Exhibit 10.8
CONFIDENTIAL TREATMENT REQUESTED
NETWORK SERVICES AGREEMENT
by and between
AMERICA ONLINE, INC.
and
BBN CORPORATION
Effective as of December 31, 1999
CONFIDENTIAL TREATMENT REQUESTED
TABLE OF CONTENTS
-----------------
MASTER AGREEMENT
1. BACKGROUND, OBJECTIVES AND WAIVER........................................... 1
1.1. Background and Objectives............................................... 1
1.2. Termination of Original Agreement; Waiver............................... 1
2. TERM......................................................................... 2
3. PROVISION OF SERVICES........................................................ 2
3.1. General................................................................. 2
3.2. Resale of Dedicated Resources........................................... 3
3.3. Sale of Vendor Network.................................................. 3
4. ORDERING..................................................................... 3
4.1. General................................................................. 3
4.2. Order Tracking.......................................................... 3
5. ACCEPTANCE TESTING AND FINAL ACCEPTANCE...................................... 3
6. PROPRIETARY RIGHTS........................................................... 4
6.1. Ownership of Proprietary Information.................................... 4
6.2. Ownership of Vendor Network............................................. 4
6.3. Telephone Numbers....................................................... 4
7. SERVICE LEVELS............................................................... 4
8. CHARGES AND TAXES............................................................ 4
8.1. General................................................................. 4
8.2. Taxes................................................................... 5
8.3. Certain Obligations Corresponding to the Waiver......................... 6
9. INVOICING AND PAYMENT........................................................ 6
9.1. Invoicing............................................................... 6
9.2. Payment Due............................................................. 7
9.3. Accountability.......................................................... 7
9.4. Disputed Charges........................................................ 7
10. AUDIT....................................................................... 7
10.1. Audit Rights............................................................ 8
10.2. Records Retention....................................................... 8
11. CONFIDENTIALITY............................................................. 8
11.1. Confidential Information................................................ 8
11.2. Obligations............................................................. 8
11.3. Exclusions.............................................................. 9
11.4. Residual Knowledge...................................................... 9
11.5. Customer Data........................................................... 10
12. REPRESENTATIONS, WARRANTIES AND COVENANTS................................... 10
12.1. Compliance with Specifications and Applicable Laws...................... 10
12.2. Non-Infringement........................................................ 10
12.3. Technology.............................................................. 10
12.4. Year 2000............................................................... 10
13. TERMINATION................................................................. 11
13.1. Termination of Master Agreement for Cause............................... 12
13.2. No Implication Against Materiality...................................... 13
13.3. Termination for Change of Control....................................... 13
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CONFIDENTIAL TREATMENT REQUESTED
13.4. Termination/Expiration Assistance; Transition Period..................... 14
14. LIABILITY AND FORCE MAJEURE................................................... 14
14.1. Liability Restrictions................................................... 14
14.2. Force Majeure............................................................ 14
15. INDEMNIFICATION............................................................... 15
16. GENERAL....................................................................... 15
16.1. Binding Nature and Assignment............................................ 15
16.2. Continued Performance and Governing Law.................................. 16
16.3. Entire Agreement......................................................... 16
16.4. Notices.................................................................. 16
16.5. Counterparts............................................................. 17
16.6. Relationship of Parties.................................................. 17
16.7. Severability............................................................. 17
16.8. Waiver of Default........................................................ 18
16.9. Cumulative Remedies...................................................... 18
16.10. Survival................................................................. 18
16.11. Publicity................................................................ 18
16.12. Certain Regulatory Events................................................ 18
16.13. Amendment................................................................ 19
16.14. Incorporation by Reference............................................... 19
16.15. Construction............................................................. 20
SCHEDULE A Definitions........................................................... A-1
SCHEDULE B Dial-Up Access Services, Service Levels, Pricing and Other Terms...... B-1
SCHEDULE C Broadband Backhaul Services, Service Levels, Pricing and Other Terms.. C-1
SCHEDULE D Other Services........................................................ D-1
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CONFIDENTIAL TREATMENT REQUESTED
NETWORK SERVICES AGREEMENT
This Network Services Agreement (together with the attached Schedules and
Exhibits, the "Agreement"), effective as of December 31, 1999 (the "Effective
Date"), is entered into by and between America Online, Inc., a Delaware
corporation with offices located at ▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("Customer"), and BBN Corporation, a Massachusetts corporation, with offices
located at ▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Vendor"). As used in
this Agreement, "Party" means either Customer or Vendor, as appropriate, and
"Parties" means Customer and Vendor. The Parties agree that the following terms
and conditions shall apply to the products and services to be provided by Vendor
under this Agreement in consideration of certain payments to be made by
Customer. Defined terms used but not defined in the body of this Master
Agreement or the Schedules (other than Schedule A) shall have the meanings given
such terms in Schedule A.
1. BACKGROUND, OBJECTIVES AND WAIVER
1.1. Background and Objectives.
-------------------------
This Agreement is being made and entered into with reference to the
following:
(a) Customer is an interactive service provider that desires to
purchase (i) fully managed, end-to-end dial-up access services,
and (ii) certain broadband backhaul services.
(b) Customer and Vendor previously contracted for Vendor to provide
certain dial-up access services in that certain BBN-AOL Dial-Up
Network Services Agreement dated September 23, 1996, as amended
by (i) that certain BBN-AOL Dial-Up Network Services Agreement
Amendment 1, dated ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) that certain BBN-AOL
Dial-Up Network Services Agreement Amendment 2, dated September
29, 1997, (iii) that certain BBN-AOL Dial-Up Network Services
Agreement Amendment 3, dated January 29, 1998, (iv) that certain
BBN-AOL Dial-Up Network Services Agreement Amendment 4, dated
February 11, 1998, (v) that certain BBN-AOL Dial-Up Network
Services Agreement Amendment 5, dated June 30, 1998 and (vi) that
certain BBN-AOL Dial-Up Network Services Agreement Amendment 6,
dated July 28, 1999 (such agreement as amended, the "Original
Agreement").
1.2. Termination of Original Agreement; Waiver.
-----------------------------------------
(a) The Original Agreement is hereby terminated as of the Effective
Date. Except to the extent otherwise provided in this Agreement,
the obligations of the Parties arising under the Original
Agreement before the Effective Date of this Agreement shall be
governed by the Original Agreement. The obligations of the
Parties arising after the Effective Date (including with respect
to Vendor's provision of Services during the Term) shall be
governed by this Agreement.
(b) As partial consideration for entering into this Agreement, for
the respective waivers and releases set forth below (collectively
the "Waiver"), and for Vendor's obligations set forth in Section
8.3 of this Master Agreement, each Party hereby irrevocably
waives and releases all claims, torts, liabilities, debts, suits,
demands, causes of action, actions and rights, whether known,
unknown,
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CONFIDENTIAL TREATMENT REQUESTED
contingent or fixed, against the other Party and its respective
predecessors, current and former Affiliates, successors, assigns,
attorneys, directors, officers, agents and employees arising from
or pertaining to the Original Agreement; provided, however, that:
(i) nothing contained in the Waiver shall release the Parties
from their respective obligations under this Agreement
(including with respect to the installed Dedicated Dial-Up
Access Ports previously provided under the Original
Agreement that Vendor is obligated to continue to provide
pursuant to Schedule B of this Agreement); and
(ii) nothing contained in the Waiver shall apply to disputes or
any other matters between the Parties under this Agreement,
or based upon or associated with the claims of unaffiliated
third parties arising under the Original Agreement or this
Agreement.
2. TERM
The term of the Master Agreement shall begin on the Effective Date and
shall expire on December 31, 2006, unless terminated earlier in accordance
with the Agreement or extended pursuant to the relevant section in the
appropriate Schedule or otherwise by mutual written agreement (such period,
as terminated earlier or so extended, the "Term"). Each Schedule to the
Agreement shall be effective for the period of time during the Term set
forth in such Schedule.
3. PROVISION OF SERVICES
3.1. General.
-------
(a) This Agreement sets forth the terms and conditions under which
Customer may purchase Services from Vendor. Customer may utilize
the Services purchased hereunder for any lawful purpose including
in connection with any service or product offering made available
by Customer or its Special Affiliates during the Term, providing
access to an AOL Information Service, providing the delivery of
Internet access or providing other subscriber-related services to
end-users. The Parties acknowledge that this Agreement does not:
(a) grant to Vendor an exclusive privilege to sell or otherwise
provide to Customer any products or services, or (b) except as
otherwise provided by Section 3.2 of the Master Agreement, or as
otherwise required by this Master Agreement or any of the
Schedules, restrict Vendor from providing products or services to
other customers of Vendor. Customer may contract with other
suppliers for the procurement of any products or services.
(b) Customer shall (i) remain the single point-of-contact with Vendor
with respect to those Services provided to Special Affiliates
pursuant to this Agreement, including with respect to any claims,
disputes or other actions that Special Affiliates desire to make
against Vendor, (ii) remain obligated to perform its payment
obligations under the Agreement with respect to those Services
provided by Vendor to Special Affiliates pursuant to this
Agreement, and (iii) Customer agrees to indemnify and hold Vendor
harmless for claims brought against Vendor by Special Affiliates
associated with the Services provided by
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CONFIDENTIAL TREATMENT REQUESTED
Vendor to Special Affiliates pursuant to this Agreement;
provided, however, that nothing herein applies to claims brought
directly by Customer for damages arising out of Services utilized
by Special Affiliates. For purposes of the Agreement, Services
provided to Special Affiliates pursuant to this Agreement shall
be deemed to be Services provided to Customer.
3.2. Resale of Dedicated Resources.
-----------------------------
Except as specifically set forth in Schedule B with respect to the
Dedicated Dial-Up Services, Vendor shall not resell or offer to resell any
dedicated Services ordered and accepted by Customer regardless of whether
or not such Services are utilized by Customer.
3.3. Sale of Vendor Network.
----------------------
(a) Notwithstanding anything to the contrary in this Agreement, Customer
shall have the right of first refusal with respect to any sale or transfer
other than to a Vendor Affiliate of any unit or division that has, as its
primary business, the provision of Dedicated Dial-Up Access Services to
Customer and has Dedicated Dial-Up Access Ports to Customer; provided,
however, in no event shall Customer have such right of first refusal in
connection with (i) the sale or transfer of a business unit that does not
relate to the provision of Services to Customer or (ii) the sale or
transfer of any Vendor assets to any entity created as a result of, or
arising out of, the closing of the proposed merger of GTE Corporation and
▇▇▇▇ Atlantic Corporation so long as the management of Vendor continues to
have primary management responsibility of the new entity; provided further,
however, that any transaction in which any assets of Vendor are transferred
back to any Affiliate of the combined GTE/▇▇▇▇ Atlantic corporation shall
not be covered by this Section.
4. ORDERING
4.1. General.
-------
The ordering of Services by Customer and the delivery of such Services
by Vendor shall be governed by the terms and conditions set forth in
the applicable Schedule of this Agreement corresponding to such
Services.
4.2. Order Tracking.
--------------
Vendor will provide Customer with weekly information on Orders as
reasonably requested by Customer in a format consistent with that
provided under the Original Agreement immediately prior to the
Effective Date of this Agreement. Vendor will provide Customer with
written reports relating to Orders as mutually agreed upon by the
Parties.
5. ACCEPTANCE TESTING AND FINAL ACCEPTANCE
Acceptance testing provisions associated with the Services are set forth in
the applicable Schedule for such Services.
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6. PROPRIETARY RIGHTS
6.1. Ownership of Proprietary Information.
------------------------------------
(a) All right, title and interest in Customer developed software and
other Customer proprietary information (including any Customer
software or Customer proprietary information which may be
incorporated into written material or software delivered under
this Agreement), including all intellectual property rights
related thereto, will remain in Customer. Customer shall also
have all ownership rights, including copyright, to all written
reports prepared and delivered to Customer by Vendor under this
Agreement.
(b) All right, title and interest in Vendor developed software and
other Vendor proprietary information, including all intellectual
property rights related thereto, will remain in Vendor; provided,
however, any software developed by Vendor incidental to the
performance of Services for Customer, the cost of which is
separately charged to, and reimbursed by, Customer shall be
jointly owned by Vendor and Customer, with no duty of accounting.
(c) All right, title and interest in software jointly developed by
the Parties shall be jointly owned by Vendor and Customer, with
no duty of accounting.
(d) With respect to Subsections (b) and (c) above, each Party hereby
agrees to take all actions, and execute and deliver such
documentation as is necessary to evidence the other Party's
ownership interest in and to the developed Software.
(e) Each Party hereby grants to the other Party a limited proprietary
information in connection with Vendor's performance of, and
Customer's receipt of, the Services.
6.2. Ownership of Vendor Network.
---------------------------
Except to the extent that Customer owns or has rights in certain
equipment used to provide Dedicated Dial-Up Access Ports as of the
Effective Date, or purchases Vendor Network assets pursuant to Section
3.3 of the Master Agreement, Vendor retains title and ownership to the
Vendor Network.
6.3. Telephone Numbers.
-----------------
As between Vendor and Customer, Customer shall have title and
ownership to all telephone numbers used to provide Dial-Up Access
Services.
7. SERVICE LEVELS
All Services provided by Vendor shall comply with the applicable Service
Levels.
8. CHARGES AND TAXES
8.1. General.
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CONFIDENTIAL TREATMENT REQUESTED
Charges for a Service hereunder shall not begin to accrue until after
Final Acceptance of the Service. Charges for any Service shall be as
computed pursuant to the Schedule of this Agreement corresponding to
such Service. All charges specified in the Schedules fully compensate
Vendor for Services. Customer will not be liable to Vendor for any
charges not expressly set forth in the Schedules or the Master
Agreement unless such charges are mutually agreed upon by the Parties
in writing. Customer shall only be obligated to pay for Services
provided in accordance with the terms of this Agreement.
8.2. Taxes.
-----
The Parties' respective responsibilities for taxes arising under or in
connection with this Agreement shall be as follows:
(a) Vendor shall be responsible for any sales, use, excise, value-
added, services, consumption, and other taxes and duties payable
by Vendor on any goods or services that are used or consumed by
Vendor in providing the Services where the tax is imposed on
Vendor's acquisition or use of such goods or services and the
amount of tax is measured by Vendor's costs in acquiring such
goods or services.
(b) Customer shall be responsible for any sales, use, excise, value-
added, services, consumption, or other tax that is assessed on
any particular Service received by Customer from Vendor. Customer
shall also be responsible for any sales, use, excise, value-added
or consumption taxes imposed on goods purchased by Customer from
Vendor under the Agreement. If and to the extent any tax
described in this Subsection (b) is reduced or eliminated during
the Term, Vendor shall reduce or eliminate any charges for such
taxes, as appropriate. If and to the extent any tax described in
this Subsection (b) is increased during the Term, or a new tax is
imposed upon any particular Service received by Customer from
Vendor, then Customer shall have full responsibility for such
increase or tax.
(c) The Parties agree to cooperate with each other to enable each to
more accurately determine its own tax liability. Neither Party
will act unreasonably in assisting the other Party in minimizing,
to the extent legally permissible, such other Party's tax
liability to the extent legally permissible. Each Party shall
provide and make available to the other any resale certificates,
information regarding out-of-state or out-of-country sales or use
of equipment, materials or services, and other exemption
certificates or information reasonably requested by either Party.
(d) Each Party shall promptly notify the other Party of, and
coordinate with the other Party the response to and settlement
of, any claim for taxes asserted by applicable taxing authorities
for which a Party is responsible hereunder, it being understood
that with respect to any claim arising out of a form or return
signed by a Party to this Agreement, such Party shall have the
right to elect to control the response to and settlement of the
claim, but the other Party shall have all rights to participate
in the responses and settlements that are appropriate to its
potential responsibilities or liabilities. If Customer requests
Vendor to challenge the imposition of any tax, Customer shall
reimburse Vendor for the reasonable legal fees and expenses it
incurs. Customer shall be entitled to any tax refunds
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CONFIDENTIAL TREATMENT REQUESTED
or rebates granted to the extent such refunds or rebates are of
taxes that were paid by Customer, including taxes charged to
Customer as Out-of-Pocket Expenses. Customer shall be responsible
for interest and penalties incurred to the extent such interest
and penalties are related to taxes paid or payable by Customer.
8.3. Certain Obligations Corresponding to the Waiver.
-----------------------------------------------
Promptly after execution of this Agreement, Customer shall pay to
Vendor [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment] dollars ($[*Material Omitted and
Separately Filed Under an Application for Confidential Treatment])
which amount represents an off-set of (i) the [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment]
dollars ($[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment]) withheld by Customer under the Original
Agreement and (ii) the [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] dollars ($[*Material
Omitted and Separately Filed Under an Application for Confidential
Treatment]) that Vendor has agreed to pass-through to Customer from
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment] or its Affiliates for [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment]
specifically affecting the Customer network in [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment].
9. INVOICING AND PAYMENT
9.1. Invoicing.
---------
(a) Vendor will invoice Customer for amounts due under this Agreement
(including with respect to provision of Services to Special
Affiliates) on a monthly basis in arrears. Each invoice shall
contain the same information as provided under the Original
Agreement immediately prior to the Effective Date of this
Agreement, additional, similar information with respect to the
Broadband Backhaul Services and Other Services, and any
additional information as the Parties may otherwise agree. Each
invoice will separately state those charges for the Dial-Up
Access Services that are attributable to the provision of
backhaul functions. Out-of-Pocket Expenses, if any, and Monthly
Pass-Through Expenses will be billed monthly based upon actual
and accrued costs, and such expenses shall be trued up on a
quarterly basis. Upon any request by Customer, Vendor will
provide Customer with access to books and records (including
bills and invoices) from third party providers for all Out-of-
Pocket Expenses and Monthly Pass-Through Expenses. Any refunds or
credits arising from an Out-of-Pocket Expense reimbursed by
Customer or a Monthly Pass-Through Expense shall be remitted to
Customer, and Vendor shall report and transmit to Customer any
misdirected refunds or credits.
(b) To the extent a credit may be due Customer pursuant to this
Agreement, Vendor shall provide Customer with an appropriate
credit against amounts then due and owing; if no further payments
are due to Vendor, Vendor shall pay such amounts to Customer
within thirty (30) calendar days. In the event such payment is
not made to Customer when due, Vendor will pay a late fee equal
to the lesser of (a)
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CONFIDENTIAL TREATMENT REQUESTED
one (1) percent of the amount of such charges per month; or (b)
the maximum amount permissible by law.
(c) The detailed accounting of actual and accrued costs described in
Section 3.D of the Original Agreement will be limited to costs
incurred in the first quarter of Customer's fiscal year 2000 and
the final true-up with respect to accrued costs(as described in
the Original Agreement) will be completed and provided to
Customer by March 31, 2000; and with respect to actual costs,
Vendor will use all commercially reasonable efforts to work with
its providers to reconcile actual costs as soon as reasonably
practicable. Subject to Section 8.3 of this Master Agreement and
to the last sentence of Section 8.1(a)(i) of Schedule B, Vendor
will invoice Customer for all amounts due under the Original
Agreement as of the Effective Date, and Customer will pay to
Vendor such amounts due, in accordance with Section 9.2 of this
Master Agreement.
9.2. Payment Due.
-----------
Subject to the other provisions of this Article 9, all undisputed
charges shall be due and payable by Customer within thirty (30)
calendar days after receipt of a proper invoice for such amount. In
the event that any such charges are not received by Vendor within five
(5) business days after receipt by Customer of written notice from
Vendor indicating that such charges have not been paid within such
thirty-day period, then commencing as of the original due date,
Customer will pay a late fee equal to the lesser of (a) one (1)
percent of the amount of such charges per month; or (b) the maximum
amount permissible by law. All undisputed amounts due and payable to
Vendor under this Article 9 shall be paid, at Customer's option,
either (i) by check payable to the order of Vendor or (ii) by
electronic funds transfer to Vendor from account(s) designated by
Customer.
9.3. Accountability.
--------------
Both Parties shall maintain complete and accurate records of and
supporting documentation for the amounts billable or owed and credits
applicable to either Party under the terms of this Agreement, in
accordance with generally accepted accounting principles applied on a
consistent basis. Both Parties agree to provide the other Party with
documentation and other information with respect to any amount claimed
or owed as may be reasonably requested by either Party to verify
accuracy and compliance with the provisions of this Agreement.
9.4. Disputed Charges.
----------------
Customer shall pay undisputed charges when such payments are due under
this Article 9. Customer may withhold payment of particular charges
that Customer disputes in good faith. To the extent that Vendor is
entitled to such payment withheld pursuant to resolution of the
underlying dispute, Customer shall pay to Vendor such payments plus
any interest accrued from the date such payments are withheld by
Customer at a rate equal to one percent (1%) per month on the disputed
amounts. Upon resolution of the dispute against Vendor, Vendor will
pay Customer interest equal to one percent (1%) per month on the
amounts overpaid or under-withheld by Customer.
10. AUDIT
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10.1. Audit Rights.
------------
Each Party, after reasonable notice, shall have the right to conduct
reasonable audits of the other Party, through a third party
independent auditor as selected by the Party conducting the audit or
through any other mutually agreeable means, and subject to
reasonable confidential requirements, to enforce a Party's rights
and/or enforce the other Party's obligations under this Agreement.
10.2. Records Retention.
-----------------
Until three (3) years after document creation, each Party will
maintain, and provide to the other Party and its auditors access
upon request to, records, documents and other information subject to
audit under the Agreement.
11. CONFIDENTIALITY
11.1. Confidential Information.
------------------------
Vendor and Customer each acknowledge that they may be furnished
with, receive, or otherwise have access to Confidential Information
(as defined below) of or concerning the other Party. As used in this
Agreement and subject to Section 11.3 of the Master Agreement,
"Confidential Information" means any information, in any form,
furnished or made available directly or indirectly by one Party (the
"Disclosing Party") to the other (the "Receiving Party") relating to
or disclosed in the course of the negotiation or performance of this
Agreement, that is, or should be reasonably understood to be,
confidential or proprietary to the Disclosing Party, and shall
include the material terms of this Agreement (including all
information relating to prices and purchase commitments), invoices
and any supporting information provided by Vendor or Customer with
respect to such invoices, information audited pursuant to Article
10, all Customer Data, Customer's customer and member information,
automatic number identification ("ANI") data and information, the
relations of the Disclosing Party with its customers, employees and
service providers, technical processes and formulas, source codes,
product designs, sales, cost and other unpublished financial
information, product and business plans, projections and marketing
data.
11.2. Obligations.
-----------
(a) Any proprietary rights in Confidential Information disclosed by
a Party shall remain with such Party. Customer and Vendor shall
only disclose Confidential Information of the other Party
internally on a "need-to-know" basis. Customer and Vendor shall
each use at least the same degree of care, but in any event no
less than a reasonable degree of care, to prevent disclosing to
third parties the Confidential Information of the other as it
employs to avoid unauthorized disclosure, publication or
dissemination of its own information of a similar nature;
provided that a Party may disclose such information to an
entity performing or receiving Services hereunder or to an
independent third-party auditor on a "need-to-know" basis where
(i) the provision or receipt of Services or audit by such
entity is authorized under this Agreement, (ii) such disclosure
is necessary or otherwise naturally occurs in that entity's
scope of responsibility, and (iii) the entity agrees in writing
to assume confidentiality restrictions no less
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CONFIDENTIAL TREATMENT REQUESTED
stringent than those described in this Section 11.2. Any
disclosure to such entity shall be under the terms and
conditions as provided herein.
(b) Each Party shall take reasonable steps to ensure that its
employees, agents and to the extent applicable, third party
auditors comply with this Article 11. In the event of any
unauthorized disclosure or loss of, or inability to account
for, any Confidential Information of the Disclosing Party, the
Receiving Party shall promptly, at its own expense: (i) notify
the Disclosing Party in writing; (ii) take such actions as may
be necessary or reasonably requested by the Disclosing Party to
minimize the violation; and (iii) cooperate in all reasonable
respects with the Disclosing Party to minimize the violation
and any damage resulting therefrom. With respect to any
Confidential Information disclosed to the Receiving Party, the
nondisclosure obligation shall last for five (5) years from the
date of disclosure of such Confidential Information.
11.3. Exclusions.
----------
(a) "Confidential Information" shall exclude any particular
information that (i) was, at the time of disclosure to it,
lawfully in the public domain; (ii) after disclosure to it, is
lawfully published or otherwise lawfully becomes part of the
public domain through no fault of the Receiving Party; (iii)
except for the material terms of the Agreement, was lawfully in
the possession of the Receiving Party at the time of disclosure
to it; (iv) was received after disclosure to it from a third
party who had a lawful right to disclose such information to it
without any obligation to restrict its further use or
disclosure; and (v) was independently developed by the
Receiving Party without reference to Confidential Information
of the Disclosing Party. In addition, a Party shall not be
considered to have breached its obligations by disclosing
Confidential Information of the other Party to the minimum
extent required to satisfy any legal requirement of a competent
government body provided that, immediately upon receiving any
such request and to the extent that it may legally do so, such
Party advises the Disclosing Party promptly and prior to making
such disclosure in order that the Disclosing Party may
interpose an objection to such disclosure, take action to
assure confidential handling of the Confidential Information,
or take such other action as it deems appropriate to protect
the Confidential Information.
