EXHIBIT 10.45
AGREEMENT FOR PURCHASE AND SALE OF SERVICES AND EQUIPMENT
This AGREEMENT FOR PURCHASE AND SALE OF SERVICES AND EQUIPMENT (this
"Agreement") is made this 25th day of July, 1997, by and between Xxxxxxxx
Communications Group, Inc. and Concentric Network Corporation ("CNC").
WHEREAS, in connection with certain transactions between WCG (as defined
below) and CNC more particularly described in that certain Common Stock and
Warrant Purchase Agreement between the parties of even date herewith (the "Stock
and Warrant Purchase Agreement"), CNC has agreed to purchase from WCG, and WCG
has agreed to sell to CNC, certain Services (as defined below) and Equipment (as
defined below) pursuant and subject to the terms and conditions of this
Agreement;
NOW, THEREFORE, for and in consideration of the mutual promises set forth
herein, the sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Certain Definitions.
-------------------
"Affiliate" shall mean any entity which (a) is at least 50% owned by WCG,
---------
or (b) owns at least 50% of WCG.
"Equipment" shall mean the telecommunications equipment, and installation,
---------
maintenance and other incidental services relating thereto, set forth in
Exhibit A attached hereto and incorporated herein by this reference, as such
Exhibit may be amended from time to time by WCG.
"Services" shall mean the inter-exchange multimedia telecommunications
--------
carrier services and other services set forth in Exhibit B attached hereto and
incorporated herein by this reference, as such Exhibit may be amended from
time to time by WCG; provided, however, that in no event shall "Services"
-------- -------
include any services (a) the provision of which by WCG would violate any
applicable contractual or regulatory restrictions, or (b) provided to CNC by
Critical Technologies, Inc. ("CTI"), an Affiliate, pursuant to the Amended and
Restated Employee Services and Staffing Agreement between CNC and CTI dated
June 19, 1997 or the Colocation Services Agreement dated November 1, 1994, as
amended.
"WCG" shall mean Xxxxxxxx Communications Group, Inc. and all Affiliates
---
unless otherwise indicated by the context.
2. Purchase and Sale of Services CNC shall purchase Services from WCG, and
-----------------------------
WCG shall sell Services to CNC, in each case subject to availability,
pursuant and subject to the terms and conditions of (a) this Agreement, and
(b) a Master Services Agreement substantially in the form of Exhibit C
attached hereto and incorporated herein by this reference or, with respect
to Services to be provided by Affiliates other than WCG's
network service group, the standard form of purchase agreement pertaining
to such Services then in effect for such Affiliate, as such standard form
may be modified by mutual agreement of the parties. In the event of any
conflict, the order of precedence shall be this Agreement and then Exhibit
C or, if applicable, the standard form of the contracting WCG Affiliate.
3. Purchase and Sale of Equipment. CNC shall purchase Equipment from WCG, and
------------------------------
WCG shall sell Equipment to CNC, in each case subject to availability,
pursuant and subject to the terms and conditions of (a) this Agreement, and
(b) a Purchase Agreement and/or Service Agreement substantially in the form
of Exhibit D attached hereto and incorporated herein by this reference or,
if such agreements are inapplicable, the standard form of purchase
agreement pertaining to such Equipment then in effect for WilTel
Communications, LLC, as such standard form may be modified by mutual
agreement of the parties. In the event of any conflict, the order of
precedence shall be this Agreement and then Exhibit D or, if applicable,
the standard form of the contracting WCG Affiliate.
4. Contingency; Term Notwithstanding any other provision of this Agreement,
-----------------
this Agreement shall not be effective unless and until the issuance of CNC
common stock to WCG pursuant to the Stock and Warrant Purchase Agreement.
The term of this Agreement shall commence on the date such CNC common stock
is issued to WCG pursuant to the Stock and Warrant Purchase Agreement and
shall end on the latter of the tenth (10th) anniversary of this Agreement,
when the Section 5 take-or-pay obligation has been fully satisfied or when
WCG ceases to own at least 5% of the common stock of CNC.
5. Take-or-Pay Commitment. Subject to the provisions of Sections 6, 7 and 8
----------------------
below, prior to December 31, 2002 CNC shall purchase aggregate Services and
Equipment amounting to at least $21,200,000, comprised of at least
$16,200,000 of Services and no more than $5,000,000 of Equipment, in
accordance with the schedule set forth below. CNC shall not be subject to
a minimum purchase commitment under this Agreement once it has satisfied
its take-or-pay obligations. All dollar amounts in this Agreement shall be
determined in accordance with WCG's prices in effect at the time such
Services and Equipment are ordered by CNC, inclusive of any discounts
applicable to CNC but exclusive of any credits (including, without
limitation, Service credits available under Section 8) to which CNC may be
entitled, late payment penalties, taxes and other government-imposed
surcharges. CNC's purchases of Services and Equipment shall not include
payments made by CNC to WCG to reimburse WCG for third party costs paid to
unaffiliated entities, including but not limited to, local access charges,
taxes, installation charges, off-network charges, one time fees and other
similar costs.
Page 2
Minimum Aggregate
-----------------
Purchases
---------
Year of Services and Equipment
---- -------------------------
(Take-or-Pay Obligation)
--------------------------------------------------------------
1 $1,200,000
(1/1/98 - 12/31/98)
--------------------------------------------------------------
2 $2,500,000
(1/1/99 - 12/31/99)
--------------------------------------------------------------
3 $7,000,000
(1/1/2000 - 12/31/2000)
--------------------------------------------------------------
4 $6,500,000
(1/1/2001 - 12/31/2001)
--------------------------------------------------------------
5 $4,000,000
(1/1/2002 - 12/31/2002)
--------------------------------------------------------------
To the extent that CNC exceeds the Minimum Aggregate Purchases of Services
and Equipment in any year as set forth in the schedule above, the amount of
such excess shall be offset against CNC's remaining take-or-pay obligation.
The offset shall be applied to CNC's take-or-pay obligation beginning with
the next subsequent year's take-or-pay obligation and shall reduce CNC's
take-or-pay obligation for that year until such obligation is satisfied.
If any offset remains, it then shall be applied to the next subsequent
year's take-or-pay obligation continuing through the year 5 (December 31,
2002) take-or-pay obligation or until the offset is fully utilized. To the
extent that CNC has any offset remaining after satisfying its entire take-
or-pay obligation of $21,200,000 under this section, such offset will
expire and will have no further use or value under this Agreement.
6. Inability to Meet Minimum Commitment. To the extent that, in any year
------------------------------------
during the term hereof (as measured at the end of each of the one year
periods set forth in the Schedule in Section 5 above and taking into
account any credit for excess purchases from another period), CNC fails to
purchase Services and Equipment from WCG greater than or equal to the take-
or-pay obligations for such year set forth in Section 5 above, then, within
thirty (30) days after the completion of such year, CNC shall pay to WCG,
as liquidated damages for such failure, cash in an amount equal to the
difference between the take-or-pay obligation for such year and the
aggregate amount of Services and Equipment actually purchased by CNC from
WCG during such year.
7. Inability to Provide Services and Equipment. If, for any reason except to
-------------------------------------------
the extent due to the actions of CNC, WCG is unable to provide Services or
Equipment ordered by CNC by the due date established in accordance with the
terms and conditions of this Agreement, then CNC shall have the right to
give WCG thirty (30) days prior written notice to complete performance
("CNC Performance Notice"). If WCG continues to be
Page 3
unable to perform after the expiration of the thirty (30) day notice
period, then the dollar amount of the unfulfilled CNC order shall be
withdrawn from the remaining take-or-pay obligation in the year the order
was received by WCG and the take-or-pay obligation for such year shall be
reduced. The absolute amount of such withdrawal shall then be added to
CNC's take-or-pay obligation over the remaining years of CNC's take-or-pay
obligation, as the parties shall mutually agree. If WCG's inability to
provide Services or Equipment occurs in the final year of the take-or-pay
commitment, then the withdrawn take-or-pay obligation shall be satisfied
over the remaining term of the Agreement as the parties shall mutually
agree. For example, if CNC places an order for $100,000 of Services in the
first year of its take-or-pay obligation, and WCG cannot provide the
Services within thirty (30) days of the CNC Performance Notice, then
$100,000 shall be withdrawn from CNC's first year's take-or-pay obligation
and be added to CNC's take-or-pay obligation over the remaining four (4)
years as the parties mutually agree. It is understood by the parties that
WCG's inability or failure to provide the Services or Equipment in a year
shall not reduce CNC's aggregate take-or-pay obligation of $21,200,000, but
rather the take-or-pay obligation with respect to the unprovided Services
or Equipment shall be allocated over the remaining term of the Agreement.
To the extent that WCG's failure to provide the Services or Equipment is
due to the actions of CNC, then the take-or-pay obligation shall not be
modified or reduced for such year. The foregoing remedy shall be CNC's sole
and exclusive remedy for WCG's inability to provide Services or Equipment
ordered by CNC.
8. Application of Certain Credits. The parties acknowledge that, in
------------------------------
connection with the issuance of CNC common stock to WCG pursuant to Section
9 below and pursuant to that certain Services Credit--Letter Agreement
between CNC and WCG dated June 19, 1997 (the "Letter Agreement"), WCG has
granted and may grant in the future to CNC certain credits which may be
applied against the purchases of inter-exchange multimedia
telecommunications Services. Such credits may be utilized by CNC with
respect to purchases of inter-exchange multimedia telecommunications
Services under this Agreement but only as set forth in the Letter Agreement
(attached as Exhibit E), except that purchases of Services using Services
credits may not be used to satisfy, in whole or part, the Section 5 take-
or-pay commitment. The "Master Agreement" referenced in the Letter
Agreement is this Agreement.
9. CNC Common Stock for Services. At the option of and as elected by WCG, CNC
-----------------------------
shall pay for up to $2,000,000 of Services rendered by WCG either (i)
through the issuance of CNC common stock valued by using the then "Current
Market Value" of the stock or (ii) through a combination of CNC common
stock and cash if the election to obtain CNC common stock for the total
amount of the invoice would exceed the $2,000,000 aggregate limit for CNC
common stock. The "Current Market Value" of CNC common stock shall be
calculated by taking the arithmetic average of the NASDAQ closing prices of
the common stock of CNC for each trading day during the entire calendar
month prior to the date of WCG's invoice. WCG shall be required to
exercise its option and make its election each month contemporaneously with
the issuance of its invoice to CNC. If WCG
Page 4
fails to make an affirmative election to be paid in CNC common stock at the
time its invoice is issued, then CNC will be required to pay WCG in cash,
less any available Section 8 credits, for the Services. If WCG exercises
its option to be paid in CNC common stock, then WCG will send with its
invoice the Concentric Network Corporation Common Stock Purchase Agreement
("SPA") executed by WCG pertaining to such Services. The SPA shall be in
the form attached as Exhibit F. The CNC common stock will be issued and
delivered to WCG as of the due date of the invoice and CNC shall
contemporaneously send WCG the fully executed SPA. No fractional shares
will be issued and instead the value of any fractional share will be paid
in cash. Section 8 credits may not be used to offset CNC's obligation to
issue CNC common stock under this provision. WCG's option to obtain CNC
common stock under this provision will expire upon the earlier of (i) WCG's
receipt of $2,000,000 of CNC common stock under this provision or (ii) the
expiration of the term of this Agreement.
