THE FOLLOWING TERMS APPLY TO THE COMMPLIANCE GROUP’S (“TCG”) SMALL SERVICE PROVIDER COMPLIANCE ESSENTIALS SOLUTION (HEREAFTER, “COMPLIANCE ESSENTIALS SOLUTION”). BY ACCEPTING A SERVICE ORDER AND/OR EXECUTING THIS AGREEMENT, CUSTOMER AGREES TO THE TERMS SET FORTH BELOW IN ADDITION TO THOSE IN THE COMMPLIANCE GROUP’S MASTER SERVICE AGREEMENT (“MSA”) AND APPLICABLE SERVICE SCHEDULES, AS INCORPORATED HEREIN BY REFERENCE. THE TERMS SET FORTH IN THIS SCHEDULE SHALL TAKE PRECEDENCE OVER ANY INCONSISTENT TERMS IN THE MSA AND/OR OTHER APPLICABLE SERVICE SCHEDULES.
TCG is not a law firm, and TCG Services are not substitutes for legal advice from a licensed attorney. TCG does not review any information Customer provides for legal accuracy, draw legal conclusions, offer opinions, or apply the law to the facts of Customer’s situation. Neither hiring TCG, nor use of the Services, creates an attorney-client relationship between Customer and TCG or its employees and representatives. For legal advice for a specific problem, TCG will provide a referral to the law firm of Marashlian & Donahue, PLLC, or another licensed attorney, upon Customer request.
Description of Service
TCG’s Compliance Essentials Solution is designed specifically (and exclusively) for new entrants and small service providers operating in the heavily regulated and taxed Cloud Communications (VOIP) and Wireless (MVNO) markets. The Compliance Essentials Solution combines the tax and regulatory fee data produced by the most powerful communications tax engines in the market with the intelligence and experiential knowledge of the most trusted tax and regulatory compliance professionals in their respective fields to deliver a compliance solution that incorporates “risk management” to ensure each subscriber’s compliance footprint (along with the associated costs of compliance) grows and expands in a manner that aligns with risks. The Compliance Essentials Solution is the only compliance solution in the market that uses the combination of technology and professional experience to facilitate compliance while simultaneously controlling costs pursuant to a documented risk management calculus, all without sacrificing quality and the personalized attention of best of breed compliance professionals.
The Compliance Essentials Solution is comprised of the services listed in the Table 1, below.
The solution is sold as a bundled package for a $750 per month subscription fee, inclusive of the base license fee to an industry leading third-party vendor of communications tax and regulatory fee software database solution (hereafter “tax engine”).
The Terms & Conditions of Service applicable to each unique component of the bundled Compliance Essentials Solution, as listed in Table 1 below, are available here: https://thecompliancesquare.com/legal-center/. In the event of a conflict, the Terms & Conditions specific to the Compliance Essentials Solution, as set forth in this Schedule 6 or the Terms of Service applicable to Compliance Risk Management (“CRM”) Services, shall take precedence over the conflicting terms in the MSA and/or other applicable service schedule.
Limitations and Conditions to Qualify for Compliance Essentials Solution “Package”
- Estimated monthly “telecom” revenue must be less than $25,000 USD (for purposes of this service, “telecom” revenue shall mean all revenue processed by the tax engine for communications tax and regulatory fee rating);
- Available exclusively to providers offering VoIP (Interconnected and One-Way) or Wireless services; and
- Availability of “Basic” tax mapping services (subject to the $2,500 one-time or $250 per month over 12-month payment terms) shall be limited to customers qualified by TCG pursuant to the Step 1: Discovery Process, described below.
