<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 3, 1999
REGISTRATION NO. 333-74667
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 6
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)
------------------------
Copies 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
EXPLANATORY NOTE
This registration statement covers the registration of 14,950,000 shares of
common stock offered by the registrant pursuant to an underwritten public
offering, which includes 1,950,000 shares of common stock issuable upon exercise
of the Underwriters' over-allotment option. This registration statement also
covers up to 1,808,407 shares of common stock to be offered to Cisco Systems,
Inc., Com21, Inc. and Microsoft Corporation in a concurrent offering that is not
underwritten. The concurrent offering consists of $7.5 million of common stock
offered to Cisco, $1 million of common stock offered to Com21, and $10 million
of common stock offered to Microsoft, in each case at the offering price, net of
the underwriting discount. Therefore, this registration statement contains two
forms of prospectus: one to be used in connection with the public offering and
the other to be used in connection with the concurrent offerings to Cisco, Com21
and Microsoft. The public offering prospectus and the concurrent offering
prospectus are identical in all respects except for the front cover pages, the
tables of contents, the descriptions of the plan of distribution and the
descriptions of legal matters. The alternate pages of the concurrent offering
prospectus are included herein after the final page of the public offering
prospectus and are labeled "Alternate Page for Concurrent Offering Prospectus."
Final forms of each prospectus will be filed with the Securities and Exchange
Commission under Rule 424(b).
<PAGE> 3
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> 4
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> 5
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> 6
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
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> 7
<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>
- ---------------
** 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> 8
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 3rd day of June, 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 June 3, 1999
- ----------------------------------------------------- Officer)
Ron Pitcock, Sr.
* Chief Financial Officer June 3, 1999
- ----------------------------------------------------- (Principal Financial and
George E. Willett Accounting Officer)
* Director, Chairman June 3, 1999
- -----------------------------------------------------
David A. Jones, Jr.
/s/ ROBERT S. SAUNDERS Director, Vice Chairman June 3, 1999
- -----------------------------------------------------
Robert S. Saunders
* Director June 3, 1999
- -----------------------------------------------------
Irving W. Bailey, II
* Director June 3, 1999
- -----------------------------------------------------
Michael E. Gellert
* Director June 3, 1999
- -----------------------------------------------------
Jerald L. Kent
* Director June 3, 1999
- -----------------------------------------------------
William D. Savoy
* Director June 3, 1999
- -----------------------------------------------------
Stephen E. Silva
*By: /s/ ROBERT S. SAUNDERS
------------------------------------------------
Robert S. Saunders
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 9
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> 10
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
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> 11
<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>
- ---------------
** Previously filed.
+ Confidential treatment requested for certain portions of this Exhibit pursuant
to Rule 406 promulgated under the Securities Act.
<PAGE> 1
13,000,000 SHARES
HIGH SPEED ACCESS CORP.
COMMON STOCK
UNDERWRITING AGREEMENT
June __, 1999
LEHMAN BROTHERS INC.
J.P. MORGAN SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
CIBC OPPENHEIMER CORP.
As Representatives of the several
Underwriters named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
High Speed Access Corp., a Delaware corporation (the "Company"),
proposes to sell 13,000,000 shares (the "Firm Stock") of the Company's Common
Stock, par value $.01 per share (the "Common Stock"). In addition, the Company
proposes to grant to the Underwriters named in Schedule 1 hereto (the
"Underwriters") an option to purchase up to an additional 1,950,000 shares of
the Common Stock on the terms and for the purposes set forth in Section 2 (the
"Option Stock"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "Stock." This is to confirm the agreement
concerning the purchase of the Stock from the Company by the Underwriters named
in Schedule 1 hereto (the "Underwriters").
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1, and amendments thereto,
with respect to the Stock have (i) been prepared by the Company in
conformity with the requirements of the United States Securities Act
of 1933 (the "Securities Act") and the rules and regulations (the
"Rule and Regulations") of the United States Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under
the Securities Act. Copies of such registration statement and the
amendments thereto have been delivered by the Company to you as the
representatives (the "Representatives") of the Underwriters. As used
in this Agreement, "Effective Time" means the date and the time as of
which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the Effective Time;
<PAGE> 2
"Preliminary Prospectus" means each prospectus relating to the Stock
included in such registration statement, or amendments thereof, before
it became effective under the Securities Act and any prospectus filed
with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules and Regulations;
"Registration Statement" means such registration statement, as amended
at the Effective Time, including all information contained in the
final prospectus filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations in accordance with Section 5(a) hereof and
deemed to be a part of the registration statement as of the Effective
Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "Prospectus" means such final prospectus relating to
the Stock, as first filed with the Commission pursuant to paragraph
(1) or (4) of Rule 424(b) of the Rules and Regulations. The Commission
has not issued any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus. For purposes of this Agreement
the term Registration Statement shall not include the Cisco Systems,
Inc., Com 21, Inc., and Microsoft Corporation preliminary and final
prospectuses (the "Additional Prospectuses").
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all respects to the
requirements of the Securities Act and the Rules and Regulations and
do not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any supplement
thereto) contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light
of the circumstances under which they were made) not misleading;
provided that no representation or warranty is made as to information
contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein.
(c) The Company and each of its subsidiaries (as defined in
Section 15) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and
are in good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the conduct
of their respective businesses requires such qualification, and have
all power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged;
and none of the subsidiaries of the Company is a "significant
subsidiary", as such term is defined in Rule 405 of the Rules and
Regulations.
2
<PAGE> 3
(d) At the First Delivery Date (as defined in Section 4), the
Company will have an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the
Company will have been duly and validly authorized and issued, are
fully paid and non-assessable and will conform to the description
thereof contained in the Prospectus; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable
and are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims.
(e) The unissued shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor as
provided herein will be duly and validly issued, fully paid and
non-assessable and the Stock will conform to the description thereof
contained in the Prospectus.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated
hereby will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or
to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state or foreign securities laws in connection with
the purchase and distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated
hereby.
(h) Except as described in the Registration Statement, there are
no contracts, agreements or understandings between the Company and any
person granting such person the right (other than rights which have
been waived or satisfied) to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such
3
<PAGE> 4
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
(i) Except as described in the Registration Statement, the
Company has not sold or issued any shares of Common Stock during the
six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act, other than shares issued pursuant to employee benefit
plans, qualified stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.
(j) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since such date, there has not
been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus.
