EXHIBIT 10.15
MAGINET CORPORATION
405 Tasman Drive, Sunnyvale, CA 94089 USA
Tel (408) 752-1000 Fax (408) 734-1687
September 15, 1995
Hyatt International-Asia Pacific Limited
3rd Floor, Hyatt Regency Hong Kong
67 Nathan Road
Kowloon
Hong Kong
Hyatt Chain Services Limited
Suite 31 A, New Henry House
10 Ice House Street
Central Hong Kong
RE: GUEST VIDEO SERVICES AGREEMENT
Gentlemen:
This is written in reference to that certain Master Guest Video Services
Agreement (the "Master Agreement") dated August 11 1995, by and among Hyatt
International-Asia Pacific Limited ("Hi"), Hyatt Chain Services Limited ("Hyatt
Services"; collectively, with HI, being herein "Hyatt"), MagiNet International
Corporation ("MagiNet") and Guest Serve Development Group (GDG).
In order to induce HI and Hyatt Services to enter into the Master Agreement, we
hereby represent and warrant that our wholly-owned subsidiary, MagiNet, in its
exclusive license agreement with GDG for the GDG Technology, as defined in the
Master Agreement, will have both an escrow arrangement for GDG Technology source
code as well as rights to access GDG Technology source code without triggering
the escrow, as may be needed in order to insure that MagiNet will meet its
commitments to Hyatt under the Master Agreement should GDG fail to perform under
the Master Agreement. Accordingly, MagiNet will be in a position to ensure
Hyatt's use of GDG Technology as contemplated in the Master Agreement in the
event GDG should fail to perform thereunder prior to its expiration.
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
September 15, 1995
Page Two
We acknowledge that, in the event that at any time in the future any of the
representations and warranties and statements above made should no longer be of
full force and effect, this would constitute an event of default pursuant to
Section 26.1 of the Master Agreement.
MagiNet Corporation
By: /s/ R.R. Creager
Name: R. R. Creager
Title: President
Acknowledgment:
We hereby confirm that the representations and warranties and statements
made by MagiNet Corporation in the foregoing letter are true and valid in all
respects, and that to the best of our knowledge, there are no facts or
circumstances likely to prevent or interfere with their continuing veracity
during the term of the Master Agreement.
Guest Serve Development Group
By: /s/ Philip S. Knudsen
Name: Philip S. Knudsen
Title: CFO/DIRECTOR
Date: 9/15/95
MAGINET CORPORATION
405 Tasman Drive, Sunnyvale, CA 94089 USA
Tel (408) 752-1000 Fax (408) 734-1687
PERFORMANCE GUARANTEE
---------------------
By this Guarantee MagiNet Corporation (hereinafter the "Guarantor"), a
California corporation, the sole shareholder of MagiNet International
Corporation (hereinafter "MagiNet"), is held and firmly bound unto Hyatt
International-Asia Pacific Limited and Hyatt Chain Services Limited:
(hereinafter jointly called "Hyatt"), to guarantee unconditionally on written
notice as provided below, the full performance by MagiNet of its obligations
pursuant to that certain Master Guest Video Services Agreement dated August 11,
1995 (the "Contract") between and among Hyatt, MagiNet and Guest Serve
Development Group respecting the provision of guest video services and systems
to Hyatt hotels.
The condition of the above written guarantee is such that if MagiNet should,
duly perform and observe all terms, provisions, conditions and stipulations of
the said Contract according to the true purport, intent and meaning thereof, or
if on default by MagiNet the Guarantor shall satisfy and discharge the
obligations of MagiNet thereunder, then this obligation shall be null and void
but otherwise shall remain in full force and effect, but no alteration of the
terms of the said Contract or in the extent or nature of obligations of MagiNet
thereunder, and no allowance of time by Hyatt nor any forbearance or forgiveness
of or in respect of any matter or thing concerning the said Contract on the part
of Hyatt shall in any way release the Guarantor from any liability under the
above-written Guarantee, except insofar as MagiNet itself is released. Provided
always that the above obligation of Guarantor to satisfy and discharge the
obligations of MagiNet to Hyatt shall arise only on written notice from Hyatt
that MagiNet has failed fully to satisfy and comply with any obligations of the
said contract.
MagiNet Corporation
By: R. R. Creager
Title:. President
Date: 9/15/95
MASTER GUEST VIDEO SERVICES AGREEMENT
-------------------------------------
This Master Guest Video Services Agreement (hereinafter referred to as this
"Agreement" or "Master Agreement"), is made this day of August, 1995
("Effective Date") by and among Hyatt International-Asia Pacific Limited, a Hong
Kong corporation ("Hyatt AP"), and Hyatt Chain Services Limited, a Hong Kong
corporation ("Hyatt Services") (collectively the "Hyatt Parties"), Guestserve
Development Group, a California corporation ("GDG"), and MagiNet International
Corporation, a California corporation ("MagiNet"), which is a wholly-owned
subsidiary of MagiNet Corporation (all such signatories herein being
individually a "Party" and collectively the "Parties").
WHEREAS, the Hyatt Parties wish to arrange, for all hotels for which Hyatt AP
has and will have responsibility during the term of this Agreement (the
"Hotels"), for the procurement from GDG and MagiNet of consistent, high quality
guest in-room video and audio content and all necessary hardware and software
that will permit the transmission to hotel rooms and remote guest selection of
such content (the "System," as further defined in Section 4. below) over each
Hotel's video and audio transmission and receiving systems, including antenna
systems (the "MATV," which includes all required wiring to the guest rooms);
WHEREAS, the Hyatt Parties wish to arrange for the updating, installation,
operation and maintenance and current and future design and development of the
System for and in the Hotels,, and the ongoing maintenance of the MATV
(collectively the "Activities");
WHEREAS, GDG owns or is licensed to provide software programs and related
hardware ("GDG Technology," as further described, represented and warranted in
sections 4.1. and 19.2. below) which GDG represents and warrants meets the
Technical Requirements (defined below) and will therefore permit GDG, MagiNet
and, to the extent desired and permitted hereunder, the Hyatt Parties and others
to perform the Activities;
WHEREAS, the Hyatt Parties and GDG recognize that GDG requires the assistance of
one or more other persons and entities located in the countries in which the
Hotels are or will be operated in undertaking the Activities;
WHEREAS, the System enables guests, in the privacy of the Hotels' guest rooms
(the "Rooms"), to obtain full audio and visual access to off-air broadcast,
satellite and cable television transmissions, on demand movies and televised
events, interactive games, advertising (including infomercials), informational
programs, product and services ordering systems, and other interactive
activities, services and programming as provided hereunder and as may be agreed
upon among the parties or between MagiNet and any Hotel (the"Content"), through
channels provided through the System (the "Channels") and transmitted to the
Rooms over the MATV, all in accordance with the specific requirements and
general guidelines of Exhibit A (the "Technical Requirements");
WHEREAS, MagiNet has been performing similar activities on similar systems,
providing Content in other hotels, and has represented that it is fully capable
of undertaking the Activities, and GDG has warranted that it has assessed
MagiNet's capabilities and believes MagiNet is fully capable of performing its
obligations as defined herein;
WHEREAS, GDG and MagiNet will continue to work throughout the term of this
Agreement
August 22, 1995
for the Hyatt Parties in developing new technologies, services, enhancements,
hardware, software and Content for the Hyatt Parties, the Hotels and the System;
and
WHEREAS, MagiNet is willing to install, operate and maintain the System in the
Hotels, to upgrade and maintain the MATVs, and to procure movies, video games
and other Content, GDG is willing to provide all necessary technical support to
MagiNet to perform its obligations within respect to deployment of GDG
Technology hereunder, and the Hyatt Parties and the Hotels wish to accomplish
the same pursuant to this Master Agreement and separate individual agreements
("Individual Agreements") with each Hotel;
NOW, THEREFORE,, the Parties do hereby warrant, covenant and agree for good and
valuable consideration duly received as follows:
1. MASTER AGREEMENT
----------------
1.1. Consistent with the above recitals, which are incorporated herein as if set
forth fully below, the Parties have agreed as follows:
1.1.1. MagiNet will procure, install, operate and maintain, and undertake
current and future design and development of, the System, the
Content and the related MATV for and in the Hotels, with GDG's
assistance with respect to the Activities relating to GDG
Technology and with the participation and direction of the Hyatt
Parties, Hotels and others, all as further provided for in the
Technical Requirements and elsewhere in this Agreement. Except as
otherwise provided herein, MagiNet and GDG shall be solely
responsible for all capital and operating expenditures required to
fulfill their obligations hereunder;
1.1.2. GDG will provide all needed support on the GDG Technology to
MagiNet, the Hyatt Parties and the Hotels that is necessary to
accomplish the Activities;
1.1.3. GDG has licensed or will license the GDG Technology to MagiNet so
that the GDG Technology and any improvements thereon can be
provided to the Hyatt Parties, the Hotels and other Hyatt entities
according to the terms of this Agreement for as long as the Master
Agreement is in effect. GDG has retained sufficient rights in the
GDG Technology so that GDG can continue (i) to work on and improve
the GDG Technology and all other necessary parts of the System,
(ii) to select and work on the Content, and (iii) to provide
further and continuing assistance to the Hyatt Parties and through
MagiNet to the Hotels in connection with the System and the
Content;
1.1.4. The Hyatt Parties and the Hotels are hereby fully licensed as
provided herein by GDG and MagiNet for as long as the Master
Agreement is in effect to have and use the GDG Technology and any
improvements thereon made by GDG, MagiNet and/or any third party
acting under a license or contract from either party; and
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August 22, 1995
1.1.5. The Hyatt Parties are hereby fully licensed by GDG and MagiNet to
have and use a software development tool kit (the "Tool Kit") that
enables the Hyatt Parties to create their own Content for display
on the System through the GDG Technology (as described in Section
9.2 below). This license covers all uses in the Hotels by the Hyatt
Parties and any other entities affiliated with the Hyatt Parties
(the "Hyatt Affiliates") throughout the duration of this Master
Agreement and for such time thereafter as permitted by this
Agreement. Subject to GDG and MagiNet's consent, not to be
unreasonably withheld, the Tool Kit will permit changes to the
System required both to work on the Activities, System features and
the Hyatt Property (defined below). Any Party making changes to the
System will ensure that there is as little disruption of the
Hotels' and others operations as possible. Any third parties
selected by Hyatt Parties to be licensed to use the Tool Kit under
this provision will enter into appropriate licensing and
confidentiality agreements with GDG and MagiNet, such licenses to
be at no cost and restricted to Hyatt Content (defined below)
production only.
1.2. This Master Agreement governs the relationship of the Parties, and shall
take precedence over the terms in each Individual Agreement insofar as the
Parties' obligations are concerned unless all Parties hereto expressly
agree in writing that such term(s) do not apply.
1.3. The language in this Master Agreement shall take precedence in the event
of any inconsistency with language used in any exhibit or other attachment
to this Agreement.
1.4. The Parties have agreed to enter into agreements containing the same terms
as herein with respect to Hyatt International properties in Europe, Africa,
the Middle East and Latin America (the "Related Hyatt Agreements").
2. INDIVIDUAL AGREEMENTS
----------------------
2.1 The form that will be used for all Individual Agreements is attached as
Exhibit B. As soon as practicable and legally permissible, beginning
immediately with the signing of this Master Agreement, the Parties shall
undertake commercially reasonable efforts to ensure that MagiNet and the
Hotels have entered into Individual Agreements, and that GDG has entered
into any needed agreements directly with each Hotel, so that the purposes
of this Agreement can be achieved.
2.2. MagiNet may have distributors and subsidiaries act on its behalf insofar as
is necessary for the installation, operation and maintenance of the System
and the MATV at each Hotel. MagiNet and GDG hereby fully and directly
guarantee the performance of the GDG Technology at the Hotels. MagiNet
hereby fully and directly guarantees the performance of the System at the
Hotels and of all distributors and subsidiaries performing all or part of
any Individual Agreement. Subject to the dispute resolution provisions of
this Agreement and the Individual
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August 22, 1995
Agreements, MagiNet and GDG agree that they remain fully obligated under
the terms of this Agreement and all Individual Agreements for their
respective obligations, so that the Hyatt Parties and each Hotel shall have
full immediate and direct recourse against them for their respective
obligations without ever being required first to proceed against any
distributor, subsidiary or other third par,
2.3. The Hyatt Parties shall have no payment or any other obligations under any
Individual Agreement. Any payments to be paid by the Hotels are and shall
be the sole responsibility of the Hotels.
3. TERMS OF THE AGREEMENTS
-----------------------
3.1. The term of this Master Agreement will begin on the Effective Date and,
will terminate seven (7) years after this date (the "Initial Termination
Date"). This Master Agreement will continue thereafter for as long as any
single Individual Agreement remains in effect. Upon termination, the
Parties' obligations shall continue as to any required payments and audits
not completed, and specifically as to sections 1.1.5., 4.5 (with respect to
that portion of the manuals that deal with the tool kit), 9., 10., 15.7.,
15.8., 20., 21., 28., and 30. of this Agreement.
3.2. On or about the expiration of the fifth year of the Master Agreement, the
Parties will commence discussions regarding the possible extension of the
Master Agreement for an additional term. Should no agreement be reached
concerning such an extension prior to the Initial Termination Date, the
Master Agreement and all Individual Agreements will be automatically
extended after the Initial Termination Date to a date at least ninety (90)
days after MagiNet's receipt of written notice of the Hyatt Parties' and/or
a given Hotel's intent to terminate the particular agreement(s) involved.
3.3. Each Individual Agreement will continue to be effective at least until
the Initial Termination Date. Upon the expiration of one or more
Individual Agreements, or the refusal of MagiNet to install the System at a
Hotel as permitted under section 3.4 of this Agreement, other guest video
systems may be installed at those Hotels.
3.4. MagiNet will not be required to sign any Individual Agreement if there are
less than twenty-four (24) months remaining prior to the Initial
Termination Date. If there are less than twenty-four (24) months
remaining, MagiNet may, at its option exercised through written notice
within thirty (30) days of any installation request, refuse to sign an
Individual Agreement. If MagiNet determines not to go forward with any
installation, then the Hyatt Parties may seek another vendor to install the
guest video services system for any Hotel for which installation has been
refused.
3.5. The Parties agree that the System shall be installed in all existing Hotels
in accordance with the timetable attached hereto as Exhibit C, and they
shall take all commercially reasonable actions to achieve this goal. The
Parties warrant
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August 22, 1995
and agree that, except as set forth in Exhibit C, there are no known
existing contractual obligations or legal restrictions that would
prevent them or the Hotels from completing such installations within
two (2) years from the Effective Date.
3.6. MagiNet and GDG shall cooperate fully with any and all third party
vendors chosen by the Hyatt Parties and/or the Hotels, including those
hired as consultants, designers, advertising experts and programmers
to assist in developing Content and to provide advice concerning the
System, and the use of other vendors for another guest video services
system when such system(s) can be installed in accordance with this
Agreement.
4. THE SYSTEM
----------
4.1. The System shall include at least: (i) a module for each television
set that can remotely control on demand requests made by guests from
Rooms to central storage devices within the Hotel; (ii) a remote
control and appropriate spares for each television in the Hotel; (iii)
Content storage sufficient for the Content initially installed and a
reasonable amount of expansion capability for additional Content that
may be installed in the future; (iv) a front-desk personal computer,
monitor and printer; and (v) all necessary software, electronic,
computer and switching equipment, including GDG Technology to permit
the receipt, transmission, monitoring and on demand remotely
controlled interactive guest operated in-room display of the Content.
GDG Technology shall include all technologies developed by GDG and
currently available and, as further provided for herein, future
technology developed by GDG, provided to or usable by hotel customers.
4.2. MagiNet and GDG shall provide for use during the term of this
Agreement at no charge one, demonstration System, including the
updated Content except for the Movies, for Hyatt International
headquarters in Chicago, Illinois.
4.3. As part of the consideration to MagiNet for installation of the
Systems, in the absence of material breach by MagiNet, the Hyatt
Parties agree that they will undertake their best efforts to ensure
that the System will be the sole and exclusive in-room guest video
services system provided to their guests for each Hotel during the
term of its Individual Agreement (except as provided for herein,
including section 4.16 of this Agreement). The Hyatt Parties will not
either directly or indirectly solicit the installation of any video
system in Hotels which might directly compete or cause transmission
interference with the System. MagiNet will not be obligated to
install the System in any Hotel that will not agree to such
exclusivity.
4.4. MagiNet and/or GDG shall develop and install software, and MagiNet
shall repair, purchase, build and install all hardware required to
operate the System, including all needed upgrades to Hotel MATVs. All
installed and provided hardware and software shall be specified and
listed as an exhibit to the Individual Agreements, and their presence
shall be verified in each Individual
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August 22, 1995
Agreement.
4.5. MagiNet and GDG shall provide documentation to provide the reader with
sufficient information so that the System can be operated without further
consultation (the "System Manual"). Two (2) copies of each System Manual
shall be provided for each Hotel, with one copy to both Hyatt Parties.
4.6. Ten (10) copies of a manual that describes the Tool Kit sufficiently to
permit its use shall be provided to the Hyatt Parties (the "Tool Kit
Manual").
4.7. System Manuals and Tool Kit Manuals may be copied and printed in whole or
in part by Hyatt Parties and Hotels on an as needed basis. All Manuals
shall be marked and treated by all Parties as confidential. Notice of
copying of each Manual shall, with best efforts, be given to MagiNet
and/or GDG.
4.8. The System shall provide guests with the Content in as efficient and
effective a manner as is reasonably and technically possible at the time
the System is installed in each Hotel, and as further specified and
described in the Technical Requirements.
4.9. The System shall accommodate, and MagiNet and GDG shall ensure the
delivery of across the System and the MATVs., to the extent reasonable
and commercially possible, all Content that the Hyatt Parties determine
in the future would benefit Hotel guests or Hotel staffs and would be
economically viable to add to each Hotel's services.
4.10. The System will be multilingual, and shall permit displays and commands
in at least three separate languages in any given Hotel. The selected
languages have been preliminary designated in Exhibit A for the Hotels
identified, which designations can be modified at the Hyatt Parties'
and/or Hotel's option and at the Hotels or Hyatt Parties' expense for
Hyatt Content.
4.11. MagiNet and GDG shall at all times in the future ensure that the System
and all other computer,, reservations and information systems operated or
used by the Hyatt Parties and Hotels ("Hyatt Systems") are interoperable,
and each will ensure that it takes no action(s) that could jeopardize
such interoperability provided that Hyatt Parties will ensure standard
-------------
industry interfaces are provided by such Hyatt Systems for interface with
GDG Technology. If such interoperability of the System and Hyatt Systems
were threatened, then the Hyatt Parties and/or the Hotel(s) affected can
immediately seek any assistance deemed necessary by the Hyatt Parties
and/or those Hotel(s) to disconnect the System from the point of
interface to such Hyatt System to avoid, prevent and/or cure any such
threat or defect. In the event that any Hyatt Systems are modified after
the System is installed, MagiNet and GDG shall be required, if necessary
in order for the System to function with the Hyatt Systems, to use their
best efforts to modify the System so that it operates in accordance with
the requirements of this Agreement and any Individual Agreement that
exists with the Hotel(s) involved. If such modifications are feasible,
then MagiNet and GDG shall
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August 22, 1995
provide the Hotel(s) affected with an estimate of what is required to
undertake the modifications. The estimate shall be binding upon MagiNet
and GDG, but the affected Hotel(s) may seek other quotes for the work
required, and are not bound by the estimate unless it indicates in
writing that it agrees with the estimate.
4.12. MagiNet and GDG understand and agree that the System must meet or exceed
all Technical Requirements. MagiNet shall provide sufficient spare
equipment to minimize the effect of component failure on guest services
and to enable rapid repair and replacement of defective components,
including spare converters and remote controls to enable Hotel staff to
meet the short term needs of its guests if repair and/or replacement of
components are required as further referenced in Section 12.8.
4.13. The development and use of the System shall not interfere with the
operations of the Hyatt Parties or any Hotel, including any interference
with the continued operation of the Hotels during the period of
installation except as may reasonably be required to effectuate the
installation.
4.14. Each Hotel will ensure the safety and security of the System and all
related property of MagiNet at all times while the System is installed in
the Hotel, and will be liable for any loss or damage to the System
resulting from negligence on the part of Hotel's employees or third
parties (excepting MagiNet and GDG and their associated entities) to
which Hotel permits access to the System.
4.15. The System shall not contain any undocumented features. MagiNet, GDG, the
Hyatt Parties, the Hotels or any other person shall not adversely or
improperly affect or alter either the Content or other materials being
transmitted over the System and/or Hyatt Systems. MagiNet and GDG are
specifically prohibited from knowingly including, and agree not to
include, any virus, timer, clock, or limitations in design or routine
designed to adversely affect or alter the Content or components of the
System and/or Hyatt Systems, in particular any devices that destroy or
otherwise make data inaccessible.
4.16. Nothing in this Master Agreement nor any Individual Agreement shall be
deemed to affect in any way, and/or preclude: (i) the Technical
Requirements;(ii) the Hyatt Parties or the Hotels from entering into
agreements in order to obtain other vendors as otherwise permitted by
this Agreement; (iii) the complete and unfettered right and ability of
the Hyatt Parties and the Hotels to install video devices, cd players and
other devices, including telefax machines, computers and computer lines
(collectively the "Devices"), in Hotels for guest or others' use provided
that content made available by Hyatt Parties and the Hotels for such
Devices does not compete with content provided via the System; (iv) the
Hyatt Parties' and Hotels' rights and ability to connect other
communications devices that will be able to communicate with guests
through the guests' televisions and other forms of monitors; (v) the
Hyatt Parties' and Hotels' rights to continue to broadcast the Hyatt
Content after termination of this Agreement or any Individual Agreements;
and (vi) guests' rights to have and use
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August 22, 1995
their own Devices with their own content in the Rooms. Any
installation or use of Devices by Hotels and guests may not interfere
with delivery, reception or use of Content anywhere else in the Hotel
by any other guest, or violate any copyright restrictions of any
other Content.
5. ADVISORY BOARD
--------------
5.1. An Advisory Board (the "Advisory Board") shall be formed for the
purpose of assisting in the administration of the relationships
between the Parties contemplated by this Agreement.
5.2. The Advisory Board shall be comprised of at least three (3), not to
exceed (4), voting persons, at least one of whom shall be designated
by each of the two Hyatt Parties, MagiNet and GDG. Such number of
Board members shall in no event be reduced below three, Each party
shall be entitled to have as many nonvoting persons attend Advisory
Board meetings as they desire.
5.3. The Hyatt Parties representative(s) shall be entitled to cast a total
of two (2) votes on any issue. MagiNet and GDG shall be entitled to
cast one (1) vote each. No action voted upon and approved by a
majority of the Advisory Board's votes shall be acted upon without
subsequent written approval of the chief executive officer of each
party or his or her designee.
5.4. Meetings of the Advisory Board shall be held not less than four times
per year. A meeting of the Advisory Board may be called by any
Advisory Board member by telephonic or written notice to all Advisory
Board members at least ten (10) days prior to such meeting of the
time, place and general purpose of such meeting. The meeting may be
held telephonically.
5.5. The Advisory Board shall have specific authority to discuss and vote
on the following matters:
5.5.1. Advertising Rates - The Advisory Board shall discuss
standard advertising rates for local, regional and global
advertising.
5.5.2. System And New Technology Development and Implementation
- The Advisory Board shall serve in an advisory role in
evaluating System and new technology development and
implementation alternatives and schedules, and confirming the
eligibility of development expenditures for reimbursement from
revenue obtained from any approved new services revenue or
otherwise.
5.5.3. Dispute Resolution - The Advisory Board shall consider
all disputes that arise during the day-to-day conduct of the
relationship, including the key account status of certain
accounts.
5.5.4. General Oversight - The Advisory Board will generally
oversee the relationships and activities contemplated by this
Agreement, and will provide executive commitment and direction
to such relationships and
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August 22, 1995
activities. Such oversight shall include, but not be limited
to, considering issues arising concerning compliance by the
Parties with the terms of this Agreement.
5.6. Each party shall designate a senior executive of their respective
organizations to serve as a senior executive affected by a particular
issue ("Senior Executive"). The Senior Executives shall jointly hear
appeals of issues which are submitted by the Advisory Board.
5.7. An affirmative vote is required from the Hyatt representative(s) in
order for any vote to be binding.
6. HYATT INTERFACES AND CONTENT
----------------------------
6.1. The Hyatt Parties will have the exclusive right to develop, design,
and implement, and obtain and retain full ownership rights of: (i)
the design elements, including the color scheme used, for all Hyatt
Content other than that covered by third party copyrights and
approved by the Hyatt Parties, including all screens and displays;
(ii) all materials and designs created for or by the Hyatt Parties
for the System; and (iii) all Hyatt Parties' Intellectual Property
that relates to these elements, including all those that are subject
to trademark and trade dress ownership under United States or any
local laws. All such elements shall be known as the "Hyatt
Interfaces."
6.2. The Hyatt Interfaces may be changed by the Hyatt Parties at any time.
Such changes shall be implemented within a reasonable time after the
Hyatt Parties' written request to do so, and in any event no later
than ninety (90) days after written notice thereof unless additional
time is reasonably necessary and approved by the Parties.
6.3. The Hyatt Parties shall have the right and complete control to
utilize the Hyatt designated System capacity in Hotels to display
infomercials, programs on other hotels and resorts, and similar
advertising and merchandising of hospitality industry products and
services MM by Hyatt or Hyatt Affiliates ("Hyatt Products"),
including Hyatt Interactive Services (see Section 7. below) and Hotel
Services (see Section 8. below) (collectively, "Hyatt Content").
6.4. The Hyatt Parties may use the Tool Kit to develop, design and
implement the Hyatt Interfaces and Hyatt Content. If the Hyatt
Parties choose to do so, the Hyatt Parties may pay GDG and/or MagiNet
their standard rates to undertake such development, design and
implementation. Nothing herein shall relieve GDG and MagiNet from
their obligation to install, operate and maintain the System and the
MATVs, and to implement Hyatt Interfaces and Hyatt Content in
accordance with this Agreement. All persons who work on such
implementation shall sign all necessary documents to ensure that all
ownership rights to Hyatt Interfaces and Hyatt Content vest fully and
completely in the Hyatt Parties.
6.5. Hyatt Content shall not be directly competitive with any then
currently available
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August 22, 1995
Content.
6.6. Except as specifically otherwise provided herein, all Content other
than Movies must First be approved by the Hyatt Parties and the
Hotels prior to installation on the System.
7. HYATT INTERACTIVE SERVICES
--------------------------
7.1. "Hyatt Interactive Services" shall mean those Interactive Services
that relate to Hyatt Products that are developed for or by one or
more of the Hyatt Parties or Hyatt Affiliates. Hyatt Interactive
Services may be offered to guests and others through the System.
7.2. Any person or entity working for or related to any Hyatt Party or
Hyatt Affiliate may develop Hyatt Interactive Services. Nothing in
this Agreement shall be read to prohibit such independent
development.
7.3. All specialized hardware and software not covered by this Agreement
for the provision of or constituting Hyatt Interactive Services shall
be paid for by and deemed to be the property of one of the Hyatt
Parties or its designee or assignee.
7.4. MagiNet and GDG shall cooperate fully in providing and fully
implementing, all interfaces and operating procedures required so
that any Hyatt Interactive Services may be used on the System.
8. HOTEL SERVICES
--------------
8.1. "Hotel Services" shall mean those guest information and other
services available now and in the future from Hyatt Parties, Hyatt
Affiliates and Hotels, including the development, storage and
transmission of information about: (1) guest billings status, (2)
minibar consumption and other charges, (3) hotel, transportation, and
restaurant reservations, (4) guest marketing information for or on
behalf or third parties, and (5) guest messaging systems and
services.
8.2. MagiNet shall ensure that Hotel Services are available through the
System, and can be accessed with no more delay than may be
experienced in order to obtain Interactive Services from MagiNet,
including such assistance as may be needed for each Hotel so that all
technical requirements are met for the transmission of Hotel Services
through the System.
8.3. If any of the Hyatt Parties or any individual Hotel requires MagiNet
or GDG to provide services requiring the modification of hardware or
software interfaces other than those on the System in order to
implement Hotel Services, then the party making such a request shall
be solely responsible for such costs. If MagiNet or GDG satisfies
such requirements, then any direct costs for the alteration of
existing interfaces solely for the purpose of providing Hotel
Services, and approved by the Hyatt Parties and one or more Hotels,
shall be paid by the approving entity. The Hyatt Parties' own costs
of development and
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August 22, 1995
transmission of Hotel Services shall be borne by Hyatt AP or any
specific Hotel or group of Hotels responsible for approving such
costs.
9. OWNERSHIP RIGHTS
----------------
9.1. "Hyatt Systems" shall mean those hardware and software systems other
than the System used by Hyatt Parties and the Hotels to deliver
Content to guests in their rooms, including any transmitting devices
and equipment, wiring, televisions, and cable or master antennae
transmission systems, as well as all software and hardware used for
each Hotel's PMS and MATV.
9.2. The Hyatt Interactive Services, Hyatt Interfaces, Hyatt Content,
Hyatt Systems, all signal boosters, wiring and faceplates, and any
portions of the System that are permanently installed, or installed
in such a way that the removal of that part would cause more than
incidental wear and tear to the premises, and all other property at
the Hotels and with the Hyatt Parties apart from the System, shall be
considered by the Parties to be the sole and exclusive property of
the Hyatt Parties and/or the Hotels (the "Hyatt Property"). All Hyatt
Property shall be considered by the Parties to be the property of the
Hyatt Parties and/or the Hotels, irrespective of whether such
information, materials, hardware and software systems are used on or
developed by MagiNet and/or GDG and/or any affiliated entities or
third parties.
9.3. The System and Content provided by MagiNet and/or GDG that is not
Hyatt Property shall be either the property of MagiNet or GDG or
property licensed to MagiNet or GDG by a third party.
9.4. Hotels will not allow any lien, encumbrance, mortgage, claim or
security interest to be attached to or be made against those portions
of the System owned by MagiNet and/or GDG. MagiNet and GDG and those
working for these Parties shall not allow any lien, encumbrance,
mortgage, claim or security interest to be attached to or be made
against Hyatt Property.
9.5. Hotels will maintain all MagiNet notices or plaques affixed to the
System's equipment, stating that all such equipment is the sole and
exclusive property of MagiNet. If MagiNet elects to file documents
with governmental agencies for the purpose of notifying potential
creditors of' Hotels that the equipment is the property of MagiNet,
Hotels will assist with such filing at no expense to the Hotels, if
requested to do so by MagiNet. Nothing herein shall require the
expenditure of any time or resources by any Hotels beyond
administrative assistance on any legally required and appropriate
documents, which shall first be reviewed and approved by the Hyatt
Parties for form and content relative to their own ownership
interests.
9.6. Equipment comprising part of the System and owned by MagiNet will not
be removed from Hotels for any purpose whatsoever during the. term of
the Individual Agreements except for purposes of repair, and when
otherwise permitted hereunder.
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August 22, 1995
9.7. In the event the safety of the System is threatened due to
earthquake, flood, fire, strike, civil disruption or similar force
majeure causes, MagiNet will be entitled to enter upon Hotel premises
and to remove the System from danger upon reasonable notice to Hotel.
This provision shall not entitle MagiNet to disrupt normal guest
services, nor to intrude on or violate the privacy of the Hotels'
guests.
9.8. Upon termination of its Individual Agreement, each Hotel will allow
MagiNet to remove that portion of the Systems owned by MagiNet.
MagiNet will undertake to remove the System from the premises within
thirty (30) days after such termination, and, at Hotel's option, will
return the premises affected by the installation and or removal of
the System to their original condition, normal wear and tear
excepted, at no cost to Hotel and with minimal disruption to the
provision of Content to Rooms and other Hyatt Property. MagiNet also
hereby agrees that if a new vendor is installing a system in the
Rooms, that MagiNet will remove those portions of the System owned by
MagiNet in a timely and efficient manner.
10. INTELLECTUAL PROPERTY
---------------------
10.1. "Intellectual Property" shall mean all trademarks, service marks,
trade names, trade dress, patents, copyrights, trade secrets, and
other proprietary rights recognized under the laws of any nation.
10.2. Subject to the provisions of this Agreement, all Intellectual
Property owned by Hyatt Parties, the Hotels and any related entities
shall be and remain the property of those entities. MagiNet and GDG
and any related entities shall be provided the limited right to use
and practice such Intellectual Property solely for the purpose of
ensuring that they can perform the Activities.
10.3. Subject to the provisions of this Agreement, all Intellectual
Property of MagiNet and GDG and any related entities shall be and
remain the property of those entities. Hyatt AP, Hyatt Services, the
Hotels and any related entities shall be provided the limited right
to use and practice such Intellectual Property solely for the
purposes described in this Agreement and the Individual Agreements.
10.4. The Parties recognize and agree that it is necessary Or each party to
use certain Intellectual Property of the other in their activities
contemplated under this Agreement. The Parties shall protect the
other parties' Intellectual Property to the same degree as they
protect their own Intellectual Property, but in any event reasonable
steps shall be taken to ensure its protection, including steps to
prevent any reverse engineering of software, hardware, or other
proprietary technology.
10.5. Nothing herein shall be interpreted to transfer, convey or license
any rights whatsoever in any party's Intellectual Property unless
provision therefore is specifically provided for herein. No party
shall have the right to use any trademarks or service marks in the
absence of the owning party's specific
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August 22, 1995
written agreement to permit such use.
11. INSTALLATION
-----------
11.1. MagiNet shall apply for and obtain all licenses, permits and other
government approvals required to do work on each Hotel's premises,
and shall at all times comply with the applicable legal and
regulatory requirements for such work. It shall be MagiNet's
responsibility to handle all such requirements, and also its
responsibility to pay for any legal expenses and fines incurred due
to MagiNet's failure to comply with such requirements.
11.2. MagiNet and its subsidiaries and distributors shall carry and
maintain for each installation, and any later work at the Hotels,
worker's compensation insurance, or such other insurance as is
required and or needed to pay for any actions of MagiNet's personnel
and all such other personnel, in the amount of at least $1,000,000
combined single limit comprehensive general contractual liability
insurance, and at least $1,000,000 combined single limit vehicle
liability insurance. Copies of all applicable policies and
certificates of insurance shall be provided to the Hyatt Parties and
the relevant Hotel prior to commencement of any work on the premises
of any Hotel. All such policies and other contracts and certificates
of insurance shall include the following provision, or wording with
the same legal effect:
"Hyatt International - Asia Pacific Limited, its affiliates and
subsidiaries and the owners of Hyatt hotels are named as
additional insureds under these policies; such insurance shall be
primary to and not contributory with these entities' and persons'
own insurance."
11.3. An interface with each Hotel's PMS shall be completed by MagiNet and
GDG during installation of the System. A front-desk personal computer
and printer will be included as a part of the System for printing
charges for each guest purchase or rental in case such interface
fails at any time. MagiNet and GDG will ensure that the System will
fully interface and integrate with the PMS. As a part of such
integration, guest usage charges shall be automatically posted to
each individual guest's bill, counts of access shall be available to
the Hotel and centrally consolidated for all Hotels, and other
reporting will be permitted. Each Hotel will cooperate with MagiNet
and GDG for the purpose of successfully implementing the interface,
and shall undertake its best efforts to insure cooperation. between
MagiNet and GDG and each PMS software vendor used by the Hotel. All
interface protocol installation or maintenance charges asserted by
the PMS software vendor and agreed upon in advance by the Hotel will
be paid for by each Hotel.
11.4. Each Hotel will provide such access as may be reasonably requested by
authorized personnel to enable complete installation of the System in
the Hotel, including without limitation providing all Hotel
facilities set forth in Exhibit A within a reasonable time to permit
complete installation. Each Hotel will make reasonable efforts to
provide sufficient access to guest rooms for the purpose of
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August 22, 1995
equipment installation so that such installation is performed with a
minimum of delay. During the installation process, each Hotel will provide
complimentary or discounted rooms for out of town members of the
installation team consistent with its practices for other vendors.
11.5. Appropriate fully qualified personnel of MagiNet and GDG shall perform
MagiNet's and GDG's obligations hereunder in an efficient, courteous,
effective and timely manner and all such personnel shall be bonded,
trained and supervised in accordance with appropriate hospitality industry
practices consistent with local practice and custom. All actions of any
person acting for or on behalf of MagiNet and GDG shall be subject to the
same rules and regulations as are applicable to Hotel staff. All such
persons shall wear identification badger and shall be dressed in a proper
fashion.
11.6. Upon completion of the installation, MagiNet and GDG will test and ensure
that the System in each Hotel, and in all Rooms is fully functional
without material defects. Upon the successful conclusion of such testing,
MagiNet and GDG will each deliver to the Hotel and the Hyatt Parties a
written Certification (the "Certification") that the System is fully
functional and without material defects and meets all Technical
Requirements. Such Certifications will be attached to the Individual
Agreement and added to this Agreement as exhibits.
11.7. MagiNet shall visit each Hotel and shall train all employees deemed by a
Hotel to be appropriate in the use of the System at installation, as
specified in Section 23.3.
11.8. Each Hotel will begin the process of billing guests for and generating
revenue from the Content no later than the date of the Certification.
11.9. Each Hotel shall provide access to its MATV. MagiNet shall be responsible
for all work required to and all costs incurred in upgrading MATVs as
required for proper operation of the System, except that improvements
required for in-wall cable and its installation in excess of $5,000 shall
be paid by the Hotels. If these costs exceed [***] and MagiNet elects
not to pay for such excess, then the Movie commission rate payable to the
Hyatt Parties and/or the Hotels for the Movies shown at those Hotels shall
be increased by five percent [***] for a period of three years. Nothing
herein shall be deemed to allow or require either the Hyatt Parties or any
Hotel to submit any records beyond those showing the actual costs of the
purchase and installation.
11.10.The installation of the System and upgrading of MATVs shall not degrade
MATVs, or impair the ordinary reception of broadcast programs or other
services on the MATV. Any MATV hardware and equipment owned by Hotel which
has been disconnected as a result of the installation will be taken to
Hotel designated storage locations by the installation personnel.
11.11.Hyatt Parties shall exercise best efforts to ensure that new Hotels to be
added hereunder shall be constructed with MATV which comports with the
Technical
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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August 22, 1995
Requirements.
12. MAINTENANCE
-----------
12.1. MagiNet will promptly provide all maintenance, repairs and
replacement of all software and hardware and other equipment
necessary to ensure proper operation of the System and the MATV in
each Hotel, including satisfactory signal quality and shall ensure
that a qualified person is available on a twenty-four (24) hour basis
to receive service requests. GDG will provide backup support to
MagiNet as necessary to ensure proper maintenance, repair and
replacement occurs. Such maintenance and technical assistance will be
provided free of charge, unless the maintenance is occasioned by a
breach by Hotel of any of its obligations as set forth in the
Individual Agreement, or by unauthorized use, access, theft,
negligence or damage caused by Hotel staff or third parties not under
contract to MagiNet or GDG. Hotels shall be trained so that they can
undertake routine maintenance as agreed upon by the Hotel and
MagiNet. MagiNet shall not have any obligations under Ws paragraph
for maintenance of hardware which the Hotel has contracted to other
parties.
12.2. Each Hotel will, at the Hotel's expense, notify a person designated
by MagiNet by telephone or by fax of any failure or degradation of
any part of the System anywhere within the Hotel, including in any
Room.
12.3. The Hotel will notify MagiNet as soon as is reasonably possible and
upon Hotel's actual notice of any unauthorized use, access, theft,
damage or malfunction of or to the System.
12.4. Each Hotel will allow authorized personnel of MagiNet and GDG to have
escorted access to the System at reasonable times in order to conduct
routine maintenance, to observe and to monitor the System, to ensure
suitable operating conditions, to implement improvements in the
System, to conduct repairs, and to otherwise carry out MagiNet's and
GDG's obligations set out in this Agreement or the Individual
Agreement.
12.5. In the event that any malfunction, nonconformity or other defect in
the System is believed to exist by Hotel or the Hyatt Parties, and
notice of such defect is given, MagiNet shall promptly undertake
their best efforts to have the defect corrected and in no event shall
there be more than a four (4) hour delay in MagiNet's response and
all repairs shall be made as quickly as possible. If Hotel does not
provide prompt access to the System to correct System failures once
MagiNet has been notified by Hotel of such System defects, MagiNet
will not be liable for any delays so incurred.
12.6. Any repairs or replacements to any equipment supplied by MagiNet made
necessary by any negligent or willful act by Hotel or any of its
guests, employees, contractors, servants, and agents, or force
majeure events, will be undertaken by MagiNet at Hotel's expense.
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August 22, 1995
12.7. Hotels shall not permit any person to tamper with or attempt to make
repairs to any equipment supplied by MagiNet, except for the
replacement of televisions and such other circumstances agreed upon
by the Hotels. In emergencies, Hotels may carry out repairs in
accordance with instructions given by MagiNet.
12.8. Each Hotel will be responsible for replacement of depleted batteries
and for paying for replacement infrared remote control units in the
event of theft, loss or damage in excess of twenty (20) units per
year. Initial replacement cost is as set forth on Exhibit D, plus
shipping, duties and taxes, and is subject to change upon written
notice from MagiNet to Hotel, with an effective date at least thirty
(30) days in advance of a change, in accordance with commercially
reasonable and customary practices.
13. MOVIES
------
13.1. It is understood and agreed that, except as otherwise provided below,
MagiNet shall have absolute control and discretion in the selection
of the movies it contracts for with the movie studios or their
distributors and provides to Hotels (the "Movies").
13.2. MagiNet shall provide a method whereby a guest will be able to
electronically restrict persons from viewing any adult selections
being offered in a Room.
13.3. When available from producing studios, the Content offered by MagiNet
shall include first run Movies offered to Hotels that shall be no
less current and offer no less variety of first run and other titles
than those available at competing hotels in the relevant country.
MagiNet shall consult with the Hotels on a regular basis to ensure
the provision of a selection of titles properly suited to each
Hotel's guest profile. Hotels and the Hyatt Parties may review the
movies and other video materials being offered by MagiNet, and may
object to Movies they feel violate the sensitivities of the guests at
a particular Hotel, and any unresolved disputes will be adjudicated
by the Advisory Board, pending which resolution the objectionable
Movies shall not be offered at the Hotel.
13.4. MagiNet will be solely responsible for any royalty payable to Movie
suppliers and any license fees for Movies made available on the
System.
13.5. Each Hotel will be responsible for ensuring that access to the
room(s) in which the central storage and transmission equipment for
the System is located is restricted to persons accompanied by persons
authorized by MagiNet to be present there except in cases of
emergency. MagiNet shall authorize a sufficient number of persons
employed by the Hotel for such purpose. Hotels will not authorize
copying of any Movies and will undertake their best efforts to ensure
that the Movies are exhibited in the Rooms only, and not in the
public rooms and public areas (including lobbies, hallways,
restaurants, bars, meeting rooms, etc.) of the Hotels. The Movies
will not be exhibited other than in accordance with this Agreement.
Each Hotel will use reasonable efforts to insure that only registered
guests of the Hotel and their invitees may view the Movies.
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August 22, 1995
13.6. Cassettes and other media that contain the Movies ("Cassettes") will
be kept in a secure and locked area. Hotels will prevent unauthorized
access to and use, exhibition or viewing of any Cassette by any
person other than as set forth herein. Hotels will not permit any
person to duplicate or make alterations of any kind to Cassettes.
Hotels will promptly report to MagiNet any unauthorized use of the
Cassettes as soon as a Hotel becomes aware of any such use. If a
Hotel has videocassette recorders installed in the Rooms, the Hotel
shall agree that MagiNet may, where required to do so as a result of
its licensing agreements, as directed by the Hotel, either (i)
disable the "record" function in such a way that does not permanently
damage the videocassette equipment, but only to the extent required
to comply with such restrictions, or (ii) disable the Movie function
for such Rooms.
13.7. MagiNet shall be responsible to ensure that any of the transmissions
on the System controlled by it do not violate any applicable laws,
including those of the country in which each Hotel is located,
including specifically any laws relating to copyright, pornography,
and censorship of information or materials.
14. NEW TECHNOLOGIES
----------------
14.1. MagiNet and GDG shall at all times offer to the Hyatt Parties and
each Hotel the most advanced guest video services and features (and
associated technologies) either of these Parties or its competitors
offers to any other hotel.
14.2. MagiNet and GDG shall provide the Hyatt Parties with written notice
of any new guest video services and features (and associated
technologies) within thirty (30) days of the party's first knowledge
of such development(s).
14.3. The Parties agree that the Advisory Board will periodically, and at
least quarterly hold a meeting to review the guest video services and
features (and associated technologies) currently available to hotel
chains and hotels competitive with the Hotels and the services and
features (and associated technologies) which may become available in
the industry, whether from MagiNet, GDG or otherwise.
14.4. Should Hyatt determine that it is commercially necessary in order to
maintain its competitive position in the marketplace for one or more
services or features (and associated technologies), or a more
advanced version of existing services or features (and associated
technologies), to be added to the System, then GDG and/or MagiNet
shall within nine (9) months of written notice from the Hyatt Parties
of such determination (which shall be six (6) months in cases where
such service or feature and associated technology is in use in the
marketplace), implement the service or feature and associated
technology in all future Hotel installations and in any Hotels then
subject to Individual Agreements. The failure of MagiNet or GDG to
comply with this provision shall be a default under this Agreement
and shall be subject to the remedies set forth in section 26.3.
hereof. The failure of MagiNet and/or GDG to comply with this
provision shall also permit Hyatt and or Hotels to obtain from a
third party those services
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August 22, 1995
or features (and associated technologies) not provided by MagiNet or GDG,
not withstanding the exclusivity provisions of section 4.3. hereof.
14.5. Should MagiNet or GDG add to the System a service or feature (and
associated technology) requested by Hyatt or otherwise, such service or
feature (and associated technology) will be implemented in such a way as
not to prevent Hyatt from providing consistent guest services throughout
its Hotels. The failure
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August 22, 1995
of MagiNet and GDG to comply with this provision shall also permit
Hyatt and/or Hotel to obtain any assistance from a third party
necessary to provide such consistent service, notwithstanding the
exclusivity provisions of section 4.3. hereof.
15. HOTEL FEES
----------
15.1. Each Hotel will charge hotel guests for access to Movies and other
pay per view or pay for service Content for which charges are
assessed (the "Rental Fees"). The amount to be charged for Movies
shall be set by MagiNet in consultation with and approved by each
Hotel at the time of the execution of the Individual Agreements or,
for other pay per view or pay for service Content, at the time the
Content is made available. To the extent that the Hotel and MagiNet
agree, such charges shall not commence until after a guest has been
allowed to review the selection for five (5) minutes. In addition to
the Rental Fee, each Hotel will collect from guests any taxes
applicable to such receipts, and will pay those taxes to the
appropriate government authorities.
15.2. From time to time, MagiNet may revise the Rental Fees after
consultation with Hotels. Rental Fees shall be charged which are
customary in each locale, and shall be increased annually in an
amount at least equal to the increase in the local cost of living.
MagiNet will notify each Hotel in writing of any new Rental Fee and
the effective date at least thirty (30) days in advance of a
revision.
15.3. In the event any Hotel guest disputes the amount of Rental Fees in a
situation in which Hotel personnel are otherwise unaware of any
System malfunction (herein referred to as a "Denial"), each Hotel may
in its sole discretion credit the disputed amount to the guest's
account provided it provides MagiNet's local representative with a
copy of the credit voucher showing room number, date, time of day,
and reason for the disputed charge. Hotel will use its best efforts
to limit Denials to not more than five percent (5%) of gross Rental
Fees per month from Rental Fee payments otherwise due for Denials
actually credited to guests. MagiNet will provide training and/or
materials to assist Hotels in these efforts, and the Advisory Board
will provide suitable guidelines to achieve this objective.
15.4. The System will generate an accurate record (the "Access Record") of
the access to the System by any guess, including a record of the
access charges for each individual guest's bill or Room account, the
types of access made, and any other reasonably recordable information
that may be requested. The Access Record will not retain the names of
guests. MagiNet and GDG will be responsible at their own cost for
programming the System to enable it to provide the aforesaid data.
The Access Record for each Hotel will be held in confidence by the
personnel of each Hotel. MagiNet and the Hyatt Parties may review and
use the Access Record for such purposes as they may reasonably deem
appropriate. Each party will indemnify the other against any and all
claims as a result of their improper use of such Access Record.
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August 22, 1995
15.5. Hotels will submit a report (via telefax) to MagiNet on the first day
of each month which details the previous month's gross Rental Fees
and itemizes deductions for all Denials allowed. MagiNet shall
invoice the Hotels for gross Rental Fees less Denials allowed, Hotel
commissions payable under Exhibit D, and unreimbursed tax payments
("Net Rental Fees"), all based upon guest usage as reported by the
relevant PMS accounting records during each calendar month, which
information shall be accessible and reviewable during the month by
MagiNet, the Hotels and the Hyatt Parties. Hotels shall hand post any
invoices printed in hard form as a result of PMS downtime to
accurately capture those buys in PMS records.- Both parties agree to
mutually and amicably resolve any variances between their respective
records of Rental Fees and Denials.
15.6. Each Hotel will pay to MagiNet or the designated subsidiary or
distributor or other designated party within a reasonable time as
established in the Individual Agreement the Net Rental Fees invoiced
by MagiNet as provided in Section 15.5. The payment transmission will
also specify the occupancy rate for the month.
15.7. Each Hotel will keep current, complete and accurate records of
occupancy rates and all Net Rental Fees and other amounts due to
MagiNet pursuant to this Agreement. Throughout the duration of this
Agreement, each Hotel's books and records pertinent to the Rental
Fees, Denials and Net Rental Fees for any month will be open to
inspection and reproduction by MagiNet and, if necessary, to an audit
by a mutually agreed upon certified public accountant as an
authorized representative of MagiNet upon reasonable advance written
notice to Hotel. No. such records need to be retained beyond one
year. MagiNet's right to inspect and audit the books and records of
Hotel will not extend beyond one year from the expiration of its
Individual Agreement. If any audit by MagiNet discloses any non-
payment or underpayment of any amount payable to MagiNet, the audited
Hotel will immediately pay to MagiNet any deficiency, plus the
interest charges established in the Individual Agreement. If the
deficiency is in excess of fifteen percent (15%) of the actual amount
payable to MagiNet for the period for which the deficiency occurred,
the audited Hotel will reimburse MagiNet for all costs incurred by
MagiNet in conducting the audit.
16. THIRD PARTY CONTENT
-------------------
16.1. The Parties intend to market advertising and merchandising system
capacity for the System to third parties. All such Content, apart
from that defined as Hyatt Content shall be known as "Third Party
Content". GDG, the Hyatt Parties and MagiNet may solicit and enter
into agreements to provide third parties with space for advertising
and merchandising through the System for all Hotels.
16.2. A "Key Account" is a third party advertiser or merchandiser that is
specifically reserved to Hyatt Parties, or which falls within an
identified category of entities and persons about whom no Content is
to be included on the System, or who are
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August 22, 1995
otherwise not appropriate for the System, all of which is to be
determined at the Hyatt Parties' sole discretion. Such Key Accounts
will be identified by the Advisory Board for a decision by the Hyatt
Parties.
16.3. The Parties shall develop guidelines for the marketing of advertising
and merchandising system capacity for the System through the Advisory
Board. The Hyatt Parties shall have exclusive right to accept or
reject any specific Third Party Content, and to control how and who
makes any contact with a prospective marketer of products or
services. Each prospective customer shall be identified prior to any
approach being made by either MagiNet or GDG by providing to the
Advisory Board: (i) the name of such customer, (ii) the name of the
contact person at such customer, (iii) the individual unit for which
the contact person has buying authority, and (iv) if applicable, an
indication that such customer constitutes a Key Account, or that a
determination with respect to Key Account status is pending.
16.4. GDG and its affiliates will offer to provide the production services
for Hyatt Content and for Third Party Content but the Hyatt Parties
and third parties are not obligated to use GDG's services. Any
production services provided to third parties shall be on
commercially reasonable terms to be mutually agreed upon between GDG
and such third party. Production services provided to the Hyatt
Parties shah be for the lowest fees offered to other customers of
similar services.
16.5. Each party shall fully cooperate with each other party hereto, and
any other person or entity involved in creating Third Party Content,
in providing format information useful in the production of Third
Party Content and in implementing any technical interfaces necessary
to enable display of Third Party Content on the System.
16.6. For any Third Party Content utilizing the System at a Hotel, the
Hyatt Parties and the Hotels shall be entitled to retain [***] and.
GDG and MagiNet shall be entitled to retain [***] of Net Content
Revenues actually paid to one of the Parties and the Hotels hereto
("Content Commission"). The precise methods by which such payments
are to be made, and the calculations of appropriate expenses to be
charged for soliciting and obtaining Third Party Content prior to any
distribution to the other parties, shall be determined by the
Advisory Board.
16.7. The Parties agree to make and maintain complete books, records and
accounts regarding sales of and expenses relating to Third Party
Content. Each of the Hyatt Parties, GDG and MagiNet shall have the
right to examine such books, records and accounts during the other
party's normal business hours once annually to verify the reports on
Content Commission payments due. If any such examination discloses a
shortfall or overpayment., the appropriate party shall promptly pay
the amount of such shortfall or refund such overpayment.
16.8. "Net Content Revenue" shall mean all revenues or other consideration
received
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[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
August 22, 1995
by any of the Parties and the Hotels from advertisers, merchandisers,
hotel guests and others from the transmission of Third Party Content
over the System, less allowable Denials, applicable unreimbursed tax
payments, and any production costs, development costs, marketing
costs or other expenditures which have been approved for
reimbursement by the Advisory Board.
17. INTERACTIVE PRODUCTS AND SERVICES
---------------------------------
17.1. The Parties intend to develop and otherwise obtain interactive guest
video products and services including games ("Interactive Services").
17.2. The Parties shall develop and otherwise solicit and obtain
Interactive Services for the System through the Advisory Board. The
Hyatt Parties shall have exclusive right to accept or reject any
specific Interactive Services.
17.3. GDG and its affiliates will offer to provide the production services
for Hyatt Interactive Services and for Interactive Services but the
Hyatt Parties and third parties are not obligated to use GDG's
services. Any production services provided to third parties shall be
on commercially reasonable terms to be mutually agreed upon between
GDG and such third party. Production services provided to the Hyatt
Parties shall be for the lowest fees offered to other customers of
similar services.
17.4. Each party shall fully cooperate with each other party hereto, and
any other person or entity involved in creating Interactive Services,
in providing format information useful in the production of
Interactive Services and in implementing any technical interfaces
necessary to enable display of Interactive Services on the System.
17.5. For any Interactive Services utilizing the System at a Hotel, the
Hyatt Parties and the Hotels shall be entitled to retain [***] and
GDG and MagiNet shall be entitled to retain [***] of Net Interactive
Services Revenues actually paid to one of the Parties and the Hotels
hereto ("Interactive Commission"). The precise methods by which such
payments are to be made, and the calculations of appropriate expenses
to be charged for soliciting and obtaining and developing Interactive
Services prior to any distribution to the other parties, shall be
determined by the Advisory Board.
17.6. The Parties agree to make and maintain complete books, records and
accounts regarding sales of and expenses relating to Interactive
Services. Each of the Hyatt Parties, GDG and MagiNet shall have the
right to examine such books, records and accounts during the other
party's normal business hours once annually to verify the reports on
Interactive Commission payments due. If any such examination
discloses a shortfall or overpayment, the appropriate party shall
promptly pay the amount of such shortfall or refund such overpayment.
17.7. "Net Interactive Services Revenues" shall mean all revenues or other
consideration received by any of the Parties and the Hotels from
interactive
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[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
August 22, 1995
services providers, hotel guests and others from the provision of
Interactive Services over the System, less allowable denials,
applicable unreimbursed tax payments, and any production costs,
development costs, marketing costs or other expenditures which have
been approved for reimbursement by the Advisory Board.
18. REPRESENTATIONS AND WARRANTIES OF HOTELS
----------------------------------------
18.1. Each Hotel shall represent and warrant as follows with MagiNet that
throughout the duration of its Individual Agreement:
18.1.1. The Hotel warrants and represents that it has full legal
power and authority to enter into the Individual Agreement
and to perform all of its obligations thereunder. The Hotel
shall further warrant and represent that all necessary
corporate action has been taken to authorize it to enter
into the Individual Agreement and perform its obligations
thereunder.
18.1.2. The Hotel will comply, and will ensure that performance of
its obligations under the Individual Agreement complies,
with all applicable laws, ordinances, rules, regulations,
orders, licenses, permits or other requirements now or
hereafter in effect, of any governmental authority. Without
limiting the generality of the foregoing, to the extent any
filing with, or any license, approval or other agreement of,
any applicable authority is required for performance of -any
of Hotel's obligations, Hotel will file the appropriate
documents and will maintain such documents on file, which
MagiNet may inspect upon demand.
19. REPRESENTATIONS AND WARRANTIES OF PARTIES
-----------------------------------------
19.1. Each of the Hyatt Parties, MagiNet and GDG represent and warrant to
each other party on a continuing basis that:
19.1.1. It has full legal power and authority to enter into this
Agreement and to perform all of its obligations hereunder
and all necessary corporate action has been taken to
authorize it to enter into this Agreement and perform its
obligations hereunder.
19.1.2. It will comply, and will ensure that performance of its
obligations hereunder complies, with all applicable laws,
ordinances, rules, regulations, orders, licenses, permits or
other requirements now or hereafter in effect, of any
governmental authority.
19.2. Each of MagiNet and GDG separately represents and warrants to the
Hyatt Parties on a continuing basis that:
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August 22, 1995
19.2.1. The GDG Technology was developed, and is owned or properly licensed,
exclusively by GDG, and will be owned or licensed exclusively by GDG
as long as the Master Agreement is in effect, except for licenses
granted to MagiNet and other licensees, or except as permitted under
Section 30.3. No person other than MagiNet, GDG or GDG's licensees or
GDG's licensers possesses any rights to any technology that has been
or would otherwise be considered GDG Technology, nor will have any
such rights as long as the Master Agreement is in effect.
19.2.2. The publication or dissemination over the System of Content other
than Hyatt Content which is supplied by MagiNet or GDG under this
Agreement will not infringe any copyright or other intellectual
property rights of any person and the Hyatt Parties will not be
obliged to pay as a result of the operation of the System under this
Agreement any license fees, royalties or other payments, nor will
Hotels be obligated to make such payments over and above the Rental
Fees payable by Hotels to MagiNet.
19.2.3. The value received under this Master Agreement is at least equivalent
to the best or better value provided to any similar customer under
similar terms and conditions.
19.2.4. The System and MATVs and all portions thereof shall be free of
material defects and operate in all material respects in conformance
with the Technical Requirements in Exhibit A.
19.2.5. MagiNet and/or GDG have full ownership or authority to provide all
hardware, software, transmissions and services contemplated by this
Agreement.
19.2.6. MagiNet has or can obtain all necessary licenses, government
approvals, and meet all other technical standards and legal
requirements in order to provide the hardware, software, transmissions
and services contemplated by this Agreement.
19.2.7. MagiNet and GDG have not and will not place any encumbrances on the
software and hardware being provided pursuant to this Agreement,
except in connection with an assignment permitted under Section 30.3.
19.2.8. MagiNet and GDG have full approval and support from their related
persons and entities so that MagiNet and GDG will obtain the full
cooperation of all necessary related parties and contracted third
parties to carry out the tasks contemplated in this Agreement.
19.2.9. There are no existing contracts to which either MagiNet or GDG,
-24-
August 22, 1995
or any party related thereto, is a party that will be in conflict with
this Agreement.
20. CONFIDENTIAL INFORMATION
------------------------
20.1. The Parties recognize that they may come into contact with sensitive
business and proprietary information regarding each other and third
parties. By reason of certain provisions in the Agreement, the
Parties are required to provide each other with access to such
information, including information regarding software operation and
Hotel customer information.
20.2. The Parties agree to take such steps as are reasonably necessary in
order to protect Confidential Information from disclosure. Such
actions shall include (1) providing the information to personnel on a
need-to-know basis, and (2) the retention of all non-public
information regarding software on machines and in a repository to
which the general public does not have access.
20.3. The Parties will make reasonable efforts to identify the categories
of information considered potentially confidential. The
identification of such information is not deemed to be an admission
by either party that such information is in fact confidential.
20.4. The Parties shall make a reasonable effort to identify all
confidential information by marking the information as
"Confidential." However, failure to mark information "Confidential"
shall not preclude any party from asserting that the information is
confidential. All confidential information of a party shall 'be
returned to it upon termination of this Agreement.
20.5. Breach of confidentiality obligations shall permit the other party to
seek relief in the first instance before any court of competent
jurisdiction for the further protection of such information. This
provision shall not affect the requirement that the Parties engage in
arbitration of any dispute, and any court action taken shall be
considered in aid of arbitration and shall terminate upon the
designation of an arbitrator who may change any ruling made by a
court in this connection.
20.6. All information pertaining to specific guests, groups of guests or
all guests who use Hotels shall be treated as confidential.
21. INDEMNIFICATION: GUARANTY
-------------------------
21.1. (a) MagiNet agrees, at its own expense, to defend or at its option to
settle, any claim, suit or proceeding brought against Hyatt Parties
or Hotels including all affiliated companies of the foregoing
entities and their respective officers, directors, employees and
agents, for infringement of any third party's copyright, patents, or
other Intellectual Property rights arising from Hyatt Parties' or
Hotels use of the System as permitted in this Agreement,, and to
indemnify the foregoing persons and entities against any court
awarded damages and costs (including reasonable attorneys' fees) for
such infringement. MagiNet shall be relieved of the foregoing
obligations unless Hyatt Parties or the applicable Hotel
-25-
August 22, 1995
notifies MagiNet promptly in writing of such claim, suit or proceeding and
gives MagiNet authority to proceed as contemplated herein, and, at
MagiNet's expense (except for the value of the time of Hyatt Parties or
Hotel employees), gives MagiNet proper and full information and reasonable
assistance to settle and/or defend any such claim, suite or proceeding.
MagiNet shall not be liable for any costs or expenses incurred without its
prior written authorization.
(b) In the event that the System is held, or in MagiNet's reasonable
opinion may be held, to constitute such an infringement, MagiNet at its
option and expense, may do one or more of the following: (i) obtain for
Hyatt Parties or Hotels, as applicable, the right to continue to use and
distribute the infringing material as contemplated herein, (ii) modify
such infringing material so that it becomes noninfringing, but without
materially altering the functionality of such material, and/or (iii)
replace the infringing material with functionally equivalent noninfringing
products.
(c) Notwithstanding the provisions of clauses (a) and (b) above, MagiNet
assumes no liability for infringement claims arising from. (i) Content not
developed by, MagiNet, (ii) the combination of the System with other
products not provided by MagiNet if such infringement would not have
occurred but for such combination, (iii) the modification of the System
unless such modification was made or authorized by MagiNet, when such
infringement would not have occurred but for such modifications, or (iv)
specifications, materials, products or Content provided solely by Hyatt
Parties, Hotels or GDG to MagiNet hereunder.
(d) The foregoing provisions of this Section 21.1 state the entire
liability and obligation of MagiNet and the exclusive remedy of Hyatt
Parties or Hotels with respect to any alleged or actual infringement of
patents, copyrights, trade secrets, or other Intellectual Property or
proprietary rights by the System.
21.2. (a) GDG agrees, at its own expense, to defend or at its option to settle,
any claim, suit or proceeding brought against Hyatt Parties or Hotels
including all affiliated companies of the foregoing entities and their
respective officers, directors employees and agents, for infringement of
any third party's copyright, patents or other Intellectual Property rights
arising from Hyatt Panics' or Hotels use of the GDG Technology as
permitted in this Agreement, and to indemnify the foregoing persons and
entities against any court awarded damages and costs (including reasonable
attorneys' fees) for such infringement. GDG shall be relieved of the
foregoing obligations unless Hyatt Parties or the applicable Hotel
notifies GDG promptly in writing of such claim, suit or proceeding and
gives GDG authority to proceed as contemplated herein, and, at GDG's
expense (except for the value of the time of Hyatt Parties or Hotel
employees), gives GDG proper and full information and reasonable
assistance to settle and/or defend any such claim, suit or proceeding. GDG
shall not be liable for any costs or expenses incurred without its prior
written authorization.
(b) In the event that any GDG Technology is held, or in GDG's reasonable
-26-
August 22, 1995
opinion may be held, ton constitute such an infringement, GDG, at its
option and expense, may do one or more of the following: (i) obtain
for Hyatt Parties or Hotels, as applicable, the right to continue to
use and distribute the infringing material as contemplated herein,
(ii) modify such infringing material so that it becomes non-
infringing, but without materially altering the functionality of such
material, and/or (iii) replace the infringing material with
functionally equivalent non-infringing products.
(c) Notwithstanding the provisions of clauses (a) and (b) above, GDG
assumes no liability for infringement claims arising from (i)
combination of the GDG Technology with other products not provided by
GDG if such infringement would not have occurred but for such
combination, or (ii) the modification of such GDG Technology unless
such modification was made or authorized by GDG, when such
infringement would not have occurred but for such modifications, or
(iii) specifications, materials or products provided solely by Hyatt
Parties, Hotels or MagiNet to GDG hereunder.
(d) The foregoing provisions of this Section 21.2 state the entire
liability and obligation of GDG and the exclusive remedy of Hyatt
Parties or Hotels with respect to any alleged or actual infringement
of patents, copyrights, trade secrets, or other Intellectual Property
or proprietary rights by the GDG Technology.
21.3. MagiNet Corporation, the sole shareholder of MagiNet, shall provide a
full and completely binding guarantee of MagiNet's performance
hereunder together with a formal representation and warranty letter
acceptable to the Hyatt Parties respecting its license rights to the
GDG Technology and related source code (collectively, the "MagiNet
Guarantee").
22. MARKETING AND PROMOTION.
-----------------------
22.1. Any marketing and promotion that occurs with respect to the System in
connection with the Hyatt Parties or the Hotels shall be first
approved by the Hyatt Parties or their designee.
22.2. No party is or shall act as the agent for any other party, and no
statement may be made that can be attributable to a party, or any of
its affiliated or related companies or entities, or any Hotel,
without first obtaining such entity's permission for the statement.
22.3. The Parties agree to cooperate with each other to promote the use of
the System.
-27-
August 22, 1995
22.4. Except as required by MagiNet and GDG licensing agreements with
others, nothing herein may be used by MagiNet and GDG to limit the
Hotels or the Hyatt Parties or any entity affiliated with the Hyatt
Parties in their promotion of any Content whatsoever, which promotion
shall be entirely within the Hyatt Parties and the Hotels' reasonable
discretion.
23. TRAINING AND CONSULTATION
-------------------------
23.1. MagiNet shall provide in each country at least one telephone number
that can be called to obtain immediate assistance on a twenty-four
(24) hour basis.
23.2. MagiNet shall designate at least one entity within each country that
shall be responsible for maintenance of the System, which maintenance
shall include periodic examinations (as advised by remote monitoring
procedures called for in Exhibit A) of the machines used to ensure
that they are all in proper working condition.
2 3.3 To enable each Hotel to generate suitable promotional material
related to the use of the System and to enable personnel of each
Hotel to advise and encourage guests regarding their use of the
System, MagiNet will provide a one-time training course on the use
and operation of the System for as many employees as each Hotel deems
desirable at no charge. GDG and MagiNet shall also, at no charge,
train up to ten (10) individuals from the Hyatt Parties once per year
in the use and operation of the System, and one person with each of
the Hyatt Parties in the use of the off-site monitoring technology
for the System. Such training shall take place within sixty (60) days
of the first installation done under this Agreement.
23.4. Hotels will provide accommodations for MagiNet training personnel at
the best rate offered to any customer, and shall offer discounted or
complimentary rooms if consistent with their policies. In addition,
MagiNet and GDG personnel will be reasonably available at no charge
for telephone consultation to personnel of Hotels to provide further
assistance regarding use and operation of the Systems.
24. ACCOMMODATIONS
--------------
24.1. Each Hotel shall agree to provide to visiting MagiNet and GDG
employees present for Hotel business during the term of the
Individual Agreement accommodations at the best rate offered to any
customer and shall offer discounted or complimentary rooms if
consistent with their policies.
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August 22, 1995
25. PIRACY PROTECTION
-----------------
25.1. Each Hotel shall be required insofar as is commercially reasonable to
notify MagiNet of any video recording and/or playback devices that
are provided by the Hotel to its guests.
26. SUSPENSION AND DEFAULT
----------------------
26.1. It shall be an event of default if (a) any-party or designated party
acting on their behalf (i) breaches performance of any material term,
condition, representation or warranty contained in this Agreement or
any Individual Agreement and/or any Related Hyatt Agreement, and
fails to cure, correct or remedy such breach or default within sixty
(60) days after receipt of a written notice thereof, (ii) is
adjudicated bankrupt or petitions for relief under any bankruptcy,
reorganization receivership, liquidation, compromise arrangement or
moratorium statute, (iii) makes an assignment for the benefit of its
creditors, or (iv) petitions for the appointment of a receiver,
liquidator, trustee or custodian for all or part of its assets; (b)
all or any portion of the MagiNet Guarantees are revoked or
terminated or otherwise fail to be of continuing force and effect; or
(c) if MagiNet Corporation is adjudicated bankrupt or petitions for
relief from or makes an assignment in favor of its creditors.
26.2. Some portion or all of this Agreement may be suspended by any entity
signatory to or bound by this Agreement that is a part of the Hyatt
Parties upon sending written notice of the destruction or renovation
of Hotels, or the occurrence of any force majeure events as set forth
in section 27. Any Individual Agreement may be suspended or
terminated in part or in whole, at the Hyatt Parties' or each Hotel's
sole option, due to any closure of any, portion of the Hotel(s)
involved, temporary cessation of business, termination of any other
agreement between the Hotel(s) and the Hyatt Parties, and any force
majeure events set forth in section 27 below. For any suspension that
extends beyond ninety (90) days, MagiNet may, at its option, remove
the System until the cause of the suspension is resolved.
26.3. If any of the events of default set out in section 26.1 above occur,
the harmed party not in default may exercise any or all of the
following remedies: (i) cancel and/or terminate any and all
Individual Agreements, (ii) cancel and/or terminate the Master
Agreement, (iii) undertake either steps (i) and/or (ii) while
retaining the System in place (subject to continuance of all other
material terms and conditions herein and until a replacement vendor
can be selected in an orderly transition to that vendor's
technology), (iv) obtain injunctive and other equitable
-29-
August 22, 1995
relief, and (v) obtain such damages and other rights and remedies as
the party not in default may have at law, provided that this
-------------
provision shall not allow MagiNet or GDG to exercise such remedies
against the Hyatt Parties or the Hotels in the event of a default by
either MagiNet or GDG. The remaining nonbreaching Parties shall
negotiate in good faith to determine how to proceed absent the
terminated party.
27. FORCE MAJEURE
-------------
27.1. Where a party is unable, wholly or in part, by reason of Force
Majeure, to carry out any obligations under this Agreement and that
party: (i) gives the affected party prompt notice of that Force
Majeure with reasonably full particulars and, insofar as known, the
probable extent to which it will be unable to perform or be delayed
in performing that obligation; and (ii) uses all reasonable efforts
to remove that Force Majeure as quickly as possible; then that
obligation is suspended insofar as it is affected by the continuance
of that Force Majeure provided that this section will not operate to
relieve any party of an obligation to pay money.
27.2. For the purposes of this Agreement, "Force Majeure" means: (i) an act
of God, strike, lockout or other interference, (ii) war declared or
undeclared, blockade, disturbance, lightning, fire, earthquake,
storm, flood, or explosion, (iii) governmental or quasi-governmental
restraint, expropriation, prohibition, intervention, direction or
embargo (iv) unavailability or delay in availability of equipment or
transport not due to any action or inaction on behalf of the affected
party,) (v) unavailability or delay in obtaining governmental or
quasigovernmental approvals, consents, permits, licenses, authorities
or allocations and (vi) any other cause whether of the kind
specifically enumerated in this section or otherwise which is not
reasonably within the control of the party affected; and "all
reasonable efforts" does not require the settlement of strikes,
lockouts or other labor disputes, or claims or demands by any
government or quasi-government authority on terms contrary to the
reasonable business judgment of the party affected.
27.3. In the event any Force Majeure prevents performance under this
Agreement by either party which continues in existence for more than
thirty (30) days, the Parties will meet in good faith to discuss the
situation and to make all reasonable efforts to achieve a mutually
satisfactory resolution of the problem so that Force Majeure no
longer prevents performance under this Agreement, provided that the
Hyatt Parties shall have the option to terminate any Individual
Agreement for any Force Majeure event that lasts longer than one
hundred and eighty (180) days, and to terminate the Master Agreement
if such extended Force Majeure prevents performance at more than 25%
of the Hotels.
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August 22, 1995
27.4. In the event performance by any Hotel is prevented due to Force
Majeure for a period of one hundred and twenty (120) days or more
during any twelve (12) month period, MagiNet will be entitled to
remove the System from such Hotel until performance is no longer
prevented by Force Majeure, or earlier as permitted under Section
26.2.
28. DISPUTES
--------
28.1. The Parties hereby agree that any and all disputes arising under or
in any way connected or related to this Agreement, and any subject
matters covered by this Agreement, including the Intellectual
Property, shall be finally adjudicated and resolved through final and
binding arbitration.
28.2. The Packs shall provide each other with written notice of any dispute
that arises and is deemed to be one that one or more Parties wishes
to have resolved through arbitration.
28.3. The Packs shall wait for fifteen days subsequent to receipt of notice
to take any action, during which time the Parties shall meet together
in an effort to resolve the dispute.
28.4. Should no resolution be achieved within the fifteen day waiting
period, then either party may submit the matter to the American
Arbitration Association ("AAA") for arbitration in accordance with
the rules of commercial arbitration then in effect.
28.5. The arbitration shall be tried in Chicago, Illinois, before a panel
of three arbitrators, who shall be selected in accordance with the
AAA Commercial Rules if not picked by agreement of the Parties within
the fifteen days discussed above.
28.6. The arbitrators shall first decide if there exists a bona fide
dispute between the parties capable of resolution in arbitration.
28.7. Interim court relief may be sought at any time by any party, and any
request for interim relief shall not be considered a bar to
arbitration, nor limit the power of the arbitrator to change any
interim relief awarded during the course of the arbitration.
29. RECOGNITION OF AGENCY.
----------------------
29.1. MagiNet and GDG recognize that the Hyatt Parties act as agents for
the owners of the Hotels, and that any action that is to be
undertaken by the Hyatt Parties is one that is on behalf of such
owners. MagiNet and GDG recognize and agree that the Hyatt Parties'
actions with respect to any Hotel are therefore only as agent for
such owners.
-31-
August 22, 1995
30. GENERAL TERMS
-------------
30.1. No person has, or as a result of the transactions contemplated hereby
will have, any right or valid claim against any of the Parties or the
System for any commission, fee or other compensation as a finder or
broker, or in any similar capacity, relating to the transactions
contemplated herein.
30.2. This Agreement will be governed by the laws of the State of
California without reference to its conflict of law principles. Each
Individual Agreement shall also be governed by the laws of the State
of California except to the extent that the laws of the country in
which the Hotel is located override such governing law provision.
30.3. Except as otherwise set forth herein, the provisions hereof will be
binding upon, and will inure to the benefit of, the respective
successors and assigns of the parties hereto. Each of the Hyatt
Parties shall have the right to assign this agreement to any of its
affiliates, subsidiaries or a parent company. MagiNet shall have the
right to assign this Agreement and any Individual Agreement to a bank
or other financial institution as collateral for a loan (provided
that such institutions agree to abide by the terms of this Agreement
and the Individual Agreements) and to assign this Agreement and any
Individual Agreement to an entity acquiring all or substantially all
of MagiNet's assets or voting securities. Notwithstanding any such
assignment by MagiNet, none of MagiNet's property installed in a
Hotel shall be removed therefrom prior to the Hyatt Parties' or
Hotel's uncured default or termination of this Agreement or the
Individual Agreement. GDG may assign this Agreement to an entity
acquiring all or substantially all of its assets or voting
securities.
30.4. This Agreement may be modified or amended only by a written agreement
signed by all Parties. No waiver by any party of any breach or
default hereunder will be construed as a waiver of any precedent or
subsequent breach or default.
30.5. This Agreement sets forth the entire agreement and understanding of
the Parties relating to the subject matter hereof, and merges and
supersedes all prior discussions and understanding between the
Parties related thereto, whether written or oral.
30.6. In the event that better value for the Activities contemplated herein
are offered by MagiNet or GDG to any similar hotel chain or hotel as
the Hyatt Parties and the Hotels, the Hyatt Parties and the Hotels
will be offered all the same terms and condition:; and any less
favorable payments made or receipts obtained subsequent to their,
being contracted with another customer but prior to the effective
date of the change in the terms in this Master Agreement and the
Individual Agreements shall be reimbursed to or for the Hyatt Parties
and the
-32-
August 22, 1995
Hotels. For purposes of this paragraph "value" shall mean the value of (i)
all fees, allowances and commissions, (ii) A equipment, OH) all software,
software licenses and/or other Intellectual Property rights, (iv) 'all
services including installation, maintenance, repair and replacement and
(v) all cost savings or other benefits provided to the Hotels, their parent
companies or affiliates.
IN WITNESS WHEREOF, this Agreement is entered into by the Parties hereto this
15th day of September 1995.
MAGINET INTERNATIONAL CORP. HYATT INTERNATIONAL-ASIA
PACIFIC LIMITED
By: /s/ R. R. Craeger By: /s/ Authorized signature
Title: President Director
GUESTSERVE DEVELOPMENT HYATT CHAIN SERVICES LIMITED
GROUP
By: /s/ Philip S. Knudsen By: /s/ unreadable
Title: CFO/Director Title: DIRECTOR
-33-
August 22, 1995
EXHIBIT A
TECHNICAL REQUIREMENT
---------------------
-34-
Exhibit "A" - Technical Requirements
This exhibit describes the technical requirements for the hardware, software,
Content, and services to be provided under this Agreement.
1.0 MINIMUM QUALITY & PERFORMANCE STANDARDS
---------------------------------------
At installation, the System, WTV and televisions will meet the following
standards.
1.1 VIDEO QUALITY
Video images transmitted and displayed across the System, MATV, and a good
quality brand new twenty-five inch (25") television set(provided by the hotel
for quality testing) must be observed to be as good as the same images when the
image source is directly connected to the television set. The video image
source for quality tests shall be a full action, color movie on a new, unused
VHS tape provided by a major recording studio played back on a brand new VHS
tape player connected directly to the television with A/V connectors.
