Exhibit 10.18


 


MAINTENANCE AGREEMENT


 


MAINTENANCE
AGREEMENT (this “Agreement”), dated as of July 23, 2003, made by Universal
Access, Inc., a corporation organized and existing under the laws of the State
of Delaware (the “Company”), and CityNet Telecommunications, Inc., a
corporation organized and existing under the laws of the State of Delaware (the
“Provider”).  All capitalized terms used
herein and not otherwise defined shall have the meaning set forth in the Purchase
Agreement (as defined below).


 


WITNESSETH:


 


WHEREAS, the
Provider and the Company entered into that certain Stock Purchase Agreement
(the “Purchase Agreement”) by and between the Provider and the Company dated as
of April 7, 2003;


 


WHEREAS,
pursuant to the Purchase Agreement, the Provider will transfer the Fiber Ring
Assets to the Company upon the Closing;


 


WHEREAS, as a
condition to the Closing, the Provider and the Company agreed to enter into
this Agreement;


 


NOW,
THEREFORE, in consideration of the mutual agreements set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:


 


SECTION 1                                   TERM
OF AGREEMENT


 


1.1.                              Initial
Term.  This Agreement commences on
the date first above written, and will remain in effect for the period of five
(5) years, except as otherwise provided herein.


 


1.2.                              Extension
of Term.  This Agreement will extend
automatically for monthly periods unless either party to this Agreement
notifies the other party in writing at least thirty (30) days before the
expiration of the then current term.


 


1.3                                 Termination
of Term.  Notwithstanding the foregoing, either party may
terminate this Agreement at any time without liability by providing one hundred
eighty (180) days written notice to the other party.


 


SECTION 2                                 DESCRIPTION
OF SERVICES AND FEES


 


2.1.                              Services.


 


(a) The
Provider or its affiliate will provide the Company, with respect to the Fiber
Ring Assets, all maintenance services (including but not limited to jetwashing
and related ancillary services) required under the Provider’s license
agreements with the municipalities in which the Fiber Ring Assets are located
(each a “City Rights Agreement”), and monitoring, emergency response and
emergency splicing (collectively, the “Services”). If a


 

















 


service call is required to
restore the Fiber Ring Assets to good operating condition, the Company will
notify the Provider promptly after it becomes aware of the service affecting
problem.


 


(b)                                 The
Services shall not include any of the following:


 


(i)                                     remedial
or preventive maintenance service performed outside that expressly defined in
this Section 2.1;


 


(ii)                                  repair
of damage or loss resulting from accident, neglect, misuse or abuse or causes
other than ordinary use by the Company for the purpose for which any of the
Fiber Ring Assets was designed (collectively, “Repairs”); provided that
Services do include Repairs if the damage or loss is caused by the Provider;


 


(iii)                               making
specification or field engineering changes;


 


(iv)                              unless
authorized in writing by the Provider, services resulting from, or which are
impractical for the Provider to render because of, any adjustment, repair,
maintenance, modification or alteration of the Fiber Ring Assets by any person
other than the Provider; and


 


(v)                                 service
calls required to restore any of the Fiber Ring Assets to good operating
condition, if the Company fails to notify the Provider of a need for service
within one (1) day of the Company’s knowledge of such need, and such delay has
made the provision of the Services more costly.


 


2.2.                              Availability
of the Services and Repairs.  The
Provider will be available to provide the Services 24 hours per day, seven (7)
days per week.  Periodically during the
term of this Agreement, the Provider will provide to the Company contact
information and reasonable protocols to be followed in order to schedule
performance of the Services.


 


2.3.                              Fees.  In each of the first twelve months of this
Agreement, the Company shall pay to the Provider $40,000 per month in exchange
for the Services (the “Service Fee”). 
Upon each anniversary of the commencement of this Agreement, the Service
Fee shall be increased by a percentage that reflects the actual increases in
the Provider’s cost of providing the Services, if any. All materials and labor
required to provide any Repairs or any other services or other work not
specified in Section 2.1(a) hereof requested by the Company shall be billed to
the Company, in addition to the Service Fee as adjusted, at a rate equal to the
Provider’s actual cost plus 10% service/overhead fee.


 


SECTION 3                                 COVENANTS
OF THE COMPANY


 


As a condition
to receiving the Services under this Agreement, the Company hereby agrees and
covenants as follows:


 

















 


3.1.                              Access
to the Fiber Ring Assets.  The
Company will provide full and free access to the equipment in which to perform
service on a 24/7 basis.


 


3.2.                              Operation
of the Fiber Ring Assets.  The
Company shall take any and all actions, and refrain from taking any action,
within the control of the Company, to ensure that the Provider remains in
compliance with, and does not breach or violate the terms of, a City Rights
Agreement or any other agreement related to the Fiber Ring Assets to which the
Provider is a party.  This obligation
shall include operating the Fiber Ring Assets in such a manner, and performing
certain of the obligations of the operator of the Fiber Ring Assets, so as to
remain in compliance with such agreements. 
The Company acknowledges that it has received and reviewed each of the
City Rights Agreements set forth on Schedule 3.2 hereto.  The obligations under this Section 3.2 shall
survive termination of this Agreement for the life of any applicable City
Rights Agreement or similar license.  In
any sale of a fiber ring, any transferee must agree to assume these obligations
from Buyer.


