Document:

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                                 Exhibit 10.20

                            GTE TELECOM INCORPORATED
                               CAPACITY AGREEMENT

This CAPACITY AGREEMENT is made and entered into as of August 20, 1999, by and
between GTE Telecom Incorporated (hereinafter referred to as "TELECOM" or
Party), a Delaware corporation with principal offices at 201 N. Franklin Street,
Suite 2400, Tampa, Florida 33602; and Universal Access, Inc. (hereinafter
referred to as "CUSTOMER" or Party), with offices at 100 N. Riverside Plaza,
Suite 2200, Chicago, Illinois 60606 for the provision of capacity and related
ancillary telecommunications services (hereinafter referred to as "Services") as
described herein and accepted by CUSTOMER under this Agreement, subject to the
terms and conditions contained herein. This Capacity Agreement together with any
Capacity Descriptions (as described in Section 1 below) accepted by TELECOM
pursuant to the terms hereof shall be referred to collectively as the
"Agreement".

1. SERVICE REQUESTS/CAPACITY DESCRIPTIONS: Requests for Services to be provided
hereunder shall be issued by CUSTOMER from time to time on TELECOM Capacity
Description Form(s) (hereinafter referred to as a "CD", a copy of which is
attached hereto and made a part hereof as Exhibit 1). Each CD shall reference
this Capacity Agreement by CA Number. Such CDs shall be effective when accepted
in writing by TELECOM and shall become part of this Agreement to the extent that
they specify the type of Service to be provided, quantity of circuits,
originating and terminating cities, requested service date, Service Term,
recurring and non-recurring charges for provision of Service, and other
information necessary for TELECOM to provide Service to the CUSTOMER. No action
by TELECOM (including, without limitation, provision of Service to CUSTOMER
pursuant to such CD) shall be construed as binding or estopping TELECOM with
respect to such term or condition, unless the CD containing said specific term
or condition has been duly executed by an authorized representative of TELECOM.

2. EFFECTIVE DATE AND APPLICATION OF THIS AGREEMENT: This Agreement shall be
effective between the parties as of the date first written above. The applicable
Rates and Charges are set forth in Exhibit 2 attached hereto and made a part
hereof. This Agreement shall apply exclusively to the Service provided to
CUSTOMER pursuant to the CD(s) identified with this Agreement and accepted by
TELECOM, for the Service Term stated therein and any automatic extensions
thereof. Services are provided subject to availability and TELECOM reserves the
right not to accept a CD under this Agreement at any time.

3. SERVICE TERM: (a) After a CD is accepted by TELECOM, a Firm Order
Confirmation Date ("FOC" Date) will be scheduled for Service installation. The
Service Term for Services subject to recurring charges and described in a CD
shall commence on the Firm Order Confirmation Date or the date upon which the
Service actually becomes available (the "In Service" Date), in conformity with
technical standards, whichever is later. The Service being provided hereunder
will be released to CUSTOMER for testing for seventy-two (72) hours prior to the
In Service Date.

 (b) TELECOM will make reasonable efforts to meet the CUSTOMER requested In
Service Date, however, the inability of TELECOM to install Service on or before
the date requested shall not be a Default under this Agreement. Except for any
installation delays caused by those events described in Section 12 below, in the
event Service installation is delayed for ninety (90) days beyond the CUSTOMER
requested In Service Date with respect to each Service ordered, then CUSTOMER's
sole remedy shall be cancellation of the CD which pertains to such Service upon
ten (10) calendar days prior written notice to TELECOM. Cancellation charges
described in Section 11 below shall not apply to such cancellation.

 (c) Upon expiration of the Service Term set forth in the CD, if CUSTOMER is not
then in Default under this Agreement, Service will automatically be extended for
continuing thirty (30) day periods and may be canceled by either party upon
thirty (30) calendar days prior written notice. Unless otherwise agreed to in
writing, the charges for Service during any such extension shall be the then
current TELECOM month to month rate for such Services.

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 (d) Price Protection Commencing [***] months after the effective date of the
Agreement and continuing thereafter semi-annually at the semi-annual date of the
Agreement, CUSTOMER may request TELECOM to review the prices contained in the
CD(s) entered into between the parties if the CUSTOMER has received an offer
from a qualified vendor (i.e., a vendor that is suitable to the CUSTOMER that
has obtained any required licenses, approvals or other authorizations) for all
Services provided hereunder which reduces the total prices by [***] or greater.
TELECOM reserves the right to review such an offer, subject to confidentiality
or non-disclosure obligations imposed on CUSTOMER in connection therewith, and
if warranted, will enter into negotiations with CUSTOMER for a reduction in
price.

4. DESCRIPTION OF SERVICES: As specified in the CD accepted by TELECOM
hereunder, TELECOM will provide to CUSTOMER the following Services:

 (a)    Capacity Service through the installation and operation of either owned
or leased telecommunications facilities between TELECOM designated termination
points in accordance with the Service Level Objectives set forth in Exhibit 3
(hereinafter "Capacity"), and

 (b) Ancillary Services Other Services, available on an optional basis, as
may be requested by the CUSTOMER (hereinafter referred to "Ancillary Service")
as described in Section 5 below.

5. LOCAL ACCESS/ANCILLARY SERVICES AND CHARGES: (a) Upon CUSTOMER's request,
TELECOM may, at its sole option and when reasonable under the circumstances,
act as agent for the CUSTOMER with responsibility for provisioning and the
initial testing of an interconnection between selected Interexchange Service,
the local exchange carrier or alternate access carriers (collectively "Local
Carriers") and a CUSTOMER designated termination point and/or service. CUSTOMER
shall issue a Letter of Agency authorizing TELECOM to provision such
interconnection on behalf of CUSTOMER. Changes to CUSTOMER for Local Access
Service administered on behalf of CUSTOMER by TELECOM shall be as stated in the
accepted CD.

 (b) TELECOM may also provide Other or Ancillary Services to CUSTOMER, including
but not limited to any one or more of the following:

                (1)   Multiplexing/demultiplexing service ("Muxing");

                (2)   Digital cross-connect service,

                (3)   Extraordinary service under the following circumstances
                      including but not limited to:

                              (i)   CUSTOMER's request to expedite Service
                                    availability to a date earlier than a
                                    previously accepted start date or Firm Order
                                    Confirmation Date;

                              (ii)  Service redesign or other activity
                                    occasioned by receipt of inaccurate
                                    information from CUSTOMER;

                              (iii) Reinstallation services for any suspension
                                    of Service for cause by TELECOM;

                              (iv)  CUSTOMER's request for use of routes or
                                    facilities other than those selected by
                                    TELECOM for provision of the Service;

                              (v)   CUSTOMER'S request for use of rack space and
                                    power in TELECOM facilities;

                              (vi)  Other circumstances in which extraordinary
                                    costs and expenses are generated by CUSTOMER
                                    and reasonably incurred by TELECOM.

 (c) Recurring and non-recurring charges to CUSTOMER for Local Access (including
TELECOM's Coordination Fee) and Ancillary Services shall be established as of
TELECOM's acceptance of the CD relevant thereto.

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*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

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6. CUSTOMER RESPONSIBILITIES: CUSTOMER has sole responsibility for installation,
testing, and operation of facilities, services, and equipment other than those
specifically provided by TELECOM under a duly accepted CD. In no event will the
untimely installation or non-operation of CUSTOMER's facilities, services, and
equipment (including local exchange access and customer premise equipment)
relieve CUSTOMER of its obligation to pay charges for Capacity or Ancillary
Service as of the In Service Date. Notwithstanding the immediately preceding
sentence, CUSTOMER may request one extension of the In Service Date for not more
than thirty (30) calendar days. Such requests for extension of local exchange
access together with the interexchange portion of the Service must be in writing
and must be received by TELECOM at least ten (10) calendar days prior to the
initial FOC Date established by TELECOM. Written requests for extension of the
In Service Date for the interexchange portion only must be and must be received
by TELECOM at least five (5) calendar days prior to the initial FOC Date
established by TELECOM. Any such extension will not relieve CUSTOMER of its
obligations to pay charges for any local access services ordered by TELECOM on
behalf of CUSTOMER as of the FOC Date first established by TELECOM.

7. PAYMENT OF CHARGES: (a) Subject to Section 8 below, all charges for Services
provided by TELECOM pursuant to this Agreement shall be specified in the CD
referred to in this Agreement.

(b) CUSTOMER shall pay each TELECOM invoice for Service in full, without
deduction or offset of any kind, within thirty (30) days after the date of
invoice ("Due Date"); provided however, if CUSTOMER in good faith disputes any
portion of an invoice, it must pay the undisputed amount on or before the Due
Date and provide written notice to TELECOM of the billing dispute within ninety
(90) days thereafter. Such notice must include documentation substantiating the
dispute. CUSTOMER's failure to notify TELECOM of a dispute shall be deemed to be
CUSTOMER's acceptance of such charges. The Parties will make a good faith effort
to resolve billing disputes as expeditiously as possible. If a dispute is
resolved in favor of CUSTOMER, CUSTOMER shall receive a credit on its invoice
within a commercially reasonable period of time for the disputed amount and any
related fees or penalties. All pro-rated monthly recurring charges (i.e.,
charges for monthly Services provided for less than a calendar month),
installation, and other non-recurring charges shall be payable on the Due Date.
All payment shall be made in US dollars. CUSTOMER agrees to timely remit payment
to TELECOM at the remittance address indicated on the TELECOM invoice to
CUSTOMER.

(c) Except for any reasonably disputed amount, in the event CUSTOMER fails to
pay TELECOM's invoice in full or remit payment at the proper address on or
before the Due Date, CUSTOMER shall pay a late fee in an amount equal to one and
one-half percent (1 1/2%) per month of the unpaid balance. The late fee will be
applied for the number of days from the payment Due Date up to and including the
date payment is received by TELECOM. Notwithstanding the foregoing, late fees
shall apply to, but shall not be due and payable for, amounts reasonably
disputed by CUSTOMER provided: (i) CUSTOMER notifies TELECOM of the basis of
such dispute in writing within sixty (60) days after the Due Date and (ii)
negotiates in good faith with TELECOM for the purpose of resolving such dispute.
In the event such dispute is resolved in favor of TELECOM, CUSTOMER will pay to
TELECOM the once disputed amount together with the applicable late fees. In the
event the dispute is resolved in favor of the CUSTOMER, CUSTOMER will receive a
credit for the amounts determined not to be owed together with a credit for the
applicable late fees. The Parties shall use their best efforts to negotiate in
good faith to resolve the disputed invoice within thirty (30) days of CUSTOMER's
written notice of such dispute. If such resolution is not attained or the time
to resolve the dispute is not extended by mutual agreement of the Parties, the
dispute shall be settled by arbitration as set forth below in this Agreement.

(d) TELECOM may, in order to safeguard its interests, require CUSTOMER which has
no credit history with TELECOM or habitually pays late to make a deposit prior
to or any time after the provision of Service to the CUSTOMER to be held by
TELECOM as a guarantee of the payment of the rates and charges. In lieu of such
a deposit, TELECOM may accept an unconditional, irrevocable Letter of Credit in
a form acceptable to TELECOM in an amount required by TELECOM, subject to
increase from time to time as CUSTOMER orders additional circuits hereunder. At
such time as the provision of the Service to CUSTOMER is terminated, the amount
of the deposit will be credited to the CUSTOMER's account and any credit balance
which may remain will be refunded. After the CUSTOMER has established a six (6)
month prompt payment record, such deposit may be refunded or credited to the
CUSTOMER account at any time prior to the termination of the provision of the
Service to CUSTOMER. In the event CUSTOMER pays a deposit as described above,
simple interest at the rate of six percent (6%) will be

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applied to the deposit for the number of days from the date such deposit is
credited to the CUSTOMER'S account or the date the deposit is refunded by
TELECOM.

8. TAXES/ADDITIONAL CHARGES: (a) CUSTOMER acknowledges and understands that all
charges stated in the CD are computed by TELECOM exclusive of any applicable
federal, state, or local use, excise, gross receipts, sales, and privilege
taxes, duties, fees, including but not limited to applicable Universal Service
Fund contributions, or similar liabilities (other than general income or
property taxes), whether charges to or against TELECOM or CUSTOMER because of
the Service furnished by TELECOM ("Additional Charges"), and that such
Additional Charges shall be paid by CUSTOMER in addition to all other charges
provided for herein.

(b) Such taxes, surcharges or fees shall be separately stated on the invoice and
shall be paid directly to TELECOM at the same time as all other charges are due
and payable in accordance with this Agreement. Simultaneous with the signing of
this Agreement, CUSTOMER shall provide TELECOM with a valid Certificate of
Exemption from taxes that would otherwise be paid by CUSTOMER for all foreign,
federal, state, country and local taxes and fees, (if any) or other evidence
reasonably satisfactory to TELECOM that CUSTOMER is not subject to such taxes,
surcharges, or fees. TELECOM will invoice CUSTOMER for taxes that are not
covered by a valid tax exempt certificate properly filed with TELECOM.

9.      EARLY TERMINATION: (a) Either Party may terminate this Agreement if:

                (i)   the other Party ceases doing business as a going concern,
                      makes an assignment for the benefit of creditors, admits
                      in writing to its inability to pay its debts as they
                      become due; or

                (ii)  the other Party files a voluntary petition in bankruptcy,
                      is adjudicated a bankrupt or an insolvent; or

                (iii) the other Party files a petition seeking for itself any
                      reorganization, arrangement, composition, readjustment,
                      liquidation, dissolution or similar arrangement under any
                      present or future statute, law or regulation or files an
                      answer admitting the material allegations of a petition
                      filed against it in any such proceeding; or

                (iv)  the other Party consents or acquiesces in the appointment
                      of a trustee, receiver, or liquidator of it or of all or
                      any substantial part of its assets or properties, or it or
                      its shareholders shall take any action looking to its
                      dissolution or liquidation;

                (v)   the other Party breaches any material provision of this
                      Agreement, other than those related to payment of charges,
                      and fails to cure such breach within thirty (30) calendar
                      days after the receipt of notice thereof ("Default").

(b) Both Parties may terminate this Agreement upon mutual written consent.

10. SUSPENSION OF SERVICE: (a) In the event payment in full is not received from
CUSTOMER on or before the Due Date with respect to any undisputed amounts,
TELECOM shall have the right, after giving CUSTOMER fifteen (15) days written
notice via express courier service or registered mail, to suspend all or any
portion of Service until such time as CUSTOMER has paid in full all charges then
due, including any late fees as specified herein.

(b) Following such payment, TELECOM shall be required to reinstate Service to
CUSTOMER only upon CUSTOMER's provision to TELECOM of satisfactory assurance
(such as a deposit) of CUSTOMER's ability to pay for Service and CUSTOMER's
advance payment of the cost of reinstating Service. If CUSTOMER fails to make
such payment by a date determined by and acceptable to TELECOM, CUSTOMER will be
deemed to have canceled the suspended Service effective the date of the
suspension. Upon such termination, all balances become due and payable.

11. CANCELLATION OF SERVICE: (a) CUSTOMER may cancel a CD without liability if a
Service does not become available within ninety (90) days of the FOC Date as
described in Section 3 (b) above.

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 (b)  After a CD is submitted to TELECOM by the CUSTOMER except as noted in
Section 3(b) above, CUSTOMER may cancel all or a portion of the Services ordered
upon written notice to TELECOM. The charges for such Cancellation are as
follows:

Prior to issuance of the FOC           No Cancellation Charges

Subsequent to issuance of the FOC      50% of applicable MRC for one (1) month
        up to the FOC Date             (maximum $20,000)

(c) It is agreed that TELECOM's damages in the event of a cancellation can be
difficult or impossible to ascertain. The provision for cancellation charges in
this subsection is intended to establish liquidated damages in the event of
Service cancellation and is not intended as a penalty. Unless otherwise stated
in the CD and specifically agreed to in writing by both Parties, in the event
CUSTOMER cancels existing Service prior to the end of the Service Term described
in the CD, CUSTOMER shall pay TELECOM an amount equal to the balance of the
monthly Service charges that otherwise would have become due for the unexpired
portion of the Service Term ("Cancellation Charges/Early Cancellation Charges").
Notwithstanding the immediately preceding sentence, no Early Cancellation
charges shall apply for the cancellation of the interexchange Service on
Telecom's Network for period that the CUSTOMER is responsible for the payment of
the Minimum Monthly Recurring Charge as set forth in Exhibit 2 - Rates and
Charges.

(d) Notwithstanding the foregoing, and upon thirty (30) days prior written
notice, either Party shall have the right, without cancellation charge or
liability, to cancel (i) an affected portion of the Service, if TELECOM is
prohibited by governmental authority from furnishing said portion, or (ii) an
affected portion of the Service if any material rate or term contained herein is
substantially changed by final order of a court of competent jurisdiction, the
Federal Communication Commission, or other local, state or federal government
authority.

12. FORCE MAJEURE: If either Party's performance of this Agreement or any other
obligation hereunder (other than the obligation to make payments for amounts
due) is prevented, restricted or interfered with by causes beyond their
reasonable control including but not limited to acts of God, fire, explosion,
vandalism, cable cut, storm, or other similar occurrence, any law, order,
regulation, direction, action or request of the United States government or
state or local government, or of any department, agency, commission, court,
bureau, corporation or other instrumentality of any one or more said
governments, or civil or military authority, or by national emergencies,
insurrections, riots, wars, strikes, lockouts or work stoppages or other labor
difficulties, actions or inactions of a third party provider or operator of
facilities employed in the provision of the Services, suppliers' failures,
shortages, breaches, or delays, then the affected Party shall be excused from
such performance on a day-to-day basis to the extent of such prevention,
restriction, or interference. The affected Party shall use reasonable efforts
under the circumstances to avoid or remove such causes of non-performance and
shall proceed to perform with reasonable dispatch whenever such causes are
removed or cease.

13. SERVICE WARRANTY: TELECOM warrants that it will provide the Service to
CUSTOMER in accordance prevailing telecommunication industry standards
(hereinafter "Technical Standards"). TELECOM will use reasonable efforts under
the circumstances to remedy any delays, interruptions, omissions, mistakes,
accidents or errors in any Service and restore the Service in accordance with
Technical Standards. THE FOREGOING WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL
OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT
LIMITATION IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.

14. LIMITATION OF LIABILITY: TELECOM shall not be liable for interruptions,
delays, errors, or defects in transmission caused by the CUSTOMER, or the
CUSTOMER's agents, end users, or by facilities or equipment provided by the
CUSTOMER or by equipment interconnected with the CUSTOMER. UNDER NO
CIRCUMSTANCES, WHETHER IN CONTRACT TORT OR OTHERWISE, SHALL EITHER PARTY BE
LIABLE FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL, SPECIAL, ACTUAL, PUNITIVE,
OR ANY OTHER DAMAGES OR ANY KIND OR NATURE WHATSOEVER REGARDLESS OF THE CAUSE OR
FORESEEABILITY THEREOF, INCLUDING BUT

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NOT LIMITED TO DAMAGES ARISING FROM DELAY OR LOSS OF DATA, PROFITS, REVENUE OR
GOODWILL.

15. INDEMNIFICATION: Each Party agrees to release, indemnify, defend, and hold
harmless the other Party from losses, claims, demands, damages, expenses, suits,
or other actions, including reasonable attorney's fees, for personal injury,
including death of any person or persons, and for losses, damage, or destruction
of property, to the extent proximately caused by the negligence or willful
misconduct of the indemnifying Party, its employees, contractors, or agents.
This indemnity applies where the indemnifying Party's negligence or willful
misconduct is either the sole or the contributing cause of the injury, death, or
damage. This indemnity does not extend to any portion of the injury, death or
damage caused by either the sole or the contributing negligence of the
non-indemnifying Party or third parties. In the event parties other than
CUSTOMER shall have use or benefit of or shall be otherwise affected by the
Service provided through CUSTOMER, then CUSTOMER agrees to forever indemnify and
hold TELECOM and any third party provider or operator of the facilities employed
in the provision of the Service harmless from and against any and all claims,
demands, suits, actions, losses, damages, assessments or payments which may be
asserted by said parties, arising out of or related to any outage in Service.

