DISTRIBUTOR/MARKETING AGREEMENT
This agreement (this "Agreement") is entered into as of April 29, 1999
(the "Effective Date") by and between Qwest Communications Corporation
("Qwest"), with offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and
TechWave Inc. ("TechWave"), with principal offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
WITNESSETH:
WHEREAS, Qwest and TechWave desire to enter into an agreement pursuant to
which: (a) TechWave will act as a distributor of certain business and
consumer services of Qwest; (b) TechWave will market certain services over
the Internet; through inbound calls and during TechWave sales calls (c)
TechWave will purchase its telecommunications services from Qwest; and (d)
TechWave will issue a warrant to Qwest for the purchase of certain shares of
common stock of TechWave.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
agreements and representations herein contained and subject to the terms and
conditions herein set forth, and intending to be legally bound hereby, Qwest
and TechWave hereby agree as follows:
1) TERM.
The terms and conditions of this Agreement shall be effective between the
Effective Date and the Expiration Date (as hereinafter defined), inclusive
(such period sometimes hereinafter the "Initial Term"), unless sooner
terminated as provided herein. The term "Expiration Date" shall mean that
date which is [*] after the Effective Date. Unless either party
shall give written notice to the other party at least [*] prior
to the Expiration Date, this Agreement shall automatically renew for a
[*] period ("First Renewal Term"). Unless either party shall give
written notice to the other party at least [*] prior to the
expiration of the First Renewal Term, this Agreement shall automatically
renew for an additional [*] period ("Second Renewal Term").
2) THIRD PARTY SALES ARRANGEMENTS.
a) Qwest and TechWave each agree to all of the terms and conditions
set forth in Exhibits 2(a), 2(b) and 2(c) and all of the terms,
conditions, agreements, representations, warranties and covenants
set forth therein are hereby incorporated herein as fully as if
rewritten in the body of this Agreement. Residential Services,
Business Distributor Services and Business Affinity Services shall
be collectively referred to as "Services".
b) Qwest shall provide initial training and support to certain
TechWave employees and agents, who shall thereafter be responsible
for training TechWave's employees and agents. All such training and
support, other than the salaries of Qwest employees so involved,
shall be at TechWave's expense, subject to TechWave having given
its prior approval.
c) If TechWave, at any time during the term of this Agreement, desires
to use any marketing materials, whether in print or any other media
or form, including, without limitation, electronic, internet,
"world wide web" sites, visual, audio or any combination thereof,
and whether or not there is any reference to Qwest, relating to the
Services then TechWave may submit proposed marketing materials to
Qwest for Qwest's written approval. If Qwest does not provide its
written approval within fifteen (15) business days of receipt, then
such marketing materials shall be deemed to have been rejected and
TechWave agrees not to use any such marketing materials. If Qwest
does not provide its written
* CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO PORTIONS OF THIS
EXHIBIT.
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approval within such fifteen (15) days, Qwest shall use reasonable
efforts to advise TechWave as to the reasons for not approving the
marketing materials.
d) TechWave shall not engage in solicitation of Services by outbound
telemarketing, sweepstakes, contests, or drawings without the prior
written consent of an officer of Qwest. In the event TechWave makes
a request for any such consent by Qwest, then Qwest agrees to
review and respond to TechWave within ten (10) business days of
receipt of such request and if such request is denied to provide
Qwest's reason or reasons for such denial. Notwithstanding the
immediately preceding sentence, any failure of Qwest to respond, or
to provide a reason for denial, shall not be deemed to constitute
consent.
e) TechWave shall not make any representation of rates, terms or
conditions of the Services that conflict with the applicable
tariffs or information provided by Qwest. TechWave shall not engage
in any activity that would cause Qwest to incur any obligation or
liability to employees, contractors or other parties utilized by
TechWave in selling the Residential Services. TechWave is
responsible for all expenses and obligations incurred by it as a
result of its efforts to solicit persons to become a new Customer
(as hereinafter defined) of Qwest. The term "Customer" shall mean
any person to which Qwest provides services.
f) If a person that is not a Customer is solicited by TechWave and
also by either another independent authorized sales representative
or by an employee of Qwest, Qwest may reasonably determine to which
representative or employees to credit such order, and TechWave
agrees to abide by and be bound by Qwest's decisions in this
regard. Qwest agrees to use commercially reasonable best efforts to
make such determination on the basis of which representative or
employee first submitted to Qwest a complete order, executed by the
person solicited, for Service. Qwest shall have no liability to
TechWave for commissions that might have been earned hereunder but
for the inability or failure of Qwest to provide Qwest Services to
any person solicited by TechWave or in the event of interruption,
discontinuation or modification of the Qwest Services.
g) TechWave shall not provide customer service to Customers that
TechWave obtains for Qwest, including billing, collections or
repair service, without Qwest's prior written consent. Every
Customer attracted by TechWave shall be a customer of Qwest and the
termination or expiration of this Agreement shall have no effect on
Qwest's relationship with any such Customer.
h) Qwest shall have the sole right to verify, accept or reject all
orders, to set the prices for the Services, and the terms and
conditions of the Services or other adjustments thereto without
liability to TechWave.
i) The availability of the Services to any person solicited by
TechWave will be at the discretion of Qwest based on business
reasons including, but not limited to, creditworthiness and
geographic location.
j) TechWave shall provide prominent placement of Qwest's name on each
of the following home pages: "▇▇▇.▇▇▇▇▇▇▇.▇▇▇", "▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇"
and "▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇" (collectively sometimes hereinafter the
"Main Pages") TechWave shall also provide prominent placement of
Qwest's name and logo on those other pages, screens or links over
which TechWave, or any Affiliate (as hereinafter defined) of
TechWave, exercises Content Control (as hereinafter defined) (such
other pages and the Main Pages collectively sometimes hereinafter
the "Relevant Homepages"). [*] through any phrase, graphic or
image, or through any combination thereof, provided however that
such restriction shall not preclude TechWave from making any such
display on a Relevant Homepage that is not a Main Page with respect
to [*] . TechWave shall not permit
any Main Page to display any reference to [*]
(collectively the "Named Entities") or to any
successor in interest to any such entity, other than Permitted
References (as hereinafter defined). TechWave represents and
warrants that it has the right, and covenants that during the term
of this Agreement it
* CONFIDENTIAL TREATMENT REQUESTED
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will maintain the right, with respect to the Relevant Homepages, to
provide for the placement of Qwest's name and logo, and to restrict
such other usage, as contemplated by this Agreement. The term
"Permitted References" shall mean a reference to a Named Entity
that includes a reference to, and is made only in the clear context
of, offering a service or product, including without limitation
cellular service, that is not in any manner similar to the type of
services covered by this Agreement and that does not, directly or
indirectly, make reference to, suggest or have any reasonable
connotation relating to any of the types of services provided
hereunder. TechWave shall cause all of its indexing systems to
point all references to, or including, long distance
telecommunications to point to Qwest. The term "Affiliate", when
used with respect to either party, shall mean any person that,
directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such
party. The term "Content Control" means that a page resides in a
data center owned or controlled by TechWave or a TechWave Affiliate
and that TechWave owns or controls the root URL associated with
such page.
