COMPOSITE EXECUTION VERSION
NOTE: THIS DOCUMENT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST PURSUANT
TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. PORTIONS OF THIS
DOCUMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED HAVE BEEN REDACTED
AND ARE MARKED HEREIN BY "***". SUCH REDACTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO THE CONFIDENTIAL TREATMENT REQUEST.
ON COMMAND CORPORATION - MARRIOTT INTERNATIONAL
SERVICE AGREEMENT
ARTICLE I. DEFINITIONS.........................................3
ARTICLE II. TERM................................................3
ARTICLE III. PILOT...............................................4
ARTICLE IV. APPLICABILITY TO HOTELS.............................5
ARTICLE V. INSTALLATION........................................5
ARTICLE VI. SERVICES; SYSTEM UPGRADES...........................6
ARTICLE VII. EXCLUSIVITY.........................................7
ARTICLE VIII. PAY-PER-USAGE SERVICES..............................7
ARTICLE IX. FREE-TO-GUEST SERVICES.............................11
ARTICLE X. MATV SYSTEM; HOTEL PMS.............................13
ARTICLE XI. OWNERSHIP OF THE SYSTEM............................14
ARTICLE XII. HOTEL FACILITIES; COMPLIMENTARY ROOMS..............15
ARTICLE XIII. OPERATION AND MAINTENANCE OF THE SYSTEM............16
ARTICLE XIV. PUBLICITY REGARDING THE SYSTEM.....................18
ARTICLE XV. TRAINING AND CONSULTATION..........................18
ARTICLE XVI. SPECIAL WARRANTIES AND COVENANTS OF HOTEL..........18
ARTICLE XVII. INSURANCE..........................................20
ARTICLE XVIII. CONFIDENTIALITY....................................20
ARTICLE XIX. OWNERSHIP RIGHTS...................................21
ARTICLE XX. DEFAULT; FORCE MAJEURE.............................23
ARTICLE XXI. WARRANTIES; DISCLAIMER;
LIMITATION OF LIABILITY............................25
ARTICLE XXII. GENERAL TERMS......................................26
ARTICLE XXIII. APPENDIX...........................................30
EXHIBITS
--------
A Installation Priority (Section 5.2)
B Pay-Per-Usage Service Fee (Section 8.4)
C Revenue Sharing (Section 8.6)
D Taxes (Section 8.6)
E-1 Basic Cable Channel Lineup (Section 9.2)
E-2 Optional Expanded Cable Lineup
E-3 Broadcast Lineup (Section 9.3)
F Deliberately left blank
G Termination Charges (Section 20.3)
H Generation III Platform (Appendix)
I Bundled Pricing for Pilot Hotels (Section 8.13)
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COMPOSITE EXECUTION VERSION
ON COMMAND CORPORATION - MARRIOTT INTERNATIONAL
SERVICE AGREEMENT
THIS
SERVICE AGREEMENT (this "Agreement") is entered into as of this 21st day of
March, 2001 ("Effective Date") between
On Command Corporation ("OCC"), a
Delaware corporation, with offices at ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
and Marriott International, Inc., a Delaware corporation with offices at ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, on behalf of itself and its
majority-owned or controlled affiliates ("Marriott"), sets forth the terms for
the provision of services to guests of the hotels covered by this Agreement
through an OCC supplied system and related materials.
WHEREAS, Marriott operates hotels for the lodging of guests in separate private
rooms or suites that are customarily available for overnight sleeping
accommodations;
WHEREAS, Marriott desires to offer Guests the opportunity to purchase in-room
electronic entertainment and information services using the System;
WHEREAS, Marriott desires to make Services available to Guests;
WHEREAS, OCC desires to furnish the Services at the Hotels using the System; and
WHEREAS, Marriott and OCC desire to grant each other the rights and obligations
necessary to implement the System and offer the Services on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties herein contained and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties do hereby agree as
follows:
ARTICLE I. DEFINITIONS
1.1 INTERPRETATION. Certain terms used in this Agreement are defined in the
Appendix (beginning on the page after the signature page). Terms other than
those defined within this Agreement shall be given their plain English meaning,
and those terms known in the information technology industry shall be
interpreted in accordance with their generally known meanings. Unless the
context otherwise requires, words importing the singular include the plural and
vice-versa. The word "including" and its derivatives shall mean "including but
not limited to."
ARTICLE II. TERM
2.1 AGREEMENT TERM. This Agreement shall commence on the Effective Date and
shall expire, unless sooner terminated in accordance with this Agreement, on the
latest Hotel Termination Date (as the same may be renewed from time to time in
accordance herewith, the "Agreement Term").
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2.2 HOTEL TERM. With respect to a Hotel, this Agreement shall have a term
of ***, which term shall commence on the date on which Marriott and OCC agree
that the System has been installed and is fully functional ("Hotel Commencement
Date") and shall expire, unless sooner terminated in accordance with this
Agreement, *** thereafter ("Hotel Termination Date") (as the same may be renewed
from time to time in accordance herewith, the "Hotel Term"). This Section shall
be subject to Section 4.2 with respect to certain Hotels with Existing OCC
Agreements.
2.3 ***
2.4 ***
2.5 PREEXISTING COMPETITIVE COMMITMENTS. If the Hotel is party to or covered by
an existing agreement with a provider of any Competing Service ("Preexisting
Competitive Commitments"), at the date of this Agreement, OCC shall not begin
installing the System until the earlier to occur of (i) such time as all of the
Hotel's Preexisting Competitive Commitments expire or are terminated or
(ii) Marriott determines, in its sole discretion, that the System can be
installed and the Services provided notwithstanding the existence of any such
Preexisting Competitive Commitment (provided, however, that if pursuant to this
clause (ii), Marriott requests that the System be installed in a Hotel prior to
removal of the system covered by the Pre-existing Competitive Commitment,
installation of the System shall be subject to OCC's prior written consent, not
to be unreasonably withheld). Marriott agrees to cause any Hotel to terminate
and not renew each Preexisting Competitive Commitment as soon as reasonably
practicable under the circumstances without causing a breach thereunder or
incurring any liability thereunder.
ARTICLE III. PILOT
3.1 PILOT. OCC, at its sole cost, will design and install a fully functional
System (using the Generation III Platform) in all guest rooms in the following
Hotels (the "Pilot Hotels"):
/ / Bethesda Marriott
/ / Denver Marriott Tech Center
/ / San Diego Marriott Hotel and Marina
3.2 ACCEPTANCE.
(a) The installation of the System at the Pilot Hotels shall be completed as
soon as practicable after the Effective Date, but in any event not later than
***.
(b) By no later than *** following the completion of the trial, Marriott shall
notify OCC in writing if Marriott has accepted the System or if the System has
not performed to its satisfaction. If in such notice Marriott states that it has
accepted the System, OCC shall, within *** of receipt of such notice, commence
installation of the System (as accepted by Marriott) pursuant to the
installation provisions of this Agreement.
(c) ***
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(d) The date on which Marriott accepts the System in writing following the trial
shall be the "Acceptance Date."
ARTICLE IV. APPLICABILITY TO HOTELS
4.1 SCOPE. This Agreement applies to all Hotels, subject to Section 2.4
regarding Hotels with Pre-Existing Competitive Commitments.
4.2 HOTELS WITH EXISTING OCC AGREEMENTS.
(a) The parties acknowledge that there are Hotels that have entered into
agreements with OCC for delivery of in-room entertainment services (e.g.,
pay-per-view, cable programming, and the like) prior to having the System
installed under this Agreement ("Existing OCC Agreements"). ***
(b) The parties acknowledge that as part of Marriott's business, non-Marriott
hotels will be converted into hotels that are operated by Marriott under a
Covered Brand ("Converted Marriott Hotels"). ***
4.3 ADDING COVERED BRANDS. In the event that Marriott acquires or develops a new
lodging brand after the Effective Date or decides to add an existing brand not
then covered by this Agreement, it may add such new brand as a Covered Brand
with OCC's prior written consent, not to be unreasonably withheld. Relevant
factors to be considered in determining whether a new brand should be added as a
Covered Brand, include the extent to which the new brand is comparable to a
then-existing Covered Brand in terms of the target customer segment, average
hotel size, and services to be provided. If a new brand is added as a Covered
Brand, it shall be treated under this Agreement in the same manner as the most
comparable then-existing Covered Brand based on the foregoing factors.
4.4 ***
4.5 ***
4.6 ***
ARTICLE V. INSTALLATION
5.1 ***
Unless otherwise agreed by Marriott, for purposes of the foregoing monthly Room
installation requirement, OCC will not be deemed to have installed any of the
Rooms in a Hotel unless it has installed the System in all Rooms in such Hotel.
5.2 INITIAL PRIORITY DESIGNATION. As of the Effective Date, Marriott has
designated, with OCC's consent, the initial priority order of Hotels for System
installation as set forth in Exhibit A attached hereto (provided that Marriott
has accepted the System under Article 3). Marriott shall
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advise OCC of future installation priorities reasonably in advance so that OCC
can meet the installation schedule set forth in Section 5.1.
5.3 ***
5.4 ADDITIONAL INSTALLATION PROVISIONS.
(a) The Hotel shall provide such access as OCC reasonably may request
to enable OCC to complete the installation of the System and shall provide all
Hotel Facilities in reasonable time to allow OCC to complete installation. OCC
shall test the System to ensure functionality and adherence to the terms of this
Agreement both during and immediately following installation. The Hotel shall
provide OCC a secure storage location for its equipment during the installation
process.
(b) ***
(c) All equipment installed, provided, or modified by OCC, its agents,
or subcontractors shall be listed by the Underwriters Laboratory, Inc. ("UL") or
shall be built to their standards. OCC represents and warrants that all design,
equipment, and installation shall be in strict compliance with the National
Electrical Code Handbook as published by the National Fire Protection
Association and as amended periodically, Federal Communications Commission
requirements, and local or other governing codes.
(d) OCC agrees that the equipment installed and/or the connections to
the existing TV or antenna, satellite or cable system will not impair in any way
the ordinary reception of broadcast programs or other services on the cable
system, or the STSN Internet Access System.
(e) Installation shall be performed in a professional, workmanlike
manner, through use of reasonable care, and in accordance with industry
standards. OCC agrees to coordinate with each Hotel any installation, repair,
maintenance, replacement, or removal so as to minimize the disruption to or
inconvenience of the Hotels' guests or employees or the daily Hotel operations
and so as to initiate and complete those tasks as expeditiously as possible.
