E-33
Exhibit No. 20
Form 10-SB
Amendment No. 1
XXX, Inc.
File No. 0-26917
I-LINK WORLDWIDE, INC
WEALTHNET INCORPORATED
STRATEGIC MEMBER RESELLER AGREEMENT
THIS STRATEGIC MEMBER RESELLER AGREEMENT is made and entered
into this of 31st day of January, 1997, to be effective as of the
1st day of January, by and between I-LINK WORLDWIDE, INC. (I-
Link), a Utah corporation located at 00 Xxxx Xxxxxxxxx Xxxx
Xxxxx, Xxxxxx, XX 00000, and WEALTHNET INCORPORATED
("WealthNet"), a Utah corporation located at 0000 Xxxx Xxxxxx
Xxxxx, Xxxxx 0000 Xxxx, Xxxxxxx 00000.
WHEREAS, I-Link is a provider of telecommunications services
(the "Services") and products (the "Products"); and
WHEREAS, WealthNet is an organization that seeks to provide
various services and products to people who join its organization
as members (the "Members"); and
WHEREAS, WealthNet desires to secure the right to market and
sell to its Members I-Link's Services and Products; and
WHEREAS, I-Link is willing to appoint WealthNet a Strategic
Members Reseller for such purpose upon the terms and conditions
hereinafter set forth;
NOW THEREFORE, in consideration of the mutual promises and
covenants contained herein, the parties agree as follows;
1. LICENSE AND APPOINTMENT. Subject to the terms and
conditions herein set forth, I-Link hereby grants WealthNet the
non-exclusive fight and license to market and sell, as an
authorized Strategic Member Reseller the I-Link Services and
Products
2. DIVISION OF RESPONSIBILITIES. WealthNet shall provide all
data entry services and shall timely provide the same to I-Link.
I-Link shall provide all provisioning, tariffing, negotiating and
securing LEC agreements, billing and collection services status
tracking, accounting and reporting, and, at the expense of
WealthNet as set forth below. Customer service and support. I-
Link shall dedicate and train a team of its employees to uniquely
work with WealthNet and its Members on all issues of
provisioning, customer service, billing and collecting (the "I-
Link WealthCom Team"). To cover these services, I-Link shall be
entitled to receive tile sum of $2.00 per month per provisioned
Member (the "MRC Fee") from the monthly recurring charge that
will be billed to each Member on behalf of WealthNet. The
staffing, performance and quality of the I-Link WealthCom Team
shall be reviewed on a monthly basis by the parties. As the
number of Members grows, additional I-Link personnel and
resources shall be added to the I-Link WealthCom Team as
reasonably required to adequately performing the WealthCom
services. WealthNet shall, at its expense, designate one of its
employees as a supervisor to work with the I-Link WealthCom Team,
and I-Link shall make office facilities available to such
supervisor. In order to facilitate 'real-time" communication
between the I-Link WealthCom Team and WealthNet, I-Link shall, at
WealthNet expense and subject to WealthNet approval, install and
maintain a high-speed telecommunications line linking I-Link and
WealthNet. The parties shall agree upon mutually acceptable
policies and procedures relating to billing adjustments.
3. TERMS AND CONDITIONS OF SALE. It is agreed that I-Link shall
sell the Services and Products to WealthNet solely upon the
following terms and conditions:
3.1 Service Rates/Product Prices. I-Link shall sell to
WealthNet its Services and Products at the rates and prices
set forth on Exhibit 3.1 attached hereto arid made a part of
this Agreement. In the event I-Link deems it necessary to
increase the rates arid/or prices set forth on Exhibit 3 - 1
I-Link shall provide WealthNet written notice of such
intended price increase. During the ninety (90) day period
following such written notice, I-Link and WealthNet shall
negotiate new rates and/or pricing. In the event the parties
shall be unable to reach agreement on the new rates and/or
pricing at the end of such ninety (90) day period each party
shall have the right to terminate this Agreement.
3.2 Resale of Services and Products. WealthNet shall be free to
determine tile price, terms, arid conditions of sale
surrounding the resale of the Services and Products to
WealthNet Members, provided that WealthNet shall not
undertake any activities that would result in harmful
pricing practices to the market.
