EXHIBIT 10.16
AMENDMENT TO RESALE AGREEMENTS
This Amendment to Resale Agreements (this "Amendment"), dated as of
this ___ day of June, 1999 (the "Effective Date"), between New York Telephone
Company, d/b/a Xxxx Atlantic - Connecticut and Xxxx Atlantic - New York,
respectively, New England Telephone and Telegraph Company, d/b/a Xxxx
Atlantic - Maine, Xxxx Atlantic - Massachusetts, Xxxx Atlantic - New
Hampshire, Xxxx Atlantic - Rhode Island and Xxxx Atlantic - Vermont,
respectively, Xxxx Atlantic - Delaware, Inc., Xxxx Atlantic - District of
Columbia, Inc., Xxxx Atlantic - Maryland, Inc., Xxxx Atlantic - New Jersey,
Inc., Xxxx-Atlantic - Pennsylvania, Inc., Xxxx Atlantic - Virginia, Inc. and
Xxxx Atlantic - West Virginia, Inc. (individually and, collectively, as
applicable, "BA"), on the one hand, and collectively, as applicable, as
"Reseller", on the other hand (BA and Reseller individually being referred to
as a "Party" and, collectively, as the "Parties"). Reseller and
WHEREAS, BA and Reseller are parties to _____ (x) Resale
Agreements, for the States of [Delaware, Maryland, New Jersey, Pennsylvania,
Virginia, Vermont, West Virginia, the District of Columbia, Maine,
Massachusetts, New Hampshire and Rhode Island], respectively (the foregoing
______ (x) agreements being referred to as the "Resale Agreements"), and
Reseller purchases services from BA for resale in the State of New York under
BA's New York resale tariff, and ReseIler plans to purchase services from BA
for resale in the State of Connecticut under BA's Connecticut resale tariff
and in the Commonwealth of Massachusetts under BA's Massachusetts resale
tariff;
WHEREAS, Reseller wishes to obtain the Volume and Term Discount, the
Winback Discount and the lntraLATA Toll Discount, as applicable, referred to
herein on certain Eligible Services described herein that it purchases from BA
under the Resale Agreements and/or applicable BA resale tariffs, which Eligible
Services Reseller resells in respect of certain of the Qualified Business Lines
(as hereinafter defined), and BA is willing to provide such additional discounts
to Reseller, subject to the express terms and conditions set forth herein;
WHEREAS, entry by BA into this Amendment is a voluntary act, not
required by and, in excess of the prescriptions under, the Telecommunications
Act of 1996 (the "TelAct") or any other applicable law;
WHEREAS, while BA is entering into this Amendment to increase the
volume of resale business it conducts with resellers, because, among other
things, the arrangements set forth in this Amendment are new and untested in
the marketplace, BA is willing to enter into such arrangements with Reseller
and other resellers for only a limited time period and under certain
conditions (including, without limitation, as set forth
in the next WHEREAS clause), after which BA will examine the effects of the
foregoing arrangements on its business and, at its sole option, determine
whether to continue this program in the future;
WHEREAS, BA is willing to enter into amendments such as this
Amendment (and to enter into modifications of the terms of such amendments,
at BA's sole option, in the future), and to provide the foregoing additional
discounts, only with a single reseller or with multiple resellers (such as
the Reseller Companies) that are commonly wholly owned and controlled
(directly or indirectly) by the same parent company, which itself must become
a party to this Amendment) that, not later than November 30, 1999, enter into
(and submit their first order under) an amendment to resale agreements, a
separate agreement incorporating by reference the terms of applicable BA
resale tariffs for a particular reseller or an agreement that does both (on
terms satisfactory to BA that are substantially identical to the terms
hereof), and BA is not willing and is not required under the TelAct or other
applicable law to provide any such additional discounts pursuant to
negotiations under Section 251 of the TelAct (or any successor provision
thereto)(although BA expresses no opinion as to whether and, how, another
reseller may adopt, under Section 252(i) of the TelAct, the terms of the
Resale Agreements as amended hereby).
NOW THEREFORE, in consideration of the mutual agreements set forth
below, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, BA and Reseller hereby agree as
follows:
1. AMENDMENTS TO RESALE AGREEMENTS. Subject to the terms and
conditions set forth herein, the Parties hereby amend each of the Resale
Agreements and enter into a separate agreement incorporating by reference the
terms of BA's applicable resale Tariffs for the State of New York, the
Commonwealth of Massachusetts (and any other States within BA's local service
area, as of the date hereof, in which BA has a resale Tariff, from time to
time, under which Reseller purchases services from BA), as amended from time
to time, with respect only to Reseller, as follows:
(a) TERM OF RESALE AGREEMENTS. The stated term of each Resale
Agreement is hereby amended and restated so that each Resale Agreement,
unless terminated earlier in accordance with the terms thereof, shall expire
five (5) years from the date hereof, which date is May __, 2004. Such five
(5) year period commencing on the date hereof is referred to as the "Service
Term". Notwithstanding the foregoing, the right, if any, of a Party under any
Resale Agreement to terminate such Resale Agreement, other than due to a
breach thereof or at the end of the term thereof (as amended hereby), in each
case in accordance with the terms thereof, is hereby extinguished and shall
be of no effect.
(b) ANNUAL VOLUME COMMITMENT. (i) Subject to the terms and
conditions set forth herein, Reseller hereby agrees to purchase from BA,
under the
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Resale Agreements and/or applicable BA resale tariffs, for resale by Reseller,
an aggregate number of business customer local exchange access lines, each of
which lines is designated with one of the USOC codes set forth in Appendix 1
hereto (each a "Qualified Business Line" and, collectively, the "Qualified
Business Lines") for each year of the Service Term (such minimum amount being
the "Annual Volume Commitment") in accordance with the following schedule:
Year 1: at least 50,000 Qualified Business Lines;
Year 2: at least 100,000 Qualified Business Lines; and
Years 3-5: at least 200,000 Qualified Business Lines each year;
provided, however, that a line shall not be counted as a Qualified Business
Line (and thus shall not be counted for purposes of the Annual Volume
Commitment Determination set forth below, and shall not receive the Volume
and Term Discount, the Winback Discount or the IntraLATA Toll Discount
described below) if such line (A) has been assigned by a third party customer
of BA to Reseller or any other reseller; provided further that a line type
set forth in Appendix 1 hereto and assigned by a third party customer of BA
to Reseller, where the ordering and administration of such assignment is
handled by the XX XXXXX, shall be counted as a Qualified Business Line (and
thus shall be counted for purposes of the Annual Volume Commitment
Determination set forth below) but shall not receive the Volume and Term
Discount, the Winback Discount or the IntraLATA Toll Discount described below
or (B) is being purchased from BA under non-tariff based pricing (as
determined by BA) including, without limitation, ICB pricing or custom
pricing; provided further that a tariffed non-ICB Centrex-Registered
Trademark- line (e.g., a CustoFlex-Registered Trademark- 2100,
CustoPak-Registered Trademark-, Centrex Plus-Registered Trademark-,
Intellipath-Registered Trademark- or Intellipath II-Registered Trademark-
line) shall be counted as a Qualified Business Line (and thus shall be
counted for purposes of the Annual Volume Commitment Determination set forth
below) but shall not receive the Volume and Term Discount, the Winback
Discount or the IntraLATA Toll Discount described below; provided further,
that for purposes of this Amendment, Qualified Business Lines are defined in
terms of DS0 equivalents and, by way of example, one FlexPath-Registered
Trademark- line purchased by Reseller from BA under a Resale Agreement or
applicable BA resale Tariff for resale would equal twenty-four (24) Qualified
Business Lines.
