<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 1, 1999
REGISTRATION NO. 333-74667
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 5
TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
HIGH SPEED ACCESS CORP.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 7370 61-1324009
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
4100 EAST MISSISSIPPI AVENUE
DENVER, COLORADO 80246
(303) 256-2000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
------------------------
Copy to:
<TABLE>
<S> <C>
MR. RON PITCOCK, SR. MR. W. KENT OYLER, III
PRESIDENT CHIEF OPERATING OFFICER
HIGH SPEED ACCESS CORP. HIGH SPEED ACCESS CORP.
4100 EAST MISSISSIPPI AVENUE 1000 W. ORMSBY AVENUE
DENVER, COLORADO 80246 LOUISVILLE, KENTUCKY 40210
(303) 256-2000 (502) 515-3333
</TABLE>
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
------------------------
Copies to:
<TABLE>
<S> <C>
RICHARD R. PLUMRIDGE, ESQ. JEREMY W. DICKENS, ESQ.
JOHN E. HAYES III, ESQ. WEIL, GOTSHAL & MANGES LLP
BRUCE E. CUNNINGHAM, ESQ. 767 FIFTH AVENUE
BROBECK, PHLEGER & HARRISON LLP NEW YORK, NEW YORK 10153
1125 17TH STREET, SUITE 2525 (212) 310-8000
DENVER, COLORADO 80202
(303) 293-0760
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated costs and expenses, other than
the underwriting discounts and commissions, payable by the Registrant in
connection with the sale of the common stock being registered, all of which will
be paid by the Registrant.
<TABLE>
<CAPTION>
AMOUNT TO
BE PAID
----------
<S> <C>
SEC registration fee........................................ $ 60,565
NASD filing fee............................................. 12,500
Nasdaq National Market listing fee.......................... 95,000
Legal fees and expenses..................................... 600,000
Blue sky fees and expenses.................................. 5,000
Accounting fees and expenses................................ 250,000
Directors and officers liability insurance.................. 600,000
Printing and engraving...................................... 350,000
Transfer agent fees......................................... 10,000
Miscellaneous............................................... 16,935
----------
Total............................................. $2,000,000
==========
</TABLE>
- ---------------
* To be supplied by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Amended and Restated Certificate of Incorporation to be in
effect upon the closing of this offering (the "Certificate") provides that,
except to the extent prohibited by the Delaware General Corporation Law, as
amended (the "DGCL"), the Registrant's directors shall not be personally liable
to the Registrant or its stockholders for monetary damages for any breach of
fiduciary duty as directors of the Registrant. Under the DGCL, the directors
have a fiduciary duty to the Registrant which is not eliminated by this
provision of the Certificate and, in appropriate circumstances, equitable
remedies such as injunctive or other forms of non-monetary relief will remain
available. In addition, each director will continue to be subject to liability
under the DGCL for breach of the director's duty of loyalty to the Registrant
and its stockholders, for acts or omissions which are found by a court of
competent jurisdiction to be not in good faith or involving intentional
misconduct, for knowing violations of law, for actions leading to improper
personal benefit to the director, and for payment of dividends or approval of
stock repurchases or redemptions that are prohibited by DGCL. This provision
also does not affect the directors' responsibilities under any other laws, such
as the Federal securities laws or state or Federal environmental laws. The
Registrant has obtained liability insurance for its officers and directors.
Section 145 of the DGCL empowers a corporation to indemnify its directors
and officers and to purchase insurance with respect to liability arising out of
their capacity or status as directors and officers. The Certificate provides
that the Registrant shall indemnify any person who was or is a party or is
threatened to be made a party to or becomes involved in any action, suit or
proceeding (whether civil, criminal, administrative or investigative) by reason
of the fact that such person is or was a director or officer of the Registrant,
or is or was serving at the request of the Registrant as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement reasonably
incurred by such person in connection with such action, suit or proceeding. The
DGCL provides further that the indemnification permitted thereunder shall not be
deemed exclusive of any other rights to which the directors and officers may be
entitled under the corporation's bylaws, any agreement, a vote of stockholders
or otherwise. The Registrant has entered into indemnification agreements with
each member of the Board of Directors providing for the indemnification of the
directors to the fullest extent authorized, permitted or allowed by Delaware
law.
II-1
<PAGE> 3
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent as to which indemnification will be
required or permitted under the Certificate. The Registrant is not aware of any
threatened litigation or proceeding that may result in a claim for such
indemnification.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since the Registrant's inception, the Registrant has made the following
sales of securities that were not registered under the Securities Act:
1. On April 3, 1998, the Registrant issued and sold 6,200,000 shares of
common stock (subsequently valued by the Registrant at $.52 per share or
$3,200,000 in the aggregate) of the Registrant in exchange for 200,000 shares of
common stock of CATV.net, Inc. and 2,000,000 shares of common stock of High
Speed Access Network, Inc. in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act.
2. During the period from April 3, 1998 to August 14, 1998, the Registrant
issued and sold 5,000,000 shares of Series A Convertible Preferred Stock to
Broadband Solutions, LLC in a private placement for an aggregate consideration
of $5,000,000 in cash. Sales of Series A Convertible Preferred Stock were made
in reliance on the exemption from registration provided by Section 4(2) of the
Securities Act.
3. During the period from September 1, 1998 to November 22, 1998, the
Registrant issued and sold 2,000,000 shares of Series B Convertible Preferred
Stock to Broadband Solutions II, LLC in a private placement for an aggregate
consideration of $5,000,000 in cash and cancellation of indebtedness. Sales of
Series B Convertible Preferred Stock were made in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act.
4. On November 25, 1998, the Registrant issued and sold 8,000,000 shares of
Series B Convertible Preferred Stock to Vulcan Ventures, Incorporated in a
private placement for an aggregate consideration of $20,000,000 in cash. The
sale of Series B Convertible Preferred Stock was made in reliance on an
exemption from registration provided by Section 4(2) of the Securities Act.
5. On November 25, 1998 the Registrant issued to Vulcan Ventures,
Incorporated warrants to purchase up to an aggregate of 7,750,000 shares of
common stock of the Registrant at a purchase price of $3.23 per share. 3,875,000
of the warrants expire on July 31, 2003 and 3,875,000 of the warrants expire on
July 31, 2004. The warrants were issued in reliance on an exemption from
registration provided by Section 4(2) of the Securities Act.
6. On March 24, 1999, the Registrant issued to Atlanta On-Line Internet
Inc. warrants to purchase 20,150 shares of common stock of the Registrant at a
purchase price of $6.45 per share. The warrants were issued in reliance on an
exemption from registration provided by Section 4(2) of the Securities Act.
7. On April 29, 1999, the Registrant issued and sold 5,000,000 shares of
Series C Convertible Preferred Stock to Vulcan Ventures, Incorporated in a
private placement for an aggregate consideration of $25,000,000 in cash. The
sale of Series C Convertible Preferred Stock was made in reliance on an
exemption from registration provided by Section 4(2) of the Securities Act.
8. On April 30, 1999, the Registrant issued to Microsoft Corporation
warrants to purchase 250,000 shares of common stock of the Registrant for a
purchase price equal to 125% of the public offering price per share. The
warrants were issued in reliance on an exemption from registration provided by
Section 4(2) of the Securities Act.
II-2
<PAGE> 4
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
1.1* -- Form of Underwriting Agreement.
1.2** -- Stock Purchase Agreement between High Speed Access Corp.
and Cisco Systems, Inc., as amended May 3, 1999.
1.3** -- Stock Purchase Agreement between High Speed Access Corp.
and Com21, Inc.
1.4** -- Stock Purchase Agreement between High Speed Access Corp.
and Microsoft Corporation
3.1** -- Form of Amended and Restated Certificate of Incorporation
to be effective upon the closing of the offering.
3.2** -- Form of Amended and Restated Bylaws to be effective upon
the closing of the offering.
4.1** -- Specimen Common Stock certificate.
4.2 -- See Exhibits 3.1 and 3.2 for provisions defining the
rights of holders of common stock of the Registrant.
5.1* -- Opinion of Brobeck, Phleger & Harrison LLP.
9.1** -- Voting Trust Agreement dated as of March 30, 1999 among
Terrence J. Herron, as Voting Trustee, and Joseph S.,
Gans, III, Joseph W. Aman, Lawrence Shewack, John Howell
and Terrence J. Herron.
10.1** -- Contribution Agreement among High Speed Access Corp.,
Broadband Solutions, LLC, and certain shareholders of
High Speed Access Corp., dated as of April 3, 1998, as
amended November 25, 1998.
10.2** -- Series B Convertible Preferred Stock Purchase Agreement
between High Speed Access Corp. and Broadband Solutions
II, LLC, dated as of September 1, 1998, as amended
November 25, 1998.
10.3** -- Series B Convertible Preferred Stock Purchase Agreement
between High Speed Access Corp. and Vulcan Ventures,
Incorporated, dated as of November 25, 1998.
10.4** -- Series C Convertible Preferred Stock Purchase Agreement
between High Speed Access Corp. and Vulcan Ventures,
Incorporated, dated November 25, 1998.
10.5** -- Class A Securities Purchase Warrant between High Speed
Access Corp. and Vulcan Ventures, Incorporated, dated as
of November 25, 1998, as Assigned April 23, 1999 and as
amended April 29, 1999.
10.6** -- Class B Securities Purchase Warrant between High Speed
Access Corp. Vulcan Ventures, Incorporated, dated as of
November 25, 1998, as Assigned April 23, 1999, and as
amended April 29, 1999.
10.7 -- Systems Access and Investment Agreement among High Speed
Access Corp., Vulcan Ventures, Incorporated, Charter
Communications, Inc. and Marcus, Inc., dated as of
November 25, 1998.
10.8 -- Programming Content Agreement between High Speed Access
Corp. and Vulcan Ventures, Incorporated, dated as of
November 25, 1998.
10.9+ -- Network Service Agreement between High Speed Access
Corp., Charter Communications, Inc., and Marcus Cable,
Inc., dated as of November 25, 1998.
10.10** -- Amended and Restated Registration Rights Agreement, dated
as of November 25, 1998.
10.11** -- Voting Agreement by and among High Speed Access Corp. and
certain shareholders dated as of November 25, 1998.
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<S> <C>
10.12** -- Employment, Non-Competition and Non-Disclosure Agreement
with W. Kent Oyler, III, dated April 3, 1998.
10.13** -- Employment, Non-Competition and Non-Disclosure Agreement
with Ronnie W. Pitcock, dated April 3, 1998.
10.14** -- $650,000 Promissory Note by High Speed Access Corp. in
favor of Gans Multimedia Partnership, dated April 3,
1998.
10.15** -- Assignment and Security Agreement dated April 3, 1998
between High Speed Access Corp. and Gans Multimedia
Partnership.
10.16** -- Noncompetition and Nondisclosure Agreement dated April 3,
1998 between High Speed Access Corp. and Joseph S. Gans,
III.
10.17** -- Convertible Preferred Stock Purchase Agreement dated as
of April 3, 1998 among High Speed Access Network, Inc.,
Ronnie W. Pitcock, Joseph S. Gans, III and Broadband
Solutions, LLC.
10.18** -- Convertible Preferred Stock Purchase Agreement dated as
of February 23, 1998 among CATV.net, Inc., Kent Oyler,
David Gibbs, Gibbs Family Limited Partnership, Colorado
Limited Partnership, OPM Services, Inc. and Broadband
Solutions, LLC.
10.19** -- Convertible Preferred Stock Registration Rights Agreement
dated as of February 23, 1998 among CATV.net, Inc., Kent
Oyler, David Gibbs, Gibbs Family Limited Partnership,
Colorado Limited Partnership, OPM Services, Inc. and
Broadband Solutions, LLC.
10.20** -- Services Agreement dated February 20, 1998 between
CATV.net, Inc. and OPM Services, Inc.
10.21** -- Asset Purchase Agreement dated March 17, 1999 among High
Speed Access Corp., Atlanta On-Line InterNet, Inc.,
Marvin Anglin and Ellen Anglin.
10.22** -- Warrant to Purchase Common Stock dated March 24, 1999
between High Speed Access Corp. and Atlanta On-Line
InterNet, Inc.
10.23** -- Warrant to Purchase Common Stock of Darwin Networks, Inc.
dated as of March 15, 1999 between Darwin Networks, Inc.
and High Speed Access Corp.
10.24** -- Revolving Credit Note dated as of March 15, 1999 issued
by Darwin Networks, Inc. in favor of High Speed Access
Corp.
10.25** -- Services Agreement dated as of March 15, 1999 between
High Speed Access Corp. and Darwin Networks, Inc.
10.26** -- Amended and Restated Shareholders Agreement dated as of
November 25, 1998 among High Speed Access Corp. and
shareholders of High Speed Access Corp.
10.27** -- Master Loan and Security Agreement dated as of February
4, 1999 between Finova Capital Corporation and High Speed
Access Corp.
10.28** -- Lease dated April 1, 1998 between High Speed Access Corp.
and Henry Vogt Machine Co., as amended by a First
Amendment to Lease dated May 1, 1998, a Second Amendment
to Lease dated June 1, 1998, a Third Amendment to Lease
dated July 20, 1998, a Fourth Amendment to Lease dated
September 1, 1998, a Fifth Amendment to lease dated
November 1, 1998, a Sixth Amendment to Lease dated
January 1, 1999, and a Seventh Amendment to Lease dated
March 15, 1999.
10.29** -- HSAnet Cable Affiliate Agreement between High Speed
Access Network, Inc. and Gans Multimedia partnership
dated October 15, 1997.
10.30** -- 1998 High Speed Access Corp. Stock Option Plan
10.31** -- 1999 High Speed Access Corp. Stock Option Plan.
</TABLE>
II-4
<PAGE> 6
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
10.32** -- High Speed Access Corp. Non-Employee Director Stock
Option Plan.
10.33** -- Form of Indemnity Agreement.
10.34** -- Securities Purchase Warrant dated as of April 30, 1999
between High Speed Access Corp. and Microsoft
Corporation.
10.35** -- Letter Agreement dated as of April 30, 1999 between High
Speed Access Corp. and Microsoft Corporation.
10.36+** -- Letter of Intent between High Speed Access Corp. and
ServiceCo LLC dated as of March 31, 1999.
10.37** -- Master Services Agreement dated as of January 1, 1999
between High Speed Access Corp. and National Cable
Television Cooperative, Inc.
21.1** -- Subsidiaries.
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of PricewaterhouseCoopers LLP.
23.3 -- Consent of PricewaterhouseCoopers LLP.
23.4* -- Consent of Brobeck, Phleger & Harrison LLP (included in
Exhibit 5.1).
24.1** -- Powers of Attorney (See Signature Page).
27.1** -- Financial Data Schedule.
</TABLE>
- ---------------
* To be supplied by amendment.
** Previously filed.
+ Confidential treatment requested for certain portions of this Exhibit
pursuant to Rule 406 promulgated under the Securities Act.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriter
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424 (b)(1) or (4), or 497(h)
under the Securities Act of 1933, shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-5
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Denver,
State of Colorado, on this 28th day of May, 1999.
HIGH SPEED ACCESS CORP.
By: /s/ GEORGE E. WILLETT
----------------------------------
Name: George E. Willett
Title: Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<C> <S> <C>
* President (Principal Executive May 28, 1999
- ----------------------------------------------------- Officer)
Ron Pitcock, Sr.
* Chief Financial Officer May 28, 1999
- ----------------------------------------------------- (Principal Financial and
George E. Willett Accounting Officer)
* Director, Chairman May 28, 1999
- -----------------------------------------------------
David A. Jones, Jr.
/s/ ROBERT S. SAUNDERS Director, Vice Chairman May 28, 1999
- -----------------------------------------------------
Robert S. Saunders
* Director May 28, 1999
- -----------------------------------------------------
Irving W. Bailey, II
* Director May 28, 1999
- -----------------------------------------------------
Michael E. Gellert
* Director May 28, 1999
- -----------------------------------------------------
Jerald L. Kent
* Director May 28, 1999
- -----------------------------------------------------
William D. Savoy
* Director May 28, 1999
- -----------------------------------------------------
Stephen E. Silva
*By: /s/ ROBERT S. SAUNDERS
------------------------------------------------
Robert S. Saunders
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
1.1* -- Form of Underwriting Agreement.
1.2** -- Stock Purchase Agreement between High Speed Access Corp.
and Cisco Systems, Inc., as amended May 3, 1999.
1.3** -- Stock Purchase Agreement between High Speed Access Corp.
and Com21, Inc.
1.4** -- Stock Purchase Agreement between High Speed Access Corp.
and Microsoft Corporation
3.1** -- Form of Amended and Restated Certificate of Incorporation
to be effective upon the closing of the offering.
3.2** -- Form of Amended and Restated Bylaws to be effective upon
the closing of the offering.
4.1** -- Specimen Common Stock certificate.
4.2 -- See Exhibits 3.1 and 3.2 for provisions defining the
rights of holders of common stock of the Registrant.
5.1* -- Opinion of Brobeck, Phleger & Harrison LLP.
9.1** -- Voting Trust Agreement dated as of March 30, 1999 among
Terrence J. Herron, as Voting Trustee, and Joseph S.,
Gans, III, Joseph W. Aman, Lawrence Shewack, John Howell
and Terrence J. Herron.
10.1** -- Contribution Agreement among High Speed Access Corp.,
Broadband Solutions, LLC, and certain shareholders of
High Speed Access Corp., dated as of April 3, 1998, as
amended November 25, 1998.
10.2** -- Series B Convertible Preferred Stock Purchase Agreement
between High Speed Access Corp. and Broadband Solutions
II, LLC, dated as of September 1, 1998, as amended
November 25, 1998.
10.3** -- Series B Convertible Preferred Stock Purchase Agreement
between High Speed Access Corp. and Vulcan Ventures,
Incorporated, dated as of November 25, 1998.
10.4** -- Series C Convertible Preferred Stock Purchase Agreement
between High Speed Access Corp. and Vulcan Ventures,
Incorporated, dated November 25, 1998.
10.5** -- Class A Securities Purchase Warrant between High Speed
Access Corp. and Vulcan Ventures, Incorporated, dated as
of November 25, 1998 as Assigned April 23, 1999 and as
amended April 29, 1999.
10.6** -- Class B Securities Purchase Warrant between High Speed
Access Corp. Vulcan Ventures, Incorporated, dated as of
November 25, 1998 as Assigned April 23, 1999, and as
amended April 29, 1999.
10.7 -- Systems Access and Investment Agreement among High Speed
Access Corp., Vulcan Ventures, Incorporated, Charter
Communications, Inc. and Marcus, Inc., dated as of
November 25, 1998.
10.8 -- Programming Content Agreement between High Speed Access
Corp. and Vulcan Ventures, Incorporated, dated as of
November 25, 1998.
10.9+ -- Network Service Agreement between High Speed Access
Corp., Charter Communications, Inc., and Marcus Cable,
Inc., dated as of November 25, 1998.
10.10** -- Amended and Restated Registration Rights Agreement, dated
as of November 25, 1998.
10.11** -- Voting Agreement by and among High Speed Access Corp. and
certain shareholders dated as of November 25, 1998.
10.12** -- Employment, Non-Competition and Non-Disclosure Agreement
with W. Kent Oyler, III, dated April 3, 1998.
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<S> <C>
10.13** -- Employment, Non-Competition and Non-Disclosure Agreement
with Ronnie W. Pitcock, dated April 3, 1998.
10.14** -- $650,000 Promissory Note by High Speed Access Corp. in
favor of Gans Multimedia Partnership, dated April 3,
1998.
10.15** -- Assignment and Security Agreement dated April 3, 1998
between High Speed Access Corp. and Gans Multimedia
Partnership.
10.16** -- Noncompetition and Nondisclosure Agreement dated April 3,
1998 between High Speed Access Corp. and Joseph S. Gans,
III.
