Exhibit 10.4
SERVICE AGREEMENT
THIS SERVICE AGREEMENT (this "Agreement") is entered into as of August
7, 2000 (the "Effective Date") by and between BRE Properties, Inc., a Maryland
corporation ("Owner"), and VelocityHSI, INC., a Delaware corporation
("Provider"). Owner and Provider are each referred to as a "Party" or
collectively as the "Parties." All capitalized terms have the meanings set
forth herein unless otherwise indicated.
R E C I T A L S
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A. Provider provides an assortment of high speed data and localized
multiple dwelling unit ("MDU") services, including high speed Internet access
through its VelocityHSI service, community specific portals through its KLIKLANE
service and e-mail services and Web pages individualized for particular
communities through its ZIPPITYKLIK service (collectively, the "VelocityHSI
Services");
B. Owner owns, operates, leases and manages the MDU(s) detailed on
Exhibit "A" attached hereto (each a "Complex" and collectively, the
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"Complexes");
C. Provider and Owner desire to provide for the provision of
VelocityHSI Services to the Complexes on the basis of, and subject to the terms
and conditions set forth below.
A G R E E M E N T
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NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, and other good and valuable consideration, the Parties hereto
agree as follows:
1. Term of Agreement. This Agreement shall commence as of the Effective Date
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and shall continue until terminated by either Party (the "Term"). Owner may
terminate the Agreement at any time after the earlier of (i) six (6) months
from the date hereof or (ii) thirty (30) days after completion of the
initial installation described in Section 2.1, upon thirty (30) days prior
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written notice to Provider and Provider may terminate the Agreement at any
time upon one hundred eighty (180) days prior written notice to Owner.
2. Provider Obligations. During the Term, Provider will perform each of the
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following obligations:
2.1 Initial Installation. As soon as practicable after the Effective Date,
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Provider shall install the Infrastructure, as hereafter defined, in
each Complex. The exact configuration of the Infrastructure for each
complex shall be determined by Provider based upon the factors unique
to each Complex, including but not limited to, the construction style,
size, existing data and telecommunications systems and Complex
amenities. Provider shall provide Owner with a description of the
system to be installed. It is anticipated that this process will take
thirty (30) to forty-five (45) days.
2.2 VelocityHSI Services. Upon substantial completion of the
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Infrastructure, and for the entire Term, Provider shall, consistent
with the terms and conditions contained in this Agreement and subject
to a resident's compliance with Provider's generally applicable
Subscriber's agreement, provide any of the generally available
VelocityHSI Services to any Complex resident so requesting. All
VelocityHSI Services shall be provided in compliance with the
standards detailed on Exhibit "B" and consistent with industry
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standards. The Parties agree that the exact package of services
included with the VelocityHSI Services may be modified from time to
time in Provider's discretion due to system upgrades and changes in
technology, in accordance with the terms of this Agreement.
2.3 Web Portal Service. Provider will design, host and maintain a Complex
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specific community web portal for each Complex (each a "Web Portal").
The Web Portal will provide information regarding the Complex
amenities and special programs, links and access to Complex
maintenance service requests and messaging to and from the Complex
management for the Complex residents. Provider shall be responsible
for periodically revising and providing such reasonable modifications,
and maintenance as Owner may request, including, updating and posting
current events, notices, and information for the Complex residents;
provided that the exact design, layout and content at the Web Portal
shall be determined by Provider.
(a) Each Web Portal shall be co-branded with Provider's and Owner's
marks, logo's and/or name, and may contain such other banners,
advertising, content or links as Provider may determine, in its
discretion.
(b) Notwithstanding the foregoing:
(i) Provider shall comply with all reasonable requests of Owner
regarding inclusion of content specific to the Complex,
Owner, or other Complexes, including without limitation,
current events, notices, promotions and similar information.
Provider shall consult with Owner, and consider all
reasonable requests regarding the initial lay out and design
of each Web Portal.
(ii) Provider shall not knowingly permit or use any (1) content
which contains obscene material, sexual explicit adult
programming, or indecent material as defined in 47 C.F.R.
76.701(g); (2) any material soliciting or promoting unlawful
activity; or (3) content that may or could have been subject
to the telecommunications act of 1996, relating to the
scrambling of sexually explicit adult video service
programming.
(c) Each Web Portal will be segmented into one or more areas as
Provider determines. The basic area, containing information and
basic services related to the Complex shall be accessible to all
Subscribers at no charge. Additional portions of the Web Portal
may be accessible on a restricted
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basis, whether by upgraded subscription, pay-per-view, or
otherwise, as Provider determines, provided, however, that any
such services shall be made available to all residents of the
Complex upon the same terms and conditions.
2.4 Owner Internet Connection and Services. Provider shall provide Owner
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with one high speed Internet connection for each Complex during the
entire Term for use by Owner's employees and agents in connection with
management and operation of the Complexes. Provider shall include a
dedicated, password protected, portion of each Complex's Web Portal
for use by Owner's employees.
2.5 Subscriber Support. Provider will provide reasonable onsite technical
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support for Subscribers, at reasonable times designated by Provider
and as detailed in Exhibit "C", including assistance with initial or
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subsequent configuration of Subscriber supplied equipment and 24-7
toll-free telephone subscriber assistance.
2.6 Permits Licenses, etc. Provider shall possess and maintain during the
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entire Term all material permits, including, without limitation, any
building or use permits relating to the Infrastructure, licenses,
franchise rights, trademarks, trademark rights, trade names, trade
name rights, copyrights, and all other intellectual property rights,
including requisite licenses or rights from third parties which are
required to provide the VelocityHSI Services to each Complex in
accordance with this Agreement.
2.7 Insurance Obligations. Provider shall procure and maintain the
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following insurance policies in no less than the following minimum
policy amounts (or such other minimum amounts, if higher, as are
required by law):
(a) All risk property insurance covering the full replacement cost of
the Infrastructure and all other personal property and
improvements installed or placed in or on the Complexes by
Provider.
(b) Commercial General Liability Insurance with policy limits of at
least one million dollars ($1,000,000) per occurrence, and two
million dollars ($2,000,000) aggregate.
(c) Workman's compensation insurance with limits in compliance with
the laws of the State in which each Complex is located.
(d) Vehicular liability insurance with personal injury limits of not
less than five hundred thousand dollars ($500,000) for one person
and one million dollars ($1,000,000) for two or more persons and
vehicular liability property damage insurance with a limit of not
less than fifty thousand dollars ($50,000) to cover all vehicle
accidents.
(e) The liability and property policy shall each name Owner as an
additional insured, insure on an occurrence and not a claims made
basis, be issued by companies licensed to do business in the
state in which each Complex is
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located, provided that the insurer will endeavor to provide
thirty (30) days written notice to Owner prior to cancellation,
and contain a cross liability/ severability of interests clause
and a contractual liability endorsement (any policy issued to
Owner providing duplicate or similar coverage shall be deemed
excess over Provider's policies). Any all risk property insurance
obtained by Owner and Provider shall include a waiver of
subrogation by the insurers and all rights based upon an
assignment from its insured against Owner or Provider, their
officers, trustees, directors, employees, agents, invitees and
contractors in connection with any loss or damage thereby insured
against.
