\n Term Section
\n —- ——-
\n <\/p>\n Effective Date Preamble<\/p>\n
Customer(s) Recital “C”<\/p>\n
Integrated Browser 2.4<\/p>\n
Alternate Services 2.4<\/p>\n
System 3.1<\/p>\n
Release Date 4.1<\/p>\n
Service Term 4.1<\/p>\n
Contract Year 4.1<\/p>\n
Customer Support Center 4.2.4<\/p>\n
Confidential Information 5.1.1<\/p>\n
License Agreement 5.4<\/p>\n
Transition Period 6.4<\/p>\n
Execution Date Signature Page<\/p>\n
Minimum Performance Standard(s) Exhibit “A”<\/p>\n
Target Performance Standard(s) Exhibit “A”<\/p>\n
Monthly Reconciliation Exhibit “D”
\n<\/c><\/s><\/caption>\n<\/table>\n
2. Concept of Operations and General Agreement.
\n ——————————————- <\/p>\n
2.1 Concept of Operations. Intuit desires to make available the
\n ———————
\nInternet Services to its Customers by the distribution of certain Internet
\nFeatures with any or all of the Products as Intuit may determine in its sole
\ndiscretion, and to obtain Non-Internet Traffic Services from CNC from time to
\ntime. As a part of the CNC Services, CNC shall provide the following: Customer
\nlogon and registration in a format provided or approved by Intuit, service
\nupgrades, account management, credit approvals, Customer billing; reporting
\nnetwork and infrastructure management, operation and maintenance; Access;
\nprovision of Internet Services and Non-Internet Traffic Services; and<\/p>\n
4<\/p>\n
customer and technical support. CNC will charge Intuit for the CNC Services in
\naccordance with Section 4.3. Intuit will independently establish its charges to
\nCustomers for the Internet Services, and CNC will bill the Customers on behalf
\nof Intuit on such terms and conditions as Intuit may determine in its sole
\ndiscretion.<\/p>\n
2.2 CNC Network Structure. The current and proposed structure of the
\n ———————
\nCNC Network is described in Exhibit “A” attached hereto. CNC has established
\n ———–
\nand is implementing the Network Plan to expand, improve and enhance the
\ncapabilities of the CNC Network to facilitate its support of Intuit.<\/p>\n
2.3 General Agreement. Intuit and CNC will perform the Development
\n —————–
\nProject pursuant to Section 3 to support CNC’s ability to provide the Internet
\nServices. Thereafter, subject to the terms of this Agreement, CNC will provide
\nduring the Service Term, and Intuit will use, the CNC Services in the
\ncontinental United States and Canada so long as CNC is not in breach of this
\nAgreement. CNC will perform the CNC Services in accordance with the highest
\nprofessional and technical standards for services of this nature, and will
\nstrictly comply with any related performance capabilities, accuracy,
\ncompleteness, characteristics, specifications, configurations, standards and
\nrequirements set forth in this Agreement. However, notwithstanding anything to
\nthe contrary in this Agreement, Intuit shall have the right to determine which,
\nif any, Internet Services to include with each of its Products.<\/p>\n
2.4 Qualified Exclusivity. During the Service Term (except during
\n ———————
\nany Transition Period), Intuit will offer any Intuit-branded Internet access
\nservices to Customers in the continental United States and Canada using Internet
\nbrowsers integrated into the Products exclusively through CNC. However, the
\nforegoing exclusivity provision shall not apply to high band width access
\nservices (such as interactive television, cable modem, ISDN, or other services
\nwhich operate at speeds greater than 28.8 Kbps). Furthermore, the foregoing
\nexclusivity provision shall not prevent or prohibit any of the following
\nactivities, provided that Intuit does not provide an Integrated Browser in
\nconjunction with such activities: (a) Intuit from providing general access to
\nthe Intuit Areas from, by or through the Internet or any other networks, content
\nareas, content providers, on-line services or access service providers (for the
\npurposes of this Section 2.4, collectively referred to as “Alternate Services”)
\n(b) Intuit’s customers from using any other Alternate Services in any manner
\nthey choose, (c) Intuit from maintaining content areas on or through other
\nAlternate Services, (d) Intuit from providing links to the Intuit Areas from, by
\nor through other Alternate Services, or (e) Intuit from engaging in marketing or
\npromotional activities (including but not limited to joint product distribution)
\nwith other Alternate Services. An Integrated Browser shall be defined as an
\nInternet browser which is both (a) distributed with an Intuit Product and (b)
\nintegrated with such Product so that it is installed via the same installation
\nroutine and can be launched from directly within such Product. Upon (i) the
\ntermination or expiration of this Agreement or (ii) CNC’s Net Working Capital
\n(as defined in the Stand-By Financing Agreement) falling below one million
\ndollars ($1,000,000), the foregoing exclusivity provision shall cease to be
\neffective and in any event shall not apply to any Transition Period during
\nwhich Intuit uses CNC Services pursuant to Section 6.4.<\/p>\n
3. System Development and Tests.
\n —————————- <\/p>\n
3.1 System Development. In accordance with the Development Project
\n ——————
\nWork Statement attached hereto as Exhibit “B”, the parties shall perform their
\n ———–
\nrespective Development Project obligations (at their own cost) to develop,
\nimplement, execute, integrate and test the software code (including the CNC
\nCode), hardware and software systems, procedures and installation to develop an
\noverall system to offer the Internet Services (collectively, the “System”).
\nDuring the Term of this Agreement, CNC (i) warrants that the CNC Code shall meet
\nall its specifications to support Intuit’s provision of the Internet Services,
\n(ii) will provide to Intuit at no<\/p>\n
5<\/p>\n
charge unlimited telephone access to CNC’s technical support staff to obtain
\nassistance relating to the CNC Code, and (iii) will develop and deliver to
\nIntuit at no charge any maintenance or feature releases, and related
\ndocumentation, to correct a programming error or other defect or to increase or
\nenhance the features or functionality of the CNC Code which CNC makes available
\nas a standard feature of its standard commercial release during the Term.<\/p>\n
3.2 System Tests. Upon completion of the development phase, Intuit
\n ————
\nand CNC shall jointly test the System and CNC Network to ensure compliance with
\nthe Network Specifications and the Performance Standards. The tests and related
\nacceptance procedures for the System and CNC Network are set forth in the
\nDevelopment Project Work Statement.<\/p>\n
4. Post-Development Provision of Services.
\n ————————————– <\/p>\n
4.1 Introduction of Services. Once the development and testing of
\n ————————
\nthe CNC Services and the System is completed to Intuit’s satisfaction, then
\nIntuit may announce the availability of the Internet Services in connection with
\nthe release of one or more of the Products in a manner that Intuit shall
\ndetermine. If Intuit elects to offer the availability of the Internet Services,
\nthe date that Intuit sets for the release of its first Product offering the
\nInternet Services shall be the “Release Date,” which the parties acknowledge is
\nOctober 26, 1995. For an initial period of three years from and after the
\nRelease Date plus the length of any Transition Period pursuant to Section 6.4
\n(together, the “Service Term”), CNC shall provide the CNC Services and Intuit
\nshall pay for the CNC Services in accordance with this Agreement. Thereafter,
\nthe Service Term may be extended at the option of Intuit in successive one-year
\nperiods up to a maximum of three additional years, provided that Intuit notifies
\nCNC in writing of Intuit’s election to extend this Agreement at least 120 days
\nprior to the expiration of the Service Term then in effect. Each twelve month
\nperiod during the Service Term commencing on the Release Date, or its
\nanniversary, shall be known as a “Contract Year,” i.e., First Contract Year,
\n —-
\nSecond Contract Year, etc.
\n — <\/p>\n
4.2 Ongoing Operations and Customer Support. With respect to
\n —————————————
\nInternet Services offered by Intuit, CNC shall perform the following obligations
\nduring the Service Term:<\/p>\n
4.2.1 Customer Logon, Registration and Upgrades. CNC shall logon,
\n —————————————–
\nregister and upgrade Customers in accordance with the procedures set forth in<\/p>\n
Exhibit “C” attached hereto or as the parties may otherwise agree. CNC shall
\n———–
\ncollect and maintain Customer Information in a form available for electronic
\naccess by Intuit and as Intuit may from time to time direct. CNC shall
\nperiodically provide to Intuit Customer Information collected by CNC in a scope
\nand format reasonably requested by Intuit.<\/p>\n
4.2.2 Customer Information. Notwithstanding anything to the
\n ——————–
\ncontrary in this Agreement, Intuit shall be the sole owner of all Customer
\nInformation, including any and all associated intellectual property rights. CNC
\nacknowledges that (i) the Customer Information is a “trade secret” under the
\nUniform Trade Secrets Act of California, (ii) Intuit has maintained and intends
\nto maintain the Customer Information as proprietary and confidential
\ninformation, and (iii) the unauthorized use, loss or disclosure of such Customer
\nInformation will cause irreparable harm to Intuit. Therefore, notwithstanding
\nanything to the contrary in this Agreement, during and after the Term hereof,
\nCNC shall (i) use and copy the Customer Information only for purposes reasonably
\nrelated to and as permitted by this Agreement, and not, directly or indirectly,
\nuse the Customer Information for its benefit or the benefit of anyone else, or
\nin any way against Intuit’s interest, and (ii) diligently safeguard the Customer
\nInformation and shall not permit or authorize the disclosure of any of the
\nCustomer Information to any third person or entity, either directly or
\nindirectly, without Intuit’s prior written authorization. Notwithstanding the
\nabove, CNC shall have the right to maintain and use general network usage
\nstatistics including the usage by the Intuit Customers, provided that<\/p>\n
6<\/p>\n
such aggregated data does not contain information on individual Customers. CNC
\nshall return or destroy (and provide a written officer’s certificate to such
\neffect) any Customer Information, and all copies thereof, in any form upon
\nIntuit’s request and, in any event, upon the termination or expiration of this
\nAgreement. CNC acknowledges that a breach of this section would cause
\nirreparable harm to Intuit, which would entitle Intuit to seek the relief
\ndescribed in Section 5.1.3.<\/p>\n
4.2.3 Customer Account Management. CNC shall use reasonable
\n —————————
\nefforts to make detailed usage and billing information available in electronic
\nformat on line to each Customer and Intuit. CNC is responsible for verifying
\nall Customer credit and billings, and bears the risk of loss for any subsequent
\ncredits given to Customers where such credits are caused by CNC’s failure to
\nperform in accordance with this Agreement.<\/p>\n
4.2.4 CNC Customer Support Center. CNC shall establish and
\n —————————
\nmaintain, or cause to be established and maintained, facilities, equipment,
\nstaffing and programming, collectively making up the “Customer Support Center,”
\nas necessary to collect and maintain the Customer Information, and provide
\nInternet Services and technical and account support to the Customers and Intuit.
\nIn this regard, CNC shall do each of the following:<\/p>\n
4.2.4.1 Plan for, provide, maintain, operate, and manage the
\nCustomer Support Center, including space, equipment, utilities, personnel and
\nsystems. The Customer Support Center shall include a telephonic help desk for
\nCustomers, which will be staffed by knowledgeable CNC employees and\/or
\nsubcontractors capable of providing assistance relating to Access and use of the
\nInternet Services. Such telephone assistance shall be available to Customers on
\na continuous basis, twenty-four (24) hours per day, seven (7) days per week.<\/p>\n
4.2.4.2 Plan for, acquire, install, maintain, repair, operate,
\nmanage, and expand, improve, or replace hardware as necessary or appropriate to
\nsupport and operate the Customer Support Center, including any computer systems,
\ndirect access storage devices, tape units, communications control units, and
\nassociated equipment.<\/p>\n
4.2.4.3 Plan for, obtain, install, maintain, operate, and enhance
\nthe operating system software, languages, utilities, and other system software
\nas necessary or appropriate to support and operate the Customer Support Center.<\/p>\n
4.2.4.4 Maintain the Customer Information, including related
\nCustomer Information structures; provide back-up measures, recovery procedures,
\nfile maintenance and expansion, updating, tape storage, management, and control
\nof space utilization; and provide related data security and administration.<\/p>\n
4.2.4.5 Establish and administer change controls, problem
\nresolution management, and provide planning, availability management,
\nperformance reporting, implementation procedures, and other controls.<\/p>\n
4.2.4.6 Notify Intuit reasonably in advance of making any
\nmaterial changes to the Customer Support Center or CNC Network.<\/p>\n
4.2.4.7 Meet as requested with Intuit and evaluate the Customer
\nSupport Center and related Customer technical support services with a view
\ntoward enhancing them to meet the needs and demands of Customers.<\/p>\n
4.2.5 CNC Network Performance, Maintenance and Upgrades.
\n ————————————————- <\/p>\n
7<\/p>\n
4.2.5.1 CNC Network Performance. During the Term, the CNC Network
\n ———————–
\nshall perform at a level satisfying or exceeding the Performance Standards.
\nDuring the Service Term, upon request, CNC will meet with Intuit to review the
\nnetwork performance. Subsequent to such a review, Intuit may request that CNC
\n(i) improve and enhance the CNC Services and operation of the CNC Network
\n(including increasing capacity and coverage by the addition of Ports and POPs)
\nin excess of the improvements and enhancements set forth in the Network Plan, or
\n(ii) develop and maintain the CNC Network so that it is at least comparable to
\nand competitive with the functions and features available from other Internet
\naccess providers. If CNC declines to make improvements reasonably requested by
\nIntuit in a timely manner, Intuit may elect to terminate the Agreement as
\nprovided in Section 6.1. Periodic reports on the CNC Network’s operations and
\nperformance shall be developed and provided to Intuit as it may reasonably
\nrequest, in addition to any other reports required by this Agreement.<\/p>\n
4.2.5.2 General Network Maintenance. During the Service Term, CNC
\n —————————
\n shall do each of the following:<\/p>\n
(a) Plan for, obtain, provide, operate, and maintain the CNC Network
\nfacilities and hardware, whether at its central sites or at POPs, hubs or remote
\nnodal sites or central location sites, including ordering, installing and
\nmaintaining owned or leased telecommunications lines, backbones, tail circuits,
\ndial-switched services and satellite services, modems, multiplexers,
\nconcentrators, control computers, switching devices, and satellite transmitting
\nand receiving equipment.<\/p>\n
(b) Develop and maintain Internet Protocol interfaces, and
\nconfiguration, and provide capacity planning, technology evaluation and
\nselection, communications tariff evaluation, topology planning, network control
\nplanning and related software development, interface standards development,
\nprotocol conversion and development of protocol converters.<\/p>\n
(c) Operate and maintain the CNC Network on a twenty-four hour a day
\nseven days a week basis, including monitoring the network; provide necessary
\nrepairs, network back-up, problem resolution, and testing; and provide for
\nrecovery of the CNC Network and the physical security of the CNC Network and its
\nrelated operating facilities.<\/p>\n
(d) Provide and maintain any interfaces between the Intuit Areas and
\nthe Customers (provided that Intuit is responsible for the cost of any direct
\nphone lines between CNC and Intuit).<\/p>\n
(e) Provide library and address maintenance, management, and
\nadministration and such other resources as may be reasonably necessary or
\nappropriate for the development and maintenance of the database containing the
\nCustomer Information.<\/p>\n
4.2.5.3 Telephone Assistance Provided to Intuit. CNC shall maintain
\n —————————————
\na technical help desk for Intuit, which will be staffed by knowledgeable CNC
\nemployees capable of providing technical assistance regarding the CNC Services,
\nCNC Network and Customer Information. Such telephone assistance shall be
\navailable to Intuit on a continuous basis, twenty-four (24) hours per day, seven
\n(7) days per week. The help desk also will administer resolution of network
\nproblems encountered by Intuit and the Customers and keep Intuit apprised of the
\nefforts to be taken to remedy such problems until complete restoration of
\nservice.<\/p>\n
4.2.5.4 Annual Service Plans. At least ninety days before the
\n ——————–
\nbeginning of each Contract Year, Intuit shall prepare and deliver to CNC a non-
\nbinding services<\/p>\n
8<\/p>\n
forecast that identifies Intuit’s estimated usage and demand requirements for
\nsuch period, including estimated capacity requirements and resource use in terms
\n(for example) of the estimated number of Customers and usage volumes, and
\nadditional Customer Information that will be required by Intuit. CNC and Intuit
\nshall meet and confer for the purpose of refining the services forecast on a
\nbasis that reasonably takes into account the Customers’ expected needs and CNC’s
\nexisting and planned resources. CNC shall use its reasonable best efforts to
\nmake available the resources at the level required to support Intuit’s
\nforecasted annual services.<\/p>\n
4.2.5.5 Priorities and Response Time. In the event of any
\n —————————-
\nunscheduled downtime of the CNC Network or the System, or problems affecting
\nthe functioning or productivity thereof or the provision of Internet Services or
\nthe CNC Services, CNC shall provide installation and emergency maintenance and
\nrepair service as determined in accordance with the following priority
\nclassifications:<\/p>\n
(a) Priority 1: Any problem that interrupts the continued
\navailability of the CNC Network or CNC Services to Intuit or the Customers, or
\ncauses severe user disservice. In such event, CNC shall take immediate
\ncorrective action regarding the problem, on a continuous basis, twenty-four
\nhours per day, seven days per week, until the problem is resolved.<\/p>\n
(b) Priority 2: A critical problem involving any application or
\nsystem of the CNC Network that does not yet, but could if not corrected,
\ninterrupt the continued availability of the CNC Services or cause severe user
\ndisservice. CNC shall take immediate corrective action regarding the problem,
\non a continuous basis during normal business hours (eight hours per day, five
\ndays per week), until the problem is resolved.<\/p>\n
(c) Priority 3: A problem that does not impair the availability of
\nthe CNC Services or CNC Network significantly, because temporary procedures are
\nin place to provide acceptable alternative operation of functionality. CNC
\nshall schedule and work on the class of problem on a time-available basis.<\/p>\n
4.2.5.6 Scheduled Downtime. CNC shall provide at least ten days
\n ——————
\nadvance written notice to Intuit and affected Customers of any
\nscheduled downtime of the CNC Network or other events that may affect the
\navailability of the CNC Services. CNC shall schedule major upgrades, downtime,
\nrepairs, or maintenance to the CNC Network during times mutually agreeable with
