RESIDENTIAL DISTRIBUTOR PROGRAM AGREEMENT
It is agreed on this 6 day of March, 1998 by and between LCI
International Telecom Corp. (hereinafter "LCI"), a Delaware Corporation with
its principal place of business at 0000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000 and
YouNetwork, Corporation (hereinafter "Representative"), whose address is
00 Xxxxxx Xxxx, Xxxxx 0X Xxx Xxxx, Xxx Xxxx 00000.
1. GRANT OF AUTHORITY
a.) LCI appoints Representative as a non-exclusive representative in
the territory set forth in Exhibit A to promote the sale of and
solicit orders for the services defined in Exhibit A ("Services")' all
subject to the terms and conditions of this Agreement. Representative
agrees to use its best efforts in selling LCI's services to Customers,
including having each Customer sign or electronically approve a Letter
Of Agency ("LOA") substantially in the form set forth in Exhibit C of
this Agreement. Representative agrees to provide a copy of Exhibit C
and other documentation regarding LCI to Customers. LCI reserves the
right to add to or delete from the Services as may be required from
time to time. Such additions or deletions will be specified in writing
by LCI. Tariffs relating to the Services and the LOA may be changed by
LCI at its sole discretion. Representative further agrees to secure
and use at its own expense within 30 days, for the purpose of
communication and electronic download of LOAs to LCI, the equipment or
its equivalent as outlined in Exhibit E.
b.) Notwithstanding the foregoing, Representative will only use those
means of marketing and selling LCI services, provided under this
Agreement, which are mutually acceptable to LCI and Representative and
agreed to in writing. Accordingly, Representative agrees to submit a
sales and marketing plan within thirty (30) days of execution of this
Agreement for approval by LCI. Representative agrees to submit any
changes in the sales and marketing plan to LCI for written approval,
prior to any implementation by Representative. Solicitation by direct
mail, by telemarketing, sweepstakes, contests, or drawings is not
permitted by Representative, its employees, agents, or contractors
under this Agreement without prior written approval by LCI.
c.) Representative shall send a verification by email to each customer
that electronically agrees to switch to LCI via Representative's
website.
2. COMMISSION
Representative shall receive commissions in accordance with the
commission structure set forth in Exhibit B (attached), provided
however, no commission shall be paid on existing LCI account
conversions or new accounts that call LCI directly to subscribe to LCI
services (other than inbound programs previously approved by LCI in
writing). usly approved by LCI in writing).
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3. RELATIONSHIP
The parties agree and understand that Representative is an independent
contractor and there is no employer-employee relationship, joint
venture or agency created hereby. During the term of this Agreement
and for twenty-four (24) months following the termination of this
Agreement, Representative shall not, directly or indirectly, convert
any LCI account to any other interlata telecommunications carrier.
Representative shall not enter into any oral or written agreement with
a competitor of LCI similar to this Agreement nor shall
Representative, directly or indirectly, market, solicit or sell
services of a competitor of LCI. Representative has no authority to act
for, or on behalf of LCI. Representative is not authorized to incur
any obligation on behalf of LCI or to bind LCI in any manner
whatsoever. Representative will not make any representations of rates,
terms or conditions of the Services that conflict with the applicable
tariffs or information provided by LCI. LCI shall incur no obligation
to employees, contractors or other parties utilized by Representative
in selling services to customers for LCI. Such individuals shall at all
times remain employees, agents or contractors of Representative.
Representative is responsible for all expenses and obligations
incurred by it as a result of its efforts to solicit customers for
LCI. Representative shall be responsible for payment of all taxes due
as a result of payments made to Representative by LCI.
4. CUSTOMER SERVICE
a.) Representative shall not provide customer service to any customers
solicited by Representative, including billing, collections or repair
service. Customers attracted by Representative are customers of LCI
and shall remain customers of LCI after termination of this Agreement.
b.) LCI shall provide initial training to a limited number of
Representative's employees, staff and agents with the intent that said
employees, staff and agents will train the remainder of the employees,
staff and agents affiliated with Representative and all other training
and support shall be at Representative's expense unless otherwise
agreed in writing by the parties hereto. The number of persons to be
trained by LCI as well as date and location of training shall be upon
mutual agreement of parties. LCI, at its sole discretion, reserves the
right to charge Representative for LCI providing training or support
to employees, staff and agents if any of the same contact LCI directly
to request product information, sales support, training, account
status, commission information or other related matters. LCI may
charge Representative for such support at a rate of $45.00 per hour,
billed to Representative. LCI will notify Representative, in writing,
prior to the implementation of such billing. LCI will provide to the
Representative, the name, telephone number, and nature of the request
of employee, agent, or contractor for which any charge for the
aforementioned support is incurred by the Representative.
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5. PRODUCT LITERATURE AND MARKETING
a.) LCI agrees to assist Representative in designing a master
subscription form (LOA) for printing, to include specific language
required for authorizing the change in a customer's Primary
Interexchange Carrier (PIC) to LCI. Other sales materials may also be
developed by and purchased from LCI by Representative at prices
normally charged to LCI's residential distributors, representatives,
and contractors. Representative, the Representative's agents,
contractors or franchises shall not develop or use any other product
literature other than that provided by LCI without the prior written
consent of LCI. At least fifteen (15) days prior to any publication,
Representative shall submit to LCI for approval, all materials to be
used in advertising or promoting LCI services.
6. ORDER PROCESSING, BILLING AND COLLECTION
a.) LCI shall have the sole right to accept or reject all orders, to
fix the prices of the Services, the terms and conditions of the
Service or other adjustments and to discontinue offering or selling
any service, without liability to Representative. Representative
agrees that all orders submitted to LCI are subject to verification
and approval by LCI, at its sole discretion.
b.) Representative shall obtain a signed or electronically authorized
PIC authorization (LOA), in a format approved by LCI, for each
customer sold hereunder. If Representative submits service order
information electronically to LCI then upon an oral or written request
by LCI, Representative shall produce a copy of the LOA within
forty-eight (48) hours for the customer telephone number requested. If
Representative does not comply with the request for LOA, LCI reserves
the right not to accept all additional service order information until
Representative complies.
c.) Representative will safeguard against the submission of invalid
PIC authorizations (LOAs). If LCI receives invalid LOAs totaling more
than two percent (2%) of the total LOAs submitted by Representative in
any month, then LCI may suspend accepting LOAs and/or service order
information or terminate this Agreement immediately.
d.) In the event a local telephone company (LEC) or any regulatory
entity assesses LCI any charges for improper or inadequate PIC
authorizations relating to LCI services ordered through
Representative, Representative shall promptly reimburse LCI for all
LEC or regulatory charges, plus an LCI management fee of twenty-five
dollars ($25.00) per customer telephone number ordered through
Representative that is deemed to lack proper PIC authorization. In
addition, LCI shall chargeback to Representative all Installation
Commissions and Usage Commissions and any other payments previously
made to any other payments previously made to Representative in
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connection with the sale with the improper or inadequate PIC
authorization. Payment for said charges may be withheld from payable
commissions.
e.) Upon the request of LCI, Representative will provide to LCI or the
LEC, at Representative's expense, any documentation required by the
LEC regarding PIC selections or authorizations for customers sold
hereunder. In addition, Representative shall promptly and in good
faith cooperate with LCI and all LEC's in attempting to resolve all
PIC selection and authorization disputes.
f) Representative shall provide, at Representative's cost, a copy of
"LCI's POLICIES AND PROCEDURES REGARDING SLAMMING PREVENTION"
including an "Acknowledgment" form as set forth in Exhibit D, to all
employees, agents, contractors, or independent distributors involved
in the selling of LCI services. Representative shall have the
employee, agent, contractor, or independent distributor review the
aforementioned policy and return to the Representative a signed
"Acknowledgment" form, indicating they understand and will comply
with the LCI policy. Representative further agrees to produce a copy
of the signed "Acknowledgment" form within forty-eight (48) hours,
upon LCI's request, for any employee, agent, contractor, or
independent distributor. If Representative does not comply with the
request for providing a signed "Acknowledgment" form, then LCI may
suspend accepting LOAs hereunder and/or service order information or
terminate this Agreement immediately.
7. CONFIDENTIALITY
All information disclosed by either party to the other party pursuant
to this Agreement, other than such information as may be generally
available to the public or the industry, is and will be disclosed to
it in confidence solely for its use in the conduct of its business.
