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Exhibit 3.5
High Speed Internet Services
Memo of Understanding
(MOU)
THIS Memo of Understanding ("MOU") dated the 12th day of May, 2000.
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BETWEEN: Cinema Internet Networks Inc. (herein called "CinemaWorks") a
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Canadian corporation whose address is .3150 Celtic Ave. Bldg#2, Vancouver,
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B.C. V6N 3X7 AND: GalaVu Entertainment Network Inc. (herein called
"GalaVu") whose address is located at. 10 Meteor Drive, Toronto, Ontario,
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Canada M9W 1A4.
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WHEREAS:
A. CinemaWorks and GalaVu seek to sell, using the CinemaWorks Darwin
`partner' agreement, high speed internet services to hotels in Canada.
B. The purpose of this MOU is to reach a general understanding of a
business relationship and move toward a commercial agreement regarding
business parameters such as sharing revenue as per the CinemaWorks
Darwin Agent Agreement.
C. This MOU attempts to outline attempts to define individual and joint
company responsibilities regarding sales, installation, etc.
D. GalaVu currently provides PPV movies and other services to
approximately 200 hotels in Canada. Some of GalaVu's PPV contracts
include the right to provide data services as well as movies.
E. The parties agree to make their best efforts to execute by the various
the dates and timeframes agreed to herein, certain commercial
agreements and certain tasks regarding the business points and plans
agreed to in this MOU.
F. This MOU is only valid only if another integral MOU to this document
is signed by the appropriate parties. That MOU is titled: High Speed
Internet "Content" Memo of Understanding (MOU), and will be signed by
Darwin, GalaVu and CinemaWorks.
NOW THEREFORE, the parties hereby agree to details of the MOU as follows:
1.0 CinemaWorks' Responsibilities
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1.1. CinemaWorks agrees to share its agreement with Darwin Networks with
GalaVu in an agreed upon split of revenue from that agreement, the points and
breakout of which are attached as Schedule A. The final negotiated revenue
sharing arrangements will be specified in the commercial agreement between
the parties that follows this MOU.
1.2 CinemaWorks will assist GalaVu with sales in GalaVu hotels at GalaVu's
option. This optional assistance will be provided under terms and conditions
to be designated in the commercial agreement between the parties.
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1.3 CinemaWorks will provide GalaVu with all Darwin related contracts,
marketing material, forms, and so on, including all documents that are needed
to sell GalaVu's hotels on Darwin's high speed internet services. In its
simplest form, GalaVu and CinemaWorks are responsible for submitting signed
contracts via CinemaWorks to Darwin.
1.4 CinemaWorks will draft the formal legal commercial document that follows
this MOU and will use its best efforts to produce a first draft for GalaVu's
perusal within two weeks of signing this MOU with the target date for the
final version and signature by the parties to 30 days from signature of this
MOU.
1.5 As good faith, CinemaWorks will include any GalaVu hotels under
negotiation at the time of signing the commercial agreement between the
parties.
2.0 GalaVu's Responsibilities
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2.1. GalaVu's primary responsibility is to put forth its best efforts to sign
Darwin hotel internet service contracts with hotels that currently carry
GalaVu's movie services. After these hotels are exhausted, then other avenues
may be explored by the parties.
2.2 At GalaVu's option, GalaVu will provide CinemaWorks with labor to assist
in the installation of GalaVu's hotels. CinemaWorks will pay its standard
rates for labor.
2.3 GalaVu will lead all sales efforts to its hotels and may opt for
CinemaWorks to assist in certain localities, such as British Columbia.
2.4 GalaVu will have the option to assist CinemaWorks with training and
training updates for GalaVu hotels' front desk and engineering personnel.
Compensation will be determined before work begins and is CinemaWorks' sole
responsibility to negotiate with Darwin Networks.
2.5 GalaVu will work with CinemaWorks and Darwin to offer high speed
internet access to hotels, as long as Darwin continues to pay for capital
costs of the high speed internet services. It is Darwin's sole right to
accept or refuse a particular hotel contract.
2.6 In order to move forward and begin installing GalaVu properties while
the "content" agreement is being completed and executed, GalaVu will, upon
execution of this MOU, immediately assist CinemaWorks in signing six (6)
GalaVu hotels to Darwin Service agreements.
2.7 a. GalaVu will attach as Schedule B, the list of the proposed six (6)
hotels that are intended to be sold Darwin's high speed internet
services as of this date.
b. CinemaWorks and GalaVu will prepare a memorandum/proposal to each
GalaVu hotel with regard to the Darwin's high speed services. The
parties will prepare this and GalaVu will use best efforts to send it
to each of the six GalaVu hotels within 3 days of signature of this
MOU. The revenue share between the parties for these first six hotels
will be as proposed in Attachment A of this MOU.
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3.0 CinemaWorks and GalaVu's Joint Understandings and Responsibilities:
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3.1 Both parties agree to use their best efforts to conclude a formal
commercial agreement that be completed by the first week of June, 2000, so
that the parties can disclose their agreement business via news release in
order to fully comply with the regulatory authorities. Both parties will
jointly approve of the language used in this release and others that may
follow.
3.2 It is understood by the parties that they will work together toward the
common strategy of signing and installing as many GalaVu hotels as possible
with Darwin's services, in as short a time as possible.
3.3 Both parties agree that the minimum term of each agreement with each
hotel will extend to five (5) years to accommodate the initial term of
Darwin's hotel agreements.
3.4 Both parties understand that they are mutually dependent upon one
another for the completion of certain tasks to the performed by the other,
the completed sequence of these tasks will result in the successful launch of
the business contemplated by the parties. These tasks may be started and
ongoing before the completion of the formal commercial agreement.
3.5 Both parties agree to work within Darwin's parameters, rules and
regulations such as making sure that all news releases mentioning Darwin are
first approved by Darwin.
3.6 For greater certainty, this memorandum of understanding is non-binding
and none of the parties will be bound by the terms of this MOU until the full
agreement is signed by all parties.
SIGNED, SEALED AND DELIVERED BY: SIGNED, SEALED AND DELIVERED BY:
Cinema Internet Networks Inc. GalaVu Entertainment Inc.
/s/ Bill Massey /s/ Brad Schroeder
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Bill Massey Brad Schroeder
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Print Name Print Name
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Schedule A
CinemaWorks Revenue Sharing Agreement with Darwin and CinemaWorks'
Sharing of that Revenue with GalaVu Entertainment
[*]
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* Information omitted pursuant to a request for confidential treatment.
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Schedule B
List of Six GalaVu Hotels
1.
2.
3.
4.
5.
6.
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