1
[CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED
AND HAVE BEEN SEPARATELY FILED WITH
THE COMMISSION.]
Exhibit 10.9
NETWORK SERVICES AGREEMENT
This NETWORK SERVICES AGREEMENT ("Agreement") is dated as of this 25th
day of November, 1998, ("Effective Date") by and between:
HIGH SPEED ACCESS CORP.
0000 Xxxx Xxxxxx Xxx., Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000 ("HSAC")
CHARTER COMMUNICATIONS, INC.
00000 Xxxxxxxxxxx Xx., Xxxxx 000
Xx. Xxxxx, XX 00000 ("Charter")
and
MARCUS CABLE, INC.
0000 Xxxxxx Xxxxx Xxxx., Xxxxx 0000
Xxxxxx, XX 00000 ("Marcus")
RECITALS
X. Xxxxxx and Charter (referred to individually and together
herein as the "Operator") own and operate Cable Systems and
wish to offer some of their Cable Subscribers in the Cable
Systems listed on EXHIBIT A to this Agreement the opportunity
to utilize the applicable Cable Systems for Internet access
and related services.
B. HSAC provides Internet access and related services through
various sources including Cable Systems.
C. HSAC, Charter, Marcus, and Vulcan Ventures, Incorporated
("Vulcan") are entering into that certain Systems Access and
Investment Agreement of even date herewith ("Systems Access
Agreement"), and HSAC and Vulcan are entering into that
certain Programming Content Agreement of even date herewith
("Content Agreement"). The Access Agreement and Content
Agreement are incorporated herein by this reference.
D. Operator wishes to retain HSAC to provide Internet access and
related services to certain of its Cable Subscribers, and HSAC
wishes to access the Cable Subscribers in the Cable Systems
listed on EXHIBIT A and use certain other Cable Systems of
Operator to provide Internet access and related services to
such Cable Subscribers.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby, the parties agree as follows:
- 1 -
2
1. DEFINITIONS. In addition to the other capitalized terms defined elsewhere in
this Agreement, the following terms will have the meanings set forth below:
1.1. "Activation Schedule" means the schedule(s) for the Full HSAC
Services Roll-Out of Committed Systems to be agreed upon by Operator and HSAC
pursuant to Section 2.4 hereof.
1.2. "Cable Subscriber" means a cable TV subscriber or potential
subscriber residing in a Home Passed in a Committed System regardless of whether
such cable TV subscriber or potential subscriber subscribes to HSAC Services.
1.3. "Cable System(s)" means any radio frequency ("RF") cable
television franchise or hybrid fiber-coaxial RF Plant distribution system ("RF
Plant") serving a geographically proximate group of residences, businesses, or
other locations. Cable Systems include both One-Way Systems and Two-Way Systems.
1.4. "Committed System(s)" means the Cable Systems that Operator or any
Potential Operator has specifically designated in such Operator's or Potential
Operator's sole and absolute discretion as Committed Systems pursuant to Section
2.1 and 2.2, that such Operator or Potential Operator reasonably believes will
conform to Section 4 of the Systems Access Agreement, and that are either listed
in EXHIBIT A attached hereto as of the Effective Date or are added to EXHIBIT A
by amendment during the Term pursuant to Section 2.2. A Cable System shall be
deemed to no longer be a Committed System if (i) it has been withdrawn by an
Operator or Potential Operator pursuant to Section 2.3 or 18 hereof, (ii) this
Agreement has expired or been terminated for any reason pursuant to Section 18
hereof, or (iii) such Committed System is no longer controlled by the applicable
Operator or Potential Operator for any reason.
1.5. "Confidential Information" means any and all information related
to either HSAC's business or Operator's business in any form, including, without
limitation, (i) customer information, (ii) the terms and conditions of this
Agreement, (iii) all dates, summaries, reports or information of all kinds,
whether oral or written, acquired, devised or developed in any manner by or from
the disclosing party's files, and (iv) financial, statistical, personnel, or
technical information, software or documentation, which the disclosing party
deems proprietary or confidential.
1.6. "Conversion Requirements" means such requirements as are set out
in EXHIBIT H.
1.7. "Customer List(s)" means the Operator's list of Cable Subscribers
in each Committed System and related subscriber information.
1.8. "Data Subscriber" means a Cable Subscriber residing in a Home
Passed in a Committed System who subscribes to HSAC Services regardless of
whether such subscriber
- 2 -
3
subscribes to Operator's cable TV service. Each Multiple Dwelling Unit ("MDU")
constitutes not more than a single Data Subscriber for purpose of this
Agreement.
1.9. "Full HSAC Services Roll-Out" means the creation, staffing and
operation of every business, technical and service aspect necessary to fully
implement the HSAC Services.
1.10. "Gross Revenues" means all gross revenues collected from Data
Subscribers for the HSAC Services, including, without limitation, monthly
subscription fees regardless of which party handles the billing and collection,
and as used herein, does not include (i) applicable sales or use taxes, (ii)
federal, state or local franchise fees, (iii) Installation Fees or any other
set-up charges assessed by HSAC, Operators or any authorized third-party
reseller or installer (subject to the limitations set forth in Section 6.2
below), (iv) rentals paid by Data Subscribers on Home Equipment Packages
(subject to the limitations set forth in Section 6.2 below), CONFIDENTIAL
MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
1.11. "Home Equipment Package" means the cable modem and related power
converter/supply, network interface card (NIC), patch cable, and related
software for each Data Subscriber.
1.12. "Homes Passed" means residences that are connected (i.e., a
residence with an installed cable "drop" from a Committed System or which is
eligible for such cable "drop" by virtue of a Committed System passing such
residence) to the cable RF Plant/head-ends of a Committed System, regardless of
whether the persons residing in such residences subscribe to cable TV services.
Each MDU constitutes a single Home Passed for purposes of this Agreement.
1.13. "HSAC Network Equipment" means the equipment that HSAC employs
for operation of the HSAC Services by connecting such equipment to the head-end
of Operator's Cable Systems. HSAC Network Equipment includes, without
limitation, all monitoring devices, telecommunications equipment, storage
devices, computing and data processing equipment, and software.
1.14. "HSAC Services" means the design, engineering, construction
(excluding the RF Plant portion of the Cable System), installation, activation,
beta testing, ISP and data network operation and management, sales and
marketing, customer service and "call center" support, billing (as agreed to the
parties on a case-by-case basis), pre- and post-Launch Date deployment and
operation, and maintenance of Internet access and related services from the Data
Subscriber's computer and cable modem through any Committed System to HSAC's
Internet Portal including, without limitation, interfacing HSAC Network
Equipment with Committed Systems to allow Data Subscribers, for a monthly fee or
other charges, to browse
- 3 -
4
the World Wide Web, read news groups, and receive and send electronic mail
("E-mail") and perform related activities.
1.15. "Installation Fee" means the gross revenues collected directly or
indirectly from a Data Subscriber by HSAC, Operator, or any authorized
third-party reseller or installer for the installation and connection of a Home
Equipment Package for such Data Subscriber to receive HSAC Services but does not
include (i) applicable sales or use taxes, (ii) federal, state or local
franchise fees.
1.16. "Internet Portal" means a physical site sometimes referred to as
a "point of presence" where there is a collection of equipment including
routers, data storage devices, and modems that are used to connect to customers
and leased telecommunication lines that connect such site directly to a part of
the Internet backbone.
1.17. "ISP" or "Internet Service Provider" means an entity that
provides Internet access to its customers.
1.18. "Launch Date" means, with respect to a particular Committed
System, the date on which HSAC or Operator, as the case may be, is required to
commence revenue billing for Data Subscribers in such Committed System pursuant
to the Activation Schedule.
1.19. CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION
1.20. "MSO" means an entity that owns, controls, or operates multiple
Cable Systems that is generally referred to as a Multiple System Operator in the
cable television industry.
1.21. "One-Way" means a Cable System that can only deliver television
signals, data, or other digital or analog information downstream from the cable
head end to the Cable Subscriber, and must use another means, including without
limitation a telephone line and modem, to send any information from the Cable
Subscriber to an Internet Portal.
1.22. "Other Agreements" means the Systems Access Agreement and the
other agreements set forth in subsections (i), (iii), (iv), (v), (vi), (vii),
(viii) and (ix) of Section 1.24 of the Systems Access Agreement.
- 4 -
5
1.23. "Potential Operators" means, as the case may be or the context
requires, any MSO or operator of packet-switched data systems now or hereafter
owned or controlled by, directly or indirectly, or affiliated with Xxxx X.
Xxxxx, Operators or their respective affiliates or subsidiaries.
1.24. "System Data Requirements" means the minimum technical
requirements set forth on EXHIBIT B hereto to which the RF Plants in Operators'
Committed Systems must conform.
1.25. "System Service Requirements" means the minimum technical and
service requirements set forth on EXHIBIT G hereto to which the HSAC Services
must conform.
1.26. "Termination Fee" means an amount equal to one-half of the net
present value of the Gross Revenues which would otherwise have been generated
for the HSAC Services from the base of Data Subscribers existing as of the date
of termination in a Committed System through the remainder of the Term. If the
parties cannot agree upon the amount of any Termination Fee, they shall jointly
engage and split the cost of a neutral appraiser or valuation specialist to
place a value on such Termination Fee.
1.27. "Two-Way" means a Cable System that can both send and deliver
television signals, data, or other digital or analog information upstream and
downstream to and from the cable head-end to and from the Cable Subscriber,
without using another means to send or receive any information from the Cable
Subscriber to an Internet Portal.
1.28. Other Definitions. The following additional defined terms shall
have the meanings ascribed to them in the Sections indicated below:
"24x7" 7.2.5
"Additional System Notice" 2.2
"Attainment Measures" 2.3
"Call Center" 7.2.5
"Force Majeure" 21
"HSAC's Share" Exhibit D
"Initial Term" 16
"Intellectual Property Laws" 13.1.5
"MDU" 1.8
"NOC" 7.2.5
"Notice" 7.3.4
"Operator's Share" Exhibit D
"Out-of-Compliance Event" Exhibit D
"RF" 1.3
"RF Plant" 1.3
"RBOC" 2.4.2
"Renewal Term" 16
"Service Failure" 7.3.4
- 5 -
6
"Statement" Exhibit D
"Systems Access Agreement"Recital C
"Term" 16
"Termination Events" 18.3
2. EXCLUSIVE RIGHT TO PROVIDE HSAC SERVICES TO COMMITTED SYSTEMS; ADDITIONAL
COMMITTED SYSTEMS; INSPECTION AND ACCEPTANCE CRITERIA.
2.1. Exclusive Access. During the Term, HSAC shall have the sole and
exclusive right to access the Committed Systems listed on EXHIBIT A to this
Agreement for purposes of performing the HSAC Services and to perform the HSAC
Services for the Committed Systems, subject to and in accordance with the terms
herein and the Systems Access Agreement. Subject to the procedures set forth in
this Section 2, HSAC shall perform a Full HSAC Services Roll-Out on every such
Committed System within the time frames specified for a particular Committed
System in the Activation Schedule.
2.2. Designation of Additional Systems. During the Term (and subject to
the procedures set forth in this Section 2), Operator and Potential Operators
shall have the unilateral right, but not the obligation, to designate an
unlimited number of additional Cable Systems as Committed Systems under this
Agreement, and such right shall extend to any and all Cable Systems now owned or
managed or hereafter acquired or managed by Operator or Potential Operator.
Operator and Potential Operators shall exercise their right to designate
additional Cable Systems as Committed Systems hereunder by delivering written
notice of such designation to HSAC (an "Additional System Notice"). Upon HSAC's
receipt of such Additional System Notice, HSAC and the applicable Operator shall
amend this Agreement to add such Cable System(s) to EXHIBIT A, and the Cable
System(s) designated in such Additional System Notice shall automatically become
Committed Systems hereunder. If a Potential Operator designates Committed
Systems hereunder, the parties and such Potential Operators shall amend this
Agreement to include such Potential Operator as an Operator for all purposes
hereunder.
2.3. Commissioning of RF Plant; System Data Requirements. Within sixty
(60) days of (i) the Effective Date (as to the Committed Systems referenced in
Section 2.1 above), and (ii) HSAC's receipt of an Additional System Notice (as
to the Committed Systems referenced in Section 2.2 above), HSAC shall perform an
engineering inspection of Operator's RF Plant in the applicable Committed
Systems and deliver to Operator, HSAC's recommendations for any upgrades or
repairs (if HSAC fails to deliver such recommendations for any Committed System
within such 60 day period, then such Committed Systems will be deemed to satisfy
the System Data Requirements) which may be necessary for the Committed System to
conform to System Data Requirements ("Attainment Measures"). Operator
acknowledges and agrees that (i) in order for HSAC to deliver HSAC Services to
Data Subscribers, each Committed System must satisfy the System Data
Requirements, (ii) HSAC is not responsible for whether the Committed Systems
satisfy the System Data Requirements, and (iii) Operator shall undertake (or
refuse to take, as the case may be) those Attainment
- 6 -
7
Measures necessary to cause the Committed System's RF Plant to attain, and
thereafter maintain in conformity with, the System Data Requirements during the
Term of this Agreement. If the Operator declines to effect appropriate
Attainment Measures for any particular Committed System, this Agreement shall
terminate as to such Committed System without liability of any kind to either
Operator or HSAC, and such Committed System shall be removed from EXHIBIT A of
this Agreement. If the Operator agrees to effect the Attainment Measures, the
Activation Schedule shall be amended to establish the milestones for Operator to
bring the Committed Systems into conformity with the System Data Requirements
including a reasonable amount of additional time for HSAC to complete its Full
HSAC Services Roll-Out for such Committed Systems.
2.4. Activation Schedule.
2.4.1. The Activation Schedule for the initial Committed
Systems as of the Effective Date hereunder shall be as set forth in EXHIBIT A.
Within forty-five (45) days of HSAC's receipt of an Additional System Notice,
Operator and HSAC shall negotiate and agree in good faith upon a feasible,
reasonable "critical path" timelines for each Committed System's Full HSAC
Services Roll-Out, and memorialize such timeline in an Activation Schedule (as
same may be amended from time to time as contemplated in Section 2.3 above to
account for the Operator's taking of Attainment Measures and as the parties may
otherwise agree in writing). The Activation Schedule shall set out
implementation milestones, including, without limitation: (i) that Operator
shall notify HSAC when a particular Committed System conforms (or when the
Operator expects such Committed System to conform if the taking of Attainment
Measures is required) with the System Data Requirements, (ii) the Launch Date,
and (iii) the date when the Full HSAC Services Roll-Out in each Committed System
shall be completed. In the event that the parties cannot agree upon a reasonable
Activation Schedule for any additional Committed Systems designated under
Section 2.2 within forty-five (45) days of HSAC's receipt the applicable
Additional Systems Notice, then the provisions of Section 6.4 of the Systems
Access Agreement shall apply, and HSAC will implement the HSAC Services for such
additional Committed Systems at a rate of eight (8) head-ends per month (such
head-ends to be designated by Operator), with Operators' head-ends receiving
priority for activation over head-ends owned and/or operated by other customers
of HSAC.
2.4.2. HSAC will not be deemed in default of a scheduled
Launch Date if (i) a Regional Xxxx Operating Company ("RBOC") or other telephone
network provider (a "telco") is late in installing a T-1 line or backbone
connection necessary for the HSAC Services following the submission of a
complete order by HSAC to such party before the lead times required by such
party in order to install such T-1 line or backbone connection in sufficient
time to meet the applicable Launch Date, (ii) an equipment vendor (e.g., COM21)
fails to meet its delivery deadlines with respect to the HSAC Network Equipment
or Home Equipment Packages following the submission of a complete order by HSAC
to such party before the lead times required by such party in order to deliver
such equipment in sufficient
- 7 -
8
time to meet the applicable Launch Date, or (iii) HSAC does not receive any
specialized equipment required to carry the Vulcan Content (as defined in the
Content Agreement), which equipment is otherwise not required in order to
perform the HSAC Services, on a timely basis following the submission of a
complete order by HSAC to the vendor of such equipment before the lead times
required by such vendor in order to deliver such equipment in sufficient time
for HSAC to meet the applicable Launch Date.
3. HSAC OBLIGATIONS AFTER COMMISSIONING. As soon as Operator notifies HSAC that
any head-end in a Committed System conforms to the System Data Requirements,
HSAC agrees that it shall in conformity with the Activation Schedule:
3.1. install and connect the HSAC Network Equipment (subject to Section
6.2);
3.2. arrange at its expense for data transport (via telco, wireless,
etc.) from the Internet backbone to the head-ends of Operator's RF Plant for a
Committed System;
3.3. arrange telco return path circuits in One-Way Committed Systems;
3.4. commission the HSAC Network Equipment interface;
3.5. activate the data through-put portion of the HSAC Services;
3.6. begin marketing HSAC Services in the relevant areas and begin
offering subscriptions to potential Data Subscribers; and
3.7. complete the Full HSAC Services Roll-Out for such Committed System
and provide the HSAC Services for such Committed Systems.
