MASTER SERVICES AGREEMENT
THIS MASTER SERVICES AGREEMENT (the "Agreement"} is entered into as of
August 1, 2002 ("Effective Date"), by and between eBillit, Inc., a Delaware
corporation ("EB1"), and Telco Billing, Inc., a Nevada corporation ("Client").
WHEREAS, Client is a provider of certain Internet and/or telecommunications
related products and services; and
WHEREAS, EBI is engaged in the business of providing validation, billing,
collection and related services to the internet and telecommunications
industries; and
WHEREAS, EBI is willing to provide its services to Client, and Client
desires to obtain such services from EBI, upon the terms and conditions stated
herein;
NOW, THEREFORE, the parties hereto agree as follows;
1. DEFINITIONS. Certain terms used herein are defined in the
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attached Exhibit A and are incorporated herein by reference.
2. EBI SERVICES. EBI shall provide the following services (each a
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"Service Order") as more fully described on the referenced Schedules, attached
hereto and made a part hereof. Service Orders may be added to this Agreement by
execution of an applicable amendment hereto including an amendment to Exhibit
"B" with respect to such added Service Order.
Initial
Schedule Services Order Options Order
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I Validation/Registration ( )
II PhoneBill Services (Telco Billing) ( X )
III DirectBill Services (Client-Branded Billing) ( )
IV Credit Card Processing ( )
V Automated Clearing House (ACH) ( )
VI End-User Inquiry (required with Service Option II or III) ( X )
VII Collection Services ( )
VIII Customer Management Services ( )
Throughout the Term of this Agreement, Client shall utilize EBI for any and
all services covered by Service Orders hereunder.
3. Term. The term of this Agreement shall be for three (2) years from
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the Effective Date ("Initial Term"), and shall automatically renew for
successive terms of one (1) year (each a "Renewal Term") unless
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either party gives the other party ninety (00) days prior written notice of its
desire to not renew at least ninety (90) days prior to the scheduled renewal, or
otherwise terminates this Agreement in accordance with Section 12, The Initial
Term and any Renewal Term shall be referred to collectively herein as "Term".
4. CLIENT SUBMISSION AND EBIEDIT. Where applicable to a Service
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Order, Client shall submit to FBI its Billing Transactions in a data format
acceptable to EBI. Upon receipt of Client's Billing Transactions, EDI shall
subject the Billing Transactions to its proprietary edit process (the "EBI Edit
Process"), which may screen the Billing Transactions for, among other things,
compliance with EBI's billing policies, billing coverage, regulatory
requirements, syntax errors and other requirements as EEI may reasonably
determine from time to time. EB! shall provide reasonable notification of any
changes or restrictions in its edit criteria. Client shall use commercially
reasonable efforts to screen its Billing Transactions to exclude records that
are not likely to pass the EBI Edit Process. If any of Client's Billing
Transactions fail to satisfy the criteria of the EBI Edit Process, EBI shall
return such Billing Transactions to Client and EBI shall have no further
responsibility For any such returned Billing Transactions.
5. SERVICE FEES. EBI shall be entitled to withhold from its
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disbursements to Client, or otherwise invoice Client, the foes and charges set
forth on Exhibit B, attached hereto (collectively "Fees"). In the event EBI
invoices Client for its Fees, such invoices shall be due and payable within five
(5) business days of receipt by Client. EBI shall be entitled Co interest on any
past-due Fees, or other amounts due to EBI, at the rate of 13% per annum or the
maximum rate allowable by law, whichever is less, After the first annual
anniversary of this Agreement, EBI may adjust its Fees with thirty (30) days
prior written notice to Client, provided-however, that the aggregate effect of
such adjustment shall not exceed ten percent (10%) in any 12 month period.
6. TAXES, Each party shall be responsible for the timely remittance of
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such party's applicable Taxes (if any) to the appropriate taxing authorities, in
no event shall either party be responsible for the other party's obligation to
remit such other party's Taxes. Client shall either (initial which applies): (i)
[ __ ] include, in the face amount of each Billing Transaction, the amount of
any applicable Taxes and format such Billing Transactions so as to be exempt
from any additional Taxes; (ii) [ _ ] provide written instructions to EBI
directing EBI to apply specific Taxes to the Billing Transactions; or (iii) [ X]
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direct EBI to cause its then-current taxing rates and logic to be applied to
Client's Billing Transactions. In the event that EBI is providing services to
Client under a Phone-Xxxx Service Order, attached hereto as Schedule II, then
EBI shall cause any Taxes collected by a Telco in relation to Client's Billing
Transactions to be remitted to the appropriate taxing authorities. Client agrees
to indemnify and hold EBI, its directors, officers, employees, agents, and
representatives harmless from and against any liability or loss resulting from
any Taxes including, without limitation, any penalties, interest, additions to
Tax, Tax surcharges and other Tax-related coats payable or incurred in relation
to Client's Services or the Billing Transactions.
7. CLIENT REPRESENTATIONS AMD WARRANTIES. Client represents and
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warrants to EEI that, throughout the Term of this Agreement, Client shall be in
compliance with all rules, regulations and policies
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including, but not limited to, federal, state, and local 1093! and regulatory
requirements and the billing and collection guidelines contained In Exhibit C,
attached 'hereto, applicable to any of Client's Services. This warranty is in
lieu of any other warranty, express, implied or statutory.
8. EBI's REPRESENTATION AMD WARRANTY. EBI represents and warrants to
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Client that, throughout the Term of this Agreement, EBI shall be in compliance
with all rules, regulations and policies including, but not limited to, federal,
state, and local legal and regulatory requirements applicable to the Services to
be provided hereunder, This warranty is in lieu of any other warranty, express,
implied or statutory.
9. PROOF OF COMPLIANCE. Each party agrees to provide written proof of
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its compliance, with respect to its respective obligations under Sections 7 or 8
above, to the other party within five (5) business days of such other party's
written request. Each party shall have the right to immediately suspend its
performances under this Agreement, whether in whole or in part, without
liability to the other party in the event that such other party does not provide
satisfactory written evidence of such compliance. Each party agrees to notify
the other party in writing, as soon as reasonably possible, of any instances
where such party is not in compliance with applicable obligations under Sections
7 and 8.
10. LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO
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THE OTHER PARTY FOR ANY LOSS OF PROFITS, LOSS OF USE, LOSS OF GOODWILL,
CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES REGARDLESS OF THE FORM OF ANY CLAIM,
WHETHER IN CONTRACT OR IN TORT OR WHETHER FROM BREACH OF THIS AGREEMENT,
IRRESPECTIVE OF WHETHER SUCH PARTY HAS BEEN ADVISED OR SHOULD BE AWARE OF THE
POSSIBILITY OF SUCH DAMAGES. CLIENT HEREBY ACKNOWLEDGES AND AGREES THAT EBI'S
LIABILITY WITH RESPECT TO THE PERFORMANCE OF ITS SERVICES SHALL BE LIMITED TO
THE AMOUNT OF FEES PAID BY CLIENT TO EBI FOR THE SERVICES THAT ARE THE SUBJECT
OF ANY CLAIM.
11. INDEMNIFICATION.
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(a) By Client. Client hereby agrees to indemnify and hold EBI
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and its directors, officers, employees, agents, and representatives harmless
from and against all obligations, liabilities, claims, demands, losses, damages,
costs or expenses, including attorney's fees, arising cut of or relating to: (i)
Client's material breach of any representation, warranty, covenant or obligation
hereunder; (ii) Client's Services; or (iii) the Billing Transactions processed
by EBI in accordance with the terms of this Agreement,
(b) By EBI. EBI hereby agrees to indemnify and hold Client and
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its directors, officers, employees, agents, and representatives harmless from
and against all obligations, liabilities, claims, demands, losses, damages,
costs or expenses, including attorney's fees, arising out of or relating to
EBI's material breach of any representation, warranty, covenant or obligation
hereunder.
(c) Enforcement. I n the event that either party (in this context
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on "Indemnified Party") is served as a defendant in any Claim arising out of any
of the foregoing, the Indemnified Party shall promptly provide written notice
thereof (the "Claim Notice") to the ether party (in this context the
"Indemnifying Party").