When compared to the same movie provided as part of the Content across the
System, MATV, and television set, there shall be no noticeable degradation in
resolution, discoloration, focus, or brightness, nor multiple Wages (ghosting),
artifacting, or other negative differences in image quality.
1.2 AUDIO QUALITY
Audio must meet the same quality and testing standard as for video images
described above, and must be clear, undistorted, and in perfect synchrony with
the video image. In addition, audio quality shall meet or exceed the following
standards:
1. Audio Signal Level-8dBmV
2. Output Impedance 600 ohm
3 Signal to Noise Ratio (weighted in SP Mode), more than 38 dB.
4. Wow and Flutter (audio on VHS in SP mode), less than 0.2 WRMS
5. Frequency Response (Ref to I Khz SP mode), 100 Hz - 15000 Hz (10 dB down)
6. Interactive programming shall be accompanied by CD quality audio and/or by
digitally synthesized voice software. Digitized voice is required to be 8
bit technology or greater to conform to highest standard prevailing at time
of installation. Audio Frequency range is required to be at least I 00 to
15000 Hz, without perceivable distortion at normal listening levels (less
than 1% THD).
Page 1 of 25
Exhibit A Technical Requirements.
1.3 RESPONSE MINIMUM REQUIREMENTS
1. The maximum delay permitted between the guest executing a keystroke on the
remote control, and the System, MATV and television responding, shall be
five (5) seconds for Movies or Hotel Services, unless response time is
influenced by input from 3rd party interfaces.
2. The System, MATV, and televisions must allow simultaneous access by at
least 1.5% of available rooms at any time, and the minimum number of
interactive ports shall be 4.
3. At all times, all guests shall have access to the System, MATV, and
televisions within 60 seconds of selecting or interacting with any Content.
Guests denied immediate access shall be notified of the delay by a screen
message.
4. Response delays caused by equipment or Content not under the control of
Maginet and GDG lasting longer than five(5) seconds, will trigger an
appropriate intermediate screen message. It must be possible to place
text, graphics and sound on intermediate screens for notification purposes
or for advertising.
5 . The delay between a guest pressing the final key to make a video on demand
selection and the feature appearing on the screen shall not exceed 10
seconds.
6. The System, MATV, and televisions shall have imperceptible delays in
response to video game control devices controlling interactive video game
Content.
1.4 RELIABILITY
Equipment supplied under the Agreement shall have a mean time between failure of
not less than three (3) years.
1.5 MANUALS AND DOCUMENTATION
Manuals and Documentation supplied to each distributor at initial installation
shall consist of at minimum:
1. Manufacturers product documentation and written performance specifications
for each piece of equipment supplied under the Agreement.
2. Operating and Repair manuals for each component of the System, including
both hardware and software.
3. Trouble-shooting diagnostic programs and guides for each component of the
System, including both hardware and software.
Page 2 of 25
Exhibit "A" Technical Requirements
4. A simple user manual describing the integrated operation of the System in
easily understood terms (the System Manual), will be provided for each
hotel.
5. A Tool Kit manual describing the operation of the Tool Kit will be provided
to designated Hyatt Parties.
6. A detailed interface protocol manual and source code examples of interfaces
already developed for the System. Interface protocols for both connections
to external systems, and interface protocols for intra-System connections
-------- ------------------------
(interactive controls) must be provided, to designated Hyatt Parties.
1.6 SYSTEM HARDWARE REQUIREMENTS
The System hardware at initial installation shall include at minimum the
following:
1. A Pentium 90 Mhz Interactive server with 32 MB RAM and I GB hard drive
shall be the minimum platform for the interactive server.
2. External magnetic storage and/or CDi and/or CD ROM or other system as
required to deliver Content.
3. A high speed modern connection to the System for remote diagnostic testing,
downloading of Content, etc.
4. A PC work station suitable for operation of the Graphics generator for the
exclusive use of the Hotel to update hotel related Content for use on the
System.
5. The above work station have a printer, and be connected to the System and
located at the Hotel's direction for the creation and printing of guest
charges for use of System Content in the event of failure of the PMS or
interfaces to the PMS.
6. Two-way communication protocol via MATV between Guest room Terminal and
interactive file server.
7. In room terminal, with standardized remote control and channel numbering
plan.
8. VHS tape players as required operating within the following performance
specifications:
a. Luminance Level: 1.0 +/- 30% Vp-p for machine to machine operation at
75ohm terminated composite video of 140 IRE units source
Paged 3 of 25
Exhibit "A" Technical Requirements
b. Chrominance Level: 0.63 +/- 30% Vp-p for machine to machine operation
at 75ohm terminated composite video of 1.40 IRE units source
c. Horizontal resolution: More than 360 lines, or as required for
prevailing TV standards
d. Frequency Response 2 Mhz - 10 dB;
e. Signal to Noise Ratio (weighted) more than 43 dB in SP mode, more
than 41 dB in other modes, using Luminance by Rohde & Schwartz noise
meter
f. Tape transport Speed: SP mode 33.35 mm/s +/-0.5%
g. Rewind Speed: SP mode for 120 minute tape less than 7 min.
h. Tape load Speed: Less than 5 seconds
9. All other equipment as required to make up the complete System.
1.7 SYSTEM SOFTWARE REQUIREMENTS
The System software at initial installation shall include at minimum the
following:
1. A "Toolkit" consisting of GDG's software which when combined with
commercially available software applications operating in a windows
environment, and packaged with a set of instructions, appropriate
interfaces, help screens and telephone support. will be all that is
required for the Hyatt Parties, Hotels, and authorized third parties to
develop content from multimedia sources, and set up interactive sequences
for use on the system for generating revenue or obtaining information.
A sub-section of the Toolkit, called Graphics Generator shall be a desk
top broadcasting application, offering similar features and graphics
capability as a product called Catview. The application shall be provided
to hotels not using the full Toolkit to enable them to make minor
modifications to interactive programming, and to produce basic hotel
information screens that have similar text and graphics as the
interactive screens.
2. Interactive Component
This software shall enable guests to call up different screens from a
selection of screen options so that an interactive program results. This
interactive application and necessary programming will form the basis for
making video on demand selections accessing hotel services, shopping,
advertising, games and her revenue generating services defined within the
exhibit.
3. Appropriate communications software to support item 1.6.3.
Page 4 of 25
Exhibit "A" Technical Requirements
4. A statistical information application sufficient to capture, manipulate,
and report on the following System usage and performance data.
a. Number of guests denied access to selected movies, including room
number, date, time, and the duration of the denial.
b. Number of guests denied access to Hotel Services, Hyatt Interactive
Content, or Interactive Content, including the room number, date,
time, and duration of the denial.
C. Room numbers where video on demand features were viewed, and the time
and duration of viewing session.
d. Room numbers of those rooms accessing the interactive guest services,
the time they spent browsing, and details of all selections made on
the system,
e. Exception reports, the content of which is to be developed; including
records of when the system was down, when dial up connections were
made, their duration and a list of individual rooms that were out of
order.
f. Guest survey results.
g. Viewing ratings of interactive content for marketing analysis
purposes by Hyatt and authorized parties using the system for such
purposes. The detailed requirements of these rating reports are to be
developed, but they shall include the number of guests viewing of
each interactive content package, the time each viewer browsed, and
any sales made as a result.
1.8 MATV REQUIREMENTS
The MATV in each existing Hotel or Hotel currently under construction and where
MATV has already been installed as of date of master agreement, shall be
upgraded to meet or exceed the following specifications. MATV systems will be
provided by the Hotel to meet the following specifications in all new Hotels (as
listed in Exhibit C). All equipment shall meet type and safety approvals and
radiation requirements. as required in each country. All installations shall be
made according to national and local electrical codes. Standard for -signal
strength measurement shall be a calibrated field strength meter.
The MATV shall be capable of concurrently carrying all Content over the MATV
network, and at minimum will meet the following channel capacities and broadcast
standards.
a. A minimum of 77 channels for NTSC and 60 channels for PAL/SECAM.
b. Operation in compliance with local broadcast standards (NTSC, PAL or
SECAM) and/or as required for the installed TV sets.
Page 5 of 25
Exhibit "A" Technical Requirements
1.8.1 MATV REQUIREMENTS - HEAD-END
The MATV head-end shall meet or exceed the following specifications:
a. Single channel processors with AGC and aural carrier reduction will be
used to process each off-air signal. Pre-amplifiers will be used, where
necessary, to achieve an input carrier level of sufficient amplitude to
be within the range of the AGC in the channel processor.
i. The output of individual strip amplifiers, modulators, or channel
processors will be combined using a methodology which will provide a
minimum of twenty (20) dB isolation between individual carriers.
ii. Items providing less than twenty five (25) dB of isolation will not be
used in the head-end environment to combine signals,
b. A Broadband Amplifier having a band width of 5-550 MHZ, or greater, and
equipped with SubSplit Return will be used to amplify the combined
output. The amplifier will be designed for two-way compatibility using
sub-split return. The forward direction designed for 54 to 550 MHZ or
greater and the return designed for 5 to 30 MHZ. The forward direction is
to include both gain and tilt controls.
c. UHF to VHF converters and VHF to VHF converters will be completely solid-
state with a self-contained power supply. Input and output impedance
shall be 75ohms. The frequency of the output will be crystal controlled
and will be within + .005% of the desired output frequency for both
-
components.
d. All passive equipment shall not have less than 2OdB port-to-port
isolation and shall be capable of operating in a band width of 5-550 Mhz.
e. Antennas will be selected and installed so as to produce the best picture
obtainable. Any local government permits required for antenna
installation will be obtained prior to actual installations of the
antennas. Antennas and masts will be constructed and installed so as to
withstand 100 mph winds. All Antennas used will have an adapted impedance
of 75 ohms and weather boots will be used to protect all outdoor antenna
connections.
f. When antennas are providing the signal source for "off-the-air" channels.
Picture quality will be equal to or better than the picture quality
available from local cable TV sources, as appropriate or applicable. At
minimum, local VHF and UHF channels required by each hotel will be
available from the MATV. UHF channels must be converted to VHF. Closed
caption service at the TV must be provided for each of the three
principal network channels, given programming availability as provided by
network sources.
Page 6 of 25
Exhibit "A" Technical Requirements
g. Metal Cabinets designed for 19" rack mounted equipment will be used to
enclose the head-end active equipment. Suitable AC power outlets be
installed in the cabinet for the equipment powering, including two
additional outlets for maintenance equipment.
h. Pads, cable and other miscellaneous equipment will be supplied and
installed to make an operating head-end that meets all of the
specifications as outlined. All cable used in the head-end equipment rack
will be of Tri or Quad Shield design and will provide a minimum of 100
percent shielding from radiation and signal ingress or such other cable
as to meet MATV standards of performance established herein.
i. Maximum output after combining shall not exceed:
i. 45dB Maximum highest frequency
ii. 40dB Minimum lowest frequency
iii. 6dB maximum amplifier tilt.
j. Cross modulation shall be less than minus 60dB.
k. Visual carrier to spurious signal response shall be greater than 50 db.
Cross modulation shall be greater than 51 db.
l. Visual/aural carrier ratio on any channel will be 15 dBmV to 17 dBmV
m. Carrier to noise shall be no less than 41db, 43dB optimum.
n. Visual carrier levels shall differ by no more than 12dB through the band
width (50-550 MHz).
o. Visual carrier level stability shall vary no more than 10dB over any 24
hour period.
p. Hum modulation shall be less than 2%.
q. Second Order (spurious beats) shall be 50dB below the visual carrier.
r. Frequency response shall be N/10+1.
s. Adjacent channel visual carrier shall differ by no more than 3 dB.
t. Amplitude response within any single TV channel (visual carrier to aural
carrier) will be flat (+/-2Bb)
Page 7 of 25
Exhibit "A" Technical Requirements
1.8.2 MATV REQUIREMENTS- CABLE PLANT
The cable plant shall meet or exceed the following specifications:
a. Frequency Response of the system (excluding amplifiers) will pass 5 Mhz
to 550 Mhz. Amplitude response Or this spectrum will be + 4 dB with
-
respect to the line represented by normal cable tilt. The system will be
designed as two-way capable, i.e. sub-split return.
b. Visual Carrier Level in each room will be no less than 2 dBmV on any
single channel of the system.
i. The maximum allowable variance between any two adjacent channels will
be 2 dBmV.
ii. The maximum allowable variance between any two non- adjacent channels
will be 12 dBmV at 550 Mhz or 3 dB per 100 Mhz of band width.
c. Room to Room isolation will be greater than 20 dB. isolation values of
all devices separating any two given rooms will be used for the purpose
of this calculation, as well as the structural return loss of all
interconnecting cabling.
d. Visual carrier-to-noise ratio on any channel (3 MHz bandwidth) will be at
least 42 dB at any TV outlet for broadcast signal source of carrier to
noise ration better than 56 dB.
e. The visual carrier to coherent noise ratio (inter-modulation) will be
greater than 46 dB, for the same signal source as in d.
f. Reflections ingressing MATV distribution system, which may cause ghosts
and shadows within the system, will be more than 40 dB below the
respective picture carrier.
g. Taps, splitters, and other passive equipment will be of the totally
shielded type, using a sealed metal or aluminum case, so as to minimize
radiation and ingress. All connections will be "F" for NTSC, or EEC for
PAL type connectors.
i. Taps used will be designed to pass 5 MHz to 550 MHz, or greater.
ii: Splitters will be designed to pass 5 MHz to 550 MHz, or greater.
iii. Where the last tap on the riser is not a terminated tap, 75 ohm
terminations will be used to terminate the end of all riser lines
at the through port output.
h. Coaxial cable shall be of 75 ohm impedance with a return loss of 20 dB
minimum from 5mhZ to 550 MHz. Cable construction will be solid copper or
copper-clad steel center conductor and cellular polyethylene dielectric.
Cables will be provided with two shields. The first shield shall consist
of .002 inch double aluminum coated mylar or polypropylene tape with 1/8"
overlap,, bonded to the dielectric. The second shield shall be a minimum
of 60% coverage braid consisting of 34 AWG aluminum or tinned copper
wire. The jacket shall be non-contaminating low temperature polyvinyl
chloride cable having an effective shielding of 67% or greater will be
utilized outside of all conduits.
Page 8 of 25
Exhibit "A" Technical Requirements
i. Cable sizes used in the system can be either RG-6 or RG-11. The RG-11
size is used for longer trunk lines and the RG-6 size is used for shorter
feeder lines. Where conservation amplifiers will have their maximum full
gain derated by a minimum of three dB. Further doubling of the cascade
will result in additional gain reductions of three dB, each time the
cascade is doubled.
j. Cross modulation shall not exceed minus 57dB from any distribution
amplifier with 77 channel loading.
k. All new distribution feeder cable shall be .500 or RG- 11 cable only.
l. No distribution (feeder) line shall feed in excess 550 television sets,
or per limitations imposed on the system by segmentation.
m. All distribution (feeder) lines shall begin at the head-end and end at a
central distribution location. No riser can be fed by a distribution
line.
n. All risers must originate at a central distribution location. If risers
must be extended, RG-56 cable with 90% shielding will be used from the
splice to the central distribution location.
o. All risers shall be identified to the rooms they feed.
p. All jumper cables from the wall plates to the televisions shall be
replaced as necessary with RG-6 or RG-59 foam cable, with ferrule type
connectors.
q. Sub-band return loss shall not exceed 40dB
1.8.3 MATV REQUIREMENTS - IN ROOM TAPS
a. For in room directional tap outlets, all signal levels shall be 5-15dB
(and typically at 5dB) from 40 to 550 MHz.
b. Cross modulation shall be less than minus 57dB.
C. Carrier to noise shall be 41 dB.
d. Adjacent channel visual carrier levels shall differ by no more than 3dB.
e. Visual carrier levels shall differ by no more than 12dB through the
bandwidth (50-550 MHz).
f. Visual carrier level stability shall vary no more than 10dB in any 24
hour period.
Page 9 of 25
Exhibit "A" Technical Requirements
1.9 TELEVISION REQUIREMENTS
New Hotels (as listed in Exhibit B) will provide television sets meeting the
following specifications. Maginet and GDG will make best efforts to ensure that
the System, MATV, and television sets in existing Hotels or Hotels currently
under construction operate as though the television sets met these
specifications. Maginet and GDG will provide all required remote controls for
all Hotels.
a. 20 to 27 inch screens, at Hyatt's option.
b. "Smart Plug" compatibility to accommodate the requirements of the
interactive system
c. Closed caption capable
d. Stereo sound
e. Channel labeling
f. Sleep timer
g. Clone programming
h. Non-volatile memory
i. 100+ channel capacity
j. Remote interface connector
k. TV's will be capable of no fewer than 400 scan lines of resolution.
l. Teletext compatible
m. Multisystem where required or appropriate
n. All television sets will be provided with full function infra red remote
controls with the following minimum functions
1. Power on/off button
2. Pay TV button
3. Free TV button
4. Hotel Services & Information button
5. Interactive services button
6. Channel up and channel down buttons
Page 10 of 25
Exhibit "A" Technical Requirements
7. Volume up and down buttons
8. Mute button
9. Numeric Channel control keyboard
1.10 SPACE REQUIREMENTS
Maginet, GDG, the Hotels, and the Hyatt parties shall work together to
coordinate the space requirements for installations in each Hotel prior to
beginning installation work in each hotel. Each Hotel shall provide the agreed
upon space requirements.
Each Hotel shall provide at minimum, sufficient space to house the equipment and
accommodate a minimum of two people in an appropriate working environment (the
"control room"). Typical space requirements will include the following:
a. One(1), line conditioned, dedicated, 30 amp AC circuit with provisions
for 6 duplex outlets (as determined by the computer rack locations).
b. Two standard 30 amp, AC circuits with provisions for 3 duplex outlets (as
determined by the work counter location).
c. The space shall have sufficient air conditioning to maintain a constant
temperature of between 68 degrees and 72 degrees fahrenheit at 40%
relative humidity.
d. The control room shall have sufficient telephone fines (both outside
direct and in-house) and telephone instruments.
e. Cable paths (ie: conduit, plenum, etc.) shall be provided from:
i. the control room to the head-end.
ii. the control room to the PMS.
iii. the control room to the PBX.
iv. the control room to the front desk.
v. if additional services are supplied, needed path must be
provided, ie: food & beverage.
Page 11 of 25
Exhibit "A" Technical Requirements
2.0 CONTENT
-------
At installation, the Content will meet the following standards.
2.1 LANGUAGES
Maginet and DG shall provide Movie instructions/access, Hotel Services, and
Hyatt Interactive Content in at minimum the three(3) languages listed on Exhibit
"C" for each Hotel installation. Language requirements must be confirmed by the
hotel before final installation. All language options shall be ready for the
first installation requiring that language according to the installation dates
listed in Exhibit "C".
A guest's preferred language will be selected from a list of the available
options in the hotel property management system (PMS). Language choice will be
set by the front office clerk when a guest checks in, so that Hotel Services,
Hyatt Interactive Content and Movie selections will appear on the TV in the
guest's preferred language. On check-out, the default language shall be re-set
automatically to the default language selected by the Hotel.
2.2 FREE-TO-GUEST CONTENT
The System, MATV, and televisions shall deliver up to Twenty (20) free-to-guest
channels at the Hotels option, to include any combination of the sources fisted
below. Free-to-guest channel sources shall be selected and approved by the
Hotel at Hotel's expense from provider of choice, prior to final installation.
Free to guest programming shall be available at all public area and back of
house MATV points throughout the hotel. GDG and Maginet shall make best efforts
to optimize signals from free-to-guest sources, and program them according to
the standard channel numbering sequence. These sources and their processing
equipment will by provided by Hotel or Hotel's third party contractor.
Free-to-guest Sources
a. Satellite programming
b. Local Broadcast TV
c. Local Cable TV
d. In house Video programs
e. Guest-room background Music
Access free-to-guest channels must be possible using the remote control and on
screen menus. Channel numbering shall be standardized to the extent that is
practical throughout all of the Hotels.
Free to guest programming shall include wherever possible, CNN and other
international news and sport satellite and cable programming and a
representative selection of local broadcast TV.
In house video sources include VHS playback, live camera inputs, and desk top
broadcast programming
Page 12 of 25
Exhibit "A" Technical Requirements
2.3 MOVIES
1. Quantity
The minimum number of movie selections simultaneously available from the System
at installation shall be as shown in the table below.
Number of Guest- Video on Demand Scheduled Movies
rooms Movies
less than 250 24 3
250 to 550 36 3
Over 551 Additional 12 for 3
each 250 rooms
2. Quality
Minimum requirements for movie programming to be provided by Maginet at each
hotel shall be defined by the following criteria:
a. Number of copies of each title and title selections shall be established
by Maginet based on the latest movie title release window provided by the
studios for the given regions. Hyatt International and the hotels will
review these selections for quality assurance purposes. The frequency of
such reviews shall be at quarterly intervals during the first year of
operation, and as required after that. The objective will be to maximize
revenue, maintain programming and system delivery quality standards and
keep up with the competition.
b. Maginet shall update titles such that at least four (4) "blockbuster"
selections arc available in every hotel. A blockbuster title is
considered to be a movie that is released within the same theatrical
release window or that immediately following those movies shown on the
major international airlines. Where the above criteria cannot be met
because of censorship, or limitations imposed by the recording studios,
each hotel must have at least four (4) of the latest release titles that
are available in that country at competing international hotels,
irrespective of which system they are using.
c. Other video program content shall be such that it remains generally
equivalent to those titles offered by competing hotels, regardless of
their supplier, providing their programming is legal. Foreign language
and ethnic programming are also required, where it is offered by
competing hotels and/or where it can increase the revenue generating
potential of the system.
Page 13 of 25
Exhibit "A" Technical Requirements
2.4 HOTEL AND HYATT INTERACTIVE CONTENT
MagiNet and GDG shall develop and produce a standard if Hyatt User Interface
package for use by each Hotel as the basis for the Hotel Services Content
delivery in the Hotel. Each Hotel will be responsible For the development and
production of hotel specific elements of the Hyatt User Interface, and Maginet
and GDG will be responsible Or the coordination and incorporation of these hotel
specific elements into the Hyatt User Interface. Hotel Services Content at
initial installation shall include at minimum:
a. Guest Folio Review & Video Check-out
b. Guest-room compendium / hotel services directory minimum twenty screens
and/or images each.
c. Worldwide Hyatt Hotels Video Directory with capacity for at least five
interactive screens or images per property, callback prompt, and
reservations office notification.
d. Room Service Menu Ordering.
e. Food & Beverage outlet menu review.
f. Message Center Display (Notification on voice mail and display message
information on PMS).
g. Guest Welcome channel.
h. Interactive Guest Survey report format and delivery to appropriate
application interface and/or printer.
i. Interactive event information screens for groups, tours, meetings., etc.
j. Airline departure and arrival information for those airport hotel
locations identified in exhibit "C", where such database information is
available and provided by the hotel.
k. Standard formats and interactive tree/branches structures ready for
interactive content input.
Hyatt parties will be responsible for the development and production expense of
Hyatt Parties Content.
Page 14 of 25
Exhibit "A" Technical Requirements
2.5 INTERACTIVE PRODUCTS AND SERVICES FOR THIRD PARTY USE
MagiNet and GDG shall develop and produce a standard interface package for use
on the System as the basis for the Interactive Services delivery in the Hotels.
The standard interface package shall be available at initial system
installation, and shall include standard means for authorized parties to
interact with the guest and the System in one or more of the following ways:
a. Receive notification from a guest requiring callback
b. Disseminate or collect information
c. Post charges for goods and services delivered
Interactive applications that must be supported by the system include Shopping,
Video Games, Advertising
2.6 INTERFACES
Maginet and GDG shall develop and implement interfaces between the System and
the following Hyatt systems.
SYSTEM REQUIRED FUNCTIONALITY PRODUCTS
Property --Guest Preferred Language Fidelio, Maxial,
Management --Guest Folio Review/Check-out and CLS
System --Bill posting for movies and interactive
services
--Message Center screen, including information,
hard copy messages, voice and fax notification
--Other service required within PMS capabilities
Point of Sale --Room Service menu selection and bill Micros, Maxial,
System posting CLS and Squirrel
Voice Mail --On screen voice mail message waiting TMS VoiceLink,
System indication Nortel HVS
Maginet and GDG are not responsible for limitations that result from
deficiencies in other systems but shall make their best efforts to minimize the
impact of such deficiencies.
Page 15 of 25
Exhibit "A" Technical Requirements
3.0 OPERATING AND MAINTENANCE PERFORMANCE STANDARDS
-----------------------------------------------
The services specified below shall be provided as required:
3.1 INSTALLATION SERVICES
Maginet and GDG are required to design and supply and Maginet is required to
install and set up the complete system as described in this agreement as
required for the hotel without cost to the hotel . These services are to
include, as needed, upgrade to existing MATV system, and cabling where it
effects system segmentation.
3.2 ON LINE SERVICES
This network is required for, but not limited to, monitoring remote system and
equipment. performance, distributing media, collecting system usage statistics,
diagnosing system problems and providing on line support, assistance and repair.
The network shall allow two-way real time communication between systems and any
one of the locations Maginet's local office is required to dial in to the system
every 24 hours to verify defects.
3.3 CENTRAL TECHNICAL SUPPORT SERVICES
Maginet and GDG are required to maintain a qualified technician on call 24 hours
per day 365 days per year to provide second line support for the local offices
and the installed systems; and to distribute expedited content upgrade.
3.4 LOCAL FIELD SERVICES
Maginet are required to maintain local field services to provide first line
support to each site. The local field services shall be equipped with the
appropriate facilities (space, tools, equipment and expertise) to carry out all
service requirements for all systems located in the field service facility's
territory. Each Field Service Facility is required to maintain a technician on
24 hour call, who shall be provided with second he support via modem and phone
from the central technical support facility mentioned in 3.3. Maginet and GDG
will be responsible for maintaining hardware, software and training resources in
their field offices to the latest specification.
3.5 SYSTEM UPGRADE SERVICES
The System shall be upgraded by Maginet to meet the minimum criteria as defined
below:
1. In order to add more capacity to the system if the statistical
information application described in 1.7.4 indicates that the following
conditions have been reached:
i. Video on demand
The number of simultaneous video on demand channels shall be increased by a
minimum of 12 outputs when the daily requests for movies on demand exceed the
installed number of outputs by 12 or more, on 90 days out of a consecutive
period of 365 days.
Page 16 of 25
Exhibit "A" Technical Requirements
ii Interactive services
The number of guests denied immediate access to the system, exceeds two percent
(2%) of the available rooms on 30 days within a consecutive period of 90 days.
Immediate access is access within 5 seconds of hitting the appropriate remote
control button.
2. To provide features and functionality that are offered at competing
hotels, to comply with section 14. of the master agreement and section 6
of this exhibit.
3. To add hardware and software enhancements in order to maintain all the
installed systems to the latest current standard. Such upgrades shall
take place on an annual basis, according to a software release schedule
to be posted by Maginet and GDG.
4. As required to rectify software problems.
3.6 CONTENT UPGRADE SERVICES
Maginet and GDG shall coordinate and deliver all content for use on the system
to meet the following requirements:
1. Bulk Content Update Service
Generally, System Content is required to be comprehensively updated every month,
according to a publicized schedule to be produced by Maginet and made available
to GDG, Hyatt parties and authorized parties. Deadlines no more than 7 days
prior to shipment must be established for content submissions. AU content
packages shall be installed in hotels by midnight on the publicized scheduled
day. Content update is to take place with minimum effect on Guest Access to the
system.
2. Interim Update Services
Interim content upgrade services must be provided to any or all hotels to cover
the following requirements:
a. On-line Interactive Content upgradeIt must be possible to download
interactive files from Toolkits to installed systems so that content
update can be completed and on line within 15 minutes, and without
taking the System off-line.
b. Defective Content ReplacementContent where the video quality
deteriorates below the standards established within this exhibit
shall be replaced, within the time limits set for unscheduled
maintenance services (standard service) within this section.
Page 17 of 25
Exhibit "A" Technical Requirements
C. Incorrect Content Replacement
Where video content is incorrect, such that it effects the image of
Hyatt, or is misrepresentative, offensive, or effects revenue, or for
other reasons deemed important by authorized parties using the
system, the offering content shall be removed within the time limits
set for unscheduled maintenance services (critical component failure)
within this section.
3.7 SERVICE AND MAINTENANCE STANDARDS CRITERIA
Equipment manufacturers' repair manuals and specifications are to be furnished
as a reference to be used by all parties to establish standards for maintenance
practices and operating tolerances. Maginet and GDG shall repair or replace
components as needed to maintain consistency with the minimum criteria defined
in section 1.1.
Critical equipment no longer meeting manufacturers performance specifications,
or as required under the requirements to keep current with technology in the
master agreement, is to be replaced as part of the ongoing maintenance- and
upgrade procedure. Maginet and GDG shall be responsible for ensuring that field
services facilities are capable of carrying out work to the above standards.
3.8 PREVENTIVE MAINTENANCE SERVICES
Maginet and GDG shall develop a preventive maintenance program for use by field
offices, and this shall be provided to the hotels who will provide notification
of non compliance to Hyatt parties. This program is to include MATV system
performance monitoring on a twice annual basis, and as required to maintain
standards.
3.9 UNSCHEDULED MAINTENANCE
Field response time for replacement following critical component failure must be
within four hours. Standard service must be provided within 24 hours of a non
critical fault being reported. Emergency service must be provided 365 days per
year / 24 hour per day basis. Standard service must be provided on a five (or
six days where local working practices dictate) per week eight hours per day
basis. On line support as well as live first and second line phone support must
be guaranteed as available at each hotel. The local representative provides
first line support for the hotels, while the US office will provide second line
support.
3.10 PARTS REPLACEMENT SERVICE
1. On Site
-------
Maginet shall provide adequate spare parts on-site at each hotel to facilitate
change out of basic components by the hotel engineering staff, which includes in
room devices (begin with 5% stock) and other site replaceable items Computer
cables, connectors, etc.( begin with at least 2% stock).
Page 18 of 25
Exhibit "A" Technical Requirements
2. At Field Services Facility.
--------------------------
Details of the minimum spare parts inventory must be provided to show that
inventory levels are being held at 2% of the installed levels in that location,
except where demand for parts is greater, in which case stock must be maintained
at five (5) percent of installed inventory.
Maginet shall adjust spare parts inventory to sustain the levels of service
identified throughout this section.
3.11 SERVICE HISTORY LOG
The local field services facility shall hold a detailed service history
containing all records pertaining to the system
3.12 LIMITATION OF TECHNICAL ASSISTANCE RENDERED BY THE HOTEL
The technical responsibility for the hotels shall be limited to the following
actions to be carried out by the engineering department and those hotel
employees monitoring the system:
1. Removing and replacing defective in-room components and handing them
over to Maginet and GDG's field staff during site visits
2. Reporting problems observed on the MATV system to Maginet's agents.
Hotel will not be responsible for any matters relating to other aspects of the
interactive services, but will cooperate fully with the vendors and his agent to
maximize system performance and revenue.
Page 19 of 25
Exhibit "A" Technical Requirements
4.0 New Technology Performance and Development Standards
----------------------------------------------------
4.1 GENERAL REQUIREMENTS
1.Hardware
--------
The system and components are to be designed such that they can be
upgraded to adapt to developing technologies. As a minimum it must be
possible to retrofit to already installed systems those items listed
under section four of this exhibit to comply with the terms of the master
agreement.
2.Software
--------
Maginet and GDG will be responsible for keeping all sites in a region
current with the latest software release. These details will be agreed
between Hyatt International and Maginet and GDG. Generally software
upgrades shall be expected and installed in all sites on an annual basis,
except where required sooner to correct observed software problems that
adversely effect the system performance, Hyatt's Image and/or revenue
generating capacity.
3.Future Development
------------------
Hyatt International is committed to developing a global marketing
communications database. Maginet and GDG shall commit to establish and
maintain compatibility with these requirements and to cooperate with
Hyatt International, Regency Systems Solutions and other software vendors
and consultants on an ongoing basis to further develop this concept under
the terms of the master agreement.
4.2 SPECIFIC UPGRADE REQUIREMENTS
1. December 31, 1995 Release
-------------------------
The following items are not yet incorporated into the Maginet GDG platform at
this time, but already offered in some markets by the competition. It has
therefore been agreed that they will be incorporated into the installations to
be completed after January 1996, and provided as an upgrade to those
installations completed before that date, by January 1, 1997.
Installations shall be upgraded to incorporate the following by December 31
1995.
a. Access to nationally available teletext where available.
b. Video games from one of the market leaders in this field. The current
generation of products from either Sega, Nintendo, 3DO or approved
alternative are to be provided. It shall be possible to charge for games
on a unit time or number of plays basis.
c. In-room terminals that can be tuned from a central location, that they
bypass the TV tuning device where A/V outputs are provided in the TV
sets. They shall also be concealed with a sensor no larger that 30 mm
high x 50 mm long x 30 mm deep will be visible from the guest room.
Page 20 of 25
Exhibit "A" Technical Requirements
d. Hotel information channels which can be set up for arid accessed by all
guests or by particular groups which can be individually addressed by the
hotel staff except as limited by the PMS
2. July 31, 1996 Release
---------------------
The following advanced interface requirements are already provided in some
markets and are required at the latest to be implemented in new installations by
July 31,1996 and retrofitted where required in existing hotels by July 31, 1997
Hyatt Parties will identify a preferred solution, or present a similar system
installed at a competing hotel and will make best efforts to obtain interface
protocol, for use by Maginet and/or GDG to develop the required interface.
Maginet & GDG shall deliver the required interface, to comply with section 14 of
the master agreement.
a. Advanced Interface Development Requirements that shall be installed by
Maginet/GDG are:
i. Interface to fax server -and in-room printer/scanner interfaces for the in
room terminal.
ii. Assistance in developing means to post minibar charges using MATV network.
iii. Interface to allow access to voicemail system features, via TV remote as
well as telephone.
iv. Interface to Screen format application for collecting data entered via
remote control, such as maintenance information and room status update and
similar applications.
v. Interface to remote printer or application associated with the Hyatt
Reservations network.
b. Other Screen captures will be developed according to requirements
Selected Internet screens, Public information system like teletext,
Minitel and Airline Information Systems on line hotel signage systems,
and similar applications will be required to be captured and displayed on
the hotel
Page 21 of 25
Exhibit "A" Technical Requirements
5.0 TECHNOLOGY(FUTURE)
Below is an indication of technology that is known to be under development.
These are items that may be required as upgrades to installations to comply with
section 14 of the Master Agreement and section 6 of this exhibit. Upgrades may
also be required for services that may be offered at competing hotels, but that
are not yet identified at this time or listed below.
5.1 Movie & interactive content in compressed digital format, such as MPEG 2,
when use of such a format is made available. This may include head end
upgrade to incorporate digital MATV signal delivery to the guest rooms to
the extent permitted by the MATV systems in each hotel.
5.2 Satellite, frame relay, ISDN, ATM and/or other advanced networking
methods that would enable on line downloading of movie & Reactive
content, in those areas where it becomes the accepted norm
5.3 Increasing simultaneous access to pay video and interactive services as
demand for them increases and as technology facilitates increased
bandwidth.
5.4 Incorporation of newly developed broadcast and video standards as and
when adopted by the multimedia and television industries. examples
include but are not limited to HDTV, advanced digital video formats up to
and beyond MPEG 2, Studio movie master formats, such as Do, updated
operating systems such as Windows NT.
5.5 Upgrading System communication protocol to take advantage of Increased
bandwidth and the switching capability offered by advanced networks.
Examples include fast ethernet and ATM.
5.6 Provide full motion video for interactive services content.
5.7 Provision to accommodate increased number of viewing channels as MTV
technology updates dictate.
5.8 Use of the pay TV gateway to charge for programming provided by third
parties like satellite, and cable TV providers to increase revenue for
Maginet, GDG and the hotel for example.
5.9 Cooperative development of other interfaces on an as need basis, this is
to include full interface with the Hyatt Spirit Reservations system
including on screen reservations, using the interactive system.
5.10 Provide interface with hotel fax server software to enable faxes to be
displayed on screen; and the option to print them on a printer located in
the guest rooms. Print outs of coupons and folios will also be required.
5.11 To keep Hyatt International Technical Services abreast of the latest
industry trends to give them the opportunity to update MATV system
specifications in new projects, so as to be ready for the above.
5.12 Interface with and communication between on-line hotel and signage
systems, as any be installed in the hotels
5.13 Multi-media interface with voicemail system to duplicate phone and
voicemail capability via MATV system, for link to video-teleconferencing
facilities.
5.14 Upgrade head-end to provide Stereo Audio delivery
5.15 Development of more foreign Language Content, especially Malaysian,
Indonesian and other Asian languages.
Page 22 of 25
Exhibit "A" Technical Requirements
6.0 Competitive Standards
----------------------
6.1 GENERAL STANDARDS
The master agreement requires that Maginet shall keep the system up to date to
ensure that installed systems have the features and functionality built in to
the latest Systems, or systems provided by a competitor.
6.2 KEY SYSTEM PERFORMANCE PARAMETERS
The following are key features and functions defined in the minimum technical
specification, that if improved upon by a competitor would render the System
inferior, whereby Maginet and GDG would be required to modify the system to
deliver the same or better features and functionality, under the terms of the
master agreement :
6.2.1 VIDEO & AUDIO QUALITY
In cases where competing hotels offer observably better video quality than VHS,
then the system video and audio shall be upgraded to match that level of
quality. In cases where it is difficult to quantify improvements to video
quality, the following criteria will be used to establish the acceptable minimum
quality:
Video images transmitted and displayed across the System, MATV, and a good
quality brand new twenty-five inch (25") television set must be observed to be
as good as the same images when the image source is directly connected to the
television set. The video image source for quality tests shall be a full
action, color movie on a new, unused S-VHS tape provided by a major recording
studio played back on a brand new S-VHS tape player connected directly to the
television with AV connectors.
When compared to the same movie provided as part of the Content across the
System, MATV, and television set, there shall be no noticeable degradation in
resolution, discoloration, focus, or brightness, nor multiple images (ghosting),
artifacting, or other negative differences in image quality.
6.2.2 ADDED SYSTEM FEATURES & FUNCTIONALITY
When a competing hotel offers features and functionality that it is determined
by the Advisory Board provide the competing hotel with a competitive advantage,
then Maginet and GDG shall implement equivalent or alternative technology to
ensure that the System delivers those additional features and functionality
enjoyed by the competing hotel; where those features and functionalities improve
revenue from the system or are perceived as an incentive for guests to stay at
the competing hotel.
Page 23 of 25
Exhibit "A" Technical Requirements.
6.2.3 COMPETITIVE RATES
If a competing hotel is able to offer lower rates for movies and services of an
equivalent quality, Maginet and GDG shall take whatever steps necessary,
including employing new or alternative technologies to lower operating costs
such that Hyatt Parties can match such rates, without effecting Hyatt
Profitability.
6.2.4 GREATER CONTENT VARIETY.
If a competing hotel generates higher revenues by offering a greater variety of
interactive or video on demand content, of equivalent quality, Maginet shall
increase programming and system capacity to match the usage rates enjoyed by the
competing hotel.
6.2.5 GREATER SIMULTANEOUS SYSTEM ACCESS
If a competing hotel generates higher revenues by offering a greater number of
simultaneous outputs to deliver the content, Maginet shall increase programming
and system capacity to match the usage rates enjoyed by the competing hotel.
6.2.6 VENDOR PREFERENCE
If a competing hotel offers better revenues and/or improved features such that
the revenue generating potential of the system is greater, Maginet and GDG shall
employ similar or alternative technology, to ensure that the System remains
competitive in this sector of its revenue generating capability.