(b) Nothing in this Article 11 shall be construed or interpreted as
a representation or agreement to restrict assignment or
reassignment of a Party's employees. Subject to each Party's
obligations under the Agreement, neither Party shall be
precluded from participating in business activities that may be
competitive with the other Party.
11.4. Residual Knowledge.
------------------
Nothing contained in this Agreement shall restrict either Party from
the use of any ideas, concepts, know-how, methodologies, processes,
technologies, algorithms or techniques relating to the Services that
either Party, individually or jointly, develops or discloses under
this Agreement, provided that in doing so such Party does not breach
its obligations under this Article or infringe the intellectual
property rights of the other Party or third parties who have
licensed or provided materials to such Party.
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CONFIDENTIAL TREATMENT REQUESTED
11.5. Customer Data.
-------------
(a) Without limiting Vendor's obligations under Section 11.2 of the
Master Agreement with respect to Customer Data, Vendor shall
only use Customer Data to the extent necessary to fulfill its
obligations under this Agreement.
(b) Vendor shall institute "standard industry practices" physical
and logical security measures with respect to facilities and
systems used to provide the Services, including with respect to
any shared processing or network environments and with respect
to the access and controls it affords to its employees,
Affiliates and subcontractors (including the employees of each)
to guard against, identify and promptly terminate the
unauthorized access, alteration or destruction of Customer
Data.
12. REPRESENTATIONS, WARRANTIES AND COVENANTS
12.1. Compliance with Specifications and Applicable Laws.
--------------------------------------------------
Vendor covenants that it shall perform the Services in accordance
with the terms of this Agreement. Vendor represents that the
Services offered to Customer are, and warrants that after the
Effective Date Services purchased by Customer shall be, in
conformance with applicable federal, state and local laws and
regulations, including FCC requirements and specifications.
12.2. Non-Infringement.
----------------
Vendor warrants that the Services shall not knowingly infringe, and
that Vendor shall perform its responsibilities under this Agreement
in a manner that does not infringe, or constitute an infringement or
misappropriation of, any patent, copyright, trademark, trade secret
or other proprietary rights of Customer or any third party.
12.3. Technology.
----------
Vendor covenants that in the event that Vendor provides any hardware
and software upgrades as part of the Services, such upgrades shall
be without additional charge to Customer. Vendor will implement
software and hardware upgrades to the extent such upgrades are
necessary to maintain the quality of Services as specified in this
Agreement, stay consistent with industry standards and otherwise
meet its obligation to provide Services hereunder.
12.4. Year 2000.
----------
Vendor represents that the Services offered to Customer are, and
warrants that Services provided to Customer shall be, Year 2000
Compliant. "Year 2000 Compliant" means that the Services satisfy the
requirements set forth below:
(a) Limited Warranty. Vendor warrants that the Services will be
----------------
Year 2000 Compliant, pursuant to the terms of this Section 12.4
(hereinafter referred to in this Section as the "Year 2000
Compliance Limited Warranty"). Vendor warrants that in
connection with Calendar-Related data and Calendar-Related
processing of Date Data or of any System Date, the Services, as
a whole or by its
Page 10
CONFIDENTIAL TREATMENT REQUESTED
components, as to the Year 2000 will not malfunction, will not
cease to function, will not generate incorrect data, will not
produce incorrect results, and will represent dates without
ambiguity when providing Calendar-Related data to and accepting
Calendar-Related data from other automated, computerized,
and/or software systems and users via use interfaces,
electronic interfaces, and data storage.
In the event of any Year 2000 Noncompliance with respect to the
Services when and as specified herein, Vendor shall, as
Customer's sole and exclusive remedy, repair or replace the
affected Services within a reasonable period of time as
determined by the severity of the failure and the level of
effort necessary to correct such failure.
Vendor shall meet the obligations set forth in this Year 2000
Compliance Limited Warranty provided that all Customer or third
party supplied computer software, computer firmware, and
computer hardware that directly interface with the Services,
co-exist with the Services, or directly influence the Services'
operation, are also demonstrated to comply with this Year 2000
Compliance Limited Warranty.
(b) Disclaimer. Except as provided by this Year 2000 Compliance
----------
Limited Warranty, Vendor shall not be liable for any failure
of the AOLnet to be Year 2000 Compliant.
(c) Definitions. For the purposes of this Year 2000 Compliance
-----------
Limited Warranty, the following defined terms shall have the
following meanings:
(i) "AOLnet" means that portion of the Customer network in
the United States, which is managed by Vendor. "AOLnet"
does not include equipment, telephone circuits,
networks, network equipment, or telephone circuits not
owned or controlled by Vendor.
(ii) "Calendar-Related" refers to date values based on the
Gregorian calendar, which includes Leap Years, and to
all uses in any manner of those date values, including
without limitation, manipulations calculations,
conversions, comparisons, and presentation.
(iii) "Date Data" means any Calendar-Related data the
inclusive range January 1, 1900 through December 31,
2035, which the Services uses in any manner.
(iv) "System Date" means any Calendar-Related data value in
the inclusive range January 1, 1985 through December 31,
2035 (including the natural transition between such
values), which the Services shall be able to use as its
current date while operating.
(v) "Year 2000" Noncompliance" means any failure of the
Services to be Year 2000 Compliant.
13. TERMINATION
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CONFIDENTIAL TREATMENT REQUESTED
13.1. Termination of Master Agreement for Cause.
-----------------------------------------
(a) Customer's Right to Terminate. In addition to any other rights
-----------------------------
or remedies to which Customer may be entitled under this
Agreement, in the event that:
(i) Vendor commits a material breach of this Agreement,
which breach is not cured within thirty (30) calendar
days after notice of breach from Customer to Vendor;
(ii) Vendor commits repeated material breaches of this
Agreement, even if cured;
(iii) Vendor violates either Section 3.2 (Resale of Dedicated
Resources) or Vendor's core obligations with respect to
the most-favored customer provisions set forth in the
Schedules (e.g., Section 8.3(b) of Schedule B); or
(iv) there is a total or near-total outage of any of the
Services that, while it may last fewer than thirty (30)
calendar days, is widespread and prolonged enough to
justify a reasonable person, considering all relevant
industry standards, to terminate the Agreement,
then Customer may, at its option and in its sole discretion,
exercise the Agreement Termination Right for cause; provided,
however, if Customer's termination for cause right is solely
related to the Other Services, Customer may only exercise the
Agreement Termination Right with respect to the Other Services.
In the event of a termination of Customer's obligations with
respect to the Purchase Commitments as a result of termination
of the Agreement or any Schedule, Customer shall have no
further liability to Vendor with respect to such Purchase
Commitments. To the extent new services are added to this
Agreement, defaults will be as specified therein.
(b) Vendor's Right to Terminate. In addition to any other rights
---------------------------
or remedies to which Vendor may be entitled under this
Agreement, in the event that
(i) Customer commits a material breach of this Agreement,
including non-payment of undisputed amounts due and
owing to Vendor in accordance with the terms of this
Agreement, which breach is not cured within thirty (30)
calendar days after notice of breach from Vendor to
Customer; or
(ii) Customer fails to meet its obligations with respect to
the Purchase Commitments in accordance with and subject
to the terms of this Agreement, which failure is not
cured within thirty (30) calendar days after notice of
failure from Vendor to Customer; provided, however,
Customer shall be deemed not to have failed to meet its
Purchase Commitments if it pays Vendor such amounts that
Customer would have otherwise had to pay if Customer
actually met such Purchase Commitments,
then Vendor, at its option and in its sole discretion, may
terminate this Agreement; provided, however, if Vendor's
termination for cause right is solely
Page 12
CONFIDENTIAL TREATMENT REQUESTED
related to the Other Services, Vendor may only exercise the
Agreement Termination Right with respect to the Other
Services. To the extent new services are added to this
Agreement, defaults will be as specified therein.
13.2. No Implication Against Materiality.
----------------------------------
The inclusion of any provision, obligation or duty in Section 13.1,
or any statement in this Agreement, that a particular provision,
obligation or duty is "material" shall not be construed to imply that
any other provision, obligation or duty in this Agreement is not
material.
13.3. Termination for Change of Control.
---------------------------------
In the event of (a) a change in control of Vendor where such control
is acquired, directly or indirectly, in a single transaction or
series of related transactions, (b) all or substantially all of the
assets of Vendor are acquired by or transferred to any entity, or (c)
Vendor is merged with or into another entity to form a new entity,
then at any time after any such event, Customer may, at its option
and in its sole discretion, exercise the Agreement Termination Right;
provided, however, nothing in this Section shall apply in a change in
control resulting from or arising out of the closing of the proposed
merger of GTE Corporation and ▇▇▇▇ Atlantic Corporation (including
any transaction in which any assets of Vendor are transferred back to
any Affiliate of the combined GTE/▇▇▇▇ Atlantic corporation), unless
the acquirer or merged entity is (i) a Significant Competitor of
Customer (as such list of Significant Competitors may be modified
from time-to-time by Customer on notice following August 31, 2000 to
add additional significant competitors of Customer) or (ii) one of
the following entities: MCI Worldcom, Sprint, Qwest or ▇▇▇▇▇ ▇, or an
Affiliate of such entities.
13.4. Termination/Expiration Assistance; Transition Period.
----------------------------------------------------
Upon expiration of this Agreement or any Schedule, or upon any
termination or cancellation of this Agreement or any Schedule by
either Party (whether or not for cause), Customer may decommission
all Services corresponding to the Agreement or any such Schedule, as
applicable, and Vendor shall (i) provide Customer, or at Customer's
request Customer's designee, reasonable assistance and consultation
to enable Customer (or Customer's designee) to ensure a smooth and
timely transition of network control and management to Customer (as
applicable), and to transition Customer's purchase of services
similar to the Services then expiring or being terminated to another
vendor, and (ii) continue to provide the Services then expiring or
being terminated to Customer (at prices then in effect as of the date
of such expiration, termination or cancellation) and otherwise
perform all of its obligations under this Agreement (such obligations
described in this Section 13.4 collectively "Transition Assistance")
for a period (the "Transition Period") to be determined by Customer
in its sole and absolute discretion; provided, however, that unless
otherwise specified in a Schedule to the Agreement, the Transition
Period shall not be longer than twelve (12) months after the
effective date of such expiration, termination or cancellation. If
the provision of such Transition Assistance follows a notice of
termination by Vendor pursuant to Section 13.1(b) of this Master
Agreement as a result of Customer's non-payment of undisputed amounts
owed to Vendor, then Customer shall pay Vendor monthly in advance
plus an equitable portion of the unpaid charges giving rise to
termination that compensates Vendor for the provision of such
Transition Assistance.
Page 13
CONFIDENTIAL TREATMENT REQUESTED
As part of its obligation to provide Transition Assistance, Vendor
shall include transferring all rights to Customer at no additional
charge, for Customer and its designees' exclusive use, any telephone
numbers used in providing the Services so that Customer or its
designee may utilize such numbers in providing services (subject to
the provisions of Schedule B regarding Vendor's obligations to obtain
such telephone numbers for Customer).
14. LIABILITY AND FORCE MAJEURE
14.1. Liability Restrictions.
----------------------
The liability restrictions and limitation provisions for each Service
provided hereunder are set forth in the associated Schedule for such
Service.
14.2. Force Majeure.
-------------
(a) No Party shall be liable for any default or delay in the
performance of its obligations under this Agreement if and to the
extent such default or delay is caused, directly or indirectly,
by fire, flood, lightning, earthquake, elements of nature or acts
of God, strikes, lock-outs or other labor disturbance, riots,
civil disorders, rebellions or revolutions in any country, or any
other cause beyond the reasonable control of such Party;
provided, however, that the non-performing Party is without fault
in causing such default or delay, and such default or delay could
not have been prevented by reasonable precautions and cannot
reasonably be circumvented by the non-performing Party through
the use of alternate sources, workaround plans or other means
(each a "Force Majeure Event"). The failure of a supplier or
subcontractor of Vendor to perform under its agreement with
Vendor shall not constitute a Force Majeure Event for Vendor
except to the extent such supplier's or subcontractor's failure
to perform is caused by a Force Majeure Event.
(b) In such event the non-performing Party shall be excused from
further performance or observance of the obligation(s) so
affected for as long as such circumstances prevail and such Party
continues to use its commercially reasonable best efforts to
recommence performance or observance whenever and to whatever
extent possible without delay. In the event the Vendor is the
non-performing Party, Customer shall be excused from paying for
any Services affected by the Force Majeure Event. Any Party so
delayed in its performance shall immediately notify the Party to
whom performance is due by telephone (to be confirmed in writing
within two (2) business days of the inception of such delay) and
describe at a reasonable level of detail the circumstances
causing such delay.
15. INDEMNIFICATION
Each Party agrees to indemnify, defend and hold harmless the other
Party and its Affiliates and their respective officers, directors,
employees, agents, successors, and assigns, from any and all losses,
liabilities, damages and claims, and all related costs and expenses
(including reasonable legal fees and disbursements and costs of
investigation,
Page 14
CONFIDENTIAL TREATMENT REQUESTED
litigation, settlement, judgment, interest and penalties) arising
from, in connection with, or based on allegations of, any of the
following:
(a) third party claims arising from the indemnifying Party's material
breach of any obligation, representation or warranty under this
Agreement;
(b) any claims of infringement of any patent, trademark, trade
secret, copyright or other proprietary rights, alleged to have
occurred based upon the provision by the indemnifying Party of
materials, services or other resources to the indemnified Party;
(c) the death or bodily injury of any agent, employee, customer,
business invitee, or business visitor of the indemnified Party or
any other person caused by the tortious conduct of the
indemnifying Party; or
(d) the damage, loss or destruction of any real or tangible personal
property caused by the tortious conduct of the indemnifying
Party.
16. GENERAL
16.1. Binding Nature and Assignment.
-----------------------------
This Agreement shall accrue to the benefit of and be binding upon the
Parties hereto and any purchaser or any successor entity into which
either Party has been merged or consolidated or to which either Party
has sold or transferred all or substantially all of its assets.
Neither Party may, or shall have the power to, assign this Agreement
or delegate such Party's obligations hereunder without the prior
written consent of the other, which consent shall not be unreasonably
withheld or delayed, except that Customer may assign its rights and
obligations under this Agreement without the approval of Vendor to an
entity which acquires all or substantially all of the assets of
Customer, to any Affiliate of Customer, or to a successor in a merger
or acquisition of Customer. Notwithstanding anything to the contrary
in this Section, but not affecting any of Customer's rights under
Section 13.3, Customer hereby consents to the assignment of this
Agreement to any entity created as a result of or arising out of the
closing of the proposed merger of GTE Corporation and ▇▇▇▇ Atlantic
Corporation, including any transaction in which any assets of Vendor
are transferred back to any Affiliate of the combined GTE/▇▇▇▇
Atlantic corporation.
16.2. Continued Performance and Governing Law.
---------------------------------------
(a) Each Party agrees to continue performing its obligations under
this Agreement while any dispute is being resolved except to the
extent the issue in dispute precludes performance (dispute over
payment shall not be deemed to preclude performance).
(b) This Agreement and performance under it shall be governed by and
construed in accordance with the laws of the State of Delaware
without regard to its choice of law principles.
Page 15
CONFIDENTIAL TREATMENT REQUESTED
16.3. Entire Agreement.
----------------
This Agreement, including any attached Schedules, sets forth the
entire agreement of the Parties with respect to the transactions set
forth herein.
16.4. Notices.
-------
All notices, requests, demands, and determinations under this
Agreement (other than routine operational communications or as
otherwise specifically set forth herein (e.g., e-mail orders and
Customer acceptance/rejection of Dedicated Dial-Up Access Ports or
other Services)), shall be in writing and shall be deemed duly given
(i) when delivered by hand, (ii) one (1) business day after being
given to an express, overnight courier with a reliable system for
tracking delivery, (iii) when sent by confirmed facsimile with a copy
delivered by another means specified in this Section, or (iv) four (4)
business days after the day of mailing, when mailed by United States
mail, registered or certified mail, return receipt requested, postage
prepaid, and addressed as follows:
-----------------------------------------------------------------------------------------------
To Customer: To Vendor:
----------- ---------
America Online, Inc. BBN Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice Attn: Vice President and General
President AOLnet Operations Manager
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Copies to: Copy to:
--------- -------
America Online, Inc. GTE Internetworking
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel Attn: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
America Online, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President Of Business Affairs
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------
A Party may from time to time change its address or designee for
notification purposes by giving the other prior written notice of the
new address or designee and the date upon which it will become
effective.
16.5. Counterparts.
------------
This Agreement may be executed in several counterparts, all of which
taken together shall constitute one single agreement between the
Parties hereto.
Page 16
CONFIDENTIAL TREATMENT REQUESTED
16.6. Relationship of Parties.
-----------------------
The Parties to this Agreement are independent contractors. Neither
Party is an agent, representative, or partner of the other Party.
Neither Party shall have any right, power or authority to enter into
any agreement for or on behalf of, or incur any obligation or
liability of, or to otherwise bind, the other Party. This Agreement
shall not be interpreted or construed to create an association,
agency, joint venture or partnership between the Parties or to
impose any liability attributable to such a relationship upon either
Party.
16.7. Severability.
------------
In the event that any provision of this Agreement conflicts with the
law under which this Agreement is to be construed or if any such
provision is held invalid by a court with jurisdiction over the
Parties, such provision shall be deemed to be restated to reflect as
nearly as possible the original intentions of the Parties in
accordance with applicable law. The remainder of this Agreement
shall remain in full force and effect.
16.8. Waiver of Default.
-----------------
No amendment, waiver or discharge hereof shall be valid unless in
writing and signed by an authorized representative of the Party
against which such amendment, waiver, or discharge is sought to be
enforced. A delay or omission by either Party hereto to exercise any
right or power under this Agreement shall not be construed to be a
waiver thereof. A waiver by either of the Parties hereto of any of
the covenants to be performed by the other or any breach thereof
shall not be construed to be a waiver of any succeeding breach
thereof or of any other covenant herein contained.
16.9. Cumulative Remedies.
-------------------
Except as otherwise expressly provided herein, all remedies provided
for in this Agreement shall be cumulative and in addition to and not
in lieu of any other remedies available to either Party at law, in
equity or otherwise.
16.10. Survival.
--------
Articles 10, 11, 14, 15, and 16 of this Master Agreement and,
Section 1.2 of this Master Agreement, Schedule A, and Section 6.6 of
Schedule B will survive the completion, expiration, termination or
cancellation of the Agreement. In addition, any obligations which
expressly or by their nature are to continue after termination,
cancellation or expiration of the Agreement shall survive and remain
in effect.
16.11. Publicity.
---------
(a) Promotional Materials. Each Party shall submit to the other
---------------------
Party, for its prior written approval, which will not be
unreasonably withheld or delayed, any marketing,
advertising, or other promotional materials to the extent
such materials reference the other Party or the other
Party's trade names, trademarks, and service marks (such
materials the "Promotional Materials").
(b) Press Releases. The Parties will prepare a mutually
--------------
acceptable joint press release for release following the
Effective Date. Each Party will submit to the
Page 17
CONFIDENTIAL TREATMENT REQUESTED
other Party, for its prior written approval, which will not
be unreasonably withheld or delayed, any press release or
any other public statement (each, a "Press Release") related
to the transactions contemplated hereunder. Without limiting
the generality of the foregoing, the inclusion in any such
Press Release of any Confidential Information or any
information relating to prices or purchase commitment terms
of this Agreement shall be grounds for withholding approval
of such Press Release.
16.12. Certain Regulatory Events.
-------------------------
In the event that Vendor is obligated under applicable law to
provide any of the Services in accordance with tariffs filed with a
governmental authority, then Vendor shall file the terms and
conditions of this Agreement with such authority such that
applicable law will require no change in the obligations of each
Party under the Agreement. In the event that Vendor fails to file
the terms and conditions of this Agreement in accordance with this
Section, Customer may, at its option and in its sole discretion,
exercise the Agreement Termination Right for cause for those
Schedules corresponding to the affected Services.
16.13. Amendment.
----------
This Agreement shall not be modified, amended or in any way altered
except by an instrument in writing signed by both Parties.
16.14. Incorporation by Reference.
--------------------------
Schedules A, B, C and D (including any Exhibits attached to such
Schedules) are hereby incorporated by reference into this Master
Agreement.
Page 18
CONFIDENTIAL TREATMENT REQUESTED
16.15. Construction.
------------
The Parties agree that this Agreement was jointly drafted by the
Parties and each Party further agrees that they shall not assert a
claim that a particular provision should be construed against the
other Party as the drafter of the provision. In addition, the
headings and the table of contents in the Agreement are intended to
be for reference purposes only and shall in no way be construed to
modify or restrict, and shall not be considered in the construction
or interpretation of, any of the terms or provisions of the
Agreement.
IN WITNESS WHEREOF, Customer and Vendor have each caused this Agreement to be
signed and delivered by its duly authorized officer as of the Effective Date.
AMERICA ONLINE, INC. BBN CORPORATION
By: /s/ America Online, Inc. By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------- --------------------------
Printed: Printed:
_____________________ -----------------
Title:_______________________ Title: President
-------------------
Page 19
CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE A
Definitions
"Acceptance Criteria" means the criteria used to determine whether a Service is
ready for Final Acceptance. The Acceptance Criteria shall include the
requirements that the Service complies with all mutually agreed-upon testing
criteria as set forth in a Schedule to the Agreement and such other criteria as
may be developed and agreed upon by the Parties.
"Affiliate" of any entity means any other entity controlling, controlled by or
under common control with such entity.
"Agreement" has the meaning set forth in the preamble to the Master Agreement.
"Agreement Termination Right" means the right of a Party to terminate, without
cost or liability and as of the date specified in a written notice of
termination to Vendor, (a) the Schedule to which the breach giving rise to such
Agreement Termination Right relates, or (b) the entire Agreement. Any Schedule
not so terminated shall remain in full force and effect.
"Aggregate DSL Subscriber Lines" means the aggregate number of Subscriber Lines
providing xDSL broadband services that utilize the Broadband Backhaul Services
provided by Vendor or its Affiliates or the broadband backhaul services of any
other party. "Aggregate DSL Subscriber Lines" shall exclude Subscriber Lines of
any entity purchased, acquired, or merged with Customer or any Affiliate that,
as of the date of such purchase, acquisition or merger, are contractually
committed to another vendor of broadband backhaul services; provided that such
Subscriber Lines of such entity shall be excluded only for so long as the
duration (determined as of the date of such purchase, acquisition, or merger) of
such contractual commitment plus a mutually agreeable transition period.
"Aggregate Other Broadband Subscriber Lines" means the aggregate number of
Subscriber Lines providing broadband services that utilize the Broadband
Backhaul Services provided by Vendor or its Affiliates or the broadband backhaul
services of any other party. "Aggregate Other Broadband Subscriber Lines" shall
exclude (a) Subscriber Lines that transmit xDSL services, (b) Subscriber Lines
that utilize [*Material Omitted and Separately Filed Under an Application for
Confidential Treatment] that are[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment], and (c) Subscriber Lines of any entity
purchased, acquired, or merged with Customer or any Affiliate that, as of the
date of such purchase, acquisition or merger, are contractually committed to
another vendor of broadband backhaul services; provided that such Subscriber
Lines of such entity shall be excluded only for so long as the duration
(determined as of the date of such purchase, acquisition, or merger) of such
contractual commitment plus a mutually agreeable transition period.
"Aggregate Subscriber Lines" means the Aggregate DSL Subscriber Lines and
Aggregate Other Broadband Subscriber Lines, collectively.
"All New Ports MP Change Date" shall mean, for any New Dial-Up Market Price
Notice, the later of (a) the New Dial-Up Market Price Effective Date
corresponding to such New Dial-Up Market Price Notice, and (b) [*Material
Omitted and Separately Filed Under an Application for Confidential Treatment].
"ANI" has the meaning set forth in Section 11.1 of the Master Agreement.
"AOL Average" means, for a particular Service Level metric, the average
performance achieved with respect to such metric by other vendors of Customer
providing services similar to the Services corresponding to such Service Level
metric covering the same measurement period as the corresponding Service Level
measurement period.
"AOL Information Service" means a service (a) containing branding owned or
controlled by Customer or a Customer Affiliate, or using all or a portion of
Customer's or a Customer Affiliate's network or backend systems, or (b) in which
content, communications services and/or transactions are provided to end-users
through the use of any protocols, standards, platforms, media or other
methodology now or hereafter existing (including the Internet and similar
protocols, standards and platforms) from host server computers through the use
of client software resident on other computers or access devices.
Schedule A - Page 1
CONFIDENTIAL TREATMENT REQUESTED
"Applicable DUP Purchaser" has the meaning set forth in Section 8.3(b) of
Schedule B.
"Area Delivery Target" has the meaning set forth in Section 2.2(b) of
Schedule B.
