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EXHIBIT 10.35
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Agreement No. ▇▇▇-▇▇▇▇-▇▇▇
▇▇▇▇▇▇ CUSTOM SERVICE AGREEMENT
This Custom Service Agreement ("Agreement") between Sprint Communications
Company L.P. ("Sprint"), and AppliedTheory Corporation, formerly known as
AppliedTheory Communications, Inc. ("AppliedTheory", "ATC" or "Customer")
establishes the terms and conditions governing Sprint's provision of
telecommunications products and services ("Services" and "Equipment") to
Customer. This Agreement supersedes the Agreement between the parties dated
August 11, 1994.
Sprint is a common carrier providing telecommunications services pursuant to
tariffs on file with the Federal Communications Commission ("FCC") and state
regulatory commissions ("Tariff(s)"). Sprint provides enhanced voice and data
telecommunications services pursuant to Sprint's standard terms and conditions
for non-tariffed services.
In the event of a conflict between and among the provisions and attachments of
this Agreement, the inconsistency will be resolved by giving precedence in the
following order:
1. The Terms and Conditions of this Agreement, Articles 1 - 24
2. Attachment E: Sprint's Acceptable Conduct Policy for Sprint IP Products
and Services
3. Attachment A: Price Schedule dated December 30, 1999
4. Attachment B: Revised Statement of Work dated December 30, 1999
5. Attachment C: Sprint IP Services Standard Terms and Conditions (Rev.
01.99) and Terms and Conditions for Internet and Intranet Dedicated and
Dial Services (Rev. 01.99)
6. Attachment D: Sprint Terms and Conditions for Internet Service Providers
7. Sprint Internet Services, Customer Reference Guide (Ver. 1.0)
8. Attachment F: Domestic Sprint Internet and Intranet IP Products and
Services Port Availability Service Level Agreement - Performance Guarantee
(Rev. 10/23/98) and Network Delay Service Level Agreement - Performance
Guarantee (Rev. 10/23/98)
9. Attachment G: Sprint Customer Premise Equipment Standard Terms and
Conditions - Maintenance Only
10. Applicable Sprint ▇▇▇▇▇▇▇
▇▇. Order(s) for Data Communication Products and Services Form (Appendix 1)
1. TERM
1.1 AGREEMENT TERM. The term of this Agreement ("Agreement Term") and
the period during which Customer may place orders, as accepted by
Sprint (as defined in 9.2 below), under this Agreement will begin
on November 1, 1999 and will expire on October 31, 2002, unless
extended by mutual agreement of both parties (except as outlined
in 6.2C below). Upon expiration or other termination of this
Agreement, Sprint will provide Services to Customer, subject to
Tariffs or Sprint's standard terms and conditions for
non-tariffed services, at then current Tariff or standard list
prices.
1.2 ORDER TERM. The term for each order ("Order Term") for the
Services will be stated on each Order and will begin on the first
day of the month following the date the Services are installed
and accepted by Customer, in accordance with Clause 4, Acceptance
Criteria, below. The terms, conditions and prices established
under this Agreement will govern all Orders in force and effect
beyond the termination or expiration of this Agreement.
2. RATES AND DISCOUNTS
2.1. SERVICES' PRICING. Customer will receive the rates and discounts
("Discounts") on Services and Equipment in Attachment A, subject
to the terms of Sprint's Tariffs and this Agreement.
2.2. FIXED RATES. Fixed rates will remain fixed for the Agreement
Term. Percentage Discounts will remain fixed for the Agreement
Term, but Sprint may modify the underlying tariff rate (or list
price for non-tariffed services) against which Sprint applies
Discounts.
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3. PAYMENT TERMS
3.1. PAYMENT DATE. Customer will fully pay Sprint's monthly
invoice in U.S. currency within 45 days of the invoice date.
Customer will pay any applicable sales, use, excise and like
taxes that are stated separately on each invoice.
3.2. INTEREST CHARGES. If Customer fails to pay all valid charges
for Services within 45 days of the invoice date, Sprint may
charge Customer interest on those charges equal to the lesser of
1 1/2% per month or the maximum rate allowed by law. If Customer
fails to pay for Services six (6) months in arrears, Sprint
reserves the right, in addition to other remedies, to discontinue
Discounts until such failure to pay for Services is cured by
Customer.
3.3 INVOICING. Sprint will begin charging Customer for Services
on the date they are installed by Sprint and accepted by
Customer, in accordance with Clause 4, Acceptance Criteria,
below. Sprint will prorate fixed recurring charges for partial
months on a 30-day basis.
3.4 DISPUTED INVOICE CHARGES. Customer may in good faith withhold
payment of any disputed charges. But Customer will pay all
undisputed charges. A charge is not "disputed" until Customer
provides Sprint with written explanation of the disputed charge.
