EXHIBIT 10.4
PAY TELEPHONE SERVICES AGREEMENT
THIS AGREEMENT, made this 1st day of May, 1999, by and between QUANTUM
NETWORK SERVICES, INC., a California Corporation, (hereafter referred to as
"QUANTUM"), located at 0000 X. Xxxxxxxxx Xxxx, Xxxxx 00, Xxxx, Xxxxxxxxxx 00000,
and PAYSTAR COMMUNICATIONS, INC., a Nevada Corporation, (hereafter referred to
as "PAYSTAR"), located at 0000 X. Xxxxxxxxx Xxxx, Xxxxx 00, Xxxx, Xxxxxxxxxx
00000, all of whom shall constitute the "Parties" of this Agreement.
WITNESSETH:
WHEREAS, PAYSTAR services and operates private pay telephone(s)
(collectively, the "Telephone(s)") for various owners and at various
locations; and
WHEREAS, QUANTUM desires to utilize the services of PAYSTAR in
connection with the operation of Telephone(s) and PAYSTAR desires to render
such services, upon the terms and conditions hereinafter set forth; and
NOW, THEREFORE, in consideration of the foregoing recitals, all of which
are incorporated herein by reference, and of the mutual covenants contained
herein, QUANTUM and PAYSTAR agree as follows:
SECTION I
DEFINITIONS
1.1 Definitions. As used herein, the following terms shall have the
respective meanings indicated below:
(a) Capital Improvements: any alteration or addition to, or
rebuilding or renovation of the Telephone(s), the cost of which is not
charged to repairs, maintenance or other operating expenses.
(b) Gross Revenues: all receipts of a Telephone from all sources,
except proceeds from the sale of assets (Telephones).
(c) Legal Requirements: all laws, statutes, ordinances, orders,
rules, regulations, permits, licenses, authorizations, directions and
requirements of all governments and governmental authorities, which now or
hereafter, may be applicable to the Telephone(s), or any Telephone(s) and the
operation thereof.
(d) Operating Vendors: Vendors of all services required in the
operation of the Telephone(s), including all lessors, local and long distance
carriers, operator service providers and other carriers.
(e) Net Revenues: Gross Revenues, less the payment of all vendor
invoices relating to telephone usage, including, but not limited to, all fees
and taxes due and owing to local and long distance telephone carriers, site
owners, and operator service providers, the cost of ordinary and necessary
new or serviceable parts not covered by the manufacturer's warranty required
to repair the Telephone(s), and the cost of all ordinary and necessary
service calls to repair the Telephone(s) at a rate of twenty dollars ($20.00)
each occurrence.
(f) Sites: The physical location which each Telephone is or will
be installed.
SECTION II
TERM
2.1 Term. The term of this Agreement shall be one (1) year, commencing on
the date hereof and ending at midnight on the first (1st) anniversary of the
date hereof. Unless terminated by a ninety (90) day written notice, via
Certified Mail, this Agreement shall automatically renew on the same terms and
conditions for successive terms.
2.2 Termination. Anything contained in this Agreement to the contrary
notwithstanding QUANTUM, at its sole discretion, shall have the right to
terminate this Agreement, without default by PAYSTAR, as hereinafter defined in
Section 8.2, after one hundred twenty (120) days written notice of termination
to PAYSTAR, at which time this Agreement shall be defined null and void.
2.3 Acquisition. QUANTUM will be solely responsible for the acquisition
of each of the Telephone(s), including the purchase of Capital Improvements
required for the Telephone(s), and the acquisition or lease of the Sites.
SECTION III
OPERATION OF THE TELEPHONES
3.1 PAYSTAR's Duties and Responsibilities. During the Operating
Period, PAYSTAR, on behalf and at the sole expense of QUANTUM, is hereby
authorized to and shall perform the services indicated in Exhibit B, and with
respect to the services described in Sections L1-L3, as expressly authorized
by QUANTUM.
