-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TAo8v7aXapi33Behd2FmwBeXQetIO1AtIrSO82jLpu6hkvQ2HRpioU3ks2Xf0iFm FbvtdMjVVCMg3ZWsD7Hhzw== 0001035704-99-000273.txt : 19990604 0001035704-99-000273.hdr.sgml : 19990604 ACCESSION NUMBER: 0001035704-99-000273 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19990603 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HIGH SPEED ACCESS CORP CENTRAL INDEX KEY: 0001075244 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 611324009 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-74667 FILM NUMBER: 99639649 BUSINESS ADDRESS: STREET 1: 1000 W ORMSBY AVE STREET 2: SUITE 210 CITY: LOUISVILLE STATE: KY ZIP: 40210 MAIL ADDRESS: STREET 1: 1000 W ORMSBY AVE STREET 2: SUITE 210 CITY: LOUISVILLE STATE: KY ZIP: 40210 S-1/A 1 AMENDMENT NO. 6 TO FORM S-1 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 3, 1999 REGISTRATION NO. 333-74667 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 6 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ HIGH SPEED ACCESS CORP. (Exact Name of Registrant as Specified in its Charter) DELAWARE 7370 61-1324009 (State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Incorporation or Organization) Classification Code Number) Identification Number)
4100 EAST MISSISSIPPI AVENUE DENVER, COLORADO 80246 (303) 256-2000 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) ------------------------ Copies to: MR. RON PITCOCK, SR. MR. W. KENT OYLER, III PRESIDENT CHIEF OPERATING OFFICER HIGH SPEED ACCESS CORP. HIGH SPEED ACCESS CORP. 4100 EAST MISSISSIPPI AVENUE 1000 W. ORMSBY AVENUE DENVER, COLORADO 80246 LOUISVILLE, KENTUCKY 40210 (303) 256-2000 (502) 515-3333
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) ------------------------ Copies to: RICHARD R. PLUMRIDGE, ESQ. JEREMY W. DICKENS, ESQ. JOHN E. HAYES III, ESQ. WEIL, GOTSHAL & MANGES LLP BRUCE E. CUNNINGHAM, ESQ. 767 FIFTH AVENUE BROBECK, PHLEGER & HARRISON LLP NEW YORK, NEW YORK 10153 1125 17TH STREET, SUITE 2525 (212) 310-8000 DENVER, COLORADO 80202 (303) 293-0760
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 EXPLANATORY NOTE This registration statement covers the registration of 14,950,000 shares of common stock offered by the registrant pursuant to an underwritten public offering, which includes 1,950,000 shares of common stock issuable upon exercise of the Underwriters' over-allotment option. This registration statement also covers up to 1,808,407 shares of common stock to be offered to Cisco Systems, Inc., Com21, Inc. and Microsoft Corporation in a concurrent offering that is not underwritten. The concurrent offering consists of $7.5 million of common stock offered to Cisco, $1 million of common stock offered to Com21, and $10 million of common stock offered to Microsoft, in each case at the offering price, net of the underwriting discount. Therefore, this registration statement contains two forms of prospectus: one to be used in connection with the public offering and the other to be used in connection with the concurrent offerings to Cisco, Com21 and Microsoft. The public offering prospectus and the concurrent offering prospectus are identical in all respects except for the front cover pages, the tables of contents, the descriptions of the plan of distribution and the descriptions of legal matters. The alternate pages of the concurrent offering prospectus are included herein after the final page of the public offering prospectus and are labeled "Alternate Page for Concurrent Offering Prospectus." Final forms of each prospectus will be filed with the Securities and Exchange Commission under Rule 424(b). 3 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the estimated costs and expenses, other than the underwriting discounts and commissions, payable by the Registrant in connection with the sale of the common stock being registered, all of which will be paid by the Registrant.
AMOUNT TO BE PAID ---------- SEC registration fee........................................ $ 60,565 NASD filing fee............................................. 12,500 Nasdaq National Market listing fee.......................... 95,000 Legal fees and expenses..................................... 600,000 Blue sky fees and expenses.................................. 5,000 Accounting fees and expenses................................ 250,000 Directors and officers liability insurance.................. 600,000 Printing and engraving...................................... 350,000 Transfer agent fees......................................... 10,000 Miscellaneous............................................... 16,935 ---------- Total............................................. $2,000,000 ==========
- --------------- * To be supplied by amendment. ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Registrant's Amended and Restated Certificate of Incorporation to be in effect upon the closing of this offering (the "Certificate") provides that, except to the extent prohibited by the Delaware General Corporation Law, as amended (the "DGCL"), the Registrant's directors shall not be personally liable to the Registrant or its stockholders for monetary damages for any breach of fiduciary duty as directors of the Registrant. Under the DGCL, the directors have a fiduciary duty to the Registrant which is not eliminated by this provision of the Certificate and, in appropriate circumstances, equitable remedies such as injunctive or other forms of non-monetary relief will remain available. In addition, each director will continue to be subject to liability under the DGCL for breach of the director's duty of loyalty to the Registrant and its stockholders, for acts or omissions which are found by a court of competent jurisdiction to be not in good faith or involving intentional misconduct, for knowing violations of law, for actions leading to improper personal benefit to the director, and for payment of dividends or approval of stock repurchases or redemptions that are prohibited by DGCL. This provision also does not affect the directors' responsibilities under any other laws, such as the Federal securities laws or state or Federal environmental laws. The Registrant has obtained liability insurance for its officers and directors. Section 145 of the DGCL empowers a corporation to indemnify its directors and officers and to purchase insurance with respect to liability arising out of their capacity or status as directors and officers. The Certificate provides that the Registrant shall indemnify any person who was or is a party or is threatened to be made a party to or becomes involved in any action, suit or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that such person is or was a director or officer of the Registrant, or is or was serving at the request of the Registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorney's fees), judgments, fines and amounts paid in settlement reasonably incurred by such person in connection with such action, suit or proceeding. The DGCL provides further that the indemnification permitted thereunder shall not be deemed exclusive of any other rights to which the directors and officers may be entitled under the corporation's bylaws, any agreement, a vote of stockholders or otherwise. The Registrant has entered into indemnification agreements with each member of the Board of Directors providing for the indemnification of the directors to the fullest extent authorized, permitted or allowed by Delaware law. II-1 4 At present, there is no pending litigation or proceeding involving any director, officer, employee or agent as to which indemnification will be required or permitted under the Certificate. The Registrant is not aware of any threatened litigation or proceeding that may result in a claim for such indemnification. ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES Since the Registrant's inception, the Registrant has made the following sales of securities that were not registered under the Securities Act: 1. On April 3, 1998, the Registrant issued and sold 6,200,000 shares of common stock (subsequently valued by the Registrant at $.52 per share or $3,200,000 in the aggregate) of the Registrant in exchange for 200,000 shares of common stock of CATV.net, Inc. and 2,000,000 shares of common stock of High Speed Access Network, Inc. in reliance on the exemption from registration provided by Section 4(2) of the Securities Act. 2. During the period from April 3, 1998 to August 14, 1998, the Registrant issued and sold 5,000,000 shares of Series A Convertible Preferred Stock to Broadband Solutions, LLC in a private placement for an aggregate consideration of $5,000,000 in cash. Sales of Series A Convertible Preferred Stock were made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act. 3. During the period from September 1, 1998 to November 22, 1998, the Registrant issued and sold 2,000,000 shares of Series B Convertible Preferred Stock to Broadband Solutions II, LLC in a private placement for an aggregate consideration of $5,000,000 in cash and cancellation of indebtedness. Sales of Series B Convertible Preferred Stock were made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act. 4. On November 25, 1998, the Registrant issued and sold 8,000,000 shares of Series B Convertible Preferred Stock to Vulcan Ventures, Incorporated in a private placement for an aggregate consideration of $20,000,000 in cash. The sale of Series B Convertible Preferred Stock was made in reliance on an exemption from registration provided by Section 4(2) of the Securities Act. 5. On November 25, 1998 the Registrant issued to Vulcan Ventures, Incorporated warrants to purchase up to an aggregate of 7,750,000 shares of common stock of the Registrant at a purchase price of $3.23 per share. 3,875,000 of the warrants expire on July 31, 2003 and 3,875,000 of the warrants expire on July 31, 2004. The warrants were issued in reliance on an exemption from registration provided by Section 4(2) of the Securities Act. 6. On March 24, 1999, the Registrant issued to Atlanta On-Line Internet Inc. warrants to purchase 20,150 shares of common stock of the Registrant at a purchase price of $6.45 per share. The warrants were issued in reliance on an exemption from registration provided by Section 4(2) of the Securities Act. 7. On April 29, 1999, the Registrant issued and sold 5,000,000 shares of Series C Convertible Preferred Stock to Vulcan Ventures, Incorporated in a private placement for an aggregate consideration of $25,000,000 in cash. The sale of Series C Convertible Preferred Stock was made in reliance on an exemption from registration provided by Section 4(2) of the Securities Act. 8. On April 30, 1999, the Registrant issued to Microsoft Corporation warrants to purchase 250,000 shares of common stock of the Registrant for a purchase price equal to 125% of the public offering price per share. The warrants were issued in reliance on an exemption from registration provided by Section 4(2) of the Securities Act. II-2 5 ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Exhibits.
NUMBER DESCRIPTION ------ ----------- 1.1 -- Form of Underwriting Agreement. 1.2** -- Stock Purchase Agreement between High Speed Access Corp. and Cisco Systems, Inc., as amended May 3, 1999. 1.3** -- Stock Purchase Agreement between High Speed Access Corp. and Com21, Inc. 1.4** -- Stock Purchase Agreement between High Speed Access Corp. and Microsoft Corporation 3.1** -- Form of Amended and Restated Certificate of Incorporation to be effective upon the closing of the offering. 3.2** -- Form of Amended and Restated Bylaws to be effective upon the closing of the offering. 4.1** -- Specimen Common Stock certificate. 4.2 -- See Exhibits 3.1 and 3.2 for provisions defining the rights of holders of common stock of the Registrant. 5.1 -- Opinion of Brobeck, Phleger & Harrison LLP. 9.1** -- Voting Trust Agreement dated as of March 30, 1999 among Terrence J. Herron, as Voting Trustee, and Joseph S., Gans, III, Joseph W. Aman, Lawrence Shewack, John Howell and Terrence J. Herron. 10.1** -- Contribution Agreement among High Speed Access Corp., Broadband Solutions, LLC, and certain shareholders of High Speed Access Corp., dated as of April 3, 1998, as amended November 25, 1998. 10.2** -- Series B Convertible Preferred Stock Purchase Agreement between High Speed Access Corp. and Broadband Solutions II, LLC, dated as of September 1, 1998, as amended November 25, 1998. 10.3** -- Series B Convertible Preferred Stock Purchase Agreement between High Speed Access Corp. and Vulcan Ventures, Incorporated, dated as of November 25, 1998. 10.4** -- Series C Convertible Preferred Stock Purchase Agreement between High Speed Access Corp. and Vulcan Ventures, Incorporated, dated November 25, 1998. 10.5** -- Class A Securities Purchase Warrant between High Speed Access Corp. and Vulcan Ventures, Incorporated, dated as of November 25, 1998, as Assigned April 23, 1999 and as amended April 29, 1999. 10.6** -- Class B Securities Purchase Warrant between High Speed Access Corp. Vulcan Ventures, Incorporated, dated as of November 25, 1998, as Assigned April 23, 1999, and as amended April 29, 1999. 10.7** -- Systems Access and Investment Agreement among High Speed Access Corp., Vulcan Ventures, Incorporated, Charter Communications, Inc. and Marcus, Inc., dated as of November 25, 1998. 10.8** -- Programming Content Agreement between High Speed Access Corp. and Vulcan Ventures, Incorporated, dated as of November 25, 1998. 10.9 -- Network Service Agreement between High Speed Access Corp., Charter Communications, Inc., and Marcus Cable, Inc., dated as of November 25, 1998. 10.10** -- Amended and Restated Registration Rights Agreement, dated as of November 25, 1998. 10.11** -- Voting Agreement by and among High Speed Access Corp. and certain shareholders dated as of November 25, 1998.
II-3 6
NUMBER DESCRIPTION ------ ----------- 10.12** -- Employment, Non-Competition and Non-Disclosure Agreement with W. Kent Oyler, III, dated April 3, 1998. 10.13** -- Employment, Non-Competition and Non-Disclosure Agreement with Ronnie W. Pitcock, dated April 3, 1998. 10.14** -- $650,000 Promissory Note by High Speed Access Corp. in favor of Gans Multimedia Partnership, dated April 3, 1998. 10.15** -- Assignment and Security Agreement dated April 3, 1998 between High Speed Access Corp. and Gans Multimedia Partnership. 10.16** -- Noncompetition and Nondisclosure Agreement dated April 3, 1998 between High Speed Access Corp. and Joseph S. Gans, III. 10.17** -- Convertible Preferred Stock Purchase Agreement dated as of April 3, 1998 among High Speed Access Network, Inc., Ronnie W. Pitcock, Joseph S. Gans, III and Broadband Solutions, LLC. 10.18** -- Convertible Preferred Stock Purchase Agreement dated as of February 23, 1998 among CATV.net, Inc., Kent Oyler, David Gibbs, Gibbs Family Limited Partnership, Colorado Limited Partnership, OPM Services, Inc. and Broadband Solutions, LLC. 10.19** -- Convertible Preferred Stock Registration Rights Agreement dated as of February 23, 1998 among CATV.net, Inc., Kent Oyler, David Gibbs, Gibbs Family Limited Partnership, Colorado Limited Partnership, OPM Services, Inc. and Broadband Solutions, LLC. 10.20** -- Services Agreement dated February 20, 1998 between CATV.net, Inc. and OPM Services, Inc. 10.21** -- Asset Purchase Agreement dated March 17, 1999 among High Speed Access Corp., Atlanta On-Line InterNet, Inc., Marvin Anglin and Ellen Anglin. 10.22** -- Warrant to Purchase Common Stock dated March 24, 1999 between High Speed Access Corp. and Atlanta On-Line InterNet, Inc. 10.23** -- Warrant to Purchase Common Stock of Darwin Networks, Inc. dated as of March 15, 1999 between Darwin Networks, Inc. and High Speed Access Corp. 10.24** -- Revolving Credit Note dated as of March 15, 1999 issued by Darwin Networks, Inc. in favor of High Speed Access Corp. 10.25** -- Services Agreement dated as of March 15, 1999 between High Speed Access Corp. and Darwin Networks, Inc. 10.26** -- Amended and Restated Shareholders Agreement dated as of November 25, 1998 among High Speed Access Corp. and shareholders of High Speed Access Corp. 10.27** -- Master Loan and Security Agreement dated as of February 4, 1999 between Finova Capital Corporation and High Speed Access Corp. 10.28** -- Lease dated April 1, 1998 between High Speed Access Corp. and Henry Vogt Machine Co., as amended by a First Amendment to Lease dated May 1, 1998, a Second Amendment to Lease dated June 1, 1998, a Third Amendment to Lease dated July 20, 1998, a Fourth Amendment to Lease dated September 1, 1998, a Fifth Amendment to lease dated November 1, 1998, a Sixth Amendment to Lease dated January 1, 1999, and a Seventh Amendment to Lease dated March 15, 1999. 10.29** -- HSAnet Cable Affiliate Agreement between High Speed Access Network, Inc. and Gans Multimedia partnership dated October 15, 1997. 10.30** -- 1998 High Speed Access Corp. Stock Option Plan 10.31** -- 1999 High Speed Access Corp. Stock Option Plan.
II-4 7
NUMBER DESCRIPTION ------ ----------- 10.32** -- High Speed Access Corp. Non-Employee Director Stock Option Plan. 10.33** -- Form of Indemnity Agreement. 10.34** -- Securities Purchase Warrant dated as of April 30, 1999 between High Speed Access Corp. and Microsoft Corporation. 10.35** -- Letter Agreement dated as of April 30, 1999 between High Speed Access Corp. and Microsoft Corporation. 10.36+** -- Letter of Intent between High Speed Access Corp. and ServiceCo LLC dated as of March 31, 1999. 10.37** -- Master Services Agreement dated as of January 1, 1999 between High Speed Access Corp. and National Cable Television Cooperative, Inc. 21.1** -- Subsidiaries. 23.1** -- Consent of PricewaterhouseCoopers LLP. 23.2** -- Consent of PricewaterhouseCoopers LLP. 23.3** -- Consent of PricewaterhouseCoopers LLP. 23.4 -- Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1). 24.1** -- Powers of Attorney (See Signature Page). 27.1** -- Financial Data Schedule.
- --------------- ** Previously filed. + Confidential treatment requested for certain portions of this Exhibit pursuant to Rule 406 promulgated under the Securities Act. ITEM 17. UNDERTAKINGS The undersigned Registrant hereby undertakes to provide to the Underwriter at the closing specified in the Underwriting Agreement, certificates in such denominations and registered in such names as required by the Underwriter to permit prompt delivery to each purchaser. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned Registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424 (b)(1) or (4), or 497(h) under the Securities Act of 1933, shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-5 8 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Denver, State of Colorado, on this 3rd day of June, 1999. HIGH SPEED ACCESS CORP. By: /s/ GEORGE E. WILLETT ---------------------------------- Name: George E. Willett Title: Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities indicated:
SIGNATURE TITLE(S) DATE --------- -------- ---- * President (Principal Executive June 3, 1999 - ----------------------------------------------------- Officer) Ron Pitcock, Sr. * Chief Financial Officer June 3, 1999 - ----------------------------------------------------- (Principal Financial and George E. Willett Accounting Officer) * Director, Chairman June 3, 1999 - ----------------------------------------------------- David A. Jones, Jr. /s/ ROBERT S. SAUNDERS Director, Vice Chairman June 3, 1999 - ----------------------------------------------------- Robert S. Saunders * Director June 3, 1999 - ----------------------------------------------------- Irving W. Bailey, II * Director June 3, 1999 - ----------------------------------------------------- Michael E. Gellert * Director June 3, 1999 - ----------------------------------------------------- Jerald L. Kent * Director June 3, 1999 - ----------------------------------------------------- William D. Savoy * Director June 3, 1999 - ----------------------------------------------------- Stephen E. Silva *By: /s/ ROBERT S. SAUNDERS ------------------------------------------------ Robert S. Saunders Attorney-in-Fact
II-6 9 INDEX TO EXHIBITS
NUMBER DESCRIPTION ------ ----------- 1.1 -- Form of Underwriting Agreement. 1.2** -- Stock Purchase Agreement between High Speed Access Corp. and Cisco Systems, Inc., as amended May 3, 1999. 1.3** -- Stock Purchase Agreement between High Speed Access Corp. and Com21, Inc. 1.4** -- Stock Purchase Agreement between High Speed Access Corp. and Microsoft Corporation 3.1** -- Form of Amended and Restated Certificate of Incorporation to be effective upon the closing of the offering. 3.2** -- Form of Amended and Restated Bylaws to be effective upon the closing of the offering. 4.1** -- Specimen Common Stock certificate. 4.2 -- See Exhibits 3.1 and 3.2 for provisions defining the rights of holders of common stock of the Registrant. 5.1 -- Opinion of Brobeck, Phleger & Harrison LLP. 9.1** -- Voting Trust Agreement dated as of March 30, 1999 among Terrence J. Herron, as Voting Trustee, and Joseph S., Gans, III, Joseph W. Aman, Lawrence Shewack, John Howell and Terrence J. Herron. 10.1** -- Contribution Agreement among High Speed Access Corp., Broadband Solutions, LLC, and certain shareholders of High Speed Access Corp., dated as of April 3, 1998, as amended November 25, 1998. 10.2** -- Series B Convertible Preferred Stock Purchase Agreement between High Speed Access Corp. and Broadband Solutions II, LLC, dated as of September 1, 1998, as amended November 25, 1998. 10.3** -- Series B Convertible Preferred Stock Purchase Agreement between High Speed Access Corp. and Vulcan Ventures, Incorporated, dated as of November 25, 1998. 10.4** -- Series C Convertible Preferred Stock Purchase Agreement between High Speed Access Corp. and Vulcan Ventures, Incorporated, dated November 25, 1998. 10.5** -- Class A Securities Purchase Warrant between High Speed Access Corp. and Vulcan Ventures, Incorporated, dated as of November 25, 1998 as Assigned April 23, 1999 and as amended April 29, 1999. 10.6** -- Class B Securities Purchase Warrant between High Speed Access Corp. Vulcan Ventures, Incorporated, dated as of November 25, 1998 as Assigned April 23, 1999, and as amended April 29, 1999. 10.7** -- Systems Access and Investment Agreement among High Speed Access Corp., Vulcan Ventures, Incorporated, Charter Communications, Inc. and Marcus, Inc., dated as of November 25, 1998. 10.8** -- Programming Content Agreement between High Speed Access Corp. and Vulcan Ventures, Incorporated, dated as of November 25, 1998. 10.9 -- Network Service Agreement between High Speed Access Corp., Charter Communications, Inc., and Marcus Cable, Inc., dated as of November 25, 1998. 10.10** -- Amended and Restated Registration Rights Agreement, dated as of November 25, 1998. 10.11** -- Voting Agreement by and among High Speed Access Corp. and certain shareholders dated as of November 25, 1998. 10.12** -- Employment, Non-Competition and Non-Disclosure Agreement with W. Kent Oyler, III, dated April 3, 1998.