4. UPGRADES. After initial activation of HSAC Services in a Committed System,
the Operator may reasonably request upgrades to the HSAC Network Equipment, and
HSAC shall make such upgrades at its expense within a reasonable time period,
provided that such upgrades are commercially reasonable. HSAC shall also make
substantially the same upgrades to the HSAC Network Equipment that HSAC makes to
substantially similar equipment that HSAC uses to provide HSAC or third party
customers access to the Internet. HSAC will provide Operator with all updates
and upgrades that HSAC develops or uses on any Cable System at the same prices
as such updates and upgrades are provided by HSAC to other customers of HSAC.
Neither party shall unilaterally change HSAC Network Equipment or Operator's RF
Plant in any way that renders a Committed System or the HSAC Services inoperable
without consulting with the other party regarding the allocation of costs
relating to such changes or upgrades.
5. ALLOCATION OF MAINTENANCE OBLIGATIONS.
5.1. Allocation. Following the commissioning of each Committed System,
HSAC shall maintain all HSAC Network Equipment. Operator shall maintain the
integrity of its RF
- 8 -
9
Plant for each Committed System (including, without limitation, all coaxial
cable, head-end equipment, connectors, amplifiers and passive devices and
splitters). HSAC shall not be required to repair or maintain any portion of the
RF Plant of any Committed System. Operator shall also provide technical
personnel to eliminate signal leakage and maintain a proper connection interface
of the HSAC Network Equipment to the RF Plant for each Committed System.
5.2. Damage to Operator's Facilities. HSAC shall use its best efforts
to avoid damaging the Operator's RF Plant for each Committed System, and shall
not move, relocate, alter, sell, lease, license, assign, encumber or otherwise
tamper with the RF Plant of any Committed Systems. Without limiting Operator's
rights and remedies, HSAC shall pay to repair or replace any of Operator's
equipment that HSAC or its employees damage and shall pay Operator for any
damages resulting therefrom. Such repairs shall return such Operator equipment
to at least the same condition it was before the damage, and any replacement
equipment will be at least the same quality as the Operator equipment that is
replaced.
5.3. Damage to HSAC Network Equipment. The HSAC Network Equipment shall
be the property of HSAC. Operator shall use its best efforts to avoid damaging
the HSAC Network Equipment, and shall not move, relocate, alter, sell, lease,
license, assign, encumber or otherwise tamper with the HSAC Network Equipment.
Without limiting HSAC's rights and remedies, Operator shall pay to repair or
replace any of HSAC's equipment that Operator or its employees damage and shall
pay HSAC for any damages resulting therefrom. Such repairs shall return the HSAC
Network Equipment to at least the same condition it was before the damage, and
any replacement equipment will be at least the same quality as the HSAC Network
Equipment that is replaced.
6. HOME EQUIPMENT PACKAGE.
6.1. Equipment Choice. Operator and HSAC shall mutually choose the
vendor/brand* of HSAC Network Equipment and cable modems for each Committed
System, and HSAC shall procure the Home Equipment Packages for Data Subscribers
(except for Data Subscribers who purchase their own). Such Home Equipment
Packages shall be installed in accordance with Section 6.2 below. Upon
installation of such Home Equipment Packages, HSAC shall monitor and maintain
electronically the Home Equipment Package for each Data Subscriber. Unless
purchased directly by a Data Subscriber from Operator or a third party
reseller/retailer, HSAC shall retain ownership of the Home Equipment Packages.
Each Data Subscriber shall be required to sign a statement acknowledging HSAC's
ownership of the Home Equipment Package. (*For purposes of this Agreement,
Com2l, Terayon and any other brands the parties may from time to time agree upon
shall be deemed acceptable brands.)
6.2. Installation And Modem Revenue Sharing. Either party may install
Home Equipment Packages or engage qualified third party installers to install
Home Equipment Packages for Data Subscribers. The party that installs Home
Equipment Packages shall keep 100% of the Installation Fee (which Installation
Fee will not exceed one hundred fifty dollars
- 9 -
10
($150) per Data Subscriber). CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY
WITH THE COMMISSION. If HSAC rents any equipment that is part of the Home
Equipment Package to a Data Subscriber, then HSAC shall be entitled to retain
100% of such rentals up to a maximum of $14.95 per month per Data Subscriber,
and all rentals in excess of such amount will be divided equally between HSAC
and Operators. Nothing in this Section 6.2 shall limit Operator's ability to
charge and retain separate fees for connecting any Cable Subscriber's or Data
Subscriber's home to a Cable System or adding additional outlets in a Cable
Subscriber's or Data Subscriber's home.
7. ALLOCATION OF GENERAL OPERATIONAL RESPONSIBILITIES OF OPERATOR AND HSAC.
During the Term of this Agreement as to each Committed System, the following
provisions shall be applicable:
7.1. Operator Responsibilities. Operator agrees to maintain its RF
Plants and facilities in the Committed Systems in conformity with industry
standards and the System Data Requirements set forth in EXHIBIT B for the
carriage of HSAC Services throughout the Committed Systems.
7.2. HSAC Responsibilities. Following the commissioning of each
Committed System, in addition to the obligations set forth in Section 3.1 above,
HSAC agrees that it shall throughout the Term:
7.2.1. complete the Full HSAC Services Roll-Out and provide
the HSAC Services for Data Subscribers in the Committed Systems;
7.2.2. undertake and ensure that the HSAC Services, all HSAC
Network Equipment, and all software and services related to the HSAC Services
attain and maintain compliance with industry standards and the System Service
Requirements;
7.2.3. take all reasonable efforts to ensure that HSAC
Services are received only by Data Subscribers, and to take all 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;
7.2.4. following activation of HSAC Services, control the flow
of data that it manages from the Committed Systems to the Internet Portal, and
HSAC shall be responsible for third-party software utilized to perform the HSAC
Services;
7.2.5. provide a toll-free telephone number and a Network
Operating Center ("NOC") and Customer Service Call Centers ("Call Center")
staffed 24 hour a day, 7 day a
- 10 -
11
week basis (including weekends and holidays) via pager, cell phone, or similar
means ("24x7") with telephone support representatives to take calls from Data
Subscribers in the Committed System regarding Service Failures, the
operation/performance of the Home Equipment Package, and the Internet browser
and electronic mail software provided by third parties. HSAC shall answer all
such Data Subscriber calls with a greeting mutually agreed upon by the parties.
(Operator shall similarly provide HSAC with 24 x 7 "customer service response"
for the Committed System/RF portion of the HSAC Services.) HSAC shall make its
engineers and technicians available as needed to provide technical support and
to serve as liaisons between or among the Data Subscribers, Operator, and HSAC.
7.3. Certain Joint Responsibilities. Operators and HSAC agree:
7.3.1. that if either party becomes aware that any
unauthorized party is receiving or transmitting any part of the HSAC Services,
then such party shall notify the other party in writing of the name and address
of such party if and when the first party actually knows the name and address of
such third party;
7.3.2. to exercise their commercially reasonable 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;
7.3.3. to comply with all applicable local, state and federal
laws, rules, regulation and franchises in all material respects;
7.3.4. to notify the other's NOC and Call Center promptly of
any material outages, interruptions, or degradation of service in either
Operator's RF Plant 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 shall provide technical
personnel within 4 hours (or on a commercially reasonable basis) of such Notice
to respond to such Service Failure and shall repair or replace any
malfunctioning equipment as soon as commercially practicable. To the extent the
Service Failure is traceable to HSAC Network Equipment or a data stream
malfunction, HSAC shall correct the Service Failure within 4 hours (or on a
reasonable commercial efforts basis) of such Notice or replace any
malfunctioning equipment as soon as commercially practicable; and
7.3.5. to cooperate and work together diligently to respond to
all Service Failures, and coordinate the scheduling of maintenance that might
interfere with the HSAC Services, provided that HSAC shall be responsible for
all NOC and customer service functions and requirements not related to the RF
Plant of Operator's Cable Systems. Both parties acknowledge that Service
Failure-related downtime, incorrect or inaccurate Data Subscriber invoicing, and
infrastructure problems shall be given highest priority attention at all times.
Operator and HSAC shall each have access to the other's NOC and Call Center on a
- 11 -
12
24x7 basis for the purpose of troubleshooting Service Failures pursuant to
agreed-upon Escalation Procedures, which are attached hereto as EXHIBIT C.
7.4. Billing; End User Agreement. The procedure for processing
subscriptions for HSAC Services, the invoicing of Data Subscribers, and the
sharing of Gross Revenues shall be as set forth on EXHIBIT D attached hereto.
HSAC shall also distribute to and require Data Subscribers to sign an "End
User/Services Agreement" substantially in the form of EXHIBIT E attached hereto
which describes the limits placed on Data Subscribers' rights; provided, that
HSAC shall be under no obligation to enforce the terms of such End User/Services
Agreement.