(k) The historical and pro forma financial statements, together
with the related notes, set forth in the Prospectus comply as to form
in all material respects with the requirements of Regulation S-X under
the Securities Act applicable to registration statements on Form S-1
under the Securities Act. The historical financial statements
(including the related notes and supporting schedules) filed as part
of the Registration Statement or included in the Prospectus present
fairly in all material respects the financial condition and results of
operations of the entities purported to be shown thereby, at the dates
and for the periods indicated, and have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved. The unaudited pro forma
combined statement of operations has been prepared on a basis
consistent with such historical statements of the Company, except for
the pro forma adjustments specified therein, and gives effect to
assumptions made on a reasonable basis and in good faith. The other
financial and statistical information and data included in the
Prospectus, historical and pro forma, have been derived from the
financial records of the Company (or its predecessors) and, in all
material respects, have been prepared on a basis consistent with such
books and records of the Company (or its predecessor) and present
fairly the historical and proposed transactions contemplated by the
Prospectus and this Agreement.
4
<PAGE> 5
(l) PricewaterhouseCoopers LLP, who have audited certain
financial statements of the Company, whose report appears in the
Prospectus and who have delivered the initial letter referred to in
Section 7(g) hereof, are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(m) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and all real property
and buildings held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company
and its subsidiaries.
(n) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value
of their respective properties and as is customary for companies
engaged in similar businesses in similar industries.
(o) To the best of the Company's knowledge, the Company and each
of its subsidiaries own or possess adequate rights to use all material
patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights and
licenses necessary for the conduct of their respective businesses and
have no reason to believe that the conduct of their respective
businesses will conflict with, and have not received any notice of any
claim of conflict with, any such rights of others.
(p) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which
any property or assets of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of
its subsidiaries, could reasonably be expected to have a material
adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company
and its subsidiaries; and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(q) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed
as exhibits to the Registration Statement.
5
<PAGE> 6
(r) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(s) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which could
reasonably be expected to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries.
(t) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and
has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of its subsidiaries which
has had (nor does the Company have any knowledge of any tax deficiency
which, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have a material adverse
effect on the consolidated financial position, stockholders' equity,
results of operations, business or prospects of the Company and its
subsidiaries.
(u) The Company has developed a plan (the "Company Y2K Plan")
intended to ensure that all computer hardware and software used in and
material to the business of the Company and its subsidiaries is
designed to be Year 2000 Compliant. The Company Y2K Plan includes
reasonable steps to determine whether the failure of any suppliers or
customers with which the Company or any subsidiary has a material
relationship to be Year 2000 Compliant would have or would reasonably
be expected to have a material adverse effect on the Company and
assuming the consummation of the Company Y2K Plan, the occurrence of
calendar year 2000 will not reasonably be expected to have a material
adverse effect on the Company. For purposes of this subsection (u),
"Date Data" means any data of any kind that consists of date
information or which is otherwise derived from, dependent on or
related to date information; "Date-Sensitive System" means any
software, microcode or hardware system or component, including any
electronic or electronically controlled system or component that
processes any Date Data and that is installed, in development or on
order, for internal or external use, or the provision or operation of
which provides a benefit to customers, vendors, suppliers or any other
party; and "Year 2000 Compliant" means (i) with respect to Date Data,
that such data is in proper format and (ii) with respect to
Date-Sensitive Systems, that each such system accurately processes all
Date Data, including for the twentieth and twenty-first centuries,
without loss of any functionality or performance, including, without
limitation, calculating, comparing, sequencing, storing and displaying
such Date Data (including all leap year considerations), when used as
a stand-alone system or in combination with other software or
hardware. The matters set forth in this
6
<PAGE> 7
subsection (u) are subject to disclosures relating to Year 2000
matters in the Prospectus.
(v) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed or contemplated in the Prospectus, the Company has not (i)
issued or granted any securities, (ii) incurred any material liability
or obligation, direct or contingent, other than liabilities and
obligations which were incurred in the ordinary course of business,
(iii) entered into any material transaction not in the ordinary course
of business or (iv) declared or paid any dividend on its capital
stock.
(w) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D)
the reported accountability for its assets is compared with existing
assets at reasonable intervals.
(x) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any
material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject, (iii) is
in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject or (iv) has failed to obtain any
material license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or
to the conduct of its business.
(y) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used
any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(z) Neither the Company nor any subsidiary is, or will be after
the offering and use of proceeds therefrom, an "investment company"
within the
7
<PAGE> 8
meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
2. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 13,000,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 1,950,000 shares of Option Stock. Such option is granted solely
for the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 4 hereof. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
lots. The price of both the Firm Stock and any Option Stock shall be $_____ per
share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), as the case may be,
except upon payment for all the Stock to be purchased on such Delivery Date as
provided herein.
3. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale
initially at the public offering price set forth on the cover page of the
Prospectus and otherwise upon the terms and conditions set forth in the
Prospectus.
It is understood that 975,000 shares of the Firm Stock will initially
be reserved by the several Underwriters for offer and sale upon the terms and
conditions set forth in the Prospectus and in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. to employees
and other persons having relationships with the Company and its subsidiaries who
have heretofore delivered to the Representatives offers or indications of
interest to purchase shares of Firm Stock in form satisfactory to the
Representatives, and that any allocation of such Firm Stock among such persons
will be made in accordance with timely directions received by the
Representatives from the Company; provided, that under no circumstances will the
Representatives or any Underwriter be liable to the Company or to any such
person for any action taken or omitted in good faith in connection with such
offering to employees and other persons having relationships with the Company
and its subsidiaries. It is further understood that any shares of such Firm
Stock which are not purchased by such persons will be offered by the
Underwriters to the public upon the terms and conditions set forth in the
Prospectus.
8
<PAGE> 9
4. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the office of Weil, Gotshal & Manges LLP, 767
Fifth Avenue, New York, New York 10153, at 10:00 A.M., New York City time, on
the third full business day following the date of this Agreement or the fourth
business day if this Agreement is executed after 4:30 p.m. New York City time or
at such other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to as
the "First Delivery Date." On the First Delivery Date, the Company shall deliver
or cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall be
registered in such names and in such denominations as the Representatives shall
request in writing not less than two full business days prior to the First
Delivery Date.
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the third business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date."
