SECOND AMENDMENT TO
VOLUME PURCHASE AGREEMENT
THIS SECOND AMENDMENT (the "Amendment") is made effective this 1st day of April,
1995 to the Volume Purchase Agreement entered into an January 31, 1992, and the
Amendment to the Agreement entered into on ________________, 1993 (collectively
the "Agreement") by SPRINT COMMUNICATIONS COMPANY L.P. and EXECUTONE INFORMATION
SYSTEMS, INC. ("Reseller"). Sprint and Reseller are "Parties" hereto.
In consideration of the mutual promises contained herein, the Parties amend the
Agreement as follows:
1. Subparagraph 5(a) is stricken in its entirety and a new Subparagraph 5(a) is
added to read as follows:
a) Except as otherwise provided herein, the initial term of this Agreement (the
"Initial Term") shall commence on the date first written above and terminate May
3, 1998. At the end of the Initial Term the Agreement will remain in full force
and effect until terminated by either Party upon ninety days written notice to
the other Party. The agreement entered into between Sprint and Reseller
regarding Carrier Identification Code ("CIC") and release of Sprint's name for
the purpose of providing Reseller's customers with a fulfillment piece will also
continue in effect for the duration of the Agreement.
2. Exhibit B to the Agreement is stricken in its entirety and a new Exhibit B is
added to read as follows:
EXHIBIT B
PRICING
1. PRICING FOR DOMESTIC INTERSTATE SERVICES. The following interstate Services
will be priced as set forth below. As used herein, "Peak" period pricing applies
to traffic defined as "day" usage, and "Off-Peak" pricing applies to "evening"
and
"night/weekend" usage, as defined in Sprint's FCC Tariff No. 2, Section
5.1.A. The following interstate flat rates will apply to traffic originating and
terminating in the 48 contiguous states only. Tariff rates will apply to traffic
originating and/or terminating in Alaska, Hawaii, Puerto Rico and the U.S.
Virgin Islands.
DIAL 1 WATS
Gross Monthly Volume of Service Peak Off Peak
------------------------------- ---- --------
$0 to $2,499,999
$2,500,000 to $2,999,999
$3,000,000 to $3,499,999
$3,500,000 and above
FONLINE 800
Gross Monthly Volume of Service Peak Off Peak
------------------------------- ---- --------
$0 to $2,499,999
$2,500,000 to $2,999 999
$3,000,000 to $3,499:999
$3,500,000 and above
ULTRA WATS NETWORK EXTENSION
Gross Monthly Volume of Service Peak Off Peak
------------------------------- ---- --------
$0 to $2,499,999
$2,500,000 to $2,999,999
$3,000,000 to $3,499,999
$3,500,000 and above
ULTRA 800 NETWORK EXTENSION
Gross Monthly Volume of Service Peak Off Peak
------------------------------- ---- --------
$0 to $2,499,999
$2,500 000 to $2,999 999
$3,000,000 to $3,499:999
$3,500,000 and above
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FONCARD
Gross Monthly
- -------------
Volume of Service Peak Off Peak Surchg
- ----------------- ---- -------- ------
$0 to $2,499,999
$2,500,000 to $2,999,999
$2,000,000 to $3,499,999
$3,500,000 and above
2. PRICING FOR INTRASTATE SERVICES. A monthly credit based on intrastate usage
in the following jurisdictions will be applied to the amount invoiced for
Reseller's interstate usage (the "Interstate Adjustment"). The Interstate
Adjustment will equal the difference between (a) Sprint's Tariff price for
Reseller's intrastate usage of the following Service and (b) such Sex-vice
priced at the following rates for all time periods:
Ultra
Dial 1 WATS FONline 800
State WATS Net Ext 800 Net Ext
- ----- ------ ------- ------- -------
New York
N.Carolina
Florida
Texas
Penn.
California
(Intrastate)
California
(IntraLATA)
Virginia
The Interstate Adjustment will not exceed the amount invoiced for interstate
usage on the invoice to which the Adjustment is applied.
3. PRICING FOR INTERNATIONAL SERVICES. The following international Services will
be priced as set forth below. Billing increments are the first thirty seconds
and each six-second period thereafter.
