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EXHIBIT 10.21
1 16 98
Effective 08 07 97
Revision 15
ONE PLUS
BILLING AND INFORMATION MANAGEMENT
SERVICES AGREEMENT
This One Plus Billing and Information Management Services Agreement (the
"Agreement") is entered into this 19 day of January 1998, by and between Billing
Concepts, Inc., a Delaware corporation, dba U.S. Billing (hereinafter "USBI")
and Xxxxxxx Entertainment Inc., a Delaware corporation ("Customer").
WITNESSETH:
WHEREAS, Customer is engaged in the business of providing certain pre-subscribed
telecommunication services for which Customer desires to xxxx and collect for
these services through the Local Exchange Carriers (LECs); and
WHEREAS, USBI has entered into billing and collection agreements with certain
LECs which allow USBI to provide billing and information management services for
qualifying Message Telephone Service ("MTS") calls on behalf of USBI's
customers; and
WHEREAS, USBI has the ability through its computer hardware, computer software
and accounting systems to provide billing and information management services
for Qualifying MTS calls for Customer, and Customer desires to obtain such
billing and information management services from USBI on the terms and
conditions contained herein:
NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, do hereby agree as
follows:
SECTION 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the meanings set forth
below, unless the context otherwise requires:
BAD DEBT: See Uncollectible Amounts and Written-Off Accounts.
BILLING TELEPHONE COMPANY (BTC): See Local Exchange Carrier.
BOC: Xxxx Operating Company.
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BUSINESS DAY: A day other than Saturday and Sunday on which commercial
banks are open in the State of Texas.
CLAIM: Claim, loss, liability, damage, cost, correction and expense,
and whether ordinary, special, consequential or otherwise.
CASUAL OPERATOR SERVICES (OS) TELEPHONE TRAFFIC: Casual operator
assisted telephone calls that originate from locations where Customer
is the pre-subscribed direct dial IXC or reseller of direct dial IXC
services and the OS telephone calls are billed: (i) to the originating
telephone number, (ii) collect to the terminating telephone number,
(iii) to a third telephone number other than the originating or
terminating telephone number, or (iv) to a LEC or IXC calling card.
EMI BILLING RECORD: Computer readable records containing the billing
data for Customer's Qualifying MTS calls, in the Bellcore EMI
(electronic message Interface) format, for which each LEC has the
capability of processing through its billing and collection systems.
END USER: A natural person, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental agency or instrumentality, or other entity that subscribes
to or uses Customer's telecommunication services.
FCC: The Federal Communications Commission.
FOREIGN LNTRASTATE TAXES: Those applicable taxes for OS and Travel Card
calls originating and terminating in the same state but billed in
another state as described in Section 9 herein.
INDEPENDENT TELEPHONE COMPANIES: Those LECs that are not BOCs, which
presently include, subject to revision by USBI from time to time:
General Telephone Operating Companies (GTOCs), United Companies
(GTOCs), United Telecommunications Operating Companies (United),
Alltel, the alliance of Independent Telephone Companies through
Independent NECA Services, and U.S. Intelco.
INTEREXCHANGE CARRIER (IXC): Those telephone companies, other than the
LECs, that can provide intraLATA (where applicable), interLATA,
interstate and international telecommunications service.
LEC PROCESSING FEES: As described in paragraph 4.(c)(i) and 4.(f).
LIBRARY CODE: An accounting identification code assigned by USBI that
is used to account for Customer's funds, fees, charges, charge backs,
adjustments and credits which Customer encodes within each EMI Billing
Record Customer desires USBI to account for separately.
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LOCAL EXCHANGE CARRIER (LEC): Any one of the local telephone companies,
as listed on Exhibit "A" hereto, providing intraLATA exchange telephone
services or issuing calling cards and with whom USBI has entered into a
billing and collection agreement.
MTS (MESSAGE TELEPHONE SERVICES): Direct-dialed or operator assisted
station-to-station or person-to-person telephone calls billed: (i) to
the originating telephone number, (ii) collect to the terminating
telephone number, (iii) to a third telephone number other than the
originating or terminating telephone number, or (iv) to a LEC calling
card or an IXC travel card. "Enhanced Telecommunications Services' or
"Information Services" are not considered MTS calls herein and cannot
be billed under this Agreement.
ONE PLUS TELEPHONE TRAFFIC: Direct dialed telephone calls which: (i)
originate from an equal access end office, (ii) are billed to the
originating telephone number or (iii) are billed to an IXC travel card
issued by Customer.
POST BILLING ADJUSTMENT OR CREDIT: Credit or rate adjustments applied
to an End User's account by the LEC or by USBI.
QUALIFYING MESSAGE TELEPHONE SERVICE (QUALIFYING MTS): Casual OS
Telephone Traffic and One Plus Telephone Traffic which are not of
objectionable content as set forth in paragraph 7.(g) of this
Agreement.
RBOCS: Regional Xxxx Operating Companies.
SUBMISSION DATE: As described in paragraph 3.(a).
TARIFFS: The rates, terms and conditions for providing intraLATA,
interLATA (intrastate), interstate, and international telecommunication
services as authorized and filed with the FCC or with state and local
regulatory authorities.
TAXES: The word "Taxes" shall mean all those taxes and tax-like
surcharges described in paragraph 9.(a) herein.
UNBILLABLE RECORDS: Those EMI Billing Records that pass USBI's edits
and screens and are submitted to the LECs for billing and collection
but subsequently fail the LEC's edits and screens and are not posted to
an End User's account by the LECs.
UNCOLLECTIBLE AMOUNTS: Those amounts that are billed to an End User's
account for Customer's Valid EMI Billing Records but are not collected
due to the End User receiving a Post Billing Adjustment or Credit to
its xxxx or the End User failing to pay its xxxx to the LEC and the
account subsequently being written off as Bad Debt by the LEC.
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USBI REJECTED RECORDS: Those EMI Billing Records that fail USBI's edits
and screens and are returned to Customer and not submitted to the LECs
for billing and collection.
VALID EMI BILLING RECORDS: As described in paragraph 3.(b).
WRITTEN-OFF ACCOUNTS: Those End Users' accounts that are not paid by
the End Users and are subsequently written off as Bad Debt by the LECs.
SECTION 2. SCOPE OF AGREEMENT.
Customer hereby agrees to purchase from USBI the services described in Section 3
herein, and USBI agrees to provide such services at the time and in the manner,
and subject to the terms and upon the conditions, set forth herein. Commencing
eight months after the initial term of this Agreement begins and continuing
through the end of the term of this Agreement, Customer agrees that USBI shall
be the exclusive source for LEC billing and information management services in
the United States for 800 call forwarding and conference call products of all
kinds offered by Customer, billed through the billing telephone companies listed
in Exhibit "A", attached hereto. However, nothing contained herein shall be
interpreted to prohibit Customer from contacting directly with any LEC for its
own direct LEC billing and collection agreement, to xxxx directly through any
LEC for 800 call forwarding and conference call products of all kinds offered by
Customer, provided that Customer shall notify USBI of its intent at least sixty
(60) days prior to activation of such agreement. As USBI enter into billing and
collection arrangements with additional LECs, USBI will provide billing and
information management services to Customer for such LECs on the same terms and
conditions as contained herein.
SECTION 3. BILLING SERVICES.
(a) Submission of EMI Billing Records. Customer shall submit to USBI
its EMI Billing Records for its Qualifying MTS calls for USBI to submit to each
LEC under contract with USBI. Customer shall be responsible for submitting to
USBI EMI Billing Records that contain adequate information so that USBI and the
LECs can process such EMI Billing Records. Customer shall submit its EMI Billing
Records to USBI once per week, except when Customer cannot satisfy USBI's
minimum volume requirements as described in paragraph 7.(f), in which case
Customer shall submit its EMI Billing Records at least once per month. The cost
of these submissions shall be borne by Customer. The date USBI receives
Customer's EMI Billing Records will be, for those records, the "Submission
Date."
(b) USBI's Edits and Screens. Upon receipt of Customer's EMI Billing
Records, USBI will promptly process Customer's EMI Billing Records through
USBI's computer edits and screens. Those EMI Billing Records that pass USBI's
edits and screens shall be "Valid EMI Billing Records." Those EMI Billing
Records that do not pass USBI's edits and screens shall be "USBI Rejected
Records," and shall be returned to Customer.
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(c) Submission to LECs. Promptly after receipt of Customer's EMI
Billing Records (within five (5) Business Days after such receipt for the RBOCs
and GTE, or within ten (10) Business Days after such receipt for Independent
Telephone Companies), USBI will submit Customer's Valid EMI Billing Records to
the appropriate LECs.
(d) Purchase by LEC. Each LEC shall be responsible, to the extent
required by its agreement with USBI, to purchase Customer's Valid EMI Billing
Records.