16. NOTICES: Notices under this Agreement shall be in writing and shall be given
or made by telephonically confirmed facsimile transmissions, certified or
registered mail, express mail or other overnight delivery service, or hand
delivery, proper postage or other charges prepaid. Notices shall be sent to the
address listed below until such address is changed by written notice. Such
notice shall be deemed to have been given or made when actually received or
seventy-two (72) hours after being sent, whichever occurs first.

TO GTE TELECOM:

                      GTE Telecom Incorporated
                      201 N. Franklin Street
                      Suite 2400
                      Tampa, Florida 33602
                      Attention: Manager - Contracts and Tariffs
                      Fax No.: 813/209-9620

TO CUSTOMER:

                      Universal Access, Inc.
                      100 N. Riverside Plaza, Suite 2200
                      Chicago, IL 60606
                      Attention: Robert Pommer
                      Fax. No.: 312-660-5050

17. USE OF SERVICE/CAPACITY: (a) TELECOM's obligation to provide Services
specified herein is conditioned upon CUSTOMER not allowing the Services to be
used for any unlawful purpose or in violation of any governmental regulations or
authorizations. TELECOM shall have the right to limit, terminate or suspend
Service by written notice for improper use of the Service by CUSTOMER or any
activity by CUSTOMER, as determined in the sole discretion of TELECOM, that
threatens public health, safety, or welfare, or the integrity or reliability of
TELECOM's facilities or service to TELECOM's other customers.

(b) If CUSTOMER wishes to purchase capacity in an amount exceeding the
equivalent of OC-12 on any one route, then CUSTOMER represents and warrants that
it is not now, nor shall it become during the Term of this Agreement, a Capacity
Reseller (as defined below) with respect to any Services provided under this
Agreement. If CUSTOMER is or becomes during the Term of this Agreement a
Capacity Reseller with respect to any of the Services purchased hereunder, then
CUSTOMER may not purchase capacity in excess of the equivalent of one OC-12 on
any one route (referred to in this Section as the "Maximum Capacity"). If, at
the time CUSTOMER becomes a Capacity Reseller with respect to the Services
hereunder, CUSTOMER has ordered in excess of the Maximum Capacity, then CUSTOMER
shall immediately terminate all capacity in excess of the Maximum Capacity. Such
termination shall be subject to all applicable Early Cancellation/Termination
Charges. As used herein, a "Capacity Reseller" is any person or entity which, in
whole or in part, seeks to obtain telecommunications

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capacity for the purpose of reselling or otherwise providing access thereto to
third parties for profit, whether or not such person or entity actually realizes
a profit as a result of such transaction. CUSTOMER's failure to comply with this
Section shall constitute a material default and shall be grounds for immediate
termination.

18. NONDISCLOSURE: CUSTOMER shall not use, except as provided herein, nor
disclose to any third party during the Term of this Agreement and for a period
of two (2) years thereafter, any of the terms and conditions relating to this
Agreement, including but not limited to the rates and charges set forth in this
Agreement, unless such disclosure is lawfully required by any federal
governmental agency, is otherwise required to be disclosed by law, or is
necessary in any proceeding establishing the rights and obligations under this
Agreement. Prior to any such required disclosure by CUSTOMER, CUSTOMER shall
provide TELECOM with adequate written notice so as to enable TELECOM to seek
appropriate protection. TELECOM reserves the right to terminate this Agreement
immediately upon written notice of any unpermitted third party disclosure
hereunder.

19. LICENSES, APPROVALS AND AUTHORIZATIONS: CUSTOMER represents that in all
jurisdictions in which it provides services that require licenses, approvals or
other authorizations it has obtained such licenses, approvals or other
authorizations from the appropriate governmental authority. Further, if required
by TELECOM, CUSTOMER shall provide proof of such licenses, approvals or other
authorizations. CUSTOMER shall immediately notify TELECOM in writing, in the
event CUSTOMER is prohibited, either on a temporary or permanent basis, from
continuing to provide its telecommunications services in any jurisdiction. In
such event, TELECOM reserves the right to terminate this Agreement.

20. RESOLUTION OF DISPUTES: The Parties desire to resolve disputes arising out
of this Agreement without litigation. Accordingly, except for action seeking a
temporary restraining order or injunction related to the purposes of this
Agreement, or suit to compel compliance with this dispute resolution provision,
the parties agree to submit the dispute to a single arbitrator for resolution by
binding arbitration pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. A Party may demand such arbitration in accordance with
the procedures set out in those rules. Discovery shall be controlled by the
arbitrator. Each Party shall bear its own costs of these procedures. A Party
seeking discovery shall reimburse the responding Party the costs of production
of documents (to include search time and reproduction costs). The Parties shall
equally split the fees of the arbitration and the arbitrator.

21. GENERAL PROVISIONS: (a) Other Documents CUSTOMER will execute such other
documents, provide such information, and affirmatively cooperate with TELECOM,
all as may be reasonably required by TELECOM and relevant to providing the
Service. In particular, CUSTOMER accepts the responsibility for providing
TELECOM with special access surcharge exemption forms as may be required by the
local exchange carrier and as applicable, TELECOM's Universal Service Fund
exemption form.

(b) Non-Waiver The failure of either Party to give notice of default or to
enforce or insist upon compliance with any of the terms or conditions of this
Agreement, the waiver of any term or condition of this Agreement or the granting
of an extension of time for the performance shall not constitute the permanent
waiver of any term or condition of this Agreement and this Agreement and each of
its provisions shall remain at all times in full force and effect until modified
by the Parties in writing.

(c) Relationship of the Parties The provision of Service will not create a
partnership or joint venture between the parties or result in a joint
communications service offering to third parties.

(d) Enforcement In the event suit is brought or an attorney is retained by
either Party to enforce terms of this Agreement or to collect money damages for
breach hereof or by TELECOM to collect any monies due hereunder, then the
prevailing Party shall be entitled to recover, in addition to any other remedy,
reimbursement for reasonable attorneys' fees, court costs, costs of
investigation, and other related expenses incurred in connection therewith.

(e) Modification No subsequent agreement shall change, modify or discharge this
Agreement, in whole or in part, unless such agreement is in writing and signed
by authorized representatives of both parties.

(f) Assignment This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors or assigns,
provided, however, that CUSTOMER shall not assign

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or transfer its rights or obligations under this Agreement without the prior
written consent of TELECOM, which consent shall not be unreasonably withheld,
and further provided that any assignment or transfer without such consent shall
be deemed void and shall entitle TELECOM to terminate the Service provided
hereunder, at its option, upon ten (10) days prior written notice.
Notwithstanding any other language contained in this Agreement, either Party
may, without further permission but upon proper notice to the other Party,
assign the Agreement to any affiliated entity or successor in interest whether
by merger, reorganization, or transfer of all or substantially all of its
assets.

(g) Governing Law This Agreement shall be a contract between TELECOM and
CUSTOMER and the terms hereof shall be construed under the laws of the State of
Florida without regard to choice of law principles.

(h) Severability If any part or any provision of this Agreement shall be invalid
or unenforceable under applicable law, said part shall be ineffective to the
extent of such invalidity only, without in any way affecting the remaining parts
of said provision or the remaining provisions of this Agreement, and the
CUSTOMER and TELECOM hereby agree to negotiate with respect to any such invalid
or unenforceable part to the extent necessary to render such part valid and
enforceable.

(i) Survival The terms and provisions contained in this Agreement that by their
sense and content are intended to survive the performance thereof by the parties
hereto shall survive the completion of performance and termination of this
Agreement, including, without limitation, provisions for indemnification,
nondisclosure and the making of any and all payments due hereunder.

(j) Headings The section headings are for convenience only and shall not be
considered in its interpretation.

(k) Interpretation Words having well-known technical or trade meanings shall be
so construed, and all listing of items shall be taken to be exclusive, but shall
include other items, whether similar or dissimilar to those listed, as the
context reasonably applies in the interpretation of this Agreement.

(l) Entire Agreement This Agreement consists of all the terms and conditions
contained herein, in Capacity Descriptions, if applicable, that conform hereto,
and documents incorporated herein specifically by reference; this Agreement
constitutes the complete and exclusive statement of agreements and
understandings between the parties, and supersedes all proposals and prior
agreements (oral and written) between the parties relating to Service provided
hereunder. No representations or warranties, express or implied, have been made
or relied upon in the making of this Agreement, other than those specifically
contained in this Agreement.

Attachments:   Exhibit 1 - Capacity Description
               Exhibit 2 - Rates and Charges
               Exhibit 3 - Service Level Objectives

                                                                               8
<PAGE>   9

IN WITNESS WHEREOF, the Parties have executed this Capacity Agreement by their
duly authorized representatives.

GTE TELECOM INCORPORATED                         UNIVERSAL ACCESS, INC.

By: /s/ Signature Illegible                      By: /s/ Signature Illegible

Name: Joe Boland                                 Name: Robert J. Pommer
      ----------                                        ----------------

Title: Vice President/General Manager            Title: Chief Operating Officer
       ------------------------------                    -----------------------

Date: 8/25/99                                    Date: 8/20/99
      -------                                          -------

and

By: /s/ Signature Illegible

Name: Kenneth Shelton
        ---------------

Title: Controller
         ----------

Date: 8/27/99
        -------

               Approved As To Form
               ECD 8/25/99
               -----------
               Contracts

                                                                               9
<PAGE>   10

                         Exhibit 1 to Capacity Agreement

GTE TELECOM INCORPORATED                  Customer Name________________
210 N. Franklin Street Suite 2400         Service Address: ____________
Tampa, Florida 33602                      Billing Address:_____________
Account Manager                           Customer Contact:____________
Tel: (___)______ Fax. No. (___)______     Tel: (___)______ Fax. No. (___)_______

                              CAPACITY DESCRIPTION

Order No.                         P.O. Number                     Date:

<TABLE>
<CAPTION>
                                                                              Monthly     Monthly
                                                     Service     Non-         Recurring   Recurring
TerminationPoints/                  Requested        Term        Recurring    Charges     Charges
Description of Services    Number   Service Date     (months)    Charges      (each)      (TOTAL)
<S>                        <C>      <C>              <C>         <C>          <C>         <C>

TOTAL CHARGES:                                       NRC$________       MRC $____________
</TABLE>

REMARKS:

REFERENCE: Capacity Agreement No__________
Cancellation Charges Apply as set forth in the referenced Capacity Agreement in
the event Services are canceled or changed.

