Exhibit 10.12
WORLDGATE AFFILIATION AGREEMENT
THIS AGREEMENT DATED SEPTEMBER 25, 1998, IS BETWEEN, TVCABLE S.A. WITH ITS
PRINCIPAL PLACE OF BUSINESS AT BOSMEDIANO CASA 5 Y XXXXXXXX XXXXXX, QUITO,
ECUADOR, (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"). THE PARTIES ARE ENTERING
INTO THIS AGREEMENT CONTINGENT UPON THE SUCCESSFUL COMPLETION OF THE WORLDGATE
SERVICE TEST AS SET FORTH IN THE WORLDGATE SERVICE INITIAL DEPLOYMENT PROPOSAL,
ACCEPTED BY AFFILIATE AS OF 5/29/98 WHICH IS INCORPORATED HEREIN BY REFERENCE.
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)
for one or more geographical service areas, as from time to time are
identified in Exhibit A.
(b) "PROVIDER(S)" means one or more third parties providing content
for Subscriber access on or as part of the WorldGate-SM- Service.
(c) "SUBSCRIBER" means a person or entity gaining access to the
WorldGate-SM- Service as part of Affiliate's System.
(d) "SUBSCRIBER ACCESSIBLE CONTENT" means the programs, displays,
data, information, and other content (including without limitation,
the Internet) which, from time to time, has been licensed or is
otherwise provided by WG and others for access by Subscribers on or as
part of the WorldGate-SM- Service.
(e) "SUBSCRIBER TRANSACTION" means any instance whereby a Subscriber
accesses or is authorized to access the WorldGate Service.
(f) "TERM" means the term of this Agreement which shall commence on
the date hereof, and shall terminate seven (7) years from the date set
forth above, except if renewed or terminated earlier as provided
herein.
(g) "WORLDGATE PLATFORM" means the hardware and software components to
be supplied by WG to Affiliate and used by Affiliate in connection
with Affiliate's System to provide Subscriber access to the WorldGate
Service hereunder.
(h) "WORLDGATE SERVICE" means an interactive Internet access service
which utilizes WG's proprietary 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
WorldGate Communications, Inc. CONFIDENTIAL
of the System's current allocated spectrum and/or a suitable
phone-network based return facility for transmitting upstream
communication.
2. AUTHORIZATION OF RIGHTS, WORLDGATE PLATFORMS AND SYSTEM:
(a) WG hereby authorizes Affiliate, during the Term hereof, to provide
to Subscribers access to and use of the WorldGate Service, via the
WorldGate Platforms in connection with Affiliate's System, in
accordance with the terms and conditions of this Agreement.
(b) From time to time during the term hereof WG shall provide to
Affiliate and Affiliate shall acquire by purchase, lease or such other
acquisition transaction as may be agreed by the Parties, certain
systems and the components of the WorldGate Platform as are further
identified in Exhibit B. The terms and conditions of such acquisition
as well as the associated installation, maintenance and warranty of
the WorldGate Platforms are also set forth in Exhibit B.
(c) WG shall make available to Affiliate such Subscriber Accessible
Content as may, from time to time, be determined by the Parties.
Affiliate, however, acknowledges that the providers of Subscriber
Accessible Content may, from time to time, and for any reason make
additions to, deletions from and/or otherwise modify Subscriber
Accessible Content, and accordingly, WG also reserves such right.
Affiliate further acknowledges that such Subscriber Accessible
Content, including without limitation, the WWW, may include materials
and information of 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.
(d) Affiliate may request modifications of or additions to certain
user interface screens or other aspects of the WorldGate Platform
and/or the Subscriber Accessible Content. WG agrees to work with
Affiliate to accommodate such requests to the extent that WG agrees
such modifications are viable and will enhance the WorldGate Service.