ARTICLE VI. SERVICES; SYSTEM UPGRADES
6.1 SERVICES. OCC will perform the Services as described in this Agreement,
including providing the In-Room Electronic Services through the System to the
Hotels. If any services, functions, or responsibilities not specifically
described or enumerated in this Agreement are necessary for the proper
performance of OCC's obligations hereunder, they shall be deemed included within
the scope of the Services.
6.2 ***
6.3 TECHNOLOGY COMMITTEE. OCC will form a technology committee comprised of
OCC's Senior Vice President of Strategic Development and Senior Vice President
of Engineering, Marriott's Chief Information Officer or his/her designee,
Marriott's Senior Vice President of North American Lodging Operations or his/her
designee, and a senior STSN representative.
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This committee will meet quarterly to discuss technological issues in the
lodging industry, and to provide guidance on technology development and
potential future System Upgrades.
ARTICLE VII. EXCLUSIVITY
7.1 HOTEL EXCLUSIVITY; NO COMPETING SERVICES. Provided that Marriott accepts the
System as provided in Article 3, and subject to the terms and conditions of this
Agreement, Marriott agrees that OCC will be the sole and exclusive provider of
In-Room Electronic Services at each Hotel during the Hotel Term for such Hotel.
Accordingly, Marriott agrees that it will not permit any Competing Service to be
made available to Rooms in the Hotels. Hotels that have, as of the Effective
Date, already installed a Competing Service shall be exempt from this
exclusivity obligation.
7.2 ***
ARTICLE VIII. PAY-PER-USAGE SERVICES
8.1 PAY-PER-USAGE SERVICES. "Pay-Per-Usage Services" means in-room electronic
entertainment and information services that OCC shall make available to Guests
for purchase using the System, which services shall include, without limitation,
(i) movies, specialized videos (such as workout, health and exercise), special
events and short feature programming ("Movies and Events"), (ii) interactive
video games ("Games"), (iii) Internet access by TV and/or otherwise as approved
by Marriott in advance ("Internet TV") (iv) music programming ("Music") and
(v) any other services that OCC and Marriott agree to offer to Guests and for
which Guests or other persons at the Hotel are charged a separate fee. *** The
programming of the Pay-Per-Usage Services shall be in accordance with the
following:
(a) MOVIES AND EVENTS. OCC shall provide Guests with multiple (but in
no event fewer than *** in any Hotel at any time) in-room Movies and Events that
Guests may access on demand using the System. OCC shall select *** the Movies
and Events to be made available to the Guests; provided, however, at least ***.
(b) VIDEO GAMES. OCC shall provide Guests with access to not fewer
than *** (at any time at any Hotel) interactive video games using the System,
on a ***.
(c) INTERNET TV. OCC shall provide Guests with in-room access to the
Internet, using a special browser that is part of the System, a Keyboard, the
System TV as a display device and, if necessary, an in-room network termination
device. Through the Agreement Term, other methods of providing in-room Internet
access using the System may also be made available to Guests, with Marriott's
prior written consent.
(i) "Internet TV Portal" shall mean the start-up screens, all
menu screens and the material displayed upon those screens, appearing when
Guests access the Internet TV Service.
(ii) OCC acknowledges that Marriott intends to present a
consistent portal experience to its guests, regardless of the method chosen by
the guest to access the portal. ***
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In addition, except with respect to OCC trademarks, Marriott shall have the
right to replicate the design elements and look and feel of the Internet TV
Portal for use by Marriott in other services and venues, such as in web sites
developed or used by Marriott.
(iii) ***
(iv) The Internet TV Portal shall contain prominent links to
Marriott content and services, including the Virtual Personal Concierge and
promotional content.
(v) Marriott may participate in the design and development of
the Internet TV Portal. *** Use by either Marriott or OCC of third parties to
assist in the design and development of the Internet TV Portal shall be subject
to mutual agreement. ***
(d) MUSIC ON DEMAND. OCC shall provide Guests with in-room music
selections which Guests may access on demand using the System, which shall
include not fewer than *** compact disk titles by original artists at any time
at any Hotel. Guests may customize personal play lists.
(e) DIGITAL MUSIC NETWORK. OCC shall provide Guests with the ability to
listen to any genre of music without searching. The service pre-selects popular
songs from hundreds of albums in the chosen category. The System shall include
at least *** music genres with more than *** categories and sub-categories.
(f) ARCHIVED TELEVISION. OCC shall provide archived television content,
consisting of popular TV programming stored by the System for Guest viewing on
demand (e.g., archived episodes updated monthly of HBO programs including, as of
the Effective Date, Sex and the City and The Sopranos).
(g) ***
(h) T-COMMERCE AND OTHER NEXT GENERATION OFFERINGS. As part of the
System Upgrades, OCC shall provide for the capability for T-Commerce (commerce
through the System using the System TV as the user interface), personalization,
virtual trade show, and localized convention advertising services ***.
(i) OTHER SERVICES. If, during the Term, OCC wishes to offer additional
services to Guests using the System, OCC shall inform Marriott of such desire
and OCC and Marriott shall negotiate in good faith to set the terms upon which
such services shall be provided to Guests pursuant to this Agreement, such
agreed-upon terms to be set forth on an additional exhibit to this Agreement. If
OCC and Marriott are unable to reach an agreement on the terms under which the
additional services shall be made available to Guests, the parties shall resolve
this dispute pursuant to Section 22.3.
8.2 MINIMUM DELIVERY REQUIREMENT. The System will have the capacity to
simultaneously deliver Pay-Per-Usage Services to a minimum of *** of Rooms in
each Hotel at any one time. This shall include the capacity to deliver any one
Service (such as Video Games, Movies and Events or Internet TV) to each of such
rooms.
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8.3 ***
(a) ***
(b) ***
(c) ***
8.4 PAY-PER-USAGE SERVICE FEE. *** The initial fees to be charged for each
Pay-Per-Usage Service shall be set forth in Exhibit B. Changes to such pricing
shall be in accordance with Exhibit B. Based upon the Access Record, Marriott
shall cause Hotel personnel to charge and collect from each Guest the
Pay-Per-Usage Service Fees incurred by such Guest. On a periodic basis, Marriott
shall cause the Hotel to reconcile the Access Record with the System activity
reported by the Hotel's property management system ("Hotel PMS") and notify OCC
as promptly as practicable (but in any event within thirty (30) days) of the
Hotel's discovery of any discrepancies in such reconciliation. If for any reason
the Hotel PMS is not functioning properly and/or is incapable of automatically
posting and reporting the System activity, Marriott agrees that the Access
Record shall be conclusive evidence of System usage, absent manifest error on
the part of the Monitoring Unit.
8.5 ACCESS RECORD. The Monitoring Unit will generate an accurate daily record
(the "Access Record") of the use of the System by Guests, including a record of
the Pay-Per-Usage Service Fees attributable to each Room account. *** Marriott
or its designee shall be entitled to inspect and test the Monitoring Unit in any
Hotel to verify its accuracy.
8.6 OCC REVENUE SHARE REMITTANCE. Within thirty (30) calendar days of the end of
each month (such thirtieth day, the "Due Date"), Marriott shall remit to OCC an
amount equal to all of the Adjusted Pay-Per-Usage Service Fees incurred by and
collected from the Guests for the prior calendar month (plus or minus taxes as
set forth in Exhibit D, as such exhibit may be modified by the agreement of the
parties), less the Hotel Revenue Share as designated in Exhibit C (such
remaining amount to be paid to OCC, the "OCC Revenue Share").
8.7 ADDITIONAL REVENUE.
(a) ***
(b) The parties acknowledge that a Hotel, prior to the installation of
the System, might have already entered into an agreement with a third party for
the delivery of cable and broadcast programming services that would otherwise be
provided by OCC under this Agreement, and would therefore not be receiving the
Cable and Broadcast Programming Services from OCC. ***
8.8 FAILURE TO REMIT. If the relevant Hotel fails to remit to OCC the applicable
OCC Revenue Share by any Due Date, ***, then (i) such unpaid OCC Revenue
Share ***, as the case may be, shall bear interest at the rate of one and one
half percent (1.5%) per month calculated daily, until paid, unless such rate
exceeds the maximum rate allowed by applicable law, in which event the maximum
legal rate shall apply.
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8.9 ***
8.10 FEE ACCOUNT. Until the monthly OCC Revenue Share is remitted to OCC, the
OCC Revenue Share of the Pay-Per-Usage Service Fees charged to Guests during any
such month shall be held in trust for OCC by the Hotels and shall be deemed the
property of OCC. ***
8.11 TAXES AND TAX RETURNS. Set forth in Exhibit D is the tax information
supplied by OCC applicable to the Pay-Per-Usage Services in the relevant taxing
jurisdiction, including tax base, tax rate and exemption policies. OCC
represents and warrants that to its knowledge such information is true, correct
and complete, and OCC agrees to update this information so as to keep it current
through the Agreement Term. Marriott shall cause the Hotel to collect all
applicable taxes from Guests based on this information and to keep accurate
records of such collections. If, under the laws of the taxing jurisdiction, OCC
is responsible for filing returns and paying such taxes to the relevant tax
authority, the Hotel shall remit the taxes so collected to OCC at the same time
as it remits the OCC Revenue Share. If, under the laws of the taxing
jurisdiction, the Hotel is responsible for filing returns and paying such taxes
to the relevant tax authority, the Hotel shall file such returns and make such
payments in accordance with such laws, and shall provide copies of such returns
to OCC. OCC agrees and acknowledges that, notwithstanding the collection and
payment obligations of the Hotels set forth in this Section, as between the
Hotels, Marriott and OCC, OCC is ultimately responsible for the payment of all
taxes (including any and all penalties and interest thereon) applicable to the
Pay-Per-Usage Services. OCC shall be solely responsible for filing returns and
paying any and all taxes, including without limitation sales, property and/or
use taxes, on all System equipment and other property installed at the Hotels by
OCC under this Agreement, including repair and maintenance thereto and upgrades
thereto.
8.12 INSPECTIONS OF BOOKS AND RECORDS.
(a) The books and records of the relevant Hotel pertinent to the
Services, Adjustments or discrepancies between the Access Record and the Hotel
PMS during the Term of this Agreement shall be open to inspection and audit (an
"Inspection") by an authorized representative of OCC upon reasonable advance
written request to the Hotel and Marriott. OCC shall have the right to inspect
and audit such books and records only for the *** preceding years. OCC must
bring any claim resulting from such an audit within *** after completion of such
audit. OCC's right to inspect and audit such books and records shall not extend
beyond *** after the expiration or termination of this Agreement with respect to
a particular Hotel.
(b) The books and records of OCC relating to the Services (including
related information, data and files and further including information relating
to Net Additional Revenue, the allocation thereof to the Hotels during the
Agreement Term and the accuracy and results of the Monitoring Units), shall be
open to an Inspection by an authorized representative of Marriott or the Hotels
upon reasonable advance written request to OCC. Marriott shall have the right
to inspect and audit such books and records only for the *** preceding years.
Marriott or the Hotel must bring any claim resulting from such an audit
within *** after completion of such audit. Marriott's and the Hotels' right to
inspect and audit such books and records shall not extend beyond *** after the
expiration or termination of this Agreement with respect to a particular Hotel.
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(c) Marriott shall cause the relevant Hotel to promptly remit to OCC
any fees or other amounts (without interest thereon, unless the Hotel's relevant
actions, as applicable, were made in bad faith in which case interest thereon
shall be added at a rate equal to that provided for in Section 8.8) that are
owed to it as demonstrated by an Inspection. If OCC has been paid, since the
immediately preceding Inspection (or if there has not been a previous
Inspection, since the Hotel Commencement Date for the relevant Hotel), less than
*** of the OCC Revenue Share that OCC should have been paid during such period
(as reasonably determined by OCC as a result of such Inspection), the Hotel
shall reimburse OCC for the reasonable cost of such Inspection.
(d) OCC shall promptly remit to the Hotels (or to Marriott, at
Marriott's request) any fees or other amounts (without interest thereon, unless
OCC's relevant actions were made in bad faith in which case interest thereon
shall be added at a rate equal to that provided for in Section 8.8) that are
owed to it as demonstrated by an Inspection. ***
8.13 ***
8.14 ***
8.15 ***
ARTICLE IX. FREE-TO-GUEST SERVICES
9.1 GENERAL. "Free-To-Guest Services" means in-room electronic entertainment and
information services that OCC shall make available free of charge to Guests
using the System, which services shall include the following:
(a) The Cable and Broadcast Programming Services; and
(b) The Hotel Guest Services,
and such other electronic displays or services that OCC may add from time to
time with Marriott's prior written consent.
9.2 CABLE PROGRAMMING SERVICES. OCC shall provide Cable Programming Services to
the Hotels as provided in Exhibits E-1 and E-2, which may be modified as
provided herein. Exhibit E-1 sets forth the "Basic Cable Channel Lineup" for
each Covered Brand. ***
(a) Each Hotel may elect to receive the Basic Cable Channel Lineup ***.
As of the Effective Date, OCC's total direct third party costs (amounts actually
paid to appropriate third parties for the right to distribute the applicable
cable programming) ("Direct Programming Costs") are listed for each of the Cable
Lineups in Exhibits E-1 and E-2, on a per-available-room basis.
(b) ***
(c) ***
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(d) Marriott shall have the right on a Hotel-by-Hotel basis to
substitute one or more cable channels that are commercially available in the
Hotel's area for the same number of cable channels in the Cable Lineups. *** In
the event that the total Direct Programming Costs are higher with such
substitutions, OCC shall so inform the Hotel, which, if it elects to proceed
with the substitutions, shall pay the difference in Direct Programming Costs to
OCC. It is understood that having certain channels present in all Hotels could,
among other things, increase revenue opportunities for the System. Accordingly,
the substitution right described in this paragraph shall not apply to the
channels identified as "Protected Channels" in Exhibits E-1 and E-1. In
addition, OCC may propose changes to the Protected Channels for Marriott's
review and approval, not to be unreasonably withheld.
(e) ***
(f) ***
9.3 BROADCAST PROGRAMMING SERVICES.
(a) The Broadcast Programming Services include providing to each Hotel
the programming from the major broadcast networks identified in Exhibit E-3 (the
"Broadcast Lineup").
(b) If, at the time OCC installs the System, a Hotel receives the major
broadcast networks utilizing a local, off-air antenna, OCC shall adapt the
System, at Marriott's request and at no cost to the Hotel, to enable the Hotel
to continue receiving such Major Broadcast Networks using the Hotel's antenna.
9.4 ADDITIONAL CABLE OR BROADCAST PROGRAMMING.
(a) ***
(b) OCC shall notify the Hotel if a request for additional channels
under the prior paragraph would prevent OCC from meeting the minimum delivery
requirement described in Section 8.2. ***
9.5 CABLE PERMITS, LICENSES AND APPROVALS. OCC's delivery of Cable and Broadcast
Programming Services is subject to OCC's ability to obtain all necessary local
permits and licenses, a clear signal and receipt of any necessary approvals from
any supplier of such Cable and Broadcast Programming Service. OCC shall use
commercially reasonable efforts to obtain and keep in effect all such permits,
licenses and approvals. If the quality of the signal offering such Service is
disrupted, interfered with or otherwise affected by sources beyond the control
of OCC the cost to restore non-interrupted Cable and Broadcast Programming
Service, to the extent technologically possible, shall be the responsibility of
relevant Hotel. Transmission of major broadcast networks at the Hotel may be
subject to pricing restrictions and copyright fee payments under applicable
federal law on a pass through basis at cost only. If such pricing is assessed
directly against OCC, *** to be paid by the relevant Hotel in accordance with
Sections 8.6 and 8.8.
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9.6 HOTEL GUEST SERVICES. At such time as the Hotel PMS becomes compatible with
the System, OCC shall cause the System to provide certain in-room hotel guest
services that Guests may access, through a System TV, including the following
("Hotel Guest Services"):
***
9.7 ADDITIONAL PROVISIONS ON HOTEL GUEST SERVICES.
(a) OCC shall ensure that the System will not allow a Guest to access
any message, folio, pay movie, or checkout function or any other service other
than those which are applicable to the Room from which access is initiated. OCC
shall provide filters, traps, or some other mechanism sufficient to prevent TVs
not intended to provide System services or TVs in public areas from receiving
images or information intended for System TVs.
(b) Precise technical specifications for Hotel Guest Services shall be
documented and agreed to by Marriott and OCC prior to such Services being
implemented in any Hotel. Such specifications shall include a functional
description of how the Hotel Guest Services will work and the Guest's
interaction with them, data formats, and data communications protocols, as
reasonably required for purposes of interfacing with the Hotel PMS.
(c) OCC will use reasonable efforts to keep Hotel Guest Services
current with changes required to each Hotel PMS. No changes to Hotel Guest
Services shall be made by OCC without prior written approval from Marriott. All
acceptance testing and certification of the suitability of Hotel Guest Services
or Hotel Guest Services technical specifications shall be subject to approval by
Marriott..
9.8 ***
9.9 NO OCC PROMOTIONS. *** Publicity regarding the System shall be as provided
in Article XIV.
ARTICLE X. MATV SYSTEM; HOTEL PMS
10.1 MATV INITIAL UPGRADE. If a relevant Hotel's MATV System needs to be
upgraded in order to be compatible with the System (which may require the
relocation of an existing satellite dish) ***. OCC shall not effect any such
upgrade without prior notice to and consent of Marriott or the Hotel.
10.2 MATV MAINTENANCE AND UPGRADES. Following the Hotel Commencement Date for
the relevant Hotel, and subject to the other terms and conditions of this
Agreement, OCC shall *** maintain the MATV System in good working order
(including maintenance of signal quality to the extent within the reasonable
ability of OCC to do so) and perform any upgrades thereto, deemed necessary in
the reasonable discretion of OCC after consultation with and the consent of
Marriott, not to be unreasonably withheld.
10.3 NO OTHER SERVICES ON MATV. Marriott hereby agrees that only the Services
may be transmitted on the MATV System at any Hotel. If the Hotel wishes to
provide any other signal, service or transmission, which is not a Competing
Service, on the MATV System ***, it must
13
obtain the prior written consent of OCC, which consent shall not be unreasonably
withheld. OCC may not withhold consent from uses of the MATV System that will
not interfere with the use of the System or the delivery of the Services as
provided in this Agreement.
10.4 HOTEL PMS INTERFACE. OCC will provide the necessary software, ***, to
enable the System (including without limitation the Generation III Platform) to
interface with the Hotel PMS that Marriott has authorized for use in the Hotels
as of the Effective Date ("Standard Hotel PMS"). ***
ARTICLE XI. OWNERSHIP OF THE SYSTEM
11.1 SOLE AND EXCLUSIVE PROPERTY.
(a) The System and all equipment, materials and engineering related
thereto that are provided by OCC (excluding any Hotel Installed Property that
may be provided by OCC) are the sole and exclusive property of OCC, and Marriott
shall not place nor allow to be placed any lien, restriction, encumbrance,
mortgage, claim or security interest to be attached to or be made against the
System or any such related properties.
(b) OCC shall have no claim to any software which runs on a computer,
data communications device, or other equipment owned or principally used by
Marriott. Marriott shall have no claim to any software which runs on a computer,
data communications device, or other equipment owned or principally used by OCC.
Unless agreed to the contrary in writing, neither party shall have an exclusive
claim on any computer interfaces, networking protocols, or data transmissions
standards used in connecting OCC computer equipment with Marriott computer
equipment. Both parties shall be free to used such interfaces, protocols, or
standards as each see fit.
11.2 SYSTEM ACCESS. The Hotel shall allow authorized personnel of OCC (i) to
have reasonable access to Hotel properties, including, without limitation, the
MATV System, to conduct the site survey, install the System and conduct routine
maintenance, improvements, observation, surveys and monitoring of the System,
and (ii) to make any physical alterations to Hotel properties, including,
without limitation, the MATV System, that OCC deems necessary, in its reasonable
discretion, to satisfy its obligations under this Agreement, provided any such
alterations have Marriott's prior written consent. OCC shall schedule its access
to the Hotel in such a manner as to avoid any unreasonable interference with or,
disturbance or inconvenience to, the Hotel or the Guests. OCC access to all
Hotel premises and equipment shall be in accordance with procedures agreed to by
each Hotel.
11.3 SYSTEM REMOVAL.
(a) ***If requested by Marriott, OCC shall schedule and handle System
removal so as to allow for an orderly transition to an alternative operator.
