Exhibit 10.11
WORLDGATE AFFILIATION AGREEMENT
THIS AGREEMENT DATED OCTOBER 19, 1998, IS BETWEEN MASSILLON CABLETV, INC., WITH
ITS PRINCIPAL PLACE OF BUSINESS AT 000 XXXXX XXXXXX, XXXXXXXXX, XX 00000
(HEREINAFTER REFERRED TO AS "AFFILIATE") AND WORLDGATE COMMUNICATIONS, INC.,
WITH ITS PRINCIPAL PLACE OF BUSINESS AT: 0000 XXXXXXX XXXXX, XXXXX 000,
XXXXXXXX, XX 00000 (HEREINAFTER REFERRED TO AS "WG").
AFFILIATE AND WG (COLLECTIVELY THE "PARTIES") HEREBY AGREE AS FOLLOWS:
1. DEFINITIONS:
The following terms, abbreviations and definitions used in this Agreement
shall have the meanings set forth herein below:
(a) " COMMERCIAL ESTABLISHMENT" means non-lodging related public and
private facilities which serve the general public or selected members of the
general public, including government and professional offices and non-lodging
related retail businesses such as stores, but excluding lodging related
businesses such as hotels, resorts and casinos.
(b) "PRIVATE RESIDENCE" means a private, non-transient residential
dwelling unit.
(c) "SYSTEM(S)" means Affiliate's cable television distribution system(s),
including the facilities directly associated therewith, for the geographical
service areas identified in Exhibit A. Affiliate may, from time to time, add
additional Systems, in which event Affiliate shall provide WG with at least
thirty (30) days advance written notice of any such proposed additions to the
System, and upon the agreement of the Parties with respect to the proposed
additions this Agreement shall be promptly amended to cover the proposed
additions by the execution of supplemental and/or superseding Exhibit A(s)
setting forth the agreed and then current information relevant to such Systems.
(d) "SUBSCRIBER" means a Commercial Establishment or Private Residence
gaining access to the WorldGate-SM- Service through Affiliate's System(s).
(e) "SUBSCRIBER ACCESSIBLE CONTENT" means the data, information,
programs, displays, applications and other content (including without
limitation, the Internet) which, from time to time, are provided for access
by Subscribers to the WorldGate-SM- Service. Affiliate and WG acknowledge
that elements of such Subscriber Accessible Content, such as the Internet,
may include materials and information of unreliable, uncertain or even
objectionable origin, nature and/or character, and that Subscriber Accessible
Content is dynamic and that the providers thereof may, from time to time, and
for any reason make additions to, deletions from and otherwise modify
Subscriber Accessible Content.
(f) "TERM" means the term of this Agreement which shall commence on the
date hereof, and shall terminate five (5) years from such date, except if
renewed or terminated earlier as provided herein.
(g) "WORLDGATE-SM- PLATFORM" means the hardware and software components
to be supplied by WG to Affiliate and used by Affiliate in connection with
Affiliate's System(s) to provide Subscriber access to the WorldGate Service
hereunder.
(h) "WORLDGATE-SM- SERVICE" means an interactive Internet access
service which utilizes the WorldGate Platform in connection with the
Affiliate's System(s) for addressably transmitting downstream application
information (including Subscriber Accessible Content) to Subscribers in the
System's channels (vertical blanking intervals, full video channels or MPEG
data stream) and, either utilizing separate rf sub-bands of the System's
current allocated spectrum and/or a suitable phone-network based return
facility for transmitting upstream communication.
2. AUTHORIZATION OF RIGHTS, WORLDGATE PLATFORM AND SYSTEMS, PROMOTION:
(a) During the Term hereof WG authorizes Affiliate to provide to
Subscribers, and such Subscribers to have, access to and use of the WorldGate
Service, via the WorldGate Platform in connection with Affiliate's System, in
accordance with the terms and conditions of this Agreement. For so long as the
WorldGate Service is provided hereunder as the only offering on the Systems for
Internet on a television, WG will not authorize any other person or entity to
provide the WorldGate Service to the geographic areas directly served by the
Systems.
(b) Upon the execution of this Agreement, and as the Subscriber base
increases thereafter, Affiliate shall acquire by purchase, lease or such other
acquisition transaction as may be agreed in writing by the Parties, the
additional components of the WorldGate Platform to maintain reasonable
performance characteristics for the Service, which Affiliate desires to acquire
to offer the WorldGate Service. The standard configuration components of the
WorldGate Platform as well as certain terms and conditions with respect to such
acquisition as well as the associated warranty and support of the WorldGate
Platform are also set forth in Exhibit B.
(c) Affiliate shall also provide suitable Systems as further described in
Exhibit A. The installation, maintenance and support of such Systems shall be
the sole responsibility of Affiliate and its suppliers. To enable WG to perform
its obligations hereunder Affiliate shall provide to WG (and its contractors)
reasonable physical access (upon advance notice by WG and subject to Affiliate's
security procedures) as well as continuous electronic access (via electronic
means including direct modem and Internet connections) to such Systems, and to
the WorldGate Platforms connected thereto.
(d) The Parties shall diligently promote and market the WorldGate Service
to customers which are or become part of Affiliate's Systems, including without
limitation, by providing such activities as are described in Exhibit D.
