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Exhibit 10.7
AMENDMENT NO. 1
THIS AMENDMENT NO. 1 (the "Amendment") is entered into effective as of the
__ day of August 1999, between Corio Corporation ("Customer") and Concentric
Network Corporation ("Concentric").
WHEREAS, Customer and Concentric are parties to a ConcentricHost Server
Solutions Service Agreement, dated 29 January 1999 ("Agreement").
WHEREAS, Customer and Concentric wish to amend the Agreement to
incorporate specific, additional terms addressing the establishment of a
multi-server, dedicated area hosting environment at Concentric's data center,
NOW, THEREFORE, in consideration of the mutual covenants and conditions
in this Amendment, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Services. Section 1.0, Services, is deleted in its entirety and
replaced with the following new section:
"Subject to the terms and conditions of this Agreement, during
the term of this Agreement, Concentric will provide to Customer
the goods and services (collectively, the "Services") as
described in the Statement of Work, attached hereto, as Exhibit
B."
2. Services. Section 1.0, Services: The additional provision is added
as follows:
"During the term of this Agreement, Customer agrees that
Concentric shall be the exclusive provider of [*] of Customer's
hosting services requirements with respect to new business from
the Effective Date of this Amendment. This exclusivity
requirement shall not be applicable to new business customers of
Customer who express a preference for an alternative hosting
provider, and with whom Customer would not reasonably be able to
secure business without acceding to such preference."
3. Payment and Invoices. Subsection 2.1, Fees, is deleted in its
entirety and replaced with the following new subsection:
"Customer shall pay Concentric the fees and charges as set forth
in Exhibit A, Pricing, attached hereto. These fees and charges
may include one-time set-up charges, one-time engineering design
fees, engineering support fees, sustaining engineering fees,
cross connection fees, as well as certain monthly recurring
fees. During the term of this Agreement the fees shall be fixed;
however, should Concentric's general fees for the Services
decrease during the term, Customer's fees will be adjusted
accordingly. In addition, the parties agree, on an annual basis,
to discuss pricing to insure such pricing is competitive in the
market. If such pricing is not competitive, then the pricing
will be decreased accordingly."
4. Marketing and Promotion. A new subsection, 7.2 is added as follows:
7.2 During the term of this Agreement, (1) Customer will
refer to Concentric as its preferred data center and
hosting provider in all public forums; and, (2)
Concentric will refer to Customer as its preferred
Applications Service Provider (for the applications that
Customer supports) in all public forums."
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[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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5. Term and Termination. Subsection 6.1, Term, is deleted in its entirety
and replaced with the following new Subsection:
"The term of this Agreement will commence on the Effective Date and
continue for the term of three (3) years from the execution date of this
Amendment. Upon written notice thirty (30) days or more prior to the
expiration of the initial term, Customer will indicate whether to extend
the term for an additional two (2) years or such term as Customer may
request, or let the Agreement expire. Should Customer elect to renew this
Agreement, the parties shall agree upon the fees and Commitment for such
renewal term. Absent such thirty (30) day notice by Customer, this
Agreement shall automatically renew for successive one (1) year terms
under the prices then in effect for the Services."
6. Term and Termination. Subsection 6.2(a), After the first clause, ending
with the word "breach", add the following:
"and if Customer is terminating due to a breach by Concentric under this
subsection, then both this Agreement and the Warrant to Purchase Series C
Preferred Stock, attached hereto as Exhibit C, will be terminated, and any
benefits or rights that Concentric may have under the Warrant to Purchase
Series C Preferred Stock are revoked in their entirety. However, if
Concentric is terminating due to a breach by Customer under this
subsection, then the Warrant to Purchase Series C Preferred Stock, attached
hereto as Exhibit C, shall remain valid and continue in full force, unless
terminated by Concentric by written notice to Customer."
7. Term and Termination. Subsection 6.3(a), Effect of Termination, is
deleted in its entirety.
8. General Provisions. A new subsection 9.11 is added as follows:
"9.11. This Agreement is subject to the issuance to Concentric of a warrant
to purchase Series C Preferred Stock of Corio, on the terms and subject to
the conditions contained in that certain Warrant to Purchase Series C
Preferred Stock, attached hereto as Exhibit C."
9. Defined Terms. All capitalized terms in this Amendment, not otherwise
defined herein, shall have the meanings ascribed to them in the Agreement.