10. Preferred Provider. In addition to the take-or-pay obligation in Section 5,
------------------
it is the express intent and agreement of the parties that WCG shall be the
preferred provider of all Services and Equipment or their commercial
equivalents (i.e., Competitive Services and Competitive Equipment as
defined in Section 11) to CNC during the term hereof. In this regard, WCG
shall have the right of last refusal with respect to any Equipment or
Service requirements (or their commercial equivalents) of CNC. The right of
last refusal shall allow WCG to match the bid of any prospective provider
of Competitive Services or Competitive Equipment to CNC and secure the
order from CNC. Notwithstanding the foregoing, CNC need not award WCG the
order under any of the following circumstances: (a) the Service or item of
Equipment offered by WCG does not reasonably satisfy the feature, function,
performance, timeliness of service delivery or quality specifications of
CNC previously provided to WCG, (b) the Service or item of Equipment is not
available from WCG at the same or a lower price, (c) the purchase of such
Services or Equipment from WCG would violate a Third Party Contract or a
New Third Party Contract (as defined below), or (d) CNC's customer has
expressly requested redundancy or diversity and the use of WCG Services or
Equipment would not satisfy the customers requirement. If CNC determines
that any of subsections (a) through (d) apply, CNC shall promptly provide
WCG reasonably satisfactory evidence that such circumstances exist. It is
understood and agreed by the parties that existence of the circumstances
set forth in subsections (a) through (d) shall not in any way reduce or
otherwise affect the take-or-pay obligation set forth in Section 5 which
exists independently of WCG's Preferred Provider status.
11. Third Party Contracts of CNC. CNC represents to WCG (a) that the contracts
----------------------------
described in Exhibit G ("Third Party Contracts") are the only contracts CNC
has with third parties which require CNC to purchase any services identical
or commercially similar to the Services ("Competitive Services") or any
equipment identical or commercially similar to the Equipment ("Competitive
Equipment") from any party other than WCG or which would otherwise restrict
in any manner CNC's purchase of Services or Equipment from WCG pursuant to
this Agreement and (b) that said Exhibit G sets forth the annual
Page 5
aggregate minimum commitments of CNC to purchase Competitive Services and
Competitive Equipment for each year in which Third Party Contracts remain
in effect. CNC covenants that it will not, without WCG's prior written
consent enter into any new contract ("New Third Party Contract") which
would constitute a Third Party Contract if in existence as of the date
hereof. CNC shall, upon written notice to WCG, have the right to amend,
extend or modify any Third Party Contract or any New Third Party Contract
but only in the ordinary course of business and in order to achieve cost
savings or other efficiencies.
12. Provision of Services and Equipment. WCG shall provide Services and
-----------------------------------
Equipment to CNC in accordance with the following provisions:
(a) All Services and Equipment shall be priced based on a "most favored
customer" basis, which means that for so long as, in each year during the
term of this Agreement, CNC's total payments to WCG pursuant to this
Agreement exceed CNC's take-or-pay commitment for such year as set forth in
Section 5 above, the prices to CNC shall be no greater than charges by WCG
for substantially similar Equipment and Services provided to any comparable
or lesser customer (including carrier customers such as MCI, Sprint or
AT&T) of WCG and pursuant to a similar or lesser economic arrangement for
the same periods of time. The determination of whether another WCG
customer is comparable or lesser and whether another transaction is similar
or lesser shall include, but not be limited to, the relative
creditworthiness and payment history of the other customer; whether the
transaction with such customer is similar as to the term of such other
customer's commitment; and the total annualized charges by WCG to such
customer. This subsection (a) shall not apply with respect to any lower
charges by WCG to: (i) entities, business organizations or enterprises
affiliated with WCG (i.e., entities in which WCG has a 20% or greater
ownership interest); or (ii) any department, branch or agency of a federal,
state or provincial government. For purposes of comparing CNC to other
customers, the parties agree that CNC's aggregate spending commitment with
WCG and its Affiliates during the term of this Agreement shall be used to
determine CNC's comparability with other WCG customers.
(b) WCG shall assign to CNC's account a national account team ("Account
Team") of sufficient experience and skill to reasonably manage CNC's
purchases of Services and Equipment and to participate in WCG's decision-
making process with respect to Service/Equipment functionality, quality,
performance and pricing, which Account Team shall provide account support,
including, but not limited to, account management of all Services and
Equipment purchased by CNC, ordering and provision of Services and
Equipment, billing, operations support and systems/network engineering of
Services and Equipment, that is consistent with that provided by other
industry leaders.
(c) Services shall be provided to CNC in accordance with the Service level
objectives for each type of Service which shall be established by the
parties at the time the specific Services and Equipment are ordered by CNC.
Page 6
(d) WCG shall reasonably assist CNC in minimizing the cost of any
transitions from existing service providers to WCG Services with the
objective of eliminating or reducing duplicate charges and any other
charges or penalties to move Services from an existing provider to WCG
during any transition periods.
(e) Each month the Account Team shall review with and report to CNC
concerning (i) a comparison of WCG's actual performance against applicable
Service level objectives, (ii) relevant forecasts and capacity plans of
WCG, and (iii) any other operational or business matters relevant to CNC.
13. Estimates. Upon the effective date of this Agreement and thereafter on the
---------
first day of each quarter during the term of this Agreement, CNC shall
provide WCG with a good faith written estimate of CNC's purchases of
Services and Equipment from WCG pursuant to this Agreement for such quarter
and for the six month period beginning on the date of such estimate.
14. Late Payments. CNC shall process any payments to WCG in a manner that is as
-------------
favorable as it processes payments to any other CNC carrier. Only in the
event that CNC does not raise at least thirty-eight million dollars
($38,000,000) from its anticipated Initial Public Offering (which amount
shall be the gross amount raised exclusive any amounts from WCG and Bay
Networks), CNC shall permit and cooperate (without cost to WCG) with WCG in
order to allow WCG to obtain a security interest in unencumbered tangible
CNC assets having a market value of at least one million dollars
($1,000,000) which WCG may access for the sole purpose of securing and
receiving payment for those amounts that CNC fails to pay WCG hereunder
within ninety (90) days after the due date therefor. The conditional
remedy set forth in the immediately preceding sentence shall be conditioned
on CNC having received from WCG a valid invoice for the amount due in a
timely manner, and further conditioned on CNC receiving written notice of
non-payment from WCG for the corresponding amount within thirty (30) days
after the payable amount becomes overdue.
15. Mutual Covenants.
----------------
(a) WCG and CNC each agrees to exercise commercially reasonable efforts to
utilize the other party's products and services to support video
conferencing demonstrations and collaboration activities within and
between their respective companies and where feasible to demonstrate
the other party's products and services.
(b) WCG and CNC each agrees to cooperate and exercise commercially
reasonable efforts to develop new, advanced Internet protocol products
and services.
Page 7
(c) Notwithstanding any agreement between the parties to the contrary,
each party agrees that all technology, code, inventions, algorithms,
know-how, ideas and all other business, technical and financial
information (which in all the foregoing examples is marked as
confidential) each party obtains from the other are the confidential
property of the disclosing party ("Proprietary Information" of the
disclosing party). The terms of this Agreement shall also be
considered Proprietary Information of both parties. Except as
expressly and unambiguously allowed herein, the receiving party will
hold in confidence and not use or disclose any Proprietary Information
of the disclosing party and shall similarly bind its employees. The
receiving party shall not be obligated under this Section with respect
to information the receiving party can document:
i. is or has become readily publicly available without restriction
through no fault of the receiving party or its employees or
agents;
ii. is received without restriction from a third party lawfully in
possession of such information and lawfully empowered to disclose
such information;
iii. was rightfully in the possession of the receiving party without
restriction prior to its disclosure by the other party; or
iv. was independently developed by employees or consultants of the
receiving party without use of or reference or access to such
Proprietary Information.
Each receiving party acknowledges and agrees that due to the
unique nature of the disclosing party's Proprietary Information,
there can be no adequate remedy at law for any breach of its
obligations hereunder, that any such breach may allow the
receiving party or third parties to unfairly compete with the
disclosing party resulting in irreparable harm to the disclosing
party and, therefore, that upon any such breach or threat
thereof, the disclosing party shall be entitled to seek
injunctive relieve and other appropriate equitable relief in
addition to whatever remedies it may have at law, and to be
indemnified by the receiving party from any loss or harm
(including, without limitation, attorneys' fees) in connection
with any breach or enforcement of the receiving party's
obligations hereunder or the unauthorized use or release of any
Proprietary Information. The receiving party will notify the
disclosing party in writing immediately upon the occurrence of
any such unauthorized release or other breach of which it is
aware.
(d) Except as otherwise set forth in this Agreement, neither party shall
be liable to the other party with respect to any subject matter of
this Agreement under any contract, negligence, strict liability or
other legal or equitable theory for (i) any
Page 8
exemplary, incidental, indirect, special or consequential damages of
any kind, including without limitation, loss of profit, savings or
revenue, lost data, or the claims of third parties, whether or not such
party has been or is advised of the possibility of such damages however
caused and on any theory of liability, arising out of this Agreement,
or (ii) cost of procurement of substitute goods, technology or
services.
16. Resolution of Disagreements Among Parties. No party to this Agreement
-----------------------------------------
shall be entitled to take legal action with respect to any dispute relating
to this Agreement until it has complied in good faith with the following
alternative dispute resolution procedures. If a dispute, claim or
controversy arises with respect to or relates to any Section of this
Agreement, then the following dispute resolution procedures shall govern
the parties' conduct:
(a) The parties shall attempt promptly and in good faith to resolve any
dispute arising out of or relating to this Agreement through
negotiations between representatives who have authority to settle the
controversy. Any party may give the other party written notice of any
such dispute not resolved in the normal course of business.
Negotiations extending ten (10) days after the disputing party's
notice shall be deemed at an impasse, unless otherwise agreed by the
parties. If a negotiator intends to be accompanied at a meeting by an
attorney, the other negotiator(s) shall be given at least two (2)
working days notice of such intention and may also be accompanied by
an attorney. All negotiations pursuant to this clause are
confidential and shall be treated as compromise and settlement
negotiations for purposes of the Federal and state Rules of Evidence.
