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EXHIBIT 10.37
MASTER SERVICES AGREEMENT
This is a Master Services Agreement ("Master Agreement") dated and
effective as of January 1, 1999, between:
HIGH SPEED ACCESS CORP.
D/B/A HSA CORP.
0000 Xxxx Xxxxxx Xxx., Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000 ("HSAC")
and
NATIONAL CABLE TELEVISION COOPERATIVE, INC.
00000 X. 00xx Xx.
Xxxxxx, Xxxxxx 00000 ("NCTC")
RECITALS
A. NCTC is a cooperative which represents the owners/operators of RF
cable television franchise(s) and related hybrid fiber-coaxial landline
distribution system(s) across the [United States] [North America] (the
"Systems") who join as members of NCTC (individually a "Member" and collectively
the "Participating Members"). NCTC wishes to facilitate the Participating
Members' opportunity to utilize the Systems for high-speed data/Internet access
by their respective cable TV subscribers.
B. HSAC provides high-speed data/Internet access services (the "HSAC
Services," as further defined below) to its customers through various sources,
including without limitation, cable television plants and systems.
C. HSAC and NCTC wish to enter into this Master Agreement to provide
for HSAC's provisioning of HSAC Services to Participating Member's and their
cable subscribers, and govern various aspects of the relationship between HSAC
and NCTC as provided herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements set forth herein and other good and valuable consideration, the
mutuality, receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties agree:
1. DEFINITIONS. Unless otherwise defined herein, all capitalized terms
shall have the meaning ascribed to them in the form of Network Services
Agreement attached hereto as Exhibit A, which is incorporated herein by
reference.
2. NETWORK SERVICES AGREEMENT; TERM.
(a) NCTC and HSAC agree that Participating Members may, from March 1,
1999 through December 31, 2000, subject to the Clustering requirements described
below, take and offer HSAC Services by entering into an Adoption Supplement and
Network Services Agreement with HSAC (a "Network Services Agreement"), the form
of which is attached hereto as Exhibit A. NCTC and HSAC further agree to
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enter into good faith negotiations not later than October 1, 2000 (and every two
(2) years thereafter) to renew and/or enter into a successor Master Agreement
and form of Network Services Agreement (to be effective on January 1, 2001 (and
every two (2) years thereafter) (together the "Successor Agreements").
(b) Notwithstanding the agreement of NCTC and HSAC to renew the Master
Agreement every two (2) years, the term of each Network Services Agreement
between HSAC and a Member shall commence effective as of the date of execution
by a Member, and shall continue for a term of not less than sixty (60) months
from the agreed "Launch Date" for each Member's System (the "Initial Term"),and
expire of December 31st of the calendar year in which the 60th month falls. The
Network Services Agreement shall then renew itself effective as of January 1st
of the next calendar year for a 12-month or 24-month term that runs concurrently
with the term of any successor Master Agreement between NCTC and HSAC then in
effect (i.e., the Network Servicesrenewal may be for one or two years depending
on the cycle) unless notice of intent not to renew is sent by either Member or
HSAC to the other not less than less than 60 days or more than 120 days prior to
such December 31st expiration date. Upon any such renewal, Member shall have the
option of continuing to be governed by its original Network Services Agreement,
or the successor Network Services Agreement then in effect (except for the
length of the term as provided in the previous sentence.
Example #1: Operator enters into a Network Services Agreement with HSAC
with an effective date of August 1, 1999, and HSAC launches HSAC
Services on or before November 1, 1999. The Network Services Agreement
will expire December 31, 2004. NCTC and HSAC enter into a Successor
Agreements and Network Services Agreement effective January 1, 2003.
Operator shall have a 60-day option commencing September 1, 2004 to
either (i) allow the Network Services Agreement to expire, or (ii) (a)
renew the Network Services Agreement then in effect with HSAC or adopt
the terms and conditions of the successor Network Services Agreement
for a period commencing January 1, 2005, and expiring on December 31,
2005.
Example #2: Operator enters into a Network Services Agreement with HSAC
with an effective date of August 1, 2000, and HSAC launches HSAC
Services on or before November 1, 2000. The Network Services Agreement
will expire December 31, 2005. NCTC and HSAC enter into a Successor
Agreements and Network Services Agreement effective January 1, 2005.
Operator shall have a 60-day option commencing September 1, 2005 to
either (i) allow the Network Services Agreement to expire, or (ii)
renew the Network Services Agreement then in effect with HSAC or adopt
the terms and conditions of the successor Network Services Agreement
for a period commencing January 1, 2005, and expiring on December 31,
2007.
3. CLUSTERING. HSAC shall not be required to individually provision
HSAC Services to, and instead shall enjoy complete discretion to "cluster," the
Systems of Participating Members that encompass fewer than 5000 homes passed (a
"Sub-5000 System"). Us used herein or in any Network Services Agreement, a
"cluster" or "clustering" means that one or more Sub-5000 Systems may, for
purposes of aggregating the flow of data to, from and among such Sub-5000
Systems to HSAC's ISP portal or POP, be combined by HSAC with other Systems or
Sub-5000 Systems so that the clustered Sub-5000 Systems mimic the size, economic
and technical specifications of a System exceeding 10,000 homes passed. The head
ends of clustered Sub-5000 Systems must situate within a 50-mile radius of each
other either concentrically or
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sequentially, and shall employ such data transmission technology (telco circuit,
VSAT, xDSL, etc.) as HSAC shall determine in its sole discretion.
4. MOST FAVORABLE REVENUE SHARING. If, during the term of this
Agreement, HSAC enters into a Network Services Agreement for the provision of
HSAC Services to a Participating Member with an equal or fewer number of Data
Subscribers than the then-aggregate number of Participating Members' Data
Subscribers under which HSAC pays a higher percentage of Gross Revenues or Net
Gross Revenues, as the case may be, or offers cash or other equivalent
consideration (not including equity incentives) not offered to other
Participating Members under their Network Services Agreement, then HSAC shall
promptly notify NCTC of such agreement, whereupon HSAC, at the election of NCTC
and the Operator, shall pay such higher percentage or offer equivalent
consideration (not including equity incentives) to other Participating Members
as are provided in such Participating Member's agreement; provided that such
Participating Member shall be subject to and in compliance with all applicable
terms and conditions of the agreement.
5. MOST FAVORED CONTRACT; EXTENDED TERM. HSAC agrees that during the
term of this Agreement that a Participating Member shall have the option of
simultaneously terminating any pre-existing network services agreement with HSAC
and adopting HSAC Services as a "Participating Member" under the Network
Services Agreement provided for herein except that Operator in so doing shall be
deemed to adopted a new term of agreement as set forth in Section 2(b) hereof.
6. NCTC ADMINISTRATION SERVICES; FEE.
(a) During the term hereof, NCTC shall perform the following
services for HSAC and the Participating Members (the "Administration Services"):
i. Communication of and endorsement of HSAC Services to Participating
Members;
ii. Tracking and notification of Participating Members with respect to
expiration of Network Services Agreements and options with respect to
election of Successor Agreements;
iii. Collection, review, handling and processing of Adoption Certificates
and Network Services Agreements; and
iv. Annual audit of HSAC reports/monthly payments to Participating Members
(Section E.4 of the Network Services Agreement).
(b) NCTC may at its option elect to collect HSA's Share (as
defined in Exhibit E to the Network Services Agreement) from Participating
Members serving a billing party under Exhibit E/Section E.3.1 of the Network
Services Agreement and remit same to HSAC within 45 days in accordance with the
procedure/schedule set forth therein.
(c) HSAC shall pay to NCTC annually during the term hereof, on
or before January 31, a fee (calculated as of December 31 of the prior year)
equal to 1% of the Participating Members' share of the aggregate Gross Revenues
and Net Gross Revenues collected from Data Subscribers for the prior calendar
year.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
HIGH SPEED ACCESS CORP.
By: /s/ Xxx Xxxxxxx
-------------------------------------
Name: Xxx Xxxxxxx
-----------------------------------
Title: Director of Operations
----------------------------------
NATIONAL CABLE TELEVISION
COOPERATIVE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-----------------------------------
Title: President & CEO
----------------------------------
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[HSA LOGO]
HSA NETWORK SERVICES AGREEMENT
This is a NETWORK SERVICES AGREEMENT ("Agreement") dated and effective
this 1st day of January, 1999, between:
HIGH SPEED ACCESS CORP.
D/B/A HSA CORP.
0000 Xxxx Xxxxxx Xxx., Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000 ("HSAC")
and
A PARTICIPATING MEMBER OF THE
NATIONAL CABLE TELEVISION COOPERATIVE, INC.
IDENTIFIED BY EXECUTION OF ADOPTION SUPPLEMENT HERETO
(an "Operator")
RECITALS
A. Operator is a member of the National Cable Television Cooperative,
Inc. ("NCTC"), which owns and operates the RF cable television franchise(s) and
related hybrid fiber-coaxial landline distribution system(s) identified on the
covering Adoption Supplement and EXHIBIT A attached hereto (the "System"), and
wishes to offer its cable subscribers the opportunity to utilize the System for
high-speed data/Internet access.
