Sample Business Contracts


Master License Agreement [Amendment No. 1] - Hilton Hotels Corp. and CAIS Inc.


                  First Amendment to Master License Agreement
                  -------------------------------------------

For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Master License Agreement, dated December 23, 1998 (the
"Master Agreement"), between Hilton Hotels Corporation ("Hilton" or "Licensor")
and CAIS, Inc. ("CAIS" or "Licensee") is hereby amended by this First Amendment
to Master License Agreement dated as of this 23 day of April, 1999 between
Hilton, CAIS, Inc. and CAIS Internet, Inc. (the "First Amendment") as follows:

1. As a clarification of the discrete rights and authority of Hilton Hotels
Corporation as distinct from individual hotels that sign a Participating Hilton
Hotels Site Acknowledgement Rider (a "Participating Hotel"), it is understood
that a Participating Hotel is party to the Master Agreement only as to the
rights and obligations specific to the use of the Licensed Area within that
hotel.

     A Participating Hotel, in the capacity of Licensor under a Participating
Hilton Hotels Site Acknowledgement Rider (a "Rider"), has no authority to agree
to install a greater number of Guest Rooms than the minimum (defined below in
paragraph 10(b)), exercise options, amend the Master Agreement or bind Hilton
Hotels Corporation or the Participating Hotel in any manner affecting the terms
and conditions of the Master Agreement.  Any such agreement between Licensee and
a Participating Hotel shall be null and void, unless approved by Hilton Hotels
Corporation in the manner described in the Master Agreement.  All references to
"Hilton" or "Licensor" in this First Amendment refer exclusively to Hilton
Hotels Corporation.

2. Hilton Equity. (a) As an additional contribution by CAIS in support of
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Hilton's marketing of the Service, CAIS Internet, Inc. has agreed to grant
warrants to Hilton to purchase 66,667 shares of the common stock of CAIS
Internet, Inc., at an exercise price of $0.01 per share.  If the initial public
offering price of the CAIS Internet, Inc. common stock is less than $15.00 per
share, Hilton shall be entitled to receive warrants for additional shares of
CAIS Internet, Inc.'s common stock in an amount which, when added, to the number
of warrants representing the initial 66,667 shares and multiplied by the IPO
price will have a market value of at least $1 million.  The terms and conditions
of the warrants will be set forth in a warrant certificate and related
agreements to be executed by the parties.

     (b) (i) Commencing upon the six month anniversary of CAIS Internet, Inc.'s
planned initial public offering, Hilton shall be entitled to certain
registration rights with respect to shares of common stock of CAIS Internet,
Inc. received by Hilton upon the exercise of the warrants.  Such registration
rights, and such other customary terms and conditions, shall be included in a
warrant registration rights agreement between Hilton and CAIS Internet, Inc.
that Hilton and CAIS Internet, Inc. shall execute concurrently herewith.

     (ii) Commencing upon the effective date of an initial public offering of
the common stock of CAIS Internet, Inc., Hilton shall have a "put" option to
sell all of its warrants, or if exercised, shares of common stock of CAIS
Internet, Inc. (those resulting from the exercise of the above-mentioned
warrants) back to CAIS or CAIS Internet, Inc. and CAIS or CAIS Internet Inc.
shall be required to purchase such securities from Hilton at a price for each
share or each share into which the warrants are then exercisable, equal to the
initial public offering share price.  The "put" option shall have an expiration
date ninety (90) days following the 

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earlier of: (1) the effective date of the first registration statement that
includes any Registrable Securities (as such term is defined in the warrant
agreement of even date herewith between CAIS Internet, Inc. and Hilton) for
resale and (2) the date on which Hilton may sell all of the Warrant Shares (as
such term is defined in the warrant agreement of even date herewith between CAIS
Internet, Inc. and Hilton) within a three-month period pursuant to U.S.
Securities and Exchange Commission Rule 144.

     (c)  If an initial public offering of CAIS Internet, Inc. does not occur on
or before November 1, 1999, Hilton at its option by written notice to CAIS or
CAIS Internet, Inc., shall be entitled to rescind the provisions of this First
Amendment (i) providing for a fixed term for all hotels expiring on December 31,
2004 (as outlined in paragraphs 2 through 6 below) and (ii) providing certain
exclusive rights to CAIS (as outlined in paragraph 9 below). In such event,
Hilton shall retain its warrants or shares of common stock in CAIS Internet,
Inc. without further obligation to CAIS.

2A. Paragraph 1(c) of the Master Agreement is amended by deleting it in its
entirety and substituting the following:

     c. At each of the Participating Hotels, Licensee shall install the Service
     in all Meeting Rooms (defined as all public function rooms including but
     not limited to meeting rooms, board rooms, training rooms, reception rooms,
     banquet rooms and all other such general purpose rooms for hotel use) and
     (a) where the Participating Hotel has 400 or greater Guest Rooms, in either
     200 Guest Rooms or in such greater number of Guest Rooms as may be mutually
     agreed upon by Licensor and Licensee, or (b) where the Participating Hotel
     has fewer than 400 Guest Rooms, in either 50% of the Guest Rooms or in such
     greater number of Guest Rooms as may be mutually agreed upon by Licensor
     and Licensee.

