Exhibit 10.13
WORLDGATE AFFILIATION AGREEMENT
THIS AGREEMENT DATED _________________, IS BETWEEN CITY OF TACOMA, TACOMA
PUBLIC UTILITIES, DBA CLICK! NETWORK , WITH ITS PRINCIPAL PLACE OF BUSINESS
AT 0000 XXXXX 00XX XXXXXX, XXXXXX, XX 00000-0000 , (HEREINAFTER REFERRED TO
AS "AFFILIATE") AND WORLDGATE COMMUNICATIONS, INC., WITH ITS PRINCIPAL PLACE
OF BUSINESS AT: 0000 XXXXXXX XXXXX, XXXXX 000, XXXXXXXX, XX 00000
(HEREINAFTER REFERRED TO AS "WG").
AFFILIATE AND WG (COLLECTIVELY THE "PARTIES") HEREBY AGREE AS FOLLOWS:
1. DEFINITIONS:
The following terms, abbreviations and definitions used in this
Agreement shall have the meanings set forth herein below:
(a) "SYSTEM(S)" means Affiliate's television distribution system(s) for
one or more geographical service areas, as from time to time are identified in
Exhibit A.
(b) "PROVIDER(S)" means one or more entities providing Subscriber
Accessible Content for Subscriber access on or as part of the WorldGate-SM-
Service.
(c) "SUBSCRIBER" means a person or entity gaining access to the
WorldGate-SM- Service as part of Affiliate's System.
(d) "SUBSCRIBER ACCESSIBLE CONTENT" means the programs, displays,
data, information, and other content (including without limitation, the
Internet) which, from time to time, has been licensed or is otherwise
provided by WG and other Providers for access by Subscribers on or as part of
the WorldGate-SM- Service.
(e) "SUBSCRIBER TRANSACTION" means any instance whereby a Subscriber
uses or otherwise accesses the WorldGate Service.
(f) "TERM" means the term of this Agreement which shall commence on the
date hereof, and shall terminate seven (7) years from the date set forth above,
except if renewed or terminated earlier as provided herein.
(g) "WORLDGATE-SM- PLATFORM" means the hardware and software
components to be supplied by WG to Affiliate and used by Affiliate in
connection with Affiliate's System to provide Subscriber access to the
WorldGate Service hereunder.
(h) "WORLDGATE-SM- SERVICE" means an interactive Internet access
service which utilizes the WorldGate Platform in connection with the
Affiliate's System(s) for addressably transmitting downstream application
information (including Subscriber Accessible Content) to Subscribers in the
System's channels (vertical blanking intervals, full video channels or MPEG
data stream) and, either utilizing separate rf sub-bands of the System's
current allocated
spectrum and/or a suitable phone-network based return facility for transmitting
upstream communication.
2. AUTHORIZATION OF RIGHTS, WORLDGATE PLATFORMS AND SYSTEM:
(a) WG hereby authorizes Affiliate, during the Term hereof, to provide
to Subscribers access to and use of the WorldGate Service, via the WorldGate
Platforms in connection with Affiliate's System, in accordance with the terms
and conditions of this Agreement.
(b) From time to time during the term hereof WG shall provide to
Affiliate and Affiliate shall acquire by purchase, lease or such other
acquisition transaction as may be agreed in writing by the Parties, certain
systems and the components of the WorldGate Platform as are further identified
in Exhibit B. Certain terms and conditions with respect to such acquisition as
well as the associated installation, maintenance and warranty of the WorldGate
Platforms are also set forth in Exhibit B.
(c) WG shall make available to Subscribers such Subscriber Accessible
Content as may, from time to time, be determined by the Parties. Affiliate,
however, acknowledges that the Providers of Subscriber Accessible Content may,
from time to time, and for any reason make additions to, deletions from and/or
otherwise modify Subscriber Accessible Content, and accordingly, WG also
reserves such right. Affiliate further acknowledges that elements of such
Subscriber Accessible Content, such as the Internet, may include materials and
information of unreliable, uncertain or even objectionable origin, nature and/or
character, and that WG expressly disclaims any responsibility for or liability
associated with Subscriber's access to or use of the Subscriber Accessible
Content.
(d) Affiliate may request modifications of or additions to certain user
interface screens or other aspects of the WorldGate Platform and/or the
Subscriber Accessible Content. WG agrees to work with Affiliate to accommodate
such requests to the extent that WG agrees such modifications are viable and
will enhance the WorldGate Service.
(e) Affiliate shall provide a suitable System and facilities associated
therewith as further identified in Exhibit A. Affiliate may, from time to time,
add additional Systems, in which event Affiliate shall use commercially
reasonable efforts to provide WG with at least ninety (90) days advance written
notice of any such proposed additions to the System, and upon the agreement of
the Parties with respect to the proposed additions this Agreement shall be
promptly amended to cover the proposed additions by the execution of
supplemental and/or superseding Exhibit A(s) setting forth the agreed and then
current information relevant to such Systems. Furthermore and from time to time,
Affiliate may make other changes to the Systems and facilities comprising the
same and/or WG may make changes to the WorldGate Platform and/or the WorldGate
Service. In the event such changes materially affect the performance of the
WorldGate Service, the Party making the changes shall use all reasonable efforts
to provide the other Party with as much advance notice of the same as is
reasonably possible, and the Parties shall reasonably cooperate with each other
to minimize any resulting detrimental effect from such changes.
(f) The installation, maintenance and support of such Systems and
associated facilities shall be the sole responsibility of Affiliate and its
suppliers. WG (and its contractors),
however, requires both physical and electronic access to the System and the
WorldGate Platform connected thereto to perform its obligations hereunder.