Customer will cooperate with Sprint, in good faith to resolve any
disputed charge expeditiously.
3.5 AUDIT PROVISION. Customer has the right to request copies of
all backup documentation from Sprint for items invoiced for the
purposes of verifying costs.
4. ACCEPTANCE CRITERIA
If the required circuit(s) and hardware are installed by Sprint, the required
software is installed and configured by Sprint, and the Service is capable of
passing traffic, the Services will be deemed accepted by Customer.
5. DELIVERY AND RETURN
5.1 DELIVERY.
A. Delivery Date. All delivery dates are approximate and are
based on current lead-times. But Sprint will use commercially
reasonable efforts to deliver, or cause to have delivered, the
Services by the delivery date specified in the Order.
B. Customer-Requested Delay.
(1) Customer may request a delay in the delivery date set
forth in the Order ("Original Delivery Date") if: (a)
the delay does not exceed 30 calendar days from the
Original Delivery Date; (b) Sprint receives Customer's
written request for the delay at least 10 days before
the Original Delivery Date; and (c) Customer pays any
additional charges, including ▇▇▇▇▇ party charges
incurred by Sprint, resulting from the delay.
(2) If the Customer-requested delay is more than 30 calendar
days from the Original Delivery Date, as approved by
Sprint, Customer will pay Sprint all charges imposed on
Sprint by third parties, provided that such third
parties were promptly notified by Sprint.
(3) If Sprint receives Customer's written notice to cancel
the affected Services on or before the 30th calendar day
from the Original Delivery Date, Customer will pay
Sprint any cancellation charges imposed on Sprint by
third parties, provided that such third parties were
promptly notified by Sprint.
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5.2 RETURN OF EQUIPMENT. No Equipment will be returned without prior
approval and specific shipping instructions from Sprint. In
addition to all other applicable charges, Customer will pay
Sprint a restock charge upon the return of Equipment if: (a) the
return is due to a Customer ordering error; (b) the product has
been damaged while in Customer's possession; (c) the return is
due to Customer's late cancellation of an Order; or (d) a restock
charge is assessed by the manufacturer.
6. MINIMUM SERVICE COMMITMENTS
6.1. FIRST MINIMUM SERVICE COMMITMENT. Customer's First Minimum
Service Commitment ("First MSC") is as follows:
A. Minimum Commitment for Term. Subject to the provisions of
Section 19 below, Customer's Minimum Commitment ("MC") for
the Term is $9,000,000 in MSC Contributory Services, as
defined in 6.3 below.
B. If Customer fails to meet its MC at the end of the
three-year Agreement Term, unless caused by Sprint's
material failure to perform under this Agreement or as a
result of a Force Majeure event, Customer will pay Sprint,
in addition to all other applicable charges for Services
rendered, the difference between the MC and Customer's
actual MSC Contributory Services Usage Charges for the
period in which Customer does not achieve the MC ("First
Shortfall Liability").
6.2 SECOND MINIMUM SERVICE COMMITMENT. Customer's Second Minimum
Service Commitment ("Second MSC") is as follows:
A. Minimum Annual Commitment. Subject to the provisions of
Section 19 below, during each "Contract Year" (defined as
the twelve (12) month period commencing on the Commencement
Date and each anniversary thereof) of this Agreement,
Customer agrees to purchase a minimum of $1,000,000
("Minimum Annual Commitment" or "MAC") in MSC Contributory
Services, as defined in 6.3 below.
B. Second Shortfall Liability. If Customer fails to meet its
MAC, unless caused by Sprint's material failure to perform
under this Agreement or as a result of a Force Majeure
event, Customer will pay Sprint, in addition to all other
applicable charges, the difference between the MAC and
Customer's actual MSC Contributory Services Usage Charges
for each period in which Customer does not achieve the MAC
("Second Shortfall Liability").
C. MAC Carry-Forward.
1. Except as specified in Subsection 6.2.C.2
below, if Customer does not satisfy its MAC, Customer
may, instead of paying the entire Second Shortfall
Liability, add a portion of the Second Shortfall
Liability, not to exceed 10% of that MAC, to the MAC
for the next Contract Year. Customer will pay to
Sprint the portion of the Second Shortfall Liability
that is not carried forward to the next Contract
Year. If Customer does not satisfy its adjusted MAC
in this Agreement's last Contract Year, then, at the
Customer's option, either: 1) Customer will pay the
unsatisfied portion of the re-adjusted MAC, or 2) the
last Contract Year may be extended for 12 months. If
Customer does not satisfy its adjusted MAC during the
last Contract Year as extended, Customer will pay
Sprint, in addition to all other charges, the
difference between its adjusted MAC and Customer's
MSC Contributory Services Usage Charges in the last
Contract Year as extended.
