<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 27, 1999
REGISTRATION NO. 333-85281
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1 TO
FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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PENTASTAR COMMUNICATIONS, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
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DELAWARE 4813 84-1502003
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(State or jurisdiction of incorporation (Primary Standard Industrial Classification Code (I.R.S. Employer
or organization) Number) Identification No.)
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1522 BLAKE STREET
DENVER, COLORADO 80202
(303) 825-4400
(Address and telephone number of principal executive offices)
(Address of principal place of business or intended principal place of business)
-----------------------------------
CRAIG J. ZOELLNER, PRESIDENT
PENTASTAR COMMUNICATIONS, INC.
1522 BLAKE STREET
DENVER, COLORADO 80202
(303)825-4400
(Name, address and telephone number of agent for service)
-----------------------------------
Copies to:
B. SCOTT PULLARA, ESQ. ROBERT W. WALTER, ESQ.
LESLIE A. NICHOLS, ESQ. STACEY L. BOWERS, ESQ.
SHERMAN & HOWARD L.L.C. BERLINER ZISSER WALTER & GALLEGOS, P.C.
633 SEVENTEENTH STREET, SUITE 3000 1700 LINCOLN STREET, SUITE 4700
DENVER, COLORADO 80202 DENVER, COLORADO 80203
(303) 297-2900 (303) 830-1700
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APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
this registration statement becomes effective.
-----------------------------------
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
-----------------------------------
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PART II
Item 27. Exhibits and Financial Statement Schedules
(a) Exhibits
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Exhibit
Number Description of Document
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1.1* Form of Underwriting Agreement.
1.2* Form of Selected Dealers Agreement.
2.1* Agreement and Plan of Merger dated August 13, 1999 among PentaStar
Communications, Inc., OC Mergerco 1, Inc., DMA Ventures, Inc. and its principal
shareholder, Jeffrey A. Veres.
2.2* Agreement and Plan of Merger dated August 13, 1999 among PentaStar
Communications, Inc., OC Mergerco 2, Inc., ICM Communications Integration,
Inc. and the shareholders of ICM Communications Integration, Inc.
3.1* Form of Restated Certificate of Incorporation.
3.2* Form of Restated Bylaws.
4.1** Specimen stock certificate representing shares of common stock of PentaStar
Communications, Inc.
4.2* Form of Warrant for the purchase of common stock to be issued to the
representatives upon the closing of this offering.
5.1** Opinion of Sherman & Howard L.L.C. regarding the legality of the securities
being registered.
10.1* PentaStar Communications, Inc. Stock Option Plan.
10.2*** Strategic Agent Sales Agreement by and between U S WEST
Communications, Inc. and Access Communications dated
February 15, 1998, as amended by memorandum dated
March 24, 1999.
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Exhibit
Number Description of Document
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10.3*** Strategic Agent Sales Agreement by and between U S WEST Communications,
Inc. and ICM Communications Integration, Inc. dated February 13, 1998, as
amended by memorandum dated March 24, 1999.
10.4* Consulting Agreement effective September 1, 1999 between Optimal
Communications, Inc. (nka PentaStar Communications, Inc.) and BIBD, LLC.
10.5* Employment and Noncompetition Agreement entered into as of August 13, 1999
between PentaStar Communications, Inc. and Jeffrey A. Veres.
10.6* Form of Principal Stockholder's Escrow and Contingent Stock Agreement among
PentaStar Communications, Inc., OC Mergerco 1, Inc. and Jeffrey A. Veres.
10.7* Form of Principal Stockholder's Escrow and Contingent Stock Agreement among
PentaStar Communications, Inc., OC Mergerco 2, Inc. and Dennis W. Schillinger.
10.8* Lease Agreement between BACE Real Estate, LLC and PentaStar
Communications, Inc.
10.9* Stock Purchase Agreement dated March 31, 1999 between Optimal
Communications, Inc. (nka PentaStar Communications, Inc.) and Robert S.
Lazzeri and Addendum thereto.
10.10* Stock Purchase Agreement dated March 31, 1999 between Optimal
Communications, Inc. (nka PentaStar Communications, Inc.) and Black Diamond
Capital, LLC and Addendum thereto.
10.11* Stock Purchase Agreement dated March 31, 1999 between Optimal
Communications, Inc. (nka PentaStar Communications, Inc.) and Jeffrey A. Veres
and Addendum thereto.
10.12* Lock-Up Agreement dated March 17, 1999 between Optimal Communications,
Inc. (nka PentaStar Communications, Inc.) and BACE Investments, LLC.
10.13* Business Lease dated April 10, 1996 between Jeffrey and Linda Veres and DMA
Ventures, Inc. (dba Access Communications) and First Amendment to Lease
dated August 13, 1999.
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Exhibit
Number Description of Document
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10.14* Form of Escrow Agreement among BACE Investments, LLC, Black Diamond
Capital, LLC, PentaStar Communications, Inc., Schneider Securities, Inc. and
American Securities Transfer & Trust, Inc.
21.1* Statement re subsidiaries of PentaStar Communications, Inc.
23.1** Consent of Sherman & Howard L.L.C. (included in Exhibit 5.1).
23.2* Consent of Arthur Andersen LLP, Independent Public Accountants.
24.1* Power of Attorney. Reference is made to II-5.
27.1* Financial Data Schedule.
99.1** Consent of Robert S. Lazzeri to be named.
99.2** Consent of R. Neal Tomblyn to be named.
99.3** Consent of David L. Dunham to be named.
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* Previously submitted.
** To be filed by amendment.
*** Filed herewith. The registrant has applied for confidential treatment
for portions of this exhibit.
All schedules are omitted because they are inapplicable or the
requested information is shown in the consolidated financial statements of the
registrant or related notes thereto.
II-3
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form SB-2 and authorized this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, in the City of Denver, State of Colorado, on the 27th day of
August, 1999.
PENTASTAR COMMUNICATIONS, INC.
By: /s/ Richard M. Tyler
------------------------------------
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
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Signature Title Date
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/s/ Craig J. Zoellner President, Treasurer and Director August 27, 1999
- ------------------------------------- (Principal Executive Officer and
Richard M. Tyler as Principal Financial Accounting
attorney-in-fact for Officer)
Craig J. Zoellner
/s/ Richard M. Tyler Vice President, Secretary and August 27, 1999
- ------------------------------------- Director
Richard M. Tyler
Director
- --------------------------------------
Carleton A. Brown
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EXHIBIT INDEX
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Exhibit
Number Description of Document
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1.1* Form of Underwriting Agreement.
1.2* Form of Selected Dealers Agreement.
2.1* Agreement and Plan of Merger dated August 13, 1999 among PentaStar
Communications, Inc., OC Mergerco 1, Inc., DMA Ventures, Inc. and its
principal shareholder, Jeffrey A. Veres.
2.2* Agreement and Plan of Merger dated August 13, 1999 among PentaStar
Communications, Inc., OC Mergerco 2, Inc., ICM Communications
Integration, Inc. and the shareholders of ICM Communications Integration,
Inc.
3.1* Form of Restated Certificate of Incorporation.
3.2* Form of Restated Bylaws.
4.1** Specimen stock certificate representing shares of common stock of
PentaStar Communications, Inc.
4.2* Form of Warrant for the purchase of common stock to be issued to the
representatives upon the closing of this offering.
5.1** Opinion of Sherman & Howard L.L.C. regarding the legality of the
securities being registered.
10.1* PentaStar Communications, Inc. Stock Option Plan.
10.2*** Strategic Agent Sales Agreement by and between U S WEST
Communications, Inc. and Access Communications dated February 15,
1998, as amended by memorandum dated March 24, 1999.
10.3*** Strategic Agent Sales Agreement by and between U S WEST
Communications, Inc. and ICM Communications Integration, Inc. dated
February 13, 1998, as amended by memorandum dated March 24, 1999.
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Exhibit
Number Description of Document
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10.4* Consulting Agreement effective September 1, 1999 between Optimal
Communications, Inc. (nka PentaStar Communications, Inc.) and BIBD,
LLC.
10.5* Employment and Noncompetition Agreement entered into as of
August 13, 1999 between PentaStar Communications, Inc. and Jeffrey A.
Veres.
10.6* Form of Principal Stockholder's Escrow and Contingent Stock Agreement
among PentaStar Communications, Inc., OC Mergerco 1, Inc. and
Jeffrey A. Veres.
10.7* Form of Principal Stockholder's Escrow and Contingent Stock Agreement
among PentaStar Communications, Inc., OC Mergerco 2, Inc. and
Dennis W. Schillinger.
10.8* Lease Agreement between BACE Real Estate, LLC and PentaStar
Communications, Inc.
10.9* Stock Purchase Agreement dated March 31, 1999 between Optimal
Communications, Inc. (nka PentaStar Communications, Inc.) and
Robert S. Lazzeri and Addendum thereto.
10.10* Stock Purchase Agreement dated March 31, 1999 between Optimal
Communications, Inc. (nka PentaStar Communications, Inc.) and Black
Diamond Capital, LLC and Addendum thereto.
10.11* Stock Purchase Agreement dated March 31, 1999 between Optimal
Communications, Inc. (nka PentaStar Communications, Inc.) and
Jeffrey A. Veres and Addendum thereto.
10.12* Lock-Up Agreement dated March 17, 1999 between Optimal
Communications, Inc. (nka PentaStar Communications, Inc.) and BACE
Investments, LLC.
10.13* Business Lease dated April 10, 1996 between Jeffrey and Linda Veres and
DMA Ventures, Inc. (dba Access Communications) and First Amendment
to Lease dated August 13, 1999.
10.14* Form of Escrow Agreement among BACE Investments, LLC, Black
Diamond Capital, LLC, PentaStar Communications, Inc., Schneider
Securities, Inc. and American Securities Transfer & Trust, Inc.
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Exhibit
Number Description of Document
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21.1* Statement re subsidiaries of PentaStar Communications, Inc.
23.1** Consent of Sherman & Howard L.L.C. (included in Exhibit 5.1).
23.2* Consent of Arthur Andersen LLP, Independent Public Accountants.
24.1* Power of Attorney. Reference is made to II-5.
27.1* Financial Data Schedule.
99.1** Consent of Robert S. Lazzeri to be named.
99.2** Consent of R. Neal Tomblyn to be named.
99.3** Consent of David L. Dunham to be named.
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* Previously submitted.
** To be filed by amendment.
*** Filed herewith. The registrant has applied for confidential treatment
for portions of this exhibit.
II-7
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EXHIBIT 10.2
PentaStar Communications, Inc. has applied for confidential treatment for
portions of this Exhibit 10.2. An asterisk (*) indicates those portions that
have been omitted pursuant to the request for confidential treatment. A complete
copy of this Exhibit has been filed separately with the Securities and Exchange
Commission.
STRATEGIC AGENT SALES AGREEMENT
This Agreement is made by and between U S WEST Communications, Inc., a
Colorado. corporation (hereinafter "USWC") and Access Communications, a CO
corporation (hereinafter "Agent"). For the purposes of this Agreement, the
address of USWC shall be:
Suite 710
421 SW Oak Street
Portland, OR 97204
or as such, address is changed by notice to Agent.
The address of Agent shall be:
7076 S. Alton Way
Unit A
Englewood, CO 80112
For and in consideration of the mutual promises and covenants set forth
hereinafter, the parties do mutually agree as follows:
I. Term of Agreement
The term of this Agreement shall commence on January 1, 1998 and shall
continue in effect for a three (3) year period through December 31, 2000. In
the event Agent and USWC execute the Agreement after January 1, 1998, the term
shall be from the last date of execution until December 31, 2000.
II. Appointment of Agent
1. USWC hereby appoints Agent to exclusively sell U S WEST network
products and other services as well as perform the responsibilities specified
herein under the terms and conditions hereinafter contained.
2. Agent shall perform the duties specified herein only in relation to
data communications and telecommunication products and services (hereinafter
"Services") covered by this Agreement and set forth in the attached, Appendix A
incorporated herein by reference. As the condition of being a strategic Agent,
Agent agrees to sell exclusively those USWC products listed in Appendix A as
core products and provide customer coordination support relative only to such
core products. USWC may, from time to time modify Appendix A by providing
thirty (30) days written notice to Agent.
3. Agent and affiliates (wholly or partially owned subsidiaries,
branch division, other financially encumbered entities of the above agency)
agree not to resell USWC local network products and services available in the
wholesale tariffs. Agent and affiliates further agree not to sell network
products and other services provided by resellers, facilities by-pass
providers, or
<PAGE> 2
other competitive access providers of USWC network products. During the term of
this Agreement and thereafter, USWC reserves the right, without obligation or
liability to Agent, to market telecommunication services, whether through
USWC's own representatives, other Agents, or by any other means. Agent further
agrees that sales to itself and/or affiliates of USWC network facilities,
products or other services, for other than demonstration purposes, are not
compensable under this agreement.
4. Agent hereby accepts such appointment and certifies that except as
specifically provided for herein, it is capable of performing all of its
obligations under this Agreement without assistance from or identification with
USWC.
5. Agent is authorized to perform the responsibilities covered by this
Agreement only in the territory specified in attached, Appendix B incorporated
herein by reference. Agent is not authorized to perform any responsibilities
covered by this Agreement in any other territory unless Agent has first
received USWC's written authorization to do so. USWC may, from time to time
during the term of this Agreement, modify Appendix B by providing thirty (30)
days written notice to Agent.
6. It is expressly understood and agreed that the agency created
herein is a limited agency and that Agent shall have only those rights and
responsibilities specifically described in this Agreement. No agency rights or
responsibility shall arise by operation of law.
7. The parties hereto declare and agree: (a) that Agent will perform
its obligations under this Agreement not as the employee or servant of USWC;
(b) that Agent has and hereby retains the right to exercise full control of and
supervision over the performance of Agent's obligations and full control over
the employment, direction, compensation and discharge of all its employees
assisting in the performance of such obligations; (c) that Agent will be solely
responsible for all matters relating to payment of such employees, including
compliance with Social Security, withholding, and all other regulations
governing such matters; and (d) that Agent shall be responsible for Agent's own
acts and those of Agent's subordinates and employees during the performance of
Agent's obligations under this Agreement.
8. USWC reserves the right to deal directly with the customers in all
matters involving installation, maintenance and billing of Services.
III. Compensation
Compensation for the services performed by Agent hereunder shall be as
specified attached, Appendix C incorporated herein by reference. USWC reserves
the right to make modifications to Appendix C by providing ninety (90) days
written notice.
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IV. Agent Responsibility
1. Agent shall use good faith efforts to market Services proactively
to its customers. Said marketing shall be consistent with and subject to the
terms and conditions set forth in applicable USWC rates and tariffs, which may
from time to time be amended at the initiation of USWC or the appropriate
regulatory commission, and as set forth in USWC policies for the sale of the
Services hereunder. In the event the Services have been detariffed, are not
subject to tariffs under state law, or are offered pursuant to tariffs that
permit flexible pricing, Agent shall use USWC's current standard prices or
Agent shall request a specific price for the customized Services. In the event
Services are offered under contract, Agent shall offer such Services subject to
the applicable terms and conditions contained in a contract supplied by USWC.
In the event a bond is required, Agent agrees to post the bond and be
responsible for the fees associated therewith. Agent may not offer any terms or
conditions on USWC's behalf which conflict with relevant tariffs, prices,
policies or contracts. Agent shall also market such services in a manner
consistent with the standards for marketing of Services which USWC shall
specify as necessary to protect trademarks or trade names used in connection
with the Services and as provided in paragraph VIII hereof.
2. At least thirty (30) days prior to each anniversary of this
Agreement, Agent shall submit a revised business plan and forecast updating its
business activities and sales projections in the same format as originally
supplied. The annual business plan is required for continuance of this
Agreement through its term. The requirements for information to be included in
this Business Plan are outlined in attached, Appendix D incorporated herein by
reference.
3. Agent has, prior to execution of this Agreement, accepted a minimum
objective requirement as set forth in Appendix D. USWC and Agent must negotiate
specific sales objectives by which Agent's sales performance will be measured
for the calendar year. Such objectives agreed to by Agent and USWC shall be
made a part of this Agreement as though fully set forth herein and shall be
considered to constitute a material term hereof.
4. Agent agrees to meet with USWC representatives at mutually agreed
upon times (at least semiannually) to discuss its sales activities and
performance in meeting the objectives outlined in the business plan. Such
meetings shall include, as a minimum, providing present and projected customer
contact information, sales to date and pending sales activities, problems that
have arisen, recent projected training and marketing activities and results,
and other projected sales activities for the following six months. In addition,
Agent agrees to notify USWC promptly of any problems that might affect Agent's
ability to meet agreed upon objectives and forecasts.
5. Agent may sell other USWC services in addition to the services
offered hereunder, provided Agent will not be compensated under the terms of
this Agreement for service not offered herein.
6. Agent shall use commercially reasonable efforts at all times to
give prompt, courteous, and efficient service to customers, shall be governed
in all dealings with such customers by the highest standards of honesty,
integrity, and fair dealing, including compliance
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with all applicable laws, ordinances, and regulations, and shall do nothing
which would tend to discredit, dishonor, reflect adversely upon, or in any
manner injure the reputation of USWC or the services covered by this Agreement
and the quality image associated with said services and USWC. Agent shall be
responsible for obtaining correct information from the customer regarding the
customer's service requirements and, where requested by USWC, Agent shall
obtain appropriate credit information as specified by USWC. Agent shall provide
at a minimum technical support set forth in Appendix E incorporated herein by
reference. Failure to do so may result in loss of compensation. USWC may, from
time to time, modify Appendix E by providing Agent thirty (30) days written
notice of any modification. Any action of USWC in providing Services under
erroneous terms shall not be deemed a ratification of Agent's acts.
USWC may conduct periodic surveys with the customers to whom the Agent has sold
services on USWC's behalf. If the survey reflects poor service on the part of
the Agent, USWC will place Agent on a Service Plan for a period not to exceed 6
months. If Agent's service levels do not improve while on the Service Plan,
this Agreement may be terminated immediately with a written notice.
7. Agent may, at its own expense, provide materials and advertising to
actively promote the Services covered by this Agreement. Said promotional
materials and advertising will be done in accordance with all applicable laws
and regulations, including those on false advertising and unfair competition
and in accordance with Section VIII of this Agreement.
