EXHIBIT 10.4
WIRELESS CABLE INTERNET
REVENUE SHARING AGREEMENT
This is an Agreement to share the revenue from Internet access using the
PeRKInet(TM) System between Internet Ventures, Inc., a California corporation,
("Ventures") and American Telecasting of Medford, Inc. ("ATM"), a wireless cable
television operator, according to the terms and conditions set forth below as of
this date October 8, 1997 (the "Agreement").
Recitals
WHEREAS, ATM provides wireless cable television service to residential and
commercial customers in the Medford, Oregon area;
WHEREAS, ATM would like to offer high speed Internet access to its customers;
WHEREAS, Ventures can provide Internet access through wireless cable television
systems using its PeRKInet(TM) system;
WHEREAS, ATM would like Ventures to install and maintain a PeRKInet system in
tile ATM headend utilizing the frequency on the MDS-2A, call sign KNSC239, to
provide high speed Internet access to ATM's customers;
Agreement
NOW THEREFORE, in consideration of the premises and mutual dependent promises
hereinafter set forth, the parties hereto agree as follows:
1. Equipment: Ventures will provide tile equipment necessary to transmit data
from the Internet through the ATM's wireless cable system. The equipment that
Ventures provides will remain Ventures' sole property.
During the term of the Agreement, Ventures will be responsible for
operating and maintaining the equipment. ATM will provide Ventures with
reasonable access to the equipment during normal business hours and at other
times as the parties shall mutually agree.
Ventures will be responsible for removing the equipment from the ATM
property within thirty (30) days after this Agreement terminates. When Ventures
removes its equipment, it will return any of ATM's equipment that Ventures
modified to its original condition. Ventures shall
grant ATM a purchase option to acquire the transmit equipment, used on Station
KNSC23 9, at fair market value within sixty (60) days from the termination of
this Agreement.
Ventures will indemnify ATM for any damage that Ventures or its employees
cause to ATM's equipment. Correspondingly, ATM will indemnify Ventures for any
damage that ATM or its employees cause to Ventures' equipment.
2. Revenue: Ventures will charge its residential customers fourteen dollars
and ninety-five cents ($14.95) per month plus any applicable taxes for access to
the PeRKInet(TM) system. ATM shall receive twenty percent (20%) of the pretax
amount ($2.99) and the remaining eighty percent (80%) shall remain with Ventures
($11.96). For business customers, Ventures will charge ninety five dollars
($95.00) per month plus any applicable taxes, which will include two IP
addresses, for additional IP addresses up to a maximum of twenty there will be a
ten dollar ($10.00) charge, plus any applicable taxes, per IP address. ATM shall
receive forty percent (40%) of the pretax amount for business customers and the
remaining sixty percent (60%) shall remain with Ventures.
3. Payment Terms: Venture's payment to ATM will be due thirty (30) days from
the date that Ventures bills its customers for the PeRKInet(TM) service.
4. Late Charges: Payments that are more than thirty (30) days past due will
accrue interest at the rate of one and one-half percent (1.5%) per month.
5. Marketing: ATM and Ventures will jointly market the PeRKInet"I service.
Ventures will market PeRKInet by advertising it to the members of its local
Internet Service Provider ("ISP") and other computer users. ATM will provide one
hundred (100) minutes of avails per month of video commercials or will
contribute an equivalent amount of advertising through the use of bill stuffers,
billing messages, bang tail envelope messages or audio commercials or other
items which may be of no cost to ATM. Ventures shall reimburse ATM for any bill
stuffers which exceed one (1) ounce in weight and which cause additional postage
fees to be paid in order to deliver customer bills.
6. Term: This Agreement will run for a term of three years. At the end of this
term the Agreement will automatically be renewed for additional one year terms
unless either party gives written notice to the other at least ninety (90) days
prior to the Agreement's anniversary of that party's intention not to renew.
7. Termination: Either party may terminate the Agreement upon the occurrence
of any of tile following:
(a) the other party shall (i) seek the liquidation, reorganization,
dissolution or winding up of itself (other than dissolution or winding up for
the purposes of reconstruction or amalgamation) of tile composition or
readjustment of all or substantially all of its debts, (ii) apply for or consent
to the appointment of, or the taking of possession by, a receiver, custodian,
trustee
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or liquidator of itself or of all or substantially all of its assets, (iii) make
a general assignment for the benefit of its creditors, (iv) commence a voluntary
case under the United States Bankruptcy Code, (v) file a petition seeking to
take advantage of any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or readjustment of debts, or (vi) adopt any resolution
of its Board of Directors or stockholders for the purpose of effecting any of
the foregoing; or
(b) a proceeding or case shall be commenced without the application
or consent of the other party and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of the
following shall be entered and continue unstayed in effect, for a period of
ninety (90) days from and after the date service of process is effected upon the
other party, seeking (i) its liquidation, reorganization, dissolution or winding
up, or the composition or readjustment of all or substantially all of its debts,
(ii) the appointment of a trustee, receiver, custodian, liquidator or the like
of itself or, of all or substantially all of its assets, or (iii) similar relief
under any law relating to bankruptcy, insolvency, reorganization, winding up or
composition or readjustment of debts; or
(c) upon or after the breach of any material provision of the
Agreement by the other party if the breaching party has not cured such breach
within thirty (30) days.