Affiliate shall provide WG (and its contractors) reasonable physical access upon
advance notice as well as electronic access (via modem, the Internet and other
electronic means) to such Systems (including the facilities and technical
personnel associated therewith) and to the WorldGate Platforms connected or to
be connected thereto, as required to perform its obligations hereunder,
including without limitation, the installation, support and service of the
WorldGate Platform, as well as the reporting and invoicing of Subscriber
Transactions.
3. RESERVATION OF RIGHTS:
(a) Affiliate agrees that it is the essence of this Agreement that,
without the specific written consent of WG, or except as otherwise set forth
herein: (i) the WorldGate Platform shall not be modified by Affiliate in any
manner; (ii) the WorldGate Platform shall not be utilized by Affiliate to
provide services other than the WorldGate Service; and (iii) Affiliate shall not
authorize any other party to do any of the acts forbidden herein (the foregoing
subparagraphs (i)-(iii)) are collectively referred to herein as the "Prohibited
Acts").
(b) Affiliate shall immediately notify WG upon the occurrence or likely
occurrence of any Prohibited Acts of which it becomes aware.
(c) All licenses, rights and interest in, to and with respect to the
WorldGate Platform, the Subscriber Accessible Content, the elements, parts and
derivations thereof (including without limitation the writings, images,
displays, electronic reproductions, user interfaces, sounds, data, information
and other works embodied therein, derived therefrom or ancillary thereto, and
the media of reproduction, performance or exhibition thereof), as well as the
intellectual property rights related thereto, not specifically granted herein to
Affiliate or to Subscribers, shall be and are expressly and entirely reserved by
WG and the applicable Providers. The rights and licenses granted to Affiliate
and the Subscribers hereunder do not include any right to sublicense any third
party, in whole or in part.
4. MARKETING AND PROMOTION OF THE WORLDGATE SERVICE: The Parties agree to
diligently market and promote the WorldGate Service to all of Affiliate's
customers which are or become part of Affiliate's System(s). In particular and
without limitation the Parties agree to provide such marketing and promotional
services as are further identified in Exhibit C. The Parties recognize that each
other's trademarks and brands are significant assets of the Party owning the
same and that any use of such trademarks and brands shall only be with the
other's prior consent and then only in a manner consistent with that typically
used with other quality and valued trademarks and brands. The XX xxxxx shall be
prominently displayed in all consumer communications promoting the WorldGate
Services such as, but not limited to, marketing materials, advertisements,
direct mail pieces, xxxx stuffers, price lists, etc. All marketing materials and
TV spots developed by Affiliate promoting the WorldGate Services, and all other
uses of the XX xxxxx shall be approved by WG in writing prior to initial
dissemination. The XX xxxxx may be promoted with Affiliate's xxxx with WG's
prior written approval.
5. PAYMENTS, ACCESS FEES AND TAXES:
(a) As consideration for the rights granted and services performed
hereunder with respect to the WorldGate Service, Affiliate shall pay to WG
Subscriber Access Fees as more
fully set forth in Exhibit D. The Parties acknowledge that changes may be
required in such Subscriber Access Fees as a result of material changes in the
services and systems which are agreed to be offered hereunder (including without
limitation, the addition of optional services, etc.) or in the event of changes
in the regulatory environment governing such services and systems which
materially affect the cost or such services and systems to WG. In such event the
Parties agree to negotiate in good faith any resulting changes to the Subscriber
Access Fees hereunder.
(b) Notwithstanding the required payment of a Subscriber Access Fee as
described above, the Parties agree and acknowledge that Affiliate is free to
determine what fees, if any, it charges its customers with respect to access to
the WorldGate Service and/or any Subscriber Transactions.
(c) Except as expressly stated, all payments and fees due to WG
hereunder, including without limitation the Subscriber Access Fee, are net of
all duties, franchise fees and taxes (including interest and penalties on any
such amounts) now or hereafter imposed or based upon the licensing, rental,
purchase, shipment, delivery, transmission, exhibition, possession, or use of
the WorldGate Platform, the access to any Subscriber Accessible Content, or any
transfer of technology hereunder, but excluding however any taxes assessed upon
any of WG's income or personal property (collectively "Taxes"). Affiliate has
advised WG that licensing and/or registration fees may be due for doing business
in the State of Washington and the City of Tacoma in the aggregate amount of
approximately $97.00, and WG agrees to pay this amount if so required by the
governmental authorities in these jurisdictions. WG agrees to register with the
City of Tacoma and to pay all applicable City of Tacoma taxes. Provided,
however, if the City's taxes, tax rates, franchise fees and/or license fees are
amended or adopted so to increase above the current 0.0048% of gross income,
then Affiliate agrees to reimburse WG to the extent of such increase.
(d) Except for Subscriber Access Fees or as otherwise directed by WG in
writing, all payments hereunder, including without limitation the purchase price
of the components of the WorldGate Platform shall be made promptly at the net
invoice price (i) in cash before shipment, or (ii) by establishing a confirmed,
irrevocable letter of credit in form and substance and with a primary bank
satisfactory to WG, payable against delivery of a site draft, xxxx of lading or
other similar document requested by WG, or (iii) upon written credit approval by
WG, within thirty (30) days after the receipt of an invoice for the same.