10
NUMBER DESCRIPTION ------ ----------- 10.13** -- Employment, Non-Competition and Non-Disclosure Agreement with Ronnie W. Pitcock, dated April 3, 1998. 10.14** -- $650,000 Promissory Note by High Speed Access Corp. in favor of Gans Multimedia Partnership, dated April 3, 1998. 10.15** -- Assignment and Security Agreement dated April 3, 1998 between High Speed Access Corp. and Gans Multimedia Partnership. 10.16** -- Noncompetition and Nondisclosure Agreement dated April 3, 1998 between High Speed Access Corp. and Joseph S. Gans, III. 10.17** -- Convertible Preferred Stock Purchase Agreement dated as of April 3, 1998 among High Speed Access Network, Inc., Ronnie W. Pitcock, Joseph S. Gans, III and Broadband Solutions, LLC. 10.18** -- Convertible Preferred Stock Purchase Agreement dated as of February 23, 1998 among CATV.net, Inc., Kent Oyler, David Gibbs, Gibbs Family Limited Partnership, Colorado Limited Partnership, OPM Services, Inc. and Broadband Solutions, LLC. 10.19** -- Convertible Preferred Stock Registration Rights Agreement dated as of February 23, 1998 among CATV.net, Inc., Kent Oyler, David Gibbs, Gibbs Family Limited Partnership, Colorado Limited Partnership, OPM Services, Inc. and Broadband Solutions, LLC. 10.20** -- Services Agreement dated February 20, 1998 between CATV.net, Inc. and OPM Services, Inc. 10.21** -- Asset Purchase Agreement dated March 17, 1999 among High Speed Access Corp., Atlanta On-Line InterNet, Inc., Marvin Anglin and Ellen Anglin. 10.22** -- Warrant to Purchase Common Stock dated March 24, 1999 between High Speed Access Corp. and Atlanta On-Line InterNet, Inc. 10.23** -- Warrant to Purchase Common Stock of Darwin Networks, Inc. dated as of March 15, 1999 between Darwin Networks, Inc. and High Speed Access Corp. 10.24** -- Revolving Credit Note dated as of March 15, 1999 issued by Darwin Networks, Inc. in favor of High Speed Access Corp. 10.25** -- Services Agreement dated as of March 15, 1999 between High Speed Access Corp. and Darwin Networks, Inc. 10.26** -- Amended and Restated Shareholders Agreement dated as of November 25, 1998 among High Speed Access Corp. and shareholders of High Speed Access Corp. 10.27** -- Master Loan and Security Agreement dated as of February 4, 1999 between Finova Capital Corporation and High Speed Access Corp. 10.28** -- Lease dated April 1, 1998 between High Speed Access Corp. and Henry Vogt Machine Co., as amended by a First Amendment to Lease dated May 1, 1998, a Second Amendment to Lease dated June 1, 1998, a Third Amendment to Lease dated July 20, 1998, a Fourth Amendment to Lease dated September 1, 1998, a Fifth Amendment to lease dated November 1, 1998, a Sixth Amendment to Lease dated January 1, 1999, and a Seventh Amendment to Lease dated March 15, 1999. 10.29** -- HSAnet Cable Affiliate Agreement between High Speed Access Network, Inc. and Gans Multimedia partnership dated October 15, 1997. 10.30** -- 1998 High Speed Access Corp. Stock Option Plan 10.31** -- 1999 High Speed Access Corp. Stock Option Plan. 10.32** -- High Speed Access Corp. Non-Employee Director Stock Option Plan. 10.33** -- Form of Indemnity Agreement.
11
NUMBER DESCRIPTION ------ ----------- 10.34** -- Securities Purchase Warrant dated as of April 30, 1999 between High Speed Access Corp. and Microsoft Corporation. 10.35** -- Letter Agreement dated as of April 30, 1999 between High Speed Access Corp. and Microsoft Corporation. 10.36+** -- Letter of Intent between High Speed Access Corp. and ServiceCo LLC dated as of March 31, 1999. 10.37** -- Master Services Agreement dated as of January 1, 1999 between High Speed Access Corp. and National Cable Television Cooperative, Inc. 21.1** -- Subsidiaries. 23.1** -- Consent of PricewaterhouseCoopers LLP. 23.2** -- Consent of PricewaterhouseCoopers LLP. 23.3** -- Consent of PricewaterhouseCoopers LLP. 23.4 -- Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1). 24.1** -- Powers of Attorney (See Signature Page). 27.1** -- Financial Data Schedule.
- --------------- ** Previously filed. + Confidential treatment requested for certain portions of this Exhibit pursuant to Rule 406 promulgated under the Securities Act. EX-1.1 2 UNDERWRITING AGREEMENT 1 13,000,000 SHARES HIGH SPEED ACCESS CORP. COMMON STOCK UNDERWRITING AGREEMENT June __, 1999 LEHMAN BROTHERS INC. J.P. MORGAN SECURITIES INC. BANC OF AMERICA SECURITIES LLC CIBC OPPENHEIMER CORP. As Representatives of the several Underwriters named in Schedule 1, c/o Lehman Brothers Inc. Three World Financial Center New York, New York 10285 Dear Sirs: High Speed Access Corp., a Delaware corporation (the "Company"), proposes to sell 13,000,000 shares (the "Firm Stock") of the Company's Common Stock, par value $.01 per share (the "Common Stock"). In addition, the Company proposes to grant to the Underwriters named in Schedule 1 hereto (the "Underwriters") an option to purchase up to an additional 1,950,000 shares of the Common Stock on the terms and for the purposes set forth in Section 2 (the "Option Stock"). The Firm Stock and the Option Stock, if purchased, are hereinafter collectively called the "Stock." This is to confirm the agreement concerning the purchase of the Stock from the Company by the Underwriters named in Schedule 1 hereto (the "Underwriters"). 1. Representations, Warranties and Agreements of the Company. The Company represents, warrants and agrees that: (a) A registration statement on Form S-1, and amendments thereto, with respect to the Stock have (i) been prepared by the Company in conformity with the requirements of the United States Securities Act of 1933 (the "Securities Act") and the rules and regulations (the "Rule and Regulations") of the United States Securities and Exchange Commission (the "Commission") thereunder, (ii) been filed with the Commission under the Securities Act and (iii) become effective under the Securities Act. Copies of such registration statement and the amendments thereto have been delivered by the Company to you as the representatives (the "Representatives") of the Underwriters. As used in this Agreement, "Effective Time" means the date and the time as of which such registration statement, or the most recent post-effective amendment thereto, if any, was declared effective by the Commission; "Effective Date" means the date of the Effective Time; 2 "Preliminary Prospectus" means each prospectus relating to the Stock included in such registration statement, or amendments thereof, before it became effective under the Securities Act and any prospectus filed with the Commission by the Company with the consent of the Representatives pursuant to Rule 424(a) of the Rules and Regulations; "Registration Statement" means such registration statement, as amended at the Effective Time, including all information contained in the final prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations in accordance with Section 5(a) hereof and deemed to be a part of the registration statement as of the Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and Regulations; and "Prospectus" means such final prospectus relating to the Stock, as first filed with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and Regulations. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus or Prospectus. For purposes of this Agreement the term Registration Statement shall not include the Cisco Systems, Inc., Com 21, Inc., and Microsoft Corporation preliminary and final prospectuses (the "Additional Prospectuses"). (b) The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement or the Prospectus will, when they become effective or are filed with the Commission, as the case may be, conform in all respects to the requirements of the Securities Act and the Rules and Regulations and do not and will not, as of the applicable effective date (as to the Registration Statement and any amendment thereto) and as of the applicable filing date (as to the Prospectus and any supplement thereto) contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading; provided that no representation or warranty is made as to information contained in or omitted from the Registration Statement or the Prospectus in reliance upon and in conformity with written information furnished to the Company through the Representatives by or on behalf of any Underwriter specifically for inclusion therein. (c) The Company and each of its subsidiaries (as defined in Section 15) have been duly incorporated and are validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged; and none of the subsidiaries of the Company is a "significant subsidiary", as such term is defined in Rule 405 of the Rules and Regulations. 2 3 (d) At the First Delivery Date (as defined in Section 4), the Company will have an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company will have been duly and validly authorized and issued, are fully paid and non-assessable and will conform to the description thereof contained in the Prospectus; and all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims. (e) The unissued shares of the Stock to be issued and sold by the Company to the Underwriters hereunder have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein will be duly and validly issued, fully paid and non-assessable and the Stock will conform to the description thereof contained in the Prospectus. (f) This Agreement has been duly authorized, executed and delivered by the Company. (g) The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company or any of its subsidiaries or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets; and except for the registration of the Stock under the Securities Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state or foreign securities laws in connection with the purchase and distribution of the Stock by the Underwriters, no consent, approval, authorization or order of, or filing or registration with, any such court or governmental agency or body is required for the execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby. (h) Except as described in the Registration Statement, there are no contracts, agreements or understandings between the Company and any person granting such person the right (other than rights which have been waived or satisfied) to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such 3 4 securities in the securities registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Securities Act. (i) Except as described in the Registration Statement, the Company has not sold or issued any shares of Common Stock during the six-month period preceding the date of the Prospectus, including any sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act, other than shares issued pursuant to employee benefit plans, qualified stock options plans or other employee compensation plans or pursuant to outstanding options, rights or warrants. (j) Neither the Company nor any of its subsidiaries has sustained, since the date of the latest audited financial statements included in the Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and, since such date, there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Prospectus. (k) The historical and pro forma financial statements, together with the related notes, set forth in the Prospectus comply as to form in all material respects with the requirements of Regulation S-X under the Securities Act applicable to registration statements on Form S-1 under the Securities Act. The historical financial statements (including the related notes and supporting schedules) filed as part of the Registration Statement or included in the Prospectus present fairly in all material respects the financial condition and results of operations of the entities purported to be shown thereby, at the dates and for the periods indicated, and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. The unaudited pro forma combined statement of operations has been prepared on a basis consistent with such historical statements of the Company, except for the pro forma adjustments specified therein, and gives effect to assumptions made on a reasonable basis and in good faith. The other financial and statistical information and data included in the Prospectus, historical and pro forma, have been derived from the financial records of the Company (or its predecessors) and, in all material respects, have been prepared on a basis consistent with such books and records of the Company (or its predecessor) and present fairly the historical and proposed transactions contemplated by the Prospectus and this Agreement. 4 5 (l) PricewaterhouseCoopers LLP, who have audited certain financial statements of the Company, whose report appears in the Prospectus and who have delivered the initial letter referred to in Section 7(g) hereof, are independent public accountants as required by the Securities Act and the Rules and Regulations. (m) The Company and each of its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and all real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases, with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries. (n) The Company and each of its subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as is adequate for the conduct of their respective businesses and the value of their respective properties and as is customary for companies engaged in similar businesses in similar industries. (o) To the best of the Company's knowledge, the Company and each of its subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights and licenses necessary for the conduct of their respective businesses and have no reason to believe that the conduct of their respective businesses will conflict with, and have not received any notice of any claim of conflict with, any such rights of others. (p) There are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property or assets of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, could reasonably be expected to have a material adverse effect on the consolidated financial position, stockholders' equity, results of operations, business or prospects of the Company and its subsidiaries; and to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. (q) There are no contracts or other documents which are required to be described in the Prospectus or filed as exhibits to the Registration Statement by the Securities Act or by the Rules and Regulations which have not been described in the Prospectus or filed as exhibits to the Registration Statement. 5 6 (r) No relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company on the other hand, which is required to be described in the Prospectus which is not so described. (s) No labor disturbance by the employees of the Company exists or, to the knowledge of the Company, is imminent which could reasonably be expected to have a material adverse effect on the consolidated financial position, stockholders' equity, results of operations, business or prospects of the Company and its subsidiaries. (t) The Company has filed all federal, state and local income and franchise tax returns required to be filed through the date hereof and has paid all taxes due thereon, and no tax deficiency has been determined adversely to the Company or any of its subsidiaries which has had (nor does the Company have any knowledge of any tax deficiency which, if determined adversely to the Company or any of its subsidiaries, could reasonably be expected to have a material adverse effect on the consolidated financial position, stockholders' equity, results of operations, business or prospects of the Company and its subsidiaries. (u) The Company has developed a plan (the "Company Y2K Plan") intended to ensure that all computer hardware and software used in and material to the business of the Company and its subsidiaries is designed to be Year 2000 Compliant. The Company Y2K Plan includes reasonable steps to determine whether the failure of any suppliers or customers with which the Company or any subsidiary has a material relationship to be Year 2000 Compliant would have or would reasonably be expected to have a material adverse effect on the Company and assuming the consummation of the Company Y2K Plan, the occurrence of calendar year 2000 will not reasonably be expected to have a material adverse effect on the Company. For purposes of this subsection (u), "Date Data" means any data of any kind that consists of date information or which is otherwise derived from, dependent on or related to date information; "Date-Sensitive System" means any software, microcode or hardware system or component, including any electronic or electronically controlled system or component that processes any Date Data and that is installed, in development or on order, for internal or external use, or the provision or operation of which provides a benefit to customers, vendors, suppliers or any other party; and "Year 2000 Compliant" means (i) with respect to Date Data, that such data is in proper format and (ii) with respect to Date-Sensitive Systems, that each such system accurately processes all Date Data, including for the twentieth and twenty-first centuries, without loss of any functionality or performance, including, without limitation, calculating, comparing, sequencing, storing and displaying such Date Data (including all leap year considerations), when used as a stand-alone system or in combination with other software or hardware. The matters set forth in this 6 7 subsection (u) are subject to disclosures relating to Year 2000 matters in the Prospectus. (v) Since the date as of which information is given in the Prospectus through the date hereof, and except as may otherwise be disclosed or contemplated in the Prospectus, the Company has not (i) issued or granted any securities, (ii) incurred any material liability or obligation, direct or contingent, other than liabilities and obligations which were incurred in the ordinary course of business, (iii) entered into any material transaction not in the ordinary course of business or (iv) declared or paid any dividend on its capital stock. (w) The Company (i) makes and keeps accurate books and records and (ii) maintains internal accounting controls which provide reasonable assurance that (A) transactions are executed in accordance with management's authorization, (B) transactions are recorded as necessary to permit preparation of its financial statements and to maintain accountability for its assets, (C) access to its assets is permitted only in accordance with management's authorization and (D) the reported accountability for its assets is compared with existing assets at reasonable intervals. (x) Neither the Company nor any of its subsidiaries (i) is in violation of its charter or by-laws, (ii) is in default in any material respect, and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any material indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject, (iii) is in violation in any material respect of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject or (iv) has failed to obtain any material license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its property or to the conduct of its business. (y) Neither the Company nor any of its subsidiaries, nor any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries, has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment. (z) Neither the Company nor any subsidiary is, or will be after the offering and use of proceeds therefrom, an "investment company" within the 7 8 meaning of such term under the Investment Company Act of 1940 and the rules and regulations of the Commission thereunder. 2. Purchase of the Stock by the Underwriters. On the basis of the representations and warranties contained in, and subject to the terms and conditions of, this Agreement, the Company agrees to sell 13,000,000 shares of the Firm Stock to the several Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase the number of shares of the Firm Stock set opposite that Underwriter's name in Schedule 1 hereto. The respective purchase obligations of the Underwriters with respect to the Firm Stock shall be rounded among the Underwriters to avoid fractional shares, as the Representatives may determine. In addition, the Company grants to the Underwriters an option to purchase up to 1,950,000 shares of Option Stock. Such option is granted solely for the purpose of covering over-allotments in the sale of Firm Stock and is exercisable as provided in Section 4 hereof. Shares of Option Stock shall be purchased severally for the account of the Underwriters in proportion to the number of shares of Firm Stock set opposite the name of such Underwriters in Schedule 1 hereto. The respective purchase obligations of each Underwriter with respect to the Option Stock shall be adjusted by the Representatives so that no Underwriter shall be obligated to purchase Option Stock other than in 100 share lots. The price of both the Firm Stock and any Option Stock shall be $_____ per share. The Company shall not be obligated to deliver any of the Stock to be delivered on any Delivery Date (as hereinafter defined), as the case may be, except upon payment for all the Stock to be purchased on such Delivery Date as provided herein. 3. Offering of Stock by the Underwriters. Upon authorization by the Representatives of the release of the Firm Stock, the several Underwriters propose to offer the Firm Stock for sale initially at the public offering price set forth on the cover page of the Prospectus and otherwise upon the terms and conditions set forth in the Prospectus. It is understood that 975,000 shares of the Firm Stock will initially be reserved by the several Underwriters for offer and sale upon the terms and conditions set forth in the Prospectus and in accordance with the rules and regulations of the National Association of Securities Dealers, Inc. to employees and other persons having relationships with the Company and its subsidiaries who have heretofore delivered to the Representatives offers or indications of interest to purchase shares of Firm Stock in form satisfactory to the Representatives, and that any allocation of such Firm Stock among such persons will be made in accordance with timely directions received by the Representatives from the Company; provided, that under no circumstances will the Representatives or any Underwriter be liable to the Company or to any such person for any action taken or omitted in good faith in connection with such offering to employees and other persons having relationships with the Company and its subsidiaries. It is further understood that any shares of such Firm Stock which are not purchased by such persons will be offered by the Underwriters to the public upon the terms and conditions set forth in the Prospectus. 8 9 4. Delivery of and Payment for the Stock. Delivery of and payment for the Firm Stock shall be made at the office of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, at 10:00 A.M., New York City time, on the third full business day following the date of this Agreement or the fourth business day if this Agreement is executed after 4:30 p.m. New York City time or at such other date or place as shall be determined by agreement between the Representatives and the Company. This date and time are sometimes referred to as the "First Delivery Date." On the First Delivery Date, the Company shall deliver or cause to be delivered certificates representing the Firm Stock to the Representatives for the account of each Underwriter against payment to or upon the order of the Company of the purchase price by wire transfer in immediately available funds. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall be registered in such names and in such denominations as the Representatives shall request in writing not less than two full business days prior to the First Delivery Date. The option granted in Section 2 will expire 30 days after the date of this Agreement and may be exercised in whole or in part from time to time by written notice being given to the Company by the Representatives. Such notice shall set forth the aggregate number of shares of Option Stock as to which the option is being exercised, the names in which the shares of Option Stock are to be registered, the denominations in which the shares of Option Stock are to be issued and the date and time, as determined by the Representatives, when the shares of Option Stock are to be delivered; provided, however, that this date and time shall not be earlier than the First Delivery Date nor earlier than the second business day after the date on which the option shall have been exercised nor later than the third business day after the date on which the option shall have been exercised. The date and time the shares of Option Stock are delivered are sometimes referred to as a "Second Delivery Date" and the First Delivery Date and any Second Delivery Date are sometimes each referred to as a "Delivery Date." Delivery of and payment for the Option Stock shall be made at the place specified in the first sentence of the first paragraph of this Section 4 (or at such other place as shall be determined by agreement between the Representatives and the Company) at 10:00 A.M., New York City time, on such Second Delivery Date. On such Second Delivery Date, the Company shall deliver or cause to be delivered the certificates representing the Option Stock to the Representatives for the account of each Underwriter against payment to or upon the order of the Company of the purchase price by wire transfer in immediately available funds. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall be registered in such names and in such denominations as the Representatives shall request in the aforesaid written notice. 