8. Indemnification: Each party agrees to indemnify and hold the other, its
employees, consultants and agents harmless from any loss, liability or expense,
on account of damage to property and injuries, including death, to all persons,
arising from any of its acts or omissions arising out of this Agreement and, at
its expense, to defend any suit or proceeding brought against the other party on
account of such damages, including reasonable attorney's fees, and satisfy all
judgments which may be incurred by or rendered against the other party.
9. Warranty: NEITHER VENTURES NOR ANY OF ITS, LICENSORS, EMPLOYEES, OR AGENTS
WARRANT THAT ACCESS TO THE INTERNET WILL BE UNINTERRUPTED OR ERROR FREE; NOR
DOES VENTURES OR ANY OF ITS LICENSORS, EMPLOYEES OR AGENTS MAKE ANY WARRANTY AS
TO THE RESULTS TO BE OBTAINED FROM USE OF THE ACCESS. THE ACCESS IS DISTRIBUTED
ON AN "AS IS" BASIS WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF TITLE OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE WARRANTIES
WHICH ARE IMPLIED BY AND INCAPABLE OF EXCLUSION, RESTRICTION, OR MODIFICATION
UNDER THE LAWS APPLICABLE TO THIS AGREEMENT. NEITHER VENTURES NOR ANYONE ELSE
INVOLVED IN CREATING, PRODUCING OR DELIVERING THE ACCESS SHALL BE LIABLE FOR ANY
DIRECT, INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF
USE OF PERKINET(TM) OR INABILITY TO USE PERKINET(TM) OR OUT OF ANY BREACH OF ANY
WARRANTY. ATM EXPRESSLY ACKNOWLEDGES THAT THE PROVISIONS OF THIS PARAGRAPH SHALL
ALSO APPLY TO THE THIRD PARTY CONTENT.
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10. Books and Records: During the term of this Agreement and for one year
thereafter, ATM shall keep and maintain complete and accurate records pertaining
to its customers receiving the PeRKInet(TM) service.
11. Audit: ATM shall have the right to audit the books and records of Ventures
and to make copies during normal business hours. In the event that the audit
reveals underpayment by Ventures by more than five percent (5%) of the total
owed ATM during the period of tile audit, then Ventures shall pay ATM the
reasonable cost of the audit, in addition to all unpaid fees and late charges.
ATM's right to audit will expire one year after this Agreement terminates.
12. Non-Ownership: Both Ventures and ATM do not intend to create an equity
interest by either party in the other party.
13. Trademarks: The trademarks, PeRKInet(TM) Community Wide Web(TM) and other
trademarks used by Ventures, (collectively, the "Marks") are Ventures' exclusive
property. Ventures grants ATM a limited and non-exclusive license to use the
Marks solely for the purpose of offering the PeRKInet(TM) service to ATM's
customers. ATM may not alter the Marks, nor may ATM sell the Marks, nor may ATM
authorize any third party to sell or use the Marks.
14. Assignment: neither Ventures nor ATM may assign or transfer either its
rights or obligations under this Agreement in whole or in part, by operation of
law or otherwise, without the written consent of the other provided, however,
that either party may assign this Agreement to any of its respective wholly
owned or partially owned subsidiaries without the written consent of the other
party.
15. Waiver: The failure of either party to enforce at any time or for any
period of time any of the provisions of this Agreement shall not be construed as
a waiver of such provisions or of the right of such party thereafter to enforce
each and every such provision.
16. Force Majeure: Neither party shall be liable to the other for failure to
fulfill its obligations hereunder (other than the obligation to make all
payments due hereunder) if such failure is caused by or arises out of an act of
God, war, strike, riot, labor dispute, national disaster, technical failure
(including the failure of all or part of the Internet) or any other reason
beyond the control of the party whose performance is prevented during the period
of such occurrence (a "Force Majeure Event"). Lack of financial resources shall
not under any circumstances constitute a Force Majeure Event.
17. Corporate Authority: Ventures is a corporation duly organized, validly
existing and in good standing under California law with the power to carry on
its business as it is now being conducted and as described herein. The execution
of this Agreement and the performance of all obligations under this Agreement
have been duly authorized by ail requisite corporate action. Ventures'
performance of its obligations under this Agreement will not violate any other
agreement, instrument or document or any order of any court or government
agency.
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Similarly, ATM is a corporation duly organized, validly existing and in
good standing under Delaware law with the power to carry on its business as it
is now being conducted and as described herein. The execution of this Agreement
and the performance of all obligations under this Agreement have been duly
authorized by all requisite corporate action. ATM's performance of its
obligations under this Agreement will not violate any other agreement,
instrument or document or any order of any court or government agency. Further,
ATM's performance of this Agreement is in accordance with, and fully authorized
by, ATM's franchise, if applicable.