3.3 Applications for Services and Products. WealthNet shall
submit Applications for Services and/or Products
("Applications") to I-Link for the services and Products
needed for WealthNet Members. All Applications for Services
and Products shall be sent by electronic transmission, fax
or mail directly to I-Link, and shall include all relevant
information necessary to process the Application and
provision tile Member. Applications shall be subject to
acceptance by I-Link and shall not be binding on I-Link
until so accepted. I-Link shall have the right to reject the
provision of Services and/or Products to any Member that
fails to meet I-Link's established written creditworthiness
requirements provided to WealthNet. Notwithstanding the
exclusivity provisions contained in Section 5 below,
WealthNet shall be permitted to provision any Member whose
Application is rejected by I-Link with another long-distance
carrier. In the event of a conflict between the terms of
this Agreement and any Application submitted to I-Link, the
terms of this Agreement shall govern.
3.4 Shipment of Products. All Products shall be sold to
WealthNet F.O.B. I-Link's facility and shall be shipped
directly to WealthNet's Members, as designated in the
purchase orders. Upon the placement of the Products with a
common carrier, the title and all risk shall pass to
WealthNet. WealthNet acknowledges that it is the Members
responsibility to pay to I-Link all and any tariffs, taxes,
duties, levies, and any other fee or charge associated with
the transportation of the Products Although the Members
shall pay to I-Link for all costs associated with the
transportation and insurance of the Products, I-Link shall
arrange for such transportation and insurance of ~e
Products. I-Link shall, at the Members expense, take such
steps as may be required to satisfy any laws or requirements
with respect to declaring, filing, recording, or otherwise
rendering this Agreement valid.
3.5 Invoicing and Collection. WealthNet shall require each of
tile Members to secure payment for Services and Products by
means of a credit card authorization, automatic bank account
withdrawal authorization, and/or a cash deposit in an amount
to be determined by the parties. I-Link shall invoice and
collect payment from the Members purchasing tile Services
and Products. All invoices sent by I-Link to the Members for
Services and Products shall be due net twenty (20) days from
the date of invoice. Unpaid invoices over twenty (20) days
may be assessed a late fee equal to 1.5% per month (18%
APR). Invoices unpaid after thirty (30) days may be
submitted for collection seven (7) days after notice to tile
Member, and I-Link may terminate a Member's subscription in
accordance with the provisions governing termination in the
Member subscription agreement. Members shall be responsible
for any costs incurred by I-Link in collecting any amount
payable, including costs of court and reasonable attorneys'
fees Notwithstanding the exclusivity provisions contained in
Section 5 below, WealthNet shall be permitted to provision
any Member terminated by I-Link with another long-distance
carrier.
3.6 Allocation of Member Revenues. All revenues collected from
tile Members arising from the Services and Products shall
be paid into a lockbox account maintained by a third-party
financial institution acceptable by both parties (the
"Bank"). The parties shall jointly instruct and authorize
the Bank to make disbursements from the lock-box account as
often as practicable based upon billing cycles and
collections received. All such disbursements shall be made
according to the following allocation:
(a) To I-Link in the amount of all amounts payable
for taxes to local, state and federal
authorities arising from the collected Member
revenues, and any PIC fees arising under Section
4 below,
(b) The balance according to the Schedules set forth
in Exhibit 3. 6~) attached hereto and made a
part of this Agreement.
In the event I-Link is required either (i) as a result of
non-payment by Members of accounts receivable in a timely
manner, or (ii) by an independent third-party provider
(such as, but not limited to, MCI) to direct the collection
and disbursement of Member revenues through a factoring
provider or other collection facilitator (a "Collector"), I-
Link shall cause such Collector to distribute directly to
WealthNet, at such times as finds are distribute from the
Collector to I-Link, the portions payable to WealthNet set
forth above, subject to the percentage discount payable to
such Collector on a pro-rata basis
3.7 Changes or Discontinuance. I-Link reserves the right during
the term of this Agreement either to vary or to discontinue
the production, sale, or distribution of any of its Services
or Products upon ninety (90) days prior written notice to
WealthNet. During such ninety (90) day notice period,
WealthNet shall be entitled to terminate the Agreement if
the variance or discontinuation of the production, sale or
distribution of the Service or Product constitutes a
material alteration of the Services and/or Products I-Link
shall incur no liability to WealthNet or the Members by
reason of any such change and/or termination.