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Ten (10) business days of receipt of the Claim Notice, shall acknowledge, in
writing, its obligation under this Section 11 and, thereafter, the Indemnifying
Party shall control all aspects of the defense of the claim. In the event that
the Indemnifying Party fails to provide such written acknowledge within the
specified timeframe then, at its option and without waiving its rights to
indemnification hereunder, the Indemnified Party may defend itself, and the
Indemnifying Party shall pay all reasonable attorney fees, costs and expenses
incurred by the Indemnified Party in such defense.
12. TERMINATION FOR DEFAULT. Either party may terminate this
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Agreement, effective immediately with written notice to the other party upon any
of the following events:
(a) The other party defaults on any payment obligation hereunder
and fails to cure such payment default within five (5) business days of written
notice of such payment default lo the defaulting party by the non-defaulting
party; or
(b) The other party has violated a representation or warranty
contained in this Agreement and such violation remains uncured after five (5)
business days following written notice of such violation from the non-defaulting
party specifying the nature of the violation; or
(c) The other party defaults with respect to any other provision
of this Agreement and fails to cure such default within thirty (30) days of
written notice of such default to the defaulting party by the ,ion- defaulting
party; or
(d) The other party has (i) filed a voluntary petition in
bankruptcy or voluntary petition or an answer seeking reorganization,
arrangement, readjustment of its debts, or any other relief under the Federal
Bankruptcy Code or under any other insolvency act or law, now or hereafter
existing, or (ii) a receiver or trustee appointed involuntarily, and any
petition or action is not suspended, stayed or dismissed within sixty (6O) days
after its filing or appointment, as the case may be; or
(e) Either party determines, in its reasonable discretion, that
its business image, reputation or goodwill is being harmed by the services of
the other party and such other party has. not satisfactorily cured the indicated
problem within ten (10) business days of notice thereof from the first party.
13. EFFECT OF TERMINATION. The parties agree that the termination of
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this Agreement for any reason whatsoever, shall not affect or terminate any
obligation or liability incurred or assumed by either party prior to the
effective date of termination of this Agreement including, without limitation,
payment of amounts accrued or owing hereunder and the parties' respective
obligations regarding Confidential Information.
14. CONFIDENTIALITY.
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(a) As used in this Agreement "Confidential Information" of either
party shall mean any information including, without limitation, trade secrets,
technical and other information relating to the service or business operations
of g party (the "Disclosing Party") that is disclosed either orally or in
writing to the other Party {the "Receiving Party") and is marked "Confidential",
bears a marking of like
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import, or would, by the application of a reasonable standard, be understood by
the Disclosing Party to be of a confidential nature at the time of disclosure.
"Confidential Information" shall expressly include any equipment, hardware or
software made available to a Receiving Party by a Disclosing Party that includes
or represents a tangible manifestation of a Party's "Confidential Information",
whether or not such equipment bears any confidential legend or marking.
(b) Each party agrees that Confidential Information of the other
party which is disclosed or obtained by it hereunder or otherwise, shall,
subject to the terms and conditions of this Agreement, be retained in confidence
and shall be protected to the same extent and in the same manner as comparable
Confidential Information of the Receiving Party, but no less than a reasonable
standard of care.
(c) Information shall not be doomed Confidential Information, and
Receiving Party shall have no obligation under this provision with respect to
any:
(i) Information that now or hereinafter comes into the public
domain without breach of this Agreement;
(ii) Information rightfully and lawfully received by a
Receiving Party from a third party without breach of this Agreement or
any other agreement as evidenced by existing written documentation
thereof;
(iii) Information developed independently or discovered by a
Receiving Party without use of the Disclosing Party's Confidential
Information as evidenced by existing written documentation thereof;
(iv) Information approved for release by the written
authorization of the Disclosing Party; or
(v) Information disclosed pursuant to the requirement or
request of a governmental agency or court of competent jurisdiction to
the extent such disclosure is required by a valid law, regulation or
court order provided, however that reasonable prior written notice is
given by the Receiving Party to the Disclosing party of any such
requirement or request sufficient to permit the Disclosing party to
seek an appropriate protective order or exemption from such
requirement or request.
(d) All tangible forms of information, including, but not limited
to documents, drawings, specifications, prototypes, samples and the like
received hereunder by a Receiving party shall remain the property of the
Disclosing Party. Upon written request by a Disclosing Party, the Receiving
party shall return to the Disclosing Party all tangible forms of the Disclosing
Party's Confidential Information received by Receiving party, together with all
copies thereof.
15. CHOICE OF - XXXXXX VENUE. THE VALIDITY OF THIS AGREEMENT, ITS
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CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES
HERETO SHALL BE DETERMINED UNDER. GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR
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PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND NOT OTHERWISE SUBJECT
TO RESOLUTION BY ARBITRATION HEREUIMDER. SHALL BE BROUGHT EXCLUSIVELY IN AND
VENUE SHALL BE PROPER ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY
OF SANTA XXXXX, STATE OF CALIFORNIA. EACH OF THE PARTIES HERETO WAIVES, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE W[TH THIS SECTION.
16. PUBLIC ANNOUNCEMENTS Neither party, m y use the other party's name
in any public, announcements or public disclosures nor shall either party
disclose the terms Of this Agreement, without the prior written consent of the
other party,
17. NOTICES. All notices and other communications that are required or
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may be given hereunder shall be in writing and shall be delivered personally,
sent by U.S. mail with return receipt requested, by facsimile if receipt is
confirmed by means other than the facsimile's electronic confirmation, or by an
express carrier with receipt confirmation. All notices and other communications
shall be deemed given when actually received by a party as evidenced by an
appropriate confirmation. Notice shall be directed to a party at its address set
forth below or such other address as shall be given in writing by such party.
eBillit, Inc. Telco Billing, Inc.
0000 Xxx Xxxxxxx 0000 X Xxxxxxx Xx. Xxxxx 000
Xxx Xxxx, XX 00000 Mesa, A2 85205
Attention: General Counsel Attention: Xxxxxx Xxxxx
FAX: 000-000-0000 FAX: (000) 000-X000
18. DISPUTE RESOLUTION AND ARBITRATION. Except for an action seeking a
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temporary restraining order or injunction related to the purposes of this
Agreement, or a suit to compel compliance with this dispute resolution process,
the parties shall use the following alternative dispute resolution procedures as
their sole remedy with respect to any claim, dispute, or other controversy
arising out of or relating to this Agreement or its breach.
(a) Dispute Resolution. At the written request of a party to the
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other party, each party shall appoint an officer or employee representative to
meet, negotiate in good faith, and attempt to resolve any dispute arising under
this Agreement The location, format, frequency, duration, and conclusion of
these discussions shall be left to the discretion of the parties'
representatives. Upon the mutual agreement of the parties, the designated
representatives may elect to utilize non-binding mediation Lo assist in the
settlement of the dispute. Discussions and correspondence among the
representatives, for purposes of these negotiations, shall be treated as
Confidential Information developed for purposes Of settlement, exempt from
discovery and production, and which shall not be admissible in any arbitration
or related action absent the mutual written
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agreement of the parties. Documents identified in, or provided with such
communications, that are not prepared for purposes of the negotiations, are not
so exempted and may, if otherwise admissible, be admitted as evidence in any
arbitration or related action hereunder.
(b) Arbitration. if the negotiations do not resolve the dispute
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within sixty (60) calendar days of the initial written request for a meeting
pursuant to Section 13 (a) hereof, the dispute shall be submitted to binding
arbitration by a single arbitrator pursuant to the Commercial Arbitration rules
of the American Arbitration Association Chen in effect (the "Rules"). A party
may demand such arbitration in accordance with the procedures set out in those
Rules. The arbitration hearing shall be commenced within sixty (6O) calendar
days of the elate of the demand for arbitration. The arbitration shall be held
in San Jose, California. Judgment upon the award rendered by the arbitrator may
be entered in any court of competent jurisdiction. Each party shall bear Ka own
costs of these procedures. A party seeking discovery shall reimburse the
responding party the reasonable costs of production of documents. The parties
shall share equally the fees of the arbitration and the arbitrator.
19. GENERAL PROVISIONS.
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(a) Attorney's Fees. In the event of any legal proceeding, other
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than arbitration, arising out of or relating to this Agreement, the prevailing
party thereto shall be entitled to reimbursement from the other of all
reasonable attorney's fees and costs incurred in connection therewith.
