2
August 17, 2004
NeWave, Inc.
00 Xxxxx Xx Xxxxxx Xxxx # 0
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Director
RE: THIRD AMENDMENT TO THE MARKETING AGREEMENT BETWEEN MEMBERWORKS INCORPORATED
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AND NEWAVE, INC.
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Dear Xx. Xxxxxxx:
Referencing that certain Agreement between MemberWorks Incorporated ("MW") and
NeWave, Inc. ("NWI") dated as of September 22, 2003, as amended by that First
Amendment to the Marketing Agreement between MemberWorks Incorporated and
NeWave, Inc., dated October 13, 2003 and as further amended by that Second
Amendment to the Marketing Agreement between MemberWorks Incorporated and
NeWave, Inc., dated February 20, 2004 (the "Agreement"; capitalized terms not
defined herein shall have the respective meanings ascribed to them in the
Agreement), for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Section 1 of Exhibit C shall be deleted in its entirety and replaced with
the following:
"The following terms not previously defined shall have the following
definitions:
a. "Actual Xxxx Rate" means the actual percentage of Enrollees whose credit
cards are not declined when the initial month's Membership Fee for the
applicable Program is presented for payment to the applicable credit card issuer
or merchant processor and who do not cancel their membership in a Program prior
to being billed the initial Membership Fee or trial fee.
b. "Declines" means an Enrollee with respect to whom the applicable Program
membership fee is declined by the applicable credit card issuer or merchant
processor.
c. "Effective Date" means the date first set forth above.
d. "Eligible Program Member" means with respect to any Program, an Enrollee:
(i) with respect to whom the initial month's Membership Fee (as defined below)
for such Program is not declined when presented for payment to the applicable
credit card issuer or merchant processor, or (ii) who does not cancel his or her
membership in a Program prior to being billed the initial Membership Fee or
trial fee, and (iii) who is not already a member of the applicable Program and
(iv) who is verified by both MW and NWI in writing to be an Enrollee as set
forth on the applicable MW Sales Tracking Report.
e. "Marketing Window" means each two week period during the Term commencing
with the Effective Date.
f. "Membership Fee" means the fee charged by MW for extending membership in
a Program at the end of any applicable trial period. "Membership Fee" shall
specifically exclude any shipping and handling, processing, or trial period
fees. Except as otherwise agreed to in writing by the parties, the initial
Membership Fee shall be no less than $19.95 per month.
g. "Projected Xxxx Rate" means the forecast of the percentage of Enrollees
whose credit cards will not be declined when the initial month's Membership Fee
for the applicable Program is presented for payment to the applicable credit
card issuer or merchant processor and who do not cancel their membership in a
Program prior to being billed the initial Membership Fee. The Projected Xxxx
Rate shall initially be set at thirty-five percent (35%) of Enrollees and may be
changed at any time as reasonably and in good faith determined by MW based on
actual and projected data.
h. "Upsell" means an offer of a product or service (including, but not
limited to, a Program) following NWI's own primary product or service on an
inbound call."
2. Section 2 of Exhibit C shall be deleted in its entirety and replaced with
the following:
"For each Eligible Program Member enrolled in a Program beginning on May 19,
2004, and continuing through and including July 13, 2004, as a result of NWI's
marketing on an Upsell, NWI shall be paid a commission of $40.00 per Eligible
Program Member. For each Eligible Program Member enrolled in a Program
beginning on July 13, 2004 as a result of NWI's marketing on an Upsell during
each Marketing Window of the Term, NWI shall be paid a commission of $37.00 per
Eligible Program Member."
3. Section 3 of Exhibit C shall be deleted in its entirety and replaced with
the following:
"Commissions to which NWI is entitled with respect to Eligible Program Members
shall be paid to NWI as follows: (i) with respect to those Eligible Program
Members enrolled in a Program beginning on May 19, 2004, and continuing through
and including July 13, 2004, seven (7) days after the Marketing Window in which
Enrollees were enrolled in a Program, MW shall make a payment equal to $40.00
per Enrollee for those Enrollees that are projected to be Eligible Program
Members based on the then current Projected Xxxx Rate; and (ii) with respect to
those Eligible Program Members enrolled in a Program beginning on July 14, 2004,
seven (7) days after the Marketing Window in which Enrollees were enrolled in a
Program, MW shall make a payment equal to $37.00 per Enrollee for those
Enrollees that are projected to be Eligible Program Members based on the then
current Projected Xxxx Rate."
Except as expressly set forth herein, the terms and provisions of the Agreement
are hereby restated in their entirety. From and after the execution and
delivery of this amendment, all references to the Agreement contained in other
agreements and instruments executed and delivered pursuant to or in connection
with the Agreement shall hereinafter mean and refer to the Agreement as amended
hereby. In the event of any contradiction(s) between this amendment and the
Agreement, the terms and conditions of this amendment shall govern and control.
This amendment may be executed in counterparts, both of which shall constitute
one and the same instrument. A facsimile transmission of this signed amendment
bearing a signature on behalf of a party hereto shall be binding on such party.
Kindly confirm your agreement to the foregoing terms and conditions by signing
this letter at the place indicated below.
Very truly yours,
MEMBERWORKS INCORPORATED
By: /s/ Xxxxxx X. X. Xxxxxx
Xxxxxx X. X. Xxxxxx
Senior Vice President and General
Counsel
AGREED TO AND ACCEPTED BY:
NEWAVE, INC.
By:/s/ Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx