EXHIBIT 10.7
MASTER AGREEMENT
THIS AGREEMENT IS MADE THIS 7TH DAY OF NOVEMBER, 1997, BY AND BETWEEN CHARTER
COMMUNICATIONS, INC. ("CHARTER") AND WORLDGATE COMMUNICATIONS, INC.
("WORLDGATE"), REGARDING THE CONTEMPORANEOUS (I) EXECUTION OF AN AFFILIATION
AGREEMENT IN THE FORM ATTACHED (THE "AFFILIATION AGREEMENT") AND THE
ASSOCIATED DEPLOYMENT OF THE WORLDGATE INTERNET ACCESS SERVICE WITHIN
CHARTER'S CABLE TELEVISION INSTALLATIONS (II) INVESTMENT BY CHARTER IN
WORLDGATE PURSUANT TO THE TERMS OF A STOCK PURCHASE AGREEMENT AND/OR
SHAREHOLDER AGREEMENTS(THE "STOCK PURCHASE AGREEMENTS"), AND (III) THE GRANT
OF WARRANTS TO CHARTER PURSUANT TO THE TERMS OF A WARRANT AGREEMENT IN THE
FORM ATTACHED (THE "WARRANT AGREEMENT").
1. CHARTER AND WORLDGATE ARE ENTERING INTO THE AFFILIATION AGREEMENT
CONTEMPORANEOUSLY HEREWITH TO PROVIDE FOR THE DEPLOYMENT OF THE WORLDGATE
SERVICE (AS DEFINED IN THE AFFILIATION AGREEMENT) IN CHARTER'S CABLE
OPERATIONS.
2. CHARTER WILL USE REASONABLE EFFORTS TO DEPLOY THE WORLDGATE SERVICE
AND INSTALL APPROPRIATE HEADEND EQUIPMENT (I) IN ALL MARKETS IN WHICH CHARTER
HAS IN EXCESS OF 25,000 SUBSCRIBERS (THE "MAJOR MARKETS") WITHIN
[INFORMATION REDACTED]## OF SUCH MARKETS BECOMING TECHNICALLY CAPABLE OF
PROVIDING INTERACTIVE PAY-PER-VIEW SERVICE, AND (II) TO THE EXTENT CHARTER
DETERMINES THAT IT IS ECONOMICALLY PRACTICAL, IN ALL MARKETS WHICH ARE NOT
MAJOR MARKETS BUT WHICH ARE TECHNICALLY CAPABLE OF PROVIDING INTERACTIVE
PAY-PER-VIEW SERVICE.
3. WHEN WORLDGATE HAS A TELEPHONE RETURN PATH SERVICE AVAILABLE, CHARTER
WILL, IF ECONOMICALLY PRACTICAL, OVER A [INFORMATION REDACTED]## PERIOD
THEREAFTER, MAKE ALL REASONABLE EFFORTS TO INSTALL THE APPROPRIATE HEADEND
EQUIPMENT AND DEPLOY THE WORLDGATE SERVICE IN THE REMAINING CHARTER MARKETS,
THEREBY MAKING THE SERVICE AVAILABLE TO ALL OF THEIR CUSTOMERS.
4. SHOULD CHARTER ACQUIRE ADDITIONAL MARKETS IT WILL HAVE A
[INFORMATION REDACTED]## PERIOD FROM THE DATE OF THE CLOSING OF THE
ACQUISITION TO INSTALL THE APPROPRIATE HEADEND EQUIPMENT AND DEPLOY THE
WORLDGATE SERVICE IN THE NEW MARKETS, IF ECONOMICALLY PRACTICAL, SUBJECT TO
THE AVAILABILITY OF THE TELEPHONE RETURN PATH SERVICE, IF REQUIRED, AND
PROVIDED THAT, NOTWITHSTANDING THE ABOVE PERIOD, CHARTER USES ALL REASONABLE
EFFORTS TO INSTALL SUCH EQUIPMENT AND DEPLOY SUCH WORLDGATE SERVICE AS SOON
AS IS ECONOMICALLY PRACTICAL.
5. CHARTER WILL EXTENSIVELY MARKET THE WORLDGATE SERVICE WITHIN ITS
MARKET AREAS.
