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** Indicates that information has been omitted herein pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
simultaneously herewith.
Exhibit 10.5
[UUNET Technologies, Inc. Letterhead]
MASTER DISCOUNTED INTERNET SERVICES AGREEMENT
This Master Internet Services Agreement ("Agreement") is made by and between
UUNET Technologies, Inc., with its principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("UUNET") and Sage Networks, Inc. ("Customer") with its
principal offices located at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ for the
purpose of setting forth the terms and conditions relating to the purchase of
UUNET's Internet products and services by the Eligible Participants, as defined
in Section 1 below.
1. DEFINITIONS.
"Eligible Participants" means Customer, its Affiliates and any other entities
that UUNET and Customer mutually agree upon, are eligible to participate in the
offerings under this Agreement. "Affiliate" means with respect to a party, an
entity controlled by, controlling or under common control with such party.
"Effective Date" means the effective date of this Agreement which shall be the
last date of the signatures of a duly authorized representative of a party
affixed below.
2. SERVICES.
The services that are currently available hereunder from UUNET and its
Affiliates (the "Services") are set forth in the attached Schedule 1. UUNET may
amend Schedule 1 or Schedule 2 at any time and from time to time remove Services
if they should be discontinued or add new services (which shall be included
within the term "Services" upon such addition) by providing a revised copy
thereof to Customer. Such amendments shall be prospective only and shall not
affect any existing Service being provided by UUNET or any of its Affiliates to
Eligible Participants at the time of amendment which Services shall continue to
be offered to Customer for the balance of the Term hereof at the prices and with
the discounts set forth on Schedule 1 attached hereto.
3. PRICING AND DISCOUNTS.
3.1 The prices and discounts for Services applicable to this Agreement are
detailed in Schedule 1, and shall be applicable for the duration of the initial
term set forth in Section 6 unless otherwise amended as provided for below in
this Section 3.2. The discounts shall not be combined with promotional discounts
as may be available from time to time from UUNET. An Eligible Participant may
elect, at the time of any order for Services, the applicable discount set forth
in Schedule 1 or the terms of any promotion then in effect. In either event, the
discount or promotion shall only be available if Eligible Participant agrees to
the standard terms and conditions applicable to such Service and commits to
purchase that Service for a minimum one year term or such longer term as may be
specified in the applicable Service Agreement.
3.2 The parties acknowledge and agree that they have negotiated competitive
pricing for the Services.
3.2.1 Not more often than once every six months Customer may request that UUNET
review whether the pricing available to Customer hereunder is as competitive as
pricing for comparable services purchased from UUNET in similar quantities by
similarly situated customers, and if UUNET determines that this pricing is not
competitive then UUNET may at its election adjust the fees for the Services to
make the fees competitive or terminate this Agreement upon sixty days written
notice.
3.2.2 After two years of the Effective date of this Agreement, if industry
pricing or comparable services purchased in similar quantities from other
national Internet service providers is different than the fees set forth in
Schedule 1, at Customer's request, the parties shall renegotiate the fees for
the services to make the fees competitive with industry pricing.
3.2.3 For purposes of making price adjustments hereunder, UUNET may consider,
among other things, the minimum Mbps commitment, the number and type of
telecommunications lines being serviced, and the term of comparable contracts.
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4. FORECASTS.
Two weeks prior to the end of each calendar quarter Customer shall, based on the
best available information, provide UUNET a forecast of orders likely to be
generated pursuant to this Agreement on a per service and per country basis.
Customer and UUNET shall meet at Customer's principal office during the first
two weeks of each calendar quarter during the term of this Agreement to discuss
Customer's estimate of anticipated Eligible Participants' needs for Services on
a per service and per country basis for the ensuing calendar quarter.
Additionally, these meetings will be designed to promote discussions of the
most appropriate network architecture to service Sage Networks' customers. Each
of these meetings shall be followed by an executive meeting at which at least
one officer of Customer attends.
5. SERVICE ORDERS AND COORDINATION.
Eligible Participants will coordinate all orders for Services through UUNET's
designated Account Manager. Only Eligible Participants who identify themselves
as Eligible Participants under this Agreement will be offered the discount set
forth in Schedule 1. The Eligible Participant ordering Service will enter into a
service agreement with UUNET for each Service. Each service agreement shall set
forth the terms, conditions, and pricing of the Service. The current terms and
conditions applicable to purchases of dedicated Internet connections are set
forth in Schedule 2. If any Eligible Participant believes that the level of such
Service or support in any case is insufficient, that Eligible Participant may
contact UUNET's designated Account Manager for assistance with problem
resolution.