"Base Port MP Change Date" shall mean, for any New Dial-Up Market Price Notice,
the later of (a) the New Dial-Up Market Price Effective Date corresponding to
such New Dial-Up Market Price Notice, and (b) [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment].
"BPS", whether or not capitalized, shall mean bits per second.
"Broadband Backhaul" shall means the facility and associated managed services,
however provided in terms of technology, for receiving broadband traffic from
the public switched telephone network, a cable network, or a wireless network,
satellite network or other technologies, and delivering that traffic to a
Customer facility, where the end-user has initiated the connection. "Broadband
Backhaul" includes the provision of interconnection to an aggregation point and
the transport of bits from that aggregation point to a Customer facility.
"Broadband Backhaul Delivery Period" means, with respect to any New LATA, the
period commencing on the date Customer provides Vendor with the corresponding
New LATA Notice and ending on the later of (a) [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment] days following such date,
and (b) if and only if Vendor has performed its obligations with respect to the
ATM intra-LATA interconnect (e.g., ordering of the circuit, management of the
associated third-party vendors), [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] days following the date on which the
local access provider is ready to activate the ATM intra-LATA interconnect in
such New LATA.
"Broadband Backhaul Market Vendor" has the meaning set forth in 7.2(a)(i)(2) of
Schedule C.
"Broadband Backhaul Purchase Commitments" means the DSL Purchase Commitment and
the Other Broadband Purchase Commitment, collectively.
"Broadband Backhaul Services" means (i) Broadband Backhaul ordered by Customer
pursuant to an Order to the extent accepted by Vendor pursuant to Schedule C and
managed network services associated therewith (including those services
described in Article 5 of Schedule C), and (ii) any other services described in
an Order to the extent accepted by Vendor pursuant to Schedule C, each of (i)
and (ii) as such services may change in accordance with the Agreement.
"Broadband Specifications" has the meaning set forth in Article 8 of Schedule C.
"Broadband Term" has the meaning set forth in Article 1 of Schedule C.
"Comparable Broadband Backhaul Services" means managed broadband backhaul
services that are comparable to Broadband Backhaul provided under Schedule C
(including comparable nationwide geographic distribution of Subscriber Lines
utilizing Broadband Backhaul and comparable terms and conditions).
"Comparable Dial-Up Services" means dedicated, managed dial-up access services
(not including usage-based dial-up access services) that are comparable to Dial-
Up Access provided under Schedule B (including comparable nationwide geographic
distribution of Dedicated Dial-Up Access Ports, and comparable terms and
conditions).
"Confidential Information" has the meaning set forth in Section 11.1 of the
Master Agreement.
"Covered Subscriber Line" has the meaning set forth in Section 9.1(b) of Exhibit
C-2 of Schedule C.
"Customer" has the meaning set forth in the preamble to the Master Agreement.
"Customer Data" means (i) all information or data provided to, or otherwise
learned or exposed to Vendor, Vendor's Affiliates or subcontractors by or on
behalf of Customer or end users of Customer's services in conjunction with use
of the Services (including such information that is transmitted by or through
the network(s) used to provide the Services), and (ii) information derived from
such information.
"Dedicated Dial-Up Access Port" is a Dial-Up Access Port that is (a) available
solely to the Customer and Special Affiliates, as applicable, and the end users
of Customer's and Special Affiliates' services, and (b) is not available to any
other party.
Schedule A - Page 2
CONFIDENTIAL TREATMENT REQUESTED
"Dial-Up Acceptance Test Period" has the meaning set forth in Section 2.7(a) of
Schedule B.
"Dial-Up Acceptance Testing" has the meaning set forth in Section 2.7(a) of
Schedule B.
"Dial-Up Access" is the facility and associated end-to-end, managed services,
however provided in terms of technology, for receiving analog or ISDN in-bound
calls from the public switched telephone network on demand and converting those
signals to digital form for transmission over digital networks, where the end-
user has initiated the call. "Dial-Up Access" includes the provision of Dial-Up
Access Ports.
"Dial-Up Access Port" is the capacity to offer Dial-Up Access to one (1)
incoming analog or ISDN in-bound call, plus signaling channels.
"Dial-Up Access Services" means (i) the "modems," managed, end-to-end network
services associated therewith, provided by Vendor to Customer under the Original
Agreement, (ii) Dial-Up Access ordered by Customer pursuant to an Order to the
extent accepted by Vendor pursuant to Schedule B and fully managed, end-to-end
network services associated therewith (including those services described in
Article 6 of Schedule B, and (iii) any other services described in an Order to
the extent accepted by Vendor pursuant to Schedule B, each of (i), (ii) and
(iii) as such services may change in accordance with the Agreement.
"Dial-Up Access Specifications" mean those Specifications described in
Section 9.1 of Schedule B.
"Dial-Up Access Term" shall have the meaning set forth in Article 1 of
Schedule B.
"Dial-Up Market Vendor" has the meaning set forth in Section 8.3(a)(i)(2) of
Schedule B.
"Dial-Up Market Vendor Trigger" has the meaning set forth in Section 8.3(a)(i)
of Schedule B.
"Dial-Up Nonconformity" has the meaning set forth in Section 2.7(b)(i) of
Schedule B.
"Dial-Up Purchase Commitment" has the meaning set forth in Section 2.8(a) of
Schedule B.
"Disclosing Party" has the meaning set forth in Section 11.1 of the Master
Agreement.
"DSL Purchase Commitment" has the meaning set forth in Section 2.1 of Exhibit
C-1 of Schedule C.
"Effective Date" has the meaning set forth in the preamble to the Master
Agreement.
"Existing Calling Areas" means any rate center or calling area in which Vendor
(a) before the Effective Date provided, or agreed to provide, Dial-Up Access
Services to Customer (e.g., pursuant to the Original Agreement), or (b) during
the Term provides, or agrees to provide (e.g., pursuant to an Order), Dial-Up
Access Services to Customer.
"Existing Dedicated Dial-Up Access Port" has the meaning set forth in Section
8.1(b) of Schedule B.
"Existing LATA" means, at any given point in time, any LATA in which Vendor has
already provisioned Broadband Backhaul for xDSL for any customer.
"Final Acceptance" has the meaning set forth in Section 2.7(c) of Schedule B.
"Force Majeure Event" has the meaning set forth in Section 14.2 of the Master
Agreement.
"Include," "includes", and "including", whether or not capitalized, shall mean
"include but are not limited to", "includes but is not limited to", and
"including but not limited to", respectively.
"Incremental New Ports MP Change Date" shall mean, for any New Dial-Up Market
Price Notice, the later of (a) the New Dial-Up Market Price Effective Date
corresponding to such New Dial-Up Market Price Notice, and (b) [*Material
Omitted and Separately Filed Under an Application for Confidential Treatment]..
"L2TP" means Layer Two Tunneling Protocol.
"Leased Items" has the meaning set forth in Section 8.1(a)(ii) of Schedule B.
"Master Agreement" shall mean the Agreement excluding the Schedules to the
Agreement.
"Measurement Date" has the meaning set forth in Section 3.1 of Exhibit C-1 of
Schedule C.
"Monthly Aggregate Subscriber Line Charge" has the meaning set forth in Section
2.3(a) of Exhibit C-2 of Schedule C.
Schedule A - Page 3
CONFIDENTIAL TREATMENT REQUESTED
"Monthly DAP Charge" has the meaning set forth in Section 8.1(b) of Schedule B.
"Monthly EDAP Charge" has the meaning set forth in Section 8.1(a) of Schedule B.
"Monthly Pass-Through Expenses" has the meaning set forth in Section 7.1(b) of
Schedule C.
"Monthly Per Subscriber Line Charge" has the meaning set forth in Section 2.1 of
Exhibit C-2 of Schedule C.
"Monthly Subscriber Line Aggregate" has the meaning set forth in Section 2.3(a)
of Exhibit C-2 of Schedule C.
"Monthly Target" has the meaning set forth in Section 2.2 of Schedule B.
"New Broadband Backhaul Market Price" has the meaning set forth in Section
7.2(a)(i)(1) of Schedule C.
"New Broadband Backhaul Market Price Effective Date" means the date that is
ninety (90) calendar days after the New Broadband Backhaul Market Price Notice
Date corresponding to a New Broadband Backhaul Market Price Notice provided by
Customer.
"New Broadband Backhaul Market Price Notice" has the meaning set forth in
Section 7.2(a)(ii) of Schedule C.
"New Broadband Backhaul Market Price Notice Date" has the meaning set forth in
Section 7.2(a)(ii) of Schedule C.
"New Broadband Backhaul Market Price Response" has the meaning set forth in
7.2(a)(ii) of Schedule C.
"New Calling Area" means any rate center or calling area which is not an
Existing Calling Area.
"New Dial-Up Market Price" has the meaning set forth in Section 8.3(a) of
Schedule B.
"New Dial-Up Market Price Effective Date" means the date that is ninety (90)
calendar days after the New Dial-Up Market Price Notice Date corresponding to a
New Dial-Up Market Price Notice provided by Customer.
"New Dial-Up Market Price Notice" has the meaning set forth in Section
8.3(a)(ii) of Schedule B.
"New Dial-Up Market Price Notice Date" has the meaning set forth in Section
8.3(a)(ii) of Schedule B.
"New Dial-Up Market Price Response" has the meaning set forth in Section
8.3 (a)(ii) of Schedule B.
"New LATA" means, at a given point in time, any LATA in which Vendor has not
already provisioned Broadband Backhaul for xDSL for any customer.
"New LATA Notice" has the meaning set forth in Section 1(c) of Schedule C.
"New Port" means any Dedicated Dial-Up Access Port that is not a Existing Dial-
Up Access Port.
"NOC" means a network operations center.
"Non-Terminable Breach" means a breach that does not, in and of itself, give
rise to Customer's right to exercise the Agreement Termination Right.
"Normalization Methodology" has the meaning set forth in Section 8.4(a) of
Schedule B.
"Order" means any valid order submitted by Customer pursuant to a Schedule to
this Agreement to the extent accepted or deemed accepted by Vendor pursuant to
such Schedule.
"Order Fulfillment Period" has the meaning set forth in Section 2.2 of
Schedule B.
"Original Agreement" has the meaning given in Section 1.1(b) of the Master
Agreement.
"Other Broadband Purchase Commitment" has the meaning set forth in Section 2.2
of Exhibit C-1 to Schedule C.
"Other Services Purchase Commitment" has the meaning set forth in Schedule D.
"Other Vendors' Decom Share" means for any calendar quarter, the amount
calculated as (a) the total number of Dedicated Dial-Up Access Ports (including
usage-based Dial-Up Access Services adjusted using the Normalization
Methodology) provided to Customer other than by Vendor that are decommissioned
by Customer in such quarter, divided by (b) the total number of Dedicated Dial-
Up Access Ports (including usage-based Dial-Up Access
Schedule A - Page 4
CONFIDENTIAL TREATMENT REQUESTED
Services adjusted using the Normalization Methodology) provided to Customer
other than by Vendor that are installed and accepted at the beginning of such
quarter.
"Out-of-Pocket Expenses" shall mean reasonable, verifiable and actual out-of-
pocket expenses and associated taxes, if any, incurred by a Party, but excluding
that Party's overhead costs (or allocations thereof), administrative expenses or
other ▇▇▇▇-ups.
"Owned Items" has the meaning set forth in Section 8.1(a)(ii) of Schedule B.
"Party" and "Parties" has the meaning set forth in the preamble to the Master
Agreement.
"Peak Resale Window" has the meaning set forth in Section 4(b) of Schedule B.
"POP" means point of presence.
"Pre-Term Private Line Agreements" has the meaning set forth in Schedule D.
"Press Release" has the meaning set forth in Section 16.11(b) of the Master
Agreement.
"Private Line Services" has the meaning set forth in Schedule D.
"Promotional Materials" has the meaning set forth in Section 16.11(a) of the
Master Agreement.
"Purchase Commitments" means (i) the Dial-Up Purchase Commitment, (ii) the
Broadband Backhaul Purchase Commitments, and (iii) the Other Services Purchase
Commitment, collectively.
"Receiving Party" has the meaning set forth in Section 11.1 of the Master
Agreement.
[*Material Omitted and Separately Filed Under an Application for Confidential
Treatment] has the meaning set forth in Section 8(e) of Schedule C.
"Reportless Ports" has the meaning set forth in Section 8.5(a) of Schedule B.
"Resold Dial-Up Access" has the meaning set forth in Section 4(a) of Schedule B.
"Service Levels" means the quantitative and qualitative service levels
identified as such the Schedules to this Agreement.
"Services" means, collectively (i) Dial-Up Access Services, (ii) Broadband
Backhaul Services, (iii) Other Services, and (iv) any other services that the
Parties mutually agree in writing that are governed by the terms of this
Agreement.
"Significant Competitor" means, solely with respect to Section 13.3 of the
Master Agreement, any of the following entities or their Affiliates (which
entities may be modified from time-to-time by Customer on notice following
August 31, 2000): [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment].
"Special Affiliate" means, with respect to Customer, (i) Customer's Affiliates,
(ii) any other entity in which Customer holds, either directly or indirectly, at
least an [*Material Omitted and Separately Filed Under an Application for
Confidential Treatment] equity interest, or (iii) any entity which operates or
distributes, or is authorized to operate or distribute, an AOL Information
Service.
"Specifications" means the specifications and other requirements for the
Services identified as such in a Schedule to the Agreement.
"Subscriber Line" means a dedicated connection, between an end user of services
of Customer or one of its Affiliates and an aggregation point, that is activated
and purchased by Customer or one or its Affiliates to provide services to such
end user.
"Term" has the meaning set forth in Article 2 of the Master Agreement.
"Transition Assistance" has the meaning set forth in Section 13.4 of the Master
Agreement.
"Transition Period" has the meaning set forth in Section 13.4 of the Master
Agreement.
"Valid Order Rejection Reason" has the meaning set forth in Section 2.3(a) of
Schedule B.
"Vendor" has the meaning set forth in the preamble to the Master Agreement.
"Vendor Broadband Subscriber Line" means a Subscriber Line used to transmit
broadband services that utilize the Broadband Backhaul Services provided by
Vendor or its Affiliates.
"Vendor Decom Share" means for any calendar quarter, the amount calculated as
(a) the total number
Schedule A - Page 5
CONFIDENTIAL TREATMENT REQUESTED
of Dedicated Dial-Up Access Ports (including usage-based Dial-Up Access Services
adjusted using the Normalization Methodology) provided by Vendor that are
decommissioned by Customer in such quarter, divided by (b) the total number of
Dedicated Dial-Up Access Ports (including usage-based Dial-Up Access Services
adjusted using the Normalization Methodology) provided by Vendor that are
installed and accepted at the beginning of such quarter.
"Vendor ISP Affiliate" means any Affiliate of Vendor that offers online or
Internet connectivity services (e.g., an Internet service provider) to
consumers.
"Vendor Network" means any and all of the network or networks that support
Services ordered and accepted by Customer hereunder.
"Waiver" has the meaning set forth in Section 1.2(b) of the Master Agreement.
Schedule A - Page 6
CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE B
Dial-Up Access Services, Service Levels, Pricing and Other Terms
1. TERM
The term of this Schedule B shall begin on the Effective Date and shall
expire on December 31, 2006, unless terminated earlier in accordance with
the Agreement, or extended by mutual written agreement (such period, as
terminated earlier or so extended, the "Dial-Up Access Term").
2. ORDERING
2.1. New Markets.
Vendor from time to time shall deliver to Customer a listing of any
new rate centers or calling areas that are in addition to the Existing
Calling Areas within which Vendor is willing to provide Dial-Up Access
Services.
2.2. Customer Submission of Orders.
-----------------------------
To order any Dial-Up Access Services, Customer shall submit to Vendor
an order for such services covering the three-calendar month period
beginning at least ninety (90) days following submission of the order
(such three-month period the "Order Fulfillment Period"). Each order
will set forth the following:
(a) the cumulative number of Dedicated Dial-Up Access Ports that
Vendor must have installed and activated as of the end of each
calendar month of an Order Fulfillment Period (for each calendar
month, such number the "Monthly Target"), and
(b) the number of incremental Dedicated Dial-Up Access Ports for each
calling area ordered by Customer during an Order Fulfillment
Period (for each calling area, the "Area Delivery Target").
Each order will be clearly marked as such, and will be delivered by
Customer via electronic mail to such individuals designated in writing
from time to time by Vendor. An e-mailed order will be valid only if
it is submitted by the Vice President of AOLnet Operations, the
Director for AOLnet Capacity Planning, or a designee of either.
2.3. Vendor Acceptance or Rejection of Orders.
----------------------------------------
(a) Acceptance and Rejection Process.
--------------------------------
Vendor shall, within ten (10) business days after receipt of a
valid order pursuant to Section 2.2 of this Schedule B, notify
Customer of one of the following:
(i) its acceptance of such order; or
Schedule B - Page 1
CONFIDENTIAL TREATMENT REQUESTED
(ii) its rejection of such order in whole or in part; provided
that Vendor may reject an order if and only to the extent
(1) the Monthly Target for a calendar month exceeds the
prior month's Monthly Target by more than [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment] Dedicated Dial-Up Access Ports, (2) such order
requests Dial-Up Access Services to be delivered in a New
Calling Area, (3) such order does not reflect the same
approximate weighted distribution of Dedicated Dial-Up
Access Ports across Existing Calling Areas, or (4) such
order requests the provision of Dedicated Dial-Up Access
Ports in excess of the Dial-Up Purchase Commitment (each of
(1), (2), (3) and (4) a "Valid Order Rejection Reason").
If Vendor fails to provide Customer with such notice within such
ten-day period, then such order shall be deemed accepted by
Vendor. Vendor shall be obligated to deliver, in accordance with
this Schedule B, the Dial-Up Access Services requested by
Customer in an order to the extent such order is accepted or
deemed accepted by Vendor. If Vendor rejects an order (or a
portion thereof) for the reason described in Subsection (ii)(3)
above, following notice of such objection by Vendor, the Parties
will mutually agree on an equitable resolution consistent with
the intent of this Section.
(b) Rejections by Vendor.
--------------------
To the extent that Vendor rejects an order (or portion thereof)
for any reason other than a Valid Order Rejection Reason, the
Dial-Up Purchase Commitment shall be reduced by the number of
Dedicated Dial-Up Access Ports wrongfully rejected by Vendor.
(c) Additional Tasking.
------------------
For any Order Fulfillment Period, in the event Vendor requests,
Customer will provide Vendor with additional tasking of Dedicated
Dial-Up Access Ports for Existing Calling Areas; provided,
however, that such additional tasking shall not result in total
tasking in excess of [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] Dedicated Dial-
Up Access Ports above the Monthly Target for the third month of
the such Order Fulfillment Period. Customer will designate the
Existing Calling Areas in which any of the Dedicated Dial-Up
Access Ports corresponding to such additional tasking will be
provided by Vendor. Any additional tasking shall not affect the
Monthly Targets.
2.4. Cancellation Without Cause and Rescheduling of Orders.
-----------------------------------------------------
(a) Pre-Acceptance or Pre-Rejection Cancellation or Modification
------------------------------------------------------------
by Customer.
-----------
Prior to acceptance or rejection of an order by Vendor, Customer
may rescind or modify, in whole or in part in its sole
discretion, such order.
(b) Post-Acceptance Cancellation or Modification by Customer.
--------------------------------------------------------
Schedule B - Page 2
CONFIDENTIAL TREATMENT REQUESTED
(i) Customer may cancel or modify an Order in whole or in part
at any time in its discretion prior to the delivery of the
corresponding Dedicated Dial-Up Access Ports set forth in
such Order; provided, however, that except to the extent
otherwise agreed by Vendor, such cancellation or
modification shall not result in circumstances that would
constitute a Valid Order Rejection Reason. For any such
cancellation or modification, Customer will pay to Vendor
any incremental Out-of-Pocket Expenses actually incurred as
a result of such cancellation or modification and that could
not reasonably have been avoided by Vendor. Customer shall
have no liability to Vendor for an Order cancelled pursuant
to this Subsection (i) other than payment to Vendor of such
Out-of-Pocket Expenses.
(ii) Customer's cancellation or modification of an Order pursuant
to this Subsection (b) shall not relieve Customer of its
obligations with respect to the Dial-Up Purchase Commitment.
In the event of significant changes to an Order by Customer,
Vendor may provide Customer with notice of impaired ability
to deliver, and the Parties shall mutually agree upon
appropriate changes to the Monthly Targets.
2.5. Delivery.
--------
(a) Notification of Delivery by Vendor.
----------------------------------
Vendor shall only deliver Dedicated Dial-Up Access Ports that
Vendor reasonably and in good faith believes will satisfy the
applicable Acceptance Criteria. Upon delivery of any Dedicated
Dial-Up Access Port (but no sooner than such delivery), Vendor
shall provide to Customer notification of such delivery by e-mail
to the Vice President of AOLnet Operations, the Director for
AOLnet Capacity Planning, or a designee of either. For purposes
of Subsection (e) of Section 2.5, delivery of any Dedicated Dial-
Up Access Port shall be deemed made upon Customer's receipt of
such e-mail from Vendor.
(b) Early Delivery By Vendor.
------------------------
Vendor may deliver Dedicated Dial-Up Access Ports ordered by
Customer before the commencement of the corresponding Order
Fulfillment Period.
(c) Initial Testing Failure of Dedicated Dial-Up Access Ports.
---------------------------------------------------------
Notwithstanding the deemed delivery date described in the last
sentence of Subsection (a) of this Section, if any Dedicated
Dial-Up Access Port provided in a month is not accepted by
Customer prior to the 15/th/ day of the next month, then such
Dedicated Dial-Up Access Port will be deemed not to have been
delivered during the first month.
(d) Delivery of Additional Tasking.
------------------------------
In any month, Customer shall not be required to accept any
Dedicated Dial-Up Access Ports in excess of [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment] Dedicated Dial-Up Access Ports
Schedule B - Page 3
CONFIDENTIAL TREATMENT REQUESTED
above the Monthly Target for such month. With respect to any
calling area, Customer shall not be required to accept any more
Dedicated Dial-Up Access Ports in excess of the then-current Area
Delivery Target for such calling area.
(e) Vendor Failures to Deliver.
--------------------------
(i) Failure to Meet Monthly Target. If Vendor fails to deliver
------------------------------
the Monthly Target in any month by more than [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] Dedicated Dial-Up Access Ports, then
Customer may reduce the Dial-Up Purchase Commitment by the
number of Dedicated Dial-Up Access Ports over [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] that Vendor fails to so deliver.
(ii) Late Delivery.
-------------
Vendor shall use demonstrable good faith diligent efforts to
deliver Dedicated Dial-Up Access Ports in accordance with an
Order prior to the end of the corresponding Order
Fulfillment Period. Customer may reduce the Dial-Up Purchase
Commitment by the number of Dedicated Dial-Up Access Ports
included in an Order (A) for which Vendor has not delivered
a substantial portion of a Area Delivery Target by the end
of the corresponding Order Fulfillment Period and (B) with
respect to which Vendor has not used such efforts. In
addition, Customer may cancel, at no cost or liability to
Customer, the unfilled portion of the Order pertaining to
such Dedicated Dial-Up Access Ports. In the event of such
cancellation, Customer shall have no payment obligations to
Vendor with respect to the Dedicated Dial-Up Access Ports
corresponding to the cancelled portion or portions of the
Order. Upon Customer's request, Vendor shall provide
Customer with information and supporting documentation which
demonstrates Vendor's good faith diligent efforts to deliver
all Dedicated Dial-Up Access Ports set forth in an Order
prior to the end of the corresponding Order Fulfillment
Period (e.g., documents showing Vendor's ordering of
circuits from an access provider necessary to provision such
ordered Dedicated Dial-Up Access Ports as well as the
corresponding response from such access providers (e.g.,
firm order commitment)).
2.6. Ordering Process Review.
-----------------------
The Parties acknowledge that the ordering process set forth in this
Article 2 may require modification during the Dial-Up Access Term, and
that in such event the Parties shall meet to discuss amending this
Schedule to reflect any mutually agreed-upon modifications.
2.7. Acceptance Testing and Final Acceptance.
---------------------------------------
(a) Acceptance Testing. Dedicated Dial-Up Access Ports ordered
------------------
hereunder will require acceptance testing by Customer as
described in this Section. Customer will have up to a [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] business day period from the date
Schedule B - Page 4
CONFIDENTIAL TREATMENT REQUESTED
such Dedicated Dial-Up Access Ports are delivered to Customer (the
"Dial-Up Acceptance Test Period") in which to perform any reasonable
testing as Customer in its sole discretion deems appropriate to
determine whether such Dedicated Dial-Up Access Ports conform to their
applicable Acceptance Criteria (the "Dial-Up Acceptance Testing"). If
such Dedicated Dial-Up Access Ports meet their applicable Acceptance
Criteria, Customer will notify Vendor (by electronic mail) that such
Dedicated Dial-Up Access Ports have received Final Acceptance pursuant
to Subsection (c) of this Section. Dedicated Dial-Up Access Ports
activated and accepted by Customer prior to the Effective Date in
accordance with the Original Agreement will be deemed accepted for
purposes of this Agreement.