(b) If a dispute is at an impasse (i.e., it has not been resolved within
ten (10) days of the disputing party's notice), the dispute shall be
settled by arbitration in Kansas City, Missouri, administered by the
American Arbitration Association in accordance with the Commercial
Arbitration Rules of the American Arbitration Association in effect on
the date that such notice is given. If the parties are unable to agree
on a single arbitrator within ten (10) days from the date of an
impasse as set forth in Subsection (a), then CNC and WCG shall each
select one arbitrator within ten (10) days and the two (2) arbitrators
shall select a third arbitrator within ten (10) days. If a party does
not designate an arbitrator or if the two appointed arbitrators cannot
agree on the final arbitrator within the foregoing time periods, then
the American Arbitration Association shall select the arbitrator(s)
upon request of either party. The decision of the arbitrator(s) shall
be final and binding upon the parties and shall include written
findings of law and fact, and judgment may be obtained thereon by
either party in a court of competent jurisdiction. Each party shall
bear the cost of preparing and presenting its own case. The cost of
the arbitration, including the fees and expenses of the arbitrator(s),
shall be shared equally by the parties hereto unless the award
otherwise provides. The arbitrator(s) shall be instructed by the
parties to establish
Page 9
procedures such that a decision can be rendered by the arbitrator(s)
within sixty (60) days of the date that the last arbitrator is
selected.
(c) The obligation herein to arbitrate shall not be binding upon any party
with respect to requests for preliminary injunctions, temporary
restraining orders, specific performance or other procedures in a
court of competent jurisdiction to obtain interim relief when deemed
necessary by such court to preserve the status quo or prevent
irreparable injury pending resolution by arbitration of the actual
dispute.
17. Miscellaneous.
-------------
(a) This Agreement may not be assigned by either party without the prior
written consent of the other party, except that WCG may assign, in
whole or in part, its rights and obligations under this Agreement to
an Affiliate upon written notice to CNC. Notwithstanding the
foregoing, CNC shall have the right to reincorporate under the laws of
any state without the prior written consent of WCG.
(b) The waiver by either party of any breach, default or remedy hereunder
will not operate as a waiver of any subsequent breach, default or
remedy.
(c) This Agreement supersedes all prior or contemporaneous proposals,
communications and negotiations, both oral and written, and
constitutes the entire agreement between WCG and CNC with respect to
(but only with respect to) the subject matter hereof.
(d) If any court holds any portion of this Agreement unenforceable, the
remaining language shall not be affected and the parties agree to
negotiate an amendment to the Agreement so that the parties' intent
embodied in the now unenforceable language will be restored through
the amendment to the Agreement to the extent legally permissible.
(e) Except as otherwise provided herein, any amendments or modifications
to this Agreement must be in writing and executed by an authorized
representative of each party.
(f) This Agreement is deemed made and GOVERNED BY THE LAWS OF THE STATE OF
OKLAHOMA except for its rules regarding the conflict of laws.
(g) Nothing contained in this Agreement will be interpreted or construed
as to characterize the relationship between CNC and WCG as a joint
venture, partnership or franchise for any purpose. Neither party has
the authority to, and neither party shall, make any representation,
prepare documents or statements on behalf of, or in the name of the
other party, give any warranties, accept any orders, enter into a
contract on behalf of the other party, or obligate the other party
Page 10
in any manner, unless expressly authorized to do so by this Agreement
or in writing by the other party.
(h) Any notice or report herein required or permitted to be given shall be
in writing and given by depositing the same in the United States mail,
postage prepaid and addressed or confirmed facsimile transmission to
the parties as follows:
(a) To CNC:
Concentric Network Corporation
00000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
(b) To WCG:
Xxxxxxxx Communications Group, Inc.
000 Xxxx 0xx Xxxxxx
Xxxxx, XX 00000
Attn: Vice President - Finance
or to such place or places as any of the parties shall designate by
written notice to the others.
(i) To the extent, but only to the extent, that the terms and conditions
in this Agreement are in conflict with the terms and conditions of any
Exhibit, the terms and conditions of this Agreement shall govern and
have precedence.
Page 11
THIS AGREEMENT is executed by the parties as of the date first set
forth above, but is effective for all purposes only as set forth herein.
CONCENTRIC NETWORK CORPORATION XXXXXXXX COMMUNICATIONS GROUP, INC.
/s/ Xxxxx X. Xxxxxxxx /s/ S. Xxxxxx Xxxxxxxx
By:_______________________ By:_______________________
Name:_____________________ Name:_____________________
Title:____________________ Title:____________________
Page 12
EXHIBITS
--------
Exhibit A List of Equipment
Exhibit B List of Services
Exhibit C Master Services Agreement
Exhibit D Purchase Agreement/ Service Agreement (WilTel)
Exhibit E Services Credit - Letter Agreement
Exhibit F Concentric Network Corporation Common Stock Purchase Agreement
Exhibit G Third Party Contracts/Minimum Commitments
Page 13
EXHIBIT A
List of Equipment
-----------------
PBX Equipment
Routers
Bridges
Servers
Switches
Page 14
EXHIBIT B
List of Services
----------------
Multimedia Wide Area ATM Services
Multimedia Private Line Services
Multimedia Frame Relay Services
Collocation Services
WCG Agency Services
Private Labeling Services
Call Center Services
Multimedia Storage Services
Page 15
MASTER SERVICES AGREEMENT
This Master Services Agreement (this "Agreement") is made this ____ day of
_________________, 1997, by and between __________, a Delaware corporation
("Seller"), with its principal place of business at Tulsa Union Depot, 000 Xxxx
Xxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000 and Concentric Network Corporation, a
Florida corporation ("Customer"), with its principal place of business at 00000
Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, for the provision of multimedia
telecommunications services, subject to this Agreement set forth in this
Agreement.
1.0. DESCRIPTION OF SERVICES AND PRICING.
-----------------------------------
Customer may order from Seller multimedia transmission services ("Services"),
the terms and conditions of which and the charges for which are set forth in
Seller's currently prevailing Multimedia Transmission Service Schedule relating
to such Services (the "Service Schedule"). The current Service Schedule is
attached to this Agreement as Schedule A and is incorporated herein by this
reference. Seller offers such Services, as defined in the Service Schedule,
upon the terms and conditions set forth in the Service Schedule, this Agreement,
and any applicable tariff (the "Tariff") filed by Seller with the Federal
Communications Commission. The terms and conditions of this Agreement
(including the Service Schedule) are subject to change in accordance with and to
the extent of any changes made in such Tariff, if applicable, or as such changes
are generally applicable Seller's other customers ordering similar services.
All Services are subject to availability.
2.0 EFFECTIVE DATE AND TERM
-----------------------
This Agreement shall become effective on the _____ day of ________________, 1997
(the "Effective Date") and shall continue through the _____ day of
___________________, ______ (the "Term"). Thereafter, this Agreement shall
automatically renew for successive one-year periods (the "Renewal Term(s)")
unless canceled by either party by giving notice of such cancellation not less
than thirty (30) days before the beginning of any Renewal Term.
3.0. SERVICE ORDERS.
--------------
Services requested by Customer hereunder shall be requested on Seller's Service
Order forms in effect from time to time or on Customer's forms accepted in
writing by Seller ("Service Orders"). Each Service Order shall reference this
Agreement.
This Agreement shall apply to all Services provided by Seller to the Customer
whether pursuant to a Service Order or otherwise.
Any conflicting, different or additional terms and conditions contained in
Customer's acknowledgment or Service Order or elsewhere are objected to by
Seller and shall not constitute part of this Agreement. No action by Seller
(including, without limitation, provision of Services to Customer pursuant to
such Service Order) shall be construed as binding or estopping Seller with
respect to such term or condition, unless the Service Order containing said
specific term or condition has been signed by Seller.
4.0. LOCAL ACCESS.
------------
Customer shall be solely responsible for obtaining any necessary local access
services necessary for the provision of Services.
-1-
5.0. CHANGES IN SERVICE PARAMETERS.
-----------------------------
5.1. Cancellation of Services. Customer may cancel any Service provided
------------------------
hereunder by providing written notification to Seller thereof sixty (60) days in
advance of the effective date of cancellation. In the event of such
cancellation, Customer shall pay to Seller a cancellation charge in an amount
equal to the monthly charge for such canceled Service multiplied by the number
of months in the relevant term for such Service, less the charges for such
Service actually provided to Customer through the effective date of cancellation
(but in no event less than zero). Customer agrees that damages in the event of
such cancellation would be difficult or impossible to ascertain, and that the
cancellation charge in this Section 5.1 is intended, therefore, to establish
liquidated damages and is not intended as a penalty. Notwithstanding the
foregoing, and upon thirty (30) day's prior written notice to the other party,
either Customer or Seller shall have the right, without cancellation charge or
other liability to the other party, to cancel the affected portion of any
Service, if Seller is prohibited by governmental authority from furnishing such
portion, or if any material rate or term contained herein and relevant to the
affected Service is substantially changed by order of the highest court of
competent jurisdiction to adjudicate the matter, the Federal Communications
Commission, or other local, state or federal government authority.
5.2. Outage Credits/Exclusive Remedy. Failure of equipment or transmission
-------------------------------
services involving Seller's Services, including failure due to force majeure
events as set forth in Section 7.4, or failure to provide Services for any
reason ("Outage"), shall result in a pro rata reduction of the service charges
for the Service involved ("Credit"). In the event of an occurrence causing
failure of Service which is beyond the control of Seller, the unaffected portion
of the Service may be subject to interruption as Seller deems necessary in order
to mitigate the effect of such occurrence with respect to Seller's network.
Seller shall not be liable for such interruption except in the form of a Credit.
The applicable Credit shall be determined by dividing such Outage time (in
minutes) by the total minutes in the month, and multiplying by the normal
monthly charge for such Service. The foregoing remedy is exclusive and no other
remedy is provided to Customer.
6.0. PAYMENT TERMS.
-------------
6.1. Invoice. Customer agrees to remit payment to Seller at the remittance
-------
address and on the due date indicated on Seller's invoices to Customer ("Due
Date"). In the event Customer fails to make full payment to the proper address
within thirty (30) days after the Due Date, Customer shall also pay a late fee
in the amount of the lesser of one and one-half percent (1 1/2%) of the unpaid
balance per month or the maximum lawful rate under applicable state law.
Customer acknowledges and understands that all charges are computed exclusive of
any applicable federal, state or local use, excise, gross receipts, sales and
privilege taxes, duties, fees or similar liabilities (other than general income
or property taxes), whether charged to or against Seller, its suppliers or
affiliates or Customer for the Service provided to Customer ("Additional
Charges"). Such Additional Charges shall be paid by Customer in addition to all
other charges provided for herein.
Payment for all prorated monthly recurring charges (charges for monthly Service
provided for less than a calendar month), installation and other non-recurring
charges shall be billed following the receipt of any such Services. Payment for
all monthly recurring charges for full months during which Service are to be
provided following the date such Services begin shall be due in advance.
6.2. Suspension of Service. In the event payment in full is not received from
---------------------
Customer on or before sixty (60) days following the Due Date, Seller shall have
the right, after giving Customer ten (10) days notice, to suspend all or any
portion of the Services to Customer. If only a portion of the Services are
suspended and Customer does not cure, Seller may suspend, after giving Customer
ten (10) days notice, all or any additional portion of the Services to
-2-
Customer. Seller may continue suspension until such time as Customer has paid in
full all charges then due, including any late fees as specified herein. If
Customer fails to make such payment by a date determined by and acceptable to
Seller, Customer shall be deemed to have canceled the Services provided under
this Agreement effective on the date of such suspension and shall remain liable
for all cancellation charges set forth in the Service Schedule.