3. RESERVATION OF RIGHTS; TRADEMARKS:
(a) All licenses, rights and interest in, to and with respect to the
WorldGate Platform, the WorldGate Service (including without limitation the
Subscriber Accessible Content,) the
elements, parts and derivations thereof (including without limitation the
writings, images, displays, electronic reproductions, user interfaces, sounds,
data, information and other works embodied therein, derived therefrom or
ancillary thereto, and the media of reproduction, performance or exhibition
thereof), as well as the intellectual property rights related thereto, not
specifically granted herein to Affiliate or to Subscribers, shall be and are
expressly and entirely reserved by WG and the applicable providers of such
Subscriber Accessible Content. The rights and licenses granted to Affiliate and
the Subscribers pursuant to this Affiliation Agreement do not include any right
to sublicense any third party, in whole or in part.
(b) Affiliate agrees that it is the essence of this Agreement that,
without the specific written consent of WG, or except as otherwise set forth
herein: (i) the WorldGate Platform shall not be modified by Affiliate in any
manner; (ii) the WorldGate Platform shall not be utilized by Affiliate for any
purpose other than to provide the WorldGate Service; and (iii) Affiliate shall
not authorize any other party to do any of the acts forbidden herein
(collectively, the "Prohibited Acts"). Affiliate shall immediately notify WG
upon the occurrence or likely occurrence of any Prohibited Acts of which it
becomes aware.
(c) The Parties recognize that each other's trademarks and brands are
significant assets of the Party owning the same and that any use of such
trademarks and brands shall only be with the other's prior consent and then only
in a manner consistent with that typically used with quality and valued
trademarks and brands, and intended to promote the good will associated with the
same. As part of diligently promoting the WorldGate Service, Affiliate agrees to
prominently display the applicable WG brands in all external communications
promoting Internet access for television such as, but not limited to,
advertisements, commercials, direct mail pieces, xxxx stuffers, and price lists.
4. PAYMENTS, ACCESS FEES AND TAXES:
(a) As consideration for the rights granted and services performed
hereunder with respect to the WorldGate Service, Affiliate shall pay to WG
Subscriber Access Fees as more fully set forth in Exhibit C. Notwithstanding the
required payment of a Subscriber Access Fee as described above, the Parties
agree and acknowledge that Affiliate is free to determine what fees, if any, it
charges its customers with respect to access to the WorldGate Service. All fees
due to WG hereunder are net of all duties, franchise fees and taxes (including
interest and penalties on any such amounts) now or hereafter imposed or based
upon the licensing, rental, purchase, shipment, delivery, transmission,
exhibition, possession, or use of the WorldGate Platform, the access to any
Subscriber Accessible Content, or any transfer of technology hereunder, but
excluding however any taxes assessed upon any of WG's income or personal
property (collectively "Taxes"). Affiliate shall indemnify and hold WG forever
harmless from any liability associated with such Taxes.
(b) Except for Subscriber Access Fees all payments hereunder, including
without limitation the purchase price of the components of the WorldGate
Platform to be acquired shall be made promptly at the net invoice price (i) in
cash before shipment, or (ii) upon written credit approval by WG, within
forty-five (45) days after the receipt of an invoice for the same. The above
notwithstanding, payment for the components of the WorldGate Platform which have
been shipped to Affiliate prior to the execution of this Affiliation Agreement
is due and shall be made on or before November 15, 1998. Subscriber Access Fees
are due within forty-five (45) days of the receipt of invoice for the same.
Interest shall accrue on all amounts not paid when
due at a rate equal to the lesser of twelve (12%) percent per annum or any
maximum rate imposed under applicable laws and regulations. Payments shall not
be deferred or subjected to setoff by Affiliate, the parties will however
reasonably cooperate to adjust the Subscriber Access Fees to reflect a pro-rata
portion of any credits granted to Subscribers which are not able to receive the
WorldGate Service due to a failure of the WorldGate Platform. Payments may not
be suspended and shall continue during the pendency of any dispute hereunder.
All fees stated herein and all payments to be made to WG hereunder are expressed
in, and shall be made, in the currency of the United States unless otherwise
agreed in writing by the parties. WG reserves the right to change or limit the
amount or duration of any payment credit terms which may be extended to
Affiliate hereunder in the event of any change in the credit worthiness of
Affiliate as determined by WG in its sole discretion.
5. STATEMENTS AND REPORTS: To afford determination and/or verification of
the Subscriber Access Fees due WG shall provide to Affiliate an accounting
statement and report within forty-five (45) days after the beginning of each
calendar month in which the WorldGate Service is distributed hereunder. Said
statement shall include the following information to the extent applicable: the
number of Subscribers, the type of Subscriber accounts, the Subscriber usage,
and the total amount due for access to the WorldGate Service hereunder. Such
information may be provided electronically by Affiliate access to computer
terminals associated with the WorldGate Platform and/or in connection with a
third party standard billing interface. Affiliate acknowledges that WG requires
access to records and information relating to Subscribers in order to provide
such statements and reports and hereby consents to the same.
6. AUDIT: During the term hereof and for a period of one year after any
expiration or termination hereof Affiliate and WG shall keep accurate and
complete books and records of Subscriber accounts and their access to and use of
the WorldGate Service. Subject to the confidentiality provisions contained
herein, each of the Affiliate and WG may, not more than once during each
calendar year and upon at least thirty days prior written notice, at its expense
and during regular business hours, have the right to audit all such books and
records of the other. Such audits shall be conducted by an internationally
recognized, independent public accounting firm chosen by the auditing Party on
the auditing Party's behalf. The audited Party agrees to fully cooperate with
auditing Party's representatives and/or designees, and shall provide such
representatives and/or designees with adequate space in which to facilitate any
audit of such books and/or records. If an audit or checking reveals a
discrepancy in the Subscriber Access Fees owed for the audit period, WG and
Affiliate agree to make prompt adjustments of such accounts along with any
required credits or payments associated therewith. Upon written agreement by the
parties such audit results shall be deemed final and binding upon the parties,
absent evidence of fraud.