6. TERM OF THE AGREEMENT.
(a) Unless terminated by Customer in accordance with the provisions of
paragraph (b) of this Section 6. The initial term of this Agreement shall
be three years from the Effective Date which term shall be automatically
renewed for an additional one year term, provided that neither party has
delivered to the other a written notice of intent not to renew for the
forthcoming term not less than 60 days in advance of the end of the
then-current term. The term commitment will commence and continue for three
years from the Commitment date (as stated in Schedule 1) upon which
Customer will have ordered the minimum Mbps commitment set forth in
Schedule 1.
(b) UUNET acknowledges that it is Customer's primary Internet service provider.
UUNET agrees that that if in any calendar quarter Customer receives credits
under the applicable Service Level Agreement referenced in Section 7 of
Schedule 2 for more than ** of the circuits ordered from UUNET then
Section 12 ("Primary Provider") of this Agreement shall be null and void.
7. CONSULTING.
UUNET will (at no additional charge) provide one day of on-site assistance once
quarterly and provide remote assistance as reasonably required to assist
Customer in routing traffic and configuring equipment.
8. LIMITATION OF LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY STATED OR IMPLIED HEREIN OR IN
ANY SERVICE AGREEMENT, NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER
PARTY WHATSOEVER FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR
SPECIAL DAMAGES, INCLUDING WITHOUT LIMITATION, LOSS OF PROFIT, LOSS OF REVENUE,
OR LOSS OF BUSINESS SUFFERED BY THE OTHER OR BY ANY ELIGIBLE PARTICIPANT,
ASSIGNEE OR OTHER TRANSFEREE OF THE OTHER, EVEN IF INFORMED IN ADVANCE OF THE
POSSIBILITY OF SUCH DAMAGES.
9. ACCEPTABLE USE.
UUNET's services may only be used for lawful purposes. Use of any Service must
comply with the then-current version of the UUNET Acceptable Use Policy
("Policy") for the country in which the service is provided, available at the
following URL:▇▇▇.▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇, and in the event no Policy is available for
that country the ▇.▇. ▇▇▇▇▇▇ shall apply. UUNET reserves the right to change
the Policy from time to time, effective upon posting of the revised Policy at
the URL. UUNET reserves the right to suspend the Service or terminate this
Agreement effective upon notice for a violation of the Policy.
10. INVOICING AND PAYMENT.
UUNET will invoice each Eligible Participant for the applicable Service in
accordance with the terms of the applicable service agreement. The Eligible
Participant obtaining Service will make payment for Services in accordance with
the terms of each applicable service agreement.
11. MARKETING AND PUBLICITY.
UUNET and Customer will design and implement a joint marketing program, and
promptly after execution of this Agreement the respective points of contract of
each party shall
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agree upon a plan setting forth the approved joint activities. Such joint
marketing program shall include, but not be limited to, (i) allowing Customer to
resell UUNET Service through Customer's network of resellers, (ii) cooperating
on mutually beneficial hosting and co-location remarketing programs and (iii)
cooperation on international co-location facilities agreements. Other than (a)
identifying UUNET to Eligible Participants as Customer's preferred internet
service provider, and (b) any mutually approved joint marketing programs,
neither party shall publicize the existence of this Agreement without the
written consent of the other, except as may be required by applicable law,
regulation, or government order. Neither party may use the name, logo,
trademarks, service marks or other proprietary identifying symbols of the other
party in any advertising, signage, marketing materials, brochures or any other
materials in any medium without the other party's express advance written
consent. Any such permitted use shall be only within guidelines provided by such
party. Neither party shall issue any press release, announcement or public
statement with respect to this Agreement or the other party without the other
party's express advance written consent. Any breach of this Section shall be a
material breach of this Agreement constituting cause for termination.
12. PRIMARY PROVIDER.
Both parties understand that this is a "non-exclusive" agreement. However,
Customer agrees that subject to the terms of this Section, UUNET will become and
remain the primary provider of internet services for the Sage Networks. In the
event Customer obtains over 600 Mbps of bandwith for internet traffic in years
two and three of the term commitment, ** of any bandwith over 600 Mbps shall
be purchased from UUNET. If the ** requirement is not met, Customer will pay
UUNET Shortfall Revenue in the amount of ** per Mbps for each Mbps by which
Customer has fallen short of the ** requirement. Customer shall notify UUNET
immediately upon determining that the ** requirement in this Section has not
been met. Customer shall provide UUNET relevant records relating to this Section
at each quarterly business review held pursuant to Section 4. Notwithstanding
anything to the contrary stated herein, this Section 12 shall be inapplicable if
Customer has purchased bandwith from UUNET in an amount equal to or greater
than ** of the applicable Minimum Mbps Commitment set forth in Schedule 1.
