Exhibit 10.14
Cable Internet Agreement
This is an Agreement to provide Internet access using the PeRKInet(TM) system
between Internet Ventures, Inc., a California corporation ("Ventures") and
CoxCom, Inc., d/b/a Cox Communications, Humboldt, a Delaware corporation
("Cox"), according to the terms and conditions set forth below as of this date
January 14, 1998 (the "Agreement").
Recitals
WHEREAS, Cox provides cable television service to residential and commercial
customers in the Humboldt County area;
WHEREAS, Cox would like to offer high speed Internet access to its customers;
WHEREAS, Ventures can provide Internet access through cable television systems
using its PeRKInet(TM) system;
WHEREAS, Cox would like Ventures to install and maintain a PeRKInet(TM) system
to allow Cox to provide high speed Internet access to Cox's customers;
Agreement
NOW THEREFORE, in consideration of the premises and the mutual dependent
promises hereinafter set forth, the parties hereto agree as follows:
1. Equipment Ventures will provide the necessary equipment to operate
PeRKInet(TM), the equipment will remain the sole property of Ventures and
Ventures will be responsible for removing the equipment within thirty (30) days
after the termination of this Agreement.
Ventures will indemnify Cox for any damage that Ventures or its employees
cause to Cox's equipment. Correspondingly, Cox will indemnify Ventures for any
damage that Cox or its employees cause to Ventures' equipment.
2. Responsibility for Data Transmission Ventures will be responsible for
transmission of data from the Internet to Cox's headend and Cox will be
responsible for the transmission of data through the RF equipment from the
headend to Cox's PeRKInet(TM) subscribers. Protocol conversion for communication
between Cox's PeRKInet(TM) subscribers and PeRKInet(TM) will take place on Cox's
system. The protocol conversion equipment will be located in Cox's headend and
will be operated by Cox. Ventures will lease such protocol conversion equipment
to Cox for $10.00 per year during the term of this agreement. Cox will also be
responsible for generating,
storing and making available the Cox web site, which will be the home page for
the PeRKInet(TM) subscribers. In this regard, Cox will provide the necessary
hardware and software which will remain Cox's sole property.
3. Revenue Cox will charge its customers nineteen dollars and ninety five
cents ($19.95) per month plus any applicable taxes for 256 Kbps access to the
PeRKInet(TM) system. Cox will pay $11.97 to Ventures for each Cox customer of
256 Kbps access to the PeRKInet(TM) system. Cox will charge its customers ninety
five dollars ($95.00) per month plus any applicable taxes for 10 Mbps access to
the PeRKInet(TM) system. Cox will pay $47.50 to Ventures for each Cox customer
of 10 Mbps access to the PeRKInet(TM) system. Upon mutual agreement, Cox and
Ventures may increase or decrease the price it charges customers provided that
Cox will pay 60% of the pretax price for 256 Kbps access and 50% of the pretax
price for 10 Mbps access to Ventures in such event. All customers served under
this Agreement will be Cox's customers.
4. Payment Terms Cox's payment to Ventures will be due forty-five (45) days
from the date that Cox bills its customers for the PeRKInet(TM) service fee. Cox
will not be liable to Ventures for fees deemed uncollectible by Cox after Cox
has used due diligence in collection efforts. Due diligence will include
employing the same methods that Cox employs when Cox's customers do not pay for
their basic cable service. Ventures will have no recourse against Cox's
customers for such payment.
5. Late Charges Payments that are more than sixty (60) days past due will
accrue interest at the rate of one and one-half percent (1.5%) per month.
6. Marketing Cox and Ventures will jointly market the PeRKInet(TM) service.
Ventures will market PeRKInet(TM) by advertising it to the members of its local
Internet Service Provider ("ISP") and other computer users. Cox will provide 80
30 second commercials per month on local avails for the PeRKInet(TM) product.
7. 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.
Notwithstanding the foregoing, Cox may terminate this Agreement if at any
time more than one year after the date of this Agreement fewer than three
hundred (300) Cox customers are subscribing to PeRKInet service.
If either party breaches any material provision of the Agreement and fails
to cure that breach within thirty (30) days of receipt of written notice
thereof, the non-defaulting party may declare this Agreement to be terminated by
written notice of the defaulting party.
Additionally, Cox may immediately terminate this Agreement if Cox
determines, in its
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reasonable discretion, that the PeRKInet(TM) service damages or jeopardizes the
security, integrity, functionality or quality of Cox's system.