(ii) The Annual Volume Commitment may be purchased by Reseller
from BA under a single effective Resale Agreement or applicable BA resale
tariff, or under multiple, effective Resale Agreements and/or applicable BA
resale tariffs (at Reseller's sole option), and the number of Qualified
Business Lines purchased by Reseller under each of the Resale Agreements and
the applicable BA resale tariffs for resale shall be considered in the
aggregate to ascertain the Annual Volume Commitment Determination hereunder;
provided, however, that unless BA, in its sole discretion, determines
otherwise, a line shall not be counted as a Qualified Business Line (and thus
shall not be counted for purposes of the Annual Volume Commitment
Determination set forth below, and shall not receive the Volume and Term
Discount, the Winback Discount or the IntraLATA Toll Discount described
below) if it is not included within BA's local service area as of the date
hereof.
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(iii) For the avoidance of any doubt, Reseller's purchase of
Qualified Business Lines and Eligible Services pursuant to this Amendment is for
the sole purpose of resale thereof and, as such, Reseller may not utilize any
Qualified Business Line, Eligible Service or portion thereof for its own use or
that of its parent, subsidiaries or affiliates and, in addition, Reseller may
not utilize any Eligible Service or portion thereof except in connection with
purchase of a Qualified Business Line hereunder (i.e., Reseller may not purchase
telecommunications services from BA on a stand alone basis).
(c) BA INTRALATA TOLL SERVICE. Reseller hereby agrees, at all
times during the Service Term, to have not less than eighty percent (80%) of the
Qualified Business Lines purchased by Reseller from BA presubscribed to BA's
IntraLATA Toll service. Reseller further agrees, during each year of the Service
Term, to purchase from BA, on a resold basis under the Resale Agreements and/or
applicable BA resale tariffs, with respect to such Qualified Business Lines, an
aggregate total number of minutes of use of BA's IntraLATA Toll service of not
less than the respective amounts set forth in Section 1(h)(ix) hereof.
(d) ANNUAL VOLUME COMMITMENT DETERMINATION. On an annual basis
beginning at the end of the first year of the Service Term, BA shall determine
the number of Qualified Business Lines purchased by Reseller from BA during the
immediately preceding year. Such number shall be referred to herein as the
"Annual Volume Commitment Determination" and shall equal, with respect to the
determinations made following each of the first three (3) years of the Service
Term, the average of the Qualified Business Lines that Reseller purchased from
BA hereunder that are actually in service on the last day of each of the last
three (3) consecutive months of the year in question. With regard to subsequent
years, the respective Annual Volume Commitment Determinations shall be
calculated as follows: the number of Qualified Business Lines purchased by
Reseller from BA hereunder that are actually in service on the last day of each
respective calendar quarter of the year in question shall be added together,
and the resulting sum shall be divided by four (4).
(e) ANNUAL VOLUME COMMITMENT MEASUREMENT. On an annual basis
beginning at the end of the first year of the Service Term, BA shall compare
Reseller's actual annual attainment of Qualified Business Lines as determined
in accordance with Section 1(d) hereof to the defined target volumes in Table
1 below. Such comparison shall be referred to herein as the "Annual Volume
Commitment Measurement". As further set forth in Section 1(f) hereof, the
Annual Volume Commitment Measurement shall confirm the appropriate level of the
Volume and Term Discount for the year just completed and determine the
applicable Volume and Term Discount for the following year.
VOLUME & TERM MATRIX
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V & T Tier EOY 1 EOY 2 EOY 3 EOY 4 EOY 6
------------------------------------------------------------------------------------------------------------------------
Tier 1(A) greater than or greater than or greater than or greater than or greater than or
equal to 45k to 50K equal to 90K to 100K equal 180K to 200K equal 200K QBLs equal 200K QBLs
QBLs QBLs QBLs
Tier 1(B) greater than or greater than or greater than or
equal to 47.5k to 50K equal to 95K to 100K equal to 190K to 200K N/A N/A
QBLs QBLs QBLs
------------------------------------------------------------------------------------------------------------------------
Tier 2 30K to Tier 1 60K to Tier 1 150K to Tier 1 150K to Tier 1 150K to Tier 1
------------------------------------------------------------------------------------------------------------------------
Tier 3 N/A N/A 100K to Tier 2 100K to Tier 2 100K to Tier 2
------------------------------------------------------------------------------------------------------------------------
Tier 4 less than 30K less than 60K less than 100K less than 100K less than 100K
Terminate Terminate Terminate Terminate Terminate
Contract Contract Contract Contract Contract
------------------------------------------------------------------------------------------------------------------------
TABLE 1
The Tier 1 target volumes for each of the first three (3) years of the
Service Term shall be set at two (2) separate ranges, Tier 1(A) and Tier
1(B). During this period of the Service Term when the Annual Volume
Commitment Determination falls within Tier 1, the actual "Tier 1 range (i.e.,
Tier 1(A) or Tier 1(B)) used for the Annual Volume Commitment Measurement
will be based on Reseller's attainment of the Annual Volume Commitment set
forth in Section 1(b) hereof. Specifically, if Reseller's Qualified Business
Line volume, as counted on the last day of the last month of the year in
question, is greater than or equal to the Annual Volume Commitment set forth
in Section 1(b) hereof for the same year, then Tier 1(A) will be used for the
Annual Volume Commitment Measurement. If Reseller's Qualified Business Line
volume, as counted on the last day of the last month of the year in question,
is less than the Annual Volume Commitment set forth in Section 1(b) hereof
for the same year, then Tier 1(B) will be used for the Annual Volume
Commitment Measurement.
(f) MINIMUM PURCHASE. (i) Subject to the terms of this
Amendment, for each year of the Service Term, Reseller shall purchase a
minimum quantity of Qualified Business Lines not less than the applicable
Annual Volume Commitment, as calculated using the Annual Volume Commitment
Determination.
(ii) If the Annual Volume Commitment Determination following the
first year of the Service Term does not yield a number of Qualified Business
Lines equal to at least 30,000, BA may, at its option, terminate this
Amendment. In case of such termination, Reseller shall, within thirty (30)
days of receipt of written demand therefor, pay to BA in immediately
available funds (in addition to any other amounts owed to BA under the Resale
Agreements and/or applicable BA resale tariffs), an amount equal to (A) all
of the discounts under this Amendment that Reseller received from the point
of termination back to the Effective Date of this Amendment, plus (B)
interest on such discounts dating back to the date received from BA
calculated using an interest rate equal to the greater of (1) the "Prime"
interest rate as set forth in The Wall Street Journal from time to time and
(2) the interest rate that Reseller demonstrates to BA's reasonable
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satisfaction that it has obtained (or can demonstrate to BA's reasonable
satisfaction that it could obtain) from a commercial lender for loan amounts
equal to not less than the entire amount to be paid to BA under the applicable
subsection (e.g., subsection 1(f)(ii) or 1(g)(i), etc.) of this Amendment with
a maturity of not less than one (1) year (the foregoing being the "Applicable
Interest Rate"), plus (C) any applicable taxes relating thereto, plus (D) a
handling fee equal to five percent (5%) of the amount of the discounts under
this Amendment that Reseller received.
(iii) If the Annual Volume Commitment Determination following the
second year of the Service Term does not yield a number of Qualified Business
Lines equal to at least 60,000, BA may, at its option, terminate this Amendment.
In case of such termination, Reseller shall, within thirty (30) days of receipt
of written demand therefor, pay to BA in immediately available funds (in
addition to any other amounts owed to BA under the Resale Agreements and/or
applicable BA resale tariffs), an amount equal to (A) all of the discounts
under this Amendment that Reseller received from the point of termination back
to the Effective Date of this Amendment, plus (B) interest on such discounts
dating back to the date received from BA calculated using the Applicable
Interest Rate, plus (C) any applicable taxes relating thereto, plus (D) a
handling fee equal to five percent (5%) of the amount of the discounts under
this Amendment that Reseller received.