k) Qwest shall provide Co-Branding Service (as hereinafter defined) to
TechWave, provided however that if during any Measuring Period (as
hereinafter defined) TechWave fails to obtain at least [*]
Residential Service Customers and at least [*] Business Affinity
Customers,then Qwest may thereafter elect to discontinue providing
such Co-Branding Service. The term "Measuring Period" shall mean
any [*] period during the term of this Agreement that
begins after that date which is [*] after the Program
Launch Date. The term "Co-Branding Service" shall mean: i) the
display of TechWave's name and logo on residential calling cards;
ii) the display of TechWave's name and logo on the invoices of Qwest
Residential Service Customers that are sold by TechWave and that
are direct billed by Qwest; iii) the display of TechWave's name and
logo on fulfillment/welcome kits for Residential Service Customers
that are sold by TechWave; iv) the display of TechWave's name and
logo on Business Affinity Calling Cards for Customers sold by
TechWave; and v) the display of TechWave's name and logo on
Business Affinity fulfillment/welcome kits for Business Affinity
Customers sold by TechWave.
l) Both parties acknowledge that the agreement between said parties
was introduced to both parties through the Woodstock Group, LLC and
from time to time may, but shall not be required to, utilize WGI to
facilitate future activities;
3) OTHER COMPENSATION.
a) Qwest shall provide Marketing Development Funds based upon a
Program Launch Date (as hereinafter defined) of July 1, 1999. The
Marketing Development Funds shall be payable in [*] calendar
quarter installments of [*]
each, with the first installment due (45) days after the
Program Launch Date, provided however that if the Program Launch
Date is June 1, 1999, then Qwest shall make an initial installment
payment of [*] within 45 days of the Program
Launch Date, [*] quarterly installment payments of
[*] and a final quarterly installment
payment of [*] , and further provided
that if the Program Launch Date is May 1, 1999, then Qwest shall
make an initial installment payment of [*]
within 45 days of the Program Launch Date, [*]
quarterly installment payments of [*]
and a final quarterly installment payment of
[*] . If this Agreement is terminated, as
provided for herein, then Qwest shall have no obligation to make
any such payment of Marketing Development Funds that would
otherwise be due after the date of such termination. The term
"Program Launch Date" shall mean the first day of the calendar
month in which TechWave is first able to accept, on such date,
orders for Qwest Service and shall be July 1, 1999, unless TechWave
and Qwest are able to perform the requisite services on either May
1, 1999 or June 1, 1999.
* CONFIDENTIAL TREATMENT REQUESTED
3
b) In the event Business Affinity Monthly Revenue during the first
[*] of this Agreement meets or exceeds [*]
[*] additional commission shall be paid on Business
Monthly Affinity Revenue for the remainder of said [*]
period. In the event Business Affinity monthly Revenue during the
second [*] of the Agreement meets or exceeds [*]
[*] additional commission shall be paid on Business
Affinity Monthly Revenue for the remainder of that [*]
period. In the event Business Affinity Monthly Revenue during the
third [*] period of this Agreement meets or exceeds
[*] additional commission shall be paid
on Business Affinity Monthly Revenue for that the remainder of that
[*] period.
c) Qwest agrees to contribute to a Cooperative Advertising Fund (as
hereinafter defined) and that the contribution for each calendar
quarter, as provided for herein, shall be equal [*] of
CAF Revenue (as hereinafter defined) for such calendar quarter. The
first such calendar quarter shall end on September 30, 1999 and the
contribution shall take place within forty-five (45) days
thereafter and subsequent contributions shall be made forty-five
(45) following the end of each applicable calendar quarter. Amounts
contributed to the Cooperative Advertising Fund by Qwest shall be
matched dollar for dollar by TechWave and shall be used only for
joint marketing campaigns that have been agreed upon by both
parties. With respect to any applicable calendar quarter (sometimes
hereinafter a "Measuring Calendar Quarter"), the term "CAF Revenue
shall mean, with respect to any calendar quarter ending after the
Program Launch Date and before the termination of this Agreement,
the aggregate amount of Commissionable Residential Revenue and
Business Affinity monthly Revenue for such calendar quarter and
for each other prior calendar quarter ending after the Program
Launch Date, if any.
4) MARKETING PROGRAMS.
Each party shall implement the marketing components/programs in the Marketing
Plan set forth in Exhibit 4 but the parties acknowledge that the roles,
responsibilities and program aspects may evolve and change during the term of
this Agreement. However, there will be no adverse changes to Qwest during the
term of this Agreement in exposure, number of impressions or placement as
currently set forth in the Marketing Plan.
5) WARRANT.
TechWave shall, simultaneously with the execution and delivery of this
Agreement, execute a Warrant Purchase Agreement, a Registration Rights
Agreement and related agreements set forth in Exhibit 5.
6) RETAIL SERVICES.
TechWave shall purchase all of its telecommunications services and Internet
access and web hosting services requirements from Qwest if the service is
available from Qwest, provided however that in the event any specific service
provided by Qwest does not comply in all material aspects with the minimum
performance levels and other material provisions set forth in the agreement
for such service, then TechWave shall thereafter not be required to purchase
such specific service from Qwest.
7) SERVICEMARKS, TRADEMARKS AND TRADENAMES.
Except as expressly permitted herein, neither party shall use any trademark,
service ▇▇▇▇, brand name, trade name or any other intellectual property of
the other party or its affiliates without such party's prior written consent.
Without limiting the generality of the foregoing, TechWave shall not, except
as expressly permitted herein or with the prior written consent of Qwest,
advertise, market or provided information about Qwest services or use Qwest's
service marks, trademarks, logos or other intellectual property, whether in
print, electronically, on the "Internet" or otherwise.
8) REPRESENTATIONS, WARRANTIES AND COVENANTS.
* CONFIDENTIAL TREATMENT REQUESTED
4
a) Each party represents and warrants to the other party that it has
all material licenses, permits or authorizations to perform its
obligations under this agreement and covenants that it will
maintain all such licenses, permits or authorizations.
b) Each party represents and warrants to the other party that neither
the execution and delivery of this Agreement nor the performance of
the obligations provided herein will violate: i) the provisions
of, or obligations under, any other agreement to which such party
is a party to or by which it is bound; ii) the party's articles of
incorporation, by-laws or similar governing documents; or iii) any
license, judgment, decree, order, statute, law or other restriction
on such party.
9) SURVIVAL OF OBLIGATIONS UPON EXPIRATION OR TERMINATION.
Each obligation of a party to pay the other party any monies for amounts that
accrue or become due prior to the expiration or termination of this Agreement
shall survive the expiration or termination of this Agreement. Each
obligation of a party to indemnify the other party under this Agreement shall
survive the expiration or termination of this Agreement, provided that the
action, or inaction, giving rise to the indemnity claim arose prior to the
expiration or termination of this Agreement.