8. As provided for in paragraph V hereof, USWC may from time to time
provide free of charge promotional materials to Agent in reference to Services
covered by this Agreement. In that event, Agent agrees to display and use the
same appropriately.
9. Except as provided in paragraph V hereof, Agent shall provide its
personnel with all training necessary to maintain a staff of competent sales
personnel conversant in the specifications, features, and advantages of
Services. Such training of service personnel shall include instruction as to
the proper use of, and restrictions on the use of, information provided by
USWC. USWC may at its discretion provide periodic training sessions and
assistance to Agent concerning Services at no charge.
10. Agent shall initiate and actively pursue the training of its
customers in the effective use of Services, and Agent agrees to conduct all
end-user training, including provision to customer of instructional material
furnished by USWC.
11. Agent shall keep customers informed of available Services included
in Appendix A.
12. Agent shall promptly report all customer service complaints to
appropriate USWC department, regarding USWC-provided Services.
13. (a) Notwithstanding the provisions of the clause entitled
"Indemnity," Agent shall
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obtain and maintain, during the terms of this Agreement, at its own cost and
expense, all insurance and/or bonds required of Agent by law, including but not
limited to:
(1) Worker's compensation insurance in the form
and amount (including the Broad Form All
States endorsement) prescribed by law of
the state in which Agent is acting
hereunder.
(2) Employers' liability insurance with limits
of at least $100,000 for each occurrence.
(3) Comprehensive general liability insurance
with a broad form endorsement which
includes, but is not limited to, coverage
for services liability, personal injury,
broad form property damage, coverage for
completed operations, and contractual
liability, with respect to the liability
assumed by Agent hereunder. Limits shall be
not less than $1,000,000 combined single
limit for each occurrence.
(4) Comprehensive automobile liability
insurance covering the use and maintenance
of owned, not-owned, hired, and rented
vehicles with limits of not less than
$1,000,000 combined single limit coverage
for each occurrence.
(b) Agent shall furnish a certificate or adequate proof of
the foregoing insurance or proof of self-insurance. USWC shall allow Agent,
upon provision of such adequate proof of self-insurance, to self-insure the
insurance requirements contained in this clause.
(c) The certificate furnished by Agent shall contain a clause
stating that USWC shall be notified in writing at least thirty (30) days prior
to cancellation of, or any material change in, the policy.
V. USWC Responsibilities
USWC shall:
1. Advertise the Services and provide promotional literature as USWC,
at its discretion, deems appropriate.
2. Provide, without charge, initial training for a mutually acceptable
number of Agent's sales and service personnel on USWC products and procedures
as defined within this Agreement.
3. USWC shall install the Services ordered through Agent in accordance
with the Service Ordering Procedure provided by Agent Marketing.
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4. USWC will provide such technical support as described in attached,
Appendix E incorporated herein by reference. Any system designs developed in
USWC's performance of that support are deemed to be proprietary and to remain
the property of USWC.
5. Provided in paragraph IV, Agent will meet with USWC representatives
regularly. At such meetings, USWC will provide Agent formal indication of
performance within established objectives and contractual guidelines.
6. USWC will identify and make available additional training on
emerging technology.
VI. Service Ordering Procedure
1. USWC will be responsible for the installation and maintenance of
Services sold by Agent pursuant to this Agreement, but shall have no
responsibility for or liability in connection with any other non-USWC services
or products sold by Agent.
VII. Termination of Agreement
1. In addition to other remedies provided for by law, either party may
terminate this Agreement by written notice if the other party breaches any
provision of this Agreement including but not limited to Agent's failure to
meet the criteria established in Article IV, and does not remedy such breach
within thirty (30) days after written notice thereof is given.
2. Either party may terminate this Agreement in whole or in part by
written notice in the event the other party: (a) makes (or is discovered to
have made) any material false representations, reports, or claims in connection
with the creation of this Agreement, or during the business relationship of the
parties under this contract; (b) engages in fraud, criminal or negligent
conduct in connection with the business relationship of the parties; or (c)
becomes insolvent or involved in any liquidation or termination of business,
adjudication as bankrupt, assignment for the benefit of creditors, invoking of
the provisions of any law for the relief of debtors, or the filing against a
party in any similar proceedings. USWC may also terminate this Agreement by
written notice if there is any substantial change in the management or control
of Agent's business.
3. In the event Agent unfairly and inaccurately disparages USWC or
USWC's Services, or makes any material misrepresentation to Agent's customers
regarding USWC or USWC's Services, USWC may immediately terminate this
Agreement.
4. Notwithstanding provisions contained elsewhere in this Agreement,
if Agent fails in any manner to meet its objective as described in Paragraph
IV-13 hereof, USWC may, at its sole discretion, in the absence of a mutually
acceptable contingency plan to meet that objective, declare a material breach
of this Agreement and immediately terminate this Agreement.
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Termination of this Agreement under the provisions of this paragraph shall be
USWC's sole remedy for failure of Agent to meet its objective.
5. If Agent sells products and services which compete with USWC
network products and services (defined as core products in Appendix A) during
the term of this agreement, it will be grounds for immediate termination.
6. Upon termination or non-renewal of this Agreement, Agent shall
immediately:
(a) Cease holding itself out, in any other manner as a
representative of the Services.
(b) Discontinue any and all use of Marks (as defined in
Section VIII hereof) except to identify the
Services, including but not limited to such use in
advertising or business material of Agent;
(c) Return to USWC all technical manuals and other
proprietary information described in Section IX
hereof.
(d) Remove and return to USWC or obliterate, at USWC's
request, any and all signs, stationery or other
material supplied without charge by USWC.
(e) Notify and arrange for all publishers and others who
may identify, list, or publish Agent's name as an
Agent of USWC (including but not limited to
publishers of telephone directories, yellow pages,
and other business directories) to discontinue such
listings.
(f) Complete all orders in process, including the
transmittal of orders to USWC.
VIII. Trade Names and Trademarks
1. During the term of this Agreement, unless otherwise prohibited by
USWC, pursuant to any applicable provision herein, Agent may refer to itself as
USWC's "STRATEGIC AGENT" solely in conjunction with the sale of authorized
Services to be sold by Agent hereunder and solely in Agent's territory. This
Agreement authorizes Agent the right to use USWC Logo as outlined in the
Graphic Guidelines as published by USWC from time to time.
2. Notwithstanding the foregoing, in no case shall Agent refer to
itself as a "STRATEGIC AGENT" or use any USWC Marks in advertising or other
promotional material or activity without first obtaining, for each proposed
use, USWC's prior express written permission, which approval shall not be
unreasonably withheld or delayed. Agent shall, solely at Agent's expense and
prior to use of any USWC Marks, make any and all changes, corrections or
alterations to any such proposed material or activity which USWC, in its sole
discretion, deems
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<PAGE> 8
necessary or advisable. Nothing in this Agreement shall be construed as waiving
Agent's obligation to obtain prior written permission before use of any USWC
Marks. See attached, Appendix F incorporated herein by reference, for
description of co-marketing and co-advertising funds.
3. USWC shall have the right, at all reasonable times, to conduct
during normal business hours an examination of the facilities and equipment of
Agent utilized in selling or providing the Services offered by Agent hereunder
in conjunction with any USWC Mark and to interview Agent's personnel to
determine whether such sale and provision of Services by Agent comply with USWC
standards of quality for the sale and provision of such Services. If at any
time the sale and provision of such Services by Agent fail, in the sole opinion
of USWC, to conform with the standards of quality of USWC, USWC may notify
Agent. Upon such notification, Agent shall promptly cease to use any USWC Mark
until the standards of quality have been met to the satisfaction of USWC and
such satisfaction is evidenced in writing by USWC.
4. Agent acknowledges the value of USWC Marks and the goodwill
associated therewith and acknowledges that such goodwill is a property right
belonging to USWC and that USWC is the owner of all trademark, service mark,
trade name, and other rights in USWC Marks. Agent recognizes that nothing
contained in this Agreement is intended as an assignment or grant to Agent of
any right, title or interest in or to USWC Marks and that this Agreement does
not confer any right or license to grant sublicenses or permission to third
parties to use any USWC Mark and is not assignable. Agent will do nothing
inconsistent with USWC's ownership of USWC Marks, and all rights, if any, that
may be acquired by use of USWC Marks by Agent shall insure to the benefit of
and be on behalf of USWC. Agent will not adopt, use (other than as authorized
herein), register or seek to register any mark anywhere in the world which is
identical to such USWC Marks or which is so similar thereto as to constitute a
deceptive colorable imitation thereof or to suggest or imply some association,
sponsorship, or endorsement by USWC. USWC makes no warranties regarding its
ownership of any rights in or the validity of any USWC Mark.
5. Agent agrees to notify USWC of any unauthorized use of USWC Marks
by others promptly as it comes to Agent's attention. USWC shall have the sole
right to engage in infringement or unfair competition proceedings involving
USWC Marks.
6. Upon termination of this Agreement, any permission or right to use
USWC Marks granted hereunder shall cease to exist and Agent shall immediately
cease any use of such marks and immediately cease referring to itself as a
USWC-authorized Agent or authorized distributor. Agent shall also promptly
return to USWC all materials in its possession or control displaying any USWC
Marks or referring to Agent as a USWC-strategic Agent.
7. Agent agrees to the use by USWC of Agent's "Marks" in any jointly
or cooperatively sponsored advertisement or promotional material. Except as
qualified herein, the same restrictions apply to USWC on the use of Agent's
"Marks" as applied to Agent in the use of USWC's "Marks."
8
<PAGE> 9
IX. Confidential Information
Agent may receive or have access to records and information, whether
written or oral, which USWC considers to be confidential and proprietary,
including technical information such as specifications, drawings, guidelines,
models, and information which relates to USWC's present and future development
of business activities. Such information shall be designated by USWC as
confidential and/or proprietary, and Agent shall hold such confidential or
proprietary information in trust and confidence for USWC, shall use it only for
the purposes permitted hereunder, and shall deliver to USWC all such records
and information, in written, electronic or graphic form, upon expiration or
termination of this Agreement. Nothing in this paragraph shall be construed to
limit the use of or dissemination by Agent of such information as is previously
known to Agent or is publicly disclosed by USWC either prior or subsequent to
Agent's receipt of such information from USWC.
X. Indemnification
1. Agent agrees to indemnify, hold harmless, and defend USWC from any
and all claims, actions, damages, expenses, and other liabilities, or
misrepresentation, including Agent making a commitment beyond that specified in
the original written proposal which did not have prior USWC approval, including
reasonable attorney's fees and costs of litigation, resulting from Agent's
negligent acts, omissions, or misrepresentations regardless of the form of
action. In no event shall USWC be liable for incidental, special, or
consequential damages to anyone arising out of the Agreement.
2. USWC agrees to indemnify, hold harmless, and defend Agent from any
and all claims, actions, damages, expenses, and other liabilities, including
reasonable attorney's fees and costs of litigation, resulting from USWC's
negligent acts, omissions, or misrepresentations regardless of the form of
action. In no event shall Agent be held liable for incidental, special, or
consequential damages to anyone arising out of this Agreement.
3. Each party agrees to cooperate fully with the other in the
fulfillment of its respective obligations under this Section X,
Indemnification.
XI. General Provisions
1. Agent may not assign this Agreement in whole or in part without the
prior written consent of USWC. Any attempt to assign any of the rights, duties,
or obligations of this Agreement without such consent shall be void and shall
be considered by USWC to be grounds for immediate termination of this
Agreement.
2. Unless otherwise provided, this Agreement can be modified only by a
written
9
<PAGE> 10
amendment duly signed by persons authorized to sign agreements on behalf of
Agent and USWC and shall not be modified or supplemented by any course of
dealing or trade usage or verbal commitment.
3. All notices, requests, or other communications, other than orders
placed with the designated interface, requests for custom pricing
proposals/quotes, requests, regarding availability of facilities placed with
the Agent Vendor Service Center (AVS) or requests for advertising approval,
shall be deemed to have been duly given when delivered in person or when
deposited in the United States Mail, postage prepaid and addressed as follows:
To Agent:
To USWC: Vice President - B!S Marketing
U S WEST Communications, Inc.
Suite 710, 421 SW Oak Street
Portland, OR 97204
or as such addressee or address is changed by notice to the other party.
4. Agent shall comply with all applicable federal, state and local
laws and regulations which may be applicable to Agent as an employer of labor.
Agent shall comply with all other applicable federal, state, county, and local
laws, ordinances, regulations, and codes in the performance of this Agreement,
including the procurement of permits, licenses, and certificates where needed,
excluding those licensing and other requirements which are the obligation of
USWC in reference to the services offered hereunder. Agent shall bear all costs
associated with compliance with laws including but not limited to procurement
of permits, licenses, and certificates. Agent further agrees to indemnify USWC
for any loss, damage, liability, claim, or demand or any penalties, including
costs, expenses, and reasonable attorney's fees assessed against USWC that may
be sustained by reason of Agent's failure to comply.
5. Unless exempt under the laws and rules and regulations of the
Secretary of Labor or other proper authority, this Agreement is subject to
applicable laws and executive orders relating to equal employment and
non-discrimination in employment. The parties hereto shall not discriminate in
their employment practices against any person by reason of race, religion,
color, sex, age, sexual orientation or national origin, and agree to comply
with the provisions of said laws and orders as well as all laws and orders
relating to the employment of the handicapped, the employment of veterans, and
the use of minority business enterprises to the extent any such laws and orders
are applicable to the performance of work and furnishing of services,
equipment, materials, or supplies hereunder. For this purpose, the provisions
of such laws and orders and pertinent regulations issued hereunder as now in
force or hereafter amended shall be deemed an
10
<PAGE> 11
integral part of this Agreement to the same extent as if written at length
herein.
6. Dispute Resolution
6.1 Other than those claims over which a regulatory agency has
exclusive jurisdiction, all claims, regardless of legal theory, whenever
brought and whether between the parties or between one of the parties to this
Agreement and the employees, Agents or affiliated businesses of the other
party, shall be resolved by arbitration. A single arbitrator engaged in the
practice of law and knowledgeable about telecommunications law shall conduct
the arbitration in accordance with the then current rules of the American
Arbitration Association ("AAA").
6.2 All expedited procedures prescribed by the AAA shall apply. The
arbitrator's decision shall be final and binding, and judgment may be entered
in any court having jurisdiction thereof.
6.3 Other than the determination of those claims over which a
regulatory agency has exclusive jurisdiction, federal law (including the
provisions of the Federal Arbitration Act, 9 U.S.C. Sections 1-16) shall govern
and control with respect to any issue relating to the validity of this
Agreement to arbitrate and the arbitrability of the claims.
6.4 If any party files a judicial or administrative action asserting
claims subject to arbitration, and another party successfully stays such action
and/or compels arbitration of such claims, the party filing the action shall
pay the other party's costs and expenses incurred in seeking such stay or
compelling arbitration, including reasonable attorney's fees.
7. Lawfulness. This Agreement and the parties' actions under this
Agreement shall comply with all applicable federal, state, and local laws,
rules, regulations, court orders, and governmental agency orders. If a court or
a governmental agency with proper jurisdiction determines that this Agreement,
or a provision of this Agreement, is unlawful, this Agreement, or the provision
of this Agreement, shall terminate. If a provision of this Agreement is so
terminated but the parties legally, commercially, and practicably can continue
this Agreement without the terminated provision, the remainder of this
Agreement shall continue in effect.
8. Force Majeure. With the exception of payment of charges under this
Agreement, a party shall be excused from performance if its performance is
prevented by any acts or events beyond the party's reasonable control,
including but not limited to: severe weather and storms; earthquakes or other
natural occurrences; strikes or other labor unrest; power failures; computer
failures; nuclear or other civil or military emergencies, or acts of
legislative, judicial, executive, or administrative authorities.
9. Severability. If any of the provisions of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate or render unenforceable the entire Agreement, but rather the entire
Agreement shall be construed as if not containing the
11
<PAGE> 12
particular invalid or unenforceable provision or provisions, and the rights and
obligations of each party shall be construed and enforced accordingly.
10. Nonwaiver. The failure of either party to enforce strict
performance of any provision of this Agreement shall not be construed as a
waiver of its rights to assert or rely upon such provision or any other
provision of this Agreement. For any waiver to be binding, it shall be made in
writing and signed by both parties.
11. All obligations and duties which by their nature extend beyond the
expiration or termination of this Agreement shall survive and remain in effect
beyond any expiration and termination.
12. This Agreement is governed by the laws of the State of Colorado
and venue and jurisdiction of any suits brought hereunder shall be in Colorado.
13. This Agreement, together with the Appendices attached hereto,
shall constitute the entire Agreement between the parties and supersedes any
previous oral or written agreements relating to the subject matter hereof.
Unless otherwise stated herein, any other communications whether oral or
written, regarding the rights or obligations of either party under this
Agreement, whether made prior or subsequent to the effective date of this
Agreement, shall not be considered binding on either party unless such
communication is reduced to writing and signed by both parties.
14. Both parties represent they have read this Agreement, understand
it and agree to be bound by all the terms and conditions stated herein.
