EXHIBIT 10.7
AGREEMENT
This Agreement (the "Agreement") is made and entered into this 3rd day of
March, 1999, (the "Effective Date") between RHYTHMS NETCONNECTIONS, INC., a
Delaware corporation, and MCI WORLDCOM, INC., a Georgia corporation.
R E C I T A L S
MCI WORLDCOM, Inc. through its operating Affiliates and Alliance Entities
(MCI WORLDCOM, Inc. and said operating Affiliates and Alliance Entities referred
to collectively herein as "MCI WORLDCOM") provides integrated local, long
distance, and Internet voice and data communications services, including
metropolitan area, long distance and Internet network transport services (the
"Network Services").
Rhythms NetConnections, Inc., through its operating subsidiaries (Rhythms
NetConnections, Inc. and said operating subsidiaries referred to collectively
herein as "Rhythms") is a networking solutions company that provides high-speed
communications services to providers of telecommunications services and other
users. Its services include digital transmission technology deployed over
standard local copper telephone lines to enable high speed connections between
end-users and a network service provider (the "DSL Services") and other
technologies and services utilizing the unbundled network elements of the ILEC
(the "UNE Services") (DSL Services and UNE Services shall be collectively
referred to as the "Rhythms Services").
MCI WORLDCOM intends through this Agreement to, among other things,
(i) encourage Rhythms' rapid development and deployment of the DSL
Services so that such services will be available to MCI WORLDCOM
for use and marketing;
(ii) secure Rhythms as a customer for the Network Services; and
(iii) secure Rhythms for cooperation in the development of the
commercialization of voice (and other) services exploiting the DSL
Services.
Rhythms intends through this Agreement to, among other things
(i) obtain a strategic contractual relationship with MCI WORLDCOM
encouraging MCI WORLDCOM to utilize the DSL Services to permit
Rhythms to accelerate the development and deployment of the DSL
Services; and
(ii) secure MCI WORLDCOM for cooperation in the development of the
commercialization of voice (and other) services exploiting the DSL
Services.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained herein and of Ten Dollars cash in hand paid and other
valuable
MCI WORLDCOM CONFIDENTIAL
consideration, the receipt and sufficiency of all of which are hereby
acknowledged, MCI WORLDCOM and Rhythms agree as follows:
I. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
definitions set forth below unless otherwise indicated in this Agreement:
1.1 "Affiliate" of a Party or other entity shall mean a corporation,
partnership, joint venture or other entity directly or indirectly,
through one or more intermediaries, controlling, controlled by or under
common control with such party or other entity.
1.2 "Agreement" shall mean this Agreement and all schedules and exhibits
attached hereto.
1.3 "Alliance Entity" shall those entities listed on SCHEDULE 1.3, which may
be amended from time to time by mutual agreement.
1.4 "Confidential Information" shall mean confidential or proprietary
information (including without limitation this Agreement, technical and
business plans, specifications, drawings, computer programs, Developed
IP, network configurations, facilities deployment information,
procedures, orders for services, usage information, and customer account
data) that one party or its affiliates (Owner) may disclose to the other
party or its affiliates (Recipient) in connection with the performance of
this Agreement and is disclosed by an Owner to a Recipient in document or
other tangible form (including on magnetic tape) or by oral, visual or
other means, and which should reasonably have been understood by such
Recipient to be proprietary and confidential to such Owner, because of
legends or other markings, the circumstances of the disclosure or the
nature of the information itself.
1.5 "CMSA" shall mean Consolidated Metropolitan Statistical Area as such term
is defined in "OMB Bulletin 98-06: Revised Statistical Definitions of
Metropolitan Areas (MAs) and Guidance on Uses of MA Definitions" which is
available from the National Technical Information Service (Accession
Number PB98-146160).
1.6 "CPE" shall have the meaning given in Section 5.1.
1.7 "CSA" shall have the meaning given in Section 2.1.
1.8 "Developed IP" shall have the meaning given in Section 5.3(a).
1.9 "DSL Egress Circuit" shall mean any connection from the Rhythms Metro
Service Center to MCI WORLDCOM's point of presence in a particular CMSA
or MSA.
1.10 "DSL Ingress Circuit" shall mean any single connection from an MCI
WORLDCOM customer using DSL Services to the Rhythms Connection Point to
the Rhythms Metro Service Center for a particular CMSA or MSA.
MCI WORLDCOM CONFIDENTIAL 2
1.11 "DSL Services" shall have the meaning given in the Recitals and shall
include DSL Ingress Circuits and DSL Egress Circuits, as applicable.
1.12 "ILEC" shall mean an incumbent local exchange carrier, as such term is
defined in the Communications Act of 1934, as amended by the
Telecommunications Act of 1996.