3.8 Long-Distance Carrier. I-Link shall be entitled to provide
its Services to tile Members by means of whichever long-
distance carrier or carriers as it shall determine are best
suited for the provision of its Services; provided,
however, that I-Link shall comply with all applicable
federal and state regulations governing the establishment
or switching of long-distance carrier service when and
where required.
3.9 Member Communications Because of WealthNet status as a
member organization, and because of I-Link's designation as
the Members' long-distance carrier, both WealthNet and I-
Link shall be entitled to make use of all lists of Members
and to communicate with Members with respect to the
services and Products, both during the term of this
Agreement and thereafter; however, it is agreed that during
the duration of this Agreement all primary communications
with the Members shall be either through the I-Link
WealthCom Team or WealthNet and any communication with the
Members by I-Link during the term of this Agreement shall
be limited to the fulfillment of I-Link responsibilities
under this Agreement.
4. PROVISIONING. I-Link shall use all diligence to provision
the Members in a timelymanner. I-Link shall provide WealthNet
real-time access to all provisioning status information. Attached
to this Agreement, as Exhibit 4 is a listing of the geographic
areas the parties agree I-Link (through FTI Communications, Inc.)
is currently unable to adequately provision Members. Until such
time as I-Link is able to provision within a given exhibit 4
geographic area, WealthNet shall be permitted to provision
Members within such non-provisional Exhibit 4 geographic area
with other long-distance carriers. At such time as I-Link is able
to adequately provision Members within a given Exhibit 4
geographic area, WealthNet shall no longer provision new Members
with other carriers within such area, and shall cause all Members
provisioned with other carriers within such area to be re-
provisioned to I-Link or its designated long-distance carrier. At
such time as I-Link's proprietary telecommunications network (the
"I-Link Network") is operational, the Members shall bear the cost
and be invoiced for any PlC fees require to be paid in switching
the Members from the then current long-distance carrier to tile I-
Link Network.
5 EXCLUSIVITY. Other than as provided in Section 4 above, for
a period of one (1) year from the date of this Agreement
WealthNet shall cause all of its Members utilizing a long-
distance carrier through WealthNet/WealthCom to be provisioned
with I-Link or its designated long-distance carrier If, during
this one-year exclusivity period, I-Link is unable to provision
any Member within four (4) weeks from the date of initial
submission to I-Link of the Member Application, WealthNet shall
be entitled to provision such Member with another long-distance
carrier, regardless of the geographic area. Except as provided
above, during the exclusivity period, WealthNet shall not cause
any of the Members to be diverted to another long-distance
carrier.
6. MARKETING AND PROMOTION. During the 1-year exclusivity
period, WealthNet shall use reasonable and good faith efforts to
promote and market the Services to its Members and solicit
Members as subscribers for the Services and Products. WealthNet
shall at all times identify I-Link (or its designated long-
distance carrier) as the service provider with respect to the
Members utilizing the Services. WealthNet shall use only I-Link
approved subscription agreements and forms, and enrollment or
activation procedures in soliciting Member Applications.
WealthNet shall offer the Services and Products only to those
Members who meet I-Link written creditworthiness requirements.
WealthNet shall take all reasonable steps to confirm the accuracy
of information obtained from Members pursuant to such forms and
procedures. WealthNet shall have no right, power, or authority to
make any representations or warranties regarding the Services and
Products except as expressly approved by I-Link.