By /s/ Signature illegible By /s/ Access Communications
------------------------------ ---------------------------------
Vice President USWC Authorized Representative
U S WEST Communications, Inc. /s/ Jeff Veres
------------------------------ ---------------------------------
USWC Agent
1/29/98 2/15/98
------------------------------ ---------------------------------
Date Date
12
<PAGE> 13
APPENDIX A
PRODUCT AND SERVICE LIST
<TABLE>
<CAPTION>
CONTRACTUAL PRODUCTS CORE PRODUCTS
-------------------- -------------
<S> <C>
o Advanced Intelligent Network Services (AIN) X
o Analog Private Line X
o ATM X
o Access2 (PCS) X
o Business Voice Messaging Service (BVMS) X
o Centrex Services X
o Customized Call Management Services X
o Customer Management Services (CMS) X
o Central Office - Automatic Call Distribution (CO-ACD) X
o Command A Link (CAL) X
o Commercial Video X
o Custom Calling Services X
o Digital Subscriber Line (xDSL) X
o DID X
o Two Way DID X
o Digipac X
o Digital Data Service I (DDS I) X
o Digital Data Service II (DDS II) X
o Digital Signal Level 1 (DS1) X
o Digital Signal Level 3 (DS3) X
o Digital Special Access X
o Basic and Advanced Digital Switched Service X
o Enhanced Fax Services X
o Frame Relay X
o Frame Relay Reports X
o !NTERACT Internet Services X
o !NTERACT Internet Security Services X
o !NTERACT Web Hosting Services X
o !NTERACT Web Development Services X
o !NTERACT E-Commerce Services X
o ISDN X
o ISDN Single Line Service X
o Market Expansion Line X
o Managed Data Services (MDS) X
</TABLE>
Printed: January 23, 1998 13
<PAGE> 14
PRODUCT AND SERVICE LIST (cont.) APPENDIX A
<TABLE>
<CAPTION>
CONTRACTUAL PRODUCTS CORE PRODUCTS
-------------------- -------------
<S> <C>
o Network Application X
o Private Switch/Automatic Location Identification (PS/ALI) X
o Select Call Routing X
o Self Healing Alternate Route Protection (SHARP) X
o Self Healing Alternate Route Protection Plus (SHARP Plus) X
o Self Healing Network Services (SHNS) X
o Single Number Service (SNS) X
o SwitchNet 56 (SN56) X
o Transparent LAN Service (TLS) X
o Training Courses X
o Two Way WATS X
o WATS X
o Universal Access Service (UAS) X
o 800 Service X
o 800 ServiceLine X
</TABLE>
Subject to availability, services listed above may not be available in all
areas. Agent is authorized to offer listed services in the designated territory
shown in Appendix B. This does not preclude Agent from selling other USWC
services in accordance with provision IV, 3 of the Agreement or from
participating in special projects identified by USWC. Compensation for a
significant sale or sales will be considered on an individual case basis (see
Sales and Efficiency Improvement Incentive, Appendix C, Page 21).
Printed: January 23, 1998 14
<PAGE> 15
APPENDIX B
TERRITORY SERVED
Colorado
Printed: January 23, 1998 15
<PAGE> 16
APPENDIX C
STRATEGIC AGENT COMPENSATION
COMPENSATION SCHEDULE
Compensation shall be earned by Agent in two installments hereinafter referred
to as the "initial compensation" and the "remaining compensation". The specific
compensation schedules are as follows:
For sale of services to be installed within six (6) months after date
of sale, initial compensation of thirty-five percent (35%) shall be earned as of
the date of sale and receipt of sold account package. Remaining compensation of
sixty-five (65%) shall be earned upon receipt and acknowledgment of an updated
customer record.
For sales of services to be installed within seven to twelve months
after date of sale, initial compensation of fifteen percent (15%) shall be
earned as of date of sale and receipt of a sold account package. Remaining
compensation of eighty-five percent (85%) shall be earned upon receipt and
acknowledgment of an updated customer record.
For sale of services to be installed in more than twelve months after
the date of sale, one hundred percent (100%) compensation shall be earned upon
receipt and acknowledgment of an updated customer record.
For month-to-month sales, one hundred percent (100%) compensation will
be earned upon receipt and acknowledgment of an updated customer record.
All earned compensation shall be accrued during each calendar month and paid to
Agent within the following month after the end (25th day) of the month in which
the compensation is earned.
In all cases, remaining compensation amounts shall be paid based on the
installation of service until USWC has upgraded its customer records systems.
Once USWC's customer records systems upgrades are completed, remaining Agent
compensation shall be paid in a similar payment schedule as prior to customer
records systems upgrades. USWC shall provide thirty (30) days advance notice to
Agent of any revisions to this Compensation Schedule.
If sale is canceled prior to installation all compensation paid shall be
refunded to USWC within thirty (30) days of sale cancellation date, or at the
discretion of USWC deducted from future compensation payments. If sale is
canceled within one - six (1-6) months of installation U S WEST will collect
seventy-five percent (75%) of compensation paid. If sale is canceled after seven
- - twelve (7-12) months, U S WEST will collect fifty percent (50%) of
compensation paid.
Printed: January 23, 1998 16
<PAGE> 17
APPENDIX C
Compensation Terms
Compensation for Products and Services Sales will be paid as a percentage of the
contract value. If a contract sale, compensation is based on the number of
months of recurring revenue of the contract term. If a month-to-month sale,
compensation is based on twelve (12) months recurring revenue value. Conditions
listed with specific products may alter these terms. Special product exceptions
are listed in Appendix C, Page 22.
Agents converting their own original month-to-month sale to a contract within
twelve (12) months of installation will be compensation on a prorated netting
formula. Prorated netting does not apply when a different sales entity was
responsible for the original sale.
- --------------------------------------------------------------------------------
EXAMPLE: Agent sells a product/service on a month-to-month payment plan and is
compensated based on twelve (12) months' value. After three (3) months, the same
Agent converts the sale from month-to-month to a three (3) year contract. The
Agent will then receive compensation for a two (2) year contract value (pro
rated netting, thirty-six (36) months minus twelve (12) months' value previously
paid). After twelve (12) months, full contract value will be used (no
prorating).
- --------------------------------------------------------------------------------
Compensation for sales for shared tenant/reseller/community of interest
applications will be paid only upon the prior written approval of USWC. Sales to
U S WEST Companies will also be paid only upon the prior written approval of
USWC. Furthermore, no compensation will be paid to Agent where, in the opinion
of USWC, Agent is acting as a conduit for a previously negotiated sale between
customer of record and USWC. Also, no compensation will be paid to Agent, where,
in the opinion of USWC, Agent is acting as a conduit for a previously negotiated
sale made by a party other than Agent or their bonafide employees. Agent will
not receive compensation for USWC products and services sold to itself or
affiliates.
Taxes (i.e., sales, use, excise, city franchise, etc.) will not be calculated in
compensation payments to Agents.
For administrative purposes, no compensation drafts will be issued for less than
$100.00. All references to payment/compensation are one-time payments unless
otherwise stipulated.
All contracts compensated must have early termination liability. Contracts
without early termination liability will be compensated on a month-to-month
basis. Net "New Station Lines" is defined as New Contracted Stations less all
removed station lines during contract period.
Sales Revenue will be credited once USWC has verified customer is accurately
billed for contracted service. Credit for this revenue may be applied in a
subsequent year against that year's objective.
Printed: January 23, 1998 17
<PAGE> 18
APPENDIX C
On sales of contracted services, compensation will be paid on the gross contract
value. This value is considered to be all recurring revenues for the life of the
contract plus any prepayment of recurring revenues. Renegotiated contracts and
contract conversions on specific products/services may be allowed from
time-to-time. Compensation on these contracts will be paid on the "Net New
Term", which is defined as the number of months' difference between the
expiration date on the contract being renegotiated (old contract) and the
renegotiated (new) contract expiration date. Contract value is established by
the new recurring revenues multiplied by the Net New Term.
No compensations will be paid nor revenue credit allowed for:
o Nonrecurring Charges
o Access Revenues except for Digital Special Access and
Digital Switched Service Trunks
o Network Access Registers (NARs)
o Centrex Exchange Access
o Taxes
o Right-to-Use Fees
o Customer Access Line Charge (CALC) unless otherwise indicated
o Usage unless otherwise stipulated
o Sales that transfer the billing from one party to another on
existing service
o Sales to Residential Customers
o Sales to Strategic/House Accounts
For month-to-month services sold by Agent which are removed by the end-user
within sixty (60) days of installation, USWC will retrieve from Agent a prorated
amount of compensation paid.
Commission and Payment Structure by Product
<TABLE>
<CAPTION>
NEW EXTENSIONS/CONVERSIONS/
PRODUCT SALES RENEWALS NOTES
------- ----- ----------------------- -----
<S> <C> <C> <C>
Advanced Intelligent Network
Services (AIN) (*)% (*)%
Access 2 (PCS) See pg. 29 See pg. 29 See page 29, Appendix C
Analog Private Line (*)% (*)% See page 25, Appendix C
ATM (*)% (*)% See page 27, Appendix C
Business Voice Messaging Service
(BVMS) (*)% (*)% See page 28, Appendix C
Centrex Services See pg. 22 See pg. 22 See page 22, Appendix C
for details on Centrex 21,
Centrex Prime and general
Centrex services
</TABLE>
Printed: January 23, 1998 18
<PAGE> 19
APPENDIX C
<TABLE>
<CAPTION>
NEW EXTENSIONS/CONVERSIONS/
PRODUCT SALES RENEWALS NOTES
------- ----- ----------------------- -----
<S> <C> <C> <C>
Customized Call Management
Services (*)% (*)%
Customer Management Services
(CMS) (*)% (*)%
Central Office - Automatic Call
Distribution (CO-ACD) (*)% (*)% See page 22, Appendix C
Command A Link (CAL) (*)% (*)%
Commercial Video (*)% (*)% See page 27, Appendix C
Custom Calling Services (*)% (*)%
Digital Subscriber Line (xDSL) (*)% (*)% See page 27, Appendix C
DID (*)% (*)% See page 28, Appendix C
Two Way DID (*)% (*)% See page 28, Appendix C
Digipac (*)% (*)% See page 28, Appendix C
Digital Data Service I (DDS I) (*)% (*)%
Digital Data Service II (DDS II) (*)% (*)% See page 24, Appendix C
Digital Signal Level I (DS1) (*)% (*)%
Digital Signal Level 3 (DS3) (*)% (*)%
Digital Special Access (*)% (*)%
Basic and Advanced Digital
Switched Service (*)% (*)% See page 29, Appendix C
Enhanced Fax Services (*)% (*)% See page 30-31, Appendix C
Frame Relay (*)% (*)%
Frame Relay Reports (*)% (*)%
!NTERACT Internet Services (*)% (*)% See page 25, Appendix C
!NTERACT Internet Security
Services (*)% (*)%
!NTERACT Web Hosting Services (*)% (*)%
!NTERACT Web Development
Services (*)% (*)%
!NTERACT E-Commerce Services (*)% (*)%
ISDN (*)% (*)% See page 23, Appendix C
</TABLE>
Printed: January 23, 1998 19
<PAGE> 20
APPENDIX C
<TABLE>
<CAPTION>
NEW EXTENSIONS/CONVERSIONS/
PRODUCT SALES RENEWALS NOTES
------- ----- ----------------------- -----
<S> <C> <C> <C>
ISDN Single Line Service (*)% (*)%
Market Expansion Line (*)% (*)%
Managed Data Services (MDS) (*)% (*)%
Network Application (*)% (*)% See page 28, Appendix C
Private Switch/Automatic Location
Identification (PS/ALI) (*)% (*)% See page 23, Appendix C
Select Call Routing (*)% (*)%
Self Healing Alternate Route
Protection (SHARP) (*)% (*)%
Self Healing Alternate Route
Protection Plus (SHARP Plus) (*)% (*)%
Self Healing Network Services
(SHNS) (*)% (*)%
Single Number Service (SNS) (*)% (*)%
SwitchNet 56 (SN56) (*)% (*)%
Transparent LAN Service (TLS) (*)% (*)% See page 26, Appendix C
Training Courses (*)% (*)%
Two Way WATS (*)% (*)% See page 25, Appendix C
WATS (*)% (*)%
Universal Access Service (UAS) (*)% (*)% See page 27, Appendix C
800 Service (*)% (*)%
800 Service Line (*)% (*)% See page 30, Appendix C
</TABLE>
Printed: January 23, 1998 20
<PAGE> 21
Performance Bonus Schedule
The following Performance Plan Bonuses will be paid when the listed cumulative
revenue plateau is reached. Credits will be earned where an Agent reaches the
respective revenue plateau(s) for compensated sales within a calendar year.
Accumulated revenue credits which exceed $1M will repeat the Performance Bonus
Schedule.*
<TABLE>
<CAPTION>
Revenue Performance
Plateau Bonus
------- ------------
<S> <C>
$(*) $(*)
$(*) $(*)
$(*) $(*)
$(*) $(*)
</TABLE>
*Example: Agent reaches $1.75M in cumulative revenue during the calendar year.
<TABLE>
<CAPTION>
Cumulative Incremental Cumulative Bonus
Revenue Bonus Amount Amount
---------- ------------ ----------------
<S> <C> <C>
$(*) $(*)
$(*) $(*) $(*)
$(*) $(*) $(*)
$(*) $(*) $(*)
</TABLE>
Strategic Incentives Plan
An incentive may be offered from time to time to promote strategic initiatives.
These incentives will be in addition to the existing Strategic Agent terms and
conditions, and may modify the terms and conditions, or may offer terms and
conditions completely outside the Strategic Agent Agreement. The strategic
initiatives will be offered by addendum to the Agreement and will target certain
products, services, geographies, efficiency improvements and other program
objectives to improve sales of USWC products. Thirty (30) day advance
notification will be given prior to start of initiatives.
USWC will be the Final Authority in all matters relating to Strategic
Initiatives.
Sales and Efficiency Improvement Incentive
Agents are encouraged to identify sales opportunities for USWC's services in
quantities or configurations beyond those listed in Appendix C. If it is
determined by USWC that the revenues, profitability, terms and conditions of
sale are substantially more beneficial to USWC sufficient to warrant
individualized recognition, compensations may be negotiated on an individual
case basis by the parties.
Printed: January 23, 1998 21
<PAGE> 22
APPENDIX C
SPECIAL PRODUCTS DESCRIPTIONS AND EXCEPTIONS
A. CENTRAL OFFICE SERVICE
1. Centrex Services
--------------------------------------------------------------
CONDITIONS:
Centron and Centrex Plus
o Compensation for these services: (*)% for new contracts,
(*)% for renewals/extensions.
o Compensation for large system sales of 2000 stations or
more will be negotiated on an Individual Case Basis. USWC
will be the final authority in these negotiations, which
negotiations must be finalized prior to the sale being
closed.
o New stations added to an existing system will pay at the
new sales rate for twelve (12) months recurring revenue
value for month-to-month sales, or for the months
remaining on an existing contract.
Centrex 21
o Compensation (*)% for new contracts with additional
compensation as outlined below: New lines added to the
customer's contract at the time of initial sale offers
additional compensation. The total commission for sales
will increase by the amount corresponding number of lines
added.
<TABLE>
<CAPTION>
No. of new lines Additional Compensation
- ---------------- -----------------------
<S> <C>
1 (*)%
2-3 (*)%
4+ (*)%
</TABLE>
o Centrex 21 contracts are compensable for minimum of 6
lines at each of the customer locations.
o 50% of compensation paid at install and 50% of
compensation paid 3 months later.
o Centrex Plus to Centrex 21 conversion paid on the basis of
"net new term" as described on page 18 of Appendix C.
o (*)% compensation will be paid on lines added by customer
and not included on original service contract.
Printed: January 23, 1998 22
<PAGE> 23
APPENDIX C
Centrex Prime
o Compensation will be (*)% for new sales.
o Additional NAR's are not compensable.
--------------------------------------------------------------
2. Central Office - Automatic Call Distribution (CO-ACD)
-----------------------------------------------------------------------
CONDITION:
o Month-to-month service is available only for customer ordering (*)
or less positions.
3. Custom Calling Services
4. Market Expansion Line (MEL)
5. Advanced Intelligent Network Services (AIN)
6. Private Switch/Automatic Location Identification (PS/ALI)
-----------------------------------------------------------------------
CONDITIONS:
o A PS/ALI contract cannot exceed the length of the contract term of
the underlying months remaining of the E911 contract for the
specific serving community.
Example: The customer wants to sign a 60 month contract, however, the
communities E911 system is on a 48 month contract with 34 months
remaining. The PS/ALI contract must be limited to 34 months.
------------------------------------------------------------------
Printed: January 23, 1998 23
<PAGE> 24
APPENDIX C
B. TRANSPORT SERVICES
1. Digital Data Service I (DDSI)
2. Integrated Services Digital Network (ISDN)
--------------------------------------------------------------
CONDITIONS:
o In states where contract terms are available no
compensation will be paid, nor revenue credit allowed for
(*) sales of Basic and Primary Rate ISDN.
o Single Line Service includes multi-call and Work at Home
Applications.
3. Digital Data Service II (DDS II)
--------------------------------------------------------------
CONDITION:
o No compensation will be paid, nor revenue credit allowed
for (*).
--------------------------------------------------------------
4. Digital Signal Level 1 (DS1) and Digital Signal Level 3 (DS3)
5. Self Healing Alternate Route Protection (Sharp and SharpPlus)
6. Self Healing Network Services (SHNS)
Printed: January 23, 1998 24
<PAGE> 25
APPENDIX C
7. Digital Special Access
a. Digital Data Service II (DDS II)
b. Digital Signal Level 1 (DS1) and Digital Signal Level 3
(DS3)
CONDITIONS:
Compensation will not be paid, nor revenue credit allows for:
o (*)
o (*)
o (*)
o (*)
8. WATS/800 Service
9. Two Way WATS
CONDITION:
o Revenue credit is $(*) per line for WATS, 800 Service and
Two Way WATS. Compensation percentage is applied against
(*).
--------------------------------------------------------------
10. Analog Private Line
--------------------------------------------------------------
CONDITIONS:
No compensation will be paid, nor revenue credit allows for:
o (*)
o (*)
o (*)
--------------------------------------------------------------
11. SwitchNet 56 (SN56)
Printed: January 23, 1998 25
<PAGE> 26
APPENDIX C
12. !NTERACT Internet Services
--------------------------------------------------------------
CONDITIONS:
o (*)
o Dedicated Access includes:*
- 56 Kbps (via Point-to-Point Digital Private Line)
- 1.544 Mbps (via Point-to-Point Digital Private
Line)
- 4, 10 or 16 Mbps over a LAN (via native Ethernet or
Token Ring)
- Frame Relay in the following six PVC speeds, as
well as dial-access:
o 56 Kbps o 512 Kbps
o 128 Kbps o 768 Kbps
o 256 Kbps o 1.544 Kbps
- High Speed DS3 Access
*NOTE: Represents Internet Services only - Does not include
Transport.
13. Frame Relay
14. Transparent LAN Service (TLS)
--------------------------------------------------------------
CONDITION:
o No compensation will be paid, nor revenue credit allowed for
(*) sales.
--------------------------------------------------------------
15. Select Call Routing
Printed: January 23, 1998 26
<PAGE> 27
APPENDIX C
16. Single Number Service (SNS)
--------------------------------------------------------------
CONDITIONS:
o The revenue value against which the compensation
percentage is applied is comprised of (*)
o Contracts are presently limited to (*).
--------------------------------------------------------------
17. Command-A-Link (CAL)
18. Asynchronous Transfer Mode (ATM)
--------------------------------------------------------------
CONDITION:
o No compensation will be paid, nor revenue credit allowed
for (*) sales.