(iv) If the Annual Volume Commitment Determination following the
third year of the Service Term does not yield a number of Qualified
Business Lines equal to at least 100,000, BA may, at its option, terminate
this Amendment. In case of such termination, Reseller shall, within thirty
(30) days of receipt of written demand therefor, pay to BA in immediately
available funds (in addition to any other amounts owed to BA under the
Resale Agreements and/or applicable BA resale tariffs), an amount equal to
(A) all of the discounts under this Amendment that Reseller received from the
point of termination back to the Effective Date of this Amendment, plus (B)
interest on such discounts dating back to the date received from BA
calculated using the Applicable Interest Rate, plus (C) any applicable taxes
relating thereto, plus (D) a handling fee equal to five percent (5%) of the
amount of the discounts under this Amendment that Reseller received.
(v) If the Annual Volume Commitment Determination following the
fourth year of the Service Term does not yield a number of Qualified Business
Lines equal to at least 100,000, BA may, at its option, terminate this
Amendment. In case of such termination, Reseller shall, Within thirty (30)
days of receipt of written demand therefor, pay to BA in immediately
available funds (in addition to any other amounts owed to BA under the Resale
Agreements and/or applicable BA resale tariffs), an amount equal to (A) all
of the discounts under this Amendment that Reseller received during the year
in question, plus (B) interest on such discounts dating back to the date
received from BA calculated using the Applicable Interest Rate, plus (C) any
applicable taxes relating thereto, plus (D) a handling fee equal to five
percent (5%) of the amount of the discounts under this Amendment that
Reseller received during the year in
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question.
(vi) BA will monitor Reseller's monthly volumes of Qualified
Business Lines during the fifth year of the Service Term to ensure compliance
with minimum commitment requirements, i.e., greater than or equal to 100,000
Qualified Business Lines. If Reseller's volumes should fall below 100,000 as
of the last day of any month, then BA may, at its option, terminate this
Amendment. In case of such termination, Reseller shall, within thirty (30)
days of receipt of written demand therefor, pay to BA in immediately
available funds (in addition to any other amounts owed to BA under the Resale
Agreements and/or applicable BA resale tariffs), an amount equal to (A) all
of the discounts under this Amendment that Reseller received during the year
in question, plus (B) interest on such discounts dating back to the date
received from BA calculated using the Applicable Interest Rate, plus (C) any
applicable taxes relating thereto, plus (D) a handling fee equal to five
percent (5%) of the amount of the discounts under this Amendment that
Reseller received during the year in question.
(g) TERMINATION CHARGE. (i) In each case during the first three
(3) years of the Service Term, if Reseller terminates any of the Resale
Agreements or this Amendment, or if BA in its discretion terminates any of
the Resale Agreements or this Amendment due to breach, or if Reseller ceases
to be a certified reseller (and does not restore its certification within
forty-five (45) days of the loss or expiration of certification) in each
State in which it has a Resale Agreement with BA or purchases services from
BA under an applicable BA resale tariff, Reseller shall, within thirty (30)
days of receipt of written demand therefor, pay to BA in immediately
available funds (in addition to any other amounts owed to BA under the Resale
Agreements and/or applicable BA resale tariffs), an amount equal to (A) all
of the discounts under this Amendment that Reseller received from the point
of termination back to the Effective Date of this Amendment (less the
amounts, if any, previously refunded by Reseller to BA under this Amendment),
plus (B) interest on such discounts dating back to the date received from BA
calculated using the Applicable Interest Rate, plus (C) any applicable taxes
relating thereto, plus (D) a handling fee equal to five percent (5%) of the
amount of the discounts under this Amendment that Reseller received.
(ii) In each case during the fourth and fifth years of the Service
Term, if Reseller terminates any of the Resale Agreements or this Amendment, or
if BA in its discretion terminates any of the Resale Agreements or this
Amendment due to breach, or if Reseller ceases to be a certified reseller (and
does not restore its certification within forty-five (45) days of the loss or
expiration of certification) in each State in which it has a Resale Agreement
with BA or purchases services from BA under an applicable BA resale tariff,
Reseller shall, within thirty (30) days of receipt of written demand therefor,
pay to BA in immediately available funds (in addition to any other amounts owed
to BA under the Resale Agreements and/or applicable BA resale tariffs), an
amount equal to (A) all of the discounts under this Amendment that Reseller
received during the number of months or portions thereof in the year of the
Service Term in which termination or loss of certification occurs, plus (B)
interest on such discounts
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dating back to the date received from BA calculated using the Applicable
Interest Rate, plus (C) any applicable taxes relating thereto, plus (D) a
handling fee equal to five percent (5%) of the amount of the discounts under
this Amendment that Reseller received during the year in question.
(h) ADDITIONAL DISCOUNTS. (i) Subject to Reseller having met
each of the conditions set forth in Section 2 of this Amendment, and subject
also to the other conditions set forth in this Amendment, Reseller shall
receive, on each of the Qualified Business Lines being purchased from BA and
resold hereunder as part of the Annual Volume Commitment, during the Service
Term only, an additional (A) four percent (4%) to twelve percent (12%)
discount, as applicable (the "Volume and Term Discount), in accordance with
the schedule set forth in Table 2 following, (B) an additional ten percent
(10%) discount (the "Winback Discount") to the extent applicable under
subsection (h)(ii) below and (C) an additional three percent (3%) discount
(the "IntraLATA Toll Discount"), to the extent applicable under subsection
(h)(ix) below, in each case on certain services, as set forth on Appendix 1
hereto (each an "Eligible Service" and, collectively, the "Eligible
Services"), that Reseller purchases under any of the Resale Agreements and/or
applicable BA resale tariffs; provided, however, such Volume and Term
Discount, Winback Discount and IntraLATA Toll Discount, at BA's sole option,
shall not apply to Qualified Business Lines in any month in excess of 500,000
purchased by Reseller from BA for resale; and provided further, that such
Volume and Term Discount, Winback Discount and IntraLATA Toll Discount shall
not apply to Centrex-Registered Trademark- lines (even with respect to such
lines that constitute Qualified Business Lines hereunder) purchased by
Reseller from BA for resale.
VOLUME AND TERM DISCOUNT SCHEDULE
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V & T Tier EOY 1 EOY 2 EOY 3 EOY 4 EOY 5
-----------------------------------------------------------------------------------------------------------------------
Tier 1(A) greater than or greater than or greater than or greater than or greater than or
equal to 45k to 50K equal to 90K to 100K equal to 180K to 200K equal to 200K equal to 200K
QBLs QBLs QBLs QBLs QBLs
7% 10% 12% 12% 12%
-----------------------------------------------------------------------------------------------------------------------
Tier 1(B) greater than or greater than or greater than or
equal to 47.5K to 50K equal to 95K to 100K equal to 190K to 200K N/A N/A
QBLs QBLs QBLs
7% 10% 12%
-----------------------------------------------------------------------------------------------------------------------
Tier 2 30K to Tier 1 60K to Tier 1 150K to Tier 1 150K to Tier 1 150K to Tier 1
4% 7% 10% 10% 10%
-----------------------------------------------------------------------------------------------------------------------
Tier 3 N/A N/A 100K to Tier 2 100K to Tier 2 100K to Tier 2
7% 7% 7%
-----------------------------------------------------------------------------------------------------------------------
Tier 4 less than 30K less than 60K less than 100K less than 100K less than 100K
Terminate Terminate Terminate Terminate Terminate
Contract Contract Contract Contract Contract
-----------------------------------------------------------------------------------------------------------------------
Table 2
The Volume and Term Discount, Winback Discount and IntraLATA Toll
Discount on BA's applicable retail prices for the foregoing services is
exclusive of and, in addition to, the respective wholesale discounts to which
Reseller may be entitled under
8
the Resale Agreements or applicable BA resale tariffs, as amended from time
to time, prior to giving effect to this Amendment (the "Existing Wholesale
Discounts"); provided, however, that to the extent Reseller obtains such
Eligible Services without also purchasing BA's operator services and
directory assistance, the amount of the Volume and Term Discount, Winback
Discount and IntraLATA Toll Discount shall be reduced, as necessary, to give
effect to an Existing Wholesale Discount based upon purchase by Reseller of
BA's operator services and directory assistance. Any services with respect to
a Qualified Business Line that Reseller purchases from BA under a Resale
Agreement or applicable BA resale tariff, but which are not Eligible
Services, or which are Eligible Services but are purchased by Reseller
pursuant to a BA promotional discount (given at the retail and/or the
wholesale level) or pursuant to or in connection with a volume, term or other
discount under an applicable BA tariff or contractual arrangement (regardless
of the parties thereto) other than the Resale Agreements, shall not qualify
for the Volume and Term Discount, Winback Discount or IntraLATA Toll Discount
and no such Volume and Term Discount, Winback Discount or IntraLATA Toll
Discount shall be applied thereto. With the exception of the Business Link,
Key Connections, and Rewarding Connections Optional Calling Plans, neither
the IntraLATA Toll Discount nor the Volume and Term Discount shall apply to
services (whether or not Eligible Services) purchased under an optional
calling plan, although minutes of use purchased by Reseller from BA under an
IntraLATA Toll optional calling plan shall be counted for purposes of
calculations to determine whether Reseller met the applicable MOU Target, as
defined and, further set forth in, subsection (ix) below.