3.2 Standard of Services. PAYSTAR agrees that its services hereunder
shall be performed by competent personnel. All obligations of PAYSTAR
hereunder shall be subject to and contingent upon (a) the provision by
QUANTUM of sufficient funds (if not otherwise available from the operations
of the Telephone(s)) to permit PAYSTAR to comply with, and (b) the commission
by Quantum of no act which prevents PAYSTAR from complying with such
obligations. At the request of either, PAYSTAR and QUANTUM shall meet to
discuss any aspect of the operation of the Telephone(s) or any operating
problem which warrants a modification of any operating policy or
procedure. QUANTUM acknowledges and agrees that PAYSTAR is not a guarantor
of the financial success of the Telephone(s).
3.3 Funding. From time to time throughout the term hereof as and when
requested by PAYSTAR upon at least fifteen (15) days prior written notice,
QUANTUM shall provide working capital by way of cash or through bank credit,
such working capital to be in amounts sufficient to constitute normal working
capital for PAYSTAR to perform the services described in Sections L1-L3 of
Exhibit "B", to the extent such services are authorized by QUANTUM. PAYSTAR
shall in no event be required to advance any of its own funds for the
operation of the Telephone(s).
SECTION IV
REMUNERATION AND REIMBURSEMENT OF PAYSTAR
4.1 Monthly Fee. During the Operating Period, QUANTUM shall pay to
PAYSTAR with respect to each Telephone(s) a thirty-two dollar ($32.00) monthly
fee as set forth in Exhibit "B" attached hereto.
4.2 Payment of Telephone Revenue and Monthly Fees. Unless otherwise
requested by QUANTUM, all Telephone revenues shall be collected and paid weekly.
SECTION V
PAYSTAR TO ACT SOLELY AS AGENT FOR QUANTUM
5.1 In the performance of its duties hereunder, PAYSTAR shall act
solely as agent of QUANTUM. Nothing herein shall constitute or be construed
to be or create a partnership or joint venture between QUANTUM and PAYSTAR,
nor shall the execution and delivery of this Agreement by PAYSTAR constitute
the offer or sale to QUANTUM of an investment contract or other security. As
to debts and liabilities of QUANTUM, PAYSTAR shall not be liable for any such
debts or liabilities by reason of its maintenance, supervisions, direction or
operation of the Telephone(s) for QUANTUM. PAYSTAR may so inform third
parties with whom it deals on behalf of QUANTUM and may take any other
reasonable steps to carry out the intent of this Section. QUANTUM further
agrees to indemnify, defend and hold PAYSTAR and its officers, employees,
shareholders, and affiliates, harmless from any and all liabilities, debts,
claims or expenses (including reasonable attorney's fees and other expenses
in connection with the defense of same) of Telephone(s) incurred in
accordance herewith.
SECTION VI
INSURANCE AND LOSSES
6.1 QUANTUM acknowledges and agrees that it shall be solely responsible
for obtaining and keeping in force with respect to the Telephone(s), in
amounts determined by QUANTUM (a) fire and extended coverage and business
interruption insurance; (b) liability and excess liability insurance
for loss, damage or injury to property or persons which might arise out of
the operation of the Telephone(s); (c) any worker's compensation and employer
liability coverage as required by statute; and (d) any other coverage desired
by QUANTUM.
SECTION VII
INDEMNIFICATION
7.1 QUANTUM and PAYSTAR agree to protect, indemnify and hold each other
harmless from and against any and all losses, costs, expenses, claims,
demands, judgments, orders, decrees, damages or liabilities (including
without limitation, costs of litigation and reasonable attorneys' fees)
arising out of any tortuous conduct on the part of the indemnifying party or
related in any way to the failure or refusal of the indemnifying party to
comply timely and fully with each of its obligations, promises and covenants
set forth herein.