18. Notices: All notices or other communications regarding this Agreement shall
be in writing and shall be deemed to have been duly given if delivered by hand,
sent by registered mail return receipt requested or sent via telecopier with a
copy sent by first class mail, as follows:
If to Ventures to:
Donald A. Janke
211 Via Anita
Redondo Beach, CA 90277
Telecopier 310-378-0494
If to ATM to:
American Telecasting of Medford, Inc.
5575 Tech Center Drive - Suite 300
Colorado Springs, CO 80919
Attn: President
Telecopier (719) 260-5010
Either party listed above shall be entitled to specify a different address by
giving written notice as stated above to the other party.
19. Amendments: This Agreement may be amended or modified only by written
instrument executed and delivered by each of the parties hereto.
20. Expenses: Each party to this Agreement shall pay its own expenses in
connection with preparation, execution and delivery of this Agreement and the
transactions contemplated hereby, including, without limitation, any and all
legal, engineering and accounting fees and expenses and any income tax
liability.
21. Confidentiality: All information that the parties exchange, which they
identify as confidential, shall not be disclosed to any other entity or
individual without the other parry's prior written consent.
22. Arbitration: All claims and disputes and other matters in question between
the parties hereto, arising out of or relating to this Agreement shall be
resolved exclusively through binding
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arbitration conducted under the Commercial Arbitration Rules of the American
Arbitration Association then in force and effect. The seat of such arbitration
shall be Denver, Colorado. This agreement to arbitrate shall be enforceable
under the prevailing law. The award rendered by the arbitrator(s) shall be final
and binding, and judgment may be entered in any court having jurisdiction
thereof,
Notice of the demand for arbitration shall be given by the aggrieved party
to the other party to this Agreement and a copy thereof shall be filed with the
American Arbitration Association. The demand for arbitration shall be made
within thirty (30) days after the claim, dispute or other matter has arisen.
In the event a dispute is submitted to arbitration, the arbitrator(s) shall
award costs and reasonable attorney's fees to the prevailing party.
23. Governing Law: This Agreement shall be construed and governed in accordance
with the laws of the State of Colorado without giving effect to Colorado's
choice of law rules.
24. Severability: It is the intention of both ATM and Ventures to enter into a
complete agreement in compliance with California law, should any provision of
this agreement not be in compliance with California law, such inconsistent
provision shall be deemed superseded by such law or rule, and the agreement
shall otherwise be fully enforceable and in effect.
25. No Third Party Rights: Nothing in this Agreement, whether expressed or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligations or liability of any third parry to any party to this
Agreement, nor shall any provision give any third party any right of subrogation
or action over or against any party to this Agreement.
26. Entire Agreement: This Agreement constitutes the entire agreement of the
parties and supersedes all prior understandings between the parties, whether
oral or written, with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
First above written.
Internet Ventures, Inc.
By: /s/ Charles A. Spann
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Charles A. Spann
Title: Vice President - Business Development
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Date: 10/3/97
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American /Telecasting of Medford, Inc.
By: /s/ Robert D. Hostetler
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Robert D. Hostetler
Title: President
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Date: 10/8/97
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FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
in Reply Refer to:
1800E
February 25, 1999
Charles A. Spann
American Telecasting of Medford, Inc.
5575 Tech Center Drive, Suite 300
Colorado Springs, CO 80919
In re: American Telecasting of Medford, Inc., Request for Special Temporary
Authority EMDMP-990209UJ (Ch. 2A) at Medford, Oregon
Dear Mr. Spann:
This is in reference to your request filed February 9, 1999 on behalf American
Telecasting of Medford, Inc., for Special Temporary Authority (STA) to operate
Multipoint Distribution Service (MDS) station KNSC239 at Medford, Oregon.
Pursuant to 47 C.F.R. ss. 21.25, we hereby grant special temporary authority to
operate the above-referenced MDS station as proposed for a period of 60 days
from the date of this letter. This STA permits American Telecasting of Medford,
Inc. to operate facilities using an equivalent isotopically radiated power
(EIRP) of 25.5 d8w, digital modulation desires of 640QAM and SVSB with a
vertically polarized directional antenna and a transmitting center lobe height
of 22.9m at 42(degree) 21' 23" North Latitude, 122(degree) 58' 33" West
Longitude. This STA grant is based on the submissions of American Telecasting of
Medford, Inc. as well as the Commission's independent review of the request, and
is subject to but not limited to, the following condition:
That this authorization or a copy thereof must be posted pursuant to the
requirements of 47 C.F.R. ss. 21.201.
This ST is also subject to the condition that no impermissible interference be
caused to any authorized station. The Commission reserves the right to modify or
cause this authority without prior notice. Lastly this STA may not be assigned
or transferred.
Sincerely,
/s/ Sharon Bertaisen
Sharon Bertaisen
Supervisory Attorney
Video Services Division
Mass Media Bureau
cc: Suzanne S. Goldwyn, Esq.