Exhibit 10.17
INITIAL PROVIDER NETWORK ACCESS AND USE
AGREEMENT
Between
PROVO CITY, UTAH
and
VIDEO INTERNET BROADCASTING CORPORATION
d.b.a.
HOMENET COMMUNICATIONS OF UTAH
Dated effective as of July ____2004
IPROVO NETWORK PROJECT HOMENET & PROVO AGREEMENT
TABLE OF CONTENTS
Recitals ......................................................................1
Article I Definitions..........................................................2
Article II Description, Term of Agreement .....................................6
Article III Network ...........................................................7
Article IV Pricing and Payments................................................8
Article V Network Operations .................................................10
Article VI Marketing .........................................................13
Article VII Customer Service..................................................15
Article VIII Representations and Warranties...................................16
Article IX Covenants..........................................................18
Article X Assignment and Security Interests ..................................21
Article XI Liability and Indemnification .....................................21
Article XII Force Majeure.....................................................24
Article XIII Breach and Termination ..........................................26
Article XIV Miscellaneous ....................................................28
List of Exhibits & Appendix:
Exhibit A - Retail Services
Exhibit B - Initial Service Provider User Period
Exhibit C - Minimum Market Penetration Standards
Exhibit D - Network Build Schedule
Exhibit E - Network Lease Pricing Schedule(s)
Exhibit F - Service Level Agreements
Exhibit G - Disaster Recovery Plan
Exhibit H - IP Video Middleware and Set Top Boxes
Exhibit I - iProvo Asset Purchase Agreement
Exhibit J - Provo Cable Asset Purchase Agreement
Exhibit K - IP Video Middleware Software License Agreement
Exhibit L - IP Video Set Top Box Usage Agreement Appendix A - IP
Video Middleware Software License Agreement
Exhibit M - Reports
Exhibit N - Marketing Program
Exhibit O - Customer Service Program
Exhibit P - In-Home Wiring Standards
Exhibit Q - Standard Portal Configuration
Exhibit R - Bandwidth Purchase Agreement
Exhibit S - Telephony Services Purchase Agreement
Exhibit T - OSS/BSS Interface Process and Procedure
Exhibit U - Financial Security Arrangement Agreement
INITIAL PROVIDER NETWORK ACCESS AND USE AGREEMENT
THIS INITIAL PROVIDER NETWORK ACCESS AND USE AGREEMENT ("Agreement"),
is made and entered into effective as of the ____ day of _________, 2004 by and
between Provo City, a municipal corporation of the State of Utah. ("Provo") and
Video Internet Broadcasting Corporation d.b.a. HomeNet Communications of Utah, a
Washington Corporation, on behalf of itself and its affiliates ("Service
Provider").
R E C I T A L S:
Provo desires that residents and businesses within its municipal boundaries have
convenient, quality and competitively priced access to high speed, broadband
fiber optic services, including voice, video and high speed data transmission
and Internet access.
Provo will construct, operate and maintain a managed open access fiber optic
Ethernet network that is capable of supporting multiple private service
providers in offering a variety of competitive high-speed broadband services to
the residences and businesses located in the boundaries of Provo City. The Provo
Network is more particularly defined and described herein.
The Provo Network is a new advanced citywide fiber optic network that is
currently being constructed. The Provo Network will increase competitive access
to consumers of media services by building high performance fiber optic
connections between service provider interconnections and the homes and
businesses of Provo residents. Provo, through a competitive RFP process, has
selected Service Provider to be the Initial Service Provider on the Provo
Network. While Service Provider is solely responsible for providing Retail
Services to Subscribers on the network, Service Provider recognizes that it is
an operational partner that is vital to Provo's ability to successfully fund,
operate, and maintain a true Fiber-to-the-Home (FTTH) network. This Agreement
memorializes the terms and conditions set forth in the RFP, Service Provider's
response to the RFP, and negotiations between Provo and Service Provider and
establishes a long term relationship wherein Service Provider will actively
market to potential Subscribers and provide high quality Retail Services.
Service Provider, who is currently in the process of changing its corporate name
to HomeNet Communications of Utah, desires to enter into this Agreement to use
the Provo Network to provide Retail Services, on a non-exclusive basis, within
the boundaries of Provo.
Provo, on the terms, covenants and conditions contained in this Agreement, is
willing to grant Service Provider the non-exclusive right to use the Network, as
it is completed, to provide Retail Services to potential Subscribers.
In order to promote the success of Service Provider's business, to provide for
stability on the Provo Network, and to remedy technical issues that will arise
during the implementation of the Provo Network, this Agreement grants Service
Provider a maximum rolling six month initial service provider use period as
defined below. All of the proposals received by Provo as a result of the RFP
process requested exclusive service periods, the shortest of which was three
years.
Provo has determined that a rolling six-month-per-node initial service provider
period best balances the goals of allowing Service Provider a reasonable
opportunity to market, promote, and implement its business plan in order to
generate a return on its investment, provides sufficient time to resolve
technical issues that will arise, and enables Provo to provide an open access
Network.
Service Provider is solely responsible for their business model and Subscriber
penetration.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained in this Agreement, Provo and Service Provider mutually
agree as follows:
DEFINITIONS
Unless the context clearly indicates otherwise, certain terms used in
this Agreement shall have the meanings set forth below:
"Agreement" means this Agreement and incorporates any Exhibits,
Appendices, or other attachments referenced herein.
"Business Subscriber" means any Subscriber, which uses the service in,
at or for their place of business.
"Commercial Insertion" means the insertion of commercials on video
channels from the headend or Node huts on video channels via Provo City owned
equipment.
"Content Services" shall mean any and all content or services delivered
over the Network to Subscribers. Including, but not limited to, video services,
voice services and data services.
"Customer Premise Equipment" or "CPE" shall mean any and all equipment
located at Subscriber's premises owned by Provo City and/or the Service
Provider.
"Disaster Recovery Plan" means a disaster of catastrophic magnitude
such as an earthquake or tornado, which disrupts or destroys major Network
elements.
"Effective Date" means the date of execution of this Agreement by Provo
and Service Provider.
"Enhanced Service Provider" shall mean an entity providing Information
Services via a data connection in IP format.
"Ethernet Network Entry Point" shall mean point of transmission ingress
or egress to the Internet.
"Gateway" or "Portal" shall mean the device location which serves as
the demarcation point at a residence or business at which the Provo Network ends
and the Service Provider assumes control for purposes of providing Content
Services. Typically, the Gateway will be a World Wide Packets device similar to
an LE-46 in a residence or business, or a similar device such as an LE-211 in an
MDU or business.
"GRAMA" means the Government Records Access and Management Act, Provo
City Code ss. 3.13.010 et seq., as amended, together with any amendments that
occur after the Effective Date.
"General Availability" means when a Node is released and available for
any and all services providers on the Network.
"Home Passed" means any residential home, multi-dwelling unit, or
business which is passed by the fiber or able to receive service by the
installation of a fiber drop and associated equipment. Multi-Dwelling Units
shall count each apartment or living unit as a separate Home Passed. No home
will be counted as a Home Passed that cannot actually be served by the Network.
"Information Service" shall mean the offering of a capability for
generating, acquiring, storing, transforming, processing, retrieving, utilizing,
or making available information via telecommunications, and includes electronic
publishing, but does not include any use of any such capability for the
management, control, or operation of a telecommunications system or the
management of a telecommunications service.
"Initial Service Provider Use Period" shall mean the initial period of
time which allows for the technical glitches, bugs, and issues to be resolved,
to ensure that the Network is stable for commercial operation, and to allow
Service provider a reasonable opportunity to market, promote, and implement its
business plan in order to generate a return on its investment.
"Market Penetration" shall mean the number, represented by a
percentage of homes passed of Subscribers paying for at least one service
offering from the Service Provider.
"MDU" shall mean multi-dwelling unit.
"MDU Subscribers" shall mean a Subscriber that is paying for Content
Services with the intent that such Content Services will be made available to
persons living in a multi-dwelling unit such as an apartment complex. In
general, but not always, MDU's will be characterized by two or more of the
following characteristics: conforming to a single billing entity for multiple
Subscribers, consisting of four (4) or more Subscriber units, and having
historical status as an MDU with incumbent Cable Television Service Providers.
"Network" or "Provo Network" means and includes, without limitation,
all cables, collocation space, conduits, inner ducts, inside wiring, manholes,
Nodes, optical fiber strands, patch panels, splices, switches, transmitters,
junctions, terminals, internal power sources, access Portals, battery backups,
fault alarm systems, structures, shelters, poles or pole line attachments,
similar equipment, business and operations support systems, and all articles of
personal property owned, leased or used by Provo, directly or indirectly, for
use in connection with its telecommunications system that is used to provide the
Network Services, as any or all of the same may be updated, supplemented,
replaced or expanded, from time to time. Demarcation on the Network shall be
defined as the Service Provider facing port on the router (Ethernet Network
Entry Point) and the Subscriber facing ports on the Portal installed at the
Subscriber premises.
"Network Services" shall mean the content or services provided by Provo
City to service providers on the Network.
"Node" or "Segment" means a logical or geographic area of the Network
serving a sub set of the homes or businesses in the entire Network as consistent
with the phased construction approach.
"OSS/BSS" shall mean the Operational Support Systems and Business
Support Systems which include, but are not limited to, customer management,
billing, customer provisioning, etc.
"Other Service Provider(s)" shall mean those companies and firms that
have been authorized by Provo to provide Content Services to their Subscribers
by another contract on the Provo Network after the termination of the Initial
Service Provider Use Period and according to the process established by Provo
for bringing subsequent service providers onto the Network.
"Network Service Specifications" means the Networks ability to deliver
voice, video, and data services and elements of the Network Lease pricing
schedule(s) detailed on Exhibit "E" and the Service Level Agreements detailed on
Exhibit "F" attached to and incorporated in this Agreement by reference.
"Primary Dial Tone Service" shall mean standard telephone service
including standard E-911 service which routes to the Provo City dispatch center
and delivers data including address.
"Provo" or "Provo City" shall mean the municipal corporation, a
political subdivision of the State of Utah that is The City of Provo, Utah.
"Provo Telecommunications Manager" shall mean the person appointed by
Provo to represent Provo in the Agreement.
"PSTN" means Public Switched Telephone Network.
"Retail Services" means the services that Service Provider offers to
its Subscribers over the Network, described on Exhibit "A" attached to and
incorporated by reference.
"Residential Subscriber" shall mean a Subscriber who is residing in a
single-family residence. In general, but not always, Residential Subscribers
will be characterized by one or more of the following characteristics: (1)
conforming to a single discrete Subscriber entity, (2) conforming to a single
bill for corresponding discrete Subscriber, or (3) being subject to standard
published retail rates.
"Service Credit" shall mean a credit that may be applied to payments
made by the Service Provider for use of the Networks for failure of the Network
performance to meet standards set forth in the Service Level Agreement.
"Service Level Agreement" shall mean the Agreement Provo unilaterally
issues outlining the level of service Provo strives to deliver on the Network.
"Service Metric" shall mean the unit or measure of performance of the
service level of the Network.
"Service Readiness Date" means the date that the Service Readiness Test
is completed.
"Service Readiness Test" means the controlled introduction period prior
to the Service Readiness Date where Provo, with the involvement of Service
Provider, conducts a series of activities to test the readiness of the Provo
Network, as well as designated business and operations processes. Service
Readiness Test is considered completed when Provo notifies Service Provider in
writing that an area or Node is fully tested and ready for activation of
customers.
"Service Provider" or "Initial Service Provider" shall mean Video
Internet Broadcasting d.b.a. HomeNet Communications of Utah.
"Soft-Switch" shall mean a device or software program that provides
services similar to a Class 5 Telephony switch and has the ability to deliver
Information Services, including telephony like services on a data Network in IP
format.
"Subscriber" shall mean a Business Subscriber, Institutional
Subscriber, MDU Subscriber, Residential Subscriber, or any other Subscriber that
pays Service Provider a fee in order to receive one or more Content Services.
"Substantially Complete Network" shall mean that the construction of
the Network is complete and the Service Readiness Tests have been successfully
completed and accepted and the Network is ready for operation.
"Substantially Complete Node" shall mean that the construction of the
Node is complete and that Service Readiness Tests have been completed and the
Node has been activated for Content Services.
"Set Top Box" or "STB" shall mean the device used to convert video
signals from one format to another or act as a tuner to provide a television set
or monitor with a viewable signal. It is typically a device that converts IP
video to analog video for viewing on a television receiver.
"Transport Fees" shall mean the amounts payable by the Service Provider
for use of the Provo Network or Network components (headend, telephony switch,
etc.) as prescribed herein.
DESCRIPTION AND TERM OF AGREEMENT
Network Development. Provo anticipates deploying a citywide Network in multiple
construction phases. The development, design and installation of the Network
shall be the sole responsibility of Provo. Any undertaking to install additional
phases of the Network shall be at the sole discretion of Provo.
Service Provider Retail Services. Following the Service Readiness Date, Service
Provider shall use the Network to provide any or all Retail Services to
Subscribers to the extent the Network is available to such Subscribers, provided
said service is included in Exhibit "A", the Retail Services and Exhibit "E",
the Network Lease Pricing Schedule and a lease rate has been set by Provo,
subject to Section 4.3. Nothing in this Agreement shall require Service Provider
to use the Provo Network exclusively. Provo retains the right to provide
connectivity and services to governmental agencies, public schools, Brigham
Young University (BYU), Utah Valley State College (UVSC), and any entity
providing services that terminate outside the Provo City limits.
Initial Service Provider Responsibilities. During the initial construction,
testing, and activation of the Nodes, there are expected to be technical
glitches, bugs, and interoperability issues on the Network. Through a
competitive RFP process, Provo selected the Initial Service Provider to provide
Content Services on the Network during the Initial Service Provider Use Period
as described in Exhibit "B".
Market Penetration. In Exhibit "C" of this agreement, the Service Provider shall
meet the requirements of the minimum Market Penetration standards. Failure by
the Service Provider to meet the minimum Market Penetration standard, as defined
in Exhibit "C", may result in other Service Providers being added on the
Network.
Term of Agreement. Unless sooner terminated as provided in Article XII of this
Agreement, this Agreement shall have an initial term of four (4) years, with two
(2) additional three-year terms that will each commence automatically unless
either party at its sole discretion elects not to renew this Agreement in
accordance with the following. The initial term ("Initial Term") begins on the
Effective Date and terminates on the fourth (4th) anniversary of the Effective
Date. On expiration of the Initial Term of this Agreement, this Agreement will
automatically renew for an additional period of three (3) years (the "Second
Term") from the fourth (4th) anniversary of the Effective Date unless, at least
one hundred eighty (180) days prior to the expiration of the Initial Term,
either Provo or Service Provider gives written notice to the other of its
intention not to renew this Agreement for a Second Term. On expiration of the
Second Term of this Agreement, this Agreement will automatically renew for an
additional period of three (3) years (the "Third Term") from the seventh (7th)
anniversary of the Effective Date unless, at least one hundred eighty (180) days
prior to the expiration date, either Provo or Service Provider gives written
notice to the other of its intention not to renew this Agreement for a Third
Term.
NETWORK
Network Design. Provo, at its cost and expense, shall be solely responsible for
the design of the Network. The Network shall be designed to deliver Content
Services according to the Network Service Specifications. Provo will provide one
or more Ethernet Network Entry Points. Service Provider may, at its sole
discretion, select one or redundant entry points to connect into the Provo
Network. Service Provider may offer consultation to Provo on Network design
regarding quality and reliability measures, but Provo remains solely responsible
for the Network design regardless of any such Service Provider consultation.
Service Provider shall be responsible for all of Service Provider's related
costs to meet such entry points including, but not limited to, interconnect
costs, collocation space, rack rental, power, and other interfacing costs.
Installation of Network. Provo, at its cost and expense, shall be solely
responsible for the installation of the Network, including, without limitation,
the procurement of any necessary rights-of-ways or easements, and the purchase
and installation of all facilities and equipment required to activate and
operate the Network. Provo has already commenced installation of the first phase
of the Network in the Grandview neighborhood and other areas. Within thirty (30)
days of the Effective Date of this Agreement, Provo will provide a summary of
the Network Build-out Schedule for the Network. The Network Build-out Schedule
is to be attached to and incorporated by reference in this Agreement as Exhibit
"D". On a monthly basis, Provo will provide an update of the Network Build-out
Schedule. Provo may take into consideration recommendations which the Service
Provider may provide on deployment or construction plans that could improve
operational efficiencies or enhance Network revenues. However, Provo remains
solely responsible for the Network installation regardless of any such Service
Provider recommendations.
Network Testing. Provo, at its cost and expense, shall test each Segment of the
Network following its installation to assure operation of the Network in
conformity with the Network Service Specifications. If requested by Service
Provider, Provo shall provide a copy of the testing results to Service Provider.
Following satisfactory testing of a completed Segment of the Network
demonstrating that the Network meets Network Service Specifications, Provo shall
send Service Provider written notice.
Disaster Recovery Plan. Provo will submit to Service Provider a Disaster
Recovery Plan that is reasonably acceptable to Service Provider. Upon Service
Provider's review and approval, which shall not be unreasonably withheld, the
Disaster Recovery Plan shall become Exhibit "G" and shall be binding upon the
Parties as part of this Agreement.
Ownership of Network. Provo shall own all structures, improvements, and
components of the Network. This Agreement shall not confer on Service Provider
any ownership or possessor interest in the Network, or any of its related
facilities, equipment, easements or rights-of-way, or any other property of
Provo.
Intellectual Property. In designing, installing, and operating the Provo
Network, Provo represents that it shall not use intellectual property of any
third party, except under appropriate license from that third party. In no event
shall Service Provider be responsible for obtaining any intellectual property
license or right from a third party to facilitate the design, installation or
operation of the Provo Network. Notwithstanding the foregoing, Service Provider
shall be responsible for obtaining all intellectual property licenses and rights
with respect to Service Provider's own equipment, software, and the like used in
connection with the Provo Network.
Interoperability Requirements. Service Provider understands the importance of
ensuring its products and services support the delivery of Content Services to
Subscribers. To this end, the Service Provider agrees that during the term of
the Initial Agreement, its hardware, products, services, middleware, and
software will function and interoperate with the Network. Service Provider will
remain interoperable with the Network, and will cooperate and use its best
efforts to resolve interoperability issues resulting from third party issues.
Service Provider agrees that prior to the deliver of new releases, software
patches, remedies, or fixes, Service Provider shall conduct tests and
interoperability scenarios within its lab and engineering facility. Provo shall
implement a pre-production Network test environment and will test all vendors'
new releases and updates prior to deployment in the production network.
When Service Provider adds new equipment or changes equipment to interface or
integrate with the Network, Service Provider will be responsible for any
interoperability issues with third party equipment vendors and Provo on the
Network. Service Provider agrees to a) make its products and/or software
available for testing in third party vendor/manufacturers SQA labs at no charge,
and b) use its best efforts to modify applicable Service Provider
products/software to achieve interoperability with third party products and
software.
3.8 IP Video Middleware and Set Top Box. Provo will determine the
standard IP video middleware and set top boxes to be used on the Network. Any
deviation from Provo's standard middleware and set top boxes by the Service
Provider must be approved as per Exhibit "H". Should the Service Provider no
longer operate on the system, and they are using nonstandard middleware, the
middleware will be licensed to Provo as outlined in Exhibit "K".
PRICING AND PAYMENTS
Network Services. In consideration of Provo's provision of the Network to be
used by Service Provider for Content Services, Service Provider shall pay to
Provo the prices and fees identified on the Network Lease Pricing Schedule(s)
attached to and incorporated by reference in this Agreement as Exhibit "E."
Service Provider will provide a detailed activity report, by Subscriber, to
Provo, by the 5th of each month, for Content Services provided to customers in
the previous month. Provo will respond to Service Provider with any corrections
by the 10th of said month. Service Provider will make payment of Transport Fees
to Provo by 15th of said month. If Service Provider fails to make any payments
for undisputed charges when due, Provo may collect interest on unpaid amounts at
the rate of one percent (1%) per month until Service Provider is current on all
payments for undisputed charges. Within 60 days of the Effective Date of this
Agreement, Provo and Service Provider will agree upon a financial arrangement
whereby payment from Subscribers will be secure for both parties. This process
will be added to this Agreement as Exhibit "U".
Disputed Charges: In the event Service Provider disputes the amount of Transport
Fees to be paid to Provo, Service Provider will (i) pay all charges not
disputed, and (ii) within thirty (30) days notify Provo of the dispute in
writing, providing the billing identification, and an explanation of the issue
in dispute. Provo shall respond in writing within thirty (30) days of receipt,
whereupon Service Provider shall have an additional fifteen (15) days to respond
to any corrections or explanation. Payment will not prejudice Service Provider's
right to dispute charges, so long as they are disputed in the manner and within
the time specified in this Section. The parties will cooperate in good faith to
resolve any such disputes within sixty (60) days from Provo's receipt of notice
of dispute. If the parties cannot resolve the dispute within sixty (60) days,
either party may request an independent audit. If a disputed amount is
determined to be a valid charge, Service Provider will pay the cost of the audit
and the disputed amount, plus interest at an annual rate of 12%, within ten (10)
calendar days of such determination. If the disputed amount is determined to be
invalid, Provo shall pay the cost of the audit and if Service Provider has paid
the disputed amount, Provo shall return the disputed amount, plus interest at an
annual rate of 12%, within ten (10) calendar days of such determination.
Network Lease Rates: Provo shall not increase prices listed on Exhibit "E" for a
period of one year from the Service Readiness Date of this Agreement unless the
Service Provider increases retail rates. In the event that retail rates are
increased by the Service Provider, Provo shall not increase the lease rate by
more than five percent (5%). Provo and Service Provider may annually thereafter
negotiate in good faith to change the prices and terms listed on Exhibit "E" at
least sixty (60) days prior to the end of the then current annual period. Such
good faith negotiation shall take into account the pricing charged by Provo to
its Other Service Provider(s) (taking into account volumes of services
purchased, discounts, or credits) that are more than or less than the then
applicable charges for the corresponding services used by Service Provider under
this Agreement. If mutually agreed to, such negotiated prices will remain in
effect for a minimum of twelve (12) months, subject to the following condition.
If at any time during this Agreement Provo offers Network Services or Customer
Premises Equipment ("CPE") to Provo's Other Service Provider(s) for charges
(taking into account volumes of services purchased, discounts, or credits) that
are less than the applicable charges for the Retail Services and CPE offered by
Provo under this Agreement, then the Parties shall agree to an appropriate
reduction of the prices for the corresponding Retail Service or CPE under this
Agreement such that Provo's prices offered to Service Provider are no less
favorable than those offered by Provo to such Other Service Provider(s). Service
Provider's obligation to pay Provo is not contingent on whether Service Provider
actually received payment for the services it provided to Subscribers. Service
Provider is responsible for its own collection of accounts receivable, the
non-collection of which shall not impute any liability to Provo, nor relieve
Service Provider of its obligations under this Agreement.
4.4 Local Fees. Service Provider shall be responsible for and pay the
correct local tax rates, franchise fees, taxes, and charges on Subscribers.
4.5 Other Taxes and Fees. Service Provider shall be solely responsible
for the collection and remittance of all applicable federal, state and local
taxes, including, without limitation, income taxes, sales taxes, privilege
taxes, or universal service fees as applicable.
4.6 Discount Pricing for Multi-year Subscribers. Service Provider may
request long-term discount pricing for multi-year Subscriber contracts. Within
thirty (30) days of Service Provider entering into each such long-term
Subscriber contract, Service Provider shall provide Provo written verification
of each such contract.
4.7 Purchase of iProvo Customer Assets. The Service Provider shall
purchase from Provo the iProvo Customer Assets as described in Exhibit "I",
iProvo Asset Purchase Agreement attached to and incorporated in this Agreement.
4.8 Purchase of Provo Cable Customer Assets. The Service Provider shall
purchase from Provo the Provo Cable Customer Assets as described in Exhibit "J",
Provo Cable Asset Purchase Agreement attached to and incorporated in this
Agreement.
4.9 Letter of Credit. As surety to Provo for payment by the Service
Provider of all transport fees and other charges set forth in this Agreement,
Service Provider shall provide for the benefit of Provo an irrevocable Letter of
Credit.
The term of the Letter of Credit shall be the term of this Agreement, including
any renewal period. The Letter of Credit shall be issued by a bank and contain
terms and conditions acceptable to Provo. Prior to seeking recovery under this
Letter of Credit, Provo shall notify Service Provider in writing of the default
giving rise to Provo's claim for recovery under this section. Service Provider
shall have thirty (30) days to cure the default. Upon Service Provider's failure
to cure, Provo may immediately draw on the Letter of Credit and in addition
pursue any other remedy available under Article XIII.
The Letter of Credit shall be similar to the form contained in Exhibit
"U", in an amount agreed to by the parties and shall be attached to and made
part of this Agreement.
NETWORK OPERATIONS
Network Control. Provo shall have sole control over the day-to-day operation of
the Network, including managing the telecommunications platform and the
functionalities available over the Network. Provo shall provide primary
management and control for the Network from its Network operations center.
Service Provider and Provo shall cooperate with each other to coordinate service
turn-ups and Retail Service deployment. The Provo Network shall meet the Service
Level Agreements specified in Exhibit "F." If the Service Metrics for Retail
Services specified in Exhibit "F" are not met, a Service Credit will apply as
specified.
Maintenance Responsibilities. During the term of this Agreement, and any
extension thereof, Provo, at its cost and expense, shall be responsible for
maintenance of the Network. Provo shall at all times maintain the Network in
good working order and repair in a safe condition, and in conformity with the
Network Service Specifications and all applicable laws and regulations.
Troubleshooting. Provo shall respond to Network issues in accordance with the
Provo responsibilities set forth in Sections 5.4 and 5.5 of this Agreement.
Customer Service. Provo shall maintain a call center or network operations
center accepting calls from the Service Provider to resolve customer service
inquiries involving repair, maintenance or other contact with the Network. Provo
shall establish procedures for tracking trouble reports and escalating
resolution of inquiries as provided in Section 5.5 of this Agreement.
Repair Timing. Provo shall restore damaged or malfunctioning portions of the
Network in accordance with the Service Level Agreements specified in Exhibit
"F," attached to and incorporated in this Agreement by reference. Provo
acknowledges the importance of uninterrupted operation of the Network and shall
arrive at repair sites with necessary personnel, equipment, and materials and
restore Network services in accordance with Exhibit "F." To the extent repairs
are required to the Network to fix damage caused by Service Provider, Service
Provider shall pay the repair costs. To the extent the damage is caused by any
other Subscriber, whether for Retail Services or Network services, Provo shall
recover the expense of the repair from the Subscriber, and if the Subscriber is
Service Provider's Subscriber, Service Provider will assist Provo by directly
billing the Subscriber for such expenses. Service Provider is not liable for
such damages if the Subscriber fails to cover the expenses. Provo may also
directly bill Service Provider's Subscribers for any such damages.
Subscriber Connection to Network. Provo shall provide Network services to enable
Service Provider to connect its Subscribers to the Network. To the extent that
Service Provider relies on the Provo Network, the Service Provider's connection
service order and/or other Subscriber agreement with Subscriber shall contain in
writing the following highlighted covenants:
Property Access License. "Subscriber understands that Service Provider's
delivery of services requires Provo to connect its Network to Subscriber's
premises. Subscriber grants Provo an irrevocable, non-exclusive license to
access Subscriber's property to install and maintain fiber optic cable(s), an
electronic access Portal, and any other equipment, to Subscriber's premises.
Unless otherwise provided by law, the fiber optic line, electronic access
Portal, and any other equipment shall remain Provo's property. For the purposes
of this provision, Provo is a third party beneficiary under this agreement. This
provision shall survive the termination of this agreement." Damage Covenant.
"Subscriber shall not damage the Provo Network, including, but not limited to,
fiber optic cable(s), electronic access Portal(s), and any other equipment.
Subscriber shall be liable to Provo directly, and Provo may obtain reimbursement
directly from Subscriber, for such damages, including enforcement and court
costs, and attorney fees. Service Provider shall directly bill Subscriber for
any such damages and transfer any funds recovered to Provo. Provo may also
directly bill Service Provider's Subscribers for any such damages. For the
purposes of this provision, Provo is a third party beneficiary under this
agreement. This provision shall survive the termination of this agreement."