7.5. Data Subscriber Cancellation/Disconnect. In the event a Data
Subscriber terminates cable TV services with Operator and also cancels its
subscription to HSAC Services at the same time, Operator shall notify HSAC of
same and use its commercially reasonable efforts to recover and store (but does
not guarantee that it shall be able to recover), any rented Home Equipment
Package (except for the Ethernet card inside the customer's PC) for and on
behalf of HSAC. HSAC and Operator agree that in the event a Data Subscriber
cancels only its subscription to HSAC Services, HSAC shall likewise notify
Operator and be solely responsible for recovering any rented Home Equipment
Package.
7.6. Promotional and Build-Out Activities.
7.6.1. The parties shall cooperate reasonably with one another
regarding the marketing and promotion of HSAC Services to Cable Subscribers with
the aim of maximizing the number of Data Subscribers to the extent economically
feasible. Such cooperation shall include (i) at Operator's discretion,
installation of a "drop/install" at Operator's reasonable expense (may be passed
on to the Cable Subscriber) to any Home Passed, (ii) at HSAC's discretion,
Operator's installation of a "drop/install" for any commercial sites in a
Committed System for which HSAC will pay Operator's reasonable expenses (that
may be passed on to the commercial customer), and (iii) reasonable provision of
free advertising for the HSAC Services in the form of "ad avails" (i.e.,
advertising space which is not sold or committed to third parties that Operator
designates at its sole discretion as being available for advertising for HSAC
Services, "Charter Pipeline," "Marcus OnLine", "Charter Communications", "Marcus
Cable", or other brands as Operator may designate at its sole discretion) on
Operator's cable TV system, space in bills, statement messaging, and space in
installation packs. HSAC shall be responsible for the incremental expenses (if
any) associated with Operator's handling xxxx stuffers, space in bills,
statement messaging, and installation packs that are implemented at HSAC's
request. In addition, HSAC shall reimburse Operator for forty thousand dollars
($40,000) dollars annually in the aggregate expended by Operator for television
advertising to promote the Operator's Internet access brands under which HSAC
Services are provided.
7.6.2. All marketing and promotional materials, and any
materials that have an Operator owned or controlled trade or service xxxx on
them, will comply with the Quality
- 12 -
13
Controls specified on EXHIBIT F hereto. Before any such materials prepared by
HSAC are used, HSAC will transmit a copy to Operator, and Operator will have
fifteen (15) days in which to reasonably reject such materials or to request
changes be made to such materials. If Operator does not respond to HSAC within
such fifteen (15) day period, such materials will be deemed approved for
distribution. All marketing and promotional materials will comply with the
branding provisions set forth in Section 7.6.5 below and shall be of a standard
of quality comparable to marketing and promotional materials prepared and
distributed by Operator. Operator grants to HSAC a worldwide, non-exclusive
royalty-free licensee to use and reproduce Operator's trademarks, service marks,
and brands and to distribute any marketing and promotional materials supplied to
HSAC by Operator (in Operator's sole discretion) for purposes of advertising and
marketing the HSAC Services in accordance with the terms and conditions hereof.
7.6.3. HSAC's marketing team will meet quarterly with each of
Operator's regional marketing teams and jointly review marketing plans,
strategy, and materials for each Committed System to assure acceptable quality
standards in accordance with the procedures in EXHIBIT I and Charter's current
Charter Pipeline Branding Guidelines. By October 31 of each calendar year during
the Term, HSAC shall also provide Operator with a copy of HSAC's marketing plan
(which when implemented shall substantially conform to Operator's approved
annual marketing plans for the following year), which Operator may approve or
reject in its reasonable discretion. The parties agree to confer and work
together to effect any appropriate revisions to HSAC's annual marketing plans
and materials, provided that Operator shall not be entitled to unilaterally
dictate HSAC's levels of marketing expenditures or HSAC's creative decisions or
choice or relative emphasis across various marketing channels, so long as the
foregoing shall not result in any detriment to or denigration of Operator's
brand image.
7.6.4. Subject to Section 7.8 below, 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 solely for
the purpose of developing and implementing HSAC's marketing plans, as well as
providing "On-Line Help-Desk" modem configuration support, Data Subscriber
sign-up, and ongoing customer service.
7.6.5. Branding
(a) Without limiting HSAC's obligations under the
Content Agreement, the parties agree that all HSAC Services (and all
other Internet access and related services performed by HSAC within any
Committed Systems' areas) shall be marketed, deployed, and supported in
the Committed Systems only under the trademarks "Charter Pipeline,"
"Marcus OnLine", "Charter Communications", "Marcus Cable" or other
brands, service marks, and trademarks as Operator may designate.
Operator shall be responsible for registering such brands, service
marks, and trademarks and obtaining a matching or closely related
domain name. Any such domain names shall be owned by the relevant
Operator, or if they are temporarily
- 13 -
14
owned by HSAC, HSAC shall take all steps necessary promptly to transfer
and assign such domain names to the relevant Operator.
(b) Subject to reasonable Operator oversight, HSAC
shall produce and distribute all marketing materials and execute all
marketing plans applicable to the HSAC Services. All marketing and
promotional materials and any materials that have an Operator owned or
controlled trademark on it shall comply with the Quality Controls
specified in EXHIBIT F and before any such materials are used, a copy
shall be sent to Operator, who shall have fifteen (15) days in which to
reject such materials or to request changes be made to such materials.
If Operator has not responded to HSAC within the fifteen (15) day
period, such materials shall be deemed approved for distribution.
(c) Operator shall contribute reasonable ad avails
(i.e., advertising space which is not sold or committed to third
parties that Operator designates at its sole discretion as being
available for advertising for HSAC Services, "Charter Pipeline,"
"Marcus OnLine", "Charter Communications", "Marcus Cable", or other
brands as Operator may designate at its sole discretion), space in
xxxxx, xxxx stuffers, statement messaging, and space in cable
installation packs to promote the sales of subscriptions to HSAC
Services to Cable Subscribers.
(d) Subject to all of the terms and conditions of
this Agreement, if a Committed System is withdrawn from this Agreement,
then HSAC shall be permitted to continue to use those trademarks,
service marks, and brands owned by Operator that HSAC had been using
for dial up Internet access services provided in such Committed System
immediately before such Committed System was withdrawn from this
Agreement for a six (6) month transition period but only for the dial
up Internet access services provided within such Committed System's
area.
7.6.6. Operator shall not be obligated to expand or upgrade
its RF Plants in the Committed Systems after a Launch Date. However, the parties
agree to jointly review and evaluate periodically the economic feasibility of
expanding or upgrading such RF Plants in order to increase the number of Homes
Passed and/or commercial Data Subscribers and to determine how such costs shall
be shared.
7.7. Complimentary and Discounted Employee Accounts. HSAC shall at
Operator's direction provide to Homes Passed in each Committed System
complimentary HSAC Services accounts (except that, unless expressly set forth
below to the contrary, such recipients of complimentary service must pay for
their own Home Equipment Packages as would any other Data Subscriber) as
follows:
7.7.1. on a complimentary basis, up to five (5) transferable
accounts as designated by Operator;
- 14 -
15
7.7.2. on a complimentary basis, the greater of five (5)
additional government/"community service" accounts per Committed System or one
per franchise in each Committed System;
7.7.3. on a complimentary basis, the number of additional
accounts (complete with the modem/Home Equipment Package in this case only)
necessary for use within Operator's office(s) to support the HSAC Services (via
multiple modems or single-modem with hub/proxy server distribution as the
parties may agree);
7.7.4. such additional complimentary accounts as HSAC in its
sole discretion shall determine; and
7.7.5. on a fifty percent (50%) discount basis, additional
accounts for Operator's employees at their residences within a Committed System.
7.8 Ownership of Customer Information. Notwithstanding anything to the
contrary set forth in this Agreement, the Data Subscribers and any Customer
Lists shall be deemed to be owned solely by, and shall be solely the property of
Operator, and all dial-up subscribers to the HSAC Services and related customer
lists shall be deemed to be owned solely by, and shall be solely the property
of, HSAC.
8. CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
9. ENCRYPTION. HSAC may at its option make available security and encryption
equipment and/or software to Data Subscribers at no additional charge to
Operator; provided, that HSAC is not obligated to do so, nor shall Operator be
liable or responsible in any way for the installation and performance of such
equipment or software. HSAC represents and warrants that any such security and
encryption equipment and software will not interfere with the operation of the
Committed Systems in any way.