5. Further Agreements of the Company. The Company agrees: (a) To prepare the Prospectus in a form approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission's close of business on the second 9 10 business day following the execution and delivery of this Agreement or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Securities Act; to make no further amendment or any supplement to the Registration Statement or to the Prospectus except as permitted herein; to advise the Representatives, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus has been filed and to furnish the Representatives with copies thereof; to advise the Representatives, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, of the suspension of the qualification of the Stock for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal; (b) To furnish promptly to each of the Representatives and to counsel for the Underwriters a signed copy of the Registration Statement as originally filed with the Commission, and each amendment thereto filed with the Commission, including all consents and exhibits filed therewith; (c) To deliver promptly to the Representatives such number of the following documents as the Representatives shall reasonably request: (i) conformed copies of the Registration Statement as originally filed with the Commission and each amendment thereto (in each case excluding exhibits) and (ii) each Preliminary Prospectus, the Prospectus and any supplemented Prospectus and, if the delivery of a prospectus is required at any time after the Effective Time in connection with the offering or sale of the Stock or any other securities relating thereto and if at such time any events shall have occurred as a result of which the Prospectus as then supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary to supplement the Prospectus in order to comply with the Securities Act, to notify the Representatives and, upon their request, to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Representatives may from time to time reasonably request of a supplemented Prospectus which will correct such statement or omission or effect such compliance. (d) To file promptly with the Commission any amendment to the Registration Statement or any supplement to the Prospectus that may, in the 10 11 judgment of the Company or the Representatives, be required by the Securities Act or reasonably requested by the Commission; (e) Prior to filing with the Commission any amendment to the Registration Statement or supplement to the Prospectus or any Prospectus pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to the Representatives and counsel for the Underwriters and obtain the consent of the Representatives to the filing; (f) As soon as practicable after the Effective Date (but in no event later than 45 days after the first anniversary of the end of the fiscal quarter following the effective date of the Registration Statement), to make generally available to the Company's security holders and to deliver to the Representatives an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act and the Rules and Regulations (including, at the option of the Company, Rule 158); (g) For a period of three years following the Effective Date, to furnish to the Representatives copies of all materials furnished by the Company to its shareholders and all public reports and all reports and financial statements furnished by the Company to the Nasdaq Stock Market or the principal national securities exchange upon which the Common Stock may be listed pursuant to requirements of or agreements with Nasdaq or such exchange or to the Commission pursuant to the Exchange Act or any rule or regulation of the Commission thereunder; (h) Promptly from time to time to take such action as the Representatives may reasonably request to qualify the Stock for offering and sale under the securities laws of such jurisdictions as the Representatives may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Stock; provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (i) For a period of 180 days from the date of this Underwriting Agreement, not to, directly or indirectly, (1) offer for sale, sell, contract to sell, pledge, hedge or otherwise dispose, directly or indirectly, of any shares of Common Stock or securities convertible into or exchangeable for Common Stock (other than the Stock, the shares of Common Stock sold pursuant to the Other Prospectuses and shares issued pursuant to employee benefit plans, qualified stock option plans or other employee compensation plans existing on the 11 12 date hereof or pursuant to currently outstanding options, warrants or rights), or sell or grant options, rights or warrants with respect to any shares of Common Stock or securities convertible into or exchangeable for Common Stock (other than the grant of options pursuant to option plans existing on the date hereof), provided that the Company may issue shares of Common Stock or warrants in connection with an acquisition of another company if the terms of that issuance provide that the Common Stock or Common Stock issuable pursuant to the warrants will not be resold prior to the expiration of the 180-day period commencing on the date of this Underwriting Agreement, or (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such shares of Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise, or (3) publicly disclose an intention to make any such offer, sale, pledge, hedge, swap or other transaction, in each case without the prior written consent of Lehman Brothers Inc.; and to cause each officer and director of the Company to furnish to the Representatives, prior to the First Delivery Date, a letter or letters, in form and substance satisfactory to counsel for the Underwriters, pursuant to which each such person shall agree not to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction or device which is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any shares of Common Stock or securities convertible into or exchangeable for Common Stock or (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such shares of Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise, in each case for a period of 180 days from the date of the Prospectus, without the prior written consent of Lehman Brothers Inc; (j) Prior to the Effective Date, to apply for the inclusion of the Stock in the National Market System of the Nasdaq Stock Market and to use its best efforts to complete that listing, subject only to official notice of issuance and evidence of satisfactory distribution, prior to the First Delivery Date; (k) Prior to filing with the Commission its initial Report on Form 10-Q containing the information specified in Rule 463 of the Rules and Regulations, to furnish a copy thereof to the counsel for the Underwriters and receive and consider its comments thereon, and to deliver promptly to the Representatives a signed copy of such Report on Form 10-Q or 10-K filed by it with the Commission; (l) To take such steps as shall be necessary to ensure that neither the Company nor any subsidiary shall become an "investment company" within the meaning of such term under the Investment Company Act of 1940 and the rules and regulations of the Commission thereunder. 6. Expenses. The Company agrees to pay (a) the costs incident to the authorization, issuance, sale and delivery of the Stock and any taxes payable in that connection; (b) the costs incident to the preparation, printing and filing under the Securities 12 13 Act of the Registration Statement and any amendments and exhibits thereto; (c) the costs of distributing the Registration Statement as originally filed and each amendment thereto and any post-effective amendments thereof (including, in each case, exhibits), any Preliminary Prospectus, the Prospectus and any supplement to the Prospectus, all as provided in this Agreement; (d) the costs of producing and distributing this Agreement and any other related documents in connection with the offering, purchase, sale and delivery of the Stock; (e) the filing fees incident to securing any required review by the National Association of Securities Dealers, Inc. of the terms of sale of the Stock; (f) any applicable listing or other fees; (g) the fees and expenses of qualifying the Stock under the securities laws of the several jurisdictions as provided in Section 5 (h) and of preparing, printing and distributing a Blue Sky Memorandum (including related reasonable fees and expenses of counsel to the Underwriters); and (i) all other costs and expenses incident to the performance of the obligations of the Company under this Agreement; provided that, except as provided in this Section 6 and in Section 11 the Underwriters shall pay their own costs and expenses, including the costs and expenses of their counsel, any transfer taxes on the Stock which they may sell and the expenses of advertising any offering of the Stock made by the Underwriters. 7. Conditions of Underwriters' Obligations. The respective obligations of the Underwriters hereunder are subject to the accuracy, when made and on each Delivery Date, of the representations and warranties of the Company contained herein, to the performance by the Company of its obligations hereunder, and to each of the following additional terms and conditions: (a) The Prospectus shall have been timely filed with the Commission in accordance with Section 5(a); no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and any request of the Commission for inclusion of additional information in the Registration Statement or the Prospectus or otherwise shall have been complied with. (b) No Underwriter shall have discovered and disclosed to the Company on or prior to such Delivery Date that the Registration Statement or the Prospectus or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of Weil, Gotshal & Manges LLP, counsel for the Underwriters, is material or omits to state a fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading. (c) All corporate proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Stock, the Registration Statement and the Prospectus, and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters. 13 14 (d) Brobeck, Phleger & Harrison LLP shall have furnished to the Representatives their written opinion, as special securities counsel to the Company, addressed to the Underwriters and dated such Delivery Date, in form and substance reasonably satisfactory to the Representatives, to the effect set forth in Exhibit A attached hereto: (e) Wyatt, Tarrant & Combs shall have furnished to the Representatives their written opinion, as counsel to the Company, addressed to the underwriters dated such Delivery Date, in form and substance reasonable satisfactory to the representatives to the effect set forth in Exhibit B attached hereto. (f) The Representatives shall have received from Weil Gotshal & Manges LLP, counsel for the Underwriters, such opinion or opinions, dated such Delivery Date, with respect to the issuance and sale of the Stock, the Registration Statement, the Prospectus and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters. (g) At the time of execution of this Agreement, the Representatives shall have received from PricewaterhouseCoopers LLP a letter, in form and substance satisfactory to the Representatives, addressed to the Underwriters and dated the date hereof (i) confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date hereof (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five days prior to the date hereof), the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants' "comfort letters" to underwriters in connection with registered public offerings. (h) With respect to the letter of PricewaterhouseCoopers LLP referred to in the preceding paragraph and delivered to the Representatives concurrently with the execution of this Agreement (the "initial letter"), the Company shall have furnished to the Representatives a letter (the "bring-down letter") of such accountants, addressed to the Underwriters and dated such Delivery Date (i) confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down letter (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five days prior to the date of the bring-down letter), the conclusions and findings of 14 15 such firm with respect to the financial information and other matters covered by the initial letter and (iii) confirming in all material respects the conclusions and findings set forth in the initial letter. (i) The Company shall have furnished to the Representatives a certificate, dated such Delivery Date, of its Chairman of the Board, its President or a Vice President and its Chief Financial Officer stating that: (i) The representations, warranties and agreements of the Company in Section 1 are true and correct as of such Delivery Date; the Company has complied with all its agreements contained herein; and the conditions set forth in Subsections (a) and (i) of this Section 7 have been fulfilled; and (ii) As of the Effective Date, the Registration Statement and Prospectus did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and since the Effective Date no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement or the Prospectus. (j) (i) Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus or (ii) since such date there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is, in the judgment of the Representatives, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Stock being delivered on such Delivery Date on the terms and in the manner contemplated in the Prospectus. (k) Subsequent to the execution and delivery of this Agreement there shall not have occurred any of the following: (i) trading in securities generally on the New York Stock Exchange or the American Stock Exchange or in the over-the-counter market, or trading in any securities of the Company on any exchange or in the over-the-counter market, shall have been suspended or minimum prices shall have been established on any such exchange or such market by the Commission, by such exchange or by any other regulatory body or governmental authority having jurisdiction, (ii) a banking moratorium shall 15 16 have been declared by Federal or state authorities, (iii) the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the United States or there shall have been a declaration of a national emergency or war by the United States or (iv) there shall have occurred such a material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such) as to make it, in the judgment of the Representatives impracticable or inadvisable to proceed with the public offering or delivery of the Stock being delivered on such Delivery Date on the terms and in the manner contemplated in the Prospectus. (l) The Nasdaq Stock Market shall have approved the Stock for inclusion in the National Market System, subject only to official notice of issuance and evidence of satisfactory distribution. All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters. 8. Indemnification and Contribution. (a) The Company shall indemnify and hold harmless each Underwriter, its officers and employees and each person, if any, who controls any Underwriter within the meaning of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, but not limited to, any loss, claim, damage, liability or action relating to purchases and sales of Stock), to which that Underwriter, officer, employee or controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus or in any amendment or supplement thereto, (ii) the omission or alleged omission to state in any Preliminary Prospectus, the Registration Statement or the Prospectus, or in any amendment or supplement thereto, or in any Blue Sky Application any material fact required to be stated therein or necessary to make the statements therein not misleading or (iii) any act or failure to act or any alleged act or failure to act by any Underwriter in connection with, or relating in any manner to, the Stock or the offering contemplated hereby, and which is included as part of or referred to in any loss, claim, damage, liability or action arising out of or based upon matters covered by clause (i) or (ii) above (provided that the Company shall not be liable under this clause (iii) to the extent that it is determined in a final judgment by a court of competent jurisdiction that such loss, claim, damage, liability or action resulted directly from any such acts or failures to act undertaken or omitted to be taken by such Underwriter through its gross negligence or willful misconduct), and shall reimburse each Underwriter and each such officer, employee or controlling person promptly 16 17 upon demand for any legal or other expenses reasonably incurred by that Underwriter, officer, employee or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement or the Prospectus, or in any such amendment or supplement, in reliance upon and in conformity with written information concerning such Underwriter furnished to the Company through the Representatives by or on behalf of any Underwriter specifically for inclusion therein which information consists solely of the information specified in Section 8(e). The indemnification agreement set forth in this paragraph (a) with respect to any Preliminary Prospectus shall not inure to the benefit of any Underwriter from whom the person asserting any such losses, claims, damages, liabilities or expenses purchased the Stock which is the subject thereof (or to the benefit of any person controlling such Underwriter) if at or prior to the written confirmation of the sale of such Stock a copy of the Prospectus (or the Prospectus as supplemented) was not sent or delivered to such person and the untrue statement or omission of a material fact contained in such Preliminary Prospectus was corrected in the Prospectus (or in the Prospectus as supplemented) in any case where such sending is required by the Securities Act unless the failure is the result of noncompliance by the Company with paragraph 5(a) hereof. The foregoing indemnity agreement is in addition to any liability which the Company may otherwise have to any Underwriter or to any officer, employee or controlling person of that Underwriter. (b) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the Company, its officers and employees, each of its directors and each person, if any, who controls the Company within the meaning of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Company or any such director, officer or controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained (A) in any Preliminary Prospectus, the Registration Statement or the Prospectus or in any amendment or supplement thereto, or (B) in any Blue Sky Application or (ii) the omission or alleged omission to state in any Preliminary Prospectus, the Registration Statement or the Prospectus, or in any amendment or supplement thereto, or in any Blue Sky Application any material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning such Underwriter furnished to the Company through the Representatives by or on behalf of that Underwriter specifically for 17 18 inclusion therein as set forth in Section 8(e), and shall reimburse promptly upon demand the Company and any such director, officer or controlling person for any legal or other expenses reasonably incurred by the Company or any such director, officer or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred. The foregoing indemnity agreement is in addition to any liability which any Underwriter may otherwise have to the Company or any such director, officer, employee or controlling person. (c) Promptly after receipt by an indemnified party under this Section 8 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 8 except to the extent it has been materially prejudiced by such failure and, provided further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 8. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 8 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that the Representatives shall have the right to employ counsel to represent jointly the Representatives and those other Underwriters and their respective officers, employees and controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Underwriters against the Company under this Section 8 if, in the reasonable judgment of the Representatives either (i) there is an actual or potential conflict between the position of the Company and the Underwriters or (ii) there may be defenses available to it or them that are different from or additional to those available to the Company (in any of which events the Company shall not have the right to direct the defense of such action on behalf of the Representative or Representatives with respect to such different defenses), in any of which events such fees and expenses shall be borne by the Company. No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the 18 19 indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. (d) If the indemnification provided for in this Section 8 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Stock or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Stock purchased under this Agreement (before deducting expenses) received by the Company, on the one hand, and the total underwriting discounts and commissions received by the Underwriters with respect to the shares of the Stock purchased under this Agreement, on the other hand, bear to the total gross proceeds from the offering of the shares of the Stock under this Agreement, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action 19 20 in respect thereof, referred to above in this Section shall be deemed to include, for purposes of this Section 8(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8(d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Stock underwritten by it and distributed to the public was offered to the public exceeds the amount of any damages which such Underwriter has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute as provided in this Section 8(d) are several in proportion to their respective underwriting obligations and not joint. (e) The Underwriters severally confirm and the Company acknowledges that the statements with respect to the public offering of the Stock by the Underwriters set forth in the last paragraph on the cover page of, and the information contained in paragraphs 3, 10, 11, 12, 13, 14 and 16 under the caption "Underwriting" in, the Prospectus are correct and constitute the only information concerning such Underwriters furnished in writing to the Company by or on behalf of the Underwriters specifically for inclusion in the Registration Statement and the Prospectus. 9. Defaulting Underwriters. If, on either Delivery Date, any Underwriter defaults in the performance of its obligations under this Agreement, the remaining non-defaulting Underwriters shall be obligated to purchase the Stock which the defaulting Underwriter agreed but failed to purchase on such Delivery Date in the respective proportions which the number of shares of the Firm Stock set opposite the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the total number of shares of the Firm Stock set opposite the names of all the remaining non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the remaining non-defaulting Underwriters shall not be obligated to purchase any of the Stock on such Delivery Date if the total number of shares of the Stock which the defaulting Underwriter or Underwriters agreed but failed to purchase on such date exceeds 9.09% of the total number of shares of the Stock to be purchased on such Delivery Date, and any remaining non-defaulting Underwriter shall not be obligated to purchase more than 110% of the number of shares of the Stock which it agreed to purchase on such Delivery Date pursuant to the terms of Section 3. If the foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or those other underwriters satisfactory to the Representatives who so agree, shall have the right, but shall not be obligated, to purchase, in such proportion as may be agreed upon among them, all the Stock to be purchased on such Delivery Date. If the remaining Underwriters or other underwriters satisfactory to the Representatives do not elect to purchase the shares which the defaulting Underwriter or Underwriters agreed but failed to purchase on such Delivery Date, this Agreement (or, with 20 21 respect to the Second Delivery Date, the obligation of the Underwriters to purchase, and of the Company to sell, the Option Stock) shall terminate without liability on the part of any non-defaulting Underwriter or the Company, except that the Company will continue to be liable for the payment of expenses to the extent set forth in Sections 6 and 11. As used in this Agreement, the term "Underwriter" includes, for all purposes of this Agreement unless the context requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to this Section 9, purchases Firm Stock which a defaulting Underwriter agreed but failed to purchase. Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company for damages caused by its default. If other underwriters are obligated or agree to purchase the Stock of a defaulting or withdrawing Underwriter, either the Representatives or the Company may postpone the Delivery Date for up to seven full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be necessary in the Registration Statement, the Prospectus or in any other document or arrangement. 10. Termination. The obligations of the Underwriters hereunder may be terminated by the Representatives by notice given to and received by the Company prior to delivery of and payment for the Firm Stock if, prior to that time, any of the events described in Sections 7(i) or 7(j), shall have occurred or if the Underwriters shall decline to purchase the Stock for any reason permitted under this Agreement. 11. Reimbursement of Underwriters' Expenses. If (a) the Company shall fail to tender the Stock for delivery to the Underwriters by reason of any failure, refusal or inability on the part of the Company to perform any agreement on its part to be performed, or because any other condition of the Underwriters' obligations hereunder required to be fulfilled by the Company is not fulfilled, the Company will reimburse the Underwriters for all reasonable out-of-pocket expenses (including fees and disbursements of counsel) incurred by the Underwriters in connection with this Agreement and the proposed purchase of the Stock, and upon demand the Company shall pay the full amount thereof to the Representative(s). If this Agreement is terminated pursuant to Section 9 by reason of the default of one or more Underwriters, the Company shall not be obligated to reimburse any defaulting Underwriter on account of those expenses. 12. Notices, etc. All statements, requests, notices and agreements hereunder shall be in writing, and: (a) if to the Underwriters, shall be delivered or sent by mail, telex or facsimile transmission to Lehman Brothers Inc., Three World Financial Center, New York, New York 10285, Attention: Syndicate Department (Fax: 212-526-6588), with a copy, in the case of any notice pursuant to Section 11(d), to the Director of Litigation, Office of the General Counsel, Lehman Brothers Inc., 3 World Financial Center, 10th Floor, New York, NY 10285; 21 22 (b) if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: John Hundley (Fax: (502) 515-3101); provided, however, that any notice to an Underwriter pursuant to Section 8(c) shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its acceptance telex to the Representatives, which address will be supplied to any other party hereto by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof. The Company shall be entitled to act and rely upon any request, consent, notice or agreement given or made on behalf of the Underwriters by Lehman Brothers Inc. 13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the Underwriters, the Company, and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (A) the representations, warranties, indemnities and agreements of the Company contained in this Agreement shall also be deemed to be for the benefit of the person or persons, if any, who control any Underwriter within the meaning of Section 15 of the Securities Act and (B) the indemnity agreement of the Underwriters contained in Section 8(b) of this Agreement shall be deemed to be for the benefit of directors of the Company, officers of the Company who have signed the Registration Statement and any person controlling the Company within the meaning of Section 13 of the Securities Act. Nothing in this Agreement is intended or shall be construed to give any person, other than the persons referred to in this Section 16, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. 14. Survival. The respective indemnities, representations, warranties and agreements of the Company and the Underwriters contained in this Agreement or made by or on behalf on them, respectively, pursuant to this Agreement, shall survive the delivery of and payment for the Stock and shall remain in full force and effect, regardless of any investigation made by or on behalf of any of them or any person controlling any of them. 15. Definition of the Terms "Business Day" and "Subsidiary". For purposes of this Agreement, (a) "business day" means each Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules and Regulations. 16. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of New York. 17. Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original but all such counterparts shall together constitute one and the same instrument. 22 23 18. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. 23 24 If the foregoing correctly sets forth the agreement between the Company and the Underwriters, please indicate your acceptance in the space provided for that purpose below. Very truly yours, HIGH SPEED ACCESS CORP. By --------------------------------- Name: Title: Accepted: LEHMAN BROTHERS INC. J.P. MORGAN SECURITIES INC. BANC OF AMERICA SECURITIES LLC CIBC OPPENHEIMER CORP. For themselves and as Representatives of the several Underwriters named in Schedule 1 hereto By LEHMAN BROTHERS INC. By ------------------------------------- Authorized Representative 24 25 SCHEDULE 1