THIS CAPACITY DESCRIPTION IS ENTERED INTO PURSUANT TO THE CAPACITY AGREEMENT
IDENTIFIED HEREIN, THE TERMS AND CONDITIONS OF WHICH ARE INCORPORATED HEREIN IN
THEIR ENTIRETY; PROVIDED, HOWEVER, THAT IN THE EVENT OF ANY CONFLICT OR
INCONSISTENCY BETWEEN THIS CD AND THE TERMS AND CONDITIONS OF THE APPLICABLE
CAPACITY AGREEMENT, THE TERMS AND CONDITIONS CONTAINED IN THE CAPACITY AGREEMENT
SHALL PREVAIL.

<TABLE>
<S>                                                       <C>                                            <C>
The Customer hereby orders the Services described         ACCEPTED BY GTE TELECOM INCORPORATED
in this Capacity Description
Company

Signature
                                                          Joe Boland, Vice President/General Manager     Date

Printed Name
                                                          Lu Whanger, Director of Sales                  Date

Title                 Date
                                                          Account Manager                                Date
</TABLE>

                                                                              10
<PAGE>   11

                                    EXHIBIT 2
                                RATES AND CHARGES

1. Minimum Monthly Recurring Charge (MMRC): CUSTOMER will maintain Minimum
Monthly Recurring Charges for the interexchange Service on TELECOM's Network
(i.e., not including local access or other charges) in an amount equal to
$250,000 per month after a Ramp Up Period of nine (9) months and continuing
through May 31, 2004.

2. Ramp Up Period: The Ramp Up Period shall commence on the actual in Service
Date of the first circuit to be provided hereunder and shall continue for a
period of nine (9) months thereafter. Following the Ramp Up Period, in the event
CUSTOMER fails to achieve or maintain the MMRC, CUSTOMER will be responsible for
payment of the MMRC in the amount of $250,000 for each month that CUSTOMER fails
to attain the MMRC.

3. MRC During the Ramp Up Period: Circuits greater than One Hundred (100) miles
in distance will be charged at the following rates during the Ramp Up Period:

<TABLE>
<S>                 <C>
        DS-3        [***] per DS-0 mile (672 DS-0 per DS-3)
        OC-3        [***] per DS-0 mile (2016 DS-0 per OC-3)
        OC-12       [***] per DS-0 mile (8,064 DS-0 per OC-12)
        OC-48       [***] per DS-0 mile (32,256 DS-0 per OC48)
</TABLE>

4.      MRC Following the Ramp Up Period: Circuits greater than One Hundred
        (100) miles in distance will be charged at the following rates following
        the Ramp Up Period:

<TABLE>
<S>                 <C>
        DS-3        [***] per DS-0 mile (672 DS-0 per DS-3)
        OC-3        [***] per DS-0 mile (2016 DS-0 per OC-3)
        OC-12       [***] per DS-0 mile (8,064 DS-0 per OC-12)
        OC-48       [***] per DS-0 mile (32,256 DS-0 per OC48)
</TABLE>

5.      All circuits less than One Hundred Miles (100) in distance will be
        charged at the following rates:

<TABLE>
<CAPTION>
        Circuit Speed        During Ramp Up Period               Following Ramp Up Period
<S>                          <C>                                 <C>
        DS-3                        [***]                                  [***]
        OC-3                        [***]                                  [***]
        OC-12                       [***]                                  [***]
        OC-48                       [***]                                  [***]
</TABLE>

6.      MRC Validity: The above MRCs are effective [***], and shall remain
        valid for Services ordered under this Agreement through [***].

7. Non-Recurring Charges: The Non-Recurring Charges for additional Services are
as follows:

        (a)     Move Charge without local access (to different POP at Customer
                request) [***] one time;

        (b)     Add Charges (e.g., increasing a circuit from DS-3 to OC3) at the
                same POP [***] one time;

        (c)     Extend the In Service Date for a second time - Cancellation
                Charges apply

        (d)     Move of a local loop - pass through from local loop provider
                plus [***] one time administrative charge;

        (e)     On site technician (subject to availability) - [***] per hour
                during business hours only, two hour minimum plus travel.

        (f)     Other than above - individual case basis

8.      NRC Validity: The above NRC's are effective June 1, 1999, and shall
        remain valid through May 31, 2000, at which time, unless otherwise
        agreed to in writing, the NRCs will be at TELECOM's then prevailing
        rates for such Services.

                                                                              11

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>   12

                                    Exhibit 3
                            SERVICE LEVEL OBJECTIVES

TELECOM will make commercially reasonable efforts to meet the following Service
Level Objectives:

(a)     Mean Time to Repair - less than or equal to four (4) hours for DS3's,
        OC3's, OC12's.

(b)     Network Availability for "on net" private line Services:

        99.95% for Linear Network

        99.99% for SONET Ring Network (when available).

Credits for Outages:

(i) For the purposes of this Agreement, a circuit shall be deemed to be in an
"Outage" condition if, following the start of Service while CUSTOMER is actually
using or attempting to use such circuit, the circuit and becomes unavailable as
defined above.

CUSTOMER's request for credit for Outages must be submitted to TELECOM in
writing within thirty (30) calendar days of such Outage. TELECOM will respond to
each of CUSTOMER's requested credits and upon Outage verification by TELECOM,
TELECOM will apply the applicable credit to the next or subsequent Service
invoice. Service Outages do not include (a) Outage periods when CUSTOMER has
released the Service to TELECOM for maintenance purposes or to make
rearrangements or CUSTOMER requested changes in the Service; (b) circuits
outside the contiguous U.S.; (c) any circuits ordered by CUSTOMER from another
telecommunications service provider or carrier; (d) any local access circuits
ordered by or on behalf of CUSTOMER; (e) failure of CUSTOMER applications,
equipment or facilities, (f) acts or omissions of CUSTOMER, or any use or user
of the Service authorized by CUSTOMER or (g) reasons of Force Majeure. [***] No
credit is allowed for Service Outages of less than thirty (30) minutes. Outages
will be credited to CUSTOMER in half hour multiples for each half hour or major
fraction thereof, from the time TELECOM receives notification until Service is
restored. The credit shall not be applicable for the time that TELECOM stands
ready to repair the Service and CUSTOMER does not provide access to TELECOM to
perform such repair and restoration work. The credit allowance for an Outage or
a series of Outages shall not exceed the current monthly recurring charge for
such Service. The credit provided for in this Section shall be TELECOM's sole
liability and CUSTOMER's sole and exclusive remedy in the event of any Outage or
Service interruption.

(ii) Chronic Outages In the event that a single circuit experiences three (3)
or more Outages of fifteen (15) minutes duration or longer during any thirty
(30) day period, CUSTOMER may declare that the circuit has a chronic problem.
Upon written notice from CUSTOMER, TELECOM will have thirty (30) days to correct
the chronic problem. In the event that the problem is not corrected within
thirty (30) days of TELECOM's receipt of written notice, CUSTOMER may cancel
this circuit without any additional charges or any further liability and such
cancellation will be CUSTOMER's sole and exclusive remedy for chronic Outages.

Credit allowances will be calculated on a monthly basis and the applicable
Outage credit by circuit will be included in TELECOM's invoice. CUSTOMER shall
have thirty (30) days from date of receipt of the invoice to contest the credit
allowance offered by TELECOM.

                                                                              12

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.<PAGE>   1
                                                                 EXHIBIT 10.31.1
                                    ADDENDUM

This addendum (the "Addendum") modifies the Level 3 Terms and Conditions for
Delivery of Service, Version 2.0 ("Terms & Conditions") between Level 3 and
Universal Access, ______ ("Customer"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Terms & Conditions, and the
terms and conditions contained in this Addendum modify the Terms and Conditions
in the following limited respects:

        MODIFICATIONS TO TERMS AND CONDITIONS FOR DELIVERY OF SERVICE

        1. In the "Definitions" section of the Terms and Conditions the
following definition is added:

        SERVICE LEVEL AGREEMENT: An agreement by Level 3 with respect to its
        Services, backed by a credit if the Agreement is not met, and which is
        contained within the Terms and Conditions applicable to a specific Level
        3 Service.

        2. Section 2.1 of the Terms and Conditions is modified by adding the
following to the end of that section:

        Customer may direct Level 3 to deliver bills to it in any of the
        following formats: (i) paper format (which shall be the format for the
        billing in the event Customer does not direct Level 3 otherwise), (ii) a
        paper format bill summary with a magnetic tape to provide the detailed
        information of the bill, (iii) magnetic tape only, (iv) computer disk or
        (v) electronic transmission.

        3. Section 3.1 of the Terms and Conditions is deleted in its entirety
and replaced with the following provision:

        3.1 DISCONTINUANCE OF CUSTOMER ORDER BY LEVEL 3. Level 3 may terminate
        any Customer Order and discontinue Service without liability:
        A. If Customer fails to pay a past due balance for Services within
        thirty (30) days of written notice thereof provided by Level 3;
        B. If Customer violates any law, rule, regulation or policy of any
        government authority having jurisdiction over the Services; if Customer
        makes a material misrepresentation in any submission of information in a
        Customer Order or other submission of information to Level 3; if
        Customer engages in any fraudulent use of the Services; or if a court or
        other government authority having jurisdiction over the Services
        prohibits Level 3 from furnishing the Services;
        C. If Customer fails to cure its breach of any provision of these Terms
        and Conditions or any Customer Order within thirty (30) days written
        notice thereof provided by Level 3;
        D. If Customer files bankruptcy, for reorganization, or fails to
        discharge an involuntary petition therefore within sixty (60) days;
        E. If Customer's use of the Services materially exceeds Customer's
        credit limit, unless within fourteen (14) days written notice thereof by
        Level 3, Customer provides adequate

<PAGE>   2

        security for payment for the Services.

Any discontinuance of Service by Level 3 pursuant to this Section shall not
affect Customer's Revenue Commitment.

        4. Section 3.3 of the Terms and Conditions is modified by inserting the
word "reasonable" immediately before the words "conditions as Level 3."

        5. Section 4.2 of the Terms and Conditions is amended by adding the word
"reasonable" between the phrase "Customer shall be responsible for the payment
of" and the phrase "service charges in the event that maintenance or
inspection..."; and further by replacing the phrase "or related to" in the last
sentence of that section with the phrase "directly by."