Subscriber Access Fees and such other payments as are directed in writing by WG
are due within twenty (20) days of the receipt of invoice for the same. Interest
shall accrue on all amounts not paid when due at a rate equal to the lesser of
twelve (12%) percent per annum or any maximum rate imposed under applicable laws
and regulations. Payments shall not be deferred or subjected to setoff by
Affiliate. Payments may not be suspended and shall continue during the pendency
of any dispute hereunder. All payments to be made to WG shall be in the currency
of the United States unless otherwise agreed in writing by the parties. WG
reserves the right to change or limit the amount or duration of any payment
credit terms which may be extended to Affiliate hereunder in the event of any
change in the credit worthiness of Affiliate as determined by WG in its sole
discretion.
6. STATEMENTS AND REPORTS: To afford determination and/or verification of the
Subscriber Access Fees due hereunder WG shall provide to Affiliate an accounting
statement and report within twenty (20) days after the end of each calendar
month in which the WorldGate
Service is distributed hereunder. Said statement shall include at least the
following information to the extent applicable: the number of Subscribers, the
type of Subscriber accounts and the number of such type of accounts, the
Subscriber Transaction time, and the total amount due for all Subscriber
Transactions and Subscriber access to the WorldGate Services hereunder. Such
information may be provided electronically by access to computer terminals
associated with the WorldGate Platform and/or in connection with a third party
standard billing interface. Affiliate acknowledges that WG requires access to
records and information relating to Subscribers in order to provide such
statements and reports and hereby consents to the same.
7. AUDIT: Affiliate and WG shall keep accurate and complete books and records of
Subscriber Transactions and accounts hereunder, and any required adjustments
thereto. Subject to the confidentiality provisions contained herein Affiliate
and WG may, not more than once during each calendar year and upon at least
thirty days prior written notice, at their expense and during regular business
hours, have the right to audit all such books and records of the other
pertaining to the Subscriber Transactions occurring over Affiliate's System.
Such audits shall be conducted by a nationally recognized, independent public
accounting firm chosen by the auditing Party on the auditing Party's behalf. The
audited Party agrees to fully cooperate with auditing Party's representatives
and/or designees, and shall provide such representatives and/or designees with
an office or adequate space in which to facilitate any audit of such books
and/or records. If an audit or checking reveals a discrepancy in the Access Fee
owed for the audit period, WG and Affiliate agree to make prompt adjustments of
such accounts along with any required credits or payments associated therewith.
8. REPRESENTATIONS AND WARRANTIES OF THE PARTIES:
(a) Each of the Parties represents and warrants that (i) it has the
authority and power to enter into this Agreement and to perform its obligations
hereunder; and (ii) the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
and are deemed to be valid, binding and enforceable obligations.
9. INDEMNIFICATION:
(a) WG shall indemnify Affiliate against (i) any award of damages and
costs made against Affiliate by a final judgment of a court of competent
jurisdiction in any such action, insofar as the same are based on a claim that
the WorldGate Platform infringes any United States patent, and (ii) any
settlements or compromises approved by WG as described below. WG shall control
the defense of any such action including appeals, and all of negotiations
thereof, including the right to effect any settlement or compromise. In case the
use of the WorldGate Platform is, in any action, held to constitute such an
infringement and the use thereof is enjoined, WG shall, at its option and
expense (x) procure for Affiliate the right to continue using the WorldGate
Platform, (y) replace or modify the same so that it becomes non-infringing and
performs the same service with substantially the same quality, or (z) authorize
Affiliate to return the effected WorldGate Platform and provide Affiliate with a
refund of the purchase price, less an allowance for past use prorated based upon
the initial term of this Agreement. The above indemnity shall not apply to and
WG shall have no liability for any claim
of infringement based on: (1) any use of other than a current unaltered release
of the WorldGate Platform; or (2) any access to or use of the Subscriber
Accessible Content; or (3) any combination or use of the WorldGate Platform with
non-WG hardware, software, information, data or content, or (4) any use of the
WorldGate Platform other than is authorized herein. The foregoing states the
entire liability with respect to infringement of any intellectual property
rights with regard to the WorldGate Platform.
(b) Affiliate shall indemnify WG against (i) any award of damages and
costs made against WG by a final judgment of a court of competent jurisdiction
in any such action, insofar as the same are based on a claim of infringement
arising out of: (1) any use of other than a current unaltered release of the
WorldGate Platform; or (2) any combination or use of the WorldGate Platform with
non-WG hardware, software, Subscriber Accessible Content or data, or (3) any use
of the WorldGate Platform other than is authorized herein, and (ii) any
settlements or compromises approved by Affiliate as described below.
(c) In any case in which indemnification is sought hereunder:
(i) The party seeking indemnification shall promptly notify
the other party in writing upon the initiation of any claim or litigation to
which the indemnification relates;
(ii) The party seeking indemnification shall afford the other
party the opportunity to participate in, and, at the option of such other party,
to control, any compromise, settlement, litigation or other resolution or
disposition of any such claim.
(iii) The party seeking indemnification shall fully cooperate
with the reasonable requests of the other party in its participation in, and
control of, any compromise, settlement, litigation or other resolution or
disposition of any such claim.
10. SECURITY: Affiliate shall employ such security systems and procedures as may
be reasonable and commercially feasible to prevent theft, pirating or other
unauthorized access to the WorldGate Service as it is distributed over
Affiliate's System.
11. RENEWAL, TERMINATION AND DEFAULTS:
(a) Upon the expiration of the initial Term hereunder this Agreement
shall be automatically renewed for additional successive two (2) year periods
thereafter unless terminated by either Party upon ninety (90) days written
notice prior to the expiration of such initial Term and any renewal period. The
Subscriber Access Fees payable during any renewal period shall be subject to a
5% escalator, compounded annually, or if lower, WG's then current published
rates.