(b) Severability. If any provision of this Agreement is found to
be invalid by any court, the
invalidity of such provision shall not affect the validity of the remaining
provisions hereof.
(c) Captions. The paragraph headings contained in this Agreement
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are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) Assignment. Either party may assign this Agreement to an
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entity holding a majority ownership interest in the assigning party or in which
the assigning party holds a majority ownership interest. In addition, Client may
assign, in whole or in part, its right to payments hereunder to a third party.
Neither party may otherwise assign any of its rights or obligations hereunder
without the prior written consent of the other party, which consent shall not be
unreasonably withheld. All assignments shall be in writing, duly signed by an
officer of the assigning party. This Agreement shall &e binding upon and inure
to the benefit of the successors and permitted assigns of the parties.
(e) Amendments: No Waiver. Except as otherwise provided herein,
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this Agreement may be amended or modified only by a written instrument executed
and delivered by duly authorized representatives of the parties hereto, No
waiver of any right hereunder shall be deemed to be a waiver of the same or any
other right on any other occasion.
(f) Third Party Rights. The parties do not intend to confer any
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benefit hereunder on any person or entity other than the parties hereto.
(g) Further Assurances. The parties agree to do such further acts
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as may be reasonably necessary to evidence or confirm the agreements contained
herein and the matters contemplated hereby.
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(h) Force Majeure. Neither party shall be deemed in default of
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this Agreement to the extent that any delay or failure in performance of its
obligation results, without its fault or negligence, from any cause beyond its
control, including, but not limited to, acts of God, acts of civil or military
authority, government regulation, embargoes, epidemics, war, terrorist acts,
riots, insurrections, fires, floods, earthquakes, nuclear accidents, strikes,
power losses, unusually severe weather conditions, inability to secure third
party products, services, communication or transportation facilities, Internet
hacking, viruses or similar acts of sabotage, or act of or omission of common
carriers (each an "Interrupt Event"). Upon the occurrence of an Interrupt Event
that causes either party to be unable to perform its obligations hereunder, such
party shall: (i) immediately notify the other party in writing of such Interrupt
Event and its expected duration; and (ii) take all commercially reasonable steps
to recommence performance of its obligations hereunder. In the event that an
interrupt Event delays a party's performance of its obligations by more than
fifteen (15) days following notice by such party, such event shall be deemed a
default hereunder and shall be subject to the rights and remedies of these
parties.
(i) Counterparts. This Agreement may be executed in separate
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counterparts, each of which shall be deemed an original, and both of which
together shall constitute one and the same instrument.
(j) Integration of Agreement, This Agreement: together with the
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Exhibits and Schedules hereto, contains the entire understanding of the parties
with respect to its subject matter and supersedes all prior and contemporaneous
agreements, representations and understandings among the parties, whether oral
or written, relating to the subject matter hereof.
(k) No Agency. Neither EB! nor Client is an agent, partner, joint
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venture, trustee, fiduciary or legal representative of the other party and
neither EBI nor Client has authority to act for or incur any obligation on
behalf of or in the name of the other party other than as expressly set forth in
this Agreement.
(l) Corporate Authority. The parties hereto represent and warrant
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that they have the capacity, power and authority to enter into this Agreement,
and that the individuals signing on behalf of both parties have the authority to
so sign.
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blank. -}
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date set forth above.
eBillit, Inc. (EBI) Telco Billing, Inc. (Client)
By: /s/ Illegible By: /s/ Xxxxxx Xxxxx, pres.
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Name: Illegible Name: Xxxxxx Xxxxx
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Title: CEO Title: President
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Date: 1-2-03 Date: 12/6/02
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EXHIBIT "A"
DEFINITION OF CERTAIN TERMS
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The following terms shall have the meaning ascribed thereto throughout this
Agreement and any Exhibits and Schedules attached hereto:
"Account" shall mean a separate account of Client under which Billing
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Transactions and settlement funds are tracked and reported.
"Account Number" shall mean the number, assigned by EBI, which is used to
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reference a particular Account,
"Adjustment" shall mean a post-billing deduction made to an End-User's xxxx with
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respect to Client's Billing Transactions, usually arising from
End-User disputes regarding a billed amount Adjustments may be
initiated by (i) Telcos, where applicable, in accordance with the
Billing Contracts, (ii) by Client at its discretion, or (iii) by
EBI in accordance with this Agreement.
"ANI" shall mean Automatic Number Identification, which refers to the network
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capture of a dialing party's originating telephone number. For
many dialed services, the ANI is used as the BTN (see below).
"Billing Contract" shall mean a billing and collection agreement entered into
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between EBI and a LEG and/or certain third parties that contract
directly with such LEG. Billing Contracts permit the inclusion of
approved types of Billing Transactions on the LEC's local
telephone xxxx to business and residential consumers. A current
list of existing Billing Contracts as of the Effective Date is
attached to Schedule II as Exhibit ll-A.
"BTN" shall mean a billing telephone number, which identifies the telephone line
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to which a Billing Transaction was charged by an End-User.
"Billing Transaction" shall mean an electronic data record evidencing the use by
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an End-User of Client's Service, which includes relevant
information regarding such use.
"Client's Service" shall mean a service provided by a Service Provider which
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gives rise to a Billing Transaction or otherwise results in or
necessitates a service to be performed by EBI hereunder.
"Deposit Month" shall mean a particular calendar month within which Billing
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Transactions are processed and submitted by EBI to the applicable
Telcos.
"EBI Edit Process" shall mean EBI's internal edit checks applicable to the
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formatting and/or content of Billing Transactions as further
described under Section 4 of the Agreement.
"EBI Reserve" shall mean an amount withheld, from the amount otherwise owed to
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Client with respect to Billing Transactions, to protect EBI from
credit losses or otherwise to cover other reserves or offsets,
other than Uncollectibles imposed by a Telco.
"EBI Systems" shall mean alt of EBI's proprietary systems developed and owned by
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EBI or licensed to EBI, including but not limited to any
software, processes and procedures related thereto that are used
by EBI in the performance of its obligations hereunder, EBI
Systems shall also include any improvements, enhancements,
customizations, and upgrades thereto whether jointly developed or
otherwise. EBI shall own all Intellectual Property Rights in the
EBI Systems.
"End-User" shall mean a consumer of Client's Service, including, but not limited
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to, an individual, corporation or other entity.
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"End-User Inquiry" shall mean oral or written contact from an End-User regarding
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a billing charge usually as a result of the End-User disputing
such charge or otherwise seeking an explanation. End-User
Inquiries are either handled by EBI or Client in accordance with
the attached Schedule VI, or handled by a Telco in accordance
with such Telco's inquiry policies and applicable regulations.
"Fees" shall mean those fees set forth on Exhibit B to the Agreement, which are
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applicable to the Service Options ordered by Client
"Intellectual Property Rights" shall mean all forms of proprietary rights,
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titles, interests, and ownership relating to patents, copyrights,
trademarks, service marks, trade names, trade dresses, trade
secrets, know-how, mask works, moral rights, and all similar
rights of every type that may exist now or in the future under
the laws of any jurisdiction.
"LEC" shall mean a local exchange carrier within the telecommunications industry
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that, among other things, provides dial tone service to business
and for residential consumers.
"Reject" shall mean any Client Billing Transaction that fails to pass the EBI
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Edit Process as described in paragraph 4(a) hereof.
"Service Provider" shall mean either Client or Client's customer, as applicable,
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where such entity provides services to End-Users giving rise to
Billing Transactions, In the event that Service Provider is not
Client, Client is responsible for all actions, inactions, errors
and omissions of Service Provider with respect to the Billing
Transactions.
"Taxes" shall mean all federal, state or local sales, use, excise, gross
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receipts or other taxes or tax-like charges imposed on or with
respect to any service or transaction which is the subject of
this Agreement,
"Telco" shall mean a LEC with which EBI, directly or indirectly, maintains a
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Billing Contract. A current list of such Telcos as of the
Effective Date is attached to Schedule II as Exhibit lI-A.
"Term", "Initial Term" & "Renewal Term" are each defined in Section 3 of the
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Agreement.
