EXHIBIT 10.2
AMENDMENT NO. 1 TO INTERNET SERVICE RESALE AGREEMENT
This AMENDMENT NO. 1 (the "Amendment") to the INTERNET SERVICE
RESALE AGREEMENT is entered into as of the 13th day of June, 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. DEFINITIONS:
The following definitions contained in Article I, Definitions are
amended to provide as follows:
"BROADBAND" or "BROADBAND ACCESS" means the capability for
Internet connectivity, whether or not the subscriber uses such capability,
between an Internet subscriber's location and up to and including the
backbone and any GSP through DSL access or other forms of high speed access
with one or more speeds at least one of which is at least 144 kilobits per
second downstream, including connectivity by means of coaxial cable, wireless
and satellite transmissions.
* * *
"SBC SUBSCRIBER" means any Subscriber of a Retail ISP
Service that utilizes the Resold Prodigy Service who acquires such Retail ISP
Service from SBC, its Affiliates or any of their respective distributors,
and, without limitation, shall specifically include (i) any Subscriber for
which a zero dollar value xxxx is recorded by SBC or any of its Affiliates in
its billing system and (ii) all employee and compensation accounts for such
Retail ISP Service as well as other accounts for such Retail ISP Service that
SBC or its Affiliates may be providing at no charge or a discounted charge.
Should SBC or any of its Affiliates change the timing of its billing of SBC
Subscribers from the manner in which SBC Subscribers are billed as of May 30,
2001, SBC or its Affiliates shall provide Prodigy with at least sixty (60)
days advance written notice.
* * *
"SUBSCRIBER" means, with respect to any Retail ISP Service,
a subscriber that has been billed for such Retail ISP Service, including a
subscriber whose billing has been waived or discounted due to a special offer
or promotion in which customer billing is suspended or discounted.
2. SECTION 3.4(b):
Section 3.4(b) of the Resale Agreement shall be deleted and the
following text shall be inserted in lieu thereof:
(b) Following the Closing Date, SBC Sub shall retain a
direct relationship (contractual, customer care, help desk support, billing,
collection and payment, etc.) with each Subscriber of SBC's Retail ISP
Services (E.G. Pacific Xxxx Internet, XX Xxxx Internet, Nevada Xxxx Internet,
SNET Internet, and Xxxxxxxxx.xxx) as of the Closing Date ("LEGACY
SUBSCRIBERS"), and SBC or its Affiliates shall resell the Resold Prodigy
Service to all such Legacy Subscribers. Following the Closing Date, SBC Sub
will retain responsibility for its Legacy Subscribers for billing, including
bad debt risk and contractual relationships; provided, however, following the
Effective Date Prodigy or Operating Partnership shall manage SBC's
non-Business Customer Narrowband Access Legacy Subscribers in accordance with
the migration plan (the "MIGRATION PLAN") summarized in Exhibit 3.4(c)
hereto. Notwithstanding anything to the contrary herein, SBC may subcontract
the provision of the services for which it is responsible (e.g., customer
care, help desk support, billing and payment, etc.) to Prodigy, Operating
Partnership or any Third Party.
3. SECTION 3.4(c):
Section 3.4(c) of the Resale Agreement shall be deleted and the
following text shall be inserted in lieu thereof:
(c) Following the Effective Date, SBC, its Affiliates and
their respective distributors shall purchase the Resold Prodigy Service from
Operating Partnership and resell it to SBC Subscribers and Legacy Subscribers.