10.17** -- Convertible Preferred Stock Purchase Agreement dated as
of April 3, 1998 among High Speed Access Network, Inc.,
Ronnie W. Pitcock, Joseph S. Gans, III and Broadband
Solutions, LLC.
10.18** -- Convertible Preferred Stock Purchase Agreement dated as
of February 23, 1998 among CATV.net, Inc., Kent Oyler,
David Gibbs, Gibbs Family Limited Partnership, Colorado
Limited Partnership, OPM Services, Inc. and Broadband
Solutions, LLC.
10.19** -- Convertible Preferred Stock Registration Rights Agreement
dated as of February 23, 1998 among CATV.net, Inc., Kent
Oyler, David Gibbs, Gibbs Family Limited Partnership,
Colorado Limited Partnership, OPM Services, Inc. and
Broadband Solutions, LLC.
10.20** -- Services Agreement dated February 20, 1998 between
CATV.net, Inc. and OPM Services, Inc.
10.21** -- Asset Purchase Agreement dated March 17, 1999 among High
Speed Access Corp., Atlanta On-Line InterNet, Inc.,
Marvin Anglin and Ellen Anglin.
10.22** -- Warrant to Purchase Common Stock dated March 24, 1999
between High Speed Access Corp. and Atlanta On-Line
InterNet, Inc.
10.23** -- Warrant to Purchase Common Stock of Darwin Networks, Inc.
dated as of March 15, 1999 between Darwin Networks, Inc.
and High Speed Access Corp.
10.24** -- Revolving Credit Note dated as of March 15, 1999 issued
by Darwin Networks, Inc. in favor of High Speed Access
Corp.
10.25** -- Services Agreement dated as of March 15, 1999 between
High Speed Access Corp. and Darwin Networks, Inc.
10.26** -- Amended and Restated Shareholders Agreement dated as of
November 25, 1998 among High Speed Access Corp. and
shareholders of High Speed Access Corp.
10.27** -- Master Loan and Security Agreement dated as of February
4, 1999 between Finova Capital Corporation and High Speed
Access Corp.
10.28** -- Lease dated April 1, 1998 between High Speed Access Corp.
and Henry Vogt Machine Co., as amended by a First
Amendment to Lease dated May 1, 1998, a Second Amendment
to Lease dated June 1, 1998, a Third Amendment to Lease
dated July 20, 1998, a Fourth Amendment to Lease dated
September 1, 1998, a Fifth Amendment to lease dated
November 1, 1998, a Sixth Amendment to Lease dated
January 1, 1999, and a Seventh Amendment to Lease dated
March 15, 1999.
10.29** -- HSAnet Cable Affiliate Agreement between High Speed
Access Network, Inc. and Gans Multimedia partnership
dated October 15, 1997.
10.30** -- 1998 High Speed Access Corp. Stock Option Plan
10.31** -- 1999 High Speed Access Corp. Stock Option Plan.
10.32** -- High Speed Access Corp. Non-Employee Director Stock
Option Plan.
10.33** -- Form of Indemnity Agreement.
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
10.34** -- Securities Purchase Warrant dated as of April 30, 1999
between High Speed Access Corp. and Microsoft
Corporation.
10.35** -- Letter Agreement dated as of April 30, 1999 between High
Speed Access Corp. and Microsoft Corporation.
10.36+** -- Letter of Intent between High Speed Access Corp. and
ServiceCo LLC dated as of March 31, 1999.
10.37** -- Master Services Agreement dated as of January 1, 1999
between High Speed Access Corp. and National Cable
Television Cooperative, Inc.
21.1** -- Subsidiaries.
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of PricewaterhouseCoopers LLP.
23.3 -- Consent of PricewaterhouseCoopers LLP.
23.4* -- Consent of Brobeck, Phleger & Harrison LLP (included in
Exhibit 5.1).
24.1** -- Powers of Attorney (See Signature Page).
27.1** -- Financial Data Schedule.
</TABLE>
- ---------------
* To be supplied by amendment.
** Previously filed.
+ Confidential treatment requested for certain portions of this Exhibit pursuant
to Rule 406 promulgated under the Securities Act.
<PAGE> 1
EXHIBIT 10.7
SYSTEMS ACCESS AND INVESTMENT AGREEMENT
This Systems Access and Investment Agreement (the "Agreement") is dated
and effective as of November 25, 1998 (the "Effective Date"), among:
HIGH SPEED ACCESS CORP.
1000 West Ormsby Ave., Suite 210
Louisville, KY 40210 ("HSAC")
VULCAN VENTURES, INCORPORATED
110 110th Avenue NE
Bellevue, WA 98004 ("Vulcan")
CHARTER COMMUNICATIONS, INC.
12444 Powerscourt Dr., Suite 400
St. Louis, MO 63131 ("Charter")
and
MARCUS CABLE, INC.
2911 Turtle Creek Blvd., Suite 1300
Dallas, TX 75219 ("Marcus")
Recitals
A. Vulcan and/or other entities owned or controlled by Paul G.
Allen have agreed to purchase Charter and Marcus and may in
the future own or control other MSOs and Cable Systems. Both
Charter and Marcus, directly or through their respective
affiliates and subsidiaries, own and operate various Cable
Systems.
B. Charter and Marcus wish to offer their Cable Subscribers in
Committed Systems (listed on EXHIBIT A of the Network
Agreement) the opportunity to utilize the applicable Committed
Systems for Internet access and related services.
C. HSAC provides Internet access and related services through
various cable, telephone and wireless systems.
D. Charter and Marcus wish to retain HSAC to offer and provide
Internet access and related services to Cable Subscribers in
Committed Systems, and HSAC wishes to access the Cable
Subscribers in Committed Systems to provide Internet access
and related services to such Cable Subscribers.
E. Vulcan wishes (i) to have the right to retain HSAC to offer
and provide Internet access and related services to certain
Cable Subscribers of other MSOs and Cable Systems that Vulcan
may own or control in the future, and (ii) to purchase an
equity ownership interest in HSAC.
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NOW, THEREFORE, in consideration of the foregoing, and the exchange of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties agree
as follows:
1. DEFINITIONS. Unless otherwise defined herein, where reference is
made thereto the following capitalized terms used in this Agreement shall have
the following meanings:
1.1 "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 the HSAC
Services.
1.2 "Cable System(s)" means any radio frequency ("RF") cable
television franchise or hybrid fiber-coaxial RF Plant distribution system ("RF
Plant") serving a geographically proximal group of residences, businesses, or
other locations. Cable Systems include both One-Way Systems and Two-Way Systems.
1.3 "Certificate of Incorporation" means the Certificate of
Amendment to Certificate of Incorporation of HSAC of even date herewith in the
form attached hereto as ANNEX G.
1.4 "Class A Warrants" means warrants in the form attached hereto as
ANNEX C granted to Vulcan under Section 5.1 hereof to purchase up to Two Million
Five Hundred Thousand (2,500,000) shares of HSAC's common stock (each a "Warrant
Share") at a per share exercise price of Five Dollars ($5.00) per share (for an
aggregate purchase price of up to Twelve Million Five Hundred Thousand Dollars
($12,500,000)), pursuant to the terms and conditions of the Class A Warrants.
1.5 "Class B Warrants" means warrants in the form attached hereto as
ANNEX D granted to Vulcan under Section 5.2 hereof to purchase up to an
additional Two Million Five Hundred Thousand (2,500,000) Warrant Shares at a per
share exercise price of Five Dollars ($5.00) per share (for an aggregate
additional purchase price of up to Twelve Million Five Hundred Thousand Dollars
($12,500,000)), pursuant to the terms and conditions of the Class B Warrants.
1.6 "Committed System(s)" means the Cable Systems that an Operator
has specifically designated in such Operator's sole and absolute discretion as
Committed Systems, that such Operator reasonably believes will conform to
Section 4 hereof and that are either listed in EXHIBIT A of the Network
Agreement as of the Effective Date or are designated as Committed Systems and
added to the Network Agreement pursuant to Section 2.2 below (and Section 2.2 of
the Network Agreement) during the Term. A Cable System shall be deemed to no
longer be a Committed System if (i) it has been withdrawn by an Operator
pursuant to Section 7 below and/or Section 18 of the Network Agreement, (ii) the
Network Agreement has expired or been terminated for any reason pursuant to
Section 18 of the Network Agreement with respect to such Committed System, or
(iii) such Committed System is no longer controlled by the Operator for any
reason.
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1.7 "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.
1.8 "Content" means "Content" as defined in the Content Agreement.
1.9 "Content Agreement" means the Programming Content Agreement of
even date herewith between Vulcan and HSAC in the form attached hereto as ANNEX
E.
1.10 "Customer Lists" means the Operator's list of Cable Subscribers
in each Committed System and related subscriber information.
1.11 "Data Subscriber" means a Cable Subscriber residing in a Home
Passed in a Committed System who subscribes to the HSAC Services regardless of
whether such subscriber 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.
1.12 "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.
1.13 "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 as defined in
the Network Agreement 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 of the Network Agreement), (iv) rentals paid by Data
Subscribers on Home Equipment Packages as defined in the Network Agreement
(subject to the limitations set forth in Section 6.2 of the Network Agreement),
(v) charges for security encryption software sold or sublicensed to Data
Subscribers under Section 9 of the Network Agreement, and (vi) add-on ISP fees
charged by HSAC to Data Subscribers for commerical web-hosting activities (i.e.,
local caching on HSA's servers of Commercial Web Sites, not "complimentary"
personal homepage hosting of 5MB or less Web pages).
1.14 "Home(s) Passed" means residences that are connected (i.e., a
residence with an installed cable "drop" from an Operator's Cable System or
which is eligible for such cable "drop" by virtue of an Operator's Cable System
passing such residence) to Operators' cable RF Plant for such Cable 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.
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1.15 "HSAC Network Equipment" means the equipment that HSAC employs
for operation of the HSAC Services by connecting such equipment to the head-end
of Operators' Cable Systems. HSAC Network Equipment includes, without
limitation, all monitoring devices, telecommunications equipment, storage
devices, computing and data processing equipment, and software.
1.16 "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 the World Wide Web, read news groups, and receive and
send electronic mail ("E-mail") and perform related activities.
1.17 "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.
1.18 "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 under the Network Agreement.
1.19 "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.
1.20 "Network Agreement" means the Network Services Agreement in the
form attached hereto as ANNEX F, as same may be amended from time to time to add
and/or delete Committed Systems and Potential Operators and as otherwise agreed
in writing by the parties thereto.
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 "Operators" means Charter, Marcus, Vulcan and any Potential
Operator.
1.23 "Optional Services" means the provisioning by HSAC of data
connection/transmission services that are not specifically included in the
definition of HSAC Services, including, but not limited to (i) telephony, video
on demand, and pay-per-view; and (ii) provisioning of consumer-oriented software
or data applications such as on-line banking and electronic utility meter
reading.
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1.24 "Other Agreements" means (i) the Content Agreement, (ii) the
Network Agreement, (iii) the Series B Convertible Stock Purchase Agreement, (iv)
the Series C Convertible Stock Purchase Agreement, (v) the Class A Warrants and
the Class B Warrants, (vi) the Voting Agreement, (vii) the Registration Rights
Agreement, (viii) the Shareholders Agreement, and (ix) the Certificate of
Incorporation.
1.25 "Potential Operators" means, as the case may be or the context
requires, any Cable Systems or packet-switched data systems now or hereafter
owned or controlled by, directly or indirectly, or affiliated with Paul Allen,
any Operator, or any of their respective affiliates or subsidiaries.
1.26 "Registration Rights Agreement" means the Amended and Restated
Registration Rights Agreement of even day herewith among HSAC and the
"Investors" parties thereto in the form attached hereto as ANNEX H.
1.27 "Series B Convertible Stock Purchase Agreement" means the
Series B Convertible Preferred Stock Purchase Agreement of even day herewith
between HSAC and Vulcan in the form attached hereto as ANNEX A.
1.28 "Series C Convertible Stock Purchase Agreement" means the
Series C Convertible Preferred Stock Purchase Agreement of even day herewith
between HSAC and Vulcan in the form attached hereto as ANNEX B.
1.29 "Shareholders Agreement" means the Amended and Restated
Shareholders Agreement of even day herewith among HSAC and the "Common
Shareholders" and "Investors" parties thereto in the form attached hereto as
ANNEX I.
1.30 "Startup Page" means the first or default television or
computer screen displayed to Data Subscribers every time that they access the
HSAC Services as a means to obtain access to the Internet or any other
interactive material available via the HSAC Services. A Startup Page may or may
not be in the form of a Web Page, and may be different for different Cable
Systems.
1.31 "Termination Event" has the meaning set forth in Section 18.3
of the Network Agreement.
1.32 "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. 1.33 "Voting Agreement" means the Voting
Agreement of even day herewith among HSAC, Broadband Solutions, LLC, Broadband
Solutions II, LLC, and Vulcan in the form attached hereto as ANNEX J.
1.34 "Web Page" means a document specially formatted in hypertext
markup language ("HTML") which supports links to other documents, as well as
graphics, audio, video files, and other Content. A group of Web Pages linked
together and share the same World Wide Web domain name constitutes a "Web Site."
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1.35 "World Wide Web" means the system of Internet servers that
supports HTML-formatted documents. Not all Internet servers are part of the
World Wide Web.
1.36 Other Definitions. The following additional defined terms shall
have the meanings ascribed to them in the Sections indicated below:
"Class A Warrant Date" 6.1.1
"Class B Warrant Date" 6.1.2
"Intellectual Property Laws" 12.1.5
"MDU" 1.11
"Notices" 15.3
"RF" 1.2
"RF Plant 1.2
"Series B Convertible Preferred Stock" 5.1
"Series C Convertible Preferred Stock" 5.2
"Temporary Startup Page" 8.2
"Temporary Web Site" 8.2
"Term" 11
"Warrant Shares" 1.5
2. EXCLUSIVE RIGHT TO PROVIDE HSAC SERVICES. Operators and HSAC agree
that:
2.1 During the Term, HSAC shall have the sole and exclusive right to
access the Committed Systems for purposes of performing the HSAC Services,
subject to and in accordance with the terms and conditions of this Agreement and
the Network Agreement.
2.2 During the Term, Operators shall have the right, but not the
obligation, to designate additional Cable Systems as Committed Systems under
Section 2.2 of the Network Agreement, and such right shall extend to any and all
Cable Systems now owned or hereafter acquired by an Operator. An Operator shall
exercise its right to designate additional Cable Systems as Committed Systems
hereunder by delivering written notice of such designation to HSAC in accordance
with the procedures set forth in the Network Agreement. Upon HSAC's receipt of
such notice, the additional Cable Systems designated in such notice shall
automatically become Committed Systems hereunder, and HSAC and the applicable
Operator shall execute an addendum to the Network Agreement reflecting the
addition of such additional Cable Systems and/or the inclusion of additional
Operators to the Network Agreement, subject to the inspection and commissioning
procedures and agreements set forth in Section 2.3 and 2.4 of the Network
Agreement.
3. NETWORK AGREEMENT. Concurrently with the execution and delivery
of this Agreement, Charter and Marcus shall enter into the Network Agreement,
and HSAC shall thereafter perform a Full HSAC Services Roll-Out for any and all
Committed Systems in accordance with such Network Agreement, as amended from
time to time.
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4. HOMES PASSED. The Committed Systems shall (i) include (or "pass") in
the aggregate not less than 750,000 Homes Passed, (ii) include (or "pass") at
least 4,000 Homes Passed per head-end, and (iii) conform to the System Data
Requirements set forth (and as defined) in the Network Agreement. Such System
Data Requirements shall include, but are not limited to, the requirement that
each Committed System (A) possess at least 400 MHz of bandwidth, (B) reserve at
least one (1) 6 MHz channel for the HSAC Services in One-Way Cable Systems and
at least two (2) 6 MHz channels for the HSAC Services in Two-Way Cable Systems,
and (C) shall be owned, controlled, or operated by an Operator. Operators
obligation to replace Committed Systems and Homes Passed upon the withdrawal of
Committed Systems from this Agreement and the Network Agreement shall be
governed by Section 18.5 of the Network Agreement.
5. HSAC CONVERTIBLE PREFERRED STOCK. Concurrently with the execution
and delivery of this Agreement:
5.1 Vulcan shall purchase Eight Million (8,000,000) shares of HSAC's
Series B Convertible Preferred Stock, $.01 par value (the "Series B Convertible
Preferred Stock"), at a purchase price of Two Dollars and Fifty Cents ($2.50)
per share (for an aggregate investment of $20,000,000), subject to the terms and
conditions set forth in the Series B Convertible Stock Purchase Agreement, and
certain other investors shall have purchased Two Million (2,000,000) shares of
Series B Convertible Preferred Stock by separate agreement at a purchase price
of Two Dollars and Fifty Cents ($2.50) per share (for an aggregate investment of
$5,000,000). The purchase of such other shares of Series B Convertible Preferred
Stock by such other investors shall be a condition precedent to Vulcan's
obligation to purchase shares of Series B Convertible Preferred Stock under this
Section 5.1.
5.2 HSAC shall authorize the issuance of Five Million (5,000,000)
shares of HSAC's Series C Convertible Preferred Stock, $.01 par value (the
"Series C Convertible Preferred Stock"), and HSAC and Vulcan shall enter into
the Series C Convertible Stock Purchase Agreement pursuant to which Vulcan shall
commit to purchase Two Million Five Hundred Thousand (2,500,000) shares of the
Series C Convertible Preferred Stock at a purchase price of Five Dollars ($5.00)
per share (for an aggregate investment of Twelve Million Five Hundred Thousand
Dollars ($12,500,000)), subject to the satisfaction of certain conditions set
forth in the Series C Convertible Stock Purchase Agreement, and shall have the
right to purchase an additional Two Million Five Hundred Thousand (2,500,000)
shares of the Series C Convertible Preferred Stock at the purchase price set
forth in the Series C Convertible Stock Purchase Agreement, subject to the
satisfaction of certain conditions set forth in the Series C Convertible
Preferred Stock Purchase Agreement.
6. WARRANTS FOR HSAC COMMON SHARES.
6.1 Concurrently with the execution and delivery of this Agreement,
HSAC and Vulcan will enter into:
6.1.1 The Class A Warrant pursuant to which HSAC will issue to
Vulcan one Class A Warrant (up to a maximum of 2,500,000 Class A Warrants in the
aggregate) for up to 2,500,000 Homes Passed in excess of 750,000 in Cable
Systems that are
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Committed Systems as of the Effective Date or are designated as additional
Committed Systems pursuant to Section 2.2 of the Network Agreement at any time
after the Effective Date, exercisable one (1) Warrant Share per each Home Passed
that is in any such Committed System or additional Committed Systems on or
before July 31, 2001 ("Class A Warrant Date"), which Class A Warrant Date will
be subject to adjustment as set forth in Section 6.4 below.
6.1.2 The Class B Warrant pursuant to which HSAC will issue to
Vulcan one Class B Warrant (up to a maximum of 2,500,000 Class B Warrants in the
aggregate) for up to 2,500,000 Homes Passed (beyond the Homes Passed counted for
purposes of earning Class A Warrants pursuant to Section 6.1.1 above) in Cable
Systems that are Committed Systems as of the Effective Date or are designated as
additional Committed Systems pursuant to Section 2.2 of the Network Agreement at
any time after the Effective Date, exercisable one (1) Warrant Share per each
such Home Passed that is in any such Committed System by July 31, 2003 ("Class B
Warrant Date"), which Class B Warrant Date will be subject to adjustment as set
forth in Section 6.4 below.
6.1.3 All Class A Warrants and Class B Warrants shall be deemed
vested (i.e., eligible for exercise) immediately when the applicable Home Passed
is or becomes part of a Committed System or additional Committed System under
the Network Agreement, subject to (i) the provisions of Section 6.3 below, and
(ii) the inspection and commissioning procedures set forth in Section 2.3 of the
Network Agreement.