(b) Failure to Satisfy Acceptance Criteria.
--------------------------------------
(i) If Dedicated Dial-Up Access Ports fail to conform to their
Acceptance Criteria (each such failure a "Dial-Up
Nonconformity"), Customer will notify Vendor within the
Acceptance Test Period (by electronic mail), specifying the
nature of the failure in reasonable detail. Vendor will remove
rejected Dedicated Dial-Up Access Ports from service pending
further troubleshooting and corrective action. At no additional
charge to Customer, Vendor shall use commercially reasonable
efforts to repair, replace or otherwise correct the Dial-Up
Nonconformity (and any other problems of which it has knowledge)
as soon as reasonably practicable after receiving notice from
Customer so that the Dedicated Dial-Up Access Ports meet the
applicable Acceptance Criteria.
(ii) Upon completion of such efforts and Vendor's re-release of
Dedicated Dial-Up Access Ports to Customer, Customer shall have
an additional [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] business day period to
retest the re-delivered Dedicated Dial-Up Access Ports to
determine whether the previously reported Dial-Up Nonconformity
has been corrected and if such Dedicated Dial-Up Access Ports
otherwise then meet the applicable Acceptance Criteria. This
process will be repeated as necessary until all Dial-Up
Nonconformities are corrected and such Dedicated Dial-Up Access
Ports meet the applicable Acceptance Criteria.
(iii) Notwithstanding Subsection (ii) above, if after [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] attempts for curing Dial-Up
Nonconformities, Vendor has not delivered such Dedicated Dial-Up
Access Ports conforming to the applicable Acceptance Criteria,
then Customer may:
(1) allow Vendor to continue to try to correct any Dial-Up
Nonconformities;
(2) if mutually agreed upon by the Parties, accept such
Dedicated Dial-Up Access Ports in their nonconforming
condition and reduce Vendor's charges for such Dedicated
Dial-Up Access Ports by a reasonable amount as mutually
determined by the
Schedule B - Page 5
CONFIDENTIAL TREATMENT REQUESTED
Parties that shall reflect the reduced value of
such Dedicated Dial-Up Access Ports; or
(3) (A) cancel, in whole or in part, at no cost or
liability to Customer the portion of the
corresponding Order that does not conform as of a
date specified in a written notice of cancellation
issued by Customer, and (B) so long as the Dial-Up
Nonconformities affect at least[*Material Omitted
and Separately Filed Under an Application for
Confidential Treatment] ([*Material Omitted and
Separately Filed Under an Application for
Confidential Treatment]) of the Order, cancel, in
whole or in part, at no cost or liability to
Customer the unfilled portion of the corresponding
Order as of a date specified in a written notice
of cancellation issued by Customer. Customer shall
have no payment obligations to Vendor with respect
to any cancelled portion of an Order.
(c) Final Acceptance. Dedicated Dial-Up Access Ports ordered by
----------------
Customer shall be deemed to be accepted (such acceptance the
"Final Acceptance") only upon the earlier of: (i) receipt by
Vendor of written notice by Customer certifying that such
Dedicated Dial-Up Access Ports conform to the applicable
Acceptance Criteria; or (ii) the expiration of the Dial-Up
Acceptance Testing Period for such Dedicated Dial-Up Access Ports
without notice of rejection by Customer. Notwithstanding anything
to the contrary herein, Final Acceptance of Dedicated Dial-Up
Access Ports shall only occur in accordance with the terms of
this Agreement. Use of Dedicated Dial-Up Access Ports for
business, profit, or any other purpose before Final Acceptance
shall not constitute Final Acceptance by Customer.
2.8. Dial-Up Purchase Commitments.
----------------------------
(a) Dial-Up Purchase Commitments.
----------------------------
The Monthly Targets for Customer's purchase commitments are set
forth in Exhibit B-1. The minimum commitments specified in
Exhibit B-1 collectively, and as may be adjusted pursuant to the
Agreement, shall be referred to as the "Dial-Up Purchase
Commitment". All Dedicated Dial-Up Access Ports ordered by
Customer pursuant to an Order shall contribute to Customer's
satisfaction of the Dial-Up Purchase Commitment. Customer shall
not be obligated to purchase any Dial-Up Access Services in
excess of the Dial-Up Purchase Commitment (as such commitment may
be adjusted pursuant to the Agreement).
(b) Application of Reductions in Purchase Commitments.
-------------------------------------------------
In the event that Customer is entitled to a reduction in the
Dial-Up Purchase Commitment pursuant to the Agreement, each
commitment described in Subsections (b), (c), (d), and (e) of
Exhibit B-1 shall be reduced by the amount of such reduction. The
Parties shall mutually agree upon a reasonable notification
process with respect to reductions in the Dial-Up Purchase
Commitment.
Schedule B - Page 6
CONFIDENTIAL TREATMENT REQUESTED
(c) Substitution of Purchase Commitments Under International
--------------------------------------------------------
Agreements.
----------
If Vendor offers Customer or Special Affiliates dial-up access
services for provision outside of the United States (excluding
Japan) at market competitive prices and terms:
(i) Customer will use commercially reasonable efforts to
encourage such Special Affiliates to purchase in the
aggregate for all such Special Affiliates [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment] Dial-Up Access Ports from Vendor or Vendor's
Affiliates at such market competitive prices and terms; and
(ii) If as of [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] such Special
Affiliates have not ordered, committed to order or purchase,
or actually purchased, in the aggregate for all such Special
Affiliates, [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] Dial-Up Access Ports
from Vendor or Vendor's Affiliates at market competitive
prices and terms with durations of at least [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment], then Customer shall purchase a
number of Dedicated Dial-Up Access Ports under this
Agreement equal to the difference between [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment] Dedicated Dial-Up Access Ports and the actual
number of dial-up access ports that such Special Affiliates
in the aggregate ordered, committed to order or purchase, or
actually ordered from Vendor or Vendor's Affiliates as of
such date (as determined utilizing the Normalization
Methodology if applicable). Notwithstanding the foregoing,
if (1) a Special Affiliate is offered services by a third
party similar to the Dial-Up Access Services ordered or
purchased pursuant to this Agreement at prices and terms
more competitive than those offered by Vendor or Vendor's
Affiliates to such Special Affiliate in a country in which
Vendor either has operations or has indicated an intent in
which to operate, (2) such Special Affiliate, in its sole
discretion, requests Vendor to provide Dial-Up Access
Services at prices and terms at least as favorable to
Special Affiliate as such prices and terms offered by such
third party, and (c) Vendor or Vendor's Affiliates declines
to provide such services at such prices and terms, then
Customer's obligation under this Subsection (c) shall be
reduced by the aggregate amount of Dial-Up Access Ports
purchased by such Special Affiliate from such third party .
3. RELOCATION OF DIAL-UP ACCESS SERVICES
Customer shall have the right to direct at any time a change in the
location in which Dial-Up Access Services are provided within Existing
Calling Areas (including a reallocation of Dedicated Dial-Up Access Ports
among locations). In the event that Customer provides Vendor with notice
of such direction, Vendor shall comply with such direction within a
reasonable time; provided, however, that (a) any additional reasonable
costs incurred by Vendor, including any
Schedule B - Page 7
CONFIDENTIAL TREATMENT REQUESTED
reasonable service termination or service activation costs, will be
reimbursed by Customer on an Out-of-Pocket Expenses basis, (b) with respect
to Dial-Up Access Services, Customer shall not direct relocation of more
than [*Material Omitted and Separately Filed Under an Application for
Confidential Treatment] Dedicated Dial-Up Access Ports in any given
calendar month; and (c) such relocation shall result in the same
approximate weighted distribution of Dedicated Dial-Up Access Ports across
Existing Calling Areas.
4. RESALE OF DIAL-UP ACCESS SERVICES
(a) Unless otherwise agreed by Customer in writing:
(i) Each Dedicated Dial-Up Access Port shall be exclusively
available to Customer and its Special Affiliates to whom
Vendor is providing Dedicated Dial-Up Services; and
(ii) Vendor shall not resell or offer to resell any Dedicated
Dial-Up Access Port ordered and accepted by Customer;
provided however, that Vendor may continue to provide access, at
current levels or levels that are lesser than current levels and
consistent with Vendor's obligations under section 10 of the
Original Agreement, as amended, with respect to (A) until (but no
later than) January 31, 2000, Dedicated Dial-Up Access Ports
(excluding the approximately [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment] rotaries)
to those Vendor customers that are using such Dedicated Dial-Up
Access Ports as of the Effective Date, and (B) until (but no
later than) February 29, 2000, the approximately [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] rotaries to those Vendor customers that
are using the same as of the Effective Date (such access "Resold
Dial-Up Access"), subject to Vendor's payment to Customer of
access royalties calculated pursuant to this Article 4. At no
time during the Peak Resale Window (as defined below) may access
that Vendor is permitted to provide to customers pursuant to this
Subsection (a) exceed [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] ([*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] %) of the Dedicated Dial-Up Access Port
capacity that Vendor is required to provide pursuant to this
Schedule B.
(b) Access royalties payable by Vendor pursuant to Subsection (a) of
this Article 4 for Resold Dial-Up Access authorized pursuant to
such Subsection (a) and occurring before January 1, 2000 shall be
calculated as follows:
(i) For each of the first [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
aggregate hours of Resold Dial-Up Access in a calendar
month, the applicable access royalty shall be [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment].
(ii) For each of the first [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment] hours
of Resold Dial-Up
Schedule B - Page 8
CONFIDENTIAL TREATMENT REQUESTED
Access in a calendar month in excess of the [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] hours described in Subsection (i)
of this Subsection (b), the applicable access royalty
shall be [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] cents
($.[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]) per hour per
month.
(iii) For each hour of Resold Dial-Up Access in a calendar
month in excess of the [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
aggregate hours described in Subsections (i) and (ii) of
this Subsection (b), the applicable access royalty shall
be [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] cents
($.[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]) per hour per
month.
The number of hours of Resold Dial-Up Access during the hours
between 8:00 p.m. local time and midnight local time daily (such
daily period the "Peak Resale Window") for Resold Dial-Up Access
occurring before January 1, 2000 shall not exceed [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] ([*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]%) of the
aggregate number of hours of Resold Dial-Up Access, measured
quarterly, except that the number of hours of Resold Dial-Up
Access occurring before January 1, 2000 during the Peak Resale
Window shall not exceed [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] percent
([*Material Omitted and Separately Filed Under an Application for
Confidential Treatment]%) for Dedicated Dial-Up Access Ports
beyond [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. In the event that Vendor
does not comply with such restriction, Vendor will pay Customer,
in addition to the access royalties described above, an
additional access royalty of [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment] cents
($.[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment]) [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment] per hour
for each hour of Resold Dial-Up Access sold in violation of such
restriction.
(c) Access royalties payable by Vendor pursuant to Subsection (a) of
this Article 4 for Resold Dial-Up Access authorized pursuant to
such Subsection (a) and occurring on or after January 1, 2000 but
before or during February 29, 2000, for each hour of Resold Dial-
Up Access shall be [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] cents ($.[*Material
Omitted and Separately Filed
Schedule B - Page 9
CONFIDENTIAL TREATMENT REQUESTED
Under an Application for Confidential Treatment]) per hour per
month. The number of hours of Resold Dial-Up Access during the
Peak Resale Window for Resold Dial-Up Access occurring on or
after January 1, 2000 but before February 29, 2000 shall not
exceed [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] percent ([*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment]%) of the aggregate number of hours of
Resold Dial-Up Access during such period, measured quarterly. In
the event that Vendor does not comply with such restriction,
Vendor will pay Customer, in addition to the access royalties
described in this Subsection (c), an additional access royalty
of [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment] cents ($[*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment]) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] per hour for each hour
of Resold Dial-Up Access sold in violation of such restriction.
(d) For any Resold Dial-Up Access occurring in violation of
Subsection (a) of this Article 4 with respect to the Vendor
customers referenced in the proviso of such Subsection (a),
Vendor shall pay Customer, as its sole and exclusive remedy, an
amount equal to [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] dollars ($[*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment]) [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] per hour for
each hour of Resold Dial-Up Access in violation of Subsection
(a) of this Article 4, and any such violation shall not be
deemed to be a breach triggering a termination right under
Section 13.1(a) of the Master Agreement. For any other resale of
Dedicated Dial-Up Access Ports in violation of Subsection (a) of
this Article 4, Vendor shall pay to Customer the [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] per hour charge described in this
Subsection, and such violation shall also be deemed a material
breach entitling Customer to terminate the Agreement in
accordance with Section 13.1(a) of the Master Agreement. Vendor
shall promptly report to Customer any Resold Dial-Up Access
occurring in violation of Subsection (a) of this Article 4.
(e) Promptly following the end of each of first three calendar
months after the Effective Date (i.e., December, 1999, and
January, February 2000), Vendor will provide Customer with a
report summarizing the aggregate number of hours of Resold Dial-
Up Access or other Services for such month and the corresponding
access royalties, if any, payable by Vendor pursuant to this
Article 4.
5. TRANSITION PERIOD AND LIMITATION OF LIABILITY
5.1. Transition Period.
-----------------
The Transition Period applicable to Dial-Up Access Services shall be
equal to three months for each [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment] Dial-Up Access
Ports existing as of the effective date of expiration, termination or
cancellation (but in no event shorter than 12 months).
5.2. Liability Restrictions.
(a) Subject to Subsection (e) of this Section, the liability of
Vendor to Customer for all damages arising out of or related to
the Services provided under this Schedule will be limited to,
and will not exceed, in the aggregate during any calendar year,
Schedule B - Page 10
CONFIDENTIAL TREATMENT REQUESTED
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment] percent ([*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment]%) of the aggregate amounts paid to Vendor by Customer
(excluding Out-of-Pocket Expenses) under this Schedule and the
Original Agreement during the twelve (12) month period preceding
the date of the event giving rise to such damages. Subject to
Subsections (c) and (e) of this Section, the liability of Vendor
to Customer for damages arising out of or related to Services
provided under this Schedule caused by the acts or omissions of
third parties beyond the reasonable control of Vendor will be
further limited and will not exceed, in the aggregate during any
calendar year, [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] Dollars ($[*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment]).
(b) By way of example and without limitation, in the event that four
events occur in calendar year 2000, as described below, for
which Vendor would have liability to Customer under Subsection
(a) of this Section, then Vendor's liability to Customer for
each such event would be as follows:
(i) An event in March 2000 that is not caused by the acts or
omissions of third parties causing Customer damages of $17
million, with the preceding twelve month amounts paid of
$350 million, the liability of Vendor to Customer for such
event would be $[*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]; and
(ii) An event in June 2000 that is caused by the acts or
omissions of third parties beyond the reasonable control
of Vendor causing Customer damages of $12 million, with
the preceding twelve months amounts paid of $375 million,
the liability of Vendor to Customer for such event would
be $[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] subject to
Vendor's obligations set forth in Subsection (c) of this
Section; and
(iii) An event in October 2000 that is not caused by the acts or
omissions of third parties causing Customer damages of $15
million, with preceding twelve month amounts paid of $400
million, the liability of Vendor to Customer for such
event would be $[*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]; and
(iv) An event in December 2000 that is caused by the acts or
omissions of third parties beyond the reasonable control
of Vendor causing Customer damages of $3 million, with the
preceding twelve months amounts paid of $425 million, the
liability of Vendor to Customer for such event would be $
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] subject to
Vendor's obligations set forth in Subsection (c) of this
Section.
(c) In the event of any liability of Vendor to Customer for damages
arising out of or related to Services provided under this
Schedule caused by the acts or omissions
Schedule B - Page 11
CONFIDENTIAL TREATMENT REQUESTED
of third parties beyond the reasonable control of Vendor, then
the Parties agree as follows:
(i) Vendor agrees to vigorously pursue the recovery of damages
against the third party causing the damage, including
through negotiations, dispute resolution, or both, to
maximize the damages recoverable against such third party;
(ii) Vendor agrees to pass through to Customer any amounts that
Vendor actually recovers from such third party relating to
damages incurred in connection with Services provided to
Customer under this Schedule; and
(iii) Customer agrees that in the event that Vendor has paid any
amounts to Customer pursuant to Subsection (a) of this
Section prior to the recovery of damages from a third
party, that Vendor may reduce the amount of recovery
received from such third party by the amount previously
paid to Customer in respect of such event causing the
damages.
(iv) Amounts recovered by Vendor from third parties shall first
be passed on to Customer until Customer's full damages are
satisfied.
(d) IN NO EVENT, WHETHER IN CONTRACT OR IN TORT (INCLUDING BREACH OF
WARRANTY, NEGLIGENCE AND STRICT LIABILITY IN TORT), SHALL A
PARTY BE LIABLE TO THE OTHER PARTY FOR INDIRECT OR
CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES EVEN IF
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES
IN ADVANCE.
(e) The limitations set forth in Subsection (a) of this Section
shall not apply with respect to (i) intentional breach by
Vendor; (ii) damages occasioned by an intentional tort or the
gross negligence of Vendor; (iii) damages occasioned by Vendor's
breach of its obligations described in Article 11
(Confidentiality) of the Master Agreement, or (iv) claims
subject to indemnification pursuant to this Agreement (such
amounts paid by the indemnitee to third parties shall be deemed
to be direct damages) other than claims subject to the indemnity
set forth in Section 15(a) of the Master Agreement.
(f) Each Party shall have a duty to reasonably mitigate (i.e.,
minimize) damages for which the other Party is responsible.
6. DESCRIPTION OF DIAL-UP ACCESS SERVICES
Dial-Up Access Services shall include the provision of Dial-Up Access and
all associated fully managed, end-to-end network service functions
including the following:
6.1. General Requirements.
--------------------
(a) Vendor shall provide, for each individual Existing Calling Area,
a unique set of source IP addresses such that member
demographics can be identified through
Schedule B - Page 12
CONFIDENTIAL TREATMENT REQUESTED
such source IP addresses. Customer shall be provided the source
IP addresses prior to use by Vendor to provide the Services.
(b) Vendor shall acquire and manage IP addresses for all protocols
utilized by Customer during the Term.
(c) Vendor shall provide domain name services, including the
following:
(i) provision of domain name service for Customer;
(ii) resolution of domain name service queries to Customer
destinations;
(iii) support of domain name service for Customer service access
to the Customer domain and any zones resident on Customer
name servers; and
(iv) maintenance of domain name service servers.
(d) In the event that Customer requests a change to its access
method(s), hub architecture, or network bandwidth from that
which is described in this Schedule B (other than a request for
increased throughput priced pursuant to Section 8.1(c) of this
Schedule B), Vendor will provide Customer with Vendor's proposed
increase, if any, to the prices set forth in this Schedule B. To
the extent that Customer accepts such proposal, Vendor shall
provide the Dial-Up Access Services in accordance with the
requested change and Vendor's proposal to the extent accepted by
Customer.
(e) Vendor will utilize GNI for delivery of data traffic to
Customer's data centers; provided that, in order to provide last
mile diversity, at Customer's request, for [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment] of the GNI last mile capacity to Customer's
facilities, Customer and Vendor agree to exchange local
facilities, at no cost to either Party for equivalent bandwidth
exchanged. The Parties agree to establish a mutually acceptable
bandwidth exchanging and circuit management process, including
co-location space, facility access, and helping hands where both
Parties have local facilities in each geography.
6.2. Network Engineering.
-------------------
Vendor agrees to provide network engineering to address operational
and long-term planning issues.
6.3. Operations.
----------
Vendor will provision, staff, and operate a NOC (currently in
Columbia, Maryland) with dedicated support for Customer and a backup
NOC at a separate location (such backup NOCs currently located in
Chantilly, Virginia). The scope of this task will include the
following Vendor support services for the network:
(a) Operation of the NOC and co-located systems with trained and
qualified personnel on a continuous, 24 hours per day, 7 days per
week basis;
Schedule B - Page 13
CONFIDENTIAL TREATMENT REQUESTED
(b) Operation of all NOC equipment, monitoring, and fault isolation
functions;
(c) Coordination of the dispatch of maintenance representatives for
corrective maintenance activities and recording information in a
Problem Report ("PR"). Vendor's responsibilities shall include:
(i) Initiation of a [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] by the
Vendor maintenance representative;
(ii) Upon arrival of the maintenance representative at the site,
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iii) Upon notification to the NOC by the on-site maintenance
representative of [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment
(iv) Upon restoration of service by the maintenance
representative, the NOC shall confirm, with assistance from
the maintenance representative, [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment];
(d) Initiation of [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] resolution using a
commercially available [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] reporting
software system;
(e) Utilization of [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] resident in the NOC for:
(i) Daily testing of [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment];
(ii) Measurements of the [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] at the
times requested by Customer;
(iii) Monitoring and recording [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment];and
(iv) Accounting for the [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment];
(f) Providing on-site analyst support, at the NOC utilized to provide
Dial-Up Access Services, [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]. A dedicated
access number shall be maintained for Customer's exclusive use,
which shall always be [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]. Analyst support
shall include the following:
Schedule B - Page 14
CONFIDENTIAL TREATMENT REQUESTED
(i) Supporting short-term and long-term problem identification,
analysis, and resolution;
(ii) Ensuring that proper steps are taken to resolve the
problem;
(iii) Identifying and tracking all software, baseline and
patches, deployed in the Vendor Network and NOC platforms;
(iv) Supporting the deployment of new software to the Vendor
Network, Customer's networks and NOC equipment as
coordinated with Customer;
(v) Providing support to network provisioning requirements; and
(vi) Maintaining a technical library for the NOC.
(g) Performing on-call analyst support of the Vendor Network on a
continuous 24 hour per day, 7 days per week basis. On-call
analyst personnel respond to urgent requests from the NOC in
conjunction with the on-site Vendor personnel. Procedures for the
conduct of network testing are in accordance with those developed
in conjunction with Customer representatives;
(h) Providing operational support to Customer in the area of network
testing in association with provisioning actions. Such testing
shall be conducted from the NOC in conjunction with the on-site
Vendor installation team personnel;
(i) Maintaining and providing updates and changes to NOC maps;
(j) Maintaining an authorized outage listing for NOC controller use;
(k) Acting as Customer's agent in network security matters on a day-
to-day basis as directed by Customer in accordance with
commercially reasonable practices, and making recommendations for
improvements;
(l) Using commercial teleconferencing facilities in the resolution of
network problems, escalation of problems, and planning
activities;
(m) Providing electronic mail service support for the NOC [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment];
(n) Providing a facsimile service resident in the NOC equipment;
(o) Subject to Section 8.5(a) of this Schedule B, delivering the
following reports to Customer-designated representatives:
(i) [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment];
(ii) [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment];
Schedule B - Page 15
CONFIDENTIAL TREATMENT REQUESTED
(iii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iv) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment;
(v) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(vi) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
Customer may request additional reports that assist in improving
the quality of the Vendor Network and Customer's networks.
Vendor will provide these additional reports, or the raw data,
subject to technical reasonableness.
6.4. Network Support Organization.
----------------------------
Vendor shall structure the provision of Services in a manner that will
enable Vendor to rapidly build out its networks and deliver quality
Services.
(a) Program Management: Vendor's program management group shall
------------------
responsible for the management of the Services as a whole. The
program management team shall be led by a program executive who
has direct and immediate access to the senior management of
Vendor and a program manager who reports to such program
executive. The program management team shall be (i) the primary
point of contact between Vendor and Customer and shall coordinate
the activity of all functional groups within Vendor and (ii)
responsible for project and financial management of the Services.
(b) Engineering: Vendor shall maintain an network engineering
-----------
group that shall handle the technical aspects of the Services,
resolution of problems escalated by the NOC, planning for future
network expansion, and improvement of performance and process.
Such engineering group shall interact directly with Customer and
the NOC.
(c) Deployment: Vendor shall maintain a deployment team
----------
consisting of field engineers and technicians, as well as others
who have experience dealing directly with telcos, preparing
sites, and installing equipment. Part of this team will be based
at Vendor's facilities to coordinate activities and provide
support for installers.
(d) Operations: Vendor's NOC shall handle the operation and
----------
maintenance of the Vendor Network. The NOC will be connected to
Customer's central facilities, including a direct telephone link
to the Customer operations center. The NOC's monitoring
capability shall be set up to detect and correct most network
problems before they are visible to Customer or its customers.
6.5. Other Services.
--------------
Schedule B - Page 16
CONFIDENTIAL TREATMENT REQUESTED
(a) The NOC shall direct maintenance activities based on input from
the monitoring systems and Customer. Vendor shall handle a large
majority of repair tasks over the telephone with technicians at
the Dial-Up Access Port equipment locations by storing Dial-Up
Access subsystems at these locations, establishing working
agreements with the service providers at these locations, and by
providing written procedures. When it is necessary to send
technicians to deal with problems, Vendor shall use its existing
infrastructure of satellite offices and field engineers.