--------------------------------------------------------------
19. Digital Subscriber Line (xDSL)
--------------------------------------------------------------
o No compensation will be paid for (*).
Printed: January 23, 1998 27
<PAGE> 28
APPENDIX C
20. Universal Access Service (UAS)
--------------------------------------------------------------
o If a DSS contract in force, compensation will be available
based on the (*).
--------------------------------------------------------------
C. OTHER TELECOMMUNICATIONS SERVICES
1. Commercial Video
--------------------------------------------------------------
CONDITION:
o No compensation will be paid, nor revenue credit allowed
for (*) sales.
--------------------------------------------------------------
2. Direct Inward Dialing (DID) and Two Way DID
--------------------------------------------------------------
CONDITIONS:
o (*)
o (*)
o (*)
--------------------------------------------------------------
3. Digipac
Printed: January 23, 1998 28
<PAGE> 29
APPENDIX C
4. Digipac Usage
--------------------------------------------------------------
CONDITIONS:
o For Contract Sales only - Usage will not be compensated
for (*) sales.
o Usage compensation will be paid quarterly, in the month
following the end of the quarter.
--------------------------------------------------------------
5. Network Applications
--------------------------------------------------------------
CONDITION:
o (*)
--------------------------------------------------------------
6. Business Voice Messaging Service (BVMS)
--------------------------------------------------------------
CONDITION:
o Contracts are available for sales of (*) Mailboxes or
more.
--------------------------------------------------------------
7. Access2 (PCS)
--------------------------------------------------------------
o (*)
o The Business 50 Plan is applicable for Agent regardless of
the number of phones purchased. All other terms of the
Business 50 Plan apply.
Printed: January 23, 1998 29
<PAGE> 30
APPENDIX C
D. SPECIAL PRODUCT CATEGORY
1. Basic and Advanced Digital Switched Services Trunks/PRI
Channels
Compensation will be paid as a percentage of the contract
value as follows. (*)
Strategic Agent Compensation: (*)%
--------------------------------------------------------------
CONDITION:
o Revenue value and compensation includes Basic Trunks and DID
Trunks. For DS1 portion, refer to DS1 compensation schedule.
Configuration portion of PRI Service will be paid at (*)%.
o Payment on conversion of Centrex services to Basic or Advanced
Trunks will be based upon "net new term" as described on page
18 Appendix C.
--------------------------------------------------------------
2. 800 ServiceLine
Compensation will be paid per line as follows:
Compensation: $(*)
--------------------------------------------------------------
CONDITIONS:
o (*)
o (*)
o Revenue credit is $(*) per line in states where the
recurring charge is $(*). Revenue credit is $(*) per line
in states where the recurring revenue is $(*) per month.
--------------------------------------------------------------
Printed: January 23, 1998 30
<PAGE> 31
APPENDIX C
3. FaxServices
Compensation will be paid per line or as a percentage of
contract value as listed:
<TABLE>
<CAPTION>
Revenue
Product Agreement Type Compensation Credit
------- -------------- ------------ -------
<S> <C> <C> <C>
o FaxMail plus Month-to-month $(*) $(*)
1 Year Contract $(*) (*)
o Broadcast Fax Month-to-month $(*) $(*)
1 Year Contract $(*) (*)
o Never Busy Fax Month-to-month $(*) $(*)
1 Year Contract $(*) (*)
o Fax Request Month-to-month $(*) $(*)
1 Year Contract $(*) (*)
</TABLE>
Custom Sales
Sales of $(*) or more in total contract value are Custom
Sales. Design, pricing, and compensation on Custom Sales
must be approved utilizing the Individual Case Basis (ICB)
application process. Approved sales will be compensated as
follows:
<TABLE>
<CAPTION>
Contract Value Compensation Revenue Credit
-------------- ------------ --------------
<S> <C> <C>
$(*)-$(*) (*)% (*)
$(*) (*)% (*)
</TABLE>
4. Training Courses
Printed: January 23, 1998 31
<PAGE> 32
APPENDIX D
U S WEST AGENT MARKETING
1998 STRATEGIC AGENT
ANNUAL BUSINESS PLAN & OBJECTIVE
TABLE OF CONTENTS
SECTION i. Strategic Agent Objective
SECTION I. Business Information
SECTION II. Financial Summary
1. Major Products and Services other than U S WEST
2. Revenue Projections
SECTION III. Market Analysis
1. Market Segmentation
2. Target Markets
3. Competition
SECTION IV. Strategic Agent Business Profile
1. Personnel Profile
2. Management Team
3. Sales & Marketing
4. Technical Expertise
SECTION V. Strategic Agent Business Plans
1. Strategy and Implementation
2. Investment Plans
SECTION VI. Organization Charts
- --------------------------------------------------------------------------------
SECTION i. 1998 STRATEGIC AGENT OBJECTIVE:
<PAGE> 33
APPENDIX D
(Please print or type. If using electronic spreadsheet, shaded areas will be
calculated.)
SECTION I. BUSINESS INFORMATION
<TABLE>
<S> <C> <C> <C> <C>
Business Name:
--------------------------------------------------------------------------
Branch Owner/Manager: HQ First: HQ Last:
------------------- -------------------
HQ Address:
--------------------------------------------------------------------------
HQ Address 2: HQ Suite:
---------------------------------------- ------------------------
HQ City: HQ State: HQ Zip:
---------------------------------- ----------- -----------
HQ Phone: Area Code: Number:
----------------------- ----------------
HQ FAX: Area Code: Number:
----------------------- ----------------
E-Mail Address:
--------------------------
ADDITIONAL BRANCH OFFICES: For Additional Offices - Repeat rows or attach additional sheets.
Branch Office #1:
Branch Owner/Manager: B1First B1 Last:
------------------------------ -------------------
B1 Address:
---------------------------------------------------------------------------
B1 Address 2: B1 Suite:
---------------------------------------- -------------------------
B1 City: B1 State: B1 Zip:
----------------------------- --------------- -------------
Phone: B1 Area Code: B1 Number:
--------------------- ---------------------
FAX: B1 Area Code: B1 Number:
--------------------- ---------------------
Branch Office #2:
Branch Owner/Manager: B2First B2 Last:
------------------------------ -------------------
B2 Address:
---------------------------------------------------------------------------
B2 Address 2: B2 Suite:
---------------------------------------- -------------------------
B2 City: B2 State: B2 Zip:
----------------------------- --------------- -------------
Phone: B2 Area Code: B2 Number:
--------------------- ---------------------
FAX: B2 Area Code: B2 Number:
--------------------- ---------------------
</TABLE>
1998 Strategic Agent
Business Plan
Page D 2
<PAGE> 34
APPENDIX D
SECTION II. FINANCIAL SUMMARY
1. OTHER MAJOR PRODUCTS AND SERVICES
<TABLE>
<CAPTION>
NATURE OF
RELATIONSHIP
(I.E. DIRECT,
PROVIDER 1998 PRODUCTS DISTRIBUTION)
<S> <C> <C>
1.a. Other Local Network Service Producers
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
1.b. Inter-Lata (LD) Carriers
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
1.c. Hardware (CPE) Vendors
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
1.d. Other Providers (e.g., PCS, Internet, Calling Cards, Training, etc.)
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
</TABLE>
1998 Strategic Agent
Business Plan
Page D 3
<PAGE> 35
APPENDIX D
2. Revenue Projections
<TABLE>
<CAPTION>
1998% OF TOTAL
U S WEST PRODUCTS: 1997 DOLLARS 1998 PROJECTED REVENUE
<S> <C> <C> <C>
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
<CAPTION>
OTHER PRODUCTS AND/OR 1998% OF TOTAL
SERVICES 1997 DOLLARS 1998 PROJECTED REVENUE
<S> <C> <C> <C>
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
TOTAL PRODUCT/SERVICE REV.: $ - $ - $ -
------------- ------------- -------------
U S WEST TOTAL REVENUE: $ - $ - $ -
------------- ------------- -------------
</TABLE>
1998 Strategic Agent
Business Plan
Page D 4
<PAGE> 36
SECTION III. MARKET ANALYSIS
1. MARKET SEGMENTATION
Please characterize your customers based on line size:
Size % Small (less than 24 lines/less than 3 locations)
---------
% Medium (24 - 73 line/3 - 6 locations)
---------
% Large (more than 74 lines/more than 6 locations)
---------
Please segment your total revenue based on the following:
Data %
---------
Voice %
---------
CPE %
---------
Other %
---------
2. TARGET MARKETS
<TABLE>
<CAPTION>
1998 PLANNED (YEAR)
<S> <C> <C>
States covered (specify with 2 letter designation):
---------------- -----------------
---------------- -----------------
---------------- -----------------
---------------- -----------------
<CAPTION>
1998 PLANNED (YEAR)
<S> <C> <C>
Regional Markets Served (cities, MSA's):
---------------- -----------------
---------------- -----------------
---------------- -----------------
---------------- -----------------
</TABLE>
1998 Strategic Agent
Business Plan
Page D 5
<PAGE> 37
APPENDIX D
Vertical Markets Served: (check if applicable)
<TABLE>
<CAPTION>
1998 PROJECTED (YEAR) % OF TOTAL BUSINESS
<S> <C> <C> <C>
Financial Services:
--------------------------- -------------------------- ---------------------
Healthcare:
--------------------------- -------------------------- ---------------------
Education:
--------------------------- -------------------------- ---------------------
State/Local Government:
--------------------------- -------------------------- ---------------------
Federal Government:
--------------------------- -------------------------- ---------------------
Other (specify):
--------------------------- -------------------------- ---------------------
</TABLE>
3. COMPETITION
What companies sell U S WEST competing products within your territory?
<TABLE>
<CAPTION>
Company Vendor/Product Market (Vertical, MSA or city)
<S> <C> <C>
- --------------------------- ---------------------------- ------------------------------
- --------------------------- ---------------------------- ------------------------------
- --------------------------- ---------------------------- ------------------------------
- --------------------------- ---------------------------- ------------------------------
- --------------------------- ---------------------------- ------------------------------
- --------------------------- ---------------------------- ------------------------------
</TABLE>
SECTION IV. STRATEGIC AGENT BUSINESS PROFILE
1998 Strategic Agent
Business Plan
Page D 6
<PAGE> 38
APPENDIX D
1. PERSONNEL PROFILE
<TABLE>
<CAPTION>
1998 PROJECTED (YEAR)
<S> <C> <C>
# of Sales offices:
---------------------- --------------------
# of Sales Representatives:
---------------------- --------------------
# of Sales Representatives dedicated to U S WEST:
---------------------- --------------------
# of Technical Support/Engineers:
---------------------- --------------------
# of Tech. Support/Engineers dedicated to U S WEST:
---------------------- --------------------
# of Administrative support:
---------------------- --------------------
# of U S WEST Project Managers:
---------------------- --------------------
# of Executive Staff:
---------------------- --------------------
</TABLE>
2. MANAGEMENT TEAM
Include Roles, Responsibilities, Background, etc. per Executive:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. SALES
Describe level of sales experience and training among your inside and outside
sales staff:
<TABLE>
<CAPTION>
Title/position Years of sales experience Sales Training courses in last five years
<S> <C> <C>
- -------------------------- -------------------------- --------------------------------------------
- -------------------------- -------------------------- --------------------------------------------
- -------------------------- -------------------------- --------------------------------------------
- -------------------------- -------------------------- --------------------------------------------
- -------------------------- -------------------------- --------------------------------------------
- -------------------------- -------------------------- --------------------------------------------
</TABLE>
1998 Strategic Agent
Business Plan
Page D 7
<PAGE> 39
APPENDIX D
4. TECHNICAL EXPERTISE
Personnel with certifications on CPE and/or network products:
<TABLE>
<CAPTION>
Title/Position Vendor/Product Certification Level Valid Dates
<S> <C> <C> <C>
- -------------------------- -------------------------- ----------------------------- --------------
- -------------------------- -------------------------- ----------------------------- --------------
- -------------------------- -------------------------- ----------------------------- --------------
- -------------------------- -------------------------- ----------------------------- --------------
</TABLE>
SECTION V. STRATEGIC AGENT BUSINESS PLANS
1. STRATEGY AND IMPLEMENTATION
1. a. Suggestions to USWC Strategic Agent Marketing to assist you in
overcoming U S WEST Competition within your market:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. b. Describe acquisition strategy (if applicable):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1998 Strategic Agent
Business Plan
Page D 8
<PAGE> 40
1. c. Describe 1998 Growth Plans:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. d. Additional information which would be useful in helping U S WEST
accurately plan for 1998 Strategic Agent support.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1998 Strategic Agent
Business Plan
Page D 9
<PAGE> 41
2. INVESTMENT PLANS
2. a. Describe training and Marketing Communications plans:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. b. Plans for new facilities (buildings, demo equipment, etc.):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. c Plans for new capabilities (e.g., Managed Data Services (MDS),
maintenance contracts, cable & wiring, etc.):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Page D 10
<PAGE> 42
APPENDIX D
SECTION VI. ORGANIZATION CHARTS
1998 Strategic Agent
Business Plan
(Please attach current Executive Staff and Branch Organization Charts.)
Page D 11
<PAGE> 43
APPENDIX E
PERFORMANCE STANDARDS - STRATEGIC AGENT/AGENT MARKETING (AM)
I. STRATEGIC AGENT RESPONSIBILITIES
1. SALES OBJECTIVE REVENUE ATTAINMENT
a) By EOY, installed sales revenue equals or exceeds
sales objective.
b) Agent shall develop abeyance system/tracking
mechanism to efficiently manage repeat renewal
business opportunities (i.e., contract renewals,
planned conversions, etc.)
2. ADVERTISING SUPPORT PROGRAM PARTICIPATION
a) If participating, Agent shall be timely in responding
to advertising support requests, i.e., due dates for
directory closes, etc.
b) Agent shall insure all advertisements referencing U S
WEST "STRATEGIC AGENT" relationship meet current U S
WEST standards for trademark use. All use of U S WEST
logo must be pre-approved.
c) Agent shall deliver and receive approval of its
marketing/advertising plan prior to release of
available co-marketing and co-advertising funds
outlined in Appendix F.
3. U S WEST PRODUCT/SERVICES TRAINING PARTICIPATION
a) Agent agrees to develop and implement a training plan
identifying appropriate sales and project management
personnel to complete within a mutually agreed upon
time frame.
b) Once initial Agent training has been fulfilled by U S
West, ongoing training requirements due to new hires
or turnover is the responsibility of the Agent.
c) Agent will keep resources up to date and maintain an
accessible area for USWC provided training materials,
brochures and other resource materials.
4. RESPONDING TO U S WEST REFERRALS
a) Clients will be contacted within 24 hours of the
referral unless otherwise requested by the customer.
b) U S WEST products/services must be recommended.
c) Follow-up data reported to AM within 48 hours of
receipt.
d) All referral guidelines to be shared with Agent sales
personnel.
e) Agent must identify themselves as U S WEST Strategic
Agent when responding to U S WEST sales referrals.
Printed: January 23, 1998 32
<PAGE> 44
APPENDIX E
5. PAYMENT REQUIREMENT-IN ORDER TO PROCESS THE INITIAL PAYMENT
FOR SALES THE FOLLOWING INFORMATION MUST BE PROVIDED.
a) Payment Plan Form (PPF)
b) Sold account package
c) Relevant contracts
6. AM, USWC AND STRATEGIC AGENT RESOURCE UTILIZATION
a) Agent will adhere to the responsibility and role
definitions related to resource utilization as
outlined in the Strategic Agent Sales Agreement.
Agent will have designated employee to perform
project management activities as described below:
b) Pre-sale:
- Pricing: Agent will do pricing on USWC services for
which they have been trained and/or given the
tools, i.e., AQCB, to do said pricing.
- Design: Once trained, Agent will do USWC network
design work.
- Contract preparation: Agent will prepare all
appropriate U S WEST contracts available through
AQCB. All other contracts will come through AM.
- Customer records: Agent must have a valid Letter of
agency (LOA) to obtain specific USWC account
information (Customer Proprietary Network
Information or CPNI) via the local Agent Vendor
Service Center (AVS), the Agent Marketing Web Site
or AM as appropriate.
c) Post-sale:
- Agent salesperson or project manager will pass
simple orders directly to the AVS. (For a current
project description, consult your local AM/AVS
product responsibility matrix.)
- For customer sales that are considered projects,
the Sold Account Package will be passed to AM by
the Agent's Project Manager.
- Billing: Agent personnel are responsible for
initial billing explanations and any questions
related to their USWC sale.
- Training: Agent is responsible for customer
training on USWC services.
- Credit information: On new USWC accounts, or
accounts requiring credit updating, the Agent shall
obtain required credit information from the
customer and, if necessary, a deposit or other
acceptable substitute.
- Repair: Agent will work with the appropriate USWC
repair organization on behalf of their customers,
to resolve network repair issues.
- Installation: Agent is responsible for management
of services implementation.
Printed: January 23, 1998 33
<PAGE> 45
APPENDIX E
7. PARTICIPATION IN THE AM/AGENT PERFORMANCE REVIEWS
a) When performance is identified as below standard in
defined areas, the Agent and AM will jointly develop
an action plan to bring performance up to standard.
8. COMMUNICATIONS
a) Agent will inform AM of any organizational changes
within their company that affect the Agent
relationship, i.e., changes in:
- personnel
- product line
- ownership
- agency compensation policies
- business plan
9. PAYMENT VERIFICATION
a) Agent is responsible for verification of accuracy of
AM payments (i.e., AACATS, Performance Bonus, etc.)
If inaccuracies are found, Agent is responsible for
communicating same to AM.
II. AGENT MARKETING RESPONSIBILITIES
1. USWC PRODUCT/SERVICE TRAINING
a) AM will provide training to Agent personnel.
b) AM will provide Agent with updates on products,
pricing or USWC policy changes on an as-needed basis.
c) AM will offer advanced training on emerging
technologies.
2. AGENT SALES COMPENSATION PROCESSING
a) AM will process all completed PPF's received by the
local AM office by locally specified date of the
month, in that month's business. Should there be
required variance in that cut-off date (e.g., at year
end), AM will communicate the date change in a timely
manner. If the PPF is received after the specified
cutoff date, AM will process the PPF in the next
month's business. If a PPF is received by AM that is
inaccurate or incomplete, it will be returned to the
Agent. Upon correction and resubmittal, AM will
process the PPF, under the normal time guidelines.
b) AM is responsible for providing a monthly AACATS
report to the Agent identifying their current month
and YTD results, including specific PPF data on
current month sales and pending PPF's.