10. Ratification and Affirmation. The Agreement, as modified by the express
terms of this Amendment, is hereby ratified and affirmed by Customer and
Concentric, and shall remain in full force and effect.
IN WITNESS WHEREOF, the Parties have executed this Amendment effective as
of the date first above written.
CUSTOMER: CONCENTRIC:
CORIO CORPORATION CONCENTRIC NETWORK CORPORATION
By: /s/ GEORGE KADIFA /s/ HENRY R. NOTHHAFT
----------------- -------------------
Name: George Kadifa Name: Henry R. Nothhaft
--------------- -----------------
Title: President & CEO Title: CEO
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EXHIBIT A
PRICING
<TABLE>
<CAPTION>
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POINT TO POINT CONNECTION TO DATA CENTER SETUP MONTHLY
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<S> <C> <C>
o Cross Connection [*] [*]
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</TABLE>
<TABLE>
<CAPTION>
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NETWORK PERFORMANCE DATA FEEDS TO CORIO SETUP MONTHLY
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<S> <C> <C>
o Management System setup and use for
1,000 end points [*]
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o Pinging of alternate connections
data feed [*] [*]
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o Vertical notification per data feed if
requested at the time of installation [*]
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</TABLE>
<TABLE>
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TAPE BACK UP TAPES 30-60 GBS OF STORAGE PER TAPE
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<S> <C>
o Per tape (30 to 60 GBs) [*]
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</TABLE>
CORIO PER SERVER HOSTING SERVICE:
[*]
(per server per month charge to include the following components found on this
page and the next page)
Server Management
o Server management up to the OS level
ASSET MANAGEMENT SYSTEM
Corio specific asset management system
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REPORTING SERVICES
o Server outage reporting
o Bandwidth utilization reporting
o Corio specific tape backup reporting
o Corio specific asset management reporting
TAPE BACKUP
o All physical effort involved with tape backups
o Management of tape backup system as defined in the statement of work
SYSTEM ENGINEERING SERVICES
o Up to 1 hours per server per month
ENVIRONMENT (16 FT. X 16 FT. CORIO CAGE)
o Secure, scalable areas including locked cabinets, racks, shelves, locked
cages and private suites
o Telco hardened
o Environmental controls
o Redundant heating, ventilation and air condition systems
o Physically secure with escorted access at all times
o Fire Master 200 Fire Suppression System
o Redundant, built-in, clean, continuous power distribution units to servers
o Redundant power. UPS & diesel generator power back-up
o Telco Relay Racks.
o standard 19" rack mount
o cable guides on both sides of each rack
o circuit drops directly to their network cabinet.
***ASSUMPTIONS: CORIO PROVIDES "CORIO SPECIFIC": SERVERS, ROUTERS, SWITCHES, AND
TAPE BACKUP EQUIPMENT
***SUSTAINED ENGINEERING WORK TO BE BILLED AT $150.00 PER HOUR
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SERVER SETUP:
[*]
o Drop Shipment receipt of server
o Inventory of server
o Corio specific asset tagging of server
o Server assembly
o All installation and configuration of Corio specific software
o Installation of server within Corio data center
o Configuration of all server specific monitoring systems
o Management and storage of Corio equipment
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PRELIMINARY ENGINEERING DESIGN WORK:
[*]
o [*]
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START UP ENGINEERING SUPPORT:
[*]
o Implementation plan defining of all Corio specific procedures
o Please refer to implementation plan for all items covered
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INFRASTRUCTURE RACK: 1 RACK FOR EACH 16 X 16 SPACE
[*]
o Concentric will provide 1 open telco rack for Corio installed
infrastructure machines in a 16 X 16 foot space.
o Machines on this rack will be installed by Corio and maintained by Corio.
o If Corio elects to have Concentric install and manage servers, then the
per server price will apply
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the Commission. Confidential treatment has been requested with respect to
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MONTHLY RECURRING CHARGES: CO-LOCATION BANDWIDTH FOR INTERNET ACCESS NOT ACCESS
TO CONCENTRIC DAF LINES.