7. BUSINESS CONDUCT. In all dealings related to this Agreement
and the providing, Marketing and sale to the Members of the
Services and Products, the parties and their principals,
employees and Members shall be governed by the highest standards
of honesty, integrity, fair dealing, and ethical conduct. The
parties and their principals, employees and Members shall not
engage in any form of business practice or advertising that is
unethical or inconsistent with high community standards or that
would reflect negatively upon the other party or the Services and
Products. Conduct amounting to a breach hereof includes, but is
not limited to: (i) business practices; promotions and
advertising which may be injurious to the business goodwill of
the other party, (ii) falsification of any business records, or
(iii) misrepresentations to the other party or to any actual or
potential subscriber. Each party shall be fully responsible for
all acts and omissions of its principals, employees and Members,
and shall require that such persons comply with all terms of this
Agreement. A breach by any of either party's principals or
employees of any of the terms of this Agreement shall be
considered a breach by that party and shall entitle the other
party to pursue all such rights and remedies it may have under
the Agreement or under the law. A breach by any Member of the
terms of this Agreement such that the damage to I-Link resulting
from such breach cannot adequately be remedied within a sixty
(60) day cure period shall be considered a breach by WealthNet
and shall entitle I-Link to pursue all such rights and remedies
it may have under Section 12 of the Agreement I-Link shall have
the right to terminate the subscription of any Member who
materially breaches any term of this Agreement Each party shall
promptly report to the other party in writing all violations of
the Agreement by any of its principals, employees or Members.
8. CONFIDENTIALITY. As used in this Agreement, "Confidential
Information" means all information, not generally known to the
public, that relates to the business, technology, subscribers,
finances, plans, proposals, or practices of I-Link or WealthNet,
respectively, and it includes, without limitation, the identities
of all subscribers and prospects, all business plans and
proposals, all marketing plans and proposal all technical plans
and proposals, all research and development, all budgets and
projections all non-public financial Information, and all
Information I-Link or WealthNet designates as "confidential. Ml
Confidential Information will be considered trade secrets of I-
Link and WealthNet, respectively, arid shall be entitled to all
protections given by law to trade secrets. "Confidential
Information" shall apply to every form in which information shall
exist, whether written, film, tape, computer disk, or other form
of media. The parties covenant and agree that, both during the
term of this Agreement and at all times thereafter, each of them
and their principals and employees and any successor entity,
shall not use or disclose to any person, firm, corporation or
other business entity any Confidential Information of the other,
shall not in any other way publicly or privately disseminate any
Confidential Information of the other, and shall not help anyone
else to do any of these things Upon termination of this
Agreement, all Confidential Information of the other party in the
possession of a party, its principals or employees or any
successor entity (originals and all copies) shall be promptly
returned to the other Each party shall be responsible for
ensuring compliance with this paragraph by its
Principals, employees and agents.
9. RECORDS. Both parties agree to maintain at their principal
place of business, for four years or for the period legally
required from the date of their preparation, whichever is longer,
complete and accurate records of their business conducted
pursuant to this Agreement. Upon reasonable notice, I-Link shall
be entitled to full access to all records of WealthNet, and
WealthNet shall be entitled to full access to all records of I-
Link pertaining to the Services and Products provided to the
Members.
10. SERVICE MARKS, TRADEMARKS AND TRADENAMES. I-Link shall
immediately cause FTI Communications, Inc. To amend all federal
and state tariff and long-distance carrier applications and
filings it has made to change the name "WealthCom" to another
name not incorporating the word WealthNet Upon completion and
effectiveness of these amendments, I-Link shall cause FTI to
assign to WealthNet all d/b/a filings of the name "WealthCom",
together with all state and/or federal
trademark/tradename/service name applications and registrations.
