Master License Agreement - Hilton Hotels Corp. and CAIS Inc.
HILTON HOTELS CORPORATION
MASTER LICENSE AGREEMENT
FOR
CAIS, INC.
<PAGE>
TABLE OF CONTENTS
Paragraph Page No.
--------- --------
1. LICENSE............................................................1
2. USE OF LICENSED AREA...............................................2
3. TERM OF INDIVIDUAL HOTELS..........................................2
4. FEES...............................................................3
5. INSTALLATION AND OPERATING PROCEDURES..............................4
6. INTERFERENCE.......................................................6
7. MAINTENANCE AND REMOVAL OF LICENSEE'S EQUIPMENT; SITE MAINTENANCE..7
8. HAZARDOUS SUBSTANCES...............................................8
9. INSURANCE..........................................................9
10. INDEMNITIES........................................................9
11. LIMITATION ON CONSEQUENTIAL DAMAGES; DISCLAIMER OF WARRANTIES.....11
12. LIENS.............................................................11
13. OWNERSHIP.........................................................12
14. LICENSOR RIGHT TO ENTER OR GRANT ENTRY............................12
15. LICENSEE'S PROPERTY...............................................12
16. TERMINATION.......................................................12
17. HOLDING OVER......................................................14
18. SUBLICENSING AND ASSIGNMENT.......................................14
<PAGE>
19. RELOCATIONS OF LICENSED AREA AND OR THE EQUIPMENT.................15
20. NATURE OF LICENSE.................................................15
21. NOTICES...........................................................16
22. DEFAULT UNDER OTHER LICENSE.......................................16
23. ACCESS TO THE SERVICES............................................16
24. REPRESENTATIONS AND WARRANTIES OF LICENSEE........................17
25. INDEPENDENT CONTRACTOR............................................17
26. DRAFTING AND PREPARATION..........................................17
27. MISCELLANEOUS.....................................................17
28. SEVERABILITY......................................................19
29. ENTIRE AGREEMENT..................................................19
EXHIBIT A LIST OF EQUIPMENT..........................................A-1
EXHIBIT B ARBITRATION PROVISIONS.....................................B-1
SCHEDULE 1 LIST OF HOTELS............................................S-1
OPTION ADDENDUM.....................................................OD-1
<PAGE>
MASTER LICENSE AGREEMENT
THIS MASTER LICENSE AGREEMENT dated for reference purposes only,
December 23, 1998, by and between Hilton Hotels Corporation, a Delaware.
corporation, (hereinafter referred to as "Licensor"), and CAIS, Inc. a Virginia
corporation (hereinafter referred to as "Licensee").
W I T N E S S E T H:
-------------------
WHEREAS, Licensor operates a national chain of hotels in various cities
of the United States commonly known as the Hilton Hotels; and
WHEREAS, Licensee has devised a commercial, high speed data
communications service as more particularly defined in Paragraph 2 (the
"Service") and desires to make the Service available to Licensor and third
parties at Licensor Hotels: and
WHEREAS, Licensor has agreed to license to Licensee the nonexclusive
right to place equipment for the provision of the Service (the "Equipment") in
certain guest rooms and other areas within the specific hotels named in riders
attached as Participating Hotel Site Acknowledgement (the "Riders") and the
respective Hotels (the "Hotels") included are subject to increase or decrease
from time to time; and
WHEREAS, Licensor desires to grant to Licensee the right to install and
operate the Equipment necessary for the Service at the Hotels and Licensee
desires to acquire such right;
NOW, THEREFORE, the parties agree as follows:
AGREEMENT
---------
1. LICENSE
-------
a. Licensor hereby licenses to Licensee, and Licensee hereby
Licenses from Licensor, the nonexclusive right to use certain areas and existing
telephone wiring for the installation and operation of the Equipment for the
Service in certain guest rooms and other areas to be determined from time to
time by Licensor within the Hotels. The certain area, as they may be changed by
Licensor from time to time hereinafter shall be collectively called the
"Licensed Area".
b. Licensee shall, at it sole cost and expense, install maintain,
operate, repair, upgrade and replace and Equipment and construct any other
improvements necessary including connections for power and telephone lines, as
further defined in Paragraph 5 hereof.
c. At each of the (participating) Hotels, Licensee shall install
the Service
1
<PAGE>
in all Meeting Rooms and in a minimum of (a) 200 Guest Rooms where the
(participating) Hotel has 400 or greater Guest Rooms, or (b) 50% of the Guest
Rooms where the (participating) Hotel has fewer than 400 Guest Rooms.
d. Costs for use of telephone lines shall be at Licensee's sole
cost and expense.
2. USE OF LICENSED AREA
--------------------
The Licensed Area shall be used by Licensee only for the provision of
the Service. The Service shall mean and is limited to the installation and
operation of a networking system including all related components, software,
wiring and communications services as set forth in Exhibit A, whereby Guests in
---------
separate Guest Rooms or Meeting Rooms at the Hotel will be able to connect
Ethernet-capable laptop computers, servers, and other Ethernet-capable computer
equipment to a network provided by Licensee. The Service shall allow networking
and interoperation of computer equipment within the Hotels (respectively) and
shall allow computers connected to the Licensee supplied network within the
Hotels to access the public Internet through dedicated 1.5 Mbps T1 or greater
telecommunications line provided by Licensee. No other Service or use of the
Licensed Area is permitted without Licensor's prior written approval.
3. TERM OF INDIVIDUAL HOTELS
-------------------------
a. For each of the (participating) Hotels having 1,000 or greater
Guest Rooms, the Initial Term shall be two (2) years and the optional Extended
Term shall be three (3) years. For each of the (participating) Hotels having
fewer than 1,000 Guest Rooms, the Initial Term shall be three (3) Years and the
Extended Term shall be two (2) years. The commencement and termination dates for
the individual Hotels are defined in the Rider(s). Notwithstanding the
foregoing, the Initial Terms shall not extend beyond (i) December 31, 2001 (for
participating Hotels having 1,000 Guest Rooms or greater) or (ii) December 31,
2002 (for participating Hotels having less than 1,000 Guest Rooms), and the
optional Extended Terms shall expire no later than December 31, 2004.
b. Hilton Hotels Corporation must specifically and individually
approve the extension of the dates as defined above in subparagraph 3a in the
event Licensee and individual Hotels are planning to execute the Rider(s) after
December 31, 1999.
c. Licensor's exercise of the Extended Term(s) shall be at its
sole discretion. Licensor shall provide ninety (90) days prior written notice of
its intention to exercise the Extended Term(s).
2
<PAGE>
4. FEES
----
a. Allocation of Usage Fees
------------------------
For each participating Hotels, the allocation of Usage Fees is as
defined in Schedule A attached to the Riders.
b. Fee and Payment Term Procedure
------------------------------
(i) Based upon daily information reported by the Service
monitoring equipment (provided and installed by Licensee at no cost to Licensor)
the Hotels shall charge Guests on a per-use or other basis for access to the
System an amount (the "Usage Fee") based on a pricing schedule mutually agreed
to by Licensee and Licensor and defined in the Riders. Usage Fees shall include
---------------------
Set-Up Fees. Access Fees, and or other billed amounts derived directly from or
in relation to use of the Service by Guests.
(ii) The Service monitoring equipment shall generate an accurate
record ("Access Record") of the usage and access to the Service by any Guests,
including a record of the usage charges for each individual Guest's bill or
account. Licensee shall be responsible for the costs associated with the
programming of the computer within the Service monitoring equipment to enable it
to provide the aforesaid data.
(iii) Licensee shall make available to the Hotels information
sufficient to ensure proper billing of Guests and other information on Service
usage reports as the Hotels may reasonably request to track Service usage.
(iv) Licensee may review and use the Access Record for such
purposes as Licensee may reasonable deem appropriate, except that Licensee shall
not disclose any such information to third parties except as agreed to by the
Hotels. In the event of any such disclosure by Licensee, Licensee shall
indemnify and hold harmless the Hotels and Licensor from all claims, loss,
damages or actions arising from such disclosure.
(v) The Hotels may, in their sole discretion, adjust the Usage
Fee as to any Guest of the Hotel in conjunction with any dispute with such Guest
in which case the "Usage Fee" shall mean the Usage Fee for such Guest as so
adjusted, Licensee understands and agrees that the Hotel shall generally refund
the Usage Fee to the Guest in the event the Guest disputes the charge or
expresses dissatisfaction with the Service.
(vi) During the Term of the Agreement, the Hotels shall be
responsible for billing and collection of Usage Fees from Guests. Usage Fees
shall be
3
<PAGE>
allocated to the Hotel and Licensee respectively, in accordance with the
percentages set forth above. The Hotels shall pay Licensee's allocation of the
Usage Fees to Licensee on a monthly basis with in twenty (20) days following the
Hotel's receipt of a monthly invoice from Licensee. The Hotel shall provide
Licensee with a monthly statement of any credits issued to Guests.
(vii) If requested by Licensee, the Hotels shall collect from
Guests any applicable taxes levied on or measured by the Usage Fees and forward
them as set forth in the monthly invoice from Licensee. Licensee shall remit all
such taxes to the appropriate taxing jurisdictions. Licensee shall notify the
Hotels of the appropriate tax base, tax rate and exemption policy ("Tax
Elements") to apply to the Usage Fee and of any changes to these Tax Elements.
The Hotel will incorporate these Tax Elements into its billing systems and cause
them to be applied to the Usage Fees. The ultimate responsibility for the
collection and/or payment of any taxes, interest, and/or penalty levied on or
measured by the Usage Fees shall be that of Licensee.
(viii) If Licensor collects Licensee's Usage Fee through a
collection agency or through legal action, Licensor need only remit to Licensee
the net amount collected after deducting Licensor's costs of collection and the
Hotel's appropriate allocation of Fees.
(ix) Notwithstanding anything to the contrary contained in this
Agreement, the addenda, riders or schedules, the parties agree to adjust Usage
Fees as necessary at either the individual hotels or collectively as the case
may be to accurately reflect the "market rate" for the Service.
5. INSTALLATION AND OPERATING PROCEDURES
------------------------
a. Licensee shall operate the Equipment during the Term hereof in
compliance with all present and future rules and regulations imposed by any
local, state or federal authority having jurisdiction with respect thereto
(including, without limitation the rules and regulations of the FCC and the
Federal Aviation Administration (the "FAA"). Licensee shall promptly forward to
Licensor copies of all applications for all FCC operating licenses (if required)
and copies of other licenses which it has been issued pertinent to this License.
Licensee shall have at all times any licenses, permits and approvals necessary
for the installation or operation of the Equipment. Licensor shall cooperate
with Licensee in securing licenses, permits and approvals. Prior to installation
of the Equipment, or any modification or changes to or removal of the Equipment,
if any, Licensee shall comply with the following:
(i) Licensee shall submit in writing all plans for such
installations, modifications or changes for Licensor's approval. No other
equipment shall be added to the Licensed Area without Licensor's prior written
consent.
4
<PAGE>
(ii) Prior to commencement of any work, Licensee shall
obtain Licensor's prior written approval and any required approvals of all
federal, state and local agencies. If requested, Licensee shall promptly deliver
to Licensor written proof of compliance with all applicable federal, state and
local laws, rules and regulations in connection with any installations,
modifications or changes to or removal of the Equipment.
(iii) All of such modifications, installations, changes or
removal work shall conform to Licensor's design specifications, weight and
windload requirements, and shall not interfere with any other radio
communications systems and equipment located in and upon the Licensed Area, and
shall be in compliance with all applicable local, state and federal government
requirements, including but not limited to zoning, FAA and FCC specifications.
(iv) All of the wireless access Equipment shall be clearly
marked with waterproof lables to show Licensee's name, address, telephone number
and the name of the person to contact in case of emergency, FCC call sign,
frequency and location (if any). All coaxial cable relating to the wireless
access Equipment shall be identified in the same manner at the bottom and top of
the line. The Equipment shall be installed in a manner so as to be reasonably
inaccessible to unauthorized persons and to pose no hazard to safety of life or
property with respect to persons or property on or about the site.
b. Licensor reserves the absolute right to withhold approval in
all matters where Licensor's approval is required, if Licensor should determine
(in its sole discretion), that a possibility or a threat of interference or
other disruption to the business of the Hotel or Licensor or to other existing,
licensee(s) or tenants exists.
c. Licensor shall provide at its sole cost electric power in
accordance with Paragraph 8 of the Riders.
d. In the event a zoning variance is required at any Hotel in
connection with the installation or modification of Licensee's wireless access
Equipment, Licensor shall have the right, at its sole discretion, to either
(i) cancel this Agreement as to that specific Hotel, or (ii) allow Licensee at
Licensee's sole cost and expense, to obtain such variance. Should Licensee not
obtain such variance within thirty (30) days, Licensor shall have the right to
cancel this Agreement at the end of such thirty (30) days.
e. In order to assure Licensee's compliance with the provisions of
this Agreement, the plans and specifications for Licensee's wireless access
Equipment and any modifications thereto shall be submitted to engineers and
consultants selected by Licensor for review and approval. Licensee shall
reimburse Licensor for Licensor's reasonable out of pocket expenses incurred in
connection with such review and approval. All work performed at the site
5
<PAGE>
in connection with the installation and modification of Licensee's wireless
access Equipment shall be performed in a workmanlike manner by contractors
approved by Licensor, at Licensee's expense and all subcontractors shall be
properly licensed.
f. If access is required by Licensee to the Licensed Area in the
Hotels, Licensee shall provide twenty-four (24) hours prior notice to the
Director of Property Operations or the Manager on Duty at such Hotel for such
access. In the event of an emergency Licensee may have access to the Equipment
on a twenty-four (24) hour basis with reasonable notice to the above Hotel
officials. Access shall not be unreasonably denied by Licensor.
