Exhibit No. 10.11.1 Telecommunications Services Agreement between Registrant
and Xxxxxx Investment Corp. (The Xxxx Xxxxxx Apartments).
Certain information in this exhibit has been omitted pursuant to Rule 406
of the Securities Act. Omitted information is designated by "*".
FIRSTLINK COMMUNICATIONS, INC.
AND
XXXXXX INVESTMENT CORP.
CLAY TOWER APARTMENTS TELECOMMUNICATIONS SERVICES AGREEMENT
This agreement ("Agreement") is entered into as of September 25, 1997, by and
between FirstLink Communications, Inc., an Oregon corporation ("FirstLink"),
and Xxxxxx Investment Corp., an Oregon corporation ("Owner").
1. PROPERTIES. Owner owns the multi-family residential complex
commonly known as The Clay Tower Apartments located at 0000 XX 00xx Xxxxxx,
Xxxxxxxx, Xxxxxx 00000 which consists of 235 units ( "the Property").
2. GRANT OF RIGHTS.
(a) Owner grants FirstLink the sole and exclusive right, except as
provided in the last sentence of clause (b) below, to install, own, operate,
replace and maintain the System on, off and through the Properties and the
sole and exclusive right to provide Telecommunication Services to residents
of the Properties. "System shall mean all electronic devices, cable, wire,
hardware, software and other material used to transmit and receive two-way
voice and data communications, telephone service ("Telephone Service"),
multi-channel TV, video on demand, audio on demand, voice mail, data services
and other means of two-way communication distribution, whether now existing
or hereafter developed (collectively "Telecommunication Services") as
between the Properties and the local and/or long distance telephone networks
or other outside distributor of these and other services.
It is anticipated that Telephone Services will include local and long
distance calling, multi-channel television, voice mail and calling features
such as conference calling, call waiting and call forwarding. Additional
services will be added from time to time, as available and as warranted by
tenant demand. Such additional Telecommunication Services may include:
video conferencing, on-line computer services, electronic mail, wireless
services (such as cellular telephone) and other types of services. There can
be no assurance that any or all of the above additional services will be made
available. Their availability is dependent upon many variables
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and factors beyond FirstLink's control. Such factors include, but are not
limited to, technical feasibility, economic, regulatory and market
considerations.
(b) In consideration of the substantial investment made by
FirstLink in the System, Owner agrees that it will not grant access to the
Properties to any person or entity, other than FirstLink, for the purpose of
operating or maintaining the System, or permit the installation, maintenance
or operation at the Properties of any other equipment, wire, cable, or
material by any person or entity that similarly provides Telecommunication
Services. So long as it is a requirement of law that a local telephone
company also serve the Properties, this exclusivity provision shall not deny
such local telephone company the right to serve residents of the Properties.
3. SYSTEM EXPENSES. Other than as set forth herein, FirstLink
shall bear all expenses to install, operate, maintain and repair the System
including wiring within each apartment. Owner shall, at Owner's expense and
cost, provide electrical power to the System (except emergency power
generator costs) and shall pay for any damage to the System caused by the
negligence or misconduct of Owner or Owner's agent(s) or employees. For the
purposes of this Agreement, "System Site" shall mean an adequate and secure
space at each of the Properties to house FirstLink's System equipment, which
shall consist of a rent-free, locked room meeting FirstLink's specifications.
FirstLink will pay for constructing such a room if one does not exist. Owner
hereby grants FirstLink and its authorized personnel access to the Properties
for any reasonable purposes related to this Agreement including the
installation of cabling or microwave equipment to interconnect buildings and
to connect to other telecommunication systems and grants specific rights to
FirstLink to use both existing coaxial and twisted pair cabling in the
Properties. FirstLink agrees to notify the Facility Manager when either
FirstLink or its authorized personnel are on-site.