Number of Underwriters Shares - ------------ --------- Lehman Brothers Inc.................................... J.P. Morgan Securities Inc. Banc of America Securities LLC......................... CIBC Oppenheimer Corp.................................. Total --
26 _____________, 1999 High Speed Access Corp 4100 E. Mississippi Avenue Suite 1150 Denver, Colorado 80246 Lehman Brothers Inc. JP Morgan Securities Inc. NationsBanc Montgomery Securities LLC CIBC Oppenheimer Corp. As Representatives of the Several Underwriters c/o Lehman Brothers Inc. Three World Financial Center New York, New York 10285 Ladies and Gentlemen: The undersigned understands that you and certain other firms propose to enter into an Underwriting Agreement (the "Underwriting Agreement") providing for the purchase by you and such other firms (the "Underwriters") of shares (the "Shares") of Common Stock, par value $.01 per share (the "Common Stock"), of High Speed Access Corp. (the "Company") and that the Underwriters propose to reoffer the Shares to the public (the "Offering"). In consideration of the execution of the Underwriting Agreement by the Underwriters, and for other good and valuable consideration, the undersigned hereby irrevocably agrees that, without the prior written consent of Lehman Brothers Inc., the undersigned will not, directly or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any shares of Common Stock (including, without limitation, shares of Common Stock that may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and shares of Common Stock that may be issued upon exercise of any option or warrant) or securities convertible into or exchangeable for Common Stock (other than the Shares) owned by the undersigned on the date of execution of this Lock-Up Letter Agreement or on the date of the completion of the Offering, or (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such shares of Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise, for a period of 180 days after the date of the final Prospectus relating to the Offering. 27 In furtherance of the foregoing, the Company and its Transfer Agent are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Lock-Up Letter Agreement. It is understood that, if the Company notifies you that it does not intend to proceed with the Offering, if the Underwriting Agreement does not become effective, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares, we will be released from our obligations under this Lock-Up Letter Agreement. The undersigned understands that the Company, the Underwriters and the stockholders selling shares in the Offering will proceed with the Offering in reliance on this Lock-Up Letter Agreement. The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Letter Agreement and that, upon request, the undersigned will execute any additional documents necessary in connection with the enforcement hereof. Any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Very truly yours, By: -------------------------------------- Name: Title: Dated: ----------------- 2 EX-5.1 3 OPINION OF BROBECK, PHLEGER & HARRISON LLP 1 EXHIBIT 5.1 BROBECK PHLEGER & HARRISON LLP ATTORNEYS AT LAW June 3, 1999 High Speed Access Corp. 4100 East Mississippi Avenue Denver, Colorado 80246 Re: High Speed Access Corp. Registration Statement on Form S-1 for Delaware Shares of Common Stock Ladies and Gentlemen: We have acted as counsel to High Speed Access Corp., a Delaware corporation (the "Company"), in connection with the proposed issuance and sale by the Company of up to 16,758,407 shares of the Company's Common Stock (the "Shares") pursuant to the Company's Registration Statement on Form S-1 (the "Registration Statement") filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"). This opinion is being furnished in accordance with the requirements of Item 16(a) of Form S-1 and Item 601(b)(5)(i) of Regulation S-K. We have reviewed the Company's charter documents and the corporate proceedings taken by the Company in connection with the issuance and sale of the Shares. Based on such review, we are of the opinion that the Shares have been duly authorized, and if, as and when issued in accordance with the Registration Statement and the related prospectus (as amended and supplemented through the date of issuance) will be legally issued, fully paid and nonassessable. We consent to the filing of this opinion letter as Exhibit 5.1 to the Registration Statement and to the reference to this firm under the caption "Legal Matters" in the prospectus which is part of the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act, the rules and regulations of the Securities and Exchange Commission promulgated thereunder, or Item 509 of Regulation S-K. 2 BROBECK PHLEGER & HARRISON LLP ATTORNEYS AT LAW High Speed Access Corp. Page 2 This opinion letter is rendered as of the date first written above and we disclaim any obligation to advise you of facts, circumstances, events or developments which hereafter may be brought to our attention and which may alter, affect or modify the opinion expressed herein. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company or the Shares. Very truly yours, BROBECK, PHLEGER & HARRISON LLP EX-10.9 4 NETWORK SERVICES AGREEMENT 1 Exhibit 10.9 NETWORK SERVICES AGREEMENT This NETWORK SERVICES AGREEMENT ("Agreement") is dated as of this 25th day of November, 1998, ("Effective Date") by and between: HIGH SPEED ACCESS CORP. 1000 West Ormsby Ave., Suite 210 Louisville, Kentucky 40210 ("HSAC") CHARTER COMMUNICATIONS, INC. 12444 Powerscourt Dr., Suite 400 St. Louis, MO 63131 ("Charter") and MARCUS CABLE, INC. 2911 Turtle Creek Blvd., Suite 1300 Dallas, TX 75219 ("Marcus") RECITALS A. Marcus and Charter (referred to individually and together herein as the "Operator") own and operate Cable Systems and wish to offer some of their Cable Subscribers in the Cable Systems listed on EXHIBIT A to this Agreement the opportunity to utilize the applicable Cable Systems for Internet access and related services. B. HSAC provides Internet access and related services through various sources including Cable Systems. C. HSAC, Charter, Marcus, and Vulcan Ventures, Incorporated ("Vulcan") are entering into that certain Systems Access and Investment Agreement of even date herewith ("Systems Access Agreement"), and HSAC and Vulcan are entering into that certain Programming Content Agreement of even date herewith ("Content Agreement"). The Access Agreement and Content Agreement are incorporated herein by this reference. D. Operator wishes to retain HSAC to provide Internet access and related services to certain of its Cable Subscribers, and HSAC wishes to access the Cable Subscribers in the Cable Systems listed on EXHIBIT A and use certain other Cable Systems of Operator to provide Internet access and related services to such Cable Subscribers. NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows: - 1 - 2 1. DEFINITIONS. In addition to the other capitalized terms defined elsewhere in this Agreement, the following terms will have the meanings set forth below: 1.1. "Activation Schedule" means the schedule(s) for the Full HSAC Services Roll-Out of Committed Systems to be agreed upon by Operator and HSAC pursuant to Section 2.4 hereof. 1.2. "Cable Subscriber" means a cable TV subscriber or potential subscriber residing in a Home Passed in a Committed System regardless of whether such cable TV subscriber or potential subscriber subscribes to HSAC Services. 1.3. "Cable System(s)" means any radio frequency ("RF") cable television franchise or hybrid fiber-coaxial RF Plant distribution system ("RF Plant") serving a geographically proximate group of residences, businesses, or other locations. Cable Systems include both One-Way Systems and Two-Way Systems. 1.4. "Committed System(s)" means the Cable Systems that Operator or any Potential Operator has specifically designated in such Operator's or Potential Operator's sole and absolute discretion as Committed Systems pursuant to Section 2.1 and 2.2, that such Operator or Potential Operator reasonably believes will conform to Section 4 of the Systems Access Agreement, and that are either listed in EXHIBIT A attached hereto as of the Effective Date or are added to EXHIBIT A by amendment during the Term pursuant to Section 2.2. A Cable System shall be deemed to no longer be a Committed System if (i) it has been withdrawn by an Operator or Potential Operator pursuant to Section 2.3 or 18 hereof, (ii) this Agreement has expired or been terminated for any reason pursuant to Section 18 hereof, or (iii) such Committed System is no longer controlled by the applicable Operator or Potential Operator for any reason. 1.5. "Confidential Information" means any and all information related to either HSAC's business or Operator's business in any form, including, without limitation, (i) customer information, (ii) the terms and conditions of this Agreement, (iii) all dates, summaries, reports or information of all kinds, whether oral or written, acquired, devised or developed in any manner by or from the disclosing party's files, and (iv) financial, statistical, personnel, or technical information, software or documentation, which the disclosing party deems proprietary or confidential. 1.6. "Conversion Requirements" means such requirements as are set out in EXHIBIT H. 1.7. "Customer List(s)" means the Operator's list of Cable Subscribers in each Committed System and related subscriber information. 1.8. "Data Subscriber" means a Cable Subscriber residing in a Home Passed in a Committed System who subscribes to HSAC Services regardless of whether such subscriber - 2 - 3 subscribes to Operator's cable TV service. Each Multiple Dwelling Unit ("MDU") constitutes not more than a single Data Subscriber for purpose of this Agreement. 1.9. "Full HSAC Services Roll-Out" means the creation, staffing and operation of every business, technical and service aspect necessary to fully implement the HSAC Services. 1.10. "Gross Revenues" means all gross revenues collected from Data Subscribers for the HSAC Services, including, without limitation, monthly subscription fees regardless of which party handles the billing and collection, and as used herein, does not include (i) applicable sales or use taxes, (ii) federal, state or local franchise fees, (iii) Installation Fees or any other set-up charges assessed by HSAC, Operators or any authorized third-party reseller or installer (subject to the limitations set forth in Section 6.2 below), (iv) rentals paid by Data Subscribers on Home Equipment Packages (subject to the limitations set forth in Section 6.2 below) (v) charges for security encryption software sold or sublicensed to Data Subscribers under Section 9 of this Agreement, and (vi) add-on ISP fees charged by HSAC to Data Subscribers for commercial web-hosting activities (i.e., local caching on HSA's servers of commercial websites, not "complimentary" personal home page hosting of 5MB or less webpages). 1.11. "Home Equipment Package" means the cable modem and related power converter/supply, network interface card (NIC), patch cable, and related software for each Data Subscriber. 1.12. "Homes Passed" means residences that are connected (i.e., a residence with an installed cable "drop" from a Committed System or which is eligible for such cable "drop" by virtue of a Committed System passing such residence) to the cable RF Plant/head-ends of a Committed System, regardless of whether the persons residing in such residences subscribe to cable TV services. Each MDU constitutes a single Home Passed for purposes of this Agreement. 1.13. "HSAC Network Equipment" means the equipment that HSAC employs for operation of the HSAC Services by connecting such equipment to the head-end of Operator's Cable Systems. HSAC Network Equipment includes, without limitation, all monitoring devices, telecommunications equipment, storage devices, computing and data processing equipment, and software. 1.14. "HSAC Services" means the design, engineering, construction (excluding the RF Plant portion of the Cable System), installation, activation, beta testing, ISP and data network operation and management, sales and marketing, customer service and "call center" support, billing (as agreed to the parties on a case-by-case basis), pre- and post-Launch Date deployment and operation, and maintenance of Internet access and related services from the Data Subscriber's computer and cable modem through any Committed System to HSAC's Internet Portal including, without limitation, interfacing HSAC Network Equipment with Committed Systems to allow Data Subscribers, for a monthly fee or other charges, to browse - 3 - 4 the World Wide Web, read news groups, and receive and send electronic mail ("E-mail") and perform related activities. 1.15. "Installation Fee" means the gross revenues collected directly or indirectly from a Data Subscriber by HSAC, Operator, or any authorized third-party reseller or installer for the installation and connection of a Home Equipment Package for such Data Subscriber to receive HSAC Services but does not include (i) applicable sales or use taxes, (ii) federal, state or local franchise fees. 1.16. "Internet Portal" means a physical site sometimes referred to as a "point of presence" where there is a collection of equipment including routers, data storage devices, and modems that are used to connect to customers and leased telecommunication lines that connect such site directly to a part of the Internet backbone. 1.17. "ISP" or "Internet Service Provider" means an entity that provides Internet access to its customers. 1.18. "Launch Date" means, with respect to a particular Committed System, the date on which HSAC or Operator, as the case may be, is required to commence revenue billing for Data Subscribers in such Committed System pursuant to the Activation Schedule. 1.19. "Minimum Penetration Rate" means (1) with respect to a Committed System where the Operator is the sole provider of RF cable/coaxial landline connectivity to Homes Passed, that 4% of the Homes Passed in each Committed System shall have subscribed as Data Subscribers within eighteen (18) months of the Launch Date, and (ii) with respect to an overbuilt Committed System where another MSO or utility competes in the same geographic area with the Operator for RF cable/landline connectivity to Homes Passed, that a customer base equivalent in number to 4% of the Operator's actual paying cable customers in each such Committed System shall have subscribed as Data Subscribers within eighteen (18) months of the Launch Date (e.g., Newman, Georgia would qualify as an overbuilt Committed System). 1.20. "MSO" means an entity that owns, controls, or operates multiple Cable Systems that is generally referred to as a Multiple System Operator in the cable television industry. 1.21. "One-Way" means a Cable System that can only deliver television signals, data, or other digital or analog information downstream from the cable head end to the Cable Subscriber, and must use another means, including without limitation a telephone line and modem, to send any information from the Cable Subscriber to an Internet Portal. 1.22. "Other Agreements" means the Systems Access Agreement and the other agreements set forth in subsections (i), (iii), (iv), (v), (vi), (vii), (viii) and (ix) of Section 1.24 of the Systems Access Agreement. - 4 - 5 1.23. "Potential Operators" means, as the case may be or the context requires, any MSO or operator of packet-switched data systems now or hereafter owned or controlled by, directly or indirectly, or affiliated with Paul G. Allen, Operators or their respective affiliates or subsidiaries. 1.24. "System Data Requirements" means the minimum technical requirements set forth on EXHIBIT B hereto to which the RF Plants in Operators' Committed Systems must conform. 1.25. "System Service Requirements" means the minimum technical and service requirements set forth on EXHIBIT G hereto to which the HSAC Services must conform. 1.26. "Termination Fee" means an amount equal to one-half of the net present value of the Gross Revenues which would otherwise have been generated for the HSAC Services from the base of Data Subscribers existing as of the date of termination in a Committed System through the remainder of the Term. If the parties cannot agree upon the amount of any Termination Fee, they shall jointly engage and split the cost of a neutral appraiser or valuation specialist to place a value on such Termination Fee. 1.27. "Two-Way" means a Cable System that can both send and deliver television signals, data, or other digital or analog information upstream and downstream to and from the cable head-end to and from the Cable Subscriber, without using another means to send or receive any information from the Cable Subscriber to an Internet Portal. 1.28. Other Definitions. The following additional defined terms shall have the meanings ascribed to them in the Sections indicated below: "24x7" 7.2.5 "Additional System Notice" 2.2 "Attainment Measures" 2.3 "Call Center" 7.2.5 "Force Majeure" 21 "HSAC's Share" Exhibit D "Initial Term" 16 "Intellectual Property Laws" 13.1.5 "MDU" 1.8 "NOC" 7.2.5 "Notice" 7.3.4 "Operator's Share" Exhibit D "Out-of-Compliance Event" Exhibit D "RF" 1.3 "RF Plant" 1.3 "RBOC" 2.4.2 "Renewal Term" 16 "Service Failure" 7.3.4 - 5 - 6 "Statement" Exhibit D "Systems Access Agreement"Recital C "Term" 16 "Termination Events" 18.3 2. EXCLUSIVE RIGHT TO PROVIDE HSAC SERVICES TO COMMITTED SYSTEMS; ADDITIONAL COMMITTED SYSTEMS; INSPECTION AND ACCEPTANCE CRITERIA. 2.1. Exclusive Access. During the Term, HSAC shall have the sole and exclusive right to access the Committed Systems listed on EXHIBIT A to this Agreement for purposes of performing the HSAC Services and to perform the HSAC Services for the Committed Systems, subject to and in accordance with the terms herein and the Systems Access Agreement. Subject to the procedures set forth in this Section 2, HSAC shall perform a Full HSAC Services Roll-Out on every such Committed System within the time frames specified for a particular Committed System in the Activation Schedule. 2.2. Designation of Additional Systems. During the Term (and subject to the procedures set forth in this Section 2), Operator and Potential Operators shall have the unilateral right, but not the obligation, to designate an unlimited number of additional Cable Systems as Committed Systems under this Agreement, and such right shall extend to any and all Cable Systems now owned or managed or hereafter acquired or managed by Operator or Potential Operator. Operator and Potential Operators shall exercise their right to designate additional Cable Systems as Committed Systems hereunder by delivering written notice of such designation to HSAC (an "Additional System Notice"). Upon HSAC's receipt of such Additional System Notice, HSAC and the applicable Operator shall amend this Agreement to add such Cable System(s) to EXHIBIT A, and the Cable System(s) designated in such Additional System Notice shall automatically become Committed Systems hereunder. If a Potential Operator designates Committed Systems hereunder, the parties and such Potential Operators shall amend this Agreement to include such Potential Operator as an Operator for all purposes hereunder. 2.3. Commissioning of RF Plant; System Data Requirements. Within sixty (60) days of (i) the Effective Date (as to the Committed Systems referenced in Section 2.1 above), and (ii) HSAC's receipt of an Additional System Notice (as to the Committed Systems referenced in Section 2.2 above), HSAC shall perform an engineering inspection of Operator's RF Plant in the applicable Committed Systems and deliver to Operator, HSAC's recommendations for any upgrades or repairs (if HSAC fails to deliver such recommendations for any Committed System within such 60 day period, then such Committed Systems will be deemed to satisfy the System Data Requirements) which may be necessary for the Committed System to conform to System Data Requirements ("Attainment Measures"). Operator acknowledges and agrees that (i) in order for HSAC to deliver HSAC Services to Data Subscribers, each Committed System must satisfy the System Data Requirements, (ii) HSAC is not responsible for whether the Committed Systems satisfy the System Data Requirements, and (iii) Operator shall undertake (or refuse to take, as the case may be) those Attainment - 6 - 7 Measures necessary to cause the Committed System's RF Plant to attain, and thereafter maintain in conformity with, the System Data Requirements during the Term of this Agreement. If the Operator declines to effect appropriate Attainment Measures for any particular Committed System, this Agreement shall terminate as to such Committed System without liability of any kind to either Operator or HSAC, and such Committed System shall be removed from EXHIBIT A of this Agreement. If the Operator agrees to effect the Attainment Measures, the Activation Schedule shall be amended to establish the milestones for Operator to bring the Committed Systems into conformity with the System Data Requirements including a reasonable amount of additional time for HSAC to complete its Full HSAC Services Roll-Out for such Committed Systems. 2.4. Activation Schedule. 2.4.1. The Activation Schedule for the initial Committed Systems as of the Effective Date hereunder shall be as set forth in EXHIBIT A. Within forty-five (45) days of HSAC's receipt of an Additional System Notice, Operator and HSAC shall negotiate and agree in good faith upon a feasible, reasonable "critical path" timelines for each Committed System's Full HSAC Services Roll-Out, and memorialize such timeline in an Activation Schedule (as same may be amended from time to time as contemplated in Section 2.3 above to account for the Operator's taking of Attainment Measures and as the parties may otherwise agree in writing). The Activation Schedule shall set out implementation milestones, including, without limitation: (i) that Operator shall notify HSAC when a particular Committed System conforms (or when the Operator expects such Committed System to conform if the taking of Attainment Measures is required) with the System Data Requirements, (ii) the Launch Date, and (iii) the date when the Full HSAC Services Roll-Out in each Committed System shall be completed. In the event that the parties cannot agree upon a reasonable Activation Schedule for any additional Committed Systems designated under Section 2.2 within forty-five (45) days of HSAC's receipt the applicable Additional Systems Notice, then the provisions of Section 6.4 of the Systems Access Agreement shall apply, and HSAC will implement the HSAC Services for such additional Committed Systems at a rate of eight (8) head-ends per month (such head-ends to be designated by Operator), with Operators' head-ends receiving priority for activation over head-ends owned and/or operated by other customers of HSAC. 2.4.2. HSAC will not be deemed in default of a scheduled Launch Date if (i) a Regional Bell Operating Company ("RBOC") or other telephone network provider (a "telco") is late in installing a T-1 line or backbone connection necessary for the HSAC Services following the submission of a complete order by HSAC to such party before the lead times required by such party in order to install such T-1 line or backbone connection in sufficient time to meet the applicable Launch Date, (ii) an equipment vendor (e.g., COM21) fails to meet its delivery deadlines with respect to the HSAC Network Equipment or Home Equipment Packages following the submission of a complete order by HSAC to such party before the lead times required by such party in order to deliver such equipment in sufficient - 7 - 8 time to meet the applicable Launch Date, or (iii) HSAC does not receive any specialized equipment required to carry the Vulcan Content (as defined in the Content Agreement), which equipment is otherwise not required in order to perform the HSAC Services, on a timely basis following the submission of a complete order by HSAC to the vendor of such equipment before the lead times required by such vendor in order to deliver such equipment in sufficient time for HSAC to meet the applicable Launch Date. 3. HSAC OBLIGATIONS AFTER COMMISSIONING. As soon as Operator notifies HSAC that any head-end in a Committed System conforms to the System Data Requirements, HSAC agrees that it shall in conformity with the Activation Schedule: 3.1. install and connect the HSAC Network Equipment (subject to Section 6.2); 3.2. arrange at its expense for data transport (via telco, wireless, etc.) from the Internet backbone to the head-ends of Operator's RF Plant for a Committed System; 3.3. arrange telco return path circuits in One-Way Committed Systems; 3.4. commission the HSAC Network Equipment interface; 3.5. activate the data through-put portion of the HSAC Services; 3.6. begin marketing HSAC Services in the relevant areas and begin offering subscriptions to potential Data Subscribers; and 3.7. complete the Full HSAC Services Roll-Out for such Committed System and provide the HSAC Services for such Committed Systems. 4. UPGRADES. After initial activation of HSAC Services in a Committed System, the Operator may reasonably request upgrades to the HSAC Network Equipment, and HSAC shall make such upgrades at its expense within a reasonable time period, provided that such upgrades are commercially reasonable. HSAC shall also make substantially the same upgrades to the HSAC Network Equipment that HSAC makes to substantially similar equipment that HSAC uses to provide HSAC or third party customers access to the Internet. HSAC will provide Operator with all updates and upgrades that HSAC develops or uses on any Cable System at the same prices as such updates and upgrades are provided by HSAC to other customers of HSAC. Neither party shall unilaterally change HSAC Network Equipment or Operator's RF Plant in any way that renders a Committed System or the HSAC Services inoperable without consulting with the other party regarding the allocation of costs relating to such changes or upgrades. 5. ALLOCATION OF MAINTENANCE OBLIGATIONS. 5.1. Allocation. Following the commissioning of each Committed System, HSAC shall maintain all HSAC Network Equipment. Operator shall maintain the integrity of its RF - 8 - 9 Plant for each Committed System (including, without limitation, all coaxial cable, head-end equipment, connectors, amplifiers and passive devices and splitters). HSAC shall not be required to repair or maintain any portion of the RF Plant of any Committed System. Operator shall also provide technical personnel to eliminate signal leakage and maintain a proper connection interface of the HSAC Network Equipment to the RF Plant for each Committed System. 5.2. Damage to Operator's Facilities. HSAC shall use its best efforts to avoid damaging the Operator's RF Plant for each Committed System, and shall not move, relocate, alter, sell, lease, license, assign, encumber or otherwise tamper with the RF Plant of any Committed Systems. Without limiting Operator's rights and remedies, HSAC shall pay to repair or replace any of Operator's equipment that HSAC or its employees damage and shall pay Operator for any damages resulting therefrom. Such repairs shall return such Operator equipment to at least the same condition it was before the damage, and any replacement equipment will be at least the same quality as the Operator equipment that is replaced. 5.3. Damage to HSAC Network Equipment. The HSAC Network Equipment shall be the property of HSAC. Operator shall use its best efforts to avoid damaging the HSAC Network Equipment, and shall not move, relocate, alter, sell, lease, license, assign, encumber or otherwise tamper with the HSAC Network Equipment. Without limiting HSAC's rights and remedies, Operator shall pay to repair or replace any of HSAC's equipment that Operator or its employees damage and shall pay HSAC for any damages resulting therefrom. Such repairs shall return the HSAC Network Equipment to at least the same condition it was before the damage, and any replacement equipment will be at least the same quality as the HSAC Network Equipment that is replaced. 