Enhanced Services Billing and Information Management Services Agreement - Enhanced Services Billing Inc. and Telco Billing Inc.
RENEWAL
ENHANCED SERVICES BILLING AND INFORMATION MANAGEMENT SERVICES AGREEMENT
This Enhanced Services Billing and Information Management Services Agreement
(the "Agreement") is made this 3 day of December 1999 (the "Effective Date") by
--- --------- -
Enhanced Services Billing, Inc. ("ESBI" or "Company"), a Delaware corporation,
whose principal address and telephone number are 7411 John Smith Drive, Suite
200, San Antonio, Texas 78229-4898, (210) 949-7000, and Telco Billing, Inc.
("Customer"), a Nevada corporation, whose principal address and telephone number
are 9420 E. Doubletree C-102, Scottsdale, Arizona 85258, (800) 300-3209.
Customer and Company, and their affiliates, are sometimes referred to as the
"parties."
RECITALS
WHEREAS, Customer is engaged in the business of providing certain communications
products and services that it desires to bill and collect through Local Exchange
Carriers; and
WHEREAS, Company has entered into billing and collection agreements with certain
LECs ("LEC Agreements") that allow Company to provide billing and information
management services for Qualifying EMI Billing Records ("Qualifying Records") on
behalf of Company's customers; and
WHEREAS, Customer desires to obtain such billing and information management
services from Company on the terms and conditions contained herein:
NOW, THEREFORE, the parties, intending to be legally bound, hereby agree as
follows:
SECTION 1. DEFINITIONS.
-------------------------
As used in this Agreement, certain terms have the meanings set forth in Exhibit
"A," unless the context requires otherwise.
SECTION 2. SCOPE OF AGREEMENT.
-------------------------------------
Customer will purchase from Company and Company will provide, subject to the
terms and conditions set forth herein, such terms and conditions being subject
to the limitations of the LEC Agreements and Coalition Guidelines, the services
described in Section 3. As Company enters into additional LEC Agreements,
Company will provide services to Customer in such areas on the same terms and
conditions as contained herein.
SECTION 3. BILLING SERVICES.
--------------------------------
(a) Submission of EMI Billing Records("Records"): Customer will
------------------------------------ ----------
submit its Records to Company for purchase and submission to the LEG. Customer
will submit Records at least once per week that contain adequate information for
Company and LEC to process such Records. In the event Customer cannot satisfy
the minimum transmission volumes described in Section 4.(g), Customer will
submit its Records once per month. All costs related to these submissions will
be borne by Customer.
(b) Company's Edits and Screens:
------------------------------
Following receipt of Customer's Records, Company will process Customer's Records
through Company's computer edits and screens. Those Records that pass Company's
edits and screens will be "Qualifying Records." Those Records that do not pass
Company's edits and screens will be "Company Rejected Records." Company Rejected
Records will be returned to Customer, and Company will have no other obligation
with respect to Company Rejected Records.
(c) Submission to LECs: After passing Company's edits and screens,
--------------------
Company will transmit Customer's Qualifying Records to the appropriate LECs for
billing and collection under the LEC Agreements.
(d) Billing and Collection by LECs: Customer acknowledges that the LEG
-------------------------------
will be solely responsible for the billing and collection of the revenue for
Customer's Qualifying Records from End Users residing within the applicable
billing area of such LEC, subject to the terms, conditions and operating
procedures contained in each LEC Agreement, the terms of which are incorporated
herein. Company will have no billing or collection obligations other than
transmission of the Qualifying Records to the LECs. Customer expressly
acknowledges and agrees that Company is not a debt collector as that term is
used or defined in the Federal Debt Collection Practices Act or the Texas Debt
Collection Act.
(e) Printing of Customer's Name on End User's LEC Telephone Bill:
------------------------------------------------------------------
Wherever possible, Company will use reasonable efforts to cause each LEC to
print Customer's name, along with the associated Qualifying Records, on each End
User's telephone bill billed on behalf of Customer. Customer acknowledges that
where the LECs do not provide this service,
COMPANY CONFIDENTIAL AND PROPRIETARY
1
<PAGE>
Customer's name will not appear on the End User's telephone bill. In the event
that an End User requests Customer's address or telephone number, Company will
provide such information to requesting parties.
(f) End User Inquiry, Investigation and Credit ("Customer Service"):
------------------------------------------------------------------
Company's Customer Service procedures are set forth in Exhibit "F," as they may
be changed from time to time. Customer agrees that Company has sole and complete
discretion to address any inquiries addressed to or through it by End Users,
LEGs or regulatory or law enforcement bodies, and Customer agrees to be bound by
Company's decisions and to pay any credits, fees and penalties that may result
from Customer's Records.
(g) Reporting: Company will provide electronic information and reports
---------
to Customer via ARRS. The Company may replace or discontinue these services on
thirty (30) days' notice to Customer. At this time, Company is not providing
written reports to Customer.
SECTION 4. CUSTOMER'S OBLIGATIONS.
------------------------------------
(a) Cooperation by Customer: Customer will cooperate with Company to
-------------------------
the fullest extent possible to facilitate the provisioning of services described
in Section 3 herein. Such cooperation will include, but not be limited to, the
following:
(i) Supplying Company with Customer's identification codes, any
and all certifications of regulatory authority necessary for Customer
to offer its services, and any other information and documents
reasonably necessary or helpful to Company;
(ii) Supplying Company with all technical information and
assistance with testing that may be reasonably necessary or helpful to
Company in providing its services, as determined by Company;
(iii) Supplying Company with requested information on End Users,
including LOAs and marketing information within two (2) Business Days
of Company's request; and
(iv) Supplying Company with all information requested by Company
as set forth in Exhibit "G."
(b) Applicable Approvals and Compliance with Law: Customer will
-----------------------------------------------
obtain and keep current all applicable federal, state and local licenses,
Tariffs, certifications and approvals and will fully comply with, and has full
responsibility to comply with, all other applicable federal, state and local
rules, regulations, laws and Tariffs. No provision in this Agreement shall cause
or be construed to cause either party to violate any legal or regulatory
requirement. Customer certifies that all Records submitted by Customer will
comply with the service provider's certifications and Tariffs in the relevant
jurisdictions for that Record and with all applicable state and federal rules,
regulations, laws and Coalition Guidelines. Customer agrees that Company will
assume no responsibility for such compliance whatsoever and that Company may
discontinue billing without notice for any product that it has reason to believe
does not comply with applicable rules, regulations and laws or the Coalition
Guidelines. Customer acknowledges that certain LEC billing systems contain edits
and screens that "block" Customer's Records from being billed to End Users until
Company can demonstrate to such LECs that Customer has proper authority for
providing its services to the End User. Customer further acknowledges that the
LEG controls the timeframe for such notification to become effective at the
LEGs. Therefore, Company will not be responsible for processing Customer's
Records for services provided prior to the LECs removing their regulatory edits
and screens from their billing systems.
(c) Authorized Charges: Customer will submit Records to Company only
-------------------
for services that have been properly authorized by End Users, as described in
Exhibit "G." Customer agrees to cancel services for End Users that request
cancellation. Customer certifies that its Records are supported by a valid LOA.
Customer agrees to timely provide Company with a valid 39 record (containing
authorization information) for each Record submitted.
(d) Validation: Customer will validate all collect, third party
----------
and LEC calling card billed Records using the LECs' LIDBs (Line Information Data
Bases) or other alternative validation method that complies with applicable
rules, regulations and laws and is acceptable to the LECs and Company. If
Company determines that Customer has not properly validated such Records, then
Company will have the right, but not the duty, to validate such calls at
Company's then applicable validation fee or to reject such Records.
(e) Completed Calls: Customer warrants that it is 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 Company only
those Records for calls that represent valid, completed calls as defined in
Exhibit
(f) Aged Records: Customer will not submit Records to Company that
------------
are more than one hundred twenty (120) days old or that exceed the "age of toll"
acceptable by the LECs, whichever is less.
(g) Minimum Transmission Volumes:
------------------------------
Customer will not submit to Company less than Five Hundred Dollars ($500) in
Company Processing Fees per Library Code in any single transmission.
COMPANY CONFIDENTIAL AND PROPRIETARY
2
<PAGE>
(h) Review of Reporting: Customer will be responsible for reviewing all
-------------------
reports and notices generated by ARRS, ARRS user manuals and other information
posted to any bulletin board or internet service maintained by Company,
transmitted by e-mail, mail or otherwise by Company, and for notifying Company
of any inaccuracies within ninety-one (91) days of the date such information is
made available to Customer. Failure to notify Company of any inaccuracies within
such time period will constitute acceptance thereof. Such reporting will be made
once under this Agreement. If Customer requests additional copies of electronic
reports, or requests that electronic reports be produced in printed form,
Customer agrees to pay Company's then prevailing rates for such additional
reports. Additional charges will be incurred if information has to be retrieved
from archives. Such fees also will apply to material compelled to be produced in
response to first-party or third-party requests, including those of regulatory
or law enforcement bodies or judicial rules, orders or subpoenas. Company
provides reports, notices, user manuals and individual training to assist
Customer. New customers should attend training on Company's systems and
reporting methods at Company's headquarters within one hundred eighty (180) days
of the Effective Date.
