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EXHIBIT 10.13
XDSL JOINT MARKET DEVELOPMENT AGREEMENT
This SERVICES AGREEMENT (the "Agreement") is executed as of March 23,
1999, by and between NORTHPOINT COMMUNICATIONS, INC., a Delaware corporation
("NorthPoint"), and NETWORK PLUS, INC., a Massachusetts corporation ("Network
Plus").
RECITALS
WHEREAS, Network Plus is investing $2,500,000 in NorthPoint's Series D-1
Preferred Stock (the "Financing") under the terms set forth in the Series D-1
Preferred Stock Purchase Agreement; and
WHEREAS, Network Plus desires to purchase xDSL products and services from
NorthPoint.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants and
agreements hereunder contained, the parties hereto agree to the following terms
and conditions, which are in addition to the applicable terms and conditions for
NorthPoint's tariff for telecommunications services:
1. PREFERRED STATUS. Network Plus will purchase all xDSL products and
services from NorthPoint, and NorthPoint will provide all xDSL services
and products requested by Network Plus, in each case unless (a) line
orders cannot be served by NorthPoint's network footprint at the time the
order is submitted, or (b) NorthPoint is unable to offer an xDSL-based
product or service requested by a Network Plus end-user, and such product
or service is offered by another xDSL provider in such end-user's market.
This Agreement does not prevent Network Plus from providing xDSL services
over its own xDSL facilities-based network.
2. TERM. The term of this Agreement shall be two years from the date hereof.
Thereafter, the Agreement shall continue on a month-to-month basis until
terminated upon thirty (30) days prior written notice by either party
hereto.
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3. PRICING.
3.1 MONTHLY RECURRING CHARGES. Network Plus will receive the
discounted xDSL products set forth in Appendix A at the prices set
forth in Appendix A for line orders received by NorthPoint on or
after the date hereof. Initially, the discounted rate shall be
pursuant to the 10,000 line Ramp Schedule set forth on Appendix A.
However, if Network Plus exceeds the line commitment level
associated with the any greater line ramp schedule set forth in
Appendix A in any quarter (such quarter defined as the relevant
3-month period set forth on Appendix A), Network Plus will receive
NorthPoint xDSL services at the discounts set forth in such
greater line ramp schedule for the subsequent quarter. During each
quarter thereafter, Network Plus shall receive discounts at the
greater line ramp schedule so long as it meets the quarterly line
commitments associated with the greater line ramp schedule. If
Network Plus fails to meet the line levels associated with the
greater line ramp schedule in any quarter, its discounts will be
revised downward to the ramp schedule associated with its actual
quarterly line installations. In no event shall Network Plus
receive discounts less than those associated with the 10,000 line
Ramp Schedule for products listed on Appendix A. Additionally, if
NorthPoint decreases its standard pricing, then Network Plus'
monthly recurring charge will be concurrently reduced.
3.2 INSTALLATION CHARGE. Volume pricing applies only to xDSL monthly
recurring charges. Standard prices will apply to installation and
other applicable non-recurring charges.
3.3 INTERCONNECTION CHARGE. The monthly interconnection charge will be
[**] for each DS3. When Network Plus is collocated in the same
site as NorthPoint's ATM packet-switch, the cross connect charge
will be [**] per collocation DS3 port. Interconnection charges
will be waived in each market until [**] Network Plus end-users
are installed in such market, provided that such period of waiver
shall not exceed six (6) months.
3.4 MOST FAVORED NATIONS. The rates and charges for NorthPoint xDSL
services set forth on Appendix A hereto shall be equal to or lower
than the rates and charges imposed within NorthPoint's network
footprint by NorthPoint on any of its customers for the same
products or services in comparable or lesser quantities in
comparable markets.
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4. LINE COMMITMENT. Network Plus will install a total of 10,000 lines by the
end of the two-year term. An order for any product listed on Appendix A
shall count as one installed line for purposes of this Section 4. Service
orders for future NorthPoint xDSL business products will count towards
Network Plus's line commitment on the same terms offered to similarly
situated providers. The terms of the installation are set forth on
Appendix B. A port reservation fee of [**] per line will be charged at
the end of each year for each line less than the aggregate line
commitment for that year, which shall be NorthPoint's sole remedy in the
event that Network Plus fails to meet the line commitment set forth in
this Section 4.
