<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 10549
FORM 10-Q
(x) Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1998 or
( ) Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission file number: 0-28432
Boston Communications Group, Inc.
---------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-3026859
------------------------------ ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Sylvan Road, Woburn, Massachusetts 01801
--------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (617)692-7000
-----------------------------------------------------------------
_________________________________________________________________
(Former name, former address, former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) No ( )
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
As of April 28, 1998 the Company had outstanding 16,313,447 shares of common
stock, $.01 par value per share.
1
<PAGE>
INDEX
PAGE NUMBER
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheets.............................3
Consolidated Statements of Operations...................4
Consolidated Statements of Cash Flows...................5
Notes to Consolidated Financial Statements..............6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.....................8
Certain Factors That May Affect Future Results.........11
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings.......................................14
Item 6. Exhibits and Reports on Form 8-K........................14
2
<PAGE>
BOSTON COMMUNICATIONS GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
ASSETS DECEMBER 31, MARCH 31,
1997 1998
---- ----
<TABLE>
<CAPTION>
Current assets:
<S> <C> <C>
Cash and cash equivalents $23,601 $19,302
Short-term investments 10,103 10,284
Accounts receivable, net of allowance for
billing adjustments and doubtful accounts
of $ 1,304 in 1997 and $1,076 in 1998 12,445 16,387
Inventory 1,550 1,253
Deferred income taxes 1,564 1,564
Prepaid expenses and other assets 630 926
------- -------
Total current assets 49,893 49,716
Property and equipment, net 38,087 38,362
Goodwill, net 4,067 3,915
Other assets 1,338 1,227
------- -------
Total assets $93,385 $93,220
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,786 $ 774
Accrued expenses 7,304 9,976
Income taxes payable 466 206
Current maturities of capital 1,127 1,138
lease obligations -------- -------
Total current liabilities 11,683 12,094
Capital lease obligations, net of 1,598 1,309
current maturities
Shareholders' equity:
Preferred Stock, par value $.01 per share,
2,000,000 shares authorized, 0 shares
issued and outstanding - -
Common Stock, voting, par value $.01 per share,
35,000,000 shares authorized, 16,273,947 and
16,312,347 shares issued in 1997 and 1998,
respectively 163 163
Additional paid-in capital 91,029 91,081
Treasury stock (46,420 shares, acost) (372) (372)
Accumulated deficit (10,716) (11,055)
-------- -------
Total shareholders' equity 80,104 79,817
-------- -------
Total liabilities and shareholders' $ 93,385 $93,220
equity ======== ========
</TABLE>
3
<PAGE>
BOSTON COMMUNICATIONS GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1997 1998
--------- ---------
<S> <C> <C>
Revenues:
Roaming services $ 7,012 $ 7,796
Teleservices 3,789 4,589
Prepaid wireless services 790 2,934
System sales 4,028 5,064
------- -------
15,619 20,383
Expenses:
Cost of service revenues 9,419 12,041
Cost of system revenues 2,640 2,673
Engineering, research and development 1,029 1,403
Sales and marketing 1,063 1,333
General and administrative 649 1,414
Depreciation and amortization 890 2,452
------- -------
Total operating expenses 15,690 21,316
------- -------
Operating loss (71) (933)
Interest income (262) (386)
------- -------
Income(loss) before income taxes 191 (547)
Provision(benefit) for income taxes 98 (208)
------- -------
Net income(loss) $ 93 $ (339)
======= =======
Net income(loss) per common share $0.01 $(0.02)
======= =======
Shares used in computing net income
(loss) per common share 12,847 16,255
======= =======
</TABLE>
4
<PAGE>
BOSTON COMMUNICATIONS GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1997 1998
---- ----
OPERATING ACTIVITIES
<S> <C> <C>
Net income(loss) $ 93 $ (339)
Adjustments to reconcile net income(loss) to net
cash used in operating activities:
Depreciation and amortization 890 2,452
Changes in operating assets and liabilities:
Accounts receivable (2,144) (3,942)
Inventory (1,622) 297
Prepaid expenses and other assets (250) (211)
Accounts payable and accrued expenses 559 660
Income taxes payable 31 (260)
------- -------
Net cash used in operations (2,443) (1,343)
INVESTING ACTIVITIES
Purchase of property and equipment (3,908) (2,549)
Sales of short-term investments 5,766 5,976
Purchases of short-term investments - (6,157)
------- -------
Net cash provided by(used in) investing activities 1,858 (2,730)
FINANCING ACTIVITIES
Proceeds from exercise of stock options 19 52
Payment of capital leases - (278)
------- -------
Net cash provided by(used in) financing activities 19 (226)
------- -------
Decrease in cash and cash equivalents (566) (4,299)
Cash and cash equivalents at beginning of period 923 23,601
------- -------
Cash and cash equivalents at end of period $ 357 $19,302
======= =======
</TABLE>
5
<PAGE>
BOSTON COMMUNICATIONS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying consolidated financial statements have been prepared by the
Company, without audit, and reflect all adjustments which in the opinion of
management, are necessary for a fair statement of the results of the interim
periods presented. All adjustments were of a normal recurring nature.
Certain information and footnote disclosures normally included in the annual
consolidated financial statements which are prepared in accordance with
generally accepted accounting principles have been condensed or omitted in
accordance with rules of the United States Securities and Exchange
Commission. Accordingly, the Company believes that although the disclosures
are adequate to make the information presented not misleading, the
consolidated financial statements should be read in conjunction with the
footnotes contained in the Company's Form 10-K for the fiscal year ended
December 31, 1997.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income"
and SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information." Both SFAS No. 130 and SFAS No. 131 are effective for the
current year. The Company believes that the adoption of these new accounting
standards will not have a material impact on the Company's consolidated
financial statements.
2. Earnings Per Share
In accordance with Financial Accounting Standards Board (FASB) Statement No.
128, Earnings per Share, the Company is required to calculate basic and
diluted earnings per share. Basic earnings per share excludes any dilutive
effects of options, warrants and convertible securities and diluted earnings
per share is very similar to the previously reported fully diluted earnings
per share. Basic and diluted earnings per share are the same for the Company
for the quarters ended March 31, 1998 and 1997.
3. Inventory
Inventories consisted of the following at:
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
------------ ---------
<S> <C> <C>
Purchased parts $ 1,114 $1,065
Work-in-process 112 188
Finished goods 309 -
------ ------
$ 1,550 $1,253
====== ======
</TABLE>
6
<PAGE>
BOSTON COMMUNICATIONS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)
4. Contingencies
The Company received a letter from AT&T Wireless Services (AWS) stating that
it believes that it is entitled to indemnification from the Company in
respect to a certain claim presently pending in a case brought against AWS.
The letter asserts that the claim gives rise to an obligation on the part of
the Company to indemnify AWS. No legal action has been brought against the
Company and no amount of potential damages has been specified. Management
believes that the claim is without merit and that the outcome is unlikely to
have a material impact on the financial condition of the Company.
5. Subsequent Events
In May 1998, the Company entered into a strategic alliance with SmarTalk
Teleservices, Inc. (SmarTalk) to process prepaid wireless minutes using an
integrated service offering. In conjunction with this alliance, the Company
granted contingent options to SmarTalk to purchase 500,000 shares of the
Company's common stock at $11.50 per share. SmarTalk also granted to the
Company the contingent option to purchase 500,000 shares of SmarTalk common
stock at $24.44 per share. Each option to purchase shares of common stock
shall vest in 10% increments each time 25 million incremental minutes of
prepaid wireless time are serviced. Unvested options expire in May, 2005.
In addition, SmarTalk will purchase equipment from the Company at a price
approximately $500,000 below net book value of the equipment. The Company
will record a loss upon sale of the equipment of approximately $500,000
during the quarter ended June 30, 1998.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - MARCH 31, 1997 AND 1998
- -----------------------------------------------
Service and system revenues
- ---------------------------
Total revenues increased 30.8% from $15.6 million in the three months ended
March 31, 1997 to $20.4 million in the three months ended March 31, 1998.
Roaming service revenues increased 11.4% or $784,000 from the three months ended
March 31, 1997 to the same period ended March 31, 1998. The increase was
primarily due to a decrease in billing adjustments as a result of enhanced
billing and collection methods utilized by the Company and the Company's
clearinghouses, and the addition of new billing methods available to users of
the roaming services system.
Teleservices revenues increased 21.1% or $800,000 for the three months ended
March 31, 1998 compared to the same period in the prior year. The increase
resulted primarily from the expansion of services provided to existing customers
and the increase in teleservices programs for new and existing carriers
utilizing the Company's prepaid wireless services.
Revenues generated from prepaid wireless services increased 271% or $2.1 million
for the three months ended March 31, 1998 as compared to the same period in the
prior year. The increase was due to the increase in the number of markets where
C2C prepaid services were commercially available and a corresponding increase in
usage in those markets. As of March 31, 1998, there were 55 C2C nodes deployed
in various markets throughout North America, compared to 25 as of March 31,
1997. These nodes were processing calls for approximately 378,000 C2C
subscribers as of March 31, 1998.
System sales increased 27.5% or $1.1 million from the three month period ended
March 31, 1997 to the same period ended March 31, 1998. The increase resulted
primarily from the sale of systems to a wireless carrier who is implementing
prepaid wireless systems throughout South America.
Cost of service revenues
- ------------------------
Cost of service revenues consist primarily of wireless network and landline
transmission costs in addition to the personnel costs associated with operator
assisted roaming service calls, teleservice calls and C2C operations. Cost of
service revenues decreased from 81.0% of service revenues for the three months
ended March 31, 1997 to 78.4% of service revenues for the three months ended
March 31, 1998. The decrease in cost of service revenues as a percentage of
service revenues was primarily due to significant increases in revenue generated
by C2C to better absorb its operating costs and, to a lesser extent, increased
usage of the roaming services automated call completion system which resulted in
labor efficiencies.
Cost of system revenues
- -----------------------
Cost of system revenues represents the cost of prepaid and voice systems sold by
the Company's Systems Division. Cost of system revenues decreased from 65.0% of
system revenues for the three months ended March 31, 1997 to 52.9% of system
revenues for the three months ended March 31, 1998. The cost of system revenues
for the quarter ended March 31, 1997 yielded a lower margin since a significant
portion of system revenues for the quarter ended March 31, 1997 resulted from
the expansion of an international prepaid system to an existing carrier
customer.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - MARCH 31, 1997 AND 1998 (CONTINUED)
- -----------------------------------------------------------
Engineering, research and development expenses
- ----------------------------------------------
Engineering, research and development expenses primarily include the salaries
and benefits for software development and engineering personnel associated with
the development, implementation and maintenance of existing and new services and
systems. Engineering, research and development expenses increased $374,000 or
36.3% from the three months ended March 31, 1997 to the three months ended March
31, 1998. The increase was principally due to the costs, including recruiting
fees and other personnel costs, associated with the Company's hiring of new
personnel to support ongoing development and enhancements, implementation and
deployment of the C2C Network.
Sales and marketing expenses
- ----------------------------
Sales and marketing expenses include direct sales force and product management
salaries, commissions, travel expenses, in addition to the cost of trade shows,
advertising and other promotional expenses. Sales and marketing expenses
increased $270,000 or 25.4% from the three months ended March 31, 1997 to the
three months ended March 31, 1998. The increase in sales and marketing expenses
was primarily due to additional personnel, recruiting, commissions and other
personnel costs to support sales and marketing efforts in the prepaid wireless
service business. The Company expects to increase expenditures for sales,
marketing and product management in the future.
General and administrative expenses
- -----------------------------------
General and administrative expenses include salaries and benefits and other
expenses that provide administrative support to the Company. General and
administrative expenses increased $765,000 or 118% from the three months ended
March 31, 1997 to the three months ended March 31, 1998. The increase resulted
principally from the addition of staff to support the Company's growth and the
organization of the Company into its four operating divisions. As a result of
the divisional structure, certain senior management personnel changed their
functional responsibilities from marketing and engineering to general management
and oversight of the divisions.
Depreciation and amortization expenses
- --------------------------------------
Depreciation and amortization expenses include depreciation of
telecommunications systems, furniture and equipment, leasehold improvements and
goodwill. The Company provides for depreciation using the straight-line method
over the estimated useful lives of the assets, which range from three to seven
years. Goodwill is being amortized over eight years. Depreciation and
amortization expenses increased $1.6 million or 176% for the three month period
ended March 31, 1998 compared to the same period in the prior year. The
increase was due primarily to the depreciation of additional technical equipment
and software to support the expansion and continuing development of the
Company's prepaid wireless network. Depreciation and amortization expenses are
expected to continue to increase in 1998 due to increased capital expenditures
for telecommunications systems to support the continued expansion and
enhancement of the C2C Network.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - MARCH 31, 1997 AND 1998 (CONTINUED)
- -----------------------------------------------------------
Interest income
- ---------------
Interest income increased $124,000 for the three months ended March 31, 1998 as
compared to the same period in the prior year. Interest income was earned from
investments of the proceeds of the Company's public offerings. The increase in
the quarter ended March 31, 1998 was due to higher cash and investment balances
than in the prior year.
Provision (benefit) for income taxes
- ------------------------------------
The Company's effective income tax benefit was 38% for the three months ended
March 31, 1998 compared to an annual effective tax benefit of 14% for the year
ended December 31, 1997. The increase in the effective income tax benefit was
due to the reduced impact of non-deductible goodwill amortization.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At March 31, 1998 the Company had cash, cash equivalents and short term
investments of $29.6 million as compared to $33.7 million at December 31, 1997.
Net cash used in operating activities for the three months ended March 31, 1998
was $1.3 million and resulted from an increase of accounts receivable, offset by
an increase in depreciation. Accounts receivable increased $3.9 million
primarily due to systems sales in the latter part of the first quarter of 1998.
This increase was offset by depreciation and amortization expense of $2.5
million resulting from greater capital investment made in the Company's C2C
network.
Net cash used in investing activities was $2.7 million for the three months
ended March 31, 1998 and consisted primarily of the purchase of
telecommunications systems equipment and software to support the expansion of
the Company's C2C network. The Company anticipates that over the next 12 months
significant capital investments will continue to be made to support service
enhancements and additional nodes to support the C2C network.
Net cash used in financing activities for the three months ended March 31, 1998
was $226,000 and consisted principally of capital lease payments.
The Company believes that existing cash balances and funds anticipated to be
generated from operations will be sufficient to finance the Company's operations
and the expansion of the C2C Network for at least the next 12 months.
The Company has begun to review its computer systems for Year 2000 compliance
and has designed a plan to test whether their systems will conform to Year 2000
requirements. The Company is expensing all costs associated with these system
changes and does not anticipate that these costs will have a material impact on
its financial position or results of operations. Although management does not
expect Year 2000 issues to have a material impact on its business or results of
operations, there can be no assurance that there will not be interruptions or
other limitations of system functionality.
10
<PAGE>
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
This Quarterly Report contains forward-looking statements that involve risks and
uncertainties including statements regarding costs of deploying and supporting
the C2C network, increased expenditures for sales and marketing, greater costs
of depreciation and amortization. The Company's actual results may differ
significantly from the results discussed in the forward-looking statements. A
number of uncertainties exist that could affect the Company's future operating
results, including, without limitation, technological changes in the Company's
industry, the ability of the Company to continue to support its C2C Network, the
ability of the Company's carrier customers to successfully market and sell C2C
prepaid wireless services, the Company's ability to retain existing customers
and attract new customers, increased competition and general economic factors.
Historically, a significant portion of the Company's revenues in any particular
period has been attributable to a limited number of customers. This
concentration of customers can cause the Company's revenues and earnings to
fluctuate from quarter to quarter, based on the volume of call traffic generated
through these customers, the billing options available on the roaming services
platform, the services being performed for the teleservice programs and the
level of system sales. A significant decrease in business from any of the
Company's major customers, including a decrease in business due to factors
outside of the Company's control, would have a material adverse effect on the
Company's business, financial condition and results of operations.
The Company has experienced fluctuations in its quarterly operating results and
anticipates that such fluctuations will continue and could intensify. The
Company experienced an operating loss in 1997 and the first quarter of 1998,
primarily due to expenses associated with the development of its C2C Network.
The Company's quarterly operating results may vary significantly depending on a
number of factors, including the timing of the introduction or acceptance of new
services offered by the Company or its competitors, changes in the mix of
services provided by the Company, variations in the level of system sales,
changes in regulations affecting the wireless industry, changes in the Company's
operating expenses, personnel changes and general economic conditions. Due to
all of the foregoing factors, it is possible that in some future quarter the
Company's results of operations will be below prior results or the expectations
of public market analysts and investors. In such event, the price of the
Company's Common Stock would likely be materially and adversely affected.
The Company historically has provided its services almost exclusively to
wireless carriers. Although the wireless telecommunications market has
experienced significant growth in recent years, there can be no assurance that
such growth will continue at similar rates, or at all, or that wireless carriers
will continue to use the Company's services. In addition, the prepaid wireless
and PCS services are relatively new services in new markets, and if these
markets do not grow as expected or if the carriers in these markets do not use
the Company's services, the Company's business, financial condition and results
of operations would be materially and adversely affected.
11
<PAGE>
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's future success depends, in large part, on the continued use of its
existing services and systems, the acceptance of new services in the wireless
industry and the Company's ability to develop new services and systems that keep
pace with changes in the wireless telephone industry. Further, a rapid shift
away from the use of wireless in favor of other services could affect demand for
the Company's service offerings and could require the Company to develop
modified or alternative service offerings addressing the particular needs of
providers of such new services. In addition the development of better fraud
controls implemented by the carriers could decrease the demand for the Company's
roaming and other services. There can be no assurance that the Company will be
successful in developing or marketing its existing or future service offerings
or systems in a timely manner, or at all.
The Company is currently devoting significant resources toward the enhancement
and deployment of its prepaid wireless services and systems, including continued
expansion of its C2C Network. There can be no assurance that the Company will
successfully support and enhance the C2C Network effectively, that the market
for the Company's prepaid wireless services and systems will continue to
develop, or that the Company's C2C Network will successfully support current and
future growth. Furthermore, the Company has expended significant amounts of
capital to support the C2C agreements it has secured with its carrier customers.