7. REPRESENTATIONS AND WARRANTIES OF THE PARTIES:
(a) Each of the Parties represents and warrants that (i) it has the
authority and power to enter into this Agreement and to perform its obligations
hereunder; and (ii) the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
and are deemed to be valid, binding and enforceable obligations.
8. INDEMNIFICATION AND CONTENT RISK ALLOCATION:
(a) WG shall indemnify Affiliate against (i) any award of damages and
costs made against Affiliate by a final judgment of a court of competent
jurisdiction in any such action, insofar as the same are based on a claim that
the WorldGate Platform infringes any United States patent, and (ii) any
settlements or compromises made by WG as described below. WG shall control the
defense of any such action including appeals, and all of negotiations thereof,
including the right to effect any settlement or compromise. In case the use of
the WorldGate Platform is, in any action, held to constitute such an
infringement and the use thereof is enjoined, WG shall, at its option and
expense (x) procure for Affiliate the right to continue using the WorldGate
Platform, (y) replace or modify the same so that it becomes non-infringing and
performs the same service with substantially the same quality, or (z) authorize
Affiliate to return the effected WorldGate Platform and provide Affiliate with a
refund of the purchase price, less an allowance for past use prorated based upon
the initial term of this Agreement. The above indemnity shall not apply to and
WG shall have no liability for any claim of infringement based on: (1) any use
of other than a current unaltered release of the WorldGate Platform; or (2) any
combination or use of the WorldGate Platform with non-WG hardware, software,
information, data or content, or (3) any use of the WorldGate Platform other
than is authorized herein. The foregoing states the entire liability with
respect to infringement of any intellectual property rights with regard to the
WorldGate Platform.
(b) Affiliate shall indemnify WG against (i) any award of damages and
costs made against WG by a final judgment of a court of competent jurisdiction
in any such action, insofar as the same are based on a claim of infringement
arising out of: (1) any use of other than a current unaltered release of the
WorldGate Platform; or (2) any combination or use of the WorldGate Platform with
non-WG hardware or software, or (3) any use of the WorldGate Platform other than
is authorized herein, and (ii) any settlements or compromises made by Affiliate
as described below.
(c) The Parties agree that damages and costs may arise hereunder as a
result of claims and disputes by third parties against one or both of the
Parties with respect to the Subscriber's use of Subscriber Accessible Content,
which is beyond the responsibility and/or control of the Parties. In this regard
the Parties will agree upon and implement terms and conditions for Subscriber
use of the WorldGate Service which require Subscriber's acknowledgment of such
factors as are set forth in Paragraph 1(e) of this Agreement and Subscriber's
agreement that any access to and use of Subscriber Accessible Content is and
will be the sole responsibility of the Subscriber. Subscriber's agreement to
these terms and conditions of use will be a pre-requisite to activating a
Subscriber account. Furthermore, the Parties agree to cooperate in good faith
and to take such actions as are reasonable and consistent with prudent business
practices with respect to the defense and/or settlement of such third party
claims and disputes and the equitable allocation of the resulting damages and
costs, including, without limitation, providing the other prompt notice in
writing of any such claim of which it becomes aware. The Parties acknowledge
that from time to time WG, Affiliate or both Parties may receive notice that
Subscriber Accessible Content is alleged to violate the copyright of one or more
entities ("NCL"). Upon receipt of an NCL, the Party receiving said NCL shall
notify the other Party and both Parties shall take such actions as are
reasonable and consistent with prudent business practices with respect to the
NCL.
(d) In any case in which indemnification is sought hereunder:
(i) The party seeking indemnification shall promptly notify the
other party in writing upon the initiation of any claim or litigation to
which the indemnification relates;
(ii) The party seeking indemnification shall afford the other party
the opportunity to participate in, and, at the option of such other party,
to control, any compromise, settlement, litigation or other resolution or
disposition of any such claim.
(iii) The party seeking indemnification shall fully cooperate with
the reasonable requests of the other party in its participation in, and
control of, any compromise, settlement, litigation or other resolution or
disposition of any such claim.
9. RENEWAL, TERMINATION AND DEFAULTS:
(a) Upon the expiration of the initial Term hereunder this Agreement shall
be automatically renewed for additional successive two (2) year periods
thereafter unless terminated by either Party upon ninety (90) days written
notice prior to the expiration of such initial Term or any renewal period, as
applicable. The Subscriber Access Fees payable during any renewal period shall
be WG's then current published rates or such other rates as may be agreed by the
parties in writing.
