June 17, 1997
Mr. X. Xxxxx Xxxxxx
WebSite Management Company
d/b/a FlashNet Communications
0000 Xxxxx Xxxxxx Xxxx Xxxxxxxxx
Xxxx Xxxxx, XX 00000
RE: MASTER MANAGED SERVICES AGREEMENT, DATED AS OF JULY 31, 1996; EQUIPMENT
AGREEMENT, DATED AS OF JULY 31, 1996; WARRANT LETTER AGREEMENT, DATED AS OF
JULY 31, 1996 AND RIGHT OF FIRST REFUSAL AGREEMENT, DATED AS OF JULY 31,
1996; ADDENDUM TO EQUIPMENT AGREEMENT, DATED AS OF NOVEMBER 26, 1996;
MASTER MANAGED SERVICE AGREEMENT, DATED AS OF DECEMBER 24, 1996; EQUIPMENT
AGREEMENT, DATED DECEMBER 24, 1996; AND SERVICE AGREEMENT, DATED DECEMBER
24, 1996; ALL BETWEEN ACSI ADVANCED TECHNOLOGIES, INC. (OR ADVANCED DATA
SERVICES, INC., AS TO THE AGREEMENTS DATED DECEMBER 24, 1996) ("ACSI") AND
WEBSITE MANAGEMENT COMPANY, INC. D/B/A FLASHNET COMMUNICATIONS
("FLASHNET").
Dear Xx. Xxxxxx:
This letter sets forth the agreement of ACSI Advanced Data Services, Inc.
(successor corporation to ACSI Advanced Technologies, Inc.) ("ACSI") and
FlashNet to amend or nullify the above referenced agreements as follows:
1. The Equipment Agreement, dated as of November 26, 1996, is hereby
terminated and is now null and void. The parties' respective purchase
and payment obligations with regard to the equipment identified
therein are hereby modified, as provided below, and incorporated into
the provisions of the Equipment Agreement between the parties dated as
of July 31, 1996. The parties hereby release one another from all
other rights and obligations under said agreement.
2. The Equipment Agreement dated as of December 24, 1996, is hereby
terminated and is now null and void. The parties' respective purchase
and payment obligations with regard to the equipment identified
therein are hereby modified, as provided below, and incorporated into
the provisions of the Equipment Agreement between the parties dated as
of July 31, 1996. The parties hereby release one another from all
other rights and obligations under said agreement.
3. The Service Agreement, dated as of December 24, 1996, is hereby
terminated and is now null and void. The parties' respective purchase
and payment obligations with regard to the equipment identified
therein are hereby modified, as provided below, and incorporated into
the provisions of the Equipment Agreement between the parties dated as
of July 31, 1996. The parties hereby release one another from all
other rights and obligations under said agreement.
4. The parties hereby agree that ACSI's obligations to purchase Shiva
Access Switches from the Shiva Corporation, as described in the
Services Agreement dated as of December 24, 1996, shall be limited to
the purchase of twenty-four (24) Switches already purchased from Xxxxx
and deployed by FlashNet. The purchase and payment obligations with
respect to said Xxxxx Access Switches shall be as identified in
Schedules D and E to the Equipment Agreement dated as of July 31,
1996, as modified herein.
5. The Equipment Agreement dated as of July 31, 1996, is modified as
follows:
a. In Section 2, replace all references to "$1.0 million" with
"$681,136.47 (six hundred eighty-one thousand, one hundred
thirty-six dollars and forty-seven cents)."
b. Add the following language as additional paragraphs in Section 2:
"The parties hereby acknowledge and agree that ACSI has met its
Equipment Purchase Obligation. ACSI shall have no further
obligation to purchase additional Equipment from FlashNet or from
third parties on FlashNet's behalf.
"In addition to the Equipment purchased from ACSI from FlashNet
as identified in Schedule A, ACSI has additionally purchased
Equipment identified in Schedules B, C & D."
"The payment terms for the Equipment identified in Schedules B, C
and D shall be as detailed in Schedule E hereto."
c. Add Schedules B, C, D and E attached hereto as new Schedules B,
C, D and E of such agreement.
6. The parties hereby agree that the current annual Service Fee specified
in the Master Managed Services Agreement, dated as of July 31, 1996,
is $162,401.28 and that there will be no further increases of such
Service Fee. The Service Fee is now payable in four quarterly
installments of $40,600.32 with only the August 1 and November 1
payments remaining to be paid in 1997, four quarterly payments in
1998, and two quarterly payments in 1999.
