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THIS EXHIBIT CONTAINS CONFIDENTIAL INFORMATION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED. THE CONFIDENTIAL INFORMATION ON PAGES 23, 24, 25, AND 26 HAS BEEN
REPLACED WITH ASTERISKS.
FINAL CONTRACT 12-31-99
Exhibit 10.19
[RHYTHMS(TM) LOGO]
RHYTHMS NETCONNECTIONS INC.
ENTERPRISE AGREEMENT
THIS DOCUMENT IS CONFIDENTIAL AND PROPRIETARY AND IS INTENDED SOLELY FOR USE BY
CUSTOMERS OF RHYTHMS NETCONNECTIONS INC. CUSTOMERS MAY NOT DISCUSS, SHOW OR
REFER TO THIS DOCUMENT WITH OR TO ANY PERSON WHO IS NOT AN EMPLOYEE OR OFFICIAL
OF CUSTOMER WITHOUT PRIOR WRITTEN APPROVAL FROM RHYTHMS NETCONNECTIONS INC.
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FINAL CONTRACT 12-31-99
ENTERPRISE SERVICES SOLUTION AGREEMENT
Agreement, dated December 30, 1999 (the "Agreement"), by and between
iPhysicianNet Inc., a Delaware corporation (the "Company"), and Rhythms
NetConnections Inc., a Delaware corporation ("Rhythms").
PREAMBLE:
The Company has chosen Rhythms to be the preferred provider of a DSL
network to the Company's remote access endpoints with respect to the Company's
shared private networks to provide, among other things, videoconference
capability to and between the Company's subscriber physicians and others
(including, without limitation, physician groups and physicians) and various
pharmaceutical companies located in and throughout the continental United States
at locations which the parties will designate in accordance with this Agreement
(collectively, the "Market"), and Rhythms is willing to accept such appointment
and to provide a DSL network based upon the terms and conditions described
herein.
NOW, THEREFORE, in connection with the premises hereof, and the mutual
agreements, covenants, and representations and warranties set forth herein, the
parties hereto, intending to be legally bound, hereby agree as follows:
DEFINITIONS. When used in this Agreement, each of the following
capitalized terms shall have the meaning set forth as follows:
1. Action shall have the meaning set forth in Section 5.1 hereof;
2. Affected Remote Access Endpoints shall have the meaning set forth in
Section 5.8 hereof;
3. Affected Duration shall have the meaning set forth in Section 5.8
hereof:
4. Capacity Standard shall have the meaning set forth in Section 1 hereof.
5. Computer shall mean (i) a personal computer owned or leased by Company
which shall (a) consist of an integrated monitor and computer as a
single unit with videoconferencing capability, and (b) be configured
with a functioning Windows 95, 98 or NT operating system, or (ii) such
other personal computer equipment as the parties may mutually agree in
writing from time to time together with any other terms and conditions
applicable to such other computer equipment (including, without
limitation, any appropriate adjustment to the costs included in the ESS
Base Prices relating to the up to 15 minutes of installation time for
the performance of the General Tasks by Rhythms Installers);
6. CPE shall mean customer premises equipment (including, without
limitation, a router and up to 100 feet of new wiring and an associated
xxxx) supplied by Rhythms and installed at remote end user endpoints
which is required for circuit connectivity.
7. Commencement Date shall mean September 30, 2000 (or such earlier date
as the parties hereto may mutually agree in writing but in no event
earlier than thirty (30) days after the date of such mutual agreement.
8. Doctors shall mean physicians who actually or potentially subscribe for
the services of the Company, as the context requires in this Agreement;
9. Effective Date shall mean the date of this Agreement as first set forth
above.
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10. Egress Connection shall mean any connectivity to the Rhythms DSL
Network or the Networks provided hereunder by Rhythms to any person,
other than a Doctor or Physician Group (including, without limitation,
Company and any PharmCo or any Permitted Subcontractor of Company),
whose traffic and/or connectivity requirements would, in Rhythms'
reasonable judgment, require such person to obtain a DS-1 form of
connection or greater.
11. Equipment shall mean the equipment (including the CPE) and software to
connect each remote access endpoint to the Rhythms Network;
12. ESS or ESS service shall mean the Enterprise Services Solution provided
by Rhythms under this Agreement as described in Section 1 hereof;
13. ESS Base Prices shall have the meaning set forth in Section 1.1 hereof;
14. Force Majeure Event shall have the meaning set forth in Section 5.5
hereof;
15. General Tasks shall mean the tasks to be undertaken by a Rhythms
Installer at a remote access endpoint as described in Section 2.3
hereof;
16. Initial Term shall mean the three-year period commencing upon the
Effective Date (or such shorter period as shall result from the earlier
termination of this Agreement by either party hereto in accordance with
the terms of this Agreement);
17. Notice of Change shall have the meaning set forth in Section 5.8
hereof;
18. Networks shall mean the shared private networks designed and created
for Company by Rhythms utilizing Rhythms' US LAN network and based upon
the specifications and parameters provided by Company with respect to
communications (including, without limitation, video conferencing)
using ESS service to and between (1) Doctors and the PharmCos and/or
(2) Doctors and Doctors if such communications exclusively traverse
solely the Networks; provided, however, that the term "Networks" shall
exclude (i) any Internet access component of ESS service, and (ii) any
Doctor-to-Doctor communications or connectivity which do not traverse
the Networks exclusively;
19. Password shall have the meaning set forth in Section 2.1 hereof;
20. PCP Network shall mean the initial Network requested by the Company
using ESS service for primary care physicians;
21. Permitted Subcontractors shall mean any subcontractor of a party hereto
that performs an integral business function or activity for such party;
provided, however, that any subcontractor of a party hereto that is a
competitor of the other party hereto shall not qualify as a Permitted
Subcontractor pursuant to this definition;
22. PharmCo shall mean a pharmaceutical company that has signed an
agreement with the Company to participate in Company's services and
which the Company has designated to Rhythms to participate in one or
more Networks at remote access endpoint locations located in the
continental United States;
23. Physician Group shall mean a group or association of physicians
subscribing for Company services;
24. Proprietary Information shall have the meaning set forth in Section 4.1
hereof;
25. Quality of Service shall mean the use of accepted techniques to deliver
different data types with different latency requirements across a
network efficiently;
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26. Ramp Commitment shall mean the obligation of Company to deliver orders
to Rhythms in such quantities required pursuant to the terms of this
Agreement as described in Section 1.3 hereof;
27. Ramp Failure Event shall have the meaning set forth in Section 1.3
hereof;
28. remote access endpoint or remote end user endpoint shall include any
and all locations within the continental United States where Doctors or
PharmCos are connected to any Network and any other locations where
Company has ordered ESS service and/or Egress Connections to be
installed or provisioned by Rhythms to any person pursuant to the terms
of this Agreement (including, without limitation, Physician Groups, the
Company or any Permitted Subcontractor);
29. Rhythms Installers shall mean Rhythms personnel or authorized
representatives who perform the installation of Equipment to provision
ESS service at remote access endpoints and/or Egress Connection;
30. Service Determination shall mean customary testing and review performed
by Rhythms to determine whether a specific Doctor in a Physician Group
can be provisioned with ESS service at a connectivity speed equal to or
greater than 384X384kb/s;
31. Service Determination Report shall mean the report described in Section
1.2 hereof;
32. Taxes shall mean federal, state and local taxes, surcharges,
assessments and other governmental charges and fees that may be due at
any time with respect to the delivery of any products or services by
Rhythms pursuant to the terms of this Agreement;
33. Throughput Standard shall mean the criteria described in the Service
Level Agreement under the heading "Data Delivery"; provided, however,
that, if and to the extent that Company can demonstrate that the
Capacity Standard is insufficient to sustain acceptable quality of
videoconferencing due to frame loss, jitter or latency at 384X384kb/s
for 99% of the video connections on the Networks during any one-month
period and such quality degradation is not attributable to Company's
failure to purchase additional bandwidth capacity as contemplated in
this Agreement, Rhythms shall use its commercially reasonable efforts
to improve quality of service on the affected Network through the
available and industry-recognized and accepted means and technology
necessary;
34. Username shall have the meaning set forth in Section 2.1 hereof; and
35. Year 2000 Compliant shall have the meaning set forth in Section 5.2
hereof.
36. Power Internet shall have the meaning of the portion of the ESS being
provided under this Agreement to provide Rhythms' customary
business-grade Internet access.
1. ENTERPRISE SERVICES SOLUTION.
Rhythms Enterprise Services Solution to be provided to the Company
under this Agreement will be an end-to-end managed and supported service at a
speed of 384X384kb/s for connectivity between (1) Doctors and the PharmCos
and/or (2) Doctors and Doctors if such communications exclusively traverse
solely the Networks, upon the Networks sufficient to support interactive
videoconference capability.
The Enterprise Services Solution consists of the following features:
(a) Rhythms' provision of the necessary remote access service ordering,
installation, billing, and support; (b) Rhythms' management of the Company's
remote access program with 24 x 7, Tier 1 or Tier 2 support for both
ingress/egress circuits as well as appropriate CPE needed for circuit
termination; (c) Rhythms' provision of CPE needed for such remote access program
and related installation, configuration and management of the CPE needed for
circuit termination; (d) Rhythms' ownership and management of the circuits and
CPE; and (e) Rhythms'
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FINAL CONTRACT 12-31-99
provision of xDSL services, applications and ancillary products as set forth in
Exhibit A hereto (as the same may be amended from time to time in accordance
with this Agreement) for respective deployments. Any such DSL services may be
provided by Rhythms or, at Rhythms sole election and discretion, by an
alternative DSL service provider selected by Rhythms; provided, however, that
any such services provided by or through an alternative service provider shall
be subject to all the terms and conditions of this Agreement and shall be
managed and monitored by Rhythms.
The PCP Network shall include up to twelve (12) PharmCos participating
in the PCP Network, each of which shall be provided with a DS-3 Egress
Connection which will be configured with a bandwidth capacity equal to or
greater than the product obtained by multiplying (a) the number of Doctors
participating in that particular Network, times (b) 0.882 kb/s (the "Capacity
Standard"); provided, however, that each DS-3 assigned to a PharmCo
participating in the PCP Network shall be initially configured at 5 Mb/s until
the number of Doctors participating in the PCP Network reaches 5,500.
The Company shall have the right to create additional Networks which
Rhythms will provision with capacity equivalent to the Capacity Standard and
will manage based upon the principles applicable to the PCP Network, with each
such Network being able to accommodate the participation of up to twelve
PharmCos; provided, however, that Rhythms shall have the right to provision such
additional Networks with DS-1 Egress Connections to the extent consistent with
Rhythms maintaining the Capacity Standard and the Throughput Standard until the
number of Doctors participating in any such additional Network justifies the
provision of DS-3 Egress Connections. The Company shall have the right to
allocate bandwidth capacity among different PharmCos within each Network as long
as it does not adversely impact the Capacity Standard (measured as a total
across all Egress Connections for such Network), and such discretionary
allocation by Company shall be implemented by Rhythms in accordance with
Rhythms' then prevailing redeployment time schedules. If Company desires to
obtain additional PharmCo Egress Connections or capacity in any such Network,
Company shall be entitled to purchase additional connections or capacity from
Rhythms at the rates and charges set forth in Exhibit A hereto.
In order for Rhythms to provide the connectivity and Network capacity
to Company at the prices set forth in this Agreement, Rhythms has configured its
Networks based upon the statistical information regarding Doctor usage patterns
and the average duration of each call connection that Company has provided to
Rhythms. The parties agree that Rhythms shall have met the quality objectives
for each Network that maintains bandwidth capacity equivalent to 10.584 kb/s per
Doctor participating in such Network, and such bandwidth shall be allocated as
the Capacity Standard to each PharmCo Egress Connection, unless otherwise
directed by Company. To the extent that usage requirements shall exceed this
standard, the Company shall be obligated to either (a) purchase additional
capacity to increase the level of capacity beyond 10.584 kb/s per Doctor, or (b)
accept any degradation of ESS resulting from Company's failure to purchase such
additional capacity.
