Sample Business Contracts

Internet Colocation Services Agreement - Terra Networks Interactive Services USA LLC and IDT Corp.

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      This INTERNET COLOCATION SERVICES AGREEMENT (the "Agreement") is made and
entered into as of the 5th day of October, 1999 (the "Effective Date"), by and
between Terra Networks Interactive Services USA, LLC, a Delaware limited
liability company ("TI USA Portal"), and IDT Corporation, a Delaware corporation
("IDT") (each a "Party" and together the "Parties").


      WHEREAS, TI USA PORTAL is in the business of providing certain Internet

      WHEREAS, IDT is in the business of offering Internet services relating to,
among other things, hosting of sites on the World Wide Web portion of the

      WHEREAS, TI USA PORTAL desires to engage IDT, and IDT desires to be
engaged by TI USA PORTAL, to provide such Internet services to TI USA PORTAL on
the terms and subject to the conditions set forth below.

      NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth in this Agreement and such other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Parties hereby agree
as follows:

      1. Provision of Colocation Services and other Obligations of IDT

            1.1 Colocation Services. IDT agrees to provide Colocation Services
to TI USA PORTAL, and, as further described on Exhibit "A," to provide certain
other related services to TI USA PORTAL. As used herein, the term "Colocation
Services" shall mean the hosting of sites on the World Wide Web portion of the
Internet (the "Web Sites") for TI USA PORTAL and the provision of related
services, all as described on Exhibit "A" attached hereto. IDT shall provide the
Colocation Services so that each Web Site is accessible to third parties via the
World Wide Web portion of the Internet as specified herein, and, in all cases,
in conformity with all applicable laws, rules and regulations and the service
levels set forth on Exhibit "A" attached hereto.

            1.2 IDT Support Resources. IDT shall provide, configure, install,
operate and maintain all information and technology resources needed to provide
the Colocation Services. These resources are described on Exhibit "B" attached

      2. Fees and Payment. In consideration of the provision of the Colocation
Services hereunder, TI USA PORTAL shall pay to IDT service fees in the amounts,
and pursuant to the schedules, terms and conditions, set forth on Exhibit "C"
hereto. These fees shall at all times be the lesser of (a) the lowest market
price for comparable services
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provided by reputable, financially sound Colocation service providers, and (b)
the lowest price charged by IDT for comparable services to other customers.

      3. Insurance. IDT, at its sole cost and expense, shall procure and
maintain a policy insuring itself against liability for errors and omissions
insurance in the amount of at least $5,000,000 per year, subject to an annual
deductible of no more than $50,000, which shall remain in effect during the term
of this Agreement. Promptly following execution of this Agreement, IDT shall
furnish to TI USA PORTAL a certificate of insurance and any other relevant
documentation as evidence of said insurance policy. TI USA PORTAL shall be named
as an "additional insured" under such policy.

      4. Activity Reports. IDT shall provide daily, weekly and monthly service
level activity reports to TI USA PORTAL, in such forms and at such times as are
reasonably agreed upon by TI USA PORTAL and IDT as necessary, measuring IDT's
compliance with the service level criteria set forth in Exhibit A above, at a
minimum providing comparable information as that contained in IDT's own similar
reports and which are reasonably consistent with any industry standards for such

      5. Proprietary Information. During the term of this Agreement and for a
period of two (2) years thereafter, each of the Parties shall, and shall cause
its respective officers, directors, affiliates, assigns, employees, auditors,
regulators, attorneys, financial advisors and other agents to, hold in
confidence, and use only for the purposes of this Agreement, any and all
Proprietary Information of one Party which is disclosed, made available or
otherwise obtained by the other. The term "Proprietary Information" shall mean
all information which one Party, directly or indirectly, obtains from the other
Party as a result of this Agreement, other than information (a) that already is
in the public domain through no wrongful act of the other party; (b) that, after
disclosure hereunder, enters the public domain other than by breach of this
Agreement; information that, prior to disclosure, hereunder, was already in the
recipient's possession, either without limitation on disclosure to others or
subsequently becoming free of such limitation; (d) obtained by the recipient
from a third party having an independent right to disclose this information; and
(e) that is available through discovery by independent research without use of
or access to the Proprietary Information acquired from the other party. Each
Party acknowledges and agrees that in the event of a breach or threatened breach
of any of this Paragraph, the non-breaching Party will have no adequate remedy
in damages and, accordingly, shall be entitled to seek injunctive relief;
provided, however, no specification of a particular legal or equitable remedy
shall be construed as a waiver, prohibition or limitation of any legal or
equitable remedies in the event of a breach hereof.

