Quotation for DiaLinx Service - GTE Internetworking Inc. and NetZero Inc.
QUOTATION FOR DIALINX SERVICE-NETZERO
TO: NetZero Quote Date: 12/09/98
Attn: Ron Burr Quote Valid To: 12/31/99
Quote Number: NZ120998
QUOTATION FOR DIALINX SERVICE
This Quotation is for DiaLinx Service Version 2.0, and sets forth the pricing
and volume commitments agreed to under the Service Schedule for DiaLinx
Services. This Quote shall supercede Quote Number NZ10698.
1. RECITAL: For ease of understanding, this section highlights the general
elements of pricing and commitments:
1.1 Network Access. You will be charged for Network Access which shall be
the roaming Hourly Rate for each hour that a user may access the GTE
Internetworking DiaLinx network ("Network").
1.2 Minimum Customer Commitment: In return for volume discounts (inherent
in the prices stated below), you have agreed to use a minimum dollar
volume of network access in each month of the agreement set forth
below ("Minimum Customer Commitment").
1.3 800/888 Charge: You will be billed additional charges for user's use
of the 800 or 888 dial access.
2. COMMENCEMENT DATE: The Commencement Date shall be the date of execution
of this Quote.
3. SERVICE PERIOD: The Service Period shall be from the Commencement Date
until [***].
4. MINIMUM CUSTOMER COMMITMENT: During the Service Period, [***], you have
agreed to use the following Minimum Customer Commitment*:
MONTHS FROM COMMENCEMENT DATE MINIMUM CUSTOMER COMMITMENT
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Commencement to December 1998 [***]
January 1999 to June 1999 [***]
July 1999 to December 1999 [***]
5. INSTALLATION CHARGE: GTE shall credit to Customer the Installation
charge of $25,000 billed under Quote NZ10698. Such credit may be applied
toward the first month of usage
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
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under this revised Quote. In addition, GTE shall re-price all previously
billed monthly usage charges for October and November, such that the pricing
in this Quote applies. If such charges have already been invoiced GTE will
affect such re-pricing via a credit.
6. RATES AND CHARGES: You have the following pricing options available.
Roaming Analog Hourly Rate: [***]
Roaming 150N Hourly Rate: [***]
800/888 Rate: [***]
After the initial 6 months of the Service Period, customer may request
"port-only" charges.
ADJUSTMENTS TO ROAMING ANALOG HOURLY RATE: In any month where the number
of Roaming Analog Hours used exceeds the thresholds in the table below, the
roaming Analog Hourly Rate for that month will be reduced to the
corresponding Adjusted Hourly Rate.
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
For each invoice GTE will calculate customer's actual hours times the
applicable Adjusted Hourly Rate ("Actual Charges"). GTE will then
calculate the charges assuming Customer used the next thresholds minimum
number of hours ("Adjusted Charges"). In the event the Adjusted Charges
are less than the Actual Charges, Customer will be invoiced the Adjusted
Charges amount. For example, if Customer uses 890,000 hours, the Actual
Charges are [***], the Adjusted Charges are [***] and therefore, customer
will be invoiced the Adjusted Charges amount.
All Network connect time is rounded up to the next highest minute and
billed in one-minute increments.
All pricing is listed as U.S. dollars.
GTE Internetworking expects the DiaLinx network to change over time in
order to meet the changing needs of our customers. GTE Internetworking
reserve the right to add or delete the dial-in access numbers associated
with a specified zone from time to time.
We also reserve the right to add additional services and zones to the
foregoing rate schedule as the DiaLinx network develops (e.g. Canadian
800 Service). These additional services and respective prices will be
made available to you on an on-going basis, and will be deemed added to
the foregoing rate schedule upon notice by us to you that they are
available. For an updated list of services, prices, and dial-up access
number associated with each zone, please consult our Web page or contact
your GTE Internetworking representative.