Resale Prohibited. "Unless expressly permitted in writing by Provo City,
Subscriber shall not resell any service, product, or bandwidth provided via the
Network. For the purposes of this provision, Provo is a third party beneficiary
under this agreement. Provo City may require Service Provider to limit or
discontinue service to any customer in violation of this agreement.'
Transmitting or Sharing Prohibited. "Subscriber shall not transmit,
re-distribute, or share in any manner bandwidth, Internet access, products, or
services. Secure wireless transmission of a Subscribers bandwidth or content on
the premises of a Subscriber solely for the use of that Subscriber is permitted
as long as no unauthorized connection to the bandwidth or use of content can be
made by unauthorized users. For the purposes of this provision, Provo is a third
party beneficiary under this agreement. Provo City may require Service Provider
to limit or discontinue service to any customer in violation of this agreement."
Copyrighted Material. "Subscriber agrees not to violate copyright law. Posting
or receiving copyrighted material via email, list servers, ftp transfer, or any
other electronic or digital means without permission of the copyright owner is
prohibited. For the purposes of this provision, Provo is a third party
beneficiary under this agreement. Provo City may require Service Provider to
limit or discontinue service to any customer in violation of this agreement.
Subscriber shall be liable to Provo directly, and Provo may obtain reimbursement
directly from Subscriber, for damages for violation of this covenant, including
enforcement and court costs, and attorney fees."
Subscriber Agreement Availability. Upon request, Service Provider shall provide
a copy of any and all Subscriber connection service orders and/or Subscriber
agreements to Provo.
In-Home Wiring: The Parties may mutually enter into a separate agreement for
in-home wiring to provide a more convenient installation experience for the
Subscriber. For the purpose of this Agreement, a minimum standard and guideline
for all in-home wiring done by the Service Provider or its agent or contractor
shall be developed as Exhibit "P", "In-Home Wiring Standards", within sixty (60)
days of the Effective Date. This standard will apply to all service providers on
the Network and take into consideration both the cost and time required for
installations while focusing on a high level of craftsmanship, customer care,
and technical quality.
Portal Configuration. All Portals deployed by Provo in the Network will have a
standard Portal configuration as shown in Exhibit "Q", Standard Portal
Configuration. Provo shall have the right at its sole discretion to change
Portal make, model, and type as long as the new Portals deliver substantially
the same services and quality as the existing Portals and conform to industry
standards. Portal configuration may change to reflect the structure of the new
Portals as needed.
Bandwidth Purchase Agreement. Provo may elect to purchase Internet bandwidth in
large blocks and make this bandwidth available to Service Providers. Should
Service Provider agree to use this bandwidth it will be covered by the terms
found in Exhibit "R", Bandwidth Purchase Agreement.
Telephony Services Purchase Agreement: Service Provider will purchase a
Soft-Switch under the terms and conditions stated in Exhibit "S", Telephony
Services Purchase Agreement.
OSS/BSS Interface: The Service Provider and Provo will both make best efforts to
ensure that the interface and passing of data required for the smooth operation
of the Network be completed within sixty (60) days of the Effective Date. The
OSS/BSS process and procedures shall be made a part of this Agreement as Exhibit
"T", OSS/BSS Interface Process and Procedures.
MARKETING
Service Provider Marketing Efforts. Service Provider shall use its best efforts
to aggressively market its Services and the Network to acquire Subscribers, and
maintain good business relationships with Subscribers. Service Provider shall
develop a Marketing Program to be included as Exhibit "M" that takes into
account marketing costs, expected Retail Services margins, and other factors
that are typically considered suitable in good faith to acquire and retain
customers. The Marketing Program shall be reviewed and approved by Provo which
approval shall not be reasonably withheld. The first year Marketing Program will
be submitted to Provo within thirty (30) days of the Effective Date, and will be
incorporated into and made a part of this Agreement as Exhibit "M". Each
quarter, the Service Provider shall submit an updated Marketing Program to
represent a rolling one (1) year Marketing Program.
Marketing Program. The Service Provider's Marketing Program shall have, as a
minimum, the following details, duties, requirements, and activities. Any
deviation from the minimum requirements must be approved in writing by Provo.
The total budget by fiscal quarter per home passed. Development of an
identifiable local brand.
A web site with sales and customer service elements including, but not limited
to, the following elements: Product information. Product pricing.
A map showing areas in which service is currently available. Local programming
and /or community content currently available on the Network. New Customer
Information Packets (converter usage info, VOD ordering, etc.). Front office
hand-outs (channel line-up, rate card, etc.).
"Incentives-to-Switch" programs. Incentive programs may include, but are not
limited to, the following elements: Free installation. Free month of service for
referral.
Give-aways. Discounts or savings on rates.
A marketing campaign which targets college students.
Neighborhood campaigns including, but not limited to, open houses, block
parties, and coordination with neighborhood chair-persons, where possible.
Community Wide Visibility. The community at large needs to know that the Service
Provider is a telecommunications provider in Provo. Activities could include,
but are not limited to, billboards, advertisements in local newspapers, and
participation in community events. At least one element from each category below
is to be used each quarter:
(1) Door hangers
(2) Telemarketing (as allowed by law)
(3) Direct mail
(4) Door to door sales
Network Service Claims. Service Provider shall not make any representations or
statements regarding the Provo Network that are inconsistent with
representations or statements made in this Agreement.
Service Provider's Use of the Provo Network Brand Name and/or Logo. Service
Provider may use the Provo Network brand name (currently iProvo) and/or logo in
Service Provider's advertisements and/or press releases; only as provided by
Provo, and in accordance with Provo's brand use guidelines. Provo shall provide
the guidelines to Service Provider from time to time. Any press releases using
The Provo Network brand name and/or logo must be mutually reviewed by the
Parties prior to any publication. Such consent shall be timely and not
unreasonably withheld.
Corporate Citizenship. Service Provider agrees to participate in the local
community through reasonable corporate donations of time, money, or other
resources to foster good local community relations.
Interaction with Provo's Telecommunications Manager. At least monthly, or as
often as mutually agreed, during the first year after the Effective Date, a
Service Provider corporate executive will meet in person with Provo's
Telecommunications Manager and accompanying staff (including interested City
Administration, Telecom Advisory Board, and Municipal Council members). The
Service Provider may from time to time be required to give an accounting of
their services to other boards or councils as needed. As defined in Exhibit "M",
Service Provider shall be required to submit performance reports.
Provo Marketing Efforts and Mutually Acceptable Press Releases. During the term
of this Agreement, Provo shall have the right to advertise the existence of the
Network, and to use Service Provider's company names in advertisements solely to
disclose that Service Provider offers Retail Services on the Network. The
Parties must mutually review any press releases using Service Provider's company
name prior to publication. Such consent shall be timely and not unreasonably
withheld.
Service Offerings. Where the Network is available, Service Provider shall offer
its Retail Services to all potential Subscribers consistent with Service
Provider's marketing and acquisition plan.
Internet Content Filtering. The Service Provider shall include at least one
content filter of Service Provider's choice that a Subscriber may elect to use
at no additional charge. The Subscriber will be solely responsible for the use
of the content filter. Service Provider shall not be required to provide support
or service for such content filter. Service Provider shall not be liable for any
express or implied warranties or failure of the filter to screen any particular
content.
CUSTOMER SERVICE
Customer Service Program. Throughout the term of the Agreement and any
extensions thereof, Service Provider shall have customer service requirements
that ensure the highest level of customer service. The Service Provider shall
develop a "Customer Service Program" to be included as "Exhibit "N" that takes
into account costs, services offered by other companies providing similar
services, and other factors that are typically considered in good faith to
provide a high level of customer service. The Customer Service Program will be
submitted to Provo within thirty (30) days of the Effective Date of this
Agreement. The Customer Service Program shall be reviewed and approved by Provo,
which approval shall not be reasonably withheld.
Minimum Requirements for the Customer Service Program. The Customer Service
Program shall address and have, as a minimum, the following details, duties,
requirements, and activities. These requirements are in addition to those
required by Provo City Ordinance and/or by franchise agreement with Provo City.
If there are any conflicts among these requirements, the Service Provider will
be required to adhere to the more stringent requirement. Any deviation from
these minimum requirements shall be approved in writing by Provo. Complaint
resolution process. Demonstrate the method and process to handle and escalate
customer issues and problems. Subscribers with complaints will be contacted
within two (2) working days from giving notice. Call response time. Ninety
percent (90%) of the calls will be answered in less than thirty (30) seconds.
Less than three percent (3%) of the calls will receive a busy signal.
Scheduling of Subscriber service. Within seven (7) days of the Subscriber's
request for service, ninety-five percent (95%) of all installations shall be
completed subject to the availability of Network access at the Subscriber's
premise.
Local office hours. Office hours shall be printed on each Subscriber's bill as
well as posted on the Service Provider's website. Company identification and
uniform policy. All employees representing the Service Provider in the field
shall be identified both by uniform (ie. shirt with company logo) and shall
carry with them a company photo identification card.
Use of protective footwear. Service Provider's employees entering a Subscribers
place of residence or business shall be required to wear protective footwear.
Emergency Response Time. Within the Service Provider's control, ninety-five
percent (95%) of service interruptions shall be corrected within twenty-four
(24) hours. Ninety-five percent (95%) of all other service problems shall be
corrected within thirty-six (36) hours.
Local Office. The Service Provider shall maintain a Provo office with a call
center to field all front-line Subscriber service inquiries from Service
Provider's Subscribers. Service Provider shall be responsible for and have
personnel and resources available to address and rectify Subscriber service
inquiries that do not involve the Network.
Truth in Bandwidth. The Service Provider will ensure that the Internet
connection data rate is a reasonable approximation of the data rates it is
advertising and selling to Subscriber. To help ensure that Subscriber will
typically see the expected (based upon advertising and package they subscribe
to) data rate, Service Provider will not over Subscriber Internet bandwidth at a
rate that exceeds fifty (50) users (on a 1.5 Mb) connection per 1.5 Mb
connection to the Internet. If 50 customers were sold a 10 Mb internet
connection, Service Provider must have a 10 Mb internet connection.
REPRESENTATIONS AND WARRANTIES
Representations and Warranties of Provo. Provo represents and warrants to
Service Provider as follows: Authority. Provo is a municipal corporation of the
State of Utah, and possesses all requisite power and authority to enter into and
to perform in accordance with the terms, covenants, and conditions contained in
this Agreement.
Restrictions. The execution and delivery of this Agreement, any instrument or
document required by this Agreement, and the consummation of the transactions
contemplated by this Agreement will not violate any restriction contained in
Provo's organizational documents, or any statute, ordinance, law, order, ruling,
certificate or license, regulation, bond, judgment or demand of any court,
regulatory agency, or other tribunal to which Provo is subject.
Binding Obligation. This Agreement, when duly executed by Provo, shall
constitute a valid, legal, and binding obligation of Provo, and shall be
enforceable in accordance with its terms. The individual executing this
Agreement on behalf of Provo has been duly authorized to sign this Agreement.
Compliance with Government Requirements. To the best of its knowledge, Provo has
not violated any rule, order, or regulation issued by any government authority
with respect to any license, permit, or franchise which may materially and
adversely affect Provo's right or ability to execute, and perform in accordance
with the terms of, this Agreement.
Proceedings. No litigation or government proceeding is pending or threatened
which might adversely affect this Agreement, the transactions contemplated by
this Agreement, or Provo's rights under, or ability to perform pursuant to the
terms of, this Agreement.
Financing Restrictions. This Agreement does not violate any terms, covenants,
conditions, or restrictions in any mortgages, bonds, and other indentures of
Provo. Resources and Capacity. Provo possesses or will possess, before and
continuing at all times after Service Provider begins using the Network,
sufficient financial, managerial, and technical capacity and resources to
perform its obligations under the terms of this Agreement.
Representations and Warranties of Service Provider. Service Provider represents
and warrants to Provo as follows: Authority. Service Provider is a corporation,
duly organized, validly existing and in good standing under the laws of the
State of Washington, and possesses all requisite power and authority to enter
into and to perform in accordance with the terms, covenants, and conditions
contained in this Agreement. Restrictions. The execution and delivery of this
Agreement, any instrument or document required by this Agreement, and the
consummation of the transactions contemplated by this Agreement will not violate
any restriction contained in Service Provider's organizational document, or any
statute, ordinance, law, order, ruling, certificate or license, regulation,
judgment or demand of any court, regulatory agency or other tribunal to which
Service Provider is subject.
Binding Obligation. This Agreement, when duly executed by Service Provider,
shall constitute a valid, legal, and binding obligation of Service Provider, and
shall be enforceable in accordance with its terms. The individual executing this
Agreement on behalf of Service Provider has been duly authorized to sign this
Agreement. Resources and Capacity. Service Provider possesses and shall at all
times maintain sufficient financial, managerial, and technical capacity and
resources to perform its obligations under the terms of this Agreement.
Compliance with Government Requirements. To the best of its knowledge, Service
Provider has not violated any rule, order, or regulation issued by any
government authority with respect to any license, permit, or franchise which may
materially and adversely affect Service Provider's right or ability to execute,
and perform in accordance with the terms of, this Agreement. Service Provider
agrees that they will obtain all necessary and required federal, state, and
local permits, licenses, and franchises.
Proceedings. No litigation or government proceeding is pending or threatened
which might adversely affect this Agreement, the transactions contemplated by
this Agreement, or Service Provider's rights under, or ability to perform
pursuant to the terms of, this Agreement.
Financing Restrictions. This Agreement does not violate any terms, covenants,
conditions, or restrictions in any mortgages, bonds or other indentures of
Service Provider.
Disclaimer of Warranties. Except as expressly stated in this Agreement, Provo
makes no warranties regarding the Network, express or implied, including, but
not limited to, any implied warranties of merchantability or fitness for a
particular purpose, or that the Network will operate error-free or without
interruption.
COVENANTS
Conduct of Business. Provo will install and support the Network in accordance
with the Network Service Specifications required by this Agreement, will safely
operate the Network, and will use its best efforts to comply in all material
respects with applicable laws, regulations, and government orders applicable to
the Network and its operation. Service Provider will use its best efforts to
comply in all material respects with applicable laws, regulations, and
government orders applicable to Service Provider's use of the Network to provide
Retail Services.
GRAMA Compliance.
Provo is subject to the disclosure requirements of GRAMA. Except as otherwise
provided in this Agreement, and specifically excluding the material listed in
Subsections 9.2(a) and (b), Provo generally considers agreements, including this
Agreement, contract documents, and all accompanying material to be public and
subject to disclosure. A written claim of confidentiality and a concise written
statement of reasons supporting the claim must accompany any material considered
by Service Provider to be proprietary. Blanket claims that this entire Agreement
or entire contracts are confidential will be denied by Provo. Provo cannot
guarantee that any information will be held confidential.
In addition to the business confidentiality determination described in Section
9.2 of this Agreement, under Section 3.13.110 of GRAMA, Service Provider may
make a claim that other records are subject to the business confidentiality
provisions. Upon receipt of a request, Provo will determine whether the material
should be classified as public or protected, and will notify Service Provider of
such determination. Provo agrees to hold all information classified as
"protected" in confidence and to protect it from public disclosure to the
greatest extent permitted by Utah law. Provo may disclose such information to
the extent required by law, however, Provo shall provide Service Provider prompt
notice of a request for disclosure of such protected information and shall
cooperate with Service Provider in seeking the issuance of a protective order,
at Service Provider's sole expense. Upon receipt by either Party of a request to
release the other party's "protected" information, the Party receiving such
request shall promptly notify the other party of the request, whereupon the
other Party shall be solely responsible for opposing the release of the
"protected" information. The holder of the "protected" information will assist
in such opposition at the other party's expense.
Service Provider is entitled under GRAMA to appeal an adverse determination
regarding the classification of information. Provo is not required to notify
Service Provider of a request for non-protected information, and will not
consider a claim of business confidentiality unless Service Provider's claim of
business confidentiality is made on a timely basis and in accordance with GRAMA.
Provo Confidentiality. Provo believes that all information pertaining to the
Network, the Agreement, and Network information subsequently submitted to
Service Provider by Provo constitute trade secrets, are otherwise commercially
sensitive, or relate to general security or public safety information.
Disclosure of such information can be reasonably expected to result in unfair
injury to Provo. Service Provider shall not disclose any information pertaining
to the Network, Network operations, Network Service Specifications, the terms,
covenants and conditions of the Agreement, without Provo's prior written
authorization.
Use of Network. Provo shall only use the Network to provide Network Services.
Privacy of Customer Information. Service Provider and Provo shall comply with
all applicable federal, state, and local laws, regulations and ordinances
regarding the protection and use of customer information.
Electronic Surveillance in Support of Law Enforcement. The parties acknowledge
that Service Provider and Provo from time to time may be required to provide a
Law Enforcement Agency (LEA) with the capability to conduct electronic
surveillances on the Subscribers. Where Provo is providing the underlying
Network facilities for on-net local voice calls between Service Provider's
customers on The Provo Network, Provo agrees to provide Service Provider access
to any necessary elements of its Network required to comply with federal, state
and local electronic surveillance requirements; provided, however, that the
implementation and provision of any such electronic surveillance with respect to
the Subscribers shall be Service Provider's sole responsibility and implemented
by Service Provider's employees or agents, unless otherwise required by law or
to fulfill Service Provider's compliance with such law. The Parties further
agree no later than one hundred and eighty (180) days after the Effective Date
to document a method & procedure that fully sets forth the roles,
responsibilities, methods, and procedures of the Parties for handling security
and electronic surveillance issues related to the Subscribers. On those
occasions when Service Provider receives a court order that requires the
assistance of Provo to capture or monitor on-net activity, and recognizing the
non-disclosure obligations that may be contained therein, Service Provider shall
advise the issuing authority that Provo's assistance is required and the issuing
authority shall direct and serve the court order upon Provo. If either Provo or
Service Provider receives an initial inquiry from the LEA, prior to the issuance
of a court order, which will require the assistance of the other party to
capture or monitor on-net activity, that Party shall request the LEA to name and
serve both Provo and Service Provider.
Quality of Service Standards. In addition to requirements in this Agreement,
Service Provider shall comply with all applicable federal, state, and local
laws, regulations and ordinances regarding quality of service standards for all
of its Retail Services.
Damage or Destruction. In the event any Segment of the Network is damaged or
destroyed, Provo or Service Provider shall give immediate notice to the other
party of the occurrence of the damage or destruction. Provo and Service Provider
shall cooperate with each other to reroute or substitute services delivered by
means of the affected portion of the Network to allow for continued and
uninterrupted service to customers. To the extent that the disruption or damage
is to the Network or facilities that Provo controls, Provo shall have the sole
obligation to repair and shall use its best efforts to restore or reroute
service as quickly as possible so that the disruption to the Network is minimal.
Service provider shall be responsible for making timely repairs to all system
components that it owns or controls.
Service Provider Government Approvals. Service Provider has, or will have prior
to providing Retail Services by means of the Network, all necessary government
approvals to enter into and perform its obligations under this Agreement, and,
if applicable, shall comply with all rules and regulations of the Utah Public
Service Commission and the Federal Communications Commission. Service Provider
shall furnish copies of all such approvals upon request of Provo.
Provo Government Approvals. Provo has, or will have prior to providing Network
Services by means of the Network, all necessary government approvals to enter
into and perform its obligations under this Agreement, and, if applicable, shall
comply with all rules and regulations of the Federal Communications Commission
as well as any other applicable federal and state authorities. Provo shall
furnish copies of all such approvals upon request of Service Provider.
Insurance. During the term of this Agreement, Service Provider and Provo shall
at all times, at their own cost and expense, procure and maintain insurance or
some other type of comparable security as necessary to cover their respective
duties assumed under this Agreement, including workers compensation, commercial
general liability and property damage insurance, as well as such other insurance
as may be required by law. Provo and Service Provider shall require their
respective contractors, subcontractors and agents to maintain adequate insurance
coverage to respond to the types and degree of risk posed by the work performed
by such parties. The Parties shall have the right to self-insure. Service
Provider shall furnish to Provo Certificates of Insurance verifying that such
insurance has been obtained. Such certificates will provide that Provo will
receive at least thirty (30) days prior written notice of any material change
in, cancellation of, or non-renewal of such insurance.
Regulatory Reporting Requirements. Provo will provide Service Provider all
information and documents, within Provo's control, as necessary to permit
Service Provider to comply with regulatory reporting requirements.
ASSIGNMENT AND SECURITY INTERESTS
Assignment by Service Provider. Service Provider shall not have the right to
assign its interest in this Agreement unless the transferee is an entity: (a)
that purchases all or substantially all of Service Provider's assets required
for material performance under the terms of this Agreement and that assumes all
of Service Provider's obligations under this Agreement; or (b) that is Service
Provider's successor by merger, restructure or recapitalization or an affiliate
of Service Provider (including, without limitation, all equity holders of
Service Provider). Any such assignment shall require the prior written consent
of Provo, which shall not be unreasonably withheld.
LIABILITY AND INDEMNIFICATION
Provo Indemnity. To the extend permitted by Utah law, Provo shall indemnify,
defend and hold harmless Service Provider, its officers, agents and employees of
and from any claim, demand, lawsuit, or action of any kind for injury to or
death of persons, including, but not limited to, Subscribers, employees of Provo
or Service Provider, and damage or destruction of property, including, but not
limited to, property of Subscribers, Provo or Service Provider, arising out of:
(a) negligent or willful acts or omissions of Provo, its agents, officers,
directors, employees or contractors; (b) the exercise by Provo of the privileges
or rights given herein; and (c) the performance by Provo of any of its
obligations under this Agreement. The obligation to indemnify shall extend to
and encompass all costs incurred by Service Provider in defending such claims,
demands, lawsuits or actions, including, but not limited to, attorney, witness
and expert witness fees, and any other litigation related expenses. Provo shall
pay any cost that may be incurred by Service Provider in enforcing this
indemnity, including reasonable attorney fees. Provo's obligations pursuant to
this Section 10.1 shall not extend to claims, demands, lawsuits or actions for
liability attributable to the negligence or willful action of Service Provider,
its directors, officers, employees, contractors, successors or assigns.
Service Provider Indemnity. Service Provider shall indemnify, defend and hold
harmless Provo, its officers, agents and employees of and from any claim,
demand, lawsuit, or action of any kind for injury to or death of persons,
including, but not limited to, Subscribers, employees of Service Provider or
Provo, and damage or destruction of property, including, but not limited to,
property of Subscribers, Service Provider or Provo, arising out of: (a)
negligent or willful acts or omissions of Service Provider, its agents,
officers, directors, employees or contractors; (b) the exercise by Service
Provider of the privileges or rights given herein; and (c) the performance or
failure to perform by Service Provider of any of its obligations under this
Agreement. The obligation to indemnify shall extend to and encompass all costs
incurred by Provo in defending such claims, demands, lawsuits or actions,
including, but not limited to, attorney, witness and expert witness fees, and
any other litigation related expenses. Service Provider shall pay any cost that
may be incurred by Provo in enforcing this indemnity, including reasonable
attorney fees. Service Provider's obligations pursuant to this Section 10.2
shall not extend to claims, demands, lawsuits or actions for liability
attributable to the negligence or willful action of Provo, its directors,
officers, employees, contractors, successors or assigns.
Intellectual Property Indemnity by Provo. Provo shall indemnify, defend, and
hold harmless Service Provider from and against any loss, cost, expense or
liability arising out of a claim that Provo's use, pursuant to the terms of this
Agreement, of The Provo Network infringes, misappropriates or otherwise violates
the intellectual property rights of any third party. Provo will promptly inform
Service Provider of any pending or threatened intellectual property claims
relating to the Network of which Provo is aware, and will provide Service
Provider periodic and timely updates of such notification so that Service
Provider receives maximum notice of any intellectual property risks that it may
want to address. This indemnification shall only apply to intellectual property
third party claims solely related to the Provo Network and not related to
intellectual property third party claims covering a combination of the Provo
Network with Service Provider's equipment, software and the like.
Intellectual Property Indemnity by Service Provider. Service Provider shall
indemnify, defend, and hold harmless Provo from and against any loss, cost,
expense or liability arising out of a claim that Service Provider's use of its
own equipment, software, and the like used by Service Provider in connection
with the Provo Network, infringes, misappropriates or otherwise violates the
intellectual property rights of any third party. Service Provider will promptly
inform Provo of any pending or threatened intellectual property claims relating
to Service Provider's use of its own equipment, software and the like used by
Service Provider in connection with the Provo Network, of which Service Provider
is aware, and will provide Provo periodic and timely updates of such
notification so that Provo receives maximum notice of any intellectual property
risks that it may want to address. This indemnification shall only apply to
intellectual property third party claims solely related to Service Provider's
equipment, software and the like and not related to intellectual property third
party claims covering a combination of Service Provider's equipment, software
and the like with the Provo Network.
No Consequential Damages; Direct Damages. Notwithstanding any provision in this
Agreement to the contrary, neither Provo, Service Provider nor their respective
agents, employees, contractors or subcontractors shall be liable to the other
for incidental, consequential, reliance, special, punitive or indirect damages
arising out of this transaction whether by reason of contract, indemnity, strict
liability, negligence, breach of warranty or from breach of this Agreement, and
regardless of whether the Parties knew of the possibility that such damages
could result, each Party hereby releases the other Party of such claims.
NOTHING CONTAINED IN THIS SECTION 10.5 SHALL LIMIT PROVO'S OR SERVICE PROVIDER'S
LIABILITY TO THE OTHER FOR (i) WILLFUL OR INTENTIONAL MISCONDUCT (INCLUDING
GROSS NEGLIGENCE) OR (ii) BODILY INJURY, DEATH OR DAMAGE TO TANGIBLE REAL OR
TANGIBLE PERSONAL PROPERTY PROXIMATELY CAUSED BY PROVO'S OR SERVICE PROVIDER'S
NEGLIGENT ACT OR OMISSION OR THAT OF THEIR RESPECTIVE AGENTS, EMPLOYEES,
CONTRACTORS OR SUBCONTRACTORS, NOR SHALL ANYTHING CONTAINED IN THIS SECTION 10.5
LIMIT THE PARTIES' INDEMNIFICATION OBLIGATIONS, AS SPECIFIED IN THIS AGREEMENT.
FOR PURPOSES OF THIS SECTION, AMOUNTS DUE AND OWING TO SERVICE PROVIDER PURSUANT
TO THE ATTACHED SERVICE LEVEL AGREEMENTS IN EXHIBIT "E" (SERVICE CREDITS AND
SERVICE METRICS) AND DUE AND OWING TO PROVO PURSUANT TO ARTICLE IV OR THE
LIQUIDATED DAMAGES PROVISIONS OF EXHIBIT "A" SHALL NOT BE CONSIDERED TO BE
INDIRECT, INCIDENTAL, CONSEQUENTIAL, RELIANCE, PUNITIVE OR SPECIAL DAMAGES. THIS
LIMITATION ON DAMAGES SHALL APPLY TO ALL SUBSCRIBERS AND A HIGHLIGHTED COPY OF
THIS LIMITATION ON DAMAGES SHALL BE PRINTED IN EVERY SERVICE PROVIDER'S
CONNECTION SERVICE ORDER AND/OR OTHER SUBSCRIBER AGREEMENT WITH SUBSCRIBER.
SERVICE TO THE SUBSCRIBER IS CONDITIONED UPON SUBSCRIBER'S AGREEMENT TO THIS
LIMITATION ON DAMAGES.
In the event of a breach of this Agreement that is not otherwise cured pursuant
to Section 12.2, and subject to the indemnification obligations in this
Agreement, the Parties shall be liable to each other only for any direct
damages. Service Provider and Provo, respectively, shall be entitled to all
monies due and owing to pursuant to Exhibit "E" and Article IV, without
limitation. In all other events a Party's aggregate liability for direct damages
shall be limited to the lesser of (i) actual proven damages; or (ii) the average
monthly Network Services billing to Service Provider for the twelve (12) months
preceding the Party's breach of this Agreement.
Waiver of Subrogation. Each of Provo and Service Provider hereby releases and
waives all right of recovery against the other or anyone claiming through or
under each of them by way of subrogation or otherwise with respect to the
property insurance policies required by Section 8.12 of this Agreement. The
foregoing release and waiver shall not apply to losses actually paid under such
policies if the releasing party's insurance policies do not contain provisions
acknowledging such release and waiver. Each of Provo and Service Provider shall
use its best efforts to secure such provisions in its policies. If either party
self-insures losses to its property, the waiver of subrogation shall apply as if
the party maintained an insurance policy covering loss or damage to its
property.