6.3. International Service. Rates for any international Services are priced to
---------------------
Customer based on the exchange rate published on the most recent business day
in the Wall Street Journal at the time Service is contracted for, subject to
monthly adjustments to reflect changes in the applicable published exchange rate
on the first day of each month. If the carrier of non-U.S. Services modifies
its tariff or the technical parameters for Services during the Term of this
Agreement or any Service ordered, Seller shall have the right to modify
correspondingly this Agreement upon which such Service is provided to Customer.
International Services will be available only to the extent Seller has received
all necessary regulatory approvals to provide Services in a given jurisdiction.
6.4. Taxes. If any sales taxes or similar charges or impositions are asserted
-----
against Seller after, or as a result of, Customer's use of Services by any
local, state, national, international, public or quasi-public governmental
entity or foreign government or its political subdivision including without
limitation, any tax or charge levied to support the Universal Service Fund
contemplated by the Telecommunications Act of 1996, Customer shall be solely
responsible for such taxes, charges or impositions. Customer agrees to pay any
such taxes.
7.0. GENERAL AGREEMENT.
-----------------
7.1. Warranty and Disclaimer of Warranty. Seller warrants that Services shall
-----------------------------------
be provided to Customer in accordance with the technical parameters set forth in
the Service Schedule. Seller shall use reasonable efforts under the
circumstances to remedy any delays, interruptions, omissions, mistakes,
accidents or errors in the Services and restore such Services to comply with the
terms hereof. THE FOREGOING WARRANTY AND THE REMEDY PROVIDED TO CUSTOMER WITH
RESPECT TO OUTAGE CREDITS ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES OR
REMEDIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION,
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
7.2. Limitation of Liability. IN THE EVENT OF ANY BREACH OF THIS AGREEMENT OR
-----------------------
ANY FAILURE OF THE SERVICES, WHATSOEVER, NO PROVIDER (AS DEFINED IN SECTION 7.3)
SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, SPECIAL, ACTUAL,
INCIDENTAL, PUNITIVE OR ANY OTHER DAMAGES, OR FOR ANY LOST PROFITS OF ANY KIND
OR NATURE WHATSOEVER AND, WITH RESPECT TO PARTIES OTHER THAN CUSTOMER THAT USE
THE SERVICES THROUGH CUSTOMER, CUSTOMER SHALL INDEMNIFY PROVIDERS AGAINST ANY
CLAIMS FOR SUCH DAMAGES BROUGHT AGAINST THEM BY THIRD PARTIES.
7.3. Customer Content and Indemnity. Customer shall make all arrangements with
------------------------------
copyright holders, music licensing organizations, performers' representatives or
other parties for necessary authorizations, clearances or consents with respect
to transmission contents ("Consents"). Customer shall indemnify and hold
harmless Seller and any third party provider or operator of facilities employed
in the provision of Services (all of which shall be referred to as "Providers")
against and from any court, administrative or agency action, suit or similar
proceeding, whether civil or criminal, private or public, brought against
Providers arising out of or related to the contents transmitted hereunder (over
Seller's network or otherwise) including, but not limited to, claims, actual or
alleged, relating to any violation of copyright law, export control laws,
failure to procure Consents, failure to meet governmental or other technical
broadcast standards, or that such transmission contents are libelous,
slanderous, an invasion of privacy, pornographic, or otherwise unauthorized or
illegal. Seller may terminate or restrict any transmissions over the
-3-
network if, in its judgment, (a) such actions are reasonably appropriate to
avoid violation of applicable law; or (b) there is a reasonable risk that
criminal, civil or administrative proceedings or investigations based upon the
transmission contents shall be instituted against Providers. Customer agrees not
to use Services for any unlawful purpose, including without limitation any use
which constitutes or may constitute a violation of any local, state or federal
obscenity law. Customer and Seller shall indemnify and hold harmless the other
against and from any and all claims for physical property damage, physical
personal injury or wrongful death to the extent that such arises out of the
negligence or willful misconduct of the respective indemnifying party, its
employees, agents, or contractors in connection with the provision of Services
or other performance. With respect to third parties that use Services through
Customer, Customer shall indemnify Providers against any claims by such third
parties for damages arising or resulting from any defect in or failure to
provide Services. The indemnifying party agrees to defend the other against the
claims as set forth above and to pay all reasonable litigation costs, attorneys'
fees, court costs, settlement payments, and any damages awarded or resulting
from any such claims. The indemnified party shall promptly notify the
indemnifying party in writing of any such claims.
7.4. Force Majeure. If either party's performance of this Agreement or any
-------------
obligation (other than the obligation to make payments) hereunder is prevented,
restricted or interfered with by causes beyond its reasonable control including,
but not limited to, acts of God, fire, explosion, vandalism, cable cut, storm or
other similar occurrence including rain fade or other atmospheric conditions,
any law, order, regulation, direction, action or request of the United States
Government or state or local governments, or of any department, agency,
commission, court, bureau, corporation or other instrumentality of any one or
more said governments, or of any civil or military authority, or by national
emergencies, insurrections, riots, wars, acts of terrorism, strikes, lockouts or
work stoppages or other labor difficulties, supplier failures, shortages,
breaches or delays, then the affected party shall be excused from such
performance on a day-to-day basis to the extent of such prevention, restriction
or interference. The affected party shall use reasonable efforts under the
circumstances to avoid and remove such causes of non-performance and shall
proceed to perform with reasonable dispatch whenever such causes cease.
7.5. Events of Default. With respect to any particular Service ordered
-----------------
hereunder, Customer may terminate that Service, upon written notice to Seller
and following a five-day period in which Seller may cure such default, if the
quality of transmission provided under such Service falls consistently below the
level of quality set forth in the technical parameters applicable to such
Service set forth in the Service Schedule.
Either party may terminate this Agreement if the other is in default of any
material obligation contained herein, which default has not been cured within
fifteen (15) days following notice of such default.
7.6. Use of Services. Seller's obligation to provide Services to Customer is
---------------
subject to the following conditions: (a) Services shall not be used for any
unlawful purpose, (b) Services may not be resold by Customer to any third party
as a private-line service, and (c) Services may be used only for multimedia
transmissions.
7.7 Proprietary Information. Customer understands and agrees that the terms
-----------------------
and conditions of this Agreement and all documents referenced herein (including
invoices to Customer for Services provided hereunder) are confidential as
between Customer, Seller and its affiliates and shall not be disclosed by
Customer to any party other than the directors, officers, and employees of
Customer or agent's of Customer who have specifically agreed to nondisclosure of
the terms and conditions hereof. Violation by Customer or its agents of the
foregoing provision shall entitle Seller, at its option, to discontinue Services
to Customer without further obligation or liability to Customer. Customer
further agrees that any Customer generated press release, advertisement or
publication regarding this Agreement, Services provided hereunder or in which
Seller, or its affiliates are to be mentioned, will be submitted to Seller for
its written approval prior to publication. Customer understands and agrees that
Seller may disclose such information as may be required under applicable law
including, without limitation, filing of tariffs.
-4-
7.8. Intrastate Interexchange Services. Customer may use any interexchange
---------------------------------
Service provided under this Agreement only if such interexchange Service is used
for carrying interstate telecommunications (i.e., telecommunications subject to
the jurisdiction of the Federal Communications Commission). Seller and its
affiliates shall not be obligated to make available interexchange Service on a
circuit with end points within a single state or service on a circuit which
originates/terminates at points both of which are situated within a single state
unless Customer represents in writing that such interexchange Service or
circuits shall be used to carry interstate telecommunications. If it is
determined at any time that such interexchange Service or circuit is subject to
state regulation, the interexchange Service or circuit may be provided by Seller
or its affiliates pursuant to applicable state laws, regulations and applicable
tariffs, or Seller and its affiliates may discontinue provision of the affected
interexchange Service or circuit.
8.0. MISCELLANEOUS PROVISIONS.
------------------------
8.1. Title to Equipment. This Agreement shall not, and shall not be deemed to,
------------------
convey to Customer title of any kind to any of the transmission facilities,
digital encoder/decoders, telephone lines, microwave facilities or other
facilities utilized in connection with the Services. Any equipment provided by
Customer must be itemized on a schedule listing all such Customer-provided
equipment and appended to the Service Order to which use of that equipment
relates ("Customer Equipment Inventory"). Seller shall not be obligated to
provide any Services for Customer if Customer will be providing any of its own
equipment unless and until such equipment is itemized on the applicable Customer
Equipment Inventory.
8.2. Notice. Notices under this Agreement shall be in writing and delivered
------
either via U.S. mail, certified with return receipt requested, or via Federal
Express priority next-day delivery, to the person identified in this Section at
the Full Business Addresses of the parties as they appear herein. The effective
date for any notice under this Agreement shall be the date of delivery of such
notice, not the date of mailing.
The Full Business Address for purposes of notice under this Section as well as
telephone voice and facsimile numbers for reservation of services and
troubleshooting shall be:
---------------------
000 Xxxx 0xx Xxxxxx
Xxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000 or 0-000-000-0000
Fax: (000) 000-0000
Attention: Vice President-Finance and Administration
With a copy to:
General Counsel
Xxxxxxxx Communications Group, Inc.
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
CONCENTRIC NETWORK CORPORATION
00000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
-5-
8.3. Merger/Integration. This Agreement (including the attached Service
------------------
Schedule, as it may be modified from time to time) consists of all the terms and
conditions contained herein and in documents incorporated herein specifically by
reference. This Agreement constitutes the complete and exclusive statement of
the understanding between the parties and supersedes all proposals and prior
agreements (oral or written) between the parties relating to Services provided
hereunder.
8.4. Written Amendment. Customer agrees that any addition, deletion or
-----------------
modification to this Agreement shall not be binding on Seller except by written
agreement executed by Seller.
8.5. No Venture. The provision of Services shall not create a partnership or
----------
joint venture between the parties.
8.6. Conflict of Law. In addition to the nonpayment of any sum due hereunder,
---------------
Seller may immediately suspend Services in whole or part if Seller determines
that such Services violate the Communications Act of 1934, as amended (including
the Telecommunications Act of 1996), or that the imposition of any state or
federal statute, or promulgation of any rule, regulation, or order of the
Federal Communications Commission ("FCC") or other governing body makes Seller's
performance commercially impracticable.
8.7. Assignment. Customer shall not assign or transfer its rights or
----------
obligations under this Agreement without the prior written consent of Seller,
provided that Customer may reincorporate in any state without the prior written
consent of Seller. Any such assignment or transfer of Customer's rights or
obligations without such consent shall entitle Seller to terminate the Services
provided hereunder at its option upon ten (10) days' prior written notice to
Customer. A change in control shall be deemed to be an assignment or transfer.