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EXHIBIT "B"
FEES
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The following Fees shall apply:
1) PHONEBILL SERVICES (TELCO BILLING)
a) Initial Account setup (sub-CIC) fee: N/A
- each additional Account: $1,500.00 one time
b) EBI Processing Fees:
Gross Dollars Deposited
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each Month Fee Rate
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All volume levels 2.75%
EBI's processing fee for each Account's Deposit Month shall be
the greater of: i) the gross dollars deposited each month
multiplied by the Fee Rate, or ii) $.34 per Billing Transaction,
or iii) a minimum monthly fee of $10,000 for up to two Account(s)
and $5,000 for each additional Account. Notwithstanding item
iii), above, in the event that, during any then-current Term,
Client pays EBI a cumulative processing fee exceeding the product
of the applicable monthly minimum and the number of months
included in such Term, then no monthly minimums shall apply for
the remainder of such Term. For example, if after 12 months of
the Initial Term, Client has been utilizing two Accounts and has
paid to EBI $240,000 in processing fees, then no monthly minimums
would apply for the remainder of the Initial Term. This contract
effective August 2002, but executed in final form 12/6/02 as such
client has already met all minimum requirements for the contract
period.
2) END-USER INQUIRY
a) Verbal End-User Inquiry $ 3.50 each
b) Referral (live agent) $ 2.00 each
c) Transferred or auto-referred $ 0.11 per minute
Not to exceed $1.00
d) Written End-User Inquiry $ 5O.OO each
e) Written regulatory complaints $ 5O.OO each
f) Adjustment record processing $ 0.50 each
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EXHIBIT "C"
BILLING AND COLLECTIONSGUIDELINES
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EBI has adopted the anti-cramming consumer protection guidelines of the
Coalition to Ensure Responsible Billing (CERB). By adopting these guidelines,
EBI is committed to billing standards and practices to ensure a maximum level of
consumer protection. Client hereby agrees to the following as consideration for
EBI billing for its services.
1. COMPANY INFORMATION
Client shall provide EBI with the following information:
- Client's company name, including dba's, and address.
- Names of all officers, directors and principals of Client.
- Proof of corporate or partnership status.
- Copies of certifications as required.
- Foreign corporation filings as required,
- Any Applicable tariffs upon request,
- The names and addresses of any telemarketing companies to be used by
the Client.
- The names and addresses of any third party verification companies to
be used by the Client.
2. SCREENING OF PROGRAMS, PRODUCTS AND SERVICES
Prior to EBI's billing for any Client services, Client shall provide EBI
with the following information:
- A complete set of its marketing materials pursuant to the programs or
services to be billed by ESI. "
- A complete set of its advertisements (print or other media) pursuant
to the programs or services to be billed by EBI.
- Applicable fulfillment package (which must include cancellation
information if not included elsewhere and a toll free Client service
telephone number)
- Complete scripts for sales verification, Client shall not change
scripts or programs without first providing changes to EEI.
- Honest, clear, and understandable text phrase for appearance on the
xxxx.
NOTE: EBI will not provide billing for services employing the following
practices and Client hereby agrees it will not provide Billing Transactions
to EBI for the following:
- Box, sweepstakes, or contest - type entry forms.
- Negative option sale offers.
- 800 pay-per-call
- Collect callback
- Phantom billing (charging for calls never made or services never
provided).
- Such other programs, products, or services that regulatory agencies,
EBI or Telcos, where applicable, determine to be deceptive to
consumers.
- CONFIDENTIAL - Page 13
EXHIBIT "C"
BILLING AND COLLECTIONS GUIDELINES
----------------------------------
3. COMPLIANCE MONITORING
EBI requires Client to:
- Minimize End-User inquiries and complaints it receives.
- Minimize End-User complaints to government agencies.
- Maintain up-to-date records regarding complaints and inquiries that it
receives.
- Promptly adopt action plans to respond to complaints and inquiries,
- Assist and cooperate with investigations of End-User disputes,
- Promptly cease billing any recurring charges to an End-user when there
is a clear indication that such End-User is no longer utilizing
Client's product or service.
4. MANDATORY AUTHORIZATION!
Where State or Federal agencies (or Telcos, Where applicable) require
consumer pre-authorization for the services, products or programs provided
by Client, Client must employ one of the following forms of authorization.
Such authorization must be retained for a period of two (2) years and made
available upon request. Additionally, if State/Federal agencies or Telcos
amend their requirements, Client is responsible for its full compliance
thereto:,
- Recorded independent third party verification
- Written or electronic letter of authorization (LOA)
- Written or electronic sales order
- Voice Recording of telephone sales authorization,
An authorization must legibly include the following to be valid;
- The date of authorization.
- The telephone number and, where practical, name and address of the
consumer.
- Assurance that the consumer is qualified to authorize billing.
- A complete description of the product or service,- A description of
the applicable charges.
- An explicit acknowledgment by the consumer as to how the charges for
the product or service will appear on his/her xxxx.
- Affirmative acceptance by the consumer of the offer.
- A toll-free number that subscribers may call to make inquiries
concerning the service.
In addition, authorization verified by an independent third party must
include;
- An initial statement that the purpose of the verifications is to
confirm the consumer's intention to accept the sales offer.
- A statement that the service provider is not affiliated with o LEG,
where there is no affiliation.
- A unique consumer identifier.
- A review by third party personnel of the entire verification where the
verification is automated,
An Independent third party verifier must meet the following criteria:
- It must be completely independent of the service provider and the
telemarketer,
- It must not be owned, managed, controlled or directed by Client or the
telemarketer.
- It must not have any financial incentive in the completion of the
sale.
- It must operate in o location physically separate from the service
provider and the Telemarketer.
- CONFIDENTIAL - Page 14
EXHIBIT "C"
BILLING AND COLLECTIONS GUIDELINES
----------------------------------
5. HIGH STANDARD BILLING PRACTICES
Central to a consumer's right to ensure that they have not been billed
inappropriately is the ability to understand and read the xxxx. Client
shall use it's best efforts to ensure that the information provided to EBI
fairly and accurately describes the service(s) provided to the End-User
including, but not limited to:
- Identification of the Client providing the services.
- Detailed description of products or services.
- Detailed identification of the charges.
6. END-USER SATISFACTION
As End-Users must be able to easily and quickly address potential billing
disputes, EBI may provide the End-User or a regulatory agency on request;
- The name, address, phone number and fax number of the Client.
- The nature of any charge
- The method of authorization.
- Information as to how an End-User may cancel a service or product.
In conjunction with the Agreement EBI, or Client, will provide:
- A toll-free customer service number.
- Dedicated staff to respond to End-Users inquiries,
- Full and timely investigation Of any written dispute.
- A credit or response to the End-User within 30 days of the End-User's
dispute.
7. DISCLOSURE
Client hereby agrees that EBI may share the following with federal and
state enforcement agencies:
- Identifying information with respect to terminated billing for Client
programs or services.
- A description of specific problems relating to "Slamming" or
"Cramming" that EBI has encountered, and the steps taken to correct
such problems.
- Summary and detailed data with regard to End-User complaints,
inquiries and Adjustments.
8. REIMBURSEMENT TO EBI
Client acknowledges and agrees to fully reimburse EBI, within ten (10)
days, any fines or penalties charged EBI by Telcos and/or Stale/Federal
agencies pursuant to Client's Billing Transactions billed by EBI.
(These guidelines may be amended from time-to-time by EBI providing thirty (30)
days prior written notice. If such changes have a material adverse effect on
----------------------------------------------
Client's ability to market its services. Client may immediatelyterminate this
-----------------------------------------------------------------------------
Agreement without penalty.)
--------------------------
- CONFIDENTIAL - Page 15
SCHEDULE II-Service Order for PhoneBill SERVICES (TELCO BILLING)
---------------------------------------------------------------
This Service Order for PhoneBill Services ("Service Order") shall be
effective as of the Effective Date of the Agreement (the "Order Date"). This
Service Order may be terminated by either party, as of the end of the
then-current Term of the Agreement, by providing written notice to the other
party at least 90 days prior to the end of such current Term. Otherwise, this
Service Order shall remain in full force and effect until termination of the
Agreement.