5. MARKETING FUNDS.
5.1 CO-MARKETING FUNDS. Network Plus is eligible to receive from
NorthPoint (i) a "kick-start" launch fund of [**] as of the
beginning of the first year of the two-year term for new market
launches, and (ii) market development funds ("MDF") of [**] per
new line installed. NorthPoint and Network Plus shall agree in
writing as to the manner in which all of the above-mentioned
co-marketing funds shall be spent prior to disbursement of such
funds. Such funds will be subject to the co-marketing conditions
and requirements of Appendix C hereto; provided that Network Plus
shall, during the second year of the two-year term, match the
funds granted pursuant to subsection (i).
5.2 OTHER PROMOTIONS. Network Plus is not eligible for any other
NorthPoint co-marketing fund programs other than those specified
herein during the term of this Agreement.
6. BRANDING. Network Plus may identify NorthPoint as its xDSL service
provider and may include NorthPoint's logo on marketing and other
materials promoting NorthPoint's and Network Plus's bundled xDSL
services, but only where NorthPoint has approved such use in writing,
which approval shall not be unreasonably withheld, and subject to the
following: Network Plus shall use NorthPoint's logo subject to a
non-exclusive, non-transferable license granted hereby. The use of
NorthPoint's logo shall be in a manner and proper logo form as NorthPoint
may direct from time to time. Network Plus will not make any deletions or
additions to the logo, nor otherwise use the logo, except as specifically
instructed by NorthPoint. Network Plus shall not use any other logo or
trademark that could be confused with NorthPoint's logo or that may
detract from the logo's distinctiveness and goodwill. Network Plus shall
promptly report to NorthPoint any infringement of, imitation of or
challenge to, the logo, of which Network Plus may become aware. Network
Plus will provide all reasonable assistance (other than financial) as
requested if
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NorthPoint commences or defends any action relating to Network Plus' use
of NorthPoint's logo, provided that Network Plus shall receive reasonable
compensation for such assistance, including out-of-pocket costs. Network
Plus will use reasonable efforts to maintain the goodwill associated with
NorthPoint's logo.
7. PERFORMANCE REQUIREMENTS. NorthPoint will provide its services in the
manner set forth in Appendix B. Network Plus understands that certain
performance requirements are affected by Local Exchange Carrier (LEC)
policies and practices. To the extent that Network Plus has notified
NorthPoint of any failure to meet agreed performance requirements
(excluding any and all failures arising from end-user or Network Plus
delays) that materially affect Network Plus's ability to install
end-users, and NorthPoint fails to correct such identified problems by a
mutually agreed date (the "Repair Date"), Network Plus will be relieved
of its line commitment obligations under Section 4 for those
materially-affected orders from the Repair Date until the date upon which
NorthPoint corrects the identified problems.
8. PRODUCT DEVELOPMENT. Network Plus may make recommendations to NorthPoint
regarding products that Network Plus would like NorthPoint to develop.
NorthPoint will make a good faith determination as to whether development
of such a product would be a commercially viable opportunity that is
consistent with NorthPoint's business goals. NorthPoint may, if it is
considering developing such a product, require that Network Plus commit
to purchasing a certain volume of such product, the specific terms of
which would be mutually agreed upon by the parties at such time.
9. MISCELLANEOUS.
9.1 TERMINATION. Upon termination of this Agreement by either party,
NorthPoint will complete provisioning of all lines ordered prior
to the termination date and will maintain all of the Network Plus
and end-user xDSL lines for the remainder of the term of each
particular service order. During the time that any service orders
remain in effect, Network Plus will continue to pay all monthly
charges for the lines that were installed pursuant to such service
orders. Network Plus shall not actively cause any xDSL lines to be
disconnected and reconnected to any other competitive xDSL
provider for a period of one year after the termination of this
Agreement. Network Plus will pay a one-time disconnection fee of
[**] per line for all lines disconnected and reconnected to other
competitive xDSL providers within [**] of the termination of this
Agreement. For the purposes of this Agreement, Network Plus shall
not be considered a competitive xDSL provider.