(b) In addition to all of its other rights and remedies at law and in
equity, either party shall be entitled at its option forthwith, upon giving
notice to the other party, to terminate this Agreement and all licenses granted
hereunder, (i) if said other party shall fail to perform any of its obligations
or undertakings required of it hereunder, or shall be in breach of any of its
warranties or representations herein contained, and shall not have cured or
remedied such failure or breach within sixty (60) days of written notification
thereof; provided, however that with respect to any failure to pay Subscriber
Access Fees such cure period shall be reduced to ten (10) business days from the
date of written notification hereunder; (ii) if a party hereunder
commences a voluntary case under Title 11 of the United States Bankruptcy Code
as now and hereafter in effect, or any successor statute, or any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or a
party consents to the entry of an order for relief in an involuntary case, or to
the conversion of a voluntary case to an involuntary case, under any such law,
or consents to the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property; a party makes any
assignment for the benefit of creditors; a party is unable or fails or admits in
writing of its inability or failure to pay its debts as such debts become due;
or the Board of Directors or other governing body of a party adopts any
resolution or otherwise approves authorization to act upon any of the foregoing,
such action shall be deemed a breach hereunder; or (iii) if any order, judgment
or decree is entered against decreeing the dissolution or split-up of such
party, and such order remains undischarged or unstated for a period in excess of
thirty (30) calendar days, such action shall be deemed a breach hereunder.
(c) WG may terminate this Agreement upon at least one hundred twenty
(120) days prior notice in the event the Parties cannot agree upon any required
changes to the Fees in accordance with Paragraph 5(a) hereunder.
(d) Sections 1,3,7-10, 11(d), 14-16, and 18-20, as well as any
obligation which has accrued prior to any expiration or termination of this
Agreement shall survive such expiration or termination. All outstanding Access
Fees and other amounts owing to WG hereunder shall become immediately due and
payable in the event of any expiration or termination of this Agreement.
12. ASSIGNMENT: WorldGate shall have the right to assign its rights and
obligations hereunder to a third party which is acquiring all or substantially
all of its assets, or any company with which it may merge or consolidate. Except
as expressly set forth in the prior sentence neither party hereunder shall have
the right to assign, transfer or hypothecate its rights and obligations
hereunder, without the other's prior written approval. Any other purported
assignment of this Agreement, shall be deemed null and void.
13. HEADINGS, RELATIONSHIP OF PARTIES: The titles of the paragraphs of this
Agreement are for convenience only and shall not in any way affect the
interpretation of this Agreement. This agreement does not in any way create the
relationship of franchise, joint venture, partnership or agency between WG and
Affiliate, 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.
14. NON-WAIVER OF BREACH; REMEDIES CUMULATIVE:
(a) 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.
(b) Except as set forth herein 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. IN NO EVENT SHALL EITHER PARTY HEREUNDER BE LIABLE TO THE OTHER
FOR SPECIAL, PUNITIVE, CONSEQUENTIAL (INCLUDING WITHOUT LIMITATION ANY LOST
PROFIT OR INVESTMENT AND THE LIKE), INDIRECT OR INCIDENTAL DAMAGES, BY WAY OF
INDEMNITY OR OTHERWISE.
(c) In no event shall WG be liable for damages exceeding the cost of
the equipment purchased hereunder as referenced in Exhibit B..
15. NOTICES: 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, email
(with a copy sent by regular US mail) or fax (with a copy sent by regular US
mail). All notices, statements and other documents shall be sent to:
If to WG:
Accounting statements and All other notices should be sent to:
remittances should be sent to:
WORLDGATE COMMUNICATIONS, INC. WORLDGATE COMMUNICATIONS, INC.
0000 Xxxxxxx Xxxxx, Xxxxx 000 0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attn: Accounting Services Attn: Affiliate Administration
If to Affiliate:
Click! Network
0000 Xxxxx 00xx Xxxxxx
Xxxxxx, XX 00000-0000
Attn: Marketing Manager
(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 email or personal
delivery shall be deemed given upon delivery by the email service or messenger.
16. GOVERNING LAW AND EXPORT RESTRICTIONS:
(a) All matters pertaining to this Agreement (including its
interpretation, validity, performance and breach), in whatever jurisdiction
action may be brought, shall be governed by the laws of the State 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
(i) in the State of Delaware with respect to any action initiated by Affiliate,
and (ii) in the State of Washington with respect to any action initiated by WG,
and to accept service of process outside the States of Delaware and Washington,
as applicable, in any matter to be submitted to any such court pursuant hereto.
(b) 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, in the opinion of WG, have the effect of materially
nullifying, or impairing, this Agreement.
(c) Affiliate shall comply fully with all then current applicable laws
and regulations relating to the export of products and technical data including,
but not limited to, any regulations of the United States Office of Export
Administration.
17. FORCE MAJEURE: Neither party shall, in any manner whatsoever, be liable or
otherwise responsible for any delay or default in, or failure of performance
(other than the failure to make payments hereunder) resulting from or arising
out of or in connection with, any "Event of Force Majeure" and no such delay,
default in, or failure of performance shall constitute a breach by either party
hereunder. For purposes of this Agreement, an "Event of Force Majeure" in
respect of a party shall mean any act, cause contingency or circumstances beyond
the control of such party, including, without limitation, and to the extent
beyond the control of such other party, any governmental action,
nationalization, expropriation, confiscation, seizure, allocation, embargo,
prohibition of import or export of goods or products, regulation, order or
restriction (whether foreign, federal or state), war (whether or not declared),
civil commotion, disobedience or unrest, insurrection, public strike, riot or
revolution, lack of or shortage of, or inability to obtain, any labor,
machinery, materials, fuel, supplies or equipment from normal sources of supply,
strike, work stoppage or slowdown, lockout or other labor dispute, earthquake,
hurricane, fire, flood, drought, other natural calamity, damage or destruction
to plant and/or equipment, or any other accident, condition, cause, contingency
or circumstance (including, without limitation, acts of God) within or without
the United States beyond the control of such party.
