Exhibit 10.10
WORLDGATE AFFILIATION AGREEMENT
THIS AGREEMENT DATED 12/8/98, IS BETWEEN PRESTIGE CABLE, INC., WITH ITS
PRINCIPAL PLACE OF BUSINESS AT 000 XXX XXXX XXXX, XXXXXXXXXXXX, XX 00000,
(HEREINAFTER REFERRED TO AS "AFFILIATE") AND WORLDGATE COMMUNICATIONS, INC.,
WITH ITS PRINCIPAL PLACE OF BUSINESS AT: 0000 XXXXXXX XXXXX, XXXXX 000,
XXXXXXXX, XX 00000 (HEREINAFTER REFERRED TO AS "WG").
AFFILIATE AND WG (COLLECTIVELY THE "PARTIES") HEREBY AGREE AS FOLLOWS:
1. DEFINITIONS:
The following terms, abbreviations and definitions used in this Agreement
shall have the meanings set forth herein below:
(a) "SYSTEM(S)" means Affiliate's television distribution system(s),
including the equipment and facilities directly associated therewith, for the
geographical service areas identified in Exhibit A. Affiliate may, from time to
time, add additional Systems, in which event Affiliate shall provide WG with at
least ninety (90) days advance written notice of any such proposed additions to
the System, and upon the agreement of the Parties with respect to the proposed
additions this Agreement shall be promptly amended to cover the proposed
additions by the execution of supplemental and/or superseding Exhibit A(s)
setting forth the agreed and then current information relevant to such Systems.
(b) "SUBSCRIBER" means a person or entity gaining access to the
WorldGate-SM- Service through Affiliate's System(s).
(c) "SUBSCRIBER ACCESSIBLE CONTENT" means the data, information,
programs, displays, applications and other content (including without
limitation, the Internet) which, from time to time, are provided for access
by Subscribers to the WorldGate-SM- Service. Affiliate acknowledges that
elements of such Subscriber Accessible Content, such as the Internet, may
include materials and information of unreliable, uncertain or even
objectionable origin, nature and/or character, and that WG expressly
disclaims any responsibility for or liability associated with Subscriber's
access to or use of the Subscriber Accessible Content. Affiliate further
acknowledges that Subscriber Accessible Content is dynamic and that the
providers thereof may, from time to time, and for any reason make additions
to, deletions from and otherwise modify Subscriber Accessible Content.
(d) "TERM" means the term of this Agreement which shall commence on the
date hereof, and shall terminate seven (7) years from such date, except if
renewed or terminated earlier as provided herein.
(g) "WORLDGATE-SM- PLATFORM" means the hardware and software components to
be supplied by WG for Affiliate's use in connection with Affiliate's System(s)
to provide Subscriber access to the WorldGate Service hereunder.
(h) "WORLDGATE-SM- SERVICE" means an interactive Internet access service
which utilizes the WorldGate Platform in connection with the Affiliate's
System(s) for addressably transmitting downstream application information
(including Subscriber Accessible Content) to Subscribers in the System's
channels (vertical blanking intervals, full video channels or MPEG data stream)
and, either utilizing separate rf sub-bands of the System's current allocated
spectrum and/or a suitable phone-network based return facility for transmitting
upstream communication.
WorldGate Communications Confidential
2. AUTHORIZATION OF RIGHTS, WORLDGATE PLATFORM AND SYSTEMS:
(a) During the Term hereof WG authorizes Affiliate to use the WorldGate
Platform to provide the WorldGate Service to Subscribers, and such Subscribers
to have access to and use of the WorldGate Service via the WorldGate Platform in
connection with Affiliate's System, in accordance with the terms and conditions
of this Agreement.
(b) Upon the execution of this Agreement, and from time to time thereafter
as the number of Subscribers increases, Affiliate shall acquire by purchase,
lease or such other acquisition transaction as determined by the Parties, the
components of the WorldGate Platform which WG and Affiliate agree in writing to
be required to offer the WorldGate Service. Certain terms and conditions with
respect to such acquisition, warranty and support of the WorldGate Platform are
set forth in Exhibit B.
(c) Affiliate shall provide suitable Systems as further identified in
Exhibit A. The installation, maintenance and support of such Systems shall be
the sole responsibility of Affiliate and its suppliers. To enable WG to perform
its obligations hereunder Affiliate shall provide to WG (and its contractors)
reasonable physical access (upon advance notice by WG) as well as continuous
electronic access (via electronic means including direct modem and Internet
connections) to such Systems, and to the WorldGate Platforms connected thereto.
3. RESERVATION OF RIGHTS; TRADEMARKS; PROMOTION OF SERVICE:
(a) All licenses, rights and interest in, to and with respect to the
WorldGate Service (including without limitation the Subscriber Accessible
Content,) the elements, parts and derivations thereof (including without
limitation the writings, images, displays, electronic reproductions, user
interfaces, sounds, data, information and other works embodied therein, derived
therefrom or ancillary thereto, and the media of reproduction, performance or
exhibition thereof), as well as the intellectual property rights related
thereto, not specifically granted herein to Affiliate or to Subscribers, shall
be and are expressly and entirely reserved by WG and the applicable providers of
such Subscriber Accessible Content. The rights and licenses granted to Affiliate
and the Subscribers pursuant to this Affiliation Agreement do not include any
right to sublicense any third party, in whole or in part.