Monthly Recurring Charges
<TABLE>
<CAPTION>
Description
Bandwidth Options (includes first 8" rack space) [*]
----------------- ------------------------------ -----------
<S> <C> <C>
o 500 Kbps Dedicated Switched Ethernet [*]
o 1 Mbps Dedicated Switched Ethernet
o 2 Mbps Dedicated Switched Ethernet
o 4 Mbps Dedicated Switched Ethernet
o 10 Mbps Dedicated Ethernet
10 Mbps
11 Mbps
12 Mbps
13 Mbps
14 Mbps
15 Mbps
16 Mbps
17 Mbps
18 Mbps
19 Mbps
20 Mbps
30 Mbps
40 Mbps
50 Mbps
60 Mbps
70 Mbps
80 Mbps
90 Mbps
100 Mbps
</TABLE>
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DISCOUNTS & INCENTIVE OFFER TERMS
DISCOUNTS
Concentric will provide Corio with the following discount schedule for
dedicated hosting services.
<TABLE>
<CAPTION>
<S> <C>
[*] [*]
</TABLE>
[*]
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the Commission. Confidential treatment has been requested with respect to
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EXHIBIT B
STATEMENT OF WORK
CUSTOM CO-LOCATION AND NETWORK SERVICES
In accordance with the specifications & requirements provided in this Exhibit,
Concentric will be a networking and hosting partner for Customer. Concentric
will manage a Customer specific hosting environment and provide various forms
of data connectivity to the hosted environment. Concentric will manage Customer
servers, provide Customer specific reports on: server, bandwidth, tape
backup and assets. Concentric will also manage the complete data backup
procedures. The Concentric support center will provide helpdesk to helpdesk
incident identification, escalation and management of server and network events.
1) SECTION ONE: CO-LOCATION SERVICES
a) Corio provided components:
i) Hardware:
(1) If Corio procures and owns their own equipment it may
consist of a combination of Approximately 20 Sun E250,
E450, D1000 and Ultra servers for Infrastructure (WWW, mail,
ftp, etc.), Implementation (staging of new Corio customers
before production), and Production.
(2) Corio can supply tape backup equipment for a dedicated
backup application. Additionally, acquisition of backup
systems can be transferred to Concentric if required.
ii) Application level software (People soft, Oracle database server,
mail server and FTP server)
iii) Corio staff to be present at Concentric Network for the first 10
installs of production systems for Corio co-located services.
iv) Ownership, installation and management of the Operating Systems
and patches until otherwise requested. At some point, it may
become advantageous for Corio to transfer this responsibility to
Concentric Network.
v) Corio can provide management of all access lists on the router
gateway to and from the co-located service. This includes the
routers and switches associated with defining the data path of
all Corio customers. This means that Corio will construct all
changes to the access lists for each customer site and each
internal VLAN.
vi) Management software for a "Manager of Management Tools"
application. Concentric can provide monitoring feeds to Corio.
Corio will provide a software environment where those feeds are
assembled and reported.
b) Concentric provided components:
i) Space within the Concentric Network HQ for a Corio
representative to work while the initial set (10) of
installations takes place.
ii) Hardware and associated services.
(1) 16 X 16 Co-location cage
(2) Up to 19 open Telco racks and associated switches and
cables. At least one of the racks will be dedicated to
network equipment.
(3) Power, fire detection and suppression systems, environmental
controls, and 7 X 24 site security including online cameras,
breach alarms, automated police notification and limited
card key access to all secure zones.
(4) CNC may lease to Corio, A Router, switch and associated
cabling for incoming network connections both from
Concentric and alternate service providers.
(5) Firewall and encryption boxes plus configuration and
management of these services can be supplied by Concentric
if required by Corio.
(6) Concentric can procure and lease to Corio the Hardware for
the production co-located services if required.
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(7) Tape backup service components to include:
(a) Can include the procurement of equipment to perform
backup where Concentric Network will bill Corio back for
the dedicated hardware.
(b) Physical tape swapping once a week
(c) Off site storage of tapes
(d) Tape rotation
(e) Coding of tapes for retrieval of backup
(f) Administration of the backup servers
(g) Tape backup equipment
(h) Retrieval and loading of tapes for restoration.
