AT HOME CORPORATION
000 XXXXXXXX XXXXXX
XXXXXXX XXXX, XX 00000
March 28, 2000
AT&T Corp.
Comcast Corporation
Cox Communications, Inc.
Ladies and Gentlemen:
Reference is hereby made to the term sheets attached hereto as
Annexes A, B and C (the "Term Sheets" ) regarding certain agreements among At
Home Corporation ("Excite@Home"), AT&T Corp. ("AT&T"), Comcast Corporation
("Comcast"), Cox Communications, Inc. ("Cox") and certain of their respective
subsidiaries (collectively, the "Parties").
1. The Term Sheets set forth the agreements of the Parties in
respect of the transactions contemplated hereby and thereby. The Parties intend
that the covenants and agreements set forth in the Term Sheets will be
superseded by definitive agreements and instruments or definitive waivers or
amendments of existing instruments, which will contain provisions incorporating
and expanding upon the agreements set forth in the Term Sheets, together with
provisions customary in the case of transactions of the type described herein
and therein, and such other provisions as are reasonable and appropriate in the
context of the transactions contemplated hereby and thereby. The foregoing
notwithstanding, the Parties expressly acknowledge and agree that this Letter
Agreement (including the Term Sheets) constitutes a binding agreement among
them, subject to the terms and conditions set forth in this Letter Agreement and
the Term Sheets, until definitive documentation is executed and delivered
(except that the effectiveness and enforceability of the provisions of the Term
Sheets is subject to certain conditions set forth in paragraph 3 below). If
definitive documentation is not executed and delivered with respect to any
matter contained in the Term Sheets within 90 days from the date of this Letter
Agreement, then this Letter Agreement and the relevant provisions of the Term
Sheets shall be deemed to be such definitive documentation with respect to such
matter, commencing on the date hereof (subject to paragraph 3 below). Each party
hereto agrees to act in good faith and to use all reasonable efforts to
consummate the transactions contemplated by this Letter Agreement and the Term
Sheets, and to complete the related definitive agreements, waivers or
amendments; PROVIDED that the foregoing will not require Cox or Comcast to incur
any cost or detriment in connection with satisfaction of the condition set forth
in paragraph 3(c) below.
2. (a) As promptly as practicable after the date hereof,
Excite@Home shall take all such action as may be necessary, including seeking
all requisite stockholder approvals under applicable law and the Restated
Certificate of Incorporation of Excite@Home (the "Charter"), to
cause the Charter to be amended (collectively, the "Charter Amendment") as
provided in Section 3(a) of Annex B.
(b) Each Party hereto agrees to take all steps necessary to
implement the Charter Amendment and any other action provided for in the Term
Sheets that under applicable law or the Charter requires action of or approval
by the stockholders of Excite@Home (each, an "Approval Item"), including,
without limitation, voting at any meeting of stockholders all shares of Voting
Stock (as defined in the Amended and Restated Stockholders' Agreement, dated as
of July 16, 1997, as amended by the letter agreements dated October 2, 1997 and
October 10, 1997 (the "Stockholders Agreement"), among Excite@Home and the
stockholder signatories thereto) held by it or any member of its Stockholder
Group (as defined in the Stockholders Agreement) in favor of such Charter
Amendment (and any other Approval Item) and/or executing or causing to be
executed, as promptly as practicable, a consent in writing to the Charter
Amendment (and any other Approval Item).
3. The effectiveness of all the provisions of the Term Sheets (and
any definitive documentation related thereto) shall be subject to (a)
effectiveness of the Charter Amendment, (b) receipt of any required approval of
the Nasdaq Stock Market, Inc. or an alternative national securities exchange,
including with respect to the extra voting power attached to shares of Series B
Common Stock to be issued pursuant to Annex B (including pursuant to the
warrants contemplated by Annex B), and (c) receipt of any other consents,
approvals and waivers as may be necessary to consummate the transactions
contemplated by the Term Sheets in a manner that results in the economic effects
contemplated thereby.
4. If the Effective Date shall not have occurred on or prior to
September 30, 2000, then any Party hereto (other than any Party whose failure to
comply with its obligations hereunder shall have caused such failure to occur)
may terminate this Letter Agreement by sending written notice to each of the
other Parties (a "Termination"). Following any such Termination, this Letter
Agreement (including the Term Sheets) shall be null and void and of no further
force or effect.
5. Each Party hereto severally represents to each of the other
parties hereto that this Letter Agreement (including the Term Sheets) has been
duly authorized, executed and delivered by such Party and constitutes the legal,
valid and binding obligation of such Party and, to the extent applicable, the
members of such Party's Stockholder Group, enforceable against such Party and
the applicable members of its Stockholder Group, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting the rights of creditors generally and by general principles of
equity.
6. Each of AT&T, Comcast and Cox acknowledges and agrees that its
execution of this Letter Agreement shall constitute the consent of their
respective Stockholder Affiliates listed in Schedule I hereto to the
transactions contemplated by this Letter Agreement and the Term Sheets and each
of them agrees to use all reasonable efforts to cause their respective
subsidiaries and affiliates, including the Stockholder Affiliates, to comply
with the provisions, terms and obligations applicable to them as set forth in
this Letter Agreement and the Term Sheets. Each Party also agrees to waive, and
cause its applicable subsidiaries and affiliates to waive, any most favored
nations provisions to which they might otherwise be entitled with respect to
such
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arrangements as may be entered into by Excite@Home in connection with
satisfaction of the conditions to the effectiveness of the Term Sheets.
This Letter Agreement (including the Term Sheets) shall be governed
by, and construed in accordance with, the laws of the State of Delaware, without
regard to the conflicts of law rules of such state. The Parties hereto agree
that irreparable damage would occur in the event any provision of the Letter
Agreement or the Term Sheet was not performed in accordance with the terms
hereof or thereof, and that the Parties shall be entitled to specific
performance (subject to the moving party sustaining the applicable burden
necessary to obtain such relief including as to the inadequacy of money damages)
of the terms hereof and thereof in addition to any other remedy at law or in
equity.
This Letter Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which shall constitute one and the same
instrument. This Letter Agreement shall not be effective as to any Party until
executed and delivered by all of the Parties.
[Remainder of Page Intentionally Left Blank]
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If the foregoing is in accordance with your understanding please
indicate your agreement by signing below, at which time this letter will
constitute a binding Letter Agreement among us.
Very truly yours,
AT HOME CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
Accepted and Agreed as of the date first above written:
AT&T CORP.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President,
Corporate Strategy and
Business Development
COMCAST CORPORATION
By: /s/ Xxxxxx X. Pick
----------------------------------
Name: Xxxxxx X. Pick
Title: Vice President, Corporate
Development
XXX COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
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SCHEDULE I
STOCKHOLDER AFFILIATES
AT&T
----
AT&T Broadband, LLC
TCI Internet Services, Inc.
TCI Communications, Inc.
TCI Cable Investments Inc.
XXX.XXX, Inc.
Comcast
-------
Comcast Cable Communications, Inc.
Comcast Online Communications, Inc.
Cox
---
Xxx Enterprises, Inc.
ANNEX A
TERM SHEET AMONG AT&T, COMCAST, COX AND XXXXXX@XXXX
(Certain capitalized terms used herein and not otherwise defined have the
meanings ascribed to them in the Letter Agreement, dated March 28, 2000, to
which this term sheet is attached).
1. PUT RIGHT
(a) AT&T grants to each of Cox and Comcast the right to put to AT&T or a
subsidiary designated by AT&T (the "Put"), exercisable at any time or from time
to time from January 1, 2001 through June 4, 2002, up to an aggregate number of
shares of Excite@Home Series A common stock ("Series A Shares") currently owned
by Cox or Comcast or their respective subsidiaries, as the case may be, equal to
the Maximum Number. For this purpose, the "Maximum Number" with respect to Cox
will be a number of Series A Shares having an aggregate purchase price under the
Put equal to $1,397,500,800 and the "Maximum Number" with respect to Comcast
will be a number of Series A Shares having an aggregate purchase price under the
Put equal to $1,500,152,640. In the event of any exercise of the Put by Cox or
Comcast, as the case may be, that would cause the aggregate number of Series A
Shares purchased to exceed the Maximum Number with respect to Cox or Comcast, as
the case may be, such exercise shall be deemed to apply only to a number of
Series A Shares that (together with all Series A Shares previously purchased
pursuant to exercises of the Put by Cox or Comcast, as the case may be) would
equal the Maximum Number and, upon the consummation of such Put exercise, the
Put shall be deemed fully satisfied with respect to Cox or Comcast, as the case
may be. If AT&T designates a subsidiary as provided in the first sentence of
this paragraph (a), AT&T will unconditionally guarantee the subsidiary's
obligations under the Put.
(b) The per share purchase price under the Put will be the greater of (1)
$48 and (2) the average per share trading price of the Series A Shares on the
Nasdaq National Market System (or the principal trading market or securities
exchange on which the Series A Shares are then traded) during the 30 consecutive
trading day period beginning 15 trading days immediately prior to and ending 15
trading days immediately following AT&T's receipt of the notice of exercise of
the Put. Each of Cox and Comcast shall have the right upon any exercise of the
Put, as specified in the notice of exercise, to require that AT&T (or its
designee) pay the purchase price therefor in cash or in shares of AT&T common
stock ("AT&T Shares") having an aggregate value equal to such purchase price,
based on the average per share trading price of the AT&T Shares on the New York
Stock Exchange (or the principal trading market or securities exchange on which
the AT&T Shares are then traded) during the 30 consecutive trading day period
beginning 15 trading days immediately prior to and ending 15 trading days
immediately following AT&T's receipt of the notice of exercise of the Put.
(c) If the Put is exercised for AT&T Shares, AT&T and Cox or Comcast, as
the case may be, will use their respective reasonable best efforts to assure
that the transactions pursuant to the Put qualify as a tax-free reorganization
under Section 368 of the Internal Revenue Code.
(d) Any exercise of the Put will be consummated as promptly as practicable
following AT&T's receipt of the notice of exercise and the determination of the
purchase price as set forth above, subject to receipt of any necessary approvals
and the absence of any legal prohibition for such consummation. The purchase and
sale shall also be subject to receipt of certificates con-
taining representations and warranties substantially the same as those set forth
in Section 11.9(a) and (b) of the Stockholders Agreement and to any rights of
first offer or preemptive rights that may be applicable to the sale of Series A
Shares by Cox or Comcast, as the case may be.