(e) Billing and Collection by LEC. Each LEC shall be responsible, for
such Valid EMI Billing Records purchased by the LEC, for the billing and
collection of the revenue, for Customer's Qualifying MTS calls, from End Users
residing within the applicable billing area of such LEC, subject to the terms,
conditions and operating procedures contained in each LEC's billing and
collection agreement with USBI.
(f) Printing of Customer's Name on End User's LEC Telephone Xxxx.
Wherever possible, USBI will use its best efforts to cause each Billing
Telephone Company to print Customer's name, along with the associated Valid EMI
Billing Records, on each End User's telephone xxxx. Customer acknowledges that
where the Billing Telephone Companies do not provide this service, Customer's
name shall not appear on the End User's telephone xxxx.
SECTION 4. LEC PAYMENTS, FEES AND CHARGES.
(a) Payment by LECs. Each LEC shall make payments to USBI for Valid EMI
Billing Records purchased from Customer in accordance with the LECs billing and
collection agreement with USBI.
(b) Amount Paid by LECs. The LEC shall pay to USBI the gross amount of
Valid EMI Billing Records purchased by the LEC less the then-applicable fees,
charges, charge backs, credits and adjustments as prescribed in its billing and
collection agreement with USBI.
(c) LEC Fees, Charges, Charge Backs, Credits and Adjustments. Customer
acknowledges and understands that USBI is and will be bound by the terms of its
billing and collection agreement with each LEC with respect to each LEC's right
to deduct or to reduce its collectible funds for: (i) the amount charged by each
LEC for processing, billing and collecting Customer's Valid EMI Billing Records
["LEC Processing Fees"], (ii) any Unbillable Records, (iii) any Post-Billing
Adjustments or Credits provided to End Users, (iv) any reserve for anticipated
Uncollectible Amounts ["Bad Debt Holdback Reserve"], (v) any LEC Bad Debt
"true-ups" [periodic true-ups between the Bad Debt Holdback Reserve and the
actual Uncollectible Amounts realized by the LECs]. In addition, Customer shall
be responsible for any data transmission and distribution fees for delivering or
receiving Customer's EMI Billing Records and for any other LEC charges
specifically related to billing and collecting Customer's EMI Billing Records.
Customer further agrees that payment of all amounts described in this paragraph
4.(c) shall be its sole responsibility and that USBI may withhold such amounts
from payments to Customer. Should such amounts exceed the amounts due to
Customer, such amounts shall
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be due and payable by Customer to USBI within ten (10) Business Days of
notification by USBI of any amounts due. A schedule setting forth USBI's
contractual LEC Processing Fees for each LEC is attached hereto as Exhibit B".
(d) Bad Debt Holdback Reserve. USBI will holdback or cause the LECs to
holdback an amount estimated to be sufficient to set-off any Uncollectible
Amounts that may be determined after the date USBI makes its final payment to
Customer for Customer's Valid EMI Billing Records billed and collected by the
LEC. Any Bad Debt Holdback Reserve withheld by the LEC shall be passed through
to Customer on the same percentage on the same amount as USBI was assessed by
the individual LECs. Until such time as sufficient data becomes available to
determine specific bad debt history attributable to Customer, the past 12
months' average bad debt holdback reserve, as indicated on Exhibit "G", shall be
utilized to determine the Customer's bad debt holdback reserve. However, once
sufficient data becomes available to USBI from the LECs to enable USBI to
determine to a specific Bad Debt history attributable to Customer, the Bad Debt
Holdback Reserve rate shall be based on Customer's specific historical
Uncollectible Amounts. A schedule setting forth the past twelve month's average
Bad Debt Holdback Reserve withheld by each LEC is attached hereto, for your
reference, as Exhibit "G".
(e) Monthly-LEC Bad Debt True-Up. Between six and eighteen (6-18)
months after USBI submits Customer's Valid EMI Billing Records to the LECs for
billing and collection, the LECs will determine the actual amounts collected
from the End Users and true-up the difference between this amount and the face
amount of Customer's Valid EMI Billing Records purchased by the LEC. USBI will
provide Customer monthly reports on Bad Debt true-ups for these differences. If
the amount of these true-ups is "in favor" (positive) of Customer, USBI will
remit such amount to Customer when USBI receives the true-up amount from the
LECs. If the amount of these true-ups is "not in favor" (negative) of Customer,
USBI will withhold such amounts from the next scheduled payment due to Customer.
If the amounts due to Customer are not sufficient to satisfy such true-up
amounts, such amounts shall be due and payable by Customer to USBI within ten
(10) Business Days of notification by USBI of any amounts due.
(f) LEC Processing Fee Calculation. Each calendar month USBI will
determine the number of End User bills (renderings) that were or will be
required to xxxx Customer's Valid EMI Billing Records submitted to USBI during
that month and the average number of Valid EMI Billing Records contained on each
End User's xxxx. USBI will multiply these quantities by its contractual LEC
Processing Fee Schedule, as set forth in Exhibit "B", for each LEC to calculate
the LEC Processing Fees associated with billing Customer's Valid EMI Billing
Records. The LEC Processing Fee will also include any data transmission fees,
distribution fees, programming fees and any other charges directly associated
with billing Customer's Valid EMI Billing Records.
(g) End User Inquiry, Investigation and Rebate. Primary End User
inquiry, investigation and rebate policies are set forth in Exhibit "F" attached
hereto. Customer shall be responsible for payment of all Post-Billing
Adjustments and Credits provided to End Users by either the LEC or USBI.
Customer understands that each LEC has its own policies regarding assessment of
credits, fees and penalties for customer service complaints
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and Customer agrees to be bound by such policies. Such amounts may be deducted
weekly from the amounts due to Customer. If the amount due to Customer is not
sufficient to satisfy these amounts, then Customer shall pay such amount to
satisfy these amounts within ten (10) Business Days of notification by USBI of
any amounts due.
(h) Rejected Records. Those EMI Billing Records that fail USBI's edits
and screens and not submitted to the LECs for billing and collection, USBI
Rejected Records, shall be returned to Customer at no charge. Unbillable Records
rejected by the LEC, through no fault of USBI, shall be charged the same USBI
Processing Fees as described in Exhibit "C" attached hereto.
(i) Resubmitted EMI Billing Records. Unbillable Records which are
resubmitted to LECs for billing and collection shall be charged the standard
USBI Processing Fees as described in Exhibit "C" attached hereto.
SECTION 5. USBI BILLING SERVICE FEES, CHARGES AND CHARGE BACKS.
In addition to the LEC Processing Fees, charges, charge backs, credits and
adjustments set forth in Section 4, Customer agrees to pay to USBI and USBI may
deduct from amounts collected by the LECs on behalf of Customer and paid to
USBI, the following USBI billing service fees, charges, charge backs, credits
and assessments:
(a) A billing and information management service fee, the USBI
Processing Fee, for each Valid EMI Billing Record submitted to the LECs for
billing and collection by USBI, as specified in Exhibit "C" attached hereto;
(b) A fee for each End User inquiry, investigation and rebate handled
by USBI on Customer's behalf as specified in Exhibit "C" attached hereto;
(c) Any Post-Billing Adjustment or Credit amounts refunded to End Users
by USBI's customer service inquiry and investigation activities, along with any
LEC charges associated with making such refunds to End Users;
(d) A charge, as specified in Exhibit "C" attached hereto, for any
submission of EMI Billing Records that contains less than the minimum volume
requirements of USBI for each "library code"; and
(e) Accounts Receivable Reconciliation System - FASTRACK. Customer
shall pay to USBI an initial, one-time fee, as described in Exhibit "C" attached
hereto, for USBI's accounts receivable reconciliation system known as FASTRACK.
As collateral for all obligations now existing or hereafter arising from
Customer to USBI, Customer hereby grants to USBI a security interest in all the
following property of Customer, whether now owned or hereafter acquired or
created, and all proceeds and products thereof.
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(a) All amounts paid, and all amounts owing, by each LEC to USBI on
accounts for Customer's Valid EMI Billing Records;
(b) All accounts owing from an End User to Customer arising from
services which give rise to Customer's Valid EMI Billing Records;
(c) All amounts deposited by Customer with USBI pursuant to paragraph
13.(b) hereof, and
(d) all amounts owing and all amounts to be owing from USBI to
Customer.
SECTION 6. PAYMENTS TO CUSTOMER.
(a) Determination of Amount to Due Customer. USBI will determine the
amount collected by each LEC for Customer's Valid EMI Billing Records and deduct
the then-applicable fees, charges, charge backs, credits and adjustments of the
LECs and USBI. If the amount due to Customer is not sufficient to satisfy these
fees, charges, charge backs, credits and adjustments, then Customer shall pay
this difference to USBI within ten (10) Business Days of notification by USBI of
any amounts due.