13. AUDIT.
In order to verify the statements issued by Customer in connection with Section
12 or the performance of Customer's financial obligations to UUNET hereunder,
UUNET may cause, upon ten (10) days' prior notice (i) an audit to be made of the
Customer's relevant customer books and records and/or (ii) an inspection to be
made of the Customer's relevant facilities and procedures. Any audit and/or
inspection shall be conducted during regular business hours at Customer's
facilities and in a manner that does not interfere with Customer's normal
business activities. Any audit shall be conducted by an independent certified
public accountant selected by UUNET (other than on a contingent fee basis) who
will be subject to the confidentiality provisions of this Agreement. UUNET will
be entitled to receive the final written report from the selected auditor. All
records and the final written report shall remain the confidential information
of UUNET. Customer agrees to provide the selected auditor access to the relevant
records and facilities. UUNET agrees to, or to cause the auditor to, deliver a
copy of the final report to Customer promptly upon completion of the audit.
Customer shall notify UUNET within thirty (30) days of its receipt of the report
of any disagreements with the findings contained therein. Such notice shall
state the basis upon which Customer disagrees with the findings and shall be
accompanied by data to support its assertions. If within thirty (30) days of
delivery of such notice to UUNET, Customer and UUNET cannot agree on the numbers
or the amounts reported, a second audit shall be conducted by an independent
certified public accountant mutually agreed to by the parties. The cost of such
second audit shall be borne equally by both parties and the conclusions shall be
binding upon both parties. Customer shall make prompt adjustments to compensate
for any errors or omissions disclosed by the audit. Any such audit shall be paid
for by UUNET unless material discrepancies are disclosed. "Material" shall mean
an error of five percent (5%) or more of the number or amount that was reported.
If material discrepancies are disclosed, Customer agrees to reimburse UUNET for
the reasonable costs (based on current market prices) associated with the audit
in addition to all sums due. In no event shall audits be made more frequently
than annually.
14. OPPORTUNITY TO BID.
In the event Customer requires additional telecommunications services (including
Internet-protocol-based services and traditional voice services), Customer shall
provide UUNET and its affiliates an opportunity to propose terms under which
they could provide such services to Customer.
15. CONFIDENTIALITY
The prices and terms of this Agreement shall be held confidential by each party,
as shall each party's confidential or proprietary information, including,
without limitation, any information obtained by UUNET, its agents or
representatives in the course of performing an audit pursuant to Section 13 of
this Agreement ("Confidential Information"). UUNET's performance under this
Agreement, the quality of UUNET network performance, the discounts and prices
set forth in
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Schedule 1 and any data provided by UUNET to Customer regarding performance of
the UUNET network shall be deemed UUNET Confidential Information. Neither party
shall disclose the other party's Confidential Information to third parties
without the other party's written consent, except as permitted pursuant to this
Section. Each party shall disseminate the other party's Confidential
Information among its employees only on a need-to-know basis and shall use such
Confidential Information only for the purpose of performing its obligations
hereunder. To the extent a party is required by applicable law, regulation, or
a government agency or court order, subpoena, or investigative demand, to
disclose the existence or terms of this Agreement, or the other party's
Confidential Information, such party shall use its reasonable efforts to
minimize such disclosure and obtain an assurance that the recipient shall
accord confidential treatment to such Confidential Information, and shall
notify the other party contemporaneously of such disclosure. Either party, in
its discretion, may terminate this Agreement for cause upon ten days' notice
and without penalty in the event of any breach of this Section. The obligations
in this Section shall survive any termination of this Agreement for a period of
two years.