2. Customer will not be eligible to add a portion of any
Second Shortfall Liability to the MAC for the next
Contract Year as set forth above if Customer has
ceased to utilize the Services to a material extent
(unless due to Sprint's material breach). For purpose
of this Subsection 6.2.C.2, Customer will have ceased
to use the Sprint Services to a material extent if
either: (a) the average monthly MSC Contributory
Services Usage Charges over the previous twelve-month
period, multiplied by 12, is less than 70% of the
MAC.
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6.3 MSC CONTRIBUTORY SERVICES. The Services contributing to
Customer's MSC ("MSC Contributory Services") are: Backbone
Private Lines; Egress Ports; Backbone Engineering Consulting;
Backbone Management; Backbone Router Initialization and Upgrades
- Software; Backbone Router Installation and Upgrades - Hardware;
Installation CPE and Software; Customer Router Management;
Customer DNS and News Services Usage Charges, calculated after
all available discounts. "Usage Charges" are the variable
recurring charges or fixed monthly recurring charge for the
Services. Except as expressly provided in this Agreement, Usage
Charges excludes taxes, interest, surcharges, access line
charges, access facilities charges, other charges associated with
access, fixed recurring charges (other than specified
interexchange circuit charges), feature charges, operator service
surcharges, directory assistance charges, installation charges,
account charges, set up fees, report charges, and other
non-recurring charges.
7. REGULATORY PROGRAMS
Sprint may impose additional charges on Customer to recover amounts Sprint
is required by regulatory or other governmental authorities to collect on
behalf of or pay to others in support of statutory or regulatory programs.
Examples of these programs include, but are not limited to, the Universal
Service Fund, the Presubscribed Interexchange Carrier Charge, and
compensation to payphone service providers for use of their payphones to
access Sprint's Service.
8. ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SERVICES
Additional terms and conditions for Services are contained in ATTACHMENTS
B, C, D, E, F AND G to this Agreement.
9. ORDERS
9.1. ORDERING PROCEDURES. Customer will order Services pursuant to
Sprint's standard ordering procedures, subject to Sprint's acceptance,
that may include signing Sprint's standard Order for Data Communication
Products and Services form(s) or other applicable order forms designated
by Sprint ("Orders"). Such applicable forms are included in Appendix 1 to
this Agreement.
9.2 SPRINT ORDER ACCEPTANCE. Sprint agrees to provide Customer, subject to
availability of facilities, the Products and Services set forth in this
Agreement, provided such Orders are accepted by Sprint (which acceptance
will not be unreasonably withheld), as evidenced by the execution of the
Order by both parties. Should an Order be rejected due to the availability
of facilities or other business reason, Sprint will, upon Customer's
written request, provide Customer with a technical or business description
of such rejection. Should the rejection be due to the prior assignment of
such facilities to another customer, Sprint will accept Customer's Order
and provision such Order's Products and Services as soon as facilities
become available. In the event an accepted Order in found to be invalid
and/or incomplete, both Sprint and Customer may consider such Order null
and void until the deficiency is corrected.
10. CUSTOMER RESPONSIBILITIES
10.1. PREPARATION FOR SERVICES. Customer will:
A. at its own expense, prepare its site(s) to comply with
Sprint's installation and maintenance specifications;
B. pay Sprint any applicable charges to relocate any installed
Services, to the extent such relocation is necessary to
provide such Services;
C. provide Sprint and its suppliers reasonable access to its
premises to perform any required acts; and
D. be responsible for cabling that connects equipment not
provided by Sprint to Services.
10.2. USE OF SERVICES.
A. Customer will properly use Services and will not, nor will
it permit or assist others to, use Services for any purpose
other than their intended purpose, fail to maintain a
suitable environment according to the manufacturer's
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specifications, or tamper with Services. If Customer fails
to comply with this Section, Customer will release Sprint
from all liabilities or obligations (including any warranty
or indemnity obligation) to Customer under this Agreement
and Customer will pay Sprint all costs or damages Sprint
incurs.
B. Customer will not knowingly permit or assist others to
abuse or fraudulently use Services, including, but not
limited to, unauthorized or attempted access, alteration,
or destruction of another Sprint customer's information, or
using Services that cause interference with another
customer's or authorized user's use of the Sprint network.
If Customer fails to comply with this Section, Sprint may
suspend its performance or terminate Order(s) with no
further obligation to Customer, if Customer fails within
ten (10) days after written notice by Sprint to cure
non-compliance to this Section. Notwithstanding anything in
this Section, if Customer's failure to comply with this
Section adversely affects the performance of Sprint's
network, Sprint may take such corrective action, as it
deems appropriate, without prior notice to Customer.