(e) Affiliate shall provide a suitable System and facilities
associated therewith as further identified in Exhibit A. Affiliate
may, from time to time, add additional Systems, in which event
Affiliate shall use commercially reasonable efforts to provide WG with
at least ninety (90) days advance written notice of any such proposed
additions to the System. Upon the agreement of the Parties 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. Further, Affiliate may, from time to time, make changes to
the Systems and facilities comprising the same, and/or WG may make
changes to the WG Platform. In the event such changes materially
affect the performance of the WorldGate Service, the Party making the
changes shall use all reasonable efforts to provide the other Party
with as much advance notice of the same as is reasonably possible. The
installation, maintenance and support of such Systems and associated
facilities shall be the sole responsibility of Affiliate and its
suppliers. Affiliate acknowledges and agrees that WG and its
contractors will require both physical and remote access to the System
and the WorldGate Platform connected thereto to perform their
obligations hereunder. Affiliate
WorldGate Communications, Inc. CONFIDENTIAL
shall provide WG and its contractors reasonable physical and remote
(via modem, Internet and other electronic means) access to such
Systems (including the facilities and technical personnel associated
therewith) and to the WorldGate Platforms connected or to be connected
thereto, to afford any required installation, support, service,
reporting and other duties to be performed by WG hereunder.
3. RESERVATION OF RIGHTS:
(a) Affiliate agrees that it is the essence of this Agreement that:
(i) the WorldGate Platform shall not be modified by Affiliate in any
manner; (ii) the WorldGate Platform shall not be utilized by Affiliate
to provide services other than the WorldGate Service; and (iii)
Affiliate shall not authorize any other party to do any of the acts
forbidden herein (collectively, the "Prohibited Acts"), without the
specific written consent of WG and/or its content providers as may be
required, or except as otherwise set forth herein.
(b) Affiliate shall immediately notify WG upon the occurrence or
likely occurrence of any Prohibited Acts of which it becomes aware.
(c) All licenses, rights and interest in, to and with respect to the
WorldGate Platform, 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 Affiliate's Subscribers, shall be and are expressly
and entirely reserved by WG and the applicable Content Providers. The
licenses granted to Affiliate and Affiliate's Subscribers hereunder do
not include any right to sublicense any third party, in whole or in
part.
4. MARKETING AND PROMOTION OF THE WORLDGATE SERVICE: The Parties agree to
diligently market and promote the WorldGate Service to all of
Affiliate's customers which are or become part of Affiliate's
System(s). In particular and without limitation the Parties agree to
provide such marketing and promotional services as are further
identified in Exhibit C. The Parties also recognize that the WorldGate
brand is a substantial asset of WG and that use of such brand as well
as any other applicable WG trademarks and service marks is limited to
promotion of the WG service in a manner consistent with that typically
used with other quality and valued trademarks and service marks. The
XX xxxxx shall be prominently displayed in all consumer communications
promoting the WG services such as, but not limited to, marketing
materials, advertisements, direct mail pieces, xxxx stuffers, price
lists, etc. All marketing materials and TV spots developed by
Affiliate promoting the WG services, and all other uses of the XX
xxxxx shall be approved by WG in writing prior to initial
dissemination. The XX xxxxx may be promoted with Affiliate's xxxx with
WG's prior written approval.
WorldGate Communications, Inc. CONFIDENTIAL
5. PAYMENTS, ACCESS FEES AND TAXES:
(a) As consideration for the rights granted and services performed
hereunder, Affiliate shall pay to WG Subscriber Access Fees for the
WorldGate Service, as more fully set forth in Exhibit D hereunder. The
Parties acknowledge that changes may be required in such Subscriber
Access Fees as a result of material changes in the services and
systems offered hereunder (including without limitation the addition
of optional services, etc.) or in the event of changes in the
regulatory environment governing such services and systems which
affect the cost or such services and systems to WG. In such event the
Parties agree to negotiate in good faith any resulting changes to the
Subscriber Access Fees hereunder.
(b) 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 Subscribers with
respect to access to the WorldGate Service and/or any Subscriber
Transactions.
(c) All payments and fees due to WG hereunder, including without
limitation the Subscriber Access Fee, are net of all franchise fees
and taxes (including interest and penalties on any such amounts) now
or hereafter imposed or based upon the licensing, rental, purchase,
delivery, exhibition, possession, or use of the WG Platform or the
access to any Subscriber Accessible Content hereunder, but excluding
however any taxes assessed upon any of WG's income or personal
property (collectively "Taxes"). Affiliate shall pay and hold WG and
Content Providers forever harmless from any liability associated with
such Taxes.