6.3 ALTERNATIVE TECHNOLOGY - SYSTEM OBSOLESCENCE
If a competing hotel offers alternative technology that substantially improves
revenue and/or offers features and benefits that are determined to be an
incentive for guests to stay at the competing hotel, then Maginet and GDG shall
provide similar or alternative technology so that System delivers features and
functions that would not be perceived as inferior or outdated by guests and
vendors using the system, when compared with the competition.
6.4 DIGITAL HARDWARE PERFORMANCE CRITERIA
In cases where such technology involves digital video delivery, the following
criteria is intended to set a minimum standard, in cases where it is not
possible to define the system used by the competition:
a. Movies will be delivered to the viewer at 400 lines of resolution or
better, with color clarity and definition superior to the current
vendor's VHS product.
b. Transmission of movie signals will be sufficient to provide "flicker
free" video images.
C. The units shall be capable of providing simultaneous access to any or
all of the available number of ports on the system.
d. It must be possible to pause and rewind for a total of 15 minutes of
the movie showing time, using the remote control (subject to studio
consent).
Page 24 of 25
Exhibit "A Technical Requirements.
e. Additionally it shall meet or exceed other performance criteria
indicated below as applicable to video tape based systems, where not
specified under this section and as required to comply with the
requirements of the master agreement.
6.5 DELIVERY CRITERIA FOR SYSTEM UPDATE
To comply with the terms within the master agreement, Maginet shall deliver the
system upgrade within nine months of written notice from Hyatt Parties that the
competitor's advantage was determined to exist.
Page 25 of 25
August 22, 1995
EXHIBIT B
FORM OF INDIVIDUAL AGREEMENT,
-----------------------------
-35-
EXHIBIT B
---------
Additional System Equipment:
- ----------------------------
Provider will provide the hotel with a number of spare remote control units
equal to five percent (5%) of the total number of TVs in the Hotel linked to the
System. These units will remain the property of Provider and will be included
within the definition of "System."
Remote Control Replacement Cost:
- --------------------------------
The fee for remote control replacement units shall be U.S. $20 for each
replacement unit, plus applicable duties or fees.
Movie Rental Fee:
- -----------------
The Movie Rental Fee shall be for each access of a Program, subject to
adjustment as provided in Section 6.
Game Fee:
- ---------
The Came Fee shall be for each access of a Program; subject to adjustment
as provided in Section 6.
Hotel Commission:
- -----------------
[***], subject to increase as provided in Section 4 (i), on
Net Rental Fees from Movies and other pay video services, excepting Hyatt
Content, Interactive Services and Third Party Content, for which commission
rates shall be subsequently established by the Advisory Committee established
pursuant to the Master Agreement.
-20- (02/15/95)
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
August 22, 1995
EXHIBIT C
LIST OF CURRENT HOTELS
----------------------
-36-
List of hotels and installation schedule
[***]
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
Exhibit C
[***]
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commmission. Omitted
portions have been filed separately with the Commission.
August 22, 1995
EXHIBIT D
HOTEL FEES, COMMISSION, AND COST
--------------------------------
Initial Rental Fee: (to be established in Individual Agreements in each
country).
Hotel Commission: [***] on Net Rental Fees from Movies and other pay video
services, excepting Hyatt Content, Interactive Services and
Third Party Content, for which commission rates shall be
subsequently established.
Remote Control Replacement Cost: US $20 for each replacement unit.
*Subject to increase as provided in Section 11.9 of the Master Agreement.
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
-37-
HOTEL GUEST SERVICES AGREEMENT
This Hotel Guest Services Agreement, ("Agreement") between ______________, a
Company duly incorporated in___________________,having its principal place
of business at____________,and a [wholly-owned subsidiary/licensed distributor]
of MagiNet International Corporation (hereinafter referred to as "Provider"),
and the Hyatt __________ Hotel, having its principal place of business
at_________ ("Hotel") , sets forth the terms for installation, operation and
maintenance by Provider of an on-demand guest video system and related services
in the Hotel.
WHEREAS:
(A) The Hotel operates a hotel for the lodging of guests in separate,
private rooms and suites which are customarily available for overnight sleeping
accommodations;
(B) The Hotel wishes to enhance the guests' stay by giving them the
opportunity to view pre-recorded entertainment programs and movies and standard
off-air broadcast or cable television channels available to the Hotel without
special equipment.. and other programming and interactive service offerings,
conveniently in the privacy of their own rooms using an on-demand video system
provided by MagiNet;
(C) Hyatt International-Asia Pacific Limited ("Hyatt International"),
Hyatt: Chain Services Limited ("Hyatt Chain"), Guestserve Development Group
("GDG"), and MagiNet International Corporation ("MagiNet") have entered into an
exclusive Master Guest Video Services Agreement dated August 1995, (the "Master
Agreement") whereby MagiNet, using on demand video and interactive services
technology (of GDG ("GDG Technology") , has agreed to provide on-demand video
services and interactive services pursuant to the terms therein and herein;
Now, therefore the parties do hereby agree as follows:
1. ON-DEMAND VIDEO SERVICES SYSTEM
(a) Provider shall, with the support of MagiNet and GDG, provide to
the Hotel through the System (defined below) and the Hotel's video and audio
transmission and receiving and antenna and wiring systems ("MATV") on-demand
video and interactive services pursuant to the terms and conditions set forth in
the Master Agreement and herein. All terms and provisions in the Master
Agreement applicable to the parties hereto, including obligations of MagiNet and
GDG to the Hotel thereunder, are hereby incorporated
(02/15/95)
into this Agreement by reference and made a part hereof. In the event of any
conflicts between this Agreement and the Master Agreement, the Master Agreement
shall control.
(b) The Hotel is hereby fully licensed by Provider, GDG and MagiNet
for as long as this Agreement is in effect to have the use of the GDG
Technology, and any improvements thereon made by GDG, MagiNet and/or any third
party acting under a license or contract from either on the terms provided
herein.
(c) The Hotel is hereby fully licensed by Provider, GDG and MagiNet
to have and use a graphics generator (the "Graphics Generator") that enables the
Hotel to update its own Hotel Content for display on the System through. the GDG
Technology as provided in subsection (p) below. "Content" shall mean off-air
activities, services and programming as provided hereunder and as may be agreed
upon pursuant to the Master Agreement, This license covers all uses in the Hotel
by any entities affiliated with Hyatt international (the "Hyatt Affiliates")
throughout the duration of the Master Agreement and for such time thereafter as
permitted by this Agreement.
(d) "System" as referred to herein, shall include at least: (i) a
module for each television set that can remotely control on demand requests made
by guests from Hotel rooms ("Rooms") to central storage devices within the
Hotel; (ii) a remote control and appropriate spares for each television in the
Hotel; (iii) Content storage sufficient for the Content initially installed and
a reasonable amount of expansion capability for additional Content that may be
installed in the future; (iv) a front-desk personal computer monitor and
printer; and (v) all necessary software, electronic, computer and switching
equipment, including GDG Technology to permit the receipt, transmission,
monitoring and on demand remotely controlled interactive guest operated in-room
display of the Content.
(e) Subject to the right of Hotel and its guests to use other non-
competing video devices, cd players, computers, telefax machines, and similar
devices in the Rooms, the Hotel will ensure that the System will be the sole and
exclusive in-room pay per view guest video services system provided to their
guests during the term of this Agreement (except as otherwise provided for
herein, or in the Master Agreement). The Hotel will not either directly or
indirectly solicit the installation of any video system in the Hotel which might
directly compete with or cause transmission interference with the System.
(f) Subject to paragraph (j) following, Provider shall develop,
repair, purchase, build and install all hardware and software required to
operate the System at its sole cost, including any MAIN' upgrades required for
the System to perform according to specification, and shall install, operate and
maintain the System
-2- (02/15/95)
and such MATV at the Hotel as provided herein. All required hardware and
software and other equipment and specifications for the System and the MATV are
specified and listed in Exhibit A hereto (the "Technical Requirements").
(g) Provider shall provide documentation to provide the reader with
sufficient information so that the System can be operated without further
consultation (the "System Manual"). Two (2) copies of each System Manual shall
be provided for the Hotel.
(h) One (1) copy of a manual that describes the Graphics Generator
sufficiently to permit its use shall be provided to the Hotel (the "Graphics
Generator Manual").
(i) System Manuals and Graphics Generator Manuals may be copied and
printed in whole or in part by Hotel on an as needed basis. All Manuals shall
be marked and treated by all parties as confidential. Notice of copying of each
Manual shall, with best efforts, be given to Provider.
(j) The System shall provide guests with the Content in as efficient
and effective a manner as is reasonably and technically possible at the time the
System is installed in each Hotel, and as further specified and described in the
Technical Requirements.
(k) The System shall accommodate, and Provider shall ensure the
delivery of across the System and the MATV, to the extent reasonably and
commercially possible, all Content that the Hotel determines in the future would
benefit Hotel guests or Hotel staffs and would be economically viable to add to
each Hotel's services.
(l) The System will be multilingual, and shall permit displays and
commando in at least three separate languages. The selected languages are
preliminarily designated in English, Japanese, and the primary local language
used in the country in which the Hotel is located. If Hotel desires a different
set of languages it shall designate its selections by written notice to MagiNet
on the date of execution of this Agreement and such notice shall become attached
hereto as an Exhibit. Subsequent changes or additions to such languages shall be
mutually agreed in accordance with Customer demand.
(m) Provider shall at all times in the future ensure that the System
and all other Hyatt International or Hyatt Chain contracted computer,
reservations and information systems operated or used by the Hotel are
interoperable, and will ensure that it takes no action(s) that could jeopardize
such interoperability.
(n) Provider understands and agrees that the System mustmeet or
exceed all applicable Technical Requirements described in
-3- (02/l5/95)
Exhibit A. Provider shall provide sufficient spare equipment to minimize the
effect of component failure on guest services and to enable rapid repair and
replacement of defective components, including spare onverters and remote
controls to enable Hotel staff to meet the short term needs of its guests if
repair and/or replacement of components are required.
(o) Each Hotel will ensure the safety and security of the System and
all related property of Provider at all times while the System is installed in
the Hotel, and will be liable for any loss or damage to the System resulting
from willful misconduct on the part of Hotel's guests, employees or third
parties (excepting third parties associated with MagiNet or GDG).
(p) The Hotel shall have the right to utilize the System in the Hotel
to display informercials, programs on other hotels and resorts, and similar
advertising and merchandising of hospitality industry products and services
offered by Hyatt International or any Hyatt Affiliates ("Hyatt Products"),
including, Interactive Services (see below) and Hotel Services (see below)
(collectively, "Hotel Content"),
(q) Hotel Content shall not be directly competitive with any then
currently available Content.
(r) Except as specifically otherwise provided herein, all Content
other than movies must first be approved by the Hotel prior to installation on
the System,
(s) "Hotel Services" shall mean those guest information and other
services available now and in the future from the Hotels or Hyatt International
and Hyatt Affiliates, including the development, storage and transmission of
information about: (1) guest billings status, (2) minibar consumption and other
charges, (3) hotel, transportation, and restaurant reservations, (4) guest
marketing information for or on behalf or third parties, and (5) guest messaging
systems and services.
(t) Provider shall ensure that Hotel Services are available through
the System, and can be accessed with no more delay than may, be experienced in
order to obtain Interactive Services (defined below) from Provider, include such
assistance as may be needed for the Hotel so that all Technical Requirements are
met for the transmission of Hotel Services through the System.
(u) "Interactive Services" shall mean all. interactive guest video
products and services, including games, made available to the Hotel by Provider
pursuant to the Master Agreement.
(v) If Hotel requires Provider to provide services requiring the
modification of hardware or software interfaces other than those on the System
in order to implement future Hotel
-4- (02/15/95)
Services, then the Hotel shall be solely responsible for such costs. If
Provider satisfies such requirements, then any direct costs for the alteration
of existing interfaces solely for the purpose of providing future Hotel
Services, and approved by the Hotel, shall be paid by Hotel.
(w) After execution of this Agreement, Provider will perform at its
expense a site evaluation at Hotel to determine whether any upgrading of the
Hotel master television antenna system ("MATV") will be required. If such
upgrading is required, this shall be provided and funded by MagiNet, as provided
in Section 4(i).
2 TERM OF AGREEMENT
(a) The term of this Agreement will begin on the Term Commencement
Date as defined in Section 2 (b) below and will continue until the expiration or
earlier termination of the Master Agreement (the "Term").
(b) Upon the installation of the System, Provider will test the
System to ensure functionality as provided in Section 4(f). Upon the successful
conclusion of such test, Provider and Hotel will sign a statement. acknowledging
that the System is functional. Such statement will be attached hereto when
completed as provided in Section 4(f), and the "Term Commencement Date" will be
the date of such statement.
3. HOTEL FACILITIES.
During the Term, Hotel shall provide a designated room for installation of the
System; signal wiring and connections; electrical power and sockets; cooling
facilities; and a secure location for all equipment comprising the System
(collectively, the "Hotel Facilities"); all in accordance with the Technical
Requirements.
4. INSTALLATION
(a) Installation shall commence within ________( )days following
execution of this Agreement.
(b) Provider shall apply for and obtain all licenses, permits and
other government approvals required to do work on Hotel's premises, and shall at
all times comply with the applicable legal and regulatory requirements for such
work. it shall be Provider's responsibility to handle all such requirements, and
also its responsibility to pay for any legal expenses and fines incurred due to
Provider's failure to comply with such requirements.
(c) An interface with Hotel's PMS shall be completed during
installation of the System. A front-desk personal computer
-5- (02/15/95)
and printer will be included as a part of the System for printing charges for
each guest purchase or rental in case such interface fails at any time.
Provider will ensure that the System will fully interface and integrate with the
PMS. As a part of such integration, guest usage charges shall be automatically
posted to each individual guest's bill, counts of access shall be available to
the Hotel and other reporting will be permitted. Hotel will cooperate with
Provider for the purpose of successfully implementing the interface, and shall
undertake its best efforts to insure cooperation between Provider and each PMS
software vendor used by the Hotel. All interface protocol installation or
maintenance charges asserted by the PMS software vendor and agreed upon in
advance by the Hotel will be paid for by Hotel.
(d) Hotel will provide such access as may be reasonably requested by
authorized personnel to enable complete installation of the System in the Hotel,
including without limitation providing all Hotel Facilities, within a reasonable
time to permit complete installation. Hotel will make reasonable efforts to
provide Sufficient access to guest rooms for the purpose of equipment
installation so that such installation is performed with a minimum of delay.
During the installation process, Hotel will exercise best efforts to provide
complimentary rooms for out of town members of the installation team.
(e) Appropriate fully qualified personnel shall perform Provider's
obligations hereunder in an efficient, courteous, effective and timely manner
and all such personnel shall be bonded, trained and supervised in accordance
with appropriate hospitality industry practices consistent with local practice
and custom. All actions of any person acting for or on behalf of Provider shall
be subject to the same rules and regulations, which will be made known to
Provider, as are applicable to Hotel staff. All such persons shall wear
identification badges, and shall be dressed in a proper fashion.
(f) Upon completion of the installation, Provider will test and
ensure that the System in each Hotel, and in all Rooms is fully functional
without material defects and meets all applicable Technical Requirements. Upon
the successful conclusion of such testing, Provider will deliver to the Hotel
and the Hyatt Parties a written Certification (the "Certification"), that the
System is fully functional and without material defects and meets all applicable
Technical Requirements. Such Certifications will be attached to this Agreement
as an exhibit.
(g) At the time of installation, Provider shall train all employees
deemed by Hotel to be appropriate in the use of the System.
(h) Hotel will begin the process of billing guests for and generating
revenue from the Content no later than the date of
-6- (02/15/95)
the Certification.
(i) Hotel shall provide access to its MATV. Provider shall be
responsible for all work required to and all costs incurred in upgrading the
MATV as required for proper operation of the System, except that improvements
required for in-wall cable and its installation in excess of $5,000 shall be
paid by the Hotel. If these costs exceed [***] and Provider elects not to pay
for such excess, then the Movie commission rate payable to the Hotel for the
Movies shown at Hotels shall be increased by [***] for a period of three years.
Nothing herein shall be deemed to allow or require Hotel to submit any records
beyond those showing the actual costs of the purchase and installation.
(j) The installation of the System and MATV upgrade shall not degrade
the MATV, or impair the ordinary reception of broadcast programs (or other
services on the MATV. Any MATV hardware and equipment owned by Hotel which has
been disconnected as a result of the installation will be taken to Hotel
designated storage locations by the installation personnel.
5. MAINTENANCE
(a) Provider will promptly provide all maintenance, repairs and
replacement of all software and hardware and other equipment necessary to ensure
proper operation of the System and the related MATV in the Hotel, including
satisfactory signal quality, and shall insure that a qualified person is
available on a twenty-four (24) hour basis to receive service requests. MagiNet
and GDG will provide backup support to Provider as necessary to ensure proper
maintenance, repair and replacement occurs. Such maintenance and technical
assistance will be provided free of charge, unless the maintenance is occasioned
by a breach by Hotel of any of its obligations as set forth in this Agreement,
or by unauthorized use, access, theft, negligence or damage caused by Hotel
staff or third parties not under contract to Provider, MagiNet or GDG. Hotel
staff shall be trained so that they can undertakeroutine maintenance as agreed
upon by the Hotel and Provider. Provider shall not be obligated to maintain
hardware already contracted by Hotel to a third party.
(b) Hotel will, at the Hotel's expense, notify a person designated by
Provider by telephone or by fax of any failure or degradation of any part of the
System anywhere within the Hotel, including in any Room.
(c) The Hotel will notify Provider as soon as is reasonably possible
and upon Hotel's actual notice of any unauthorized use, access, theft, damage or
malfunction of or to the System.
(d) Each Hotel will allow authorized personnel of
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
-7- (02/15/95)
Provider, MagiNet and GDG to have escorted access to the System at reasonable
times in order to conduct routine maintenance, to observe and to monitor the
System, to ensure suitable operating conditions, to implement improvements in
the System, to conduct repairs, and to otherwise carry out Provider, s, MagiNet
I s and GDG' s obligations set out in this Agreement and the Master Agreement.
(e) In the event that any malfunction, nonconformity or other defect
in the System is believed to exist by Hotel and notice of such defect is given,
Provider shall promptly undertake best efforts to have the defect corrected and
in no event shall there be more than a four (4) hour delay in Provider's
response and all repairs shall be made as quickly as possible. If Hotel does not
provide prompt access to the System to correct System failures once Provider has
been notified by Hotel of such. System defects, Provider will not be liable for
any delays so incurred.
(f) Any repairs or replacements to any equipment supplied by Provider
made necessary by any negligent or willful act by Hotel or any of its guests,
employees, contractors, servants, and agents, or force majeure events, will be
undertaken by Provider at Hotel's expense.
(g) Hotel shall not permit any person to tamper with or attempt to
make repairs to any equipment supplied by Provider. In emergencies, Hotel may
carry out repairs in accordance with instructions given by Provider.
(h) Each Hotel will be responsible for replacement of depleted
batteries and for paying for replacement infrared remote control units in the
event of theft, loss or damage in excess of twenty (20) units per year. Initial
replacement cost is as set forth on Exhibit B, plus shipping, duties and taxes,
and is subject to change upon written notice from Provider or MagiNet to Hotel,
with an effective date at least thirty (30) days in advance of a change, in
accordance with commercially reasonable and customary practices:
6. RENTAL FEE AND PAYMENT TERMS
(a) Hotel will charge hotel guests for access to Movies and other pay
per view and pay for service Content (collectively the "Programs") for which
charges are assessed (the "Rental Fees") The amount to be charged for Movies
shall be set by Provider in consultation. with and approved by Hotel at the time
of the execution of the Agreement or, for other pay per view and pay for service
Content, at the time the Content is made available. Such charges shall not
commence until after a guest has been allowed to review the selection for an
initial period to be mutually agreed by Hotel and Provider. In addition to the
Rental Fee, Hotel will collect from guests any taxes applicable to such
receipts, and will pay those taxes to the appropriate government authorities.