18. CONFIDENTIALITY:
(a) The recipient of any confidential information of the other
hereunder agrees to safeguard the confidentiality of such confidential
information by applying policies and procedures adequate for that purpose,
including without limitation, restricting the disclosure of this confidential
information to employees and consultants needing to know the same for the
purpose of this Agreement, who have agreed in writing to safeguard such
confidential information in a manner consistent with the provisions of this
paragraph. The recipient shall not disclose any such confidential information to
any other person, firm or corporation, or use the same except for the purpose
stated hereinabove, and shall exercise at least the same degree of care to guard
against disclosure or unauthorized use of such confidential information, as the
recipient employs with respect to its own confidential information, but in no
event less than reasonable care. Information to be disclosed confidentially
hereunder shall be fixed in a tangible medium of expression that is marked
"Proprietary" or "Confidential", or if disclosed in other than a tangible medium
of expression, indicated by the disclosing Party as being
"Proprietary" or "Confidential" at the time of disclosure and within thirty (30)
days thereafter summarized by the disclosing Party in a writing to the
recipient, in which writing the confidential information is identified as
"Proprietary" or "Confidential". A tangible medium of expression shall be deemed
to include, by way of example, memoranda, written descriptions, drawings,
photographs, models, prototypes, tapes, disks and circuitry.
(b) The recipient shall have no obligation of confidentiality hereunder
with respect to any information which:
(i) is already properly known to the recipient other than as a
result of a prior confidential disclosure by the disclosing Party;
(ii) is or becomes publicly known otherwise than by the
recipient's (or someone receiving the information from recipient) fault or
breach of this Agreement;
(iii) is rightfully received by the recipient without
restriction from a third party who is not under an obligation of
confidentiality, directly or indirectly, to the disclosing Party;
(iv) is independently developed by the recipient without
benefit of the confidential information received hereunder;
(v) is approved for release in writing by the disclosing
Party; or
(vi) is disclosed by the recipient pursuant to judicial or
regulatory action, provided that the disclosing party is promptly notified at
the time such action is initiated and the recipient fully cooperates with the
disclosing Party in seeking continued confidential treatment of such information
to the extent possible.
(c) Except as may be reasonably required by applicable law, regulation
or court order, the Parties agree that neither of them shall publicly divulge or
announce, or in any manner disclose to any third party, other than its
attorneys, accountants, parents, and partners, any of the specific terms and
conditions of this Agreement, including without limitation the Subscriber Access
Fees payable hereunder, and the parties further warrant and agree that none of
their officers, directors or employees will do so. Click! Network will notify WG
of such a request for disclosure so that WG may take its own course of action.
19. PROCEDURE PRIOR TO LITIGATION: Prior to initiating any litigation with
respect to any controversy, claim or dispute arising hereunder or related
hereto, but excluding any claim arising under Sections 3, 10 or 18 of this
Agreement (a "Dispute") a Party must first notify the other Party and request in
writing that such Dispute be submitted to an executive committee consisting of
one senior ranking executive named by each of the Parties for such purpose. Such
named executive shall have the authority and be capable of making binding
decisions on behalf of such Party with respect to such Dispute. Within five (5)
business days following the receipt of such notice (or such other period as may
be agreed by the Parties) each Party shall have named its executive committee
participant, and within ten (10) business days following the receipt of such
notice (or such other period as may be agreed by the Parties) the executive
committee shall meet to discuss the Dispute. If the executive committee is not
able to resolve the Dispute within twenty (20) business days following the
receipt of such notice (or such other period as may be agreed by the Parties),
then either Party may proceed with the initiation of such litigation as may be
appropriate.
20. ENTIRE UNDERSTANDING: This Agreement, including the Exhibits identified
herein, sets forth the entire understanding of the parties with respect to the
subject matter hereof, and all prior concurrent oral agreements or all prior
written agreements with respect to such subject
matter have been merged herein. No representations or warranties have been made
other than those expressly provided for herein. This Agreement may not be
modified, except by a written instrument signed by an authorized representative
of the parties, and this provision may not be waived except by written
instrument signed by an officer of the parties. In the event this agreement is
translated into any foreign language counterpart, the English language
counterpart shall remain controlling. This Agreement shall be presumed to have
been negotiated and drafted by both Parties for the purpose of construing any
ambiguities hereunder.
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.
Affiliate: CITY OF TACOMA, TACOMA PUBLIC UTILITIES, WG
DBA Click! Network
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxx Xxxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxx Xxxxxxx
Title: Director of Utilities Title: unintelligible
Date:11/25/98 Date: 12/7/98
Tel.: 000-000-0000 Tel.: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
Approved as to form & legality
/s/ UNINTELLIGIBLE
-------------------------
[Unintelligble] Assistant City Attorney
Approved:
By: /s/ UNINTELLIGIBLE
--------------------
Finance Director
EXHIBIT A
TELEVISION DISTRIBUTION SYSTEMS
SYSTEM NAME MAILING ADDRESS BASIC SUBSCRIBERS
----------- --------------- -----------------
CLICK! NETWORK 0000 XXXXX 00XX XXXXXX 0000
XXXXXX, XX 00000-0000
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Each System identified above must include at least the following minimum
facilities (to be supplemented as WG subscriber base grows):
(a) dedicated Internet Access Link - T1 or equivalent with comparable
data rates
(b) Cisco 2501 Router with IP Software (or approved equivalent)
(c) Kentrox D-Serv CSU/DSU (or approved equivalent)
Effective Date: 12/14/98 Affiliate Initials: /s/ unintelligible WG
Initials: /s/ unintelligible
EXHIBIT B
WORLDGATE PLATFORM
PLATFORM COMPONENTS AND PRICING:
Set forth below are the standard components of the WorldGate Platform and
Affiliate's price for the same as of the effective date set forth below. Such
prices are FOB WG's factory, and are valid for a period of one-year from this
effective date after which time they are subject to change by WG to reflect
current market conditions.