Because C2C revenues are principally generated by prepaid subscriber minutes of
use, the Company's C2C revenues can be impacted by the carrier's ability to
successfully market and sell prepaid services. In addition, teleservices
revenues associated with billing inquiry support for C2C customers are becoming
a more significant portion of teleservices revenues and therefore these revenues
are dependent upon the size and growth of the C2C subscriber base.
The Company has expanded its operations rapidly, creating significant demands on
the Company's administrative, operational, development and financial personnel
and other resources. Additional expansion by the Company may further strain the
Company's management, financial and other resources. There can be no assurance
that the Company's systems, procedures, controls and existing space will be
adequate to support expansion of the Company's operations. If the Company's
management is unable to manage growth effectively, ensure the quality of the
Company's services and retain key personnel, its business, financial condition
and results of operations could be materially and adversely affected.
The market for services to wireless carriers is highly competitive and subject
to rapid change. A number of companies currently offer one or more of the
services offered by the Company. In addition, many wireless carriers are
providing or can provide, in-house, the services that the Company offers. In
addition, the Company anticipates continued growth and competition in the
wireless carrier services industry and consequently, the entrance of new
competitors in the future. An increase in competition could result in price
reductions and loss of market share and could have a material adverse effect on
the Company's business, financial condition or results of operations.
12
<PAGE>
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's success and ability to compete is dependent in part upon its
proprietary technology. If unauthorized copying or misuse of the Company's
technology were to occur to any substantial degree, the Company's business,
financial condition and results of operations could be materially adversely
affected. In addition, some of the software used to support the Company's
services is licensed by the Company from single vendors, which are small
corporations. There can be no assurance that these suppliers will continue to
license this software to the Company or, if any supplier terminates its
agreement with the Company, that the Company will be able to develop or
otherwise procure software from another supplier on a timely basis and at
commercially acceptable prices.
The Company's operations are dependent on its ability to maintain its computer,
switching and other telecommunications equipment and systems in effective
working order and to protect its systems against damage from fire, natural
disaster, power loss, telecommunications failure or similar events. Any damage,
failure or delay that causes interruptions in the Company's operations could
have a material adverse effect on the Company's business, financial condition
and results of operations.
13
<PAGE>
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings
On November 20, 1997, AT&T Wireless Services (AWS) sent a letter to
the Company stating that it believes that it is entitled to
indemnification from the Company in respect to a certain claim
presently pending in a case brought by Ronald A. Katz Technology
Licensing, L.P. and MCI Telecommunications Corporation against AT&T
Corp. in the United States District Court for the Eastern District of
Pennsylvania. The letter asserts that Count 13 of the complaint,
which relates in part to prepaid wireless service, gives rise to an
obligation on the part of the Company to indemnify AWS with respect to
that count. The amount in question is undetermined. The suit against
AT&T Corp. was filed on July 8, 1997. The contract between the
Company and AWS pursuant to which the Company presently provides
prepaid services to AWS, and upon which AWS's claim for
indemnification is based, was not executed until October 15, 1997.
For this and other reasons, the Company believes that the claim is
without merit. No legal action has been brought against the Company;
however the Company was served on April 2, 1998 with a subpoena
seeking a deposition of a Company representative and production of
documents.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
The exhibits listed in the Exhibit Index are part of or included in
this report.
b) Reports on Form 8-K
NONE
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Boston Communications Group, Inc.
-------------------------------------
(Registrant)
Date: May 8, 1998 By: /s/ Fritz von Mering
--------------------
Fritz von Mering
Vice President, Finance
and Administration (Principal
Financial and Accounting
Officer and Duly Authorized Officer)
15
<PAGE>
BOSTON COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1998
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.39 Agreement dated March 21, 1997 between the
Company and Aspect Telecommunications
Corporation.
*10.40 Amendment No. 1, dated January 7,1998 to the
service agreement between the Company and
Frontier Communications of the West, Inc.
10.41 Agreement dated February 9, 1998 between the
Company and the University of Massachusetts
at Lowell.
10.42 Employment Letter Agreement dated February 10,
1998 between the Company and E.Y. Snowden.
27 Financial Data Schedule
</TABLE>
* Confidential treatment requested as to certain portions.
16
<PAGE>
Exhibit 10.39
-------------
ASPECT
CUSTOMER AGREEMENT
Customer Agreement Number______
This agreement ("Agreement") is made and is effective as of the date of signing
by the last party to sign below, between Aspect Telecommunications Corporation.
a California corporation ("Aspect"), and the customer named below ("Customer").
Aspect agrees to sell and install the equipment described in the Order
Schedule(s) which are attached to or reference this Agreement ("Equipment") to
license the use of the identified software in the Order Schedule(s) which are
attached to or reference this Agreement ("Software"), and to provide the support
services described in the Support Agreement, if any, which is attached to or
references this Agreement ("Support Agreement"). Customer agrees to purchase
and to pay for such Equipment, Software, and services according to the terms and
conditions in this Agreement and the Support Agreement. The terms and
conditions of this Agreement supersede and replace any terms and conditions in
Customer"s purchase order(s) or any other agreements between Aspect and
Customer. Aspect shall not be bound by any terms of Customer"s purchase
order(s) that are inconsistent with or additional to the terms of this
Agreement. The parties may add additional Equipment, Software and services to
this Agreement by executing additional Order Schedules and Support Schedules.
1. Purchase Price. The Purchase Price for the Equipment, Software, and/or
--------------
services is stated on the Order Schedule(s). If more than one schedule is
attached or referenced, the Purchase Price is the sum of the purchase prices on
the individual schedules. Aspect will add Shipping Charges and applicable taxes
to the amount stated on the Order Schedule(s). The Purchase Price includes the
license to use the Software.
2. Installation Charge. The Installation Charge for setting up and placing
-------------------
into service the Equipment and/or Software. and for the training and
documentation described in Section 10 below, is stated on the Order Schedule(s).
If more than one schedule is attached or referenced, the Installation Charge is
the sum of the installation charges on the individual schedules. The
Installation Charge is in addition to the Purchase Price.
3. Terms of Payment. If the items ordered at one time under this Agreement
----------------
include a basic Aspect CallCenter System, defined as any Aspect product with a
model code between 1000-1999 inclusive ("System"), Customer shall make payments
according to the following terms:
Installment 1. On signing of the System Order Schedule, 20% of the sum of the
Purchase Price plus Installation Charge plus applicable taxes; and
Installment 2. Within five calendar days after the Delivery Date of the
Equipment or Software being purchased, 60% of the sum or the Purchase Price
plus Installation Charge plus applicable taxes; and
Installment 3. Within 30 calendar days after the Installation Date, the
balance of the Purchase Price plus Installation Charge plus Shipping Charge
plus applicable taxes.
If the items ordered at one time under this Agreement do not include a System,
but consist only of additional Equipment or additional Software or supplies,
Customer shall pay Aspect the Purchase Price plus Installation Charge plus
Shipping Charge plus applicable taxes in full within 30 days of [he Delivery
Date of such items. Customer accounts that are not paid in accordance with the
terms above stated will be subject to a late charge of 1.5% per month (18% per
year) or the maximum lawful rate, whichever is less, to cover the cost of
servicing the account.
Customer may assign the right to purchase the Equipment and Software to a
financing company for the sole purpose of financing the purchase of the
Equipment and Software. Customer understands and agrees that such assignment
shall not relieve Customer of its obligation to make payments under this Section
3 or of its other obligations under this Agreement. To the extent Customer has
remittcd directly to Aspect any portion or the amounts due prior to such
assignment, Aspect shall promptly refund to Customer the appropriate portions of
such payments upon receipt of payment in full of applicable amounts from
Customer's financing company.
4. Order Acceptance. Each order placed under this Agreement is subject to
----------------
Aspect's acceptance, which shall not be unreasonably withheld. If accepted,
Aspect will deliver to Customer a Notice of Acceptance of each order at the
address stated in the "bill-to" section of the relevant Order Schedule within 15
business days after receipt or Customer's signed hard-copy purchase order
referencing an Order Schedule. Aspect's Notice of Acceptance shall identify the
items to be delivered, the price, and the Scheduled Delivery Date(s).
5. Change Orders. Any written request from Customer for a Change to an order
-------------
previously accepted by Aspect may subject Customer to a price change reflecting
the inclusion or substitution of items and/or Aspect's direct costs of handling
the requested change. A change in an accepted order may also result in a change
in the Scheduled Delivery Date. A written acceptance by Aspect of a change
order will specify any price or delivery changes. Change orders reflecting
deletions are subject to Section 6 below. In the event that within 10 business
days of the Scheduled Delivery Date, Customer notifies Aspect that it wishes to
extend the Scheduled Delivery Date of a System by more than 10 business days,
Customer shall pay a rescheduling fee equal to 10% of the Installation Charge or
$2500, whichever is lower.
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6. Cancellation. Customer does not have the right to cancel the purchase of
------------
the items being ordered under this Agreement after the date of shipment by
Aspect, except as specified elsewhere in this Agreement. Accepted orders or
portions of accepted orders canceled within 30 days prior to the Scheduled
Delivery Date shall be subject to a cancellation charge equal to 15% of the
Purchase Price of the canceled items. Accepted orders or portions of accepted
orders canceled between 30 and 90 days prior to the Scheduled Delivery Date
shall be subject to a cancellation charge equal to 10% of the Purchase Price of
the canceled items.
Aspect shall have the right to cancel any order and recover any goods in transit
or at Customer's Premises if Customer fails to perform Customer"s obligations
under any of the material terms and conditions of this Agreement and fails to
remedy such breach within 30 days after notice thereof or if Customer"s delay
directly causes material delay to Aspect"s performance of this Agreement; or if
any bankruptcy or insolvency proceedings are commenced by or against Customer
and such proceedings are not dismissed within 30 days; or in the event of the
appointment of any assignee for the benefit of creditors or of a receiver of
Customer or its properties.
7. Shipment. Shipment will be made in accordance with the Scheduled Delivery
--------
Date specified in Aspect's Notice of Acceptance. In the absence of specific
shipping instructions from Customer, Aspect will ship by the method it deems
most advantageous to both parties. Aspect will prepay, and will subsequently
invoice to Customer, all Shipping Charges, defined in this Agreement as actual
billed freight, transportation insurance, special packaging. in-transit storage
(if Customer delays the requested Delivery Date after shipment has occurred) and
related charges. Equipment will be packaged in Aspect's standard commercial
packaging. If special packaging is requested, or in Aspect's opinion is
required, these additional packaging costs will be invoiced to Customer. If
Aspect ships by a method other than that specified by Customer's purchase order,
Aspect shall pay any incremental freight costs for the method used over the
method specified. Customer agrees to pay for all Shipping Charges in accordance
with Section 3 above.
8. Delivery. Delivery will be to a receiving area at Customer's Premises. The
--------
Delivery Date shall be the date that the common carrier or other delivery
service makes the first attempt to transfer the ordered goods at Customers
Premises during Customer's normal business hours. Title and risk of loss shall
pass to Customer on the Delivery Date. Customer shall then be responsible for
and bear the entire risk of loss or damage to the Equipment and Software.
Aspect reserves the right to extend the Scheduled Delivery Date by up to 30 days
upon prior written notification to Customer at least 30 days prior to the
Scheduled Delivery Date. If delivery is delayed by Aspect for more than 30 days
at Aspect's initiation, and not for reasons beyond Aspect's control, Customer
may terminate that Order Schedule, return the items being ordered, and receive a
full refund of any amounts already paid associated with that Order Schedule.
provided that Customer first notifies, Aspect, obtains a Return Authorization
Number for any items to be returned, and returns the items transportation
prepaid, insured, in the same condition as delivered and in the same or
equivalent shipping container.
9. Installation. Aspect shall utilize its own personnel to perform
------------
installation or may delegate the performance of portions of installation
activity to a third party. The Installation Date is the date that the System is
attached to Customer's telephone access lines and is ready for testing and/or
use by Customer. If the order consists only of additional Equipment or
Software, the Installation Date is the date that the additional items are
installed in an existing System. If Customer reschedules the Installation Date
within 30 days of the scheduled Installation Date there will be a rescheduling
fee of 5% of the total Installation Charge. Should Customer request an
Installation Date that falls on one of the holidays defined by the United States
government as holidays, an additional fee of 25% of the Installation Charge will
be added to the Installation Charge and invoiced at the conclusion of the
installation. The standard Installation Charges quoted on the Order Schedules
are for a single phase installation. Each additional phase requested by
Customer will incur a 10% per phase additional charge which will be invoiced at
the conclusion of the installation.
10. Training. Customer will select one employee to act in the capacity of
--------
System Manager. Aspect will train the System Manager and up to four additional
Customer participants in the methods and procedures to enter and change Customer
configuration data and to effectively use the Equipment and Software. The
training for the System Manager and additional Customer participants will be
conducted at an Aspect facility prior to System implementation. All Other
initial System implementation training, including Customer Instructor training,
Supervisor training and feature training, will be conducted at Customer's
facility during the installation process. Aspect will provide the appropriate
System documentation for System Managers, Supervisors and Agents. Other
training, and documentation may be ordered separately from Aspect at then-
current prices.
11. Returns. Customer may return unused items only by obtaining a Return
-------
Material Authorization from Aspect within 90 days of the Delivery Date of the
items. Customer must return unused items within 60 days or receipt of the
Return Material Authorization. Returned material is subject to a restocking
charge equal to 15% of its Purchase Price.
12. Expedited Orders. Aspect will use best efforts to deliver accepted
----------------
orders within its standard lead times. Customer may request delivery inside of
Aspect's standard lead times subject to an expedite surcharge and subject to
Aspect's ability to deliver such orders within the requested time period. All
orders. other than System orders, which Customer requests to be delivered within
two business days of Aspect's receipt of order shall be subject to an expedite
surcharge of 10% of the Purchase Price or $250, whichever is greater. All
orders, other than System orders. which Customer requests to be delivered within
three to five business days of Aspect"s receipt of order shall be subject to an
expedite surcharge of 5% of the Purchase Price or $250, whichever is greater.
Expedited orders for Systems shall be subject to -an expedite surcharge to be
determined by Aspect.
13. Premises. The items ordered will be delivered to and installed at
--------
Customer's premises identified in the 'Ship to' designation ("Premises") on the
Order Schedule(s).
14. Pricing. The price for each unit of Equipment or Software that is a
-------
standard product will be the price that is published in the Aspect
Telecommunications Price Guide and is subject to change. Revised prices shall
apply to all orders accepted by Aspect on or after the effective
2
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date of revision. but such revised prices shall not affect special quotations by
Aspect or orders accepted by Aspect prior to the effective date of the revision.
Aspect may, at any time. add products to, remove products from, or change prices
in the Price Guide. In the event that the Price Guide is revised to implement a
reduction in the Purchase Price of any Equipment, Software or services to be
purchased by Customer. any discounts agreed to before the effective date of
revision shall be subject to renegotiation for all orders to be accepted by
Aspect on or after the effective date of revision.
15. Taxes. All amounts payable to Aspect are exclusive of all taxes, levies or
-----
similar governmental charges, however designated, including penalties and
interest ("Taxes") imposed by any jurisdiction. including but not limited to
those based on gross revenue, payments under this Agreement, the execution or
performance of this Agreement, or otherwise, except for Taxes based on the net
income of Aspect. If any such Taxes are required to be withheld, Customer will
pay an amount such that the net amount after withholding of Taxes shall equal
the amount that would have been otherwise payable under this Agreement.
Customer agrees to pay all Taxes which are properly payable or to provide Aspect
with a certificate of exemption ("Certificate"), acceptable to the appropriate
taxing authority, with respect to the unpaid Tax. Where required, such
Certificates will be provided prior to the shipment of goods under this
Agreement. Customer shall provide Aspect with official tax receipts or other
evidence of the payment of any Tax required to be withheld on behalf of Aspect
under this Agreement.
16. Security Interest. Customer grants to Aspect a purchase money security
------------------
interest in the Equipment, in all of Customer's right, title and interest in the
Software, and in the proceeds including insurance proceeds and products thereof
in any form, to secure payment of the Purchase Price, Installation Charges,
Shipping Charges, and taxes relating to such Equipment and Software. In the
event of default by Customer of any of its payment obligations to Aspect under
this Agreement, when such default has not been cured within 30 days from the
date of the default, Aspect shall have the rights of a secured creditor under
the Uniform Commercial Code, including but not limited to the right to repossess
the Equipment and Software without liability to Customer. In such event,
Customer agrees to make the Equipment and Software available to Aspect so that
Aspect can repossess it without a breach or the peace. Customer agrees to
execute such documents as Aspect shall reasonably require to perfect its
security interest. A copy of this Agreement or the relevant invoice(s) may be
filed with appropriate authorities at any time as a financing statement in order
to perfect Aspect's security interest. Customer hereby authorizes Aspect or its
authorized agent to sign and execute on its behalf any and all necessary UCC-1
forms to perfect Aspect's purchase money security interest for all transactions
covered by this Agreement. The provisions of this Section 16 shall survive
termination of this Agreement.
17. Warranties and Warranty Service. Aspect warrants that the Equipment will
-------------------------------
meet appropriate regulatory requirements governing equipment of its general
class on the Delivery Date. Aspect further warrants that, for a period of one
year from the Installation Date, all Equipment will be free from manufacturing
and material defects. During the warranty period Aspect will, at its
discretion, repair or replace any detective items; this will be Customer"s sole
remedy for breach of the foregoing warranties.
Aspect warrants that it has the right to license the Software to Customer, and
that Aspect has tested for viruses in the Software using commercially available
virus checking software, consistent with current industry practice. Conducting
the foregoing tests constitutes Aspect"s sole liability for any viruses in the
Software. Aspect makes no further warranties with respect to any Software
included in the Equipment or separately provided to Customer.
Aspect shall use commercially reasonable efforts to respond to requests for
warranty service during the warranty term according to the level of response
described in the Support Agreement.
These warranties are contingent upon Customer's proper use and service in
applications for which the Equipment was intended and shall not apply to damage
caused by abuse, misuse, alteration, neglect, or unauthorized repair or
installation, or by the use or attempted use of software or hardware other than
that supplied and supported by Aspect. Replacement of Equipment does not extend
its warranty period beyond the original warranty expiration date. These
warranties do not cover reconstruction of Customer's configuration or other data
files residing on Equipment or Software that are rendered inoperable or
inconsistent through the attachment of non-Aspect equipment or the application
of Customer's independently developed procedures or software.