SECTION VIII
DEFAULT
8.1 Default by QUANTUM. QUANTUM shall be in default hereunder if any
one or more of the following shall occur or exists; (a) QUANTUM shall fail to
provide funds, after request by PAYSTAR pursuant to Section 3.3, sufficient
to permit timely payment of any amount due to PAYSTAR hereunder and such
failure shall continue for seven (7) days after written notice thereof has
been given to QUANTUM by PAYSTAR; or (b) QUANTUM shall neglect or fail to
perform any of its duties or obligations hereunder or shall neglect or fail
to comply with any of the provisions hereof (other than as referred to in
subsection (a) of this Section 8.1 and shall fail to remedy the same within
fourteen (14) days after PAYSTAR shall have given QUANTUM written notice
specifying such neglect or failure or if such failure cannot reasonably be
cured within said fourteen (14) days and QUANTUM shall not have commenced to
cure such failure within such period and shall not thereafter with reasonable
diligence and good faith cure such failure.
8.2 Default by PAYSTAR. PAYSTAR shall be in default hereunder if
PAYSTAR shall neglect or fail to perform any of its duties or obligations
hereunder or shall neglect or fail to comply with any of the provisions
hereof and shall fail to remedy the same within thirty (30) days after
QUANTUM shall have given PAYSTAR written notice specifying such neglect or
failure or if such failure cannot reasonably be cured within said thirty (30)
days and PAYSTAR shall not have commenced to cure such failure within such
period and shall not thereafter with reasonable diligence and good faith cure
such failure.
8.3 Remedies Upon Default. Upon the occurrence of any default under
Section 8.1 or Section 8.2, the non-defaulting party may, in addition to and
without prejudice to any other right or remedy available to it law or in
equity, terminate this Agreement by written notice of termination given to
the defaulting party.
SECTION IX
ASSIGNMENT
9.1 Either PAYSTAR or QUANTUM may voluntarily, by operation of law or
otherwise, assign any of its rights or delegate any of its duties hereunder.
SECTION X
NOTICES
10.1 All notices, statements, consents, approvals, requests and demands
shall be in writing, duly executed by an authorized officer or agent, and shall
be delivered personally or sent by certified or registered Unites States mail,
postage prepaid, return receipt requested, addressed to QUANTUM as set forth in
the signature page of this Agreement and to PAYSTAR as follows:
If to PAYSTAR: XXXXXXX X. XXXXX, President
PAYSTAR COMMUNICATIONS, INC.
0000 X. Xxxxxxxxx Xxxx, #00
Xxxx, Xxxxxxxxxx 00000
If to QUANTUM: XXXXXXXX XXXXXXXX, Vice-President
QUANTUM NETWORK SERVICES, INC.
0000 X. Xxxxxxxxx Xxxx, #00
Xxxx, Xxxxxxxxxx 00000
Any notice, statement, consent, approval, request, demand or other
communication, if delivered personally, shall be deemed to be given upon
delivery to the entities specified above; and, if sent by mail, shall be
deemed to have e been given three (3) days after being deposited in the
United States mail, postage prepaid, properly addressed as provided above.
Either party may change either or both the address and person to which
notices thereafter shall be sent by giving notice to the other party in the
manner provided above.
SECTION XI
MISCELLANEOUS
11.1 Copies of Notices. QUANTUM and PAYSTAR shall each promptly furnish
the other with copies of all notices received concerning a Telephone(s), and
especially notices relating to any claimed failure to perform obligations
with respect to a Telephone(s), including, without limitation, notices from
governmental authorities and from third parties asserting rights to recover
damages for personal injury or property damage, breach of contract or any
other claim.
11.2 Headings. The headings to the articles and sections of this
Agreement are inserted for convenience of reference only and shall in no way
affect the interpretation of this Agreement.
11.3 Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties concerning the subject matter hereof
and supersedes all prior and contemporaneous negotiations, correspondence,
memoranda and agreements, whether oral or written.
11.4 Amendment. Except as specifically provided otherwise herein, this
Agreement may be amended, modified, altered or waived, in whole or in part,
only by a written instrument signed by the party to be bound by such
amendment, modification, alteration or waiver.
11.5 Waivers. The waiver of any of the terms and conditions of this
Agreement on any occasion shall not be deemed a waiver of such terms and
conditions on any future occasion.
11.6 Severability. If any term or provision of this Agreement or the
application of that term or provision to any person or circumstance is
illegal, invalid or unenforceable to any extent, then the remainder of the
Agreement and the application of that term or provision to persons or
circumstances other than those as to which it is held illegal, invalid or
unenforceable, shall not be affected thereby. It is also the intention of
the parties to this Agreement that in lieu of each term or provision of this
Agreement that is illegal, invalid or unenforceable, there be added as a part
of this Agreement a term or provision as similar in terms to such illegal,
invalid or unenforceable term or provision as may be possible and be legal,
valid and enforceable.
11.7 Binding Effect. This Agreement shall bind and inure to the
benefit of QUANTUM and PAYSTAR and their respective successors and assigns.
11.8 Applicable Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of California. If any
suit or action (including any appeal) is brought to enforce or interpret any
one or more of the terms and provisions of this Agreement, the prevailing
party shall be entitled to reasonable attorney fees and all costs of such
action from the other party.
11.9 Impossibility of Performance. Neither QUANTUM nor PAYSTAR shall be
liable for loss or damage or deemed to be in breach of this Agreement if its
failure to perform its obligations results from: (1) the unavailability of
suitable Operating Vendors; (2) compliance with Legal Requirements; (3) acts
of God; (4) acts of omissions of the other party; (5) fires, strikes,
embargoes, war, or riot; or (6) any other similar event or cause beyond the
control of the non-performing party. Any delay resulting from any of said
causes shall extend performance accordingly or excuse performance, in whole
or in part, as may be reasonable, but with respect only to the relevant
Telephone(s), except that said causes shall not excuse payments of amounts
owed at the time of such occurrence.
IN WITNESS WHEREOF, QUANTUM has duly executed this Agreement as of this
1st, day of May, 1999.
QUANTUM NETWORK SERVICES, INC. PAYSTAR COMMUNICATIONS, INC.
XXXXXXXX XXXXXXXX, Vice-President XXXXXXX X. XXXXX, President
QUANTUM NETWORK SERVICES, INC. PAYSTAR COMMUNICATIONS, INC.
0000 X. Xxxxxxxxx Xx, Xxxxx 00 0000 X. Xxxxxxxxx Xx, Xxxxx 00
Xxxx, Xxxxxxxxxx 00000 Xxxx, Xxxxxxxxxx 00000
/s/ Xxxxxxxx Xxxxxxxx /s/ Xxxxxxx X. Xxxxx
(Signature) (Signature)
---------------------------------- ----------------------------------
(Title) (Title)
---------------------------------- ----------------------------------
(Telephone) (Telephone)
---------------------------------- ----------------------------------
(SSN/FIEN NO.) (SSN/FIEN NO.)
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(Date) (Date)
EXHIBIT B
PAY TELEPHONE SERVICES
Monthly Fees
During the term of this Agreement, QUANTUM shall pay to PAYSTAR with respect
to each Telephone(s) a monthly fee ("Monthly Fee*") based on the following
level of services provided by Company:
L1 - "Level One Services" Twenty dollars ($20.00) to collect monthly
revenue generated by the Telephone(s), and forward same to QUANTUM in
accordance with QUANTUM's written direction to PAYSTAR, less the Monthly
Fee.
INITIALS /s/ WY
L2 - "Level Two Services" Twenty-eight dollars ($28.00) combined with
services set forth in Section L1, at QUANTUM's expense, pay commissions and
fees to operating Vendors;
INITIALS /s/ WY
L3 - "Level Three Services" Thirty-two dollars ($32.00) combined with
services set forth in Sections L1 and L2 above, in consultation with
QUANTUM, provide for the repair of the Telephone(s) including parts and
labor and maintain the Telephone(s) in a neat and clean condition and in
compliance with all Legal Requirements, and with QUANTUM's prior written
approval, make Capital Improvements, as necessary.
INITIALS /s/ WY
*Such fees may be adjusted by PAYSTAR with ninety (90) days notice.