Each party agrees to keep such information secret and confidential
indefinitely and not to disclose it to any other person or use it
during the term of this Agreement or after its termination except in
carrying out its obligations hereunder or in response to obligations
imposed by tariff or order of a court or regulatory body. Neither
party shall disclose the terms and conditions of this Agreement to any
person or entity without the prior written consent of the other party.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS
Representative represents, warrants and covenants to LCI that as of
the date of this Agreement and continuing for the term of this
Agreement that:
a.) Representative is a (check one):
(x) Corporation
( ) Partnership
( ) Sole Proprietorship
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duly organized, validly existing and in good standing under the laws
of New York State, with a Federal EIN of 13-13990305 and is qualified
to do business in the state of New York ______________ and has full
and unrestricted power and authority to execute and perform under
this Ageement.
b.) Representative has obtained all licenses, permits and other
authorizations necessary to perform its obligations under this
Agreement and shall maintain same, as required, in full force and
effect during the term of this Agreement. Representative shall comply
with all applicable tariffs and orders of judicial and regulatory
bodies and all local, state and federal laws.
c.) Representative shall not participate in any pyramid or multilevel
marketing system in conjunction with any person who has an agreement
with LCI. Representative shall 1) appoint a single point of contact for
LCI regarding all matters pertaining to this Agreement, 2) commit no
act which would reflect unfavorably upon LCI.
d.) Representative shall not solicit any existing LCI account not
originally sold by Representative, for the purposes of selling,
upgrading or converting such account to LCI service. Representative
shall not solicit any existing LCI account for the purposes of
converting such LCI account to a competitor of LCI.
e.) Representative Rather realizes that LCI may be selling and
marketing its Affinity Program to a variety of organizations.
Representative agrees to identify to LCI all organizations it solicits
or will solicit pursuant to this Agreement and agrees to not knowingly
sell and/or market any similar affinity program to organizations who
have a relationship with LCI or to organizations who have received
verbal or written proposals from LCI regarding its "All America Plan"
Affinity Program.
f.) Representative hereby represents and warrants that Representative
is not subject to any consent decree, judgment, injunction,
restraining order, settlement agreement, or agreement or order similar
in nature relating to the conduct of its business.
g.) In addition to its obligations under this Section 8 of this
Agreement, Representative hereby covenants and agrees that during the
term of this Agreement that it will notify LCI in writing within three
(3) business days of:
i.) Representative becoming aware of any investigation or
threatened investigation of Representative's sales or
marketing activities by any federal, state, or local
governmental body or agency, or
ii.) Representative becoming subject to or entering into any
consent decree, judgment, injunction, restraining order,
settlement agreement or agreement or order relating to the
conduct of its business.
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h.) Notwithstanding anything in the Agreement to the contrary, it
shall be a material breach of the Agreement, without regard to any
cure rights hereof or otherwise, in the event Representative breaches
any representation or warranty hereunder, or if Contractor breaches
any obligations under Section 8 of the Agreement.
i.) LCI may, at its sole discretion, exercised in a commercially
reasonable manner, suspend the acceptance of orders from
Representative in any state where there is an investigation, or
threatened investigation or decree as described in Section 8 following
the receipt of any notice issued by Representative pursuant to
Section 8. or if no notice is sent following LCI becoming aware of
any such investigation or threatened investigation or decree.
LCI, at its sole discretion, exercised in a commercially reasonable
manner, will determine if any order suspensions will be lifted.
9. INSURANCE
Representative shall secure and maintain Worker's Compensation
Comprehensive General Liability and Automobile Insurance sufficient
amounts to comply with law and to cover its respective obligations
under this Agreement. Upon request, each party shall furnish insurance
certificates as evidence of such coverage.
10. TRADEMARKS AND TRADE NAMES
a.) LCI hereby grants to Representative a non-exclusive,
non-transferable, royalty-free license to use during the term of this
Agreement, in the Territory, LCI's trademarks "LCI", "LCI Authorized
Distributor" and "LCI International" (the "Marks") in connection with
Representative's marketing and sale of the Services. Representative
agrees to state in appropriate places on all of Representative's
products of marketing tools or devices using the Marks that the marks
are trademarks of LCI, and agrees to include the symbol (Tm) or (R) as
appropriate. LCI grants no trademark or service xxxx rights other than
expressly granted hereunder, and Representative acknowledges that LCI
claims exclusive ownership of the Marks. Representative agrees not to
take any action inconsistent with such claim of ownership by LCI.
Representative shall not adopt, use or attempt to register any
trademarks or trade names that are confusingly similar to the marks in
the field of telecommunications or computer equipment or software or
in such a way as to create combination marks. LCI may terminate, in
whole or in part, Representative's license to use the Marks if, in
LCI's reasonable discretion, Representative's use of the Marks does
not conform to LCI's standards for such usage as provided to
Representative in writing, and provided that such non-conforming use
is not cured within thirty (30) days after the Representative receives
written notice that such use does not conform to LCI's standards.