4. TERM. The term of this Agreement shall be * years from the
date hereof. The original term maybe renewed for up to * additional periods
of * years each at the same terms and conditions upon written notice of at
least 180 days prior to the end of the original term or any renewal term.
Owner has the right to cancel this Agreement within 90 days of receipt of
FirstLink's renewal notice to be effective on the anniversary date.
5. INSTALLATION. FirstLink shall commence installation of the
System as soon as practicable and in a manner that minimizes interruption of
existing communication services. In no event shall FirstLink interrupt
service provided by US West for those tenants choosing to remain
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connected to US West. Telecommunication Services to the Properties shall
commence no later than 180 days from commencement of installation. FirstLink
shall give Owner at least ten (10) days notice prior to the commencement of
installation. FirstLink may subcontract activities related to the installation
of the System, but shall be responsible for any and all acts and/or omissions by
any subcontractor.
6. OWNERSHIP AND CHARACTER OF THE SYSTEM. Except as otherwise
stated herein which includes pre-existing coaxial and twisted pair cabling,
the System, including any alterations and attachments, shall at all times
remain the sole property of FirstLink. It is the intention of the parties
that the System, and every component of the System, shall retain its
character as personal property following the installation of the System on
the Properties, and shall not be deemed to be a fixture constituting a part
of the Properties. No part of the System shall be or become subject to any
mortgage, deed of trust or lien upon the Properties.
7. SERVICE TO TENANTS. FirstLink shall provide Telephone
Service and other Telecommunication Services offered through the System to
each resident requesting them. FirstLink's obligation to provide or continue
Telecommunication Services shall be contingent on the resident paying service
charges and meeting other reasonable requirements as are established by
FirstLink from time to time. Residents electing to receive Telecommunication
Services offered by FirstLink shall do so through the execution and delivery
to Owner or FirstLink of a Tenant Services Agreement in the form provided,
from time to time, from FirstLink to Owner. Owner shall promptly provide
such executed documents to FirstLink. Residents requesting Telecommunication
Services shall 6e charged and billed individually for connection to the
System and for service at standard rates established solely by FirstLink from
time to time unless prohibited by applicable law or regulation. FirstLink
shall be solely responsible for invoicing, collections and bad debts related
to provision of Telecommunication Service to residents.
FirstLink shall at all times keep the rates charged Owner's tenants competitive
with like-kind companies offering similar services. Owner's properties shall at
no time be significantly disadvantaged to other buildings offering similar
services. FirstLink further guarantees to continuously offer first class
service, with prompt response to service calls, change in service requests, and
to maintain their equipment and installations in a first class condition.
FirstLink further guarantees to at all times compete with like-kind companies
with the latest technology and service packages. If FirstLink fails to perform
according to the foregoing, Owner may cancel this
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Agreement after thirty (30) day notice to cure. If FirstLink disagrees with
Owner's interpretation of the quality of FirstLink's service, both parties
hereby agree to arbitrate the dispute.
Bath parties agree that neither the Owner nor the Owner's agent shall have
any liability regarding the number of residents electing to use
Telecommunications Services.
a. COMMISSIONS. Owner shall be entitled to Commissions according
to the following schedule:
Penetration Rate Commission Percent
-------------------------------------------------------------------------------
* *
Commissions are paid on all gross revenues actually collected for
telecommunications services, including internet access services, calling
cards, paging services, and cellular services provided to each living unit
served by FirstLink hereunder. Penetration rate is the number of living
units subscribing to any of FirstLink's services divided by the total number
of living units in the Property at the start of the 9uarter for which
commissions are payable. All commission payments hereunder will be paid
quarterly in arrears within thirty days of each quarter end.