10) TERMINATION.
a) Either party may give a written "Notice of Intent to Terminate" to
the other party:
i) if there occurs an Event of Default; or
ii) if the other party becomes or is declared insolvent or
bankrupt, is the subject of any proceedings relating to its
liquidation, insolvency or for the appointment of a receiver or
similar officer for it, makes an assignment for the benefit of
all or substantially all of its creditors, or enters into an
agreement for the composition, extension or readjustment of all
or substantially all of its obligations
b) If the party to whom the Notice of Intent to Terminate was given
has not cured the Event of Default within twenty (20) business days
of receipt of the notice of Intent to Terminate, the party that
gave the Notice of Intent to Terminate shall immediately thereafter
have the right to terminate this Agreement by the giving of written
notice of termination to the other party.
11) DEFAULT.
The following shall constitute an "Event of Default" under this Agreement:
A party's failure to observe, perform or satisfy any material agreement,
covenant, warranty, term or condition contained herein
12) INDEMNIFICATION AND LIABILITY.
Each party shall protect, defend, and hold harmless from any loss, damage,
claim, expense, or cost, including legal expenses and counsel fees, that the
other party becomes liable for by reason of any breach by the indemnifying
party of any warranty, representation or covenant hereunder. NEITHER PARTY
SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL,
INCIDENTAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES, OR ANY DAMAGES FOR LOST
DATA, BUSINESS INTERRUPTION, LOST PROFITS, LOST REVENUES OR LOST BUSINESS
ARISING FROM THIS AGREEMENT, WHETHER OR NOT FORESEEABLE, EVEN IF THE PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
13) CONFIDENTIALITY.
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Any confidential data or technical or business information, and any
other confidential material ("Confidential Information"), furnished or
disclosed by a party to the other party hereunder, will remain the
property of the disclosing party and any such disclosure shall not in
any way be deemed to transfer any interest in the Confidential
Information to the party to whom it is disclosed. In addition, any list
or lists identifying Qwest Customers as such, and related information
or data, shall be considered to be Confidential Information of Qwest,
and shall be used by TechWave solely in the performance of its
obligations and duties hereunder and shall be returned to Qwest upon
termination of this Agreement. Any list identifying TechWave customers
as such, and related information or data shall be considered to be
Confidential Information of TechWave, and shall be used by Qwest solely
in the performance of its obligations and duties hereunder and shall be
returned to TechWave upon termination of this Agreement. Nothing in
this Agreement shall: (i) entitle Qwest to information relating to any
person that is not and has not been a Customer of Qwest; or (ii) affect
or restrict TechWave's ownership of data, lists or other information
relating to persons with whom TechWave had a preexisting relationship
or whose relationship with TechWave exists separate and apart from
Qwest's provision of Services. During the term of this Agreement and
for a period of three (3) years after termination of this Agreement,
neither party shall reveal, divulge, make known, sell, exchange, lease
or in any other way transfer any Confidential Information of the other
party to any third party or utilize such Confidential Information, in
direct or indirect competition with the other party. Each party shall
use reasonable precautions to protect the other's Confidential
Information and employ at least those precautions that such party
employs to protect its own confidential or proprietary information.
"Confidential Information" shall not include information the receiving
party can document (a) is in or (through no improper action or inaction
by the receiving party or any affiliate, agent or employee) enters the
public domain (and is readily available without substantial effort), or
(b) was rightfully in its possession or known by it prior to receipt
from the disclosing party, or (c) was rightfully disclosed to it by
another person without restriction, or (d) was independently developed
by it by persons without access to such information and without use of
any Confidential Information of the disclosing party. Each party, with
prior written notice to the disclosing Party, may disclose such
Confidential Information to the minimum extent possible that is
required to be disclosed to a governmental entity or agency in
connection with seeking any governmental or regulatory approval, or
pursuant to the lawful requirement or request of a governmental entity
or agency, provided that reasonable measures are taken to guard against
further disclosure, including without limitation, seeking appropriate
confidential treatment or a protective order, or assisting the other
party to do so. Each party agrees that monetary damages for breach of
obligations under this Section may not be adequate and that a party
will be entitled to seek injunctive relief with respect thereto.
14) MISCELLANEOUS PROVISIONS.
a) AMENDMENTS. The Agreement, together with all Exhibits, represents
the entire understanding of the parties as it pertains to the
subject matter herein. Any and all prior offers, agreements,
representations and understandings, whether oral or written, with
respect to the subject matter hereof shall be superseded by this
Agreement. Exclusive of any Tariff modifications initiated by
Qwest, once this Agreement has been fully executed, any amendment
hereto must be made in writing and signed by authorized
representatives of both parties.
b) ASSIGNMENT. This Agreement shall be binding on Qwest and TechWave
and their respective successors and permitted assigns. Neither
Party shall assign, sell or transfer this Agreement or any interest
herein or the right to receive the Services provided hereunder,
whether by operation of law or otherwise, without the prior written
consent of the other Party, provided however that neither party
shall unreasonably withhold or delay such consent if the
assignment, sale or transfer is to an affiliate of the party
desiring to make the assignment, sale or transfer.
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c) PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in
this Agreement, express or implied, is intended to or shall confer
upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
d) WAIVER. Either Party's failure to insist upon or enforce strict
performance of any provision of this Agreement shall not be
construed as a waiver of any provision or right. Neither the waiver
by either of the parties hereto of a breach or a default under any
provision of this Agreement, nor the failure of either of the
parties, on one or more occasions, to enforce any provision of this
Agreement or to exercise any right or privilege hereunder shall
thereafter be construed as a waiver of any subsequent breach or
default of a similar nature, or as a waiver of any of such
provision, right, or privilege hereunder. Neither the course of
conduct between parties nor trade practice shall act to modify any
provision of this Agreement.
e) NOTICE. All notices, demands, requests, elections or other
communications which either Party may be required or desire to
serve upon the other party under the terms of this Agreement shall
be in writing and shall be served upon such other party: (a) by
personal service upon such other party at such other party's
address set forth below; or (b) by mailing a copy thereof by
certified or registered mail, postage prepaid, with return receipt
requested, addressed to such other party at the address of such
other party as set forth below; or (c) by sending a copy thereof by
Federal Express or equivalent courier service, addressed to such
other party at the address of such other party set forth below; or
(d) by sending a copy thereof by facsimile to such other party at
the facsimile number, if any, of such other party set forth below.
In case of service by Federal Express or equivalent courier service
or by facsimile or by personal service, such service shall be
deemed complete upon receipt by the Party. In the case of service
by mail, such service shall be deemed complete upon reasonable
proof of receipt by the Party. The addresses and facsimile numbers
to which, and persons to whose attention, notices and demands shall
be delivered or sent may be changed from time to time by notice
served, as herein provided, by any Party upon the other Party.