(i) Objectionable Content: Customer agrees, as a condition of
----------------------
Company's performance under this Agreement, that Customer will not submit
Records for processing under this Agreement that contain or refer to matters
that are harmful, damaging or against public policy, including, but not limited
to, products or services that:
(i) Explicitly or implicitly refer to sexual conduct;
(ii) profane language;
(iii) Allude to bigotry, racism, sexism or other forms of
discrimination;
(iv) Are of a violent nature;
(v) Through advertising, content or delivery, are deceptive,
or may take unfair advantage of minors, the elderly or the general
public;
(vi) Are publicly accessible, multi-party connections commonly
known as or "chat" services;
(vii) Are offered by Customer or its agents using box,
sweepstakes or contest-type entry forms;
(viii) Are offered by Customer or negative option sales offers;
its agents using
(ix) Are 800 pay-per-call services;
(x) Are collect callback services;
(xi) Are phantom billing (i.e., charging for calls never made
or services never provided);
(xii) Have not been properly authorized by End Users, or that
Company determines, in its sole discretion, have had excessive
Customer Service or adjustments associated with such services;
(xiii) Are prohibited by federal, state or local rules,
regulations and laws, Tariffs or the Coalition Guidelines;
(xiv) Individual LECs exclude from the types of services or
products for which their policies permit them to bill and collect or
that Company believes, in its sole discretion, will jeopardize its LEG
Agreements; or
(xv) Company determines, in its sole discretion, to be
deceptive or anti-consumer.
Notwithstanding any other provision of this section, the parties acknowledge
that Company has no reasonable means of determining the validity of or
authorization for Records sent to Company for processing under this Agreement,
and that Company therefore strictly relies upon Customer to forward only valid
and authorized Records that can be, if necessary, substantiated in a court of
law or to a regulatory body. Customer warrants and represents, when submitting
Records to Company, that such Records are true and correct and accurately
reflect proper charges legally owed by Customer's End User. Company may, at any
time during the Tern, cease providing services under this Agreement immediately
upon notice to Customer as a result of a violation of this paragraph.
(j) No Other Billing Arrangement:
-------------------------------
Customer warrants that the Records submitted and to be submitted by Customer to
Company pursuant to this Agreement are owned by Customer and not subject to any
Claims, are not and will not be subject to any other billing and collection
agreement, have not been billed previously by any method and will not be billed
by Customer or another party following their submission by Customer to Company.
Notwithstanding the above, Customer may bill Company Rejected Records or LEG
Rejected Records after the deficiency has been corrected. Customer may
not double bill or initiate secondary collection efforts for any records that
have billed through the LECs. Customer has made a reasonable investigation and
is not aware of any impediment to its entering into this Agreement.
(k) LEC Billing Compliance: Customer will conduct business in
------------------------
accordance with all policies and guidelines of those LECs responsible for
billing and collecting Customer's Qualifying Records.
COMPANY CONFIDENTIAL AND PROPRIETARY
3
<PAGE>
(1) Company Anti-Cramming Consumer Protection Standards of Practice:
------------------------------------------------------------------
Customer will comply with the Company Anti-Cramming Consumer Protection
Standards of Practice set forth in Exhibit "G" of this Agreement and the
Coalition Guidelines, as they may be revised from time to time.
(m) Payment of Amounts Due Company: Customer will pay to Company any
---------------------------------
amounts determined by Company to be due Company by Customer under this Agreement
or any other agreement between the parties within ten (10) days of the date of
invoice by Company. Time is of the essence for such payments. Company may offset
any amounts Customer or its affiliates owe Company or its affiliates under this
Agreement or any other agreement between the parties without notice. After a
period of thirty (30) days from such invoice date, interest on unpaid balances
will accrue at the lower of eighteen percent (18%) per annum or the highest
legal rate allowed by law. Customer further agrees that timely payment of all
amounts due Company will be its sole responsibility.
(n) Attorneys' Fees, Costs and Expenses: Company also will have the
---------------------------------------
right to collect from Customer all attorneys' fees, costs and expenses
(including in-house legal services) incurred in collection of any amounts owed
by Customer.
SECTION 5. TERM OF AGREEMENT.
-------------------------------
The initial term of this Agreement will backing on the Effective Date and will
("Initial Term") unless terminated in accordance with the terms of this
Agreement. Following the Initial Term, this Agreement will renew automatically
for successive periods of one (1) year ("Renewal Term") unless terminated by
written notice of non-renewal from either party delivered at least ninety-one
(91) days prior to the scheduled expiration date. The Initial Term and Renewal
Terms will constitute the "Term."
SECTION 6. LEC RELATED PAYMENTS, FEES AND ASSESSMENTS.
----------------------------------------------- -----------
(a) Payment by LECs: Each LEC makes payments to Company for
-----------------
Qualifying Records purchased from Company in accordance with the LEC Agreement.
Company will not be responsible for payment to Customer of any funds collected
by a LEC but not distributed to Company.
(b) Amount Distributed by LECs: Customer acknowledges that each
-----------------------------
LEG distributes to Company the gross amount of Qualifying Records purchased by
the LEC and then the LEC or Company deducts the then-applicable Assessments.
(c) Assessments: Customer acknowledges that Company is and will be
-----------
bound by the terms of the LEC Agreements with respect to each LEG's right to
deduct or to reduce its collectible funds for (i) the amount of LEG-related fees
and costs associated with processing Customer's Qualifying Records, a recent
list of which has either been disclosed or made available to Customer (subject
to change without notice to Customer), (ii) any Short-term Dilution, (iii) any
Post-billing Adjustments or Credits, (iv) any reserve for anticipated Bad Debt
("Bad Debt Reserve"), (v) any periodic reconciliation between the Bad Debt
Reserve and the actual Bad Debt realized by the LECs ("Bad Debt True-up"), and
(vi) any other related Assessments. In addition, Customer will) be responsible
for any data transmission, data transmission correction, or distribution fees
incurred in the delivery or receipt of Customer's Records and for any other
charges related to billing and collecting Customer's Records. Customer further
agrees that payment of all amounts described in this Section 6.(c) will be its
sole responsibility and that Company may withhold such amounts from payments to
Customer. Should such amounts exceed the amounts due Customer, such amounts will
be due and payable by Customer to Company in accordance with Section 4.(m).
(d) Bad Debt Reserve: Company will hold back or cause the LECs to
-----------------
hold back an amount estimated to be sufficient to set off any Bad Debt that may
be determined after the date Company makes its payment to Customer for
Customer's Qualifying Records billed and collected by the LEG. Initially, any
Bad Debt Reserve withheld by the LEC generally will be passed through to
Customer on the same percentage or the same amount as Company was assessed by
the individual LECs. However, once sufficient data becomes available to Company
to enable Company to determine a specific Bad Debt history attributable to
Customer, the Bad Debt Reserve may be increased based on Customer's historical
Bad Debt Amounts, Customer Service, adjustment levels and other factors. A
schedule setting forth the past twelve months' average Bad Debt Reserve by each
LEG will either be disclosed or made available to Customer.
(e) Monthly LEC Bad Debt True-up: Usually between six and eighteen
--------------------------------
(6-18) months after Company submits Customer's Qualifying Records to the LECs
for billing and collection, the LECs and Company will determine the actual
amount of Bad Debt and true up the difference between this amount and the Bad
Debt Holdback Reserve. Company will provide Customer monthly reports on Bad Debt
True-ups for these differences. If the amount of these true-ups is positive,
Company will remit such amount to Customer on a regularly scheduled payment date
after Company receives the true-up amount from the LECs. If the amount of these
true-ups is negative, Company will collect such amounts from Customer in
accordance with Section 4.(m).
COMPANY CONFIDENTIAL AND PROPRIETARY
4
<PAGE>
(f) Customer Service: Customer understands that each LEC has its
-----------------
own policies regarding assessment of credits, fees and penalties for Customer
Service, in addition to those covered by rules, regulations, laws and the
Coalition Guidelines, and Customer agrees to be bound by such policies and to
pay such credits, fees and penalties in accordance with Section 4.(m).
(g) Allocation Method: Customer acknowledges that Company is unable to
-----------------
fully document or match all Assessments to specific customers and that Company
will use an allocation method for such Assessments to determine amounts due
under this Agreement when Customer-specific information is not matched or
available from the LECs.
SECTION 7. COMPANY RELATED ASSESSMENTS.
-------------------------------------------------
(a) Assessments. In addition to the LEC Assessments set forth in
-----------
Section 6, Customer agrees to pay to Company, and Company may deduct from any
amounts received by the Company from the LECs on behalf of Customer, the
following Company
Assessments:
(i) A billing and information management service fee ("Company
Processing Fee") for each Qualifying Record submitted to the LECs for
billing and collection by Company, as specified in Exhibit "C." Records
rejected by the LECs, through no fault of Company, and Records that are
resubmitted to the LECs, will be charged the Company Processing Fee;
(ii) A Basic Customer Service Fee as specified in Exhibit "C";
(iii) An additional Customer Service fee for each Customer Service
that exceeds the allowed percentage, as described in Exhibit "C," of the
number of Qualifying Records for each Library Code processed by Company on
behalf of Customer each month;
(iv) Any credit amounts refunded to End Users by Company's Customer
Service, along with any LEC charges associated with making such refunds to
End Users;
(v) A charge, as specified in Exhibit "C," for any submission of
Records that contains less than the minimum volume requirements of Company
for each Library Code;
(vi) An initial set-up fee, as described in Exhibit "C," for
Company's ARRS;
(vii) An Additional Customer Identification Code (subCIC) Fee, as
described in Exhibit "C";
(viii) Any credits, fees and penalties that may result from Company
or LECs addressing inquiries from various regulatory or law enforcement
bodies;
(ix) Any Customer Service functions (other than Customer Service
specifically covered by Exhibit "F") or special programming tasks will be
handled on a time and cost basis at the then current rate;
(b) Reserves and True-ups for Short-term Dilution. Company will reserve
---------------------------------------------
an amount for Short-term Dilution based upon Customer's prior history pertaining
to Short-term Dilution and the regulatory environment. Company may recalculate
Customer's historical experience quarterly from its prior three months' results.