10. CONFIDENTIAL INFORMATION.
10.1. Confidentiality. Each party agrees that it shall not, during or
for a period of five (5) years 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 (i) not disclose any Confidential Information
to any third person without the express written consent of the other party; (ii)
not use, directly, indirectly, or in concert with any other person, any
Confidential Information for any purpose other than
- 15 -
16
the performance of their obligations under this Agreement; (iii) 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 Confidential Information, all such copies shall bear the same
confidentiality notices, legends, and intellectual property rights designations
that appear in the original versions.
10.2. Exceptions. The confidentiality obligations set forth in Section
10.1 shall not be applicable to Confidential Information which is: (i) in the
public domain; (ii) 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 at the time of its receipt;
(iii) properly obtained hereafter from a source who is not under an obligation
of confidentiality with respect to such information; (iv) can be shown to have
been independently developed by the receiving party through persons who have not
had, either directly or indirectly, access or knowledge of such Confidential
Information; or (v) obligated to be produced by law, provided that any party
that is so ordered to produce Confidential Information shall give notice thereof
to the other party and cooperate reasonably with any attempt by the notified
party to enjoin its disclosure.
10.3. Destruction of Data. Apart from HSAC's obligations to Operator
under this Section 10 concerning confidentiality, HSAC shall have no obligation
to delete or destroy Operator's information, including Operator's Customer Lists
or other 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
reasonable expenses associated with the early deletion or destruction of all
such data.
11. OWNERSHIP OF MARKS.
11.1. HSAC Marks. Operator acknowledges that the names and marks "HSA,"
"HSAC," "HSA Network," "High Speed Access Network," "HSA Data Network," "Darwin
Networks," "XXXX.xxx" 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 HSAC Service, are the
exclusive property of HSAC. Operator has not and shall not acquire any
proprietary rights thereto by reason of this 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.
11.2. Operator's Marks. Conversely, HSAC acknowledges that the names
and marks "Charter," "Charter Communications," "Charter Pipeline," "Charter
Mail," "Marcus
- 16 -
17
OnLine," and other Operator logos, program names, trademarks, service marks,
programs, manuals, documentation, host names, domain names, and other support
materials under which the HSAC Services shall be rolled-out under this Agreement
or otherwise used in connection with the HSAC Services, are the exclusive
property of Operator. HSAC has not and shall not acquire any proprietary rights
thereto by reason of this Agreement other than its contract rights hereunder,
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. HSAC
shall not publish or disseminate any material that violates any restriction
imposed by Operator.
12. REPRODUCTION OF MANUALS AND DOCUMENTATION. Subject to the provisions of
Sections 10 and 11.1, 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 by HSAC.
13. REPRESENTATIONS AND WARRANTIES.
13.1. HSAC hereby represents and warrants to Operator as follows:
13.1.1. HSAC is a corporation duly organized, validly existing
and in good standing under the laws of the state of Delaware, and is duly
qualified to do business as a foreign corporation in all jurisdictions in which
it conducts its business.
13.1.2. HSAC's execution, delivery, and performance of this
Agreement and each of the Other Agreements have been duly authorized by all
requisite corporate action, and this Agreement and each of the Other Agreements
constitutes a legally valid and binding obligation of HSAC enforceable in
accordance with their terms, except as may be affected by laws relating to
bankruptcy or insolvency or the application by a court of equitable principles.
13.1.3. HSAC's execution, delivery, and performance of this
Agreement and each of the Other Agreements shall not violate, conflict with
and/or result in a breach or default under HSAC's certificate of incorporation,
bylaws or other charter documents, or any judgment, award, decree, agreement or
other instrument to which HSAC is a party.
13.1.4. No approval, authorization, consent, or order or
filing with any court, or governmental or administrative agency or any third
party is required in order for HSAC to enter into, deliver, and perform this
Agreement, each of the Other Agreements, and the transactions contemplated
herein and therein.
13.1.5. HSAC either owns or has properly licensed all rights
under patent, copyright, trademark, trade secret, and other domestic and foreign
intellectual property laws (collectively, "Intellectual Property Laws") that are
necessary or required to perform the Full HSAC Services Roll-Out, the HSAC
Services, and the other services to be performed by
- 17 -
18
HSAC hereunder and under the Network Agreements, including, without limitation,
all rights under Intellectual Property Laws relating to any equipment
(including, without limitation, the HSAC Network Equipment), software or Content
that HSAC shall use or shall provide in connection with the Full HSAC Services
Roll-Out, the HSAC Services, and the other services to be performed by HSAC
hereunder and under the Network Agreements. HSAC's provision and/or operation of
the Full HSAC Services Roll-Out, the HSAC Services, and the other services to be
performed by HSAC hereunder and under the Network Agreements shall not violate
or infringe any Intellectual Property Laws or violate or infringe any rights of
third parties.
13.1.6. To the best of its knowledge, HSAC has taken all
actions necessary and appropriate to assure that there shall be no material
adverse change to its business or electronic systems or material interruptions
in the operation and delivery of HSAC Service 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, (iii) or during transport
from the customer 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
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 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. HSAC does not
warrant that interruptions in HSAC Service will not occur due to the network or
systems failures of other parties, including utilities and phone services,
caused by "Year 2000 problems."
13.2. Each Operator hereby represents and warrants, severally, but not
jointly, and only as to itself, to HSAC as follows:
13.2.1. It is a corporation duly organized, validly existing,
and in good standing under the laws of its jurisdiction of incorporation and is
duly qualified to do business as a foreign corporation in all jurisdictions in
which it conducts its business.
13.2.2. Their execution, delivery, and performance of this
Agreement and each of the Other Agreements have been duly authorized by all
requisite corporate action, and this Agreement and each of the Other Agreements
constitutes a legally valid and binding obligation of each of them enforceable
in accordance with their terms, except as may be affected by laws relating to
bankruptcy or insolvency or the application by a court of equitable principles.
- 18 -
19
13.2.3. Their execution, delivery, and performance of this
Agreement and each of the Other Agreements shall not violate, conflict with
and/or result in a breach or default under their respective certificates of
incorporation, bylaws or other charter documents, or any judgment, award,
decree, agreement or other instrument to which either of them is a party.
13.2.4. No approval, authorization, consent, or order or
filing with any court, or governmental or administrative agency or any third
party is required in order for it to enter into, deliver, and perform this
Agreement, each of the Other Agreements and the transactions contemplated herein
and therein.
13.2.5. The franchise agreements with the various franchising
authorities with jurisdiction over the Committed Systems do not and will not
prohibit Operator from offering the HSAC Services directly or through HSAC under
this Agreement. Operator shall bear all costs associated with obtaining any such
"data over cable" franchise rights and authorizations (if so needed), pay any
franchise taxes related or applicable thereto, and indemnify HSAC with respect
to any such costs or taxes, whether or not retroactively assessed.
13.2.6. Operator either owns or has properly licensed all
rights under Intellectual Property Laws that are necessary or required to
utilize Operator's trademarks, service marks, or brands and the marketing and
promotional materials licensed to HSAC hereunder, and HSAC use of the foregoing
shall not violate or infringe any Intellectual Property Laws or intellectual
property rights of third parties.
13.2.7. To the best of its knowledge, it has taken all actions
necessary and appropriate to assure that there shall be no material adverse
change to its business or electronic systems or material interruptions in the
operation and delivery of HSAC Service 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, (iii) or during transport from the customer 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 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 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. Operator does not warrant that interruptions in HSAC Service will not
occur due to the network or systems failures of other parties, including
utilities and phone services, caused by "Year 2000 problems."
- 19 -
20
14. INDEMNITY.
14.1. HSAC will indemnify, defend, and hold harmless each Operator and
its respective affiliates, agents, successors, assigns, representatives,
officers, and directors from and against any liabilities, lawsuits, penalties,
claims, demands, awards, judgments, settlements, costs, and expenses (including,
without limitation, actual reasonable attorneys' fees and expenses on account
thereof) that arise or result from: (i) the breach by HSAC of any of its
representations, warranties, or covenants hereunder, (ii) HSAC's management,
operation, control or provision of the HSAC Services, or (iii) any violations of
any United States export control restrictions relating to the encryption
equipment and/or software made available by HSAC to Data Subscribers under
Section 9 above, including, without limitation, in any such case any
liabilities, lawsuits, penalties, or claims related to defamation, infringement,
criminal activities, and fraud, except to the extent that any such liabilities,
lawsuits, penalties, claims, demands, awards, judgments, settlements, costs or
expenses arise from such Operator's operation, management, and maintenance of
its RF Plant.