It is the intent of the parties that once the name "WealthCom"
becomes disassociated with FTI by virtue of the amendment of
federal and state tariff and long-distance applications and
fillings the name and xxxx "WealthCom" shall be wholly owned and
controlled by WealthNet Subject to the foregoing, the parties
understand and acknowledge that the rights to use all service
marks, trademarks and trade names of each party (collectively,
the "Marks") are the property of that party, arid the other party
shall not use any of the other party's Marks without the other
party's specific prior written approval Each party shall comply
with all rules and procedures pertaining to use of the other
party's Marks Any unauthorized use of the Marks of one party, by
the other party or its principals or employees, shall constitute
infringement of the first party's rights and shall constitute a
material breach of this Agreement. Each party acknowledges that
it has no rights in or to the Marks of the other party except as
provided herein and shall not acquire any rights in the other
party's Marks or expectancy to their use as a result of any use
of the Marks. Following the termination of this Agreement, each
party shall immediately discontinue use of any of the other
party's Marks
11. DEFAULT. The following events and occurrences shall
constitute "defaults" of this Agreement:
(a) Any material breach by either party of this
Agreement which is not fully cured within sixty
(60) days after written notice of default is sent
by the other party
(b) The conviction or a plea of guilty or nolo
contender to any felony offense or to any
misdemeanor offense involving dishonesty,
embezzlement or theft by either party or their
respective executive officers; or
(c) Subject to a ninety (90) day cure period, the
insolvency of either party, either party becoming
the subject of a petition in bankruptcy, the
appointment of a receiver for either party's
business, or the entry by either party into any
arrangement with or assignment for the benefit of
creditors
12. TERM AND TERMINATION. Subject to the termination of the
exclusivity oblation as provided in Section 5 above, this
Agreement shall remain in force for a three (3) year Term
commencing as of the date stated on the first page of this
Agreement, unless sooner terminated under the terms herein. The
Agreement shall automatically renew for additional one-year terms
unless either party gives the other party written notice of its
intent not to renew at least One Hundred Twenty (120) days prior
to the termination of the then current term. In the event of a
default (as defined in Section 11 above) by a party, this
Agreement may be immediately terminated by the non-defaulting
party upon the sending of a written notice of termination. In the
event I-Link's acquisition of FTI is either not ultimately
consummated or rescinded, I-L~ shall have the right to identify
another long-distance carrier to provision the Members and
renegotiate new pricing of the services with WealthNet In the
event the parties are unable to agree on new pricing within
ninety (90) days, either party shall be able to terminate this
Agreement without liability to the other party, other than for
collected Member revenues to be allocated as provided in Exhibit
3.6; provided however, that no such termination shall relieve I-
Link and/or FTI from their obligations under Section 10 with
respect to the "WealthCom" name, so long as WealthNet shall take
no action to hinder the collection by I-Link and/or FTI of any
bona-fide accounts receivable owed by tile Members.
13. CROSS INDEMNIFICATION. In the event any willful misconduct
or negligent act or omission of either party or its principals
employees, agents or authorized representatives causes or results
in (a) loss, damage to, or destruction property of ~ other party
or third parties, and/or (b) death or injury to persons
including, but not limited to, employees or invitees of either
party, then such party shall indemnify, defend, and hold the
other party harmless from and against any and all claims,
actions, damages, demands, liabilities, costs, and expenses,
including reasonable attorney's fees and expenses, resulting
therefrom. The indemnifying party shall pay or reimburse the
other party promptly for all such loss, damage, destruction, or
injury.
14. LIMITATION ON LIABILITY.
14.1 IN NO EVENT, WHETHER BASED IN CONTRACT OR TORT (INCLUDING
NEGLIGENCE) SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY
FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL OR PROFITS
DAMAGES OF ANY KIND OR FOR LOSS OF REVENUE OR PROFITS, LOSS
OF DATA, LOSS OF BUSINESS OR OTHER FINANCIAL LOSS OR COSTS
ARISING OUT OF OR IN CONNECTION WITH THE SALE, INSULATION,
USE, PERFORMANCE, FAILURE OR INTERRUPTION OF THE PRODUCTS
AND/OR SERVICES PURCHASED WEALTHNET AND PROVIDED PURSUANT TO
THIS AGREEMENT.
14.2 I-Link liability to any person whatsoever, other than
WealthNet, its principals, employees, agents or authorized
representatives, arising out of or in connection with any
sale, use or other employment of any Products or Services
provided to WealthNet and/or its Member hereunder, whether
such liability arises from any claim based upon any
contract, warranty, tort or otherwise, shall in no case
exceed the actual amount paid to I-Link for Services and
Products delivered pursuant to this Agreement.
