<PAGE>   1
                                                                    EXHIBIT 10.4

*INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                      NATIONAL ISP MASTER SERVICE AGREEMENT

        This National ISP Master Service Agreement ("Agreement") is entered into
as of the 6th of December, 1999 (the "Effective Date") by and between N2H2,
Inc., a Washington corporation, having its principal place of business at 900
4th Avenue - Suite 3400, Seattle, WA, 98164 ("N2H2") and AT&T Global Network
Services, LLC, a Delaware limited liability company, with offices at 231 N.
Martingale Road, Schaumburg, Illinois 60173-2254 ("LICENSEE"), for the purpose
of providing the Licensee's end-user subscribers, and Licensee's customers who
provide Internet connectivity to end-users, with N2H2's Internet filtering
services.

                                   WITNESSETH

        WHEREAS, N2H2 provides Internet filtering and network caching services
to education, Internet service providers ("ISPs") and commercial organizations;
and

        WHEREAS, Licensee provides Internet access to end-user subscribers and
to customers, including but not limited to other ISPs, who provide Internet
connectivity to their end-users, as a function of the Internet service provided
by and managed by Licensee, and

        WHEREAS, Licensee and N2H2 (collectively, the "Parties" and each
individually, a "Party") desire to enter into this Agreement to govern their
respective rights and obligations regarding Licensee's purchase, use and resale
of, and N2H2's sale, delivery and service of, the System and Service, as each
are defined below.

        NOW THEREFORE, in recognition of the mutual promises contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
is acknowledged, the Parties hereby agree as follows:


        1. INTENT OF RELATIONSHIP BETWEEN PARTIES. It is the intent of the
Parties that they will work together to provide Internet filtering services to
Licensee's end-users and customers requesting such filtering service. Each Party
will use commercially reasonable efforts to meet its obligations under this
Agreement, and will strive to provide an optimal level of customer satisfaction
to the end-users. Furthermore, it is the intent of the Parties to pursue such
related opportunities within the Internet filtering market as may arise from
time to time, provided the Parties can mutually agree on such opportunities.
Notwithstanding the foregoing, the Parties are independent contractors only and
not joint venturers or partners.

        2. DESCRIPTION OF N2H2 INTERNET ACCESS FILTERING SERVICES. N2H2 will
provide, at a minimum, a turnkey service inclusive of hardware, software,
technical and customer support, system maintenance and software updates, that
filters and caches content received via the Internet onto a computer network or
workstation (collectively, as upgraded, modified, or otherwise improved from
time to time, the "Service"). The Service will be delivered through either
direct placement of an N2H2 network proxy server containing N2H2 proprietary
software


                                  Page 1 of 12
<PAGE>   2

and proprietary blocked database (collectively, the "System") onto the network
or computer of the end-user (the "End-User), or by placement of the System onto
the network or computer of Licensee or the network or Computer of a customer of
Licensee who resells Licensee's services to the End-User. The placement of a
System will be determined according to the requirements of Licensee's customer
or End-User for each specific application under this Agreement, and will be
documented along with other requirements, including but not limited to the
applicable charges, the term of provision of the Services, the installation
location and configuration of the System and the contact name, number, etc. at
the installation site of the System, in a project schedule ("Schedule") which,
when signed by both Parties, shall become effective and shall be deemed to be
attached to and incorporated into this Agreement.

        3. TERM. The initial term of this Agreement shall be for one (1) year
commencing on the Effective Date. If either Party does not terminate this
Agreement, as provided herein, this Agreement will automatically renew for a one
(1) year extension term on each anniversary of the Effective Date. During the
initial term or any extension term, either Party has the right to terminate the
Agreement, with or without cause, by giving at least thirty (30) days prior
written notice of its intent to terminate to the other Party. The expiration or
termination of this Agreement shall not affect the System and Services then
currently being delivered under any Schedule(s) to this Agreement, which shall
remain in place and continue until the then current term of such Schedule(s)
expires, or is terminated by Licensee pursuant to the terms and conditions of
this Agreement or the applicable Schedule. Any provisions of this Agreement
which by their nature extend beyond the termination or expiration of this
Agreement or the applicable Schedule shall remain in effect beyond such
termination until fulfilled and shall apply to the Parties' respective
successors and permitted assigns.

        4. ARTWORK. Licensee shall create the trailer and block page graphics
for N2H2's reasonable approval and installation on the System by N2H2 prior to
final System configuration and delivery.