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall
be registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close of
business on the second
9
<PAGE> 10
business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under the Securities Act; to make no further amendment or
any supplement to the Registration Statement or to the Prospectus
except as permitted herein; to advise the Representatives, promptly
after it receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus has been filed and to furnish the
Representatives with copies thereof; to advise the Representatives,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Stock for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case excluding
exhibits) and (ii) each Preliminary Prospectus, the Prospectus and any
supplemented Prospectus and, if the delivery of a prospectus is
required at any time after the Effective Time in connection with the
offering or sale of the Stock or any other securities relating thereto
and if at such time any events shall have occurred as a result of
which the Prospectus as then supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary to supplement the Prospectus in order to comply with the
Securities Act, to notify the Representatives and, upon their request,
to prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from
time to time reasonably request of a supplemented Prospectus which
will correct such statement or omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or any supplement to the Prospectus that may,
in the
10
<PAGE> 11
judgment of the Company or the Representatives, be required by the
Securities Act or reasonably requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the
Underwriters and obtain the consent of the Representatives to the
filing;
(f) As soon as practicable after the Effective Date (but in no
event later than 45 days after the first anniversary of the end of the
fiscal quarter following the effective date of the Registration
Statement), to make generally available to the Company's security
holders and to deliver to the Representatives an earnings statement of
the Company and its subsidiaries (which need not be audited) complying
with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(g) For a period of three years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by
the Company to its shareholders and all public reports and all reports
and financial statements furnished by the Company to the Nasdaq Stock
Market or the principal national securities exchange upon which the
Common Stock may be listed pursuant to requirements of or agreements
with Nasdaq or such exchange or to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or
to file a general consent to service of process in any jurisdiction;
(i) For a period of 180 days from the date of this Underwriting
Agreement, not to, directly or indirectly, (1) offer for sale, sell,
contract to sell, pledge, hedge or otherwise dispose, directly or
indirectly, of any shares of Common Stock or securities convertible
into or exchangeable for Common Stock (other than the Stock, the
shares of Common Stock sold pursuant to the Other Prospectuses and
shares issued pursuant to employee benefit plans, qualified stock
option plans or other employee compensation plans existing on the
11
<PAGE> 12
date hereof or pursuant to currently outstanding options, warrants or
rights), or sell or grant options, rights or warrants with respect to
any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the grant of options
pursuant to option plans existing on the date hereof), provided that
the Company may issue shares of Common Stock or warrants in connection
with an acquisition of another company if the terms of that issuance
provide that the Common Stock or Common Stock issuable pursuant to the
warrants will not be resold prior to the expiration of the 180-day
period commencing on the date of this Underwriting Agreement, or (2)
enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, or (3)
publicly disclose an intention to make any such offer, sale, pledge,
hedge, swap or other transaction, in each case without the prior
written consent of Lehman Brothers Inc.; and to cause each officer and
director of the Company to furnish to the Representatives, prior to
the First Delivery Date, a letter or letters, in form and substance
satisfactory to counsel for the Underwriters, pursuant to which each
such person shall agree not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to,
result in the disposition by any person at any time in the future of)
any shares of Common Stock or securities convertible into or
exchangeable for Common Stock or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock
or other securities, in cash or otherwise, in each case for a period
of 180 days from the date of the Prospectus, without the prior written
consent of Lehman Brothers Inc;
(j) Prior to the Effective Date, to apply for the inclusion of
the Stock in the National Market System of the Nasdaq Stock Market and
to use its best efforts to complete that listing, subject only to
official notice of issuance and evidence of satisfactory distribution,
prior to the First Delivery Date;
(k) Prior to filing with the Commission its initial Report on
Form 10-Q containing the information specified in Rule 463 of the
Rules and Regulations, to furnish a copy thereof to the counsel for
the Underwriters and receive and consider its comments thereon, and to
deliver promptly to the Representatives a signed copy of such Report
on Form 10-Q or 10-K filed by it with the Commission;
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission
thereunder.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities
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<PAGE> 13
Act of the Registration Statement and any amendments and exhibits thereto; (c)
the costs of distributing the Registration Statement as originally filed and
each amendment thereto and any post-effective amendments thereof (including, in
each case, exhibits), any Preliminary Prospectus, the Prospectus and any
supplement to the Prospectus, all as provided in this Agreement; (d) the costs
of producing and distributing this Agreement and any other related documents in
connection with the offering, purchase, sale and delivery of the Stock; (e) the
filing fees incident to securing any required review by the National Association
of Securities Dealers, Inc. of the terms of sale of the Stock; (f) any
applicable listing or other fees; (g) the fees and expenses of qualifying the
Stock under the securities laws of the several jurisdictions as provided in
Section 5 (h) and of preparing, printing and distributing a Blue Sky Memorandum
(including related reasonable fees and expenses of counsel to the Underwriters);
and (i) all other costs and expenses incident to the performance of the
obligations of the Company under this Agreement; provided that, except as
provided in this Section 6 and in Section 11 the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied
with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of Weil,
Gotshal & Manges LLP, counsel for the Underwriters, is material or
omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel
for the Underwriters, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request
to enable them to pass upon such matters.
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<PAGE> 14
(d) Brobeck, Phleger & Harrison LLP shall have furnished to the
Representatives their written opinion, as special securities counsel
to the Company, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect set forth in Exhibit A attached hereto:
(e) Wyatt, Tarrant & Combs shall have furnished to the
Representatives their written opinion, as counsel to the Company,
addressed to the underwriters dated such Delivery Date, in form and
substance reasonable satisfactory to the representatives to the effect
set forth in Exhibit B attached hereto.
(f) The Representatives shall have received from Weil Gotshal &
Manges LLP, counsel for the Underwriters, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(g) At the time of execution of this Agreement, the
Representatives shall have received from PricewaterhouseCoopers LLP a
letter, in form and substance satisfactory to the Representatives,
addressed to the Underwriters and dated the date hereof (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date hereof
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days prior to
the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(h) With respect to the letter of PricewaterhouseCoopers LLP
referred to in the preceding paragraph and delivered to the
Representatives concurrently with the execution of this Agreement (the
"initial letter"), the Company shall have furnished to the
Representatives a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery
Date (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates
as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of
the bring-down letter), the conclusions and findings of
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<PAGE> 15
such firm with respect to the financial information and other matters
covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board,
its President or a Vice President and its Chief Financial Officer
stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements contained
herein; and the conditions set forth in Subsections (a) and (i)
of this Section 7 have been fulfilled; and
(ii) As of the Effective Date, the Registration Statement
and Prospectus did not include any untrue statement of a material
fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and since the Effective Date no event has occurred
which should have been set forth in a supplement or amendment to
the Registration Statement or the Prospectus.