(b) In addition to all of its other rights and remedies at law and in
equity, either party shall be entitled at its option forthwith, upon giving
notice to the other party, to terminate this Agreement and all licenses granted
hereunder, (i) if said other party shall fail to perform any of its obligations
or undertakings required of it hereunder, or shall be in breach of any of its
warranties or representations herein contained, and shall not have cured or
remedied such failure or breach within sixty (60) days of written notification
thereof; provided, however that with respect to any failure to pay Subscriber
Access Fees such cure period shall be reduced to ten (10) business days from the
date of written notification hereunder; (ii) if a party hereunder commences a
voluntary case under Title 11 of the United States Bankruptcy Code as now and
hereafter in effect, or any successor statute, or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or a party consents
to the entry of an order for relief in an involuntary case, or to the conversion
of a voluntary case to an involuntary case, under any such law, or consents to
the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; a party makes any
assignment for the benefit of creditors; a party is unable or fails or admits in
writing of its inability or failure to pay its debts as such debts become due;
or the Board of Directors or other governing body of a party adopts any
resolution or otherwise approves authorization to act upon any of the foregoing,
such action shall be deemed a breach hereunder; or (iii) if any order, judgment
or decree is entered against decreeing the dissolution or split-up of such
party, and such order remains undischarged or unstated for a period in excess of
thirty (30) calendar days, such action shall be deemed a breach hereunder.
(c) Sections 8-12, and 14-16, as well as any obligation which has accrued
prior to any expiration or termination of this Agreement shall survive such
expiration or termination by a period not to exceed five (5) years from such
expiration or termination. All outstanding amounts owing hereunder shall become
immediately due and payable in the event of any expiration or termination of
this Agreement.
10. NON-WAIVER OF BREACH; REMEDIES CUMULATIVE; LIMITATION ON DAMAGES:
(a) A waiver by either party of any of the terms or conditions of this
Agreement shall not, in any instance, be deemed or construed to be a waiver of
such terms or conditions for the future or of any subsequent breach thereof. No
payment or acceptance thereof under this Agreement shall operate as a waiver of
any provision hereof.
(b) Except as set forth herein all remedies, rights, undertakings,
obligations and agreements contained in this Agreement shall be cumulative and
none of them shall be in limitation of any other remedy, right, undertaking,
obligation, or agreement of either party. IN NO EVENT SHALL EITHER PARTY
HEREUNDER BE LIABLE TO THE OTHER FOR SPECIAL, PUNITIVE, CONSEQUENTIAL (INCLUDING
WITHOUT LIMITATION ANY LOST PROFIT OR INVESTMENT AND THE LIKE), INDIRECT OR
INCIDENTAL DAMAGES, BY WAY OF INDEMNITY OR OTHERWISE.
(c) In no event shall WG be liable for damages in excess of the amounts
paid to WG hereunder with respect to the particular subject matter giving rise
to such damages.
11. NOTICES: Except as herein otherwise expressly provided, all notices,
statements and other documents desired or required to be given hereunder shall
be in writing and shall be given by overnight courier service or other personal
delivery, email or fax or other comparable immediate electronic transmission
(with a copy sent by regular U.S. mail). All notices, statements and other
documents shall be sent to:
If to WG:
Accounting statements and All other notices should be sent to:
remittances should be sent to:
WORLDGATE COMMUNICATIONS, INC. WORLDGATE COMMUNICATIONS, INC.
0000 Xxxxxxx Xxxxx, Xxxxx 000 0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attn: Accounting Services Attn: Affiliate Administration
with a copy to the General Counsel
If to Affiliate:
MASSILLON CABLETV, INC.
000 Xxxxx Xxxxx XX
Xxxxxxxxx, XX 00000
Attn: Xx. Xxx Xxxxxxx
(or at such other address as may be designated in writing by either party no
less than thirty (30) days prior to the date of transmission of the notice,
statement, etc.). Notice given by electronic transmission, courier service or by
personal delivery shall be deemed given upon delivery by the transmission
service or messenger.
12. GOVERNING LAW AND EXPORT RESTRICTIONS: All matters pertaining to this
Agreement (including its interpretation, validity, performance and breach), in
whatever jurisdiction action may be brought, shall be governed by the laws of
the State of Delaware (excluding its conflict of law provisions). The parties
hereto expressly consent and agree to submit to the jurisdiction of any court of
competent jurisdiction in the State of Delaware, and to accept service of
process outside the State of Delaware in any matter to be submitted to any such
court pursuant hereto. Wherever there is any conflict between any provision
hereof and any law or requirement with the force of law, this Agreement shall
remain valid and such provision hereof shall be restricted to the extent, and
only to the extent, necessary to bring it within the applicable requirements,
unless such restriction shall, in the opinion of WG, have the effect of
materially nullifying, or impairing, this Agreement. Affiliate shall comply
fully with all then current applicable laws and regulations relating to the
export of products and technical data including, but not limited to, any
regulations of the United States Office of Export Administration.
13. FORCE MAJEURE: Neither party shall, in any manner whatsoever, be
liable or otherwise responsible for any delay or default in, or failure of
performance (other than the failure to make payments hereunder) resulting from
or arising out of or in connection with, any "Event of Force Majeure" and no
such delay, default in, or failure of performance shall constitute a breach by
either party hereunder. For purposes of this Agreement, an "Event of Force
Majeure" in respect of a party shall mean any act, cause contingency or
circumstances beyond the reasonable control of such party, including, without
limitation, and to the extent beyond the control of such other party, any
governmental action, nationalization, expropriation, confiscation, seizure,
allocation, embargo, prohibition of import or export of goods or products,
regulation, order or restriction (whether foreign, federal or state), war
(whether or not declared), civil commotion, disobedience or unrest,
insurrection, public strike, riot or revolution, lack of or shortage of, or
inability to obtain, any labor, machinery, materials, fuel, supplies or
equipment from normal sources of supply, strike, work stoppage or slowdown,
lockout or other labor dispute, earthquake, hurricane, other natural calamity,
damage or destruction to plant and/or equipment, fire or any other accident,
condition, cause, contingency or circumstance (including, without limitation,
acts of God) within or without the United States beyond the reasonable control
of such party.
