Page 1
AMENDMENT NO. 3 TO OPERATOR SERVICES AGREEMENT
This Amendment No. 3 to that certain Operator Services Agreement, including
Addendum, dated September 16, 1993 (the "Agreement") by and between U. S. Long
Distance, Inc. ("USLD") and G-Five Corp. ("G-5") amends the Agreement and all
previous addendums and amendments in the following respects:
1. Section 1.1 Basic Services of the Agreement is hereby amended by adding
the following sentence:
G-5 shall have the right at any time to amend or replace its existing
form of Customer Agreement so long as the Operator Services Provider
services required of USLD thereunder are not modified or changed in any
respect from the original version of the Customer Agreement.
2. Section 1.2(a) of the Agreement is hereby deleted in its entirety.
3. Section 1.2(d) of the Agreement is hereby amended in its entirety to read
as follows:
USLD shall offer commission rates pertaining to Customers' telephones
requiring operator services located both inside and outside of the State of
California pursuant to the commission rates set forth in Exhibit "B" which
is attached hereto and incorporated herein for all purposes.
4. Section 2.1 of the Agreement is hereby amended in its entirety to read as
follows:
2.1 Premises Imposed Fees. USLD and G-5 agree that all premises
imposed fees ("PIF") on qualifying calls are included and made a part of
the applicable rate charged on Exhibit "B." All California PIF shall be
paid to G-5 or its Customers as G-5 shall direct excluding InterLATA PIF.
5. The first paragraph of Section 2.2 of the Agreement is hereby amended in
its entirety to read as follows:
2.2 Commissions. Subject to all governmental laws and governmental
regulations that may be applicable thereto, including all public utility
commission and federal communications tariffs, and subject to each
Customer's performance of its obligations set forth in the Customer
Agreement or the Telephone Agreement, USLD shall pay monthly, directly to
each Customer or to G-5 as G-5 may direct by prior notice to USLD,
commission amounts when required as specified in either the Customer
Agreement or the Telephone Agreement, whichever is applicable. The
commission amounts set forth in the Customer Agreement or the Telephone
Agreement, as the case may be, shall not be changed without notice to USLD.
Page 2
Section 2.2 b. is amended to read as follows:
2.2 b. On all intrastate calls, 2% of the revenue generated by said
calls, except that the rate applicable to California Intrastate (InterLATA)
shall be 4%.
Section 2.2 of the Agreement is hereby further amended by adding the
following Section 2.2 f:
2.2 f. USLD shall pay to G-5 an override of an addition one (1%)
percent commission on all revenue resulting from calls placed during the
period October 1, 1995 through September 30, 1996, if, and only if, said
calls for that year exceed 3.0 million in number. Likewise, USLD shall pay
to G-5 a one (1%) percent override, in like manner, if the calls exceed 3.0
million in number for the next and each succeeding year during the term of
the Agreement and any renewals or extensions. Override amounts shall be
paid by December 1 following the period for which earned.
6. The rate tables referred to in Section 2.3 are revised, as set forth on
Attachment "B" to this Amendment. G-5 shall be paid the rates specified in
Section 2.2a through f in addition to the rates set forth on Attachment "B"
applicable to G-5's Customers.
7. Sections 2.4 and 2.5 of the Agreement are deleted in their entirety. The
parties' agreement regarding PIF is now contained in its entirety in Section 2.1
above.
8. Section 2.6 of the Agreement is hereby deleted in its entirety. USLD
assumes full financial responsibility for all unbillable and uncollectible
end-user calls and for all end-user fraud, and there shall be no deductions,
pre or post-billing adjustments, "true-ups" or other effect upon the commissions
otherwise payable by USLD to G-5 or its Customers by reason thereof.
9. Section 2.7 of the Agreement is hereby amended in its entirety to read as
follows:
2.7 Sign-Up and Other Bonuses. Subject to the right of refund and
offset as set forth in this Agreement, USLD shall pay G-5 a $100,000.00
signing fee payable as follows: $50,000.00 to be paid on November 1, 1995;
and $50,000 to be paid on September 30, 1996.
10. Section 3.3 of the Agreement is hereby amended in its entirety to read as
follows:
G-5's Minimum Commitment After October 1, 1995. G-5 shall provide and
maintain a minimum cumulative (i.e., running) average of 145,000 calls per
month (the "Minimum Monthly Commitment") for the term of this Agreement.