14.2. Each Operator will severally, but not jointly, and only with
respect to its own acts or omissions, indemnify, defend, and hold harmless HSAC
and its affiliates, agents, successors, assigns, representatives, officers, and
directors from and against any liabilities, lawsuits, penalties, claims,
demands, awards, judgments, settlements, costs, and expenses (including, without
limitation, reasonable attorneys' fees and expenses on account thereof) that
arise or result from: (i) the breach by such Operator of any of its
representations, warranties or covenants hereunder, or (ii) such Operator's
operation, management, and maintenance of such Operator's RF Plant, including,
without limitation, in any such case, any liabilities, lawsuits, penalties, or
claims related to defamation, infringement, criminal activities, and fraud,
except to the extent that any such liabilities, lawsuits, penalties, claims,
demands, awards, judgments, settlements, costs or expenses arise from HSAC's
management, operation, control or provision of the HSAC Services.
14.3. HSAC agrees to indemnify, defend, and hold harmless each Operator
and its respective affiliates, agents, successors, assigns, representatives,
officers, and directors, and each Operator agrees severally, but not jointly,
and only with respect to its acts or omissions, to indemnify, defend, and hold
harmless HSAC and its affiliates, agents, successors, assigns, representatives,
officers, and directors, from and against any liabilities, lawsuits, penalties,
claims, demands, awards, judgments, settlements, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses on account thereof)
that may be made 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. Each Operator
and HSAC respectively agree to notify the other parties promptly of any written
claims or demands against the indemnified party for which the indemnifying party
is deemed responsible hereunder; provided, that, any failure to so notify shall
not affect the substantive rights hereunder.
15. LIMITATION OF LIABILITY, INSURANCE.
- 20 -
21
15.1. Limitation of Liability. EXCEPT FOR THE INDEMNIFICATION
OBLIGATIONS DETAILED IN SECTION 14 ABOVE, IN NO EVENT WILL EITHER PARTY HERETO
BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES (EVEN IF THAT PARTY HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES), ARISING FROM OR RELATED TO A BREACH OF THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS.
15.2. Insurance. At all times during the Term, HSAC shall maintain: (i)
appropriate policies of general liability, casualty, and business interruption
or disruption insurance, each with aggregate coverage of at least two million
dollars ($2,000,000) with commercially reasonable deductibles; (ii) appropriate
workers compensation insurance to cover HSAC's employees against injury to
themselves or others and casualty accidents while performing HSAC Services; and
(iii) appropriate insurance policies with at least two million dollars
($2,000,000) of coverage per incident with commercially reasonable deductibles
covering against claims for intellectual property infringement. All such HSAC
insurance policies shall name Operator as an additional insured party.
15.3. Specific Performance. HSAC and Operator each acknowledges that
the rights granted, and services to be provided to each other hereunder are of a
special, unique, unusual, extraordinary, and intellectual character, giving them
peculiar value, the loss of which cannot be reasonably or adequately compensated
in damages, and that an actual or threatened material breach by either party
hereunder would cause the other party irreparable injury and damage. Subject to
Section 9.2.2 off the Content Agreement, each party agrees that, if it commits
or is about to commit a material breach of this Agreement, the other party will
be entitled to injunctive or other equitable relief as a remedy for any such
actual or threatened material breach, without the requirement to post any bond
or other security therefor.
16. TERM OF AGREEMENT. The term ("Term") of this Agreement shall commence on the
Effective Date, and as to a particular Committed System, continue for a term of
five (5) years thereafter from the Launch Date for each such Committed System
(the "Initial Term"). Following such Initial Term, this Agreement shall
automatically renew itself on a year-to-year basis (a "Renewal Term") unless
terminated by notice from either party at least three (3) months prior to the
expiration of the Initial Term or any such Renewal Term.
17. [Intentionally Deleted]
18. TERMINATION
18.1. Operator Remedies. In addition to all of Operator's other rights
and remedies at law or equity, Operator has the right to (i) terminate this
Agreement, (ii) renegotiate this Agreement, (iii) remove a particular Committed
System from this Agreement, or (iv) retract HSAC's exclusive rights as to a
particular Committed System, if there has been a Termination Event as set forth
in Section 18.3 hereof. Operator's selection of any one of these remedies
- 21 -
22
shall not preclude Operator from selecting any other of such remedies for the
same or other Termination Event. Except as set forth in Sections 18.6 and 19
below, in the event that a Termination Event occurs which is limited to a
particular Committed System, Operator may exercise the forgoing rights only with
respect to the Committed System in question and not this entire Agreement.
18.2. Actions upon Termination. Except as set forth in Section 18.4 to
the contrary, upon any termination or cancellation of this Agreement as to a
particular Committed System for any reason whatsoever: (i) such Committed System
shall be removed from EXHIBIT A and from this Agreement, (ii) Operator shall
purchase from HSAC at book value (based on straight line depreciation) any
ownership rights that HSAC has in the HSAC Network Equipment, Home Equipment
Package, or any other equipment or software owned by HSAC that is committed to
such Committed System; (iii) HSAC shall comply with the Conversion Requirements
with respect to such Committed System; and (iv) HSAC shall transfer to Operator
all Confidential Information, Customer Lists, and any data related to or about
the Data Subscribers relating to the applicable Committed Systems.
18.3. Termination Events. The following shall be deemed "Termination
Events:"
18.3.1. HSAC fails to meet Launch Date applicable to a
particular Committed System;
18.3.2. HSAC fails at any time to comply with the System
Service Requirements in any material respect and has not cured such lack of
compliance to Operator's reasonable satisfaction within sixty (60) after
Operator has provided HSAC with written notice of such non-compliance. Operator
shall have the right to at least once every three (3) months to reasonably audit
or observe HSAC's operations in order to determine if HSAC is complying with the
System Service Requirements;
18.3.3. There is a failure of the HSAC Services and/or the
HSAC Network Equipment such that the HSAC Services are not available to a
majority of Data Subscribers in a Committed System in the same manner as such
HSAC Services are normally available to such Data Subscribers, which failure is
not cured or repaired within thirty (30) days after Operator gives HSAC written
notice thereof;
18.3.4. HSAC becomes insolvent, or a petition under any
bankruptcy act shall be filed by or against HSAC (which petition shall not have
been dismissed within thirty (30) days thereafter), or HSAC executes an
assignment for the benefit of creditors, or a receiver is appointed for HSAC or
its assets, or HSAC takes advantage of any insolvency or any like statute;
18.3.5. HSAC fails to upgrade or replace any equipment or
software used in relationship with the HSAC Services such that such equipment no
longer complies with the
- 22 -
23
vendor's standards and/or industry standards for such equipment, and such
failure is not cured within thirty (30) days after Operator gives written notice
thereof to HSAC;
18.3.6. HSAC shall fail to pay to Operator any and all sums
payable to Operator as and when due hereunder within thirty (30) days after
Operator gives HSAC written notice of such failure;
18.3.7. HSAC shall fail to carry, distribute and support the
Vulcan Content (as defined in the Content Agreement) on an exclusive basis for
all Cable Systems and other HSAC customers utilizing the HSAC Services in
accordance with the terms of the Content Agreement, HSAC shall carry any
Competing Content (as defined in the Content Agreement) in violation of the
Content Agreement, or HSAC shall breach the provisions of Section 6.3 of the
Content Agreement; and
18.3.8. CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY
WITH THE COMMISSION.
18.4. Termination other than for a Termination Event. In addition to
Operators other rights and remedies hereunder, Operator shall have the right at
any time to withdraw any Committed System or terminate HSAC's exclusive rights
to provide HSAC Services with respect to any such Committed Systems for any
reason not covered in Sections 18.3, 18.6 and/or 19. If Operator does so, then
such Committed System shall be withdrawn from this Agreement, provided that (i)
Operator has provided ninety (90) days prior written notice, (ii) Operator pays
to HSAC the Termination Fee, (iii) Operator shall purchase from HSAC at book
value (based on straight-line depreciation) any ownership rights that HSAC has
in the HSAC Network Equipment and Home Equipment Package related to such
Committed System, and (iv) if such termination occurs within twelve (12) months
after the Launch Date with respect to a Committed System, Operator shall
reimburse HSAC for HSAC's actual, out-of-pocket marketing expenses paid by HSAC
with respect to such Committed System prior to date of termination.
Notwithstanding the foregoing, if Operator's withdrawal of a Committed System
from this Agreement under this Section 18.4 occurs as a result of Operator's
sale or other disposition of such Committed System, and the successor MSO or
other successor owner or operator of such Committed System assumes Operator's
obligations hereunder with respect to such Committed System, then Operator shall
not be obligated to comply with the provisions of subsections 18.4(ii), (iii)
and (iv) above in connection with such termination.
18.5. Replacement of Committed Systems. If upon the removal of a
Committed System from this Agreement for any reason other than termination or
expiration of this Agreement, the aggregate number of Homes Passed in all
Committed Systems hereunder falls below 750,000, then Operators will designate
additional Cable Systems as Committed Systems hereunder such that the total
number of Homes Passed in all Committed Systems under this Agreement is not less
than 750,000.