6. CHARTER WILL EXERCISE ALL REASONABLE EFFORTS TO SUPPORT TRIALS OF NEW
WORLDGATE SERVICE ENHANCEMENTS, INCLUDING TECHNICAL ASSESSMENT, WEEKLY
FEEDBACK, EXTENSIVE CONSUMER INSTALLATIONS, AND CUSTOMER SATISFACTION
ANALYSIS.
7. UPON THE FINAL APPROVAL OF THIS AGREEMENT, THE AFFILIATION AGREEMENT
AND THE WARRANT BY WORLDGATE'S BOARD OF DIRECTORS AND SHAREHOLDERS, AS
SPECIFIED IN SECTION 18 OF THIS AGREEMENT (WHICH APPROVAL IS ANTICIPATED TO
OCCUR ON NOVEMBER 10, 1997), CHARTER AND WORLDGATE WILL ISSUE A MUTUALLY
ACCEPTABLE PRESS RELEASE REGARDING CHARTER'S COMMITMENT TO FULLY LAUNCH THE
WORLDGATE SERVICE. AT AN APPROPRIATE TIME (CONSISTENT WITH SEC REQUIREMENTS
AND OTHER APPLICABLE LAWS, RULES AND REGULATIONS) PRIOR TO WORLDGATE'S IPO,
CHARTER WILL ISSUE A MUTUALLY ACCEPTABLE PRESS RELEASE REGARDING ITS PROGRESS
IN LAUNCHING THE WORLDGATE SERVICE. IT WILL INCLUDE USAGE STATISTICS,
CUSTOMER TAKE RATES, AND OTHER INFORMATION WHICH REFLECTS CUSTOMERS'
SATISFACTION WITH THE SERVICE.
8. CHARTER WILL CONTINUE TO BE CANDID AND DILIGENT IN ITS RESPONSES TO
PRESS INQUIRIES REGARDING THE WORLDGATE SERVICE AND TO REFERENCE CHECKS
REGARDING ITS SATISFACTION WITH THE WORLDGATE SERVICE.
9. IF CHARTER IS SOLD, THE TERMS OF THE THIS AGREEMENT AND THE
AFFILIATION AGREEMENT WILL BE ASSIGNED TO THE NEW OWNERS AND WILL REMAIN IN
FORCE FOR ALL THEN EXISTING CHARTER SYSTEMS AND MARKETS.
10. CHARTER AND WORLDGATE ARE ENTERING INTO THE WARRANT AGREEMENT AND
CONTEMPORANEOUSLY HEREWITH, AND UPON AND AFTER THE CLOSING OF THE SERIES B
FINANCING, CHARTER WILL BE ENTITLED TO PURCHASE UP TO 394,880 SHARES OF
SERIES B PREFERRED STOCK AT $7.10 PER SHARE, PURSUANT TO THE TERMS AND
CONDITIONS OF THE WARRANT AGREEMENT.
11. THE WARRANTS, AND UNDERLYING SHARES, ISSUED AND ISSUABLE TO CHARTER
WILL BE COVERED BY STANDARD ANTI-DILUTION AND REGISTRATION RIGHTS AS MADE
AVAILABLE TO THE OTHER PURCHASERS OF THE SERIES B PREFERRED SHARES.
------------------
## THE INFORMATION CONTAINED IN THIS PORTION OF THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT.
12. EFFECTIVE AT THE CLOSING OF THE SERIES B FINANCING WORLDGATE WILL
SELL TO CHARTER AND CHARTER WILL PURCHASE $500,000 IN VALUE OF SERIES B
PREFERRED STOCK AT $7.10 PER SHARE (OR IF LESS, THE ACTUAL PURCHASE PRICE OF
SUCH SHARES UNDER THE OFFERING) PURSUANT TO THE TERMS OF THE STOCK PURCHASE
AGREEMENTS, WHICH CHARTER AND WORLDGATE WILL NEGOTIATE TOGETHER WITH THE OTHER
PROSPECTIVE PURCHASERS OF SUCH SHARES, AND MUTUALLY EXECUTE ALONG WITH SUCH
PROSPECTIVE PURCHASERS AS PART OF THE CLOSING OF THE SERIES B FINANCING.