*** OCC further agrees that System removal shall be conducted by OCC as
expeditiously as possible with minimum interruption of Hotel TV or MATV offered
to guests. ***
(b) If OCC adds to or modifies any part of the MATV system, cabling,
amplifiers, wall taps, or any other equipment for the reception and distribution
of video or audio which is
14
not exclusively a part of the System, the Hotel may elect to leave the
addition or modification in place in which case ownership of said addition or
modification shall transfer to Hotel. OCC shall provide written documentation
to Hotel detailing changes to the MATV System or other Hotel equipment.
(c) Upon termination of this Agreement, Marriott shall take all
reasonable actions necessary to allow OCC to remove the System promptly.
11.4 SYSTEM THREATENED. In the event that the safety of the System is threatened
due to earthquake, flood, fire, strike, civil disruption or similar causes, OCC
shall be given immediate access to the Hotel to remove the System. If Marriott
or the Hotel becomes aware of any such danger, Marriott shall, or shall cause
the Hotel to, use reasonable efforts to promptly notify OCC of such danger, and
provide OCC with immediate access to the Hotel to remove the System in
accordance with Section 11.3. OCC shall provide the Hotel with reasonable notice
of its plans for System removal, and shall remove the System with minimum
disruption to Hotel TVs, the MATV System, and the operations of the Hotel. OCC
shall not be responsible to Marriott or the Hotel for any lost revenue incurred
as a result of OCC's removing the System pursuant to this Section. If the System
is removed from the Hotel under this Section, OCC shall return the System to the
Hotel once such danger or other threatening event ceases to exist.
11.5 LIENS AND NON-DISTURBANCE. OCC agrees that the OCC Property shall only be
subject to liens and similar encumbrances imposed by third parties provided that
an agreement has been obtained from the third party for the benefit of and
enforceable by Marriott (i) not to disturb the Hotels' possession or use of the
System notwithstanding any default of OCC (including that the third party will
not seek to remove the System from the Hotels), and (ii) granting Marriott the
right to remedy any default of OCC with respect to such third party (provided
OCC shall remain liable to Marriott for the costs of such remedy). Upon
Marriott's request, OCC shall provide Marriott with copies of any documents
establishing such liens or encumbrances (including equipment leases and
financing documents) to verify compliance with this Section.
ARTICLE XII. HOTEL FACILITIES; COMPLIMENTARY ROOMS
12.1 HOTEL FACILITIES. During the Term, the Hotel shall provide and maintain in
good working order, ***, in the space where any part of the System is located
(including, without limitation, in each designated Room), signal wiring and
connections, electrical power, lighting and sockets, cooling facilities, System
TVs and a secure location for all equipment comprising the System (collectively,
the "Hotel Facilities"), all in accordance with the specifications agreed to by
Marriott and OCC (the "Specifications"). *** If the Hotel cannot comply with the
Specifications (as applicable to such Hotel), in good faith, the Hotel may
inform OCC of its inability to comply with the Specifications, in which case OCC
may revise the Specifications for such Hotel pursuant to good faith negotiations
with the Hotel or, if such revisions would materially adversely affect the
System in such Hotel, terminate this Agreement as to that Hotel upon written
notice to Marriott. The Hotel shall make available all Hotel Facilities within a
reasonable period of time in order for OCC to fulfill its obligations under this
Agreement.
12.2 ***
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ARTICLE XIII. OPERATION AND MAINTENANCE OF THE SYSTEM
13.1 NOTIFICATION OF SYSTEM FAILURE. Marriott shall cause Hotel personnel to
notify OCC promptly by telephone of any failure of the System, as a whole or any
component thereof, including, without limitation, any failure of any System
functions in any Room. Marriott shall cause the Hotel to create and maintain an
accurate record of each instance of System failure or malfunction. For the
purpose of such notification, Hotel staff shall call a toll free telephone
number provided by OCC which shall be attended twenty-four hours a day seven
days a week by OCC staff having the capability of expeditiously dispatching OCC
service personnel to the Hotel.
13.2 RESPONSIBILITY FOR DAMAGE BY THE HOTEL. Each Hotel shall use reasonable
efforts to protect the safety and security of the System and all related
property of OCC at all times. Without limiting the generality of the foregoing,
each Hotel shall use reasonable efforts to prevent any vandalism, theft, or
damage of or to any of the equipment supplied by OCC. Each Hotel shall reimburse
OCC for any repairs to or replacements of any portion of the System or any other
equipment supplied by OCC under this Agreement necessitated by any breach by the
Hotel of the foregoing obligations. *** Notwithstanding anything above to the
contrary, if the equipment loss to OCC is covered under any Marriott insurance
program, Marriott shall make an appropriate claim and remit any relevant payment
to OCC, it being understood that Marriott shall not be required to incur costs
with respect to such equipment loss in the form of deductibles or payments out
of self-insurance programs. OCC may choose to limit supply of replacements to
specific Hotels in the event of unreasonable losses are experienced therein.
13.3 NO TAMPERING. Except as otherwise expressly provided in this Agreement or
as authorized by OCC, the relevant Hotel shall not tamper with or attempt to
make repairs to any portion of the System or any other equipment supplied by OCC
under the terms of this Agreement.
13.4 CONTROL DEVICES. On or before the particular Hotel Commencement Date, OCC
shall provide the relevant Hotel with a sufficient number of control devices
("Control Devices") as will enable Guests to access the Services. Marriott shall
cause the Hotel to keep at least one Control Device per System TV in each Room
at all times. OCC shall ensure that as part of System installation, it has
provided the Hotel with a reasonable number of spare Control Devices (minimum of
one for every 50 rooms). Marriott shall cause the Hotel to segregate all spare
Control Devices in a safe location until such time as they must be used. If the
Hotel needs any additional or replacement Control Devices, OCC shall provide
them *** except to the extent they are needed due to a failure by the Hotel to
fulfill its responsibilities hereunder, in which event Hotel shall pay OCC for
such additional or replacement Control Devices at their then list prices.
13.5 KEYBOARDS. On or before the particular Hotel Commencement Date, OCC shall
provide the Hotel with one keyboard per Guest Room ("Keyboards") so as to enable
Guests to access Internet TV. Marriott shall cause the Hotel to keep at least
one Keyboard per Room at all times. OCC shall ensure that as part of System
installation, it has provided the Hotel with a reasonable number of spare
Keyboards (minimum of one for every 50 rooms). If the Hotel needs any additional
or replacement keyboards, OCC shall provide them at its cost except to the
extent they
16
are needed due to a failure by the Hotel to fulfill its responsibilities
hereunder, in which event Hotel shall pay OCC for such additional or replacement
Keyboards at their then list prices.
13.6 POWER-UP SCREEN. Subject to the applicable provisions of Article 8, OCC
shall at all times control the content and the material displayed on the System
TV upon its first receiving power (the "Power-Up Screen"). Marriott or the Hotel
shall not display nor allow to be displayed material of any kind on the Power-Up
Screen without the prior consent of OCC, not to be unreasonably withheld.
(a) ***
13.7 REPORTING. OCC shall deliver to Marriott the following reports sorted by
Hotel name.
(a) On a monthly basis, OCC shall report on:
(i) All service and maintenance calls received from Hotels
including the date, caller, problem reported, status, and resolution.
(ii) Usage levels (by Hotel and for all Hotels) for each
System function or category (e.g., Adult or non-Adult), gross system revenue,
revenue per occupied Room, and the number or Pay-Per-Usage Services purchased in
each price tier.
(b) On a quarterly basis, OCC shall report on:
(i) Revenue received by Hotels.
(ii) Hotels which are currently served by OCC, and the
expiration date for each Hotel.
(iii) Additional Revenue, and Net Additional Revenues, for the
quarter and year-to-date, with notes
(c) In addition to providing the reports in printed form, OCC shall
provide them electronically in a format agreed to by Marriott and OCC.
(d) OCC shall provide such other reasonable reports and information as
Marriott may request, to the extent such reports and information are readily
available to, or can be readily generated by, OCC.
(e) In addition, the parties shall conduct such meetings as Marriott
may reasonably request to review the status of the Services, the System, the
usage thereof by hotel customers, the trends in the industry, and similar
matters.
13.8 ***
13.9 CONDUCT OF PERSONNEL. Personnel on Marriott or Hotel premises or dealing
with Guests will conduct themselves in a professional, courteous manner, will
wear appropriate attire and
17
identification, and will comply with the applicable standards and security
policies in effect at those premises for business invitees.
13.10 SECURITY. OCC will be responsible for providing reasonable and adequate
security for Marriott and for users of the System. OCC shall take reasonable
security precautions to prevent unauthorized access to the information or
communications of any user of the System. The details of all security measures
shall be subject to Marriott's review prior to implementation, and OCC shall use
reasonable efforts to consider and implement Marriott's reasonable comments and
requests. Notwithstanding the foregoing, Marriott understands and acknowledges
that the transmissions of data through the Internet are subject to interception
and are therefore not inherently secure, and that security measures, including
firewalls, logon ids/passwords, and encryption, are not foolproof.
(a) ***
(b) ***
ARTICLE XIV. PUBLICITY REGARDING THE SYSTEM
14.1 ADEQUATE PUBLICITY. Marriott shall, and shall cause Hotel personnel to,
adequately publicize to the Guests the existence of and access to the Services.
The manner and nature of such publicity shall be at Marriott's reasonable
discretion. Marriott hereby acknowledges that the success of the Pay-Per-Usage
Services depends upon the marketing of the Pay-Per-Usage Services and the
responding of Hotel personnel to Guest inquiries in a such a manner as to
encourage Guests' use and enjoyment of the Services.
14.2 MARKETING MATERIALS. OCC and Marriott shall cooperate on the creation and
dissemination of appropriate marketing materials to be placed in the Rooms and
any other appropriate area of the Hotel; provided that Marriott for good stated
reason may refuse to display any materials which it finds unsuitable for
presentation to Guests.
ARTICLE XV. TRAINING AND CONSULTATION
15.1 TRAINING. To enable the Hotels to generate interest in the Pay-Per-Usage
Services and to enable Hotel personnel to advise and encourage Guests regarding
their use of the Pay-Per-Usage Services, OCC shall provide a training course of
at least one but not more than three hours of instruction, for as many employees
of a relevant Hotel as Marriott deems desirable, on the operation of the System
and the use of the Services. With Marriott's consent, OCC may also use a
web-based training program.