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
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7. BASIC SERVICES -- RECURRING FEES:
7.1 NETWORK ACCESS: You will be charged for Network Access, which, for
each calendar month, shall be the greater of either (A) or (B):
(A) Access charges due in accordance with Section 6, above; OR
(B) Minimum Monthly Customer Commitments, as set forth in Section 5
above
7.2 800/888 CHARGE: In addition to any other applicable charges under
section 6.0, you will be charged the 800/888 charge for each hour that
an End User accesses the Network via the 800/888 access number. Network
access connect time is measured in one (1) minute increments,
rounded up to the next highest minute.
7.3 DIALER/PHONE BOOK SOFTWARE. Based on Microsoft's CONNECTION
MANAGER, GTE will provide a software client that provides a PPP
dialer, and Local Number Phone Book.
7.4 LEVEL I (END-USER) SUPPORT: Level 1 will be the responsibility of
Net Zero.
7.5 LEVEL II AND III (NETWORK) SUPPORT. Every GTE Internet working
customer is provided with second-level help desk support designed to
work with either your own or out-sourced help desk, your project
administrator, or your IS department. This help desk is integrated
with our Cambridge NOC and is the first point of contact for opening
new trouble tickets, getting updates on existing ones, or simply
asking information questions.
8. CREDIT AND PAYMENT TERMS. Customer shall be invoiced bi-weekly Payment is
due [***]. Notwithstanding the preceding, in no event shall the
aggregate amount due to GTE for DiaLinx Services (including invoiced and
un-invoiced amounts ("Customer Balance")) exceed [***]. In the event the
actual Customer Balance [***], GTE shall notify Customer in writing
("Payment Notice"). Customer shall be obligated to immediately pay i)
all invoiced amounts, or ii) an amount sufficient to reduce the Customer
Balance to [***], whichever is greater. For example, if Customer Balance
is [***] and Customer has an unpaid invoice in the amount of [***],
Customer must pay to GTE [***]. In the event that GTE does not receive
such payment within 5 days of the Payment Notice, GTE shall have the right
to terminate or suspend all services provided hereunder without further
notice.
After the initial 6 months of the Service Period and contingent upon (a)
Customer completing additional investment round(s) valued at 10 million
or more, (b) no adverse change to Customer's business and (c) consistent
timely payments hereunder, GTE shall invoice Customer on a
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
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monthly basis and increase Customer Balance threshold to [***]. Payment
shall be due [***]. In the event the actual Customer Balance exceeds
[***], GTE shall send Customer Payment Notice. Customer shall be
obligated to immediately pay i) all invoiced amounts, or ii) an amount
sufficient to reduce the Customer Balance to [***], whichever is greater.
In the event GTE does not receive the required payment within 5 days of
the Payment Notice, GTE shall have the right to terminate or suspend all
services provided hereunder without further notice.
9. ADDITIONAL CUSTOMER RESPONSIBILITIES. You shall provide expected usage
forecasts on a city by city basis to us ninety (90) days in advance. In
addition, you shall use commercially reasonable efforts to provide us
with advance information as to marketing programs that may materially
impact future usage.
10. USER "KILL" SERVER. On or before March 31, 1999, GTE shall deliver to
customer functionality within the GTE network to, upon Customer's
request, disconnect one of Customer's users. Customer shall provide GTE
with suggestions regarding such functionality no later than December 20,
1998. GTE does not warrant that the final design or functionality shall
include any of the Customer's suggestions. In the event that GTE does
not release such functionality on or before March 31, 1999, GTE shall
reduce the Hourly Rate for services by [***] until such time as the
service is released.
11. Upon your written request and your demonstration to GTE through
acceptable (i) usage levels; (ii) past payment performance; (iii)
demonstrated creditworthiness and (iii) performance and adherence to the
terms and conditions of this Agreement; GTE shall commence negotiations,
in good faith, of a new Agreement to provide services for Customer on a
dedicated per port basis.
PLEASE SIGN BELOW TO INDICATE YOUR UNDERSTAND AND ACCEPTANCE OF THE TERMS OF
THIS QUOTATION.
Company (Type or Print Full Customer name): NetZero, Inc.
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Signature: /s/ Andrea L. Roschke Date: 12/16/98
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Print name: Andrea L. Roschke Title: CFO
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[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
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AMENDMENT TO QUOTATION FOR DIALINX SERVICES
JULY 1999
This Amendment ("Amendment") amends the terms and conditions of the
Quotation - DiaLinx Services #[***] dated December 9, 1998 (the
"Quotation") under the Master Agreement for Internetworking Services and
the DiaLinx Service Schedule dated October 13, 1998 (individually, the
"Master Agreement" and the "Service Schedule" and, collectively with the
Quotation, the "Agreement") between NetZero, Inc. ("you" or "NetZero")
and GTE Internetworking Incorporated ("we" or "GTE Internetworking") as
set forth herein.
In consideration of the mutual covenants and agreements contained herein and
in the Agreement, and in satisfaction of the obligations set forth in section
11 of the Quotation, the parties agree as follows:
I. The parties agree to delete section 3 of the Quotation in its entirety
and to replace it with the following:
"3. SERVICE PERIOD. The Service Period shall be from the
Commencement Date until December 31, 2000."
II. The parties agree to modify section 4 of the Quotation by changing the
table such that the Minimum Customer Commitment set forth in the
bottommost row will be in effect from July 1999 through July 2000.
III. The parties agree to modify section 6 of the Quotation by adding the
following as though set forth therein in its entirety:
"6. Rates and Charges: Rates for access to the Network in
accordance with the terms of this section.
Effective August 1, 1999, the Roaming Analog Hourly Rate and the Roaming
ISDN Hourly Rate will be reduced to [***] per hour.
Effective November 1, 1999, you will be charged the lesser
of either (A) or (B):
(A) [***] times the total number of hours of Roaming
Analog and Roaming ISDN Hourly usage;
OR
(B) [***] times the total number of hours of Roaming
Analog and Roaming ISDN Hourly usage plus a
surcharge for any excess use of the DiaLinx I
network local access numbers. The surcharge is
calculated as [***] times the number of hours on the
DiaLinx I network that exceeds [***] of the total
hours of usage Network wide. The DiaLinx I network
local access numbers are listed in Appendix A. GTE
Internetworking will use commercially reasonable
efforts to ensure that the DiaLinx Network will have
adequate capacity to allow NetZero to move hours
from DiaLinx I local access numbers to non-DiaLinx I
local access numbers.
For access to the Network via 800 series access numbers (e.g. 1-888) you
will be charged at the following Hourly Rates:
U.S. 800: [***]
Canadian 800: [***]
GTE Internetworking expects the DiaLinx Network to change over time
in order to meet the changing needs of our customers. We reserve
the right to add to, delete or change the dial-in access numbers.
GTE Internetworking shall not, however, take any action to reduce
the network capacity available to NetZero in any given city for
the term of this Agreement, without 90 days prior written notice
specifying in detail the numbers affected by such decrease.
Subject to the foregoing, all of the GTE network is available to
NetZero on the terms and conditions set forth herein for the term
of this Agreement and any renewals hereof.
All Network connect time is rounded up to the next highest minute
and billed in one minute increments. Invoices are issued monthly
and due net thirty days.
All pricing is listed as U.S. dollars.
IV. The parties agree to delete sections 9, 10 & 11 of the Quotation in
their entirety and to replace them with the following:
"9. CAPACITY PLANNING:
9.1 We use commercially reasonable efforts to reduce Network
costs through numerous means such as volume purchase
agreements, more efficient network designs, and the receipt of
off-setting compensation. Once per quarter, the parties will
review network usage, costs, customer commitment and pricing
to evaluate in good faith whether to reduce the Roaming Analog
Hourly Rate.
9.2 For purposes of capacity planning, you agree to provide
best estimate monthly rolling ninety (90) day usage forecasts
on a city by city basis. In addition, you agree to use
commercially reasonable efforts to provide us with advance
information as to your marketing programs that will materially
affect future usage.
9.3 You agree to provide GTEI with at least 90 days prior
written notification of any intent to significantly reduce
usage on a single or group of local access numbers.