8.8. Choice of Law. This Agreement shall be governed by the laws of the State
-------------
of Oklahoma without regard to choice of law principles. Customer hereby
consents to the jurisdiction of the federal and state courts having a situs in
Tulsa County, Oklahoma over any proceeding initiated with respect to the
enforcement or interpretation of this Agreement.
8.9. Interpretation. No rule of construction requiring interpretation against
--------------
the draftsman hereof shall apply in the interpretation of this Agreement.
8.10. No Third Party Beneficiary. The provisions of this Agreement are for the
--------------------------
benefit only of the parties hereto, and no third party may seek to enforce or
benefit from these provisions.
8.11. Attorneys' Fees. If a proceeding is brought for the enforcement of this
---------------
Agreement or because of any alleged or actual dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the prevailing party shall be entitled to recover reasonable attorneys' fees and
other costs and expenses incurred in such action or proceeding in addition to
any other relief to which such party may be entitled.
8.12. Severability. In the event any provision of this Agreement conflicts
------------
with any statute, rule or order of any governmental unit or regulatory body, or
tariff then, if required by law, such statute, rule, order or tariff shall
control.
8.13. No Waiver. The failure of either party to enforce any provision hereof
---------
shall not constitute the permanent waiver of such provision.
_______________________________________ CONCENTRIC NETWORK CORPORATION
-6-
By: By:
----------------------------- ------------------------------
Name: Name:
--------------------------- ----------------------------
Title: Title:
--------------------------- ---------------------------
Date: Date:
f:\cnc\networ~2.doc
-7-
SERVICE SCHEDULE (SAMPLE FOR IXC SERVICES)
to be negotiated
-8-
WILTEL - NSI PURCHASE AGREEMENT
--------------------------------------------------------------------------------
This Agreement is made as of ________________, 19__, between WILTEL
COMMUNICATIONS, LLC, a Delaware limited liability company, 0000 Xxxx Xxx
Xxxxxxxxx, Xxxxxxx, Xxxxx 00000, ("WilTel") and ___________________________ a(n)
____________________ corporation/partnership/sole proprietorship ("Customer"):
AGREEMENT. WilTel will sell, deliver and install the data communications and
internetworking equipment and sublicense the associated software (together, the
"System") listed on the WilTel Quotation (the "Quotation"), a copy of which is
attached hereto and incorporated herein and Customer will purchase such System.
The System will be installed at the locations specified in the Quotation (the
"Premises").
PRICE, PAYMENT TERMS, AND SCHEDULING. The total price, including the equipment,
software and installation as detailed on the Quotation, but not including
maintenance, is $_________________, (the "Cash Price") plus all sales, use,
property or applicable taxes imposed on the System or the purchase thereof
(except for WilTel income taxes). No other item is included unless specifically
stated in this Agreement or its attachments. CUSTOMER WILL PROVIDE EVIDENCE OF
ITS TAX EXEMPT STATUS IF IT CLAIMS SUCH STATUS. Unless stated otherwise on the
Quotation, Customer will invoiced and will pay all WilTel invoices within thirty
(30) days of the date of invoice. All payments will be subject to a late
payment service charge of 1-1/2% per month (or as limited by applicable law) on
payments in arrears for more than thirty (30) days after invoice date.
INDEMNIFICATION; LIMITATION OF LIABILITY. Both WilTel and Customer will defend,
indemnify and hold the other harmless, from and against any and all claims,
demands, losses, orders, judgments or decrees (collectively the "Loss") arising
out of personal injury (including death) or damage to tangible, physical
property only to the extent the Loss is caused by the negligence of the
indemnitor and reported to the indemnitor in writing within sixty (60) days of
the incident. IN NO EVENT, HOWEVER, SHALL EITHER PARTY (OR WILTEL'S SUPPLIERS
OR SUBCONTRACTORS) BE LIABLE FOR (i) ANY SPECIAL, INCIDENTAL, EXEMPLARY, OR
CONSEQUENTIAL DAMAGES, (ii) COMMERCIAL LOSS OF ANY KIND (INCLUDING LOSS OF
BUSINESS OR PROFITS), NOR SHALL WILTEL OR ITS SUPPLIERS OR SUBCONTRACTORS BE
LIABLE FOR ANY DAMAGES OF ANY KIND RESULTING FROM UNAUTHORIZED USE OF THE
SYSTEM, INTERRUPTION OF SERVICE OR LOSS OF DATA. THIS LIMITATION APPLIES TO ALL
CLAIMS WHETHER BASED UPON BREACH OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE,
STRICT LIABILITY IN TORT OR ANY OTHER LEGAL THEORY, AND WHETHER WILTEL OR ITS
SUPPLIERS OR ITS SUBCONTRACTORS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGE OR LOSS.
SOFTWARE LICENSE; INTELLECTUAL PROPERTY INFRINGEMENT. Certain manufacturers
issue their own software license with the Equipment and a copy of such license
shall be given to Customer upon installation of the System. If no such license
is issued by the manufacturer, then to the extent authorized by the
manufacturers of the System, WilTel grants Customer a non-exclusive, non-
assignable, non-transferable license for the useful life of the System to use
the software (including related documentation) solely to maintain and operate
the System, provided Customer: (i) does not allow any aspect of the software to
be disclosed to a third party without WilTel's written consent and makes
reasonable efforts to ensure that its employees are aware of this obligation;
(ii) uses the System solely for Customer's internal business purposes; (iii)
does not copy any part of the software or related documentation without WilTel's
consent and does not attempt to develop any source code from the software; and
(iv) returns to WilTel or erases or destroys any software or related
documentation on any media being recycled or discarded and so certifies to
WilTel. The Customer has no right, title or interest in the software other than
as set forth in this section. Should the System or any portion thereof become,
or be likely to become, the subject of a claim of infringement of a United
States patent or copyright, WilTel shall pass through to Customer the
infringement indemnification which is provided to WilTel by the manufacturer
and, in addition, shall, in the following order and at no cost to Customer, use
commercially reasonable efforts to: (i) obtain for Customer the right to use
such System; (ii) replace or modify such System so that it becomes non-
infringing but materially equivalent in function and performance; or (iii) if
unable to perform (i) or (ii) above, refund to Customer an amount equal to the
then present value of the cost of the infringing System as amortized over the
customary use expectancy of the affected item.
RISK OF LOSS, TITLE AND SECURITY INTEREST. Customer assumes the risk of loss
to the System from the Installation Date (as defined below) and Customer shall
assume all risks of loss and responsibility for obtaining and paying for
insurance in the event of loss or damage commencing on the Installation Date.
Title in the System will pass on full payment of the Cash Price plus all taxes
set forth above. Until Customer's full payment of the Cash Price plus all taxes
set forth above, WilTel reserves and Customer grants WilTel a security interest
in the System in the amount of the purchase price. At WilTel's option, Customer
will execute appropriate financing statements to fully protect WilTel's interest
hereunder in accordance with the Uniform Commercial Code.
LIMITED WARRANTY. WILTEL WARRANTS THAT WORK PERFORMED UNDER THIS AGREEMENT SHALL
BE DONE IN
A GOOD AND WORKMANLIKE MANNER AND BE FREE FROM MATERIAL DEFECTS FOR A PERIOD OF
THIRTY(30) DAYS FROM DATE OF PERFORMANCE. CUSTOMER'S SOLE AND EXCLUSIVE REMEDY
FOR BREACH OF SUCH WARRANTY SHALL BE CORRECTION OF THE DEFECT BY WILTEL AT
WILTEL'S EXPENSE. THIS AGREEMENT EXCLUDES ALL OTHER EXPRESS WARRANTIES AND ALL
IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE WARRANTIES OF FITNESS FOR
A PARTICULAR PURPOSE AND MERCHANTABILITY. WILTEL DISCLAIMS ANY WARRANTY TO
PREVENT UNAUTHORIZED USE OF THE EQUIPMENT.
THIS AGREEMENT INCLUDES THE PROVISIONS SET FORTH ON THE REVERSE SIDE OF THIS
PAGE. Customer acknowledges that it has reviewed this Agreement, including any
and all documents referenced in it, understands it, and is bound by its terms.
--------------------------------------------------------------------------------
WILTEL COMMUNICATIONS, LLC CUSTOMER:
--------------------------------------------------------------------------------
BY: BY:
--------------------------------------------------------------------------------
NAME: NAME:
--------------------------------------------------------------------------------
TITLE: TITLE:
--------------------------------------------------------------------------------
INSTALLATION (a) Delivery Date occurs when WilTel delivers the networking
equipment for delivery to the Premises. Installation Date occurs when the
equipment is connected to the network, activated and functioning substantially
to provide basic service, excepting minor variances which do not materially
affect performance. (b) Customer shall, at its own expense, provide and be
responsible for all proper environmental conditions at the installation site and
for a suitable operating environment per manufacturer's specifications, a copy
of which shall be provided to Customer upon request. Customer shall hold WilTel
harmless from any and all liability for injury to wires, conduits, pipes mains,
sewers or other similar property that is not accurately detailed or accounted
for in Customer supplied prints. If any unexpected obstruction is found that
alters routine installation, Customer shall be billed for any additional expense
related thereto at WilTel's then prevailing time and material rates. (b)
Customer agrees to permit and arrange full access to the Premises necessary for
WilTel's representatives to perform the installation services set forth in this
Agreement. Installation of the Equipment will be performed during the normal
working hours of 8:00 a.m.-5:00 p.m., Monday through Friday, excluding WilTel
holidays. Any delay or downtime resulting from Customer act or omission shall
be the responsibility of Customer and shall be billed at WilTel's prevailing
rate. (c) Customer represents and warrants that the conditions to be
encountered by WilTel in all areas where work is to be performed on the Premises
shall (i) be in compliance with all applicable federal, state and local laws and
regulations, (ii) be safe and non-hazardous, (iii) not contain, present, or
expose WilTel representatives to hazardous materials or hazardous substances.
In the event of breach of the foregoing, WilTel may, in addition to all other
remedies, immediately suspend work until Customer has promptly corrected such
condition(s) at Customer's expense. If Customer cannot or does not correct such
condition, it will be WilTel's option as to whether to enter the area in which
the unsafe condition exists. WilTel's refusal to enter such a location on the
basis of safety will not be deemed a breach of this Agreement or a default under
it and no liability for such a decision will attach.
CHANGES. Any move, addition\deletion or change ("MAC") to the System shall be
made by mutual agreement through a written change order or quotation which is
executed by an authorized representative of Customer and the terms of this
Agreement will apply to the equipment or services purchased thereunder. The
Cash Price of the System, Delivery Date and Installation Date shall be subject
to adjustment for any mutually agreeable MAC.
ACCEPTANCE When the System is installed and has operated in accordance with
the manufacturer's specifications for a period of fourteen (14) calendar days,
it will be deemed Accepted by Customer unless Customer has provided WilTel with
written notice setting forth deficiencies in operation. If Customer has
provided such notice, WilTel will promptly correct the listed deficiencies, at
WilTel's sole expense. Upon WilTel's correction of the listed deficiencies to
Customer's reasonable satisfaction, Customer shall promptly certify in writing
its acceptance of the System.