(i) BROADBAND ACCESS. Operating Partnership will set
the wholesale price for the Resold Prodigy Service that is
resold to Broadband Access SBC Subscribers and Broadband
Access Legacy Subscribers equal to the Base Wholesale Price
reflected in the following chart for the corresponding period
(the "BASE WHOLESALE PRICE"); PROVIDED, HOWEVER, the Base
Wholesale Price will remain at $5.00 per month per Subscriber
until the later of: (x) December 31, 2003 (the "TARGET DATE")
or (y) the month in which the number of Broadband Access SBC
Subscribers and Broadband Access Legacy Subscribers
(collectively, the "SBC BROADBAND ACCESS SUBSCRIBERS") first
equals or exceeds 3.5 million, PROVIDED THAT, if the number of
SBC Broadband Access Subscribers did not equal or exceed 3.5
million on or before the Target Date, then the Base Wholesale
Price shall remain at $5.00 per month until the month in which
the number of SBC Broadband Access Subscribers first equals or
exceeds 3.0 million but is less than 3.5 million, after which
the Base Wholesale Price shall be $4.50 until the month within
which the number of SBC Broadband Access Subscribers first
equals or exceeds 3.5 million, after which the Base Wholesale
Price shall be $4.00; PROVIDED FURTHER, HOWEVER, if the number
of SBC Broadband Access Subscribers equals or exceeds 3.0
million in any month prior to the Target Date then the Base
Wholesale Price shall be $4.50 per month beginning on January
1, 2004 until such time that the number of SBC Broadband
Access Subscribers is equal to or exceeds 3.5 million.
(A) With respect to each SBC Broadband Access
Subscriber, the Base Wholesale Price shall
initially be paid for any month after the
Effective
Date, whether or not such SBC Broadband
Access Subscriber is actually receiving
all or any portion of the Resold Prodigy
Service.
(B) SBC or its Affiliate shall continue to pay
to Operating Partnership the Base Wholesale
Price for each SBC Broadband Access
Subscriber in respect of which it purchases
from Operating Partnership the Resold
Prodigy Service pursuant to Section
3.4(c)(i)(A) on behalf of such SBC Broadband
Access Subscriber.
(C) The number of SBC Broadband Access
Subscribers for which the Base Wholesale
Price shall be paid by SBC to Operating
Partnership for a particular month shall be
determined as follows:
(1) For each of the months beginning in
calendar year 2001, the number of
SBC Broadband Access Subscribers for
which the Base Wholesale Price shall
be paid shall be equal to the number
of SBC Broadband Access Subscribers
as of the last day of each such
month; PROVIDED THAT, SBC shall make
a `true up' payment to Operating
Partnership for the amount of the
payment(s) that would be due
hereunder for the months of January,
February, March and April, 2001 to
the extent the actual amount paid by
SBC to Operating Partnership for
such months was less than the amount
required to be paid pursuant to this
paragraph.
(2) For each month beginning with
January, 2002 through the
termination of this Agreement, the
number of SBC Broadband Access
Subscribers for which the Base
Wholesale Price shall be paid shall
be equal to the average of the
number of SBC Broadband Access
Subscribers as of the end of the
month for which the calculation is
being made and the number of SBC
Broadband Access Subscribers as of
the end of the immediately preceding
month.
(ii) NARROWBAND ACCESS. In each calendar month,
Operating Partnership will set the wholesale price for the
Resold Prodigy Service that is resold to Narrowband Access
Business Customers who are SBC Subscribers and Narrowband
Access Business Customers who are Legacy Subscribers
(collectively, the "SBC BUSINESS NARROWBAND ACCESS
SUBSCRIBERS") equal to the Business Customer Narrowband
Wholesale Price reflected in the following chart for the
corresponding period (the "BUSINESS CUSTOMER NARROWBAND
WHOLESALE PRICE"); PROVIDED, HOWEVER, (i) the Business
Customer Narrowband Wholesale Price shall be applicable only
with respect to up to 100,000 such SBC Business Narrowband
Access Subscribers, and the Base Wholesale Price shall apply
to such SBC Business Narrowband Access Subscribers that are in
excess of 100,000.
(A) With respect to each SBC Business Narrowband
Access Subscriber, the Base Wholesale Price
or the Business Customer Narrowband
Wholesale Price, as applicable, shall
initially be paid for any month after the
Effective Date, whether or not such SBC
Business Narrowband Access Subscriber is
actually receiving all or any portion of the
Resold Prodigy Service.
(B) SBC or its Affiliate shall continue to pay
to Operating Partnership the Base Wholesale
Price or the Business Customer Narrowband
Wholesale
Price, as applicable, for each SBC
Business Narrowband Access in respect of
which SBC, its Affiliates and their
distributors purchases from Operating
Partnership the Resold Prodigy Service
pursuant to this Section 3.4(c)(ii)(A) on
behalf of such SBC Narrowband Access
Subscriber.
