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EXHIBIT 10.1.
July 12, 1996
MASTER SERVICES AGREEMEMT
This Master Services Agreement ("Agreement") is entered into by and between
BellSouth Telecommunications, Inc. ("BellSouth") and MindSpring Enterprises,
Inc. ("Customer"). BellSouth and Customer hereby agree to the following terms
and conditions:
I. Customer hereby orders the services described in the Master Services
Agreement-Order Attachment ("Order Attachment(s)") at the recurring and
non-recurring rates, charges in the Order Attachment, and in accordance with
terms and conditions as described in the applicable tariffs and Order
Attachment(s). Customer agrees to pay for the services included in the Order
Attachment(s) to this Agreement.
II. This Agreement is subject to and controlled by the provisions of
BellSouth's tariffs including but not limited to the General Subscriber
Services Tariff and the Private Line Tariff and all such revisions to said
tariffs as may be made from time to time. Except for the rates and charges in
the Order Attachment(s), the tariff shall supersede any conflicting provisions
of this Agreement. BellSouth agrees that any appropriate tariff decreases for
any rate element will be provided to the Customer.
III. If Customer cancels a service ordered pursuant to an Order Attachment
prior to the completed installation of the service but after the execution of
the Order Attachment, Customer shall pay all reasonable costs incurred in the
implementation of the service included in the Order Attachment. Such reasonable
costs shall not exceed all costs which could apply if the work in the
implementation of the Order Attachment had been completed.
IV. If Customer cancels a service ordered pursuant to an Order Attachment at
any time prior to the expiration of the service period set forth in the
appropriate Order Attachment(s), Customer shall be responsible for all
termination charges unless otherwise specified. Termination charges are defined
as all reasonable charges due or remaining as a result of the minimum service
period agreed to by BellSouth and Customer as set forth in the Order
Attachment(s).
V. This Agreement when used in conjunction with a Special Assembly or
Contract Services Arrangement may be subject to appropriate regulatory approval
prior to commencement of installation. In the event such regulatory approval is
denied, after a proper request by BellSouth, any Special Assembly and/or
Contract Service Arrangement shall be null and void and be of no effect.
VI. The service period shall be specified in the Order Attachment(s) to this
Agreement.
VII. For the determination of any service period, the service period shall
commence the date that the installation of service is completed.
VIII. At the expiration of the service period for any service that is available
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pursuant to the tariff, the Customer may continue the service according to
renewal options provided under the tariff. If the Customer does not elect an
additional service period, or does not request discontinuance of service, the
service will be provided at the monthly rate currently in effect for
month-to-month rates. At the expiration of the service period for any Special
Assembly or Contract Service Arrangement, the customer may convert to an
available tariff offering for the specific service or may request a new Special
Assembly or Contract Service Arrangement.
IX. Customer may order additional existing services or new services by
submitting an appropriate Order Attachment properly authorized and submitted in
accordance with BellSouth's procedures. Rates for additional and/or new services
will be in accordance with the applicable tariff rates in effect at the time the
Order Attachment is accepted by BellSouth or as otherwise stated in the
appropriate Order Attachment.
X. This Agreement shall be governed by and construed in accordance with the
laws of each state where the service is provided unless otherwise provided.
XI. Except as otherwise provided in this Agreement, notices required to be
given pursuant to this Agreement shall be effective when received, and shall be
sufficient if given in writing, hand delivered or deposited in United States
mail, postage prepaid, addressed to the appropriate party at the address set
forth below:
------------------------------- BellSouth Telecommunications, Inc.
(NAME AND ADDRESS) (NAME AND ADDRESS)
(Attention: ) (Attention: )
------------------- -----------------
XII. Customer may not assign its rights or obligations under this Agreement
without the express prior written consent of BellSouth and only pursuant to the
conditions contained in the appropriate tariff.
XIII. In the event that one or more of the provisions contained in this
Agreement or incorporated within by reference shall be invalid, illegal or
unenforceable in any respect under any applicable statute, regulatory
requirement or rule of law, then such provisions shall be considered inoperative
to the extent of such invalidity, illegality or unenforceability and the
remainder of this Agreement shall continue in full force and effect.
XIV. This Agreement shall become effective upon execution by both parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the dates set forth below.
---------------------------------------- BELLSOUTH TELECOMMUNICATIONS, INC.
By: /s/ XXXXX X. XXXXXX By: /s/ X. X. XXXXXXXXXXX
------------------------------------- ----------------------------------
(Authorized Signature) (Authorized Signature)
Name: Xxxxx X. Xxxxxx Name: X. X. Xxxxxxxxxxx
---------------------------------------- ----------------------------------
(Print or Type) (Print or Type)
Title: Vice President Network Operations Title: Assistant Vice President
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Date: July 12, 1996 Date: July 15, 1996
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MindSpring Enterprises, Inc.