 


3.3.                              Transfer
of the Fiber Ring Assets.  The
Company shall not sell, transfer or otherwise attempt to convey or dispose of
any part of the Fiber Ring Assets, other than sales and leases of capacity or
of individual fiber strands in the ordinary and usual course of business unless
the Provider consents to such transaction, which consent will not be withheld
if, (a) the proposed transferee consents in writing to the assumption of all
obligations of the Company under this Agreement, including those obligations to
be undertaken under other agreements pursuant to Section 3.3, and (b) all
governmental approvals (under City Rights Agreements or otherwise) have been
obtained, with the Provider having the right (if it elects) to coordinate such
efforts if it is the counterparty under such agreements requiring approval
(with the Company to pay the reasonable costs of doing so).


 


SECTION 4                                 COVENANTS
OF THE PROVIDER


 


As a condition
to receiving the Service Fee and any other fees payable to the Provider under
this Agreement, the Company hereby agrees and covenants as follows:


 


4.1.                              Commercially
Reasonable Efforts.  The Provider
shall undertake commercially reasonable efforts to provide the Services and
Repairs. The Provider shall provide the Services and Repairs in a professional
and workmanlike manner.


 


4.2.                              Access
to Information.  The Provider shall
make available any and all information held by it that is necessary and
reasonable for the Company to fulfill its obligations under Section 3.3 of this
Agreement.


 


4.3                                 Maintenance
of Insurance.  The Provider will
obtain and maintain appropriate liability insurance in an amount of not less
than $1,000,000 combined single limit for accidents or occurrences which cause
bodily injury, death or property damage related to the performance of the
Services.   The insurance policy willname the Company as an additional insured. 
The Provider will provide the Company with a certificate of insurance
issued to evidence such coverage.  Such
certificate will provide that there shall be no cancellation, non-renewal, or
modification of such coverage without thirty days’ prior written notice to the
Company.


 

















 


4.4                                 Operation
of the Fiber Ring Assets.  The
Provider shall take any and all actions, and refrain from taking any action,
within the control of the Provider, to ensure that the Company remains in
compliance with, and does not breach or violate the terms of a City Rights
Agreement.


 


SECTION 5                                 MISCELLANEOUS


 


5.1.                                Excused
Non-Performance.  The Provider shall
not be liable nor deemed to be in default for any delay or failure in
performance under this Agreement resulting, directly or indirectly, from causes
beyond the reasonable control of the Provider, provided that the Provider shall
refund to the Company a pro rata portion of the Service Fee for any period in
excess of two (2) weeks during which the Provider fails to or is unable for any
reason to provide the Services or Repairs called for under this Agreement.  Service provided under this Agreement does not
assure uninterrupted operation of equipment.


 


5.2.                              Limited
Warranty.  The Provider shall
provide maintenance under this Agreement for the fixed rate without regard to
the number of legitimate service requests by the Company.


 


5.3                                 Limitation
of Liability.  EXCEPT AS STATED
ABOVE, THE PROVIDER’S OBLIGATIONS UNDER THIS AGREEMENT ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESSED OR IMPLIED.  ALL
IMPLIED WARRANTIES ARE LIMITED TO THE DURATION OF THIS AGREEMENT.  A PARTY’S TOTAL LIABILITY TO THE OTHER PARTY
IN CONNECTION WITH THIS AGREEMENT, FOR ANY AND ALL CAUSES OF ACTIONS AND
CLAIMS, INCLUDING, WITHOUT LIMITATION, BREACH OF CONTRACT, BREACH OF WARRANTY,
NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATION AND OTHER TORTS, SHALL BE:


 


(a) FOR BODILY INJURY OR DEATH TO ANY PERSON PROXIMATELY CAUSED BY
A PARTY’S NEGLIGENCE, THE AMOUNT OF DIRECT DAMAGES PROVEN;


 


(b) FOR LOSS OR DAMAGE TO REAL PROPERTY OR TANGIBLE PERSONAL
PROPERTY PROXIMATELY CAUSED BY A PARTY’S NEGLIGENCE, THE AMOUNT OF DIRECT
DAMAGES PROVEN;


 


(c) FOR ANY DAMAGES ARISING OUT OF THE WILLFUL OR INTENTIONAL
MISCONDUCT OF A PARTY, THE AMOUNT OF DIRECT DAMAGES PROVEN;


 


(d) FOR ALL OTHER DAMAGES OTHER THAN THOSE SET FORTH ABOVE AND NOT
EXCLUDED UNDER THIS AGREEMENT, EACH PARTY’S LIABILITY TO THE OTHER PARTY DURING
ANY TWELVE (12) MONTH PERIOD SHALL BE LIMITED TO THE LESSOR OF (i) DIRECT
DAMAGES PROVEN BY THE PARTY, OR (ii) THE AMOUNT PAID BY THE COMPANY TO THE
PROVIDER UNDER THIS AGREEMENT FOR THE TWELVE (12) MONTH PERIOD PRIOR TO THE
CLAIM.