(b) Reserves and True-Ups for Unbillable Records. USBI will reserve an
amount, from one month to the next, that is equal to Customer's prior history
for Unbillable Records. USBI will recalculate Customer's historical experience
quarterly from its prior three months results. Until such history can be
determined for Customer, USBI will reserve one and one-half percent (1.5%) from
the amount due to Customer. USBI will true-up this reserve each month when the
information becomes available from the LECs. USBI will then return excess
amounts to Customer or withhold additional amounts as may be required to satisfy
these liabilities from the amounts due to Customer.
(c) Payment Schedules. USBI will advance to Customer the estimated
amount determined under paragraph 6.(a) above within seven (7) Business Days of
receipt by USBI of funds from a LEC for Customer's Valid EMI Billing Records;
PROVIDED, HOWEVER, that if Customer has ceased doing business for five (5)
Business Days, is the subject of a bankruptcy proceeding, or a receiver, trustee
or custodian is appointed over substantially all of Customer's assets, or if
Customer fails to make any deposit required by paragraph 13.(b), or if USBI has
reasonable grounds to believe that the fees, charges, charge backs, credits and
adjustments to Customer may exceed any amount owning or to become owing from
USBI to Customer, USBI may withhold payments to Customer until all such amounts
have been determined and deducted from the amount owing to Customer. If the
amount owing to Customer is determined not sufficient to satisfy these fees,
charges, charge backs, credits and adjustments, then Customer shall pay the
difference to USBI within ten (10) Business Days of notification by USBI of any
amount due.
(d) Method of Payment. USBI will make all advance payments and final
payments due to Customer, using ACH wire transfer each Tuesday or the first
Business Day
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following Tuesday should Tuesday not fall on a Business Day, based on the
schedule described in paragraph 6.(c) herein.
(e) Accounting for Funds. Funds received from the LECs for Customer's
Valid EMI Billing Records, less applicable fees, charges, charge backs, credits
and adjustments, shall be deposited and held by USBI in a common account until
such time as the amount determined to be due Customer is paid to Customer. USBI
will maintain an accounting of the balance owing or to be owing by USBI to
Customer of such amounts deposited and held by USBI.
SECTION 7. CUSTOMER'S OBLIGATIONS.
The Customer agrees as follows:
(a) Cooperation by Customer. Customer agree to Cooperate with USBI to
the fullest extent possible and to the best of Customer's ability to facilitate
the provisioning of services extent described in Section 3 herein. Such
cooperation shall include, but not be limited to, the following:
(i) Supplying USBI with Customer's identification Codes, any and
all certifications or regulatory authority necessary for Customer to
offer its services, and any other information and documents necessary
or helpful to USBI; and
(ii) Supplying USBI with all technical information and assistance
with testing that may be necessary or helpful to USBI in providing its
services herein.
(b) Applicable Approvals and Compliance with Law. Customer shall obtain
and keep current all applicable federal state and local licenses, certifications
and approvals and shall fully comply with, and has full responsibility to comply
with, all other applicable federal, state and local regulations, laws, rules and
Tariffs. Customer agrees that USBI shall assume and will assume no
responsibility for such compliance whatsoever. Customer acknowledges and
understands that certain LEC billing systems contains edits and screens that
"block" Customer's EMI Billing Records from being billed to End Users until USBI
can demonstrate to such LECs that Customer has proper authority for providing
its services to the End User. Customer further acknowledges and understands that
it may take as long as sixty (60) days after notification to the LECs of such
authority before the LECs will begin billing Customer's EMI Billing Records.
Therefore, USBI will not be responsible for billing Customer's EMI Billing
Records for services prior to the LECs removing their regulatory edits and
screens from their billing systems.
(c) Validation. Customer shall validate all collect, third party and
calling card billed MTS calls using the LECs' LIDBs (line information data
bases) or some other alternative validation method that is acceptable to the
LECs and to USBI.
(d) Completed Calls. Customer acknowledges and agrees the where
required, Customer shall be in compliance with the FCC's order to determine call
connection using hardware or software "answer detection." Customer further
agrees that it will submit to
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USBI only those EMI BilLing Records for calls that represent valid, completed
calls as defined in Exhibit "D" attached hereto.
(e) Aged EMI Billing Records. Customer shall not submit EMI Billing
Records to USBI that are more than ninety (90) days old or that exceed the "age
of toll" acceptable by the LECs, whichever is less.
(f) Minimum Transmission Volumes. Customer shall not submit to USBI
more than once per week its EMI Billing Records.
(g) Objectionable Content. Customer agrees, as a condition of USBI's
performance under this Agreement that USBI will not provide billing and
information management services which USBI deems harmful, damaging or against
public policy, including, but not limited to:
(i) Services which explicitly or implicitly refer to sexual
conduct;
(ii) Services which contain indecent, obscene or profane
language;
(iii) Services which allude to bigotry, racism, sexism or
other forms of discrimination;
(iv) Services which through advertising, content or delivery
are deceptive, or that may take unfair advantage of minors or the
general public;
(v) Services which are publicly accessible, multiparty
connections commonly known as "gab" or "chat" services;
(vi) Services which are prohibited by Federal, state, or local
laws or Tariffs; or
(vii) Services which individual LECs exclude from the "types"
of services or products for which their policies permit them to xxxx
and collect.
(h) No Other Billing Arrangement. Customer warrants that the EMI
Billing Records submitted and to be submitted by Customer to USBI pursuant to
this Agreement are not and will not be subject to any other valid or existing
billing and collection agreement, have not been billed previously and will not
be billed by another party following their submission by Customer to USBI.
(i) Customer shall limit the number of EMI Billing Records for Casual
OS Telephone Traffic to not more than ten Percent (10%) of the total EMI Billing
Records submitted to USBI on any given transmission. If Customer's volume of EMI
Billing Records for Casual OS Telephone Traffic exceeds ten percent (10%), then
Customer must execute a Zero Plus - Zero Minus Billing and Information
Management Services Agreement with ZPDI and shall submit its EMI Billing Records
for Casual OS Telephone Traffic to ZPDI for billing under this Zero Plus - Zero
Minus Billing and Information Management Agreement.
(j) Payment of Amounts Due USBI: For any amounts determined to be due
USBI by Customer under this Agreement, Customer agrees to pay such amounts to
USBI within ten (10) days of notification by USBI to Customer. After a period of
thirty (30) days from such invoice date, interest on unpaid balances shall
accrue at the lower of 12% per annum or the highest legal rate allowed by law.
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SECTION 8. PROTECTION OF CONFIDENTIAL INFORMATION.
As used herein, "Confidential Information' shall, mean (a) proprietary
information, (b) information marked or designated as confidential, (c)
information otherwise disclosed in a manner consistent with its confidential
nature, (d) information of one party, whether or not in written form and whether
or not designated as confidential, that is known or should reasonably be known
by the other party as being treated as confidential, and (e) information
submitted by one party to the second party where the second party knows or
reasonably should know that the first party is obligated to keep the information
confidential. The parties hereto expressly recognize and acknowledge that, as
result of the provision of services pursuant to this Agreement, Confidential
Information which may be proprietary to each party must or may be disclosed to
the other. Each party hereby agrees that it will make no disclosure of
Confidential Information provided under this Agreement without the prior written
consent of the other party. Additionally, each party shall restrict disclosure
of said information to its own employees, agents or independent contractors to
whom disclosure is necessary and who have agreed to be bound by.
SECTION 9. TAXES.
(a) Calculation of Telecommunications Taxes. USBI will be responsible
for calculating or will use its best efforts to cause the LECs to calculate the
following taxes applicable to each MTS call and allow them to be passed through
to the End User, such taxes being referred to herein collectively as "Taxes":
Federal excise tax, any state and local sales taxes or tax-like charges, or any
Foreign Intrastate Taxes or foreign tax-like charges. Notwithstanding the
foregoing, Customer acknowledges and agrees it is responsible for compliance
with all taxing requirements: therefore, Customer shall promptly notify USBI of
any tax or tax-like surcharges and the associated rates that apply to Customer's
MTS calls in any specific jurisdiction.
(b) Billing and Collection of Taxes. USBI will, for the benefit of and
on behalf of Customer. use its best efforts to cause the LECs to xxxx End Users
for all Taxes. Customer acknowledges and agrees that USBI is acting merely as
Customer's agent with respect to arranging for the billing and collection of
Taxes, and in no event shall USBI be entitled to retain or receive from
Customer, or from any End User, any statutory fee or share of Taxes to which the
person collecting the same may be entitled under applicable law.
(c) Tax Exempt Status for End Users. USBI will have the authority, on
behalf of Customer, to authorize the LECs to calculate Taxes in the same manner
as the LECs calculate Taxes for their End Users and to authorize the LECs to
establish the tax exempt status of End Users in the same manner as the LECs
establish such status for their End Users. If Customer's MTS calls are exempt
from Federal, state and local Taxes or tax-like charges, Customer shall so
indicate on each EMI Billing Record submitted to USBI.