(b) Vendor agrees not to restrict Customer's dial-up traffic to and
from Customer unless requested to do so by Customer or required
to do so by court order or applicable law.
(c) The Parties shall use commercially reasonable efforts to
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment].
(d) Vendor shall announce [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment].
(e) Vendor shall reasonably coordinate with Customer regarding
any maintenance activity.
6.6. Telephone Numbers Used to Provide Dial-Up Access Services.
---------------------------------------------------------
(a) Upon (i) the request of Customer from time to time, (ii)
expiration of the Agreement or Schedule B of the Agreement, or
(iii) any termination of the Agreement or Schedule B of the
Agreement, Vendor shall provide Customer with a complete listing
of telephone numbers used to provide Dial-Up Access Services.
Ownership of such telephone number shall be governed by the
Master Agreement. Vendor shall not provide such telephone numbers
for use by Vendor (except to the extent necessary for Vendor to
provide the Dial-Up Access Services) or any third party (other
than third parties designated by Customer from time to time)
without prior written permission from Customer.
(b) For each telephone number to a Dial-Up Access Port equipment
location, and upon the decommissioning of corresponding Dial-Up
Access Services and upon the expiration or termination of this
Schedule B or the Agreement:
(i) If such telephone number is provided by Vendor or an
Affiliate of Vendor, Vendor shall, to the extent legally
permitted to do so, obtain the rights necessary for Customer
or a designee of Customer to utilize such telephone number
to provide services upon any expiration or termination of
this Schedule B; and
(ii) If such telephone number is provided by an entity other than
by Vendor or an Affiliate of Vendor, then Vendor shall use
commercially reasonable efforts to obtain the rights
necessary for Customer or a designee of Customer to utilize
such telephone number to provide services upon any
expiration or termination of this Schedule B.
Schedule B - Page 17
CONFIDENTIAL TREATMENT REQUESTED
(c) Vendor shall provide Customer with no less than thirty (30) days
advance written notice before it changes any telephone number to
a Dial-Up Access Port equipment location. Vendor shall not
utilize any new telephone number to provide Dial-Up Access
Services until Customer has accepted such telephone number in the
manner described in Section 2.7 of this Schedule B. In the event
of any such change, (i) Vendor shall provide Dial-Up Access
Services using both the original telephone number and the new
telephone number for a minimum of seven (7) calendar days after
acceptance by Customer of the new number, and (ii) the total
number of Dedicated Dial-Up Access Ports utilized for both
telephone numbers shall at all times be equal to or greater than
the total number of Dedicated Dial-Up Access Ports utilized for
the original telephone number.
7. SERVICE LEVELS FOR DIAL-UP ACCESS SERVICES
This Article 7 sets forth the Service Levels that Vendor is required to
meet or exceed pursuant to Article 7 of the Master Agreement, certain
remedies for Vendor's failure to achieve the Service Levels, as well as
terms and conditions with respect to Service Level reporting and
adjustment. For each of the Service Levels set forth in this Article 7,
scheduled maintenance by Vendor (or a third party) coordinated with
Customer pursuant to Section 6.5(a) of this Schedule B will be excluded
from the Service Level performance calculations.
7.1. Service Levels.
--------------
Dial-Up Access Services provided under the Agreement shall be
implemented with redundancy. In addition, any Dial-Up Access Port
equipment locations in which Vendor provides Services [*Material
Omitted and Separately Filed Under an Application for Confidential
Treatment]
(a) Vendor Network Availability.
---------------------------
(i) "Network Availability" shall mean the percentage of the
time that each access device used to provide Dial-Up Access
Services is reachable through the Vendor Network from the
Customer's front-end hosts and vice-versa.
(ii) The Service Level applicable to Network Availability shall
be as follows: Network Availability for each calendar month
shall exceed [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] percent
([*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] %). Vendor's
performance relative to such Service Level shall be
reported by Vendor on a monthly basis for each calendar
month.
(iii) In the event that Network Availability is below [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] percent ([*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] %) as measured in [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment], such event shall constitute a material breach
of the Agreement.
Schedule B - Page 18
CONFIDENTIAL TREATMENT REQUESTED
(b) [*Material Omitted and Separately Filed Under an Application for
Confidential Treatment]
(i) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] for any day of a
calendar month is calculated as (A) [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment], divided by (B) [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment].
(ii) The Service Level applicable to[*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] shall be as follows: [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] Percentage for each calendar month of the Term
shall not be greater than [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment] for
such month. Customer will provide reporting to Vendor
summarizing Vendor's performance with respect to this
Service Level.
(iii) In the event that Vendor fails to meet the Service Level
corresponding to [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] for each
of [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. In the event that
Vendor fails to meet the Service Level corresponding to
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] by at least
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] for each of
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment], then Customer
may, at its option and in its sole discretion, [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment].Vendor shall be relieved of its
obligation to meet the Service Level applicable to
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] to the extent that
such failure is caused by a significant change in the
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] over the same
period.
(c) Call Blocking.
-------------
(i) "Call Blocking Event" means the occurrence of a Blocked Call
during the time when any Dedicated Dial-Up Access Port
corresponding to a telephone number is not being utilized.
"Blocked Call" means an attempted call, by Customer
equipment to a telephone number used to provide the Dial-Up
Access Services, to a Dedicated Dial-Up Access Port that
results in the return of a busy signal or other failure to
connect. Vendor shall provide to Customer reporting each
calendar day of each calendar month showing the usage of all
Dedicated Dial-Up Access Ports corresponding to each
telephone number used to provide Dial-Up Access Services
[*Material Omitted and Separately Filed Under an
Schedule B - Page 19
CONFIDENTIAL TREATMENT REQUESTED
Application for Confidential Treatment]. Using such
reporting and other information, Customer will measure daily
the number of Call Blocking Events; provided, however, that
no Dedicated Dial-Up Access Port shall account for more than
one Call Blocking Event until Vendor reports such Dedicated
Dial-Up Access Port is available or such Dedicated Dial-Up
Access Port actually becomes available.
(ii) The Service Level applicable to Call Blocking Events shall
be as follows: For any Call Blocking Event, Vendor shall
remedy the circumstances causing such event within
[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment] hours after Customer's
notification of the same. Vendor's performance relative to
such Service Level shall be reported by Customer on a
monthly basis for each calendar month.
(iii) In the event that the Vendor does not satisfy the Service
Level set forth in Subsection (ii) of this Subsection (c)
(i.e., the causes of the Call Blocking Event are not
remedied pursuant to Subsection (ii) of this Subsection
(c)), then Customer, as its sole and exclusive remedy, shall
[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment] equal to (A) [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment], multiplied by (B) [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment].
(d) Training Failure Event Percentage.
---------------------------------
(i) "Training Failure Event" means, for any call by Customer
equipment to a Dedicated Dial-Up Access Port, the failure of
the modem devices utilized for such call to properly
complete modem handshake and negotiate a communications
session. "Training Failure Event Percentage" for any
telephone number means (A) the aggregate number of Training
Failure Events occurring during a calendar day for such
number, divided by (B) the aggregate number of calls by
Customer equipment to a Dedicated Dial-Up Access Port
corresponding to such telephone number during such day, with
the result expressed as a percentage. Vendor will measure
the occurrence of Training Failure Events, and will
calculate the Training Failure Event Percentage for each
day.
(ii) The Service Level applicable to Training Failure Event
Percentage shall be as follows: The Training Failure Event
Percentage for each calendar day of the Term shall be less
than [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] for such day.
(e) Ineffective Call Percentage.
---------------------------
(i) "Ineffective Call Percentage" means, for any calendar month,
the amount calculated as (A) the aggregate number of calls
that are successfully placed to an access device used to
provide Dial-Up Access
Schedule B - Page 20
CONFIDENTIAL TREATMENT REQUESTED
Services but that are not able to connect to Customer's
front end host other than as a result of problems with
Customer's front-end host or Customer-managed equipment,
divided by (B) the aggregate number of calls that are
successfully placed to an access device used to provide
Dial-Up Access Services.
(ii) The Service Level applicable to Ineffective Call Percentage
shall be as follows: Ineffective Call Percentage for each
calendar month shall not exceed [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] percent ([*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]%).
Vendor's performance relative to such Service Level shall be
reported by Vendor on a daily basis.
(f) Customer Reported Problems.
--------------------------
(i) "Customer Reported Problem" means any problem, reported by a
user of Customer's services, that is related to the Dial-Up
Access Services. "Customer Reported Problem Average" for
any calendar month means the average number of Customer
Reported Problems per one million user sessions during such
month.
(ii) The Service Level applicable to Customer Reported Problem
Average shall be as follows: The Customer Reported Problem
Average for each calendar month of the Term shall be less
than the [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] for such month.
Vendor's performance relative to such Service Level shall be
reported by Customer on a monthly basis for each calendar
month.
(g) Monthly Abnormal Disconnect Percentage.
--------------------------------------
(i) "Daily Abnormal Disconnect Percentage" means, for each
calendar day of the Term, the amount calculated as (A) the
aggregate number of disconnected Dedicated Dial-Up Port
sessions during such day that are not initiated by a user
logoff sequence and that are caused by a problem with
respect to the Dial-Up Access Port or Vendor Network between
the access device used to provide Dial-Up Access Services
and the Vendor-managed Customer hub routers at Customer's
facilities, divided by (B) the aggregate number of all
Dedicated Dial-Up Port sessions commencing during such
calendar day, with the result expressed as a percentage.
"Monthly Abnormal Disconnect Percentage" means, for each
calendar month of the Term, the amount calculated as (x) the
percentage-point aggregate of the Daily Abnormal Disconnect
Percentages for such calendar month, divided by (y) the
aggregate number of calendar days in such calendar month.
(ii) The Service Level applicable to Monthly Abnormal Disconnect
Percentage shall be as follows: Monthly Abnormal Disconnect
Percentage during a calendar month shall be less than
[*Material Omitted and Separately Filed Under an Application
for Confidential
Schedule B - Page 21
CONFIDENTIAL TREATMENT REQUESTED
Treatment] percentage points above the corresponding
[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment] for such month. Vendor's
performance relative to such Service Level shall be reported
by Customer on a monthly basis for each calendar month.
(iii) In the event that Vendor fails to meet the Service Level
corresponding to Monthly Abnormal Disconnect Percentage for
each of [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. In the event that
Vendor fails to meet the Service Level corresponding to
Monthly Abnormal Disconnect Percentage by [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment] above [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] for each
of[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. Vendor shall be
relieved of its obligation to meet the Service Level
applicable to Monthly Abnormal Disconnect Percentage to the
extent that such failure is caused by [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] Average over the same period.
(h) Packet Loss Percentage.
----------------------
(i) "Packet Loss Percentage" means, for a calendar month, the
quantity calculated as (A) the aggregate number of data
packets dropped from the Vendor Network between the Ethernet
interface on an access device and the Vendor-managed
Customer hub routers during such month, divided by (B) the
aggregate number of all data packets introduced into the
Vendor Network between the Ethernet interface on an access
device and the Vendor-managed Customer hub routers during
such calendar month, the result expressed as a percentage.
(ii) The Service Level applicable to Packet Loss Percentage shall
be as follows: Packet Loss Percentage for each calendar
month of the Term shall be less than [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] percent ([*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]%) for such
month. Vendor's performance relative to such
Schedule B - Page 22
CONFIDENTIAL TREATMENT REQUESTED
Service Level shall be reported by Customer on a monthly
basis for each calendar month.
(j) Time to Respond and Time to Restore Service Levels.
--------------------------------------------------
(i) "Time to Respond" means the elapsed time between (i) the
time that Customer reports a problem to Vendor with respect
to the Services (or the time that Vendor otherwise becomes
aware of such a problem), until (ii) the moment that Vendor
notifies appropriate Customer personnel of such problem and
of those efforts being undertaken by Vendor to resolve such
problem. "Mean Time to Respond" for a calendar month shall
mean the average of all times corresponding to Time To
Respond during such calendar month. "Time to Restore" means
the elapsed time between (i) the time that Customer reports
a problem to Vendor with respect to the Services (or the
time that Vendor otherwise becomes aware of such a problem),
until (ii) the moment that the affected Services are
restored to normal operations in accordance with applicable
Service Levels, Acceptance Criteria and Specifications.
"Mean Time to Restore" for a calendar month shall mean the
average of all times corresponding to Time To Repair during
such calendar month. "Mean Maximum Time to Restore" for a
calendar month shall mean the [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment]. Vendor will not close any problem ticket
associated with a particular problem until the appropriate
Customer representative and a Vendor representative agree
that such problem ticket may be closed.
(ii) The Service Levels applicable to Mean Time to Respond and
Mean Time to Restore shall be as follows:
(1) Mean Time to Respond for each calendar month shall be
less than [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] minutes;
(2) Mean Time to Restore for each calendar month shall be
less than or equal to [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
minutes;
(3) Mean Maximum Time to Restore for each calendar month
shall be less than [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
hours.
Vendor's performance relative to the foregoing Service
Levels shall be reported by Vendor on a monthly basis for
each calendar month.
7.2. Failure to Perform.
------------------
If Vendor fails to meet any Service Level, Vendor shall (a) promptly
notify Customer of such failure (unless Customer first discovered and
notified Vendor of such failure), (b) investigate and report on the
causes of the failure; (c) advise Customer, as and to the extent
requested by Customer, of the status of remedial efforts being
undertaken with
Schedule B - Page 23
CONFIDENTIAL TREATMENT REQUESTED
respect to such failure; (d) take commercially reasonable efforts to
correct the failure, and begin meeting the Service Levels; and (e)
take appropriate preventive measures to minimize the likelihood of the
failure recurring. Notwithstanding the foregoing, Vendor's failure to
use commercially reasonable efforts to meet or correct Service Level
failures with respect to the [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] in and of itself
shall not constitute a breach of the Agreement. With respect to those
Service Levels for which Vendor's performance is measured against
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment], Vendor shall not be deemed in breach of such
Service Levels to the extent that Customer uses [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment].
7.3. Reporting.
---------
Vendor shall provide Customer with the following reports, in a
detailed format reasonably satisfactory to Customer:
(a) Usage Reports, including:
(i) Daily reports on [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]
(ii) Daily reports on percentage of ineffective calls; and
(b) Daily reports on [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
In addition, upon Customer's request, Vendor shall provide Customer
with [*Material Omitted and Separately Filed Under an Application for
Confidential Treatment]. In addition, for all other components of the
Vendor Network that are utilized to provide Dial-Up Access Services
under this Schedule B, Vendor shall provide to Customer a daily report
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment]. In the event of a Network outage, Vendor
will work cooperatively with Customer to share additional [*Material
Omitted and Separately Filed Under an Application for Confidential
Treatment] which may be pertinent to the analysis and resolution of
any such outage.
7.4. Meetings.
--------
Vendor and Customer shall hold weekly meetings at Customer's site or
via telephone conference call (unless otherwise requested by Customer)
to assess Vendor's performance under this Schedule B. During
emergency situations, meetings will be held at least on a daily basis.
7.5. Periodic Review of Service Levels.
---------------------------------
As requested by Customer or Vendor, Customer and Vendor shall review
the Service Levels described in this Schedule B and shall make
mutually agreed-upon adjustments to them as appropriate to reflect
performance capabilities associated with advances in the technology
and methods used to provide the Dial-Up Access Services.
Schedule B - Page 24
CONFIDENTIAL TREATMENT REQUESTED
8. PRICING
This Article 8 describes the methodologies for calculating the charges
under this Schedule B and relating pricing terms and conditions. The
charges calculated pursuant to this Schedule B, and any other charges
expressly set forth in the Master Agreement, shall fully compensate Vendor
for the provision of the Dial-Up Access Services.
8.1. Pricing for Dial-Up Access Services.
-----------------------------------
(a) Monthly EDAP Charge.
-------------------
(i) The monthly recurring charge (such charge, as may be
adjusted pursuant to the Agreement, the "Monthly EDAP
Charge") for one (1) Dedicated Dial-Up Access Port
corresponding to the first [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
Dedicated Dial-Up Access Ports of the Dial-Up Purchase
Commitment only (such port an "Existing Dedicated Dial-Up
Access Port") shall be set at the Existing DAP Market Price,
as set forth in Exhibit B-2, and shall be automatically
reduced according to the schedule set forth in Exhibit B-2.
In addition, the Monthly EDAP Charge may be further reduced
as provided in this Article 8 of this Schedule B. The
Parties acknowledge that the Monthly EDAP Charge described
in the first sentence of Article 2 of Exhibit B-2 shall
apply retroactively to October 1, 1999, and Vendor shall
provide Customer with a refund of any amounts paid for the
corresponding Dial-Up Access Services in excess of such
price under the Original Agreement.
(ii) Following a review of the applicable leases (but in no event
later than 45 days after the Effective Date), Vendor shall
inform Customer as to the extent to which it desires to (1)
assume the operating leases for certain modems, racks and
cables for the Existing Dedicated Dial-Up Access Ports
leased by Customer (collectively the "Leased Items"), and
(2) purchase certain modems, racks and cables for the
Existing Dedicated Dial-Up Access Ports owned by Customer
(collectively, the "Owned Items"). To the extent that the
Parties agree, the Parties shall enter into an amendment
under which (A) Vendor shall assume the operating leases for
the Leased Items, subject to the terms of such leases and to
the rights of third parties in such Leased Items, and (B)
Customer shall pass to Vendor title for the Owned Items
pursuant to economic terms to be mutually agreed upon,
subject to Customer's rights in such equipment. Such
amendment shall reflect that, with respect to Vendor's
assumption of the leases of the Leased Items, Customer will,
on a pass-through expense basis (i.e., without markup), pay
leasing costs as and when required under the terms of the
leases for the Leased Items. Such amendment shall also
reflect that any cost savings achieved by Vendor with
respect to leasing and capital costs for the Leased Items
will be shared equally between Customer and Vendor. If
Vendor decides not to assume the leases for the Leased
Items, the rights and obligations of the Parties with
respect to the Leased Items shall be as described in the
Original Agreement. If Vendor decides not to purchase the
Owned
Schedule B - Page 25
CONFIDENTIAL TREATMENT REQUESTED
Items, Customer shall continue to bear the actual
capital costs of the Owned Items in accordance with the
terms of the Original Agreement.
(b) Monthly DAP Charge.
------------------
The monthly recurring charge (such charge, as may be reduced
pursuant to the Agreement, the "Monthly DAP Charge") for one (1)
Dedicated Dial-Up Access Port other than an Existing Dedicated
Dial-Up Access Port shall be set at the DAP Initial Market Price,
as set forth in Exhibit B-2, and shall be automatically reduced
according to the schedule set forth in Exhibit B-2. In addition,
the Monthly DAP Charge may be further reduced as provided in this
Article 8 of Schedule B. The Monthly DAP Charge shall fully
compensate Vendor for the provision of the corresponding Dial-Up
Access Services (including all capital costs of providing the
corresponding Dial-Up Access Services (excluding hub routers
resident at Customer's data centers)).
(c) Additional Bandwidth.
--------------------
For each additional [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] bps of average
bandwidth available at peak per user outbound (and [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] bps inbound) per Dedicated Dial-Up Access
Port that Customer requests Vendor to provide hereunder, Vendor
shall provide such additional bandwidth at a charge to Customer
that is no greater than [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] ($[*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment]) per Dedicated Dial-Up Access Port per
month for each additional [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] bps of such
bandwidth.
8.2. Decommissioning of Dedicated Dial-Up Access Ports.
-------------------------------------------------
(a) Beginning [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment], Customer may
decommission Dedicated Dial-Up Access Ports that either
contribute to the satisfaction of the Dial-Up Purchase Commitment
or to Customer's satisfaction of its obligation described in
Section 2.8(c)(ii) of this Schedule B, without liability, subject
to the following:
(i) Customer will provide one hundred twenty (120) days prior
written notice of the calling areas in which Dedicated
Dial-Up Access Ports are to be decommissioned, as well as
the associated quantities of Dedicated Dial-Up Access Ports
to be decommissioned in each such area;
(ii) the Vendor Decom Share for a calendar quarter shall not (in
the cumulative and not more than a de minimis amount)
exceed the Other Vendors' Decom Share for such quarter;
(iii) the decommissioning of Dedicated Dial-Up Access Ports
pursuant to this Subsection (a) shall not materially change
Customer's proportional
Schedule B - Page 26
CONFIDENTIAL TREATMENT REQUESTED
distribution of Dedicated Dial-Up Access Ports across
Existing Calling Areas; and
(iv) if the decommissioning of Dedicated Dial-Up Access Ports
pursuant to this Subsection (a) causes the aggregate number
of Dial-Up Access Ports to fall below [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] of the number of Dedicated Dial-Up Access Ports
comprising the Dial-Up Purchase Commitment, then Vendor may,
upon six months' prior notice to Customer, [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment], Vendor shall provide Transition
Assistance pursuant to Section 13.4 of the Master Agreement.
(b) Customer may decommission any Dedicated Dial-Up Access Ports
other than those to which Subsection (a) of this Section applies
(including (A) any Dedicated Dial-Up Access Ports ordered at any
time for delivery after [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment], and (B) any
Dedicated Dial-Up Access Ports ordered in excess of those
necessary to satisfy the Dial-Up Purchase Commitment), without
liability and as of a decommissioning date specified by Customer
upon one hundred twenty (120) days' prior written notice to
Vendor; provided, however, that Customer may decommission
Dedicated Dial-Up Access Ports pursuant this Subsection only to
the extent that the first day of the month in which Final
Acceptance occurred for such ports is at least twelve (12) months
prior to the decommissioning date requested by Customer pursuant
to this Subsection (b).
(c) Customer shall not be responsible for any charges for a Dedicated
Dial-Up Access Port to the extent such charges correspond to the
time after the requested decommissioning date of which Customer
provides Vendor with notification pursuant to this Schedule B.
8.3. Adjustments to Pricing for Dial-Up Access Services.
--------------------------------------------------
(a) New Dial-Up Market Price.
------------------------
(i) Definitions.
(1) "New Dial-Up Market Price" for any Dial-Up Access shall
mean the price [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] to
Customer by any Dial-Up Market Vendor for Comparable
Dial-Up Services. To calculate the New Dial-Up Market
Price pursuant to this Subsection, the price for
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] shall be
reasonably adjusted to reflect the difference between
the [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] that (A) do not
include [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment], (B) do not
include [*Material Omitted and Separately Filed Under
Schedule B - Page 27
CONFIDENTIAL TREATMENT REQUESTED
an Application for Confidential Treatment], or (C) do
not include[*Material Omitted and Separately Filed
Under an Application for Confidential Treatment].
(2) "Dial-Up Market Vendor" shall mean a vendor (not
including a Special Affiliate) that at any time
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. For the
purpose of this Subsection, Special Affiliate shall
only be deemed to include Subsections (i) and (ii) of
the definition of "Special Affiliate" in Schedule A.
(ii) Notification Process.
Customer may provide Vendor with notice at any time of a New
Dial-Up Market Price (each such notice, a "New Dial-Up
Market Price Notice" and the date of such notice as
determined pursuant to Section 16.4 of the Master Agreement,
the "New Dial-Up Market Price Notice Date"). Each New Dial-
Up Market Price Notice will contain (A) the New Dial-Up
Market Price calculation and [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment], and (B) [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]. No later
than thirty (30) calendar days after the New Dial-Up Market
Price Notice Date corresponding to a New Dial-Up Market
Price Notice, Vendor will respond to Customer by notifying
Customer in writing whether it will:
(1) accept the validity of the proposed New Dial-Up Market
Price and reduce prices to the applicable New Dial-Up
Market Price in accordance with Subsection (iii) of
this Subsection (a),
(2) Price and decline to reduce prices to the New Dial-Up
Market Price in accordance with the corresponding New
Dial-Up Market Price Notice, or
(3) dispute the validity of the proposed New Dial-Up Market
Price.
(each a "New Dial-Up Market Price Response"). Vendor shall
not unreasonably dispute the validity of a proposed New
Dial-Up Market Price.
(iii) Reduction Process.
In the event Vendor accepts a proposed New Dial-Up Market
Price pursuant to clause (1) of Subsection (ii) of this
Subsection (a), then:
(1) Effective as of the Incremental New Ports MP Change
Date, the Monthly DAP Charge for [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] Date will be reduced to the New Dial-Up
Market Price set forth in the corresponding New Dial-Up
Market Price Notice, and
Schedule B - Page 28
CONFIDENTIAL TREATMENT REQUESTED
with respect to such New Ports, Vendor will, if
requested by Customer, [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] corresponding to such New Dial-Up Market
Price.
(2) Effective as of the All New Ports MP Change Date, the
Monthly DAP Charge [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
will be reduced to the New Dial-Up Market Price set
forth in the [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment, and
with respect to such New Ports, Vendor will, if
requested by Customer, [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] corresponding to such New Dial-Up Market
Price.
(3) Effective as of the Base Port MP Change Date, the
Monthly EDAP Charge [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
will be reduced to the New Dial-Up Market Price set
forth in the corresponding New Dial-Up Market Price
Notice, and with respect to such New Ports and Existing
Dial-Up Access Ports, Vendor will, if requested by
Customer, [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment]
corresponding to such New Dial-Up Market Price.