(ii) Upon receipt by BA of written notice from Reseller, in which
Reseller represents and warrants that a Qualified Business Line (excluding
Centrex-Registered Trademark- lines that are Qualified Business Lines) was
not on the BA network (other than with respect to purchase of number
portability services from BA) for at least the immediately preceding ninety
(90) day period, but is now being converted to the BA network from a carrier
other than Reseller that is not an affiliate of Reseller, BA shall provide
to Reseller (unless BA reasonably believes, in its sole discretion, that
Reseller is materially inaccurate with respect to the foregoing notice
including, without limitation, due to such inaccuracy in Reseller's previous
notices) an additional Winback Discount on its purchase of Eligible Services
in respect of such line (effective from the date of conversion to the BA
network), so long as such line remains on the BA network (and the entity from
which the conversion to the BA network was made remains a non-affiliate of
Reseller), provided that the Winback Discount shall not apply beyond the
twelve (12) month period immediately after the date of such conversion. For
purposes of the foregoing, being on "the BA network" shall be determined by BA
in its sole reasonable discretion including, without limitation, with
reference to the end user customer's telephone number (as opposed to the end
user customer's name). Upon receipt of a request from BA, Reseller shall
provide to BA a copy of documentation reasonably requested by BA to support
Reseller's claim that a line is eligible for the Winback Discount. Such
documentation may include, but is not limited to, the following: (A) orders
or similar documentation for number portability from a CLEC network to the BA
network for the affected line; (B) orders or similar documentation
demonstrating that
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any lines being converted from a CLEC network to the BA network on a
disconnect/new connect basis (in lieu of number portability) are one in the
same; and (C) other documentation as reasonably requested by BA from time to
time. In addition to any other audit rights BA may have under the Resale
Agreements and/or applicable BA tariffs, BA shall have the right (but not the
obligation) to audit Reseller to ascertain whether Reseller is complying
with the foregoing requirements with respect to eligibility for the Winback
Discount.
(iii) Subject to repayment under the terms of this Amendment,
during the first year of the Service Term the Volume and Term Discount shall
equal seven percent (7%) if the Annual Volume Commitment Measurement reflects
Tier 1 volume attainment or four percent (4%) if the Annual Volume Commitment
Measurement reflects Tier 2 volume attainment.
(iv) Subject to repayment under the terms of this Amendment,
during the second year of the Service Term the Volume and Term Discount shall
equal ten percent (10%) if the Annual Volume Commitment Measurement reflects
Tier 1 volume attainment or seven percent (7%) if the Annual Volume
Commitment Measurement reflects Tier 2 volume attainment.
(v) Subject to repayment under the terms of this Amendment,
during the third through fifth years of the Service Term the Volume and Term
Discount shall equal twelve percent (12%) if the Annual Volume Commitment
Measurement reflects Tier 1 volume attainment or ten percent (10%) if the
Annual Volume Commitment Measurement reflects Tier 2 volume attainment or
seven percent (7%) if the Annual Volume Commitment Measurement reflects Tier
3 volume attainment.
(vi) As set forth in subsection (iii) above, upon the Effective
Date of this Amendment, Reseller will receive a seven percent (7%) Volume and
Term Discount on the assumption that Reseller will purchase, as measured
through the Annual Volume Commitment Measurement, Tier 1 volumes for the
first year of the Service Term. For each subsequent year of the Service Term,
the applicable discount will be from the same Tier used for the previous
year. For example, if Reseller purchased Qualified Business Line volumes in
year 2 that, as measured through the Annual Volume Commitment Measurement,
equated to the Tier 2 discount for year 2, then Reseller would enter year 3
with the applicable Tier 2 discount for year 3. See Table 2 in Section
1(h)(i).
(vii) For any year of the Service Term when the actual purchased
Qualified Business Line volumes, as calculated by the Annual Volume
Commitment Determination, equate to a lesser Volume and Term Discount than
what was actually billed, Reseller shall refund, for the applicable year in
question, an amount equal to the difference between the "billed" discount and
the "earned" discount. In case of such excess discounting, Reseller shall,
within thirty (30) days of receipt of written demand therefor, pay to BA in
immediately available funds (in addition to any other amounts
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owed to BA under the Resale Agreements and/or applicable BA resale tariffs),
an amount equal to (A) the difference between the "billed" and "earned"
Volume and Term Discounts under this Amendment that applied during the year
in question, plus (B) interest on the difference in Volume and Term Discounts
dating back to the date received from BA calculated using the Applicable
Interest Rate, plus (C) any applicable taxes relating thereto. Such payment
will be based on the actual lines in service on the last day of each month
during the year in question.
(viii) For any year of the Service Term when the actual purchased
Qualified Business Line volumes, as calculated by the Annual Volume
Commitment Determination, equate to a greater Volume and Term Discount than
what was actually billed, Reseller may request a credit, for the applicable
year in question, in an amount equal to the difference between the "billed"
discount and the "earned" discount. In case of such under-discounting, BA
shall, within thirty (30) days of receipt of written demand therefor, credit
the applicable Reseller account(s), an amount equal to (A) the difference
between the "billed" and "earned" Volume and Term Discounts under this
Amendment that applied during the year in question, plus (B) interest on the
difference in Volume and Term Discounts dating back to the date received from
BA equal to the "Prime" interest rate as set forth in The Wall Street Journal
from time to time, plus (C) any applicable taxes relating thereto.
(ix) (A) Notwithstanding the provisions of subsection (h)(i)
above to the contrary, if, during any year of the Service Term, Reseller
fails to (x) have at least eighty percent (80%) of its Qualified Business
Lines presubscribed to BA's IntraLATA Toll service (the "IntraLATA Toll
Presubscription Commitment"), the IntraLATA Toll Discount for the next
succeeding year of the Service Term shall be reduced by two percent (2%)
(i.e., from three percent (3%) to one percent (1%)) or (y) purchase from BA
at least the applicable minimum aggregate total number of minutes of use of
BA's IntraLATA Toll service as set forth below in this subsection (ix) (the
"MOU Target"), the IntraLATA Toll Discount for the next succeeding year of the
Service Term shall be reduced by one percent (1%) (i.e., from three percent
(3%) to two percent (2%)); provided, however, that, for the avoidance of any
doubt, if Reseller fails to meet the applicable requirements under both
subsections (x) and (y) above, the amount of the IntraLATA Toll Discount
for the next succeeding year of the Service Term shall be reduced to zero
(0); provided further that, if Reseller fails to meet the applicable
requirements under either or both of subsections (x) and (y) above in respect
of the fifth year (or other year if, for whatever reason, the last year of
the Service Term is not the fifth year) of the Service Term, Reseller shall,
within thirty (30) days of receipt of written demand therefor, pay to BA in
immediately available funds, the amount of the IntraLATA Toll Discount to
which it was not entitled during the fifth year (or other year if, for
whatever reason, the last year of the Service Term is not the fifth year) of
the Service Term (i.e., the two percent (2%) discount referenced above if
Reseller did not meet the eighty percent (80%) IntraLATA Toll Presubscription
Commitment, and the one percent (1%) discount referenced above if Reseller
did not meet the MOU Target requirement).