6. HOME EQUIPMENT PACKAGE. 6.1. Equipment Choice. Operator and HSAC shall mutually choose the vendor/brand* of HSAC Network Equipment and cable modems for each Committed System, and HSAC shall procure the Home Equipment Packages for Data Subscribers (except for Data Subscribers who purchase their own). Such Home Equipment Packages shall be installed in accordance with Section 6.2 below. Upon installation of such Home Equipment Packages, HSAC shall monitor and maintain electronically the Home Equipment Package for each Data Subscriber. Unless purchased directly by a Data Subscriber from Operator or a third party reseller/retailer, HSAC shall retain ownership of the Home Equipment Packages. Each Data Subscriber shall be required to sign a statement acknowledging HSAC's ownership of the Home Equipment Package. (*For purposes of this Agreement, Com2l, Terayon and any other brands the parties may from time to time agree upon shall be deemed acceptable brands.) 6.2. Installation And Modem Revenue Sharing. Either party may install Home Equipment Packages or engage qualified third party installers to install Home Equipment Packages for Data Subscribers. The party that installs Home Equipment Packages shall keep 100% of the Installation Fee (which Installation Fee will not exceed one hundred fifty dollars - 9 - 10 ($150) per Data Subscriber). If HSAC sells equipment compressing any part of the Home Equipment Package to a Data Subscriber, then HSAC shall pay 50% of the gross profit (i.e., the gross "retail" sales price (not including applicable sales taxes) less its direct wholesale cost for such equipment and any other direct, out-of-pocket sales expense) it receives from such sale. If Operator sells equipment that is part of the Home Equipment Package, then Operator shall keep 100% of the Gross Revenues from [ILLEGIBLE]. If HSAC rents any equipment that is part of the Home Equipment Package to a Data Subscriber, then HSAC shall be entitled to retain 100% of such rentals up to a maximum of $14.95 per month per Data Subscriber, and all rentals in excess of such amount will be divided equally between HSAC and Operators. Nothing in this Section 6.2 shall limit Operator's ability to charge and retain separate fees for connecting any Cable Subscriber's or Data Subscriber's home to a Cable System or adding additional outlets in a Cable Subscriber's or Data Subscriber's home. 7. ALLOCATION OF GENERAL OPERATIONAL RESPONSIBILITIES OF OPERATOR AND HSAC. During the Term of this Agreement as to each Committed System, the following provisions shall be applicable: 7.1. Operator Responsibilities. Operator agrees to maintain its RF Plants and facilities in the Committed Systems in conformity with industry standards and the System Data Requirements set forth in EXHIBIT B for the carriage of HSAC Services throughout the Committed Systems. 7.2. HSAC Responsibilities. Following the commissioning of each Committed System, in addition to the obligations set forth in Section 3.1 above, HSAC agrees that it shall throughout the Term: 7.2.1. complete the Full HSAC Services Roll-Out and provide the HSAC Services for Data Subscribers in the Committed Systems; 7.2.2. undertake and ensure that the HSAC Services, all HSAC Network Equipment, and all software and services related to the HSAC Services attain and maintain compliance with industry standards and the System Service Requirements; 7.2.3. take all reasonable efforts to ensure that HSAC Services are received only by Data Subscribers, and to take all reasonable efforts to prevent unlawful reception, retransmission, or use of the HSAC Services by any means, whether now known or hereafter devised, without the prior written authorization of HSAC; 7.2.4. following activation of HSAC Services, control the flow of data that it manages from the Committed Systems to the Internet Portal, and HSAC shall be responsible for third-party software utilized to perform the HSAC Services; 7.2.5. provide a toll-free telephone number and a Network Operating Center ("NOC") and Customer Service Call Centers ("Call Center") staffed 24 hour a day, 7 day a - 10 - 11 week basis (including weekends and holidays) via pager, cell phone, or similar means ("24x7") with telephone support representatives to take calls from Data Subscribers in the Committed System regarding Service Failures, the operation/performance of the Home Equipment Package, and the Internet browser and electronic mail software provided by third parties. HSAC shall answer all such Data Subscriber calls with a greeting mutually agreed upon by the parties. (Operator shall similarly provide HSAC with 24 x 7 "customer service response" for the Committed System/RF portion of the HSAC Services.) HSAC shall make its engineers and technicians available as needed to provide technical support and to serve as liaisons between or among the Data Subscribers, Operator, and HSAC. 7.3. Certain Joint Responsibilities. Operators and HSAC agree: 7.3.1. that if either party becomes aware that any unauthorized party is receiving or transmitting any part of the HSAC Services, then such party shall notify the other party in writing of the name and address of such party if and when the first party actually knows the name and address of such third party; 7.3.2. to exercise their commercially reasonable efforts to maintain the secrecy of (and occasionally rotate) their software passwords, and notify the other if they become aware that their system passwords may be or have become compromised; 7.3.3. to comply with all applicable local, state and federal laws, rules, regulation and franchises in all material respects; 7.3.4. to notify the other's NOC and Call Center promptly of any material outages, interruptions, or degradation of service in either Operator's RF Plant or the data portion of the HSAC Services (a "Service Failure") of which they become aware from any source (i.e., a "Notice"). To the extent a Service Failure is traceable to an RF Plant defect or malfunction (whether or not due to Force Majeure), Operator shall provide technical personnel within 4 hours (or on a commercially reasonable basis) of such Notice to respond to such Service Failure and shall repair or replace any malfunctioning equipment as soon as commercially practicable. To the extent the Service Failure is traceable to HSAC Network Equipment or a data stream malfunction, HSAC shall correct the Service Failure within 4 hours (or on a reasonable commercial efforts basis) of such Notice or replace any malfunctioning equipment as soon as commercially practicable; and 7.3.5. to cooperate and work together diligently to respond to all Service Failures, and coordinate the scheduling of maintenance that might interfere with the HSAC Services, provided that HSAC shall be responsible for all NOC and customer service functions and requirements not related to the RF Plant of Operator's Cable Systems. Both parties acknowledge that Service Failure-related downtime, incorrect or inaccurate Data Subscriber invoicing, and infrastructure problems shall be given highest priority attention at all times. Operator and HSAC shall each have access to the other's NOC and Call Center on a - 11 - 12 24x7 basis for the purpose of troubleshooting Service Failures pursuant to agreed-upon Escalation Procedures, which are attached hereto as EXHIBIT C. 7.4. Billing; End User Agreement. The procedure for processing subscriptions for HSAC Services, the invoicing of Data Subscribers, and the sharing of Gross Revenues shall be as set forth on EXHIBIT D attached hereto. HSAC shall also distribute to and require Data Subscribers to sign an "End User/Services Agreement" substantially in the form of EXHIBIT E attached hereto which describes the limits placed on Data Subscribers' rights; provided, that HSAC shall be under no obligation to enforce the terms of such End User/Services Agreement. 7.5. Data Subscriber Cancellation/Disconnect. In the event a Data Subscriber terminates cable TV services with Operator and also cancels its subscription to HSAC Services at the same time, Operator shall notify HSAC of same and use its commercially reasonable efforts to recover and store (but does not guarantee that it shall be able to recover), any rented Home Equipment Package (except for the Ethernet card inside the customer's PC) for and on behalf of HSAC. HSAC and Operator agree that in the event a Data Subscriber cancels only its subscription to HSAC Services, HSAC shall likewise notify Operator and be solely responsible for recovering any rented Home Equipment Package. 7.6. Promotional and Build-Out Activities. 7.6.1. The parties shall cooperate reasonably with one another regarding the marketing and promotion of HSAC Services to Cable Subscribers with the aim of maximizing the number of Data Subscribers to the extent economically feasible. Such cooperation shall include (i) at Operator's discretion, installation of a "drop/install" at Operator's reasonable expense (may be passed on to the Cable Subscriber) to any Home Passed, (ii) at HSAC's discretion, Operator's installation of a "drop/install" for any commercial sites in a Committed System for which HSAC will pay Operator's reasonable expenses (that may be passed on to the commercial customer), and (iii) reasonable provision of free advertising for the HSAC Services in the form of "ad avails" (i.e., advertising space which is not sold or committed to third parties that Operator designates at its sole discretion as being available for advertising for HSAC Services, "Charter Pipeline," "Marcus OnLine", "Charter Communications", "Marcus Cable", or other brands as Operator may designate at its sole discretion) on Operator's cable TV system, space in bills, statement messaging, and space in installation packs. HSAC shall be responsible for the incremental expenses (if any) associated with Operator's handling bill stuffers, space in bills, statement messaging, and installation packs that are implemented at HSAC's request. In addition, HSAC shall reimburse Operator for forty thousand dollars ($40,000) dollars annually in the aggregate expended by Operator for television advertising to promote the Operator's Internet access brands under which HSAC Services are provided. 7.6.2. All marketing and promotional materials, and any materials that have an Operator owned or controlled trade or service mark on them, will comply with the Quality - 12 - 13 Controls specified on EXHIBIT F hereto. Before any such materials prepared by HSAC are used, HSAC will transmit a copy to Operator, and Operator will have fifteen (15) days in which to reasonably reject such materials or to request changes be made to such materials. If Operator does not respond to HSAC within such fifteen (15) day period, such materials will be deemed approved for distribution. All marketing and promotional materials will comply with the branding provisions set forth in Section 7.6.5 below and shall be of a standard of quality comparable to marketing and promotional materials prepared and distributed by Operator. Operator grants to HSAC a worldwide, non-exclusive royalty-free licensee to use and reproduce Operator's trademarks, service marks, and brands and to distribute any marketing and promotional materials supplied to HSAC by Operator (in Operator's sole discretion) for purposes of advertising and marketing the HSAC Services in accordance with the terms and conditions hereof. 7.6.3. HSAC's marketing team will meet quarterly with each of Operator's regional marketing teams and jointly review marketing plans, strategy, and materials for each Committed System to assure acceptable quality standards in accordance with the procedures in EXHIBIT I and Charter's current Charter Pipeline Branding Guidelines. By October 31 of each calendar year during the Term, HSAC shall also provide Operator with a copy of HSAC's marketing plan (which when implemented shall substantially conform to Operator's approved annual marketing plans for the following year), which Operator may approve or reject in its reasonable discretion. The parties agree to confer and work together to effect any appropriate revisions to HSAC's annual marketing plans and materials, provided that Operator shall not be entitled to unilaterally dictate HSAC's levels of marketing expenditures or HSAC's creative decisions or choice or relative emphasis across various marketing channels, so long as the foregoing shall not result in any detriment to or denigration of Operator's brand image. 7.6.4. Subject to Section 7.8 below, Operator shall provide HSAC access (both print copy and electronically at HSAC's expense) to its Customer Lists and other customer databases on a confidential basis solely for the purpose of developing and implementing HSAC's marketing plans, as well as providing "On-Line Help-Desk" modem configuration support, Data Subscriber sign-up, and ongoing customer service. 7.6.5. Branding (a) Without limiting HSAC's obligations under the Content Agreement, the parties agree that all HSAC Services (and all other Internet access and related services performed by HSAC within any Committed Systems' areas) shall be marketed, deployed, and supported in the Committed Systems only under the trademarks "Charter Pipeline," "Marcus OnLine", "Charter Communications", "Marcus Cable" or other brands, service marks, and trademarks as Operator may designate. Operator shall be responsible for registering such brands, service marks, and trademarks and obtaining a matching or closely related domain name. Any such domain names shall be owned by the relevant Operator, or if they are temporarily - 13 - 14 owned by HSAC, HSAC shall take all steps necessary promptly to transfer and assign such domain names to the relevant Operator. (b) Subject to reasonable Operator oversight, HSAC shall produce and distribute all marketing materials and execute all marketing plans applicable to the HSAC Services. All marketing and promotional materials and any materials that have an Operator owned or controlled trademark on it shall comply with the Quality Controls specified in EXHIBIT F and before any such materials are used, a copy shall be sent to Operator, who shall have fifteen (15) days in which to reject such materials or to request changes be made to such materials. If Operator has not responded to HSAC within the fifteen (15) day period, such materials shall be deemed approved for distribution. (c) Operator shall contribute reasonable ad avails (i.e., advertising space which is not sold or committed to third parties that Operator designates at its sole discretion as being available for advertising for HSAC Services, "Charter Pipeline," "Marcus OnLine", "Charter Communications", "Marcus Cable", or other brands as Operator may designate at its sole discretion), space in bills, bill stuffers, statement messaging, and space in cable installation packs to promote the sales of subscriptions to HSAC Services to Cable Subscribers. (d) Subject to all of the terms and conditions of this Agreement, if a Committed System is withdrawn from this Agreement, then HSAC shall be permitted to continue to use those trademarks, service marks, and brands owned by Operator that HSAC had been using for dial up Internet access services provided in such Committed System immediately before such Committed System was withdrawn from this Agreement for a six (6) month transition period but only for the dial up Internet access services provided within such Committed System's area. 7.6.6. Operator shall not be obligated to expand or upgrade its RF Plants in the Committed Systems after a Launch Date. However, the parties agree to jointly review and evaluate periodically the economic feasibility of expanding or upgrading such RF Plants in order to increase the number of Homes Passed and/or commercial Data Subscribers and to determine how such costs shall be shared. 7.7. Complimentary and Discounted Employee Accounts. HSAC shall at Operator's direction provide to Homes Passed in each Committed System complimentary HSAC Services accounts (except that, unless expressly set forth below to the contrary, such recipients of complimentary service must pay for their own Home Equipment Packages as would any other Data Subscriber) as follows: 7.7.1. on a complimentary basis, up to five (5) transferable accounts as designated by Operator; - 14 - 15 7.7.2. on a complimentary basis, the greater of five (5) additional government/"community service" accounts per Committed System or one per franchise in each Committed System; 7.7.3. on a complimentary basis, the number of additional accounts (complete with the modem/Home Equipment Package in this case only) necessary for use within Operator's office(s) to support the HSAC Services (via multiple modems or single-modem with hub/proxy server distribution as the parties may agree); 7.7.4. such additional complimentary accounts as HSAC in its sole discretion shall determine; and 7.7.5. on a fifty percent (50%) discount basis, additional accounts for Operator's employees at their residences within a Committed System. 7.8 Ownership of Customer Information. Notwithstanding anything to the contrary set forth in this Agreement, the Data Subscribers and any Customer Lists shall be deemed to be owned solely by, and shall be solely the property of Operator, and all dial-up subscribers to the HSAC Services and related customer lists shall be deemed to be owned solely by, and shall be solely the property of, HSAC. 8. ASSIGNMENT OF DOMAIN NAMES. HSAC shall be responsible for assigning all e-mail and Web Site addresses to Data Subscribers. All e-mail and Web Site addresses for Data Subscribers shall use domain names that are registered in Operator's name and are pre-approved by Operator in writing. HSAC shall keep an updated list of such e-mail and Web Site addresses and shall supply Operator with an electronic copy of such list whenever Operator requests. 9. ENCRYPTION. HSAC may at its option make available security and encryption equipment and/or software to Data Subscribers at no additional charge to Operator; provided, that HSAC is not obligated to do so, nor shall Operator be liable or responsible in any way for the installation and performance of such equipment or software. HSAC represents and warrants that any such security and encryption equipment and software will not interfere with the operation of the Committed Systems in any way. 10. CONFIDENTIAL INFORMATION. 10.1. Confidentiality. Each party agrees that it shall not, during or for a period of five (5) years after the Term of this Agreement, permit the duplication, use, or disclosure of any Confidential Information to any person (other than an employee, agent, or representative of the other party who must have such information for the performance of its obligation hereunder), unless such duplication, use or disclosure is specifically authorized by the other party in writing. Each party shall (i) not disclose any Confidential Information to any third person without the express written consent of the other party; (ii) not use, directly, indirectly, or in concert with any other person, any Confidential Information for any purpose other than - 15 - 16 the performance of their obligations under this Agreement; (iii) use reasonable diligence, and in no event less than that degree of care which such party uses in respect to its own Confidential Information of like nature, to prevent the unauthorized disclosure or reproduction of such information. Without limiting the generality of the foregoing, to the extent that this Agreement permits the copying of Confidential Information, all such copies shall bear the same confidentiality notices, legends, and intellectual property rights designations that appear in the original versions. 10.2. Exceptions. The confidentiality obligations set forth in Section 10.1 shall not be applicable to Confidential Information which is: (i) in the public domain; (ii) known to the recipient party as of the date of this Agreement as indicated by the recipient's written records, unless the recipient party agreed to keep such information in confidence at the time of its receipt; (iii) properly obtained hereafter from a source who is not under an obligation of confidentiality with respect to such information; (iv) can be shown to have been independently developed by the receiving party through persons who have not had, either directly or indirectly, access or knowledge of such Confidential Information; or (v) obligated to be produced by law, provided that any party that is so ordered to produce Confidential Information shall give notice thereof to the other party and cooperate reasonably with any attempt by the notified party to enjoin its disclosure. 10.3. Destruction of Data. Apart from HSAC's obligations to Operator under this Section 10 concerning confidentiality, HSAC shall have no obligation to delete or destroy Operator's information, including Operator's Customer Lists or other Data Subscriber listings, from its computer systems or backup and archival libraries until such time as HSAC's regular procedures for elimination of such data would normally delete or destroy such information. Following a Data Subscriber disconnect, Operator may require the elimination of its data maintained within HSAC's backup and archival libraries prior to the time the data would normally be deleted or destroyed by HSAC, and Operator shall pay for reasonable expenses associated with the early deletion or destruction of all such data. 11. OWNERSHIP OF MARKS. 11.1. HSAC Marks. Operator acknowledges that the names and marks "HSA," "HSAC," "HSA Network," "High Speed Access Network," "HSA Data Network," "Darwin Networks," "CATV.net" and other HSAC logos, program names, trademarks, service marks, programs, manuals, documentation, and other support materials covered by this Agreement or otherwise used in connection with the HSAC Service, are the exclusive property of HSAC. Operator has not and shall not acquire any proprietary rights thereto by reason of this Agreement, and Operator shall have no rights to use such names, marks, logos, variations or titles except at the times and in a manner expressly approved by HSAC. Operator shall not publish or disseminate any material that violates any restriction imposed by HSAC. 11.2. Operator's Marks. Conversely, HSAC acknowledges that the names and marks "Charter," "Charter Communications," "Charter Pipeline," "Charter Mail," "Marcus - 16 - 17 OnLine," and other Operator logos, program names, trademarks, service marks, programs, manuals, documentation, host names, domain names, and other support materials under which the HSAC Services shall be rolled-out under this Agreement or otherwise used in connection with the HSAC Services, are the exclusive property of Operator. HSAC has not and shall not acquire any proprietary rights thereto by reason of this Agreement other than its contract rights hereunder, and HSAC shall have no rights to use such names, marks, logos, variations or titles except at the times and in a manner expressly approved by Operator. HSAC shall not publish or disseminate any material that violates any restriction imposed by Operator. 12. REPRODUCTION OF MANUALS AND DOCUMENTATION. Subject to the provisions of Sections 10 and 11.1, Operator shall have the right, at no additional charge, to reproduce solely for its internal use, all manuals and documentation furnished by HSAC relating to the HSAC Services, regardless of whether such manual or documentation is copyrighted by HSAC. All copies of manuals or documentation made by Operator shall include any proprietary notice or stamp that has been affixed by HSAC. 13. REPRESENTATIONS AND WARRANTIES. 13.1. HSAC hereby represents and warrants to Operator as follows: 13.1.1. HSAC is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware, and is duly qualified to do business as a foreign corporation in all jurisdictions in which it conducts its business. 13.1.2. HSAC's execution, delivery, and performance of this Agreement and each of the Other Agreements have been duly authorized by all requisite corporate action, and this Agreement and each of the Other Agreements constitutes a legally valid and binding obligation of HSAC enforceable in accordance with their terms, except as may be affected by laws relating to bankruptcy or insolvency or the application by a court of equitable principles. 13.1.3. HSAC's execution, delivery, and performance of this Agreement and each of the Other Agreements shall not violate, conflict with and/or result in a breach or default under HSAC's certificate of incorporation, bylaws or other charter documents, or any judgment, award, decree, agreement or other instrument to which HSAC is a party. 13.1.4. No approval, authorization, consent, or order or filing with any court, or governmental or administrative agency or any third party is required in order for HSAC to enter into, deliver, and perform this Agreement, each of the Other Agreements, and the transactions contemplated herein and therein. 13.1.5. HSAC either owns or has properly licensed all rights under patent, copyright, trademark, trade secret, and other domestic and foreign intellectual property laws (collectively, "Intellectual Property Laws") that are necessary or required to perform the Full HSAC Services Roll-Out, the HSAC Services, and the other services to be performed by - 17 - 18 HSAC hereunder and under the Network Agreements, including, without limitation, all rights under Intellectual Property Laws relating to any equipment (including, without limitation, the HSAC Network Equipment), software or Content that HSAC shall use or shall provide in connection with the Full HSAC Services Roll-Out, the HSAC Services, and the other services to be performed by HSAC hereunder and under the Network Agreements. HSAC's provision and/or operation of the Full HSAC Services Roll-Out, the HSAC Services, and the other services to be performed by HSAC hereunder and under the Network Agreements shall not violate or infringe any Intellectual Property Laws or violate or infringe any rights of third parties. 13.1.6. To the best of its knowledge, HSAC has taken all actions necessary and appropriate to assure that there shall be no material adverse change to its business or electronic systems or material interruptions in the operation and delivery of HSAC Service as provided in this Agreement (aside from normal data packet delays, distortions, and losses (i) on the Internet backbone, (ii) during transport to the Internet Backbone on telecommunication lines leased from a third party, (iii) or during transport from the customer to HSAC over a coaxial cable or fiber optic line) by reason of the advent of the year 2000, including, without limitation, that all its computer-based systems, embedded microchips and other data processing capabilities have been designed or modified and fully tested in such a manner that such computer-based systems, embedded microchips and other data processing capabilities will not generate any invalid and/or incorrect date-related results or cause any of the problems commonly referred to as "Year 2000 problems" and will, without interruption or manual intervention, continue to operate consistently, predictably and accurately and in accordance with all of the requirements of this Agreement, including without limitation, meeting all specifications and/or functionality and performance requirements, when used during any year prior to, during or after the calendar year 2000. HSAC does not warrant that interruptions in HSAC Service will not occur due to the network or systems failures of other parties, including utilities and phone services, caused by "Year 2000 problems." 