THE WARRANTIES SET FORTH HEREIN ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY, WITH RESPECT TO THE EQUIPMENT, SOFTWARE, SERVICES OR OTHER
ITEMS PROVIDED HEREUNDER. ASPECT SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND AGAINST
INFRINGEMENT.
18. Maintenance. Aspect shall supply Customer with maintenance services as
-----------
defined in the Support Agreement.
19. Patent and Copyright Indemnity. Aspect will defend or settle at its
------------------------------
expense any action brought against Customer to the extent based upon a claim
that the Equipment or Software purchased or licensed and paid for by Customer
infringes any duly issued United States patent or copyright, and Aspect shall
pay any settlements entered into or final judgments awarded to the extent based
thereon; provided that Aspect shall have sole control of any such action or
settlement negotiations, and provided further that Customer notifies the Chief
Financial Officer of Aspect promptly in writing of such claim, suit, or
proceeding and gives Aspect adequate information and uses its best efforts to
assist in the settlement and/or defense of any such action.
If Customers Equipment or Software becomes, or in Aspect's opinion may become,
subject to any claim of infringement of any duly issued United States patent or
copyright. Aspect at its option may:
(i) procure for Customer the right to continue to use the Equipment or
Software;
(ii) replace or modify the Equipment or Software so that it is non-infringing;
or
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(iii) if neither of the foregoing alternatives is reasonably practical, Aspect
may remove the Equipment or Software and refund the applicable Purchase
Price and Installation Charge payments made to Aspect, reduced by an
amount equal to the depreciated portion of the payments, calculated on a
five (5) year straight line basis,
Aspect shall not be liable for any costs or expenses incurred by Customer or on
Customer"s behalf without prior written authorization by an officer of Aspect,
which authorization shall not be unreasonably delayed or withheld. Aspect
specifically disclaims any liability for claims relating to non-Aspect systems,
equipment, software. assemblies, circuits, methods or processes into which
Equipment or Software provided by Aspect is incorporated, or for or with which
any of the Equipment or Software provided by Aspect is used. Aspect
specifically disclaims any liability under this Section 19 relating to the
creation or modification of Equipment or Software in compliance with Customer"s
specifications or for Customer's modification of Equipment or Software unless
such modification was made with Aspect's prior written approval.
THE FOREGOING STATES THE SOLE AND EXCLUSIVE LIABILITY OF ASPECT AND THE
EXCLUSIVE REMEDY OF CUSTOMER FOR INFRINGEMENT OR CLAIMS OF INFRINGEMENT OF ANY
THIRD PARTY PATENT, COPYRIGHT, OR OTHER INTELLECTUAL PROPERTY RIGHT BY THE
EQUIPMENT OR SOFTWARE.
20. Confidential Information. Aspect retains all intellectual property and
------------------------
proprietary rights in and to all of its designs, engineering details, and other
information pertaining to the Equipment or Software or to the installation,
testing, operation and maintenance of the Equipment or Software. Such rights
and information shall be deemed "Confidential Information" provided that it is
labeled as confidential or proprietary or, if supplied as an oral disclosure, is
stated at the time of disclosure to be confidential or proprietary and is
identified in writing as such within 30 days of such oral disclosure. The
Software shall be deemed Aspect Confidential Information without the necessity
of marking it as such. Customer agrees to use Aspect's Confidential Information
only for the operation and maintenance of the Equipment or Software purchased
from Aspect, to keep such Confidential Information confidential, and not to
reproduce, copy, or disclose such Confidential Information to any third party,
except with Aspect's prior written consent.
The nature of the relationship between Aspect and Customer may require Customer
to disclose information that Customer considers confidential or proprietary.
Such information shall be deemed "Confidential Information" provided that such
information is labeled as confidential or proprietary or, in the case of an oral
disclosure, is stated to be confidential or proprietary at the time of
disclosure and is identified in writing as such within 30 days of such oral
disclosure. Aspect agrees to use Customer's Confidential Information only as
required to exercise its rights or to carry out its obligations under this
Agreement, to keep such Confidential Information confidential, and not to
reproduce, copy, or disclose such Confidential Information to any third party,
except with Customer"s prior written consent.
These obligations regarding confidentiality and limitations on use shall not
apply to any information that:
(i) was in the receiving party's possession prior to receipt from the
disclosing party as shown by files existing at the time of disclosure;
(ii) is or becomes in the public domain other than through a breach of
confidentiality by the receiving party;
(iii) was developed independently by employees or agents of the receiving party
who have not had access to the disclosing party's Confidential
Information;
(iv) was or is rightfully disclosed to the receiving, party by a third party
who is not under an obligation to the disclosing party with respect to
such information; or
(v) is ordered by a court of law.
The provisions of this Section 20 shall be effective for five years from the
date of disclosure or the particular item of Confidential Information and shall,
if applicable, survive the termination of this Agreement.
21. Software Products Restrictions. Customer is granted a personal,
------------------------------
nontransferable, non-exclusive, perpetual license to use, for its internal
business purposes only and only in connection with the Equipment, only the
number of copies or such Software that are provided by Aspect and only on the
Equipment on which it is originally loaded, installed, or mounted by Aspect.
Customer may not copy (except a reasonable number of copies for backup or
archival purposes) such Software for any purpose without Aspect's prior written
consent. Customer may not remove such Software or attempt to execute such
Software on any equipment other than the Equipment on which such Software was
originally loaded, installed or mounted by Aspect.
Customer shall not, whether through the use of disassemblers or any other means,
attempt to reverse engineer, decompile, disassemble, or drive any source code
from such Software, nor shall Customer permit any third party to do so.
Customer shall not cause such Software to be destroyed, disabled, or modified in
its operation. Any attempt to perform any of the foregoing shall be a material
breach of this Agreement and shall entitle Aspect to immediately exercise any
remedy herein or available at law or in equity.
If Customer purchases the right to make and use additional copies of any
Software, as evidenced by certificates provided by Aspect that specify in
authorized number or users, all such copies will be subject to the license terms
in this Section 21, except that the authorized number of users or copies will be
as stated in such certificates.
Customer agrees that its rights and responsibilities in Software delivered to
Customer accompanied by a separate written license agreement shall be as stated
in such license agreement to the extent the terms and conditions of such
agreement arc inconsistent with the provisions of this Section 21.
The provisions of this Section 21 shall survive the termination of this
Agreement.
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22. Customer Responsibilities. Customer will provide Aspect full and free
-------------------------
access to the Equipment during mutually agreed to times. Waiver of liability and
other restrictions will not be imposed as a requirement for access to the
Premises. Customer will allow Aspect to use necessary machines, communications
facilities, features, and other equipment at no charge. A representative of
Customer will be present at the Premises during the performance of installation
and support.
Customer will maintain the conditions of the Premises within the common
environmental range of and in accordance with the power, temperature, humidity,
and other requirements for the Equipment.
Customer will coordinate with Aspect the planning and selection of the quantity,
types, and providers of telephone access circuits. Customer will order such
circuits and arrange for their wiring and interconnection at a demarcation point
satisfactory to Aspect. Customer will assure that the Installation Date will
not be delayed due to non-availability of such circuits. Customer will assure
that the supplier(s) of such circuits provide one or more test circuits from
each group of circuits during installation of the System. Aspect will assist
Customer in the initial testing of new circuits.
Customer will provide at its expense one telephone access line for remote
Maintenance of the System and one general-purpose telephone set at or near the
demarcation point for the purpose of testing and for business use by Aspect
support personnel.
Customer will maintain one or more Aspect-trained employees to act in the
capacity of System Manager.
23. Resale or Transfer. Customer may not resell or otherwise transfer the
------------------
Software without Aspect's prior written consent, which shall not be unreasonably
withheld. Any transfer is subject to Customers payment of a Software license
reissue fee and, if the System is not at the current Software Release level, a
one-time software revision upgrade fee at Aspect's then-current rate. Upon
request for transfer, Aspect's consent and Customer's payment of such fees.
Aspect will reissue the applicable Software licenses to the transferee. Aspect
agrees that the Software license reissue fee for the basic Call Center System
Software will not exceed 20% of the Price Guide purchase price of the basic Call
Center System. The Software license reissue fee for other Software will be the
Price Guide purchase price of such Software.
In the event Customer resells or otherwise transfers any Equipment purchased
under this Agreement, other than to a financing company for the sole purpose of
financing the purchase of the Equipment, Aspect shall have no obligation to
enter into a support agreement with the transferee unless the Equipment is
covered by a Comprehensive Support Plan agreement effective at the time of the
transfer and then only upon Aspect and the new owner (i) reaching a negotiated
agreement regarding all material terms and conditions for the provision of
support and (ii) entering into Aspect's Customer Agreement. In the event that
support coverage has lapsed on a System. and the new owner wishes Aspect to
support the System, Aspect must recertify the System and will charge a
recertification fee not to exceed 10% of the then-current Price Guide purchase
price of an equivalent new System. Regardless of whether support coverage has
lapsed, Aspect must recertify transferred Equipment other than Systems
(excluding TeleSets) and will charge a recertification fee not exceeding 15% of
the Price Guide purchase price of such Equipment which must be paid prior to
installation of the Equipment in the transferee's Call Center.
24. Limitation of Liability. IN NO EVENT SHALL ASPECT"S LIABILITY UNDER,
------------------------
ARISING OUT OF OR RELATING TO THIS AGREEMENT, EXCLUDING OBLIGATIONS UNDER
SECTION 19, EXCEED THE AMOUNT PAID TO ASPECT BY CUSTOMER FOR THE EQUIPMENT,
SOFTWARE, OR SERVICES GIVING RISE TO SUCH LIABILITY. IN NO EVENT WILL ASPECT BE
LIABLE FOR LOST PROFITS, LOSS OF USE, LOSS OF DATA, COST OF PROCUREMENT OF
SUBSTITUTE GOODS OR SERVICES, UNAUTHORIZED CALLS THAT MAY BE MADE USING THE
SYSTEM AND CHARGED TO CUSTOMER. ANY TELEPHONE TOLL FRAUD, OR ANY OTHER SPECIAL,
INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED, AND ON ANY
THEORY OF LIABILITY. WHETHER FOR BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE
AND STRICT LIABILITY), OR OTHERWISE, THESE LIMITATIONS SHALL APPLY WHETHER OR
NOT ASPECT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. THE
PARTIES ACKNOWLEDGE THAT THE PURCHASE PRICE WAS DETERMINED BASED UPON THE
FOREGOING LIMITATION OF LIABILITY.
25. General Terms. This Agreement shall be governed by the laws of the State
-------------
of California, without reference to its conflict of laws rules. Clerical errors
are subject to correction. Customer grants Aspect permission to obtain, from
any source. information related to Customer's credit rating. If Customer is not
a public company, Customer agrees to supply to Aspect financial information
requested by Aspect for the purpose of verifying credit and to warrant the
accuracy of such information. Should any provision of this Agreement be held to
be invalid, that provision shall be replaced with a valid provision implementing
the intent of the parties at the time of the signing of this Agreement. Except
for Customer's obligation to pay amounts due, neither party hereto shall be
liable for any loss. damage, or penalty resulting, from such party's failure to
perform its obligations hereunder when such failure is due to flood, earthquake,
fire, acts of God, military insurrection, civil riot, or labor strikes.
26. Entire Agreement. This Agreement and the Support Agreement, if any,
----------------
constitute the entire agreement between Aspect and Customer and supersede any
previous agreements or representations, either oral or written. Customer
acknowledges that it has not relied upon any representations or warranties other
than those expressly contained in this Agreement or the Support Agreement. This
Agreement may be amended. terminated, or altered only by in instrument in
writing signed by individuals of appropriate authority or both parties.
Customer shall not assign this Agreement or any rights hereunder, except to a
financing company as stated in Section 3, without prior written consent from
Aspect.
27. Notices. Any notice or report required or permitted by this Agreement
-------
shall be deemed given if (i) delivered personally to an officer of the other
party, (ii) sent by either party to the other by first class mail, postage
prepaid. addressed to the other party at the address given below or such other
address as to which such party shall give notice hereunder, or (iii) sent by fax
to the fax number given below or such other
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fax number as to which such party shall give notice hereunder (with a follow-up
mailing of the faxed notice). If by mail, notice shall be deemed given five
business days after deposit with postal authorities.
28. Binding Agreement. This Agreement shall be binding upon both parties and
-----------------
their successors upon the approval, acceptance, and execution by the Aspect
Sales Representative, an officer of Aspect, and an authorized representative of
Customer.
ASPECT TELECOMMUNICATIONS CORPORATION Boston Communications Group
(Legal Corporate Name of Customer)
By: /s/ Colleen Kelly By: /s/ George K. Hertz
Sales Representative Signature of Customer's Authorized
Representative
By: /s/ J. V. Schuder George K. Hertz
Authorized Officer Printed Name of Signing Person
Joseph V. Schuder President
Printed Name of Authorized Officer Title of Signing Person
3/21/97 3/21/97
Date Signed Date, Signed
Address for mail notice to Aspect: Address for mail notice to Customer:
Aspect Telecommunications Corporation Boston Communications Group, Inc.
Order Administration 100 Sylvan Road
1730 Fox Drive Woburn, MA 01801
San Jose, CA 95131-2312
Telephone Number for Fax Notice Telephone Number for Fax Notice
to Aspect: (408) 325-2962 to Customer: 617-692-6200
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
EXHIBIT 10.40
-------------
FRONTIER
AMENDMENT #1 TO SERVICE AGREEMENT TERMS AND CONDITIONS
Boston Communications Group, Inc.
December 18, 1997
This is Amendment # 1 to the above Agreement between Frontier Communications of
the West, Inc. ('Frontier") and Boston Communications Group, Inc. ('Purchaser"),
dated July 9, 1996 (the 'Agreement").
1. Except as otherwise stated, capitalized terms used herein have the same
meaning as set forth in the Agreement
2. The following minimum charge is added to the Agreement:
Beginning with Purchaser's Billing Cycle that commences in the first
calendar month following the effective date of this Amendment, Purchaser is
liable for an overall yearly minimum usage charge for all Services of $ *
over the Initial Term as it has been extended in paragraph 3. below (the
"Yearly Minimum Charge"). If, at the end of the Initial Term, or if prior
to expiration of the Initial Term the Agreement is terminated by Frontier
for cause, and at that time Customer's net charges (after any discounts of
credits) for the Services are less than the Yearly A4inimum Charge,
Purchaser shall pay the shortfall.
3. The Initial Term of the Agreement is extended for an additional twelve (12)
months following the effective date of this Amendment.
4. Purchaser agrees to maintain the same traffic volumes (other than for
normal traffic fluctuations or attrition) except to the extent that
Purchaser gives Frontier 90 days prior written notice of Purchaser's intent
to actively reduce Purchaser's traffic volumes to Frontier and the schedule
for such reduction. if Purchaser-'s traffic volumes decrease (other than
for normal traffic fluctuations or attrition) and Purchaser did not provide
Frontier with the required notice, then Purchaser shall pay Frontier the
difference between Purchaser's prior Billing Cycle charges and Purchaser's
Billing Cycle charges for the decreased traffic volume. Frontier reserves
the right to audit Purchaser's pertinent books and records upon reasonable
advance notice to confirm Purchaser's compliance with this provision.
5. Section 3 (h) of the Agreement is modified by replacing the first sentence
and adding two more sentences: 'Frontier may revise the rates and monthly
recurring and other charges in this Agreement (and any, exhibits,
attachments or schedules) at any time upon written notice to Purchaser.
Unless otherwise stated the notice, domestic rates are effective within
thirty days and international/offshore rates are effective within seven
days of the date of Frontier's written notice. Other charges are effective
in accordance with the notice." The rest of the paragraph remains the same.
6. As an accommodation to Purchaser, Frontier has been billing certain of
Purchaser's customers on Purchaser's behalf. Frontier agrees to continue
this accommodation until 3/31/98, unless Purchaser requests earlier
termination in writing. Thereafter, Purchaser shall be responsible for
billing such customers directly or Purchaser shall work with Frontier to
place all Purchaser's End-Users on direct retail or wholesale agreements.
Purchaser has been and shall continue to be solely responsible for all
claims of its customers relative to this billing arrangement and otherwise,
including without limitation, any credits or adjustments that may be issued
or required to be issued to customers. Purchaser shall hold Frontier
harmless against any liability or bad debt associated with such billing
arrangement. Further, Purchaser shall remain liable for all usage charges
generated by Purchaser's customers, including those customers Purchaser may
be unable to bill for services after 3/3/98.
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7. The existing rate and pricing schedules under the Agreement (including
volume discounts and any promotional rates or discounts associated with the
Services) are replaced with the attached Exhibits for the following
Services. The new rates will be effective no later than 30 days following
the effective date of this Amendment.
Ancillary Fee Schedule - Exhibit B
Call Record Detail - Exhibit C
Carrier Termination, International, Directory Assistance, Carrier 800
Transport- Exhibit D, D (a-d)
Switched Inbound/Outbound, and International - Exhibits El E(a) F, F(a) and
G, G (a)
Network Interconnection Schedule - Exhibit H
Service Metric - Exhibit I
8. The balance of the Agreement and any executed amendments or addenda thereto
not modified by this Amendment shall remain in full force and effect..
9. This Amendment #1 is effective as of the date signed by Frontier below.
Frontier Communications of the West, Inc. Boston Communications Group, Inc.
By: /s/ Anthony J. Cassara By: /s/ Robert J. Sullivan
------------------------------ ----------------------------------
Anthony J. Cassara, President Robert J. Sullivan, Vice President
Frontier Carrier Services Operations and Engineering
Date: 1/7/98 Date: 12/19/97
----------------------------- -----------------------------
2
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit B
Page 1 of 1
SCHEDULE OF ANCILLARY FEES
Electronic Exchange
Set-up (to be refunded upon first $25,000 invoice) $*
Monthly Recurring Charge for Service (MRC) $*
If Purchaser is not subscribed to a switched inbound/outbound Service,
Purchaser will be charged Frontier's then current standard NOS switched
rate per minute (at Purchaser's applicable rate level)for usage of the
800/888 number.