1.13 "Rhythms Connection Point" shall mean Rhythms' physical collocation
within an ILEC serving wire center, or adjacent to an ILEC wire center,
or adjacent to the ILEC Digital Loop Carrier, which enables Rhythms to
order and provision unbundled network loops from the ILEC in support of
DSL Services.
1.14 "Line Commitment Period" shall have the meaning given in Section 2.4(a).
1.15 "MCI WORLDCOM shall have the meaning given in the Recitals.
1.16 "MSA" shall mean Metropolitan Statistical Area as such term is defined in
"OMB Bulletin 98-06: Revised Statistical Definitions of Metropolitan
Areas (MAs) and Guidance on Uses of MA Definitions" which is available
from the National Technical Information Service (Accession Number
PB98-146160).
1.17 "Network Services" shall have the meaning given in the Recitals.
1.18 "NSA" shall have the meaning given in Section 3.1.
1.19 "OSS" shall have the meaning given in Section 4.1.
1.20 "Purchase Commitment" shall have the meaning given in Section 2.4(a).
1.21 "Rhythms" shall have the meaning given in the Recitals.
1.22 "Rhythms Metro Service Center" shall mean the facility located in each
CMSA or MSA, as applicable, that concentrates all of the DSL traffic that
is aggregated by each Rhythms Connection Point in that particular CMSA or
MSA. MCI WORLDCOM connects to the Rhythms Metro Service Center via a DSL
Egress Circuit.
1.23 "Rhythms Services" shall have the meaning given in the Recitals.
1.24 "UNE Services" shall have the meaning given in the Recitals.
1.25 "UUNET" shall have the meaning given in Section 2.2.
II. AGREEMENT FOR DSL SERVICES
2.1 CARRIER SERVICES AGREEMENT. Simultaneously with the execution of this
Agreement, Rhythms and MCI WORLDCOM shall enter into the Carrier Services
Agreement (the "CSA") in substantially the form attached hereto as
SCHEDULE 2.1 pursuant to which
MCI WORLDCOM CONFIDENTIAL 3
Rhythms will provide and MCI WORLDCOM will purchase Rhythms Services.
The CSA shall provide the geographical markets to be covered and the
schedule of availability of DSL Services in each market. In the event
that agreement has not been reached as to any material terms and the CSA
is not executed simultaneously with this Agreement, the parties shall
negotiate in good faith in an effort to reach agreement and to execute
the CSA (***) of the Effective Date of this Agreement unless
extended by mutual agreement. The parties (***) this
Agreement. Moreover, the binding effect of the CSA shall be contingent
upon the execution of the NSA and the OSS Licensing Agreement.
2.2 PREFERRED PROVIDER STATUS. Subject to the conditions and limitations
contained in Sections 2.3 and 2.4 hereof and pursuant to the CSA, Rhythms
shall have the right to provide, (***) DSL
Services (***) DSL Services under the terms
of the CSA (***) . In the event
that MCI WORLDCOM (***) (***) , MCI WORLDCOM
shall (***) (***) provided,
however, if MCI WORLDCOM (***) .
2.3. (***) FOR DSL SERVICES. The price of DSL Services to be paid pursuant
to the CSA shall be as set forth in the CSA; (***)
(***) under the CSA, MCI WORLDCOM shall (***)
(***) . Rhythms shall (***)
(***) . If (***)
(***) provide such DSL Services
(***) , or if Rhythms (***)
(***) , then Rhythms shall (***)
(***) provide such services
(***) . In the event that MCI WORLDCOM (***)
(***) , when such
(***) in such (***)
Within (***)
(***) , Rhythms shall (***)
(***) , in its sole discretion, may
elect to (***) . MCI WORLDCOM shall (***)
(***) . MCI WORLDCOM will
(***) .
2.4. PURCHASE COMMITMENT.
(a) COMMITMENT; (***) . Under the terms of the CSA, and subject to
the terms, conditions and limitations of this Section 2.4, MCI
WORLDCOM shall purchase,
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MCI WORLDCOM CONFIDENTIAL 4
and Rhythms shall provide, a minimum of 100,000 DSL Ingress
Circuits (the "Purchase Commitment") for providing DSL Services
during the sixty (60) month line commitment period (the "Line
Commitment Period"). The Line Commitment Period shall begin on
the first day of the month after the first month during which
(i) Rhythms has 1,250 Rhythms Connection Points in commercial
service in a minimum of twenty-nine (29) CMSAs and/or MSAs and
(ii) the (***) , and shall end the last
day of the 60th month thereafter, or the date on which the
100,000th DSL Ingress Circuit is ordered by MCI WORLDCOM,
whichever date is earlier. To establish the date on which the
Line Commitment Period commences, MCI WORLDCOM and Rhythms shall
complete and sign the Commencement Date Certificate attached
hereto as SCHEDULE 2.4. In connection with the Commencement
Date Certificate, Rhythms shall provide to MCI WORLDCOM such
documentation as may be reasonably necessary to prove (i) that
1,250 Rhythms Connection Points are in commercial service in a
minimum of twenty-nine (29) CMSAs and/or MSAs and (ii) the
(***) . MCI WORLDCOM agrees that it will
satisfy the Purchase Commitment in accordance with the milestone
dates of the Line Commitment Period provided in SCHEDULE 2.4(a)
hereto (***) (***)
. Rhythms agrees that (***) the
Purchase Commitment by the milestone dates specified in SCHEDULE
2.4(a) and that Rhythms will (***)
(***) . Nothing contained hereon or
in the CSA shall (***)
(***) .