CLAIMS, QUERIES AND RETURNS. (a) No claims with regard to shortages,
discrepancies, or damage to components of the System will be accepted by WilTel
unless Customer notifies WilTel in writing within 10 working days of delivery.
(b) WilTel shall have no liability in respect of damage or shortages to the
extent caused by the acts or omissions of the Customer or of others. (c) No
claim in respect of any invoice as to inaccuracies in price, discount, terms of
payment or any other commercial terms will be accepted by WilTel unless Customer
notifies WilTel in writing within 14 days of Customer's receipt of a valid
invoice. (d) No claim by the Customer that it has not received an invoice
will be accepted unless Customer notifies WilTel in writing within 7 days from
the date of the first statement of account from WilTel identifying such invoice.
(e) If a claim is validly made under this Section which may entitle the
Customer to return a System component, WilTel shall not be bound to accept such
return or exchange component unless the Customer complies with all material and
reasonable WilTel return procedures as set forth in subsection (f) below, which
may be modified by WilTel from time to time on reasonable, advance written
notice. (f) In order to return a component, a Return Merchandise Authorization
number must first be obtained from WilTel and must appear on all shipping labels
of components to be returned. Components must be returned in the same condition
as originally delivered, ordinary wear and tear excepted, and in original
box/carton.
DEFAULT. If, prior to Acceptance, Customer cancels, without cause, an equipment
order placed pursuant to this Agreement or rejects, without cause, equipment
already installed, WilTel, in addition to the remedies set forth below, shall
be entitled to retain all monies paid by Customer and recover additional monies,
if necessary, to cover costs incurred by WilTel in preparation for and any
actual performance under this Agreement. If Customer fails to pay any sums
within thirty (30) days after such sums become due, or otherwise fails to
perform any material obligation, WilTel, in addition to other remedies available
to it at law or in equity, may: (i) cease installing the System; and\or (ii)
enter Customer's premises upon reasonable notice and take possession of and
remove the System, retaining all sums paid.
FORCE MAJEURE. Except for Customer's payment obligation, either party's
performance shall be adjusted or suspended to the extent performance is beyond
its reasonable control for reasons including, without limitation, the following:
strikes, work stoppages, fire, water, flood, lightning, governmental action,
acts of God or public enemy, delays of suppliers, subcontractors, power company,
local exchange company, or other carrier.
MISCELLANEOUS. (a) If Customer issues a purchase order for its own internal
purposes, Customer agrees that only the terms and conditions of this Agreement
apply. (b) WilTel reserves the right to subcontract any and all of the work
to be performed by it under this Agreement. (c) This Agreement is not
assignable by Customer without the prior written consent of WilTel, provided
that Customer shall have the right to reincorporate under the laws of any State
without the prior written consent of WilTel. (d) The waiver by either party of
any default will not operate as a waiver of any subsequent default. (e) The
non-prevailing party will pay all of the prevailing party's costs or expenses,
including reasonable attorney's and collection fees, incurred in enforcing this
Agreement. (f) This Agreement supersedes all prior or contemporaneous
proposals, communications and negotiations, both oral and written, and
constitutes the entire agreement between WilTel and Customer with respect to the
purchase of the System. Any representations made by an employee, salesperson or
agent of either party and not expressed in this Agreement are not binding upon
the respective party. (g) If any court holds any portion of this Agreement
unenforceable, the remaining language shall not be affected. (h) Any
modifications must be in writing and executed by an authorized representative of
the party against whom enforcement is sought. (i) No action, regardless of
form, arising out of this Agreement may be brought by either party more than one
year after the cause of action has accrued. (j) This Agreement is deemed made
and GOVERNED BY THE LAWS OF THE STATE OF OKLAHOMA except for its rules regarding
the conflict of laws. (k) Customer agrees that neither it nor any of its
affiliates will solicit any of the WilTel employees providing services pursuant
to this Agreement with offers of employment during the term of this Agreement
and for a period of one year after its expiration.
WILTEL - NSI SERVICE AGREEMENT
--------------------------------------------------------------------------------
This Agreement is made as of _______________________, 19____ between WILTEL
COMMUNICATIONS, LLC, a Delaware limited liability company, 0000 Xxxx Xxx Xxxx,
Xxxxxxx, Xxxxx 00000, ("WilTel") and ___________________________________ a(n)
___________________ corporation/partnership/sole proprietorship ("Customer"):
SERVICE PLAN. Customer owns or leases certain data communications and
internetworking electronic equipment and software ( collectively, the "System").
Customer orders from WilTel the Service Plan described in this Agreement and the
Service Plan Attachment, which is attached hereto and incorporated herein and
WilTel agrees to furnish such requested service. The System and its location(s)
(the "Premises") are described on the Service Plan Attachment.
TERM. The initial term of this Agreement shall be for a period of ____ months
commencing ____________________, 19__ (the "Commencement Date"). At the
conclusion of the initial term, this Agreement may be renewed for successive one
year periods thereafter by mutual consent of WilTel and Customer upon the same
terms and conditions contained herein, except that the Service Fee shall be
annually adjusted. Such mutual consent of WilTel and Customer shall be
evidenced by (i) WilTel's issuance to the Customer, not less than thirty (30)
days prior to the expiration of the initial term or of any successive renewal
term, of a Service Fee invoice ("the Invoice") for an additional one year of
service at the stated Service Fee and (ii) Customer's payment of the invoice
prior to the expiration of the then current term or renewal period. Either
party may terminate maintenance service at any time with respect to particular
component of the System or particular geographic locations covered under this
Agreement by giving the other party thirty (30) days written notice.
SERVICE FEE. Customer agrees to pay an annual plan service fee of $____________
to be paid annually in advance for maintenance of the System (the "Service Fee")
plus all applicable taxes when due. CUSTOMER WILL PROVIDE EVIDENCE OF ITS TAX
EXEMPT STATUS IF IT CLAIMS SUCH STATUS. Service Fees received more than thirty
(30) days after Customer's receipt of a valid invoice are subject to a late
payment charge of one and one half percent (1 1/2%) for each 30 day period that
they remain unpaid.
MAINTENANCE OBLIGATIONS. (A) The Service Plan Attachment sets forth the hours
of the principal Service Period and the service request response times.
Maintenance service extending more than one-half (1/2) hour beyond the Service
Period or performed entirely outside the Service Period will be performed upon
Customer's request. Customer agrees to pay WilTel, at WilTel's then current time
and materials rates, at a minimum increment of two (2) hours initially with
subsequent increments of one-half (1/2) hour. (B) For the purposes of this
Agreement, "Emergency Service" refers to service for a major outage resulting
from a System failure that adversely affects 50% or more of the System. The
terms "Non-Emergency Service" refers to service required for all other System
failures. (C) Maintenance service for hardware shall consist of furnishing all
parts and labor necessary to maintain the System in good operating condition as
a result of Customer's normal use. WilTel shall provide replacement parts, at no
additional cost to Customer, on an exchange basis as a result of normal use. The
replacement parts may be refurbished or contain refurbished materials. Any parts
replaced by WilTel will become the property of WilTel. Customer have access to
WilTel's technical answering/dispatch service during the hours of the Service
Period. Maintenance service for software will include provision of all
maintenance releases and patches to correct performance of the software, at no
additional cost to Customer, provided such patches and releases are provided to
WilTel by the manufacturer at no charge.
ADDITIONS TO SYSTEM. New or relocated equipment added to the System
("Additions") may be included in the service coverage provided by this
Agreement only by written amendment to this Agreement; such amendment shall
state the location of additional items of equipment quantity, description,
serial number and part number and the necessary adjustment to the Service Fee,
if any. The inspection and repair charges for such additional equipment shall
be at the hourly service rates of WilTel then in effect and Customer agrees to
pay such charges. Maintenance service for such Additions shall be subject to the
terms and conditions of this Agreement and be co-terminous with the term of this
Agreement Any Additions purchased from or installed by WilTel require a
separate agreement between the parties.
INDEMNIFICATION; LIMITATION OF LIABILITY. Both WilTel and Customer will defend,
indemnify and hold the other harmless, from and against any and all claims,
demands, losses, orders, judgments or decrees (collectively the "Loss") arising
out of personal injury (including death) or damage to tangible, physical
property (other than the System) to the extent the Loss is caused by the
negligence of the indemnitor and reported to the indemnitor in writing within
sixty (60) days of the incident. WilTel shall be liable for any physical damage
it causes to the System; this liability is limited to repairing or replacing the
System or components thereof. IN NO EVENT, HOWEVER, SHALL EITHER PARTY (OR
WILTEL'S SUPPLIERS OR SUBCONTRACTORS) BE LIABLE FOR (I) ANY SPECIAL, INCIDENTAL,
EXEMPLARY, OR CONSEQUENTIAL DAMAGES, (II) COMMERCIAL LOSS OF ANY KIND (INCLUDING
LOSS OF BUSINESS OR PROFITS), NOR SHALL WILTEL OR ITS SUPPLIERS OR
SUBCONTRACTORS BE LIABLE FOR ANY DAMAGES OF ANY KIND RESULTING FROM UNAUTHORIZED
USE OF THE SYSTEM, INTERRUPTION OF SERVICE OR LOSS OF DATA. THIS PROVISION
APPLIES TO ALL CLAIMS WHETHER BASED UPON BREACH OF WARRANTY, BREACH OF CONTRACT,
NEGLIGENCE, STRICT LIABILITY
IN TORT OR ANY OTHER LEGAL THEORY, AND WHETHER WILTEL OR ITS SUPPLIERS OR ITS
SUBCONTRACTORS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE OR LOSS.
THIS AGREEMENT INCLUDES THE PROVISIONS SET FORTH ON THE REVERSE SIDE OF THIS
PAGE. Customer acknowledges that it has reviewed this Agreement, including all
documents referenced in it, understands it, and is bound by its terms.