Pricing and Fees
The Compliance Solution Essentials package is comprised of a combination of:
- Professional Consulting Services (i.e., “Law-Related” services related, exclusively, to “Basic” tax mapping, as described below) and
- Subscription-Based Outsourced Compliance Services
Bundled Pricing and Fees:
“COMPLIANCE ESSENTIALS SOLUTION”
Bundled Components and Pricing/Fees
See Professional Services Component, below
$2,500 one-time OR
$250 per month for 12 month term
Compliance Services Bundle
See Table 2, below, for components of bundled solution
$750 per month
Unbundled Components (and Pricing and Fees, if sold separately):
“COMPLIANCE ESSENTIALS SOLUTION”
Unbundled Components and Pricing/Fees
|Service Component||Description||Unbundled Price|
Obtain FCC Registration (FRN)(as needed)
Obtain FCC Form 499 Registration (Filer ID)(as needed)
|AccuAgent Service||Washington D.C. Registered Agent||$125 annual|
|AccuReg Service – FCC Only||
Outsourced FCC Compliance Management, includes:
|$250 per month|
|Compliance Risk Management (CRM) Service||The CRM Service responds to the communications industry’s demand for a cost-effective method of managing compliance with the myriad of complex, diverse and costly regulatory and tax laws, rules and regulations applicable to communications services providers across the country.||$150 per month|
|License to Tax Engine Software Database||Telecommunications is the most taxed vertical in the United States, so experience matters when dealing with this level of complexity. A robust, best of breed tax engine software database is the critical component to the CRM Service and TCG’s ability to manage compliance utilizing the combination of accurate tax and fee data and the experiential knowledge of its tax and regulatory compliance professionals.||
$350 per month
Timing of Billing
Before commencing any services on behalf of customer, customer shall sign an Order Form and enter into an agreement with TCG to provide the Compliance Essentials Solution pursuant to the following Pricing and Fees:
$750 per month subscription-based fee
(covers all applicable service components set forth in Table 2, above)
$2,500 one-time OR $250 per month fee
(covers “Basic” tax mapping, as described below)
Customer’s payment of $2,500 one-time or $250 per month fee shall start the clock on a 60-day onboarding period.
If customer’s Product Catalog is successfully mapped by TCG pursuant to the terms applicable to “Basic” tax mapping Professional Consulting Services, TCG shall commence billing the $750 per month subscription-based fee on the 1stday of the month following the 60-day onboarding period. For example:
- Customer signs Order Form and Agreement on January 15th and pays $2,500 one-time or first of twelve (12) installments of $250
- 60-Day Onboarding Period commences
- TCG shall invoice first of twelve (12) installments of $750 on April 1st
If customer’s Product Catalog can NOT be mapped by TCG pursuant to the terms applicable to “Basic” tax mapping Professional Consulting Services, customer has two options:
Cancel Services with TCG. TCG shall retain $250 and refund all other amounts paid.
Agree to “Intermediate” or “Complex” tax mapping services through The CommLaw Group, pursuant to direct engagement of law firm. TCG shall assign all amounts paid to The CommLaw Group and shall extend the onboarding period by 30 days (total of 90 days after signing Order Form and Agreement) prior to invoicing first of twelve (12) installments of $750.
WHAT ARE “LAW-RELATED” PROFESSIONAL CONSULTING SERVICES?
State ethics rules allow attorneys to provide “law-related services,” either through their law firms or through distinct entities. State ethics rules recognize that “[a] broad range of economic and other interests of clients may be served by lawyers’ [ or law firms’] engaging in the delivery of law-related services.” “Examples of law-related services include … financial planning, accounting, … economic analysis, [and] tax preparation.”
DISCLAIMER: THE PROVISION OF LAW RELATED SERVICES BY THE COMMLAW GROUP IN CONNECTION WITH THE BASIC TAX ENGINE MAPPING AND PRODUCT CATALOG OPTIMIZATION INCLUDED IN THE SMALL SERVICE PROVIDER “COMPLIANCE ESSENTIALS” PACKAGE DOES NOT CONSTITUTE THE PROVISION OF LEGAL SERVICES, DOES NOT ESTABLISH AN ATTORNEY-CLIENT RELATIONSHIP.
Law-Related Professional Consulting Services Component of Compliance Essentials Solution
Completion of customer’s Product Catalog and mapping of the Product Catalog to the tax engine mapping are essential steps in the process of ensuring the data inputs are perfected, using best practices and best and reasonable efforts, thereby producing data outputs that align with expectations.