\nIntuit.<\/p>\n
4.3 Charges for CNC Services.
\n ———————— <\/p>\n
4.3.1 Quarterly Usage Forecasts. Each month, Intuit shall provide
\n ————————-
\nCNC with a non-binding monthly usage forecast for the subsequent three calendar
\nmonths containing the information set forth in Exhibit “D” (e.g. in October,
\n ———– —-
\nIntuit would provide a usage forecast for each of November, December and
\nJanuary). The forecasts will be based, in part, on the usage data made
\navailable by CNC.<\/p>\n
4.3.2 Service and Customer Charges.
\n —————————- <\/p>\n
4.3.2.1 Service Charges. The Service Charges are the fees
\n —————
\npayable by Intuit to CNC for the CNC Services based on the Customers’ connect
\ntime. If Intuit systematically and fundamentally alters the way it offers and\/or
\nprices Internet access to its Customers, the parties will negotiate in good
\nfaith regarding appropriate adjustments to this Agreement. CNC and Intuit shall,
\npursuant to the procedures in Exhibit “D”, perform the Monthly Reconciliation to
\n ———–
\ndetermine the Service Charges payable by Intuit. Any delinquent payments by<\/p>\n
9<\/p>\n
either party under this Agreement shall bear interest at the rate of 1.5% per
\nmonth commencing thirty days after such payment is due.<\/p>\n
4.3.2.2 Most Favorable Treatment. During the Service Term but
\n ————————
\nexcluding the Transition Period, CNC warrants to Intuit on a continuing basis
\nthat the rates and terms under this Agreement for the CNC Services shall not
\nexceed those offered by CNC to other CNC customers purchasing the same or fewer
\nquantities of connect hours for the same or similar services. If CNC offers to
\nany other similarly situated customer similar work, services, or products at
\nlesser rates or on more favorable terms, CNC shall immediately notify Intuit of
\nsuch circumstances and, thereafter, CNC shall charge Intuit such lesser service
\ncharges and offer such more favorable terms for all remaining CNC Services under
\nthis Agreement.<\/p>\n
4.3.3 Customer Charges, Billing and Collection. The Customer
\n —————————————-
\nCharges are the fees payable by the Customers for the Internet Services provided
\nby Intuit. Intuit reserves the right, exercised in its sole discretion, to
\ncharge and may charge the Customers additional fees (i.e., an amount greater
\n —-
\nthan the Service Charges) for their access to and use of the Internet Services.
\nThe initial procedures for such charges are set forth in Exhibits “B” and “D”
\n ———————
\nhereto. CNC assumes sole responsibility and risk for establishing credit
\naccounts, verifying and billing Customers’ credit card accounts and billing and
\ninitiating processing for all Customer Charges for the Internet Services as
\ndescribed in Exhibits “B” and “D”. Processing fees paid to third parties for
\n ———————
\nthe purpose of processing credit card, debit card or other payment transactions
\nshall be Intuit’s responsibility.<\/p>\n
4.3.4 Record Keeping and Audits. CNC shall maintain complete and
\n ————————-
\naccurate books, records and accounts relating to the CNC Services and Internet
\nServices to support and document all charges, billings, mark-up amounts, and
\ncredits, in accordance with standard accounting principles consistently applied
\nwith respect to prior periods. Intuit’s representatives, including any
\nindependent auditor or accounting organization retained by Intuit, shall have
\naccess to such books, records and accounts, upon reasonable notice to CNC, for
\npurposes of reviewing, verifying and copying such books, records and accounts.
\nIntuit shall have the right to demand such an audit up to two times in any given
\n12 month period. If such an audit discloses an under calculation in excess of
\nfive percent (5%) of the amount payable to Intuit, then CNC shall bear the cost
\nof such examination, and shall promptly correct the calculation of amounts
\npayable and pay any underpaid amount, plus interest for delinquent payments as
\nset forth in Section 4.3.2.1 from the date such amount was due and payable.<\/p>\n
4.3.5 No Other Payment, Etc. Except as otherwise expressly
\n ———————
\nprovided in this Agreement, neither party shall be entitled to payment, cost
\nreimbursement, or other compensation from the other party in respect of its
\nperformance, and each party shall bear all its own expenses incurred in
\nrendering performance, including facilities, work space, utilities, management,
\npersonnel, communications, clerical, supplies, and the like.<\/p>\n
4.3.6 Taxes. CNC is responsible for promptly collecting and
\n —–
\npaying all federal, state, county, services or other taxes, however designated
\nand whether levied or based upon the CNC Services, exclusive however of taxes
\nbased on Intuit’s net income.<\/p>\n
4.4 Customer Information and CNC Network Security. CNC shall develop
\n ———————————————
\nand implement systems and procedures to maintain strict security of all Customer
\nInformation (including credit card information). Guidelines on the security of
\nsuch information is set forth in Exhibit “E” attached hereto. Intuit’s
\n ———–
\nrepresentatives, upon reasonable advance notice to CNC, may conduct periodic
\nsecurity audits of CNC’s sites and the systems relating to the Internet Services
\nand CNC Services to determine whether the security mechanisms (physical,
\nprocesses, etc.) are sufficient to protect the applicable data.
\n — <\/p>\n
10<\/p>\n
5. Related Covenants.
\n —————– <\/p>\n
5.1 Confidential Information.
\n ———————— <\/p>\n
5.1.1 Confidential Nature. During the course of this relationship,
\n ——————-
\nthe parties may disclose to the other certain confidential information orally,
\nin writing or through facility visits, which information may include, but is not
\nlimited to, financial information or projections; lists of and information about
\nagents, vendors, suppliers, dealers, customers, potential customers, and
\nstatistical and financial information associated therewith; specifications and
\nuses of products and services; product research; sales, marketing and strategic
\nplans; pricing policies; products and availability information; and information
\notherwise defined as “trade secrets” under the Uniform Trade Secrets Act of
\nCalifornia (collectively, “Confidential Information”); provided, however, that
\nConfidential Information does not include information that can be documented as
\nbeing known within the industry prior to the Effective Date or information that
\nbecomes publicly available thereafter through no breach of this Agreement by any
\nparty hereto. The parties have maintained and will continue to maintain the
\nConfidential Information as their own private, proprietary and confidential
\ninformation and as their business trade secrets. Sometimes this information may
\nbe stamped “Trade Secret,” “Confidential,” or with a similar designation, but
\nfailure to do so will not in and of itself impair the classification of
\ninformation as Confidential Information.<\/p>\n
5.1.2 Restrictions. The Confidential Information contains
\n ————
\nvaluable business and technical information and constitutes trade secrets, and
\nthe parties acknowledge that the unauthorized use, loss or disclosure of such
\nConfidential Information will cause irreparable harm to the owner of such
\nConfidential Information. The parties shall use the Confidential Information
\nonly for purposes relative to and as permitted by this Agreement. During the
\nTerm and for a period of two years thereafter, neither party shall directly or
\nindirectly use the Confidential Information for its benefit or the benefit of
\nanyone else, except as otherwise permitted in writing, or in any way against the
\nother party’s interest. Each party shall diligently safeguard the Confidential
\nInformation and shall not, during the Term and for a period of two years
\nthereafter, disclose, permit the disclosure of, or authorize the disclosure of
\nany of the Confidential Information to any third person or entity, either
\ndirectly or indirectly, unless prior written authorization is granted by the
\nowner thereof. The parties shall not make any copies of any of the Confidential
\nInformation, except as reasonably required to perform its obligations under this
\nAgreement, and shall return any such Confidential Information including, without
\nlimitation, all notes, memoranda, records, plans, sketches, or other documents,
\nand all copies thereof, embodying, regarding or derived from any Confidential
\nInformation, upon oral or written request, and, in any event, upon the
\ntermination or expiration of this Agreement.<\/p>\n
5.1.3 Injunctive Relief. The parties acknowledge that a breach of
\n —————–
\nthis Section 5.1 would cause irreparable harm to an owning or injured party,
\nwhich would not have an adequate remedy at law with respect to disclosure or
\nthreatened disclosure of the Confidential Information. Therefore, in the event
\nof a breach or threatened breach of the obligations contained in this Section
\n5.1, either party is entitled to seek the immediate issuance, without notice,
\nhearing, or bond, of a temporary restraining order precluding the continuance of
\nthe conduct in question and may pursue other injunctive relief.<\/p>\n
5.2 Publicity. CNC shall not issue press releases, conduct
\n ———
\npromotional efforts or engage in any other publicity of any nature regarding
\nthis Agreement or CNC’s relationship with Intuit or disclose any of the terms of
\nthis Agreement without the prior written approval of Intuit, except to the
\nextent required for regulatory or statutory public reporting purposes.<\/p>\n
11<\/p>\n
5.3 Relationship of Parties. The parties acknowledge and
\n ———————–
\nagree that each party has entered into this Agreement as an independent
\ncontractor. Nothing in this Agreement shall be construed as creating any other
\nrelationship between the parties including, but not limited to, any partnership
\nor joint venture between Intuit and CNC.<\/p>\n
5.4 Grant of License. Concurrent with the execution and
\n —————-
\ndelivery of this Agreement, Intuit and CNC shall execute and deliver a License
\nAgreement substantially in the form of Exhibit “F” attached hereto (the “License
\n ———–
\nAgreement”).<\/p>\n
5.5 Future Network Services. CNC acknowledges and agrees that
\n ———————–
\nimplementation of the CNC Services as contemplated in this Agreement will
\nrequire a significant percentage of CNC’s available resources. CNC therefore
\nagrees that from the Effective Date until February 28, 1996, CNC shall not
\nprovide, or enter into any material agreement to provide, telecommunications or
\naccess services to any other companies or engage in any public financing
\nactivities without Intuit’s express written consent exercised in its sole
\ndiscretion, not to be unreasonably withheld, based on Intuit’s evaluation of the
\neffect of such services or activities on CNC’s ability to perform its
\nobligations under this Agreement. Intuit shall indicate its consent or lack
\nthereof within five working days of being provided with sufficient information
\nto make an informed judgment.<\/p>\n
5.6 Branding of Services. The Internet Services offered by
\n ——————–
\nIntuit, directly or indirectly, shall be branded according to Intuit’s
\ndirections, i.e., screen logos, written or electronic communications with
\n —-
\nCustomers, customer service phone announcements, etc.; provided, however, that
\n —-
\nthe welcome pages in the registration process shall provide an attribution that
\nthe network connection services are being provided by and are the responsibility
\nof CNC. CNC’s reproduction or use of any Intuit copyrighted materials,
\ntrademarks or service marks shall be strictly in accordance with the guidelines
\nprovided by Intuit from time to time. CNC hereby acknowledges receipt of
\nIntuit’s current copyright and trademark guidelines. CNC’s use of Intuit’s
\nproprietary rights is limited solely in relation to its provision of the CNC
\nServices pursuant to this Agreement.<\/p>\n
5.7 Compliance With Laws and Regulations. Each party shall,
\n ————————————
\nat its own expense, comply with any governmental law, statute, ordinance,
\nadministrative order, rule, or regulation relating to its duties, obligations,
\nand performance under this Agreement and shall procure all governmental licenses
\nand pay all fees and other charges required thereby.<\/p>\n
5.8 Appointment of CNC as Billing and Collections Agent. Intuit
\n —————————————————
\nhereby appoints CNC as its agent to bill and collect amounts pursuant to the
\nprocedures set forth in this Agreement owing to Intuit from Customers who have
\nregistered to receive Internet Services; provided, however, that such billings,
\nreceivables and amounts shall be the sole property of Intuit. Intuit may
\nterminate this appointment and make other arrangements for Customer billing and
\ncollections in its sole discretion.<\/p>\n
5.9 Project Manager and Project Technical Coordinators. Each
\n ————————————————–
\nparty shall designate an initial Project Manager and Project Technical
\nCoordinator within ten (10) business days of the Effective Date (and such other
\nmanagers and coordinators as may be reasonably required), with such changes as
\neither Party may notify to the other from time to time.<\/p>\n
5.10 Financial Information. During the Term, CNC shall provide
\n ———————
\nto Intuit the financial reports and information described in Section 5 of that
\ncertain Warrant Issuance Agreement for Warrants to Purchase Series B Preferred
\nStock between the parties hereto.<\/p>\n
6. Term and Termination.
\n ——————– <\/p>\n
12<\/p>\n
6.1 Termination on Notice for Intuit Dissatisfaction. If, in
\n ————————————————
\nIntuit’s judgment, CNC’s performance is not satisfactory for any reason
\n(including but not limited to network access and reliability, features and
\ncapabilities, host operations, customer satisfaction, programming support,
\nmanagement strength and financial condition) at any time, Intuit may terminate
\nthis Agreement by providing six month written notice of such intention to
\nterminate.<\/p>\n
6.2 Immediate Termination by Intuit for CNC Failure to Meet
\n ——————————————————–
\nMinimum Performance Standards. If, in any given month, CNC fails to meet the
\n—————————–
\nMinimum Performance Standards for any performance measurement, then Intuit may
\nterminate this Agreement by providing written notice of such intention to
\nterminate. Upon receipt of such notice, CNC may immediately provide Intuit with
\na detailed corrective action plan and timetable to correct the default and
\nrequest a period of 30 days in which to cure the default. Unless Intuit
\nreasonably believes that CNC cannot or will not promptly and permanently correct
\nthe deficiency and restore the CNC Services, then Intuit will delay the
\ntermination of the Agreement during such 30-day period. If, however, CNC fails
\nto correct such deficiency during such 30-day period or Intuit subsequently
\ndetermines during such period that CNC’s proposed corrective action plan will
\nnot be completed within such 30 day period, then Intuit may immediately
\nterminate the Agreement on further written notice to CNC.<\/p>\n
6.3 Mutual Termination Rights Upon Default and Breach.
\n ————————————————- <\/p>\n
6.3.1 Upon the occurrence of any of the following events of
\ndefault, after giving written notice to the defaulting party and following the
\ncompletion of the cure period set forth in Section 6.3.2, the non-defaulting
\nparty may declare the other party to be in breach of this Agreement and may
\nimmediately terminate this Agreement:<\/p>\n
6.3.1.1 the failure of either party substantially
\nto perform or comply with any material provision of this Agreement;<\/p>\n
6.3.1.2 the admission in writing by either party
\nof its inability to pay its debts as they mature, or the making by either party
\nof an assignment for the benefit of its creditors;<\/p>\n
6.3.1.3 the party becomes insolvent as evidenced
\nby the fact that the party is generally not paying its debts as they become due
\n(unless such debts are the subject of a bona fide dispute) and\/or the sum of
\nsuch party’s debts is greater than all of such party’s property valued at fair
\nmarket value;<\/p>\n
6.3.1.4 the filing of a petition under any
\nbankruptcy act, receivership statute or like law or statute as they now exist or
\nmay be subsequently amended by either party, or the filing of such a petition by
\nany third party against either party, or the making of an application for a
\nreceiver by either party, where such petition or application is not dismissed or
\notherwise favorably resolved within sixty days; or<\/p>\n
6.3.1.5 in addition to the foregoing, with respect
\nto CNC, the breach by CNC or any of its majority shareholders of their
\nrespective obligations under the Commitment Agreements if such breach is not
\ncured within the applicable cure period contained in the Commitment Agreements.<\/p>\n
6.3.2 Upon receipt of a notice of default, the defaulting
\nparty will have a period of thirty days in which to cure the default. If the
\nnon-defaulting party does not believe that the default has been cured during the
\nforegoing cure period, then the non-defaulting party may<\/p>\n
13<\/p>\n
terminate this Agreement immediately upon written notice to the defaulting
\nparty. If a defaulting party repeatedly defaults under this Agreement (as
\nevidence by the issuance of a notice of default by the other party two or more
\ntimes in a twelve month period), then the non-defaulting party may elect to
\nterminate this Agreement on thirty days advance written notice without the
\ndefaulting party having a right to cure. During any notice and cure period,
\nboth parties shall continue to be bound by all the terms and conditions of this
\nAgreement.<\/p>\n
6.3.3 The rights and remedies of the non-defaulting party
\nare not exclusive and are in addition to any other rights and remedies it may
\nhave available under law or equity. Notwithstanding anything to the contrary
\ncontained herein, the rights and obligations of the parties pursuant to Sections
\n1, 2.3, 4.2.2, 4.3, 4.4, 5.1, 5.2, 5.4, 5.6, 6.4, 7.3, 7.4, 7.5, 7.6 and 8 will
\nsurvive any termination or expiration of this Agreement.<\/p>\n
6.4 Transition Period. Notwithstanding the expiration or
\n —————–
\ntermination of this Agreement for any reason, at its election, Intuit may
\nrequest, and CNC shall continue to provide, the CNC Services on a non-exclusive
\nbasis for a period of up to one year beyond such expiration or termination on
\nthe terms and conditions in effect at that such time (the “Transition Period”).