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(d) Filing and Payment of Taxes. Based upon the information calculated
by USBI and/or received from the LECs with respect to Taxes assessed, billed and
collected by the LECs, USBI will, on behalf of Customer, prepare and file in a
timely manner with the applicable taxing authorities all returns covering Taxes,
and will, on behalf of Customer, but only to the extent of amounts otherwise
owing from USBI to Customer, pay in full and promptly remit to such taxing
authorities all Taxes owed thereto. Upon written request, USBI will provide to
Customer copies of any and all tax returns and other applicable information
relating to the payment of Taxes by USBI within thirty (30) days after being
filed and paid by USBI.
(e) Hold Harmless. Customer shall indemnify and hold USBI and its
employees, agents and representatives free and harmless from and against any
Claim (including, without limitation, reasonable attorneys' fees and court
costs) relating to or arising out of any Taxes, penalties, interest, additions
to tax, surcharge or other amounts to which USBI may be subject or incur,
relating to or arising out of (i) USBI's reliance upon any calculations,
determinations or other directives, or lack thereof, given by Customer to USBI
with respect to the calculation, assessment, billing and/or collection of any
Taxes contemplated by this Agreement; or (ii) a determination by the Internal
Revenue Service or any other taxing authority that any amount paid by USBI
pursuant to paragraph 9.(d) above with respect to Taxes was insufficient, except
in the event such insufficiency was the result of negligence on the part of
USBI; provided, however, that Customer shall not be required to indemnify USBI
or the employees, agents and representatives thereof for any loss, damage,
Claim, cause of action or other liability to the extent, but only to the extent,
caused by the gross negligence or willful misconduct of USBI.
(f) Billed Taxes. Customer shall be responsible for the payment of any
additional Taxes or tax-like charges assessed against USBI based on the revenues
collected from Customer's Valid EMI Billing Records. "Billed Taxes" under this
Agreement, excluding Federal and state income Taxes.
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SECTION 10. FORCE MAJEURE.
USBI shall not be held liable for any delay or failure in performance of any
part of this Agreement or Exhibits attached hereto from any cause beyond its
control and without its fault or negligence, such as acts of God, acts of civil
or military authority, government regulations, embargoes, epidemics, war,
terrorist acts, riots, insurrections, fires, explosions, earthquakes, nuclear
accidents, floods, strikes, power blackouts, volcanic action, other major
environmental disturbances, unusually severe weather conditions, inability to
secure products or services of other persons or transportation facilities, or
acts or omissions of transportation common carriers.
SECTION 11. LIMITATION OF LIABILITY.
(a) USBI will use its best efforts at all times to provide prompt and
efficient service: however, USBI makes no warranties or representations
regarding the services except as specifically stated in this paragraph 11.(a).
USBI will use due care in processing all work submitted to it by Customer and
agrees that it will, at its expense, correct any errors which are due solely to
malfunction of USBI's computers, operating systems or programs or errors by
USBI's employees or agents. Correction shall be limited to reprocessing
Customer's EMI Billing Records. USBI will not be responsible in any manner for
failures of, or errors in, proprietary systems and programs other than those of
USBI, nor shall USBI be liable for errors or failures of Customer's software or
operational systems. THIS WARRANTY IS EXCLUSIVE AND IS IN LIEU OF ALL OTHER
WARRANTIES, AND CUSTOMER HEREBY WAIVES ALL OTHER WARRANTIES, EXPRESSED, IMPLIED,
OR STATUTORY, BUT LIMITED TO, ANY WARRANTY MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE. Should there be any failure in performance or errors
or omissions by USBI with respect to the information being processed and being
submitted to the LECs for billing and collection, USBI's liability shall be
limited to using its best efforts to correct such failure. In no event, except
as specifically set forth herein, shall USBI be liable to Customer or any third
parties (including Customer's customers) for any Claim even if USBI has been
advised of the possibility of such Claim.
(b) Due to the nature of the services being performed by USBI, Customer
agrees that in no event will USBI be liable for any Claim caused by USBI's
performance or failure to perform hereunder which is not reported by Customer in
writing to USBI within thirty (30) days of such performance or failure to
perform.
(c) Customer shall indemnify and save harmless USBI from and against
any Claim asserted against USBI by third parties and arising out of Customer's
use of the services provided under this Agreement, unless such Claim arises out
of the willful misconduct or gross negligence of USBI.
(d) Liability of USBI in any and all categories and for any and all
Claims arising out of this Agreement or out of any act or omission relating
thereto shall, in the aggregate, not exceed one (1) month's average of USBI's
Processing Fees to Customer over the twelve (12) months preceding such date in
which the damage or injury is alleged
13
14
to have occurred, but if this Agreement has not been in effect for twelve (12)
months preceding such date, then over such fewer number of preceding months that
this Agreement has been in effect.
SECTION 12. TERM OF AGREEMENT.
The initial term of this Agreement shall begin on the date on page 1 of this
Agreement or the date Customer begins submitting its EMI Billing Records to
USBI, whichever is later, and continue in full force and effect for a minimum
period of one (1) year unless terminated in accordance with paragraph 14.(b)(i)
and shall automatically renew for successive periods of one (1) year unless
terminated by written notice from either party at least sixty (60) days prior to
the scheduled expiration date.
Notwithstanding anything to the contrary contained herein, if Customer is
currently billing more than two hundred and fifty thousand (250,000) EMI Billing
Records per month, Customer may elect an initial term for this Agreement of two
(2) or three (3) years. Should Customer elect to extend the initial term of this
Agreement, Customer shall pay USBI a minimum Processing Fee, as described in
Exhibit "C" attached hereto, each month for the entire term of this Agreement.
In consideration for such, USBI will charge Customer a reduced billing services
fee for the term selected which coincides with the USBI fee schedule as
presented in Exhibit "C", attached hereto.
SECTION 13. EXPIRATION OR TERMINATION.
(a) Payment Upon Expiration or Termination. Upon the expiration or
termination of this Agreement for any reason, Customer agrees to satisfy, when
or before due, any and all of its obligations arising under this Agreement.
(b) Deposit for Charges. In addition Customer acknowledges and
understands that certain LEC charges for Uncollectible Amounts, Bad Debt
true-ups and Post-Billing Adjustments and Credits are not determined by the LECs
or provided to USBI for a period of up to eighteen (18) months after the final
processing of Customer's EMI Billing Records by USBI on behalf of Customer.
Customer further acknowledges and agrees that payment of these amounts shall be
its sole responsibility. To ensure such payments, Customer shall, at the
expiration or termination of this Agreement for any reason, deposit with USBI an
amount equal to two and one-half percent (2.5%) of the face amount of Customer's
gross xxxxxxxx for the prior twelve (12) months, or such other amount as is
estimated by USBI, based on Customer's prior history, necessary to satisfy such
charges. Such deposited amount shall be used by USBI to pay Uncollectible
Amounts, Bad Debt true-ups, Post-Billing Adjustments and Credits and other
charges incurred on behalf of Customer for billing and collecting Customer's EMI
Billing Records submitted by Customer to USBI during the term of this Agreement.
Each quarter USBI will re-examine the amount of funds deposited and make such
adjustments as USBI estimates may be necessary to satisfy the aforementioned
charges. USBI will provide Customer with proper documentation to substantiate
charges attributable to Customer on the same and consistent method as USBI
determines such charges for all of its customers.
14
15
At the end of eighteen (18) months from the expiration or termination date, USBI
will return all unused amounts to Customer.
(c) Remaining Liability. Notwithstanding the foregoing, the deposit of
such amounts does not relieve or waive Customer's responsibility and obligation
to pay its obligations to USBI including, without limitation, any and all fees,
charges, charge backs, credits and adjustments associated with billing and
collecting its EMI Billing Records. In the event such associated fees, charges,
charge backs, credits and adjustments exceed the amount of the deposit described
in paragraph 13.(b), Customer shall remit to USBI such additional amounts as are
required to satisfy Customer's obligations under this Agreement to USBI within
ten (10) Business Days of notification by USBI of any such amounts due.
(d) Savings Clause. Except as otherwise provided herein, expiration or
termination of this Agreement under this Section 13 shall terminate all further
rights and obligations of the parties hereunder, provided that:
(i) Neither USBI nor Customer shall, be relieved of its
respective obligations to pay any sums of money due or to become due or
payable or accrued under this Agreement;
(ii) If such expiration or termination is a result of a
default hereunder or a breach hereof by a party hereto, the other party
shall be entitled to pursue any and all rights and remedies it has to
redress such default or breach in law or equity, subject to Sections 11
& 14 hereof; and
(iii) The provisions of Sections 8 and 9 hereof, except
paragraph 9.(b), shall survive the expiration or termination of this
Agreement.