15.2 CONSULTATION. OCC personnel shall be available, at no additional charge,
for reasonable telephone consultation to provide further assistance to Hotel
personnel regarding operation of the Services seven days a week, 24 hours per
day at a toll free telephone number specified by OCC.
ARTICLE XVI. SPECIAL WARRANTIES AND COVENANTS OF HOTEL
16.1 NO PUBLIC EXHIBITION. Except as otherwise set forth in this Agreement or as
expressly authorized by the applicable copyright holder or licensor, the
Services shall be exhibited only in
18
the Rooms, and not in any public areas or lounges of the Hotel (including,
without limitation, lobbies, hallways, restaurants, bars, meeting rooms,
exercise facilities, etc.). No Service shall be exhibited other than in
compliance with this Agreement.
16.2 NO REMOVAL OF EQUIPMENT. Except pursuant to any instructions provided by
OCC to Marriott or the Hotel pursuant to this Agreement, Marriott shall not, and
shall not permit the Hotel to, remove or tamper with any portion of the System
for any purpose whatsoever, except in the case of any emergency where such
removal is necessary to ensure safety of the System and Marriott uses reasonable
efforts to notify OCC of such removal by telephone.
16.3 PREVENTION AND NOTIFICATION OF DAMAGE OR UNAUTHORIZED USE. The Hotels will
use their reasonable efforts to prevent any unauthorized use or theft of, or
vandalism or damage to, the System, any component thereof or any other equipment
supplied by OCC under this Agreement. The relevant Hotel shall promptly notify
OCC upon discovery of any unauthorized use or theft of, or vandalism or damage
to, the System, any component thereof or any other equipment supplied by OCC
under this Agreement. Marriott shall cause the Hotel to create and maintain an
accurate record of each such instance. Marriott agrees to cooperate with OCC in
connection with, and hereby assigns to OCC any prosecution rights it or a
relevant Hotel may have with respect to, any criminal investigation, arrest or
trial arising out of or relating to any criminal act perpetrated upon any
portion of the System.
16.4 HOTEL ACCESS TO THE SYSTEM. The Hotels may not permit anyone to have access
to the System, other than (i) the Hotel's maintenance personnel to the extent
reasonably necessary to enable Hotel to provide the Hotel Facilities, (ii) as
expressly authorized by OCC in writing or (iii) as provided pursuant to this
Agreement.
16.5 NO UNAUTHORIZED VIEWING. The Hotels shall use reasonable efforts to insure
that the only persons who may view the Services in any Room shall be registered
Guests of the Hotel and their invitees.
16.6 MEDIA SHALL BE SECURED. The Hotels shall supply a secure location, in
compliance with the Specifications, for the storage of physical media containing
any element of the Services ("Media"), and such storage space shall not be
accessed by or accessible to unauthorized Hotel personnel without the prior
mutual written consent of the parties. There shall be no unauthorized use,
exhibition or viewing of any Media by any person other than on the System
pursuant to the terms of this Agreement. Marriott shall not permit any person
under its control to duplicate or make alterations of any kind to the Media.
Marriott shall promptly report to OCC any violation of this Section as soon as
it becomes aware of such violation.
16.7 SOLE OPERATOR. Marriott warrants and represents that it is the operator or
management company of the Hotels, that it has full legal power and authority to
enter into this Agreement and to perform all of its obligations hereunder,
including, without limitation, the power and authority to bind the Hotels to the
terms hereof and to cause each Hotel to comply herewith, and that the execution
of this Agreement is within Marriott's as operator or management company of the
Hotel. Marriott further warrants and represents that all necessary corporate
action has been taken to authorize Marriott to enter into this Agreement and
perform all of its obligations hereunder and further warrants and represents
that this Agreement has been duly executed and delivered by
19
it and constitutes a valid, legal and binding obligation of Marriott and the
Hotels, jointly and severally, enforceable in accordance with its terms.
16.8 MATV SYSTEM. Marriott warrants that the Hotels own or control the MATV
Systems and that there are no restrictions placed by third parties on their use.
16.9 NO INCOMPATIBLE SYSTEMS. Marriott shall not, and shall not permit the
Hotels or their personnel to, install or allow to be installed any service,
system or equipment for connection to, or that in any way relates to, the System
that it knows to be incompatible with the transmissions or services of the
System, without the prior written consent of OCC.
ARTICLE XVII. INSURANCE
17.1 LIABILITY INSURANCE.
(a) Marriott and/or the relevant Hotel shall obtain and maintain, at
its sole cost and expense, throughout the term of this Agreement, insurance
policies from carriers with an AM Best rating of A-/X or better, that name OCC
as an additional insured thereunder (as its interest may appear for property
insurance purposes, and to the extent of Marriott's indemnity obligations for
commercial general liability purposes). Said policies shall provide commercial
general liability insurance with limits of at least $*** and property insurance
with a limit of at least $*** providing coverage for the perils of fire,
extended coverage and special form. A certificate of insurance evidencing such
insurance shall be delivered to OCC within thirty (30) days of Hotel's receipt
of such certificate of insurance.
(b) OCC shall obtain and maintain, at its sole cost and expense,
throughout the term of this Agreement, insurance policies from carriers with an
AM Best rating of A-/X or better, that name the Hotels and Marriott as an
additional insured thereunder (as their interests may appear for property
insurance purposes, and to the extent of OCC's indemnity obligations for
commercial general liability purposes). Said policies shall provide
comprehensive public liability insurance with limits of at least $*** and
property insurance with a limit of at least $*** providing coverage for the
perils of fire, extended coverage and special form. A certificate of insurance
evidencing such insurance delivered to Marriott within thirty (30) days of OCC's
receipt of such certificate of insurance.
17.2 WORKER'S COMPENSATION. OCC shall maintain, at its sole cost and expense,
worker's compensation insurance within statutory limits, and employer's
liability insurance with a $*** minimum limit, for all its employees,
contractors, agents and representatives that provide any services under the
terms of this Agreement.
ARTICLE XVIII. CONFIDENTIALITY
18.1 CONFIDENTIALITY.
(a) Marriott and its employees and agents have maintained and will
maintain, in confidence, the terms and conditions of this Agreement including
the revenue sharing provisions, as well as all data, summaries, reports or
information of all kinds, whether oral or written, acquired, devised or
developed in any manner by or from OCC personnel or OCC files, and have
20
not and will not reveal the same to any persons not employed by OCC, except:
(i) at the written direction of OCC; (ii) to the extent necessary to comply
with law or order of a court of competent jurisdiction, in which event Marriott
shall so notify OCC as promptly as practicable (and, if possible, prior to
making any disclosure) and in all cases shall cooperate with OCC if OCC should
seek confidential treatment of such information; (iii) to its auditors,
attorneys, and other representatives, provided such auditors, attorneys and
other representatives agree to be bound by the provisions of this Paragraph;
(iv) to the owners of Hotels and to the owners and operators of Marriott
Franchised Hotels as reasonably necessary to describe and promote the Services
and to comply with Marriott's obligations under management and franchise
agreements and under applicable law; and (v) in order to enforce its rights
pursuant to this Agreement.
(b) OCC and its employees and agents have maintained and will maintain,
in confidence, the terms and conditions of this Agreement, as well as all data,
summaries, reports or information of all kinds, whether oral or written,
acquired, devised or developed in any manner by or from Marriott personnel or
Marriott files, and have not and will not reveal the same to any persons not
employed by Marriott, except: (i) at the written direction of Marriott; (ii) to
the extent necessary to comply with law or order of a court of competent
jurisdiction, in which event OCC shall so notify Marriott as promptly as
practicable (and, if possible, prior to making any disclosure) and in all cases
shall cooperate with Marriott if Marriott should seek confidential treatment of
such information; (iii) to its auditors, attorneys, and other representatives,
provided such auditors, attorneys and other representatives agree to be bound by
the provisions of this Paragraph; and (iv) in order to enforce its rights
pursuant to this Agreement..
18.2 EXCEPTIONS. Notwithstanding the foregoing, such confidentiality agreements
of Marriott and OCC shall not apply to (i) information that is or becomes
publicly available through no violation of such party of its obligations under
this Agreement, (ii) information furnished by a third party who to such party's
actual knowledge was not, at the time at which such information was furnished,
under a legal, contractual or fiduciary obligation to the other party to keep
such information confidential, (iii) information that was in the possession of
such party prior to disclosure by the other party, or (iv) information that is
the subject of a subpoena or other document request in litigation or from a
governmental entity, provided that the receiving party shall give the other
party written notice of such requirements prior to disclosure of such
confidential information.
ARTICLE XIX. OWNERSHIP RIGHTS
19.1 ***
19.2 ***
19.3 KNOW-HOW; WORK PRODUCTS. Subject to the confidentiality provisions of this
Agreement, each party retains the right to use its skill and the knowledge,
experience, and know-how, including ideas, concepts, and techniques, whether
developed prior to, independently of, or in the course of performing, receiving,
or using the Services. If the Services generate work products, then to the
extent work products contain OCC Property or Marriott Property, including
derivative works thereof created during performance under this Agreement, each
party shall retain its ownership rights to its property in such work products.
To the extent work products do not
21
contain OCC Property or Marriott Property as described above, ownership rights
shall be as follows:
(a) If the work products were created pursuant to a separate written
agreement between the parties relating to ownership rights, such agreement shall
control.
(b) In the absence of such a separate written agreement,
(i) OCC shall own such work products generated by OCC in the
performance of the Services except as provided in the following paragraph.
Marriott agrees to execute such documents, and otherwise provide such
assistance, as OCC may reasonably request, at OCC's expense, to accomplish the
purposes of this paragraph.
(ii) Marriott will own work products that were custom-created
for delivery to Marriott for Marriott's specific use, provided that OCC shall
have the right to re-use for its own benefit any items from such work products
that (A) are of a generic nature and not customized specifically for Marriott,
and (B) do not contain, and were not created through substantial use of,
Marriott confidential information. OCC hereby assigns all right, title and
interest (including copyright and patent rights) thereto to Marriott. OCC agrees
to execute such documents, and otherwise provide such assistance, as Marriott
may reasonably request, at Marriott's expense, to accomplish the purposes of
this paragraph.