(b) Affiliate agrees that it is the essence of this Agreement that,
without the specific written consent of WG, or except as otherwise set forth
herein: (i) the WorldGate Platform shall not be modified by Affiliate in any
manner; (ii) the WorldGate Platform shall not be utilized by Affiliate for any
purpose other than to provide the WorldGate Service; and (iii) Affiliate shall
not authorize any other party to do any of the acts forbidden herein
(collectively, the "Prohibited Acts"). Affiliate shall immediately notify WG
upon the occurrence or likely occurrence of any Prohibited Acts of which it
becomes aware.
(c) The Parties recognize that each other's trademarks and brands are
significant assets of the Party owning the same and that any use of such
trademarks and brands shall only be with the other's prior consent and then only
in a manner consistent with that typically used with quality and valued
trademarks and brands, and intended to promote the good will associated with the
same. Affiliate agrees to prominently display the applicable WG brands in all
external communications promoting Internet access for television such as, but
not limited to, advertisements, commercials, direct mail pieces, xxxx stuffers,
and price lists. Affiliate agrees to diligently promote the WorldGate Service
with resources and activities which are no less than those generally used to
promote other offerings having a comparable potential customer base, including
participation in such cooperative marketing activities as may be agreed by the
Parties, including without limitation the activities set forth in Exhibit C.
WorldGate Communications Confidential
4. PAYMENTS, ACCESS FEES AND TAXES:
(a) As consideration for the rights granted and services performed
hereunder with respect to the WorldGate Service, Affiliate shall pay to WG
Subscriber Access Fees as more fully set forth in Exhibit D. Notwithstanding the
required payment of a Subscriber Access Fee as described above, the Parties
agree and acknowledge that Affiliate is free to determine what fees, if any, it
charges its customers with respect to access to the WorldGate Service. All
quotations, prices, fees and monies due thereunder to WG are net of all duties,
franchise fees and taxes (including interest and penalties on any such amounts)
now or hereafter imposed or based upon the licensing, rental, purchase,
shipment, delivery, transmission, exhibition, possession, or use of the
WorldGate Platform, the access to the WorldGate Service and any Subscriber
Accessible Content, or any transfer of technology hereunder, but excluding
however any taxes assessed upon any of WG's income (collectively "Taxes").
Affiliate shall indemnify and hold WG forever harmless from any liability
associated with such Taxes.
(b) Except for Subscriber Access Fees all payments hereunder shall be made
promptly at the net invoice price within thirty (30) days after the receipt of
an invoice for the same. Invoices for equipment purchased shall be provided to
Affiliate upon delivery of such equipment. Interest shall accrue on all amounts
not paid when due at a rate equal to the lesser of twelve (12%) percent per
annum or any maximum rate imposed under applicable laws and regulations.
Payments shall not be deferred or subjected to setoff by Affiliate. Payments may
not be suspended and shall continue during the pendency of any dispute
hereunder. All prices and fees stated herein and all payments to be made to WG
hereunder are expressed in, and shall be made, in the currency of the United
States unless otherwise agreed in writing by the parties. WG reserves the right
to change or limit the amount or duration of any payment credit terms which may
be extended to Affiliate hereunder in the event of any change in the credit
worthiness of Affiliate as determined by WG in its sole discretion.
5. STATEMENTS AND REPORTS: To afford determination and/or verification of
the Subscriber Access Fees due WG shall provide to Affiliate an accounting
statement and report within twenty (20) days after the beginning of each
calendar month in which the WorldGate Service is distributed hereunder. Said
statement shall include the following information to the extent applicable: the
number of Subscribers, the type of Subscriber accounts, the Subscriber usage,
and the total amount due for access to the WorldGate Service hereunder. Such
information may be provided electronically by Affiliate access to computer
terminals associated with the WorldGate Platform and/or in connection with a
third party standard billing interface. Affiliate acknowledges and agrees that
WG will have access to such of Affiliate's records and information relating to
Subscribers as reasonably required to comply with WG's contractual obligations
and to provide such statements and reports as are required hereunder.
6. AUDIT: Affiliate and WG shall keep accurate and complete books and
records of Subscriber accounts and their access to and use of the WorldGate
Service. Subject to the confidentiality provisions contained herein, each of
Affiliate and WG may, not more than once during each calendar year and upon at
least thirty days prior written notice, at its expense and during regular
business hours, have the right to audit all such books and records of the other.
Such audits shall be conducted by a internationally recognized, independent
public accounting firm chosen by the auditing Party on the auditing Party's
behalf. The audited Party agrees to fully cooperate with auditing Party's
representatives and/or designees, and shall provide such representatives and/or
designees with adequate space in which to facilitate any audit of such books
and/or records. If an audit reveals a discrepancy in the amounts owed for the
audit period, WG and Affiliate agree to make prompt adjustments of such accounts
along with any required credits or payments associated therewith.
WorldGate Communications Confidential
7. REPRESENTATIONS AND WARRANTIES OF THE PARTIES:
(a) Each of the Parties represents and warrants that (i) it has the
authority and power to enter into this Agreement and to perform its obligations
hereunder; and (ii) the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
and are deemed to be valid, binding and enforceable obligations.