11. TERM OF AGREEMENT AND TERMINATION
a.) The initial term of this Agreement shall be three (3) years, and
the Agreement shall be renewed thereafter automatically on a
year-to-year basis, unless sooner terminated as hereinafter provided,
subject to and upon the terms and conditions herein specified. Either
party may terminate this Agreement at any time during a renewal term
upon giving the other party thirty (30) days prior written notice.
b.) LCI may cancel this Agreement upon written notice to
Representative in the event of:
i.) Representative's failure to attain the monthly Revenue
volume commitment level specified in Exhibit B.
ii.) Breach of any provision of this Agreement by
Representative, or if Representative defaults, fails to
perform its obligations or participates or engages in any
activity relating to fraud against LCI.
iii.) Insolvency, bankruptcy, receivership or dissolution of
Representative.
iv.) Representative's assignment of the Agreement without LCI's
prior written consent or any significant change in
Representative's ownership or management without LCI's
prior written consent.
No commission shall be payable following any termination pursuant to
this Section 11.B.Ii.), iii.), or iv.).
All notices under this Agreement, whether addressed to LCI or
Representative, shall be sent by Certified Mail, Return Receipt
Requested.
If to LCI: LCI International Telecom Corp.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
ATTN: General Counsel
If to Representative: YouNetwork Corporation
00 Xxxxxx Xxxx
Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
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Fax 000 000 0000
ATTN: Xxxx Xxxxxx President
12. INDEMNIFICATION
Each party shall indemnify, defend and hold the other party (and all
officers, directors, employees, agents and affiliates thereof)
harmless from and against any and all claims, demands, actions,
losses, damages, assessments, charges, liabilities, costs and expenses
(including, without limitation, interest, penalties, and attorney's
fees and disbursements) which may at any time be suffered or incurred
by, or be asserted against, any or all of them, directly or
indirectly, on account of or in connection with:
a.) The indemnifying party's default under any provision herein,
breach of any warranty or representation herein, or failure in any way
to perform any obligation hereunder; or
b.) Bodily injury or damage to property (including death) to any
person (including, without limitation, any employee of either party
and any third person), and any damage to or loss of use of any
property, arising out of or in any way relating to the services or
pursuant, directly or indirectly, to this Agreement.
Each party shall hold harmless and indemnify the other from and
against any claim, cause of action, judgment, liability or expense
relating to or arising out of the acts or omissions of the
indemnifying party's employees, contractors and agents.
13. LIABILITY
In no event shall either party be liable for special, indirect,
incidental, or consequential damages, including loss of profits,
arising from the relationship or the conduct of business contemplated
herein. Without limiting the previous sentence, in no event shall
LCI's liability in connection with this Agreement exceed one month's
average commission paid to Representative.
14. MISCELLANEOUS
Representative shall not assign this Agreement or any interest therein
without LCI's prior written consent. The terms of this Agreement shall
be governed by and construed in accordance with the laws of New York.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
Provisions of this Agreement identified by the context to survive the
termination or expiration of this Agreement shall so survive. This
Agreement (including any Exhibits hereto) constitutes the entire
Agreement between the parties hereto with respect to the subject
matter hereof, and it supersedes all prior oral or written agreements,
commitments or understandings, with respect to the matters provided
for herein.
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15. SECURITY
Representative acknowledges that the advance described in Exhibit B
shall be used to develop certain software to assist Representative in
connection with performing its obligations hereunder ("Software").
Representative shall promptly disclose to LCI all material (including
the Software itself related to documentation, reports, programs,
source code, manuals, updates, flow charts, tapes, card decks,
listings and any other programming materials relating to such
Software, updates and improvements (and all of the foregoing shall be
included in the term "Software"). The parties agree that all
copyrightable material related to such Software is a work made for
hire, that all portions of the Software created or acquired by
Representative including all copyrights, any extension or renewals,
and all related work, shall be the exclusive property of LCI, and that
LCI shall have the right, at its own expense, to obtain and to hold in
its own name copyrights, registrations, patents, or such other
protection as may be appropriate to said Software. Representative
warrants and shall provide LCI and its assigns the full, sole and
continuing right (without any payments or liabilities to any person)
to use the Software and to publish, perform, reproduce and distribute
throughout the world any or all portions of the Software, either as a
complete unit or in segments, in any way LCI sees fit and for any
purpose whatsoever. Notwithstanding the previous two sentences, as
long as Representative is not in default of any obligation hereunder,
Representative shall have an exclusive license to use the Software for
its business and LCI shall not use the Software in any way.
