EXHIBIT 10.42
ALTERNATE MAILING SYSTEM AGREEMENT
BETWEEN
THE
UNITED STATES POSTAL SERVICE
AND
INTERNATIONAL BILLING SERVICES, INC.
5220 ROBERT J MATHEWS PARKWAY
EL DORADO HILLS, CA 95762-5712
Bulk Third-Class
PURPOSE:
This service agreement, and any attachments, set forth the terms and conditions
for International Billing Services, Inc. of El Dorado Hills, California for use
of an Alternate Mailing System Agreement (AMS) as described and authorized by
the United States Postal Service in accordance with Domestic Mail Manual (DMM)
P730. If there is any difference between this agreement and the mailing
standards in the Domestic Mail Manual, the postal standards in the DMM will
govern. An Alternate Mailing System Agreement provides for other methods of
accepting permit imprint mail, not established in Domestic Mail Manual P710 or
P720, that show proper postage payment and mail preparation without verification
by weight.
CONDITIONS:
The conditions of authorization for Alternate Mailing System Agreements (DMM
P730.2.2) are:
- - Authorization to use AMS must benefit the USPS
- - Authorization to use AMS must include a signed agreement
- - An AMS agreement must specify the terms and conditions of the AMS
- - All postage must be paid by permit imprint unless otherwise permitted in
writing by the RCSC
- - There must be no additional costs to the USPS for an AMS agreement beyond
the costs of current mail acceptance procedures for the mail in question
- - The mailer must implement a quality control program that ensures proper
mail preparation and accurate documentation, subject to USPS approval.
The service agreement must include details of this program that ensure
proper mail preparation and accurate documentation, subject to USPS
approval. The service agreement must include details of this program.
Each AMS mailing must include a statement from the mailer certifying that
the approved quality control verification is done.
- - Authorization must not exceed 2 years.
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ARTICLE 1:
This Alternate Mailing System Agreement is for third-class Bulk Rate
nonidentical weight permit imprint mailings for The Sacramento Bee for which the
documentation and maintenance of records as outlined in Article 9 are maintained
by the mailer. This agreement is for specific mailings at the mailer's plant
(known as: IBS II) located in:
Sacramento, California
The mailer may request other AMS agreements for additional mailer plant
locations by submitting a written request to the postmaster at the office of
mailing. The request must include a complete description of the types of
matter to be mailed; the proposed method of paying postage; the proposed method
to determine correct mail preparation; and a statement of the reasons for
requesting the alternate mailing system. The USPS may review the mailer's
operation before ruling on the application.
ARTICLE 2:
Mailings under this agreement are limited to third-class Bulk Rate mail for The
Sacramento Bee. Mailings will be prepared as required by the applicable mailing
standards in the Domestic Mail Manual.
Specific primary and secondary documents are listed for use with this system.
The mailings will be produced at the IBS II plant in Sacramento, California.
ARTICLE 3:
The Postmaster or designee, Rancho Cordova, California will verify mailings at
the mailer's Sacramento, California plant. All mailings verified under this
agreement at the mailer's Sacramento, California plant will have funds withdrawn
from permit imprint account number 300 held with the Postmaster, Rancho Cordova,
California.
ARTICLE 4:
Mailer's Responsibilities:
1. International Billing Services, Inc. is responsible for complying with all
postal laws and regulations which may apply to the mailings including the
proper classification of materials as set forth in the DMM. Mailings must
be prepared and presented to the Postal Service in accordance with this
agreement.
International Billing Services, Inc., will tender mail prepared in
accordance with this Agreement only at entry points specifically approved
in advance by the Postal Service. The mailer's plant in Sacramento,
California will be the entry point for all mail entered under this
Agreement.
- 2 -
2. International Billing Services, Inc., will provide unrestricted access to
mail preparation areas for employees of the Postal Service to observe mail
preparation and to verify mailing records.
3. At the time mail is presented for acceptance and/or released by the Postal
Service, the mailer must be able to provide:
- - Primary Documents as described in Article 9
- - "Postal Accumulated Manifest Report" for each rate category
- - Consolidated Register of Mailing Statement (Business Day 3800 Summary with
Grand Totals)
- - Coding Accuracy Support System Report (PS Form 3553) or computer-generated
facsimile (DMM A950.5.2) for automation rate mailings
- - Carrier-Route Listings for Carrier-Route mailings
- - Any other documentation required by the Domestic Mail Manual for rate
eligibility.
ARTICLE 5:
International Billing Services, Inc., must maintain sufficient funds in an
advance deposit account at the Rancho Cordova, California Post Office for any
mailings entered and released by the United States Postal Service. (DMM P040.5.6
Prepayment)
ARTICLE 6:
The mailer will document and/or process damaged or withdrawn mailpieces as
outlined in Attachment "A" (Mailer's Quality Control Procedures).