8. INDEMNIFICATION:
(a) WG shall indemnify Affiliate against (i) any award of damages and
costs made against Affiliate by a final judgment of a court of competent
jurisdiction in any such action, insofar as the same are based on a claim that
the WorldGate Platform infringes any United States patent, and (ii) any
settlements or compromises made by WG as described below. WG shall control the
defense of any such action including appeals, and all of negotiations thereof,
including the right to effect any settlement or compromise. In case the use of
the WorldGate Platform is, in any action, held to constitute such an
infringement and the use thereof is enjoined, WG shall, at its option and
expense (x) procure for Affiliate the right to continue using the WorldGate
Platform, (y) replace or modify the same so that it becomes non-infringing and
performs the same service with substantially the same quality, or (z) authorize
Affiliate to return the effected WorldGate Platform and provide Affiliate with a
refund of the purchase price, less an allowance for past use prorated based upon
the initial term of this Agreement. The above indemnity shall not apply to and
WG shall have no liability for any claim of infringement based on: (1) any use
of other than a current unaltered release of the WorldGate Platform; or (2) any
access to or use of the Subscriber Accessible Content; or (3) any combination or
use of the WorldGate Platform with non-WG hardware, software, methods, processes
or applications, or (4) any use of the WorldGate Platform other than is
authorized herein. The foregoing states the entire liability with respect to
infringement of any intellectual property rights with regard to the WorldGate
Platform.
(b) Affiliate shall indemnify WG against (i) any award of damages and
costs made against WG by a final judgment of a court of competent jurisdiction
in any such action, insofar as the same are based on a claim of infringement
arising out of: (1) any use of other than a current unaltered release of the
WorldGate Platform; or (2) any combination or use of the WorldGate Platform with
non-WG hardware or software, methods, processes, applications, or any Affiliate
sourced or required Subscriber Accessible Content, or (3) any use of the
WorldGate Platform other than is authorized herein, and (ii) any settlements or
compromises made by Affiliate as described below.
(c) In any case in which indemnification is sought hereunder:
(i) The party seeking indemnification shall promptly notify the
other party in writing upon the initiation of any claim or litigation to
which the indemnification relates;
(ii) The party seeking indemnification shall afford the other party
the opportunity to participate in, and, at the option of such other party,
to control, any compromise, settlement, litigation or other resolution or
disposition of any such claim.
(iii) The party seeking indemnification shall fully cooperate with
the reasonable requests of the other party in its participation in, and
control of, any compromise, settlement, litigation or other resolution or
disposition of any such claim.
WorldGate Communications Confidential
9. TERMINATION AND DEFAULTS:
(a) Either party shall be entitled to terminate this Agreement within one
hundred eighty (180) of the date hereof (the "trial period"), if it determines
that the Subscriber demand for the WorldGate Service is not acceptable. If
Affiliate terminates this Agreement during the trial period as aforesaid and
prior to the expiration of such trial period, but no later than 10 business days
after it's notice of termination, returns to WG the components of the Headend
Package, in working condition, reasonable wear and tear excepted, Affiliate will
receive a refund of the purchase price for such components so returned.
(b) In addition to all of its other rights and remedies at law and in
equity, either party shall be entitled at its option forthwith, upon giving
notice to the other party, to terminate this Agreement and all licenses granted
hereunder, (i) if said other party shall fail to perform any of its obligations
or undertakings required of it hereunder, or shall be in breach of any of its
warranties or representations herein contained, and shall not have cured or
remedied such failure or breach within sixty (60) days of written notification
thereof; provided, however that with respect to any failure to pay Subscriber
Access Fees such cure period shall be reduced to ten (10) business days from the
date of written notification hereunder; (ii) if a party hereunder commences a
voluntary case under Title 11 of the United States Bankruptcy Code as now and
hereafter in effect, or any successor statute, or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or a party consents
to the entry of an order for relief in an involuntary case, or to the conversion
of a voluntary case to an involuntary case, under any such law, or consents to
the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; a party makes any
assignment for the benefit of creditors; a party is unable or fails or admits in
writing of its inability or failure to pay its debts as such debts become due;
or the Board of Directors or other governing body of a party adopts any
resolution or otherwise approves authorization to act upon any of the foregoing,
such action shall be deemed a breach hereunder; or (iii) if any order, judgment
or decree is entered against decreeing the dissolution or split-up of such
party, and such order remains undischarged or unstated for a period in excess of
thirty (30) calendar days, such action shall be deemed a breach hereunder.
(c) Sections 3,(a), 3(b), 6, 8-12, and 14-16, as well as any obligation
which has accrued prior to any expiration or termination of this Agreement shall
survive such expiration or termination. All outstanding amounts owing hereunder
shall become immediately due and payable in the event of any expiration or
termination of this Agreement.
10. NON-WAIVER OF BREACH; REMEDIES CUMULATIVE; LIMITATION ON DAMAGES:
(a) A waiver by either party of any of the terms or conditions of this
Agreement shall not, in any instance, be deemed or construed to be a waiver of
such terms or conditions for the future or of any subsequent breach thereof. No
payment or acceptance thereof under this Agreement shall operate as a waiver of
any provision hereof.