(e) Early Termination of Extended Term Agreement. If Customer elects to
extend the initial term of this Agreement and should Customer terminate or
breach this Agreement before the expiration of the full initial term elected by
Customer upon execution hereof, USBI will recalculate and Customer shall pay to
USBI a USBI Processing Fee for all EMI Billing Records processed under this
Agreement based on the current USBI Processing Fee schedule at the one (1) year
rate, attached hereto as Exhibit "C", plus ten percent (10%) for each EMI
Billing Record processed under this Agreement, at Customer's monthly volume
levels.
SECTION 14. DEFAULT AND REMEDIES.
(a) Default. Either Party shall be in default hereunder if it:
(i) Fails to make any payment specified hereunder when or
before due and such failure continues for five (5) Business Days after
written notice;
(ii) Breaches any other material covenant or undertaking
contained in this Agreement and fails to remedy such breach within
thirty (30) Business Days after written notice thereof from the
non-defaulting party: or
(iii) Files, or there is filed against it, any voluntary or
involuntary proceeding under the Bankruptcy Code, or makes an
assignment for the benefit of creditors, dissolves, ceases to conduct
business for three (3) Business Days, resorts to any insolvency law,
declares that it is unable to pay its debts as they mature or
15
16
if a receiver, trustee or custodian is appointed over, or an execution,
attachment, or levy is made upon, all or any material part of the
property of such party.
(b) Remedies. Time is of the essence of this Agreement. In the event of
any default hereunder, the non-defaulting party shall have the following rights
and remedies:
(i) To terminate or cancel this Agreement,. subject to the
provisions of paragraph 13.(d), by giving written notice thereof to the
defaulting party;
(ii) To declare all amounts due under this Agreement from the
defaulting party to the non-defaulting party to be immediately, due and
payable, including attorneys fees and expenses incurred or which may be
incurred in the collection of such amounts;
(iii) To withhold, setoff, and retain, until all obligations
of Customer to USBI have been satisfied in full, any and all amounts
which may otherwise be due and payable to Customer under this Agreement
and apply such amounts to any balance due or to become due from
Customer to USBI.
(iv) All rights and remedies allowed by the applicable Uniform
Commercial Code;
(v) All other rights and remedies allowed by this USBI
Agreement and under applicable law: and
(vi) All rights and remedies shall be cumulative and can be
exercised separately or concurrently.
SECTION 15. AMENDMENTS; WAIVERS.
No modification, amendment or waiver of any provision of this Agreement, and no
consent to any default under this Agreement, shall be effective unless the same
shall be in writing and signed by or on behalf of the party against whom such
modification, amendment, waiver or consent is claimed. In addition, no course of
dealing or failure of any party to strictly enforce any term, right or condition
of this Agreement shall be construed as a waiver or such term, right or
condition.
SECTION 16. ASSIGNMENT.
(a) By Customer or USBI. Assignment by Customer or USBI of any right,
obligation or duty or of any other interest hereunder, in whole or in part,
shall require consent by both parties. Such consent shall not be unreasonably
withheld by either party.
(b) Generally. All rights, obligations, duties and interests of any
party under this Agreement shall inure to the benefit stand be binding on all
successors in interest and assigns of such party and shall survive any
acquisition, merger, reorganization or other business combination to which it is
a party.
16
17
SECTION 17. NOTICES AND DEMANDS.
(a) How Notice Is Given. Except as otherwise provided under this
Agreement, all notices, demands and requests which may be given to any party to
the other party shall be in writing and shall be: (i) delivered in person; (ii)
mailed postage prepaid, registered or certified mail, return receipt requested;
(iii) placed in the hands of a national overnight delivery service or (iv) sent
by facsimile transmission to the recipient's facsimile machine, with an extra
copy immediately following by first class mail; and addressed as follows:
IF TO USBI, TO IT AT:
BILLING INFORMATION CONCEPTS, INC.
DBA U.S. BILLING
ATTENTION: XXXX X. XXXXXXXX
0000 XXXX XXXXX XXXXX, XXXXX 000
XXX XXXXXXX, XXXXX 00000-0000
TELEPHONE: (000) 000-0000
FAX: (000) 000-0000
--------------------------------------------------------------
If to Customer, to it at:
---------------------------
Attention: ---------------------------
---------------------------
Telephone:
---------------------------
FAX:
---------------------------
If personal delivery is selected as the method of giving notice under this
Section, a receipt for such delivery shall be obtained. The address to which
such notices, demands, requests, elections or other communications may be given
by either party may be changed by written notice given by such party to the
other party pursuant to this Section 17.
(b) When Notice Effective: Except as otherwise expressly provided
herein, all such notices shall be effective upon receipt if delivered by hand,
facsimile, national overnight delivery service, certified or registered mail and
otherwise five (5) Business Days after placement in the U.S. Mails. The initial
term of this Agreement shall be for a period of ____________ (one, two or three)
years from the date hereof.
17
18
IN WITNESS WHEREOF, the parties hereto have set their hands as of the date first
set forth above.
Billing Information Concepts, Inc.
dba U.S. Billing:
By: ________________________________
Xxxx X. Xxxxxxxx
President and
Chief Operating Officer
Date: _______________________________
CUSTOMER:
_____________________________________
By:__________________________________
Name:________________________________
(print)
Its:________________________________
Date:_______________________________
Xxxxxx X. Xxxxxxx
Account Representative
18
19
EXHIBIT "A"
USBI BILLING TELEPHONE COMPANIES
Alltel
Ameritech
Xxxx Atlantic
Xxxx South
Century Telephone
Chillicothe Telephone
Cincinnati Xxxx
Citizens Via Alltel
Citizens Via GTE
GTE Central
GTE Contel
GTE North
GTE South
GTE West
Illuminet
NECA
NYNEX
Pacific Telcom
Pactelis
Southern New England Xxxx
Southwestern Xxxx
Sprint Mid-Atlantic Telecom
Telecom Canada
U.S. WEST
United Florida
United Midwest
United North Central
NOTE: NPA-NXX list (On-Net File) of above BTCs will be furnished to Customer
quarterly. Format and media (i.e., reel-to-reel magnetic tape, diskette or
electronic bulletin board), to be mutually agreed upon by both parties.
COMPANY CONFIDENTIAL
19
20
EXHIBIT "B"
U.S. BILLING CONTRACTUAL LEC COST
NOVEMBER 1997
PAGE 1 OF 5
LEC COMPANY NAME XXXX RENDERING CALL RECORDS ENHANCED
INTER INTRA INTER INTRA 42 RCDS
STATE STATE STATE STATE
XXXX OPERATING COMPANIES:
10 NYNEX
9102 NEW ENGLAND TELEPHONE(1)
MASSACHUSETTS 0.9600 0.5500 0.0100 0.0200 0.0000
MAINE 0.9600 0.9600 0.0100 0.0100 0.0000
NEW HAMPSHIRE 0.9600 0.9600 0.0100 0.0100 0.0000
RHODE ISLAND 0.9600 0.9600 0.0100 0.0100 0.0000
VERMONT 0.9600 0.9600 0.0100 0.0100 0.0000
9104 NEW YORK TELEPHONE(1)
CONNECTICUT 0.9600 0.9600 0.0100 0.0100 0.0000
NEW YORK 0.9600 0.9600 0.0100 0.0100 0.0000
00 XXXX
0000 XXXXXXXX XXX XXXXXXX 0.5100 0.5100 0.0560 0.0560 0.0000
00 XXXX XXXXXXXX
0000 XXX XXXXXX XXXX 0.3300 0.3300 0.0240 0.0240 0.2500
9208 PENNSYLVANIA XXXX 0.3300 0.3300 0.0240 0.0240 0.2500
9210 DIAMOND STATE 0.3300 0.3300 0.0240 0.0240 0.2500
9211 C&P WASHINGTON D.C. 0.3300 0.3300 0.0240 0.0240 0.2500
9212 C&P MARYLAND 0.3300 0.3300 0.0240 0.0240 0.2500
9213 C&P VIRGINIA 0.3300 0.3300 0.0240 0.0240 0.2500
9214 C&P WEST VIRGINIA 0.3300 0.3300 0.0240 0.0240 0.2500
16 AMERITECH
9321 OHIO XXXX 0.3500 0.3500 0.0300 0.0300 0.0000
9323 MICHIGAN XXXX 0.3500 0.3500 0.0300 0.0300 0.0000
9325 XXXXXXX XXXX 0.3500 0.3500 0.0300 0.0300 0.0000
9327 WISCONSIN XXXX 0.3500 0.3500 0.0300 0.0300 0.0000
9329 ILLINOIS XXXX 0.3500 0.3500 0.0300 0.0300 0.0000
18 CINCINNATI XXXX
9348 KENTUCKY 0.6000 0.5500 0.0192 0.0192 0.0300
9348 OHIO 0.6000 0.6000 0.0192 0.0192 0.0300
COMPANY CONFIDENTIAL
1. The rendering fee includes the first ten (10) messages. The additional $.01
only applies beginning at the eleventh (11th) message and greater.