(C) The number of SBC Business Narrowband Access
Subscribers for which the Base Wholesale
Price or the Business Customer Narrowband
Wholesale Price, as applicable, shall be
paid by SBC to Operating Partnership for a
particular month shall be determined as
follows:
(1) For each of the months beginning in
calendar year 2001, the number of
SBC Business Narrowband Access
Subscribers for which the Base
Wholesale Price or the Business
Customer Narrowband Wholesale Price,
as applicable, shall be paid shall
be equal to the number of SBC
Business Narrowband Access
Subscribers as of the last day of
each such month; PROVIDED THAT, SBC
shall make a `true up' payment to
Operating Partnership for the amount
of the payment(s) that would be due
hereunder for the months of January,
February, March and April, 2001 to
the extent the actual amount paid by
SBC to Operating Partnership for
such months was less than the amount
required to be paid pursuant to this
paragraph.
(2) For each month beginning with
January, 2002 through the
termination of this Agreement, the
number of SBC Business Narrowband
Access Subscribers for which the
Base Wholesale Price or the Business
Customer Narrowband Wholesale Price,
as applicable, shall be paid shall
be equal to the average of the
number of SBC Business Narrowband
Access Subscribers as of the
beginning of the applicable month
and the number of SBC Business
Narrowband Access Subscribers as of
the end of such month.
Period Base Wholesale Price Business Customer
Narrowband Wholesale Price
----------------------------------------------------------------------------------------------------------
January 1, 2001 to December 31, 2001 $5.00 $9.00
January 1, 2002 to December 31, 2002 $5.00 $9.00
January 1, 2003 to December 31, 2003 $5.00 $9.00
January 1, 2004 to December 31, 2004 $4.00 $4.00
January 1, 2005 to December 31, 2005 $4.00 $4.00
January 1, 2006 to December 31, 2006 $4.00 $4.00
January 1, 2007 to December 31, 2007 $4.00 $4.00
January 1, 2008 to December 31, 2008 $4.00 $4.00
January 1, 2009 to December 31, 2009 $4.00 $4.00
4. SECTION 3.4(e):
Section 3.4(e) of the Resale Agreement shall be deleted and the
following text shall be inserted in lieu thereof:
(e) With respect to SBC Broadband Access Subscribers or SBC
Business Narrowband Access Subscribers acquired by SBC, its Affiliates or
their respective distributors from the Closing Date to the Effective Date,
payments due to SBC or its Affiliates from Prodigy or Operating Partnership
for SBC's acquisition of such SBC Broadband Access Subscribers and SBC
Business Narrowband Access Subscribers under the terms of the Strategic and
Marketing Agreement shall be waived by SBC and its Affiliates, and such SBC
Broadband Access Subscribers and SBC Business Narrowband Access Subscribers
shall not be transferred to Prodigy or Operating Partnership, but shall be
retained by SBC or its designated Affiliate. Such Subscribers shall be
considered SBC Subscribers, and, as of the Effective Date, they shall receive
the Resold Prodigy Service purchased by SBC or its Affiliates from Prodigy or
Operating Partnership at the Wholesale Price on the same terms and conditions
that SBC Subscribers are provided the Resold Prodigy Service.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, the Parties have caused this Amendment to be
duly executed in its name and on its behalf, all as of the date first written
above.
SBC COMMUNICATIONS INC.
By: /s Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: COO
SBC INTERNET COMMUNICATIONS, INC.
By: /s Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President and Secretary
PRODIGY COMMUNICATIONS CORPORATION
By: /s Xxxx Xxxx
-------------------------------
Name: Xxxx Xxxx
Title: CEO and President
PRODIGY COMMUNICATIONS LIMITED
PARTNERSHIP
By:
Prodigy Communications Corporation,
as general partner of Prodigy
Communications Limited Partnership
By: /s Xxxx Xxxx
-------------------------------
Name: Xxxx Xxxx
Title: CEO and President