\nIn the event of a termination or expiration of this Agreement, CNC shall
\ncooperate in planning and executing with Intuit (each party to bear its own
\ncosts) a transition plan for the transfer of the Internet access services from
\nCNC to Intuit or Intuit’s designee, and Intuit shall be entitled to use such CNC
\nConfidential Information as may be necessary to effect such transition. Each
\nparty shall take any actions or deliver any documents reasonably requested by
\nthe other party to effect the expiration or termination of this Agreement, and
\nthe transfer of access services.<\/p>\n
6.5 Force Majeure Extension.
\n ———————– <\/p>\n
6.5.1 Definitions. For the purposes of this Section 6.5, the
\n ———–
\nfollowing definitions shall apply:<\/p>\n
6.5.1.1 A “Force Majeure Event” shall be a delay by CNC
\nin its performance of, or a failure by CNC to perform pursuant to, this
\nAgreement where such delay or failure is caused by an act of God, acts of civil
\nor military authority, fire, flood, strikes, war, epidemics or some other
\nunforeseeable cause beyond CNC’s reasonable control and without its fault or
\nnegligence that adversely affects the availability of services by all
\ntelecommunications and\/or Internet access services providers like CNC, such as a
\nmajor malfunction of a public telecommunications network in the Northeastern
\nregion of the United States.<\/p>\n
6.5.1.2 A “Termination Event” shall mean a circumstance
\nin which Intuit has given notice of default to CNC pursuant to Section 6.2 or
\nSection 6.3.1.1 because of CNC’s failure to provide the CNC Services in
\naccordance with this Agreement.<\/p>\n
6.5.2 Extension of Cure Period. If the primary cause of the
\n ————————-
\nTermination Event is a Force Majeure Event, then Intuit agrees to provide CNC
\nwith an overall cure period of sixty days from the date of Intuit’s notice of
\ndefault or termination (the “Extended Cure Period”) subject to CNC’s
\nsatisfaction of the following conditions: (1) CNC shall immediately notify
\nIntuit of any circumstances which result (or may result) in a Force Majeure
\nEvent (in advance when the situation permits), (2) CNC shall (i) immediately
\ndevelop and implement a corrective action plan designed to promptly reestablish
\nthe CNC and Internet Services to Intuit and the Customers, and (ii) use its best
\nefforts to avoid, mitigate or remove such circumstances and to reestablish the
\nCNC and Internet Services at its expense by providing alternate access services
\nto Intuit and its Customers, e.g., the establishment of toll free 800# service,
\n —-
\n(3) CNC shall provide detailed updates upon request to Intuit of CNC’s progress
\nin executing the corrective action plan and restoring the<\/p>\n
14<\/p>\n
CNC and Internet Services, and (4) CNC shall immediately continue its
\nperformance in accordance with this Agreement whenever such conditions are
\nremoved.<\/p>\n
6.5.3 Consequences of Continuing Default. Notwithstanding the
\n ———————————-
\nprovisions of Section 6.5.2, Intuit may immediately terminate this Agreement in
\naccordance with the original time periods and procedures set forth in Section
\n6.2 or 6.3.1.1, as applicable, if (1) CNC fails to cure any breach or default
\nwithin the Extended Cure Period, or (2) CNC otherwise breaches the conditions
\nfor Intuit’s grant of the Extended Cure Period, such as where CNC fails to use
\nits best efforts to reestablish services to Intuit and its Customers in the case
\nof a Force Majeure Event.<\/p>\n
7. Representations, Warranties and Indemnities.
\n ——————————————- <\/p>\n
7.1 No Conflicts. Each party hereto represents and warrants to the
\n ————
\nother that the execution, delivery, and performance of this Agreement by such
\nparty will not conflict with or result in any breach of, or constitute a default
\nunder, any material agreement, instrument or undertaking to which it is a party
\nor by which any of its property is bound.<\/p>\n
7.2 Authority. Each party hereto represents and warrants to the
\n ———
\nother that it has the power to make and carry out the terms of this Agreement
\nand each has taken, and will take, all actions, corporate or otherwise,
\nnecessary or advisable to authorize the execution, delivery and performance of,
\nand to perform, its respective obligations under this Agreement.<\/p>\n
7.3 No Infringement. CNC represents and warrants on a continuing
\n —————
\nbasis that neither the CNC Code, nor the exercise by Intuit of any of the rights
\ngranted under this Agreement, will infringe any intellectual property right of
\nany third party and that there is no litigation or claim pending or, to CNC’s
\nknowledge, threatened relating thereto. CNC shall and hereby does indemnify and
\ndefend Intuit and hold it harmless from and against any and all claims,
\nliabilities, losses, costs and expenses including, but not limited to,
\nreasonable attorneys’ fees and costs of suit, incurred by Intuit as a result of
\nor arising from any claim or proceeding made or brought against Intuit that the
\nuse, reproduction, marketing, sale, sublicensing or distribution of CNC Code or
\nuse of the CNC Services, infringes any patent, copyright or other rights of any
\nthird party, or that the CNC Code or CNC Services are defective. This indemnity
\nshall not apply to the extent such claims result from Intuit’s own modification
\nor alteration of the CNC Code. Intuit shall promptly notify CNC of any such
\nclaim(s) and shall, at CNC’s request and expense, cooperate in the investigation
\nand defense of such claim(s).<\/p>\n
7.4 Indemnification by Intuit. Intuit shall and hereby does
\n ————————-
\nindemnify and hold harmless CNC and its officers, directors, stockholders,
\nemployees and any other agents from any claim, demand, liability, cost or
\nexpense they may incur to any third party relating in any manner to the use of
\nthe CNC Network by Intuit or its Customers (except to the extent such claims or
\ndemands result from CNC’s negligence, gross negligence or willful misconduct or
\nare otherwise indemnifiable by CNC pursuant to this Agreement). CNC agrees to
\ngive Intuit prompt notice of any claim or demand to which it becomes aware as to
\nwhich this Section may apply and to cooperate with Intuit in the defense of such
\nclaim or demand.<\/p>\n
7.5 Indemnification by CNC. CNC shall and hereby does indemnify and
\n ———————-
\nhold harmless Intuit and its officers, directors, stockholders, employees and
\nany other agents from any claim, demand, liability, cost or expense they may
\nincur to any third party relating in any manner to the use, operation or
\nmalfunction of the CNC Network by CNC or customers of CNC (except to the extent
\nsuch claims or demands result from Intuit’s negligence, gross negligence or
\nwillful misconduct or are otherwise indemnifiable by Intuit pursuant to Section
\n7.4 of this Agreement). Intuit agrees to give CNC prompt notice of any claim or
\ndemand to which it becomes aware as to<\/p>\n
15<\/p>\n
which this Section may apply and to cooperate with CNC in the defense of such
\nclaim or demand. During the Service Term, CNC shall use commercially reasonable
\nefforts to obtain, maintain and provide a reasonable amount of insurance against
\nclaims covered by this indemnification provision naming Intuit as an additional
\nnamed insured and, if obtained, provide evidence of the same to Intuit.<\/p>\n
7.6 Limitation of Liability. EXCEPT PURSUANT TO THEIR RESPECTIVE
\n ———————–
\nINDEMNIFICATION OBLIGATIONS SET FORTH IN SECTIONS 7.3, 7.4 AND 7.5 ABOVE,
\nNEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR INCIDENTAL, CONSEQUENTIAL,
\nINDIRECT, OR SPECIAL DAMAGES OF THE OTHER PARTY ARISING OUT OF THIS AGREEMENT.<\/p>\n
8. Miscellaneous.
\n ————- <\/p>\n
8.1 Notices. Except as otherwise specified herein, all notices,
\n ——-
\nrequests, demands or communications required hereunder shall be in writing and
\ndelivered personally, or sent either by the equivalent of U.S. certified mail,
\npostage prepaid return receipt requested or by overnight delivery air courier<\/p>\n
(e.g., Federal Express), or sent by facsimile (if such facsimile notice is
\n—–
\nfollowed immediately by a letter delivered personally or by overnight delivery
\nair courier), to the parties at their respective addresses set forth on the
\nsignature page hereto. All notices, requests, demands, or communications shall
\nbe deemed effective immediately upon the earlier of personal delivery or
\nconfirmed facsimile transmission, three days following deposit in the mails as
\nset forth above, or one day following delivery to the overnight delivery air
\ncourier in accordance with this Section. The parties may change their
\nrespective points of contact, or addresses or phone or facsimile numbers for
\nnotification from time to time on five days advance written notice pursuant to
\nthe procedures set forth in this section.<\/p>\n
8.2 Entire Agreement. This Agreement will not be effective unless
\n —————-
\nand until the parties have fully executed and delivered this Agreement. This
\nAgreement may be executed by the parties in separate counterparts, each of which
\nwhen so executed and delivered shall be an original, but all such counterprats
\nshall together constitute one and the same instrument. This Agreement
\nconstitutes the entire understanding between the parties with respect to the
\nprovision of the CNC Services contemplated herein and supersedes all prior
\nagreements, written or oral, between the parties hereto with respect thereto.
\nThe provisions of the exhibits to this Agreement are supplementary to the body
\nof the Agreement and shall be interpreted in such a manner; provided, however,
\nthat in the event of an irreconcilable conflict arising between the provisions
\nof the exhibits and the body of this Agreement, the exhibits shall prevail.
\nThis Agreement shall not be modified except in a writing signed by and exchanged
\nbetween both of the parties and expressly referencing this Agreement. Any
\nadditional or different terms in the parties communications, whether
\nacknowledgments, invoices or otherwise, are hereby deemed to be material
\nalterations and notice of objection to them and rejection of them is hereby
\ngiven. No waiver of any provision of the Agreement or any right or obligations
\nof either party hereunder shall be effective, except pursuant to a writing
\nsigned and delivered by the party waiving compliance. Any such written waiver
\nshall not be construed as, or constitute, a continuing waiver of such breach, or
\nof other breaches of the same or other provisions of this Agreement. Neither
\nparty shall by mere lapse of time without giving notice or taking other action
\nhereunder be deemed to have waived any breach by the other party of any of the
\nprovisions of this Agreement.<\/p>\n
8.3 California Law. This Agreement shall be governed by and
\n ————–
\nconstrued in accordance with the substantive laws of the State of California
\n(not including its choice of law provisions).<\/p>\n
16<\/p>\n
8.4 No Assignment. Neither party shall assign its rights or delegate
\n ————-
\nits obligations under this Agreement without the prior written consent of the
\nother party hereto; provided, however, that Intuit may assign this Agreement, in
\nwhole or in part, to any subsidiary or affiliate. This Agreement shall be
\nbinding on all successors and permitted assigns of the parties.<\/p>\n
8.5 Severability. If any provisions of this Agreement shall be held
\n ————
\nby a court, arbitrator or other tribunal of competent jurisdiction to be invalid
\nor unenforceable, such provisions shall be deemed valid and enforced to the
\nmaximum extent permissible and the remaining portions of this Agreement shall
\nremain in full force and effect.<\/p>\n
8.6 No Third Party Beneficiaries. Except for permitted assigns, this
\n —————————-
\nAgreement does not create, and shall not be construed as creating, any rights
\nenforceable by any person or entity not a party to this Agreement; provided,
\nhowever, that any subsidiary or affiliate of Intuit may use the CNC Services or
\noffer Internet Services using the CNC Network on the terms and conditions set
\nforth in this Agreement.<\/p>\n
8.7 Construction. The parties acknowledge and agree that the terms
\n ————
\nhereof reflect extensive negotiations between the parties and that this
\nAgreement shall not be deemed, for the purpose of construction and
\ninterpretation, that either party drafted this Agreement. Each party is
\nresponsible for paying its own legal and professional fees and costs with
\nrespect to the negotiations, execution and performance of the Agreement. The
\nheadings used in this Agreement are for convenience only and shall not be
\nconsidered in its interpretation.<\/p>\n
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
\non the Execution Date and agree that is shall be effective as of the Effective
\nDate and it shall be deemed accepted and made in San Diego, California.<\/p>\n
Execution Date: December 11, 1995<\/p>\n
INTUIT INC. CONCENTRIC NETWORK CORPORATION<\/p>\n
By: \/s\/ William Harris By: \/s\/ Henry Nothhaft
\n —————————— ———————————
\n William Harris, Executive Vice Henry Nothhaft, President and CEO
\n President<\/p>\n
Address: 6256 Greenwich Drive Address: 10590 N. Tantau Avenue
\n San Diego, CA 92122 Cupertino, CA 95014<\/p>\n
17<\/p>\n
\n\nLIST OF EXHIBITS
\n—————-
\n <\/p>\nA – CNC Network<\/p>\n
B – Development Project Work Statement<\/p>\n
C – CNC Network Operations and Customer Service<\/p>\n
D – Service and Customer Charges<\/p>\n
E – Security Guidelines<\/p>\n
F – License Agreement
\n<\/c><\/s><\/caption>\n<\/table>\n
18<\/p>\n
EXHIBIT “A”
\n ———–<\/p>\n
CNC NETWORK<\/p>\n
A. Current CNC Network Structure: The general description of the CNC
\n —————————–
\nNetwork is depicted in Attachment A-1 hereto and in that certain CNC Private
\nPlacement Memorandum dated November 3, 1995 (the “PPM”). Additionally, an
\nidentification of certain material equipments and systems comprising the CNC
\nNetwork are identified in that certain Master Lease between CNC and Racal-
\nDatacom, Inc., dated August 4th, 1994. For the purposes of this Agreement, the
\nCNC Network shall be deemed to be the end-to-end communications and related
\ninformation systems (a) beginning at either the local number of a POP, or the
\nlocal exchange number in the case of someone using a Non-POP Access, and (B)
\nending at the Intuit Systems or Intuit Areas.<\/p>\n
B. Points of Presence. A list of the current POPs (and their associated
\n ——————
\nPorts) operated by CNC in the continental United States and Canada is set forth
\nin the PPM and in Attachment A-1 hereto, which information shall be updated and
\n ————–
\nprovided to Intuit as it changes. Further, pursuant to the terms of this
\nAgreement, CNC shall do each of the following:<\/p>\n
1 Increase the number of Ports in the CNC Network in the
\ncontinental United States to at least [*] Ports by January 1, 1996; provided,
\nthat CNC shall use all commercially reasonable efforts to increase the number of
\nsuch Ports to at least [*] by January 1, 1996.<\/p>\n
2 Expand, improve and maintain on an ongoing basis the CNC
\nNetwork to cover the top 150 metropolitan areas in the continental United States
\n(determined by personal computer ownership statistics developed and published by
\nInternational Data Corporation (IDC) from time to time) and, within each such
\nmetropolitan area, provide “local access” (i.e., without message unit charges)
\n —-
\nfor at least 92% of the general population. CNC has used commercially
\nreasonable efforts to accomplish the foregoing expansion by the Execution Date
\nof the Agreement and, within ten days of the Execution Date, shall accomplish
\nthe foregoing expansion of coverage. In the United States, a “metropolitan
\narea” shall mean the metropolitan\/geographic regions used by IDC in publishing
\nits statistics.<\/p>\n
3 Provide local access to the CNC Network for the Intuit Customers
\nin the seven largest Canadian metropolitan areas (as measured by population) by
\nNovember 1, 1995; provided, that CNC shall use all commercially reasonable
\nefforts to provide such local access to such Canadian metropolitan areas by
\nOctober 1, 1995. In Canada, a “metropolitan area” shall mean the geographic
\nareas as mutually agreed between the parties or, in the absence of an agreement,
\nbased on Canadian government census areas.<\/p>\n
4 Cause the CNC Network to consistently support modem speeds up to
\n28,800 bps, and to be enhanced to be competitive with industry standards that
\ndevelop over time and that reflect the modem speeds used by Intuit’s Customers.<\/p>\n
Notes:<\/p>\n
(1) Local access commitments made by CNC above may be provided either
\nvia the installation of a physical POP or by use of a Virtual Local Access
\n(“VLA”) arrangement, at CNC’s option. A VLA is defined as the provision of
\nlocal dial access for a customer to gain local access to the CNC Network via a
\nlocal phone number that is call forwarded to a modem facility that is centrally
\nlocated. The total number of modems (ports) at the central facility shall be
\nsized to support the aggregate of all VLAs being supported (i.e., as if each VLA
\n —-
\nis a POP).<\/p>\n
—————-
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
19<\/p>\n
(2) In calculating the number of Ports serving an area, the parties
\nshall take into account any “Port equivalents” offered by a VLA arrangement,<\/p>\n