(f) Provider warrants that it meets or exceeds all insurance
requirements stated herein and those that are required by the
laws in the State in which each Complex is located.
2.8 Marketing Support. Provider shall provide to Subscribers at each
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Complex on-site training, reference material and telephone support,
and shall provide to Owner marketing materials and a demonstration
Kiosk for display in the Complex's common area.
3. Owner Obligations. During the entire Term, Owner will perform and observe
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each of the following obligations:
3.1 Use of Equipment Room. Owner shall allow Provider access and use of a
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lockable equipment room in each Complex as reasonably required for the
Infrastructure.
3.2 Access to Property. Owner shall, at no cost to Provider, provide
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Provider and Provider's employees, authorized agents and contractors
with reasonable access to all portions of the Complexes as may be
necessary to fulfil Provider's obligations hereunder, including
without limitation all installation, service, maintenance and repair
obligations. Such access shall include on demand access to mechanical
rooms or similar areas of the Complex. To the extent that access to
any leased unit is required, Provider agrees to comply with any policy
or requirement generally applicable to Owner's maintenance personnel,
including any advanced notice procedures. As to all other portions of
each Complex, Provider agrees to comply with all of Owner's reasonable
access and security policies such as contacting a Complex manager when
on site.
3.3 Permit/Information Assistance. Owner shall provide Provider with
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access to all information and plans regarding the Complexes reasonably
required for the installation of the infrastructure and providing of
services hereunder, including, without limitation any "as built" or
architectural information of the Complexes and access to any
individuals or entities who regularly perform service work on the
Complexes' systems, including electrical, HVAC, and telecommunications
systems. Furthermore, Owner shall, at Provider's sole cost and
expense, take all reasonable actions, including executing permit
and/or use applications, to assist
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Provider in obtaining all permits or governmental approvals associated
with the installation, and maintenance of the Infrastructure, and
provision of the VelocityHSI Services.
3.4 Marketing/Promotion. Owner agrees to display print advertising and
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newsletters regarding the VelocityHSI Services, to include Provider
marketing materials in new tenant orientation packages and to allow
Provider reasonable use of common areas for promotional functions,
provided that Provider shall pay all costs with respect to such
promotional functions. Owner shall, as condition to leasing a unit,
require all tenants to execute the "Free Services" portion of the
standard form Subscription Agreement, provided the execution of this
portion of the Subscription Agreement shall not prevent or hinder
tenants from using other providers of services similar to the
VelocityHSI services. Provider will request assistance from Owner's
leasing consultants in marketing the VelocityHSI Services to residents
of the Complexes ("Marketing Assistance"), in exchange for the fees
described in this Agreement. Owner will not prevent its leasing
consultants from providing Marketing Assistance or from entering into
marketing agreements with Provider, provided that (i) the provision of
Marketing Assistance to Provider by such leasing consultants shall not
interfere with the performance of the duties of such leasing
consultants to Owner or with respect to the Complexes; (ii) in no
event shall any leasing consultant devote more than 5% of the time
that they devote to matters for Owner providing Marketing Assistance;
(iii) Owner shall not have any responsibility for, or other
association with, the Marketing Assistance, including any obligation
relating to the payments for the Marketing Assistance or any tax
withholding with respect to such payments; and (iv) Provider shall
enter into the agreement attached hereto as Exhibit G to retain
Owner's leasing consultants to provide Marketing Assistance.
3.5 Cooperation with Inventory. Owner shall use its best efforts to assist
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Provider in preventing theft and destruction of all portions of the
Infrastructure including Infrastructure located in the Subscriber's
unit, such as set top access units, and wireless keyboards. Such
efforts shall include, without limitation verifying that all
Infrastructure in a residential unit is accounted for and free from
obvious damage after a Subscriber vacates a unit.
3.6 Cooperation to Prevent Fraudulent Use. If Owner becomes aware of any
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illegal access of the VelocityHSI Services, Owner agrees to advise
Provider about residents who are illegally obtaining such service. If
access to an individual unit is needed to confirm such illegal use,
Owner shall cooperate to the extent permitted by state and Federal
laws governing the access to an individual unit.
4. Revenue Allocation. Owner and its leasing consultants shall be entitled to
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receive the following payments relating to the VelocityHSI Services.
4.1 Subscriber Fees. Provider shall pay Owner ten percent (10%) of all
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gross revenue received by Provider from residents of the Complexes who
subscribe for the
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VelocityHSI Services (each a "Subscriber"), subject to the limitations
set forth in Section 6.3.
4.2 Advertising and Commission Revenue. Provider shall pay Owner ten
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percent (10%) of all gross revenue received by Provider attributable
to the Complexes' Web Portal from (i) advertising displayed on the Web
Portal or (ii) any commission, referral fee, or similar payment from
any unaffiliated vendor or service provider received by reason of a
Subscriber's use or purchase of such third party's good or services
(collectively the "Third Party Revenue").
4.3 Leasing Consultants. For each new Subscriber enrolled by one of
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Owner's leasing consultants who has entered into an agreement with
Provider in the form attached hereto as Exhibit G for the provision of
Marketing Assistance, Provider shall pay such leasing consultant
twenty-five dollars ($25).
4.4 Payment Procedures.
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(a) To the extent that Third Party Revenue is generated as a result
of advertisements or the use/sale of, goods or services offered
or displayed on the Web Portal of apartment projects other than
the Complexes, Owner shall be entitled to receive a pro rata
portion of the gross revenue on a per project, per "hit," per
display or any other reasonable basis so long as such method is
consistently applied to all Complexes receiving a portion of a
particular revenue source. To the extent commercially reasonable,
it is Provider's intention to allocate Third Party Revenue to the
complex generating the revenue.
(b) For purposes of this Section 4, "gross revenue" shall mean, (i)
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as it relates to Section 4.2, all revenue actually received by
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Provider from third parties, other than Subscribers, and related
to the Complexes, net of the following items, and no other items:
discounts, returns, allowances, or similar adjustments, sales,
use or similar taxes, and (ii) as it relates to Section 4.1, any
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revenue actually received by Provider for fees paid by
Subscribers for the use of, or access to the VelocityHSI
Services.
(c) Provider shall remit to Owner all payments due under this Section
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4, allocable to the immediately preceding month, together with a
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detailed accounting thereof on or before the twenty-fifth of each
month. Such accounting shall detail:
(i) The total Subscriber revenue by major category from each
Complex (such as subscription, pay-per-use, non-recurring
fees, pass through expenses).
(ii) A breakdown of the advertising revenue detailing the revenue
allocable to each advertiser and any calculations described
in Section 4.3(a).
