AMENDMENT NO. 2 TO INTERNET SERVICE RESALE AGREEMENT
This AMENDMENT NO. 2 (the "Amendment") to the INTERNET SERVICE RESALE
AGREEMENT is entered into effective August 1, 2001 (the "Effective Date"), by
and among SBC Communications Inc., SBC Internet Communications, Inc., Prodigy
Communications Corporation and Prodigy Communications Limited Partnership.
Capitalized terms used but not defined herein shall have the meaning assigned to
them in the Internet Service Resale Agreement.
Whereas, the Parties have entered into an Internet Service Resale
Agreement dated as of January 1, 2001 (the "Resale Agreement");
Whereas, the Parties each desire to enter into this Amendment for the
purpose of amending the Resale Agreement;
Whereas, Section 11.6 of the Resale Agreement permits the Parties to
vary, amend or extend the Resale Agreement by written agreement executed and
delivered by duly authorized officers or representatives of the respective
Parties; and
Whereas, the Parties each desire that, except to the extent amended by
this Amendment, all terms of the Resale Agreement shall remain in full force and
effect without amendment, change or modification.
NOW, THEREFORE, in consideration of the mutual agreements of the
Parties contained herein and in the Resale Agreement, the Parties hereto agree
as follows:
1. Section 3.4(c)(i):
A new subsection (D) of Section 3.4(c)(i) of the Resale Agreement shall
be added as follows:
(D)(1) Notwithstanding the foregoing, SBC or its Affiliates
shall be entitled to reduce each monthly payment to Operating
Partnership by the amount of the Total SBC Broadband Access
Subscriber Credit for Early Cancellation SBC Broadband Access
Subscribers. From the Effective Date until December 31, 2001,
(the "Initial Period") the phrase "Early Cancellation SBC
Broadband Access Subscribers" shall mean any SBC Broadband
Access Subscriber who: 1) did not register and authenticate as
a SBC Broadband Access Subscriber; and 2) was issued a service
credit by SBC; and 3) whose service was discontinued or
cancelled. From and after January 1, 2002, (the "Remaining
Period") the phrase "Early Cancellation SBC Broadband Access
Subscribers" shall mean any SBC Broadband Access Subscriber
who (1) did not register and authenticate as a SBC Broadband
Access Subscriber, and (2) was issued a service credit by SBC;
and (3) whose service was discontinued or cancelled. For each
Early Cancellation SBC Broadband Access Subscriber, the "SBC
Broadband Access Subscriber Credit" shall be the amount that
SBC has paid Operating Partnership for the Prodigy Resold
Service for such Early Cancellation SBC Broadband Access
Subscriber but, in no event, shall the amount exceed (i)
during the Initial Period four (4) times or during the
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Remaining Period two (2) times the Base Wholesale Price
applicable to the time period during which the Early
Cancellation SBC Broadband Access Subscriber was a SBC
Broadband Access Subscriber. The "Total SBC Broadband Access
Subscriber Credit" shall be the sum total of each individual
SBC Broadband Access Subscriber Credit(s) calculated for the
applicable monthly period.
2. Section 3.4(c)(ii):
A new subsection (D) of Section 3.4(c)(ii) of the Resale Agreement
shall be added as follows:
(1) Notwithstanding the foregoing, SBC or its Affiliates shall
be entitled to reduce each monthly payment to Operating
Partnership by the amount of the Total SBC Business Narrowband
Access Subscriber Credit for Early Cancellation SBC Business
Narrowband Access Subscribers. During the Initial Period, the
phrase "Early Cancellation SBC Business Narrowband Access
Subscribers" shall mean any SBC Business Narrowband Access
Subscriber who 1) did not register and authenticate as a SBC
Business Narrowband Access Subscriber; and 2) was issued a
service credit by SBC; and 3) whose service was discontinued
or cancelled. During the Remaining Period the phrase "Early
Cancellation SBC Narrowband Access Subscribers" shall mean any
SBC Business Narrowband Access Subscriber who did not register
and authenticate as a SBC Business Narrowband Access
Subscriber, (2) was issued a service credit by SBC, and (3)
whose service was discontinued or cancelled. For each Early
Cancellation SBC Business Narrowband Access Subscriber, the
"SBC Business Narrowband Access Subscriber Credit" shall be
the amount that SBC has paid Operating Partnership for the
Prodigy Resold Service for such Early Cancellation SBC
Business Narrowband Access Subscriber but, in no event, shall
the amount exceed (i) during the Initial Period four (4) times
or (ii) during the Remaining Period two times the Business
Customer Narrowband Wholesale Price applicable to time period
during which the Early Cancellation SBC Business Narrowband
Access Subscriber was a SBC Business Narrowband Access
Subscriber. The "Total SBC Business Narrowband Access
Subscriber Credit" shall be the sum total of each individual
SBC Business Narrowband Access Subscriber Credit(s) calculated
for the applicable monthly period.