The following “Law-Related” Consulting Services are included with the Compliance Essentials Solution. An experienced telecom attorney, serving solely in the capacity of a business consultant and without providing any legal advice subject to the strictures of the Attorney-Client relationship, shall:
Step 1: Conduct Discovery Process:
To confirm customer’s qualification for “Basic” tax engine mapping component of the Compliance Essentials Solution, the Product Catalog will be solicited from customer and reviewed to verify the following –
- Communications services offered are comprised of interconnected VoIP or Wireless services;
- Total number of distinct communications services or products is reasonable, i.e., no greater than ten (10) distinct services and/or products, including bundles;
- Catalog does not include services with uncertain or ambiguous legal classifications that would necessitate customer conducting a cost/benefit analysis or otherwise necessitating legal research, analysis or advice to classify the services prior to mapping; or
- Other legitimate reason as identified by The CommLaw Group in its provision of law-related services through The Commpliance Group.
If, after the Discovery Process, it is determined that the customer’s Product Catalog DOES qualify as “Basic” and therefore qualified for “Basic” tax engine mapping (subject to the $2,500 one-time or $250 per month over 12-month payment terms), TCG will proceed to Step 2, below.
However, if it is determined that the customer’s Product Catalog DOES NOT qualify as “Basic” and therefore disqualified from the “Basic” tax engine mapping component of the Compliance Essentials Solution, customer shall be:
- provided Notice and an Explanation of the reasons for disqualification,
- informed whether the tax mapping qualifies as either “Intermediate” (and subject to a $5,000 one-time or $500 per month over 12-month payment terms) or “Complex” (subject to Individual Case Basis pricing), and
- referred to The CommLaw Group to:
- receive additional information regarding the Intermediate or Complex nature of the tax mapping process due to customer’s Product Catalog or other factors,
- respond to questions, and
- if interested, secure an engagement for legal services.
Any amounts paid or committed to pay TCG for “Basic” tax mapping shall be assigned to The CommLaw Group and applied to “Intermediate” or “Complex” tax mapping.
If customer declines to proceed with “Basic” or “Complex” tax mapping through The CommLaw Group, TCG shall refund all amounts paid or committed, less $250, which shall be compensation to TCG for conducting the Discovery, described above.
Step 2: Upon Confirmation of Qualification for Basic Tax Mapping:
Through “Law-Related” Professional Consulting Services provided by a telecom attorney from The CommLaw Group, acting solely, entirely, and exclusively through TCG in a non-legal, consultative role, TCG shall oversee the completion of a service provider’s Product Catalog and mapping of the catalog to the tax engine.
Once the Product Catalog has been mapped to the tax engine, TCG shall perform limited testing to confirm results align with expectations.
What to Expect After Product Catalog is Mapped to Tax Engine and Monthly Invoicing of Compliance Essentials Solution Fixed Fee Commences?
Two distinct components of the Compliance Essentials Solution are subject to expansion once customer “Goes Live” with either the billing & collection or tracking of taxes and fees through the tax engine: (1) Outsourced Compliance Services and (2) Tax Engine License Fees.
Compliance Services – Potential Expansion Based on Revenue Growth and Increases to Exposure
Once customer’s Product Catalog has been mapped to the tax engine, customer may begin applying communications taxes and regulatory fees to end user invoices and/or track the taxes and fees that would apply (if passed-through to end users).
Pursuant to the Compliance Risk Management Service (CRM Service) component of the Compliance Essentials Solution, TCG shall begin collecting, processing, and analyzing the monthly data reports produced by the tax engine in accordance with the terms of service applicable to the CRM Service.
If and when the accumulated communications taxes or regulatory fees exceed the risk tolerance threshold established by customer through the CRM Service, customer shall be provided notice by TCG alerting customer where (what jurisdiction and/or jurisdictional filing) and when customer should initiate the registration, remittance, and/or other processes necessary to bring customer into compliance and remit all current and accumulated taxes and/or fees to the applicable governmental body and/or collection agent.