19.4 ***
19.5 ***
22
19.6 PRIVACY. Each party will respect the privacy rights of anyone using the
System and will comply with applicable laws and regulations. The parties will
establish a mutually-agreed privacy policy, including providing appropriate
mutually-agreed privacy notices and "terms of use" agreements to Guests, and
will comply with such policy and agreements. OCC shall not use or process any
data traceable to an individual that OCC obtains through providing the Services
except as necessary to provide (and enforce rights relating to) the Services.
19.7 SAFEGUARDING OF PROPERTY. Each party shall establish and maintain
reasonable safeguards against the destruction, loss, alteration or unauthorized
use of the other party's property in its possession or control, that in any
event are no less rigorous than those used to safeguard its own materials and
property.
ARTICLE XX. DEFAULT; FORCE MAJEURE
20.1 ***
20.2 ***
20.3 ***
20.4 FORCE MAJEURE. "Force Majeure" means circumstances beyond the parties'
reasonable control that prevents a party from performing its obligations under
this Agreement, including, without limitation, any act of God, fire, natural
disaster, accident (other than as a result of the negligence of the party
seeking excuse), act of civil unrest, act of government, or any other cause
reasonably beyond the reasonable control of such party. Neither party will be
deemed to have breached, or be in default of, this Agreement to the extent that
the performance of its obligations or attempts to cure any breach or default are
delayed or prevented by reason of Force Majeure; PROVIDED, HOWEVER, this Section
shall not prevent OCC from terminating any Service or removing the System until
Marriott or the relevant Hotel has cured any breach or default, or come into
compliance with its obligations, under this Agreement.
20.5 INFRINGEMENT INDEMNITY.
(a) Each party shall indemnify, defend and hold harmless the other
party and its officers, directors, employees and affiliates from any and all
losses, costs, damages and expenses (including, without limitation, reasonable
attorneys' fees and settlement costs) relating to, resulting from or arising out
of or in connection with any violation or infringement by any indemnifying party
or its officers directors, employees or affiliates of any intellectual property
rights of any third party (including patent, copyright, trademark, and trade
secret rights).
(b) If the System or any part thereof becomes, or in the opinion of OCC
may become, the subject of any claim, suit or proceeding for violation or
infringement of intellectual property rights of a third party, or in the event
of an adjudication that the System or part thereof constitutes such an
infringement or violation, or if the use, license, lease or sale of the System
or part thereof is enjoined, OCC shall, at its expense and without limiting any
of the other rights Marriott may have hereunder: (1) procure for Marriott the
rights otherwise granted under this Agreement to the System or part thereof, or
(2) replace, modify, or remove the System or part
23
thereof to remedy the infringement or violation. If Marriott determines, in its
sole discretion, that such replacement, modification, or removal will have a
significant negative impact on the overall functioning of the System, Marriott
shall have, in addition to its other rights under this Agreement and without
liability to Marriott, the right to terminate this Agreement on thirty (30) days
prior written notice. Such right to terminate as set forth in this Section shall
only apply if such negative impact is not due to Force Majeure.
20.6 OCC INDEMNITY. OCC shall indemnify, defend and hold harmless Marriott and
the Hotel owners and their respective officers, directors, employees and
affiliates from any and all losses, costs, damages and expenses (including,
without limitation, reasonable attorneys' fees and settlement costs) relating
to, resulting from or arising out of or in connection with any claim by a Guest
regarding the System, or any third party claim arising from the actual or
alleged breach by OCC of provisions set forth in this Agreement, except to the
extent arising from Marriott's or the Hotel owner's negligence, willful
misconduct, or breach of this Agreement.
20.7 MUTUAL INDEMNITY. Each party shall indemnify, defend and hold harmless the
other party and its officers, directors, employees and affiliates from any and
all losses, costs, damages and expenses (including, without limitation,
reasonable attorneys' fees and settlement costs) relating to, resulting from or
arising out of or in connection with any of the following: (i) the death or
bodily injury of any agent, employee, customer, business invitee, or business
visitor or other person caused by the tortious conduct of the indemnitor; (ii)
the damage, loss or destruction of any real or tangible personal property caused
by the tortious conduct of the indemnitor; and (iii) any claim, demand, charge,
action, cause of action, or other proceeding asserted against the indemnitee but
resulting from an act or omission of the indemnitor in its capacity as an
employer of a person.
20.8 INDEMNITY FOR CONTENT. All regulations or laws pertaining to censorship,
importation, public performance, distribution or display of text, images, video,
sound, music, motion pictures, photographs, and other content via the Services
(except for content specifically provided by Marriott) as an in-hotel service or
in general shall be complied with by OCC, and OCC shall be solely responsible on
a continuing basis to secure at OCC's expense any and all permits and approvals
respecting such content, copyrights, distribution rights, music rights,
releases, and any other approvals as may be necessary for the purposes of this
Agreement. OCC agrees to indemnify, defend and hold harmless Marriott, Hotel
owners, and their respective officers, directors, employees, agents, successors,
and assigns, from and against any and all losses, costs, damages and expenses
(including, without limitation, reasonable attorneys' fees and settlement costs)
relating to, resulting from or arising out of or in connection with any failure
of OCC to comply with the foregoing.
20.9 INDEMNIFICATION PROCEDURES. The parties shall follow the procedures set
forth below in seeking indemnification under this Agreement.
(a) Promptly after receipt by any entity entitled to indemnification
under this Agreement of notice of the commencement or threatened commencement of
any civil, criminal, administrative, or investigative action or proceeding
involving a claim in respect of which the indemnitee will seek indemnification,
the indemnitee shall notify the indemnitor of such claim in writing. No failure
to so notify an indemnitor shall relieve it of its obligations under this
24
Agreement except to the extent that it can demonstrate damages attributable to
such failure. Within fifteen (15) days following receipt of written notice from
the indemnitee relating to any claim, but no later than ten (10) days before the
date on which any response to a complaint or summons is due, the indemnitor
shall notify the indemnitee in writing if the indemnitor elects to assume
control of the defense and settlement of that claim (a "Notice of Election").
(b) If the indemnitor delivers a Notice of Election relating to any
claim within the required notice period, the indemnitor shall be entitled to
have sole control over the defense and settlement of such claim; provided that
(a) the indemnitee shall be entitled to participate in the defense of such claim
and to employ counsel at its own expense to assist in the handling of such
claim, and (b) the indemnitor shall obtain the prior written approval of the
indemnitee before entering into any settlement of such claim or ceasing to
defend against such claim. After the indemnitor has delivered a Notice of
Election relating to any claim in accordance with this Section, the indemnitor
shall not be liable to the indemnitee for any legal expenses incurred by the
indemnitee in connection with the defense of that claim. In addition, the
indemnitor shall not be required to indemnify the indemnitee for any amount paid
or payable by the indemnitee in the settlement of any claim for which the
indemnitor has delivered a timely Notice of Election if such amount was agreed
to without the written consent of the indemnitor.
(c) If the indemnitor does not deliver a Notice of Election relating to
any claim within the required notice period, the indemnitee shall have the right
to defend the claim in such manner as it may deem appropriate, at the cost and
expense of the indemnitor. The indemnitor shall promptly reimburse the
indemnitee for all such costs and expenses.
ARTICLE XXI. WARRANTIES; DISCLAIMER; LIMITATION OF LIABILITY
21.1 WARRANTIES. OCC represents and warrants that the Services (including the
System) will be provided as described in this Agreement, and that it will
perform its responsibilities in a professional, workmanlike manner, through use
of reasonable care, in compliance with applicable laws, ordinances, codes, and
regulations, and without infringement or violation of the intellectual property
rights of third parties (including patent, copyright, trademark, and trade
secret rights). OCC further warrants and represents that all necessary corporate
action has been taken to authorize OCC to enter into this Agreement and perform
all of its obligations hereunder and further warrants and represents that this
Agreement has been duly executed and delivered by it and constitutes a valid,
legal and binding obligation of OCC, enforceable in accordance with its terms.
21.2 DISCLAIMER OF OTHER WARRANTIES. Marriott recognizes that this Agreement is
for OCC's provision of the Services described herein and that no part of the
System is being sold, rented or leased to the Hotel; THEREFORE, EXCEPT AS
OTHERWISE PROVIDED EXPRESSLY IN THIS AGREEMENT, OCC MAKES NO WARRANTIES, EITHER
EXPRESS OR IMPLIED, WITH RESPECT TO THE SYSTEM OR THE SERVICES, INCLUDING,
WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
21.3 LIMITATION OF LIABILITY. EACH PARTY HERETO EXPRESSLY DISCLAIMS AND SHALL
NOT BE LIABLE TO THE OTHER PARTY FOR ANY LIABILITIES OR
25
OBLIGATIONS FOR INCIDENTAL, SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES
OF ANY NATURE OR LOST PROFITS (EXCEPT THOSE PERTAINING TO REVENUES UNDER THIS
AGREEMENT), WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT
(INCLUDING THE BREACH OF THIS AGREEMENT OR ANY TERMINATION OF THIS AGREEMENT),
TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF SUCH LOSS
WAS FORESEEABLE OR THE OTHER PARTY HAS BEEN WARNED OF THE POSSIBILITY OF ANY
SUCH LOSS OR DAMAGE OCCURRING OUT OF OR IN CONNECTION WITH THE USE OR
PERFORMANCE OF THE SYSTEM, THE PROVISION OF THE SERVICES, OR OTHERWISE IN
CONNECTION WITH THIS AGREEMENT. ***
ARTICLE XXII. GENERAL TERMS
22.1 PUBLICITY. Neither party will use the name or trademarks, whether
registered or not, of the other party or its affiliates, in any marketing or
publicity related communication to a third party (e.g., press release,
advertisement, marketing collateral, marketing proposal, or customer list),
without prior written consent of the other party. In the case of Marriott, such
consent must be obtained from the Executive Vice President, Corporate
Communications.
22.2 CHOICE OF LAWS. This Agreement will be governed by and interpreted in
accordance with the substantive laws of the State of
New York.
22.3 ARBITRATION. The parties agrees that any dispute or controversy arising out
of or relating to the interpretation, construction, performance or breach of
this Agreement that cannot be amicably resolved after good faith discussions
shall be resolved by arbitration in accordance with this Section. The
arbitration shall be held before a single arbitrator selected by the parties or,
if the parties are unable to agree, by the American Arbitration Association
("AAA"), in accordance with the then current rules for arbitration of commercial
disputes of the AAA. Unless the applicable parties otherwise agree in a
particular instance, the arbitration shall be held in
New York,
New York.