To TechWave:
TechWave Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇▇▇▇▇▇, CEO
Facsimile#: ▇▇▇-▇▇▇-▇▇▇▇
With copies to:
TechWave Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Executive Vice President
Attn: General Counsel
To Qwest:
Qwest Communications Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
ATTN: ▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
ATTN: ▇▇▇▇ ▇▇▇▇▇▇, Director of Consumer Distribution
With copies to:
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Qwest Communications Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: Legal Department Facsimile # ▇▇▇-▇▇▇-▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President of Business Affinity
ATTN: ▇▇▇▇▇▇ ▇▇▇▇▇, Vice President of Distributor Markets
f) SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision
of this Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been
contained herein. Further, in the event that any provision of this
Agreement shall be held to be invalid, illegal or unenforceable by
virtue of its scope or period of time, but may be made enforceable
by a limitation thereof, such provision shall be deemed to be
amended to the minimum extent necessary to render it valid, legal
and enforceable or in the alternative both parties shall negotiate
in good faith to substitute for such invalid, illegal, or
unenforceable provision a mutually acceptable provision that is
consistent with the original intent of the parties as specifically
expressed herein. The remainder of the provisions shall remain in
full force and effect.
g) RELATIONSHIP. Neither party shall have the authority to bind the
other by contract or otherwise make any representations or
guarantees on behalf of the other. Both parties acknowledge and
agree that the relationship arising from this Agreement does not
constitute an agency, joint venture, partnership, employee
relationship or franchise. TechWave acknowledges and agrees that it
is an independent contractor.
h) GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York law
applicable to contracts executed and fully performed within the
State of New York.
i) ARBITRATION OF DISPUTES. i) All claims, disputes and other legal
matters in question between the parties hereto arising out of or
relating to this Agreement or the breach or interpretation thereof,
shall be submitted to binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration
Association. Arbitration shall be conducted in the City and County
of Denver, State of Colorado. There shall be no discovery other
than the exchange of information which is provided to the
arbitrator by the parties. The arbitrator shall have authority only
to award compensatory damages and shall not have authority to award
punitive damages, other noncompensatory damages or any other form
of relief; the parties hereby waive all rights to and claims for
relief other than compensatory damages.
ii) At any time after a dispute arises, but not later than thirty
(30) days after the earlier of the filing or a complaint in
state or Federal court located in the City and County of
Denver, State of Colorado, or the delivery of a demand notice
seeking arbitration, each party may require the other to
attempt in good faith to settle the dispute by mediation
administered by the American Arbitration Association under its
Commercial Mediation Rules before resorting to, or continuing
with, arbitration, litigation or some other dispute resolution
procedure.
iii) Nothing in this Section shall prohibit a party from seeking
injunctive relief.
j) HEADINGS. The headings of sections and subsections used in this
Agreement are for convenience only and are not part of its
operative language. They shall not be used to affect the
construction of any provisions hereof.
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k) THIRD-PARTIES. The representations, warranties, covenants and
agreements of the parties set forth in this Agreement are not
intended for, nor shall they be for the benefit of or enforceable
by, any person not a party hereto.
l) ATTACHMENTS AND EXHIBITS. All Attachments and Exhibits annexed to
this Agreement are expressly made a part of this Agreement as fully
as though completely set forth in it. All references to this
Agreement shall be deemed to refer to and include this Agreement
and all such Attachments and Exhibits.
m) AUTHORIZATION. Each Party represents that the person executing
this Agreement has been duly authorized by it to execute and bind
it to the terms and conditions contained herein. Each Party, with
full knowledge of all terms and conditions herein, does hereby
warrant and represent that the execution, delivery, and performance
of this Agreement are within its corporate powers, have been duly
authorized, and are not in conflict with law or the terms of any
charter or bylaw or any agreement to which it is a party or by
which it is bound or affected.
n) AUDIT. During the term of this Agreement and for a period of one
(1) year following the expiration or termination hereof, each party
shall have the right, at its own expense and following fifteen (15)
days prior written notice, to audit the books and records of the
other party which directly relate to the transactions set forth
herein. If, with respect to any audit period, the parties determine
that the party being audited owes any amount to the auditing party
in excess of the amounts previously paid or acknowledged to be due
(such excess amount sometimes hereinafter an "Audit Amount Due"),
then the party owing the Audit Amount Due shall immediately pay
such amount to the other party and, if the Audit Amount due exceeds
five percent (5%) of the amount otherwise paid and/or agreed to be
due for such audit period, the party owing the Audit Amount Due
shall pay the reasonable costs of such audit. Such audit rights may
not be exercised more than one (1) time in any twelve (12) month
period, provided however that if the Audit Amount Due for any audit
period exceeds ten percent (10%) of the amount otherwise paid
and/or agreed to be due for such audit period then such audit shall
not be considered in limiting the frequency of audits.
IN WITNESS WHEREOF, Qwest and TechWave have executed and delivered
this Agreement, all as of the date first written above.
TECHWAVE INC. QWEST COMMUNICATIONS
CORPORATION
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: ▇▇▇▇ ▇▇▇▇▇▇
------------------------------ -----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, CEO & President ▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Date: 29 April 1999 Date: _________________________________
By: ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Date: 4/30/99
9
EXHIBIT 2(a)
BUSINESS DISTRIBUTOR SERVICES
1. SERVICES - Qwest appoints TechWave as a non-exclusive representative
within the contiguous ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ to promote the sale of
and solicit orders for the following Qwest services ("Business Distributor
Services"): Q.Guaranteed, ▇.▇▇▇, Q.icommerce, WorldCard, WAL, Point-To-Point,
Broadcast Fax, and Audio Teleconferencing. TechWave shall represent and
describe the Services to potential customers of Qwest only as said Business
Distributor Services are described in the applicable Qwest Tariffs. Tariffs
relating to the Business Distributor Services may be changed by Qwest at its
sole discretion.
2. COMMISSION - During the term of this Agreement and provided TechWave is
not in default of any material obligations hereunder, TechWave shall receive
a commission as defined below on "Collected Revenue" for new accounts
solicited by TechWave on the Business Distributor Services sold by TechWave
in accordance with Qwest's then existing tariffs, provided however that Qwest
shall not pay a commission with respect to any account that at the time of
solicitation or sale is a Business Distributor Services Customer of Qwest or
of any Qwest Affiliate. "Collected Revenue" is defined as interexchange toll
and line charges actually collected by Qwest relating to Business Distributor
Services sold by TechWave in accordance with this Agreement (excluding taxes,
installation charges, local loops, termination charges and other fixed
monthly service fees).
A. During the first twelve (12) months after the Effective Date, the
commission rates shall be [*] for all Collected
Revenue from voice, frame relay and private lines Business
Distributor Services and [*] for all Collected
Revenue from dedicated Internet access Business Distributor
Services.
B. Except for the first twelve (12) months after the Effective Date,
during the term of this Agreement and thereafter until the earlier
of i) twelve (12) months from the date of termination of this
Agreement and ii) the date the amount of commissions otherwise
payable hereunder is [*] or less a month, provided in all events
TechWave is not in default of its obligations under Section 13 of
the Agreement or Section 3, 4 or 5 of this Exhibit, the commission
for each month shall be based upon the commission rate schedule
below.