7. Exhibit A of the above described Master Managed Services Agreement,
dated as of July 31, 1996, is hereby replaced and superseded by the
Exhibit A attached to this letter agreement.
8. The Right of First Refusal letter agreement between the parties, dated
as of July 31, 1996, is hereby terminated and is now null and void.
9. The Warrant letter agreement between the parties, dated as of July 31,
1996, is hereby modified by capping the number of shares underlying
the Warrant referred to therein at 52,885 shares of FlashNet's common
stock. In recognition of ACSI's satisfaction of the "Equipment
Purchase Obligation," ACSI shall be considered fully vested in the
Warrant. Such Warrant letter agreement is further modified by
eliminating all references therein to antidilution provisions of the
Warrant, it being understood that the antidilution provisions of the
Warrant will be the same as antidilution provisions of options issued
to FlashNet's employees under FlashNet's 1997 Stock Incentive Plan.
10. The Master Managed Services Agreement, dated as of December 24, 1996,
is hereby terminated and is now null and void. With regard to the
telecommunications services identified therein, the parties hereby
agree to enter into separate agreements, mutually satisfactory to the
parties and customary in the industry, under which ACSI will sell to
FlashNet certain telecommunications services that ACSI sells as a
reseller, or under which ACSI is the customer of record for those
telecommunications services.
11. The parties agree that for each vendor from which FlashNet purchases
telecommunications services, they shall execute Two Party Transfer of
Service agreements in a form substantially similar to the form
attached hereto as Schedule F, and shall file same with the
appropriate communications carrier referenced therein, and thereby
establish ACSI as the customer of record with the communications
carrier.
12. The parties agree that notwithstanding the terms set forth in the
applicable Two Party Transfer of Service agreement, ACSI shall reserve
for FlashNet the exclusive right to make any changes, additions,
deletions, or to otherwise contact the local exchange carrier
regarding the services provided on the lines identified in the
applicable Two Party Transfer of Service agreement. ACSI agrees that
it will take any and all actions necessary to ensure that FlashNet has
the exclusive right to contact the communications carrier with any and
all matters regarding services on the telephone lines identified in
the applicable Two Party Transfer of Service agreement. ACSI further
agrees that it will not make any contact with the communications
carrier with regard to any changes, additions, deletions or any other
modifications relating to the services provided on the telephone lines
identified in the applicable Two Party Transfer of Service agreement
without FlashNet's prior written approval. ACSI agrees that if as
customer of record with the local exchange carrier ACSI receives from
the local exchange carrier any credits, refunds, or other forms of
monetary adjustments relating to the services on the telephone lines
identified in Schedule F, that ACSI shall pass such credits, refunds,
or other forms of monetary adjustments on to FlashNet. The parties
agree that the term of all such Two Party Transfer of Service
agreements shall remain in effect until December 31, 1997, and shall
thereafter continue on a month-to-month basis. At any time after
December 31, 1997, FlashNet may
terminate any or all of the Two Party Transfer of Service agreements
upon forty-eight hours written notice to ACSI. ACSI agrees that on
this same day and in consideration of FlashNet's unilateral
termination privilege, ACSI shall execute a second Two Party Transfer
of Service agreement, and deliver the same to FlashNet which FlashNet
may file with the communications carrier, thereby reestablishing
FlashNet as the customer of record with regard to the lines
identified in the applicable Two Party Transfer of Service agreement.
Please indicate FlashNet's agreement to the foregoing by signing this letter
below. The original signed letter should be returned by overnight mail to:
Xxxxxxxx Xxxxxxxx Xxxxx, American Communications Services, Inc., 000 Xxxxxxxx
Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx Xxxxxxxx, XX 00000.
Sincerely,
ACSI Advanced Data Services, Inc.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President ADS ACSI
Acknowledged and Agreed to:
Website Management Company, Inc.
d/b/a FlashNet Communications
By: /s/ X. Xxxxx Xxxxxx
-------------------------------------
Name: X. Xxxxx Xxxxxx
Title: President
SCHEDULE A
Equipment Purchased on 7/31/96
A copy of the list of equipment purchased on July 31, 1996 is retained
elsewhere.
SCHEDULE B
Equipment Purchased on 11/26/96
A copy of the list of equipment purchased on November 26, 1996 is retained
elsewhere.