Discovery, if permitted by the arbitrator, shall be conducted in accordance with
the Federal Rules of Civil Procedure, except that (1) there shall be no more
than ten interrogatories (including subparts) per party, (2) document discovery
shall be limited to documents directly relevant to the matter at issue, (3) each
party shall be entitled to take no more than five depositions upon oral
examination, which in the aggregate shall take no more than five business days,
and (4) there shall be no requests to admit. The arbitrator shall schedule the
arbitration to be completed no later than six months after initiation of the
proceeding, and the parties shall use good faith efforts to comply with this
schedule.
(a) The decision of the arbitrator shall be in writing and shall
specify reasons for the decision. Judgment upon the arbitral award may be
confirmed by any court having jurisdiction over the party against which
enforcement is sought.
(b) The arbitrator shall have no power to award punitive damages even
if permitted to do so under applicable law.
26
(c) Any party may seek injunctive or other equitable relief to prevent
any breach or threatened breach of another party's obligations which would cause
irreparable harm, or to preserve the jurisdiction of the arbitrator.
22.4 ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.
(a) Except as specifically provided in this Section, neither party may
assign or delegate its rights or obligations under this Agreement without the
written consent of the other party, not to be unreasonably withheld.
(b) Marriott may assign this Agreement without the consent of OCC (i)
to any corporate affiliate of Marriott provided Marriott remains liable
hereunder, (ii) upon a merger or consolidation involving Marriott, a sale of all
or a major part of Marriott's assets, or a sale of all or a major part of the
assets of a line of business in which the Services are used (including the sale
of a Covered Brand). Upon an assignment under clause (ii) above, the assignee
shall assume in writing the obligations under this Agreement, in which event
Marriott shall be released from further liability hereunder except for
liabilities accrued prior to assignment.
(c) OCC shall be deemed to have assigned this Agreement with Marriott's
consent to an entity if such entity acquires ownership or effective control of
OCC, provided, however, that such an assignment shall require Marriott's consent
if such an entity is a direct competitor of Marriott; if Marriott refuses such
consent and OCC nonetheless desires to so assign this Agreement, Marriott's sole
and exclusive remedy shall be to terminate this Agreement without further
liability hereunder except for satisfaction of payment obligations incurred
prior to termination.
(d) In the event that any Hotel is sold to a new owner or is no longer
managed by Marriott, the rights, obligations, terms and conditions of this
Agreement shall remain in full force and effect and a permitted assignment of
this Agreement shall be deemed to have occurred; provided, however,
notwithstanding any such deemed assignment, Marriott shall not be released from
and shall retain responsibility for any obligations or payments due to OCC which
were incurred or arose prior to the effective date of any such sale or change in
management company. The provisions of Section 4.6 (Departing Hotels) shall
govern assignments under the preceding sentence.
22.5 MODIFICATION OF AGREEMENT. This Agreement may not be modified or amended
except by a written non-electronic agreement signed by OCC and Marriott with a
non-electronic signature, and each party is hereby put on notice that any
representative of a party purporting to otherwise modify or amend this Agreement
shall not have the authority to do so.
22.6 WAIVERS. No waivers by either party of any breach or default hereunder
shall be construed as a waiver of any precedent or subsequent breach or default.
The observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively) by the party
entitled to enforce such term, but any such waiver shall be effective only if in
writing signed by the party against which such waiver is to be asserted and only
in the specific instance and for the specific purpose for which given. Except as
27
otherwise provided herein, no failure or delay of any party in exercising any
power or right under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.
22.7 SEVERABILITY. If a provision of this Agreement is deemed prohibited by
applicable law, such prohibition shall not invalidate the remaining provisions
of this Agreement.
22.8 U.S. DOLLARS. All references to "dollars' or the "$" sign refer to U.S.
currency.
22.9 RELATIONSHIP OF THE PARTIES. Nothing contained herein shall be deemed to
create a relationship of joint venture, partnership, associates, principal and
agent or joint owners in any manner with respect to the Hotel, and nothing in
this Agreement creates a partnership, joint venture, franchise, agency or any
similar relationship and neither party shall hold itself out to the contrary.
22.10 COOPERATION. Each party hereto agrees to cooperate with the other party
hereto to effect the transactions contemplated by this Agreement. In addition,
Marriott agrees to cooperate with and hereby grant permission to OCC to sign on
their behalf any relevant documents (e.g. U.C.C.-Secured Transaction Form) for
the purpose of protecting OCC's interests in its personal property on the
premises of the Hotel.
22.11 LICENSES. Marriott acknowledges that OCC distributes private programming
under licenses from other parties, which parties own copyrights to or have
licenses from the copyright owners of programs distributed pursuant to this
Agreement, and, as a result, the programming signals distributed pursuant to
this Agreement are private and the distribution thereof is limited to the use
for which they are licensed. The provision of the Services is licensed for and
limited to the uses described in this Agreement.
22.12 NOTICES. Any notice under this Agreement shall be in writing and shall be
delivered by personal service or by United States of America certified or
registered mail, with postage prepaid, or by such other overnight courier
delivery service. Notice shall be forwarded to the individuals at the addresses
specified below. Facsimile numbers are provided as a convenience to the parties
only and all facsimile transmissions of any notice must be acknowledged in
writing by the recipient thereof, or followed up by one of the approved methods
to send notice set forth above.
28
IF TO OCC: IF TO MARRIOTT:
On Command Video Corporation Marriott International, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: SVP-Sales Attn: Senior Vice President, Rooms
Operations
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO: WITH A COPY TO:
[same address as above] [same address and facsimile as above]
Attn: General Counsel Attn: Assistant General Counsel, U.S. Lodging
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Operations, 52-923
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
22.13 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and merges
and supersedes all prior discussions and understandings between the parties
related thereto, whether written or oral.
22.14 PARAGRAPH HEADINGS AND INSTRUCTIONS. Paragraph headings have been inserted
for convenience only and shall not affect the construction or interpretation of
this Agreement.
22.15 EFFECTIVE DATE. This Agreement is effective as of the date first written
above, except for those provisions that shall not take effect until the Hotel
Commencement Date.
22.16 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which will together
constitute one and the same Agreement.
ON COMMAND CORPORATION MARRIOTT INTERNATIONAL, INC, ON BEHALF OF
ITSELF AND ITS AFFILIATES
By: By:
------------------------- ----------------------------
Name: Name:
Title: Title:
Date: Date:
29
ARTICLE XXIII. APPENDIX
DEFINITIONS
1. "ACCESS RECORD" shall have the meaning given in Section 8.5.
2. "ADJUSTED PAY-PER-USAGE SERVICE FEES" means the Pay-Per-Usage Service
Fees charged to the Guests by the Hotel, after giving effect to any
Adjustments permitted under this Agreement.
3. "ADJUSTMENT" shall have the meaning given in Section 8.9.
4. "AGREEMENT TERM" shall have the meaning given in Section 2.1.
5. "BROADCAST LINEUPS" shall have the meaning given in Section 9.4.
6. "BROADCAST PROGRAMMING SERVICES" shall have the meaning given in
Section 9.3.
7. "CABLE LINEUPS" shall have the meaning given in Section 9.2.
8. "CABLE PROGRAMMING SERVICES" shall have the meaning given in Section 9.2.
9. "COMPETING SERVICE" means ***
10. "CONTROL DEVICES" shall have the meaning given in Section 13.4.
11. "COVERED BRAND(S)" means one or more of the following brands owned by
Marriott as of the Effective Date: Marriott Hotels, Resorts and Suites
(including Marriott Conference Centers with 140 Rooms or more)
("MHRS"), Renaissance Hotels and Resorts ("Renaissance"), Courtyard by
Marriott, Residence Inn by Marriott, Fairfield Inn & Suites by
Marriott, TownePlace Suites by Marriott, SpringHill Suites by Marriott
and Marriott Conference Centers with fewer than 140 Rooms. A new brand
may be added as a Covered Brand pursuant to Section 4.3.
12. "DIRECT PROGRAMMING COSTS" shall have the meaning given in Section 9.2.
13. "EXISTING HOTELS" shall mean Hotels that are managed or owned by
Marriott as of the Effective Date.
14. "EXISTING OCC AGREEMENT" shall have the meaning given in Section 4.2.
15. "FORCE MAJEURE" shall have the meaning given in Section 20.4.
16. "FREE-TO-GUEST SERVICES" shall have the meaning given in Section 9.1.
17. "GENERATION III PLATFORM" shall mean the System's technology platform
as described in Exhibit H-1 attached hereto. including digital content
servers for movies, games and music, an integrated network, field
upgrade capability, and appropriate security and privacy features.
18. "GUESTS" shall mean the guests of the Hotels.
19. "HOTEL(S)" shall mean the hotels that are operated under a Covered
Brand, within the Territory, and that are managed or owned by Marriott.
***
20. "HOTEL COMMENCEMENT DATE" shall have the meaning given in Section 2.2
21. "HOTEL FACILITIES" shall have the meaning given in Section 12.1.
30
22. "HOTEL INSTALLED PROPERTY" shall have the meaning given in the
definition of System.
23. "HOTEL PMS" shall have the meaning given in Section 8.4.
24. "HOTEL REVENUE SHARE" means the percent share of total monthly Adjusted
Pay-Per-Usage Service Fees to be retained by Hotel after the payment of
the OCC Revenue Share.
25. ***
26. "HOTEL TERM" shall have the meaning given in Section 2.2.
27. "HOTEL TERMINATION DATE" shall have the meaning given in Section 2.2.
28. "INAPPROPRIATE CONTENT" shall have the meaning given in Section 8.3.
29. "INSPECTION" shall have the meaning given in Section 8.12.
30. "INTERNET TV PORTAL" shall have the meaning given in Section 8.1.
31. "IN-ROOM ELECTRONIC SERVICES" shall mean Pay-Per-Usage Services and
Free-To-Guest Services provided in Rooms to Guests.
32. "KEYBOARDS" shall have the meaning given in Section 13.5.
33. "MARRIOTT FRANCHISED HOTELS" shall have the meaning given in Section 4.4.
34. "MARRIOTT PROPERTY" shall have the meaning given in Section 19.2.
35. "MATV SYSTEM" shall mean the network of cables, wall taps, antennas and
specially designed radio frequency signal processing components, which
receive, process, amplify and distribute video and audio TV and FM
signals from a central location to a multiplicity of TVs within the
Hotel.