If customer elects to implement the registration, remittance, and other compliance actions identified by TCG in the Risk Management Report produced in accordance with the CRM Service, the following TCG services and rates shall apply:
A LA CARTE AND ADDITIONAL SUBSCRIPTION-BASED SERVICES,
STANDARD FEES, AND TERMS OF SERVICE
AccuLicense Service – Registration and Licensing Services (See Schedule 1 for Terms of Service)
Secretary of State corporate registration
Public Utility Commission registration
(also includes registration with collection agents)
AccuReg Service – State Regulatory Compliance (See Schedule 2 for Terms of Service)
$40 per month per state for utility commission compliance (VoIP or Wireless Only)
AccuCorp Service – State Corporate Compliance (See Schedule 3 for Terms of Service)
$12 per month per state for Secretary of State compliance
AccuTax Service – Communications Tax and 911 Compliance (See Schedule 5 for Terms of Service)
$45 per state tax return*
$25 per local tax return
*The applicable fee for the preparation of a State Return that includes local tax calculations and allocations (“local allocation”) reported on a consolidated basis in a single State Return shall include up 1 locality at no additional charge. Thereafter, each block of 25 local allocations included in a consolidated State Return shall incur a $25 fee.
AccuAgent Service – State Registered Agent
$150 per state for Registered Agent Service in all states
There are limited exceptions to the above standard pricing. See Price Sheet, Order Form or for details.
COMMUNICATIONS TAXES AND REGULATORY FEES CALCULATION SERVICES
Tax Engine Software License Agreement
By purchasing the Compliance Essentials Solution, Customer agrees to the End User Software License Agreement (“EULA”) of the 3rd party software company that is responsible for providing, maintaining, and delivering the tax engine component of the bundled solution. TCG cannot and shall not be responsible for performing its duties with respect to the Compliance Essentials Solution, as set forth herein, unless and until Customer separately and concurrently executes the EULA.
The EULA between Customer and the 3rd party tax engine vendor establishes a direct contractual relationship between the parties. Customer shall be bound by the EULA, incorporated herein by reference, and any breach thereof shall also constitute a breach of Customer’s agreement with TCG.
Professional Services Related to Tax Engine Configuration/Implementation
Tax engine software is not static, unless Customer’s Product Catalog is static. If Customer’s Product Catalog changes, through additions, deletions, or modifications to the products and services sold by Customer, the tax engine must be configured or re-configured to ensure alignment with changes to Customer’s Product Catalog.
Prior to “Going Live” (in order to facilitate “Going Live” with tax and fee rating through the tax engine software), Customer shall receive up to one (1) hour of tax engine software configuration/ implementation support provided by TCG and the tax engine software vendor at no additional cost (i.e., up to one (1) hour of professional service support is included in the bundled price of the Compliance Essentials Solution). The one (1) hour of included professional services support includes up to one (1) hour of time for services provided by TCG and up to one (1) hour of time for services provided by the 3rd party tax engine vendor.
Thereafter, Professional Services arising from or related to the configuration, re-configuration, or management of the 3rd party tax engine software shall be available through TCG at a rate of $300 per hour, billed in ¼ hour increments. Professional services shall be provided either directly by TCG or by the 3rd party tax engine vendor, depending on the nature, timing, scope of Customer’s needs and other relevant factors, as determined in the sole discretion of TCG.
Tax Engine Software License Fees
If and when Monthly Revenue rated through the tax engine exceeds $25,000/mo., the following schedule of license fees shall apply:
|Monthly Revenue||TCG Monthly Billed|
|Under $25,000||Included in Bundle|
|Over $5,000,001||ICB Pricing|
For example: From January 2023 through December 2023, Monthly Revenue is under $25,000, the base monthly recurring fee under the Small Service Provider Essentials Package is $750, plus 5% admin fee. In January 2024, Monthly Revenue starts exceeding $25,000, triggering a +$200 increase to the package rate (reflected in the Tax Engine Software License element of the package, i.e., $350 per mo. license increases to $550 per mo.).
In certain instances, TCG may serve as a fund transfer agent between Governmental Agencies and Customer, and shall remit fees and taxes to the appropriate authorities on Customer’s behalf. To facilitate timely remittance of fees and taxes, TCG requires that Customer establish and timely funding suitable escrow accounts. Customer understands and acknowledges that TCG will not remit any payment to a Government Agency unless the appropriate escrow account or accounts are funded according to TCG’s instructions. Customer accepts all responsibility and liability for failure to remit any fee or tax.
