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EXHIBIT 10.39
AMENDMENT THREE TO GOODNET NETWORK ACCESS AGREEMENT
BETWEEN WINSTAR WIRELESS, INC.
AND
ABOVENET COMMUNICATIONS, INC.
WinStar Wireless, Inc, successor-in-interest to GoodNet, Inc.,
("WinStar") and AboveNet Communications, Inc. ("Customer" or "AboveNet"), agree
that the following terms and conditions of this third amendment and all
attachments hereto (collectively, the "Amendment") amend and/or supplement the
WinStar Network Access Agreement dated June 11, 1996 and any attachments and/or
amendments thereto (collectively and as amended hereby, the "Agreement") between
WinStar and Customer.
In consideration of the obligations set forth herein and for other good
and valuable consideration, the parties to this Amendment hereby agree as
follows:
GENERAL TERMS
1. Term. WinStar and the Customer have agreed to extend the term of the
Agreement by [*] and may be further extended in accordance with the
provisions of Section 4(c) hereof. WinStar and Customer agree that the
term of the circuits listed in Attachment A will expire at 11:59 p.m.
Eastern Time on [*] unless extended in accordance with the provisions of
Section 4(c) hereof.
2. Installation. In exchange for installation services performed by
WinStar, which includes without limitation the installation of base
circuits as set forth in Attachment A up to and including the date of
March 31, 1999, and, in consideration for the complexity and cost of
Circuit installation, AboveNet will pay to WinStar a network Setup and
Installation fee of [*] which amount will be paid in two installments:
(i) [*] upon execution hereof; and (ii) [*] on the later of June 30,
1999 or the date circuits 101, 108 and 111 all have been installed in
accordance with Section 5 hereof. AboveNet and WinStar agree that
circuits 102, 104, 107, 109, 110, 112, 113, 114, 115, 117 and 118 were
installed by March 31, 1999, and that the monthly recurring charges for
such circuits will commence on April 1, 1999. Monthly recurring charges
with respect to circuits 101, 108 and 111 will commence upon
installation in accordance with Section 5 hereof. Circuits 102 and 104
will be disconnected upon installation of circuits 111 and 108,
respectively. Section 7 hereof will not apply to the disconnection of
circuits 102 and 104. All monthly recurring charges will be invoiced in
advance and paid on net thirty (30) day terms. Charges more than thirty
(30) days overdue will accrue interest charges at the lesser of 1.5% per
month or the highest rate permitted by law.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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3. Volume Credits. In exchange for the volume of services Customer is
purchasing from WinStar and in order to provide an additional incentive
(but not the obligation) for Customer to purchase additional circuits
and related services from WinStar under the Agreement, WinStar will
provide Customer three separate credits of [*] each, to be applied
against Customer's total amounts owed to WinStar as follows: (i) one
such credit on the September, 1999 invoice, (ii) one such credit on the
September, 2000 invoice and (iii) one such credit on the September, 2001
invoice. Credit amounts in excess of invoiced charges as of such credit
month (if any) will be carried forward to and applied against successive
invoice(s) until the credit amount is used in full.
4. Pricing.
(a) WinStar and the Customer have agreed that the current pricing for
the circuits as stated in Attachment A to this Amendment will remain
fixed until March 31, 2002.
(b) On or before the 60th day prior to ▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ may
request that the parties meet to discuss the pricing provided under this
Agreement after such date. If the pricing for the monthly recurring
charges is materially above WinStar's then current market rate for a
customer purchasing similar or higher volume of the same type of
services as provided to Customer by WinStar, Attachment A will be
amended to state revised pricing that reflects WinStar's then current
market rate for such services being provided by WinStar to similarly
situated business customers (or competitive rates for such services if
there are no such similarly situated business customers at that time).
WinStar and AboveNet will negotiate in good faith to agree on the terms
of an such an amendment to Attachment A; provided, however, that if the
parties have not agreed to a mutually satisfactory revised pricing
within 30 days after the AboveNet request, AboveNet may deliver within
thirty (30) days thereafter a notice to WinStar of disputed pricing
which notice shall include the name of two major national long distance
telecommunications service carriers to be contacted regarding
alternative pricing. Upon receipt of such notice WinStar shall select a
nationally recognized accounting firm (which shall not be the accounting
firm used by WinStar as its independent certified public accountant) who
shall then solicit bids on a confidential basis on the circuits listed
on Attachment A (other than circuits 102 and 104) from the carriers
identified by AboveNet and two additional major national long distance
telecommunications carriers selected by WinStar. Said accountant shall
then determine the median price for such circuits from such carriers and
an adjustment shall be made in the then applicable pricing to reflect
the median pricing. The cost of such accountant's services shall be
split equally and paid by the parties.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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(c) On or before the sixtieth (60th) day prior to September 30, 2003 and
the end of each eighteen (18) month period thereafter during which the
Agreement is in effect, either party may request that the parties meet
to discuss the then current pricing provided under this Agreement.
WinStar and AboveNet will negotiate in good faith to agree on pricing
for the succeeding eighteen (18) month period. If WinStar and AboveNet
are able to reach agreement on mutually satisfactory pricing for such
period, the Agreement shall be extended for an additional eighteen (18)
month period from the then current expiration date. If the parties are
unable to reach mutual agreement with respect to satisfactory pricing
for the succeeding eighteen (18) month period, the then current pricing
will remain in effect until the expiration of the Agreement on the then
current expiration date.