(b) (***) PURCHASE COMMITMENT. (***)
MCI WORLDCOM has satisfied the Purchase Commitment, MCI WORLDCOM
shall (***)
(i) (***) MCI WORLDCOM (***)
(***) the Line Commitment Period;
(ii) (***) MCI WORLDCOM (***)
(***) the Line Commitment Period;
(iii) (***) MCI WORLDCOM (***)
(***) the Line Commitment Period
or other relevant times set forth in SCHEDULE 2.4;
(iv) (***) the Rhythms' direct sales
force (***)
(***)
(***) ; and
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MCI WORLDCOM CONFIDENTIAL 5
(v) (***) MCI WORLDCOM pursuant to the
CSA which (***) with the
terms and conditions of the CSA.
2.5 (***) . In addition to all other requirements as to quality of
service and capacity availability contained herein or in the CSA,
(***) (***) in
accordance with the CSA by (***)
(***) in which DSL Service (***)
(***) in accordance with the CSA (***) .
III. AGREEMENT FOR NETWORK SERVICES
3.1 NETWORK SERVICES AGREEMENT. Simultaneously with the execution of this
Agreement, Rhythms and MCI WORLDCOM shall enter into the Network Services
Agreement (the "NSA") in substantially the form attached hereto as
SCHEDULE 3.1 pursuant to which MCI WORLDCOM will provide and Rhythms will
purchase Network Services. The NSA shall provide the geographical
markets to be covered and the schedule of availability of Network
Services in each market. In the event that agreement has not been reached
as to any material terms and the NSA is not executed simultaneously with
this Agreement, the parties shall negotiate in good faith in an effort to
reach agreement and to execute the NSA (***) of the
Effective Date of this Agreement unless extended by mutual agreement.
The parties (***)
(***)
of this Agreement. Moreover, the binding effect of the NSA shall be
contingent upon the execution of the CSA and the OSS Licensing Agreement.
3.2 PREFERRED PROVIDER STATUS. Subject to the conditions and limitations
contained in Section 3.3, MCI WORLDCOM shall have the right to provide,
pursuant to the NSA, all of the Network Services utilized by Rhythms at
those locations where MCI WORLDCOM provides Network Services. (***)
(***) .
3.3. (***) FOR NETWORK SERVICES. The price of Network Services to be
paid pursuant to the NSA shall be as set forth in the NSA; (***)
(***) provided in
the NSA, Rhythms shall (***)
(***) . MCI
WORLDCOM shall (***)
(***) . If MCI WORLDCOM (***)
(***) , or if MCI WORLDCOM (***)
(***) , then MCI WORLDCOM shall (***)
of which MCI WORLDCOM (***) . In the event that (***)
in (***) .
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3.4. NETWORK PLANNING. MCI WORLDCOM shall designate Rhythms as a (***)
(***) as is more particularly described in the
NSA hereto. (***)
with internal MCI WORLDCOM organizations to
facilitate deployment of Rhythms' networks for the provisioning of DSL
Services.
IV. INTEGRATION OF OPERATIONAL SUPPORT SYSTEMS
4.1 WORKING GROUP; INTEGRATION PLAN. Promptly following execution of this
Agreement, MCI WORLDCOM and Rhythms will form an OSS-integration working
group to develop and implement systems and procedures necessary to deploy
on a national basis MCI WORLDCOM DSL service utilizing the DSL Services
provided by Rhythms. At a minimum the working group will (***)
(***) . The working group will use
reasonable efforts to (***)
after the Effective Date of this Agreement which shall include, among
other things, objectives, responsibilities and timelines.
4.2. OSS LICENSING AGREEMENT. Subject to the terms set forth in SCHEDULE 4.2,
Rhythms will license to MCI WORLDCOM, on an non-exclusive basis, software
programs, electronic interfaces and processes for, among other things,
order entry, provisioning, customer management, maintenance and repair of
DSL Services. Such licenses, (***) , shall be in
substantially the form attached hereto as SCHEDULE 4.2. In the event that
agreement has not been reached as to any material terms and the OSS
Licensing Agreement is not executed simultaneously with this Agreement,
the parties shall negotiate in good faith in an effort to reach agreement
and to execute the OSS Licensing Agreement (***) of
the Effective Date of this Agreement unless extended by mutual agreement.