The Service Level Agreement attached hereto as Exhibit B shall apply
exclusively to performance of the Networks, and shall not apply to (a) the Power
Internet portion of the ESS being provided under this Agreement to provide
Rhythms' customary business-grade Internet access to each of the Doctors, and/or
(b) Doctor-to-Doctor communications which do not exclusively traverse the
Networks.. Rhythms. intends to continue to improve its network capabilities over
time to better support voice and video applications through use of Quality of
Service and other reliable technologies as they become commercially available
and deployable on a commercially reasonable basis.
1.1 PRICING. Based upon Company's Ramp Commitment and the configuration
of the Networks as described herein, Rhythms shall sell ESS, and the Company
shall purchase ESS, at the monthly recurring and installation prices set forth
in Parts I and II of Exhibit A hereto for each access connection (the "ESS Base
Prices"). Each ESS ordered by the Company shall have a minimum period of 36
months. If and upon the occurrence of Rhythms' failure to meet during any
calendar month the performance criteria set forth in the Service Level Agreement
attached hereto as Exhibit B with respect to the Networks, the Monthly Recurring
Rates that are included in the ESS Base Prices shall be adjusted for
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such month by Rhythms in the percentage amounts indicated in Exhibit B
corresponding to any applicable level of Rhythms' non-performance occurring in
any such calendar month. To the extent that any credit allowances may be
applicable to the ESS Base Prices, service credits shall not be cumulative and
the Company shall be entitled to receive the highest service credits applicable
to the month in which the Rhythms' non-performance occurred. Company shall also
be entitled to purchase additional Egress Connections (which do not have any
capacity associated therewith) at the monthly recurring changes and the
installation charges set forth in Part II of Exhibit A hereto, and such
additional Egress Connections may be integrated into any Network or used as
back-up for existing PharmCo Egress Connections.
The termination of any ESS service or Egress Connection prior to the
expiration of its applicable term will result in certain early termination fees,
unless such termination was due to the breach or default by Rhythms under this
Agreement. Similarly, if the Company fails to confirm or honor any scheduled
installation appointment on a timely basis, the Company may be charged a fee in
accordance with Part III of Exhibit A unless Rhythms has been notified of a
change in the scheduled appointment on or prior to 12:00 noon on the business
day preceding the scheduled time and date of the appointment. Movement of an ESS
service connection or Egress Connection within a Market will not result in an
early termination fee, but will result in an additional charge for
re-installation and related costs. A list of these early termination and other
fees is set forth in Part III of Exhibit A hereto. The Company shall be liable
for all termination charges set forth in Part III of Exhibit A hereto arising
from the Company's early termination of any Egress Connection, ESS service or
other connectivity ordered from Rhythms pursuant to this Agreement. Rhythms
shall have the right to apply any deposits, advance payments or other credit
balances attributable to the Company in satisfaction of any termination or other
fees arising under this Agreement.
All prices set forth in Exhibit A to this Agreement are exclusive of
applicable Taxes, which shall be invoiced to and due from the Company unless the
Company provides to Rhythms a valid and effective certificate from the
appropriate taxing authorities exempting Company from the Taxes that would
otherwise be invoiced hereunder.
Rhythms represents and warrants to Company that, except as set forth in
Section 1.3 hereof, the prices set forth in Exhibit A hereto shall be maintained
at their respective levels set forth in Exhibit A hereto throughout the Initial
Term of this Agreement.
1.2 ESS DEPLOYMENT. As the Company's preferred provider, Rhythms shall
have the exclusive right to supply all Company requirements for DSL services in
the United States during the term of this Agreement, either directly or, in
Rhythms' sole discretion, through an alternative DSL provider. Company shall use
its best efforts to (i) recruit new Doctors in geographic areas designed to
enable Rhythms to provide its DSL services to the Doctors qualifying for
Company's services, (ii) maximize the number of qualified Doctors ordering
connectivity from Rhythms, and (iii) ensure that all information provided to
Rhythms with respect to each Doctor is accurate and complete in all material
respects). Rhythms and Company shall cooperate in performing Service
Determinations. Prior to Company initiating any program to sign up individual
Doctors in any Physician Group, Company shall use its best efforts to provide to
Rhythms appropriate information to conduct a Service Determination for each such
Doctor within such Physician Group (including, without limitation, such Doctor's
name and a complete and accurate installation address for each such Doctor).
Upon receipt of such information, Rhythms shall complete a preliminary Service
Determination for each such Doctor within such Physician Group and shall report
to Company the results of such preliminary Service Determinations within three
(3) business days; provided, however, that if any list or lists of Doctors
delivered to Rhythms within any one week period shall have more than 5,000
addresses, Rhythms shall have a reasonable additional period to complete such
preliminary Service Determinations. Thereafter, when a Doctor contracts with the
Company to obtain the Company's services, the Company shall submit such order to
Rhythms, and Rhythms shall then perform a definitive Service Determination and
shall report the results of such definitive Service Determination to Company
within ten (10) business days following receipt of such order from Company (the
"Service Determination Report"). Each such Doctor's installation address shall
be classified in such Service Determination as within one of the four following
categories:
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(a) "Operational", which shall mean that connectivity can be
successfully provided to such Doctor based upon Rhythms'
currently available service;
(b) "Committed", which shall mean that connectivity can be
successfully provided to such Doctor based upon Rhythms'
service availability at a specified date, which shall not
exceed sixty (60) days following the date of the
performance of the Service Determination for that doctor (a
"Specified Date");
(c) "Planned", which shall mean that connectivity is projected
to be available to such Doctor based upon an expected
Rhythms' service availability by reference to a future
calendar quarter; or
(d) "Unplanned", which shall mean that Rhythms' service
availability is not currently planned for that Doctor's
installation address at any specific future date.
On and as of the Commencement Date, Rhythms shall be obligated to
accept Company orders for ESS for each Service Determination that is classified
as Operational or Committed within forty-five (45) days following the delivery
of the Service Determination Report to Company with respect to such order.
Rhythms shall be obligated to complete installation of ESS for (i) a minimum of
70% of the Operational Service Determinations in any Service Determination
Report within sixty (60) days following receipt of each respective order for an
Operational Service Determination, and (ii) 100% of such Operational Service
Determinations within ninety (90) days following receipt of each respective
order for an Operational Service Determination. Rhythms shall be obligated to
complete installation of ESS for (x) a minimum of 50% of Committed Service
Determinations in any Service Determination Report within fifteen (15) days
following the applicable Specified Date (but in no event prior to sixty (60)
days following receipt of each respective order for a Committed Service
Determination), and (y) 100% of such Committed Service Determinations within
forty (45) days following the applicable Specified Date (but in no event prior
to ninety (90) days following receipt of each respective order for such
Committed Service Determination). To the extent that Rhythms chooses to
provision service to Company through an alternative service provider, all such
orders shall be classified as "Committed" Service Determinations and shall be
installed based upon the installation schedule applicable to Committed Service
Determinations. Notwithstanding the foregoing, Rhythms shall have the right to
reject any orders classified as Operational or Committed for a period of thirty
(30) days after Rhythms has reported the classification of such order to
Company, and such rejected orders shall not be included in the calculation of
any percentage completion calculations under this Agreement. If Rhythms fails to
complete installations of Operational or Committed Service Determinations as
provided in this Section 1.2, Company shall have the right to obtain
connectivity from another provider for each of the Operational or Committed
Service Determinations with respect to which Rhythms failed to provide ESS
service on a timely basis. In addition, with respect to orders with a Service
Determination that is classified as Operational or Committed that are not
rejected by Rhythms within thirty (30) days after Rhythms' receipt of such
order, Rhythms shall provide a credit to Company within fifteen (15) days
following the end of a calendar quarterequal to the monthly recurring charge for
(i) one month's service for each such non-rejected Operational or Committed
order that Rhythms has failed to install within one hundred (100) days and not
more than 130 days; (ii) two month's service for each such non-rejected
Operational or Committed order that Rhythms has failed to install within one
hundred thirty one (131) days and one hundred sixty (160) days; and (iii) three
month's service for each such non-rejected Operational or Committed order that
Rhythms has failed to install within one hundred sixty one (161) and one hundred
ninety (190) days following Rhythms' receipt of such Operational or Committed
order (the "Installation Penalty") within such calendar quarter; provided,
however, that Rhythms shall be liable for any such penalty in each such
thirty-day interval provided herein only if the installation of such Operational
or Committed order continues to be pursued by Company with Rhythms and an order
for such doctor or end point has not been placed by Company with another service
provider; and provided,, further, however, that Rhythms shall not be obligated
to pay the Installation Penalty in any calendar quarter unless, and only to the
extent that, such installation failures shall exceed five percent (2.5%) of all
orders submitted by Company that are classified as Operational or Committed
Service Determinations and received by Rhythms during such calendar quarter. The
monthly credit on any individual order is non-cumulative. Company has
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the right to be released from Rhythms exclusivity for any ordered ESS service
which is not projected to be installed within one hundred (100) days, without a
cancellation penalty to Company.
The parties acknowledge and understand that (a) Rhythms is committed to
expanding the geographic footprint of its service availability on an
economically cost-justified basis in the United States and within the markets
where Rhythms presently has service available, and (b) Company will use its best
efforts to aggregate demand for ESS by Physician Groups within markets in a
manner that will provide Rhythms with the maximum opportunity to provide its
existing service to those Physician Groups as well as sufficient orders to
justify Rhythms expansion of its service areas to provide service to such
Physician Groups when meeting the Company's Ramp Commitment set forth in this
Agreement. Rhythms and Company shall consult with each other in developing and
proposing alternative access strategies to the Doctors to provide ESS
connectivity in areas where Rhythms does not provide DSL service generally and
will each attempt to arrive at mutually acceptable and economically and
technically viable methods of providing the ESS service contemplated in this
Agreement. If and to the extent that Rhythms determines, after receipt of a
Doctor's order and all applicable information from Company concerning the
Doctors signed up or projected to be signed up with Physician Groups in areas
where Rhythms does not provide service and in light of Company's progress in
satisfying its Ramp Commitment, that Rhythms will not provide ESS service within
such areas within sixty (60) days following receipt of such order (including,
without limitation, all Service Determinations that are classified as Planned
and Unplanned), Rhythms will release Company from the exclusivity provided in
this Section 1.2 with respect to Doctors which have ordered ESS service within
such areas where Rhythms has determined that it will not provide ESS service
within such sixty-day period as of the date that Rhythms shall have waived such
exclusivity. If Rhythms subsequently determines that Rhythms will offer ESS
service in such areas, the exclusivity provided in this Section 1.2 shall be
reinstated with respect to Doctor orders for such areas upon Rhythms
notification to Company that Rhythms is in a position to provision such orders
as a Committed Service Determination in accordance with this Agreement.
1.3. RAMP COMMITMENT. Company is committed to providing orders for ESS
service to Rhythms in the following cumulative amounts as of each of the
following dates listed below:
DETERMINATION DATE CUMULATIVE ORDERS
September 30, 2000 2,000
March 31, 2001 8,000
September 30, 2001 16,275
March 31,2002 33,450
September 30, 2002 45,000
March 31, 2003 59,500
Company understands and acknowledges that Rhythms has designed and configured,
and will continue to design and configure, the Networks and the Rhythms Network
based upon such forecasted orders by Company, and that the pricing provided by
Rhythms in this Agreement has been predicated upon receipt of such minimum
orders on or prior to the dates indicated. If Company shall fail to provide
orders in accordance with the schedule provided in this Section 1.3 as of or for
two (2) consecutive Determination Dates (the "Ramp Failure Event"), Rhythms
reserves the right to renegotiate the prices set forth in this Agreement for ESS
service and/or to terminate this Agreement if Company does not accept such
revised prices and/or fails to provide orders for any Determinate Date
subsequent to the Ramp Failure Event. Company shall advise Rhythms periodically
(and at least at the end of each calendar quarter) of its then currently
forecasted orders for the next six-month period and any information that would
be relevant to assessing Company's ability to meet the Ramp Commitment.