1. SERVICE ORDER SUMMARY. This Service Order shall generally include;
----------------------
i) submission of Client's valid Billing Transactions to Telcos for billing and
collection, ii) processing of Unbillables, Adjustments and Uncollectables as
such terms are defined herein, iii) database administration to support End-User
Inquiry, iv) reconciliation and settlement of amounts due to Client with respect
to the Billing Transactions, and v) standard reporting arid tracking for each
Account established by Client.
2. TELCO SUBMISSION. UMBILLABLES. EBI shall submit to
---------------------------------
the Telcos those Billing
Transactions of Client that have passed the EBI Edit Process and represent
Client Service that have been pro- approved by EBI and/or the Telcos where
applicable, Telcos may subject Client's Billing Transactions, submitted to it by
EBI, to its own edit process and either be unable or unwilling to xxxx certain
transactions (each an "Unbillable") even though such Unbillable transactions
passed the EBI edit process. Unbillables returned to EBI in an electronic format
by the Telco will be returned to Client in a similar format. EBI shall xxxx no
further responsibility for such Unbillable transactions except, however, if
Billing Transactions are deemed Unbillable due to EBI's error or omission, EBI
shall correct and resubmit such Billing Transactions at no additional charge to
Client, Unbillables shall be applied to the settlement of amounts due Client in
accordance with the methodology set forth on Exhibit II-B attached hereto.
3. INQUIRY SUPPORT, ADJUSTMENTS. A separate service order to cover
-----------------------------
End-User Inquiry is attached to the Agreement as Schedule VI, Notwithstanding
the previous sentence, each Telco reserves the right to perform End-User Inquiry
pursuant to the applicable Billing Contract, As a result of End-User Inquiry
services or otherwise as initiated by either party or a Telco, EBI shall process
Adjustments, as such term is defined on Exhibit A to the Agreement, and
incorporate the amount of such Adjustments into the settlement of amounts due to
Client Adjustments initiated by a Telco and reported to EB1 snail De applied to
Client in accordance with the methodology set forth on Exhibit II-B attached
hereto.
4. HOLDBACK, TRUE-UP, UNCOLLECTABLES. Telcos may withhold, from the
----------------------------------
gross deposited dollars, a reserve amount to cover anticipated write-offs of
uncollectible End-User accounts ("Uncollectable"), which may be realized some
time in the future. EBI shall withhold a similar amount from funds otherwise due
to Client (the "Telco Holdback") in order to cover amounts withheld by Telcos.
The Telco Holdback rate shall be
- CONFIDENTIAL - Page 16
initially sot at ten percent (10%) of the gross value of Client's Billing
Transactions. The Telco Holdback rate may be modified from time to time by EBI
based on a reasonable analysis of Client's Billing Transactions. From time to
time, Telcos will conduct a reconciliation of the amounts held back compared to
actual Uncollectables realized for a particular period (a "Telco True-Up"} and
may subsequently revise their reserve races as well as collect from or refund to
EBI any difference between the amounts withheld by such Telcos and the actual
Uncollectables. After a Telco performs its Telco True-Up and reports the results
to EBI, EBI will similarly reconcile the Telco Holdback amount with the realized
Uncollectables pursuant to the methodology contained in Exhibit II-E {each such
reconciliation a "True-Up"). EBI shall include the results of such True-Ups on a
summary report to Client, True-Up results reflected on the summary report shall
be incorporated into the settlement of amounts due to Client, as further
described in Section 6, hereunder.
5. OTHER DEDUCTIONS.
-----------------
a) Telco Fees. EBI shall be entitled to recover from or
-----------
pass-through to Client, all Telco- imposed processing and other charges
associated with Client's Billing Transactions ("Telco Fees"). The Telco fees are
set forth on Exhibit II-D hereto.
b) EBI Reserve. EDI may withhold, from any amounts otherwise due
------------
to Client, an amount necessary to fund the EBI Reserve. The EB! Reserve rate for
each Account under this Agreement will initially be established at four percent
(4%) of gross value of Client's Billing Transactions, EBI may, in its reasonable
discretion, adjust the EBI Reserve requirement for any Account, Such adjustment
may be accomplished by either; (i) adjusting the previously established reserve
percentage for such Account; (ii) adjusting or offsetting the EG! Reserve for
another Account; (iii) invoicing Client directly for additional amounts
required; or (iv) reimbursing Client for excess amounts, if applicable. With
respect to Client's Billing Transactions, certain Telco's may require a reserve
for Unbillables and/or Adjustments exceeding certain thresholds. This
requirement may necessitate an increase in the ebi Reserve. If applicable, this
increase shall be based on Client's actual Unbillable and/or Adjustment
experience over a three (3) month period for the subject Telcos. The adequacy of
this component of the EBI Reserve shall be reviewed on a quarterly basis and
determined based on Client's actual experience of Unbillables and/or Adjustments
in the prior quarter for the relevant Telcos.
6. SETTLEMENT OF AMOUMTS DUE. Client Shall be entitled to the gross value
---------------------------
of the Billing Transactions remitted to the Telcos less any applicable
Unbillables, Adjustments, Telco Holdback, excess Uncollectables (pursuant to any
True-ups), Fees, Telco Fees and EBI Reserves (the difference being the "Net
Proceeds"). On or before the 60th day following the end of a Deposit Month, EBI
shall transfer, by wire to Client's designated bank account, an estimate of the
Net Proceeds relating to such Deposit Month. Within thirty (30) days thereafter,
EBI shall reconcile the estimated amount paid to Client with the actual Net
Proceeds for the subject Deposit Month and apply any corrections to a subsequent
payment event. All wire instructions from Client to EBI shall be in writing
signed by a duly authorized representative of Client. In the event that the
- CONFIDENTIAL - Page 17
calculation of Net Proceeds yields a negative amount, EBI's reporting to Client
of such negative amount shall be deemed an invoice for same and Client shall,
within fifteen (15) days, reimburse EBI for such negative amount. In addition to
the Net Proceeds, Client shall be entitled to any excess Telco Holdback from
prior period True-ups and any excess EBI Reserve as set forth below:
(a) Periodic EBI Reserve Remittance. No later than thirteen (13)
-----------------------------------
months from the end of a given Deposit Month ("Roll-Down Month"), EBI shall
apply fifty percent (50%) of the Roll-Down Month's EBI Reserve, by Account
Number, to Client's Account, At the 181h month from the close of a Roll-Down
Month, EBI shall apply the balance of the Roll-Down Month's EBI Reserve, by
Account Number, to Client's Account.
7. REPORTS.
--------
(a) Standard Reporting. EBI agrees to provide Client with EBI's
-------------------
standard reports identified in Exhibit II-C attached hereto and incorporated
herein. Client may request that EBI provide additional reports or a different
formatted report. To the extent EBI can comply with such request with reasonable
effort, EBI shall supply such reports at an additional charge based upon the
time and expense to be mutually agreed upon by the parties.
(b) Report Review. Client agrees that it is solely responsible
--------------
for inspecting and reviewing all reports provided by EBI within sixty (6O) days
of receipt by Client. Client's failure to report any errors; or inconsistencies
with respect to such reports within such timeframe shall constitute acceptance
by Client.
(c) Report Detail. Client acknowledges and agrees that (i) the
--------------
individual Telcos may not always provide definitive detail to EBI for amounts
the Telco deems to be Unbillables, Adjustments, or Uncollectables, (ii) EBI
shall not be held to a higher standard of accounting pertaining to Telco
performance as that provided by the individual Telco, and (iii) EBI's
methodology contained in Exhibit II-B associated with the determination of
Client's share of Unbillables, Adjustments or Uncollectables is reasonable and
appropriate given the detail received from the individual Telco.
(d) Audit. Upon 30 days prior written notice by Client, but no
------
more frequently than once during a twelve (12) month' period, Client shall have
access to EBI's records pertaining to Client's Billing Transactions, including,
but not limited to, the information EBI receives from Telcos, The audits
conducted hereunder shall be at Client's solo cost and expenses provided,
however, it an audit reveals that amounts due to Client were understated by more
than 10% for the period audited, then EBI shall, in addition to promptly paying
to Client the understated amount, reimburse Client for all reasonable
out-of-pocket audit costs. Notwithstanding any of the foregoing, Client shall
have no right to audit any EBI records pertaining to periods more than eighteen
(18) months prior to the date of notice of such audit.