(i) Legato Tape data identification library.
iii) Software
(1) Legato Software and management thereof for tape backup
systems
(2) Micromuse software for the retrieval of data to facilitate
monitoring of the co-located server environment as well as
Corio end users CPE. The service provided by the use of this
software allows for Concentric to send a simple "ping" to a
port of a Co-located machine or to an end customer site and
report the status of that machine to a log where it can then
be fed to an agreed upon monitoring tool. This will allow
Concentric Network to determine the status of the machines
and escalate to Corio if there is a non-response. This will
also allow Corio a "view" into the status of all the above
mentioned devices.
iv) Server Staging and Installation:
(1) Installation of all hardware for Corio co-located
environment whether procured by Concentric Network or Corio.
(2) Auto install of base software/operating systems from a Corio
provided master can be provided by Concentric. As a
benchmark for an installation process the first 10 machines
(approximately) will be staged and installed by a
collaborative effort between Concentric Network and Corio.
If an auto installation can be mutually agreed upon
Concentric will provide auto loading of master systems onto
the Corio production servers.
(3) Asset Management system to distinguish between and manage
Concentric and Corio hardware components. Components to
include:
(a) Tagging
(b) Tracking
(c) Update reports provided either via email or an updated
web site.
2) SECTION TWO: NETWORK SERVICE
a) Concentric Provided Components:
i) Network design specification and diagram of proposed LAN, WAN,
and VPN components to be provided by Concentric. Corio and
Concentric Network to jointly develop the final versions of the
network design specification and diagram once the overall
concepts are agreed upon.
ii) Cross Connections of Corio customer dedicated access from
alternate network service providers into the Corio custom
co-location server environment. Components of this service
include;
(1) Acceptance of the alternate provider demarcation in the
Concentric Network Telco room and patching of that line into
the Corio designated server port.
(2) Monitoring of the cross connected patch panels and cables.
iii) Concentric network Dedicated Access Facilities service to Corio
customers for access to the Corio co-located server environment.
iv) Installation and management of the Corio custom router
environment excluding the management of the actual access lists.
v) Security Services:
(1) Firewall configuration, installation, monitoring and
management to be provided if required.
(2) VPNet Encryption configuration, installation, monitoring and
management for both the co-location environment and for
customer sites (CNC DAF and alternate provider sites) if
required.
vi) Network Monitoring of all co-located devices.
vii) Monitoring of all customer premise sites.
viii) Proactive notification of outages.
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3) SECTION THREE: SUPPORT SERVICE
Parties will mutually agree upon Corio specific support and escalation
procedures to address all of the following components:
a) Data Center Support provided by Concentric:
i) Managed server support for Corio co-located servers to include:
(1) Tape backup management
(2) Full backups in time frames to be provided by Corio.
(3) Server installation and upkeep
(4) Router and switch installation and upkeep
(5) Cross-connection of alternate providers into the co-located
server environment
(6) Power cycle of downed machines
(7) Loading of base applications if required.
ii) Varying levels of escalation of detected outages of Corio servers
(all escalation notification to be provided to Corio. Corio to
then escalate to their customers if needed). Notification to
include:
(1) Infrastructure outages
(2) Implementation server outages
(3) Corio customer production server outages (of the highest
priority)
(4) Customer premise outages
iii) Direct intervention in error correction of Corio server outages
up to the basic OS level
iv) Reporting on bandwidth usage, backup usage and status, outages
and errors. Reports to include:
(1) MRTG online report tool for bandwidth usage out of the
co-location facility
(2) Micromuse reports and logs
(3) A Read Only view into Open View of the Corio servers and
customers.
b) Network Operations Center support services
i) Concentric Network to provide direct access (read only) to
systems monitoring tools for their co-location and end customer
sites.
ii) Concentric Network to provide, in accordance to mutually agreed
upon support procedures, monitoring down to the customer premise
router for Corio customers cross connected to the co-location
servers via Alternate Provider access, and reporting to Corio
when Concentric is unable to "ping" remote devices.
iii) Concentric Network to provide monitoring down to the customer
premise router for all Concentric Provided DAF lines to Corio
customers.
iv) Concentric to provide a dedicated contact for access into the
trouble tracking system for the Corio systems and their customer
connections.
c) Operations Desk support service
i) Concentric to provide help desk to help desk escalation of
problems to the first tier Corio support staff for escalation to
Corio customers and vice versa. Ops desk would be the mouth-piece
and trouble ticket contact for both co-location and DAF/Alternate
provider escalation services.
ii) Maintenance policies to be defined to Corio and any possible
customer effecting maintenance service notifications to be
provided proactively to Corio.
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