(b) Except as set forth herein all remedies, rights, undertakings,
obligations and agreements contained in this Agreement shall be cumulative and
none of them shall be in limitation of any other remedy, right, undertaking,
obligation, or agreement of either party. IN NO EVENT SHALL EITHER PARTY
HEREUNDER BE LIABLE TO THE OTHER FOR SPECIAL, PUNITIVE, CONSEQUENTIAL (INCLUDING
WITHOUT LIMITATION ANY LOST PROFIT OR INVESTMENT AND THE LIKE), INDIRECT OR
INCIDENTAL DAMAGES, BY WAY OF INDEMNITY OR OTHERWISE.
(c) In no event shall WG be liable for damages in excess of the amounts
paid to WG hereunder with respect to the particular subject matter giving rise
to such damages.
WorldGate Communications Confidential
11. NOTICES: Except as herein otherwise expressly provided, all notices,
statements and other documents desired or required to be given hereunder shall
be in writing and shall be given by overnight courier service or other personal
delivery, certified mail, email or fax or other comparable immediate electronic
transmission (with a copy sent by regular U.S. mail). All notices, statements
and other documents shall be sent to:
If to WG:
Accounting statements and All other notices should be sent to:
remittances should be sent to:
WORLDGATE COMMUNICATIONS, INC. WORLDGATE COMMUNICATIONS, INC.
0000 Xxxxxxx Xxxxx, Xxxxx 000 0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attn: Accounting Services Attn: Affiliate Administration
with a copy to the General Counsel
If to Affiliate:
PRESTIGE CABLE, INC.
000 Xxx Xxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attn:
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(or at such other address as may be designated in writing by either party no
less than thirty (30) days prior to the date of transmission of the notice,
statement, etc.). Notice given by mail within the contiguous United States shall
be deemed given three (3) days after the date of mailing; Notice given by
international mail shall be deemed given ten (10) days after the date of
mailing, notice given by electronic transmission, courier service or by personal
delivery shall be deemed given upon delivery by the transmission service or
messenger.
12. GOVERNING LAW AND EXPORT RESTRICTIONS: All matters pertaining to this
Agreement (including its interpretation, validity, performance and breach), in
whatever jurisdiction action may be brought, shall be governed by the laws of
the State of Delaware (excluding its conflict of law provisions as well as any
adoption of the Convention on Contracts for the International Sale of Goods and
successors thereto). The parties hereto expressly consent and agree to submit to
the jurisdiction of any court of competent jurisdiction in the State of
Delaware, and to accept service of process outside the State of Delaware in any
matter to be submitted to any such court pursuant hereto. Wherever there is any
conflict between any provision hereof and any law or requirement with the force
of law, this Agreement shall remain valid and such provision hereof shall be
restricted to the extent, and only to the extent, necessary to bring it within
the applicable requirements, unless such restriction shall, in the opinion of
WG, have the effect of materially nullifying, or impairing, this Agreement.
Affiliate shall comply fully with all then current applicable laws and
regulations relating to the export of products and technical data including, but
not limited to, any regulations of the United States Office of Export
Administration.
13. FORCE MAJEURE: Neither party shall, in any manner whatsoever, be
liable or otherwise responsible for any delay or default in, or failure of
performance (other than the failure to make payments hereunder) resulting from
or arising out of or in connection with, any "Event of Force Majeure" and no
such
WorldGate Communications Confidential
delay, default in, or failure of performance shall constitute a breach by either
party hereunder. For purposes of this Agreement, an "Event of Force Majeure" in
respect of a party shall mean any act, cause contingency or circumstances beyond
the reasonable control of such party, including, without limitation, and to the
extent beyond the control of such other party, any governmental action,
nationalization, expropriation, confiscation, seizure, allocation, embargo,
prohibition of import or export of goods or products, regulation, order or
restriction (whether foreign, federal or state), war (whether or not declared),
civil commotion, disobedience or unrest, insurrection, public strike, riot or
revolution, lack of or shortage of, or inability to obtain, any labor,
machinery, materials, fuel, supplies or equipment from normal sources of supply,
strike, work stoppage or slowdown, lockout or other labor dispute, earthquake,
hurricane, other natural calamity, damage or destruction to plant and/or
equipment, fire or any other accident, condition, cause, contingency or
circumstance (including, without limitation, acts of God) beyond the reasonable
control of such party.
14. CONFIDENTIALITY:
(a) The recipient of any confidential information of the other hereunder
agrees to safeguard the confidentiality of such confidential information by
applying policies and procedures adequate for that purpose, including without
limitation, restricting the disclosure of this confidential information to
employees and consultants needing to know the same for the purpose of this
Agreement, who have agreed in writing to safeguard such confidential information
in a manner consistent with the provisions of this paragraph. The recipient
shall not disclose any such confidential information to any other person, firm
or corporation, or use the same except for the purpose stated hereinabove, and
shall exercise at least the same degree of care to guard against disclosure or
unauthorized use of such confidential information, as the recipient employs with
respect to its own confidential information, but in no event less than
reasonable care.