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4.5 Maintenance and Inspection of Records.
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(a) Provider shall keep complete and accurate books and records and
related documentation in accordance with generally accepted
accounting principles and this contract to support and document
all amounts becoming payable to Owner hereunder and concerning
revenues described in Sections 4.1 and 4.2. Provider shall
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promptly, upon written request from Owner, notify Owner of the
location at which such records are currently located. Provider
shall maintain its books and records for such period or periods
of time as may be required by the rules and regulations of the
Internal Revenue Service applicable to the retention of business
records.
(b) From time to time during the Term and for a period of one (1)
year thereafter, Owner shall have the right, to be exercised by
Owner or its designee upon thirty (30) days notice to Provider,
but not more often than annually, to audit the books and records
of Provider as necessary to verify amounts payable to Owner under
this Agreement. Provider shall make available to Owner or its
designee such books and records as are relevant to the payments
due Owner under this Agreement or as may be reasonably requested
by Owner to perform such audit. Provider shall immediately pay to
Owner any unpaid amounts due to Owner disclosed by such audit. If
the audit indicates Provider overpaid Owner, Provider shall be
entitled to deduct such amounts from future payments due
hereunder. If the audit discloses an underpayment to Owner for a
calendar quarter of more than two percent (2%) of the total
amount payable to Owner in that calendar quarter, as verified by
an independent auditing firm, Provider shall pay all reasonable
costs and expenses of such independent auditor that relate to
such audit; otherwise Owner shall pay such costs.
5. Infrastructure Ownership Operation and Repair.
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5.1 Infrastructure. Provider shall, at its sole cost and expense,
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install, operate and maintain all hardware and on-site equipment, up
to the point of connection with the Subscriber's hardware, necessary
for, or associated with, providing the VelocityHSI Services (all such
Provider equipment is collectively referred to as the
"Infrastructure"). All Infrastructure will be installed at mutually
agreed upon location(s) and utilizing agreed upon methods. The
Infrastructure, and any personal property on any Complex belonging to
Provider, shall be there at the sole risk of Provider, and Owner shall
not be liable for damage thereto or theft, misappropriation or loss
thereof, except due to Owner's gross negligence or willful misconduct.
Provider shall perform all construction and maintenance of the
Infrastructure in a safe, good and workmanlike manner in such a way as
to minimize interference with the operation of the Complex;
5.2 Operation, Maintenance and Repair.
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(a) Provider shall provide the Infrastructure, the VelocityHSI
Services and otherwise perform its obligations hereunder in
accordance with, in all material respects, federal, state and
local laws, if any, which may be applicable thereto. Provider, at
its sole cost and expense, shall promptly repair all damage to
the Complex and all improvements thereon caused by Provider and
its agents, employees and contractors to substantially original
condition, to the reasonable satisfaction of Owner.
(b) Provider agrees to keep the Infrastructure in good working order,
repair and condition throughout the term of the Agreement, and
not to materially disrupt or interfere with other providers of
services in the Complex or with any resident's use and enjoyment
of their leased premises or the common areas of the Complexes or
with Owner's operation of the Complex except to the extent
Provider is in compliance, and subject to, the provisions of
Section 3.2 this Section 5.
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5.3 Removal of Infrastructure upon Termination. Upon expiration or earlier
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termination of this Agreement, Provider shall have the right (subject
to Provider's obligation to repair damage to the Complex as set forth
in Section 5.2(a) above), at its expense, to remove the
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Infrastructure, if any, from the Property within sixty (60) days from
the date of such expiration or termination.
6. Provision of VelocityHSI Services to Subscribers.
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6.1 Resident Support and Installation. Support and installation services
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provided by Provider shall at all times conform with the service
levels specified in Exhibit "C". All such responses and support
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provided by Provider shall be in material compliance with governmental
laws and/or regulations and within general industry standards.
Requests for individual installations of VelocityHSI Services shall be
completed within a reasonable timeframe. Provider shall not enter a
leased unit except in compliance with Section 3.2. Provider will have
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its employees, agents and contractors carry identification badges when
on any Complex, in order that on-site management and residents of the
Complex may confirm that such persons are on the Complex on behalf of
Provider pursuant to this Agreement.
6.2 Subscriber Access Pricing. The initial price for subscriptions to the
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VelocityHSI Services and for ancillary changes is set forth in Exhibit
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"D". This pricing may be modified in Provider's sole and absolute
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discretion provided, however, that Provider shall not, without Owner's
prior written approval, (A) increase or decrease the price of any
subscription package by more than the greater of (i) ten dollars ($10)
per month or (ii) twenty five percent (25%) in the aggregate during
any twelve (12) month period, or (B) charge in excess of fair market
value for any hardware sold or leased to a subscriber. Such access
shall be provided at a price, service quality and content comparable
to the services of other companies which provide similar high-speed
data access technologies and services similar to the VelocityHSI
Services. Subscribers will be charged and billed individually by
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Provider for any VelocityHSI Services they receive, and Provider shall
be solely responsible for all billing and collection therefor.
6.3 Real Estate Investment Trust Protections. Notwithstanding any
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provision to the contrary in this Agreement:
(a) (i) Provider shall not provide any services to Subscribers unless
such services are also available to such Subscribers from other
telecommunications service providers, (ii) Provider shall not
provide any services to any Subscribers that it does not also
provide to other customers who are not Subscribers, (iii) any
services provided by Provider to a Subscriber will not be
customized to fit the specific needs of such Subscriber, (iv)
this Agreement is a bona fide agreement, negotiated at arm's
length between Owner and Provider, and is of a type customarily
entered into by landlords and service providers in the geographic
area in which Owner's Complexes are located, (v) the services
offered or provided by Provider to Subscribers will be selected
by Subscribers from a menu of services, all of which are
generally available to other customers of Provider, (vi) Provider
shall not provide any services to residents of a Complex unless
such services are of a type which are customarily rendered to
tenants of residential apartment buildings in the geographic
areas in which the Complex is located, and (vii) Provider shall
not enter into contracts or agreements with others that would
cause any portion of the payments received by Owner under this
Agreement to be based, directly or indirectly, on the net income
or profits of any person. Provider shall not provide any services
(the "Outside Services") to residents of the Complexes which are
beyond the scope of the VelocityHSI Services described in this
Agreement, subject to the limitations set forth in this Section
6.3(a), without Owner's permission, which permission may be given
or withheld in Owner's sole discretion.