- 23 -
24
18.6. Termination for Repeated Withdrawal of Committed Systems. In the
event that Operator withdraws from this Agreement pursuant to Section 18.1 above
(not including Committed Systems withdrawn pursuant to Section 18.4 above) a
number of Committed Systems equal to or greater than 50% of the total number of
Committed Systems initially included in Exhibit A to this Agreement as of the
Effective Date, then Operator shall have the right to terminate this Agreement
upon thirty (30) days prior written notice to HSAC, without any further
liability or obligation to HSAC.
19. EXCLUSIVITY TERMINATION. In addition to those reasons permitted elsewhere in
this Agreement, Operator may also terminate HSAC's exclusive rights under
Section 2.1 hereof if it is reasonably necessary to comply with any statutes,
regulations, or court orders.
20. INDEPENDENT CONTRACTORS. All work performed by HSAC in connection with the
HSAC 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 to the contrary. Each party is acting as
principal hereunder.
21. 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, embargoes, strikes, acts of God, power surges, acts or
omissions of carriers/utilities, or other causes or contingencies beyond its
reasonable control (a "Force Majeure"); provided, that (i) neither party shall
be relieved under this Section 21 from its obligations under Section 7 hereof
with respect to timely repairs of Service Failures caused by such Force Majeure,
and (ii) HSAC has complied with the manufacturers' or vendors' suggested
maintenance for any equipment used in providing the HSAC Services to the extent
such maintenance would have reduced the likelihood of or damage caused by any
Force Majeure. If any such 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 may resume performance of its duties once
the condition ceases, and the period of this Agreement shall be deemed extended
for such affected Committed System up to the length of time the condition
endured.
- 24 -
25
22. ASSIGNMENT. HSAC shall not have the right to assign this Agreement to any
person or entity without the prior written consent of Operators, except that
HSAC may without Operator's consent assign its rights, but not its obligations,
to a subsidiary of HSAC, provided, that, no such assignment will relieve HSAC of
liability for its obligations hereunder. Operators may assign this Agreement to
any person or entity, and this Agreement shall be binding and inure to the
benefit of their successors and assigns. Each party shall be permitted to assign
this Agreement and grant a security interest in its contract rights and
tangible/intangible property interests (including the HSAC Network Equipment and
Home Equipment Packages) arising under this Agreement for purposes of securing
financing from its commercial lender(s). However, as a condition to doing so,
HSAC shall be obligated to obtain non-disturbance agreements in form and
substance satisfactory to Operators from each such lender under which such
lender agrees that, notwithstanding such lender's exercise of its rights as a
secured creditor, such lender and its assigns shall not disturb, affect or
interfere with HSAC's provision of the HSAC Services hereunder. All assignments
in contravention of this Section 22 shall be null and void and of no force or
effect. Either party shall provide the other party with thirty (30) days prior
written notice of any permitted assignment hereunder.
23. 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
unless otherwise expressly permitted in this Agreement, and all such changes
shall reference this Agreement and identify the specific articles or Sections of
this Agreement that is amended, modified, or supplemented.
24. 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; (b) sent by nationally recognized overnight courier in a
postpaid wrapper, or (c) by facsimile, addressed as follows:
Notices to HSAC: HIGH SPEED ACCESS CORP.
0000 Xxxx Xxxxxx Xxx., Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: W. Xxxx Xxxxx, CEO
Phone: 000-000-0000
Fax: 000-000-0000
With a copy to: Xxxx X. Xxxxxxx, General Counsel
Phone: 000-000-0000
Fax: 000-000-0000
Notices to Operator: CHARTER COMMUNICATIONS, INC.
00000 Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxx, XX 00000
- 25 -
26
Attn: Xxxxx Xxxxx, SVP
Phone: 000-000-0000
Fax: 000-000-0000
With a copy to: Xxxx Xxxx, General Counsel
Phone: 000-000-0000
Fax: 000-000-0000
MARCUS CABLE, INC.
Attn: Xxxxx Xxxxx, SVP
Phone: 000-000-0000
Fax: 000-000-0000
With a copy to: Xxxx Xxxx, General Counsel
Phone: 000-000-0000
Fax: 000-000-0000
or to such address as the parties may provide to each other in writing from time
to time.
25. OBLIGATIONS TO SURVIVE TERMINATION. The parties recognize and agree that the
provisions of Sections 1, 10, 11,13, 14,15, 20, and 22 through 32 of this
Agreement, shall survive the cancellation, termination, or expiration of this
Agreement with respect to each Committed System.
26. GOVERNING LAW. The validity, construction, interpretation, and performance
of this Agreement shall be governed by and construed in accordance with the laws
of the State of Delaware, without reference to the conflicts of laws principles
thereof.
27. 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.
28. 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.
29. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies provided by this
Agreement and Annexes hereto are cumulative and the use of any one right or
remedy by any party shall not preclude or waive the right to use any or all
other remedies. Such rights and remedies are given in addition to any other
rights the parties may have by law, statute, ordinance, or otherwise.
- 26 -
27
30. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
any of which may be deemed an original, but all of which taken together will
constitute one and the same instrument. This Agreement may be executed and
delivered by facsimile.
31. EQUAL CONSTRUCTION. This Agreement is negotiated and drafted by parties
equally represented by counsel and no clause or provision herein should be
construed as having been drafted other than equally by both parties.
32. ENTIRE AGREEMENT. This Agreement and the Exhibits thereto and hereto
constitute the entire agreement between the parties and any parties who have in
the past or who are now representing either 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.
[The rest of this page is left intentionally blank.]
- 27 -
28
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the day and year first written above.
HIGH SPEED ACCESS CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Date:
---------------------------
CHARTER COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxx
------------------------------
Date:
----------------------------
MARCUS CABLE, INC.
By: /s/ Xxxxxx X. Xxxx
------------------------------
Date:
----------------------------
- 28 -
29
LIST OF EXHIBITS
EXHIBIT A CABLE TELEVISION/AFFILIATE COMMITTED SYSTEMS COVERED BY THIS
AGREEMENT
EXHIBIT B SYSTEM DATA REQUIREMENTS
EXHIBIT C ESCALATION PROCEDURES FOR TROUBLESHOOTING
EXHIBIT D REVENUE SPLITTING; BILLING
EXHIBIT E CUSTOMER END USER/INTERNET SERVICES AGREEMENTS
EXHIBIT F QUALITY CONTROL
EXHIBIT G SYSTEM SERVICE REQUIREMENTS
EXHIBIT H CONVERSION REQUIREMENTS
30
EXHIBIT A
COMMITTED SYSTEMS COVERED BY THIS AGREEMENT
[ATTACHED]
31
EXHIBIT B
CABLE SYSTEM DATA REQUIREMENTS
(TECHNICAL REQUIREMENTS FOR RF PLANTS)
1. HSAC shall inspect and characterize Operator's one-way and two-way
RF cable plant to determine its feasibility for digital data transmission for
One-Way or Two-Way cable modems. This characterization shall focus on the
integrity of the cable plant against interference, intermodal distortions,
ingress, system noise, and transient/impulse noise.
2. HSAC has established guidelines for Operator wishing to implement
digital data transmission on their cable plant. The guidelines shall recommend
CATV plant and equipment configurations to achieve a desired level of signal
reliability and quality in digital data transmission.
3. Operator's RF/cable network must possess at least 400 MHz of
bandwidth (with at least one (1) 6 MHz channel reserved and dedicated to HSAC
Service/data flow) and otherwise 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. Each Committed System's head-end
must also pass at least 4,000 homes.
4. HSAC shall issue a written report detailing the RF/cable network
deficiencies and recommendations for improvements, i.e., the Attainment
Measures.
ANALOG PERFORMANCE PARAMETERS
a. 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.
b. 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.
c. 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
32
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.
d. 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.
e. 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 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 shall 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 shall result
in interrupted high-speed data access service to the customer.
f. 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 shall help minimize any group delay associated with the
roll-up or roll-off of the return spectrum.
g. RETURN PLANT VISUAL CARRIER-TO-NOISE RATIO (CNR) - HSAC
guidelines specify a minimum 36 dB visual CNR over the forward 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.
h. 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 +/- 2 dB from 0.75 MHz to 5.0 MHz should also apply to
reverse video transmission.
33
i. DISTORTION - HSAC expects that the level of CSO and CTB
distortions on the return path* shall 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).
j. SIGNAL AVAILABILITY- HSAC in cooperation with the Operator
shall 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
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.
k. 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.