13.2. Each Operator hereby represents and warrants, severally, but not jointly, and only as to itself, to HSAC as follows: 13.2.1. It is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation and is duly qualified to do business as a foreign corporation in all jurisdictions in which it conducts its business. 13.2.2. Their execution, delivery, and performance of this Agreement and each of the Other Agreements have been duly authorized by all requisite corporate action, and this Agreement and each of the Other Agreements constitutes a legally valid and binding obligation of each of them enforceable in accordance with their terms, except as may be affected by laws relating to bankruptcy or insolvency or the application by a court of equitable principles. - 18 - 19 13.2.3. Their execution, delivery, and performance of this Agreement and each of the Other Agreements shall not violate, conflict with and/or result in a breach or default under their respective certificates of incorporation, bylaws or other charter documents, or any judgment, award, decree, agreement or other instrument to which either of them is a party. 13.2.4. No approval, authorization, consent, or order or filing with any court, or governmental or administrative agency or any third party is required in order for it to enter into, deliver, and perform this Agreement, each of the Other Agreements and the transactions contemplated herein and therein. 13.2.5. The franchise agreements with the various franchising authorities with jurisdiction over the Committed Systems do not and will not prohibit Operator from offering the HSAC Services directly or through HSAC under this Agreement. Operator shall bear all costs associated with obtaining any such "data over cable" franchise rights and authorizations (if so needed), pay any franchise taxes related or applicable thereto, and indemnify HSAC with respect to any such costs or taxes, whether or not retroactively assessed. 13.2.6. Operator either owns or has properly licensed all rights under Intellectual Property Laws that are necessary or required to utilize Operator's trademarks, service marks, or brands and the marketing and promotional materials licensed to HSAC hereunder, and HSAC use of the foregoing shall not violate or infringe any Intellectual Property Laws or intellectual property rights of third parties. 13.2.7. To the best of its knowledge, it has taken all actions necessary and appropriate to assure that there shall be no material adverse change to its business or electronic systems or material interruptions in the operation and delivery of HSAC Service as provided in this Agreement (aside from normal data packet delays, distortions, and losses (i) on the Internet backbone, (ii) during transport to the Internet Backbone on telecommunication lines leased from a third party, (iii) or during transport from the customer to HSAC over a coaxial cable or fiber optic line) by reason of the advent of the year 2000, including, without limitation, that all its computer-based systems, embedded microchips and other data processing capabilities have been designed or modified and fully tested in such a manner that such computer-based systems, embedded microchips and other data processing capabilities will not generate any invalid and/or incorrect date-related results or cause any of the problems commonly referred to as "Year 2000 problems" and will, without interruption or manual intervention, continue to operate consistently, predictably and accurately and in accordance with all of the requirements of this Agreement, including without limitation, meeting all specifications and/or functionality and performance requirements, when used during any year prior to, during or after the calendar year 2000. Operator does not warrant that interruptions in HSAC Service will not occur due to the network or systems failures of other parties, including utilities and phone services, caused by "Year 2000 problems." - 19 - 20 14. INDEMNITY. 14.1. HSAC will indemnify, defend, and hold harmless each Operator and its respective affiliates, agents, successors, assigns, representatives, officers, and directors from and against any liabilities, lawsuits, penalties, claims, demands, awards, judgments, settlements, costs, and expenses (including, without limitation, actual reasonable attorneys' fees and expenses on account thereof) that arise or result from: (i) the breach by HSAC of any of its representations, warranties, or covenants hereunder, (ii) HSAC's management, operation, control or provision of the HSAC Services, or (iii) any violations of any United States export control restrictions relating to the encryption equipment and/or software made available by HSAC to Data Subscribers under Section 9 above, including, without limitation, in any such case any liabilities, lawsuits, penalties, or claims related to defamation, infringement, criminal activities, and fraud, except to the extent that any such liabilities, lawsuits, penalties, claims, demands, awards, judgments, settlements, costs or expenses arise from such Operator's operation, management, and maintenance of its RF Plant. 14.2. Each Operator will severally, but not jointly, and only with respect to its own acts or omissions, indemnify, defend, and hold harmless HSAC and its affiliates, agents, successors, assigns, representatives, officers, and directors from and against any liabilities, lawsuits, penalties, claims, demands, awards, judgments, settlements, costs, and expenses (including, without limitation, reasonable attorneys' fees and expenses on account thereof) that arise or result from: (i) the breach by such Operator of any of its representations, warranties or covenants hereunder, or (ii) such Operator's operation, management, and maintenance of such Operator's RF Plant, including, without limitation, in any such case, any liabilities, lawsuits, penalties, or claims related to defamation, infringement, criminal activities, and fraud, except to the extent that any such liabilities, lawsuits, penalties, claims, demands, awards, judgments, settlements, costs or expenses arise from HSAC's management, operation, control or provision of the HSAC Services. 14.3. HSAC agrees to indemnify, defend, and hold harmless each Operator and its respective affiliates, agents, successors, assigns, representatives, officers, and directors, and each Operator agrees severally, but not jointly, and only with respect to its acts or omissions, to indemnify, defend, and hold harmless HSAC and its affiliates, agents, successors, assigns, representatives, officers, and directors, from and against any liabilities, lawsuits, penalties, claims, demands, awards, judgments, settlements, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses on account thereof) that may be made for injuries, including death to persons, resulting from the indemnifying party's negligent or willful acts or omissions or those of persons employed by the indemnifying party, its agents, or subcontractors. Each Operator and HSAC respectively agree to notify the other parties promptly of any written claims or demands against the indemnified party for which the indemnifying party is deemed responsible hereunder; provided, that, any failure to so notify shall not affect the substantive rights hereunder. 15. LIMITATION OF LIABILITY, INSURANCE. - 20 - 21 15.1. Limitation of Liability. EXCEPT FOR THE INDEMNIFICATION OBLIGATIONS DETAILED IN SECTION 14 ABOVE, IN NO EVENT WILL EITHER PARTY HERETO BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (EVEN IF THAT PARTY HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), ARISING FROM OR RELATED TO A BREACH OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS. 15.2. Insurance. At all times during the Term, HSAC shall maintain: (i) appropriate policies of general liability, casualty, and business interruption or disruption insurance, each with aggregate coverage of at least two million dollars ($2,000,000) with commercially reasonable deductibles; (ii) appropriate workers compensation insurance to cover HSAC's employees against injury to themselves or others and casualty accidents while performing HSAC Services; and (iii) appropriate insurance policies with at least two million dollars ($2,000,000) of coverage per incident with commercially reasonable deductibles covering against claims for intellectual property infringement. All such HSAC insurance policies shall name Operator as an additional insured party. 15.3. Specific Performance. HSAC and Operator each acknowledges that the rights granted, and services to be provided to each other hereunder are of a special, unique, unusual, extraordinary, and intellectual character, giving them peculiar value, the loss of which cannot be reasonably or adequately compensated in damages, and that an actual or threatened material breach by either party hereunder would cause the other party irreparable injury and damage. Subject to Section 9.2.2 off the Content Agreement, each party agrees that, if it commits or is about to commit a material breach of this Agreement, the other party will be entitled to injunctive or other equitable relief as a remedy for any such actual or threatened material breach, without the requirement to post any bond or other security therefor. 16. TERM OF AGREEMENT. The term ("Term") of this Agreement shall commence on the Effective Date, and as to a particular Committed System, continue for a term of five (5) years thereafter from the Launch Date for each such Committed System (the "Initial Term"). Following such Initial Term, this Agreement shall automatically renew itself on a year-to-year basis (a "Renewal Term") unless terminated by notice from either party at least three (3) months prior to the expiration of the Initial Term or any such Renewal Term. 17. [Intentionally Deleted] 18. TERMINATION 18.1. Operator Remedies. In addition to all of Operator's other rights and remedies at law or equity, Operator has the right to (i) terminate this Agreement, (ii) renegotiate this Agreement, (iii) remove a particular Committed System from this Agreement, or (iv) retract HSAC's exclusive rights as to a particular Committed System, if there has been a Termination Event as set forth in Section 18.3 hereof. Operator's selection of any one of these remedies - 21 - 22 shall not preclude Operator from selecting any other of such remedies for the same or other Termination Event. Except as set forth in Sections 18.6 and 19 below, in the event that a Termination Event occurs which is limited to a particular Committed System, Operator may exercise the forgoing rights only with respect to the Committed System in question and not this entire Agreement. 18.2. Actions upon Termination. Except as set forth in Section 18.4 to the contrary, upon any termination or cancellation of this Agreement as to a particular Committed System for any reason whatsoever: (i) such Committed System shall be removed from EXHIBIT A and from this Agreement, (ii) Operator shall purchase from HSAC at book value (based on straight line depreciation) any ownership rights that HSAC has in the HSAC Network Equipment, Home Equipment Package, or any other equipment or software owned by HSAC that is committed to such Committed System; (iii) HSAC shall comply with the Conversion Requirements with respect to such Committed System; and (iv) HSAC shall transfer to Operator all Confidential Information, Customer Lists, and any data related to or about the Data Subscribers relating to the applicable Committed Systems. 18.3. Termination Events. The following shall be deemed "Termination Events:" 18.3.1. HSAC fails to meet Launch Date applicable to a particular Committed System; 18.3.2. HSAC fails at any time to comply with the System Service Requirements in any material respect and has not cured such lack of compliance to Operator's reasonable satisfaction within sixty (60) after Operator has provided HSAC with written notice of such non-compliance. Operator shall have the right to at least once every three (3) months to reasonably audit or observe HSAC's operations in order to determine if HSAC is complying with the System Service Requirements; 18.3.3. There is a failure of the HSAC Services and/or the HSAC Network Equipment such that the HSAC Services are not available to a majority of Data Subscribers in a Committed System in the same manner as such HSAC Services are normally available to such Data Subscribers, which failure is not cured or repaired within thirty (30) days after Operator gives HSAC written notice thereof; 18.3.4. HSAC becomes insolvent, or a petition under any bankruptcy act shall be filed by or against HSAC (which petition shall not have been dismissed within thirty (30) days thereafter), or HSAC executes an assignment for the benefit of creditors, or a receiver is appointed for HSAC or its assets, or HSAC takes advantage of any insolvency or any like statute; 18.3.5. HSAC fails to upgrade or replace any equipment or software used in relationship with the HSAC Services such that such equipment no longer complies with the - 22 - 23 vendor's standards and/or industry standards for such equipment, and such failure is not cured within thirty (30) days after Operator gives written notice thereof to HSAC; 18.3.6. HSAC shall fail to pay to Operator any and all sums payable to Operator as and when due hereunder within thirty (30) days after Operator gives HSAC written notice of such failure; 18.3.7. HSAC shall fail to carry, distribute and support the Vulcan Content (as defined in the Content Agreement) on an exclusive basis for all Cable Systems and other HSAC customers utilizing the HSAC Services in accordance with the terms of the Content Agreement, HSAC shall carry any Competing Content (as defined in the Content Agreement) in violation of the Content Agreement, or HSAC shall breach the provisions of Section 6.3 of the Content Agreement; and 18.3.8. Operator certifies by written notice to HSAC that HSAC failed to achieve the Minimum Penetration Rate within eighteen (18) months after the Launch Date applicable to a Committed System. 18.4. Termination other than for a Termination Event. In addition to Operators other rights and remedies hereunder, Operator shall have the right at any time to withdraw any Committed System or terminate HSAC's exclusive rights to provide HSAC Services with respect to any such Committed Systems for any reason not covered in Sections 18.3, 18.6 and/or 19. If Operator does so, then such Committed System shall be withdrawn from this Agreement, provided that (i) Operator has provided ninety (90) days prior written notice, (ii) Operator pays to HSAC the Termination Fee, (iii) Operator shall purchase from HSAC at book value (based on straight-line depreciation) any ownership rights that HSAC has in the HSAC Network Equipment and Home Equipment Package related to such Committed System, and (iv) if such termination occurs within twelve (12) months after the Launch Date with respect to a Committed System, Operator shall reimburse HSAC for HSAC's actual, out-of-pocket marketing expenses paid by HSAC with respect to such Committed System prior to date of termination. Notwithstanding the foregoing, if Operator's withdrawal of a Committed System from this Agreement under this Section 18.4 occurs as a result of Operator's sale or other disposition of such Committed System, and the successor MSO or other successor owner or operator of such Committed System assumes Operator's obligations hereunder with respect to such Committed System, then Operator shall not be obligated to comply with the provisions of subsections 18.4(ii), (iii) and (iv) above in connection with such termination. 18.5. Replacement of Committed Systems. If upon the removal of a Committed System from this Agreement for any reason other than termination or expiration of this Agreement, the aggregate number of Homes Passed in all Committed Systems hereunder falls below 750,000, then Operators will designate additional Cable Systems as Committed Systems hereunder such that the total number of Homes Passed in all Committed Systems under this Agreement is not less than 750,000. - 23 - 24 18.6. Termination for Repeated Withdrawal of Committed Systems. In the event that Operator withdraws from this Agreement pursuant to Section 18.1 above (not including Committed Systems withdrawn pursuant to Section 18.4 above) a number of Committed Systems equal to or greater than 50% of the total number of Committed Systems initially included in Exhibit A to this Agreement as of the Effective Date, then Operator shall have the right to terminate this Agreement upon thirty (30) days prior written notice to HSAC, without any further liability or obligation to HSAC. 19. EXCLUSIVITY TERMINATION. In addition to those reasons permitted elsewhere in this Agreement, Operator may also terminate HSAC's exclusive rights under Section 2.1 hereof if it is reasonably necessary to comply with any statutes, regulations, or court orders. 20. INDEPENDENT CONTRACTORS. All work performed by HSAC in connection with the HSAC Service described in this Agreement shall be performed by HSAC as an independent contractor and not as the agent, employee, joint venture or partner of Operator. All persons furnished by HSAC shall be for all purposes solely HSAC's employees or agents and shall not be deemed to be employees of Operator for any purpose whatsoever. HSAC shall furnish, employ, and have exclusive control of all persons to be engaged in performing services under this Agreement and shall prescribe and control the means and methods of performing such maintenance services by providing adequate and proper supervision. Nothing contained herein shall be deemed to create a relationship of joint venture, associates, principal and agent or partnership between the parties hereto and neither party shall hold itself out to the contrary. Each party is acting as principal hereunder. 21. FORCE MAJEURE. Neither party shall be responsible for any Service Failure or delay or failure in performance of any part of this Agreement to the extent that such delay or failure is caused by fire, flood, explosion, war, lightning, embargo, government requirement, riots or civil commotion, acts of civil or military authority, embargoes, strikes, acts of God, power surges, acts or omissions of carriers/utilities, or other causes or contingencies beyond its reasonable control (a "Force Majeure"); provided, that (i) neither party shall be relieved under this Section 21 from its obligations under Section 7 hereof with respect to timely repairs of Service Failures caused by such Force Majeure, and (ii) HSAC has complied with the manufacturers' or vendors' suggested maintenance for any equipment used in providing the HSAC Services to the extent such maintenance would have reduced the likelihood of or damage caused by any Force Majeure. If any such event of Force Majeure occurs and such event continues for ninety (90) days or more, the party delayed or unable to perform shall give immediate notice to the other party, and the party affected by the other's delay or inability to perform may elect to suspend performance of its allocable portions or duties with respect to the HSAC Services for the duration of the condition. The affected party may resume performance of its duties once the condition ceases, and the period of this Agreement shall be deemed extended for such affected Committed System up to the length of time the condition endured. - 24 - 25 22. ASSIGNMENT. HSAC shall not have the right to assign this Agreement to any person or entity without the prior written consent of Operators, except that HSAC may without Operator's consent assign its rights, but not its obligations, to a subsidiary of HSAC, provided, that, no such assignment will relieve HSAC of liability for its obligations hereunder. Operators may assign this Agreement to any person or entity, and this Agreement shall be binding and inure to the benefit of their successors and assigns. Each party shall be permitted to assign this Agreement and grant a security interest in its contract rights and tangible/intangible property interests (including the HSAC Network Equipment and Home Equipment Packages) arising under this Agreement for purposes of securing financing from its commercial lender(s). However, as a condition to doing so, HSAC shall be obligated to obtain non-disturbance agreements in form and substance satisfactory to Operators from each such lender under which such lender agrees that, notwithstanding such lender's exercise of its rights as a secured creditor, such lender and its assigns shall not disturb, affect or interfere with HSAC's provision of the HSAC Services hereunder. All assignments in contravention of this Section 22 shall be null and void and of no force or effect. Either party shall provide the other party with thirty (30) days prior written notice of any permitted assignment hereunder. 23. AMENDMENTS, MODIFICATIONS, OR SUPPLEMENTS. Amendments, modifications, or supplements to this Agreement shall be permitted, provided all such changes shall be in writing signed by the authorized representatives of both parties unless otherwise expressly permitted in this Agreement, and all such changes shall reference this Agreement and identify the specific articles or Sections of this Agreement that is amended, modified, or supplemented. 24. NOTICES. All notices, demands, or other communications herein provided to be given or that may be given by any party to the other shall be deemed to have been duly given when made in writing and delivered in person, or upon receipt, if (a) deposited in the U.S. mail, postage prepaid, certified mail, return receipt requested; (b) sent by nationally recognized overnight courier in a postpaid wrapper, or (c) by facsimile, addressed as follows: Notices to HSAC: HIGH SPEED ACCESS CORP. 1000 West Ormsby Ave., Suite 210 Louisville, KY 40210 Attn: W. Kent Oyler, CEO Phone: 502-515-3232 Fax: 502-515-3101 With a copy to: John G. Hundley, General Counsel Phone: 502-515-3342 Fax: 502-515-3101 Notices to Operator: CHARTER COMMUNICATIONS, INC. 12444 Powerscourt Drive, Suite 400 St. Louis, MO 63131 - 25 - 26 Attn: Steve Silva, SVP Phone: 314-965-0555 Fax: 314-965-8793 With a copy to: Curt Shaw, General Counsel Phone: 314-965-0555 Fax: 314-965-8793 MARCUS CABLE, INC. Attn: Steve Silva, SVP Phone: 314-965-0555 Fax: 314-965-8793 With a copy to: Curt Shaw, General Counsel Phone: 314-965-0555 Fax: 314-965-8793 or to such address as the parties may provide to each other in writing from time to time. 25. OBLIGATIONS TO SURVIVE TERMINATION. The parties recognize and agree that the provisions of Sections 1, 10, 11,13, 14,15, 20, and 22 through 32 of this Agreement, shall survive the cancellation, termination, or expiration of this Agreement with respect to each Committed System. 26. GOVERNING LAW. The validity, construction, interpretation, and performance of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to the conflicts of laws principles thereof. 27. HEADINGS. The headings contained in this Agreement are for convenience of reference only and are not intended to have any substantive significance in interpreting this Agreement. 28. WAIVERS. Any waiver by either party of any breach of any term or condition hereof shall be effective only if in writing and such writing shall not be deemed to be a waiver of any subsequent or other breach, term or condition of this Agreement. 29. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies provided by this Agreement and Annexes hereto are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to use any or all other remedies. Such rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance, or otherwise. - 26 - 27 30. COUNTERPARTS. This Agreement may be executed in two or more counterparts, any of which may be deemed an original, but all of which taken together will constitute one and the same instrument. This Agreement may be executed and delivered by facsimile. 31. EQUAL CONSTRUCTION. This Agreement is negotiated and drafted by parties equally represented by counsel and no clause or provision herein should be construed as having been drafted other than equally by both parties. 32. ENTIRE AGREEMENT. This Agreement and the Exhibits thereto and hereto constitute the entire agreement between the parties and any parties who have in the past or who are now representing either of the parties hereto, and replaces and supersedes all prior agreements, written and oral, relating to the subject matter hereof, between the parties to this Agreement. [The rest of this page is left intentionally blank.] - 27 - 28 IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the day and year first written above. HIGH SPEED ACCESS CORP. By: /s/ Robert S. Saunders ----------------------------- Date: --------------------------- CHARTER COMMUNICATIONS, INC. By: /s/ Curtis S. Shaw ------------------------------ Date: ---------------------------- MARCUS CABLE, INC. By: /s/ Curtis S. Shaw ------------------------------ Date: ---------------------------- - 28 - 29 LIST OF EXHIBITS EXHIBIT A CABLE TELEVISION/AFFILIATE COMMITTED SYSTEMS COVERED BY THIS AGREEMENT EXHIBIT B SYSTEM DATA REQUIREMENTS EXHIBIT C ESCALATION PROCEDURES FOR TROUBLESHOOTING EXHIBIT D REVENUE SPLITTING; BILLING EXHIBIT E CUSTOMER END USER/INTERNET SERVICES AGREEMENTS EXHIBIT F QUALITY CONTROL EXHIBIT G SYSTEM SERVICE REQUIREMENTS EXHIBIT H CONVERSION REQUIREMENTS 30 EXHIBIT A COMMITTED SYSTEMS COVERED BY THIS AGREEMENT [ATTACHED] 31 EXHIBIT A COMMITTED SYSTEMS TO NETWORK SERVICES AGREEMENT CHARTER-MARCUS-HSA
Homes Launch Region System Name Headend Location State Passed Date* - ------------------------------------------------------------------------------------------------- Southeast NEWNAN Newnan GA 25,471 11/1/98 Southeast Lanett Lanett AL 14,699 1/1/99 N. Central Eau Claire Eau Claire WI 40,855 2/1/99 Southeast HENRY COUNTY Stockbridge GA 35,999 2/1/99 Southeast HENRY COUNTY Jackson GA 4,012 2/1/99 Southeast THOMASTON Thomaston GA 10,583 2/1/99 N. Central Rice Lake Rice Lake WI 9,125 3/1/99 Central Columbus Columbus IN 25,879 3/1/99 Southeast Manchester Manchester GA 5,091 3/1/99 Southern ALBERTVILLE Albertville AL 26,582 3/1/99 Southern GUNTERSVILLE Guntersville AL 10,425 3/1/99 Southeast Morristown Morristown TN 36,984 4/1/99 Southeast CAMP LEJEUNE Camp LeJeune NC 11,332 4/1/99 N. Central Rosemount Rosemount MN 37,050 4/1/99 Central New Albany New Albany IN 32,146 4/1/99 Southern HARTSELLE Hartselle AL 27,618 4/1/99 Southeast Johnson City Johnson City TN 30,717 5/1/99 Southern HAMMOND Folsom LA 65,223 5/1/99 Central Peru Peru IN 9,909 5/1/99 Southeast DUBLIN Dublin GA 11,452 5/1/99 Northeast Pepperell Pepperell MA 13,901 5/1/99 Southeast ERWIN Buies Creek NC 27,775 6/1/99 Central Monticello Monticello IN 11,571 6/1/99 Southern ALEXANDER CITY Alexander City AL 19,844 6/1/99 Central Frankfurt Frankfort IN 7,822 7/1/99 Southeast BUNCOMBE Buncombe Co. NC 34,820 8/1/99 Southeast GAFFNEY Gaffney SC 15,558 12/1/99 Southeast GAFFNEY Union SC 10,075 12/1/99 Southeast SANFORD Sanford/Whispering Pines NC 18,390 12/1/99 Southeast CARROLLTON Carrollton GA 7,344 12/1/99 - ------------------------------------------------------------------------------------------------- Subtotal 638,252 N. Central Ashland Ashland WI 6,108 ?? N. Central Onalaska Onalaska WI 15,586 ?? Southeast Bristol Bristol TN 27,024 ?? Southeast Black Mountain Black Mountain NC 11,268 ?? Southeast Waynesville Waynesville NC 22,080 ?? N. Central Red Wing Red Wing MN 6,952 ?? Central Connersville Connersville IN 9,156 ?? Central Rushville Rushville IN 3,694 ?? Central Warsaw Warsaw IN 12,106 ?? - ------------------------------------------------------------------------------------------------- Subtotal 113,974 GRAND TOTAL 752,226