3. Section 3.4(d):
Section 3.4(d) of the Resale Agreement shall be amended as follows:
(d) If in any of the following twelve (12) month periods, SBC, its
Affiliates and its distributors of the Resold Prodigy Service in the aggregate
procure fewer gross additional Broadband Access Subscribers
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than SBC's Broadband Access Subscriber Commitment for such period (set forth
below), SBC or its Affiliate shall pay Operating Partnership the product of (i)
six (6), (ii) the Base Wholesale Price applicable during such period, except
for such period(s) in which the Base Wholesale Price is $5.00, in which case,
solely for purposes of this calculation $6.00 shall be substituted for the Base
Wholesale Price, and (iii) the difference between (A) the Broadband Access
Subscriber Commitment for such period, and (B) the actual aggregate gross
additional Broadband Access SBC Subscribers procured by SBC, its Affiliates and
their respective distributors during such period; provided, however, for
purposes of calculating the foregoing payment, the Broadband Access Subscriber
Commitment for a Broadband Shortfall Period shall be reduced by three (3) for
every Narrowband Access Subscriber procured by SBC, its Affiliates and their
distributors (whether such Narrowband Access Subscribers are procured by SBC,
its Affiliates or their distributors on behalf of Prodigy or its Affiliates
pursuant to the Sales Agency Agreement or procured by SBC, its Affiliates or
their distributors pursuant to this Agreement) that is in excess of the
Narrowband Access Subscriber Commitment for such period. In addition, if in any
of the following twelve (12) month periods, SBC, its Affiliates and its
distributors in the aggregate procure fewer gross additional Narrowband Access
Subscribers (whether such Narrowband Access Subscribers are procured by SBC,
its Affiliates or their distributors on behalf of Prodigy or its Affiliates
pursuant to the Sales Agency Agreement or procured by SBC, its Affiliates or
their distributors pursuant to this Agreement) than SBC's Narrowband Access
Subscriber Commitment for such period (set forth below), SBC or its Affiliate
shall pay Operating Partnership the product of (i) six (6), (ii) the Base
Wholesale Price applicable during such period, except for such period(s) in
which the Base Wholesale Price is $5.00, in which case, solely for purposes of
this calculation $6.00 shall be substituted for the Base Wholesale Price, and
(iii) the difference between (A) the Narrowband Access Subscriber Commitment
for such period, and (B) the actual aggregate gross additional Narrowband
Access SBC Subscribers procured by SBC, its Affiliates and their respective
distributors during such period (whether such Narrowband Access Subscribers are
procured by SBC, its Affiliates or their distributors on behalf of Prodigy or
its Affiliates pursuant to the Sales Agency Agreement or procured by SBC, its
Affiliates or their distributors pursuant to this Agreement); provided,
however, for purposes of calculating the foregoing payment, the Narrowband
Access Subscriber Commitment for such Narrowband Shortfall Period shall be
reduced by one (1) for every three (3) Broadband Access Subscribers procured by
SBC, its Affiliates and their distributors that is in excess of the Broadband
Access Subscriber Commitment for such period.
If in any of the following twelve (12) month periods (an "EXCESS
BROADBAND PERIOD"), SBC, its Affiliates and its distributors procure more gross
additional Broadband Access Subscribers in such period than SBC's Broadband
Access Subscriber Commitment for such period ("EXCESS BROADBAND SUBSCRIBERS"),
SBC or its Affiliate shall be entitled, at SBC's election, (i) to reduce the
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Broadband Access Subscriber Commitment for subsequent periods by the amount of
the Excess Broadband Subscribers for such period, (ii) to offset amounts payable
to Prodigy under this Section 3.4(d) in subsequent periods in an amount equal to
the product of (A) the number of Excess Broadband Subscribers, (B) the Base
Wholesale Price for such Excess Broadband Period, except for such period(s) in
which the Base Wholesale Price is $5.00, in which case, solely for purposes of
this calculation $6.00 shall be substituted for the Base Wholesale Price, and
(C) six (6), or (iii) to receive a payment from Prodigy, but only up to the
amount of any payments previously made by SBC to Prodigy or Operating
Partnership pursuant to this Section 3.4(d), equal to the product of (A) the
number of Excess Broadband Subscribers, (B) the Base Wholesale Price for such
Excess Broadband Period, except for such period(s) in which the Base Wholesale
Price is $5.00, in which case, solely for purposes of this calculation $6.00
shall be substituted for the Base Wholesale Price, and (C) six (6).