2. ORDERING AND INSTALLATION.
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2.1. ORDERING. All orders for ESS and Egress Connections shall be for
an initial duration of at least three (3) years, and orders shall be submitted
upon the approved forms provided by Rhythms, whether in written or electronic
form. After processing the Company's Egress Connection Order Form, Rhythms will
issue to the Company a username (the "Username) and a password (the "Password")
to enable the Company, directly or through its Permitted Subcontractors, to
access the NetworkNow(TM) website maintained by Rhythms, which will allow the
Company or such Permitted Subcontractors to place orders for services and
perform certain other functions with Rhythms over the Internet. The Company
understands and agrees that the information contained in and made available
through NetworkNow(TM) (as well as the Username and Password therefore) is
proprietary and highly confidential and should only be used for the purposes for
which it is intended and should not be disclosed to unauthorized persons. The
Company shall ensure that each of its employees and each Permitted Subcontractor
is aware of the confidential and proprietary nature of the Username and the
Password and the proper use of the information obtained from this website. Any
unauthorized use or disclosure of the Username or Password or any information
derived from NetworkNow(TM) will constitute a material breach of this Agreement,
and the Company shall as promptly as possible notify Rhythms of any unauthorized
use or disclosure of such Username, Password or information. The Company shall
promptly contact Rhythms to obtain a different Username and Password, or change
the Password associated with the compromised Username when (a) the Company
becomes aware that the security of the Username or the Password has been
compromised in any manner, and/or (b) the employment of one or more of the
representatives of the Company or Permitted Contractors who has used or had
access to the Company's Username or the Password is terminated by the Company
or, with respect to Company employees, is transferred to a position whose duties
does not require further use of the NetworkNow(TM) website on behalf of the
Company.
2.2 ESS INSTALLATION. Rhythms will need to install Equipment at each
remote access endpoint. Rhythms will supply all standard components to connect
the Company and/or each remote access endpoint to the Rhythms Network (all of
which components will remain the sole and exclusive property of Rhythms), and
the Company will not be charged any fees for use of these components or
Equipment during the term of this Agreement in addition to the ESS Base Prices.
Without limiting the generality of the foregoing:
(1) The Rhythms Installer shall extend the DSL loop through
existing wiring and will install up to 100 feet of new wiring
as required; provided, however, that such installation shall
not include unreasonable activity (including, without
limitation, installation of new conduit, opening walls or
other comparable activity that would generally be considered
construction-related, and/or any activity that would involve
excessive hazard or potential liability or injury);
(2) The DSL router shall be installed in proximity to the Computer
within such location, and the router shall be connected to the
Computer using the appropriate Ethernet cable;
(3) If the Computer is properly functioning and pre-configured,
the Rhythms Installer shall configure the IP settings (i.e.,
IP address, IP subnet, gateway address, and DNS address) and,
if requested by Company, the IP parameters of the Computer;
and
(4) Ping-level connectivity from the newly-installed router shall
be verified and confirmed to at least two specific
destinations within the Company or the Networks.
The Company agrees that the Company will, and will cause each of the persons
using ESS service at each remote access endpoint to, (a) not abuse or otherwise
damage the components or Equipment while they are in their possession, (b)
operate the Equipment according to manufacturer specifications, and (c) return
the Equipment in good condition (except for deterioration from normal usage) to
Rhythms upon the termination of this Agreement and/or such remote access to the
ESS through Company's remote access endpoints; provided, however, that Company
shall not be obligated to return any such router to Rhythms if (a) such router
has been in service at such location for two (2) years or more, and (b) Company
elects not to
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have the Computer collocated with such router returned to the Company following
any such termination of connectivity or this Agreement; provided, further,
however, that all routers shall be returned to Rhythms following any termination
resulting from a breach of this Agreement by Company.
In connection with the installation service performed by Rhythms
hereunder, it may be necessary for Rhythms Installers to insert certain software
in each Computer and possibly reconfigure some aspects of such Computer system
to accommodate ESS in connection with the installation, testing or subsequent
service relating to any connection with ESS. It is possible that such activities
might inadvertently result in the loss of certain programming on that Computer
system that could be important, and the Company hereby agrees that it is
Company's responsibility to make, or cause the Doctor's or others to make,
appropriate arrangements to prepare diskettes of all such important information
prior to the installation, testing or service of ESS. The Company hereby agrees
that neither Rhythms nor the Rhythms Installers will be responsible or liable in
any manner for any loss of, or damage to, any information or programming on any
such Computer system or any breach or violation of any manufacturer's or other
warranty relating to such Computer or any elements included in such Computer
system which may occur as a result of any installation, testing or later service
conducted by Rhythms or the Rhythms Installers as requested with respect to
Rhythms components, Equipment or other facilities or programming; provided,
however, that Rhythms shall be liable for any physical damage to the Computer
caused by the gross negligence or willful misconduct of any Rhythms Installer.
There may be instances (e.g., due to building maintenance exclusivity
rights) where the Company and/or Doctor or PharmCo is responsible for performing
all electrical or wiring work at their location. Should this situation arise,
the Company and/or Doctor or PharmCo shall be responsible for ensuring inside
wiring at their location is complete prior to Rhythms performing the
installation for the ESS service. Rhythms will install wiring up to the local
telephone company termination point, but the Company will be responsible for any
further wiring installation.
After an order is placed, Rhythms will coordinate the ESS service
installation with the ILEC. From time to time, conditions may exist that prevent
the installation of the ordered ESS service into a Company location or remote
access endpoint due to adverse infrastructure conditions or other conditions
beyond the reasonable control of Rhythms. Rhythms may evaluate and propose
alternative access strategies to achieve reliable connectivity, each of which
shall be subject to approval by the Company prior to implementation. If any
additional or unusual monthly or non-recurring charges are reasonably
anticipated with implementation of the alternative access strategies, Rhythms
will inform the Company of any estimate of those costs prior to installation. If
the Company decides to cancel the ESS service due to the cost of alternative
access strategies, the Company shall terminate the order and will incur no
charge for the ESS installation. If alternative access strategies are not
reasonably available, Rhythms reserves the right to cancel the order.
2.3. COMPUTER INSTALLATION SERVICES. Prior to the scheduled time for
installation of ESS service at any particular location, Company shall supply to
the installation location for each of the Doctors who will be receiving ESS a
Computer. At least thirty (30) days prior to the first installation contemplated
hereunder, Company shall deliver to Rhythms one example of each pre-configured
Computer so that Rhythms personnel can evaluate and train the Rhythms Installers
with respect to the procedures and services to be accomplished pursuant to this
Section 2.3, which Rhythms shall return to Company at the earlier of the
Company's discontinuation of its use and/or the termination of this Agreement If
a properly functioning and appropriately pre-configured Computer is not present
at the scheduled time and place for any installation of ESS by Rhythms, Rhythms
shall not be required to complete the procedures and services contemplated in
this Section 2.3 at such location but the Rhythms Installer shall proceed to
complete the ESS installation as contemplated in Section 2.2 hereof.
With respect to any properly functioning, pre-configured Computer
timely delivered to the installation location, Rhythms shall cause the Rhythms
Installer to perform and accomplish the following General Tasks:
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1. Remove the Computer from its shipping container and packaging;
2. Place the Computer in the installation location;
3. Connect the keyboard, mouse, and camera to the appropriate
ports on the side of the Computer, mount the camera in the
pre-positioned bracket that is permanently affixed to the top
of the Computer, and plug the Computer into an available power
source;
4. Turn on the Computer; and
5. Place all packaging materials that came with the Computer back
into the shipping container for disposal by the Doctor or the
Doctor's office staff.
Each of the foregoing General Tasks shall be accomplished by Rhythms without
additional charge to Company. Company shall use its best efforts to ensure that
the location selected for installation of the Computer and the DSL router is
within the Doctor's private office at the location, and Rhythms shall not be
liable for complying with any instructions or directives received from the
Doctor or the Doctor's on-site representative as to the installation location of
the Computer or the Equipment (even if such installation shall not be within the
Doctor's private office). If the Rhythms Installer is prevented for any reason
from performing the General Tasks concurrently with the installation of ESS at
such location, Company may schedule with Rhythms an additional service
installation call by Rhythms to such location to perform the General Tasks
customarily performed pursuant to this Section 2.3 at such location at such date
and time as Rhythms Installers are available; provided, however, that Company
shall pay Rhythms its standard hourly time and material charges for such
additional site visit and/or services. Any additional tasks requested to be
performed by Rhythms at any installation location shall not be performed unless
previously agreed to by Rhythms and Company based upon mutually agreed upon
terms and conditions (which shall specifically reference this Section 2.3 and
provide for its amendment). Rhythms shall perform the General Tasks for the
number of properly functioning, pre-configured Computers at any location equal
to the number of ESS installations performed at each location.
Company has requested that Rhythms perform the following sixth task:
"Make a single attempt to complete a video call to a pre-determined destination
that shall not exceed two minutes in duration." Rhythms will evaluate the
feasibility of performing this sixth task using the examples of Computers and
software provided by Company to Rhythms as set forth above and, following the
conclusion of Rhythms evaluation, Rhythms shall decide, in its sole discretion,
whether Rhythms will perform such sixth task as part of the General Tasks
pursuant to this Section 2.3.
3. BILLING AND PAYMENT. Rhythms shall prepare and deliver to the
Company a monthly invoice in electronic format which shall include applicable
monthly connectivity charges and the previous month's installation charges (if
any) as well as any applicable Taxes. For installations of ESS service and
Egress Connections occurring during any such month, such first month's
connectivity charges shall be pro-rated based upon the number of days the ESS
service or Egress Connection, respectively, was operational during such month
based upon a thirty (30) day calendar month. The Company shall remit full
payment to Rhythms for each such invoice within thirty (30) days after the date
of such invoice. If, however, the Company believes in good faith that any such
invoice is incorrect, the Company shall (a) timely remit payment of all
undisputed portions of any such invoice, and (b) concurrently object in writing
to the disputed portion or portions of the invoice and set forth with
particularity each basis upon which the Company believes the invoice to be
inaccurate. If payment of any invoice by the Company occurs after the stated
payment date, late fees shall accrue and become immediately due and payable by
the Company on the outstanding unpaid balance at the rate of 1.5% per month or
the highest rate permitted by applicable law, whichever is lower. If the parties
are unable to resolve any such disputed invoice within thirty (30) days after
the date payment of the invoice was initially due to Rhythms, such disputed
amount shall be submitted to escalation and binding arbitration as provided in
Section 9.10 of this Agreement. The Company's payment of any invoice shall not
affect the Company's rights to receive any adjustment to the ESS Base Prices
that may be due to the Company pursuant to Section 1.2 hereof. Invoices shall be
sent to the address of the Company as set forth herein or otherwise provided by
the Company to Rhythms in accordance herewith. Any purchase order or other
instrument of the Company accompanying any order or
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payment hereunder shall be solely for the internal use of the Company and its
terms shall not alter, amend or otherwise affect the terms of this Agreement.
4. CONFIDENTIAL INFORMATION.
4.1. "PROPRIETARY INFORMATION" DEFINED. As used herein, the term
"Proprietary Information" shall mean information that was or will be developed,
created or discovered by or on behalf of a specific person, or which becomes or
will become known by, or was/is conveyed by a specified person to another person
with an expectation of nondisclosure. "Proprietary Information" includes, but is
not limited to, trade secrets, computer programs, ideas, techniques, inventions
(whether patentable or not), business and product development plans, customers
and other information concerning a specified person's actual or anticipated
business, research or development, and/or personnel information, or which is
received in confidence by or for a specified reason from any other person.
4.2. NON-DISCLOSURE. Each party hereto recognizes and acknowledges that
the other party hereto possesses Proprietary Information which is important to
its business and that this Agreement creates a relationship of trust and
confidence between Rhythms and the Company with regard to Proprietary
Information. At all times, both during the term of this Agreement and after its
termination, each party hereto (including its personnel and/or Permitted
Subcontractors) shall (a) keep in confidence and trust and not use or disclose
any Proprietary Information of the other party without the prior written consent
of the party who is the rightful owner of such Proprietary Information, and (b)
take reasonable protective measures to maintain such non-disclosure (which
measures shall be at least the same as measures it normally takes to protect
it's own Proprietary Information); provided, however, that such Proprietary
Information may be used by such party in the ordinary course of performing the
services and complying with its obligations under this Agreement. Each party
shall require its personnel and/or its Permitted Subcontractor(s) who have
access to Proprietary Information of the other party hereto to execute a
non-disclosure agreement in favor of the parties hereto containing the same
requirements and conditions as set forth in this Section 4.2.