(d) Except as set forth in sub-paragraph (a), above, all payments
hereunder, including without limitation the purchase price of the
components of the WorldGate Platform are due within thirty (30) days
of the receipt of invoice for the same. Interest shall accrue on all
amounts not paid when due at a rate equal to the lesser of twelve
(12%) percent per annum or any maximum rate imposed under applicable
laws and regulations. Payments shall not be deferred or subjected to
setoff by Affiliate. Payments may not be suspended and shall continue
during the pendency of any dispute hereunder. All payments to be made
to WG shall be in the currency of the United States unless otherwise
agreed in writing by the parties.
6. STATEMENTS AND REPORTS: To afford determination and/or verification of
the Subscriber Access Fees due hereunder WG shall provide to Affiliate
an accounting statement and report within ten (10) days after the end
of each calendar month in which the WorldGate Service is distributed
hereunder. Said statement shall include at least the following
information to the extent applicable: the number of Subscribers, the
type of Subscriber accounts and the number of such type of accounts,
the Subscriber Transaction time, and the total amount due for all
Subscriber Transactions and Subscriber access to the WorldGate
Services hereunder. Such information shall be provided electronically
by access to computer terminals associated with the WorldGate Platform
and/or in connection with a third party standard billing interface.
Affiliate acknowledges that WG requires access to records and
information relating to
WorldGate Communications, Inc. CONFIDENTIAL
Subscribers in order to provide such statements and reports and hereby
consents to the same.
7. AUDIT: Affiliate and WG shall keep accurate and complete books and
records of Subscriber Transactions and accounts hereunder, and any
required adjustments thereto. Subject to the confidentiality
provisions contained herein Affiliate and WG may, not more than once
during each calendar year and upon at least thirty days prior written
notice, at their expense and during regular business hours, have the
right to audit all such books and records of the other pertaining to
the Subscriber Transactions occurring over Affiliate's System. Such
audits shall be conducted by a nationally 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 an office or adequate space
in which to facilitate any audit of such books and/or records. If an
audit or checking reveals a discrepancy in the Access Fee 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.
8. 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.
9. 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 WG Platform infringes any United States
patent, and (ii) any settlements or compromises approved 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, Subscriber Accessible Content or data, or
(4) any use of the WorldGate
WorldGate Communications, Inc. CONFIDENTIAL
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,
software, Subscriber Accessible Content or data, or (3) any use of the
WorldGate Platform other than is authorized herein, and (ii) any
settlements or compromises approved 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.
10. SECURITY: Affiliate shall employ such security systems and procedures
as may be reasonable and commercially feasible to prevent theft,
pirating or other unauthorized access to the WorldGate Service as it
is distributed over Affiliate's System.
11. RENEWAL, TERMINATION AND DEFAULTS:
(a) Upon the expiration of the initial Term hereunder this Agreement
shall be automatically renewed for additional successive two (2) year
periods thereafter unless terminated by either Party upon ninety (90)
days written notice prior to the expiration of such initial Term and
any renewal period. The Subscriber Access Fees payable during any
renewal period shall be renegotiated.
(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, (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; (ii) if a party hereunder
WorldGate Communications, Inc. CONFIDENTIAL
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) WG may terminate this Agreement upon at least one hundred twenty
(120) days prior notice in the event the Parties cannot agree upon any
required changes to the Fees in accordance with Paragraph 5(a)
hereunder.
(d) Sections 1,3,7-10, 11(c), 14,15,16, and 18-20, 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 Access Fees and other amounts owing to WG hereunder shall
become immediately due and payable in the event of any expiration or
termination of this Agreement.
12. ASSIGNMENT: WorldGate shall have the right to assign its rights and
obligations hereunder to a third party which is acquiring all or
substantially all of its assets, or any company with which it may
merge or consolidate. Except as expressly set forth in the prior
sentence neither party hereunder shall have the right to assign,
transfer or hypothecate its rights and obligations hereunder, without
the other's prior written approval. Any other purported assignment of
this Agreement, shall be deemed null and void.