The mailer will adhere to all quality control procedures and documentation as
outlined in the Quality Control Procedures attached to this agreement
(Attachment "A")
ARTICLE 7:
Attachment "B" includes sample copies of mailing documentation covered by this
agreement. The Manager, RCSC must be notified 80 days in advance for approval
to any proposed changes to this documentation which may affect correct
calculation/assessment of postage for mail released by the Postal Service under
this Agreement or affects any primary or secondary postal audit documentation
used to support this agreement.
ARTICLE 8:
Postal audit documents for this AMS will be maintained at the mailer's plant in
El Dorado Hills, California. If requested by the Postal Service audit documents
will be available for postal inspection at the Sacramento IBS II plant with
seven (7) days prior notice to International Billing Services, Inc., A sample
pack will be maintained at the mailer's plant located in El Dorado Hills,
California for mailings submitted by International Billing Services, Inc., under
the AMS agreement. The sample pack will include some of the required documents
as specified in Article 9 of this agreement and any additional documentation and
information desired by the mailer. Some documentation for this agreement is
maintained electronically (Article 10) and certain documentation is maintained
by the Postal Liaison because of space limitations in the sample pack. The
sample pack will consist of information for a particular "corp" or "plan."
- 3 -
The mailer defines a corp as a select client with an exact plan(s) consisting of
select envelopes and inserts (stuffers.)
The plan may differ numerous times for the same corp/client during a mailing
day. Maintenance of the documentation is required to permit reconciliation with
the statements of mailing and to enable the Postal Service to verify the
accuracy of the computations for individual mailings as well as for the
aggregate of all mailings. These records will be maintained centrally and
retained for a period of one year.
The mailer has been authorized to maintain in electronic format the following
providing the conditions in Article 10 are met:
- -The primary document, the "Postal Manifest Postage Listing," shows the
number of pieces of mail, postage for each piece by destination and
"corp/plan" or ":S-Key" and summarizes the postage and piece counts for each
mailing under this authorized Alternate Mailing System Agreement.
ARTICLE 9:
PRIMARY MAILING RECORDS FOR IMAGE BILLS
POSTAL MANIFEST LISTING - Shows rate qualification by ZIP Code for mailpieces
by route number, 5-digit, 3-digit ZIP Codes and by residual.
Customer has authorization in Article 10 to maintain this documentation
electronically if approved by the Manager, Business Mail Entry in Sacramento,
California.
SECONDARY MAILING RECORDS
1. Sample Pack enclosures for each corp/plan:
- - Plan Job Card (shows the number pieces, corp/plan, file number, inserts,
quality control checks initialed by each department as mail is processed
through printing, inserting, sealing, packaging, traying, etc.,)
- - Sample of job tray/sack labels for the exact corp/plan
- - Sample of mailing envelope with permit imprint including all inserts
- - Sample of tray labels for the exact corp/plan mailing
- - StatementsPLUS Close Out Index (used for monitoring all activities and
documents handling needed to close-out the corp/plan)
- - StatementsPLUS Plan Summary Report
- - Customer Return Letter
- - Turnabout Analysis Summary Information
- - Transmission Audit Report
- - Facsimile Work Request Customer Invoice
- 4 -
- - Customer Statement of Accounts or Billing Statistics/Billing Validation
Report
ARTICLE 10:
Electronic Storage of the "Postal Manifest Listing" for any mailing generated,
is acceptable under this Agreement providing:
- - The mailer must be able to provide the Postal Service the entire "Postal
Manifest Listing" for any mailing generated within seven days after the
date of mailing. The information must be provided by the mailer to the
Postal Service within 24 hours.
- - The information can be extracted from the electronic media for a single
mailpiece by keying the unique keyline from a specific mailpiece into the
computer
- - The mailer will ensure that for any mailing selected for postage
verification by the Postmaster or designee of Rancho Cordova, California
that the mailer will generate a complete hard copy of the "Postal Manifest
Listing" for the entire contents of one or more tray or containers within
that same mailing to the postal clerks verifying a mailing. The
information must be produced for verification of a mailing before a mailing
is released
- - The mailer will require 15 days advance notice to provide requests for the
"Postal Manifest Listing" beyond seven days from the date of mailing
ARTICLE 11:
Postal verification may occur at anytime. Verification will be conducted as
required to meet postal standards. If mailings are accepted at the mailer's
plant they are subject to Plant Load Operations approval by the Sacramento
District of the Postal Service. This may entail preliminary notice of mail
volume in advance to allow the Postal Service adequate time for truck/trailer
dispatches.
ARTICLE 12:
Overpayments and underpayments identified during USPS verification require a
postage adjustment. Verification samples are deemed to be representative of the
entire mailing and postage adjustments calculations are based on the total
mailing. The mailer must pay a penalty surcharge when the sampling verification
shows that the error exceeds 1.5% of the claimed postage. The total corrected
postage for the entire mailing and a penalty equal to 10% of the postage error
calculation is deducted from the permit imprint advance deposit account (DMM
P730.1.2.) Additionally, the mailer agrees to notify the RCSC, in writing,
regarding the reason for the error and how it will be prevented in the future.