Additional Terms and Conditions
1. BellSouth and MindSpring recognize and agree that in the event that
the tariff pursuant to which BellSouth offers the services included in this
Agreement are declared null and void, this Agreement shall be deemed null and
void. BellSouth shall continue to work with MindSpring to pursue service
proposals that are consistent with the original intent of this Agreement and
comply with applicable legal and regulatory requirements.
2. The term of this Agreement shall be two years with two one year
renewal options.
2A. In the event MindSpring terminates this Agreement prior to the
expiration of the term of this Agreement, MindSpring shall be responsible for
termination charges. Termination charges shall equal fifty percent of the
billing for the previous 12 months billing for BellSouth services used by
MindSpring.
3. BellSouth shall present to MindSpring billing proposals that
include billing options on a service-by-service basis and on an aggregate
service basis.
4. In the event BellSouth inadvertently bills MindSpring in excess of
applicable tariffed rates, BellSouth shall refund to MindSpring any over
billing. Such refunds shall be in accordance with applicable legal and
regulatory requirements.
5. In the event that the tariff rates decrease for any services that
are included in this Agreement, appropriate tariff decreases for any rate
element shell be provided to MindSpring.
6. In the determination of MindSpring revenue commitment, BellSouth
shall aggregate all appropriate revenue from regulated local and intraLATA
services on a region wide basis.
7. There is nothing in this Agreement that prevents or should be
construed to prevent
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MindSpring from purchasing services from alternative service providers.
8. BellSouth has offered a proposal to MindSpring that is as favorable
as pricing proposals that have been made available to similarly situated
customers of BellSouth operating in the same industry as MindSpring Further, if
BellSouth enters into an agreement with such a similarly situated customer that
contains more favorable pricing terms than the terms offered to MindSpring
during the term of this Agreement, BellSouth agrees to offer MindSpring the
opportunity to recast this Agreement at the more favorable rates, terms, and
conditions.
9. BellSouth agrees that in the event it fails to install facilities on
the negotiated Service Due Date and fails to meet the Service Due Date by more
than 5 business days, BellSouth shall provide MindSpring a credit equal to the
monthly recurring charges billed for the circuit. In the event BellSouth fails
to meet the Service Due Date by less than 5 business days, BellSouth shall
provide MindSpring a credit equivalent to fifty percent of the monthly
recurring charges for the circuit. Credits issued pursuant to this provision
will be applied to the installation of or billing for future BellSouth
services offered by MindSpring. MindSpring agrees that all requests for
credits associated with this provision must be submitted inwriting within 30
calendar days to the BellSouth Business System Account Team subsequent to each
occurrence.
BellSouth and MindSpring agree that the negotiated Service Due Date on
all new services shall be 14 business days for sites where MindSpring is
currently using BellSouth services. BellSouth and MindSpring further agree that
the negotiated Service Due Date on all new services shall be 20 business days
for sites where MindSpring has not ordered any services from BellSouth and is
not currently using any BellSouth services.
MindSpring agrees to furnish BellSouth with an accurate 90 calender day
rolling forecast updated each 30 day calendar period for new services to be
ordered at both new and existing MindSpring locations. MindSpring and BellSouth
agree that if the new services for both new and
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existing locations are not forecasted within 30 calender days of order placement
date, this provision is not applicable to requests or orders for services
submitted by MindSpring.
The failure to meet a Service Due Date that is caused by acts of God
(which includes, but is not limited to, such acts as natural disasters,
hurricanes, floods, fires, etc.), political or civil unrest or other causes
beyond the reasonable control of BellSouth shall not constitute a delay in
performance for purposes of this provision. Further, BellSouth's failure to meet
the negotiated Service Due Date as a result of situations created by or actions
of third parties that are not within the control of BellSouth that impact the
availability of facilities, BellSouth's access to facilities such as for
example, access to conduit access to building space operated by the building
management shall also not constitute a delay in performance for purposes of this
provision. In addition, if a MindSpring order for additional services causes an
exhaust in BellSouth Central Office capacity, credits under this provision will
not apply. In the event BellSouth fails to meet the Service Due Date because of
acts that are caused by or within the control of MindSpring, BellSouth shall not
be liable for installation credits for failure to meet the negotiated Service
Due Date. MindSpring and BellSouth agree that this provision shall be
implemented on a trial basis for six months and BellSouth reserves the right to
renegotiate this provision after six months.