3. USWC/AM RESOURCE MATERIALS
a) AM will make available to the Agent, resource
materials and updates for USWC products/services
represented by the Agent.
Printed: January 23, 1998 34
<PAGE> 46
APPENDIX E
4. USWC REFERRALS
a) AM agrees to distribute USWC referrals in a fair and
equitable manner consistent with Agent USWC product
focus, geographic scope and any known prior customer
relationships.
5. PROPRIETARY INFORMATION HANDLING
a) AM will treat the Agent's sales plan, client or
personnel information as proprietary information.
6. AM REPRESENTATIVE AVAILABILITY
a) AM will provide appropriate support to the Agent's
sales efforts. AM personnel shall negotiate with the
Agent if they request special AM support in such
areas as joint calls, sales meeting attendance,
pre-sale support and custom training.
Printed: January 23, 1998 35
<PAGE> 47
APPENDIX F
MARKET DEVELOPMENT PROGRAM (MDP)
USWC will provide co-marketing and co-advertising funds to the Agent. Funds are
provided on the basis of prior year contract revenue for USWC network products
and services. Determination of funded amounts are based on schedule shown below.
Funding amounts will be adjusted on an annual basis. Semi-annual funding expire
on June 30 and Dec. 31 of current year.
Use of this funds are to be approved by Agent Marketing, as a representative of
U S WEST, prior to receipt of funds. Agent must provide in writing purpose of
funds; identifying the period over which funds will be used, communications
media used by funds, plan for tracking success of campaign(s), and other
information that would be useful in determining value of MDP funding approval
should be included in written statement.
Promotion Basis Promotion Level Promotion Expiration
--------------- --------------- --------------------
Compensation based on 0.2% Compensation funds
previous 12 months are available on a
contract revenue on semi-annual basis.
products and services Compensation level
sold. for the next year will
be determined by
Jan. 31.
Printed: January 23, 1998 36
<PAGE> 48
APPENDIX G
TRIAL PROGRAMS
USWC is constantly developing new applications for emerging and existing
technologies and targeting sales efforts to particular geographies. Many of
these new applications or market entry initiatives are concepts which require
concept testing or trials. Agents participate in trials under addendum to this
contract and based on requirements below.
o Participation in any trial is determined by joint agreement
between USWC and selected Agent.
o Selection for trial participation is at the discretion of USWC.
o Compensation for participation in trial programs will be at the
discretion of USWC.
Printed: January 23, 1998 37
<PAGE> 49
DATE: March 24, 1999
TO: U S WEST Strategic Agents
FROM: Dennis Hruska, Sr. Director
RE: Notice of change to Appendix C, Compensation Schedule
As outlined below, U S WEST is revising the compensation schedule described in
your 1998-2000 Sales Agency Agreement, Appendix C.
U S WEST is modifying the payout percentages for contracts submitted where the
installation occurs within six (6) months after the date of sale. Today your
contract reads: "For sale of service to be installed within six (6) months after
date of sale, initial compensation of thirty-five percent (35%) shall be earned
as of the date of sale and receipt of sold account package. Remaining
compensation of sixty-five percent (65%) shall be earned upon receipt and
acknowledgment of an updated customer record. . . . . In all cases, remaining
compensation amounts shall be paid on the basis on the installation of service
until USWC has upgraded its customer service records systems. . . ."
U S WEST is changing these terms. I should now read "For sale of service to be
installed within six (6) months after the date of sale, initial compensation of
fifty-five percent (55%) shall be earned as of the date of sale and receipt of
sold account package. Remaining compensation of forty-five percent (45%) shall
be earned upon receipt and acknowledgment of an updated customer record. . . .
In all cases, remaining compensation amounts shall be paid on the basis on the
installation of service until USWC has upgraded its customer service records
systems."
These changes are effective immediately and are reflected in the compensation
paid at the end of March for February sales.
This notice does not impact compensation schedules for either sales to be
installed within seven to twelve months or sales to be installed more than
twelve months from date of sale.
We recognize the burden that this swift change places on your accounting systems
but we felt that the ninety-day notification period would cause a greater burden
on your business. If you have concerns about this change I will be very happy to
discuss your situation.
Notice of Change to Appendix C, Compensation Schedule
March 24, 1999 Page 1 of 2
<PAGE> 50
Notwithstanding the 90-day provision of Section III in the Strategic Agent
agreement dated January 23, 1998, this change is effective immediately.
Your signature below acknowledges concurrence with this notification.
With Concurrence:
Access Communications
-----------------------------------
Agency Name
Jeffrey A. Veres
-----------------------------------
Authorized Representative
4/7/99
-----------------------------------
Date
/s/ Jeffrey A. Veres
-----------------------------------
Signature (Concur)
Please sign, copy and return the original to:
Linda Ensign
U S WEST Agent Marketing Operations
7800 E. Orchard Road, Suite 390
Englewood, CO 80111
Notice of Change to Appendix C, Compensation Schedule
March 24, 1999 Page 2 of 2
<PAGE> 1
EXHIBIT 10.3
PentaStar Communications, Inc. has applied for confidential treatment for
portions of this Exhibit 10.3. An asterisk (*) indicates those portions that
have been omitted pursuant to the request for confidential treatment. A complete
copy of this Exhibit has been filed separately with the Securities and Exchange
Commission.
STRATEGIC AGENT SALES AGREEMENT
This Agreement is made by and between U S WEST Communications, Inc., a
Colorado corporation (hereinafter "USWC") and ICM-Communications Integration, a
WA corporation (hereinafter "Agent"). For the purposes of this Agreement, the
address of USWC shall be:
Suite 710
421 SW Oak Street
Portland, OR 97204
or as such, address is changed by notice to Agent.
The address of Agent shall be:
4122 128th Ave., SE, Suite 300
Bellevue, WA 98006
For and in consideration of the mutual promises and covenants set
forth hereinafter, the parties do mutually agree as follows:
I. Term of Agreement
The term of this Agreement shall commence on January 1, 1998 and shall
continue in effect for a three (3) year period through December 31, 2000. In
the event Agent and USWC execute the Agreement after January 1, 1998, the term
shall be from the last date of execution until December 31, 2000.
II. Appointment of Agent
1. USWC hereby appoints Agent to exclusively sell U S WEST network
products and other services as well as perform the responsibilities specified
herein under the terms and conditions hereinafter contained.
2. Agent shall perform the duties specified herein only in relation to
data communications and telecommunication products and services (hereinafter
"Services") covered by this Agreement and set forth in the attached, Appendix A
incorporated herein by reference. As the condition of being a strategic Agent,
Agent agrees to sell exclusively those USWC products listed in Appendix A as
core products and provide customer coordination support relative only to such
core products. USWC may, from time to time modify Appendix A by providing
thirty (30) days written notice to Agent.
3. Agent and affiliates (wholly or partially owned subsidiaries,
branch division, other financially encumbered entities of the above agency)
agree not to resell USWC local network products and services available in the
wholesale tariffs. Agent and affiliates further agree not to sell network
products and other services provided by resellers, facilities by-pass
providers, or
<PAGE> 2
other competitive access providers of USWC network products. During the term of
this Agreement and thereafter, USWC reserves the right, without obligation or
liability to Agent, to market telecommunication services, whether through
USWC's own representatives, other Agents, or by any other means. Agent further
agrees that sales to itself and/or affiliates of USWC network facilities,
products or other services, for other than demonstration purposes, are not
compensable under this agreement.
4. Agent hereby accepts such appointment and certifies that except as
specifically provided for herein, it is capable of performing all of its
obligations under this Agreement without assistance from or identification with
USWC.
5. Agent is authorized to perform the responsibilities covered by this
Agreement only in the territory specified in attached, Appendix B incorporated
herein by reference. Agent is not authorized to perform any responsibilities
covered by this Agreement in any other territory unless Agent has first
received USWC's written authorization to do so. USWC may, from time to time
during the term of this Agreement, modify Appendix B by providing thirty (30)
days written notice to Agent.
6. It is expressly understood and agreed that the agency created
herein is a limited agency and that Agent shall have only those rights and
responsibilities specifically described in this Agreement. No agency rights or
responsibility shall arise by operation of law.
7. The parties hereto declare and agree: (a) that Agent will perform
its obligations under this Agreement not as the employee or servant of USWC;
(b) that Agent has and hereby retains the right to exercise full control of and
supervision over the performance of Agent's obligations and full control over
the employment, direction, compensation and discharge of all its employees
assisting in the performance of such obligations; (c) that Agent will be solely
responsible for all matters relating to payment of such employees, including
compliance with Social Security, withholding, and all other regulations
governing such matters; and (d) that Agent shall be responsible for Agent's own
acts and those of Agent's subordinates and employees during the performance of
Agent's obligations under this Agreement.
8. USWC reserves the right to deal directly with the customers in all
matters involving installation, maintenance and billing of Services.
III. Compensation
Compensation for the services performed by Agent hereunder shall be as
specified attached, Appendix C incorporated herein by reference. USWC reserves
the right to make modifications to Appendix C by providing ninety (90) days
written notice.
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<PAGE> 3
IV. Agent Responsibility
1. Agent shall use good faith efforts to market Services proactively
to its customers. Said marketing shall be consistent with and subject to the
terms and conditions set forth in applicable USWC rates and tariffs, which may
from time to time be amended at the initiation of USWC or the appropriate
regulatory commission, and as set forth in USWC policies for the sale of the
Services hereunder. In the event the Services have been detariffed, are not
subject to tariffs under state law, or are offered pursuant to tariffs that
permit flexible pricing, Agent shall use USWC's current standard prices or
Agent shall request a specific price for the customized Services. In the event
Services are offered under contract, Agent shall offer such Services subject to
the applicable terms and conditions contained in a contract supplied by USWC.
In the event a bond is required, Agent agrees to post the bond and be
responsible for the fees associated therewith. Agent may not offer any terms or
conditions on USWC's behalf which conflict with relevant tariffs, prices,
policies or contracts. Agent shall also market such services in a manner
consistent with the standards for marketing of Services which USWC shall
specify as necessary to protect trademarks or trade names used in connection
with the Services and as provided in paragraph VIII hereof.
2. At least thirty (30) days prior to each anniversary of this
Agreement, Agent shall submit a revised business plan and forecast updating its
business activities and sales projections in the same format as originally
supplied. The annual business plan is required for continuance of this
agreement through its term. The requirements for information to be included in
this Business Plan are outlined in attached, Appendix D incorporated herein by
reference.
3. Agent has, prior to execution of this Agreement, accepted a minimum
objective requirement as set forth in Appendix D. USWC and Agent must negotiate
specific sales objectives by which Agent's sales performance will be measured
for the calendar year. Such objectives agreed to by Agent and USWC shall be
made a part of this Agreement as though fully set forth herein and shall be
considered to constitute a material term hereof.
4. Agent agrees to meet with USWC representatives at mutually agreed
upon times (at least semiannually) to discuss its sales activities and
performance in meeting the objectives outlined in the business plan. Such
meetings shall include, as a minimum, providing present and projected customer
contact information, sales to date and pending sales activities, problems that
have arisen, recent projected training and marketing activities and results,
and other projected sales activities for the following six months. In addition,
Agent agrees to notify USWC promptly of any problems that might affect Agent's
ability to meet agreed upon objectives and forecasts.
5. Agent may sell other USWC services in addition to the services
offered hereunder, provided Agent will not be compensated under the terms of
this agreement for service not offered herein.
6. Agent shall use commercially reasonable efforts at all times to
give prompt, courteous, and efficient service to customers, shall be governed
in all dealings with such customers by the highest standards of honesty,
integrity, and fair dealing, including compliance
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<PAGE> 4
with all applicable laws, ordinances, and regulations, and shall do nothing
which would tend to discredit, dishonor, reflect adversely upon, or in any
manner injure the reputation of USWC or the services covered by this Agreement
and the quality image associated with said services and USWC. Agent shall be
responsible for obtaining correct information from the customer regarding the
customer's service requirements and, where requested by USWC, Agent shall
obtain appropriate credit information as specified by USWC. Agent shall provide
at a minimum technical support set forth in Appendix E incorporated herein by
reference. Failure to do so may result in loss of compensation. USWC may, from
time to time, modify Appendix E by providing Agent thirty (30) days written
notice of any modification. Any action of USWC in providing Services under
erroneous terms shall not be deemed a ratification of Agent's acts.
USWC may conduct periodic surveys with the customers to whom the Agent has sold
services on USWC's behalf. If the survey reflects poor service on the part of
the Agent, USWC will place Agent on a Service Plan for a period not to exceed 6
months. If Agent's service levels do not improve while on the Service Plan,
this Agreement may be terminated immediately with a written notice.
7. Agent may, at its own expense, provide materials and advertising to
actively promote the Services covered by this Agreement. Said promotional
materials and advertising will be done in accordance with all applicable laws
and regulations, including those on false advertising and unfair competition
and in accordance with Section VIII of this Agreement.
8. As provided for in paragraph V hereof, USWC may from time to time
provide free of charge promotional materials to Agent in reference to Services
covered by this Agreement. In that event, Agent agrees to display and use the
same appropriately.
9. Except as provided in paragraph V hereof, Agent shall provide its
personnel with all training necessary to maintain a staff of competent sales
personnel conversant in the specifications, features, and advantages of
Services. Such training of service personnel shall include instruction as to
the proper use of, and restrictions on the use of, information provided by
USWC. USWC may at its discretion provide periodic training sessions and
assistance to Agent concerning Services at no charge.
10. Agent shall initiate and actively pursue the training of its
customers in the effective use of Services, and Agent agrees to conduct all
end-user training, including provision to customer of instructional material
furnished by USWC.
11. Agent shall keep customers informed of available Services included
in Appendix A.
12. Agent shall promptly report all customer service complaints to
appropriate USWC department, regarding USWC-provided Services.
13. (a) Notwithstanding the provisions of the clause entitled
"Indemnity," Agent shall
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<PAGE> 5
obtain and maintain, during the terms of this Agreement, at its own cost and
expense, all insurance and/or bonds required of Agent by law, including but not
limited to:
(1) Worker's compensation insurance in the form
and amount (including the Broad Form All
States endorsement) prescribed by law of
the state in which Agent is acting
hereunder.
(2) Employers' liability insurance with limits
of at least $100,000 for each occurrence.
(3) Comprehensive general liability insurance
with a broad form endorsement which
includes, but is not limited to, coverage
for services liability, personal injury,
broad form property damage, coverage for
completed operations, and contractual
liability, with respect to the liability
assumed by Agent hereunder. Limits shall be
not less than $1,000,000 combined single
limit for each occurrence.
(4) Comprehensive automobile liability
insurance covering the use and maintenance
of owned, not-owned, hired, and rented
vehicles with limits of not less than
$1,000,000 combined single limit coverage
for each occurrence.
(b) Agent shall furnish a certificate or adequate proof of
the foregoing insurance or proof of self-insurance. USWC shall allow Agent,
upon provision of such adequate proof of self-insurance, to self-insure the
insurance requirements contained in this clause.
(c) The certificate furnished by Agent shall contain a clause
stating that USWC shall be notified in writing at least thirty (30) days prior
to cancellation of, or any material change in, the policy.
V. USWC Responsibilities
USWC shall:
1. Advertise the Services and provide promotional literature as USWC,
at its discretion, deems appropriate.
2. Provide, without charge, initial training for a mutually acceptable
number of Agent's sales and service personnel on USWC products and procedures
as defined within this Agreement.
3. USWC shall install the Services ordered through Agent in accordance
with the Service Ordering Procedure provided by Agent Marketing.
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<PAGE> 6
4. USWC will provide such technical support as described in attached,
Appendix E incorporated herein by reference. Amy system designs developed in
USWC's performance of that support are deemed to be proprietary and to remain
the property of USWC.
5. Provided in paragraph IV, Agent will meet with USWC representatives
regularly. At such meetings, USWC will provide Agent formal indication of
performance within established objectives and contractual guidelines.
6. USWC will identify and make available additional training on
emerging technology.
VI. Service Ordering Procedure
1. USWC will be responsible for the installation and maintenance of
Services sold by Agent pursuant to this Agreement, but shall have no
responsibility for or liability in connection with any other non-USWC services
or products sold by Agent.
VII. Termination of Agreement
1. In addition to other remedies provided for by law, either party may
terminate this Agreement by written notice if the other party breaches any
provision of this Agreement including but not limited to Agent's failure to
meet the criteria established in Article IV, and does not remedy such breach
within thirty (30) days after written notice thereof is given.
2. Either party may terminate this Agreement in whole or in part by
written notice in the event the other party: (a) makes (or is discovered to
have made) any material false representations, reports, or claims in connection
with the creation of this Agreement, or during the business relationship of the
parties under this contract; (b) engages in fraud, criminal or negligent
conduct in connection with the business relationship of the parties; or (c)
becomes insolvent or involved in any liquidation or termination of business,
adjudication as bankrupt, assignment for the benefit of creditors, invoking of
the provisions of any law for the relief of debtors, or the filing against a
party in any similar proceedings. USWC may also terminate this Agreement by
written notice if there is any substantial change in the management or control
of Agent's business.
3. In the event Agent unfairly and inaccurately disparages USWC or
USWC's Services, or makes any material misrepresentation to Agent's customers
regarding USWC or USWC's Services, USWC may immediately terminate this
agreement.
4. Notwithstanding provisions contained elsewhere in this Agreement,
if Agent fails in any manner to meet its objective as described in Paragraph
IV-13 hereof, USWC may, at its sole discretion, in the absence of a mutually
acceptable contingency plan to meet that objective, declare a material breach
of this Agreement and immediately terminate this Agreement.
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<PAGE> 7
Termination of this Agreement under the provisions of this paragraph shall be
USWC's sole remedy for failure of Agent to meet its objective.
5. If Agent sells products and services which compete with USWC
network products and services (defined as core products in Appendix A) during
the term of this agreement, it will be grounds for immediate termination.
6. Upon termination or non-renewal of this Agreement, Agent shall
immediately:
(a) Cease holding itself out, in any other manner as a
representative of the Services.