16. GENERAL.
This Agreement may not be assigned by either party without the prior written
consent of the other, which consent shall not be unreasonably withheld,
conditioned or delayed, provided, however, that this Agreement shall be
binding upon and inure to the benefit of any successor in interest to Customer
resulting from, among other things, a merger, consolidation, sale of stock or
sale of substantially all of the assets of Customer. No failure on the part of
either party to exercise, and no delay in exercising, any right or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right or remedy granted hereby or
by law. This Agreement supersedes all prior or contemporaneous representations,
agreements or understandings concerning the subject matter hereof. If any term
of this Agreement, or the application of such term to any person or
circumstance, shall be held invalid, the remainder of this Agreement, or the
application of such term to persons or circumstances other than those to which
it is held invalid, shall not be affected thereby. The effective date of this
Agreement is the last date of the signatures of a duly authorized
representative of a party affixed below.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------- ----------------------------------
Customer Authorized Signature UUNET Authorized Signature
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------- ----------------------------------
Printed Name Printed Name
2/17/99 2/17/99
---------------------------------- ----------------------------------
Date Date
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SCHEDULE 1
1. PRICES
The pricing set forth in Section 3 below shall be applied to the
then-current list price set forth in the applicable service agreement.
2. EXCLUSIONS
Pricing does not apply to Equipment charges (including routers, CSUs/DSUs
and firewall hardware), Telco line charges, or any charges for Services not
specified in this Schedule 1 unless such charges are included in the Monthly
Fee for a Service specified in this Schedule 1.
3. ELIGIBLE PARTICIPANT DISCOUNT
The Eligible Participant pricing will apply only to services specified in
this Schedule 1, which may be changed from time to time.
U.S. DISCOUNTS
(CONTINENTAL US ONLY)
Unless adjusted as set forth in Section 3 of this Agreement, Customer shall
pay ** per megabit of sustained use (using UUNET's standard 95th percentile
calculation as set forth in the applicable Service Agreement): provided that
Customer agrees to pay a minimum charge based upon the Minimum Mbps Commitment
even if billing based on sustained use would be less than that below. Pricing
does not include telco start-up or monthly line charges.
COMMITMENTS AND PRICING:
MINIMUM Mbps COMMITMENT START-UP CHARGE PRICE/Mbps COMMITMENT DATE
-100 Mbps $0 ** 1/30/99
-300 Mbps $0 ** 12/31/99
-600 Mbps $0 ** 12/31/00
ORDER TYPE MINIMUM BANDWIDTH PER ORDER
T1 1.5 Mbps
T3 3.0 Mbps
OC3 30 Mbps
OC12 60 Mbps
DISCOUNTS OUTSIDE CONTINENTAL U.S.
Same as above, provided that if more than ** of the total bandwidth purchased
from UUNET is outside the continental U.S., then Customer shall pay an
additional charge of ** per Mbps for any bandwidth above that ** level.
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SCHEDULE 2
TERMS AND CONDITIONS
1. UUNET Technologies, Inc. ("UUNET") exercises no control over, and accepts no
responsibility for, the content of the information passing through UUNET's
host computers, network hubs and points of presence (the "UUNET Network").
EXCEPT AS EXPRESSLY SET FORTH IN SECTION 7 BELOW, UUNET (a) MAKES NO
WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, FOR THE SERVICES AND
EQUIPMENT IT IS PROVIDING, AND (b) DISCLAIMS ANY WARRANTY OF TITLE,
MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE. Use of
any information obtained via the UUNET Network is at Customer's own risk.
UUNET specifically denies any responsibility for the accuracy or quality of
information obtained through its services. UUNET shall not be liable for any
delay or failure in performance due to Force Majeure, which shall include
without limitation acts of God, earthquake, labor disputes, changes in law,
regulation or government policy, riots, war, fire, epidemics, acts or
omissions of vendors or suppliers, equipment failures, transportation
difficulties, or other occurrences which are beyond UUNET's reasonable
control.
2. All use of the UUNET Network and the service must comply with the
then-current version of the UUNET Acceptable Use Policy ("Policy") which is
made a part of this Agreement and is available at the following URL:
▇▇▇.▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇.▇▇▇▇. UUNET reserves the right to amend the Policy from
time to time, effective upon posting of the revised Policy at the URL or
other notice to Customer. UUNET reserves the right to suspend the service or
terminate this Agreement effective upon notice for a violation of the Policy.
Customer agrees to indemnify and hold harmless UUNET from any losses,
damages, costs or expenses resulting from any third party claim or allegation
("Claim") arising out of or relating to use of the service, including any
Claim which, if true, would constitute a violation of the Policy.
3. NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE
OR CONSEQUENTIAL DAMAGES THAT RESULT FROM CUSTOMER'S OR CUSTOMER'S USERS' USE
OF THE UUNET NETWORK AND THE SERVICE INCLUDING, WITHOUT LIMITATION, ANY SUCH
DAMAGES FOR LOSS OF DATA RESULTING FROM DELAYS, NON-DELIVERIES, MISDELIVERIES
OR SERVICE INTERRUPTIONS. Notwithstanding anything to the contrary stated in
this Agreement, Customer's sole remedies for any claims relating to this
service or the UUNET Network are set forth in Section 7 below.
4. Networks assigned from a UUNET net-block are non-portable. Network space
allocated by UUNET must be returned to UUNET in the event Customer
discontinues service.
5. Payment is due 30 days after date of invoice. Accounts are in default if
payment is not received within 30 days after date of invoice. If payment is
returned to UUNET unpaid Customer is immediately in default and subject to a
returned check charge of $25 from UUNET. Accounts unpaid 60 days after date
of invoice may have service interrupted or terminated. Such interruption does
not relieve Customer of the obligation to pay the Monthly Fee. Only a written
request to terminate Customer's service relieves Customer of the obligation
to pay the Monthly Fee. Accounts in default are subject to an interest charge
on the outstanding balance of the lesser of 1.5% per month or the maximum
rate permitted by law. Customer agrees to pay UUNET its reasonable expenses,
including attorney and collection agency fees, incurred in enforcing its
rights under these Terms and Conditions. Prices are exclusive of any taxes
which may be levied or assessed upon the Equipment or services provided
hereunder. Any such taxes shall be paid by Customer. If Customer is exempt
from otherwise applicable taxes, Customer must submit its tax identification
number and exemption certificate at the same time it submits this Agreement.
6. Billing for UUNET service will commence when a UUNET hub and a functioning
telephone circuit are prepared to route IP packets to Customer's site. The
Start-up Charge is invoiced upon acceptance of this Agreement by UUNET.
Charges for Equipment shall be invoiced upon shipment. Service is invoiced
monthly in advance, and may be canceled only by 60 days' advance written
notice. In the event of early cancellation of a Term Commitment, Customer
will be required to
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pay 75% of UUNET's standard Monthly Fee for each month remaining in the Term
Commitment. UUNET reserves the right to change the rates by notifying
Customer 60 days in advance of the effective date of the change.
7. The Service Level Agreement ("SLA") for this service, which is made a part
of this Agreement, is set forth at ▇▇▇.▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇/▇▇▇/▇▇▇▇▇.▇▇▇▇ and
applies only to customers agreeing to a Term Commitment of at least one
year. UUNET reserves the right to amend the SLA from time to time effective
upon posting of the revised SLA to the URL or other notice to Customer;
provided, that in the event of any amendment resulting in a material
reduction of the SLA's service levels or credits, Customer may terminate
this Agreement without penalty by providing UUNET written notice of
termination during the 30 days following notice of such amendment. The SLA
sets forth Customer's sole remedies for any claim relating to this service
or the UUNET Network, including any failure to meet any guarantee set forth
in the SLA. UUNET's records and data shall be the basis for all SLA
calculations and determinations. Notwithstanding anything to the contrary,
the maximum amount of credit in any calendar month under the SLA shall not
exceed the Monthly Fee and/or Start-up Charge which, absent the credit,
would have been charged to UUNET service that month (collectively the "UUNET
Fees"); provided, that the maximum amount of credit for failure to meet the
Availability Guarantee shall not exceed the sum of (a) the UUNET Fees, plus
(b) the telephone company line charge which, absent the credit, would have
been charged for such month. If Customer receives credits under this Section
in three consecutive months, Customer may terminate without penalty
(including, without limitation, the early termination penalty described
above in paragraph 6) by providing UUNET written notice of termination in
the fourth month.
8. Neither party may use the other party's name, trademarks, tradenames or
other proprietary identifying symbols without the prior written approval of
the other party. Neither party may assign or transfer any of its rights or
obligations under this Agreement without the express, prior written consent
of the other party; provided, that either party may assign or transfer this
Agreement to any affiliate of such party upon advance written notice to the
other party. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of
any other right or remedy granted hereby or by law.
9. These Terms and Conditions are applicable to Services purchased pursuant to
the Master Discounted Internet Services Agreement between UUNET
Technologies, Inc., and Customer dated February 17, 1999 and shall prevail
notwithstanding any variance with terms and conditions of any order
submitted. Activation of service shall indicate UUNET's acceptance of this
Agreement. Use of the UUNET Network constitutes acceptance of these Terms
and Conditions.