3. Paragraph 3a of the Master Agreement is amended by deleting it in its
entirety and substituting the following:

     a.  For each  of the Participating Hotels (those hotels listed in Schedule
     1 as updated by Licensor that execute a Rider) the Term shall be five (5)
     years. The commencement and termination dates for the individual Hotels are
     defined in the Rider(s).  Notwithstanding the foregoing, the Terms shall
     expire no later than December 31, 2004.

4. Paragraph 3b of the Master Agreement is amended by deleting it in its
entirety and substituting the following:

     b.   Hilton Hotels Corporation must specifically and individually approve
     the extension of the December 31, 2004 date as defined above in
     subparagraph 3a in the event Licensee and individual Hotels are planning to
     execute the Rider(s) after December 31, 1999.


5. Paragraph 3c of the Master Agreement is amended by deleting it in its
entirety.

6. Paragraph 2 of the Rider to the Master Agreement is amended by deleting
references to "Initial Term" and "Option".

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<PAGE>
 
7.  Paragraphs 2, 3, 4, and 5 of the Option Addendum to the Master Agreement are
amended by deleting each such paragraph in its entirety.

8. Installation Dates.  CAIS shall complete installation in hotels that sign a
   ------------------                                                         
Rider under the Master Agreement, and that are available for installation as
scheduled by CAIS following execution of their respective Rider, as set forth
below:

     (i) 50% of all hotels that have signed a Rider by April 15, 1999 shall be
installed on or before *; then,

     (ii) 97% of the balance of hotels that signed a Rider by April 15, 1999
shall be installed by *; and,

     (iii) 95% of all hotels that signed a Rider by June 30, 1999 shall be
installed by *.

9. Fees.
   ---- 

     (a) Usage Fee. Paragraph 4b(i) of the Master Agreement is amended by
         -----------                                                     
deleting it in its entirety and substituting the following:

          (i)(a) Based upon daily information reported by the Service monitoring
     equipment (provided and installed by Licensee at no cost to Licensor) the
     Hotels shall charge Guests on a per-use or other basis for access to the
     System an amount (the "Usage Fee") based on a pricing schedule mutually
     agreed to by Licensee and Licensor and defined in the Riders.  (b)   In
     addition, Licensor and Licensee agree: (1) that the start-up screen for
     Guests at Participating Hotels shall be in a format approved by Licensor,
     provided that such start-up screen shall reference Licensee and its
     OverVoice technology as the provider of the Service at the hotel: (2) that
     Licensor and Licensee shall work together to develop content and other
     opportunities related to the screen page accessed by Guests immediately
     following the start-up screen page, subject to Licensor's approval; (3)
     that the parties contemplate that Licensee shall develop, subject to
     Licensor's approval, revenue opportunities from use of the Service by
     Guests at the Participating Hotels related to the following: (A) pass-along
     fees from links to third party sites; (B) fees for providing streaming
     video to Guests; (C) fees for providing streaming audio to Guests; and (D)
     fees for user/visitor information provided on an anonymous basis, with the
     revenue share to the Participating Hotel to be no less favorable than the
     allocation to the Participating Hotels of Guest Room Usage Fees provided
     for in the table following paragraph 9(b) below; and (4) that the parties
     agree that once a Guest links to the hilton.com web site, the provisions of
     this paragraph 9(a)(i)(b) are not applicable.

     (b) Usage Fee Share. Schedule A to the Rider is amended so that the
         ---------------                                                
Participating Hotel's Guest Room Usage Fee Share during certain years of the
Term (as shown in the chart below) shall be subject to increase as follows. In
the event the Average Gross Revenue at a Participating Hotel (defined as (i) the
gross Guest Room Usage Fees from all Service-installed Guest Rooms at such
Participating Hotel divided by (ii) the minimum number of Service-installed
Guest Rooms at such hotel, as defined in paragraph 10(b) below) exceeds $*.00
per Service-installed Guest Room during each such year, then the percentage rate
shall increase 

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*Confidential Treatment Requested. The redacted material has been separately 
 filed with the Commission.
<PAGE>
 
during the balance of each such year to the increased percentage rates listed in
parentheses as shown below (with the balance of the Usage Fees allocated to
Licensee). The Participating Hotels' Usage Fee Shares listed on the four
respective Schedule A's are so amended.