The parties (***) (***)
this Agreement. Moreover, the binding effect of the OSS Licensing
Agreement shall be contingent upon the execution of the CSA and the NSA.
V. DEVELOPMENT AGREEMENT
5.1. NETWORK. Rhythms and MCI WORLDCOM shall use reasonable efforts to
assure network compatibility, including collaboration in the selection of
network technologies for Rhythms' and MCI WORLDCOM's network, including,
but not limited to,
(***)
necessary to support the respective DSL network deployments during the
term of this Agreement. This will include, to the extent reasonably
possible, selection of the same or compatible equipment platforms and
technologies. Throughout the term of this Agreement, Rhythms and MCI
WORLDCOM will cooperate to test and deploy capabilities where use of such
capabilities is necessary or desirable to support MCI
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MCI WORLDCOM CONFIDENTIAL 7
WORLDCOM's customers and it is technically and economically reasonable for
both parties to do so.
5.2 VOICE OVER DSL. MCI WORLDCOM and Rhythms agree to cooperate
reasonably to jointly develop access services for voice applications
utilizing DSL technology. (***)
(***)
(a) (***)
(***)
(b) (***) , jointly study and complete the definition and
specification of any services the parties agree jointly to develop
during the term of this Agreement, including required interfaces,
business plans and budgets for a pilot program involving selected
customer sites.
5.3 USE OF DEVELOPED TECHNOLOGIES.
(a) (***) obtain patent or other appropriate
protections with respect to intellectual property rights in any
technologies and processes jointly developed under the terms of this
Agreement (the "Developed IP") (***)
to do so. At the time that the parties agree that a Developed IP is
entitled to proprietary protection, (***)
obtain patent or other appropriate protections with respect to such
Developed IP. (***) obtain
such protections, or (***)
(***) obtain such
protection and (***) obtain patent or other
appropriate protections with respect to such Developed IP.
(b) The Developed IP will be for the exclusive use and benefit of MCI
WORLDCOM (including any customers to whom MCI WORLDCOM provides
services) and Rhythms (***) from
the date such processes or technologies become commercially
available throughout the Rhythms network; provided, however,
(***) the Developed IP (***)
(***)
and further provided that (***)
the Developed IP (***)
(***) MCI WORLDCOM.
(c) Subject to subsection (b) above, the Developed IP will be jointly
owned by the parties and each of the parties may utilize the
Developed IP (***)
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Confidential Treatment and filed separately with the Commission.
MCI WORLDCOM CONFIDENTIAL 8
. During the term of the exclusive use, each party may
utilize the Developed IP for permitted purposes (***)
.
VI. OTHER INTELLECTUAL PROPERTY RIGHTS
6.1 (***) license, (***)
owned or developed patents, processes, technology or other
intellectual property (***) . The terms of
this license shall permit (***)
(***) to the extent necessary to
(***) .
6.2 Except as is otherwise provided herein, each party will continue to
independently own, and the other party shall not have or acquire any
rights in, its intellectual property, including patents, trademarks, trade
secrets, proprietary processes and other forms of intellectual property
used in or necessary to providing the DSL Services or the Network Services
which are the subject of this Agreement. Any intellectual property solely
developed by a party, including pre-existing and improvements to pre-
existing intellectual property, will continue to be held by the party
already holding such intellectual property.
VII. STOCK PURCHASE AGREEMENT
7.1 PURCHASE OF PREFERRED STOCK. Simultaneously with the execution of this
Agreement, MCI WORLDCOM Investment Company, Inc. and Rhythms shall enter
into the Stock Purchase Agreement in substantially the form attached
hereto as SCHEDULE 7.1.
VIII. TERM AND TERMINATION
8.1 TERM. The term of this Agreement shall begin on the Effective Date and
shall expire on (***) , unless terminated earlier pursuant to
the provisions hereof or extended by agreement of the parties; provided,
however, Section 2.4 of this Agreement shall not terminate until the end
of the Line Commitment Period, unless terminated earlier pursuant to the
provisions hereof or extended by the written agreement of the parties.
Upon termination of the Agreement, the parties shall (***)
unless otherwise mutually agreed to by the parties. However,
it is the intention of the parties that, notwithstanding any termination
of the Agreement, the terms and conditions of the Agreement shall continue
to govern with respect to any then-existing services for so long as such
services (including any permitted renewals thereof) remain in effect.
8.2 TERMINATION.
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Confidential Treatment and filed separately with the Commission.