B. HSAC provides high-speed data/Internet access services (the "HSAC
Services," as further defined below) to its customers through various sources,
including without limitation, cable television plants and systems.
C. Operator wishes to retain HSAC to provide turnkey implementation of
the HSAC Services to its cable subscribers, and HSAC wishes to access and use
Operator's System to deliver the HSAC Services to such cable subscribers upon
the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements set forth herein and for other good and valuable consideration,
the mutuality, receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties agree:
1. DEFINITIONS. Unless otherwise defined in a certain Master Agreement
dated as of January 1, 1999, between NCTC and HSAC (the "Master Agreement," to
which the form of this
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Network Services Agreement is attached as ANNEX A-2), the following terms, as
used herein or in the Master Agreement, shall have the meaning ascribed to them
as follows:
1.1 "Cable Subscriber" means a cable TV subscriber or
potential subscriber residing in a "home passed" (i.e., residence or commercial
establishment) in the System regardless of whether such cable TV subscriber or
potential subscriber subscribes to HSAC Services or cable television services.
1.2 "Cluster" or "Clustering" shall the meaning given them in
Section 3 of the Master Agreement.
1.3 "Confidential Information" means any and all information
emanating from either HSAC's business or Operator's business in any form,
including the terms and conditions of this Agreement, as well as all dates,
summaries, reports or information of all kinds, whether oral or written,
acquired, devised or developed in any manner by or from HSAC personnel or files
or the Operator's personnel or files. The term "Confidential Information" shall
not include information which is in the public domain; information known to the
recipient party as of the date of this Agreement as indicated by the recipient's
written records, unless the recipient party agreed to keep such information in
confidence, and information properly obtained hereafter from a source who is not
under an obligation of confidentiality with respect to such information; is
independently developed by receiving party through persons who have not had,
either directly or indirectly, access or knowledge of such Confidential
Information which can be verified by independent evidence; or is obligated to be
produced under a court order of competent jurisdiction or a valid administrative
or congressional subpoena.
1.4 "Customer Lists" means the Operator's list of Cable
Subscribers in the System and related subscriber information (i.e., name,
address, phone number, other demographics, cable TV service level selection,
etc.)
1.5 "Data Subscriber" means a Cable Subscriber residing in a
"home passed" in the System who or which subscribes to HSAC Services regardless
of whether such subscriber subscribes to Operator's cable TV service.
1.6 "Designated Personnel" means the individuals described in
Sections 7 and 8 of this Agreement.
1.7 "Gross Revenues" means the gross revenues collected from
Data Subscribers in the System for HSAC Services, and which, as used herein,
does not include (i) applicable sales or use taxes, (ii) federal, state or local
franchise fees, (iii) Home Equipment Package installation fees/set-up charges
assessed by HSAC, Operator or other authorized resellers/installers, (iv)
rentals paid by Data Subscribers on rented/leased Home Equipment Packages, (v)
add-on ISP-type service fees or charges for additional e-mail addresses, static
IP
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addresses, commercial ISP web-hosting services, or security/encryption software
sold or sublicensed to Data Subscribers under Section 4.2 of this Agreement, and
(vi) except for Local HSAC Content, other add-on fees, "click" charges or other
revenues, if any, for "content" (whether proprietary to HSAC and its content
providers or Operator), including advertising and promotional revenue or other
transaction value (including barter payments or advertising avails), "bring your
own access" (BYOA), or other online applications.
1.8 "HSAC Network Equipment" means the equipment owned and
employed by HSAC for operation of the HSAC Services by connection to the
head-end of Operator's System, and shall include, without limitation, all
monitoring devices, telecommunications equipment, storage devices, computing and
data processing equipment, and software.
1.9 "HSAC Services" or "Services" means the turnkey design,
installation, activation, testing, operation, marketing, provision, customer
service and "call center" support, billing, and maintenance of HSA's high-speed
"data over cable" connection/transmission services from and between HSA's
Internet ISP/portal and the HSA Network Equipment interfaced with the System
that allows Data Subscribers, for a monthly fee and other applicable charges
paid to HSAC, to browse the Internet/news groups, receive and send electronic
mail (or "E-mail"), and perform related activities and use other data/digital
applications.
1.10 "HSAC Local Content" means HSAC or Operator-branded or
co-branded start-up and other web pages/sites, EPGs (electronic program guides),
or other content designed, created or acquired and controlled exclusively by
HSAC (as ISP) and offered uniquely by HSAC to Data Subscribers in Operator's
System as part of the HSAC Services. "HSAC Local Content" shall not be deemed to
include the initial startup and other web pages/sites, EPGs (electronic program
guides), or other content that is provisioned or acquired from another source
and provisioned generally (e.g., a "start page" provisioned on a nationwide
basis) to any and all data subscribers accessing the Internet through the HSAC
Services. HSAC and Operator agree that the creation and hosting of HSAC Local
Content is an interstate traffic data/transportation business.
1.11 "Home Equipment Package" means the cable modem/other
set-top device and related power converter/supply, network interface card (NIC),
patch cabling, and required software for each Data Subscriber.
1.12 "ISP" means HSAC or its successor Internet/information
service provider designated by HSAC to provide Internet access to Data
Subscribers.
1.13 "Market or Regulatory Conditions" means one or more
events which materially impacts the ability of HSAC or Operator to attract or
retain Data Subscribers, e.g., a repricing, initiation or expansion of
competitive services (such as digital subscriber line) by CLEC or ILEC telephone
carrier, or by fiber, wireless/satellite-connected Internet service or access
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providers, or the imposition by any federal, state or local regulatory authority
of any "open access" requirements on the System or sales, use or privilege
taxes, levies, tariffs or duties, license fees, etc. (i.e., an "Assessment")
with respect to the HSAC Services, regardless of whether such Assessment, or
responsibility for its collection, is imposed on or passed through the ISP, HSAC
or Operator.
1.14 "Optional Services" means the provisioning and marketing
by HSAC of Gross Revenue-generating high-speed digital or data
connection/transmission services which utilizes the Operator's RF Plant/head-end
equipment and/or passes data through the HSA Network Equipment, including, but
not limited to, IP telephony, video/audio streaming, and the deployment of
dial-up or cable modems/other set-top devices which are capable of displaying
text and graphics directly to a Cable Subscriber's TV set (if connected), etc.
1.15 "System" means the "System(s)" as defined in RECITAL A
hereto and listed on EXHIBIT A which (i) each encompass not less than 5,000
"homes passed" or qualify as Sub-5000 System(s) (as defined in Section 3 of the
Master Agreement) that HSAC may elect to Cluster, (ii) is committed to the
deployment of HSAC Services under this Agreement, and (iii) complies with the
System Data Requirements.
1.16 "System Data Requirements" means the minimum technical
requirements set forth on EXHIBIT B hereto to which the System must conform in
order for the HSAC Services to operate, including, without limitation, at least
400 MHz of System bandwidth and, for one-way RF plants/systems, at least one (1)
6 MHz channel reserved for the HSA Service, and for two-way RF plants/systems,
at least two (2) 6 MHz channels reserved for the HSAC Services.
2. EXCLUSIVE RIGHT TO PROVIDE HSAC SERVICES; GENERAL OBLIGATIONS OF
OPERATOR AND HSAC.
2.1 Operator hereby grants to HSAC, and HSAC accepts from the
Operator, the sole and exclusive right and privilege to use the System to
provide to Operator's Data Subscribers the following:
(a) the HSAC Services; and
(b) On a competitive basis, such Optional Services and other
high-speed or "dial-up" transmission services (as more
fully explained in Section 4 below) which are similar to
or competitive with the HSAC Services; provided, that so
long as they do not utilize or interfere with the HSA
Network Equipment or the 6 MHz channel(s) utilized by
the HSAC Services, Operator may provision Optional
Services from another third party if within 120 days of
Operator's notice to HSAC of Operator's intent, HSAC
declines to provision such Optional Services or if HSAC
and
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Operator cannot agree upon engineering specifications, a
deployment schedule, or revenue splits for such Optional
Services.
2.2 Operator covenants and agrees, in accordance with
industry standards, to:
(a) Carry and distribute the HSAC Services in their
entirety, without delay, interruption, alteration,
addition, deletion or editing of any portion thereof,
and in a manner that will permit the highest quality
reception by Data Subscribers as is possible consistent
with the System Data requirements and Attainment
Measures (defined in Section 3.1 below);
(b) maintain its System in accordance with the System Data
Requirements for the transmission of HSAC Services
throughout the System;
(c) take appropriate and commercially reasonable precautions
to ensure that the HSAC Services are received only by
Data Subscribers, and to use commercially reasonable
efforts to prevent unlawful reception, retransmission or
use of the HSAC Services by any means, whether now known
or hereafter devised, without the prior written
authorization of HSAC (if Operator becomes aware that
any unauthorized third party is receiving or
transmitting any part of the HSAC Services, Operator
will notify HSAC in writing of the name and address of
such third party); and
(d) otherwise comply with all applicable local, state and
federal laws, rules, regulation and franchises.