(j) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of
the Stock being delivered on such Delivery Date on the terms and in
the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall
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<PAGE> 16
have been declared by Federal or state authorities, (iii) the United
States shall have become engaged in hostilities, there shall have been
an escalation in hostilities involving the United States or there
shall have been a declaration of a national emergency or war by the
United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) as to make it, in the judgment of the
Representatives impracticable or inadvisable to proceed with the
public offering or delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(l) The Nasdaq Stock Market shall have approved the Stock for
inclusion in the National Market System, subject only to official
notice of issuance and evidence of satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who
controls any Underwriter within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases
and sales of Stock), to which that Underwriter, officer, employee or
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, (ii) the omission or alleged omission
to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or in any
Blue Sky Application any material fact required to be stated therein
or necessary to make the statements therein not misleading or (iii)
any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the
Stock or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii)
above (provided that the Company shall not be liable under this clause
(iii) to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures
to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall reimburse each
Underwriter and each such officer, employee or controlling person
promptly
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<PAGE> 17
upon demand for any legal or other expenses reasonably incurred by
that Underwriter, officer, employee or controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not
be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any such amendment or supplement,
in reliance upon and in conformity with written information concerning
such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein
which information consists solely of the information specified in
Section 8(e). The indemnification agreement set forth in this
paragraph (a) with respect to any Preliminary Prospectus shall not
inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages, liabilities or expenses purchased
the Stock which is the subject thereof (or to the benefit of any
person controlling such Underwriter) if at or prior to the written
confirmation of the sale of such Stock a copy of the Prospectus (or
the Prospectus as supplemented) was not sent or delivered to such
person and the untrue statement or omission of a material fact
contained in such Preliminary Prospectus was corrected in the
Prospectus (or in the Prospectus as supplemented) in any case where
such sending is required by the Securities Act unless the failure is
the result of noncompliance by the Company with paragraph 5(a) hereof.
The foregoing indemnity agreement is in addition to any liability
which the Company may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, its officers and employees, each of its
directors and each person, if any, who controls the Company within the
meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect
thereof, to which the Company or any such director, officer or
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or (B) in any Blue Sky Application or
(ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of that
Underwriter specifically for
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<PAGE> 18
inclusion therein as set forth in Section 8(e), and shall reimburse
promptly upon demand the Company and any such director, officer or
controlling person for any legal or other expenses reasonably incurred
by the Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to
the Company or any such director, officer, employee or controlling
person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 8 except to the extent it has been materially prejudiced
by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 8 for
any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the Representatives
shall have the right to employ counsel to represent jointly the
Representatives and those other Underwriters and their respective
officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may
be sought by the Underwriters against the Company under this Section 8
if, in the reasonable judgment of the Representatives either (i) there
is an actual or potential conflict between the position of the Company
and the Underwriters or (ii) there may be defenses available to it or
them that are different from or additional to those available to the
Company (in any of which events the Company shall not have the right
to direct the defense of such action on behalf of the Representative
or Representatives with respect to such different defenses), in any of
which events such fees and expenses shall be borne by the Company. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification or contribution may
be sought hereunder (whether or not the
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<PAGE> 19
indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld),
but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred
to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other from the offering of the Stock or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses) received by
the Company, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of
the Stock purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the shares of the Stock
under this Agreement, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined
by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters,
the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section were to
be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability,
or action
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in respect thereof, referred to above in this Section shall be deemed
to include, for purposes of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Stock underwritten by it and
distributed to the public was offered to the public exceeds the amount
of any damages which such Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 8(d) are several
in proportion to their respective underwriting obligations and not
joint.
(e) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering
of the Stock by the Underwriters set forth in the last paragraph on
the cover page of, and the information contained in paragraphs 3, 10,
11, 12, 13, 14 and 16 under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning
such Underwriters furnished in writing to the Company by or on behalf
of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 3. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement
(or, with
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<PAGE> 21
respect to the Second Delivery Date, the obligation of the Underwriters to
purchase, and of the Company to sell, the Option Stock) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 6 and 11. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 9, purchases Firm Stock which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of and payment for the Firm Stock if, prior to that time, any
of the events described in Sections 7(i) or 7(j), shall have occurred or if the
Underwriters shall decline to purchase the Stock for any reason permitted under
this Agreement.
11. Reimbursement of Underwriters' Expenses. If (a) the Company shall
fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Stock, and upon demand the Company shall pay the full amount thereof to the
Representative(s). If this Agreement is terminated pursuant to Section 9 by
reason of the default of one or more Underwriters, the Company shall not be
obligated to reimburse any defaulting Underwriter on account of those expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Lehman Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 212-526-6588), with a copy, in the case of any notice
pursuant to Section 11(d), to the Director of Litigation, Office of
the General Counsel, Lehman Brothers Inc., 3 World Financial Center,
10th Floor, New York, NY 10285;
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(b) if to the Company shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: John Hundley (Fax: (502)
515-3101);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Lehman Brothers Inc.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 13 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 16, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Underwriters contained in this Agreement
or made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Stock and shall remain in full force
and effect, regardless of any investigation made by or on behalf of any of them
or any person controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
16. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
22
<PAGE> 23
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
23
<PAGE> 24
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
HIGH SPEED ACCESS CORP.
By
---------------------------------
Name:
Title:
Accepted:
LEHMAN BROTHERS INC.
J.P. MORGAN SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
CIBC OPPENHEIMER CORP.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By LEHMAN BROTHERS INC.
By
-------------------------------------
Authorized Representative
24
<PAGE> 25
SCHEDULE 1
<TABLE>
<CAPTION>
Number of
Underwriters Shares
- ------------ ---------
<S> <C>
Lehman Brothers Inc....................................
J.P. Morgan Securities Inc.
Banc of America Securities LLC.........................
CIBC Oppenheimer Corp..................................
Total --
</TABLE>
<PAGE> 26
_____________, 1999
High Speed Access Corp
4100 E. Mississippi Avenue
Suite 1150
Denver, Colorado 80246
Lehman Brothers Inc.
JP Morgan Securities Inc.
NationsBanc Montgomery Securities LLC
CIBC Oppenheimer Corp.
As Representatives of the Several Underwriters
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
The undersigned understands that you and certain other firms
propose to enter into an Underwriting Agreement (the "Underwriting Agreement")
providing for the purchase by you and such other firms (the "Underwriters") of
shares (the "Shares") of Common Stock, par value $.01 per share (the "Common
Stock"), of High Speed Access Corp. (the "Company") and that the Underwriters
propose to reoffer the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement
by the Underwriters, and for other good and valuable consideration, the
undersigned hereby irrevocably agrees that, without the prior written consent of
Lehman Brothers Inc., the undersigned will not, directly or indirectly, (1)
offer for sale, sell, pledge, or otherwise dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result in
the disposition by any person at any time in the future of) any shares of Common
Stock (including, without limitation, shares of Common Stock that may be deemed
to be beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common Stock
that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable for Common Stock (other than the Shares) owned
by the undersigned on the date of execution of this Lock-Up Letter Agreement or
on the date of the completion of the Offering, or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, for a period of 180 days after the date of the final Prospectus
relating to the Offering.