20
21
EXHIBIT "B"
U.S. BILLING CONTRACTUAL LEC COST
November 1997
Page 2 of 5
LEC COMPANY NAME XXXX RENDERING CALL RECORDS ENHANCED
INTER INTRA INTER INTRA 42 RCDS
XXXXX XXXXX XXXXX XXXXX
00 XXXX XXXXX
0000 XXXXXXXX XXXX
XXXXXXX 0.3690 0.0000 0.0262 0.0210 0.1239
GEORGIA 0.3690 0.3600 0.0262 0.0700 0.1239
NORTH CAROLINA 0.3690 0.3600 0.0262 0.0610 0.1239
SOUTH CAROLINA 0.3690 0.3600 0.0262 0.0700 0.1239
0000 XXXXX XXXXXXX XXXX:
ALABAMA 0.3690 0.2600 0.0262 0.0506 0.1239
KENTUCKY 0.3690 0.2900 0.0262 0.0560 0.1239
LOUISIANA 0.3690 0.2900 0.0262 0.0560 0.1239
MISSISSIPPI 0.3690 0.2900 0.0262 0.0560 0.1239
TENNESSEE 0.3690 0.2900 0.0262 0.0560 0.1239
00 XXXXXXXXXXXX XXXX
0000 XXXXXXXXXXXX XXXX 0.0000 0.2740 0.0190 0.0190 0.0121
00 X.X. XXXX
0000 XXXXXXXXXXXX XXXX 0.0000 0.4200 0.0250 0.0250 0.1000
9631 MINNESOTA 0.4200 0.4200 0.0350 0.0350 0.1000
9636 MOUNTAIN XXXX 0.4200 0.4200 0.0250 0.0250 0.1000
9639 PACIFIC NORTHWEST 0.4200 0.4200 0.0250 0.0250 0.1000
XXXX
26 PACTELIS
9740 PACIFIC XXXX 0.2400 0.1900 0.0110 0.0110 0.0000
9742 NEVADA XXXX 0.3500 0.6000 0.0350 0.0910 0.0000
GTE COMPANIES:
00 XXX XXXXX
000 XXX XX XXXXXXX 0.0000 0.3500 0.0450 0.0762 0.1350
407 KENTUCKY 0.3900 0.3500 0.0450 0.0762 0.1350
4331 ALABAMA 0.3900 0.3500 0.0450 0.0762 0.1350
4334 NORTH CAROLINA 0.3900 0.3500 0.0450 0.0762 0.1350
4335 SOUTH CAROLINA 0.3900 0.3500 0.0450 0.0762 0.1350
4337 VIRGINIA 0.3900 0.3900 0.0450 0.0450 0.1350
00 XXX XXXXX
000 XX XX XXXXXXXXXXXX 0.3900 0.3900 0.0450 0.0450 0.1350
615 GTE OF OHIO 0.3900 0.3900 0.0450 0.0450 0.1350
695 GM OF MICHIGAN 0.3900 0.3900 0.0450 0.0450 0.1350
772 GTE OF INDIANA 0.3900 0.3900 0.0450 0.0450 0.1350
886 GTE OF WISCONSIN 0.3900 0.3500 0.0450 0.0762 0.1350
1015 GTE ILLINOIS 0.3900 0.3500 0.0450 0.0762 0.1350
COMPANY CONFIDENTIAL
21
22
EXHIBIT "B"
U.S. BILLING CONTRACTUAL LEC COST
NOVEMBER 1997
PAGE 3 OF 5
LEC COMPANY NAME XXXX RENDERING CALL RECORDS ENHANCED
INTER INTRA INTER INTRA 42 RCDS
STATE STATE STATE STATE
GTE COMPANIES - CON'T.:
46 GTE CENTRAL
4311 IOWA 0.3900 0.3900 0.0450 0.0450 0.1350
4312 MINNESOTA 0.3900 0.2700 0.0450 0.0170 0.1350
4313 MISSOURI 0.3900 0.3500 0.0450 0.0643 0.1350
4314 NEBRASKA 0.3900 0.3900 0 0450 0.0450 0.1350
4341 ARKANSAS 0.3900 0.3900 0.0450 0.0450 0.1350
4342 NEW MEXICO 0.3900 0.3500 0.0450 0.0565 0.1350
4343 OKLAHOMA 0.3900 0.3900 0.0450 0.0450 0.1350
4344 CONTEL dba GTE TEXAS 0.3900 0.7500 0.0450 0.0300 0.1350
4344 GTE SOUTHWEST INC. 0.3900 0.3500 0.0450 0.0565 0.1350
52 GTE WEST
2319 CALIFORNIA 0.3900 0.1900 0.0450 0.0110 0.1350
2319 GTE, WC CA 0.3900 0.3500 0.0450 0.0762 0.1350
3100 GTE OF HAWAII 0.3900 0.0000 0.0450 0.0000 0.1350
4321 IDAHO 0.3900 0.3500 0.0450 0.0762 0.1350
4323 OREGON 0.3900 0.3500 0.0450 0.0762 0.1350
4324 WASHINGTON 0.3900 0.4800 0.0450 0.0762 0.1350
53 CITIZENS XXX XXX
0000 IDAHO 0.0000 0.0000 0.0938 0.0938 0.0900
4322 MONTANA 0.0000 0.0000 0.0938 0.0938 0.0900
4336 TENNESSEE 0.0000 0.0000 0.0634 0.0634 0.0900
4338 WEST VIRGINIA 0.0000 0.0000 0.0634 0.0634 0.0900
4426 ARIZONA 0.3900 0.3900 0.0450 0.0450 0.1350
4429 UTAH 0.0000 0.0000 0.0522 0.0522 0.0900
INDEPENDENTS:
28 TELECOM CANADA 0.0000 0.0000 0.5500 0.5500 0.0000
58 UNITED FLORIDA
340 CENTRAL 0.3150 0.0000 0.0280 0.0210 0.0000
141 UNITED 0.3150 0.0000 0.0280 0.0210 0.0000
COMPANY CONFIDENTIAL
22
23
EXHIBIT "B"
U.S. BILLING CONTRACTUAL LEC COST
NOVEMBER 1997
PAGE 3 OF 5
LEC COMPANY NAME XXXX RENDERING CALL RECORDS ENHANCED
INTER INTRA INTER INTRA 00 XXXX
XXXXX XXXXX XXXXX XXXXX
00 XXXXXX XXXXXXX
1456 MINNESOTA 0.3150 0.3150 0.0280 0.0320 0.0000
1594 WYOMING 0.3150 0.3150 0.0280 0.0320 0.0000
1595 NEBRASKA 0.3150 0.3150 0.0280 0.0320 0.0000
1810 EASTERN KANSAS 0.3150 0.3150 0.0280 0.0320 0.0000
1810 SOUTHCENTRAL KANSAS 0.3150 0.3150 0.0280 0.0320 0.0000
2084 KANSAS 0.3150 0.3150 0.0280 0.0320 0.0000
1957 MISSOURI 0.3150 0.2016 0.0280 0.0261 0.0000
2084 TEXAS 0.3150 0.3765 0.0280 0.0274 0.0000
2114 TEXAS CENTRAL 0.3150 0.1349 0.0280 0.1032 0.0000
2348 NEVADA 0.3000 0.0091 0.0500 0.0477 0.0000
0000 XXXXXXXXX 0.3150 0.3133 0.0320 0.0320 0.0000
63 SPRINT MID-ATLANTIC TELECOM
254 CENTRAL TELEPHONE 0.3150 0.3150 0.0280 0.0280 0.0000
470 CAROLINA T&T 0.3150 0.5590 0.0280 0.0240 0.0000
471 CENTRAL TELEPHONE 0.3150 0.2844 0.0280 0.0574 0.0000
506 UNITED TELEPHONE-SE (SC) 0.3150 0.3150 0.0280 0.0280 0.0000
567 UNITED TELEPHONE-SE (TN) 0.3150 0.3150 0.0280 0.0280 0.0000
567 UNITED TELEPHONE-SE (VA) 0.3150 0.3150 0.0280 0.0280 0.0000
00 XXXXXX XXXXX XXXXXXX
000 XXX XXXXXX 0.3000 0.3000 0.0500 0.0500 0.0000
209 PENNSYLVANIA 0.3000 0.3000 0.0500 0.0500 0.0000
661 OHIO 0.1000 0.3000 0.0500 0.0500 0.0000
832 INDIANA O.3000 0.3000 0.0500 0.0500 0.0000
985 ILLINOIS 0.3000 0.3000 0.0500 0.0500 0.0000
00 XXXXXX
00 XXX XXXX 0.5400 0.5400 0.0700 0.0700 0.0000
61 PENNSYLVANIA 0.5400 0.5400 0.0700 0.0700 0.0000
94 OHIO 0.5400 0.5400 0.0700 0.0700 0.0000
157 PENNSYLVANIA 0.5400 0.4700 0.0700 0.1090 0.0000
176 PENNSYLVANIA 0.5400 0.5400 0.0700 0.0700 0.0000
302 ALABAMA 0.5400 0.5400 0.0700 0.0700 0.0000
336 FLORIDA 0.5400 0.5400 0.0700 0.0700 0.0000
357 GEORGIA 0.5400 0.4700 0.0700 0.1090 0.0000
402 KENTUCKY 0.5400 0.8800 0.0700 0.0563 0.0000
COMPANY CONFIDENTIAL
23
24
EXHIBIT "B"