4.3. EXCEPTIONS TO NON-DISCLOSURE. Notwithstanding the provisions of
Section 4.2 hereof, neither Rhythms nor the Company shall be limited in its use
or disclosure of any Proprietary Information that Rhythms or the Company can
demonstrate: (a) is or has become readily publicly available without restriction
through no fault of the receiving party (or its employees or agents), (b) is
received without restriction from a third party lawfully in possession of such
Proprietary Information and such third party was under no obligation or duty not
to disclose such Proprietary Information; (c) was rightfully in possession of
Rhythms or the Company (as the case may be) without restriction prior to its
disclosure by the Company or Rhythms, respectively; (d) was independently
developed by employees or consultants of the receiving party without access to
Proprietary Information; or (e) is required to be disclosed by applicable law or
in connection with any legal, administrative, judicial or governmental
proceeding, hearing or process (in which event, the disclosing party shall
promptly notify the other of such proposed
Rhythms and the Company represents and warrants to the other party
hereto that (a) performance of the terms of this Agreement will not breach any
agreement to keep in confidence Proprietary Information obtained by Rhythms or
the Company, respectively, in confidence or in trust prior to the execution of
this Agreement, and (b) Rhythms and the Company, respectively, has not entered
into (and Rhythms and the Company, respectively, agrees not to enter into) any
agreement or commitment, either written or oral, that conflicts or might
conflict with its confidentiality obligations under this Agreement.
4.4 EQUITABLE RELIEF. The parties each acknowledge and agree that it
would be extremely difficult to measure the amount of damages arising from a
breach or threatened breach of any covenant contained in this Article 4, and
that monetary damages would be an inadequate remedy for the irrevocable harm
that would likely result from any such breach or threatened breach. Accordingly,
in such an event, the non-breaching party shall be entitled to temporary and
permanent injunctive relief (including, without
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limitation, specific performance, an injunction and/or a temporary restraining
order) in addition to other rights and remedies (including, without limitation,
monetary damages provided by law) without any requirement to post a bond.
5. ADDITIONAL OBLIGATIONS OF RHYTHMS.
5.1. INFRINGEMENT PROTECTION. Rhythms will indemnify, defend and hold
the Company harmless from and against any and all costs, liabilities, losses and
expenses (including, without limitation, reasonable attorney's fees) resulting
from any claim, suit, action or proceeding (collectively, an "Action") brought
against the Company alleging that customary and proper use of ESS by the Company
infringes or contributes to the infringement of any issued United States patent
or letters patent, copyright or other established intellectual property right
(but excluding any infringement contributorily caused by the Company's business
or equipment). The Company shall promptly notify Rhythms of any Action, and
Rhythms shall have the right to control any such Action and shall have the
exclusive right to conclude a settlement of any such Action which shall be
binding upon the Company. Rhythms shall have the right, in order to avoid or
settle any Action, to substitute at Rhythms' expense non-infringing equipment,
material, processes or services, or to modify ESS or the Equipment to become
non-infringing, or to obtain necessary licenses to use the infringing equipment,
material, processes or ESS services, in each case consistent with Rhythms'
obligations under this Agreement. If the Company's use of ESS services is
materially adversely affected by any actions taken by Rhythms under this Section
5.1 (other than those relating to any infringement contributorily caused by the
Company's business or equipment), then the Company shall have the right to
terminate such affected ESS services without incurring any early termination
charges hereunder.
5.2. YEAR 2000. Rhythms believes that its internal operating and
network systems are designed to operate before, during and after calendar year
2000 A.D. without material error or interruption relating to date data
(including, without limitation, date data which represents or references
different centuries or more than one century or leap year) in any level of the
systems assuming, in each case, that all systems and products used in
combination with them properly exchange data (hereinafter referred to as "Year
2000 Compliant"). In the event that Rhythms' systems are not Year 2000
Compliant, Rhythms shall, at no additional cost to the Company, seek to modify
its systems within a reasonable period of time so as to ensure that the systems
are Year 2000 Compliant to the extent that such modifications can be
accomplished on a commercially reasonable basis. If Rhythms' systems are not
Year 2000 Compliant and are not modified within a reasonable period to become
Year 2000 Complaint, then the Company shall have the right to terminate this
Agreement, which shall constitute the Company's sole remedy with respect to such
systems not being Year 2000 Compliant. Nothing herein shall constitute a
representation or warranty by Rhythms that the systems of other companies on
whose services or equipment Rhythms depends on or interconnects, or which the
ESS services depend on or utilize, are Year 2000 Compliant, nor shall Rhythms
have any obligation to remedy any such situation occurring with respect to any
such other company.
5.3. CUSTOMER SUPPORT; RESTORATION OF SERVICE. The Company shall be
entitled to the benefits of Rhythms' customer services described in the Service
Level Agreement with respect to the Networks. In the event that Company or any
of its remote access endpoints experiences a substantial reduction in the
Throughput Standard or a significant interruption of the Networks that is not
attributable to the Company's failure to acquire additional bandwidth capacity,
Rhythms shall, at no charge to the Company, restore the Company's or its remote
access endpoint's ESS service with respect to the Networks to its condition
prior to such reduction or interruption in accordance with the "Mean Time to
Restore Service" set forth in the Service Level Agreement or issue to the
Company the credit set forth therein in accordance with the terms of the Service
Level Agreement; provided, however, that Rhythms shall not be responsible for
any such reduction or interruption arising from or caused by any equipment or
services which are not a part of Networks or Equipment (including, without
limitation, the Company's or a remote access endpoint's computer, network or
software) or due to a Force Majeure Event.
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5.4. WARRANTIES. Subject to the limitations set forth below, in the
event that the Equipment installed by Rhythms in connection with the
provisioning of ESS service hereunder is determined to be defective or otherwise
becomes non-operational during the term of this Agreement, Rhythms will promptly
deliver replacement Equipment to the Company or affected remote access endpoint
upon receipt of notice of a malfunction of the Equipment, and the Company agrees
to cause the defective or non-operational Equipment to be promptly returned to
Rhythms.
EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, RHYTHMS MAKES NO
WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE ESS SERVICE AND/OR
THE EQUIPMENT. RHYTHMS SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED
WARRANTIES (INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) OF TITLE OR
NONINFRINGEMENT OF THIRD PARTY RIGHTS. THE WARRANTIES SET FORTH IN THIS
AGREEMENT ARE IN LIEU OF ANY OTHER WARRANTY, WRITTEN OR ORAL,
STATUTORY, EXPRESS OR IMPLIED.
Any warranties provided by Rhythms under this Agreement shall not apply
to any situation where (a) any ESS service, Equipment or other service has been
installed or serviced by anyone other than Rhythms or its authorized Rhythms
Installers, (b) the Equipment has experienced neglect, misuse or unusual damage,
and/or (c) any ESS service, Equipment or other service is not used in compliance
with applicable law or the operating instructions established by Rhythms or the
original manufacturer. Except as expressly provided in this Agreement, this
Agreement shall not provide third parties (including each of the persons using
ESS service at each remote access endpoint of the Company) with any rights,
privileges, causes of action or claims against Rhythms. The credit allowances
available under, and provided in accordance with the provisions of, the Service
Level Agreement shall constitute the sole and exclusive remedy of the Company
with respect to any temporary interruption or degradation of any services
provided by Rhythms hereunder.
5.5. FORCE MAJEURE. Notwithstanding any other provision set forth in
this Agreement, Rhythms shall not be liable for any failure or delay in its
performance under this Agreement (including any changes to or failure to
continue to provide ESS service or any other services contemplated herein) due
to any cause beyond Rhythms' reasonable control, including, without limitation,
any act of war or civil insurrection, national emergencies, acts of God, fire,
explosion, vandalism, cable cut which is not the fault of Rhythms or any of its
employees, agents or representatives, storm, earthquake, flood, embargo, riot,
sabotage, industry-wide strikes, lockouts, work stoppages or other labor
difficulties, unavoidable, industry-wide supplier failures, shortages, breaches
or delays, unavailability of materials or rights-of-way, governmental act or
change in regulatory requirements affecting telecommunications companies
similarly situated with Rhythms generally, or failure of the Internet (a "Force
Majeure Event"); provided, however, that Rhythms shall (a) give the Company
prompt notice of such cause, and (b) use its commercially reasonable efforts to
correct promptly such failure or delay in performance to the extent consistent
with then applicable law and regulatory requirements and appropriate in light of
then existing circumstances. Notwithstanding the foregoing, (a) no act or
omission by an employee, agent or authorized representative of Rhythms shall be
deemed to be "beyond the reasonable control" of Rhythms solely for purposes of
this Section 5.5, and (b) in the event that any Force Majeure Event results in a
failure of ESS service to the Company or any remote access endpoint, the
Company's payment obligation for any ESS circuit adversely affected by such
Force Majeure Events shall be suspended on a day-for-day basis for the duration
that such ESS service is so adversely affected by the Force Majeure Event.
5.6. INSURANCE. During the term of this Agreement, Rhythms at its sole
cost shall carry insurance with an "A" rated company providing coverage with
respect to Comprehensive General Liability, Workers Compensation Insurance and
Automobile Liability Insurance.
5.7. TECHNOLOGY OPTIMIZATION. As reasonably requested by the Company,
but no more than semi-annually during the Initial Term and all extensions
thereof, Rhythms shall, at no additional charge to the Company, review the mix
and configuration of the ESS service based on the Company's reasonably
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anticipated requirements during the succeeding twelve (12) months and consider
the Company's need for additional services, service upgrades and all changes
thereto so as to optimize the efficiency and cost-effectiveness of the Company's
use of ESS service. Based on each such review, Rhythms shall make written
recommendations to the Company that Rhythms believes will improve the efficiency
and cost-effectiveness of the ESS service, including bringing to the Company's
attention any existing or planned offerings, service upgrades, or additional
services that are applicable to the Company's use of the ESS service and that
Rhythms believes may be of value to the Company. Rhythms shall also offer advice
concerning the ESS service, and its configuration where Rhythms believes that
they do not appear to be the most technically or economically appropriate for
addressing a known business communications need of the Company.
5.8. CHANGES TO SERVICES. Although any service provided by Rhythms is
subject to its business policies, practices, and procedures (which Rhythms
reserves the right to change at any time and from time to time in its sole
discretion), Rhythms will not materially adversely change the ESS service
provided to the Company hereunder except upon sixty (60) days prior written
notice to the Company (a "Notice of Change"). Upon delivery of notice of a
material adverse change to any service, Rhythms shall promptly notify the
Company of the number of remote access endpoints that will be affected by such
change (the "Affected Remote Access Endpoints") and the then existing remaining
duration of each such Affected Remote Access Endpoint's ESS service (excluding
elective extensions) subject to such changes (the "Affected Duration"). Rhythms
shall have the option to either continue to provide the existing ESS service to
the Affected Remote Access Endpoints during the Affected Duration or to upgrade
or enhance the service to an Affected Remote Access Endpoint for the Affected
Duration at Rhythms' sole cost and election. Upon receipt of any Notice of
Change, the Company shall not thereafter be entitled to submit orders for any
services that are materially adversely changed by Rhythms except as specified in
the Notice of Change. Except as set forth herein, if the Company otherwise
elects to continue to use ESS service or any other affected services after
receiving a Notice of Change, those changes will apply to the Company commencing
on the 60th day after the date it receives the Notice of Change. Rhythms shall
exercise commercially reasonable efforts to avoid service degradation,
interruption or material cost to the Company or any Affected Remote Access
Endpoints as a result of such material adverse changes in ESS service for a
period of sixty (60) days after notice to the Company of such actual or proposed
changes in ESS service.