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(B) Reseller may, upon sixty (60) days written notice,
terminate the IntraLATA Toll Service Presubscription Commitment and MOU
Target requirement applicable under this Amendment for any BA jurisdiction
(i.e., a particular State or the District of Columbia) without incurring a
penalty. Upon the effective date of such termination, BA shall cease the
application of the IntraLATA Toll Discount for such jurisdiction and
determine, on a pro rata basis, Reseller's attainment of minutes of use and
BA presubscription commitments during the number of months or portions
thereof in the year of the Service Term in which termination occurs. If
Reseller fails to meet the applicable requirements under either or both of
subsections (x) and (y) above, Reseller shall, within thirty (30) days of
receipt of written demand therefor, pay to BA in immediately available funds,
the amount of the IntraLATA Toll Discount to which it was not entitled during
the number of months or portions thereof in the year of the Service Term in
which termination occurs (i.e., the two percent (2%) discount referenced
above if Reseller did not meet the eighty percent (80%) IntraLATA Toll
Presubscription Commitment, and the one percent (1%) discount referenced
above if Reseller did not meet the MOU Target requirement).
(C) During the first year of the Service Term, the MOU
Target shall equal the product of (x) forty (40), multiplied by (y) forty
percent (40%) of the sum obtained by adding the number of Qualified Business
Lines purchased by Reseller from BA hereunder as of the last day of the first
and last months, respectively, of the first year of the Service Term (the
resulting number of lines not to exceed 50,000), multiplied by (z) twelve
(12) months. By way of example only, if Reseller purchased from BA hereunder
20,000 Qualified Business Lines as of the last day of the first month of the
first year of the Service Term and 50,000 Qualified Business Lines as of the
last day of the last month of the first year of the Service Term, the MOU
Target for the first year of the Service Term would be the product of the
following: forty (40), multiplied by .40, multiplied by 70,000 (which is the
sum of 20,000 and 50,000), multiplied by twelve (12) -- which equals
13,440,000 minutes of use of BA's IntraLATA Toll service.
(D) During subsequent years of the Service Term, the MOU
Target shall be determined by BA as set forth below; provided, however, that
for the purposes of such calculations, at no time shall the average number of
minutes of use per month of BA's IntraLATA Toll service purchased hereunder
by Reseller from BA per Qualified Business Line (the "Average Monthly MOU Per
Line") be less than forty (40) minutes).
(E) During the second year of the Service Term, the MOU
Target shall equal the product of (x) the greater of forty (40) or the
Average Monthly MOU Per Line during the first year of the Service Term
multiplied by .90, multiplied by (y) forty percent (40%) of the sum obtained
by adding the number of Qualified Business Lines purchased by Reseller from
BA hereunder as of the last day of the first and last months, respectively,
of the second year of the Service Term (the resulting number of lines not to
exceed 100,000), multiplied by (z) twelve (12) months. By way of example
only, if Reseller's Average Monthly MOU Per Line for the first year of the
Service Term was
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sixty (60) and Reseller purchased from BA hereunder 60,000 Qualified Business
Lines as of the last day of the first month of the second year of the Service
Term and 100,000 Qualified Business Lines as of the last day of the last
month of the second year of the Service Term, the MOU Target for the second
year of the Service Term would be the product of the following: 54 (which is
the product of 60 and .90), multiplied by .40, multiplied by 160,000 (which
is the sum of 60,000 and 100,000), multiplied by twelve (12) -- which equals
41,472,000 minutes of use of BA's IntraLATA Toll service.
(F) During the third year of the Service Term, the MOU
Target shall equal the product of (x) the greater of forty (40) or the
Average Monthly MOU Per Line during the second year of the Service Term
multiplied by .90, multiplied by (y) forty percent (40%) of the sum obtained
by adding the number of Qualified Business Lines purchased by Reseller from
BA hereunder as of the last day of the first and last months, respectively,
of the third year of the Service Term (the resulting number of lines not to
exceed 200,000), multiplied by (z) twelve (12) months. By way of example
only, if Reseller's Average Monthly MOU Per Line for the second year of the
Service Term was sixty (60) and Reseller purchased from BA hereunder 110,000
Qualified Business Lines as of the last day of the first month of the third
year of the Service Term and 200,000 Qualified Business Lines as of the last
day of the last month of the third year of the Service Term, the MOU Target
for the third year of the Service Term would be the product of the following:
54 (which is the product of 60 and .90), multiplied by .40, multiplied by
310,000 (which is the sum of 110,000 and 200,000), multiplied by twelve (12)
-- which equals 80,352,000 minutes of use of BA's IntraLATA Toll service.
(G) The respective MOU Targets for each of the fourth and
fifth years of the Service Term shall equal the product of (x) the greater of
forty (40) or the Average Monthly MOU Per Line during the immediately
preceding year of the Service Term multiplied by .90, multiplied by (y)
eighty percent (80%) of the Annual Volume Commitment Determination for the
immediately preceding year of the Service Term (the resulting number not to
exceed 200,000), multiplied by (z) twelve (12) months. By way of example
only, if Reseller's Average Monthly MOU Per Line for the fourth year of the
Service Term was sixty (60) and the Annual Volume Commitment Determination
for the fifth year of the Service Term was 200,000, the MOU Target for the
fifth year of the Service Term would be the product of the following: 54
(which is the product of 60 and .90), multiplied by .80, multiplied by
200,000, multiplied by twelve (12) -- which equals 103,680,000 minutes of
use of BA's IntraLATA Toll service
(x) Notwithstanding any provisions of this subsection (h) to the
contrary, the amount of the Volume and Term Discount, the Winback Discount
and the IntraLATA Toll Discount in any State shall be reduced, if and as
necessary, to the extent that, absent such reduction, the sum of the Volume
and Term Discount, the IntraLATA Toll Discount and the Existing Wholesale
Discount in effect from time to time in such State would exceed the sum of
the amount of the Existing Wholesale Discount in effect on the date hereof in
such State plus fifteen percent (15%).
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2. CONDITIONS TO APPLICATION OF ADDITIONAL DISCOUNTS. BA may,
at its sole discretion, withhold from Reseller some or all of the Volume and
Term Discount, Winback Discount and IntraLATA Toll Discount under one, some
or all of the Resale Agreements and/or applicable BA tariffs, at any time
and, from time to time, if Reseller does not place its first order for an
Eligible Service hereunder by November 30, 1999, or if Reseller materially
defaults in performing any of its material obligations under any Resale
Agreement, applicable BA tariff or other contractual arrangement between
Reseller (or any affiliate of Reseller) and BA (or any affiliate of BA), and
such default is not cured at the time BA prepares the applicable monthly
xxxx(s) for submittal to Reseller. Such a material default includes, without
limitation, failure by Reseller to fulfill any of the obligations set forth
in the subsections of this Section 2, the breach of which, for the avoidance
of doubt, however, shall not affect the respective Existing Wholesale
Discounts to which Reseller may be entitled under the Resale Agreements or
applicable BA resale tariffs prior to giving effect to this Amendment. In
such case, if BA exercises its discretion and withholds some or all of the
Volume and Term Discount, Winback Discount or IntraLATA Toll Discount, once
the default is cured BA may, at its sole option, release none, some or all of
the withheld portion of the Volume and Term Discount, Winback Discount or
IntraLATA Toll Discount. If BA opts not to release all of any such withheld
portions, Reseller shall have no right to any of the unreleased amounts.