Call Detail Record/EM) Record Delivery (excluding RDA/EE)
Per initial Mag Tape $*
Additional Mag Tapes $*
Programming charges to change format (per hour) $*
Branded 700 Test Number
Setup Non-Recurring Charge (NRC) $*
Service (MRC) $*
PIC Charges
Unauthorized PIC changes
(Noted on Invoice as "Unauthorized Carrier Change Charges)
See Exhibit C III. #2
Rejected LEC Order resolution/rework $*
Accounting Codes
Non-validated MRC (per account) $*
Validated MRC (per account) $*
NECA and Lifeline Charges (subject to change w/o notice)
MRC per end-user ANI active in Frontier's databases $*
800 SMS database administration (subject to change)
Pass-through MRC per active Frontier RespOrg 800 number $*
Frontier RespOrg Maintenance Service Charges $*
Directory Assistance Listing NRC Implementation $*
Directory Assistance Listing MRC per 800 number $*
800 Carrier Transport (Dedicated)
ANI / DNIS Delivery NRC - Implementation $*
ANI / DNIS Delivery MRC $*
Stand-Alone DNIS NRC - Implementation $*
Stand-Alone DNIS MRC $*
800 P.I.N.
Set-up Charge per P.I.N. Program (NRC) $*
To be refunded after first $2,500 in 800 PIN billing
NOS Dedicated Services
Switch connection fee per DS-1 (MRC) $*
Equipment/Electronics
Channel Banks/CSU/Cards Implementation (NRC) $*
3
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Channel Banks/CSU/Cards (MRC) $*
Stand-Alone CSU Implementation (NRC) $*
Stand-Alone CSU (MRC) $*
4
<PAGE>
Exhibit C
Page 1 of 3
CALL DETAIL RECORDS
ORDER PROCESSING PROCEDURES
LETTER OF AGENCY REQUIREMENTS
1. Call Detail Records; End-User DataBase Access.
1. If Purchaser requires call detail records for usage of the Services
("CDR") it has the option of (i) receiving CDR on a monthly basis Via
magnetic tape, and/or (ii) having access on a daily basis via
electronic data exchange, if available.
2. If Purchaser elects option 1.(i), then on or about the fifth Business
Day following the end of a Billing Cycle, Frontier will deposit with
an overnight delivery service for delivery to Purchaser a CDR Tape in
the format established by Frontier. CDR Tapes rate the Services at
Frontier rates in effect at the time the Services were provided and
must be re-rated by Purchaser at its tariffed rates.
3. If Purchaser elects option I.(ii), then Frontier will make CDR
available for Purchasers access Monday through Saturday, excluding
nationally recognized holidays, for the prior period's traffic.
Purchasers access to CDR will be via electronic data exchange
("Electronic Exchang4V') to either (i) Purchasers designated mainframe
computer via the IBM Information Network ("IIN") via Network Data
Mover ("NDM"), or (ii) dedicated personal computer via Procomm+
software. Purchaser is liable for all transmission charges together
With the cost of Frontier compatible hardware and software necessary
at its location for use of Electronic Exchange. Frontier Will archive
CDR for 8 Business Days.
4. At Purchaser's written request, Frontier will provide Purchaser access
to Purchaser's End-User records resident on Frontier's systems in
Michigan via remote access ("RDK') so that Purchaser may perform
limited record inquiries and updates on a "real-time' basis. RDA is
available with Electronic Exchange only. Purchaser agrees to comply
with such policies, procedures and security measures as Frontier may
reasonably establish from time to time for Purchasers use of RDA.
Frontier reserves the right to immediately discontinue RDA by
Purchaser if Frontier determines in its reasonable business judgment
that Purchaser is using RDA or data obtained therefrom in a manner
detrimental to Frontier or in violation of the confidentiality
provisions of this Agreement.
5
<PAGE>
Exhibit C Page 2 of 3 II. Order Processing Procedures.
1. Codes and End-User AN[s:
B. Purchaser understands and agrees that activation of End-User ANIs
is contingent on the End-User Information associated with such
ANis complying with LEC established criteria. Assuming receipt
of properly formatted End-User Information that complies with the
LEC established criteria, ANIs viill generally be activated
within 10 Business Days of receipt by Frontier of the End-User
Information. If the End-User Information does not comply with
LEC criteria, Frontier will return the same to Purchaser for
Purchasers correction and resubmission.
2. 800 Numbers:
Subject to (i) the Guidelines, (ii) delays attributable to third parties,
and (iii) otherwise applicable provisions of the Agreement, 800 Numbers
will be activated and confirmed by Frontier within 2 Business Days of
receipt by Frontier of a proper order in accordance with the order
processing requirements set forth below.
A. Orders must be submitted via Frontier established procedures and
formats and must include (i) a letter of authorization if
Frontier is being appointed the RespOrg, and (ii) the End-User
Information for each 800 Number, including the ANI translation
for each 800 Number.
B. Purchaser may request that Frontier reserve a specific Frontier
800 Number on behalf of Purchaser at the charge set out in
Exhibit B. Frontier will either confirm reservation or indicate
unavailability within 2 Business Days of its receipt of the
request.
C. If Frontier has reserved a Frontier 800 Number for Purchaser and
Purchaser does not order activation of the reserved number in
accordance with item (a) above within 1 0 Business Days from the
date Frontier confirms the reservation, the reserved number will
be assigned to the Frontier pool of 800 numbers and be available
to Frontier for its own business purposes.
3. If the End-User Information or any other necessary order information
submitted by Purchaser is incomplete or inaccurate, Frontier will
return the same to Purchaser for correction and resubmission.
6
<PAGE>
4. Service Cancellation: Frontier will, at Purchaser's request and at
Purchaser's sole risk and liability, block or cancel all or a portion
(to the extent permitted by its systems) of an EndUser's Service(s).
7
<PAGE>
Exhibit C Page 3 of 3 Ill. Letter of Agency Requirements.
Purchaser is responsible for obtaining and maintaining valid letters of
agency from prospective EndUsers in accordance with the following:
1 Frontier acknowledges that at times Purchaser may obtain prospective
End-Users through telemarketing and tape recorded third party
verifications in accordance Wth FCC Guideline Subpart K section 64.1 1
00 (c) as the same may be amended, interpreted or clarified ("Verbal
LOA"). Purchaser understands that some LECs will not accept Verbal
LOAs as valid authorization for a change of long distance carriers and
agrees that for prospective EndUsers located in such LECs'
jurisdictions it YAII use Written LOAS. When Purchaser uses written
letters of agency ("Written LOAS") for prospective End-Users it shall
use a format that complies math FCC Guideline Subpart K section
64.1150 as the some may be amended, interpreted or clarified.
Purchaser shall retain all Verbal LOA tapes and transcripts and
Written LOAs used and promptly make the originals available upon the
request of Frontier, a LEC or any regulatory agency.
2. Purchaser agrees that a Verbal LOA may be used to presubscribe a
prospective End-User to Frontier, but that the Verbal LOA will not be
accepted by Frontier as documentation with respect to any PIC or
"slamming" claims. Except as it may otherwise agree in writing,
Frontier is not obligated to "work? PIC disputes with respect to
"slamming" or similar claims from EndUsers or prospective End-Users.
Frontier will refer LEC inquiries, and pass through any LEC charges
imposed on Frontier for such claims, directly to Purchaser, including
without limitation, Primary Interexchange Carrier charges or any other
charges and penalties imposed by a LEC or regulatory agency, plus and
additional amount equal to such charges and penalties as an
administration fee (collectively, "PIC Charges"), with respect to such
claims' PIC Charges will be billed to Purchaser periodically on an
Invoice. Verbal LOAs and Written LOAs are collectively referred to as
"LOAs". Purchaser shall defend and Indemnity Frontier against any and
all claims, including without limitation, any End-User, LEC or
regulatory agency claims (including "slamming claims?), arising from
or related to Purchaser's use or failure to use or provide valid LOAS.
8
<PAGE>
Exhibit D Page I of I
Dedicated Carrier Termination Schedule
Unless otherwise stated, domestic calls are measured in 6 second increments
after a 6 second minimum and international calls in 6 second increments after a
30 second minimum.
Dedicated Termination Service:
1. For domestic and international traffic (including Directory Assistance
Transport) originating from Purchasers switch, Purchaser shall pay the
applicable rates set out in the attached pricing schedules.
2. Each DS-1 circuit interconnecting Purchaser to one of the Frontier POPs set
out in the attached Network Interconnections Schedule has a monthly minimum
usage requirement of 100,000 minutes. Frontier may add or delete a POP at
any time upon written notice. If a DS-1 circuit experiences a minimum
shortfall over two consecutive Billing Cycles, Frontier YAII provide
Purchaser with written notice of such fact and of Frontier's intent to
disconnect the under-minimum circuit within thirty (30) days if the minimum
is not attained by the Billing Cycle commencing after the date the notice
is received. Purchaser shall reimburse Frontier for any termination fees or
charges paid by Frontier to the circuit provider for early disconnection of
such circuit.
3. Purchaser shall be responsible, at its sole expense, for all ordering of,
and charges for, dedicated facilities and equipment required to maintain
access, interconnection and interface Wth Frontier's equipment and network
except in those instances that Purchaser has obtained the prior approval of
Frontier.
9
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D (a)
Page 1 of 6
CARRIER DOMESTIC TERMINATION SERVICE
<TABLE>
<CAPTION>
F.O.B. F.O.B.
Boston Dallas
New York Denver
Philadelphia
Rochester
Washington
NORTHEAST SOUTHWEST
LATA CITY STATE RPM RPM
<S> <C> <C> <C> <C>
120 Portland ME $* $*
122 Nashua NH $* $*
124 Burlington VT $* $*
126 Springfield MA $* $*
128 Boston MA $* $*
130 Providence RI $* $*
132 New York City NY $* $*
133 Poughkepsie NY $* $*
134 Albany NY $* $*
136 Syracuse NY $* $*
138 Binghamton NY $* $*
140 Buffalo NY $* $*
220 Atlantic City NJ $* $*
222 Camden NJ $* $*
224 Newark NJ $* $*
226 Harrisburg PA $* $*
228 Philadelphia PA $* $*
230 Altoona PA $* $*
232 Scranton PA $* $*
234 Pittsburgh PA $* $*
236 Washington DC $* $*
238 Baltimore MD $* $*
240 Hagerstown MD $* $*
242 Salisbury MD $* $*
244 Roanoke VA $* $*
246 Fredericksburg VA $* $*
248 Richmond VA $* $*
250 Lynchburg VA $* $*
252 Norfolk VA $* $*
254 Charleston WV $* $*
256 Wheeling WV $* $*
320 Cleveland OH $* $*
</TABLE>
BILLING INCREMENTS: 6 SECOND INITIAL/6 SECOND INCREMENTS
10
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D (a)
Page 2 of 6
Carrier Domestic Termination Service
<TABLE>
<CAPTION>
FOB FOB
Boston Dallas
New York Denver
Philadelphia
Rochester
Washington
NORTHEAST SOUTHWEST
LATA CITY STATE RPM RPM
<S> <C> <C> <C> <C>
322 Youngstown OH S* S*
324 Columbus OH S* S*
325 Akron OH S* S*
326 Toledo OH S* S*
328 Dayton OH S* S*
330 Evansville IN S* S*
332 South Bend IN S* S*
334 Fort Wayne IN S* S*
336 Indianapolis IN S* S*
338 Vincennes IN S* S*
340 Detroit MI S* S*
342 Marquetta MI S* S*
344 Saginaw MI S* S*
346 lansing MI S* S*
348 Grand Rapids MI S* S*
350 Green Bay WI S* S*
352 Eau Claire WI S* S*
354 Madison WI S* S*
356 Milwaukee WI S* S*
358 Chicago IL S* S*
360 Rockford IL S* S*
362 Cairo / Mound City IL S* S*
364 Sterling/ Dekalb IL S* S*
366 Bloomington IL S* S*
368 Peoria IL S* S*
370 Champ-Urbana IL S* S*
374 Springfield IL S* S*
376 Quincy IL S* S*
420 Asheville NC S* S*
422 Charlotte NC S* S*
424 Greensboro NC S* S*
426 Raleigh NC S* S*
428 Wilmington NC S* S*
430 Greenville SC S* S*
</TABLE>
Billing Increments: 6 second inital/6 second increments
11
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D (a)
Page 3 of 6
CARRIER DOMESTIC TERMINATION SERVICE
<TABLE>
<CAPTION>
FOB FOB
Boston Dallas
New York Denver
Philadelphia
Rochester
Washington
NORTHEAST SOUTHWEST
LATA CITY STATE RPM RPM
<S> <C> <C> <C> <C>
432 Florence SC $* $*
434 Columbia SC $* $*
436 Charleston SC $* $*
438 Atlanta GA $* $*
440 Savannah GA $* $*
442 Agusta GA $* $*
444 Albany GA $* $*
446 Macon GA $* $*
448 Pensacola FL $* $*
450 Panama City FL $* $*
452 Jacksonville FL $* $*
454 Gainesville FL $* $*
456 Daytona Beach FL $* $*
458 Orlando FL $* $*
460 Miami FL $* $*
462 Louisville KY $* $*
464 Madisonville KY $* $*
466 Lexington KY $* $*
468 Memphis TN $* $*
470 Nashville TN $* $*
472 Chattanooga TN $* $*
474 Knoxville TN $* $*
476 Birmingham AL $* $*
477 Huntsville AL $* $*
478 Montgomery AL $* $*
480 Mobile AL $* $*
482 Jackson MS $* $*
484 Gulfport MS $* $*
486 Shreveport LA $* $*
488 Lake Charles LA $* $*
490 New Orleans LA $* $*
492 Baton Rouge LA $* $*
520 St. Louis MO $* $*
521 Jefferson City MO $* $*
</TABLE>
BILLING INCREMENTS: 6 SECOND INITAL/6 SECOND INCREMENTS
12
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D (a)
Page 4 of 6
CARRIER DOMESTIC TERMINATION SERVICE
<TABLE>
<CAPTION>
FOB FOB
Boston Dallas
New York Denver
Philadelphia
Rochester
Washington
NORTHEAST SOUTHWEST
LATA CITY STATE RPM RPM
<S> <C> <C> <C> <C>
522 Springfield MO $* $*
524 Kansas City MO $* $*
526 Fort Smith AR $* $*
528 Little Rock AR $* $*
530 Pine Bluff AR $* $*
532 Wichita KS $* $*
534 Topeka KS $* $*
536 Oklahoma City OK $* $*
538 Tulsa OK $* $*
540 El Paso TX $* $*
542 Midland TX $* $*
544 Lubbock TX $* $*
546 Amarillo TX $* $*
548 Wichita Falls TX $* $*
550 Abilene TX $* $*
552 Dallas TX $* $*
554 Longview TX $* $*
556 Waco TX $* $*
558 Austin TX $* $*
560 Houston TX $* $*
562 Beaumont TX $* $*
564 Corpus Christi TX $* $*
566 San Antonio TX $* $*
568 Harlingen TX $* $*
570 Bryan TX $* $*
620 Rochester MN $* $*
620 Duluth MN $* $*
626 St. Cloud MN $* $*
628 Minneapolis MN $* $*
630 Sioux City IA $* $*
632 Des Moines IA $* $*
634 Davenport IA $* $*
635 Cedar Rapids IA $* $*
636 Fargo ND $* $*
</TABLE>
BILLING INCREMENTS: 6 SECOND INITIAL/6 SECOND INCREMENTS
13
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D (a)
Page 5 of 6
CARRIER DOMESTIC TERMINATION SERVICE
<TABLE>
<CAPTION>
F.O.B. F.O.B.
Boston Dallas
New York Dever
Philadelphia
Rochester
Washington
NORTHEAST SOUTHWEST
LATA CITY STATE RPM RPM
<S> <C> <C> <C> <C>
638 Bismarck ND $* $*
640 Sioux Falls SD $* $*
644 Omaha NE $* $*
646 Grand Island NE $* $*
648 Helena MT $* $*
650 Billings MT $* $*
652 Boise ID $* $*
654 Cheyenne WY $* $*
656 Denver CO $* $*
658 Colorado Springs CO $* $*
660 Salt Lake City UT $* $*
664 Albuquerque NM $* $*
666 Phoenix AZ $* $*
668 Tucson AZ $* $*
670 Eugene OR $* $*
672 Portland OR $* $*
674 Seattle WA $* $*
676 Spokane WA $* $*
720 Reno NV $* $*
721 Las Vegas NV $* $*
722 San Francisco CA $* $*
724 Redding/Chico CA $* $*
726 Sacramento CA $* $*
728 Fresno CA $* $*
730 Los Angeles CA $* $*
732 San Diego CA $* $*
734 Bakersfield CA $* $*
736 Monterey/Salin. CA $* $*
738 Stockton CA $* $*
740 S. Luis Obispo CA $* $*
820 Puerto Rico PR $* $*
822 Virgin Islands $* $*
832 Alaska AK $* $*
834 Hawaii HI $* $*
</TABLE>
BILLING INCREMENTS: 6 SECOND INITAL/6 SECOND INCREMENTS
14
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D (a)
Page 6 of 6
CARRIER DOMESTIC TERMINATION SERVICE
<TABLE>
<CAPTION>
F.O.B. F.O.B.
