WebTV 2000 Pricing
TERM SHEET
6/18/99
The following terms and conditions comprise the basis for Amendment Five to the
Agreement dated February 1, 1997 by and between Concentric Network Corporation
('CNC') and WebTV Networks Inc. ('WNI'), as amended (the 'Agreement'). All
other terms and conditions of the Agreement will remain in effect unless
explicitly stated otherwise in this Term Sheet. The parties acknowledge and
agree that the following sets forth their agreement on the terms set forth
herein which shall be embodied in a definitive amendment or restated agreement
pursuant to Section 9 of this Term Sheet, which amendment or restatement may
include additional terms and conditions necessary to effectuate the terms and
conditions set forth herein.
Additionally, notwithstanding that WNI and CNC are the only parties to the
Agreement, CNC hereby agrees that all terms and product offerings of the
Agreement, including those set forth in this Term Sheet, shall be available to
any Microsoft organization, including Microsoft Corporation and all its
subsidiaries, for the duration of the term of the Agreement on the same terms
and conditions offered to WNI.
1. Interim [*] for Vport Level and Pricing:
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Timeframe [*] Price Per As Available
Vport Level Vport Price
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Jul-99 [*] $[*] $[*]
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Aug-99 [*] [*] [*]
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Sep-99 [*] [*] [*]
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Oct-99 [*] [*] [*]
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Nov-99 [*] [*] [*]
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Dec-99 [*] [*] [*]
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The foregoing Vport pricing and all subsequent Vport pricing in this
Amendment shall apply across all POP Classes and across all Vports used by
WNI except as defined in paragraph 4 of this Term Sheet.
2. Vport Pricing and [*] for the years 2000, 2001, 2002.
The following table sets forth the maximum Vport pricing to be charged WNI
during the calendar year ending on the respective date as set forth below.
The parties will meet every 6 months to discuss the monthly Vport forecast
to determine the rate at which Vports will be added between annual period
ending dates. At such time, the parties may mutually agree in writing to
modify the [*] for any given month during the respective calendar year
(similar to the form set forth in Paragraph 1 of this Term Sheet for the
period July 1999 through December 1999). Absent such an agreement, the [*]
for each month during the calendar year shall be equal to the [*] per the
table
6/18/99
1
WebTV/Concentric Network Confidential
* Certain information on this page has been omitted and filed separately with
the Securities Exchange Commission. Confidential Treatment has been
requested with respect to the omitted portion.
below. In the event that in any given month WNI does not [*] traffic
level, WNI shall [*]. Additionally, WNI will exercise reasonable business
efforts to [*] or more of the total [*] that have been mutually agreed for
build out and use by WNI.
Annual Period Vport Calendar Price per As
Ending [*] Period Pricing Vport Available
Level at Effective Price
Period Ending
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Dec 31, 1999 [*] [*] [*] [*]
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Dec 31, 2000 [*] [*] [*] [*]
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Dec 31, 2001 [*] [*] [*] [*]
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Dec 31, 2002 [*] [*] [*] [*]
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Beginning with the Period Ending date of December 31, 2000 [*] in the event
that the actual number of WebTV Network subscribers at the Period Ending
date is less than [*] of the amount set forth in WNI's marketing projections
for such Period Ending date, then the corresponding Vport Commitment Level
at Period Ending and the minimum Vport commitment level for such month of
December shall be reduced in equal proportion to the difference between
WNI's actual subscribers and the marketing projections for such Period
Ending date. For example, if WNI projects to have [*] subscribers at the
period ending December 31, 2000, but actually has only [*] subscribers at
such time, the Vport [*] Level at Period Ending December 31, 2000 shall be)
and the minimum Vport commitment level for the month of December 31, 2000
shall be [*] less then the level set in accordance with the first paragraph
of this Section 2. The WNI [*] shall be provided by WNI under separate cover
in a confidential letter to the CNC officer designated by CNC, concurrently
with the signing of this Amendment.
3. Hourly Pricing:
Effective January 1, 2000, the rate for hourly usage will be $[*] per hour
in all POP classes with the exceptions defined in paragraph 4 of this
Amendment. The hourly traffic will be used predominantly for overflow
traffic from WNI's other IAP providers
4. Hourly and Vport pricing excludes [*]. Pricing for [*] is as follows:
Vport: $[*] US [unchanged from the previous agreements]
Hourly Usage: $[*] US per hour [unchanged from the previous agreements]
These prices may change, subject to mutual agreement, as long as [*] Vport
and [*] are met. Notwithstanding the different pricing set forth in this
Paragraph, use of Vports in [*] shall be counted towards WNI's Vport [*]
[*] as set forth in Section 1 and 2 of this Term Sheet.
6/18/99
2
WebTV/Concentric Network Confidential
* Certain information on this page has been omitted and filed separately with
the Securities Exchange Commission. Confidential Treatment has been
requested with respect to the omitted portion.
5. Term: From July 1, 1999 through December 31, 2002 plus ramp-down as
described in paragraph 7 below)
6. Effective Date: This Amendment is effective July 1, 1999.
7. Renegotiation:
Prior to August 1, 2002, WNI and CNC shall negotiate in good faith regarding
new pricing, terms and conditions to be effective January 1, 2003. If the
parties cannot agree on new pricing, terms and conditions by the end of the
term of the Agreement, the Agreement shall terminate in accordance with its
terms and the ramp-down period will begin. The starting point for the ramp
down will be determined by the Vport usage level achieved in the final month
of the term. The ramp down shall begin no earlier than [*], and end no
sooner than [*]. During the ramp-down period, either party may ramp-down
Vport usage at a rate of no more than [*] per quarter.
8. Deletion of Section 5.1.6
Section 5.1.6 of the Agreement, added as part of Amendment 1 dated November
1, 1997, is hereby deleted.
9. Preparation of Amendment
Following the mutual execution of this Term Sheet, the parties will promptly
prepare and execute a definitive amendment to the Agreement based upon this
Term Sheet. If mutually agreed, such amendment may be accomplished by the
execution of an amended and restated agreement in lieu of an amendment.
Until such time as a definitive amendment is executed (whether or not such
definitive amendment is executed), the terms and conditions of this Term
Sheet shall govern the conduct of business between the parties pursuant to
the Agreement effective July 1, 1999.
Agreed to and Accepted:
CONCENTRIC NETWORK WEBTV NETWORKS, INC.
By: By:
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Printed Name: Printed Name:
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Title: Title:
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Date: Date:
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6/18/99
3
WebTV/Concentric Network Confidential
* Certain information on this page has been omitted and filed separately with
the Securities Exchange Commission. Confidential Treatment has been
requested with respect to the omitted portion.
WebTV 2000 Pricing Term Sheet - Concentric Network Corp. and WebTV Networks Inc.
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