        5. CONFIGURATION. Prior to shipping to, and placement and installation
of the System at the address specified in the applicable Schedule, N2H2 will
configure each System based on the information set forth in such applicable
Schedule and any additional information provided by Licensee over the Internet
via use of N2H2's "On-line Network Information Form". Upon delivery and
successful installation of the System by N2H2, N2H2 will provide, at no
additional cost, on-site training and education to Licensee's employees, and/or
customers or End-Users, regarding the configuration and use of the System. N2H2
shall pay for all shipping and handling charges associated with the delivery of
the System.

        6. HARDWARE/SOFTWARE. Licensee shall have the option to obtain the
hardware for the System from N2H2 or from a third party. If the System's server
hardware is provided by N2H2 ("Hardware"), it shall remain the sole and
exclusive property of N2H2. If the System's server hardware is provided by
Licensee, such Hardware shall remain the sole and exclusive property of
Licensee. The System's filtering and caching software ("Software") and all
documentation related thereto ("Documentation") shall remain the sole and
exclusive property of N2H2. N2H2 hereby agrees that it shall allow no
dissemination, sale or other transfer of Licensee's hardware, proprietary
software and/or content related to or used in connection with


                                  Page 2 of 12
<PAGE>   3

N2H2's provision of Services to Licensee, including, without limitation,
proprietary computer IP addresses as provided to N2H2 for server installation,
without the prior written approval of Licensee. Licensee, if necessary to
accommodate multiple "transparently installed" servers, will, at its option and
cost, provide load-balancing hardware/software, as may be required.

        7. PROPRIETARY CONTENT. N2H2 will, through the provision of its
filtering services, provide to Licensee the use of its proprietary database of
records for filtering and screening activities and other proprietary data
(together, "Proprietary Content"). The Proprietary Content shall remain the sole
and exclusive property of N2H2.

        8. LICENSE. So long as Licensee complies with the terms of this
Agreement, N2H2 grants to Licensee and to Licensee's customers and End-Users,
the * (except to an Affiliate of Licensee), limited, right (the "License") to
use the Hardware, Software, Documentation and Proprietary Content in conjunction
with the System, as follows:

               a. N2H2 grants to Licensee, and via a pass-through license, to
Licensee's customers and End-Users, the * right to use, execute, display,
distribute, perform, and copy (to the extent provided herein), the Software,
Documentation and Proprietary Content solely as configured for Licensee's
Authorized Users, as defined below, and as set forth in each applicable
Schedule.

               b. The Licensee shall provide N2H2 with a monthly report which
identifies the then current Licensee's customers and the number of End-User, but
such report will not discretely identify End-Users.

               c. Licensee agrees that Licensee and its Affiliates shall not
attempt to reverse assemble, reverse compile, reverse engineer or otherwise
derive a source code equivalent from the System's Hardware or Software, and not
attempt to extract or copy the Proprietary Content, provided hereunder by N2H2.

               d. N2H2 reserves the right to terminate this License upon written
notice, and to seek any other legal remedies, if Licensee violates any
provisions hereof.

        9. PAYMENT. Licensee's payments to N2H2 are calculated as specified in
the applicable Schedule. On the 15th of each month the Licensee will notify N2H2
of the total number of Licensee's End-Users and Licensee's customer's End-Users
(collectively, the "Authorized Users") of the filtering Services provided
hereunder. This number will be the basis for calculation of the upcoming month's
monthly service fee, per the applicable Schedule. Monthly payments are to be
made to N2H2 within thirty (30) days of receipt of a correct invoice from N2H2
for the applicable charges hereunder. The payment shall be calculated as * All
monthly service fees for System service, which service is described on attached
Exhibit B, will be paid annually within thirty (30) days of receipt of an
invoice therefor from N2H2. The initial invoice under a Schedule shall follow
successful installation of the applicable System, and thereafter the annual


                                  Page 3 of 12
<PAGE>   4

service fee shall be due as of the anniversary of the commencement date of the
applicable Schedule.