MCI WORLDCOM CONFIDENTIAL 9
(a) FOR CAUSE. In the event that either party commits a material breach
of this Agreement, which breach is not cured (***)
following written notice of breach, or in the event of a material
breach which is not capable of being cured (***) , or in
the event of numerous breaches which collectively constitute a
material breach of this Agreement or the repeated failure to meet
obligations identified in this Agreement, then the non-breaching
party may, by giving written notice to the other party, terminate
this Agreement, in whole or in part, as of a date specified in the
notice of termination. If either party chooses to terminate this
Agreement in part, the charges payable under this Agreement will be
equitably adjusted to reflect those portions that are terminated.
(b) CHANGE IN CONTROL. In the event of a change in control of either
party, whether such control is acquired, directly or indirectly, in
a single transaction or series of related transactions, or all or
substantially all of the assets of such party are acquired by any
entity, or such party is merged with or into another entity to form
a new entity, then, at any time (***) after the last to
occur of such events, the other party may terminate this Agreement
by giving at least (***) prior written notice and designating
a date upon which such termination shall be effective. For purposes
of this Agreement, "control" and its derivatives mean with regard to
this paragraph the legal, beneficial or equitable ownership,
directly or indirectly, of fifty percent (50%) or more of the
capital stock (or other ownership interests, if not a corporation)
of a party ordinarily having voting rights.
(c) INSOLVENCY. In the event that either party
(i) files for bankruptcy,
(ii) becomes or is declared insolvent, or is the subject to any
proceedings related to its liquidation, insolvency or the
appointment of a receiver or similar officer of it,
(iii) makes an assignment for the benefit of all or substantially
all of its creditors;
(iv) enters into an agreement for the composition, extension or
readjustment of substantially all of its obligations; or
(v) has the repayment of any indebtedness in principle amount in
excess of (***) in the aggregate accelerated by its
creditors,
then the other party may, by giving written notice of termination
to the other, terminate this Agreement as of a date specified in
such notice of termination.
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MCI WORLDCOM CONFIDENTIAL 10
(d) TERMINATION FOR FAILURE TO EXECUTE THE CSA, NSA AND OSS LICENSING
AGREEMENT. If, (***) after the Effective Date of this
Agreement, or such later time as the parties may mutually agree, the
parties have failed to execute either the CSA, the NSA, or the OSS
Licensing Agreement, then either party may, by written notice to the
other party, terminate (***)
of this Agreement, at its option (***)
, and neither the CSA, the NSA or the OSS Licensing Agreement
shall be binding on either party until all three such agreements
have been executed by the parties.
(e) EFFECT OF TERMINATION. Except as provided in Sections 2.1, 3.1 and
4.2 of this Agreement, each of the contracts and agreements provided
herein shall be independent of the others. Breach of any such
separate agreement shall not be treated as a breach of this
Agreement or any other agreement mentioned hereunder.
Notwithstanding the previous sentence or anything contained in this
Agreement (***)
(***)
of this Agreement. The remedies for breach of any
the separate agreements referenced herein shall be as set forth in
such separate agreements.
IX. CONFIDENTIALITY; ADVERTISING AND PUBLICITY
9.1 By virtue of this Agreement, Rhythms and MCI WORLDCOM may have access to
or exchange Confidential Information. A Recipient (as defined in Section
1.2) of such Confidential Information shall not disclose any Confidential
Information to any person or entity except (i) Affiliates (defined below)
who agree, in advance, in writing, to be bound by this Article IX, and
(ii) Recipient's employees, contractors and consultants, and Affiliates'
employees, contractors and consultants, who have a need to know and who
are bound in writing to protect the received Confidential Information
from unauthorized use or disclosure. Confidential Information shall not
otherwise be disclosed to any third party without the prior written
consent of Owner (as defined in Section 1.2). Recipient shall use
Confidential Information only for the purpose of this Agreement and shall
protect such Confidential Information from disclosure to others, using
the same degree of care used to protect its own confidential or
proprietary information of like importance, but in any case using no less
than a reasonable degree of care. For the purposes of this Article IX,
the term "Affiliate" shall mean shall mean any entity controlling,
controlled by or under common control (either directly or indirectly)
with MCI WORLDCOM or Rhythms, as applicable
9.2 Each party shall cause its Affiliates to comply with the terms of this
Article IX. A failure of any Affiliate of a party to comply with the
terms of this Article IX shall be deemed a breach of this Agreement by
such party. To the extent any Confidential Information is the information
of an Affiliate, such Affiliate shall be entitled to enforce the
confidentiality
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MCI WORLDCOM CONFIDENTIAL 11
obligations of the other party and its Affiliates as a third party
beneficiary of this Agreement.