* The Launch Dates indicated in this column are tentative and subject to the completion of engineering review, commissioning/Attainment Measures for the head-ends, and the required joint review and approval of Marketing plans, etc. 32 EXHIBIT B CABLE SYSTEM DATA REQUIREMENTS (TECHNICAL REQUIREMENTS FOR RF PLANTS) 1. HSAC shall inspect and characterize Operator's one-way and two-way RF cable plant to determine its feasibility for digital data transmission for One-Way or Two-Way cable modems. This characterization shall focus on the integrity of the cable plant against interference, intermodal distortions, ingress, system noise, and transient/impulse noise. 2. HSAC has established guidelines for Operator wishing to implement digital data transmission on their cable plant. The guidelines shall recommend CATV plant and equipment configurations to achieve a desired level of signal reliability and quality in digital data transmission. 3. Operator's RF/cable network must possess at least 400 MHz of bandwidth (with at least one (1) 6 MHz channel reserved and dedicated to HSAC Service/data flow) and otherwise continuously meet the following minimum performance standards, measured at designated end-of-line test points throughout the cable plant. Although constituting on a sample of pertinent issues, the following test points should be selected such that they are representative of all areas of the cable distribution system. Each Committed System's head-end must also pass at least 4,000 homes. 4. HSAC shall issue a written report detailing the RF/cable network deficiencies and recommendations for improvements, i.e., the Attainment Measures. ANALOG PERFORMANCE PARAMETERS a. In-Band Frequency Amplitude Response - Frequency response of the cable network indicates the variation of system gain as a function of frequency measured in dB. As a general guideline the amplitude characteristic shall be within a range of +/- 2 dB from 0.75 MHz to 5.0 MHz above the lower boundary frequency of a cable television channel, referenced to the average of the highest and lowest amplitudes within these frequency boundaries. b. VISUAL CARRIER-TO-NOISE RATIO (CNR) - The guideline that HSAC establishes for CNR values is in accordance with FCC specification 76.6059(a)(7) that defines the ratio of RF visual signal level to system noise to be not less than 43 dB. c. DISTORTIONS - Distortions are defined as the ratio of visual signal level to RMS amplitude of any coherent disturbances such as intermod products, second and third-order distortions or discrete frequency interfering signals not operating on proper offset assignments. The guideline which HSAC has established is defined by FCC specification 76.605(a)(8) and specifies the following: (i) the ratio of visual signal level to coherent 33 disturbances shall not be less than 51 dB for non-coherent channel cable television systems, when measured with modulated carriers; and (ii) the ratio of visual signal level to coherent disturbances which are frequency-coincident with the visual carrier shall not-be less than 47 dB for coherent channel cable systems, when measured with modulated carriers and time-averaged. d. HUM MODULATION - This is the variation in the amplitude of a CW carrier at the power line frequency of 60 Hz or its harmonics induced as a result of passing through the cable network. The HSAC guideline is defined by FCC regulation 76.605(a)(10), which requires that the peak-to-peak variation in visual signal level caused by undesired low frequency disturbances (hum or repetitive transients) generated within the system, or by inadequate low frequency response, shall not exceed 3 percent. e. INGRESS AND IMPULSE NOISE LEVELS - Ingress is the level of unwanted ambient signals leaking into the CATV plant as a result of such things as imperfect shielding, loose connectors, cracked cabling and other plant defects. Impulse noise has different spectral characteristics, which invades spectral power densities as the frequency increases. Causes of impulse noise include AC arcing of electric motors, power utility transformers, electrostatic discharges, lightning and other transient sources that can produce a loss of synchronization on digital transmission systems. In characterizing plant performance, HSAC guidelines dictate that impairments should be maintained, collectively, at a nominal averaged level not to exceed -50 dBc with respect to video carriers, while recognizing that noise becomes visible in the video domain at -55 dBc and shall thus cause deterioration to optimum synchronization of the data carrier. Further, to maintain optimal RF downstream efficiency, HSAC specifies impairments that cause end-of-line Carrier-to-Noise (CNR) performance to drop below a minimum constant value of 43 dB is unacceptable and shall result in interrupted high-speed data access service to the customer. f. GROUP DELAY RESPONSE DISTORTION - No standards are currently defined that specify minimum performance for this parameter. HSAC guidelines however specify that as a general rule, delay response over the return path should match that over the forward path. It is recommended that the return frequencies be located 6 MHz from either the upper of lower limits of the return bandwidth. This shall help minimize any group delay associated with the roll-up or roll-off of the return spectrum. g. RETURN PLANT VISUAL CARRIER-TO-NOISE RATIO (CNR) - HSAC guidelines specify a minimum 36 dB visual CNR over the forward plant, defining 40 dB CNR as the more ideal threshold parameter. The expected higher level of noise sources in the return path is mitigated by the reduction of video and data carriers on the upstream. h. RETURN IN-BAND FREQUENCY AMPLITUDE RESPONSE DISTORTION - HSAC guidelines are consistent with FCC specification 76.605(a)(6), requiring that the amplitude characteristic of a video carrier in the return direction to be within a range of +/- 2 dB from 0.75 MHz to 5.0 MHz should also apply to reverse video transmission. 34 i. DISTORTION - HSAC expects that the level of CSO and CTB distortions on the return path* shall be generally lower than the forward path, due to the limited number of RF video carriers interacting with each other in this sub-low frequency spectrum. To maintain the integrity of the return path data transmission, HSAC would generally not expect to see more than two video carriers in this spectrum. Therefore, HSAC guidelines for distortions in the return path follow the same FCC specification 76.605(a)(8) which applies to the forward path, which is not less than 51 dB for standard CATV systems (modulated carriers and time averaged). j. SIGNAL AVAILABILITY- HSAC in cooperation with the Operator shall jointly maintain the same goal of providing reliable, uninterrupted signal transport over both the forward and reverse plant*. Cable maintenance practices that routinely interrupt service must be discouraged, and HSAC requests that Operator provide it with advance notice of any interruptive testing or maintenance practice that could result in the disruption of signal flow in either the forward or return path. This advance notice is required in order that proper customer service levels can be adequately maintained. In extreme cases, high speed data customers can be notified of possible service disruptions. k. TESTING - HSAC and Operator jointly agree to periodically test the forward and return RF paths* of the CATV system. Such testing is required to document performance parameter thresholds to the extent that high-speed data services are not adversely affected. In the absence of such routine testing, Operator agrees to notify HSAC of any adverse irregular signal level condition on the plant, intermittent or continuous, which persists longer than a 12-hour interval. * Applies only to 2-way cable plant high speed data solution. Single path, 1-way hybrid high speed data solutions need not adhere to these specifications. 35 EXHIBIT C ESCALATION PROCEDURES FOR TROUBLESHOOTING TIER I SUPPORT Tier I customer service/On-Line Help Desk is the "front line" of the HSA Corp./MSO product offering. The responsibility of Tier I service is to provide information to the customer, initiation and changes of service, billing inquiries and some low-level trouble shooting, and frequently asked questions. Tier I shall include the following: - - Start, stop and changes of service - - Determination of service eligibility - - Product information - - Provisioning and initial setup script - IP address generation, logins, email setup, password capturing, etc. - - Service installation and dispatch scheduling and setup - - Trouble ticket status reporting - - Initial problem resolution. Tier I shall include reasonably simple scripted troubleshooting (based on script provided by HSCA) and cable network related problem diagnosis - - Billing and pricing questions TIER II SUPPORT In the event that Tier I is not able to resolve any Service Failures or any Tier I problems within twenty four (24) hours such Service Failure and Tier I problems shall escalate to Tier II. Tier II customer service is the diagnostic and problem resolution layer of the HSAC/MSO customer service offering. In this layer, the symptoms of the problems are understood and recorded, the problem(s) are determined and action is taken to resolve problem(s). This group shall have advanced technical troubleshooting skills and tools. Support from this group shall include: - - Desktop OS support. - - HSAC network information. - - HSAC delivered software support. - - Problem diagnosis and resolution. - - Build knowledge base and on-line information systems. - - Handle Wed and E-mail support. TIER III SUPPORT In the event that Tier II is not able to resolve any Service Failures or any Tier II problems within forty eight (48) hours such Service Failure and Tier II problems shall escalate to Tier III. Tier III shall provide customer service and network operations support. This group shall handle any call not able to be resolved by Tier II. In addition to resolving the more difficult customer problems, this group shall be doing ongoing network monitoring. This 36 group shall work twenty four (24) hours a day, seven (7) days a week with all available personnel to resolve all Tier III problems. Notwithstanding the above, within 60 days of the Effective Date of this Agreement, the parties will mutually agree to a written Escalation procedure that will, include, without limitation, daily notification to Operators of all customers experiencing an outage or trouble call as used in the Service Requirements Exhibit beyond 24 hours. 37 EXHIBIT D REVENUE SPLITTING; BILLING SPLITTING OF GROSS REVENUES. D.1 Base Payments for HSAC Services. During the Term of this Agreement as to a particular Committed System, if Operator designates HSAC to handle billing of Data Subscribers, HSAC shall pay to the Operator an amount (i.e., "Operator's Share") equal to the percentages, by service category, as shown in TABLE A, of Gross Revenues. If Operator decides to handle billing of Data Subscribers, it shall pay to HSAC an amount (i.e., "HSAC's Share") equal to 100% of Gross Revenues minus the percentage Operator's Share, by service category, of Gross Revenues as shown in TABLE A.
TABLE A ------- SERVICE OPERATOR'S SHARE ------- ---------------- Dial Up Express 15% One-Way Cable Express 50% Two-Way Cable Express 50% Other Optional Services 50%
D.2 Data Subscriber Refunds. HSAC's local management shall have the discretion to offer reasonable credits/refunds of Gross Revenues to Data Subscribers resulting from Out-of-Compliance Events, which amounts shall be deducted from the Operator's Share or added to HSAC's Share, as the case may be. The determination of when Out-of-Compliance Events occur may be monitored and reported by HSAC to the Operator on a monthly basis. As used herein, an "Out-of-Compliance Event" occurs when the HSAC Services are rendered inoperable or unusable due to the Committed Systems failing to meet System Data Requirements or to a Service Failure traceable to the Operator's RF Plant/Committed Systems (and such is not corrected within the period specified in Section 7.3.4 of the Agreement) other than failures caused by a Force Majeure. D.3 Settlement, Verification. Within thirty (30) days following the end of each and every calendar month during the term thereof, the party handling billing and collection shall deliver to the other party a statement (a "Statement") showing the computation of the Operator's/HSAC's Share (derived from the total number of Data Subscribers and Gross Revenues) in accordance with this EXHIBIT E, which Statement shall specify amounts collected by region, and remit same by negotiable instrument. Each party shall keep books and records relating to the Operator's Share and HSAC's Share in accordance with generally accepted accounting principles, consistently applied. During the Term hereof and for three years thereafter, both HSAC and the Operator or their authorized representatives may, at its own expense, visit each other's offices during regular business hours, subject to suitable protections relating to confidentiality and non-disclosure, to inspect and make extracts and copies of any such books and records in order to determine the accuracy of the Statements. 38 If any audit of Statements undertaken by either party in accordance with this Section E.3 discloses a five percent (5%) or greater discrepancy from the Statement(s) generated by the audited party, such party shall pay such amounts to the auditing party and reimburse the auditing party for all costs incurred in connection with such audit. D.4 Billing. Operator shall determine on a Committed System-by-System basis which of Operator or HSAC will invoice Data Subscribers and collect Gross Revenues. Operator shall provide HSAC access (both print copy and electronically at HSAC's expense) to its Customer Lists and other customer databases on a confidential basis for the purpose of developing and implementing a billing system. HSAC and Operator shall work together to develop and implement an electronic interface between HSAC and Operator for tracking and invoicing Data Subscribers and vendors. With respect to those Committed Systems where HSAC in invoicing the Data Subscribers, HSAC shall at its expense arrange for a data exchange/software interface to be written and implemented which enables HSAC to access and interface with Operator's billing system for purposes of updating on a real-time basis both HSAC's and Operator's systems regarding the status of Data Subscriber accounts so that such accounts may be automatically managed in the same manner that as Cable Subscriber accounts are managed. D.5 Most Favored Nation. Notwithstanding anything set forth herein to the contrary, HSAC agrees that during the term of this Agreement the Operator's Share paid to Operator under paragraph E.1 above shall not be less than that paid to other MSO or Cable System operators with whom HSAC contracts to provide HSAC Services. 39 EXHIBIT E CUSTOMER END USER/INTERNET SERVICES AGREEMENTS See attached 40 READ THIS NOTICE AND THE ATTACHED SERVICES AGREEMENT CAREFULLY!! Charter Pipeline Corp. d/b/a CHARTER PIPELINE has offered to provide cable modem Internet access service to the undersigned Customer only upon the terms and conditions set forth in the attached Charter Pipeline Services Agreement. The undersigned Customer wishes to subscribe, and has placed an order to subscribe, to the Charter Pipeline Internet Access Service upon the terms and conditions set forth in the attached Agreement. The undersigned Customer represents and agrees that he or she has had a reasonable opportunity to read the attached Agreement, and ask questions, and receive answers from representatives of Charter Pipeline regarding its contents and provisions, which are incorporated herein by reference. By signing this Notice in the space provided below and returning it to an authorized representative of Charter Pipeline, the Customer hereby affirmatively manifests his or her assent and agrees to the bound to the terms and conditions of such Agreement. Customer: --------------------------------------- Name: --------------------------------------- Address: --------------------------------------- --------------------------------------- Signature: --------------------------------------- Telephone No.: --------------------------------------- Date --------------------------------------- Please sign and return only this Notice to the local Charter Pipeline system office/representative. The attached Services Agreement is yours to keep for reference. 41 CHARTER PIPELINE SERVICES AGREEMENT FOR CABLE INTERNET ACCESS SERVICE THIS CHARTER PIPELINE SERVICES AGREEMENT (the "Services Agreement") CONSTITUTES YOUR AGREEMENT with HSA Corp. d/b/a Charter Pipeline, 1000 W. Ormsby Ave, Suite 210, Louisville, Ky 40210, hereinafter "we", "our", "us", or "Charter Pipeline"), and Internet access/transmission service (the "Service") as it pertains to your (hereinafter "you", "your" or "Customer") use of the Charter Pipeline Internet Access Service at your residence or place of business. CHARTER PIPELINE SERVICE; SERVICES AGREEMENT. We agree to provide to you, and you agree to accept from us, our Charter Pipeline high-speed access to the Internet service (the "Service" or "Cable Express") for a SINGLE CABLE CONNECTION any provision to add other connections at your residence or place of business. By ordering and/or using the Service, you and all members of your household and their guests or your employees agree to be bound by and are obligated to use the Service under and in compliance with the terms and provisions of this Services Agreement. We reserve the right, at our discretion, to change, modify, add or remove the terms of this Services Agreement at any time. Notification of changes in service will be posted on Charter Pipeline Corp. web site (www.CharterPipelinecorp.net), or sent to you via E-mail. Your single cable connection use of the Service after such notice shall constitute your acceptance of such modification(s) as an amendment to this Agreement. To the extent permitted by law, you waive any and all objections you may now or hereafter have to the enforceability of this Services Agreement against you, specifically including, but not limited to, any objections or claims that it is a shrinkwrap or contract of "adhesion." LICENSE: Subject to the terms hereof, during the term of this Services Agreement, we grant you a non-exclusive, non-transferable, limited license to use the Service to access the Internet. Except for the license granted herein, all rights, title and interest in "data" accessed by you in all languages, formats and media throughout the world, including all copyrights and trademarks therein, are and shall continue to be the exclusive property of Charter Pipeline or the owners of other data made accessible to you via the service. If you are a residential customer, your right to use Charter Pipeline extends to all members of your immediate family. If you are a business, the right to use Charter Pipeline extends to all of your employees; however, you also agree that your use is limited to one cable or dial-up connection at a time per account unless otherwise agreed in writing with us. CUSTOMER'S USE OF CHARTER PIPELINE ONLINE NETWORK: You agree that the Service may only be used for lawful purposes. Transmission of any material in violation of any federal or state statute or regulation is prohibited, including but not limited to material that is copyrighted legally judged to be threatening, defamatory, indecent, obscene child pornography or protected by trade secret for exportation of encryption software or over materials in violation of federal export control laws. You agree not to use the Service, including but not limited to, the cable modem, power supply, and any software provided by us for any illegal, abusive or fraudulent purpose, or to achieve unauthorized access to any computer systems, software, data or other copyright or patent protected material or to copy or reproduce any of the foregoing without authorization. If you do, you acknowledge that your access to the service may be suspended or terminated and that you may be referred by Charter Pipeline OnLine to appropriate law enforcement agencies. PROTECTION OF PASSWORDS; NO RESALE. You are responsible for the use of your account(s), and the confidentiality of your password(s). We will suspend your access or change your access passwords to the Service immediately upon notification by you that your password has been stolen, lost or otherwise compromised. You must notify Charter Pipeline of any known or suspected unauthorized use(s) of the your account, or any known or suspected breach of security, including loss, theft, or unauthorized disclosure of your password or credit card information. You also agree not to resell or redistribute access to the Service in any manner. The prohibition on resale of access includes, but is not limited to the provision of E-mail, FTP and Telnet access, or any other Internet access or website hosting services. IP ADDRESSING. We will provide you with a dynamically assigned IP address as a component of the single-user Service. You agree not to alter, modify or tamper with the IP address or those of any other person connected to the Service. We will own all rights in and to such IP address and we will recover the IP address upon disconnection, discontinuance or termination of the Service. We reserve the right to disconnect or reclassify the Service to commercial grade for failure to comply with any portion of this Agreement. Static IP addresses are available to you for an additional fee. AGE OF CUSTOMER: If you are less than 18 years of age, the Agreement must be accepted by a parent or legal guardian who is responsible for all charges and bears all liability related to the use of the Service account(s). By accepting this 42 2 Agreement, the parent or legal guardian recognizes that Charter Pipeline does not control content or subject matter of data or other information available on the Internet, and agrees to supervise any access to the Internet by minors. HOME COMPUTER. In order to receive and utilize the Service and must own a computer with a 166 MHz Pentium(R) or compatible microprocessor and 16 MB of RAM (minimum), and Microsoft Windows 95(R) or higher version. Apple(R), Macintosh(R) or Windows NT(R) systems may also be supported. OWNERSHIP AND USE OF EQUIPMENT: SOFTWARE LICENSE. Unless purchased by you, the cable modem, cables and power supply equipment that we lease to you will at all times be our property. You agree to immediately return to us in good condition upon disconnection of Service all such equipment* subject to reasonable wear and tear. You will use reasonable care to avoid damaging the cable modem and power supply, and will not move, relocate, alter, sell, lease, license, assign, encumber or otherwise tamper with the equipment. If the equipment* is not returned to us in good condition immediately upon termination of Service, you will be charged and agree to pay us $495.000 for its replacement. Subject to the terms and conditions hereof, we further grant you a limited, non-exclusive license to use any software we provide for your use in connection with the Service only. This license terminates upon termination of this Agreement, or disconnection of Service. *Except for the ethernet interface card supplied and installed in your home computer, which is and will remain your property. We shall have no responsibility or duty to install or remove the ethernet card. INSTALLATION. Either you or an authorized reseller are solely responsible for installing the ethernet/network interface card in your home computer at your sales cost and expense. When any software associated with the ethernet card and/or the cable modem is installed on your home computer, the system files may be modified. The opening of your home computer and/or the installation of software may disrupt the normal operations of your home computer and/or cause the loss of files. Neither we nor your cable TV company are responsible for any such loss. FOR THESE AND OTHER REASONS, WE RECOMMEND STRONGLY THAT YOU BACK-UP ALL FILES PRIOR TO INSTALLATION. ACCESS AND INTERRUPTIONS OF SERVICE. We will make a reasonable effort to make the Service available to you twenty-four (24) hours per day, seven (7) days per week. It is possible that there will be interruptions of Service. The Service is an ethernet-like protocol service spread over a shared network which co-exists on your cable television service, and you and all other users share a finite amount of bandwidth. We will manage the Service to provide appropriate bandwidth for as many customers as possible. HOWEVER, YOU ACKNOWLEDGE AND AGREE THAT THE SERVICE MAY BE TEMPORARILY LIMITED, INTERRUPTED OR CURTAILED FOR MANY REASONS INCLUDING WITHOUT LIMITATION TO SYSTEM CAPACITY LIMITATIONS IMPOSED OR EXPERIENCED BY THE UNDERLYING COMMUNICATIONS CARRIES, GOVERNMENTAL ACTIONS, FORCE MAJEURE, OR BECAUSE OF TEMPORARY EQUIPMENT OR SYSTEMS FAILURES OR MODIFICATIONS, UPGRADES, MAINTENANCE, REPAIRS OR SIMILAR ACTIVITIES REQUIRED OR APPROPRIATE IN CONNECTION WITH THE DELIVERY OR IMPROVEMENT OF THE SERVICE: the Service may also affect the video programming portion of your cable television service and you agree to waive any and all claims that are related to the foregoing and to report any problems with your video programming services to the local cable TV office by telephone. CUSTOMER SUPPORT. We will attempt to provide you with "Help Desk" support which can be accessed by telephone or by e-mail. Support may also be provided via software provided by us. We will not provide support for the Service if you use any hardware or software that has not been supplied by us or pre-approved in writing by us. The telephone numbers and e-mail addresses for support services, as well as hours of operation, are printed in the your Service Guide and are available online. If you use or modify the hardware or any software we supply to you, or the Equipment requires a visit to your residence or place of business for repair or correction, we reserve the right to charge you for the visit and labor required to correct the situation. We will not undertake to correct or repair hardware or software which we do not supply. NO LIABILITY FOR OBSCENE OR OTHER OFFENSIVE CONTENT, PORNOGRAPHY, ETC. You acknowledge and understand that we only provide access to the Internet. We do not publish (other than e-mail messages that we may from time to time send you regarding the Service), control, monitor or restrict the information, programs, e-mail, "chat rooms", interactive gaming or other material that is available to your residence or place of business through the Internet, the World Wide Web, or through USENET newsgroups. YOU MAY FIND OR ACCESS MATERIALS THROUGH OUR SERVICE THAT YOU FIND TO BE SHOCKING, PROFANE, ABUSIVE AND/OR OFFENSIVE AND YOU ASSUME THAT RISK. YOU MAY, IN FACT, FIND SOME MATERIAL TO BE OBSCENE, SEXUALLY EXPLICIT, OR OTHERWISE INDECENT. YOU RECOGNIZE THAT CHARTER PIPELINE IS NOT RESPONSIBLE FOR THIS MATERIAL, AND ACKNOWLEDGE THAT YOU HAVE BEEN NOTIFIED THAT SUCH MATERIAL IS PRESENT. YOU ARE SOLELY AND EXCLUSIVELY RESPONSIBLE AND AT RISK FOR (I) ALL INTERNET CONTENT ACCESSED VIA THE SERVICE BY YOU AND OTHER MEMBERS OF YOUR HOUSEHOLD OR BUSINESS AND THEIR GUESTS, AND (II) PROVIDING SUITABLE ADULT SUPERVISION OF ANY PERSON WHO IS LESS THAN EIGHTEEN (18) YEARS OF AGE AND USES THE SERVICE AT YOUR RESIDENCE OR PLACE OF BUSINESS TO ACCESS THE INTERNET. You agree that neither we nor your cable company are in any manner responsible for any claims, losses, actions, damages, suits or proceedings arising out of or otherwise relating to such content accessed using the Service. 