<PAGE> 27
In furtherance of the foregoing, the Company and its Transfer
Agent are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company notifies you that it does
not intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, we will be released from our obligations
under this Lock-Up Letter Agreement.
The undersigned understands that the Company, the Underwriters
and the stockholders selling shares in the Offering will proceed with the
Offering in reliance on this Lock-Up Letter Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Letter
Agreement and that, upon request, the undersigned will execute any additional
documents necessary in connection with the enforcement hereof. Any obligations
of the undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
By:
--------------------------------------
Name:
Title:
Dated:
-----------------
2
<PAGE> 1
EXHIBIT 5.1
BROBECK
PHLEGER &
HARRISON
LLP
ATTORNEYS AT LAW
June 3, 1999
High Speed Access Corp.
4100 East Mississippi Avenue
Denver, Colorado 80246
Re: High Speed Access Corp. Registration Statement on Form S-1
for Delaware Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to High Speed Access Corp., a Delaware
corporation (the "Company"), in connection with the proposed issuance and sale
by the Company of up to 16,758,407 shares of the Company's Common Stock (the
"Shares") pursuant to the Company's Registration Statement on Form S-1 (the
"Registration Statement") filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act").
This opinion is being furnished in accordance with the requirements
of Item 16(a) of Form S-1 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the issuance and sale of the
Shares. Based on such review, we are of the opinion that the Shares have been
duly authorized, and if, as and when issued in accordance with the Registration
Statement and the related prospectus (as amended and supplemented through the
date of issuance) will be legally issued, fully paid and nonassessable.
We consent to the filing of this opinion letter as Exhibit 5.1 to
the Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus which is part of the Registration Statement.
In giving this consent, we do not thereby admit that we are within the category
of persons whose consent is required under Section 7 of the Act, the rules and
regulations of the Securities and Exchange Commission promulgated thereunder, or
Item 509 of Regulation S-K.
<PAGE> 2
BROBECK
PHLEGER &
HARRISON
LLP
ATTORNEYS AT LAW
High Speed Access Corp.
Page 2
This opinion letter is rendered as of the date first written above
and we disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company or the
Shares.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
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
- 2 -
<PAGE> 3
subscribes to Operator's cable TV service. Each Multiple Dwelling Unit ("MDU")
constitutes not more than a single Data Subscriber for purpose of this
Agreement.
1.9. "Full HSAC Services Roll-Out" means the creation, staffing and
operation of every business, technical and service aspect necessary to fully
implement the HSAC Services.
1.10. "Gross Revenues" means all gross revenues collected from Data
Subscribers for the HSAC Services, including, without limitation, monthly
subscription fees regardless of which party handles the billing and collection,
and as used herein, does not include (i) applicable sales or use taxes, (ii)
federal, state or local franchise fees, (iii) Installation Fees or any other
set-up charges assessed by HSAC, Operators or any authorized third-party
reseller or installer (subject to the limitations set forth in Section 6.2
below), (iv) rentals paid by Data Subscribers on Home Equipment Packages
(subject to the limitations set forth in Section 6.2 below) (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
- 3 -
<PAGE> 4
the World Wide Web, read news groups, and receive and send electronic mail
("E-mail") and perform related activities.
1.15. "Installation Fee" means the gross revenues collected directly or
indirectly from a Data Subscriber by HSAC, Operator, or any authorized
third-party reseller or installer for the installation and connection of a Home
Equipment Package for such Data Subscriber to receive HSAC Services but does not
include (i) applicable sales or use taxes, (ii) federal, state or local
franchise fees.
1.16. "Internet Portal" means a physical site sometimes referred to as
a "point of presence" where there is a collection of equipment including
routers, data storage devices, and modems that are used to connect to customers
and leased telecommunication lines that connect such site directly to a part of
the Internet backbone.
1.17. "ISP" or "Internet Service Provider" means an entity that
provides Internet access to its customers.
1.18. "Launch Date" means, with respect to a particular Committed
System, the date on which HSAC or Operator, as the case may be, is required to
commence revenue billing for Data Subscribers in such Committed System pursuant
to the Activation Schedule.
1.19. "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 4% 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 4% 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.
- 4 -
<PAGE> 5
1.23. "Potential Operators" means, as the case may be or the context
requires, any MSO or operator of packet-switched data systems now or hereafter
owned or controlled by, directly or indirectly, or affiliated with 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
- 5 -
<PAGE> 6
"Statement" Exhibit D
"Systems Access Agreement"Recital C
"Term" 16
"Termination Events" 18.3
2. EXCLUSIVE RIGHT TO PROVIDE HSAC SERVICES TO COMMITTED SYSTEMS; ADDITIONAL
COMMITTED SYSTEMS; INSPECTION AND ACCEPTANCE CRITERIA.
2.1. Exclusive Access. During the Term, HSAC shall have the sole and
exclusive right to access the Committed Systems listed on EXHIBIT A to this
Agreement for purposes of performing the HSAC Services and to perform the HSAC
Services for the Committed Systems, subject to and in accordance with the terms
herein and the Systems Access Agreement. Subject to the procedures set forth in
this Section 2, HSAC shall perform a Full HSAC Services Roll-Out on every such
Committed System within the time frames specified for a particular Committed
System in the Activation Schedule.
2.2. Designation of Additional Systems. During the Term (and subject to
the procedures set forth in this Section 2), Operator and Potential Operators
shall have the unilateral right, but not the obligation, to designate an
unlimited number of additional Cable Systems as Committed Systems under this
Agreement, and such right shall extend to any and all Cable Systems now owned or
managed or hereafter acquired or managed by Operator or Potential Operator.
Operator and Potential Operators shall exercise their right to designate
additional Cable Systems as Committed Systems hereunder by delivering written
notice of such designation to HSAC (an "Additional System Notice"). Upon HSAC's
receipt of such Additional System Notice, HSAC and the applicable Operator shall
amend this Agreement to add such Cable System(s) to EXHIBIT A, and the Cable
System(s) designated in such Additional System Notice shall automatically become
Committed Systems hereunder. If a Potential Operator designates Committed
Systems hereunder, the parties and such Potential Operators shall amend this
Agreement to include such Potential Operator as an Operator for all purposes
hereunder.