Until such history can be determined for Customer, Company will reserve one and
one-half percent (1.5%) from the amount due to Customer. Company may adjust the
reserve and Company then will return excess amounts to Customer or withhold
additional amounts as may be required to satisfy these liabilities from the
amounts due to Customer.
(c) Collateral. As collateral for all obligations now existing or
-----------
hereafter arising from Customer to Company, Customer hereby grants to Company a
security interest in all the following property of Customer, whether now owned
or hereafter acquired or created, and all proceeds and products thereof:
(i) All amounts paid, and all amounts owing, by each LEC to
Company on accounts of Customer's Qualifying Records;
(ii) All accounts owing from an End User to Customer arising
from services which give rise to Customer's Qualifying Records;
(iii) All rights of and proceeds due Customer relating to all
billing and collection, record processing, operator services and
related communications services agreements;
(iv) All amounts deposited by Customer with Company pursuant
to paragraph 13.(b) hereof;
(v) All amounts owing and all amounts to be owing from
Company to Customer; and
(vi) All of Customer's accounts with End Users, existing now
or arising hereafter.
SECTION 8. PAYMENTS TO CUSTOMER.
-----------------------------------
COMPANY CONFIDENTIAL AND PROPRIETARY
5
<PAGE>
(a) Determination of Customer: Company will determine Amount Due
--------------------------
the estimated amount collected by each LEC for Customer's Qualifying Records and
deduct all assigned and allocated Assessments and Taxes of the LECs and Company.
If the amount due Customer is not sufficient to satisfy these Assessments, then
Customer will pay the difference to Company in accordance with Section 4.(m).
(b) Payment Schedules: Company will advance to Customer the
------------------
estimated amount determined under paragraph 8.(a) above under the following
schedule: Fifty percent (50%) of the amount determined on the first Tuesday
after the sixtieth (60~') day from the date Company receives Customer's Records;
fifty percent (50%) of the remaining balance of the amount determined on the
first Tuesday after the ninetieth (90~") day from the date Company receives
Customer's Records; and the remaining balance of the amounts so determined on
the first Tuesday after the one hundred twentieth (l20~") day from the date
Company receives Customer's Records; provided, however, that if Customer has
ceased doing business for three (3) Business Days; is the subject of a
bankruptcy proceeding; has a receiver, trustee or custodian appointed over
substantially all of Customer's assets; fails to make any deposit required by
paragraph 13.(b); undergoes a change of control or executive management; submits
Records, the dollar value of which does not exceed estimated Assessments; or if
Company has reasonable grounds to believe that Assessments may exceed any amount
owing or to become owing from Company to Customer, Company may withhold payments
to Customer or Company may make payments to Customer in accordance with Section
13.(b). If the amount owing to Customer is determined to be insufficient to
satisfy these Assessments, then Customer will pay the difference to Company in
accordance with Section 4.(m).
(c) Method of Payment: Company will make all advance payments and
-------------------
final payments due Customer using ACH wire transfer on the Payment Date as
described in Section 8.(b) herein.
(d) Accounting for Funds: Funds received from the LECs for
----------------------
Customer's Qualifying Records, less applicable Assessments, will be deposited
and held by Company in a common account until such time as the amount determined
to be due Customer is paid. Company will maintain an accounting via the ARRS of
the balance owing or to be owing by Company to Customer of such amounts
deposited and. held by Company.
SECTION 9. TAXES.
-----------------
(a) Calculation of Communications Taxes: Customer acknowledges
--------------------------------------
that it is responsible for compliance with all taxing requirements. Customer
will promptly notify Company of any tax or any other tax-like surcharges and the
associated rates that apply to Customer's Records in any specific jurisdiction
and indicate such on each Record submitted to Company. Either Company or the
LEGs will use reasonable efforts to assist Customer in calculating the following
taxes that may be applicable to MTS calls: federal excise tax, any state and
local sales taxes, gross receipts tax or tax-like charges, foreign intrastate
tax, any state or federal universal service taxes or assessments, and any other
standard toll communications sales or use taxes (" Taxes"). Any error by Company
or the LECs in calculating the applicable Taxes will not relieve Customer or End
Users of their responsibility to pay all applicable Taxes.
(b) Billing and Collection of Taxes: Company will use reasonable
-----------------------------------
efforts to cause the LECs to bill End Users for all Taxes when Customer provides
taxing information. Customer acknowledges that Company is merely arranging for
the billing and collection of Taxes, and in no event will Company 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 to the extent permitted by law.
(c) Tax Exempt Status for End Users: Company will have the authority,
---------------------------------
on behalf of Customer, to authorize the LECs to calculate Taxes and establish
the tax exempt status of End Users in the same manner as the LECs calculate
Taxes and establish such status for their End Users. If Customer's Records are
exempt from Taxes or tax-like charges, Customer will so indicate on each Record
submitted to Company.
(d) Filing and Payment of Taxes: Based upon information calculated by
-----------------------------
Company or received from the LECs with respect to Taxes assessed, billed and
collected by the LECs, Company will assist Customer in preparing and will file,
on behalf of Customer where permitted, with the applicable taxing authorities
returns covering Taxes, and will, on behalf of Customer, but only to the extent
of amounts otherwise owing from Company to Customer, advance and remit to such
taxing authorities all Taxes owed thereto. Customer acknowledges that Company is
required by some states to provide an affidavit, executed by Customer, that
allows Company to file and remit the applicable taxes on Customer's behalf;
therefore, Customer will return the "Authorization to Act as Customer's Agent
for Certain Tax Matters" form to Company upon Company's Request. Upon written
request, Company will provide to Customer copies of any and all tax returns and
other applicable information relating to the payment of Taxes by Company within
thirty (30) days after being filed.
(e) Hold Harmless: Customer will indemnify and hold Company and its
--------------
employees, agents and representatives harmless from and against any Claim
COMPANY CONFIDENTIAL AND PROPRIETARY
6
<PAGE>
EVEN IF CAUSED, IN WHOLE OR IN PART, BY COMPANY'S OWN NEGLIGENCE, BREACH OF
--------------------------------------------------------------------------------
CONTRACT OR OTHER MISCONDUCT (including, without limitation, reasonable
-------------------------------
attorneys' fees and expenses and court costs) relating to or arising out of any
Taxes, penalties, interest, additions to tax, computations of tax, surcharges or
other amounts that Company may be subject to or incur on behalf of Customer.
Company agrees to assist Customer with tax audits related to this Section, and
Customer shall give Company the option to participate in such audits. Even if
Company or its representatives assist Customer with such audits, Company shall
have no liability to Customer relating to any tax assistance provided to
Customer under this section.
(f) Billed Taxes: Customer will be responsible for the payment of
-------------
any additional Taxes or tax-like charges, excluding federal and state income
Taxes, assessed against Company based on the revenues collected by Company for
Customer's Qualifying Records ("Billed Taxes").
(g) Calculation of Special Taxes:
-------------------------------
Customer will be responsible for calculating and adding to the charge amount in
all Records, prior to submission, those Taxes specifically applicable to
Customer's Enhanced Telecommunications Services ("ETS") other than the standard
communications taxes described in Section 9.(a) herein ("Special ETS Taxes").
(h) Filing and Payment of Special ETS
--------------------------------------
Taxes: Customer will prepare, file and pay in a timely manner all Special ETS
Taxes due and owing to the applicable taxing authorities. At Company's written
request, Customer will provide Company with copies of any and all tax returns
and other applicable information relating to the calculation, application and
payment of Special ETS Taxes.
SECTION 10. PROTECTION OF CONFIDENTIAL INFORMATION.
--------------------------------------------------------
As used herein, "Confidential Information" will mean (a) proprietary
information, (b) information marked or designated by either party, in good
faith, as confidential,(c) information otherwise disclosed in a manner
consistent with its confidential nature,(d) the terms and conditions of this
Agreement and(e) information of one party submitted to a second 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. The parties acknowledge that, as a result of the provision of
services pursuant to this Agreement, Confidential Information that may be
confidential or 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 will restrict disclosure of such
information to its own employees, agents or independent contractors to whom
disclosure is reasonably required. Such employees, agents or independent
contractors will use reasonable care, but not less care than they use with
respect to their own information of like character, to prevent disclosure of any
Confidential Information. Nothing contained in this Agreement will be considered
as granting or conferring rights by license or otherwise in any Confidential
Information disclosed. Notwithstanding the foregoing, Company may, in its sole
discretion, without notice or written consent of Customer, disclose information,
including Confidential Information, to any state or federal regulatory or law
enforcement agency requesting information.