<PAGE>   3

      6. IDT Representations and Warranties. TI USA PORTAL and IDT represent and
warrant to each other that (i) each Party has full power and authority and has
taken all action necessary to authorize, execute and deliver this Agreement and
any and all other documents executed or delivered by each party in connection
with this Agreement, and to fulfill its obligations under, and to complete the
transactions contemplated by, this Agreement and such documents, and (ii) this
Agreement constitutes a legal, valid and binding obligation upon each of the

      7. Term and Termination.

      7.1 This Agreement shall commence as of the Effective Date and shall
continue in full force and effect for an initial term of eighteen (18) months
(the "Term") unless terminated earlier in accordance with the termination
provisions hereunder. Upon at least thirty (30) days' notice prior to the
expiration of the Term, TI USA PORTAL may elect to renew this Agreement for an
additional one (1) year term on the same terms and conditions, subject to making
mutually agreed upon adjustments to pricing and other terms necessary to reflect
changes in market conditions. Thereafter, TI USA PORTAL may elect to renew this
Agreement on terms (including service fees) to be mutually agreed upon by the
Parties. Termination of this Agreement at any time shall not affect any rights,
obligations or interests arising prior to the effective date of termination and
which, to give effect to their meaning, must continue in accordance with their

      7.2 If there is any material breach of this Agreement by one Party, the
other Party may (reserving cumulatively all other remedies and rights under this
Agreement and in law and in equity) terminate this Agreement, in whole or in
part, by giving thirty (30) days' written notice; provided, however, that such
termination shall not be effective if the breach has been cured prior to the
expiration of said thirty (30) days.

      7.3 Notwithstanding the foregoing, IDT's failure to comply with the
Service levels set forth on Exhibit "A" to this Agreement shall constitute a
material breach of this Agreement whereupon TI USA PORTAL may (reserving
cumulatively all other remedies and rights under this Agreement and in law and
in equity) terminate this Agreement, in whole or in part, by giving IDT three
(3) days' written notice; provided, however, that such termination shall not be
effective if the breach has been cured prior to the expiration of said three (3)

      7.4 Either Party may immediately terminate this Agreement in the event the
other Party becomes bankrupt or insolvent, within the meaning of the United
States Bankruptcy Code or any substantial and relevant portion of its assets are
included in any arrangement with its creditors, an order to windup or submission
to control by a receiver, assignee or trustee for the purpose of preserving the
assets, whether by the voluntary act of the affected party or otherwise.

      7.5 TI USA PORTAL shall have the right upon termination or expiration of
this Agreement, to transfer the performance of the Colocation Services to
another service

<PAGE>   4

provider, IDT shall, at TI USA PORTAL's cost on a time and materials basis,
provide reasonable assistance with any such transfer.

      8. Indemnification.

      8.1 IDT agrees to defend and hold TI USA PORTAL, its parent, affiliates,
and their respective officers, directors, employees and agents harmless from and
against any and all losses, damages, costs and expenses (including reasonable
attorneys' fees and court costs) (collectively, "Losses") suffered or incurred
by TI USA PORTAL based upon or in connection with a material breach by IDT of
its obligations hereunder.

      8.2 TI USA PORTAL agrees to defend and hold IDT, its parent, affiliates
and their respective officers, directors, employees and agents harmless from and
against any and all losses suffered or incurred by IDT arising out of a breach
of TI USA PORTAL's obligations hereunder or any failure of TI USA PORTAL's
equipment housed in the Colocation space at IDT's facilities or any software
installed thereon other than any such failure arising out of a breach by IDT of
its obligations hereunder.

      8.3 The provisions of this Section 8 shall survive the expiration or
termination of this Agreement.

      9. Inspection/Audit Rights. During the Term and for a period of one
hundred eighty (180) days thereafter, upon at least five (5) business days
notice to IDT, IDT shall provide TI USA PORTAL or its external auditors with
access to IDT's facilities during normal business hours for the purpose of
conducting an audit of IDT's operations as it deems necessary to insure that IDT
is complying with its obligations hereunder, including, without limitations,
service level obligations and payment obligations.