        10. FILTERED SUBSCRIBER COUNT REPORTING BY LICENSEE. On a monthly basis,
Licensee shall provide N2H2 with verifiable documentation of the monthly count,
as of the 15th of the month, of its Internet customers and End-User subscribers
utilizing the filtering Services provided hereunder. N2H2 reserves the right to
audit, at its own cost, Licensee's billing and subscriber records once per year,
for the purpose of verifying accurate billing submissions by Licensee. If, upon
audit, Licensee is found to have underpaid N2H2 for previous billing periods,
Licensee shall provide payment to correct any errors or omissions to those
monthly payments to N2H2, and, in the event such underpayment is for a
significant amount, Licensee shall reimburse the reasonable cost of the audit to
N2H2. Such payment will be made within thirty (30) days notice of such errors
from N2H2. If, upon audit, Licensee is found to have overpaid N2H2 for previous
billing periods, N2H2 will provide payment or credit to Licensee, within thirty
(30) days of such discovery, to correct any such overpayment.

        11. MAINTENANCE SERVICES. N2H2 will monitor, maintain and repair the
System at the server site and keep the System in good condition at N2H2's sole
cost and expense, in the manner set forth in Exhibit B. If the System is
installed on Licensee's premises, Licensee will maintain the premises
surrounding the System in a clean and suitable condition and will maintain the
immediate environment according to the applicable, reasonable environmental
specifications provided to Licensee by N2H2. To help troubleshoot any problems
that may occur, the make and model of any power conditioning/UPS unit that the
N2H2 server is using should be reported to N2H2 technical support. N2H2 will
install all N2H2 servers strictly in compliance with N2H2 Technical Installation
Specifications, as defined on the N2H2 Web site. Licensee will be solely
responsible for, and will reimburse N2H2 for, the costs of all repairs and
maintenance necessitated by any negligent or willful act or omission of
Licensee, its employees, or agents. Licensee shall not attempt to make any
updates or other modifications to the System's Hardware, Software, or
Proprietary Content without the written consent of N2H2.

        12. UPGRADES; UPDATES. At its sole expense and in a timely manner, N2H2
will provide Licensee with all software and hardware updates or upgrades and
fixes for the System which are generally provided by N2H2 to all similar N2H2
Licensees. Such updates and upgrades shall include all features and services
available, including, but not limited to, the warranties provided in Section 14
hereof. Licensee shall use the upgraded or updated System only in accordance
with this Agreement.

        13. HELP SERVICES. Upon successful installation of the System, N2H2
shall train the Licensee's, and/or the Licensee's customer's or End-User's,
network administrator(s) and/or other individuals identified by Licensee in the
proper use of the System at Licensee's premises or the location where the System
is installed, at no cost to Licensee. N2H2 will make available technical
consultants by telephone 24 hours per day, 7 days per week to assist Licensee
with questions concerning operation and troubleshooting of the System. N2H2 will
not be required to travel to Licensee's premises to provide services, except for
travel for maintenance services and training which shall be solely at N2H2's
cost, unless the Licensee agrees in advance to reimburse N2H2 for time and
travel costs.


                                  Page 4 of 12
<PAGE>   5

        14. LIMITED WARRANTY. N2H2 WARRANTS TO LICENSEE ONLY THAT (A) THE
SERVICES WILL BE PROVIDED IN A WORKMANLIKE MANNER, AND (B) DURING THE TERM OF
THIS AGREEMENT, THE SYSTEM WILL CONFORM TO ITS DOCUMENTATION AND SPECIFICATIONS
WHEN USED IN CONFORMANCE WITH SUCH DOCUMENTATION AND SPECIFICATIONS. N2H2
FURTHER WARRANTS THAT THE SYSTEM WILL BE FREE FROM DEFECTS IN MATERIALS AND
WORKMANSHIP UNDER NORMAL USE, AND THE SYSTEM AND SOFTWARE CONTAIN NO MALICIOUS
CODE, PROGRAM OR OTHER INTERNAL COMPONENT, COMPUTER VIRUS, COMPUTER WORM, OR
COMPUTER TROJAN HORSE OR TIME BOMB, WHICH COULD DAMAGE, DESTROY OR ALTER ANY
HARDWARE, SOFTWARE OR DATA. N2H2 ADDITIONALLY WARRANTS THAT THE SOFTWARE WILL
RECORD, STORE PROCESS AND PRESENT CALENDAR DATES FALLING ON OR AFTER JANUARY 1,
2000, IN THE SAME MANNER AND WITH THE SAME FUNCTIONALITY AS IT PERFORMED BEFORE
JANUARY 1, 2000. EXCEPT AS PROVIDED HEREIN, THE SYSTEM IS LICENSED WITHOUT
WARRANTY, EITHER EXPRESSED OR IMPLIED, AS TO PERFORMANCE, MERCHANTABILITY, OR
FITNESS FOR ANY PARTICULAR PURPOSE. LICENSEE ASSUMES THE ENTIRE RISK AS TO THE
RESULTS OF THE SYSTEM.