43 3 NO LIABILITY FOR PARENTAL EMPOWERMENT SOFTWARE. You may want to consider installing blocking and filtering software developed by others that empower parents and teachers to restrict their children's and students' access through the Internet to objectionable or inappropriate material, and that protect or prohibit them from corresponding with criminals or disclosing personal or other information. Your acknowledge that we do publish such software, and agree that neither we nor your cable company are in any manner responsible for the effectiveness of these blocking and filtering technologies. NO "HACKING", "SPAMMING" OR INFRINGEMENT OF OTHER'S RIGHTS. You agree not to publish on or over the Internet any content which violates or infringes upon the rights of any other person. You also agree not to use the Service or cable modem for any illegal purpose, to achieve unauthorized access to another party or person's computer systems, software, data or other copyright or patent protected material (commonly referred to as "hacking"). You agree not to interfere with the use of the Service or the equipment by other customers or disrupt the Service backbone network nodes or network services. You also agree not to send unsolicited e-mail to our subscribers or anyone else without our explicit written permission for each instance of communication. You further agree not to upstream unsolicited distribution lists in e-mail or other mass unsolicited e-mail (commonly referred to as "spam"). Your violation of any of these promises is grounds for immediate termination of Service and this Agreement. If we are challenged by a third party regarding the suitability of your content, we may, at our sole discretion, suspend or terminate your access to the Internet through our systems. We assume no liability whatsoever for any losses, claims, damages, expenses, liabilities or costs (including legal fees) arising out of or in connection with allegation, claim, suit or other proceeding based upon your use of the Service or our Equipment or brought by any third party based upon or arising out of the violation or infringement of any of the copyright, patent, trademark, trade secret or other industrial or intellectual property rights or contractual rights of any third party. NO LIABILITY FOR UNAUTHORIZED ACCESS; ENCRYPTION; FILE-SHARING. We treat communications and data traffic on our through our Service as strictly confidential and do not access, use or disclose contents of private communications, except in limited circumstances as compelled or permitted by law. However, since the Service is a shared network used by subscribers to video programming and our Service which provides access to the Internet (and beyond such network the Internet does not provide security), it is possible that others may access or monitor your data traffic. You acknowledge that the Internet systems use public access facilities to transmit voice and data communications, and that the Service may accordingly not be completely private. Accordingly, we do not warrant that any data or files sent or received by you over the Service will not be subject to unauthorized access by others or that other users (i.e., "hackers") will not gain access to your home computer. We are not liable to you for any claims, loss, damages or cost that may result from your lack of privacy on the Internet by virtue of your use of the Service. IN ADDITION, THE SERVICE IS CONFIGURED TO DISABLE PEER-TO-PEER NETWORKING/FILE-SHARING. IF YOU REQUEST THAT WE ENABLE THAT FEATURE, YOU WILL BE REQUIRED TO SIGN A SEPARATE RELEASE AND LIABILITY WAIVER IN WHICH YOU ACKNOWLEDGE THE EXTREME SECURITY RISKS TO YOUR COMPUTER AND THE PRIVACY OF YOUR DATA FILES ASSOCIATED WITH SUCH NETWORKING. MOREOVER, IF YOU CHOOSE TO RUN APPLICATIONS WHICH PERMIT OTHERS TO GAIN ACCESS TO YOUR COMPUTER, YOU DO SO AT YOUR OWN RISK AND SHOULD TAKE APPROPRIATE SECURITY MEASURES. FOR THESE AND OTHER REASONS, YOU MAY WANT TO CONSIDER INSTALLING THIRD-PARTY AUTHENTICATION-ENCRYPTION SOFTWARE TO PROTECT YOUR DRIVES AND DATA/E-MAIL FILES. We extend no warranty and accept no liability with respect to the effectiveness of such software. NO LIABILITY FOR VIRUSES. We make no representation or warranty that any software installed on your home computer or which you may download from the Internet, any on-line service provider or other information provider (other than us) does not contain any virus or other damaging or destructive attribute. OTHER CHARGES; CREDIT CARD CHARGES. You understand and acknowledge that you may incur other costs and expenses for certain information, products and services from persons, firms or entities other than us, including without limitation such on-line services as America OnLine(R) or The Microsoft Network(R). You agree that you shall be solely and exclusively responsible and liable for all such charges, which are in addition to the fees and charges payable to us. With respect to any Internet-based transactions that you undertake or participate in through the Internet, you are solely and exclusively responsibility to make the payments in connection with such transactions and to protect the security of all credit information from unwanted or unauthorized charges. Neither we nor your cable company shall have any liability or responsibility to you in connection with Internet-based transactions, unauthorized use of your credit or debit cards, credit availability or information, or your personal or financial information. GENERAL DISCLAIMER OF WARRANTIES AND MORE LIMITATIONS OF LIABILITY; INDEMNITY. You hereby acknowledge that we exercise no control whatsoever over the content of the information passing through Charter Pipeline network. You also understand that alternative and competing Internet communications carriers are available to you. Occasional interruption or irregularities in the service may occur. WE PROVIDE CHARTER PIPELINE TO YOU ON AS "AS IS, AS AVAILABLE" BASIS, WITHOUT WARRANTY OF ANY KIND, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO THE WARRANTIES OF PERFORMANCE, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THIS DISCLAIMER OF WARRANTY EXPRESSLY EXTENDS TO ANY LIABILITY 44 4 FOR REIMBURSEMENT FOR LOSS OF INCOME DUE TO DISRUPTION OF SERVICE BY CHARTER PIPELINE ONLINE OR ANOTHER INTERNET SERVICE PROVIDER(S). You further acknowledge that use of the Service or any information obtained via the Service is at your sole risk, and that we, your cable company and Internet content contributors shall not be liable to you for any direct, indirect or exemplary, incidental, indirect, special, or consequential losses or damages relating in any way to demands or claims involving or arising in any manner out of: (a) your use of, inability to use, or failure to perform research or related work, or to work properly, the Internet, Internet data, or the Service, (b) inaccurate or poor quality Internet data obtained through the Service, (c) loss of data resulting from delays, non-deliveries, misdeliveries or service interruptions, and (d) the installation, maintenance, failure, removal, or use of the cable modem and ethernet card equipment or cancellation of Service. You further agree to indemnify and hold harmless Charter Pipeline and your cable company from any claims of any nature whatsoever resulting from your use of Charter Pipeline Service or you're in violation of any provision of this Agreement. BILLING: PAYMENT OBLIGATIONS FOR CHARTER PIPELINE SERVICE. Billing and payment provisions for the Service, including the set-up and monthly recurring charge (payable by debit to your credit or debit card account unless otherwise agreed), are as set forth in the Service Guide pricing schedule which is incorporated herein by reference, or as otherwise agreed to in writing by the parties. You also agree to pay all applicable federal, state and local fees or taxes, and any additional telephone company charges and fees that may apply to your Service (for dial-up return). We have the right to terminate your Service if an invoice from us is not fully paid when due and impose a late fee of not more than 5% on any outstanding amount as a one-time late charge, at our discretion, for failure to pay all bills within 30 days of billing. We may charge a reasonable service fee for all returned checks and bank card or charge card charge-backs. If you discontinue the Service or are disconnected, you agree to pay a reconnect charge before reconnection. You will be responsible for all expenses (including reasonable attorney's fees) incurred by Charter Pipeline Online in collecting any unpaid amounts due in accordance with this Agreement. We also reserve the right to change from time-to-time the amount of the monthly Service fee and any other applicable charges upon reasonable advance written notice to you. In no event shall such notice be less than ten (10) days prior to the effective date of such change. All charges are exclusive of sales, use and other taxes, which are your responsibility. TERMS AND TERMINATION. This Services Agreement shall become effective at such time as you first use the Service, and shall continue in force until a period of not less than one (1) month has expired, at which time it shall renew itself indefinitely on a month-to-month basis until terminated by either party upon thirty (30) days written notice by either party. Charter Pipeline Online, in its sole business judgment, may terminate this Agreement immediately or suspend your access to the Service upon any breach of this Agreement by you, including, but not limited to, refusal or failure to pay for services provided or disruptive on-line behavior. Upon termination for any reason, we reserve the right to delete any data left by you on Charter Pipeline-owned and controlled computers, and all rights and licenses granted to you hereunder shall terminate automatically. EFFECT OF AGREEMENT. This Agreement embodies the entire understanding between you and Charter Pipeline OnLine with respect to the subject matter hereof, and supersedes any and all prior understandings and agreements, oral or written, relating thereto. FORCE MAJEURE. Charter Pipeline Online's performance hereunder is subject to interruption and delay due to causes beyond its reasonable control such as acts of God, acts of any government, war or other hostility, civil disorder, fire, explosion, power failure, equipment failure, industrial or labor disputes, inability to obtain the necessary equipment and supplies, and the like. SEVERABILITY. If one or more of the paragraphs in this agreement are found to be unenforceable or invalid, your and Charter Pipeline Online's agreement on all other paragraphs is unaffected. NOTICES. Except as otherwise provided herein, you may provide notice to us of any matters affecting this Services Agreement at the address provided in the preamble hereto. GOVERNING LAW. This Agreement shall be governed by and construed under the laws (without reference to the conflicts of laws rules) of the Commonwealth of Kentucky. WAIVER. Failure of any party to enforce any provision of this Agreement shall not constitute or be construed as a waiver of such provision or of the right to enforce such provision. 45 ADDENDUM TO CHARTER PIPELINE INTERNET SERVICES AGREEMENT CABLE MODEM ACCEPTABLE USE POLICY (AUP) 6/1/98 Your Internet access is facilitated by use of a cable modem, and consequently cable modem-specific issues must be addressed. This Cable Modem AUP constitutes an Addendum to the terms and conditions of the standard Charter Pipeline Internet Services Agreement which you have assented to and do hereby consent to by the continued use of the Service. The standard and cable AUPs are written in plain English and apply equally to all CHARTER PIPELINE Network subscribers. This AUP may be updated from time to time upon notice to you as described in the Services Agreement. CABLE MODEM ACCOUNT USAGE Your Cable Modem account is a single user, non-server, non-commercial, unlimited access account ONLY. CHARTER PIPELINE Network makes other accounts available to you that will allow commercial or server access if you need it. These options should be explored should your needs be other than the Cable Modem Standard Account. If you wish to add a hub and provide access to more than one computer in your household under your Cable Modem Standard Account, additional fixed/static or dynamically-assigned IPs and bandwidth through-put can be purchased for this purpose. As noted previously, PROXY servers are NOT allowed under a residential Cable Modem Standard Account, and customers who attempt to connect more than one machine to a given modem via PROXY of any type (WinProxy, WinGate, etc.) without paying for additional IPs will have their service disconnected. The Cable Modem Standard Account cannot be used to run a server, whether commercial or otherwise. The servers that CANNOT be run include, but are not limited to, FTP, HTTP (Web), POP and SMTP (Mail), DNS, NNTP, and PROXY. These services are capable of over-utilizing the bandwidth that all Charter Pipelineoration Cable Modems share and, as such, are measured in a different way with regard to payment. If we find you operating a server, you will be asked to remove it. Should you not remove the server from usage, your account and Internet access will be suspended, and your activity may be referred to local law enforcement authorities. Repetitive suspensions (as defined by Charter Pipelineoration) for violation of this rule will result in termination of Cable Modem Service without the option to obtain a new account. ANY USER OF THE CHARTER PIPELINEORATION SYSTEM THAT VIOLATES ANY OF THE ABOVE RULES WILL BE SUBJECT TO ACCOUNT CANCELLATION AT OUR DISCRETION WITHOUT RECOURSE OR REFUND. 46 ADDENDUM to CHARTER PIPELINE INTERNET SERVICES AGREEMENT WAIVER AND RELEASE REGARDING PEER-TO-PEER NETWORKING "I", the undersigned customer, have requested that you, Charter Pipeline, as my Service ISP, enable "peer-to-peer" networking privileges for my account. I understand that once file-sharing is enabled, my Service will operate much like a Local Area Network (LAN), which means that PC machine users on my cable network will be able to identify and gain access to one another through the use of broadcast frames, such as Windows(R) file sharing (called SMB [server message block] or CIFS [common Internet file system]). This makes my computer and data files vulnerable to unauthorized access, review and corruption. I hereby represent, warrant, agree and acknowledge: 1) that once you configure my Service to enable file-sharing privileges and run applications that permit others to gain access to my computer, you can neither monitor or control such access, and cannot protect me from hackers, viruses or corrupted files that may be introduced; 2) that I am in sole and complete control of my password, and that I alone am responsible for taking appropriate security measure to encrypt my data/e-mail files or install third-party user-authentication software (I further agree that you extend no warranty and accept no liability with respect to the effectiveness of such software); 3) that I understand completely the EXTREME security risks posed to my computer/data files and my privacy as a consequence of enabling such networking, and are nevertheless willing to do so at my own risk; and 4) that you shall not be liable in any manner whatsoever as a result of any losses, damages, claims or costs that I may incur as a result of someone else gaining access, whether it be authorized, unauthorized (including accidental), to my PC. I further waive any and all expectations of privacy or security that I may now or hereafter have with respect to my online activities, and waive and release you from any liability with respect to such peer-to-peer networking. Customer Name: [Printed] ----------------------------- Account No.: ------------------------------- Date: - ------------------------------------------- -------------------------- Signature 47 EXHIBIT F QUALITY CONTROL CONDITIONS AND LIMITATIONS ON OPERATOR MARKS LICENSE OWNERSHIP. HSAC agrees and expressly acknowledges that nothing herein shall give it any right, title, or interest in the Operator's trademarks, service marks, and brands (except the right to use as a licensee in accordance with the terms of this Agreement), that the Operator's Trademarks, service marks, and brands are the sole property of the Operators and its affiliates and that any and all use of the Operator's Trademarks, service marks, and brands by HSAC inures to the benefit of the Operator and its affiliates. HSAC agrees not to raise or cause to be raised any questions, claims or objections concerning the validity of Operator's and/or its affiliates' title to the Operator's Trademarks, service marks, and brands on any grounds whatsoever. HSAC agrees it will do nothing inconsistent with the ownership of the Operator's Trademarks, service marks, and brands by Operator and/or its affiliates and agrees to notify Operator and its affiliates of any unauthorized or inappropriate uses of the Operator's trademarks, service marks, and brands of which it becomes aware. HSAC shall provide reasonable assistance (at Operator and its affiliates' expense) in any defense against challenges to the Operator's trademarks, service marks, and brands, if requested to do so by Operator and its affiliates. If HSAC is required to register the Operator's trademarks, service marks, and brands under any statute for registration of fictitious business names or any other type of registration, HSAC shall notify Operator and its affiliates before registration and shall only register in a form approved by Operator and its affiliates. Upon termination of this Agreement, HSAC shall immediately take all necessary steps to eliminate any such registrations. SUBLICENSES. HSAC shall not sublicense its right to use the Operator's trademarks, service marks, and brands under this Agreement without the prior written consent of Operator and its affiliates, which may be withheld for any reason. RESTRICTIONS ON USE. All uses of the Operator's trademarks, service marks, and brands by HSAC shall be made together with the appropriate ["(TM)"] ["(R)"] symbol in connection with the Operator's trademarks, service marks, and brands. All uses of the Operator's trademarks, service marks, and brands by HSAC shall include a legend indicating that each of Operator's Trademarks, service marks, and brands is owned by its respective owner. 48 HSAC agrees not to use any mark or device identical with or confusingly similar to the licensed Operator's trademarks, service marks, and brands in connection with any HSAC Product or service, except as permitted by this Agreement. QUALITY CONTROL. HSAC agrees to use the Operator's trademarks, service marks, and brands only in connection with the lawful goods and/or services specified herein, and agrees that such goods and/or services shall be of a standard of quality at least as high as that of similar goods and/or services produced by Operator and its affiliates. Operator and its affiliates alone shall judge, in its reasonable discretion, whether or not HSAC has met or is meeting the standards of quality so established. At least once each year, HSAC shall provide Operator and its affiliates with (i) at least one (1) representative sample of each Licensed Product, (ii) at least one (1) representative set of materials used in providing each Licensed Service, (iii) at least two (2) different representative samples of advertising for Licensed Products and Services, and (iv) at least two (2) different representative samples of advertising for Licensed Services. Upon Operator and its affiliates' reasonable request, HSAC shall provide Operator and its affiliates with additional, different samples of the items set forth in the foregoing sentence and permit inspection of HSAC's operation. If at any time HSAC's products, packaging therefor, or services associated with the Operator's trademarks, service marks, and brands do not meet the quality standard set forth herein as reasonably determined by Operator and its affiliates, Operator and its affiliates shall have the right to require HSAC to discontinue the use of the Operator's trademarks, service marks, and brands in connection with the sale of such products and/or services unless modifications satisfactory to Operator and its affiliates are made within ninety (90) days from notice of disapproval. HSAC shall comply with all applicable laws and regulations and obtain all appropriate governmental approvals pertaining to the sale, distribution, and advertising of goods or services covered by this license. COSTS OF USING OPERATOR'S TRADEMARKS, SERVICE MARKS, AND BRANDS. HSAC shall bear any and all costs associated with the use, printing, and placing of the Operator's trademarks, service marks, and brands on all retail boxes, documents, or web pages. 49 EXHIBIT G SYSTEM SERVICE REQUIREMENTS TECHNICAL SPECIFICATIONS HSAC will at its expense add more HSAC Network Equipment, lines and/or bandwidth capacity from the head-end to its internet Portal at such time as Internet data traffic on the System reaches the lesser of: (A) an average data traffic statistic of 80% of network and HSAC e-mail, newsgroup and other HSAC content servers' capacity during peak time, or (B) an average data traffic statistic of 50% of capacity during any 24-hour day, tested in 5-minute increments, except and unless such traffic is attributable to incremental Vulcan Content as set forth in the Programming Content Agreement. HSAC will purchase and install such quantities of HSAC Network Equipment (i.e., Portmaster Com Controllers and routers) and transport bandwidth in One-Way Systems such that dial-up Data Subscribers will not experience busy signals, at any one time, of more than four percent (4%) between the Effective Date and December 31, 1998, three percent (3%) between January 31, 1999 and May 31, 1999, and two percent (2%) from and after June 1, 1999. SERVICE SPECIFICATIONS HSAC Call Center will answer inbound calls with one or more appropriate greetings specified by Operator, and will be experienced in/trained to support all HSAC Services requirements. HSAC Call Center will maintain and inbound call "abandon" (i.e., customer call goes unanswered and hangs up) rate not to exceed four percent (4%) between the Effective Date and December 31, 1998, three percent (3%) between January 31, 1999 and May 31, 1999, and two percent (2%) from and after June 1, 1999. HSAC will resolve 90% of all non-RF Plant-related trouble calls within 24 hours and 99% of all non-RF Plant-related trouble calls within 36 hours prior to May 31, 1999, and 99% of all non-RF Plant-related trouble calls within 24 hours from and after 50 June 1, 1999 OTHER OPERATIONAL MATTERS HSAC and Operator will consult and agree upon an "off-peak" schedule for HSAC Services/RF Plant downtime for purposes of preventive maintenance/testing. In the sole discretion of the Operator or an affiliate of Vulcan, Operator or such Vulcan affiliate may make its "where available/if available" fiber available to HSAC on a "preferred customer pricing/most favored nation status" basis for HSAC's head-end to head-end or head-end to ISP/Internet portal data transport needs in connection with its provisioning of HSAC Services in Committed Systems. Starting in June 1, 1999, HSAC will produce monthly reports that track compliance on a daily basis for all service requirements specified in this Exhibit G. Until June 1, 1999 such obligation shall be satisfied by HSAC providing to Operator the Help Desk Call Center Activity Report, in its current format, on a monthly basis. 51 EXHIBIT H CONVERSION REQUIREMENTS In the event of the termination of the Agreement or the withdrawal of Committed Systems from the Agreement, HSAC agrees to work with Operator to develop transition and conversion procedures to protect the normal service levels provided to Data Subscribers. HSAC will provide continuing network and call center and NOC support to Operators and the successor ISP for a period of 120 days following such termination or withdrawal to ensure seamless Internet access to Data Subscribers. Operator will reimburse HSAC for HSAC for its actual, out-of-pocket expenses relating to such support, and HSAC shall continue to receive its share of Gross Revenues from any Data Subscriber for whom HSAC is still providing Internet Access. In addition, during the conversion period, HSAC will provide Operators with all customer database information in machine readable form that complies with widely accepted industry formats. 52 EXHIBIT I APPROVAL PROCESS BETWEEN CHARTER AND USA HSAC and Operators may by mutual agreement revise the following requirements form time to time. o HSAC develops the marketing and sales strategy for Charter Pipeline overall plan and plan by System. Such Plan must stay within the guidelines of Charter's current published Charter Pipeline Branding Guidelines. o Charter reviews marketing strategy with HSA. o HSAC develops a plan for implementation by System/Region. o HSAC develops and implements all tactics subject to approval by signature by Charter Region management (see below). o Charter develops the branding strategy for Charter Pipeline, which must be incorporated in all HSAC tactics. o When Charter is reviewing/approving tactics. Charter is looking to uphold the integrity of its brands, product and company. The intention of the Charter approval is not to have Charter "art direct" but oversee the use of our brands. o Charter will provide HSAC with our confidential "Charter Pipeline Marketing Overview." Charter will also provide Charter Pipeline branding guidelines and Charter Communications logo sheets. All logo sheets will also be available in hard copy and electronically. o In cases where HSAC intends to use a "shell" form other high-speed services offered by HSAC and other Cable companies. Charter Corporate and Regional management must approve the pieces and any Charter customization. o Charter Corporate recommends that HSAC involve Charter Corporate, when possible, early on in the process of developing marketing materials. o Direct Mail o Copy must be approved by Charter Corporate and Region with a signature o Color comps or dylux, with copy dropped in, must be approved by Charter Corporate and Region with a signature o HSAC should not wait until the chromes stage for approval it is to costly if you wait o Cross channel o It is recommended Charter Corporate review USAs "agency input document" and that Charter Corporate and Region review creating brief concept strategy 53 * Boards (image and copy) must be approved by Charter Corporate and Region with a signature * HSAC to get all Charter input before editing - it is too costly if you wait * Radio * Scripts must be approved by Charter Corporate and Region with a signature * Print * Print ads (graphic and copy) must be aproved by Charter Corporate and Region with a signature before running * Public Relations - Charter Corporate and Regional management must approve all press releases and publicity generated by HSA. * Other Tactics - any copy and design must be approved by Charter Corporate and Region with a signature before execution In the cases where Charter has developed a marketing piece for Charter Pipeline for Earthlink systems and it is decided by HSAC to use the material for Charter pipeline HSAC systems, Charter will provide a fair and reasonable quote for the piece to HSA. Seeds and Samples * Regional Marketing VPs should create and provide to HSAC a seed list of Charter Region and Corporate names for seeding all direct mail lists. * Regional Marketing VPs should create and provide to HSAC a list of Charter Region and Corporate names and quantities per name to receive samples. Samples should be distributed to HSAC before tactic is implemented. Timeline for Approval Process * Charter has 15 days to approve or make recommendations to a piece submitted by HSA. We recommend bringing Charter into the process as early as possible. -----END PRIVACY-ENHANCED MESSAGE-----