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This Section 9.1 shall not cause Network Plus to incur a
disconnection fee when the end-user is moved to Network Plus' xDSL
network.
9.2 NO THIRD PARTY BENEFICIARIES. Except as specifically provided
herein, this Agreement does not provide and shall not be construed
to provide third parties, including any customer, with any remedy,
claim, and cause of action or privilege. The parties specifically
acknowledge and agree that either party's operating subsidiaries
shall be entitled to order and provision xDSL lines on the terms
and conditions hereunder, and, as such, are intended third party
beneficiaries of the rights under this Agreement; provided
however, that such third party beneficiaries shall agree in
writing to be bound by the terms of this Agreement.
9.3 FORCE MAJEURE. Neither party shall be responsible for any failure
to perform any obligation or provide service hereunder because of
any (i) act of God, (ii) war, riot or civil commotion, (iii)
governmental acts or directives, strikes, work stoppage, or
equipment or facilities shortages, in any such case which are
being experienced by providers of telecommunications services
generally and not targeted or directed at NorthPoint specifically,
or (iv) other similar force beyond such party's reasonable
control.
9.4 INDEMNIFICATION. Each party hereto shall indemnify the other party
and its affiliates and their respective representatives, in their
capacities as such, and their respective successors, assigns,
heirs and personal representatives (collectively, "Indemnified
Parties") against and hold each of them harmless from any and all
damage, claim, action, suit, proceeding, judgment, loss,
liability, cost and expense (including reasonable expenses of
investigation and attorneys' fees and expenses as incurred)
incurred or suffered by any Indemnified Party arising out of or
relating to any breach of any covenant or agreement of the other
party contained herein or in any other agreement executed in
connection herewith.
9.5 LIMITED LIABILITY. In no event will either party hereto and/or any
of its affiliates be liable to or through the other party for any
of the following: (i) damages caused by the other party's and/or
any of its affiliates' failure to perform their obligations and
responsibilities; (ii) claims or demands brought against the other
party by third parties, other than those third party claims in
respect of which such party is expressly obligated to indemnify
the other party pursuant to a provision of this agreement; or
(iii) except as otherwise set forth herein, any lost profits, loss
of business, loss of use (or interruptions of business), lost
savings, lost opportunities or other consequential, special,
incidental, indirect, exemplary or punitive damages, any or all of
which arise from or in connection with the delivery, use, or
performance of service governed
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by this Agreement, even if a party and/or any of its affiliates
has been advised of the possibility of such loss.
9.6 FURTHER ASSURANCES. Each party hereto shall execute and/or cause
to be delivered to each other party hereto such instruments and
other documents, and shall take such other actions, as such other
party may reasonably request for the purpose of carrying out or
evidencing any of the transactions contemplated by this Agreement.
9.7 ENTIRE AGREEMENT; AMENDMENT IN WRITING; SEVERABILITY. This
Agreement, which includes the Exhibits, Schedules, Appendices and
other agreements expressly referenced herein, constitutes the
entire agreement between the parties concerning the subject matter
hereof and supersedes any prior agreement, representations,
statements, negotiations, understandings, proposals or
undertakings, oral or written, with respect to the subject matter
expressly set forth herein. Any amendment or supplement to this
Agreement shall be in writing and duly executed by both parties.
If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, each party agrees that such provision
shall be enforced to the maximum extent permissible so as to
effect the intent of the parties, and the validity, legality and
enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby. If necessary to
effect the intent of the parties, the parties shall negotiate in
good faith to amend this Agreement to replace the unenforceable
language with enforceable language that reflects such intent as
closely as possible.
9.8 EXPENSES. Each party shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and
performance of this Agreement.
9.9 ATTORNEY'S FEES. If any legal action or other legal proceeding
(including arbitration) relating to the transactions under this
Agreement or the enforcement of any provision of this Agreement is
brought against any party hereto, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and
disbursements (in addition to any other relief to which the
prevailing party may be entitled).