6.2 Class A Warrants shall expire if unexercised on or before
December 31, 2011, and Class B Warrants shall expire if unexercised on or before
December 31, 2013, in each case subject to acceleration in accordance with the
terms of the Class A Warrant and Class B Warrant, as applicable.
6.3 Class A Warrants and Class B Warrants, to the extent of the
number of Homes Passed in additional Committed System designated under Section
2.2 of this Agreement and Section 2.2 of the Network Agreement (on a one (1)
Warrant Share per Home Passed basis), will be cancelled and deemed forfeited by
Vulcan (or its permitted transferee) in the event Operators withdraw Committed
Systems under the Network Agreement for any reason other than pursuant to
Sections 18.1, 18.2, 18.3, and/or 18.6 of the Network Agreement, except to the
extent Vulcan or Operators replace the Homes Passed in such withdrawn Committed
System with Homes Passed in another Committed System(s) or additional Committed
Systems. Class A Warrants and Class B Warrants will not be cancelled or deemed
forfeited if Operator terminates any of HSAC's exclusive rights as provided for
or permitted under this Agreement or the Network Agreement. Effective as of the
Class B Warrant Date, the parties shall effect a reconciliation of the total
number of Homes Passed in all Committed Systems (in excess of 750,000) under the
Network Agreement, the number of outstanding Class A Warrants and Class B
Warrants, and the number of Warrant Shares theretofore issued upon exercise of
the Class A Warrants and Class B Warrants. If such reconciliation reveals that
the total number of Homes Passed in all Committed Systems (in excess of 750,000)
under the Network Agreement (after adding back Homes Passed in Committed Systems
and additional Committed Systems withdrawn from the Network Agreement pursuant
to Sections 18.1, 18.2, 18.3, and 18.6 of the Network Services Agreement) is
different than the total number of all outstanding Class A Warrants
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and Class B Warrants and Warrant Shares, then the total number of Class A
Warrants and/or Class B Warrants will be adjusted upward or downward, as the
case may be. If the number of unexercised Class A Warrants and/or Class B
Warrants then held by Vulcan is insufficient to cover any shortfall, then Vulcan
(or its permitted transferee) shall return to HSAC the number of Warrant Shares
necessary to meet such shortfall, and HSAC shall refund to Vulcan the exercise
price paid by Vulcan for such returned Warrant Shares.
6.4 In the event that the parties cannot agree on the Launch Date
for a Committed System for which Class A Warrants or Class B Warrants are
exercisable under Section 6.1.1 or 6.1.2 within the period specified in Section
2.4 of the Network Agreement, then the Class A Warrant Date and or Class B
Warrant Date (as applicable) for the Homes Passed in such Committed System shall
be extended by the time period beginning on the date on which the Launch Date
for such Committed System should have been designated pursuant to Section 2.2 of
the Network Agreement and the date on which HSAC actually commences revenue
billing for Data Subscribers in such Committed System.
6.5 HSAC shall have the right to review and audit Operators' books
and records relating to the Committed Systems and Homes Passed as of July 31,
2001 and July 31, 2003 for purposes of confirming the number of Homes Passed for
which Class A Warrants and Class B Warrants are exercisable (and Warrant Shares
that have been issued upon exercise thereof) hereunder.
7. OPTION TO WITHDRAW CABLE SYSTEMS. Operators shall have the right to
terminate the Network Agreement and/or withdraw Committed Systems from this
Agreement and the Network Agreement in accordance with the provisions of
Sections 18 and 19 of the Network Agreement.
8. CONTENT PROVISIONING.
8.1 All of the rights, terms and conditions of this Agreement are
expressly conditioned upon the parties entering into the Content Agreement. The
obligations of the parties with respect to the Vulcan Content (as defined in the
Content Agreement) shall apply to all Data Subscribers in the Committed Systems
and to every other HSAC data and/or Internet customer located in any geographic
region or market, regardless of whether such customer is a customer of an
Operator or of an MSO or Cable System operated by an unrelated party, subject to
and in accordance with the terms of the Content Agreement.
8.2 Until such time as Operators develop Content for a Startup Page
and a Web Site, HSAC shall create a temporary Operator-branded Startup Page
("Temporary Startup Page") and Web Site ("Temporary Web Site") for each
Committed System and orchestrate local community Content. Such Temporary Startup
Page and Temporary Web Site shall comply with the branding and all other
requirements set forth in Section 7.6.5 in the Network Agreement). All "net"
revenues (i.e., gross advertising and other sales revenues less any ad agency
charges, or commissions) resulting from advertising revenues, E-commerce and any
other revenues generated by or from such Temporary Startup Page and Temporary
Web Site (including any fees for links) shall be divided evenly between HSAC and
the applicable Committed System's Operator.
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8.3 The Content on such Temporary Startup Page and Web Site shall
be replaced upon reasonable notice to HSAC from that Committed System's Operator
with Content designated by Vulcan and/or the applicable Committed System's
Operator for a Startup Page and Web Site. HSAC shall provide every Committed
System's Operator with an easy and inexpensive means to constantly update and
modify the Content for such Operator's Startup Page and Web Site. All revenues
resulting from advertising revenues, E-commerce and any other ancillary revenues
generated by or from any Vulcan- or Operator-controlled or designated Content,
Startup Page, or Web Site (including any fees for links) shall be paid to or
retained by Vulcan or the applicable Committed System's Operator, and no portion
of such revenues shall be paid to, retained by or shared with HSAC. Conversely,
all revenues generated from HSAC's Web Site (as defined in the Content
Agreement) resulting from advertising revenues, E-commerce, other HSAC Content
(as defined in the Content Agreement), and any other revenues (including any
fees for links) generated from such HSAC's Web Site, shall be paid to or
retained by HSAC and no portion of such revenues shall be paid to, retained by
or shared with any Vulcan or any Operator.
9. [Intentionally Omitted]
10. COMPETITIVE SERVICES.
10.1 HSAC shall have the right to market and deploy data
connectivity services using analog modems that are commercially available as of
the Effective Date and do not operate at speeds greater than 128 KBPS to
"dial-up" residential and commercial customers in Committed System market areas
that do not qualify as Homes Passed and do not utilize the Operator's RF
Plant/head-end equipment and/or the HSAC Network Equipment. HSAC shall pay 15%
of the Gross Revenues generated from such "dial-up" services to Operator. Such
"dial-up" customers shall be deemed to be "owned" by HSAC for purposes of this
Agreement and the Network Agreements. HSAC shall retain such "dial-up"
customers in the event of any withdrawal of Committed Systems from the Network
Agreement or the termination of the Network Agreement by Operator; provided,
that if any Operator expands/upgrades its system such that HSAC's "dial-up"
customers eventually qualify as Homes Passed or Cable Subscribers, HSAC shall
make commercially reasonable efforts to enroll such Cable Subscribers as Data
Subscribers.
10.2 Unless an Operator gives its prior written approval, HSAC
agrees that it shall not compete with Operators, deploy new dial-tone or xDSL
services, perform HSAC Services, or perform any Optional Services in any market
in which any of Operators or any affiliate owns, controls or operates a Cable
System (regardless of whether such Cable System is a Committed System) or
competes as CLEC. However, HSAC shall have the right without Operator's prior
written approval to develop and offer Internet Access and related services for
MSO's not affiliated with any of Operators in those market areas where no
Operator or any affiliate owns, controls and/or operates a Cable System or
competes as a CLEC. If such area eventually falls within or overlaps a market in
which an Operator or any affiliate owns, controls and/or operates a Cable
System, HSAC shall not be required to abandon or curtail its efforts with
respect to any its then existing deployments of connectivity services.
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10.3 Unless an Operator gives its prior written approval in regard
to a particular Committed System, HSAC shall not deploy new dial-tone or xDSL
services in the market areas of such Committed System; provided, that HSAC shall
not be required to abandon or curtail its efforts with respect to any existing
deployments of competing connectivity services which pre-date the Effective
Date, so long as HSAC has provided Operators with a detailed list of such
dial-tone or xDSL services before the Effective Date.
10.4 HSAC shall not deploy Worldgate(R), WebTV(R), Optional
Services, or VBI (video blanking interval), digital TV products in the market
areas of any Committed Systems or other areas in which any Operator operates a
Cable System.
10.5 HSAC's deployment of any Optional Service in the Committed
Systems or any products or services not specifically contemplated in this
Agreement in the Committed Systems is subject to agreement among or between the
parties on a case-by-case, system-by-system basis. The parties shall separately
negotiate the terms and conditions applicable to any such Optional Services on a
case-by-case basis.
10.6 HSAC acknowledges and agrees that, with respect to any Cable
Systems that are not Committed Systems hereunder, there are and shall be no
restrictions or limitations on the ability of any Operator to compete with HSAC,
to engage any competitor(s) of HSAC to provide the HSAC Services (regardless of
the Method of Access) or to enter into any other business arrangements with
competitor(s) of HSAC.
11. TERM. The term ("Term") of this Agreement shall commence effective
as of the Effective Date and shall continue until midnight of the day HSAC
ceases to provide HSAC Services to Data Subscribers in any geographic area or
region.
12. REPRESENTATIONS AND WARRANTIES.
12.1 HSAC hereby represents and warrants to Operators as follows:
12.1.1 HSAC is a corporation duly organized, validly existing
and in good standing under the laws the State of Delaware and is duly qualified
to do business as a foreign corporation in all jurisdictions in which it
conducts its business.
12.1.2 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 its respective terms, except as may be affected by laws relating
to bankruptcy or insolvency or the application by a court of equitable
principles.
12.1.3 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.
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<PAGE> 12
12.1.4 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.
12.1.5 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 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.
12.1.6 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."
12.2 Each of Vulcan, Charter, and Marcus hereby represents and
warrants, severally, but not jointly, and only as to itself, to HSAC as follows:
12.2.1 Each of them 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.
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<PAGE> 13
12.2.2 Each of 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 its respective terms, except as may be affected by laws
relating to bankruptcy or insolvency or the application by a court of equitable
principles.
12.2.3 Each of 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 any of them is a party.
12.2.4 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 any of them to enter into, deliver and perform this
Agreement, each of the Other Agreements and the transactions contemplated herein
and therein.
12.2.5 The franchise agreements with the various franchising
authorities with jurisdiction over the Committed Systems do not prohibit any of
them from offering the HSAC Services directly or through HSAC under this
Agreement. Each of them 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.
12.2.6 Each of them either owns or has properly licensed all
rights under Intellectual Property Laws that are necessary or required for HSAC
to utilize such party's trademarks, service marks, or brands and the marketing
and promotional materials as permitted hereunder, and HSAC's use of the
foregoing shall not violate or infringe any Intellectual Property Laws or
intellectual property rights of third parties.
12.2.7 To the best of their respective knowledge, they have
taken all actions necessary and appropriate to assure that there shall be no
material adverse change to their respective business or electronic systems or
material interruptions in the operation and delivery of HSAC Services as
provided in this Agreement (aside from normal data packet delays, distortions,
and losses (i) on the Internet backbone, (ii) during transport to the Internet
Backbone on telecommunication lines leased from a third party, (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
their respective computer-based systems, embedded microchips and other data
processing capabilities have been designed or modified and fully tested in such
a manner that such computer-based systems, embedded microchips and other data
processing capabilities will not generate any invalid and/or incorrect
date-related results or cause any of the problems commonly referred to as "Year
2000 problems" and will, without interruption or manual intervention, continue
to operate consistently, predictably and accurately and in accordance with all
of the requirements of this Agreement, including without limitation, meeting all
specifications and/or functionality and performance requirements, when used
during any year prior to,
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<PAGE> 14
during or after the calendar year 2000. Operator does not warrant that
interruptions in HSAC Services will not occur due to the network or systems
failures of other parties, including utilities and phone services, caused by
"Year 2000 problems.".
13. INDEMNITY.
13.1 HSAC will indemnify, defend, and hold harmless Operators and
their 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 or under any of the Other
Agreements, or (ii) HSAC's operation, management and provision of the HSAC
Services, or failure of same, 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 Operators' operation, management, and
maintenance of any Operator's RF Plant.
13.2 Each of Charter and Marcus (severally and not jointly, and
only as to itself) will 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 the indemnifying party of any of its
representations, warranties or covenants hereunder, or (ii) the indemnifying
party's operation, management, and maintenance of the indemnifying party'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 operation, management and provision of the HSAC Services.
13.3 HSAC agrees to indemnify, defend, and hold harmless Operators
and their respective affiliates, agents, successors, assigns, representatives,
officers, and directors, and each of Charter and Marcus (severally and not
jointly, and only as to itself) agrees 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 by any third party for injuries, including death to persons, resulting
from the indemnifying party's negligent or willful acts or omissions or those of
persons employed by the indemnifying party, its agents, or subcontractors. Each
party respectively agrees 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.
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<PAGE> 15
14. LIMITATION OF LIABILITY; INSURANCE.
14.1 EXCEPT FOR THE INDEMNIFICATION OBLIGATIONS DETAILED IN SECTION
13 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.
14.2 At all times during the Term, HSAC shall maintain (i)
appropriate policies of general liability, casualty, and business interruption
insurance, each with aggregate coverage of at least two million dollars
($2,000,000); (ii) appropriate workers compensation insurance to cover HSAC's
employees against injury to themselves or others and casualty accidents while
working on Operators' premises; and (iii) appropriate insurance policies with at
least two million dollars ($2,000,000) of coverage per incident covering against
claims for intellectual property infringement. All such HSAC insurance policies
shall name Operators as additional insured parties.
14.3 Each of HSAC and Operators 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.
15. MISCELLANEOUS PROVISIONS.
15.1 OBLIGATIONS TO SURVIVE TERMINATION. The parties recognize and
agree that the obligations of the parties hereto under Sections 1, 5, 6, 12, 13,
14, and this Section 15 of this Agreement shall survive the cancellation,
termination, or expiration of this Agreement.
15.2 CLOSING. The closing of this Agreement and the transactions
contemplated herein shall take place at such time and place as the parties may
agree.
15.3 NOTICES. All notices, requests, demands, and other
communications ("Notices") required or permitted hereunder will be in writing,
in English, will refer to this Agreement, and may be delivered personally or by
overnight air courier guaranteeing next-day delivery, or sent by certified or
registered mail, return receipt requested, or by facsimile to such party at its
address set forth below (or such other address as may be designated by notice
given in accordance with this Section). The date of personal delivery or
facsimile, the next day if by express delivery, or the date five (5) days after
certified or registered mailing
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<PAGE> 16
will be deemed the date on which such Notice is effective. Notices will be sent
to each party at the following addresses:
If to HSAC: High Speed Access Corp.
1000 West Ormsby Ave., Suite 210
Louisville, KY 40210
Attn: John G. Hundley, Esq.
General Counsel (fax: 502-515-3101)
With a copy to: Patrick Mattingly, Esq.
Wyatt Tarrant & Combs
2800 Citizens Plaza
Louisville, KY 40202 (fax: 502-589-0309)
If to Vulcan: Vulcan Ventures, Incorporated
110 110th Avenue NE
Bellevue, WA 98004
Attn: William D. Savoy (fax: 425-453-1985)
With a copy to: Irell & Manella, LLP
1800 Avenue of the Stars
Los Angeles, California 90067
Attn: Alvin Segel, Esq. (fax: 310-203-7199)
If to Charter: Charter Communications, Inc.
12444 Powerscourt Ave., Suite 400
St. Louis, MO 63131
Attn: Steven Silva (fax: 314-965-8793)
With a copy to: Curtis S. Shaw, Esq. (fax: 314-965-8793)
12444 Powerscourt Ave., Suite 400
St. Louis, MO 63131
If to Marcus: Marcus Cable, Inc.
2911 Turtle Creek Blvd., Suite 1300
Dallas, TX 75219
Attn: Steven Silva (314-965-8793)
With a copy to: Curtis S. Shaw, Esq. (fax: 314-965-8793)
12444 Powerscourt Ave., Suite 400
St. Louis, MO 63131
15.4 ASSIGNMENT. Except as set forth below, HSAC shall not have the
right to assign this Agreement to any person or entity without the prior written
consent of Operators, except it 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. Any
Operator may assign this Agreement to any person or entity, and this Agreement
shall be binding and inure to the benefit of such Operator's successors and
assigns. Vulcan may assign its rights in the Class A Warrants and Class B
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<PAGE> 17
Warrants only to the extent permitted in the Class A Warrant or Class B Warrant
(as applicable). 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 owned by such party) arising under this Agreement, the Network
Agreements and Other Agreements 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 15.4 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.
15.5 AMENDMENT AND WAIVER. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of all of the parties unless
otherwise expressly permitted in this Agreement, and any written waiver by any
party of any breach of any term or condition shall not be deemed to be a waiver
of any subsequent or other breach, term or condition of this Agreement.
15.6 CONFIDENTIAL INFORMATION.
15.6.1 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 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.
15.6.2 The confidentiality obligations set forth in Section
15.6.1 shall not be applicable to Confidential Information which is in the
public domain; information known to the recipient party as of the date of this
Agreement as indicated by the recipient's written records, unless the recipient
party agreed to keep such information in confidence at the time of its receipt;
information properly obtained hereafter from a source who is not under an
obligation of confidentiality with respect to such information; information that
is independently developed by the receiving party through persons who have not
had, either directly or indirectly, access or knowledge of such Confidential
Information which can be verified by independent evidence; or information that
that the
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<PAGE> 18
receiving party is 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.
15.6.3 Apart from HSAC's obligations to Operators under this
Section 15 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, an 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 such Operator shall pay
for reasonable expenses associated with the early deletion or destruction of all
such data.
15.7 NO JOINT VENTURE OR PARTNERSHIP. Nothing contained herein
shall be deemed to create a relationship of joint venture, associates, principal
and agent or partnership between or among the parties hereto and no party shall
hold itself out to the contrary. Each party is acting as principal hereunder and
is responsible for their own income tax consequences.
15.8 SECTION HEADINGS. The section headings contained in this
Agreement are inserted as a matter of convenience and shall not affect in any
way the construction of the terms of this Agreement.
15.9 GOVERNING LAW. This Agreement and the rights and obligation
of the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware (without reference to any conflicts of law
rules) applicable to contracts entered into and fully performed therein.
15.10 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.
15.11 [Intentionally Omitted]
15.12 ATTORNEY'S FEES. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement or any other
agreements contemplated herein, each party shall pay its own fees, costs, and
disbursements in connection therewith.
15.13 SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
the remaining provisions.
15.14 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, any of which shall be deemed an original, but all of which taken
together shall constitute one and the same Agreement. This Agreement may be
executed and delivered by facsimile.
15.15 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided by this Agreement and Annexes hereto are cumulative and the use of any
one right
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<PAGE> 19
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.
15.16 FURTHER ASSURANCES. Each party hereto agrees to execute such
additional documents and schedules and take such other actions as the other
party or parties may reasonable request to consummate the transactions
contemplated by this Agreement and otherwise as may be necessary to effectively
carry out the terms and provisions of this Agreement.
15.17 PRESS RELEASES. Except as required by law, none of the
parties shall issue any public statements or press releases pertaining to the
transactions contemplated hereby without the consent of the other parties
hereto.
15.18 INCORPORATION BY REFERENCE OF ANNEXES; ENTIRE AGREEMENT. This
Agreement and the Annexes hereto set forth the entire agreement between the
parties hereto and any parties who have in the past or who are now representing
either of the parties hereto. This Agreement supersedes all prior oral or
written understandings and communications between the parties and no other oral
or written representations shall apply.
[The rest of this page is left intentionally blank.]
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<PAGE> 20
IN WITNESS WHEREOF, Vulcan, Marcus, Charter, and HSAC have each caused
this Agreement to be executed by a duly authorized officer effective as of the
day and year set forth in the preamble hereto.