(b) For any Outside Services provided by Provider to residents beyond
those VelocityHSI Services described in Section 6.3(a) and
approved by Owner, or any services provided to nontenants through
the Complex, except as otherwise agreed to by Owner and Provider
(i) the cost of the additional services must be borne by
Provider, (ii) a separate charge must be made for such services
pursuant to a separate service agreement with the service
recipient, (iii) the amount of the separate charge must be
received and retained only by Provider and shall not be included
in the calculation of the amount of gross revenues payable to
Owner, and (iv) Provider must be adequately compensated for such
services ((i) through (iv) above are referred to below as the
"Outside Service Requirements"). If Owner permits Provider to
perform an Outside Service subject to the Outside Service
Requirements, and outside tax counsel selected by Owner
subsequently concludes that Owner's participation in the gross
revenues generated by such Outside Service should not jeopardize
the tax status as a real estate investment trust of Owner or the
qualification of its revenues as
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"rents from real property" for federal income tax purposes, Owner
may request that such gross revenues thereafter be included in
the determination of Provider's gross revenues for purposes of
calculating the amount payable to Owner pursuant to this
Agreement. If Provider does not agree to any such request, Owner
shall be entitled to retract the approval it granted to Provider
to provide such Outside Service, in which case Provider shall
cease to provide such Outside Service. Outside Services offered
by Provider pursuant to the terms of this Section 6.3(b) shall be
set forth in written addendum to this Agreement.
7. Grant of Exclusive License. Owner shall not accept or agree to accept
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any commission, fee or other compensation from any other party
providing services similar to the VelocityHSI Services to the
Complexes, nor shall Owner provide or assist in the provision of
marketing, promotion, sales, or support of marketing or sales of
services similar to the VelocityHSI Services in or on the Complexes.
8. Public Announcements. Neither Party shall make or allow any media
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releases, public announcements, and/or public disclosures by either
Party or its employees, agents or representatives relating to this
Agreement or the subject matter hereof without the express written
consent of the other Party. The disclosing Party shall provide the
other Party with the proposed text and medium of the announcement at
least five (5) business days prior to release. If the non-disclosing
Party has not objected to the release within three (3) business days,
it shall be deemed approved. This restriction shall not apply to any
announcement beyond the control of this disclosing Party, or that is
otherwise permitted pursuant to Section 12.
9. Complex Title Matters.
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9.1 Execution and Recording of Memorandum. Concurrently with the
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execution of this Agreement, Owner shall execute, and Provider
shall be entitled to record, a Memorandum of Existence of
VelocityHSI Services and Right of Entry Agreement in
substantially the terms attached hereto as Exhibit "E" (the
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"Memorandum") for each Complex. The Memorandum shall be prepared
and executed in a form acceptable for filing in the appropriate
local recorder's office. The Parties agree that the purpose of
the Memorandum is solely to provide notice of this Agreement. In
the event of a conflict between the Agreement and the Memorandum,
this Agreement shall control.
9.2 Execution and Recording of Quit Claim Deed. Concurrently with
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the execution of this Agreement, Owner and Provider shall execute
and acknowledge a quit claim deed in the form of Exhibit "F"
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attached hereto (the "Quit Claim Deed") for each Complex. The
Quit Claim Deed shall be prepared and executed in a form
acceptable for filing in the appropriate local recorder's office.
Upon termination or expiration of this Agreement, and no sooner,
Owner may, but only in good faith and concurrently with giving
written notice to Provider, (1) file the executed
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Quit Claim Deed in the appropriate recorder's office, or (2) file
any other document in such recorder's office, which states, among
other things, that this Agreement is terminated and the easement
and rights of access, and any other interests in the Complex
(exclusive of Provider's ownership of the Infrastructure),
granted to Provider, are terminated.
9.3 Subordination and Non-Disturbance. Provider agrees that, subject
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to the concurrent execution of a non-disturbance agreement in
favor of Provider, Provider will cause this Agreement and all
rights hereunder to be subject and subordinate to all leases,
mortgages, and/or deed of trust which may now or hereafter affect
the Complex, and to all renewals, modifications, consolidations,
replacements and extensions thereof. Provider shall execute such
documents as may be reasonably required to effect the provisions
of this Section.
10. Ownership of Property.
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10.1 Owner acknowledges and agrees that as between Owner and Provider,
Provider owns all right, title and interest in and to the
VelocityHSI Services and related products, including and not
limited to trademarks, service marks, proprietary information and
all other intellectual property, including, without limitation,
all compilation copyrights with respect to VelocityHSI (to the
extent not copyrightable by a third party) and other content
relating to VelocityHSI Services as the same may be modified,
adjusted or added to at any time and from time to time. Except as
otherwise expressly provided herein, Owner shall not have or
acquire any ownership interest in or to the Infrastructure or any
property relating to the VelocityHSI Services.
10.2 The foregoing Section 10.1 shall not apply to the content
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provided by Owner for display on, or incorporation in, the Web
Portal. Owner represents and warrants that it has full authority,
through ownership or otherwise, to display and utilize and cause
Provider to display and utilize all content provided to Provider
for incorporation in any Web Portal.
10.3 Neither Party shall use the trademarks, service marks or trade
names of the other or its affiliates in any advertising or
promotional material or otherwise without the express prior
written permission of the other Party, and except as otherwise
specifically contemplated by this Agreement.
11. Taxes. Provider shall pay any taxes, assessments and other
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governmental charges or fees, attributable to its use of the Complexes
or provision of the Services, including any increase in real property
taxes, use and occupancy taxes, sales or other taxes applicable to its
payments pursuant to this Agreement (other than Owner's franchise,
income taxes or estate taxes), and any applicable taxes or assessments
against the personal property owned by Provider located in the
Building. Upon request, Provider shall provide Owner with timely
evidence satisfactory to Owner that all taxes due and payable for its
property have been paid.
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12. Confidentiality Obligations.
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12.1 Confidential Information. The receiving Party shall hold all
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Confidential Information in confidence. "Confidential
Information" shall mean (a) any information clearly marked
"Proprietary" or "Confidential"; (b) any information which by its
nature or character is clearly of the type the disclosing Party
considers confidential; and (c) any information regarding Owner's
residents. Information which is conveyed orally and does not meet
the requirements of Subsections (b) or (c), above, shall be
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deemed confidential only if prior to disclosure it is indicated
as being confidential and written confirmation identifying the
confidential or proprietary information is provided to the
receiving Party within ten (10) business days after it was
discussed orally.
12.2 Restrictions. Each Party shall use reasonable efforts and
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procedures, and at least the same efforts and procedures as are
used with such Party's own Confidential Information, to maintain
the confidentiality of Confidential Information disclosed to it
and not show or otherwise disclose such Confidential Information
without the prior written consent of the disclosing Party. Each
Party shall use the Confidential Information solely for purpose
of performing its obligations under this Agreement. Unless
approved in advanced by the non-disclosing Party, except for the
existence of this Agreement, the terms and provisions of this
Agreement shall remain strictly confidential and shall not be
disclosed to any third party other than a Party's attorneys,
accountants, other professional advisers, potential purchasers of
the Properties, and unless otherwise required by law.