SCHEDULE C
EQUIPMENT PURCHASED ON 12/24/96
Collateral Vendor Month of Serial
Quantity Description Purchase Number
1 Cisco 7507 Router Solid Systems Sep-96 S/N 76008988
1 Cisco 7513 DirectNet Nov-96 S/N 73000154
3 Sun E-4000 Stonebridge Sep-96 S/N 82117924
Servers Tech.
(w/peripheral Solid Systems Sep-96 S/N 8394433
items)
S/N 8491857
1 Sun Sparc 5 StorNet Sep-96 S/N 8297744
Servers
S/N 8132444
1 Sun Sparc 5 CREAM, Inc. Sep-96 S/N 9078702
Servers
1 Integrix Sparc CREAM, Inc. Nov-95 S/N 9078978
Server
1 Ultra Sparc Sever CREAM. Inc. Mar-96 S/N 7811968
1 Ultra Sparc Sever CREAM, Inc. May-96 S/N 7999372
SCHEDULE D
Shiva Access Purchase
DATE UNIT SERIAL NUMBER LOCATION
---------------------------------------------------------------------------------
1/20/97 5 LAS003013 Houston
LAS003252
LAS003485
LAS0027811
LAS002905
2/10/97 1 LAS002905 Fort Worth
7 LAS002717 New York
LAS002701
LAS003467
LAS002968
LAS002973
XXX000000
LAS002072
2/25/97 6 LAS002734 Fort Worth
LAS002703
LAS002722
XXX000000
XXX000000
LAS002921 Defective, Returned to SHIVA 3/3
2/27/97 Xxxxx sent replacement for 2921 LAS04071 Defective, not Returned to XXXXX
2/28/97 Xxxxx sent replacement for 4071 LAS01538
2/27/97 3 LAS003085 Austin
LAS003125
LAS0027816 Defective, not Returned to SHIVA
3/3/97 1 LAS002709 Austin
SCHEDULE E
PAYMENT SCHEDULE
FOR
EQUIPMENT PURCHASED UNDER SCHEDULES A, B, C & D
ACSI shall invoice FlashNet on a monthly basis and FlashNet shall make payments
to ACSI within thirty days of ACSI's invoice for the Equipment based on the
following schedule.
FOR EQUIPMENT IDENTIFIED IN SCHEDULE A
QUARTERLY PAYMENT AMOUNT FINAL PAYMENT DATE
------------------------ ------------------
$40,600.32 July 1999
FOR EQUIPMENT IDENTIFIED IN SCHEDULE B
MONTHLY PAYMENT AMOUNT FINAL PAYMENT DATE*
---------------------- ------------------
$11,193.53 November 1999
FOR EQUIPMENT IDENTIFIED IN SCHEDULE C
MONTHLY PAYMENT AMOUNT FINAL PAYMENT DATE*
---------------------- ------------------
$16,227.09 December 1999
FOR EQUIPMENT IDENTIFIED IN SCHEDULE D
MONTHLY PAYMENT AMOUNT FINAL PAYMENT DATE*
---------------------- ------------------
$26,531.43 June 1999
* Assumes all intermediate monthly/quarterly payments are made.
SCHEDULE F
TWO PARTY TRANSFER OF SERVICE AGREEMENT
CURRENT CUSTOMER
Since Southwestern Bell Telephone Company retains all ownership and property
rights in all telephone numbers it assigns to customers, it is understood that
this transfer is subject to all rules and regulations and tariffs of
Southwestern Bell Telephone Company.
Subject to these limitations, I hereby transfer my use of and responsibility for
telephone number _____________________ to American Communications Services, Inc.
Thereby relinquishing all claims, responsibility and use I may have in this
number. I understood that I forfeit credit for all items which carry a one time
charge and will not be entitled to credit on future orders.
---------------------------------- --------------------------------------------
Date (Current Customer Signature)
--------------------------------------------
(Current Customer Name - Please Print)
--------------------------------------------
Title (If signed on behalf of corporation or
partnership)
THE STATE OF TEXAS
COUNTY OF_____________
Before me _____________________ a notary public, on this day personally appeared
_______________________ known to me or braved to me on the oath of ____________
to be the person whose name is subscribed to the foregoing instrument and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed.
Given under my hand and seal of office-day of ___________ 19___.
--------------------------------------------
Notary Public Signature
--------------------------------------------
Notary Public Printed or Typed Name
My Commission Expires:
--------------------------------