i.e., CNC may have fewer physical Ports in a VLA arrangement then it would
\n—-
\notherwise require if it deployed physical POPs to serve VLA territories. (For
\nexample: 50 POPs with 10 Ports each may be sufficiently served by a single
\ncentral VLA termination point of 250 Ports.)<\/p>\n
C. Performance Standards.
\n ——————— <\/p>\n
1 General Concept. CNC acknowledges that Intuit requires access
\n —————
\nfor its Customers to the Intuit Areas and Internet that is reliable and rapid,
\nhas the ability to handle peak demands, is flexible in terms of future expansion
\nfor geographic coverage, functional enhancements and capacity increases, and can
\nrapidly and accurately handle all registration, billing and customer service.
\nThe parties have established the Performance Standards set forth in this
\nAgreement as a benchmark for initial operations, but CNC acknowledges and agrees
\nthat such standards may increase in the future as customer expectations heighten
\nand the Internet access\/services industry develops. Therefore, during the Term,
\nthe parties shall cooperate and act in good faith in evaluating, developing and
\nagreeing on such changes in the Performance Standards.<\/p>\n
2 Performance Standards.
\n ——————— <\/p>\n
a. Network Accessibility Performance Standard. The CNC Network
\n ——————————————
\nwill exhibit an average busy rate below the following Performance Standard for
\nIntuit Customers attempting to access the CNC Network:<\/p>\n
Target Performance Standard: [*]%<\/p>\n
Minimum Performance Standard: [*]%<\/p>\n
Comments:
\n ——– <\/p>\n
(1) The busy rate at each POP will be determined statistically by
\n comparing (A) the average hourly traffic load for each of CNC’s
\n three busiest hours during a month to (B) the POP’s traffic
\n capacity at [*] grade-of-service using standard Erlang B traffic
\n statistics for the number of active Ports at the POP. The average
\n of this data will yield that POP’s average busy rate for the
\n month. By way of example, assume the average hourly traffic load
\n for the 3 busiest hours for the San Francisco POP (with an average
\n of 72 ports ) during June 1995 was 61.0, 58.0, and 53.5 Erlangs (#
\n of hours of traffic through that POP per hour), resulting in an
\n average of 57.5 Erlangs over the three busiest hours of the month.
\n Using the standard Erlang B tables, a 72 port hunt-group
\n supporting 57.5 Erlangs of traffic extrapolates to 0.97% which
\n produces a P.01 grade of service, i.e., the POP’s average busy
\n —-
\n rate for the month. (sample Erlang B tables are attached hereto
\n as Attachment A-2.)
\n ————– <\/p>\n
(2) Then, the weighted average busy rate for the CNC Network will be
\n computed across all POPs. The weighted average will be calculated
\n based on the number of Ports at each POP. By way of example,
\n assume the CNC Network only had 5 POPs with the following number
\n of ports and average monthly busy rates as calculated in 2a(1):<\/p>\n
—————-
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
20<\/p>\n
\n\nPOP Ports Avg Busy
\n—– —– ——–
\n
\n1 24 .035
\n2 36 .015
\n3 48 .025
\n4 10 .005
\n5 72 .010
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n The weighted average busy rate for this 190 port network as a
\n whole is .01763 (or 1.763%).<\/p>\n
(3) The weighted average busy rate calculated above will yield a
\n number which will be compared to the applicable Performance
\n Standard to determine whether or not CNC has met its Network
\n Accessability performance goal for the month. By way of example,
\n comparing the weighted average busy rate of P=.01763 to the Target
\n Performance Standard of [*] reflects that CNC has performed better
\n than targeted on this performance metric for the month of June.<\/p>\n
b. Network Processing Capacity Performance Standards (Latency).
\n ———————————————————–
\nAt peak periods of the day, the CNC Network latency shall meet the following
\nPerformance Standards as measured on a monthly basis:<\/p>\n
Target Performance Standard: [*] milliseconds .<\/p>\n
Minimum Performance Standard: [*] milliseconds.<\/p>\n
Comments:
\n ——– <\/p>\n
(1) CNC will test the CNC Network for latency at least 3 days per
\n week during the three busiest hours of the day as determined either a) by the
\n prior month’s three busiest hours EST (e.g., 10, 11, 12 PM EST) of the CNC
\n —-
\n Network in general, or b) by the three busiest hours of use by Intuit
\n subscribers) if CNC can calculate the Intuit-specific busy hours. Each day’s
\n test will include a series of 10 or more ICMP “Ping” tests containing 50 bytes
\n of payload from a CNC host in either Bay City, MI or Cupertino, CA to a router
\n in each of at least 50 of CNC’s U.S. POP sites. The average round-trip
\n latency of each sampled POP (minimum of 10 samples per POP per test) will be
\n computed. Once a month, the average, 95th, and 90th percentile of all sampled
\n POP’s average latencies will be computed and compared against the Performance
\n Standards.<\/p>\n
(2) By way of example, assume the network only had 5 POP sites. A
\n sample of 10 Ping tests are run at 11PM EST on September 15th from Bay City to
\n each of these 5 POPS with the following results:<\/p>\n
\n\nPOP Ping Samples (in milliseconds) Average
\n—– ————————————— ——-
\n
\n1 100 120 150 200 275 150 120 120 100 090 142.5
\n2 085 095 100 120 110 175 300 100 090 105 128.0
\n3 110 145 090 100 095 080 095 100 110 105 103.0
\n4 200 220 250 190 275 245 255 280 200 275 239.0
\n5 100 090 095 105 095 100 105 100 110 105 100.5
\n —–<\/p>\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
—————-
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
\n
\n Overall Average 142.6
\n<\/c><\/c><\/s><\/table>\n Assume a similar test was conducted on 15 other days during the month
\n yielding a total of 80 sample averages. At the end of the month, the
\n average (A) and standard deviation (SD) of the 80 data samples would
\n be computed. Using elementary statistics, the 95th percentile can be
\n computed as “A \/ (1.65 x SD)”, and the 90th percentile would equal “A
\n \/ (1.25 x SD)”.<\/p>\n
c. Customer Service\/Support Performance Standards. Within ten
\n ———————————————-
\ndays of its receipt of CNC’s monthly usage reports, Intuit will develop and
\nprovide to CNC a non-binding forecast of anticipated customer service volumes<\/p>\n
(i.e., number of calls) for the following month. So long as actual call volumes
\n—–
\nare not more than [*] greater than Intuit’s forecasted call volumes, the
\nfollowing Performance Standards shall apply.<\/p>\n
(1) Occurrence of Busy Signals on Customer Calls
\n ——————————————–<\/p>\n
Service calls by the Customers to the CNC service center (or its
\n chosen outsourcer) shall experience a busy signal no more often than
\n the following Performance Standards:<\/p>\n
Target Performance Standard: [*] of the total calls received.<\/p>\n
Minimum Performance Standard: [*] of the total calls received.<\/p>\n
Comments:
\n ——– <\/p>\n
(a) The busy rate will be determined by a) actual busies as
\n reported by the PBX delivering calls to the Intuit hunt group at CNC,
\n or b) by a statistical estimate of busies based on traffic volume
\n delivered to Intuit trunk group on a weighted average basis across the
\n month’s two busiest hours of each day (i.e., approximately 60 samples
\n —-
\n per month).<\/p>\n
(b) CNC shall advise Intuit of its automatic call dispatch (ACD)
\n system’s ability to produce this information in the format
\n required for analysis, provided that CNC will provide any
\n additional analysis not performed by the ACD.<\/p>\n
(2) Average Speed of Answer (ASA)
\n —————————–<\/p>\n
Service calls to the CNC service center (or its outsourcer) shall,
\n once answered by CNC’s ACD system, experience an ASA no longer than
\n the following Performance Standards:<\/p>\n
Target Performance Standard: within [*] minutes<\/p>\n
Minimum Performance Standard: within [*] minutes<\/p>\n
Comments:
\n ——– <\/p>\n
(a) First, the ASA will be computed for Intuit’s trunks on a
\n daily basis. Then, the ASA for each month will be computed as the
\n weighted<\/p>\n
—————-
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
22<\/p>\n
average of the daily ASAs where the weighted average of the daily ASAs
\n is the total number of calls offered each day compared to the total
\n number of calls for the month. By way of example, assume the
\n following statistics for a given month:<\/p>\n
\n\nDay Calls Offered ASA Calls Offered x ASA
\n—- ————- — ——————-
\n
\n 1 100 1.25 mins 125.0 call-mins
\n 2 120 2.12 mins 254.4
\n 3 150 1.97 mins 295.5
\n ”
\n ”
\n ”
\n 30 220 1.75 mins 385.0
\n — —–
\n 590 calls 1,059.9 call-mins\/590 calls = 1.80 min ASA
\n ————
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n If this data represented all 30 days, then the ASA for the month
\n would be 1.8 minutes which would be compared against the [*] Target
\n Performance Standard.<\/p>\n
(3) Customer Satisfaction Ratings
\n —————————–<\/p>\n
Customers shall report a satisfaction with CNC’s customer
\n service (provided directly or indirectly) meeting or exceeding
\n the following Performance Standards:<\/p>\n
Target Performance Standard: [*] on a scale of [*], or the
\n standard set for either internal or external call centers supporting this
\n service.<\/p>\n
Minimum Performance Standard: [*] on a scale of [*], or the
\n standard set for either internal or external call centers supporting this
\n service.<\/p>\n
Comments:
\n ——– <\/p>\n
(a) Intuit and CNC shall jointly develop and agree on a
\n customer satisfaction survey and survey methodology, and
\n update it as required during the Term of the Agreement
\n to reflect changes in customer expectations and the
\n market for Internet Services.<\/p>\n
(b) The survey will be conducted periodically (but no less
\n often than monthly), as jointly agreed between CNC and
\n Intuit.<\/p>\n
(c) Intuit will bear the cost of developing and
\n administering the survey. If Intuit fails to administer
\n the survey in any given month, CNC shall be assumed to
\n have satisfied the Target Performance Standard for that
\n month.<\/p>\n
D. Corrective Action and Financial Penalties. If CNC fails to satisfy
\n —————————————–
\nthe Performance Standards set forth in Section C (above), then it shall take the
\ncorrective actions and be subject to the financial penalties described below.
\nHowever, the corrective actions and financial penalties described in this
\nExhibit “A” are in addition to, and not in limitation of, any other rights that
\nIntuit has<\/p>\n
23<\/p>\n
—————-
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
pursuant to the Agreement including, but not limited to its termination rights
\npursuant to Section 6 of the Agreement.<\/p>\n
1 Corrective Action. If CNC’s actual performance in any given
\n —————–
\nmonth falls below the Target Performance Standard for any of the aforementioned
\nperformance standards, then CNC will use its best efforts to enhance and improve
\nthe CNC Network and its operations so as to reasonably assure that the Target
\nPerformance Standard will be met in the next following and subsequent months.
\nSuch corrective action, by way of example and not of limitation, could include
\nCNC making available 800# access numbers to Customers who are experiencing
\nexcessive busies when accessing local POPs or adding additional incoming lines
\nfor Customers who are experiencing excessive busies on customer service calls.<\/p>\n
2 Financial Penalty.
\n —————– <\/p>\n
a. Background. The parties acknowledge that problems will
\n ———-
\noccur in the start-up of the CNC and Internet Services in projecting customer
\nrequirements and in adjusting to differences in actual versus forecasted usage
\nlevels. The assessment of immediate financial penalties to CNC may not serve
\neither party’s best interests because of the potential adverse effect on the
\nability of CNC to improve the CNC Services in the short term. Additionally, the
\nparties’ desire to implement a mechanism to ensure that CNC is motivated to
\ndevote the effort required to correct deficiencies in its actual versus targeted
\nperformance, but not to inhibit a motivated CNC from achieving the Performance
\nStandards. Therefore, the parties will develop mutually satisfactory
\nforecasting, tracking, reporting and review mechanisms consistent with the
\nprocedures set forth in Section b. below during the initial months of the
\nAgreement. By May 1, 1996, the parties shall also agree on a methodology to set
\nand assess financial penalties for CNC’s failure to achieve the Performance
\nStandards. The structure to assess such financial penalties against CNC will
\ninclude the consideration of the following factors: (i) CNC’s past and current
\nperformance, (ii) the rate of progress CNC has\/is making toward achievement of
\nthe Target Performance Standards, (iii) the impact of missed targets on the
\nCustomers and Intuit, (iv) the root causes of CNC’s performance deficiencies,
\nand (v) the willingness, motivation and attitude of CNC in promptly remedying
\nany performance deficiencies.<\/p>\n
b. Review Process.
\n ————– <\/p>\n
(1) CNC and Intuit will conduct a joint Operations
\nReview of the CNC Network and CNC Services on a monthly basis during the first
\nsix months of the First Contract Year (the “Implementation Phase”) at a mutually
\nagreed location. At this Operations Review, CNC will present Intuit with the
\nstatus of the CNC Network, Performance Standards and Customer Service
\nperformance for the prior month, a trend line showing the history of each
\nPerformance Standard, an analysis of the root cause of any Performance Standard
\nthat fell below the Target Performance Standard and an action plan for
\ncorrection of any such deficiency. These Operations Reviews are intended to be
\na joint learning session whereby the parties can continuously improve the
\nquality of the overall CNC Services and Internet Services.<\/p>\n
(2) Intuit may, at its option, request CNC to alter
\nits action plan for the correction of deficiencies if, in Intuit’s judgment, the
\nproposed action plan is insufficient to correct the deficiency in a timely
\nmanner.<\/p>\n
(3) During the Implementation Phase, CNC and Intuit
\nshall cooperate and work diligently in performing their respective
\nresponsibilities under the Agreement, including the correction of problems
\ncausing CNC to fail to satisfy the Performance Standards and addressing
\nexcessive or unacceptable levels of Customer complaints. If CNC does not
\ncorrect or,<\/p>\n
24<\/p>\n
in Intuit’s good faith judgment, make sufficient progress to correct such
\nperformance deficiencies or resolve such customer complaints despite the
\nparties’ cooperation, then Intuit may terminate the Agreement, in addition to
\nexercising any of its rights provided in the Agreement. In such event, CNC
\nagrees to assist Intuit in transitioning the CNC Services to Intuit or its
\ndesignee consistent with the transition procedures set forth in the Agreement.