11. CUSTOMER-PROVIDED HARDWARE OR SOFTWARE
11.1. CUSTOMER-PROVIDED HARDWARE OR SOFTWARE. Customer will install,
operate, and maintain any non-Sprint provided hardware or
software ("Customer-provided"). Sprint is not responsible for the
information transmitted or received on Customer-provided hardware
or software. If Customer provides its own router to interface
with the Services, then Customer is fully responsible for the
installation, maintenance, and configuration of such
Customer-provided router, however, Sprint will have the right, in
cooperation with Customer, to set the initial configuration for
the router interface into the Services.
11.2. SERVICE IMPAIRMENT. Customer will ensure that Customer-provided
hardware or software is compatible with Services, except if such
hardware and software is based upon specifications provided by
Sprint. If Customer-provided hardware or software, which does not
comply with Sprint specifications, impairs Customer's use of
Services, Customer will continue to pay Sprint for Services. Upon
notice from Sprint that the hardware or software not provided by
Sprint is causing or is likely to cause hazard, interference, or
service obstruction Customer will eliminate such hazard,
interference, or service obstruction. Sprint reserves the right
to disconnect the Services until such hazard, interference, or
service obstruction is corrected. If requested by Customer,
Sprint may, at its then-current rates, troubleshoot difficulties
caused by hardware or software not provided by Sprint.
11.3 EQUIPMENT ALTERATION. Customer is responsible for making any
alteration or attachment ("Equipment Alteration") to Equipment
for its use, and for the results of the Equipment Alteration.
11.4 REPLACEMENT OF CUSTOMER-PROVIDED HARDWARE OR SOFTWARE. At
Customer's request, Sprint will replace Customer-provided
hardware or software (except for Equipment Alteration) when those
parts are directly interchangeable with Sprint maintenance parts.
Those parts will be replaced at Sprint's then-current public list
prices.
11.5 SERVICE CHANGES. Sprint is not liable if any changes in Services
cause Customer-provided hardware or software to become obsolete,
require alteration, or affect performance of the
Customer-provided hardware or software.
11.6 ROUTERS. Customer may provide its own routers if Sprint gives
advance written approval for those routers (including associated
software), which shall not be unreasonably withheld or delayed.
12. PERSONAL INJURY AND PROPERTY DAMAGE
Each party will indemnify the other party, its directors, employees,
agents and their successors against all claims, damages or liabilities,
including costs and reasonable attorneys' fees, for claims that arise
directly from performance of this Agreement made for personal injury,
death, or damage to personal property resulting from the negligent or
willful misconduct, errors, or omissions of the indemnifying party or its
subcontractors, directors, employees or agents. If the claim of a party's
employee is covered under applicable workers' compensation laws, that
claim will not be indemnified under this Agreement.
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13. THIRD PARTY CLAIMS
Customer will indemnify Sprint against all claims, damages, or
liabilities, including reasonable attorneys' fees, third party claims for
libel, slander, invasion of privacy, or private record or data invasion or
alteration arising from the use of the Services, unless such claims result
from any action or inaction of Sprint or from any service provided by
Sprint pursuant to this Agreement.
14. LIMITATIONS OF LIABILITY
14.1. REMEDIES. Customer's exclusive remedies are those in Sprint's
Tariffs, Sprint's standard terms and conditions for non-tariffed
services, and this Agreement.
14.2. DIRECT DAMAGES. Sprint's entire liability for direct and
liquidated damages caused by its failure to perform its
obligations under this Agreement will not exceed monthly charges
paid by Customer for Products and Services in the most recent
preceding twelve (12) month period, excluding Service Credits.
Sprint is not liable for any incidental damage to Customer's
premises for Services installation. This limitation of liability
will not apply to claims under Sections 12, 13 or 15.
14.3. CONSEQUENTIAL DAMAGES. NEITHER PARTY WILL BE LIABLE FOR ANY
CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES FOR ANY CAUSE OF
ACTION, WHETHER IN CONTRACT OR TORT. Consequential, incidental,
and indirect damages include, but are not limited to, lost
profits, lost revenues, and loss of business opportunity, whether
or not the other party was aware or should have been aware of the
possibility of these damages.
14.4. DISCLAIMER. THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, WARRANTIES OF NON-INFRINGEMENT, AND ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, NOT EXPLICITLY STATED IN THIS
AGREEMENT ARE EXCLUDED FROM THE SERVICES AND THIS AGREEMENT.
14.5. UNAUTHORIZED ACCESS. Sprint is not liable in contract or tort for
unauthorized access by an individual or entity to Customer's
transmission facilities or Customer premise equipment, or for
unauthorized access to, or alteration, theft, or destruction of
Customer's data files, programs or other information through
accident, wrongful means or any other cause, unless such
unauthorized access is caused by the gross negligence of Sprint.