ITEM FIRST UNIT IN A HEADEND OTHER UNITS - SAME HEADEND
---- ----------------------- --------------------------
Headend Package (analog) ## ##
Large System Headend Package (analog) ##
Channel HyperLinking Server ##
WorldGate Keyboard* ## ##
* Non-U.S. language keyboards will be quoted separately.
Affiliate will require and shall purchase hereunder one or more Headend Packages
and WorldGate Keyboards, as required, for each System identified on Exhibit A of
this Agreement. Custom configuration options are available and will be quoted
separately if required based upon expected subscriber base (For initial
quotation see Exhibit b-2 attached hereto and incorporated herein by reference).
The above fees include routine site surveys and installation for domestic U.S.
locations. Non-routine and/or non-U.S. surveys and installation are available on
a time and material basis at WG's customary rates (international locations will
also involve travel and per diem charges.) The above fees do not include any
improvements and/or modifications to Affiliate's Systems. Notwithstanding the
use of the term "purchase" herein, such WorldGate Platform as acquired hereunder
includes certain WorldGate and third party software, microcode and
documentation, whether stored in electronic (including firmware), magnetic,
optical or other media (collectively Programs) for which title to and all
proprietary rights in are reserved to WG and its suppliers. All access to and
use of such Programs is subject to the terms and conditions of WG's Software
License attached hereto and incorporated herein as Exhibit B-1.
LIMITED PRODUCT WARRANTY:
In addition to the warranties set forth in Section 8 of this Agreement, WG
warrants that as installed hereunder and for a period of three months thereafter
( but not more than four months after delivery if there is a delay between
delivery and installation other than as may result from
-----------------
## THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES & EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT.
the actions and/or omissions of WG) such WorldGate Platform components will
perform under normal use and service substantially in the manner specified in
the applicable published technical specification as published by WG prior to the
execution of this Agreement , and that for this period the hardware components
of the WorldGate Platform will be free from defects in materials and
workmanship. This warranty shall not apply to any items subjected to accident,
misuse, neglect, mishandling, unsuitable physical or operating environments or
any installation, testing, repair or alteration by anyone other than WG or its
authorized vendors, or any use of non-approved components in connection with the
WorldGate Platform. WG's warranty hereunder extends to Affiliate and to no other
person or entity. This warranty shall not be enlarged or otherwise affected by,
and no obligation or liability shall arise hereunder by WG's rendering of
technical advice, help line support or service in connection with the products
furnished hereunder. Any claims arising out of the aforesaid warranty must be
submitted to, and the affected components must be returned or otherwise made
available to WG in accordance with its published procedures, during the
specified warranty period or within thirty (30) days of the expiration of such
period. Subject to the preceding conditions, WG will promptly examine such
WorldGate Platform components and repair or replace any such components which
are defective with respect to the above warranty. Any required service, repair
or replacement (and the costs and expenses associated therewith) which are not
covered by the above warranty will be the responsibility of Affiliate unless
covered by an applicable WG service contract.
THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING WITHOUT LIMITATION, ANY IMPLIED OR STATUTORY WARRANTY OF
NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ANY
WARRANTY HEREUNDER, EXPRESS OR OTHERWISE, IS LIMITED TO THE WARRANTY TERM AND
CONDITIONS AS SET FORTH ABOVE.
AFFILIATE TECHNICAL SUPPORT:
WG will at no additional charge to Affiliate provide technical support to
Affiliate's customer service and engineering staff, 7 days per week, 24 hours
per day, with such support to be provided by telephone, facsimile and Internet.
Except as is provided by WG pursuant to the terms and conditions of any
applicable service contract or WG's written warranty herein, any required travel
from WG's facilities or support in addition to that provided by telephone,
facsimile and Internet hereunder will require payment for time and materials at
WG's customary rates, as well as reimbursement for travel and per diem charges.
ON SITE TRAINING:
Prior to the initial launch of the WorldGate Service on Affiliate's Systems WG
will conduct one on site customer service training program of up to 3 days in
duration for domestic U.S. installations. Training for non-U.S. installations as
well as additional training will be available on a time and materials basis at
WG's customary rates, as well as reimbursement for travel and per diem charges.
PLANT SPARES:
WG and Affiliate will cooperate to formulate and implement a recommended program
for spare parts inventory, local maintenance strategy and emergency response.
SUBSCRIBER HELP LINE:
WG shall make available to WorldGate Subscribers (for domestic US locations
only) a toll-based help line to assist WorldGate service Subscribers with
questions relating to their WorldGate Service. Affiliate shall be responsible
for all other Subscriber support.
EXHIBIT B-1
SOFTWARE LICENSE
The terms and provisions of this Exhibit B-1 (Software License) provide for the
licensing by WG to Affiliate of certain Programs (as such term is defined in the
Affiliation Agreement) furnished with and to be used either as part of or in
conjunction with the WorldGate Platform to be provided by WG to Affiliate under
an Affiliation Agreement, of which this Exhibit forms a part.