(b) The recipient shall have no obligation of confidentiality hereunder
with respect to any information which:
(i) is already properly known to the recipient other than as a
result of a prior confidential disclosure by the disclosing Party;
(ii) is or becomes publicly known otherwise than by the recipient's
(or someone receiving the information from recipient) fault or breach of
this Agreement;
(iii) is rightfully received by the recipient without restriction
from a third party who is not under an obligation of confidentiality,
directly or indirectly, to the disclosing Party;
(iv) is independently developed by the recipient without benefit of
the confidential information received hereunder;
(v) is approved for release in writing by the disclosing Party; or
(vi) is required to be disclosed by the recipient pursuant to
judicial or regulatory action, provided that the disclosing party is
promptly notified at the time such action is initiated and the recipient
fully cooperates with the disclosing Party in seeking continued
confidential treatment of such information to the extent possible.
(c) Except as may be reasonably required by applicable law, regulation or
court order, the Parties agree that neither of them shall publicly divulge or
announce, or in any manner disclose to any third party, other than its attorneys
and accountants, any of the specific terms and conditions of this Agreement,
including without limitation the Subscriber Access Fees payable hereunder, and
the parties further warrant and agree that none of their officers, directors or
employees will do so.
WorldGate Communications Confidential
15. PROCEDURE PRIOR TO LITIGATION: Prior to initiating any litigation with
respect to any controversy, claim or dispute arising hereunder or related
hereto, but excluding any claim arising under Sections 3 or 14 of this Agreement
(a "Dispute") a Party must first notify the other Party and request in writing
that such Dispute be submitted to an executive committee consisting of one
senior ranking executive named by each of the Parties for such purpose. Such
named executive shall have the authority and be capable of making binding
decisions on behalf of such Party with respect to such Dispute. Within five (5)
business days following the receipt of such notice (or such other period as may
be agreed by the Parties) each Party shall have named its executive committee
participant, and within ten (10) business days following the receipt of such
notice (or such other period as may be agreed by the Parties) the executive
committee shall meet to discuss the Dispute. If the executive committee is not
able to resolve the Dispute within twenty (20) business days following the
receipt of such notice (or such other period as may be agreed by the Parties),
then either Party may proceed with the initiation of such litigation as may be
appropriate.
16. MISCELLANEOUS; ENTIRE UNDERSTANDING: The titles of the paragraphs of
this Agreement are for convenience only and shall not in any way affect the
interpretation of this Agreement. This Agreement does not in any way create the
relationship of franchise, joint venture, partnership or agency between WG and
Affiliate, and each shall remain an independent contractor, and as such shall
not act or represent itself, directly or by implication, as agent for the other
or assume or create any obligation of or in the name of the other. This
Agreement will inure to the benefit of and be binding upon the Parties and their
respective representatives, and permitted successors and assignees. This
Agreement, including the Exhibits identified herein, sets forth the entire
understanding of the parties with respect to the subject matter hereof, and all
oral agreements and all prior written agreements with respect to such subject
matter have been merged herein. No representations or warranties have been made
other than those expressly provided for herein. This Agreement may not be
modified, except by a written instrument signed by an authorized representative
of the Parties, and this provision may not be waived except by written
instrument signed by an officer of the Parties. This Agreement may be executed
in any number of counterparts, with each such counterpart deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument. In the event this agreement is translated into any foreign language
counterpart, the English language counterpart shall remain controlling. This
Agreement shall be presumed to have been negotiated and drafted by both Parties
for the purpose of construing any ambiguities hereunder.
IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AGREEMENT TO BE SIGNED AND
ACCEPTED BY THEIR DULY AUTHORIZED REPRESENTATIVES AS OF THE DAY AND YEAR FIRST
WRITTEN ABOVE.
Affiliate: PRESTIGE CABLE, INC. WG
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxx X. Xxxxxxxx
Title: Vice President Title: V.P. Business Development
Date: 11/30/98 Date: 12/8/98
Tel.: 000-000-0000 Tel.: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
WorldGate Communications Confidential
EXHIBIT A
TELEVISION DISTRIBUTION SYSTEMS
SYSTEM NAME LAUNCH DATE APPROX. # OF SUBSCRIBERS
----------- ----------- ------------------------
Mooresville, NC 12/15/98 34,000
Cartersville, GA 5/1/99 50,000
Westminster, MA 9/1/99 28,000
Fredricksberg, VA 7/1/99 42,000
Each System identified above must include at least the following minimum
facilities (to be supplemented as Subscriber base grows):
(a) dedicated Internet Access Link - T1 or equivalent with comparable data
rates
(b) Cisco 2501 Router with IP Software (or approved equivalent)
(c) Kentrox D-Serv CSU/DSU (or approved equivalent)
EXHIBIT B
WORLDGATE PLATFORM
PLATFORM COMPONENTS AND PRICING:
Set forth below are standard components of the WorldGate Platform typically used
for a System and the price for the same as of the effective date set forth
below. Such prices are FOB WG's factory, and are valid for a period of ninety
(90) days from this effective date after which time they are subject to change
by WG to reflect current prices.
ITEM FIRST UNIT IN A HEADEND OTHER UNITS - SAME HEADEND
---- ----------------------- --------------------------
Headend Package (analog) ## ##
Large System Headend Package (analog) ##
Channel HyperLinking Server ##
WorldGate Keyboard* ## ##
* Non-U.S. language keyboards will be quoted separately.