\nDuring the first four months following the commencement of the Transition
\nPeriod, Intuit’s payments to CNC for Service Charges shall be reduced to [*]
\nper hour for all Customers\/Service Categories. If the transition is not
\ncompleted by Intuit within the first four months of the Transition Period, then
\nthe Service Charges will revert to the levels specified in Exhibit D until the
\ntransition is completed. If Intuit chooses to terminate the Agreement, then CNC
\nwill promptly deliver to Intuit the source code for all Intuit registration
\nserver software (except to the extent such source code is owned by third parties
\nand cannot be delivered by CNC, as may be the case with certain software
\ndevelopment tools) at no cost to Intuit and otherwise perform its obligations
\nset forth in the Agreement.<\/p>\n
(4) By the end of the Implementation Phase, Intuit and
\nCNC will jointly agree to continue the Operations Reviews as outlined above, or
\nagree on some other mutually acceptable review and improvement process.<\/p>\n
(5) By the end of the Implementation Phase, Intuit and
\nCNC will jointly agree on (i) a process for determining what and how financial
\npenalties will be assessed by Intuit against CNC for CNC’s failure to achieve
\nthe Performance Standards, and (ii) the amount of the penalty. Any financial
\npenalties assessed by Intuit against CNC will be made only after a penalty
\nreview conference attended by senior managers of both CNC and Intuit and the
\nsetting of such penalties shall give due consideration to the factors described
\nabove. CNC will not be subject to financial penalties for failure to meet
\nPerformance Standards in any month that the actual CNC Network usage or customer
\nservice call volume relating to Intuit Customers exceeds Intuit’s initial
\nforecast for such month by more than [*]. For example, if Intuit’s December 1995
\nforecast for January, February and March estimates that March 1996 CNC Network
\nusage will be [*] hours and the actual CNC Network usage by the Customers is [*]
\nhours, then CNC will not be subject to financial penalties based on its failure
\nto achieve the applicable Performance Standards for March.<\/p>\n
5. Significant Service Interruptions. In addition to its rights to
\n ———————————
\nterminate the Agreement pursuant to Section 6, Intuit may immediately give
\nnotice of termination of the Agreement if either of the following Service
\nInterruptions occur, subject only to CNC’s rights relating to a Force Majeure
\nEvent pursuant to Section 6.5 (if applicable):<\/p>\n
1 A “Network Availability Service Interruption” which shall mean a
\nservice interruption whereby the CNC Network is available for less than ten
\nhours during any given 48 hour period to more than [*] of the Customers.<\/p>\n
2 A “Customer Support Service Interruption” which shall mean a
\nservice interruption whereby customer service or support is available for less
\nthan ten hours during any given 96 hour period to more than [*] of the
\nCustomers.<\/p>\n
Attachments:
\n———– <\/p>\n
A-1: Network Description (3 pages); List of current CNC POPs and related Ports
\n(5 pages)<\/p>\n
A-2: Sample Erlang B Table (2 pages)<\/p>\n
25<\/p>\n
—————-
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
EXHIBIT “B”
\n ———–<\/p>\n
DEVELOPMENT PROJECT WORK STATEMENT<\/p>\n
1. Project Coordination
\n ——————–<\/p>\n
Project Managers:
\n —————- <\/p>\n
Intuit: Jennifer Jones-Hall<\/p>\n
CNC: John Peters<\/p>\n
The Project Manager of each party shall be responsible for arranging all
\n meetings, visits and consultations between the parties that are of a non-
\n technical nature. They shall also be responsible for receiving all notices
\n under this Agreement and for all administrative matters such as invoicing
\n and payments. All amendments to the Agreement must be signed by an officer
\n of the respective party.<\/p>\n
Technical Coordinators:
\n ———————- <\/p>\n
Intuit: Kim MacPherson<\/p>\n
CNC: Mike Sharmon<\/p>\n
The Technical Coordinator of each party shall be responsible for technical
\n and system performance matters, and the transmission and receipt of
\n deliverables and technical information between the parties.<\/p>\n
The designation of a party’s Project Manager or Technical Coordinator may
\n be changed from time to time by written notice to the other party.<\/p>\n
2. Project Description. The parties will perform the activities associated
\n ——————-
\nwith hardware, software and systems development related to the actions generally
\ndescribed and on the timetable set forth in “Production Schedules” developed by
\nIntuit based, in part, on supporting production schedules developed and provided
\nto Intuit by CNC, an example of which is attached hereto as Attachment B-1. The
\n ————–
\nProduction Schedule shall be modified and updated by the parties as requirements
\nchange. Each party is responsible for providing the number of trained
\npersonnel, facilities and other resources necessary to support the deliverable
\ndeadlines. Each party will be responsible for its own expenses associated with
\nits performance. Because of the short deadlines associated with the initial
\nDevelopment Project, the parties will work diligently and in good faith to
\ndevelop on a continuing basis all necessary functional and technical
\nspecifications of devices, software code and other deliverables, including any
\nspecific enhancements that may be sought. Each party will cooperate in
\ndeveloping, performing and\/or delivering any reports, reviews, inspections, and
\ntests to be conducted.<\/p>\n
3. Beta Testing Procedures. The description of and schedule for Beta testing
\n ———————–
\nof the System and its components shall be described in “Test Schedules”
\ndeveloped by Intuit based, in part, on supporting production schedules developed
\nand delivered to Intuit by CNC . Test Schedules shall be modified and updated
\nas requirements change. On an ongoing basis, the parties shall review, inspect
\nand test the deliverables and the performance of the System (including the CNC
\nNetwork, e.g., internal quality assurance testing of CNC components such as
\n —-
\nregistration server, billing and account management systems, reconciliation
\nprocess, security, etc.) in order to determine whether
\n — <\/p>\n
27<\/p>\n
such comply with the specifications and performance standards therefor. To the
\nextent that any deliverables fail beta testing, the parties shall use their
\nreasonable best efforts to correct any problems or defects, which corrections
\nshall not be deemed completed until the parties determine in good faith that
\nsuch meet all applicable specifications and performance standards. Each party
\nwill be responsible for its own expenses associated with its performance.<\/p>\n
4. Ongoing System Development. CNC acknowledges that the Internet Services
\n ————————–
\noffered by Intuit will be developed, modified and enhanced during the Term of
\nthe Agreement as, for example, when any supplier of Intuit’s Internet browser
\nsoftware revises its software. Therefore, consistent with its other obligations
\npursuant to the Agreement, CNC shall work with Intuit and Intuit’s other
\nsuppliers or consultants to improve, modify or take other actions necessary or
\nreasonable to support the Internet Services over the Term of the Agreement.
\nAmong other things, this support may involve subsequent development projects,
\nbeta testing and service or product introductions on the following terms:<\/p>\n
a. CNC will agree to pass-through [*] any network\/system
\nimprovements made available to customers at large.<\/p>\n
b. CNC will agree to maintain\/fix-bugs in the existing Intuit
\nregistration server and “free” account login\/screening servers for the First
\nContract Year of the Agreement [*]. CNC maintenance for the Second and Third
\nContract Years will be offered on a T&M basis at the rates indicated below<\/p>\n
c. New feature development (including the registration server) requested
\nby Intuit will be provided at the rate of [*] per staff-month or [*] for
\nthe First Contract Year, increased by no more than [*]\/year for the Second and
\nThird Contract Years of the Agreement. These charges will become effective as
\nof the Execution Date of this Agreement (i.e., CNC will eat the development
\ncosts-to-date on the registration\/login servers).<\/p>\n
d. If CNC and Intuit can not agree on the price, schedule or scope of the
\nnew feature development for the registration server software, then Intuit may
\npurchase a non-exclusive source code license of the software for [*] and request
\nCNC to provide facilities management of an Intuit-owned server for a fee of [*]
\nper server. CNC will provide, at Intuit’s request, up to two engineering staff
\nweeks of time at [*] to assist in the transition of the source code to Intuit’s
\nengineers. It is understood that the source code and any accompanying
\ndocumentation is being delivered “as is” on the date of requested delivery.<\/p>\n
e. CNC agrees to implement the Netscape “Cookie” functionality at no
\nadditional charge in a mutually agreeable timeframe (target date is December 1,
\n1995).<\/p>\n
(f) CNC will advise Intuit in advance if CNC believes that development or
\nsupport services requested by Intuit are chargeable to Intuit.<\/p>\n
Attachments:
\n———– <\/p>\n
B-1 – Example of Production Schedule<\/p>\n
28<\/p>\n
—————-
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
EXHIBIT “C”
\n ———–<\/p>\n
CNC NETWORK OPERATIONS AND CUSTOMER SERVICE<\/p>\n
1. Network Operation. CNC is responsible for all ongoing on-line network and
\n —————–
\nrelated operations such as customer logon procedures, registration, customer
\ndatabase management, isolation of Customer Information from other data,
\nprocedures regarding access\/services upgrades, system maintenance, network
\nmonitoring, surveillance, capacity planning, failure and contingency procedures,
\netc.
\n— <\/p>\n
2. Customer Service. Intuit’s goal is to provide exceptional customer support
\n —————-
\nwith respect to the Internet Services. The parties acknowledge that the
\ncustomer support model initially implemented may change over time as they better
\nunderstand the customers’ needs and problem areas. Initially, customer support
\nwill be categorized into the following areas:<\/p>\n
Category # Description of Customer Support
\n ———- ——————————-<\/p>\n
1 Customer support relating to Intuit software
\n applications, e.g., Quicken, Quickbooks, TurboTax,
\n —-
\n etc.
\n — <\/p>\n
2 Customer support prior to registration, i.e.,
\n —-
\n “getting started” help (such as browser install,
\n network configuration and modem setup)<\/p>\n
3 Registration support (on-line connection to
\n registration server for Restricted and Full Internet
\n Access)<\/p>\n
4 Network connection support (i.e., cannot establish
\n —-
\n connection, routine network trouble calls, busies,
\n etc.)
\n — <\/p>\n
5 Full Internet Access Support (7 days\/week by 24
\n hours\/day)<\/p>\n
Initially, Intuit will provide customer support in Categories 1 and 2 at its
\nexpense, and CNC shall provide customer support in Categories 3, 4 and 5 at its
\nexpense. CNC is authorized, with Intuit’s prior written consent, to subcontract
\ntechnical support to a qualified third party. Subsequently, Intuit (or its
\nsubcontractor), at its election, may assume responsibility for customer support
\nin Category 3. In such event, CNC shall be responsible for paying Intuit the
\ncost of all customer support provided by Intuit in Category 3 at a rate agreed
\nto between the parties based on prevailing outsourcer rates (or, if no agreement
\nis reached, at the rate of [*]\/minute per phone call). Additionally, if
\nIntuit receives customer service calls in Categories 3, 4 or 5 because of CNC’s
\ninability to service the level of customer calls being received or because
\nmalfunctions on the CNC Network are causing increased customer problems, then
\nCNC shall, as a part of the Monthly Reconciliation Process described in Exhibit
\n ——-
\n“D” to the Agreement, reimburse Intuit at a rate agreed to between the parties
\n—
\nbased on prevailing outsourcer rates (or, if no agreement is reached, at the
\nrate of [*]\/minute per call). Conversely, Intuit shall be responsible for
\npaying CNC the cost of all customer support provided by CNC in Categories 1 or 2
\nat the rate of [*] per call.<\/p>\n
29<\/p>\n
—————-
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
Intuit and CNC will jointly develop call answering, call transfer and other
\ncustomer service related procedures, e.g., use of Intuit brand names. In this
\n —-
\nregard, CNC will provide technical support training at its expense to Intuit’s
\ncall centers (whether call services are performed by Intuit or subcontracted).<\/p>\n
3. Customer Support Managers.
\n ————————- <\/p>\n
Intuit: Jim Bishop<\/p>\n
CNC: Eileen Curtis<\/p>\n
The Customer Support Manager of each party shall be responsible for arranging
\nall meetings, visits and consultations between the parties relating to customer
\nservice including forecast reviews, satisfaction of performance standards
\nrelating to customer service and support, implementation plans, escalation
\nprocedures for problems, call flows, call categories, and similar matters
\naffecting customer support and service. The designation of a party’s Customer
\nSupport Manager may be changed from time to time by written notice to the other
\nparty.<\/p>\n
4. Customer Billings and Credits.
\n —————————– <\/p>\n
A. Background. The parties acknowledge that additional operating experience
\n ———-
\nwith the Internet Services and Customer feedback is required in order to fully
\ndevelop effective billing and credit procedures. Therefore, during the period
\nprior to February 1, 1996, Intuit and CNC will define, develop and implement
\ncustomer billing and credit procedures. The following sections identify the
\ninitial procedures prior to February 1, 1996.<\/p>\n
B. Customer Billing Procedures. During the initial phase of operations, the
\n —————————
\nparties will handle Customer billings as follows:<\/p>\n
1. When a Customer upgrades from Restricted Internet Service to Full
\nInternet Service (or such other levels or types of services established in the
\nfuture), CNC will promptly conduct a billing account validation pursuant to
\ncustomary industry procedures, e.g., confirmation of the card number and
\n —-
\nexpiration date. If the Customer satisfactorily completes the billing account
\nvalidation process, then CNC will register the Customer for Full Internet
\nService (or such other levels or types of services established in the future)
\nand store this information in the appropriate data files (an “Upgrade Account”).
\nCNC and Intuit will develop mutually acceptable procedures to refine the billing
\naccount validation process, such as determining the number of times that a
\nCustomer may attempt to upgrade before being denied upgrade because of
\nvalidation problems.<\/p>\n
2. Shortly after midnight every night, CNC will transfer the Upgrade
\nAccounts to the appropriate data files and run Customer billings. Customers
\nshall be billed monthly on their anniversary date in advance for any service
\nplan-related charges (e.g., where Customers have taken a package billing
\n —-
\napproach such as seven hours for $9.95), and in arrears for any charges relating
\nto usage in excess of service plan amounts or where the Customer has elected to
\nbe billed on an hourly basis. The monthly billing information shall be
\ntransmitted to the credit card processor designated by Intuit (the “Processor”).