13. HEADINGS, RELATIONSHIP OF PARTIES: 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.
14. NON-WAIVER OF BREACH; REMEDIES CUMULATIVE:
(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
WorldGate Communications, Inc. CONFIDENTIAL
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, by way of
indemnity or otherwise, in excess of the amounts paid to WG
hereunder with respect to the particular subject matter giving
rise to such damages.
15. 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 personal delivery,
certified mail, email (with a copy sent by regular US mail) or fax
(with a copy sent by regular US 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
If to Affiliate:
TVCABLE S.A.
Bosmediano Casa 5 y Xxxxxxxx Xxxxxx
Xxxxxxxx 00-00-0000
Xxxxx, Xxxxxxx
(or at such other address as may be designated in writing by either
party no less than thirty (30) days prior to the date of transmission
of the notice, statement, etc.). Notice given by domestic mail 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 fax shall be deemed given at the time
of dispatch; notice given by email or personal delivery shall be
deemed given upon delivery by the email service or messenger.
WorldGate Communications, Inc. CONFIDENTIAL
16. GOVERNING LAW AND EXPORT RESTRICTIONS:
(a) All matters pertaining to this Agreement (including its
interpretation, validity, performance and breach), in whatever
jurisdiction action may be brought, shall be governed by the laws of
the State of Delaware (excluding its conflict of law provisions) . The
parties hereto expressly consent and agree to submit to the
jurisdiction of any court of competent jurisdiction in the State of
Delaware, and to accept service of process outside the State of
Delaware in any matter to be submitted to any such court pursuant
hereto.
(b) 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.
(c) 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.
17. FORCE MAJEURE: Neither party shall, in any manner whatsoever, be
liable or otherwise responsible for any delay or default in, or
failure of performance (other than the failure to make payments
hereunder) resulting from or arising out of or in connection with, any
"Event of Force Majeure" and no such delay, default in, or failure of
performance shall constitute a breach by either party hereunder. For
purposes of this Agreement, an "Event of Force Majeure" in respect of
a party shall mean any act, cause contingency or circumstances beyond
the 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, fire, flood, drought, other natural
calamity, damage or destruction to plant and/or equipment, or any
other accident, condition, cause, contingency or circumstance
(including, without limitation, acts of God) within or without the
United States beyond the control of such party.
WorldGate Communications, Inc. CONFIDENTIAL
18. 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.
Information to be disclosed confidentially hereunder shall be fixed in
a tangible medium of expression that is marked "Proprietary" or
"Confidential", or if disclosed in other than a tangible medium of
expression, indicated by the disclosing Party as being "Proprietary"
or "Confidential" at the time of disclosure and within thirty (30)
days thereafter summarized by the disclosing Party in a writing to the
recipient, in which writing the confidential information is identified
as "Proprietary" or "Confidential". A tangible medium of expression
shall be deemed to include, by way of example, memoranda, written
descriptions, drawings, photographs, models, prototypes, tapes, disks
and circuitry.
(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 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, accountants, parents, and partners, 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, Inc. CONFIDENTIAL
19. 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, 10
or 18 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.
20. ENTIRE UNDERSTANDING: This Agreement, including the Exhibits
identified herein, sets forth the entire understanding of the parties
with respect to the subject matter hereof, and all prior concurrent
oral agreements or 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. 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.
TVCable S.A.: WorldGate Communications, Inc.