Boston Dallas
New York Denver
Philadelphia
Rochester
Washington
NORTHEAST SOUTHWEST
LATA CITY STATE RPM RPM
<S> <C> <C> <C> <C>
920 Hartford CT $* $*
921 Fishers Island NY $* $*
922 Cincinnati OH $* $*
923 Lima OH $* $*
924 Erie PA $* $*
927 Harrisonburg VA $* $*
928 Charlottesvl VA $* $*
929 Edinburg VA $* $*
930 Eppes Fork NC $* $*
932 Bluefield WV $* $*
937 Richmond IN $* $*
938 Terre Haute IN $* $*
939 Fort Myers FL $* $*
949 Fayetteville NC $* $*
951 Rocky Mount NC $* $*
952 Tampa FL $* $*
953 Tallahassee FL $* $*
955 Dothan AL $* $*
956 Kingsport TN $* $*
958 Lincoln NE $* $*
960 Coeur D'Alene ID $* $*
961 San Angelo TX $* $*
963 Kalispell MT $* $*
973 Palm Springs CA $* $*
974 Rochester NY $* $*
976 Matoon IL $* $*
977 Galesburg IL $* $*
978 Olney IL $* $*
980 Tsaile AZ $* $*
981 Monument Valley UT $* $*
</TABLE>
BILLING INCREMENTS: 6 SECOND INITAL/6 SECOND INCREMENTS
15
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D(b)
Page 1 of 4
CARRIER TERMINATION INTERNATIONAL SERVICE
<TABLE>
<S> <C> <C> <C> <C> <C>
93 Afganistan $* 238 Cape Verde $*
355 Albania $* 897 Cayman Islands $*
213 Algeria $* 236 Central Africa. $*
684 Amer Somoa $* 235 Chad $*
376 Andorra $* 56 Chile $*
244 Angola $* 86 China Prc $*
891 Anguilla $* 672 Christmas Island $*
672 Antarctica - Casey $* 61 Cocos-Kelling Island $*
672 Antarctica - Scott $* 57 Columbia $*
892 Antigua $* 242 Congo $*
54 Argentina $* 682 Cook Island $*
374 Armenia $* 506 Costa Rica $*
297 Aruba $* 385 Croatia $*
247 Ascension Islands $* 53 Cuba $*
61 Australia $* 357 Cyprus $*
43 Austria $* 420 Czech $*
994 Azerbaijan $* 45 Denmark $*
893 Bahamas $* 246 Diego Garcia $*
973 Bahrain $* 253 Djibouti $*
880 Bangladesh $* 898 Dominica $*
894 Barbados $* 899 Dominican Republic $*
375 Belarus $* 593 Ecuador $*
32 Belguim $* 20 Egypt $*
501 Belize $* 503 El Salvador $*
229 Benin $* 240 Equatorial Guinea $*
895 Bermuda $* 291 Eritrea $*
975 Bhutan $* 372 Estonia $*
591 Bolivia $* 251 Ethiopia $*
387 Bosnia & Herzegovina $* 298 Faeroe Islands $*
267 Botswana $* 500 Falkland Islands $*
55 Brazil $* 679 Fiji Is $*
896 British Virg Islands $* 358 Finland $*
673 Brunei $* 33 France $*
359 Bulgaria $* 594 French Guiana $*
226 Burkino Faso $* 689 French Polynesia $*
95 Burma/Myanmar $* 241 Gabon $*
257 Burundi $* 220 Gambia $*
855 Cambodia $* 995 Georgia $*
237 Cameroon $* 49 Germany $*
34 Canary Island $* 233 Ghana $*
</TABLE>
BILLING INCREMENTS: 30 SECOND INITIAL/6 SECOND INCREMENTS
16
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D(b)
Page 2 of 4
CARRIER TERMINATION INTERNATIONAL SERVICE
<TABLE>
<S> <C> <C> <C> <C> <C>
350 Gibraltar $* 961 Lebanon $*
686 Gilbert Island $* 266 Lesotho $*
30 Greece $* 231 Liberia $*
299 Greenland $* 218 Libya $*
900 Grenada $* 41 Liechtenstein $*
590 Guadeloupe $* 370 Lithuania $*
671 Guam $* 352 Luxembourg $*
53 Guantanamo Bay $* 853 Macao $*
502 Guatemala $* 389 Macedonia $*
224 Guinea $* 261 Madagascar $*
245 Guinea Bissau $* 265 Malawi $*
592 Guyana $* 60 Malaysia $*
509 Haiti $* 960 Maldives $*
504 Honduras $* 223 Mali Republic $*
852 Hong Kong, China $* 356 Malta $*
36 Hungary $* 692 Marshal Islands $*
354 Iceland $* 596 Martinique $*
91 India $* 222 Mauritania $*
62 Indonesia $* 230 Mauritius $*
871 Inmarsat(AOR) $* 269 Mayotte (Comoros) $*
873 Inmarsat(IOR) $* 691 Micronesia $*
872 Inmarsat(POR) $* 373 Moldava $*
874 Inmarsat(WAT) $* 377 Monaco $*
98 Iran $* 976 Mongolia $*
964 Iraq $* 902 Montserrat $*
353 Ireland $* 212 Morocco $*
972 Israel $* 258 Mozambique $*
39 Italy $* 264 Namibia $*
225 1 Ivory Coast (Cote' $* 674 Nauru $*
D'Ivoire)
901 Jamaica $* 977 Nepal $*
81 Japan $* 599 Netherland Antilles $*
962 Jordan $* 31 Netherlands $*
7 Kazakhstan $* 903 Nevis $*
254 Kenya $* 687 New Caledonia $*
686 Kiribati $* 64 New Zealand $*
850 Korea (North) $* 505 Nicaragua $*
82 Korea (South) $* 227 Niger Republic $*
965 Kuwait $* 234 Nigeria $*
7 Kyrgyzstan $* 683 Niue Island $*
856 Laos $* 672 Norfolk Island $*
371 Latvia $* 47 Norway $*
</TABLE>
BILLING INCREMENTS: 30 SECOND INITIAL/6 SECOND INCREMENTS
17
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D(b)
Page 3 of 4
CARRIER TERMINATION INTERNATIONAL SERVICE
<TABLE>
<S> <C> <C> <C> <C> <C>
968 Oman $* 268 Swaziland $*
92 Pakistan $* 46 Sweden $*
680 Palau Republic $* 41 Switzerland $*
507 Panama $* 963 1 Syria $*
675 Papua New Guinea $* 886 Taiwan $*
595 Paraguay $* 7 Tajikistan $*
51 Peru $* 255 Tanzania $*
63 Philippines $* 66 Thailand $*
48 Poland $* 228 Togo $*
351 Portugal $* 676 Tonga $*
974 Qatar $* 907 Trinidad/Tobago $*
262 Reunion Island $* 216 Tunisia $*
40 Romania $* 90 Turkey $*
7 Russia $* 993 Turkmenistan $*
250 Rwanda $* 908 Turks/Caicos Islands $*
670 Saipan $* 688 Tuvalu $*
378 San Marino $* 256 Uganda $*
239 Sao Tome $* 380 Ukraine $*
966 Saudi Arabia $* 971 United Arab Emirates $*
221 Senegal $* 44 United Kingdom $*
248 Seychelles Island $* 598 Uruguay $*
232 Siera Leone $* 999 Uzbekistan $*
65 Singapore $* 678 Vanuatu/New Hebdi $*
421 Slovak $* 379 Vatican City $*
386 Slovenia $* 58 Venezuela $*
677 Solomon lsland(S) $* 84 Vietnam $*
252 Somalia $* 681 Wallis/Fufuna $*
27 South Africa $* 685 Western Samoa $*
34 Spain $* 967 Yemen $*
94 Sri Lanka $* 381 Yugoslavia/Serbia $*
290 ST. Helena $* 243 Zaire $*
904 ST. Kitts $* 260 Zambia $*
905 ST. Lucia $* 259 Zanzibar $*
508 ST. Pierre $* 263 Zimbabwe $*
906 ST. Vincent $* $*
249 Sudan $* $*
597 Suriname $* $*
</TABLE>
BILLING INCREMENTS: 30 SECOND INITIAL/6 SECOND INCREMENTS
18
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D(b)
Page 4 of 4
CARRIER TERMINATION INTERNATIONAL SERVICE
<TABLE>
<S> <C> <C> <C>
521 MEXICO 1 $* $*
522 MEXICO 2 $* $*
523 MEXICO 3 $* $*
524 MEXICO 4 $* $*
525 MEXICO 5 $* $*
526 MEXICO 6 $* $*
527 MEXICO 7 $* $*
528 MEXICO 8 $* $*
</TABLE>
<TABLE>
<S> <C> <C>
204 Manitoba $*
250 British Columbia $*
306 Saskatchewan $*
403 Alberta $*
416 Ontario $*
418 Quebec $*
506 New Brunswick $*
514 Quebec $*
519 Ontario $*
604 British Columbia $*
613 Ontario $*
705 Ontario $*
709 Newfoundland $*
807 Ontario $*
819 Quebec $*
902 Nova Scotia/Prnc Edw Isl $*
905 Ontario $*
</TABLE>
BILLING INCREMENTS: 30 SECOND INITIAL/6 SECOND INCREMENTS
19
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D(c)
Page 1 of 1
Gateway Carrier Service
Directory Assistance
Purchaser shall receive the rates which correspond to the $* level.
Commitment $*
RATE PER CALL
-------------
Contiguous US $*
------------- --
*Account dollar commitment level and subsequent Interstate minute of use
discounts are based on aggregate minute based usage services excluding operator
services. AD usage must be billed off of the some Frontier billing platform and
billed in the same invoice cycle.
20
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D(d)
Page 1 of 6
CARRIER 800 TRANSPORT SERVICE
F.O.B. F.O.B.
Boston Dallas
New York Denver
Philadelphia
Rochester
Washington 1
<TABLE>
<CAPTION>
NORTHEAST SOUTHWEST
LATA CITY STATE RPM RPM
<S> <C> <C> <C> <C>
120 Portland ME $* $*
122 Nashua NH $* $*
124 Burlington VT $* $*
126 Springfield MA $* $*
128 Boston MA $* $*
130 Providence RI $* $*
132 New York City NY $* $*
133 Poughkeepsie NY $* $*
134 Albany NY $* $*
136 Syracuse NY $* $*
138 Binghamton NY $* $*
140 Buffalo NY $* $*
220 Atlantic City NJ $* $*
222 Camden NJ $* $*
224 Newark NJ $* $*
226 Harrisburg PA $* $*
228 Philadelphia PA $* $*
230 Altoona PA $* $*
232 Scranton PA $* $*
234 Pittsburgh PA $* $*
236 Washington DC $* $*
238 Baltimore MD $* $*
240 Hagerstown MD $* $*
242 Salisbury MD $* $*
244 Roanoke VA $* $*
246 Fredericksburg VA $* $*
248 Richmond VA $* $*
250 Lynchburg VA $* $*
252 Norfolk VA $* $*
254 Charlestown WV $* $*
256 Wheeling WV $* $*
320 Cleveland OH $* $*
322 Youngstown OH $* $*
324 Columbus OH $* $*
</TABLE>
Billing Increments: Domestic & Domestic Off-Shore = 6 second initial/6 second
increments
Canada = 30 second initial/6 second increments
21
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D (d)
Page 2 of 6
CARRIER 800 TRANSPORT SERVICE
F.O.B. F.O.B.
Boston Dallas
New York Denver
Philadelphia
Rochester
Washington
[CAPTION]
<TABLE>
NORTHEAST SOUTHWEST
LATA CITY STATE RPM RPM
<S> <C> <C> <C> <C>
325 Akron OH $* $*
326 Toledo OH $* $*
328 Dayton OH $* $*
330 Evansville IN $* $*
332 South Bend IN $* $*
334 Fort Wayne IN $* $*
336 Indianapolis IN $* $*
338 Vincennes IN $* $*
340 Detroit ml $* $*
342 Marquette ml $* $*
344 Saginaw ml $* $*
346 Lansing ml $* $*
348 Grand Rapids ml $* $*
350 Green Bay WI $* $*
352 Eau Claire WI $* $*
354 Madison WI $* $*
356 Milwaukee WI $* $*
358 Chicago IL $* $*
360 Rockford IL $* $*
362 Cairo/Mound Cty IL $* $*
364 Sterling/Dekalb IL $* $*
366 Bloomington IL $* $*
368 Peoria IL $* $*
370 Champ-Urbana IL $* $*
374 Springfield IL $* $*
376 Quincy IL $* $*
420 Asheville NC $* $*
422 Charlotte NC $* $*
424 Greensboro NC $* $*
426 Raleigh NC $* $*
428 Wilmington NC $* $*
430 Greenville SC $* $*
432 Florence SC $* $*
434 Columbia SC $* $*
</TABLE>
Billing Increments: Domestic & Domestic Off -Shore = 6 second ininal/6 second
Increments
Canada = 30 second initial/6 second Increments
22
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D(d)
Page 3 of 6
CARRIER 800 TRANSPORT SERVICE
F.O.B. F.O.B.
Boston Dallas
New York Denver
Philadelphia
Rochester
Washington
<TABLE>
<CAPTION>
NORTHEAST SOUTHWEST
LATA CITY STATE RPM RPM
<S> <C> <C> <C> <C>
436 Charleston SC $* $*
438 Atlanta GA $* $*
440 Savannah GA $* $*
442 Augusta GA $* $*
444 Albany GA $* $*
446 Macon GA $* $*
448 Pensacola FL $* $*
450 Panama City FL $* $*
452 Jacksonville FL $* $*
454 Gainesville FL $* $*
456 Daytona Beach FL $* $*
458 Orlando FL $* $*
460 Miami FL $* $*
462 Louisville KY $* $*
464 Madisonville KY $* $*
466 Lexington KY $* $*
468 Memphis TN $* $*
470 Nashville TN $* $*
472 Chattanooga TN $* $*
474 Knoxville TN $* $*
476 Birmingham AL $* $*
477 Huntsville AL $* $*
478 Montgomery AL $* $*
480 Mobile AL $* $*
482 Jackson Ms $* $*
484 GulfiPort Ms $* $*
486 Shreveport LA $* $*
488 Lake Charles LA $* $*
490 New Orleans LA $* $*
492 Baton Rouge LA $* $*
520 St. Louis MO $* $*
521 Jefferson City MO $* $*
522 Springfield MO $* $*
524 Kansas City MO $* $*
</TABLE>
Billing Increments: Domestic & Domestic Off-Shore = 6 second inffial/6 second
increments
Canada = 30 second initial/6 second increments
23
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT D(d)
Page 4 of 6
CARRIER 800 TRANSPORT SERVICE
F.O.B. F.O.B.
Boston Dallas
New York Denver
Philadelphia
Rochester
Washington
<TABLE>
<CAPTION>
NORTHEAST SOUTHWEST
LATA CITY STATE RPM RPM
<S> <C> <C> <C> <C>
526 Fort Smith AR $* $*
528 Little Rock AR $* $*
530 Pine Bluff AR $* $*
532 Wichita KS $* $*
534 Topeka KS $* $*
536 Oklahoma City OK $* $*
538 Tulsa OK $* $*
540 El Paso TX $* $*
542 Midland TX $* $*
544 Lubbock TX $* $*
546 Amarillo TX $* $*
548 Wichita Falls TX $* $*
550 Abilene TX $* $*
552 Dallas TX $* $*
554 Longview TX $* $*
556 Waco TX $* $*
558 Austin TX $* $*
560 Houston TX $* $*
562 Beaumont TX $* $*
564 Corpus Cristi TX $* $*
566 San Antonio TX $* $*
568 Harlingen TX $* $*
570 Bryan TX $* $*
620 Rochester MN $* $*
624 Duluth MN $* $*
626 St.Cloud MN $* $*
628 Minneapolis MN $* $*
630 Sioux City IA $* $*
632 Des Moines IA $* $*
634 Davenport IA $* $*
635 Cedar Rapids IA $* $*
636 Fargo ND $* $*
638 Bismarck ND $* $*
640 Sioux Falls SD $* $*
</TABLE>
Billing Increments: Domestic & Domestic Off-Shore = 6 second initial/6 second
increments
Canada = 30 second initial/6 second Increments
24
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D(d)
Page 5 of 6
CARRIER 800 TRANSPORT SERVICE
F.O.B F.O.B
Boston Dallas
New York Denver
Philadelphia
Rochester
Washington 1
<TABLE>
<CAPTION>
NORTHEAST SOUTHWEST
LATA CITY STATE RPM RPM
<S> <C> <C> <C> <C>
644 Omaha NE $* $*
646 Grand Island NE $* $*
648 Helena MT $* $*
650 Billings MT $* $*
652 Boise ID $* $*
654 Cheyenne WY $* $*
656 Denver CO $* $*
658 Colorado Springs CO $* $*
660 Salt Lake Cty UT $* $*
664 Albuquerque NM $* $*
666 Phoenix AZ $* $*
668 Tucson AZ $* $*
670 Eugene OR $* $*
672 Portland OR $* $*
674 Seattle WA $* $*
676 Spokane WA $* $*
720 Reno NV $* $*
721 Los Vegas NV $* $*
722 San Francisco CA $* $*
724 Redding/Chico CA $* $*
726 Sacramento CA $* $*
728 Fresno CA $* $*
730 Los Angeles CA $* $*
732 San Diego CA $* $*
734 Bakersfield CA $* $*
736 Monterey/Salin. CA $* $*
738 Stockton CA $* $*
740 S. Luis Obispo CA $* $*
920 Hartford CT $* $*
921 Fishers Island NY $* $*
922 Cincinnati OH $* $*
923 Lima OH $* $*
924 Erie PA $* $*
927 Harrisonburg VA $* $*
</TABLE>
Billing Increments: Domestic L Domestic Off - Shore - 6 second
initial/6 second increments
Canada = 30 second initial/6 second increments
25
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit D(d)
Page 6 of 6
CARRIER 800 TRANSPORT SERVICE
F.O.B. F.O.B.
Boston Dallas
New York Denver
Philadelphia
Rochester
Washington
<TABLE>
<CAPTION>
NORTHEAST SOUTHWEST
LATA CITY STATE RPM RPM
<S> <C> <C> <C> <C>
928 Charlottesvi VA $* $*
929 Edinburg VA $* $*
930 Eppes Fork NC $* $*
932 Bluefield WV $* $*
937 Richmond IN $* $*
938 Terre Haute IN $* $*
939 Fort Myers FL $* $*
949 Fayetteville NC $* $*
951 Rocky Mount NC $* $*
952 Tampa FL $* $*
953 Tallahassee FL $* $*
955 Dothan AL $* $*
956 Kingsport TN $* $*
958 Lincoln NE $* $*
960 Coeur D'Alene ID $* $*
961 San Angelo TX $* $*
963 Kalispell MT $* $*
973 Palm Springs CA $* $*
974 Rochester NY $* $*
976 Matoon IL $* $*
977 Galesburg IL $* $*
978 Olney IL $* $*
980 Tsaile AZ $* $*
Monument Valley UT $* $*
</TABLE>
Off-Shore: Alaska Origination $* Hawaii Origination $* PR/USVI Origination
$*
Canada: Origination $*
Note: Frontier bills the Carrier for all calls completed to their switch,
regardless if the call is completed to the called party.