(a) ELECTRONIC ORDERS. Notwithstanding any provisions of a
Resale Agreement or applicable BA resale tariff to the contrary, all orders
submitted by Reseller to BA pursuant to any of the Resale Agreements or
applicable BA resale tariffs, whether or not in respect of Eligible Services
set forth in Appendix 1 hereto, shall be submitted via an electronic
interface approved by BA for the provisioning of services under a resale
arrangement.
(b) ASSIGNMENTS AND MERGERS/ACQUISITIONS. Without the
prior written consent of BA (which may be withheld by BA in its sole
discretion), a Reseller Company shall not assign any of its respective rights
or obligations under any of the Resale Agreements or under this Amendment (or
under any other resale agreement or related agreement, in the case of another
entity that becomes a Reseller Company), and shall not accept an assignment
to it of any of the respective rights or obligations of another entity under
a resale agreement or related agreement with BA. If a Reseller Company merges
with another entity or acquires another entity (or if the parent company of
the Reseller Companies (currently Reseller Holdings) is acquired by another
entity), which other entity in any case, prior to such merger or acquisition,
was not a party to a resale volume and term discount arrangement with BA, the
applicable Reseller Company may elect to count Qualified Business Lines being
purchased by such other entity from BA as Qualified Business Lines hereunder
for purposes of the Annual Volume Commitment Determination (and such lines
shall be eligible for the discounts available under this Amendment in
accordance with the terms hereof); provided that upon BA's request, the
Reseller Company and/or such other entity (which shall then be deemed to be a
Reseller Company) shall first execute such documents as BA reasonably deems
14
necessary to give effect to the terms of this Amendment, particularly to
amend the terms and conditions of the applicable resale agreements of the
other entity in a manner substantially identical to the terms and conditions
of this Amendment; provided further that BA may, at its discretion, cease
counting Qualified Business Lines being purchased in respect of the acquired,
acquiring or merged with Reseller Company as Qualified Business Lines
hereunder for purposes of the Annual Volume Commitment Determination (and
such lines shall cease being eligible for the discounts available under this
Amendment and any such related documents) if any of the applicable Reseller
Companies (to include the other entity acquired, acquiring or to which
merged) fails, within one hundred eighty (180) days of the effective date of
such merger or acquisition, to exclusively utilize the same type of
electronic interface (e.g., Web-GUI, EDI, etc.), to include, without
limitation, the applicable version thereof, with BA on a State by State basis
(to include the District of Columbia), as the type of such electronic
interface (to include, without limitation, the applicable version thereof)
used by the other Reseller Companies for such jurisdiction; the foregoing
shall also apply in the case of Reseller Inc., Reseller LLC or Reseller
Holdings ceasing to utilize the same such type of electronic interface (to
include, without limitation, the applicable version thereof) with BA on a
State by State basis. If a Reseller Company merges with another entity or
acquires another entity (or if the parent company of the Reseller Companies
(currently Reseller Holdings) is acquired by another entity), which other
entity in any case, prior to such merger or acquisition, was a party to a
resale volume and term discount arrangement with BA, the Reseller Company
and/or such other entity, as applicable, shall be responsible for fulfilling
their respective obligations to BA under both this Amendment and such other
resale volume and term discount arrangement.
(c) ORDER QUALITY. At least ninety-five percent (95%) of
Reseller's orders submitted to BA during each month of the Service Term
(whether or not in respect of Eligible Services set forth in Appendix 1
hereto) shall not contain errors or omissions such that they are rejected by
BA or require queries from BA to Reseller. In addition, Reseller shall submit
such orders so that at least ninety percent (90%) of Flow Through Eligible
Orders actually flow through; a "Flow Through Eligible Order" does not
require manual intervention by BA. Upon the first billing cycle month of the
Service Term in which one or both of the above conditions is not met,
Reseller agrees, upon reasonable request by BA, to meet with BA promptly and
in good faith to determine the reasons that the foregoing percentage(s) was
not met and to develop a plan for improvement. If Reseller does not meet
either of such conditions for a second consecutive month, Reseller agrees,
upon reasonable request by BA, to meet with BA promptly and in good faith to
determine the reasons that the foregoing percentage(s) was not met and to
develop a plan for improvement. If Reseller does not meet either of such
conditions for a third consecutive month, Reseller shall be deemed to have
materially defaulted in performing under this subsection, and BA may, at its
sole option, not apply the Volume and Term Discount, Winback Discount and/or
IntraLATA Toll Discount to Eligible Services purchased by Reseller from BA
under the Resale Agreements and/or applicable BA resale tariffs until
Reseller first meets both such conditions in a subsequent month of the
Service Term.
15
(d) FORECASTS. Reseller shall provide to BA accurate and
timely forecasts in accordance with BA's forecasting requirements as in
effect from time to time (as currently set forth in Section 8.4 of Volume 1
of BA's Resale Handbook series), at least twice a year during the Service
Term, of the Eligible Services under each Resale; Agreement or applicable BA
resale tariff that Reseller anticipates purchasing from BA.
(e) COOPERATION WITH BA PROCESSES/JOINT EFFORTS TO INCREASE
EFFICIENCY. Each Party shall use commercially reasonable efforts to comply
with the other Party's reasonable requests aimed at increasing the efficiency
of the ordering and maintenance processes under the Resale Agreements and/or
applicable BA resale tariffs. Such requests may include, without limitation
that Reseller personnel attend training sessions from time to time regarding
ordering, that Reseller use certain reference materials designated by BA that
are designed to limit the number of calls made to BA's Help Desk, that
Reseller participate in Industry Change Control meetings held from time to
time by BA, that Reseller use pre-order functionalities established by BA to
validate addresses, to determine feature availability, to reserve telephone
numbers and the like, and that representatives of the Parties meet, from time
to time, to discuss means by which such efficiency can be improved,.
3. LIMITED AMENDMENTS. The amendments set forth in this
Amendment shall be limited precisely as written and shall not be deemed to
(a) be an amendment to or waiver of any other term or condition of the Resale
Agreements or of any other instrument, tariff, SGAT or agreement referred to
therein; or (b) prejudice any right or remedy that either Party may have in
the future under or in connection with the Resale Agreements or any
instrument, tariff, SGAT or agreement referred to therein. For the avoidance
of doubt, any and all amounts due to BA under the terms of this Amendment
shall be subject, in addition to the specific remedies set forth in this
Amendment, also (at BA's sole option) to the remedies and procedures set
forth in the Resale Agreements and/or applicable BA tariffs; provided,
however, that in the event Reseller shall fail to (a) purchase a quantity of
Qualified Business Lines at least equal to the applicable Annual Volume
Commitment, (b) have at least eighty percent (80%) of its Qualified Business
Lines, presubscribed to BA's IntraLATA Toll Service or (c) satisfy the
applicable MOU Target, Reseller's liability, and BA's sole claim and
recourse, with respect to any such failure, shall be limited to (w) not
providing to Reseller the applicable discounts under this Amendment, (x)
repayment of all of the discounts under this Amendment that Reseller received
during the period in question, together with interest on such discounts
dating back to the date received from BA calculated using the Applicable
Interest Rate, as well as any applicable taxes relating thereto and a
handling fee equal to five percent (5%) of the amount of the discounts under
this Amendment that Reseller received during the period in question and (z)
termination of this Amendment, to the extent applicable, in each case in
accordance with the terms of this Amendment..