SECTION 11. EXCUSED PERFORMANCE.
-----------------------------------
Except for payment of obligations or compliance with applicable rules,
regulations and laws, Customer will be excused from performance, and will have
no liability for failure to perform, for any period and to the extent that it is
prevented, hindered or delayed from performing any services or other obligations
under this Agreement, in whole or in part, as a result of acts, omissions or
events beyond the reasonable control of Customer. Company will be excused from
performance, and will have no liability for failure to perform, for any period
and to the extent that it is prevented, hindered or delayed from performing any
services or other obligations under this Agreement, in whole or in part, as a
result of acts, omissions or events beyond the reasonable control of Company,
including by way of illustration and not limitation, acts or omissions of
Customer or the LECs, third party nonperformance, failure or malfunction of
computer or communications hardware, equipment or software, breach or other
nonperformance by Company's vendors and suppliers, strikes or labor disputes,
riots, war, fire, acts of God or governmental laws and regulations.
SECTION 12. LIMITATION OF LIABILITY AND INDEMNITY.
-------------------------------------------------------
(a) Company makes no warranties or representations regarding its services
except as specifically stated in this Section l2.(a). Company will use due care
in processing all work submitted to it by Customer and agrees that it will, at
its expense, correct any errors that are solely due to errors by Company's
employees or agents ("Error Correction"). Error Correction will be limited to
reprocessing Customer's Records. Company will not be responsible in any manner
for failures of, or errors in, proprietary systems and programs, nor will
Company be liable for errors or failures of Customer's software or operational
systems.
COMPANY CONFIDENTIAL AND PROPRIETARY
7
<PAGE>
THIS WARRANTY IS EXCLUSIVE AND IS IN LIEU OF ALL OTHER WARRANTIES. AND CUSTOMER
--------------------------------------------------------------------------------
HEREBY WAIVES ALL OTHER EXPRESSED. IMPLIED OR STATUTORY, INCLUDING, BUT NOT
--------------------------------------------------------------------------------
LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
--------------------------------------------------------------------------------
Should there be any failure in performance or errors or omissions by Company
with respect to the Qualifying Records being processed and being submitted to
the LECs for billing and collection, Company's liability will be limited to
using reasonable efforts to correct such failure. In no event will Company be
liable to Customer or ally third parties (including Customer's End Users) for
any Claim, even if Company has been advised of the possibility of such Claim.
(b) Due to the nature of the services being performed by Company,
Customer agrees that in no event will Company be liable for any Claim caused by
Company's performance or failure to perform hereunder that is not reported by
Customer in writing to Company within ninety-one (91) days of such performance
or failure to perform.
(c) Customer will indemnify and save harmless Company from and against
any Claim asserted against Company by third parties arising from or related to
(customer's provision of the services provided under this Agreement. Should
Customer act as an agent for a third party and forward billing to Company or
should Customer purchase billing from a third party and forward such billing to
Company, Customer shall remain solely responsible to and for such third parties.
Customer agrees to protect, indemnify and hold harmless Company for any and all
claims by third parties regarding such third parties' billing forwarded to
Company by Customer. Customer also will indemnify and save harmless Company
from and against any Claim asserted against Company by third parties and any
assessments or fined levied against Company by any state or federal agency or
law enforcement officer, plus any attorneys' fees and expenses (including
in-house legal services), arising from or related to any charges submitted by
Customer, including without limitation, for unauthorized charges or false or
inaccurate information provided by Customer to Company, or any failure of
Customer to comply with legal or regulatory requirements, the requirements set
forth in Exhibit "G" of this Agreement or tie Coalition Guidelines.
THIS INDEMNITY IS SPECIFICALLY INTENDED TO OPERATE AND BE APPLICABLE EVEN IF IT
--------------------------------------------------------------------------------
IS ALLEGED OR PROVED THAT ALL OR SOME OF THE DAMAGES BEING SOUGHT WERE CAUSED AS
--------------------------------------------------------------------------------
A WHOLE OR IN PART BY ANY ACT, OMISSION, NEGLIGENCE, GROSS NEGLIGENCE, BREACH OF
--------------------------------------------------------------------------------
CONTRACT, INTENTIONAL CONDUCT, VIOLATION 0F STATUTE OR COMMON LAW, BREACH OF
--------------------------------------------------------------------------------
WARRANTY, PRODUCT DEFECT, STRICT LIABILITY OR ANY OTHER CONDUCT WHATSOEVER OF
--------------------------------------------------------------------------------
THE COMPANY.
------------
(d) Notwithstanding anything to the contrary in this Agreement, the
liability of Company 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
will, in the aggregate, not exceed one (1)month's average of Company's
Processing Fees charged to Customer over the twelve (12) months preceding the
date on which the damage or injury is alleged to have occurred; provided,
however, that 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. WITHOUT IN ANY WAY LIMITING THE APPLICATION OF
----------------------------------------------
THIS SECTION. THE RIGHT TO RECOVER DAMAGES UNDER THIS PARAGRAPH CONSTITUTES
--------------------------------------------------------------------------------
CUSTOMER'S EXCLUSIVE ALTERNATIVE REMEDY IN THE EVENT THAT THE ERROR CORRECTION
--------------------------------------------------------------------------------
DESCRIBED ABOVE OR ANY OTHER CONTRACTUAL REMEDY FAILS OF ITS ESSENTIAL PURPOSE.
--------------------------------------------------------------------------------
(e) Under no circumstance will Company be liable to Customer for
special, incidental, indirect, consequential or punitive, exemplary or
additional damages, including, but not limited to, any lost profits or revenues.
(f) The limitations on liability set forth herein shall not apply to
personal injury, bodily injury or death or loss of or damage to tangible
property.
(g) Waiver of Consumer Rights:
-----------------------------
Customer waives its rights under the Texas Deceptive Trade Practices - Consumer
Protection Act, Section 17.41 et seq., Business & Commerce Code, a law that
gives consumers special rights and protections. After consultation with an
attorney of its own selection, Customer voluntarily consents to this waiver.
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, its obligations under this Agreement.
COMPANY CONFIDENTIAL AND PROPRIETARY
8
<PAGE>
(b) Deposit for Charges: Customer acknowledges that certain
---------------------
Assessments and any other related charges are not determined by the LECs or
Company for a period of up to eighteen (18) months after the final processing of
Customer's Records. Customer further acknowledges that payment of these amounts
to Company will be its sole responsibility. At the expiration or termination of
this Agreement for any reason, Customer will deposit with Company an amount
equal to two and one-half percent (2.5%) of the amount of Customer's gross
billings for the prior twelve (12) month period, or such other amount necessary
to satisfy such Assessments as determined by Company, in its sole discretion,
based on Customer's prior history and the regulatory environment. Such deposited
amount will be used by Company to pay Assessments. Each quarter, Company will
re-examine the amount of funds deposited and make such adjustments as Company
estimates may be necessary to satisfy the aforementioned assessments. Company
will provide Customer with reports reflecting Assessments attributable or
allocated to Customer on the same and consistent method as Company determines
such Assessments for all of its customers. Eighteen (18) months after the Term,
Company 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 Company, including, without limitation, any
and all Assessments associated with billing and collecting its Records. In the
event such Assessments exceed the amount of the deposit described in Section
13.(b), Customer will remit to Company such additional amounts as are required
to satisfy Customer's obligations under this Agreement in accordance with
Section 4.(m).
(d) Savings Clause: Except as otherwise provided herein, expiration or
---------------
termination of this Agreement will terminate all further rights and obligations
of the parties hereunder, provided that:
(i) Neither party will 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, the other party will be entitled
to pursue any and all tights and remedies it has to redress such default or
breach in law or equity; and
(iii) The provisions of this Agreement and each party's obligations
hereunder which by their nature or context are required or intended to
survive, including but not limited to Sections 4, 6-10, and 12-29 hereof,
will survive and remain in full force and effect after the expiration or
termination of this Agreement.
(e) Early Termination of Extended Term Agreement: If Customer elects a
--------------------------------------------
multi-year Initial Term and Customer terminates or breaches this Agreement
before the expiration of the full Initial Term, Customer will pay Company for
all Records processed during the Term, at the one-year Company Processing Fee
rates set forth in Exhibit "C," plus ten percent (10%), in accordance with
Section 4.(m).
SECTION 14. DEFAULT AND REMEDIES.