Representative shall insert a proper statutory copyright notice at an
appropriate location on copyrightable material, and on all portions
and on all related items which may be subject to copyright protection,
which copyright notice shall specify LCI, as the sole copyright owner.
Representative further agrees to give LCI or any person designated by
LCI, at LCI's expense, all such information and to execute all such
additional documents including, without limitation, patent
applications, as may be reasonably required to perfect the rights
referred to herein. In the event Representative or a third party is
deemed to be the author for copyright purposes of any such materials
under this Agreement, Representative agrees to assign or cause such
third party to assign, and assigns to LCI whatever copyrights exist in
copyrightable materials and Work. Representative agrees to execute and
have its employees, agents and contractors, execute any documents
(including patent applications and assignments) reasonably requested
by LCI, at LCI's expense, to provide LCI the right to own, use and
protect the Software under this Section.
Upon full recovery of the advance pursuant to Section 1 of Exhibit B
or upon repayment in cash of the advance, LCI shall transfer and
assign to Representative all right, title and interest (including
copyrights) in the Software free and clear of all liens and
encumbrances.
16. This Agreement shall become effective only upon approval
and signature of an officer of LCI.
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17. SURVIVABILITY.
Provisions that by their context are intended to survive the
termination or expiration of this agreement, shall so survive.
18. LCI shall have the right of first refusal to have
Representative market ancillary telecommunications services such as
paging, internet and cellular.
IN WITNESS WHEREOF, the parties have executed this Agreement intending
to be legally bound.
LCI INTERNATIONAL TELECOM CORP.
--------------------------------------
("YouNetwork Corporation")
By: /s/ By: /s/ Xxxx X. Xxxxxx
----------------------------------- -----------------------------------
Title: SVP Title: President
-------------------------------- --------------------------------
Date: 3-18-98 Date: 3-6-98
--------------------------------- ---------------------------------
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EXHIBIT A
I. Representative's nonexclusive territory shall be the contiguous
forty-eight states of the Continental U.S. (excluding exchanges of
members of the National Exchange Carrier Association, commonly known
as "NECA", and the United States Independent Telephone Company
organization, commonly known as "USINTELCO").
II. Services:
1. LCI Difference
2. Option S and Option T
3. WorldCard Plus
4. Home 800
5. Residential base International
6. Residential international Tell the World
III. All services and rates will be provided in accordance with LCI's
tariffs and are subject to change. Day, Evening and Night/Weekend
periods are as defined in LCI's tariffs.
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EXHIBIT B
PAGE 1 OF 3 PAGES
COMMISSIONS
1. INSTALLATION COMMISSION
During the term of this Agreement, LCI shall pay Representative $5.00
for each newly installed LCI Dial 1 subscriber in the Territory upon
said subscriber's first usage, provided said first usage is within
ninety (90) days from installation ("Installation Commission(s)").
"First Usage" shall be defined as any activity on any LCI Services
defined in Exhibit A, Section II, other than Home 800. Neither
Installation Commissions nor Usage Commissions shall be paid on LOA's
submitted from customers who are existing LCI customers or for stand
alone World Card Plus or Home 800 accounts. LCI, shall not pay
Installation Commissions or Usage Commissions for upgrades for
service, and shall not pay more than one Installation Commission on
the sale of any particular telephone number during the term of this
Agreement.
LCI will recover 100% of any and all monies advanced to Representative
as defined in Exhibit B 2d at a rate of 100% holdback of Installation
Commissions until such time that all advanced funds have been
recovered by LCI. If on the earlier of termination of this Agreement
or 12 months from the date of full execution of this Agreement, the
amount of Installation Commissions so recovered is less than the
amount advanced ("Shortfall"), Representative shall pay to LCI in cash
the amount of such Shortfall upon receipt of invoice therefor.
2. USAGE COMMISSION
LCI shall pay Representative a commission as specified below on
"Collected Revenue" for sales of the Services in the Territory
pursuant to this Agreement ("Usage Commission(s)") for those LCI
customers who remain on LCI service a minimum of thirty (30) days.