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4. RATIFICATION OF RESALE AGREEMENTS: NO CHALLENGES. This
Amendment shall be construed in connection with and, as a part of, the Resale
Agreements, and all terms, conditions, representations, warranties,
covenants, and agreements set forth in the Resale Agreements, except as
herein amended or waived, are hereby ratified and confirmed and shall remain
in full force and effect. In addition, Reseller hereby expressly agrees not
to challenge the reasonableness, enforceability, validity, legality or the
like, of any term or condition in any of the Resale Agreements or in this
Amendment, either before a court or regulatory authority of competent
jurisdiction, or otherwise.
5. CLAIMS. (a) DEFINITION OF CLAIMS. For purposes of this Amendment,
"Claims" means any and all manner of liabilities, obligations, causes of
action, in law or equity, complaints, actions, demands, suits, debts, dues,
judgments, executions, costs, expenses and other claims of any and every
kind, arising under any theory of contract, tort, fraud, breach of duty,
strict liability, or any other theory of liability, based on any federal,
State, or local law, code, statute, rule or regulation or the common or civil
law of any jurisdiction, known or unknown, fixed or contingent, suspected or
unsuspected, or latent, concealed or hidden, that a Party asserted or could
have asserted against the other Party as of the Effective Date or before such
date; provided, however, that "Claims" shall not include any right, duty or
obligation that by the terms of Section 5(c)(ii) hereof remains in full force
and effect and is not limited or waived.
(b) DEFINITION OF PARTIES. For purposes of and, in connection
with, the release contained in this Amendment, references to a Party include
such Party and each of its shareholders, parents, subsidiaries, assigns,
predecessors and successors in interest, partners, agents and affiliates, and
the officers, directors, employees, controlling persons, shareholders,
servants, representatives, attorneys, administrators, partners, agents and
affiliates of each of them and all parties acting by, through, under or in
concert with each of them, past or present.
(c) RELEASE OF CLAIMS. (i) On the Effective Date, Reseller
hereby, releases, remixes, acquits and forever discharges BA from and against
any and all Claims of Reseller against BA.
(ii) Each Party agrees that with respect to those
agreements between them, as amended by the terms of this Amendment and any
other documents entered into in connection herewith, the lawful obligations
and duties of such agreements shall be in full force and effect as of the
Effective Date and henceforth.
(d) DELIVERY OF RELEASES IN FUTURE. Reseller agrees, for the
benefit of BA and at its own expense, that now and in the future it will
execute and deliver to BA any releases of judgment, liens, bonds or
encumbrances (whether statutory, common law or otherwise) in favor of
Reseller arising out of or with respect to the Claims of Reseller or the
subject matter thereof, and any releases of mortgage, termination statements
or other similar instruments that are necessary or advisable to release and
17
discharge of record all liens, security interests and other encumbrances in
favor of Reseller under or with respect to the Claims of Reseller and that it
will now and in the future pay all taxes (other than taxes imposed on or
measured by the income of BA), costs or expenses, if any, upon any documents
or transactions relating thereto.
(e) FULL AND FINAL RELEASE. This Amendment is a full and final
release applying not only to such of the Claims of Reseller as are presently
known, anticipated or disclosed to either of the Parties but also to all such
Claims of Reseller which are presently unknown, unanticipated and undisclosed
to either or both of the Parties and which may have arisen prior to the
Effective Date.
(f) REPRESENTATIONS. (i) Each Party represents, warrants and
agrees that in executing and entering into this Amendment, it is not relying
and has not relied upon any representation, promise or statement made by
anyone which is not recited, contained or embodied in this Amendment. Each
Party understands and expressly assumes the risk that any fact not recited,
contained or embodied herein or therein may turn out hereafter to be other
than, different from, or contrary to the facts now known to it or believed by
it to be true. Each Party further understands that the other Party may
possess material information regarding Claims that it has not shared or
revealed to the other Party. Nevertheless, Reseller intends by this
Amendment, and with the advice of its own independently selected counsel, to
release fully, finally and forever all Claims of Reseller and to agree that
this Amendment shall be effective in all respects notwithstanding any such
difference in facts, and shall not be subject to termination, modification or
rescission by reason of any such difference in facts.
(ii) Reseller represents and warrants that it has not
heretofore assigned or transferred or purported to assign or transfer to any
person or entity all or any part of or any interest in any Claim of Reseller.
Reseller agrees to indemnify and to hold harmless BA against any claim,
contention, demand, cause of action, obligation or liability of any nature,
character or description whatsoever, including the payment of attorneys' fees
and costs actually incurred, whether or not litigation is commenced, which
may be based upon or which may arise out of or in connection with any such
assignment or transfer or purported assignment or transfer of any Claim of
Reseller.
(g) NO LIABILITY. This Amendment is not intended to be and
shall not be deemed, construed or treated in any respect as an admission of
liability by any person or entity for any purpose.
(h) CONDITION PRECEDENT FOR BA ENTRY INTO AMENDMENT. The entry
by BA into this Amendment is premised, among other things, on BA not being
aware of having any Claims against Reseller or any affiliate of Reseller. As
such, to the extent that another reseller would wish to enter into an
arrangement with BA similar or identical to this Amendment, pursuant to
Section 252(i) of the TelAct or otherwise, BA would have no obligation to
enter into any such arrangement with such other reseller to
18
the extent that BA was aware of any Claims it might have against such other
reseller or any affiliate of such reseller.
6. FINAL AGREEMENT. This Amendment constitutes the full and
only agreement between the Parties with respect to its subject matter,
supersedes all previous agreements between them concerning such subject
matter and cannot be amended except by a writing duly signed by each of them.
7. AUTHORITY. Each of the Parties hereby covenants, warrants
and represents to the other Party that it has full power, right and authority
to execute, deliver, enter into and perform this Amendment.
8. CHOICE OF LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK FOR
ALL PURPOSES, INCLUDING BOTH CONSTRUCTION AND REMEDY, WITHOUT REGARD TO
CHOICE OF LAW RULES (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW (OR ANY SUCCESSOR PROVISION THERETO)).
9. JURISDICTION. The Parties hereby irrevocably submit to the
venue and to both subject matter and personal jurisdiction in the Courts of
the State of New York and of the United States of America for the Southern
District of New York.
10. COUNTERPARTS. This Amendment may be executed and delivered
in counterparts and may be delivered by facsimile transmission and shall be
binding upon each of the Parties and on their respective successors and
assigns.
11. HEADINGS. The headings contained in this Amendment are for
ease of reference only and shall be of no legal effect.
12. NO SEVERABILITY. If any of the provisions of this
Amendment are held to be invalid or unenforceable by a court or regulatory
authority of competent jurisdiction, BA may elect, at its sole option, to
terminate this Amendment or to enter into a mutually agreeable further
amendment to the Resale Agreements and/or agreement incorporating by
reference the terms of applicable BA resale tariffs (with respect only to
Reseller). In case of such termination, Reseller shall nonetheless remain
obligated to pay to BA all amounts, if any, due to BA pursuant to and, on
terms set forth in, this Amendment that have accrued as of the date of
termination.
13. TERMINATION RIGHT. BA is entering into this Amendment to
increase the volume of resale business it conducts with resellers, especially
in the short term. In addition, given that the procedures set forth herein
are new, the overall impact of such procedures on BA's business is uncertain.
Accordingly, BA is limiting the time period during which arrangements such as
those set forth in this Amendment shall be available. As such, if during the
period beginning on the date hereof and ending
19
November 30, 1999, Reseller shall not have placed its first order with BA for
an Eligible Service pursuant to the terms of this Amendment, BA may, at its
sole option, terminate this Amendment. In addition and, consistent with the
foregoing, to the extent that another reseller would wish to enter into an
arrangement with BA similar or identical to this Amendment, pursuant to
Section 252(i) of the TelAct or otherwise, BA would not be under any
obligation to enter into any such arrangement with such other reseller after
November 30, 1999.