12.3 Authorized Disclosures. Notwithstanding the obligations
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described in Section 12.2, above, neither Party shall have any
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obligation to maintain the confidentiality of any Confidential
Information which:
(a) based upon advice of legal counsel, the Party is requested
to disclose to comply with any applicable law or regulation;
(b) is or becomes publicly available by other than unauthorized
disclosure by the receiving Party;
(c) is independently developed by the receiving Party;
(d) is received from a third party who has lawfully obtained
such Confidential Information without a confidentiality
restriction; or
(e) if required by any court of competent jurisdiction or other
governmental authority, the receiving Party may disclose to
such authority, data, information or material involving or
pertaining to Confidential Information to the extent
required by such order, provided that the receiving Party
shall first have used its reasonable efforts to notify the
disclosing Party so that the disclosing Party may seek to
maintain the confidentiality of such data, information or
materials.
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13. VelocityHSI Services Warranty and Limitation of Liability.
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13.1 Limitations of Liability. EXCEPT FOR CERTAIN PRODUCTS AND
------------------------
SERVICES SPECIFICALLY IDENTIFIED AS BEING OFFERED BY PROVIDER,
PROVIDER DOES NOT CONTROL ANY MATERIALS, INFORMATION, PRODUCTS OR
SERVICES ON THE INTERNET. THE INTERNET CONTAINS UNEDITED
MATERIALS, SOME OF WHICH IS SEXUALLY EXPLICIT OR MAY BE
OFFENSIVE. PROVIDER HAS NO CONTROL OVER AND ACCEPTS NO
RESPONSIBILITY FOR SUCH MATERIALS. PROVIDER ASSUMES NO
RESPONSIBILITY AND RISK FOR USE OF THE VELOCITY SERVICES AND THE
INTERNET AND IS NOT RESPONSIBLE FOR EVALUATING THE ACCURACY,
COMPLETENESS, AND USEFULNESS OF ALL SERVICES, PRODUCTS, AND OTHER
INFORMATION, AND THE QUALITY AND MERCHANTABLENESS OF ALL
MERCHANDISE PROVIDED THROUGH THE VELOCITY SERVICES OR THE
INTERNET.
13.2 THE VELOCITY SERVICES ARE PROVIDED ON AN "AS IS" AND "AS
AVAILABLE" BASIS. PROVIDER DOES NOT WARRANT OR REPRESENT THE
VELOCITY SERVICES WILL OPERATE ON UNINTERRUPTED, ERROR-FREE BASIS
OR BE FREE OF VIRUSES, OR OTHER HARMFUL COMPONENTS. EXCEPT AS
EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT, PROVIDER MAKES NO
EXPRESS WARRANTIES AND OWNER WAIVES ALL IMPLIED WARRANTIES
INCLUDING, BUT NOT LIMITED TO WARRANTIES OF TITLE,
NONINFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE REGARDING ANY MERCHANDISE, INFORMATION OR SERVICE
PROVIDED THROUGH OR AS PART OF THE VELOCITY SERVICES OR THE
INTERNET GENERALLY. NO ADVICE OR INFORMATION GIVEN BY PROVIDER OR
ITS REPRESENTATIVES SHALL CREATE A WARRANTY UNLESS EXPRESSLY SET
FORTH IN THIS AGREEMENT.
13.3 Limitation of Remedies. NOTWITHSTANDING ANY OTHER PROVISION OF
----------------------
THIS AGREEMENT, NEITHER PROVIDER NOR OWNER SHALL BE LIABLE FOR
ANY REASON FOR INCIDENTAL, SPECIAL, PUNITIVE, INDIRECT,
EXEMPLARY, MULTIPLE OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT
LIMITED TO, LOST PROFITS OF ANY NATURE WHATSOEVER.
14. Indemnification. Each Party (the "Indemnifying Party") agrees to
---------------
indemnify, protect, defend and hold the other Party, and its
successors, officers, directors, employees, agents and assigns (the
"Indemnified Party") harmless from and with respect to any loss or
damage (including reasonable attorney's fees and costs), arising out
of or relating to any suit or proceeding brought against the
Indemnified Party insofar as such suit or proceeding shall be based
upon a claim by a third party alleging facts or circumstances or based
upon a claim of wrongdoing by the Indemnifying Party, provided the
Indemnified Party gives the Indemnifying Party prompt written notice
of any such claim and provides
13
the Indemnifying Party such reasonable cooperation and assistance as
the Indemnifying Party may request from time to time in the defense
thereof. The Indemnifying Party shall have the right to assume defense
of the claim with counsel reasonably acceptable to the Indemnified
Party. The Indemnified Party shall be entitled to participate in the
defense of the claim with its own counsel at its sole expense. Neither
Party shall enter into a settlement that imposes liability on the
other without the other Party's consent, which consent shall not be
unreasonably withheld, delayed or conditioned.
15. Default, Termination
--------------------
15.1 Default. Upon the occurrence of any of the following events, a
-------
Party shall be deemed to be in default under this Agreement:
(a) Material failure to perform the defaulting Party's
obligations hereunder, including but not limited to,
Provider's failure to (i) maintain the service standards set
forth in Section 6 hereof,(ii) make the payments to Owner or
---------
Owner's leasing consultants set forth in Section 4 hereof
---------
and (iii) comply with the service limits set forth in
Section 6.3;
(b) The defaulting Party's insolvency, the making of a general
assignment for the benefit of its creditors, suffering or
permitting the appointment of a receiver or similar officer
for its business or assets or availing itself of, or
becoming subject to, any proceeding under the United States
Federal Bankruptcy Laws or any federal or state statute
relating to solvency or the protection of the rights of
creditors; or
(c) Making of any warranty, representation, statement or
response in connection with this Agreement which was untrue
in any material respect on the date it was made by the
defaulting Party.
15.2 Remedies. In the event the defaulting Party fails to cure any
--------
default set forth hereunder within thirty (30) days, except for
(a) defaults under Section 15.1(b) which shall have a cure period
---------------
of ninety (90) days, and (b) defaults under Section 6 which shall
---------
have a cure period of five (5) days, and after written notice of
such default by the nondefaulting Party, the nondefaulting Party
may terminate this Agreement without further obligation on the
part of the nondefaulting Party, and pursue any claims at law or
in equity permitted under this Agreement against the defaulting
Party.
16. Dispute Resolution Procedures. Any dispute arising out of or in
-----------------------------
connection with this Agreement shall be resolved only by binding
arbitration by a panel of three arbiters, by the American Arbitration
Association in accordance with the Rules for Commercial Disputes
Resolution in San Francisco, California. Written notice of the demand
for arbitration shall be served on the other Party to this agreement
and filed with the arbitration service. The demand for arbitration
shall be made within a reasonable time after the dispute has arisen,
and in no event shall it be made after the date upon which it would
have been barred by the terms of this agreement or applicable law.
Each arbitrator
14
must be experienced in the subject matter of the arbitration.
Arbitration shall be completed not later than 180 days following its
initiation. In reaching their award, the arbitrators shall follow and
be bound by substantive California law. However, arbitrators shall in
no manner award punitive damages, damages calculated by applying a
multiplier, or any other damages excluded pursuant to Section 15.3.