6. INTERFERENCE
------------
a. The installation, operation and/or removal of Licensee's
Equipment shall not interfere by way of electromagnetic, radio, microwave or
any other transmission or emission, electrically, or in any other manner
whatsoever, including health effects with the equipment, facilities, operations
or guests of Licensor, any present or future licensee, tenant of Licensor in
the Hotel at which the site is located, or any other third party, including,
but not limited to, any radio systems operated by the Hotel, no matter where
or when such systems are installed. Notwithstanding anything in this Agreement
to the contrary, it is expressly understood and agreed that if the
installation, operation or removal of Licensee's Equipment shall interfere
with Licensor's facilities or operations, or any other radio communications
systems and equipment at any time, Licensee shall, upon request (verbal or
otherwise), immediately suspend its operations and do whatever Licensor deems
necessary to eliminate or remedy such interference. If Licensee is unable to
rectify the interference within thirty (30) days, then Licensor, upon the
expiration of the thirty (30) day cure period, at its option, may terminate
this Agreement as to that specific Hotel, disconnect power and require
Licensee to remove any and all of the Equipment at Licensee's sole cost and
expense, or Licensor may (without termination of the Agreement) eliminate or
remedy such interference at Licensee's sole cost and expense. Licensee's duty
to pay all fees required under this Agreement shall continue through any cure
period and despite any suspension of Licensee's operations pursuant to this
paragraph.
b. Nothwithstanding the provisions of subparagraph c. below,
Licensee acknowledges that Licensor has licensed, and/or will continue to
license access for other types of equipment and services at the Hotels to third
parties. Licensee accepts this License with this knowledge and waives any and
all claims against Licensor resulting from or attributable to interference
caused by presently existing facilities or methods of operation employed by
Licensor in its business upon any Hotel. Licensee also waives any and all claims
against Licensor and against any other licensee or tenant of Licensor because of
interference resulting to Licensee by virtue of equipment, facilities or
operations employed by Licensor or by any other licensee or tenant of Licensor
in its business upon the site. In the event that any such interference occurs,
Licensee's sole remedy, in lieu of any and all other remedies at law, or in
equity, shall be to
6
<PAGE>
terminate this Agreement as to that specific Hotel at any time thereafter by
giving Licensor thirty (30) days prior written notice to that effect, and such
termination shall be effective at the end of such thirty (30) day period.
Licensee shall pay to Licensor any fees due for the period up to the termination
of this Agreement. Any advance fee payments for periods after the termination
of this Agreement will be reimbursed to Licensee.
c. The foregoing notwithstanding and without modifying Licensee's
sole remedy listed above, Licensor shall use commercially reasonable efforts to
prevent future installations from interfering with Licensee's Equipment or the
provisions of the Service.
7. MAINTENANCE AND REMOVAL OF LICENSEE'S EQUIPMENT: SITE MAINTENANCE
-----------------------------------------------------------------
a. Licensee, at its sole cost and expense, shall be responsible
for the maintenance of the Equipment and improvements, if any, at the Hotels and
shall keep all areas neat and clean, in accordance with all applicable laws and
regulations and this Agreement. Licensee shall not create any nuisance,
interfere with, annoy or disturb any other licensee of Licensor or any licensee,
tenant or guest of the Hotels. Licensor, at its sole cost shall maintain the
site in good repair to permit Licensee to use the Licensed Area at the site as
intended by the parties as embodies in this Agreement. Licensor shall have no
obligation to obtain licenses for Licensee, maintain, insure, operate or
safeguard Licensee's Equipment. All maintenance work shall be subject to prior
approval of Licensor and shall be performed by contractors, previously approved
by Licensor, such approvals not be unreasonably withheld or delayed. In the
event Licensor, in its opinion, determines that any structural modifications or
repairs need to be made to any portion of a specific Hotel as a result to the
presence of Licensee's Equipment or other improvements, Licensor shall have the
right to (i) terminate this Agreement as to that specific Hotel by giving
written notice to Licensee, or (ii) notify Licensee of needed modifications and
repairs, and Licensee at its sole cost and expense shall immediately make all
such noticed modifications or repairs in accordance with the terms of this
Agreement.
b. Provided that Licensee is not in default in the performance of
its obligations hereunder, at the expiration of this Agreement or earlier
termination thereof, Licensee may remove all Licensee's Equipment at Licensee's
sole cost and expense in accordance with the terms of this Agreement. Any and
all removal of Licensee's Equipment shall be performed by a contractor
previously approved in writing by Licensor and in accordance with a previously
approved removal plan, performed in a workmanlike manner, without creating any
interference, damage or destruction to any other equipment, structures or
operations at the Hotels or to any other equipment of other licensees thereon
ordinary wear and tear excepted. If Licensee fails to remove such Equipment
within sixty (60) days following termination of this License, Licensor may in
each instance remove the Equipment at Licensee's expense. All such interference
or damage caused to the Hotels or Equipment of other licensees shall be
immediately repaired or
7
<PAGE>
eliminated by Licensee. In the event Licensee fails to make such repairs within
five (5) days Licensor may perform all the necessary repairs at Licensee's cost
and expense and such sum shall be immediately due upon the rendering of an
invoice as an additional fee hereunder.
The foregoing notwithstanding, Licensee shall not remove jacks placed
in Guest Rooms or wiring installed in electrical closets, subceilings or attic
spaces. In all instances, such wiring and jacks shall become property of
Licensor.
8. HAZARDOUS SUBSTANCES
--------------------
a. Licensee represents, warrants and covenants that it will
conduct its activities at the Hotels in compliance with all applicable
Environmental Laws (as hereinafter defined). Licensor represents, warrants and
agrees that it will conduct its activities at the Hotels in compliance with all
applicable Environmental Laws.
b. Licensee agrees to defend, indemnify and hold Licensor
harmless from and against any and all claims, causes of action, demands and
liability including but not limited to damages, costs, expenses, assessments,
penalties, fines, losses,judgments and attorneys' fees that Licensor may suffer
due to the existence or discovery of any Hazardous Substance (as hereinafter
defined) at the Hotels or the migration of any Hazardous Substance to other
properties or released into the environment, that are caused by or result from
Licensee's activities at the Hotels.
c. Licensor agrees to defend, indemnify and hold Licensor
harmless from and against any and all claims, causes of action, demands and
liability including but not limited to damages, costs, expenses, assessments,
penalties, fines, losses,judgments and attorneys' fees that Licensor may suffer
due to the existence or discovery of any Hazardous Substance (as hereinafter
defined) at the Hotels or the migration of any Hazardous Substance to other
properties or released into the environment, that are caused by or result from
Licensee's activities at the Licensed Area.
d. The indemnifications in this Paragraph 8 shall survive the
expiration or earlier termination of this Agreement.
e. As used in Paragraph 8, "Environmental Laws" means all
federal, state and local environmental laws, rules, regulations, ordinaces,
judicial or administrative decrees, orders, decisions authorizations or permits
pertaining to the protection of human health and/or the environment, incuding
but not limited to, the Resource Conservation and Recovery Act, 42 U.S.C.
(Section) 6901 et seq., the Clean Air Act, 42 U.S.C. (Section) 7401 et seq.,
the Emergency Planning and Community Right to Know Act 42, U.S.C. (Section) 1101
et seq., the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. (Section) 9601 et seq., the Toxic Substances Control Act, 15
U.S.C. (Section) 2601 et seq., the Oil Pollution Control Act, 33 U.S.C. and any
other
8
<PAGE>
comparable local, state or federal statute or ordinance pertaining to the
environment or natural resources and all regulations pertaining thereto. This
definition includes all federal, state and local land use laws dealing with
environmental sensitivity, including, but not limited to, laws regarding
wetlands, steep slopes, aquifers, critical or sensitive areas, shore lines, fish
and wildlife habitats or historical or archeological significance.
f. As used in this Paragraph 8, "Hazardous Substance" means any
hazardous substances as defined by the Comprehensive Environmental Response,
Compensation and Liability Act, as amended from time to time; any hazardous
waste as defined by the Resource Conservation and Recovery Act of 1976, as
amended from time to time; any and all materials or substances defined as
hazardous pursuant to any federal, state or local laws or regulations or orders
and any substance which is or becomes regulated by any federal, state or local
governmental authority; any oil petroleum products and their by-products.
9. INSURANCE
---------
For each of the (applicable) Hotels, Licensee shall maintain in force
during the term of this License Agreement, at its own expense with responsible
insurance companies that have an A.M. Best Company rating of "A VIII" or better,
policies public liability insurance, including commercial general and automobile
liability insurance, insuring the contractual liability of Licensee under this
Paragraph, in an amount not less than TWO MILLION AND NO/100THS DOLLARS
($2,000,000) per occurrence. Licensee shall also provide worker's compensation
in an amount not less than the statutory requirements required by the State and
employers liability coverage in the amount of ONE MILLION DOLLARS ($1,000,000)
per accident, per disease policy limit and per disease per employee covering all
employees of Licensee.
All policies will name Hilton Hotels Corporation, the Hotels and other
entity listed on each of the Riders as may be executed by the Parties from time
to time, as "Additional Insureds." All policies of insurance shall be considered
primary of any existing similar insurance carried by Licensor, Hotel or
Licensee. Licensee shall provide the Licensor with Certificates of Insurance
carried by Licensee. If requested by the Hotels, Licensee shall furnish
certified copies of insurance carried. Copies of said Certificates of Insurance
or certified policies of Insurance shall be delivered to the offices of Licensor
and the Hotel by Licensee and must be kept current during the term of this
Agreement. No Policy of Insurance shall be canceled or materially changed
without thirty (30) days prior written notice to the Hotel.
10. INDEMNITIES
-----------
a. Licensee hereby agrees to indemnify, defend and hold
Licensor, their hotels, partners, subsidiaries, affiliates, franchises, and
allied companies and each of their officers, directors, agents, contractors,
subcontractors and employees (collectively,
9
<PAGE>
"Indemnitees") harmless from and against any and all claims, liabilities,
damages, fines penalties or costs of whatsoever nature (including reasonable
attorneys' fees), and whether or not occurring during the term hereof or
occasioned or contributed to by the negligence of Licensor, a Hotel, or any
agent or employee of the Indemnitees, or any of them (except as and to the
extent otherwise prohibited by applicable law), arising out of or in any way
connected with, and whether by reason of death of or injury to any person or
loss of or damage to any property or otherwise, arising out of or in any way
connected with actions or omissions of Licensee under this Agreement. Licensee's
representations, warranties, covenants agreements and licenses hereunder, the
services provided by Licensee or any Licensees or other subcontractors, of
Licensee hereunder or any related act of failure to act by Licensee, its agents,
licensees, subcontractors, servants employees or invitees, including without
limitation the use of the Licensed Area and any allegation that the Equipment or
any part of them infringes any rights of any other person, including without
limitation copyright, patent, trade secret, trademark, artist rights, droit
moral, privacy, publicity or other intellectual property laws, whether or not
occurring during the term hereof or occasioned or contributed to by the
negligence of an Indemnitee or an agent or employee of the Indemnitees, or any
of them (except as and to the extent prohibited by applicable law). In the event
that any claim is made or any action or proceeding is brought against the
Indemnitees, or any of them, arising out of or connected with this Agreement,
any such Indemnitees may be notice to Licensee, elect to require Licensee, at
Licensee's expense, to resist such claim or take over the defense of any such
action or proceeding and employ counsel for such purpose, such counsel to be
subject to the prior approval of such Indemnitee.
b. If the Service's system or any part thereof, furnished by
Licensee to the Hotels becomes, or in the opinion of Licensee may become, the
subject of any claim, suit or proceeding for infringement of any United States
patent or copyright, or in the event of an adjudication that such product or
part infringes any United States patent or copyright, or if the use, lease or
sale of such product or part is enjoined, Licensee shall elect and implement one
of the following options at its expense: (1) procure for the Hotel the right
under such patent or copyright to use, lease or sell, as appropriate, such
system or part, or (2) replace, modify, or remove such system or part. If the
Hotels or Licensor determines, in its sole discretion, that such replacement,
modification, or removal of the system or part has a significant negative impact
on the overall functioning of the Service, the Hotels or Licensor have the right
to terminate this Agreement thirty (30) days after giving written notification
to Licensee of such intention to terminate. In the event of such termination,
Licensee agrees to remove the Service as provided herein.
c. Licensee represents and warrants that (i) the Client-Server
Software does not contain any viruses, disabling code, or similar devices which
are designed to damage the Hotel's data, software, or hardware, or to interfere
with the Hotel's use of the Client Server-Software, (ii) the Client-Server
Software will function substantially in accordance with its
10
<PAGE>
specifications, (iii) Licensee has all rights necessary to grant the rights set
forth in this Agreement, and (iv) the Client-Server Software will, without
adverse effect, (A) function on and after January 1, 2000, and (B) process,
store and otherwise handle data containing or depending upon dates and after
January 1, 2000.
d. Licensor shall indemnify and hold Licensee harmless from and
against any and all claims which the Licensee may suffer, sustain or incur
arising from, or based upon Licensor's gross negligence, willful misconduct or
failure to act in good faith.