8. 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 OR INABILITY TO USE PERKINET(TM) OR OUT OF ANY BREACH OF ANY
WARRANTY. COX EXPRESSLY ACKNOWLEDGES THAT THE PROVISIONS OF THIS PARAGRAPH SHALL
ALSO APPLY TO THE THIRD PARTY CONTENT. NOTWITHSTANDING THE ABOVE, VENTURES
WARRANTS THAT ITS EQUIPMENT AND THE PERKINET(TM) SERVICE DO NOT INFRINGE THE
PATENT, TRADE MARK, COPYRIGHT OR OTHER PROPERTY RIGHTS OF ANY THIRD PARTIES.
VENTURES SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS COX AGAINST ANY SUITS,
LIABILITIES, DAMAGES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEY'S FEES)
ARISING FROM OR RELATED TO ANY ALLEGATIONS OF INFRINGEMENT MADE BY THIRD
PARTIES.
9. Books and Records During the term of this Agreement and for one year
thereafter, Cox shall keep and maintain complete and accurate records pertaining
to its customers receiving the PeRKInet(TM) service.
10. Audit Ventures shall have the right, upon reasonable notice to Cox and no
more than once in any calendar year, to audit the books and records of Cox and
to make copies during normal business hours. In the event that the audit reveals
underpayment by Cox by more than five percent (5%) of the total owed Ventures
during the period of the audit, then Cox shall pay Ventures the reasonable cost
of the audit, in addition to all unpaid fees and late charges. Ventures' right
to audit will expire one year after this Agreement terminates.
Cox shall have the right, upon reasonable notice to Ventures and no more
than once in any calendar year, to audit the books and records of Ventures and
to make copies during normal business hours. In the event that the audit reveals
any PeRKInet(TM) accounts unknown to Cox by more than five percent (5%) of the
total Cox accounts on the PeRKInet(TM) system, during the period of the audit,
then Ventures shall pay Cox the reasonable cost of the audit, in addition to
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all unpaid fees and late charges. Cox's right to audit will expire one year
after this Agreement terminates.
11. Non-Ownership Both Ventures and Cox do not intend to create an equity
interest by either party in the other party.
12. Trademarks The trademarks, PeRKInet(TM), Community Wide Web(TM) and other
trademarks used by Ventures (collectively, the "Marks") are Ventures' exclusive
property. Ventures grants Cox a limited and non-exclusive license to use the
Marks solely for the purpose of offering the PeRKInet(TM) service to Cox's
customers. Cox may not alter the Marks, nor may Cox sell the Marks, nor may Cox
authorize any third party to sell or use the Marks. Ventures shall not use Cox's
trademarks without Cox's prior written consent.
13. Assignment Neither Ventures nor Cox 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 Ventures or Cox shall have the right, without consent of the other
party, to assign its rights hereunder to any affiliate or pursuant to a merger,
stock sale or sale of exchange of substantially all of the assets of the
respective company involved.
14. 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.
15. 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.
16. 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 all 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.
Similarly, Cox 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. Cox's performance
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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,
Cox's performance of this Agreement is in accordance with, and fully authorized
by, Cox's franchise.
17. 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
Internet Ventures, Inc.
211 Via Anita
Redondo Beach, CA 90277
Telecopier (310) 378-0494
If to Cox to:
Dorothy Lovfald
Cox Communications Humboldt
911 West Wabash Ave.
Eureka, CA 95501
Telecopier: (707) 444-9017
Either party listed above shall be entitled to specify a different address
by giving written notice as stated above to the other party.
18. Amendments This Agreement may be amended or modified only by written
instrument executed and delivered by each of the parties hereto.
19. 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 and accounting fees and expenses and any income tax liability.
20. Confidentiality All information related to the purpose of this Agreement
that the parties exchange, and which they identify as confidential, shall not be
disclosed to any other entity or individual during the term of this Agreement
and for one year thereafter without the other party's prior written consent.
Notwithstanding the above, information which is or becomes publicly known shall
not be subject to this confidentiality obligation.
21. 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 arbitration conducted under the Commercial
Arbitration Rules of the American Arbitration Association then in force and
effect. The seat of such arbitration shall be Los Angeles, California.
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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.
22. Governing Law This Agreement shall be construed and governed in accordance
with the laws of the State of California without giving effect to California's
choice of law rules.
23. Severability It is the intention of both Cox 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.
24. 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 party 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.
25. 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 patties have duly executed this Agreement as of the date
first above written.
Internet Ventures, Inc.
By: /s/ Donald A. Janke
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Title: President
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CoxCom, Inc. d/b/a
Cox Communications Humboldt
By: /s/ Dorothy Lanfold
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Title: Vice President
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