In addition, Rhythms reserves the right in its sole discretion to
change, replace, upgrade or otherwise modify any aspect of (a) the ESS service
(including, without limitation, the Equipment), or (b) any procedures or
requirements relating to the ordering or provisioning of ESS service under this
Agreement, in response to further technological or other business applications
or developments; provided, however, that any such changes, replacements,
upgrades or modifications shall not result in any adverse effect upon the ESS
service being supplied to Company pursuant to this Agreement.
5.9. PROJECT MANAGEMENT SERVICES. Rhythms shall provide a full-time
project manager to support the build-out and continuing management of the
Networks and the provision of ESS service to Company and each participating
doctor using ESS service, and that manager will be resident within the greater
Phoenix, Arizona metropolitan market and shall be dedicated to the relationship
between Rhythms and Company. In addition, Rhythms will provide Senior Systems
Engineering resources to Company on an "as needed" basis (as reasonably
determined by Rhythms) to (a) provide consultation and continuing design
engineering for the Networks and provisioning of ESS service to Company and its
participating Doctors, and (b) assist in reviewing Company's developed
applications which require testing of their compatibility and interface with the
ESS service to confirm their operational sufficiency and completeness.
6. USE OF SERVICES; RIGHTS TO RESTRICT, INTERRUPT OR END SERVICE OR
THIS AGREEMENT. Rhythms is providing ESS service, Equipment and other services
contemplated by this Agreement solely for the internal business use of the
Company and each of its participating Doctors, PharmCos, Physician Groups and
others as an end user of the services provided by Company, and the Company shall
be solely responsible for the content of any transmissions over the Rhythms
Network or the Networks from its premises location or any location of any remote
access endpoint of the Company. The Company shall, and
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shall cause each of the persons using ESS service at each remote access endpoint
to, use Rhythms' services in a manner that conforms with the terms of this
Agreement, and the Company and the persons using ESS service at each remote
access endpoint shall not (a) attempt to gain unauthorized access to any other
system or network, or (b) interfere or disrupt other End Users, Network
Operations or Network equipment of Rhythms or any of its affiliates. The Company
and the persons using ESS service at each remote access endpoint shall also not
(1) propagate computer viruses or other harmful code or data or (2) impersonate
any person using forged headers or other identifying information (provided,
however, that the use of anonymous re-mailers and nicknames is allowed). The
Company hereby warrants that the Company and the persons using ESS service at
each remote access endpoint will not infringe the copyright, trademark, or other
intellectual property rights of any other person or entity through the use of
the Rhythms Network or services, and that the Company shall not, and shall cause
each of the persons using ESS service at each remote access endpoint not to, use
the Rhythms Network or services to defame, cause an invasion of privacy or
otherwise violate the rights of any person or entity, or violate any local,
state, federal, or international statute, regulation or treaty. The transfer of
certain technical data and software across national boundaries (including the
electronic transmission thereof) is regulated by the federal government. The
Company shall not, directly or indirectly, export or re-export (including by
electronic transmission) any regulated technical data or software without first
obtaining any required export license or governmental approval and otherwise
complying with all governmental rules and regulations applicable to that
activity. The provisions set forth in this Section 6 are hereby supplemented
and/or modified by the provisions set forth in Rhythms' Acceptable Use Policy
published from time to time at Rhythms' website located at xxx.xxxxxxx.xxx If
any conduct described in this first paragraph of this Article 6 or in Rhythms'
Acceptable Use Policy shall occur, Rhythms shall promptly notify the Company of
such offending conduct and, if the Company shall have failed to cause such
offending conduct to cease expeditiously and in a manner calculated to avoid any
repetition to the reasonable satisfaction of Rhythms, Rhythms shall have the
right, in addition to other available remedies, to suspend and interrupt ESS
service to the remote access endpoint(s) or location(s) that Rhythms shall have
identified are responsible for such offending conduct. Rhythms reserves the
right to adopt further restrictions or regulations to address the development or
occurrence of further activities comparable to those listed in this Article 6.
RHYTHMS MAKES NO GUARANTEE OF CONFIDENTIALITY OR PRIVACY OF ANY
COMMUNICATION OR INFORMATION TRANSMITTED OVER ITS NETWORK OR ANY
NETWORK ATTACHED TO ITS NETWORK.
Rhythms shall not be liable for the privacy of e-mail addresses,
registration and identification information, disk space, communications,
confidential information or trade secret information, or any other content
stored on Rhythms equipment, transmitted over networks accessed by the ESS
service, or otherwise connected with the Company's or its remote access
endpoints. Notwithstanding the above, Rhythms shall be liable for the conduct of
its employees and/or agents in connection with the provisioning of ESS service
that would otherwise constitute a violation by Rhythms of the terms of this
Agreement.
To maintain or improve Rhythms service or the Rhythms Network, to
prevent fraud or for other business exigencies, Rhythms can restrict, interrupt
or modify the ESS service to the Company, but, with respect to each
interruption, restriction or modification (other than normal and customary
scheduled maintenance and upgrading of the Rhythms Network), Rhythms will
promptly seek to advise the Company of such interruption, restriction or
modification as reasonably practicable and to resolve any situation or condition
that has caused an interruption in ESS service to the extent that the fault
involves the Rhythms Network or its equipment. Rhythms shall have the right, at
its sole election, to restrict or end ESS service to the Company and/or any of
its remote access endpoints if the Company: (a) carries past due balances for
more than thirty (30) days after the original due date (other than disputed
charges being resolved pursuant to Section 9.10 hereof); (b) makes a materially
false statement to Rhythms; (c) interferes with Rhythms' customer service or any
other business operations; (d) becomes insolvent or goes bankrupt; or (e)
breaches or is otherwise in violation of any material, non-monetary provision of
this Agreement and the Company fails to cure any such breach or violation within
(30) days after receipt of notice from Rhythms concerning such breach or
violation. Rhythms also reserves the right to suspend services to any remote
access endpoint or location upon notice to the Company if (i) Rhythms believes
that its service is being misused or used by anyone for unlawful activity, or
(ii) the use of Rhythms service in any premises of the
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Company or at any remote access endpoint of the Company adversely affects
Rhythms service to other Rhythms' customers. All products and services of
Rhythms shall be provided subject to Rhythms' business polices, practices and
procedures, which Rhythms' reserves the right to change at any time and from
time to time in its sole discretion.
Company represents and warrants to Rhythms that Company is obtaining
the ESS service, Equipment and other services provided by Rhythms under this
Agreement solely for the internal business use of the Company as the ultimate
end user at each Company or doctor location and remote access endpoint, and
neither Company nor any of its affiliates shall, directly or indirectly, (i) act
as an internet service provider using any ESS service, Equipment or other
services provided hereunder, and/or (ii) resell, lease, or otherwise provide in
any form or manner any ESS service, Equipment or other services provided
hereunder (or any bandwidth associated therewith) to any other person or party
who is not affiliated with, or an employee of, the Company. Rhythms shall have
the right to reject any order, and to terminate any ESS service or other
services provided hereunder, which involves the provision of any ESS service,
Equipment or other service provided hereunder that is or would be inconsistent
with the immediately preceding sentence.
7. MUTUAL WAIVERS AND LIMITATIONS OF LIABILITY. Except as otherwise
specifically set forth herein, Rhythms' maximum liability to the Company under
any theory (including but not limited to fraud, misrepresentation, breach of
contract, personal injury, negligence, or products liability) is limited to a
refund or rebate of charges paid or owed to Rhythms by the Company and any
physical property damage caused by Rhythms in connection with the installation
or provisioning of ESS service. The maximum liability of the Company to Rhythms
under any theory (including but not limited to fraud, misrepresentation, breach
of contract, personal injury, negligence, or products liability) is limited to
charges the Company owes to Rhythms, any actual damages the Company causes to
Rhythms business or property, and any damages collected from Rhythms by a third
party arising out of the Company's use of Rhythms' products or services in an
improper or unauthorized manner and/or in violation of the terms of this
Agreement.
IN NO EVENT SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER
OR ANY THIRD PARTIES FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE,
CONSEQUENTIAL OR EXEMPLARY DAMAGES RELATING TO OR ARISING FROM THE
PROVISION OF THE SERVICES TO BE PROVIDED HEREUNDER, OR OTHERWISE
RELATING TO THE PERFORMANCE BY EITHER PARTY OF ITS OBLIGATIONS
HEREUNDER (INCLUDING, WITHOUT LIMITATION, BASED ON LOSS OF REVENUES,
PROFITS, CUSTOMERS, GOODWILL OR BUSINESS OPPORTUNITIES) WHETHER OR NOT
EITHER PARTY HAD OR SHOULD HAVE HAD ANY KNOWLEDGE, ACTUAL OR
CONSTRUCTIVE, THAT SUCH DAMAGES MIGHT BE INCURRED.
Rhythms and the Company agree not to make, and to waive to the fullest
extent allowed by law, any claim for damages other than direct, compensatory
damages as limited above. Rhythms and the Company also agree not to make, and to
waive to the fullest extent allowed by law, any claim for equitable relief,
other than to protect any patents, copyrights, trademarks, or other intellectual
property rights or Proprietary Information, or to prevent abusive, fraudulent,
improper or illegal use of Rhythms' products or service. The Company shall
indemnify Rhythms for any claims by third parties against Rhythms arising out of
the use of Rhythms' products or service by the Company to the extent such use is
improper, unauthorized or in breach of any provision of this Agreement. Rhythms
shall not be liable to the Company for interrupted service or problems caused by
or contributed to (i) by the Company; (ii) by any third party; (iii) by
atmospheric conditions or other things Rhythms does not control; or (iv) by any
act of God, natural disaster or other Force Majeure Event. Rhythms shall not be
liable for any claim by or against the Company arising out of or related to (i)
alteration, theft or destruction of the Company's computer programs,
information, data files, procedures or other property which is not caused by
Rhythms' negligence or willful misconduct, (ii) any losses or damages the
Company may suffer in connection with the use or
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FINAL CONTRACT 12-31-99
inability to use Rhythms products or services, or (iii) any data, materials or
other information transmitted or received by or to the Company or the Company's
intended recipient that are lost or improperly intercepted via the Internet.
8. TERM; TERMINATION.
8.1. TERM. This Agreement shall initially have a duration equal to the
Initial Term commencing on the Effective Date. This Agreement shall
automatically be renewed for successive one-year terms on each anniversary of
the Effective Date (or on the second or third anniversary of the Effective Date
for two-year and three-year term Agreements, respectively) unless, at least
thirty (30) days prior to the applicable anniversary date for any such renewal,
Rhythms or the Company shall deliver a cancellation and non-renewal notice to
the other party, in which event this Agreement shall expire and terminate at
11:59 p.m. on the day immediately preceding the forthcoming applicable
anniversary date with respect to such renewal.
8.2. TERMINATION.
(a) BY RHYTHMS. Rhythms shall have the right to terminate this
Agreement if the Company shall have failed to promptly perform its obligations
under this Agreement. and such non-performance is not remedied within thirty
(30) days after notice to the Company (or, in the case of non-payment, ten (10)
days after written notice thereof to the Company) (or, in the case of
non-performances other than non-payment, if such remedial action cannot
reasonably be completed within such thirty-day period, the Company shall have
initiated efforts to effect such remedy and is (and continues to) diligently
pursuing the accomplishment of such remedy).
(b) BY COMPANY. Company shall have the right to terminate this
Agreement in the following circumstances:
(1) The Networks shall consistently fail to meet the Network
Availability, One-Way Network Delay, and Throughput criteria
set forth in the Service Level Agreement on a nationwide basis
during any calendar quarter, and Rhythms shall have failed to
bring the Networks into compliance with such criteria within
thirty (30) days after receipt of notice from the Company; or
(2) Rhythms shall fail to continue to increase the number of
operational central offices (or comparable coverage-enabling
locations) in Rhythms Network such that Rhythms maintains its
present proportional relationship to the average number of
operational central offices maintained by its two largest
competitors, and Rhythms shall fail to reestablish such
proportionality within three (3) months after receipt of
notice from Company.
(c) BY EITHER PARTY. Either party may terminate this Agreement upon
thirty (30) days written notice to the other in the event that the other party
becomes bankrupt or insolvent, or makes an assignment for the benefit of
creditors, if such proceedings are not dismissed within sixty (60) days after
commencement. Subsequent to the Initial Term of this Agreement, either party
shall have the right to terminate this Agreement upon sixty (60) days advance
written notice to the other party.