"Collected Revenue" is defined as interexchange toll actually
collected by LCI relating to the Services sold by Representative
(excluding taxes, installation charges, subscription fees, and local
loops). Usage Commissions shall be payable only during the term of
this Agreement and a maximum of twenty-four (24) months following
termination provided that this Agreement is terminated by LCI pursuant
to Section 11.a. or Section 11.b.i.) hereof. If, in any month,
disconnects of ANI's sold within 30 days by Representative meet or
exceed 15% of active ANI's sold within 30 days by Representative and
if, after written notification to Representative of such unacceptable
Disconnect Percentage, Representative fails to meet the established
Disconnect Percentage standard in the thirty days following such
notice, LCI may, at its sole discretion, take any one or all of the
following actions: reduce Usage Commissions or terminate this
Agreement without further liability hereunder (such termination shall
be deemed to occur pursuant to Section 11.b.ii.) of this Agreement).
LCI may change the Disconnect Percentage up to two (2) times in any
twelve (12) month period
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upon thirty (30) days prior written notice to Representative. No Usage
Commission shall be payable following any termination pursuant to
Section 11.b.ii.)., iii.), or iv.). hereof.
EXHIBIT B
PAGE 2 OF 3 PAGES
a. LCI, at its sole option, may pay Usage Commissions based on billed
revenue less a percentage related to estimated uncollectables and LEC
holdbacks ("Percent") as opposed to actual collected revenue, which
Percent is currently nine percent (9%) (hereinafter "Billed Revenue").
For example, if the amount billed for LCI service is $100 and the
commission rate is 5%, than the commission paid hereunder would be
$4.55 ($100-(9% X $100) X 5% = $4.55). LCI may change the Percent up
to two (2) times in any twelve (12) month period upon thirty (30) days
prior written notice to Representative.
b. In the event LCI pays commission based on Billed Revenue, LCI may
periodically perform a "true up" covering a period not to exceed 180
days to compare collected revenue to Billed Revenue and "charge back"
or pay Representative the difference between commissions paid on
Billed Revenue and what would have been paid on actual collected
revenue. The last month's payment of commissions hereunder may be
withheld no more than three (3) months so that the final "true up" may
be performed. LCI reserves the right to set off from commissions any
amount due to LCI by Representative under this Agreement or otherwise.
c. Commissions for residential long distance service shall be paid to
Representative at 10% based upon total monthly Collected Revenue
d. Advance Commission: LCI will advance Representative a total of
$250,000 in the form of a recoverable draw against Installation
Commission as defined in Installation Commission section at a rate of
100% of Installation Commissions. The payment of these funds will be
contingent based upon accomplishing the major activities as listed
below and as scheduled in no less than 30 day periods:
First Payment: $100,000 Upon full execution of this Agreement. Representative
shall use this payment for the Advance-Beta Program with LCI Beta sign-up, and
have Beta membership in place
Second Payment: $75,000 Upon accomplishing the obligations under the First
Payment. Representative shall use this payment for Advance-Beta in full test
mode, integration of additional Marketing Partners, with a minimum of 250
members in network.
Third Payment: $75,000 Upon accomplishing the obligations under the Second
Payment. Representative shall use this payment for Advance-Beta Program
completion, with aggressive membership and LCI subscriber program in place and
a minimum of 1500 members in network.
2. PAYMENT OF COMMISSIONS
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Usage Commissions will be paid by LCI approximately forty-five (45) days
following the end of the month in which the Collected Revenue is collected, or
Billed Revenue is billed, as applicable.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
LCI INTERNATIONAL TELECOM CORP. YOUNET CORPORATION
By: /s/ By: /s/ Xxxx X. Xxxxxx
----------------------------------- -----------------------------------
Title: SVP Title: President
-------------------------------- --------------------------------
Date: 3-18-98 Date: 3-6-98
--------------------------------- ---------------------------------
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EXHIBIT D
PAGE 1 OF 4 PAGES
"LCI'S POLICIES AND PROCEDURES REGARDING SLAMMING PREVENTION"
ADVISORY TO ALL REPRESENTATIVES SELLING LCI INTERNATIONAL LONG
DISTANCE SERVICES:
All Representatives/Distributors selling LCI International Telecom
Corporation's (LCI) long distance service must carefully read the contents of
this document. It will explain LCI's policies and procedures for the sale of
LCI long distance services. The purpose of this document is to explain what can
cause unauthorized switching of a customer, the importance of preventing such
switching, and the seriousness of the matter to LCI, its authorized
Representatives, and their independent distributors. This document includes an
"Acknowledgment" that must be read, signed, and returned to the
Representative/Distributor by each individual selling LCI services.