------------------------------------
(a) Default: Either party will 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 the
effective date of written notice;
(ii) Breaches any other covenant or undertaking contained in this
Agreement and fails to remedy such breach within thirty (30) -days after
written notice thereof -from the non-defaulting party, unless this
Agreement specifically provides otherwise;
(iii) Is in default of any of the provisions of Addendum A or B and
such failure continues for five (5) Business Days after the effective date
of written notice;
(iv) Submits Records to Company for services that have not been
properly authorized by End Users;
(v) Submits Records to Company that Company believes, in is sole
discretion, generate excessive Customer Service;
(vi) Files, or there is filed against it, any voluntary or
involuntary proceeding under the Bankruptcy Code, insolvency laws or any
laws relating to relief of debtors, adjustment of indebtedness,
benefit of reorganizations, compositions or extensions, makes an assignment
for the creditors, dissolves, ceases to conduct business for three (3)
Business Days, declares that it is unable to pay its debts as they mature
or admits in writing its inability to pay its debts as they mature or 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;
(vii) Attempts to assign its rights and obligations under this
Agreement without the prior written consent of Company; or
(viii) Fails to comply with any of the obligations set forth in
Exhibit "0" to this Agreement
(b) Remedies: In the event of any default hereunder, and in addition to
--------
any other remedies it may have under this Agreement, the non-defaulting party
will have the following rights and remedies:
(i) To terminate or cancel this Agreement, subject to the
provisions of Section 13.(d), by giving written notice thereof to the
defaulting party;
COMPANY CONFIDENTIAL AND PROPRIETARY
9
<PAGE>
(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, costs and expenses (including in-house
legal services) incurred or that may be incurred in the collection of such
amounts;
(iii) Company may withhold, set off and retain, until all obligations
of Customer to Company have been satisfied in full, any and all amounts
that may otherwise be due and payable to Customer or any affiliates of
Customer under this Agreement or any other contract with Company and apply
Such amounts to any balance due or to become due from Customer to Company;
(iv) Company may suspend its performance of this Agreement
immediately upon notice to Customer if Customer is in breach or default of
this or any other agreement between the parties;
(v) All rights and remedies allowed by the applicable Uniform
Commercial Code except as limited by Section 12 above;
(vi) All other tights and remedies allowed by this Agreement and
under applicable law except as limited by Section 12 above; and
(vii) All tights and remedies will be cumulative and can be
exercised separately or concurrently.
SECTION 15. ASSIGNMENT.
------------------------
(a) Neither party will assign any right or obligation under this
Agreement without the other party's written consent. Any attempted assignment
will be void.
(b) Assignment to Affiliates:
---------------------------
Notwithstanding Section l5.(a), Company may assign this Agreement, in whole or
in part, to:
i) A parent corporation;
ii) Any company into which Company may merge or consolidate or that
acquires substantially all of its assets or stock; or
iii) A wholly owned affiliate or the parent corporation that is of a
financial standing equal to or greater than that of the assignor.
Any assignment under this subsection (b) shall not require the consent of
Customer, but Company shall provide written notice to the Customer within thirty
(30) days of such assignment.
(c) Generally: All tights, obligations, duties and interests of any
---------
party under this Agreement will inure to the benefit of and be binding on all
successors in interest and assigns of such party and will survive any
acquisition, merger, reorganization or other business combination to which it is
a party.
SECTION 16. NOTICES AND DEMANDS.
------------------------------------
Except as otherwise provided in this Agreement, all notices, demands and
requests given by any party to the other party will be in writing and be deemed
to have been duly given on the date: (i) delivered in person, and for which a
receipt for such delivery will be obtained; (ii) of the return receipt for those
sent postage prepaid in the United States mail via Certified Mail, Return
Receipt Requested, or three (3) Business Days after being mailed by regular
mail; (iii) received from a national overnight delivery service; (iv) sent by
facsimile transmission to the recipient's facsimile. machine, provided that the
receiving machine delivers confirmation to the sender and receipt is verified by
telephone, with an extra copy immediately following by first-class mail; or (v)
notice is posted and made available to Customer through electronic media as
described in Section 3.(g) or to Customer's designated e-mail address. Such
notice. shall constitute written notice. Customer assumes the duty to check such
media on a regular basis. The following addresses shall be used for the
respective forms of notice and maybe changed by giving notice.
If to Company:
Enhanced Services Billing, Inc.
Attention: President
7411 John Smith Drive, Suite 200
San Antonio, Texas 78229-4898
Telephone: (210) 949-7000
Fax: (210) 949-7100
With a copy to: General Counsel, by certified mail to the above address.
If to Customer:
Telco Billing, Inc.
Attention: William O'Neal, President
4840 E. Jasmine St. #105
Mesa, AZ 85205
Telephone: (480) 654-9646 ext. 234
Fax: (602) 860-0800
E-mail Address: bill.oneal@yp.net
COMPANY CONFIDENTIAL AND PROPRIETARY
10
<PAGE>
SECTION 17. NO THIRD-PARTY BENEFICIARIES.
-------------------------------------------
This Agreement will not provide any person or entity not a party to this
Agreement with any remedy, claim, liability, reimbursement, cause of action or
other tight.
SECTION 18. EMPLOYEES.
------------------------
Customer acknowledges that Company's success in its industry is largely
dependent on the performance of its personnel and that Company expends
substantial resources in connection with employment and training. Accordingly,
Customer will not hire or retain, either as an employee or contractor, any
person who was a Restricted Employee of Company at any time during the twelve
(12) month period preceding such hiring or retention without the advance written
consent of Company. "Restricted Employee" of Company is any. Employee or third
party contractor of Company that has signed a non-competition or restrictive
covenant, except a member of the clerical staff. This undertaking by both
parties will be deemed an essential element of this Agreement and will survive
its termination.
SECTION 19. RELATIONSHIP OF THE PARTIES.
---------------------------------------------
In furnishing services to Customer, Company is acting only as an independent
contractor. Except as expressly set forth in this Agreement, Company does not
undertake by this Agreement or otherwise to perform any obligation of Customer,
whether regulatory or contractual, or to assume any responsibility for
Customer's business or operations. This Agreement will not be deemed to create a
partnership, joint venture, agency or fiduciary relationship between the
parties.
SECTION 20. GOVERNING LAW AND VENUE.
-----------------------------------------
This Agreement will be governed and construed in accordance with the laws of the
State of Texas, without regard to the choice of law rules of Texas. Except for
the arbitration proceedings provided for herein, exclusive jurisdiction and
venue over any and all matters of dispute arising under or by virtue of this
Agreement or between the parties will rest in the state or federal courts
located in Bexar County, Texas.
SECTION 21. ENTIRE AGREEMENT.
--------------------------------
This Agreement, including all exhibits and attachments, each of which is
incorporated herein, constitutes the en(ire agreement between the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous representations, understandings or agreements, whether oral or
written, relating to the subject matter hereof.
SECTION 22 AMENDMENTS: WAIVERS.
----------------------------------
This Agreement (or any part thereof, including its incorporated exhibits) may be
modified or additional provisions may be added by written agreement signed by or
on behalf of the parties by an authorized representative, unless otherwise
provided herein. No modification, amendment or waiver of any provision of this
Agreement, including its incorporated exhibits, and no consent to any default
under this Agreement, will be effective unless the same will be in writing and
signed by or on behalf of the party against whom such modification, amendment,
waiver or consent is claimed.
SECTION 23. SEVERABILITY.
---------------------------
The illegality or unenforceability for any reason of any provision of this
Agreement, or any document or instrument required or referred to hereunder,
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any document or instrument required or
referred to hereunder.
SECTION 24. EXECUTION IN COUNTERPARTS.
------------------------------------------
This Agreement may be executed in any number of counterparts, each of which will
be deemed an original, but such counterparts will together constitute but one
and the same document. Facsimile copies of this Agreement are given the dignity
of original documents.
SECTION 25. HEADINGS.
-----------------------
The headings in this Agreement are for convenience only and will not be
construed to define or limit any of the terms herein or affect the meaning or
interpretation of this Agreement.
SECTION 26. DISPUTE RESOLUTION.
----------------------------------
This Section 26 governs all disputes, disagreements, claims or controversies
between Customer and Company, including, but not limited to, those arising out
of or related to this Agreement, tort claims and claims of violation of statutes
("Disputed Matters"). All Disputed Matters will be submitted to the following
dispute resolution process:
(a) Internal Escalation. First, the Disputed Matter will be referred
---------------------
jointly to senior executives of each of the parties. If such executives do not
agree upon a resolution within forty-five (45) Business Days after referral of
the matter to them, the complaining party will proceed to mediation as set forth
below.
(b) Mediation. The complaining party will, upon written notice and
---------
within forty-five (45) Business Days after the conclusion of the internal
escalation procedure, elect to have the Disputed Matter referred to non-binding
mediation before a single impartial mediator to be jointly agreed upon by the
panics. The mediation hearing will be attended by executives of both parties
possessing authority to resolve the Disputed Matter and will be conducted no
more than sixty (60) Business Days after a party serves a written notice of an
intention to mediate. Customer and Company will share equally all costs of such
mediation. If the Disputed Matter cannot be resolved at mediation, the
complaining party will proceed to Arbitration.
COMPANY CONFIDENTIAL AND PROPRIETARY
11
<PAGE>
(c) Arbitration. In the event that the Disputed Matter has not been
-----------
resolved through mediation, the complaining party will submit the Disputed
Matter to binding arbitration before the American Arbitration Association (the
"AAA") pursuant to its Commercial Arbitration Rules. The arbitrator(s) will have
the authority to render any award or remedy allowed by law. If the amount in
controversy exceeds $150,000.00, exclusive of attorneys' fees and expenses,
interest and costs, the Disputed Matter will be decided by a panel of three (3)
neutral arbitrators; otherwise, all disputes will be decided by a single neutral
arbitrator. Each arbitrator will be selected from the AAA's Panel of Commercial
Arbitrators, and the arbitration hearing will be conducted in San Antonio,
Texas. The cost of the arbitration proceeding will be shared equally by the
parties, but the prevailing party in any arbitration proceeding will be entitled
to recover its reasonable and necessary attorneys' fees, costs and expenses
(including in-house legal services) incurred in connection with the arbitration.