(d) TERMINATION DAMAGES. In addition to the other remedies provided
herein, each party shall be responsible for all damages (including attorneys'
fees and costs) caused by reason of such defaults by the defaulting party.
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FINAL CONTRACT 12-31-99
8.3 RIGHT UPON TERMINATION. Upon the expiration or earlier termination
of this Agreement, each party shall return to the other within thirty (30) days
following such expiration or termination all papers, materials, and properties
of the other (including, without limitation, all Proprietary Information).
8.4. NO DAMAGE FOR TERMINATION. Neither party shall have the right to
recover damages or indemnification of any nature (whether by way of lost
profits, expenditures for promotion, payment for goodwill or payments otherwise
made in connection with the business contemplated by this Agreement) solely as a
result of the expiration or permitted or lawful termination of this Agreement.
8.5 SURVIVAL. The termination or expiration of this Agreement shall not
affect the provisions of Articles 4, 6, 7, 8 and 9, and Sections 5.1, 5.4 and
5.5 of this Agreement, each of which shall survive any such termination or
expiration and continue in full force and effect thereafter.
9. MISCELLANEOUS.
9.1 SUCCESSORS AND ASSIGNS. This Agreement shall not be assigned by
Rhythms or the Company without the prior written approval of the Company or
Rhythms, respectively, which consent shall not be unreasonably withheld;
provided, however, that either party may assign its rights and obligations under
this Agreement (a) in whole or in part to any subsidiary or affiliate of such
party as long as such party remains primarily obligated under this Agreement,
and/or (b) in whole as part of a corporate reorganization, consolidation,
merger, or sale of all or substantially all of its assets; provided, further,
however, that (a) the assignee assumes in full in writing the obligations of the
assignor under this Agreement, and (b) the Company shall not assign this
Agreement to any direct competitor of Rhythms. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit
of, and be binding upon, the respective permitted successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective permitted
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement.
9.2 PUBLICITY. Except as otherwise provided in Section 4.3 of this
Agreement, neither party shall disclose the existence or the terms and
conditions of this Agreement to third parties (other than as required to enable
subcontractors and/or consultants to perform its obligations under this
Agreement) without the prior written consent of the other party.
9.3 GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the Sate of Colorado without regard
to the choice of law principles thereunder.
9.4. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.5 HEADINGS. The titles, subtitles and other headings used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.6 NOTICES. Unless otherwise provided, any notice, request, demand,
instruction, document or other communication required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon
its receipt addressed to the party to be notified at the address or number
indicated for such party below, or at such other address or number as such party
may designate by advanced written notification to the other party delivered as
provided in this Section 9.6. All notices, requests, demands, instructions,
documents and other communications shall be deemed duly given upon the earliest
of (i) hand delivery; (ii) the first business day after sending by reputable
overnight delivery service for next-day delivery; (iii) the third business day
after sending by first class United States mail, postage prepaid; (iv) the time
of successful facsimile or e-mail transmission as evidenced by a confirmation of
successful transmission (or in the event that the time of receipt of the fax or
e-mail in the city where the fax
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or e-mail is received is not during regular business hours on a business day,
then at the customary hour for the opening of business on the next business
day); or (v) the date actually received by the other party. The current
addresses and numbers of the parties hereto are as follows:
Rhythms NetConnections Inc.
0000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Tel. No.: 000-000-0000
Fax. No.: 000-000-0000
E-Mail: xxxxxxxxxx@xxxxxxx.xxx
Attention: Xx. Xxxxxxx X. Xxxxxxxxx
iPhysicianNet Inc.
0000 Xxxxx Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Tel. No.: 480-368-2768
Fax. No: 000-000-0000
E-Mail: xxxx.xxxxxxxxxx@xxxx.xxx
Attention: Xxxx X. Xxxxxxxxxx.
Executive Vice President & Chief Financial Officer
9.7 EXPENSES. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorney's fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.
9.8 AMENDMENTS AND WAIVERS Any term of this Agreement may be amended,
either in whole or in part, only with the written consent of each of the parties
hereto. Notwithstanding any course of conduct or dealing by the parties during
the course of this Agreement, no waiver (either generally or in a particular
instance and either retroactively or prospectively) shall be deemed to have been
made by either party hereto unless expressed in writing and signed by the
waiving party. The failure of either party to insist in any one or more
instances upon strict performance of any of the terms or provisions of this
Agreement, or to exercise any election herein contained, shall not be construed
as a waiver of any prior or subsequent rights or remedies hereunder or at law.
All remedies afforded in this Agreement shall be taken and construed as in
addition to every other remedy available at law or in equity.
9.9 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be appropriately
limited in its scope and application to make it enforceable or, if any such
limitations is not possible, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
9.10. DISPUTE RESOLUTION
9.10.1. ESCALATION. Any controversy or claim arising out of, relating
to or in connection with this Agreement shall be first submitted by the parties
in writing to a panel of two senior executives, one appointed by the Company and
one appointed by Rhythms, who shall promptly meet and confer in an effort to
resolve such dispute. In the event the appointed executives are unable to
resolve such dispute within forty-five (45) days (or, with respect to any
dispute involving payments due under this Agreement, within ten (10) days) after
the submission of the dispute to them and the parties have not agreed to an
extension of time within which the dispute may be resolved by such executives,
either party may then refer such dispute to arbitration in accordance with
Subsection 9.10.2 hereof.
9.10.2. ARBITRATION. Any controversy or claim arising out of, relating
to or in connection with this Agreement that has not been resolved pursuant to
Subsection 9.10.1 hereof
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FINAL CONTRACT 12-31-99
shall be resolved through binding arbitration pursuant to and in accordance with
the Commercial Arbitration Rules of the American Arbitration Association then in
effect, as modified by the terms of this Subsection 9.10.2 set forth below:
(a) Arbitration shall be conducted at a location in San Francisco,
California to be agreed upon by the parties.
(b) Arbitration shall be conducted by three (3) arbitrators, with each
party to this Agreement selecting one (1) arbitrator each and the two
selected arbitrators then selecting the third arbitrator.
(c) Prior to the commencement of the arbitration, each party shall be
entitled to take limited discovery, including the rights to request a
reasonable number of documents, to serve no more than twenty (20)
interrogatories and to take no more than three (3) depositions. This
limited discovery shall be conducted in accordance with the Federal
Rules of Civil Procedure, which shall be interpreted and enforced by
the arbitrators.
(d) The arbitrators shall, as soon as practicable and upon fifteen (15)
days written notice to each party, conduct an arbitration hearing and
proceeding on the merits of the dispute and thereafter shall issue a
written decision explaining the basis for the decision, including
findings of fact and conclusions of law and/or contract interpretation.
The decision of the arbitrators shall be based upon a majority vote.
The parties agree that the arbitrators shall have no power or authority
to make any award that provides for punitive or exemplary damages or
other damages excluded by this Agreement, or that otherwise departs
from the plain meaning of this Agreement.
(e) Each party shall bear its own costs and expenses arising out of any
arbitration (including the costs of the arbitrator selected by it), and
shall bear equally the costs, expenses and fees of the third party
arbitrator.
(f) Any arbitration arising out of or relating to this Agreement or any
alleged breach or non-performance thereof may include by consolidation,
joinder or other manner any other person or persons which or whom a
party to the arbitration reasonably believes to be substantially
involved in a common question of fact or law.
(g) The agreement to arbitrate shall be specifically enforceable under
prevailing law. Any award rendered by the arbitrators shall be final,
binding and enforceable by any party to the arbitration, and judgment
may be rendered upon it in accordance with applicable law in a court of
competent jurisdiction.
(h) Other than in connection with enforcing its rights in proprietary
information or intellectual property rights or in connection with this
Subsection 9.10.2, each party hereby waives any and all rights to, and
hereby covenants not to, bring any lawsuit, arbitration or other
proceeding in any jurisdiction, judicial body or forum arising under or
relating to this Agreement or its subject matter (other than an
arbitration proceeding described above or a legal proceeding solely to
enforce the award or judgment of such arbitration proceeding).
(i) The parties acknowledge that this Agreement evidences a transaction
involving interstate commerce. The United States Arbitration Act shall
govern the interpretation, enforcement, and proceedings pursuant to the
arbitration clause in this Agreement.
9.11 RELATIONSHIP OF PARTIES. In fulfilling its obligations under this
Agreement, each party shall be acting as an independent contractor. This
Agreement does not make either party the employee, agent, or legal
representative of the other. Nothing stated in this Agreement shall be construed
as constituting the Company and Rhythms as partners or joint venturers, or
creating any other type of relationship such as general agency, partnership,
employment relationship or franchise, and each party to
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FINAL CONTRACT 12-31-99
this Agreement shall not hold itself out as having any authority to make any
agreement or incur any liability or bind the other party hereto in any manner.
9.12 ENTIRE AGREEMENT. This Agreement (including the Exhibits hereto,
each of which is incorporated herein and made a part of this Agreement by this
reference) constitutes the full and entire understanding and agreement between
the parties with regard to the subject matter hereof and thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
iPHYSICIANNET INC. RHYTHMS NETCONNECTIONS INC.
------------------------ --------------------------
Signature Signature
Xxxxx Xxxxxxx Xxxxxx Xxxxxx
------------------------ --------------------------
Name (Type or Print) Name (Type or Print)
Executive Vice President, Technical Operations
------------------------
And Chief Technology Officer Area Vice President
------------------------ --------------------------
Title Title
------------------------ --------------------------
Date Date
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* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
FINAL CONTRACT 12-31-99
EXHIBIT A: RHYTHMS PRODUCTS AND PRICING, OTHER FEES AND CHARGES
I. ESS PRICING (STANDARD MONTHLY RECURRING AND INSTALLATION CHARGES)
The Monthly Recurring Charges set forth herein shall encompass the
following functions: DSL Connectivity, Access to the Networks, an average of 45
MB egress for each PharmCo, Network Management, Enterprise class Internet
Access, Computer Installation Services and Rhythms provision of full-time
Project Management. Based upon Company's satisfaction of the Ramp Commitment in
accordance with Section 1.3 of the Agreement, the Monthly Recurring Charges for
ESS service shall be **** per Doctor or remote end-user endpoint per month.
The Monthly Recurring Charges assumes normal and customary Egress
Connections by PharmCos located within the continental United States. If and to
the extent that special circumstances and/or extraordinary measures must be
undertaken, or excessive costs must be incurred, in order to establish the level
of Egress Connection to any such PharmCo or Rhythms is requested to provision
connectivity or Egress Connections for other than Doctors or PharmCos, Rhythms
reserves the right to decline to provide such connectivity or Egress Connections
if Company does not agree to pay to Rhythms the appropriate installation and/or
monthly recurring charges to compensate Rhythms for such special circumstances,
additional measures or excessive costs or such additional connectivity or Egress
Connections.
Company shall be entitled to purchase additional capacity for its
Networks at an additional charge of **** for each 1kb/s of backbone bandwidth
measured at the point of egress.
Company shall have the option to require Rhythms to manage the Internet
access service to prove acceptable performance for Doctor-to-Doctor video
transmissions at an additional charge of **** per Doctor per month; provided,
however, that such Internet access management shall apply to all Doctors within
the installed base and all new Doctors subscribing for ESS after Company's
exercise of such option.
The installation charge for completing the inst shall be a one-time
charge of **** (except for special access strategies or other special
circumstances in establishing such connectivity, the estimated costs of which
will be reviewed with Company prior to taking any such action in accordance with
Section 2.2 of the Agreement).
II. EGRESS CONNECTIONS
The following shall be the pricing applicable to any and all Egress
Connections ordered by the Company for any person (other than the first twelve
Egress Connections ordered for PharmCos for each Network), and the amounts set
forth herein shall be used for purposes of determining any credits due under the
Service Level Agreement with respect to any failure of an Egress Connection that
may qualify for a credit thereunder.