9. ADDITIONAL OBLIGATIONS OF FIRSTLINK. FirstLink shall:
(a) Make a customer service representative available to receive
service requests or inquiries from Owner or residents and insure that it
responds to service requests within four (4) hours of receipt. Routine
maintenance services shall be performed by FirstLink during its normal
working hours. A technician shall arrive at the Properties to commence
maintenance services promptly after request by a customer of such services,
provided however, where such requests are made on, or on a day preceding a
Saturday, Sunday or holiday, FirstLink's system technician shall arrive at
the Properties to commence maintenance services on the next normal working
day. A technician shall be dispatched within four (4) hours of receipt of an
emergency service request or notification of a service problem affecting more
than one resident.
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(b) Provide Owner with marketing materials, sales support and sales
training to enable Owner and Owner's employees to market Telecommunications
Services in accordance with Section 10(b);
(c) Provide training to Owner's staff to enable staff to perform
the duties specified in Section 10(b);
(d) Repair or replace any damage to the Properties resulting from
Installation, operation, or removal of the System or any other acts by
FirstLink to the satisfaction of the Owner and restore Properties to their
original condition;
(e) Comply with all applicable regulatory requirements relating to
the provision of the Telecommunication Services provided by FirstLink as may
be in effect from time to time;
(f) Maintain the System in good order, condition and repair; and
(g) Provide Owner with business Telephone Services at the
Properties. Owner will pay the installation costs for providing such business
Telephone Services and will provide, at its own cost, all necessary ancillary
hardware such as keysets and operator consoles for the dedicated use of the
Owner; such costs will be reasonable and reflect customary installation
charges for business telephone systems.
(h) Pay all taxes resulting from the ownership or operation of
System and service.
10. OBLIGATIONS OF OWNER. Owner shall:
(a) Make the System Site available on a rent-free basis to
FirstLink during the term of this Agreement. The construction and location of
the System Site shall be as Owner and FirstLink reasonably agree, subject to
technical and regulatory requirements as determined by FirstLink. FirstLink
shall have twenty-four hour, seven day a week access to the System Site, and
Owner 5 employees and agents shall not disturb the System. It is understood
that Owner currently has no emergency power generator at the Properties.
FirstLink's system at each System Site will include backup battery capacity
of 3.3 - 10.0 hours depending on resident load. If power is interrupted to
the System, a FirstLink technician will be automatically paged, allowing
sufficient time for a
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portable generator to be delivered to the System Site to provide temporary
power until normal power is restored.
(b) Use reasonable efforts to encourage its staff, agents and
representatives to encourage and promote the use of the Telecommunications
Services to residents and prospective residents as part of the amenities
provided by Owner at the Properties. Owner consents to FirstLink's use of
incentives and incentive programs with management personnel, leasing staff
and other personnel at the Properties for the purpose of promoting the System
and Telecommunication Services provided through the System. Such incentives
will be paid directly by FirstLink to the recipients. Owner's staff will
present the telecommunications service agreement and related information to
prospective tenants with the objective of securing sales. It is envisioned
that this selling process will require a minimal amount of time on behalf of
Owner's staff. If Owner determines that FirstLink incentives or incentive
programs are causing Owner's personnel to spend excessive time promoting
FirstLink services, Owner may request FirstLink to modify or cease such
incentives or incentive programs, such request to be not unreasonably made.
Upon such reasonable request by Owner FirstLink will modify or cease such
incentives or incentive programs. If tenants have additional questions or
require additional information, their sales lead will be referred to
FirstLink staff who will be responsible for responding to customer inquiries
and securing any resulting sales. FirstLink will also be fully responsible
for the initial sales conversion process;
(c) Promptly provide to FirstLink requested specifications on the
Properties, such as wiring schematics and/or building diagrams, a current
list of residents, addresses and their telephone numbers and other specific
information regarding resident transactions, such as rentals, move-ins,
move-outs, transfers, intents to vacate, and the entering into or termination
of leases and other information necessary to market and operate the
System and provide the Telecommunications Services according to this
Agreement or to comply with governmental or Utility Commission rules as may
be determined by FirstLink . Telephone numbers of residents are to be kept
confidential by FirstLink and used for operational -- not marketing --
purposes (such as determining whether a resident can retain a previous
telephone number).