------------
The award shall be in writing and shall contain findings of fact and
conclusion of law and shall set forth the nature, amount and manner of
calculation of all damages. The award shall be final and binding, and
judgment may be entered upon it in any court having jurisdiction. This
provision has been expressly agreed to by the Parties with full
understanding that it acts to waive their respective constitutional
rights to a trial by judge or jury and their respective rights to
punitive or emotional distress damages.
17. Notices. Any notice or other communication required or permitted under
-------
this Agreement shall be in writing and may be personally delivered or
sent by a nationally-recognized overnight courier or by Certified mail
return receipt requested, postage pre-paid. All notices personally
delivered shall be effective at the time of such delivery. All notices
sent by Certified mail shall be effective five (5) days after
deposited in the US mail. All notices sent by overnight courier shall
be effective one (1) business day after delivery to such courier
service. All notices transmitted by any other means shall only be
effective forty-eight (48) hours after actual receipt. All notices
shall be addressed as follows:
If to Provider at:
VelocityHSI, Inc. at:
Attn: Michael Todd
2175 North California Boulevard, Suite 810
Walnut Creek, CA 94596
Facsimile: 925-952-5697
If to Owner at:
BRE Properties, Inc.
Attn: LeRoy E. Carlson
44 Montgomery Street, 36th Floor
San Francisco, CA 94104
Facsimile: 415-445-6577
Any Party may designate a change of address, or require that notices
be provided to duplicate locations, upon ten (10) days written notice.
18. Attorneys' Fees. The prevailing Party of the dispute or controversy
---------------
resolved by arbitration or court action shall recover its attorney's
fees and costs (including costs of experts) associated with such
arbitration or court action from the other Party.
19. Assignment. Owner may assign its rights and obligations under this
----------
Agreement, in whole or in part, to an affiliate without consent of
Provider.
15
20. Miscellaneous.
-------------
20.1 Entire Agreement/Severability. This Agreement, together with all
-----------------------------
attachments and exhibits hereto, constitutes the entire Agreement
of the Parties and supersedes all prior and contemporaneous
agreements, representations and understandings between the
Parties. In the event that any provision contained in this
Agreement should, for any reason, be held to be invalid or
unenforceable in any respect, such unenforceable provisions shall
be reduced in scope or duration to the extent necessary in order
to make the same enforceable.
20.2 Amendment; Modification. The Agreement may not be supplemented,
-----------------------
amended, modified or otherwise altered except by written
instrument executed by all the Parties hereto and no course of
dealing or trade usage among or between the Parties shall be
effective to supplement, amend, modify or alter this Agreement.
20.3 Survival. Each Party's obligations under Section 12,
-------- ----------
Confidentiality Obligations, and Section 16, Dispute Resolution
----------
Procedures, shall survive the termination of this Agreement.
20.4 Choice of Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of California applicable
to contracts entered into and to be performed entirely within the
State of California by residents of the State of California.
20.5 Captions. The captions appearing in this Agreement are included
--------
solely for convenience of reference and shall not be construed or
interpreted to affect the meaning or interpretation of this
Agreement.
20.6 Hiring Prohibited. Except as otherwise provided in Section 3.4,
----------------- -----------
during the term of this Agreement and for a period of one (1)
year thereafter, no personnel of either Party who was directly
involved in the performance of this Agreement shall solicit for
hire or hire any employee of the other Party who was directly
involved in the performance of this Agreement.
20.7 Relationship of the Parties. The Parties do not intend for this
---------------------------
Agreement or the relationship established thereby to be
considered anything other than one between property owner and
independent contractor, and shall not be construed as the
formation of a joint venture or partnership between the Parties
for any purpose.
20.8 No Third Party Beneficiaries. The Parties do not intend to
----------------------------
create, and this Agreement does not create, any rights in any
entities or individuals who are not Parties to this Agreement.
20.9 Counterparts. This Agreement may be signed in counterparts, each
------------
of which shall be deemed an original and all of which together
shall be deemed to be one and the same document.
* * *
16
In witness of their agreement, the Parties have caused the Agreement to be
executed below by their authorized representatives as of the date first written
above.
PROVIDER
VelocityHSI, Inc.
By: /s/ Charles P. Wingard
--------------------------------
Name: Charles P. Wingard
Title: Senior Vice President and Chief Financial
Officer
OWNER
BRE Properties, Inc.
By: /s/ LeRoy E. Carlson
--------------------------------
Name: LeRoy E. Carlson
Title: Executive Vice President and Chief
Financial Officer
17
Exhibits:
Exhibit A: Description of Complexes
Exhibit B: Service Reliability Standards
Exhibit C: Subscriber Support Standards
Exhibit D: Schedule of Initial Pricing
Exhibit E: Sample Memorandum of Existence of Service Agreement
Exhibit F: Quit Claim Deed
Exhibit G: Form of Marketing Assistance Agreement
18
EXHIBIT A
Description of Complexes
EXHIBIT B
VelocityHSI Services Reliability Standards
PERCENT OF NETWORK AVAILABILITY
This parameter is generally indicative of the availability of the network
for Subscribers to transport and download data to and from the Internet or, in
the event that the Subscriber data is to be fulfilled by computers within
Provider's systems, generally indicative of the ability to transport data to
Provider's servers and the availability of the servers.
This parameter is calculated by dividing the number of seconds that the
network is available for each Subscriber by the total number of Subscriber-
seconds in each calendar month and multiplying by 100.
Specifically excluded from the Network Availability calculation shall be
regularly scheduled maintenance windows or ad hoc maintenance windows scheduled
and announced 24 hours in advance by Provider through the Front Page. Also,
specifically excluded from the Network Availability calculation shall be periods
of time where the access or availability is limited or prevented through Owner's
actions, intentional or otherwise, including a failure to maintain electrical
service to the Infrastructure.
Provider shall exhibit greater than 98% Network Availability per month.
EXHIBIT C
Subscriber Support/Installation Standards and Procedures
This Exhibit sets out the Subscriber support and Subscriber installation
requirements associated with the VelocityHSI Services and Provider's obligations
under the Agreement. Subject to the terms and provisions of the Agreement, the
Subscriber support and Subscriber installation procedures shall meet the
operations specification and requirements stated herein, which are generally
stated in terms of events or outcomes, rather than terms of specific hardware,
software or procedural requirements.
A. Telephone Support Centers. Provider shall establish and maintain a toll
-------------------------
free customer support number which will be capable of answering questions
regarding each of the following matters:
. Inquiries about the VelocityHSI Services
. Ordering and scheduling installation or maintenance of VelocityHSI Services
. Billing inquiries
. Initial technical support inquires
. Technical support for all VelocityHSI Services and VelocityHSI Hardware
The Telephone Support Center shall respond to calls consistent with the
following guidelines:
. All calls shall be answered consistent with the Provider/Owner cobranding.