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx Xxxxxxxx Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer Title: Vice President & General Manager
Date: September 25, 1998 Date: September 25, 1998
Tel.: (593-2) 000-000 Xel.: 000-000-0000
Fax: (593-2) 000-000 Xax: 000-000-0000
WorldGate Communications, Inc. CONFIDENTIAL
EXHIBIT A
TELEVISION DISTRIBUTION SYSTEMS
SYSTEM NAME MAILING ADDRESS BASIC SUBSCRIBERS
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TVCable S.A. Apartado 17-11-6499 to be advised
Quito Ecuador
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Each System identified above must include at least the following minimum
facilities (to be supplemented as WG subscriber base grows):
(a) dedicated T-1/Internet Access Link
(b) Cisco 2501 Router with IP Software (or approved equivalent) (c)
Kentrox D-Serv CSU/DSU (or approved equivalent)
Effective Date: September 25, 1998 Affiliate Initials:/s/ unintelligible WG Initials:___________
WorldGate Communications, Inc. CONFIDENTIAL
EXHIBIT B
WORLDGATE PLATFORM
PLATFORM COMPONENTS AND PRICING:
Set forth below are the components of the WorldGate Platform and Affiliate's
price for the same as of the effective date set forth below. Such prices are FOB
WG's factory, and are valid for a period of one-year from this effective date
after which time they are subject to change by WG to reflect current market
conditions.
ITEM UNIT PRICE
---- ----------
Headend Package (analog)* ##
Large System Headend Package (analog)* ##
Channel Hyperlinking Server* ##
WorldGate Keyboard** ##
* 5% discount on second Headend Package
** Non-U.S. language keyboards will be quoted separately.
Affiliate will require and shall purchase hereunder one or more Headend Packages
and WorldGate Keyboards, as required, for each System identified on Exhibit A of
this Agreement. Custom configuration options are available and will be quoted
separately if required based upon expected subscriber base. The above fees do
not include site surveys and installation, which are available on a time and
material basis at WG's customary rates (including any applicable travel and per
diem charges.) The above fees do not include any improvements and/or
modifications to Affiliate's Systems. Notwithstanding the use of the term
"purchase" herein, such WorldGate Platform as acquired hereunder includes
certain WorldGate and third party software, microcode and documentation, whether
stored in electronic (including firmware), magnetic, optical or other media
(collectively Programs) for which title to and all proprietary rights in are
reserved to WG and its suppliers. All access to and use of such Programs is
subject to the terms and conditions of WG's Software License attached hereto and
incorporated herein as Exhibit B-1.
LIMITED PRODUCT WARRANTY:
In addition to the warranties set forth in Section 8 of this Agreement, WG
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
published
---------------------
## 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, Inc. CONFIDENTIAL
technical specification as published b1y 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 or alteration by anyone other than WG or its authorized vendors,
or any use of non-approved components in connection with the WG Platform. WG's
warranty hereunder extends to Affiliate 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
or within thirty (30) days of the expiration of such 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 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 and 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:
On site customer training is available on a time and materials basis at WG's
customary rates, as well as reimbursement for travel and per diem charges.
PLANT SPARES:
WG and Affiliate will cooperate to formulate and implement a program for spare
parts inventory and emergency response.
------------------------------
WorldGate Communications, Inc. CONFIDENTIAL
EXHIBIT B-1
SOFTWARE LICENSE
The terms and provisions of this Exhibit B-1 (Software License) provide for the
licensing by WG to Affiliate of certain Programs (as such term is defined in the
Affiliation Agreement) furnished with and to be used either as part of or in
conjunction with the WG Platform to be provided by WG to Affiliate under an
Affiliation Agreement, of which this Exhibit forms a part.
1. GRANT OF LICENSE: WG (hereinafter Licensor) hereby grants to Affiliate
(hereinafter Licensee) and Licensee hereby accepts a personal,
nonexclusive license to use the Programs on the terms and conditions
set forth herein and in the Affiliation Agreement. Except as
specifically provided herein and therein, no interest, right or
license, express or implied, is granted, and such other interests,
rights and licenses are hereby reserved.
2. OWNERSHIP RIGHTS: Any reference to sale or purchase not withstanding,
title to the Programs and all copies and derivatives thereof shall be
and remain in Licensor, and no title to or ownership of the Programs or
any derivative or portion thereof is conveyed or transferred to the
Licensee. Licensee acknowledges that the Programs constitute
confidential and proprietary information and trade secrets of Licensor,
whether or not the Programs, or any portion thereof, are or may be
copyrighted or copyrightable and/or patented or patentable, and that
disclosure of the Programs to Licensee is on the basis of the
confidential relationship between Licensee and Licensor under this
Agreement.