36. "MONITORING UNIT" means an instrument provided, installed and
maintained by OCC at OCC's sole expense pursuant to the terms of this
Agreement that monitors the use of the System by individual Guests and
determines the Pay-Per-Usage Service Fees due and payable by each
particular Guest.
37. ***
38. "NEW HOTELS" shall mean hotels that become "Hotels" after the Effective
Date (i.e., Hotels that are not Existing Hotels).
39. "OCC PROPERTY" shall have the meaning given in Section 19.1.
40. "OCC REVENUE SHARE" shall have the meaning given in Section 8.6.
41. "PAY-PER-USAGE SERVICE FEES" means the fees charged to the Guests for
use of the Pay-Per-Usage Services.
42. "PAY-PER-USAGE SERVICES" shall have the meaning given in Section 8.1.
43. "PILOT HOTELS" shall have the meaning given in Section 3.1.
44. "PREEXISTING COMPETITIVE COMMITMENTS" shall have the meaning given in
Section 2.4.
45. "PROTECTED CHANNELS" shall have the meaning given in Section 9.2.
46. "RATED MOVIES" shall have the meaning given in Section 8.1.
47. "RETROACTIVE SYSTEM UPGRADE" shall have the meaning given in Section 6.2.
31
48. "ROOM" means a separate, private, individually keyed room or suite of
rooms in a Hotel, which is customarily available for an overnight
sleeping accommodation for Guests.
49. "SELECT SERVICE BRANDS" means one or more of the following Covered
Brands: Residence Inn by Marriott, Fairfield Inn & Suites by Marriott,
TownePlace Suites by Marriott, SpringHill Suites by Marriott and
Marriott Conference Centers with fewer than 140 Rooms . A new brand may
be added as a Select Service Brand pursuant to Section 4.3.
50. "SELECT SERVICE HOTELS" means hotels operated under a Select Service
Brand.
51. "SERVICES" means, collectively, the Pay-Per-Usage Services, the
Free-to-Guest Services, and the other services and responsibilities
described in this Agreement.
52. "SPECIFICATIONS" shall have the meaning given in Section 12.1.
53. "STSN" means Suite Technology System Networks, Inc., a Delaware
corporation.
54. "STSN INTERNET ACCESS SYSTEM" means the system provided by STSN to
provide Guests in Hotels with access to the Internet from Guest
computers, which is installed or which is to be installed in Hotels
pursuant to separate agreements between Marriott and STSN, including
any successor system and any modifications and enhancements thereof.
55. "SYSTEM" means an in-room electronic entertainment, information and
business service technology platform which consists of hardware and
software *** to enable Guests to access the Services in each Room of
the Hotel and to provide the Services described herein. *** For
purposes of clarification, the System does not include the Hotel
Facilities, the MATV System, the STSN Internet Access System, or
Virtual Personal Concierge.
56. "SYSTEM TV" means a television receiving set supplied by the Hotel and
connected to the System that (i) has a "smart plug" or "smart card" or
(ii) is otherwise compatible with the System.
57. "SYSTEM UPGRADES" shall have the meaning given in Section 6.2.
58. "TERMINATION CHARGE" shall have the meaning given in Section 20.3.
59. "TERRITORY" shall mean the United States (including Puerto Rico but not
any other territory or possession of the United States), Mexico and
Canada.
60. "UPGRADE EXCESS COSTS" shall have the meaning given in Section 6.2.
61. "VIRTUAL PERSONAL CONCIERGE" means an integrated, on-line service
developed, owned and maintained by or on behalf of Marriott that may be
provided to guests through the System and the System TV, and/or the
STSN Internet Access System, ▇▇▇▇▇▇▇▇.▇▇▇, personal computers and other
access points, which may from time to time include providing
concierge-style information and services to guests relating to goods
and services outside the Hotel room, including travel, entertainment,
dining, sightseeing, shopping, weather, and other such goods and
services outside the Hotel; provided, however, that Virtual Personal
Concierge shall not include entertainment delivery systems. Virtual
Personal Concierge is not a part of the System. In the event that a
guest accesses Virtual Personal Concierge through the links on the
Internet TV Portal that are described in Section 8.1(c) and makes a
purchase of goods or services, and OCC is also
32
offering such goods or services through the Internet TV Portal, any
transaction fees or commissions derived by Virtual Personal Concierge
from the sale of such goods or services (for avoidance of doubt,
excluding reservations at Marriott hotels) shall be treated as
Additional Revenue under Section 8.7.
33
EXHIBIT A
INSTALLATION PRIORITY
(SECTION 5.2)
***
34
EXHIBIT B
PAY-PER-USAGE SERVICE FEE
(SECTION 8.4)
35
EXHIBIT C
REVENUE SHARING
(SECTION 8.6)
***
36
EXHIBIT D
TAX SUMMARY
(SECTION 8.6)
-------------------------------------------------------------------------------------------------------------------------------
STATE STATE TAXING MOVIE/PPV/ ENTITY RESPONSIBLE FOR TAX TAX TYPE/RATE
ABBREV JURISDICTION GAMES TAXABLE (NOTE 1)
-------------------------------------------------------------------------------------------------------------------------------
AL Alabama N
-------------------------------------------------------------------------------------------------------------------------------
AK Alaska N
-------------------------------------------------------------------------------------------------------------------------------
AZ Arizona Y ONCOMMAND responsible for remitting tax Trans. Privilege/Var.
-------------------------------------------------------------------------------------------------------------------------------
AR Arkansas Y ONCOMMAND responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
CA California N
-------------------------------------------------------------------------------------------------------------------------------
CO Colorado Y Hotel responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
CT Connecticut Y Hotel responsible for remitting tax Occupancy/Var.
-------------------------------------------------------------------------------------------------------------------------------
DC District of Y ONCOMMAND responsible for remitting tax G/R & Sales
Columbia
-------------------------------------------------------------------------------------------------------------------------------
DE Delaware N
-------------------------------------------------------------------------------------------------------------------------------
FL Florida Y Hotel responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
GA Georgia Y Hotel and OCC responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
HI Hawaii Y ONCOMMAND responsible for remitting tax Excise
-------------------------------------------------------------------------------------------------------------------------------
IL Illinois N
-------------------------------------------------------------------------------------------------------------------------------
ID Idaho N
-------------------------------------------------------------------------------------------------------------------------------
IN Indiana Y ONCOMMAND responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
IA Iowa Y ONCOMMAND responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
KS Kansas Y Hotel responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
KY Kentucky N
-------------------------------------------------------------------------------------------------------------------------------
LA Louisiana N
-------------------------------------------------------------------------------------------------------------------------------
ME Maine N
-------------------------------------------------------------------------------------------------------------------------------
MD Maryland Y Hotel responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
MA Massachusetts N
-------------------------------------------------------------------------------------------------------------------------------
37
-------------------------------------------------------------------------------------------------------------------------------
STATE STATE TAXING MOVIE/PPV/ ENTITY RESPONSIBLE FOR TAX TAX TYPE/RATE
ABBREV JURISDICTION GAMES TAXABLE (NOTE 1)
-------------------------------------------------------------------------------------------------------------------------------
MI Michigan N
-------------------------------------------------------------------------------------------------------------------------------
MN Minnesota Y ONCOMMAND responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
MS Mississippi Y Hotel responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
MO Missouri Y Hotel responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
MT Montana N
-------------------------------------------------------------------------------------------------------------------------------
NE Nebraska Y ONCOMMAND responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
NV Nevada N
-------------------------------------------------------------------------------------------------------------------------------
NH New Hampshire N
-------------------------------------------------------------------------------------------------------------------------------
NJ New Jersey Y ONCOMMAND responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
NM New Mexico Y ONCOMMAND responsible for remitting tax Gr. Receipt/Var.
-------------------------------------------------------------------------------------------------------------------------------
NY New York Y Hotel responsible for remitting tax Occupancy/Var.
-------------------------------------------------------------------------------------------------------------------------------
NC North Carolina N
-------------------------------------------------------------------------------------------------------------------------------
ND North Dakota Y ONCOMMAND responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
OH Ohio N
-------------------------------------------------------------------------------------------------------------------------------
OK Oklahoma N
-------------------------------------------------------------------------------------------------------------------------------
OR Oregon N
-------------------------------------------------------------------------------------------------------------------------------
PA Pennsylvania Y Hotel responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
RI Rhode Island Y ONCOMMAND responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
SC South Carolina Y Hotel responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
SD South Dakota Y ONCOMMAND responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
TN Tennessee Y Hotel responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
TX Texas Y ONCOMMAND responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
UT Utah Y Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
VT Vermont Y ONCOMMAND responsible for remitting tax Amusement/Var.
-------------------------------------------------------------------------------------------------------------------------------
38
-------------------------------------------------------------------------------------------------------------------------------
STATE STATE TAXING MOVIE/PPV/ ENTITY RESPONSIBLE FOR TAX TAX TYPE/RATE
ABBREV JURISDICTION GAMES TAXABLE (NOTE 1)
-------------------------------------------------------------------------------------------------------------------------------
VA Virginia Y Hotel responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
WA Washington Y ONCOMMAND responsible for remitting tax Bus & Occp./Var.
-------------------------------------------------------------------------------------------------------------------------------
WV West Virginia N
-------------------------------------------------------------------------------------------------------------------------------
WI Wisconsin Y ONCOMMAND responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
WY Wyoming Y ONCOMMAND responsible for remitting tax Sales/Var.
-------------------------------------------------------------------------------------------------------------------------------
NOTE 1: TAX RATES WILL VARY BASED ON LOCATION OF PROPERTY.
39
EXHIBIT E-1
BASIC CABLE CHANNEL LINEUP
(SECTION 9.2)
***
40
EXHIBIT E-2
OPTIONAL EXPANDED CABLE LINEUP
(SECTION 9.2)
***
41
EXHIBIT E-3
BROADCAST LINEUP
(SECTION 9.3)
ABC
CBS
NBC
FOX
PBS, where available as an "off air" station
UPN, where available as an "off air" station
WB,, where available as an "off air" station.
42
EXHIBIT F
DELIBERATELY LEFT BLANK
43
EXHIBIT G
TERMINATION CHARGES
(SECTION 20.3)
***
44
EXHIBIT H
GENERATION III PLATFORM
(APPENDIX)
***
45
EXHIBIT I
BUNDLED PRICING FOR PILOT HOTELS
(SECTION 8.13)
***
46