      10. Y2K Compliance. IDT represents and warrants to TI USA PORTAL that any
and all hardware, software and firmware to be utilized by IDT in the performance
of its obligations under this Agreement, including those used by it to provide
the Colocation Services, will be "Year 2000 Compliant". "Year 2000 Compliant"
means that such hardware, software and data, without causing failures in
software, firmware or hardware and without leading to invalid or incorrect
results during operation prior to, during and after January 1, 2000 A.D., will:
(i) operate without error relating to the date data, (ii) properly use,
recognize and indicate dates from and after January 1, 2000 as both input and
output, including without limitation, in any calculation of dates or length of
time in the same century or in multiple centuries; and (iii) conform to proper
leap year calculations from and after January 1, 2000.

      11. General.

      11.1 Entire Agreement. This Agreement, together with the Exhibits and
other documents and/or attachments specifically referred to herein, constitutes
the entire

<PAGE>   5

agreement between the Parties and supersedes any prior or inconsistent
agreements, negotiations, representations and promises, written or oral,
regarding the subject matter hereunder.

      11.2 Assignment/Sub-contractors. IDT may not assign, transfer or
subcontract any of its rights and/or obligations hereunder other than to an
affiliate without the written consent of TI USA PORTAL and any attempt to do so
shall be void. IDT shall remain fully liable hereunder to the extent any
permitted subcontractor fails or negligently performs any services contemplated
hereunder and for any acts or omissions of any subcontractor and its personnel.

      11.3 Notices. All notices shall be in writing and either personally
delivered or sent proper postage prepaid by certified or registered mail or
overnight express service, with return receipt requested or by confirmed
electronic means with acknowledgment of receipt by the other Party to the
Parties as follows:

If to TI USA PORTAL:                         If to IDT:

Terra Networks Interactive Services          IDT Corporation
USA, LLC                                     190 Main Street
1221 Brickell Avenue
Miami, Florida 33131                         Hackensack, New Jersey 07601

Attn:                                        Attn: Hal Brecher

If to TI USA ISP: Terra Networks Access      If to IDT:      IDT CORPORATION
                  Services USA, LLC
                  1221 Brickell Avenue                       190 Main Street
                  Miami, Florida 33131                       Hackensack, N.J. 07601
Attn:                                        Attn:           Hal Brecher
Fax:                                         Fax:            (201) 928-885

With a copy to:   Greenberg Traurig, P.A.    With a copy to: Morrison & Foerster LLP
                  1221 Brickell Avenue                       1290 Avenue of the Americas
                  Miami, Florida 33131                       New York, New York
                  Attn: Patricia Menendez    Attn:           Raphael Grunfeld
                  Fax: (203) 579-0717        Fax:            (212) 468-7900

Notices sent shall be deemed received when personally delivered or when the
return receipt is signed or when acknowledgment of receipt is transmitted.
Either Party may change the above address and/or addressees at any time upon
notice to the other.

      11.4 Independent Contractors. Each Party is acting as an independent
contractor. Each Party's personnel are not employees or agents of the other
Party's for

<PAGE>   6

federal, state or other taxes or any other purposes whatsoever, and are not
entitled to compensation, employee benefits or other incidents of employment
from the other Party. Each Party assumes sole and full responsibility for the
acts and omissions of its own employees, representatives and agents. Personnel
of one Party have no authority to make commitments or enter into contracts on
behalf of, bind or otherwise obligate any other party in any manner whatsoever.
Except for the specific obligations set forth in this Agreement, nothing
hereunder shall be deemed to constitute, create, give effect to or otherwise
recognize a joint venture, partnership or business entity of any kind, nor shall
anything in this Agreement be deemed to constitute either Party the agent or
authorized representative of the other with respect to the subject matter of
this Agreement. Except for payments mutually agreed upon and specifically
described herein or otherwise mutually agreed upon in writing, nothing shall be
construed as providing for the sharing of profits or losses arising out of the
efforts of either or both of the Parties.

      11.5 Governing Law. This Agreement shall be governed by, construed under,
and enforced in accordance with, the laws of the State of New York, without
respect to its conflict of laws principles. Any legal action of whatever nature
by or against the Parties arising out of or related in any respect to the
Agreement shall be brought solely to that jurisdiction.