Defense of Claims. Either Provo or Service Provider as the indemnifying party
hereunder shall have the right to defend the other by counsel of the
indemnifying party's selection reasonably satisfactory to the indemnified party,
with respect to any claims within the indemnification obligations of this
Article XI. Provo and Service Provider shall give each other prompt notice of
any asserted claims or actions indemnified against, shall cooperate with each
other in the defense of any such claims or actions, and shall not settle any
such claims or actions without the prior written consent of the other.
Third Party Claims. Except as set forth in Sections 10.1 and 10.2, nothing in
this Agreement shall be construed to create rights in, or duties or liabilities
to, or any standard of care with reference to, or to grant remedies to, any
person or entity not a party to this Agreement. Nor shall Service Provider's
franchise obligations or Subscriber contracts vest any third-party with rights
against Provo except as specified in this Agreement. Provo and Service Provider
by entering into this Agreement do not hold themselves out as furnishing like or
similar services to any other person or entity.
Survival. The obligations of the respective parties under this Article X shall
survive the expiration or earlier termination of this Agreement.
Limitation of Provo Liability. Service Provider shall have sole responsibility
for the provision of Retail Services to its Subscribers. Provo shall in no way
be deemed to guarantee the adequacy of Service Provider's Retail Services for
such Subscribers' needs or requirements; subject, however, to Provo meeting the
quality and reliability specifications for the Provo Network as specifically set
forth in Exhibit "F."
Applicability of Liability Limitations. The waivers and disclaimers of
liability, releases from liability, exclusive remedy provisions, and (except as
expressly stated to the contrary therein) indemnity and hold harmless provisions
expressed throughout this Agreement shall apply even in the event of the fault,
negligence (in whole or in part), strict liability, or breach of contract of the
party released or whose liability is waived, disclaimed, limited, apportioned or
fixed by such exclusive remedy provision, or who is indemnified or held
harmless, and shall extend to their respective affiliates and its and their
respective partners, directors, officers, employees and agents. Such provisions
shall continue in full force and effect notwithstanding the completion,
termination, suspension, cancellation or rescission of this Agreement, or
termination of the rights and privileges granted by this Agreement. No officer,
director, employee, agent or other individual representative of either Provo or
Service Provider shall be personally responsible for any liability arising under
this Agreement.
Transmission of Any Obscene Matter Prohibited. Service Provider shall not permit
any matter which is obscene under federal and state law to be transmitted on the
Network via the headend. Service Provider shall pay to Provo a civil penalty of
_____ Dollars if any obscene matter is transmitted on the Network via the
headend once during the term of this Agreement, __ Dollars if any obscene matter
is transmitted via the headend on two separate dates during the term of this
Agreement, and Service Provider shall be in breach of this Agreement and this
Agreement may be terminated by Provo if any obscene matter is transmitted via
the headend on three separate dates during the term of this Agreement.
The determination of whether Service Provider has permitted any obscene matter
to be transmitted on the Network during the term of this Agreement shall be
undertaken pursuant to Utah Code ss.78-33-1 et seq., Declaratory Judgments, on a
complaint initiated by Provo or by one or more of Service Provider's
Subscribers.
FORCE MAJEURE
Excuse of Performance. Notwithstanding anything in this Agreement to the
contrary, neither Provo nor Service Provider shall be liable or responsible for
a delay or failure in performing or carrying out any of its obligations (other
than obligations to make payments for Network Service already provided) under
this Agreement caused by Force Majeure (as defined below).
Definition. The term "Force Majeure" as used in this Agreement shall mean any
cause beyond the reasonable control of Provo or Service Provider, as applicable,
or beyond the reasonable control of any of their respective contractors,
subcontractors, suppliers or vendors, including without limitation: Acts of God.
Acts of God, including, but not necessarily limited to, lightning, earthquakes,
adverse weather of greater duration or intensity than normally expected for the
job area and time of year, fires, explosions, floods, other natural
catastrophes, sabotage, utility outages, terrorist acts, acts of a public enemy,
acts of government or regulatory agencies, wars, blockades, embargoes,
insurrections, riots or civil disturbances; Labor Disputes. Labor disputes,
including, but not necessarily limited to, strikes, work slowdowns, work
stoppages or labor disruptions, labor or material shortages, or delays or
disruptions of transportation; Court Orders. Orders and judgments of any
federal, state or local court, administrative agency or governmental body;
Change in Law. The adoption of or change in any federal, state or local laws,
rules, regulations, ordinances, permits or licenses, or changes in the
interpretation of such laws, rules, regulations, ordinances, permits or
licenses, by a court or public agency having appropriate jurisdiction after the
Effective Date; or Government Approvals. Any suspension, termination,
interruption, denial or failure to issue or renew by any government authority or
other party having approval rights of any approval required or necessary
hereunder for the construction, installation or operation of the Network or for
either party to perform its obligations hereunder, except when such suspension,
termination, interruption, denial or failure to issue or renew results from the
negligence or failure to act of the party claiming the occurrence of an event of
Force Majeure.
Continuance after Force Majeure Event. If either Provo or Service Provider
cannot fulfill any of its obligations under this Agreement by reason of Force
Majeure, such party shall promptly notify the other and shall exercise due
diligence to remove such inability with all reasonable dispatch; provided, that
nothing contained in this Section 12.3 shall be construed as requiring Provo or
Service Provider to settle any strike, work stoppage or other labor dispute in
which it may be involved, or to accept any permit, certificate, license or other
approval on terms deemed unacceptable to such party, or to enter into any
contract or other undertaking on terms which the party deems to be unduly
burdensome or costly. In the event that the nature or duration of the Force
Majeure event is such that either party is irreparably harmed to the extent that
both parties agree that the affected party is unable to perform its obligations
under this Agreement, then the affected party shall be held harmless and have
the right to terminate this Agreement in accordance with paragraphs 12.2 and
12.3, above.
BREACH AND TERMINATION
Termination Events. The occurrence and continuance of the following events may
result in the termination of this Agreement, at the sole discretion of the
terminating party, subject to the provisions of this Article XIII: Breach or
Default. A material breach or a material default under the terms, covenants and
conditions of this Agreement by either Provo or Service Provider, including,
without limitation, the failure of Service Provider to make any undisputed
payments under the terms of this Agreement when due, the failure of Service
Provider to comply with Section 6.1, or the failure of Provo (or Provo's
successor or successor in interest), to complete its installation
responsibilities with respect to the Network or any Segment of the Network by
its scheduled completion date.
Change in Law. A change in any federal, state or local law, regulation or rule,
or the issuance of an Order by the Federal Communication Commission, that
materially impacts Provo's ownership or operation of the Network, or Service
Provider's use, or the terms for Service Provider's use, of the Network. Upon a
Party's notice of termination under this Section 13.1(b), each Party's sole
liability in such case is limited to meeting their respective obligations set
forth in Section 13.3, as applicable, and as permitted under such change in law.
Pricing. Notwithstanding good faith negotiations, in the event the Parties are
unable to reach agreement on Exhibit "E" prices and terms as set forth under
Section 4.1. Upon a Party's notice of termination under this Section 13.1(c),
each Party's sole liability in such case is limited to meeting their respective
obligations set forth in Section 13.3, and the prices and terms that applied on
the date of notice of termination will continue to apply during the termination
period specified in Section 13.3.
Right to Cure. If the termination event is a breach or default described in
Section 13.1(a), the non-defaulting party shall give written notice of such
occurrence to the defaulting party. The defaulting party shall be given a
reasonable time to cure any breach or default as follows:
In the case of a monetary default for undisputed charges, the defaulting party
shall have thirty (30) days after receipt of the written notice in which to
affect a cure. In the case of a nonmonetary default, the defaulting party shall
have sixty (60) days after receipt of the written notice in which to effect a
cure. If the nonmonetary default cannot be corrected within such sixty (60) day
period, the defaulting party shall have an additional reasonable time in which
to effect a cure, provided the defaulting party commences corrective action
within the original sixty (60) day period and thereafter diligently prosecutes
the corrective action to completion. If the defaulting party does not timely
cure the breach or default within the time periods specified above, the
non-defaulting party may elect to terminate this Agreement by providing written
notice of such election to the defaulting party.
Rights Upon Formal Termination. Upon the formal termination of this Agreement by
notice, except as otherwise limited by this Section 13.3, Provo and Service
Provider shall continue to abide by the terms of the Agreement, including the
payment obligations set forth in Article IV. The termination period shall last a
maximum period of twelve (12) months following the effective date of
termination. Service Provider shall have the right to use the Network to deliver
Retail Services during the termination period only as necessary to continue
service to existing Subscribers until such Subscribers are migrated to any
alternative service provider. Each Party agrees to cooperate in good faith to
effect an orderly and efficient transition of the Subscribers to another service
provider using the Network, if available. After commencement of a termination
period, Provo shall have the right, in its sole discretion, to seek alternative
service providers of the Retail Services for Subscribers on the Provo Network.
Provo may directly contact Service Provider's Subscribers to inform them of
alternative service providers for such Retail Services, and Provo may take such
other reasonable actions that may be necessary to prevent service disruptions to
Subscribers as a result of the termination of this Agreement; provided that
Provo first informs Service Provider of such other actions.
Continuity of Service upon Service Provider's Failure to Provide Service. Provo
and Service Provider agree that continuity of service to Subscribers is vital to
Provo's ability to fund the construction and maintenance of the Network. Provo
and Service Provider further agree that failure to provide the reliable service
contemplated by this Agreement would not only jeopardize both parties' ability
to satisfactorily perform their obligations under this Agreement, but would also
be detrimental to the health, safety and welfare of Subscribers. Therefore, both
parties agree to use their best efforts to avoid any lengthy disruption and/or
the termination of service to Subscribers. If then for any reason, Service
Provider cannot or does not continue to provide the services contemplated by
this Agreement, the parties agree to work together to ensure that continuity of
service can be provided by an alternate service provider. Therefore further,
notwithstanding anything to the contrary herein, if Service Provider, whether
voluntarily or involuntarily, is unable or unwilling to provide the service
contemplated by this Agreement, Provo shall have the right to immediately
designate an alternate service provider and to allow the alternate service
provider to begin providing service to Subscribers. Provo's right to provide for
continuity of services shall be at its discretion, but shall only be exercised
when Service Provider's inability to provide the services contemplated by this
Agreement is material and likely to continue for a substantial duration, and not
for minor temporary service interruptions not contemplated by the parties to be
a breach of this Agreement. An event described under Article Twelve shall not by
itself constitute sufficient grounds for Provo to pursue its rights under this
Section 13.4 but could constitute grounds for Provo to make provision for an
alternate service provider to provide service if Service Provider does not
diligently use its best efforts to restore service following an event described
under Article Twelve. During construction of the network, Provo may contract
with a third party to act as the alternate service provider in the event it is
necessary to invoke this Section 13.4.
In addition, Provo may require Service Provider to forfeit any bonds held to
guarantee performance, directly contact subscribers, and take such other
reasonable actions as may be necessary to prevent and minimize service
disruptions to Subscribers as a result of the Service Provider's failure to
provide service.
MISCELLANEOUS
Amendments. Neither this Agreement nor any provisions hereof may be changed,
waived, discharged or terminated orally and may only be modified or amended by
an instrument in writing, signed by both Provo and Service Provider.
Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of Provo, Service Provider and their respective successors and assigns.
Waivers. The failure by Provo or Service Provider at any time or times hereafter
to require strict performance by the other of any of the undertakings,
agreements or covenants contained in this Agreement shall not waive, affect or
diminish any right of Provo or Service Provider hereunder to demand strict
compliance and performance therewith. None of the undertakings, agreements or
covenants of Provo and Service Provider under this Agreement shall be deemed to
have been waived unless such waiver is evidenced by an instrument in writing
signed by the party to be charged specifying such waiver.
Notices. Unless otherwise specifically provided in this Agreement, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telecopied, telexed or sent by courier or United
States certified mail and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of a telecopy or telex, or five (5)
days after deposit in the United States mail, with postage prepaid and properly
addressed, as follows:
If to Provo, to: Paul Venturella
Provo Telecommunications Manager
251 West 800 North
Provo, Utah 84603
Facsimile No. (801) 852-6947
Telephone (801) 852-7900
With a copy to: Robert West
Provo City Attorney
351 West Center Street
Provo, Utah 84601
Facsimile No. (801) 852-xxxx
Telephone (801) 852-xxxx
If to Service Provider, to: Michael W Devine
8031 N Tuscany Drive
Tucson, AZ 85742
520.742.7373
Facsimile No. xxx-xxx-xxxx
With copies to: HomeNet Communications of Utah
135 Basin Street SW
Ephrata, WA. 98823
Such addresses may be changed by notice to the other party given in the same
manner as above provided.
Severability. If any term or provision of this Agreement shall, to any extent,
be determined by a court of competent jurisdiction to be void, voidable or
unenforceable, such void, voidable or unenforceable term or provision shall not
affect any other term or provision of this Agreement.
Interpretation. Whenever the context shall require, the plural shall include the
singular, the whole shall include any part thereof, and any gender shall include
both other genders. The article, section and paragraph headings contained in
this Agreement are for purposes of reference only and shall not limit, expand or
otherwise affect the construction of any provisions hereof. All references in
this Agreement to articles, sections and paragraphs, unless expressly noted
otherwise, are to articles, sections and paragraphs contained in this Agreement.
Unless the context requires otherwise, references in this Agreement to "Party"
shall be to either Provo or Service Provider, as applicable, and references to
"Parties" shall be to both Provo and Service Provider.
Independent Contractor Status. Provo and Service Provider reserve no control
whatsoever over the employment, discharge, compensation of or services rendered
by the employees or contractors of each other. Nothing in this Agreement shall
be construed as inconsistent with the foregoing independent status and
relationship or as creating or implying a partnership or joint venture between
Provo and Service Provider.
Governing Law and Choice of Forum. This Agreement shall be governed by,
construed and interpreted in accordance with the laws of the State of Utah.
Jurisdiction for any disputes arising out of this Agreement and any litigation
relating thereto shall be brought exclusively in the United States District
Court for the District of Utah, subject to the Court accepting jurisdiction of
such actions. In the event the United States District Court for the District of
Utah does not accept jurisdiction in any such action, the District Courts of the
State of Utah shall have exclusive jurisdiction for such action, unless
otherwise mutually agreed to by the Parties in writing. The Parties agree to
waive their right to jury trial with respect to actions brought under this
Agreement.
Commissions. No brokerage, finders, or other fee, commission or compensation
shall be paid by Provo or Service Provider in connection with the transaction
contemplated by this Agreement. Provo and Service Provider shall indemnify and
hold each other harmless (including attorney fees and costs) from and against
any and all claims for brokerage and finder's fees or commissions which may be
asserted against the other based on the actions or omissions of the indemnifying
party.
Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered, shall be deemed an original, but all
such counterparts taken together shall constitute only one instrument.
Costs. Except as otherwise set forth in this Agreement, Provo and Service
Provider shall each be responsible for its own costs, including legal fees,
incurred in negotiating and finalizing this Agreement.
Entire Agreement. This Agreement contains the only agreement between the
Parties. There are no other agreements, verbal or written, between the Parties.
Franchise Requirements. Any terms and conditions in this Agreement are intended
to be compatible or in addition to the requirements in the Franchise Agreement
and/or Provo City ordinance and any other applicable federal, state, or local
requirement. If there are any conflicts among these requirements, the more
stringent requirements are to be applied to the Service Provider.
(Signature page to follow)
DATED effective as of the date first above written.
Provo City
By: /s/ Lewis K. Billings
Mayor Lewis K. Billings
ATTEST:
__________________________________________
Provo City Recorder
APPROVED AS TO FORM:
/s/ Robert West
Provo City Attorney
Video Internet Broadcasting Corporation d.b.a.
HomeNet Communications of Utah
By: /s/ Michael W. Devine
Michael W. Devine (President)
ATTEST BY:
/s/ W Kelly Ryan
Name: W. Kelly Ryan
Title: CEO
Exhibit A
Retail Services
The Initial Service Provider's retail service offerings shall include the
following services until such time as there is at least one (1) Other Service
Provider on the Network offering competitive service in each service category
listed below:
Voice Services must include:
A. Primary dial tone Service (as defined in this Agreement)
B. Standard features which include:
1. Caller ID
2. Call waiting
3. Three-way calling (conference calling)
4. Voice mail
C. Local number portability
D. Seven digit dialing
E. Long distance service/international service (select provider)
F. E-911 emergency service
G. 411 (or 555-1212) information service
H. Directory listing (white/yellow pages) within next printing cycle or
as soon as is reasonable possible.
Data Services must include:
A. Internet access (filtered and unfiltered) at a range of speeds.
B. E-mail services
C. Web hosting (available)
D. Point to Point data services (available)
E. Public IP addresses (available)
Video Services must include:
A. 200+ channels (competitive channel offering: ESPN, CNN, etc.)
B. Premium services (movie channels: HBO, etc.)
C. Video On Demand (movies and local content)
D. PPV / VOD Live Events
F. "Barker" Channel for PPV/VOD
G. Local Provo channels (city channel/government access (Hello Provo),
Provo School District Channel, UVSC Channel, BYU Channel, and a channel
set aside for local programming and events only).
Exhibit B
Initial Service Provider Use Period
In order to promote the success of Service Provider's business, to provide for
stability on the Provo Network, and to remedy technical issues that will arise
during the implementation of the Provo Network, Service Provider will have a six
month Initial Service Provider Use Period for each Substantially Complete Node.
Provo has determined that a this period best balances the goals of allowing
Service Provider a reasonable opportunity to market, promote, and implement its
business plan in order to generate a return on its investment, provides
sufficient time to resolve technical issues that will arise, and still allows
Provo to maintain an open access Network by bringing Other Service Providers
onto the Network in a reasonable and orderly manner.
The Initial Service Provider Use Period will commence on the date a node is
determined to be a Substantially Complete Node by Provo and terminate on the
earlier of:
(A) Six (6) months from the date each Node is determined to be a
Substantially Complete Node; or
(B) Service Provider's failure to cooperate on Node activation testing
and debugging; or
(C) Service Provider's failure to meet Minimum Market Penetration
Standards as per Exhibit "C"
Exhibit C
Minimum Market Penetration Standards
For the duration of the Initial Service Provider Use Period, the Initial Service
Provider will be required to meet the minimum Market Penetration Standards as
set forth in Table 1 below. Market Penetration will be measured monthly and
calculated based on the following formula:
Monthly Active Subscribers (total number of current Subscribers plus
pending installations, minus any pending disconnects) at the end of the
month divided by total number of Homes Passed. Subscriber accounts sixty
60 days or more passed due are not to be counted.
If the Initial Service Provider fails to meet the Minimum Market Penetration
Standards for three (3) consecutive months or for any four (4) months in any
consecutive six (6) month period, then the Initial Service Provider Use Period,
at Provo's sole discretion, may be terminated.
Table 1.
- -------------------- ------------------ ------------------- --------------------
End of Month Penetration % End of Month Penetration %
- -------------------- ------------------ ------------------- --------------------
1 30% 13 32%
2 30% 14 32%
3 30% 15 32%
4 30% 16 32%
5 30% 17 32%
6 30% 18 32%
7 30% 19 32%
8 30% 20 32%
9 30% 21 32%
10 30% 22 32%
11 30% 23 32%
12 30% 24 32%
- -------------------- ------------------ ------------------- --------------------
Corollary for Table 1.
Measurement periods for the minimum standard achievement will commence thirty
(30) days, rounded to the beginning of the nearest month, after the date each
Node is determined to be a Substantially Completed Node. For example, a Node
completed on July 13th will have a measurement commencement date of July 1st..
Each successive Node will be added to the preceding Nodes for measurement
purposes. Once the measurement periods have commenced, they will occur monthly
starting on the first day of each month and ending on the last day of the same
month. Achievement of minimum Market Penetration standards will be reported to
Provo by the Service Provider no later than thirty (30) days after the
conclusion of the month to be measured. Achievement results will be based upon
all Substantially Completed Nodes.
Exhibit D
Network Build Schedule
This Exhibit "D" was prepared from the construction schedule submitted by
Provo's contractor and will be updated from time to time to reflect current
conditions of the Network. The following table represents the proposed
construction schedule as of July 2004:
===================== ==========================================================
Node Number Construction Schedule
===================== ==========================================================
Date Start Date Complete
===================== ============================== ===========================
1 July 2004 December 2004
2 August 2004 December 2004
3 September 2004 January 2005
4 September 2004 February 2005
5 October 2004 March 2005
6 November 2004 April 2005
7 November 2004 April 2005
8 December 2004 May 2005
9 January 2005 May 2005
10 January 2005 June 2005
11 February 2005 July 2005
12 March 2005 July 2005
13 March 2005 August 2005
14 April 2005 September 2005
15 May 2005 September 2005
16 May 2005 October 2005
17 June 2005 November 2005
18 July 2005 November 2005
19 July 2005 December 2005
20 August 2005 December 2005
21 September 2005 January 2006
22 September 2005 February 2006
23 October 2005 March 2006
24 November 2005 March 2006
- --------------------- ------------------------------ ---------------------------
Exhibit E
Network Lease Pricing Schedule
- ------------------------------ --------------------------------------------------- --------------------- -------------
Product or Service Product or Service Description Transport Fee or Maximum
Network Usage Rate Allowable
(per user, per Retail Rate
month unless
otherwise noted)
- ------------------------------ --------------------------------------------------- --------------------- -------------
Network Connection Fee Base fee for any individually billed residential $10.00
user connected to the network.
- ------------------------------ --------------------------------------------------- --------------------- -------------
Residential Services
- ------------------------------ --------------------------------------------------- --------------------- -------------
Data Services
- ------------------------------ --------------------------------------------------- --------------------- -------------
Data: Internet Access Internet Access and Network Data up to 256kB/sec. $21.36 $39.95
Data: Internet Access Internet Access and Network Data up to 5MB/sec. $28.46 $49.95
Data: Internet Access Internet Access and Network Data 5+ to 10MB/sec. $35.56 $59.95
Data: Internet Access Internet Access and Network Data 10+ to 25MB/sec. TBD TBD
Data: Internet Access Internet Access and Network Data 25+ to 50MB/sec. TBD TBD
Data: Internet Access Internet Access and Network Data 50+ to 100MB/sec. TBD TBD
Data (Point to Point) Point to Point Data Connectivity.. TBD TBD
- ------------------------------ --------------------------------------------------- --------------------- -------------
Video Services
- ------------------------------ --------------------------------------------------- --------------------- -------------
Video to TV/Monitor Television like video services. (IP Video) $5.36 $39.95
- ------------------------------ --------------------------------------------------- --------------------- -------------
PPV / VOD Service Free Programming: Per incident or use TBD $0.00
PPV / VOD Service Less than $0.99: Per incident or use ..25 $0.99
PPV / VOD Service $1.00 - $3.99Per incident or use .50 $3.99
PPV / VOD Service $4.00 - $9.99Per incident or use .75 $9.99
PPV / VOD Service $10+ Per incident or use $2.00 N/A
- ------------------------------ --------------------------------------------------- --------------------- -------------
Headend Services TBD
- ------------------------------ --------------------------------------------------- --------------------- -------------
Set Top Box (rebate) For the 2nd and 3rd STB in each home. ($1 each -$1.00 TBD
for customer requested, active STB.)
- ------------------------------ --------------------------------------------------- --------------------- -------------
Voice Services
- ------------------------------ --------------------------------------------------- --------------------- -------------
Using Provo City Switch
- ------------------------------ --------------------------------------------------- --------------------- -------------
Primary Telephone Dial Tone + Long Distance + Features Included w/Provo $24.95
switch usage.
- ------------------------------ --------------------------------------------------- --------------------- -------------
Secondary Telephone Additional line (including LD & features.) TBD TBD
Voice via data connection Dial Tone, LD & Features via any data connection. TBD
Long Distance Services TBD
Call Feature Services Voice Mail & Web Access $2.10 $6.00
Switch Services Includes Dial Tone & Basic Feature Set + Expanded $20.29 N/A
Calling Area to SLC.
- ------------------------------ --------------------------------------------------- --------------------- -------------
Not Using Provo City Switch
- ------------------------------ --------------------------------------------------- --------------------- -------------
Primary Telephone Transport Only $5.21 $24.95
Secondary Telephone Transport Only $5.21 $24.95
Voice via data connection Transport Only TBD
Long Distance Services
Call Feature Services Voice Mail & Web Access
- ------------------------------ --------------------------------------------------- --------------------- -------------
Service Combinations
- ------------------------------ --------------------------------------------------- --------------------- -------------
Data I+ Voice 256k Data and Basic Voice Service $18.47 $54.90
Data II+ Voice 5Mb Data and Basic Voice Service $25.57 $64.90
Data III+ Voice 10Mb Data and Basic Voice Service $32.67 $74.90
Data I+ Video 256k Data and Basic Video Service $28.62 $69.90
Data II+ Video 5 Mb Data and Basic Video Service $35.72 $79.90
Data III+ Video 10Mb Data and Basic Video Service $42.82 $89.90
Data I+ Video + Phone 256k Data and Basic Voice Service + Video $29.78 $89.85
Data II+ Video + Phone 5Mb Data and Basic Voice Service + Video $36.88 $99.85
Data III+ Video + Phone 10Mb Data and Basic Voice Service + Video $43.98 $109.85
- ------------------------------ --------------------------------------------------- --------------------- -------------
Business Services
- ------------------------------ --------------------------------------------------- --------------------- -------------
Data Service Any business service with a retail rate of less $27.00 $100
than $100.00
Data Service Any business service with a retail rate of more 52% of retail rate N/A
than $100.00
Telephony Service Any business service with a retail rate of less TBD
than $100.00
Telephony Service Any business service with a retail rate of more 52% of retail rate
than $100.00
Soft switch Services Includes Dial Tone & Basic Feature Set + Expanded TBD
Calling Area to SLC.
- ------------------------------ --------------------------------------------------- --------------------- -------------
MDU Service
- ------------------------------ --------------------------------------------------- --------------------- -------------
Analog Video Per unit $5.50 $20.00
IP Video TBD
Data 256k/sec. TBD
Data 5 Mb/sec. Per unit $19.50 $24.95
Bulk Bandwidth TBD
Telephone TBD
Analog Video + Data $22.50 $40.00
- ------------------------------ --------------------------------------------------- --------------------- -------------
Existing iProvo Trial
Customers
- ------------------------------ --------------------------------------------------- --------------------- -------------
MDU's TBD
Business TBD
- ------------------------------ --------------------------------------------------- --------------------- -------------
Listed transport fees apply only when retail rates do not exceed maximum
allowable retail rate shown. If retail rates exceed maximum allowable rate,
transport fee increases by 75% of amount above maximum allowable rate.
Maximum Allowable Rate does not include franchise fees or taxes.
Exhibit F
Broadband Data, Video, and Telephony Service Level Agreement
Except as set forth herein, Provo makes no warranties regarding the
availability, performance, or continuation of services on the Provo Network, and
this Service Level Agreement ("SLA") and the credits described herein are the
Service Provider's and Subscribers' sole and exclusive remedy. Provo considers
this document as being fluid and expects to make periodic amendments based on
demonstrated network performance.
The definitions set forth below are meant to be supplemental to the definitions
previously stated in the Agreement; they do not supercede or modify the
previously stated definitions in any way.
1. Definitions
Clearance for Subscriber Services Activation (CSSA): The date whereupon
Provo releases the Subscriber for activation.
Jitter: The relative variation in delay between consecutive serial
packets. Samples are taken 500 milliseconds apart, and consecutive
samples are compared for variation in delay.
Monthly Recurring Transport Fee (MRTF): The amount paid on a recurring
monthly basis by Service Provider for transport services via the Provo
Network.
Point of Presence (POP): Physical locations on the Network that include
the Network electronic equipment. These are typically subscriber
demarcation points (Gateway) but may also be neighborhood network nodes
or the head-end.
The following Service Delivery Standards will provide the basis for providing
Telecom services on the Provo network:
2. Network Latency Standard
The intent of the Provo Network Latency Standard is to limit the
Latency Achievement Quotient (LAQ), as defined below, to 1.0 or less
(the equivalent of average latency equaling 150 milliseconds or less)
in a given month. Average Round-Trip Latency, with respect to a given
month, is defined as the average time required for round-trip packet
transfers between POP's on the Provo Network during such month, as
measured by Provo. The measurement of the Latency Achievement Quotient
is subject to Section 12 (Exceptions) of this SLA. Average Round-Trip
Latency does not extend to Service Provider's connection into the Provo
Network or to Service Provider's Customer Premise Equipment. LAQ will
be measured by dividing the Average Round-Trip Latency on the Provo
Network for a calendar month by the 150 milliseconds latency standard.