2.3 HSAC agrees to implement, deploy and perform the HSAC
Services in accordance with industry standards and the terms of this Agreement
in a time frame mutually agreed upon by the parties.
3. PARAMETERS OF HSAC SERVICES. In order to provide HSAC Services
during the term of this Agreement, HSAC and Operator agree as follows:
3.1 Commissioning of RF Plant System; System Requirements.
(a) Prior to the provisioning of HSAC Services, Operator
will complete and submit to HSAC and NCTC an Adoption Supplement and System
Profile Questionnaire which summarizes the electronic and physical
specifications of Operator's System(s) and certifies to HSAC the Operator
believes the System(s) conform to the System Data Requirements. Upon review and
acceptance of the Adoption Supplement and Questionnaire (subject to HSAC's
discretion regarding Clustering and absence of conflicts regarding overbuilding)
HSAC will perform a pre-engineering inspection (by spectrum analyzer or
otherwise) of Operator's RF plant/System (i.e., a Site Survey"), and furnish
Operator with its recommendations for any upgrades, repairs, etc., which may be
necessary for the System to meet minimum System Data Requirements (i.e.,
identification of "Attainment Measures").
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(b) Operator agrees that (i) in order to deliver HSAC
Services to Data Subscribers, the System must satisfy the System Data
Requirements, (ii) HSAC is not responsible for whether the System satisfies the
System Data Requirements, and (iii) it shall promptly undertake (or refuse to
take) any reasonable Attainment Measures and maintain the System Data
Requirements during the period of time of this Agreement. In the event Operator
refuses to effect appropriate Attainment Measures, this Agreement shall
terminate without liability of any kind to Operator or HSAC. EXHIBIT B may set
forth the time frame agreed upon by Operator and HSAC for the Operator to bring
the System into conformity with the System Data Requirements.
(c) At such time as Operator and HSAC agree that the
System is sound and meets the System Data Requirements, and subject to HSAC's
right to defer and Cluster Sub-5000 Systems for deployment, HSAC and Operator
will agree within 30 days upon a timetable to "commission" the System, and HSAC
shall launch the HSAC Services to Data Subscribers within 180 days thereafter,
as follows:
i. install and connect the HSAC Network Equipment (Operator will provide
a reasonable amount of collaction/rack space, physical security,
AC/climate control and electrical power supply for the HSAC Network
Equipment);
ii. arrange at HSAC's expense for data transport (via telco, wireless,
etc.) from the Internet to the Operator's head-end(s)/System;
iii. arrange telco return path circuits in one-way Systems;
iv. test the HSA Network Equipment interface;
v. activate the data through-put portion of the HSAC Services, initiate
beta testing with a select group of complimentary "beta" customers;
and
vi. effect a full marketing/revenue "launch" of the HSAC Services.
(d) After initial activation of HSAC Services in a
System, neither party will make any changes or upgrades to the HSA Network
Equipment or Operator's RF Plant/System specifications that might render the
System or the HSAC Services inoperable without consulting with the other party
regarding the allocation of costs of such changes or upgrades.
3.2 Allocation of Maintenance Obligations. Following the
commissioning of the System: (
a) HSAC will at its own cost and expense furnish and
maintain all HSAC Network Equipment attaching to the System/RF plant;
(b) Operator will at its own cost and expense operate,
maintain and repair the integrity of its RF-Plant/System (including, without
limitation, all coaxial cable, head-end equipment, connectors, amplifiers,
passive devices/splitters, etc.) and not interfere with the proper
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connection interface of the HSAC Network Equipment to the System, and provide
technical personnel to eliminate signal leakage or interruptions in the System.
(c) The HSAC Network Equipment will at all times be the
property of HSAC, and will be insured by HSAC against casualty loss. Upon
termination of this Agreement (unless purchased by Operator pursuant to Section
5 hereof), Operator agrees to make available for recovery by HSAC all HSAC
Network Equipment, subject to reasonable wear and tear. HSAC will not damage or
disable the System head-end while recovering the HSAC Equipment, and will leave
the System functional (except for termination of HSAC Services). Operator will
use reasonable care to avoid damaging or disconnecting the HSAC Network
Equipment, and will not move, relocate, alter, sell, lease, license, assign,
encumber or otherwise tamper with the HSAC Network Equipment, and will pay to
repair or replace HSA Network Equipment that Operator or its employees damage.
3.3 Home Equipment Package. HSAC will select the vendor/brand
of cable Home Equipment Packages, and then procure, rent to*, and arrange for
the installation by the Data Subscriber, Operator, or other authorized
resellers/installers of, the Home Equipment Package for each Data Subscriber.
(*Unless purchased directly at retail by the Data Subscriber, HSAC shall retain
ownership of the Home Equipment Package, and Data Subscriber will be required to
sign a statement acknowledging such ownership).
3.4 Allocation of Operational Responsibilities. Upon
activation of the HSAC Services, HSAC will have the exclusive right to
manage/monitor the data that flows through the HSA Network
Equipment/data-switched portion of the System. Neither HSAC nor Operator shall
be responsible for third-party software.
3.5 Notice of Service Failures. Operator and HSAC each agree
to notify the other's Designated Personnel promptly of any outages,
interruptions or degradation of service in either the RF plant portion or the
data portion of the HSAC Services (a "Service Failure") of which they become
aware from any source (i.e., a "Notice"). To the extent a Service Failure is
traceable to an RF plant defect or malfunction (whether or not due to force
majeure), Operator will provide technical personnel within 6 hours or less (or
as soon as commercially practicable) to repair and/or respond to such Service
Failure and restore the HSAC Services. To the extent the Service Failure is
traceable to HSAC Network Equipment or a data stream malfunction (whether or not
due to force majeure), HSAC will likewise correct the Service Failure within 6
hours or provide technical personnel within 24 hours (or as soon as commercially
practicable) to repair or replace any malfunctioning HSAC Network Equipment. In
no event however does HSAC warrant to Operator, or Operator warrant to HSAC,
that their respective systems and services (i.e., the System, the HSAC Services,
the HSA Network Equipment, or the Internet ISP access portal/data stream
afforded by and through the ISP or other utilities will be uninterrupted,
error-free or secure from criminal intrusion (i.e., by "hackers").
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3.6 Troubleshooting. Operator and HSAC agree to cooperate and
work together diligently to respond to all Service Failures, and shall
coordinate the scheduling of maintenance that might interfere with the HSAC
Services. Both parties agree and acknowledge that downtime, incorrect or
inaccurate Data Subscriber invoicing, and infrastructure problems will be given
highest priority attention at all times. Operator and HSAC shall each have
access to the other's Designated Personnel (EXHIBITS F and G) on a 24x7 basis
(including weekends and holidays) via pager, cell phone or similar means for the
purpose of troubleshooting Service Failures pursuant to agreed-upon Escalation
Procedures, which may be annexed hereto as EXHIBIT C.
3.7 Customer Service. HSAC shall provide a toll-free telephone
number and telephone support representatives to take customer service calls from
Data Subscribers regarding Service Failures and the performance of the Home
Equipment Package, and the Internet browser and electronic mail software
provided by third parties. Operator shall also provide its Data Subscribers with
a "customer service response" service for the System/RF portion of the HSA Data
Network. HSAC shall make its engineers and technicians available as needed on a
second-level basis to provide technical support and to serve as liaisons between
or among the Data Subscribers, Operator, and HSAC. Except in the case of a
Service Failure requiring immediate notification under Section 3.5 above, HSAC
will inform Operator of any System/RF Plant problems of which HSAC becomes aware
(i.e., RF level, hum, etc.) as soon as commercially practicable.
3.8 Billing of Data Subscribers; Internet Usage. The
processing of subscriptions for HSAC Services from Data Subscribers and the
invoicing of Data Subscribers shall be handled as set forth on EXHIBIT E hereto
and incorporated herein by reference. Additionally, HSAC shall distribute to and
require Data Subscribers to sign an "Internet End User/Services Agreement" (the
"End User Agreement") which describes the limits placed on Data Subscribers
rights to damages and indemnification. HSAC shall have the right but not the
obligation to enforce the terms and conditions of the End User Agreement and/or
reprice or terminate a Data Subscriber's account for violations of the End User
Agreement.
3.9 Data Subscriber Cancellation/Disconnect. In the event a
Data Subscriber terminates all of his, her or its cable TV/RF services with
Operator, Operator will notify HSAC and use commercially reasonable efforts to
recover and store the Home Equipment Package (except for any NIC/ethernet card
inside the customer's computer) for HSAC at no charge. In the event a Data
Subscriber cancels only his, her or its subscription to HSAC Services, HSAC
shall be responsible for recovering the Home Equipment Package.