Custom configuration options are available and will be quoted separately
based upon the results of a site survey and expected Subscriber base. The
purchase price for components of the WorldGate Platform does not include
non-routine and/or non-U.S. surveys and installation which are available on a
time and material basis at WG's customary rates (international locations will
also involve travel and per diem charges.) The purchase price also does not
include any improvements and/or modifications to Affiliate's Systems. In the
event that WG is not able to deliver auto leveling functionality between the
applicable components of the WorldGate Platform and the SA8610 settop cable
box, WG further agrees to reimburse Affiliate, in an amount not to exceed
[information redacted] ## per WorldGate enabled set top box, for Affiliate's
documented incremental settop cable box cost of the WorldGate enabled 8610
settop cable box over the non-WorldGate enabled 8610, for up to an aggregate
of 4000 of such WorldGate enabled settop cable boxes as have been acquired by
Affiliate. The initial Headend Package for Mooresville has already been
delivered and invoiced for a purchase price of [information redacted] ##. WG
will continue to honor the reduced priced for this initial delivery not
withstanding the above.
PROGRAM LICENSE:
Notwithstanding the use of the term "purchase" herein, or any other documents
providing for the acquisition of such WorldGate Platform by Affiliate, the
WorldGate Platform includes certain WorldGate and third party software,
microcode and documentation, whether stored in electronic (including firmware),
magnetic, optical or other media (collectively Programs) for which title to and
all proprietary rights in are reserved to WG and its suppliers. All access to
------------------------
## THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES & EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT.
WorldGate Communications Confidential
and use of such Programs is subject to the terms and conditions of WG's License
attached hereto and incorporated herein as Exhibit B-1.
LIMITED PRODUCT WARRANTY:
WG hereby warrants that as installed hereunder and for a period of three months
thereafter ( but not more than four months after delivery if there is a delay
between delivery and installation other than as may result from the actions
and/or omissions of WG) such WorldGate Platform components will perform under
normal use and service substantially in the manner specified in the applicable
technical specification as published by WG prior to the execution of this
Agreement, and that for this period the hardware components of the WorldGate
Platform will be free from defects in materials and workmanship. This warranty
shall not apply to any items subjected to accident, misuse, neglect,
mishandling, unsuitable physical or operating environments or any installation,
testing, repair, adjustment or alteration by anyone other than WG or its
authorized vendors, or any use of non-approved components in connection with the
WorldGate Platform. WG's warranty hereunder extends to Affiliate only, and to no
other person or entity. This warranty shall not be enlarged or otherwise
affected by, and no obligation or liability shall arise hereunder by WG's
rendering of technical advice, help line support or service in connection with
the products furnished hereunder. Any claims arising out of the aforesaid
warranty must be submitted to, and the affected components must be returned or
otherwise made available to WG in accordance with its published procedures,
during the specified warranty period. Subject to the preceding conditions, WG
will promptly examine such WorldGate Platform components and repair or replace
any such components which are defective with respect to the above warranty. Any
required service, repair or replacement (and the costs and expenses associated
therewith) which are not covered by the above warranty will be the
responsibility of Affiliate unless covered by an applicable WG service contract.
THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING WITHOUT LIMITATION, ANY IMPLIED OR STATUTORY WARRANTY OF
NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ANY
WARRANTY HEREUNDER, EXPRESS OR OTHERWISE, IS LIMITED TO THE WARRANTY TERM AND
CONDITIONS AS SET FORTH ABOVE.
AFFILIATE TECHNICAL SUPPORT:
WG will at no additional charge to Affiliate provide technical support to
Affiliate's customer service and engineering staff, 7 days per week, 24 hours
per day, with such support to be provided by telephone, facsimile and/or the
Internet. Except as is provided by WG pursuant to the terms and conditions of
any applicable service contract or WG's written warranty herein, any required
travel from WG's facilities or support in addition to that provided by
telephone, facsimile or Internet hereunder will require payment for time and
materials at WG's customary rates, as well as reimbursement for travel and per
diem charges.
ON SITE TRAINING:
Prior to the initial launch of the WorldGate Service on Affiliate's Systems WG
will conduct one on site customer service training program of up to 3 days in
duration for domestic U.S. installations. Training for non-U.S. installations as
well as additional training will be available on a time and materials basis at
WG's customary rates, as well as reimbursement for travel, lodging and other per
diem charges.
PLANT SPARES:
WG and Affiliate will cooperate to formulate and implement a recommended program
for spare parts inventory, local maintenance strategy and emergency response.
SUBSCRIBER HELP LINE:
WG shall make available to WorldGate Subscribers for domestic US locations, a
toll-based help line to assist WorldGate service Subscribers with questions
relating to their WorldGate Service. Affiliate shall be responsible for all
other Subscriber support. It is anticipated that initial Subscriber support will
be provided by Affiliate with WG providing second level toll-based to
Subscribers through the above telephone help line.
WorldGate Communications Confidential
EXHIBIT B-1
LICENSE AGREEMENT TERMS AND CONDITIONS
These terms and conditions provide for the licensing by WorldGate (hereinafter
Licensor) to Licensee of WorldGate(SM) and third party software, microcode and
documentation, whether stored in electronic (including firmware), magnetic,
optical, printed or other media (collectively Programs) for which title to and
all proprietary rights in are reserved to Licensor and its suppliers. These
Programs are being furnished to Licensee as part of a commercial relationship
between Licensee and Licensor for the sole purpose (the "Purpose") of enabling
Licensee's activities assisting Licensor with the promotion, distribution and
use of the WorldGate(SM) Internet access service (the "WorldGate Service") to
its subscribers (the "Customers) as reasonably required for and in accordance
with such relationship.