3. RESTRICTION ON TRANSFER: Licensee shall not sell, assign, sub-license,
transfer, or otherwise make available the Programs, in whole or in
part, except as may be permitted by this Software License Agreement and
only with written prior consent by WG.
4. RESTRICTION ON USE, DISASSEMBLY AND REVERSE ENGINEERING: Licensee may
use the Programs solely and exclusively on the computer(s) and
associated peripherals furnished by WG as part of the WorldGate
Platform sold to Affiliate under terms of the Affiliation Agreement,
except that the Programs may also be temporarily used on or with a
compatible backup computer and associated peripherals if the WorldGate
Platform computers and associated peripherals are inoperative because
of malfunction or during the performance of preventive maintenance or
engineering changes, but only for such reasonable time as required to
restore such WG Platform to operative status. Licensee shall use the
Programs only in connection with its immediate internal operations
with respect to the provision to its customers of the WorldGate
Service as authorized by the Affiliation Agreement, and shall not
otherwise use nor offer or supply the use of the Programs to others
under any circumstance. Licensee shall not de-compile, disassemble or
otherwise reverse engineer the Programs.
5. RESTRICTION ON COPYING: Licensee shall make no copies (including any
derivatives) of the Programs, or any part thereof, except that Licensee
may make one (1) copy of the Program solely for the purposes of backup
and archival storage. All copies shall be clearly marked by Licensee
with the same Licensor proprietary and copyright restrictions which
appear on the Programs originally supplied to Licensee, and be stored
by Licensee in a secure manner.
WorldGate Communications, Inc. CONFIDENTIAL
6. RESTRICTION ON DISCLOSURE: Except as expressly permitted herein,
Licensee shall not disclose or otherwise make available the Programs,
or any portion thereof, to any third party or to any employee or agent
of Licensee who is not of necessity authorized by Licensee to use the
Programs as part of Licensee's provision of the WG Service. Licensee
shall take all reasonable steps necessary to ensure the Programs, or
any portions, copies or derivatives thereof, are not disclosed or
otherwise made available by Licensee (or employees or agents of
Licensee) to any third party except as aforesaid.
7. TERMS AND TERMINATION: The term of this License Agreement and the
license granted hereunder shall commence on the date hereof, and shall
terminate on the earlier of: (a) when Licensee ceases to operate or
otherwise de-installs or replaces the WG Platform; or (b) the
termination or expiration of the Affiliation Agreement or the failure
of Licensee to pay any fees or to comply with any of the terms and
provisions hereof or of the Affiliation Agreement pursuant to which the
WG Platform has been provided, which failure continues for a period of
ten (10) days after written notice to cure such failure and avoid
termination.
Upon any termination of this Software License Agreement, pursuant to
(a) or (b) above, Licensee shall immediately cease use of the Programs
and return the Programs and all copies thereof to WG, and shall, within
one (1) month after any such termination xxxxxxx XX a written statement
certifying that the original and all copies and extracts (including
partial copies and extracts) of the Programs and any related material
received from WG or made in connection with such license have been
returned to WG or, upon WG's written request, destroyed. WG reserves
all rights and remedies at law, in equity and otherwise provided
pursuant to the terms and conditions of this Agreement, to enforce it
rights under this license. Licensee acknowledges and agrees that any
breach or threatened breach of this software license shall cause WG
irreparable injury for which there may be no adequate remedy at law,
and that in addition to any other remedies available, WG shall
therefore be entitled to obtain injunctive relief without the necessity
of proving actual damages.