ARTICLE 13:
Any underpayment of postage to the USPS detected by International Billing
Services, Inc., must be reported to the administering post office within five
(5) working days from the date of detection. The reporting office will advise
the administering RCSC of all underpayments.
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Any refund request or deficiency (underpayment) will trigger an investigation by
the administering RCSC and International Billing Services, Inc. to determine how
and why the error occurred, why it was not detected by the system, and what
corrective measures have or should be taken. A joint audit will be performed if
determined necessary by the manager of the administering RCSC.
If the Manager, RCSC, determines excess postage was paid or postage was
underpaid because of an error by International Billing Services, Inc. the cost
of conducting the audit to identify and correct the cause of the problem and the
total administrative costs and processing costs incurred by the Postal Service
will be charged to International Billing Services, Inc.
ARTICLE 14:
The Manager, Rates and Classification Service Center may revoke this AMS
authorization if the mailer (DMM P730.2.7):
- - Provides incorrect data for mailing and appears unable or unwilling to
correct all problems
- - Is not conducting required quality control procedures as described by the
mailer in Attachment A
- - No longer meets the criteria established by standard or the AMS agreement
- - Does not present a mailing under this AMS for six (6) months
- - Continues to present improperly prepared mailings
ARTICLE 15:
Duration and terms of this Agreement
The mailer may cancel this agreement at any time by giving written notice to the
San Bruno Manager, Rates and Classification Service Center.
ARTICLE 16:
Annual system reviews will be conducted by the San Bruno RCSC. Monthly reviews
will be conducted by either the Manager, Business Mail Entry, Sacramento
District, the Postmaster, Rancho Cordova, California or their designees.
ARTICLE 17:
This agreement will remain in effect for a one-year period beginning December
18, 1995 and ending December 17, 1996.
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ARTICLE 18:
This agreement consists of 18 articles and five (5) attachments and can only be
changed or modified by addendum with the approval of the Manager, San Bruno
Rates and Classification Service Center.
ATTACHMENTS DESCRIPTION
- - Attachment A Mailers Quality Control Procedures
- - Attachment B Primary Documentation Samples
- - Attachment C Mailer's Request for Alternate Mailing
System
- - Attachment D Mailer's Definition of Terms
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SIGNATURE PAGE - ALTERNATE MAILING SYSTEM AGREEMENT
FOR THE POSTAL SERVICE
J. M. Long Acting Manager, Customer Service Support
- --------------------------------- -----------------------------------------
Name Title
/s/J. M. Long 916 373-8703
- --------------------------------- ------------------------------------------
Signature Telephone
3/26/96 Sacramento, CA 95799-0070
- --------------------------------- -------------------------------------------
Date City, State, ZIP + 4
FOR THE POSTAL SERVICE
Larry Groce Postmaster
- --------------------------------- -------------------------------------------
Name Title
/s/Paulette Mahoney for Larry Groce 916 574-3062
- ---------------------------------- --------------------------------------
Signature Telephone
3/18/96 Rancho Cordova, CA 95670-9998
- ---------------------------------- --------------------------------------
Date City, State, ZIP + 4
FOR INTERNATIONAL BILLING SERVICES, INC.
Mury Salls Vice President Postal Relations
- ---------------------------------- --------------------------------------
Customer Name Title
/s/Mury Salls 916 939-4670
- ---------------------------------- --------------------------------------
Signature Telephone Number
3/21/96 El Dorado Hills, CA 95762-5712
- ---------------------------------- ----------------------------------------
Date City, State, ZIP + 4
For Rates and Classification Service Center
/s/Linda A. Deaktor Manager, Rates and Classification Service Center
- ------------------------------ ------------------------------------------------
Linda A. Deaktor Title
3/28/96 San Bruno, California 94096-9599
- ------------------------------ ---------------------------------------------
Date of Approval City, State, ZIP + 4
Attachment A
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Mailer's Quality Control Procedures
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
SAMPLE VERIFICATION CHECKLIST
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
CST 1
MAIL VERIFICATION
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
CST 1
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
CST 1
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
CST 1
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
CST 1
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
CST 1
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
CST 1
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
CST 1
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
CST 1
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
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9
CST 1
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10
CST 1
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ATTACHMENT B
SAMPLE DOCUMENTATION
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
Postage Summary
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
Postage Summary
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
Postage Summary
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
Postage Summary
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
Postage Summary
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
Postage Summary
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
Postage Summary
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
Postage Summary
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
Postage Summary
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
SAMPLE VERIFICATION CHECKLIST
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
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*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.
ATTACHMENT C - MAILER'S REQUEST FOR ALTERNATE
MAILING SYSTEM AGREEMENT
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
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ATTACHMENT D -- MAILER'S DEFINITION OF TERMS
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REQUEST.
PG 1 OF 5
DEFINITION OF TERMS
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REQUEST.
PG 2 OF 5
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