9.10 CHOICE OF LAW; VENUE; JURY TRIAL.
9.10.1 This Agreement is to be construed in accordance with and
governed by the internal laws of the State of New York
without giving effect to choice of law.
9.10.2 Each of the parties hereto irrevocably waives the right
to a jury trial in connection with any legal proceeding
relating to
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this Agreement or the enforcement of any provision of this
Agreement.
9.11 NOTICES. All notices or other communications required or permitted
to be delivered to any party under this Agreement shall be in
writing and shall be sent by registered or certified mail, by
courier or express delivery service or by facsimile, addressed or
sent: (a) if to NorthPoint: NorthPoint Communications, Inc., 222
Sutter Street, 7th Floor, San Francisco, California 94108-4458,
Attention: Steve Gorosh, Esq., Telecopier: 415-403-4004, and (b)
if to Network Plus: Network Plus, Inc., ________________________,
Attention: George Alex, Telecopier:
(617) 786-4075.
9.12 ASSIGNMENT. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the successors and permitted
assigns of the parties hereto. Upon prior written notice, either
party may assign or transfer its rights or obligations under this
Agreement to any third party.
9.13 CONFIDENTIALITY; PUBLICITY. The parties acknowledge and agree that
the Mutual Non-Disclosure Agreement between them, dated
_______________, 199__, remains in full force and effect between
the parties. In addition, neither party hereto will (i) provide
billing detail, invoice information or any other information to
any third party that will enable such third party or another party
to determine the prices that either NorthPoint or Network Plus
charges for its services provided hereunder, or (ii) divulge in
any other way to its customers, end-users, channels, partners or
any third party the prices or other terms that either NorthPoint
or Network Plus will receive under any agreement between such
parties. Any disclosure required under any state or federal law or
regulation shall be exempt from this provision, so long as the
revealing party shall provide the other party with written notice
of such proposed disclosure. Subject to the foregoing, any public
disclosure of this Agreement and the parties' respective
relationships shall require written pre-approval from the other
party, such approval not to be unreasonably withheld.
9.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
9.15 HEADINGS. The headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of
this Agreement and shall not be referred to in connection with the
construction or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this STRATEGIC
DEVELOPMENT AND SERVICES AGREEMENT as of the date set forth in the first
paragraph hereof.
NORTHPOINT COMMUNICATIONS, INC.
By: [illegible]
-------------------------------------------
Name: [illegible]
Title: Chief Development Officer
NETWORK PLUS, INC.
By: /s/James J. Crowley
-------------------------------------------
Name: James J. Crowley
Title: Executive VP and COO
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APPENDIX A
NETWORK PLUS PRICING PLAN
TWO-YEAR TERM
PRICE SCHEDULE FOR MONTHLY RECURRING XDSL CHARGE
FORWARD-PRICED TERM DISCOUNT SCHEDULE
TOTAL LINES 160/144 200 416 784 PLUS 1040 PLUS T1-SPEED
----------- ------- --- --- -------- --------- --------
[**] [**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**] [**]
PRICING TABLE*
TOTAL LINES 160/144 200 416 784 PLUS 1040 PLUS T1-SPEED
----------- ------- --- --- -------- --------- --------
[**] [**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**] [**]
* Standard and term discount prices for CA, IL, MA, NY, GA, MI and
Washington, D.C. Other states' pricing may differ based on local loop cost.
** The pricing terms set forth herein supersede and replace the pricing terms
set forth in NorthPoint's tariff.
TWO-YEAR RAMP SCHEDULE
LINE TOTAL RAMP [**] [**] [**]
--------------- ---- ---- ----
First Year - First Qtr [**] [**] [**]
First Year - Second Qtr [**] [**] [**]
First Year - Third Qtr [**] [**] [**]
FIRST YEAR END [**] [**] [**]
Second Year - First Qtr [**] [**] [**]
Second Year - Second Qtr [**] [**] [**]
Second Year - Third Qtr [**] [**] [**]
SECOND YEAR END [**] [**] [**]
PRICE SCHEDULE FOR MONTHLY INTERCONNECTION CHARGE PER DS3
1-YEAR LINE COMMITMENT DISCOUNT DS3 COLLOCATION
[**] [**] [**] [**]
* INTERCONNECTION CHARGE WILL BE WAIVED IN EACH MARKET UNTIL [**] END-USERS
ARE INSTALLED OR UP TO [**] WHICHEVER IS SHORTER.