Description________________________________ Release No._____________
Effective Date: September 25, 1998 Affiliate Initials: /s/ unintelligible WG Initials:______
WorldGate Communications, Inc. 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:
- four times yearly direct mail campaign to non-WorldGate Subscribers
(WG will supply creative and will provide both printing and bulk
delivery for purchase at WG's cost)
- xxxx stuffers (for purchase at WG's cost)
- four times yearly local cable interconnect advertising media buys
- four 30 and four 60 second video promotions for use as commercials
distributed yearly
- training for customer service representatives
- selected print media placement
- camera-ready ad mats
- four-color quarterly consumer guide (for purchase at WG's cost)
- point of sale displays
- leave behind piece and on-line tutorial for consumer education
AFFILIATE WILL PROVIDE:
- four times yearly direct mail campaign to non-WorldGate households
(Affiliate will provide mailing lists, address labeling, out-bound
postage and return fulfillment costs)
- a minimum of 500 ad avails of either 30 or 60 second length per month,
inserted on Affiliate's Systems on ad supported channels as agreed
between the parties to be run at times between 6:00 AM to 12:00 PM
(midnight local time) -- promoting the WorldGate Service, with WG
approved commercials
- reasonable use of local origination text-based channels (if available)
to promote WorldGate Services
- trained customer service representatives for all WorldGate Services
- reasonable promotion of Affiliate's web home page
Effective Date: September 25, 1998 Affiliate Initials: /s/ unintelligible WG Initials:___________
WorldGate Communications, Inc. CONFIDENTIAL
EXHIBIT D
MONTHLY SUBSCRIBER ACCESS FEES
The following Subscriber 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). Four different options
are presented for the determination of the amount of such Subscriber Access
Fees, with each option reflecting a different marketing/pricing method which may
be used by Affiliate to provide the WorldGate Service to its customers. Unless
exceptions are made in accordance with a subsequent written agreement between
the parties the method to be used hereunder, once selected by Affiliate, shall
apply to all of the Systems, and for the full term of this Agreement. These
options also set forth various benchmarks which, if achieved, will result in an
adjustment in the particular amount payable for such Subscriber 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 Subscriber 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.
[PARAGRAPH REDACTED]##
For purposes of determining the amount of the Subscriber 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 (Subscriber Access Fees are, however, payable by Affiliate
to WG for all Subscribers receiving access to the WorldGate Service irrespective
of whether 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.
Effective Date: September 25, 1998 Affiliate Initials: /s/ unintelligible
WG Initials:___________
------------------
## 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, Inc. CONFIDENTIAL
(INTERNATIONAL RATES - EFFECTIVE 8/19/98)
WORLDGATE PLUS SERVICE:
1. FOR AFFILIATES OFFERING THE WORLDGATE SERVICE AS A METERED USAGE SERVICE ON
AN A' LA CARTE BASIS (INCLUDES AN ALLOTTED USAGE TIME PER SUBSCRIBER OF UP TO
TWO HOURS PER MONTH).
[CHART REDACTED]##
2. 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).
[CHART REDACTED]##
Effective Date: September 25, 1998 Affiliate Initials: /s/ unintelligible Initials:___________
-----------------
## 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, Inc. CONFIDENTIAL
(INTERNATIONAL RATES - EFFECTIVE 1/1/98)
WORLDGATE BASIC SERVICE:
3. FOR AFFILIATES OFFERING THE WORLDGATE SERVICE AS A METERED USAGE SERVICE AND
AS A BASIC SERVICE ACROSS AND AS PART OF ALL TIERS OF SERVICE (INCLUDES AN
ALLOTTED USAGE TIME PER SUBSCRIBER OF UP TO TWO HOURS PER MONTH).
[CHART REDACTED]##
4. FOR AFFILIATES OFFERING THE WORLDGATE SERVICE AS A UNLIMITED USAGE SERVICE
AND AS A BASIC SERVICE ACROSS AND AS PART OF ALL TIERS OF SERVICE. (INCLUDES AN
ALLOTTED USAGE TIME PER SUBSCRIBER PER MONTH WHICH IS NOT LIMITED IN NUMBER OF
HOURS).
[CHART REDACTED]##
---------------------
## THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES & EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT.
Effective Date: September 25, 1998 Affiliate Initials: /s/ unintelligible WG Initials:___________
WorldGate Communications, Inc. CONFIDENTIAL
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 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.
Effective Date: September 25, 1998 Affiliate Initials: /s/ unintelligible WG Initials:__________
WorldGate Communications, Inc. CONFIDENTIAL