Notwithstanding the foregoing:
(4) If Vendor accepts the validity of a proposed New Dial-
Up Market Price and reduces prices to the applicable
New Dial-Up Access Market Price in a given calendar
year, then Vendor shall not be obligated to provide
Customer with any additional New Dial-Up Market Price
Response with respect to any New Dial-Up Market Price
Notice for which the corresponding New Dial-Up Market
Price Effective Date occurs in such calendar year.
(5) Vendor shall not be obligated to reduce the Monthly DAP
Charge or the Monthly EDAP Charge, as the case may be,
at a rate that is [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment].
For example, if the [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment],
then Vendor will only be obligated to reduce the
Monthly DAP Charge or Monthly EDAP Charge, as the case
may be, for [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]. If
during the following month [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment], then Vendor will be obligated to reduce the
Monthly DAP Charge or Monthly EDAP Charge, as the case
may be, [*Material Omitted and
Schedule B - Page 29
CONFIDENTIAL TREATMENT REQUESTED
Separately Filed Under an Application for Confidential
Treatment].
(6) Vendor shall not be obligated to [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] corresponding to a New Dial-Up Market Price
at a rate that is [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
for Comparable Dial-Up Services relative to the
applicable Dial-Up Market Vendor Trigger, as measured
monthly.
(7) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(iv) Decommissioning Process.
If Vendor declines to reduce the Monthly DAP Charge or the
Monthly EDAP Charge to the New Dial-Up Market Price pursuant
to clause (2) of Subsection (ii) of this Subsection (a),
then Customer may, in its sole discretion, do either or both
of the following: (A) terminate the Dial-Up Purchase
Commitment, and (B) decommission Dedicated Dial-Up Access
Ports, subject to the following restrictions:
(1) Customer will provide [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
days prior written notice of the calling areas in which
Dedicated Dial-Up Access Ports are to be
decommissioned, as well as the associated quantities of
Dedicated Dial-Up Access Ports to be decommissioned in
each such area;
(2) Customer may only decommission a number of Dedicated
Dial-Up Access Ports no greater than the number of
Dedicated Dial-Up Access Ports that [*Material Omitted
and Separately Filed Under an Application for
Confidential Treatment].
(3) The effective date of decommission applicable to a
Existing Dial-Up Access Port shall not be earlier than
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(4) The decommissioning of Dedicated Dial-Up Access Ports
pursuant to this Subsection (iv) shall result in the
same approximate weighted distribution of Dedicated
Dial-Up Access Ports across Existing Calling Areas.
(5) The right to decommission arising from any particular
New Dial-Up Market Price Notice shall cease, on a
prospective basis if and when Vendor delivers a New
Dial-Up Market Price Response, in response to a later
New Dial-Up Market Price Notice, accepting a proposed
New Dial-Up Market Price pursuant to clause (1) of
Subsection (ii) of this Subsection (a).
Schedule B - Page 30
CONFIDENTIAL TREATMENT REQUESTED
(v) Dispute Resolution Process.
If Vendor reasonably disputes the validity of the New Dial-
Up Market Price pursuant to clause (3) of Subsection (ii) of
this Subsection (a), then each Party shall promptly escalate
to the senior-executive level all efforts by such Party to
resolve such dispute.
(vi) Example.
For example:
(1) If Customer provides Vendor with a New Dial-Up Market
Price Notice for which the New Dial-Up Market Price
Notice Date is [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment], and
Vendor accepts the proposed New Dial-Up Market Price
pursuant to clause (A) of Subsection (ii) of this
Subsection (a), then (x) the New Dial-Up Market Price
Effective Date would be [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment], and (y) pursuant to Schedule A, the
Incremental New Ports MP Change Date would be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment], the All New
Ports MP Change Date would be [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment], and the Base Port MP Change Date would be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(2) Pursuant to Subsection (iii)(1) of this Subsection (a),
and except as otherwise required pursuant to the
restrictions described in Subsections (iii)(5),
(iii)(6), and (iii)(7) of this Subsection (a), as of
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment], the Monthly
DAP Charge for [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] would
be reduced to the New Dial-Up Market Price set forth in
the corresponding New Dial-Up Market Price Notice, and
with respect to such [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment],
Vendor would, if requested by Customer, [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] peak provided for the
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] corresponding
to such New Dial-Up Market Price. Pursuant to
Subsection (iii)(4) of this Subsection (a), Vendor
would not be obligated to provide Customer with any
additional New Dial-Up Market Price Response with
respect to any New Dial-Up Market Price Notice for
which the corresponding New Dial-Up Market Price
Effective Date occurs in [*Material Omitted and
Schedule B - Page 31
CONFIDENTIAL TREATMENT REQUESTED
Separately Filed Under an Application for Confidential
Treatment].
(3) Pursuant to Subsection (iii)(2) of this Subsection (a),
as of [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment], the Monthly
DAP Charge for [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] would
be reduced to the New Dial-Up Market Price set forth in
the corresponding New Dial-Up Market Price Notice, and
with respect to such [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment],
Vendor would, if requested by Customer, [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] corresponding to such New Dial-
Up Market Price. Such reduction would not be
inconsistent with Subsection (iii)(4) of this
Subsection (a), because such reduction was made
pursuant to the same New Dial-Up Market Price Notice
that reduced the Monthly DAP Charge pursuant to
Subsection (2) of this Subsection (vi).
(4) Pursuant to Subsection (iii)(3) of this Subsection (a),
as of [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] will be reduced
to the New Dial-Up Market Price set forth in the
corresponding New Dial-Up Market Price Notice, and with
respect to such all [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment],
Vendor will, if requested by Customer, [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] corresponding to such New Dial-
Up Market Price.
(5) If Customer provides Vendor with another New Dial-Up
Market Price Notice for which the New Dial-Up Market
Price Notice Date is [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment],
Vendor would be obligated to provide Customer with a
New Dial-Up Market Price Response pursuant to
Subsection (ii) of this Subsection. Such obligation
would not be contrary to Subsection (iii)(4) of this
Subsection (a), because the New Dial-Up Market Price
Effective Date for such New Dial-Up Market Price Notice
would be [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment]. If Vendor
accepts such proposed New Dial-Up Market Price pursuant
to clause (1) of Subsection (ii) of this Subsection
(a), then effective [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment],
the Monthly DAP Charge for [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] would be reduced to such New Dial-Up Market
Price, and with respect to such
Schedule B - Page 32
CONFIDENTIAL TREATMENT REQUESTED
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment], Vendor would,
if requested by Customer, [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] corresponding to such New Dial-Up Market
Price. Further, pursuant to Subsection (iii)(3) of this
Subsection (a), as of [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment],
the Monthly EDAP Charge will be reduced to such New
Dial-Up Market Price, and with respect to [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment], Vendor will, if requested by
Customer, [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment]
corresponding to such New Dial-Up Market Price.
(b) Most-Favored Customer.
---------------------
(i) As long as the aggregate number of Dial-Up Access Ports then
being purchased or ordered by Customer exceeds that of any
other customer of Vendor, Vendor shall not provide dial-up
access services that are Comparable Dial-Up Services to any
other Applicable DUP Purchaser (1) at prices that are lower
than those charged or available to Customer under this
Agreement, [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment], or (2) pursuant to
terms and conditions more favorable to such Applicable DUP
Purchaser than the terms and conditions of this Schedule B
and Master Agreement, in each case, without first offering
such lower price and other more favorable terms and
conditions to Customer, within thirty (30) calendar days of
contractually committing to such price and other terms with
another customer. As of the Effective Date, Vendor
acknowledges that the aggregate number of Dial-Up Access
Ports being purchased or ordered by Customer exceeds that of
any other customer of Vendor. In the event that the
aggregate number of Dial-Up Access Ports being purchased or
ordered by Customer at any time during the Term does not
exceed that of any other customer of Vendor, Vendor shall
provide Customer with written notification of such event
within thirty (30) calendar days of the occurrence of such
event. For the purposes of this Subsection, prices "charged
or available to Customer hereunder" for Dedicated Dial-Up
Access Ports shall be determined by [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment]. "Applicable DUP Purchaser" shall mean any party
(including any Vendor Affiliate that resells Dial-Up Access
purchased from Vendor or another Vendor Affiliate) that is
obligated to purchase, that actually purchases, or that
seeks to purchase from Vendor or its Affiliates Dial-Up
Access at any time equivalent to more than [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] Dial-Up Access Ports.
(ii) As long as the aggregate number of Dial-Up Access Ports then
being purchased or ordered by Customer exceeds that of any
other customer of
Schedule B - Page 33
CONFIDENTIAL TREATMENT REQUESTED
Vendor, to the extent that Vendor provides dial-up access
services that are not [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment, then
Vendor shall offer, on a quarterly basis, to provide to
Customer such dial-up access services at the prices charged
or available to, and upon the terms and conditions
applicable to, [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment]; provided,
however, that if Customer's service requirements would
necessitate changes to such terms and conditions, the
Parties shall work in good faith to adjust such terms and
conditions as mutually agreed to satisfy such requirements.
To the extent that Customer accepts such offer of dial-up
access services that are not [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] from Vendor, Vendor shall provide such services
as ordered by Customer pursuant to a separate Schedule to
the Master Agreement, such services shall be deemed Services
to which the Master Agreement applies, such services shall
be subject to most-favored customer terms and conditions
substantially similar to those set forth in this Subsection
(b), and Customer may [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]. In
the event of [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment], Customer shall
have no further liability to Vendor with respect to such
portion of the Dial-Up Purchase Commitment replaced pursuant
to this Subsection (ii).
(iii) As long as the aggregate number of Dial-Up Access Ports then
being purchased or ordered by Customer exceeds that of any
other customer of Vendor, Vendor shall offer to Customer,
Comparable Dial-Up Services provided or offered by any
Vendor Affiliate to an Applicable DUP Purchaser (1) at
prices that are equal to or lower than those charged or
available to such Applicable DUP Purchaser for such
services, for a commitment by such Applicable DUP Purchaser
to order or purchase volumes, or for actual orders or
purchases of volumes, that are in the aggregate equal to or
less than the equivalent volumes that Customer is obligated
to purchase under the Agreement, and (2) pursuant to terms
and conditions that are at least as favorable or more
favorable to Customer than the terms and conditions
applicable to or available to an Applicable DUP Purchaser.
(iv) For any price proposal made by Vendor to Customer at any
time during the Term, Vendor shall in good faith represent
to Customer in writing whether or not such proposal is being
made for reasons that include Vendor's belief that an
adjustment may be required pursuant to this Subsection (b).
(v) Customer may audit Vendor's compliance with this Subsection
(b) pursuant to Article 10 of the Master Agreement. In the
event that Vendor fails to comply with this Subsection (b)
(e.g., fails to adjust pricing in accordance with this
Subsection (b)), then Vendor shall rebate to Customer, with
respect to each Dedicated Dial-Up Access Port
Schedule B - Page 34
CONFIDENTIAL TREATMENT REQUESTED
purchased hereunder, the difference between (1) the price
actually paid by Customer hereunder, and (2) the lower price
provided to the third party purchasing the Comparable Dial-
Up Services from Vendor, retroactive to the date Vendor
provided the lower price to such third party, together with
interest computed in the same manner as described in Section
9.2 of the Master Agreement on such rebated amounts from
such date.
(c) Regulatory Changes Affecting Pricing.
------------------------------------
In the event that any change in applicable Federal regulations
results in a significant, demonstrable change in Vendor's costs
to provide the Dial-Up Access Services, then:
(i) in the case of a cost increase, Vendor may pass such
applicable cost increase along to Customer on an Out-of-
Pocket Expense basis so long as such increase is passed
along to all of Vendor's other Dial-Up Access customers to
which such costs are not prohibited from being passed;
provided, however, Customer may elect, with 120 days notice,
to decommission in accordance with Subsection (a)(iv) of
this Section any of the Dial-Up Access Ports affected by
such Federal regulatory cost increase (however, Customer
shall not be required to pay such cost increase during the
120-day decommissioning notice period); provided further,
however, that (A) the decommissioning of Dedicated Dial-Up
Access Ports across the Vendor Network pursuant to this
Subsection shall be in proportion to the approximate
weighted distribution of Dedicated Dial-Up Access Ports
across Existing Calling Areas, and (B) the date and,
proportional rate restrictions on decommissioning in
Subsection (a)(iv) of this Section shall not apply with
respect to decommissioning under this Section; and
(ii) in the event of a cost decrease, Vendor shall pass such
decrease to Customer.
In connection with any such increase or decrease, Vendor shall
identify the Dial-Up Access Ports affected by such regulatory
cost change and the amount of the applicable change to the
Monthly EDAP Charge or Monthly DAP Charge for such affected Dial-
Up Access Ports. Any such regulatory cost change passed -through
to Customer shall take effect as of the first day of the calendar
month immediately following delivery of the regulatory cost
change notice and shall continue in effect until the date on
which the next New Dial-Up Market Price becomes applicable to
such affected Dial-Up Access Ports.
8.4. Normalization Methodology And Conversion Of Services.
----------------------------------------------------
(a) Normalization Methodology.
-------------------------
For purposes of Sections 2.8(c) and 8.3(b)(ii) of this Schedule
B, and for purposes of the definitions of "Other Vendors' Decom
Share" and "Vendor's Decom Share" set forth in Schedule A, in
order to normalize a commitment to order or purchase dial-up
access provided on a usage basis with a commitment to
Schedule B - Page 35
CONFIDENTIAL TREATMENT REQUESTED
order or purchase Dedicated Dial-Up Access Ports provided under
this Agreement, a commitment to order or purchase [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] shall be deemed equivalent to a
commitment to purchase one (1) Dedicated Dial-Up Access Port for
such month (such conversion methodology collectively the
"Normalization Methodology").
(b) Conversion of Services.
----------------------
Upon Customer's request, Vendor shall reasonably and in good
faith discuss with Customer without further obligation the
modification of the pricing methodologies applicable to the Dial-
Up Access Services that may be purchased by Customer under this
Schedule B as necessary to convert certain Dial-Up Access
Services to hourly or similar usage based pricing.
8.5. Technological Change.
--------------------
Vendor acknowledges that quality of the Dial-Up Access Services is
critical to the satisfaction of the users of Customer's services and
will work to minimize any quality issues associated with the rapid
implementation of new service technologies.
(a) Changes in Dial-Up Access Platform.
----------------------------------
(i) In the event that Vendor determines that an access platform
different from that which is used as of the Effective Date
to provide Dedicated Dial-Up Access Ports to Customer
represents a superior value, or otherwise may make such
platform desirable, Vendor may utilize such different
access technology; provided, however, that:
(ii) Vendor shall provide Customer with notification of such
different access technology upon Vendor's determination to
utilize such different access technology, which notice
shall be provided no less than sixty (60) days' before
deploying such change;
(iii) such different access technology is not utilized in
conjunction with then-existing access technology for any
given telephone number for more than forty-five (45) days;
and
(iv) if such different access technology does not provide (or
enable Vendor to provide) any reports required under
Section 6.3(o) or 7.3(a) of this Schedule B other than the
reports described in Section 7.3(a)(i) of this Schedule B,
then:
(1) Vendor may deploy not more than [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] such Dedicated Dial-Up Access Ports (in the
aggregate for all such different access technologies
that do not provide such reports) (each of such ports
a "Reportless Port");
(2) with respect to any Reportless Port, Vendor shall use
all commercially reasonable efforts to provide such
reports as soon
Schedule B - Page 36
CONFIDENTIAL TREATMENT REQUESTED
as practicable, but in no event later than [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] after acceptance of such
Reportless Port; and
(3) if Vendor is unable to provide such reports for a
Reportless Port for [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
days of acceptance of such Reportless Port, then Vendor
shall immediately remove from service any such
Reportless Port.
In no event shall Vendor provide any Dedicated Dial-Up Access
Ports that do not provide the reports described in Section
7.3(a)(i) of this Schedule B. Upon the request of Customer,
Vendor shall identify which access platform is then being
utilized for each telephone number used to provide Dedicated
Dial-Up Access Ports.
(b) Technology Briefing.
-------------------
Vendor will provide Customer with a semi-annual technology
briefing detailing Vendor's near- and medium- term plans for the
introduction of new technology and new Internet-related services.
Information exchanged by the Parties in conjunction with such
briefing shall be deemed Confidential Information for the
purposes of the Agreement.
9. SPECIFICATIONS AND ACCEPTANCE CRITERIA
9.1. Specifications.
--------------
Dedicated Dial-Up Access Ports provided hereunder shall fully conform
with the following Specifications (collectively, the "Dial-Up Access
Specifications"):
(a) By [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment], Vendor will provision end-to-end
bandwidth such that average bandwidth available per user at peak
will be [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(b) The Dial-Up Access Services shall fully support and be in
conformance with Customer's access methods, access technology,
hub architecture, and other access methods that may become
available to Customer from time to time. Access methods shall
include:
(i) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(ii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
Schedule B - Page 37
CONFIDENTIAL TREATMENT REQUESTED
(iv) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(v) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(vi) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(vii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(viii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] (including those
provided by Customer and any other Customer-offered
service) as requested by Customer at [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment], provided that the cost of [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment], subject to prior agreement by Vendor and
Customer on how routing is implemented. Interconnect costs
of service to [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] will be
treated as an [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] until the
earlier of [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment], and [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] the date on which [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment]; provided however that any such
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] charged to
Customer by Vendor will be reduced on a monthly basis by
an amount equal to the [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment];
(ix) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment], provided that the
cost of user's [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment], subject
to prior agreement by Vendor and Customer on how routing
is implemented; and
(x) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment], provided that the
cost [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] does not exceed
the cost of [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment], subject to
prior agreement by Vendor and Customer on how routing is
implemented.
(c) Vendor, in its network design and topology, shall comply with
IETF approved and adopted standards applicable to the access
methods described in Subsection (b) of this Section.
Schedule B - Page 38
CONFIDENTIAL TREATMENT REQUESTED
9.2. Acceptance Criteria.
-------------------
The following Acceptance Criteria shall apply to Dedicated Dial-Up
Access Ports:
Newly activated Dedicated Dial-Up Access Ports will fail Dial-Up
Acceptance Testing if any of the following thresholds is met:
(a) greater than [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(b) greater than [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(c) greater than [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]
provided, however, that notwithstanding the foregoing, [*Material
Omitted and Separately Filed Under an Application for Confidential
Treatment].The Acceptance Test Period will be [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment].
Customer will not [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
Schedule B - Page 39
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B-1
Dial-Up Purchase Commitment
1. CONFIDENTIALITY
This Exhibit specifies the Monthly Targets for Customer's Dial-Up Purchase
Commitments pursuant to Schedule B. The Parties specifically acknowledge
that the purchase commitment information contained herein is highly
confidential and that its disclosure to the public or third parties could
cause significant harm to either Customer or Vendor or both.
2. DIAL-UP PURCHASE COMMITMENT
(a) The [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] Target for the
following [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] shall be as follows:
(b) For [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] Target shall be an
amount determined [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment];
(c) For [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] Target shall be an
amount determined [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment];
(d) For [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] Target shall be an
amount determined [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment]; and
(e) For[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment] Target shall [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] (except as otherwise mutually agreed upon by the
Parties).
Exhibit B-1 - Page 1
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B-2
Prices for Dial-Up Access Services
1. CONFIDENTIALITY
This Exhibit specifies the prices for Dial-Up Access Services provided
pursuant to the Master Agreement and Schedule B. The Parties specifically
acknowledge that the pricing information contained herein is highly
confidential and that its disclosure to the public or third parties could
cause significant harm to either Customer or Vendor or both.
2. MARKET PRICE FOR EXISTING DIAL-UP ACCESS PORTS
The Monthly EDAP Charge shall be set at [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment], which price,
effective from [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment] through [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment], shall be [*Material
Omitted and Separately Filed Under an Application for Confidential
Treatment] dollars ($[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]). [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]:
(a) From [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] through [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] shall be [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment];
(b) From [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] through [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] shall be [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment];
(c) From [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] through [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment shall be [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment].
Notwithstanding the foregoing, [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] may be [*Material Omitted
and Separately Filed Under an Application for Confidential Treatment (A)
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment] (B) t[*Material Omitted and Separately Filed Under
an Application for Confidential Treatment (2) [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment].
3. MARKET PRICE FOR DIAL-UP ACCESS PORTS
Exhibit B-2 - Page 1
CONFIDENTIAL TREATMENT REQUESTED
The Monthly DAP Charge shall be set at [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment], which price,
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment], shall be [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment]. From
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment]. Notwithstanding the foregoing, [*Material Omitted
and Separately Filed Under an Application for Confidential Treatment].
Exhibit B-2 - Page 2
CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE C
Broadband Backhaul Services, Service Levels, Pricing and Other Terms
1. TERM
The term of this Schedule C shall begin on the Effective Date and shall
expire on December 31, 2004, unless terminated earlier in accordance with
the Agreement; provided that Customer may, with the consent of Vendor,
renew such term for three (3) additional one (1) year periods by giving
Vendor at least thirty (30) days notice prior to the end of the applicable
term or renewal period (such period, as terminated earlier or so extended,
the "Broadband Term").
2. CONSTRUCTION OF AGREEMENT WITH RESPECT TO NON-XDSL BROADBAND SERVICES
(a) Although this Agreement governs Broadband Backhaul Services for
both xDSL and other broadband services, the Parties acknowledge
that the particular rights, duties and obligations set forth
herein, including service levels, delivery of service, failure
to meet service levels, failure to deliver service, the
Broadband Specifications, and other provisions, and the impact
of such matters on related purchase commitments as well as
other rights and remedies, have been worked out in the
particular context of xDSL broadband services. Therefore,
although the rights, duties and obligations herein apply to
broadband services other than xDSL, the Parties agree to
negotiate in good faith how certain provisions herein that are
stated in terms particularly relevant to xDSL broadband
services will apply in the context of broadband services other
than xDSL.
(b) The Parties acknowledge and agree that with respect to certain
Broadband Backhaul Services used to provide any non-xDSL or
non-cable broadband service with [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment utilized for an xDSL or cable broadband service and
for which delivery of such non-xDSL or non-cable service
[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment], the Other Broadband Purchase
Commitment and the pricing set forth in Exhibit C-2 of this
Schedule C shall each be adjusted, as mutually agreed, to
reflect an appropriate methodology; provided, however, that (i)
with respect to the adjustment to the Other Broadband Purchase
Commitment, such adjustment shall only be made to reflect such
appropriate methodology, and the commitment [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment] shall not be increased or reduced but shall be
applied to the adjusted methodology, and (ii) Section 7.2 of
this Schedule C shall continue to apply to the Other Broadband
Purchase Commitment and pricing, as adjusted.
3. ORDERING AND ACCEPTANCE CRITERIA
3.1. Ordering.
--------
Schedule C - Page 1
CONFIDENTIAL TREATMENT REQUESTED
(a) Forecasts of Customer's Expected Broadband Backhaul Services
------------------------------------------------------------
Needs in New LATAs. At the start of every calendar quarter,
------------------
Customer will provide Vendor with a non-binding forecast that
sets forth those New LATAs in which Customer expects it will
need Broadband Backhaul Services over the next three (3)
calendar quarters.
(b) Ordering Broadband Backhaul Services in Existing LATAs.
------------------------------------------------------
The Parties shall mutually agree upon the standards and
procedures for ordering Broadband Backhaul Services in Existing
LATAs (including (i) scheduling procedures, timelines,
performance metrics and remedies, (ii) the ongoing sharing of
information back and forth between the Parties as appropriate
or necessary to maximize efficiencies and minimize provisioning
turnarounds times and (iii) such other issues as the Parties
may mutually agree). The Parties specifically agree that a
principal objective of the ordering process shall be to meet in
a timely manner Customer's Subscriber Line demand. The Parties
shall mutually agree upon changes from time to time to the
ordering process to facilitate the provision of Broadband
Backhaul Services to Customer.
(c) Launch of Broadband Backhaul Services in New LATAs.
--------------------------------------------------
Customer shall direct the launch of New LATAs consistent with
the timing of the local access provider and Customer becoming
ready to provide xDSL service in that LATA. Any time Customer
requests that Vendor provision Broadband Backhaul Services in a
New LATA, Customer will provide Vendor with notice (each, a
"New LATA Notice") specifying such LATA (as applicable), the
initial capacity to be provided in such LATA, and the date
Customer anticipates it will begin utilizing such Broadband
Backhaul Services in such LATA. In the event that Customer
notifies Vendor of a requested change in the specifics of a New
LATA Notice provided to Vendor, the Parties will mutually agree
upon the extent, if any, that (i) such requested change will
affect the time period specified in Section 3.2(a) of this
Schedule C, and (ii) Customer will pay Vendor Out-of-Pocket
Expenses incurred by Vendor as a result of such requested
change.