14.6. SERVICES ON CUSTOMER PREMISES. Customer is liable for all damages
to Services located on Customer's premises excluding reasonable
wear and tear, and Sprint-caused damages. After an Order or this
Agreement expires or terminates, Customer will surrender to
Sprint any Sprint-owned property.
15. PROPRIETARY RIGHTS
15.1. THIRD PARTY CLAIMS. If Customer notifies Sprint promptly in
writing of a third party claim, and gives Sprint full and
complete authority, information and assistance (at Sprint's
expense) for the claim's defense and settlement, and if Customer
or its agents do not by any act (including any admission or
acknowledgement) materially impair or compromise a claim's
defense, Sprint will defend any third party claim, and pay all
court-awarded damages or out of court settlements agreed to by
Sprint, brought against Customer based on an allegation that
Sprint-provided Services or Customer's use of the Services as
provided by Sprint infringe any copyright, trade-secret, or
patent, protected under United States law. For any third party
claims that Sprint receives, or to minimize the potential for a
claim, Sprint may at its option and expense either (1) procure
the right for Customer to continue using the Services; (2)
replace or modify the Services with comparable Services; or (3)
terminate the Services with a pro-rata refund of all monies paid
in advance by Customer.
15.2. PATENT INDEMNIFICATION. Customer will indemnify Sprint against
all claims, damages and liabilities for claims for patent or
copyright infringement from the use of Customer-provided
hardware or software.
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16. PROPERTY RIGHTS PROTECTION
16.1. LICENSE.
A. Sprint grants Customer a non-exclusive and non-transferable
license to use Sprint-provided software, including any
related documentation, solely to enable Customer to use the
Services for its own internal operation. Customer, as
licensee, is granted no rights to use software on behalf of
others, except incidental where such use is necessary to
permit Customer to use Services, and Sprint grants no
rights for time share or service bureau activities.
B. Sprint grants no rights to Customer to any source code and
Customer will not reverse engineer, decompile, modify,
enhance, copy or prepare any derivative works from the
Sprint-provided software. Sprint grants no licenses to
modify the Services or software, or combine the Services or
software with any other services not provided by Sprint.
C. Customer will keep a current record of the location of any
Sprint-provided software and Customer will return the
software to Sprint when Customer ceases using the software,
or no later than 15 days after termination of Services for
any reason. If Sprint authorizes in writing the making of
any software copies, the copies must reproduce the
copyright or any other proprietary legends appearing on the
original copy.
16.2. TITLE.
A. Sprint-Provided Software or Equipment. Sprint or its
suppliers will retain title and property rights to
Sprint-Provided software and equipment, whether or not they
are embedded or attached to realty. Customer neither owns
nor will it acquire any claim or right of ownership to:
1. Sprint-provided equipment not purchased by Customer;
2. software (including the original media and all
subsequent copies of the software, regardless of the
media's form) and associated documentation (including
copies);
3. any patents, copyrights, trademarks, or other
intellectual property related to Section 14.1; or
4. IP addresses assigned to Customer, except Class C
address 169.130 and Autonomous System Number 1785,
which are in the process of being transferred to
Customer. The Customer will assume all responsibility
for acquiring and maintaining IP address from the
assigning authority.
B. Title to Customer-Purchased Equipment. Sprint will pass
title to purchased Equipment to Customer upon delivery.
Sprint will retain a security interest in
Customer-purchased Equipment until the Equipment is paid
for in full. Sprint may require that plates or markings be
affixed to specific Equipment to: (a) indicate Sprint's
ownership interest in the Equipment until Sprint receives
full payment of the purchase price; and (b) identify the
specific Equipment on which Sprint will provide Maintenance
Service.
16.3. TRADE SECRET PROTECTION. Sprint Services are valuable trade
secrets of Sprint or its suppliers. Customer will protect any
software it uses that is provided with or included in Services.
Customer will not examine, copy, alter, reverse engineer or
misuse the software.
16.4 DAMAGES. Sprint will pass risk of loss or damage to equipment to
Customer upon delivery and inspection. Sprint will pass title to
purchased equipment to Customer upon delivery. Sprint will retain
a security interest in purchased equipment until the equipment is
paid for in full.
17. ALLOWANCE FOR SERVICE INTERRUPTIONS (SERVICE CREDITS)
17.1 Sprint will provide Services to Customer that meet applicable
service level agreements ("SLAs"). Customer will be entitled to
the SLA's exclusive remedies in lieu of other remedies (other
than as provided under Section 19. 1D), if the Services fail to
meet the performance guarantees outlined in Attachment F,
Domestic Sprint Internet and Intranet IP Products and Services
Port Availability Service Level Agreement - Performance
Guarantee (Rev. 10/23/98) and Network Delay Service Level
Agreement - Performance Guarantee (Rev. 10/23/98). Customer
shall not receive Service Credit(s) if an interruption is (a)
caused by the negligence or willful misconduct of
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Customer or others authorized by Customer to use the Services
provided by Sprint: (b) due to failure of power, or any problem of
any type occurring at the Customer's side of the Service
Demarcation; (c) caused by the failure of access to Customer's
network, unless such failure is solely caused by Sprint; (d) a
result of scheduled maintenance, or (e) due to any cause beyond
Sprint's control.
17.2 If Sprint's Standard Service Level Agreements for those Services
covered by the SLAs in Attachment F are or become more favorable
than the SLAs in Attachment F, Sprint will apply the Standard
Service Level Agreements to those applicable Services.
18. TRANSITION
Upon execution of this Agreement, the parties will begin to transition the
network and services procured under the Agreement dated August 11, 1994.
Sprint acknowledges that Customer has met all commitments required under
the 9/11/94 Agreement, including minimum revenue guarantees, and will not
assess any termination penalties, except for third party charges imposed
on Sprint, which may be associated with early termination of the 8/11/94
Agreement, disconnection of any circuits, leases or other services and
products under the Agreement.
19. TERMINATION
19.1. SERVICE ELEMENT TERMINATION.
A. If Customer terminates any Order before the end of the Order Term,
Sprint may charge Customer the Termination Charges as stated
below.
1. Customer will pay Sprint a lump-sum amount equal to the
difference between the rates applicable to the Order Term and
the rates applicable to the actual last 12-month term completed
in effect before termination of the Order, multiplied by the
actual number of months in effect before termination of the
Order. For example, if Customer has a 3-year Order Term and
terminates the Order effective in the 16th month of the Order
Term, Customer will pay Sprint the difference between the
3-year Order Term rates and the 1-year Order Term rates,
multilied by 16.
2. Customer will pay Sprint any third-party charges incurred by
Sprint resulting from termination of the Order.
3. Installation Waivers. Customer will pay Sprint a pro-rated
amount of any waived installation charges based on the number
of months remaining in the Initial Order Term.
B.. Replacement Service. Customer will not be liable for the
Termination Charges, as specified in subsections 19.1 A above,
if another Sprint service, with an equal or greater monthly
price, is ordered at the same time the notice of termination is
received. In addition, the replacement service must have an
Order Term no less than the number of remaining months in the
Initial Term, or 1 year, whichever is greater.
C. Failure to Meet Service Level Agreement. If Sprint fails to
meet the Service Level Agreements set forth in Attachment F,
Customer will notify Sprint. If Sprint does not cure the
problem within 60 days from the date of Customer's notice, then
Customer may, upon written notice to Sprint, terminate the
affected Service and not be liable for the Termination Charges
specified in subsections 19.1 A above.
19.2. TERMINATION OF THIS AGREEMENT. The Discounts in this Agreement
are based on Customer's commitment to purchase Services for the
entire Agreement Term. If Sprint terminates this Agreement due to
Customer's material breach, or Customer terminates this Agreement
prior to the expiration of the Agreement Term (unless due to
Sprint's material breach), Customer will pay to Sprint, in
addition to all other applicable charges for Services rendered,
and any unpaid
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shortfall in the Second MSC for previous completed Contract
Years, the applicable Termination Charge from the table below
based on the Contract Year in which termination occurs:
------------------------------------- --------------------------------
Contract Year in which termination Termination Charge
occurs
------------------------------------- --------------------------------
1 $4,500,000
------------------------------------- --------------------------------
2 $2,000,000
------------------------------------- --------------------------------
3 $1,000,000
------------------------------------- --------------------------------
The Termination Charges contained in this Section 19.2 are
Sprint's exclusive remedies for Customer's termination of the
Agreement prior to the expiration of the Agreement term.
20. MATERIAL FAILURE BY SPRINT
If Sprint materially fails to provide Services in accordance with the
Agreement or breaches a material term of this Agreement, Customer will
provide prompt written notice to Sprint detailing the failure. If Sprint
does not cure the failure within a reasonable time, not to exceed 30 days,
then Customer may, upon five (5) days' written notice to permit internal
management escalation, terminate this Agreement without incurring any
termination liability, except Customer will repay all Service Credits
attributable to such failure, issued under this Agreement. Sprint's
material failure does not include a failure caused by circumstances beyond
Sprint's control including, but not limited to, a failure caused by: (1) a
local exchange carrier; (2) Customer premise equipment (not provided by
Sprint); or (3) Customer.
21. PROPRIETARY INFORMATION
21.1. NONDISCLOSURE AGREEMENT. This Agreement and any information
concerning its terms and conditions are Sprint's proprietary
information and are governed by the parties' nondisclosure
agreement. The term of the parties' nondisclosure agreement is
extended to be coterminous with the Agreement Term. Customer
agrees not to disclose this Agreement or any information in this
Agreement to any third party. Notwithstanding the foregoing, both
parties may make such disclosures, as necessary, to comply with
Securities and Exchange Commission (SEC) regulations.
21.2. NONDISCLOSURE REQUIREMENTS. If the parties have not executed a
nondisclosure agreement, the following provisions will govern the
parties' exchange of information.
A. During the Agreement Term and for a 3 year period after the
Agreement Term, neither party will disclose any Agreement
terms, including pricing, or the other party's proprietary
information. Proprietary information will remain the
property of the disclosing party. The obligation not to
disclose software and related information will survive
after this 3 year period. Customer will only disclose the
software to its employees who have a need to know.
B. The receiving party may use the proprietary information
only to further the proposed relationship between the
parties. Proprietary information may not be disclosed to
any third party except upon written consent of the
disclosing party. No rights, licenses, trademarks,
inventions, copyrights, or patents are granted under this
Agreement.
C. Proprietary information disclosed to the other party must
be clearly identified. Written proprietary information must
be clearly marked in a conspicuous place as proprietary.
Verbal proprietary information must be confirmed in writing
within 15 days following disclosure. Proprietary
information includes, but is not limited to, all tangible,
intangible, present and future information such as:
(1) financial information including pricing;
(2) technical information including software, research,
development, procedures, algorithms, data, designs and
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know-how; and
(3) business information including operations, planning,
marketing interests and products.
D. Proprietary information does not include information that is:
(1) published or is in the public domain through no fault
of the receiving party;
(2) within the receiving party's legitimate possession
prior to disclosure with no confidentiality
obligations;
(3) lawfully received from a third party having rights
with no restriction;
(4) independently developed by the receiving party
without breaching this Agreement; or
(5) revealed with the disclosing party's consent.
E. If the proprietary information is required to be produced
by court order or government authority, the receiving party
must immediately notify the disclosing party of that
obligation. The disclosing party may move the ordering
court or authority for a protective order or other
appropriate relief.
22. FORCE MAJEURE
22.1. FORCE MAJEURE LIABILITY. Neither party will be responsible for
any delay, interruption or other failure to perform under this
Agreement due to acts beyond the control of the responsible
party. Force majeure events include, but are not limited to:
natural disasters (e.g. lightning, earthquakes, hurricanes,
floods); wars, riots, terrorist activities, and civil commotions;
cable cuts, local exchange carriers' activities, and other acts
of third parties; explosions and fires; embargoes, strikes, and
labor disputes; and governmental decrees.
22.2. TERMINATION. The affected party will give notice to the other
party of any force majeure event. Upon notice, either party may
cancel or delay performance without liability (except for payment
of any outstanding amounts due the other party) during the force
majeure event. If the event continues for more than 60 days and
adversely and materially impacts the affected party, that party
may terminate any affected elements of Services without
liability, or the Agreement without liability (except for payment
of a prorated portion of all Credits issued under this Agreement)
if a majority of Services are affected.
23. TARIFFS
23.1. APPLICABILITY. All terms and conditions in Sprint FCC Tariff No.
12 apply to this Agreement. Rates, charges and discounts for call
types, service elements, features and other Services not in this
Agreement are in the applicable Sprint Tariff(s) or public price
list(s).
23.2. TARIFF WITHDRAWAL. If Sprint withdraws any tariff that applies to
Services in this Agreement, the tariff terms and conditions then
in effect will continue to apply to this Agreement. After Sprint
withdraws any applicable tariff, this Agreement will control over
any inconsistent provision in the withdrawn tariff. But Sprint
may modify any tariff rate or list price that is not fixed by
this Agreement.
24. MISCELLANEOUS TERMS AND CONDITIONS
24.1. YEAR 2000 COMPLIANCE. Sprint's Services will operate as specified
in this Agreement during the 20th and 21st centuries. Sprint will
make reasonable efforts to cure any material failure to provide
Services caused solely by year 2000 defects in Sprint's hardware,
software or systems. Due to the interdependence among
telecommunications companies and the interrelationship with
non-Sprint processes, equipment and systems, Sprint is not
responsible for failures caused by circumstances beyond its
control including, but not limited to, failures caused by: (1) a
local exchange carrier; (2) Customer premise equipment not
provided by Sprint; or (3) Customer. In addition, Sprint does not
ensure compatibility between Sprint Services and non-Sprint
Services used by Customer.
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24.2. RELIANCE. In accepting this Agreement, Customer is not relying on
any representations or promises not in this Agreement. When
signed by the parties this Agreement will: (1) constitute the
parties' entire understanding regarding Services; and (2)
supersede all agreements or discussions, oral or written,
regarding Services, unless explicitly stated in this Agreement.