2.3. Commissioning of RF Plant; System Data Requirements. Within sixty
(60) days of (i) the Effective Date (as to the Committed Systems referenced in
Section 2.1 above), and (ii) HSAC's receipt of an Additional System Notice (as
to the Committed Systems referenced in Section 2.2 above), HSAC shall perform an
engineering inspection of Operator's RF Plant in the applicable Committed
Systems and deliver to Operator, HSAC's recommendations for any upgrades or
repairs (if HSAC fails to deliver such recommendations for any Committed System
within such 60 day period, then such Committed Systems will be deemed to satisfy
the System Data Requirements) which may be necessary for the Committed System to
conform to System Data Requirements ("Attainment Measures"). Operator
acknowledges and agrees that (i) in order for HSAC to deliver HSAC Services to
Data Subscribers, each Committed System must satisfy the System Data
Requirements, (ii) HSAC is not responsible for whether the Committed Systems
satisfy the System Data Requirements, and (iii) Operator shall undertake (or
refuse to take, as the case may be) those Attainment
- 6 -
<PAGE> 7
Measures necessary to cause the Committed System's RF Plant to attain, and
thereafter maintain in conformity with, the System Data Requirements during the
Term of this Agreement. If the Operator declines to effect appropriate
Attainment Measures for any particular Committed System, this Agreement shall
terminate as to such Committed System without liability of any kind to either
Operator or HSAC, and such Committed System shall be removed from EXHIBIT A of
this Agreement. If the Operator agrees to effect the Attainment Measures, the
Activation Schedule shall be amended to establish the milestones for Operator to
bring the Committed Systems into conformity with the System Data Requirements
including a reasonable amount of additional time for HSAC to complete its Full
HSAC Services Roll-Out for such Committed Systems.
2.4. Activation Schedule.
2.4.1. The Activation Schedule for the initial Committed
Systems as of the Effective Date hereunder shall be as set forth in EXHIBIT A.
Within forty-five (45) days of HSAC's receipt of an Additional System Notice,
Operator and HSAC shall negotiate and agree in good faith upon a feasible,
reasonable "critical path" timelines for each Committed System's Full HSAC
Services Roll-Out, and memorialize such timeline in an Activation Schedule (as
same may be amended from time to time as contemplated in Section 2.3 above to
account for the Operator's taking of Attainment Measures and as the parties may
otherwise agree in writing). The Activation Schedule shall set out
implementation milestones, including, without limitation: (i) that Operator
shall notify HSAC when a particular Committed System conforms (or when the
Operator expects such Committed System to conform if the taking of Attainment
Measures is required) with the System Data Requirements, (ii) the Launch Date,
and (iii) the date when the Full HSAC Services Roll-Out in each Committed System
shall be completed. In the event that the parties cannot agree upon a reasonable
Activation Schedule for any additional Committed Systems designated under
Section 2.2 within forty-five (45) days of HSAC's receipt the applicable
Additional Systems Notice, then the provisions of Section 6.4 of the Systems
Access Agreement shall apply, and HSAC will implement the HSAC Services for such
additional Committed Systems at a rate of eight (8) head-ends per month (such
head-ends to be designated by Operator), with Operators' head-ends receiving
priority for activation over head-ends owned and/or operated by other customers
of HSAC.
2.4.2. HSAC will not be deemed in default of a scheduled
Launch Date if (i) a Regional 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
- 7 -
<PAGE> 8
time to meet the applicable Launch Date, or (iii) HSAC does not receive any
specialized equipment required to carry the Vulcan Content (as defined in the
Content Agreement), which equipment is otherwise not required in order to
perform the HSAC Services, on a timely basis following the submission of a
complete order by HSAC to the vendor of such equipment before the lead times
required by such vendor in order to deliver such equipment in sufficient time
for HSAC to meet the applicable Launch Date.
3. HSAC OBLIGATIONS AFTER COMMISSIONING. As soon as Operator notifies HSAC that
any head-end in a Committed System conforms to the System Data Requirements,
HSAC agrees that it shall in conformity with the Activation Schedule:
3.1. install and connect the HSAC Network Equipment (subject to Section
6.2);
3.2. arrange at its expense for data transport (via telco, wireless,
etc.) from the Internet backbone to the head-ends of Operator's RF Plant for a
Committed System;
3.3. arrange telco return path circuits in One-Way Committed Systems;
3.4. commission the HSAC Network Equipment interface;
3.5. activate the data through-put portion of the HSAC Services;
3.6. begin marketing HSAC Services in the relevant areas and begin
offering subscriptions to potential Data Subscribers; and
3.7. complete the Full HSAC Services Roll-Out for such Committed System
and provide the HSAC Services for such Committed Systems.
4. UPGRADES. After initial activation of HSAC Services in a Committed System,
the Operator may reasonably request upgrades to the HSAC Network Equipment, and
HSAC shall make such upgrades at its expense within a reasonable time period,
provided that such upgrades are commercially reasonable. HSAC shall also make
substantially the same upgrades to the HSAC Network Equipment that HSAC makes to
substantially similar equipment that HSAC uses to provide HSAC or third party
customers access to the Internet. HSAC will provide Operator with all updates
and upgrades that HSAC develops or uses on any Cable System at the same prices
as such updates and upgrades are provided by HSAC to other customers of HSAC.
Neither party shall unilaterally change HSAC Network Equipment or Operator's RF
Plant in any way that renders a Committed System or the HSAC Services inoperable
without consulting with the other party regarding the allocation of costs
relating to such changes or upgrades.
5. ALLOCATION OF MAINTENANCE OBLIGATIONS.
5.1. Allocation. Following the commissioning of each Committed System,
HSAC shall maintain all HSAC Network Equipment. Operator shall maintain the
integrity of its RF
- 8 -
<PAGE> 9
Plant for each Committed System (including, without limitation, all coaxial
cable, head-end equipment, connectors, amplifiers and passive devices and
splitters). HSAC shall not be required to repair or maintain any portion of the
RF Plant of any Committed System. Operator shall also provide technical
personnel to eliminate signal leakage and maintain a proper connection interface
of the HSAC Network Equipment to the RF Plant for each Committed System.
5.2. Damage to Operator's Facilities. HSAC shall use its best efforts
to avoid damaging the Operator's RF Plant for each Committed System, and shall
not move, relocate, alter, sell, lease, license, assign, encumber or otherwise
tamper with the RF Plant of any Committed Systems. Without limiting Operator's
rights and remedies, HSAC shall pay to repair or replace any of Operator's
equipment that HSAC or its employees damage and shall pay Operator for any
damages resulting therefrom. Such repairs shall return such Operator equipment
to at least the same condition it was before the damage, and any replacement
equipment will be at least the same quality as the Operator equipment that is
replaced.