        6. Section 5.1(F) of the Terms and Conditions is deleted and replaced
with the following provision:

        Keeping Level 3's equipment and facilities located on the Premises free
        and clear of any liens or encumbrances imposed as a result of any action
        or inaction by Customer.

        7. A new Section 5.4 is added to the Terms and Conditions reading as
follows:

        In the event that, during the term of this Agreement, Level 3's standard
        prices for Services are (taken as a whole and for customers making a
        dollar volume commitment which, on a monthly basis, is equal to or
        lesser than the Revenue Commitment made by Customer herein) less than
        the prices for Services as set forth in Exhibit A, then the Monthly
        Recurring charges for Services delivered to Customer hereunder shall,
        for all Customer Orders submitted after such date, be reduced so that
        such Monthly Recurring Charges are no greater than the standard
        discounted prices offered for such other customers.

        8. Section 7.3(E) of the Terms and Conditions is deleted and replaced
with the following provision:

        is required to be disclosed by law, provided that the disclosing party
        is given notice of such legally required disclosure and an opportunity
        to protect the confidentiality of the information.

        9. Sections 8.1, 8.2 and 8.3 of the Terms and Conditions are deleted and
replaced with the following provisions:

        8.1 FORCE MAJEURE. Except with respect to force majeure events affecting
        Customer's ability to meet its payment obligations to Level 3, neither
        party shall be liable, nor shall any credit allowance or other remedy be
        extended, for any failure of performance or equipment due to causes
        beyond such party's reasonable control, including but not limited to:
        acts of God, fire, flood or other catastrophes; any law, order,
        regulation, direction, action, or request of any governmental entity or
        agency, or any civil or military authority; national emergencies,
        insurrections, riots, wars; unavailability of rights-of-way or

<PAGE>   3

        materials; or strikes, lock-outs, work stoppages, or other labor
        difficulties. In the event Level 3, for reasons set forth in this
        paragraph 8.1, is unable to deliver Service pursuant to any Customer
        Order for 45 consecutive days, then Customer may terminate the affected
        Customer Order without paying any termination charges.

        8.2 ASSIGNMENT OR TRANSFER. Except with respect to a merger or sale of
        substantially all of Customer's assets, Customer may not transfer,
        sublease or assign the use of Service without the express prior written
        consent of Level 3, and then only when such transfer or assignment can
        be accomplished without interruption of the use or location of Service.
        Level 3 will not unreasonably withhold its consent. These Terms and
        Conditions shall apply to any transferees or assignees. Customer shall
        remain liable for the payment of all charges due under each Customer
        Order.

        8.3 NOTICES. Notices hereunder shall be deemed properly given when
        delivered, if delivered in person, or when sent via facsimile, overnight
        courier, electronic mail or five (5) days after deposited with the U.S.
        Postal Service, (a) with respect to Customer, the address listed on any
        Customer Order, or (b) with respect to Level 3, to: Contracts
        Administration, Level 3 Communications, LLC, 1450 Infinite Drive,
        Louisville, CO 80027. Customer shall notify Level 3 of any changes to
        its addresses listed on any Customer Order.

        10. The second sentence of Section 8.8 of the Terms and Conditions is
deleted and replaced with the following provision:

        These Terms and Conditions may be amended by written agreement signed by
        Customer and Level 3 at any time, and Customer agrees to be bound by the
        amended Terms and Conditions from and after the effective date of such
        amendment.

        CHANGES TO TERMS AND CONDITIONS, PRIVATE LINE SERVICE

        1. A new Section 4 to the Terms and Conditions, Private Line Service is
added reading as follows:

        4. In the event Customer has multiple circuits between the same two city
pairs and desires to place a Customer Order with Level 3 for a larger circuit
and mitigate all existing capacity to that larger circuit, Customer shall be
permitted by Level 3 to do so without paying any termination liability with
respect to the termination of Customer Orders respecting the circuits migrated
to the larger circuit, provided, however, that Customer pays any and all
non-recurring charges with respect to the placement of the Customer Order for
the larger circuit ordered.

        2. Level 3's current pricing for Private Line Service is as set forth
below and is conditioned upon the term of this Addendum and the Revenue
Commitment set forth herein:

<PAGE>   4

                            UNIVERSAL ACCESS, INC.
                    DOMESTIC INTERCITY PRIVATE LINE RATES
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
<S>                     <C>                       <C>
        DS-1            MIN CIRCUIT CHARGE        RATE (PER DS0 MILE)
-----------------------------------------------------------------------
       ON NET                 [***]                     [***]
-----------------------------------------------------------------------
        DS-3            MIN CIRCUIT CHARGE        RATE (PER DS0 MILE)
-----------------------------------------------------------------------
       ON NET                 [***]                     [***]
-----------------------------------------------------------------------
        OC-3            MIN CIRCUIT CHARGE        RATE (PER DS0 MILE)
-----------------------------------------------------------------------
       ON NET                 [***]                     [***]
-----------------------------------------------------------------------
       OC-12            MIN CIRCUIT CHARGE        RATE (PER DS0 MILE)
-----------------------------------------------------------------------
       ON NET                 [***]                     [***]
-----------------------------------------------------------------------
</TABLE>

        Level 3 further states that its non-recurring charge for termination,
rearrangement or reconfiguration of Private Line Services shall not exceed
[***].

        CHANGES TO TERMS AND CONDITIONS, TELEPHONY COLOCATION

        1. Section 7 of the Terms and Conditions, Telephony Colocation is
deleted and replaced with the following provision:

        7. Customer shall abide by any posted or otherwise communicated rules
        relating to use of, access to, or security measures respecting the
        Space. Customers use of the Space will be immediately terminated in the
        event Customer or any of its agents or employees is found in Level 3's
        gateway with any firearms, drugs, alcohol or is found engaging in any
        criminal activity, eavesdropping, foreign intelligence, card selling or
        slamming. Persons found engaging in any such activity or in possession
        of the aforementioned prohibited items will be immediately escorted from
        the gateway. In the event that unauthorized parties gain access to the
        Space through access cards, keys or other access devices provided to
        Customer, Customer shall be responsible for any damages incurred as a
        result thereof. Customer shall be responsible for the cost of replacing
        any security devices lost or stolen after delivery thereof to Customer.
        In addition, Level 3 shall have the right to terminate Customer's use of
        the Space or the Services in the event that: (a) Level 3's rights to use
        the facility within which the Space is located terminates or expires for
        any reason; (b) Customer has violated the terms hereof or of any
        Customer Order submitted hereunder; (c) Customer makes any material
        alterations to the Space without first obtaining the written consent of
        Level 3; (d) Customer allows personnel or contractors to enter the Space
        who have not been approved by Level 3 in advance; or (e) Customer
        violates any posted or otherwise communicated rules relating to use of
        or access to the Space. With respect to items (b), (c), (d) and (e)
        immediately above, unless the same interferes or has the potential to
        interfere with other Level 3 Colocation customers, Level 3 shall provide
        Customer a written notice of the foregoing and a 10-day opportunity to
        cure the same before terminating Customer's rights to the Space.

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>   5

        2. Section 8 of the Terms and Conditions, Telephony Colocation is
modified by adding the word "reasonable" between the phrase "termination charge
equal to the " and the phrase "cost incurred by Level 3 in returning the Space";
and the phrase "as a colocation facility" is added between the phrase "to a
condition suitable for use by the other party" and the phrase ", plus the
percentage of the monthly recurring fees. . .".

        CHANGES TO TERMS AND CONDITIONS, IP COLOCATION

        1. Section 5 of the Terms and Conditions, IP Colocation is modified by
adding the word "reasonable" between the phrase "termination charge equal to the
" and the phrase "cost incurred by Level 3 in returning the Space"; and the
phrase "as a colocation facility" is added between the phrase "to a condition
suitable for use by the other parties" and the phrase ", plus the percentage of
the monthly recurring fees. . .".

        2. Section 7 of the Terms and Conditions, IP Colocation is deleted and
replaced with the following provision:

        7. Customer shall abide by any posted or otherwise communicated rules
        relating to use of, access to, or security measures respecting the
        Space. Customers use of the Space will be immediately terminated in the
        event Customer or any of its agents or employees is found in Level 3's
        gateway with any firearms, drugs, alcohol or is found engaging in any
        criminal activity, eavesdropping, foreign intelligence, card selling or
        slamming. Persons found engaging in any such activity or in possession
        of the aforementioned prohibited items will be immediately escorted from
        the gateway. In the event that unauthorized parties gain access to the
        Space through access cards, keys or other access devices provided to
        Customer, Customer shall be responsible for any damages incurred as a
        result thereof. Customer shall be responsible for the cost of replacing
        any security devices lost or stolen after delivery thereof to Customer.
        In addition, Level 3 shall have the right to terminate Customer's use of
        the Space or the Services in the event that: (a) Level 3's rights to use
        the facility within which the Space is located terminates or expires for
        any reason; (b) Customer has violated the terms hereof or of any
        Customer Order submitted hereunder; (c) Customer makes any material
        alterations to the Space without first obtaining the written consent of
        Level 3; (d) Customer allows personnel or contractors to enter the Space
        who have not been approved by Level 3 in advance; or (e) Customer
        violates any posted or otherwise communicated rules relating to use of
        or access to the Space. With respect to items (b), (c), (d) and (e)
        immediately above, unless the same interferes or has the potential to
        interfere with other Level 3 Colocation customers, Level 3 shall provide
        Customer a written notice of the foregoing and a 10-day opportunity to
        cure the same before terminating Customer's rights to the Space.

<PAGE>   6

                         ADDITIONAL TERMS AND CONDITIONS

        1. Customer and Level 3 agree that the term of this Addendum shall be
seven (7) years. Customer may place Customer Orders for Level 3 Services for
that term pursuant to the Level 3's Terms and Conditions as amended by this
Addendum.

        2. Subject to the Ramp Period discussed below, for the remaining term of
this Addendum, Customer makes a Revenue Commitment to Level 3 of $250,000 per
month. The Monthly Revenue Commitment may be satisfied by Customer using any
combination of Level 3 Services, including the pro-rated portion of any charges
associated with Customer's purchase of IRU capacity from Level 3. Such pro-rated
portion of IRU charges shall be calculated on a monthly basis by taking the
total cost of the IRU and dividing it by the total number of months for which
the Customer purchases such IRU capacity from Level 3, and shall exclude any O&M
charges. Customer shall have a Ramp Period of six (6) months from the date Level
3 installs and tests the first circuit ordered under this Agreement.