U.S. BILLING CONTRACTUAL LEC COST
NOVEMBER 1997
PAGE 5 OF 5
LEC COMPANY NAME XXXX RENDERING CALL RECORDS ENHANCED
INTER INTRA INTER INTRA 00 XXXX
XXXXX XXXXX XXXXX XXXXX
00 ALLTEL - CON'T.
453 MISSISSIPPI 0.5400 0.5400 0.0700 0.0700 0.0000
476 NORTH CAROLINA 0.5400 0.2800 0.0700 0.0604 0.0000
517 SOUTH CAROLINA 0.5400 0.5400 0.0700 0.0700 0.0000
577 TENNESSEE 0.5400 0.4700 0.0700 0.0700 0.0000
762 FLORIDA 0.5400 0.0000 0.0700 0.0716 0.0000
850 NORTH CAROLINA 0.5400 0.2900 0.0700 0.0604 0.0000
894 SOUTH CAROLINA 0.5400 0.3600 0.0700 0.0790 0.0000
938 MISSISSIPPI 0.5400 0.4700 0.0700 0.1090 0.0000
1691 ARKANSAS 0.5400 0.5400 0.0700 0.0700 0.0000
1885 MISSOURI 0.5400 0.8200 0.0100 0.0509 0.0000
1965 OKLAHOMA 0.5400 0.5400 0.0700 0.0700 0.0000
2011 OKLAHOMA 0.5400 0.5400 0.0700 0.0700 0.0000
2121 TEXAS 0.5400 0.4700 0.0700 0.1090 0.0000
2153 TEXAS 0.5400 0.4700 0.0700 0.1085 0.0000
4332 GEORGIA 0.5400 0.3500 0.0700 0.0812 0.0000
4425 GEORGIA 0.5400 0.4700 0.0700 0.1085 0.0000
75 CITIZENS ALLTEL II
2354 NEVADA 0.8200 0.0000 0.0800 0.2270 0.0000
4432 OREGON 0.8200 0.0000 0.0800 0.0971 0.0000
4449 ARIZONA 0.8200 0.6500 0.0800 0.0490 0.0000
4450 NEW MEXICO 0.8200 0.6500 0.0800 0.0490 0.0000
76 CITIZENS XXX XXXXXX
00 XXX XXXX 0.0000 0.0000 0.0762 0.0762 0.0900
157 PENNSYLVANIA 0.5400 0.4700 0.0650 0.1035 0.0000
270 WEST VIRGINIA 0.8200 0.8200 0.6300 0.0630 0.0000
577 TENNESSEE 0.8200 0.0000 0.6300 0.0560 0.0000
4336 TENNESSEE 0.0000 0.0000 0.0634 0.0634 0.0000
81 INDEPENDENT NECA SVC. 0.3000 0.3000 0.2500 0.2500 0.0000
87 GTE CONTEL 0.4700 0.4700 0.7000 0.7000 0.0900
91 CHILLICOTHE TEL. CO. 0.0000 0.0000 0.3000 0.3000 0.0000
92 PACIFIC TELCOM 0.3000 0.3000 0.2500 0.2500 0.0000
93 CENTURY TELEPHONE 0.3900 0.1979 0.1300 0.1355 0.0000
94 ILLUMINET 0.3750 0.3750 0.3000 0.3000 0.0000
COMPANY CONFIDENTIAL
24
25
EXHIBIT "C"
PRICING
EFFECTIVE SEPTEMBER 1, 1997
(1) U.S. BILLING, MOST FAVORED PROCESSING FEES:
Volume RATE RCD 1 Year 2 Year 3 Year
------ -------- ------ ------ ------
0 -250,000 LEC Charge + $0.0525 $0.0525 $0.0525
Next 250,000 LEC Charge + $0.0525 $0.0485 $0.0440
Next 500,000 LEC Charge + $0.0475 $0.0435 $0.0390
Next 1,000,000 LEC Charge + $0.0435 $0.0395 $0.0350
Next 1,000,000 LEC Charge + $0.0405 $0.0365 $0.0320
Next 1,000,000 LEC Charge + $0.0385 $0.0345 $0.0300
Next 2,000,000 LEC Charge + $0.0385 $0.0345 $0.0225
Next 4,000,000 LEC Charge + $0.0385 $0.0345 $0.0185
Over 10,000,000 LEC Charge + $0.0385 $0.0345 $0.0150
USBI's most favored Processing Fees are in addition to the USBI's
contractual LEC Processing Fees as outlined in Exhibit "B" attached
hereto which are calculated monthly as described 'in paragraph 4.(f)
hereof.
If Customer elects an initial term of this Agreement of two (2) or
three (3) years, Customer acknowledges and agrees to pay a minimum
monthly processing fee of at least $13,125/month (250,000 records/month
times $.0525/record), for the entire two (2) or three (3) year term of
the Agreement.
(2) END USER CUSTOMER SERVICE INQUIRY, INVESTIGATION AND REBATE:
USBI will perform End User customer service inquiry, investigation and
rebate for those areas where the LEC billing and collection agreements
provide for such: Customer will be charged a total of $2.50 for each
customer service inquiry, investigation or rebate handled by USBI on
behalf of Customer.
(3) MINIMUM USBI PROCESSING FEE PER TRANSMISSION:
For each submission of EMI Billing Records to USBI, Customer shall not
pay a minimum USBI Processing Fee. Customer will not submit more than
once per week its EMI Billing Records.
(4) ACCOUNTS RECEIVABLES RECONCILIATION SYSTEM - FASTRACK:
Customer shall pay an initial, one-time fee for USBI's accounts
receivable reconciliation system known as FASTRACK. The charge is one
thousand five hundred dollars ($1,500) for the first library code and
five hundred dollars ($500) for each additional library code. There is
no charge for weekly accounts removable status updates.
-----------------
USBI's extended term processing fees are applied separately to the
monthly volume of EMI billing records processed for each library code
assigned to Customer. However, at Customer's option USBI will aggregate
the total volume of call records submitted under each library code to
calculate the combined volume to determine the USBI processing fee.
Should Customer so elect, Customer must submit to USBI its election in
a letter signed by an owner or officer of the Company stating its
election and authorizing USBI to charge and to deduct from amount due
Customer a total of $1,000 per month for each library code, after the
first, assigned to customer. COMPANY CONFIDENTIAL
25
26
EXHIBIT "D"
MTS CALL COMPLETION CRITERIA
A MTS call is completed if some type of direct communication or hardware or
software answer detection has been established between the originating person
and the terminating location. Collect and third number billed calls must be
verified that the receiving party or third party agrees to accept the charges
for the call if automated technologies are used, the receiving party must
positively acknowledge the acceptance of the call. In the case of
person-to-person calls, the operator must verify that the receiving party is the
person whom the originating party requested. For other direct dialed, automated
calling card or operator assisted calls, the call shall be considered completed
when the connection is verified by means of hardware or software detection as
required by Federal, state and local regulatory authorities.
In those cases where the Customer cannot determine the exact time the
terminating person has gone "off hook" (beginning of communication with the
originating party), and Federal, state or local regulatory authorities do not
require hardware or software answer detection, a call shall be considered to be
connected if the originating and receiving parties hold the connection for more
than thirty-six (36) seconds.
Calls for four hundred eighty (480) minutes (8 hours) or more are not considered
valid, completed calls and will not be billed.
Calls to operators, customer announcements, busy signals or ringing shall not be
considered completed calls and shall not be billed.
COMPANY CONFIDENTIAL
26
27
EXHIBIT "E"
EXCHANGE MESSAGE INTERFACE (EMI) BILLING RECORD
The following Bellcore EMI billing record formats will be processed by USBI for
the LECs that are capable of billing and collecting for services using the
following EMI billing record format
XXXXXX XX
000000 Domestic Message Telephone Service (MTS) Charge
010132 Domestic Directory Assistance Charge
010201 North American Originated and Billable International Charge
425001 Miscellaneous Recurring and Non-Recurring Service Charge
202203 Pack Header Record
202204 Pack Trailer Record
COMPANY CONFIDENTIAL
27
28
EXHIBIT "F"
USBI PROCEDURES FOR END USER CUSTOMER SERVICE
INQUIRIES, INVESTIGATIONS AND REBATES
PAGE 1 OF 2
I. For those LECs whose billing and collection agreements provide for USBI to
provide End User inquiry, investigation and rebate, USBI's toll-free "800"
number will appear on the End User's LEC telephone xxxx to be used for
resolution of any issues associated with the End User's xxxx.