VULCAN VENTURES, INCORPORATED
By: /s/ William D. Savoy
------------------------------
Name: William D. Savoy
------------------------------
Title: Vice President
------------------------------
Date:
------------------------------
CHARTER COMMUNICATIONS, INC.
By: /s/ Curtis S. Shaw
------------------------------
Name: Curtis S. Shaw
------------------------------
Title: Senior Vice President
------------------------------
Date:
------------------------------
MARCUS CABLE, INC.
By: /s/ Curtis S. Shaw
------------------------------
Name: Curtis S. Shaw
------------------------------
Title: Senior Vice President
------------------------------
Date:
------------------------------
HIGH SPEED ACCESS CORP.
By: /s/ Robert S. Saunders
------------------------------
Name: Robert S. Saunders
------------------------------
Title: Vice Chairman
------------------------------
Date:
------------------------------
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<PAGE> 1
Exhibit 10.8
PROGRAMMING CONTENT AGREEMENT
This Programming Content Agreement ("AGREEMENT") is made and entered
into by and between Vulcan Ventures, Incorporated, a Washington corporation
("VULCAN"), and High Speed Access Corp., a Delaware corporation ("HSAC"), as of
this 25th day of November, 1998 (the "EFFECTIVE DATE"), with reference to the
following facts:
A. Reference is hereby made to the Systems Access and Investment
Agreement of even date herewith ("ACCESS AGREEMENT") by and
among HSAC, Vulcan, Charter Communications, Inc. ("CHARTER"),
and Marcus Cable, Inc. ("MARCUS"), and to the Network Services
Agreement of even date herewith ("NETWORK SERVICES AGREEMENT")
by and among HSAC, Marcus, and Charter. Pursuant to those
agreements, HSAC has been retained to provide certain Internet
access and related services, to individuals residing within
certain areas served by Charter and Marcus.
B. Vulcan has agreed to make an equity investment in HSAC in
accordance with the terms and conditions set forth in the
Access Agreement and the Other Agreements referred to (and as
defined) therein.
C. Pursuant to the Access Agreement and the Network Services
Agreement, HSAC may also provide Internet access and related
services to subscribers and potential subscribers of Cable
Systems owned, controlled, or operated by MSOs not affiliated
with Vulcan or its affiliates.
D. HSAC, subject to certain limitations set forth in this
Agreement, desires to grant to Vulcan the exclusive right to
provide programming content to all Cable Systems and
Subscribers serviced by HSAC.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
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 "CABLE SYSTEM" means any radio frequency ("RF") cable television
franchise or hybrid fiber-coaxial RF plant distribution system serving a
geographically proximal group of residences, businesses, or other locations.
Cable Systems include both One-Way Systems and Two-Way Systems, and further
include both Vulcan Systems and Independent Systems.
1.2 "CONTENT" means information services, Web Pages, Web Sites,
Telephony, EPGs, other multimedia information now known or hereafter developed,
in digital or analog form, or such other forms as may now exist or hereafter
become available. Content includes, without limitation, text, graphics, audio,
video, audiovisual images, still images, animation, hypertext documents, data,
interactive services, other services accessible using the World Wide Web, and
the like or similar materials or services.
<PAGE> 2
1.3 "ELECTRONIC PROGRAM GUIDE" or "EPG" means a television screen or
Web Page that contains information, including without limitation schedule and
channel information, relating to television programs, Vulcan Content, or other
Content delivered to Subscribers.
1.4 "HSAC CONTENT" means the Web Pages, Startup Pages, EPGs, and other
Content designed, created or acquired by HSAC and included within the HSAC
Services in accordance with the terms of this Agreement. HSAC Content includes,
without limitation, the look, feel, and configuration of any Internet or World
Wide Web services designed, created or acquired by HSAC, the underlying user
interfaces and screen templates, the programming structure of such Internet or
World Wide Web services, all other such Content designed, created or acquired as
HSAC may include within the HSAC Services in accordance with the terms of this
Agreement, and all IP Rights relating thereto.
1.5 "HSAC MARKS" means all trademarks, service marks, trade names,
logos, designs, and other identifying marks of any kind other than the Vulcan
Marks associated with or used in connection with the HSAC Services.
1.6 "HSAC NETWORK EQUIPMENT" means the equipment that HSAC employs for
operation of the HSAC Services by connecting such equipment to the head-end of
Cable Systems. HSAC Network Equipment includes, without limitation, all
monitoring devices, telecommunications equipment, storage devices, computing and
data processing equipment, and software.
1.7 "HSAC SERVICES" means the design, construction (excluding the
RF/plant portion of the Cable System), installation, activation, operation,
sales and marketing, customer service, billing, provision and maintenance of
Internet access and related services from the Method of Access closest to the
Subscriber (including, without limitation, a Subscriber's computer and any of
its internal or external communication devices) through any Cable System or
other Method of Access to an Internet Portal including, without limitation
interfacing HSAC Network Equipment with Cable Systems to allow Subscribers, for
a monthly fee or other charges, to browse the World Wide Web, read news groups,
and receive and send electronic mail ("E-mail") and perform related activities.
1.8 "INDEPENDENT SYSTEM" means any Cable System owned, operated, or
otherwise controlled by an MSO unaffiliated with Vulcan, Charter, Marcus or any
of their affiliates.
1.9 "INTERNET" means the decentralized, worldwide network of computers
commonly referred to as the Internet, as it now exists or is hereafter
developed, modified, changed, evolved or replaced, and includes but is not
limited to the World Wide Web.
1.10 "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, modems that are used to connect to customers and leased
telecommunication lines that connect such site directly to a part of the
Internet backbone.
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<PAGE> 3
1.11 "INTERNET SERVICE PROVIDER" or "ISP" means any entity that
provides its clients access to the Internet, or the means by which clients can
establish a presence on the Internet.
1.12 "IP RIGHTS" means any and all rights: (i) under worldwide laws of
copyright, patent, trademark, trade dress, trade secrets, and unfair
competition; (ii) under "droit moral" or moral rights or other similar laws
existing in anywhere in the Universe; (iii) relating to the development and use
of databases, mask works, or know-how; (iv) subsisting in any and all
applications, registrations, renewals, extensions, restorations, continuations,
divisionals, or foreign counterparts of any of the foregoing; and, (v) to
register or reserve business names, trade names, or Internet domain names.
1.13 "LOCAL CONTENT" means Content designed, created, or acquired by
HSAC uniquely for the needs of Subscribers in a particular geographic region
where HSAC provides HSAC Services.
1.14 "METHOD OF ACCESS" means the manner in which a Subscriber accesses
HSAC Services, whether existing now or hereafter developed, including without
limitation through a computer, set-top box, television, or other device, and
further including, without limitation, delivery over cable lines, satellite
broadcast, cellular transmission, telephone lines, RF transmission or any other
methods of access now known or hereafter developed. A Method of Access will be
without regard to the nature of the experience presented to users, whether such
experience is visual, audio, or otherwise.
1.15 "MSO" means an entity that owns, controls, or operates Cable
Systems that is generally referred to as a Multiple System Operator in the cable
television industry.
1.16 "ONE-WAY SYSTEM" 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 Subscriber to an Internet Portal.
1.17 "STARTUP PAGE" means the first or default television or computer
screen displayed to Subscribers every time that they access the HSAC Services as
a means to obtain access to the Internet, the Vulcan Content, or any other
interactive material available via the HSAC Services. A Startup Page may or may
not be in the form of a Web Page, and may be different for different Cable
Systems.
1.18 "SUBSCRIBER" means an individual, family, or other entity that
receives cable television services from Vulcan or its affiliates and resides
within a Cable System, or receives HSAC Services from HSAC (whether or not such
Subscriber receives cable television services from Vulcan or its affiliates or
resides within a Cable System), regardless of such Subscriber's Method of
Access, or both.
1.19 "TELEPHONY" means the use of HSAC Services or Vulcan Content to
provide Subscribers with the ability to send and receive audio data, including
without limitation the ability to place and receive telephone calls, using HSAC
Network Equipment or Vulcan Equipment, rather than traditional telephone
equipment.
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1.20 "TWO-WAY SYSTEM" 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
Subscriber, without using another means to send or receive any information from
the Subscriber to an Internet Portal.
1.21 "VULCAN CONTENT" means the Web Pages, Startup Pages, EPGs, and
other Content designated by Vulcan to HSAC as "Vulcan Content" under the terms
of this Agreement. Vulcan Content includes, without limitation, the look, feel,
and configuration of any Web Pages, Startup Pages, EPG, other Content, and any
other Internet or World Wide Web services provided by Vulcan, the underlying
user interfaces and screen templates, the programming structure of any of the
foregoing, and all other such Content as Vulcan will determine to provide in its
sole discretion, and all IP Rights relating thereto.
1.22 "VULCAN EQUIPMENT" means any equipment that is owned or controlled
by Vulcan and includes, without limitation, all monitoring devices,
telecommunications equipment, storage devices, computing and data processing
equipment, and software.
1.23 "VULCAN MARKS" means all trademarks, service marks, trade names,
logos, designs, and other identifying marks of any kind owned or controlled by
Vulcan, Charter, Marcus, or any of their affiliates, that are associated with or
used in connection with the Vulcan Content, including without limitation the
marks "Charter," "Charter Mail," "Charter Pipeline," and "Marcus OnLine."
1.24 "VULCAN SYSTEM" means any Cable System now or hereafter owned,
operated, or otherwise controlled by Vulcan or its affiliates, including without
limitation Charter and Marcus.
1.25 "WEB PAGE" means a document specially formatted in hypertext
markup language ("HTML"), which supports links to other documents, as well as
graphics, audio, and video files. A group of Web Pages linked together and share
the same World Wide Web domain name constitutes a "WEB SITE."
1.26 "WORLD WIDE WEB" means the system of Internet servers that
supports HTML-formatted documents. Not all Internet servers are part of the
World Wide Web.
1.27 Other Definitions. The following additional defined terms shall
have the meanings ascribed to them in the Sections indicated below:
<TABLE>
<S> <C>
"COMPETING CONTENT" ...... 2.1.2
"CONFIDENTIAL INFORMATION" 8.1
"DISCLOSING PARTY" ....... 8.1
"GRANDFATHERED SYSTEM" ... 2.3
"NEW ACCESS METHOD" ...... 2.2.4
"NOTICES" ................ 13.18
"RECIPIENT" .............. 8.1
"RF" ..................... 1.1
</TABLE>
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2. HSAC Services and Vulcan Content.
2.1 Exclusive Provision of Vulcan Content. Vulcan Content will be
exclusive within the HSAC Services as follows:
2.1.1 Must Carry. HSAC must carry, on an exclusive basis, as
part of the HSAC Services for any and all Cable Systems and Subscribers for
which HSAC provides the HSAC Services and/or any other Internet access or
related services, regardless of whether any such Cable System is or any such
Subscribers reside within a Vulcan System or an Independent System, and
regardless of Subscriber's Method of Access, all Vulcan Content, and any and all
other Content that Vulcan designates as part of the Vulcan Content. From time to
time during the term of this Agreement, Vulcan may designate Content for
inclusion in the Vulcan Content, or may modify the Vulcan Content, by notifying
HSAC in writing of the Content to be included. HSAC will add such Content to the
HSAC Services and/or any other Internet access or related services within ten
(10) days of its designation by Vulcan as part of the Vulcan Content. HSAC will
not be in breach of the foregoing obligation if HSAC does not receive any
specialized equipment required to carry the Vulcan Content, 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 such ten (10)-day period.
2.1.2 No Competition. HSAC will not, with respect to any Cable
System, any other Method of Access, or for any Subscribers develop, provide,
license, or otherwise include any information, services, Web Pages or Web Sites,
audio, video, sound, Telephony, or other Content that competes, directly or
indirectly, with Vulcan Content ("COMPETING CONTENT"). The decision whether
Content competes with Vulcan Content will be in Vulcan's sole discretion. Vulcan
will request in writing the immediate removal of any Competing Content, which
request HSAC will honor within three (3) days. Failure to honor such a request
will constitute a material breach of this agreement.
2.1.3 HSAC Services. Vulcan acknowledges that HSAC has the
right under this Agreement to create and include HSAC Content and publish such
HSAC Content on a Web Site owned or controlled by HSAC ("HSAC's Web Site") in
accordance with the following provisions: (a) such Web Site shall be directly
accessible through no more than one browser user interface button ("BUI") to be
located on Vulcan's Startup Page (the size, placement, and other aspects of such
BUI shall be determined by Vulcan at its sole discretion), (b) such Web Site
will include on the start page thereof at least one BUI to a nationally
recognized Internet Search engine (e.g., Yahooo or Excite), (c) such Web Site
will include on the start page thereof at least one BUI to Vulcan's Startup
Page, (d) any HSAC Content on such Web Site will be limited to Local Content and
BUIs to other Web Pages, (e) any HSAC Content included on such Web Site will not
constitute Competing Content, (f) such Web Site will have a domain name that is
different from the Vulcan Startup Page and related Web Sites, and (g)
notwithstanding clause (d) above, HSAC shall have the right to sell advertising
and otherwise to derive and retain revenues from such HSAC Content.
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2.2 Form of Content. The Vulcan Content may include, in Vulcan's sole
discretion, any combination of the following:
2.2.1 Startup Page. Vulcan may, in its sole discretion,
design, or have designed a Startup Page, or multiple Startup Pages, for Cable
Systems and other Subscribers. Until such time as Vulcan's Startup Page is
available, HSAC may develop a Startup Page for any Cable System or Subscribers
subject to the branding provisions of Section 2.2.5; provided, that, such
Startup Page will be replaced by Vulcan's Startup Page when it is available. To
the extent technically feasible, HSAC will ensure that any Startup Page provided
by Vulcan is the first or default screen encountered by Subscribers when they
access HSAC Services, regardless of the Method of Access, and that such Startup
Page and Vulcan Content cannot be replaced or bypassed by Subscribers without
Vulcan's express written permission.
2.2.2 EPG. If HSAC's Website or HSAC Services includes an EPG,
then prior to inclusion of such EPG as part of such HSAC's Website or HSAC
Services, HSAC will present the proposed design, form, content, and aesthetics
of such EPG to Vulcan for Vulcan's approval, which approval may be withheld in
Vulcan's sole discretion. If Vulcan disapproves of the proposed EPG, HSAC will
redesign the EPG based on input from Vulcan, or Vulcan may, in its sole
discretion, provide to HSAC an EPG of its own design for inclusion as part of
the HSAC's Website or HSAC Services. In addition, Vulcan will have the right to
dictate to HSAC the priority to be afforded various listings, such as the Vulcan
Content, any television channels, and other services, within any EPG included on
HSAC's Web Site or in HSAC Service.
2.2.3 [Intentionally Deleted]
2.2.4 Other Points of Subscriber Access. To the extent that
Subscribers are able or become able to access HSAC Services without relying on
any of the methods described in Section 2.2.1 above ("NEW ACCESS METHOD"), HSAC
will immediately notify Vulcan of the New Access Method, and HSAC and Vulcan
will cooperate in good faith to ensure that the New Access Method provides
exclusively for the delivery of Vulcan Content.
2.2.5 Branding. The Vulcan Startup Page (and any temporary
Startup Page developed by HSAC under Section 2.2.1 above) will be marketed,
deployed, and supported only under brands, service marks, and trademarks
designated by Vulcan or its affiliates. Vulcan will be responsible for
registering such brands, service marks, and trademarks and obtaining a matching
or closely related Internet domain name. Such trademarks and domain names will
be owned by Vulcan or an affiliate. If such domain names are temporarily owned
or controlled by HSAC, HSAC will take all steps necessary promptly to transfer
and assign such domain names to Vulcan or its designated affiliate. Vulcan will
include the brand, service mark or trademark of any Independent System utilizing
the HSAC Services on the Vulcan Startup Page for such Independent System (the
size, placement, and other aspects of such brand, service mark or trademark
shall be determined by Vulcan, in its sole discretion, provided, that such
brand, service mark or trademark shall be reasonably visible to Subscribers ).
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2.2.6 Property Rights Notices. HSAC will include in the Vulcan
Content such proprietary rights notices, credits, World Wide Web hyperlinks, and
other such information as Vulcan directs, and will take no steps to alter,
remove, obscure, or otherwise interfere with any proprietary rights notices in
the Vulcan Content.
2.2.7 Delivery of Vulcan Content to HSAC. Vulcan shall be
responsible for the delivery of all Vulcan Content to HSAC for inclusion in HSAC
Services. Vulcan Content shall be delivered to HSAC in electronic form suitable
for inclusion in the HSAC Services, either to a central HSAC server or to
equipment located in the headend of each Cable System, as designated by HSAC.
HSAC and Vulcan shall reasonably cooperate to determine the most suitable format
for the electronic delivery of the Vulcan Content.
2.3 Pre-Existing Systems. Notwithstanding anything in Section 2.1 to
the contrary, HSAC may itself provide or have provided by a third party Content
other than Vulcan Content to those Cable Systems listed in Schedule 2.3 (each a
"GRANDFATHERED SYSTEM"). HSAC will use its best efforts to convert each
Grandfathered System to exclusive use of Vulcan Content upon the expiration or
termination of the agreements between HSAC and Grandfathered Systems, or at such
earlier dates as those agreements otherwise permit.
2.4 HSAC as ISP. HSAC may, from time to time, enter into agreements
with Independent Systems whereby HSAC will serve as an ISP within each such
Independent System. HSAC will notify Vulcan in writing within ten (10) days of
entering into any agreement with an Independent System, and HSAC will
exclusively provide Vulcan Content, in accordance with Section 2.1 above, to
each such Independent System, as though that Independent System were a Cable
System subject to the terms of this Agreement.
2.4.1 Exception: Private Label ISP. Subject to HSAC's
obtaining Vulcan's prior written consent on a case-by-case basis, and Section
2.1 notwithstanding, HSAC may enter into a relationship or arrangements with an
Independent System pursuant to which HSAC provides ISP services that: (i) are
not required be delivered exclusively under the Vulcan Marks, and (ii) do not
include the requirement that the Independent System exclusively receive Vulcan
Content. The terms and conditions of any such relationship or arrangements shall
be subject to Vulcan's prior written approval.
2.4.2 Tailored Content. Within ten (10) days of entering into
an ISP or similar agreement with an Independent System, HSAC will notify Vulcan
in writing of such agreement and provide sufficient information concerning the
Independent System for Vulcan to be able to tailor the Vulcan Content to the
market served by the Independent System. If HSAC has not received Vulcan Content
tailored to the Independent System within thirty (30) days of delivery of notice
of the agreement, then HSAC will use Vulcan Content already in use for Cable
Systems, until such time as Vulcan provides tailored Content to HSAC for the
Independent System.
2.5 [Intentionally Deleted]
2.6 Other HSAC Activities. Nothing in this Agreement shall be construed
to restrict HSAC's right to provide Web Site design, management, and hosting
services, as
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long as such services and activities are not reasonably deemed by Vulcan to be
competitive with Vulcan Content.
2.7 Pricing. The Vulcan Content will be provided to Cable Systems
accessing the Vulcan Content through the HSAC Services free of charge until ten
years from the Effective Date. At such time, Vulcan may charge HSAC, the Vulcan
Systems, and the Independent Systems for the provision of the Vulcan Content,
provided that any fee that Vulcan may charge HSAC for the provision of the
Vulcan Content shall not be more than the lowest fee charged by Vulcan to
another similar ISP for substantially the same Vulcan Content. Nothing in this
Section 2.7 shall prevent Vulcan from deriving revenues from the Vulcan Content
from third parties, including, without limitation, by charging Subscribers for
access to particular Vulcan Content, from the sale of advertising on any Vulcan
Content, the provision of BUIs to Web Pages, and other transactions.
3. Development of Content.
3.1 Development of Vulcan Content. Subject to the terms and conditions
of this Agreement and HSAC's technical requirements, Vulcan will, in its sole
discretion, develop, acquire, or license all Content that will make up the
Vulcan Content, will have final input on all business and technical decisions
concerning how best to deliver Vulcan Content to Cable Systems and to
Subscribers, and will be able to update the Vulcan Content from time to time in
its sole discretion.