- - The pricing terms set forth on this Appendix A supersede and replace the
pricing terms set forth in NorthPoint's tariff.
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APPENDIX B
PROVISIONING AGREEMENT
1. ORDER PLACEMENT AND CONFIRMATION
Network Plus or its designated agent shall place an order for xDSL
Services ("Order") via email or alternate method(s) of submission satisfactory
to NorthPoint of each Order on NorthPoint's Service Provisioning Order Form. All
Orders placed by Network Plus with NorthPoint will be treated equally with
orders submitted by other NorthPoint customers and affiliates.
2. CIRCUIT ORDER AND DELIVERY
NorthPoint will order the circuit from the ILEC. NorthPoint shall manage
all interactions with the ILEC with respect to the delivery of the circuit.
Network Plus recognizes that the actual circuit delivery date is subject to the
provisioning schedule of the ILEC.
3. INSTALLATION
Network Plus will have the option to perform installation of NorthPoint's xDSL
services. When Network Plus elects not to perform an installation, the following
terms will apply:
"Installation" of a Customer shall consist of a service call by a skilled
technician, employed by NorthPoint, its agent, or its contractor ("NorthPoint
Tech"), who will install the xDSL Services by configuring, enabling and testing
the high-speed xDSL "access device" (routers or associated router operating
systems will be configured only to the extent necessary to provide NorthPoint
with visibility to such device at levels 2 and 3 of the OSI reference model
which may include a "Ping" test and/or an file transfer to/from the NorthPoint
Node to conform connectivity), and associated inside wiring to a defined "jack"
on the end-user premise (collectively "Equipment") to obtain access to the
NorthPoint Network. "NorthPoint Network" consists of high-speed ATM
communication circuits connecting nodes located in central offices providing a
communication connection from a Customer to Network Plus utilizing xDSL
technology. "Access" to the NorthPoint Network is define as xDSL access device
visibility and accessibility through a NorthPoint Network node. NorthPoint will
use its best commercially reasonable efforts to complete Installations of the
xDSL Services within seven business (7) days of the delivery of the circuit by
the ILEC. The NorthPoint Tech's verification that the Customer can properly
access the NorthPoint Network shall constitute final Installation.
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Unless otherwise agreed to by the parties, NorthPoint will schedule the
Installation with Network Plus and Network Plus will notify the end user of the
Installation appointment. Installation appointments may be scheduled
Monday-Friday, first appointments begins at 8 a.m. and the last appointment
begins at 3 p.m. local time. A NorthPoint Tech will arrive within an assigned
2-hour window. The Customer should plan for the Installation to take [**] to
complete after the arrival of the NorthPoint Tech.
4. BILLING AND PAYMENT
NorthPoint will provide to Network Plus a consolidated statement of
account for all charges relating to the xDSL Services and Equipment. All charges
and fees for xDSL Services and Equipment provided to Customers shall be billed
by NorthPoint directly to Network Plus, and Network Plus shall be solely
responsible for making prompt and complete payment to satisfy all such billings.
NorthPoint shall bill Network Plus for all applicable federal, state, and local
mandated surcharges, fees, user's fees, universal service contributions and
other applicable taxes. NorthPoint shall express mail the statement of account
to Network Plus on the first day of the month for such month of service. Any and
all statements of account sent by NorthPoint to Network Plus shall be payable to
NorthPoint within [**] of receipt of such statement of account by Network Plus.
If such statement of accounts are not paid by Network Plus on or prior to the
due date, late fees shall accrue and become immediately due and payable on the
outstanding unpaid, undisputed balance at the rate of 1.5% per month (or the
highest amount permitted by law, whichever is lower).
5. SERVICE LEVEL COMMITMENTS
NorthPoint shall provide to Network Plus the following service level
commitments ("Service Level Commitments").