13. THIS AGREEMENT, THE AFFILIATION AGREEMENT, THE STOCK PURCHASE
AGREEMENTS AND WARRANT AGREEMENT SUPERSEDE PRIOR DISCUSSIONS, LETTERS OF INTENT
AND AGREEMENTS OF THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF
(EXCLUSIVE OF ANY OUTSTANDING OBLIGATIONS OF CONFIDENTIALITY AND NON-USE UNDER
THE EXISTING NON-DISCLOSURE AGREEMENT BETWEEN THE PARTIES). THE TERMS HEREOF MAY
BE AMENDED ONLY BY A WRITING EXECUTED BY AUTHORIZED REPRESENTATIVES OF BOTH
PARTIES.
14. THIS AGREEMENT DOES NOT IN ANY WAY CREATE THE RELATIONSHIP OF
FRANCHISE, JOINT VENTURE, PARTNERSHIP OR AGENCY BETWEEN WORLDGATE AND CHARTER,
AND EACH SHALL REMAIN AN INDEPENDENT CONTRACTOR, AND AS SUCH SHALL NOT ACT OR
REPRESENT ITSELF, DIRECTLY OR BY IMPLICATION, AS AGENT FOR THE OTHER OR ASSUME
OR CREATE ANY OBLIGATION OF OR IN THE NAME OF THE OTHER.
15. A WAIVER BY EITHER PARTY OF ANY OF THE TERMS OR CONDITIONS OF THIS
AGREEMENT SHALL NOT, IN ANY INSTANCE, BE DEEMED OR CONSTRUED TO BE A WAIVER OF
SUCH TERMS OR CONDITIONS FOR THE FUTURE OR OF ANY SUBSEQUENT BREACH THEREOF. NO
PAYMENT OR ACCEPTANCE THEREOF UNDER THIS AGREEMENT SHALL OPERATE AS A WAIVER OF
ANY PROVISION HEREOF. ALL REMEDIES, RIGHTS, UNDERTAKINGS, OBLIGATIONS AND
AGREEMENTS CONTAINED IN THIS AGREEMENT SHALL BE CUMULATIVE AND NONE OF THEM
SHALL BE IN LIMITATION OF ANY OTHER REMEDY, RIGHT, UNDERTAKING, OBLIGATION, OR
AGREEMENT OF EITHER PARTY.
WORLDGATE Communications
CONFIDENTIAL 971108-0253
16. EXCEPT AS HEREIN OTHERWISE EXPRESSLY PROVIDED, ALL NOTICES,
STATEMENTS AND OTHER DOCUMENTS DESIRED OR REQUIRED TO BE GIVEN HEREUNDER SHALL
BE IN WRITING AND SHALL BE GIVEN BY PERSONAL DELIVERY, CERTIFIED MAIL, OR FAX
(WITH A COPY SENT BY REGULAR US MAIL). ALL NOTICES, STATEMENTS AND OTHER
DOCUMENTS SHALL BE SENT TO:
If to WG:
WORLDGATE COMMUNICATIONS, INC.
0000 XXXXXXX XXXXX, XXXXX 000
XXXXXXXX, XX 00000
ATTN: GENERAL COUNSEL
IF TO AFFILIATE:
CHARTER COMMUNICATIONS, INC.
POWERS XXXXX XXXXX
XX. XXXXX, XX 00000
ATTN: XXXXXXX X. XXXXXXXX, VICE PRESIDENT - CORPORATE DEVELOPMENT
WITH A COPY TO XXXXXX X. XXXX, SENIOR VICE PRESIDENT AND GENERAL COUNSEL
(OR AT SUCH OTHER ADDRESS AS MAY BE DESIGNATED IN WRITING BY EITHER PARTY NO
LESS THAN THIRTY (30) DAYS PRIOR TO THE DATE OF TRANSMISSION OF THE NOTICE,
STATEMENT, ETC.). NOTICE GIVEN BY DOMESTIC MAIL SHALL BE DEEMED GIVEN THREE (3)
DAYS AFTER THE DATE OF MAILING; NOTICE GIVEN BY INTERNATIONAL MAIL SHALL BE
DEEMED GIVEN TEN (10) DAYS AFTER THE DATE OF MAILING, NOTICE GIVEN BY FAX SHALL
BE DEEMED GIVEN AT THE TIME OF DISPATCH; NOTICE GIVEN BY PERSONAL DELIVERY SHALL
BE DEEMED GIVEN UPON DELIVERY BY THE MESSENGER; AND NOTICE GIVEN BY OVERNIGHT
DELIVERY SHALL BE DEEMED GIVEN THE FIRST BUSINESS DAY FOLLOWING DELIVERY TO THE
OVERNIGHT DELIVERY SERVICE.