If in any of the following twelve (12) month periods (an "EXCESS
NARROWBAND PERIOD"), SBC, its Affiliates and its distributors procure more gross
additional Narrowband Access Subscribers in such period (whether such Narrowband
Access Subscribers are procured by SBC, its Affiliates or their distributors on
behalf of Prodigy or its Affiliates pursuant to the Sales Agency Agreement or
procured by SBC, its Affiliates or their distributors pursuant to this
Agreement) than SBC's Narrowband Access Subscriber Commitment for such period
("EXCESS NARROWBAND SUBSCRIBERS"), SBC or its Affiliate shall be entitled, at
SBC's election, (i) to reduce the Narrowband Access Subscriber Commitment for
subsequent periods by the amount of the Excess Narrowband Subscribers for such
period, (ii) to offset amounts payable to Prodigy under this Section 3.4(d) in
subsequent periods in an amount equal to the product of (A) the number of Excess
Narrowband Subscribers, (B) the Base Wholesale Price for such Excess Narrowband
Period, except for such period(s) in which the Base Wholesale Price is $5.00, in
which case, solely for purposes of this calculation $6.00 shall be substituted
for the Base Wholesale Price, and (C) six (6), or (iii) to receive a payment
from Prodigy, but only up to the amount of any payments previously made by SBC
to Prodigy or Operating Partnership pursuant to this Section 3.4(d), equal to
the product of (A) the number of Excess Narrowband Subscribers, (B) the Base
Wholesale Price for such Narrowband Excess Period, except for such period(s) in
which the Base Wholesale Price is $5.00, in which case, solely for purposes of
this calculation $6.00 shall be substituted for the Base Wholesale Price, and
(C) six (6).
The foregoing payments shall be made, if applicable, by SBC or its
Affiliate to Prodigy annually; it being understood and acknowledged by the
Parties that the payment related to any shortfall in the Narrowband Access
Subscriber Commitment, if any, is the same as and not duplicative of SBC's
Narrowband Access Subscriber Commitment payment in Section 3.6(b) of the Sales
Agency Agreement.
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Period Broadband Access Subscriber Narrowband Access Subscriber
Commitment Commitment
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January 1, 2001 to December 31, 2001 700,000 100,000
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January 1, 2002 to December 31, 2002 650,000 75,000
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January 1, 2003 to December 31, 2003 600,000 50,000
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January 1, 2004 to December 31, 2004 500,000 25,000
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January 1, 2005 to December 31, 2005 500,000 25,000
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January 1, 2006 to December 31, 2006 400,000 25,000
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January 1, 2007 to December 31, 2007 200,000 25,000
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January 1, 2008 to December 31, 2008 100,000 25,000
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January 1, 2009 to December 31, 2009 100,000 25,000
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For the purpose of this Section 3.4(d), no early cancellation SBC
Broadband Access Subscribers or Early Cancellation SBC Business
Narrowband Access Subscribers shall be considered in determining
whether SBC has met its Broadband Access Subscriber Commitment or its
Narrowband Access Subscriber Commitment for any Period specified in
this Section 3.4(d).
IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly
executed in its name and on its behalf, this ______ day of ___________ 2001.
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SBC COMMUNICATIONS INC.
By:
-----------------------------------
Name:
Title:
SBC INTERNET COMMUNICATIONS, INC.
By:
-----------------------------------
Name:
Title:
PRODIGY COMMUNICATIONS CORPORATION
By:
-----------------------------------
Name: Xxxx Xxxx
Title: CEO and President
PRODIGY COMMUNICATIONS LIMITED PARTNERSHIP
By:
Prodigy Communications Corporation, as
general partner of Prodigy Communications
Limited Partnership
By:
-----------------------------------
Name: Xxxx Xxxx
Title: CEO and President
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