(d) Cooperate with FirstLink in obtaining permits, consents,
licenses and any other requirements which may be necessary for FirstLink to
install and operate the System and furnish the Telecommunications Services;
provided that FirstLink shall pay all reasonable costs of the
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Owner associated therewith except that Owner will pay installation costs as
described in Section 9(g);
(e) Provide reasonable access to the Properties to FirstLink and its
employees and agents to enable FirstLink to perform the activities
contemplated by or necessary under this Agreement including access for the
purpose of soliciting customers.
11. INSURANCE. FirstLink shall carry and maintain liability insurance
of $1,000,000 naming Owner and Owner's agent as additional insured covering
personal injury and property damage that may be caused to person(s), the
Properties or their contents, by the System or FirstLink's employees or
agents, including but not limited to the duties described in paragraph 17.
Owner and FirstLink each waive any right of recovery against each other for
any claims that may be brought for any loss that is covered by insurance upon
or relating to the Properties or the System to the extent of the actual
proceeds received by waiving party. Owner shall carry and maintain general
liability insurance related to the Properties.
12. TERMINATION OF THE AGREEMENT.
(a) This Agreement may be terminated by either party if there has been
a material breach of the terms of this Agreement by the other party and if
within forty-five (45) days after receiving notice of such breach from the
party seeking to terminate, such breach has not been cured.
(b) FirstLink may terminate this Agreement, or discontinue the
provision of any Telecommunications Services provided hereunder, if in the
sole discretion of FirstLink, it ceases to be feasible for legal, economic or
regulatory reasons to provide Telecommunications Services to the Properties;
provided that FirstLink provides forty-five (45) days written notice to Owner.
(c) Any termination of this Agreement shall be effective as of the date
of termination, but FirstLink shall continue to provide Telecommunications
Services until the earlier of (i) all FirstLink customers at the Properties
are provided Telephone Service from another source or (ii) thirty (30) days
from the date of such termination. The provisions of this agreement necessary
for such continued services shall remain effective.
(d) Upon termination of this Agreement for any reason, FirstLink, or any
designee of FirstLink, including without limitation, any party providing
financing to FirstLink, shall have the
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right, after providing Owner with written notice of at least forty-five (45)
days, without further demand, to enter upon the Properties and to dismantle
and remove or render inoperative any and all equipment or other property
comprising the System so long as such right shall conform to Sections 9 (d)
and 12 (c) herein.
13. ASSIGNMENT OF THE AGREEMENT. This Agreement and the rights
hereunder may be assigned by FirstLink to any majority-owned subsidiary of
FirstLink or to an affiliate or party acquiring all or substantially all of
the assets of FirstLink upon prior written consent of Owner. Such consent
shall not be unreasonably withheld. Alternatively, the Agreement may be
assigned by FirstLink to any FirstLink subsidiary so long as FirstLink agrees
in writing that it shall remain liable for all obligations arising under this
Agreement. FirstLink may also assign this Agreement to any party providing
financing to FirstLink; provided that such assignment shall not relieve
FirstLink from its obligations hereunder. In connection with a sale or
disposition of the Properties, Owner shall request FirstLink's written
consent to assign this Agreement and shall require any subsequent owner of
the Properties to assume this Agreement and the rights and obligations
hereunder. Subject to the foregoing, this Agreement shall be binding upon and
shall inure to the benefit of the successors and assigns of the respective
parties to this Agreement.
14. OWNER WARRANTIES; INFORMATION. Owner warrants that (i) it has full
power and authority to grant to FirstLink the exclusive rights set forth in
this Agreement, (ii) that no party holds any rights or interests with respect
to the Properties that conflict with any rights or interests that Owner
grants to FirstLink under this Agreement; (iii) that the Properties is not
presently part of bankruptcy proceeding, foreclosure action, or deed in lieu
of foreclosure transaction; (iv) Owner is not in default of any mortgages or
other encumbrances on the Properties; and (v) no purchase contracts presently
exist as to the Properties.