---------------------------------------------------------------------------------------------------------------
Number of Guest   Hotel Share        Hotel Share        Hotel Share        Hotel Share        Hotel Share
Rooms             Year 1             Year 2             Year 3             Year 4             Year 5
---------------------------------------------------------------------------------------------------------------
                                                                               
    1,000 +       *% (*%)              *% (*%)              *%                  *%                  *%
---------------------------------------------------------------------------------------------------------------
    500 - 999     *% (*%)              *% (*%)              *%                  *%                  *%
---------------------------------------------------------------------------------------------------------------
    300 - 499     *% (*%)              *% (*%)              *% (*%)             *%                  *%
---------------------------------------------------------------------------------------------------------------
    1 - 299       *% (*%)              *% (*%)              *% (*%)             *%                  *%
---------------------------------------------------------------------------------------------------------------


     (c)  Market Rate.  As a clarification of Paragraph 4(ix) of the Master
          -----------                                                      
Agreement, the "market rate" for the Service is understood to refer to the
market rate for such services available in comparable hotels, either
individually or collectively.

10. Limited Exclusivity in the Room/Performance Standard. In consideration of
    ----------------------------------------------------                     
the grant of limited exclusive rights described in this paragraph 10, Paragraph
27j of the Master Agreement is deleted in its entirety.  However, as the first
provider of the Service in a Participating Hotel, CAIS shall have the first
opportunity to select, subject to the Participating Hotel's approval, the Guest
Rooms in which the Service shall be installed.  CAIS is hereby granted for the
term of the Master Agreement a limited exclusive right (the "Exclusive") to
provide the Service (defined as wired high speed data communication system for
laptop computers and as further defined in the Master Agreement), as follows:
    
     (a) A "wired" system for laptop computers includes only a system delivering
high speed data to such laptop computers through a wireline, as opposed to
wireless, connection, including but not limited to those utilizing telephone
wire, Category 5 wire, and/or coaxial cable/cable modem. Therefore, it is
understood that the Exclusive does not apply to wired low speed (56 Kbs or less)
data systems, wired systems that do not connect to laptop computers or any
wireless systems.      

     (b) The Exclusive is granted only for the minimum number of rooms required
at each hotel (defined as all Meeting Rooms and either 200 Guest Rooms where the
Participating Hotel has 400 or greater Guest Rooms, or, 50% of the Guest Rooms
where the Participating Hotel has fewer than 400 Guest Rooms), in which CAIS's
equipment is installed.  The Exclusive is limited to those minimum rooms and is
not granted for any greater number of rooms that CAIS and Licensor may agree to
install; except in the following instances: (i) In the event Licensor exercises
its option to require installation in all hotel rooms, as defined in paragraph 1
of the Option Addendum to the Master Agreement, the Exclusive shall be granted
to all installed rooms.(ii) In the event Licensor grants and approves in writing
the Exclusive for a greater number of rooms than the minimum at a particular
hotel.

     (c) The Exclusive does not apply to, and in no manner affects, Hilton's
right to install any current or future in-room gaming systems accessed by laptop
computers.

     (d) In the event CAIS fails to attain and thereafter maintain a * percent
(*%) "take rate" averaged over the period from * through *, Hilton shall have

*Confidential Treatment Requested. The redacted material has been separately 
 filed with the Commission.

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<PAGE>
 
the right, upon written notice to CAIS, to rescind the Exclusive. The *% take
rate is based on a system wide average of the entire number of Guest Rooms
(wired with the Service) in all participating hotels that have signed a Rider by
*.

     Hilton shall use commercially reasonable efforts to direct those Guests
likely to use the services to rooms with the Service.  In the event Hilton
elects to exercise the Option Addendum to the Master Agreement pursuant to which
CAIS would install the Service in all Guest Rooms, CAIS shall not be required to
attain the above described *% take rate in order to retain the Exclusive.

11. Marketing. Hilton and CAIS shall develop a joint marketing and advertising
    ---------                                                                 
("JMA") program to promote through a national campaign the launch of CAIS's high
speed data communication system services at Hilton hotel properties.  *
Hilton's marketing department shall present a proposed advertising and marketing
campaign, including a media plan, to CAIS's marketing department within 90 days
of the date of this First Amendment for Hilton's and CAIS's mutual consideration
and discussion, with the end result to be a mutually agreed upon national
campaign and roll out schedule.  The anticipated roll out for the national
campaign shall occur following *.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the date first above written.

Hilton Hotels Corporation,             CAIS, Inc.,
a Delaware corporation                 a Virginia corporation

By: /s/ Dennis Koci                    By:   /s/ William M. Caldwell, IV
    ------------------------                 ---------------------------

Name: Dennis Koci                      Name: William M. Caldwell, IV
      ----------------------                 --------------------------

Title: SVP-HHC                         Title: President
       ---------------------                  -------------------------


Consenting for purposes of the provisions of Paragraph 1:

                                       CAIS Internet, Inc.,
                                       a Delaware corporation

                                       By:   /s/ William M. Caldwell, IV
                                             ---------------------------

                                       Name: William M. Caldwell, IV
                                             --------------------------
                                 
                                       Title: President
                                              -------------------------

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*Confidential Treatment Requested. The redacted material has been separately
 filed with the Commission.
 

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