8. BILLING APPEARANCE. Where 3 Telco provides the capability,
-------------------
Client's Billing Transaction shall appear on such Telco's subscriber bills under
the name designated in writing by Client for each Account Number.
- CONFIDENTIAL - Page 18
9. TELCO CONFEIDENTIALITY Client hereby acknowledges and agrees that,
----------------------
without authorization from a Telco, Client shall not publish or use the name,
service xxxx or trademark of any Telco in its advertising, telemarketing, direct
mail or other promotions or make any misrepresentations concerning an
affiliation with any Telco with regard to the Billing Transactions or Client's
Services, in the event of a violation of this section, Client shall pay to EBI,
as liquidated damages, for loss of reputation and business good will, and not as
a penalty, $10,000 for each such violation.
{- End of Schedule II. Exhibits follow. Remainder of page intentionally left
blank - }
- CONFIDENTIAL - Page 19
EXHIBIT "II-A"
Telco Billing Contracts
-----------------------
Ameritech - Ohio Xxxx NYNEX - New England Tel
- Michigan Xxxx - New York Tel
- Xxxxxxx Xxxx
- Wisconsin Xxxx Pacific Xxxx - Pacific Xxxx
- Illinois Xxxx - Nevada Xxxx
Xxxx Atlantic - New Jersey Tel Southwestern Xxxx
- Xxxx PA
- Diamond State U.S. West - Northwest Xxxx
- C&P DC - Mountain Xxxx
- C&P MD - Pac XX Xxxx
- C&P VA
- C&P WVA Alltel
Xxxx South Cincinnati Xxxx
GTE - GTE North Illuminet
- GTE Florida
- GTE South NECA
- GTE South West
- GTE California SNET
- GTE West
- GTE North West Sprint United - United Florida
- GTE Hawaii - CT & T
- United Indiana
- United Midwest
GTE Contel - GTE North Contel
- GTE South Contel
- GTE S-W Contel Telecom Canada
Citizens Telephone
All programs are subject to initial and continuing Telco approval and can be
terminated at any time. Additional Telcos may be available for service, subject
to Telco approval, upon EBI review and recommendation. The above information is
generally current at the time of printing and is to be used for informative
purposes only. The information contained in this Exhibit is subject to change
without notice. Inclusion in the above list docs not indicate or imply that the
name Telcos approve the program(s) contemplated under this Agreement, EBI makes
no promise or guarantee that this information is constant, permanent, all
inclusive and/or final.
- CONFIDENTIAL - Page 20
EXHIBIT "II-B"
TELCO RETURNS
-------------
MATCHING PROCESS & ALLOCATION METHODOLOGY
-----------------------------------------
Rejects:
--------
Full Key: Xxxx To Number (BTN)
Originating Number Terminating Number Call Date
Call Time (Seconds excluded)
Call Duration (Seconds excluded)
A reject call record that matches a history record based on the above Full Key
is considered an exact match and is returned to the Client with the EBI return
code in position 70-71,
Unbillables:
------------
Full Key: Xxxx To Number (BTN)
Originating Number Terminating Number Call Date
Call Time (seconds excluded)
Call Duration (seconds excluded)
An unbillable call record that matches a history record based on the above
FullKey is considered matched and is returned to the Client with the EBI return
code in position 70-71.
If the total matched data is less than the unbillable amount charged by the
Telco, a non-specific allocation is applied to the shortfall. The non-specific
allocation methodology is based on each Client's specific unbillable experience
compared to the total specific unbillable amount for each particular Telco.
ADJUSTMENTS 45O1XX:
-------------------
PASS # 1-FULL KEY: XXXX TO NUMBER (BTN)
Originating Number Terminating Number Call Date
Call Time (seconds excluded)
Call Duration (seconds excluded)
An adjustment call record that matches a history record based on the above Full
Key is considered matched and is returned to the Client with the original call
record that it matched.
Pass # 2-Partial Key: Xxxx To Number (BTN) - Optional\Required
Originating Number - Optional\Required
Terminating Number - Optional
Call Date - Optional
Call Time - Optional
Call Duration - Optional
- CONFIDENTIAL - Page 21
EXHIBIT "II-B"
TELCO RETURNS
-------------
Matching Process & Allocation Methodology
------------------------------------------
An adjustment call record that matches a history record based on matching a
minimum of four (4) keys, which must include one (1) of the Optional\Required
keys in the above Partial Key, is considered matched and is returned to the
Client with the original call record that it matched. The adjustment amount may
not be greater than the history record amount.
Xxxx # 0- Xxxxxx Xxx: Xxxx To Number (BTN) - Optional/Required
Originating Number - Optional/Required
Terminating Number - Optional/Required
Call Date - Optional
Call Time - Optional
Call Duration - Optional
An adjustment call record that matches a history record based on matching a
minimum of four (4) keys, which must include one (1) of the Optional/Required
keys in the above Matrix Key is considered matched and is returned lo the Client
with the original call record' that it matched, The adjustment amount may not be
greater than the history record amount.
All BTN's contained in Telco Returns are compared to a BTN split table to
determine if BTN was involved in an area code split. If the BTN was involved in
an area code split, the previous & current NPA is utilized in the matching
process.
All adjustment call records that fail the Full, Partial or Matrix Key matching
process are combined with the 4550XX adjustment records and are matched
utilizing the Bulk Match process,
ADJUSTMENTS 455OXX:
-------------------
Bulk Match Key: Xxxx To Number (BTN)
Call Date
CIC
Bulk logic is a one-to-many matching process and utilizes the call date to
-----------
determine the calls eligible for matching. All call dates equal or older than
--------------
the Telco taps date are considered eligible. Matching is conducted in LIFO order
up to the value of the adjustment call record. Matched call records are
eliminated from the eligible pool after they have been adjusted to their
original value, This elimination is based on the process run xxxx regardless of
the number of files (tapes) being processed for a given Telco within a
particular run.
An adjustment call record that matches a history record based on Bulk Match
logic is returned to the Client with the original call record or records that it
matched. Because the Bulk Match logic will allow matching to many records, it
also allows matching to one or more Clients. Therefore, the returned 4550XX
adjustment record may be included in more than one Clients return detail
information.
If the total combined matched data is less than the adjustment amount charged by
the Telco, a non-specific allocation is applied to the shortfall. The
non-specific allocation methodology is based on each Client's specific
adjustment percentage in comparison to the total specific adjustment.
- CONFIDENTIAL - Page 22
EXHIBIT "II-B"
TELCO RETURNS
-------------
MATCHING PROCESS & ALLOCATION METHODOLOGY
-----------------------------------------
If the Telco fails to provide data for the End-User adjustments, and therefore
no matching can be performed for that particular Telco, EBI will utilize the
following methodology to allocate the adjustment amount reflected on the Telco
PAR statement. The non-specific allocation methodology is based on the
understanding that when a Telco reports End-User adjustments on the PAR
statement, those adjustments are generally related to xxxxxxxx from both the PAR
month and the month prior to the PAR month. Therefore, EBI uses each Client's
billing activity for these two months, coupled with an historical adjustment
percentage for each Client, as the basis for the allocation of the nun-specific
adjustments.
For instance, if the Telco reports End-User adjustments on the October PAR
statement, EBI would use June, July and August to derive an historical
adjustment experience percentage by Client, This would result in a basis for
allocation applied to September and October billing which would generate the
non-specific allocation percentage for each Client that is utilized in the
reconciliation of the October PAR.
To determine the non-specific adjustment allocation percentage for each Client,
EBI performs the following steps:
Step 1 - Identify all Clients that deposit to that particular Telco for the
given two-month period.
Step 2- Determine the actual xxxxxxxx deposited for each Client to that
particular Telco as the basis for allocation.
Step 3 - For all Clients identified in Step 2, determine the historical
adjustment percentage. This percentage is based on the Telcos that have
provided each Client with a 50% or higher of detailed adjustments.
Step 4 - Multiply the actual xxxxxxxx amount in Step 2 by the historical
adjustment percentage in Step 3 for each Client.
Step 5- Determine each Client's percentage of the sum total of the Step A
calculation.
Step 6 - Allocate the non-specific adjustment for that particular Telco
based on the weigh led percentages determined in Step 5.