15. FIRSTLINK WARRANTY. FirstLink warrants that it will comply with all
laws and licensing requirements concerning the installation and operation of
the System. Except as expressly stated in this Agreement, FirstLink makes no
representations or warranties regarding the System, express or implied,
including, but not limited to, any implied warranty of merchantability or
fitness for a particular purpose.
16. INDEPENDENT CONTRACTOR. FirstLink shall be and is an independent
contractor and Owner shall not control or direct the details and means by
which FirstLink performs its duties
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under this Agreement. This Agreement shall not create the relationship of
employer and employee, a partnership or a joint venture.
17. EMERGENCY CALLS. FirstLink will use its commercially reasonable
best efforts to pass all "911" emergency calls through the System to
authorities and to assure identity of each dwelling unit placing such call
but makes no warranty or guaranty of any nature as to the promptness or
adequacy of any response to any such emergency call. FirstLink assumes no
responsibility whatsoever for any actions with respect to emergency calls
other than to use its reasonable best efforts to pass such traffic to
authorities through the System. In the event that the System has been
adversely affected by any situation described in Section 2 1, FirstLink shall
have no liability whatsoever for failure to pass on emergency telephone
traffic.
18. INDEMNIFICATION. Subject to the provisions set forth in Section 19
below, (i) FirstLink and Owner hereby agree to indemnify, defend and hold each
other (and each other's officers, directors, owners, employees, and agents)
harmless from and against all claims, losses and liabilities in any way relating
to, growing out of, or resulting from a material breach of each of their
respective obligations to the other under this Agreement ; and (ii) Owner will
indemnify FirstLink for damages to the System as provided in Section 3 herein.
In addition, FirstLink agrees to indemnify, defend and hold harmless Owner and
Owners partners, employees, agents and successors from and against all damages,
losses, liabilities, costs, and expenses (including reasonable attorneys' fees)
resulting from claims made or causes of action asserted by third parties
(including, without limitation, residents of the Properties) arising out of or
relating to (i) the performance by FirstLink (or its employees or agents) of its
obligations under this Agreement, (ii) the provision of Telecommunications
Services or (iii) compliance of FirstLink and/or the System with applicable laws
and regulations, except to the extent such matters are attributable to the gross
negligence or willful misconduct of Owner.
19. LIMITATION OF REMEDIES. Notwithstanding any other provision of this
agreement but without limiting the mutual indemnification in Section 18,
neither FirstLink nor Owner shall be liable to any third party for any
incidental or consequential damages, including but not limited to lost
profits, of any nature whatsoever or for the condition or repair of any
telephone instrument or any property to which the System is attached.
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20. ARBITRATION OF DISPUTES. Any controversy, dispute, or claim of
whatever nature arising out of, in connection with or in relation to the
interpretation, performance or breach of this Agreement, including any claim
based on contract, tort or statute, shall be resolved at the request of any
party to this Agreement, by final and binding arbitration before a single
arbitrator conducted at a location determined by the arbitrator in Portland,
Oregon, ( or jurisdiction where property is located, at Owner's election)
administered by and in accordance with the then existing rules of practice
and procedure established by the Arbitration Chapter of the Uniform Trial
Court Rules as then in effect in the State of Oregon, (or jurisdiction where
property is located, at Owner's election) and judgment upon any award
rendered by the arbitrator may be entered by any state or federal court
having jurisdiction thereof. If the parties cannot mutually agree on an
arbitrator, either party may petition the Presiding Judge of the Multnomah
County Circuit Court (or jurisdiction where property is located, at Owner's
election) to appoint an arbitrator. The arbitrator shall award attorney's
fees and costs of the arbitration procedure to the prevailing party. Both
parties acknowledge that they are giving up their right to have any such
claim decided in a court of law before a judge or jury, and hereby waive all
rights to appeal.
21. FORCE MAJEURE. If the performance of any of the obligations under
this Agreement is interfered with by any reason or any circumstances beyond
the reasonable control of the parties, including, but not limited to, fire,
earthquake, storm, volcanic eruption, explosion, power failure or power
surge, acts of God, war, revolution, civil commotion, or requirement of any
government or legal body or any representative of any such government or
legal body, labor unrest, including but not limited to, strikes, slowdowns,
picketing or boycotts, then the parties shall be excused from performance on
a day-by-day basis to the extent of such interference.
22. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement contains the entire Agreement
between the parties and may not be modified, amended or changed except by
written instrument signed by duly authorized executives of both parties.
(b) WAIVER. The failure by either party at any time to require
performance by the other party or to claim a breach of any provision of this
Agreement shall not be construed as affecting any subsequent breach or the
right to require performance or to claim a breach with respect thereto.
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(c) GOVERNING LAW. The rights and obligations of the parties and all
interrpetations and performances of this Agreement shall be governed in all
respects by the laws of the State of Oregon.
(d) NOTICES. Any notice to be given by either party to the other shall be
in writing and either personally delivered or sent by certified mail, return
receipt requested, to the addresses of the Owner and FirstLink provided below.
Notices shall be deemed given when received or refused. Each party may change
its address for notice to it by notice in accordance with the foregoing
provisions.
FIRSTLINK: OWNER:
FirstLink Communications, Inc. Xxxxxx Investment Corp.
000 XX Xxxxxxxx, Xxxxx XX 0000 XX Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000 Xxxxxxxx, Xxxxxx 00000
Facsimile: 503~06-4333 Facsimile: 000-000-0000
Telephone: 000x00-0000 Telephone: 000-000-0000
Attn: A. Xxxxx Xxxxx, CEO Attn: Xxxxx X. Xxxxxxx
(e) VALIDITY. If any provision of this Agreement shall be held to be
invalid or unenforceable, such provisions shall not affect in any respect the
validity or enforceability of the remainder of this Agreement unless the
invalidity materially affects the ability of either party to perform as
contemplated hereunder.
(f) ATTORNEYS' FEES AND COSTS. If arbitration or other proceedings are
brought to enforce or interpret this Agreement, the substantially prevailing
party shall be entitled to recover reasonable attorneys' fees and other costs
incurred in such action, arbitration or proceeding from the other party, in
addition to any other relief to which such party may be entitled.
(g) AUTHORITY. Each individual signing this Agreement on behalf of a
corporation or partnership represents that he or she has the necessary authority
to execute this Agreement on behalf of such entity and that, in the case of a
corporation, all necessary corporate action has been taken approving the
execution of this Agreement.
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Any person or entity executing this Agreement as "Owner" hereby represents and
warrants to FirstLink that it is fully authorized by Owner to execute this
Agreement and to bind Owner to the terms and obligations set forth in this
Agreement and the Owner is fully aware of the existence and contents of this
Agreement. Owner and any person or entity executing this Agreement on Owner's
behalf acknowledges that Owner shall be estopped from claiming that this
Agreement was executed by a person or entity lacking actual authority to bind
Owner.
(h) FURTHER ASSURANCES. Upon the reasonable request of either party, the
other party shall promptly and, at its own expense, execute and deliver any
additional documents or take such actions, as may be reasonably necessary
(subject to any other agreement binding on either party) for the purpose of
evidencing or perfecting any rights or interest of either party arising under
this Agreement or arising under documents executed in accordance with this
Agreement.
This Agreement has been signed and delivered as of the above date.
FIRSTLINK: OWNER
By: /s/ A. Xxxxx Xxxxx By: [ILLEGIBLE]
------------------------------- --------------------------------
Title: CEO Title: VP
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