11. LIMITATION ON CONSEQUENTIAL DAMAGES: DISCLAIMER OF WARRANTIES
-------------------------------------------------------------
EXCEPT AS EXPRESSLY PROVIDED HEREIN, NO EXPRESS OR IMPLIED WARRANTY IS
MADE WITH RESPECT TO THE SERVICES TO BE SUPPLIED BY LICENSEE HEREUNDER,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, AND LICENSEE DOES NOT WARRANT THE RESULTS OF ANY
SERVICES. In particular, Licensor agrees that Licensee will in no event be
responsible for any losses or damages of any and every nature (including, but
not limited to, consequential losses incurred by Licensor, by any
subcontractors, marketing agents, sales representatives, affiliates or employees
utilized by Licensor, by any Guests, or by any other party) to the extent due to
service outages or interruptions, delays, failure to provide service, or
discontinuance of service, and not caused by the fault or negligence of Licensee
and/or Licensee's agents, subcontractors, representatives, or affiliates
(including, but not limited to, losses or damages of any nature resulting from
the loss of data, inability to access the Internet, or inability to transmit or
receive information). Except for indemnified claims and except to the extent
Licensee, any of its employees, agents and/or contractors are held liable for
gross negligence or intentional misconduct, neither party, the Indemnitees, or
each of their subsidiaries shall be liable for loss of profits, or indirect,
special, incidental or consequential damages, even if such party has been
advised of the possibility of such damages. This paragraph shall survive
termination of this agreement.
12. LIENS
-----
In every instance at the Hotels, Licensee covenants and agrees to keep
the equipment and property of Licensor and the Hotels free and clear from any
and all liens for work performed or materials furnished hereunder and Licensee
agrees to indemnify the Indemnitees from and against any and all costs,
expenses, losses and all damage resulting from the filing of any such liens
against Licensor and the Hotels or the Licensed Area of Licensor and the Hotels.
As a condition to payment hereunder. Licensee shall from time to time, upon
request by Licensor or the Hotel, furnish waivers or releases of such liens or
receipts in full for all claims for such work or
11
<PAGE>
materials and an affidavit that all such claims have been fully satisfied.
13. OWNERSHIP
---------
Ownership of the Equipment and related systems providing the Service
shall at all times be and remain vested in Licensee. Any proposed use by
Licensor or by any third party of the System or of the Equipment for additional
applications shall require the prior approval of Licensee. The Equipment shall
not under any circumstances constitute, be or be deemed to be fixtures annexed
to Licensor's real property and the Equipment shall at all times be and remain
free and clear of any claims, liens, or encumbrances created by Licensor.
14. LICENSOR RIGHT TO ENTER OR GRANT ENTRY
--------------------------------------
Licensor shall have the right, without liability to Licensee, to allow a
duly authorized officer or agent of a federal, state or local governmental
agency, admittance to the Licensed Area at any time and from time to time, as
needed or requested by such agency. It is specifically understood that such
agency need not obtain a search warrant or provide a subpoena.
15. LICENSEE'S PROPERTY
-------------------
All property belonging to Licensee, its employees, agents, or invitees,
or any occupant of the Licensed Area that is in the Hotels, or the Licensed
Area, shall be there at the risk of Licensee or other person only, and Licensor
shall not be liable for damage thereto for theft or misappropriation thereof;
further, Licensee shall indemnify and hold harmless Licensor and the Hotels from
any claims, causes of action arising from theft or misappropriation of the
property belonging to the aforementioned. Nothing herein to the contrary shall
require Licensee to indemnify or hold harmless Licensor for the intentional
tortious acts of Licensor's employees or agents. The burden of proving such
intent shall be upon Licensee.
16. TERMINATION
-----------
a. This Agreement shall be subject to termination by Licensor
either at each of the (applicable) Hotels or in general as defined below upon
the occurrence of any of the following events:
(i) At the Hotels, if Licensee shall fail to pay the sums to
Licensor called for in Paragraph 4 hereof and such failure continues for five
(5) business days after written notice that the same is due;
(ii) At the Hotels, if Licensee shall violate or breach any of
the material terms, conditions or covenants hereof and shall not remedy such
violation or breach
12
<PAGE>
within ten (10) days after written notice by Licensor to Licensee of such
violation or breach.
(iii) At the Hotels, if Licensee's operation and use of the
Licensed Area shall at any time violate or fail to conform to covenants and
conditions established herein or reasonable standards and practices as may be
modified or supplemented by Licensor from time to time in writing to Licensee,
and such noncompliance is not cured within ten (10) days after written notice by
Licensor to Licensee of such noncompliance (provided that if the nature of such
noncompliance is curable but that the same cannot with due diligence be cured
within ten (10) days. Licensee shall not be deemed to be subject to termination,
if it shall within such ten (10) day period commence curing and thereafter
diligently prosecutes the same to completion;
(iv) In general, if Licensee shall make an assignment for the
benefit of creditors or file a voluntary petition in bankruptcy or be adjudged
insolvent or shall admit in writing its inability to meet its obligations as
they mature, or if a permanent receiver of all or any portion of Licensee's
property shall be appointed in any judicial proceeding, or there shall be
entered against it an order adjudicating it a bankrupt or insolvent or an order
appointing a liquidator, receiver or trustee for it or all or substantially all
of its assets or approving as properly filed against it a petition seeking
reorganization, arrangement or other proceeding under any bankruptcy or other
law for the relief or debtors, which order shall continue unstayed and in effect
for, or which proceeding shall not be terminated and Licensee released from such
proceeding within thirty (30) days, or if Licensee shall attempt to assign or
encumber this Agreement or permit any other person, firm or corporation to
conduct the business or Services provided for hereunder;
(v) At the Hotels, if any statute, ordinance, rule or
regulation hereafter promulgated by any legislative body or agency having
jurisdiction over the Licensee shall prohibit the operation of the Licensed Area
by Licensee as provided for herein, provided that Licensee shall first be given
a reasonable opportunity to modify its operation of the Licensed Area so as to
comply with any such statute, ordinance, rule, or regulation; or,
(vi) At the Hotels, in the event that: (1) The premises upon
which the Licensed Area is located should be sold; (2) Licensor should assign
its rights to the site to a third party, or (3) Licensor proposes, or is
required for any reason to structurally renovate or demolish the Hotel or a
substantial portion thereof which includes all or a portion of the Licensed
Area, then Licensor shall have the right, upon not less than one hundred eighty
(180) days prior written notice to Licensee, to terminate this Agreement. In
such event Licensor shall reimburse Licensee's unamortized installation expense
calculated at an initial expense of $185.00 per installed room (guest or
meeting), such amortizaiton shall be "straight line" method using the Initial
Term as the period of full amortization.
13
<PAGE>
(vi) In general, if during the Term or Extended Term or this
Agreement, Licensor reasonably expects to be at a competitive disadvantage
because of a commercially available and nationally available system
substantially similar to the Service that is faster, more reliable, has easier
end-user connectivity, and is less expensive than Licensee's system. If such
failure is curable by upgrading all or a portion of the Equipment, then
Licensee shall have not more than one hundred twenty days (120) to perform such
work at the Hotels and demonstrate to Licensor's reasonable satisfaction, and on
terms acceptable to Licensor, that the system is technologically equivalent and
reasonably competitive.
b. At the Hotels, this Agreement shall be subject to termination
by Licensee upon the occurrence of a violation or breach of any of the material
terms, conditions or covenants hereof by Licensor and shall not remedy such
violation or breach within thirty (30) days after written notice by Licensee of
such violation.
17. HOLDING OVER
------------
In every instance at the Hotels, if Licensee, with Licensor's consent,
leave the Equipment in the Licensed Area after expiration or termination of the
Term, or after the date in any notice given by Licensor to Licensee terminating
this License, such event shall be deemed to be a month-to-month holdover
terminable on thirty (30) days notice given at any time by either party. All
provisions of this License except those pertaining to the term of this License
shall apply to the month-to-month holdover.
In every instance at the Hotels and in general, if Licensee, without
Licensor's consent, leaves its Equipment in the Licensed Area after expiration
or termination of the term, or after the date in any notice given by Licensor to
Licensee terminating this License, Licensee shall pay to Licensor fees at double
the rate as defined in Paragraph 4 hereof, for the time Licensee thus remains in
the Licensed Area, and in addition thereto, shall pay Licensor all direct and
consequential damages sustained by reason of Licensee's retention of the
Licensed Area, including Licensor's attorney's fees.
18. SUBLICENSING AND ASSIGNMENT
---------------------------
Licensee may not sublicense the Licensed Area or assign the Agreement or
any rights and obligations hereunder without prior written consent of the
Licensor given or withheld in its sole discretion, provided, however, that if
Licensee is not in breach hereunder, Licensor shall not unreasonably withhold
its consent to an assignment to and assumption by a proposed sublicensee that
succeeds to substantially all of Licensee's business, operations,
responsibilities and liabilities (as used herein the term "substantially all"
shall include but not be limited to each and every License Agreement by and
between Licensee and Licensor and any Hilton franchised hotels contracting with
Licensee at the time of the proposed assignment or
14
<PAGE>
sublicense), and (a) is in compliance with Paragraph 24, (b) provides reasonably
satisfactory financial, technical and other professional assurances of its
ability to perform throughout the term hereof, (c) is not otherwise restricted
under Licensor's other, third party contracts at the time of proposed
assignment, and (d) executes and delivers to Licensor an assignment and
assumption agreement in Licensor's then standard form. Subject to the foregoing,
the conditions, covenants and agreements in the foregoing Agreement to be kept
and performed by the parties hereto shall bind and inure to the benefit of their
successors and assigns.
In connection with any such transfer to which Licensor may consent.
Licensee agrees to furnish Licensor with copies of all documents, and subsequent
amendments thereto, executed in connection with such transfer. Any consent of
Licensor to a subletting, assignment or transfer of control shall be deemed to
be a consent to the initial subletting, assignment or transfer of control and
shall not be deemed to be a consent to any further subletting, assignment or
transfer of control.
Further, notwithstanding any permitted subletting or assignment, the
Licensee hereunder shall at all times remain fully responsible and liable for
the payment of Fees hereunder and for compliance with all of Licensee's
obligations under the terms, provisions and covenants of this License Agreement.
19. RELOCATION OF LICENSED AREA AND OR THE EQUIPMENT
------------------------------------------------
Licensor hereby reserves the right at the Hotels on ninety (90) days
notice to require Licensee, to relocate all or a portion of the Equipment at any
time during the Term or Extended Term to a reasonably comparable location as
follows: (i) at Licensee's sole cost and expense, for the relocation of any
particular portion of Licensee's Equipment on one (1) occasion per Hotel during
the Initial Term hereof; or (ii) at Licensor's expense for any subsequent
relocation (of such previously relocated Equipment) per Hotel during the Initial
Term.
20. NATURE OF LICENSE
-----------------
The License granted hereby is a non-exclusive license for Licensee to
use the Licensed Area solely as required to perform its obligations hereunder,
revocable according to the terms hereof. In no event shall this License be
deemed or construed to run with the land or create or vest any easements or
other rights in any of Licensor's Hotels or properties. Licensee agrees that no
permanent or possessory interest shall accrue to Licensee or its licensees in
Licensor's Hotels or properties at any time or by exercise of the permission
given hereunder, and that Licensee shall not claim any such interest in any of
Licensor's Hotels or properties. THIS LICENSE DOES NOT CREATE ANY RECORDABLE
INTEREST AND SHALL NOT BE RECORDED IN ANY OFFICIAL RECORDS.