9.3 The restrictions of this Article IX shall not apply to information that:
(i) was publicly known at the time of Owner's communication thereof to
Recipient; (ii) becomes publicly known through no fault of Recipient
subsequent to the time of Owner's communication thereof to Recipient;
(iii) was in Recipient's possession free of any obligation of confidence
at the time of Owner's communication thereof to Recipient; (iv) is
developed by Recipient independently of and without reference to any of
Owner's Confidential Information or other information that Owner
disclosed in confidence to any third party; (v) is rightfully obtained by
Recipient from third parties authorized to make such disclosure without
restriction; or (vi) is identified by Owner as no longer proprietary or
confidential.
9.4 In the event Recipient is required by law, regulation or court order to
disclose any of Owner's Confidential Information, Recipient will promptly
notify Owner in writing prior to making any such disclosure in order to
facilitate Owner seeking a protective order or other appropriate remedy
from the proper authority. Recipient agrees to cooperate with Owner in
seeking such order or other remedy. Recipient further agrees that if
Owner is not successful in precluding the requesting legal body from
requiring the disclosure of the Confidential Information, Recipient will
furnish only that portion of the Confidential Information which is
legally required and will exercise all reasonable efforts to obtain
reliable assurances that confidential treatment will be accorded the
Confidential Information.
9.5 All Confidential Information disclosed in connection with this Agreement
shall be and remain the property of Owner. All such information in
tangible form shall be returned to Owner promptly upon written request
and shall not thereafter be retained in any form by Recipient.
9.6 The parties acknowledge that Confidential Information is unique and
valuable, and that disclosure in breach of this Article IX will result in
irreparable injury to Owner for which monetary damages alone would not be
an adequate remedy. Therefore, the parties agree that in the event of a
breach or threatened breach of confidentiality, Owner shall be entitled
to specific performance and injunctive or other equitable relief as a
remedy for any such breach or anticipated breach without the necessity of
posting a bond. Any such relief shall be in addition to and not in lieu
of any appropriate relief in the way of monetary damages.
9.7 Neither party shall publish or use any advertising, sales, promotions, or
other publicity materials that use the other party's name, logo,
trademarks or service marks without the prior written approval of the
other party. Each party agrees not to issue any publicity materials,
press releases or other public statements that refer to, or describe any
aspect of, this Agreement, without the prior written approval of the other
party. Nothing in this Agreement establishes a license for either party
to use any of the other party's brands, marks or logos without the prior
written approval of the other party.
MCI WORLDCOM CONFIDENTIAL 12
9.8 The provisions of this Article IX shall survive the termination or
expiration of this Agreement.
X. MISCELLANEOUS
10.1 BINDING NATURE AND ASSIGNMENT. Neither party shall have the power to
assign this Agreement, or any of its duties or obligations under this
Agreement, to any other party (whether by operation of law or otherwise),
without the prior written consent of the other party except that either
party may assign all duties, obligations and rights among its Affiliates
without approval. Any purported assignment in violation of this section
shall be null and void and shall constitute a material breach of this
Agreement. No permitted assignment shall become effective until the
assignee has agreed in writing to be bound by this Agreement and to
assume the assignor's duties and obligations under this Agreement. No
such assignment shall relieve the contracting party from its obligations
hereunder.
10.2. ENTIRE AGREEMENT; AMENDMENT. This Agreement, including any Schedules
referred to herein and attached hereto, each of which is incorporated
herein for all purposes, and any other agreements between the parties
referenced herein or executed of even date herewith, constitute the
entire agreement between the parties with respect to the subject matter
hereof and supercedes all prior agreements, whether written or oral, with
respect to the subject matter contained in this Agreement. No change,
waiver, or discharge hereof shall be valid unless in writing and signed
by an authorized representative of the party against which such change,
waiver or discharge is sought to be enforced.
10.3 (***) . Except as is otherwise provided herein, (***)
(***)
(***) , in any market.
10.4 REGULATORY. MCI WORLDCOM and Rhythms will cooperate reasonably in state
and/or federal regulatory proceedings that may be necessary or desirable
in authorizing the provision of the Network Services and the DSL Services
as contemplated by this Agreement; provided, however, this shall not
require either party to take any particular position in any particular
regulatory proceeding except as may be determined by such party in its
sole discretion.
10.5 EXPENSES. Each party shall bear and pay all costs and expenses incurred
by it in connection with the transactions contemplated in this Agreement,
including fees and expenses of its own financial consultants, accountants
and counsel.
10.6 NOTICES. All notices and other communications which are required or
permitted hereunder shall be in writing and shall be deemed duly given
(i) when delivered by hand, (ii) one day after being given to an express
carrier with a reliable system for tracking
(***) Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
MCI WORLDCOM CONFIDENTIAL 13
delivery, (iii) when sent by electronic mail to the destination specified
by the applicable party, or (iv) six (6) days after the day of mailing,
when mailed by United States mail, postage prepaid and addressed as
follows:
In the case of Rhythms:
Xxxxx Xxxxxxxx
0000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000-0000
Phone Number: (000)000-0000
Fax Number: (000)000-0000
E-Mail Address: xxxxxxxxx@xxxxxxx.xxx
With a copy to:
Xxxx Xxxxxxxxxx, Esq.