        The Revenue Commitment made by Customer is a "take or pay" commitment.
In the event that by the end of the Ramp Period Customer has not submitted
Customer Orders for the agreed commitment of Level 3 Services and does not
thereafter utilize (on a continuing basis) the monthly commitment of Level 3
Services, Customer will be billed for and obligated to pay the amount of the
Revenue Commitment until such time as the commitment is (on a continuing basis)
being satisfied, after which Customer will be billed based upon its actual usage
of Service.

        3. The Service Level Agreements contained within the Terms and
Conditions are deleted and are replaced with the Service Level Agreements
attached to this Addendum as Exhibit "A." The Service Level Agreements attached
hereto shall apply only with respect to Customer Orders relating to the Services
to which the applicable Service Level Agreement relates.

CUSTOMER ACCEPTANCE                     LEVEL 3 ACCEPTANCE
/s/ ROBERT POMMER                       /s/ KATHY PERONE
------------------------------------    ---------------------------------------
Authorized Customer Signature           Authorized Level 3 Signature

11/15/99                                11/17/99
------------------------------------    ---------------------------------------
Date                                    Date

Robert J. Pommer                        Kathy Perone
------------------------------------    ---------------------------------------
Typed or Printed Name                   Typed or Printed Name

Chief Operating Officer                 SVP Sales
------------------------------------    ---------------------------------------
Title                                   Title

<PAGE>   7

                                    EXHIBIT A

COLOCATION SERVICE LEVEL AGREEMENT

Level 3 Colocation Services are backed by the following Service Level Agreement
(SLA). If the Level 3 obligation is missed, the credit set forth below will be
issued to the customer if requested, once verified by Level 3. The total number
of credits per month is limited to the Monthly Recurring Charge (MRC) for the
affected service. To receive credit if these obligations have not been met, the
customer must contact Level 3 Customer Service within fifteen (15) days of the
end of the month for which credit is requested.

Level 3 provides a toll-free number connecting the customer to Level 3 Customer
Service for all issues -- including technical, billing, and product inquiries:
1-877-4LEVEL3 (1-877-453-8353).

(page 1 of 4)

<PAGE>   8

ORDER ACCEPTANCE DEFINITION
An order is accepted by Level 3 (for the purposes of this Installation Guarantee
only) as soon as the Order Entry Specialist receives the order in Customer
Implementation Management (CIM).

                             OBLIGATIONS AND CREDITS

<TABLE>
<CAPTION>
 --------------------------------------------------------------------------------------------------
                               LEVEL 3 OBLIGATION                                       CREDIT
 --------------------------------------------------------------------------------------------------
 <S>                                                                               <C>
                                                                                   [***]
 POWER GUARANTEE
 Level 3 guarantees that AC and/or DC power will be available to the customer's
 Colocation space 100% of the time.

 Should Level 3 fail to meet the Power Guarantee, Level 3, upon the customer's
 request, will credit the customer's monthly invoice [***] for each  instance
 that power is not available to the customer's space, up to a maximum  of [***] .

 --------------------------------------------------------------------------------------------------
                                                                                    [***]
 HOURS OF OPERATION GUARANTEE
 Level 3 will guarantee that the Gateway will be open and available to the
 customer twenty-four hours a day and seven days a week for unescorted access
 to the Colocation and customer work areas.

 Should Level 3 fail to meet the Hours of Operation Guarantee for any one
 instance, Level 3, upon the customer's request, will credit the customer's
 monthly invoice [***] for each instance within a 24-hour period, up to a
 maximum of seven [***] per month.

 --------------------------------------------------------------------------------------------------
</TABLE>

*** Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect to
the omitted portions.

<PAGE>   9

<TABLE>
<CAPTION>
 --------------------------------------------------------------------------------------------------
<S>                                                                               <C>
                                                                                  [***]

 REMOTE HANDS RESPONSE TIME GUARANTEE*
 Level 3 will guarantee to respond to Remote Hands requests within these
 parameters:

 -   At the following Gateways, Level 3 will guarantee to have a technician
     available within 15 minutes, on a 24 x 7 basis: Sunnyvale, San Francisco,
     Los Angeles, Denver, Chicago, Dallas, New York City, and Washington D.C.

 -   At all other Gateways, Level 3 will guarantee to have a technician
     available within 15 minutes during normal business hours (7 a.m. to 7
     p.m.), Monday through Friday. Level 3 will guarantee to have a technician
     available within 2 hours on weekends and holidays or after normal business
     hours in these Gateways.

 *NOTE: BASIC REMOTE HANDS SERVICE IS OFFERED ON A 24 X 7 BASIS AND IS AVAILABLE
 TO PROVIDE SUPPORT FOR SUPERVISED FIRST-LINE MAINTENANCE SITUATIONS. SUPERVISED
 FIRST-LINE MAINTENANCE SITUATIONS INCLUDE FIXES SUCH AS RESTARTS, CARD SWAPS
 (WHERE CARDS ARE VISIBLE AND ACCESSIBLE -- LEVEL 3 WILL NOT OPEN THE OUTER CASE
 OF THE EQUIPMENT), RE-BOOTS OF SOFTWARE (NO RELOADS OF HARDWARE OR SOFTWARE),
 AND SIMPLE TESTING.

 Should Level 3 fail to meet the Remote Hands Response Time Guarantee for any
 one instance, Level 3, upon the customer's request, will credit the customer's
 monthly invoice [***] for each instance, up to a maximum of [***].

 --------------------------------------------------------------------------------------------------
                                                                                 [***]
 HVAC GUARANTEE
 Level 3 will guarantee to maintain -- over a 24-hour period at 100% load --
 an average temperature of 72 degrees Fahrenheit within the Colocation area.
 However, temperatures may temporarily fluctuate in the range of 68-78 degrees
 Fahrenheit, and Level 3 does not guarantee temperatures inside cabinets or
 within private suites.

 Should Level 3 fail to meet the HVAC guarantee, Level 3, upon the customer's
 request, will credit the customer's monthly invoice [***] for each  instance
 that the colocation temperature is outside the temperature range  outlined
 above, up to a maximum of [***].

 --------------------------------------------------------------------------------------------------
</TABLE>

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>   10

<TABLE>
<S>                                                                              <C>
 --------------------------------------------------------------------------------------------------
                                                                                 [***]

 RELATIVE HUMIDITY GUARANTEE
 Level 3 will guarantee to maintain -- over a 24-hour period at 100% load -- an
 average relative humidity of 50% within the Colocation area. However, operating
 percentages may temporarily fluctuate in the range of 47.5-52.5 percent, and
 Level 3 does not guarantee humidity percentages within specific cabinets or
 private suites.

 Should Level 3 fail to meet the Relative Humidity Guarantee, Level 3, upon the
 customer's request, will credit the customer's monthly invoice [***] for  each
 instance that the colocation temperature is outside the temperature range
 outlined above, up to a maximum of [***].

 --------------------------------------------------------------------------------------------------
                                                                                 [***]
 SECURITY GUARANTEE
 Level 3 will guarantee that all card readers and palm scanners will be in
 operation 100% of the time. Level 3 also guarantees that doors will not be
 propped open without a Level 3 employee monitoring the door. In addition,
 Level 3 guarantees that in the event of a security breach, Level 3 will make
 available, at the customer's request, video surveillance tapes to be reviewed
 with the supervision of a Level 3 employee. Level 3 will also guarantee that
 access logs will be provided within 30 minutes of the customer's request.
 Access logs will either be e-mailed within 30 minutes or made available by
 hard copy at the Gateway within 30 minutes.

 Should Level 3 fail to meet the Security Guarantee, Level 3, upon the
 customer's request, will credit the customer's monthly invoice [***] for
 each instance that the Security Guarantee is not met, up to a maximum of one
 [***].

 --------------------------------------------------------------------------------------------------
                                                                                 [***]
 CABINET INSTALL GUARANTEE                                                       is not completed
 Level 3 guarantees that up to 15 cabinets, in an individual Gateway, will       beyond the
 be delivered within 20 business days beginning with Level 3's acceptance of     installation
 a customer order. 16-50 cabinet orders, within an individual Gateway, will be   guarantee
 delivered within 40 business days beginning with Level 3's acceptance of a
 customer order. Delivery times on 51 cabinets or more will be
 determined on an individual case basis.

 PRIVATE SUITE INSTALL GUARANTEE
 Level 3 guarantees that up to a 5,000-square-foot private suite will be
 delivered within 40 business days beginning with the customers signed approval
 of the private suite drawings.

 Should Level 3 fail to meet the Cabinet or Private Suite Installation
 Guarantee, Level 3, upon the customer's request, will credit the customer's
 monthly invoice [***] for each day beyond the installation guarantee.
 The customer is entitled to a [***] prorated credit for each day beyond
 the service commitment.
 --------------------------------------------------------------------------------------------------
</TABLE>

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>   11

IP CROSSROADS SERVICE LEVEL AGREEMENT

Level 3 IP CrossRoads Services are backed by the following Service Level
Agreement (SLA). If the Level 3 obligation is missed, the credit set forth below
will be issued to the customer if requested, once verified by Level 3. The total
number of credits per month is limited to the Monthly Recurring Charge (MRC) for
the affected service. To receive credit if these obligations have not been met,
the customer must contact Level 3 Customer Service within five (5) days of the
end of the month for which credit is requested.

Level 3 provides a toll-free number connecting the customer to Level 3 Customer
Service for all issues -- including technical, billing, and product inquiries:
1-877-4LEVEL3 (1-877-453-8353).

(page 1 of 4 pages)

<PAGE>   12
ORDER ACCEPTANCE DEFINITION
An order is accepted by Level 3 (for the purposes of this Installation Guarantee
only) as soon as the Order Entry Specialist receives the order in Customer
Implementation Management (CIM).