17. ALL MATTERS PERTAINING TO THIS AGREEMENT (INCLUDING ITS
INTERPRETATION, VALIDITY, PERFORMANCE AND BREACH), IN WHATEVERJURISDICTION
ACTION MAY BE BROUGHT, SHALL BE GOVERNED BY THE LAWS OF DELAWARE (EXCLUDING ITS
CONFLICT OF LAW PROVISIONS). THE PARTIES HERETO EXPRESSLY CONSENT AND AGREE TO
SUBMIT TO THE JURISDICTION OF ANY COURT OF COMPETENT JURISDICTION IN THE STATE
OF DELAWARE, AND TO ACCEPT SERVICE OF PROCESS OUTSIDE THE STATE OF DELAWARE IN
ANY MATTER TO BE SUBMITTED TO ANY SUCH COURT PURSUANT HERETO. WHEREVER THERE IS
ANY CONFLICT BETWEEN ANY PROVISION HEREOF AND ANY LAW OR REQUIREMENT WITH THE
FORCE OF LAW, THIS AGREEMENT SHALL REMAIN VALID AND SUCH PROVISION HEREOF SHALL
BE RESTRICTED TO THE EXTENT, AND ONLY TO THE EXTENT, NECESSARY TO BRING IT
WITHIN THE APPLICABLE REQUIREMENTS, UNLESS SUCH RESTRICTION SHALL HAVE THE
EFFECT OF MATERIALLY NULLIFYING, OR IMPAIRING, THIS AGREEMENT.
18. THIS AGREEMENT, THE AFFILIATION AGREEMENT, THE STOCKHOLDERS
AGREEMENTS AND THE WARRANT AGREEMENT ARE SUBJECT TO THE APPROVAL OF THE BOARD OF
DIRECTORS AND SHAREHOLDERS OF WORLDGATE COMMUNICATIONS, INC., AND NEITHER
WORLDGATE NOR CHARTER SHALL BE BOUND BY THE PROVISIONS HEREOF OR THEREOF UNLESS
AND UNTIL ALL SUCH AGREEMENTS ARE APPROVED BY THE BOARD OF DIRECTORS AND
SHAREHOLDERS OF WORLDGATE COMMUNICATIONS, INC.
WORLDGATE Communications CONFIDENTIAL 971108-0253
19. ALL REFERENCES TO THE SERIES B PREFERRED STOCK OF WORLDGATE ASSUME
THE CAPITALIZATION STRUCTURE OF WORLDGATE DESCRIBED IN THE CONFIDENTIAL PRIVATE
PLACEMENT MEMORANDUM, DATED SEPTEMBER 29, 1997, AND ASSUME AN OFFERING WILL
OCCUR ON OR BEFORE NOVEMBER 30, 1997, AT A PRICE OF $7.10 PER SERIES B
PREFERRED SHARE. APPROPRIATE ADJUSTMENTS WILL BE MADE IN THE TERMS OF THIS
AGREEMENT, THE WARRANT AGREEMENT AND THE STOCKHOLDERS AGREEMENTS TO ACCOMMODATE
ANY VARIANCES.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed and
accepted by their duly authorized representatives as of the day and year first
written above.
Charter Communications, Inc.
By: /S/ Xxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxx
------------------------- --------------------------
Name: Xxxxxx X. Xxxx Name: Xxxxxxx X. Xxxx
Title: Senior Vice President Title: Vice President
Date: November 7, 1997 Date: November 7, 1997
Tel.: 000-000-0000 x 000 Tel.: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
WorldGate Communications
Charter.masterAgreement.11-7-97.doc