5. Circuit Installation. Each of the Circuits referred to in Attachment A
have been accepted by Customer as installed except for Circuits 101, 108
and 111. With respect to Circuits 101, 108 and 111, each of such
circuits shall be deemed installed when the Circuit (i) has been
operating continuously for twenty-four (24) hours without interruption
with a 10E-9 BER (Bit Error Rate); and (ii) has satisfied the minimum
round-trip latency specifications set forth in Schedule B. WinStar will
notify Customer at such time that it deems the Circuit to have satisfied
the criteria set forth in (i) and (ii) above and such Circuit shall be
deemed accepted unless Customer demonstrates that the Circuit has not
met such criteria and notified WinStar within five (5) days after
WinStar's notice of completion of installation. Each of the parties will
act in good faith to expedite completion of the installation of the
Circuits.
A circuit ordered by Customer in the future will be deemed to be
accepted by Customer when the end to end circuit from the locations set
forth in the Service Order are determined by WinStar and Customer to
operate in a manner that satisfies the specifications and testing
criteria contained in the Service Order entered into by WinStar and
Customer with respect to such Circuit. Customer's obligation to pay for
future circuits provided under this Agreement shall commence upon
completion of installation of such circuits by WinStar (i.e., when such
circuits are made available for use for the Customer and meet the
installation criteria set forth in the service order). WinStar will not
be responsible for inside wiring and building easements of a connection
beyond the demarcation point of presence (POP) of the service, unless
otherwise specified in the Service Order.
6. Portability. WinStar will use commercially reasonable efforts to
accommodate Customer's request for exchange, replacement or change-out
of circuits at the same level that are on WinStar's network. AboveNet
agrees that it shall be responsible for paying all additional third
party costs that WinStar incurs for making such changes (including
without limitation WinStar's additional supplier costs, if any). In such
event, the parties will negotiate alternate pricing for the new circuits
which reflects the pricing and economics of this Agreement for
equivalent circuits but shall not reduce the payments required
hereunder. Section 7 hereof will not apply to the old circuit that is
being exchanged, replaced or changed-out by a new circuit pursuant to
this Section 6.
7. Underutilization Fee. In the event that Customer terminates service
prior to the end of the term for any circuit, then, except as
specifically set forth in Sections 2 and 6 hereof, Customer agrees to
pay an underutilization fee charge equal to fifty percent (50%) of the
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monthly recurring charges for the terminated circuit, multiplied by the
number of months remaining in the term for that circuit. Customer and
WinStar acknowledge that the underutilization fee is a liquidated damage
and not a penalty and each party further acknowledges that the charges
for the services hereunder would be substantially higher but for this
provision.
8. Entire Agreement. This Amendment and the Agreement as modified hereby
constitutes the entire agreement between the parties and supersedes any
and all prior or contemporaneous agreements whether written or oral. In
the event of a conflict between this Amendment and the Agreement or any
other prior attachments, the terms of this Amendment shall prevail. The
parties specifically agree that this Amendment supercedes the previous
Amendment Nos. 1 and 2 to the Agreement, and Attachment ID# 980410G each
of which is in all respects terminated and of no further force and
effect including, without limitation, all previously accrued credits and
credit obligations of any type in favor of Customer under the Agreement.
This Agreement cannot be modified except in writing signed by authorized
officers of both parties.
9. Assignment. Each party agrees that no person will be permitted to
acquire substantially all of such party's assets unless the acquiring
person agrees to be bound by all of the provisions of this Agreement
binding on such party.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their respective duly authorized representatives on the date set
forth below:
AboveNet Communications WinStar Wireless, Inc.
By: By:
-------------------------------- -------------------------------------
Name: Name:
------------------------------- ------------------------------------
Title: Title:
------------------------------ -----------------------------------
Date: Date:
------------------------------ -----------------------------------
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REVISED
ATTACHMENT A
MONTHLY
RECURRING
CIRCUIT CHARGE
------------------- ---------
ABO-101-MAE-MAW-OC3 $ [*]
ABO-102-SJC-POR-DS3 $ [*]
ABO-104-SJC-LOS-DS3 $ [*]
ABO-107-SJC-SEA-DS3 $ [*]
ABO-108-SJC-LOS-OC3 $ [*]
ABO-109-SJC-CHI-OC3 $ [*]
ABO-110-MAE-CHI-OC3 $ [*]
ABO-111-SJC-POR-OC3 $ [*]
ABO-112-DAL-CHI-DS3 $ [*]
ABO-113-DAL-LOS-DS3 $ [*]
ABO-114-MAE-PAX-OC3 $ [*]
ABO-115-MAE-MAW-OC12 $ [*]
ABO-117-MAE-SPN-OC3 $ [*]
ABO-118-SEA-POR-DS3 $ [*]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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SCHEDULE B
LATENCY COMMITMENTS-CIRCUITS 101, 108 AND 111
For purposes of determining whether the latency specifications have been
satisfied, the parties agree that the round-trip latency should not be greater
than the current round-trip latency set forth below as the "Latency
Specification":
Circuit Latency Specification
------- ---------------------
101 MAE-E-MAE-W [*]
111 SJC-POR-OC3 [*]
108 LOS-SJC-DS3 [*]
AboveNet agrees to cooperate with WinStar in determining the applicable
latency measurements on the Circuits and will assist WinStar by conducting
latency testing of such Circuits at such times as reasonably requested by
WinStar and will, if requested by WinStar, permit a WinStar representative to
participate in such testing.
*Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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