(e) The provisions of this Section 1 will be subject to appropriate
adjustments to reflect stock splits, stock dividends and other extraordinary
transactions.
(f) In the event that Excite@Home separates its portal/content businesses
from its platform/connectivity businesses, through a tracking stock or
otherwise, AT&T, Excite@Home and Cox or Comcast, as the case may be, if
requested by Cox or Comcast, as the case may be, will work together to effect a
tax-free exchange, if feasible, of up to all of the Series A Shares currently
owned by Cox or Comcast, as the case may be, for shares reflecting the separated
portal/content businesses ("Portal Shares") on a basis that provides the same
economic result to each party as would have resulted from exercise of the Put
for the Maximum Number of Series A Shares then remaining subject to the Put with
respect to Cox or Comcast, as the case may be. For example, if Cox or Comcast
were then entitled to exercise the Put with respect to $1 billion of Series A
Shares, the foregoing exchange, if elected, would entitle Cox or Comcast, as the
case may be, to exchange a number of Series A Shares that would have a purchase
price under the Put of $1 billion in exchange for Portal Shares having a value
of $1 billion. In such event, AT&T will waive its rights with respect to a
number of Portal Shares that it would otherwise have had the right to receive in
an amount sufficient to compensate Excite@Home for the excess of the value of
the Portal Shares issued over the value of the Excite@Home shares acquired.
Alternatively, AT&T will waive its rights with respect to a number of Portal
Shares that it would otherwise have had the right to receive in an amount equal
to the number of Portal Shares issued to Cox or Comcast, as the case may be, and
Excite@Home will issue to AT&T a number of Series A Shares equal to the number
of Series A Shares exchanged by Cox or Comcast, as the case may be, for such
number of Portal Shares. In any event, such exchange will be deemed to satisfy
the Put in full with respect to Cox or Comcast, as the case may be.
2. STOCKHOLDERS' AGREEMENT
(a) Each of Cox and Comcast (including its applicable subsidiaries and
members of its Stockholder Group and Stockholder Affiliates) hereby waives all
its rights under the Stockholders Agreement, other than the provisions of
Article X thereof; PROVIDED that Xxx'x and Comcast's rights under Section 4.5 of
the Stockholders Agreement will survive until June 4, 2002. Without limiting the
foregoing, each of Cox and Comcast hereby waives its rights under the
Stockholders Agreement to representation on the Excite@Home board of directors
(the "Board") and will immediately cause the resignation or removal of its
current representative on the Board. When and as necessary to give effect to the
intention of the parties expressed in this paragraph, each of Cox and Comcast
(for itself and members of its Stockholder Group) agrees to vote (or execute
consents with respect to) all shares of Voting Stock (as defined in the
Stockholders Agreement) held by it or any member of its Stockholder Group in
such manner as may be necessary to give effect to such waivers.
(b) Each of AT&T (including its applicable subsidiaries) and Excite@Home
hereby waives all its rights under the Stockholders Agreement as against each of
Cox and Comcast (in-
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cluding its applicable subsidiaries and members of its Stockholder Group and
Stockholder Affiliates), other than the provisions of Article X thereof;
PROVIDED that, as set forth above, the provisions of Section 4.5 of the
Stockholders Agreement will survive until June 4, 2002.
(c) Each of the parties hereto acknowledges that the foregoing waivers
shall not constitute an amendment to the Stockholders Agreement, which shall
continue in full force and effect, subject to such waivers. The parties agree
that such waivers shall be irrevocable, except as otherwise expressly set forth
in the Letter Agreement to which this term sheet is an annex. In the event the
parties to the Stockholders Agreement determine to terminate the Stockholders
Agreement, the relevant provisions thereof that are not waived pursuant to this
Section 2 (or otherwise waived by agreement of the parties to the Stockholders
Agreement) will be incorporated into this term sheet or the definitive
documentation contemplated by the Letter Agreement.
3. PORTAL ARRANGEMENTS
In the event AT&T enters into negotiations with any third party prior to
June 4, 2002 with respect to a portal arrangement involving distribution over
AT&T's cable facilities, AT&T will notify the third party of Xxx'x and Comcast's
interest in exploring comparable arrangements for distribution over Xxx'x and
Comcast's cable facilities. In such event, AT&T will also use its commercially
reasonable efforts to facilitate concurrent discussions between such third party
and Cox and Comcast with respect to such comparable arrangements.
4. NONCOMPETE
Until June 4, 2006, but only for so long as Cox or Comcast, as the case
may be, continues to use Excite@Home as its provider of platform/connectivity
services used in its residential high-speed ISP services over cable in
substantially all its United States cable systems, AT&T will not provide
wireline (E.G., DSL or hybrid-fiber/coaxial) high-speed Internet access services
to residential customers in the territories served by the United States cable
systems of Cox or Comcast, as the case may be. For the avoidance of doubt, the
foregoing will not apply to any wireless high-speed Internet access services,
including fixed wireless, and will not apply to any Internet access services at
or below 128 Kbps.
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ANNEX B
TERM SHEET BETWEEN AT&T AND XXXXXX@XXXX
(Certain capitalized terms used herein and not otherwise defined have the
meanings ascribed to them in the Letter Agreement, dated March 28, 2000, to
which this term sheet is attached).
1. DISTRIBUTION ARRANGEMENTS
(a) Until June 4, 2002, the terms of the Master Distribution Agreement
Term Sheet and LCO Term Sheet, dated May 15, 1997 (collectively, the "MDA"),
will remain in place as between Excite@Home and the AT&T Controlled Affiliates.
(b) From June 4, 2002 through June 4, 2008, Excite@Home and AT&T agree
that the following arrangements will govern their relationships:
(i) AT&T (including its Controlled Affiliates) will use Excite@Home
as its provider of platform/connectivity services used in AT&T's high-speed
residential ISP services over cable in all its United States cable systems
that are covered by the MDA as of June 4, 2002 ("Existing Excite@Home
Systems"), subject to negotiation of commercially reasonable terms (including
service level standards) to be negotiated in good faith. For the avoidance of
doubt, the parties acknowledge that this will not prevent AT&T from providing
access to its cable systems to third-party residential ISP's or OSP's who may
use other platform/connectivity services that are not provided by Excite@Home
or AT&T. With respect to each territory covered by AT&T's cable systems in
which AT&T uses Excite@Home as AT&T's provider of platform/connectivity
services used in its high-speed residential ISP services over cable pursuant
to the terms of the New MDA (as defined below), Excite@Home will use its
platform/connectivity services for high-speed residential ISP services in
such territory only over such AT&T cable systems.
(ii) AT&T will make Excite@Home's content services a featured portal
for AT&T's high-speed residential ISP services over cable in Existing
Excite@Home Systems. For this purpose, "portal" refers to the entity or
service that manages and controls the content of the national area of the
home page. As the context requires, the term "portal" also refers to any
entity or service that manages, controls or guides the customer's access to
content and other services on the Internet. "Featured portal" means that the
Excite@Home portal will always be available for selection, and will be
displayed prominently, on AT&T's high-speed residential ISP start page,
unless and until the customer affirmatively selects otherwise. Without
limiting the foregoing, AT&T will offer Excite@Home's portal comparable
prominence and accessibility on the start page for AT&T's high-speed
residential ISP services over cable in Existing Excite@Home Systems as is
offered to any other portal, so long as the overall arrangement offered by
Excite@Home in exchange for such prominence and accessibility is at least as
favorable to AT&T in the aggregate, in AT&T's good faith judgment, as the
overall arrangement offered by such other portal, after taking into account
all relevant factors, including size, volume, equity participation (including
the equity arrangement offered hereby), duration, and other related
arrangements. The provisions set forth in this subparagraph (ii) will not
apply (A) to customers brought to AT&T's high-speed residential ISP through
another portal or content provider or as a result of joint mar-
keting between AT&T and another portal or content provider or (B) following a
change of control of Excite@Home or a change in ownership of Excite@Home's
portal.
(iii) In all of AT&T's United States owned and operated cable
systems other than Existing Excite@Home Systems (the "AT&T Other Systems"),
the provisions set forth in the foregoing subparagraphs (i) and (ii) shall
apply except to the extent that compliance with such provisions would violate
or result in significant adverse consequences to AT&T under any preexisting
contracts. In the event that AT&T does not cause such AT&T Other Systems to
comply with the provisions set forth in the foregoing subparagraphs (i) and
(ii) on or prior to December 31, 2002, AT&T will forfeit a number of Warrant
Shares (as defined below) covered by the Warrants (as defined below) granted
in respect of the homes passed by such AT&T Other Systems as follows:
(A) As of January 1, 2003, AT&T will forfeit a number of shares
covered by the Warrants equal to 1/6 of the number of Warrant Shares
granted in respect of homes passed by such AT&T Other Systems that are
not, on or prior to December 31, 2002, brought into compliance with the
foregoing subparagraphs (i) and (ii); and
(B) As of each succeeding January 1, through and including
January 1, 2008, AT&T will forfeit a number of shares covered by the
Warrants equal to 1/6 of the number of Warrant Shares granted in respect
of homes passed by such AT&T Other Systems that are not, on or prior to
the immediately preceding December 31, brought into compliance with the
foregoing subparagraphs (i) and (ii).
Warrants may not be exercised with respect to Warrant Shares that are subject
to forfeiture pursuant to this subparagraph (iii) until such time as they are
no longer subject to forfeiture.
(iv) AT&T will not impose blocking provisions against Excite@Home
(whether under the MDA or otherwise) that are more onerous than those that
AT&T imposes against other portals using AT&T's United States cable
facilities.