1. GRANT OF LIMITED LICENSE: Licensor hereby grants to Licensee
(hereinafter Licensee) and Licensee hereby accepts a personal, nonexclusive
license solely to use the Programs on the terms and conditions set forth herein.
Except as specifically provided herein, no interest, right or license, express
or implied, is granted in or to the Programs, and all such other interests,
rights and licenses are hereby reserved.
2. OWNERSHIP RIGHTS: Any reference to sale or purchase not withstanding,
title to the Programs and all copies and derivatives thereof, in whole or in
part, shall be and remain in Licensor and its suppliers, and no title to or
ownership of the Programs or any derivative thereof is conveyed or otherwise
transferred to the Licensee. Licensee acknowledges that the Programs constitute
confidential and proprietary information and trade secrets of Licensor and its
suppliers, whether or not the Programs, or any portion thereof, are or may be
copyrighted or copyrightable and/or patented or patentable, and that the
Programs are being made available to Licensee only on the basis of a
confidential and proprietary relationship between Licensee and Licensor
established as part of the aforesaid commercial relationship for the above
Purpose.
3. RESTRICTION ON TRANSFER: Licensee shall not sell, assign, sub-license or
otherwise transfer the Programs, or any portion thereof to any third party.
4. RESTRICTION ON USE, DISASSEMBLY AND REVERSE ENGINEERING: Licensee may
use the Programs solely and exclusively at Licensee's offices as identified by
Licensee as the ship to location for the Programs and the computer(s) and
associated peripherals (the "WorldGate Platform") furnished by Licensor to
Licensee, as and when provided by Licensor to Licensee. Licensee shall use the
Programs only as part of the operation of the WorldGate Platform to provide the
WorldGate Service to the Customers, and then only in connection with Licensee's
immediate internal operations as reasonably required in accordance with, and in
furtherance of the Purpose set forth above, and shall not otherwise use nor
offer or supply the use of the Programs to others under any circumstance.
Licensee shall not, either directly or through any third party, de-compile,
disassemble or otherwise reverse engineer the Programs.
5. RESTRICTION ON COPYING AND ALTERATION: Licensee shall make no copies
of, alterations to, or other derivatives of the Programs, or any part thereof,
or remove any proprietary and/or copyright legends or restrictions which are in
the Programs originally supplied to Licensee.
6. RESTRICTION ON DISCLOSURE: Licensee shall store the Programs in a
secure manner and make the Programs available only to Licensee's employees who
require access to the same for the above Purpose and who agree to abide by these
terms. Except as expressly permitted herein, Licensee shall not disclose or
otherwise make available the Programs, or any portion thereof, to any third
party or to any other employee or agent of Licensee. Licensee shall take all
reasonable steps necessary to ensure the Programs, and any and all portions,
copies and derivatives thereof, are not disclosed or otherwise made available by
Licensee (or employees or agents of Licensee) to any third party except as
aforesaid.
7. TERM, TERMINATION AND REMEDIES: The term of this License Agreement and
the license granted hereunder shall terminate on the earlier of: (a) the
termination or expiration of the aforesaid commercial relationship with
Licensor or the failure of Licensee to comply with any of the terms and
provisions hereof or of any agreement providing for such relationship, which
failure continues for a period of five (5) days after written notice thereof,
or (b) when Licensee ceases to operate, de-installs or otherwise no longer
requires access to the WorldGate Service or Platform for such Purpose. Upon
termination of this License Agreement all rights to use the Programs shall
terminate and Licensee shall immediately cease all use of the Programs and
return the Programs and all copies thereof, in whole or in part, to Licensor
(or upon Licensor's written request destroy the same,) and furnish Licensor a
written statement certifying that the original and all such copies of the
Programs and any related material received from Licensor or made in
connection with such license have been returned to Licensor or destroyed
pursuant to Licensor's written request. Licensor reserves all rights and
remedies, whether provided by contract, at law, self-help, in equity and/or
otherwise, to enforce it rights under this License Agreement. Licensee
acknowledges and agrees that any breach or threatened breach of this License
Agreement shall cause Licensor irreparable injury for which there may be no
adequate remedy at law, and that in addition to any other remedies available,
Licensor shall be entitled to obtain injunctive relief as well as actual
damages.
WorldGate Communications Confidential
EXHIBIT C
MARKETING AND PROMOTION OF THE WORLDGATE SERVICE
The Parties will provide, throughout the term of this Agreement, at least the
following identified activities to market and promote the WorldGate Service:
WG WILL PROVIDE:
- joint press release prior to 12/1/99 of execution of Affiliate Agreement
and Affiliate's system-wide deployment
- three times yearly direct mail piece; (WG will supply creative and provide
both printing and mail processing for purchase at WG's cost).
- camera-ready ad slicks for newspaper and cable guide promotion.
- creative for xxxx inserts and Point of Purchase displays (for purchase at
WG's cost).
- four: 30/25:5 second video spots for use as commercials, distributed
annually.
- WG User Guide available in electronic format.
- one (1) "Leave Behind" instructional video for subscribers and one (1)
printed generic WG User Guide can be purchased at WG's cost.