EGRESS INSTALLATION 12
CONNECTIVITY OPTIONS MONTHLY CHARGES INSTALLATION CHARGES MONTH PAYMENT OPTION
-------------------- --------------- -------------------- --------------------
DS1 Circuit **** **** ****
----------------------- ------ ------ ------
DS3 Circuit **** **** ****
----------------------- ------ ------ ------
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* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
FINAL CONTRACT 12-31-99
The foregoing monthly and installation charges shall be applicable for each
Egress Connection ordered by Company to provide back-up Egress Connections for
the PharmCos, Company or any of Company's Permitted Subcontractors.
III. SCHEDULE OF CANCELLATION AND OTHER FEES
A. EARLY TERMINATION
1. ESS SERVICES:
If Company cancels an Order for an ESS Service prior to installation for
any reason other than a failure by Rhythms to provide an ESS Service at
transmission speeds at least equivalent to those included in the Minimum
Expected Service Availability, a charge of **** will be assessed against
the Company and payable to Rhythms. Company will be provided a grace period
of 30 days after the order is placed with Rhythms to cancel an ESS Service
without a penalty, as long as such cancellation is received by Rhythms at
least 30 days prior to the planned installation date of the ESS Service and
it can be shown that no third party costs have been incurred by Rhythms in
connection with the actual provisioning of such ordered ESS Service. .
If an ESS Service is disconnected prior to the expiration of the term for
that ESS Service, a charge of **** will be assessed against Company for
orders cancelled between the service initiation day and the end of the
twelfth (12th) month, a charge of **** will be assessed against Company for
orders cancelled thereafter and prior to the last day of the twenty seventh
(27th) month , and such early termination charges will be payable to
Rhythms on or prior to the fifteenth (15th) day after the end of the
calendar quarter in which such cancellations occurred; provided, however,
that Company shall not be charged for any early termination of ESS Service
occurring in any calendar quarter unless early terminations of ESS Service
in such calendar quarter exceed five percent (5%) of total newly completed
installations of ESS Service occurring in such calendar quarter (such 5%
excused early terminations to be determined on a first-to-occur in the
quarter basis). There will be no cancellation penalty for an ESS Service
cancelled after the last day of the twenty seventh (27th) month of such
service.
2. EGRESS CONNECTIONS:
If Company cancels an Order for an Egress Connection prior to installation
of the ordered Egress Connection, a charge of **** of the full installation
charge for that Egress Connection will be assessed against Company and
payable to Rhythms.
If Company cancels an Egress Connection after installation of the Egress
Connection and prior to completion of the applicable contracted term, a
charge of **** for a DS-1 early termination and **** for a DS-3 early
termination, as the case may be, will be assessed against Company and
payable to Rhythms.
B. OTHER FEES AND CHARGES
1. LATE CANCELLATION, NO SHOW AND REDISPATCH:
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* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
FINAL CONTRACT 12-31-99
If an installation appointment is cancelled after 12:00
noon (local time) on the business day preceding the
scheduled installation date, or if the Company or any of
its individual end users are not available at the
scheduled time and date to permit installation to proceed
as scheduled, a **** charge will be assessed against
Company and payable to Rhythms. If it is determined by
Rhythms that a Redispatch is necessary due to problems
caused by Company or any of its individual end users, a
**** charge will be assessed to Company and payable to
Rhythms.
The Company will not be charged for cancellations and
rescheduling of appointments unless cancellations exceed
**** of their total installations during any quarterly
period.
2. EGRESS MOVE:
Charges will be supplied upon request. (Allow 30 days for
receipt of a firm quote).
3. INTRA-MARKET REMOTE ACCESS ENDPOINT MOVE:
No cancellation charge will apply to a Company when an
individual remote access endpoint moves within a
Metropolitan Market. However, a **** charge for
re-installation and related costs will be assessed against
Company and payable to Rhythms with respect to an
intra-Metropolitan Market move. The term of the ESS
Service at the new location will be for at least the
balance of the remaining term of the disconnected circuit
(but in any event no less than 12 months) from the date
that re-installation is completed at the new location.
4. STANDARD INSIDE WIRING:
This is included in the charges for a normal installation.
Normal or standard inside wiring shall include up to 100'
of wiring and installation of one customary RJ11 Xxxx or
Biscuit Xxxx (according to the Company's preference) in an
accessible location situated in a standard, two-story
building.
5. ORDER NON-ACCEPTANCE FEE:
A full installation charge and, if a Rhythms Installer
must visit the Company or any of its individual remote
access endpoints premises in connection with the
deactivation, an equivalent deactivation charge for each
such additional visit will be assessed against the Company
and payable to Rhythms for each.
6. SERVICE CHANGE FEE:
A **** charge will be assessed against the Company
whenever a change of service (upgrade or downgrade) is
made within a technology and no corresponding change is
required to the Equipment, unless the duration of any
change of service shall be for at least a one-month
period. When a Rhythms Installer is required to go to the
Company or any of its individual remote access endpoints
premises to effect any change in services or Equipment, a
full installation charge will be assessed against Company
and payable to Rhythms in addition to any other applicable
charges. If any downgrade of an ESS Service occurs within
the first six months of its initial service period, the
net difference between any promotional discounts existing
at the time of the original Order for the initial ESS
Service and the downgrade will be recaptured and shall be
assessed against the Company and payable to Rhythms.
7. BILLABLE DISPATCH OR REPAIR FEE:
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* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
FINAL CONTRACT 12-31-99
Charges will be assessed against Company for any instance
a Technical Representative is dispatched to Company's site
to resolve any service-related problem that is not caused
by the Rhythms ESS Service. No charge will be assessed if
the service-related problem is determined to be caused by
the Rhythms ESS Service. If Company requests any repair or
maintenance services relating to a router, inside wiring,
or other service problem and Rhythms agrees to provide
such repair or maintenance services, Company shall pay
Rhythms for such services at the rates set forth in this
Paragraph (7).
Time and Materials at the following rates:
Dispatch Fee ****
During Normal Hours (7AM to
6PM local time):
First Hour/Minimum Charge ****
Each Additional 15 Minutes ****
Outside Normal Hours:
First Hour/ Minimum Charge ****
Each Additional 15 Minutes ****
IV. Pricing protections
During the term of this Agreement, Rhythms shall not offer to any
person that provides videoconferencing between Doctors and PharmCos in direct
competition with Company (a "Company Competitor") an ESS service offering that
is identical to the ESS service being provided to Company pursuant to this
Agreement at pricing that is equal to or less than the prices then paid by
Company for the ESS service unless such Company Competitor agrees to equal or
higher order volume commitments than those provided by Company in this
Agreement.
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FINAL CONTRACT 12-31-99
EXHIBIT B: RHYTHMS ENTERPRISE SERVICE LEVEL AGREEMENT
NETWORK AVAILABILITY
Rhythms' target for Network Availability is an average of 99.9% per month for
the Company's circuits.
Network Availability is defined as:
NETWORK (TOTAL NUMBER CIRCUITS* TOTAL MINUTES IN GIVEN MONTH) - (TOTAL MINUTES CIRCUIT OUTAGES IN GIVEN MONTH)
------------------------------------------------------------------------------------------------------
Availability = Total Number Circuits* Total Minutes In Given Month
Network Availability for an end-user circuit is measured the Rhythms provided
Customer Premises Equipment (CPE) at the end-user's premises to the Company's
port on the Rhythms switch or router at the Rhythms Metro Service Center (RMSC),
excluding inside wiring at the end-user's premises. Network Availability for a
Rhythms provided Interconnect circuit is measured from the minimum point of
entry (MPOE) at the Company's premises to the Company's port on the Rhythms
switch or router at the RMSC.
Total minutes in outage in any given month will be calculated commencing on the
date and time Rhythms or the Company opens a trouble ticket with Rhythms, and
ending with confirmation to the Company or the Company's end-user from Rhythms
that Network Availability has been restored. Rhythms scheduled outages and
Company outages, either scheduled or unscheduled, will not be considered in the
total minutes of outage equation.
Where the average 99.9% network availability target is not met, a penalty equal
to 10% of the monthly recurring service charge of the affected xDSL, XX0, XxXX0
or DS3 service charge will be credited to the Company.
Where an average of 99.5% network availability is not met, a penalty equal to
30% of the monthly recurring service charge of the affected xDSL, XX0, XxXX0 or
DS3 service charge will be credited to the Company.
ONE-WAY NETWORK DELAY
Rhythms commits to an average one-way network delay summarized in table 1 below.
One-way delay is defined as the time it takes a 64 byte packet originating over
an xDSL or DS-1 end-user circuit to traverse from a computer directly attached,
on a dedicated segment, to the Rhythms provided CPE to the Company's port on the
switch or router at the RMSC; or the time it takes to traverse from the input of
the Company's port on the switch or router at the RMSC to a computer directly
attached, on a dedicated segment, to the Rhythms provided CPE. This delay
measurement includes the serialization delay on the interface of the directly
attached computer that connects to the Rhythms provided CPE and includes all
network components up to the Company's port on the switch or router in the RMSC.
The Average One-Way Delay with WAN Services column in table 1 is applicable if
the Rhythms' wide area ATM network is part of the product selected. The wide
area network is used if the Company's port on the ATM switch is in a different
RMSC from the RMSC where the DSL line is terminated. Otherwise the Average
One-Way Delay-Single RMSC column in table 1 is applicable.
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FINAL CONTRACT 12-31-99
DSL TECHNOLOGY AVERAGE ONE-WAY DELAY - AVERAGE ONE-WAY DELAY WITH WAN
SINGLE RMSC SERVICES
------------------------------------------------ ----------------------------------- ---------------------------------
RADSL (7x1 Mbps
to 1 x 1 Mbps) 13 ms 73 ms
------------------------------------------------ ----------------------------------- ---------------------------------
RADSL (768 kbps
and below) 18 ms 78 ms
------------------------------------------------ ----------------------------------- ---------------------------------
SDSL 15ms 75ms
------------------------------------------------ ----------------------------------- ---------------------------------
IDSL 20ms 80ms
------------------------------------------------ ----------------------------------- ---------------------------------
DS-1 (end-user circuit) 13 ms 73 ms
------------------------------------------------ ----------------------------------- ---------------------------------
TABLE 1
The Company's Network Management Center (NMC) must perform the delay measurement
using the method described below:
- The Company's Network Management Center (NMC) initiates a PING test to the
end-user's directly attached computer. This measurement is the NMC to
end-user delay.
- Secondly, the Company's NMC initiates a PING test to a router that is
located within the RMSC. This second measurement is the NMC to Interconnect
delay.
The One-way Network Delay is calculated as follows:
(NMC to end-user Delay - NMC to Interconnect Delay)
---------------------------------------------------
One-way Network Delay = 2
The Network Delay test shall consist of a series of 10 such measurements
performed twice daily at four-hour intervals for five consecutive days. The
average one-way network delay is then calculated as the mathematical average of
all measurements over the five-day period. If the Company suspects a delay
problem the Company shall open a trouble ticket with Rhythms. After notifying
Rhythms, Rhythms and the Company shall perform joint testing to identify the
problem.
If non-compliance with the average one-way network delay is verified, a penalty
equal to 10% o the Company. of the monthly recurring service charge of the
affected xDSL or DS-1 end-user circuit will be credited to the Company.
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FINAL CONTRACT 12-31-99
[Figure 1 Data Network Delay Measurement]
[GRAPHIC OMITTED]
DATA DELIVERY
As a commitment to prevent congestion, Rhythms will guarantee 99.9% data
delivery over the Rhythms network.
The Company will open a trouble ticket when Data Delivery rate is in questions.
For each circuit whose monthly average does not equal or exceed the 99.9%
target, a penalty equal to 10% of the monthly recurring service charge of the
affected xDSL or DS-1 end user circuit will be credited to the Company.
MEAN RESPONSE TIME
Rhythms commits itself to providing the best customer care experience in the
telecommunications industry. To that end, Rhythms promises to answer the phone
within 20 seconds of the first ring, and a customer will be on hold no longer
than 30 seconds.
MEAN TIME TO RESTORE SERVICE
Rhythms is committed to restoring service within certain periods of time based
on the severity of the problem in addition to whether single or multiple clients
are affected. Rhythms manages to these restoration goals and targets restoration
of services within the following time frames:
END-USER xDSL OR DS1 CIRCUIT:
- End-user Circuit is defined as the Rhythms provided CPE and the circuit
from the Network Interface Device (NID) or MPOE at the end-user's
premises to the Company's port on the Rhythms switch or router at the
RMSC.