5.3. Damage to HSAC Network Equipment. The HSAC Network Equipment shall
be the property of HSAC. Operator shall use its best efforts to avoid damaging
the HSAC Network Equipment, and shall not move, relocate, alter, sell, lease,
license, assign, encumber or otherwise tamper with the HSAC Network Equipment.
Without limiting HSAC's rights and remedies, Operator shall pay to repair or
replace any of HSAC's equipment that Operator or its employees damage and shall
pay HSAC for any damages resulting therefrom. Such repairs shall return the HSAC
Network Equipment to at least the same condition it was before the damage, and
any replacement equipment will be at least the same quality as the HSAC Network
Equipment that is replaced.
6. HOME EQUIPMENT PACKAGE.
6.1. Equipment Choice. Operator and HSAC shall mutually choose the
vendor/brand* of HSAC Network Equipment and cable modems for each Committed
System, and HSAC shall procure the Home Equipment Packages for Data Subscribers
(except for Data Subscribers who purchase their own). Such Home Equipment
Packages shall be installed in accordance with Section 6.2 below. Upon
installation of such Home Equipment Packages, HSAC shall monitor and maintain
electronically the Home Equipment Package for each Data Subscriber. Unless
purchased directly by a Data Subscriber from Operator or a third party
reseller/retailer, HSAC shall retain ownership of the Home Equipment Packages.
Each Data Subscriber shall be required to sign a statement acknowledging HSAC's
ownership of the Home Equipment Package. (*For purposes of this Agreement,
Com2l, Terayon and any other brands the parties may from time to time agree upon
shall be deemed acceptable brands.)
6.2. Installation And Modem Revenue Sharing. Either party may install
Home Equipment Packages or engage qualified third party installers to install
Home Equipment Packages for Data Subscribers. The party that installs Home
Equipment Packages shall keep 100% of the Installation Fee (which Installation
Fee will not exceed one hundred fifty dollars
- 9 -
<PAGE> 10
($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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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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15.1. Limitation of Liability. EXCEPT FOR THE INDEMNIFICATION
OBLIGATIONS DETAILED IN SECTION 14 ABOVE, IN NO EVENT WILL EITHER PARTY HERETO
BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES (EVEN IF THAT PARTY HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES), ARISING FROM OR RELATED TO A BREACH OF THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS.
15.2. Insurance. At all times during the Term, HSAC shall maintain: (i)
appropriate policies of general liability, casualty, and business interruption
or disruption insurance, each with aggregate coverage of at least two million
dollars ($2,000,000) with commercially reasonable deductibles; (ii) appropriate
workers compensation insurance to cover HSAC's employees against injury to
themselves or others and casualty accidents while performing HSAC Services; and
(iii) appropriate insurance policies with at least two million dollars
($2,000,000) of coverage per incident with commercially reasonable deductibles
covering against claims for intellectual property infringement. All such HSAC
insurance policies shall name Operator as an additional insured party.
15.3. Specific Performance. HSAC and Operator each acknowledges that
the rights granted, and services to be provided to each other hereunder are of a
special, unique, unusual, extraordinary, and intellectual character, giving them
peculiar value, the loss of which cannot be reasonably or adequately compensated
in damages, and that an actual or threatened material breach by either party
hereunder would cause the other party irreparable injury and damage. Subject to
Section 9.2.2 off the Content Agreement, each party agrees that, if it commits
or is about to commit a material breach of this Agreement, the other party will
be entitled to injunctive or other equitable relief as a remedy for any such
actual or threatened material breach, without the requirement to post any bond
or other security therefor.
16. TERM OF AGREEMENT. The term ("Term") of this Agreement shall commence on the
Effective Date, and as to a particular Committed System, continue for a term of
five (5) years thereafter from the Launch Date for each such Committed System
(the "Initial Term"). Following such Initial Term, this Agreement shall
automatically renew itself on a year-to-year basis (a "Renewal Term") unless
terminated by notice from either party at least three (3) months prior to the
expiration of the Initial Term or any such Renewal Term.
17. [Intentionally Deleted]
18. TERMINATION
18.1. Operator Remedies. In addition to all of Operator's other rights
and remedies at law or equity, Operator has the right to (i) terminate this
Agreement, (ii) renegotiate this Agreement, (iii) remove a particular Committed
System from this Agreement, or (iv) retract HSAC's exclusive rights as to a
particular Committed System, if there has been a Termination Event as set forth
in Section 18.3 hereof. Operator's selection of any one of these remedies
- 21 -
<PAGE> 22
shall not preclude Operator from selecting any other of such remedies for the
same or other Termination Event. Except as set forth in Sections 18.6 and 19
below, in the event that a Termination Event occurs which is limited to a
particular Committed System, Operator may exercise the forgoing rights only with
respect to the Committed System in question and not this entire Agreement.
18.2. Actions upon Termination. Except as set forth in Section 18.4 to
the contrary, upon any termination or cancellation of this Agreement as to a
particular Committed System for any reason whatsoever: (i) such Committed System
shall be removed from EXHIBIT A and from this Agreement, (ii) Operator shall
purchase from HSAC at book value (based on straight line depreciation) any
ownership rights that HSAC has in the HSAC Network Equipment, Home Equipment
Package, or any other equipment or software owned by HSAC that is committed to
such Committed System; (iii) HSAC shall comply with the Conversion Requirements
with respect to such Committed System; and (iv) HSAC shall transfer to Operator
all Confidential Information, Customer Lists, and any data related to or about
the Data Subscribers relating to the applicable Committed Systems.
18.3. Termination Events. The following shall be deemed "Termination
Events:"
18.3.1. HSAC fails to meet Launch Date applicable to a
particular Committed System;
18.3.2. HSAC fails at any time to comply with the System
Service Requirements in any material respect and has not cured such lack of
compliance to Operator's reasonable satisfaction within sixty (60) after
Operator has provided HSAC with written notice of such non-compliance. Operator
shall have the right to at least once every three (3) months to reasonably audit
or observe HSAC's operations in order to determine if HSAC is complying with the
System Service Requirements;
18.3.3. There is a failure of the HSAC Services and/or the
HSAC Network Equipment such that the HSAC Services are not available to a
majority of Data Subscribers in a Committed System in the same manner as such
HSAC Services are normally available to such Data Subscribers, which failure is
not cured or repaired within thirty (30) days after Operator gives HSAC written
notice thereof;
18.3.4. HSAC becomes insolvent, or a petition under any
bankruptcy act shall be filed by or against HSAC (which petition shall not have
been dismissed within thirty (30) days thereafter), or HSAC executes an
assignment for the benefit of creditors, or a receiver is appointed for HSAC or
its assets, or HSAC takes advantage of any insolvency or any like statute;
18.3.5. HSAC fails to upgrade or replace any equipment or
software used in relationship with the HSAC Services such that such equipment no
longer complies with the
- 22 -
<PAGE> 23
vendor's standards and/or industry standards for such equipment, and such
failure is not cured within thirty (30) days after Operator gives written notice
thereof to HSAC;
18.3.6. HSAC shall fail to pay to Operator any and all sums
payable to Operator as and when due hereunder within thirty (30) days after
Operator gives HSAC written notice of such failure;
18.3.7. HSAC shall fail to carry, distribute and support the
Vulcan Content (as defined in the Content Agreement) on an exclusive basis for
all Cable Systems and other HSAC customers utilizing the HSAC Services in
accordance with the terms of the Content Agreement, HSAC shall carry any
Competing Content (as defined in the Content Agreement) in violation of the
Content Agreement, or HSAC shall breach the provisions of Section 6.3 of the
Content Agreement; and
18.3.8. 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.
