Exhibit No. 10.20 Telecommunications Services Agreement between Registrant and
Xxxxxx Development Corp. (Syl-Mar Estates).
* = Confidential Information
FIRSTLINK COMMUNICATIONS, INC.
AND
XXXXXX INVESTMENT CORP.
SYL-MAR ESTATES 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 Syl-Mar Estates located at 0000 Xxxx Xxxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxx which consists of 267 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 ri9ht 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 Owner1s 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 may be 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 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
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 quarter 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's 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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(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 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.
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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 A9reement 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: /s/ [Illegible]
---------------------------------- ------------------------------
Title: CEO Title:
-------------------------------- ----------------------------
FIRSTLINK
December 11, 1997
Xxxx X. Xxxxx
Xxxxxx Investment Corp.
0000 XX Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Dear Xxxx:
Enclosed are the executed Telecommunications Services Agreements for
Park Plaza, Clay Tower, The Xxxxxxxxx, Xxxxxxx Tower, Regency Tower and
Syl-Mar Estates.
To clarify our final agreement regarding Section a, Commissions, the
third sentence in Section 8 (originally "For telephone and cable. for which
commissions are payable") is hereby modified to read 'Commissions on
telephone revenues and cable television revenues are calculated separately,
with the penetration rate for telephone calculated as the number of living
units subscribing to telephone services divided by the total number of living
units in the Property at the start of the quarter for which commissions are
payable The penetration rate for cable is calculated as the number of living
units subscribing to cable services divided by the total number of living
units in the Property at the start of the quarter for which commissions are
payable."
Xxxx, if this conforms to your understanding please sign the enclosed
copy of this letter and return to me for our files.
Sincerely,
/s/ A. XXXXX XXXXX
--------------------------------------
A. Xxxxx Xxxxx
Chief Executive Officer
Acceptance by Owner
By: /s/ XXXX X. XXXXX
-----------------------------------
Title: Vice President
--------------------------------
FIRSTLINK COMMUNICATIONS, INC.
000 X.X. XXXXXXXX XX.
XXXXXXXX, XX 00000-0000
FAX 000-000-0000
000-000-0000
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