15
<PAGE>
21. NOTICES
-------
Whenever, by the terms of this Agreement, or otherwise, notice is
required or desired to be given, such notice shall be effective only if in
writing and served personally, via facsimile or sent by certified mail or
registered mail, postage prepaid as follows:
(a) If intended for Licensor, addressed to the attention of
General Manager at the Hotel address as listed in the Rider, with a copy to
Licensor's General counsel at:
Hilton Hotels Corporation
9336 Civic Center Drive
Beverly Hills, CA 90210
(310) 278-4321
or such other address as may from time to time hereafter be designated by
Licensee by like notice.
(b) If intended for Licensee, addressed to the attention of
Licensee's General Counsel at:
CAIS, Inc.
1232 22nd St., NW
Washington, D.C. 20037
Phone: (202) 463-8500
Fax: (202) 463-7190
or to such other address as may from time to time hereafter be designated by
Licensee by like notice. All notices utilizing the U.S. Mail shall be deemed
given four (4) business days after the postmark thereof, if by facsimile then it
shall be deemed given one (1) business day after transmission, if served
personally then it shall be deemed given the day served.
22. DEFAULT UNDER OTHER LICENSE
---------------------------
Intentionally omitted.
23. ACCESS TO THE SERVICES
----------------------
16
<PAGE>
Licensee will use its best efforts to insure that usage and access to
the Service is consistently in good operation and is available to the Hotel's
Guests at a minimum of 95% of the time when access or usage is attempted. If
requested by Licensor, within twenty (20) days after the end of each month.
Licensee will provide Licensor with a written report showing the total number of
Usage access connections attempted and completed during the previous month for
the purpose of insuring access availability.
24. REPRESENTATIONS AND WARRANTIES OF LICENSEE
------------------------------------------
Licensee represents and warrants that there are no agreements or
arrangements, whether written or oral, that would be breached by Licensee upon
execution of this Agreement or that would impair or prevent Licensee from
rendering the Services to Licensor during the term hereof, and Licensee further
represents, warrants, covenants and agrees that it has and will maintain
throughout the term hereof all qualifications required to perform its Services
hereunder, and that it has not made and will not make any commitment or do any
act in conflict with this Agreement. Licensee shall promptly provide Licensor
with all information reasonably requested by Licensor or its Compliance
Committee with respect to Licensee and its affiliates including their respective
officers, directors or shareholders. The information requested may include but
not necessarily be limited to financial condition, personal and family
background, litigation, indictment, criminal proceedings and the like in which
any of the aforementioned may have been involved (collectively, the "Requested
Information"), solely in order for Licensor to determine that the Requested
Information does not disclose any fact which might adversely affect, in any
manner, any gaming licenses or permits held by Licensor or its affiliates or the
current stature of Licensor or its affiliates with any gaming commission, board
or similar regulatory agency.
25. INDEPENDENT CONTRACTOR
----------------------
In connection with this Agreement each party is an independent
contractor and as such will not have any authority to bind or commit the other.
Nothing herein shall be deemed or construed to create a joint venture,
partnership or agency relationship between the parties for any purpose.
26. DRAFTING AND PREPARATION
------------------------
Each party has cooperated and participated in the drafting and
preparation of this Agreement. Therefore, if any construction is to be made of
this Agreement of any of its terms, both parties shall be construed to be
equally responsible for the drafting and preparation of same.
27. MISCELLANEOUS
-------------
17
<PAGE>
a. This Agreement is made subject to all local, state and federal
laws and regulations now or hereafter in force, and shall not be modified or
extended (other than as set forth, herein) except by an instrument duly signed
by Licensor and Licensee and approved by Licensor. Waiver of a breach of any
provisions hereof under any circumstances will not constitute a waiver of any
subsequent breach of such provision, or of a breach of any other provision of
this Agreement.
b. Licensor and Licensee represent and warrant to each other than
no broker's involved in connection with this transaction and each party agrees
to indemnify and hold the other harmless from and against the claims of any
broker (if any), made in connection with this transaction.
c. This License shall be governed by and constructed in accordance
with the laws of the state in which the specific Hotel in question is located.
d. This License shall be binding upon the parties, and their
permitted successors and assigns.
e. Licensor and Licensee agree to do any further acts and execute
such additional documents as the other may reasonably require to confirm this
License and carry out the purpose of this License.
f. During the Term, Licensee shall supply the underlying dedicated
Internet connectivity for the Service between Licensee and the Hotels. Licensee
shall be responsible for the costs associated with the installation of the
dedicated connection to the Hotels. In some, but not all instances, depending on
geographic location, topology and other factors, Licensee may provision the
required local dedicated connections to the Hotels through wireless broadband
links. Licensor reserves the right of approval of such wireless systems.
g. The Hotels acknowledge that in the event that Licensee, at any
time, reasonably believes that the System services are being utilized by a Guest
in contravention of the terms and provisions of this agreement, Licensee may, at
its sole discretion, immediately discontinue any such System services to such
Guest without liability.
h. Licensee shall provide to the Hotels and end user Guests a 24
hours per day 365 days per year help desk support manned by Internet experienced
technicians. This help desk support shall include direct access via a toll free
888 access to answer the Hotels and Guest questions and fix problems as needed.
i. Licensee will provide Licensor with an on-site account manager
based at Licensor's corporate headquarters, and hired, employed and trained by
Licensee. Licensor will
18
<PAGE>
endeavor but is not required to make reasonable office space and facilities
available for this account manager at Licensor's offices.
The dedicated account manager will perform the following functions:
1. Serve as Liaison between Licensor and Licensee.
2. Manage overall relationship.
3. Act as single point of contact for Licensor and the Hotels.
4. Promote quality control.
j. Provided that Licensee has fully and faithfully kept and
performed all of the terms, conditions, and covenants contained herein. Licensor
agrees that the Licensee shall be the "preferred" supplier of the Service at the
Hotels and shall receive preferred selection of, and positioning within, the
individual Hotels within the Hilton Hotels Corporation System.
k. Either party's delay in, or failure of, performance under this
Agreement shall not constitute a default where such delay or failure is caused
by elements of nature, fire or other catastrophe, fluctuations in third party
telecommunications equipment and lines and power supplies, organized work
stoppage, or acts of government or agencies thereof outside such party's
reasonable control. In any such event, each party will be excused from any
further performance or observance of the obligations so affected only for as
long as such circumstances prevail and each party continues to use commercially
reasonable efforts to recommence performance or observance as soon as
practicable.
28. SEVERABILITY
------------
It is agreed that if any provision of this License shall be determined
to be void by any court of competent jurisdiction, then such determination shall
not affect any other provision of this License and all such other provisions
shall remain in full force and effect; and it is the intention of the parties
hereto that if any provision of the license is capable of two constructions, one
of which would render the provison void and the other of which would render the
provision valid, then the provision shall have the meaning which renders it
valid.
29. ENTIRE AGREEMENT
----------------
This Agreement including all exhibits, addenda, schedules and riders
contain the full and complete understanding of the parties concerning the
subjects contained herein and supersedes any and all prior written or oral
agreements between the parties and cannot be amended except in writing signed
by both parties.
19
<PAGE>
30. DISPUTE RESOLUTION.
If there is any dispute, claim or controversy, other than one involving
Licensor's right to seek equitable relief, between the parties arising out of or
relating to this Agreement (a "Disputed Matter"), the parties shall attempt to
amicably resolve such Disputed Matter in good faith. If the initial efforts to
resolve such Disputed Matter are not successful, the parties shall submit the
Disputed Matter jointly to the respective senior officers of Licensor and
Licensee. If such senior officers cannot reach a mutually agreeable resolution
of the Disputed Matter within ten (10) business days after reference of the
matter to them, either party may elect to have the Disputed Matter settled in
accordance with the arbitration procedures detailed in Exhibit B attached
hereto. Without limiting the generality of the foregoing, the parties expressly
agree that any and all disagreements regarding whether an issue is a Disputed
Matter under this Section shall be settled in accordance with the arbitration
procedures defined in Exhibit B.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of date first above written.
Hilton Hotels Corporation, CAIS, Inc.,
a Delaware corporation a Virginia corporation
By: By: /s/ Laura Newman
---------------------------- --------------------------
[Signature Illegible] Laura A. Newman
---------------------------- --------------------------
Its: Senior Vice President Its: Vice President
20
<PAGE>
EXHIBIT "A" TO MASTER LICENSE AGREEMENT DATED DECEMBER 23, BY AND BETWEEN HILTON
HOTELS CORPORATION, A DELAWARE CORPORATION, LICENSOR, AND CAIS, INC., A VIRGINIA
CORPORATION, LICENSEE.
LIST OF EQUIPMENT TO BE INSTALLED BY LICENSEE
---------------------------------------------
1. CSU/DSU (Channel Service Unit/Digital Service Unit): This device
---------------------------------------------------
converts the T1 digital signal into a useable data stream that the
router can understand.
2. Router: This is an internetworking device that is responsible for
------
connecting two networks together (i.e. the Hotel network to the Internet
Network).
3. Server: This acts as a gateway between the Internet and the hotel. As
------
a gateway, the server allows for controlling traffic and integration
into the hotels property management system for billing. The server also
provides the necessary services to the end client for seamless Internet
connectivity.
4. Switch/Hub: The switch/hub is responsible for aggregating multiple
----------
Ethernet connections into or vise-versa.
5. OverVoice Wiring Block*: This is a wire-terminating block that
-----------------------
accommodates the Overvoice Control Unit and the telephone wires.
6. OverVoice Control Unit*: This connects to the Overvoice Wiring Block
-----------------------
and is responsible for combining and separating the voice and Ethernet
signals to and from the rooms.
7. OverVoice wall jack(s)*: This houses the patented circuitry that
-----------------------
splits the telephone and Ethernet signals and directs them to 2 jacks, 1
for the telephone, and 1 for the computer.
*Denotes patented technologies specific to the OverVoice system.
A-1
<PAGE>
Exhibit B to Master License Agreement (the "Agreement") dated December 23, 1998,
by and between Hilton Hotels Corporation, a Delaware Corporation ("HHC"), and
CAIS, Inc., a Virginia corporation ("Licensee").
Arbitration Provisions
1. Rules: Jurisdiction. Any Disputed Matter (as defined in the
-------------------
agreement to which this exhibit is attached) shall be settled by final and
binding arbitration in the City of Los Angeles, California, and, except as
herein specifically stated, in accordance with the commercial arbitration rules
of the American Arbitration Association ("AAA Rules") then in effect, subject to
the provisions of the United States Arbitration Act, 9 U.S.C. & 1 et seq.
-------
("Title 9"). To the extent the AAA Rules conflict with, or are supplemented by,
the provisions of Title 9, the provisions of Title 9 shall govern and be
applicable. However, in all events these arbitration provisions shall govern
over any conflicting rules that may now or hereafter be contained in either the
AAA Rules or Title 9. Any judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction of the subject matter thereof.
The arbitrators shall have the authority to grant any equitable and legal
remedies that would be available in any judicial proceeding instituted to
resolve a disputed matter. The parties hereby submit to the in personam
-- --------
jurisdiction of the Superior Court of Los Angeles County and the Federal
District Court for the Central District of California for purposes of confirming
any such award and entering judgment thereon.
2. Compensation of Arbitrators. Any such arbitration shall be
---------------------------
conducted before a panel of three arbitrators who shall be compensated for their
services at a rate to be determined by the parties or by the American
Arbitration Association but based upon normal and reasonable hourly or daily
consulting rates for the neutral arbitrator in the event the parties are not
able to agree upon his or her rate of compensation.
3. Selection of Arbitrators. Within five (5) business days of
------------------------
notice by a party seeking arbitration under this provision, the party requesting
arbitration shall appoint one person as an arbitrator and within fifteen (15)
business days thereafter the other party shall appoint the second arbitrator.
Except with the other party's prior, express and written consent, no arbitrator
may be appointed who is employed by, or who is engaged by, or who has been
engaged within one (1) year by, any entity that is a major competitor of either
party. Within twenty (20) business days after the appointment of the second
arbitrator, the two arbitrators so chosen shall mutually agree upon the
selection of the third impartial and neutral arbitrator. The majority decision
of the arbitrators will be final and conclusive upon the parties hereto.
4. Payment of Costs. Each party hereby agrees to pay one-half (1/2)
----------------
of the compensation to be paid to the arbitrators in any such arbitration and
one-half (1/2) of the costs of transcripts and other expenses of the arbitration
proceedings; provided, however, that the prevailing party in any arbitration
shall be entitled to an award of reasonable attorneys' fees and costs,
arbitrators' fees and costs, fees and costs of expert witnesses and all other
costs of
B-1
<PAGE>
arbitration to be paid by the losing party.
5. Evidence and Discovery. The parties shall be entitled to conduct
----------------------
discovery proceedings to the fullest extent permissible under California law and
the Federal Rules of Evidence.
6. Burden of Proof. For any claim submitted to arbitration, the burden
---------------
of proof shall be as it would be if the claim were litigated in a judicial
proceeding. All testimony of witnesses shall be taken under oath and shall be
subject to the Federal Rules of Evidence.
7. Judgment. Upon the conclusion of any arbitration proceedings,
--------
hereunder, the arbitrators shall render findings of fact and conclusions of law
and a written opinion setting forth the basis and reasons for any decision
reached by them and shall deliver such documents to each party to the Agreement
along with a signed copy of the award.
8. Terms of Arbitration. The arbitrators chosen in accordance with these
--------------------
provisions shall not have the power to alter, amend or otherwise affect the
terms of these arbitration provisions or the provisions of the Agreement.
9. Exclusive Remedy. Except as specifically provided in this exhibit or
----------------
in the Agreement, arbitration shall be the sole and exclusive remedy of the
parties for any disputed matter arising out of such agreement.
10. Arbitration Confidential. Neither party will disclose the existence
------------------------
of any arbitration proceedings hereunder, nor the outcome thereof, except; (i)
insofar as such disclosure is reasonably necessary to carry out and make
effective the terms of this Agreement, including without limitation, pleadings
or other documents filed seeking entry of judgment upon an award of the
arbitrators; (ii) insofar as a party hereto is required by law to respond to any
demand for information from any court, governmental entity, or governmental
agency, or as may be required by federal or state securities laws; (iii) insofar
as disclosure is necessary to be made to a party's independent accountants for
tax or audit purposes; (iv) insofar as disclosure is necessary to be made to a
party's attorneys for purposes of rendering advice or services relating to this
Agreement; and (v) insofar as the parties may mutually agree in writing.
B-2
<PAGE>
Schedule 1 to Master License Agreement (the "Agreement") dated December 23,
1998, by and between Hilton Hotels Corporation, a Delaware corporation ("HHC"),
and CAIS, Inc., a Virginia corporation ("Licensee").
List of Hotels Corporate Owned or Managed
-----------------------------------------
Legal Name City State Country Total Rms
---------- ---- ----- ------- ---------
More than 1,000 Rooms
Hilton Hawaiin Village Honolulu HI US 2545
Hilton New York & Towers New York NY US 2040
Hilton San Francisco & Towers San Francisco CA US 1896
Palmer House Hilton Chicago IL US 1639
Hilton New Orleans Riverside New Orleans LA US 1600
Hilton Anaheim & Towers Anaheim CA US 1572
Hilton Chicago & Towers Chicago IL US 1544
The Waldorf=Astoria New York NY US 1330
Hilton Waikoloa Village Waikoloa HI US 1240
Hilton Los Angeles Airport Los Angeles CA US 1236
Hilton Atlanta & Towers Atlanta GA US 1222
Fontainebleau Hilton Resort & Towers Miami Beach FL US 1206
Hilton Washington & Towers Washington DC US 1118
500 - 999 Rooms
Hilton Chicago O'Hare Airport Chicago IL US 853
Hilton Minneapolis & Tower Minneapolis MN US 821
Hilton in the WALT DISNEY WORLD RESORT Lake Buena Vista FL US 814
Hilton Pittsburgh & Towers Pittsburgh PA US 713
Pointe Hilton South Mountain Resort Phoenix AZ US 638
Hilton Anchorage Anchorage AK US 591
Pointe Hilton Tapatio Cliffs Resorts Phoenix AZ US 585
Hilton Beverly Hills Beverly Hills CA US 581
Pointe Hilton Squaw Peak Resort Phoenix AZ US 563
Millenium Hilton Next to the World Trade Center New York NY US 561
Capital Hilton Washington DC US 544
Hilton Atlanta Airport & Towers Atlanta GA US 503
Hilton Miami Airport & Towers Miami FL US 500
300 - 499 Rooms
Hilton Burbank Airport & Convention Center Burbank CA US 486
Hilton Turtle Bay Resort Kahuku-Oahu HI US 485
Hilton Palacio del Rio San Antonio TX US 481
Hilton McLean Tysons Corner McLean VA US 458
Hilton Portland Portland OR US 455
Hilton Rye Town Rye Breck NY US 437
Hilton Charlotte & Towers Charlotte NC US 407
Hilton East Brunswick & Towers East Brunswick NJ US 405
Hilton DFW Lakes Executive Conference Center Grapevine TX US 385
Hilton Long Beach Long Beach CA US 366
Hilton Newark Airport Elizabeth NJ US 365
S-1
<PAGE>
Legal Name City State Country Total Rms
---------- ---- ----- ------- ---------
Hilton Oakland Airport Oakland CA US 363
Hilton San Diego Resort San Diego CA US 357
Ali'l Tower at the Hilton Hawaiian Village Honolulu, Oahu HI US 348
Hilton New Orleans Airport Kenner LA US 317
Hilton Short Hills Short Hills NJ US 301
Less than 299 Rooms
Hilton Pasadena Pasadena CA US 291
Hilton Tarrytown Tarrytown NY US 246
Hilton Suites Anaheim/Orange Orange CA US 230
Hilton Suites Phoenix Phoenix AZ US 226
Hilton Suites Auburn Hills Auburn Hills MI US 224
Hilton Suites Oakbrook Terrace Oakbrook Terrace IL US 212
Hilton Suites Brentwood Brentwood TN US 203
The Waldorf Towers New York NY US 198
Hilton Inn Southfield Southfield MI US 195
Hilton Seattle Airport Seattle WA US 178
The Fontainbleau Towers Miami Beach FL US
List of Hotels Franchised
-------------------------
More than 1,000 Rooms None
500 - 999 Rooms
Hilton Sandestin Beach & Golf Resort Destin FL US 598
Hilton Washington Dulles Airport Herndon VA US 598
Hilton Parsippany Parsippany NJ US 510
300 - 499 Rooms
Hilton Milwaukee City Center Milwaukee WI US 478
Hilton Universal City & Towers Universal City CA US 469
Hilton Baltimore & Towers Baltimore MD US 439
Hilton Clearwater Beach Resort Clearwater FL US 426
Hilton Guadalajara Guadalajara MX 422
Hilton Arlington Park Arlington Heights IL US 420
Hilton Cherry Hill Cherry Hill NJ US 408
Hilton Montreal Bonaventure Montreal CA 395
Hilton Fort Lauderdale Airport Dania Beach FL US 388
Hilton Hartford Hartford CT US 388
Hilton Crystal City at National Airport Arlington/Crystal VA US 386
Hilton San Antonio Airport & Conference Center San Antonio TX US 386
Hilton Boston Back Bay Boston MA US 385
Hilton Inn Sunnyvale Sunnyvale CA US 372
Hilton Torrance/South Bay Torrance CA US 371
Hilton Springfield Springfield IL US 367
Hilton Salt Lake City Salt Lake City UT US 362
Hilton San Jose & Towers San Jose CA US 354
Hilton San Diego Mission Valley San Diego CA US 350
Hilton Kansas City Airport Kansas City MO US 347
Hilton Harrisburg & Towers Harrisburg PA US 341
Hilton Valley Forge King of Prussia PA US 340
Hilton North Raleigh Raleigh NC US 338
Hilton Woodcliff Lake Woodcliff Lake NJ US 336
S-2
<PAGE>
Hilton St. Petersburg St. Petersburg FL US 333
Hilton Philadelphia Airport Philadelphia PA US 331
Hilton Sacramento Arden West Sacramento CA US 331
Hilton Concord Concord CA US 330
Hilton JFK Airport Jamaica NY US 330
Hilton Lafayette & Towers Lafayette LA US 327
Hilton Oceanfront Resort Hilton Head Island Hilton Head SC US 323
Hilton Orlando Altamonte Springs Altamonte FL US 322
The Seelbach Hilton Louisville Louisville KY US 321
Hilton Woodland Hills & Towers Woodland Hills CA US 318
Hilton Knoxville Knoxville TN US 317
Hilton Newark/Fremont Newark CA US 315
Hilton Dallas Parkway Dallas TX US 310
Hilton Arlington Arlington TX US 309
Hilton Lisle/Naperville Lisle IL US 309
Hilton Ontario Airport Ontario CA US 309
Hilton Denver Tech South Englewood CO US 305
Hilton Houston Hobby Airport Houston TX US 305
Hilton College Station & Conference Center College Station TX US 303
Windsor Hilton Windsor ON CA 303
Hilton Huntington Melville NY US 302
Hilton Gaithersburg Gaithersburg MD US 301
Hilton Wichita Airport Executive Conference Center Wichita KS US 301
Hilton Baton Rouge Baton Rouge LA US 300
Hilton Minneapolis/St. Paul Airport Bloomington MN US 300
Less than 299 Rooms
Hilton Fort Lauderdale/Sunrise Sunrise FL US 297
Hilton Cocoa Beach Oceanfront Cocoa Beach FL US 296
Hilton Charleston North North Charleston SC US 296
Meadowlands Hilton Secaucus NJ US 296
Hilton Houston Westchase & Towers Houston TX US 294
Hilton Marco Island Beach Resort Marco Island FL US 294
Hilton Pleasanton at The Club Pleasanton CA US 294
Hilton Tulsa Southern Hills Tulsa OK US 294
Hilton Houston Southwest Houston TX US 292
Hilton Jacksonville & Towers Jacksonville FL US 292
Hilton Waterfront Beach Resort Huntington Beach CA US 290
Hilton Irvine/Orange County Airport Irvine CA US 289
Hilton Salt Lake City Airport Salt Lake City UT US 287
Hilton Beaumont Beaumont TX US 284
Hilton Greensboro Greensboro NC US 281
Hilton Jackson & Conference Center Jackson MS US 278
Hilton Huntsville Huntsville AL US 277
Hilton Atlanta Northeast Norcross GA US 272
Hilton Eugene & Conference Center Eugene OR US 272
Hilton El Paso Airport El Paso TX US 271
Hilton Wilmington Christiana Newark DE US 266
Hilton Albuquerque Albuquerque NM US 264
Hilton East Memphis Memphis TN US 254
S-3
<PAGE>
Hilton St. Louis Frontenac St. Louis MO US 264
Hilton Inn Little Rock Little Rock AR US 263
Hilton Mesa Pavilion Mesa AZ US 263
Hilton Palm Springs Resort Palm Springs CA US 260
Hilton Greenville & Towers Greenville SC US 256
Hilton Phoenix Airport Phoenix AZ US 255
Hilton Newark Gateway Newark NJ US 253
Hilton San Bernardino San Bernardino CA US 251
Hilton Fort Wayne Convention Center Fort Wayne IN US 250
Hilton Scottsdale Resort & Villas Scottsdale AZ US 250
Hilton Dedham Place Dedham MA US 249
Hilton Midland & Towers Midland TX US 249
Hilton Norfolk Airport Norfolk VA US 249
Hilton Palm Beach Airport West Palm FL US 247
Hilton Savannah DeSoto Savannah GA US 246
Hilton Sonoma County/Santa Rosa Santa Rosa CA US 246
Hilton San Diego/Del Mar Del Mar CA US 245
Hilton Springfield Springfield VA US 245
Hilton Northbrook Northbrook IL US 244
Hilton Charlotte University Place Charlotte NC US 243
Hilton Houston Nassau Bay & Marina Houston TX US 243
Hilton Danbury & Towers Danbury CT US 242
Hilton Novi Novi MI US 239
Hilton Tampa Airport Westshore Tampa FL US 238
Hilton Melbourne Airport Melbourne FL US 237
Hilton Seattle Seattle WA US 237
Hilton Fort Lee at the George Washington Bridge Fort Lee NJ US 236
Hilton Knoxville Airport Alcoa TN US 236
Hilton Fayetteville Fayetteville AR US 235
Hilton Tucson East Tucson AZ US 233
Hilton Grand Rapids Airport Grand Rapids MI US 226
Hilton Port of Los Angeles/San Pedro San Pedro CA US 226
Hilton Allentown Allentown PA US 224
Hilton Carson Civic Plaza Carson CA US 224
Hilton Atlanta Northwest Atlanta GA US 222
Hilton Deerfield Beach/Boca Raton Deerfield Beach FL US 221
Hilton Inn North Little Rock Riverfront North Little AR US 220
Hilton St. Louis Airport St. Louis MO US 220
Hilton Oklahoma City Northwest Oklahoma City OK US 218
Hilton Lake Lanier Islands Lake Lanier GA US 216
Hilton Daytona Beach Oceanfront Resort Daytona Beach FL US 214
Hilton Toledo Toledo OH US 213
Hilton Arlington & Towers Arlington VA US 209
Hilton Greater Cincinnati Airport Florence KY US 206
Hilton Monterey Monterey CA US 204
Hilton Akron/Fairlawn Akron OH US 203
Hilton Las Cruces Las Cruces NM US 203
Hilton Whittier Whittier CA US 202
Hilton Hot Springs Convention Center Hot Springs AR US 201
S-4
<PAGE>
Hilton Waco Waco TX US 199
Hilton Southbury Southbury CT US 198
Hilton Woodbridge Iselin NJ US 198
Hilton Ocala Ocala FL US 197
Hilton Durham Durham NC US 194
Hilton Washington Embassy Row Washington DC US 193
Hilton Sioux City Sioux City IA US 193
Hilton Cleveland South Cleveland OH US 191
Hilton Wilmington North Claymont DE US 190
Hilton Santa Maria Santa Maria CA US 190
Hilton Austin North & Towers Austin TX US 189
Hilton Northfield Troy MI US 186
Hilton Mystic Mystic CT US 184
Hilton Houston Plaza Houston TX US 181
Hilton Bellevue Bellevue WA US 180
Hilton Lake Placid Resort Lake Placid NY US 179
Hilton Oshkosh & Convention Center Oshkosh WI US 179
Hilton Charlotte Executive Park Charlotte NC US 178
Hilton Key West Resort & Marina Key West FL US 178
Hilton Wilmington Riverside Wilmington NC US 178
Hilton Oak Lawn Oak Lawn IL US 178
Interstone Partners I, LLP Columbus GA US 177
Hilton Minneapolis North Brooklyn MN US 176
Hilton Suites Lexington Green Lexington KY US 174
Hilton Akron Akron OH US 173
Hilton Pikesville Baltimore MD US 171
Hilton Canton Canton OH US 170
Hilton Lynchburg Lynchburg VA US 167
Houston West Hilton Inn Houston TX US 165
Hilton Milwaukee River Milwaukee WI US 163
Oxnard Hilton Inn Oxnard CA US 160
Hilton Richmond Airport Sandston VA US 160
Hilton Santa Fe Santa Fe NM US 157
Hilton Columbia Columbia MD US 152
Hilton Suites Detroit Metro Airport Romulus MI US 151
Hilton Pearl River Pearl River NY US 150
Hilton Galveston Island Resort Galveston TX US 149
McAllen Airport Hilton Inn McAllen TX US 149
Hilton Greenville Greenville NC US 141
Hilton Palm Beach Oceanfront Resort Palm Beach FL US 134
Hilton Charleston Harbor Resort Mount Pleasant SC US 131
Hilton Mexico City Airport Mexico City MX 129
Hilton Tampa Bay/
North Redington Beach Resort North FL US 125
Hilton Virginia Beach Oceanfront Virginia Beach VA US 124
Hilton Melbourne Beach Oceanfront Indialantic FL US 113
Hilton Longboat Key Beach Resort Longboat Key FL US 102
Hilton University of Houston Houston TX US 86
Sunset Key Guest Cottages at
Hilton Key West Resort Key West FL US 37
S-5
<PAGE>
OPTION ADDENDUM
Option Addendum to Master License Agreement (the "Agreement") dated December 23,
1998, by and between Hilton Hotels Corporation, a Delaware corporation ("HHC"),
and CAIS, Inc., a Virginia corporation ("Licensee").
HHC and Licensee agree that HHC shall have the option (the "Five-Year Option")
to modify certain terms and conditions of the Agreement, as specifically shown
below. The Five-Year Term Option may be exercisable by Hilton any time during
the First Year of the Agreement and shall be exercised by written notice to
Licensee as defined in the Agreement.
1. Paragraph 1c of the Agreement shall be modified by deleting it in its
entirety and substituting the following:
a. At each of the (participating) Hotels, Licensee shall install the
Service in all Meeting Rooms and in all Guest Rooms.
2. Paragraph 3a of the Agreement shall be modified by deleting it in its
entirety and substituting the following:
b. For each of the (participating) Hotels the Term shall be five (5)
years from the date Option was exercised. Notwithstanding the foregoing,
the Terms shall expire no later than December 31, 2005.
3. Paragraph 3b of the Agreement shall be modified by deleting it in its
entirety and substituting the following:
c. Hilton Hotels Corporation must specifically and individually approve
the extension of the December 31, 2005 date as defined above in
subparagraph 3a in the event Licensee and individual Hotels are planning
to execute the Rider(s) after December 31, 1999.
4. Paragraph 3c of the Agreement shall be modified by deleting it in its
entirety.
5. Paragraph 2 of the Rider to the Agreement shall be modified by deleting
references to "Initial Term" and "Option".
/s/ [Initials Illegible] /s/ [Initials Illegible]
------------------------ ------------------------
Initials Initials
0D-1
<PAGE>
MARKETING/ADMINISTRATION FUND AND INCENTIVE AGREEMENT
-----------------------------------------------------
THIS MARKETING/ADMINISTRATION FUND AND INCENTIVE AGREEMENT dated for reference
purposes only, December 23, 1998, by and between Hilton Hotels Corporation, a
Delaware corporation (herein after referred to as "HHC"), and CAIS, Inc., a
Virginia corporation ("CAIS").
WITNESSETH:
WHEREAS, CAIS and HHC have entered into that certain Master License Agreement
dated 199_ (the "Master Agreement"); and
WHEREAS, the parties desire to promote and advertise the services described in
Master Agreement (the "Services") to HHC's customers; and,
WHEREAS, CAIS desires to contribute funds for such promotions and advertising;
and
NOW, THEREFORE, the parties acknowledge and agree as follows:
1. Corporate Incentive Payments. An Incentive Payment shall be paid
----------------------------
to HHC based on the number of corporate owned or managed Hotels
that participate in the Services during the term of the Agreement
as provided below:
a. For each corporate owned or managed Hotel Property having 1,000
or greater Guest Rooms (a current example of which is listed on
Schedule 1), HHC shall be eligible for the Incentive Plan
Payments set forth below in years 3-5. The parties agree that
HHC shall from time to time update Schedule 1 to include all
HHC corporate owned or managed hotel properties. HHC will
notify CAIS if there are changes to Schedule 1.
b. For corporate owned or managed Hotel Properties having fewer
than 1,000 Guest Rooms, HHC shall be eligible for the Incentive
Plan Payments in years 4-5. The parties agree that HHC shall
from time to time update Schedule 1 to include all HHC
corporate owned or managed hotel properties.
c. The Incentive Payment percentage within each size category
shall be multiplied by the aggregate Usage Fees (as defined in
paragraph 4 of Master Agreement) for the participating
corporate owned or managed hotels in that size category, and
the resulting total shall be paid directly to HHC at its
offices in Beverly Hills on the fifteenth (15th) day of each
month applicable to the month immediately preceding.
d. For purposes of the Payment Matrix below, the participation
percentage
1
<PAGE>
shall be based on (i) corporate owned or managed Hotels in a
particular Room Size category that are operating the Service
during the month for which the incentive payment would apply, as a
percentage of (ii) all corporate owned or managed Hotels in that
Room Size Category.
Corporate Incentive Payment Matrix
----------------------------------
Corporate Owned or Managed Hotel Properties Operating the
Service as Percentage of all Schedule 1 Corporate Owned or
Managed Hotel Properties in Size Category
*% *% *%
-------------------------------------------
Incentive
---------
Room Size
---------
1,000 and greater *% *% *%
500 - 1,000 *% *% *%
300 - 500 *% *% *%
299 and fewer *% *% *%
2. Marketing and Administration Fund. In a manner approved by HHC,
---------------------------------
CAIS shall set up an account (The "Account") to pay advertising
and administration costs and fees incurred by HHC and third
parties as mutually approved HHC and CAIS. CAIS shall provide
funds for the Account with monthly contributions as follows:
a. For any 1,000 and greater Room Size Hotels (e.g. owned, managed
or franchised), (i) during the first 2 Years of the term
following installation and deployment of Service at such Hotel,
$* per month for each wired Guest Room and Meeting Room (up to
a maximum of 200 rooms per hotel), (ii) during the subsequent 3
Years of the term, $* per month for each wired Guest Room and
Meeting Room (up to a maximum or 200 rooms per hotel);
b. For all other participating Hotels, during the first 2 Years of
the term following installation and deployment of the Service
at such Hotel Property, $* per month for each wired Guest Room
and Meeting Room (up to a maximum of 200 rooms per hotel).
---------------------
* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
2
<PAGE>
INTENTIONALLY LEFT BLANK
<PAGE>
regulations now or hereafter in force, and shall not be modified or extended
(other than as set forth herein) except by an instrument duly signed by HHC and
CAIS and approved by HHC. Waiver of a breach of any provisions hereof under any
circumstances will not constitute a waiver of any subsequent breach of such
provision or of a breach of any other provision of this Agreement.
b. HHC and CAIS represent and warrant to each other that no
broker is involved in connection with this transaction and each party agrees to
indemnify and hold the other harmless from and against the claims of any broker
(if any), made in connection with this transaction.
c. This Agreement shall be governed by and constructed in
accordance with the laws of the state of California.
d. This Agreement shall be binding upon the parties, and their
permitted successors and assigns.
e. HHC and CAIS agree to do any further acts and execute such
additional documents as the other may reasonably require to confirm this
Agreement and carry out the purpose of this Agreement.
5. SEVERABILITY
------------
It is agreed that if any provision of this Agreement shall be determined
to be void by any court of competent jurisdiction, then such determination shall
not affect any other provision of this Agreement and all such other provisions
shall remain in full force and effect, and it is the intention of the parties
hereto that if any provision of the license is capable of two constructions, one
of which would render the provision void and the other of which would render the
provision valid, then the provision shall have the meaning which renders it
valid.
6. DISPUTE RESOLUTION
------------------
A. If there is any dispute, claim or controversy, other than one
involving HHC's right to seek equitable relief, between the parties arising out
of or relating to this Agreement (a "Disputed Matter"), the parties shall
attempt to amicably resolve such Disputed Matter in good faith. If the initial
efforts to resolve such Disputed Matter are not successful, the parties shall
submit the Disputed Matter jointly to the respective senior officers of HHC and
CAIS. If such senior officers cannot reach a mutually agreeable resolution of
the Disputed Matter within ten (10) business days after reference of the matter
to them, either party may elect to have the Disputed Matter settled in
accordance with the arbitration procedures detailed in Paragraph B attached
hereto. Without limiting the generality of the foregoing, the parties expressly
agree that any and all disagreements regarding whether an issue is a Disputed
Matter under this Section shall
4
<PAGE>
be settled in accordance with the arbitration procedures defined in Paragraph B.
B. Arbitration Procedures
----------------------
(i) Rules Jurisdiction. Any Disputed Matter (as defined in the
------------------
agreement in which this exhibit is attached) shall be settled by final and
binding arbitration in the City of Los Angeles, California, and, except as
herein specifically stated, in accordance with the commercial arbitration rules
of the American Arbitration Association ("AAA Rules") then in effect, subject to
the provisions of the United States Arbitration Act 9 U.S.C. and 1 et seq.
-------
("Title 9"). To the extent the AAA Rules conflict with, or are supplemented by,
the provisions of Title 9, the provisions of Title 9 shall govern over any
conflicting rules that may now or hereafter be contained in either the AAA Rules
or Title 9. Any judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction of the subject matter thereof. The
arbitrators shall have the authority to grant any equitable and legal remedies
that would be available in any judicial proceeding instituted to resolve a
disputed matter. The parties hereby submit to the in personam jurisdiction of
-- --------
the Superior Court of Los Angeles County and the Federal District Court for the
Central District of California for purposes of confirming any such award and
entering judgment thereon.
(ii) Compensation of Arbitrators. Any such arbitration shall be
---------------------------
conducted before a panel of three arbitrators who shall be compensated for their
services at a rate to be determined by the parties or by the American
Arbitration Association but based upon normal and reasonable hourly or daily
consulting rates for the neutral arbitrator in the event the parties are not
able to agree upon his or her rate of compensation.
(iii) Selection of Arbitrators. Within five (5) business days of notice
------------------------
by a party seeking arbitration under this provision, the party requesting
arbitration shall appoint one person as an arbitrator and within fifteen (15)
business days thereafter the other party shall appoint the second arbitrator.
Except with the other party's prior, express and written consent, no arbitrator
may be appointed who is employed by, or who is engaged by, or who has been
engaged within one (1) year by, any entity that is a major competitor of either
party. Within twenty (20) business days after the appointment of the second
arbitrator, the two arbitrators so chosen shall mutually agree upon the
selection of the third impartial and neutral arbitrator. The majority decision
of the arbitrators will be final and conclusive upon the parties hereto.
(iv) Payment of Costs. Each party hereby agrees to pay one-half (1/2)
----------------
of the compensation to be paid to the arbitrators in any such arbitration and
one-half (1/2) of the costs of transcripts and other expenses of the arbitration
proceedings; provided, however, that the prevailing party in any arbitration
shall be entitled to an award of reasonable attorneys' fees and costs,
arbitrators' fees and costs, fees and costs of expert witnesses and all other
costs of arbitration to be paid by the losing party.
5
<PAGE>
(v) Evidence and Discovery. The parties shall be entitled to conduct
----------------------
discovery proceedings to the fullest extent permissible under California law and
the Federal Rules of Evidence.
(vi) Burden of Proof. For any claim submitted to arbitration, the
---------------
burden of proof shall be as it would be if the claim were litigated in a
judicial proceeding. All testimony of witnesses shall be taken under oath and
shall be subject to the Federal Rules of Evidence.
(vii) Judgement. Upon the conclusion of any arbitration proceedings,
---------
hereunder, the arbitrators shall render findings of fact and conclusions of law
and a written opinion setting forth the basis and reasons for any decision
reached by them and shall deliver such documents to each party to the Agreement
along with a signed copy of the award.
(viii) Terms of Arbitration. The arbitrators chosen in accordance with
--------------------
these provisions shall not have the power to alter, amend or otherwise affect
the terms of these arbitration provisions or the provisions of the Agreement.
(ix) Exclusive Remedy. Except as specifically provided in this
----------------
Agreement, arbitration shall be the sole and exclusive remedy of the parties for
any disputed matter arising out of such agreement.
(x) Arbitration Confidential. Neither party will disclose the
------------------------
existence of any arbitration proceedings hereunder, nor the
outcome thereof, except: (i) insofar as such disclosure is
reasonably necessary to carry out and make effective the terms of
this Agreement, including without limitation, pleadings or other
documents filed seeking entry of judgement upon an award of the
arbitrators; (ii) insofar as a party hereto is required by law to
respond to any demand for information from any court,
governmental entity, or governmental agency, or as may be
required by federal or state securities laws; (iii) insofar as
disclosure is necessary to be made to a party's independent
accountants for tax or audit purposes; (iv) insofar as disclosure
is necessary to be made to a party's attorneys for purposes of
rendering advice or services relating to this Agreement; and (v)
insofar as the parties may mutually agree in writing.
6
<PAGE>
7. TERM
----
This Agreement shall commence and terminate on the same dates the Master
Agreement commences and terminates.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of date first above written.
Hilton Hotels Corporation, CAIS, Inc.,
a Delaware corporation a Virginia corporation
By: /s/ [SIGNATURE ILLEGIBLE] By: /s/ Laura A. Newman
--------------------------- ---------------------------
Laura A. Newman
--------------------------- ---------------------------
Its: Senior Vice President Its: Vice President
---------------------------
7
<PAGE>
Schedule 1 to Marketing/Administration Fund and Incentive (the "Agreement")
dated December 23, 1998, by and between Hilton Hotels Corporation. a Delaware
corporation ("HHC), and CAIS, Inc., a Virginia corporation ("CAIS).
List of Hotels Corporate Owned or Managed
-----------------------------------------
Legal Name City State Country Total Rooms
---------- ---- ----- ------- -----------
MORE THAN 1000 ROOMS
Hilton Hawaiian Village Honolulu HI US 2545
Hilton New York & Towers New York NY US 2040
Hilton San Francisco & Towers San Francisco CA US 1896
Palmer House Hilton Chicago IL US 1639
Hilton New Orleans Riverside New Orleans LA US 1600
Hilton Anaheim & Towers Anaheim CA US 1572
Hilton Chicago & Towers Chicago IL US 1544
The Waldorf-Astoria New York NY US 1380
Hilton Waikoloa Village Waikoloa HI US 1240
Hilton Los Angeles Airport Los Angeles CA US 1236
Hilton Atlanta & Towers Atlanta GA US 1222
Fontainebleau Hilton Resort & Towers Miami Beach FL US 1206
Hilton Washington & Towers Washington DC US 1118
500 - 999 ROOMS
Hilton Chicago O'Hara Airport Chicago IL US 853
Hilton Minneapolis & Towers Minneapolis MN US 821
Hilton in the WALT DISNEY WORLD Resort Lake Buena Vista FL US 814
Hilton Pittsburgh & Towers Pittsburgh PA US 713
Pointe Hilton South Mountain Resort Phoenix AZ US 638
Hilton Anchorage Anchorage AK US 591
Pointe Hilton Tapatio Cliffs Resort Phoenix AZ US 585
Hilton Beverly Hills Beverly Hills CA US 581
Pointe Hilton Squaw Peak Resort Phoenix AZ US 563
Millenium Hilton Next to the World Trade Center New York NY US 561
Capital Hilton Washington DC US 544
Hilton Atlanta Airport & Towers Atlanta GA US 503
Hilton Miami Airport & Towers Miami FL US 500
300 - 499 ROOMS
Hilton Burbank Airport & Convention Center Burbank CA US 486
Hilton Turtle Bay Resort Kahuku-Oahu HI US 485
Hilton Palacio del Rio San Antonio TX US 481
Hilton McLean Tysons Corner McLean VA US 458
Hilton Portland Portland OR US 455
Hilton Rye Town Rye Brook NY US 437
Hilton Charlotte & Towers Charlotte NC US 407
Hilton East Brunswick & Towers East Burnswick NJ US 405
Hilton DFW Lakes Executive Conference Center Grapevine TX US 395
Hilton Long Beach Long Beach CA US 393
Hilton Newark Airport Elizabeth NJ US 375
Hilton Oakland Airport Oakland CA US 363
Hilton San Diego Resort San Diego CA US 357
<PAGE>
All'l Tower at the Hilton Hawaiian Village Honolulu, Oahu HI US 348
Hilton New Orleans Airport Kenner LA US 317
Hilton Short Hills Short Hills NJ US 301
LESS THAN 299 ROOMS
Hilton Pasadena Pasadena CA US 291
Hilton Tarrytown Tarrytown NY US 246
Hilton Suites Anaheim Orange Orange CA US 230
Hilton Suites Phoenix Phoenix AZ US 226
Hilton Suites Auburn Hills Auburn Hills MI US 224
Hilton Suites Oakbrook Terrace Oakbrook Terrace IL US 212
Hilton Suites Brentwood Brentwood TN US 203
The Waldorf Towers New York NY US 198
Hilton Inn Southfield Southfield MI US 195
Hilton Seattle Airport Seattle WA US 173
The Fontainbleau Towers Miami Beach FL US
List of Hotels Franchised.
-------------------------
MORE THAN 1000 ROOMS None
590 - 999 Rooms
Hilton Sandestin Beach & Golf Resort Destin FL US 598
Hilton Washington Duiles Airport Herndon VA US 598
Hilton Parsippany Parsippany NJ US 510
300 - 400 ROOMS
Hilton Milwaukee City Center Milwaukee WI US 478
Hilton Universal City & Towers Universal City CA US 469
Hilton Baltimore & Towers Baltimore MD US 439
Hilton Clearwater Beach Resort Clearwater FL US 426
Hilton Guadalajara Guadalajara MX 422
Hilton Arlington Park Arlington Heights IL US 420
Hilton Cherry Hill Cherry Hill NJ US 408
Hilton Montreal Bonaventure Montreal CA 395
Hilton Fort Lauderdale Airport Dania Beach FL US 388
Hilton Hartford Hartford CT US 388
Hilton Crystal City at National Airport Arlington/Crystal VA US 386
Hilton San Antonio Airport & Conference Center San Antonio TX US 386
Hilton Boston Back Bay Boston MA US 385
Hilton Inn Sunnyvale Sunnyvale CA US 372
Hilton Torrance/South Bay Torrance CA US 371
Hilton Springfield Springfield IL US 367
Hilton Salk Lake City Salt Lake City UT US 362
Hilton San Jose & Towers San Jose CA US 354
Hilton San Diego Mission Valley San Diego CA US 350
Hilton Kansas City Airport Kansas City MO US 347
Hilton Harrisburg & Towers Harrisburg PA US 341
Hilton Valley Forge King of Prussia PA US 340
Hilton North Raleigh Raleigh NC US 338
Hilton Woodcliff Lake Woodcliff Lake NJ US 336
Hilton St. Petersburg St. Petersburg FL US 333
Hilton Philadelphia Airport Philadelphia PA US 331
<PAGE>
Hilton Sacramento Arden West Sacramento CA US 331
Hilton Concord Concord CA US 330
Hilton JFK Airport Jamaica NY US 330
Hilton Lafayette & Towers Lafayette LA US 327
Hilton Oceanfront Resort Hilton Head Island Hilton Head SC US 323
Hilton Orlando/Altamonte Springs Altamonte FL US 322
The Seelbach Hilton Louisville Louisville KY US 321
Hilton Woodland Hills & Towers Woodland Hills CA US 318
Hilton Knoxville Knoxville TN US 317
Hilton Newark/Freemont Newark CA US 315
Hilton Dallas Parkway Dallas TX US 310
Hilton Arlington Arlington TX US 309
Hilton Lisle/Naperville Lisle IL US 309
Hilton Ontario Airport Ontario CA US 309
Hilton Denver Tech South Englewood CO US 305
Hilton Houston Hobby Airport Houston TX US 305
Hilton College Station & Conference Center College Station TX US 303
Windsor Hilton Windsor ON CA 303
Hilton Huntington Melville NY US 302
Hilton Gaithersburg Gaithersburg MD US 301
Hilton Wichita Airport Executive Conference Center Wichita KS US 301
Hilton Baton Rouge Baton Rouge LA US 300
Hilton Minneapolis/St Paul. Airport Bloomington MN US 300
Less Than 299 Rooms
Hilton Fort Lauderdale/Sunrise Sunrise FL US 297
Hilton Cocoa Beach Oceanfront Cocoa Beach FL US 296
Hilton Charleston North North Charleston SC US 296
Meadowlands Hilton Secaucas NJ US 296
Hilton Houston Westchase & Towers Houston TX US 294
Hilton Marco Island Beach Resort Marco Island FL US 294
Hilton Pleasanton at The Club Pleasanton CA US 294
Hilton Tulsa Southern Hills Tulsa OK US 294
Hilton Houston Southwest Houston TX US 292
Hilton Jacksonville & Towers Jacksonville FL US 292
Hilton Waterfront Beach Resort Huntington Beach CA US 290
Hilton Irvine/Orange County Airport Irvine CA US 289
Hilton Salt Lake City Airport Salt Lake City UT US 287
Hilton Beaumont Beaumont TX US 284
Hilton Greensboro Greensboro NC US 281
Hilton Jackson & Conference Center Jackson MS US 278
Hilton Huntsville Huntsville AL US 277
Hilton Atlanta Northeast Norcross GA US 272
Hilton Eugene & Conference Center Eugene OR US 272
Hilton El Paso Airport El Paso TX US 271
Hilton Wilmington/Christiana Newark DE US 266
Hilton Albuquerque Albuquerque NM US 264
Hilton East Memphis Memphis TN US 264
Hilton St. Louis Frontenne St. Louis MO US 264
<PAGE>
Hilton Inn Little Rock Little Rock AR US 263
Hilton Mesa Pavilion Mesa AZ US 263
Hilton Palm Springs Resort Palm Springs CA US 260
Hilton Greenville & Towers Greenville SC US 256
Hilton Phoenix Airport Phoenix AZ US 255
Hilton Newark Gateway Newark NJ US 253
Hilton San Bernardino San Bernardino CA US 251
Hilton Fort Wayne Convention Center Fort Wayne IN US 250
Hilton Scottsdale Resort & Villas Scottsdale AZ US 250
Hilton Dedham Place Dedham MA US 249
Hilton Midland & Towers Midland TX US 249
Hilton Norfolk Airport Norfolk VA US 249
Hilton Palm Beach Airport West Palm FL US 247
Hilton Savannah DeSoto Savannah GA US 246
Hilton Sonoma County/Santa Rosa Santa Rosa CA US 246
Hilton San Diego/Del Mar Del Mar CA US 245
Hilton Springfield Springfield VA US 245
Hilton Northbrook Northbrook IL US 244
Hilton Charlotte University Place Charlotte NC US 243
Hilton Houston Nassau Bay & Marina Houston TX US 243
Hilton Danbury & Towers Danbury CT US 242
Hilton Novi Novi MI US 239
Hilton Tampa Airport Westshere Tampa FL US 238
Hilton Melbourne Airport Melbourne FL US 237
Hilton Seattle Seattle WA US 237
Hilton Fort Lee at the George Washington Bridge Fort Lee NJ US 236
Hilton Knoxville Airport Aicoa TN US 236
Hilton Fayetteville Fayetteville AR US 235
Hilton Tucson East Tucson AZ US 233
Hilton Grand Rapids Airport Grand Rapids MI US 226
Hilton Port of Los Angeles/San Pedro San Pedro CA US 226
Hilton Allentown Allentown PA US 224
Hilton Carson Civic Plaza Carson CA US 224
Hilton Atlanta Northwest Atlanta GA US 222
