of TIME. Customer is an
independent re-seller. All expenses and cost incurred by Customer in
meeting Customers obligations under this Agreement shall be solely
those of the Customer, and TIME shall not be liable for their payment.
Customer can make no commitments with third parties that are binding
upon TIME without the express written consent of TIME, and Customer in
no way shall represent himself as having the power.
11. OWNERSHIP
All customers referred to TIME by Customer shall remain the property of
the Customer outside of their commitment with TIME. If for any reason
the customer is dissatisfied with TIME, Customer has the right to find
another source to fill the specific of customer needs, if TIME is not
able to satisfy the customers concerns in a reasonable amount of time.
<PAGE>
12. INDEMNITY
Customer shall indemnify, hold harmless and defend TIME
from and against all claims, clauses, causes of action, damages,
judgments, settlements, losses, liabilities, obligations, penalties,
charges, costs, payments, and expenses of any kind whatsoever, arising
out of or resulting from (i) an "Act of God" and any breach by Customer
of the terms of this Agreement, or (ii) any act or thing done by the
Customer in excess of its authority under this Agreement, or (iii) any
misrepresentation by Customer regarding TIME rates, services,
transmission facilities, or marketing material. In no event shall TIME
be liable to the Customer except for any action or inaction that
constitutes gross negligence or willful misconduct on the part of TIME.
13. TERMINATION
This Agreement shall commence upon the above date and shall remain in
full force and effect for a term of 12 months (365 days) with automatic
renewals, unless terminated thirty (30) days prior to the automatic
renewal. By Customer giving thirty (30) days prior written notice to
TIME, or by TIME, effective upon the thirty (30) days written notice to
Customer. TIME can terminate this Purchase Agreement effective
immediately if Customer fails to meet the prepayment terms as outlined
in Exhibit A, or if the Customer makes any misrepresentations regarding
TIME rates, services, transmission facilities, or marketing materials.
This Agreement is exclusive to TIME and InterNext as independent
companies.
14. NOTICES
Any notice, request, authorization, consent or other communications
required or permitted to be given to either party pursuant to this
Agreement shall be in writing and shall be deemed given upon delivery
by hand or transmission by facsimile, or by registered or certified
mail, return receipt requested, postage and registry fees prepaid, and
addressed as follows or at such other address as the intended recipient
may have therefore specified in a written notice to sender.
TIME : TIMEWorldcom, Inc.
7895 Cessna Avenue
Gaithersburg, Maryland 20879 USA
Purchaser:InterNext Communications, Inc
3314 South 28th Street, Suite 302
Alexandria, VA 22302
<PAGE>
15. ASSIGNMENT AND NONDISCLOSURE
Customer shall not assign, disclose, show, display or publicize or use
this Agreement or any part thereof without first receiving TIME's
written consent, which may be withheld at TIME's sole discretion.
However, either party may grant a security interest in the Agreement to
its lenders.
16. APPLICABLE LAW
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof, and supersedes all
prior agreements, arrangements and understandings, oral or written,
with respect to the subject matter. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware
without regard to any conflict of law provisions.
17. ENTIRE AGREEMENT
Hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
TIMEWorldcom, Inc.
____________________________________
TIMEWorldcom, Inc.
InterNext Communications, Inc.
____________________________________
InterNext Communications, Inc.