      11.6 Arbitration. All claims, disputes and other matters in question
arising out of, or relating to, this Agreement shall be submitted to arbitration
in accordance with the Rules of the American Arbitration Association then
pertaining, unless the parties mutually agree otherwise, and pursuant to the
following procedures:

a. Notice of the demand for arbitration shall be filed in writing with the other
Party to this Agreement and with the American Arbitration Association. Three
arbitrators shall be chosen. Each Party shall select one arbitrator, and the
American Arbitration Association shall select the third arbitrator. A
determination by a majority of the panel shall be binding on the Parties.

b. Reasonable discovery, as determined by the sole discretion of the
arbitrators, shall be allowed.

c. All arbitration proceedings shall be held in Miami, Florida.

d. The Parties agree that the issues being resolved hereunder shall be
determined by arbitration pursuant to the provisions set forth herein and
pursuant to the applicable rules of the American Arbitration Association then in
effect insofar as such rules are not inconsistent with the provisions set forth

e. The costs and fees of the arbitration shall be allocated by the arbitrators.
The party or parties prevailing in the arbitration will be entitled, in addition
to such other relief as may be granted, to reasonable attorneys' fees, if any,
as shall be awarded by the arbitrators.

<PAGE>   7

f. The award rendered by the arbitrators shall be final and in writing, and
judgment may be entered in accordance with applicable law and in any court
having jurisdiction thereof.

      11.7 Waiver. No terms or provisions of this Agreement shall be deemed
waived and no breach excused unless such waiver or consent is in writing and
signed by the party claimed to have waived or consented.

      11.8 Amendments. No amendment, change, waiver, or discharge hereof shall
be valid unless in writing and signed by both Parties.

      11.9 Severability. Should any provision of this Agreement be held to be
void, invalid or inoperative, the remaining provisions of this Agreement shall
not be affected and shall continue in effect and the invalid provision shall be
deemed modified to the least degree necessary to remedy such invalidity.

      11.10 Counterparts. This Agreement may be executed in several
counterparts, all of which taken together shall constitute the entire agreement
between the Parties hereto.

      11.11 Survival. Any term which must survive, in order to give effect to
its meaning, shall survive termination of this Agreement.

      IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be
executed as of the day and year first above written.

Terra Networks Interactive Services                 IDT Corporation
             USA, LLC

By:    /s/ Juan Perea                        By:    /s/ Howard Jones
       ------------------------                     ------------------------

Name:  JUAN PEREA                            Name:  Howard Jones
       ------------------------                     ------------------------
           [Type or Print]                              [Type or Print]

Title: CEO                                   Title: CEO
       ------------------------                     ------------------------

Date:  10/6/99                               Date:  10/5/99
       ------------------------                     ------------------------

<PAGE>   8

                                    EXHIBIT A

                               COLOCATION SERVICES

I. Colocation Services. IDT will provide the following services to TI USA

      a. Colocation of TI USA PORTAL Web Site;

      b. ensure that each TI USA PORTAL Web Site is accessible to third parties
via the World Wide Web portion of the Internet;

      c. domain name registration;

      d. private peering Internet connectivity;

      e. redundant backbone connectivity;

      f. physical layout consulting and support services;

      g. a network operation center that responds to calls from TI USA PORTAL on
         a 24/7 basis;

      h. ability of TI USA PORTAL to view, on a real-time basis, the status of
         the system and activity statistics;

      i. ability of TI USA PORTAL to view, on a real-time basis, change
         management and trouble-ticketing; and

      j. access to the system from a browser, with the appropriate security
         measures as agreed upon by the Parties.

II. Colocation Space. At its sole cost and expense, and within 60 days of the
Effective Date, IDT shall provide Colocation space at IDT's facilities
sufficient to provide the Colocation Services in accordance with the terms and
provisions of the Agreement. Without limiting the foregoing, IDT shall provide
the following in respect of the Colocation space.

      a. Racks. IDT shall provide all of the equipment racks needed to hold the
equipment utilized to provide the hosting services, including, without
limitation, at least thirty-five (35) relay racks with cable management equipped
for at least sixty-five (65) server level computers. IDT shall be responsible
for the design and assembly of the racks. In any event, the racks shall meet the
spatial dimensions and engineering specifications (e.g., power cooling and
insulation) established by TI USA PORTAL from time to time. Without limiting the
foregoing, IDT will provide to TI USA PORTAL at least seven (7) racks within ten
(10) days of the Effective Date, and an additional five (5)
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racks within the following eleven (11) days.

      b. Security. IDT shall maintain at the Colocation facilities safety and
security controls and procedures that are at least equal to, and as rigorous as,
these commonly maintained in the industry for similar facilities and services.
The safety and security controls shall include, without limitation, requiring
access controls and other controls ensuring the integrity, confidentiality and
availability of all data and information stored and transmitted through such
facilities. IDT shall immediately notify in writing TI USA PORTAL of any
security breaches or other potential security exposures relating to the
provision of Colocation Services by IDT or data relating to TI USA PORTAL.