Representatives/Distributors must make a signed copy of this document available
to LCI, upon request.
A. COMMON CAUSES OF SLAMMING:
o Incorrect telephone number on submitted LOAs - means that incorrect
telephone number is switched without the customer's written consent.
o The submitted LOA is illegible and directly causes the person that keys the
order into the system to enter the wrong name and/or phone number.
o The person who "authorized" switching carriers really didn't have the
authority to make the switch. Sometimes receptionists, secretaries or
assistants authorize a switch to qualify for some sort of premium or other
inducement.
o A simple misunderstanding when one partner doesn't tell the other partner
about selecting a new long distance service. This is especially true when it
is the other person who reviews or pays the bills. The xxxx-paying partner
sees a new long distance carrier name and thinks something is wrong. Please
ask your customers to inform the appropriate persons about changing long
distance carriers.
o Signing someone up just to "get the sale" or reach a qualification or
commission level.
o Signing someone up, without the customer's knowledge, as a result of
spending a lot of time with a company decision-maker and assuming that the
person would be satisfied with LCI service.
B. EFFECTS OF SLAMMING:
o It is illegal and will not be tolerated by LCI!
o Creates a bad image and adversely affects LCI's and the Sales
Agent/Distributor's reputation.
o Takes time to investigate and correct.
o If we can get information verified (correct), it will save on:
1. Order rejects
2. Returned mail
3. Time to process valid and accurate orders.
o Frustrating experience for the company that was slammed.
o Usually the local telephone company levies a charge to make the initial
switch to LCI and then charges again to switch the affected customer back to
the original long distance company. LCI and then the distributor and its
sales agents are billed for these costs. These LCI charges will probably be
billed by distributors to their sales agent. This leads to serious
consequences for the agent, including termination of the sales agent
relationship with LCI.
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EXHIBIT D
PAGE 2 OF 4 PAGES
LCI AS WELL AS FEDERAL, STATE, AND LOCAL REGULATORY AGENCIES VIEW "SLAMMING" AS
A VERY SERIOUS PROBLEM. THE FCC CAN IMPOSE SIGNIFICANT FINES ON A PER VIOLATION
BASIS.
C. HOW CAN A REPRESENTATIVE/DISTRIBUTOR PROTECT AGAINST SLAMMING:
o You are strongly encouraged to verify information against each new
customer's actual telephone xxxx for each LOA.
o The person signing the LOA should be a person with authority to act on
behalf of the company or the person whose name appears on the telephone
xxxx. It is essential that the person signing the LOA has authority to
change long distance carriers. Note that children, roommates, receptionists,
secretaries and assistants typically do not have the authority to change
long distance carriers for an individual or a company. If the person signing
the LOA is different from the person with the actual authority to do so, you
should attempt to contact the other person. While this policy might
jeopardize some sales orders, it should give you a chance to retain sales by
demonstrating your concern and professionalism.
o Take your time. Review the LOA for accuracy and legibility, especially the
telephone number. Confirm the person's telephone number.
o NEVER sign someone else's name on an LOA or any other document!
o Don't force a sale that is not there.
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EXHIBIT D
PAGE 3 OF 4 PAGES
ACKNOWLEDGMENT
THIS WILL VERIFY THAT I HAVE RECEIVED, READ, UNDERSTAND, AND WILL COMPLY
WITH THE DOCUMENT ENTITLED "LCI'S POLICIES AND PROCEDURES REGARDING SLAMMING
PREVENTION". I FULLY UNDERSTAND AND APPRECIATE MY OBLIGATIONS AS AN LCI SALES
AGENT OR INDEPENDENT CONTRACTOR NOT TO ENGAGE IN OR FACILITATE THE PRACTICE OF
"SLAMMING" CUSTOMERS. I UNDERSTAND THAT LCI WILL NOT TOLERATE FURTHER
OCCURRENCES OF "SLAMMING", AND THAT LCI WILL TAKE WHATEVER ACTIONS ARE
NECESSARY TO PROTECT AGAINST SLAMMING INCLUDING, WITHOUT LIMITATION,
TERMINATION OF THE SALES AGENT RELATIONSHIP AND ENFORCEMENT AND ENFORCEMENT OF
ALL APPLICABLE LEGAL RIGHTS AND REMEDIES.