(d) Geographic Distribution. Notwithstanding the foregoing:
-----------------------
(i) the distribution of Vendor Broadband Subscriber Lines
providing xDSL broadband services will be approximately
proportional to the nationwide distribution of all of the
Aggregate DSL Subscriber Lines; and
(ii) the distribution of Vendor Broadband Subscriber Lines
providing broadband services other than xDSL will be
approximately proportional to the nationwide distribution
of all of the Aggregate Other Subscriber Lines.
For the purposes of this Subsection (d), "distribution" means
the distribution of the corresponding Vendor Broadband
Subscriber Lines across rural versus urban areas, across the
contiguous states of the United States, and between Covered
Subscriber Lines and non-Covered Subscriber Lines. In the event
that Vendor believes Customer has provided Vendor with tasking
that is inconsistent with this Subsection (d), the Parties will
mutually agree on an equitable resolution consistent with the
intent of this Section. In January and July of each calendar
Schedule C - Page 2x
CONFIDENTIAL TREATMENT REQUESTED
year, Customer shall provide Vendor with relevant information
regarding the distribution of Aggregate Subscriber Lines.
(e) Reports on Subscriber Line Activations. At least once per
--------------------------------------
week Customer will provide Vendor a report on the number of
Vendor Broadband Subscriber Lines activated from each service
provider by LATA for the previous seven (7) day period.
3.2. Delivery.
-----------
(a) General. Vendor shall provision Broadband Backhaul Services
-------
for each Existing LATA in accordance with the standards and
procedures described in Section 1(b) of this Schedule C. Vendor
shall use demonstrable good faith diligent efforts to provision
Broadband Backhaul Services for each New LATA within [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] days of its receipt of a New LATA
Notice corresponding to such New LATA.
(b) Reductions in Broadband Purchase Commitments for Delivery
---------------------------------------------------------
Failures.
--------
(i) Definitions.
(1) "Failure Percentage" means, as of a Measurement
Date, the percentage resulting from (i) [*Material
Omitted and Separately Filed Under an Application
for Confidential Treatment] that as of such
Measurement Date, Vendor has failed to [*Material
Omitted and Separately Filed Under an Application
for Confidential Treatment], divided by the (ii)
the sum of (A) [*Material Omitted and Separately
Filed Under an Application for Confidential
Treatment] plus (B) [*Material Omitted and
Separately Filed Under an Application for
Confidential Treatment].
(2) "Failure Threshold Percentages" means the
percentage set forth in the following table:
--------------------------------------------------------------------
[*Material Omitted and
Separately Filed Under an Failure Threshold
Application for Confidential Percentage
Treatment]
--------------------------------------------------------------------
[*Material Omitted and
Separately Filed Under an
Application for Confidential
Treatment]
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
Schedule C - Page 3
CONFIDENTIAL TREATMENT REQUESTED
(3) "Threshold Difference" as of a Measurement Date
equals the Failure Percentage minus the Failure
Threshold Percentage, except that the Threshold
Difference can never be less than zero.
(ii) Reduction Calculation. Reduction of the Broadband Purchase
Commitments shall be as set forth in Section 3.1 of
Exhibit C-1 of this Schedule C.
(iii) Examples. Examples of reductions in the Broadband Purchase
Commitments for delivery failures are set forth in Section
3.2 of Exhibit C-1 of this Schedule C.
(c) If Vendor fails to (i) provision Broadband Backhaul Services for
a New LATA within [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] days of its receipt of
a New LATA Notice corresponding to such New LATA, and (ii) use
demonstrable good faith diligent efforts to provision Broadband
Backhaul Services for such New LATA, then Customer may terminate
its obligations with respect to the Broadband Backhaul Purchase
Commitments. Upon Customer's request, Vendor shall provide
Customer with information and supporting documentation which
demonstrates Vendor's good faith diligent efforts to provision
such services for the applicable New LATA within [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] days of receipt of the corresponding New
LATA Notice (e.g., documents showing Vendor's ordering of
circuits in such New LATA).
3.3. Acceptance Criteria.
-------------------
(a) Prior to notifying Customer that Broadband Backhaul Services are
available in any geographic area, Vendor will conduct testing
utilizing [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] connectivity from the
service provider's [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] that validate
connectivity [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. Once connectivity
described in Subsections (i) and (ii) of this Subsection (a)
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment], Vendor will provide Customer with notice
that the Broadband Backhaul Services are ready for use by
Customer.
(b) The Broadband Backhaul Services will be deemed accepted for a
specific LATA or other relevant geographic area when the
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment] in accordance with the [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment]. Vendor will reasonably cooperate with acceptance
testing by Customer. Customer will begin providing the Broadband
Backhaul Services to its end-customers as soon as reasonably
practicable after Customer completes its acceptance testing.
3.4. Broadband Backhaul Purchase Commitments.
---------------------------------------
Schedule C - Page 4
CONFIDENTIAL TREATMENT REQUESTED
Customer agrees to purchase Broadband Backhaul Services according
to the purchase commitments set forth in Exhibit C-1 of this
Schedule C.
4. TERMINATION
4.1. Vendor Termination.
------------------
(a) In the event that the aggregate number of Vendor Broadband
Subscriber Lines:
(b) is less than [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] as of [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment];
(c) is less than [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] as of [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment];
(d) is less than [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] as of [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment]; or
(e) is less than [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] as of [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment],
Vendor may within thirty (30) calendar days of the applicable
calendar day set forth above for the corresponding Vendor
Broadband Subscriber Line threshold provide Customer with notice
of termination of this Schedule C. Such termination shall become
effective on the date specified in such notice (which date shall
be no earlier than one hundred fifty (150) calendar days
following the date of such notice and no later than the end of
the Broadband Term) unless within thirty (30) calendar days of
the date of such notice, the number of Vendor Broadband
Subscriber Lines is equal to or greater than such corresponding
threshold . In the event of such termination, (i) Customer shall
have no liability to Vendor for failure to achieve the Broadband
Purchase Commitments, and (ii) except with respect to the
provision of Transition Assistance pursuant to this Section,
Vendor shall have no liability to Customer. Upon such
termination, Vendor shall provide Transition Assistance in
accordance with Section 13.4 of the Master Agreement. Nothing in
this Section shall be deemed to affect the obligations of
Customer with respect to the Broadband Purchase Commitments so
long as Vendor has not provided Customer with a notice of
termination pursuant to this Section.
4.2. Termination of xDSL Field Trials.
--------------------------------
The xDSL field trials described in the Original Agreement for (a)
Phoenix, Arizona, (b) San Francisco, California, (c) Birmingham,
Alabama, (d) northern Virginia, and (e) Redmond, Washington shall
be terminated as of January 31, 2000; provided, however, that any
of such field trials will be continued upon the request of
Customer. In the event of any such continuation, Customer shall
reimburse Vendor for Out-of-Pocket Expenses incurred by Vendor as
a result of such continuation.
Schedule C - Page 5
CONFIDENTIAL TREATMENT REQUESTED
5. DESCRIPTION OF SERVICES
Vendor shall provide nationwide (i.e., within the forty-eight contiguous
states of the United States plus Hawaii) broadband (including xDSL, cable,
wireless and satellite technologies) backbone integration services
combining inter- and intra-LATA interconnects, aggregation equipment, co-
location, backbone transport and network management control. Such services
shall include the provision of the services described in this Article 5.
5.1. Summary and Implementation Plan.
-------------------------------
Vendor will provide program management, network engineering,
deployment, and operations support for broadband network services
integration for Customer.
(a) Program Management.
------------------
Vendor will assign a Program Management Team that will be
responsible for the management of the provision of Broadband
Backhaul Services as a whole. The Program Management Team will
serve as Vendor's primary point of contact for Customer. Such
team will coordinate the activity of all functional groups within
Vendor and will be responsible for project and financial
management of the Broadband Backhaul Services.
(b) Network Engineering.
-------------------
Vendor will provide network engineering expertise to address
technical issues that arise during the deployment of the
Broadband Backhaul Services and operation of the Vendor Network.
Vendor will be responsible for performing network design;
planning network expansion; documenting technical procedures;
resolving problems escalated by the NOC; addressing architecture,
implementation and performance issues; providing cost reduction
recommendations; and performing continuous process improvement.
(c) Deployment.
----------
Vendor will assign a Deployment Team that will consist of field
engineers and technicians. Such team will be responsible for
planning and implementing logistics, procuring equipment and
circuits, coordinating with network service providers' access
points, staging, integration, testing, shipping, and installing
equipment.
(d) Operations.
----------
Vendor's NOCs will handle the operation and maintenance of the
Vendor Network. The NOC shall be connected to Customer's central
facilities using a direct leased line to Customer's operations
center.
5.2. Design and Topology of the Vendor Network.
-----------------------------------------
Vendor will utilize its Global Network Infrastructure (GNI) backbone
for transport of broadband traffic to Customer data centers; provided
that in order to provide last mile diversity, at Customer's request,
for [*Material Omitted and Separately Filed Under
Schedule C - Page 6
CONFIDENTIAL TREATMENT REQUESTED
an Application for Confidential Treatment] of the GNI last mile
capacity to Customer's facilities, Customer and Vendor agree to
exchange local facilities, at no cost to either Party, for equivalent
bandwidth exchanged. The Parties agree to establish a mutually
acceptable bandwidth-exchanging and circuit-management process,
including with respect to co-location space, facility access, and
helping hands where both Parties have local facilities in each
geography.
(a) Equipment Configuration.
-----------------------
Vendor acknowledges that quality of the Broadband Backhaul
Services is critical to the satisfaction of the users of
Customer's services and will work to minimize any quality issues
associated with the rapid implementation of new service
technologies (other than to the extent that such quality issues
are caused by new service technologies directed by Customer).
Vendor will utilize a complement of equipment at broadband POPs.
Customer will reasonably cooperate with Vendor in the testing and
implementation of any alternative equipment at the broadband POPs
that Vendor desires to implement. A sample configuration of
equipment is described below.
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment].
(b) Points of Presence (POPs).
-------------------------
Vendor currently locates broadband POPs in GTE Internetworking
GNI facilities. Such GNI facilities provide space for 19" racks,
associated power, cabling and environmental conditioning.
(c) Network Topology.
----------------
(i) The Vendor Network utilized to provide Broadband Backhaul
Services is currently structured as a [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment]. Broadband POPs will be located at [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment].
(ii) Traffic from [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment].
(iii) Vendor's NOCs will maintain [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment].
(iv) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] Under this Schedule
C, Vendor is not currently responsible for [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment].
(d) Vendor agrees that any changes to the Broadband Backhaul Services
or to the Vendor Network used to provide the Broadband Backhaul
Services will be fully functional with services provided by
Customer without modification of, or
Schedule C - Page 7
CONFIDENTIAL TREATMENT REQUESTED
addition to, client or host software used to provide services
provided by Customer that utilize the Broadband Backhaul
Services.
(e) In the event that Customer requests a change to the hub
architecture, or network bandwidth from that which is described
in this Schedule C (other than a request for increased throughput
priced pursuant to Section 8(a) of this Schedule C), Vendor will
provide Customer with Vendor's proposed increase, if any, to the
prices set forth in this Schedule C. To the extent that Customer
accepts such proposal, Vendor shall provide the Broadband
Backhaul Services in accordance with the requested change and
Vendor's proposal to the extent accepted by Customer.
5.3. Deployment.
----------
(a) Vendor will take the following steps in preparation for deploying
equipment used to provide the Broadband Backhaul Services as may
be appropriate:
(i) Coordinating provisioning schedules with Customer
representatives;
(ii) Negotiating with telecommunications vendors for procurement
and installation of appropriate access and network
connections;
(iii) Negotiating with telecommunications vendors for
reservations of floor space for installation of such
equipment;
(iv) Coordinating with site organizations for housing such
equipment and spares, and for developing agreements to
assist with troubleshooting activities as directed by the
NOC;
(v) Procuring equipment;
(vi) Receiving, storing, and tracking equipment; and
(vii) Scheduling installations.
(b) Preparation.
-----------
(i) Site Survey. Vendor will conduct site surveys in order to
identify site preparation which must be completed prior to
installation, special equipment requirements, interface
requirements, and the physical placement of equipment.
(ii) Inventory of Materials. Vendor will prepare inventories of
materials prior to installation of equipment at each site
identifying all components by common nomenclature, part
number, quantity required, and size or length, as
applicable.
(iii) Equipment Staging. Vendor will stage and test all equipment
in a central location and then ship such equipment to the
appropriate site. Vendor will assemble, tag and stage for
shipping all equipment required for
Schedule C - 8
CONFIDENTIAL TREATMENT REQUESTED
installation at the site. Staging consists of assembling
and testing pre-configured interfaces and other components
at the Vendor facility.
(iv) Shipping. Vendor will arrange for shipping of the staged
equipment to the installation locations and ensure that all
equipment arrives at the installation sites prior to the
scheduled site visit date. Equipment scheduled for
installation by Vendor will be held at the site until the
Vendor installation team arrives to uncrate and install it.
(v) Installation. Vendor will install equipment onsite and
verify functionality according to specifications.
Installation includes the following activities:
(1) Briefing site personnel;
(2) Taking inventory of equipment and resolving
discrepancies;
(3) Relocating equipment to footprint;
(4) Bolting cabinets together (if applicable);
(5) Installing intra-cabinet and inter-cabinet cables;
(6) Connecting power and station ground;
(7) Dressing and labeling cables, fantails, ports, and
mod-taps; and
(8) Connecting to the network and ensuring operability.
(c) Maintenance.
-----------
(i) Vendor will perform maintenance of equipment used to
provide the Broadband Backhaul Services based on input from
the monitoring systems and Customer. Vendor will handle
most [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(ii) Vendor will cooperate with Customer with respect to new
versions of software used to provide those services
provided by Customer that utilize the Broadband Backhaul
Services.
(iii) Vendor shall reasonably coordinate with Customer regarding
any maintenance activity.
(d) Quality Control.
---------------
Vendor will maintain a Quality Control Program to ensure all
reasonable commercial standards applicable to Broadband Backhaul
Services are adhered to.
5.4. Management of Circuits.
----------------------
Schedule C - 9
CONFIDENTIAL TREATMENT REQUESTED
Vendor will manage the [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment]. Vendor will utilize
existing procedures and systems for [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment].. As part of
the installation activities outlined above, Vendor will [*Material
Omitted and Separately Filed Under an Application for Confidential
Treatment].
5.5. Operations.
----------
Vendor will provision, staff and operate a NOC (currently in Columbia,
Maryland) with dedicated support for Customer and a backup NOC at a
separate location (such backup NOC is currently located in Chantilly,
Virginia). Responsibilities of Vendor's operations support team
include the following:
(a) Operation of the NOC and co-located systems with trained and
qualified personnel on a continuous 24-hours-per-day, seven-days-
per-week basis.
(b) Operation of all NOC equipment, monitoring, and fault
isolation functions.
(c) Utilization of network management capabilities and Vendor
diagnostic software resident in the NOC for:
(i) Monitoring [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment].
(ii) Measuring [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] .
(iii) Monitoring [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment].
(iv) Tracking the disposition of [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment].
(d) Coordination and management of field technicians for
maintenance activities associated with the Vendor Network.
(e) Coordination and reporting of all support activities using a
commercial trouble reporting system [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment].
(f) Support of short-term and long-term problem identification,
analysis, and resolution.
(g) Identification and tracking of all software changes deployed
in the Vendor Network and NOC platforms.
(h) Support for the deployment of new software and hardware (as
coordinated with Customer).
Schedule C - 10
CONFIDENTIAL TREATMENT REQUESTED
(i) Provision of operational support to the Vendor Network for
testing in association with provisioning activities.
(j) Maintenance of NOC maps.
(k) Coordination of Vendor Network change management activities
and maintenance of authorized outage lists.
(l) Support of Customer in security matters in accordance with
customary industry practices.
(m) Delivery of reports to pre-designated Customer
representatives addressing the following:
(i) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(ii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iv) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(v) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(vi) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(vii) Upon Customer's request, Vendor shall provide Customer
with [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] that are utilized
to provide Broadband Backhaul Services under this Schedule
C. In addition, for [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
that are utilized to provide Broadband Backhaul Services
under this Schedule C, Vendor shall provide to Customer a
daily report covering the [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] as such data is collected by Vendor. In the
event of a Vendor Network outage, Vendor will work
cooperatively with Customer to share additional [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] data which may be pertinent to the
resolution of any such outage, and, upon Customer's
reasonable request, Vendor will provide [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment]to assist in the outage resolution. In the event
of a Vendor Network performance degradation, Vendor will
work cooperatively with Customer to share additional
[*Material Omitted and Separately Filed Under an
Application for Confidential
Schedule C - 11
CONFIDENTIAL TREATMENT REQUESTED
Treatment] data which may be pertinent to the resolution
of any such degradation, and, upon Customer's reasonable
request, Vendor will provide [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] to assist in the problem resolution. All access
by Customer will be coordinated with Vendor in advance,
and the polling frequency for any device will be as
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(viii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment], including the
following:
(1) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(2) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(3) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(4) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(5) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(6) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(7) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(8) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(9) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(10) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(11) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]
(12) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment
provided that Vendor shall provide Customer with weekly reports
on [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment] in accordance with Section 8(a) of
this Schedule C, and, as soon as
Schedule C - 12
CONFIDENTIAL TREATMENT REQUESTED
technically feasible, Vendor shall provide such reports to
Customer on a daily basis. Customer may periodically request
additional reports that assist in improving network quality and
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment]. Vendor will provide these additional
reports, or the raw data, subject to technical reasonableness.
5.6. Aggregation Router Equipment.
----------------------------
(a) Aggregation router equipment used to provide the Broadband
Backhaul Services shall be [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment] of
Broadband Backhaul Services to Customer under this Agreement and
shall not be [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(b) Customer may specify the operating system features to be utilized
for aggregation router equipment selected by Vendor and used to
provide the Broadband Backhaul Services.
5.7. Excluded Functions.
------------------
Vendor shall not be responsible for providing the following with
respect to the Broadband Backhaul Services:
(a) [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment];
(b) [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment];
(c) [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment];
(d) [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment].
6. SERVICE LEVELS
For each of the Service Levels set forth in this Article 6, scheduled
maintenance by Vendor (or a third party) coordinated with Customer
pursuant to Section 5.3(c)(i) of this Schedule C will be excluded from
the Service Level performance calculations.
6.1. Availability.
------------
(a) "Broadband Network Availability" for a calendar month is
defined as the percentage calculated as (i) the total time
in each month that [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] is
reachable through the [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment],
divided by (ii) the sum of the total time in such month.
Schedule C - Page 13
(b) The Service Level applicable to Broadband Network
Availability for a calendar month shall be as follows:
Broadband Network Availability for each calendar month shall
exceed [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. Vendor shall
provide Customer on a daily basis with reports on Broadband
Network Availability, and Vendor's performance relative to
such Service Level shall be measured on a monthly basis for
each calendar month.
(c) In the event that Broadband Network Availability is below
[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment] percent ([*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] %) as measured in [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment], such event shall constitute a material breach of
the Agreement.
6.2. Packet Loss.
-----------
(a) "Broadband Packet Loss Percentage" means, for a calendar
month, the quantity calculated as (i) the aggregate number
of data packets dropped from the Vendor Network between the
[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment], divided by (ii) the aggregate
number of all data packets introduced into the Vendor
Network between the [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment], during
such month, the result expressed as a percentage.
(b) Percentage shall be as follows: Broadband Packet Loss
Percentage for each calendar month shall be less than or
equal to [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] percent ([*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment]%) for such month. Vendor shall
provide Customer on a daily basis with reports on Broadband
Packet Loss Percentage, and Vendor's performance relative to
such Service Level shall be measured on a monthly basis for
each calendar month.
6.3. Failed Sessions.
(a) "Failed Sessions" means point-to-point protocol sessions
that are successfully placed to the [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] and which do not fail as a result of problems
with[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(b) The Service Level applicable to Failed Sessions shall be
that no more than [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] percent
([*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]%) of [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] that are successfully placed
[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment] during the month shall be Failed
Sessions. Vendor shall provide Customer on a daily basis
with reports on Failed
Schedule C - 14
CONFIDENTIAL TREATMENT REQUESTED
Sessions, and Vendor's performance relative to such Service
Level shall be measured on a monthly basis for each calendar
month.
6.4. Abnormal Disconnects.
(a) "Broadband Abnormal Disconnect Percentage" means, for each
calendar day of the Broadband Term, the amount calculated as
(i) the aggregate number of disconnected sessions utilizing
the Broadband Backhaul Services during such day that are not
initiated by a user logoff sequence and that are caused by
problems in the network between [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment], divided by (ii) the aggregate number of all
sessions utilizing the Broadband Backhaul Services
commencing during such calendar day, with the result
expressed as a percentage. "Monthly Broadband Abnormal
Disconnect Percentage" means, for each calendar month of the
Broadband Term, the amount calculated as (x) the percentage-
point aggregate of the Broadband Abnormal Disconnect
Percentages for such calendar month, divided by (y) the
aggregate number of calendar days in such calendar month.
(b) The Service Level applicable to Monthly Broadband Abnormal
Disconnect Percentage shall be as follows: Monthly
Broadband Abnormal Disconnect Percentage during a calendar
month shall not exceed [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
percent ([*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]%). Vendor's
performance relative to such Service Level shall be reported
by Customer on a monthly basis for each calendar month, if
technically feasible.
6.5. Failure to Perform.
(a) If Vendor fails to meet any Service Level, Vendor shall (i)
promptly notify Customer of such failure (unless Customer
first discovered and notified Vendor of such failure), (ii)
investigate and report on the causes of the failure; (iii)
advise Customer, as and to the extent requested by Customer,
of the status of remedial efforts being undertaken with
respect to such failure; (iv) take commercially reasonable
efforts to correct the failure, and begin meeting the
Service Levels; and (v) take appropriate preventive measures
to minimize the likelihood of the failure recurring.
(b) Notwithstanding the foregoing, Vendor's failure to meet or
correct Service Level failures under this Schedule C during
the first six months following the Effective Date shall not
constitute a breach of the Agreement.
(c) Notwithstanding the foregoing, Vendor's failure to use
commercially reasonable efforts to meet or correct Service
Level failures with respect to the Abnormal Disconnects in
and of itself shall not constitute a breach of the
Agreement.
(d) Vendor shall not be deemed in breach of such Service Levels
to the extent that such breach is attributable to the
offered data load from Customer data centers or subscribers
exceeding the specified bandwidth per user or Customer
having oversubscribed the intra-LATA interconnect circuits.
Schedule C - Page 15
CONFIDENTIAL TREATMENT REQUESTED
(e) Notwithstanding anything to the contrary to this Agreement,
under no circumstances shall Customer be permitted to
terminate any portion of the Agreement other than this
Schedule C as a result of any material breaches, whether
cured or uncured, of the Service Levels in this Schedule C.
6.6. Meetings.
--------
Vendor and Customer shall hold weekly meetings at Customer's site or
via telephone conference call (unless otherwise requested by Customer)
to assess Vendor's performance under this Schedule C. During emergency
situations, meetings will be held at least on a daily basis.
6.7. Periodic Review of Service Levels.
---------------------------------
As requested by Customer or Vendor, Customer and Vendor shall review
the Service Levels described in this Schedule C and shall make
mutually agreed-upon adjustments to them as appropriate to reflect
performance capabilities associated with advances in the technology
and methods used to provide the Broadband Backhaul Services.
7. PRICING
7.1. Charges for Broadband Backhaul Services.
---------------------------------------
(a) The monthly charges for the Broadband Backhaul Services shall be
computed as the applicable Monthly Aggregate Subscriber Line
Charges calculated pursuant to Exhibit C-2 plus the Monthly Pass-
Through Expenses calculated pursuant to Subsection (b) of this
Section.
(b) Monthly Pass-Through Expenses.
-----------------------------
(i) "Monthly Pass-Through Expenses" means the following third-
party charges incurred by Vendor to provide the Broadband
Backhaul Services (including Broadband Backhaul Services not
yet accepted by Customer) during a calendar month of the
Broadband Term, for which Customer shall reimburse Vendor on
an Out-of-Pocket Expenses basis:
(1) Third-party charges for the [*Material Omitted and
Separately Filed Under an Application for
Confidential Treatment] is necessary to provide
the Broadband Backhaul Services; and
(2) Third-party charges approved in advance by
Customer for the acquisition of hub equipment at
Customer's facilities.
(ii) Vendor shall act as payment agent for Customer with
respect to the Monthly Pass-Through Expenses and shall
pay the corresponding third-party charges comprising
the Monthly Pass-Through Expenses.
(iii) Vendor shall use commercially reasonable efforts to
minimize the amount of Monthly Pass-Through Expenses,
by among other means
Schedule C - Page 16
CONFIDENTIAL TREATMENT REQUESTED
identifying and considering multiple sources for the
services and materials corresponding to such expenses.
7.2. Adjustments to Pricing for Services.
-----------------------------------
(a) Broadband Backhaul Market Price.