        15. LIMITED LIABILITY. TO THE MAXIMUM EXTENT PERMITTED BY LAW; IN NO
EVENT SHALL EITHER PARTY OR ANYONE INVOLVED IN THE CREATION, PRODUCTION,
DELIVERY OR LICENSING OF THE SYSTEM BE LIABLE TO THE OTHER PARTY, OR ANY THIRD
PARTY, FOR INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES; INCLUDING
WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION,
LOSS OF BUSINESS INFORMATION, OR OTHER PECUNIARY LOSS ARISING OUT OF THE USE OR
INABILITY TO USE THE SYSTEM.

        16. INDEMNIFICATION. N2H2 will indemnify and defend Licensee and its
directors, officers, employees and agents, at N2H2's expense, against any and
all losses, liabilities, judgments, awards and costs (including reasonable legal
fees and expenses) arising from or relating to (a) any breach or default of
N2H2's obligations herein; (b) any negligent act or omission or willful
misconduct by N2H2 or its employees, agents, invitees, licensees, users or
subscribers; (c) any claim by a third party of copyright, patent or other
intellectual property infringement by the System or the Services provided
hereunder; (d) any claim by any third party relating to the blocking of any
content or materials through use of the System and/or Services; and (e) any
claim by any customer of Licensee, or any End-User relating to the content or
materials which are not filtered by the Services.

        17. COPYRIGHT. Licensee acknowledges that N2H2 asserts that the Software
and Proprietary Content and any copies thereof are owned by N2H2 and are
protected by United States copyright laws and international treaty provisions.
Therefore, Licensee agrees to treat the Software and Proprietary Content like
any other copyrighted material. Licensee agrees not to rent, lease, lend or sell
the Software except to the extent allowed hereunder to sublicense or resell the
right to use which is implicit in the delivery of the N2H2 Services to End-Users
and


                                  Page 5 of 12
<PAGE>   6

customers of Licensee. If Licensee attempts to reverse engineer, decompose,
disassemble or make any attempt to discover the Proprietary Content, Software or
source code to the Software and/or the details of the Proprietary Content, N2H2
shall have the right to immediately terminate this Agreement.

        18. ASSIGNMENT. Neither Party may assign or transfer, in whole or in
part, this Agreement or any of its rights or obligations under this Agreement
without the prior written consent of the other Party, which shall not
unreasonably be withheld, provided, however, Licensee may assign this Agreement
to an entity that directly controls, is controlled by or is under common control
with Licensee (an "Affiliate") without the prior written consents of N2H2. The
obligations of the Parties shall be binding on and inure to the benefit of their
respective successors and permitted assigns. Any transfer or assignment in
violation of this paragraph shall be void and will have no force or effect.

        19. FORCE MAJEURE. The Parties will not be in default and liable for
breach of this Agreement in the event their business is interrupted because of
strikes, labor disturbances, lockout, riot, fire, flood, outside electrical
failure, outside telecommunications facilities failure, act of God, or the
public enemy, or any other cause, whether like or unlike the foregoing, if
beyond their reasonable control and which may prevent or delay them from
performing their obligations herein.

        20. MARKS; USAGE AND PROMOTION. Neither Party shall, without the prior
express written consent of the other Party, use the other Party's name, logos,
service marks, trademarks or trade names, or those of any subsidiary or
Affiliate of the other Party, or reveal the existence of this Agreement, in any
advertisement, publicity release, Internet page, or marketing materials. Both
Parties will take such action as is necessary to protect, and shall not
misrepresent, the other Party's copyrights, trade names, trademarks, service
marks, goodwill, trade secrets, proprietary information, products and/or
services. Each Party may attach to or modify the other Party's marketing
materials to the extent necessary to provide information about the appropriate
contacts within its own organization, but may not otherwise modify the other
Party's materials, or distribute its own version of the other Party's marketing
materials, without the written approval of the other Party. Each Party shall
submit to the other Party for approval any and all changes made to the other
Party's documentation, either printed or electronic, in advance of distribution.
Similarly, any and all printed or electronic documentation originated by one
Party which describes or represents the services and technologies of the other
Party must be approved by the other Party prior to distribution. Requests for
approval shall be made allowing reasonable time for review by the other Party,
and approvals shall not be unreasonably withheld.

        Any and all public relations activities undertaken by one Party which
include reference to the other Party's products, services or technologies, or
containing quotes by the other Party's executives or representatives, including
but not limited to the issuance of press releases, shall first be submitted for
review and approval by the other Party. Requests for approval shall be made
allowing reasonable time for review by the other Party, and approvals shall not
be unreasonably withheld. N2H2 agrees to provide samples of acceptable language
for use in Licensee's public relations materials.


                                  Page 6 of 12
<PAGE>   7

        21. REMEDIES. In the event either Party under this Agreement fails to
cure a breach or default within thirty (30) days after written notice from the
other Party, in addition to its right to terminate the applicable Schedule(s)
set forth in Section 22 below, such other Party shall have the right to pursue
any other remedies available at law or in equity to enforce or interpret the
terms of this Agreement. An action for any breach of this Agreement must be
commenced within two (2) years from the date when a Party learned of the alleged
breach.

        22. BREACH; TERMINATION. Except as set forth in paragraph 17, in the
event that any breach or default of this Agreement by either Party remains
uncured for more than thirty (30) days after written notice from the other
Party, the non-breaching Party may terminate the applicable Schedule(s) under
this Agreement by giving the breaching Party written notice of termination. Upon
termination of a Schedule by either Party, N2H2 will have the right to
disconnect Licensee from the applicable System(s), following the notice and cure
period, and, upon N2H2's request, Licensee will promptly return the System(s) to
N2H2 in "AS IS" condition. N2H2 shall pay for all shipping and handling charges
associated with the return of the System(s).

        23. NOTICES. Any notice required by this Agreement or given in
connection with it, will be in writing and will be given to the appropriate
Party by personal delivery or by certified mail, or recognized overnight
delivery services. Facsimile notice or email may be used only if a means of
obtaining an immediate written confirmation of receipt is available and such
proof is presented in the event of a dispute. All notices will be effective upon
receipt, and will be made to the following addresses for each Party (or as such
address may be modified by notice to the other Party):

        For Licensee:        AT&T Global Network Services
                             231 N. Martingale Road, M/S 2A
                             Schaumburg, Illinois 60173-2254
                             Attn: Internet Service Manager

        with a copy to:      AT&T Global Network Services
                             231 N. Martingale Road, M/S 10-A
                             Schaumburg, Illinois 60173-2254
                             Attn: Legal Department

        For N2H2:            N2H2, Inc.
                             900 4th Avenue, Suite 3400
                             Seattle, Washington 98164
                             Attn: Vice President and General Manager

        24. SEVERABILITY. The invalidity or unenforceability of any provision
hereof will in no way affect the validity or enforceability of any other
provision.

        25. GOVERNING LAW. The Parties agree that this Agreement will be
governed by the internal laws of the State of New York, without regard to
conflict of law principles.


                                  Page 7 of 12
<PAGE>   8

        26. CONFIDENTIALITY. Any disclosure of confidential or proprietary
information between the Parties during the term of this Agreement, with the
exception of the Hardware, Software, Documentation, Proprietary Content and
Licensee's IP addresses, shall be made under and pursuant to the terms and
conditions of a mutually agreeable confidentiality agreement between the Parties
(the "Confidentiality Agreement"), Information exchanged between the Parties
during the normal course of business under this Agreement shall not be
considered proprietary or confidential unless so identified and disclosed under
such Confidentiality Agreement.

        27. ENTIRETY. This Agreement constitutes the complete agreement between
N2H2 and Licensee, and may not be modified except by written agreement of both
Parties.

        28. TAXES. N2H2 will invoice Licensee for any sales, use or other
legally collectable taxes on the Services provided hereunder, except where
Licensee provides N2H2 with a resale or other exemption certificate; provided,
however, that Licensee shall not be responsible to pay any taxes: (i) imposed on
N2H2's net or gross income, capital or franchise taxes, (ii) in the nature of
employee withholding taxes, FICA, Medicare taxes, unemployment insurance or
other taxes relating to N2H2's personnel performing Services hereunder, (iii)
imposed on, with respect to, or in connection with N2H2's purchase of any
supplies, materials, equipment, software, or services for use in providing the
Services, (iv) based on or in respect of any property or equipment used in
providing the Services, including but not limited to property taxes on the
System, or (v) in the nature of government licenses or permits required to
provide the Services.

        29. BRANDING. The customized "Block" and "Review URL" pages that shall
be used in conjunction with the Services provided hereunder shall include an
N2H2-approved reference to N2H2, such as "Powered by N2H2". The reference shall
be hyperlinked to N2H2's web site.


ACCEPTED AND AGREED FOR N2H2, INC. (N2H2):  ACCEPTED AND AGREED FOR AT&T GLOBAL
                                            NETWORK SERVICES, LLC (LICENSEE):


Signature:                                  Signature:
          -----------------------------               --------------------------
               [David W. Arnold]                           [G. F. Dravitz]
Printed:                                    Printed:
        -------------------------------             ----------------------------
               [David W. Arnold]                           [G. F. Dravitz]
Title:                                      Title:
      ---------------------------------           ------------------------------
           [Vice President & COO]                      [Procurement Director]
Date:                                       Date:
     ----------------------------------          -------------------------------
                 [11/19/99]                               [12-6-99]


                                  Page 8 of 12
<PAGE>   9

                                    EXHIBIT A
                                  AT&T Pricing

N2H2 agrees to provide Internet Filtering Service to Licensee for the following
charges.


              Proxy Server Set-up & Installation "One time Charge"
              ----------------------------------------------------

1 N2H2 Filtering Cluster*                           * per Cluster

1 Alteon Ace Director Switch                        * per customer

----------

*(10) Rack Mount P300 w/ 384 MB RAM*, Additional Servers required will be
provided by N2H2 at no cost as required. A Cluster may be used to serve one or
more Licensee customers, as technically possible.


                          Standard Monthly Service Fee
                                    Schedule
                          ----------------------------

SUBSCRIBERS                          MONTHLY SERVICE FEE (MSF)

All subscribers                      * per subscriber


                     Annual Maintenance Service Fee Schedule
                     ---------------------------------------

Yearly Alteon Service Agreement * (per Ace Director Switch per year, due on the
commencement date and each anniversary/renewal date of the term of the
applicable Schedule.)


                                  Page 9 of 12
<PAGE>   10

* INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


                                    EXHIBIT B
                      Maintenance Service Plan Description

N2H2 shall provide annual maintenance service to the System according to the
following terms and conditions:

N2H2 will provide Licensee with pass-through Alteon Support Services, which
include:

1. 24 x 7 Tech Support: telephone, fax and e-mail support 24 hours a day, seven
(7) days a week. Live support is offered from 6:00 A.M. to 7:00 P.M., Monday
through Friday, Pacific time, excluding holidays. Pager support is offered from
7:00 P.M. to 6:00 A.M., Monday through Friday, plus weekends and holidays.
Premium support subscribers have access to a special support phone number and a
special e-mail address. Leaving a message of any priority in these special
voicemail and e-mail boxes generates a page. Up to six (6) authorized users may
be registered with Alteon WebSystems' technical support under this program, two
(2) of which may be Licensee. The Alteon program will be upgraded to live 24 x 7
support before end of year 1999.

2. Alteon will ship replacement product directly to either N2H2 or to Licensee
upon determination of a hardware problem. Once the replacement unit reaches the
customer site, the defective unit is returned to Alteon.

3. Full technical support web access provides access to FAQs, on-line
documentation, and a channel into the Alteon and N2H2 call tracking databases.
Through secure user authentication, Licensee can query the on-line call tracking
database to view service calls and submit new service requests. Access is also
provided via login and password into the technical support FTP server. Plan
members are provided their own home directories for uploading/downloading
information, all while protecting their data from others.

4. Switch software subscription is provided for end-user access to all new
switch software releases, including new feature releases and releases to correct
software defects.

TERMS AND CONDITIONS

Term for paid support contracts: 12 months. Initial period starts after three
(3) month free support period.

End-users who purchase any end-user support program for NICs must buy it for all
Alteon WebSystems NICs they have purchased.

FTP is the primary distribution mechanism for software releases. Other media may
be made available upon request.

Any returned units MUST obtain prior authorization from Alteon Technical
Support. After obtaining authorization, an RMA form must be filled out and
accompany each returned unit.

Advance Replacement units are delivered to the customer site by next day if RMA
information is received at Alteon headquarters by 2:00 P.M., Pacific time.
Alteon must receive failed units within 15 calendar days after delivery of
replacement product, and reserves the right to bill for units not returned
within this time.

For return-to-factory repairs, Alteon will ship a repaired or replacement unit
within 15 calendar days of receipt of the failed unit.

Shipping charges: During 90-day free support period, Alteon pays shipping
charges both ways. For Advance Replacement, Alteon pays shipping charges both
ways. During warranty period, Alteon pays shipping charges for return of product
to Alteon. For return-to-factory repair, Alteon pays shipping charges for return
of product to Alteon. Other shipping charges are paid by Licensee.

Callback period for Premium contract: Support will respond to calls within 15
minutes during the program hours of operation.


                                 Page 10 of 12
<PAGE>   11

* INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.



                           PROJECT SCHEDULE NO. 99-01

NAME OF CUSTOMER OR END-USER (OR IDENTIFICATION OF LICENSEE'S APPLICATION):

        Families On Line


CONFIGURATION OF SYSTEM:

        1 N2H2 Filtering Cluster*
        1 Alteon Ace Director Switch

*(10) Rack Mount P300 w/384 MB RAM. Additional servers, if required, will be
provided by N2H2 at no additional cost.


APPLICABLE CHARGES:


                          INSTALLATION PAYMENT SCHEDULE

<TABLE>
<CAPTION>
DUE DATE                          SERVICE                              AMOUNT*           TOTAL*

<S>                               <C>                                  <C>               <C>
Upon Installation Completion      Mini Cluster Set-up

Upon Installation                 Alteon Ace Director

Upon Schedule Commencement        Alteon Service Agreement (1 Year)           *

                                  Initial Payment                                                 *
</TABLE>


                               MONTHLY SERVICE FEE

          * per subscriber per month (flat fee for all subscribers)


TERM OF SERVICES UNDER SCHEDULE:

        The Service Period shall be for three (3) years, commencing on the date
        Service is first implemented for Families On Line.


                                 Page 11 of 12
<PAGE>   12

* INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.




                LICENSEE'S (OR CUSTOMER'S) NETWORK REPRESENTATIVE
                                   INFORMATION

CONTACT NAME:                           MARK THURMAN
                                        --------------------------------------
EMAIL ADDRESS:                          MCTHURMA@BELLSOUTH.NET
                                        --------------------------------------
OFFICE PHONE NUMBER:                    954-771-8558
                                        --------------------------------------
FAX PHONE NUMBER:                       954-771-4241
                                        --------------------------------------
PAGER PHONE NUMBER:                     954-648-0351 (CELL PHONE)
                                        --------------------------------------


                                   LOCATION OF
                                    Server(s)

CONTACT NAME:                       BEAU CHAMBERS (PRIMARY) 650-556-1698
                                    ALT: MIKE SHEA (MGR) 858-812-4624
                                    -----------------------------------------
ORGANIZATION:                       AT&T
                                    -----------------------------------------
STREET ADDRESS #1:                  3175 SPRING STREET
                                    -----------------------------------------
STREET ADDRESS #2:
                                    -----------------------------------------
CITY/STATE/COUNTRY:                 REDWOOD CITY, CALIFORNIA, USA
                                    -----------------------------------------
ZIP/POSTAL CODE:                    94063-3928
                                    -----------------------------------------


                                  COMPLETED BY
                                  ------------

NAME:                         SAM PARRINO
                              --------------------------------------
TITLE:                        PROJECT MANAGER
                              --------------------------------------
DATE:                         12/2/99
                              --------------------------------------


ACCEPTED AND AGREED FOR N2H2, INC. (N2H2):  ACCEPTED AND AGREED FOR AT&T GLOBAL
                                            NETWORK SERVICES, LLC (LICENSEE):

Signature:                                  Signature:
          ------------------------------              --------------------------
               [David Arnold]                               [G. F. Dravitz]
Printed:                                    Printed:
        --------------------------------            ----------------------------
               [David Arnold]                               [G. F. Dravitz]
Title:                                      Title:
      ----------------------------------          ------------------------------
         [VP & Chief Operating Officer]                [Procurement Director]
Date:                                       Date:
     -----------------------------------         -------------------------------
                 [12/6/99]                                  [12-6-99]


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