- 23 -
<PAGE> 24
18.6. Termination for Repeated Withdrawal of Committed Systems. In the
event that Operator withdraws from this Agreement pursuant to Section 18.1 above
(not including Committed Systems withdrawn pursuant to Section 18.4 above) a
number of Committed Systems equal to or greater than 50% of the total number of
Committed Systems initially included in Exhibit A to this Agreement as of the
Effective Date, then Operator shall have the right to terminate this Agreement
upon thirty (30) days prior written notice to HSAC, without any further
liability or obligation to HSAC.
19. EXCLUSIVITY TERMINATION. In addition to those reasons permitted elsewhere in
this Agreement, Operator may also terminate HSAC's exclusive rights under
Section 2.1 hereof if it is reasonably necessary to comply with any statutes,
regulations, or court orders.
20. INDEPENDENT CONTRACTORS. All work performed by HSAC in connection with the
HSAC Service described in this Agreement shall be performed by HSAC as an
independent contractor and not as the agent, employee, joint venture or partner
of Operator. All persons furnished by HSAC shall be for all purposes solely
HSAC's employees or agents and shall not be deemed to be employees of Operator
for any purpose whatsoever. HSAC shall furnish, employ, and have exclusive
control of all persons to be engaged in performing services under this Agreement
and shall prescribe and control the means and methods of performing such
maintenance services by providing adequate and proper supervision. Nothing
contained herein shall be deemed to create a relationship of joint venture,
associates, principal and agent or partnership between the parties hereto and
neither party shall hold itself out to the contrary. Each party is acting as
principal hereunder.
21. FORCE MAJEURE. Neither party shall be responsible for any Service Failure or
delay or failure in performance of any part of this Agreement to the extent that
such delay or failure is caused by fire, flood, explosion, war, lightning,
embargo, government requirement, riots or civil commotion, acts of civil or
military authority, embargoes, strikes, acts of God, power surges, acts or
omissions of carriers/utilities, or other causes or contingencies beyond its
reasonable control (a "Force Majeure"); provided, that (i) neither party shall
be relieved under this Section 21 from its obligations under Section 7 hereof
with respect to timely repairs of Service Failures caused by such Force Majeure,
and (ii) HSAC has complied with the manufacturers' or vendors' suggested
maintenance for any equipment used in providing the HSAC Services to the extent
such maintenance would have reduced the likelihood of or damage caused by any
Force Majeure. If any such event of Force Majeure occurs and such event
continues for ninety (90) days or more, the party delayed or unable to perform
shall give immediate notice to the other party, and the party affected by the
other's delay or inability to perform may elect to suspend performance of its
allocable portions or duties with respect to the HSAC Services for the duration
of the condition. The affected party may resume performance of its duties once
the condition ceases, and the period of this Agreement shall be deemed extended
for such affected Committed System up to the length of time the condition
endured.
- 24 -
<PAGE> 25
22. ASSIGNMENT. HSAC shall not have the right to assign this Agreement to any
person or entity without the prior written consent of Operators, except that
HSAC may without Operator's consent assign its rights, but not its obligations,
to a subsidiary of HSAC, provided, that, no such assignment will relieve HSAC of
liability for its obligations hereunder. Operators may assign this Agreement to
any person or entity, and this Agreement shall be binding and inure to the
benefit of their successors and assigns. Each party shall be permitted to assign
this Agreement and grant a security interest in its contract rights and
tangible/intangible property interests (including the HSAC Network Equipment and
Home Equipment Packages) arising under this Agreement for purposes of securing
financing from its commercial lender(s). However, as a condition to doing so,
HSAC shall be obligated to obtain non-disturbance agreements in form and
substance satisfactory to Operators from each such lender under which such
lender agrees that, notwithstanding such lender's exercise of its rights as a
secured creditor, such lender and its assigns shall not disturb, affect or
interfere with HSAC's provision of the HSAC Services hereunder. All assignments
in contravention of this Section 22 shall be null and void and of no force or
effect. Either party shall provide the other party with thirty (30) days prior
written notice of any permitted assignment hereunder.
23. AMENDMENTS, MODIFICATIONS, OR SUPPLEMENTS. Amendments, modifications, or
supplements to this Agreement shall be permitted, provided all such changes
shall be in writing signed by the authorized representatives of both parties
unless otherwise expressly permitted in this Agreement, and all such changes
shall reference this Agreement and identify the specific articles or Sections of
this Agreement that is amended, modified, or supplemented.
24. NOTICES. All notices, demands, or other communications herein provided to be
given or that may be given by any party to the other shall be deemed to have
been duly given when made in writing and delivered in person, or upon receipt,
if (a) deposited in the U.S. mail, postage prepaid, certified mail, return
receipt requested; (b) sent by nationally recognized overnight courier in a
postpaid wrapper, or (c) by facsimile, addressed as follows:
Notices to HSAC: HIGH SPEED ACCESS CORP.
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 80% of network and HSAC e-mail, newsgroup and other HSAC
content servers' capacity during peak time, or (B) an average data traffic
statistic of 50% 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 four percent (4%) between the Effective
Date and December 31, 1998, three percent (3%) between January 31, 1999 and May
31, 1999, and two percent (2%) 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 four percent (4%) between
the Effective Date and December 31, 1998, three percent (3%) between January 31,
1999 and May 31, 1999, and two percent (2%) from and after June 1, 1999.
HSAC will resolve 90% of all non-RF Plant-related trouble calls within 24
hours and 99% of all non-RF Plant-related trouble calls within 36 hours prior to
May 31, 1999, and 99% 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 H
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.