. Operate the support center on a 24x7 basis.
. Maintain sufficient customer service staff and call center capacity to
connect to Subscribers within ___ minutes of call entering processing
operation.
. Develop and publish escalation procedure for Customer Service Representatives
related to network issues.
. Resolve billing issues within 24 hours 95% of time, on a monthly basis.
. Resolve connection issues within 24 hours 95% of time, on a monthly basis.
. Resolve technical issues within 24 hours if a phone call is required 95% of
time, on a monthly basis.
. Resolve technical issues within 48 hours if a truck roll is required 95% of
time, on a monthly basis.
. Develop and publish procedures for Owner to contact Provider regarding
technical issues related to the VelocityHSI Services.
B. Subscriber Installation Standards and Procedures.
-------------------------------------------------
Provider shall be responsible for all aspects of assisting Subscribers with
installing the necessary hardware and software associated with utilizing the
VelocityHSI services. In order to satisfy this
obligation, Provider shall perform each of the following services and comply
with the following guidelines.
. Verify that potential Subscriber' personal computers meets Provider's
established minimum requirements for the supplied software and utilization of
the VelocityHSI Services;
. Make an appointment with each new Subscriber to meet the installation
personnel for the installation of the VelocityHSI Services in the
Subscriber's unit;
. Collect the Subscriber information required to install, provision and
complete the set up of Subscriber's VelocityHSI Services. Provider will
develop an appropriate paper-form-based system or automated system to
facilitate this process;
. Provide, or cause to be provided, necessary in unit connections to the
Infrastructure using the most appropriate methods, all as previously agreed
to with Owner pursuant to Section 5.1.;
------------
. Maintain a sufficient inventory of all software and hardware required to
install the VelocityHSI Services as may be required to complete Subscriber
installations;
. Issue, on either a rental or purchase basis, and install hardware or software
which may generally be required to be installed on Subscriber's system (such
as network cards or other specialized interfaces) for the service requested
by the Subscriber;
. Meet the Subscriber at the Subscriber's location at the scheduled time within
the tolerances and limits as defined in accordance with the Customer Service
Standards discussed above;
. Offer the Subscriber, at the time of installation, a brief introduction to
the VelocityHSI Services. This introduction will include how to launch the
service, how to find the training material and the subscriber support section
on the Complex Font Page, how to find the on Provider's Web site and how to
call Subscriber Support Center for technical assistance or support;
. Obtain signatures required to verify that each Subscriber installation was
executed properly and to the satisfaction of the Subscriber; and
. Provide Owner with a copy of the installation transaction documentation
verifying that the completed installation is ready for billing.
C. Support/Installation Performance Ratios and Reporting.
------------------------------------------------------
1. Percent Subscriber Service Order Commitments Timely Met
This parameter is generally indicative of the timely beginning of work on orders
from Subscribers for new service or orders to make changes in, or repairs to,
their existing service and the successful fulfillment of agreed upon service
appointments. The parameter is calculated by dividing the total Subscriber
service orders begun on or before the date and within the hour range promised to
the Subscriber that the service order would be started by the total number of
service orders initiated in each calendar month and multiplying by 100.
Provider shall exhibit greater than 90% Subscriber Service Order Commitments
Timely Met per month.
2. Percent Subscriber Service Order Completion Commitments Timely Met
This parameter is generally indicative of the timely completion of work on
orders from Subscribers for new service or orders to make changes in or repairs
to their existing service and the timely completion of those service orders. The
timely completion parameter is calculated by
dividing the total Subscriber Service Orders completed on or before the date and
time promised to the Subscriber that the service order would be completed by the
total number of service orders initiated in each calendar month and multiplying
by 100. Provider shall exhibit greater than 90% Subscriber Service Order
Completion Commitments Timely Met per month.
3. Percent Subscriber Support Calls Timely Answered
This parameter is based upon the number of Subscriber calls to the telephone
support center answered within 15 seconds by a human operator or by an automated
response system, and if answered by the automated system, answered by a human
operator within 45 seconds of selecting to be connected to a human operator.
This parameter is calculated by dividing the number of calls answered with the
above time frames by the total number of telephone support center calls answered
in each calendar month and multiplying by 100. Provider shall exhibit greater
than 90% of Subscriber Support Calls Timely Answered within the above
parameters.
4. Percent of Trouble Reports Resolved Timely
For purposes of this item, Trouble refers to problems or errors in the
Infrastructure, or other parts of Provider's system, but shall exclude
Subscriber error, defects in Subscriber's equipment (including cabling, computer
or other hardware or software) or defects in public data distribution, including
the Internet, or other utility systems.
This parameter is related to the number of Trouble Reports resolved within the
following windows: For Trouble Reports received by Provider at the telephone
support center prior to 1:00 p.m. Pacific Time, Monday through Friday, excepting
holidays, such reports will be cleared by the end of the next business day.
This parameter is calculated by dividing the total trouble reports cleared on or
before the date and clock hour promised to the Subscriber by the total number of
trouble reports resolved in each calendar month and multiplying by 100.
Provider shall exhibit greater than 90% Trouble Reports Resolved Timely per
month, according to the terms of this section for trouble that can be resolved
by Provider alone.
5. Percent of Subscriber Bills Prepared Timely
This parameter is related to the generation of Subscriber Bills for delivery to
Subscribers by mail, electronic mail or credit card billing. This parameter is
calculated by dividing the number of Subscriber Bills generated and sent to
Subscribers within twenty (20) business days of the end of the billing cycle by
the total number Subscriber Bills generated in each calendar month and
multiplying by 100. Provider shall exhibit greater than 95% Subscriber Bills
Prepared Timely per month.
6. Percent of Subscriber Bills Prepared Accurately
This parameter is related to the accuracy of Subscriber Bills for delivery to
Subscribers by mail, electronic mail or credit card billing. This parameter is
calculated by dividing the number of Subscriber generated that do not require an
adjustment due to a billing error caused Provider by
the total number Subscriber Bills generated in each calendar month and
multiplying by 100. Provider shall exhibit greater than 95% Subscriber Bills
Prepared Accurately per month.
7. Reports
Provider shall provide to Owner reports within thirty (30) business days of the
end of each calendar month, the reports listed below in this section, each of
which may be provided separately or provided on a consolidated basis:
A report depicting total Subscribers, gross new Subscribers and gross
Subscribers terminated separated by product tier and Complex.
New service orders, trouble reports opened and closed or cleared as appropriate
separated by date and Complex, and compliance with items 1, 2 and 4 above.
Aggregate Provider telephone support center data depicting the distribution of
call waiting time in general and the percent calls answered and calls abandoned
respectively, and compliance with item 3, above
Billing summaries describing the date(s) bills were sent to Subscribers, and
compliance with items 5 and 6 above.