LAQ Calculation:
Actual Average Round-Trip Latency between POP's on the Provo Network
for Month 150 Milliseconds
(Example: 300 ms Actual Average Round-Trip Latency for Month = 300/150
or LAQ of 2)
The Latency Achievement Quotient will be one of the factors in calculating any
credits due the Retail ISP for the purpose of crediting their Subscribers. (See
section 10.1)
2.1 Network Jitter Standard
Both parties agree to consider adding mutually acceptable jitter
standards for the Network at the initial six month review.
3. IP Data Packet Delivery Standard
The Provo Network IP Packet Delivery Standard is to maintain the Packet
Delivery Achievement Percentage, as defined below, to ninety-five
percent (95%) or greater in a given month. Average Packet Loss, with
respect to a given month, is defined as the average percentage of IP
data packets transmitted from any given source to any given destination
across the Provo Network during said month that are not successfully
delivered as measured by Provo. The measurement of the Packet Delivery
Achievement Percentage is subject to Section 12 (Exceptions) of this
SLA.
Packet Delivery Achievement Percentage calculation:
100% - Average Percentage of Packets Lost for any given source and
destination for the month The Packet Delivery Achievement Percentage
will be one of the factors in calculating any credits due to Service
Provider for the purpose of crediting its Subscribers. (See section
10.2)
4. Service Availability Standard
The goal of the Provo Network Service Availability (network up-time) is
for all network circuits being available one hundred percent (100%) of
the time. The Network Service Availability standard is ninety-nine
point five percent (99.5%) of the total service time in a given month.
Service Availability will be measured by tracking the number of minutes
the Provo Network is not available and dividing by the total number of
minutes in the given service month. The Service Availability Standard
measurement is subject to Section 12 (Exceptions) of this SLA.
Service Availability Achievement Percentage Calculation:
100% - Number of minutes the Provo Network is not available in Month
for a Given Subscriber/Total number of service minutes in Month.
The Service Availability Achievement Percentage will be one of the
factors in calculating any credits due the Service Provider for the
purpose of crediting their Subscribers (see Section 10).
5. Stated bandwidth
Stated bandwidth(s) apply(ies) only to the bandwidth delivery on the
Network between the Gateway and the Internet-edge router. No guarantee
for end-to-end bandwidth including the Internet is implied. Both
parties acknowledge that many factors on the Internet and destination
website will impact measurable bandwidth, these include but are not
limited to Subscriber hardware, computers, routers, switches, memory
systems and configurations.
6. Claims of damage or business loss to subscribers
Provo will not be responsible for any damages Service Providers,
Subscribers and/or Subscribers' businesses suffer. Provo makes NO
WARRANTEES OF ANY KIND, EXPRESSED OR IMPLIED, for services we provide
except as set forth herein. Provo DISCLAIMS ANY WARRANTY OR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. This includes loss
of data resulting from delays, non-deliveries, wrong deliveries, and
any and all service interruptions caused by Provo and its employees
whether due to Provo's negligence or Service Provider's errors or
omissions. Any and all information obtained via the Provo - data
network services (public and or private) is at the Subscriber's or
Service Provider's own risk.
Any and all access to other networks via the Provo Network must be in
compliance with all policies and rules of those networks. This applies
to any other network to which Provo is attached.
7. Measurement Methodology of the SLA
Provo will periodically (on average every 5 minutes) measure
performance at selected points of presence (POP's) throughout the Provo
Network using software and hardware components capable of measuring IP
traffic and responses. Not every POP may be covered by such
measurements and such components may not measure the exact condition on
any path traversed by data packets. Such components provide
measurements across the Provo Network, but not other networks to which
Provo may connect. Provo reserves the right to periodically change the
measurement points and methodologies it uses without notice.
Measurements will be made available to Service Provider when monitoring
systems are in place and data is available.
Metrics measured will include packet throughput latency, availability,
dropped packets, aberrant packets (errors, runts, etc.), and other
appropriate statistics.
Access to network metrics is considered confidential and is subject to
non-disclosure agreements.
8. Terms
The terms of this SLA will take effect for each subscriber upon the
completion of a seven day "burn-in " period after connection to the
Provo Network has been established. The general network measurements
for these standards will be compiled and made available within five (5)
days of the close of each month and will show each of the Achievement
Calculations for the network in general. Provo will make available
these measurements via a secure, real-time web display when this
function becomes available. Any Exceptions affecting the Achievement
Calculations will be clearly shown and properly documented with
attendant explanations, as appropriate. As individual subscriber
problems are escalated to the Provo Network Operations Center, more
granular monitoring and testing procedures will be applied and made
available to the Service Provider and the Subscriber when available
Remedies will be determined pursuant to the procedures noted herein.
9. IP Data Only (Internet or other data service) Subscriber Credit
If, as measured and reported by Provo, the Provo Network Service
Availability Achievement Percentage (SAAP) falls below 99.5% within a
given month for a given Subscriber (Approximately 3.72 hours of no
network availability)), Service Provider will be entitled to a credit
equal to five percent (5%) of the Monthly Recurring Transport Fee
(MRTF) for the affected Subscriber(s), for the affected service's MRTF.
The credit will be awarded to the Service Provider, who will then award
the credit to the affected Subscriber. In no case shall the Service
Provider use the credit for anything other than forwarding the credit
to the affected Subscriber(s). In no case shall the credit per Service
Provider's Subscriber be greater than 100% of said Subscriber's MRTF.
Due to the fact that measurement will not take place universally
throughout the Provo Network, reasonable, subjective analysis may be
required to determine the Service Availability Achievement Percentage
(SAAP) by subscriber. This may be due to, but not limited by, the
following factors; unscheduled network maintenance or upgrade,
unanticipated performance affecting changes to network configuration,
problems with higher level IP network services such as IP multicast or
IP quality of service, etc. Provo will provide good-faith analysis of
any specific requests to determine the actual (or best estimate)
Service Availability Achievement Percentage (SAAP) by subscriber.
The credit applies after the SAAP has been violated.
10. Voice and/or Video Subscriber Credit
If, as measured and reported by Provo, the Provo Network Service
Availability Achievement Percentage (SAAP) falls below 99.5% within a
given month for a given Subscriber (Approximately 3.72 hours of no
network availability)), Service Provider will be entitled to a credit
equal to five percent (5%) of the Monthly Recurring Transport Fee
(MRTF) for the affected Subscriber(s), for the affected service's MRTF.
The credit will be awarded to the Service Provider who will then award
the credit to the affected Subscriber. In no case shall the Service
Provider use the credit for anything other than forwarding the credit
to the affected Subscriber(s). In no case shall the credit per Service
Provider's Subscriber be greater than 100% of said Subscriber's MRTF
It is recognized that due to the fact that measurement will not take
place universally throughout the Provo Network, reasonable, subjective
analysis may be required to determine the Service Availability
Achievement Percentage by Subscriber. This may be due to, but not
limited by, the following factors; unscheduled network maintenance or
upgrade, unanticipated performance affecting changes to network
configuration, and problems with higher level IP network services such
as IP multicast or IP quality of service, etc. Provo will provide
good-faith analysis of any specific requests to determine the actual,
or reasonably best estimate of, Service Availability Achievement
Percentage by Subscriber.
Due to the unique requirements of video and voice services, the Provo
Network will provide the following credits for any failures against SLA
Standards for Service Availability, Latency, or Packet Delivery:
The applicable credit for Subscribers who are affected beyond the
acceptable standard are cumulative and will be distributed as follows:
Voice Services:
Credit Percentage = 5%
Video Services
Credit Percentage = 5%
DATA Services
Credit Percentage = 5%
The maximum credit for any short-term outages for a Subscriber in any
given month will be 15% of the MRTF. Short-term is any contiguous
period within the measured month that is less than 4 hours.
10.1 Latency Credit
If, as measured and reported by Provo, the Provo Network Latency
Quotient exceeds 1.0 in any given Month, Service Provider will be
entitled to a credit. The credit for Service Provider's video and/or
voice Subscribers will equal 5% of MRTF. The credit will apply to any
affected Subscribers served by the portion of the Provo Network
experiencing the substandard LAQ for the given Month. The credit will
be awarded to the Service Provider who will then award the credit to
the affected Subscriber. In no case shall the Service Provider use the
credit for anything other than forwarding the credit to the affected
Subscriber(s). In no case shall the credit be greater than the MRTF.
Credit for violation of the Network Latency Quotient will be subject to
a Subscriber trouble ticket and supporting documentation.
10.2 Packet Delivery Credit
If, as measured and reported by Provo, the Average Packet Delivery
Achievement Percentage on the Provo Network fails to meet the Packet
Delivery Standard (95%) in any given Month, Service Provider will be
entitled to a credit. The credit for Service Provider's affected video
and/or voice subscribers will equal five percent 5% of MRTF. The credit
will be for any affected Subscribers served by the portion of the Provo
Network experiencing the substandard Packet Delivery Achievement
Percentage for the given Month. The credit will be awarded to the
Service Provider who will then award the credit to the affected
Subscriber. In no case shall the Service Provider use the credit for
anything other than forwarding the credit to the affected Subscriber(s)
In no case shall the credit per Retailer's Subscriber be greater than
100% of said Subscriber's MRTF.
10.3 Cumulative Loss of Service Credit
If Subscribers have lost service for periods extending beyond the
metric measurement periods, credits will be awarded on a prorated
basis. This pro-rata amount will be calculated based on a simple
pro-rata formula as follows:
MRTF - ((Number of days Provo Network is not available in
Month for a given subscriber/Total number of service days in
Month) x MRTF)
This credit is limited to a maximum of the MRTF for the given service
being calculated. This calculation would be applied to each service
that has had extended down time. The maximum of all credits combined
will not exceed the total MRTF for the month. Credits will be awarded
to the Service Provider for the purpose of crediting Subscribers who
had service outages. Credits will only be awarded for Subscribers who
have reported an outage, have a trouble ticket on file, and the outage
is verified by network monitoring metrics.
11. Exclusive Remedy for Retailer ISP Partners
The credits described in this SLA shall be the sole remedy available to
Service Provider relating to any service performance issues on the
Provo Network. Provo will in no way be responsible for any liquidated
damages relating to lost business or other consequential damages
accruing to Service Provider or Subscribers. Service Provider will
petition Provo for a review of the MRTF and other possible remedies in
the event of re-occurring lack of adherence to the established network
standards.
12. Exceptions
Credit will not be issued to any Service Provider on behalf of a
specific Subscriber for more than six (6) months in any calendar year.
Service Provider shall not receive any credits under this SLA in
connection with any failure or deficiency of the Provo Network caused
by or associated with:
a) Circumstances beyond Provo's reasonable control, including,
without limitation, acts of any governmental body, war,
insurrection, sabotage, embargo, fire, flood, weather, solar
disturbances, strike, or other labor disturbance, interruption
of or delay in transportation, unavailability of or
interruption or delay in telecommunications or third party
services, failure of third party software or inability to
obtain raw materials, supplies, or power used in or equipment
needed for provision of the SLA;
b) Scheduled Maintenance, defined as work performed by Provo
staff on any of its equipment for which notification is sent
to the Maintenance Mailing List no less than 48 hours before
the work is to begin.
c) Failure of access circuits to the Provo Network, unless such
failure is caused solely by Provo;
d) DNS (Domain Name Server) issues outside the direct control of
Provo; e) Service Provider's or their Agent's acts or
omissions including without limitation, any negligence,
willful misconduct, or use of Provo Network or Provo services
in breach of Provo's Acceptable Usage Agreement by Service
Provider or others authorized by them.
13. Credit Request and Payment Procedures
Subscriber credits will be calculated using the single highest award
when compared to the various service level metrics. The awards are not
cumulative for each category.
Any credit issued to a Service Provider ISP must be supported by the
appropriate trouble ticket and resolution documents that will be made
available to Provo upon request. Provo will provide an electronic
report detailing the performance of the Provo Network relative to the
SLA Standards. This report will include all calculations outlined in
this agreement, noting variances to the defined SLA Standards. All
exceptions (as expressly stated in this SLA) that were used in making
the calculations will be explicitly noted with attendant explanations,
as appropriate.
Credits due Service Provider, as calculated by Service Provider will be
expressed in the consolidated monthly report delivered to Provo for
confirmation. Provo will report any disputed claims back to the Service
Provider no later than 10 days after receipt of the report.
Reconciliation of any dispute between Provo and Service Provider must
be resolved, in good faith, by the end of the following month. Once the
credit has been agreed upon, it will be applied to Service Provider's
transport fee bill for the following Month.
In the event circumstances arise wherein the Provo Network performance,
although meeting all quantitative metrics as established by this SLA,
does not meet the levels intended by this SLA Provo will entertain
special requests for credit by the Service Provider. Service Provider
must present any special requests for credit to the applicable
individual or department as designated by Provo. The designated
individual or department must receive each request in connection with a
network outage within ten (10) days of the close of the given month.
Provo will review each special request and conduct good-faith analysis
to determine its validity. Each valid request for credit will be
assigned credit, mutually agreed to between Provo and Service Provider,
and will be applied to a Service Provider invoice within two (2)
billing cycles following Provo's granting of such request. Credits are
exclusive of any applicable taxes charged to Service Provider or
collected by Provo.
Any credits granted to a Subscriber involving an SLA payment from the
City shall be equal to the percentage SLA credit granted to Service
Provider multiplied by the retail rate paid by said Subscriber.
14. Provo Response
Provo will mobilize staff within a maximum of thirty (30) minutes of
notification of any multiple customer outage that is due to a Network
failure. Provo will maintain spares for any significant network
equipment that may result in an outage if non-functioning. Provo will
maintain 24X7 on-call staff for outage remediation. The on-call
personnel will be proficient in trouble-shooting, diagnostics, and
remediation of service-affecting Network problems.
15. General
Provo reserves the right to change or modify this SLA and will post
changes to a Web site designated by Provo and made available to Service
Provider. Except as set forth in this SLA, Provo makes no claims
regarding the availability or performance of the Provo Network.
Both Provo and Service Provider acknowledge and agree to formally
review this SLA within six (6) months of the execution of this
Agreement. The review will be a good-faith review of the SLA to
determine areas where it may be modified to provide the optimal
operating environment for both parties. Specifically it is acknowledged
by Provo and Service Provider that Network Jitter is a critical
component that will be added to this SLA once a suitable standard and
measurement methodology is established.
Exhibit G
Disaster Recovery Plan
Definitions:
1. Disaster Response Management Team: This team will consist of the Energy
Department Director, Telecom Division Manager, Telecom Network
Administrator, Telecom Construction Project Manager, one representative
from the Service Providers currently using the network, and others. The
team will have management, communication and coordination
responsibilities for disaster recovery efforts.
A. Minor disasters related to events such as equipment failure or
power loss. The network facilities design will make use of
redundant equipment and data paths whenever practical. All
network devices will be provided with a backup power source
that will keep electronic devices powered in the event of a
power loss. Portable generation equipment will be used to
support facilities that see more long term power loss
conditions. Equipment spares will play a role in minor
disaster remediation. Provo staff will mobilize in order to
remediate any multiple customer events upon notification. It
is assumed that service level agreements will function
normally during this type of event.
B. Intermediate level disasters such as damage to fiber optic
cables, destruction of a network node or loss of satellite
related equipment will be responded to immediately. Crews will
be dispatched to the disaster site upon notification of the
problem. Work will continue to remediate the damaged
facilities until they have been restored. The Disaster
remediation crews will be directed by the iProvo Disaster
Response Management Team. This team will make use of all
available resources, both internal and external in order to
bring the network restoration to a timely close. This team
will have responsibility for all communications and status as
well as coordination for restoration activities. It is assumed
that service level agreements will function normally during
this type of event.
C. Major Disasters such as citywide catastrophic events that may
result in the loss of a great amount of the fiber
infrastructure or headend will require the iProvo Disaster
Response Management Team to carefully analyze the situation
and develop both a short term and a long term restoration
effort. These plans will be provided to the Service Providers
on the network as soon as possible. Provo will work diligently
to repair and or replace the damaged facilities. The extent of
the disaster will determine how quickly the restoration can be
accomplished It is assumed that service level agreements and
billing will be suspended for areas that will have a long term
loss of service.
D. Contractor Restoration Team. Provo will establish pre-event
agreements with appropriate Telecom Contractors who will
maintain a disaster response readiness. These companies will
mobilize quickly to facilitate disaster remediation.
E. Coordination with the City's Disaster Response Plan: Provo
Telecom will work to coordinate the Disaster Response Plan
with the City's Internal Disaster Plan. This will include a
detailed plan that will establish priorities and alternate
service plans.
Exhibit H
IP Video Middleware and Set Top Boxes
Provo shall define which middleware will be the standard network middleware for
the City Network. In the interest of ensuring a customer friendly end user
experience related to video services middleware, Provo will have a final
approval of any non-standard middleware, set top box, and related products and
services. Should any Service Provider use a non-standard middleware and
discontinue as a Service Provider on the network for any reason, they will allow
Provo City use of the non-standard middleware without charge for ninety (90)
days to allow for continuity of service to customers as per Exhibit "K"
Middleware and Set Top Box Usage Agreement. After the initial ninety (90) day
transition period, usage will be covered by Appendix A - IP Video Middleware
Software License Agreement.
Any and all increased costs in hardware, software, bandwidth on the Network,
and/or Network personnel time required to allow the use of Service Provider
non-standard middleware will be borne solely by the Service Provider requesting
the use of the non-standard middleware. This includes all costs that are
directly or indirectly related to and caused by the introduction of additional
middleware. These costs will be billed on an "as incurred" basis at both the
time of the introduction of the middleware and as the network grows and usage
increases might require additional hardware, etc.
Middleware/Set Top Box Evaluation and Testing Procedure
Provo will review and evaluate any proposed non-standard middleware products and
services (including a list of set top boxes the non-standard middleware has been
ported to) and determine if the end user experience is substantially equivalent
to similar products available in the market.
An additional technology review will be done to determine if the use of said
non-standard middleware will affect network performance.
Should the non-standard middleware products or services be found not to be
substantially equivalent to the standard middleware, or to negatively affect
network performance, in the sole view of Provo, said non-standard middleware
products and related services may not be deployed on the network. Approval for
non-standard middleware will not be unreasonably withheld.
Provo will review and evaluate any proposed set top box and related products and
services and determine if the end user experience is substantially equivalent to
similar products available in the market. No hardware will be connected to the
Provo Network by the Service Provider or their agent (including set top boxes)
without prior review and approval by Provo.
All Set Top boxes deployed in the network must have the ability to implement a
Digital Rights Management (DRM) and/or Conditional Access (CA) content security
system. DRM/CS systems proposed must be generally accepted by content providers
as sufficient to meet generally accepted standards.
Should the products or services be found not to be substantially equivalent in
the sole view of Provo, said set top box or other hardware products may not be
deployed on the network. Approval for Set Top Boxes will not be unreasonably
withheld.
Provo will conduct testing of the proposed non-standard middleware/set top box
system. The testing will include but not be limited to the following:
Testing on the network using the Provo test video environment in a quantity that
will simulate a deployment of 20-30 residences using no less than 100
Testing in a field deployment with 30-40 live production Subscribers receiving
no less than 100 channels and miscellaneous VOD streams.
Evidence of a successful deployment for at least 1500 Subscribers served by the
non-standard middleware and set top boxes in question will be required before
Provo will commit to support a long term, citywide deployment.
EXHIBIT I
iPROVO ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") dated as of ______________,
2004, is entered into by and PROVO CITY, a political subdivision of the State of
Utah (hereinafter referred to as "Seller") and homenet utah, a Washington
corporation registered to do business in Utah ("hereinafter referred to as
"Buyer).
RECITALS
WHEREAS, the Seller is the owner, and Buyer as the retail service
provider is the administrator, of certain assets that are part of a test project
known as Phase II of the "iProvo" project (the "Test") pursuant to a memorandum
of understanding between Seller and Buyer, (the "Memorandum of Understanding");
and
WHEREAS, Buyer wishes to purchase from Seller, and Seller wishes to
sell to Buyer, Seller's interest in these assets;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto, each intending to be bound hereby, agree as
follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 Sale and Transfer of Assets. Subject to and in accordance with the
terms and conditions of this Agreement, at the Closing (as defined below) on the
Closing Date (as defined below) Seller shall sell, convey, transfer, deliver and
assign to Buyer all of its interest in the assets and property listed on
Schedule 1 (collectively, the "Assets") free and clear of all of any liens,
security interests, pledges, assignments, restrictions and other encumbrance of
any kind or nature, including without limitation:
(1) Seller's rights and benefits in all accounts of current active
subscribers as listed on Schedule 1 and defined below in
Section 1.10, contracts set forth on Schedule 2, and the
accounts receivable, set forth on Schedule 3.
(2) Such "goodwill" as may be assigned that arises from or
associated with the Test;
(3) Seller's confidential and/or proprietary subscriber
information, including subscriber lists and accounts, but with
respect to accounts payable, only those that accrue after the
date of this Agreement first set forth above;
1.2 Assumption of Assumed Contracts. Buyer hereby assumes and agrees to
perform all of the obligations and commitments of Seller accruing after the
Closing Date, under or with respect to each contract set forth on Schedule 2
(collectively the "Assumed Contracts" or individually an "Assumed Contract"),
but not including any obligation or liability arising or occurring prior to the
Closing Date. Buyer shall have no obligation with respect to any contract not
constituting an Assumed Contract set forth in Schedule 2.
1.3 Excluded Liabilities. Except for the Assumed Contracts and
regardless of any disclosure to Buyer, Buyer is not, as part of this agreement,
assuming any other duties, responsibilities, obligations or liabilities of
Seller or to which Seller or any of the Assets may be bound or affected, of
whatever kind or nature, whether known, unknown, contingent or otherwise (and
including without limitation taxes arising from the Test) (the "Excluded
Liabilities"). However, the parties to this Agreement currently have other
obligations to each other arising from the Memorandum of Understanding, and the
parties contemplate entering into other necessary agreements after the sale of
the Assets pursuant to this Agreement. These other agreements shall be governed
by their own provisions and shall not be affected by this Subsection 1.3.
1.4 Single Family Residence (SFR) Asset Purchase Price. The total
purchase price to be paid for the SFR Assets shall be the sum of the Marketing
Offset and the In-home Wiring Offset ("Purchase Price"). The Marketing Offset
shall be Two Hundred Twenty-five Dollars ($225.00) per current active
subscriber. The In-home Wiring Offset shall be Forty-five Dollars ($45.00) for
the first service drop and Forty Dollars ($40.00) for each additional service
drop to each current active subscriber. Buyer and Seller agree that the In-home
Wiring Offset will be calculated on the basis of 2.5 drops per current active
subscriber established pursuant to Section 1.6 herein. The Purchase Price shall
be payable to Seller as set forth in Section 1.6, herein.
1.5 Multi Dwelling Unit (MDU) Asset Purchase Price. The total purchase
price to be paid for the MDU Assets shall be the Marketing Offset for each
Equivalent Business Unit (EBU) as in section 1.12 of this document. The
Marketing Offset shall be Two Hundred Twenty-five Dollars ($225.00) per current
active subscriber (EBU).
1.6 Payment of Purchase Price. Payment of the SFR Purchase Price shall
be made in three (3) equal monthly payments starting thirty days after the
finalization of the Service Level Agreement, as referenced in Section 1.8
herein, in immediately available funds by, at Seller's option, check or wire
transfer to the following account: Zion's Bank, 111 North 200 West, Provo, UT
84601, ABA#124000054, to Credit of Provo City, Account #32146581 (City Contact:
John Borget, Finance Director, 801-852-6504, or Janice Larsen, Accounting
Manager, 801-852-6526). Buyer will pay the Purchase Price for seventy percent
(70%) of the SFR current active subscribers and one hundred percent (100%) of
the MDU-EBU current active subscribers. The final count of SFR and MDU-EBUs will
be established by mutual agreement as listed in Schedule 1 attached hereto.
1.7 Interest Payments. The outstanding principal balance hereof shall
bear interest at the rate of six percent (6%) per annum from and after the
Closing Date, until paid. Interest payable hereunder shall accrue daily and be
calculated on the basis of a three hundred sixty five (365) day year and the
actual number of days elapsed in any particular calendar month.
1.8 Service Level Agreement. The Seller will craft a Service Level
Agreement (SLA) for the Network performance. If, prior to the finalization of
the Service Level Agreement, any current active subscribers of the Test
terminate service due primarily to the Network performance, Buyer and Seller
will mutually make a determination as to how much of the purchase price may be
forgiven.
1.9 Retained Title and Interest. Until the Purchase Price is paid in
full at Closing, Seller shall retain title to the Assets set forth in Subsection
1.1, above. Buyer shall not have the right to sell, lease, sublease or in any
way alienate Seller's interest or Buyer's own interest in the Assets set forth
in subsection 1.1, above, nor to use said assets for the purpose of securing any
debt, nor to create any right or interest in any third party. Although the
physical possession and apparent interest in the Assets may be transferred to
Buyer as of the date of this Agreement, until the purchase price is paid in full
at Closing, Seller shall have the right to show itself as the owner of the
Assets and/or as a secured party on any deed, UCC form or other public or
private document or disclosure form.
1.10 Certain Taxes. Any taxes owed, if any, to any taxing entity in
connection with or as a result of the transfer of the Assets under the terms of
this Agreement and the transactions contemplated hereby, including, but not
limited to, any and all sales, use, excise, transfer and conveyance taxes
payable or assessable, shall be paid by Buyer. However, Buyer shall not be
responsible for any business, occupation, income, withholding, possessory
interest or similar tax or assessment or any other tax or fee of any kind
relating to any period on or prior to the date of this Agreement with respect to
Seller, the Assets, or the ownership, operation or management of the Test.
1.11 Prorations. Seller's and Buyer's responsibilities for rent,
insurance premiums, personal property taxes, water, gas, electricity and other
utilities, and other periodic ordinary and necessary operating costs payable
with respect to the Assets to the effective date of this Agreement shall be
governed by the Memorandum of Understanding until this Agreement is executed and
becomes effective, whereupon the Memorandum of Understanding shall terminate.
1.12 Subscribers Defined. "Current active subscriber" shall be defined
as follows:
(1) An individual residential account paying the standard monthly
rates for services;
(2) All "bulk" accounts (apartment complexes, etc.) shall be
converted to subscribers by using the following formula for
Equivalent Billing Units: Total monthly payment divided by the
standard monthly rate of Thirty-nine dollars and ninety-five
cents ($39.95) = EBUs. Each EBU shall equate to one
subscriber.
(3) Commercial accounts will be converted to customers by using
the same formula described in Section 1.12 (2).
2. SETTLEMENT AND CLOSING.
2.1 Time and Place of Closing. Subject to the terms and conditions of
this Agreement, the closing of the transactions contemplated herein (the
"Closing") shall take place as soon as practical following the satisfaction of
all the Conditions to Closing set forth in Section 3. The actual date of the
closing is hereinafter referred to as the "Closing Date." The Closing or
Settlement shall take place at the Provo City Attorneys Office located at 351
West Center, Provo, Utah.
3. CONDITIONS TO CLOSING.
The consummation of the transactions contemplated by this Agreement is
conditioned upon the following:
3.1 Approval of Initial Provider Network Access and Use Agreement and
Franchise Agreement by the Provo City Municipal Council. As conditions precedent
to the purchase of the Assets by Buyer is the approval by a majority vote of the
Provo City Municipal Council during a regularly scheduled (or specially
convened) Council meeting authorizing the Mayor to negotiate and execute this
Asset Purchase Agreement, together with documents related thereto, and the Provo
City Municipal Council approving a Network Lease and Maintenance Agreement and
Franchise Agreement between the City of Provo, Utah, and Buyer allowing Buyer to
operate a cable system in Provo City, Utah.
3.2 Television Services/Signal Provider Consents. If required, Seller
hereby agrees to use its best efforts to obtain consents in writing from each
television service/signal provider for transfer of Affiliate Agreements between
Seller and such providers. However, in view of the fact that Buyer is
negotiating its own agreements with the service/signal providers, failure by
Seller to obtain consents from all providers shall not preclude the parties from
Closing.