14. CONFIDENTIALITY:
(a) The recipient of any confidential information of the other hereunder
agrees to safeguard the confidentiality of such confidential information by
applying policies and procedures adequate for that purpose, including without
limitation, restricting the disclosure of this confidential information to
employees and consultants needing to know the same for the purpose of this
Agreement, who have agreed in writing to safeguard such confidential information
in a manner consistent with the provisions of this paragraph. The recipient
shall not disclose any such confidential information to any other person, firm
or corporation, or use the same except for the purpose stated hereinabove, and
shall exercise at least the same degree of care to guard against disclosure or
unauthorized use of such confidential information, as the recipient employs with
respect to its own confidential information, but in no event less than
reasonable care.
(b) The recipient shall have no obligation of confidentiality hereunder
with respect to any information which:
(i) is already properly known to the recipient other than as a
result of a prior confidential disclosure by the disclosing Party;
(ii) is or becomes publicly known otherwise than by the recipient's
(or someone receiving the information from recipient) fault or breach of
this Agreement;
(iii) is rightfully received by the recipient without restriction
from a third party who is not under an obligation of confidentiality,
directly or indirectly, to the disclosing Party;
(iv) is independently developed by the recipient without benefit of
the confidential information received hereunder;
(v) is approved for release in writing by the disclosing Party; or
(vi) is required to be disclosed by the recipient pursuant to
judicial or regulatory action, provided that the disclosing party is
promptly notified at the time such action is initiated and the recipient
fully cooperates with the disclosing Party in seeking continued
confidential treatment of such information to the extent possible.
(c) Except as may be reasonably required by applicable law, regulation or
court order, the Parties agree that neither of them shall publicly divulge or
announce, or in any manner disclose to any third party, other than its attorneys
and accountants, any of the specific terms and conditions of this Agreement,
including without limitation the Subscriber Access Fees payable hereunder, and
the parties further warrant and agree that none of their officers, directors or
employees will do so.
15. PROCEDURE PRIOR TO LITIGATION: Prior to initiating any litigation with
respect to any controversy, claim or dispute arising hereunder or related
hereto, but excluding any claim arising under Sections 3 or 14 of this Agreement
(a "Dispute") a Party must first notify the other Party and request in writing
that such Dispute be submitted to an executive committee consisting of one
senior ranking executive named by each of the Parties for such purpose. Such
named executive shall have the authority and be capable of making binding
decisions on behalf of such Party with respect to such Dispute. Within five (5)
business days following the receipt of such notice (or such other period as may
be agreed by the Parties) each Party shall have named its executive committee
participant, and within ten (10) business days following the receipt of such
notice (or such other period as may be agreed by the Parties) the executive
committee shall meet to discuss the Dispute. If the executive committee is not
able to resolve the Dispute within twenty (20) business days following the
receipt of such notice (or such other period as may be agreed by the Parties),
then either Party may proceed with the initiation of such litigation as may be
appropriate.
16. MISCELLANEOUS; ENTIRE UNDERSTANDING: The titles of the paragraphs of
this Agreement are for convenience only and shall not in any way affect the
interpretation of this Agreement. This Agreement does not in any way create the
relationship of franchise, joint venture, partnership or agency between WG and
Affiliate, and each shall remain an independent contractor, and as such shall
not act or represent itself, directly or by implication, as agent for the other
or assume or create any obligation of or in the name of the other. This
Agreement will inure to the benefit of and be binding upon the Parties and their
respective representatives, and permitted successors and assignees. This
Agreement, including the Exhibits identified herein, sets forth the entire
understanding of the parties with respect to the subject matter hereof, and all
oral agreements and all prior written agreements with respect to such subject
matter have been merged herein. No representations or warranties have been
made other than those expressly provided for herein. This Agreement may not be
modified, except by a written instrument signed by an authorized representative
of the parties, and this provision may not be waived except by written
instrument signed by an officer of the parties. This Agreement may be executed
in any number of counterparts, with each such counterpart deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument. In the event this agreement is translated into any foreign language
counterpart, the English language counterpart shall remain controlling. This
Agreement shall be presumed to have been negotiated and drafted by both Parties
for the purpose of construing any ambiguities hereunder.
IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AGREEMENT TO BE SIGNED AND
ACCEPTED BY THEIR DULY AUTHORIZED REPRESENTATIVES AS OF THE DAY AND YEAR FIRST
WRITTEN ABOVE.
Affiliate: MASSILLON CABLETV, INC. WG
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx Name: Xxxxx Xxxxxxx
Title: VP Title: VP
Date: 11/2/98 Date: 11/13/98
Tel.: 000-000-0000 Tel.: 000-000-0000
EXHIBIT A
TELEVISION DISTRIBUTION SYSTEMS
SYSTEM NAME MAILING ADDRESS BASIC SUBSCRIBERS
----------- --------------- -----------------
Massillon Cable, TV Inc. Xxx 0000, Xxxxxxxxx, XX 00000-0000 30,000
Clear Picture, Inc Xxx 000, Xxxxxxx, XX 00000,0000 15,000
Each System identified above must include at least the following minimum
facilities (to be supplemented as the Subscriber base grows):
(a) dedicated Internet Access Link - T1 or equivalent with comparable data
rates
(b) Cisco 2501 Router with IP Software (or approved equivalent)
(c) Kentrox D-Serv CSU/DSU (or approved equivalent)
EXHIBIT B
WORLDGATE PLATFORM
PLATFORM COMPONENTS AND PRICING:
Set forth below are the standard components of the WorldGate Platform and the
price for the same as of the effective date set forth below. Such prices are FOB
WG's factory, and are valid for a period of one-year from this effective date
after which time they are subject to change by WG to reflect current market
conditions, provided that WG represents that such prices as WG will charge
Affiliate for these standard components will be no less favorable than those
contemporaneously charged to like affiliates under terms and conditions
comparable to those set forth herein.