Billing Increments: Domestic & Domestic Off-Shore = 6 second initial/6 second
increments
Canada = 30 second initial/6 second Increments
26
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit E
Page I of 1
SWITCHED OUTBOUND SERVICES SCHEDULE
(NATIONAL ORIGINATION SERVICE)
Unless otherwise stated, (i) domestic switched and dedicated calls (inbound and
outbound) are measured in 6 second increments with a 6 second minimum, and (ii)
international switched and dedicated calls are measured in 6 second increments
after a 30 second minimum.
I . For domestic, offshore and international traffic, Purchaser shall pay the
rates set out in the attached pricing schedules. If in any given month more
than 15% of Purchasers total domestic switched traffic originates from, or
terminates to, non-RBOC/GTE regions, Frontier may apply a $* per minute
surcharge to all such traffic in excess of the 15%.
27
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit E(a)
Page 1 of 1
NATIONAL ORIGINATION SERVICE
SWITCHED OUTBOUND SERVICE (I+)
PURCHASER SHALL RECEIVE THE RATES WHICH CORRESPOND TO THE $1 OOK LEVEL
<TABLE>
<CAPTION>
INTERSTATE Commitment, or $* $* $* $*
Billed Minutes N/A 750,00 3,750,000+ 7,500,000+
RATE RATE RATE RATE
Contiguous US $* $* $* $*
<S> <C> <C> <C> <C> <C>
INTRASTATE
Alabama $* Nebraska $*
Arizona $* Nevada $*
Arkansas $* New Hampshire $*
California $* New Jersey $*
Colorado $* New Mexico $*
Connecticut $* New York $*
Delaware $* North Carolina $*
Florida $* North Dakota $*
Georgia $* Ohio $*
Idaho $* Oklahoma $*
Illinois $* Oregon $*
Indiana $* Pennsylvania $*
Iowa $* Rhode Island $*
Kansas $* South Carolina $*
Kentucky $* South Dakota $*
Louisiana $* Tennessee $*
Maine $* Texas $*
Maryland $* Utah $*
Massachusetts $* Vermont $*
Michigan $* Virginia $*
Minnesota $* Washington $*
Mississippi $* West Virginia $*
Missouri $* Wisconsin $*
Montana $* Wyoming $*
</TABLE>
OFF-SHORE $* (Termination to Alaska, Hawaii, USVI/PR)
DIRECTORY ASSISTANCE $* per call (Domestic & Canacrian)
BILLING INCREMENTS 6 second initial/6 second increments
Account dollar commitment level and subsequent Interstate minute of use
discounts are based on aggregate minute based usage services excluding operator
services. All usage must be billed off of the same Frontier billing platform and
billed in the same invoice cycle.
28
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit F
Page 1 of 1
INBOUND 800 SERVICES SCHEDULE
(NATIONAL ORIGINATION SERVICE)
1. 800 Number Requirements.
A. In order to protect the integrity of its network Frontier may, without
liability, temporarily block any 800 Number having usage surges.
Frontier agrees to promptly notify Purchase,- after blockage has
occurred.
B. If usage of an 800 Number impacts Frontier in such a manner that the
unbillable (non-completed) calls for such 800 Number in any month -are
greater than 7% of the billable (completed) calls for such 800 Number
in that month, Frontier Will notify Purchaser of such and Purchaser
shall have thirty (30) days to rectify. If Purchaser fails to remedy
the unbillable issue within thirty (30) days, Frontier may charge
Purchaser a non-discountable $* charge for each unbillable call in
that month.
C. At Purchase(s written request and to the extent available to Frontier,
800 Directory Assistance is available for Frontier 800 Numbers only at
the charge set out in Exhibit B. Due to the fact that 800 Directory
Assistance is provided through an arrangement with a third party, the
provision of 800 Directory Assistance by Frontier is subject to the
policies and procedures promulgated from time to time by such third
party. Purchaser understands that any Frontier 800 Number listed with
800 Directory Assistance is not published in any written directory,
but is only available on a call-in basis.
D. The transfer of 800 Numbers to another carrier is subject to the
Guidelines and the Frontier policies and procedures for 800/888
number/traffic transfers in effect at the time of the requested
transfer.
2. Rates for Inbound Services.
Purchaser shall pay the rates set out in the attached pricing schedules. If in
any given month more than 15% of Purchasers total domestic switched 800 Number
traffic originates from, or terminates to, non-RBOC/GTE regions, Frontier may
apply a $* per minute surcharge to all such traffic in excess of the 15%.
29
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit F(a)
Page 1 of 1
NATIONAL ORIGINATION SERVICE
SWITCHED 800/888 INBOUND SERVICE
PURCHASER SHALL RECEIVE THE RATES WHICH CORRESPOND TO THE $* LEVEL
<TABLE>
<CAPTION>
INTERSTATE Commitment, or $* $* $* $*
Billed Minutes N/A 750,000 3,500,000+ 7,250,000+
RATE RATE RATE RATE
Contiguous US $* $* $* $*
<S> <C> <C> <C> <C> <C>
INTRASTATE
Alabama $* Nebraska $*
Arizona $* Nevada $*
Arkansas $* New Hampshire $*
California $* New Jersey $*
Colorado $* New Mexico $*
Connecticut $* New York $*
Delaware $* North Carolina $*
Florida $* North Dakota $*
Georgia $* Ohio $*
Idaho $* Oklahoma $*
Illinois $* Oregon $*
Indiana $* Pennsylvania $*
Iowa $* Rhode Island $*
Kansas $* South Carolina $*
Kentucky $* South Dakota $*
Louisiana $* Tennessee $*
Maine $* Texas $*
Maryland $* Utah $*
Massachusetts $* Vermont $*
Michigan $* Virginia $*
Minnesota $* Washington $*
Mississippi $* West Virginia $*
Missouri $* Wisconsin $*
Montana $* Wyoming $*
</TABLE>
OFF-SHORE $* Alaska Origination
$* Hawaii Origination
$* PR/USVI Origination
CANADA $* Origination
BILLING INCREMENTS Domestic & Off-Shore - 6 second initial/6 second increments
Canada - 30 second initial/6 second increments
Account dollar commitment level and subsequent Interstate minute of use
discounts are based on aggregate minute based usage services excluding operator
services. All usage must be billed off of the same Frontier billing platform and
billed in the same invoice cycle.
30
<PAGE>
Exhibit G
Page 1 of 1
INTERNATIONAL SERVICES SCHEDULE
(NATIONAL ORIGINATION SERVICE)
The rates and discount credits described in this Schedule and any attachments
hereto are in lieu of any standard volume discounts and any promotional rates or
discounts that may from time to time be offered by Frontier for the Services.
Unless otherwise stated, international calls are measured in 6 second increments
after a 30 second minimum.
1. For non-calling card switched and dedicated International Services,
Purchaser shall pay the international rates set out in the attached
pricing schedules.
2. For international Directory Assistance Services, if available,
Purchaser shall pay the applicable standard Frontier resale rates in
effect when calls are made.
31
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit G (a)
Page 1 of 4
NATIONAL ORIGINATION SERVICE (NOS)
SWITCHED INTERNATIONAL (OUT-OF FRANCHISE)
<TABLE>
<S> <C> <C> <C> <C> <C>
93 Afghanistan $* 238 Cape Verde $*
355 Albania $* 897 Cayman Island $*
213 Algeria $* 236 Central Africa $*
684 1 Amer Somoa $* 235 Chad $*
376 Andorra $* 56 Chile $*
244 Angola $* 86 China Prc $*
891 Anguilla $* 672 Christmas Island $*
672 Antarctica - Casey $* Cocos-Kelling Island $*
672 Antarctica - Scott $* 57 Columbia $*
892 Antigua $* 242 Congo $*
54 Argentina $* 682 Cook Island $*
374 Armenia $* 506 Costa Rica $*
297 Aruba $* 385 Croatia $*
247 Ascension Islands $* 53 Cuba $*
61 Australia $* 357 Cyprus $*
43 Austria $* 420 Czer-h $*
994 Azerbaijan $* 45 Denmark $*
893 Bahamas $* 246 Diego Garcia $*
973 Bahrain $* 253 Djibouti $*
880 Bangladesh $* 898 Dominica $*
894 Barbados $* 899 Dominican Republic $*
375 Belarus $* 593 Ecuador $*
32 Belgium $* 20 Egypt $*
501 Belize $* 503 El Salvador $*
229 Benin $* 240 Equatorial Guinea $*
895 Bermuda $* 291 Eritrea $*
975 Bhutan $* 372 Estonia $*
591 Bolivia $* 251 Ethiopia $*
387 1 Bosnia & Herzegovina $* 298 Faeroe Islands $*
267 Botswana $* 500 Falkland Islands $*
55 Brazil $* 679 Fiji Is $*
896 British Virg Island $* 358 Finland $*
673 Brunei $* 33 France $*
359 Bulgaria $* 594 French Guiana $*
226 Burkino Faso $* 689 French Polynesia $*
95 Burma/Myonmar $* 241 Gabon $*
257 Burundi $* 220 Gambia $*
855 Cambodia $* 995 Georgia $*
237 Cameroon $* 49 Germany $*
34 Canary Island $* 233 Ghana $*
</TABLE>
BILLING INCREMENT: 30 SECOND INITIAL/6 SECOND INCREMENTS
32
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit G (a)
Page 2 of 4
NATIONAL ORIGINATION SERVICE (NOS)
SWITCHED INTERNATIONAL (OUT-OF FRANCHISE)
<TABLE>
<S> <C> <C> <C> <C>
350 Gibraltar $* 961 Lebanon $*
686 Gilbert Island $* 266 Lesotho $*
30 Greece $* 231 Liberia $*
299 Greenland $* 218 1 Libya $*
900 Grenada $* 41 Liechtenstein $*
590 Guadeloupe $* 370 Lithuania $*
671 Guam $* 352 Luxembourg $*
53 Guantanamo Bay $* 853 Macao $*
502 Guatemala $* 389 Macedonia $*
224 Guinea $* 261 Madagascar $*
245 Guinea Bissau $* 265 MalamA $*
592 Guyana $* 60 Malaysia $*
509 Haiti $* 960 Maldives $*
504 Honduras $* 223 Mali Republic $*
852 Hong Kong, China $* 356 Malta $*
36 Hungary $* 692 Marshal Islands $*
354 Iceland $* 596 Martinique $*
91 Indid $* 222 Mauritania $*
62 Indonesia $* 230 Mauritius $*
871 Inmarsat (AOR) $* 269 Mayotte Comoros $*
873 Inmarsat (IOR) $* 691 Micronesia $*
872 Inmarsat (POR) $* 373 Moldaya $*
874 Inmarsat (WAT) $* 377 Manaco $*
98 Iran $* 976 Mongolia $*
964 Iraq $* 902 Montserrat $*
353 Ireland $* 212 Morocco $*
972 Israel $* 258 Mozambique $*
39 Italy $* 264 Namibia $*
2-25 Ivory Coast (Cote' D'Ivoire) $* 674 Nauru $*
901 Jamaica $* 977 Nepal $*
81 Japan $* 599 Netherlands Antilles $*
962 Jordan $* 31 Netherlands $*
7 Kazakhstan $* 903 Nevis $*
254 Kenya $* 687 New Caledonia $*
686 Kiribati $* 64 New Zealand $*
850 Korea (North) $* 505 Nicaragua $*
82 Korea (South) $* 227 Niger Republic $*
965 Kuwait $* 234 Nige (ia $*
7 Kyr-qyzstan $* 683 Niue Island $*
856 Laos $* 672 Norfolk Island $*
371 Latvia $* 47 Norway $*
</TABLE>
BILLING INCREMENT: 30 SECOND INITIAL/6 SECOND INCREMENTS
33
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit G(a)
Page 3 of 4
NATIONAL ORIGINATION SERVICE (NOS)
SWITCHED INTERNATIONAL (OUT-OF FRANCHISE)
<TABLE>
<S> <C> <C> <C> <C> <C>
968 Oman $* 268 Swaziland $*
92 Pakistan $* 46 Sweden $*
680 Palau Republic $* 41 Switzerland $*
507 Panama $* 963 Syria $*
675 Papua New Guinea $* 886 Taiwan $*
595 Paraguay $* 7 Tajikistan $*
51 Peru $* 255 Tanzania $*
63 Philippines $* 66 Thailand $*
48 Poland $* 228 Togo $*
351 Portugal $* 676 Tonga $*
974 Qatar $* 907 Trinidad/Tobago $*
262 Reunion Island $* 216 Tunisia $*
40 Romania $* 90 Turkey $*
7 Russia $* 993 Turkmenistan $*
250 Rwanda $* 908 Turks/Caicos Islands $*
670 Saipan $* 688 Tuvalu $*
378 San Marino $* 236 Uganda $*
239 Sao Tome $* 380 Ukraine $*
966 Saudi Arabia $* 971 United Arab Emirates $*
221 Senegal $* 44 United Kingdom $*
248 Seychelles Island $* 598 Uruguay $*
232 Sierra Leone $* 999 Uzbekistan $*
65 Singapore $* 678 Vanuatu/New Hebddi $*
421 Slovak $* 379 Vatican City $*
386 Slovenia $* 58 Venezuela $*
677 Solomon Island(s) $* 84 Vietnam $*
252 Somalia $* 681 Wallis/Futuna $*
27 South Africa $* 685 Western Samoa $*
34 Spain $* 967 Yemen Arab $*
94 Sri Lanka $* 381 Yugoslavia/Serbia $*
290 St. Helena $* 243 Zaire $*
904 St. Kitts $* 260 Zambia $*
905 St. Lucia $* 259 Zanzibar $*
508 St. Pierre $* 263 Zimbabwe $*
906 St. Vincent $*
249 Sudan $*
597 Suriname $*
</TABLE>
BILLING INCREMENT: 30 SECOND INITIAL/6 SECOND INCREMENTS
34
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit G(a)
Page 4 of 4
NATIONAL ORIGINATION SERVICE (NOS)
SWITCHED INTERNATIONAL (OUT-OF FRANCHISE)
am
521 MEXICO 1 * *
522 MEXICO 2 * *
523 MEXICO 3 * *
524 MEXICO 4 * *
525 MEXICO 5 * *
526 MEXICO 6 * *
527 MEXICO 7 * *
MEXICO 8 * *
ALL CANADA $*
BILLING INCREMENT: 30 SECOND INITIAL/6 SECOND INCREMENTS
35
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit H
Page 1 of 4
NETWORK INTERCONNECTION SCHEDULE
FRONTIER POINTS OF PRESENCE
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
AL BRM 205-251 Atlanta $* $*
AL MTG 205-269 Atlanta $* $*
480 AL MBL 205-433 Atlanta $* $*
528 AR LRK 501-320 Dallas $* $*
530 AR PBF 501-534 Dallas $* $*
666 AZ PHX 602-279 Los Angeles $* $*
668 AZ TCN 602-792 Los Angeles $* $*
722 CA SWITCH SITE 415-227 San Francisco $* $*
722 CA OAK 510-839 San Francisco $* $*
722 CA sis 408-971 San Francisco $* $*
726 CA SRT 916-442 San Francisco $* $*
728 CA FRS 209-237 San Francisco $* $*
30 CA SWITCH SITE 213-629 Los Angeles $* $*
730 CA ONT 909462 Los Angeles $* $*
730 CA com 310-604 Los Angeles $* $*
730 CA ELS 310-414 Los Angeles $* $*
730 CA GGV 714-740 Los Angeles $* $*
730 CA SAN 714-540 Los Angeles $* $*
730 CA SHO 818-788 Los Angeles $* $*
730 CA WLA 310-270 Los Angeles $* $*
730 CA ANW 714-491 Los Angeles $* $*
732 CA SDO 619-560 Los Angeles $* $*
734 CA BKR 805-327 Los Angeles $* $*
736 CA SLS 408-422 San Francisco $* $*
738 CA SCK 209-461 San Francisco $* $*
740 CA SLO 805-438 Los Angeles $* $*
97j- CA PLM 619-320 Los Angeles $* $*
656 CO SWITCH SITE 303-860 Denver $* $*
920 CT SMF 203-358 New York $* $*
236 DC SWITCH SITE 202-429 D.C. $* $*
448 FL PEN 904-310 Atlanta $* $*
452 FL JKS 904-355 Tampa $* $*
454 FL GAV 904-377 Tampa $* $*
456 FL DAT 904-258 Tampa $* $*
458 FL OLD 407-849 Tampa $* $*
460 FL MIM 305-530 Tampa $* $*
460 FL WPB 407-355 Tampa $* $*
460 FL FTL 305-316 Tampa $* $*
939 FL FTM 813-275 Tampa $* $*
952 FL SWITCH SITE 813-273 1 Tampa $* $*
</TABLE>
*NOS Dedicated Rates Include applicable back-haul and Network Interconnection
Charges.