In the event G-5 fails to maintain this Minimum Monthly Commitment, USLD
shall have the right to cancel this Agreement upon ninety (90) days written
notice. If
Page 3
notice of cancellation is given, the commissions otherwise payable by USLD
shall continue to be paid while an orderly transition of Customer pay phones
off of USLD's circuits is effected during said ninety (90)-day period;
however, no override shall be paid to G-5 during such period.
11. Section 4.1 of the Agreement is hereby amended in its entirety to read as
follows:
Section 4.1 Effective Date and New Term. This Agreement shall be
effective as of October 1, 1995, and shall expire on October 1, 1997.
12. Section 4.3 of the Agreement is hereby amended in its entirety to read as
follows:
4.3 Signing Fee Refund/Offset Upon Early Cancellation. In the event
USLD terminates this Agreement due to G-5's failure to maintain the Minimum
Monthly Commitment as required during the term of this Agreement, USLD
shall have the right to make written demand and G-5 agrees to refund the
$100,000.00 signing fee within thirty (30) days of such written notice. In
addition, in such event, Customer grants USLD the right of offset against
G-5's commissions to recover the signing fee.
13. Section 4.5 of the Agreement is hereby amended in its entirety to read as
follows:
4.5 Non-Solicitation. Neither USLD nor G-5 shall directly or
indirectly solicit the other's customers with respect to any operator
service project or program without the other's participation therein, and
shall not directly or indirectly interfere with or discourage the continued
affiliation and relationship between the other's customers during the term
of their respective contractual relationships and any renewals, extensions
and future replacements thereof.
14. A new Section 5.5 is hereby added to the Agreement which shall read as
follows:
5.5 Use of Services by G-5 Board Members. G-5 agrees to cause its
board members to use USLD's operator services for all InterLATA and
Interstate calls for the term of this Agreement.
15. A new Section 5.6 is hereby added as follows:
5.6 Commercial Impracticability/Force Majeure. Neither party shall
be liable for any failure to perform its obligations in connection with any
action described in this Agreement, if such failure results from any act of
God, riot, war, civil unrest, flood, earthquake, regulatory change or
change in law, or other cause beyond that party's reasonable control, but
excluding failure caused by that party's financial condition or negligence.
Page 4
In the event of a legal or regulatory change that affects either
party's ability to provide telecommunications service to G-5 Customers at a
reasonable profit, the parties shall in good faith negotiate the then
applicable rates, charges and commissions required under the Agreement. If
the parties are unable to agree upon modifications acceptable to both of
them, then either dissatisfied party shall have the right to give sixty
(60) days' notice to the other of election to discontinue services
hereunder. In the event services are so discontinued, G-5 shall refund
that fraction of the $100,000.00 signing fee determined by dividing the
number of days from the date of discontinuation through September 30, 1977
by 730 (730 days being the total number of days in the two (2) year term of
this Amendment No. 3).
16. Any amounts required to be paid under this Agreement that are not paid by
either party to the other by the dates due shall bear interest at the lesser of
eighteen (18%) percent per annum or the highest amount permitted by applicable
law.
17. All other terms and conditions of the Agreement are hereby ratified and
confirmed in their entirety.
18. The "Addendum to Operator Services Agreement" dated the 16th day of
September, 1993, as well as Amendment No. 1 dated April 30, 1994 and Amendment
No. 2 dated June 28, 1995, are hereby deleted in their entirety.
AGREED TO and ACCEPTED on this 31st day of August, 1995.
U. S. LONG DISTANCE, INC. G-FIVE CORPORATION
By: /S/ XXXX X. XXXXX By: /S/ XXXX X. XXXXXX
------------------------------- -------------------------------
Xxxx X. Xxxxx, Vice President Sales Xxxx X. Xxxxxx, President
Dated: 09/29/95 Dated 9/14/95
By: /S/ XXXXX X. XXXXX By: /S/ XXXXXX X. XXXX
------------------------------- -------------------------------
Xxxxx X. Xxxxx, President Xxxxxx X. Xxxx, Secretary
Dated 09/29/95 Dated 9-7-95