Summer Square
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Phone Number: (000)000-0000
Fax Number: (000)000-0000
E-Mail Address: xxxxx@xxxxxxx.xxx
In the case of MCI WORLDCOM:
Xxxxx Xxxxx
President
MCI WORLDCOM Venture Fund, Inc.
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Phone Number: (000)000-0000
Fax Number: (000)000-0000
E-Mail Address: Xxxxx.Xxxxx@XXX.Xxx
With a copy to:
P. Xxxxx Xxxxxxxxx
General Counsel - Corporate Development
MCI WORLDCOM, Inc.
00000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxx, XX 00000
Phone Number: (000)000-0000
Fax Number: (000)000-0000
MCI WORLDCOM CONFIDENTIAL 14
E-Mail Address: xxxxx.xxxxxxxxx@xxxx.xxx
A party may from time to time change its address or designee for
notification purposes by giving the other prior written notice of the new
address or designee and the date upon which it become effective.
10.7 COUNTERPARTS. This Agreement may be executed in several counterparts,
all of which taken together shall constitute one single Agreement between
the parties hereto.
10.8 CAPTIONS. The article and section headings used herein are for reference
and convenience only and shall not enter into the interpretation hereof.
10.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect
to its principles of conflicts of law.
10.10 DISPUTE RESOLUTION. Without prejudice to either party's right to seek
equitable relief (including, but not limited to injunction) from a court,
any dispute arising out of or related to this Agreement which cannot be
resolved by negotiation, shall be settled by binding arbitration in
accordance with the J.A.M.S./ENDISPUTE Arbitration Rules and Procedures,
as amended by this Agreement. The costs of arbitration, including the
fees and expenses of the arbitrator, shall be shared equally by MCI
WORLDCOM and Rhythms unless the arbitration award provides otherwise.
MCI WORLDCOM and Rhythms shall each bear the cost of preparing and
presenting its case. The parties agree that this provision and the
arbitrator's authority to grant relief shall be subject to the United
States Arbitration Act, 9 U.S.C. 1-16 et seq. ("USAA"), the provisions of
this Agreement, and the ABA-AAA Code of Ethics for Arbitrators in
Commercial Disputes. The parties agree that the arbitrator shall have no
power or authority to make awards or issue orders of any kind except as
expressly permitted by this Agreement, and in no event shall the
arbitrator have the authority to make any award that provides for
punitive or exemplary damages. The arbitrator's decision shall follow
the plain meaning of the relevant documents, and shall be final and
binding. The award may be confirmed and enforced in any court of
competent jurisdiction. All post-award proceedings shall be governed by
the USAA.
10.11 RELATIONSHIP OF PARTIES. Each of the parties in furnishing the
respective services hereunder is acting as an independent contractor.
Neither party is an agent of the other party and neither party has any
authority to represent the other party as to any matters, except as
expressly authorized in this Agreement.
10.12 SEVERABILITY. In the event that any provision of this Agreement
conflicts with the law under which this Agreement is to be construed or
if any such provision is held invalid by an arbitrator or a court with
jurisdiction over the parties, such provision shall be deemed to be
restated to reflect as nearly as possible the original intention of the
parties in
MCI WORLDCOM CONFIDENTIAL 15
accordance with applicable law. The remainder to this Agreement shall
remain in full force and effect.
10.13 WAIVER OF DEFAULT; CUMULATIVE REMEDIES. A delay or omission by either
party hereto to exercise any right or power under this Agreement shall
not be construed to be a waiver thereof. A waiver by either of the
parties hereto of any of the covenants to be performed by the other or
any breach thereof shall not be construed to be a waiver of any
succeeding breach thereof or of any other covenant herein contained. All
remedies provided for in this Agreement shall be cumulative and in
addition to and not in lieu of any other remedies available to either
party at law, in equity or otherwise.
10.14 SURVIVAL. Any provision of this Agreement which contemplates performance
or observance subsequent to any termination or expiration of this
Agreement shall survive any termination or expiration of this Agreement
and continue in full force and effect.
10.15 THIRD PARTY BENEFICIARIES. This Agreement is entered into solely
between, and may be enforced only by, MCI WORLDCOM and Rhythms; and this
Agreement shall not be deemed to create in third parties, including
supplier and customers of a party, or to create any obligations of a
party to any such third parties.