(v) Neither AT&T nor Excite@Home will affirmatively remarket any
alternative portal to residential customers in AT&T's territory who are
Excite@Home customers as of June 4, 2002 ("Existing Excite@Home Customers")
(I.E., they will not engage in or participate in marketing targeted to
Existing Excite@Home Customers that seeks to cause any such customer to
change the customer's portal). Excite@Home will not affirmatively remarket
any alternative high speed residential Internet access distribution method in
AT&T's territory to such Existing Excite@Home Customers (I.E., it will not
engage in or participate in marketing targeted to Existing Excite@Home
Customers that seeks to cause any such customer to access the Internet at
high speeds other than through AT&T's cable infrastructure). The marketing
restrictions set forth above, however, will not (A) preclude general mass
marketing that is not targeted at Existing Excite@Home Customers, (B) prevent
an Existing Excite@Home Customer from changing such customer's portal or high
speed Internet access method, (C) prohibit Excite@Home from advertising,
marketing or promoting its narrowband or broadband portal services, or its
free dial-up Internet access services at speeds below 128 Kbps, independent
of any distribution method or partner, (D) prohibit AT&T from advertising,
marketing or promoting its narrowband residential ISP
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services, with or without any content or portal partner, or (E) prevent
either party, subject to the other provisions of this term sheet, from
advertising, marketing or promoting its portal or residential ISP services to
customers other than Existing Excite@Home Customers.
(vi) If a new customer of AT&T's high-speed residential ISP chooses
Excite@Home's portal, Excite@Home will pay AT&T a marketing fee with respect
to such customer. The marketing fee may take the form of a cash payment,
revenue sharing, or other arrangement agreed to between Excite@Home and AT&T.
If Excite@Home induces a new customer to subscribe to Excite@Home's
portal/content services through AT&T's high-speed residential ISP, AT&T will
pay Excite@Home a marketing fee with respect to such customer. Such marketing
fees, and any joint marketing arrangements between AT&T and Excite@Home that
are designed to bring new customers to AT&T's high-speed residential ISP
services over cable, will be on a most favored nations basis with comparable
arrangements between AT&T and other comparable media providers and comparable
arrangements between Excite@Home and other comparable distributors.
Excite@Home will also pay fees to AT&T for the carriage of Excite@Home's
content, and traffic management fees (if any), on a most favored nations
basis with similar fees paid by other media providers to AT&T for comparable
services. The provisions set forth in this subparagraph (vi) will not apply
following a change of control of Excite@Home or following a change in
ownership of Excite@Home's portal.
(vii) AT&T (and the appropriate business groups within AT&T) and
Excite@Home will work together to extend Excite@Home's services, subject to
negotiation of commercially reasonable terms and conditions, to other AT&T
residential distribution facilities and services, including set-top boxes and
narrowband dial-up access, other than wireless. With respect to wireless,
AT&T will work with Excite@Home in good faith to facilitate the negotiation
of such arrangements with the AT&T Wireless Group. The provisions set forth
in this subparagraph (vii) will not apply following a change of control of
Excite@Home or, with respect to portal services, following a change in
ownership of Excite@Home's portal.
(c) As promptly as practicable, AT&T and Excite@Home will enter into a new
distribution agreement (the "New MDA"), to be effective as of June 4, 2002,
incorporating the terms of this term sheet and such other terms and conditions
as the parties may agree. The parties acknowledge that it may be desirable to
incorporate in the New MDA terms and conditions that are not included in the
current MDA, and the parties will develop an expedited process for negotiating
such potential changes. However, if the parties are not able to negotiate such
changes prior to June 4, 2002, the New MDA will take the form of the MDA except
as expressly modified by this term sheet.
(d) Except as otherwise agreed by the parties (in their sole discretion),
all arrangements between the parties will terminate as of June 4, 2008.
2. ISSUANCE OF ADDITIONAL EQUITY
(a) As of the execution of the Letter Agreement to which this term sheet
is attached, Excite@Home has granted to AT&T a warrant to purchase a number of
Series A Shares equal
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to two (2) multiplied by the total number of homes passed by AT&T's cable
systems, including cable systems under contract to be acquired by AT&T but
excluding homes passed by cable systems under contract to be divested by AT&T,
as of March 28, 2000 (the "Initial Warrant"). The Initial Warrant will provide
that, upon the occurrence of the Effective Date (as defined in the Letter
Agreement), the terms of the Initial Warrant shall automatically be amended such
that one-half of the shares subject to the Initial Warrant shall be shares of
Excite@Home Series B common stock ("Series B Shares") and one-half of the shares
subject to the Initial Warrant shall be Series A Shares.
(b) In the event AT&T (i) sells or otherwise disposes of any of its homes
passed between March 28, 2000 and June 4, 2002 without causing such transferred
homes to remain bound by the MDA (as modified by this term sheet and the other
term sheets attached to the Letter Agreement), or (ii) fails to complete the
acquisition of any systems under contract to be acquired as of March 28, 2000,
and such events result in a net decline in the number of homes passed by AT&T's
cable systems, then AT&T will be required to forfeit a proportionate amount of
the shares covered by the Initial Warrant.
(c) In the event the number of homes passed by AT&T's cable systems
increases on a net basis between March 28, 2000 and June 4, 2002 (it being
understood that homes passed by systems under contract to be acquired by AT&T as
of March 28, 2000 shall be deemed for this purpose to be homes passed by AT&T as
of March 28, 2000, but homes passed by systems under contract to be divested by
AT&T as of March 28, 2000 shall not be deemed for this purpose to be homes
passed by AT&T as of March 28, 2000), Excite@Home will issue to AT&T a second
warrant as of June 4, 2002 to purchase an equal number of Series A Shares and
Series B Shares totaling, in the aggregate, two (2) multiplied by the total
number of additional homes passed by AT&T's cable systems as of June 4, 2002
(the "Second Warrant"). The Initial Warrant, the Second Warrant and the
Additional Warrants (as defined below) are referred to collectively as the
"Warrants." The Series A Shares and Series B Shares covered by the Warrants are
referred to collectively as the "Warrant Shares."
(d) In the event that, as of any December 4 or June 4 (an "Adjustment
Date") following June 4, 2002 and prior to June 4, 2008, there has been a net
increase or decrease in the number of homes passed by AT&T's cable systems of
more than 5% compared to the number of homes passed by its systems as of June 4,
2002, without deducting any transferred homes that AT&T causes to remain bound
by the New MDA, then, in the case of a net decrease, AT&T will be required to
forfeit a number of shares covered by the Second Warrant and/or the Initial
Warrant or, in the case of a net increase, Excite@Home will issue an additional
warrant to AT&T (together with any further additional warrants granted pursuant
to this paragraph (d), the "Additional Warrants"), on the following terms. The
aggregate number of shares subject to forfeiture or subject to the Additional
Warrant (which shall in either event be comprised of an equal number of Series A
Shares and Series B Shares) will equal (i) two (2) multiplied by (ii) the
difference between the number of homes passed by AT&T's cable systems as of the
applicable Adjustment Date and the number of homes passed by AT&T's cable
systems as of June 4, 2002, multiplied by (iii) a fraction, the numerator of
which is the number of six-month periods remaining from the applicable
Adjustment Date until June 4, 2008 (the "Remaining Number of Six-Month Periods")
and the denominator of which is twelve (12). Following the first Adjustment
Date, if any, on which there is a forfeiture of Warrant Shares or a grant of an
Additional
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Warrant pursuant to the foregoing provisions, on each subsequent Adjustment Date
the 5% increase or decrease test set forth in the foregoing provisions shall
apply with reference to the last Adjustment Date on which there was a forfeiture
or a grant of an Additional Warrant, and further forfeitures or further grants
of Additional Warrants, if any, will be calculated pursuant to the foregoing
provisions, but based on the difference between the number of homes passed by
AT&T's cable systems as of the subsequent Adjustment Date and the number of
homes passed by AT&T's cable systems as of the immediately preceding Adjustment
Date on which there was a forfeiture or a grant of an Additional Warrant. In the
event of any forfeiture following the grant of any Additional Warrants, the
forfeiture will be applied first against the most recently granted Warrants,
next against the next most recently granted Warrants, ETC.
(e) The per share exercise price of the Initial Warrant and the Second
Warrant will be $29.5375, which is equal to the average daily closing price of
the Series A Shares during the ten (10) consecutive trading days ended on March
24, 2000. The per share exercise price of each Additional Warrant will be equal
to the average daily closing price of the Series A Shares during the ten (10)
consecutive trading days ended on the issue date of the Additional Warrant.
(f) The Initial Warrant and the Second Warrant will become 100% vested and
immediately exercisable on June 4, 2002, subject only to HSR compliance. Each
Additional Warrant will become vested, and immediately exercisable subject only
to HSR compliance, as to a fraction of the Warrant Shares covered thereby equal
to one divided by the Remaining Number of Six-Month Periods, on each June 4 and
December 4 after issuance of the Additional Warrant (with the result that all
Additional Warrants will be 100% vested as of June 4, 2008).
(g) The Warrants will expire on March 28, 2015.
(h) The Warrants will include registration rights comparable to those
currently applicable to the Series A Shares and Series B Shares now beneficially
owned by AT&T. The Warrants will also contain a net exercise provision to
facilitate sales under Rule 144. Warrant Shares that are Series B Shares must be
converted into Series A before they may be sold to any party other than an
affiliate of AT&T.
(i) Beginning on June 4, 2002, AT&T may sell up to 16.66% of its Warrant
Shares per year on a cumulative basis.
(j) The Warrants shall contain customary dilution protection, including,
without limitation, adjustments to the number and kind of shares issuable upon
exercise of the Warrants and the exercise price to reflect stock splits,
combinations, stock dividends, recapitalizations, and similar transactions.
(k) As soon as practicable after the Effective Date, Excite@Home shall
issue to AT&T a number of Series B Shares equal to the total number of Warrant
Shares (Series A Shares and Series B Shares) subject to the Initial Warrant, in
exchange for AT&T's transfer to Excite@Home of an equal number of Series A
Shares currently beneficially owned by AT&T.
(l) Within ten (10) business days following the date of the Letter
Agreement, AT&T will provide Excite@Home with a letter representing to
Excite@Home, to the best of AT&T's knowledge, the total number of homes passed
by AT&T's cable systems, including cable sys-
-5-
tems under contract to be acquired by AT&T but excluding homes passed by cable
systems under contract to be divested by AT&T, as of March 28, 2000. In
addition, prior to and as a condition to the issuance of the Second Warrant,
AT&T will represent to Excite@Home in writing, to the best of AT&T's knowledge,
the number of additional homes passed as of June 4, 2002 on a net basis by
AT&T's cable systems. Excite@Home shall have reasonable audit rights to verify
the number of homes passed by AT&T's cable systems as of each such date, and any
discrepancy between the represented number and the audited number (following
reasonable resolution of any dispute) will be reflected in an adjustment to the
Initial Warrant or the Second Warrant, as the case may be. AT&T will provide a
similar representation letter, and Excite@Home will have similar audit rights,
with respect to the number of homes passed by AT&T's cable systems as of each
Adjustment Date.