3.10 Promotional and Build-Out Activities.
(a) The parties will cooperate reasonably with one another regarding
the marketing and promotion of HSAC Services to Operator's Cable Subscribers
with the aim of maximizing the number of Data Subscribers. Such cooperation will
include (i) a "drop/install" at Operator's expense to any home passed in the
System, and (ii) Operator's distribution of marketing to Cable
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Subscribers regarding the HSAC Services (e.g., a reasonable number of
complimentary "ad avails" on Operator's cable TV system on and with appropriate
channels, times, durations, and demographics, space in bills, statement
messaging, space in installation packs, POP displays, etc.), provided that HSAC
will reimburse Operator for the incremental postage associated with xxxx
stuffers. Each party will nominate at least one (1) employee each to meet and
jointly review marketing plans and materials assure acceptable quality
standards. Operator will not delete or alter, or authorize the deletion or
alteration of, any copyright or trademark notice, logo, credit or any other
notice included in any promotional materials delivered pursuant to this
paragraph.
(b) Operator will provide HSAC access (both print copy and
electronically) to its Customer List(s) on a confidential basis solely for the
purpose of developing and implementing a marketing plan, developing and
implementing a billing system for Data Subscribers, and otherwise provide
"OnLine Help-Desk" modem configuration support, Data Subscriber sign-up, and
ongoing customer service.
(c) The parties further agree to jointly review and evaluate
periodically the economic feasibility of expanding (i.e., into a central
business district, university campus, etc.) or upgrading Operator's RF Plant in
the System in order to increase the number of homes passed and/or commercial
Data Subscribers.
3.11 Complimentary Accounts. HSAC will at Operator's direction
provide to Homes Passed in the System complimentary HSAC Services accounts
(except that such recipients of complimentary service must pay for their own
Home Equipment Packages as would any other Data Subscriber) as follows:
a) up to five (5) non-transferable accounts as designated by Operator;
b) a reasonable number of other government/"community service" accounts;
c) a reasonable number of accounts for Operator's office(s) (via multiple
modems or single-modem with hub/proxy server distribution as the
parties may agree) within the System, and Operator's employees at
their residences; and
d) such other complimentary accounts as HSAC in its sole discretion shall
determine.
These accounts may only be used by the parties to be listed on EXHIBIT D and may
not be transferred by Operator or the parties listed without the written consent
of HSAC.
3.12 Advertising Expenditures; In-System Marketing Personnel.
HSAC agrees to commit advertising funds in an amount not less than $1.50 per
Home Passed in connection in the initial Launch Date, and at least $.25/Home
Passed annually in such System thereafter. In addition, with respect to Systems
encompassing 10,000 or more homes passed, HSAC will hire or retain one (1)
"local" marketing manager/firm to coordinate the initial launch of HSAC Services
and follow-on Data Subscriber-end user sales and installation activities in the
System. In Systems encompassing fewer than 10,000 homes passed and
Clustered/Sub-5000 Systems, HSAC will engage or retain a "regional" manager/firm
for the System and other Systems in the
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area (which may or may not be Systems owned by Participating Members) for the
purpose of coordinating and supervising the marketing of HSA Services to Data
Subscribers.
4. Miscellaneous Matters Regarding Branding, Optional Services;
Content, Other Matters.
4.1 Branding. HSAC will brand, market, deploy and support the
HSAC Services in the System under the Operator's tradenames (with Operator's
reasonable consent) or such other brands/service marks or co-brands as HSAC and
Operator may jointly designate. HSAC is accordingly granted a license to use
Operator's name and logo to brand the HSAC Services and create HSAC Local
Content, which shall include, advertising, opening web pages, billing, etc. HSAC
will produce and distribute all marketing materials and execute all marketing
plans applicable to the HSAC Services.
4.2 Exclusivity; Limits on Overbuilding/Competition. HSAC will
enjoy exclusive rights under this Agreement to provide HSAC Services (and
non-Gross Revenue generating enhancements to those HSAC Services) in the System.
This includes the rights to market, invoice, and retain its share of Gross
Revenues on accounts enrolled by HSAC on homes passed and business/commercial
subscribers (whether connected by coax or fiber) regardless of whether the
Operator is competing in the System area as a CLEC (i.e., a tariffed Competitive
Local Exchange Carrier), CAP (i.e., a Competitive Access Provider), or other
form of carrier or telco contractor. Except as provided in Section 4.5 below in
connection with "dial-up" services, HSAC will not deploy HSAC Services under an
agreement with or in conjuction with another MSO-cable operator/overbuilder
within the System. Moreover, HSAC may in its discretion refuse to accept any
Adoption Supplement or deploy HSAC Services in connection with any Operator's
overbuild activities.
4.3 Content. HSAC shall designate and prescribe the Data
Subscriber's initial start page and the content thereof. HSAC will also create
and distribute HSAC Local Content linked to such initial start page. Prior
distributing such HSAC Local Content, HSAC will furnish same to Operator,
whereupon Operator shall have ten (10) days to review and offer comments and
suggestions to HSAC regarding such content. HSAC shall not be obligated to
accept any such suggestions from Operator, and Operator shall no right to
disapprove or block the distribution of such HSAC Local Content unless such HSAC
Local Content is manifestly deragatory or dilutive to Operator's brand or
tradenames/trademarks. The "Gross Profits" (i.e., gross sales less direct
operating costs) of captured advertising, E-commerce and any other ancillary
revenues generated by HSAC's or Operator's efforts specifically for and included
within the HSAC Local Content will be deemed Gross Revenues for purposes of
calculating the Operator's Share as set forth in Exhibit E.
4.4 Optional Services. HSAC may upon notice to and consent of
the Operator (such consent not to be unreasonably withheld provided HSAC offers
such Optional Services on a competitively-priced basis) develop and deploy Gross
Revenue-generating Optional Services through
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the HSA Network Equipment for Data Subscribers and invoice for same. If HSAC
deploys IP telephony or other Optional Service, HSAC shall pay Operator a
percentage of the "Gross Profits" (defined in the previous subparagraph)
generated from the sales/distribution of such services as set forth on Exhibit
E. Optional Services may or may not be branded under the Operator's logos and
service marks as the parties agree.
4.5 Additional Connectivity Services. HSAC will have the right
to market and deploy broadband connectivity services (via analog or xDSL modem,
wireless/transciever, etc. broadband technology) to "dial-up" residential and
commercial customers both within and outside the System area that do not qualify
as homes passed/Cable Subscribers and do not utilize the Operator's RF
plant/head-end equipment or the HSA Network Equipment. HSAC will pay 15% of the
"Net Revenues" (i.e., gross revenues less any splits, leased line or other
access fees, or other payments paid to the owner of the copper or other
non-hybrid-fiber/coaxial network owner (be it an RBOC, other telco, or
proprietary LAN owner such as a university, etc.) for access to its bandwidth)
generated from such "dial-up" services to Operator. Such "dial up" customers
will be deemed "owned" by HSAC for purposes of this Agreement. HSAC will retain
such "dial up" customers and 100% of the Gross Revenues generated from "dial-up"
services in the event of any termination or expiration of this Agreement;
provided, that if the Operator expands/upgrades its System/RF plant such that
HSAC's "dial-up" customers eventually qualify as homes passed or Cable
Subscribers, HSAC will make commercially reasonable efforts to enroll such
customers as Data Subscribers.
4.6 Security. HSAC may at its option make available security
and encryption equipment and software to Data Subscribers at no additional
charge to Operator; provided, that HSAC is not obligated to do so, nor shall it
be liable or responsible in any way for the installation and performance of such
equipment or software.
5. Term of Agreement; Expiration; Termination Fee.
5.1 Term; Renewal. This term of this Agreement shall commence
effective as of the date set HSAC accepts and countersigns the Operator's
Adoption Supplement, and shall continue for a term of not less than sixty (60)
months from the agreed "Launch Date" for each Member's System ,and expire on
December 31st of the calendar year in which the 60th month falls (the "Initial
Term"). The Network Services Agreement shall then renew itself effective as of
January 1st of the next calendar year for a 12-month or 24-month term that runs
concurrently with the term of any successor Master Agreement between NCTC and
HSAC then in effect (i.e., the renewal of this Network Services Agreement may be
for one or two years depending on the cycle) unless notice of intent not to
renew is sent by either Member or HSAC to the other not less than less than 60
days or more than 120 days prior to such December 31st expiration date. Upon any
such renewal, Member shall have the option of continuing to be governed by this
Network Services Agreement, or any successor Network Services Agreement then in
effect (except for the length of the term as provided in the previous sentence).
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Example #1: Operator enters into a Network Services Agreement with HSAC
with an effective date of August 1, 1999, and HSAC launches HSAC
Services on or before November 1, 1999. The Network Services Agreement
will expire December 31, 2004. NCTC and HSAC agree upon a successor
form of Network Services Agreement effective January 1, 2003. Operator
shall have a 60-day option commencing September 1, 2004 to either (i)
allow the Network Services Agreement to expire, or (ii) renew the
Network Services Agreement then in effect with HSAC or adopt the terms
and conditions of the successor Network Services Agreement for a period
commencing January 1, 2005, and expiring on December 31, 2005.