15. NOTICES. All notices given pursuant to this Agreement shall
be in writing and addressed as set forth below. Addresses may be
modified at any time by written notification to the other party.
Any such notice or other communication shall be deemed given and
effective when delivered personally or by fax or three (3) days
after the postmark dated if mailed by certified or registered
mail, postage prepaid, return receipt requested.
If to WealthNet If to I-LINK
0000 Xxxx Xxxxxx Xxxxx 13751 X. Xxxxxxxxx Xxxx Xx.
Xxxxx 000 Xxxxx 000
Xxxx, XX 00000 Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx Attention: Xxxx X.
Xxxxx, Xx., CFO
Fax: (000) 000-0000 Fax: (000) 0000000
16. INDEPENDENT CONTRACTOR STATUS This Agreement is intended to
secure the Marketing and promotional activities of WealthNet as
an independent contractor. This Agreement shall in no way be
construed as, nor is it intended to appoint WealthNet as a legal
representative of I-Link or to create a partnership, joint
venture, or other joint interest between WealthNet and I-Link.
Except as expressly provided herein, neither party has any right
or authority to act for or on behalf of the other, or to assume
or to create any obligation or responsibility, express or
implied, on behalf of or in the name of the other in any manner
whatsoever without the express written approval of the other.
17. FORCE MAJEURE. Any delay in or failure of performance by
either party under this Agreement (other than payment
obligations) shall not be considered a breach of this Agreement
and shall be excused if and to the extent it is caused by any
occurrence beyond the reasonable control of the party affected,
including, but not limited to. Act of God or the public enemy;
fire; flood; embargoes; governmental restrictions; strikes or
labor difficulties; riots; wars or other military action; civil
disorders; shortages of labor, fuel, power, materials, supplies
or transportation; or delays in deliveries by suppliers. The
affected party shall use reasonable commercial efforts to
mitigate or eliminate the cause of such delay or its effects. The
affected party shall notify the other in writing promptly of any
failure or delay in, and the effect on, its performance under
this Agreement.
18. ADMINISTRATIVE PROVISIONS.
18.1 Amendments. The provisions of this Agreement may not he
amended, altered, or waived, in whole or in part, except by
the written consent of both parties.
18.2 Assignment; Successors and Assigns. It is hereby agreed that
this Agreement is personal to each party and that neither
party shall assign, sells license, or otherwise transfer to
any person or entity, any of the obligations,
responsibilities, rights, privileges, and interests which
are set forth and established by this Agreement without
obtaining the prior written consent of the other party,
which consent shall not be unreasonably withheld. In the
event of a permitted assignment hereunder, this Agreement
shall be binding on, and shall inure to the benefit of, the
parties to it and their respective successors, and assigns.
18.3 Waiver. The failure of either party at any time to require
performance by the other party of any provision hereof shall
in no way affect the full right to require such performance
at any time thereafter. Nor shall the waiver by either party
of a breach of any provision hereof be taken or held to be a
waiver of any succeeding breach of such provision or as a
waiver of such provision itself.
18.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Utah.
18.5 Arbitration of Disputes. Should the parties hereto be
unable to amicably resolve between themselves any disagreements
relating to or arising from any one or more of the provisions of
this Agreement, neither party shall seek redness against the
other in any country or tribunal in any part of the world, but
instead both parties shall submit such disagreement to binding
arbitration Association. Neither party shall have the right to
further appeal or redress in any other court or tribal except
solely for the purpose of obtaining execution of the judgment
rendered by such award, including reasonable attorney's fees,
together with all costs incurred in the collection process
including attorneys' fees relating thereto.
In Witness whereof, the parties hereto have caused this Agreement
to be executed by their duty authorized representatives.
I-Link WorldWide, Inc. WealthNet
Incorporated
By: Xxxx X Xxxxxxx By: Xxx Xxxxx
Date: ___1/30/97_________ Date: ___1/30/97_________
Acknowledged and Agreed to:
Family Telecommunications Incorporated
By: Xxxxxx Xxxxxxx
Date: ___1/30/97_________