3.2 Cooperation. HSAC will, at its own cost and expense, provide
commercially reasonable assistance Vulcan in the development of Vulcan Content
by providing Vulcan any and all support required for Vulcan to develop Vulcan
Content that can be delivered using HSAC Network Equipment to Cable Systems and
from Cable Systems to Subscribers. Such assistance will include, without
limitation, the provision by HSAC of: (i) all technical information, materials,
and requirements of the HSAC Network Equipment; (ii) access to HSAC engineers
and technical personnel to the extent necessary to ensure accurate and reliable
delivery of Vulcan Content to Cable Systems and to Subscribers; and (iii) access
to test equipment, test suites, software, facilities, and simulations in order
for Vulcan to test the operation of the Vulcan Content on the HSAC Network
Equipment.
4. Marketing and Promotional Activities.
4.1 HSAC Marketing. HSAC's responsibilities with respect to marketing
and promotion of the HSAC Services and the Vulcan Content will be as set forth
in the Network Services Agreement and the Access Agreement, with the further
obligation that HSAC conduct such marketing and promotion to Independent
Systems. Vulcan shall make available, on the same basis as Vulcan makes
available to other distributors of the Vulcan Content, existing training and
marketing materials for HSAC's marketing and MSO sales personnel to assist such
personnel in marketing the HSAC Service, including the Vulcan Content, to MSOs
and to end users.
4.2 Vulcan Marketing. Vulcan will have the right but not the obligation
to market and promote the Vulcan Content and the HSAC Services to Subscribers
and to Cable Systems by any means that Vulcan deems effective.
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5. Provision of HSAC Services and Deployment of Vulcan Content.
5.1 By HSAC. HSAC will have the responsibility for providing HSAC
Services and HSAC Network Equipment to Cable Systems and Subscribers. HSAC will,
at its own cost and expense, install all HSAC Network Equipment necessary for
the delivery of Vulcan Content to Cable Systems and Subscribers. To the extent
that the accurate and reliable delivery of Vulcan Content to Subscribers
requires the purchase of equipment at any head-end that exceeds an aggregate
cost of three thousand dollars ($3,000) for such head-end during the term of
this Agreement, or the purchase of additional bandwidth to permit the delivery
and/or update of such Content, Vulcan shall reimburse HSAC for the cost of such
equipment and bandwidth. Except to the extent set forth in Section 11.4 of this
Agreement, Vulcan will have no responsibility for, or liability arising out of,
the use, maintenance, or operation of the HSAC Network Equipment.
5.2 By Vulcan. Vulcan will have the responsibility for delivering
Vulcan Content to HSAC for inclusion in delivery of HSAC Services to Cable
Systems, in accordance with Section 2.2.7 of this Agreement. Vulcan may, in its
sole discretion, localize or tailor Vulcan Content to suit the markets of
particular Cable Systems and/or Subscribers. Vulcan and HSAC will determine
mutually agreeable times, methods, and media for delivery of the Vulcan Content,
as well as for future delivery of Content to be added to the Vulcan Content.
5.3 Deployment of Vulcan Content. Subject to Section 2.2.7 of this
Agreement, HSAC shall operate and manage the HSAC Network Equipment in such a
manner to insure the reliable delivery of Vulcan Content to Subscribers at
sufficiently high rates of transmission. Vulcan may, in its sole discretion,
determine that the HSAC Network Equipment or certain installations of the HSAC
Network Equipment is or are not providing Subscribers with access to the Vulcan
Content with sufficient reliability or at sufficiently high rates of
transmission. In such event, HSAC will, at HSAC's expense (subject to Section
5.1 above), place Vulcan Equipment with the HSAC Network Equipment, and will
install, operate, and maintain such Vulcan Equipment.
6. Licenses.
6.1 By HSAC.
6.1.1 HSAC IP Rights. HSAC grants to Vulcan a worldwide,
non-exclusive, royalty-free license to use any and all of HSAC IP Rights as well
as any software, hardware, materials, or other information provided by HSAC to
Vulcan, in connection with the delivery of the Vulcan Content and Vulcan's
performance of its obligations under this Agreement.
6.1.2 HSAC Confidential Information. HSAC grants to Vulcan a
worldwide, non-exclusive, royalty-free license to use any and all Confidential
Information provided by HSAC, as well as any software, hardware, materials, or
other information provided by HSAC to Vulcan, to the extent necessary to provide
Vulcan Content pursuant hereto.
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6.1.3 HSAC Quality Control. All marketing and promotional
materials, and any materials that have an HSAC Mark on them, will comply with
the Quality Controls specified on Schedule B hereto. Before any such materials
prepared by Vulcan are used, Vulcan will transmit a copy to HSAC, and HSAC will
have fifteen (15) days in which to reject such materials or to request changes
be made to such materials. If HSAC does not respond to Vulcan within such
fifteen (15) day period, such materials will be deemed approved for
distribution.
6.2 By Vulcan.
6.2.1 Vulcan Content. Vulcan grants to HSAC a worldwide,
non-exclusive, royalty-free, license to use, receive, store, and distribute
Vulcan Content to Cable Systems and Subscribers authorized to receive such
Vulcan Content in accordance with any restrictions applicable to such Vulcan
Content.
6.2.2 Vulcan Confidential Information. Vulcan grants to HSAC a
worldwide, non-exclusive, royalty-free license to use any and all Confidential
Information provided by Vulcan, as well as any software, hardware, materials, or
other information provided by Vulcan to HSAC, solely to ensure and maintain the
compatibility of HSAC Services with Vulcan Content.
6.2.3 Vulcan Marks. Vulcan grants to HSAC a worldwide,
non-exclusive, royalty-free license to use, reproduce, and distribute any and
all Vulcan Marks, solely for use in connection with the performance of its
obligations hereunder; provided, that: (i) any use will be with the prior
written approval of Vulcan, which approval will not be unreasonably withheld,
(ii) any goodwill associated with the use of the Vulcan Marks will inure to the
benefit of Vulcan, and (iii) any use will comply with Schedule B.
6.2.4 Vulcan Quality Control. All marketing and promotional
materials, and any materials that have a Vulcan Mark on them, will comply with
the Quality Controls specified on Schedule B hereto. Before any such materials
prepared by HSAC are used, HSAC will transmit a copy to Vulcan, and Vulcan will
have fifteen (15) days in which to reject such materials or to request changes
be made to such materials. If Vulcan does not respond to HSAC within such
fifteen (15) day period such materials will be deemed approved for distribution.
6.3 Restrictions. HSAC will not reproduce, copy, alter, modify, edit,
or distribute the Vulcan Content except as permitted by this Agreement. In
addition, HSAC will not modify, alter, disassemble, decompile, or reverse
engineer any part of the Vulcan Content. A violation by HSAC of this Section 6.3
will constitute a material breach of this Agreement.
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7. Ownership and Intellectual Property Rights.
7.1 Vulcan. Vulcan owns and retains all right, title, and interest in
and to the Vulcan IP Rights, including without limitation: (i) the Vulcan
Content, (ii) the Vulcan Marks, and (iii) any Confidential Information and any
hardware, software, materials, or other information provided by Vulcan to HSAC
under this Agreement.
7.2 HSAC. HSAC owns and retains all right, title and interest in and to
the HSAC IP Rights, including without limitation: (i) the HSAC Services, (ii)
the HSAC Marks, and (iii) any Confidential Information and any hardware,
software, materials, or other information provided by HSAC to Vulcan under this
Agreement.
8. Confidential Information.
8.1 Disclosure. HSAC and Vulcan acknowledge that either party
("DISCLOSING PARTY") may disclose to the other party ("RECIPIENT") certain
information related to the Disclosing Party'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 ("CONFIDENTIAL INFORMATION"). In the event
that Recipient receives such Confidential Information, Recipient agrees to keep
such information confidential by using the same care and discretion that it uses
with its own information that it designates as confidential.
8.2 Limitation on Use. The Recipient will not permit the duplication,
use, or disclosure of any Confidential Information to any person (other than an
employee, agent, or representative of the Recipient who must have such
information for performance of its obligation hereunder), unless such
duplication, use, or disclosure is specifically authorized by the Disclosing
Party in writing or required by law. The Recipient will: (i) not disclose any
Confidential Information to any third person without the prior written consent
of the Disclosing Party, (ii) not use, directly, indirectly, or in concert with
any other person, any Confidential Information for purposes other than
performance of obligations under this Agreement, and (iii) use reasonable
diligence, and in no event less than that degree of care that the Recipient uses
with 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 copies must bear the same
confidentiality notices, legends, and intellectual property rights designations
that appear on the original versions.
8.3 The above obligations of confidentiality will terminate five (5)
years after expiration of this Agreement, and will not impose an obligation on
Recipient with respect to any portion of the information received that:
8.3.1 is now generally known or available, or hereafter,
through no act or failure on the part of Recipient, becomes generally known or
available;
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8.3.2 is known to Recipient prior to receiving such
information from an independent source not subject to confidentiality
restrictions;
8.3.3 is authorized for dissemination to others by Disclosing
Party without restriction on disclosure;
8.3.4 can be shown to be independently developed by Recipient;
or
8.3.5 Recipient is required by law, rule, regulation, court
order, or the like to disclose, provided, that, Recipient immediately notifies
the Disclosing Party of the required disclosure, cooperates if the Disclosing
Party elects to object to the required disclosure, and only produces that
information specifically required to be disclosed.
8.4 The parties acknowledge that any threatened or actual unauthorized
use or disclosure of any Confidential Information will cause the Disclosing
Party great and irreparable harm, and that money damages will be insufficient to
compensate for such unauthorized use or disclosure. Without limiting any of its
other rights or remedies, the Disclosing Party will be entitled to receive
immediate injunctive or equitable relief to prevent or terminate any
unauthorized disclosure, without the requirement to post any bond or other
security therefor.
9. Term.
9.1 Term. The term of this Agreement will commence as of the Effective
Date and will continue in full force and effect until terminated by as provided
in Section 9.2 below.
9.2 Breach and Termination
9.2.1 If not earlier terminated pursuant to Section 9.2.3
below, this Agreement will automatically terminate upon the termination or
expiration of the Access Agreement.
9.2.2 In the event of any breach of this Agreement, the
non-breaching party shall, in addition to any other remedy provided hereunder,
or available at law or in equity, be entitled to bring an action at law for
money damages, or in equity for specific performance or to seek injunctive
relief; provided, however, that, in no event shall HSAC be entitled to terminate
or rescind this Agreement or enjoin, or otherwise interfere with the provision
of the Vulcan Content to Vulcan Systems, Independent Systems, and Subscribers as
contemplated hereunder.
9.2.3 Without limiting its other remedies at law or in equity
for any breach of this Agreement by HSAC, Vulcan may, in its sole discretion,
terminate this Agreement at any time and for any reason or no reason whatsoever
upon six (6) months written notice to HSAC.
9.2.4 HSAC and Vulcan 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
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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 above, 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.
9.2.5 Neither party will be responsible for any delay or
failure in performance of any part of this Agreement, including without
limitation any delay or failure to provide Vulcan Content (in the case of
Vulcan) or any delay or failure to provide HSAC Services (in the case of HSAC),
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 or utilities, or other similar causes or
contingencies beyond its reasonable control.
9.3 Effect of Termination. Upon termination, all licenses granted in
Section 5.3 above will terminate, each party will return or destroy all
Confidential Information of the other party in its possession, HSAC's rights to
use, store, reproduce, and distribute Vulcan Content will terminate, and HSAC
will return to Vulcan all Vulcan Content, whether in electronic or
non-electronic form, and whether or not then in use by HSAC. If Vulcan has
supplied any Vulcan Equipment for HSAC use in providing Vulcan Content, Vulcan
may, in its sole discretion: (i) take possession of such Vulcan Equipment and
reimburse HSAC for reasonable expenses incurred in disconnecting the Vulcan
Equipment from the HSAC Network Equipment, (ii) offer the Vulcan Equipment to
HSAC at the fair market value, or (iii) if no market exists for the Vulcan
Equipment, offer the Vulcan Equipment to HSAC at a price equivalent to ten
percent (10%) over the salvage value.
10. Representations and Warranties.
10.1 HSAC. HSAC hereby represents and warrants to Vulcan as follows:
10.1.1 HSAC 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.
10.1.2 HSAC's execution, delivery, and performance of this
Agreement has been duly authorized by all requisite corporate action, and this
Agreement constitutes a legally valid and binding obligation of HSAC enforceable
in accordance with its terms, subject to laws relating to bankruptcy and
insolvency, and subject to a court's application of equitable principles.
10.1.3 HSAC's execution, delivery, and performance of this
Agreement will not violate, conflict with, 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.
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10.1.4 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
and the transactions contemplated herein.
10.1.5 HSAC either owns or has properly licensed all rights
under the HSAC IP Rights necessary or required to provide the HSAC Services and
perform the other services to be performed by HSAC hereunder, including, without
limitation, all rights under relating to any equipment (including, without
limitation, the HSAC Network Equipment), software, or Content that HSAC will use
or will provide in connection with the HSAC Services and the other services to
be performed by HSAC hereunder. HSAC's provision or operation of the HSAC
Services and the other services to be performed by HSAC hereunder and under the
Network Services Agreement or the Access Agreement will not violate or infringe
any intellectual property laws or violate or infringe any IP Rights of third
parties. Notwithstanding anything to contrary, no representation or warranty is
made, nor shall there be any liability, with respect to Content included in HSAC
Content that is Licensed from third parties.
10.2 Vulcan. Vulcan hereby represents and warrants to HSAC as follows:
10.2.1 Vulcan 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.
10.2.2 Vulcan's execution, delivery, and performance of this
Agreement and has been duly authorized by all requisite corporate action, and
this Agreement constitutes a legally valid and binding obligation enforceable in
accordance with its terms, subject to laws relating to bankruptcy and
insolvency, and subject to a court's application of equitable principles.
10.2.3 Vulcan's execution, delivery, and performance of this
Agreement will not violate, conflict with, or result in a breach or default
under Vulcan's certificate of incorporation, bylaws, or other charter documents,
or any judgment, award, decree, agreement, or other instrument to which Vulcan
is a party.
10.2.4 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 Vulcan to enter into, deliver, and perform this Agreement
and the transactions contemplated herein.
10.2.5 Vulcan either owns or has properly licensed all rights
under the Vulcan IP Rights necessary or required to provide the Vulcan Content
and perform the other services to be performed by Vulcan hereunder, including,
without limitation, all rights under relating to any equipment software, or
Content that Vulcan will use or will provide in connection with the Vulcan
Content and the other services to be performed by Vulcan hereunder. Vulcan's
provision of the Vulcan Content and other services to be performed by Vulcan
hereunder and under the Network Services Agreement or the Access Agreement will
not violate or infringe any intellectual property laws or violate or infringe
any IP Rights of third parties. Notwithstanding anything to contrary, no
representation or warranty is made,
-14-
<PAGE> 15
nor shall there be any liability, with respect to Content included in Vulcan
Content that is Licensed from third parties.
11. Indemnification.
11.1 HSAC will indemnify, defend, and hold harmless Vulcan 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 HSAC of any of its representations,
warranties, or covenants hereunder, or (ii) HSAC's acts or omissions in
connection with the provision of the HSAC Services, 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 that arise from the Vulcan
Content.
11.2 [Intentionally deleted].
11.3 Vulcan will 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 Vulcan of any of its representations,
warranties, or covenants hereunder, or (ii) Vulcan's acts or omissions in
connection with the provision the Vulcan Content, 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 the HSAC Services.
11.4 HSAC agrees to indemnify, defend, and hold harmless Vulcan and its
affiliates, agents, successors, assigns, representatives, officers, and
directors, and Vulcan agrees 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 by any third party for injuries, including death to persons, resulting
from the indemnifying party's negligent or willful acts or omissions or those of
persons employed by the indemnifying party, its agents, or subcontractors.
Vulcan and HSAC respectively agree to notify the other party promptly of any
written claims or demands against the indemnified party for which the
indemnifying party is deemed responsible hereunder, provided, that, any failure
to provide such notification shall not affect the substantive rights of the
parties hereunder.
12. Limitation of Liability.
12.1 Limitation of Liability. EXCEPT FOR THE INDEMNIFICATION
OBLIGATIONS DETAILED IN SECTION 11 ABOVE, IN NO EVENT WILL EITHER
-15-
<PAGE> 16
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.
13. General.
13.1 Obligations to Survive Termination. The parties recognize and
agree that their obligations under Sections 7, 8, 9, 10, 11, 12, and this
Section 13 of this Agreement will survive the cancellation, termination, or
expiration of this Agreement.
13.2 Closing. The closing of this Agreement and the transactions
contemplated herein will take place at such time and place as the parties may
agree.
13.3 Assignment. HSAC will not have the right to assign this Agreement
to any person or entity without the prior written consent of Vulcan, except it
may without Vulcan'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. Vulcan may assign this Agreement to any
person or entity, and this Agreement will be binding and inure to the benefit of
its successors and assigns. Each party will be permitted to assign this
Agreement and grant a security interest in its contract rights and tangible or
intangible property interests (including the HSAC Network Equipment) arising
under this Agreement for purposes of securing financing from commercial
lender(s). However, as a condition to doing so, HSAC will be obligated to obtain
non-disturbance agreements in form and substance satisfactory to Vulcan 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 will not disturb, affect, or interfere with HSAC's provision of the HSAC
Services hereunder. All assignments in contravention of this Section 13.3 will
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.
13.4 Amendment and Waiver. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of both parties unless otherwise expressly permitted in
this Agreement, and any written waiver by either party of any breach of any term
or condition will not be deemed to be a waiver of any subsequent or other
breach, term, or condition of this Agreement.
13.5 No Joint Venture or Partnership. Nothing contained herein will be
deemed to create any relationship of partnership, associates, joint venture or
principal-agent between HSAC and Vulcan, and neither party will hold itself out
in its advertising or otherwise in any manner which would indicate such
relationship. Each party is acting as a principal hereunder and is responsible
for its own income tax consequences.
-16-
<PAGE> 17
13.6 Section Headings. The section headings contained in this Agreement
are inserted as a matter of convenience and will not affect in any way the
construction of the terms of this Agreement.
13.7 Governing Law. This Agreement and the rights and obligations of
the parties hereunder will be governed by and interpreted in accordance with the
laws of the State of Delaware, without reference to the conflicts of laws
principles thereof.
13.8 Equal Construction. This Agreement has been 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.
13.9 [Intentionally omitted].
13.10 [Intentionally omitted].
13.11 Attorney's Fees. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, each party will pay its own
fees, costs, and disbursements in connection therewith.
13.12 Year 2000 Compliance. To the best of their respective knowledge,
each party represents, warrants, and covenants that it has taken all actions
necessary and appropriate to assure that there shall be no material adverse
change to their respective business or electronic systems or material
interruptions in the operation and delivery of HSAC Services or the provision by
Vulcan of Vulcan Content 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 their respective computer-based systems, embedded
microchips and other data processing capabilities have been designed or modified
and fully tested in such a manner that such computer-based systems, embedded
microchips and other data processing capabilities will not generate any invalid
and/or incorrect date-related results or cause any of the problems commonly
referred to as "Year 2000 problems" and will, without interruption or manual
intervention, continue to operate consistently, predictably and accurately and
in accordance with all of the requirements of this Agreement, including without
limitation, meeting all specifications and/or functionality and performance
requirements, when used during any year prior to, during or after the calendar
year 2000. Neither HSAC nor Operator warrants that interruptions in HSAC
Services or in the provision by Vulcan of Vulcan Content will not occur due to
the network or systems failures of other parties, including utilities and phone
services, caused by "Year 2000 problems."
13.13 Severability. The invalidity or unenforceability of any provision
of this Agreement will not affect the validity or enforceability of the
remaining provisions.
13.14 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.
-17-
<PAGE> 18
13.15 Rights and Remedies Cumulative. The rights and remedies provided
by this Agreement and any exhibits or schedules hereto are cumulative, and the
use of any one right or remedy by any party will 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.
13.16 Further Assurances. Each party hereto agrees to execute such
additional documents and schedules and take such other actions as the other
party or may reasonable request to consummate the transactions contemplated by
this Agreement and otherwise as may be necessary to effectively carry out the
terms and provisions of this Agreement.
13.17 Press Releases. Except as required by law, neither of the parties
will issue any public statements or press releases pertaining to the
transactions contemplated herein without the consent of the other party hereto.
13.18 Notices. All notices, requests, demands, and other communications
("NOTICES") required or permitted hereunder will be in writing, in English, will
refer to this Agreement, and may be delivered personally or by overnight air
courier guaranteeing next-day delivery, or sent by certified or registered mail,
return receipt requested, or by facsimile to such party at its address set forth
below (or such other address as may be designated by notice given in accordance
with this Section). The date of personal delivery or facsimile, the next day if
by express delivery, or the date five (5) days after certified or registered
mailing will be deemed the date on which such Notice is effective. Notices will
be sent to each party at the following addresses:
If to HSAC:
High Speed Access Corp.
1000 West Ormsby Ave., Suite 210
Louisville, Kentucky 40210
Fax: 502-5150-3101
Attention: John Hundley, Esq.
General Counsel
with a copy to:
Wyatt Tarrant & Combs
2800 Citizens Plaza
Louisville, Kentucky 40202
Fax: 502-589-0309
Attention: Patrick Mattingly, Esq.
-18-
<PAGE> 19
If to Vulcan:
Vulcan Ventures, Incorporated
110 110th Avenue NE
Bellevue, Washington 98004
Fax: 425-453-1985
Attention: William D. Savoy
with a copy to:
Irell & Manella LLP
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067
Fax: (310) 203-7199
Attention: Al Segel, Esq.
and to:
Charter Communications, Inc.
12444 Powerscourt Drive, Suite 400
St. Louis, Missouri 63131
Fax: 314-965-8793
Attention: Jerald Kent and Curt Shaw
13.19 Entire Agreement; Modifications. This Agreement and the schedules
and exhibits hereto set forth the entire agreement between the parties hereto
and any parties who have in the past or who are now representing either of the
parties hereto. This Agreement supersedes all prior oral or written
understandings and communications between the parties, and no other oral or
written representations will apply.
This Agreement is hereby agreed to and accepted as of the Effective
Date.
VULCAN VENTURES, INCORPORATED.
By: /s/ William D. Savoy
_______________________________
Title: Vice President
_______________________________
HIGH SPEED ACCESS CORP.
By: /s/ Robert S. Saunders
_______________________________
Title: Vice Chairman
_______________________________
-19-
<PAGE> 20
SCHEDULE A
GRANDFATHERED CABLE SYSTEMS
---------------------------
NETWORK SERVICES AGREEMENTS (MSOS):
-----------------------------------
1) HSANET CABLE AFFILIATE AGREEMENT DATED OCTOBER 15, 1997, BETWEEN
-------------------------------------------------------------------
HIGH SPEED ACCESS NETWORK, INC. AND GANS MULTIMEDIA PARTNERSHIP (ST. MARY'S,
- ----------------------------------------------------------------------------
MARYLAND).
- ----------
2) DATA CHANNEL SERVICES AGREEMENT DATED AUGUST 20, 1997, BETWEEN
-----------------------------------------------------------------
CATV.NET, INC. AND LIMESTONE CABLEVISION, AS AMENDED BY AN AMENDMENT TO DATA
- ----------------------------------------------------------------------------
CHANNEL SERVICES AGREEMENT DATED AND EFFECTIVE AS OF JUNE 1, 1998 (MAYSVILLE,
- -----------------------------------------------------------------------------
KY).
- ----
3) NETWORK SERVICES AGREEMENT DATED MAY 25, 1998, BETWEEN CATV.NET,
-------------------------------------------------------------------
INC. AND FALCON/CAPITAL CABLE PARTNERS, L.P. (COLUMBIA, MO). THE COMPANY HAS
- ----------------------------------------------------------------------------
PROPOSED AND EXPECTS TO ENTER INTO A SUCCESSOR, RESTATED NETWORKING SERVICES
- ----------------------------------------------------------------------------
AGREEMENT WITH FALCON/CAPITAL CABLE PARTNERS, L.P. BEFORE DECEMBER 31, 1998.
- ----------------------------------------------------------------------------
4) HSA NETWORK SERVICES AGREEMENT DATED JULY 1, 1998, BETWEEN THE
-----------------------------------------------------------------
COMPANY AND MID-ATLANTIC TELCOM PLUS, LLC D/B/A ONE POINT COMMUNICATIONS (PRINCE
- --------------------------------------------------------------------------------
WILLIAM COUNTY, VIRGINIA, AND HOWARD COUNTY, MARYLAND).
- -------------------------------------------------------
5) HSA NETWORK SERVICES AGREEMENT DATED MAY 18, 1998, BETWEEN THE
-----------------------------------------------------------------
COMPANY AND GENESIS CABLE COMMUNICATIONS, LLC, (AS AMENDED BY AN AMENDMENT TO
- -----------------------------------------------------------------------------
HSA NETWORK SERVICES AGREEMENT DATED AS OF OCTOBER 1, 1998) (WINDER, GA).
- -------------------------------------------------------------------------
6) HSA NETWORK SERVICES AGREEMENT DATED SEPTEMBER 24, 1998, BETWEEN THE
-----------------------------------------------------------------------
COMPANY AND MID-COAST CABLE TELEVISION, INC. (EDNA/EL CAMPO, TX).
- -----------------------------------------------------------------
7) HSA NETWORK SERVICES AGREEMENT DATED SEPTEMBER 2, 1998, BETWEEN THE
----------------------------------------------------------------------
COMPANY AND SHEN HEIGHTS TV ASSOCIATION, INC. (SHENANDOAH, PA).
- ---------------------------------------------------------------
8) HSA NETWORK SERVICES AGREEMENT DATED SEPTEMBER 1, 1998, BETWEEN THE
----------------------------------------------------------------------
COMPANY AND E.T.S. CABLEVISION, INC. D/B/A EN-TOUCH SYSTEMS (SOUTH/NORTH
- ------------------------------------------------------------------------
HOUSTON, TX).
- -------------
9) [VERBAL/DRAFT] HSA NETWORK SERVICES AGREEMENT DATED SEPTEMBER 15,
--------------------------------------------------------------------
1998, BETWEEN THE COMPANY AND SEARLE COMMUNICATIONS, INC. D/B/A TRI-LAKES CABLE
- -------------------------------------------------------------------------------
(MONUMENT, CO) (THE COMPANY EXPECTS TO HAVE THIS CONTRACT SIGNED ON OR AROUND
- -----------------------------------------------------------------------------
NOVEMBER 13, 1998).
- -------------------
10) [VERBAL/DRAFT] HSA NETWORK SERVICES AGREEMENT DATED NOVEMBER __,
--------------------------------------------------------------------
1998, BETWEEN THE COMPANY AND STAR CABLE ASSOCIATES (STAR IS ACQUIRING THE
- --------------------------------------------------------------------------
ILLINI CABLEVISION SYSTEMS IN FT. POLK AND MANY, LA, PLUS LEESVILLE, LYDIA AND
- ------------------------------------------------------------------------------
VILLE PLATTE, LA, BUT CONTRACT IS POTENTIALLY NATIONWIDE ON APPROX. 100
- ------------------------------------------------------------------------
<PAGE> 21
[CONFIDENTIAL TREATMENT]
------------------------
SYSTEMS) (THE COMPANY EXPECTS TO HAVE THIS NSA SIGNED ON OR AROUND NOVEMBER 18,
- -------------------------------------------------------------------------------
1998).
- ------
11) [VERBAL/DRAFT] HSA NETWORK SERVICES AGREEMENT DATED NOVEMBER __,
--------------------------------------------------------------------
1998, BETWEEN THE COMPANY AND COAST COMMUNICATIONS (OCEAN SHORES, WA) (THE
- --------------------------------------------------------------------------
COMPANY EXPECTS TO HAVE THIS NSA SIGNED ON OR AROUND NOVEMBER 18, 1998).
- ------------------------------------------------------------------------
12) [VERBAL/DRAFT] HSA NETWORK SERVICES AGREEMENT DATED NOVEMBER ___,
---------------------------------------------------------------------
1998, BETWEEN THE COMPANY AND NCTC (NATIONAL CABLE TELEVISION COOPERATIVE)
- --------------------------------------------------------------------------
(APPLICABLE TO NCTC-MEMBER MSOS WHO WISH TO EMPLOY HSAC TO IMPLEMENT TURNKEY HSA
- --------------------------------------------------------------------------------
SERVICES).
- ----------
LETTERS OF INTENT:
------------------
1) LOI DATED JULY 9, 1998, WITH CHARTER COMMUNICATIONS, INC.
------------------------------------------------------------
(NEWNAN/LAGRANGE, GA, CARROLTON, GA, THOMASTON/MANCHESTER, GA) (TO BE SUPERSEDED
- --------------------------------------------------------------------------------
BY THE NETWORK SERVICES AGREEMENT.
- ----------------------------------
2) LOI DATED APRIL 9, 1998 WITH MARCUS CABLE, INC. (EAU CLAIRE/RICE
-------------------------------------------------------------------
LAKE, WI) (TO BE SUPERSEDED BY THE NETWORK SERVICES AGREEMENT).
- ---------------------------------------------------------------
3) LOI DATED JULY 15, 1998, WITH MOUNTAIN ZONE TV SYSTEMS (SEVERAL
------------------------------------------------------------------
SMALL CITIES IN TEXAS).
- -----------------------
4) LOI DATED MARCH 19, 1998, WITH ILLINI CABLEVISION (FT. POLK/MANY,
--------------------------------------------------------------------
LA).
- ----
5) LOI DATED JULY 15, 1998, WITH TOMOKA CABLE TV (ORMOND BEACH/WESTERN
----------------------------------------------------------------------
VOLUSIA COUNTY, FL).
- --------------------
6) LOI DATED JUNE 8, 1998, WITH SEARLE COMMUNICATIONS D/B/A TRI-LAKES
---------------------------------------------------------------------
CABLE (MONUMENT, CO).
- ---------------------
7) LOI DATED JULY 17, 1998, WITH GRAFTON CABLE COMMUNICATIONS (GRAFTON,
-----------------------------------------------------------------------
OH).
- ----
8) LOI DATED JULY 10, 1998, WITH CALL ONE CABLEVISION INDUSTRIES
----------------------------------------------------------------
(MYRTLE BEACH, SC, ATLANTIC BEACH, SC, BURNSVILLE, NC).
- -------------------------------------------------------
9) LOI DATED JULY 10, 1998, WITH CLEARVIEW CABLE TV, INC. (CRANBERRY,
---------------------------------------------------------------------
NJ).
- ----
10) LOI DATED JUNE 23, 1998, WITH HFU TV (COLEVILLE, CA).
---------------------------------------------------------
11) LOI DATED JULY 9, 1998, WITH SKISAT CABLE TV (SKISAT, VT).
--------------------------------------------------------------
12) LOI DATED SEPTEMBER 25, 1998, WITH IND CO CABLE (BATESVILLE, AR).
---------------------------------------------------------------------
13) LOI DATED SEPTEMBER 9, 1998, WITH COAST COMMUNICATIONS, INC. (OCEAN
-----------------------------------------------------------------------
SHORES, WA).
- ------------
<PAGE> 22
[CONFIDENTIAL TREATMENT]
------------------------
14) LOI DATED OCTOBER 12, 1998, WITH ULTRONICS, INC. (CHULA
- --------------------------------------------------------------------------------
VISTA/NATIONAL CITY, CA).
- -------------------------
15) LOI DATED OCTOBER 21, 1998, WITH CITY OF COVINGTON, GEORGIA (NEWTON
- --------------------------------------------------------------------------------
COUNTY, GEORGIA).
- -----------------
16) LOI DATED OCTOBER 29, 198, WITH IRVINE COMMUNITY TV, INC. (IRVINE,
- --------------------------------------------------------------------------------
KY).
- ----
17) LOI DATED NOVEMBER 6, 1998, WITH EAGLE TELEVISION, INC. (WILEY
- --------------------------------------------------------------------------------
COUNTY/EADS, CO).
- -----------------
18) LOI DATED NOVEMBER 6, 1998, WITH ARTV (LA JUNTA, CO).
- ------------------------------------------------------------------
19) LETTER OF INTEREST REQUESTING EVALUATIONS AND [VERBAL/DRAFT] LOI
- --------------------------------------------------------------------------------
DATED NOVEMBER ___, 1998, BETWEEN THE COMPANY AND OCEANIC CABLEVISION, HAWAIIAN
- --------------------------------------------------------------------------------
CABLEVISION OF HILO AND SUN CABLEVISION OF KONA (TIME WARNER SYSTEMS - HAWAII).
- --------------------------------------------------------------------------------
20) [VERBAL/DRAFT] LOI DATED NOVEMBER 10, 1998, WITH CELTIC PACIFIC,
- --------------------------------------------------------------------------------
LTD. (MAUI, HAWAII) (THE COMPANY EXPECTS TO HAVE THIS LOI SIGNED ON OR AROUND
- --------------------------------------------------------------------------------
NOVEMBER 13, 1998).
- -------------------
21) [VERBAL/DRAFT] LOI DATED NOVEMBER __, 1998, WITH TCI/CABLEVISION OF
- --------------------------------------------------------------------------------
PUERTO RICO (LUQUILLO, PR) (THE COMPANY EXPECTS TO HAVE THIS LOI SIGNED BY
- --------------------------------------------------------------------------------
NOVEMBER 20, 1998).
- -------------------
22) [VERBAL/DRAFT] LOI DATED NOVEMBER __, 1998, WITH VISTA
- --------------------------------------------------------------------------------
COMMUNICATIONS, INC. (VARIOUS GEORGIA SYSTEMS) ) (THE COMPANY EXPECTS TO HAVE
- --------------------------------------------------------------------------------
THIS LOI SIGNED BY NOVEMBER 20, 1998).
- --------------------------------------
<PAGE> 23
SCHEDULE B
QUALITY CONTROLS AND RESTRICTIONS ON USE OF MARKS
OWNERSHIP
HSAC agrees and expressly acknowledges that nothing herein will give it
any right, title, or interest in the Vulcan Marks (except the right to use as a
licensee in accordance with the terms of this Agreement), that the Vulcan Marks
are the sole property of the Vulcan and its Affiliates and that any and all use
of the Vulcan Marks by HSAC inures to the benefit of the Vulcan and its
Affiliates.
Vulcan agrees and expressly acknowledges that nothing herein will give
it any right, title, or interest in the HSAC Marks (except the right to use as a
licensee in accordance with the terms of this Agreement), that the HSAC Marks
are the sole property of HSAC, and that any and all use of the HSAC Marks by
Vulcan inures to the benefit of HSAC.
Each party agrees not to raise or cause to be raised any questions,
claims or objections concerning the validity of the other party's title to its
Marks on any grounds whatsoever. Each party agrees it will do nothing
inconsistent with the ownership of the Marks by the other party, and agrees to
notify the other party of any unauthorized or inappropriate uses of the Marks of
which it becomes aware. Each party will provide reasonable assistance (at the
other party's expense) in any defense against challenges to the other party's
Marks, if requested to do so by the other party.
If a party is required to register the Marks of the other party under
any statute for registration of fictitious business names or any other type of
registration, that party will notify the other party before registration, and
will only register in a form approved by the other party. Upon termination of
this Agreement, each party will immediately take all necessary steps to
eliminate any such registrations.
SUBLICENSES
Neither party will sublicense its right to use the Marks of the other
party under this Agreement without the prior written consent of that other
party, which may be withheld for any reason.
RESTRICTIONS ON USE
All uses of a party's Marks by the other party will be made together
with the appropriate ["(TM)"] ["(R)"] symbol in connection with the Marks.
All uses of the Marks by a party will include a legend indicating that
each Mark is owned by its respective owner.
Neither party will use any mark or device identical with or confusingly
similar to the licensed Marks of the other party in connection with any product
or service, except as permitted by this Agreement.
<PAGE> 24
QUALITY CONTROL
Each party agrees to use the Marks of the other party only in
connection with the lawful goods or services specified herein, and agrees that
such goods or services will be of a standard of quality at least as high as that
of similar goods or services produced by the other party. Each party alone will
judge, in its reasonable discretion, whether or not the other party has met or
is meeting the standards of quality so established.
If at any time a party's products, packaging therefor, or services
associated with the Marks of the other party do not meet the quality standard
set forth herein, as reasonably determined by the other party, then that other
party will have the right to require discontinuation of the use of its Marks in
connection with the sale of such products or services, unless modifications
satisfactory to that party are made within ninety (90) days from notice of
disapproval.
Each party will 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 VULCAN MARKS
HSAC will bear any and all costs associated with the use, printing, and
placing of the Vulcan Marks in materials prepared by HSAC in connection with
which HSAC has sought or is obliged to seek approval from Vulcan for the use of
the Vulcan Marks, and Vulcan will bear any and all costs associated with the
use, printing, and placing of the HSAC Marks in materials prepared by Vulcan in
connection with which Vulcan has sought or is obliged to seek approval from HSAC
for the use of the HSAC Marks.
-24-
<PAGE> 1
[CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED
AND HAVE BEEN SEPARATELY FILED WITH
THE COMMISSION. THE CONFIDENTIAL PORTIONS
OMITTED ARE INDICATED BY ASTERISKS
AND A STATEMENT TO THE
FOREGOING EFFECT.]
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.
1000 West Ormsby Ave., Suite 210
Louisville, Kentucky 40210 ("HSAC")
CHARTER COMMUNICATIONS, INC.
12444 Powerscourt Dr., Suite 400
St. Louis, MO 63131 ("Charter")
and
MARCUS CABLE, INC.
2911 Turtle Creek Blvd., Suite 1300
Dallas, TX 75219 ("Marcus")
RECITALS
A. Marcus 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 -
<PAGE> 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
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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) (v) charges for
security encryption software sold or sublicensed to Data Subscribers under
Section 9 of this Agreement, and (vi) add-on ISP fees charged by HSAC to Data
Subscribers for commercial web-hosting activities (i.e., local caching on HSA's
servers of commercial websites, not "complimentary" personal home page hosting
of 5MB or less webpages).
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
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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. "Minimum Penetration Rate" means (1) with respect to a Committed
System where the Operator is the sole provider of RF cable/coaxial landline
connectivity to Homes Passed, that *CONFIDENTIAL MATERIAL REDACTED AND FILED
SEPARATELY WITH THE COMMISSION* of the Homes Passed in each Committed System
shall have subscribed as Data Subscribers within eighteen (18) months of the
Launch Date, and (ii) with respect to an overbuilt Committed System where
another MSO or utility competes in the same geographic area with the Operator
for RF cable/landline connectivity to Homes Passed, that a customer base
equivalent in number to *CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY
WITH THE COMMISSION* of the Operator's actual paying cable customers in each
such Committed System shall have subscribed as Data Subscribers within eighteen
(18) months of the Launch Date (e.g., Newman, Georgia would qualify as an
overbuilt Committed System).
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.
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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 Paul G.