EXHIBIT D
Schedule of Initial Pricing
[to be reviewed and revised based on final pricing]
I. RECURRING VELOCITY SERVICE ACCESS REVENUE
- ---------------------------------------------------------------------------------------------
Type of Subscription Plan Monthly Access Fee
------------------------- ------------------
- ---------------------------------------------------------------------------------------------
Free Services (includes use of set top box and wireless keyboard to No Charge
access certain limited Complex intranet services; no internet
access)
- ---------------------------------------------------------------------------------------------
Gold Plan (Same as above with basic high speed Internet access for $34.95/month
one personal computer.)
- ---------------------------------------------------------------------------------------------
Platinum Plan (Same as Gold Plan for up to three personal computers) $59.95/month
- ---------------------------------------------------------------------------------------------
II. ONE-TIME CHARGES AND/OR PASS-THROUGH CHARGES
Installation fee $49.95
Installation fee will be waived for Free Service package and may be waived for
all other packages at Provider's discretion.
Subscriber Equipment Required for Interface
With VelocityHSI Services:
Service Calls $______/ hour
EXHIBIT E
Sample Memorandum of Existence of VelocityHSI Services
Agreement
Execution copy to be formatted in compliance with local
filing requirements.
MEMORANDUM OF EXISTENCE OF
VELOCITYHSI SERVICES AGREEMENT
A license has been granted by ______________________________, on behalf of
itself ("Grantor") to VelocityHSI, Inc., a Delaware corporation ("Grantee"),
under a certain VelocityHSI Services Agreement effective __________________,
2000 by and between Grantor and Grantee (the "Agreement"). The license permits
Grantee, among other things, the right to provide certain data transmission and
communications services, as described in the Agreement, and to engage in any
other act or activity contemplated by the Agreement at the Complex described
herein.
As used in the Agreement, the term "Complex" means that the real property
consisting of approximately ______ apartment units located in the city of
________, County of _______, State of ______, at the address commonly known as
[Name and Address of Apartment Community]. Whose legal description is as
follows:
In the event of any conflict between the terms and conditions of this
Memorandum of Existence of VelocityHSI Services Agreement and the terms and
conditions of the Agreement, the terms and conditions of the Agreement shall
control. The Parties agree that the sole purpose of this Memorandum of Velocity
Services Agreement is to provide notice of the Agreement.
Executed this ______ day of _________, 200__.
EXHIBIT F
Quit Claim Deed
Execution copy to be formatted in compliance with local
filing requirements.
FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, the undersigned hereby quit-claims to ______________________, a
_________ _______________, ("Owner") without representation or warranty, its
entire right, title and interest in the property described on Attachment 1
attached hereto and incorporated by this reference (the "Complex").
By this Quit Claim Deed, the undersigned further agrees (i) the VelocityHSI
Services Agreement (the "Agreement"), dated as of ________________________ 20__,
between the undersigned and Owner, as evidenced by the Memorandum of Existence
of VelocityHSI Services Agreement Easement recorded on _________________, 200__,
as Instrument No. _________________, in the County of __________, __________ has
expired or been terminated, and (ii) the easement and rights of access, and any
other interests in the Property granted to the undersigned therein have expired
or been terminated.
Nothing in this QuitClaim Deed shall in any way serve as a transfer or
waiver of the undersigned's rights to personal property, defined in the
Agreement as "Infrastructure," stored or installed in or on the Complex
DATED this __ day of _________, 20__.
EXHIBIT G
FORM OF MARKETING ASSISTANCE AGREEMENT
--------------------------------------
This MARKETING ASSISTANCE AGREEMENT (the "Agreement") is dated as of this ___
day of _____________, 2000, by and between VelocityHSI, Inc., a Delaware company
(the "Provider"), and ____________________ (the "Leasing Consultant").
Capitalized terms herein otherwise not defined shall have the meanings ascribed
to them in that certain Services Agreement dated August 7, 2000, by and Between
Provider and BRE Properties, Inc., a Maryland corporation ("Owner").
AGREEMENT
---------
1. Marketing Assistance. Subject to the restrictions in Section 4 hereof,
--------------------
Leasing Consultant shall provide assistance in the marketing of Provider's
Services ("Marketing Assistance") to residents of _________________ (the
"Complex"), in exchange for fees described in Section 2 hereof.
2. Payment for Services. As payment for Leasing Consultant's Marketing
--------------------
Assistance, Provider shall pay Leasing Consultant twenty-five dollars ($25) for
each new Subscriber enrolled by Leasing Consultant.
3. Independent Contractor. Leasing Consultant acknowledges and agrees
----------------------
that Leasing Consultant is an independent contractor and is solely responsible
for the reporting and payment of any applicable federal, state, local and other
taxes on payments received under Section 2 hereof. Provider shall not be
responsible any tax withholding with respect to payments paid to Leasing
Consultant under Section 2 hereof.
4. Instruction and Marketing Materials. For the purposes of assisting
-----------------------------------
Leasing Consultant with Marketing Assistance, Provider shall provide Leasing
Consultant with training and instruction for performance of Marketing
Assistance. Provider will also provide Provider's marketing materials and a
demonstration Kiosk for display in the Complex's common area to assist with
Leasing Consultant's Marketing Assistance. Leasing Consultant acknowledges and
agrees that all such marketing materials belong to Provider and shall be
promptly returned to Provider upon termination of this Agreement. Following
termination, Leasing Consultant shall not retain any written or other tangible
material containing any proprietary information of Provider.
5. Restrictions on Marketing Assistance. Provider and Leasing Consultant
------------------------------------
agree that such Marketing Assistance shall not interfere with the performance of
Leasing Consultant's duties to Owner or with respect to the Complex, and in no
event shall Leasing Consultant devote more than 5% of the time that he/she
devotes to matters for Owner to providing Marketing Assistance to Provider.
6. Release of Owner. Leasing Consultant and Provider acknowledge and
----------------
agree that Owner shall not have any responsibility for, or other association
with, the Marketing Assistance, including any obligation relating to the
payments for the Marketing Assistance, any
tax withholding with respect to such payments, or the nature or quality of the
services provided hereunder.
7. Assignment. This Agreement may not be assigned by Leasing Consultant,
----------
but may be assigned by Provider to any successor to its business and will inure
to the benefit and be binding upon any such successor.
8. No Contract for Employment; Termination. Leasing Consultant
---------------------------------------
acknowledges that Leasing Consultant's contract with Provider is at will. This
Agreement shall not confer upon Leasing Consultant any right of continued or
future employment by Provider or any right to compensation or benefits from
Provider except the rights specifically stated in Section 2 hereof, and shall
not limit the right of Provider to terminate this Agreement at any time with or
without cause.
IN WITNESS WHEREOF, the parties have executed this Marketing
Assistance Agreement as of the date and year first written above.
VELOCITYHSI, INC.,
a Delaware corporation
By:______________________________
Name:
Title:
LEASING CONSULTANT
_________________________________
Name: