Exhibit No. 10.7 Telecommunications Services Agreement between Registrant
and Xxxxxx Investment Corp. (King Tower Apartments).
* = Confidential Information.
FIRSTLINK COMMUNICATIONS, INC.
AND
XXXXXX INVESTMENT CORP.
KING TOWER APARTMENTS AND PORTLAND TOWERS APARTMENTS
TELECOMMUNICATIONS SERVICES AGREEMENT
This agreement ("Agreement") is entered into as of November 18 1996, 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 complexes
commonly known as King Tower Apartments, located at 000 XX Xxxx, Xxxxxxxx
Xxxxxx, which consists of 190 living units, and Portland Towers Apartments,
located at 000 XX 00xx Xxxxxx, Xxxxxxxx, Xxxxxx, which consists of 180 living
units (together known as "the Properties").
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
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additional services will be made available. Their availability is dependent upon
many variables 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 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 with 180 days notice at each 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
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event shall FirstLink interrupt service provided by US West for those tenants
choosing to remain 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, 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 sub1ect 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 be 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.
Both 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.
8. 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 telephone or
cable television services provided to each living unit served by FirstLink
hereunder. For telephone and cable television service penetration rate is the
number of living units subscribing to FirstLink's services divided by the total
number of living units in the Property at the start of the quarter for which
commissions are payable. All commi5sion 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, sub~1ect 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, Tenents 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.
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 right, after providing Owner with written
notice of at least forty-five (45) days, without further
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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. Sub1ect 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 under this Agreement. This Agreement shall not
create the relationship of employer and employee, a partnership or a joint
venture.
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17. EMERGENCY CALLS. FirstLink will use its reasonable best efforts to
pass all "911" emergency calls through the System to authorities 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 6est 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 21, 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 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
Owner's 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.
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, administered by and in
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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, 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 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.
(c) GOVERNING LAW. The rights and obligations of the parties and all
interpretations 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
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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: 000-000-0000 Facsimile: 000-000-0000
Telephone: 000-000-0000 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.
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.
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(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: /s/ ILLEGIBLE
------------------------------------ ----------------------------
Title: CEO Title: ILLEGIBLE
--------------------------------- -------------------------
11/19/96
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