Allen, 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
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"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
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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 Bell 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
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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
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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
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($150) per Data Subscriber). If HSAC sells equipment compressing any part of the
Home Equipment Package to a Data Subscriber, then HSAC shall pay 50% of the
gross profit (i.e., the gross "retail" sales price (not including applicable
sales taxes) less its direct wholesale cost for such equipment and any other
direct, out-of-pocket sales expense) it receives from such sale. If Operator
sells equipment that is part of the Home Equipment Package, then Operator shall
keep 100% of the Gross Revenues from [ILLEGIBLE]. 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
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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
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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 bill 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 mark on
them, will comply with the Quality
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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
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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
bills, bill 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;
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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. ASSIGNMENT OF DOMAIN NAMES. HSAC shall be responsible for assigning all
e-mail and Web Site addresses to Data Subscribers. All e-mail and Web Site
addresses for Data Subscribers shall use domain names that are registered in
Operator's name and are pre-approved by Operator in writing. HSAC shall keep an
updated list of such e-mail and Web Site addresses and shall supply Operator
with an electronic copy of such list whenever Operator requests.
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
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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," "CATV.net" 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
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<PAGE> 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
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<PAGE> 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.
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<PAGE> 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."
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<PAGE> 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.
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<PAGE> 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
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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
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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. Operator certifies by written notice to HSAC that
HSAC failed to achieve the Minimum Penetration Rate within eighteen (18) months
after the Launch Date applicable to a Committed System.
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.
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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.
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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.
1000 West Ormsby Ave., Suite 210
Louisville, KY 40210
Attn: W. Kent Oyler, CEO
Phone: 502-515-3232
Fax: 502-515-3101
With a copy to: John G. Hundley, General Counsel
Phone: 502-515-3342
Fax: 502-515-3101
Notices to Operator: CHARTER COMMUNICATIONS, INC.
12444 Powerscourt Drive, Suite 400
St. Louis, MO 63131
- 25 -
<PAGE> 26
Attn: Steve Silva, SVP
Phone: 314-965-0555
Fax: 314-965-8793
With a copy to: Curt Shaw, General Counsel
Phone: 314-965-0555
Fax: 314-965-8793
MARCUS CABLE, INC.
Attn: Steve Silva, SVP
Phone: 314-965-0555
Fax: 314-965-8793
With a copy to: Curt Shaw, General Counsel
Phone: 314-965-0555
Fax: 314-965-8793
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 -
<PAGE> 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 -
<PAGE> 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/ Robert S. Saunders
-----------------------------
Date:
---------------------------
CHARTER COMMUNICATIONS, INC.
By: /s/ Curtis S. Shaw
------------------------------
Date:
----------------------------
MARCUS CABLE, INC.
By: /s/ Curtis S. Shaw
------------------------------
Date:
----------------------------
- 28 -
<PAGE> 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
<PAGE> 30
EXHIBIT A
COMMITTED SYSTEMS COVERED BY THIS AGREEMENT
[ATTACHED]
<PAGE> 31
EXHIBIT A COMMITTED SYSTEMS
TO NETWORK SERVICES AGREEMENT CHARTER-MARCUS-HSA
<TABLE>
<CAPTION>
Homes Launch
Region System Name Headend Location State Passed Date*
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Southeast NEWNAN Newnan GA 25,471 11/1/98
Southeast Lanett Lanett AL 14,699 1/1/99
N. Central Eau Claire Eau Claire WI 40,855 2/1/99
Southeast HENRY COUNTY Stockbridge GA 35,999 2/1/99
Southeast HENRY COUNTY Jackson GA 4,012 2/1/99
Southeast THOMASTON Thomaston GA 10,583 2/1/99
N. Central Rice Lake Rice Lake WI 9,125 3/1/99
Central Columbus Columbus IN 25,879 3/1/99
Southeast Manchester Manchester GA 5,091 3/1/99
Southern ALBERTVILLE Albertville AL 26,582 3/1/99
Southern GUNTERSVILLE Guntersville AL 10,425 3/1/99
Southeast Morristown Morristown TN 36,984 4/1/99
Southeast CAMP LEJEUNE Camp LeJeune NC 11,332 4/1/99
N. Central Rosemount Rosemount MN 37,050 4/1/99
Central New Albany New Albany IN 32,146 4/1/99
Southern HARTSELLE Hartselle AL 27,618 4/1/99
Southeast Johnson City Johnson City TN 30,717 5/1/99
Southern HAMMOND Folsom LA 65,223 5/1/99
Central Peru Peru IN 9,909 5/1/99
Southeast DUBLIN Dublin GA 11,452 5/1/99
Northeast Pepperell Pepperell MA 13,901 5/1/99
Southeast ERWIN Buies Creek NC 27,775 6/1/99
Central Monticello Monticello IN 11,571 6/1/99
Southern ALEXANDER CITY Alexander City AL 19,844 6/1/99
Central Frankfurt Frankfort IN 7,822 7/1/99
Southeast BUNCOMBE Buncombe Co. NC 34,820 8/1/99
Southeast GAFFNEY Gaffney SC 15,558 12/1/99
Southeast GAFFNEY Union SC 10,075 12/1/99
Southeast SANFORD Sanford/Whispering Pines NC 18,390 12/1/99
Southeast CARROLLTON Carrollton GA 7,344 12/1/99
- -------------------------------------------------------------------------------------------------
Subtotal 638,252
N. Central Ashland Ashland WI 6,108 ??
N. Central Onalaska Onalaska WI 15,586 ??
Southeast Bristol Bristol TN 27,024 ??
Southeast Black Mountain Black Mountain NC 11,268 ??
Southeast Waynesville Waynesville NC 22,080 ??
N. Central Red Wing Red Wing MN 6,952 ??
Central Connersville Connersville IN 9,156 ??
Central Rushville Rushville IN 3,694 ??
Central Warsaw Warsaw IN 12,106 ??
- -------------------------------------------------------------------------------------------------
Subtotal 113,974
GRAND TOTAL 752,226
</TABLE>
* The Launch Dates indicated in this column are tentative and subject to the
completion of engineering review, commissioning/Attainment Measures for the
head-ends, and the required joint review and approval of Marketing plans, etc.
<PAGE> 32
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
<PAGE> 33
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 CW carrier 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.
<PAGE> 34
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.
<PAGE> 35
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
<PAGE> 36
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.
<PAGE> 37
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.
<TABLE>
<CAPTION>
TABLE A
-------
SERVICE OPERATOR'S SHARE
------- ----------------
<S> <C>
Dial Up Express 15%
One-Way Cable Express 50%
Two-Way Cable Express 50%
Other Optional Services 50%
</TABLE>
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.
<PAGE> 38
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.
<PAGE> 39
EXHIBIT E
CUSTOMER END USER/INTERNET SERVICES AGREEMENTS
See attached
<PAGE> 40
READ THIS NOTICE AND THE ATTACHED SERVICES AGREEMENT CAREFULLY!!
Charter Pipeline Corp. d/b/a CHARTER PIPELINE has offered to provide cable modem
Internet access service to the undersigned Customer only upon the terms and
conditions set forth in the attached Charter Pipeline Services Agreement.
The undersigned Customer wishes to subscribe, and has placed an order to
subscribe, to the Charter Pipeline Internet Access Service upon the terms and
conditions set forth in the attached Agreement. The undersigned Customer
represents and agrees that he or she has had a reasonable opportunity to read
the attached Agreement, and ask questions, and receive answers from
representatives of Charter Pipeline regarding its contents and provisions, which
are incorporated herein by reference. By signing this Notice in the space
provided below and returning it to an authorized representative of Charter
Pipeline, the Customer hereby affirmatively manifests his or her assent and
agrees to the bound to the terms and conditions of such Agreement.
Customer:
---------------------------------------
Name:
---------------------------------------
Address:
---------------------------------------
---------------------------------------
Signature:
---------------------------------------
Telephone
No.:
---------------------------------------
Date
---------------------------------------
Please sign and return only this Notice to the local Charter Pipeline system
office/representative. The attached Services Agreement is yours to keep for
reference.
<PAGE> 41
CHARTER PIPELINE
SERVICES AGREEMENT
FOR
CABLE INTERNET ACCESS SERVICE
THIS CHARTER PIPELINE SERVICES AGREEMENT (the "Services Agreement") CONSTITUTES
YOUR AGREEMENT with HSA Corp. d/b/a Charter Pipeline, 1000 W. Ormsby Ave, Suite
210, Louisville, Ky 40210, hereinafter "we", "our", "us", or "Charter
Pipeline"), and Internet access/transmission service (the "Service") as it
pertains to your (hereinafter "you", "your" or "Customer") use of the Charter
Pipeline Internet Access Service at your residence or place of business.
CHARTER PIPELINE SERVICE; SERVICES AGREEMENT. We agree to provide to you, and
you agree to accept from us, our Charter Pipeline high-speed access to the
Internet service (the "Service" or "Cable Express") for a SINGLE CABLE
CONNECTION any provision to add other connections at your residence or place of
business. By ordering and/or using the Service, you and all members of your
household and their guests or your employees agree to be bound by and are
obligated to use the Service under and in compliance with the terms and
provisions of this Services Agreement. We reserve the right, at our discretion,
to change, modify, add or remove the terms of this Services Agreement at any
time. Notification of changes in service will be posted on Charter Pipeline
Corp. web site (www.CharterPipelinecorp.net), or sent to you via E-mail. Your
single cable connection use of the Service after such notice shall constitute
your acceptance of such modification(s) as an amendment to this Agreement. To
the extent permitted by law, you waive any and all objections you may now or
hereafter have to the enforceability of this Services Agreement against you,
specifically including, but not limited to, any objections or claims that it is
a shrinkwrap or contract of "adhesion."
LICENSE: Subject to the terms hereof, during the term of this Services
Agreement, we grant you a non-exclusive, non-transferable, limited license to
use the Service to access the Internet. Except for the license granted herein,
all rights, title and interest in "data" accessed by you in all languages,
formats and media throughout the world, including all copyrights and trademarks
therein, are and shall continue to be the exclusive property of Charter Pipeline
or the owners of other data made accessible to you via the service. If you are a
residential customer, your right to use Charter Pipeline extends to all members
of your immediate family. If you are a business, the right to use Charter
Pipeline extends to all of your employees; however, you also agree that your use
is limited to one cable or dial-up connection at a time per account unless
otherwise agreed in writing with us.
CUSTOMER'S USE OF CHARTER PIPELINE ONLINE NETWORK: You agree that the Service
may only be used for lawful purposes. Transmission of any material in violation
of any federal or state statute or regulation is prohibited, including but not
limited to material that is copyrighted legally judged to be threatening,
defamatory, indecent, obscene child pornography or protected by trade secret for
exportation of encryption software or over materials in violation of federal
export control laws. You agree not to use the Service, including but not limited
to, the cable modem, power supply, and any software provided by us for any
illegal, abusive or fraudulent purpose, or to achieve unauthorized access to any
computer systems, software, data or other copyright or patent protected material
or to copy or reproduce any of the foregoing without authorization. If you do,
you acknowledge that your access to the service may be suspended or terminated
and that you may be referred by Charter Pipeline OnLine to appropriate law
enforcement agencies.
PROTECTION OF PASSWORDS; NO RESALE. You are responsible for the use of your
account(s), and the confidentiality of your password(s). We will suspend your
access or change your access passwords to the Service immediately upon
notification by you that your password has been stolen, lost or otherwise
compromised. You must notify Charter Pipeline of any known or suspected
unauthorized use(s) of the your account, or any known or suspected breach of
security, including loss, theft, or unauthorized disclosure of your password or
credit card information. You also agree not to resell or redistribute access to
the Service in any manner. The prohibition on resale of access includes, but is
not limited to the provision of E-mail, FTP and Telnet access, or any other
Internet access or website hosting services.
IP ADDRESSING. We will provide you with a dynamically assigned IP address as a
component of the single-user Service. You agree not to alter, modify or tamper
with the IP address or those of any other person connected to the Service. We
will own all rights in and to such IP address and we will recover the IP address
upon disconnection, discontinuance or termination of the Service. We reserve the
right to disconnect or reclassify the Service to commercial grade for failure to
comply with any portion of this Agreement. Static IP addresses are available to
you for an additional fee.
AGE OF CUSTOMER: If you are less than 18 years of age, the Agreement must be
accepted by a parent or legal guardian who is responsible for all charges and
bears all liability related to the use of the Service account(s). By accepting
this
<PAGE> 42
2
Agreement, the parent or legal guardian recognizes that Charter Pipeline does
not control content or subject matter of data or other information available on
the Internet, and agrees to supervise any access to the Internet by minors.
HOME COMPUTER. In order to receive and utilize the Service and must own a
computer with a 166 MHz Pentium(R) or compatible microprocessor and 16 MB of
RAM (minimum), and Microsoft Windows 95(R) or higher version. Apple(R),
Macintosh(R) or Windows NT(R) systems may also be supported.
OWNERSHIP AND USE OF EQUIPMENT: SOFTWARE LICENSE. Unless purchased by you, the
cable modem, cables and power supply equipment that we lease to you will at all
times be our property. You agree to immediately return to us in good condition
upon disconnection of Service all such equipment* subject to reasonable wear
and tear. You will use reasonable care to avoid damaging the cable modem and
power supply, and will not move, relocate, alter, sell, lease, license, assign,
encumber or otherwise tamper with the equipment. If the equipment* is not
returned to us in good condition immediately upon termination of Service, you
will be charged and agree to pay us $495.000 for its replacement. Subject to
the terms and conditions hereof, we further grant you a limited, non-exclusive
license to use any software we provide for your use in connection with the
Service only. This license terminates upon termination of this Agreement, or
disconnection of Service.
*Except for the ethernet interface card supplied and installed in
your home computer, which is and will remain your property. We
shall have no responsibility or duty to install or remove the
ethernet card.
INSTALLATION. Either you or an authorized reseller are solely responsible for
installing the ethernet/network interface card in your home computer at your
sales cost and expense. When any software associated with the ethernet card
and/or the cable modem is installed on your home computer, the system files may
be modified. The opening of your home computer and/or the installation of
software may disrupt the normal operations of your home computer and/or cause
the loss of files. Neither we nor your cable TV company are responsible for any
such loss. FOR THESE AND OTHER REASONS, WE RECOMMEND STRONGLY THAT YOU BACK-UP
ALL FILES PRIOR TO INSTALLATION.
ACCESS AND INTERRUPTIONS OF SERVICE. We will make a reasonable effort to make
the Service available to you twenty-four (24) hours per day, seven (7) days per
week. It is possible that there will be interruptions of Service. The Service
is an ethernet-like protocol service spread over a shared network which
co-exists on your cable television service, and you and all other users share a
finite amount of bandwidth. We will manage the Service to provide appropriate
bandwidth for as many customers as possible. HOWEVER, YOU ACKNOWLEDGE AND AGREE
THAT THE SERVICE MAY BE TEMPORARILY LIMITED, INTERRUPTED OR CURTAILED FOR MANY
REASONS INCLUDING WITHOUT LIMITATION TO SYSTEM CAPACITY LIMITATIONS IMPOSED OR
EXPERIENCED BY THE UNDERLYING COMMUNICATIONS CARRIES, GOVERNMENTAL ACTIONS,
FORCE MAJEURE, OR BECAUSE OF TEMPORARY EQUIPMENT OR SYSTEMS FAILURES OR
MODIFICATIONS, UPGRADES, MAINTENANCE, REPAIRS OR SIMILAR ACTIVITIES REQUIRED OR
APPROPRIATE IN CONNECTION WITH THE DELIVERY OR IMPROVEMENT OF THE SERVICE: the
Service may also affect the video programming portion of your cable television
service and you agree to waive any and all claims that are related to the
foregoing and to report any problems with your video programming services to
the local cable TV office by telephone.
CUSTOMER SUPPORT. We will attempt to provide you with "Help Desk" support which
can be accessed by telephone or by e-mail. Support may also be provided via
software provided by us. We will not provide support for the Service if you use
any hardware or software that has not been supplied by us or pre-approved in
writing by us. The telephone numbers and e-mail addresses for support services,
as well as hours of operation, are printed in the your Service Guide and are
available online. If you use or modify the hardware or any software we supply to
you, or the Equipment requires a visit to your residence or place of business
for repair or correction, we reserve the right to charge you for the visit and
labor required to correct the situation. We will not undertake to correct or
repair hardware or software which we do not supply.
NO LIABILITY FOR OBSCENE OR OTHER OFFENSIVE CONTENT, PORNOGRAPHY, ETC. You
acknowledge and understand that we only provide access to the Internet. We do
not publish (other than e-mail messages that we may from time to time send you
regarding the Service), control, monitor or restrict the information, programs,
e-mail, "chat rooms", interactive gaming or other material that is available to
your residence or place of business through the Internet, the World Wide Web, or
through USENET newsgroups. YOU MAY FIND OR ACCESS MATERIALS THROUGH OUR SERVICE
THAT YOU FIND TO BE SHOCKING, PROFANE, ABUSIVE AND/OR OFFENSIVE AND YOU ASSUME
THAT RISK. YOU MAY, IN FACT, FIND SOME MATERIAL TO BE OBSCENE, SEXUALLY
EXPLICIT, OR OTHERWISE INDECENT. YOU RECOGNIZE THAT CHARTER PIPELINE IS NOT
RESPONSIBLE FOR THIS MATERIAL, AND ACKNOWLEDGE THAT YOU HAVE BEEN NOTIFIED THAT
SUCH MATERIAL IS PRESENT. YOU ARE SOLELY AND EXCLUSIVELY RESPONSIBLE AND AT RISK
FOR (I) ALL INTERNET CONTENT ACCESSED VIA THE SERVICE BY YOU AND OTHER MEMBERS
OF YOUR HOUSEHOLD OR BUSINESS AND THEIR GUESTS, AND (II) PROVIDING SUITABLE
ADULT SUPERVISION OF ANY PERSON WHO IS LESS THAN EIGHTEEN (18) YEARS OF AGE AND
USES THE SERVICE AT YOUR RESIDENCE OR PLACE OF BUSINESS TO ACCESS THE INTERNET.
You agree that neither we nor your cable company are in any manner responsible
for any claims, losses, actions, damages, suits or proceedings arising out of or
otherwise relating to such content accessed using the Service.
<PAGE> 43
3
NO LIABILITY FOR PARENTAL EMPOWERMENT SOFTWARE. You may want to consider
installing blocking and filtering software developed by others that empower
parents and teachers to restrict their children's and students' access through
the Internet to objectionable or inappropriate material, and that protect or
prohibit them from corresponding with criminals or disclosing personal or other
information. Your acknowledge that we do publish such software, and agree that
neither we nor your cable company are in any manner responsible for the
effectiveness of these blocking and filtering technologies.
NO "HACKING", "SPAMMING" OR INFRINGEMENT OF OTHER'S RIGHTS. You agree not to
publish on or over the Internet any content which violates or infringes upon the
rights of any other person. You also agree not to use the Service or cable modem
for any illegal purpose, to achieve unauthorized access to another party or
person's computer systems, software, data or other copyright or patent protected
material (commonly referred to as "hacking"). You agree not to interfere with
the use of the Service or the equipment by other customers or disrupt the
Service backbone network nodes or network services. You also agree not to send
unsolicited e-mail to our subscribers or anyone else without our explicit
written permission for each instance of communication. You further agree not to
upstream unsolicited distribution lists in e-mail or other mass unsolicited
e-mail (commonly referred to as "spam"). Your violation of any of these promises
is grounds for immediate termination of Service and this Agreement. If we are
challenged by a third party regarding the suitability of your content, we may,
at our sole discretion, suspend or terminate your access to the Internet through
our systems. We assume no liability whatsoever for any losses, claims, damages,
expenses, liabilities or costs (including legal fees) arising out of or in
connection with allegation, claim, suit or other proceeding based upon your use
of the Service or our Equipment or brought by any third party based upon or
arising out of the violation or infringement of any of the copyright, patent,
trademark, trade secret or other industrial or intellectual property rights or
contractual rights of any third party.