- Time to repair for all submitted Company Trouble Tickets shall be 4
hours averaged on a monthly basis for all of the Company's End-User
Circuits.
- If the average time to repair circuits is in excess of 4 hours, a
penalty equal to 10% of the monthly recurring service charge of each
xDSL or DS-1 End-user Circuit that has been affected by an outage will
be credited to the Company.
- If the average time to repair circuits is in excess of 24 hours, a
penalty equal to 30% of the monthly recurring service charge of each
xDSL or DS-1 End-user Circuit that has been affected by an outage will
be credited to the Company.
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FINAL CONTRACT 00-00-00
XXXXXXXXXXXX XXXXXXX:
- The Company's Interconnect Circuit is defined as the Rhythms-provided
circuit from the Company's port on the Rhythms switch or router in the
RMSC to Rhythms' point of demarcation at the Company premise, up to but
not including the Company-owned router, switch or other equipment.
- Rhythms will manage the local loop vendor (or Incumbent Local Exchange
Carrier) on behalf of the Company for any repairs or problems related
to Rhythms provided Interconnect Circuits.
- If the average time to repair circuits is in excess of 4 hours, a
penalty equal to 10% of the monthly recurring service charge of each
Interconnect Circuit that has been affected by an outage will be
credited to the Company.
- If the average time to repair circuits is in excess of 24 hours, a
penalty equal to 30% of the monthly recurring service charge of each
Interconnect Circuit that has been affected by an outage will be
credited to the Company.
CUSTOMER INSTALLATION PROMISE
Rhythms schedules firm appointments for installation. A Rhythms Field Service
Technician (FST) will arrive within two hours of the scheduled installation
appointment time. If the Rhythms FST fails to arrive within that time, a penalty
equal to 50% of the installation charges for the affected end-user will be
credited to the Company.
TROUBLE REPORTING
The Company and Rhythms shall determine appropriate personnel authorized to
issue trouble reports under this Agreement Each party shall accept trouble
reports without delay from these authorized personnel whenever, after the
performance of appropriate tests, trouble is located in the facilities or the
ESS services, and shall cause further testing and sectionalization to be done to
determine whether the trouble is located in Rhythms facilities or equipment or
in another source. If such testing is ineffective, each party shall work
together with the other to assist in identifying the location of the trouble.
Such cooperative testing shall normally be limited to continuity testing and
quality testing based upon customary existing industry practices.
Whenever trouble is reported by either party, specific trouble tracking
information shall be exchanged with the other party. To facilitate the exchange
of information, each party shall maintain a trouble log of all trouble reports
occurring with respect to this Agreement. The trouble log shall include the
following information at a minimum:serialization of each trouble report;
37. the nature of the reported trouble;
38. date and time of the trouble report;
39. name and telephone number of the person initially reporting the
trouble;
40. name and telephone number of the person receiving the initial trouble
report;
41. diagnosis of trouble;
42. trouble clearance code;
43. date and time of trouble clearance;
44. name and telephone number of the person reporting the trouble has been
cleared; and
45. name and telephone number of the person receiving the trouble
clearance.
Rhythms and Company shall use their best efforts to maintain complete and
accurate records of all relevant data (including, without limitation, trouble
tickets in each billing cycle) necessary to calculate any appropriate credits
that may become due to Company and to reconcile any disputes arising with
respect to each of such credits, and shall promptly confer and exchange such
trouble ticket information to resolve any questions arising concerning the
validity or amount of any credit allowance due to Company.
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FINAL CONTRACT 12-31-99
GENERAL TERMS
All Network Performance Parameters are based on the assumption that the Company
network is appropriately engineered (e.g., Interconnect Circuits are maintained
within reasonable over-subscription limits). If Rhythms determines that the
Company network is inappropriately configured, no credits will be given.
No credits will be provided under Availability, Network Delay, or Data Delivery
prior to successful completion of installation. Credits must be claimed within
60 calendar days of the date of the reported incident(s). Credits provided by
Rhythms hereunder shall not be cumulative for any single failure or greater than
50% for the monthly charge within any given month and 100% for the installation
charge.
No credits will be granted to the Company for any service interruption or other
transmission problems (including, without limitation, any inability by Rhythms
to maintain 100% service under its Network Availability, Network Delay, and Data
Delivery commitments contained herein) which are caused by or contributed to (a)
by the Company, (b) by any third party (including the Company and the Company's
end-users), (c) by atmospheric or environmental conditions, which could not be
reasonably foreseen or controlled (d) by any Act of God or natural disaster, or
(e) by any person who is not controlled by, or under common control with,
Rhythms. Rhythms will nevertheless use its reasonable efforts to seek a prompt
resumption of service and/or resolution of transmission problems in
circumstances where such efforts have a reasonable likelihood of achieving those
results promptly.
If there is any month in which you believe our service has not delivered the
performance that we promised you, please notify us at 1-800-RHYTHMS (749-8467).
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FINAL XXXXXXXX 00-00-00
XXXXXXX X: SPECIAL PROVISIONS
I. TERM OF AGREEMENT
This Agreement shall have an Initial Term of three (3) years.
II. SPECIAL ARRANGEMENTS: ISDN TRANSITION PROGRAM
On or prior to the Commencement Date, Rhythms shall establish a Five
Hundred Thousand Dollar ($500,000) loan to the Company upon the terms and
subject to the conditions set forth herein (the "Loan"). The Loan shall have a
three-year term, shall commence on the Commencement Date, and shall bear
interest at the rate of 12.25% annually. The terms of such Loan shall be
evidenced by a promissory note issued by the Company and payable to Rhythms and
which shall be in form and substance satisfactory to Rhythms and its legal
counsel.
The entire proceeds of the Loan shall be deposited by or on behalf of
Company in an escrow fund (the "Escrow Fund") with an accredited financial
institution reasonably satisfactory to Rhythms and Company (the "Escrow Agent"),
and the Escrow Fund shall be established upon terms and conditions in an
agreement which shall be mutually satisfactory to Company, Rhythms and Escrow
Agent. Interest paid upon the Escrow Fund shall, upon receipt, become part of
the Escrow Fund. Concurrently with the establishment of the Escrow Fund, Rhythms
shall have a senior secured and perfected security interest in the Escrow Fund
which shall be senior to any other creditor of Company, and Company shall
execute and deliver to Rhythms all agreements, certificates and other
documentation or instruments as Rhythms or its legal counsel may reasonable
request in order to establish such senior, perfected security interest and
otherwise assure its interests in the Escrow Fund. Any and all fees and
administrative charges due to the Escrow Agent with respect to the Escrow Fund
shall be paid by Company. The Escrow Fund shall terminate on the third
anniversary of the Commencement Date (or such earlier date as the Agreement
shall be terminated as provided below) (the "Expiration Date") at 12:00 p.m.
(MST) (the "Expiration Time"), and any funds remaining in the Escrow Fund shall
be delivered to Rhythms (the "Remaining Escrow Funds")
The Escrow Fund shall be used solely for the purpose of satisfying
Company's obligations to Rhythms with respect to the installation charges
arising in connection with the conversion of Doctors on the "iPhysician Net"
network on and as of the Commencement Date (the "ISDN Doctors") to obtaining ESS
pursuant to the terms of this Agreement. Company shall provide Rhythms with
access to all information with respect to the ISDN Doctors, and Rhythms shall
determine, in its sole discretion, the ISDN Doctors that are the best candidates
for conversion to ESS and the target dates for accomplishing any such
conversion. Company and Rhythms shall cooperate in maximizing the number of ISDN
Doctors that can be reasonably converted to ESS . With respect to the
installation charge due from Company to Rhythms upon the completion of an
installation of ESS at an ISDN Doctor's location, Company shall be entitled to
disburse to Rhythms (a) $99.95 of such installation charge from the Escrow Fund
with respect to the first 1,600 ISDN Doctors so converted, and (b) $25.00 of
such installation charge from the Escrow Fund with respect to each ISDN Doctor
so converted after completion of the first 1,600 conversions; provided, however,
that the $25.00 disbursement shall be limited to first 13,600 ISDN Doctors
converted who qualify for such $25.00 disbursement from the Escrow Fund.
Disbursements from the Escrow Fund shall continue until the Escrow Fund is fully
depleted.
The principal of, and accrued interest on, the Loan shall be due and
payable by Company to Rhythms, and shall be repaid to Rhythms by Company, at the
Expiration Time on the Expiration Date in one lump-sum payment (collectively,
the "Repayment Amount"); provided, however, that:
(a) if Company shall have satisfied its Ramp Commitment and shall
have converted 15,200 ISDN Doctors to ESS service on or prior
to the Expiration Date, the Remaining Escrow
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FINAL CONTRACT 12-31-99
Funds shall be remitted to Rhythms and the Repayment Amount
shall be forgiven in its entirety by Rhythms and the Loan
shall be extinguished and considered paid in full;
(b) if Company shall have satisfied its Ramp Commitment but shall
have converted less than 15,200 ISDN Doctors to ESS service by
the Expiration Date, Company shall remit to Rhythms the
Remaining Escrow Funds and accrued interest on the Loan to
Rhythms in full payment of the Loan and the balance of the
Repayment Amount shall be forgiven; or
(c) if Company shall not have satisfied its Ramp Commitment on or
prior to the Expiration Date, the Remaining Escrow Funds shall
be delivered to Rhythms and the Repayment Amount (as decreased
by the amount of the Remaining Escrow Funds delivered to
Rhythms) shall be paid by Company to Rhythms on or prior to
the Expiration Time on the Expiration Date.
Notwithstanding the foregoing, if the Agreement shall be terminated at any time
by Rhythms for cause, by Company without cause, or as a result of any Force
Majeure Event or any matter described in Section 8.2(b) of the Agreement
(collectively, a "Termination Event"), then the remaining funds in the Escrow
Fund shall be immediately paid to Rhythms and the principal of, and accrued
interest on, the Loan shall become immediately due and payable to Rhythms (the
"Termination Amount"), and the Company's obligation to pay the Termination
Amount shall be reduced to the extent of any funds received by Rhythms from the
Escrow Fund as a direct result of the Termination Event.
III. Special Arrangements: Co-Branding Arrangements
A. Joint Marketing
1. Each party to the Agreement grants to the other party a non-exclusive right
to use its logo and trade name on such parties corporate marketing materials
after receipt of approval as set forth herein, and such approval will not be
unreasonably withheld. Each party agrees to use its best efforts to jointly
promote and provide co-branding opportunities as mutually agreed upon. A
joint marketing program shall be developed by the parties at least annually
during the term of this Agreement.
Website1. Each party may list the trade name and/or logo of the other on its
respective Website, as a business or alliance partner, in an approved manner as
set forth herein; provided, however, that no such reference shall constitute or
imply that the other party is the agent for, or liable for the obligations of,
the party who's Website has such reference. Each party will facilitate the "hot
link" to the others web destination in the appropriate business or alliance
partner section of their Website, or other locations/sections as mutually agreed
upon.
Notwithstanding the foregoing, neither Rhythms nor Company shall have any right
to use the logo or trade name of the other party hereto in any manner prior to
obtaining the approval of the owner of such logo or trade name (the
"Owner").Such approval will not be unreasonably withheld. The party proposing to
use any such logo or trade name (the "Using Party") shall submit to the Owner,
at least three (3) business days prior to such proposed first use, an exact
copy, illustration or rendition of how such logo or trade name is proposed to be
used and, if such use is approved by the Owner, the Using Party shall have the
right to use such logo or trade name solely as approved by the Owner and any
modifications or additions to the material or manner in which such logo or trade
name is being used by the Using Party shall not be permitted unless such
modifications and/or additions are approved in writing by the Owner after a
further submission by the Using Party. Any such approved use shall terminate
upon the termination of this Agreement or the withdrawal or expiration of such
approval by the Owner, and the Using Party shall cease using such logo or trade
name upon receipt of notification of such termination, expiration or
withdrawal.
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