ITEM FIRST UNIT IN A HEADEND OTHER UNITS - SAME HEADEND
---- ----------------------- --------------------------
Headend Package (analog) ## ##
Large System Headend Package (analog) ## ##
Channel HyperLinking Server ## ##
WorldGate Keyboard* ## ##
* Non-U.S. language keyboards will be quoted separately.
Custom configuration options are available and will be quoted separately if
required based upon the results of a site survey and expected Subscriber base.
The above prices do not include site surveys and installation which are
available on a time and material basis at WG's customary rates (plus travel and
per diem charges.) The above prices do not include any improvements and/or
modifications to Affiliate's Systems. Notwithstanding the use of the term
"purchase" herein, such WorldGate Platform as acquired hereunder includes
certain WorldGate and third party software, microcode and documentation, whether
stored in electronic (including firmware), magnetic, optical or other media
(collectively Programs) for which title to and all proprietary rights in are
reserved to WG and its suppliers. All access to and use of such Programs is
subject to the terms and conditions of WG's Software License attached hereto and
incorporated herein as Exhibit B-1.
LIMITED PRODUCT WARRANTY:
WG hereby warrants that as installed hereunder and for a period of twelve months
thereafter ( but not more than thirteen months after delivery if there is a
delay between delivery and installation other than as may result from the
actions and/or omissions of WG) such WorldGate Platform components will perform
under normal use and service substantially in the manner specified in the
current applicable published technical specification as issued by WG prior to
the execution of this Agreement, and that for this period the hardware
components of the WorldGate Platform will be free from defects in materials and
workmanship. This warranty shall not apply to any items subjected to accident,
misuse, neglect, mishandling, unsuitable physical or operating environments or
any installation, testing, repair, adjustment or alteration by anyone other than
WG or its authorized vendors, or any use of non-approved components in
connection with the WorldGate Platform. WG's warranty hereunder extends to
Affiliate only, and to no other person or entity. This warranty shall not be
enlarged or otherwise affected by, and no obligation or liability shall arise
hereunder by WG's rendering of technical advice, help line support or service in
connection with the products furnished hereunder. Any claims
------------------------
## THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES & EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT.
arising out of the aforesaid warranty must be submitted to, and the affected
components must be returned or otherwise made available to WG in accordance with
its published procedures, during the specified warranty period. Subject to the
preceding conditions, WG will promptly examine such WorldGate Platform
components and repair or replace any such components which are defective with
respect to the above warranty. Any required service, repair or replacement (and
the costs and expenses associated therewith) which are not covered by the above
warranty will be the responsibility of Affiliate unless covered by an applicable
WG service contract.
THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING WITHOUT LIMITATION, ANY IMPLIED OR STATUTORY WARRANTY OF
NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ANY
WARRANTY HEREUNDER, EXPRESS OR OTHERWISE, IS LIMITED TO THE WARRANTY TERM AND
CONDITIONS AS SET FORTH ABOVE.
AFFILIATE TECHNICAL SUPPORT:
WG will at no additional charge to Affiliate provide technical support to
Affiliate's customer service and engineering staff, 7 days per week, 24 hours
per day, with such support to be provided by telephone, facsimile and/or the
Internet. Except as is provided by WG pursuant to the terms and conditions of
any applicable service contract or WG's written warranty herein, any required
travel from WG's facilities or support in addition to that provided by
telephone, facsimile or Internet hereunder will require payment for time and
materials at WG's customary rates, as well as reimbursement for travel and per
diem charges.
ON SITE TRAINING:
Prior to the initial launch of the WorldGate Service on Affiliate's Systems WG
will conduct one on site technical and customer service training program of up
to 3 days in duration. Additional training will be available on a time and
materials basis at WG's customary rates, as well as reimbursement for travel,
lodging and other per diem charges.
PLANT SPARES:
WG and Affiliate will cooperate to formulate and implement a recommended program
for spare parts inventory, local maintenance strategy and emergency response.
SOFTWARE RELEASES AND UPGRADES:
WG shall provide at no additional cost to Affiliate such bug fixes and other
software releases as it makes available without charge to its other affiliates,
and will use commercially reasonable efforts to notify Affiliate when it becomes
aware of such bugs.
EXHIBIT B-1
SOFTWARE LICENSE
The terms and provisions of this Exhibit B-1 (Software License) provide for the
licensing by WG to Affiliate of certain Programs (as such term is defined in the
Affiliation Agreement) furnished with and to be used either as part of or in
conjunction with the WorldGate Platform to be provided by WG to Affiliate under
an Affiliation Agreement, of which this Exhibit forms a part.