COLLECTED REVENUE COMMISSION PERCENTAGE
[*]
* CONFIDENTIAL TREATMENT REQUESTED
1
EXHIBIT 2(a)
COLLECTED REVENUE COMMISSION PERCENTAGE
[*]
Qwest may, with the prior written consent of TechWave, elect to pay
commissions based upon billed revenue, however in such event, Qwest reserves
the right to compare Collected Revenue to billed revenue and chargeback
TechWave the difference in commissions. Qwest reserves the right to set off
from commissions any amount due to Qwest by TechWave. Commission payments
for each Customer ▇▇▇▇ will be paid by Qwest approximately forty-five days
from the end of the month in which such ▇▇▇▇ cycle ends.
3. TechWave shall not sell Qwest Business Distributor Services or the long
distance telecommunications services, frame relay or dedicated internet access
services of any other person to Qwest Major Accounts, as designated by Qwest
within sixty (60) days from the date of this Agreement and subsequently,
within thirty (30) days notice that an account has been designated a Major
Account by Qwest.
4. TechWave shall use commercially reasonable efforts to not, directly or
indirectly, induce or solicit any person employed by or under contract with
any sales representative, agent or master agent of Qwest or any Qwest
Affiliates ("Qwest Rep."), to terminate his, her or its relationship with the
Qwest Rep. and/or to provide sales or marketing services on behalf of
TechWave.
5. TechWave shall not, as long as commissions are payable pursuant to this
Agreement (including those payable after termination or expiration of this
Agreement), solicit any Business Service Customer of Qwest or of any Qwest
Affiliate to obtain long distance telecommunication service, frame relay or
dedicated internet access services of any other person or induce any Business
Service Customer of Qwest or of any Qwest Affiliate to discontinue its
relationship with Qwest or with any Qwest Affiliate.
6. Provided that TechWave obtains Qwest's prior written consent, which
consent shall not be unreasonably withheld, TechWave may permit non-employees
to promote the sale of and solicit orders for Business Distributor Services.
7. TechWave shall provide, at TechWave's cost, a copy of "QWEST'S POLICIES
AND PROCEDURES REGARDING SLAMMING PREVENTION", including an
"Acknowledgement" form as set forth in Exhibit 4(e), of this Agreement,
to all employees, agents, contractors or independent distributors
involved in soliciting orders for the Business Distributor Services.
TechWave shall have each such person review such policy and return to
TechWave a signed "Acknowledgment" form, indicating that they
understand and will comply with such policy. TechWave agrees to produce
a copy of the signed Acknowledgment form within forty eight (48) hours
of Qwest's request for any person involved in soliciting orders for
Business Distributor Services.
* CONFIDENTIAL TREATMENT REQUESTED
2
EXHIBIT 2(a)
8. TechWave shall obtain a signed authorization for the Business
Distributor Services in a format approved by Qwest in writing, for each
customer sold hereunder ("Authorization"), and TechWave shall use
commercially reasonable efforts to safeguard against the submission of
improper, inaccurate and invalid Authorizations. In the event a local
exchange company ("LEC") or any regulatory entity assesses Qwest any
charges for improper, inadequate or invalid Authorizations relating to
Business Distributor Services ordered through TechWave, TechWave shall
promptly reimburse Qwest for all LEC or regulatory charges, plus an
Qwest management fee of [*] per customer
telephone number ordered through TechWave that is deemed to lack proper
Authorization. Payment for said charges may be withheld from payable
commissions, provided however, no charge or fee shall be payable by
TechWave if the charge or fee is the result from an improper format of
the Authorization as approved by Qwest hereunder. Upon the request of
Qwest, TechWave will provide to Qwest or the LEC, at TechWave's
expense, any documentation required by the LEC regarding the
Authorizations for sales of Business Distributor Services sold
hereunder. In addition, TechWave shall promptly and in good faith
cooperate with Qwest and all LECs in attempting to resolve all carrier
selection and Authorization disputes.
* CONFIDENTIAL TREATMENT REQUESTED
3
EXHIBIT 2(b)
RESIDENTIAL SERVICES
1) GRANT OF AUTHORITY
Qwest appoints TechWave as a non-exclusive representative in the territory
set forth in this Exhibit 2(b) ("Territory") to promote the sale of and
solicit orders for the services defined in this Exhibit 2(b) ("Residential
Services"), all subject to the terms and conditions of this Agreement.
TechWave agrees to use its best efforts in selling Qwest's Residential
Services, including having each person solicited authorize the selection of
Qwest as his, her or its Primary Interexchange Carrier ("PIC") in accordance
with: i) all federal, state and local laws and regulations relating thereto
("Legal Requirements"); and ii) Qwest's procedures (such authorization shall
hereinafter be referred to as "PIC Authorization"). In performing duties
described in this Exhibit 2(b), TechWave shall observe the highest standard
of integrity and fair dealing with members of the public and shall do nothing
which would tend to discredit, dishonor, reflect adversely upon or in any
manner injure or impugn the reputation of Qwest or any of its affiliates.
2) COMMISSION.
TechWave shall receive commissions with respect to Residential Services sold
by TechWave in accordance with this Exhibit 2(b), provided however, no
commission shall be paid for Customers of Residential Service that contact
Qwest directly to subscribe to Qwest services (other than inbound sales
programs previously approved by Qwest in writing).
3) RELATIONSHIP.
a) During the term of this Agreement and thereafter for as long as
Qwest is paying commissions for Residential Services pursuant to
this Agreement, TechWave shall not, directly or indirectly, market,
solicit or sell residential long distance to any person on behalf
of a competitor of Qwest.
b) TechWave shall secure and use at its own expense the equipment
necessary for the purpose of communication and electronic download
of PIC Authorizations to Qwest. Based on Qwest's current standards,
the cost of the minimum equipment required would be less than
[*] .
4) ORDER PROCESSING
a) TechWave shall obtain a valid and accurate PIC Authorization, for
each Residential Service Customer telephone number. If TechWave
submits service order information electronically to Qwest, upon
request by Qwest, TechWave shall, within forty-eight (48) hours of
Qwest's request, produce a copy of the PIC Authorization or such
other evidence of the PIC Authorization as requested by Qwest, for
the Residential Service Customer telephone number requested. If
TechWave does not comply with such request, Qwest reserves the
right not to accept additional service orders until TechWave
complies.