(b) Discontinue any and all use of Marks (as defined in
Section VIII hereof) except to identify the
Services, including but not limited to such use in
advertising or business material of Agent;
(c) Return to USWC all technical manuals and other
proprietary information described in Section IX
hereof.
(d) Remove and return to USWC or obliterate, at USWC's
request, any and all signs, stationery or other
material supplied without charge by USWC.
(e) Notify and arrange for all publishers and others who
may identify, list, or publish Agent's name as an
Agent of USWC (including but not limited to
publishers of telephone directories, yellow pages,
and other business directories) to discontinue such
listings.
(f) Complete all orders in process, including the
transmittal of orders to USWC.
VIII. Trade Names and Trademarks
1. During the term of this Agreement, unless otherwise prohibited by
USWC, pursuant to any applicable provision herein, Agent may refer to itself as
USWC's "STRATEGIC AGENT" solely in conjunction with the sale of authorized
Services to be sold by Agent hereunder and solely in Agent's territory. This
Agreement authorizes Agent the right to use USWC Logo as outlined in the
Graphic Guidelines as published by USWC from time to time.
2. Notwithstanding the foregoing, in no case shall Agent refer to
itself as a "STRATEGIC AGENT" or use any USWC Marks in advertising or other
promotional material or activity without first obtaining, for each proposed
use, USWC's prior express written permission, which approval shall not be
unreasonably withheld or delayed. Agent shall, solely at Agent's expense and
prior to use of any USWC Marks, make any and all changes, corrections or
alterations to any such proposed material or activity which USWC, in its sole
discretion, deems
7
<PAGE> 8
necessary or advisable. Nothing in this Agreement shall be construed as waiving
Agent's obligation to obtain prior written permission before use of any USWC
Marks. See attached, Appendix F incorporated herein by reference, for
description of co-marketing and co-advertising funds.
3. USWC shall have the right, at all reasonable times, to conduct
during normal business hours an examination of the facilities and equipment of
Agent utilized in selling or providing the Services offered by Agent hereunder
in conjunction with any USWC Mark and to interview Agent's personnel to
determine whether such sale and provision of Services by Agent comply with USWC
standards of quality for the sale and provision of such Services. If at any
time the sale and provision of such Services by Agent fail, in the sole opinion
of USWC, to conform with the standards of quality of USWC, USWC may notify
Agent. Upon such notification, Agent shall promptly cease to use any USWC Mark
until the standards of quality have been met to the satisfaction of USWC and
such satisfaction is evidenced in writing by USWC.
4. Agent acknowledges the value of USWC Marks and the goodwill
associated therewith and acknowledges that such goodwill is a property right
belonging to USWC and that USWC is the owner of all trademark, service mark,
trade name, and other rights in USWC Marks. Agent recognizes that nothing
contained in this Agreement is intended as an assignment or grant to Agent of
any right, title or interest in or to USWC Marks and that this Agreement does
not confer any right or license to grant sublicenses or permission to third
parties to use any USWC Mark and is not assignable. Agent will do nothing
inconsistent with USWC's ownership of USWC Marks, and all rights, if any, that
may be acquired by use of USWC Marks by Agent shall insure to the benefit of
and be on behalf of USWC. Agent will not adopt, use (other than as authorized
herein), register or seek to register any mark anywhere in the world which is
identical to such USWC Marks or which is so similar thereto as to constitute a
deceptive colorable imitation thereof or to suggest or imply some association,
sponsorship, or endorsement by USWC. USWC makes no warranties regarding its
ownership of any rights in or the validity of any USWC Mark.
5. Agent agrees to notify USWC of any unauthorized use of USWC Marks
by others promptly as it comes to Agent's attention. USWC shall have the sole
right to engage in infringement or unfair competition proceedings involving
USWC Marks.
6. Upon termination of this Agreement, any permission or right to use
USWC Marks granted hereunder shall cease to exist and Agent shall immediately
cease any use of such marks and immediately cease referring to itself as a
USWC-authorized Agent or authorized distributor. Agent shall also promptly
return to USWC all materials in its possession or control displaying any USWC
Marks or referring to Agent as a USWC-strategic Agent.
7. Agent agrees to the use by USWC of Agent's "Marks" in any jointly
or cooperatively sponsored advertisement or promotional material. Except as
qualified herein, the same restrictions apply to USWC on the use of Agent's
"Marks" as applied to Agent in the use of USWC's "Marks."
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<PAGE> 9
IX. Confidential Information
Agent may receive or have access to records and information, whether
written or oral, which USWC considers to be confidential and proprietary,
including technical information such as specifications, drawings, guidelines,
models, and information which relates to USWC's present and future development
of business activities. Such information shall be designated by USWC as
confidential and/or proprietary, and Agent shall hold such confidential or
proprietary information in trust and confidence for USWC, shall use it only for
the purposes permitted hereunder, and shall deliver to USWC all such records
and information, in written, electronic or graphic form, upon expiration or
termination of this Agreement. Nothing in this paragraph shall be construed to
limit the use of or dissemination by Agent of such information as is previously
known to Agent or is publicly disclosed by USWC either prior or subsequent to
Agent's receipt of such information from USWC.
X. Indemnification
1. Agent agrees to indemnify, hold harmless, and defend USWC from any
and all claims, actions, damages, expenses, and other liabilities, or
misrepresentation, including Agent making a commitment beyond that specified in
the original written proposal which did not have prior USWC approval, including
reasonable attorney's fees and costs of litigation, resulting from Agent's
negligent acts, omissions, or misrepresentations regardless of the form of
action. In no event shall USWC be liable for incidental, special, or
consequential damages to anyone arising out of the Agreement.
2. USWC agrees to indemnify, hold harmless, and defend Agent from any
and all claims, actions, damages, expenses, and other liabilities, including
reasonable attorney's fees and costs of litigation, resulting from USWC's
negligent acts, omissions, or misrepresentations regardless of the form of
action. In no event shall Agent be held liable for incidental, special, or
consequential damages to anyone arising out of this Agreement.
3. Each party agrees to cooperate fully with the other in the
fulfillment of its respective obligations under this Section X,
Indemnification.
XI. General Provisions
1. Agent may not assign this Agreement in whole or in part without the
prior written consent of USWC. Any attempt to assign any of the rights, duties,
or obligations of this Agreement without such consent shall be void and shall
be considered by USWC to be grounds for immediate termination of this
Agreement.
2. Unless otherwise provided, this Agreement can be modified only by a
written
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<PAGE> 10
amendment duly signed by persons authorized to sign agreements on behalf of
Agent and USWC and shall not be modified or supplemented by any course of
dealing or trade usage or verbal commitment.
3. All notices, requests, or other communications, other than orders
placed with the designated interface, requests for custom pricing
proposals/quotes, requests, regarding availability of facilities placed with
the Agent Vendor Service Center (AVS) or requests for advertising approval,
shall be deemed to have been duly given when delivered in person or when
deposited in the United States Mail, postage prepaid and addressed as follows:
To Agent:
To USWC: Vice President - B!S Marketing
U S WEST Communications, Inc.
Suite 710, 421 SW Oak Street
Portland, OR 97204
or as such addressee or address is changed by notice to the other party.
4. Agent shall comply with all applicable federal, state and local
laws and regulations which may be applicable to Agent as an employer of labor.
Agent shall comply with all other applicable federal, state, county, and local
laws, ordinances, regulations, and codes in the performance of this Agreement,
including the procurement of permits, licenses, and certificates where needed,
excluding those licensing and other requirements which are the obligation of
USWC in reference to the services offered hereunder. Agent shall bear all costs
associated with compliance with laws including but not limited to procurement
of permits, licenses, and certificates. Agent further agrees to indemnify USWC
for any loss, damage, liability, claim, or demand or any penalties, including
costs, expenses, and reasonable attorney's fees assessed against USWC that may
be sustained by reason of Agent's failure to comply.
5. Unless exempt under the laws and rules and regulations of the
Secretary of Labor or other proper authority, this Agreement is subject to
applicable laws and executive orders relating to equal employment and
non-discrimination in employment. The parties hereto shall not discriminate in
their employment practices against any person by reason of race, religion,
color, sex, age, sexual orientation or national origin, and agree to comply
with the provisions of said laws and orders as well as all laws and orders
relating to the employment of the handicapped, the employment of veterans, and
the use of minority business enterprises to the extent any such laws and orders
are applicable to the performance of work and furnishing of services,
equipment, materials, or supplies hereunder. For this purpose, the provisions
of such laws and orders and pertinent regulations issued hereunder as now in
force or hereafter amended shall be deemed
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an integral part of this Agreement to the same extent as if written at length
herein.
6. Dispute Resolution
6.1 Other than those claims over which a regulatory agency has
exclusive jurisdiction, all claims, regardless of legal theory, whenever
brought and whether between the parties or between one of the parties to this
Agreement and the employees, Agents or affiliated businesses of the other
party, shall be resolved by arbitration. A single arbitrator engaged in the
practice of law and knowledgeable about telecommunications law shall conduct
the arbitration in accordance with the then current rules of the American
Arbitration Association ("AAA").
6.2 All expedited procedures prescribed by the AAA shall apply. The
arbitrator's decision shall be final and binding, and judgment may be entered
in any court having jurisdiction thereof.
6.3 Other than the determination of those claims over which a
regulatory agency has exclusive jurisdiction, federal law (including the
provisions of the Federal Arbitration Act, 9 U.S.C. Sections 1-16) shall govern
and control with respect to any issue relating to the validity of this
Agreement to arbitrate and the arbitrability of the claims.
6.4 If any party files a judicial or administrative action asserting
claims subject to arbitration, and another party successfully stays such action
and/or compels arbitration of such claims, the party filing the action shall
pay the other party's costs and expenses incurred in seeking such stay or
compelling arbitration, including reasonable attorney's fees.
7. Lawfulness. This Agreement and the parties' actions under this
Agreement shall comply with all applicable federal, state, and local laws,
rules, regulations, court orders, and governmental agency orders. If a court or
a governmental agency with proper jurisdiction determines that this Agreement,
or a provision of this Agreement, is unlawful, this Agreement, or the provision
of this Agreement, shall terminate. If a provision of this Agreement is so
terminated but the parties legally, commercially, and practicably can continue
this Agreement without the terminated provision, the remainder of this
Agreement shall continue in effect.
8. Force Majeure. With the exception of payment of charges under this
Agreement, a party shall be excused from performance if its performance is
prevented by any acts or events beyond the party's reasonable control,
including but not limited to: severe weather and storms; earthquakes or other
natural occurrences; strikes or other labor unrest; power failures; computer
failures; nuclear or other civil or military emergencies, or acts of
legislative, judicial, executive, or administrative authorities.
9. Severability. If any of the provisions of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate or render unenforceable the entire Agreement, but rather the entire
Agreement shall be construed as if not containing the
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<PAGE> 12
particular invalid or unenforceable provision or provisions, and the rights and
obligations of each party shall be construed and enforced accordingly.
10. Nonwaiver. The failure of either party to enforce strict
performance of any provision of this Agreement shall not be construed as a
waiver of its rights to assert or rely upon such provision or any other
provision of this Agreement. For any waiver to be binding, it shall be made in
writing and signed by both parties.
11. All obligations and duties which by their nature extend beyond the
expiration or termination of this Agreement shall survive and remain in effect
beyond any expiration and termination.
12. This Agreement is governed by the laws of the State of Colorado
and venue and jurisdiction of any suits brought hereunder shall be in Colorado.
13. This Agreement, together with the Appendices attached hereto,
shall constitute the entire Agreement between the parties and supersedes any
previous oral or written agreements relating to the subject matter hereof.
Unless otherwise stated herein, any other communications whether oral or
written, regarding the rights or obligations of either party under this
Agreement, whether made prior or subsequent to the effective date of this
Agreement, shall not be considered binding on either party unless such
communication is reduced to writing and signed by both parties.
14. Both parties represent they have read this Agreement, understand
it and agree to be bound by all the terms and conditions stated herein.
By /s/ Signature illegible By /s/ Signature illegible
------------------------------ -------------------------------
Vice President USWC Authorized Representative
U S WEST Communications, Inc. ICM-Communications Integration
------------------------------ -------------------------------
USWC Agent
1/29/98 2/13/98
------------------------------ -------------------------------
Date Date
12
<PAGE> 13
APPENDIX A
PRODUCT AND SERVICE LIST
<TABLE>
<CAPTION>
CONTRACTUAL PRODUCTS CORE PRODUCTS
-------------------- -------------
<S> <C>
o Advanced Intelligent Network Services (AIN) X
o Analog Private Line X
o ATM X
o Access2 (PCS) X
o Business Voice Messaging Service (BVMS) X
o Centrex Services X
o Customized Call Management Services X
o Customer Management Services (CMS) X
o Central Office - Automatic Call Distribution (CO-ACD) X
o Command A Link (CAL) X
o Commercial Video X
o Custom Calling Services X
o Digital Subscriber Line (xDSL) X
o DID X
o Two Way DID X
o Digipac X
o Digital Data Service I (DDS I) X
o Digital Data Service II (DDS II) X
o Digital Signal Level 1 (DS1) X
o Digital Signal Level 3 (DS3) X
o Digital Special Access X
o Basic and Advanced Digital Switched Service X
o Enhanced Fax Services X
o Frame Relay X
o Frame Relay Reports X
o !NTERACT Internet Services X
o !NTERACT Internet Security Services X
o !NTERACT Web Hosting Services X
o !NTERACT Web Development Services X
o !NTERACT E-Commerce Services X
o ISDN X
o ISDN Single Line Service X
o Market Expansion Line X
o Managed Data Services (MDS) X
</TABLE>
Printed: January 23, 1998 13
<PAGE> 14
PRODUCT AND SERVICE LIST (cont.) APPENDIX A
<TABLE>
<CAPTION>
CONTRACTUAL PRODUCTS CORE PRODUCTS
-------------------- -------------
<S> <C>
o Network Application X
o Private Switch/Automatic Location Identification (PS/ALI) X
o Select Call Routing X
o Self Healing Alternate Route Protection (SHARP) X
o Self Healing Alternate Route Protection Plus (SHARP Plus) X
o Self Healing Network Services (SHNS) X
o Single Number Service (SNS) X
o SwitchNet 56 (SN56) X
o Transparent LAN Service (TLS) X
o Training Courses X
o Two Way WATS X
o WATS X
o Universal Access Service (UAS) X
o 800 Service X
o 800 ServiceLine X
</TABLE>
Subject to availability, services listed above may not be available in all
areas. Agent is authorized to offer listed services in the designated territory
shown in Appendix B. This does not preclude Agent from selling other USWC
services in accordance with provision IV, 3 of the Agreement or from
participating in special projects identified by USWC. Compensation for a
significant sale or sales will be considered on an individual case basis (see
Sales and Efficiency Improvement Incentive, Appendix C, Page 21).
Printed: January 23, 1998 14
<PAGE> 15
APPENDIX B
TERRITORY SERVED
Washington, Oregon and
E. Washington LATA
Printed: January 23, 1998 15
<PAGE> 16
APPENDIX C
STRATEGIC AGENT COMPENSATION
COMPENSATION SCHEDULE
Compensation shall be earned by Agent in two installments hereinafter referred
to as the "initial compensation" and the "remaining compensation". The specific
compensation schedules are as follows:
For sale of services to be installed within six (6) months after date
of sale, initial compensation of thirty-five percent (35%) shall be earned as of
the date of sale and receipt of sold account package. Remaining compensation of
sixty-five (65%) shall be earned upon receipt and acknowledgment of an updated
customer record.
For sales of services to be installed within seven to twelve months
after date of sale, initial compensation of fifteen percent (15%) shall be
earned as of date of sale and receipt of a sold account package. Remaining
compensation of eighty-five percent (85%) shall be earned upon receipt and
acknowledgment of an updated customer record.
For sale of services to be installed in more than twelve months after
the date of sale, one hundred percent (100%) compensation shall be earned upon
receipt and acknowledgment of an updated customer record.
For month-to-month sales, one hundred percent (100%) compensation will
be earned upon receipt and acknowledgment of an updated customer record.
All earned compensation shall be accrued during each calendar month and paid to
Agent within the following month after the end (25th day) of the month in which
the compensation is earned.
In all cases, remaining compensation amounts shall be paid based on the
installation of service until USWC has upgraded its customer records systems.
Once USWC's customer records systems upgrades are completed, remaining Agent
compensation shall be paid in a similar payment schedule as prior to customer
records systems upgrades. USWC shall provide thirty (30) days advance notice to
Agent of any revisions to this Compensation Schedule.
If sale is canceled prior to installation all compensation paid shall be
refunded to USWC within thirty (30) days of sale cancellation date, or at the
discretion of USWC deducted from future compensation payments. If sale is
canceled within one - six (1-6) months of installation U S WEST will collect
seventy-five percent (75%) of compensation paid. If sale is canceled after seven
- - twelve (7-12) months, U S WEST will collect fifty percent (50%) of
compensation paid.
Printed: January 23, 1998 16
<PAGE> 17
APPENDIX C
Compensation Terms
Compensation for Products and Services Sales will be paid as a percentage of the
contract value. If a contract sale, compensation is based on the number of
months of recurring revenue of the contract term. If a month-to-month sale,
compensation is based on twelve (12) months recurring revenue value. Conditions
listed with specific products may alter these terms. Special product exceptions
are listed in Appendix C, Page 22.
Agents converting their own original month-to-month sale to a contract within
twelve (12) months of installation will be compensation on a prorated netting
formula. Prorated netting does not apply when a different sales entity was
responsible for the original sale.
- --------------------------------------------------------------------------------
EXAMPLE: Agent sells a product/service on a month-to-month payment plan and is
compensated based on twelve (12) months' value. After three (3) months, the same
Agent converts the sale from month-to-month to a three (3) year contract. The
Agent will then receive compensation for a two (2) year contract value (pro
rated netting, thirty-six (36) months minus twelve (12) months' value previously
paid). After twelve (12) months, full contract value will be used (no
prorating).
- --------------------------------------------------------------------------------
Compensation for sales for shared tenant/reseller/community of interest
applications will be paid only upon the prior written approval of USWC. Sales to
U S WEST Companies will also be paid only upon the prior written approval of
USWC. Furthermore, no compensation will be paid to Agent where, in the opinion
of USWC, Agent is acting as a conduit for a previously negotiated sale between
customer of record and USWC. Also, no compensation will be paid to Agent, where,
in the opinion of USWC, Agent is acting as a conduit for a previously negotiated
sale made by a party other than Agent or their bonafide employees. Agent will
not receive compensation for USWC products and services sold to itself or
affiliates.