Provided that Customer continues to timely pa Company for services rendered
under this Agreement and there has been no default by Customer, Company may
continue to provide services during the presidency of any Disputed Matter.
SECTION 27. ATTORNEYS' FEES.
-------------------------------
In the event Company retains the services of an attorney (including in-house
legal services) to enforce this Agreement or any other obligation of Customer to
Company, or to collect or attempt to collect any Record or any accounts
receivable purchased by Company from Customer, Customer shall pay to Company
attorneys' fee (including in-house legal services), accountants' fees, expert
witness fees and other costs and expenses incurred by Company even though no
suit, action or proceeding is filed. If such a suit, action or proceeding is
filed, Customer also shall pay to Company attorneys' fees, accountants' fees,
expert witness fees and other costs and expenses incurred by Company in
enforcing, in any way, any and all of Company's rights, in the trial courts,
appellate courts and bankruptcy courts, including, but not limited to, the cost
of successfully defending any claims or causes of action asserted by Customer
against Company. Customer further agrees to pay to Company all of the foregoing
fees, expenses and attorneys' fees incurred by Company in any bankruptcy
proceeding and in appellate court relating thereto, including, without
limitation, such attorneys' fees and expenses incurred m regard to lifting or
modifying the automatic stay, determining adequate protection, using of cash
collateral, appointing a trustee, converting or dismissing the case, and
relating to any disclosure statement and plan of reorganization.
SECTION 28. INTELLECTUAL PROPERTY.
-------------------------------------
Except as otherwise expressly provided herein, nothing contained in this
Agreement shall be construed as conferring by implication, estoppel or otherwise
any license or right under any patent, trademark, trade name, copyright or other
intellectual property right of either party.
SECTION 29. YEAR 2000 COMPLIANCE.
-------------------------------------
Company filed a Year 2000 Certification Request with ITAA (Information
Technology Association of America) in January 1999. Company received
Certification from ITAA in March 1999. Company warrants that its service
obligations for billing and other aspects of its business relationship with
Customer will not be adversely affected by Year 2000 defects in Company's
internal systems or processes. However, should such disruption occur, Company
agrees to use its best efforts to promptly correct any such disruption.
Notwithstanding the above, Company will not be liable for any indirect or
consequential damages, including any lost profits, loss of business income or
revenues resulting from any Year 2000 defects in the Company's internal systems
or processes.
The above Year 2000 disclosure constitutes a "Year 2000 Readiness Disclosure" as
defined in the Year 2000 Information and Readiness Disclosure Act (the "Act"),
which was signed into law on October 19, 1998. The Act provides added protection
from liability for certain public and private statements concerning a company's
Year 2000 readiness.
COMPANY CONFIDENTIAL AND PROPRIETARY
12
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
Enhanced Services Billing, Inc.:
By: /s/ Jacquelene K. Mitchell
-----------------------------------
Jacquelene K. Mitchell
President and Chief Operating Officer
CUSTOMER:
Telco Billing, Inc.
By: /s/ William O'Neal
-----------------------------------
Name: William O'Neal
-------------------------------
Title: President
-------------------------------
Date: 11/11/99
-------------------------------
COMPANY CONFIDENTIAL AND PROPRIETARY
13
<PAGE>
EXHIBIT "A"
DEFINITIONS
--------------------------------------------------------------------------------
The following definitions are intended to supplement and define specific terms
used in the Agreement.
39 Record: A record populated by Customer identifying the bill name, address and
----------
any additional information on the End User who authorized Customer's products or
services.
ARRS: Company's Accounts Receivable Reconciliation System presently known as
-----
FASTRACK and Paradigm or BC WebTrack or any successor, as well as other
information posted or delivered through other electronic media.
Assessments: LEC or Company fees, charges, chargebacks, credits, reserves,
-----------
offsets, adjustments and allocations, including, but not limited to such charges
and chargebacks for Short-term Dilution, Bad Debt, LEC Processing Fees, Company
Processing Fees, Post-billing Adjustments or Credits, Bad Debt Reserve, true-ups
and Customer Service Fees. Assessments includes, without limitation, the
charges covered in Sections 6 and 7.
Bad Debt: A billed EMI Record that will not be collected from the party to whom
---------
it was billed.
BOC: Bell Operating Company.
---
Business Day: A day other than Saturday and Sunday or a legal holiday on which
-------------
commercial banks are open in the State of Texas.
Coalition Guidelines: The Anti-Cramming Consumer Protection Standards of
---------------------
Practice of the Coalition to Ensure Responsible Billing ("CERB"), the. terms of
which have either been disclosed or made available to Customer, the current and
any future terms of which are incorporated herein.
Claim: Any claim, dispute, demand, investigation, suit, loss, liability, damage,
-----
attorneys' fees and expenses, cot, correction or expense, whether ordinary,
special, consequential or otherwise, that may be asserted against an' party to
this Agreement. Claim includes all direct damages, including without limitation
contract damages an damages for injuries to persons or property, whether arising
from a breach of this Agreement, breach of warranty, negligence, strict
liability or any other tort wish respect to the services provided by Company
hereunder.
Customer Service: Basic End User inquiry, investigation and credit or
-----------------
adjustment services.
EMI Billing Record: Computer readable record containing the billing data for
--------------------
Records, in the industry standard EMI (exchange message interface) format set
forth in Exhibit "E," for which each LEC has the capability of processing
through its billing and collection systems. A Customer Service credit record
submitted to a LEC by Company shall be included within this definition.
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 purchases, acquires, subscribes
to or uses communications products or services.
FCC: The Federal Communications Commission.
---
FTC: The Federal Trade Commission.
---
Foreign Intrastate Taxes: Those applicable taxes for Operator Services and
--------------------------
Travel Card calls originating and terminating in the same state but billed in
another state.
Independent Telephone Companies: Those LECs that are not BOCs.
---------------------------------
Interexchange Carrier (IXC): A telephone company, other than a LEC, that can
-----------------------------
provide intraLATA (where applicable), interLATA, interstate and international
telecommunications service.
LEC Agreement: Company's agreement with an individual LEC as well as any
--------------
additional terms, conditions and operating guidelines and procedures agreed to
by the parties or imposed by the LEC, the current and future terms of which are
incorporated herein.
Library Code: An accounting identification code assigned exclusively to Customer
------------
by Company that Customer encodes within each Record submitted to Company and
that is used to account for Customer's funds and Assessments.
LOA: Letter of Authorization or other valid form of authorization from the End
---
User meeting the requirements of applicable rules, regulations and laws
COMPANY CONFIDENTIAL AND PROPRIETARY
14
<PAGE>
EXHIBIT "A"
DEFINITIONS
--------------------------------------------------------------------------------
and the specifications set forth in Exhibit "G" for non-1OXXX direct-dialed
products and services.
LEC or Local Exchange Carrier: Any incumbent (ILEC), competitive (CLEC) or
---------------------------------
alternate local exchange carrier providing local access telephone services with
whom Company has entered into a billing and collection agreement. A current list
of LECs is attached as Exhibit "Bi" Customer acknowledges that the list of LECs
may charge from time to time without notice. A LEC also ma' be referred to as a
Billing Telephone Company
Post-billing Adjustment or Credit: Credit or rate adjustment applied to an End
-----------------------------------
User's account by the LEC or by Company.
Qualifying EMI Billing Record: Enhanced Telecommunications Services that
-------------------------------
are not of objectionable content as set forth in the Customer's Obligations
section of this Agreement and that pass Company's edits and data transmission
corrections. The parties agree to amend or supplement these service descriptions
from time to time to conform to changes in business circumstances or regulatory
requirements. Company's agreement to bill new or additional ETS will be at its
election.
1. "900 Services" is any information service offered by Customer
-------------
to an End User using the 900-service access code (SAC) or dialing pattern.
2. "Audiotex Gateway" is a communications system in which an End
-----------------
User can selectively access remote information services. End Users can
interact with the system to select desired services and specific
information sources. Ordinary push-button telephone instruments are the
devices typically used to interface with the Public Switched Telephone
Network (PSTN) and Information Providers' services.
3. "Electronic Messaging/Email" is the process of sending and
-----------------------------
receiving "objects" electronically. An object consists of a data structure
and well-defined procedures that can operate on the data. Types of objects
that can be exchanged include text messages, business documents, files,
computer application software and still-frame pictures or images.
4. "Facsimile (FAX) Service" is a system used for transmitting
------------------------
images (e.g., printed copy, pictures, maps, diagrams, etc.). The images are
scanned at the transmitter (i.e., originating) end and reconstructed at the
receiving station. Such system usually employs the PSTN to transmit between
the originating and terminating locations.
5. "Information Service" is any service whereby audio, .video,
---------------------
computer readable or hard copy information is requested or provided using
the PSTN.
6. "Internet Service" is any service which provides End Users a
-----------------
means to access and utilize the networks commonly known as the "Internet,"
including, but not limited to, all related services and enhancements such
as electronic mail, UseNet news, and FTP file transfer capabilities.
7. "Paging" also referred to as "radio paging," "pocket paging,"
------
or "beeper service" is a one-way radio transmission service in which a
portable radio receiver capable of recognizing a radio signal specifically
addressed to it is used to locate or alert a subscriber by a variety of
methods including: audible tones, vibration, visual display, or audible
voice message.