* CONFIDENTIAL TREATMENT REQUESTED
1
EXHIBIT 2(b)
b) TechWave shall safeguard against the submission of invalid PIC
Authorizations and PIC Authorizations that do not meet the Legal
Requirements. Without limiting the generality of the previous
sentence, if the number of Residential Service PIC Authorizations
that are determined to be Deficient PIC Authorizations (as
hereinafter defined) exceeds one tenth of one percent (.1%) of the
total Residential Service PIC Authorizations obtained by TechWave
hereunder, Qwest may terminate TechWave's right to promote the sale
of, and solicit orders for, Residential Services under this
Agreement without further liability hereunder. A PIC Authorization
shall be deemed to be a "Deficient PIC Authorization" if it:
i) results in any form of dispute, controversy or complaint; or
ii) has the same type of deficiency, error, mistake or other
characteristic that gave rise to any PIC Authorization that resulted
in any actual dispute, controversy or complaint. A PIC Authorization
shall not be considered to be a Deficient PIC Authorization if the
only reason that it would otherwise have been considered to be a
Deficient PIC Authorization is based solely upon the form provided by
Qwest. A PIC Authorization shall also not be considered to be a
deficient PIC Authorization if TechWave has obtained a legitimate PIC
Authorization.
c) In the event a local exchange company ("LEC") or any governmental
body assesses any charge for invalid PIC Authorizations obtained
through TechWave, in addition to indemnifying Qwest for any such
charge, TechWave shall pay to Qwest a Qwest management fee of
[*] per invalid PIC Authorization,
provided however, TechWave shall have no obligation under this
sentence if the invalid PIC Authorization resulted from the format
of the PIC Authorization provided by Qwest to TechWave. In addition,
Qwest shall chargeback to TechWave all Usage Commissions and any
other payments previously made to TechWave in connection with any
such invalid PIC Authorization. Payment for said charges may be
withheld from commissions otherwise payable hereunder.
d) Upon the request of Qwest, TechWave shall provide to Qwest, the
LEC, or the applicable governmental body, at TechWave's expense,
any documentation required regarding the PIC selection or PIC
Authorization for Residential Service Customers sold hereunder. In
addition, TechWave shall promptly and in good faith cooperate with
Qwest, the LEC and the applicable governmental body in attempting
to resolve all PIC selection and PIC Authorization disputes.
e) TechWave shall provide, at TechWave's cost, a copy of "QWEST'S
POLICIES AND PROCEDURES REGARDING SLAMMING PREVENTION", including
an "Acknowledgement" form as set forth in Exhibit 4(e), of this
Agreement, to all employees, agents, contractors or independent
distributors involved in soliciting orders for the Residential
Services. TechWave shall have each such person review such policy
and return to TechWave a signed "Acknowledgment" form, indicating
that they understand and will comply with such policy. TechWave
agrees to produce a copy of the signed Acknowledgment form within
forty eight (48) hours of Qwest's request for any person involved
in soliciting orders for Residential Services.
* CONFIDENTIAL TREATMENT REQUESTED
2
EXHIBIT 2(b)
5) CERTAIN DEFINITIONS
a.) Billed Residential Revenue is defined as the amount billed to
Residential Service Customers for the Residential Services sold
in the Territory pursuant to this Agreement including Qwest
Surcharges and excluding taxes, Mandated Surcharges, installation
charges and local exchange company charges.
b.) Qwest Surcharges shall mean monthly recurring subscription fees or
enrollment fees.
c.) Mandated Surcharges shall mean government or LEC charges passed
through by Qwest to the Residential Service Customer essentially
without ▇▇▇▇-up, including but not limited to PICC charges and
universal service fund charges. Qwest Surcharges and Mandated
Surcharges may be combined into one charge on a Residential Service
Customer's ▇▇▇▇.
d.) Commissionable Residential Revenue shall mean Billed Residential
Revenue less an amount, either the Initial Holdback Percent or
the Adjusted Holdback Percent, as applicable, for estimated
uncollectables, chargebacks, credits and LEC holdbacks. The
Initial Holdback Percent is [*] . Commissionable
Residential Revenue shall not include actual uncollectibles,
chargebacks, credits or LEC holdbacks.
6. INSTALLATION AND USAGE COMMISSION
a.) After the aggregate amount of Commissionable Residential Revenue for
Customers obtained by TechWave exceeds [*]
(the "Residential Threshold Amount"), Qwest shall
pay TechWave [*] for each newly installed 1+ Residential
Service Customer in the Territory obtained by TechWave hereunder
upon said Customer's First Usage, provided said First Usage is
within one hundred twenty (120) days from installation of said
Customer phone number ("Installation Commission(s)"). "First
Usage" shall be defined as the first call on a PIC'd line using
Residential Services. Neither Installation Commissions nor Usage
Commissions shall be paid for any person that is an existing
Qwest Customer or for stand alone calling card or Home 800
services. Qwest shall not pay more than one Installation
Commission on the sale of any particular Customer phone number or
"ANI".
b.) After the aggregate amount of Commissionable Residential Revenue for
Customers obtained by TechWave exceeds the Residential Threshold
Amount, Qwest shall pay TechWave a [*] commission on
Commissionable Residential Revenue that is in excess of the
Residential Threshold Amount for Residential Service Customers
who remain on the Residential Service a minimum of thirty (30)
days from First Usage ("Usage Commission(s)"), provided however,
ISP Services and Paging Services shall be paid [*]
the first 12 months of this Agreement and [*]
thereafter. Usage Commissions shall be payable only during the
term of this Agreement and until the earlier of i) twelve (12)
months from the date of termination of this
* CONFIDENTIAL TREATMENT REQUESTED
3
EXHIBIT 2(b)
Agreement and ii) the date the amount of commissions otherwise
payable hereunder is [*] or less a month, provided in all
events TechWave is not in default of its obligations under the
first sentence of Section 3.a. of this Exhibit. No Usage
Commission shall be payable following termination by Qwest
pursuant to Section 11.a.i or ii of the Agreement. Qwest shall
not pay Installation Commissions for upgrades of service.
c.) So long as Qwest is paying commissions based upon Commissionable
Residential Revenue, Qwest may periodically review and adjust
once annually the Holdback Percent to reflect Qwest's
experience with uncollectibles, chargebacks, credits and LEC
holdbacks ("Adjusted Holdback Percent"). The Adjusted Holdback
Percent shall not result in an increase to the previous Adjusted
Holdback Percent or Holdback Percent, as applicable, by more than
[*] .
d.) Qwest may periodically perform a "true up" to compare the actual
amount collected from Residential Service Customers ("Collected
Residential Revenue") to Commissionable Residential Revenue and
"charge back" or pay TechWave the difference between commissions
already paid and what would have been paid on Collected
Residential Revenue. The last month's payment of commissions
hereunder may be withheld no more than three (3) months so that
the final "true up" may be performed. Qwest reserves the right to
set off from commissions any amount due to Qwest by TechWave
under this Agreement or otherwise.
e.) Qwest may, upon thirty (30) days prior written notice to
TechWave, pay commissions based on Collected Residential Revenue
instead of Commissionable Revenue.