- training for installers and all customer contact personnel.
AFFILIATE WILL PROVIDE:
- joint press release prior to 12/1/99 of execution of Affiliate Agreement
and Affiliate's system-wide deployment
- at Affiliate's discretion, send direct mail at least three times per year
to non-WG households in all WG serviceable areas. (Affiliate will provide
mailing lists, address labeling, out-bound postage and return fulfillment
costs.)
- at Affiliate's discretion, run a minimum of 1000,: 30-second spots on
cable system ad avails with WG approved commercials per month. Ad
insertion to take place on ad supported channels as agreed between
parties, to be run at times between 6:00 AM to 12:00 PM (local time).
- at Affiliate's discretion, cross-channel affidavits supporting ad
insertion (time and channel) to be submitted to WG quarterly.
- at Affiliate's discretion, placement of WG approved :30-second commercials
(or other WG provided promotional pieces) on Affiliate's PPV promotion
channel(s), for regular rotation for two-week intervals, monthly.
- at Affiliate's discretion, WG xxxx insert or envelope advertisement in or
on cable subscriber monthly billing statement, three times per annum.
- at Affiliate's discretion, reasonable use of local origination text-based
channels (if available) to promote WG.
- at Affiliate's discretion, train all customer contact representatives on
all WG Services.
- at Affiliate's discretion, reasonable promotion of WorldGate Service on
Affiliate's web home page
Effective Date: Affiliate Initials: WG Initials:
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WorldGate Communications Confidential
EXHIBIT D
SUBSCRIBER ACCESS FEES
SERVICE ACCESS FEES:
The following WorldGate Service Access Fees are payable by Affiliate to WG on a
monthly basis for each Subscriber having access to the WorldGate Service during
such month (prorated based upon a 30 day month for Subscribers having access to
the WorldGate Service for less than a full calendar month). Various penetration
benchmarks are also set forth which, if achieved, will result in an adjustment
in the particular amount payable for such Service Access Fees. Affiliate's
performance with respect to these benchmarks and the resultant amounts payable
hereunder shall be determined on an aggregate System wide basis based on the
results of all Systems hereunder. Any adjustment in the amount payable for such
Access Fees shall apply only for prospective periods after the benchmarks have
been achieved, and then only after written notice has been provided by Affiliate
to WG providing the details as to such achievement.
For purposes of determining the applicable rate for the Service Access Fees
payable hereunder for the Systems (x) the number of "WorldGate Subscribers" for
any month shall mean the average number of actual Subscribers to the WorldGate
Service for that month and shall include only the Subscribers being invoiced for
and paying the standard retail charge which Affiliate invoices its customers for
the WorldGate Service (Service Access Fees are, however, payable by Affiliate to
WG for all Subscribers receiving access to the WorldGate Service irrespective of
whether such standard retail charge or any payment is made by such Subscribers
to Affiliate), and (y) the number of "WorldGate Capable Customers for any month
shall mean the average number of Affiliate's actual customers (including only
those customers being invoiced for and paying the standard retail charge which
Affiliate invoices for its television programming distribution service) which
during the month had sufficient System architecture and Head-end Package
components of the WorldGate Platform installed and operational to permit such
customer to have become a WorldGate Subscriber, had the customer so chosen, and
(z) the "Penetration for any month shall mean the number of WorldGate
Subscribers divided by the number of WorldGate Capable Customers as determined
above. Monthly averages hereunder shall be determined dividing by two the sum of
the applicable number on the first and last business days of the month.
In addition to the Service Access Fees as set forth below Affiliate shall pay to
WG as Subscriber Access Fees in the event the amount which Affiliate invoices
and/or otherwise charges its customers as part Affiliate's standard monthly
retail price for the WorldGate Service exceeds U.S.$14.95 for an unmetered
service option, an amount equal to thirty-five (35%) percent of such excess.
WORLDGATE PLUS SERVICE:
FOR AFFILIATES OFFERING THE WORLDGATE SERVICE AS AN UNLIMITED USAGE SERVICE ON
AN A' LA CARTE BASIS (INCLUDES AN ALLOTTED USAGE TIME PER SUBSCRIBER PER MONTH
WHICH IS NOT LIMITED IN NUMBER OF HOURS).
Monthly A' La Carte Service Access Fees for Unlimited Service
WorldGate Capable Customers ## ## ##
System-wide ## ## ##
CHANNEL HYPERLINKING-SM- AND OTHER REVENUE SHARING OPPORTUNITIES:
The parties anticipate that the Subscriber Accessible Content will include
opportunities to generate revenue from third parties through Channel
HyperLinking, advertising, commodity buying/selling lead generation and similar
services which may be enabled by the WorldGate Platform. The Parties further
recognize that such opportunities may require commitments with advertising
agencies and other third parties as well as administrative, accounting, and
other services and associated costs, fees, and expenses in order to permit such
revenue to be generated. The Parties will
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## THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES & EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT.
work together to maximize such opportunities. Any net revenue which is generated
as a result of such services as the Parties agree to make available to
Subscribers as part of the WorldGate Service hereunder will be evenly shared by
WG and Affiliate, after payment of such associated costs, fees, and expenses,
and subject to any required commitments as aforesaid.
WorldGate Communications Confidential