For example, XYZ Telco has applied $50,000 adjustment amount to the PAR without
supporting data. The Clients who deposited in XYZ Telco would receive allocation
in the following manner:
- CONFIDENTIAL - Page 23
EXHIBIT "II-B"
Telco Returns
-------------
Matching Process & Allocation Methodology
-----------------------------------------
Step 1 Step 2 X Step 3 = Step 4 Step 5 Step 6
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
Client # Xxxxxxxx- Historical Step 2 x Each Clients' $ Allocated
Deposited Adjust % Step 3 contribution in (% in Step
With XYZ Telco >50% relation to total 5x
Telco for supporting in Step 4 (% of 123,200) $ 50,000)
Sept & detail for
October June, July &
August
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
111 $ 55,000 X 10% = $ 5,500 4.46% $ 2,230
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
222 $ 160,000 X 15% = $ 24,000 19.48% $ 9,740
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
333 $ 35,000 X 22% = $ 7,700 6.25% $ 3,125
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
445 $ 220,000 X 35% $ 77,000 62.5% $ 31,250
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
555 3300,000 X 3% = $ 9,000 7.31% $ 3,655
-------- ---------- --- ------------- ---- ========= ======================== ============
$ 123,200 100.00% $ 50,000
--------- ------------------------ ------------
Uncollectibles 4601XX & 4650XX (Used for True-Ups):
---------------------------------------------------
Write-Off Match Logic: Xxxx To Number (BTN)
Call Date
CIC
Uncountable write-off logic is a one-to-many matching process and utilizes the
write-off date to determine the calls eligible for matching. All call dates
equal or. older than the write-off record date are considered eligible. Matching
is conducted in "last-in-first-out" order up to the value of the write-off
record. Matched call records eliminated, from the eligible pool after they
have been adjusted to their original value. This elimination is based on the
process run date regardless of the number of files (tapes) being processed for a
given Telco for a particular run.
A write-off record that matches a history record based on write-off logic is
returned to the Client with the BTN, write-off date and matched amount. The
total of all matched write-offs is referred to as the "Specific Write-Off".
If the total of all Client's Specific Write-Offs is less than the write-off
amount charged by the Telco, a "Non-Specific Write-Off" is applied to each
Client for the shortfall. The Non-Specific Write-Off is based on each Client's
Specific Write-Off in comparison to the total of all Specific Write-Offs. For
example, if a Client's Specific Write-Off is 10% of the total of all Specific
Write-Offs, then they will be allocated a Non-Specific Write-Off of 10% of the
aforementioned shortfall. The Client's Specific Write-off and Non-Specific
Write-Off together make up the Client's "Write-Off Allocation" for a particular
True-Up.
If the Telco fails to provide adequate data for the write-off matching and,
therefore, no matching can be performed for that particular Telco, EBI will
utilize the following methodology to determine the Write-Off Allocation, used to
apply the write-off amount reflected on the Telco PAR statement. Client will
only be responsible for the write-off for customers it billed (BTN's). This
non-specific write-off allocation methodology is based on each Client's
experience of detailed write-offs over a 12 month period, for Telcos that do
provide write-off detail, coupled with each Client's billing activity for the
three months prior to the Telco write-off date.
- CONFIDENTIAL - Page 24
EXHIBIT "II-B"
Telco Returns
-------------
Matching Process & Allocation Methodology
-----------------------------------------
To determine the non-specific write-off allocation percentage for each Client,
EBI performs the following steps:
Step 1 - Identify all Clients that deposited to that particular Telco for
the applicable months.
Step 2- Identify each Client's deposited dollars to that particular Telco
for the applicable month:.
Step 3 - For ail Clients identified in Step 1, determine each Client's
historical write-off percentage based on the various Telcos that have
provided each Client with 50% or greater of actual write-off detail over a
12 month period.
Step 4- Multiply the deposit amount in Step 1 by the write-off percentage
in
Step 3 For each Client.
Step 5 - Determine each Client's percentage of the sum total of the Step 4
calculation.
Step 6 -Allocate the non-specific write-off amount for the Telco based on
the weighted percentage:-. determined in Step 5.
For example, XYZ Telco has applied 350,000 write-off amount to the PAR statement
without supporting detail. The Clients who deposited in XYZ Telco for this time
period would receive allocation of the 550,000 in the following manner:
Step 1 Step 2 X Step 3 = Step 4 Step 5 Step 6
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
Client # Actual Historical Step 2 x Each Clients' $ Allocated
Billing Write-Off % Step 3 contribution in (% in Step
Deposited Telco >50% relation to total 5x
In XYZ supporting in Step 4 (% of 123,200) $ 50,000)
Telco detail
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
111 $ 55,000 X 10% = $ 5,500 4.46% $ 2,230
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
222 $ 160,000 X 15% = $ 24,000 19.48% $ 9,740
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
333 $ 35,000 X 22% = $ 7,700 6.25% $ 3,125
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
445 $ 220,000 X 35% $ 77,000 62.5% $ 31,250
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
555 3300,000 X 3% = $ 9,000 7.31% $ 3,655
-------- ---------- --- ------------- ---- --------- ------------------------ ------------
$ 123,200 100.00% $ 50,000
------------------------ ------------
True-Up Procedure:
Once Clients Write-Off Allocation has been determined, it is compared to the
Telco Holdback reserved for (he period being trued-up, and the difference, if
any, is reported on a True-Up Summary report. A positive difference (i.e. Telco
Holdback was greater than the Write-Off Allocation) will be remitted to Client,
while 3 negative difference (i.e. Telco Holdback was less than the Write-Off
Allocation) will be paid by Client.
- CONFIDENTIAL - Page 25
EXHIBIT "II-C"
DELIVERY Schedule of Reports & Data Files
-----------------------------------------
The following reports and data files are available via FTP:
Report/Data File Day Available
---------------- -------------
Confirmation Report Within 24 hours of Client posting
Call Acceptance Transmittal Data File Friday and/or Tuesday by 5:00pm PST
Edit Reject Data File Friday and/or Tuesday by 5:00pm PST
IGT Inquiry Services Data Files Monday After 5:OQpm PST
IGT Cancellation Request Data Files Monday thru Friday (if applicable) by 5:00pm PST
Telco Unbillable Data Files Friday After 5:00pm PST
Telco Adjustment Data Files Friday After 5:00pm PST
Credit Unbill Data File Thursday After 5:00pm PST
Telco Uncollectable Data Files Friday by 5:00pm PST
Payment Summary Data File Thursday After 5:00 PST
Payment Unbill Data File Thursday After 5:00 PST
Payment Recourse\Holdback Data File Thursday After 5:00 PST
The Following reports are available on
--------------------------------------
the online web directory
------------------------
Deposit
-------
Call Acceptance Summary Friday and/or Tuesday by 5:00pm PST
Special Message Summary Friday and/or Tuesday by 5:00pm PST
Chargeback Monday After 5:00pm PST
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Integretel Adjustment Summary Monday After 5:00pm PST
Integratel inquiry Comments Monday After 5:00pm PST
LEG Adjustment Summary Monday After 5;00pm PST
LEG Unbills Summary Monday After 5:00pm PST
LEG Write Off Summary Monday After 5:00pm PST
LEG Recovery Summary
Settlement Wednesday After 5:00pm PST
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Monthly Performance Status Report Wednesday After 5:00pm PST
Settlement Statement Report Wednesday After 5:00pm PST
Settlement Status Report Wednesday After 5:00pm PST
Settlement Status Excef Spreadsheet Wednesday After 5:00pm PST
Payment Summary Report Wednesday After 5:00pm PST
Payment Summary Excel Spreadsheet Wednesday After 5:00pm PST
