Preferred Provider Agreement

Exhibit 10.22


PREFERRED PROVIDER AGREEMENT


This Preferred Provider Agreement (this "Agreement") is entered into as of March 4, 1999 ("Effective Date") by and between WAM!NET Inc., a Minnesota corporation having a place of business at 6100 West 110th Street, Minneapolis, MN 55438 ("WNI"), and Silicon Graphics, Inc. a Delaware corporation having a place of business at 2011 North Shoreline Blvd., Mountain View, CA 94043 ("SGI").


RECITALS


WHEREAS, WNI and SGI desire to establish a strategic relationship, pursuant to which SGI will invest in WNI pursuant to the terms of that certain Preferred Stock Purchase Agreement (together with all agreements, instruments and documents contemplated thereby and set forth as Exhibits thereto) of even date herewith, WNI will purchase products, support and services from SGI, and SGI will promote the services of WNI to SGI's customers;


WHEREAS, WNI desires to purchase certain products (whether or not originally manufactured by SGI), support and services of SGI, including, without limitation, computer hardware, storage, peripheral devices, network devices, integrated products, software, technical and maintenance support, and custom engineering and professional services (collectively, "SGI Products"); and


WHEREAS, WNI desires that SGI promote the sale of certain services of WNI, including, without limitation, WAM!NET, WAM!BASE and entertainment specific services ("WNI Services").


NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, SGI and WNI, for themselves, their successors and permitted assigns, hereby agree as follows:


ARTICLE I.
SGI PRODUCTS


1.1. General. WNI will, over a four (4) year period commencing January 1, 1999 and ending December 31, 2002 (the "Purchase Period"), purchase SGI Products as provided in Sections 1.2 through 1.5 below. The parties agree that with respect to purchases of SGI Products, and subject to the terms and conditions of this Agreement, WNI will treat SGI as the preferred provider of such goods and services and SGI will treat WNI as a preferred customer for such goods and services.


1.2. Firm Commitment. WNI shall have a firm and unconditional obligation to purchase from SGI not less than $35 million of SGI Products during the period commencing December 1, 1998 and ending December 31, 2000 (the "Firm Commitment"). If WNI fails to satisfy its purchase commitment during such period, as evidenced by its issuance to SGI of confirmed, irrevocable, noncancellable purchase orders for an aggregate amount at least equal to the Firm Commitment, then WNI shall pay to SGI a sum equal to 10% of the remaining outstanding balance of the Firm Commitment.


1.3. Computer Hardware and Software Product Pricing; Preferred Provider.


1.3.1. Standard Product Pricing. With respect to SGI's standard
hardware and software products, and the associated standard customer
support programs, listed in SGI's published Price Book


(the "Standard Products"), the pricing models SGI offers to WNI during the
Purchase Period will be based upon SGI's most favored pricing models (by
product) applicable to resellers (excluding US government, educational
institutions and associated agencies) with aggregate purchases at least
equal to the Firm Commitment.


1.3.2. Modified Product Pricing. With respect to Standard Products and
the associated customer support offerings that SGI agrees to modify or
build in accordance with WNI's stated requirements (the "Modified
Products"), the pricing that SGI offers to WNI during the Purchase Period
will be ** .


1.3.3. Limited Exclusive Provider. WNI agrees to purchase computer
hardware, software and support products of the type included within the
Standard Products and Modified Products, other than SGI Services (as
defined below), solely from SGI during the Purchase Period, subject to the
following terms and conditions: (a) the Standard and Modified Products then
being offered by SGI shall be suitable for WNI's requirements (a product is
suitable if it conforms to the specifications set by WNI for the specific
product); and (b) SGI's pricing to WNI for Standard and Modified Products
shall be at Competitive Prices (as defined below); provided however, that,
if SGI's pricing is not at Competitive Prices with regard to the applicable
Standard and Modified Products, SGI shall then have a period of seven (7)
business days in its sole discretion to reduce its pricing to Competitive
Prices and notify WNI of such price reduction.


1.3.3.1. Standard Products. For the purposes of this Section
1.3.3, "Competitive Prices" as it relates to Standard Products means
(i) with regard to servers, supercomputers, workstations and related
software, pricing over a six-month period that is not more than ** of
the price offered by a third-party vendor for products substantially
similar to the applicable Standard Products, and (ii) with regard to
storage, personal computers and related software, pricing over a
six-month period that is not more than ** of the price offered by a
third-party vendor for products substantially similar to the
applicable Standard Products.


1.3.3.2. Modified Products. For the purposes of this Section
1.3.3, "Competitive Prices" as it relates to Modified Products means
pricing and other material terms and conditions that are **.


1.4. SGI Services. With respect to technical consulting, application development, hardware design, product development, custom manufacturing, integration, custom product support and related professional and custom engineering services as they pertain to Standard and/or Modified Products offered by SGI (the "SGI Services"), WNI agrees that it will treat SGI as a preferred provider and shall provide SGI with the opportunity to bid on any WNI requirements or specifications for services similar to the SGI Services. **


1.5. Terms and Conditions. The terms and conditions governing the purchase of the SGI Products by WNI will be set forth in the following agreements, as the same may be amended, modified and supplemented from time to time: (a) the Master Purchase Agreement , a general form of which is attached hereto as Exhibit A and the specific terms of which shall be negotiated in good faith by the parties; (b) with respect to Standard Products installed at WNI's facilities only, a Customer Support Agreement, a general form of which is attached hereto as Exhibit B and the specific terms of which shall be negotiated in good faith by the parties; (c) a Master Services Agreement, the general terms of which


- -------- ** Confidential information omitted and filed separately with the Securities
and Exchange Commission.


are described in Exhibit C and the specific terms of which shall be negotiated in good faith by the parties; and (d) with respect to Modified Products, hardware and software products developed in connection with the Services and which are installed at WNI's customers' facilities, a Field Support ...