10. BellSouth agrees that in the event MindSpring experience an outage
on circuits that generate 25 percent or more of MindSpring's service, per
location for more than four hours, BellSouth shall provide MindSpring a credit
of $200 per hour after the initial four hours and for each additional hour or
part thereof that the outage occurs. BellSouth and MindSpring further agree
that a Cap of $1,000 shall be applied in the event the outage exceeds 8 hours.
Credits issued for outage shall be applied to the installation of, or
customary billing for future BellSouth services ordered by MindSpring.
MindSpring agrees that all credits associated with this provision must be
submitted in writing within 30
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calendar days subsequent to each occurrence. The calculation of the duration of
the outage shall begin upon BellSouth's receipt of notification to BellSouth
Repair Center of the service outage and a trouble ticket is opened. The service
outage shall cease at the time that MindSpring or BellSouth confirm that the
service outage has been corrected and the trouble ticket is closed.
An outage that is caused by acts of God (which includes, but is not
limited to, such acts as natural disasters, hurricanes, floods, fires, etc.),
political or civil unrest or other cause beyond the reasonable control of
BellSouth shall not constitute a failure in performance for purposes of this
provision. In the event MindSpring experiences or prolongs an outage because of
acts that are caused by or within the control of MindSpring, BellSouth shall not
be liable for outage credits. MindSpring and BellSouth agree that this provision
shall be implemented on a trial basis for six months and BellSouth reserves the
right to renegotiate this provision after six months.
11. In the event of a divestiture of a significant part of MindSpring's
business, a business downtown beyond MindSpring's control, or a network
optimization using other BellSouth services, any of which significantly reduces
the volume of network services required by MindSpring with the result that
MindSpring is unable to meet its annual revenue commitment under this Agreement
(notwithstanding MindSpring's best efforts to avoid such a shortfall), BellSouth
and MindSpring will cooperate in efforts to develop a mutually agreeable
alternative that will satisfy the concerns of both parties and comply with all
applicable legal and regulatory requirements. Such alternative may reduce the
MindSpring's Annual Revenue Commitment to the extent of any shortfall resulting
from the business downturn or network optimization. This provision shall not
apply to a change resulting from a decision by Mindspring: (i) to reduce its
overall use of
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telecommunications; or (ii) to transfer portions of its traffic or projected
growth to providers other than BellSouth. MindSpring must provide BellSouth
written notice of the conditions it believes will require the application of
this provision. This provision does not constitute a waiver of any charges,
including shortfall charges, incurred by MindSpring prior to the time the
parties mutually agree to amend this Agreement.
12. MindSpring agrees to a Minimum Annual Revenue Commitment of $2,000,000
in the first year and $2,000,000 for the second year.
13. BellSouth and MindSpring acknowledge and agree that if MindSpring
chooses to engage in the "Re-Sale" of BellSouth services, and MindSpring becomes
a Re-Seller (either directly or jointly in conjunction with Interstate Holding
Company or any of it's subsidiaries) all obligations under this agreement may
be terminated by MindSpring without penalty at the effective date of the
Re-Sale agreement.
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ J. Xxxxxxx Xxxx
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(Authorized Signature) (Authorized Signature)
Name: Xxxxxxx Xxxxxxxx Name: J. Xxxxxxx Xxxx
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(PRINT OR TYPE) (PRINT OR TYPE)
Title: CFO Title: Assistant Vice President-Sales
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Date: 6/6/97 Date: 6/6/97
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Attachment I
MindSpring Enterprises, Inc.
Incentive Schedule
1. MindSpring and BellSouth agree to establish the Minimum Annual Revenue
Commitment (MARC) at the current billing rate of $2,000,000 for the first year.
The MARC for the second year will be set at $2,000,000.
2. BellSouth agrees to apply a 3.5% initial discount on all services other
than services issued under special provisions including CSAs, Special Assemblies
and other packaged rates. BellSouth further agrees to apply the following
discounts in the event that MindSpring achieves the following levels of billing.
Annual Billing Discount Rate
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Current - 2,999,999 3.50%
$3,000,000 - 3,499,000 4.50%
$3,500,000 - 3,999.000 5.00%
$4,000,000 - 4,449,000 6.00%
$4,500,000 - 4,999,000 6.50%
$5,000,000 - 5,499,000 7.25%
$5,500,000 - 5,999,999 7.50%
$6,000,000 - 6,499,999 7.75%
$6,500,000 - 6,999,999 8.00%
$7,000,000 - 7,999,999 8.50%
BellSouth agrees to issue monthly credits of 3.5% initially, based upon
current annual billing at the inception of this agreement. BellSouth agrees to
issue additional credits should MindSpring's actual year end billing exceed it's
initial billing range. The "True Up" will be issued as follows: (Percentage
associated with actual annual billing, less 3.5%, times the actual annual
billing).
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