Escrow Account Fulfillment
Customer must fund an Escrow Account with TCG to accelerate report submission, fee payment, and payment of any third-party Software License fees. As part of establishing an Escrow Account, Customer agrees to provide TCG with funds necessary to remit payment for Customer’s obligations and to replenish the Escrow Account upon request of, and within the funding deadlines set by, TCG.
TCG will use money deposited in the Escrow Account to pay fees imposed by the particular Governmental Agency and applicable third-party Software License vendor(s). Nothing in this Agreement mandates that TCG must make payment for fees out of the Escrow Account. TCG retains the authority to request direct payment from Customer for fees and expenses at its sole discretion. TCG is under no obligation to remit Reports, Returns or pay fees if the amount in the Escrow Account is insufficient to cover required payment. Customer agrees to hold TCG harmless for failure to file Reports or Returns and remit payments to Government Agencies if the amount in the required Escrow Account is insufficient or replenishment is not timely. Customer agrees to hold TCG harmless for any and all damages arising from non-payment of applicable third-party Software License fees procured through the Compliance Essentials Solution.
Consequences of Failure to Fund Escrow
Customer understands and agrees that timely and full funding of the Escrow (as requested by TCG) is necessary for TCG to provide Services in accordance with these Terms. Failure to timely and fully fund Escrow will likely result in delays, delinquencies and other non-compliance with Customer obligations to Government Agencies. Failure to timely and fully fund Escrow will also result in suspension of Customer’s access to any services delivered by applicable third-party vendors of software, including the vendor of Customer’s Tax Engine software. Customer agrees that failure to timely and fully fund Escrow may result in liabilities, fines, and penalties for which it is solely responsible. Customer agrees that failure to timely and fully fund Escrow may result in the suspension (and potential termination) of Customer’s access to the third-party Tax Engine solution, which will inhibit and potentially prevent Customer from billing communications taxes and regulatory fees to its customers in a timely manner, and Customer agrees it is solely responsible for any and all damages arising from such failure. In the event of its failure to fund Escrow, Customer waives any and all rights it may have against TCG and applicable third-party vendors of software, including Tax Engine software. Timely funding is non-negotiable.
Billing; Payment Obligations
Billing. Customer authorizes TCG to collect all applicable charges through Customer’s selected payment method, including through Escrow. Customer’s Credit Card authorization will remain valid until thirty (30) days after termination of TCG’s charging authority. Charges for all service elements of the Compliance Essentials Solution are billed in advance and due on the first day of the month prior to services being rendered; as set forth herein, failure to pay in full within seven (7) calendar days after the first day of the calendar month shall result in suspension of services and denial of access to any third-party software.
Advance Billing: Work will not be performed until payment is received.
- All one-time Fixed-Fee Services, such as registration and licensing, and associated costs, are billed in advance in accordance with customer’s chosen payment method.
- All Subscription-Based and recurring Fixed-Fee Services, such as monthly reporting, and associated costs, are billed in advance of the month in which services are provided.
- Unless paid in full, annually, all Software License Fees are billed in advance of the month in which services are provided.
Customer must notify TCG of its intent to dispute any charges associated with the professional or outsourced compliance services provided as part of the Compliance Essentials Solution within seven (7) days of the first day of the month prior to services being provided. Customer may not dispute any charges associated with Software License Failure to timely dispute constitutes Customer’s waiver of any right to contest the charges. Customer must always pay charges associated with software solutions provided by third-party vendors. Failure to do so shall result in suspension and, possibly, termination per below.
Term; Suspension and Termination
For purposes of the Compliance Essentials Solution only, the term of this Agreement shall be bifurcated into two phases.
Pre-Qualification (covers Professional Services only)
Post-Qualification (covers Professional Services, all compliance services included in the Compliance Essentials Solution and as added in the future, and third-party software)
Phase 1 Term. From the date Customer agrees to the Compliance Essentials Solution until no later than sixty (60) calendar days thereafter (if Customer is Qualified for basic tax mapping included in the solution) or ninety (90) calendar days thereafter (if Customer is Disqualified for basic tax mapping included in the solution), Customer may terminate its agreement with TCG without any cost other than $250 and associated administrative fees.