Example #2: Operator enters into a Network Services Agreement with HSAC
with an effective date of August 1, 2000, and HSAC launches HSAC
Services on or before November 1, 2000. The Network Services Agreement
will expire December 31, 2005. NCTC and HSAC enter into a Successor
Agreements and Network Services Agreement effective January 1, 2005.
Operator shall have a 60-day option commencing September 1, 2005 to
either (i) allow the Network Services Agreement to expire, or (ii)
renew the Network Services Agreement then in effect with HSAC or adopt
the terms and conditions of the successor Network Services Agreement
for a period commencing January 1, 2005, and expiring on December 31,
2007.
5.2 Termination. This Agreement may be terminated as follows:
(a) At Operator's option exercised on sixty (60) days written notice to
HSAC, in which event Operator shall:
(i) purchase (or assume the leases) from HSAC at book value
the HSAC Equipment and Home Equipment Packages committed to Operator's
System, or, make available to HSAC all HSAC Network Equipment in good
condition, normal wear and tear excepted, and exercise its commercially
reasonable best efforts to assist HSAC with recovery of all Home
Equipment Packages owned/leased by HSAC from Data Subscribers; AND
(ii) pay to HSAC a Termination Fee, i.e., an amount equal to
the net present value of the Gross Revenues for HSAC Services which
would otherwise have been generated from HSAC's then-existing base of
Data Subscribers in the System, which in any event shall not be less
than the amount required to fully reimburse HSAC for any unrecovered
direct "up-front" capital, marketing, and operating costs incurred in
deploying the HSAC Services in the System. If Operator and HSAC cannot
agree upon the amount of any Termination Fee, they shall jointly engage
and split the cost of a neutral appraiser/valuation specialist to place
a value on such Termination Fee.
(b) At HSAC's option exercised on sixty (60) days written notice to
Operator, in which event HSAC shall be liable for damages as if Operator had
terminated this Agreement because of breach by HSAC (subject to the limitations
in Section 12).
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(c) By either party upon breach by the other as provided in Section 13,
in which event the defaulting party shall be liable for damages for breach
(subject to the limitations in Section 12).
(d) By Operator, without further liability of either Operator or HSAC,
if: (i) Operator and HSAC have not agreed upon a timetable for launch within the
30 day period provided under Section 3.1 (c); (ii) the HSAC Services have not
been launched by the later of the agreed upon launch date or 180 days from the
date the parties agreed upon the timetable; or (iii) HSAC has refused to deploy
HSAC Services under the last sentence of Section 4.2.
6. Fees for Services. HSAC will invoice Data Subscribers and pay to
Operator the Operator's Share of Gross Revenues, Gross Profits and Net Gross
Revenues as set forth on EXHIBIT E attached hereto.
7. Designated Operator Personnel. Operator shall identify by name and
location all Operator Designated Personnel required in Section 3. The personnel
identified shall have authority to authorize an investigation of Service
Failures in the RF portion of the Network and have knowledge of pertinent
maintenance, repair and support procedures. The list of authorized Operator
contact personnel is set forth in EXHIBIT F of this Agreement, provided that
such list may be revised by Operator at any time as long as HSAC is informed in
writing and such list includes at least three (3) Operator contact personnel.
8. Designated HSAC Personnel. HSAC shall identify by name and location
all HSAC Designated Personnel required in Section 3. The personnel identified
shall have authority to authorize an investigation of Service Failures in the
data portion of the HSA Data Network and have knowledge of pertinent
maintenance, repair and support procedures. The list of authorized HSAC contact
personnel is set forth in EXHIBIT G of this Agreement, provided that such list
may be revised by HSAC at any time as long as Operator is informed in writing
and such list includes at least three (3) HSAC contact personnel.
9. Confidential Information.
9.1. Each party agrees that it shall not, during or after the
term of this Agreement, permit the duplication, use, or disclosure of any
Confidential Information to any person (other than an employee, agent, or
representative of the other party who must have such information for the
performance of its obligation hereunder), unless such duplication, use or
disclosure is specifically authorized by the other party in writing. Each party
shall (a) not disclose any Confidential Information to any third person without
the express written consent of the disclosing party; (b) not use, directly,
indirectly, or in concert with any other person, any Confidential Information
for any purpose other than the performance of their obligations under this
Agreement; (c) use reasonable diligence, and in no event less than that degree
of care which such party uses in respect to its own confidential information of
like nature, to prevent the unauthorized disclosure or reproduction of such
information. Without limiting the generality of the foregoing, to the extent
that this Agreement permits the copying of
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Confidential Information, all such copies shall bear the same confidentiality
notices, legends, and intellectual property rights designations that appear in
the original versions.
9.2. Apart from HSAC's obligations to Operator under this
section concerning confidentiality, HSAC shall have no obligation to delete or
destroy Operator's information, including Operator's Cable or Data Subscriber
listings, from its computer systems or backup and archival libraries until such
time as HSAC's regular procedures for elimination of such data would normally
delete or destroy such information. Following a Data Subscriber disconnect,
Operator may require the elimination of its data maintained within HSAC's backup
and archival libraries prior to the time the data would normally be deleted or
destroyed by HSAC, and Operator shall pay for all expenses associated with the
early deletion or destruction of all such data.
9.3. Operator acknowledges that the names and marks "HSA",
"HSAC", "HSA Network", "High Speed Access Network", the "HSA Data Network" and
other HSAC logos, program names, trademarks, service marks, programs, manuals,
documentation, and other support materials covered by this Agreement or
otherwise used in connection with the HSA Service, are the exclusive property of
HSAC. Operator has not and will not acquire any proprietary rights thereto by
reason of the Agreement, and Operator shall have no rights to use such names,
marks, logos, variations or titles except at the times and in a manner expressly
approved by HSAC. Operator shall not publish or disseminate any material that
violates any restriction imposed by HSAC. Conversely, HSAC acknowledges that the
Operator's logos, trademarks, service marks, programs, manuals, documentation,
and other support materials covered by this Agreement or otherwise used in
connection with the HSAC Services, are the exclusive property of Operator. HSAC
has not and will not acquire any proprietary rights thereto by reason of the
Agreement, and HSAC shall have no rights to use such names, marks, logos,
variations or titles except at the times and in a manner expressly approved by
Operator.
10. Reproduction of Manuals and Documentation. Subject to the
provisions of Section 9, Operator shall have the right, at no additional charge,
to reproduce solely for its internal use, all manuals and documentation
furnished by HSAC relating to the HSAC Services, regardless of whether such
manual or documentation is copyrighted by HSAC. All copies of manuals or
documentation made by Operator shall include any proprietary notice or stamp
that has been affixed or is requested to be affixed by HSAC.
11. Indemnity.
11.1 HSAC agrees to indemnify and save harmless Operator, and
Operator agrees to indemnify and save harmless HSAC, from any liabilities,
lawsuits, penalties, claims, or demands finally awarded or settled (including
the costs, expenses, and reasonable attorneys' fees on account thereof) that may
be made by any third party for injuries, including death to persons, resulting
from the indemnifying party's negligent or willful acts or omissions or those of
persons employed by the indemnifying party, its agents, or subcontractors. HSAC
agrees to defend Operator, at Operator's
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request, and Operator agrees to defend HSAC, at HSAC's request, against any such
liability, claim, or demand. Operator and HSAC respectively agree to notify the
other party promptly of any written claims or demands against the indemnified
party for which the indemnifying party is deemed responsible hereunder.
11.2 HSAC agrees to indemnify and save harmless Operator from
all Third Party Threats (defined in Section 12 below) and claims arising as a
direct result of HSAC's management, operation and control of the HSAC Services.
12. Limitation of Liability and Disclaimer of Warranty.
12.1. In no event shall HSAC or Operator be liable to one
another for (a) any special, indirect, incidental, punitive, or consequential
damages, including loss of profits arising from or related to the breach of this
Agreement, even if HSAC or Operator had been advised of the possibility of such
damages; (b) damages (regardless of their nature) arising from any Third Party
Threats (defined below) for any delay or failure by HSAC or Operator to perform
its obligations under this Agreement due to any cause beyond their respective
reasonable control; or (c) claims made a subject of a legal proceeding against
HSAC or Operator more than twenty-four (24) months after any such cause of
action first arose. HSAC and Operator specifically acknowledge and agree to the
limitations on their respective liability to Data Subscribers as they relate to
issues of lack of privacy and security, the possibility of viruses, offensive
content, loss/theft of passwords, unauthorized access by hackers, etc. (i.e.,
"Third Party Threats"), as set forth in the End User Agreement (a copy which may
be attached hereto as EXHIBIT H). HSAC and Operator further agree that all such
liability limitations apply to Operator and its software systems and System as
well. Operator and HSAC hereby waive the assertion of any claims relating to,
and release each other from any liability for, any and all claims associated
with or related to such Third Party Threats. Operator and HSAC agree to exercise
their best efforts to maintain the secrecy of (and occasionally rotate) their
software passwords, and notify the other if they become aware that their system
passwords may be or have become compromised. HSAC will maintain appropriate
policies of general liability, casualty and workers compensation insurance to
cover HSAC's employees against injury to themselves or others and casualty
accidents while working on Operator's premises/System. All such HSAC policies
shall name Operator as an additional insured to the extent HSAC may legally do
so. Operator shall furnish HSAC with a list of its System offices and head-ends
for HSAC's insurance brokers.
12.2 HSAC'S AND OPERATOR'S LIABILITIES TO ONE ANOTHER UNDER
THIS AGREEMENT (WITH THE EXCEPTION OF OPERATOR'S LIABILITY TO HSAC FOR ANY
TERMINATION FEE UNDER SECTION 5.2(ii)), WHETHER UNDER CONTRACT LAW, TORT LAW, OR
OTHERWISE, SHALL BE LIMITED TO THE LESSER OF (a) THE AVERAGE MONTHLY OPERATOR'S
SHARE OF GROSS REVENUES (OR HSAC'S SHARE, AS THE CASE MAY BE) FOR THE MONTH IN
WHICH THE LIABILITY AROSE, OR EQUIVALENT THEREOF, FOR HSAC SERVICES PERFORMED
UNDER THIS AGREEMENT FOR THE ACTUAL NUMBER OF MONTHS DURING WHICH THE PROBLEM
EXISTED; OR (b) THE ACTUAL AMOUNT OF MONEY DAMAGES INCURRED BY OPERATOR OR HSAC.
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12.3 Nothing in this Section 12 shall be interpreted to limit
the indemnity obligations of the parties set forth in Section 11 above.
13. Default and Termination. If either party defaults in any material
respect in the performance of any of its material obligations hereunder and such
default shall not be cured within thirty (30) days after written notice thereof
from the other, or if either party becomes insolvent, or if a petition under any
bankruptcy act shall be filed by or against either party (which petition, if
filed against any affiliate of either party, shall not have been dismissed
within thirty (30) days thereafter), or if either party executes an assignment
for the benefit of creditors, or if a receiver is appointed for the assets of
either party, or if either party takes advantage of any insolvency or any like
statute (any of the above acts are hereinafter called "Event of Default"), then
the other party may at its option, in addition to any and all other rights which
party may have, declare a default and terminate this Agreement by giving written
notice to the other party within ten (10) business days from the date of the
occurrence or maturity of any Event of Default. Notwithstanding any other
provision of this Agreement, neither HSAC or Operator will be deemed in default
of this Agreement to the extent any delays in their respective performance are
reasonably and demonstrably attributable to the actions or inaction of the other
or events and circumstances outside of their reasonable control, including, but
not limited to, the actions or negligence of third party vendors. For example,
HSAC will not be deemed in default of this Agreement if (i) a Regional Xxxx
Operating Company ("RBOC") or other telephone network provider (a "telco") is
late in installing T-1 or other transport from a System head-end to the ISP
portal following the submission of a timely order by HSAC, or (ii) an equipment
vendor (e.g., COM21) fails to meet its delivery deadlines with respect to HSAC
Network Equipment or Home Equipment Packages.
14. Independent Contractor. All work performed by HSAC in connection
with the HSA Service described in this Agreement shall be performed by HSAC as
an independent contractor and not as the agent, employee, joint venture or
partner of Operator. All persons furnished by HSAC shall be for all purposes
solely HSAC's employees or agents and shall not be deemed to be employees of
Operator for any purpose whatsoever. HSAC shall furnish, employ, and have
exclusive control of all persons to be engaged in performing services under this
Agreement and shall prescribe and control the means and methods of performing
such maintenance services by providing adequate and proper supervision. Nothing
contained herein shall be deemed to create a relationship of joint venture,
associates, principal and agent or partnership between the parties hereto and
neither party shall hold itself out of the contrary. Each party is acting as
principal hereunder.
15. Force Majeure. Neither party shall be responsible for any Service
Failure or delay or failure in performance of any part of this Agreement to the
extent that such delay or failure is caused by fire, flood, explosion, war,
lightning, embargo, government requirement, riots or civil commotion, acts of
civil or military authority, strikes or other labor unrest, power surges, acts
or omissions of carriers/utilities, acts of God, or other similar causes or
contingencies beyond its reasonable control (i.e., a "Force Majeure"); provided,
that neither party shall relieved under this Section 15 from its obligations
under Sections 3.5 and 3.6 hereof with respect to timely repairs (i.e., thirty
(30) days or
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less) of Service Failures caused by such Force Majeure once the condition is
removed. If any such an event of Force Majeure occurs and such event continues
for ninety (90) days or more, the party delayed or unable to perform shall give
immediate notice to the other party, and the party affected by the other's delay
or inability to perform may elect to suspend performance of its allocable
portions or duties with respect to the HSAC Services for the duration of the
condition. The affected party or parties may resume performance of its duties
once the condition ceases, and the term of this Agreement shall by notice be
deemed to be extended for such affected System up to the length of time the
condition endured.
16. Assignment. This Agreement shall be binding on the parties hereto
and their respective successors and assigns; PROVIDED, that each party hereto
shall be permitted, upon 30 days advance written notice to the other, to assign
(by assets purchase or other written agreement, merger, consolidation, sale of
assets, operation of law or otherwise) its rights, title and interest under this
Agreement to a successor entity which specifically assumes the assignor's
rights, title and interest under this Agreement prior to or contemporaneous with
the closing of such assignment. No such assignment shall relieve a party of its
obligations hereunder. All assignments in contravention of this section shall be
null and void. Both HSAC and the Operator will be permitted to collaterally
assign and grant a security interest in its contract rights and
tangible/intangible property interests (including the HSA Network Equipment and
Home Equipment Packages) arising under this Agreement for purposes of securing
financing from its commercial lenders.
17. Amendments, Modifications, or Supplements. Amendments,
modifications, or supplements to this Agreement shall be permitted, provided all
such changes shall be in writing signed by the authorized representatives of
both parties, and all such changes shall reference this Agreement and identify
the specific articles or sections of this Agreement that is amended, modified,
or supplemented.
18. Notices. All notices, demands, or other communications herein
provided to be given or that may be given by any party to the other shall be
deemed to have been duly given when made in writing and delivered in person, or
upon receipt, if (a) deposited in the U.S. mail, postage prepaid, certified
mail, return receipt requested; or (b) sent by nationally recognized overnight
courier in a postpaid wrapper, and addressed as follows:
Notices to HSAC: HIGH SPEED ACCESS CORP.
0000 X. Xxxxxxxxxxx Xxx., Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxx Xxxxxxx, Xx., President
Phone: 000-000-0000, fax: 2050
With a copy to: HIGH SPEED ACCESS CORP.
0000 Xxxx Xxxxxx Xxx., Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, General Counsel
Phone: 000-000-0000, fax: 3101
Notices to Operator: As set forth in the Adoption Supplement
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or to such address as the parties may provide to each other in writing from time
to time.
19. Obligations to Survive Termination. The parties recognize and agree
that the obligations of the other party under Sections 9, 11 and 12 of this
Agreement shall survive the termination or expiration of this Agreement.
20. Governing Law. The validity, construction, interpretation, and
performance of this Agreement shall be governed by and construed in accordance
with the laws (without reference to the conflicts of laws rules) of the State of
Delaware.
21. Headings. The headings contained in this Agreement are for
convenience of reference only and are not intended to have any substantive
significance in interpreting this Agreement.
22. Waivers. Any waiver by either party of any breach of any term or
condition hereof shall be effective only if in writing and such writing shall
not be deemed to be a waiver of any subsequent or other breach, term or
condition of this Agreement.
23. Authority; No Conflicting Agreement. The officers signing on behalf
of the parties to this Agreement acknowledge that they have read and understand
this Agreement and hereby warrant that each has full power and authority to
execute this Agreement and bind the respective parties hereto. Each party
further represents that it is not bound by any other agreement that would
prevent full performance of this Agreement.
24. Y2K. Operator and HSAC represent and warrant to the other that each
has taken or is taking all actions necessary and appropriate to assure that
there shall be no material adverse change to its respective business or
electronic systems or material interruptions in the operation and delivery of
HSAC Services as provided in this Agreement (aside from normal data packet
delays, distortions, and losses (i) on the Internet backbone, (ii) during
transport to the Internet backbone on telecommunication lines leased from a
third party, or (iii) during transport from Data Subscribers to HSAC over a
coaxial cable or fiber optic line) by reason of the advent of the year 2000,
including, without limitation, that all its respective computer-based systems,
embedded microchips and other data processing capabilities have been designed or
modified and fully tested in such a manner that such computer-based systems,
embedded microchips and other data processing capabilities will not generate any
invalid and/or incorrect date-related results or cause any of the problems
commonly referred to as "Year 2000 problems" and will, without interruption or
manual intervention, continue to operate consistently, predictably and
accurately and in accordance with all of the requirements of
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this Agreement, including without limitation, meeting all specifications and/or
functionality and performance requirements, when used during any year prior to,
during or after the calendar year 2000. Neither Operator or HSAC warrant that
interruptions in HSAC Services will not occur due to the network or systems
failures of other parties, including utilities and phone services, caused by
"Year 2000 problems."
25. Franchise Authority. Operator represents and warrants to HSAC that
to the best of its knowledge after due inquiry Operator's cable TV franchise
agreement with the state or local governmental agency with authority over the
System authorizes Operator (and HSAC) to offer the HSAC Services, or does not
prohibit Operator or HSAC from offering the HSAC Services. Operator shall use
its reasonable best efforts to obtain any required supplemental or separate
"data over cable" franchise from such governing authority and preserve the
exclusivity of HSAC's rights to provide HSAC Services under any such separate
franchise. Collection and payment of any franchise fees and/or sales taxes will
be handled as described in EXHIBIT E.
26. Regulatory Compliance. HSAC and Operator agree to comply with all
applicable federal, state and local laws and regulations, including specifically
those pertinent regulations promulgated by the public utilities commission in
Operator's state (or where the System is situated) and the Federal
Communications Commission, which may govern or affect the provision of HSAC
Services to Data Subscribers covered by this Agreement.
27. Arbitration. Any dispute arising out of or relating to this
Agreement or the breach, termination or validity hereof, shall be finally
settled by arbitration conducted expeditiously in accordance with the American
Arbitration Association Commercial Arbitration Rules, without the requirement
that the American Arbitration Association or its arbitrator (the "Arbitrator")
be used. The arbitration shall be governed by the United States Arbitration Act,
9 U.S.C. xx.xx. 1-16, and judgment upon the award rendered by the Arbitrator may
be entered by any court having jurisdiction thereof. The place of arbitration
shall be at a "neutral" location to be mutually agreed upon by the parties to
the arbitration. The Arbitrator is not empowered to award damages in excess of
compensatory damages, and each party hereby irrevocably waives any damages in
excess of compensatory damages as limited by Section 12.2 hereof. The procedures
specified in this section shall be the sole and exclusive procedures for the
resolution of disputes between the parties arising out of or relating to this
Agreement; provided, that a party may seek a preliminary injunction or other
provisional judicial relief if in its judgment such action is necessary to avoid
irreparable damage or to preserve the status quo. Despite such action, the
parties will continue to participate in good faith in the procedures specified
in this Section. All applicable statutes of limitation and defenses based upon
the passage of time shall be tolled while the procedures specified in this
section are pending. The parties will take such action, if any, required to
effect such tolling. Each party is required to continue to perform its
obligations under this Agreement pending final resolution of any dispute arising
out of or relating to this Agreement.
28. Entire Agreement. This Agreement and the Exhibits hereto constitute
the entire agreement between the parties and any parties who have in the past or
who are now representing either
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of the parties hereto, and replaces and supersedes all prior agreements, written
and oral, relating to the subject matter hereof, between the parties to this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
HIGH SPEED ACCESS CORP.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
--------------------------------------
d/b/a
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By:
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Name:
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Title:
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EXHIBIT A
CABLE TELEVISION/AFFILIATE SYSTEMS COVERED BY THIS AGREEMENT
System Install Beta Launch
To be completed
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EXHIBIT B
SYSTEM DATA REQUIREMENTS
(TECHNICAL REQUIREMENTS FOR RF PLANTS)
A. HSAC will inspect and characterize the two-way cable plant to
determine its feasibility for digital data transmission. This characterization
will focus on the integrity of the cable plant against interference, intermod
distortions, ingress, system noise, and transient/impulse noise.
B. HSAC has established guidelines for Operators wishing to implement
digital data transmission on their cable plant. The guidelines will recommend
CATV plant and equipment configurations to achieve a desired level of signal
reliability and quality in digital data transmission.
C. Operator's RF/cable network must continuously meet the following
minimum performance standards, measured at designated end-of-line test points
throughout the cable plant. Although constituting on a sample of pertinent
issues, the following test points should be selected such that they are
representative of all areas of the cable distribution system.
D. A written report detailing network deficiencies and recommendations
("Attainment Measures") for improvement will be furnished to the Operator.
ANALOG PERFORMANCE PARAMETERS
1) IN-BAND FREQUENCY AMPLITUDE RESPONSE - Frequency response of the cable
network indicates the variation of system gain as a function of frequency
measured in dB. As a general guideline the amplitude characteristic shall be
within a range of +/- 2 dB from 0.75 MHz to 5.0 MHz above the lower boundary
frequency of a cable television channel, referenced to the average of the
highest and lowest amplitudes within these frequency boundaries.
2) VISUAL CARRIER-TO-NOISE RATIO (CNR) - The guideline that HSAC establishes for
CNR values is in accordance with FCC specification 76.6059(a)(7) that defines
the ratio of RF visual signal level to system noise to be not less than 43 dB.
3) DISTORTIONS - Distortions are defined as the ratio of visual signal level to
RMS amplitude of any coherent disturbances such as intermod products, second and
third-order distortions or discrete frequency interfering signals not operating
on proper offset assignments. The guideline which HSAC has established is
defined by FCC specification 76.605 (a)(8) and specifies the following: (i) the
ratio of visual signal level to coherent disturbances shall not be less than 51
dB for non-coherent channel cable television systems, when measured with
modulated carriers; and (ii) the ratio of visual signal level to coherent
disturbances which are frequency-coincident with the visual carrier shall not-be
less than 47 dB for coherent channel cable systems, when measured with modulated
carriers and time-averaged.
4) HUM MODULATION - This is the variation in the amplitude of a XX xxxxxxx at
the power line frequency of 60 Hz or its harmonics induced as a result of
passing through the cable network. The HSAC guideline is defined by FCC
regulation 76.605(a)(10), which requires that the peak-to-peak variation in
visual signal level caused by undesired low frequency disturbances (hum or
repetitive transients) generated within the system, or by inadequate low
frequency response, shall not exceed 3 percent.
5) INGRESS AND IMPULSE NOISE LEVELS - Ingress is the level of unwanted ambient
signals leaking into the CATV plant as a result of such things as imperfect
shielding, loose connectors, cracked cabling and other plant defects. Impulse
noise has different spectral characteristics, which invades spectral power
densities as the frequency increases. Causes of impulse noise include AC arcing
of electric motors, power utility transformers, electrostatic discharges,
lightning and
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other transient sources that can produce a loss of synchronization on digital
transmission systems. In characterizing plant performance, HSAC guidelines
dictate that impairments should be maintained, collectively, at a nominal
averaged level not to exceed -50 dBc with respect to video carriers, while
recognizing that noise becomes visible in the video domain at -55 dBc and will
thus cause deterioration to optimum synchronization of the data carrier.
Further, to maintain optimal RF downstream efficiency, HSAC specifies
impairments that cause end-of-line Carrier-to-Noise (CNR) performance to drop
below a minimum constant value of 43 dB is unacceptable and will result in
interrupted high-speed data access service to the customer.
6) GROUP DELAY RESPONSE DISTORTION - No standards are currently defined that
specify minimum performance for this parameter. HSAC guidelines however specify
that as a general rule, delay response over the return path should match that
over the forward path. It is recommended that the return frequencies be located
6 MHz from either the upper of lower limits of the return bandwidth. This will
help minimize any group delay associated with the roll-up or roll-off of the
return spectrum.
7) RETURN PLANT VISUAL CARRIER-TO-NOISE RATIO (CNR) - HSAC guidelines specify a
minimum 36 dB visual CNR over the return plant, defining 40 dB CNR as the more
ideal threshold parameter. The expected higher level of noise sources in the
return path is mitigated by the reduction of video and data carriers on the
upstream.
8) RETURN IN-BAND FREQUENCY AMPLITUDE RESPONSE DISTORTION - HSAC guidelines are
consistent with FCC specification 76.605(a)(6), requiring that the amplitude
characteristic of a video carrier in the return direction to be within a range
of +/- 2dB from 0.75 MHz to 5.0 MHz should also apply to reverse video
transmission.
9) DISTORTION - HSAC expects that the level of CSO and CTB distortions on the
return path* will be generally lower than the forward path, due to the limited
number of RF video carriers interacting with each other in this sub-low
frequency spectrum. To maintain the integrity of the return path data
transmission, HSAC would generally not expect to see more than two video
carriers in this spectrum. Therefore, HSAC guidelines for distortions in the
return path follow the same FCC specification 76.605 (a)(8) which applies to the
forward path, which is not less than 51 dB for standard CATV systems (modulated
carriers and time averaged).
10) SIGNAL AVAILABILITY- HSAC in cooperation with the system partner will
jointly maintain the same goal of providing reliable, uninterrupted signal
transport over both the forward and reverse* plant. Cable maintenance practices
that routinely interrupt service must be discouraged, and HSAC requests that the
Operator provide it with advance notice of any interruptive testing or
maintenance practice that could result in the disruption of signal flow in
either the forward or return path. This advance notice is required in order that
proper customer service levels can be adequately maintained. In extreme cases,
high speed data customers can be notified of possible service disruptions.
11) TESTING - HSAC and Operator jointly agree to periodically test the forward
and return* RF paths of the CATV system. Such testing is required to document
performance parameter thresholds to the extent that high-speed data services are
not adversely affected. In the absence of such routine testing, Operator agrees
to notify HSAC of any adverse irregular signal level condition on the plant,
intermittent or continuous, which persists longer than a 12-hour interval.
* Applies only to 2-way cable plant high speed data solution. Single path, 1-way
hybrid high speed data solutions need not adhere to these specifications.
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EXHIBIT C
ESCALATION PROCEDURES FOR TROUBLESHOOTING
TIER I SUPPORT
Tier I customer service/OnLine Help Desk is the "front line" of the HSA
Corp./MSO product offering. The responsibility of Tier I service is to provide
information to the customer, initiation and changes of service, billing
inquiries and some low-level trouble shooting, and frequently asked questions.
Tier I will include the following:
o Start, stop and changes of service.
o Determination of service eligibility.
o Product information
o Provisioning and initial setup script - IP address generation, logins,
email setup, password capturing, etc.
o Service installation and dispatch scheduling and setup.
o Trouble ticket status reporting.
o Initial problem resolution. Tier I will include reasonably simple scripted
troubleshooting (based on script provided by HSCA) and cable network
related problem diagnosis.
o Billing and pricing questions.
TIER II SUPPORT
Tier II customer service is the diagnostic and problem resolution layer of the
HSAC/MSO customer service offering. In this layer, the symptoms of the problems
are understood and recorded, the problem(s) are determined and action is taken
to resolve problem(s). This group will have advanced technical troubleshooting
skills and tools. Support from this group will include:
o Desktop OS support.
o HSAC network information.
o HSAC delivered software support.
o Problem diagnosis and resolution.
o Build knowledge base and on-line information systems.
o Handle Wed and E-mail support.
TIER III SUPPORT
Tier III will provide customer service and network operations support. This
group will handle any call not able to be resolved by Tier II. In addition to
resolving the more difficult customer problems, this group will be doing ongoing
network monitoring.
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EXHIBIT D
NON-TRANSFERABLE COMPLEMENTARY ACCOUNTS
FOR THE HSA DATA NETWORK
[to be determined]
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EXHIBIT E
OPERATOR'S SHARE OF GROSS REVENUES.
E.1 Base Payments for HSAC Services. During the term of this
Agreement, HSAC will pay to the Operator an amount (i.e., the "Operator's
Share"), equal to the percentages, by service category of Gross Revenues, Gross
Profits or Net Revenues, as shown in TABLE A below.
TABLE A
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SERVICE OPERATOR'S SHARE
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One/Two Way Cable Modem 50% of Gross Revenues
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Local Content (Section 4.3) 50% of Gross Profits
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Optional Services (Section 4.4) 50% of Gross Profits unless otherwise agreed
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Dial Up (Section 4.5) 15% of Net Revenues
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(As used herein, "HSA's Share" shall mean 1.00 minus the Operator's Share.)
E.2 Data Subscriber Refunds. HSAC's local management will have
the discretion to offer reasonable credits/refunds of Gross Revenues to Data
Subscribers resulting from Out-of-Compliance Events, which amounts shall be
deducted from the Operator's Share. The determination of when Out-of-Compliance
Events occur may be monitored and reported by HSAC to the Operator on a monthly
basis. As used herein, an "Out-of-Compliance Event" occurs when the HSAC
Services are repeatedly rendered inoperable or unusable due to the System
failing to meet System Data Requirements or to repeated Service Failures
traceable to the Operator's RF plant/System (and such is not corrected within
the period specified in Section 3.5 of the Agreement) other than failures caused
by a Force Majeure.
E.3 Billing; Sales Taxes; Franchise Fees.
E.3.1 Operator at its option elect to implement and
operate a billing systems and invoice Data Subscribers directly for all HSAC
Services, in which case HSAC shall invoice Operator (with a copy to NCTC)
monthly, in advance, for all HSAC Services to be provided to Data Subscribers,
by delivering to Operator a statement (a "Statement") showing the computation of
Operator's Share (derived from the total number of Data Subscribers and Gross
Revenues, Gross Profits, or Net Revenues) and corresponding HSAC Share, in
accordance with this EXHIBIT E..
E.3.2 Unless Operator elects to operate the billing system
for Data Subscribers, HSAC will implement and operate the billing system and
invoice Data Subscribers for all HSAC Services, in which case HSAC shall invoice
Data Subscribers monthly, in advance,
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for all HSAC Services to be provided to Data Subscribers, and deliver to
Operator a related Statement.
E.3.3 Except as otherwise provided in Section 25 regarding
franchise taxes, the party electing to invoice Data Subscribers under Section
E.4.1 or E.4.2 above shall bear all risk associated with the collection and
remittance of applicable sales and use taxes and franchise taxes, provided that
HSAC will remit to the Operator for pass-through remittance by the Operator to
the franchise authority (which Operator agrees to do on a timely basis) of any
applicable franchise taxes HSAC collects from Data Subscribers.
E.3.4 Operator shall provide HSAC access (both print copy
and electronically at HSAC's expense) to its Customer Lists and other customer
databases on a confidential basis for the purpose of developing and implementing
a billing system. HSAC and Operator shall work together to develop and implement
an electronic interface between HSAC and Operator for tracking and invoicing
Data Subscribers and vendors. HSAC may at its expense arrange for a data
exchange/software interface to be written and implemented which enables HSAC to
access and interface with Operator's billing system for purposes of updating on
a real-time basis both HSAC's and Operator's records regarding the status of
Data Subscriber accounts so that such accounts may be automatically managed in
the same manner that as Cable Subscriber accounts are managed.
E.4 Settlement; Verification.
E.4.1 Where Operator acts a billing party under Section
E.3.1 above, within forty-five (45) days following the end of each and every
calendar month during the term hereof, Operator shall remit a check to HSAC for
HSAC's Share.
E.4.2 Where HSAC acts a billing party under Section E.3.2
above, within forty-five (45) days following the end of each and every calendar
month during the term thereof, HSAC will deliver to Operator a Statement for
such month and remit a check for same.
E.4.3 HSAC will keep books and records relating to the
Operator's Share in accordance with generally accepted accounting principles,
consistently applied. During the term hereof and for one year thereafter,
Operator, NCTC or their authorized representatives may, at their own expense,
visit HSAC's offices during regular business hours, subject to suitable
protections relating to confidentiality and non-disclosure, to inspect and make
extracts and copies of any such books and records in order to determine the
accuracy of the Statements. If any audit of Statements undertaken by Operator or
NCTC in accordance with this Section E.3 discloses a five percent (5%) or
greater discrepancy from the Statement(s) generated by HSAC, HSAC shall pay such
amounts to the affected Operator and reimburse such Operator or NCTC for all
costs incurred by Operator in connection with such audit.
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E.5 Subscriber Rates. HSAC and Operator agree that Data
Subscriber rates will be reviewed and subject to a rate increase or decrease
based on market factors. Initially, Data Subscriber rates for base HSAC Services
are as follows:
RESIDENCE CABLE 500 Kbps* downstream $ 39.95/month
RESIDENCE CABLE 1 Megabit* downstream $ 99.95/month
BUSINESS CABLE 500 kbps* downstream $ 195/month
BUSINESS CABLE 1 Megabit* downstream $ 500/month
*all bandwidth speeds are approximate, and will vary depending upon a multitude
of factors, including RF Plant condition, whether the System is One-Way or
Two-Way, etc. Upstream rates may or may not be synchronous.
All cable modem rentals: $9.95/month
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EXHIBIT F
LIST OF AUTHORIZED OPERATOR
CONTACT PERSONNEL
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EXHIBIT G
LIST OF AUTHORIZED HSAC CONTACT PERSONNEL
Network Operations Center/Call Center
0000 X. Xxxxxx Xxx, Xxxxx 000, Xxxxxxxxxx, XX 00000
Main Corporation Phone No.: 000-000-0000 or 000-000-0000
NOC Console/Office (Louisville) 000-000-0000
Phone Pager #s
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Xxxx Xxxx* 000-000-0000 000-000-0000
Xxxxxxx Abounder 000-000-0000 000-000-0000 (PIN 1106620)
Xxxx Xxxxxxx 000-000-0000 000-000-0000 (PIN 1273377)
OnLine Help Desk 000-000-0000 or 000-000-0000
Xxxxxx Xxxxxxxx 000-000-0000
Head-End/RF Troubleshooting
Xxx Xxxx* 000-000-0000 000-000-0000 (PIN 1361615)
Project Management/Activation Scheduling
Xxx Xxxx 000-000-0000
Xxxx Xxxxxx 000-000-0000
System Engineering
Xxxxx Xxxxxxxx 000-000-0000
Xxxx Xxxxxxxxx 000-000-0000
000-000-0000
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EXHIBIT H
CUSTOMER END USER/INTERNET SERVICES AGREEMENT
See attached form of Internet Services/Customer End User Agreement.
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