--------------------------------------------------------------------------------
WILTEL COMMUNICATIONS, LLC CUSTOMER:
--------------------------------------------------------------------------------
BY: BY:
--------------------------------------------------------------------------------
NAME: NAME:
--------------------------------------------------------------------------------
TITLE: TITLE:
--------------------------------------------------------------------------------
SERVICE EXCLUSIONS. (A) WilTel maintenance service provided hereunder does not
include: (i) electrical work external to the System; (ii) repair of damage
resulting from accident, transportation, neglect or misuse, operation of the
System outside the manufacturer's environmental specifications, failure of
electrical power, air conditioning or humidity control or causes other than
ordinary use; (iii) furnishing supplies or accessories, painting or refinishing
the System or furnishing material therefore, making specification changes or
performing services connected with relocation of System; or adding or removing
accessories, attachments or other devices; (iv) such service which is
impractical to WilTel service representatives to render because of alterations
to the equipment or its connection by mechanical or electrical means to other
devices; or alterations to operating systems; (v) systems engineering services,
programming, and operations procedures of any sort; (vi) service required
because of system operation failure due to other manufacturer's equipment and/or
other vendor malfunctions; (vii) circuit and carrier problems and malfunctions;
and (viii) damage caused or required by or resulting from the fault, misuse, or
negligence of the Customer, including service calls which result in "no trouble
found" in System. Service for such damage resulting from excluded causes will be
billed to Customer at WilTel's then prevailing Time and Materials rates. (B)
When WilTel shall reasonably determine that a System component can no longer be
effectively maintained for any reason, including but not limited to, usage,
environmental conditions, or lack of readily available parts, WilTel shall
inform Customer that the component must be refurbished. Refurbishment when
required shall be performed at the option of WilTel with the Customer's signed
approval, at WilTel's service rates and costs of parts then in effect. Should
the customer elect not to have refurbishment work performed when required,
maintenance coverage under this Agreement shall immediately be terminated for
that specific piece of equipment. Maintenance after such termination shall be
provided only on Time and Materials basis at WilTel's rates then prevailing
rates.
ACCESS. Customer agrees to permit and arrange full access to the Premises
necessary for WilTel's employees to perform the services set forth in this
Agreement. Customer represents and warrants that the conditions to be
encountered by WilTel at the Premises and in areas where work is to be performed
shall (i) be in compliance with all applicable federal, state and local laws,
rules and regulations, (ii) be safe and non-hazardous, and (iii) not contain,
present, or expose WilTel representatives to hazardous materials or hazardous
substances. In the event of breach of the foregoing, in addition to all other
remedies, WilTel may immediately suspend work until Customer has promptly
corrected such condition(s) at Customer's expense. If Customer cannot or does
not correct such condition, it will be WilTel's option as to whether to enter
the area in which the unsafe condition exists. WilTel's reasonable refusal to
enter such a location on the basis of safety will not be deemed a breach of this
Agreement or a default under it, and no liability for such a decision will
attach.
LIMITED WARRANTY WILTEL WARRANTS THAT WORK PERFORMED UNDER THIS AGREEMENT SHALL
BE DONE IN A GOOD AND WORKMANLIKE MANNER AND BE FREE FROM MATERIAL DEFECTS FOR A
PERIOD OF THIRTY (30) DAYS FROM DATE OF PERFORMANCE. CUSTOMER'S SOLE AND
EXCLUSIVE REMEDY FOR BREACH OF SUCH WARRANTY SHALL BE CORRECTION OF THE DEFECT
BY WILTEL AT WILTEL'S EXPENSE. THIS AGREEMENT EXCLUDES ALL OTHER EXPRESS
WARRANTIES AND ALL IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. WILTEL
DISCLAIMS ANY WARRANTY TO PREVENT UNAUTHORIZED USE OF THE SYSTEM.
DEFAULT. If Customer (i) fails to pay the amounts due under this Agreement
within thirty (30) days after such amounts are due or any other agreement with
WilTel, or (ii) materially breaches this Agreement, WilTel may, in addition to
all other remedies available to it at law or in equity, suspend its service
obligations, and terminate this Agreement or furnish service on a time and
materials basis, C.O.D. In the
event of WilTel's material non-performance of this Agreement, Customer may
cancel this Agreement and receive a refund for the unused portion of the Service
Fee, which shall be Customer's exclusive remedy.
FORCE MAJEURE. Except for Customer's payment obligation, either party's
performance shall be adjusted or suspended to the extent performance is beyond
its reasonable control for reasons including, without limitation, the following:
strikes, work stoppages, fire, water, flood, lightning, governmental action,
acts of God or public enemy, delays of suppliers, subcontractors, power company,
local exchange company, or other carrier.
MISCELLANEOUS. (A) If Customer issues a purchase order for its own internal
purposes, Customer agrees that only the terms and conditions of this Agreement
apply. (B) WilTel reserves the right to subcontract any and all of the work to
be performed by it under this Agreement. (C) This Agreement is not assignable by
Customer without the prior written consent of WilTel, provided that Customer
shall have the right to reincorporate under the laws of any State without the
prior written consent of WilTel. (D) The waiver by either party of any default
will not operate as a waiver of any subsequent default. (E) The non-prevailing
party will pay all of the prevailing party's costs or expenses, including
reasonable attorney's and collection fees, incurred in enforcing this Agreement.
(F) This Agreement supersedes all prior or contemporaneous proposals,
communications and negotiations, both oral and written, and constitutes the
entire agreement between WilTel and Customer with respect to the purchase of the
System. Any representations made by an employee, salesperson or agent of either
party and not expressed in this Agreement are not binding upon the respective
party. (G) If any court holds any portion of this Agreement unenforceable, the
remaining language shall not be affected. (H) Any modifications must be in
writing and executed by an authorized representative of the party against whom
enforcement is sought. (I) No action, regardless of form, arising out of this
Agreement may be brought by either party more than one year after the cause of
action has accrued. (J) This Agreement is deemed made and GOVERNED BY THE LAWS
OF THE STATE OF OKLAHOMA except for its rules regarding the conflict of laws.
(K) Customer agrees that neither it nor any of its affiliates will solicit any
of the WilTel employees providing services pursuant to this Agreement with
offers of employment during the term of this Agreement and for a period of one
year after its expiration.
CONCENTRIC NETWORK CORPORATION
COMMON STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of ___________________, 199__, between Concentric
Network Corporation, a Delaware corporation (the "Company"), and Xxxxxxxx
Communications Group, Inc., a Delaware corporation ("Purchaser").
WHEREAS, the Company and Purchaser have entered into that certain
Agreement for Purchase and Sale of Services and Equipment dated July ___, 1997
(the "Services Agreement") which provides, among other things, that, at
Purchaser's option, the Company will pay for $2 million in services by issuing
common stock of equivalent value to the Purchaser when such services are
rendered; and
WHEREAS, Purchaser has delivered services and equipment to the Company
having a value of ____________.
NOW, THEREFORE, the parties agree as follows:
1. PURCHASE AND SALE OF STOCK. Subject to the terms and conditions of
--------------------------
this Agreement, the Company hereby sells to Purchaser and Purchaser purchases
from the Company ______ shares (_________ shares) of the Company's Common Stock
(the "Stock") at a price of $______ per share, for an aggregate purchase price
(the "Purchase Price") of ____________ Dollars ($_________). The Purchase Price
has been paid in the form of services and equipment delivered by the purchaser
to the Company having a value of ____________, receipt of which is hereby
acknowledged by the Company.
2. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
---------------------------------------------
(a) LEGENDS. The share certificate evidencing the Stock issued
--------
hereunder shall be endorsed with the following legend (in addition to any
legends required under the applicable state securities laws):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED."
(b) STOP-TRANSFER NOTICES. Purchaser agrees that, in order to ensure
----------------------
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer"
instructions to its transfer agent, if any, and that, if the Company transfers
its own securities, it may make appropriate notations to the same effect in its
own records.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth in
----------------------------------------------
the Schedule of Exceptions attached hereto as Annex I, the Company hereby
represents and warrants to Purchaser as follows:
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
----------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has full power and authority to own and
operate its properties and assets, and to carry on its business as presently
conducted. The Company is duly qualified, is authorized to do business and is
in good standing as a foreign corporation in all jurisdictions in which the
nature of its activities and of its properties (both owned and leased) makes
such qualification necessary, except for those jurisdictions, in the aggregate,
in which failure to do so would not have a material adverse effect on the
Company or its business.
(b) AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the
-----------------------------------
party of the Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement and the Certificate of
Incorporation, for the sale and issuance of the Stock pursuant hereto and for
the performance of the Company's obligations hereunder has been taken. This
Agreement, when executed and delivered, will be a valid and binding obligation
of the Company enforceable in accordance with its terms. The sale of the Stock
is not and will not be subject to any preemptive rights or rights of first
refusal that have not been properly waived or complied with. When issued in
compliance with the provisions of this Agreement and the Certificate of
Incorporation, the Stock will be validly issued, fully paid and nonassessable,
and will be free of any liens or encumbrances; provided, however, that the
Stock may be subject to restrictions on transfer under state and/or federal
securities laws as set forth herein or as otherwise required by such laws at the
time a transfer is proposed.
(c) COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
----------------------------------
performance of and compliance with this Agreement and the issuance and sale of
the Stock pursuant hereto will not (i) materially conflict with, or result in a
material breach or violation of, or constitute a material default under, or
result in the creation or imposition of any material lien, (ii) violate,
conflict with or result in the breach of any material terms of, or result in the
material modification of, any material contract or otherwise give any other
contracting party the right to terminate a material contract, or constitute (or
with notice or lapse of time both constitute) a material default under any
material contract to which the Company is a party or by or to which it or any of
its assets or properties may be bound or subject or (iii) result in any
violation, or be in conflict with or constitute a default under any term, of its
charter or bylaws.
(d) SECURITIES EXEMPTION. Assuming the accuracy of the
---------------------
representations and warranties of the Purchaser contained in Section 4 hereof,
the offer, sale and issuance of the Stock will be exempt from the registration
requirements of the Securities Act of 1933, as amended (the
2
"Securities Act"), and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws.
(e) VALID ISSUANCE OF STOCK. The Stock which will be purchased by
------------------------
Purchaser hereunder, when issued, sold and delivered in accordance with the
terms hereof for the consideration expressed herein, will be duly and validly
authorized and issued, fully paid and nonassessable.
(f) LITIGATION, ETC. There is no action, suit, proceeding nor, to the
----------------
best of the Company's knowledge, any investigation pending or currently
threatened against the Company, that questions the validity of this Agreement or
the right of the Company to enter into such agreements, or which might result,
either individually or in the aggregate, in any material adverse change in the
assets, condition, affairs or prospects of the Company, financial or otherwise.
(g) GOVERNMENTAL CONSENT, ETC. No consent, approval or authorization
--------------------------
of, or designation, declaration or filing with, any governmental authority on
the part of the Company is required in connection with the valid execution,
delivery, and performance of this Agreement or the offer, sale or issuance of
the Stock, or the consummation of any other transaction contemplated by this
Agreement except certain filings as may be required under the Securities Act and
state securities laws and regulations, which filings will be made timely in
accordance with the applicable law or regulation.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
--------------------------------------------
represents and warrants to the Company as follows:
(a) REQUISITE POWER AND AUTHORITY. Purchaser has all necessary power
------------------------------
and authority under all applicable provisions of law to execute and deliver this
Agreement and to carry out the provisions of this Agreement. This Agreement,
when executed and delivered, will be a valid and binding obligation of
Purchaser, enforceable in accordance with its terms, except as limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights and (ii) general
principles of equity that restrict the availability of equitable remedies.
(b) CONSENTS. All consents, approvals, orders, authorizations,
---------
registrations, qualifications, designations, declarations or filings with any
governmental or banking authority on the party of Purchaser required in
connection with the consummation of the transactions contemplated in this
Agreement have been obtained.