-------------------------------
(i) Definitions.
(1) "New Broadband Backhaul Market Price" shall mean the
price (or, if applicable, prices and corresponding
volumes) [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment]. To
calculate the New Broadband Backhaul Market Price
pursuant to this Subsection, the price for Comparable
Broadband Backhaul Services shall be reasonably
adjusted to reflect the difference between [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] that (A) do not [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment], or (B) do not [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment].
(2) "Broadband Backhaul Market Vendor" shall mean a vendor
(not including a Special Affiliate) that [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment]. For the purpose of this
Subsection, Special Affiliate shall only be deemed to
include Subsections (i) and (ii) of the definition of
"Special Affiliate" in Schedule A.
(ii) Notification Process.
Customer may provide Vendor with notice at any time of a New
Broadband Backhaul Market Price (each such notice, a "New
Broadband Backhaul Market Price Notice" and the date of such
notice as determined pursuant to Section 16.4 of the Master
Agreement, the "New Broadband Backhaul Market Price Notice
Date"). Each New Broadband Backhaul Market Price Notice will
contain (A) the New Broadband Backhaul Market Price
calculation and [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment], and (B)
information sufficient to [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]. No
later than thirty (30) calendar days after the Broadband
Backhaul Market Price Notice Date corresponding to a New
Broadband Backhaul Market Price Notice, Vendor will respond
to Customer by notifying Customer in writing whether it
will:
(1) accept the validity of the proposed New Broadband
Backhaul Market Price and reduce prices to the
applicable New Broadband Backhaul Market Price in
accordance with Subsection (iii) of this Subsection
(a),
Schedule C - Page 17
CONFIDENTIAL TREATMENT REQUESTED
(2) accept the validity of the proposed New Broadband Backhaul
Market Price and decline to reduce prices to the New
Broadband Backhaul Market Price in accordance with
Subsection (iii) of this Subsection (a), or
(3) dispute the validity of the proposed New Broadband Backhaul
Market Price
(each a "New Broadband Backhaul Market Price Response"). Vendor
shall not unreasonably dispute the validity of a proposed New
Broadband Backhaul Market Price.
(iii) Reduction Process.
In the event Vendor accepts a proposed New Broadband Backhaul
Market Price pursuant to clause (1) of Subsection (ii) of this
Subsection (a), then effective as of the later of (a) the New
Broadband Backhaul Market Price Effective Date corresponding to
such New Broadband Backhaul Market Price Notice, and (b)
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment], the Monthly Per Subscriber Line Charge
will be reduced to the New Broadband Backhaul Market Price set
forth in the corresponding New Broadband Backhaul Market Price
Notice, and with respect to such Broadband Backhaul Services,
Vendor will, if requested by Customer, [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment]
corresponding to such New Broadband Backhaul Market Price;
provided, however, that Vendor shall not be obligated to reduce
the Monthly Per Subscriber Line Charge [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment]
for which Vendor reduced prices pursuant to this Subsection
(iii).
Notwithstanding the foregoing:
(1) Vendor shall not be obligated to reduce the Monthly Per
Subscriber Line Charge at a rate that is more rapid than the
rate at which the [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] provides
Customer with [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment] relative to the
applicable [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment], as measured
monthly.
Example 1 - [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. For example, if the
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment] at the New Broadband Backhaul Market
Price, but immediately following the Broadband Backhaul Market
Price Effective Date, the Broadband Backhaul Market Vendor has
only provided Customer with [*Material Omitted and Separately
Filed
Schedule C - Page 18
CONFIDENTIAL TREATMENT REQUESTED
Under an Application for Confidential Treatment], then
Vendor will only be obligated to reduce the Monthly Per
Subscriber Line Charge [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment], then
Vendor will be obligated to reduce the Monthly Per
Subscriber Line Charge for [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment].
Example 2 - [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. For example, if,
instead, [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. If as of the New
Broadband Backhaul Market Price Effective Date, [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment], then Vendor will only be obligated
to reduce the Monthly Per Subscriber Line Charge [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment]. If in the following month,
[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment], then Vendor will be obligated
to reduce the Monthly Per Subscriber Line Charge for fifty
[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment]. If in following month,
[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment], then Vendor will be obligated
to reduce the Monthly Per Subscriber Line Charge [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment]. If in the following month,
[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment]
(2) Vendor shall not be obligated [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment] provides [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
relative to the applicable [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment].
(3) A New Broadband Backhaul Market Price shall be
applicable only during such periods as [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment].
(iv) Decommissioning Process.
If Vendor declines to reduce the Monthly Per Subscriber Line
Charge to the New Broadband Backhaul Market Price pursuant
to clause (2) of Subsection (ii) of this Subsection (a),
then Customer may, in its sole discretion, do either or both
of the following: (A) terminate the Broadband Backhaul
Purchase Commitment, and (B) disconnect Vendor Broadband
Subscriber Lines from the Vendor Network, subject to the
following restrictions:
(1) Customer will provide [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]
days
Schedule C - Page 19
CONFIDENTIAL TREATMENT REQUESTED
prior written notice of the LATA or other geographic
area in which Vendor Broadband Subscriber Lines are to
be disconnected from the Vendor Network, as well as the
associated quantities of Vendor Broadband Subscriber
Lines to be disconnected in each such LATA or other
geographic area.
(2) Customer may not order the disconnection of Vendor
Broadband Backhaul Subscriber Lines from the Vendor
Network in amounts greater than the number of the
Aggregate Subscriber Lines utilizing Comparable
Broadband Backhaul Services that are provided to
Customer by other entities at or below such New
Broadband Backhaul Market Price.
(3) The disconnection of Vendor Broadband Subscriber Lines
from the Vendor Network pursuant to this Subsection
7.2(a)(iv) shall result in the same approximate
weighted distribution of Vendor Broadband Subscriber
Lines across all Existing LATAs. For the purposes of
this Subsection (3), "distribution" means the
distribution of the corresponding Subscriber Lines
across rural versus urban areas, across the contiguous
states of the United States, and between Covered
Subscriber Lines and non-Covered Subscriber Lines.
(v) Dispute Resolution Process.
If Vendor reasonably disputes the validity of the New
Broadband Backhaul Market Price pursuant to clause (3) of
Subsection (ii) of this Subsection (a), then each Party
shall promptly escalate to the senior-executive level all
efforts by such Party to resolve such dispute.
(b) Most-Favored Customer.
---------------------
(i) As long as the aggregate number of Vendor Broadband
Subscriber Lines exceeds that of any other customer of
Vendor, Vendor shall not provide Comparable Broadband
Backhaul Services to any other Applicable BB Purchaser (1)
at prices that are lower than those charged or available to
Customer under this Agreement, or (2) pursuant to terms and
conditions more favorable to such Applicable BB Purchaser
than the terms and conditions of this Schedule C and Master
Agreement, in each case, without offering such lower price
and other more favorable terms and conditions to Customer
within thirty (30) calendar days of contractually committing
to such price and other terms with another customer. For
the purposes of this Subsection, prices "charged or
available to Customer under this Agreement" for Broadband
Backhaul Services shall be a [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment]. In the event that the aggregate number of
Vendor Broadband Subscriber Lines then being purchased or
ordered by Customer at any time during the Broadband Term
exceeds that of any other customer of Vendor, Vendor shall
provide Customer with written notification of such event
within thirty (30) calendar days of the occurrence of such
event, and thereafter, once the aggregate number of
Schedule C - Page 20
CONFIDENTIAL TREATMENT REQUESTED
Vendor Broadband Subscriber Lines then being purchased or
ordered by Customer falls below that of any other customer
of Vendor, Vendor shall provide Customer with written
notification of such event within thirty (30) calendar days
of the occurrence of such event. "Applicable BB Purchaser"
shall mean any party (including any Vendor Affiliate that
resells Broadband Backhaul Services purchased from Vendor)
that is obligated to purchase, that actually purchases, or
that seeks to purchase from Vendor Broadband Backhaul
Services at any time for more than the Applicable BB Volume
for the then-current calendar year. "Applicable BB Volume"
means (A) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] subscriber lines,
(B) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] subscriber lines,
(C) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] subscriber lines,
(D) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]subscriber lines, and
(E) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] subscriber lines.
(ii) As long as the aggregate number of Vendor Broadband
Subscriber Lines exceeds that of any other customer of
Vendor, to the extent that Vendor provides broadband
backhaul services that are not Comparable Broadband Backhaul
Services, then Vendor shall offer, on a quarterly basis, to
provide to Customer such broadband backhaul services at the
prices charged or available to, and upon the terms and
conditions applicable to, any Applicable BB Purchaser;
provided, however, that if Customer's service requirements
would necessitate changes to such terms and conditions, the
Parties shall work in good faith to adjust such terms and
conditions as mutually agreed to satisfy such requirements.
To the extent that Customer accepts such offer of broadband
backhaul services that are not Comparable Broadband Backhaul
Services from Vendor, Vendor shall provide such services
pursuant to a separate Schedule to the Master Agreement,
such services shall be deemed Services to which the Master
Agreement applies, and such services shall be subject to
most-favored customer terms and conditions substantially
similar to those set forth in this Subsection (b), and any
such services will [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]. For
purposes of this Subsection (ii), broadband backhaul
services that are not Comparable Broadband Backhaul Services
include, but are not limited to, an end-to-end broadband
service which includes the local loop, and usage-based
broadband backhaul services.
(iii) As long as the aggregate number of Vendor Subscriber Lines
exceeds that of any other customer of Vendor, Vendor shall
offer to Customer Comparable Broadband Backhaul Services
provided or offered by any Vendor Affiliate to an Applicable
BB Purchaser (1) at prices that are equal to or lower than
those charged or available to such Applicable BB Purchaser
for such services, and (2) pursuant to terms and conditions
Schedule C - Page 21
CONFIDENTIAL TREATMENT REQUESTED
that are at least as favorable to Customer than the terms
and conditions applicable to or available to an Applicable
BB Purchaser.
(iv) For any price proposal made by Vendor to Customer at any
time during the Term, Vendor shall in good faith represent
to Customer in writing whether or not such proposal is being
made for reasons that include Vendor's belief that an
adjustment may be required pursuant to this Subsection (b).
(v) Customer may audit Vendor's compliance with this Subsection
(b) pursuant to Article 10 of the Master Agreement. In the
event that Vendor fails to comply with this Subsection (b)
(e.g., fails to adjust pricing in accordance with this
Subsection (b)), then Vendor shall rebate to Customer, with
respect to the aggregate volume of Broadband Backhaul
Services purchased hereunder, the difference between (1) the
price actually paid by Customer hereunder, and (2) the lower
price provided to the Applicable BB Purchaser, retroactive
to the date Vendor committed to provide the lower price to
such Applicable BB Purchaser, together with interest
computed in the same manner as described in Section 9.2 of
the Master Agreement on such rebated amounts from such date.
8. SPECIFICATIONS
The Broadband Backhaul Services provided hereunder shall fully conform with
the following Specifications (collectively, the "Broadband
Specifications"):
(a) Vendor will provision end-to-end bandwidth such that [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment]. For each [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment]
Line that Customer requests Vendor to provide hereunder, Vendor
shall provide [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] at a charge to Customer
that is no greater than [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment] cents
($[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment]) [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment].
(b) Each circuit used to provide Broadband Backhaul Services between
the Vendor Network and Customer's facilities shall have capacity
equal to or greater than DS-3.
(c) Aggregation router equipment will be fully compliant with (i)
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment], and (ii) [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment], as such referenced specifications may change from
time to time, provided that Vendor shall not be required to
replace aggregation router equipment to meet any changed
specifications, but shall be required to implement any software
provided by the manufacturer of
Schedule C - Page 22
CONFIDENTIAL TREATMENT REQUESTED
such aggregation router equipment within a commercially
reasonable period of time after such software is provided
and after successful testing by Vendor.
(d) If Vendor changes aggregation router equipment, it will be
fully functional with services provided by Customer without
modification of, or addition to, client or host software
used to provide services provided by Customer that utilize
the Broadband Backhaul Services. As of the Effective Date,
aggregation router equipment must comply with the following
protocol requirements in order to comply with the
requirements of this Subsection (d):
(i) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(ii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(e) The Broadband Backhaul Services will support the following
software features being developed for Customer [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment] as of the Effective Date:
(i) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(ii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iv) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(v) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(vi) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(vii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(viii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(ix) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(x) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]
Schedule C - Page 23
CONFIDENTIAL TREATMENT REQUESTED
(xi) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
The Parties acknowledge and agree that as of the Effective
Date, the Redback Networks Inc. ("Redback") router
aggregation equipment utilized to provide the Broadband
Backhaul Services as of the Effective Date satisfy the
Broadband Specifications set forth in Subsections (c) and
(d) of this Article 8. The Broadband Backhaul Services will
support any additional software features provided by the
aggregation router vendor after the Effective Date as
mutually agreed by the Parties. Vendor shall use
commercially reasonable efforts to cause [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment].
(f) Any Broadband Backhaul Market Vendor shall support the
Broadband Specifications set forth in Subsections (c), (d)
and (e) of this Article 8 in a manner comparable to that
required of Vendor pursuant to such Subsections.
The Parties acknowledge and agree that this Article 8 does not set
forth a complete listing of required specifications applicable to
Broadband Backhaul Services that are used to provide any non-xDSL
services. Any such specifications not set forth in this Article 8
shall be mutually agreed upon by the Parties pursuant to Article 2 of
this Schedule C.
9. LIABILITY RESTRICTIONS
(a) Subject to Subsection (d) of this Section, the liability of
Vendor to Customer for all damages arising out of or related
to the Services provided under this Schedule will be limited
to, and will not exceed, in the aggregate during any
calendar year, ten percent (10%) of the aggregate amounts
paid to Vendor by Customer (excluding Out-of-Pocket Expenses
and Monthly Pass-Through Expenses) under this Schedule
during the twelve (12) month period preceding the date of
the event giving rise to such damages; provided, however,
for the initial twelve (12) months following the Effective
Date, the foregoing cap shall be no less than Five Million
Dollars ($5,000,000). Subject to Subsections (b) and (d) of
this Section, the liability of Vendor to Customer for
damages arising out of or related to Services provided under
this Schedule caused by the acts or omissions of third
parties beyond the reasonable control of Vendor will be
further limited and will not exceed, in the aggregate during
any calendar year, the lesser of (i) five percent (5%) of
the aggregate amounts paid to Vendor by Customer (excluding
Out-of-Pocket Expenses and Monthly Pass-Through Expenses)
under this Schedule during the twelve (12) month period
preceding the date of the event giving rise to such damages,
or (ii) Ten Million Dollars ($10,000,000); provided,
however, for the initial twelve (12) months following the
Effective Date, the foregoing cap shall be no less than
Three Million Dollars ($3,000,000).
(b) In the event of any liability of Vendor to Customer for
damages arising out of or related to Services provided under
this Schedule caused by the acts or omissions of third
parties beyond the reasonable control of Vendor, then the
Parties agree as follows:
Schedule C - Page 24
CONFIDENTIAL TREATMENT REQUESTED
(i) Vendor agrees to vigorously pursue the recovery of damages
against the third party causing the damage, including
through negotiations, dispute resolution, or both, to
maximize the damages recoverable against such third party;
(ii) Vendor agrees to pass through to Customer any amounts that
Vendor actually recovers from such third party relating to
damages incurred in connection with Services provided to
Customer under this Schedule;
(iii) Customer agrees that in the event that Vendor has paid any
amounts to Customer pursuant to Subsection (a) of this
Section prior to the recovery of damages from a third
party, Vendor may reduce the amount of recovery received
from such third party by the amount previously paid to
Customer in respect of such event causing the damages; and
(iv) Amounts recovered by Vendor from third parties shall be
first passed on to Customer until Customer's full damages
are satisfied.
(c) IN NO EVENT, WHETHER IN CONTRACT OR IN TORT (INCLUDING BREACH OF
WARRANTY, NEGLIGENCE AND STRICT LIABILITY IN TORT), SHALL A PARTY
BE LIABLE TO THE OTHER PARTY FOR INDIRECT OR CONSEQUENTIAL,
EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES EVEN IF SUCH PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE.
(d) The limitations set forth in Subsection (a) of this Section shall
not apply with respect to (i) intentional breach by Vendor; (ii)
damages occasioned by an intentional tort or the gross negligence
of Vendor; (iii) damages occasioned by Vendor' breach of its
obligations described in Article 11 (Confidentiality) of the
Master Agreement, or (iv) claims subject to indemnification
pursuant to this Agreement (such amounts paid by the indemnitee
to third parties shall be deemed to be direct damages) other than
claims subject to the indemnity set forth in Section 15(a) of the
Master Agreement.
(e) Each Party shall have a duty to reasonably mitigate (i.e.,
minimize) damages for which the other Party is responsible.
Schedule C - Page 25
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C-1
Broadband Backhaul Purchase Commitment
1. CONFIDENTIALITY
This Exhibit specifies Customer's Broadband Backhaul Purchase Commitments
pursuant to Schedule C. The Parties specifically acknowledge that the
purchase commitment information contained herein is highly confidential and
that its disclosure to the public or third parties could cause significant
harm to either Customer or Vendor or both.
2. BROADBAND BACKHAUL PURCHASE COMMITMENTS
2.1. DSL Purchase Commitment.
Customer agrees to order Broadband Backhaul Services such that:
(a) Commencing upon the Effective Date through [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment], no less than [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment];
(b) Commencing upon [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment] through [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment].
(such commitment, as may be reduced pursuant to the Agreement, the "DSL
Purchase Commitment").
2.2. Other Broadband Purchase Commitments.
------------------------------------
Customer agrees to order Broadband Backhaul Services such that, during
the [*Material Omitted and Separately Filed Under an Application for
Confidential Treatment], no less [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment] as may be
reduced pursuant to the [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment].
2.3. Provision of Subscriber Line Information.
----------------------------------------
Customer will provide Vendor with information regarding the number of
Vendor [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment].
3. REDUCTION IN BROADBAND PURCHASE COMMITMENTS FOR DELIVERY FAILURE
3.1. Reduction Calculation.
---------------------
Exhibit C-1 - Page 1
CONFIDENTIAL TREATMENT REQUESTED
Reduction of the Broadband Backhaul Purchase Commitments pursuant to
Section 3.2(b)(ii) of Schedule C shall be determined in accordance
with this Section. As of the [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment], . the Parties will
calculate [*Material Omitted and Separately Filed Under an Application
for Confidential Treatment]from and after [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment].(1)
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment]. (2) either if (A) [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment].is
on or before [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].(B) [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment].
3.2. Example of Reduction Calculation.
--------------------------------
This Section 3.2 sets forth examples, referenced in Section
3.2(b)(iii) of Schedule C, of reductions in the Broadband Backhaul
Purchase Commitments for delivery failures pursuant to Section 3.2(b)
of Schedule C.
(a) As of [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]:
(i) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(ii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iv) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(b) As of [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]:
(i) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(ii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iv) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(c) As of [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]:
Exhibit C-1 - Page 2
CONFIDENTIAL TREATMENT REQUESTED
(i) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(ii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iv) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(d) As of[*Material Omitted and Separately Filed Under an Application
for Confidential Treatment]:
(i) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(ii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iv) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
Exhibit C-1 - Page 3
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C-2
Prices for Broadband Backhaul Access Services
1. CONFIDENTIALITY
This Exhibit C-2 specifies the prices for Broadband Backhaul Services
provided pursuant to the Master Agreement and Schedule C. The Parties
specifically acknowledge that the pricing information contained herein is
highly confidential and that its disclosure to the public or third parties
could cause significant harm to either Customer or Vendor or both.
2. PRICES FOR BROADBAND BACKHAUL SERVICES
2.1. Monthly Per Subscriber Line Charge.
----------------------------------
"Monthly Per Subscriber Line Charge" shall be defined as follows:
(a) If a Vendor Broadband Subscriber Line is a Covered Subscriber
Line, and
(i) the Monthly Subscriber Line Aggregate is equal to or
greater [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].but less
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].shall be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(ii) the Monthly Subscriber Line Aggregate is greater than or
equal [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].but less
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].shall be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iii) the Monthly Subscriber Line Aggregate is greater than or
equal to [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. but less than
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].shall be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iv) the Monthly Subscriber Line Aggregate is greater than or
equal [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].but less than
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].shall be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(v) the Monthly Subscriber Line Aggregate is greater than or
equal to [*Material Omitted and Separately Filed Under an
Application for
Exhibit C-2 - Page 1
Confidential Treatment].but less than [*Material Omitted
and Separately Filed Under an Application for Confidential
Treatment].shall be [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment].
(vi) the Monthly Subscriber Line Aggregate is greater than
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].shall be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(b) If a Vendor Broadband Subscriber Line is not a Covered Subscriber
Line, and
(i) the Monthly Subscriber Line Aggregate is equal to or
greater than [*Material Omitted and Separately Filed Under
an Application for Confidential Treatment]. but less than
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].shall be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(ii) the Monthly Subscriber Line Aggregate is greater than or
equal to [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. but less than
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].shall be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iii) the Monthly Subscriber Line Aggregate is greater than or
equal [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].but less than
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].shall be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];
(iv) the Monthly Subscriber Line Aggregate is greater than or
equal to [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].but less than
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].shall be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(v) the Monthly Subscriber Line Aggregate is greater than or
equal [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].but less than
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].shall be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(vi) the Monthly Subscriber Line Aggregate is greater than
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].shall be
[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
Exhibit C-2 - Page 2
CONFIDENTIAL TREATMENT REQUESTED
Notwithstanding the foregoing, each of the foregoing Monthly Per
Subscriber Line Charges may be [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment].. As used herein,
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment].means a [*Material Omitted and Separately
Filed Under an Application for Confidential Treatment]. (A) [*Material
Omitted and Separately Filed Under an Application for Confidential
Treatment]., (B) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].r, (C) [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment]. (D)
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment].
2.2. Proration of Monthly Per Subscriber Line Charge.
-----------------------------------------------
If Customer is able to provide Vendor with information [*Material
Omitted and Separately Filed Under an Application for Confidential
Treatment]. then Vendor shall [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]..If Customer is not
able to provide Vendor with such information, then
(a) no later than [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].days after the end of
each calendar month, Customer will provide Vendor [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment].and
(b) for each [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment],.Customer shall pay
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment],
2.3. Monthly Aggregate Subscriber Line Charge.
----------------------------------------
(a) "Monthly Aggregate Subscriber Line Charge" for a calendar month
shall mean the greater of:
(i) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]; and
(ii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. (A) [*Material
Omitted and Separately Filed Under an Application for
Confidential Treatment]. (B) [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment].
For example, if (A) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment]. (B) [*Material Omitted and
Separately Filed Under an Application for Confidential Treatment]:
(iii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(iv) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
Exhibit C-2 - Page 3
CONFIDENTIAL TREATMENT REQUESTED
[*Material Omitted and Separately Filed Under an Application for
Confidential Treatment].
(b) Except with respect to [*Material Omitted and Separately Filed
Under an Application for Confidential Treatment]:
(i) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment];.
(ii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].;
(iii) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].;
(iv) [*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].
(c) Notwithstanding the foregoing, Vendor [*Material Omitted and
Separately Filed Under an Application for Confidential
Treatment].
Exhibit C-2 - Page 4
CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE D
Other Services
During the Term, Customer will order from Vendor services (excluding Dial-Up
Access Services, Broadband Backhaul Services and Dial-Up Access Services
provided outside of the United States) (such services to be ordered the "Other
Services") such that the aggregate charges paid to Vendor and Vendor's
Affiliates for such Other Services are equal to or greater than [*Material
Omitted and Separately Filed Under an Application for Confidential
Treatment].dollars ($[*Material Omitted and Separately Filed Under an
Application for Confidential Treatment].) (such commitment the "Other Services
Purchase Commitment"); provided, however, that charges payable for such Other
Services ordered or purchased by Customer or a Special Affiliate of Customer
during December 1999 (collectively, the "Pre-Term Private Line Agreements")
shall contribute toward Customer's satisfaction of the Other Services Purchase
Commitment. Any orders or purchases of Other Services shall be subject to terms
and conditions mutually agreed upon by the Parties, which may include terms and
conditions similar to those set forth in the Master Agreement. Any agreement for
Vendor to provide Other Services to Customer that are private line services
(such services collectively the "Private Line Services") shall contain a most-
favored customer provision substantially similar to the one set forth in Section
8.3(b) of Schedule B. In the event that (i) Customer is offered by a third party
services similar to the Private Line Services at prices and terms more
competitive that those offered by Vendor or Vendor's Affiliates to Customer,
(ii) Customer, in its sole discretion, requests Vendor to provide Private Line
Services at prices and terms at least as favorable to Customer as such prices
and terms offered by such third party, and (iii) Vendor or Vendor's Affiliates
declines to provide Private Line Services at such prices and terms, then the
Other Services Purchase Commitment shall be reduced by the aggregate charges
paid to such third party for such services.
Schedule D - Page 1