36
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit H
Page 2 of 4
NETWORK INTERCONNECTION SCHEDULE
FRONTIER POINTS OF PRESENCE
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
438 GA SWITCH SITE 404-525 Atlanta $* $*
440 GA SAV 912-234 Atlanta $* $*
444 GA ABN 912-439 Atlanta $* $*
632 IA DSM 515-235 Kansas City $* $*
634 IA DVP 319-322 Kansas City $* $*
635 IA CDR 319-294 Kansas City $* $*
652 ID BOI 208-336 Seattle $* $*
358 IL SWITCH SITE 312-782 Chicago $* $*
360 IL RKF 815-962 Chicago $* $*
366 IL BLM 309-828 Chicago $* $*
368 IL PEO 309-676 Chicago $* $*
370 IL CM? 217-351 Chicago $* $*
332 IN SBD 219-234 Chicago $* $*
334 IN FTW 219-482 Chicago $* $*
336 IN INA 317-637 Chicago $* $*
338 IN BLM 812-332 Chicago $* $*
532 KS WIC 316-261 Kansas City $* $*
534 KS TPK 913-224 Kansas City $* $*
462 KY LOU 502-561 Cleveland $* $*
464 KY BWG 502-529 Atlanta $* $*
466 KY LEX 606-252 Cleveland $* $*
486 LA SPL 318-425 Dallas $* $*
488 LA LAF 318-231 Dallas $* $*
490 LA NOS 504-528 Dallas $* $*
126 MA SPG 413-737 Boston $* $*
128 MA SWITCH SITE 617-423 Boston $* $*
238 MD DAL 410-752 D.C. $* $*
240 MD FDR 301-662 D.C. $* $*
242 MD SAL 816-389 D.C. $* $*
120 ME PUM 2 Boston $* $*
340 ml SWITCH SITE 810-799 Detroit $* $*
340 MI ANN 313-761 Detroit $* $*
340 ml DfR '313-259 Detroit $* $*
340 ml FLT 810-232 Detroit $* $*
340 ml PON 810-332 Detroit $* $*
340 ml RYO 810-362 Detroit $* $*
344 ml BCY 517-667 Detroit $* $*
344 ml SAG 517-771 Detroit $* $*
344 MI MLD 517-839 Detroit $* $*
346 ml LNS 517-482 Detroit $* $*
346 ml JKS 517-787 Detroit $* $*
348 MI BTC 616-962 Detroit $* $*
348 ml KLZ 616-342 Detroit $* $*
349 MI GRS 616-235 Detroit $* $*
</TABLE>
'NOS Dedicated Rates Include applicable back-haul and Network Interconnection
Charges.
37
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit H
Page 3 of 4
NETWORK INTERCONNECTION SCHEDULE
FRONTIER POINTS OF PRESENCE
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
IN
620 MN RCM 507-289 Milwaukee $* $*
624 MN DLT 218-722 Milwaukee $* $*
626 STC 612-251 Milwaukee $* $*
628 MN MIN 612-330 Milwaukee $* $*
520 MO STL 314-231 Kansas City $* $*
@24 MO Switch Site 816-221 Kansas City $* $*
482 Ms JAC 601-259 Atlanta $* $*
648 MT HEL 406-442 Billings - $* $*
648 MT MSL 406-542 Billings $* $*
650 MT Switch Site 406-252 Billings $* $*
422 NC CHR 704-333 Atlanta $* $*
424 NC GRB 919-974 D.C. $* $*
426 NC RLG 919-876 D.C. $* $*
949 NC FAV 910-485 D.C. $* $*
951 NC RMT 910-442 D.C. $* $*
636 ND FGO 701-232 Milwaukee $* $*
638 ND BIS 701-221 Billings $* $*
644 NE OMA 402-331 Kansas City $* $*
958 NE LIN 402-475 Kansas City $* $*
122 NH MAN 603-641 Boston $* $*
222 NJ CMD 609-338 Philadelphia $* $*
224 NJ NWK 201-624 New York $* $*
720 NV RNO 702-321 San Francisco $* $*
721 NV LAS 702-223 Los Angeles $* $*
132 NY Switch Site 212-766 New York $* $*
133 NY PKP 914-452 New York $* $*
134 NY ALB 518-436 Rochester $* $*
136 NY SYC 315-475 Rochester $* $*
138 NY BNG 607-722 Rochester $* $*
140 NY BUF 716-881 Rochester $* $*
974 NY Switch Site 716-777 Rochester $* $*
320 OH Switch Site 216-696 Cleveland $* $*
322 OH YGT 216-747 Cleveland $* $*
324 OH CMB 614-469 Cleveland $* $*
325 OH AKR 216-535 Cleveland $* $*
326 OH TOL 419-242 Cleveland $* $*
328 OH DYN 513-461 Cleveland $* $*
922 OH CIN 513-421 Cleveland $* $*
923 OH has 419-526 Cleveland $* $*
536 OK OKC 405-239 Dallas $* $*
538 OK TUL 918-587 Dallas $* $*
670 OR EUG 503-484 Seattle $* $*
672 OR PLO 503-228 Seattle $* $*
672 OR WLV 503-682 Seattle $* $*
</TABLE>
*NOS Dedicated Rates Include applicable back-haul and Network Interconnection
Charges.
38
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit H
Page 4 of 4
NETWORK INTERCONNECTION SCHEDULE
FRONTIER POINTS OF PRESENCE
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
226 PA HAR 717-221 Philadelphia $* $*
228 PA Switch Site 215-496 Philadelphia $* $*
230 PA ALT 814-941 Philadelphia $* $*
232 PA SCR 717-330 Philadelphia $* $*
234 PA PGH 412-391 Cleveland $* $*
924 PA ERI 814-454 Cleveland $* $*
130 RI PVD 401-831 Boston $* $*
430 SC GNV 803-233 Atlanta $* $*
432 SC FLR 803-665 Atlanta $* $*
434 SC CLM 803-733 Atlanta $* $*
640 SD SXF 605-331 Milwaukee $* $*
468 TN MEM 901-522 Atlanta $* $*
470 TN NSH 901-320 Atlanta $* $*
474 TNT KNX 615-594 Atlanta $* $*
552 TX Switch Site 214-754 Dallas $* $*
552 TX FWR 817-332 Dallas $* $*
558 TX AST 512-389 Dallas $* $*
560 TX HOU 713-224 Dallas $* $*
566 TX STN 210-225 Dallas $* $*
660 UT SLC 801-521 Denver $* $*
244 VA ROK 703-342 D.C. $* $*
246 VA FRK 703-371 D.C. $* $*
248 VA RHM 804-233 D.C. $* $*
252 VA NFK 804-622 D. . $* $*
124 VT BRL 802-880 Boston $* $*
674 WA Switch Site 206-443 Seattle $* $*
674 WA BOT 206-402 Seattle $* $*
674 WA RDM 206-867 Seattle $* $*
676 WA YAK 509-453 Seattle $* $*
676 WA SPO 509-747 Seattle $* $*
350 WI APL 414-730 Milwaukee $* $*
350 WI GBY 414-494 Milwaukee $* $*
352 WI EAU 715-834 Milwaukee $* $*
354 WI MAD 608-257 Milwaukee $* $*
354 WI LCS 608-782 Milwaukee $* $*
356 WI Switch Site 414-272 Milwaukee $* $*
254 WV CHL 304-340 Cleveland $* $*
256 WV MGT 304-292 Cleveland $* $*
654 WY CSP 307-234 Billings $* $*
</TABLE>
*NOS Dedicated Rates include applicable back-haul and Network Interconnection
Charges.
39
<PAGE>
Exhibit I
Page 1 of 2
SERVICE METRICS
The following metrics will be used by Frontier to monitor the performance of its
network as it impacts the quality of service provided to Purchaser.
Information relating to network performance or monitoring processes will be
communicated between the Parties on a regular (in most instances monthly) basis,
and any concerns over performance may be raised at the time, if not addressed
earlier where appropriate.
Network performance is a function of carrier network engineering, and Frontier
will be dependent in significant part upon Purchaser's forecasts and projections
as it engineers its network for optimum performance. It is expected that
Purchaser has identified an excepted level of usage for the Service over the
term of the Agreement. It is also expected that Purchaser will provide usage
forecasts that, in Purchaser's reasonable judgment, have the highest probability
of occurring. Frontier will use such forecast in the engineering of its network,
allowing for the possibility of growth in excess of the forecast(s).
1. Network Performance Metrics:
1) Frontier will engineer its network to meet a Grade of Service of P.0
1. P.0 1 Grade of service is defined as engineering of the network so
that no more than I out of 100 calls experiences a blocking condition.
2) Network Availability: 99.99% per year.
3) Dial tone delay shall fall within the Bellcore land-line switching
specifications established in the LATA Switching System Generic
Requirements.
Trouble Reporting /Problem Escalation:
I The Parties shall supply each other with appropriate network contacts,
including names, phone numbers, beeper or cell-phone numbers, etc., as well
as a problem escalation contact list and trouble reporting protocols and
procedures. Each Party shall ensure the availability of a network contact
on a 24-hour, 7-day per week basis.
2. If any Service provided hereunder is not available for a cumulative of four
hours over any month, or for a cumulative of eight hours over three months
(Collectively, "Extended Outage"), the Parties shall, upon discovery of the
Extended Outage, immediately escalate the problem to their respective
Network/Operations Vice Presidents and promptly supply Purchaser with a
root cause analysis of the problem and well as a plan for corrective
action. If Frontier is unable to rectify the situation in a reasonable
timeframe or to Purchaser's satisfaction,
40
<PAGE>
Purchaser shall have the right to terminate the Agreement in its entirety.
Purchaser must provide Frontier with notification of Termination within
(30) days of Extended Outage. After forty-five (45) days, Frontier will,
via written notification, adjust pricing to reflect market pricing. The
analysis and plan are to be sent to:
Name
Title
Boston Communications Group
100 Sylvan Road, Suite 100
Woburn, MA
3. For the month in which an Extended Outage occurs, Frontier will waive any
applicable Minimum Charge obligation.
41
<PAGE>
Exhibit I
Page 2 of 2
4) Frontier YAII notify Purchaser a minimum of 48 hours prior to any scheduled
downtime. (i.e. loading software upgrades, hardware maintenance, etc.)
5) Frontier is not liable for its failure to meet any of the Service Met6cs in
the following instances:
A. Failure attributable to Purchaser or its systems.
B. Failures attributable to third parties.
C. Failures attributable to Purchaser forecasts that are exceeded by more
than 15%.
D. Failures attributable to Force Majeure events.
42
<PAGE>
EXHIBIT 10.41
-------------
COOPERATIVE AGREEMENT
This Agreement is by and between the University of Massachusetts at Lowell
(hereinafter referred to as the (University) and Boston Communications Group,
Inc. (hereinafter BCG), having a business address at 100 Sylvan Road, Woburn,
MA. 01801.
WHEREAS, the University and BCG are mutually interested in and desire to
cooperate in conducting an educational program focusing on the communications
industry; and
WHEREAS, the University shall furnish students to closely participate with
BCG in carrying out the activities herein contemplated.
NOW, THEREFORE, University in consideration of the above premises and in
the interest of attaining common objectives, establishes the BCG/University
Student Communications Collaborative: A Pilot Program (hereinafter referred to
as the Project), and the parties hereto desire to cooperate and mutually agree
as follows:
1. REFERENCE DATA:
---------------
Date of Agreement:
Mailing Address of University:
Louise G. Griffin
Director, Grants & Contracts
University of Massachusetts Lowell
600 Suffolk Street, Second Floor South
Lowell, MA 01854
Mailing Address of BCG:
Boston Communications Group
100 Sylvan Road
Woburn, VIA 01801
Term of Agreement:
Three years from the Commencement Date, revocable as
provided herein. Agreement shall be automatically extended
for additional one (1) year terms unless either party gives
written notice to the other of its option not to renew at
least sixty (60) days prior to the end of a given term.
1
<PAGE>
2. LOCATION
--------
Program shall be housed in University's facilities located at 600 Suffolk
Street, Third Floor North, Lowell, MA, 01854, hereinafter referred to as Space).
3. PURPOSE AND USE
---------------
The rights of BCG under this agreement shall be exercised solely for the
purposes described in Appendix A.
4. ALLOWABLE COSTS AND PAYMENT
---------------------------
Sponsor Contributions
- ---------------------
BCG shall contribute to the Project the financial support, equipment,
personnel, technology and other resources listed in Appendix A.
Indirect Costs/Overhead
- -----------------------
The periods for which final negotiated overhead rates shall be established
pursuant to this Agreement are as follows:
Execution through 06/30/99 - 48% of Modified Total Direct Cost (MTDC) . For
the purpose of this agreement, MTDC is defined as total direct costs
excluding capital expenditures, subawards in excess of $25,000, student
tuition and student support costs.
07/01/99 until amended - University agrees to an upper limit cap of 50.5%
of MTDC and a lower limit cap of 45.6% of MTDC predicated upon the outcome
of indirect cost rate negotiation with the Department of Health and Human
Services.
Payments
- --------
Payments under this Agreement shall be made by BCG to University on a cost
reimbursement basis. BCG will compensate the University for the performance of
services not to exceed the amounts in Appendix A. Invoices should be sent to:
Boston Communications Group
100 Sylvan Road
Woburn, MA 01801
Payment shall be made within thirty (30) days after receipt of invoices
from the University.
5. CONDITION OF SPACE
------------------
BCG acknowledges and agrees that it accepts the Space in as is condition,
that University is under no obligation to make any
2
<PAGE>
repairs, renovations, or alterations to the Space, and that University has made
no representations or warranties regarding the fitness of the Space for BCG's
intended purpose or use.
Except as expressly provided in the terms of this Agreement, BCG shall make
no alterations or improvements to the Space without University's written
consent. The Space shall be surrendered to University on the date of revocation
or termination of this Agreement in the same condition as on the date of this
Agreement (reasonable wear and tear excepted)
6. IMPROVEMENTS: MAINTENANCE
-------------------------
(a) BCG, at its sole option and expense, shall have the right to make
improvement (the Improvements) in connection with the upgrade of the Space. The
Improvements shall be the sole property of the University, and except as
expressly provided herein, shall not be subject to the provisions of the
Agreement.
(b) BCG shall at all times, at its own expense, keep the space in
suitable condition for the purposes for which it is being used, reasonable wear
and tear excepted.
7. TERM
----
The term of this Agreement shall be three years. The term of the Agreement
shall commence on the date of execution of this lease and shall expire 1095 days
thereafter unless otherwise terminated earlier in accordance with the terms of
this Agreement.
The term of this Agreement may be extended on the following terms, subject
to the prior written approval of the University:
Either party may extend this Agreement for an additional one year. BCG's
right to extend the expiration date shall in all events be subject to
University's right to revoke this Agreement as set forth herein.
8. PERMITS
-------
This agreement and all obligations hereunder are specifically dependent
upon the issuance to the BCG of all permits and Agreements required to operate
and use the Space for the purposes described in this Agreement from those
governmental agencies having jurisdiction. it shall be the responsibility of BCG
to obtain any such permits or Agreements, at BCG's sole cost and expense. In the
event BCG is refused such permit or Agreement, this agreement shall be null and
void with no further obligation by either party to perform. If any such permit
or
3
<PAGE>
Agreement is revoked or canceled during the term of this Agreement, it shall be
cause for terminating this Agreement immediately as set forth in Section 17(c)
hereof.
9. ALTERATION OF THE SPACE
-----------------------
BCG shall make no alterations or improvements upon the Space except as may
be specifically permitted in Section 6. Any alterations or improvements made by
BCG shall be made in accordance with the terms and conditions established by
University, which may include prior approval of plans, insurance coverage, and a
requirement that BCG remove any or all of its alterations or improvements upon
the expiration or earlier termination of this Agreement. The BCG shall not
permit any liens, mortgages or other security interests for the repayment of
monies or value given to be attached to the Space in connection with any repairs
or improvements to the Space. In any event, this Agreement does not for any
purpose constitute the granting of an interest in real property and BCG shall
not have any right to make any permanent improvements to, or to install any
permanent fixtures on, the Space except as specifically provided herein.
10. BCG's SPACE
-----------
BCG may bring such vehicles and other equipment upon the Space as should
ordinarily be used to operate and use the Space for the purposes permitted by
this Agreement, subject, however, to the following limitations: NONE.
11. UTILITIES AND SERVICES
----------------------
University shall provide only the specific services, utilities, and
facilities for the Space during the terra of this Agreement as outlined in
Appendix D. No other services, utilities, facilities or supplies shall be
provided to BCG except as specifically provided herein, and any such services,
utilities, facilities or supplies provided under this Agreement, shall be for
the sole use of BCG and its subcontractors, if any. If University is prevented
or delayed from providing any such services, utilities, facilities, or
performing any other obligation under this Agreement, by reason of any cause
reasonably beyond University's control, then University shall not be liable to
BCG therefor.
12. CONDUCT OF BCG
--------------
Compliance with Laws
- --------------------
BCG shall at all times operate the Space in accordance with all applicable
laws, statutes, ordinances, regulations, permits, Agreements, and requirements
of its insurance policies.
4
<PAGE>
Repair of Damage
- ----------------
BCG shall neither cause nor suffer any waste of the Space and shall
maintain the space in good order at all times. The BCG's responsibilities shall
include, but not be limited to, the repair of any and all damage or breakage
resulting from acts of vandalism or the intentional or negligent acts of the BCG
or others, but excluding damage or breakage caused by employees, agents or
invitees of the University. All repairs made by BCG shall be performed in a
manner satisfactory to University in its reasonable judgment. University shall
have the option to make such repairs for the account of BCG, in which event BCG
shall reimburse University for any and all costs reasonably incurred by
University to make such repairs. Payment shall he made by BCG within ten (10)
business days after written demand by University.
Security
- --------
Accept as provided herein, BCG shall be responsible for providing, at its
sole cost and expense, such security protection or services as University may
reasonably require to protect the Space and BCG's invitees from injury or
damage.
Hazardous Materials
- -------------------
Without limiting any of BCG's obligations under this or any other Section
of this Agreement, BCG agrees that it shall not cause any hazardous materials to
be used, generated, stored or disposed of on, under or about, or transported to
or from the Space. For the purposes of this Agreement, "hazardous materials"
shall include but not be limited to substance defined as "hazardous substances",
"toxic substances", "hazardous wastes", "hazardous materials", or "oil?, in any
federal or state statute concerning hazardous materials now or hereafter
enacted, including all regulations adopted or publications promulgated
thereunder.
Surrender of Space
- ------------------
Upon the expiration or earlier terminate on of this Agreement, BCG shall
immediately vacate and surrender the Space to University, the BCG shall have no
further rights in or access to the Space except as provided herein. BCG shall
also remove all of its property from the Space and restore the Space to the
condition the Space was in at the commencement of this Agreement, reasonable
wear and tear excepted, and, subject further, to any obligation BCG may have
hereunder to make repairs or improvements to the Space. Upon agreement of the
parties, BCG may abandon all or part of its property in place and be responsible
for ensuring that any and all structure, appurtenances, and other physical
materials brought onto Space under this Agreement will be removed within forty-
five days when and if this agreement were terminated. In the event any of BCG's
personal property remains on the Space after the expiration or earlier
termination of this
5
<PAGE>
Agreement without a written agreement between the parties, said property shall
be deemed abandoned and may be retained by University without any compensation
to BCG, or may be removed and either stored or disposed of by University at the
sole cost and expense of BCG.