Unbiil Report Wednesday After 5:00prn PST
Unbiil Excel Spreadsheet Wednesday After 5:00pm PST
Recourse\Holdback Report Wednesday After 5:00pm PST
Recourse\Holdback Excel Spreadsheet Wednesday After 5:00pm PST
True-Up Summary Reports Wednesday After 5:00pm PST
Telco Returns Detail Listing Spreadsheet Wednesday After 5:00pm PST
Detail Reconciliation Report Wednesday After 5:00pm PST
True up Summary (Actual) Report
- CONFIDENTIAL - Page 26
EXHIBIT "II-D"
Telco Fees
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Interstate Interstate Bulk 4250 SSM 010118 Pay/Call 010116 End-User
Telco Group SID Telco Name Xxxx Xxxxxx Per Msg. Per Msg. Per MSg. Per Msg. Per Msg. Adjust
Ameritch 9321 Ohio Xxxx 0.4879 0.0535 0.0535 0.1070 0.1070 0.2996 9.63
9323 Michigan Xxxx 0.4560 0.050 0.050 0.100 0.100 0.2800 9.00
9325 Xxxxxxx Xxxx 0.4560 0.050 0.050 0.100 0.100 0.2800 9.00
9327 Wisconsin Xxxx 0.4560 0.050 0.050 0.100 0.100 0.2800 9.00
9329 Illinois Xxxx 0.4560 0.050 0.050 0.100 0.100 0.2800 9.00
Verizon 9102 New Eng Tel 1.1100 0.020 0.020 0.1350 0.1350 0.2500 15.00
9104 New York Tel 1.1100 0.020 0.020 0.1350 0.1350 0.2500 15.00
9205 New Jersey Tel 1.1100 0.020 0.020 0.1350 0.1350 0.2500 15.00
9208 Xxxx Penn. 1.1100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
0000 Xxxxxxx Xxxxx 1.1100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
9211 C&P DC 1.1100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
9212 C&P MD 1.1100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
9213 C&P VA 1.1100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
9214 C&P WVA 1.1100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
Xxxx Xxxxx 0000 Xxxx Xxxxx 0.0000 0.0390 0.0390 .079+2.5% 0.0390 .079+2.5% 6.40
GTE Companies 169 GTE North 0.9100 0.0200 0.0200 0.135 0.135 0.2500 15.00
328 GTE Florida 0.9100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
479 GTE South 0.9100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
2080 GTE S-West 0.9100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
2319 GTE California 0.9100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
2320 GTE West 0.9100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
2416 GTE N-West 0.9100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
3100 GTE Hawaii 0.9100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
GTE Contel 170 GTE N-Contel 0.9100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
480 GTE S-Contel 0.9100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
2081 GTE SW Contel 0.9100 0.0200 0.0200 0.1350 0.1350 0.2500 15.00
Citizens Tel 2308 Citizens Tel - .1275 .1275 .3775 .1275 0.3775 -
Pacific Xxxx 9740 Pacific Xxxx .3632 0.0300 0.2800 9.00
Nevada Xxxx 9742 Nevada Xxxx 0.4632 0.0300 0.6500 9.00
Southwestern Xxxx 9533 S-West Xxxx 0.4132 0.0300 0.0300 0.2800 0.3000 0.2500 9.00
U.S. West 9631 North West Xxxx 1.4500 0.0000 0.0000 0.0000 0.0000 0.0000 1.250
9636 Mountain Xxxx 1.4500 0.0000 0.0000 0.0000 0.0000 0.0000 1.250
9638 PAC X-X Xxxx 1.4500 0.0000 0.0000 0.0000 0.0000 0.0000 1.250
Antel 9995 Alltel 0.6890 0.0925 0.0925 0.0925 0.0925 0.0975 -
Cincinnati Xxxx 9348 Cincinnati Xxxx 0.7300 0.3300 0.3300 0.3300 0.3300 0.0330 15.00
Illuminet 9999 Illuminet - 0.800 0.800 0.800 0.800 0.800 -
NECA 9996 NECA - 0.550 0.550 0.550 0.550 0.550 -
SNET 9147 SNET 0.5533 0.1174 0.1174 0.1174 0.1174 0.2968 -
Sprint United 341 United Florida 0.4100 0.200 0.200 0.200 0.200 0.200 2.00
470 Carolina AT&T 0.4100 0.200 0.200 0.200 0.200 0.200 2.00
000 Xxxxxx Xxxxxxx 0.4100 0.200 0.200 0.200 0.200 0.200 2.00
0000 Xxxxxx Xxxxxxx 0.4100 0.200 0.200 0.200 0.200 0.200 2.00
Telcom Xxxxxx 0000 Xxxxxx Xxxxxx - 0.560 0.560 0.560 0.560 0.560 -
Above information is current at the time of printing and is to be used for
informative purposes only. The information contained in this exhibit is
consisten, permanent, all inclusive and/or final and is subject to change
without notice.
The US West End-User Adjustment Fee is based on each line item adjusted
- CONFIDENTIAL - Page 27
SCHEDULE VI - SERVICE Order for END-USER INQUIRY
------------------------------------------------
This Service Order for End-User Inquiry ("Service Order") shall be
effective as of the Effective Date of the Agreement ("Order Date") and shall
remain in full force and effect as long as there is in effect a valid service
order for either PhoneBill or DirectBill services.
1. SERVICE ORDER SUMMARY. This Service Order shall generally
----------------------
include: i) Referral or transfer of End-User inquiries to Client, ii) Handling
by EBI of End-User Inquiries under certain circumstances in accordance with
Inquiry Guidelines and Inquiry Standards, each as defined herein.
2. CLIENT-HANDLED INQUIRIES. Client may elect, by written notice
-------------------------
to EBI, to provide Us own End-User Inquiry support provided, however, that
Client is able to continually meet the performance requirements set forth on
Exhibit Vl-A (the "Inquiry Standards"), attached hereto. EBI shall refer or
transfer End-User Inquiries to Client based on mutually agreeable procedures.
Notwithstanding the previous sentence, in the event that an End-User refuses to
be referred or transferred to Client or otherwise initiates a subsequent Inquiry
and expresses dissatisfaction with Clients handling of such End-User's original
Inquiry, than EGI may handle such subsequent Inquiry in accordance with the
Inquiry Guidelines. If EBI determines, in its reasonable discretion, that
Client's End-User Inquiry support is unsatisfactory, EBI may elect to provide
End-User Inquiry support immediately upon written notice to Client.
3. EHANDLED INQUIRIES. in the event Client has not elected to
-------------------
handle End-User Inquiries or if otherwise Client has been unable to meet the
performance requirements set forth above, then EBI shall handle End-User
Inquiries in accordance with its standard procedures or otherwise as mutually
agreed to by the parties (the "Inquiry Guidelines"). Client agrees to cooperate
with EBI with respect to End-User Inquiries including, without limitation,
providing originating numbers, locations, applicable rate tables, and detailed
written and/or electronic End-User authorizations, such as letters of agency, as
requested by EBI. EBI and Client shall establish a contact within each
organization for the purpose of resolving End-User Inquiries. When subscription
authorization is required, Client shall provide EBI with a toll-free number
and/or a data file to access End-User subscription information.
(a) Adjustments. EBI shall use reasonable efforts to sustain
------------
billing charges in accordance with the inquiry Guidelines. However, EBI shall
not be required hereunder to commence any litigation or take any other form of
action to enforce collection of bills rendered to End-Users except as expressly
provided in an applicable service order between the parties.
(b) Regulatory Complaints. EBI shall respond to any
----------------------
regulatory complaints made by End-Users and forwarded to EBI by a regulatory
agency and shall provide a copy of such response to Client upon request.
{- End of Schedule VI. Exhibits follow. Remainder of page intentionally left
blank. -}
- CONFIDENTIAL - Page 28
EXHIBIT "VI-A"
INQUIRY STANDARDS
-----------------
End-User inquiry shall be performed by Client or EBI (each in this context a
"Provider") in accordance with the following Inquiry Standards:
1. Provider shall maintain a toll-free telephone number through which
End-User's initiate inquiries. Where practical, such number shall be
prominently displayed on the End-User's xxxx.
2. Provider shall answer 80% of all End-User Inquiries, with a live Client
service agent, within 90 seconds.
3. Provider shall have adequate Client service staff available to support
End-User Inquiries between the hours of 8:00 am and 5:00 pm for all time
zones where End-Users reside.
4. Provider shall not allow calls to be routed to a voicemail! function during
required service hours (live agent must answer all calls).
5. Provider shall maintain a call abandon rate less than or equal to 5% of
inbound calls.
6. Provider shall respond to written End-User Inquiries, in writing, within 15
days of receipt.
- CONFIDENTIAL - Page 29