7. CHURN RATE
If the "Churn Rate" is greater than a number determined pursuant to this
Agreement ("Maximum Churn"), Qwest may reduce Usage Commissions upon written
notice to TechWave, provided however that any such change may not be effected
any more frequently than every six (6) months and that no such individual
reduction in Usage Commission shall be greater than [*] of the
then existing Usage Commission. "Churn Rate" shall be defined as the number
of Residential Service Customers changing its PIC from Qwest within thirty
(30) days of PIC confirmation of service divided by the number of Residential
Service Customers confirmed during a Measuring Period. A Measuring Period is
any defined interval of time not less than thirty (30) days. Upon receipt of
written notice from Qwest, TechWave shall have thirty (30) days to "cure" by
maintaining, during such 30 day cure period, the Churn Rate equivalent to or
less than the Maximum Churn and achieving a Churn Rate for all new
Residential Service Customers in a Measuring Period during such 30 day cure
period equivalent to or less than the Maximum Churn. Upon 30 days prior
written notice to TechWave, Qwest may change the Maximum Churn, provided
however that Qwest may make such a change no more frequently than every six
(6) months and further provided that no such change shall reduce the Maximum
* CONFIDENTIAL TREATMENT REQUESTED
4
EXHIBIT 2(b)
Churn by more than [*] . The Maximum Churn as of the date of
this Agreement shall be [*] .
8. BILLING RATE
If the "Billing Rate" is less than [*] per month, Qwest
may reduce Usage Commissions upon written notice to the TechWave, provided
however that Qwest may make such a change no more frequently than every six
(6) months and further provided that no such change shall reduce the Usage
Commissions by more than [*] of the then existing Usage
Commission rate. "Billing Rate" shall be defined as Billed Residential
Revenue as measured over a calendar month divided by the number of
Residential Service Customers measured over the same calendar month who had
PIC'd Residential Service during at the beginning of the calendar month and
First Usage. TechWave shall have thirty (30) days from receipt of such notice
to "cure" by increasing the Billing Rate to [*] or more
per month as measured over the 30-day cure period.
9. PAYMENT OF COMMISSIONS
Installation Commissions will be paid by Qwest approximately fifteen (15)
days following the availability of the First Usage occurrence report (but in
no event longer than thirty (30) days following the month of installation),
as long as First Usage occurs no later than one hundred twenty (120) days
after install by Qwest. Usage Commissions shall be paid by Qwest
approximately forty-five (45) days following the end of the month in which
the Commissionable Revenue is billed.
10. TechWave's nonexclusive territory ("Territory") shall be the contiguous
forty-eight states of the Continental U.S. (excluding exchanges of members of
the National Exchange Carrier Association, commonly known as "NECA", and the
United States Independent Telephone Company organization, commonly known as
"USINTELCO"). In the event Qwest begins permitting other similarly situated
distributors to sell Qwest Residential Services in either Alaska or Hawaii,
then Qwest agrees to include such state to the Territory, provided however
that commissions for sales in any such addition to the Territory may, in
Qwest's discretion, differ from those set forth herein.
11. The term "Residential Services" shall include:
1. [*]
2. [*]
3. [*]
4. [*]
5. [*]
* CONFIDENTIAL TREATMENT REQUESTED
5
EXHIBIT 2(b)
6. [*]
12. All Residential Services and rates will be provided in accordance with
Qwest's tariffs and are subject to change. Qwest reserves the right to add to
or delete from the Residential Services as may be required from time to time.
Tariffs relating to the Residential Services may be changed by Qwest at its
sole discretion.
* CONFIDENTIAL TREATMENT REQUESTED
6
EXHIBIT 2(c)
BUSINESS AFFINITY SERVICES
1. MARKETING SERVICE
TechWave and Qwest agree to jointly market Qwest's ▇.▇▇▇ services
(on-line) ("Business Affinity Services"), to TechWave's business customers
in a manner consistent with Qwest's Co-Marketing program and at the times
Qwest and TechWave jointly determine to be appropriate.
2. QWEST'S RESPONSIBILITIES
2.1 Orders taken for customers shall not be binding to Qwest until an
authorized representative of Qwest accepts them in writing.
2.2 Qwest shall provide TechWave with monthly revenue reports listing
active Business Affinity Services customers.
3. TECHWAVE'S COMPENSATION
3.1 Qwest shall pay the TechWave commissions based on Business Affinity
Monthly Revenue as follows:
BUSINESS AFFINITY MONTHLY REVENUE COMMISSION*
[*]
* Commissions are payable from the first dollar of Business Affinity Monthly
Revenue; however, commission payments for a particular month will not begin
until the total commissions to be paid for such month exceed [*] .
3.2 "Business Affinity Monthly Revenue" as used in this Agreement shall mean
the revenue collected in a month by Qwest for rendering the Business
Affinity Services to business customers of TechWave ("Collected
Revenue"); provided, however, that Business Affinity Monthly Revenue
shall exclude monthly recurring charges, taxes, installation charges,
surcharges, subscription fees paid to third parties or passed through
from third parties, equipment charges, and local telephone company
charges (including loop charges) and Qwest carrier service charges
(collectively, "Excluded Charges").
3.3 Payment of commissions shall be made within forty-five (45) days
following the end of the month in which the Services are rendered to
business customers of TechWave.
3.4 Qwest may calculate the amount of "Business Affinity Monthly
Revenue" based on "Billed Revenue" (as hereinafter defined) as
opposed to Collected Revenue. (As used herein, "Billed Revenue" shall
be defined as revenue due and owing from TechWave business customers
for Qwest's rendering of the Services to such business customers,
which revenue, although charged to business customers via billing
statements, has not been collected by Qwest.) In the event Qwest pays
commissions based on Billed Revenue, Qwest may periodically perform a
"True-up" (as hereinafter defined). As used herein, a "True-up" shall
* CONFIDENTIAL TREATMENT REQUESTED
1
EXHIBIT 2(c)
be defined as a comparison of the difference between commissions paid
based upon Billed Revenue and the amount that would have been paid if
commissions were based upon Collected Revenue. In the event that the
commissions paid based upon Billed Revenue exceed the amount that
would have been paid based upon Collected Revenue ("Excess
Commissions"), TechWave will be subject to a "Chargeback" (as
hereinafter defined). As used herein, "Chargeback" shall be a
reduction, made in the month(s) following a True-up, in the amount of
commissions to be paid, which reduction shall be equivalent to the
amount of Excess Commissions. The last month's payment of commissions
hereunder may be withheld no more than [*] so that Qwest
may perform a final True-up.
3.5 If TechWave fully implements the Inbound Up Sell program, as
provided for in Exhibit 4, the Qwest-TechWave Marketing Plan, by July
30, 1999, then for a period of three (3) months from and after the
Program Launch Date, Qwest shall pay TechWave an additional
commission of [*] based on Business Affinity Monthly
Revenue.