A) ULTRAWATS NETWORK EXTENSION
Country Standard Discount Economy
------- -------- -------- -------
Argentina
Australia
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Austria
Belgium
Bermuda
Brazil
Chile
China
Costa Rica
Denmark
Finland
France
Germany
Greece
Guam
Country Standard Discount Economy
------- -------- -------- -------
Hong Kong
Hungary
India
Ireland
Israel
Italy
Japan
Malaysia
Mexico
Netherlands
New Zealand
Nicaragua
Norway
Poland
Portugal
Saudi Arabia
Singapore
South Africa
South Korea
Spain
Sweden
Switzerland
Taiwan
Thailand
UAE
United Kingdom
Venezuela
Dial 1 WATS
Country Standard Discount Economy
------- -------- -------- -------
Argentina
Australia
Austria
Belgium
Bermuda
4
Brazil
Chile
China
Costa Rica
Denmark
Finland
France
Germany
Greece
Guam
Hong Kong
Hungary
India
Ireland
Country Standard Discount Economy
------- -------- -------- -------
Israel
Italy
Japan
Malaysia
Mexico
Netherlands
New Zealand
Nicaragua
Norway
Poland
Portugal
Saudi Arabia
Singapore
South Africa
South Korea
Spain
Sweden
Switzerland
Taiwan
Thailand
UAE
United Kingdom
Venezuela
Canadian Terminating Traffic. The following special per minute rates
will apply to Canadian terminating traffic:
Service Day Evening Night
- ------- --- ------- -----
Ultra WATS Network Extension
Dial 1 WATS
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Canadian originating Traffic. The following special per minute rates
will apply to Canadian originating traffic:
Service Day Evening Night
------- --- ------- -----
FONline 800
Ultra 800 Network Extension
4. GENERAL PRICING PROVISIONS
A. Forward Pricing. From April 1, 1995 to March 31, 1996, services will
be priced under the Agreement as though Reseller generated the greater of (a)
its actual Gross Monthly Volume of Service or (b) $_________ in Gross Monthly
Volume of Service.
B. Extended Pricing offer. If Reseller maintains Gross Monthly Volume of
Service in excess of $_________ for a period of three consecutive months, Sprint
will propose an addendum to the Agreement to include special pricing for Gross
Monthly Volume of Service over the $5,000,000 level.
C. Signing Credit. Sprint shall apply a one-time credit to Reseller's
account in the amount of $__________ within 60 days following execution of this
Amendment by both Parties.
D. FoNline 800 Service Charge. There will be a $____ monthly recurring
service charge for each FONline 800 account.
E. Directory Listing Charge. There will be a $_____ monthly recurring
charge for 800 numbers (FONline 800 and Ultra 800) that require 800 toll-free
directory assistance listing.
F. COC Charge. There will be a $____ per port monthly recurring charge
for Central office Connections.
G. EFC Charge. There will be a $____ per port monthly recurring Entrance
Facility Charge when Reseller utilizes Sprint's entrance facilities.
H. Daytime Traffic Requirement. Reseller must maintain a minimum of __%
daytime traffic to
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receive the flat rate pricing provided in this Agreement. For every percentage
point that Reseller's daytime traffic falls below 851, the per-minute flat rates
for daytime traffic will increase by _________________________________________.
This increase will apply one month in arrears to all daytime rates. Reseller's
compliance with this requirement will be measured on a quarterly basis.
I.Primary Carrier Requirement. Reseller must use Sprint as its primary
underlying carrier for interexchange telecommunications services and will routs
at least 90% of its interstate Dial I WATS and Ultra WATS Network Extension
traffic to Sprint during the term of the Agreement. Reseller will provide Sprint
with the following information in a format mutually acceptable to the Parties:
(i) quarterly summaries of Reseller's customer invoices for interstate Dial 1
WATS and Ultra WATS Network Extension services; and (ii) an annual audited
summary of such invoices prepared by Reseller's independent outside auditor.
This minimum usage requirement will cease to apply if all of the following
conditions are satisfied: (a) Reseller obtains bonafide offers from two major,
nationwide interexchange carriers to provide Dial I WATS and Ultra WATS Network
Extension service (the "offers"); and (b) the Offers to provide Dial I WATS and
Ultra WATS Network Extension service for at least one year at prices averaging
at least $0.01 per minute better than the day/evening/night/weekend prices for
such services provided under the-Agreement; and (c) Sprint fails to match the
offer within 90 days after receiving notice thereof.
J. Usage Commitment. Beginning may 1, 1996, Reseller will generate each
month usage sufficient to result in a monthly net invoiced amount ("Net Monthly
Usage") of at least $_________ (the "Usage Commitment"). Reseller will pay a
surcharge (the "Usage Commitment Surcharge") any month that it fails to meet the
Usage Commitment. The Usage Commitment Surcharge will equal ten percent of the
difference between the actual Net Monthly Usage and the Usage Commitment. The
Usage Commitment Surcharge will be applied to Reseller's invoice one month in
arrears.