At the time of the initial call from an End User, USBI's customer service
representative will request the End User's xxxx number in order to access
USBI's portion of the End User's xxxx. Once the account has been accessed,
the End User will be identified. If the End User is disputing any of the
following:
(a) Denying All Knowledge (DAK);
(b) Calls Not Connecting (CNC);
(c) Rates; or
(d) Fraudulent calls,
then an automated internal credit form will be prepared which contains the
following information:
(a) Xxxx name, number and address;
(b) Reason and dollar amount in dispute; and
(c) Copy of the EMI Billing Records being disputed.
II. This information will be forwarded to USBI's Investigations Department. All
inquiries over fifty dollars ($50.00) will be investigated. Basic investigation
procedure shall be to investigate all End User's bills where the End User denies
all knowledge (XXXx) of any and/or all records billed to them through USBI. Upon
receipt of the internal credit form and the printout of the End Users' records,
the following procedures shall be followed:
(A) Notify the LEC that an End User has denied all knowledge of the
telecommunication services being billed through USBI and that an
investigation will be conducted to determine the validity of such claim.
The following information will be given:
(1) End User's full name and address;
(2) Telephone number,
(3) Statement date; and
(4) Amount in dispute
(B) Maintain details of all conversations when investigating the calls
(i.e., person's name, complete telephone number, date and time of each
call).
(C) Maintain contact with the End User and the LEC concerning the
results of investigation.
COMPANY CONFIDENTIAL
28
29
EXHIBIT "F"
USBI PROCEDURES FOR END USER CUSTOMER SERVICE
INQUIRIES, INVESTIGATIONS AND REBATES
PAGE 2 OF 2
(D) Notify Customer daily of all XXXx that exceed seventy-five dollars
($75.00) Notification will include the origination number.
III. Verification with the LEC if the End credit card has been canceled, and
when. Any records billed after the credit card cancellation date shall be
refunded 100% to the End User. Access numbers on computer to determine if other
calls have been billed to the End User. Call sufficient telephone numbers listed
to determine if the receiving parties know the End User who is disputing the
calls.
IV. The next step will be to call the LEC to inform them that the xxxx was
fraudulent or resolved, and that USBI will let the End User know how USBI will
proceed. A log of all calls and rate adjustments will be kept for end-of-month
reports. A confirmation letter will be mailed to the End User, and the LEC will
be advised of the approval or denial of credit.
V. Investigation process will be complete at this time.
VI. The following items procedures will be followed for a End User who receives
a refund check:
(A) Verify that no duplicate check has been issued previously to the
same End User.
(B) Issue a refund check for the amount approved by the investigation
department.
(C) Prepare a letter of explanation to accompany the check being mailed
to the End User.
VII. The following procedures will be utilized for credit issued through Xxxx
Operating Companies (BOCs):
(A) IC/EC memorandum will be issued for the amount approved by the
investigation department or an electronic EMI credit record will be
prepared.
(B) IC/EC memorandum will be mailed to the End User's Local Exchange
Carrier for credit towards End User's account or EMI credit record will
be submitted with the next billing submission.
The above procedures for refund checks, electronic EMI credit records and IC/EC
memorandums usually take a total of five (5) Business Days.
COMPANY CONFIDENTIAL
29
30
EXHIBIT "G"
USBI BAD DEBT FACTOR
FOR PERIOD 08/01/96 - 07/31/97
PAGE 1 OF 2
LEC NAME CHARGE
XXXX OPERATING COMPANIES:
10 XXXXX
0000 XXX XXXXXXX TELEPHONE .0321
9104 NEW YORK TELEPHONE .1293
12 SNET
9147 SOUTHERN NEW ENGLAND NA
14 XXXX ATLANTIC
9206 NEW JERSEY XXXX .0460
9208 PENNSYLVANIA XXXX .0428
0000 XXXXXXX XXXXX .0000
0000 X&X XX XXXXXXXXXX, X.X. .0713
9212 C&P OF MARYLAND .0318
9213 C&P OF VIRGINIA .0227
9214 C&P OF WEST VIRGINIA .0214
16 AMERITECH
9321 OHIO XXXX .0294
9323 MICHIGAN XXXX .0300
9325 XXXXXXX XXXX .0300
9327 WISCONSIN XXXX .0300
9329 ILLINOIS XXXX .0300
00 XXXXXXXXXX XXXX
0000 XXXXXXXXXX XXXX .0000
20 BELLSOUTH
9417 SOUTHERN XXXX .0263
0000 XXXXX XXXXXXX XXXX .0000
22 SOUTHWESTERN XXXX
9533 SOUTHWESTERN XXXX .0416
00 X.X. XXXX
0000 X.X. XXXX - XXXXXXX .0000
9636 U.S. XXXX - XXXXXXX .0000
0000 X.X. XXXX - XXXXXXX .0722
26 PACTELIS
9740 PACIFIC XXXX .0609
9742 NEVADA XXXX .0361
COMPANY CONFIDENTIAL
30
31
EXHIBIT "G"
USBI BAD DEBT FACTOR
FOR PERIOD 08/01/96 - 07/31/97
PAGE 2 OF 2
LEC NAME CHARGE
GTE COMPANIES:
00 XXX XXXXX .0000
00 XXX XXXXX .0000
46 GTE CENTRAL .0425
52 GTE WEST .0620
53 CITIZENS XXX XXX .0000
00 XXX XXXXXX COMPANIES N/A
INDEPENDENTS:
28 TELECOM - CANADA N/A
58 UNITED FLORIDA .0332
62 UNITED MIDWEST .0391
63 SPRINT MID ATLANTIC TELECOM .0245
66 UNITED NORTH CENTRAL .0011
74 ALLTEL .0376
75 CITIZENS ALLTEL II N/A
76 CITIZENS VIA ALLTEL .0052
81 INDEPENDENT NECA SVC. N/A
91 CHILLICOTHE TELEPHONE COMPANY N/A
92 PACIFIC TELCOM N/A
93 CENTURY TELEPHONE N/A
94 ILLUMINET .0070
COMPANY CONFIDENTIAL
31
32
AMENDMENT NO. 1
This Amendment amends the Residential Distributor Program Agreement,
dated January 5, 1998 ("Agreement"), by and between LCI International Telecom
Corp ("LCI") and Quintelcomm, Inc. ("Representative").
1. The Agreement is hereby amended as follows:
A. This Amendment shall be effective for May and June 1998 and July
1998 only. Representative shall obtain {at least 100,000 newly
installed Customers} for the Services in each of May and June and July
1998, after completing {the "GBUS" order entry process}. The
commissions due as a result of the {first usage for the first 40,000
such Customers} each month shall be as set forth in the Agreement. The
commissions due as a result of the first usage for {the next 60,000
such Customers each month shall be as follows: $25.00 on "first usage"
and, provided there has been "first usage", $20.00 for each such
Customer who remains on the Service for at least thirty (30) days
following "CARE" confirmation, with no Usage Commission payable.} A new
"channel/org code" shall be used for such Customers {in excess of
40,000}. Commission payments under this Amendment may be made based on
good faith estimates by LCI. A "true up" shall be performed when
adequate and accurate reporting is available and additional payments or
chargebacks, as applicable, shall be made.
Notwithstanding anything in the Agreement to the contrary, in
May and June and July 1998 Representative may market for a competitor
of LCI provided 1) such marketing does not include a promotion that is
being marketed by Representative for LCI, 2) the segment of
Representative's database used for such marketing shall be separate and
distinct from that used or to be used for marketing on behalf of LCI
and 3) no LCI Customers shall be solicited.
After obtaining {at least 100,000 newly GBUS installed
Customers} in May 1998, Representative may, following written notice to
LCI,
33
accelerate the start of obtaining the
{"second" 100,000 newly GBUS installed Customers}, that would otherwise
begin in June.
B. All capitalized terms not defined in the Amendment shall be as
defined in the Agreement.
II. All other terms and conditions of the Agreement remain unchanged.
LCI International Telecom Corp.
By /s/Xxxx X. Xxxxxx Date 5-29-98
--------------------------- ------------------
Xxxx X. Xxxxxx, SVP Consumer Markets
(Print Name and Title)
Quintelcomm, Inc.
By /s/Xxxxxxx Xxxxxxxx Date 5-26-98
----------------------------- ------------------
Xxxxxxx Xxxxxxxx, COB
(Print Name and Title)
2