Hilton Deerfield Beach/Boca Raton Deerfield Beach FL US 221
Hilton Inn North Little Rock Riverfront North Little AR US 220
Hilton St. Louis Airport St. Louis MO US 220
Hilton Oklahoma City Northwest Oklahoma City OK US 218
Hilton Lake Lanier Islands Lake Lanier GA US 216
Hilton Daytona Beach Oceanfront Resort Daytona Beach FL US 214
Hilton Toledo Toledo OH US 213
Hilton Arlington & Towers Arlington VA US 209
Hilton Greater Cincinnati Airport Florence KY US 206
Hilton Monterey Monterey CA US 204
Hilton Akron/Fairlawn Akron OH US 203
Hilton Las Crucas Las Crucas NM US 203
Hilton Whittier Whittier CA US 202
Hilton Hot Springs Convention Center Hot Springs AR US 200
<PAGE>
Hilton Waco Waco TX US 199
Hilton Southbury Southbury CT US 193
Hilton Woodbridge Iselin NJ US 198
Hilton Ocala Ocala FL US 197
Hilton Durham Durham NC US 194
Hilton Washington Embassy Row Washington DC US 193
Hilton Sioux City Sioux City IA US 193
Hilton Cleveland South Cleveland OH US 191
Hilton Wilmington North Claymont DE US 190
Hilton Santa Maria Santa Maria CA US 190
Hilton Austin North & Towers Austin TX US 189
Hilton Northfield Troy MI US 186
Hilton Mystic Mystic CT US 184
Hilton Houston Plaza Houston TX US 181
Hilton Bellevue Bellevue WA US 180
Hilton Lake Placid Resort Lake Placid NY US 179
Hilton Oshkosh & Convention Center Oshkosh WI US 179
Hilton Charlotte Executive Park Charlotte NC US 178
Hilton Key West Resort & Marina Key West FL US 178
Hilton Wilmington Riverside Wilmington NC US 178
Hilton Oak Lawn Oak Lawn IL US 178
Interstone Partners I, LLP Columbus GA US 177
Hilton Minneapolis North Brooklyn MN US 176
Hilton Suites Lexington Green Lexington KY US 174
Hilton Akron Akron OH US 173
Hilton Pikesville Baltimore MD US 171
Hilton Canton Canton OH US 170
Hilton Lynchburg Lynchburg VA US 167
Houston West Hilton Inn Houston TX US 165
Hilton Milwaukee River Milwaukee WI US 163
Oxnard Hilton Inn Oxnard CA US 160
Hilton Richmond Airport Sandston VA US 160
Hilton Santa Fe Santa Fe NM US 157
Hilton Columbia Columbia MD US 152
Hilton Suites Detroit Metro Airport Romulus MI US 151
Hilton Pearl River Pearl River NY US 150
Hilton Galveston Island Resort Galveston TX US 149
McAllen Airport Hilton Inn McAllen TX US 149
Hilton Greenville Greenville NC US 141
Hilton Palm Beach Oceanfront Resort Palm Beach FL US 134
Hilton Charleston Harbor Resort Mount Pleasant SC US 131
Hilton Mexico City Airport Mexico City MX 129
Hilton Tampa Bay/North Redington Beach Resort North FL US 125
Hilton Virginia Beach Oceanfront Virginia Beach VA US 124
Hilton Melbourne Beach Oceanfront Indialantic FL US 113
Hilton Longboat Key Beach Resort Longboat Key FL US 102
Hilton University of Houston Houston TX US 86
Sunset Key Guest Cottages at Hilton Key West Key West FL US 37
Resort
<PAGE>
PARTICIPATING HILTON HOTELS SITE ACKNOWLEDGEMENT
RIDER
THIS PARTICIPATING HILTON HOTELS SITE ACKNOWLEDGEMENT RIDER (the
"Rider") dated _______________, 1998, is by and between [Hotel Name]
(hereinafter referred to as "Hotel"), and CAIS, Inc., a Virginia corporation
(hereinafter referred to as "Licensee").
W I T N E S S E T H
WHEREAS, Licensee and Hilton Hotels Corporation have entered into that
certain Master License Agreement dated ____________, 199_ (the "Agreement"); and
WHEREAS, the Hotel is situated on the real property located at [Hotel
Address]; and
WHEREAS, Licensee has devised a commercial, high speed data
communications service as more particularly defined in Paragraph 2 of the
Agreement (the "Service") and desires to make the Service available to Licensor
and third parties at Licensor Hotels; and
WHEREAS, Hotel desires to have the Service available and Licensee
desires to provide the Service to joint customers of Hotel and Licensee and
other patrons; and
NOW, THEREFORE, the parties acknowledge and agree as follows:
1. The terms and conditions of the Agreement fully apply in the Hotel (in the
capacity of Licensor) and Licensee, which includes Licensee's obligation to
provide insurance policies as defined in Paragraph 10 of the License
Agreement and naming as "Additional Insureds" the following:
a.
-----------------
b.
-----------------
c.
-----------------
2. Commencement. Initial Term:______ Extended Term:______
Expiration. Initial Term:______ Extended Term:______
3. Allocation of Usage of Fees. Fees shall be paid by Licensee to Hotel in the
---------------------------
manner defined in Paragraph 4 of the Agreement and calculated in accordance
with Schedule A attached hereto and by this reference made an integral part
hereof.
4. Installation. Following appropriate provisions of the Agreement:
------------
a. Licensee will schedule the site survey and equipment installation of
the Hotel at a time
1
<PAGE>
and date convenient to the Hotel.
b. The Hotel shall have the opportunity to review the results of
the site survey and approve plans prior to installation.
c. Licensee will install its equipment at the Hotel at no cost to
the Hotel in accordance with the Agreement.
5. Training. Licensee shall provide training to employees of the
--------
Hotel on the use and operation of the Service. All training will be
provided to the Hotel for posting on the Hotel's intra-net web site
for future reference. Licensee also shall provide Hotel with
training manuals, collateral and help-line (technical support) for
launch and as needed for maintenance. Licensee shall furnish to
Hotel guidebooks for rooms, to include software directions, a
product overview, and contact numbers for help. Personnel of
Licensee shall be available twenty four (24) hours per day, 365 days
per year for telephone consultation to provide further assistance to
Hotel personnel regarding use and operation of the Service at no
charge.
6. Equipment Indentification. The Parties agree that all the jacks
-------------------------
in each unit shall bear the logo(s) of the OverVoice System. The
Parties agree that the start-up screen for Internet service shall
bear the logo of OverVoice, the Hotel and such other logos as
reasonably shall be agreed upon by the Parties as necessary
(including in some cases the logo of the provider of the Client-
Server Software).
7. Usage Fee. Subject to the provisions of Paragraph 4 (ix) of the
---------
Agreement. Hotel and Licensee agree that: A. Guest Room Usage Fee
shall be not less than $7.95 per day nor greater than $9.95 per day
for unlimited use from a Guest Room in any given day with usage
being tracked from noon until noon the next day.
B. Meeting Room Usage Fees and time periods are defined in Schedule
A and are due to Licensee without allocation to Licensor. Licensor
shall be entitled to retain all sums in excess of such amounts it is
able to charge for the Service.
2
<PAGE>
8. Power Consumption. Hotel shall provide at its sole cost electric power
-----------------
supply suitable for the Service including recurring monthly charges to a maximum
of Fifty Cents ($50/100) per installed guest and meeting rooms per month ($6.00
annual). Hotel reserves the right to charge Licensee for electrical usage in
excess of such amount.
9. In the event Hilton Hotels Corporation exercises the Option Addendum, the
Hotel shall be bound by the terms and conditions contained therein.
CAIS, Inc., [Hotel Name]
A Virginia corporation
By: __________________________ By: __________________________
__________________________ __________________________
Its: __________________ Its: __________________
<PAGE>
SCHEDULE A
----------
For Hilton Hotels with 1,000 or More Guest Rooms
------------------------------------------------
a. Usage Fees as defined in Section 4 of the Agreement shall be
allocated between Hotel and Licensee as follows:
i. Guest Room Usage Fee Share
Year 1 Year 2 Year 3 Year 4 Year 5
------ ------ ------ ------ ------
Hotel Share *% *% *% *% *%
Licensee Share *% *% *% *% *%
ii. Meeting Room Usage Fee Share
Fixed Payments to Licensee (Rate Applicable in Years 1 through 5):
128Kbps Rate Per day Multi Day Cap**
------- ------------ -------------
CPU 1 $ * $ *
Each Add'l CPU * *
1.5Mbps
-------
CPU 1 $ * $ *
Each Add'l CPU * *
Additional bandwidth above 1.5Mbs to be negotiated on an individual property by
property basis.
* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
** The Multi-Day Cap is the maximum Usage Fee payable to Licensee with respect
to a customer of the Hotel using the Service in a Meeting Room for more than
one day in sequence (up to a maximum of 30 days).
<PAGE>
SCHEDULE A
For Hilton Hotels with 500-999 Guest Rooms
------------------------------------------
a. Usage Fees as defined in Section 3 of the Agreement shall be
allocated between Hotel and Licensee as follows:
i. Guest Room Usage Fee Share
Year 1 Year 2 Year 3 Year 4 Year 5
------ ------ ------ ------ ------
Hotel Share *% *% *% *% *%
Licensee Share *% *% *% *% *%
ii. Meeting Room Usage Fee Share
Fixed Payments to Licensee (Rate Applicable in Years 1 through 5):
128Kbps Rate Per day Multi Day Cap**
------- ------------ -------------
CPU 1 $ * $ *
Each Add'l CPU * *
1.5Mbps
-------
CPU 1 $ * $ *
Each Add'l CPU * *
Additional bandwidth above 1.5Mbs to be negotiated on an individual property by
property basis.
* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
** The Multi-Day Cap is the maximum Usage Fee payable to Licensee with respect
to a customer of the Hotel using the Service in a Meeting Room for more than one
day in sequence (up to a maximum of 30 days).
<PAGE>
Schedule A
----------
For Hilton Hotels with 300-499 Guest Rooms
------------------------------------------
a. Usage Fees as defined in Section 3 of the Agreement shall be
allocated between Hotel and Licensee as follows:
i. Guest Room Usage Fee Share
Year 1 Year 2 Year 3 Year 4 Year 5
--------------------------------------------------------------
Hotel Share: *% *% *% *% *%
Licensee Share: *% *% *% *% *%
ii. Meeting Room Usage Fee Share
Fixed Payments to Licensee (Rate Applicable in Years 1 through 5):
128 Kbps Rate Per day Multi Day Cap**
-------- ------------ ---------------
CPU 1 $ * $ *
Each Add'l CPU * *
1.5Mbps
-------
CPU 1 $ * $ *
Each Add'l CPU * *
Additional bandwidth above 1.5 Mbs to be negotiated on an individual property by
property basis.
* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
** The Multi-Day Cap is the maximum Usage Fee payable to Licensee with respect
to a customer of the Hotel using the Service in a Meeting Room for more than one
day in sequence (up to a maximum of 30 days).
<PAGE>
SCHEDULE A
----------
For Hilton Hotels with fewer than 300 Guest Rooms
-------------------------------------------------
a. Usage Fees as defined in Section 3 of the Standard Terms and
------------------
Conditions shall be allocated between Hotel and Licensee as follows:
----------
i. Guest Room Usage Fee Share
Year 1 Year 2 Year 3 Year 4 Year 5
------ ------ ------ ------ ------
Hotel Share *% *% *% *% *%
Licensee Share *% *% *% *% *%
ii. Meeting Room Usage Fee Share
Fixed Payments to Licensee (Rate Applicable in Years 1 through 5):
128Kbps Rate Per day Multi Day Cap**
------- ------------ -------------
CPU 1 $ * $ *
Each Add'l CPU * *
1.5Mbps
-------
CPU 1 $ * $ *
Each Add'l CPU * *
Additional bandwidth above 1.5Mbs to be negotiated on an individual property by
property basis.
---------------------
* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
** The Multi-Day Cap is the maximum Usage Fee payable to Licensee with respect
to a customer of the Hotel using the Service in a Meeting Room for more
than one day in sequence (up to a maximum of 30 days).