Phase 2 Term. If Customer is qualified for basic tax mapping during Phase 1 pre-qualification, the term of this agreement shall be twelve (12) months, which term shall commence on the 60th day after agreeing to the Compliance Essentials Solution.
Termination for Cause by TCG. See Master Service Agreement.
Termination of this Agreement for cause by TCG will not require any kind of a refund to Customer and will not affect any remedies available to TCG by law or in equity.
Termination for Cause by Customer. Customer may terminate this Agreement for cause by providing TCG with written notice specifying a material failure to provide the service specified under this Agreement, which affords TCG a reasonable opportunity to cure within fifteen (15) days from receipt of notice (“Cure Period”), and which TCG fails to cure within the 15-day Cure Period. TCG’s material failure does not include a failure resulting from Customer actions or Force Majeure.
Early Termination for Convenience. Either Party may terminate this Agreement by providing the other Party sixty (60) days’ written notice from the end date of the initial term. If Customer terminates the Agreement prior to the end of the then existing term, all prepaid payments are forfeit and Customer accepts early termination fees as set forth below.
Early Termination Fees (ETFs). Aside from the defined cost of third-party services procured through TCG, including Customer’s license to use the third-party software company’s Tax Engine, damages to TCG from early termination of the contracted services term would be difficult or impossible to determine. Therefore, Customer and TCG agree and stipulate that the following fees and expenses shall constitute the amount owed by Customer, which must be paid prior to TCG’s re-establishment of Customer access to any third-party software services, including Tax Engine software, procured pursuant to the Compliance Essentials Solution:
Payment, in full, of all amounts due on third-party software license term plus an early termination fee (ETF). The ETF shall be equal to 50% of the amount of Fixed-Fees and/or Subscription-Based Fees owed to TCG for the remaining Term. Customer agrees that the ETF is not a penalty.
Suspension of Agreement.
Suspension. In addition to any other termination rights of TCG set forth in the Master Service Agreement, TCG may suspend Customer’s services and access to and use of any online account, including access to and use of any third-party software, such as Tax Engine software needed to obtain tax and fee information prior to invoicing end customers, as follows:
Suspension and Termination Due to Non-Payment. Customers in default of the payment obligations of this Schedule 6 may have some or all services suspended, at TCG’s sole discretion, if such default is not cured within seven (7) calendar days after the first of the month of Customer’s receipt of written notice of the default. Services subject to suspension under this term include third-party services provided by affiliates or Strategic Partners. In addition, delinquent accounts may be terminated if such default is not cured by the 15th day of the month in which payment is due.
In the event of service suspension due to non-payment, Customer accepts sole responsibility for Customer’s continued compliance with applicable regulatory and tax filing requirements pending resolution. Upon payment of any Past Due balance, including a one-time reinstatement fee of $250, TCG will remove the suspension and determine whether any obligations were neglected during the period of suspension. If TCG is required to take curative actions or expedite delivery of Services due to Customer failure to timely remit payment, TCG will take all reasonably necessary curative actions to avoid non-compliance with applicable requirements. All curative actions are performed outside the scope of any Fixed-Fee services and shall be billed at Usage-Based consulting rates according to the applicable Service Schedule.
Effect of Expiration, Suspension or Termination of Agreement. Upon any expiration, suspension or termination of this Agreement, all rights granted to Customer hereunder immediately terminate and TCG will have the right to immediately and indefinitely terminate Customer’s access to, and use of, any licensed software or databases.
In the event of suspension or termination of this Agreement by TCG, Customer will be liable for payment for all services provided up to the date of termination, whether or not invoiced by the termination date, including software license fees, ETFs, as well as any expenses. Customer agrees to remain liable, in the event of termination or suspension, for all charges under this Agreement and applicable Service Schedules and all costs of collection including without limitation collection agency fees, reasonable attorneys’ fees, and arbitration or court costs.