5.1 PROVISIONING AND INSTALLATION INTERVAL. NorthPoint shall use its best
commercially reasonable efforts to complete Installation of the xDSL Services
within seven business days after the actual ILEC loop installation interval
(excluding Network Plus and Customer delays). NorthPoint will not be held
responsible for events beyond its control which delay or preclude Installation
(e.g., accessibility to Customer premise, wiring closets, availability of
customer, force majeure, etc.) The Installation will be determined to be
completed correctly based upon a post Installation performance check completed
by the NorthPoint Tech confirming that the Customer can properly access the
NorthPoint Network (as outlined above).
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5.2 LATENCY. NorthPoint guarantees an average of [**] or less round trip
latency on the NorthPoint backbone during any one-hour period. If the average
round trip latency is greater than [**] during any one hour period, NorthPoint
will provide any Customer whose end users are affected thereby with a service
credit of one days recurring charge to the Customer attributable to each
affected end user. "Round trip" shall mean the time a packet takes to travel
from the NorthPoint ATM switch to the NorthPoint DSLAM located in a central
office and back, excluding packet serialization time. NorthPoint will
electronically monitor these latency times on its backbone.
5.3 THROUGHPUT. NorthPoint guarantees that an average of [**] of the
packets attempted to be delivered will be delivered by NorthPoint between the
NorthPoint ATM switch and the NorthPoint DSLAM located in a NorthPoint central
office over any 24-hour period. "24-hour period" shall mean midnight Pacific
Time to midnight Pacific Time. If NorthPoint's average packet delivery
percentage is less than [**] for any Customer's end-user during any 24-hour
period, NorthPoint will provide the Customer with a service credit of [**] of
that Customer's end-user's monthly service charge, based on a[**]. NorthPoint
will only provide [**] and no credit shall apply in the event of a service
outage. NorthPoint will electronically monitor the Packet Delivery at the
DSLAM's interface toward the NorthPoint ATM switch.
6. APPLICATION OF CREDITS
Credits will be applied to the next invoice provided to Network Plus by
NorthPoint under Section 4.
7. CUSTOMER CARE
Within ten (10) days of the execution of this Agreement, NorthPoint shall
provide customer care procedures to Network Plus, including procedures with
respect to online or phone reporting, confirmation of problem and resolution of
problem. It is agreed that Network Plus will provide first level support to
Customers and NorthPoint shall provide second level support to Customers.
NorthPoint's customer care support shall be available 24-hours a day, 7-days a
week.
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APPENDIX C
CO-MARKETING PROGRAM
NORTHPOINT CONDITIONS AND REQUIREMENTS
"KICK-START" LAUNCH FUND
- -- The parties shall agree in writing on how Kick Start Launch Fund shall be
spent prior to disbursement.
MARKET DEVELOPMENT FUND (MDF)
- -- NorthPoint will accrue MDF on Network Plus's account for each new xDSL
line installed. The amount will be based on the line commitment.
- -- The parties shall agree in writing on how MDF shall be spent prior to
disbursement.
MATCHING REQUIREMENTS
- -- For the MDF, NorthPoint will match Partner's funding dollar-for-dollar,
up to the total amount available in Network Plus's co-marketing account.
When a Partner submits claim for MDF, NorthPoint will reimburse up to 50%
of the total cost of the activity.
TERM FOR USE OF CO-MARKETING PROGRAM DOLLARS
- -- Kick-Start Launch Funds must be used within (3) months of market launch --
MDF must be used within (3) months of being earned
BRANDING REQUIREMENT
- -- NorthPoint brand and logo must be visible (print) and/or mentioned
(radio/TV) on all Network Plus' marketing communications for which
Co-Marketing funds will be applied.
REIMBURSEMENT METHODOLOGY
- -- Upon Partner's submission of all relevant receipts, NorthPoint will
process reimbursement via either a credit to Network Plus's account or a
direct payment to Network Plus. Form of payment is at discretion of
Network Plus, provided account is in good standing (including full
payment of applicable port reservation fees). Upon payment by NorthPoint
to Network Plus, MDF balance will be debited accordingly.
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