K. Usage Commitment Credit. Beginning May 1, 1996, Reseller will receive
a credit (the "Usage
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Commitment Credit") for each period of six consecutive months (a "Credit
Period") that Reseller's total Net Monthly Usage equals at least $__________.
The Usage Commitment Credit will equal all Usage Commitment Surcharges applied
to Reseller's account during the respective Credit Period. The Credit Periods
will be: May 1, 1996 to October 31, 1996; November 1, 1996 to April 30, 1997;
May 1, 1997 to October 31, 1997; and November 1, 1997 to April 30, 1998. The
Usage Commitment Credit will be applied as soon as possible following completion
of each Credit Period.
L. No Additional Discounts. No additional discounts in
any form, Tariff or otherwise, will be applied to reduce the flat rate
prices set forth in this Exhibit B.
M. Availability of Services. Services may be purchased under the
Agreement only by reseller and its majority-owned subsidiaries on behalf of
Reseller, its majority-owned subsidiaries, and customers of Reseller to whom
Reseller sells the service. Execution hereof in no way adversely -effects any
other existing agreements between Sprint and Reseller not referenced herein,
including but not limited to, the Promotional discount Agreement as presently
and subsequently amended.
N. Administrative Fee. If Sprint is subject to a PIC dispute
("slamming") charge as a result of Reseller's actions, Reseller shall, at the
sole discretion of Sprint, pay Sprint an administrative fee (the "Administrative
Feel') equal to fifteen dollars ($__) for each ANI involved in the PIC dispute.
The Administrative Fee is assessed to partially defray Sprint's expenses
associated with the handling of PIC disputes. The Administrative Fee will be
calculated and applied in six month intervals from the commencement of the
Agreement.
0. Transaction Fees. Reseller must pay Sprint the following fees (the
"Transaction Fees"), which will be measured and applied in six month intervals
from commencement of the Agreement:
a) If ANIs on the Sprint network make up over 15% of the ANIs
Reseller submits for activation during any six month period, Reseller must pay
Sprint
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a Transaction Fee of $25 for each ANI in excess of the 15% threshold; and
b) Reseller must pay Sprint a Transaction Fee of $2,500 per T-1
($1,500 per DAL) for T-1s that it submits for activation that are connected to
an existing Sprint account at the time the order is submitted.
P. Contributory and Eligible Table. The following table shows the usage
and products, both domestic and international, that contribute to the Gross
Monthly Volume of Service in the flat rate pricing tables. All usage under the
Agreement of Reseller and its majority-owned subsidiaries will be both
contributory and eligible in the following tables.
Usage Contributory Eligible Neither
- ----- ------------ -------- -------
Interstate X X -
Intrastate X X -
International X X -
Directory Assistance - - X
Operator Service - - X
Location Fees - - X
Channel Banks - - X
Line Charges - - X
Access Flow-through - - X
Nonrecurring Charges - - X
Taxes - - X
Products Contributory Eligible Neither
- -------- ------------ -------- -------
Dial 1 WATS X X -
Ultra WATS X X -
FONcard
Surcharge X X -
Usage X X -
FONline 800 X X -
Ultra 800 X X -
3. Intrastate special rates are stated in Peak and-Off-Peak pricing. Peak period
pricing will be applicable to traffic defined as "DAY" usage and Off-Peak
pricing will be applicable to traffic defined as "EVENING" and "NIGHT/WEEKEND"
in Sprint's FCC Tariff No. 2, Section 5.1.A.
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4. Sprint will continue to waive Reseller's Sprint T-1 installation charges for
the remaining term of the Agreement as stated in a memorandum dated September
13, 1994. Sprint will continue to provide a 20% discount off of the monthly
recurring charge for T-1 access as provided in a memorandum dated September 13,
1994.
5. All other terms and conditions of the Agreement shall remain in full force
and effect.
6. The offer to amend the Agreement as provided in this Amendment will be
withdrawn if this Amendment is not executed by both Parties on or before August
31, 1995.
EXECUTED by the undersigned effective the first day of April, 1995.
EXECUTONE INFORMATION SPRINT COMMUNICATIONS
SYSTEMS, INC. COMPANY L.P.
By: ________________________ By:______________________
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