/s/ Xxxx X. Xxxxxx, President
-------------------------------------------------------------------
SIGNATURE OF REPRESENTATIVE SELLING LCI INTERNATIONAL LONG DISTANCE
DATE 3/6/98
--------
XXXX X. XXXXXX
-------------------------------
PRINT NAME
PHONE NUMBER 000 000-0000 x000
-------------------
YouNetwork Corporation
-------------------------------
PRINT NAME OF COMPANY
CHANNEL CODE
-------------------
ORGANIZATION CODE
--------------
18
EXHIBIT D
PAGE 4 OF 4 PAGES
ACKNOWLEDGMENT BY SALES AGENT
THIS WILL VERIFY THAT ON BEHALF OF , I HAVE
RECEIVED, READ, UNDERSTAND, AND WILL DISTRIBUTE THE DOCUMENT ENTITLED "LCI'S
POLICIES AND PROCEDURES REGARDING SLAMMING PREVENTION" TO THE INDIVIDUALS
RESPONSIBLE FOR SELLING LCI INTERNATIONAL LONG DISTANCE SERVICE. WE FULLY
UNDERSTAND AND APPRECIATE OUR OBLIGATIONS AS AN LCI SALES AGENT NOT TO ENGAGE
IN OR FACILITATE THE PRACTICE OF "SLAMMING" CUSTOMERS. WE UNDERSTAND THAT LCI
WILL NOT TOLERATE FURTHER OCCURRENCES OF "SLAMMING", AND THAT LCI WILL TAKE
WHATEVER ACTIONS ARE NECESSARY TO PROTECT AGAINST SLAMMING INCLUDING, WITHOUT
LIMITATION, TERMINATION OF THE SALES AGENT RELATIONSHIP AND ENFORCEMENT OF ALL
APPLICABLE LEGAL RIGHTS AND REMEDIES.
DATE
---------------------------------------- -----------------------
SIGNATURE OF REPRESENTATIVE
----------------------------------------
PRINT NAME
BUSINESS PHONE NUMBER
-------------------
-------------------------------
PRINT NAME OF COMPANY
CHANNEL CODE
-------------------
ORGANIZATION CODE
--------------
PLEASE REMIT THIS FORM WITHIN FOURTEEN DAYS OF RECEIPT TO: LCI INTERNATIONAL,
INC., 0000 XXXXXXXXX XXXXX, XXXXXX, XXXX 00000, ATTN: XXXXXX XXXXXXXXX, LEGAL
DEPT.
SIGNATURE OF REPRESENTATIVE FOR .
-------------------------------
19
EXHIBIT D
PAGE 1 OF 1 PAGES
MINIMUM COMPUTER EQUIPMENT
I. The following IBM compatible equipment shall be used by Representative for
the purpose of account information and the electronic transfer of LOAs to
LCI. All reporting to the Representative by LCI shall be done via
electronic files.
A. Hardware
1. PC Compatible with a Pentium 100+ Mhz, recommended; 486 66 MHz,
minimum
2. 16 Meg of RAM on board, minimum
3 520 MB IDE Hard Drive, minimum
4. 28.8 internal/external FAX modem, recommended; 14.4 modem,
minimum
5. VGA color Monitor, minimum
6. 101 keyboard style
7. A working printer for reports. A wide carriage type (EPSON FX)
is preferred but not necessary.
B. Software
1. DOS 6.20 or better
2. Windows 3.11 for work groups (Windows 95 is also supported)
3. Communications package (Quicklink or PROCOMM PLUS is preferred,
but not necessary.)
4. Microsoft Office (Optional)
5. Microsoft Access, Version 2.0 (Office 97 version not supported)
if using current versions of LCI provided data entry software.
6. Microsoft Internet Explorer, most recent version, recommended;
Netscape, Optional
7. Wildcat browser - LCI provided
II. Distributor may use its own or other programs for electronic submission of
LOAs, as long as files meet LCI file type and layout requirements.
III. THE ABOVE LISTING IS A MINIMUM GUIDELINE AND IS SUBJECT TO CHANGE BY LCI.
LCI SHOULD BE CONTACTED PRIOR TO ANY PURCHASES OF EQUIPMENT OR SOFTWARE
FOR CONFIRMATION OF LATEST STANDARDS.
IV. LCI does not currently support an Apple/Macintosh or UNIX environment.
20