\nIn selecting any Processors, Intuit shall in good faith consider CNC’s
\nrecommendations and observations, e.g., the difficulty of working with such
\n —-
\nProcessor, the requirement for CNC to establish new procedures or systems, and
\nthe economic effect on CNC of such changes.<\/p>\n
3. All Customer Charges processed by the Processor shall be deposited into
\nan Intuit account, and shall be Intuit’s sole property.<\/p>\n
30<\/p>\n
C. Customer Credit Procedures. During the initial phase of operations, the
\n ————————–
\nparties will handle Customer credits as follows:<\/p>\n
1. Improper or Inaccurate Billings. If CNC determines that it has
\n ——————————-
\nimproperly or inaccurately charged a Customer’s credit card for Internet
\nServices that were not provided to or used by the Customer, then CNC shall file
\nand process appropriate credits for the Customer with the Processor to correct
\nthe error. If the improper or inaccurate billing also resulted in inaccurate or
\nimproper Service Charges being assessed to Intuit, then CNC shall provide Intuit
\nwith appropriate credits to its Service Charges as a part of the next Monthly
\nReconciliation performed pursuant to Exhibit “D.”<\/p>\n
2. Fraudulent Billings. If a Customer contacts CNC to request a credit
\n ——————-
\nbecause the Customer claims that his\/her credit card was stolen or fraudulently
\nused, then CNC shall refer the Customer to his\/her credit card company for
\nappropriate handling of the matter.<\/p>\n
3. Discretionary Usage Credits. Intuit and CNC acknowledge that the
\n —————————
\nlong-term economic success of the Internet Services is affected substantially by
\nCustomers’ ongoing use of the Internet Services. Therefore, CNC may exercise its
\nreasonable judgment and grant usage credits to Customers where it believes such
\naction is in the best interests of Intuit. By way of example, if a Customer
\nexpresses surprise at receiving a large bill but acknowledges that he or she
\nactually used that amount of time, then CNC might elect to give the Customer a
\npartial usage credit (i.e., a dollar amount equivalent to a reasonable number
\n —-
\nof “free” hours of use on his or her next bill). Intuit, with CNC’s assistance,
\nshall establish guidelines on granting such credits from time to time. CNC shall
\nnot grant usage credits in contravention of such guidelines without Intuit’s
\nwritten consent. In its monthly reports to Intuit, CNC shall report its grant of
\nsuch usage credits.<\/p>\n
5. Bad Debts. Initially, upon notification that a Customer’s credit
\n ———
\ncharges will not be paid or have been denied, CNC will take steps to have a
\nnotification of such sent to the affected Customer the next time he\/she logs on
\nto the CNC Network that advises the Customer to contact CNC to resolve the
\ncredit problem and to obtain payment. During the Term, CNC and Intuit will work
\ntogether to develop and implement bad debt procedures as the need arises.<\/p>\n
31<\/p>\n
EXHIBIT “D”
\n ———–<\/p>\n
SERVICE AND CUSTOMER CHARGES<\/p>\n
A. SERVICE CHARGES.<\/p>\n
1. Service Charges. The Service Charges during the First
\n —————
\nContract Year payable to CNC for the CNC Services (subject to any adjustments
\npursuant to the Agreement) shall be as follows:<\/p>\n
Amount Customer\/Service Category
\n —— ————————-<\/p>\n
[*]<\/p>\n
2. Monthly Reconciliation Process. Within 3 business days of the end of each
\n ——————————
\ncalendar month, CNC shall conduct a “Monthly Reconciliation” as follows:<\/p>\n
a. Prepare and deliver to Intuit a report containing (A) the usage,
\n customer service and performance information described in Exhibit “A”,
\n and (B) the “Cumulative Service Charges” chargeable to Intuit for the
\n applicable calendar month, net of all applicable penalties, credits and
\n reimbursements calculated as follows: (i) the chargeable time and
\n related cumulative Service Charges for each Customer\/Service Category
\n (Full, Restricted, Non-Internet Traffic, and Off Peak Access) plus (ii)
\n —-
\n the amount of any Forecast Shortfall Penalty (calculated pursuant to
\n Item (1) below), if any, minus (iii) financial penalties for CNC’s
\n failure to meet Performance Standards (see Item (2) below), if any, plus
\n —-
\n (iv) any amounts owed to Intuit for Customer Service Charges<\/p>\n
32<\/p>\n
—————-
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
reimbursable by CNC pursuant to Exhibit “C” of the Agreement, minus (v)
\n —–
\n any amounts owed by Intuit to CNC for Customer Service charges
\n reimbursable by Intuit pursuant to Exhibit “C” of the Agreement, plus or
\n ——-
\n minus (vi) any other adjustments agreed to between the parties. CNC
\n —–
\n shall also include an invoice for the Cumulative Service Charges, as
\n adjusted pursuant to this Agreement, and Intuit shall pay such invoice
\n within thirty days of its receipt.<\/p>\n
(1) Forecast Shortfall Penalty. Within ten days of its receipt of
\n ————————–
\n CNC’s Monthly Reconciliation, Intuit will develop and provide to
\n CNC a non-binding rolling forecast of anticipated CNC Network usage
\n by the Customers for the next three calendar months. To the extent
\n that the actual volume of forecasted hours of a given month is less
\n than [*] of Intuit’s most recent estimate of forecasted hours for
\n such month, Intuit will pay CNC the difference between the actual
\n volume and [*] of the most recent estimate for such month using the
\n then effective Restricted Internet Services hourly charge. By way
\n of illustration, if Intuit’s most recent forecast in December,
\n 1995, estimates an aggregate total Customer usage for January, 1996
\n of [*] hours and the actual usage for January was [*] hours, then
\n Intuit would be required to compensate CNC at the foregoing rate
\n for the difference between [*] hours and [*] hours (i.e., [*] of
\n the most recent estimate of [*] hours).<\/p>\n
(2) CNC Performance Financial Penalty. This credit will be an amount
\n ———————————
\n equal to the financial penalties payable by CNC to Intuit
\n established pursuant to Exhibit “A” of the Agreement.<\/p>\n
b. Prepare and deliver (or make available for Intuit’s ready on-line
\n access) to Intuit a Customer Charge report reflecting the number of
\n connect hours for each Customer, the amount of Customer Charges billed
\n to Customers, the amount of payments billed to and received from
\n Customers, the amount of any credits given to Customers, and other
\n related billing or financial information reasonably requested by Intuit.
\n Additionally, CNC will deliver or make available on-line to Intuit a
\n report showing all charges to and collections from Customers on a
\n cumulative basis (“Monthly Customer Collections”) including names,
\n billing numbers, Internet name, anniversary date, time used per billing
\n period and connection, payment plan, e-mail preference, pay type, and
\n other information reasonably requested by Intuit.<\/p>\n
3. CNC Termination Right. If the average hourly usage of the Full Internet
\n ———————
\nServices Customers is less than five hours per month at the end of the
\nImplementation Phase, then CNC may request Intuit to enter into an arrangement
\nto compensate CNC for the difference between the actual average usage of such
\nFull Internet Services Customers and CNC’s desired usage for such Customer of at
\nleast five hours per month. If Intuit declines to enter into such an
\narrangement, then CNC may elect to terminate the Agreement effective after the
\nnext major revision and release date for all of the Products covered by the
\nAgreement subject to CNC’s obligation to assist Intuit in transitioning to a new
\nInternet access services provider pursuant to this Agreement.<\/p>\n
B. CUSTOMER CHARGES AND INFORMATION STATEMENTS<\/p>\n
Intuit will establish the Customer Charges from time to time in its sole
\ndiscretion. As a part of the CNC Services, CNC shall deliver or make available
\nby December 31, 1995 usage, account and billing information on a continuous
\nbasis to Intuit and all Customers (whether for Restricted or Full Internet
\nServices) through on-line access such as hours\/month usage, charges\/credits, and
\nother information reasonably requested by Intuit (the “Information Statement”).
\nAdditionally, upon<\/p>\n
33<\/p>\n
—————-
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
Customer request, CNC shall mail a hard copy of the Information Statement to
\nsuch Customer. Prior to December 31, 1995, Customers may call CNC to obtain
\ntheir billing and account status.<\/p>\n
C. CNC REPORTING<\/p>\n
1. Initial Reporting. During the period prior to January 1, 1996, CNC
\n —————–
\nand Intuit will define, develop and implement reporting requirements. During
\nthis initial period, CNC will use its reasonable best efforts to provide Intuit
\nwith requested information, but Intuit acknowledges that CNC’s initial reporting
\nwill be minimal.<\/p>\n
2. Ongoing Reporting. Not later than January 1, 1996, CNC will implement
\n —————–
\nthe report set agreed to between the parties on a monthly basis including
\ninformation such as:<\/p>\n
\n\n
\nNew Subscribers\/month (Actual) – Restricted Access, Full Access accounts
\n with price option 1, and Full Access account
\n with price option 2
\nTotal # Base Subscribers\/month – (same breakdown as above)
\n (including New)
\nAverage Personal Usage\/month – (same breakdown as above)
\nPeak hours\/day – Number of subscribers (same breakdown),
\n number of hours
\nPeak day\/week – (same breakdown as “per day” report)
\nNumber of inactive accounts – not used in a month per Customer\/Service
\n – category
\nCustomer Service Calls – (breakdown to be developed)
\n<\/c><\/c><\/s><\/caption>\n<\/table>\nD. INTUIT FORECASTING <\/p>\n
1. Initial Forecasting. During January 1, 1996, CNC and Intuit will
\n ——————-
\ndefine, develop and implement forecasting requirements. During this initial
\nperiod, Intuit will use its reasonable best efforts to provide CNC with
\nrequested information, but CNC acknowledges that Intuit’s initial reporting will
\nbe minimal.<\/p>\n
2. Ongoing Forecasting. Not later than January 1, 1996, Intuit will
\n ——————-
\nimplement the forecasting set agreed to between the parties including
\ninformation such as:<\/p>\n
\n\n
\nEstimated New Subscribers\/month – Restricted Access, Full Access accounts
\nEstimated Total # Base – (same breakdown as above)
\n Subscribers\/month
\nEstimated Average Personal – (same breakdown as above)
\n Usage\/month
\n<\/c><\/c><\/s><\/caption>\n<\/table>\nIntuit’s forecast shall be a rolling 90 day forecast updated on a monthly basis.
\nFor example, in December 1995, Intuit will make its forecast for the immediately
\nfollowing January, February and March 1996. Then, in January 1996, Intuit will
\nissue an updated forecast for the immediately following February and March, and
\nmakes its initial forecast for April. As noted in Section D.2.(b)(5) of Exhibit
\n“A”, CNC shall not be held responsible for failing to achieve those Performance
\nStandards adversely affected by a situation where Intuit’s initial [*] forecast
\nfor a month underestimates actual network usage or customer service calls by
\nmore than [*]; provided, however, that CNC will use its reasonable best efforts
\nto adjust to changes in Intuit’s forecasts and the actual volumes experienced at
\nany given time so as to attempt to achieve such Performance Standards.<\/p>\n
34<\/p>\n
—————-
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
EXHIBIT “E”
\n ———–<\/p>\n
SECURITY GUIDELINES<\/p>\n
CNC acknowledges that the security of Customer Information is an absolute
\nrequirement. During the Implementation Phase, the parties will develop all
\nnecessary or advisable systems, practices, guidelines and procedures to achieve
\nthis requirement, and continue to do so during the Term of the Agreement.<\/p>\n
35<\/p>\n
EXHIBIT “F”
\n ———–<\/p>\n
LICENSE AGREEMENT<\/p>\n
THIS LICENSE AGREEMENT (“Agreement”) is effective as of August 1, 1995
\n(the “Effective Date”), by and between Intuit Inc., a Delaware corporation
\n(“Intuit”), and Concentric Network Corporation, a Florida corporation formerly
\nknown as Concentric Research Corporation (“CNC”), with reference to the
\nfollowing facts:<\/p>\n
RECITALS
\n ——–<\/p>\n
A. CNC and Intuit have entered into that certain Internet Access Services
\nAgreement effective as of August 1, 1995 (the “Access Agreement”) pursuant to
\nwhich CNC has agreed to license the use of the CNC Code to Intuit.<\/p>\n
NOW, THEREFORE, for valuable consideration, receipt of which is hereby
\nacknowledged, the parties hereto agree as follows:<\/p>\n
1. Definitions. “CNC Code” shall mean the POP, login server, registration
\n ———–
\nserver, encryption, data security and other software described in or relating to
\nthe performance of the Access Agreement, including any related documentation,
\ndeveloped during the Term of the Access Agreement. Any other capitalized terms
\nnot defined herein shall have the meaning given them in the Access Agreement.<\/p>\n
2. Grant of License.
\n —————- <\/p>\n
2.1 CNC hereby grants to Intuit (or its designee, e.g., a replacement
\nInternet access service provider) a world-wide, non-exclusive, fully paid,
\nperpetual right and license (i) to use all or any portion of the CNC Code in
\nconnection with the production, copying, license, distribution and sale of the
\nProducts, including any portion of the CNC Code which may be distributed or made
\navailable to the Customers in order for them to properly access the CNC Network,
\nand (ii) to sublicense the copying and use of the CNC Code to the Customers in
\nconnection with the Customers’ use of the Products, provided that Intuit’s right
\nto distribute the CNC Code to its Customers shall extend only during the Term
\nand Transition Period. However, nothing in this Agreement or the Access
\nAgreement shall affect the continuing right (i) of Intuit to distribute Product
\ncontaining the CNC Code that may be in the process of manufacture or held in
\ninventory at the time that the Term of the Access Agreement terminates or
\nexpires, or (ii) of the Customers to use the CNC Code that is contained in any
\nProduct that they may acquire.<\/p>\n
2.2 The grant to Intuit in Section 2.1 includes the right to use, modify,
\nadapt, copy, display and otherwise exploit the CNC Code in any manner reasonably
\nnecessary or advisable for Intuit (or its designee) to provide Internet services
\nor access to the Customers during or after the Term of the Access Agreement.<\/p>\n
2.3 CNC and Intuit intend that the license granted to Intuit pursuant to
\nthis Agreement shall ensure (A) that Intuit is able (i) to smoothly, quickly,
\ncost-effectively and efficiently transition the CNC Services from CNC to another
\naccess services provider and (ii) to provide high quality services at the
\nperformance levels specified in the Access Agreement to the Customers on a
\ncontinuous basis in the event of such a transition, and (B) that the Customers
\nare able to use the Internet Services during, from and after such a transition.
\nHowever, the definition of the CNC Code and the scope and the duration of the
\nlicense and rights granted in this Agreement are not intended to extend beyond
\nthe definition, scope and duration, as applicable, that Intuit reasonably
\ndetermines in good faith to be necessary or advisable to accomplish the
\nintention of the parties as expressed in the foregoing sentence or in the Access
\nAgreement.<\/p>\n
36<\/p>\n
3. No Infringement. CNC represents and warrants on a continuing basis that
\n —————
\nneither the CNC Code, nor the exercise by Intuit of any of the rights granted
\nunder this Agreement, will infringe any intellectual property right of any third
\nparty and that there is no litigation or claim pending or, to CNC’s knowledge,
\nthreatened relating thereto. CNC shall and hereby does indemnify and defend
\nIntuit and hold it harmless from and against any and all claims, liabilities,
\nlosses, costs and expenses including, but not limited to, reasonable attorneys’
\nfees and costs of suit, incurred by Intuit as a result of or arising from any
\nclaim or proceeding made or brought against Intuit that the use, reproduction,
\nmarketing, sale, sublicensing or distribution of CNC Code infringes any patent,
\ncopyright or other rights of any third party, or that the CNC Code is defective.
\nThis indemnity shall not apply to the extent such claims result from Intuit’s
\nown modification or alteration of the CNC Code. Intuit shall promptly notify
\nCNC of any such claim(s) of which it becomes aware and shall, at CNC’s request
\nand expense, cooperate in the investigation and defense of such claim(s).<\/p>\n
4. Miscellaneous.
\n ————- <\/p>\n
4.1 Entire Agreement. This Agreement shall be governed by and construed
\n —————-
\nin accordance with the substantive laws of the State of California (not
\nincluding its choice of law provisions). This Agreement, as supplemented by the
\nAccess Agreement, constitutes the entire understanding between the parties with
\nrespect to the licensing of the CNC Code contemplated herein. This Agreement
\nshall not be modified except in a writing signed by and exchanged between both
\nof the parties and expressly referencing this Agreement. No waiver of any
\nprovision of the Agreement or any right or obligations of either party hereunder
\nshall be effective, except pursuant to a writing signed and delivered by the
\nparty waiving compliance. Any such written waiver shall not be construed as, or
\nconstitute, a continuing waiver of such breach, or of other breaches of the same
\nor other provisions of this Agreement. Neither party shall by mere lapse of
\ntime without giving notice or taking other action hereunder be deemed to have
\nwaived any breach by the other party of any of the provisions of this Agreement.
\nThis Agreement shall be binding on all successors and assigns of the parties.<\/p>\n
4.2 No Executory Obligation. CNC acknowledges that this Agreement is not
\n ———————–
\nan “executory contract” within the meaning of the U.S. Bankruptcy Code and shall
\nnot be subject to rejection by any debtor-in-possession, bankruptcy trustee or
\nthe like.<\/p>\n
4.3 Severability. If any provisions of this Agreement shall be held by a
\n ————
\ncourt, arbitrator or other tribunal of competent jurisdiction to be invalid or
\nunenforceable, such provisions shall be deemed valid and enforced to the maximum
\nextent permissible and the remaining portions of this Agreement shall remain in
\nfull force and effect.<\/p>\n
IN WITNESS WHEREOF, this Agreement shall be effective as of the Effective
\nDate and it shall be deemed accepted and made in San Diego, California.<\/p>\n
Execution Date: December 11, 1995<\/p>\n
INTUIT INC. CONCENTRIC NETWORK
\n CORPORATION <\/p>\n
By: \/s\/ William Harris By: \/s\/ Henry Nothhaft
\n ————————- ———————————-
\n William Harris, Executive Henry Nothhaft, President and CEO
\n Vice President <\/p>\n
Address: 6256 Greenwich Drive Address: 10590 N. Tantau Avenue
\n San Diego, CA 92122 Cupertino, CA 95014 <\/p>\n
37<\/p>\n
AMENDMENT NO. 1 TO
\n INTERNET ACCESS SERVICES AGREEMENT<\/p>\n
THIS AMENDMENT NO. 1 TO INTERNET ACCESS SERVICES AGREEMENT (“Amendment”) is made
\nand effective as of August 15, 1996 (the “Effective Date”), by and between
\nIntuit Inc., a Delaware corporation (“Intuit”), and Concentric Network
\nCorporation, a Florida corporation (“CNC”), with reference to the following
\nfacts:<\/p>\n
RECITALS
\n ——–<\/p>\n
A. Intuit and CNC are parties to that certain Internet Access Services
\nAgreement effective as of August 1,1995 (the “Agreement”).<\/p>\n
B. Intuit and CNC desire to expand the types of pricing plans available
\nto the Customers and, hereby, agree to amend the Agreement as set forth herein.<\/p>\n
NOW, THEREFORE, for valuable consideration, the parties hereto agree as
\nfollows:<\/p>\n
1. Except as otherwise defined herein, capitalized terms shall have the
\nmeaning given them in the Agreement.<\/p>\n
2. Exhibit “D” entitled “SERVICE AND CUSTOMER CHARGES” is hereby revised
\nand restated in its entirety as follows:<\/p>\n
“A. SERVICE CHARGES.<\/p>\n
1. Service Charges. Intuit may, at its discretion, offer pricing plans to
\n —————
\nthe Customers of various types. As of the date of this Amendment, Intuit intends
\nto offer plans in the following general categories.<\/p>\n
a. Standard Plans.