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(b) From time to time, Provider may revise the Rental Fees after
consultation with Hotel. Rental Fees shall be charged which are customary in
each locale, and may be increased annually in an amount at least equal to the
increase in the local cost of living. Provider will notify each Hotel in writing
of any new Rental Fee and the effective date at least thirty (30) days in
advance of a revision.
(c) In the event any Hotel guest disputes the amount of Rental Fees
in a situation in which Hotel personnel are otherwise unaware of any System
malfunction (herein referred to as a "Denial"), Hotel may in its sole discretion
credit the disputed amount to the guest's account provided it provides Provider
with a copy of the credit voucher showing room number, date, time of day, and
reason for the disputed charge. Hotel will use its best efforts to limit Denials
to not more than five percent (5%) of gross Rental Fees per month.
(d) The System will generate an accurate record (the "Access Record")
of the access to the System by any guests, including a record of the access
charges for each individual guest's bill or Room account, the types of access
made, and any other reasonably recordable information that may be requested. The
Access Record will not retain the names of guests Provider will be responsible
at their own cost for programming the System to enable it to provide the
aforesaid data. The Access Record for Hotel will be held in confidence by the
personnel of Hotel. Provide and Hotel may review and use the Access Record for
such purposes as they may reasonably deem appropriate. Each party will indemnify
the other against any and all claims as a result of their improper use of such
Access Record.
(e) Hotel will submit a report (via telefax) to Provider on the first
day of each month which details the previous month's gross Rental Fees and
itemizes deductions for all Denials allowed. Provider shall invoice the Hotel
for gross Rental Fees less Denials allowed, Hotel commissions payable under
Exhibit B (which Exhibit shall be supplemented and amended from time to time as
new Programs are added to the System) and unreimbursed tax payments ("Net Rental
Fees"), all based upon guest usage as reported by the relevant PMS accounting
records during each calendar month which information shall be accessible and
reviewable during the month by Provider and Hotel. Hotel shall handpost any
invoices printed in hard form as a result of PMS downtime to accurately capture
those buys in PMS records. If Hotel's PMS report differs from the automatic
record kept by the System, both parties agree to mutually and amicably resolve
any variances between their respective records of Rental Fees and Denials.
(f) Hotel will pay to Provider or the designated subsidiary or
distributor or other designated party within ten (10) days, the Net Rental Fees
invoiced by Provider as provided in
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paragraph (e) preceding. The payment transmission will also specify the
occupancy rate for the month.
(g) Hotel All keep current, complete and accurate records of
occupancy rates and all Net Rental Fees and other amounts due to Provider
pursuant to this Agreement. Throughout the duration of this Agreement, Hotel's
book and records pertinent to the Rental Fees, Denials and Net Rental Fees for
any month will be open to inspection and reproduction by Provider and, if
necessary, to an audit by a mutually agreed upon certified public accountant as
an authorized representative of Provider upon reasonable advance written notice
to Hotel. No such records need to be retained beyond one year, Provider's right.
to inspect and audit the books and records of Hotel will not extend beyond one
year from the expiration of the Agreement, If any audit by Provider discloses
any non-payment or underpayment of any amount payable to Provider, the Hotel
will immediately pay to Provider any deficiency, plus interest charges at the
rate of 1.5% per month or the maximum interest allowed by local law, whichever
is less. If the deficiency is in excess of fifteen percent (15%) of the actual
amount payable to Provider for the period for which the deficiency occurred, the
Hotel will reimburse Provider for all costs incurred by Provider in conducting
the audit.
7. PROGRAM TITLE SELECTIONS
(a) It is understood and agreed that, except as otherwise provided
below, Provider shall have absolute control and discretion in the selection of
the movies it contracts for with the movie studios or their distributors and
provides to Hotel (the "Movies").
(b) Provider shall provide a method whereby a guest will be able to
electronically restrict persons from viewing any adult selections being offered
in a Room.
(c) When available from producing studios, the Content offered by
Provider shall include first run Movies offered to Hotel that shall be no less
current and offer no less variety of first run and other titles than those
available at competing hotels in the country where the Hotel is located.
Provider shall consult with the Hotel on a regular basis to ensure the provision
of a selection of titles properly suited to each Hotel's guest profile. Hotels
may review the movies and other video materials being offered by Provider, and
may object to Movies it feels violate the sensitivities of the guests at a
particular Hotel, and any unresolved disputes will be adjudicated by the
Advisory Board established pursuant to the Master Agreement, pending which
resolution the objectionable Movies shall not be offered at the Hotel.
(d) Provider will be solely responsible for any royalty
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payable to Movie suppliers and any license fees for Movies made available on the
System.
(e) Each Hotel will be responsible for ensuring that access to the
room(s) in which the central storage and transmission equipment for the System
is located is restricted to persons accompanied by persons authorized by
Provider to be present there except in cases of emergency. Provider shall
authorize a sufficient number of persons employed by the Hotel for such purpose,
Hotels will not authorize copying of any Movies and will undertake their best
efforts to ensure that the Movies are exhibited in the Rooms only, and not in
the public rooms and public areas (including lobbies, hallways, restaurants,
bars, meeting rooms, etc.) of the Hotel. The Movies will not be exhibited other
than in accordance with this Agreement. Hotel will use reasonable efforts to
insure that only registered guests of the Hotel and their invitees may view the
Movies.
(f) Cassettes and other media that contain the Movies ("Cassettes")
will be kept in a secure and locked area. Hotel will prevent unauthorized access
to and use, exhibition or viewing of any Cassette by any person other than as
set forth herein. Hotel will not permit any person to duplicate or make
alterations of any kind to Cassettes. Hotel will promptly report to Provider any
unauthorized use of the Cassettes as soon as a Hotel becomes aware of any such
use. If Hotel has videocassette recorders installed in the Rooms, the Hotel
shall agree that Provider may, where required to do so as a result-of its
licensing agreements, as directed by the Hotel, either (i) disable the "record"
function in such a way that does not permanently damage the videocassette
equipment, but only to the extent required to comply with such restrictions, or
(ii) disable the Movie function for such Rooms.
(g) Provider shall be responsible to ensure that any of the
transmissions on the System controlled by it do not violate any applicable laws,
including those of the country in which Hotel is located; including specifically
any laws relating to copyright, pornography, and censorship of information or
materials.
(h) Provider shall at all times offer to the Hotel the most advanced
guest video services and features (and associated technologies) it or its
competitors offers to any other hotel.
8. OWNERSHIP OF THE SYSTEM.
(a) The parties agree that the System and all equipment, materials
and engineering related thereto (excepting the MATO) and which are provided by
Provider are the sole and exclusive property of Provider.
(b) Hotel shall exercise best efforts to ensure the safety and
security of the System and all related property of
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Provider at all times while the System is installed at the Hotel. Hotel will
use its reasonable efforts to prevent any vandalism, theft, or damage of (or to
any of the equipment supplied by Provider.
(c) Hotel shall not allow, any lien, encumbrance, mortgage, claim or
security interest to be attached to or be made against the System. The Hotel
shall allow Provider to affix a notice or plaque to the System stating that the
System is the sole and exclusive property of Provider and/or MagiNet.
(d) Hotel shall allow authorized personnel of Provider, MagiNet or
GDG, or their independent contractors to have access to the System at all times
in order to conduct routine maintenance, observation and monitoring of the
System, to ensure suitable operating conditions and to implement improvements in
the system. Upon termination of this Agreement, Hotel will take all reasonable
actions necessary to allow Provider to remove the System promptly and Provider
shall remove the System no later than thirty (30) days after such termination
and shall return the premises to their original condition, normal wear and tear
excepted at no cost to Hotel.
e) In the event the safety of the System is threatened due to
earthquake, flood, fire, strike, civil disruption or similar causes, Provider
shall be entitled to enter upon. the Hotel premises and to remove the System
from danger upon reasonable notice to Hotel.
(f) "Hotel Systems" shall mean those hardware and software systems
other than the System used by Hyatt International and Hyatt Affiliates and the
Hotel to deliver Content to guests in their rooms, including any transmitting
devices and equipment, wiring, televisions, and cable or master antennae
transmission systems, as well as all software and hardware used for Hotel's PMS
and MATV.
(g) Hotel Content, Hotel Systems, all signal boosters, wiring and
faceplates, and any portions of the System that are permanently installed, or
installed in such a way that the removal of that part would cause more than
incidental wear and tear to the premises, and all other property at the Hotels
apart from the System, shall be considered by the parties to be the sole and
exclusive property of the Hotel (the "Hotel Property") . All Hotel Property
shall be considered to be the property of the Hotel, irrespective of whether
such information, materials, hardware and software systems are used on or
developed by anyone related to MagiNet and/or GDG and/or any third parties.
(h) The System and Content provided by Provider, MagiNet and/or GDG
that is not Hotel Property shall be either the property of Provider, MagiNet or
GDG or properly licensed to Provider,
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MagiNet or GDG by a third party.
(I) Equipment comprising part of the System and owned by Provider
will not be removed from Hotel for any purpose whatsoever during the term of the
Agreement except for purposes of repair, and when removal is necessary to ensure
safety of such equipment.
9. INSURANCE AND PROPERTY TAXES.
(a) Provider will maintain general business risk insurance on the
System at its expense.
(b) Provider shall carry and maintain for installation, and any later
work at the Hotel, worker's compensation insurance, or such other insurance as
is required and or needed to pay for any actions of Provider's personnel and all
such other personnel, in the amount of at least $1,000,000 combined single limit
comprehensive general contractual liability insurance, and. at least $1,000,000
combined single limit vehicle liability insurance. Copies of all applicable
policies and certificates of insurance shall be provided to the Hotel prior to
commencement of any work on the premises of any Hotel.
(c) Hotel shall include the System in any assessment of the real
estate or personal property of the Hotel and pay such taxes as are assessed, to
the extent required by law.
(d) To the extent permitted under its existing insurance policies,
Hotel shall include the System as part of its insured property and equipment.
10. PUBLICITY REGARDING THE SYSTEM.
Hotel and the staff and the employees of the Hotel shall adequately publicize
the existence of the System and access to the Programs 'for use by guests as
determined by Hotel in its sole discretion. Hotel hereby acknowledges that the
success of the System installed by Provider depends on the response of the
Hotel's employees to guests, inquiries in a proper manner to encourage guests'
use and enjoyment of the System. If Provider shall develop and provide to Hotel
in-room or other advertising materials to encourage use of the System by guests
of the Hotel, Hotel shall place such material in the Rooms or elsewhere at the
Hotel, provided that Hotel Provider finds such materials to be suitable to the
decorum of the Rooms.
11. TRAINING AND CONSULTATION.
(a) To enable each Hotel to generate suitable promotional material related
to the use of the System and to enable personnel of each Hotel to advise and
encourage guests regarding
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their use of the System, Provider will provide a one-time training course on the
use and operation of the System for as many employees as Hotel deems desirable
at no charge. Such training shall take place within sixty (60) days of the
installation done under this Agreement.
(b) Hotel will exercise best efforts to provide complimentary
accommodations for Provider training personnel. In addition, Provider, MagiNet
and GDG personnel will be reasonably available at no charge for telephone
consultation to personnel of Hotels to provide further assistance regarding use
and operation' of the Systems, including an in-country telephone number staffed
on a twenty-four hour basis.
12. CONFIDENTIALITY
The parties agree that the functions and components of the System, facts
regarding the equipment and materials related thereto, the manner of operation
thereof and the terms of this Agreement, including without limitation Rental
Fees payable hereunder, all constitute proprietary information of Provider.
Hotel shall not permit any third party to have access to the System other than
such of the Hotel's maintenance personnel as may be reasonably necessary to
enable Hotel to provide the Hotel Facilities and otherwise as expressly
permitted by Provider in writing.
13 REPRESENTATIONS AND COVENANTS
The Parties represent, undertake and covenant with each other that
throughout the duration of this Agreement:
(a) Authority. The Parties warrant and represent that each has full legal
---------
power and authority to enter into this Agreement and to perform all of its
obligations hereunder and that this Agreement is within its authority and that
all necessary corporate action has been taken to authorize it to enter into this
Agreement and perform its obligations hereunder.
(b) Compliance. Each party will comply, and will ensure that performance
----------
of its obligations hereunder complies, with all applicable laws, ordinances,
rules, regulations, orders, licenses, permits or other requirements now or
hereafter in effect, of any governmental authority. Without limiting the
generality of the foregoing, to the extent any filing with, or any license,
approval or other agreement of, any applicable authority is required for
performance of any of the either party's obligations, such party will file the
appropriate documents and will maintain such documents on file, which Provider
may inspect upon demand.
14. DEFAULT
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(a) Default. Either Hotel or Provider shall be in default under this
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Agreement if it (i) shall be adjudicated bankrupt or petition for relief under
any bankruptcy, reorganization receivership, liquidation, compromise arrangement
or moratorium statute, or (ii) shall petition for the appointment of a receiver,
liquidation, compromise arrangement or moratorium statute, or (iii) shall
petition for the appointment of a receiver, liquidator, trustee or custodian for
all or part of its assets.
(b) Notice of Non-performance. Hotel or Provider shall also be in default
-------------------------
under this Agreement if it (or any associated or affiliated entity so required)
should fail to perform or comply with any material obligation under this
Agreement or under the Master Agreement intended to benefit either party and
either (i) such failure is not remedied within sixty (60) days after receipt of
notice from the other party of such failure or (ii) if such default is of a
nature that it cannot, with due diligence and in good faith, be cured within
sixty (60) days, the non-performing party fails to proceed promptly and with due
diligence and in good faith to cure such failure of performance. In each
instance the non-performing party shall be informed in writing by the other
party of the circumstances of such non-performance.
(c) Remedies. If any of the events of default set out in Section 14(a) or
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(b) above should occur, the party not in default may exercise any or all of the
following remedies: (i) cancel and terminate this Agreement (which termination
for purposes of Section 6(b) shall become effective sixty (60) days after the
original notice to the defaulting party of the failure to perform or comply) ,
(A) obtain injunctive and other equitable relief, and (ii) obtain such damages
and other rights and remedies as the party not in default may have at law, and
(iv) undertake either step(s) (i) and/or (ii) while retaining the System in
place (subject to continuance of all other material terms and conditions herein
and until a replacement vendor can be selected in an orderly transition to that
vendor's technology).
(d) Master Agreement. In the event the Master Agreement is terminated for
----------------
any reason Hotel shall have the option, exercisable within thirty (30) days, to
terminate this Agreement, otherwise this Agreement shall continue in full force
and effect according to the terms herein. Default under or termination of this
Agreement shall not be considered a default for the purposes of the Master
Agreement except as specifically provided therein.
15. MARKETING AND PROMOTION.
(a) Any marketing and promotion that occurs with respect to the System in
connection with the Hotel shall be first approved by the Hotel.
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(b) No party is or shall act as the agent for any other party, and no
statement may be made that can be attributable to a party, or any of its
affiliated or related companies or entities, without first obtaining such
entity's permission for the statement.
(c) The parties agree to cooperate with each other to promote the use of
the System.
16. GENERAL TERMS
(a) Provider shall indemnify and hold the Hotel, and all related entities
and persons, including their affiliates, agents, officers, directors and
employees, harmless from any and all actions, costs, losses, expenses and/or
damages resulting from Provider's activities and the activities of any entity
for which they have assumed responsibility hereunder, pursuant to or relating or
incidental to this Agreement. Such indemnification shall specifically include
any and all actions alleged to involve intellectual property and any other
action of any kind.
(b) Provider agrees to be fully responsible for all subcontractors who
may be chosen for actions to be taken under this Agreement, including full
indemnity for the actions of any subcontractor or any of the subcontractor's
employees.
(c) Hotel shall be required insofar as is commercially reasonable to
notify Provider of any video recording and/or playback devices and related
content that are provided by the Hotel to its guests.
(d) Except as required by Provider, MagiNet or GDG licensing agreements
with others, nothing herein may be used by Provider or MagiNet or GDG to limit
the Hotel in their promotion of any Content whatsoever, which promotion shall be
entirely within the Hotels' reasonable discretion.
(e) This Hotel Agreement will be governed by the laws of.........
(f) Except as otherwise set forth herein, the provisions hereof will be
binding upon, and will inure to the benefit of, the respective successors and
assigns of the parties hereto; provided that no assignment of this Agreement
will be made by Provider without the express prior written consent of Hotel,
such consent not to be unreasonably withheld. It is expressly understood that
Provider may assign this Agreement without consent, specifically including: (i)
an assignment by Provider to a creditor for debt financing purposes, provided
that such creditor has agreed in writing to abide by the terms of this
Agreement, and (ii) an assignment to a subsidiary or related entity of Provider,
so long as Provider remains primarily liable. Notwithstanding any
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assignment, none of the System or other Provider property may be removed from
the Hotel prior to the Hotel's uncured default or termination of this Agreement,
free of any claims on the System.
(g) This Agreement may be modified or amended only by a written agreement
signed by both parties. No waiver by either party of any breach or default
hereunder will be construed as a waiver of any precedent or subsequent breach or
default.
(h) This Agreement sets forth the entire agreement and understanding of
the parties relating to the subject matter hereof, and merges and supersedes all
prior discussions and understanding between the parties related thereto, whether
written or oral.
(i) Where a party is unable, wholly or in part, by reason of Force
Majeure, to carry out any obligations under this Agreement and that party; (i)
gives the affected party prompt notice of that Force Majeure with reasonably
full particulars and, insofar as known, the probable extent to which it will be
unable to perform or be delayed in performing that obligation; and (ii) uses all
reasonable efforts to remove that Force Majeure as quickly as possible; then
that obligation is; suspended insofar as it is affected by the continuance of
that Force Majeure provided that this section will not operate to relieve any
party of any obligation to pay money. In the event any Force Majeure prevents
performance under this Agreement by either party which continues in existence
for more than thirty (30) days, the parties will meet in good faith to discuss
the situation and to make all reasonable efforts to achieve a mutually
satisfactory resolution of the problem so that Force Majeure no longer prevents
performance under this Agreement, provided that the Hotel shall have the option
to terminate the Agreement for any Force Majeure event that last longer than one
hundred and eighty (180) days.
(j) Any and all disputes arising under or in any way connected or related
to this Agreement, and any subject matters covered by this Agreement, shall be
finally adjudicated and resolved through final and binding arbitration in
_________, accordance with the Rules of Arbitration of the United Nations
Commission on international Trade Law (UNCITRAL). Interim court relief may be
sought at any time by any party, and any request for interim relief shall not be
considered a bar to arbitration, nor limit the power of the arbitrator to change
any interim relief awarded during the course of the arbitration.
(k) In the event that materially better terms than those stated herein
are offered by Provider to any similar hotel located in the same city as the
Hotel, the Hotel will be offered all the same terms and conditions, and any less
favorable payments made or receipts obtained subsequent to their being
contracted with another customer but prior to the effective date of the change
in the terms in this Agreement shall be reimbursed to or for the Hotel.
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(l) Subject to the provisions of this Agreement, all Intellectual
Property owned by, the Hotel and any related entities shall be and remain the
property of those entities. Provider, MagiNet and GDG and any related entities
shall be provided the limited right to use and practice such Intellectual
Property solely for the purpose Of ensuring that they can perform under this
Agreement.
(m) Subject to the provisions of this Agreement, all Intellectual
Property of Provider, MagiNet and GDG and any related entities shall be and
remain the property of those entities. The Hotel and any related entities shall
be provided the limited right to use and practice such Intellectual Property
solely for the purposes described in this Agreement.
IN WITNESS WHEREOF, this Hotel Agreement is entered into by the parties hereto
this.....day of......., 19...
[PROVIDER) [HOTEL]
By: By:
Title: Title:
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