34
EXHIBIT C
ESCALATION PROCEDURES FOR TROUBLESHOOTING
TIER I SUPPORT
Tier I customer service/On-Line 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 shall include the following:
- Start, stop and changes of service
- Determination of service eligibility
- Product information
- Provisioning and initial setup script - IP address generation, logins,
email setup, password capturing, etc.
- Service installation and dispatch scheduling and setup
- Trouble ticket status reporting
- Initial problem resolution. Tier I shall include reasonably simple
scripted troubleshooting (based on script provided by HSCA) and cable
network related problem diagnosis
- Billing and pricing questions
TIER II SUPPORT
In the event that Tier I is not able to resolve any Service Failures or any Tier
I problems within twenty four (24) hours such Service Failure and Tier I
problems shall escalate to Tier II. 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 shall have
advanced technical troubleshooting skills and tools. Support from this group
shall include:
- Desktop OS support.
- HSAC network information.
- HSAC delivered software support.
- Problem diagnosis and resolution.
- Build knowledge base and on-line information systems.
- Handle Wed and E-mail support.
TIER III SUPPORT
In the event that Tier II is not able to resolve any Service Failures or any
Tier II problems within forty eight (48) hours such Service Failure and Tier II
problems shall escalate to Tier III. Tier III shall provide customer service and
network operations support. This group shall handle any call not able to be
resolved by Tier II. In addition to resolving the more difficult customer
problems, this group shall be doing ongoing network monitoring. This
35
group shall work twenty four (24) hours a day, seven (7) days a week with all
available personnel to resolve all Tier III problems.
Notwithstanding the above, within 60 days of the Effective Date of this
Agreement, the parties will mutually agree to a written Escalation procedure
that will, include, without limitation, daily notification to Operators of all
customers experiencing an outage or trouble call as used in the Service
Requirements Exhibit beyond 24 hours.
36
EXHIBIT D
REVENUE SPLITTING; BILLING
SPLITTING OF GROSS REVENUES.
D.1 Base Payments for HSAC Services. During the Term of this Agreement
as to a particular Committed System, if Operator designates HSAC to handle
billing of Data Subscribers, HSAC shall pay to the Operator an amount (i.e.,
"Operator's Share") equal to the percentages, by service category, as shown in
TABLE A, of Gross Revenues. If Operator decides to handle billing of Data
Subscribers, it shall pay to HSAC an amount (i.e., "HSAC's Share") equal to 100%
of Gross Revenues minus the percentage Operator's Share, by service category, of
Gross Revenues as shown in TABLE A.
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
D.2 Data Subscriber Refunds. HSAC's local management shall 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 or added to HSAC's Share, as the case may be.
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 rendered inoperable
or unusable due to the Committed Systems failing to meet System Data
Requirements or to a Service Failure traceable to the Operator's RF
Plant/Committed Systems (and such is not corrected within the period specified
in Section 7.3.4 of the Agreement) other than failures caused by a Force
Majeure.
D.3 Settlement, Verification. Within thirty (30) days following the end
of each and every calendar month during the term thereof, the party handling
billing and collection shall deliver to the other party a statement (a
"Statement") showing the computation of the Operator's/HSAC's Share (derived
from the total number of Data Subscribers and Gross Revenues) in accordance with
this EXHIBIT E, which Statement shall specify amounts collected by region, and
remit same by negotiable instrument. Each party shall keep books and records
relating to the Operator's Share and HSAC's Share in accordance with generally
accepted accounting principles, consistently applied. During the Term hereof and
for three years thereafter, both HSAC and the Operator or their authorized
representatives may, at its own expense, visit each other'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.
37
If any audit of Statements undertaken by either party in accordance with this
Section E.3 discloses a five percent (5%) or greater discrepancy from the
Statement(s) generated by the audited party, such party shall pay such amounts
to the auditing party and reimburse the auditing party for all costs incurred in
connection with such audit.
D.4 Billing. Operator shall determine on a Committed System-by-System
basis which of Operator or HSAC will invoice Data Subscribers and collect Gross
Revenues. 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. With respect to those Committed Systems where HSAC in
invoicing the Data Subscribers, HSAC shall 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 systems 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.
D.5 Most Favored Nation. Notwithstanding anything set forth herein to
the contrary, HSAC agrees that during the term of this Agreement the Operator's
Share paid to Operator under paragraph E.1 above shall not be less than that
paid to other MSO or Cable System operators with whom HSAC contracts to provide
HSAC Services.
38
EXHIBIT E
CUSTOMER END USER/INTERNET SERVICES AGREEMENTS
See attached
39
EXHIBIT F
QUALITY CONTROL
CONDITIONS AND LIMITATIONS ON OPERATOR MARKS LICENSE
OWNERSHIP.
HSAC agrees and expressly acknowledges that nothing
herein shall give it any right, title, or interest in the Operator's trademarks,
service marks, and brands (except the right to use as a licensee in accordance
with the terms of this Agreement), that the Operator's Trademarks, service
marks, and brands are the sole property of the Operators and its affiliates and
that any and all use of the Operator's Trademarks, service marks, and brands by
HSAC inures to the benefit of the Operator and its affiliates.
HSAC agrees not to raise or cause to be raised any
questions, claims or objections concerning the validity of Operator's and/or its
affiliates' title to the Operator's Trademarks, service marks, and brands on any
grounds whatsoever. HSAC agrees it will do nothing inconsistent with the
ownership of the Operator's Trademarks, service marks, and brands by Operator
and/or its affiliates and agrees to notify Operator and its affiliates of any
unauthorized or inappropriate uses of the Operator's trademarks, service marks,
and brands of which it becomes aware. HSAC shall provide reasonable assistance
(at Operator and its affiliates' expense) in any defense against challenges to
the Operator's trademarks, service marks, and brands, if requested to do so by
Operator and its affiliates.
If HSAC is required to register the Operator's
trademarks, service marks, and brands under any statute for registration of
fictitious business names or any other type of registration, HSAC shall notify
Operator and its affiliates before registration and shall only register in a
form approved by Operator and its affiliates. Upon termination of this
Agreement, HSAC shall immediately take all necessary steps to eliminate any such
registrations.
SUBLICENSES.
HSAC shall not sublicense its right to use the
Operator's trademarks, service marks, and brands under this Agreement without
the prior written consent of Operator and its affiliates, which may be withheld
for any reason.
RESTRICTIONS ON USE.
All uses of the Operator's trademarks, service marks,
and brands by HSAC shall be made together with the appropriate ["(TM)"] ["(R)"]
symbol in connection with the Operator's trademarks, service marks, and brands.
All uses of the Operator's trademarks, service marks,
and brands by HSAC shall include a legend indicating that each of Operator's
Trademarks, service marks, and brands is owned by its respective owner.
40
HSAC agrees not to use any xxxx or device identical
with or confusingly similar to the licensed Operator's trademarks, service
marks, and brands in connection with any HSAC Product or service, except as
permitted by this Agreement.
QUALITY CONTROL.
HSAC agrees to use the Operator's trademarks, service
marks, and brands only in connection with the lawful goods and/or services
specified herein, and agrees that such goods and/or services shall be of a
standard of quality at least as high as that of similar goods and/or services
produced by Operator and its affiliates. Operator and its affiliates alone shall
judge, in its reasonable discretion, whether or not HSAC has met or is meeting
the standards of quality so established.
At least once each year, HSAC shall provide Operator
and its affiliates with (i) at least one (1) representative sample of each
Licensed Product, (ii) at least one (1) representative set of materials used in
providing each Licensed Service, (iii) at least two (2) different representative
samples of advertising for Licensed Products and Services, and (iv) at least two
(2) different representative samples of advertising for Licensed Services. Upon
Operator and its affiliates' reasonable request, HSAC shall provide Operator and
its affiliates with additional, different samples of the items set forth in the
foregoing sentence and permit inspection of HSAC's operation.
If at any time HSAC's products, packaging therefor,
or services associated with the Operator's trademarks, service marks, and brands
do not meet the quality standard set forth herein as reasonably determined by
Operator and its affiliates, Operator and its affiliates shall have the right to
require HSAC to discontinue the use of the Operator's trademarks, service marks,
and brands in connection with the sale of such products and/or services unless
modifications satisfactory to Operator and its affiliates are made within ninety
(90) days from notice of disapproval.
HSAC shall comply with all applicable laws and
regulations and obtain all appropriate governmental approvals pertaining to the
sale, distribution, and advertising of goods or services covered by this
license.
COSTS OF USING OPERATOR'S TRADEMARKS, SERVICE MARKS, AND BRANDS.
HSAC shall bear any and all costs associated with the
use, printing, and placing of the Operator's trademarks, service marks, and
brands on all retail boxes, documents, or web pages.
41
EXHIBIT G
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
42
EXHIBIT H
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
43
EXHIBIT I
CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
