Exhibit 10.37
[Certain portions of this exhibit have been
omitted pursuant to Rule 24b-2 and are subject to a confidential
treatment request. Copies of this exhibit containing the omitted
information have been filed separately with the Securities and
Exchange Commission. The omitted portions of this document occur on
the first and second page hereof and are marked with a ***.
]
Bandwidth Redundancy and
Cooperative
Purchasing Agreement
This Bandwidth Redundancy and Cooperative Purchasing Agreement
("Agreement") is entered into as of December 23, 2003 by and
between VitalStream, Inc. ("VitalStream") and InteleNet
Communications, Inc. ("InteleNet")(individually, a "Party", and
collectively, the "Parties").
RECITALS
A. The Parties
wish to achieve greater network redundancy while sharing fixed
costs;
B. The
Parties seek to reduce their own respective bandwidth costs by
combining their purchasing leverage through larger bandwidth
commitments; and
C. The
Parties further seek to achieve additional peering and transport
efficiencies by sharing routing information, and wish to explore
the possibility of achieving other benefits through other joint
business opportunities or exchanges of services.
AGREEMENT
In consideration of the mutual promises and covenants contained
herein, and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as
follows:
1. Peering Parameters
.
1.1 Each
Party shall provision failover capacity of *** by no later than
1/31/04. After that date, each company shall continue to maintain
such provisioned capacity during the term of this Agreement,
subject to quarterly review.
1.2 Each
Party shall initially provide to the other, at no cost, a certain
level of baseline bandwidth, measured at the 95 th
percentile, according to NetFlow, or similar tool (the "Baseline
Bandwidth"). Initially, the Baseline Bandwidth shall be ***. The
objective of the Baseline Bandwidth value is for each company to
take advantage of the other's upstream providers but to incur
little or no additional charges unless a failover situation
occurs.
1.3 There
shall be no charge for imbalanced bandwidth below 10% of swapped
amount (again, measured at the 95 th percentile).
1.4 If
traffic is imbalanced by more than ***, the Party that is using
less bandwidth may bill the Party that is using more bandwidth at
the then in effect Overage Rate from the first mbps beyond the ***
imbalance, provided such Party is using at least the Baseline
Bandwidth. Initially, the Overage Rate shall be ***, which may be
adjusted by mutual consent quarterly as cost structures change as
provided herein.
1.5 Each
Party shall measure the bandwidth across the peer according to the
following methodology: Each Party shall determine its traffic by
measuring the outbound traffic at the 95 th percentile
on its side of the peer connection, including the other Party's
inbound traffic.
1.6 The
technical specifications shall be by mutual consent. Current
proposed design is for an *** connection from an InteleNet router
in Irvine to an InteleNet router in VitalStream's LA facility, with
dual gigabit Ethernet cross connections to VitalStream's network.
InteleNet may acquire other peering connections from this equipment
base.
2. Operational
Procedures . The parties shall consult with each other upon
implementation to establish and maintain operational procedures,
such as emergency contact list hierarchy, reporting contacts and
entry into the other company's business continuance plans.
3. Quarterly
Review . Each quarter during the term of this Agreement,
the parties shall meet to discuss mutually acceptable adjustments
to the following variable inputs for the purpose of optimizing the
peer relationship for then current business conditions:
Failover Capacity
(***); The Baseline Bandwidth level (***); The Overage Rate for
bandwidth above the then in effect Baseline Bandwidth level (***);
The methodology for measuring bandwidth across the peer (per
Section 1.5 initially); Which peers each side would maintain, with
the intent of maximizing the route diversity of the partnership
(VitalStream: WilTel, Verio initially; InteleNet: Teleglobe, Level
3 initially); Operational procedures and coordination; and
Equipment, space, power, cross connects and other operational
exchanges as part of this agreement; Acceptable Use Policy issues
according to each Party's AUP policy
With the exception of each Party's ability to choose its
upstream bandwidth suppliers without restriction by this Agreement,
any variable on which there is not mutual agreement to adjust at a
quarterly review shall remain at its previously agreed-upon
level.
4. Circuit Cost .
InteleNet shall provision a point-to-point *** and shall invoice
VitalStream monthly for half that cost, the invoices to VitalStream
to commence upon the later to occur of: the one-month period
beginning January 1, 2004 and the full or partial calendar month
period beginning upon the date of actual installation of the ***.
InteleNet represents and warrants that the full cost of the
InteleNet circuit is estimated to be *** per month; therefore
VitalStream's monthly circuit charge shall be *** of the final
amount, estimated to be ***. There shall be no overlap charges for
any circuit upgrades that the parties mutually decide to do in the
future to the circuit. Each Party shall allow the other Party to
place its router (and related equipment required for uplinking) in
the other Party's facility at no charge for power and up to one
rack of space. Other operational exchanges will be discussed and
approved by