10.16 LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY OR ANY THIRD PARTY FOR ANY INCIDENTAL, INDIRECT,
CONSEQUENTIAL, PUNITIVE, EXEMPLARY, OR SPECIAL DAMAGES EVEN IF A PARTY IS
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
10.17 (***) . Commencing on the Effective Date of this Agreement
and continuing for a period of (***) thereafter, (***)
(***) ; provided, however, that the
foregoing provision shall not prevent (***)
and, provided further, that nothing contained herein shall preclude
(***) (***) .
(***) Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
MCI WORLDCOM CONFIDENTIAL 16
IN WITNESS WHEREOF, MCI WORLDCOM and Rhythms have each caused this
Agreement to be signed and delivered by its duly authorized officer, all as of
the date first set forth above.
MCI WORLDCOM, INC.
BY: /s/ Xxxxx Xxxxx
------------------------------------
Name
SVP
------------------------------------
Title
3.3.99
------------------------------------
Date
RHYTHMS NETCONNECTIONS, INC.
BY: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name
CFO
------------------------------------
Title
3 - 3 - 99
------------------------------------
Date
MCI WORLDCOM CONFIDENTIAL 17
SCHEDULE 1.3
ALLIANCE ENTITIES
(***)
(***)
(***)
(***)
(***)
(***)
(***) Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
MCI WORLDCOM CONFIDENTIAL 18
SCHEDULE 2.1
CARRIER SERVICES AGREEMENT
MCI WORLDCOM CONFIDENTIAL 19
SCHEDULE 2.4
COMMENCEMENT DATE CERTIFICATE
THIS COMMENCEMENT DATE CERTIFICATE is made and entered into this ____ day
of ________________, ______, between Rhythms NetConnections, Inc. ("Rhythms")
and MCI WORLDCOM, Inc. ("MCI WORLDCOM").
WHEREAS, Rhythms and MCI WORLDCOM entered into an Agreement dated March
______, 1999, whereby, among other things, Rhythms agreed to provide and MCI
WORLDCOM agreed to purchase certain DSL Services.
NOW, THEREFORE, pursuant to Section 2.4(a) of the Agreement, Rhythms and
MCI WORLDCOM agree as follows:
1. The date on which Rhythms has 1,250 Rhythms Connection Points in
commercial service in twenty-nine (29) CMSAs and/or MSAs and the ordering
and provisioning systems are in compliance with the Carrier Services
Agreement is _____________________.
2. The date on which the Line Commitment Period commences is the date set
forth above in Section 1 of this Commencement Date Certificate.
IN WITNESS WHEREOF, Rhythms and MCI WORLDCOM have each caused this
Commencement Date Certificate to be signed and delivered as of the date first
above written.
RHYTHMS NETCONNECTIONS, INC. MCI WORLDCOM, INC.
By: By:
------------------------- -------------------------
Name: Name:
------------------------ ------------------------
Title: Title:
----------------------- -----------------------
MCI WORLDCOM CONFIDENTIAL 20
SCHEDULE 2.4(a)
PURCHASE COMMITMENT AND
LINE COMMITMENT PERIOD
The following schedule outlines the MCI WORLDCOM Purchase Commitment (***)
(***) at various dates during the 60 month Line
Commitment Period. At the indicated date (A), (***)
(B) (***)
(C) (***) (D). The assumed (***)
. In the event (***)
(***)
. In addition, (***) .
-------------------------------------------------------------------------------------------------------------
Milestone Date DSL Ingress Circuit Assumed (***) (***) Percentage
(Months)(1) Order Commitment (***) Term
(A) (B) (C) (D)
-------------------------------------------------------------------------------------------------------------
(***) (***) (***) (***)%
-------------------------------------------------------------------------------------------------------------
(***) (***) (***) (***)%
-------------------------------------------------------------------------------------------------------------
(***) (***) (***) (***)%
-------------------------------------------------------------------------------------------------------------
60 100,000 (***) (***)%
-------------------------------------------------------------------------------------------------------------
MCI WORLDCOM would have an additional (***) after the 60 month
Milestone Date to order additional DSL Ingress Circuits to meet the Purchase
Commitment.
EXAMPLE: Assume (***) . Assume (***)
(***) .
Assume (***) achieved (***)
(***) .
Assume (***)
(***) .
(***) Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
(1) Date on which Rhythms has 1,250 Rhythms Connection Points are available
for service in 29 CMSAs and/or MSAs and ordering and provisioning systems are in
compliance with the CSA as such date is certified by the parties in
Schedule 2.4.
MCI WORLDCOM CONFIDENTIAL 21
SCHEDULE 3.1
NETWORK SERVICES AGREEMENT
MCI WORLDCOM CONFIDENTIAL 22
SCHEDULE 4.2
OSS LICENSING AGREEMENT
MCI WORLDCOM CONFIDENTIAL 23
SCHEDULE 7.1
STOCK PURCHASE AGREEMENT
MCI WORLDCOM CONFIDENTIAL 24