                             OBLIGATIONS AND CREDITS

<TABLE>
<CAPTION>
<S>                                                                             <C>
-------------------------------------------------------------------------------------------------
                             Level 3 Obligation                                    Credit
-------------------------------------------------------------------------------------------------
                                                                                    [***]

INSTALLATION GUARANTEE
Level 3 guarantees the following installation time frames in Level 3's standard
service areas, beginning with Level 3's acceptance of a Customer Order. This
guarantee does not cover incorrect data on the customer order, a change in the
customer order, or a non-standard implementation. The maximum installation
credit is [***].

 -   Ethernet port speeds of 10Mbps or 100Mbps terminating in Level 3
     Colocation: 10 business days or less for North America and Europe
 -   64-1.920Kbps (DS-1/E-1) port speeds: 45 business days or less for
     North America and Europe
 -   3-45Mbps (DS-3/E-3) port speeds: 60 business days or less for North
     America and Europe
 -   155Mbps (OC-3), 622Mbps (OC-12), and 1000Mbps (GigE): Individual Case
     Basis (ICB)
 -   Customer Provided Access: 20 business days or less for North America
     for circuits less than or equal to DS-3, after the CPA is delivered

 -------------------------------------------------------------------------------------------------
</TABLE>

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

<PAGE>   13

<TABLE>
<S>                                                                             <C>
 -------------------------------------------------------------------------------------------------
                                                                                [***]

 100% SERVICE AVAILABILITY GUARANTEE*
 Service Unavailability refers to any outage reported by the customer within 48
 hours of the outage and confirmed by Level 3 Customer Service. Service
 Unavailability covers any outage associated with the customer's access port to
 the Level 3 Internet network, extending across the Level 3 Internet network,
 and across the local access circuit if provisioned on the Level 3 metropolitan
 network. Service Unavailability does not include outages associated with
 scheduled maintenance events, customer-caused outages or disruptions, the
 performance of Internet networks controlled by other companies, or traffic
 exchange points which are controlled by other companies.

 We guarantee that for any outage lasting between 15 minutes and 24 hours within
 the same 24-hour period, customers will receive a [***].

*NOTE: IF THE CUSTOMER HAS SIGNED A CONTRACT GOVERNED BY GERMAN LAW, AND/OR DIA
SERVICE IS PROVISIONED IN GERMANY, THE FOLLOWING AVAILABILITY GUARANTEES SHALL
INSTEAD APPLY:

 LOCAL LOOP GUARANTEE: 97.5% ANNUAL AVAILABILITY
 The unavailability time is calculated as the total number of outages a customer
 experiences during a calendar month. The maximum unavailability time may vary
 depending on the total number of days in the month. Example: in a 365-day year,
 the unavailability maximum would be 219 hours. If Level 3 exceeds the maximum
 unavailability time of 219 hours over the first 12 months of the customer's
 contract, then Level 3 would be liable to pay the customer service credits for
 the unavailability time exceeding 219 hours.

 INTERNET NETWORK GUARANTEE: 99.9% MONTHLY AVAILABILITY
 The unavailability time is calculated as the total number of outages a customer
 experiences during a calendar month. The maximum unavailability time may vary
 depending on the total number of days in the month. Example: in a typical
 30-day month, the unavailability maximum would be 44 minutes. If Level 3
 exceeds the maximum unavailability time of 44 minutes, then we would be liable
 to pay the customer a service credit equal to time of total service
 unavailability exceeding 44 minutes.

 -------------------------------------------------------------------------------------------------
</TABLE>

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>   14

<TABLE>
<S>                                                                             <C>
 -------------------------------------------------------------------------------------------------
                                                                                [***]

 DELAY GUARANTEE
 Delay refers to the one-way average delay, over a calendar month, of traffic
 between all major Gateways on the Level 3 U.S. and European Internet network.
 Delay does not apply to the customer's local access circuit, transit or peering
 connections, circuits to the traffic exchange points, maintenance events, or to
 customer-caused outages or disruptions. Customers may obtain delay measurements
 directly from the Level 3 Web site at www.Level3.com.

 -   North American Network Delay Guarantee: 40 ms average one-way
 -   European Network Delay Guarantee: 30 ms average one-way
 -   London to New York Guarantee: 40 ms average one-way

 -------------------------------------------------------------------------------------------------
</TABLE>

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

<PAGE>   15

DIA & RAPID ACCESS SERVICE LEVEL AGREEMENT

Level 3 Dedicated Internet Access (DIA) and Rapid Access Services are backed by
the following Service Level Agreement (SLA). If the Level 3 obligation is
missed, the credit set forth below will be issued to the customer if requested,
once verified by Level 3. The total number of credits per month is limited to
the Monthly Recurring Charge (MRC) for the affected service. To receive credit
if these obligations have not been met, the customer must contact Level 3
Customer Service within five (5) days of the end of the month for which credit
is requested.

Level 3 provides a toll-free number connecting the customer to Level 3 Customer
Service for all issues -- including technical, billing, and product inquiries:
1-877-4LEVEL3 (1-877-453-8353).

(page 1 of 4 pages)

<PAGE>   16

ORDER ACCEPTANCE DEFINITION
An order is accepted by Level 3 (for the purposes of this Installation Guarantee
only) as soon as the Order Entry Specialist receives the order in Customer
Implementation Management (CIM).

                             OBLIGATIONS AND CREDITS

<TABLE>
<CAPTION>
<S>                                                                             <C>
 -------------------------------------------------------------------------------------------------
                             Level 3 Obligation                                    Credit
 -------------------------------------------------------------------------------------------------
                                                                                [***]

 INSTALLATION GUARANTEE
 Level 3 guarantees the following installation time frames in Level 3's
 standard service areas, beginning with Level 3's acceptance of a Customer
 Order. This guarantee does not cover incorrect data on the customer order,
 a change in the customer order, or a non-standard implementation.
 The maximum installation credit is [***].

 -   Ethernet port speeds of 10Mbps or 100Mbps terminating in Level 3
     Colocation: 10 business days or less for North America and Europe
 -   64-1.920Kbps (DS-1/E-1) port speeds: 45 business days or less for
     North America and Europe
 -   3-45Mbps (DS-3/E-3) port speeds: 60 business days or less for North
     America and Europe
 -   155Mbps (OC-3), 622Mbps (OC-12), and 1000Mbps (GigE): Individual Case
     Basis (ICB)
 -   Customer Provided Access: 20 business days or less for North America
     for circuits less than or equal to DS-3, after the CPA is delivered

 -------------------------------------------------------------------------------------------------
</TABLE>

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>   17

<TABLE>
<S>                                                                             <C>
 -------------------------------------------------------------------------------------------------
                                                                                [***]

 100% SERVICE AVAILABILITY GUARANTEE*
 Service Unavailability refers to any outage reported by the customer within 48
 hours of the outage and confirmed by Level 3 Customer Service. Service
 Unavailability covers any outage associated with the customer's access port to
 the Level 3 Internet network, extending across the Level 3 Internet network,
 and across the local access circuit if provisioned on the Level 3 metropolitan
 network. Service Unavailability does not include outages associated with
 scheduled maintenance events, customer-caused outages or disruptions, the
 performance of Internet networks controlled by other companies, or traffic
 exchange points which are controlled by other companies.

 We guarantee that for any outage lasting between 15 minutes and 24 hours within
 the same 24-hour period, customers will receive a [***].

*NOTE: IF THE CUSTOMER HAS SIGNED A CONTRACT GOVERNED BY GERMAN LAW, AND/OR DIA
SERVICE IS PROVISIONED IN GERMANY, THE FOLLOWING AVAILABILITY GUARANTEES SHALL
INSTEAD APPLY:

 LOCAL LOOP GUARANTEE: 97.5% ANNUAL AVAILABILITY
 The unavailability time is calculated as the total number of outages a customer
 experiences during a calendar month. The maximum unavailability time may vary
 depending on the total number of days in the month. Example: in a 365-day year,
 the unavailability maximum would be 219 hours. If Level 3 exceeds the maximum
 unavailability time of 219 hours over the first 12 months of the customer's
 contract, then Level 3 would be liable to pay the customer service credits for
 the unavailability time exceeding 219 hours.

 INTERNET NETWORK GUARANTEE: 99.9% MONTHLY AVAILABILITY
 The unavailability time is calculated as the total number of outages a customer
 experiences during a calendar month. The maximum unavailability time may vary
 depending on the total number of days in the month. Example: in a typical
 30-day month, the unavailability maximum would be 44 minutes. If Level 3
 exceeds the maximum unavailability time of 44 minutes, then we would be liable
 to pay the customer a service credit equal to time of total service
 unavailability exceeding 44 minutes.

-------------------------------------------------------------------------------------------------
</TABLE>

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

<PAGE>   18

<TABLE>
<S>                                                                             <C>
 -------------------------------------------------------------------------------------------------
                                                                                 [***]

 DELAY GUARANTEE
 Delay refers to the one-way average delay, over a calendar month, of traffic
 between all major Gateways on the Level 3 U.S. and European Internet network.
 Delay does not apply to the customer's local access circuit, transit or peering
 connections, circuits to the traffic exchange points, maintenance events, or to
 customer-caused outages or disruptions. Customers may obtain delay measurements
 directly from the Level 3 Web site at www.Level3.com.

 -   North American Network Delay Guarantee: 40 ms average one-way
 -   European Network Delay Guarantee: 30 ms average one-way
 -   London to New York Guarantee: 40 ms average one-way

 -------------------------------------------------------------------------------------------------
</TABLE>

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>   19

PRIVATE LINE SERVICE LEVEL AGREEMENT

Level 3 Private Line Services (PLS) are backed by the following Service Level
Agreement (SLA). If the Level 3 obligation is missed, the credit set forth below
will be issued to the customer if requested, once verified by Level 3. The total
number of credits per month is limited to the Monthly Recurring Charge (MRC) for
the affected service. To receive credit if these obligations have not been met,
the customer must contact Level 3 Customer Service within five (5) days of the
end of the month for which credit is requested.

Level 3 provides a toll-free number connecting the customer to Level 3 Customer
Service for all issues -- including technical, billing, and product inquiries:
1-877-4LEVEL3 (1-877-453-8353).

ORDER ACCEPTANCE DEFINITION
An order is accepted by Level 3 (for the purposes of this Installation Guarantee
only) as soon as the Order Entry Specialist receives the order in Customer
Implementation Management (CIM).