1. GRANT OF LICENSE: WG (hereinafter Licensor) hereby grants to Affiliate
(hereinafter Licensee) and Licensee hereby accepts a personal, nonexclusive
license to use the Programs on the terms and conditions set forth herein and in
the Affiliation Agreement. Except as specifically provided herein and therein,
no interest, right or license, express or implied, is granted, and such other
interests, rights and licenses are hereby reserved.
2. OWNERSHIP RIGHTS: Any reference to sale or purchase not withstanding, title
to the Programs and all copies and derivatives thereof shall be and remain in
Licensor, and no title to or ownership of the Programs or any derivative or
portion thereof is conveyed or transferred to the Licensee. Licensee
acknowledges that the Programs constitute confidential and proprietary
information and trade secrets of Licensor, whether or not the Programs, or any
portion thereof, are or may be copyrighted or copyrightable and/or patented or
patentable, and that disclosure of the Programs to Licensee is on the basis of
the confidential relationship between Licensee and Licensor under this
Agreement.
3. RESTRICTION ON TRANSFER: Licensee shall not sell, assign, sub-license,
transfer, or otherwise make available the Programs, in whole or in part, except
as may be permitted by this Software License Agreement and only with written
prior consent by WG.
4. RESTRICTION ON USE, DISASSEMBLY AND REVERSE ENGINEERING: Licensee may use the
Programs solely and exclusively on the computer(s) and associated peripherals
furnished by WG as part of the WorldGate Platform sold to Affiliate under terms
of the Affiliation Agreement, except that the Programs may also be temporarily
used on or with a compatible backup computer and associated peripherals if the
WorldGate Platform computers and associated peripherals are inoperative because
of malfunction or during the performance of preventive maintenance or
engineering changes, but only for such reasonable time as required to restore
such WorldGate Platform to operative status. Licensee shall use the Programs
only in connection with its immediate internal operations with respect to the
provision to its customers of the WorldGate Service as authorized by the
Affiliation Agreement, and shall not otherwise use nor offer or supply the use
of the Programs to others under any circumstance. Licensee shall not de-compile,
disassemble or otherwise reverse engineer the Programs.
5. RESTRICTION ON COPYING: Licensee shall make no copies (including any
derivatives) of the Programs, or any part thereof, except that Licensee may make
one (1) copy of the Program solely for the purposes of backup and archival
storage. All copies shall be clearly marked by Licensee with the same Licensor
proprietary and copyright restrictions which appear on the Programs originally
supplied to Licensee, and be stored by Licensee in a secure manner.
6. RESTRICTION ON DISCLOSURE: Except as expressly permitted herein, Licensee
shall not disclose or otherwise make available the Programs, or any portion
thereof, to any third party or
to any employee or agent of Licensee who is not of necessity authorized by
Licensee to use the Programs as part of Licensee's provision of the WorldGate
Service. Licensee shall take all reasonable steps necessary to ensure the
Programs, or any portions, copies or derivatives thereof, are not disclosed or
otherwise made available by Licensee (or employees or agents of Licensee) to any
third party except as aforesaid.
7. TERMS AND TERMINATION: The term of this License Agreement and the license
granted hereunder shall commence on the date hereof, and shall terminate on the
earlier of: (a) when Licensee ceases to operate or otherwise de-installs or
replaces the WorldGate Platform; or (b) the termination or expiration of the
Affiliation Agreement or the failure of Licensee to pay any fees or to comply
with any of the terms and provisions hereof or of the Affiliation Agreement
pursuant to which the WorldGate Platform has been provided, which failure
continues for a period of ten (10) days after written notice to cure such
failure and avoid termination.
Upon any termination of this Software License Agreement, pursuant to (a) or (b)
above, Licensee shall immediately cease use of the Programs and return the
Programs and all copies thereof to WG, and shall, within one (1) month after any
such termination xxxxxxx XX a written statement certifying that the original and
all copies and extracts (including partial copies and extracts) of the Programs
and any related material received from WG or made in connection with such
license have been returned to WG or, upon WG's written request, destroyed. WG
reserves all rights and remedies at law, in equity and otherwise provided
pursuant to the terms and conditions of this Agreement, to enforce it rights
under this license. Licensee acknowledges and agrees that any breach or
threatened breach of this software license shall cause WG irreparable injury for
which there may be no adequate remedy at law, and that in addition to any other
remedies available, WG shall therefore be entitled to obtain injunctive relief
without the necessity of proving actual damages.
Description___________________________________________Release No._______________
Effective Date: 12/14/98 Affiliate Initials: /s/ unintelligible WG Initials:
/s/ unintelligible
EXHIBIT B-2
WORLDGATE PLATFORM QUOTATION*
Large System Analog Headend as follows: [INFORMATION REDACTED]##
1. [INFORMATION REDACTED]##
2. [INFORMATION REDACTED]##
3. [INFORMATION REDACTED]##
4. [INFORMATION REDACTED]##
5. [INFORMATION REDACTED]##
6. Keyboards
Total
*PER THE REQUEST OF AFFILIATE THE ABOVE PRICES HAVE BEEN RESTATED TO INCLUDE
CITY TAX (I.E., 0.0048%) AND STATE TAX (I.E., 1.5%).