\n ————– <\/p>\n
(1) “Standard Plans” are arrangements whereby Customers are
\ncharged on an hourly basis, or charged a specified dollar amount for a certain
\nnumber of hours of “free” usage per month with monthly usage in excess of the
\nfree amount chargeable at a specified hourly rate, and CNC is compensated on a
\nhours usage basis. An example of this type of plan is Intuit’s current “Frequent
\nUser Plan” under which the Customer receives seven hours of usage for $9.95 per
\nmonth, and pays $1.95 for each hour of usage in excess of seven hours in the
\nspecified month. The Service Charges during the First Contract Year payable to
\nCNC for the CNC Services (subject to any adjustments pursuant to the Agreement)
\nunder Standard Plans shall be as follows:<\/p>\n
Amount Customer\/Service Category
\n —— ————————-<\/p>\n
[*] Full Internet Services Customers<\/p>\n
[*] Restricted Internet Services Customers<\/p>\n
——————
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
* Non-Internet Traffic<\/p>\n
[*] “Off-Peak Access” (from 2:00 a.m. to
\n 6:00 a.m. local time, where local is
\n the respective time zone of the
\n Customer)<\/p>\n
* CNC agrees to provide Intuit the most favored pricing on future Non-
\n Internet Traffic based on equivalent services offered, terms and
\n conditions of such offering.<\/p>\n
Service Charges for Standard Plans will be calculated pro rata on a one
\nsecond incremental basis (rounded to four decimal places). For example, Intuit
\nwould be charged unadjusted total Service Charges of [*] in a Monthly
\nReconciliation Report (see below) reflecting a total of 750.7 connection hours
\nfor such period for Full Internet Service Customers (peak time), 1,825.2
\nconnection hours for Restricted Internet Services Customers (peak time), and
\n2,015.6 connection hours for all Off-Peak Access”. A “connection” shall begin
\nwhen the CNC Network has validated a name and password, and terminate when the
\nmodem “carrier dropped” message occurs whether triggered by a customer-initiated
\ndisconnect or a shutdown of the connecting application. All Service Charges
\nunder Standard Plans for all Customer\/Service Categories for the Second Contract
\nYear commencing on the first anniversary of the Release Date shall be reduced
\n[*] for Full Internet Services Customers and from [*] for Restricted Internet
\nServices Customers. All Service Charges under Standard Plans for all
\nCustomer\/Service Categories for the Third Contract Year shall be reduced an
\nadditional [*] from the rates charged in the Second Contract Year, e.g., from
\n —-
\n[*] for Full Internet Customer Services Customers and from [*]\/hour to [*]\/hour
\nfor Restricted Internet Services Customers.<\/p>\n
(2) Option to Convert Frequent User Standard Plan. After the date of
\n ———————————————
\nthis Amendment, Intuit by written notice to CNC may elect to convert its current
\nFrequent User Plan from a Standard Plan to a Package Plan on the following terms
\nand conditions for Customers that subscribe to such converted plan:<\/p>\n
(a) Usage and Customer Charges. The Customer will pay Intuit
\n ————————–
\n[*] in advance for seven hours of usage, and [*] in arrears for each hour of
\nusage in excess of seven hours in the specified month.<\/p>\n
(b) Service Charges. As a part of the Monthly Reconciliation
\n —————
\nProcess, CNC will invoice Intuit for, and Intuit will pay CNC, (i) [*] for
\neach Intuit Frequent User Plan Customer that subscribed to such plan during the
\napplicable month, and (ii) [*] charged to such Customer for each hour of
\n“excess” usage by such Customer during the applicable month.<\/p>\n
(c) Additional Intuit Compensation. Additionally, as a part of the
\n ——————————
\nMonthly Reconciliation Process, CNC will pay Intuit a [*] “commission” for
\neach Customer who previously signed up for the Intuit Frequent User Plan and has
\npaid for at least two successive full months of service under the new Package
\nPlan arrangement.<\/p>\n
2<\/p>\n
——————
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
b. Package Plans. “Package Plans” are new arrangements implemented
\n ————-
\nunder this Amendment whereby Full Internet Services Customers are charged a
\nspecified dollar amount for a certain number of hours of “free” usage per month
\nwith monthly usage in excess of the free amount chargeable at a specified hourly
\nrate, and CNC is compensated as specified below. In the case that a given
\npackage plan is “unlimited,” the Customer may use an unlimited number of hours
\nfor a specified monthly rate. Under Package Plans, CNC will not be paid its
\nnormal hourly Service Charges (as noted above for Standard Plans) but, instead,
\nIntuit will pay Service Charges in another form to CNC as follows:<\/p>\n
(1) Usage and Customer Charges. The Customer will pay Intuit a
\n ————————–
\nspecified monthly rate in advance for a designated period of usage on a month-
\nto-month basis, and in arrears for any usage in excess of the “free” or included
\nmonthly usage amount.<\/p>\n
(2) Service Charges. As a part of the Monthly Reconciliation
\n —————
\nProcess, CNC will invoice Intuit for, and Intuit will pay CNC, a specified
\nmonthly Service Charge for each Intuit Unlimited Plan Customer that subscribed
\nto such plan during the applicable month.<\/p>\n
(3) Additional Intuit Compensation. Additionally, as a part of the
\n ——————————
\nMonthly Reconciliation Process, CNC will pay Intuit a “commission” (sometimes
\nreferred to as a “bounty”) for each Customer who previously signed up for the
\napplicable Package Plan (including both former Standard Plan Customers and new
\nCustomers) and has paid for at least a specified number of successive full
\nmonths of service. Commissions or bounties will be paid once during the
\n“lifetime” of a Customer when the Customer makes his\/her first change from a
\nStandard Plan to a Package Plan. Additionally, CNC and Intuit will from time to
\ntime review the amount and timing of the payment of the commission to determine
\nits fairness, and make such changes as the parties may mutually agree.<\/p>\n
c. Prepaid Plans. “Prepaid Plans” are new arrangements implemented
\n ————-
\nunder this Amendment whereby Full Internet Services Customers can purchase a
\nspecified level (which may be unlimited) of monthly usage effectively at a
\ndiscounted monthly fee if Customer pre-pays for a specified period. Under a
\nPrepaid Plan, CNC will not be paid its normal hourly Service Charges (as noted
\nabove for Standard Plans) but, instead, Intuit will pay Service Charges in
\nanother form to CNC as follows:<\/p>\n
(1) Usage and Customer Charges. The Customer will pay Intuit a
\n ————————–
\nspecified monthly rate in advance for the specified level of (or unlimited)
\nusage for a designated period of time, e.g.. pre-pay for six months at a monthly
\n —-
\nrate discounted from the normal “Package Plan” rate for unlimited monthly usage.<\/p>\n
(2) Service Charges. As a part of the Monthly Reconciliation
\n —————
\nProcess, CNC will invoice Intuit for, and Intuit will pay CNC, a specified
\namount per each Intuit Prepaid Plan Customer who subscribed to such plan during
\nthe applicable month.<\/p>\n
(3) Additional Intuit Compensation. Additionally, as a part of the
\n ——————————
\nMonthly Reconciliation Process, CNC will pay Intuit a “commission” (sometimes
\nreferred to as a “bounty”) for each Customer (including both former Standard
\nPlan<\/p>\n
3<\/p>\n
Customers and new Customers) who previously subscribed for the Prepaid Plan if
\nsuch Customer has not canceled such subscription during a specified number of
\nfull months of service under such plan. Commissions or bounties will be paid
\nonce during the “lifetime” of a Customer when the Customer makes his\/her first
\nchange from a Standard Plan to a Prepaid Plan. Additionally, CNC and Intuit will
\nfrom time to time review the amount and timing of the payment of the commission
\nto determine its fairness, and make such changes as the parties may mutually
\nagree.<\/p>\n
(4) Cancellation. A Prepaid Plan may be cancelable by the
\n ————
\nCustomer. Any cancellation adjustments or penalties shall be set forth in the
\napplicable Plan Amendment (see subsection “d” below).<\/p>\n
(5) Continuation Services. In the event that a Customer does not
\n ———————
\nnotify CNC or Intuit that he\/she intends to extend his\/her Prepaid Plan, the
\nCustomer will be notified (at the time of initially signing up for the Prepaid
\nPlan) that his\/her service plan shall automatically revert to the comparable
\nPackage Plan at the end of the applicable prepaid period.<\/p>\n
d. Implementation of Plans. A list of the Package Plans and Prepaid
\n ———————–
\nPlans Intuit intends to implement as of the date of this Amendment is attached
\nhereto as Attachment “D-1”. Subsequent changes to these new plans or the
\ncreation of new Package and Prepaid Plans shall be implemented by the parties
\nthrough the execution and exchange of “”Plan Amendments” substantially in the
\nform of Attachment “D-2” hereto.<\/p>\n
e. 800# Telephone Services. CNC shall provide 800# telephone services
\n ———————–
\nto the Customers under Standard, Package and Prepaid Plans as a method for the
\nCustomers to gain access to Intuit’s Services. Intuit will charge the Customers
\nat an initial rate of [*] per hour for this service as a part of the periodic
\nbilling of such Customers. Then, as a part of the Monthly Reconciliation
\nProcess, CNC will invoice Intuit for, and Intuit will pay CNC, [*] at the
\nforegoing hourly charge for each hour of 800# service billed to the Customers
\nduring the applicable month. Intuit and CNC will modify Customer charges, and
\nany amounts payable by Intuit related thereto, to account for changes in the
\ncost or pricing of 800# telephone services. Any 800# telephone charges shall be
\nin addition to any usage charges under the Customer’s applicable Standard,
\nPackage or Prepaid Plan.<\/p>\n
2. Monthly Reconciliation Process. Within 3 business days of the end of
\n ——————————
\neach calendar month, CNC shall conduct a “Monthly Reconciliation” as follows:<\/p>\n
a. Prepare and deliver to Intuit a report containing (A) the usage,
\ncustomer service and performance information described in Exhibit “A”, and (B)
\nthe “Cumulative Service Charges” chargeable to Intuit for the applicable
\ncalendar month, net of all applicable penalties, credits and reimbursements
\ncalculated as follows: (i) the chargeable time and related cumulative Service
\nCharges for each Plan\/Customer\/Service Category (Full, Restricted, Non-Internet
\nTraffic, and Off Peak Access) plus (ii) the amount of any Forecast Shortfall
\n —-
\nPenalty (calculated pursuant to Item (1) below), if any, minus (iii) financial
\n —–
\npenalties for CNC’s failure to meet Performance Standards (see Item (2) below),
\nif any, plus (iv) any amounts owed to Intuit for Customer Service Charges
\n —-
\nreimbursable by CNC pursuant to Exhibit “C” of the Agreement, minus (v) any
\n —–
\namounts owed by Intuit to CNC for Customer Service charges<\/p>\n
4<\/p>\n
——————
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
reimbursable by Intuit pursuant to Exhibit “C” of the Agreement, plus or minus
\n ————-
\n(vi) any other adjustments agreed to between the parties. CNC shall also include
\nan invoice for the Cumulative Service Charges, as adjusted pursuant to this
\nAgreement, and Intuit shall pay such invoice within thirty days of its receipt.<\/p>\n
(1) Forecast Shortfall Penalty. Within ten days of its receipt of
\n ————————–
\nCNC’s Monthly Reconciliation, Intuit will develop and provide to CNC a non-
\nbinding rolling forecast of anticipated CNC Network usage by the Customers
\nsubscribing to Standard Plans for the next three calendar months. To the extent
\nthat the actual volume of forecasted hours under Standard Plans for a given
\nmonth is less than [*] of Intuit’s most recent estimate of forecasted hours for
\nsuch month, Intuit will pay CNC the difference between the actual volume of
\nusage under Standard Plans and [*] of the most recent estimate for Standard Plan
\nusage for such month using the then effective Restricted Internet Services
\nhourly charge; provided, however, that Intuit shall not be subject to the
\nforegoing Forecast Shortfall Penalty if the actual number of Customers who
\nsubscribe for Package and Prepaid Plans for the applicable month is at least [*]
\nof the number forecasted by Intuit in its most recent monthly forecast for such
\nmonth. By way of illustration, if (i) Intuit’s most recent forecast in December,
\n1995, estimated an aggregate total Customer usage under Standard Plans for
\nJanuary, 1996 of [*] hours and the actual usage for January was [*] hours
\nand (ii) Intuit achieved only [*] of its aggregate estimate for forecasted users
\nunder both its Package Plans and Prepaid Plans, then Intuit would be required to
\ncompensate CNC at the foregoing rate for the difference between [*] hours and
\n[*] hours (i.e., [*] of the most recent estimate of [*] hours).<\/p>\n
(2) CNC Performance Financial Penalty. This credit will be an amount
\n ———————————
\nequal to the financial penalties payable by CNC to Intuit established pursuant
\nto Exhibit “A” of the Agreement.<\/p>\n
b. Prepare and deliver (or make available for Intuit’s ready on-line
\naccess) to Intuit a Customer Charge report reflecting the number of connect
\nhours for each Customer, the amount of Customer Charges billed to Customers, the
\namount of payments billed to and received from Customers, the amount of any
\ncredits given to Customers, and other related billing or financial information
\nreasonably requested by Intuit. Additionally, CNC will deliver or make available
\non-line to Intuit a report showing all charges to and collections from Customers
\non a cumulative basis (“Monthly Customer Collections”) including names, billing
\nnumbers, Internet name, anniversary date, time used per billing period and
\nconnection, payment plan, e-mail preference, pay type, and other information
\nreasonably requested by Intuit.<\/p>\n
3. CNC Termination Right. DELETED (no longer applicable)
\n ——————— <\/p>\n
B. CUSTOMER CHARGES AND INFORMATION STATEMENTS<\/p>\n
Intuit will establish the Customer Charges from time to time in its sole
\ndiscretion. As a part of the CNC Services, CNC shall deliver or make available
\nby December 31, 1995 usage, account and billing information on a continuous
\nbasis to Intuit and all Customers (whether for Restricted or Full Internet
\nServices) through on-line access such as hours\/month usage, charges\/credits, and
\nother information reasonably requested by Intuit (the “lnformation Statement”).
\nAdditionally, upon Customer request,<\/p>\n
5<\/p>\n
——————
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
CNC shall mail a hard copy of the Information Statement to such Customer. Prior
\nto December 31, 1995, Customers may call CNC to obtain their billing and account
\nstatus.<\/p>\n
C. CNC REPORTING<\/p>\n
1. Initial Reporting. During the period prior to January 1, 1996, CNC and
\n —————–
\nIntuit will define, develop and implement reporting requirements. During this
\ninitial period, CNC will use its reasonable best efforts to provide Intuit
\nwith requested information, but Intuit acknowledges that CNC’s initial reporting
\nwill be minimal.<\/p>\n
2. Ongoing Reporting. Not later than January 1, 1996, CNC will implement
\n —————–
\nthe report set agreed to between the parties on a monthly basis including
\ninformation such as:<\/p>\n
\n
\n New Subscribers\/month (Actual) – Standard Plans (Restricted
\n Access, Full Access accounts by
\n type of usage plan), Package
\n Plans, and Prepaid Plans. <\/p>\n Total # Base Subscribers\/month – (same breakdown as above) <\/p>\n
(including New) <\/p>\n
Average Personal Usage\/month – (same breakdown as above) <\/p>\n
Peak hours\/day – Number of subscribers (same
\n breakdown), number of hours <\/p>\n
Peak day\/week – (same breakdown as “per day”
\n report) <\/p>\n
Number of inactive accounts – not used in a month per
\n Customer\/Service category <\/p>\n
Customer Service Calls – (breakdown to be developed)
\n<\/c><\/s><\/table>\n
D. INTUIT FORECASTING<\/p>\n
1. Initial Forecasting. On an ongoing basis during the term of this
\n ——————-
\nAgreement, CNC and Intuit will define, develop and implement forecasting
\nrequirements.<\/p>\n
2. Ongoing Forecasting. Not later than January 1, 1996, Intuit will
\n ——————-
\nimplement the forecasting set agreed to between the parties including
\ninformation such as:<\/p>\n
\n
\n Estimated New Subscribers\/month – Standard Plans (Restricted
\n Access, Full Access
\n accounts by type of plan),
\n Package Plans and Prepaid
\n<\/c><\/s><\/table>\n 6<\/p>\n
\n
\n Plans<\/p>\n Estimated Total # Base – (same breakdown as above)
\n Subscribers\/month<\/p>\n
Estimated Average Personal – Standard Plans Only
\n Usage\/month
\n<\/c><\/s><\/table>\n
Intuit’s forecast shall be a rolling 90 day forecast updated on a monthly basis.