BCG waives any statutory notice(s) and other legal process(es) relating to
tenancies and acknowledges that BCG has no property or possessory rights in and
to the Space, except for a revocable Agreement for the temporary use of the
Space.
13. INDEMNIFICATION AND LIABILITY
-----------------------------
BCG accepts complete responsibility for the acts, omissions and negligence
of the BCG and its officers, agents, contractors, employees, and invitees while
using the Space or while exercising BCG's rights hereunder. The BCG shall
indemnify the University and the Commonwealth of Massachusetts and save them
harmless from and against any and all claims, actions, damages, liability, or
expenses including attorneys, or other professional fees reasonably incurred in
connection with loss of life, personal injury or damage to or loss of property
arising out of any act, failure to act, or negligence of the BCG, its officers,
agents, contractors, employees or invitees.
The obligations of University shall not be binding on any trustees,
officers or employees of University or of any successor, individually. In no
event shall University, or its successors, be liable for any indirect or
consequential damages.
14. RISK OF LOSS
------------
BCG agrees that it shall use the Space at its own risk, and the University
shall not be liable to BCG for any loss or damage to equipment, fixtures, or
other personal property of the BCG that are installed upon the Space. Without
limiting the foregoing, University shall have no liability to BCG for any
injury, loss or damage caused by any act of BCG's invitees or members of the
general public.
15. INSURANCE
---------
The BCG shall keep in force, at its sole cost and expense, during the full
term of this Agreement, and during such other times as BCG occupies the Space or
any part thereof, the following insurance policies:
Comprehensive general liability insurance insuring the BCG against claims and
demands for personal injury or damage to property which may be claimed to have
occurred upon or about
6
<PAGE>
the Space. Said insurance shall be written on an occurrence basis to afford
protection in the amount of one million dollars ($1,000,000) combined single
limit for personal and bodily injury and death and for property damage. Said
insurance policy or policies, as evidence by a certificate of insurance, shall
name the Commonwealth of Massachusetts as an additional Insured and shall
contain a provision stating that such coverage shall not be canceled without at
least ten (10) days prior written notice to the University.
Workers Compensation insurance covering BCG's employees upon the Space in
such amounts as are required by law.
Such other types of insurance and in such amounts as University may, from
time to time, require in its reasonable judgment.
One or more certificates of insurance showing insurance coverage as
-------------------------------------------------------------------
required by this Section 15 are attached to this Agreement as Appendix C.
- ------------------------------------------------------------------------
The insurance coverage required by this Section shall be by standard
policies, obtained from financially sound and responsible insurance companies
authorized to do business in Massachusetts. In the event BCG fails to obtain any
of the insurance coverage required by this section, or if any of the required
insurance policies are canceled, it shall be grounds for immediate termination
of this Agreement as provided in Section 18(c) of this agreement.
16. ASSIGNMENT
----------
BCG's rights under this Agreement are for the benefit only of the BCG named
herein. The BCG shall not sell, assign, sublet, mortgage or transfer any
interest in this Agreement and shall not permit any, other party to use the
Space, without obtaining, in each instance, the prior written consent of
University, which consent may be withheld for any reason or for no reason, or
granted upon such conditions as University shall determine, all in its sole
discretion.
17. RIGHTS OF UNIVERSITY AND AGENCY TO ENTER
----------------------------------------
The University reserves the right and the BCG shall permit the University
or other representatives of the Commonwealth of Massachusetts, or their agents,
to enter BCG's premise at any time to make repairs, perform maintenance, inspect
the Space, show the Space to others, or monitor compliance with this Agreement,
or for any other reason consistent with the intent of this Agreement or with
applicable law.
7
<PAGE>
18. TERMINATION
-----------
This Agreement shall expire on the date specified in Section 6, unless
------
extended in compliance with the terms of this Agreement and all other
requirements of law, or unless terminated earlier under the following
conditions:
A. Without Cause. Either BCG or University may terminate this Agreement by
-------------
giving written notice to the other party at least sixty (60) calendar days prior
to the effective date of termination stated in the notice.
B. For Cause. In the event that either party commits a breach of its
---------
obligations under this Agreement and fails to cure that breach within sixty
(60)days after receiving written notice thereof, the other party may terminate
this Agreement immediately upon written notice to the party in breach. If the
alleged breach involves nonpayment of any amounts due University under this
Agreement, BCG shall have only one opportunity to cure a material breach from
which it receives notice as described above; any subsequent material breach by
BCG will entitle University to terminate this Agreement immediately upon written
notice to BCG, without the sixty-day cure period.
C. Emergency. In the event the University determines that it is necessary to
---------
terminate this Agreement or suspend BCG's rights hereunder immediately in order
to prevent permanent or serious injury or damage to persons or property,
University may terminate this Agreement or suspend BCG's rights hereunder by
providing written notice to BCG stating the grounds for said termination or
suspension. Said notice may be given in the form of a telegram, mailgram, hand-
carried letter, or other reasonable written means, and this Agreement shall be
terminated or suspended, as the case may be, upon delivery of said notice to
BCG. University shall exercise its rights hereunder through a suspension rather
than a termination whenever practicable.
In the event this agreement is terminated in accordance with any of the
provisions of this Section 18, this Agreement shall come to an end as fully and
completely as it the term had expired on the date set forth in Section 7, and
BCG shall vacate and surrender the Space as provided in Section 11.
In the event this Agreement is terminated by University in accordance with
any of the provisions of this Section. BCG shall not be relieved of liability to
University for arrears in the Agreement fees or for any other injury or damage
sustained by University as a result of a breach of BCG of any of the terms or
conditions of this Agreement, whether occurring before or after such
termination. BCG expressly waives any right to damages related to such
termination,
8
<PAGE>
including incidental or consequential damages.
19. NO ESTATE CREATED
--------------
This Agreement shall not be construed as creating or vesting in BCG any
estate in the Space, but only the limited right of use as herein described, and
BCG shall have no right to require specific performance of the obligation of
University hereunder.
20. NON-DISCRIMINATION
------------------
BCG shall not discriminate against any qualified employee, applicant for
employment, subcontractor, or person or firm seeking to provide goods or
services to BCG. nor shall BCG deny any person access to the Space or to any
activities or programs carried out pursuant to this Agreement because of race,
color, national origin, ancestry, age, sex, religion, physical or mental
handicap, or sexual orientation. The BCG shall comply with all applicable
federal and state statutes, rules, and regulations prohibiting discrimination in
employment.
21. NOTICE
------
All notices or other communications required or permitted to be given under
this Agreement shall, unless otherwise expressly permitted hereunder, be in
writing signed by a duly authorized representative of the party giving the
notice and shall be given by hand delivery (including, without limitation,
courier, Federal Express, or other overnight delivery service) or mailed by
United States certified mail, postage prepaid, return receipt requested. Such
notices shall be sent or addressed to University and BCG at the addresses set
forth in Section 1.
22. PUBLICITY RESTRICTIONS.
----------------------
Neither party shall use the name of the other party or any of its trustees,
officers, faculty, students, employees, or agents, or any adaptation of such
names, or any terms of this Agreement in any promotional material or other
public announcement or disclosure without the prior written consent of the other
party.
9
<PAGE>
23. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts irrespective of any conflicts of law
principles.
24. Non-Competition
---------------
University agrees not to support any efforts in the telecommunications
field that are the same in scope as those defined in Appendix A during the term
of this Agreement.
25. Tax-Exempt Status
-----------------
BCG acknowledges that University, as a public institution of the
Commonwealth of Massachusetts, holds the status of an exempt organization under
the United States Internal Revenue Code. BCG also acknowledges that certain
facilities in which the Project may be performed were financed through offerings
of tax-exempt bonds. If the Internal Revenue Service determines, or if counsel
to University reasonably determines, that any event of this Agreement
jeopardizes the tax-exempt status of University or the bonds used to finance
University facilities, the relevant term shall be deemed an invalid provision
and modified by the parties.
26. MISCELLANEOUS PROVISIONS
------------------------
This Agreement may not be modified except in writing, duly executed by both
parties.
The BCG, its employees, officers or agents, are not authorized to bind or
involve the University or the Commonwealth of Massachusetts in any contract or
to incur any liability for or on the part of the University or the Commonwealth
of Massachusetts.
If any portion of this Agreement is declared to be illegal, unenforceable
or void, then all parties to this Agreement shall be relieved of all obligations
under that portion; provided, however, that the remainder of this agreement
shall be enforced to the fullest extent permitted by law.
No consent or waiver, whether express or implied, by either party to or of
any breach of the terms of this Agreement by the other party shall be construed
as a consent or waiver to or of any other breach. No waiver of any breach or
default or other indulgence shall be effective unless expressed in writing by
the waiving party.
10
<PAGE>
The captions in this Agreement are inserted for convenience of reference
only and in no way define, describe or limit the scope or intent of this
Agreement or any of the provisions hereof.
No official, employee or consultant of the Commonwealth of Massachusetts
shall be personally liable to BCG or to any person claiming under or through BCG
for or on account of any alleged breach of this Agreement, or for any act,
failure to act or other matter arising out of the execution of this Agreement or
the performance of University's obligations hereunder.
No provision of this Agreement shall be deemed to have been waived by
either party unless such waiver is in writing and is signed by the party to be
charged.
Institution will use its best efforts to conduct the program as generally
set out in the Project. Any changes in the Project will be made only upon mutual
agreement of the parties and will be evidenced by a written agreement executed
by both parties.
The following attachments are made a part of this Agreement for all
purposes:
Appendix A Statement of Work/Objectives
Appendix B University contribution
Appendix C Insurance Certificates
AGREED AND ACCEPTED
Boston Communications Group:
----------------------------
/s/ Fritz von Mering C.F.O.
--------------------------------------------------------------
Authorized Signature Title
Fritz von Mering 2/9/98
-----------------------------------------------------------
Print Name Date
University of Massachusetts Lowell
----------------------------------
/s/ Louis J. Petrovic Director - EF,TT P
-----------------------------------------------------------------
Authorized Signature Title
Louis Petrovic 2/9/98
-----------------------------------------------------------
Print Name Date
11
<PAGE>
APPENDIX A
STATEMENT OF WORK/OBJECTIVES
PURPOSE AND USE
- ---------------
Boston Communications Group (?BCG?) intends to locate a remote call center on
the campus of the University of Massachusetts at Lowell (?University?) for the
purpose of performing certain business activities in conjunction with providing
jobs for students and conducting educational programs focusing on the
communications industry.
BOSTON COMMUNICATIONS GROUP RESPONSIBILITIES
- --------------------------------------------
1. Provide technology and expertise in the delivery of calls to the University
location.
2. Provide on-site management of call center operations.
3. Provide on-site training of students.
4. Interview and select qualified candidates.
5. Provide jobs for approximately 200 students with shifts of 16-20 hours per
week during school sessions and 40 hour weekly shifts during vacation periods
and summer break.
6.A Pay to University, as payment in full for the Project, compensation at a
rate of $10.00 per hour for each hour worked by students participating in the
Project, plus Overhead as defined in Section 4 of this Agreement (the costs
included in Modified Total Direct Cost being listed in the attached Schedule of
Costs); or
6.B If a participating student so elects, BCG will pay to the University
compensation at a rate of $9.00 per hour for each hour worked by such student
(plus Overhead as defined in Section 4 of this Agreement); and at the beginning
of each subsequent semester, for each such student employed six months or longer
BCG will pay up to $1,000 to the University for student scholarships, subject to
terms and conditions to be mutually determined by University and BCG.
12
<PAGE>
APPENDIX B
UNIVERSITY CONTRIBUTIONS
UNIVERSITY OF MASSACHUSETTS LOWELL RESPONSIBILITIES
- ----------------------------------------------------
1. Recruit and pre-screen approximately 200 students for employment with the
Project, subject to interview and selection by BCG. In the event that
University is unable to provide 200 students, BCG shall have the right to staff
with non-students, provided, however, that BCG relocates non-students as
acceptable students are identified.
2. Employ all students participating in the Project, pay wages and withhold
taxes for all such employees, in accordance with all applicable laws and
regulations.
3. Provide approximately 9,000 square feet of space (consisting of the entire
Third Floor North at 600 Suffolk Street) including utilities (consisting of
electricity, water & sewer, heating and air conditioning, but excluding cleaning
services). The compensation for this is included in the overhead expense paid
by BCG. The University may provide additional space in the same building, if
required, to meet the needs of the Project as defined in Appendix A.
4. Allow BCG to locate other BCG employees at the Project location, as may be
needed for the conduct of the Project as defined in Appendix A.
5. Any other use of Project facilities will require the prior, written
approval of the University and may also require the execution of a Sponsored
Research Agreement.
13
<PAGE>
EXHIBIT 10.42
-------------
February 10, 1998
Mr. E. Y. Snowden
801 Great Windermere Court
Great Falls, VA 22006
Dear E. Y.:
On behalf of myself and our Board of Directors, I am pleased to offer you the
position of President & Chief Executive Officer of Boston Communications Group.
You will also be elected as a member of the Board of Directors. The following
are the key elements of the offer:
1. Boston Communications Group agrees to employ you in the position of President
& Chief Executive Officer of the company, reporting to the Chairman of the
Board of Directors. During your employment you agree to devote substantially
all of your normal business time and attention to the affairs of Boston
Communications Group and the promotion of its interests and will carry out
such duties as described by the Board of Directors.
2. You will be paid a salary at an annual rate of $250,000 and be paid bi-weekly
($9615.38 per pay period). This figure will be reviewed at least annually and
may be increased periodically by the Board of Directors.
3. You will be eligible for an annual bonus of up to 40% of your base salary
upon meeting certain goals and objectives. These goals and objectives will
be mutually agreed upon between yourself and the Board of Directors during
your first three months of employment.
4. You will be granted options for 400,000 shares of stock in Boston
Communications Group, vesting 20% on your date of hire with Boston
Communications Group and 20% per year over a four year period on each one-
year anniversary of your hire. The exercise price of the options will be
determined by the compensation committee of the Board of Directors within two
weeks of your joining the company, but in no event will be greater than the
stock's fair market value on your hire date. In the event that, within 12
months from your date of hire, you voluntarily resign from the company for
reasons other than a change in control of the company which results in a
demotion in your title, a diminution in responsibilities, or removal from the
board, you must pay the company an amount equal to the difference of (1) the
aggregate fair market value on the date of exercise of all options exercised
by you which had been granted under this paragraph 4, less (2) the product of
(a) the number of such options exercised multiplied by (b) the exercise price
of the options. In the event there is a change in control of the company,
then you will vest 50% of your granted options on the date of change in
control if the date is within your first 12 months of employment and you will
vest in 100% of your granted options if the date is after 12 months of
employment. A change of control includes an acquisition of the company by
an unaffiliated entity or person whether by merger or the sale of all or
substantially all of the company's assets, or the sale by the company of
more than fifty percent (50%) of the company's outstanding voting stock to an
unaffiliated entityor organization.
5. You will be eligible to participate in all Boston Communications Group
benefit programs as outlined in the attached package. In addition, you will
be eligible to participate in supplemental life insurance up to three times
your base salary, short-term disability insurance up to two-thirds of your
base salary, long-term disability insurance up to 60% of your base salary,
and Directors' and Officers' insurance customary for a Chief Executive Office
of a publicly-held company. The cost of this supplemental insurance will be
borne by the company. In addition, you will be entitled to 4 weeks of
vacation per year.
1
<PAGE>
6. The company will provide you with a severance package to cover you in the
event that the Boston Communications Group terminates your employment without
cause, or in the event there is a change in control of the company that
results in demotion in your title, diminution in responsibilities, or removal
from the board. Without cause shall mean for any reason other than:
a. Illegal acts (other than minor traffic violations, misdemeanors, or other
acts that do not result in criminal conviction) including convictions for
theft or embezzlement.
b. Material violation of published, written policies of the company.
c. Irresponsible, unauthorized acts of a willful nature in the performance of
duties that have a substantial financial impact on the company or
significantly affect the company's public image.
That package will provide you with base salary and benefit continuance from
the time of your involuntary termination for up to twelve months thereafter
or until such time as you become employed, whichever is the lesser of the
two, at which time all payments will cease.
7. Boston Communications Group will provide relocation assistance related to
your move from Great Falls, VA to the Greater Boston, MA area as outlined in
Attachment.
8. You will be asked to sign a non-disclosure and non-compete agreement. The
non-compete agreement will be coextensive with the severance pay package in
paragraph 6 above.
9. In making this offer, the company understands that you are not under any
obligation to any former employer, person, firm or corporation that would
prevent, limit or impair, in any way, the performance by you of the duties as
an employee of the company.
The preceding sets forth all the terms of Boston Communications Group offer to
employ you. If this offer is in accordance with your understanding and
acceptable to you, please sign, date and return to me a copy of this letter.
E. Y., I am confident that Boston Communications Group can offer you an exciting
and rewarding career. The Board of Directors are very enthusiastic about you
joining the company as President & Chief Executive Officer and look forward to
your positive response.
Sincerely,
/s/ Paul Tobin
Paul Tobin
Chairman
I am in agreement with the terms as stated and will accept this offer of
employment made by Boston Communications Group:
/s/ E.Y. Snowden 2/10/98
- ---------------- -------
Name Date
2
<PAGE>
Attachment
----------
Relocation Expenses - E.Y. Snowden
- ----------------------------------
Boston Communications Group will provide relocation assistance to E.Y. Snowden
as follows:
1. Boston Communications Group will reimburse you for the costs (real estate
fees and customary costs, including up to 1% of the sales price of the home
which may be offered to the buyer of the house as a customary purchase
incentive) of selling your home in Great Falls, VA.
2. The company will pay the costs associated with moving of your personal items
from your present home in Great Falls, VA to the Greater Boston area.
3. You will be reimbursed to expenses associated for house-hunting trips to the
Boston area for you and your wife.
4. You will be reimbursed for reasonably temporary housing and commuting costs
for up to six months prior to your move to the Boston area.
5. Boston Communications Group will reimburse you for the customary costs
(closing costs, legal fees, etc.) of purchasing a new home in the Greater
Boston area.
6. All reimbursements would be "grossed up" to account for federal taxes.
3
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