NO LIABILITY FOR UNAUTHORIZED ACCESS; ENCRYPTION; FILE-SHARING. We treat
communications and data traffic on our through our Service as strictly
confidential and do not access, use or disclose contents of private
communications, except in limited circumstances as compelled or permitted by
law. However, since the Service is a shared network used by subscribers to
video programming and our Service which provides access to the Internet (and
beyond such network the Internet does not provide security), it is possible
that others may access or monitor your data traffic. You acknowledge that the
Internet systems use public access facilities to transmit voice and data
communications, and that the Service may accordingly not be completely private.
Accordingly, we do not warrant that any data or files sent or received by you
over the Service will not be subject to unauthorized access by others or that
other users (i.e., "hackers") will not gain access to your home computer. We
are not liable to you for any claims, loss, damages or cost that may result
from your lack of privacy on the Internet by virtue of your use of the Service.
IN ADDITION, THE SERVICE IS CONFIGURED TO DISABLE PEER-TO-PEER
NETWORKING/FILE-SHARING. IF YOU REQUEST THAT WE ENABLE THAT FEATURE, YOU WILL
BE REQUIRED TO SIGN A SEPARATE RELEASE AND LIABILITY WAIVER IN WHICH YOU
ACKNOWLEDGE THE EXTREME SECURITY RISKS TO YOUR COMPUTER AND THE PRIVACY OF YOUR
DATA FILES ASSOCIATED WITH SUCH NETWORKING. MOREOVER, IF YOU CHOOSE TO RUN
APPLICATIONS WHICH PERMIT OTHERS TO GAIN ACCESS TO YOUR COMPUTER, YOU DO SO AT
YOUR OWN RISK AND SHOULD TAKE APPROPRIATE SECURITY MEASURES. FOR THESE AND
OTHER REASONS, YOU MAY WANT TO CONSIDER INSTALLING THIRD-PARTY
AUTHENTICATION-ENCRYPTION SOFTWARE TO PROTECT YOUR DRIVES AND DATA/E-MAIL
FILES. We extend no warranty and accept no liability with respect to the
effectiveness of such software.
NO LIABILITY FOR VIRUSES. We make no representation or warranty that any
software installed on your home computer or which you may download from the
Internet, any on-line service provider or other information provider (other
than us) does not contain any virus or other damaging or destructive attribute.
OTHER CHARGES; CREDIT CARD CHARGES. You understand and acknowledge that you may
incur other costs and expenses for certain information, products and services
from persons, firms or entities other than us, including without limitation such
on-line services as America OnLine(R) or The Microsoft Network(R). You agree
that you shall be solely and exclusively responsible and liable for all such
charges, which are in addition to the fees and charges payable to us. With
respect to any Internet-based transactions that you undertake or participate in
through the Internet, you are solely and exclusively responsibility to make the
payments in connection with such transactions and to protect the security of all
credit information from unwanted or unauthorized charges. Neither we nor your
cable company shall have any liability or responsibility to you in connection
with Internet-based transactions, unauthorized use of your credit or debit
cards, credit availability or information, or your personal or financial
information.
GENERAL DISCLAIMER OF WARRANTIES AND MORE LIMITATIONS OF LIABILITY; INDEMNITY.
You hereby acknowledge that we exercise no control whatsoever over the content
of the information passing through Charter Pipeline network. You also
understand that alternative and competing Internet communications carriers are
available to you. Occasional interruption or irregularities in the service may
occur. WE PROVIDE CHARTER PIPELINE TO YOU ON AS "AS IS, AS AVAILABLE" BASIS,
WITHOUT WARRANTY OF ANY KIND, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO THE WARRANTIES OF PERFORMANCE, MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. THIS DISCLAIMER OF WARRANTY EXPRESSLY EXTENDS TO ANY LIABILITY
<PAGE> 44
4
FOR REIMBURSEMENT FOR LOSS OF INCOME DUE TO DISRUPTION OF SERVICE BY CHARTER
PIPELINE ONLINE OR ANOTHER INTERNET SERVICE PROVIDER(S). You further
acknowledge that use of the Service or any information obtained via the Service
is at your sole risk, and that we, your cable company and Internet content
contributors shall not be liable to you for any direct, indirect or exemplary,
incidental, indirect, special, or consequential losses or damages relating in
any way to demands or claims involving or arising in any manner out of: (a)
your use of, inability to use, or failure to perform research or related work,
or to work properly, the Internet, Internet data, or the Service, (b)
inaccurate or poor quality Internet data obtained through the Service, (c) loss
of data resulting from delays, non-deliveries, misdeliveries or service
interruptions, and (d) the installation, maintenance, failure, removal, or use
of the cable modem and ethernet card equipment or cancellation of Service. You
further agree to indemnify and hold harmless Charter Pipeline and your cable
company from any claims of any nature whatsoever resulting from your use of
Charter Pipeline Service or you're in violation of any provision of this
Agreement.
BILLING: PAYMENT OBLIGATIONS FOR CHARTER PIPELINE SERVICE. Billing and payment
provisions for the Service, including the set-up and monthly recurring charge
(payable by debit to your credit or debit card account unless otherwise
agreed), are as set forth in the Service Guide pricing schedule which is
incorporated herein by reference, or as otherwise agreed to in writing by the
parties. You also agree to pay all applicable federal, state and local fees or
taxes, and any additional telephone company charges and fees that may apply to
your Service (for dial-up return). We have the right to terminate your Service
if an invoice from us is not fully paid when due and impose a late fee of not
more than 5% on any outstanding amount as a one-time late charge, at our
discretion, for failure to pay all bills within 30 days of billing. We may
charge a reasonable service fee for all returned checks and bank card or charge
card charge-backs. If you discontinue the Service or are disconnected, you agree
to pay a reconnect charge before reconnection. You will be responsible for all
expenses (including reasonable attorney's fees) incurred by Charter Pipeline
Online in collecting any unpaid amounts due in accordance with this Agreement.
We also reserve the right to change from time-to-time the amount of the monthly
Service fee and any other applicable charges upon reasonable advance written
notice to you. In no event shall such notice be less than ten (10) days prior
to the effective date of such change. All charges are exclusive of sales, use
and other taxes, which are your responsibility.
TERMS AND TERMINATION. This Services Agreement shall become effective at such
time as you first use the Service, and shall continue in force until a period
of not less than one (1) month has expired, at which time it shall renew itself
indefinitely on a month-to-month basis until terminated by either party upon
thirty (30) days written notice by either party. Charter Pipeline Online, in
its sole business judgment, may terminate this Agreement immediately or suspend
your access to the Service upon any breach of this Agreement by you, including,
but not limited to, refusal or failure to pay for services provided or
disruptive on-line behavior. Upon termination for any reason, we reserve the
right to delete any data left by you on Charter Pipeline-owned and controlled
computers, and all rights and licenses granted to you hereunder shall terminate
automatically.
EFFECT OF AGREEMENT. This Agreement embodies the entire understanding between
you and Charter Pipeline OnLine with respect to the subject matter hereof, and
supersedes any and all prior understandings and agreements, oral or written,
relating thereto.
FORCE MAJEURE. Charter Pipeline Online's performance hereunder is subject to
interruption and delay due to causes beyond its reasonable control such as acts
of God, acts of any government, war or other hostility, civil disorder, fire,
explosion, power failure, equipment failure, industrial or labor disputes,
inability to obtain the necessary equipment and supplies, and the like.
SEVERABILITY. If one or more of the paragraphs in this agreement are found to
be unenforceable or invalid, your and Charter Pipeline Online's agreement on
all other paragraphs is unaffected.
NOTICES. Except as otherwise provided herein, you may provide notice to us of
any matters affecting this Services Agreement at the address provided in the
preamble hereto.
GOVERNING LAW. This Agreement shall be governed by and construed under the laws
(without reference to the conflicts of laws rules) of the Commonwealth of
Kentucky.
WAIVER. Failure of any party to enforce any provision of this Agreement shall
not constitute or be construed as a waiver of such provision or of the right to
enforce such provision.
<PAGE> 45
ADDENDUM
TO
CHARTER PIPELINE INTERNET SERVICES AGREEMENT
CABLE MODEM ACCEPTABLE USE POLICY (AUP) 6/1/98
Your Internet access is facilitated by use of a cable modem, and consequently
cable modem-specific issues must be addressed. This Cable Modem AUP constitutes
an Addendum to the terms and conditions of the standard Charter Pipeline
Internet Services Agreement which you have assented to and do hereby consent to
by the continued use of the Service. The standard and cable AUPs are written in
plain English and apply equally to all CHARTER PIPELINE Network subscribers.
This AUP may be updated from time to time upon notice to you as described in
the Services Agreement.
CABLE MODEM ACCOUNT USAGE
Your Cable Modem account is a single user, non-server, non-commercial, unlimited
access account ONLY. CHARTER PIPELINE Network makes other accounts available to
you that will allow commercial or server access if you need it. These options
should be explored should your needs be other than the Cable Modem Standard
Account. If you wish to add a hub and provide access to more than one computer
in your household under your Cable Modem Standard Account, additional
fixed/static or dynamically-assigned IPs and bandwidth through-put can be
purchased for this purpose.
As noted previously, PROXY servers are NOT allowed under a residential Cable
Modem Standard Account, and customers who attempt to connect more than one
machine to a given modem via PROXY of any type (WinProxy, WinGate, etc.)
without paying for additional IPs will have their service disconnected. The
Cable Modem Standard Account cannot be used to run a server, whether commercial
or otherwise. The servers that CANNOT be run include, but are not limited to,
FTP, HTTP (Web), POP and SMTP (Mail), DNS, NNTP, and PROXY. These services are
capable of over-utilizing the bandwidth that all Charter Pipelineoration Cable
Modems share and, as such, are measured in a different way with regard to
payment. If we find you operating a server, you will be asked to remove it.
Should you not remove the server from usage, your account and Internet access
will be suspended, and your activity may be referred to local law enforcement
authorities. Repetitive suspensions (as defined by Charter Pipelineoration) for
violation of this rule will result in termination of Cable Modem Service
without the option to obtain a new account.
ANY USER OF THE CHARTER PIPELINEORATION SYSTEM THAT VIOLATES ANY OF THE ABOVE
RULES WILL BE SUBJECT TO ACCOUNT CANCELLATION AT OUR DISCRETION WITHOUT
RECOURSE OR REFUND.
<PAGE> 46
ADDENDUM
to
CHARTER PIPELINE INTERNET SERVICES AGREEMENT
WAIVER AND RELEASE REGARDING
PEER-TO-PEER NETWORKING
"I", the undersigned customer, have requested that you, Charter Pipeline, as my
Service ISP, enable "peer-to-peer" networking privileges for my account. I
understand that once file-sharing is enabled, my Service will operate much like
a Local Area Network (LAN), which means that PC machine users on my cable
network will be able to identify and gain access to one another through the use
of broadcast frames, such as Windows(R) file sharing (called SMB [server message
block] or CIFS [common Internet file system]). This makes my computer and data
files vulnerable to unauthorized access, review and corruption.
I hereby represent, warrant, agree and acknowledge:
1) that once you configure my Service to enable file-sharing privileges and
run applications that permit others to gain access to my computer, you can
neither monitor or control such access, and cannot protect me from hackers,
viruses or corrupted files that may be introduced;
2) that I am in sole and complete control of my password, and that I alone am
responsible for taking appropriate security measure to encrypt my
data/e-mail files or install third-party user-authentication software (I
further agree that you extend no warranty and accept no liability with
respect to the effectiveness of such software);
3) that I understand completely the EXTREME security risks posed to my
computer/data files and my privacy as a consequence of enabling such
networking, and are nevertheless willing to do so at my own risk; and
4) that you shall not be liable in any manner whatsoever as a result of any
losses, damages, claims or costs that I may incur as a result of someone
else gaining access, whether it be authorized, unauthorized (including
accidental), to my PC.
I further waive any and all expectations of privacy or security that I may now
or hereafter have with respect to my online activities, and waive and release
you from any liability with respect to such peer-to-peer networking.
Customer Name: [Printed]
-----------------------------
Account No.:
-------------------------------
Date:
- ------------------------------------------- --------------------------
Signature
<PAGE> 47
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.
<PAGE> 48
HSAC agrees not to use any mark 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.
<PAGE> 49
EXHIBIT G
SYSTEM SERVICE REQUIREMENTS
TECHNICAL SPECIFICATIONS
HSAC will at its expense add more HSAC Network Equipment, lines and/or
bandwidth capacity from the head-end to its internet Portal at such time as
Internet data traffic on the System reaches the lesser of: (A) an average data
traffic statistic of *CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH
THE COMMISSION* of network and HSAC e-mail, newsgroup and other HSAC content
servers' capacity during peak time, or (B) an average data traffic statistic of
*CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION* of
capacity during any 24-hour day, tested in 5-minute increments, except and
unless such traffic is attributable to incremental Vulcan Content as set forth
in the Programming Content Agreement.
HSAC will purchase and install such quantities of HSAC Network Equipment
(i.e., Portmaster Com Controllers and routers) and transport bandwidth in
One-Way Systems such that dial-up Data Subscribers will not experience busy
signals, at any one time, of more than *CONFIDENTIAL MATERIAL REDACTED AND FILED
SEPARATELY WITH THE COMMISSION* between the Effective Date and December 31,
1998, *CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION*,
between January 31, 1999 and May 31, 1999, and *CONFIDENTIAL MATERIAL REDACTED
AND FILED SEPARATELY WITH THE COMMISSION* from and after June 1, 1999.
SERVICE SPECIFICATIONS
HSAC Call Center will answer inbound calls with one or more appropriate
greetings specified by Operator, and will be experienced in/trained to support
all HSAC Services requirements.
HSAC Call Center will maintain and inbound call "abandon" (i.e., customer
call goes unanswered and hangs up) rate not to exceed *CONFIDENTIAL MATERIAL
REDACTED AND FILED SEPARATELY WITH THE COMMISSION* between the Effective Date
and December 31, 1998, *CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH
THE COMMISSION* between January 31, 1999 and May 31, 1999, and *CONFIDENTIAL
MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION* from and after June
1, 1999.
HSAC will resolve *CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH
THE COMMISSION* of all non-RF Plant-related trouble calls within 24 hours and
*CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION* of all
non-RF Plant-related trouble calls within 36 hours prior to May 31, 1999, and
*CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION* of all
non-RF Plant-related trouble calls within 24 hours from and after
<PAGE> 50
June 1, 1999
OTHER OPERATIONAL MATTERS
HSAC and Operator will consult and agree upon an "off-peak" schedule for
HSAC Services/RF Plant downtime for purposes of preventive maintenance/testing.
In the sole discretion of the Operator or an affiliate of Vulcan, Operator
or such Vulcan affiliate may make its "where available/if available" fiber
available to HSAC on a "preferred customer pricing/most favored nation status"
basis for HSAC's head-end to head-end or head-end to ISP/Internet portal data
transport needs in connection with its provisioning of HSAC Services in
Committed Systems.
Starting in June 1, 1999, HSAC will produce monthly reports that track
compliance on a daily basis for all service requirements specified in this
Exhibit G. Until June 1, 1999 such obligation shall be satisfied by HSAC
providing to Operator the Help Desk Call Center Activity Report, in its current
format, on a monthly basis.
<PAGE> 51
EXHIBIT II
CONVERSION REQUIREMENTS
In the event of the termination of the Agreement or the withdrawal of
Committed Systems from the Agreement, HSAC agrees to work with Operator to
develop transition and conversion procedures to protect the normal service
levels provided to Data Subscribers.
HSAC will provide continuing network and call center and NOC support to
Operators and the successor ISP for a period of 120 days following such
termination or withdrawal to ensure seamless Internet access to Data
Subscribers. Operator will reimburse HSAC for HSAC for its actual, out-of-pocket
expenses relating to such support, and HSAC shall continue to receive its share
of Gross Revenues from any Data Subscriber for whom HSAC is still providing
Internet Access. In addition, during the conversion period, HSAC will provide
Operators with all customer database information in machine readable form that
complies with widely accepted industry formats.
<PAGE> 52
EXHIBIT I
APPROVAL PROCESS BETWEEN CHARTER AND USA
HSAC and Operators may by mutual agreement revise the following
requirements form time to time.
o HSAC develops the marketing and sales strategy for Charter Pipeline overall
plan and plan by System. Such Plan must stay within the guidelines of
Charter's current published Charter Pipeline Branding Guidelines.
o Charter reviews marketing strategy with HSA.
o HSAC develops a plan for implementation by System/Region.
o HSAC develops and implements all tactics subject to approval by signature
by Charter Region management (see below).
o Charter develops the branding strategy for Charter Pipeline, which must be
incorporated in all HSAC tactics.
o When Charter is reviewing/approving tactics. Charter is looking to uphold
the integrity of its brands, product and company. The intention of the
Charter approval is not to have Charter "art direct" but oversee the use of
our brands.
o Charter will provide HSAC with our confidential "Charter Pipeline Marketing
Overview." Charter will also provide Charter Pipeline branding guidelines
and Charter Communications logo sheets. All logo sheets will also be
available in hard copy and electronically.
o In cases where HSAC intends to use a "shell" form other high-speed services
offered by HSAC and other Cable companies. Charter Corporate and Regional
management must approve the pieces and any Charter customization.
o Charter Corporate recommends that HSAC involve Charter Corporate, when
possible, early on in the process of developing marketing materials.
o Direct Mail
o Copy must be approved by Charter Corporate and Region with a
signature
o Color comps or dylux, with copy dropped in, must be approved by
Charter Corporate and Region with a signature
o HSAC should not wait until the chromes stage for approval it is to
costly if you wait
o Cross channel
o It is recommended Charter Corporate review USAs "agency input
document" and that Charter Corporate and Region review creating brief
concept strategy
<PAGE> 53
* Boards (image and copy) must be approved by Charter Corporate
and Region with a signature
* HSAC to get all Charter input before editing - it is too
costly if you wait
* Radio
* Scripts must be approved by Charter Corporate and Region with
a signature
* Print
* Print ads (graphic and copy) must be aproved by Charter
Corporate and Region with a signature before running
* Public Relations - Charter Corporate and Regional management must
approve all press releases and publicity generated by HSA.
* Other Tactics - any copy and design must be approved by Charter
Corporate and Region with a signature before execution
In the cases where Charter has developed a marketing piece for Charter Pipeline
for Earthlink systems and it is decided by HSAC to use the material for Charter
pipeline HSAC systems, Charter will provide a fair and reasonable quote for the
piece to HSA.
Seeds and Samples
* Regional Marketing VPs should create and provide to HSAC a seed list of
Charter Region and Corporate names for seeding all direct mail lists.
* Regional Marketing VPs should create and provide to HSAC a list of
Charter Region and Corporate names and quantities per name to receive
samples. Samples should be distributed to HSAC before tactic is
implemented.
Timeline for Approval Process
* Charter has 15 days to approve or make recommendations to a
piece submitted by HSA. We recommend bringing Charter into the
process as early as possible.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-1 of
our report dated March 12, 1999, except as to the third paragraph of Note 8 and
the first seven paragraphs of Note 14, for which the date is May 3, 1999, and as
to the last paragraph of Note 14, for which the date is May 21, 1999, relating
to the financial statements of High Speed Access Corp. and Subsidiaries, which
appear in such Prospectus. We also consent to the references to us under the
headings "Experts" and "Selected Financial Data" in such Registration Statement.
PricewaterhouseCoopers LLP
Louisville, Kentucky
May 28, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-1 of
our report dated March 12, 1999 relating to the financial statements of
CATV.net, Inc., which appear in such Registration Statement. We also consent to
the references to us under the headings "Experts" and "Selected Financial Data"
in such Registration Statement.
PricewaterhouseCoopers LLP
Louisville, Kentucky
May 28, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-1 of
our report dated March 12, 1999 relating to the financial statements of High
Speed Access Network, Inc., which appear in such Registration Statement. We also
consent to the references to us under the headings "Experts" and "Selected
Financial Data" in such Registration Statement.
PricewaterhouseCoopers LLP
Louisville, Kentucky
May 28, 1999