Beginning January 1, 2000, should a significant (more than
20%) reduction of usage occur for a given access number from
one calendar month (the "Base Month") to the next calendar
month, to the extent directly due to the actions of NetZero
and not as a result of decreased usage by NetZero
subscribers or any other factor, without such prior
notification, GTEI shall charge NetZero at the then current
Analog Hourly Rate for 50% of the reduced number of hours.
The reduced number of hours shall be calculated as the
difference between the actual usage in a month and the usage
during the Base Month, and shall apply for up to ninety
days (but shall not apply if adequate notice as described
above is given or if the usage increases so that the usage
is not more than 20% below the usage in the Base Month). The
parties
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[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission.
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acknowledge that this payment is an approximation of the
losses suffered by GTEI for unplanned capacity under-
utilization, and is not intended as a penalty.
10. User "Kill" Server. By September 15, 1999, GTE shall furnish
to customer functionality within the network to, through an
automated call to an API, disconnect one of Customer's users.
Customer agrees to provide GTE with any information on design or
functionality they would like to see for such a service by September
1, 1999. GTE does not warrant that the final design shall meet all
of their design suggestions. Should GTE not meet the September 15,
1999, and failure to meet such date is not due on part to Customer,
GTE shall reduce the Hourly Rate for services by [***] until such
time as the service is delivered."
11. Year 2000 Compliance. The "Year 2000 Problem" refers to the
potential inability of some computer software to appropriately treat
date-related information or functions involving dates of December
31, 1999 and thereafter. GTEI represents that is has made and will
continue to make commercially reasonable efforts to ensure that the
services it provides under this Agreement will not be materially
impaired by the Year 2000 Problem, provided, however, that Client
acknowledges that GTEI is an integrator of systems and services
provided by other entities, and GTEI cannot guarantee that third
party products will function without adverse effect from the Year
2000 Problem. GTEI will periodically inform Client of the steps
GTEI is taking to ensure against adverse effects on the GTEI
services caused by the Year 2000 Problem through either direct
communications or updates on GTE's web-site, and agrees to inform
Client promptly in writing of any material risk of which it becomes
aware that GTES's services will be materially affected by the Year
2000 Problem."
V. Section 6 of the Master Agreement is hereby deleted in its entirety
and replaced with the following: "We will indemnify you for damages,
costs and attorneys fees you incur from any third party claim that
our design of the Services infringes any U.S. patent, copyright,
trademark, trade secret or other intellectual property right, except
to the extent that such claim arises from your combination of the
Services with other products or services not provided by us, or your
modification of the Services. You will indemnify us for damages,
costs and attorneys fees we incur from any third party claims (i)
arising out of the content of the transmissions which you or your end
users send via the Services; (ii) that you in using Services have
failed to comply with applicable laws and/or regulations (including,
without limitation export control laws); (iii) arising out of your
breach of the terms of any applicable license for GTE provided
software; or (iv) arising out of business activities conducted by you
via the Services. In the event of a claim, the party requesting
indemnity shall deliver prompt written notice to the other and provide
the other party with the right to defend such action. The indemnifying
party shall pay all judgements, fees, expenses (including attorneys
fees) and amounts paid in settlement of a claim. No settlement of a
claim by the indemnifying party will be made without the consent of
the indemnified party, which consent shall not be unreasonably
withheld. Failure to provide written notice shall release a party
from its obligations under this paragraph only to the extent that the
indemnifying party is prejudiced by such failure. In no event shall
either party be entitled to indemnity hereunder if the claim that gave
rise to the indemnity is as a result of such party's willful misconduct
or breach of its obligations under this Agreement. THE PARTIES DISCLAIM
THE IMPLIED WARRANTY OF NON-INFRINGEMENT, RELYING INSTEAD ON THE TERMS
OF THIS SECTION."