3. CHARTER AMENDMENTS AND NASDAQ APPROVAL
(a) At its next stockholders meeting, which is anticipated to occur in May
2000, Excite@Home will obtain approval of its stockholders (i) to increase the
number of authorized Series B Shares as required for the Initial Warrant and the
exchange of Series B Shares for Series A Shares as contemplated by this term
sheet, plus a reasonable additional number to be reserved for use in connection
with the Second Warrant and any Additional Warrants, and (ii) to amend
Excite@Home's Amended and Restated Certificate of Incorporation (A) to provide
that the holders of the Series B Shares will be entitled to elect a majority of
the board of directors while retaining the right of the holders of Series A
Shares to elect two Series A Directors, (B) to eliminate all supermajority and
unanimous board voting requirements, and (C) to make such other changes as the
parties may agree with a view to simplifying the certificate of incorporation to
as great an extent as possible in light of the governance changes reflected in
this term sheet and the related term sheets attached to the Letter Agreement.
For the avoidance of doubt, after giving effect to these amendments, the holders
of Series B Shares shall have the right to elect as a class such number of
directors which equals the smallest number that constitutes a majority of the
Board of Directors, the holders of Series A Shares shall be entitled to elect as
a class two directors, and any additional directors will be elected by the
holders of Series A Shares, Series B Shares and Series K Shares (if any), voting
together as a single class. AT&T will vote its Series B Shares in favor of the
election of the Chief Executive Officer of Excite@Home to the Board of Directors
as an additional director.
(b) In the event the number of Series B Shares authorized pursuant to the
foregoing paragraph (a) proves to be insufficient to cover the Second Warrant,
at its next stockholder meeting following June 4, 2002, Excite@Home will obtain
approval of its stockholders to increase the number of authorized Series B
Shares as required for the Second Warrant. In the event the number of Series B
Shares authorized pursuant to the foregoing paragraph (a) proves to be
insufficient to cover any Additional Warrant, at its next stockholder meeting
following the issuance of such Additional Warrant, Excite@Home will obtain
approval of its stockholders to increase the number of authorized Series B
Shares as required for such Additional Warrant.
(c) As promptly as practicable, Excite@Home also will obtain the approval
from Nasdaq (or an alternative national securities exchange reasonably agreed by
AT&T and Excite@Home) for the creation and issuance of additional Series B
Shares contemplated by this term sheet (given the 10 for 1 voting rights held by
such Series B Shares).
-6-
4. OTHER PROVISIONS
(a) Excite@Home will outsource specific platform and network management
services from AT&T, on commercially reasonable terms.
(b) Excite@Home will implement management incentive programs, subject to
the approval of its board of directors, designed to tie specified incentives to
management's performance in meeting specified service level standards and
operating standards.
ANNEX C
TERM SHEET FOR COMCAST, COX AND XXXXXX@XXXX
[APPLICABLE TO EACH OF COMCAST AND COX SEPARATELY]
(Certain capitalized terms used herein and not otherwise defined have the
meanings ascribed to them in the Letter Agreement, dated March 28, 2000, to
which this term sheet is attached.)
1. DISTRIBUTION ARRANGEMENTS
(a) The terms of the Master Distribution Agreement Term Sheet and LCO Term
Sheet dated May 15, 1997 (collectively, the "MDA") and all related LCO
agreements will remain in place as between Excite@Home and the COX/COMCAST
Controlled Affiliates until June 4, 2002, provided that COX/COMCAST may, at its
option, terminate the mutual exclusivity provisions of the MDA, or the entire
MDA and all related LCO agreements, as to the COX/COMCAST Controlled Affiliates
at any time on or after June 4, 2001 upon at least 6 months prior written
notice, which termination will take effect on the June 4 or December 4 next
occurring after the expiration of such 6 month notice period. The foregoing
shall not affect the right of any party to terminate the MDA or any related LCO
agreement, to the extent that any such agreement provides for termination in the
event of a breach. In the event of any termination of the entire MDA,
COX/COMCAST and Excite@Home will, if requested by COX/COMCAST, commence the
transfer of certain Excite@Home assets and services to COX/COMCAST as set forth
in the Exit Plan in the Transition and Service Level Plan (the "TSLP") attached
to this term sheet.
Notwithstanding the foregoing, COMCAST may terminate the exclusivity
provisions of the MDA at any time prior to June 4, 2002 if required to do so by
Microsoft Corporation pursuant to Section 5.02 of the Agreement between Comcast
and Microsoft dated June 8, 1997 (the "Microsoft Agreement"), in which event the
Series A Shares currently held by COMCAST will be subject to repurchase by
Excite@Home as provided in the MDA, and the Warrants (as defined below) will
cease to vest thereafter as provided herein. In the event of any other
termination of exclusivity or any termination of the entire MDA by COMCAST, the
Series A Shares currently held by COMCAST will not be subject to repurchase by
Excite@Home as provided in the MDA, but the Warrants to purchase additional
Series A Shares will cease to vest thereafter as provided herein.
(b) As promptly as practicable, COX/COMCAST and Excite@Home will enter
into a new distribution agreement (the "New MDA") to govern their relationship
from June 4, 2002 through June 4, 2006. The New MDA will become effective as of
June 4, 2002 and will incorporate the terms of this term sheet and such other
terms and conditions as the parties may agree. The parties acknowledge that it
may be desirable to incorporate in the New MDA terms and conditions that are not
included in the current MDA, and the parties will develop an expedited process
for negotiating such potential changes. However, if the parties are not able to
negotiate such changes prior to June 4, 2002, the New MDA will take the form of
the MDA except as expressly modified by this term sheet. COX/COMCAST may
terminate the New
MDA at any time on or after June 4, 2002 upon at least 6 months prior written
notice, which termination will take effect on the June 4 or December 4 next
occurring after the expiration of such 6 month notice period. In the event
COX/COMCAST terminates the New MDA, COX/COMCAST and Excite@Home will, if
requested by COX/COMCAST, commence the transfer of certain Excite@Home assets
and services to COX/COMCAST as set forth in the Exit Plan in the TSLP attached
to this term sheet.
(c) The New MDA will provide as follows:
(i) COX/COMCAST (including its Controlled Affiliates) will use
Excite@Home as COX/COMCAST's provider of platform/connectivity services used
in COX/COMCAST's high-speed residential ISP services over cable in all its
United States cable systems that are covered by the MDA as of June 4, 2002
("Existing Excite@Home Systems"), subject to negotiation of commercially
reasonable terms (including service level standards) to be negotiated in good
faith. For the avoidance of doubt, the parties acknowledge that this will not
prevent COX/COMCAST from providing access to its cable systems to third-party
residential ISP's or OSP's who may use other platform/connectivity services
that are not provided by Excite@Home, AT&T or COX/COMCAST. With respect to
each territory covered by COX/COMCAST's cable systems in which COX/COMCAST
uses Excite@Home as COX/COMCAST's provider of platform/ connectivity services
used in its high-speed residential ISP services over cable pursuant to the
terms of the New MDA, Excite@Home will use its platform/connectivity services
for high-speed residential ISP services in such territory only over such
COX/COMCAST cable systems.
(ii) COX/COMCAST will make Excite@Home's content services a featured
portal for COX/COMCAST's high-speed residential ISP services over cable in
Existing Excite@Home Systems. For this purpose, "portal" refers to the entity
or service that manages and controls the content of the national area of the
home page. As the context requires, the term "portal" also refers to any
entity or service that manages, controls or guides the customer's access to
content and other services on the Internet. "Featured portal" means that the
Excite@Home portal will always be available for selection, and will be
displayed prominently, on COX/COMCAST's high-speed residential ISP start
page, unless and until the customer affirmatively selects otherwise. Without
limiting the foregoing, COX/COMCAST will offer Excite@Home's portal
comparable prominence and accessibility on the start page for COX/COMCAST's
high-speed residential ISP services over cable in Existing Excite@Home
Systems as is offered to any other portal, so long as the overall arrangement
offered by Excite@Home in exchange for such prominence and accessibility is
at least as favorable to COX/COMCAST in the aggregate, in COX/COMCAST's
reasonable good faith judgment, as the overall arrangement offered by such
other portal, after taking into account all relevant factors, including size,
volume, equity participation (including the equity arrangement offered
hereby), duration, and other related arrangements. The provisions set forth
in this subparagraph (ii) will not apply (A) to customers brought to
COX/COMCAST's high-speed residential ISP through another portal or content
provider or as a result of joint marketing between COX/COMCAST and another
2
portal or content provider or (B) following a change of control of
Excite@Home or a change in ownership of Excite@Home's portal.
(iii) In all of COX/COMCAST's United States owned and operated cable
systems other than Existing Excite@Home Systems (the "COX/COMCAST Other
Systems"), the provisions set forth in the foregoing subparagraphs (i) and
(ii) shall apply except to the extent that compliance with such provisions
would violate or result in significant adverse consequences to COX/COMCAST
under any preexisting contracts. In the event that COX/COMCAST does not cause
such COX/COMCAST Other Systems to comply with the provisions set forth in the
foregoing subparagraphs (i) and (ii) on or prior to December 31, 2002,
COX/COMCAST will forfeit a number of Warrant Shares (as defined below)
covered by the Warrants granted in respect of the homes passed by such
COX/COMCAST Other Systems as follows:
(A) As of January 1, 2003, COX/COMCAST will forfeit a number
of shares covered by the Warrants equal to 1/2 of the number of Warrant
Shares granted in respect of homes passed by such COX/COMCAST Other
Systems that are not, on or prior to December 31, 2002, brought into
compliance with the foregoing subparagraphs (i) and (ii); and
(B) As of each succeeding January 1, through and including
January 1, 2006, COX/COMCAST will forfeit a number of shares covered by
the Warrants equal to 1/6 of the number of Warrant Shares granted in
respect of homes passed by such COX/COMCAST Other Systems that are not, on
or prior to the immediately preceding December 31, brought into compliance
with the foregoing subparagraphs (i) and (ii).
Warrants may not be exercised with respect to Warrant Shares that are subject
to forfeiture until such time as they are no longer subject to forfeiture.