* CONFIDENTIAL TREATMENT REQUESTED
2
[*]
* CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 4(e)
"QWEST'S POLICIES AND PROCEDURES REGARDING SLAMMING PREVENTION"
ADVISORY TO ALL REPRESENTATIVES SELLING QWEST COMMUNICATION CORPORATION'S
SERVICES:
All Representatives/Distributors selling Qwest long distance service must
carefully read the contents of this document. It will explain Qwest's
policies and procedures for the sale of Qwest long distance services. The
purpose of this document is to explain what can cause unauthorized switching
of a customer, the importance of preventing such switching, and the
seriousness of the matter to Qwest, its authorized Representatives, and their
independent distributors. This document includes an "Acknowledgment" that
must be read, signed, and returned to the Representative/Distributor by each
individual selling Qwest services. Representatives/Distributors must make a
signed copy of this document available to Qwest, upon request.
A. COMMON CAUSES OF SLAMMING:
- Incorrect telephone number submitted on the Letter of Authorization or
"LOA" - means that incorrect telephone number is switched without the
customer's written consent.
- The submitted LOA is illegible and directly causes the person that keys
the order into the system to enter the wrong name and/or phone number.
- The person who "authorized" switching carriers really didn't have the
authority to make the switch. Sometimes receptionists, secretaries or
assistants authorize a switch to qualify for some sort of premium or other
inducement.
- A simple misunderstanding when one partner doesn't tell the other partner
or accounts payable personnel about selecting a new long distance service.
This is especially true when it is the other person who reviews or pays
the bills. The ▇▇▇▇-paying partner or accounts payable representative sees
a new long distance carrier name and thinks something is wrong. Please ask
your customers to inform the appropriate persons within the company about
changing long distance carriers.
- Signing someone up just to "get the sale" or reach a qualification or
commission level.
- Signing someone up, without the customer's knowledge, as a result of
spending a lot of time with a company decision-maker and assuming that the
person would be satisfied with Qwest service for the company.
B. EFFECTS OF SLAMMING:
- It is illegal and will not be tolerated by Qwest!
- Creates a bad image and adversely affects Qwest's and the Sales
Agent/Distributor's reputation.
- Takes time to investigate and correct.
- If we can get information verified (correct), it will save on:
1. Order rejects
2. Returned mail
3. Time to process valid and accurate orders.
- Frustrating experience for the company that was slammed.
- Usually the local telephone company levies a charge to make the initial
switch to Qwest and then charges again to switch the affected customer
back to the original long distance company. Qwest and then the distributor
and its sales agents are billed for these costs. These Qwest charges will
probably be billed by distributors to their sales agent. This leads to
serious consequences for the agent, including termination of the sales
agent relationship with Qwest.
QWEST AS WELL AS FEDERAL, STATE, AND LOCAL REGULATORY AGENCIES VIEW
"SLAMMING" AS A VERY SERIOUS PROBLEM. THE FCC CAN IMPOSE SIGNIFICANT FINES ON
A PER VIOLATION BASIS.
C. HOW CAN A REPRESENTATIVE/DISTRIBUTOR PROTECT AGAINST SLAMMING:
1
EXHIBIT 4(e)
- You are strongly encouraged to verify information against each new
customer's actual telephone ▇▇▇▇ for each LOA.
- The person signing the LOA should be a person with authority to act on
behalf of the company. It is essential that the person signing the LOA has
authority to change long distance carriers. NOTE THAT RECEPTIONISTS,
SECRETARIES AND ASSISTANTS TYPICALLY DO NOT HAVE THE AUTHORITY TO CHANGE
LONG DISTANCE CARRIERS FOR THE COMPANY. If the person signing the LOA is
different from the person with the actual authority to do so, you should
attempt to contact the other person. While this policy might jeopardize
some sales orders, it should give you a chance to retain sales by
demonstrating your concern and professionalism.
- Take your time. Review the LOA for accuracy and legibility, especially the
telephone number. Confirm the person's telephone number.
- NEVER sign someone else's name on an LOA or any other document!
- Don't force a sale that is not there.
2
EXHIBIT 4(e)
ACKNOWLEDGEMENT
THIS WILL VERIFY THAT I HAVE RECEIVED, READ, UNDERSTAND, AND WILL COMPLY WITH
THE DOCUMENT ENTITLED "QWEST'S POLICIES AND PROCEDURES REGARDING SLAMMING
PREVENTION". I FULLY UNDERSTAND AND APPRECIATE MY OBLIGATIONS AS AN QWEST
SALES AGENT OR INDEPENDENT CONTRACTOR NOT TO ENGAGE IN OR FACILITATE THE
PRACTICE OF "SLAMMING" CUSTOMERS. I UNDERSTAND THAT QWEST WILL NOT TOLERATE
FURTHER OCCURRENCES OF "SLAMMING", AND THAT QWEST WILL TAKE WHATEVER ACTIONS
ARE NECESSARY TO PROTECT AGAINST SLAMMING INCLUDING, WITHOUT LIMITATION,
TERMINATION OF THE SALES AGENT RELATIONSHIP AND ENFORCEMENT OF ALL APPLICABLE
LEGAL RIGHTS AND REMEDIES.
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SIGNATURE OF REPRESENTATIVE SELLING QWEST LONG DISTANCE
DATE
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PRINT NAME
HOME PHONE NUMBER
--------------------------------------
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PRINT NAME OF COMPANY
CHANNEL CODE
----------------------
ORGANIZATION CODE
-----------------
3
EXHIBIT 4(e)
ACKNOWLEDGMENT BY SALES AGENT
THIS WILL VERIFY THAT ON BEHALF OF , I HAVE
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RECEIVED, READ, UNDERSTAND, AND WILL DISTRIBUTE THE DOCUMENT ENTITLED
"QWEST'S POLICIES AND PROCEDURES REGARDING SLAMMING PREVENTION" TO THE
INDIVIDUALS RESPONSIBLE FOR SELLING QWEST INTERNATIONAL LONG DISTANCE
SERVICE. WE FULLY UNDERSTAND AND APPRECIATE OUR OBLIGATIONS AS AN QWEST SALES
AGENT NOT TO ENGAGE IN OR FACILITATE THE PRACTICE OF "SLAMMING" CUSTOMERS. WE
UNDERSTAND THAT QWEST WILL NOT TOLERATE FURTHER OCCURRENCES OF "SLAMMING", AND
THAT QWEST WILL TAKE WHATEVER ACTIONS ARE NECESSARY TO PROTECT AGAINST
SLAMMING INCLUDING, WITHOUT LIMIATION, TERMINATION OF THE SALES AGENT
RELATIONSHIP AND ENFORCEMENT OF ALL APPLICABLE LEGAL RIGHTS AND REMEDIES.
Date
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SIGNATURE OF REPRESENTATIVE
-------------------------------------------
PRINT NAME
BUSINESS PHONE NUMBER
----------------------
-------------------------------------------
PRINT NAME OF COMPANY
CHANNEL CODE
--------------------------
ORGANIZATION CODE
---------------------
PLEASE REMIT THIS FORM WITHIN FOURTEEN DAYS OF RECEIPT TO: QWEST
COMMUNICATIONS CORPORATION, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ATTN:
LEGAL DEPT.
SIGNATURE OF REPRESENTATIVE FOR .
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4