3.3 Facility Lease Consents. Buyer agrees to make lease payments in the
amount of Five Dollars ($5.00) per month per set top box (STB) on a pro rata
bases for Seller-owned STBs in current active subscriber premises until such
time that the STB is returned to the Seller.
3.4 Delivery of Documents. Buyer and Seller shall have signed and
delivered to each other all documents and other deliverables required by Section
6 of this Agreement.
3.5 All Other Consents. Buyer shall obtain all necessary consents,
including all required Government Consents, if any, that may be required for
Buyer to acquire and fully administer and/or operate the Assets.
3.6 No Material Adverse Change. Buyer shall be satisfied, in its sole
discretion, that the Assets have experienced no material adverse changes.
3.7 Verification of Subscriber Accounts. Prior to the Closing Date,
Buyer shall have the right to verify by inspection, audit or other means that
such subscriber accounts are active and current as of the Closing Date.
4. REPRESENTATIONS AND WARRANTIES OF BOTH SELLER AND BUYER.
Seller and Buyer, (i) represents and warrants that each of the
following representations and warranties is true and complete as of the Date of
this Agreement with respect to the Seller, Buyer, and the Assets, as the case
may be, and (ii) agree that such representations and warranties shall survive
the Closing.
4.1 Standing and Authority for Business. Seller and Buyer each have
full power and authority to own the Assets. Seller and Buyer are each duly
organized and validly existing under the laws of the State of Utah, have all
requisite power and authority (corporate and other) to own its properties and
conduct business as now being conducted, is duly qualified to do business in
each jurisdiction in which the character of its properties owned or leased by it
therein or in which the transaction of business makes such qualification
necessary, except where the failure to so qualify would not have a material
adverse effect on Seller or Buyer or their business, operations, properties,
assets or condition (financial or otherwise), and is not transacting business,
or operating any properties owned or leased by it, in violation of any provision
of federal or state law or any rule or regulation promulgated there under, which
violation would have a material adverse effect on Seller or Buyer or their
business, operations, properties, assets or condition (financial or otherwise).
4.2 Authority for Agreement. The Seller and Buyer have the right, power
and authority to enter into this Agreement and to perform its, his, her or their
obligations hereunder. The execution and delivery of this Agreement by the
Seller and Buyer have been duly authorized by the appropriate authorities and
manages. This Agreement has been duly and validly executed and delivered by the
parties and is enforceable against the parties in accordance with its terms.
4.3 Current Operation of the Assets by Buyer. Buyer is currently
administering and/or operating the Assets as an independent contractor pursuant
to a Memorandum of Understanding. As the current administrator/operator of the
Assets, Buyer is familiar will all aspects of administration and operation of
the Assets to be sold pursuant to this Agreement and set forth in Subsection
1.1, above, therefore Seller makes no warranties regarding the Assets, except as
expressly set forth herein.
4.4 Brokers and Finders. No person has acted directly or indirectly as
a broker, finder or financial advisor for Seller or the Buyer in connection with
the transaction contemplated by this Agreement and no person is entitled to any
broker's, finder's, financial advisory or similar fee or payment in respect
thereof based in any way on any agreement, arrangement or understanding made by
or on behalf of Seller or Buyer.
4.5 Fixed Assets, Vehicles and Tangible Personal Property Excluded.
Except as expressly and specifically listed on Schedule 4, the fixed assets,
vehicles and tangible personal property of the Test, including, but not limited
to, operating equipment, electronic devices, trunk and distribution coaxial and
optical fiber cable, amplifiers, power suppliers, conduit, vaults and pedestals,
grounding and pole hardware, subscribers devices (including converters,
encoders, transformers behind television sets and fittings), head-end hardware
(including origination, earth stations, transmission and distribution systems),
test equipment, video equipment, computers, tools, parts, accessories, and other
tangible personal property necessary for the operation of the Test are not
included as part of the assets sold and to be transferred as part of this
Agreement. All such vehicles, operating equipment, electronic devices, trunk and
distribution coaxial and optical fiber cable, amplifiers, power suppliers,
conduit, vaults and pedestals, grounding and pole hardware, subscriber's devices
(including converters, encoders, transformers behind television sets and
fittings), head-end hardware (including origination, earth stations,
transmission and distribution system), test equipment, video equipment,
computers, tools, parts, accessories and other tangible personal property shall
at all times remain the assets of Seller and in Seller's possession and Buyer's
use of any of these assets shall be undertaken only pursuant to a separate
Network Lease Agreement to be entered into between the parties simultaneous with
execution of this Agreement. Where such assets are transferred pursuant to
Schedule 4, Buyer acknowledges that when received by Buyer, such assets are
substantially fit for the purposes for which they are utilized and are, to be
the best of Buyer's and Seller's knowledge, free from defects which could cause
them to fail, or are sold "as is."
4.6. Personnel. Buyer is not assuming any obligation or liability in
respect to Seller's full-time or part-time employees, contractors or any other
agent or personnel, and Buyer shall have no obligation, liability or
responsibility to them.
4.7 Subscribers, Billings and Receivables. Until Closing, Buyer agrees
to provide Seller with access to a monthly report regarding the Assets,
including a complete list of:
(1) The subscribers of the Test that Buyer serves on an ongoing
basis, including name, address, location and current billing
rate; and
(2) An accurate and complete aging of all accounts and notes
receivable from subscribers as of the last day of the month
showing amounts due in thirty (30) day aging categories.
4.8 Compliance With Laws. Until Closing Seller agrees to operate the
Assets in material compliance with all federal, state and local laws,
ordinances, codes, rules, regulations, Governmental Permits, orders, judgments,
awards, decrees, consent judgments, consent orders and requirements applicable
to Seller relating to the Test (collectively "Laws"), including, but not limited
to, Laws relating to the public health, safety or protection of the environment
(collectively "Environmental Laws") and without limiting the applicability of
the foregoing, Buyer agrees to immediately notify Seller of any violation of law
or of any notice of any private, administrative or judicial action, or notice of
any intended private, administrative or judicial action relating to its
operation of the Test.
4.9 Patents, Trademarks, Trade Names, etc. With the exception of the
name "iProvo," no patents, trade names, fictitious business names, trademarks,
service marks, copyrights or other intellectual property is currently used in
the operation of the Test or in connection with the Assets.
4.10 Suppliers and Subscribers. The relations between Buyer, Seller and
the subscribers of the Test are good. Buyer and Seller have no knowledge of any
fact (other than general economic and industry conditions) which indicates that
any of the subscribers of the Test intends to terminate, limit or reduce its
relationship with Seller or Buyer relating to the Test.
4.11 Absence of Certain Practices. Seller and Buyer have not directly
or indirectly within the past year given or agreed to give any gift or similar
benefit to any subscriber, supplier, governmental employee or other person who
is or may be in a position to help or hinder the Test in connection with any
actual or proposed transaction which (a) if not given in the past might have had
an adverse effect on the financial condition, business or results of operations
of the Test, or (b) if not continued in the future, might adversely affect the
financial condition, business or operations of the Test or which might subject
Buyer or Seller to a penalty in any private or governmental litigation or
proceeding.
4.12 Disclosure Schedules. Any matter disclosed by Seller on any
Schedule to this Agreement shall be deemed to have been disclosed on every other
Schedule that refers to such Schedule by cross reference so long as the nature
of the matter disclosed is obvious from a fair reading of the Schedule on which
the matter is disclosed.
4.13 No Misleading Statements. The representations and warranties of
Seller and Buyer contained in this Agreement, the Exhibits and Schedules hereto
attached and all other documents and information furnished to Buyer and Seller
and their representatives pursuant hereto are complete and accurate in all
material respects and do not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made and to be
made not misleading.
5. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller that each of the following
representations and warranties is true as of the Closing Date, and agrees that
such representations and warranties shall survive the Closing:
5.1 No Contractual Restrictions. No provisions exist in any article,
document or instrument to which Buyer is a party or by which Buyer is bound
which would be violated by consummation of the transaction contemplated by the
Agreement.
6. CLOSING DELIVERIES.
At the Closing, the respective parties shall make the deliveries
indicated:
6.1 Buyer's Deliveries.
(1) Buyer shall deliver the cash portion of the Purchase Price
required to be delivered on the Closing Date pursuant to
Section 1.4 to Seller;
6.2 Seller's Deliveries.
At Closing, Seller shall deliver to Buyer:
(1) An executed Bill of Sale or Bills of Sale and other
instruments of transfer and conveyance for the full and
complete sale, transfer, conveyance, assignment and delivery
of the Assets to Buyer free and clear of all Liens in a form
acceptable to Buyer in its sole discretion;
(2) An executed assignment or transfer of Assumed Contracts and
Governmental Permits accompanied by all third party consents
required with respect thereto, if any;
(3) Releases and Uniform Commercial Code termination statements,
executed by the appropriate secured party and in the form
appropriate for recording or filing, as applicable, sufficient
to release any lien against the Assets;
(4) A copy of resolutions duly adopted by the Provo City Council
authorizing the execution and delivery of this Agreement, the
Bill of Sale, and any other agreement required to be executed
and delivered by Seller in connection herewith; and
(5) Seller shall execute and deliver such other documents and
instruments as are reasonably requested by Buyer in order to
consummate the transaction contemplated by this Agreement.
7. INDEMNIFICATION.
7.1 Mutual Indemnification. Subject to Section 7.2, Seller and Buyer
each covenant and agree that they will indemnify and hold harmless the other
party and their respective directors, officers, attorneys, representatives and
agents and their respective successors and assigns (collectively the
"Indemnitees"), from and after the date of this Agreement, against any and all
losses, damages, assessments, fines, penalties, adjustments, liabilities,
claims, deficiencies, costs, expenses (including specifically, but without
limitation, reasonable attorneys' fees and expenses of investigation),
expenditures, including, without limitation, identified by an Indemnitee with
respect to each of the following contingencies until the expiration of the
applicable statute of limitations (all constitute the "Indemnity Events"):
(1) Any misrepresentation, breach of warranty, or nonfulfillment
of any agreement or covenant pursuant to the terms of this
Agreement or any misrepresentation in or omission from any
Exhibit, Schedule, list, certificate, or other instrument
pursuant to the terms of the Agreement, regardless of whether,
in the case of a breach of a representation or a warranty, the
other party relied on the truth of such representation or
warranty or had any knowledge of any breach thereof.
(2) The design, development, construction or operation of any
"Environmental Site" as hereinafter defined, during any period
on or prior to the Closing Date. As used in this Agreement,
"Environmental Site" shall mean any facility, processing,
treatment or disposal facility, and any other business site or
any other real property owned, leased, controlled or operated
by a party or by any predecessor thereof on or prior to the
Closing Date and used in the Test, provided however, as to
activities of such predecessors, only to the extent that a
party had knowledge of such activities. As used in this
Agreement, "Environmental Site Losses" shall mean any and all
losses, damages (including exemplary damages and penalties),
liabilities, claims, deficiencies, costs, expenses, and
expenditures (including, without limitation, expenses in
connection with site evaluations, risk assessments and
feasibility studies) arising out of or required by an interim
or final judicial or administrative decree, judgment,
injunction, mandate, interim or final permit condition or
restriction, cease and desist order, abatement order,
compliance order, consent order, clean-up order, exhumation
order, reclamation order or any other remedial action that is
required to be undertaken under federal, state or local law in
respect of operating activities on or affecting any facility
or any other Environmental Site including, but not limited to
(i) any actual or alleged violation of any law or regulation
respecting the protection of the environmental, including, but
not limited to, RCRA and CERCLA or any other law or regulation
respecting the protection of the air, water and land and (ii)
any remedies or violations, whether by a private or public
action, alleged or sought to be assessed as a consequence,
directly or indirectly, of any "Release" (as defined below) of
pollutants (including odors) or Hazardous Substances from any
facility or any other Environmental Site resulting from
activities thereat, whether such release is into the air,
water (including groundwater) or land and whether such Release
arose before the Closing Date. The term "Release" as used
herein means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing into the ambient environment.
(3) All actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of
investigation) incident to any the foregoing.
7.2 Limitations on Seller's Indemnities. The maximum amount which the
Buyer Indemnitees can recover from Seller as a result of one or more Indemnity
Events pursuant to the provisions hereof for Claims shall not in the aggregate
exceed the Purchase Price.
7.3 Notice of Indemnity Claim.
(1) In the event that any claim ("Claim") is hereafter asserted
against or arises with respect to any Indemnitee as to which
such Indemnitee may be entitled to indemnification hereunder,
Indemnitee shall notify the other party ( the "Indemnifying
Party") in writing thereof (the "Claims Notice") within sixty
(60) days after (i) receipt of written notice of commencement
of any third party litigation against such Indemnitee, (ii)
receipt by such Indemnitee of written notice of any third
party claim pursuant to an invoice, notice of claim or
assessment, against such Indemnitee, or (iii) such Indenmnitee
becomes aware of the existence of any other event in respect
of which indemnification may be sought from the Indemnifying
Party (including, without limitation, any inaccuracy of any
representation or warranty or breach of any covenant). The
Claims Notice shall describe the Claim and the specific facts
and circumstances in reasonable detail, and shall indicate the
amount, if known, or an estimate, if possible, of the losses
that have been or may be incurred or suffered by the
Indemnitee.
(2) The Indemnifying Party may elect to defend any Claim for money
damages where the cumulative total of all Claims (including
such Claims) does not exceed the limit set forth in Section
7.2 at the time the Claim is made, by the Indemnifying Party's
own counsel; provided, however, the Indemnifying Party may
assume and undertake the defense of such a third party Claim
only upon written agreement by the Indemnifying Party that the
Indemnifying Party is obligated to fully indemnify Indemnitee
with respect to such action. Indemnitee may participate, at
Indemnitee's own expense, in the defense of any Claim assumed
by the Indemnifying Party. Without the written approval of
Indemnitee, which approval shall not be unreasonably withheld,
the Indemnifying Party shall not agree to any compromise of a
Claim defended by the Indemnifying Party.
(3) If, within thirty (30) days of the Indemnifying Party's
receipt of a Claims Notice, the Indemnifying Party shall not
have provided the written agreement required by Section 7.3(2)
and elected to defend the Claims, Indemnitee shall have the
right to assume control of the defense and/or compromise of
such Claim, and the costs and expenses of such defense,
including reasonable attorneys' fees shall be added to the
Claim. The Indemnifying Party shall promptly, and in any event
within thirty (30) days reimburse Indemnitee for the costs of
defending the Claim, including attorneys' fees and expenses.
(4) The party assuming the defense of any Claim shall keep the
other party reasonably informed at all times of the progress
and development of its or their defense of and compromise
efforts with respect to such Claim and shall furnish the other
party with copies of all relevant pleadings, correspondence
and other papers. In addition, the parties to this Agreement
shall cooperate with each other and make available to each
other and their representatives all available relevant records
or other materials required by them for their use in
defending, compromising or contesting any Claim. The failure
to timely deliver a Claims Notice or otherwise notify the
Indemnifying Party of the commencement of such actions in
accordance with this Section 7.3 shall not relieve the
Indemnifying Party from the obligation to indemnify hereunder
but only to the extent that the Indemnifying Party establishes
by competent evidence that is prejudiced thereby.
(5) In the event both the Indemnitee and the Indemnifying Party
are named as defendants in an action or proceeding initiated
by a third party, they shall both be represented by the same
counsel (on whom they shall agree), unless such counsel, the
Indemnitee, or the Indemnifying Party shall determine that
such counsel has a conflict of interest in representing both
the Indemnitee and the Indemnifying Party in the same action
or proceeding and the Indemnitee and the Indemnifying Party do
not waive such conflict to the satisfaction of such counsel.
7.4 Survival of Representations, Warranties and Agreements. The
representations and warranties of the parties contained in this Agreement and in
any certificate, Exhibit or Schedule delivered pursuant hereto, or in any other
writing delivered pursuant to the provisions of the Agreement (the
"Representations and Warranties") and the liability of the party making such
Representations and Warranties for breaches thereof shall survive the
consummation of the transactions contemplated hereby. The parties hereto in
executing and delivering and in carrying out the provisions of the Agreement are
relying solely on the representations, warranties, Schedules, Exhibits,
agreements and covenants contained in this Agreement, or in any writing or
document delivered pursuant to the provisions of this Agreement, and not upon
any representation, warranty, agreement, promise or information, written or
oral, made by any persons other than as specifically set forth herein or
therein.
7.5 No Exhaustion of Remedies or Subrogation. The parties waive any
right to require any Indemnitee to (i) proceed against any other person or (ii)
pursue any other remedy whatsoever in the power of any Indemnitee.
7.6 Indemnity by Buyer. Buyer covenants and agrees that it will
indemnify and hold harmless Seller and the Seller's directors, officers,
trustees, partners, attorneys and agents and their respective successors and
assigns, against all losses, damages, assessments, fines, penalties,
adjustments, liabilities, claims, deficiencies, costs and expenses (including
specifically, but without limitation, reasonable attorneys' fees and expense of
investigation) with respect to any act or omission of Buyer, its agents,
servants or employees occurring from and after the Closing Date in connection
with Buyer's termination of the Test and the conversion of Assets into Buyer's
regular business operations.
8. OTHER POST-CLOSING COVENANTS.
8.1 Restrictive Covenants. Buyer acknowledges that Buyer is currently
administering and/or operating the Assets as part of the Test and as an
independent contractor pursuant to a Memorandum of Understanding and as the
purchaser of the Assets (including the goodwill arising from the Test), (i) is
and will be engaged in the business as contemplated by the Test; (ii) Buyer is
intimately familiar with the Test and the operation of a retail
telecommunications business; (iii) the Test is currently being conducted in the
City of Provo, Utah; (iv) Buyer has had access to trade secrets of, and
confidential information concerning, the Test; and (v) the agreements and
covenants contained in this Section 8.1 are essential to protect the property
value of the Assets and the goodwill created by the Test. Buyer and Seller
covenant and agree as set forth in (1), (2), (3) and (4) below with respect to
the termination of the Test and conversion of the Assets to Buyers retail
telecommunications business:
(1) Non-Compete. Except as contemplated by this Initial Provider
Network Access And Use Agreement and the Exhibits thereto,
including but not limited to the "open access" and "backup
service" provisions of the Agreement, Seller shall not, within
the City of Provo, Utah, engage in the operation of a cable
television business in competition with Buyer while this
Agreement is in effect, and except that nothing herein shall
prevent Seller from exercising any of its rights under or
arising from this Agreement.
(2) Confidential Information. Subject to applicable law, at all
times Buyer and Seller shall keep secret and retain in
strictest confidence, all data and information relating to the
Test("Confidential Information"), including without
limitation, the existence of and terms of this Agreement,
know-how, trade secrets, subscriber lists, supplier lists,
details of contracts, pricing policies, operational methods,
marketing plans or strategies, bidding practices and policies,
product development techniques or plans, and technical
processes; provided, however, that the term "Confidential
Information" shall not include information that (i) is or
becomes generally available to the public other than as a
result of disclosure by Seller, or (ii) is general knowledge
in the cable television and internet provider business and not
specifically related to the Test.
(3) Property of the Test. All memoranda, notes, lists, records and
other documents or papers (and all copies thereof) relating to
the Test, including such items stored in computer memories, on
microfiche or by any other means, made or compiled by or on
behalf of Seller, relating to the Test, but excluding any
materials maintained by any attorneys for Seller, prior to the
Closing, are and shall remain the property of the Seller until
Closing but will be delivered or made available to the Buyer
at the Closing.
(4) Non-Solicitation. Without the consent of the Seller, which may
be granted or withheld by the Seller in its discretion, Buyer
shall not solicit any employees of the Seller to leave the
employ of the Seller or its Affiliates and join Buyer in any
business endeavor owned or pursued by Buyer.
(5) No Disparagement. Neither the Seller nor the Buyer shall, in
any way to any person, denigrate or derogate the Test, whether
or not such denigrating or derogatory statements shall be true
and are based on acts or omissions which are learned by the
Buyer. A statement shall be deemed denigrating or derogatory
to any person if it is not true and adversely affects the
regard or esteem in which such person or entity is held by
such person. Without limiting the generality of the foregoing,
neither the Seller nor the Buyer shall, directly or indirectly
in any way in respect of any such company or any such
directors or officers, communicate with, or take any
discretionary action which is adverse to the position of any
such company with any person. This paragraph does not apply to
the extent that testimony is required by legal process,
provided that the party has received not less than five (5)
days' prior written notice of such proposed testimony.
8.2 Rights and Remedies Upon Breach. If Seller or Buyer threaten to
commit a breach of, any of the provisions of Section 8.1(1), (2), (3), (4) or
(5) herein (the "Restrictive Covenants"), the Buyer shall have the following
rights and remedies, each of which rights and remedies shall be independent of
the others and severally enforceable, and each of which is in addition to, and
not in lieu of, any other rights and remedies available to the Buyer at law or
in equity:
(1) Specific Performance. The right and remedy to have the
Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or
threatened breach of the Restrictive Covenants would cause
irreparable injury to the Buyer and that money damages would
not provide an adequate remedy to the Buyer. Accordingly, in
addition to any other rights or remedies, the Buyer shall be
entitled to injunctive relief to enforce the terms of the
Restrictive Covenants and to restrain Seller from any
violation thereof.
(2) Accounting. The right and remedy to require the other party to
account for and pay over to all compensation, profits, monies,
accruals, increments or other benefits derived or received as
the result of any transaction constituting a breach of the
Restrictive Covenants.
(3) Severability of Covenants. The parties acknowledge and agree
that the Restrictive Covenants are reasonable and valid in
geographical and temporal scope and in all other respects. If
any court determines that any of the Restrictive Covenants, or
any part thereof, if invalid or unenforceable, the remainder
of the Restrictive Covenants shall not thereby be affected and
shall be a given full effect, without regard to the invalid
portions.
(4) Covenant Adjustment. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable
because of the duration or geographic scope of such provision,
such court shall reduce the duration or scope of such
provision, as the case may be, to the extent necessary to
render it enforceable and, in its reduced form, such provision
shall then be enforced.
(5) Enforceability in Jurisdiction. The parties intend to and
hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the
geographic scope of the Restrictive Covenants.
9. TERMINATION OF AGREEMENT.
9.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date upon ninety (90) days prior written notice to the other party:
(1) By the Buyer, by written notice to the Seller if the
representations and warranties of the Seller shall not have
been true and correct in all respects as of the date when
made; or
(2) by the Buyer or by the Seller, if the required consents have
not been granted, and specifically if the approval of the
purchase by the Provo City Council has not been given or has
been revoked; or
(3) by the Seller if the representations and warranties of the
Buyer shall not have been true and correct in all respects as
of the date when made, or if the franchise to operate a cable
system granted to Buyer by Provo City is for any reason
declared invalid or void, or is suspended or revoked; or
(4) as provided in Subsection 1.5(3) or by the mutual written
consent of Buyer and Seller.
(5) Whenever this Agreement is terminated pursuant to this
Section, Buyer and Seller agree that Buyer's Network Lease and
Maintenance Agreement and Franchise Agreement shall
automatically terminate as of the date of the termination of
this Agreement without further action by either party.
9.2 Notice and Effect of Termination. On termination of this Agreement,
the transaction contemplated herein shall forthwith be abandoned and all
continuing obligations and liabilities of the parties under or in connection
with this Agreement shall be terminated and of no further force or effect;
provided, however, that nothing herein shall relieve any party from liability
for any misrepresentation, breach of warranty or breach of covenant contained in
this Agreement prior to such termination.
10. GENERAL.
10.1 Additional Conveyances. Following the parties each delivers or
causes to be delivered at such times and places as shall be reasonably agreed
upon such additional instruments as Buyer or Seller may reasonably request for
the purpose of carrying out this Agreement. The parties will cooperate on and
after the Closing Date in furnishing information, evidence, testimony and other
assistance in connection with any actions, proceedings or disputes of any nature
with respect to matters pertaining to all periods prior to the date of this
Agreement.
10.2 Assignment. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto, the successors or assigns of Buyer and the
Seller and their respective heirs, legal representatives or assigns; provided,
however, that any such assignment shall be subject to the terms of this
Agreement and shall not relieve the assignor of its or his responsibilities
under this Agreement.
10.3 Willing Buyer and Seller and Coordination of Public Announcements.
Buyer and Seller warrant and agree that they are entering into this agreement
willingly and without duress or undue influence, economic or otherwise. Seller
and Buyer agree to coordinate the timing of all public statements and
announcements and to cooperate in explaining this Agreement to the public.
10.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
10.5 Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if in writing and either
delivered personally, or mailed by postage prepaid registered or certified U.S.
mail, return receipt requested, to the addresses designated below or such other
addresses as may be designated in writing by notice given hereunder, and shall
be effective upon personal delivery thereof or upon delivery by registered or
certified U.S. mail.
If to Buyer: Chief Operations Officer
Attn.: Robert Murtagh
Video Internet Broadcasting Corporation
135 Basin Street SW
Ephrata, Washington 98823
If to Seller: Provo City Attorney
Attn: Robert West
Provo City Attorney's Office
351 West Center Street
P.O. Box 1849
Provo, Utah 84603
10.6 Attorneys' Fees. In the event of any dispute or controversy
between Buyer and Seller relating to the interpretation of this Agreement or to
the transaction contemplated hereby, the prevailing party shall be entitled to
recover from the other party reasonable attorneys' fees and expenses incurred by
the prevailing party. Such award shall include post-judgment attorney's fees and
costs.
10.7 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Utah without regard to its conflict
of laws provisions.
10.8 Payment of Fees and Expenses. Whether or not the transactions
herein contemplated shall be consummated, each party hereto will pay its own
fees, expenses and disbursements incurred in connection herewith and all other
costs and expenses incurred in the performance and compliance with all
conditions to be performed hereunder.
10.9 Incorporation by Reference. All Schedules and Exhibits attached
hereto are incorporated herein by reference as though fully set forth at each
point referred to in this Agreement.
10.10 Captions. The captions in this Agreement are for convenience only
and shall not be considered a part hereof or affect the construction or
interpretation of any provisions of this Agreement.
10.11 Number and Gender of Words. Whenever the singular number is used
herein, the same shall include the plural where appropriate, and shall apply to
all of such number, and to each of them, jointly and severally, and words of any
gender shall include each other gender where appropriate. Without limiting the
generality of the foregoing, any reference to "Partners" shall apply to each
individual "Partner."
10.12 Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) and the other documents delivered pursuant hereto constitute
the entire Agreement and understanding between Seller and the Buyer and
supersede any prior agreement and understanding relating to the subject matter
of this Agreement. This Agreement may be modified or amended only by a written
instrument executed by the Seller and the Buyer.
10.13 Waiver. No waiver by any party hereto at any time of any breach
of, or compliance with, any condition or provision of this Agreement to be
performed by any other party hereto may be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or at any prior or
subsequent time.
10.14 Construction. The language in all parts of this Agreement must be
in all cases construed simply according to its fair meaning and not strictly for
or against any party. Unless expressly set forth otherwise, all references
herein to a "day" are deemed to be a reference to a calendar day. All references
to "business day" mean any day of the year other than a Saturday, Sunday or a
public or bank holiday in Utah. Unless expressly stated otherwise,
cross-references herein refer to provisions within this Agreement and are not
references to the overall transaction or to any other document.
Signature Page to Follow
DATED effective as of the date first above written.
Provo City
By: ______________________________________
Mayor Lewis K. Billings
ATTEST:
__________________________________________
Provo City Recorder
APPROVED AS TO FORM:
__________________________________________
Provo City Attorney
Video Internet Broadcasting Corporation, d.b.a.
HomeNet Communications of Utah.
By: ______________________________________
Michael W. Devine (President)
ATTEST BY:
______________________________________________
Name:
Title:
SCHEDULE 1
Assets
1. All subscribers accounts including: a. 252 Residential subscriber
accounts b. 258 EBUs for bulk subscriber accounts c. 52 EBUs for
commercial accounts.
2. Residential Subscriber accounts will be revisited thirty (30) days from
the execution of this Agreement to determine if the seventeen (17)
bad-debt accounts have a change in status. Any accounts having become
current or missed payment plans will be appropriately disposed in the
final total.
3. The goodwill associated with iProvo.
4. All proprietary subscriber information contained in computer records,
including subscriber lists and accounts.
SCHEDULE 2
Assumed Contracts
All bulk accounts (MDU) Contracts.
All Commercial Accounts Contracts.
SCHEDULE 3
Subscribers
SCHEDULE 4
Fixed Assets, Vehicles And Tangible Personal Property Transferred
None
EXHIBIT J
PROVO CABLE ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") dated as of ______________,
2004, is entered into by PROVO CITY, a political subdivision of the State of
Utah (hereinafter referred to as "Seller") and homenet utah, a Washington
corporation registered to do business in Utah (hereinafter referred to as
"Buyer").
RECITALS
WHEREAS, the Seller is the owner of certain assets used in the business
of providing cable television and related services to the residents of the City
of Provo, Utah, previously referred to as "Provo Cable" (the "Business") and
currently being operated by Buyer pursuant to a memorandum of understanding
between Seller and Buyer, (the "Memorandum of Understanding"); and
WHEREAS, Buyer wishes to purchase from Seller, and Seller wishes to
sell to Buyer, certain assets of the Business;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto, each intending to be bound hereby, agree as
follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 Sale and Transfer of Assets. Subject to and in accordance with the
terms and conditions of this Agreement, at the Closing (as defined below) on the
Closing Date (as defined below) Seller shall sell, convey, transfer, deliver and
assign to Buyer all of the assets, property and businesses listed on Schedule 1
(collectively, the "Assets") free and clear of all of any liens, security
interests, pledges, assignments, restrictions and other encumbrance of any kind
or nature, including without limitation:
(1) Seller's rights and benefits in all accounts of current active
customers as listed on Schedule 1 and defined below in Section
1.10, and contracts, and all accounts receivable.
(2) The "goodwill" associated with the Provo Cable Company, Inc.;
(3) Seller's confidential and/or proprietary customer information,
including customer lists and accounts, but with respect to
accounts payable, only those that accrue after the date of
this Agreement first set forth above;
1.2 Assumption of Assumed Contracts. Buyer hereby assumes and agrees to
perform all of the obligations and commitments of Seller accruing after the
Closing Date, under or with respect to each contract set forth on Schedule 2
(collectively the "Assumed Contracts" or individually an "Assumed Contract"),
but not including any obligation or liability arising or occurring prior to the
Closing Date. Buyer shall have no obligation with respect to any contract not
constituting an Assumed Contract set forth in Schedule 2.
1.3 Excluded Liabilities. Except for the Assumed Contracts and
regardless of any disclosure to Buyer, Buyer is not, as part of this agreement,
assuming any other duties, responsibilities, obligations or liabilities of
Seller or to which Seller or any of the Assets or the Business may be bound or
affected, of whatever kind or nature, whether known, unknown, contingent or
otherwise (and including without limitation taxes arising from the operation of
the Business) (the "Excluded Liabilities"). However, the parties to this
Agreement currently have other obligations to each other arising from the
Memorandum of Understanding, thereof, and the parties contemplate entering into
other necessary agreements for the continued operation of the Business after the
sale of the Assets pursuant to this Agreement. These other agreements shall be
governed by their own provisions and shall not be affected by this Subsection
1.3.
1.4 Purchase Price. The total purchase price to be paid for the Assets
shall be Two Hundred Seventy-five Dollars ($275.00) per adjusted current active
customer as defined in section 1.10, herein (the "Purchase Price"), and shall be
payable to Seller as set forth in Section 1.5, herein. The count representing
the total adjusted current active customers will be made using the following
calculation as the basis for the minimum number of customers to be purchase with
the actual number purchased to be determined as actual customers are converted
to iProvo customers as tracked and agreed upon by the parties:
Total Single Family Resident current active customers * 40% = Adjusted
SFR current active customers
Total MDU EBU current active customers * 90% = Adjusted MDU current
active customers
Total business EBUs and other active customer EBUs * 100% = Adjusted
business and other active customers
Adjusted SFR + Adjusted MDU + Adjusted business and other active
customers = Total Adjusted current active customers
1.5 Payment of Purchase Price.
(1) Buyer shall make to Seller, in immediately available funds,
equal monthly payments on the principal balance of the
Purchase Price for a term not to exceed two (2) years from the
Closing Date.
(2) The outstanding principal balance hereof shall bear interest
at the rate of six percent (6%) per annum from and after the
Closing Date, until paid. Interest payable hereunder shall
accrue daily and be calculated on the basis of a three hundred
sixty five (365) day year and the actual number of days
elapsed in any particular calendar month.
(3) Any and all payments shall be due on or before the first day
of the month beginning the month following the Closing Date.
(4) Any payments made during the time between the signing of the
Memorandum of Understanding and the Closing Date set forth in
this Agreement shall be applied to the Purchase Price.
1.6 Retained Title and Interest. Until the purchase price is paid in
full at Closing, Seller shall retain title to the Assets set forth in Subsection
1.1, above. Buyer shall not have the right to sell, lease, sublease or in any
way alienate Seller's interest or Buyer's own interest in the Assets set forth
in subsection 1.1, above, nor to use said assets for the purpose of securing any
debt, nor to create any right or interest in any third party. Although the
physical possession and apparent interest in the Assets may be transferred to
Buyer as of the date of this Agreement, until the purchase price is paid in full
at Closing, Seller shall have the right to show itself as the owner of the
Assets and/or as a secured party on any deed, UCC form or other public or
private document or disclosure form.
1.7 Certain Taxes. Any taxes owed, if any, to any taxing entity in
connection with or as a result of the transfer of the Assets under the terms of
this Agreement and the transactions contemplated hereby, including, but not
limited to, any and all sales, use, excise, transfer and conveyance taxes
payable or assessable, shall be paid by Buyer. However, Buyer shall not be
responsible for any business, occupation, income, withholding, possessor
interest or similar tax or assessment or any other tax or fee of any kind
relating to any period on or prior to the date of this Agreement with respect to
Seller, the Assets, or the ownership, operation or management of the Business.
1.8 Prorations. Seller's and Buyer's responsibilities for rent,
insurance premiums, personal property taxes, water, gas, electricity and other
utilities, and other periodic ordinary and necessary operating costs payable
with respect to the Assets to the effective date of this Agreement shall be
governed by the Memorandum of Understanding until this Agreement is executed and
becomes effective, whereupon the Memorandum of Understanding, and any renewal
thereof, shall terminate.
1.9 Customers Defined. "Current active customer" shall be defined
according to the following:
(1) An individual account paying the standard monthly rate for
cable service;
(2) An account that is current and in good standing as of the date
of the Memorandum of Understanding (MOU) or becomes current
within 45 days of the MOU. Buyer shall make all good faith
efforts necessary to maximize the number of subscribers that
qualify as active.
(3) All "bulk" accounts (apartment complexes, etc.) as converted
to customers by using the following formula for Equivalent
Billing Units: Total monthly payment/ standard monthly rate
($25.95) = EBUs. Each EBU shall equate to one customer.
(4) Total monthly payments from other sources (e.g. internet
subscribers, premium service revenues, contract payments for
fiber connection to BYU) shall beconverted to customers in the
same manner as bulk accounts in Section 1.10 (3) above.
(5) The count of "current active subscribers" will be adjusted by
May 4, 2004 for subscribers that terminate service primarily
due to the April 1st 2004 price increase for basic cable
service from $25.95 to $29.95 per month. The customer support
staff of the Buyer, to ensure that the reason for their
termination is substantially known, will interview any
subscribers that terminate service during this sixty (60) day
period.
1.10 Network Lease. Buyer agrees to lease the Provo Cable network
according to the terms and conditions of the Provo Cable Network Lease Agreement
attached hereto as Appendix A.
2. SETTLEMENT AND CLOSING.
2.1 Time and Place of Closing. Subject to the terms and conditions of
this Agreement, the closing of the transactions contemplated herein (the
"Closing") shall take place as soon as practical following the satisfaction of
all the Conditions to Closing set forth in Section 3. The actual date of the
closing is hereinafter referred to as the "Closing Date." The Closing or
Settlement shall take place at the Provo City Attorneys Office located at 351
West Center, Provo, Utah.
3. CONDITIONS TO CLOSING.
The consummation of the transactions contemplated by this Agreement is
conditioned upon the following:
3.1 Approval of This Agreement, Network Lease Agreement and Franchise
Agreement by the Provo City Municipal Council. As conditions precedent to the
purchase of the Assets by Buyer is the approval by a majority vote of the Provo
City Municipal Council during a regularly scheduled (or specially convened)
Council meeting authorizing the Mayor to negotiate and execute this Asset
Purchase Agreement, together with documents related thereto, and the Provo City
Municipal Council approving a Network Lease and Maintenance Agreement and
Franchise Agreement between the City of Provo, Utah, and Buyer allowing Buyer to
operate a cable system in Provo City, Utah.
3.2 Television Services/Signal Provider Consents. If required, Seller
hereby agrees to use its best efforts to obtain consents in writing from each
television service/signal provider for transfer of Affiliate Agreements between
Seller and such providers. However, in view of the fact that Buyer is
negotiating its own agreements with the service/signal providers, failure by
Seller to obtain consents from all providers shall not preclude the parties from
Closing.
3.3 Facility Lease Consents. Buyer shall have the option of leasing one
customer service representative station and one additional desk at Seller's
current office space located at 251 West 800 North Provo, Utah 84603 at the rate
of $250.00 per month, including data and local phone connection, for a maximum
of twelve (12) months unless otherwise agreed upon by the parties. Buyer's
telephone expenses during the period of office space lease from Seller shall be
paid by Buyer.
3.4 Delivery of Documents. Buyer and Seller shall have signed and
delivered to each other all documents and other deliverables required by Section
6 of this Agreement.
3.5 All Other Consents. Buyer shall obtain all necessary consents,
including all required Government Consents, if any, that may be required for
Buyer to acquire and fully operate the Assets and the Business.
3.6 No Material Adverse Change. Buyer shall be satisfied, in its sole
discretion, that the Assets and the Business have experienced no material
adverse changes.
3.7 Verification of Customer Accounts. Prior to the Closing Date, Buyer
shall have the right to verify by inspection, audit or other means that such
customer accounts are active and current as of the Closing Date.
4. REPRESENTATIONS AND WARRANTIES OF BOTH SELLER AND BUYER.
Seller and Buyer, (i) represents and warrants that each of the
following representations and warranties is true and complete as of the Date of
this Agreement with respect to the Seller, Buyer, the Assets and the Business,
as the case may be, and (ii) agree that such representations and warranties
shall survive the Closing.
4.1 Standing and Authority for Business. Seller and Buyer each have
full power and authority to own the Assets and to operate the Business. Seller
and Buyer are each duly organized and validly existing under the laws of the
State of Utah, have all requisite power and authority (corporate and other) to
own its properties and conduct business as now being conducted, is duly
qualified to do business in each jurisdiction in which the character of its
properties owned or leased by it therein or in which the transaction of business
makes such qualification necessary, except where the failure to so qualify would
not have a material adverse effect on Seller or Buyer or their business,
operations, properties, assets or condition (financial or otherwise), and is not
transacting business, or operating any properties owned or leased by it, in
violation of any provision of federal or state law or any rule or regulation
promulgated thereunder, which violation would have a material adverse effect on
Seller or Buyer or their business, operations, properties, assets or condition
(financial or otherwise).
4.2 Authority for Agreement. The Seller and Buyer have the right, power
and authority to enter into this Agreement and to perform its, his, her or their
obligations hereunder. The execution and delivery of this Agreement by the
Seller and Buyer have been duly authorized by the appropriate authorities and
manages. This Agreement has been duly and validly executed and delivered by the
parties and is enforceable against the parties in accordance with its terms.
4.3 Current Operation of Business by Buyer. Buyer is currently
operating the Business as an independent contractor pursuant to a Memorandum of
Understanding. As the current operator of the Business, Buyer is familiar will
all aspects of the Business and the Assets to be sold pursuant to this Agreement
and set forth in Subsection 1.1, above, therefore Seller makes no warranties
regarding the business or assets, except as expressly set forth herein.
4.4 Brokers and Finders. No person has acted directly or indirectly as
a broker, finder or financial advisor for Seller or the Buyer in connection with
the transaction contemplated by this Agreement and no person is entitled to any
broker's, finder's, financial advisory or similar fee or payment in respect
thereof based in any way on any agreement, arrangement or understanding made by
or on behalf of Seller or Buyer.
4.5 Fixed Assets, Vehicles and Tangible Personal Property Excluded.
Except as expressly and specifically listed on Schedule 3, the fixed assets,
vehicles and tangible personal property of the Business, including, but not
limited to, operating equipment, electronic devices, trunk and distribution
coaxial and optical fiber cable, amplifiers, power suppliers, conduit, vaults
and pedestals, grounding and pole hardware, subscribers devices (including
converters, encoders, transformers behind television sets and fittings),
head-end hardware (including origination, earth stations, transmission and
distribution systems), test equipment, video equipment, computers, tools, parts,
accessories and other tangible personal property necessary for the operation of
the Business are not included as part of the assets sold and to be transferred
as part of this Agreement. All such vehicles, operating equipment, electronic
devices, trunk and distribution coaxial and optical fiber cable, amplifiers,
power suppliers, conduit, vaults and pedestals, grounding and pole hardware,
subscriber's devices (including converters, encoders, transformers behind
television sets and fittings), head-end hardware (including origination, earth
stations, transmission and distribution system), test equipment, video
equipment, computers, tools, parts, accessories and other tangible personal
property shall at all times remain the assets of Seller and in Seller's
possession and Buyer's use of any of these assets shall be undertaken only
pursuant to a separate Network Lease Agreement to be entered into between the
parties simultaneous with execution of this Agreement. Where such assets are
transferred pursuant to Schedule 3, Buyer acknowledges that when received by
Buyer, such assets are substantially fit for the purposes for which they are
utilized and are, to be the best of Buyer's and Seller's knowledge, free from
defects which could cause them to fail, or are sold "as is."
4.6. Personnel. Buyer is not assuming any obligation or liability in
respect to Seller's full-time or part-time employees, contractors or any other
agent or personnel, and Buyer shall have no obligation, liability or
responsibility to them.
4.7 Customers, Billings and Receivables. Until Closing, Buyer agrees to
provide Seller with access to a monthly report regarding the Business, including
a complete list of:
(1) The customers of the Business that Buyer serves on an ongoing
basis, including name, address, location and current billing
rate; and
(2) An accurate and complete aging of all accounts and notes
receivable from customers as of the last day of the month
showing amounts due in thirty (30) day aging categories.
4.8 Compliance With Laws. Until Closing or Settlement Seller agrees to
operate the Business in material compliance with all federal, state and local
laws, ordinances, codes, rules, regulations, Governmental Permits, orders,
judgments, awards, decrees, consent judgments, consent orders and requirements
applicable to Seller relating to the Business (collectively "Laws"), including,
but not limited to, Laws relating to the public health, safety or protection of
the environment (collectively "Environmental Laws") and without limiting the
applicability of the foregoing, Buyer agrees to immediately notify Seller of any
violation of law or of any notice of any private, administrative or judicial
action, or notice of any intended private, administrative or judicial action
relating to its operation of the Business.
4.9 Patents, Trademarks, Trade Names, etc. With the exception of the
name "Provo Cable," no patents, trade names, fictitious business names,
trademarks, service marks, copyrights or other intellectual property is
currently used in the operation of the Business or in connection with the
Assets.
4.10 Suppliers and Customers. The relations between Buyer, Seller and
the customers of the Business are good. Buyer and Seller have no knowledge of
any fact (other than general economic and industry conditions) which indicates
that any of the customers of the Business intends to terminate, limit or reduce
its business relations with Seller or Buyer relating to the Business.
4.11 Absence of Certain Business Practices. Seller and Buyer have not
directly or indirectly within the past year given or agreed to give any gift or
similar benefit to any customer, supplier, governmental employee or other person
who is or may be in a position to help or hinder the Business in connection with
any actual or proposed transaction which (a) if not given in the past might have
had an adverse effect on the financial condition, business or results of
operations of the Business, or (b) if not continued in the future, might
adversely affect the financial condition, business or operations of the Business
or which might subject Buyer or Seller to a penalty in any private or
governmental litigation or proceeding.
4.12 Disclosure Schedules. Any matter disclosed by Seller on any
Schedule to this Agreement shall be deemed to have been disclosed on every other
Schedule that refers to such Schedule by cross reference so long as the nature
of the matter disclosed is obvious from a fair reading of the Schedule on which
the matter is disclosed.
4.13 No Misleading Statements. The representations and warranties of
Seller and Buyer contained in this Agreement, the Exhibits and Schedules hereto
attached and all other documents and information furnished to Buyer and Seller
and their representatives pursuant hereto are complete and accurate in all
material respects and do not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made and to be
made not misleading.
5. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller that each of the following
representations and warranties is true as of the Closing Date, and agrees that
such representations and warranties shall survive the Closing:
5.1 No Contractual Restrictions. No provisions exist in any article,
document or instrument to which Buyer is a party or by which Buyer is bound
which would be violated by consummation of the transaction contemplated by the
Agreement.
6. CLOSING DELIVERIES.
At the Closing, the respective parties shall make the deliveries
indicated:
6.1 Buyer's Deliveries.
(1) Buyer shall deliver the cash portion of the Purchase Price
required to be delivered on the Closing Date pursuant to
Section 1.4 to Seller;
6.2 Seller's Deliveries.
At Closing, Seller shall deliver to Buyer:
(1) An executed Bill of Sale or Bills of Sale and other
instruments of transfer and conveyance for the full and
complete sell, transfer, conveyance, assignment and delivery
of the Assets to Buyer free and clear of all Liens in a form
acceptable to Buyer in its sole discretion;
(2) An executed assignment or transfer of Assumed Contracts and
Governmental Permits accompanied by all third party consents
required with respect thereto, if any;
(3) Releases and Uniform Commercial Code termination statements,
executed by the appropriate secured party and in the form
appropriate for recording or filing, as applicable, sufficient
to release any lien against the Assets;
(4) A copy of resolutions duly adopted by the Provo City Council
authorizing the execution and delivery of this Agreement, the
Bill of Sale, and any other agreement required to be executed
and delivered by Seller in connection herewith; and
(5) Seller shall execute and deliver such other documents and
instruments as are reasonably requested by Buyer in order to
consummate the transaction contemplated by this Agreement.
7. INDEMNIFICATION.
7.1 Mutual Indemnification. Subject to Section 7.2, Seller and Buyer
each covenant and agree that they will indemnify and hold harmless the other
party and their respective directors, officers, attorneys, representatives and
agents and their respective successors and assigns (collectively the
"Indemnitees"), from and after the date of this Agreement, against any and all
losses, damages, assessments, fines, penalties, adjustments, liabilities,
claims, deficiencies, costs, expenses (including specifically, but without
limitation, reasonable attorneys' fees and expenses of investigation),
expenditures, including, without limitation, identified by an Indemnitee with
respect to each of the following contingencies until the expiration of the
applicable statute of limitations (all constitute the "Indemnity Events"):
(1) Any misrepresentation, breach of warranty, or nonfulfillment
of any agreement or covenant pursuant to the terms of this
Agreement or any misrepresentation in or omission from any
Exhibit, Schedule, list, certificate, or other instrument
pursuant to the terms of the Agreement, regardless of whether,
in the case of a breach of a representation or a warranty, the
other party relied on the truth of such representation or
warranty or had any knowledge of any breach thereof.
(2) The design, development, construction or operation of any
"Environmental Site" as hereinafter defined, during any period
on or prior to the Closing Date. As used in this Agreement,
"Environmental Site" shall mean any facility, processing,
treatment or disposal facility, and any other business site or
any other real property owned, leased, controlled or operated
by a party or by any predecessor thereof on or prior to the
Closing Date and used in the Business, provided however, as to
activities of such predecessors, only to the extent that a
party had knowledge of such activities. As used in this
Agreement, "Environmental Site Losses" shall mean any and all
losses, damages (including exemplary damages and penalties),
liabilities, claims, deficiencies, costs, expenses, and
expenditures (including, without limitation, expenses in
connection with site evaluations, risk assessments and
feasibility studies) arising out of or required by an interim
or final judicial or administrative decree, judgment,
injunction, mandate, interim or final permit condition or
restriction, cease and desist order, abatement order,
compliance order, consent order, clean-up order, exhumation
order, reclamation order or any other remedial action that is
required to be undertaken under federal, state or local law in
respect of operating activities on or affecting any facility
or any other Environmental Site including, but not limited to
(i) any actual or alleged violation of any law or regulation
respecting the protection of the environmental, including, but
not limited to, RCRA and CERCLA or any other law or regulation
respecting the protection of the air, water and land and (ii)
any remedies or violations, whether by a private or public
action, alleged or sought to be assessed as a consequence,
directly or indirectly, of any "Release" (as defined below) of
pollutants (including odors) or Hazardous Substances from any
facility or any other Environmental Site resulting from
activities thereat, whether such release is into the air,
water (including groundwater) or land and whether such Release
arose before the Closing Date. The term "Release" as used
herein means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing into the ambient environment.
(3) All actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of
investigation) incident to any the foregoing.
7.2 Limitations on Seller's Indemnities. The maximum amount which the
Buyer Indemnitees can recover from Seller as a result of one or more Indemnity
Events pursuant to the provisions hereof for Claims shall not in the aggregate
exceed the Purchase Price.
7.3 Notice of Indemnity Claim.
(1) In the event that any claim ("Claim") is hereafter asserted
against or arises with respect to any Indemnitee as to which
such Indemnitee may be entitled to indemnification hereunder,
Indemnitee shall notify the other party ( the "Indemnifying
Party") in writing thereof (the "Claims Notice") within sixty
(60) days after (i) receipt of written notice of commencement
of any third party litigation against such Indemnitee, (ii)
receipt by such Indemnitee of written notice of any third
party claim pursuant to an invoice, notice of claim or
assessment, against such Indemnitee, or (iii) such Indenmnitee
becomes aware of the existence of any other event in respect
of which indemnification may be sought from the Indemnifying
Party (including, without limitation, any inaccuracy of any
representation or warranty or breach of any covenant). The
Claims Notice shall describe the Claim and the specific facts
and circumstances in reasonable detail, and shall indicate the
amount, if known, or an estimate, if possible, of the losses
that have been or may be incurred or suffered by the
Indemnitee.
(2) The Indemnifying Party may elect to defend any Claim for money
damages where the cumulative total of all Claims (including
such Claims) does not exceed the limit set forth in Section
7.2 at the time the Claim is made, by the Indemnifying Party's
own counsel; provided, however, the Indemnifying Party may
assume and undertake the defense of such a third party Claim
only upon written agreement by the Indemnifying Party that the
Indemnifying Party is obligated to fully indemnify Indemnitee
with respect to such action. Indemnitee may participate, at
Indemnitee's own expense, in the defense of any Claim assumed
by the Indemnifying Party. Without the written approval of
Indemnitee, which approval shall not be unreasonably withheld,
the Indemnifying Party shall not agree to any compromise of a
Claim defended by the Indemnifying Party.
(3) If, within thirty (30) days of the Indemnifying Party's
receipt of a Claims Notice, the Indemnifying Party shall not
have provided the written agreement required by Section 7.3(2)
and elected to defend the Claims, Indemnitee shall have the
right to assume control of the defense and/or compromise of
such Claim, and the costs and expenses of such defense,
including reasonable attorneys' fees shall be added to the
Claim. The Indemnifying Party shall promptly, and in any event
within thirty (30) days reimburse Indemnitee for the costs of
defending the Claim, including attorneys' fees and expenses.
(4) The party assuming the defense of any Claim shall keep the
other party reasonably informed at all times of the progress
and development of its or their defense of and compromise
efforts with respect to such Claim and shall furnish the other
party with copies of all relevant pleadings, correspondence
and other papers. In addition, the parties to this Agreement
shall cooperate with each other and make available to each
other and their representatives all available relevant records
or other materials required by them for their use in
defending, compromising or contesting any Claim. The failure
to timely deliver a Claims Notice or otherwise notify the
Indemnifying Party of the commencement of such actions in
accordance with this Section 7.3 shall not relieve the
Indemnifying Party from the obligation to indemnify hereunder
but only to the extent that the Indemnifying Party establishes
by competent evidence that is prejudiced thereby.
(5) In the event both the Indemnitee and the Indemnifying Party
are named as defendants in an action or proceeding initiated
by a third party, they shall both be represented by the same
counsel (on whom they shall agree), unless such counsel, the
Indemnitee, or the Indemnifying Party shall determine that
such counsel has a conflict of interest in representing both
the Indemnitee and the Indemnifying Party in the same action
or proceeding and the Indemnitee and the Indemnifying Party do
not waive such conflict to the satisfaction of such counsel.
7.4 Survival of Representations, Warranties and Agreements. The
representations and warranties of the parties contained in this Agreement and in
any certificate, Exhibit or Schedule delivered pursuant hereto, or in any other
writing delivered pursuant to the provisions of the Agreement (the
"Representations and Warranties") and the liability of the party making such
Representations and Warranties for breaches thereof shall survive the
consummation of the transactions contemplated hereby. The parties hereto in
executing and delivering and in carrying out the provisions of the Agreement are
relying solely on the representations, warranties, Schedules, Exhibits,
agreements and covenants contained in this Agreement, or in any writing or
document delivered pursuant to the provisions of this Agreement, and not upon
any representation, warranty, agreement, promise or information, written or
oral, made by any persons other than as specifically set forth herein or
therein.
7.5 No Exhaustion of Remedies or Subrogation. The parties waive any
right to require any Indemnitee to (i) proceed against any other person or (ii)
pursue any other remedy whatsoever in the power of any Indemnitee.
7.6 Indemnity by Buyer. Buyer covenants and agrees that it will
indemnify and hold harmless Seller and the Seller's directors, officers,
trustees, partners, attorneys and agents and their respective successors and
assigns, against all losses, damages, assessments, fines, penalties,
adjustments, liabilities, claims, deficiencies, costs and expenses (including
specifically, but without limitation, reasonable attorneys' fees and expense of
investigation) with respect to any act or omission of Buyer, its agents,
servants or employees occurring from and after the Closing Date in connection
with Buyer's operations of the Business and the Assets.
8. OTHER POST-CLOSING COVENANTS.
8.1 Restrictive Covenants. Buyer acknowledges that Buyer is currently
operating the Business as an independent contractor pursuant to a Service
Agreement and renewals thereof and as the purchaser of the Assets (including the
goodwill of the Business), (i) is and will be engaged in the same business as
the Business; (ii) Buyer is intimately familiar with the Business; (iii) the
Business is currently conducted in the City of Provo, Utah; (iv) Buyer has had
access to trade secrets of, and confidential information concerning, the
Business; and (v) the agreements and covenants contained in this Section 8.1 are
essential to protect the Business and the goodwill of the Business. Buyer and
Seller covenant and agree as set forth in (1), (2), (3) and (4) below with
respect to the Business:
(1) Non-Compete. Except as contemplated by this Initial Provider
Network Access And Use Agreement and the Exhibits thereto,
including but not limited to the "open access" and "backup
service" provisions of the Agreement, Seller shall not, within
the City of Provo, Utah, engage in the operation of a cable
television business in competition with Buyer while this
Agreement is in effect, and except that nothing herein shall
prevent Seller from exercising any of its rights under or
arising from this Agreement.
(2) Confidential Information. Subject to applicable law, at all
times Buyer and Seller shall keep secret and retain in
strictest confidence, all data and information relating to the
Business ("Confidential Information"), including without
limitation, the existence of and terms of this Agreement,
know-how, trade secrets, customer lists, supplier lists,
details of contracts, pricing policies, operational methods,
marketing plans or strategies, bidding practices and policies,
product development techniques or plans, and technical
processes; provided, however, that the term "Confidential
Information" shall not include information that (i) is or
becomes generally available to the public other than as a
result of disclosure by Seller, or (ii) is general knowledge
in the cable television and internet provider business and not
specifically related to the Business.
(3) Property of the Business. All memoranda, notes, lists, records
and other documents or papers (and all copies thereof)
relating to the Business, including such items stored in
computer memories, on microfiche or by any other means, made
or compiled by or on behalf of Seller, relating to the
Business, but excluding any materials maintained by any
attorneys for Seller, prior to the Closing, are and shall
remain the property of the Seller until Closing but will be
delivered or made available to the Buyer at the Closing.
(4) Non-Solicitation. Without the consent of the Seller, which may
be granted or withheld by the Seller in its discretion, Buyer
shall not solicit any employees of the Seller to leave the
employ of the Seller or its Affiliates and join Buyer in any
business endeavor owned or pursued by Buyer.