24.3. DOMESTIC DEFINITION. The term "Domestic" means the ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ and the District of Columbia for:
Sprint Frame Relay Products and Services; Sprint Enhanced Frame
Relay Products and Services; Sprint IP Services; Sprint Managed
Network Products and Services; Sprint X.25 Products and Services;
and Sprint ATM Services. Otherwise, "Domestic" and other
geographic terms are defined in the applicable Sprint Tariffs.
24.4. INDEPENDENT CONTRACTOR. Sprint is an independent contractor under
this Agreement. The parties' relationship and this Agreement will
not constitute or create an association, joint venture,
partnership, or other form of legal entity or business enterprise
between the parties, their agents, employees or affiliates.
24.5. NO WAIVER OF RIGHTS. If either party fails to enforce any right
or remedy under this Agreement, that failure is not a waiver of
the right or remedy for any other breach or failure by the other
party.
24.6. NO THIRD PARTY BENEFICIARIES. This Agreement's benefits do not
extend to any third party, unless expressly stated in this
Agreement.
24.7 USE OF NAME, SERVICE MARKS, TRADEMARKS OR TRADE SECRETS. In
suitable advertising, press releases and sales presentations,
Customer may only identify Sprint as its service-provider and
Sprint may only identify Customer as its customer. Other than the
aforementioned identification, Sprint and Customer will not use
the name, service marks, trademarks, or trade secrets of the
other party or any of its affiliates for any purpose without the
other party's written consent, which will not be unreasonably
withheld.
24.8. AMENDMENT. Customer and Sprint may modify this Agreement only by
written amendment signed by the parties' officers or authorized
designees. Any oral agreement contrary to this Agreement's terms
is not admissible in any dispute, whether in a court of law or
arbitration.
24.10 NON-ASSIGNMENT. Neither party will assign or delegate its rights
or obligations under this Agreement to any person, corporation,
or other entity without the other party's written consent, which
consent shall not be unreasonably withheld. Notwithstanding the
foregoing, either party may assign this Agreement to another
entity, which 1) controls, is under common control with or is
controlled by such party or 2) succeeds (whether by merger,
reorganization, sale of assets or otherwise) to the business of
the party.
24.11. SEVERABILITY. If any provision of this Agreement is illegal or
unenforceable, the Agreement's unaffected provisions will remain
in effect. Sprint and Customer will negotiate a mutually
acceptable replacement provision for the illegal or unenforceable
provision consistent with the parties' original intent.
24.12. GOVERNING LAW. This Agreement will be governed by applicable
federal laws and regulations and the law of Delaware excluding
choice of law principles.
24.13. WAIVER OF JURY TRIAL. The parties mutually, expressly,
irrevocably and unconditionally waive trial by jury for any
proceedings arising out of, under, or in connection with this
Agreement. This Section survives the termination of the
Agreement.
24.14. ARBITRATION. Any dispute arising out of or relating to this
Agreement may, at the option of the parties, be finally settled
by arbitration. If the parties agree to arbitration, it will be
in accordance with the rules of the American Arbitration
Association. The arbitration will be governed by the United
States Arbitration Act, 9 U.S.C. Sect. 1 et seq., and judgment
upon the award may be entered by any court with jurisdiction.
The arbitration will be held in a jurisdiction mutually agreed
to by the parties.
24.15. RULES OF CONSTRUCTION. No rule of construction requiring
interpretation against the draftsman will apply in this
Agreement's interpretation.
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24.16. NOTICE. Any notice required under this Agreement or related to
a dispute must be submitted in writing to the appropriate
party's address shown below. If a notice relates to a dispute,
Customer must provide a copy to Sprint at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Law
Department/Marketing and Sales.
24.17. HEADINGS. Headings are for reference only and have no effect on
any provision's meaning.
24.18. ALTERATIONS. Alterations to this Agreement will not be valid
unless accepted in writing by a Sprint officer or authorized
designee.
24.19. EFFECTIVE DATE. To become effective, this Agreement must be
signed by a Customer representative, delivered to Sprint on or
before December 31, 1999, and signed by a Sprint officer or
authorized designee.
APPLIEDTHEORY COMMUNICATIONS, INC. SPRINT COMMUNICATIONS COMPANY L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ III By: /s/ ▇▇▇▇▇▇ ▇. Van Dorselaer
-------------------------------------- -------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ III Name: ▇▇▇▇▇▇ ▇. Van Dorselaer
------------------------------------ -----------------------------------
(Print/Type) (Print/Type)
Title: Vice President Title: Vice President
----------------------------------- ----------------------------------
Date: 12/31/99 Date: 1/12/00
------------------------------------ -----------------------------------
Address for Notice: Address for Notice:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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