VI. Section 9 of the Master Agreement is hereby deleted in its entirety and
replaced with the following: "You shall not use the Services in ways
that violate laws. You shall maintain and enforce an acceptable use
policy that is consistent with applicable laws, regulations, and
Internet community standards. (For example, you shall have a policy
against distribution of unsolicited bulk electronic mail ("spamming")
and shall take reasonable actions to enforce such policy.) You agree
to work with us in good faith to address any abuse complaints and to
terminate services to end users that we reasonably designate as
violators of acceptable use guidelines. In the event of unforeseen
forms of abuse, or unacceptable abuse complaints, we reserve the right
to negotiate good faith changes to your acceptable use policy."
VII. The last sentence of Section 10 of the Master Agreement is hereby
deleted in its entirety and replaced with the following: "We reserve
the right, but assume no obligation, to suspend the Services (or any
portion thereof) in the event that: (i) you are overdue in payments
and have not cured such delinquency within three business days
following written notice of such; or (ii) in our reasonable judgment
you have violated Section 9 of the Master Agreement which
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
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violation is having a material adverse effect on us and is not
corrected such condition to our reasonable satisfaction within 48
hours following written notification."
VIII. Item (b) of Section 12 of the Master Agreement shall be deleted
and replaced with the following: "(b) [***], whichever is less."
IX. The second sentence of Section 13 of the Master Agreement regarding
restrictions on assignments is hereby deleted in its entirety and
replaced by the following: "Except for assignments by one party to
affiliates of such party, neither party may assign the Agreement
without the prior written consent of the other party; provided,
however, either party may assign this agreement in connection with
the transfer of all or substantially all of the assets or the stock
of such party without the consent of the other party."
X. The last sentence of Section 13 of the Master Agreement is hereby
amended to add the following to the end of such sentence "and you."
XI. Section 9 of the Service Schedule is hereby amended to add the
following: "Any such price changes will not be effective without at
least thirty (30) days prior written notice. You may decrease your
capacity commitments without any penalty or restriction referenced in
Section 9 of this Quotation ("Capacity Planning") in the event of such
price changes, but shall not decrease your Minimum Customer Commitment."
XII. Sections 10 and 11 of the Schedule are hereby deleted. In Section
12 of the Schedule the subparagraph entitled "Content
Responsibility" is hereby deleted.
XIII. Notices under this Agreement shall be in writing and shall be deemed
effective (1) upon personal delivery to the persons to be notified
or (2) at 11:00 a.m. on the business day following the deposit with a
reputable overnight courier (with such package designated for priority
next day delivery and delivered to such courier at a time when such
courier can effect such next day delivery) and addressed to the
persons to receive such notice as designated below; provided, however,
in each case an email to the persons to receive such notice shall
also be sent prior to the time such notice is to be deemed effective.
The persons and/or addresses to receive notices shall be as follows,
but shall be subject to change consistent with the foregoing notice
provisions: To NetZero: 2555 Townsgate Road, Westlake Village, CA
91361, Attn: Chief Financial Officer at email
CHILLIARD@CORP.NETZERO.NET and to General Counsel at email
FRANDALL@CORP.NETZERO.NET. To GTE Intenetworking: 150 CambridgePark
Drive, Cambridge, MA 02114, Attn: Director of Contracts at email
PSCANTAL@BBN.COM and to Director of Remote Access Services at email
PATK@BBN.COM.
Except as expressly modified by this Amendment, all terms and conditions of
the Agreement shall remain in full force and effect. The terms and
conditions of the Agreement (including, but not limited to, any disclaimers
and limitations on liability) will continue to apply to the services
described herein. Any terms defined in the Agreement and not defined in the
Amendment shall have the meaning given in the Agreement. In the event of
any conflict between the terms of the Agreement and the terms of this
Amendment, the terms of this Amendment shall control.
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[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission.
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NetZero, Inc.
Signature: /s/ Charles S. Hilliard Date: 8/5/99
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Print Name: /s/ Charles S. Hilliard Title: SVP & CFO
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GTE Internetworking Incorporated
Signature: /s/ Cathleen Butt Date: 8/6/99
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Print Name: /s/ Cathleen Butt Date: Senior Contracts Representative
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