Taxes (i.e., sales, use, excise, city franchise, etc.) will not be calculated in
compensation payments to Agents.
For administrative purposes, no compensation drafts will be issued for less than
$100.00. All references to payment/compensation are one-time payments unless
otherwise stipulated.
All contracts compensated must have early termination liability. Contracts
without early termination liability will be compensated on a month-to-month
basis. Net "New Station Lines" is defined as New Contracted Stations less all
removed station lines during contract period.
Sales Revenue will be credited once USWC has verified customer is accurately
billed for contracted service. Credit for this revenue may be applied in a
subsequent year against that year's objective.
Printed: January 23, 1998 17
<PAGE> 18
APPENDIX C
On sales of contracted services, compensation will be paid on the gross contract
value. This value is considered to be all recurring revenues for the life of the
contract plus any prepayment of recurring revenues. Renegotiated contracts and
contract conversions on specific products/services may be allowed from
time-to-time. Compensation on these contracts will be paid on the "Net New
Term", which is defined as the number of months' difference between the
expiration date on the contract being renegotiated (old contract) and the
renegotiated (new) contract expiration date. Contract value is established by
the new recurring revenues multiplied by the Net New Term.
No compensations will be paid nor revenue credit allowed for:
o Nonrecurring Charges
o Access Revenues except for Digital Special Access and
Digital Switched Service Trunks
o Network Access Registers (NARs)
o Centrex Exchange Access
o Taxes
o Right-to-Use Fees
o Customer Access Line Charge (CALC) unless otherwise indicated
o Usage unless otherwise stipulated
o Sales that transfer the billing from one party to another on
existing service
o Sales to Residential Customers
o Sales to Strategic/House Accounts
For month-to-month services sold by Agent which are removed by the end-user
within sixty (60) days of installation, USWC will retrieve from Agent a prorated
amount of compensation paid.
Commission and Payment Structure by Product
<TABLE>
<CAPTION>
NEW EXTENSIONS/CONVERSIONS/
PRODUCT SALES RENEWALS NOTES
------- ----- ----------------------- -----
<S> <C> <C> <C>
Advanced Intelligent Network
Services (AIN) (*)% (*)%
Access 2 (PCS) See pg. 29 See pg. 29 See page 29, Appendix C
Analog Private Line (*)% (*)% See page 25, Appendix C
ATM (*)% (*)% See page 27, Appendix C
Business Voice Messaging Service
(BVMS) (*)% (*)% See page 28, Appendix C
Centrex Services See pg. 22 See pg. 22 See page 22, Appendix C
for details on Centrex 21,
Centrex Prime and general
Centrex services
</TABLE>
Printed: January 23, 1998 18
<PAGE> 19
APPENDIX C
<TABLE>
<CAPTION>
NEW EXTENSIONS/CONVERSIONS/
PRODUCT SALES RENEWALS NOTES
------- ----- ----------------------- -----
<S> <C> <C> <C>
Customized Call Management
Services (*)% (*)%
Customer Management Services
(CMS) (*)% (*)%
Central Office - Automatic Call
Distribution (CO-ACD) (*)% (*)% See page 22, Appendix C
Command A Link (CAL) (*)% (*)%
Commercial Video (*)% (*)% See page 27, Appendix C
Custom Calling Services (*)% (*)%
Digital Subscriber Line (xDSL) (*)% (*)% See page 27, Appendix C
DID (*)% (*)% See page 28, Appendix C
Two Way DID (*)% (*)% See page 28, Appendix C
Digipac (*)% (*)% See page 28, Appendix C
Digital Data Service I (DDS I) (*)% (*)%
Digital Data Service II (DDS II) (*)% (*)% See page 24, Appendix C
Digital Signal Level I (DS1) (*)% (*)%
Digital Signal Level 3 (DS3) (*)% (*)%
Digital Special Access (*)% (*)%
Basic and Advanced Digital
Switched Service (*)% (*)% See page 29, Appendix C
Enhanced Fax Services (*)% (*)% See page 30-31, Appendix C
Frame Relay (*)% (*)%
Frame Relay Reports (*)% (*)%
!NTERACT Internet Services (*)% (*)% See page 25, Appendix C
!NTERACT Internet Security
Services (*)% (*)%
!NTERACT Web Hosting Services (*)% (*)%
!NTERACT Web Development
Services (*)% (*)%
!NTERACT E-Commerce Services (*)% (*)%
ISDN (*)% (*)% See page 23, Appendix C
</TABLE>
Printed: January 23, 1998 19
<PAGE> 20
APPENDIX C
<TABLE>
<CAPTION>
NEW EXTENSIONS/CONVERSIONS/
PRODUCT SALES RENEWALS NOTES
------- ----- ----------------------- -----
<S> <C> <C> <C>
ISDN Single Line Service (*)% (*)%
Market Expansion Line (*)% (*)%
Managed Data Services (MDS) (*)% (*)%
Network Application (*)% (*)% See page 28, Appendix C
Private Switch/Automatic Location
Identification (PS/ALI) (*)% (*)% See page 23, Appendix C
Select Call Routing (*)% (*)%
Self Healing Alternate Route
Protection (SHARP) (*)% (*)%
Self Healing Alternate Route
Protection Plus (SHARP Plus) (*)% (*)%
Self Healing Network Services
(SHNS) (*)% (*)%
Single Number Service (SNS) (*)% (*)%
SwitchNet 56 (SN56) (*)% (*)%
Transparent LAN Service (TLS) (*)% (*)% See page 26, Appendix C
Training Courses (*)% (*)%
Two Way WATS (*)% (*)% See page 25, Appendix C
WATS (*)% (*)%
Universal Access Service (UAS) (*)% (*)% See page 27, Appendix C
800 Service (*)% (*)%
800 Service Line (*)% (*)% See page 30, Appendix C
</TABLE>
Printed: January 23, 1998 20
<PAGE> 21
Performance Bonus Schedule
The following Performance Plan Bonuses will be paid when the listed cumulative
revenue plateau is reached. Credits will be earned where an Agent reaches the
respective revenue plateau(s) for compensated sales within a calendar year.
Accumulated revenue credits which exceed $1M will repeat the Performance Bonus
Schedule.*
<TABLE>
<CAPTION>
Revenue Performance
Plateau Bonus
------- -----------
<S> <C> <C>
$(*) $(*)
$(*) $(*)
$(*) $(*)
$(*) $(*)
</TABLE>
*Example: Agent reaches $1.75M in cumulative revenue during the calendar year.
<TABLE>
<CAPTION>
Cumulative Incremental Cumulative Bonus
Revenue Bonus Amount Amount
---------- ------------ ----------------
<S> <C> <C>
$(*) $(*)
$(*) $(*) $(*)
$(*) $(*) $(*)
$(*) $(*) $(*)
</TABLE>
Strategic Incentives Plan
An incentive may be offered from time to time to promote strategic initiatives.
These incentives will be in addition to the existing Strategic Agent terms and
conditions, and may modify the terms and conditions, or may offer terms and
conditions completely outside the Strategic Agent Agreement. The strategic
initiatives will be offered by addendum to the Agreement and will target certain
products, services, geographies, efficiency improvements and other program
objectives to improve sales of USWC products. Thirty (30) day advance
notification will be given prior to start of initiatives.
USWC will be the Final Authority in all matters relating to Strategic
Initiatives.
Sales and Efficiency Improvement Incentive
Agents are encouraged to identify sales opportunities for USWC's services in
quantities or configurations beyond those listed in Appendix C. If it is
determined by USWC that the revenues, profitability, terms and conditions of
sale are substantially more beneficial to USWC sufficient to warrant
individualized recognition, compensations may be negotiated on an individual
case basis by the parties.
Printed: January 23, 1998 21
<PAGE> 22
APPENDIX C
SPECIAL PRODUCTS DESCRIPTIONS AND EXCEPTIONS
A. CENTRAL OFFICE SERVICE
1. Centrex Services
--------------------------------------------------------------
CONDITIONS:
Centron and Centrex Plus
o Compensation for these services: (*)% for new contracts,
(*)% for renewals/extensions.
o Compensation for large system sales of 2000 stations or
more will be negotiated on an Individual Case Basis. USWC
will be the final authority in these negotiations, which
negotiations must be finalized prior to the sale being
closed.
o New stations added to an existing system will pay at the
new sales rate for twelve (12) months recurring revenue
value for month-to-month sales, or for the months
remaining on an existing contract.
Centrex 21
o Compensation (*)% for new contracts with additional
compensation as outlined below: New lines added to the
customer's contract at the time of initial sale offers
additional compensation. The total commission for sales
will increase by the amount corresponding number of lines
added.
No. of new lines Additional Compensation
- ---------------- -----------------------
1 (*)%
2-3 (*)%
4+ (*)%
o Centrex 21 contracts are compensable for minimum of 6
lines at each of the customer locations.
o 50% of compensation paid at install and 50% of
compensation paid 3 months later.
o Centrex Plus to Centrex 21 conversion paid on the basis of
"net new term" as described on page 18 of Appendix C.
o (*)% compensation will be paid on lines added by customer
and not included on original service contract.
Printed: January 23, 1998 22
<PAGE> 23
APPENDIX C
Centrex Prime
o Compensation will be (*)% for new sales.
o Additional NAR's are not compensable.
--------------------------------------------------------------
2. Central Office - Automatic Call Distribution (CO-ACD)
-----------------------------------------------------------------------
CONDITION:
o Month-to-month service is available only for customer
ordering (*) or less positions.
3. Custom Calling Services
4. Market Expansion Line (MEL)
5. Advanced Intelligent Network Services (AIN)
6. Private Switch/Automatic Location Identification (PS/ALI)
-----------------------------------------------------------------------
CONDITIONS:
o A PS/ALI contract cannot exceed the length of the contract
term of the underlying months remaining of the E911 contract
for the specific serving community.
Example: The customer wants to sign a 60 month contract, however, the
communities E911 system is on a 48 month contract with 34
months remaining. The PS/ALI contract must be limited to 34
months.
--------------------------------------------------------------
Printed: January 23, 1998 23
<PAGE> 24
APPENDIX C
B. TRANSPORT SERVICES
1. Digital Data Service I (DDSI)
2. Integrated Services Digital Network (ISDN)
--------------------------------------------------------------
CONDITIONS:
o In states where contract terms are available no
compensation will be paid, nor revenue credit allowed for
(*) sales of Basic and Primary Rate ISDN.
o Single Line Service includes multi-call and Work at Home
Applications.
3. Digital Data Service II (DDS II)
--------------------------------------------------------------
CONDITION:
o No compensation will be paid, nor revenue credit allowed
for (*).
--------------------------------------------------------------
4. Digital Signal Level 1 (DS1) and Digital Signal Level 3 (DS3)
5. Self Healing Alternate Route Protection (Sharp and SharpPlus)
6. Self Healing Network Services (SHNS)
Printed: January 23, 1998 24
<PAGE> 25
APPENDIX C
7. Digital Special Access
a. Digital Data Service II (DDS II)
b. Digital Signal Level 1 (DS1) and Digital Signal Level 3
(DS3)
CONDITIONS:
Compensation will not be paid, nor revenue credit allows for:
o (*)
o (*)
o (*)
o (*)
8. WATS/800 Service
9. Two Way WATS
--------------------------------------------------------------
CONDITION:
o Revenue credit is $(*) per line for WATS, 800 Service and
Two Way WATS. Compensation percentage is applied against
(*).
--------------------------------------------------------------
10. Analog Private Line
--------------------------------------------------------------
CONDITIONS:
No compensation will be paid, nor revenue credit allows for:
o (*)
o (*)
o (*)
--------------------------------------------------------------
11. SwitchNet 56 (SN56)
Printed: January 23, 1998 25
<PAGE> 26
APPENDIX C
12. !NTERACT Internet Services
--------------------------------------------------------------
CONDITIONS:
o (*)
o Dedicated Access includes:*
- 56 Kbps (via Point-to-Point Digital Private Line)
- 1.544 Mbps (via Point-to-Point Digital Private Line)
- 4, 10 or 16 Mbps over a LAN (via native Ethernet or
Token Ring)
- Frame Relay in the following six PVC speeds, as well
as dial-access:
o 56 Kbps o 512 Kbps
o 128 Kbps o 768 Kbps
o 256 Kbps o 1.544 Kbps
- High Speed DS3 Access
*NOTE: Represents Internet Services only - Does not include
Transport.
13. Frame Relay
14. Transparent LAN Service (TLS)
--------------------------------------------------------------
CONDITION:
o No compensation will be paid, nor revenue credit allowed
for (*) sales.
--------------------------------------------------------------
15. Select Call Routing
Printed: January 23, 1998 26
<PAGE> 27
APPENDIX C
16. Single Number Service (SNS)
--------------------------------------------------------------
CONDITIONS:
o The revenue value against which the compensation
percentage is applied is comprised of (*)
o Contracts are presently limited to (*).
--------------------------------------------------------------
17. Command-A-Link (CAL)
18. Asynchronous Transfer Mode (ATM)
--------------------------------------------------------------
CONDITION:
o No compensation will be paid, nor revenue credit allowed
for (*) sales.
--------------------------------------------------------------
19. Digital Subscriber Line (xDSL)
--------------------------------------------------------------
o No compensation will be paid for (*).
Printed: January 23, 1998 27
<PAGE> 28
APPENDIX C
20. Universal Access Service (UAS)
--------------------------------------------------------------
o If a DSS contract in force, compensation will be
available based on the (*).
--------------------------------------------------------------
C. OTHER TELECOMMUNICATIONS SERVICES
1. Commercial Video
--------------------------------------------------------------
CONDITION:
o No compensation will be paid, nor revenue credit allowed
for (*) sales.
--------------------------------------------------------------
2. Direct Inward Dialing (DID) and Two Way DID
--------------------------------------------------------------
CONDITIONS:
o (*)
o (*)
o (*)
--------------------------------------------------------------
3. Digipac
Printed: January 23, 1998 28
<PAGE> 29
APPENDIX C
4. Digipac Usage
--------------------------------------------------------------
CONDITIONS:
o For Contract Sales only - Usage will not be compensated
for (*) sales.
o Usage compensation will be paid quarterly, in the month
following the end of the quarter.
--------------------------------------------------------------
5. Network Applications
--------------------------------------------------------------
CONDITION:
o (*)
--------------------------------------------------------------
6. Business Voice Messaging Service (BVMS)
--------------------------------------------------------------
CONDITION:
o Contracts are available for sales of (*) Mailboxes or
more.
--------------------------------------------------------------
7. Access2 (PCS)
--------------------------------------------------------------
o (*)
o The Business 50 Plan is applicable for Agent regardless of
the number of phones purchased. All other terms of the
Business 50 Plan apply.
Printed: January 23, 1998 29
<PAGE> 30
APPENDIX C
D. SPECIAL PRODUCT CATEGORY
1. Basic and Advanced Digital Switched Services Trunks/PRI
Channels
Compensation will be paid as a percentage of the contract
value as follows. (*)
Strategic Agent Compensation: (*)%
--------------------------------------------------------------
CONDITION:
o Revenue value and compensation includes Basic Trunks and DID
Trunks. For DS1 portion, refer to DS1 compensation schedule.
Configuration portion of PRI Service will be paid at (*)%.
o Payment on conversion of Centrex services to Basic or Advanced
Trunks will be based upon "net new term" as described on page
18 Appendix C.
--------------------------------------------------------------
2. 800 ServiceLine
Compensation will be paid per line as follows:
Compensation: $(*)
--------------------------------------------------------------
CONDITIONS:
o (*)
o (*)
o Revenue credit is $(*) per line in states where the
recurring charge is $(*). Revenue credit is $(*) per line
in states where the recurring revenue is $(*) per month.
--------------------------------------------------------------
Printed: January 23, 1998 30
<PAGE> 31
APPENDIX C
3. FaxServices
Compensation will be paid per line or as a percentage of
contract value as listed:
<TABLE>
<CAPTION>
Revenue
Product Agreement Type Compensation Credit
------- -------------- ------------ -------
<S> <C> <C> <C>
o FaxMail plus Month-to-month $(*) $(*)
1 Year Contract $(*) (*)
o Broadcast Fax Month-to-month $(*) $(*)
1 Year Contract $(*) (*)
o Never Busy Fax Month-to-month $(*) $(*)
1 Year Contract $(*) (*)
o Fax Request Month-to-month $(*) $(*)
1 Year Contract $(*) (*)
</TABLE>
Custom Sales
Sales of $(*) or more in total contract value are Custom
Sales. Design, pricing, and compensation on Custom Sales
must be approved utilizing the Individual Case Basis (ICB)
application process. Approved sales will be compensated as
follows:
<TABLE>
<CAPTION>
Contract Value Compensation Revenue Credit
-------------- ------------ --------------
<S> <C> <C>
$(*)-$(*) (*)% (*)
$(*) (*)% (*)
</TABLE>
4. Training Courses
Printed: January 23, 1998 31
<PAGE> 32
APPENDIX D
U S WEST AGENT MARKETING
1998 STRATEGIC AGENT
ANNUAL BUSINESS PLAN & OBJECTIVE
TABLE OF CONTENTS
SECTION i. Strategic Agent Objective
SECTION I. Business Information
SECTION II. Financial Summary
1. Major Products and Services other than U S WEST
2. Revenue Projections
SECTION III. Market Analysis
1. Market Segmentation
2. Target Markets
3. Competition
SECTION IV. Strategic Agent Business Profile
1. Personnel Profile
2. Management Team
3. Sales & Marketing
4. Technical Expertise
SECTION V. Strategic Agent Business Plans
1. Strategy and Implementation
2. Investment Plans
SECTION VI. Organization Charts
- --------------------------------------------------------------------------------
SECTION i. 1998 STRATEGIC AGENT OBJECTIVE:
1998 Strategic Agent
Business Plan
Page D 1
<PAGE> 33
APPENDIX D
(Please print or type. If using electronic spreadsheet, shaded areas will be
calculated.)