INDIVIDUAL CASE BASIS (ICB) DEFINITION
Individual Case Basis (ICB) is defined as a service where a standard service
interval is not defined. For ICB categories, Level 3 will provide a Firm Order
Commitment Date (FOC) for services as soon as possible. The FOC date is
determined by a combination of Level 3 internal process as well as the dates
supplied to Level 3 by Level 3 vendors (where applicable). These vendor-supplied
FOC dates vary by vendor, region, and city.

CHANGES TO EXISTING ORDERS IN PROGRESS
The SLA implementation dates apply to intervals between original order date and
original due date. If a customer requests a change to an order date during the
implementation of a service, the following effects
will occur:

                          CHANGES TO ORDERS IN PROGRESS

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
Change Order Placed                 Charge                         Effect on Delivery
--------------------------------------------------------------------------------------------------
<S>                                  <C>            <C>
1st Week of Order Process            [***]          SLA implementation clock will begin again once
                                                    change is accepted
--------------------------------------------------------------------------------------------------
2nd Week of Order Process            [***]          SLA implementation clock will begin again once
                                                    change is accepted
--------------------------------------------------------------------------------------------------
3rd Week of Order Process            [***]          SLA implementation clock will begin again once
                                                    change is accepted
--------------------------------------------------------------------------------------------------
4th Week of Order Process            [***]          SLA implementation clock will begin again once
                                                    change is accepted
--------------------------------------------------------------------------------------------------
< 3 Days Before Delivery             [***]          sla implementation clock will begin again once
                                                    change is accepted
--------------------------------------------------------------------------------------------------
</TABLE>

Level 3 will accept [***] requested change of delivery date per circuit order.
Level 3 will begin billing the service on the day that the service is made
available to the customer.

(page 1 of 3)

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>   20

INSTALLATION OBLIGATIONS
Level 3 guarantees installation of its PLS within the following times beginning
with Level 3's acceptance of a customer order (see definition of order
acceptance on page 1) following Level 3's approval of client credit:

NATIONAL AND INTERNATIONAL PLS (GATEWAY CITIES ONLY)
<TABLE>
<CAPTION>
<S>                                  <C>      <C>    <C>    <C>    <C>    <C>   <C>
--------------------------------------------------------------------------------------------------
LEVEL 3 OBLIGATION                                                                  CREDIT
--------------------------------------------------------------------------------
Service                              Standard Service Delivery Intervals By
                                     Product (Business Days)*
                                     -------------------------------------------
                                     DS-1, E-1+     DS-3          STM-1/OC-3/
                                                                  OC-12
                                     -------------------------------------------
                                     NPLS   IPL     NPLS   IPL    NPLS    IPL
--------------------------------------------------------------------------------------------------
                                       20     20     20     20      20     20    [***]
ON-NET GATEWAY-TO-GATEWAY,
100% LEVEL 3 FIBER
--------------------------------------------------------------------------------
                                       40     40     60     60     ICB     ICB
NON-LEVEL 3 FIBER BETWEEN
GATEWAYS OR OFF-NET WITHIN SSA
(EITHER END)
--------------------------------------------------------------------------------
                                       40     ICB    ICB    ICB    ICB     ICB
OUTSIDE SSA (<50 MILES)
(EITHER END)
--------------------------------------------------------------------------------
</TABLE>

U.S. METROPOLITAN PLS

<TABLE>
<CAPTION>
<S>           <C>                               <C>                               <C>
-------------------------------------------------------------------------------------------------
LEVEL 3 OBLIGATION                                                                CREDIT
--------------------------------------------------------------------------------
Speed of      On-Net Building Service Interval* Off-Net Building Service Interval*
Service
-------------------------------------------------------------------------------------------------
E-1+          20 business days                  N/A                               [***]
--------------------------------------------------------------------------------
DS-1          20 business days                  40 business days
--------------------------------------------------------------------------------
DS-3          20 business days                  60 business days
--------------------------------------------------------------------------------
STM-1         20 business days                  Individual case basis
--------------------------------------------------------------------------------
OC-3          20 business days                  Individual case basis
--------------------------------------------------------------------------------
OC-12         20 business days                  Individual case basis
--------------------------------------------------------------------------------
OC-48         Individual case basis             Individual case basis
--------------------------------------------------------------------------------
OC-192        Individual case basis             Individual case basis
--------------------------------------------------------------------------------
</TABLE>

    *Service interval dates exclude any additional riser infrastructure within a
      building required to reach the customer suite (where this infrastructure
      is not already in place).
    +E-1 Off-Net Metro Private Line is not a stand-alone service in the U.S. In
      the U.S., this service is sold only in conjunction with an International
      Private Line.

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>   21

AVAILABILITY OBLIGATIONS
Level 3 makes the following additional guarantees respecting it's PLS:

PRIVATE LINE SERVICES AVAILABILITY
<TABLE>
<CAPTION>
<S>                                                                           <C>
-----------------------------------------------------------------------------------------------
LEVEL 3 OBLIGATION                                                            CREDIT+
-----------------------------------------------------------------------------------------------

99.99% SERVICE AVAILABILITY GUARANTEE*
Service Unavailability refers to a period during which there is a break in
transmission, reported to and confirmed by Level 3 Customer Service. The start
of the break is signaled by the first of ten consecutive severely erred
seconds ("SESs"), as defined below, and the end is signaled by the first of
ten consecutive non-SESs. An SES is a second with a bit error ratio of greater
than or equal to 1 in 1000. Service Unavailability does not include SESs
associated with maintenance events, customer-caused SESs or SESs caused by
companies other than Level 3. Customers will receive credits, calculated
monthly as an aggregate of all Service Unavailability events, in accordance
with the chart below:

-----------------------------------------------------------------------------------------------
Service unavailable      [***]                                                [***]
-----------------------------------------------------------------------------------------------
Service unavailable      [***]                                                [***]
-----------------------------------------------------------------------------------------------
Service unavailable      [***]                                                [***]
-----------------------------------------------------------------------------------------------
Service unavailable      [***]                                                [***]
-----------------------------------------------------------------------------------------------
Service unavailable      [***]                                                [***]
-----------------------------------------------------------------------------------------------
+The total number of credits per month is limited to the Monthly Recurring
Charge (MRC) for the affected service.

Service Availability is calculated from the ingress of the Level 3 Network to
the egress of the Level 3 network. Where a customer is served directly by the
Level 3 Metro networks (lit by Level 3 fiber) this parameter is extended to
the customer building. Where we are dependant upon a third party for local
connectivity to the backbone, the availability of 99.99% is applicable from
Level 3 Gateway to Level 3 Gateway. For circuits terminating in Germany, the
local loop will hold, and the availability target of 97.5% is applicable.
Please see note on Germany below.

*NOTE: IF THE CUSTOMER HAS SIGNED A CONTRACT GOVERNED BY GERMAN LAW, AND/OR
PRIVATE LINE SERVICE IS PROVISIONED IN GERMANY, THE FOLLOWING AVAILABILITY
GUARANTEE SHALL INSTEAD APPLY:

LOCAL LOOP GUARANTEE: 97.5% ANNUAL AVAILABILITY
The unavailability time is calculated as the total number of outages a
customer experiences during a calendar month. The maximum unavailability time
may vary depending on the total number of days in the month. Example: in a
365-day year, the unavailability maximum would be 219 hours. If Level 3
exceeds the maximum unavailability time of 219 hours over the first 12 months
of the customer's contract, then Level 3 would be liable to pay the customer
service credits for the unavailability time exceeding 219 hours.

-----------------------------------------------------------------------------------------------
</TABLE>

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

<PAGE>   22

MANAGED MODEM SERVICE LEVEL AGREEMENT

Level 3 U.S. Managed Modem Services are backed by the following Service Level
Agreement (SLA). If the Level 3 obligation is missed, the credit set forth below
will be issued to the customer if requested, once verified by Level 3. The total
number of credits per month is limited to the Monthly Recurring Charge (MRC) for
the affected service.

Level 3 provides a toll-free number connecting the customer to Level 3 Customer
Service for all issues -- including technical, billing, and product inquiries:
1-877-4LEVEL3 (1-877-453-8353).

ORDER ACCEPTANCE DEFINITION
An order is accepted by Level 3 (for the purposes of this Installation Guarantee
only) as soon as the Order Entry Specialist receives the order in Customer
Implementation Management (CIM).

                             OBLIGATIONS AND CREDITS
<TABLE>
<CAPTION>
<S>                                                                <C>
---------------------------------------------------------------------------------------------------
                      LEVEL 3 OBLIGATION                                     CREDIT
---------------------------------------------------------------------------------------------------
                                                               -  [***]
90% CALL SUCCESS RATE (CSR)
-   CSR will be determined by Level 3 thorugh its own internal
    reporting procedures. The CSR will be calculated by having
    an automated dialing device randomly dial into the Managed
    Modem network over meet point billing trunks and calculate
    the number of IP sessions established vs. the number of
    failures. The formula for calculation is as follows:  (#
    Successful Attempts / Total Attempts)
-   The CSR will be calculated on a monthly basis. Credits
    will be based on the Monthly Average CSR. In the event
    that the customer reports the missed SLA within 15 days of -
    the of the last day of the previous month, the credits
    will be generated for the customer and reflected on the
    next invoice.
-   Unsuccessful call attempts caused by outages associated
    with maintenance events, customer caused outages or        NOTE:   CREDITS CANNOT EXCEED
    disruptions, the performance of Internet networks          CUSTOMER'S TOTAL MRC.
    controlled by other companies, or traffic exchange points
    which are controlled by other companies shall not be       NOTE:   CSR SLAS NOT SUPPORTED
    included in the calculation of the monthly call success    FOR ISDN.
    rate.
-   In the event that Level 3 is unable to provide service for
    more than 15 consecutive minutes in a given day (a
    "Catastrophic Outage"), a one- day credit will be given
    for the ports affected. The 15-minute consecutive outage
    will be measured from the time that Level 3 Customer
    Service is contacted, a trouble ticket is established, and
    the time the service has been reestablished.  No more than
    one daily credit will be given regardless of the outage
    time. Catastrophic Outages must be reported to Level 3
    within 10 hours of occurrence to receive credit.
---------------------------------------------------------------------------------------------------
</TABLE>

(page 1 of 1)

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

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