(iv) COX/COMCAST will not impose blocking provisions against
Excite@Home (whether under the MDA or otherwise) that are more onerous than
those that COX/COMCAST imposes against other portals using COX/COMCAST's
United States cable facilities.
(v) Neither COX/COMCAST nor Excite@Home will affirmatively remarket
any alternative portal to residential customers in COX/COMCAST's territory
who are Excite@Home customers as of June 4, 2002 ("Existing Excite@Home
Customers") (I.E., they will not engage in or participate in marketing
targeted to Existing Excite@Home Customers that seeks to cause any such
customer to change the customer's portal). Excite@Home will not affirmatively
remarket any alternative high speed residential Internet access distribution
method in COX/COMCAST's territory to such Existing Excite@Home Customers
(I.E., it will not engage in or participate in marketing targeted to Existing
Excite@Home Customers that seeks to cause any such customer to access the
Internet at high speeds other than through COX/COMCAST's cable
infrastructure). The marketing restrictions set forth above, however, will
not (A) preclude general mass marketing that is not targeted at Existing
Excite@Home Customers, (B) prevent an Existing Excite@Home
3
Customer from changing such customer's portal or high speed Internet access
method, (C) prohibit Excite@Home from advertising, marketing or promoting its
narrowband or broadband portal services, or its free dial-up Internet access
services at speeds below 128 Kbps, independent of any distribution method or
partner, (D) prohibit COX/COMCAST from advertising, marketing or promoting
its narrowband residential ISP services, with or without any content or
portal partner, or (E) prevent either party, subject to the other provisions
of this term sheet, from advertising, marketing or promoting its portal or
residential ISP services to customers other than Existing Excite@Home
Customers.
(vi) If a new customer of COX/COMCAST's high-speed residential ISP
chooses Excite@Home's portal, Excite@Home will pay COX/COMCAST a marketing
fee with respect to such customer. The marketing fee may take the form of a
cash payment, revenue sharing, or other arrangement agreed to between
Excite@Home and COX/COMCAST. If Excite@Home induces a new customer to
subscribe to Excite@Home's portal/content services through COX/COMCAST's
high-speed residential ISP, COX/COMCAST will pay Excite@Home a marketing fee
with respect to such customer. Such marketing fees, and any joint marketing
arrangements between COX/COMCAST and Excite@Home that are designed to bring
new customers to COX/COMCAST's high speed residential ISP services over
cable, will be on a most favored nations basis with comparable arrangements
between COX/COMCAST and other media providers and comparable arrangements
between Excite@Home and other comparable distributors. Excite@Home will also
pay fees to COX/COMCAST for the carriage of Excite@Home's content, and
traffic management fees (if any), on a most favored nations basis with
similar fees paid by other media providers to COX/COMCAST for comparable
services. The provisions set forth in this subparagraph (vi) will not apply
following a change of control of Excite@Home or following a change in
ownership of Excite@Home's portal.
(d) COX/COMCAST and Excite@Home have agreed to a plan for the transfer of
certain portions of the Excite@Home assets and services to COX/COMCAST during
the term of the MDA or New MDA, as the case may be, as set forth in the
Implementation Plan in the TSLP attached to this term sheet.
(e) Regardless of whether the MDA or the New MDA, as the case may be,
remains in effect with respect to COX/COMCAST, COX/COMCAST shall have the right
until June 4, 2006 to negotiate commercial arrangements with Excite@Home for the
provision of services currently or in the future offered by Excite@Home, on
terms reasonably comparable to those offered to other parties. The most favored
nations provisions contained in the MDA with respect to such services will be
extended to apply to COX/COMCAST until June 4, 2006 so long as at least 50% of
COX/COMCASTS's broadband residential Internet service subscribers use the
Excite@Home platform/connectivity services, whether or not the MDA or the new
MDA is then in effect.
4
(f) Except as otherwise agreed by the parties (in their sole discretion),
all arrangements between the parties will terminate as of June 4, 2006.
2. ISSUANCE OF ADDITIONAL EQUITY
(a) As of the execution of the Letter Agreement to which this term sheet
is attached, Excite@Home has granted to COX/COMCAST a warrant to purchase a
number of Series A Shares equal to two (2) multiplied by the total number of
homes passed by COX/COMCAST's cable systems, including cable systems under
contract to be acquired by COX/COMCAST but excluding homes passed by cable
systems under contract to be divested by COX/COMCAST, as of March 28, 2000 (the
"Initial Warrant").
(b) In the event COX/COMCAST (i) sells or otherwise disposes of any of its
homes passed between March 28, 2000 and June 4, 2002 without causing such
transferred homes to remain bound by the MDA (as modified by this term sheet and
the other term sheets attached to the Letter Agreement), or (ii) fails to
complete the acquisition of any systems under contract to be acquired as of
March 28, 2000 and such events result in a net decline in the number of homes
passed by COX/COMCAST's cable systems, then COX/COMCAST will be required to
forfeit a proportionate amount of the shares covered by the Initial Warrant.
(c) In the event the number of homes passed by COX/COMCAST's cable systems
increases on a net basis between March 28, 2000 and June 4, 2002 (it being
understood that homes passed by systems under contract to be acquired by
COX/COMCAST as of March 28, 2000 shall be deemed for this purpose to be homes
passed by COX/COMCAST as of March 28, 2000, but homes passed by systems under
contract to be divested by COX/COMCAST as of March 28, 2000 shall not be deemed
for this purpose to be homes passed by COX/COMCAST as of March 28, 2000),
Excite@Home will issue to COX/COMCAST a second warrant as of June 4, 2002 to
purchase a number of Series A Shares equal to two (2) multiplied by the total
number of additional homes passed by COX/COMCAST's cable systems as of June 4,
2002 (the "Second Warrant"). The Initial Warrant, the Second Warrant and the
Additional Warrants (as defined below) are referred to collectively as the
"Warrants." The Series A Shares covered by the Warrants are referred to
collectively as the "Warrant Shares."
(d) In the event that as of any December 4 or June 4 (an "Adjustment
Date") following June 4, 2002 and prior to June 4, 2006, there has been a net
increase or decrease in the number of homes passed by COX/COMCAST's cable
systems of more than 5% compared to the number of homes passed by its systems as
of June 4, 2002, without deducting any transferred homes that COX/COMCAST causes
to remain bound by the New MDA, then, in the case of a net decrease, COX/COMCAST
will be required to forfeit a number of shares covered by the Second Warrant
and/or the Initial Warrant or, in the case of a net increase, Excite@Home will
issue an additional warrant to COX/COMCAST (together with any further additional
warrants granted pursuant to this paragraph (d), the "Additional Warrants"), on
the following terms. The aggregate number of shares subject to forfeiture or
subject to the Additional Warrant (which shall in either event be comprised of
Series A Shares) will equal (i) two (2) multiplied by (ii) the difference
between the number of homes passed by COX/COMCAST's cable systems as
5
of the applicable Adjustment Date and the number of homes passed by
COX/COMCAST's cable systems as of June 4, 2002, multiplied by (iii) a fraction,
the numerator of which is the number of six-month periods remaining from the
applicable Adjustment Date until June 4, 2006 (the "Remaining Number of
Six-Month Periods") and the denominator of which is twelve (12). Following the
first Adjustment Date, if any, on which there is a forfeiture of Warrant Shares
or a grant of an Additional Warrant pursuant to the foregoing provisions, on
each subsequent Adjustment Date the 5% increase or decrease test set forth in
the foregoing provisions shall apply with reference to the last Adjustment Date
on which there was a forfeiture or a grant of an Additional Warrant, and further
forfeitures or further grants of Additional Warrants, if any, will be calculated
pursuant to the foregoing provisions, but based on the difference between the
number of homes passed by COX/COMCAST's cable systems as of the subsequent
Adjustment Date and the number of homes passed by COX/COMCAST's cable systems as
of the immediately preceding Adjustment Date on which there was a forfeiture or
a grant of an Additional Warrant. In the event of any forfeiture following the
grant of any Additional Warrants, the forfeiture will be applied first against
the most recently granted Warrants, next against the next most recently granted
Warrants, ETC.
(e) The per share exercise price of the Initial Warrant and the Second
Warrant will be $29.5375, which is equal to the average daily closing price of
the Series A Shares during the ten (10) consecutive trading days ended on March
24, 2000. The per share exercise price of each Additional Warrant will be equal
to the average daily closing price of the Series A Shares during the ten (10)
consecutive trading days ended on the issue date of the Additional Warrant.
(f) The Initial Warrant will become vested, and immediately exercisable
subject only to HSR compliance, as to 1/6 of the Warrant Shares on June 4, 2001
and as to an additional 1/12 on each December 4 and June 4 thereafter until June
4, 2006, and the Second Warrant will become vested, and immediately exercisable
subject only to HSR compliance, as to 1/5 of the Warrant Shares on June 4, 2002
and as to an additional 1/10 on each December 4 and June 4 thereafter until June
4, 2006, so long as either (a) the MDA and its mutual exclusivity provisions or
(b) the New MDA, as the case may be, has been continuously in effect up to the
time of such vesting date with respect to COX/COMAST. Each Additional Warrant
will become vested, and immediately exercisable subject only to HSR compliance,
as to a fraction of the Warrant Shares equal to one divided by the Remaining
Number of Six Month Periods, on each June 4 and December 4 after issuance of the
Additional Warrant, so long as the New MDA has been continuously in effect up to
the time of such vesting date. If COX/COMCAST terminates the MDA or the New MDA,
no further vesting of the Warrants will occur, but the Warrants will remain
exercisable as to any Warrant Shares that have become vested prior to the date
of termination. If COX/COMCAST terminates the exclusivity provisions of the MDA
but not the MDA itself before June 4, 2002, COX/COMCAST will permanently forfeit
those Warrant Shares as to which the Initial Warrant and Second Warrant would
have otherwise become vested during the period that the exclusivity provisions
are not in effect (the "Nonexclusive Period"); provided, however, that
COX/COMCAST may resume vesting of the remaining Warrant Shares beginning on June
4, 2002 so long as the MDA has remained continuously in effect as to COX/COMCAST
until June 4, 2002, COX/COMCAST is in material compliance with the New MDA as of
June 4, 2002 and, during the Nonexclusive Period, COX/COMCAST has
6
maintained content carriage for all Excite@Home customers existing at the
beginning of the Nonexclusive Period on the terms of the MDA (other than
exclusivity) and has not remarketed (in the manner contemplated by paragraph
1(c)(v) above) any of Excite@Home's portal customers.