8. "Pay-Per-Call Service" is a service whereby an End User is
----------------------
charged a "per-call" or "per-time" interval fee that is greater than or in
addition to the normal transmission cost of the PSTN call for the delivery
of an ETS.
9. "Special Purpose MTS" shall mean when the primary purpose for
----------------------
placing the toll call using the PSTN at the tariffed rate is to obtain
advertised or marketed information and not the transmission or call itself
10. "Telegram" is a telegraphic dispatch transmitted or received
---------
using an apparatus, system, or process for communication at a distance by
coded signals and shall not include any goods or services associated with
or delivered, with such telegrams.
11. "Video Conferencing" is the process of connecting two or more
------------------
stations simultaneously in such a manner that each station user is capable
of viewing users at the other remote stations in addition to carrying on
audio or voice communications.
COMPANY CONFIDENTIAL AND PROPRIETARY
15
<PAGE>
EXHIBIT "A"
DEFINITIONS
--------------------------------------------------------------------------------
12. "Voice Messaging / Voice Mail" is the process of recording,
--------------------------------
translating and delivering voice messages carried over the PSTN to an End
User and it provides the ability for an End User to access an optional
Voice message recording facility and leave a message for another End User.
13. "Voice Store and Forward" is the process of recording and
-----------------------
storing a message carried over the PSTN that will be delivered to a
specific terminal point on a predetermined schedule.
RBOCs: Regional Bell Operating Companies.
-----
Short-term Dilution: Those EMI Billing Records that pass Company's edits and
--------------------
screens and are submitted to the LECs for billing and collection but
subsequently cannot be posted to an End User's account by the LECs or re posted
to the End User's account and then adjusted by the LECs.
Tariffs: The rates, terms and conditions for providing intraLATA, interLATA
-------
(intrastate), interstate and international communications services as authorized
and filed with the appropriate regulators, including the FCC or state and local
regulatory authorities.
COMPANY CONFIDENTIAL AND PROPRIETARY
16
<PAGE>
EXHIBIT "B"
ESBI BILLING TELEPHONE COMPANIES
--------------------------------------------------------------------------------
The following companies are current Billing Telephone Companies for Company:
Alltel
Ameritech
Bell Atlantic North
Bell Atlantic South
Bell South
Century Telephone
Chillicothe Telephone
Cincinnati Bell Telephone
Citizens Communications
Cox Communications
GTE Central
GTE North
GTE South
GTE West
Illuminet
NECA
Nevada Bell
Nm
Pacific Bell
Southern New England Telephone
Southwestern Bell Telephone Company
Sprint Mid-Atlantic
Sprint North Central
Sprint Southern
Sprint Western
US WEST Communications, Inc.
The NPA-NXX list (ONNET File) of BTCs will be furnished to Customer periodically
via ARES. Customer acknowledges that Company has made a reasonable effort to
list the current BTCs and that the list may change from time to time without
notice to Customer.
COMPANY CONFIDENTIAL AND PROPRIETARY
17
<PAGE>
EXHIBIT "C"
ESBI PRICING
-------------------------------------------------------------------------------
(1) Company Processing Fees (rate per Record):
*Record Dollar Monthly Record Volumes Per EMI Billing
Average Record Per Month
-------------------------- ----------------------- ---------------------
$0-$10.00 0 - 5,000 LEC Charges + $.l80
NEXT - 50,000 LEC Charges + $.160
NEXT - 100,000 LEC Charges + $.l40
NEXT - 300,000 LEC Charges + $.120
NEXT - 500,000 LEC Charges + $.llO
NEXT - 1,000,000 LEC Charges + $.100
NEXT - 2,000,000 LEC Charges + $.090
NEXT - 4,000,000 LEC Charges + $.080
$10.01 - $17.50 LEC Charges + 2.0% of Billed Revenue
$17.51 - $25.00 LEC Charges + 2.5% of Billed Revenue
$25.01 - $37.50 LEC Charges + 3.0% of Billed Revenue
$37.51 - $50.00 LEC Charges + 3.5% of Billed Revenue
Over - $50.00 LEC Charges + 4.0% of Billed Revenue
<FN>
*Pricing will be calculated by the average dollar amount per record based on all
call records submitted during a calendar month.
Customer will receive a twenty percent (20%) discount on the monthly
Company Processing Fee If Customer elects to sign a three (3) year
agreement.
Company Processing Fees are charged in addition to LEC Processing Fees
and Assessments and LEC related payments, fees and Assessments.
(2) Customer Service:
Company will perform Customer Service in those areas where the LEC
Agreements provide for such service in accordance with Company's procedures
and guidelines, which are subject to change from time to time without
notice. Customer will be charged and agrees to pay a monthly cost of five
cents ($.05) per Qualified Record. submitted to the LECs for billing and
collection during each month ("Basic Customer Service Fee"). In the event
of a call transfer for issues other than billing issues, Customer will be
charged $0.18 per minute. If the transfer is via Customer's 800 number,
Company will charge $0.09 per minute plus the cost of business lines needed
to transfer calls to Customer.
(3) Excessive Customer Service:
In addition to the Basic Customer Service Fee, Customer agrees to pay an
additional fee of Four Dollars ($4.00) for each Customer Service that
exceeds one percent (1%) of the number of Records processed by Company on
behalf of Customer for each Library Code in each calendar month.
(4) ARRS:
Customer will pay an initial set-up fee for Company's ARRS. 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. These set-up
fees will not be charged during Renewal Term is unless additional Library
Codes are added. There is currently no charge for weekly accounts
receivable status updates when downloaded from ARRS.
(5) Minimum Company Processing Fee per Transmission:
Because of fixed expenses associated with processing small transmissions,
Company will impose a Minimum Company Processing Fee per transmission per
Library Code of $500. Company will require Customer to ship a
COMPANY CONFIDENTIAL AND PROPRIETARY
19
<PAGE>
EXHIBIT "C"
ESBI PRICING
--------------------------------------------------------------------------------
minimum of $1,000 in Company Processing Fees each calendar month after the
third (3rd) calendar month (the ramp-up period). If Customer fails to
submit sufficient EMI Billing Records to meet this requirement, Customer
will be charged the $1,000 monthly minimum Company Processing Fee for that
month. If Customer elects the three (3) year agreement Company will require
Customer to ship a minimum of $25,000 in Company Processing Fees each
calendar month after the third (3rd) calendar month (the ramp-up period).
If Customer fails to submit sufficient EMI Billing Records to meet this
requirement, Customer will be charged the $25,000 monthly minimum Company
Processing Fee for that month.
(6) Additional subCIC Fee:
Customer shall receive one subCIC at no charge. Due to LEC set-up charges,
however, Customer will be charged $1500 for each additional subCIC
requested by Customer.
(7) LEC Specific Billing Text Phrases:
For each text phrase used by Customer to identify its products and services
to be billed by the LECs, the Customer shall pay Company a set up fee of
$2,000.00. This set-up fee will not be charged for the first three
requested text phrases or text phrases that represent fees required by
laws, rules or regulations (i.e. Universal Service Fund).
(8) Customer Service and Special Programming Task Fees:
Customer will pay a time and expense rate for any Customer Service not
provided herein and for any special programming tasks or requests for
additional information. The current hourly rate is $125.
COMPANY CONFIDENTIAL AND PROPRIETARY
19
<PAGE>
EXHIBIT 9
ESBI CALL COMPLETION CRITERIA
--------------------------------------------------------------------------------
A call is completed when some type of direct communication or hardware or
software answer detection has been established between the originating person
and the terminating location. Verification must be made that the receiving party
or third party agrees to accept the charges for collect and third number billed
calls. 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 will 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 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 will be considered to be connected
if the originating and receiving parties hold the connection for more than
thirty-six (36) seconds.
Customer agrees that the following maximum per-call charges apply:
Domestic 0+ and 1+ $124.99
International 0+ and 1+ $249.99
Call for four hundred eighty (480) minutes (8 hours) or more are not considered
valid, completed calls and will not be billed regardless of the amount of
charges.
Call to operators, customer announcements, busy signals or ringing will not be
considered completed calls and will not be billed.
COMPANY CONFIDENTIAL AND PROPRIETARY
20
<PAGE>
EXHIBIT "E"
ESBI EXCHANGE MESSAGE INTERFACE (EMI) RECORDS
--------------------------------------------------------------------------------
Subject to the terms of this Agreement, Company currently processes the
following EMI billing record formats for LECs that are capable of billing and
collecting for services using the following EMI billing record formats:
RECORD ID
010101 Domestic Message Telephone Service
(MTS) Charge
010116 Domestic Information Provider Service
Charge
010118 Domestic Specialized Service/Service
Provider Charge
010132 Domestic Directory Assistance Charge
010133 Domestic Mobile Channel Usage
Charge
010201 North American Originated and Billable International Charge Overseas
010501 Originated and North American Terminated Message
Telephone Charge
010701 Overseas Originated and Terminated
Message Telephone Service Charge
391001 Customer Name and Address
Information
415001 Non-detailed Miscellaneous Credit
425001 Miscellaneous Recurring and Non-recurring Service Charge
425016 Miscellaneous Charge Information
Provider Service Charge
Company reserves the right to discontinue any of these record formats at any
time without notice to Customer.
COMPANY CONFIDENTIAL AND PROPRIETARY
21
<PAGE>
EXHIBIT "F"
ESBI PROCEDURES FOR CUSTOMER SERVICE
--------------------------------------------------------------------------------
In addition to applicable rules, regulations, laws and Company's Customer
Service procedures and operating policies, the parties agree to the following
Customer Service procedures:
I. For those LECs that permit Company to handle Customer Service, Company's
toll-free number will appear on the End User's LEC telephone bill as a Customer
Service inquiry number.
II. At the time of the initial call from an End User, Company's Customer
Service representative will access the End User's account. Once the account has
been accessed, the calls or charges in dispute will be determined. If the End
User is disputing any of the following, including but not limited to:
(A) Denying All Knowledge (DAK) of calls or service;
(B) Rates; or
(C) Charges for unanswered calls;
the an automated internal credit form will be prepared that customarily
contains the following information:
(D) Bill name and number;
(E) Reason and dollar amount in dispute; and
(F) Copy of the Records being disputed.
III. Company will establish standard guidelines and Customer specific guidelines
for handling certain classes of inquiries to supplement its standard operating
procedures ("Guidelines"). Disputes generally will be handled according to the
Guidelines. The Company reserves the right to use its judgment to resolve all
Customer Services. All such determinations will be final and binding on
Customer. Customer will provide Company with suggested written guidelines or
modifications in a timely fashion. Company reserves the right to approve, modify
or disapprove of all such guidelines.
All inquiries over fifty dollars ($50.00) will be forwarded to Company's
Investigations Department. Upon receipt of the internal credit form and the End
User's records in dispute, the following procedures will be followed:
(A) Notify Customer (via automated fax) that an End User is disputing
calls or charges over $50.00, and that Company will determine the validity of
such claim. That following information usually will be given:
(1) End User's full name;
(2) Telephone number;
(3) Call detail; and
(4) Amount in dispute.
(B) Confer with the LEC as needed to obtain pertinent information such
as whether Customer was assigned the telephone number at the time of billing,
etc.
(C) As deemed necessary by Company, confer with Customer to obtain
pertinent information such as date service was canceled, etc.
(D) Maintain details of conversations when investigating the calls such
as person's name, complete telephone number, etc.
(E) Notify the End User and Customer concerning disposition of the
dispute.
IV. The following procedures will be utilized for credit issued through BOCs and
LECs:
(A) An electronic EMI credit record will be submitted with the next
billing submission.
(B) For those situations where an electronic credit cannot be
submitted, an IC/EC memorandum may be mailed to the End User's LEC for credit
toward End User's account if the credit amount is over seventy-five dollars
($75.00). For amounts less than $75.00, a check may be issued and made payable
to the local telephone company, but forwarded to the End User.
The above procedures for refund checks, electronic EMI credit records and IC/EC
memorandums may take up to a total of five (5) Business Days. Customer may not
double bill or initiate secondary collection efforts for any Records that have
been billed by the LECs.
V. A record of all disputes and resolutions will be provided by Customer Service
reports that are made available on a weekly basis to Customer through ARRS.
VI. Company will handle all formal and informal regulatory inquiries and
complaints. If the regulatory agency serves both Company and Customer, Customer
is responsible for its response to the agency. If Customer is permitted to
handle its own regulatory complaints, Company reserves the right to assume this
function from Customer if deemed necessary to ensure proper handling and timely
responses to the agency. Whether Customer or Company normally handles the
complaint procedure, Company reserves the right to respond to an inquiry and to
make any decisions regarding credit in response to an inquiry or complaint.
VII. Company policy regarding refunds relating to miscellaneous charges or the
unauthorized switch of service is as follows:
COMPANY CONFIDENTIAL AND PROPRIETARY
22
<PAGE>
EXHIBIT "F"
ESBI PROCEDURES FOR CUSTOMER SERVICE
--------------------------------------------------------------------------------
(A) If an End User disputes a fee billed as a 42 Record (i.e., a monthly
recurring charge, voice mail service, etc.), Company will, to the best of its
knowledge, explain the service and how the End User m4' have obtained the
service. If the End User continues to dispute the service or states that they
are refusing to pay, Company will refund the 42 Record fee.
(B) In the case of a dispute of an unauthorized switch of long distance
service, not only will the charge for he 42 Record be refunded, but a rate
adjustment or full credit to satisfy the End User also will be provided.
Nothing in this Agreement will be deemed to limit remedies available under
rules, regulations and laws.
(C) If the End User requests that a service be cancelled, or if LOA
information is requested after are refund has been provided by Company, the End
User will be referred to Customer and Company will code the account as "Canx,"
"SLAM," "CAN," "Lcanx" or another cancellation code on the Customer Service
report. Customer agrees to cancel services for End Users that request
cancellation.
(D) If the End User disputes a subsequent charge after requesting
cancellation of service from the Customer, credit will be provided to satisfy
the End User.
COMPANY CONFIDENTIAL AND PROPRIETARY
23
<PAGE>
EXHIBIT "G"
ESBI ANTI-CRAMMING CONSUMER PROTECTION STANDARDS OF PRACTICE
--------------------------------------------------------------------------------
Customer agrees to comply with each of the following standards designed to
protect consumers from cramming and' other unfair billing practices. Customer
also agrees to notify Company of any changes in the following information
before such change occurs and to provide assurance to Company that such changes
are consistent these standards.
I. PRESCREENING OF CUSTOMER.
---------------------------
On or before the Effective Date, Customer will provide the following information
in writing in a document entitled prescreening Information to Company:
(a) Customer's corporate. name and address;
(b) The names and titles of all officers and or principals of Customer;
(c) The names of other companies or entities owned or controlled by the
officers or principals identified in subsection (b) above;
(d) A copy of a corporate Certificate of Good Standing or proof of
partnership status;
(e) A copy of the certifications demonstrating that Customer is
qualified to do business in each of the states in which Customer provides
communications products or services to End Users;
(f) A statement of whether Customer, its affiliates or its officers or
directors have been subject to prior conviction for fraud, or have had any
billing services terminated for any reason; and, if so, providing a detailed
description of the circumstances, date and person(s) or entities involved;
(g) Copies of all Tariffs in effect with any state or federal
regulatory agency;
(h) The names and addresses of any telemarketing companies to be used by
Customer; and
(i) The names and addresses of any third-party verification companies
to be used by Customer.
Customer agrees that it will update this information within ten (10) days of
Company's request and annually.
II. SCREENING OF PROGRAMS. PRODUCTS SERVICES.
---------------------------------------------
On or before the Effective Date and during the Term, Customer will provide
Company with copies of the following information:
(a) Marketing materials used by Customer,
(b) Advertisements (print or media) used by Customer;
(c) Fulfillment packages sent to End Users (which must include
cancellation information if not included elsewhere and a toll free Customer
Service number);
(d) Scripts for both sales and validation; and
(e) Honest, clear and understandable text phrase for the telephone bill
to End Users.
II. ACCESS TO COMPLIANCE MONITORING INFORMATION.
-----------------------------------------------
During the Term of this Agreement, Customer will provide Company with reasonable
access to information and data to enable Company to:
(a) Monitor, investigate and resolve consumer inquiries regarding
Customer;
(b) Monitor, investigate and resolve consumer complaints to government
agencies concerning Customer;
(c) Monitor, investigate and resolve escalated complaints by End Users
to the LEC concerning Customer;
(d) Maintain up-to-date records regarding complaints and inquiries made
by End Users concerning Customer,
(e) Investigate and respond to complaints and inquiries made by End
Users concerning Customer;
(f) Conduct investigations with regard to complaints and inquiries made
by End Users or regulatory bodies concerning Customer,
(g) Confirm authorizations provided by End Users as required herein;
and
(h) Inform End Users as to how they may cancel a product or service.
IV. AUTHORIZATIONS USED BY CUSTOMER.
-----------------------------------
On or before the Effective Date and during the Term, Customer will verify all
End User authorizations to receive products or services offered by Customer
through one of the following methods and will provide such verification upon
Company's request:
(a) Independent third-party verification;
(b) Written letters of authorization or sales orders; or
(c) Voice recordings of telephone sales authorizations.
A valid authorization must comply with applicable federal and state rules,
regulations and laws and include at least the following:
(a) The date of the authorization;
(b) The name, address and telephone number of the End User;
COMPANY CONFIDENTIAL AND PROPRIETARY
24
<PAGE>
EXHIBIT "G"
ESBI ANTI-CRAMMING CONSUMER PROTECTION
STANDARDS OF PRACTICE
--------------------------------------------------------------------------------
(c) Assurance that the End User is qua fled to authorize billing for
the product or service on that phone bill;
(d) A description of the product or service to be provided;
(e) A description of the applicable charges for be products or
services;
(f) An explicit acknowledgment by the End User that the charges for the
product or service will appear on his/her telephone bill; and
(g) The acceptance by the End User of the offer.
V. BILLING INFORMATION
--------------------
On the Effective Date and during the Term, Customer will provide Company or the
LECs with information that will enable the billing statements to End User to
include:
(a) A clear identification of Customer
(b) A clear description of the products or services billed;
(c) A clear identification of the charges; and
(d) A toll free number that End Users may use to make inquiries
concerning the bill.
COMPANY CONFIDENTIAL AND PROPRIETARY
25