14. MINIMUM VOLUME REPRESENTATION. Reseller represents and
warrants that, during the month immediately preceding the date hereof, it
purchased from BA, for resale, not less than 20,000 Qualified Business Lines.
15. RIGHT OF SETOFF. In addition to any other remedies
available to BA under the Resale Agreements, and/or applicable BA tariffs
and/or other contractual arrangements between BA and Reseller, if Reseller
does not pay to BA any amount due to BA under a Resale Agreement, and/or an
applicable BA tariff and/or other contractual arrangement between BA and
Reseller, BA may, at its sole option, set off such overdue amounts from the
amount of the Volume and Term Discount, Winback Discount, IntraLATA Toll
Discount and/or Existing Wholesale Discount.
16. BANKRUPTCY-RELATED PROVISIONS.
(a) PRE-PETITION WAIVER OF AUTOMATIC STAY. Reseller hereby
acknowledges and agrees that in the event it becomes the subject of a
bankruptcy, insolvency, liquidation or similar proceeding affecting the
rights of creditors under State or Federal law that it shall waive and shall
not assert or seek any automatic stay (including a stay imposed by operation
of 11 U.S.C. Sections 105, 362 or 366), injunction or similar bar on BA
exercising its rights or remedies available to it under any of the Resale
Agreements, this Amendment, applicable BA tariffs or applicable law,
including terminating any of the Resale Agreements and/or this Amendment,
terminating or curtailing service to Reseller or Reseller's customers,
transferring such customers to a new service provider, terminating any
license, possessory interest or lease arrangement or agreement with
Reseller, or repossessing any property owned by BA.
(b) ASSUMPTION OR REJECTION OF AGREEMENTS. In the event that a
case is commenced pursuant to 11 U.S.C. Section 101 ET SEQ. or similar Federal
or State insolvency law, by or against Reseller, Reseller agrees, within
thirty (30) days of such commencement, to elect either to assume or reject
the Resale Agreements (as amended hereby) and this Amendment and to file a
motion in its bankruptcy case and seek approval of such election within that
30-day time period.
(c) JURISDICTION TO MODIFY TERMS. Notwithstanding any other
provisions of this Amendment, any of the Resale Agreements or applicable BA
tariffs, this Amendment and the Resale Agreements are subject to change,
modification or cancellation as may be required by a regulatory authority or
court in the execution of its
20
lawful jurisdiction, other than a court exercising jurisdiction pursuant to
28 U.S.C. Section 1334.
(d) ACCELERATED BILLING. Reseller hereby acknowledges and
agrees that in the event it becomes the subject of a bankruptcy, insolvency,
liquidation or similar proceeding affecting the rights of creditors under
State or Federal law, BA may, at its option, xxxx Reseller for weekly service
charges under the Resale Agreements (as amended hereby) and/or applicable BA
tariffs, which amounts shall be due and payable within five (5) business days
of receipt by Reseller of the particular invoice.
(e) PREPAYMENT. Reseller hereby acknowledges and agrees that
in the event it becomes the subject of a bankruptcy, insolvency, liquidation
or similar proceeding affecting the rights of creditors under State or
Federal law, BA may, at its option, xxxx Reseller up to one (1) month in
advance of receipt by Reseller of BA services under the Resale Agreements (as
amended hereby) and/or applicable BA tariffs, and in such case Reseller shall
be required to prepay BA for such BA services, which amounts in respect
thereof shall be due and payable within five (5) business days of receipt by
Reseller of the particular invoice.
17. OTHER BA RESALE TERM AND VOLUME DISCOUNT PLANS. If BA
enters into, with a party other than Reseller, a resale term and volume
discount plan that contains terms and conditions that are materially
different than the terms and conditions set forth in this Amendment, upon
receipt of a written request from Reseller, BA agrees to promptly begin good
faith negotiations with Reseller in order to modify this Amendment or to
enter into a new contract with terms and conditions consistent with those in
the term and volume discount plan with the other party. In addition, upon
receipt of a written request from Reseller from time to time, BA shall inform
Reseller whether it has entered into any such other resale term and volume
discount plan and, if such plan is not subject to a non-disclosure
obligation, provide a copy of such plan to Reseller.
18. JOINT AND SEVERAL LIABILITY OF RESELLER COMPANIES. Each
Reseller Company (including all entities that become a Reseller Company)
shall be jointly and severally liable for any and all liabilities of any and
all Reseller Companies under this Amendment, the Resale Agreements, any other
resale agreements and related documents, applicable BA tariffs or otherwise;
provided, however, that for the avoidance of any doubt, the entry by Reseller
into this Amendment shall not be construed in any way as authorizing (or
requiring) Reseller to provide any telecommunications service.
19. LETTER OF CREDIT. Not later than the Effective Date of
this Amendment, Reseller shall obtain and provide to BA an unconditional,
irrevocable standby letter of credit naming BA as the beneficiary thereof and
otherwise in form and substance satisfactory to BA from a financial
institution acceptable to BA, in an amount equal to five hundred thousand
dollars ($500,000), in respect of charges (including, without limitation,
both recurring and non-recurring charges) for the services, facilities or
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arrangements provided or to be provided by BA to Reseller (whether under any
Resale Agreement (as amended hereby), BA tariff or otherwise); provided,
however, that not later than one (1) year after the Effective Date of this
Amendment. Reseller shall increase the amount of such letter of credit to one
million dollars ($1,000,000); provided further that, not later than two (2)
years after the Effective Date of this Amendment, Reseller shall increase
the amount of such letter of credit to two million dollars ($2,000,000). BA
may (but is not obligated to) draw on the letter of credit upon notice to
Reseller in respect of any amounts billed to Reseller that are not paid
within the applicable time period for payment thereof. The fact that Reseller
provides the foregoing letter of credit shall in no way relieve Reseller from
compliance with BA's regulations as to advance payments and payment for
service, nor constitute a waiver or modification of the applicable terms of
the Resale Agreements, BA's tariffs or otherwise pertaining to the
discontinuance of service for nonpayment of any sums due to BA for the
services, facilities or arrangements rendered.
IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly
executed as of the day and year first above written.
NEW YORK TELEPHONE COMPANY
By: _______________________________________
Name: Xxxxx Xxxxxxxx
Title: President, Telecom Industry Services
NEW ENGLAND TELEPHONE AND
TELEGRAPH COMPANY
By: _______________________________________
Name: Xxxxx Xxxxxxxx
Title: President, Telecom Industry Services
XXXX ATLANTIC - DISTRICT OF
COLUMBIA, INC.
By: _______________________________________
Name: Xxxxx Xxxxxxxx
Title: President, Telecom Industry Services
XXXX ATLANTIC - DELAWARE, INC.
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By: _______________________________________
Name: Xxxxx Xxxxxxxx
Title: President, Telecom Industry Services
XXXX ATLANTIC - MARYLAND, INC.
By: _______________________________________
Name: Xxxxx Xxxxxxxx
Title: President, Telecom Industry Services
XXXX ATLANTIC - NEW JERSEY, INC.
By: _______________________________________
Name: Xxxxx Xxxxxxxx
Title: President, Telecom Industry Services
XXXX ATLANTIC - PENNSYLVANIA, INC.
By: _______________________________________
Name: Xxxxx Xxxxxxxx
Title: President, Telecom Industry Services
XXXX ATLANTIC - VIRGINIA, INC.
By: _______________________________________
Name: Xxxxx Xxxxxxxx
Title: President, Telecom Industry Services
XXXX ATLANTIC - WEST VIRGINIA,
INC.
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By: _______________________________________
Name: Xxxxx Xxxxxxxx
Title: President, Telecom Industry Services
RESELLER
By: _______________________________________
Name:
Title:
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