1. GRANT OF LICENSE: WG (hereinafter Licensor) hereby grants to Affiliate
(hereinafter Licensee) and Licensee hereby accepts a personal, nonexclusive
license to use the Programs on the terms and conditions set forth herein and in
the Affiliation Agreement. Except as specifically provided herein and therein,
no interest, right or license, express or implied, is granted, and such other
interests, rights and licenses are hereby reserved.
2. OWNERSHIP RIGHTS: Any reference to sale or purchase not withstanding, title
to the Programs and all copies and derivatives thereof shall be and remain in
Licensor, and no title to or ownership of the Programs or any derivative or
portion thereof is conveyed or transferred to the Licensee. Licensee
acknowledges that the Programs constitute confidential and proprietary
information and trade secrets of Licensor, whether or not the Programs, or any
portion thereof, are or may be copyrighted or copyrightable and/or patented or
patentable, and that disclosure of the Programs to Licensee is on the basis of
the confidential relationship between Licensee and Licensor under this
Agreement.
3. RESTRICTION ON TRANSFER: Licensee shall not sell, assign, sub-license,
transfer, or otherwise make available the Programs, in whole or in part, except
as may be permitted by this Software License Agreement.
4. RESTRICTION ON USE, DISASSEMBLY AND REVERSE ENGINEERING: Licensee may use the
Programs solely and exclusively on the computer(s) and associated peripherals
furnished by WG as part of the WorldGate Platform sold to Affiliate under terms
of the Affiliation Agreement, except that the Programs may also be temporarily
used on or with a compatible backup computer and associated peripherals if the
WorldGate Platform computers and associated peripherals are inoperative because
of malfunction or during the performance of preventive maintenance or
engineering changes, but only for such reasonable time as required to restore
such WorldGate Platform to operative status. Licensee shall use the Programs
only in connection with its immediate internal operations with respect to the
provision to its customers of the WorldGate Service as authorized by the
Affiliation Agreement, and shall not otherwise use nor offer or supply the use
of the Programs to others under any circumstance. Licensee shall not de-compile,
disassemble or otherwise reverse engineer the Programs.
5. RESTRICTION ON COPYING: Licensee shall make no copies (including any
derivatives) of the Programs, or any part thereof, except that Licensee may make
one (1) copy of the Program solely for the purposes of backup and archival
storage. All copies shall be clearly marked by Licensee with the same Licensor
proprietary and copyright restrictions which appear on the Programs originally
supplied to Licensee, and be stored by Licensee in a secure manner.
6. RESTRICTION ON DISCLOSURE: Except as expressly permitted herein, Licensee
shall not disclose or otherwise make available the Programs, or any portion
thereof, to any third party or to any employee or agent of Licensee who is not
of necessity reasonably authorized by Licensee to access and use the Programs as
part of Licensee's provision of the WorldGate Service. Licensee shall take all
reasonable steps necessary to ensure the Programs, or any portions, copies or
derivatives thereof, are not disclosed or otherwise made available by Licensee
(or employees or agents of Licensee) to any third party except as aforesaid.
7. TERMS AND TERMINATION: The term of this License Agreement and the license
granted hereunder shall commence on the date hereof, and shall terminate on the
earlier of: (a) when Licensee ceases to offer the WorldGate Service or when
Licensee ceases to operate or de-installs the WorldGate Platform; or (b) the
termination or expiration of the Affiliation Agreement or the failure of
Licensee to comply with any of the terms and provisions hereof or of the
Affiliation Agreement (including without limitation, the failure to pay any fees
when due), which failure continues for a period of ten (10) days after written
notice thereof.
Upon termination of this Software License Agreement all rights to use the
Programs shall terminate and Licensee shall immediately cease use of the
Programs, and shall, within one (1) month after any such termination return the
Programs and all copies thereof to WG (or upon WG's written request destroy the
same,) and xxxxxxx XX a written statement certifying that the original and all
copies and extracts (including partial copies and extracts) of the Programs and
any related material received from WG or made in connection with such license
have been returned to WG, or destroyed pursuant to WG's written request. WG
reserves all rights and remedies, whether provided by contract, at law, in
equity and/or otherwise, to enforce it rights under this license. Licensee
acknowledges and agrees that any breach or threatened breach of this software
license shall cause WG irreparable injury for which there may be no adequate
remedy at law, and that in addition to any other remedies available, WG shall be
entitled to obtain injunctive relief as well as actual damages.
Effective Date: October 19, 1998 Affiliate Initials: /s/ unintelligible WG Initials: /s/ unintelligble
EXHIBIT C
SUBSCRIBER ACCESS FEES
SERVICE ACCESS FEES FOR PRIVATE RESIDENCES:
The following WorldGate Service Access Fees are payable by Affiliate to WG on a
monthly basis for each Private Residence having access to the WorldGate Service
during such month (prorated based upon a 30 day month for Private Residences
having access to the WorldGate Service for less than a full calendar month). The
table set forth below includes various benchmarks which, if achieved, will
result in an adjustment in the particular amount payable for such Access Fees.
Affiliate's performance with respect to these benchmarks and the resultant
amounts payable hereunder shall be determined on an aggregate System wide basis
based on the results of all Systems hereunder. Any adjustment in the amount
payable for such Access Fees shall apply only for prospective periods after the
benchmarks have been achieved, and then only after written notice has been
provided by Affiliate to WG providing the details as to such achievement.
For purposes of determining the applicable rate for the Service Access Fees
payable hereunder for the Systems (x) the number of "WorldGate Private
Residences" for any month shall mean the average number of actual Private
Residences to the WorldGate Service for that month and shall include only the
Private Residences being invoiced for and paying the standard retail charge
which Affiliate invoices its customers for the WorldGate Service (Service Access
Fees are, however, payable by Affiliate to WG for all Private Residences
receiving access to the WorldGate Service irrespective of whether such standard
retail charge or any payment is made by such Private Residences to Affiliate),
and (y) the number of AWorldGate Capable Customers for any month shall mean the
average number of Affiliate's actual customers (including only those customers
being invoiced for and paying the standard retail charge which Affiliate
invoices for its television programming distribution service) which during the
month had sufficient System architecture and Head-end Package components of the
WorldGate Platform installed and operational to permit such customer to have
become a WorldGate Private Residence, had the customer so chosen, and (z) the
APenetration for any month shall mean the number of WorldGate Private Residences
divided by the number of WorldGate Capable Customers as determined above.
Monthly averages hereunder shall be determined dividing by two the sum of the
applicable number on the first and last business days of the month.
FOR AFFILIATES OFFERING THE WORLDGATE SERVICE AS AN UNLIMITED USAGE SERVICE ON
AN A' LA CARTE BASIS (INCLUDES AN ALLOTTED USAGE TIME PER SUBSCRIBER PER MONTH
WHICH IS NOT LIMITED IN NUMBER OF HOURS).
[INFORMATION REDACTED] ##
In addition to the Service Access Fees as set forth above Affiliate shall pay
to WG as Private Residence Access Fees in the event the amount which
Affiliate invoices and/or otherwise charges its customers as part Affiliate's
standard monthly retail price for the WorldGate Service exceeds U.S. ## for
an unmetered service, an amount equal to [INFORMATION REDACTED] ## percent of
such excess. For purposes of this paragraph such standard retail prices shall
be determined using the currency exchange rate specified in the Wall Street
Journal on the last business day prior to the month in question. [INFORMATION
REDACTED] ##
SERVICE ACCESS FEES FOR NON-PRIVATE RESIDENCES:
In the event that Affiliate provides the WorldGate Service to Commercial
Establishments Affiliate shall pay to WG on a monthly basis as Commercial
Establishment Access Fees an amount equal to [INFORMATION REDACTED] ##.
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## THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES & EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT.
OTHER TRANSACTIONAL REVENUE OPPORTUNITIES:
The parties anticipate that the Subscriber Accessible Content will include
opportunities to generate revenue from third parties through Channel
HyperLinking, advertising, commodity buying/selling, lead generation and similar
services, whether through direct hits or click-throughs (collectively
"Transactions") which may be facilitated by the WorldGate Platform. The Parties
further recognize that such opportunities may require commitments with
advertising agencies and other third parties as well as administrative,
accounting, and other services and associated costs, fees, and expenses in order
to permit such revenue to be generated. The Parties will work together to
maximize such opportunities. Any net revenue which is generated as a result of
such services as the Parties agree to make available to Subscribers as part of
the WorldGate Service hereunder will be shared as follows by WG and Affiliate,
after payment of such associated costs, fees, and expenses, and subject to any
required commitments as aforesaid.
Fees and other consideration generated through Transactions facilitated by the
use of the WorldGate Service, but other than through the use of Channel
HyperLinking, will be [REMAINDER OF PARAGRAPH REDACTED]##
Fees and other consideration generated through Transactions facilitated by
Channel HyperLinking will be [INFORMATION REDACTED] ##.
---------------------------
## THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES & EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT.
EXHIBIT D
MARKETING AND PROMOTION OF THE WORLDGATE SERVICE
The Parties will provide, throughout the term of this Agreement, at least the
following identified activities to market and promote the WorldGate Service:
WG WILL PROVIDE:
- four times yearly direct mail campaign to non-WorldGate Subscribers
(WG will supply creative and will provide both printing and bulk
delivery for purchase at WG's cost)
- xxxx stuffers (for purchase at WG's cost)
- four times yearly local cable interconnect advertising media buys
- four 30 and four 60 second video promotions for use as commercials,
distributed yearly
- training for customer service representatives
- selected print media placement
- camera-ready ad mats
- four-color quarterly consumer guide (for purchase at WG's cost)
- point of sale displays
- leave behind piece and on-line tutorial for consumer education
AFFILIATE WILL PROVIDE:
- four times yearly direct mail campaign to non-WorldGate households
(Affiliate will provide mailing lists, address labeling, out-bound
postage and return fulfillment costs)
- a minimum of 500 ad avails promoting the WorldGate Service with WG
approved commercials of either 30 or 60 second length per month,
inserted on Affiliate's Systems on ad supported channels as agreed
between the parties, to be run at times between 6:00 AM to 12:00 PM
(midnight local time)
- affidavits verifying above commercials
- xxxx stuffer insertion and/or envelope advertising and mailing in
Subscriber billing cycle, three times per annum
- reasonable use of local origination text-based channels (if
available) to promote WorldGate Services
- placement of WG approved 30 and 60 second commercials (or other WG
provided promotional pieces) on Affiliate's PPV promotion
channel(s), for regular rotation for two week intervals, monthly
- trained customer service representatives for all WorldGate Services
- reasonable promotion of WorldGate Service on Affiliate's web home
page
Effective Date: October 19, 1998 Affiliate Initials: /s/ unintellibible WG Initials: /s/ unintelligbile