(c) INVESTMENT REPRESENTATIONS. Purchaser understands that the Stock
---------------------------
has not been registered under the Securities Act. Purchaser also understands
that the Stock is being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon Purchaser's
representations contained in the Agreement. Purchaser hereby represents and
warrants to the Company as follows:
3
(i) PURCHASER IS AN ACCREDITED INVESTOR. Purchaser represents that
Purchaser is an Accredited Investor within the meaning of Rule 501(a) of
Regulation D under the Securities Act.
(ii) PURCHASER BEARS ECONOMIC RISK. Purchaser understands that it
must bear the economic risk of this investment indefinitely unless the Stock is
registered pursuant to the Securities Act or an exemption from registration is
available. Purchaser understands that it has no registration rights with
respect to the Stocks. Purchaser also understands that there is no assurance
that any exemption from registration under the Securities Act will be available
and that, even if available, such exemption may not allow Purchaser to transfer
all or any portion of the Stock under the circumstances, in the amounts or at
the times Purchaser might propose.
(iii) ACQUISITION FOR OWN ACCOUNT. Purchaser is acquiring
the Stock for Purchaser's own account for investment only, and not with a view
towards their distribution within the meaning of the Securities Act.
(iv) PURCHASER CAN PROTECT ITS INTEREST. Purchaser represents that by
reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement. Purchaser is not a corporation,
trust or partnership specifically formed for the purpose of consummating these
transactions.
(v) COMPANY INFORMATION. Purchaser has had an opportunity to discuss
the Company's business, management and financial affairs with directors,
officers and management of the Company and has had the opportunity to review the
Company's operations and facilities. Purchaser has also had the opportunity to
ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment.
(d) DISPOSITION UNDER RULE 144. Purchaser understands that:
---------------------------
(i) The shares of Stock are restricted securities within the meaning
of Rule 144 promulgated under the Securities Act; that the exemption from
registration under Rule 144 will not be available in any event for at least one
(1) year from the date of purchase and payment of the Stock, and even then will
not be available unless (i) a public trading market then exists for the Common
Stock of the Company, (ii) adequate information concerning the Company is then
available to the public, and (iii) other terms and conditions of Rule 144 are
complied with; and that any sale of the Stock may be made only in limited
amounts in accordance with such terms and conditions of Rule 144;
(ii) At the time Purchaser wishes to sell the Stock there may be no
public market upon which to make such a sale; that, even if such a public market
then exists, the Company may not be satisfying the current public information
requirements of Rule 144; and that, in such event,
4
Purchaser would be precluded from selling the Stock under Rule 144 even if the
minimum holding period had been satisfied; and
(iii) In the event all of the requirements of Rule 144 are
not satisfied, registration under the Securities Act or compliance with
Regulation A or another registration exemption will be required prior to any
disposition of the Stock by Purchaser; that, notwithstanding the fact that Rule
144 is not exclusive, the staff of the SEC has expressed its opinion that
persons proposing to sell private placement securities other than in a
registered offering or pursuant to Rule 144 will have a substantial burden of
proof in establishing that an exemption from registration is available for such
offers or sales; and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
(e) FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting
-----------------------------------
Purchaser's representations set forth above, Purchaser further agrees that
Purchaser shall in no event make any disposition of all or any portion of the
Stock unless and until either:
(i) There is then in effect a Registration Statement under the
Securities Act covering such proposed disposition, and such disposition is made
in accordance with said Registration Statement; or
--
(ii) (1) Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and (2) Purchaser shall
have furnished the Company with an opinion of Purchaser's counsel, reasonably
satisfactory to the Company, to the effect that such disposition will not
require registration of such shares under the Securities Act.
5. XXXX-XXXXX-XXXXXX COMPLIANCE. Notwithstanding anything else in this
-----------------------------
Agreement, if the sale and issuance of the Stock is subject to the premerger
notification requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), it shall be a condition to the purchase of the
Stock that any waiting period under the HSR Act applicable to the purchase of
the Stock shall have expired or been terminated and any approvals required
thereunder shall have been obtained, and the parties shall cooperate in promptly
filing premerger reports and in taking all steps reasonably necessary to obtain
early termination of any applicable HSR Act waiting periods. If any such
waiting period shall not have expired or been subject to early termination on or
before the date ninety (90) days from the date of this Agreement, either party
may terminate this Agreement by giving written notice to the other.
6. COVENANTS OF THE COMPANY
6.1 RULE 144 REPORTING. With a view to making available to Purchaser the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Stock to the public without registration, the Company agrees at all times
after ninety (90) days after the effective date of the Registration Statement
to:
5
(a) make and keep public information available, as those terms are
understood and defined in XXX Xxxx 000,
(x) use its best efforts to file with the SEC in a timely manner all
reports and other documents required of the Company under the Securities Act
and the Securities Exchange Act of 1934, as amended (the "Exchange Act),
(c) so long as Purchaser owns any Stock, to furnish to Purchaser
within a reasonable time upon a written request by Purchaser, a written
statement by the Company as to its compliance with the reporting engagements of
said Rule 144 (at any time after ninety (90) days after the effective date of
the first registration statement filed by the Company for an offering of its
securities to the general public) and of the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
so filed by the Company as Purchaser may reasonably request in complying with
any rule or regulation of the SEC allowing Purchaser to sell any such securities
without registration.
7. GOVERNING LAW. This Agreement shall be governed and construed by the
--------------
laws of the State of California as applied to agreements made and performed in
California by residents of the State of California.
8. MISCELLANEOUS.
--------------
(a) RIGHTS AS SHAREHOLDER. Subject to the provisions and limitations
----------------------
hereof, Purchaser may exercise all rights and privileges of a shareholder of the
Company with respect to the Stock.
(b) FURTHER ASSURANCES. The parties agree to execute such further
-------------------
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.
(c) NOTICES. Any notice required or permitted hereunder shall be
--------
given in writing and shall be deemed effectively given upon personal delivery
(including by express courier) or upon deposit in the United States Post Office,
by First Class mail with postage and fees prepaid, addressed to Purchaser at its
address shown on the Company's records and to the Company at the address of its
principal corporate offices (attention: Secretary) or at such other address as
such party may designate by ten (10) days advance written notice to the other
party.
(d) ASSIGNMENT. This Agreement shall inure to the benefit of the
-----------
successors and assigns of the Purchaser and, subject to the restrictions on
transfer herein set forth, be binding upon Purchaser, its heirs, executors,
administrators, successors and assigns. The rights of Purchaser under this
Agreement may be assigned only with the prior written consent of the Company,
which shall not be unreasonably withheld.
6
(e) WAIVER. Either party's failure to enforce any provision or
-------
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement. The rights granted
both parties herein are cumulative and shall not constitute a waiver of either
party's right to assert all other legal remedies available to it under the
circumstances.
(f) COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original and all of which together shall
constitute one instrument.
(g) ENTIRE AGREEMENT. This Agreement represents the entire agreement
-----------------
between the parties with respect to the purchase of Stock by Purchaser, may be
modified or amended only in a writing signed by both parties, and satisfies all
of the Company's obligations to Purchaser with regard to the issuance or sale of
Stock.
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth in the first paragraph hereof.
COMPANY:
CONCENTRIC NETWORK CORPORATION
00000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
By:__________________________
Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
PURCHASER:
XXXXXXXX COMMUNICATIONS GROUP, INC.
By:__________________________
(Signature)
Its__________________________
8
6/4/97
Concentric Network Corporation
MCI Contract Commitments
From: Xxx Xxxx
MCI
--- EFFECTIVE TERM MINIMUM PER WHAT
ENHANCED SERVICES 1/1/97 36 MONTHS $1.2M ANNUAL PORTS/PVC/ACCESS
AGREEMENT (ATM)
ACTUALS 1/1/97-5/31/97 1,005,186
SPECIAL CUSTOMER 11/1/96 6/6/98
ARRANGEMENT $3.6M 11/1/96-4/30/97 All Services
includes several
standard tariffed ACTUALS 11/1/96-12/31/96 3,670,613
MCI services, like 1/1/97-4/30/97 3,330,745
800 service and
Dedicated Access $4.915M 5/1/97-6/6/98 All Services
ACTUALS 5/1/97-5/31/97 589,869
$1.315M 11/1/96-6/6/98 Dedicated Access
Sub minimum
ACTUALS 11/1/00-00-00-00 397,157
1/1/97-5/31/97 1,000,303
6/4/97
Concentric Network Corporation
AT&T Contract Commitments
From: Xxx Xxxx
Contract begin 21-Jun-96
Contract ends 21-Jun-99
---------
Contract Terminates 01-Jun-99
---------
Term of contract 36 months
COMMITMENT TOTAL YEARLY
PRODUCT PER MONTH COMMITMENT COMMITMENT ACTUALS FRAME RELAY PRIVATE LINE T45
------- --------- ---------- ---------- --------------- ----------- ------------ -------
7/1/96-12/31/96 1,526,256 2,384,086 240,828
Frame Relay 210,000 7,560,000 2,520,000 1/1/97-5/31/97 1,602,309 1,298,536 188,190
----------------------------------------
Private Line 50,000 1,800,000 600,000 Total To Date 3,128,565 3,682,622 429,018
Local Channels -- Avg/11 months 284,415 334,784 39,002
T-45 37,638 1,354,968 451,656 CURRENT MONTHLY
RUN RATE 284,000 220,000 38,000
----------------------
Total Potential 10,714,968 3,571,656
Less: 36% discount (3,857,388) (1,285,796)
-----------------------
Out of pocket Cash 6,857,580 2,285,860
CONCENTRIC NETWORK CORPORATION
RACAL CURRENT STATUS:
---------------------
Lease Obligation as of 6/30/97: $51,468,478
Monthly Lease Payment as of 7/1/97: $1,387,243
Concentric Network Corporation
00000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
October 31, 1996
Racal-Datacom, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
ATTENTION: XX. XXXX XXXXXXXXX, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Ladies and Gentlemen:
In order to induce Racal-Datacom, Inc. ("RDI") to enter into the
Series D Preferred Stock Purchase Agreement dated the date hereof, to take the
actions required thereby and to purchase $10,000,000 and negotiate for the
possible acquisition of up to an additional $10,000,000 of Series D Preferred
Stock, and in consideration of the payment of $10 by RDI to Concentric Network
Corporation ("CNC") the receipt of which is hereby acknowledged, CNC hereby
undertakes, until the fifth anniversary of the date of this letter agreement
to the extent that RDI can provide equipment and services on a commercially
competitive basis, to purchase in all circumstances all of such equipment and
service from RDI.
This undertaking is being delivered subsequent to the execution of the
Series D Preferred Stock Purchase Agreement, the Amended and Restated
Registration Rights Agreement, the Shareholder Agreement and the Warrants to
Purchase Shares of Series D Preferred Stock of CNC issued by CNC to RDI, and
is expressly not integrated with or superseded by such agreements or any other
agreements required or contemplated thereby.
Very truly yours,
CONCENTRIC NETWORK CORPORATION
/s/ Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
Chief Executive Officer