----------------------
## THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES & EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT.
EXHIBIT C
MARKETING AND PROMOTION OF THE WORLDGATE SERVICE
The Parties will provide, throughout the term of this Agreement, at least the
following identified activities to market and promote the WorldGate Service:
WG WILL PROVIDE:
- four times yearly direct mail campaign to non-WorldGate Subscribers (WG
will supply creative and will provide both printing and bulk delivery for
purchase at WG's cost)
- xxxx stuffers (for purchase at WG's cost)
- four times yearly local cable cross channel promotion, when technology is
available
- four 30 and four 60 second video promotions for use as commercials,
distributed yearly
- training for customer service representatives
- selected print media placement
- camera-ready ad mats
- four-color quarterly consumer guide (for purchase at WG's cost)
- point of sale displays
- leave behind piece and on-line tutorial for consumer education
- training tape for Subscribers
- updates for user guides as the same become available
AFFILIATE WILL PROVIDE:
- four times yearly direct mail campaign to non-WorldGate households
(Affiliate will provide mailing lists, address labeling, out-bound postage
and return fulfillment costs)
- a minimum of 200 ad avails promoting the WorldGate Service with WG approved
commercials of either 30 or 60 second length per month, inserted on
Affiliate's Systems on ad supported channels as agreed between the parties,
to be run at times between 6:00 AM to 12:00 PM (midnight local time) when
such capability is technically available
- affidavits (in the form of a computer printout) verifying above commercials
- xxxx stuffer insertion and/or envelope advertising and mailing in
Subscriber billing cycle, three times per annum
- reasonable use of local origination text-based channels (if available) to
promote WorldGate Services
- placement of WG approved 30 and 60 second commercials (or other WG provided
promotional pieces) on Affiliate's PPV promotion channel(s), for regular
rotation for two week intervals, monthly
- trained customer service representatives for all WorldGate Services
- reasonable promotion of WorldGate Service on Affiliate's web home page
Effective Date: 12/14/98 Affiliate Initials: /s/ unintelligible WG Initials:
/s/ unintelligible
EXHIBIT D
MONTHLY SUBSCRIBER ACCESS FEES
The following Subscriber Access Fees are payable by Affiliate to WG on a monthly
basis for each Subscriber having access to the WorldGate Service during such
month (prorated based upon a 30 day month for Subscribers having access to the
WorldGate Service for less than a full calendar month). The pricing grid sets
forth various benchmarks which, if achieved, will result in an adjustment in the
particular amount payable for such Subscriber Access Fees. Affiliate's
performance with respect to these benchmarks and the resultant amounts payable
hereunder shall be determined on an aggregate System wide basis based on the
results of all Systems hereunder. Any adjustment in the amount payable for such
Subscriber Access Fees shall apply only for prospective periods after the
benchmarks have been achieved, and then only after written notice has been
provided by Affiliate to WG providing the details as to such achievement.
In addition to the Subscriber Access Fees as set forth below Affiliate shall pay
to WG as Subscriber Access Fees, in the event the amount which Affiliate
invoices and/or otherwise charges its customers as part Affiliate's standard
monthly retail price for the WorldGate Service exceeds U.S.$10.95, an amount
equal to thirty-five (35%) percent of such excess.
For purposes of determining the amount of the Subscriber Access Fees payable
hereunder for the Systems (x) the number of "WorldGate Subscribers" for any
month shall mean the average number of actual Subscribers to the WorldGate
Service for that month and shall include only the Subscribers being invoiced for
and paying the standard retail charge which Affiliate invoices its customers for
the WorldGate Service (Subscriber Access Fees are, however, payable by Affiliate
to WG for all Subscribers receiving access to the WorldGate Service irrespective
of whether any payment is made by such Subscribers to Affiliate), and (y) the
number of AWorldGate Capable Customers for any month shall mean the average
number of Affiliate's actual customers (including only those customers being
invoiced for and paying the standard retail charge which Affiliate invoices for
its television programming distribution service) which during the month had
sufficient System architecture and Head-end Package components of the WorldGate
Platform installed and operational to permit such customer to have become a
WorldGate Subscriber, had the customer so chosen, and (z) the APenetration for
any month shall mean the number of WorldGate Subscribers divided by the number
of WorldGate Capable Customers as determined above. Monthly averages hereunder
shall be determined dividing by two the sum of the applicable number on the
first and last business days of the month.
THE FOLLOWING RATES APPLY ONLY TO AFFILIATES OFFERING THE WORLDGATE SERVICE AS A
UNLIMITED USAGE SERVICE AND AS A BASIC SERVICE TO ALL CUSTOMERS, ACROSS AND AS
PART OF ALL TIERS OF SERVICE. (INCLUDES AN ALLOTTED USAGE TIME PER SUBSCRIBER
PER MONTH WHICH IS NOT LIMITED IN NUMBER OF HOURS).
[CHART REDACTED]##
*PER THE REQUEST OF AFFILIATE THE ABOVE FEES HAVE BEEN RESTATED TO INCLUDE $0.01
CITY TAX (I.E., 0.0048%)
------------------
## THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES & EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT.
CHANNEL HYPERLINKING-SM- AND OTHER REVENUE SHARING OPPORTUNITIES
The parties anticipate that the Subscriber Accessible Content will include
opportunities to generate revenue from third parties through Channel
Hyperlinking, advertising, commodity buying/selling lead generation and similar
services which may be enabled by the WorldGate Platform. The Parties further
recognize that such opportunities may require commitments with advertising
agencies and other third parties as well as administrative, accounting, and
other services and associated costs, fees, and expenses in order to permit such
revenue to be generated. The Parties will work together to maximize such
opportunities. Any revenue which is generated as a result of such services as
the Parties agree to make available to Subscribers as part of the WorldGate
Service hereunder will be shared by WG and Affiliate either evenly or upon an
alternative percentage basis to be negotiated by the parties, in either case
after subtracting such associated costs, fees, and expenses, and subject to any
required commitments as aforesaid.
Effective Date: 12/14/98 Affiliate Initials:/s/ unintelligble WG Initials: /s/
unintelligble