SECTION I. BUSINESS INFORMATION
<TABLE>
<S> <C> <C> <C> <C>
Business Name:
--------------------------------------------------------------------------
Branch Owner/Manager: HQ First: HQ Last:
------------------- -------------------
HQ Address:
--------------------------------------------------------------------------
HQ Address 2: HQ Suite:
---------------------------------------- ------------------------
HQ City: HQ State: HQ Zip:
---------------------------------- ----------- -----------
HQ Phone: Area Code: Number:
----------------------- ----------------
HQ FAX: Area Code: Number:
----------------------- ----------------
E-Mail Address:
--------------------------
ADDITIONAL BRANCH OFFICES: For Additional Offices - Repeat rows or attach additional sheets.
Branch Office #1:
Branch Owner/Manager: B1First B1 Last:
------------------------------ -------------------
B1 Address:
---------------------------------------------------------------------------
B1 Address 2: B1 Suite:
---------------------------------------- -------------------------
B1 City: B1 State: B1 Zip:
----------------------------- --------------- -------------
Phone: B1 Area Code: B1 Number:
--------------------- ---------------------
FAX: B1 Area Code: B1 Number:
--------------------- ---------------------
Branch Office #2:
Branch Owner/Manager: B2First B2 Last:
------------------------------ -------------------
B2 Address:
---------------------------------------------------------------------------
B2 Address 2: B2 Suite:
---------------------------------------- -------------------------
B2 City: B2 State: B2 Zip:
----------------------------- --------------- -------------
Phone: B2 Area Code: B2 Number:
--------------------- ---------------------
FAX: B2 Area Code: B2 Number:
--------------------- ---------------------
</TABLE>
1998 Strategic Agent
Business Plan
Page D 2
<PAGE> 34
APPENDIX D
SECTION II. FINANCIAL SUMMARY
1. OTHER MAJOR PRODUCTS AND SERVICES
<TABLE>
<CAPTION>
NATURE OF
RELATIONSHIP
(I.E. DIRECT,
PROVIDER 1998 PRODUCTS DISTRIBUTION)
<S> <C> <C>
1.a. Other Local Network Service Producers
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
1.b. Inter-Lata (LD) Carriers
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
1.c. Hardware (CPE) Vendors
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
1.d. Other Providers (e.g., PCS, Internet, Calling Cards, Training, etc.)
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
- -------------------------------------------------------------- ----------------------- ----------------------
</TABLE>
1998 Strategic Agent
Business Plan
Page D 3
<PAGE> 35
APPENDIX D
2. Revenue Projections
<TABLE>
<CAPTION>
1998% OF TOTAL
U S WEST PRODUCTS: 1997 DOLLARS 1998 PROJECTED REVENUE
<S> <C> <C> <C>
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
<CAPTION>
OTHER PRODUCTS AND/OR 1998% OF TOTAL
SERVICES 1997 DOLLARS 1998 PROJECTED REVENUE
<S> <C> <C> <C>
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
$ - $ - $ -
- ----------------------------------- ------------- ------------- -------------
TOTAL PRODUCT/SERVICE REV.: $ - $ - $ -
------------- ------------- -------------
U S WEST TOTAL REVENUE: $ - $ - $ -
------------- ------------- -------------
</TABLE>
1998 Strategic Agent
Business Plan
Page D 4
<PAGE> 36
SECTION III. MARKET ANALYSIS
1. MARKET SEGMENTATION
Please characterize your customers based on line size:
Size % Small (less than 24 lines/less than 3 locations)
---------
% Medium (24 - 73 line/3 - 6 locations)
---------
% Large (more than 74 lines/more than 6 locations)
---------
Please segment your total revenue based on the following:
Data %
---------
Voice %
---------
CPE %
---------
Other %
---------
2. TARGET MARKETS
<TABLE>
<CAPTION>
1998 PLANNED (YEAR)
<S> <C> <C>
States covered (specify with 2 letter designation):
---------------- -----------------
---------------- -----------------
---------------- -----------------
---------------- -----------------
<CAPTION>
1998 PLANNED (YEAR)
<S> <C> <C>
Regional Markets Served (cities, MSA's):
---------------- -----------------
---------------- -----------------
---------------- -----------------
---------------- -----------------
</TABLE>
1998 Strategic Agent
Business Plan
Page D 5
<PAGE> 37
APPENDIX D
Vertical Markets Served: (check if applicable)
<TABLE>
<CAPTION>
1998 PROJECTED (YEAR) % OF TOTAL BUSINESS
<S> <C> <C> <C>
Financial Services:
--------------------------- -------------------------- ---------------------
Healthcare:
--------------------------- -------------------------- ---------------------
Education:
--------------------------- -------------------------- ---------------------
State/Local Government:
--------------------------- -------------------------- ---------------------
Federal Government:
--------------------------- -------------------------- ---------------------
Other (specify):
--------------------------- -------------------------- ---------------------
</TABLE>
3. COMPETITION
What companies sell U S WEST competing products within your territory?
<TABLE>
<CAPTION>
Company Vendor/Product Market (Vertical, MSA or city)
<S> <C> <C>
- --------------------------- ---------------------------- ------------------------------
- --------------------------- ---------------------------- ------------------------------
- --------------------------- ---------------------------- ------------------------------
- --------------------------- ---------------------------- ------------------------------
- --------------------------- ---------------------------- ------------------------------
- --------------------------- ---------------------------- ------------------------------
</TABLE>
1998 Strategic Agent
Business Plan
Page D 6
<PAGE> 38
APPENDIX D
SECTION IV. STRATEGIC AGENT BUSINESS PROFILE
1. PERSONNEL PROFILE
<TABLE>
<CAPTION>
1998 PROJECTED (YEAR)
<S> <C> <C>
# of Sales offices:
---------------------- --------------------
# of Sales Representatives:
---------------------- --------------------
# of Sales Representatives dedicated to U S WEST:
---------------------- --------------------
# of Technical Support/Engineers:
---------------------- --------------------
# of Tech. Support/Engineers dedicated to U S WEST:
---------------------- --------------------
# of Administrative support:
---------------------- --------------------
# of U S WEST Project Managers:
---------------------- --------------------
# of Executive Staff:
---------------------- --------------------
</TABLE>
2. MANAGEMENT TEAM
Include Roles, Responsibilities, Background, etc. per Executive:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. SALES
Describe level of sales experience and training among your inside and outside
sales staff:
<TABLE>
<CAPTION>
Title/position Years of sales experience Sales Training courses in last five years
<S> <C> <C>
- -------------------------- -------------------------- --------------------------------------------
- -------------------------- -------------------------- --------------------------------------------
- -------------------------- -------------------------- --------------------------------------------
- -------------------------- -------------------------- --------------------------------------------
- -------------------------- -------------------------- --------------------------------------------
- -------------------------- -------------------------- --------------------------------------------
</TABLE>
1998 Strategic Agent
Business Plan
Page D 7
<PAGE> 39
APPENDIX D
4. TECHNICAL EXPERTISE
Personnel with certifications on CPE and/or network products:
<TABLE>
<CAPTION>
Title/Position Vendor/Product Certification Level Valid Dates
<S> <C> <C> <C>
- -------------------------- -------------------------- ----------------------------- --------------
- -------------------------- -------------------------- ----------------------------- --------------
- -------------------------- -------------------------- ----------------------------- --------------
- -------------------------- -------------------------- ----------------------------- --------------
</TABLE>
SECTION V. STRATEGIC AGENT BUSINESS PLANS
1. STRATEGY AND IMPLEMENTATION
1. a. Suggestions to USWC Strategic Agent Marketing to assist you in
overcoming U S WEST Competition within your market:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. b. Describe acquisition strategy (if applicable):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1998 Strategic Agent
Business Plan
Page D 8
<PAGE> 40
1. c. Describe 1998 Growth Plans:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. d. Additional information which would be useful in helping U S WEST
accurately plan for 1998 Strategic Agent support.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1998 Strategic Agent
Business Plan
Page D 9
<PAGE> 41
2. INVESTMENT PLANS
2. a. Describe training and Marketing Communications plans:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. b. Plans for new facilities (buildings, demo equipment, etc.):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. c Plans for new capabilities (e.g., Managed Data Services (MDS),
maintenance contracts, cable & wiring, etc.):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1998 Strategic Agent
Business Plan
Page D 10
<PAGE> 42
APPENDIX D
SECTION VI. ORGANIZATION CHARTS
(Please attach current Executive Staff and Branch Organization Charts.)
1998 Strategic Agent
Business Plan
Page D 11
<PAGE> 43
APPENDIX E
PERFORMANCE STANDARDS - STRATEGIC AGENT/AGENT MARKETING (AM)
I. STRATEGIC AGENT RESPONSIBILITIES
1. SALES OBJECTIVE REVENUE ATTAINMENT
a) By EOY, installed sales revenue equals or exceeds
sales objective.
b) Agent shall develop abeyance system/tracking
mechanism to efficiently manage repeat renewal
business opportunities (i.e., contract renewals,
planned conversions, etc.)
2. ADVERTISING SUPPORT PROGRAM PARTICIPATION
a) If participating, Agent shall be timely in responding
to advertising support requests, i.e., due dates for
directory closes, etc.
b) Agent shall insure all advertisements referencing U S
WEST "STRATEGIC AGENT" relationship meet current U S
WEST standards for trademark use. All use of U S WEST
logo must be pre-approved.
c) Agent shall deliver and receive approval of its
marketing/advertising plan prior to release of
available co-marketing and co-advertising funds
outlined in Appendix F.
3. U S WEST PRODUCT/SERVICES TRAINING PARTICIPATION
a) Agent agrees to develop and implement a training plan
identifying appropriate sales and project management
personnel to complete within a mutually agreed upon
time frame.
b) Once initial Agent training has been fulfilled by U S
West, ongoing training requirements due to new hires
or turnover is the responsibility of the Agent.
c) Agent will keep resources up to date and maintain an
accessible area for USWC provided training materials,
brochures and other resource materials.
4. RESPONDING TO U S WEST REFERRALS
a) Clients will be contacted within 24 hours of the
referral unless otherwise requested by the customer.
b) U S WEST products/services must be recommended.
c) Follow-up data reported to AM within 48 hours of
receipt.
d) All referral guidelines to be shared with Agent sales
personnel.
e) Agent must identify themselves as U S WEST Strategic
Agent when responding to U S WEST sales referrals.
Printed: January 23, 1998 32
<PAGE> 44
APPENDIX E
5. PAYMENT REQUIREMENT-IN ORDER TO PROCESS THE INITIAL PAYMENT
FOR SALES THE FOLLOWING INFORMATION MUST BE PROVIDED.
a) Payment Plan Form (PPF)
b) Sold account package
c) Relevant contracts
6. AM, USWC AND STRATEGIC AGENT RESOURCE UTILIZATION
a) Agent will adhere to the responsibility and role
definitions related to resource utilization as
outlined in the Strategic Agent Sales Agreement.
Agent will have designated employee to perform
project management activities as described below:
b) Pre-sale:
- Pricing: Agent will do pricing on USWC services for
which they have been trained and/or given the
tools, i.e., AQCB, to do said pricing.
- Design: Once trained, Agent will do USWC network
design work.
- Contract preparation: Agent will prepare all
appropriate U S WEST contracts available through
AQCB. All other contracts will come through AM.
- Customer records: Agent must have a valid Letter of
agency (LOA) to obtain specific USWC account
information (Customer Proprietary Network
Information or CPNI) via the local Agent Vendor
Service Center (AVS), the Agent Marketing Web Site
or AM as appropriate.
c) Post-sale:
- Agent salesperson or project manager will pass
simple orders directly to the AVS. (For a current
project description, consult your local AM/AVS
product responsibility matrix.)
- For customer sales that are considered projects,
the Sold Account Package will be passed to AM by
the Agent's Project Manager.
- Billing: Agent personnel are responsible for
initial billing explanations and any questions
related to their USWC sale.
- Training: Agent is responsible for customer
training on USWC services.
- Credit information: On new USWC accounts, or
accounts requiring credit updating, the Agent shall
obtain required credit information from the
customer and, if necessary, a deposit or other
acceptable substitute.
- Repair: Agent will work with the appropriate USWC
repair organization on behalf of their customers,
to resolve network repair issues.
- Installation: Agent is responsible for management
of services implementation.
Printed: January 23, 1998 33
<PAGE> 45
APPENDIX E
7. PARTICIPATION IN THE AM/AGENT PERFORMANCE REVIEWS
a) When performance is identified as below standard in
defined areas, the Agent and AM will jointly develop
an action plan to bring performance up to standard.
8. COMMUNICATIONS
a) Agent will inform AM of any organizational changes
within their company that affect the Agent
relationship, i.e., changes in:
- personnel
- product line
- ownership
- agency compensation policies
- business plan
9. PAYMENT VERIFICATION
a) Agent is responsible for verification of accuracy of
AM payments (i.e., AACATS, Performance Bonus, etc.)
If inaccuracies are found, Agent is responsible for
communicating same to AM.
II. AGENT MARKETING RESPONSIBILITIES
1. USWC PRODUCT/SERVICE TRAINING
a) AM will provide training to Agent personnel.
b) AM will provide Agent with updates on products,
pricing or USWC policy changes on an as-needed basis.
c) AM will offer advanced training on emerging
technologies.
2. AGENT SALES COMPENSATION PROCESSING
a) AM will process all completed PPF's received by the
local AM office by locally specified date of the
month, in that month's business. Should there be
required variance in that cut-off date (e.g., at year
end), AM will communicate the date change in a timely
manner. If the PPF is received after the specified
cutoff date, AM will process the PPF in the next
month's business. If a PPF is received by AM that is
inaccurate or incomplete, it will be returned to the
Agent. Upon correction and resubmittal, AM will
process the PPF, under the normal time guidelines.
b) AM is responsible for providing a monthly AACATS
report to the Agent identifying their current month
and YTD results, including specific PPF data on
current month sales and pending PPF's.
3. USWC/AM RESOURCE MATERIALS
a) AM will make available to the Agent, resource
materials and updates for USWC products/services
represented by the Agent.
Printed: January 23, 1998 34
<PAGE> 46
APPENDIX E
4. USWC REFERRALS
a) AM agrees to distribute USWC referrals in a fair and
equitable manner consistent with Agent USWC product
focus, geographic scope and any known prior customer
relationships.
5. PROPRIETARY INFORMATION HANDLING
a) AM will treat the Agent's sales plan, client or
personnel information as proprietary information.
6. AM REPRESENTATIVE AVAILABILITY
a) AM will provide appropriate support to the Agent's
sales efforts. AM personnel shall negotiate with the
Agent if they request special AM support in such
areas as joint calls, sales meeting attendance,
pre-sale support and custom training.
Printed: January 23, 1998 35
<PAGE> 47
APPENDIX F
MARKET DEVELOPMENT PROGRAM (MDP)
USWC will provide co-marketing and co-advertising funds to the Agent. Funds are
provided on the basis of prior year contract revenue for USWC network products
and services. Determination of funded amounts are based on schedule shown below.
Funding amounts will be adjusted on an annual basis. Semi-annual funding expire
on June 30 and Dec. 31 of current year.
Use of this funds are to be approved by Agent Marketing, as a representative of
U S WEST, prior to receipt of funds. Agent must provide in writing purpose of
funds; identifying the period over which funds will be used, communications
media used by funds, plan for tracking success of campaign(s), and other
information that would be useful in determining value of MDP funding approval
should be included in written statement.
Promotion Basis Promotion Level Promotion Expiration
--------------- --------------- --------------------
Compensation based on 0.2% Compensation funds
previous 12 months are available on a
contract revenue on semi-annual basis.
products and services Compensation level
sold. for the next year will
be determined by
Jan. 31.
Printed: January 23, 1998 36
<PAGE> 48
APPENDIX G
TRIAL PROGRAMS
USWC is constantly developing new applications for emerging and existing
technologies and targeting sales efforts to particular geographies. Many of
these new applications or market entry initiatives are concepts which require
concept testing or trials. Agents participate in trials under addendum to this
contract and based on requirements below.
o Participation in any trial is determined by joint agreement
between USWC and selected Agent.
o Selection for trial participation is at the discretion of USWC.
o Compensation for participation in trial programs will be at the
discretion of USWC.
Printed: January 23, 1998 37
<PAGE> 49
DATE: March 24, 1999
TO: U S WEST Strategic Agents
FROM: Dennis Hruska, Sr. Director
RE: Notice effecting Compensation Schedule Changes
As outlined below, U S WEST is revising the compensation schedule described in
your 1998-2000 Sales Agency Agreement.
U S WEST is modifying the payout percentages for contracts submitted where the
installation occurs within six (6) months after the date of sale. Today your
contract reads: "For sale of service to be installed within six (6) months after
date of sale, initial compensation of thirty-five percent (35%) shall be earned
as of the date of sale and receipt of sold account package. Remaining
compensation of sixty-five percent (65%) shall be earned upon receipt and
acknowledgment of an updated customer record. . . . . In all cases, remaining
compensation amounts shall be paid on the basis on the installation of service
until USWC has upgraded its customer service records systems. . . ."
U S WEST is changing these terms. For sale of service to be installed within six
(6) months after the date of sale, initial compensation of fifty-five percent
(55%) shall be earned as of the date of sale and receipt of sold account
package. Remaining compensation of forty-five percent (45%) shall be earned upon
receipt and acknowledgment of an updated customer record. In all cases,
remaining compensation amounts shall be paid on the basis on the installation of
service until USWC has upgraded its customer service records systems.
These changes are effective immediately and are reflected in the compensation
paid for the period ending March 25.
This notice does not impact compensation schedules for either sales to be
installed within seven to twelve months or sales to be installed more than
twelve months from date of sale.
We recognize the burden that this swift change places on your accounting systems
but we felt that the ninety-day notification period would cause a greater burden
on your business. If you have concerns about this change I will be very happy to
discuss your situation.
Notice Effecting Compensation Schedule Changes Page 1 of 2
<PAGE> 50
Notwithstanding the 90-day provision of Section III in the Strategic Agent
agreement dated January 23, 1998, this change is effective immediately.
Your signature below acknowledges concurrence with this notification.
With Concurrence:
ICM
------------------------------
Agency Name
Dennis Schillinger
------------------------------
Authorized Representative
March 29, 1999
------------------------------
Date
/s/ Dennis Schillinger
------------------------------
Signature (Concur)
Please sign, copy and return the original to:
Linda Ensign
U S WEST Agent Marketing Operations
7800 E. Orchard Road, Suite 390
Englewood, CO 80111
Notice Effecting Compensation Schedule Changes Page 2 of 2