(5) No Disparagement. Neither the Seller nor the Buyer shall, in
any way to any customer or employee of the Business, denigrate
or derogate the Business, whether or not such denigrating or
derogatory statements shall be true and are based on acts or
omissions which are learned by the Buyer. A statement shall be
deemed denigrating or derogatory to any person if it adversely
affects the regard or esteem in which such person or entity is
held by such person. Without limiting the generality of the
foregoing, neither the Seller nor the Buyer shall, directly or
indirectly in any way in respect of any such company or any
such directors or officers, communicate with, or take any
action which is adverse to the position of any such company
with any customer or employee of the Business. This paragraph
does not apply to the extent that testimony is required by
legal process, provided that the party has received not less
than five (5) days' prior written notice of such proposed
testimony.
8.2 Rights and Remedies Upon Breach. If Seller or Buyer threaten to
commit a breach of, any of the provisions of Section 8.1(1), (2), (3), (4) or
(5) herein (the "Restrictive Covenants"), the Buyer shall have the following
rights and remedies, each of which rights and remedies shall be independent of
the others and severally enforceable, and each of which is in addition to, and
not in lieu of, any other rights and remedies available to the Buyer at law or
in equity:
(1) Specific Performance. The right and remedy to have the
Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or
threatened breach of the Restrictive Covenants would cause
irreparable injury to the Buyer and that money damages would
not provide an adequate remedy to the Buyer. Accordingly, in
addition to any other rights or remedies, the Buyer shall be
entitled to injunctive relief to enforce the terms of the
Restrictive Covenants and to restrain Seller from any
violation thereof.
(2) Accounting. The right and remedy to require the other party to
account for and pay over to all compensation, profits, monies,
accruals, increments or other benefits derived or received as
the result of any transaction constituting a breach of the
Restrictive Covenants.
(3) Severability of Covenants. The parties acknowledge and agree
that the Restrictive Covenants are reasonable and valid in
geographical and temporal scope and in all other respects. If
any court determines that any of the Restrictive Covenants, or
any part thereof, if invalid or unenforceable, the remainder
of the Restrictive Covenants shall not thereby be affected and
shall be a given full effect, without regard to the invalid
portions.
(4) Covenant Adjustment. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable
because of the duration or geographic scope of such provision,
such court shall reduce the duration or scope of such
provision, as the case may be, to the extent necessary to
render it enforceable and, in its reduced form, such provision
shall then be enforced.
(5) Enforceability in Jurisdiction. The parties intend to and
hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the
geographic scope of the Restrictive Covenants.
9. TERMINATION OF AGREEMENT.
9.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date upon ninety (90) days prior written notice to the other party:
(1) By the Buyer, by written notice to the Seller if the
representations and warranties of the Seller shall not have
been true and correct in all respects as of the date when
made; or
(2) by the Buyer or by the Seller, if the required consents have
not been granted, and specifically if the approval of the
purchase by the Provo City Council has not been given or has
been revoked; or
(3) by the Seller if the representations and warranties of the
Buyer shall not have been true and correct in all respects as
of the date when made, or if the franchise to operate a cable
system granted to Buyer by Provo City is for any reason
declared invalid or void, or is suspended or revoked; or
(4) as provided in Subsection 1.5(3) or by the mutual written
consent of Buyer and Seller.
(5) Whenever this Agreement is terminated pursuant to this
Section, Buyer and Seller agree that Buyer's Network Lease and
Maintenance Agreement and Franchise Agreement shall
automatically terminate as of the date of the termination of
this Agreement without further action by either party.
9.2 Notice and Effect of Termination. On termination of this Agreement,
the transaction contemplated herein shall forthwith be abandoned and all
continuing obligations and liabilities of the parties under or in connection
with this Agreement shall be terminated and of no further force or effect;
provided, however, that nothing herein shall relieve any party from liability
for any misrepresentation, breach of warranty or breach of covenant contained in
this Agreement prior to such termination.
10. GENERAL.
10.1 Additional Conveyances. Following the parties each delivers or
causes to be delivered at such times and places as shall be reasonably agreed
upon such additional instruments as Buyer or Seller may reasonably request for
the purpose of carrying out this Agreement. The parties will cooperate on and
after the Closing Date in furnishing information, evidence, testimony and other
assistance in connection with any actions, proceedings or disputes of any nature
with respect to matters pertaining to all periods prior to the date of this
Agreement.
10.2 Assignment. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto, the successors or assigns of Buyer and the
Seller and their respective heirs, legal representatives or assigns; provided,
however, that any such assignment shall be subject to the terms of this
Agreement and shall not relieve the assignor of its or his responsibilities
under this Agreement.
10.3 Willing Buyer and Seller and Coordination of Public Announcements.
Buyer and Seller warrant and agree that they are entering into this agreement
willingly and without duress or undue influence, economic or otherwise. Seller
and Buyer agree to coordinate the timing of all public statements and
announcements and to cooperate in explaining this Agreement to the public.
10.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
10.5 Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if in writing and either
delivered personally, or mailed by postage prepaid registered or certified U.S.
mail, return receipt requested, to the addresses designated below or such other
addresses as may be designated in writing by notice given hereunder, and shall
be effective upon personal delivery thereof or upon delivery by registered or
certified U.S. mail.
If to Buyer: Chief Operations Officer
Attn: Robert Murtagh
Video Internet Broadcasting Corporation
135 Basin Street SW
Ephrata, Washington 98823
If to Seller: Provo City Attorney
Attn: Robert West
Provo City Attorney's Office
351 West Center Street
P.O. Box 1849
Provo, Utah 84603
10.6 Attorneys' Fees. In the event of any dispute or controversy
between Buyer and Seller relating to the interpretation of this Agreement or to
the transaction contemplated hereby, the prevailing party shall be entitled to
recover from the other party reasonable attorneys' fees and expenses incurred by
the prevailing party. Such award shall include post-judgment attorney's fees and
costs.
10.7 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Utah without regard to its conflict
of laws provisions.
10.8 Payment of Fees and Expenses. Whether or not the transactions
herein contemplated shall be consummated, each party hereto will pay its own
fees, expenses and disbursements incurred in connection herewith and all other
costs and expenses incurred in the performance and compliance with all
conditions to be performed hereunder.
10.9 Incorporation by Reference. All Schedules and Exhibits attached
hereto are incorporated herein by reference as though fully set forth at each
point referred to in this Agreement.
10.10 Captions. The captions in this Agreement are for convenience only
and shall not be considered a part hereof or affect the construction or
interpretation of any provisions of this Agreement.
10.11 Number and Gender of Words. Whenever the singular number is used
herein, the same shall include the plural where appropriate, and shall apply to
all of such number, and to each of them, jointly and severally, and words of any
gender shall include each other gender where appropriate. Without limiting the
generality of the foregoing, any reference to "Partners" shall apply to each
individual "Partner."
10.12 Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) and the other documents delivered pursuant hereto constitute
the entire Agreement and understanding between Seller and the Buyer and
supersede any prior agreement and understanding relating to the subject matter
of this Agreement. This Agreement may be modified or amended only by a written
instrument executed by the Seller and the Buyer.
10.13 Waiver. No waiver by any party hereto at any time of any breach
of, or compliance with, any condition or provision of this Agreement to be
performed by any other party hereto may be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or at any prior or
subsequent time.
10.14 Construction. The language in all parts of this Agreement must be
in all cases construed simply according to its fair meaning and not strictly for
or against any party. Unless expressly set forth otherwise, all references
herein to a "day" are deemed to be a reference to a calendar day. All references
to "business day" mean any day of the year other than a Saturday, Sunday or a
public or bank holiday in Utah. Unless expressly stated otherwise,
cross-references herein refer to provisions within this Agreement and are not
references to the overall transaction or to any other document.
Signature Page to Follow
DATED effective as of the date first above written.
Provo City
By: ______________________________________
Mayor Lewis K. Billings
ATTEST:
__________________________________________
Provo City Recorder
APPROVED AS TO FORM:
__________________________________________
Provo City Attorney
Video Internet Broadcasting Corporation, d.b.a.
HomeNet Communications of Utah.
By: ______________________________________
Michael W. Devine (President)
ATTEST BY:
______________________________________________
Name:
Title:
SCHEDULE 1
Assets
All subscribers/customer accounts including:
* Residential
* Commercial (includes existing fiber lease to BYU)
* Bulk
The goodwill associated with Provo Cable.
All proprietary customer information contained in the Azar computer records,
including customer lists and accounts.
SCHEDULE 2
Assumed Contracts
All bulk accounts (MDU) Contracts.
All Commercial Accounts Contracts.
All Programming Contracts.
Azar Computer Software Contract
SCHEDULE 3
Fixed Assets, Vehicles And Tangible Personal Property Transferred
None
APPENDIX A
PROVO CABLE NETWORK LEASE AGREEMENT
This Network Lease Agreement ("Agreement"), is entered into as of
______________________ (the "Effective Date"), by and between Provo City, a
municipal corporation of the State of Utah (hereinafter "Provo"), and HomeNet
Communications of Utah, a Washington corporation registered to do business in
Utah (hereinafter "HomeNet").
WHEREAS, Provo owns certain telecommunications facilities including
poles, conduit, fiber and wires and uses a portion of those telecommunications
facilities described on the attached "Schedule 1" and by this reference
incorporated herein and made a part hereof (hereinafter the "Network") to
provide cable television service as to the public; and
WHEREAS, concurrent with the parties entering into an Asset Purchase
Agreement for the Provo Cable business, Provo desires to lease the Network to
HomeNet and HomeNet desires to lease the Network from Provo;
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND PROMISES
OF PARTIES CONTAINED HEREIN, THE PARTIES AGREE AS FOLLOWS:
1. Provo agrees to lease to HomeNet and HomeNet agrees to rent from Provo the
Network described on Schedule 1.
2. The term of this Agreement is for one (1) year, beginning the Effective Date
of this Agreement, subject to the early termination provisions of this
Agreement. The Agreement shall be automatically renewed for up to two (2) one
(1) year terms unless a party gives the other party written notice at least
ninety (90) days prior to the anniversary date(s) of this Agreement of its
intention not to renew the Agreement.
3. HomeNet agrees to pay to Provo the rent set forth on the attached "Schedule
2" (by this reference incorporated herein and made a part hereof), payable as
set forth on Schedule 2. HomeNet shall pay a late charge of five percent (5%)
for each payment that is more than 10 days past due.
4. Concurrent with entering into this Agreement, HomeNet is entering into an
Asset Purchase Agreement for the Provo Cable business with Provo City. Failure
to timely comply with all the terms of this Agreement, shall permit to Provo to
terminate this Agreement and the Asset Purchase Agreement on the terms set forth
in the Asset Purchase Agreement. If HomeNet completes the purchase of the Provo
Cable Business purchase pursuant to the Asset Purchase Agreement, but thereafter
fails to timely comply with all the terms of this Agreement, Provo shall have
the right to terminate this agreement only after ninety (90) days written notice
to HomeNet from Provo of HomeNet's default.
5. Provo authorizes only HomeNet to lease the Network and no sub-leasing,
assignment, or other use of the Network is allowed without the express written
consent of Provo.
6. HomeNet shall use the Network only to provide cable television service
pursuant to its Franchise Agreement with Provo.
7. If for any reason Provo terminates the Asset Purchase Agreement, or
terminates, suspends or revokes HomeNet's franchise, Provo may terminate this
Agreement and require HomeNet to return to Provo any Network property in
HomeNet's possession.
8. Subject to the Network Maintenance Agreement, HomeNet agrees to maintain the
property throughout the term of this Agreement in as good condition as it
received it at the start of this Lease, except for ordinary wear and tear.
During the term of this Agreement HomeNet shall pay for all repairs,
replacements, and damages caused by the act or neglect of HomeNet, its employees
and customers. HomeNet shall have a reasonable amount of time to make repairs.
HomeNet will remove all of HomeNet's own separate property that may be attached
to the Network at the end of this Agreement. Any of HomeNet's property that is
not removed shall be considered abandoned and shall become the property of Provo
and either retained by Provo, sold or discarded.
9. All maintenance and repairs to the Network during the term of this Agreement
shall be the responsibility of HomeNet, except if the network is damaged by an
act of nature, such as flood, earthquake or other natural disaster. If such a
natural disaster occurs, Provo shall, in its own discretion, have the right to
determine if shall rebuild the Network and a reasonable amount of time to do so,
during which time period this lease shall remain in effect. If Provo decides not
to rebuild the Network this Agreement shall terminate and neither party shall
have any further cause of action against the other party. During any period in
which the Network is not useable as the result of a natural disaster, HomeNet
will not have to pay the rental fee set forth on Schedule 2 until the Network is
rebuilt. If the Network is destroyed as part of a natural disaster, HomeNet
shall pay the fee set forth on Schedule 2 up to the date of destruction.
10. As HomeNet is leasing and maintaining the Network, Provo shall not
responsible for any inconvenience or interruption of services on the Network due
to repairs, improvements, or for any other reason beyond Provo's control.
11. HomeNet shall get Provo's prior written consent before altering, improving,
adding to or otherwise changing the existing Network.
12. During the term of this Agreement HomeNet shall comply with laws, orders,
rules, and requirements of governmental authorities.
13. Provo shall not give up or waive any of its rights by accepting any payments
or partial payments or by failing to enforce any terms of this Agreement.
14. Provo may at any time examine the Network and its facilities or equipment to
provide services, inspect, repair, improve, or show it to others. HomeNet shall
notify Provo if for any reason HomeNet decides not to use the Network or to
temporarily or permanently discontinue providing cable television service using
the Network. Such notice to Provo shall be given as soon as possible. In case of
an emergency shut down of the Network or a suspension of regular cable
television service to the public, HomeNet shall notify Provo within two (2)
hours of such a shut down or suspension of service. If the shut down or
suspension of service is not corrected within twenty-four hours, Provo shall
have the right to retake possession of the Network and associated facilities and
to use them to provide cable television service to the public.
15. HomeNet is entitled to use the Network without interference subject to the
terms of this Agreement.
16. This Agreement and HomeNet's rights are subject and subordinate to the Asset
Purchase Agreement, HomeNet's franchise agreement and to Provo's rights to
terminate those agreements for the purposes set forth therein.
17. In leasing and maintaining the Network HomeNet will comply with all laws and
regulations, including the National Electric Safety Code and all other
applicable safety codes and regulations and will not permit the Network to pose
a danger or hazard to any person or the public.
18. HomeNet will be responsible for any injury or damage caused by the act or
neglect of the HomeNet, its employees and agents, and will indemnify, defend and
hold Provo harmless for any claim or cause of action arising out of HomeNet's
lease and maintenance of the Network. Provo shall not be responsible for any
injury or damage unless due to the negligence or improper conduct of Provo.
19. All notices provided by this Agreement must be written and delivered
personally or by certified mail, return receipt requested to the addresses of
the parties specified in the Asset Purchase Agreement.
Schedule 1
Provo Cable Network
Non-exclusive use of the network currently used to deliver cable TV service to
those customers known, and hereinafter referred to, as the "Provo Cable
Customers".
Includes approximately 66 miles of coaxial plant, 3.2 miles of fiber optic cable
and associated equipment purchased from the Nicol family and any extensions
completed since purchase that are used to deliver cable TV to Provo Cable
Customers.
Includes lines (coax or fiber) currently used as back haul for services
delivered on the network known, and hereinafter referred to, as the "Provo Cable
Network." (i.e.: Return lines from City Hall to Cable Headend for delivery of
Channel 17)
Includes all Satellite dishes, headend signal processing equipment, amplifiers,
splitter, taps, customer premise equipment, etc. Any and all lines, equipment
and attachments used in the Provo Cable Network.
Provo City will insure that no other use of this equipment or network will
interfere in with the continued delivery of cable TV services to Provo Cable
customers on the Provo Cable Network.
This agreement does not include the use of any upstream frequencies. Should
HomeNet or Provo City wish to activate any upstream RF frequencies they will
complete a separate agreement (or amend this agreement) to include those
frequencies and the additional cost of maintenance if any.
Schedule 2
Services, Payments and Fees
Network Lease Payments
Buyer shall lease the Provo Cable Network for an amount equal to a rate of $3.00
per subscriber per month transferred to Buyer pursuant to the Asset Purchase
Agreement. After the first month, Buyer shall provide a monthly report, to be
agreed to by the Seller, of customer counts and EBU calculations, which will be
the basis for the monthly lease payment until the termination of this Agreement.
Seller shall have the right to audit all customer accounts in order to verify
the customer counts and EBU calculations.
Payments shall be in arrears with the first lease payment due and payable on
first day of the month following the date of the execution of the Initial
Provider Network Access and Use Agreement on a pro rata basis. Thereafter all
lease payments shall be due and payable on or before the first of each month.
Exhibit K
IP Video Middleware Software License Agreement
SOFTWARE LICENSE AGREEMENT
THIS AGREEMENT is by and between the City of Provo, Utah (Provo)
(hereinafter referred to as "Licensee" or "City") And
Video Internet Broadcasting Corporation, now doing business as HomeNet
Communications of Utah, a Washington Corporation located in Ephrata, Washington,
and registered to do business in Utah (hereinafter referred to as "Licensor")
Effectively dated __________, 2004 (the "Effective Date").
R e c i t a l s:
The City desires to purchase copies of certain software from Licensor and
license its use under the terms and conditions of this Agreement for the purpose
of providing wholesale telecommunications facilities which will be used by third
party service providers.
Licensor is willing to provide such software on the terms and conditions
contained herein;
NOW, THEREFORE, in consideration of the mutual promises, covenants,
warranties and performance herein provided, the parties agree as follows:
1. Definitions
"City Network" means the IProvo fiber optic network owned and operated
by the City. IProvo fiber optic network includes associated plant,
wiring, fiber, required patch panels, telephony blocks, etc.
"City Network Service Area" means areas inside the City limits served
by the City Network.
"Documentation" refers to manuals, handbooks, maintenance libraries,
and other publications supplied with Licensor Software or Licensor
Equipment. The term "Documentation" does not include Software Product
Descriptions, Service Descriptions, Licensor Software, or third-party
software.
"End User" means the end users of products and services enabled by the
Licensor Equipment and Licensor Software, which may include among other
products and services digital television, digital video transmission
and Internet access.
"Force Majeure" means events beyond the reasonable control of either
Party, including, but not limited to, wars, fires, floods, earthquakes,
tornadoes, explosions, strikes, labor unrest, riots, serious accidents,
acts of God, failures of or delays by common carriers or suppliers,
government intervention, epidemics, quarantine restrictions, failure to
obtain governmental approval notwithstanding reasonable efforts, loss
of government licenses or non-renewals notwithstanding reasonable
efforts, or any cause if it is beyond such party's reasonable control
and not occasioned by such party's fault.
"Licensor Software" means any computer software, documentation, related
materials, trade secrets or Confidential Information associated
therewith identified in Appendix "A" of this Agreement between City and
Licensor.
"Licensor Product Features" means those features of the Licensor
Software identified in the Software License Agreement between City and
Licensor.
"Software" refers to software products listed in the scope of services
and are supplied with Equipment, or otherwise supplied or developed by
Licensor including packaged application software and software supplied
in connection with Services. The term "Software" applies to all parts
of Software, and to new releases, updates, and modifications of
Software, including source code and third party Software.
"Services" refers to Licensor software services, support and
maintenance, equipment services support and maintenance, and
educational services as described herein.
"Set-top Box" means the multicast receiver attached to the fiber
gateway on the End User's premises.
"Third Party Service Provider" means a video service provider
authorized by the City to provide video services on the City's fiber
optics network and who has been approved by Licensor via written
notification to the City for the use of Licensor Software.
"Third-party software" means products including databases, licensed
directly to City by a third party and identified as such.
"Upgrade" or "Upgrades" means any generally available release including
updates for non-conformities and fixes to maintain current
functionality of the Licensor Software, excluding any new features or
new product modules that are separately priced and licensed by
Licensor.
"Vendor Equipment" means any hardware other than Licensor Equipment
2. Software License
Licensor shall, on or before _____________, 20___, deliver to the City,
Licensor Software subject to the terms and conditions of this
agreement.
a. Licensor Ownership
Licensor represents and warrants that it owns and shall continue to own
all right, title and interest in and to the Licensor Software, and any
and all current and hereafter, existing revisions, derivative works or
modifications thereto. Licensee hereby expressly acknowledges and
affirms Licensor's ownership in the Software and Licensee shall not at
any time, directly or indirectly, oppose the grant of, dispute the
validity of or cooperate in any suit or proceeding which challenges or
disputes any proprietary rights of Licensor in the Licensor Software.
b. License
Licensor hereby grants to Licensee a non-exclusive license to use the
Licensor Software in the City Network Service Area as part of the
City's wholesale telecommunications system and for its own internal
business purposes within City offices. It is expressly understood and
agreed that with the City's permission Licensor Software may be used
within the City Network Service Area by Third Party Service providers
for the purpose of providing video and related services to End Users
without any further licensing requirements or fees paid to Licensor. It
is also understood that the City may charge Third Party Service
providers who use the City's Licensor Software. The City reserves the
right to change or enhance the Licensor Software.
C. Restrictions.
Neither Licensee nor Third Party Service Providers shall distribute, to
any other party, a copy of Licensor's Software, in any form, and may
not allow access to Licensor Software, except to a duly authorized
representative of Licensor.
D. No Right To Sublicense
The rights granted to Licensee and Third Party Service Providers by
Licensor under this Section 2 are nontransferable and may not be
sublicensed by Licensee or Third party Service Providers, except to End
Users as an embedded product in the Set-top Box.
E. Third Party License
Licensor shall pass-through to City all third-party licenses Licensor
has acquired which relate to Licensor Software.
3. Fees and Payment Terms
The City shall pay Licensor a license fee of $3.45 per Subscriber per month.
These fees are inclusive for all Licensor Software and are payable monthly for
as long as the software remains
deployed in the City Network. City shall pay by check. All payments to Licensor
shall be made in U.S. Dollars and delivered via U.S. mail to the following
address:
HomeNet Communications of Utah
135 Basin Street SW
Ephrata, WA 98823
4. Installation
Upon the signing of this agreement, Licensor shall install the Licensor Software
ready for use. City agrees to notify Licensor of the City's readiness fifteen
(15) days before any installation and to prepare a safe and suitable site in
accordance with Licensor's standard specifications. Installation testing shall
include all modules and access to all multicast receivers using the respective
modules. The testing procedures and diagnostics shall be Licensor's diagnostics
for the software and the manufacturer's standard diagnostics for the equipment.
The Licensor Software shall be considered ready for use ("Accepted,"
"Acceptance") when the City provides Licensor with written Acceptance of the
following:
(a) Documentation of a successful system audit utilizing
Licensor's diagnostic routines, which demonstrates that the
Licensor Software meets minimum design capabilities.
(b) Demonstration of the Licensor Software branded with the iProvo
logo displaying video on 10 set-top boxes
Upon Acceptance by the City, Licensor shall:
(a) Provide City with the Licensor software described in Appendix
A
(b) Provide City with a copy of all software, custom scripts etc
listed in Appendix A.
(c) Provide a copy of the source code for all Licensor software
(d) Provide generally available software updates for a period of
12 months from acceptance.
Any Licensor Software supplied pursuant to this Agreement after its Effective
Date shall be subject to all the terms and conditions of this Agreement.
5. Indemnity
Licensor shall defend, indemnify and hold harmless the City and its
representatives (which shall be deemed to include the City's directors,
officers, employees and agents) from and against any and all liabilities,
claims, losses, damages or expenses of any type or kind, including reasonable
attorneys fees, and expert witness fees, which may be incurred or sustained by
the City or its representatives by reason of any act, omission, misconduct,
negligence, or default on the part of Licensor or arising in connection with the
supplies, material or equipment to be furnished pursuant to these Contract
Documents.
Licensor indemnification obligation shall not apply to liability for damages for
bodily injury to person or damage to property caused by the negligence of the
City and not solely related to any act or omission on the part of Licensor.
Licensor acknowledges that by entering into a contract with the City, they have
mutually negotiated the above indemnity provisions with the City. Licensor
indemnity and defense obligations shall survive the termination or completion of
the contract and remain in full force and effect until satisfied in full.
City shall defend, indemnify and hold harmless Licensor and its representatives
(which shall be deemed to include Licensor directors, officers, employees and
agents) from and against any and all liabilities, claims, losses, damages or
expenses of any type or kind, including reasonable attorneys fees, and expert
witness fees, which may be incurred or sustained by Licensor or its
representatives by reason of any act, omission, misconduct, negligence, or
default on the part of the City or arising in connection with the supplies,
material or equipment furnished to the City by a third-party or under the
control of the City.
City's indemnification obligation shall not apply to liability for damages for
bodily injury to person or damage to property caused by the negligence of
Licensor and not solely related to any act or omission on the part of the City.
City acknowledges that by entering into a contract with Licensor, it has
mutually negotiated the above indemnity provisions with Licensor. City's
indemnity and defense obligations shall survive the termination or completion of
the contract and remain in full force and effect until satisfied in full.
6. Limitation of Liability
Notwithstanding Section 5, Indemnity, Licensor shall not be liable in contract,
in tort (including negligence and strict liability), in warranty or otherwise
for loss of profits or revenue, loss of equipment or power system, cost of
capital, or damage or loss of property or equipment.
The remedies of the City set forth therein are exclusive, and the total
liability of Licensor and its subcontractors and suppliers of any tier to the
City with respect to these terms and conditions, or anything done in connection
therewith such as the performance or breach thereof, or from the manufacture,
sale, delivery, resale, installation or technical field assistance for
installation, maintenance or technical field assistance for maintenance, repair
or use of any equipment covered by or furnished under the contract whether in
contract, in tort (including negligence and strict liability) or otherwise shall
not exceed the contract price.
7. Warranties and Maintenance
(a) Licensor will provide City with all generally available software
upgrades for a period of 12 months from the end of the warranty period.
(b) Without limiting the foregoing, Licensor warrants that it has title
to the Software and documentation and the authority to grant licenses to use the
third party software.
8. Disclaimer of Warranty:
Except as expressly provided for in this section, Licensor software is provided
"as is" and "as available" and Licensor expressly does not warrant that licensor
software hereunder, or any error corrections, updates, repairs or maintenance
thereto, will be error free, will operate without interruption or will be
compatible with any software or hardware other than those supplied or approved
by Licensor. The express limited warranties set forth in this agreement are the
sole and exclusive warranties granted by Licensor under this agreement, and are
in lieu of all other warranties, express, implied or statutory, with respect to
the software, and Licensor expressly disclaims any implied warranties, including
without limitation, warranties of merchantability, fitness for a particular
purpose, and non-infringement.
9. Documentation
Licensor will provide software documentation, within thirty (30) days after
execution of this agreement or as otherwise mutually agreed, in the form of two
(2) sets of software documentation adequate for use of software ordered under
the provisions of this Agreement.
Licensor grants to the City, and Third Party Service Providers, the right to
copy or otherwise reproduce manuals and documentation furnished pursuant to this
provision, for use within the scope of this Agreement for use by City employees
only, and only to the extent necessary to fulfill their jobs descriptions, at no
additional charge.
10. Confidentiality and Nondisclosure
The parties acknowledge that certain material and information in connection with
this Agreement or its performance, consists of confidential and proprietary
data.
Except as required by law, both parties, therefore, agree to use reasonable care
to maintain such Confidential Information in confidence, not to make the use
thereof other than for the performance of this Agreement, to release it only to
authorized employees requiring such information, and not to release or disclose
to any other party except as otherwise provided by law or by this Agreement.
"Confidential Information" means information such as, trade secrets, proprietary
information and similar information including formulas, patterns, compilations,
reports, programs, devices, methods, techniques or processes, as well as
technical specifications, software codes, training materials or software
conversion tools that: (a) have independent economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its (their)
disclosure or use; and (b) is (are) the subject of efforts that are reasonable
under the circumstances to maintain its (their) secrecy. "Confidential
Information" also includes any information concerning the names or addresses of,
or credit or billing information about City customers. Confidential Information
shall not include information that: (1) is now or subsequently becomes generally
available to the public through no fault or breach of the Receiving Party; (2)
the Receiving Party can demonstrate to have had rightfully in its possession
prior to disclosure by the Disclosing Party; (3) is independently developed by
the Receiving Party without the use of any Confidential Information; or (4) the
Receiving Party rightfully obtains from a third party who has the right to
transfer or disclose it.