\nFor example, in December 1995, Intuit would make its forecast for the
\nimmediately following January, February and March 1996. Then, in January 1996,
\nIntuit would issue an updated forecast for the immediately following February
\nand March, and makes its initial forecast for April. As noted in Section
\nD.2.(b)(5) of Exhibit “A”, CNC shall not be held responsible for failing to
\nachieve those Performance Standards adversely affected by a situation where
\nIntuit’s initial forecast for a month underestimates actual network usage or
\ncustomer service calls by more than 20%; provided, however, that CNC will use
\nits reasonable best efforts to adjust to changes in Intuit’s forecasts and the
\nactual volumes experienced at any given time so as to attempt to achieve such
\nPerformance Standards.”<\/p>\n
3. The parties acknowledge and agree that the reconciliation, reporting
\nand forecasting of procedures described in Exhibit D shall be deemed amended to
\ninclude applicable information for the Package and Prepaid Plans.<\/p>\n
4. Intuit’s address for notifications given pursuant to Section 8.1 of
\nthe Agreement is hereby modified to the address specified below.<\/p>\n
5. Except as otherwise provided in this Amendment, the terms and
\nconditions of the Agreement remain in full force and effect.<\/p>\n
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment
\nas of the Effective Date and it shall be deemed accepted and made in San Diego,
\nCalifornia.<\/p>\n
INTUIT INC. CONCENTRIC NETWORK
\n CORPORATION<\/p>\n
By: \/s\/ WILLIAM HARRIS By: \/s\/ MICHAEL ANTHOFER
\n ————————– ————————
\n William Harris Michael Anthofer
\n Executive Vice President Chief Financial Officer<\/p>\n
6220 Greenwich Drive 10590 North Tantau Avenue
\n San Diego, CA 92122 Cupertino, CA 95014<\/p>\n
7<\/p>\n
ATTACHMENT “D-1”
\n PACKAGE AND PREPAID PRICING PLANS<\/p>\n
A. PACKAGE PLAN<\/p>\n
1. “lntuit Unlimited Plan”
\n ——————— <\/p>\n
(a) Usage and Customer Charges. The Customer will pay Intuit
\n ————————–
\n[*]\/month in advance for unlimited usage on a month-to-month basis.<\/p>\n
(b) Service Charges. As a part of the Monthly Reconciliation Process,
\n —————
\nCNC will invoice Intuit for, and Intuit will pay CNC, [*] for each Intuit
\nUnlimited Plan Customer that subscribed to such plan during the applicable
\nmonth.<\/p>\n
(c) Additional Intuit Compensation. Additionally, as a part of the
\n ——————————
\nMonthly Reconciliation Process, CNC will pay Intuit a [*] “commission” for
\neach Customer who previously signed up for the Intuit Unlimited Plan and has
\npaid for at least two successive full months of service.<\/p>\n
8
\n——————
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
ATTACHMENT “D-2”<\/p>\n
FORM OF PLAN AMENDMENT UNDER
\n INTERNET ACCESS SERVICES AGREEMENT DATED AUGUST 1, 1995<\/p>\n
Name of Plan:
\n————-<\/p>\n
Category of Plan (circle one): Standard Package Prepaid
\n—————————– <\/p>\n
Usage and Customer Charges: [TBD]
\n————————– <\/p>\n
Service Charges: As a part of the Monthly Reconciliation Process, CNC will
\n—————
\ninvoice Intuit for, and Intuit will pay CNC, $___ per each Intuit Plan Customer
\nwho subscribed to such plan during the applicable month.<\/p>\n
Additional Intuit Compensation. Additionally, as a part of the Monthly
\n——————————
\nReconciliation Process, CNC will pay Intuit a $__ commission for each Customer
\nwho previously subscribed for the Plan if such Customer has not canceled such
\nsubscription during the first _____ full months of service under such plan. The
\namount and timing of the payment of this commission will be reviewed, and if
\nmutually agreed upon, reset by CNC and Intuit every ___ months.<\/p>\n
Cancellation Provisions: [TBD]
\n———————– <\/p>\n
Former Plan replaced by this Plan (if applicable): [TBD]<\/p>\n
Other terms and conditions: [TBD]
\n————————– <\/p>\n
This Plan Amendment is effective as of ______________, 199_, and subject to all
\nof the terms and conditions of the Agreement.<\/p>\n
INTUIT INC. CONCENTRIC NETWORK
\n CORPORATION<\/p>\n
By: By:
\n ————————— —————————
\n Officer: Officer:
\n ——————- ——————–
\n Title: Title:
\n ——————— ———————-<\/p>\n
6256 Greenwich Drive, Suite 100 10590 North Tantau Avenue
\nSan Diego, CA 92122 Cupertino, CA 95014<\/p>\n
9<\/p>\n
AMENDMENT NO. 2 TO
\n INTERNET ACCESS SERVICES AGREEMENT<\/p>\n
THIS AMENDMENT NO. 2 TO INTERNET ACCESS SERVICES AGREEMENT (“Amendment”) is made
\nand effective as of October 31, 1996 (the “Effective Date”), by and between
\n —
\nIntuit Inc., a Delaware corporation (“Intuit”), and Concentric Network
\nCorporation, a Florida corporation (“Concentric” or “CNC”), with reference to
\nthe following facts:<\/p>\n
RECITALS
\n ——–<\/p>\n
A. Intuit and CNC are parties to that certain Internet Access Services
\n Agreement effective as of August 1, 1995, as amended by that certain
\n Amendment No. 1 to Internet Access Services Agreement dated August 15,
\n 1996, and as the meaning of certain of its provisions were confirmed
\n pursuant to that certain Acknowledgment and Limited Waiver dated August
\n 20, 1996 (collectively, the “Agreement”).<\/p>\n
B. Intuit and CNC desire to amend the Agreement to incorporate an additional
\n network performance standard regarding network accessibility.<\/p>\n
NOW, THEREFORE, for valuable consideration, the parties hereto agree as
\nfollows:<\/p>\n
1. Except as otherwise defined herein, capitalized terms shall have the meaning
\n given them in the Agreement.<\/p>\n
2. Exhibit “A”, Section C, sub-sections 2b and 2c entitled “Network Processing
\n Capacity Performance Standards (Latency)” and “Customer Service\/Support
\n Performance Standards,” respectively, are hereby re-labeled as sub-sections
\n 2c and 2d, respectively.<\/p>\n
3. Exhibit “A”, Section C, sub-section 2 entitled “Performance Standards” is
\n hereby amended to include the following sub-section 2b:<\/p>\n
“b. Network Connection Success Performance Standard. The CNC Network shall
\n ———————————————–
\nachieve average successful connection rates at or above the following
\nPerformance Standards for Intuit Customers attempting to access the CNC Network:<\/p>\n
Target Performance Standard:
\n ————————— <\/p>\n
[*] “successful connection” rate for VLA-type POP sites<\/p>\n
[*] “successful connection” rate for physical-type POP sites<\/p>\n
1<\/p>\n
——————
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
Minimum Performance Standard:
\n —————————- <\/p>\n
[*] “successful connection” rate for VLA-type POP sites<\/p>\n
[*] “successful connection” rate for physical-type POP sites<\/p>\n
Comments:
\n——– <\/p>\n
(1) CNC shall employ a PC-based dial\/connection-tool software acceptable to
\nIntuit to measure the successful connection rates of the CNC Network.<\/p>\n
(2) CNC shall conduct testing of the successful connection rates for the
\nCNC Network on a regularly scheduled basis, but no less often than once per
\ncalendar month. During the monthly test period, each POP site in the CNC Network
\nshall be tested at least once as specified in Comment (3) below.<\/p>\n
(3) The duration of the test period shall be at least a continuous 24 hour
\nperiod to satisfy the parties’ intention of testing the CNC Network during both
\ndaily peak and off-peak hours. CNC shall use a PC based dial\/connection tool
\nsimilar to the Gage Access ISP poll software using a Windows 95 PC
\nconfiguration, with a standard TCP\/IP stack\/dialer and a mutually acceptable
\nconsumer modem. The network will be tested by accessing at least [*] of the CNC
\nlocal access phone numbers in the continental United States and Canada during
\nthe testing period.<\/p>\n
(4) A “successful connection” is defined as a test call in which the
\ndial\/connection-tool software calls into a designated CNC Network POP site,
\nnegotiates a connection session, logs into the CNC Network, accesses a www html
\ntest page or pings a designated web site, and disconnects from the CNC Network.
\nFurther, CNC shall use commercially reasonable efforts to ensure that the test
\nsessions are structured so that the dial\/connection-tool software accurately
\nrecreates the Intuit customer experience, e.g., by incorporating variables in
\nconnection rates for different modem types, dialers, times of day, POP types
\n(VLA and physical), modem speed and Intuit-specific login procedures. Although
\nModem incompatibility problems will be excluded from the final test results, CNC
\nwill implement a mutually acceptable action plan to correct modem
\nincompatibility problems that occur with the modem types that account for the
\ntop [*] of all units sold in the United States and Canada, as applicable.<\/p>\n
(5) The test call shall be excluded from the calculation of overall test
\nresults if the dial\/connection-tool software establishes a connection but
\nexperiences an error condition. By way of example, a call in which a Windows95
\nremote access Service error condition is logged would not be counted as an
\nattempted call in the tabulation of test results.<\/p>\n
(6) The successful connection rates shall be calculated as follows:<\/p>\n
2
\n——————
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
(a) First, the overall “successful connection” rate for each physical
\nand VLA-type POP sites shall be determined on a POP-by-POP basis by (A)
\ntabulating the total number of test calls initiated by the dial\/connection-tool
\nsoftware and the corresponding number of successful connections reported by the
\ndial\/connection-tool software, (B) adjusting the total number of test calls
\ndownward for any dial\/connection tool software error conditions, and (C)
\ndividing the number of test calls that achieved successful connections by the
\ntotal number of test calls. By way of example, assume the CNC Network had only
\n2 physical-type POPs and the dial\/connection-tool software tests yielded the
\nfollowing results:<\/p>\n
\n\n POP Total Adjusted Successful Successful
\n Test Total Connections Connection
\n Calls Test Rate
\n Calls
\n
\n #1 30 29 27 93.1
\n #2 38 38 36 94.7
\n Totals 68 67 63 94.0
\n<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n (b) Second, the weighted average of the “successful connection” rate
\nshall be calculated for all POPs of one type in the CNC Network. This weighted
\naverage shall be calculated based on the number of ports at each POP. By way of
\nexample, assuming the CNC Network only had 2 physical-type POPs with the
\nfollowing number of ports and achieved the successful connection rates as
\ncalculated in Comment (6)(a) above, the weighted average for this 120 port
\nphysical POP network as a whole would be 0.9406 (or 94.06%) as indicated in the
\nfollowing table:<\/p>\n
\n\n POP POP Port Weighting Weighted
\n Successful Count at Factor Average
\n Connection applicable (based on Successful
\n Rate POP number Connection
\n of ports) Rate
\n
\n #1 93.1 48 .4 37.24
\n #2 94.7 72 .6 56.82
\n Totals 94.0 120 1.0 94.06%
\n<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\nA separate weighted average calculation would be performed for VLA-type POPs in
\nthe CNC Network.<\/p>\n
(c) Finally, the overall weighted average successful connection rate
\nfor the CNC Network as calculated above would be compared to the applicable<\/p>\n
3<\/p>\n
Performance Standard to determine whether or not CNC had achieved its Network
\nConnection Success performance goal for the applicable calendar month. By way of
\nexample, a comparison of the weighted average successful connection rate of
\n[*] for the above physical POPs to the physical-type POP Target Performance
\nStandard of [*] and the Minimum Performance Standard of [*] reflects that CNC
\nhas satisfied both performance standards in this performance metric.<\/p>\n
(7) The monthly CNC Network successful connection test results will be
\nreported to Intuit as required pursuant to the Agreement. Each POP-type category
\n(i.e., VLA and physical) must satisfy its respective performance standard for
\nthe CNC Network to satisfy this performance standard.<\/p>\n
(8) CNC will develop within one week and execute a corrective action plan
\nacceptable to Intuit to bring into conformance with the applicable Performance
\nStandard any Point of Presence that falls below a [*] successful connection
\nrate. If CNC’s corrective action plan requires that it obtain network services
\nfrom third parties, then the timetable for the execution of such plan will take
\ninto consideration the delivery dates for such third party services. CNC’s
\nfailure or inability to execute the corrective action plan to remedy the problem
\nshall be deemed to be a failure to satisfy the applicable Performance Standard
\nfor this measure.<\/p>\n
(9) From time to time, the parties shall evaluate the level of this
\nperformance standard compared to the network successful connection rates
\nachieved by other high quality Internet service providers as provided in Exhibit
\n“A”, Section C.1.”<\/p>\n
4. Except as otherwise provided in this Amendment, the terms and conditions of
\nthe Agreement remain in full force and effect.<\/p>\n
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment
\nas of the Effective Date and it shall be deemed accepted and made in San Diego,
\nCalifornia.<\/p>\n
INTUIT INC. CONCENTRIC NETWORK
\n CORPORATION<\/p>\n
By: \/s\/ WILLIAM HARRIS By: \/s\/ MICHAEL ANTHOFER
\n ————————– —————————
\n William Harris Michael Anthofer
\n Executive Vice President Vice President and CFO<\/p>\n
6220 Greenwich Drive 10590 North Tantau Avenue
\n San Diego, CA 92122 Cupertino, CA 95014<\/p>\n
4
\n——————
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
PRICING PLAN ADDENDUM NO. 1 PURSUANT
\n TO INTERNET ACCESS SERVICES AGREEMENT<\/p>\n
Name of Plan: “Intuit 6 Month Prepaid Plan”
\n ————————— <\/p>\n
(a) Usage and Customer Charges. Intuit will charge a new Customer
\n ————————–
\n(i.e., one who is not currently registered with Intuit for full Internet access)
\n[*] in advance for [*] months of unlimited network usage, apportionable to one
\nfree month of full Internet access followed by 6 months of full Internet access
\nat the rate of [*]\/month. Existing full Internet access Customers switching
\nfrom another Intuit plan to this Prepaid Plan will be charged [*] in advance
\nfor 6 months of full Internet access, apportionable at the rate of [*]\/month.<\/p>\n
(b) Service Charges. As a part of the Monthly Reconciliation Process,
\n —————
\nCNC will invoice Intuit for, and Intuit will pay CNC, [*] for each Intuit
\nCustomer that subscribes to this Prepaid Plan during the applicable month.<\/p>\n
(c) Additional Intuit Compensation. Additionally, as a part of the
\n ——————————
\nMonthly Reconciliation Process, CNC will pay Intuit an [*] “commission” for
\neach Customer who previously signed up for this Prepaid Plan and has been active
\non the service for at least three successive full months of service. Customers
\nwho have converted from a Package Plan to this Prepaid Plan after 60 days of
\nactive paid service will not be included in the calculation of the foregoing
\ncommission payable by CNC for this Prepaid Plan.<\/p>\n
(d) Cancellation. If a Customer under this Prepaid Plan cancels before
\n ————
\nthe completion of the full six month “paid” term, then they will be treated as
\nan Intuit Unlimited Package Plan customer (i.e., [*]\/month for unlimited use)
\nand refunded accordingly. By way of example, an existing Customer who canceled
\non or before the third anniversary date would be refunded [*]. A new Customer
\nwill receive credit for the first free month, so if they canceled on or before
\nthe third anniversary date they would be refunded [*] for the four remaining
\nmonths that were not used.<\/p>\n
(e) Continuation of Services. When customers sign up for this Prepaid
\n ————————
\nplan they will be notified that they will revert to Intuit’s Unlimited Package
\nPlan at the end of the subscription period (i.e., currently [*]\/month for
\nunlimited use).<\/p>\n
Effective Date: October 15, 1996<\/p>\n
INTUIT INC. CONCENTRIC NETWORK
\n CORPORATION<\/p>\n
By: \/s\/ WILLIAM HARRIS By: \/s\/ MICHAEL F. ANTHOFER
\n —————————- —————————–
\nName: Bill Harris Name: Michael F. Anthofer
\n ————————– —————————
\nTitle: Executive Vice President Title: VP & CFO
\n ————————- ————————–<\/p>\n
6220 Greenwich Drive 10590 North Tantau Avenue
\nSan Diego, CA 92122 Cupertino, CA 95014<\/p>\n
——————
\n [*] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
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