(g) The Warrants will expire on March 28, 2015.
(h) The Warrants will include registration rights comparable to those
currently applicable to the Series A Shares now beneficially owned by
COX/COMCAST. The Warrants will also contain a net exercise provision to
facilitate sales under Rule 144.
(i) The Warrants shall contain customary dilution protection, including,
without limitation, adjustments to the number and kind of shares issuable upon
exercise of the Warrants and the exercise price to reflect stock splits,
combinations, stock dividends, recapitalizations, and similar transactions.
(j) Within ten (10) business days following the date of the Letter
Agreement, COX/COMCAST will provide Excite@Home with a letter representing to
Excite@Home, to the best of COX/COMCAST's knowledge, the total number of homes
passed by COX/COMCAST's cable systems, including cable systems under contract to
be acquired by COX/COMCAST but excluding homes passed by cable systems under
contract to be divested by COX/COMCAST, as of March 28, 2000. In addition, prior
to and as a condition to the issuance of the Second Warrant, COX/COMCAST will
represent to Excite@Home in writing, to the best of COX/COMCAST's knowledge, the
number of additional homes passed as of June 4, 2002 on a net basis by
COX/COMCAST's cable systems. Excite@Home shall have reasonable audit rights to
verify the number of homes passed by COX/COMCAST's cable systems as of each such
date, and any discrepancy between the represented number and the audited number
(following reasonable resolution of any dispute) will be reflected in an
adjustment to the Initial Warrant or the Second Warrant, as the case may be.
COX/COMCAST will provide a similar representation letter and Excite@Home will
have similar audit rights with respect to the number of homes passed by
COX/COMCAST's cable systems as of each Adjustment Date.
(k) The existing warrants held by COMCAST with respect to cable systems
acquired by COMCAST from Prime - Potomac, L.P, Prime - Chicago L.P., Xxxxx
Intercable Inc. and Garden State Cablevision L.P. will be amended to eliminate
any performance vesting conditions and will be exercisable in equal six month
increments over the original vesting term of such warrants on the same June 4
and December 4 dates and under the same conditions as the Initial Warrant. The
terms of the following agreements may be terminated by COMCAST at the same time
that it terminates the MDA and all related LCO agreements as provided herein:
(i) @Home Network Distribution Agreement dated as of January 1, 1999 by and
between At Home Corporation, and InterMedia Partners, Intermedia Partners IV, LP
including its affiliates and InterMedia Partners of Kentucky, LP., (ii) @Home
Network Distribution Agreement dated as of March 22, 1999 between At Home
Corporation, Prime - Potomac, LLC and Prime Communications - Chicago, LLC; (iii)
@Home Network Distribution Agreement dated June 29, 1998, between At Home
Corporation and Garden State Cablevision L.P.; and (iv) @Home Network
7
Distribution Agreement dated as of June 26, 1998 by and between At Home
Corporation and Xxxxx Intercable Inc.
8
TRANSITION AND SERVICE LEVEL PLAN
I. INTRODUCTION
The objective of this document is to outline how Excite@Home ("E@H") will
support Cox Communications, Inc. and Comcast Corporation ("Cox/Comcast")
following the signing of the Letter Agreement and accompanying Term Sheets to
which this document is attached. This document includes the following seven
sections:
Section I This introduction.
Section II Defined terms.
Section III A description of the Master Service Level Agreement that
the parties will enter into to improve and monitor overall
service quality.
Section IV An Implementation Plan that Cox/Comcast may elect to
commence at any time during the term of the MDA or the New
MDA in order to transfer certain subsystems and network
elements to Cox/Comcast.
Section V An Exit Plan that describes how the parties would unwind
their relationship in the event Cox/Comcast elect to
terminate the MDA or New MDA.
Section VI Certain general terms that are applicable to both the
Implementation Plan and the Exit Plan.
Section VII Dispute resolution and remedies
II. DEFINED TERMS
1. Diligent Efforts: Diligent efforts means an obligation to use
commercially reasonable efforts, and dedicate the required personnel
(including where appropriate the retention of consultants) and other
resources, to complete the required task. The parties acknowledge that
if during the next twelve months Cox/Comcast elect to commence the
Implementation Plan or the Exit Plan, the timing for the required
subsystem and asset transfers will be affected by E@H's need to
continue to stabilize and improve its network services.
2. Fair Value: The Fair Value of an asset means the value that would be
allocated to that asset in the event that an independent appraiser was
asked to allocate the purchase price for GAAP purposes of a purchase of
E@H by a third party. For purposes of determining the Fair Value of an
asset, the parties acknowledge that in some cases Cox/Comcast have
contributed a portion of the funding to develop assets and that such
funding contribution should be a key factor in calculating the Fair
Value which Cox/Comcast will have to pay for such assets. For purposes
of determining the Fair Value of an asset or service, the parties
further acknowledge that the purpose of requiring Cox/Comcast to pay
Fair Value is to ensure that E@H meets its fiduciary
Page 1
duties to its other stockholders as opposed to generating new revenue
streams. If Cox/Comcast and E@H are unable to agree on Fair Value with
respect to any asset within 20 days, they shall appoint an appraiser to
determine Fair Value. In the event that Cox/Comcast and E@H are unable
to agree on an appraiser within 10 days, either party may cause the
American Arbitration Association ("AAA") of New York to appoint such
appraiser. In determining Fair Value, the appraiser shall consider only
the "market" and "cost" (i.e. replacement cost less depreciation)
approaches to value so that the assets are valued on a stand alone
basis without consideration of (i) the fact that such assets are
imbedded in an ongoing enterprise, and (ii) the fact that the assets
may be in a unique location and used to support a valuable customer
base.
3. Network elements: Network elements are specific hardware and software
that are used to provide a given service. The specific equipment and
software change over time, as well as where they are located. For
example, E@H is in the process of moving the network elements that
provide email out of the regional data centers ("RDCs").
4. Subsystem: A subsystem is a group of network elements that provide
specific functionality required to deliver the @Home service; provided,
however, that the content provided by E@H as part of the @Home service
will not be a considered a subsystem. For example, DHCP is a subsystem
that is provided by a given set of hardware and software elements.
5. System interfaces: System interfaces are specific interfaces to other
network elements or subsystems, both internal and customer facing, that
convey information required to provide a given service. They include
not just the interfaces themselves, but also any control information,
information used for fault management and isolation, security, service
evolution and service failover (i.e. all the "touch points").
Performance specifications are required for proper implementation of
the system interfaces and to assure proper delivery of the @Home
service. Today such system interfaces are utilized successfully for
Tier 2 and for some IT functions.
III. MASTER SERVICE LEVEL AGREEMENTS
1. Preparation of Master SLA. E@H and Cox/Comcast will use their diligent
efforts to negotiate and enter into a Master Service Level Agreement
("Master SLA") by no later than June 30, 2000. The Master SLA will
include specifications and standards for the Operator Facilities and
the @Home Facilities (as those terms are defined in the MDA),
including, without limitation, minimum plant performance standards,
network infrastructure standards, and certification criteria which will
ensure high signal quality and reliable service. The Master SLA will
contain liquidated damages provisions designed to ensure prompt
performance of E@H's and Cox/Comcast's respective obligations, which
liquidated damages amounts will be customary
Page 2
to the communications and software integration industries. E@H
management will report to E@H's Board of Directors as to the status of
the Master SLA at the Board of Directors meeting scheduled for May 4,
2000 in New York City.
2. Updates to Master SLA. The parties will use their diligent efforts to
update the Master SLA (including the liquidated damages provisions
continued therein) on at least an annual basis to reflect the transfer
of any subsystems to Cox/Comcast.
3. Time is of the Essence. The parties agree that time is of the essence
in connection with entering into the Master SLA and any required
amendments to the Master SLA.
IV. IMPLEMENTATION PLAN
1. Assumptions/Goals:
(a) Cox /Comcast desire to remain in the E@H coalition of MSOs, and
continue to deliver the @Home service.
(b) Cox /Comcast want the ability to provide certain subsystems of the
@Home service themselves at their option, instead of E@H
continuing to provide these services.
(c) Cox/Comcast want the ability to evolve these subsystems and to use
them to support IP services other than those provided by E@H. For
example, Cox/Comcast may want to offer its own telecommuting
service, set top service and/or IP telephony service.
(d) Cox/Comcast also want to control certain subsystems so as to
ensure that their cable infrastructure is used to deliver services
that are consistent with various products and service level
objectives.
(e) Both E@H and Cox/Comcast are committed to providing high quality
service to the user before, during, and after transitioning
subsystems. The parties acknowledge that it is of the utmost
importance that the transferred subsystems continue to interface
seamlessly with other network elements and subsystems so as to
assure the proper delivery of the @Home service.
2. Obligations:
(a) Appendix A sets forth the major subsystems and the related network
elements used to deliver the @Home service that Cox/Comcast
may elect to provide instead of E@H. Appendix A represents
the good faith
Page 3
understanding of E@H and Cox/Comcast with respect to those
subsystems and related network elements that may be transferred to
effectuate the goals of the Implementation Plan set forth above,
but it is not intended to be a comprehensive list. Cox/Comcast may
add other major subsystems relating to the @Home service, such as
email, to Appendix A so long as the transfer of such subsystems is
required to meet the goals of the Implementation Plan set forth
above and Cox/Comcast agree to the requirements set forth in this
Section IV.2 with respect to that subsystem. In exchange for
payment in an amount equal to Fair Value, E@H will transfer to
Cox/Comcast the subsystems and other assets that have been
requested by Cox/Comcast to the extent they are transferable.
(b) Cox/Comcast may elect to transfer the subsystems (including
without limitation any enhancements to such subsystems developed
prior to the Termination Date (as defined below)) on a subsystem
by subsystem basis. At such time as Cox/Comcast elects to have a
subsystem transferred, the parties agree to use their diligent
efforts to complete the transfer in accordance with the time
periods set forth in Appendix A. The parties agree that time is of
the essence in connection with any such transfers.
(c) E@H will document all system interfaces for a subsystem at the
time Cox/Comcast elects to provide that subsystem. These subsystem
interface specifications will include any service level APIs, both
customer facing as well as internal to other subsystems, as well
as any control and management interfaces needed for provisioning
or operation of the @Home service. Performance requirements to
assure proper service operation will also be fully documented, as
will any information about specific hardware and software
requirements that may be necessary.
(d) After a particular subsystem is transferred to Cox/Comcast,
Excite@Home will provide timely notice about changes in its
interface specifications that are needed to assure high quality
delivery of the @Home service to Cox/Comcast and their customers.
Major interface changes will be documented and communicated at
least 90 days before transition. Minor interface changes will be
documented and communicated at least 30 days before transition. In
any case, E@H will notify Cox/Comcast of interface changes such
that they will have a reasonable period of time to achieve
interface interoperation.
Cox/Comcast will modify their subsystems, at their own expense, to
comply with such interface specification changes so long as they
do not constitute an Adverse Change (as defined below). An
"Adverse Change" is an interface specification change proposed by
Excite@Home
Page 4
that would (a) materially impair Cox/Comcast's ability to offer
their own IP services (such as a telecommuting service, set top
service or IP telephony), and (ii) require a material cost to
implement given the circumstances. In the event of an Adverse
Change, Cox/Comcast will not be required to modify its subsystems
to comply with the proposed interface specification change and
Excite@Home will support the prior version of the interface for a
period of up to six months. If this support is done solely for
Cox/Comcast, then the cost of such support will be borne by
Cox/Comcast.
In the event there is a disagreement as to whether a proposed
interface specification change constitutes an Adverse Change,
Cox/Comcast and Excite@Home will appoint an industry expert to
consider the matter. In the event that Cox/Comcast and Excite@Home
are unable to agree on an industry expert within 10 days, either
party may cause the AAA of New York to appoint such an industry
expert. The decision of the industry expert will be binding on
both parties.
The parties also acknowledge that no provision of this Transition
and Service Level Plan will supercede Cox/Comcast's rights with
respect to the introduction of new enhancements or functions for
the @Home service pursuant to Section 13 of the MDA.
(e) Service level agreements (with penalties for non-performance) will
be defined by Cox/Comcast and E@H for both sides of each interface
to assure proper service operation and service delivery. Such
service level agreements will be consistent with performance
requirements for each subsystem and will be modeled after the
Master SLA.
(f) Cox/Comcast may make changes in the architecture, design and
implementation of transferred subsystems independently of E@H;
provided; however, that the required interfaces to other E@H
subsystems and customer interfaces are maintained and supported
adequately to continue delivery and evolution of the @Home
service.
(g) After a particular subsystem is transferred satisfactorily to
Cox/Comcast, Cox/Comcast will assume complete responsibility for
configuration, fault management, operations, capacity planning,
and technology evolution. E@H will continue to support monitoring
and surveillance consistent with defined interfaces to assure high
quality delivery of the @Home service.
(h) After a particular subsystem is transferred satisfactorily to
Cox/Comcast, fault isolation and troubleshooting will require
a coordinated effort by E@H and Cox/Comcast in order to
provide satisfactory service reliability and customer
service. In order to achieve this goal, E@H and
Page 5
Cox/Comcast will work together in good faith to facilitate
communication between their respective Network Operations Centers,
provide for visibility into their respective networks, and
implement other appropriate processes and procedures.
(i) Within three months of Comcast/Xxx'x request, E@H also will
provide Cox/Comcast with a comprehensive list of individually
priced services relating to the @Home service (the "@Home
Services") which E@H will make available to Cox/Comcast.
Cox/Comcast may utilize such services on a transitional or
long-term basis so long as the MDA or the New MDA is in effect.
(Thereafter, Cox/Comast can procure services pursuant to Section
V.2(d) below). Such services will be provided to Cox/Comcast
pursuant to reasonable commercial terms; provided, however that
their combined costs will not exceed the revenue split in effect
under the MDA or the New MDA, as the case may be.
(j) After a subsystem is transferred to Cox/Comcast, the percentage
split of the aggregate Basic Service Revenue (as defined in the
LCO/MDA) paid to E@H will be lowered appropriately to reflect the
fact that Cox/Comcast are providing that subsystem instead of E@H
as originally contemplated under the MDA and that E@H has avoided
some costs because of this transfer.
(k) In order to facilitate the parties respective obligations under
this Section IV.2, E@H will have periodic meetings with
Cox/Comcast to discuss future planning and architecture directions
for the evolution of the @Home service and subsystem interfaces so
that all parties are aware of general architectural directions and
product impacts.
V. EXIT PLAN
1. Assumptions/Goals:
(a) Cox/Comcast has elected to terminate the MDA or the New MDA, as
the case may be, as of a specific date (the "Termination Date").
(b) At such time following the Termination Date as Cox/Comcast elects,
the assets used by E@H to deliver the services provided to
Cox/Comcast will be transferred to Cox/Comcast to the greatest
extent practicable, with such transfers to take place in exchange
for Fair Value.
(c) Unless otherwise agreed, upon satisfactory transfer of such
assets, responsibility for providing all services will be
transferred to Cox/Comcast and Cox/Comcast's product offerings may
diverge from those offered by E@H.
Page 6
(d) Both E@H and Cox/Comcast are committed to providing high quality
service to the user before and after the Termination Date, but
acknowledge the transferred assets may no longer interface
seamlessly with other network elements and subsystems unless
expressly agreed in writing to the contrary. Notwithstanding the
foregoing, the parties acknowledge that it is of the utmost
importance that the quality of the service provided to subscribers
be maintained prior to the transfer of such assets.
2. Obligations:
(a) Cox/Comcast will provide E@H with written notice of its decision
to terminate the MDA or the New MDA (the "Termination Notice").
Within three months following the Termination Notice, E@H will
provide Cox/Comcast with a comprehensive list of all network
elements and other items that directly or indirectly are used by
E@H to provide services to Cox/Comcast. Such list will include,
among other things, the items listed below.
* All owned, leased or licensed hardware and software.
* All third party products or services utilized by E@H to provide
the @Home service, indicating any restrictions on use or E@H's
ability to transfer such products or services to Cox/Comcast.
* All database information, including mapping, addressing, history
abuse, customers, trouble ticketing, schema, etc.
* All software developed by E@H including tools, network management,
developer kits, etc.
* All documentation, including procedural manuals.
* All application interfaces including billing, network management,
trouble ticketing, etc.
* A description of the inter-relationships between the network
elements.
(b) Within three months of receiving the above described list,
Cox/Comcast will notify E@H in writing of those network elements
and other assets that it wants transferred. Appendix B sets forth
the major network elements and assets that the parties currently
anticipate would be transferred under the Exit Plan. Appendix B
represents the good faith understanding of E@H and Cox/Comcast
with respect to those subsystems and related network elements that
may be transferred to effectuate the goals of the Exit Plan set
forth above, but it is not intended to be a comprehensive list. In
exchange for payment in an amount equal to Fair Value, E@H will
transfer to Cox/Comcast the network elements and other assets that
have been requested by Cox/Comcast to the extent they are
transferable.
Page 7
(c) The parties agree to use their diligent efforts to cause any
transfers requested by Cox/Comcast to be made in accordance with
the time periods set forth in Appendix B. The parties agree that
time is of the essence in connection with any such transfers.
(d) Within three months following the Termination Notice, E@H also
will provide Cox/Comcast with a comprehensive list (with
reasonable specificity as requested by Cox/Comcast) of all
services available from E@H with each service individually priced
(the "Exit Services"). Notwithstanding Cox/Comcast's decision to
terminate the MDA or the New MDA, Cox/Comcast may utilize such
services on a transitional or long-term basis following the
Termination Date through June 4, 2006. The Exit Services will be
provided to Cox/Comcast pursuant to reasonable commercial terms.
As provided for in Section 1(e) of the Term Sheet for Comcast, Cox
and Excite@Home, the most favored nations provisions contained in
the MDA with respect to such services will be extended to apply to
Cox/Comcast until June 4, 2006 with respect to the Exit Services
so long as at least 50% of Cox/Comcast's broadband residential
Internet service subscribers use the Excite@Home
platform/connectivity services, whether or not the MDA or the new
MDA is then in effect.
VI. GENERAL TERMS
1. At least 60 days prior to the date a network element or other asset is
scheduled to be transferred to Cox/Comcast, E@H will transfer to
Cox/Comcast the items listed in Appendix C to the extent they are
available and transferable. E@H will transfer third party hardware and
software to Cox/Comcast to the extent it is legally permitted to do so.
2. Payment of Fair Value for an asset will be due to E@H upon
satisfactory completion of the requested asset transfer.
3. In exchange for a payment that is customary in the communications and
software industries, E@H will provide Cox/Comcast with the necessary
training, services and support and maintenance required to enable
Cox/Comcast to integrate the transferred assets in such a way that the
transition is as seamless as possible. Such services will include:
* Engineering support.
* Training on software operation.
* Enhancements to software as required to facilitate the
transition of assets to Cox/Comcast.
* Assisting Cox/Comcast in developing a timetable and plans for
transition.
Page 8
* Maintenance of BOS/CAPS to support the Cox/Comcast's
integration requirements.
In evaluating the appropriate payment for these services, the parties
will take into account both E@H's actual costs and the payment
arrangements that E@H has negotiated with hardware and software vendors
providing similar services.
4. If a specific existing network element or other asset is substantially
dedicated to providing service to Cox/Comcast, then such network
element or asset will be transferred to Cox/Comcast, and Cox/Comcast
will compensate E@H for the Fair Value of the same. If the specific
network element is not substantially dedicated to Cox/Comcast, then
either E@H or Cox/Comcast will deploy a network element or other asset
providing comparable functionality. If this is done by E@H, then E@H
will be compensated for the cost of this implementation and deployment.
If a new network element or asset is deployed, a QA and acceptance
procedure that is mutually agreeable to both parties will be developed
to assure minimal customer impact. Whether specific existing network
elements are "substantially dedicated" to Cox/Comcast will be
determined by the parties in good faith by assessing the percentage of
the total subscribers that are served by such network element or other
asset which are Cox/Comcast subscribers. For example, the network
elements located in the RDC serving Orange County, California are not
dedicated to Cox/Comcast and would require the deployment of new
network elements.
5. As for intellectual property that E@H has developed (e.g. the Matrix
software that evaluates CMTS load balancing), such intellectual
property will be licensed to Cox/Comcast on a royalty free basis and
E@H will indemnify Cox/Comcast for third party intellectual property
claims relating to the same in accordance with standard industry
practices. Notwithstanding the foregoing, if Cox/Comcast elect to
license the source code for E@H developed software, Cox/Comcast will
pay E@H Fair Value for such source code. All E@H intellectual property
that is licensed to Cox/Comcast may not be sublicensed or utilized by
third parties without E@H's written consent.
VII. DISPUTE RESOLUTION AND REMEDIES:
1. Escalation Process: Except with respect to any claim for
injunctive relief, any claim, controversy or dispute between the
parties relating to this Transition and Service Level Plan (a
"Dispute") will be resolved in accordance with the following phases:
(a) The Chief Executive Officers of each of the parties involved in
the Dispute will first discuss the Dispute and use their good
faith efforts to
Page 9
reach a fair and equitable resolution. This phase will be
completed within 5 business days.
(b) In the event the Chief Executive Officers of the parties involved
in the Dispute are unable to resolve the Dispute, a committee of
the Board of Directors of E@H will review the Dispute and use its
good faith efforts to facilitate a fair and equitable resolution.
This phase will be completed within 10 business days.
(c) In the event such committee of the Board of Directors of E@H is
unable to resolve the Dispute, the parties may submit the Dispute
to a confidential arbitration proceeding. Such arbitration
proceeding will be subject to the rules of the AAA, will be
conducted by a single arbitrator chosen by the AAA, and will be
binding on the parties. This phase will be completed within 30
business days.
2. Failure to Complete Master SLA. Without limiting Cox/Comcast's right to
seek injunctive relief, in the event the Master SLA is not completed
and executed by the parties by the dates set forth below, Cox/Comcast
may withhold the following percentage of all amounts owing to Excite
@Home (the "Withholding Amount") after those dates.
If Master SLA is Not Then the Withholding
Completed By: Xxxxxx Xxxx Xxxxx:
---------------- ------------------
July 31, 2000 20%
August 30, 2000 40%
September 30, 2000 60%
For example, if the Master SLA is not completed before August 30, 2000,
Cox/Comcast may withhold 20% of all amounts owing to Excite @Home that
accrued during July 2000 plus 40% of all amounts that accrued in August
2000.
The Withholding Amount will be released to Excite@Home without interest
upon completion of the Master SLA.
3. Injunctive Relief. E@H acknowledges and agrees that a material breach
by E@H of any material provision of this Transition and Service Level
Plan will cause Cox/Comcast irreparable injury for which an adequate
remedy at law is not available. Therefore, the parties agree that in
the event of any such breach Cox/Comcast will be entitled to equitable
relief from any court of competent jurisdiction to specifically enforce
any such provision of this Transition and Service Level Plan in
addition to any other remedies that such parties may have in law or in
equity.
Page 10
-------------------------------------------------------------------------
APPENDIX A
MAJOR SUBSYSTEMS AND DOMINANT SERVICE ELEMENTS TO BE TRANSFERRED
UNDER IMPLEMENTATION PLAN (1)
SUBSYSTEM NAME
--------------
* NETWORK ELEMENTS THAT ARE INCLUDED IN THE SUBSYSTEM
* CURRENT HARDWARE/SOFTWARE PLATFORMS SUPPORTING THE SUBSYSTEM
* DOMINANT LOCATIONS WHERE HARDWARE CURRENTLY EXISTS
* ESTIMATED TIME FRAME TO COMPLETE THE TRANSFER
Provisioning
------------
* Billing, subscriber management, network topology data management, IP
address allocation and IP addresses, MPROV software elements, customer
care tools
* BOS/CAPS, Kenan Arbor billing, Oracle common servers, Remedy,
communication networks that link the MSO to Redwood City BOS network
* E@H Redwood City
* As soon as practicable
Member Services
---------------
* Member services software, web server, SQL links to BOS/CAPS and billing,
etc.
* Dedicated member services platforms
* E@H Redwood City
* As soon as practicable
DHCP (used by modems to acquire control information, as well as to assign IP
addresses to user CPE)
----------------------
* AIC and JOIN DHCP server software, database agents that interface
to MPROV for service population
* RDC H/A servers, IP service provisioning clusters
* In RDC space and large headends
* 90 to 180 days
DNS (name services) - used to populate/use CPE names and addresses
------------------------------------------------------------------
* BIND software, and database agents that interface to CAPS for
service population
* RDC H/A servers, headend proxy servers
* In RDC space as well as headends
* 90 to 180 days
Regional transport networks (in large metro areas only)
-------------------------------------------------------
* Routers, optical hardware, switches, leased network capacity
(from CLECs or RBOCs), microwave equipment, etc.
* Cisco routers, Cisco and Extreme switches, a variety of optical
network equipment and hardware, etc.
* In RDC space, as well as headend locations
* 90 to 180 days
Page 11
CMTS (CMTS's used in delivering E@H services only)
--------------------------------------------------
* Variety of CMTS equipment, associated debugging software,
database agents for service population
* CMTS hardware, RDC and CAPS MPROV agents
* In RDC space, headend space, and E@H Redwood City
* 90 to 180 days
-------------------------------------------------------------------------
Note 1: Such transfer will be implemented in accordance with Section VI of
the Transition and Service Level Plan.
Page 12
APPENDIX B
ASSETS TO BE TRANSFERRED UNDER EXIT PLAN
---------------------------------------------------------------------------
TIME REQUIRED FOR E@H
WHAT COX/COMCAST NEEDS RESPONSE/TRANSITION
COMPONENT FROM @HOME (1) TO THE COX/COMCAST'S
REQUEST
---------------------------------------------------------------------------
CPE - All customer * See Appendix C 90 day response time
premise equipment * Config. files for plus 90 day transition
including the cable all modems period
modem and commercial * CM IP addressing
services hardware. scheme
* PC IP address
(transfer ownership
of IP addresses from
E@H to the Exiting
MSO)
---------------------------------------------------------------------------
MAN - Metropolitan area * See Appendix C 90 day response time
network (routers) and * Network element plus 90 day transition
the routing on it. addressing scheme period
* Network element
ownership (routers,
e-switches, etc.)
* Network element
passwords
* Network element
config. files
* Access to human
knowledge base
* Transfer of any
management tools
* Transfer software
licenses
* Transfer of
non-private MAN IP
addresses from E@H
to the Exiting MSO
---------------------------------------------------------------------------
Backbone * Point of demarcation 90 day response time
is the Cox/Comcast's plus 90 day transition
side of E@H's multi- period
MSO agg. router.
---------------------------------------------------------------------------
CMTS (Note: already * See Appendix C 90 day response time
owned by Cox/Comcast) * CMTS addressing plus 90 day transition
scheme period
* CMTS passwords
* CMTS config files
* Access to human
knowledge
* Transfer any
management tools
* Transfer software
licenses (including
Cisco IOS)
* Snapshot of database
provisioning
information
---------------------------------------------------------------------------
RDC Servers (DHCP, TFTP, * See Appendix C * 90 day response
DNS, Email, News, Proxy time plus 90 day
Servers, HA servers) transition period
---------------------------------------------------------------------------
Email domain name and * Develop appropriate * 30-day response
Personal web page domain IT support to time plus transition
name forward subscribers' period of up to one
requests to the year.
Cox/Comcast's domain
Page 13
---------------------------------------------------------------------------
TIME REQUIRED FOR E@H
WHAT COX/COMCAST NEEDS RESPONSE/TRANSITION
COMPONENT FROM @HOME (1) TO THE COX/COMCAST'S
REQUEST
---------------------------------------------------------------------------
* Xxxxx Xxx/Comcast
use of E@H domain
during a transition
period
---------------------------------------------------------------------------
CPE software * License to use * N/A
* Customized browser and distribute all
* CPE PC tools & current customer
utilities client software used
* All other E@H in delivering the
distributed software E@H service
* Xxxxxxx.xxx (Tioga)
* NetDiags
* Test results of
all modem and
network interface
components
* Modem test
procedures and
documentation to
ensure level 2
compliance
---------------------------------------------------------------------------
Provisioning: * Continue * N/A
* Order taking operation of current
* Member services scheme until
* Logging & tracking detailed, mutually
* Fulfillment agreeable transition
(BOS/CAPS) scheme is
* Documentation and established and
source code implemented.
Services: * All current and
* Billing historical data
* Tier 2 files associated
* 800# remote access with the
* Trouble resolution Cox/Comcast's
* NOC subscribers
* KnowledgeBase * CSR tools source
* Installation code
training documentation * API code, license
and documentation
* BOS/CAPS code,
licensing and
documentation
* Scopus interface
code, licensing and
documentation
* Remedy schemas,
history and templates
* Capacity planning
tools (Matrix,
Netstats, Proxy,
etc.)
* Abuse monitoring
tools
* Training
documents for all
provisioning and
services
* Server
integration (SIC)
and first modem
provisioning (FMP)
documentation
---------------------------------------------------------------------------
Page 14
---------------------------------------------------------------------------
TIME REQUIRED FOR E@H
WHAT COX/COMCAST NEEDS RESPONSE/TRANSITION
COMPONENT FROM @HOME (1) TO THE COX/COMCAST'S
REQUEST
---------------------------------------------------------------------------
Content * E@H to continue * N/A
current operation
and development
---------------------------------------------------------------------------
Marketing * Sales * N/A
serviceability
database
* Transfer of OEM
agreements
---------------------------------------------------------------------------
Customer Data * All historical, * 30 days and ongoing
usage, traffic
patterns, billing,
click-thru, homes
passed info,
demographic data
* Abuse information
---------------------------------------------------------------------------
Note 1: Such transfer will be implemented in accordance with Section VI of
the Transition and Service Level Plan.
Page 15
APPENDIX C
ITEMS NEEDED TO TAKE CONTROL OF ANY HARDWARE ELEMENTS (1)
* Current equipment configuration
* Current service/maintenance contracts to the extent that they are
assignable
* Documentation of operating practices and supporting service level
agreements
* Training materials associated with equipment
* Passwords and accounts
* Monitoring tools and software reporting
* Historical performance reports
* Access to current responsible human resources
* Planned activity impacting equipment
* Documentation of all interfaces
* Title and licenses supporting
* Backup tapes and files
* Spares inventory
* Physical inventory location and access
Leased space / racks / power
Note 1: Such transfer will be implemented in accordance with Section VI of
the Transition and Service Level Plan.
Page 16