      c. Other Services Relating to Colocation Space. IDT will also provide the
following for the Colocation facilities: (i) at least ten (10) tons of air
conditioning; (ii) at least 200 amps of electrical power; (iii) at least 60
minutes of battery back-up providing at least 125 KVA of power; (iv) diesel
generator back-up providing at least 125 KVA of power; (v) raised data room
flooring; (vi) a pre-action fire sprinkler system that complies with all local
codes, laws and regulations; and (vii) suitable work space for at least 20
persons for 30 days following the Effective Date, and thereafter suitable work
space for at least five persons. All power and air-conditioning provided by IDT
will be monitored by IDT in accordance with industry standards, 24 hours a day,
7 days a week.

III. Service Guarantees. IDT will provide a 99.8% IP connectivity to the
Internet within IDT's network. TI USA PORTAL will receive a one days credit of
bandwidth, cabinet space, load balancing, back-up and access for each five
continuous minutes of unplanned interruption to IP connectivity. IDT will also
provide 99.8% web server availability and 99.8% database availability within
IDT's network on a 24/7 basis. Notwithstanding the foregoing, IDT will allow for
a maximum aggregate of two (2) hours of interruption to IP connectivity during
each fifty-two (52) week period for maintenance purposes.

IV. Service Levels. IDT and TI USA PORTAL will expedite an agreement regarding
service levels for the Colocation services described herein.
<PAGE>   10

                                   EXHIBIT "B"

                              IDT SUPPORT RESOURCES

      Backbone; DS3 running ATM. IDT shall provide a DS3 Internet port
connection providing Internet connectivity from TI USA PORTAL's switch to IDT's
collocated Internet equipment and facilities. The DS3 Internet port connection
shall be capable initially to provide a connection bandwidth equal to two (6)
T-1s (approximately 9 Mbps), expandable to full DS3 connection bandwidth
commensurate with increased traffic demand. Additionally, IDT will provide a
connection bandwidth equal to two (2) T-1s between the ISP at Hackensack and
Piscataway, and four (4) T-1s between Piscataway and Andover, Massachusetts.
These connections will be provided within twenty-eight (28) days after the
Effective Date (forty-two days for the connection between Piscataway and
Andover), unless delays are caused by third parties.

      Peering: In order to maintain utilization under 60%, by routing traffic
more efficiently.

      Servers: Sun/Solaris, Compaq/Win NT, deploying multiple software packages
(containing alarm systems) monitoring the network (bandwidth, peering,
connectivity, CPU load, hard disk usage, software, etc.). Network monitoring and
the application services shall be 24/7 utilizing SNMP Polling and Cabletron
Spectrum for routers and circuits. IDT shall, to the extent of available
communication methods, notify a representative of TI USA PORTAL previously
identified in writing to IDT of any system failure within fifteen (15) minutes
in a manner to be agreed upon by the Parties, provided such TI USA PORTAL
representative is, at the time of such system failure, at the address and/or
telephone number previously provided to IDT.

      Peering Links: Private transit links with major national backbone
providers, including GTE, UUNET and others.

      Data Back-up Services: IDT will provide TI USA PORTAL with data backup
services at IDT's sole cost, operational within fourteen (14) days of the
Effective Date, to backup information related to TI USA PORTAL's operations or
necessary to provide the Colocation Services.

      Server for Terminal Management: Terminal server for administration of the
other servers comprising the TI USA PORTAL Web Site.

      Additional Services: All other hardware, software, telecommunication
services and equipment necessary to implement the Services required to be
provided by IDT by the Agreement with the components of IDT's current network.
Any additional Services to be provided by IDT to TI USA PORTAL that require new
components to IDT's
<PAGE>   11

network will be provided by IDT on the economic terms and conditions to be
agreed upon by the parties in good faith.
<PAGE>   12

                                   EXHIBIT "C"

                         PAYMENT SCHEDULE AND CONDITIONS

      IDT will provide a payment schedule to TI USA PORTAL within two (2) days
after the Effective Date, and TI USA PORTAL will notify IDT within one (1) day
of receipt of the payment schedule as to whether TI USA PORTAL accepts the
payment schedule and the services to be provided by IDT under the Colocation
Agreement. If TI USA PORTAL does not accept such payment schedule and services,
the Colocation Agreement shall automatically terminate and be of no further
force and effect, without liability of either of the parties thereto.