11. Notices
Any notice or other communication under this Contract given by either party
shall be mailed, properly addressed and stamped with the required postage, to
the intended recipient at the address and to the attention of the person
specified below and shall be deemed served when received and no mailed. Either
party may from time to time change such address by giving the other party notice
of such changes. In the event of an emergency or when using the US mail will
cause unreasonable delay, the parties may use reliable overnight mail or telefax
service.
City VIB
Paul Venturella Michael W Devine
Provo Telecommunications Manager 8031 N Tuscany Drive
51 West 800 North Tucson, AZ 85742
Provo, Utah 84603 Telephone (520)742-7373
Telephone (801) 852-7900
For purposes of technical communications and work coordination only, the City
designates Paul Venturella as its representative. Said individual shall have no
authority to authorize any activity which will result in any change in the
amount payable to Licensor. Such changes, if any, must be by written change
order issued in accordance with Section 4 to be valid and binding on the City.
12. Patent and Copyright Indemnification
Licensor will at its expense defend, indemnify and hold harmless the City
against any claim, liability, costs and damages of every type that Licensor
Software supplied hereunder and each subsequent release, modification or
enhancement supplied by Licensor infringes a legally enforceable patent or
copyright provided that:
(a) City promptly notifies Licensor in writing of the claim.
(b) Licensor has sole control of the defense and all related settlement
negotiations.
If such claim has occurred or, in addition to the obligations set forth above,
in Licensor's opinion, is likely to occur, Licensor shall immediately procure
for the City the right to continue using the Software or to replace or modify
the same so that they become non infringing and functionally equivalent.
Licensor has no liability for any claim based upon the combination, operation,
or use of any software not supplied by Licensor or with any program other than
or in addition to programming supplied by Licensor. Licensor has no liability
for any claim based upon alteration of modification of any programming supplied
hereunder, if such claim would have been avoided by the absence of such
alteration or modification.
The foregoing states the entire obligation of Licensor with respect to
infringement of patents and copyrights.
13. Termination for Cause
City may terminate this Agreement, by written notice, if Licensor
neglects or fails to perform or observe any material obligation to City
under these terms and conditions, and such condition is not remedied
within sixty (60) days after written notice has been given to Licensor.
14. Effect of Termination
Termination shall apply to all versions of the Licensor Software hereunder.
Before any termination by City becomes effective, and in the event of any
termination by Licensor, City shall (i) return to Licensor any license
certificate furnished by Licensor; (ii) destroy all copies of all versions of
the software in City's possession, (iii) remove all portions of all versions of
the software from any adaptations made by City and destroy such portion, and
(iv) certify in writing that all copies, including all those included in City's
adaptations, have been destroyed in accordance with Licensor's standard
destruction of software certification.
15. Applicable Law and Venue
The Parties agree that the laws of the State of Utah shall govern this Contract.
16. Waiver
Waiver of any breach of any term or condition of this Contract shall not be
deemed a waiver of any prior or subsequent breach. No term or condition of this
Contract shall be held to be waived, modified or deleted except by a written
instrument signed by the parties hereto.
17. Assignment
Neither party may assign this Agreement or any interest in or part thereof, or
monies due or to become due hereunder without the prior written approval of the
other party, except that either party may assign this Agreement to a
wholly-owned entity or parent company of the party.
18. Entire Agreement
This Contract, including the attached Exhibit which are incorporated by
reference, sets forth the entire Agreement between the parties with respect to
the subject matter hereof. Any other understandings, whether verbal or in
writing shall not be binding on either party. Except as provided herein, no
alteration of any of the terms, conditions, delivery, price, quality, or
specifications of this Contract will be effective without the written consent of
both parties. The section titles are for convenience only and shall not be
determinative in the interpretation of this Agreement.
19. Approval
WHEREFORE, the undersigned represents that he/she has read the foregoing
Contract including all attachments hereto, agrees to be bound to its terms and
has authority to execute the foregoing Contract on behalf of the respective
party hereto.
DATED effective as of the date first above written.
Provo City
By: ______________________________________
Mayor Lewis K. Billings
ATTEST:
__________________________________________
Provo City Recorder
APPROVED AS TO FORM:
__________________________________________
Provo City Attorney
Video Internet Broadcasting Corporation, d.b.a.
HomeNet Communications of Utah.
By: ______________________________________
Michael W. Devine (President)
ATTEST BY:
______________________________________________
Name:
Title:
APPENDIX A
"HomeNet Software" Definition
HomeNet software includes software which allows the City to provide video to end
users on the City Network. HomeNet Software consists of the following:
Set Top Application
A HTML page that displays the channel numbers and options for viewing. This page
is what the customers see on their TV and what they control with their remote.
The application will be branded with the "iProvo" logo and name.
Database Schema
The "template" for the database that the Set Top Application and Administration
tools use. This notes what information is in the database and how it is stored.
Administration Tools
These HTML based tools provide read and write access to the database. The two
main applications are Content Management where you set the packages of channels
viewable by the subs and Household management where you control the details of
each sub including what channels they can watch and the MAC addresses for the
set top boxes on their account.
Other programs and scripts that are part of the package are:
Boot P
This loads the kernel on the set top boxes when they boot up.
DHCP
This program hands out IP addresses to the set top boxes after they receive the
kernel from the Boot P program.
MySQL (Database application)
This is an open source database program. It manages the database that stores all
the customer information, content information and various miscellaneous pieces
of data used in the system.
Web Server
Apache Web Server.
Documentation
System documentation detailing setup, maintenance, and operation of HomeNet
software.
Exhibit L
IP Video Set Top Box Usage Agreement
VIDEO INTERNET BROADCASTING CORPORATION
PROVO CITY
MIDDLEWARE AND SET TOP BOX LICENSING RIGHTS
In the event that the Initial Provider Network Access and Use Agreement between
Provo City (Provo) and Video Internet Broadcasting Corporation d.b.a. HomeNet
Communications of Utah (HomeNet) is terminated for any reason and no replacement
agreement is executed with HomeNet as a retail services provider on the Provo
Network, Provo shall have certain rights set forth in this Exhibit L relating to
the licensing and/or purchase of the HomeNet IP Video Middleware (Middleware)
and the compatible and deployed version of Set Top Box (STB).
Middleware:
Upon termination of the Retail Services Provider Agreement and in the absence of
a replacement agreement executed with HomeNet as a retail services provider on
the Provo Network, Provo will have the right to lease the HomeNet Middleware
under the terms described in Exhibit K, Appendix A to this document.
Set Top Box
Upon termination of the Retail Services Provider Agreement and in the absence of
a replacement agreement established with HomeNet actively providing retail
services on the Provo Network, Provo will have the right to lease HomeNet set
top boxes under the following terms:
Price - Provo may elect to purchase all deployed set top boxes plus
available inventory at a price of $135 per unit. Alternatively, Provo
also has the right to lease the STBs from HomeNet for the sum of $5 per
month per set top box. The lease will terminate upon return of the STB
to HomeNet.
Maintenance - HomeNet makes no express or implied warranty for the STBs either
deployed or new (in inventory). If available, HomeNet will transfer any warranty
coverage provided by the STB manufacturing partner to Provo. HomeNet will not
provide any replacement or repair service on the STBs leased or purchased by
Provo. HomeNet will provide first level technical support on the STBs if Provo
is both licensing the Middleware and leasing (or has purchased) the STB from
HomeNet.
Exhibit M
Reports
The following reports will be provided by the Service Provider to Provo on a
monthly basis thirty (30) days from the end of the reporting month. Service
Provider will develop a reporting format which is mutually acceptable to Service
Provider and Provo City.
o Monthly Subscriber Recap: This report will report the overall
activity of subscribers on the network in a total format. It
will include the number of accounts connected, disconnected,
change of services, service calls as well as a breakdown of
subscriber totals by service types and levels.
o Monthly Service Call Report. This report will include the
number of service calls responded to by address, and which
calls were resolved during the reporting period. This report
will also include the average time service calls remained open
and the longest open time on every category of service call
during the reporting period.
o Marketing Activity Report: This report will include the
various marketing activities during the reporting period, the
amount of money spent on each activity, and a brief analysis
of the outcomes of the marketing efforts.
Additional reports which are reasonable and do not require any significant
expense to the Service Provider may be requested by Provo. These additional
reports will be either for one time accounting of information or to be added as
a part of the ongoing reports. Provo will allow at least thirty (30) days for
the service provider to prepare a new report.
Exhibit N
Marketing Program
HomeNet Communications Provo Marketing Launch Plan
1) Pre-Launch: One month prior to launch of retail HomeNet service
a) Website links go live - June 1st
b) Email mail server - August 1st
c) Open HomeNet Store - (Now at 363 University)
d) Retail Signage - May 15th
e) Brochures on hand (1st draft version) - July 15th
f) Sign-ups accepted - Business Customers May 15th, Residential
June 15th
g) Record all contacts in HomeNet database for future contact -
May 15th
h) Provo Cable MDU conversion incentive - April 15th
i) Establish Provo Power referral program - September 1st
2) Local Press Release Campaign - Manage Expectations
a) General Overview of HomeNet -June
(1) Announce Opening of Local Office
(2) Locally funded
(3) Key Differentiators
b) The Herald
c) The Tribune
d) The Deseret News
3) Print Advertisements
a) Provo-specific advertisements (TBD)
b) White Paper style advertisements - August
4) Grandview HomeNet Pilot May 1st - July 31st (HomeNet will
conduct a pilot rollout of services that will be used to
gather product feedback, tweak service package design, prove
operational procedures, etc.)
a) Direct marketing to pilot participants Introduction - May 1st -
June 30th
b) Manage expectations of pilot participants - Ongoing
c) Package May 15th - August 1st
(1) Welcome Letter
(a) Explain that adjustments will be made
(b) `This is a introductory phase"
(c) "Could experience the following..."
(d) Anticipated outages
(2) Timeline
(3) Contact information FAQ
(4) Control Questionnaire
(5) Postage paid return envelope
(6) Web interface feedback form
(7) Bill
d) Throughout the remainder of the pilot
(1) Updates to the pilot participants
(2) Develop pilot customer "wish list" in AMS
(3) Continue high-touch from telemarketers for feedback
5) Production Launch (fully live) - September 1st
a) Local Office production ready
(1) Convenient Payment Drop Boxes
(2) Fully staffed
(3) Demo "living room" for triple play experience
(4) Weekly user interface tutorials Scheduled attendance /
introduction at local organizations (June - Ongoing)
(1) Rotary, Lions, Kiwanis
(2) Chamber of Commerce (member)
(3) Youth Sports Organizations
(4) Others??
6) Node Specific Marketing
a) Neighborhood Chairs
(1) Summit Meeting - September
(2) Neighborhood Incentive Program (depending on AEG build plan)
(a) Neighborhood Sign-up parties
(i) Kid's games, wienie roast, etc.
(ii) Sign-up incentives
(iii) School Principal Content Demos
(iv) Multi-player game demos
(v) Local Sports Content Demos
(b) Lawn Stakes "Another Grandview Home on HomeNet!"
b) Neighborhood Leader Extension Program (July - Ongoing)
(1) Each Chair identifies 5 -10 key players in their neighborhood
(2) Incentives for participation of key individuals... TBD
c) School programs (July - Ongoing)
(1) Principals summit
(2) Darwin Server Content Creation Program
(a) Provide Equipment?
(b) Provide content creation / management training and support
(c) City-HomeNet partnership
(d) Get other manufacturers to subsidize?
(e) Top-five-ideas competition amongst school kids
(f) Seed some content for neighborhood sales pitches
d) "Got Fiber?" Campaign (September - Ongoing)
(a) Scrip for schools to redeem in content creation program
(b) Competition between schools - post results on web
(c) Attend Rallies or events at schools
(d) Attend PTA meetings
(e) Provo Power to back and support
(f) Prominent "Got Fiber" banners at each school
e) City Council VOD - September
(1) Get VOD of City Council available for view right away
(2) Leverage Council to market to their constituents
f) Youth Sports VOD - September
(1) Get Local Youth Sports Organizations to back the HomeNet
iProvo push
(a) Provide Equipment?
(b) Provide content creation / management training and support
(c) Get Provo to subsidize?
(d) Get other manufacturers to subsidize?
(e) Seed some games neighborhood-specific content (youth games)
for neighborhood sales pitches
g) Neighborhood BYU/Teen Sales Program August - Ongoing
(1) Sign up local neighborhood teens for agency program
(a) Each individual gets territory based on where they live
(b) Commissions per new account
(c) Accelerators for high penetration
(d) Competition between Neighborhood "Teams" with results posted
on web site - prizes
7) HomeNet Pricing Strategy
a) Simple product ordering menu
(1) Data Only
(2) Video Only
(3) Double Play
(a) Video + Data
(b) Video + Phone
(c) Data + Phone
(4) Triple Play
b) "Customize your offering with help of CSR"
8) MDU Specific Marketing
a) Provo Cable MDUs
(1) Complete List of MDUs + Contact information - Done
(2) Physical Map of all Provo Cable MDUs - Done
(3) Lock in all Provo Cable MDUs to 5 year extensions - September
1st iProvo MDUs locked into 5 year extensions at new rates -
September 1st
c) New MDU business
(1) Build database to include status of all current competitively
held MDU Contracts (Comcast, Qwest, etc.) - September 1st
(2) Prioritize those coming off current contracts in next 6 months
(3) Build detailed knowledge of rules, restrictions, and provisos
of current competitive contracts by MDU account - June 30th
(4) Provide offering to include turnkey service for terminating
the existing competitive MDU contracts - June 30th
(5) Letter of intent to switch services to HomeNet is required for
all termination and consulting services - August 1st
(6) Create commercial quality marketing piece describing the
benefits and process of switching to HomeNet from incumbent
provider for use in direct sales activities - August 1st
(7) Direct professional sales program to communicate value to the
MDU decision makers and close contract sales - Ongoing
9) Business Customer Specific Marketing
a) Build Initial Business Product Offering - June 15th
(1) Basic Data Connection
(2) Tiered High Speed Data Connection
(3) Transparent LAN Service (Private Peer to Peer Connectivity)
(4) Business Voice Offerings
(a) Basic
(b) PBX Services
(c) Advanced Features
(5) Business (Commercial) Video Offerings
(6) Bundles
b) Sign Up Initial Subscribers - May 15th (done)
10) Budget (Twelve months from signing of contract) Annualized Marketing
Budget Newspaper Advertising $15,000 Signage $10,000 Radio Advertising
$12,000 Door to door campaign $10,000 Door hangers $2,000 Billboards
$6,000 Phone books $500 Demo sites $2,000 Brochures $5,000 Direct
mailers $5,000
Total $67,500 (Anticipate spending $30k - $35k in 2004)
Exhibit O
Customer Service Program Plan
Service Provider will at all times be required to meet or exceed the specific
Customer Service standards set forth in the body of this contract and its
Franchise Agreement. Measurement and reporting of all Customer Service metrics
will be as prescribed in this contract and the Service Provider's Franchise
Agreement.
In addition, Service Provider shall provide the City the following reports
demonstrating the level of Customer Satisfaction of its subscribers. Customer
Satisfaction will be measured using the following scale:
Customer Satisfaction will be measured using the following methodology:
1. Subscribers will be asked to fill out a brief questionnaire regarding
the level of service and resultant satisfaction they've experienced
after each field service call and closed trouble-ticket.
2. In addition a random sample equaling 10% of Service Provider's
subscriber base will be provided the Customer Satisfaction
questionnaire via mail, once a calendar quarter, occurring in the third
month of said quarter. These replies will be returned by said customers
directly to Provo City for compilation.
3. The average of all Customer Satisfaction Questionnaire results will
used to produce the overall Service Provider Customer Satisfaction
Average that will be made available to the City within 30 days of the
close of each calendar quarter.
4. The first measurement will be made and reported after the first
complete calendar quarter served by the Service Provider.
The measurement periods will be the following calendar quarters:
o Quarter 1 - January February, March
o Quarter 2 - April, May, June
o Quarter 3 - July, August, September
o Quarter 4 - October, November, December
All Customer Satisfaction Average Reporting will be strictly
confidential information for the City's internal use only. The Customer
Satisfaction Average Reports may not be shared with any outside party, for any
reason, without the express written consent of the Service Provider.
Exhibit P
In-Home Wiring Standards
A. In-Home Wiring shall mean: The installation of in-home
telecommunication cabling, specifically Cat5e Ethernet for transmission
of video and Internet services and Cat3 for transmission of voice
services. Cabling will connect from a telecommunications portal located
on the inside or outside of residential homes within close proximity to
the utility power meter. Installation practices should meet industry
standards for in-wall type "fishing" of cables utilizing a "wall plate"
style connection at the in-home demarcation point which should be
located no more than three feet from end point device, unless otherwise
specified by subscriber.
B. Video Service Wiring Standards: All video services wiring shall meet or
exceed the following standard specifications.
a. Wiring Standard: Category 5e Ethernet Cabling
b. In-Home Demarcation:
i. In-Wall outlet comparable to:
1. Leviton 41080-2WP
2. Leviton 5G108-RW5
c. Entertainment System:
i. Technicians shall be knowledgeable with the current
products available in residential entertainment
systems.
ii. Technicians shall be proficient in residential
entertainment systems design, layout and structure.
1. RF connections
2. RCA connections
3. High Definition connections
4. AC 3 audio connections
5. Recording device connections
d. Tutorial and Training:
i. Technicians shall provide complete instructions on
usage of the video interface, remote control and
general layout of the system through literature
provided by VIB.TV and through clear oral
instructions.
ii. Successful bidder should expect regular subscriber
audits regarding quality of customer service,
professional appearance and training.
C. Internet Services Wiring:
a. Wiring Standard: Category 5e Ethernet Cabling
b. In-Home Demarcation:
i. In-Wall outlet comparable to:
1. Leviton 41080-2WP
2. Leviton 5G108-RW5
c. Personal Computers:
i. Technicians shall be proficient in the installation
and configuration of NIC and USB adapters.
ii. Technicians shall be proficient with general customer
PC services.
D. Voice Service:
a. Wiring Standard: Category 3 Telephony Cabling
b. Existing Voice Demarcation:
i. Connection from Fiber demarcation to customer premise
existing voice system outside demarcation point.
ii. Final testing for dial tone connectivity
c. Additional Voice System Connections:
i. In-Wall outlet comparable to: Leviton 40249-W
ii. Final testing for dial tone connectivity
E. Material Standards: All materials shall meet or exceed general industry
standards. The list below is not and should not be regarded as a
comprehensive list of minimum requirements.
a. General Standards:
i. UL verification for the given application
ii. If exposed to the exterior elements shall be UV rated
iii. Internal, 10/100, full Duplex NIC (network interface
card)
Exhibit Q
Standard Portal Configuration
Exhibit R
Bandwidth Purchasing Requirement
As part of the Agreement, Service Provider agrees to an initial commitment to
purchase Internet bandwidth from the City for the period commencing at the
execution of this Agreement and terminating on June 1st of 2005. Service
Provider will purchase no less than the requisite amount of bandwidth required
to adequately serve its subscribers as specified in Section 6.12 (Truth in
Bandwidth) from the City at the following terms:
Service Provider will specify in writing (within 30 days of signing of this
agreement) the starting amount of bandwidth they require.
o Internet bandwidth will be purchased at a price of $150.00 per
one (1) Megabyte (MB) per month.
o Internet bandwidth will be purchased in increments of one (1)
MB.
o Service Provider will use best efforts to notify City thirty
(30) days in advance of the month in which the bandwidth will
be required of any increases or decreases in purchased amount.
o Bandwidth purchases will be paid the month following its usage
on terms of Net 15.
If the City elects not to sell bandwidth to Service Provider during the period
specified in this Exhibit (Exhibit "R"), Service Provider will be free to
procure any additional bandwidth from any source it so chooses.
Upon termination of the period specified in this Exhibit (Exhibit "R"), the City
and Service Provider will be free to enter into an extension of this agreement,
create a new bandwidth purchase agreement, or terminate any Bandwidth purchasing
relationship at the mutual discretion of both parties.
Exhibit S
Soft Switch Telephony Services
1. HomeNet to purchase, own, maintain and operate the VoIP phone
Softswitch to be used in providing voice services to its subscribers on
the Provo Network. The purchase of the sofswitch and all necessary
hardware, up to and including connection to the PSTN, must be made by
August 15, 2004. HomeNet must be ready to deliver full "telephony
services" by September 15, 2004.
2. HomeNet and Provo come to mutually acceptable rate of transport for
voice services on the Provo Network.
3. HomeNet will locate the Softswitch and related equipment in Provo
(headend) if unable to provide good and reliable service with the
Softswitch outside of Provo.
4. HomeNet may make its VoIP Softswitch system available to other service
providers at rates it deems appropriate in its sole discretion and
authority.
5. HomeNet must provide a partitioned duplicate and backup Softswitch and
system (including all licenses and maintenance requirements) to be
located in Provo and title of ownership transferred for the amount of
$1.00 to Provo by sales agreement. This is for business continuity.
Said sales agreement shall provide for a period of thirty (30) months,
from the execution of this Agreement, HomeNet shall have an
indefeasible right to use of the Softswitch and system, and will have
sole operational and management control. Futhermore, at the end of said
thirty (30) month period, and as long as HomeNet has remained a Service
Provider on the Provo Network, HomeNet has an indefeasible right to
repurchase the backup Softswitch and system from Provo for the amount
of $1.00 by sales agreement.
6. HomeNet and its Softswitch vendor shall fully coordinate and cooperate
with Provo in resolving technical issues surrounding the Softswitch and
the Provo Network.
7. HomeNet will enter into the required agreements for processes and
services with a PSTN Provider and satisfy all legal and regulatory
requirements for telephony services in Provo. Where legally possible
and viable, HomeNet shall take over any existing Provo contracts with
Electric Lightwave Inc. for the local and SLC PRI's and any other
obligations. Such assumption of said contracts shall not be
unreasonably withheld.
8. HomeNet will only use a VoIP Softswitch systems certified as
interoperable with World Wide Packets Ethernet Switching equipment by
the manufacturer. Proof of interoperable will be required by contract
with WWP.
9. If HomeNet selects and plans to purchase a VocalData Softswtich, then
HomeNet must obtain a proposal on the backup plan and steps to complete
the work and share the information with Provo.
10. If HomeNet selects and plans to purchase a NetCentrex Softswitch, then
HomeNet will provide the following:
o A copy of the letter of agreement between WWP and NetCentrex
on the plan for interoperability within a week of the
execution of this Agreement. Provo shall make best effort to
engage World Wide Packets and request its full cooperation and
desire to have NetCentrex certified as interoperable.
o Within one (1) week of the execution of this Agreement HomeNet
will set up a limited, of no more than ten (10) users, field
trial using the NetCentrex Softswitch as a demonstration.
o Within two (2) weeks of the execution of this Agreement,
Service Provider is to provide the City with a continuation of
the telephony services plan. Weekly updates of progress will
be made to Provo.
o The Softswitch must be certified as interoperable no later
than August 15, 2004 prior to the required purchase date.
o Provo is to provide support equivalent to current levels for
the operations of the existing VocalData Softswitch through
August 15, 2004.
11. Provo staff shall be availed training in the use of, and access to, the
iProvo production partition on whatever switch is purchased. The
purpose of this access is emergency provisioning and business
continuity. At no cost, Provo will be invited to attend vendor-provided
training purchased by Service Provider.
12. Service Provider and Provo shall share the financial responsibility for
the current VocalData Softswitch costs incurred through August 1, 2005.
Such financial responsibility is not to exceed $7,500 for each party.
The percentage split of financial liability will be determined in final
negotiations with VocalData.
Exhibit T
OSS/BSS Interface Process and Procedures
OSS (Operational Support System) and BSS (Business Support System) inter-working
between the Provo and Service Provider will be required for the overall success
of the Provo Network. OSS/BSS processes and procedures, by their very nature,
are dynamic and fluid. For purposes of this contract, the OSS/BSS Process and
Procedure is established as an operational framework.
Service Provider and City commit to create and document the specific process
flows, supporting systems, and specific points of inter-working between entities
that will create the foundation for the four main OSS/BSS categories (detailed
below), which will be titled "OSS/BSS Process and Procedure Foundation". The
first edition of the "OSS/BSS Process and Procedure Foundation" will be
finalized and agreed to no later than 60 days from the execution of this
contract.
Ongoing, both Service Provider and City commit to make adjustments and changes
to OSS/BSS Process and Procedure as required by business conditions and
subscriber requirements. At all times OSS/BSS Process and Procedure will
subjugate to the standards relating to matters covered herein as set forth by
other relevant sections of this contract.
Service Provider and Provo will establish and continue to refine all requisite
processes, procedures, systems, and reporting ensuring the success of the Provo
Network. The four main OSS/BSS operations categories, in which specific
processes, procedures, systems, and reporting will be created and documented in
operational agreements, are as follows:
1. Provisioning Operations - Provisioning Operations represents all OSS/BSS
process and procedure required for accurate and efficient initiation,
modification, and/or termination of subscriber services. This includes but is
not limited to: provisioning of new subscribers, activation of service for new
subscribers, moves/adds/changes for subscribers, creation and modification of
services catalogue, disconnection of subscribers, and deactivation of
subscribers.
2. Network Systems Operations - Systems Operations represents all OSS/BSS
process and procedure required for accurate and efficient network systems
performance maintenance. This includes but is not limited to: network
monitoring, network diagnostics, troubleshooting of identified problems, system
upgrades, equipment and software maintenance, network predictive and planning
capabilities, and network reporting.
3. Billing Systems Operations - Billing Systems Operations represents all
OSS/BSS process and procedure required for accurate and efficient billing for
wholesale and retail services. This includes but is not limited to: accounting,
subscriber billing, service provider billing, long-distance telephony billing,
VOD/PPV billing, broadcast video content billing mediation, billing for dynamic
data services, general billing mediation, reporting, billing reconciliation, and
billing dispute resolution.
4. Customer Support Operations - Customer Support Operations represents all
OSS/BSS process and procedure required for accurate and efficient subscriber
support services. This includes but is not limited to: technical support, after
hours customer support, emergency system support, trouble ticketing and tracking
capability, emergency escalation procedure, call center systems, customer and
technical support reporting, and customer satisfaction measurement and
reporting.
Exhibit U
Financial Security Arrangement Agreement
In demonstrating evidence of Video Internet Broadcasting's (VIB) ability to
financially perform all responsibilities contemplated by the Agreement, Provo
requires VIB to provide evidence of an irrevocable Line of Credit for $1.5
million with a nationally chartered bank. This Line of Credit should be for the
period of one year and be in the name of VIB and be designated for the iProvo
project. Each successive year VIB will be required to provide evidence that a
Line of Credit is in place for the same amount required of other service
providers providing similar services on the network. In the event that VIB is
the only service provider on the network, iProvo will designate the amount of
the line of credit required, in no year will it exceed 1.5 million dollars.
As surety of VIB's operational performance and protection from material breach
of its obligations, Provo requires (in addition to the $1.5 million line of
credit) an irrevocable Letter of Credit in the amount of $50,000 or 50 percent
of the monthly transport fees due the City, whichever is greater. After the
first year following the execution of the Agreement, the amount of the letter of
credit will then adjust to a percentage of monthly transport fees equivalent to
the requirements set for other service providers. In the event that VIB is the
only service provider on the network, iProvo will designate the percentage of
monthly transport fees to be used in the calculation of the amount of the letter
of credit, in no year will it exceed 50 percent of monthly transport fees.
The term of the Letter of Credit shall be the term of the Agreement, including
any renewal period. The Letter of Credit shall be issued by a nationally
chartered bank and contain terms and conditions acceptable to Provo. Prior to
seeking recovery under this Letter of Credit, Provo shall notify Service
Provider in writing of the default giving rise to Provo's claim for recovery
under this section. Service Provider shall have thirty (30) days to cure the
default. Upon Service Provider's failure to cure, Provo may immediately draw on
the Letter of Credit and in addition pursue any other remedy available under
Article XIII.
VIB shall provide to the City on an annual basis, by a date no later than ninety
(90) days after the close of their fiscal year, financial statements which shall
include a Balance Sheet, Income Statement, and Statement of Cash Flows with
accompanying Notes for the fiscal year just completed. A report verifying that
they have been reviewed by a Certified Public Accountant shall accompany the
financial statements.
In the event that VIB completes its corporate name change to HomeNet
Communications of Utah, both the Line of Credit and the Letter of Credit shall
be immediately updated to reflect the change.