 


The foregoing limitations do
not apply to the Company’s obligation to pay the Service Fees.


 

















 


THE PROVIDER SHALL NOT BE
LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED
TO LOSS OF REVENUES OR LOSS OF PROFIT, ARISING OUT OF THE PROVISION OF THE
SERVICES OR REPAIRS, NOTWITHSTANDING ADVANCE NOTICE FROM THE COMPANY THAT THE
POSSIBILITY OF SUCH DAMAGE OR LOSS EXISTS.


 


5.3.                              Notices.  Any notice, request, demand or other
communication required or permitted hereunder shall be deemed to have been
given if delivered by facsimile transmission, upon receipt, if by hand
delivery, upon receipt, if sent by nationally recognized overnight courier
service, one day after deposit with such, or if sent by registered or certified
mail, upon the sooner of the date on which receipt is acknowledged or the
expiration of three days after deposit in United States post office facilities
properly addressed with postage prepaid. 
All notices to a party will be sent to the addresses set forth below or
to such other address or person as such party may designate by notice to each
other party hereunder:


 


	
  TO THE PROVIDER:

  	
   

  	
  CityNet
  Telecommunications, Inc.

  8405 Colesville Road

  6th Floor

  Silver Spring, Maryland 20910

  Attention:  General Counsel

  Facsimile:  301-608-8121

  
	
   

  	
   

  	
   

  
	
  TO THE COMPANY:

  	
   

  	
  Universal
  Access Global Holdings Inc.

  233 S. Wacker Drive, Suite 600

  Chicago, IL 60606

  Attention:  General Counsel

  Facsimile: 312-660-1290

  



 


If notice is
sent by facsimile transmission, in order to be effective, such notice must also
be sent by one of the other means of delivery identified above.  Any notice given hereunder may be given on
behalf of any party by his counsel or other authorized representatives.


 


5.4.                              Amendments.  Any term, covenant, agreement or condition
of this Agreement may be amended only in a writing signed by the Company and
the Provider.


 


5.5.                              Assignment;
Successors or Assigns.  This
Agreement and the rights and obligations hereunder may be assigned by the
Provider upon written notice to the Company. 
All rights and obligations under this Agreement shall be binding upon
any and all successors or assigns.


 


5.6.                              Survival.  All covenants, representations and
warranties made herein by the Company shall survive and not be waived by the
execution and delivery of this Agreement.


 

















 


5.7.                              Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.  It shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.


 


5.8.                              Headings.  The headings of the sections and subsections
hereof are provided for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.


 


5.9.                              Governing
Law; Submission To Jurisdiction; Venue.


 


(a) THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
CONSTRUED ACCORDING TO AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF
DELAWARE, EXCLUDING ITS CONFLICTS OF LAWS PRINCIPLES TO THE EXTENT SUCH
PRINCIPLES WOULD LEAD TO THE APPLICATION OF A SUBSTANTIVE LAW OTHER THAN THE
LAW OF THE STATE OF DELAWARE.


 


(b) ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF DELAWARE OR IN ANY UNITED STATES DISTRICT COURT SITTING
WITHIN THE STATE OF DELAWARE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE COMPANY AND THE PROVIDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
COMPANY AND THE PROVIDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT. EACH OF THE
COMPANY AND THE PROVIDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, THAT MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.


 


(c) EACH
PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.


 

















 


5.10.                        Severability.  If any provision of this Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and effect
and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.


 


5.11.                        Entirety.  This Agreement represents the entire
agreement of the parties hereto, and supersedes all prior agreements and
understandings, oral or written, if any, relating to the transactions
contemplated herein.


 

















 


IN WITNESS
WHEREOF, the parties hereto have caused this Maintenance Agreement to be
executed by their duly elected officers duly authorized as of the date first
above written.


 


 


	
   

  	
  UNIVERSAL
  ACCESS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  CITYNET
  TELECOMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
				



 

















 


SCHEDULE 3.2


 


City Rights Agreements


 


(1)                 Access and License Agreement dated
December 8, 2000, between the Consolidated City of Indianapolis, Marion County,
Indiana and the Department of Capital Asset Management (jointly as “Licensor”)
and CityNet Telecommunications, Inc. as “Licensee,” as amended by the Amendment
to the Access and License Agreement dated as of June 25, 2003, by and between
Licensor, Licensee and Universal Access, Inc.


 


(2)                 License Agreement dated November 8,
2000, between the City of Albuquerque, New Mexico and CityNet
Telecommunications, Inc.